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                 March 31, 2001
                               -------------------------------------------------
                                       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 identification no.)
incorporation or organization)

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: April 27, 2001
                                                           --------------

                     Class                            Outstanding
      -------------------------------              ----------------
        $.10 par value common stock                2,714,812 shares


<PAGE>

                    TF FINANCIAL CORPORATION AND SUBSIDIARIES

                                    FORM 1O-Q

                      FOR THE QUARTER ENDED MARCH 31, 2001


                                      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  13

PART II- OTHER INFORMATION

Item     1.       Legal Proceedings                                           14
Item     2.       Changes in Securities and Use of Proceeds                   14
Item     3.       Defaults Upon Senior Securities                             14
Item     4.       Submission of Matters to a Vote of Security Holders         14
Item     5.       Other Information                                           14
Item     6.       Exhibits and Reports on Form 8-K                            14

SIGNATURES                                                                    15

<PAGE>

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

<TABLE>
<CAPTION>
                                                                                      Unaudited        Audited       Unaudited
                                                                                      March 31,     December 31,     March 31,
                                                                                         2001           2000            2000
                                                                                         ----           ----            ----
<S>                                                                                   <C>            <C>             <C>
                                   Assets
Cash and cash equivalents                                                               $51,013        $10,618         $16,661
Certificates of deposit in other financial institutions                                     191            191             547
Investment securities available for sale - at fair value                                 15,092         18,865          22,534
Investment securities held to maturity (fair value of $21,753, $61,919 and
    $59,514, respectively)                                                               21,459         63,461          61,798
Mortgage-backed securities available for sale - at fair value                            91,897         97,914         139,557
Mortgage-backed securities held to maturity (fair value of $128,843,
    $133,458, and $148,796, respectively)                                               128,079        135,142         154,345
Loans receivable, net                                                                   357,906        361,806         294,715
Federal Home Loan Bank stock - at cost                                                   13,042         13,042          13,042
Accrued interest receivable                                                               4,280          5,523           4,789
Goodwill and other intangible assets                                                      5,628          5,809           6,376
Premises and equipment, net                                                               9,224          9,410           9,260
Other assets                                                                              1,253          1,516           2,810
                                                                                       --------       --------        --------
                                Total assets                                           $699,064       $723,297        $726,434
                                                                                       ========       ========        ========

                    Liabilities and stockholders' equity
Liabilities
   Deposits                                                                            $402,969       $400,851        $408,597
   Advances from the Federal Home Loan Bank                                             232,359        244,859         223,359
   Other borrowings                                                                         ---         14,962          36,530
   Advances from borrowers for taxes and insurance                                        1,158          1,158           1,124
   Accrued interest payable                                                               5,271          4,670           5,081
   Other liabilities                                                                      3,193          3,688           3,292
                                                                                       --------       --------        --------
                              Total liabilities                                         644,950        670,188         677,983
                                                                                       --------       --------        --------

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; 2,453,393, 2,491,454, and 2,553,599 shares outstanding
       at March 31, 2001, December 31, 2000 and March 31, 2000, net of
       treasury shares of 2,575,188, 2,534,088, and 2,462,826, respectively.                529            529             529
   Retained earnings                                                                     52,469         51,604          49,154
   Additional paid-in capital                                                            52,185         52,161          52,098
   Unearned ESOP shares                                                                  (2,614)        (2,644)         (2,736)
   Shares acquired by MSBP                                                                  ---             (4)            (55)
   Treasury stock - at cost                                                             (48,874)       (48,173)        (47,143)
   Accumulated other comprehensive income (loss)                                            419           (364)         (3,396)
                                                                                       --------       --------        --------
                         Total stockholders' equity                                      54,114         53,109          48,451
                                                                                       --------       --------        --------
Total liabilities and stockholders' equity                                             $699,064       $723,297        $726,434
                                                                                       ========       ========        ========
</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
                                                                             Ended March 31,
                                                                            -----------------
                                                                            2001        2000
                                                                            ----        ----
<S>                                                                       <C>         <C>
Interest income
   Loans                                                                    $7,166      $5,556
   Mortgage-backed securities                                                3,780       4,870
   Investment securities                                                     1,239       1,531
   Interest bearing deposits and other                                         145          72
                                                                            ------      ------
       Total interest income                                                12,330      12,029
                                                                            ------      ------
Interest expense
   Deposits                                                                  3,591       3,576
   Advances from the Federal Home Loan Bank and other borrowings             3,500       3,603
                                                                            ------      ------
       Total interest expense                                                7,091       7,179
                                                                            ------      ------
       Net interest income                                                   5,239       4,850
Provision for loan losses                                                      125          44
                                                                            ------      ------
       Net interest income after provision for loan losses                   5,114       4,806
                                                                            ------      ------

Non-interest income
   Service fees, charges and other operating income                            450         374
   Loss on sale of loans and mortgage-backed securities available for          (15)        ---
                                                                            ------      ------
sale
       Total non-interest income                                               435         374
                                                                            ------      ------
Non-interest expense
   Compensation and benefits                                                 1,936       1,827
   Occupancy and equipment                                                     680         626
   Federal deposit insurance premium                                            21          22
   Professional fees                                                           193         187
   Amortization of goodwill and other intangible assets                        180         194
   Advertising                                                                 126         170
   Other operating                                                             710         598
                                                                            ------      ------
       Total non-interest expense                                            3,846       3,624
                                                                            ------      ------
       Income before income taxes                                            1,703       1,556
Income taxes                                                                   445         527
                                                                            ------      ------
       Net income                                                           $1,258      $1,029
                                                                            ======      ======

Basic earnings per share                                                     $0.51       $0.40
Diluted earnings per share                                                   $0.48       $0.39
Weighted average number of shares outstanding - basic                        2,482       2,569
Weighted average number of shares outstanding - diluted                      2,664       2,654


</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 three months ended
                                                                                                      March 31,
                                                                                                  2001         2000
                                                                                                  ----         ----
<S>                                                                                           <C>          <C>
Cash flows from operating activities
Net Income                                                                                      $ 1,258      $ 1,029
Adjustments to reconcile net income to net cash provided by operating activities:
                 Mortgage loan servicing rights                                                       3            3
                 Deferred loan origination fees                                                     (52)          (1)
                 Premiums and discounts on investment securities, net                                (8)           5
                 Premiums and discounts on mortgage-backed securities and loans, net               (113)          27
                 Amortization of goodwill and other intangible assets                               181          111
Provision for loan losses                                                                           125           44
Depreciation of premises and equipment                                                              206          248
Recognition of ESOP and MSBP expenses                                                                58           68
Loss on sale of loans and mortgage-backed securities available for sale                              15          ---
Gain on sale of real estate acquired through foreclosure                                            ---            3
(Increase) decrease in:
                 Accrued interest receivable                                                      1,243          169
                 Other assets                                                                       260       (1,469)
Increase (decrease) in:
                 Accrued interest payable                                                           601        1,332
                 Other liabilities                                                                 (955)         808
                                                                                                 ------      -------
                 Net cash provided by operating activities                                        2,822        2,377
                                                                                                 ------      -------

Cash flows  from investing activities
Loan origination and principal payments on loans, net                                             6,493         (953)
Purchases of loans                                                                               (3,792)      (5,855)
Proceeds from loan sales                                                                          1,227          ---
Maturities of certificates of deposit in other financial institutions, net                          ---          300
Purchases of investment securities available for sale                                               ---         (429)
Proceeds from sale of mortgage-backed securities available for sale                               4,309          ---
Purchases of mortgage-backed securities available for sale                                          ---       (9,843)
Purchase of mortgage-backed securities  held to maturity                                            ---         (353)
Proceeds from maturities of investment securities held to maturity                               45,014        4,895
Proceeds from maturities of investment securities available for sale                              1,000          ---
Principal repayments from mortgage-backed securities held to maturity                             7,071        5,865
Principal repayments from mortgage-backed securities available for sale                           2,709        2,493
Proceeds from sales of real estate acquired through foreclosure                                     ---          146
Purchase of premises and equipment                                                                  (20)        (331)
                                                                                                 ------      -------
                 Net cash used in investing activities                                           64,011       (4,065)
                                                                                                 ------      -------
</TABLE>

                 See notes to consolidated financial statements

                                       5
<PAGE>

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

<TABLE>
<CAPTION>
                                                                                             For the three months ended
                                                                                                      March 31,
                                                                                                      ---------
                                                                                                  2001         2000
                                                                                                  ----          ----
<S>                                                                                           <C>          <C>
Cash flows from financing activities
Net increase in deposits                                                                          2,118        6,899
Net decrease in advances from Federal Home Loan Bank                                            (12,500)     (25,174)
Net increase (decrease) in other borrowings                                                     (14,962)      20,764
Net decrease in advances from borrowers for taxes and insurance                                     ---          (74)
Exercise of stock options                                                                            21          437
Purchase of treasury stock, net                                                                    (730)        (879)
Common stock cash dividend                                                                         (385)        (339)
                                                                                                -------      -------
                 Net cash provided by financing activities                                      (26,438)       1,634
                                                                                                -------      -------

                 Net increase (decrease) in cash and cash equivalents                            40,395          (54)

Cash and cash equivalents at beginning of period                                                 10,618       16,715
                                                                                                -------      -------
Cash and cash equivalents at end of period                                                      $51,013      $16,661
                                                                                                =======      =======

Supplemental disclosure of cash flow information
Cash paid for
                 Interest on deposits and advances                                              $ 6,490      $ 5,947
                 Income taxes                                                                   $   610      $ 2,538
Non-cash transactions
                 Transfers from loans to real estate acquired through foreclosure               $   ---      $   ---

</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 March 31, 2001 (unaudited),
         December 31, 2000,  March 31, 2000  (unaudited) and for the three-month
         periods ended March 31, 2001 and 2000 (unaudited)  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
         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 period  ended  March 31,  2001 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, 2000.

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 (losses) on investment securities and mortgage-backed  securities
         available  for sale.  Total  comprehensive  income for the  three-month
         periods ended March 31, 2001 and 2000 was $2,041,000 and $718,000,  net
         of applicable income tax of $849,000 and $367,000, respectively.

NOTE 5- RECLASSIFICATIONS

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

                                       7
<PAGE>

                    TF FINANCIAL CORPORATION AND SUBSIDIARIES

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

GENERAL

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

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

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

Financial Condition

The  Company's  total  assets at March 31, 2001 and  December  31, 2000  totaled
$699.1 million and $723.2 million, respectively, a decrease of $24.1 million, or
3.4%,  during the  three-month  period.  The  decrease is mainly the result of a
$45.8 million decrease in investment  securities due to the maturity or exercise
of the call feature associated with these securities.  In addition,  there was a
$13.1 million decrease in mortgage-backed securities,  partly due to the sale of
$4.3  million of such  securities,  and a $3.9  million  net  decrease  in loans
receivable.  Offsetting  these decreases is a $40.4 million increase in cash and
cash equivalents.

Total  liabilities  decreased by $25.2 million  during the first three months of
2001 primarily as a result of the use of excess cash to repay maturing  advances
from the Federal Home Loan Bank and other borrowings.

                                       8
<PAGE>


Total  consolidated  stockholders'  equity of the Company  was $54.1  million or
7.74% of assets at March 31, 2001,  compared to $53.1 million or 7.34% of assets
at December  31, 2000,  and $48.5  million or 6.67% of assets at March 31, 2000.
During the first quarter of 2001, the net increase in retained  earnings,  which
is net income  less  dividends  paid,  plus the  increase in  accumulated  other
comprehensive  income,  was partially  offset by the net cost of treasury shares
purchased.  During January of 2000 management announced that the Company's board
of  directors  had  authorized  the  purchase  of up to  142,368  shares  of the
Company's  stock  in  the  open  market.  As  of  March  31,  2001,  there  were
approximately  45,000 shares  available for repurchase  under this plan, and the
Company will  continue to  repurchase  shares as share  availability  and market
conditions permit.

Asset Quality

Management  of the  Company  believes  that there has been no  material  adverse
change in the Company's asset quality during the three-month  period ended March
31, 2001.

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

<TABLE>
<CAPTION>
                                                         March 31,  December 31,  March 31,
                                                         ---------  ------------  ---------
                                                           2001        2000         2000
                                                           ----        ----         ----
<S>                                                     <C>         <C>          <C>
Non-performing loans                                     $1,302      $1,478       $2,183
Ratio of non-performing loans to gross loans               0.36%       0.41%        0.74%
Ratio of non-performing loans to total assets              0.19%       0.20%        0.30%
Foreclosed property                                        $176         $176         $321
Foreclosed property to total assets                        0.03%       0.02%        0.04%
Ratio of total non-performing assets to total assets       0.21%       0.23%        0.34%
</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):

                                                            2001          2000
                                                            ----          ----
Beginning balance, January 1,                            $ 1,714       $ 1,970
Provision                                                    125            44
Less: charge-off's (recoveries), net                          62           127
                                                         -------       -------
Ending balance, March 31,                                $ 1,777       $ 1,887
                                                         =======       =======

                                       9
<PAGE>

RESULTS OF OPERATIONS FOR THE THREE MONTHS ENDED MARCH 31, 2001 AND 2000

Net Income. The Company recorded net income of $1,258,000,  or $0.48 per diluted
share,  for the three months ended March 31, 2001 as compared to $1,029,000,  or
$0.39 per diluted share, for the three months ended March 31, 2000.

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 March,
                                                                           -------------------------
                                                                 2001                                    2000
                                                    --------------------------------        -------------------------------
                                                  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).......................    $362,020      $ 7,166         8.03%     $289,660      $ 5,556         7.71%
    Mortgage-backed securities.................     232,319        3,780         6.60%      292,754        4,870         6.69%
    Investment securities......................      83,824        1,239         5.99%      101,928        1,531         6.04%
    Other interest-earning assets(1)...........      10,687          145         5.50%        7,454           72         3.88%
                                                   --------      -------                   --------      -------
      Total interest-earning assets............     688,850       12,330         7.26%      691,796       12,029         6.99%
                                                                 -------                                 -------
Non interest-earning assets....................      28,503                                  27,622
                                                   --------                                --------
      Total assets.............................     717,353                                 719,418
                                                   ========                                ========
Liabilities and stockholders' equity:
  Interest-bearing liabilities
    Deposits...................................     404,512        3,591         3.60%      404,091        3,576         3.56%
    Advances from the FHLB and other
               borrowings......................     251,405        3,500         5.65%      259,676        3,603         5.58%
                                                   --------       ------                   --------       ------
      Total interest-bearing liabilities.......     655,917        7,091         4.39%      663,767        7,179         4.35%
                                                                  ------                                  ------
Non interest-bearing liabilities...............       7,859                                   7,840
                                                   --------                                --------
      Total liabilities........................     663,776                                 671,607
Stockholders' equity...........................      53,517                                  47,811
                                                   --------                                --------
   Total liabilities and stockholders' equity..    $717,353                                $719,418
                                                   ========                                ========
Net interest income............................                   $5,239                                  $4,850
                                                                  ======                                  ======
Interest rate spread (2).......................                                  2.87%                                   2.64%
Net yield on interest-earning assets (3).......                                  3.08%                                   2.82%
Ratio of average interest-earning assets to
average interest bearing liabilities...........                                   105%                                    104%

</TABLE>

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

                                       10
<PAGE>

     Rate/Volume Analysis

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

                                                        Three months ended
                                                             March 31,
                                                           2001 vs. 2000
                                                  -----------------------------
                                                         Increase (decrease)
                                                              due to
                                                  -----------------------------
                                                   Volume       Rate       Net
                                                  -----------------------------
Interest income:
     Loans receivable, net                        $ 1,381        229    $ 1,610
     Mortgage-backed securities                    (1,023)       (67)    (1,090)
     Investment securities                           (279)       (13)      (292)
     Other interest-earning assets                     37         36         73
                                                  -----------------------------
        Total interest-earning assets                 116        185        301
                                                  =============================
Interest expense:
     Deposits                                           1         14         15
     Advances from the FHLB and other borrowings     (334)       231       (103)
                                                  -----------------------------
        Total interest-bearing liabilities           (333)       245        (88)
                                                  =============================
Net change in net interest income                 $   449        (60)   $   389
                                                  =============================

Total Interest  Income.  Total interest income  increased by $301,000 or 2.5% to
$12.3  million for the three months ended March 31, 2001 compared with the first
quarter of 2000 primarily because of the increase in average loans  outstanding.
Although average  interest-earning assets were lower during the first quarter of
2001 compared to 2000, average loans receivable increased by 25.0% while average
mortgage-backed securities and investment securities decreased a combined 19.9%,
and the higher average yield earned on loans compared to securities produced the
increase in net interest income.

Total Interest Expense. Total interest expense decreased to $7.1 million for the
three-month period ended March 31, 2001 from $7.2 million for the same period in
2000  primarily  due to decreased  advances  from the Federal Home Loan Bank and
other   borrowings,   which   resulted   in  an  overall   decrease  in  average
interest-bearing liabilities.

Non-interest  income. Total non-interest income was $435,000 for the three-month
period ended March 31, 2001  compared with $374,000 for the same period in 2000.
The  increase is due to the  repricing of certain of the Savings  Bank's  retail
deposit  products and fees, and the  implementation  of new transaction  account
fees during the first  quarter of 2001.  In addition,  $33,000 of  non-recurring
loan prepayment fees were included in fee income for the first quarter of 2000.

Non-interest  expense.  Total non-interest expense increased by $222,000 to $3.8
million for the three months ended March 31, 2001 compared to the same period in
2000.  Compensation and benefits expenses increased by $109,000 during the first
quarter of 2001 compared to the year earlier period due normal wage increases, a
$42,000  increase in the use of temporary  help,  and a $14,000  increase in the
cost of employee group insurance expenses.

                                       11
<PAGE>

Occupancy  and  equipment  expenses  increased  by  $54,000  due  to  additional
utilities and  maintenance  expenses  associated with more severe weather during
the first quarter of 2001  compared to 2000.  Advertising  expense  decreased by
$44,000  due to the  reduced  usage of  newspaper  advertising  during the first
quarter of 2001, and the  non-recurring  costs of opening a new branch  incurred
during the first quarter of 2000. Other operating expenses increased by $112,000
mainly due to $60,000 of start-up costs  associated with the  implementation  of
in-house item  processing  and  statement  rendering  capabilities  for checking
accounts.  In  addition,  the timing of certain  annual  contributions  and dues
payments resulted in $17,000 additional expense during the first quarter of 2001
compared to 2000.

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<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  three-month period ended
March 31, 2001 in the ability of the Company and its  subsidiaries to fund their
operations.

The Savings  Bank is required  under  federal  regulations  to maintain  certain
specified  levels of "liquid  investments",  which include certain United States
government  obligations  and other  approved  investments.  Current  regulations
require the Savings  Bank to maintain  liquid  assets of not less than 4% of its
net withdrawable  accounts plus short term borrowings.  Short-term liquid assets
must consist of not less than 1% of such accounts and  borrowings,  which amount
is also  included  within the 4%  requirement.  These levels may be changed from
time to time by the  regulators  to reflect  current  economic  conditions.  The
Savings  Bank had  regulatory  liquidity  ratios of 18.6% and 18.9% at March 31,
2001 and 2000, respectively.

At March 31, 2001,  the Company had  commitments  outstanding  under  letters of
credit of $3.7 million,  commitments  to originate  loans of $9.0  million,  and
commitments  to fund  undisbursed  balances of closed  loans and unused lines of
credit of $33.0million.

Capital Requirements

The Savings Bank is in  compliance  with all of its capital  requirements  as of
March 31, 2001.



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 three months ended March 31, 2001.

                                       13
<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

         The Annual Meeting of  Stockholders  (the "Meeting") of the Company was
held on April 25,  2001.  There were  outstanding  and  entitled  to vote at the
Meeting  2,787,638 shares of Common Stock of the Company.  There were present at
the  meeting  or by proxy the  holders  of  2,486,357  shares  of  Common  Stock
representing  89.19% of the total eligible  votes to be cast.  Proposal 1 was to
elect two  directors of the Company.  Proposal 2 was a  non-binding  stockholder
recommendation  to remove certain  anti-takeover  provisions  from the Company's
Certificate  of  Incorporation  and  By-laws.  The  results of the voting at the
Meeting are as follows (percentages in terms of votes cast):

         Proposal 1
         George A. Olsen        FOR:     2,147,743      PERCENT FOR:      86.38%
         Thomas J. Gola         FOR:     2,154,504      PERCENT FOR:      86.65%

         Proposal 2             FOR:       604,387      PERCENT FOR:      27.90%
                                AGAINST: 1,528,961      PERCENT AGAINST:  70.59%
                                ABSTAIN:    32,706      PERCENT ABSTAIN:   1.51%


ITEM 5.        OTHER INFORMATION
               None

ITEM 6.        EXHIBITS AND REPORTS ON FORM 8-K
               (a)     Exhibits
                       None
               (b)     Reports on Form 8-K
                       None

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<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:      May 4, 2001                John R. Stranford
    -----------------------           President and CEO
                                      (Principal Executive Officer)


                                      /s/ Dennis R. Stewart
                                      ---------------------
Date:      May 4, 2001                Dennis R. Stewart
     ----------------------           Senior Vice President and
                                      Chief Financial Officer
                                      (Principal Financial & Accounting Officer)



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