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             June 30, 2002
                                ------------------------------------------------
                                                    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                              (I.R.S. employer
incorporation 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: July 24, 2002
                                                   -------------

          Class                                          Outstanding
      ----------------------                           -------------
   $.10 par value common stock                         2,723,326 shares


<PAGE>


                    TF FINANCIAL CORPORATION AND SUBSIDIARIES

                                    FORM 1O-Q

                       FOR THE QUARTER ENDED JUNE 30, 2002


                                      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              9
Item     3.       Quantitative and Qualitative Disclosures about
                  Market Risk                                               17

PART II- OTHER INFORMATION

Item     1.       Legal Proceedings                                         18
Item     2.       Changes in Securities and Use of Proceeds                 18
Item     3.       Defaults Upon Senior Securities                           18
Item     4.       Submission of Matters to a Vote of Security Holders       18
Item     5.       Other Information                                         18
Item     6.       Exhibits and Reports on Form 8-K                          18

SIGNATURES                                                                  19





                                       2

<PAGE>



                    TF FINANCIAL CORPORATION AND SUBSIDIARIES
                 CONSOLIDATED STATEMENTS OF FINANCIAL CONDITION
                                 (in thousands)

<TABLE>
<CAPTION>

                                                                                      Unaudited       Audited
                                                                                       June 30,    December 31,
                                                                                         2002          2001
                                                                                         ----          ----
<S>                                                                                  <C>            <C>
                                   Assets
Cash and cash equivalents                                                               $72,627        $69,139
Certificates of deposit in other financial institutions                                     194            194
Investment securities available for sale - at fair value                                 27,830         22,671
Investment securities held to maturity (fair value of $15,859 and $9,830,                15,597          9,866
    respectively)
Mortgage-backed securities available for sale - at fair value                           148,281         99,763
Mortgage-backed securities held to maturity (fair value of $75,462 and                   73,066         93,367
    $94,735, respectively)
Loans receivable, net                                                                   353,731        377,635
Federal Home Loan Bank stock - at cost                                                   11,118         11,368
Accrued interest receivable                                                               4,289          4,154
Core deposit intangible, net                                                                659            775
Goodwill, net                                                                             4,102          4,324
Premises and equipment, net                                                               7,039          7,484
Other assets                                                                              9,653         10,464
                                                                                          -----         ------
                                Total assets                                           $728,186       $711,204
                                                                                       ========       ========

                    Liabilities and stockholders' equity
Liabilities
   Deposits                                                                            $437,503       $422,052
   Advances from the Federal Home Loan Bank                                             222,359        222,359
   Advances from borrowers for taxes and insurance                                        1,300          1,241
   Accrued interest payable                                                               3,313          3,762
   Other liabilities                                                                      2,870          3,815
                                                                                          -----          -----
                              Total liabilities                                         667,345        653,229
                                                                                        -------        -------

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; 2,477,102 and 2,465,986 shares outstanding
       at June 30, 2002 and December 31, 2001, net of
       treasury shares of 2,566,674 and 2,571,712, respectively.                            529            529
   Retained earnings                                                                     57,747         56,370
   Additional paid-in capital                                                            51,582         51,652
   Unearned ESOP shares                                                                 (2,462)        (2,523)
   Treasury stock - at cost                                                            (48,794)       (48,838)
   Accumulated other comprehensive income                                                 2,239            785
                                                                                          -----            ---
                         Total stockholders' equity                                      60,841         57,975
                                                                                         ------         ------


Total liabilities and stockholders' equity                                             $728,186       $711,204
                                                                                       ========       ========

</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 Three Months        For Six Months
                                                                              Ended June 30,         Ended June 30,
                                                                              --------------         --------------
                                                                             2002        2001       2002       2001
                                                                             ----        ----       ----       ----
<S>                                                                       <C>         <C>        <C>        <C>
Interest income
   Loans                                                                    $6,429      $7,147    $13,160    $14,313
   Mortgage-backed securities                                                3,188       3,568      6,248      7,348
   Investment securities                                                       565         671      1,152      1,910
   Interest bearing deposits and other                                         271         431        480        576
                                                                               ---         ---        ---        ---
       Total interest income                                                10,453      11,817     21,040     24,147
                                                                            ------      ------     ------     ------
Interest expense
   Deposits                                                                  2,707       3,577      5,537      7,168
   Advances from the Federal Home Loan Bank and other borrowings             3,071       3,156      6,108      6,656
                                                                             -----       -----      -----      -----
       Total interest expense                                                5,778       6,733     11,645     13,824
                                                                             -----       -----     ------     ------
       Net interest income                                                   4,675       5,084      9,395     10,323
Provision for loan losses                                                      538         124        688        249
                                                                               ---         ---        ---        ---
       Net interest income after provision for loan losses                   4,137       4,960      8,707     10,074
                                                                             -----       -----      -----     ------

Non-interest income
   Service fees, charges and other operating income                            329         355        736        770
   Bank-owned life insurance                                                   137           -        270          -
   Gains on sale of real estate and other                                        -         454          -        439
                                                                               ---         ---        ---        ---
       Total non-interest income                                               466         809      1,006      1,209
                                                                               ---         ---      -----      -----
Non-interest expense
   Compensation and benefits                                                 1,916       1,899      3,845      3,837
   Occupancy and equipment                                                     576         580      1,154      1,225
   Federal deposit insurance premium                                            19          18         38         39
   Professional fees                                                           105          88        185        244
   Amortization of core deposit intangible                                      58          69        116        138
   Amortization of goodwill                                                    111         111        222        222
   Advertising                                                                 110         126        220        252
   Other operating                                                             522         595      1,168      1,340
                                                                               ---         ---      -----      -----
       Total non-interest expense                                            3,417       3,486      6,948      7,297
                                                                             -----       -----      -----      -----
       Income before income taxes                                            1,186       2,283      2,765      3,986
Income taxes                                                                   273         595        649      1,040
                                                                               ---         ---        ---      -----
       Net income                                                             $913      $1,688     $2,116     $2,946
                                                                              ====      ======     ======     ======

Basic earnings per share                                                     $0.37       $0.69      $0.86      $1.19
Diluted earnings per share                                                   $0.33       $0.64      $0.78      $1.12
Weighted average number of shares outstanding - basic                        2,470       2,454      2,467      2,468
Weighted average number of shares outstanding - diluted                      2,744       2,647      2,730      2,642

</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 six months ended
                                                                                                      June 30,
                                                                                                      --------
                                                                                                 2002         2001
                                                                                                 ----         ----
<S>                                                                                          <C>            <C>
Cash flows from operating activities
Net income                                                                                       $2,116       $2,946
Adjustments to reconcile net income to net cash provided by operating activities:
         Mortgage loan servicing rights                                                               7            7
         Deferred loan origination fees                                                            (99)         (86)
         Premiums and discounts on investment securities, net                                        68          (5)
         Premiums and discounts on mortgage-backed securities and loans, net                      (264)        (142)
         Amortization of goodwill and core deposit intangible                                       338          361
Provision for loan losses                                                                           688          250
Depreciation of premises and equipment                                                              507          431
Gain on sale of premises and equipment                                                                -        (444)
Recognition of ESOP and MSBP expenses                                                               140          114
Gain on sales of real estate acquired through foreclosure                                          (57)         (27)
Loss on sale of loans and mortgage-backed securities available for sale                               -            5
Increase in value of bank-owned life insurance                                                    (262)            -
(Increase) decrease in:
         Accrued interest receivable                                                              (135)        1,311
         Other assets                                                                             1,035          229
Increase (decrease) in:
         Accrued interest payable                                                                 (449)        (562)
         Other liabilities                                                                      (1,693)        (327)
                                                                                                -------        -----
         Net cash provided by operating activities                                                1,940        4,061
                                                                                                  -----        -----

Cash flows  from investing activities
Loan originations and principal payments on loans, net                                           39,819        9,645
Purchases of loans                                                                             (16,685)     (17,184)
Proceeds from loan sales                                                                              -        1,227
Proceeds from sale of mortgage-backed securities available for sale                                   -        4,309
Purchases of mortgage-backed securities available for sale                                     (62,848)      (8,407)
Purchase of investment securities available for sale                                            (6,000)      (3,030)
Purchase of investment securities held to maturity                                              (6,821)            -
Proceeds from maturities of investment securities held to maturity                                1,055       44,991
Proceeds from maturities of investment securities available for sale                              1,000       15,000
Principal repayments from mortgage-backed securities held to maturity                            20,391       17,335
Principal repayments from mortgage-backed securities available for sale                          16,511        7,716
Purchases and redemptions of Federal Home Loan Bank stock, net                                      250        1,674
Proceeds from sales of real estate acquired through foreclosure                                     272          102
Proceeds from sale of premises and equipment                                                          -        1,784
Purchase of premises and equipment                                                                 (62)        (133)
                                                                                                   ----        -----

         Net cash provided by (used in) investing activities                                   (13,118)       75,029
                                                                                               --------       ------
</TABLE>

                 See notes to consolidated financial statements

                                       5

<PAGE>

                    TF FINANCIAL CORPORATION AND SUBSIDIARIES
           UNAUDITED CONSOLIDATED STATEMENTS OF CASH FLOWS (continued)
                                 (in thousands)

<TABLE>
                                                                                For the six months ended
                                                                                       June 30,
                                                                                       --------
                                                                                   2002          2001
                                                                                   ----          ----
<S>                                                                               <C>        <C>
Cash flows from financing activities
Net increase in deposits                                                            15,451        8,294
Net decrease in advances from Federal Home Loan Bank                                     -     (22,500)
Net decrease in other borrowings                                                         -     (14,962)
Net decrease in advances from borrowers for taxes and insurance                         59          123
Exercise of stock options                                                              232           26
Purchase of treasury stock, net                                                      (337)        (801)
Common stock cash dividend                                                           (739)        (692)
                                                                                     -----        -----
         Net cash provided by (used in) financing activities                        14,666     (30,512)
                                                                                    ------     --------

         Net increase in cash and cash equivalents                                   3,488       48,578

Cash and cash equivalents at beginning of period                                    69,139       10,618
                                                                                    ------       ------

Cash and cash equivalents at end of period                                         $72,627      $59,196
                                                                                   =======      =======

Supplemental disclosure of cash flow information
Cash paid for
         Interest on deposits and advances                                         $12,098      $14,386
         Income taxes                                                               $1,000         $995
Non-cash transactions
         Transfers from loans to real estate acquired through foreclosure             $185         $  -
</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 June 30, 2002 (unaudited) and
     December 31, 2001 and for the three-month and six-month  periods ended June
     30,  2002  and  2001  (unaudited)  include  the  accounts  of TF  Financial
     Corporation (the "Company") and its wholly owned subsidiaries Third Federal
     Savings  Bank  (the  "Bank"),  TF  Investments  Corporation,   Penns  Trail
     Development  Corporation and Teragon Financial  Corporation.  The Company's
     business  is  conducted  principally  through  the  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  accounting
     principles  generally  accepted  in the United  States of  America.  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 June 30, 2002 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, 2001.

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 (LOSS)
     The Company's other  comprehensive  income consists of net unrealized gains
     on investment securities and mortgage-backed securities available for sale.
     Total comprehensive  income for the three-month periods ended June 30, 2002
     and 2001 was $2,850,000  and  $1,479,000,  net of applicable  income tax of
     $1,271,000 and $487,000,  respectively.  Total comprehensive income for the
     six-month  periods  ended  June  30,  2002  and  2001  was  $3,570,000  and
     $3,520,000,  net of  applicable  income tax of $1,398,000  and  $1,018,000,
     respectively.

NOTE 5- RECLASSIFICATIONS
     Certain  prior  period  amounts  have been  reclassified  to conform to the
     current period presentation.


                                       7
<PAGE>


NOTE 6- NEW ACCOUNTING PRONOUNCEMENTS
     On January 1, 2002,  the Company  adopted  Financial  Accounting  Standards
     Board Statement of Financial Accounting Standards (SFAS) No. 141, "Business
     Combinations", SFAS No. 142, "Goodwill and Intangible Assets", and SFAS No.
     144,  "Accounting for the Impairment or Disposal of Long-Lived Assets". The
     adoption  of  these  statements  did  not  have a  material  impact  on the
     financial condition or results of operations of the Company.

     On January 1, 2002,  the Company also adopted  Statement of Position  (SOP)
     01-6,  "Accounting  by  Certain  Entities  That  Lend  to  or  Finance  the
     Activities of Others",  which reconciles and conforms existing  differences
     in the accounting and financial  reporting  guidance in the AICPA Audit and
     Accounting Guides, Banks and Savings Institutions, Audits of Credit Unions,
     and  Audits  of  Finance  Companies.  It also  carries  forward  accounting
     guidance  for   practices   deemed  to  be  unique  to  certain   financial
     institutions.  The  adoption  of this SOP had no  impact  on the  Company's
     financial position or results of operations.




                                       8
<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 June 30, 2002 and December 31, 2001 were $728.2
million and $711.2 million, respectively, an increase of $17.0 million, or 2.4%,
during the  six-month  period.  The increase in total assets was  primarily  the
result  of  the  deployment  of  deposit  growth  into  various   earning  asset
categories.  Cash and cash  equivalents  increased by $3.5  million.  Investment
securities  increased by $10.9  million due to the purchase of $12.8  million of
such  securities.  Mortgage-backed  securities  available for sale  increased by
$48.5 million as $62.8 million in purchases of such securities more than off-set
the  principal   paydowns  received  from  these   securities.   Mortgage-backed
securities  held to maturity  decreased by $20.3 million due to the high rate of
prepayments  of  the  mortgages   underlying  these   pass-through   securities.
Similarly,  high  prepayments  of  existing  mortgages  in the loans  receivable
portfolio  more than  off-set  new loans  closed  and  purchased,  causing a net
decrease of $23.9 million in loans receivable.

Total  liabilities  increased by $14.1  million due to $15.4  million in deposit
growth.  Non-interest bearing demand deposits grew by $1.1 million while savings
and money market  accounts grew by $12.2 million and



                                       9

<PAGE>

interest-bearing  checking accounts  increased by $3.7 million.  Certificates of
deposit decreased by $1.7 million.

Total  consolidated  stockholders'  equity of the Company  was $60.8  million or
8.36% of assets at June 30, 2002,  compared to $58.0  million or 8.15% of assets
at December  31,  2001.  During the first half of 2002 the  Company  repurchased
15,000  shares of its common  stock and issued  20,038  shares  pursuant  to the
exercise of stock options. As of June 30, 2002, there were approximately 116,000
shares available for repurchase under the previously  announced share repurchase
plan, and the Company will continue to repurchase  shares as share  availability
and market conditions permit.

Asset Quality

During the second  quarter of 2002,  the Company's  provision for loan and lease
losses was $538,000  compared with $124,000 during 2001, an increase of $414,000
that is due to a default by the servicer of the Company's $2.8 million purchased
lease portfolio.  The servicer of the Company's purchased lease portfolio failed
to remit to the Company all of the money collected on the Company's behalf.  The
Company  has since  removed  the  servicer  and  begun  servicing  these  leases
directly.  During the second  quarter of 2002 the  Company  charged-off  what is
believed to be its maximum  exposure of  approximately  $625,000 related to this
matter  and is  pursuing  recovery.  However,  there  can be no  assurance  that
additional  charges to the  Company's  earnings or allowance  for loan and lease
losses may not be  necessary.  Other than the  foregoing,  the  Company  has not
experienced any significant  deterioration in its asset quality during the first
half of 2002,  nor has the Company  experienced  any  significant  change in the
composition of its non-performing assets.

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

<TABLE>
<CAPTION>
                                                                          June 30,  December 31,
                                                                            2002        2001
                                                                            ----        ----
<S>                                                                      <C>         <C>
        Non-performing loans                                               $3,925      $3,776
        Ratio of non-performing loans to gross loans                       1.10%       0.99%
        Ratio of non-performing loans to total assets                      0.54%       0.53%
        Foreclosed property                                                 $  -        $40
        Foreclosed property to total assets                                0.00%       0.01%
        Ratio of total non-performing assets to total assets               0.54%       0.54%
</TABLE>

Management  maintains an allowance  for loan and lease 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 and
lease  portfolios will not exceed the allowance.  The following table sets forth
the  activity  in the  allowance  for loan and lease  losses  during the periods
indicated (in  thousands):
                                                          2002      2001
                                                          ----      ----
        Beginning  balance,  January 1,                 $1,972    $1,714
        Provision                                          688       249
        Less: charge-off's (recoveries), net               765       155
                                                        ------    ------
        Ending balance, June 30,                        $1,895    $1,808
                                                        ======    ======

                                       10
<PAGE>


RESULTS OF OPERATIONS FOR THE THREE MONTHS ENDED JUNE 30, 2002 AND 2001

Net Income.  The Company  recorded net income of $913,000,  or $0.33 per diluted
share,  for the three months ended June 30, 2002 as compared to  $1,688,000,  or
$0.64 per diluted share, for the three months ended June 30, 2001.

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  daily  balance of  interest-earning
assets or interest-bearing liabilities, respectively, for the periods indicated.

<TABLE>
<CAPTION>

                                                                          Three months ended June 30,
                                                                  2002                                    2001
                                                     --------------------------------        -------------------------------
                                                    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 (1).......................    $360,448       $6,429         7.15%     $362,295       $7,147         7.91%
    Mortgage-backed securities.................     212,146        3,188         6.03%      220,103        3,568         6.50%
    Investment securities......................      49,845          565         4.55%       46,795          671         5.75%
    Other interest-earning assets(2)...........      64,617          271         1.68%       39,904          431         4.33%
                                                     ------          ---                     ------          ---
      Total interest-earning assets............     687,056       10,453         6.10%      669,097       11,817         7.08%
                                                                  ------                                  ------
Non interest-earning assets....................      34,544                                  25,235
                                                     ------                                  ------
      Total assets.............................    $721,600                                $694,332
                                                   ========                                ========

Liabilities and stockholders' equity:
  Interest-bearing liabilities
    Deposits...................................    $432,918        2,707         2.51%     $403,810        3,577         3.55%
    Advances from the FHLB and other
               Borrowings......................     222,359        3,071         5.54%      227,345        3,156         5.57%
                                                    -------        -----                    -------        -----
      Total interest-bearing liabilities.......     655,277        5,778         3.54%      631,155        6,733         4.28%
                                                                   -----                                   -----
Non interest-bearing liabilities...............       7,674                                   8,778
                                                      -----                                   -----
      Total liabilities..........................   662,951                                 639,933
Stockholders' equity...........................      58,649                                  54,399
                                                     ------                                  ------
   Total liabilities and stockholders' equity....  $721,600                                $694,332
                                                   ========                                ========
Net interest income............................                   $4,675                                  $5,084
                                                                  ======                                  ======
Interest rate spread (3).......................                                  2.57%                                   2.81%
Net yield on interest-earning assets (4).......                                  2.73%                                   3.05%
Ratio of average interest-earning assets to
average interest bearing liabilities...........                                   105%                                    106%
</TABLE>


(1)  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.

(2)  Includes interest-bearing deposits in other banks.

(3)  Interest-rate spread represents the difference between the average yield on
     interest-earning   assets  and  the   average   cost  of   interest-bearing
     liabilities.

(4)  Net yield on  interest-earning  assets  represents net interest income as a
     percentage of average interest-earning assets.

                                       11
<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.

<TABLE>
<CAPTION>
                                                                           Three months ended
                                                                                June 30,
                                                                              2002 vs. 2001
                                                          ------------------------------------------------------
                                                                           Increase (decrease)
                                                                                 due to
                                                          ------------------------------------------------------
                                                                Volume              Rate            Net
                                                          ------------------------------------------------------
<S>                                                                   <C>           <C>             <C>
     Interest income:
          Loans receivable, net                                         $(36)          $(682)          $(718)
          Mortgage-backed securities                                    (126)           (254)           (380)
          Investment securities                                           242           (348)           (106)
          Other interest-earning assets                                   984         (1,144)           (160)
                                                          ----------------------------------------------------
             Total interest-earning assets                              1,064         (2,428)         (1,364)
                                                          ====================================================

     Interest expense:
          Deposits                                                      1,490         (2,360)           (870)
          Advances from the FHLB and other borrowings                    (69)            (16)            (85)
                                                          ----------------------------------------------------
             Total interest-bearing liabilities                         1,421         (2,376)           (955)
                                                          ====================================================
     Net change in net interest income                                 $(357)           $(52)          $(409)
                                                          ====================================================
</TABLE>

Total Interest Income.  Total interest income decreased by $1.4 million or 11.5%
to $10.5  million for the three  months  ended June 30, 2002  compared  with the
second quarter of 2001 primarily  because of the  consequences  of a substantial
decrease in market interest  rates.  Since the beginning of the first quarter of
2001, the Federal Reserve Board lowered the federal funds rate eleven times from
6.50% to 1.75%. Longer term market interest rates also decreased  significantly.
As a result, the Company's callable  investment  securities were called,  higher
coupon  mortgage-related  securities were paid down at an accelerated  rate, and
loans  receivable  were refinanced by borrowers at lower rates, or away from the
Bank,  resulting in large paydowns of higher yielding  loans.  In addition,  the
interest rates on the Company's  adjustable rate loans adjusted downward.  Thus,
each  component of the Company's  earning assets  produced less interest  income
because of declining market interest rates. In addition,  the Company's cash and
cash equivalents  were  significantly  higher during the 2002 period,  while the
rate earned on these assets,  the federal funds rate minus 25 basis points,  was
substantially  lower  during  the 2002  period.  At June 30,  2002 cash and cash
equivalents totaled $72.6 million.

Total  Interest  Expense.  Total interest  expense  decreased by $1.0 million or
14.2% to $5.8  million  for the  three-month  period  ended  June 30,  2002.  An
increase in deposit  interest  expense due to an increase in the average balance
of  deposits  was more than offset by lower  market  interest  rates  during the
period  and the lower  rates  paid on the  Company's  renewing  certificates  of
deposit that had been  originated  when market  interest  rates were higher.  In
addition,  during  the fourth  quarter  of 2001 and the first half of 2002,  the
Company lowered the interest rates paid on several of its other deposit products
in order to keep them in line with short term market interest rates,  mainly the
federal funds rate.


                                       12
<PAGE>


Non-interest  income. Total non-interest income was $466,000 for the three-month
period ended June 30, 2002  compared  with $809,000 for the same period in 2001.
The decrease is due to a $444,000  non-recurring gain on the sale of real estate
which occurred during the second quarter of 2001,  off-set in part by a $137,000
increase in the cash  surrender  value of bank-owned  life  insurance  which was
purchased during the third quarter of 2001.

Non-interest  expense.  Total non-interest  expense decreased by $69,000 to $3.4
million for the three months ended June 30, 2002  compared to the same period in
2001.  The  decrease  in  non-interest  expenses  is largely  attributable  to a
decrease in the other  operating  expense  category in which loan servicing fees
decreased  by $24,000  due to a  decrease  in the  amount of loans  serviced  by
others,  and service  charges on bank accounts  decreased by $35,000 because the
Company began  servicing  customer  accounts  in-house using item processing and
statement rendering capabilities installed during the first quarter of 2001. The
Company's  effective  tax rate  during  the  second  quarter  of 2002 was  23.0%
compared  with 26.1% during the second  quarter of 2001.  The decrease is due to
the purchase of bank-owned life insurance during the third quarter of 2001.





                                       13

<PAGE>


RESULTS OF OPERATIONS FOR THE SIX MONTHS ENDED JUNE 30, 2002 AND 2001

Net Income. The Company recorded net income of $2,116,000,  or $0.78 per diluted
share,  for the six months  ended June 30, 2002 as compared  to  $2,946,000,  or
$1.12 per diluted share, for the six months ended June 30, 2001.

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  daily  balance of  interest-earning
assets or interest-bearing liabilities, respectively, for the periods indicated.

<TABLE>
<CAPTION>
                                                                           Six months ended June 30,
                                                                 2002                                    2001
                                                    --------------------------------        -------------------------------
                                                  Average                   Average       Average                   Average
                                                  Balance     Interest      Yld/Cost      Balance     Interest      Yld/Cost
                                                  -------     --------      --------      -------     --------      --------
                                                                            (dollars in thousands)
Assets:
  Interest-earning assets:
<S>                                              <C>           <C>             <C>       <C>           <C>             <C>
    Loans receivable (1).......................    $366,435      $13,160         7.24%     $360,169      $14,313         8.01%
    Mortgage-backed securities.................     206,999        6,248         6.09%      224,934        7,348         6.59%
    Investment securities......................      48,921        1,152         4.75%       64,849        1,910         5.94%
    Other interest-earning assets(2)...........      59,225          480         1.63%       25,237          576         4.60%
                                                     ------          ---                     ------          ---
      Total interest-earning assets............     681,580       21,040         6.23%      675,189       24,147         7.21%
                                                                  ------                                  ------
Non interest-earning assets....................      34,922                                  26,712
                                                     ------                                  ------
      Total assets.............................    $716,502                                $701,901
                                                   ========                                ========

Liabilities and stockholders' equity:
  Interest-bearing liabilities
    Deposits...................................    $428,105        5,537         2.61%     $401,938        7,168         3.60%
    Advances from the FHLB and other
               Borrowings......................     222,359        6,108         5.54%      237,994        6,656         5.64%
                                                    -------        -----                    -------        -----
      Total interest-bearing liabilities.......     650,464       11,645         3.61%      639,932       13,824         4.36%
                                                                  ------                                  ------
Non interest-bearing liabilities...............       7,536                                   8,275
                                                      -----                                   -----
      Total liabilities..........................   658,000                                 648,207
Stockholders' equity...........................      58,502                                  53,694
                                                     ------                                  ------
   Total liabilities and stockholders' equity....  $716,502                                $701,901
                                                   ========                                ========
Net interest income............................                   $9,395                                 $10,323
                                                                  ======                                 =======
Interest rate spread (3).......................                                  2.61%                                   2.86%
Net yield on interest-earning assets (4).......                                  2.78%                                   3.08%
Ratio of average interest-earning assets to
average interest bearing liabilities...........                                   105%                                    106%

</TABLE>

(1)  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.
(2)  Includes interest-bearing deposits in other banks.
(3)  Interest-rate spread represents the difference between the average yield on
     interest-earning   assets  and  the   average   cost  of   interest-bearing
     liabilities.
(4)  Net yield on  interest-earning  assets  represents net interest income as a
     percentage of average interest-earning assets.


                                       14
<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.

<TABLE>
<CAPTION>
                                                                            Six months ended
                                                                                June 30,
                                                                              2002 vs. 2001
                                                          --------------------------------------------------
                                                                           Increase (decrease)
                                                                                 due to
                                                          --------------------------------------------------
                                                                Volume             Rate             Net
                                                          --------------------------------------------------
<S>                                                                   <C>          <C>             <C>
     Interest income:
          Loans receivable, net                                          $674       $(1,827)        $(1,153)
          Mortgage-backed securities                                    (563)          (537)         (1,100)
          Investment securities                                         (417)          (341)           (758)
          Other interest-earning assets                                   948        (1,044)            (96)
                                                          ---------------------------------------------------
             Total interest-earning assets                                642        (3,749)         (3,107)
                                                          ===================================================

     Interest expense:
          Deposits                                                      1,209        (2,840)         (1,631)
          Advances from the FHLB and other borrowings                   (431)          (117)           (548)
                                                          ---------------------------------------------------
             Total interest-bearing liabilities                           778        (2,957)         (2,179)
                                                          ===================================================

     Net change in net interest income
                                                                       $(136)         $(792)          $(928)
                                                          ===================================================
</TABLE>

Total Interest Income.  Total interest income decreased by $3.1 million or 12.9%
to $21.0  million for the six months ended June 30, 2002 compared with the first
half of 2001 primarily because of the consequences of a substantial  decrease in
market  interest  rates.  Since the beginning of the first quarter of 2001,  the
Federal  Reserve Board lowered the federal funds rate eleven times from 6.50% to
1.75%.  Longer term market  interest  rates also decreased  significantly.  As a
result the Company's callable investment  securities were called,  higher coupon
mortgage-related  securities  were paid down at an  accelerated  rate, and loans
receivable  were  refinanced by borrowers at lower rates, or away from the Bank,
resulting in large paydowns of higher yielding loans. In addition,  the interest
rates on the Company's  adjustable  rate loans  adjusted  downward.  Thus,  each
component of the Company's  earning assets produced less interest income because
of declining  market interest  rates.  In addition,  the Company's cash and cash
equivalents  were  significantly  higher during the 2002 period,  while the rate
earned on these  assets,  the  federal  funds  rate minus 25 basis  points,  was
substantially  lower  during  the 2002  period.  At June 30,  2002 cash and cash
equivalents totaled $72.6 million.

Total  Interest  Expense.  Total interest  expense  decreased by $2.2 million or
15.8% to $11.6 million for the six-month period ended June 30, 2002. An increase
in  deposit  interest  expense  due to an  increase  in the  average  balance of
deposits was more than offset by lower market  interest  rates during the period
and the lower rates paid on the Company's renewing  certificates of deposit that
had been originated when market interest rates were higher. In addition,  during
the fourth quarter of 2001 and the first half of 2002,  the Company  lowered the
interest  rates paid on several of its other  deposit  products in order to keep
them in line with short term market  interest  rates,  mainly the federal  funds
rate.

                                       15

<PAGE>


Non-interest  income. Total non-interest income was $1,006,000 for the six-month
period ended June 30, 2002 compared with $1,209,000 for the same period in 2001.
The decrease is due to a $444,000  non-recurring gain on the sale of real estate
which occurred during the second quarter of 2001,  off-set in part by a $270,000
increase in the cash  surrender  value of bank-owned  life  insurance  which was
purchased during the third quarter of 2001.

Non-interest  expense.  Total non-interest expense decreased by $349,000 to $6.9
million for the six months  ended June 30,  2002  compared to the same period in
2001.  Compensation and benefits  expense was reduced by a $93,000  reduction in
pension  expense caused by participants  who had very high balances  leaving the
plan. Occupancy and equipment expense decreased in part because the Company sold
one of its branch  offices  during the fourth  quarter of 2001, and also because
maintenance expenses were unusually high during the first quarter of 2001 due to
inclement  weather.  Professional  fees were lower during the first half of 2002
compared  to the year  earlier  period  mainly due to $60,000 of costs  incurred
during the first quarter of 2001 associated with the  implementation of in-house
item processing and statement rendering capabilities.  The decrease in the other
operating expense category is caused by decreased loan servicing fees which were
lower by $48,000  due to a decrease  in the amount of loans  serviced by others,
and  decreased  service  charges  on bank  accounts  which were lower by $99,000
because the Company began  servicing  customer  accounts using the in-house item
processing  and  statement  rendering  capabilities  installed  during the first
quarter of 2001. The Company's  effective tax rate during the first half of 2002
was 23.5% compared with 26.1% during the first half of 2001. The decrease is due
to the purchase of bank-owned life insurance during the third quarter of 2001.



                                       16

<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  six-month period ended
June 30, 2002 in the ability of the Company and its  subsidiaries  to fund their
operations.

At June 30,  2002,  the Company had  commitments  outstanding  under  letters of
credit of $1.0 million,  commitments  to originate  loans of $5.7  million,  and
commitments  to fund  undisbursed  balances of closed  loans and unused lines of
credit of $25.7 million.

Capital Requirements

The Bank is in compliance  with all of its capital  requirements  as of June 30,
2002.



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 six months ended June 30, 2002.




                                       17
<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

                             99.1 Certification pursuant to 18 U.S.C.ss.1350,
                             as adopted pursuant to Section 906 of the
                             Sarbanes-Oxley Act of 2002

                      (b)     Reports on Form 8-K
                              None










                                       18
<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:      August 9, 2002             John R. Stranford
    ---------------------
                                      President and CEO
                                      (Principal Executive Officer)


                                      /s/ Dennis R. Stewart
                                      ---------------------
Date:      August 9, 2002             Dennis R. Stewart
     --------------------
                                      Senior Vice President and
                                      Chief Financial Officer
                                      (Principal Financial & Accounting Officer)










                                       19