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, 2004
                                ------------------------------------------------
                                       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 000-24168
                                               ---------

                            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
    ---         ---

         Indicate by check mark whether the registrant is an  accelerated  filer
as defined in Exchange Act Rule 12b-2.      Yes         No  X
                                                ---        ---

         Indicate  the  number of  shares  outstanding  of each of the  issuer's
classes of common stock as of the latest practicable date: May 6, 2004
                                                           -----------

           Class                                Outstanding
  ---------------------------                ----------------
  $.10 par value common stock                2,885,502 shares

<PAGE>

                    TF FINANCIAL CORPORATION AND SUBSIDIARIES

                                    FORM 1O-Q

                      FOR THE QUARTER ENDED MARCH 31, 2004


                                      INDEX


                                                                            Page
                                                                          Number
                                                                          ------

PART I - CONSOLIDATED FINANCIAL INFORMATION

        Item 1. Consolidated Financial Statements                              3
        Item 2. Management's  Discussion and Analysis of
                Financial  Position and Results of Operations                 11
        Item 3. Quantitative and Qualitative Disclosures about Market Risk    16
        Item 4. Controls and Procedures                                       16

PART II - OTHER INFORMATION

        Item 1. Legal Proceedings                                             18
        Item 2. Changes in Securities, Use of Proceeds, and
                Issuer Repurchases of Equity Securities                       18
        Item 3. Defaults Upon Senior Securities                               18
        Item 4. Submission of Matters to a Vote of Security Holders
        Item 5. Other Information                                             19
        Item 6. Exhibits and Reports on Form 8-K                              19


SIGNATURES                                                                    20

EXHIBITS

         31. Certifications pursuant to Section 302 of the
               Sarbanes-Oxley Act of 2002                                     21

         32. Certification pursuant to Section 906 of the
             Sarbanes-Oxley Act of 2002                                       23

                                       2

<PAGE>

                    TF FINANCIAL CORPORATION AND SUBSIDIARIES
                  CONSOLIDATED STATEMENTS OF FINANCIAL POSITION
                                 (in thousands)
<TABLE>
<CAPTION>
                                                                                      Unaudited       Audited
                                                                                      March 31,     December 31,
                                                                                        2004           2003
                                                                                        ----           ----
<S>                                                                                  <C>            <C>
                                   Assets
Cash and cash equivalents                                                              $  6,717       $  8,241
Certificates of deposit in other financial institutions                                      38            155
Investment securities available for sale - at fair value                                 14,479         14,433
Investment securities held to maturity (fair value of $8,829 and $10,815,                 8,370         10,389
    respectively)
Mortgage-backed securities available for sale - at fair value                           106,647        106,774
Mortgage-backed securities held to maturity (fair value of $22,192 and                   21,112         23,630
    $24,774, respectively)
Loans receivable, net                                                                   418,994        404,649
Federal Home Loan Bank stock - at cost                                                    6,259          6,825
Accrued interest receivable                                                               2,430          2,671
Core deposit intangible, net of accumulated amortization of $2,496
   and $2,456, respectively                                                                 328            368
Goodwill                                                                                  4,324          4,324
Premises and equipment, net                                                               6,230          6,268
Other assets                                                                             17,284         18,025
                                                                                       --------       --------
                                Total assets                                           $613,212       $606,752
                                                                                       ========       ========
                    Liabilities and stockholders' equity
Liabilities
   Deposits                                                                            $470,918       $459,343
   Advances from the Federal Home Loan Bank                                              78,909         86,853
   Advances from borrowers for taxes and insurance                                        1,797          1,738
   Accrued interest payable                                                               2,305          1,908
   Other liabilities                                                                      1,616          1,430
                                                                                       --------       --------
                              Total liabilities                                         555,545        551,272
                                                                                       --------       --------

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; 2,670,327 and 2,596,037 shares outstanding
     at March 31, 2004 and December 31, 2003, net of
     treasury shares of 2,404,498 and 2,474,366, respectively.                              529            529
   Retained earnings                                                                     53,841         52,626
   Additional paid-in capital                                                            51,275         51,982
   Unearned ESOP shares                                                                  (2,151)        (2,196)
   Treasury stock - at cost                                                             (46,208)       (47,043)
   Accumulated other comprehensive income                                                   381           (418)
                                                                                       --------       --------
                         Total stockholders' equity                                      57,667         55,480
                                                                                       --------       --------

Total liabilities and stockholders' equity                                             $613,212       $606,752
                                                                                       ========       ========
</TABLE>
                 See notes to consolidated financial statements

                                       3

<PAGE>

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

<TABLE>
<CAPTION>
                                                                            For Three Months
                                                                            Ended March 31,
                                                                            ---------------
                                                                             2004        2003
                                                                             ----        ----
<S>                                                                       <C>          <C>
Interest income
   Loans                                                                    $5,990       $6,051
   Mortgage-backed securities                                                1,457        1,852
   Investment securities                                                       280          508
   Interest bearing deposits and other                                           3          246
                                                                            ------       ------
       Total interest income                                                 7,730        8,657
                                                                            ------       ------
Interest expense
   Deposits                                                                  1,506        2,044
   Advances from the Federal Home Loan Bank and other borrowings               646        2,778
                                                                            ------       ------
       Total interest expense                                                2,152        4,822
                                                                            ------       ------
       Net interest income                                                   5,578        3,835
Provision for loan losses                                                      150           90
                                                                            ------       ------
       Net interest income after provision for loan losses                   5,428        3,745
                                                                            ------       ------

Non-interest income
   Service fees, charges and other operating income                            576          444
   Bank-owned life insurance                                                   133          134
   Gain (loss) on sale of investment and mortgage-backed securities
     available  for sale                                                        --          506
                                                                            ------       ------
       Total non-interest income                                               709        1,084
                                                                            ------       ------

Non-interest expense
   Compensation and benefits                                                 2,274        2,023
   Occupancy and equipment                                                     595          628
   Federal deposit insurance premium                                            18           19
   Professional fees                                                           206          160
   Amortization of core deposit intangible                                      40           48
   Advertising                                                                 163          138
   Other operating                                                             621          724
                                                                            ------       ------
       Total non-interest expense                                            3,917        3,740
                                                                            ------       ------
       Income before income taxes                                            2,220        1,089
Income tax expense                                                             611          310
                                                                            ------       ------
       Net income                                                           $1,609       $  779
                                                                            ======       ======

Basic earnings per share                                                     $0.61        $0.31
Diluted earnings per share                                                   $0.57        $0.29
Dividends paid                                                               $0.15        $0.15
</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,
                                                                                          ---------
                                                                                      2004        2003
                                                                                    --------    --------
<S>                                                                               <C>         <C>
Cash flows from operating activities
Net income                                                                          $  1,609    $    779
Adjustments to reconcile net income to net cash provided by operating activities:
         Mortgage loan servicing rights                                                   --           3
         Deferred loan origination fees                                                   (8)       (104)
         Premiums and discounts on investment securities, net                             21         (18)
         Premiums and discounts on mortgage-backed securities and loans, net             249         549
         Amortization of core deposit intangible                                          40          48
Provision for loan losses                                                                150          90
Depreciation of premises and equipment                                                   234         257
Recognition of ESOP and MSBP expenses                                                    144         116
Gain on sale of investment and mortgage-backed securities available for sale              --        (506)
Gain on sale of real estate                                                               (1)        (11)
Increase in value of bank-owned life insurance                                          (132)       (134)
(Increase) decrease in:
         Accrued interest receivable                                                     241         257
         Other assets                                                                    839        (219)
Increase (decrease) in:
         Accrued interest payable                                                        397         610
         Other liabilities                                                              (226)       (300)
                                                                                    --------    --------
         Net cash provided (used) by operating activities                              3,557       1,417
                                                                                    --------    --------

Cash flows  from investing activities
Loan originations                                                                    (29,335)    (24,375)
Purchases of loans                                                                    (3,428)    (21,927)
Loan principal payments                                                               18,251      40,241
Proceeds from sale of mortgage-backed securities available for sale                       --      12,363
Purchases of mortgage-backed securities available for sale                            (6,129)    (25,327)
Purchase of investment securities available for sale                                      --     (15,628)
Proceeds from maturities of investment securities held to maturity                     2,000       1,330
Proceeds from maturities of investment securities available for sale                      --       8,000
Principal repayments from mortgage-backed securities held to maturity                  2,517      10,959
Principal repayments from mortgage-backed securities available for sale                7,196      10,685
(Purchases) and maturities of certificates of deposit in other financial
   institutions,net                                                                      117          (3)
(Purchases) and redemptions of Federal Home Loan Bank stock, net                         566        (422)
Proceeds from sales of real estate                                                        32          95
Purchase of real estate held for investment                                                3          --
Purchase of premises and equipment                                                      (196)       (192)
                                                                                    --------    --------
         Net cash provided by (used in) investing activities                          (8,406)     (4,201)
                                                                                    --------    --------
</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,
                                                                                                      ---------
                                                                                                  2004          2003
                                                                                                  ----          ----
<S>                                                                                           <C>         <C>
Cash flows from financing activities
Net increase in deposits                                                                         11,575        4,208
Net decrease in advances from Federal Home Loan Bank                                             (7,944)      (5,000)
Net increase (decrease) in advances from borrowers for taxes and insurance                           59         (174)
Exercise of stock options                                                                         1,245          223
Purchase of treasury stock, net                                                                  (1,216)          --
Common stock cash dividend                                                                         (394)        (373)
                                                                                                -------     --------
         Net cash provided by (used in) financing activities                                      3,325       (1,116)
                                                                                                -------     --------

         Net (decrease) increase in cash and cash equivalents                                    (1,524)      (3,900)

Cash and cash equivalents at beginning of period                                                  8,241      100,580
                                                                                                -------     --------

Cash and cash equivalents at end of period                                                      $ 6,717     $ 96,680
                                                                                                =======     ========

Supplemental disclosure of cash flow information
Cash paid for
         Interest on deposits and advances                                                       $1,755       $4,212
         Income taxes                                                                            $    0       $  150
Non-cash transactions
         Transfers from loans to real estate acquired through foreclosure                        $    0       $1,805
</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, 2004 (unaudited)
         and December 31, 2003 and for the  three-month  periods ended March 31,
         2004  and  2003  (unaudited)  include  the  accounts  of  TF  Financial
         Corporation  (the  "Company") and its wholly owned  subsidiaries  Third
         Federal Savings Bank (the "Bank"), TF Investments Corporation and Penns
         Trail  Development  Corporation.  The  Company's  business is conducted
         principally through the Bank. All significant intercompany accounts and
         transactions have been eliminated in consolidation.

NOTE 2 - BASIS OF PRESENTATION
         The  accompanying  unaudited  consolidated  financial  statements  were
         prepared in accordance with instructions for Form 10-Q and,  therefore,
         do  not  include  all of  the  disclosures  or  footnotes  required  by
         accounting  principles  generally  accepted  in the  United  States  of
         America. In the opinion of management,  all adjustments,  consisting of
         normal  recurring  accruals,  necessary  for fair  presentation  of the
         consolidated  financial  statements have been included.  The results of
         operations  for the period  ended  March 31,  2004 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, 2003.

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  position or
         results of operations.

NOTE 4 - OTHER COMPREHENSIVE INCOME
         The Company's  other  comprehensive  income  consists of net unrealized
         gains on investment securities and mortgage-backed securities available
         for sale. Total comprehensive  income for the three-month periods ended
         March 31, 2004 and 2003 was $2,408,000 and $182,000,  net of applicable
         income tax of $1,023,000 and $2,000, respectively.

                                       7
<PAGE>

                    TF FINANCIAL CORPORATION AND SUBSIDIARIES
              NOTES TO UNAUDITED CONSOLIDATED FINANCIAL STATEMENTS


NOTE 5 - EARNINGS PER SHARE

<TABLE>
<CAPTION>
                                                                         Three months ended March 31, 2004
                                                                         ---------------------------------
                                                                                       Weighted
                                                                     (000's)           Average
                                                                     Income             Shares            Per share
                                                                   (numerator)       (denominator)         Amount
                                                                   -----------       -------------         ------
<S>                                                                <C>                <C>                <C>
         Basic earnings per share
                  Income available to common stockholders            $ 1,609            2,649,208          $ 0.61

         Effect of dilutive securities
                  Stock options                                            -              171,464           (0.04)
                                                                     -------            ---------          ------
         Diluted earnings per share
                  Income available to common stockholders plus
                  effect of dilutive securities                      $ 1,609            2,820,672          $ 0.57
                                                                     =======            =========          ======
</TABLE>

<TABLE>
<CAPTION>
                                                                         Three months ended March 31, 2003
                                                                         ---------------------------------
                                                                                       Weighted
                                                                     (000's)           Average
                                                                     Income             Shares            Per share
                                                                   (numerator)       (denominator)         Amount
                                                                   -----------       -------------         ------
<S>                                                                <C>                <C>                <C>
         Basic earnings per share
                  Income available to common stockholders              $779            2,488,406           $ 0.31

         Effect of dilutive securities
                  Stock options                                           -              206,662            (0.02)
                                                                       ----            ---------           ------

         Diluted earnings per share
                  Income available to common stockholders plus
                  effect of dilutive securities                        $779            2,695,068           $ 0.29
                                                                       ====            =========           ======
</TABLE>

         There were options to purchase 34,900 shares of common stock at a range
         of  $25.33 to  $28.00  per share  which  were  outstanding  during  the
         three-month  period  ended March 31, 2003 that were not included in the
         computation of diluted earnings per share because the options' exercise
         prices were greater than the average market price of the common shares.

                                       8
<PAGE>

                    TF FINANCIAL CORPORATION AND SUBSIDIARIES
              NOTES TO UNAUDITED CONSOLIDATED FINANCIAL STATEMENTS


NOTE 6- STOCK BASED COMPENSATION
         The  Company  has  several  fixed stock  option  plans.  The  Company's
         employee stock option plans are accounted for using the intrinsic value
         method  under APB  Opinion  No. 25, as  permitted  by SFAS No.  123. No
         stock-based  compensation  expense is reflected  in net income,  as all
         options  granted  under the plans had an  exercise  price  equal to the
         market value of the underlying common stock on the date of the grant.

          Had compensation  cost for the plans been determined based on the fair
         value of options at the grant dates  consistent with the method of SFAS
         No. 123,  "Accounting for Stock-Based  Compensation," the Company's net
         income and  earnings per share would have been reduced to the pro forma
         amounts indicated below (in thousands, except per share data):

<TABLE>
<CAPTION>
            Three months ended March 31,                                  2004       2003
            -----------------------------                                 ----       ----
<S>                                                                   <C>        <C>
            Net income
                     As reported                                        $1,609     $  779
                     Deduct: stock-based compensation expense
                       determined using the fair value method,
                       net of related tax effects                           25         11
                                                                        ------     ------
                     Pro forma                                          $1,584     $  768
                                                                        ======     ======

            Basic earnings per share
                     As reported                                        $ 0.61     $ 0.31
                     Pro forma                                          $ 0.60     $ 0.31

            Diluted earnings per share
                     As reported                                        $ 0.57     $ 0.29
                     Pro forma                                          $ 0.57     $ 0.29
</TABLE>


         Stock-based  compensation  expense included in net income is related to
         stock  grants  in  lieu of  salary  and the  Company's  employee  stock
         ownership  plan.  Such  expense  totaled  $121,000  and $96,000 for the
         three-month periods ended March 31, 2004 and 2003, respectively.

                                       9

<PAGE>

                    TF FINANCIAL CORPORATION AND SUBSIDIARIES
              NOTES TO UNAUDITED CONSOLIDATED FINANCIAL STATEMENTS



NOTE 7- EMPLOYEE BENEFIT PLANS

         Net periodic  defined benefit  pension  expense  included the following
components:

                   Three months ended March 31,              2004       2003
                   -----------------------------             ----       ----
          Service cost                                     $ 57,936   $ 47,686
          Interest cost                                      44,429     46,257
          Expected return on plan assets                    (51,884)   (54,318)
          Amortization of transition (asset)/obligation       1,002      1,337
          Amortization of prior service costs                15,634     15,634
          Amortization of unrecognized net actual loss        3,720      3,274
                                                           --------   --------

          Net periodic benefit cost                        $ 70,837   $ 59,870
                                                           ========   ========

         Management expects to make no contribution to the pension plan in 2004.
The impact of the Pension  Funding Equity Act which was enacted in April 2004 is
currently being evaluated.

NOTE 8- RECLASSIFICATIONS

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

                                       10

<PAGE>

                    TF FINANCIAL CORPORATION AND SUBSIDIARIES

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

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

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

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

Financial Position

The  Company's  total assets at March 31, 2004 and December 31, 2003 were $613.2
million and $606.8 million,  respectively, an increase of $6.4 million, or 1.1%,
during the  three-month  period.  Cash and cash  equivalents  decreased  by $1.5
million. Investment securities available for sale increased by $0.05 million due
to the increase in the market value of these securities.  Investment  securities
held to maturity  decreased  by $2.0  million  due to calls of such  securities.
Mortgage-backed  securities available for sale decreased by $0.1 million as $7.2
million in principal  pay-downs received was off-set by $6.1 million of security
purchases  as well as an  increase  in the  market  value  of  these  securities
totaling $1.2 million.  Mortgage-backed securities held to maturity decreased by
$2.5 million as a result of principal repayments.  Loans receivable increased by
$14.3 million for the three-month period. Consumer and single-family residential
mortgage  loans of $16.0 million and commercial  loans of $13.3 million  account
for loan  originations  during  the first  quarter of 2004.  Additionally,  $3.4
million  of newly  originated,  single-family  residential  mortgage  loans were
purchased  during the three-month  period.  Offsetting  these increases to loans
receivable were $18.3 million of principal repayments.

                                       11
<PAGE>

Total  liabilities  increased by $4.3 million.  Deposit  growth during the first
three months of 2004 was $11.6 million.  Non-interest  bearing  demand  deposits
grew by $1.7 million while savings, money market, and interest-bearing  checking
accounts increased by a combined $2.3 million. Certificates of deposit decreased
by $7.6  million.  Advances  from the Federal  Home Loan Bank  decreased by $7.9
million  due to  $3.0  million  of  scheduled  loan  amortization  payments  and
repayments  of $4.9 million of  short-term  advances,  using funds  generated by
deposit  growth,  which replaced the Company's need for funding from the Federal
Home Loan Bank.

Total  consolidated  stockholders'  equity of the Company  was $57.7  million or
9.40% of total  assets at March 31, 2004.  During the first  quarter of 2004 the
Company  repurchased 38,000 shares of its common stock and issued 107,868 shares
pursuant to the  exercise of stock  options.  As of March 31,  2004,  there were
approximately  114,000  shares  available for  repurchase  under the  previously
announced share repurchase plan.


Asset Quality

During the first  quarter of 2004,  the  Company's  provision for loan and lease
loss was  $150,000  compared to $90,000  during the first  quarter of 2003.  The
increase in the  provision  is  consistent  with the  corresponding  increase in
balance  of loans  receivable.  During  the first  quarter  of 2003 the  Company
completed  foreclosure  proceedings  on two related  parcels of commercial  real
estate with a combined  loan balance of $1.7  million.  As of March 31, 2004 the
Company  continued to own one of the parcels.  This parcel has been  recorded as
real  estate  owned  at the  lower  of the  recorded  investment  in the loan or
estimated  fair value in the amount of $0.8  million  and is  included  in other
assets in the statement of financial  position at March 31, 2004.  Management of
the Company  believes that there has not been any significant  deterioration  in
its asset quality during such period.

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

<TABLE>
<CAPTION>
                                                         March 31,      December 31,      March 31,
                                                         ---------      ------------      ---------
                                                           2004             2003            2003
                                                           ----             ----            ----
<S>                                                      <C>              <C>             <C>
Non-performing loans                                       $2,710           $2,282          $3,275
Ratio of non-performing loans to gross loans                 0.64%            0.56%           0.93%
Ratio of non-performing loans to total assets                0.44%            0.38%           0.45%
Foreclosed property                                          $837             $868             $84
Foreclosed property to total assets                          0.14%            0.14%           0.01%
Ratio of total non-performing assets to total assets         0.58%            0.52%           0.46%
</TABLE>

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

                                                           2004           2003
                                                           ----           ----
Beginning balance, January 1,                            $2,111         $2,047
Provision                                                   150             90
Less: charge-off's (recoveries), net                         39             79
                                                         ------         ------
Ending balance, March 31,                                $2,222         $2,058
                                                         ======         ======

                                       12
<PAGE>

RESULTS OF OPERATIONS FOR THE THREE MONTHS ENDED MARCH 31, 2004 AND 2003

Net  Income.  The  Company  recorded  a net income of  $1,609,000,  or $0.57 per
diluted  share,  for the three  months  ended  March 31, 2004 as compared to net
income of $779,000, or $0.29 per diluted share, for the three months ended March
31, 2003.

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.  Yield and cost are computed by dividing
income or expense by the average  daily  balance of  interest-earning  assets or
interest-bearing liabilities, respectively, for the periods indicated.

<TABLE>
<CAPTION>
                                                                         Three months ended March 31,
                                                                         ----------------------------
                                                                 2004                                    2003
                                                    --------------------------------        -------------------------------
                                                  Average                   Average       Average                   Average
                                                  Balance     Interest      Yld/Cost      Balance     Interest      Yld/Cost
                                                  -------     --------      --------      -------     --------      --------
                                                                            (dollars in thousands)
<S>                                              <C>            <C>            <C>       <C>            <C>            <C>
Assets:
  Interest-earning assets:
    Loans receivable (1).......................    $410,976       $5,990         5.85%     $366,561       $6,051         6.69%
    Mortgage-backed securities.................     130,658        1,457         4.47%      163,663        1,852         4.59%
    Investment securities......................      30,453          280         3.69%       56,620          508         3.64%
    Other interest-earning assets(2)...........       1,570            3         0.77%       94,384          246         1.06%
                                                   --------       ------                   --------       ------
      Total interest-earning assets............     573,657        7,730         5.42%      681,228        8,657         5.15%
                                                                  ------                                  ------
Non interest-earning assets....................      35,513                                  34,960
                                                   --------                                --------
      Total assets.............................    $609,170                                $716,188
                                                   ========                                ========

Liabilities and stockholders' equity:
  Interest-bearing liabilities
    Deposits...................................    $464,744        1,506         1.30%     $442,687        2,044         1.87%
    Advances from the FHLB and other
               Borrowings......................      83,314          646         3.11%      204,026        2,778         5.52%
                                                   --------       ------                   --------       ------
      Total interest-bearing liabilities.......     548,058        2,152         1.58%      646,713        4,822         3.02%
                                                                  ------                                  ------
Non interest-bearing liabilities...............       5,233                                   6,422
                                                   --------                                --------
      Total liabilities........................     553,291                                 653,135
Stockholders' equity...........................      55,879                                  63,053
                                                   --------                                --------
   Total liabilities and stockholders' equity..    $609,170                                $716,188
                                                   ========                                ========
Net interest income............................                   $5,578                                  $3,835
                                                                  ======                                  ======
Interest rate spread (3).......................                                  3.84%                                   2.13%
Net yield on interest-earning assets (4).......                                  3.91%                                   2.28%
Ratio of average interest-earning assets to
average interest bearing liabilities...........                                   105%                                    105%
</TABLE>


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

                                       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>
                                                             Three months ended
                                                                  March 31,
                                                                2004 vs. 2003
                                                      ---------------------------------
                                                               Increase (decrease)
                                                                    due to
                                                      ---------------------------------
                                                         Volume      Rate         Net
                                                      ---------------------------------
<S>                                                   <C>        <C>            <C>
     Interest income:
          Loans receivable, net                         $ 3,011    $(3,072)       (61)
          Mortgage-backed securities                       (351)       (44)      (395)
          Investment securities                            (276)        48       (228)
          Other interest-earning assets                    (190)       (53)      (243)
                                                        -------    -------    -------
             Total interest-earning assets                2,194     (3,121)      (927)
                                                          =====     ======       ====
     Interest expense:

          Deposits                                          635     (1,173)      (538)
          Advances from the FHLB and other borrowings    (1,227)      (905)    (2,132)
                                                        -------    -------    -------
            Total interest-bearing liabilities             (592)    (2,078)    (2,670)
                                                           ====     ======     ======

     Net change in net interest income                  $ 2,786    $(1,043)   $ 1,743
                                                        =======    =======    =======
</TABLE>

Total Interest Income.  Total interest income decreased by $0.9 million or 10.7%
to $7.7  million for the quarter  ended March 31, 2004  compared  with the first
quarter of 2003 primarily because of low market interest rates which resulted in
a  significant  amount  of  loan  prepayments  during  the  intervening  period.
Increased loan  originations at the Bank  contributed to loan income in a manner
that largely offset the impact caused by the low market interest rates. Interest
income  from  mortgage-backed   securities,   investment  securities  and  other
interest-earning  assets  was  lower  in the  first  three  months  of  2004  in
comparison  to the same period of 2003.  This  decrease is  consistent  with the
reduction in the balances maintained in these types of interest-earning assets.

Total Interest Expense. Total interest expense decreased by $2.7 million to $2.1
million during the three-month  period ended March 31, 2004 as compared with the
first quarter of 2003. The increase in the average  balance of deposits was more
than offset by lower market interest rates during the period and the lower rates
paid on the Bank's  renewing  certificates  of deposit that had been  originated
when market  interest  rates were  higher.  In  addition,  the Bank  lowered the
interest  rates paid on several of its other  deposit  products in order to keep
them in line with short-term  market interest rates and the Bank's  competitors.
The  repayment  and  refinancing  of the Federal  Home Loan Bank  Advances  that
occurred at the end of the third quarter of 2003 also contributed to the overall
reduction of interest expense.

                                       14
<PAGE>

Non-interest  income. Total non-interest income was $709,000 for the three-month
period  ended March 31, 2004  compared  with  $1,084,000  for the same period in
2003.  The  decrease  was  primarily  due to  $506,000  in net gains on sales of
mortgage-backed  securities  available for sale during the first quarter of 2003
while,  conversely,  there  were no such sales  during the same  period in 2004.
Retail  banking  fees were  $131,000  greater  over the  period as a result of a
$76,000  increase in overdraft and  uncollected  fees.  Also,  the collection of
mortgage  brokered  fees and a growth  in other  loan  fees  contributed  to the
increase during the period.

Non-interest  expense.  Total non-interest expense increased by $177,000 to $3.9
million for the three months  ended March 31, 2004  compared to the same time in
2003. Compensation and benefit expenses were higher by $251,000 due to increases
in salary and compensation  costs of the Company.  Professional  expenses of the
Company were $46,000 higher mainly because of compliance and audit work that was
outsourced. In contrast, other operating expenses decreased $103,000 between the
two  quarters  mostly  due to a $55,000  decline  in loan  expenses  related  to
single-family residential mortgage loans.

                                       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  three-month period ended
March 31, 2004 in the ability of the Company and its  subsidiaries to fund their
operations.

At March 31, 2004,  the Company had  commitments  outstanding  under  letters of
credit of $1 million,  commitments  to  originate  loans of $21.9  million,  and
commitments  to fund  undisbursed  balances of closed  loans and unused lines of
credit of $51.5  million.  There has been no  material  change  during the three
months  ended  March  31,  2004  in  any  of  the  Company's  other  contractual
obligations or commitments to make future payments.

Capital Requirements

The Bank was in compliance with all of its capital  requirements as of March 31,
2004.


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, 2004.


CONTROLS AND PROCEDURES

Evaluation of Disclosure Controls and Procedures

Based on their  evaluation of the Company's  disclosure  controls and procedures
(as defined in Rule  13a-15(e)  under the  Securities  Exchange Act of 1934 (the
"Exchange  Act")),  the  Company's  principal  executive  officer and  principal
financial  officer have  concluded  that as of the end of the period  covered by
this Quarterly  Report on Form 10-Q such disclosure  controls and procedures are
effective to ensure that information  required to be disclosed by the Company in
reports that it files or submits under the Exchange Act is recorded,  processed,
summarized  and reported  within the time periods  specified in  Securities  and
Exchange Commission rules and forms.

Changes in Internal Controls over Financial Reporting

During the quarter under report,  there was no change in the Company's  internal
control over financial reporting that has materially affected,  or is reasonably
likely to materially  affect,  the  Company's  internal  control over  financial
reporting.

                                       16
<PAGE>

CRITICAL ACCOUNTING POLICIES

Certain  critical  accounting  policies  of  the  Company  require  the  use  of
significant  judgment  and  accounting  estimates  in  the  preparation  of  the
consolidated  financial  statements  and  related  data  of the  Company.  These
accounting  estimates require  management to make assumptions about matters that
are highly  uncertain at the time the  accounting  estimate is made.  Management
believes  that  the  most  critical  accounting  policy  requiring  the  use  of
accounting estimates and judgment is the determination of the allowance for loan
losses.  If the  financial  position of a significant  amount of debtors  should
deteriorate  more than the  Company has  estimated,  present  reserves  for loan
losses may be  insufficient  and  additional  provisions  for loan losses may be
required. The allowance for loan losses was $2,222,000 at March 31, 2004.

NEW ACCOUNTING PRONOUNCEMENTS

On March 31, 2004,  the  Financial  Accounting  Standards  Board (FASB) issued a
proposed Statement, "Share-Based Payment an Amendment of FASB Statements No. 123
and  APB  No.  95",  that  addresses  the  accounting  for  share-based  payment
transaction in which an enterprise  receives  employee  services in exchange for
(a) equity  instruments of the enterprise or (b)  liabilities  that are based on
the fair value of the enterprise's  equity instruments or that may be settled by
the issuance of such equity instruments. Under the FASB's proposal, all forms of
share-based payments to employees, including stock options, would be treated the
same as other forms of  compensation  by  recognizing  the  related  cost in the
income  statement.  The expense of the award would generally be measured at fair
value at the grant date. Current  accounting  guidance requires that the expense
relating to so-called fixed plan employee stock options only be disclosed in the
footnotes to the financial  statements.  The proposed  Statement would eliminate
the  ability to account  for  share-based  compensation  transactions  using APB
Opinion  No. 25,  "Accounting  for Stock  Issued to  Employees."  The Company is
currently  evaluating this proposed  statement and its effects on its results of
operations.

In March 2004 the  Securities  and  Exchange  Commission  staff  released  Staff
Accounting  Bulletin  (SAB) 105, "Loan  Commitments  Accounted for as Derivative
Instruments."  SAB 105 requires  that a lender  should not consider the expected
cash  flows  related  to loan  servicing  or  include  any internally  developed
intangible  assets in determining the fair value of loan  commitments  accounted
for as  derivatives.  Companies  will be required to adopt SAB 105 effective for
commitments  entered into after March 31, 2004. The requirements of SAB 105 will
apply to the Company's mortgage interest rate lock commitments  related to loans
held for sale.  At March 31,  2004,  the Company  did not have such  commitments
subject  to  the  provisions  of SAB  105.  The  Company  anticipates  that  the
implementation  of SAB 105 will not have a material  impact on the effect on the
Company's financial position or results of operations.

                                       17

<PAGE>

                    TF FINANCIAL CORPORATION AND SUBSIDIARIES

                                     PART II

ITEM 1.   LEGAL PROCEEDINGS

          Not applicable.

ITEM 2.   CHANGES IN SECURITIES, USE OF PROCEEDS
          AND ISSUER PURCHASES OF EQUITY SECURITIES

          The following table provides information on repurchases by the Company
          of its common stock in each month of the quarter ended March 31, 2004:

<TABLE>
<CAPTION>
                                                                     Total Number of        Maximum Number of
                                 Total                             Shares Purchased as     Shares that may yet
                                 Number of                          Part of Publicly       be Purchased Under
                                 Shares          Average Price      Announced Plan of          the Plans or
                Period          Purchased       Paid per Share           Program                 Programs
                ------          ---------       --------------           -------                 --------
<S>                         <C>              <C>                     <C>                    <C>
        January 1, 2004
        through                    --                  --                   --                   114,082
        January 31, 2004

        February 1, 2004
        through                    --                  --                   --                   114,082
        February 29, 2004

        March 1
        Through                  38,000             $32.00                  --                   114,082
        March  31, 2004

</TABLE>

         The total number of shares  repurchased during the quarter was directly
related to the exercise of stock options.  The repurchase  poses no modification
to the  rights  of  stockholders.  Furthermore,  there has been no change in the
ability of the Company to pay  dividends or any  material  change in the working
capital  of the  Company.  The stock  repurchase  did not  alter the  previously
approved stock repurchase plan of the Company.

ITEM 3.   DEFAULTS UPON SENIOR SECURITIES

          Not applicable.

                                       18
<PAGE>


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 28,  2004.  There were  outstanding  and  entitled  to vote at the
Meeting  2,885,502 shares of Common Stock of the Company.  There were present at
the  meeting  or by proxy the  holders  of  2,611,478  shares  of  Common  Stock
representing  90.51% of the total eligible  votes to be cast.  Proposal 1 was to
elect two directors of the Company.  Proposal 2 was to ratify the appointment of
the  independent  auditor for the December  31, 2004 fiscal year.  Proposal 3, a
shareholder  submitted  proposal,  was to take the necessary steps to remove any
provisions  in the  Company's  Certificate  of  Incorporation  and  Bylaws  that
segregate the Board of Directors into separate  classes with staggered  terms of
office.  The result of the voting at the Meeting is as follows  (percentages  in
terms of votes cast):

<TABLE>
<CAPTION>
<S>                                                   <C>                       <C>
Proposal 1
     George A. Olsen                                     FOR:       2,314,744       PERCENT FOR:        88.64%
                                                         WITHHELD:    296,734       PERCENT WITHHELD:   11.36%
     Dennis L. McCartney                                 FOR:       2,316,547       PERCENT FOR:        88.71%
                                                         WITHHELD:    294,931       PERCENT WITHHELD:   11.29%


Proposal 2
     Ratification of the appointment of Grant Thornton, LLP
     as independent auditor for the Company for the
     December 31, 2004 fiscal year.                      FOR:       2,550,903       PERCENT FOR:        97.68%
                                                         AGAINST:      21,005       PERCENT AGAINST:     0.80%
                                                         ABSTAIN:      39,570       PERCENT ABSTAIN      1.52%
 Proposal 3
     To   remove   provisions   from  the   Company's   Certificate   of
     Incorporation and Bylaws that segregate the Board of Directors into
     separate classed with staggered terms of office.
                                                         FOR:         850,328       PERCENT FOR:        40.67%
                                                         AGAINST:   1,228,798       PERCENT AGAINST:    58.77%
                                                         ABSTAIN:      11,860       PERCENT ABSTAIN      0.56%
</TABLE>



ITEM 5.   OTHER INFORMATION

          None

ITEM 6.   EXHIBITS AND REPORTS ON FORM 8-K

          (a)  Exhibits

               31.  Certification  pursuant to Section 302 of the Sarbanes-Oxley
                    Act of 2003.
               32.  Certification  pursuant to Section 906 of the Sarbanes-Oxley
                    Act of 2003.

          (b)  Reports on Form 8-K

               On April  22,  2004 the  Company  filed a Form  8-K  wherein  the
               Company  included  the press  release  announcing  the  Company's
               earnings for the first quarter of 2004.

                                       19
<PAGE>

                                     SIGNATURES

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


                                      TF FINANCIAL CORPORATION




                                      /s/ Kent C. Lufkin
                                      ------------------------------------------
Date: May 14, 2004                    Kent C. Lufkin
                                      President and CEO
                                      (Principal Executive Officer)



                                      /s/ Dennis R. Stewart
                                      ------------------------------------------
Date: May 14, 2004                    Dennis R. Stewart
                                      Executive Vice President and
                                      Chief Financial Officer
                                      (Principal Financial & Accounting Officer)

                                       20