SECURITIES AND EXCHANGE COMMISSION
                             WASHINGTON, D.C. 20549


                                    FORM l0-Q
(Mark One)

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

For the quarterly period ended           June 30, 2000
                               -------------------------------------------------
                                       OR

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

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

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

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



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

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

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

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


                      APPLICABLE ONLY TO CORPORATE ISSUERS:


     Indicate the number of shares  outstanding of each of the issuer's  classes
of common stock as of the latest practicable date: August 4, 2000
                                                   --------------

                Class                                         Outstanding
   ---------------------------                              ----------------
   $.10 par value common stock                              2,802,388 shares


<PAGE>



                    TF FINANCIAL CORPORATION AND SUBSIDIARIES

                                    FORM 1O-Q

                       FOR THE QUARTER ENDED JUNE 30, 2000


                                      INDEX



                                                                          Page
                                                                         Number
                                                                         ------

PART I - CONSOLIDATED FINANCIAL INFORMATION

Item  1.   Consolidated Financial Statements                                  3
Item  2.   Management's Discussion and Analysis of Financial

Condition and Results of Operations                                           8
Item  3.  Quantitative and Qualitative Disclosures about Market Risk         16

PART II- OTHER INFORMATION

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

SIGNATURES                                                                   18






                                       2
<PAGE>
                    TF FINANCIAL CORPORATION AND SUBSIDIARIES
                 CONSOLIDATED STATEMENTS OF FINANCIAL CONDITION
                                 (in thousands)

<TABLE>
<CAPTION>
                                                                               Unaudited      Audited     Unaudited
                                                                                June 30,    December 31,   June 30,
                                                                                  2000         1999          1999
                                                                                  ----         ----          ----
                                     Assets
<S>                                                                          <C>          <C>          <C>
Cash and cash equivalents                                                      $   8,980    $  16,715    $  16,467
Certificates of deposit in other financial institutions                              556          847        1,745
Investment securities available for sale - at fair value                          22,366       21,930       22,692
Investment securities held to maturity (fair value of $71,037, $64,538 and        73,111       66,760       80,731
  $81,126, respectively)
Mortgage-backed securities available for sale - at fair value                    138,908      132,515       95,273
Mortgage-backed securities held to maturity (fair value of $142,601,             148,145      159,888      179,670
  $154,188, and $176,574, respectively)
Loans receivable, net                                                            293,330      287,979      291,363
Federal Home Loan Bank stock - at cost                                            13,042       13,042       12,668
Accrued interest receivable                                                        4,880        4,958        5,114
Real estate held for investment                                                      ---          ---        2,348
Goodwill and other intangible assets                                               6,183        6,570        6,972
Premises and equipment, net                                                        9,326        9,177        8,765

Other assets                                                                       2,694        1,493        1,359
                                                                               ---------    ---------    ---------
                      Total assets                                             $ 721,521    $ 721,874    $ 725,167
                                                                               =========    =========    =========

               Liabilities and stockholders' equity
Liabilities
  Deposits                                                                     $ 419,611    $ 401,698    $ 416,925
  Advances from the Federal Home Loan Bank                                       208,359      248,533      248,359
  Other borrowings                                                                34,228       15,766          ---
  Advances from borrowers for taxes and insurance                                  1,441        1,198        1,304
  Accrued interest payable                                                         4,759        3,749        4,275
  Other liabilities                                                                3,846        2,483        3,088
                                                                               ---------    ---------    ---------
                       Total liabilities                                         672,244      673,427      673,951
                                                                               ---------    ---------    ---------

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; 2,531,852, 2,576,160, and 2,763,318 shares outstanding
    at June 30, 2000, December 31, 1999 and June 30, 1999, net of
    treasury shares of 2,487,612, 2,437,226, and 2,243,990, respectively             529          529          529
  Retained earnings                                                               49,880       48,760       47,052
  Additional paid-in capital                                                      52,118       52,076       52,026
  Unearned ESOP shares                                                            (2,705)      (2,766)      (2,827)
  Shares acquired by MSBP                                                            (38)         (71)        (255)
  Treasury stock - at cost                                                       (47,489)     (46,996)     (44,212)
  Accumulated other comprehensive income (loss)                                   (3,018)      (3,085)      (1,097)
                                                                               ---------    ---------    ---------
                       Total stockholders' equity                                 49,277       48,447       51,216
                                                                               ---------    ---------    ---------

Total liabilities and stockholders' equity                                     $ 721,521    $ 721,874    $ 725,167
                                                                               =========    =========    =========
</TABLE>

                 See notes to consolidated financial statements

                                       3
<PAGE>




                    TF FINANCIAL CORPORATION AND SUBSIDIARIES
                  UNAUDITED CONSOLIDATED STATEMENTS OF EARNINGS
                      (in thousands, except per share data)

<TABLE>
<CAPTION>
                                                                   For the three months  For the six months
                                                                      ended June 30,       ended June 30,
                                                                      --------------       --------------
                                                                     2000       1999       2000      1999
                                                                     ----       ----       ----      ----

<S>                                                              <C>       <C>         <C>       <C>
Interest income
   Loans                                                           $ 5,851   $ 5,707     $11,407   $10,796
   Mortgage-backed securities                                        4,841     4,199       9,711     8,296
   Investment securities                                             1,541     1,817       3,072     3,398
   Interest bearing deposits and other                                  93       221         165       547
                                                                   -------   -------     -------   -------
       Total interest income                                        12,326    11,944      24,355    23,037
                                                                   -------   -------     -------   -------
Interest expense
   Deposits                                                          3,812     3,707       7,388     7,564
   Advances from the Federal Home Loan Bank and other borrowings     3,540     3,438       7,143     6,213
                                                                   -------   -------     -------   -------
       Total interest expense                                        7,352     7,145      14,531    13,777
                                                                   -------   -------     -------   -------
       Net interest income                                           4,974     4,799       9,824     9,260
Provision for loan losses                                              120        60         164        90
                                                                   -------   -------     -------   -------
       Net interest income after provision for loan losses           4,854     4,739       9,660     9,170
                                                                   -------   -------     -------   -------

Non-interest income
   Service fees, charges and other operating income                    376       307         750       625
                                                                   -------   -------     -------   -------
       Total non-interest income                                       376       307         750       625
                                                                   -------   -------     -------   -------
Non-interest expense
   Compensation and benefits                                         1,969     1,692       3,796     3,332
   Occupancy and equipment                                             619       511       1,245     1,005
   Federal deposit insurance premium                                    21        65          43       133
   Professional fees                                                   100       184         287       349
   Amortization of goodwill and other intangible assets                195       209         389       418
   Advertising                                                         168        91         338       181
   Other operating                                                     645       692       1,243     1,240
                                                                   -------   -------     -------   -------
       Total non-interest expense                                    3,717     3,444       7,341     6,658
                                                                   -------   -------     -------   -------
       Income before income taxes                                    1,513     1,602       3,069     3,137
Income taxes                                                           456       577         983     1,128
                                                                   -------   -------     -------   -------
       Net income                                                  $ 1,057   $ 1,025     $ 2,086   $ 2,009
                                                                   =======   =======     =======   =======

Basic earnings per share                                             $0.42     $0.37       $0.82     $0.72
Diluted earnings per share                                           $0.40     $0.35       $0.79     $0.67
Weighted average number of shares outstanding - basic                2,539     2,759       2,554     2,790
Weighted average number of shares outstanding - diluted              2,554     2,967       2,632     2,981

</TABLE>
                 See notes to consolidated financial statements

                                       4
<PAGE>




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

                                                                                      For the six months ended
                                                                                              June 30,
                                                                                         2000          1999

                                                                                         ----          ----
<S>                                                                                 <C>          <C>
Cash flows from operating activities
Net Income                                                                            $ 2,086      $ 2,009
Adjustments to reconcile net income to net cash provided by operating activities:
           Mortgage loan servicing rights                                                   7            7
           Deferred loan origination fees                                                 (29)         (39)
           Premiums and discounts on investment securities, net                           (44)          16
           Premiums and discounts on mortgage-backed securities and loans, net             (7)         379
           Amortization of goodwill and other intangible assets                           387          417
Provision for loan losses                                                                 208           90
Depreciation of premises and equipment                                                    505          456
Recognition of ESOP and MSBP expenses                                                     136          342
Gain on sale of real estate acquired through foreclosure                                    4            4
(Increase) decrease in:
           Accrued interest receivable                                                     78         (556)
           Other assets                                                                (1,566)        (270)
Increase (decrease) in:
           Accrued interest payable                                                     1,010          109
           Other liabilities                                                            1,362       (2,218)
                                                                                      -------      -------
           Net cash provided by operating activities                                    4,137          746
                                                                                      -------      -------

Cash flows from investing activities
Loan origination and principal payments on loans, net                                   1,041       25,893
Purchases of loans                                                                     (6,595)     (76,553)
Proceeds from loan sales                                                                  ---          ---
Maturities of certificates of deposit in other financial institutions, net                291          493
Purchases of investment securities available for sale                                    (429)     (18,059)
Purchases of investment securities  held to maturity                                  (11,316)    (144,494)
Purchases of mortgage-backed securities  available for sale                           (11,079)     (34,541)
Purchase of mortgage-backed securities  held to maturity                                  ---      (35,412)
Proceeds from maturities of investment securities held to maturity                      5,000     (147,447)
Proceeds from maturities of investment securities available for sale                      ---        2,000
Principal repayments from mortgage-backed securities held to maturity                  11,675       36,542
Principal repayments from mortgage-backed securities available for sale                 4,853       12,779
Purchases and redemption of Federal Home Loan Bank Stock, net                             ---       (3,500)
Proceeds from sales of real estate acquired through foreclosure                           354           61
Purchase of premises and equipment                                                       (654)        (204)
                                                                                      -------      -------
           Net cash used in investing activities                                       (6,859)     (87,548)
                                                                                      -------      -------

</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 six months ended
                                                                                   June 30,
                                                                              2000          1999
                                                                              ----          ----
<S>                                                                        <C>        <C>
Cash flows from financing activities
Net increase (decrease ) in deposits                                          17,913     (21,988)
Net increase (decrease) in advances from Federal Home Loan Bank              (40,174)     85,000
Net increase in other borrowings                                              18,462         ---
Net decrease in advances from borrowers for taxes and insurance                  243         100
Exercise of stock options                                                        437          97
Purchase of treasury stock, net                                               (1,226)     (1,970)
Common stock cash dividend                                                      (668)       (673)
                                                                            --------    --------
         Net cash provided by financing activities                            (5,013)     60,566
                                                                            --------    --------

         Net decrease in cash and cash equivalents                            (7,735)    (26,236)

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

Cash and cash equivalents at end of period                                  $  8,980    $ 16,467
                                                                            ========    ========

Supplemental disclosure of cash flow information
Cash paid for
         Interest on deposits and advances                                  $ 13,521    $ 13,669
         Income taxes                                                       $    850    $    911
Non-cash transactions
         Transfers from loans to real estate acquired through foreclosure   $     28        $---

</TABLE>
                 See notes to consolidated financial statements


                                       6
<PAGE>

                    TF FINANCIAL CORPORATION AND SUBSIDIARIES
              NOTES TO UNAUDITED CONSOLIDATED FINANCIAL STATEMENTS


NOTE 1 - PRINCIPLES OF CONSOLIDATION

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

NOTE 2 - BASIS OF PRESENTATION

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

NOTE 3 - CONTINGENCIES

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

NOTE 4 - OTHER COMPREHENSIVE INCOME

     The  Company's  other  accumulated  comprehensive  income  consists  of net
     unrealized  gains  (losses) on investment  securities  and  mortgage-backed
     securities   available  for  sale.  Total  comprehensive   income  for  the
     three-month  periods  ended  June 30,  2000 and  1999  was  $1,436,000  and
     $43,000,  net of applicable income tax (benefit) of $651,000 and ($51,000),
     respectively.

     Total  comprehensive  income for the six-month  periods ended June 30, 2000
     and 1999 was  $2,154,000  and  $758,000,  net of  applicable  income tax of
     $1,018,000 and $329,000, 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 June 30, 2000 and December 31, 1999 totaled $721.5
million and $721.9 million, respectively.  Loans receivable grew by $5.3 million
while cash and cash equivalents decreased by $7.7 million. The Company's present
objectives  include  growth in the loan  portfolio  through both  originated and
purchased  loans,  and a  corresponding  decrease in  lower-yielding  investment
securities and mortgage-backed  securities.  Total assets are expected to remain
at  approximately  their present levels in the immediate future and the expected
growth  in the  Company's  net  interest  income  is  expected  to  come  from a
combination of loan growth funded by lower cost retail deposit growth.

Total liabilities decreased by $1.2 million during the first six months of 2000.
Deposits  increased by $17.9 while  advances from the Federal Home Loan Bank and
other borrowings decreased by a combined $21.7 million. The decrease in advances
from the Federal Home Loan Bank  occurred in part due to the  conversion  of $35
million of fixed rate advances that were convertible  into LIBOR-based  floating
rate at the option of the Federal  Home Loan Bank.  Subsequent  to  conversion a
portion  of these  advances  were  replaced  with  lower  cost  funds from other
sources.

                                       8
<PAGE>





Total consolidated stockholders' equity of the Company was $49.3 million at June
30, 2000, an increase of $830,000  from December 31, 1999.  During the first six
months of 2000, the net increase in retained earnings,  which is net income less
dividends  paid,  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  additional  shares of
the Company's stock in the open market during the subsequent  twelve months.  As
of  June  30,  2000  there  were  approximately  112,600  shares  available  for
repurchase under this repurchase program.

Asset Quality

Management  of the  Company  believes  that there has been no  material  adverse
change in the Company's asset quality during the six-month period ended June 30,
2000. Non-performing loans include $305,000 in student loans that are guaranteed
by the United States  Department of Education,  through the Pennsylvania  Higher
Education  Assistance  Association,  unless the Savings Bank is notified that it
has failed to perform all the necessary procedures to preserve the guarantee. In
such a  situation,  the  Savings  Bank  would  attempt  to  have  the  guarantee
reinstated; if unsuccessful, these loans become unsecured loans that the Savings
Bank will attempt to collect or charge-off.

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

<TABLE>
<CAPTION>
                                                              June 30,    December 31,    June 30,
                                                              --------    ------------    --------
                                                                2000          1999          1999
                                                                ----          ----          ----
<S>                                                          <C>           <C>           <C>
  Non-performing loans                                         $1,322        $1,356        $2,199
  Ratio of non-performing loans to gross loans                  0.45%         0.47%         0.66%
  Ratio of non-performing loans to total assets                 0.18%         0.19%         0.30%
  Foreclosed property                                            $188          $546          $243
  Foreclosed property to total assets                           0.03%         0.08%         0.03%
  Ratio of total non-performing assets to total assets          0.21%         0.26%         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):

                                                           2000           1999
                                                           ----           ----
          Beginning balance, January 1,                  $1,970         $1,909
          Provision                                         164             90
          Less: charge-off's (recoveries), net              232             83
                                                      ---------      ---------

          Ending balance, June 30,                       $1,902         $1,916
                                                         ======         ======




                                       9
<PAGE>



RESULTS OF OPERATIONS FOR THE THREE MONTHS ENDED JUNE 30, 2000 AND 1999

Net Income. The Company recorded net income of $1,057,000,  or $0.40 per diluted
share,  for the three months ended June 30, 2000 as compared to  $1,025,000,  or
$0.35 per diluted share, for the three months ended June 30, 1999.

Average Balance Sheet

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

<TABLE>
<CAPTION>
                                                                        Three months ended June 30,
                                                                          Three Months Ended March,
                                                               2000                               1999
                                                --------------------------------    ---------------------------------
                                                Average                 Average     Average                  Average
                                                Balance     Interest    Yld/Cost    Balance     Interest     Yld/Cost
                                                -------     --------    --------    -------     --------     --------
                                                                        (dollars in thousands)
<S>                                           <C>         <C>            <C>     <C>        <C>             <C>
Assets:
  Interest-earning assets:
    Loans receivable (4) ....................   $294,372    $  5,851       7.99%   $300,809   $  5,707         7.59%
    Mortgage-backed securities ..............    290,922       4,841       6.69%    264,431      4,199         6.35%
    Investment securities ...................     99,385       1,541       6.24%    116,534      1,817         6.24%
    Other interest-earning assets(1) ........     11,072          93       3.38%     21,783        221         4.06%
                                                 -------    --------               --------     ------
      Total interest-earning assets .........    695,751      12,326       7.13%    703,557     11,944         6.79%
                                                            --------                            ------
Non interest-earning assets .................     25,352                             34,760
                                                --------                            -------
      Total assets ..........................    721,103                            738,317
                                                ========                            =======

Liabilities and stockholders' equity:
  Interest-bearing liabilities
    Deposits ................................    414,940       3,812       3.69%    423,038      3,707         3.51%
    Advances from the FHLB and other
               Borrowings ...................    248,437       3,540       5.73%    250,027      3,438         5.50%
                                                --------   ---------                -------      -----
      Total interest-bearing liabilities ....    663,377       7,352       4.46%    673,065      7,145         4.25%
                                                           ---------                             -----
Non interest-bearing liabilities ............      9,805                             13,725
                                                --------                            -------
      Total liabilities .....................    673,182                            686,790
Stockholders' equity ........................     47,921                             51,527
                                                --------                            -------
   Total liabilities and stockholders' equity   $721,103                           $738,317
                                                ========                           ========
Net interest income .........................               $  4,974                            $4,799
                                                            ========                            ======
Interest rate spread (2) ....................                              2.67%                               2.54%
Net yield on interest-earning assets (3) ....                              2.88%                               2.73%
Ratio of average interest-earning assets to
average interest bearing liabilities ........                               105%                                105%
</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
                                                                                         June 30,
                                                                                       2000 vs. 1999
                                                                   ------------------------------------------------------
                                                                                    Increase (decrease)
                                                                                          due to
                                                                   ------------------------------------------------------
                                                                                Volume              Rate            Net
                                                                   ------------------------------------------------------
<S>                                                                            <C>                 <C>             <C>
     Interest income:
          Loans receivable, net                                                  $(653)             $797            $144
          Mortgage-backed securities                                               418               224             642
          Investment securities                                                   (276)                0            (276)
          Other interest-earning assets                                            (95)              (33)            (128)
                                                                   ------------------------------------------------------
             Total interest-earning assets                                        (606)              988             382
                                                                   ======================================================

     Interest expense:
          Deposits                                                                (385)              490             105
          Advances from the FHLB and other borrowings                             (138)              240             102
                                                                   ------------------------------------------------------
             Total interest-bearing liabilities                                   (523)              730             207
                                                                   ======================================================

     Net change in net interest income                                            $(83)             $258            $175
                                                                   ======================================================
</TABLE>

Total Interest  Income.  Total interest income  increased by $382,000 or 3.2% to
$12.3  million for the three months ended June 30, 2000 compared with the second
quarter  of  1999  primarily  because  of an  increase  in  interest  income  on
mortgage-backed securities. This increase has occurred because during the second
quarter  of  1999  the  Company  increased  its  purchases  of  higher  yielding
mortgage-backed   securities   and  reduced  its  purchases  of  lower  yielding
investment  securities.  In addition,  the rise in certain market interest rates
since June 30, 1999 has resulted in both higher  interest rates on the Company's
new loans and higher  interest rates on the Company's  adjustable rate portfolio
loans.

Total Interest Expense. Total interest expense increased to $7.4 million for the
three-month  period ended June 30, 2000 from $7.1 million for the same period in
1999 primarily because of higher market interest rates.

Non-interest  income. Total non-interest income was $376,000 for the three-month
period ended June 30, 2000  compared  with $307,000 for the same period in 1999.
The increase is primarily due to an increase the number of  commercial  loan and
demand deposit  accounts and the related  increase in late charges  collected on
commercial  loans and increase in  overdraft  fees  collected on demand  deposit
accounts.

Non-interest  expense.  Total non-interest expense increased by $273,000 to $3.7
million for the three months ended June 30, 2000  compared to the same period in
1999. Compensation and benefits expenses increased by $277,000 during the second
quarter of 2000  compared  to the year  earlier  period due in large part to the
increase in full time  equivalent  employees from 150 at June 30, 1999 to 174 at
June 30, 2000.  These  additional  employees  were related to the two additional
branch  offices  open during the second  quarter of 2000  compared to the second
quarter of 1999, and additional  staff in the lending and servicing areas of the
Company.

                                       11
<PAGE>

In  addition,  these  additional  branch  offices  are  largely the cause of the
increases in  occupancy  and  equipment  expenses.  The increase in  advertising
expense  is the  result  of a  planned  increase  in the  Company's  advertising
expenses in order to attract new retail  banking  customers.  Professional  fees
have  decreased from higher than normal levels during the second quarter of 1999
because of the "Year 2000" costs that were incurred during the second quarter of
1999.

Income  taxes.  The  Company's  effective  tax rate was 30.1%  during the second
quarter of 2000  compared  with 36.0%  during  the second  quarter of 1999.  The
decrease is  attributable  to investment  strategies that are expected to reduce
the Company's income taxes.

                                       12
<PAGE>

RESULTS OF OPERATIONS FOR THE SIX MONTHS ENDED JUNE 30, 2000 AND 1999

Net Income. The Company recorded net income of $2,086,000,  or $0.79 per diluted
share,  for the six months  ended June 30, 2000 as compared  to  $2,009,000,  or
$0.67 per diluted share, for the six months ended June 30, 1999.

Average Balance Sheet

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

<TABLE>
<CAPTION>

                                                                           Six months ended June 30,
                                                                           Three Months Ended March,
                                                                 2000                                   1999
                                                    --------------------------------        -------------------------------
                                                  Average                   Average       Average                   Average
                                                  Balance     Interest      Yld/Cost      Balance     Interest      Yld/Cost
                                                  -------     --------      --------      -------     --------      --------
                                                                            (dollars in thousands)
<S>                                               <C>           <C>             <C>       <C>           <C>             <C>
Assets:
  Interest-earning assets:
    Loans receivable (4).......................    $292,016      $11,407         7.86%     $282,033      $10,796         7.66%
    Mortgage-backed securities.................     291,838        9,711         6.69%      263,025        8,296         6.31%
    Investment securities......................     100,656        3,072         6.14%      110,459        3,398         6.15%
    Other interest-earning assets(1)...........       9,263          165         3.58%       25,416          547         4.30%
                                                   --------      -------                   --------      -------
      Total interest-earning assets............     693,773       24,355         7.06%      680,933       23,037         6.77%
                                                                 -------                                 -------
Non interest-earning assets....................      26,487                                  33,682
                                                   --------                                --------
      Total assets.............................     720,260                                 714,615
                                                   ========                                ========

Liabilities and stockholders' equity:
  Interest-bearing liabilities
    Deposits...................................     409,516        7,388         3.63%      427,373        7,564         3.54%
    Advances from the FHLB and other
               borrowings......................     254,057        7,143         5.58%      224,630        6,213         5.53%
                                                   --------      -------                   --------      -------
      Total interest-bearing liabilities.......     663,573       14,531         4.23%      652,003       13,777         4.23%
                                                                 -------                                 -------
Non interest-bearing liabilities...............       8,821                                  10,742
                                                   --------                                --------
      Total liabilities..........................   672,394                                 662,745
Stockholders' equity...........................      47,866                                  51,870
                                                   --------                                --------
   Total liabilities and stockholders' equity....  $720,260                                $714,615
                                                   ========                                ========
Net interest income............................                   $9,824                                  $9,260
                                                                  ======                                  ======
Interest rate spread (2).......................                                  2.54%                                   2.54%
Net yield on interest-earning assets (3).......                                  2.72%                                   2.72%
Ratio of average interest-earning assets to
average interest bearing liabilities...........                                   105%                                    104%

</TABLE>

(5)  Includes interest-bearing deposits in other banks.
(6)  Interest-rate spread represents the difference between the average yield on
     interest-earning   assets  and  the   average   cost  of   interest-bearing
     liabilities.
(7)  Net yield on  interest-earning  assets  represents net interest income as a
     percentage of average interest-earning assets.
(8)  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>
                                                                               Six months ended
                                                                                  June 30,
                                                                                2000 vs. 1999
                                                                   -------------------------------------------
                                                                              Increase (decrease)
                                                                                   due to
                                                                   -------------------------------------------
                                                                     Volume              Rate            Net
                                                                   -------------------------------------------
<S>                                                                 <C>               <C>             <C>
     Interest income:
          Loans receivable, net                                        $352              $259            $611
          Mortgage-backed securities                                    913               502           1,415
          Investment securities                                        (320)               (6)           (326)
          Other interest-earning assets                                (302)              (80)           (382)
                                                                   -------------------------------------------
             Total interest-earning assets                              643               675           1,318
                                                                   ===========================================

     Interest expense:
          Deposits                                                     (588)              412            (176)
          Advances from the FHLB and other borrowings                   798               132             930
                                                                   -------------------------------------------
             Total interest-bearing liabilities                         210               544             754
                                                                   ===========================================

     Net change in net interest income                                 $433              $131            $564
                                                                   ===========================================
</TABLE>

Total Interest Income.  Total interest income increased by $1,318,000 or 5.7% to
$24.4  million  for the six months  ended June 30,  2000  compared  with the six
months  ended  June 30,  1999.  The  increase  in the  interest  earned on loans
receivable  occurred mainly because the Company purchased $76.6 million in loans
receivable late in the first quarter of 1999 at yields that were higher than the
current portfolio yields.

The increase in interest earned on mortgage-backed securities also occurred as a
result of the Company's purchases of such securities,  throughout the last three
quarters of 1999,  with yields  higher than the  existing  portfolio  because of
higher market interest  rates.  In addition,  the Company shifted its securities
mix away from lower  yielding  investment  securities  and into higher  yielding
mortgage-backed securities.

Total Interest  Expense.  Total interest expense  increased to $14.5 million for
the six-month  period ended June 30, 2000 from $13.8 million for the same period
in 1999 primarily due to increased  advances from the Federal Home Loan Bank and
other borrowings which were used to fund asset growth and deposit outflows.  The
average  rate  paid on  Federal  Home Loan Bank  advances  and other  borrowings
increased due to the effect of higher market interest rates on new borrowings.

Interest  expense  on  deposits  decreased  during  the first six months of 2000
compared to the first six months of 1999 because the average balance of deposits
decreased  $17.9 million or 4.2%,  from $430.0  million to $404.1  million.  The
decrease in the average balance of deposits resulted from rate sensitive deposit
outflows  associated  with  management's  efforts  to  price  deposits  at lower
interest  rates during the first six months of 1999.  Nevertheless,  the average
rate paid on deposits has increased  steadily since mid-1999 due to increases in
market interest rates.


                                       14
<PAGE>

Non-interest  income.  Total non-interest  income was $750,000 for the six-month
period ended June 30, 2000  compared  with $625,000 for the same period in 1999.
The increase is primarily due to an increase the number of  commercial  loan and
demand deposit  accounts and the related  increase in late charges  collected on
commercial  loans and increase in  overdraft  fees  collected on demand  deposit
accounts.  The increase is also due to $33,000 of non-recurring  loan prepayment
fees received during the first quarter of 2000.

Non-interest  expense.  Total non-interest expense increased by $683,000 to $7.3
million for the six months  ended June 30,  2000  compared to the same period in
1999.  Compensation and benefits expenses increased by $464,000 during the first
half of 2000  compared  to the year  earlier  period  due in  large  part to the
increase in full time  equivalent  employees from 150 at June 30, 1999 to 174 at
June 30, 2000.  These  additional  employees  were related to the two additional
branch  offices open during the first half of 2000 compared to the first half of
1999, and additional staff in the lending and servicing areas of the Company.

In  addition,  these  additional  branch  offices  are  largely the cause of the
increases in  occupancy  and  equipment  expenses.  The increase in  advertising
expense  is the  result  of a  planned  increase  in the  Company's  advertising
expenses in order to attract new retail  banking  customers.  Professional  fees
have  decreased  from higher than  normal  levels  during the first half of 1999
because of the "Year  2000"  costs that were  incurred  during the first half of
1999.

Income taxes.  The Company's  effective tax rate was 32.0% during the first half
of 2000  compared  with 36.0%  during the first half of 1999.  The  decrease  is
attributable to investment  strategies that are expected to reduce the Company's
income taxes.

                                       15
<PAGE>


LIQUIDITY AND CAPITAL RESOURCES

Liquidity

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

The Savings  Bank is required  under  federal  regulations  to maintain  certain
specified  levels of "liquid  investments",  which include certain United States
government  obligations  and other  approved  investments.  Current  regulations
require the Savings  Bank to maintain  liquid  assets of not less than 4% of its
net withdrawable  accounts plus short term borrowings.  Short-term liquid assets
must consist of not less than 1% of such accounts and  borrowings,  which amount
is also  included  within the 4%  requirement.  These levels may be changed from
time to time by the  regulators  to reflect  current  economic  conditions.  The
Savings Bank had regulatory liquidity ratios of 19.9% and 22.6% at June 30, 2000
and 1999, respectively.

At June 30,  2000,  the Company had  commitments  outstanding  under  letters of
credit of $3.7 million,  commitments to originate  loans of $15.0  million,  and
commitments  to fund  undisbursed  balances of closed  loans and unused lines of
credit of $28.3 million.

Capital Requirements

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


YEAR 2000

Risk Assessment

There has been no information  that has come to the Company's  attention  during
the  six-months  ended June 30,  2000 to  indicate  that  there are any  adverse
consequences  that might  affect the Company in the future  related to the "Year
2000" problem.


QUANTITATIVE AND QUALITATIVE DISCLOSURES ABOUT MARKET RISK

Asset and Liability Management

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

                                       16
<PAGE>




                    TF FINANCIAL CORPORATION AND SUBSIDIARIES

                                     PART II

 ITEM 1.     LEGAL PROCEEDINGS
             Not applicable.

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

 ITEM 3.     DEFAULTS UPON SENIOR SECURITIES
             Not applicable.

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

 ITEM 5.     OTHER INFORMATION
             None

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


                                       17
<PAGE>


                                   SIGNATURES

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


                                   TF FINANCIAL CORPORATION




                                    /s/ John R. Stranford
                                    ---------------------
Date:      August 10, 2000          John R. Stranford
    -----------------------         President and CEO
                                    (Principal Executive Officer)


                                    /s/ Dennis R. Stewart
                                    ---------------------
Date:      August 10, 2000          Dennis R. Stewart
     ----------------------         Senior Vice President and
                                    Chief Financial Officer
                                    (Principal Financial & Accounting Officer)


                                       18