SECURITIES AND EXCHANGE COMMISSION
                             WASHINGTON, D.C. 20549


                                    FORM l0-Q

(Mark One)

|X|  QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE
     ACT OF 1934

     For the quarterly period ended September 30, 2000

                                       OR

| |  TRANSITION  REPORT  PURSUANT  TO  SECTION  13 OR  15(d)  OF THE  SECURITIES
     EXCHANGE ACT OF 1934

For the transition period from                            to
                                -------------------------    -------------------

                         Commission file number 0-24168
                                                -------

                            TF FINANCIAL CORPORATION
--------------------------------------------------------------------------------
             (Exact name of registrant as specified in its charter)



               Delaware                                    74-2705050
--------------------------------------------------------------------------------
(State or other jurisdiction of incorporation            (I.R.S. employer
or organization)                                        identification no.)

3 Penns Trail, Newtown, Pennsylvania                       18940
--------------------------------------------------------------------------------
(Address of principal executive offices)                 (Zip Code)

Registrant's telephone number, including area code         215-579-4000
                                                   -----------------------------
                                       N/A
--------------------------------------------------------------------------------
               Former name, former address and former fiscal year,
                         if changed since last report.

     Indicate by check whether the registrant (1) has filed all reports required
to be filed by Section 13 or 15(d) of the Securities Exchange Act of 1934 during
the  preceding 12 months (or for such  shorter  period that the  registrant  was
required  to file  such  reports),  and  (2) has  been  subject  to such  filing
requirements for the past 90 days. Yes  X     No
                                       ---       ---

                      APPLICABLE ONLY TO CORPORATE ISSUERS:


     Indicate the number of shares  outstanding of each of the issuer's  classes
of common stock as of the latest practicable date: November 1, 2000
                                                   ----------------

               Class                                 Outstanding
   ----------------------------------        ----------------------------
     $.10 par value common stock                   2,801,338 shares


<PAGE>

                    TF FINANCIAL CORPORATION AND SUBSIDIARIES

                                    FORM 1O-Q

                    FOR THE QUARTER ENDED SEPTEMBER 30, 2000


                                      INDEX


                                                                           Page
                                                                          Number
                                                                          ------

PART I - CONSOLIDATED FINANCIAL INFORMATION

Item     1.  Consolidated Financial Statements                               3
Item     2.  Management's Discussion and Analysis of Financial
             Condition and Results of Operations                             8
Item     3.  Quantitative and Qualitative Disclosures about Market Risk     16

PART II- OTHER INFORMATION

Item     1.       Legal Proceedings                                         17
Item     2.       Changes in Securities and Use of Proceeds                 17
Item     3.       Defaults Upon Senior Securities                           17
Item     4.       Submission of Matters to a Vote of Security Holders       17
Item     5.       Other Information                                         17
Item     6.       Exhibits and Reports on Form 8-K                          17

SIGNATURES                                                                  18

                                       2
<PAGE>
                    TF FINANCIAL CORPORATION AND SUBSIDIARIES
                 CONSOLIDATED STATEMENTS OF FINANCIAL CONDITION
                                 (in thousands)
                           Unaudited Audited Unaudited
<TABLE>
<CAPTION>
                                                                                    September 30,   December 31,   September 30,
                                                                                         2000           1999            1999
                                                                                         ----           ----            ----
                                   Assets
<S>                                                                                  <C>            <C>             <C>
Cash and cash equivalents                                                               $10,095        $16,715         $16,422
Certificates of deposit in other financial institutions                                     457            847           1,347
Investment securities available for sale - at fair value                                 22,742         21,930          21,088
Investment securities held to maturity (fair value of $62,428, $64,538 and               63,663         66,760          66,129
    $65,267, respectively)
Mortgage-backed securities available for sale - at fair value                           136,322        132,515         119,145
Mortgage-backed securities held to maturity (fair value of $137,933                     141,415        159,888         168,319
    $154,188, and $164,585, respectively)
Loans receivable, net                                                                   296,586        287,979         285,665
Federal Home Loan Bank stock - at cost                                                   13,042         13,042          12,668
Accrued interest receivable                                                               4,845          4,958           4,572
Real estate held for investment                                                             ---            ---           2,348
Goodwill and other intangible assets                                                      5,989          6,570           6,763
Premises and equipment, net                                                               9,301          9,177           8,828
Other assets                                                                              2,282          1,493           1,392
                                                                                       --------      --------         --------
                                Total assets                                           $706,739      $721,874         $714,686
                                                                                       ========      =========        ========

                    Liabilities and stockholders' equity
Liabilities
   Deposits                                                                            $416,962       $401,698        $406,612
   Advances from the Federal Home Loan Bank                                             204,159        248,533         248,359
   Other borrowings                                                                      23,590         15,766             ---
   Advances from borrowers for taxes and insurance                                          885          1,198             755
   Accrued interest payable                                                               6,565          3,749           4,867
   Other liabilities                                                                      3,472          2,483           2,825
                                                                                       --------      --------         --------
                             Total liabilities                                          655,633        673,427         663,418
                                                                                       --------      --------         --------

Commitments and contingencies
Stockholders' equity
   Preferred stock, no par value; 2,000,000 shares authorized
       and none issued.
   Common stock, $0.10 par value; 10,000,000 shares authorized,
       5,290,000 issued; 2,533,841,  2,576,160, and 2,759,721  shares
       outstanding at September 30, 2000, December 31, 1999 and
       September 30, 1999, net of treasury shares of 2,488,662,
       2,437,226, and 2,250,626, respectively.                                              529            529             529
   Retained earnings                                                                     50,619         48,760          47,763
   Additional paid-in capital                                                            52,139         52,076          52,055
   Unearned ESOP shares                                                                  (2,675)        (2,766)         (2,796)
   Shares acquired by MSBP                                                                  (21)           (71)           (148)
   Treasury stock - at cost                                                             (47,503)       (46,996)        (44,323)
   Accumulated other comprehensive income (loss)                                         (1,982)        (3,085)         (1,812)
                                                                                       --------      --------         --------
                         Total stockholders' equity                                      51,106         48,447          51,268
                                                                                       --------      --------         --------
Total liabilities and stockholders' equity                                             $706,739      $721,874         $714,686
                                                                                       ========      =========        ========
</TABLE>
                 See notes to consolidated financial statements

                                       3


<PAGE>
                    TF FINANCIAL CORPORATION AND SUBSIDIARIES
                  UNAUDITED CONSOLIDATED STATEMENTS OF EARNINGS
                      (in thousands, except per share data)
<TABLE>
<CAPTION>
                                                                          For the three months   For the nine months
                                                                           ended September 30,   ended September 30,
                                                                           -------------------   -------------------
                                                                             2000        1999       2000       1999
                                                                             ----        ----       ----       ----
<S>                                                                      <C>         <C>       <C>        <C>
Interest income
   Loans                                                                    $5,918      $5,481    $17,325    $16,277
   Mortgage-backed securities                                                4,676       4,687     14,387     12,983
   Investment securities                                                     1,607       1,642      4,679      5,040
   Interest bearing deposits and other                                          48          72        213        619
                                                                            ------      ------     ------     ------
       Total interest income                                                12,249      11,882     36,604     34,919
                                                                            ------      ------     ------     ------
Interest expense
   Deposits                                                                  3,909       3,571     11,297     11,135
   Advances from the Federal Home Loan Bank and other borrowings             3,385       3,457     10,528      9,670
                                                                            ------      ------     ------     ------
       Total interest expense                                                7,294       7,028     21,825     20,805
                                                                            ------      ------     ------     ------
       Net interest income                                                   4,955       4,854     14,779     14,114
Provision for loan losses                                                      100          90        264        180
                                                                            ------      ------     ------     ------
       Net interest income after provision for loan losses                   4,855       4,764     14,515     13,934
                                                                            ------      ------     ------     ------

Non-interest income
   Service fees, charges and other operating income                            400         290      1,150        915
                                                                            ------      ------     ------     ------
       Total non-interest income                                               400         290      1,150        915
                                                                            ------      ------     ------     ------
Non-interest expense
   Compensation and benefits                                                 1,945       1,792      5,741      5,124
   Occupancy and equipment                                                     638         505      1,881      1,510
   Federal deposit insurance premium                                            21          62         64        195
   Professional fees                                                           107         198        394        547
   Amortization of goodwill and other intangible assets                        195         209        584        627
   Advertising                                                                 186          91        524        272
   Other operating                                                             678         591      1,921      1,831
                                                                            ------      ------     ------     ------
       Total non-interest expense                                            3,768       3,448     11,109     10,106
                                                                            ------      ------     ------     ------
       Income before income taxes                                            1,487       1,606      4,556      4,743
Income taxes                                                                   417         551      1,400      1,679
                                                                            ------      ------     ------     ------
       Net income                                                           $1,070      $1,055     $3,156     $3,064
                                                                            ======      ======     ======     ======

Basic earnings per share                                                     $0.42       $0.38      $1.24      $1.10
Diluted earnings per share                                                   $0.41       $0.36      $1.20      $1.03
Weighted average number of shares outstanding - basic                        2,533       2,760      2,547      2,780
Weighted average number of shares outstanding - diluted                      2,616       2,933      2,627      2,965
</TABLE>

                 See notes to consolidated financial statements

                                       4
<PAGE>
                    TF FINANCIAL CORPORATION AND SUBSIDIARIES
                 UNAUDITED CONSOLIDATED STATEMENTS OF CASH FLOWS
                                 (in thousands)
<TABLE>
<CAPTION>

                                                                                      For the nine months ended
                                                                                             September 30,
                                                                                             -------------
                                                                                           2000          1999
                                                                                           ----          ----
<S>                                                                                   <C>          <C>
Cash flows from operating activities
Net Income                                                                             $   3,156    $   3,064
Adjustments to reconcile net income to net cash provided by operating
activities:
                 Mortgage loan servicing rights                                               10           10
                 Deferred loan origination fees                                              (24)         (51)
                 Premiums and discounts on investment securities, net                        (35)           8
                 Premiums and discounts on mortgage-backed securities and loans, net          (2)         526
                 Amortization of goodwill and other intangible assets                        581          626
Provision for loan losses                                                                    264          180
Depreciation of premises and equipment                                                       778          674
Recognition of ESOP and MSBP expenses                                                        204          509
Gain on sale of real estate acquired through foreclosure                                     (19)          (5)
(Increase) decrease in:
                 Accrued interest receivable                                                 113          (14)
                 Other assets                                                             (1,054)        (310)
Increase (decrease) in:
                 Accrued interest payable                                                  2,816          701
                 Other liabilities                                                           419       (2,481)
                                                                                       ---------    ---------
                 Net cash provided by operating activities                                 7,207        3,437
                                                                                       ---------    ---------
Cash flows  from investing activities
Loan origination and principal payments on loans, net                                     (2,165)      33,757
Purchases of loans                                                                        (6,734)     (78,993)
Proceeds from loan sales                                                                    --           --
Maturities of certificates of deposit in other financial institutions, net                   390          891
Purchases of investment securities available for sale                                       (429)     (20,732)
Purchases of investment securities  held to maturity                                     (82,081)    (147,742)
Purchases of mortgage-backed securities  available for sale                              (11,079)     (63,482)
Purchase of mortgage-backed securities  held to maturity                                    --        (35,412)
Proceeds from maturities of investment securities held to maturity                        85,219      167,937
Proceeds from maturities of investment securities available for sale                        --          4,000
Principal repayments from mortgage-backed securities held to maturity                     18,361       47,825
Principal repayments from mortgage-backed securities available for sale                    8,677       16,773
Purchases and redemption of Federal Home Loan Bank Stock, net                               --         (3,500)
Proceeds from sales of real estate acquired through foreclosure                              318          195
Purchase of premises and equipment                                                          (902)        (485)
                                                                                       ---------    ---------
                 Net cash provided by (used in) investing activities                       9,575      (78,968)
                                                                                       ---------    ---------
</TABLE>

                 See notes to consolidated financial statements

                                       5

<PAGE>
                    TF FINANCIAL CORPORATION AND SUBSIDIARIES
           UNAUDITED CONSOLIDATED STATEMENTS OF CASH FLOWS (continued)
                                 (in thousands)
<TABLE>
<CAPTION>
                                                                                 For the nine months ended
                                                                                       September 30,
                                                                                       -------------
                                                                                     2000          1999
                                                                                     ----          ----
<S>                                                                                <C>        <C>
Cash flows from financing activities
Net increase (decrease ) in deposits                                                  15,264     (32,301)
Net increase (decrease) in advances from Federal Home Loan Bank                      (44,374)     85,000
Net increase in other borrowings                                                       7,824        --
Net increase (decrease) in advances from borrowers for taxes and insurance              (313)       (449)
Exercise of stock options                                                                440         119
Purchase of treasury stock, net                                                       (1,245)     (2,117)
Common stock cash dividend                                                              (998)     (1,002)
                                                                                    --------    --------
                 Net cash provided by (used in) financing activities                 (23,402)     49,250
                                                                                    --------    --------

                 Net decrease in cash and cash equivalents                            (6,620)    (26,281)

Cash and cash equivalents at beginning of period                                      16,715      42,703
                                                                                    --------    --------

Cash and cash equivalents at end of period                                          $ 10,095    $ 16,422
                                                                                    ========    ========

Supplemental disclosure of cash flow information
Cash paid for
                 Interest on deposits and advances                                  $ 19,009    $ 20,207
                 Income taxes                                                       $  1,100    $  1,011
Non-cash transactions
                 Transfers from loans to real estate acquired through foreclosure   $    103    $    122
</TABLE>

                 See notes to consolidated financial statements

                                       6

<PAGE>



                    TF FINANCIAL CORPORATION AND SUBSIDIARIES
              NOTES TO UNAUDITED CONSOLIDATED FINANCIAL STATEMENTS


NOTE 1 - PRINCIPLES OF CONSOLIDATION

         The  consolidated  financial  statements  as  of  September  30,  2000,
         December  31,  1999,  September  30, 1999 and for the  three-month  and
         nine-month  periods  ended  September  30,  2000 and 1999  include  the
         accounts of TF Financial  Corporation  (the  "Company")  and its wholly
         owned  subsidiaries Third Federal Savings Bank (the "Savings Bank"), TF
         Investments  Corporation,   Penns  Trail  Development  Corporation  and
         Teragon  Financial  Corporation.  The  Company's  business is conducted
         principally  through the Savings  Bank.  All  significant  intercompany
         accounts and transactions have been eliminated in consolidation.

NOTE 2 - BASIS OF PRESENTATION

         The  accompanying  unaudited  consolidated  financial  statements  were
         prepared in accordance with instructions for Form 10-Q and,  therefore,
         do  not  include  all of  the  disclosures  or  footnotes  required  by
         generally accepted accounting principles. In the opinion of management,
         all adjustments, consisting of normal recurring accruals, necessary for
         fair  presentation of the consolidated  financial  statements have been
         included. The results of operations for the periods ended September 30,
         2000  are  not  necessarily  indicative  of the  results  which  may be
         expected for the entire  fiscal year or any other  period.  For further
         information,  refer to consolidated  financial statements and footnotes
         thereto  included in the  Company's  Annual Report on Form 10-K for the
         fiscal year ended December 31, 1999.

NOTE 3 - CONTINGENCIES

         The Company,  from time to time, is a party to routine  litigation that
         arises in the normal course of business.  In the opinion of management,
         the  resolution of this  litigation,  if any, would not have a material
         adverse  effect on the Company's  consolidated  financial  condition or
         results of operations.

NOTE 4 - OTHER COMPREHENSIVE INCOME

         The Company's other  accumulated  comprehensive  income consists of net
         unrealized gains (losses) on investment  securities and mortgage-backed
         securities  available  for sale.  Total  comprehensive  income  for the
         three-month  periods ended  September 30, 2000 and 1999 was  $2,106,000
         and $340,000,  net of  applicable  income tax of $951,000 and $131,000,
         respectively.

         Total  comprehensive  income for the nine-month periods ended September
         30, 2000 and 1999 was  $4,260,000  and  $1,098,000,  net of  applicable
         income tax of $1,969,000 and $524,000, respectively.


NOTE 5- RECLASSIFICATIONS

         Certain  prior year  amounts have been  reclassified  to conform to the
current period presentation.

                                       7

<PAGE>

                    TF FINANCIAL CORPORATION AND SUBSIDIARIES

                     MANAGEMENT'S DISCUSSION AND ANALYSIS OF
                  FINANCIAL CONDITION AND RESULTS OF OPERATIONS

GENERAL

TF  Financial   Corporation   may  from  time  to  time  make  written  or  oral
"forward-looking  statements",  including  statements contained in the Company's
filings with the Securities and Exchange  Commission  (including  this Quarterly
Report on Form 10-Q and the exhibits  thereto),  in its reports to  stockholders
and in other communications by the Company,  which are made in good faith by the
Company  pursuant to the "Safe  Harbor"  Provisions  of the  Private  Securities
Litigation Reform Act of 1995.

These  forward-looking  statements  involve  risks  and  uncertainties,  such as
statements  of the  Company's  plans,  objectives,  expectations,  estimates and
intentions,  that are subject to change based on various important factors (some
of which are beyond the Company's control). The following factors, among others,
could cause the Company's  financial  performance to differ  materially from the
plans,  objectives,  expectations,  estimates and  intentions  expressed in such
forward-looking statements: the strength of the United States economy in general
and  the  strength  of  the  local  economies  in  which  the  Company  conducts
operations;  the effects of, and changes in, trade, monetary and fiscal policies
and laws,  including  interest  rate  policies of the Board of  Governors of the
Federal  Reserve  System,   inflation,   interest  rate,   market  and  monetary
fluctuations;  the timely  development  of and  acceptance  of new  products and
services of the Company and the perceived  overall  value of these  products and
services by users,  including  the  features,  pricing  and quality  compared to
competitors'  products and  services;  the  willingness  of users to  substitute
competitors' products and services for the Company's products and services;  the
success of the  Company in  gaining  regulatory  approval  of its  products  and
services,  when required;  the impact of changes in financial services' laws and
regulations   (including  laws  concerning   taxes,   banking,   securities  and
insurance);  technological changes,  acquisitions;  changes in consumer spending
and saving habits; and the success of the Company at managing the risks involved
in the foregoing.

The  Company  cautions  that the  foregoing  list of  important  factors  is not
exclusive.  The  Company  does  not  undertake  to  update  any  forward-looking
statement,  whether written or oral, that may be made from time to time by or on
behalf of the Company.

Financial Condition

The  Company's  total assets at September 30, 2000 and December 31, 1999 totaled
$706.7 million and $721.9 million,  respectively.  Loans receivable, net grew by
$8.6 million  while cash and cash  equivalents  decreased by $6.6  million.  The
Company's investment  securities decreased by $2.3 million during the first nine
months of 2000,  while the  Company's  mortgage-backed  securities  decreased by
$14.7  million  during the same period.  These results are  consistent  with the
Company's  present  objectives that include growth in the loan portfolio through
both   originated  and  purchased   loans  and  a   corresponding   decrease  in
lower-yielding  investment  securities  and  mortgage-backed  securities.  Total
assets are  expected  to remain at  approximately  their  present  levels in the
immediate future and the expected growth in the Company's net interest income is
expected to come from a  combination  of loan growth funded by lower cost retail
deposit growth.

                                       8
<PAGE>



Total  liabilities  decreased by $17.8  million  during the first nine months of
2000.  Deposits  increased by $15.3 million while advances from the Federal Home
Loan Bank and other  borrowings  decreased  by a  combined  $36.6  million.  The
decrease in advances from the Federal Home Loan Bank occurred in part due to the
conversion and  subsequent  repayment of $40 million of fixed rate advances that
were convertible  into  LIBOR-based  floating rate advances at the option of the
Federal Home Loan Bank.

Total  consolidated  stockholders'  equity of the Company  was $51.1  million at
September 30, 2000,  an increase of $2.7 million from December 31, 1999.  During
the first  nine  months of 2000  retained  earnings,  which is net  income  less
dividends  paid,  increased  by $1.9  million.  In addition,  accumulated  other
comprehensive  income  increased by $1.1  million  during the same period due to
increased values of the Company's available for sale securities.

The net cost of treasury shares purchased increased by $507,000 during the first
nine  months of 2000.  During  January  of 2000  management  announced  that the
Company's  board of  directors  had  authorized  the  purchase  of up to 142,368
additional  shares  of  the  Company's  stock  in the  open  market  during  the
subsequent  twelve  months.  As of September  30, 2000 there were  approximately
111,300 shares available for repurchase under this repurchase program.

Asset Quality


Management  of the  Company  believes  that there has been no  material  adverse
change in the  Company's  asset  quality  during  the  nine-month  period  ended
September 30, 2000.  Non-performing loans include $337,000 in student loans that
are  guaranteed  by the United  States  Department  of  Education,  through  the
Pennsylvania Higher Education Assistance Association, unless the Savings Bank is
notified that it has failed to perform all the necessary  procedures to preserve
the guarantee.  In such a situation,  the Savings Bank would attempt to have the
guarantee reinstated;  if unsuccessful,  these loans become unsecured loans that
the Savings Bank will attempt to collect or charge-off.

      The following table sets forth  information  regarding the Company's asset
quality (dollars in thousands):

<TABLE>
<CAPTION>
                                                                            September 30,    December 31,    September 30,
                                                                                2000             1999             1999
                                                                                ----             ----             ----
<S>                                                                          <C>             <C>              <C>
         Non-performing loans                                                 $1,303           $1,356           $1,392
         Ratio of non-performing loans to gross loans                           0.44%           0.47%            0.48%
         Ratio of non-performing loans to total assets                          0.18%           0.19%            0.19%
         Foreclosed property                                                    $247            $546             $240
         Foreclosed property to total assets                                    0.03%           0.08%            0.03%
         Ratio of total non-performing assets to total assets                   0.22%           0.26%            0.23%
</TABLE>

Management maintains an allowance for loan losses at levels that are believed to
be adequate; however, there can be no assurances that further additions will not
be necessary or that losses  inherent in the existing loan  portfolios  will not
exceed  the  allowance.  The  following  table sets  forth the  activity  in the
allowance for loan losses during the periods indicated (in thousands):

                                                  2000     1999
                                                 ------   ------
          Beginning balance, January 1,          $1,917   $1,909
          Provision                                 264      180
          Less: charge-off's (recoveries), net      284      202
                                                 ------   ------
          Ending balance, September 30,          $1,897   $1,887
                                                 ======   ======

                                       9

<PAGE>
RESULTS OF OPERATIONS FOR THE THREE MONTHS ENDED SEPTEMBER 30, 2000 AND 1999

Net Income. The Company recorded net income of $1,070,000,  or $0.41 per diluted
share,  for the three months ended September 30, 2000 as compared to $1,055,000,
or $0.36 per diluted share, for the three months ended September 30, 1999.

Average Balance Sheet

The following  table sets forth  information  relating to the Company's  average
balance  sheet and  reflects  the average  yield on assets and  average  cost of
liabilities  for the  periods  indicated.  The yields and costs are  computed by
dividing income or expense by the average balance of interest-earning  assets or
interest-bearing liabilities, respectively for the periods indicated.
<TABLE>
<CAPTION>
                                                                      Three months ended September 30,
                                                                      --------------------------------
                                                                         Three Months Ended March,
                                                                 2000                                    1999
                                                  -------------------------------------   ------------------------------------
                                                    Average                   Average       Average                   Average
                                                    Balance     Interest      Yld/Cost      Balance     Interest      Yld/Cost
                                                    -------     --------      --------      -------     --------      --------
                                                                            (dollars in thousands)
<S>                                             <C>            <C>            <C>       <C>            <C>            <C>
Assets:
  Interest-earning assets:
    Loans receivable (4)                           $296,873       $5,918         7.93%     $290,693       $5,481         7.54%
    Mortgage-backed securities                      282,986        4,676         6.57%      290,070        4,687         6.46%
    Investment securities                           102,280        1,607         6.25%      112,430        1,642         5.84%
    Other interest-earning assets(1)                  2,810           48         6.80%        7,060           72         4.08%
                                                   --------      -------                   --------      -------
      Total interest-earning assets                 684,949       12,249         7.11%      700,253       11,882         6.79%
                                                                 -------                                 -------
Non interest-earning assets                          27,351                                  21,793
                                                   --------                                --------
      Total assets                                  712,300                                 722,046
                                                   ========                                ========
Liabilities and stockholders' equity:
  Interest-bearing liabilities
    Deposits                                        417,960        3,909         3.72%      412,557        3,571         3.46%
    Advances from the FHLB and other
               borrowings                           235,682        3,385         5.71%      248,615        3,457         5.56%
                                                   --------      -------                   --------      -------
      Total interest-bearing liabilities            653,642        7,294         4.44%      661,172        7,028         4.25%
                                                                 -------                                 -------
Non interest-bearing liabilities                      9,935                                   9,654
                                                      -----                                   -----
      Total liabilities                             663,577                                 670,826
Stockholders' equity                                 48,723                                  51,220
                                                   --------                                --------
   Total liabilities and stockholders' equity....  $712,300                                $722,046
                                                   ========                                ========
Net interest income                                               $4,955                                  $4,854
                                                                  ======                                  ======
Interest rate spread (2)                                                         2.68%                                   2.51%
Net yield on interest-earning assets (3)                                         2.88%                                   2.75%
Ratio of average interest-earning assets to
average interest bearing liabilities                                              105%                                    106%
</TABLE>

(1)  Includes interest-bearing deposits in other banks.
(2)  Interest-rate spread represents the difference between the average yield on
     interest-earning   assets  and  the   average   cost  of   interest-bearing
     liabilities.
(3)  Net yield on  interest-earning  assets  represents net interest income as a
     percentage of average interest-earning assets.
(4)  Nonaccrual loans have been included in the appropriate average loan balance
     category,  but  interest  on  nonaccrual  loans has not been  included  for
     purposes of determining interest income.

                                       10
<PAGE>

Rate/Volume Analysis

The following table presents, for the periods indicated,  the change in interest
income and interest  expense (in thousands)  attributed to (i) changes in volume
(changes in the weighted average balance of the total interest earning asset and
interest bearing  liability  portfolios  multiplied by the prior year rate), and
(ii) changes in rate (changes in rate multiplied by prior year volume).  Changes
attributable  to the  combined  impact  of volume  and rate have been  allocated
proportionately based on the absolute value of changes due to volume and changes
due to rate.

                                                      Three months ended
                                                         September 30,
                                                         2000 vs. 1999
                                                   -------------------------
                                                      Increase (decrease)
                                                            due to
                                                   -------------------------
                                                   Volume      Rate      Net
                                                   -------------------------

Interest income:
     Loans receivable, net                         $  127    $  310   $  437
     Mortgage-backed securities                      (382)      371      (11)
     Investment securities                           (538)      503      (35)
     Other interest-earning assets                   (194)      170      (24)
                                                   -------------------------
        Total interest-earning assets                (987)    1,354      367
                                                   =========================
Interest expense:
     Deposits                                          50       288      338
     Advances from the FHLB and other borrowings     (538)      466      (72)
                                                   -------------------------
        Total interest-bearing liabilities           (488)      754      266
                                                   =========================

Net change in net interest income                  $ (499)   $  600   $  101
                                                   =========================

Total interest  income.  Total interest income  increased by $367,000 or 3.1% to
$12.2  million for the three months ended  September  30, 2000 compared with the
third  quarter of 1999  primarily  because of an increase in interest  income on
loans receivable.

In addition,  as market interest rates rose during the second and third quarters
of  1999,  the  Company  reduced  its  positions  in  short-term,  low  yielding
securities and purchased  intermediate-term issues with higher rates and yields.
These actions when combined with  securities  maturities and prepayments (in the
case of  mortgage-backed  securities)  during the  intervening  period  produced
rate-related  increases  in interest  income,  almost  entirely  offsetting  the
decreases in interest income associated with lower average balances. The rise in
certain market interest rates since September 30, 1999 also has resulted in both
higher  interest  rates on the Company's new loans and higher  interest rates on
the Company's adjustable rate loans held in portfolio.

Total interest expense. Total interest expense increased to $7.3 million for the
three-month  period  ended  September  30,  2000 from $7.0  million for the same
period in 1999 primarily because of higher market interest rates.

Non-interest  income. Total non-interest income was $400,000 for the three-month
period ended  September  30, 2000  compared with $290,000 for the same period in
1999. The increase is primarily due to increases in late charges, prepayment and
other loan-related fees.

                                       11
<PAGE>


Non-interest  expense.  Total non-interest expense increased by $320,000 to $3.8
million for the three  months  ended  September  30,  2000  compared to the same
period in 1999.  Compensation and benefits expenses increased by $153,000 during
the third quarter of 2000 compared to the year earlier  period due in large part
to the increase in full time equivalent employees from 147 at September 30, 1999
to 167 at September 30, 2000.  These  additional  employees  were related to the
additional  branch  office open during the third quarter of 2000 compared to the
third quarter of 1999, and additional  staff in the lending and servicing  areas
of the Company.  The  relocation  of the  Company's  home office branch to a new
leased  facility  also  contributed  to the increase in occupancy  and equipment
expenses.  Advertising expense also increased as planned in order to attract new
retail  banking  customers.  Professional  fees have  decreased from higher than
normal  levels  during the third  quarter  of 1999 in part  because of the "Year
2000"  costs  that were  incurred  during the third  quarter  of 1999,  but also
because the  Company has been  successful  in  reducing  its use of  third-party
professionals.

Income  taxes.  The  Company's  effective  tax rate was 28.0%  during  the third
quarter of 2000  compared  with  34.3%  during  the third  quarter of 1999.  The
decrease is  attributable  to investment  strategies that are expected to reduce
the Company's income taxes.

                                       12

<PAGE>

RESULTS OF OPERATIONS FOR THE NINE MONTHS ENDED SEPTEMBER 30, 2000 AND 1999

Net Income. The Company recorded net income of $3,156,000,  or $1.20 per diluted
share,  for the nine months ended  September 30, 2000 as compared to $3,064,000,
or $1.03 per diluted share, for the nine months ended September 30, 1999.

Average Balance Sheet

The following  table sets forth  information  relating to the Company's  average
balance  sheet and  reflects  the average  yield on assets and  average  cost of
liabilities  for the  periods  indicated.  The yields and costs are  computed by
dividing income or expense by the average balance of interest-earning  assets or
interest-bearing liabilities, respectively for the periods indicated.

<TABLE>
<CAPTION>
                                                                        Nine months ended September 30,
                                                                        -------------------------------
                                                                  2000                                   1999
                                                  ------------------------------------    -------------------------------------
                                                    Average                   Average       Average                   Average
                                                    Balance     Interest      Yld/Cost      Balance     Interest      Yld/Cost
                                                    -------     --------      --------      -------     --------      --------
                                                                            (dollars in thousands)
<S>                                              <C>           <C>             <C>       <C>           <C>             <C>
Assets:
  Interest-earning assets:
    Loans receivable (4)                           $293,647      $17,325         7.88%     $284,928      $16,277         7.62%
    Mortgage-backed securities                      288,866       14,387         6.65%      272,139       12,983         6.36%
    Investment securities                           101,202        4,679         6.18%      117,037        5,040         5.74%
    Other interest-earning assets(1)                  4,724          213         6.02%       16,734          619         4.93%
                                                   --------      -------                   --------      -------
      Total interest-earning assets                 688,439       36,604         7.10%      690,838       34,919         6.74%
                                                                 -------                                 -------
Non interest-earning assets                          29,150                                  24,455
                                                   --------                                --------
      Total assets                                  717,589                                 715,293
                                                    =======                                 =======

Liabilities and stockholders' equity:
  Interest-bearing liabilities
    Deposits                                        412,351       11,297         3.66%      420,949       11,135         3.53%
    Advances from the FHLB and other
               borrowings                           247,887       10,528         5.67%      232,628        9,670         5.54%
                                                   --------      -------                   --------      -------
      Total interest-bearing liabilities            660,238       21,825         4.42%      653,577       20,805         4.24%
                                                                 -------                                 -------
Non interest-bearing liabilities                      9,197                                   9,936
                                                   --------                                --------
      Total liabilities                             669,435                                 663,513
Stockholders' equity                                 48,154                                  51,780
                                                   --------                                --------
   Total liabilities and stockholders' equity....  $717,589                                $715,293
                                                   ========                                ========
Net interest income                                              $14,779                                 $14,114
                                                                 =======                                 =======
Interest rate spread (2)                                                         2.69%                                   2.50%
Net yield on interest-earning assets (3)                                         2.87%                                   2.73%
Ratio of average interest-earning assets to
average interest bearing liabilities                                              104%                                    106%
</TABLE>

(1)  Includes interest-bearing deposits in other banks.
(2)  Interest-rate spread represents the difference between the average yield on
     interest-earning   assets  and  the   average   cost  of   interest-bearing
     liabilities.
(3)  Net yield on  interest-earning  assets  represents net interest income as a
     percentage of average interest-earning assets.
(4)  Nonaccrual loans have been included in the appropriate average loan balance
     category,  but  interest  on  nonaccrual  loans has not been  included  for
     purposes of determining interest income.

                                       13
<PAGE>

Rate/Volume Analysis

The following table presents, for the periods indicated,  the change in interest
income and interest  expense (in thousands)  attributed to (i) changes in volume
(changes in the weighted average balance of the total interest earning asset and
interest bearing  liability  portfolios  multiplied by the prior year rate), and
(ii) changes in rate (changes in rate multiplied by prior year volume).  Changes
attributable  to the  combined  impact  of volume  and rate have been  allocated
proportionately based on the absolute value of changes due to volume and changes
due to rate.

                                                        Nine months ended
                                                           September 30,
                                                           2000 vs. 1999
                                                    ----------------------------
                                                        Increase (decrease)
                                                               due to
                                                    ----------------------------
                                                    Volume      Rate       Net
                                                    ----------------------------
Interest income:
     Loans receivable, net                         $   496    $   552   $ 1,048
     Mortgage-backed securities                        806        598     1,404
     Investment securities                            (888)       527      (361)
     Other interest-earning assets                    (589)       183      (406)
                                                   -----------------------------
        Total interest-earning assets                 (175)     1,860     1,685
                                                   ============================

Interest expense:
     Deposits                                         (333)       495       162
     Advances from the FHLB and other borrowings       632        226       858
                                                   -----------------------------
        Total interest-bearing liabilities             299        721     1,020
                                                   ============================

Net change in net interest income                  $  (474)   $ 1,139   $   665
                                                   ============================

Total Interest  Income.  Total interest income increased by $1.7 million or 4.8%
to $36.6 million for the nine months ended  September 30, 2000 compared with the
first nine months of 1999 in large part because of increases in interest  income
on loans receivable and mortgage-backed securities.

In addition,  as market interest rates rose during the second and third quarters
of  1999,  the  Company  reduced  its  positions  in  short-term,  low  yielding
securities and purchased  intermediate-term issues with higher rates and yields.
These actions when combined with  securities  maturities and prepayments (in the
case of  mortgage-backed  securities)  during the  intervening  period  produced
substantial  rate-related  increases  in  interest  income.  The rise in certain
market  interest rates since September 30, 1999 also has resulted in both higher
interest  rates on the  Company's  new loans and  higher  interest  rates on the
Company's adjustable rate loans held in portfolio.

Total Interest  Expense.  Total interest expense  increased to $21.8 million for
the nine-month  period ended  September 30, 2000 from $20.8 million for the same
period in 1999  primarily  due to increased  advances from the Federal Home Loan
Bank and other  borrowings  which  were used to fund asset  growth  and  deposit
outflows.  The average  rate paid on Federal  Home Loan Bank  advances and other
borrowings  increased due to the effect of higher market  interest  rates on new
and repriced borrowings.

Interest expense on deposits  increased slightly during the first nine months of
2000  compared  to the first nine months of 1999.  While the average  balance of
deposits  decreased  $8.6 million or 2.0%, the average rate paid increased by 13
basis points to 3.66%. The decrease in the average balance of deposits  resulted
from rate sensitive


                                       14
<PAGE>

deposit outflows associated with management's efforts to price deposits at lower
interest rates during the first nine months of 1999.  Nevertheless,  the average
rate paid on deposits has increased  steadily since mid-1999 due to increases in
market interest rates.

Non-interest income. Total non-interest income was $1,150,000 for the nine-month
period ended  September  30, 2000  compared with $915,000 for the same period in
1999. The increase is primarily due to increases in late charges, prepayment and
other loan-related fees.

Non-interest  expense.  Total non-interest  expense increased by $1.0 million to
$11.1 million for the nine months ended  September 30, 2000 compared to the same
period in 1999.  Compensation and benefits expenses increased by $617,000 during
the first nine months of 2000  compared to the year earlier  period due in large
part to the increase in full time equivalent employees from 147 at September 30,
1999 to 167 at September 30, 2000.  These  additional  employees were related to
the additional  branch office open during the first nine months of 2000 compared
to the first nine months of 1999, and  additional  staff in the lending and loan
servicing  areas of the Company.  The  relocation of the  Company's  home office
branch to a new leased  facility also  contributed  to the increase in occupancy
and equipment  expenses.  Advertising expense also increased as planned in order
to attract new retail banking  customers.  Professional fees have decreased from
higher than normal  levels  during the first nine months of 1999 in part because
of the "Year  2000"  costs that were  incurred  during the first nine  months of
1999,  but also because the Company has been  successful  in reducing its use of
third-party professionals.

Income taxes.  The Company's  effective tax rate was 30.7% during the first nine
months of 2000  compared  with 35.4%  during the first nine months of 1999.  The
decrease is  attributable  to investment  strategies that are expected to reduce
the Company's income taxes.

                                       15
<PAGE>

LIQUIDITY AND CAPITAL RESOURCES


Liquidity


The  Company's  liquidity  is a  measure  of its  ability  to  fund  loans,  pay
withdrawals of deposits, and other cash outflows in an efficient, cost-effective
manner.  The  Company's   short-term  sources  of  liquidity  include  maturity,
repayment and sales of assets,  excess cash and cash equivalents,  new deposits,
broker deposits,  other borrowings,  and new advances from the Federal Home Loan
Bank. There has been no material adverse change during  nine-month  period ended
September  30, 2000 in the ability of the Company and its  subsidiaries  to fund
their operations.

The Savings  Bank is required  under  federal  regulations  to maintain  certain
specified  levels of "liquid  investments",  which include certain United States
government  obligations  and other  approved  investments.  Current  regulations
require the Savings  Bank to maintain  liquid  assets of not less than 4% of its
net withdrawable  accounts plus short term borrowings.  Short-term liquid assets
must consist of not less than 1% of such accounts and  borrowings,  which amount
is also  included  within the 4%  requirement.  These levels may be changed from
time to time by the  regulators  to reflect  current  economic  conditions.  The
Savings Bank had regulatory liquidity ratios of 18.9% and 17.2% at September 30,
2000 and 1999, respectively.

At September 30, 2000, the Company had commitments  outstanding under letters of
credit of $3.7 million,  commitments  to originate  loans of $5.8  million,  and
commitments  to fund  undisbursed  balances of closed  loans and unused lines of
credit of $35.0 million.

Capital Requirements

The Savings Bank is in  compliance  with all of its capital  requirements  as of
September 30, 2000.



QUANTITATIVE AND QUALITATIVE DISCLOSURES ABOUT MARKET RISK

Asset and Liability Management


The  Company's  market risk  exposure is  predominately  caused by interest rate
risk,  which is defined as the  sensitivity of the Company's  current and future
earnings, the values of its assets and liabilities, and the value of its capital
to changes in the level of market  interest  rates.  Management  of the  Company
believes that there has not been a material adverse change in market risk during
the nine months ended September 30, 2000.

                                       16
<PAGE>

                    TF FINANCIAL CORPORATION AND SUBSIDIARIES

                                     PART II

      ITEM 1.   LEGAL PROCEEDINGS
                Not applicable.

      ITEM 2.   CHANGES IN SECURITIES AND USE OF PROCEEDS
                Not applicable.

      ITEM 3.   DEFAULTS UPON SENIOR SECURITIES
                Not applicable.

      ITEM 4.   SUBMISSION OF MATTERS TO A VOTE OF SECURITY HOLDERS
                Not applicable

      ITEM 5.   OTHER INFORMATION
                None

      ITEM 6.   EXHIBITS AND REPORTS ON FORM 8-K
                (a)     Exhibits
                Exhibit 27 - Financial data schedule (in electronic filing only)
                (b)     Reports on Form 8-K
                None

                                       17



<PAGE>



                                   SIGNATURES

Pursuant  to the  requirements  of the  Securities  Exchange  Act of  1934,  the
Registrant  has duly  caused  this  Report  to be  signed  on its  behalf by the
undersigned, thereunto duly authorized.


                                      TF FINANCIAL CORPORATION




                                      /s/ John R. Stranford
                                      ------------------------------------------
Date:      November 8, 2000           John R. Stranford
    -----------------------           President and CEO
                                      (Principal Executive Officer)


                                      /s/ Dennis R. Stewart
                                      ------------------------------------------
Date:      November 8, 2000           Dennis R. Stewart
     ----------------------           Senior Vice President and
                                      Chief Financial Officer
                                      (Principal Financial & Accounting Officer)



                                       18