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, 1999
                                   ---------------------------------------------
                                       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 or organization) (I.R.S.Employer
                                                             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 5, 1999
                                                           ----------------

              Class                                Outstanding
     ----------------------------                 ----------------
         $.10 par value common                    2,760,734 shares


<PAGE>






                    TF FINANCIAL CORPORATION AND SUBSIDIARIES

                                    FORM 1O-Q

                    FOR THE QUARTER ENDED SEPTEMBER 30, 1999

                                      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  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       Unaudited
                                                                                     September 30,   December 31,   September 30,
                                                                                          1999           1998            1998
                                                                                          ----           ----            ----
<S>                                                                                   <C>            <C>             <C>
                                   Assets
Cash and cash equivalents                                                               $16,422        $42,703         $45,983
Certificates of deposit in other financial institutions                                   1,347          2,238           2,338
Investment securities available for sale - at fair value                                 21,088          9,042          36,225
Investment securities held to maturity (fair value of $65,267, $81,094 and               66,129         80,895          90,740
    $91,164, respectively)
Mortgage-backed securities available for sale - at fair value                           119,145         75,285          37,678
Mortgage-backed securities held to maturity (fair value of $164,585,                    168,319        180,964         229,224
    $182,560, and $233,683, respectively)
Loans receivable, net                                                                   285,665        240,841         222,886
Federal Home Loan Bank stock B at cost                                                   12,668          9,168           9,168
Accrued interest receivable                                                               4,572          4,558           4,323
Real estate held for investment                                                           2,348          2,348             ---
Goodwill and other intangible assets                                                      6,763          7,389           7,598
Premises and equipment, net                                                               8,828          9,017           8,639
Other assets                                                                              1,392          1,160           1,353
                                                                                          -----          -----           -----
                                Total Assets                                           $714,686      $665,608         $696,155
                                                                                       ========      =========        ========

                    Liabilities and Stockholders' Equity
Liabilities
   Deposits                                                                            $406,612       $438,913        $449,708
   Advances from the Federal Home Loan Bank                                             248,359        163,359         183,359
   Advances from borrowers for taxes and insurance                                          755          1,204             691
   Accrued interest payable                                                               4,867          4,166           6,064
   Other liabilities                                                                      2,825          5,306           3,807
                                                                                          -----          -----           -----
                             Total Liabilities                                          663,418        612,948         643,629
                                                                                        -------        -------         -------

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; 2,759,721,  2,857,932, and 2,901,812  shares
       outstanding at September 30, 1999, December 31, 1998 and September 30, 1998,
       net of treasury shares of 2,250.626, 2,143,319, and 2,098,418, respectively.         529            529             529
   Retained earnings                                                                     47,763         45,762          44,958
   Additional paid-in capital                                                            52,055         51,957          51,942
   Unearned ESOP shares                                                                  (2,796)        (2,888)         (2,898)
   Shares acquired by MSBP                                                                 (148)          (468)           (575)
   Treasury stock - at cost                                                             (44,323)       (42,386)        (41,563)
   Accumulated other comprehensive income (loss)                                         (1,812)           154             133
                                                                                        -------            ---             ---
                         Total Stockholders' Equity                                      51,268         52,660          52,526
                                                                                         ------         ------          ------

Total Liabilities and Stockholders' Equity                                             $714,686      $665,608         $696,155
                                                                                       ========      =========        ========
</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 Nine Months
                                                                             Ended September 30,    Ended September 30,
                                                                              1999        1998       1999       1998
                                                                              ----        ----       ----       ----
<S>                                                                         <C>         <C>       <C>        <C>
Interest income
   Loans                                                                    $5,481      $4,555    $16,277    $14,064
   Mortgage-backed securities                                                4,687       4,524     12,983     12,097
   Investment securities                                                     1,642       1,828      5,040      5,155
   Interest bearing deposits and other                                          72         472        619      1,202
                                                                                --         ---        ---      -----
TOTAL INTEREST INCOME                                                       11,882      11,379     34,919     32,518
                                                                            ------      ------     ------     ------
Interest expense
   Deposits                                                                  3,571       4,425     11,135     13,103
   Borrowings                                                                3,457       2,667      9,670      6,241
TOTAL INTEREST EXPENSE                                                       7,028       7,092     20,805     19,344
                                                                             -----       -----     ------     ------
NET INTEREST INCOME                                                          4,854       4,287     14,114     13,174
Provision for loan losses                                                       90          15        180         45
                                                                                --          --        ---         --
NET INTEREST INCOME AFTER PROVISION FOR LOAN LOSSES                          4,764       4,272     13,934     13,129
                                                                             -----       -----     ------     ------
Non-interest income
   Gain on sale of real estate acquired through foreclosure                      8          11          4         35
   Gain (loss) on sale of loans and securities                                 ---         (1)        ---        435
   Service fees, charges and other operating income                            290         328        915        974
                                                                               ---         ---        ---        ---
       TOTAL NON-INTEREST INCOME                                               298         338        919      1,444
                                                                               ---         ---        ---      -----
Non-interest expense
   Compensation and benefits                                                 1,792       1,597      5,124      4,882
   Occupancy and equipment                                                     505         500      1,510      1,423
   Federal deposit insurance premium                                            62          69        195        209
   Data processing                                                               5           4         14        453
   Professional fees                                                           198         179        547        463
   Amortization of goodwill and other intangible assets                        209         225        627        675
   Advertising                                                                  91          91        272        271
   Other operating                                                             594         543      1,821      1,613
                                                                               ---         ---      -----      -----
TOTAL NON-INTEREST EXPENSE                                                   3,456       3,208     10,110     10,036
                                                                             -----       -----     ------     ------
     INCOME BEFORE INCOME TAXES                                              1,606       1,402      4,743      4,537
Income taxes                                                                   551         534      1,679      1,687
                                                                               ---         ---      -----      -----
NET INCOME                                                                  $1,055        $868     $3,064     $2,850
                                                                            ======        ====     ======     ======

Basic earnings per share                                                     $0.38       $0.30      $1.10      $0.98
Diluted earnings per share                                                   $0.36       $0.27      $1.03      $0.88
Weighted average number of shares outstanding B Basic                        2,760       2,899      2,780      2,894
Weighted average number of shares outstanding B Diluted                      2,933       3,186      2,965      3,226

                                   See notes to consolidated financial statements

</TABLE>

                                       4

<PAGE>




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


                                                                                            For the Nine Months Ended
                                                                                                   September 30,
                                                                                                1999          1998
                                                                                                ----          ----
<S>                                                                                            <C>          <C>
CASH FLOWS FROM OPERATING ACTIVITIES
Net Income                                                                                       $3,064       $2,850
Adjustments   to  reconcile  net  income  to  net  cash  provided  by  operating
activities:
                 Mortgage loan servicing rights                                                      10           13
                 Deferred loan origination fees                                                     (51)         (91)
                 Premiums and discounts on investment securities, net                                 8           66
                 Premiums and discounts on mortgage-backed securities and loans, net                526          431
                 Amortization of goodwill and other intangible assets                               626          677
Provision for loan losses and provision for losses on real estate                                   180           45
Depreciation of premises and equipment                                                              674          613
Recognition of ESOP and MSBP expenses                                                               509          617
Gain on sale of real estate acquired through foreclosure                                             (5)         (35)
Gain on sale of loans and securities                                                                ---         (442)
Increase in:
                 Accrued interest receivable                                                        (14)        (366)
                 Other assets                                                                      (310)        (280)
Increase (decrease) in:
                 Accrued interest payable                                                           701        3,594
                 Other liabilities                                                               (2,481)        (172)
                                                                                                -------        -----
                 NET CASH PROVIDED BY OPERATING ACTIVITIES                                        3,437        7,520
                                                                                                  -----        -----

CASH FLOWS FROM INVESTING ACTIVITIES
Loan origination and principal payments on loans, net                                            33,757       22,391
Purchases of loans                                                                              (78,993)     (14,144)
Proceeds from loan sales                                                                            ---       19,496
Maturities of certificates of deposit in other financial institutions, net                          891          399
Purchases of investment securities available for sale                                           (20,732)    (206,158)
Purchases of investment securities  held to maturity                                           (147,742)     (73,617)
Purchases of mortgage-backed securities  available for sale                                     (63,482)     (16,244)
Purchase of mortgage-backed securities  held to maturity                                        (35,412)    (126,185)
Proceeds from sale of investment securities available for sale                                      ---        7,445
Proceeds from sale of mortgage backed securities available for sale                                 ---        5,683
Proceeds from maturities of investment securities  held to maturity                             167,937       34,661
Proceeds from maturities of investment securities  available for sale                             4,000      195,567
Principal repayments from mortgage-backed securities held to maturity                            47,825       40,889
Principal repayments from mortgage-backed securities available for sale                          16,773        9,729
Purchases and redemption of Federal Home Loan Bank Stock, net                                    (3,500)      (4,250)
Proceeds from sales of real estate acquired through foreclosure                                     195          199
Purchase of premises and equipment                                                                 (485)      (1,363)
                                                                                                  -----      -------
                 NET CASH USED IN  INVESTING ACTIVITIES                                         (78,968)    (105,502)
                                                                                               --------    ---------
                 See notes to consolidated financial statements

</TABLE>

                                       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,
                                                                                                1999          1998
                                                                                                ----          ----

<S>                                                                                            <C>             <C>

CASH FLOWS FROM FINANCING ACTIVITIES
Net decrease in deposits                                                                        (32,301)        (721)
Advances from Federal Home Loan Bank , net                                                       85,000       95,000
Net decrease in advances from borrowers for taxes and insurance                                    (449)        (900)
Exercise of stock options                                                                           119          ---
Purchase of treasury stock                                                                       (2,117)          ---
Common stock cash dividend                                                                       (1,002)      (1,039)
                                                                                                -------      -------
                 NET CASH PROVIDED BY FINANCING ACTIVITIES                                       49,250       92,340
                                                                                                 ------       ------
                 NET DECREASE IN CASH AND CASH EQUIVALENTS                                      (26,281)      (5,643)
Cash and cash equivalents at beginning of period                                                 42,703       51,625
                                                                                                 ------       ------
Cash and cash equivalents at end of period                                                      $16,422      $45,983
                                                                                                =======      =======
Supplemental disclosure of cash flow information
Cash paid for
                 Interest on deposits and advances                                              $20,207      $15,750
                 Income taxes                                                                    $1,011       $1,709
Non-cash transactions
                 Transfers from loans to real estate acquired through foreclosure                  $122         $159

                                   See notes to consolidated financial statements


</TABLE>

                                       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,  1999,
         December 31, 1998,  September 30, 1998 and for the three and nine-month
         periods  ended  September  30, 1999 and 1998 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,
         1999  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, 1998.

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)

         On  January 1, 1998,  the  Company  adopted  SFAS No.  130,  "Reporting
         Comprehensive   Income".   The  Company=s  other  comprehensive  income
         consists of net  unrealized  gains  (losses) on  investment  securities
         available  for sale.  Total  comprehensive  income for the  three-month
         periods ended  September 30, 1999 and 1998 was $340,000 and $1,028,000,
         net of applicable income tax of $131,000 and $628,000, respectively.

         Total  comprehensive  income for the nine-month periods ended September
         30, 1999 and 1998 was  $1,098,000  and  $2,814,000,  net of  applicable
         income tax of $524,000 and $1,666,000, respectively.



                                       7


<PAGE>




                    TF FINANCIAL CORPORATION AND SUBSIDIARIES

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

GENERAL

TF Financial  Corporation  (the "Company") 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, 1999 and December 31, 1998 totaled
$714.7 million and $665.6 million,  respectively,  an increase of $49.1 million,
or 7.4%, during the nine-month period. This increase was primarily the result of
a $44.8  million  increase  in loans  receivable,  a $28.5  million  increase in
investment  and  mortgage-backed  securities,  and a $3.5  million  increase  in
Federal Home Loan Bank stock. These increases were partially offset by the $26.3
million decrease in cash and cash equivalents.  The increase in total assets was
primarily funded by the $85.0 million increase in advances from the Federal Home
Loan Bank.

The net increase in loans  receivable of $44.9  million,  or 18.6%,  from $240.8
million at  December  31,  1998 to $285.7  million  at  September  30,  1999 was
primarily  the  result  of the  purchase  of $  71.9  million  of  single-family
residential  mortgage  loans and the  purchase  of $4.5  million  of  commercial
mortgage loans,  partially offset by loan  repayments.  While it is management=s
intent to originate the majority of its portfolio  loans,  similar loan products
will be purchased in the secondary markets during periods when  opportunities to
originate  in  local  markets  are not  sufficient  to  satisfy  portfolio  loan
capacity.
                                       8

<PAGE>



Investment  securities at September  30, 1999 totaled $87.2 million  compared to
$89.9 million at December 31, 1998. Mortgage-backed securities aggregated $287.5
million at September 30, 1999  compared to $256.2  million at December 31, 1998.
The combined increase in securities  balances is due to the redeployment of cash
equivalents into longer-term securities with higher yields.

The  increase  in Federal  Home Loan Bank stock  balances  was the result of the
purchase  of  $3.5  million  of  stock  required  to  support  the  increase  in
outstanding advances from the Federal Home Loan Bank.

Total  liabilities  increased by $50.5  million  during the first nine months of
1999 primarily as a result of the $85.0 million, or 52.0%,  increase in advances
from the Federal Home Loan Bank. This increase was offset by a $32.3 million, or
7.4%,  decrease in total  deposits  balances.  The increase in advances from the
Federal  Home Loan Bank  funded the  purchase of loans and  securities,  and the
decrease in deposit balances.

Total consolidated stockholders' equity of the Company decreased by $1.4 million
or 2.6%, to $51.3 million,  or 7.2% of total assets at September 30, 1999,  from
$52.7  million or 8.0 % of total  assets at  December  31,  1998.  The  decrease
resulted  primarily from the net repurchase of 107,307 shares of common stock at
a cost of approximately  $1.9 million, a decrease of $2.0 million in accumulated
other  comprehensive  income,  partially  offset by a net  increase  to retained
earnings of $2.0 million for the nine-month period.  During the first quarter of
1999  management  announced the completion of its then current share  repurchase
program,  and that the Company-s  board of directors had authorized the purchase
of up to 152,052  additional  shares of the  Company's  stock in the open market
during the subsequent twelve months.

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, 1999.

      The following table sets forth  information  regarding the Company=s asset
quality (dollars in thousands):
<TABLE>
<CAPTION>

                                                                               September 30,     December 31,    September 30,
                                                                                    1999             1998            1998
                                                                                    ----             ----            ----
<S>                                                                              <C>              <C>             <C>
             Non-performing loans                                                  $1,392           $1,594          $1,734
             Ratio of non-performing loans to gross loans                            0.48%            0.65%           0.77%
             Ratio of non-performing loans to total assets                           0.19%            0.24%           0.25%
             Foreclosed property                                                   $  240           $  308          $  346
             Foreclosed property to total assets                                     0.03%            0.05%           0.05%
             Ratio of total non-performing assets to total assets                    0.23%            0.28%           0.30%
</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)
<TABLE>
<CAPTION>

                                                                                      1999            1998
                                                                                      ----            ----
<S>                                                                               <C>             <C>
         Beginning balance, January 1,                                              $1,909          $2,029
         Provision                                                                     180              45
         Less: charge-off's (recoveries), net                                          202              (3)
                                                                                     ------         -------
         Ending balance, September 30,                                              $1,887          $2,077
                                                                                    =======         ======

</TABLE>

                                       9
<PAGE>



RESULTS OF OPERATIONS FOR THE THREE MONTHS ENDED SEPTEMBER 30, 1999

Net Income. The Company recorded net income of $1,055,000,  or $0.38 per diluted
share, for the three months ended September 30, 1999 as compared to $868,000, or
$0.30 per diluted share, for the three months ended September 30, 1998.

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,
                                                                 1999                                    1998
                                                  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)                           $290,693        5,481         7.54%     $229,198       $4,555         7.95%
    Mortgage-backed securities                      290,070        4,687         6.46%      271,596        4,524         6.66%
    Investment securities                           112,430        1,642         5.84%      125,044        1,828         5.85%
    Other interest-earning assets(1)                  7,060           72         4.08%       48,034          472         3.93%
                                                      -----           --                     ------          ---
      Total interest-earning assets                 700,253       11,882         6.79%      673,872       11,379         6.75%
                                                                  ------                                  ------
Non interest-earning assets                          21,793                                  22,299
                                                     ------                                  ------
      Total assets                                  722,046                                 696,171
                                                    =======                                 =======

Liabilities and stockholders= equity:
  Interest-bearing liabilities:
    Deposits                                        412,557        3,571         3.46%      451,399        4,425         3.92%
    Advances from the FHLB                          248,615        3,457         5.56%      181,692        2,667         5.87%
                                                    -------        -----                    -------        -----
      Total interest-bearing liabilities            661,172        7,028         4.25%      633,091        7,092         4.48%
                                                                   -----                                   -----
Non interest-bearing liabilities                      9,654                                  10,946
                                                      -----                                  ------
      Total liabilities                             670,826                                 644,037
Stockholders= equity                                 51,220                                  52,134
                                                     ------                                  ------
   Total liabilities and stockholders'             $722,046                                $696,171
                                                   ========                                ========
equity...
Net interest income                                               $4,854                                  $4,287
                                                                  ======                                  ======
Interest rate spread (2)                                                         2.54%                                   2.27%
Net yield on interest-earning assets (3)                                         2.77%                                   2.54%
Ratio of average interest-earning assets to
average interest bearing liabilities                                              106%                                    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.
<TABLE>
<CAPTION>


                                                                                Three Months Ended
                                                                                   September 30,
                                                                                   1999 vs. 1998
                                                                            -----------------------
                                                                                Increase (Decrease)
                                                                                      Due to
                                                                            -----------------------
                                                                            Volume           Rate        Net
                                                                            ------           ----        ---
<S>                                                                        <C>            <C>          <C>
Interest income:
    Loans receivable, net                                                  $2,352         ($1,426)       $926
     Mortgage-backed securities                                               867            (704)        163
     Investment securities                                                   (183)             (3)       (186)
     Other interest-earning assets                                           (521)            121        (400)
                                                                            ------        ---------      -----
        Total interest-earning assets                                       2,515          (2,012)        503
                                                                            =====         =========      =====

Interest expense
   Interest-bearing liabilities:
     Deposits                                                                (361)           (493)       (854)
     Advances from the FHLB                                                 1,676            (886)        790
                                                                           ------           -----        ----
        Total interest-bearing liabilities                                  1,315          (1,379)        (64)
                                                                           ------           -----        ----
Net change in net interest income                                          $1,200           ($633)       $567
                                                                           ======           =====        ====

</TABLE>

Total Interest  Income.  Total interest  income  increased by $503 thousand,  or
4.4%,  to $11.9  million for the three months ended  September 30, 1999 compared
with the third  quarter of 1998  primarily  because of  increases in the average
balance  of loans  receivable.  The  increase  in the  average  balance of loans
receivable  is  primarily  attributable  to the  purchase  of $102.8  million of
mortgage  loans during the first quarter of 1999 and the fourth quarter of 1998.
The increased  interest income  attributable  to the increased  balance of loans
receivable  was  partially  offset by the decrease to the average yield on loans
receivable.  Two factors,  each the result of lower market interest rates during
the  relevant  period,  caused the yield to decrease:  accelerated  repayment of
loans with higher  coupons,  and lower yields on loans  purchased as compared to
the then-current portfolio yield.

Total Interest Expense. Total interest expense decreased to $7.0 million for the
three-month  period  ended  September  30,  1999 from $7.1  million for the same
period in 1998  primarily  due to increased  advances from the Federal Home Loan
Bank which were used to fund asset growth and deposit outflows. The average rate
paid on Federal  Home Loan Bank  advances  decreased  due to the effect of lower
rates on new advances,  and the Company's use of lower cost convertible advances
for a portion of its funding needs.

The average  balance of deposits  decreased 38.8 million,  or 8.6%,  from $451.4
million for the  three-month  period ended  September 30, 1998 to $413.0 million
for the  three-month  period ended  September 30, 1999. The average rate paid on
deposits  decreased from 3.92% for the  three-month  period ended  September 30,
1998 to 3.46% for the

                                       11
<PAGE>



three-month  period  ended  September  30,  1999.  The  decrease  in the average
balances  and the average  rate paid on deposits  resulted  from the maturity of
higher rate deposits  combined with  management's  efforts to price  deposits at
lower rates.

Non-interest  income.  Total  non-interest  income  was  $298  thousand  for the
three-month  period ended September 30, 1999 compared with $338 thousand for the
same  period  in  1998.  The  decrease  is   attributable  to  $55  thousand  of
miscellaneous,  non-recurring  income that was received during the third quarter
of 1998.

Non-interest  expense.  Total non-interest expense increased by $248 thousand to
$3.5 million for the three months ended  September 30, 1999 compared to the same
period in 1998.  Compensation and benefits  expenses  increased by $195 thousand
during the third  quarter of 1999  compared  to the year  earlier  period due in
large part to the higher number of filled positions during the 1999 quarter.


                                       12
<PAGE>



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

Net Income.  The Company  recorded net income of $3,064,000 or $1.03 per diluted
share for the nine months ended  September 30, 1999 as compared to $2,850,000 or
$0.88 per diluted share for the nine months ended September 30, 1998.

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,
                                          Three Months Ended March,


                                                                             1998
                                                 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)                             $284,928      $16,277         7.62%     $235,460      $14,064         7.96%
  Mortgage-backed securities                        272,139       12,983         6.36%      247,944       12,097         6.51%
  Investment securities                             117,037        5,040         5.74%      115,216        5,155         5.97%
  Other interest-earning assets(1)                   16,734          619         4.93%       38,022        1,202         4.22%
                                                     ------          ---                     ------        -----
    Total interest-earning assets                   690,838       34,919         6.74%      636,642       32,518         6.81%
                                                                  ------                                  ------
Non interest-earning assets                          24,455                                  22,277
                                                     ------                                  ------
    Total assets                                    715,293                                 658,919
                                                    =======                                 =======

Liabilities and stockholders= equity:
  Interest-bearing liabilities:
     Deposits                                       420,949       11,135         3.53%      449,929       13,103         3.88%
    Advances from the FHLB                          232,628        9,670         5.54%      147,248        6,241         5.65%
                                                    -------        -----                    -------        -----
      Total interest-bearing liabilities            653,577       20,805         4.24%      597,177       19,344         4.32%
                                                                  ------                                  ------
Non interest-bearing liabilities                      9,936                                  10,336
                                                      -----                                  ------
      Total liabilities                             663,513                                 607,513
Stockholders' equity                                 51,780                                  51,406
                                                     ------                                  ------
    Total liabilities and stockholders'            $715,293                                $658,919
                                                   ========                                ========
equity
Net interest income                                              $14,114                                 $13,174
                                                                 =======                                 =======
Interest rate spread (2)                                                         2.50%                                   2.49%
Net yield on interest-earning assets (3)                                         2.72%                                   2.76%
Ratio of average interest-earning assets to
average interest bearing liabilities                                              106%                                    107%


</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.
<TABLE>
<CAPTION>


                                                                                       Nine Months Ended
                                                                                          September 30,
                                                                                          1999 vs. 1998
                                                                           -----------------------------------------
                                                                                      Increase (Decrease)
                                                                                            Due to
                                                                           -----------------------------------------
                                                                            Volume           Rate             Net
                                                                            ------           ----             ---
<S>                                                                       <C>             <C>              <C>
Interest income:
     Loans receivable, net                                                  $3,170           ($957)           $2,213
     Mortgage-backed securities                                              1,319            (433)              886
     Investment securities                                                     121            (236)             (115)
     Other interest-earning assets                                            (865)            280              (583)
        Total interest-earning assets                                        3,745          (1,344)            2,401

Interest expense
   Interest-bearing liabilities:
      Deposits                                                                (820)         (1,148)           (1,968)
     Advances from the FHLB                                                  3,631            (202)            3.429
        Total interest-bearing liabilities                                   2,811          (1,350)            1,461


Net change in net interest income                                             $934               $6             $940
</TABLE>

Total Interest Income. Total interest income increased by $2.4 million, or 9.0%,
to $34.9 million for the nine months ended  September 30, 1999 compared with the
first nine months of 1998 primarily  because of increases in the average balance
of loans receivable and mortgage-backed  securities. The increase in the average
balances of loans receivable is primarily attributable to the purchase of $102.8
million of mortgage loans in the first quarter of 1999 and the fourth quarter of
1998.  The increased  interest  income  attributable  to the  increased  average
balance of loans  receivable was partially offset by the decrease to the average
yield on loans receivable. Two factors, each the result of lower market interest
rates during the  relevant  period,  caused the yield to  decrease:  accelerated
repayment of loans with higher  coupons,  and lower yields on loans purchased as
compared to the then-current portfolio yield.

Total Interest  Expense.  Total interest expense  increased to $20.8 million for
the nine-month  period ended  September 30, 1999 from $19.3 million for the same
period in 1998  primarily  due to increased  advances from the Federal Home Loan
Bank which were used to fund asset growth and deposit outflows.

The average balance of deposits  decreased  $29.0 million,  or 6.4%, from $450.0
million for the nine-month period ended September 30, 1998 to $420.9 million for
the  nine-month  period  ended  September  30,  1999.  The average  rate paid on
depositsdecreased from 3.88% for the nine-month period ended September 30, 1998
to 3.53% for the nine-month period ended September 30, 1999. The decrease in the
average balances  and the  average  rate  paid on  deposits

                                       14

<PAGE>

resulted  from the maturity of higher rate deposits  combined with  management's
efforts to price deposits at lower rates.

Non-interest  income.  Total  non-interest  income  was  $919  thousand  for the
nine-month  period ended  September  30, 1999 compared with $1.4 million for the
same period in 1998. The decrease of $525 thousand is primarily  attributable to
the decrease in the gain on sale of loans and securities

Non-interest expense. Total non-interest expense increased $74 thousand to $10.1
million for the nine months ended September 30, 1999 compared to the same period
in 1998. Data processing decreased by $435 thousand as a result of conversion to
an in-house data processing system,  which occurred during the second quarter of
1998. Professional fees increased by $84 thousand as a result of consulting fees
associated  with Year 2000  compliance  remediation  and  testing.  In addition,
compensation and benefits, occupancy and equipment, and other expenses increased
by a combined $490 thousand, primarily due to the conversion to an in-house data
processing system.


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,  and new advances  from the Federal Home Loan Bank.  There has
been no material  adverse change during  nine-month  period ended  September 30,
1999  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's  regulatory  liquidity was 17.2% and 25.4% at September 30, 1999
and 1998, respectively.

At September 30, 1999, the Savings Bank had outstanding commitments to originate
loans of $11.5 million, to purchase  investment  securities of $677 thousand and
to fund undisbursed balances of closed loans and unused lines of credit of $31.2
million.

Capital Requirements

The Savings Bank is in  compliance  with all of its capital  requirements  as of
September 30, 1999.

                                       15

<PAGE>



YEAR 2000

Readiness Efforts

The following  discussion of the  implications  of the Year 2000 problem for the
Company  contains  numerous  forward-looking   statements  based  on  inherently
uncertain  information.  The cost of the project is based on  management=s  best
estimates,  which are derived utilizing a number of assumptions regarding future
events including the continued  availability of internal and external resources,
third party modifications and other factors.  However, there can be no guarantee
that these  events  will  occur as planned  and  actual  results  could  differ.
Moreover,  although  management  believes it will be able to make the  necessary
systems  modifications  in advance,  there can be no  guarantee  that failure to
modify the systems would not have a material adverse effect on the Company.

In 1998, a comprehensive  project plan (APlan@) to address the Year 2000 problem
and related  issues as those relate to the Company's  operations  was developed,
approved by the Board of Directors  and  implemented.  The  Company=s  Year 2000
effort is proceeding in accordance with the written Plan.  Progress  reports are
provided to the Board at least monthly.

The Year 2000  issue is the  result of  potential  problems  with  software  and
computer  systems  or any  equipment  with  computer  chips  that store the year
portion of the date as just  two-digits.  Systems using this two-digit  approach
may not be able to determine  whether 00 represents  the year 2000 or 1900.  The
problem, if not corrected,  could make those systems fail altogether or possibly
cause them to generate  incorrect  calculations  resulting  in a  disruption  of
normal computer and related operations.

The  Company's  Plan is divided  into four  broad  areas of  concern:  hardware,
software,  service providers and customers.  Year 2000 issues being addressed in
each  of  these  areas   include   both   information-related   technology   and
non-information related technology.  A project team that consists of key members
of the Company=s technology staff,  representatives of functional business units
and senior management was developed. From the assessment, the Company identified
and prioritized those systems deemed to be mission critical or those that have a
significant  impact on  normal  operations.  Formal  communications  with  those
providers of data processing  capabilities and other external service  providers
were  initiated  in 1997 and 1998 to  assess  the Year 2000  readiness  of their
products and services.

Thus far,  responses  indicate  that the  significant  providers  are  currently
following  plans  developed  to address  processing  of  transactions  beginning
January 1, 2000. The Company has contacted all significant  commercial borrowers
to ensure that each one is following a plan intended to mitigate Year 2000 risks
to their  business.  In  addition,  the Company has used  statement  inserts and
direct mailings in order to make its depositors  aware of Year 2000 issues.  The
Company  contacted  all  non-information  technology  suppliers  (i. e.  utility
systems,  telephone systems, etc.) regarding their Year 2000 state of readiness.
These parties have indicated that they have  established Year 2000 plans and are
in various  stages of  remediation  and testing.  We are unable to test the Year
2000 readiness of our significant suppliers of utilities.  We are relying on the
utility companies= internal testing and representations in order for the Company
to conclude  that they will be able to deliver the  resources  necessary for the
Company to operate its systems. The Company is unable to determine what recourse
it will have should these utilities fail to successfully resolve their Year 2000
issues.

                                       16


<PAGE>






Costs

The total cost to the Company of these Year 2000  compliance  activities has not
been and is not anticipated to be material to its financial  position or results
of operations in any given year. In total, the Company estimates that its costs,
excluding  personnel  expenses,  for Year 2000  remediation  and  testing of its
computer  systems  will amount to less than $90  thousand  for the twelve  month
period ending  December 31, 1999.  Approximately  $10 thousand of these expenses
had not been incurred at September 30, 1999.

Risk Assessment

Based upon current  information related to the progress of its major vendors and
service  providers,  management has determined that the Year 2000 issue will not
pose   significant   operational   problems  for  its  computer   systems.   The
determination  is based on the  ability  of vendors  and  service  providers  to
renovate,  in a timely manner,  the products and services on which the Company's
systems rely. To date, management has received assurances by the majority of its
vendors and service providers that they will be Year 2000 compliant.  While most
are on  schedule,  the Company can give no  assurance  that the systems of these
suppliers  will be timely  renovated.  The  Company is  exposed  to  operational
disruptions  from  external  entities  that  have  direct or  indirect  business
relationships with the Company,  such as  telecommunications  service providers,
customers,  vendors,  payment  systems  providers  and others.  Despite the best
efforts of  management  to address  these  issues,  the vast  number of external
business  relationships  makes it impossible to assure that a failure to achieve
compliance by one or more of these  entities  would not have a material  adverse
impact on the operations of the Company.

Contingency Plans


Realizing that some  disruption may occur despite its best efforts,  the Company
has developed  contingency plans for each  mission-critical  system in the event
that one or more of those systems fail.  While this is an ongoing  process,  the
Company's contingency plan is substantially  complete. The Company's contingency
plan provides for the  replacement of a service  provider,  or  substitution  of
alternative  procedures in the case of a process, as soon as it becomes apparent
that any service  provider  will fail to perform or that any process  will fail.
This phase of the plan will be tested and validated  throughout the remainder of
1999. In order to ensure the  availability of a command and control center,  the
Company  installed  during  the  third  quarter  of 1999 a natural  gas  powered
generator at its primary data processing facility. This generator is intended to
enable the Company to keep its core customer account  processing systems on-line
for an extended period of time.

In addition,  the Savings  Bank has  developed a currency  availability  plan in
order to address the anticipated but unknown amount of additional  currency that
could be needed to fund cash  withdrawals  requested  by customers as the end of
1999 approaches. The need for additional currency poses significant risks to the
Company,  its employees,  and customers.  There can be no assurances  that these
risks  can be  entirely  mitigated  or that  the  Company  will  not  experience
significant adverse consequences resulting from the need to have available large
amounts of  currency  during the periods  immediately  preceding  and  following
January 1, 2000.




                                       17

<PAGE>

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 ending September 30, 1999.

                                       18
<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
               None

      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


                                       19

<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 12, 1999                John R. Stranford
           -----------------
                                            President and CEO
                                            (Principal Executive Officer)

                                            /s/Dennis R. Stewart
                                            ---------------------------------
Date:      November 12, 1999                Dennis R. Stewart
           -----------------
                                            Senior Vice President and
                                            Chief Financial Officer
                                            (Principal Financial & Accounting
                                            Officer)

                                       20