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, 2003
                               -------------------------------------------------

                                       OR

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

For the transition period from _______________________ to ______________________

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

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


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

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

Registrant's telephone number, including area code         215-579-4000
                                                   -----------------------------

                                       N/A
--------------------------------------------------------------------------------
               Former name, former address and former fiscal year,
                         if changed since last report.


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

         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 5, 2003
                                                           -----------

            Class                                          Outstanding
---------------------------                             ----------------
$.10 par value common stock                             2,741,296 shares


<PAGE>

                    TF FINANCIAL CORPORATION AND SUBSIDIARIES

                                    FORM 1O-Q

                      FOR THE QUARTER ENDED MARCH 31, 2003


                                      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                 10

        Item 3. Quantitative and Qualitative Disclosures about Market Risk    16

        Item 4. Controls and Procedures                                       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

EXHIBITS

        Certifications pursuant to Section 302 of the
        Sarbanes-Oxley Act of 2002                                            19

        Certification pursuant to Section 906 of the
        Sarbanes-Oxley Act of 2002                                            21

                                       2

<PAGE>

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

<TABLE>
<CAPTION>
                                                                              Unaudited       Audited
                                                                              March 31,     December 31,
                                                                                 2003          2002
                                                                              ---------    -------------
<S>                                                                         <C>          <C>
                                   Assets
Cash and cash equivalents                                                     $  96,680    $ 100,580
Certificates of deposit in other financial institutions                             223          220
Investment securities available for sale - at fair value                         34,877       27,243
Investment securities held to maturity (fair value of $13,811 and $15,187,       13,214       14,563
    respectively)
Mortgage-backed securities available for sale - at fair value                   116,703      115,243
Mortgage-backed securities held to maturity (fair value of $45,966 and           43,620       54,592
    $57,346, respectively)
Loans receivable, net                                                           374,279      370,092
Federal Home Loan Bank stock - at cost                                           11,846       11,424
Accrued interest receivable                                                       3,319        3,576
Core deposit intangible, net of accumulated amortization of
    $2,319 and $2,271, respectively                                                 505          553
Goodwill                                                                          4,324        4,324
Premises and equipment, net                                                       6,677        6,742
Other assets                                                                     13,951       11,880
                                                                              ---------    ---------
                                Total assets                                  $ 720,218    $ 721,032
                                                                              =========    =========

                    Liabilities and stockholders' equity
Liabilities
   Deposits                                                                   $ 446,766    $ 442,558
   Advances from the Federal Home Loan Bank                                     202,359      207,359
   Advances from borrowers for taxes and insurance                                1,156        1,330
   Accrued interest payable                                                       3,507        2,897
   Other liabilities                                                              3,442        4,048
                                                                              ---------    ---------
                              Total liabilities                                 657,230      658,192
                                                                              ---------    ---------

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;  2,500,504 and 2,482,586 shares outstanding
       at March 31, 2003 and December 31, 2002, net of
       treasury shares of 2,552,389 and 2,567,268, respectively                     529          529
   Retained earnings                                                             60,384       59,978
   Additional paid-in capital                                                    51,657       51,647
   Unearned ESOP shares                                                          (2,355)      (2,401)
   Treasury stock - at cost                                                     (48,526)     (48,809)
   Accumulated other comprehensive income                                         1,299        1,896
                                                                              ---------    ---------
                         Total stockholders' equity                              62,988       62,840
                                                                              ---------    ---------

Total liabilities and stockholders' equity                                    $ 720,218    $ 721,032
                                                                              =========    =========
</TABLE>

                                       3

<PAGE>

                    TF FINANCIAL CORPORATION AND SUBSIDIARIES
                  UNAUDITED CONSOLIDATED STATEMENTS OF EARNINGS
                      (in thousands, except per share data)
<TABLE>
<CAPTION>
                                                                         For Three Months
                                                                          Ended March 31,
                                                                          ---------------
                                                                            2003      2002
                                                                            ----      ----

<S>                                                                    <C>       <C>
Interest income
   Loans                                                                 $ 6,051   $ 6,731
   Mortgage-backed securities                                              1,852     3,060
   Investment securities                                                     508       587
   Interest bearing deposits and other                                       246       209
                                                                         -------   -------
       Total interest income                                               8,657    10,587
                                                                         -------   -------
Interest expense
   Deposits                                                                2,044     2,830
   Advances from the Federal Home Loan Bank and other borrowings           2,778     3,037
                                                                         -------   -------
       Total interest expense                                              4,822     5,867
                                                                         -------   -------
       Net interest income                                                 3,835     4,720
Provision for loan losses                                                     90       150
                                                                         -------   -------
       Net interest income after provision for loan losses                 3,745     4,570
                                                                         -------   -------

Non-interest income
   Service fees, charges and other operating income                          444       407
   Bank-owned life insurance                                                 134       133
   Gain on sale of investment and mortgage-backed
     securities available for sale                                           506        --
                                                                         -------   -------
       Total non-interest income                                           1,084       540
                                                                         -------   -------
Non-interest expense
   Compensation and benefits                                               2,023     1,928
   Occupancy and equipment                                                   628       578
   Federal deposit insurance premium                                          19        19
   Professional fees                                                         160        80
   Amortization of core deposit intangible                                    48        58
   Advertising                                                               138       110
   Other operating                                                           724       647
                                                                         -------   -------
       Total non-interest expense                                          3,740     3,420
                                                                         -------   -------
       Income before income taxes                                          1,089     1,690
Income taxes                                                                 310       405
                                                                         -------   -------
       Net income                                                        $   779   $ 1,285
                                                                         =======   =======

Basic earnings per share                                                 $  0.31   $  0.52
Diluted earnings per share                                               $  0.29   $  0.49
</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,
                                                                                      2003        2002
                                                                                    --------    --------
<S>                                                                              <C>         <C>
Cash flows from operating activities
Net Income                                                                          $    779    $  1,285
Adjustments to reconcile net income to net cash provided by operating activities:
         Mortgage loan servicing rights                                                   (3)          3
         Deferred loan origination fees                                                 (104)        (63)
         Premiums and discounts on investment securities, net                            (18)         35
         Premiums and discounts on mortgage-backed securities and loans, net             549        (123)
         Amortization of core deposit intangible                                          48          58
Provision for loan losses                                                                 90         150
Depreciation of premises and equipment                                                   257         252
Recognition of ESOP and MSBP expenses                                                    116          67
Gain on sale of investment and mortgage-backed securities available for sale            (506)         --
Gain on sale of real estate                                                              (11)         --
Increase in value of bank-owned life insurance                                          (134)       (133)
(Increase) decrease in:
         Accrued interest receivable                                                     257        (124)
         Other assets                                                                   (213)         --
Increase (decrease) in:
         Accrued interest payable                                                        610         525
         Other liabilities                                                              (300)       (776)
                                                                                    --------    --------
         Net cash provided by operating activities                                     1,417       1,156
                                                                                    --------    --------

Cash flows  from investing activities
Loan originations                                                                    (24,375)     (9,975)
Purchases of loans                                                                   (21,927)    (14,767)
Loan principal payments                                                               40,241      33,548
Proceeds from sale of mortgage-backed securities available for sale                   12,363          --
Purchases of mortgage-backed securities available for sale                           (25,327)    (33,770)
Purchase of investment securities  held to maturity                                       --      (6,821)
Purchase of investment securities available for sale                                 (15,628)         --
Proceeds from maturities of investment securities held to maturity                     1,330          --
Proceeds from maturities of investment securities available for sale                   8,000          --
Principal repayments from mortgage-backed securities held to maturity                 10,959      13,265
Principal repayments from mortgage-backed securities available for sale               10,685       9,643
Purchase of certificates of deposit in other financial institutions                       (3)         --
Purchases and redemptions of Federal Home Loan Bank stock, net                          (422)        250
Proceeds from sales of real estate acquired through foreclosure                           95          18
Purchase of premises and equipment                                                      (192)        (27)
                                                                                    --------    --------
         Net cash used in investing activities                                        (4,201)     (8,636)
                                                                                    --------    --------
</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,
                                                                                          ---------
                                                                                      2003         2002
                                                                                    ---------    ---------
<S>                                                                               <C>          <C>
Cash flows from financing activities
Net increase in deposits                                                                4,208       10,233
Net decrease in advances from Federal Home Loan Bank                                   (5,000)          --
Net decrease in advances from borrowers for taxes and insurance                          (174)        (187)
Exercise of stock options                                                                 223          100
Purchase of treasury stock, net                                                            --         (270)
Common stock cash dividend                                                               (373)        (370)
                                                                                    ---------    ---------
         Net cash provided by (used in) financing activities                           (1,116)       9,506
                                                                                    ---------    ---------

         Net (decrease) increase in cash and cash equivalents                          (3,900)       2,026

Cash and cash equivalents at beginning of period                                      100,580       69,139
                                                                                    ---------    ---------

Cash and cash equivalents at end of period                                          $  96,680    $  71,165
                                                                                    =========    =========

Supplemental disclosure of cash flow information
Cash paid for
         Interest on deposits and advances                                          $   4,212    $   5,342
         Income taxes                                                               $     150    $     700
Non-cash transactions
         Transfers from loans to real estate acquired through foreclosure           $   1,805    $     185
</TABLE>

                 See notes to consolidated financial statements

                                       6
<PAGE>

                    TF FINANCIAL CORPORATION AND SUBSIDIARIES
              NOTES TO UNAUDITED CONSOLIDATED FINANCIAL STATEMENTS

NOTE 1 - RESTATEMENT OF INFORMATION FOR THE PERIOD ENDED MARCH 31, 2002
          On  October  1, 2002 the FASB  issued  SFAS No.  147,"Acquisitions  of
          Certain Financial  Institutions."  Except for transactions between two
          or more mutual  enterprises,  SFAS No. 147 removed the acquisitions of
          financial  institutions  from the  scope of both  SFAS No. 72 and FASB
          Interpretation No. 9 and required that those transactions be accounted
          for in  accordance  with  SFAS No.  141 and SFAS No.  142.  Thus,  the
          requirement  of SFAS No. 72 to recognize (and  subsequently  amortize)
          any  excess of the fair  value of  liabilities  assumed  over the fair
          value of tangible and identifiable  intangible  assets acquired ("SFAS
          72 goodwill")  as an  unidentifiable  intangible no longer  applied to
          acquisitions  within the scope of SFAS No. 147. Finally,  SFAS No. 147
          provided  that  branch  acquisitions  that  meet the  definition  of a
          business should be accounted for as a business  combination.  SFAS No.
          147 was effective  October 1, 2002,  although earlier  application was
          permitted. The Company has elected to apply SFAS No. 147 as of January
          1, 2002.  In  accordance  with the  provisions of SFAS No. 147 interim
          financial  statements of the Company issued after January 1, 2002 have
          been restated to remove amortization  expense associated with SFAS No.
          72 goodwill.  Such expense  totaled  $82,000,  net of a tax benefit of
          $29,000 for the three months ended March 31, 2002.

NOTE 2 - PRINCIPLES OF CONSOLIDATION
          The consolidated financial statements as of March 31, 2003 (unaudited)
          and December 31, 2002 and for the three-month  periods ended March 31,
          2003  and  2002  (unaudited)  include  the  accounts  of TF  Financial
          Corporation  (the "Company") and its wholly owned  subsidiaries  Third
          Federal Savings Bank (the "Bank"), TF Investments  Corporation,  Penns
          Trail Development  Corporation and Teragon Financial Corporation.  The
          Company's  business is  conducted  principally  through the Bank.  All
          significant   intercompany   accounts  and   transactions   have  been
          eliminated in consolidation.

NOTE 3 - 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,  2003 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, 2002.

NOTE 4 - 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 5 - 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, 2003 and 2002 was $182,000 and  $802,000,  net
          of applicable income tax of $2,000 and $156,000, respectively.

                                       7
<PAGE>

                    TF FINANCIAL CORPORATION AND SUBSIDIARIES
              NOTES TO UNAUDITED CONSOLIDATED FINANCIAL STATEMENTS


NOTE 6 - EARNINGS PER SHARE

<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.

<TABLE>
<CAPTION>
                                                                   Three months ended March 31, 2002
                                                                   ---------------------------------
                                                                                 Weighted
                                                                   (000's)       average
                                                                   Income         shares      Per share
                                                                 (numerator)   (denominator)    Amount
                                                                 -----------   -------------    ------
<S>                                                                 <C>          <C>        <C>
         Basic earnings per share
                  Income available to common stockholders           $ 1,285       2,462,822    $   0.52
                                                                                               ========
         Effect of dilutive securities
                  Stock options                                           -         182,265       (0.03)
                                                                      -----       ---------    --------
         Diluted earnings per share
                  Income available to common stockholders plus
                  effect of dilutive securities                     $ 1,285       2,645,087    $   0.49
                                                                    =======       =========    ========
</TABLE>

         There were  options to purchase  5,000 shares of common stock at $28.00
         per share which were  outstanding  during the three month  period ended
         March 31,  2002 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 7- 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):


         Quarter ended March 31,                                2003        2002
         ------------------------                               ----        ----

         Net income
            As reported                                       $  779     $ 1,285
            Deduct: stock-based compensation expense
                    determined using the fair value method,
                    net of related tax effects                    11          17
                                                              ------     -------
                  Pro forma                                   $  768     $ 1,268
                                                              ======     =======

         Basic earnings per share
                  As reported                                 $ 0.31     $ 0.52
                  Pro forma                                   $ 0.31     $ 0.52

         Diluted earnings per share
                  As reported                                 $ 0.29     $ 0.49
                  Pro forma                                   $ 0.29     $ 0.48


         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 $58,000 and $48,000 for the three
         month periods ended March 31, 2003 and 2002, respectively.


NOTE 8- RECLASSIFICATIONS
          Certain  prior year amounts have been  reclassified  to conform to the
          current period presentation.

                                       9

<PAGE>

                    TF FINANCIAL CORPORATION AND SUBSIDIARIES

                     MANAGEMENT'S DISCUSSION AND ANALYSIS OF
                  FINANCIAL CONDITION 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 Condition

The  Company's  total assets at March 31, 2003 and December 31, 2002 were $720.2
million and $721.0 million,  respectively,  a decrease of $0.8 million, or 0.1%,
during the  three-month  period.  Cash and cash  equivalents  decreased  by $3.9
million. Investment securities available for sale increased by $7.6 million, the
net effect of the  purchase of $15.6  million less the calls and  maturities  of
$8.0  million  of  such  securities.  Investment  securities  held  to  maturity
decreased  by $1.3  million  due to calls  and  maturities  of such  securities.
Mortgage-backed securities available for sale increased by $1.5 million as $25.3
million in  purchases  of such  securities  more than  off-set the $0.7  million
decrease in  unrealized  gains plus the sale of $12.4  million and the principal
paydowns  of $10.7  million  received  from  these  securities.  Mortgage-backed
securities  held to maturity  decreased by $11.0 million due to the high rate of
prepayments  of  the  mortgages   underlying  these   pass-through   securities.
Similarly,  high  prepayments  of  existing  mortgages  in the loans  receivable
portfolio  caused a decrease of $40.2  million in loans  receivable.  Offsetting
this reduction in existing loans receivable was the origination of $24.4 million
in predominately consumer and single-family  residential mortgage loans, and the
purchase  of  $21.9  million  in  newly  originated,  single-family  residential
mortgage loans.

                                       10
<PAGE>

Total  liabilities  decreased by $1.0 million.  Deposit  growth during the first
quarter of 2003 was $4.2 million.  Non-interest  bearing demand deposits grew by
$1.9 million while savings, money market, and interest-bearing checking accounts
increased by a combined $3.9 million.  Certificates of deposit decreased by $1.6
million.  Advances from the Federal Home Loan Bank decreased by $5.0 million due
to the scheduled maturity of an advance.

Total  consolidated  stockholders'  equity of the Company  was $63.0  million or
8.75% of assets at March 31, 2003.  During the first quarter of 2003 the Company
did not  repurchase  any shares of its common  stock and  issued  13,866  shares
pursuant to the  exercise of stock  options.  As of March 31,  2003,  there were
approximately  114,000  shares  available for  repurchase  under the  previously
announced  share  repurchase  plan,  and the Company will continue to repurchase
shares as share availability and market conditions permit.

Asset Quality

During the 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.  These loans were non-performing loans at December 31, 2002. These
parcels  have  been  recorded  as real  estate  owned  at the  lower of the loan
balances or estimated  fair value in the amount of $1.7 million and are included
in other  assets in the  statement  of  financial  condition  at March 31, 2003.
Management  of the  Company  believes  that  there has not been any  significant
deterioration in its asset quality during the first quarter of 2003.

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

<TABLE>
<CAPTION>
                                                        March 31,       December 31,      March 31,
                                                        ---------       ------------      ---------
                                                           2003             2002            2002
                                                           ----             ----            ----
<S>                                                   <C>              <C>              <C>
Non-performing loans                                    $2,395           $3,822           $3,904
Ratio of non-performing loans to gross loans              0.64%            1.03%            1.05%
Ratio of non-performing loans to total assets             0.33%            0.53%            0.54%
Foreclosed property                                     $1,805              $84             $198
Foreclosed property to total assets                       0.25%            0.01%            0.03%
Ratio of total non-performing assets to total assets      0.58%            0.54%            0.57%
</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):

                                                   2003               2002
                                                 ------             ------
Beginning balance, January 1,                    $2,047             $1,972
Provision                                            90                150
Less: charge-off's (recoveries), net                 79                 66
                                                 ------             ------
Ending balance, March 31,                        $2,058             $2,056
                                                 ======             ======

                                       11
<PAGE>

RESULTS OF OPERATIONS FOR THE THREE MONTHS ENDED MARCH 31, 2003 AND 2002

Net Income.  The Company  recorded net income of $779,000,  or $0.29 per diluted
share,  for the three months ended March 31, 2003 as compared to $1,285,000,  or
$0.49 per diluted share, for the three months ended March 31, 2002.

Average Balance Sheet

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

<TABLE>
<CAPTION>
                                                                           Three Months Ended March,
                                                                           -------------------------
                                                                   2003                                   2002
                                                    ----------------------------------        ----------------------------------
                                                   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)........................   $366,561       $6,051         6.69%     $372,490      $ 6,731         7.33%
    Mortgage-backed securities..................    163,663        1,852         4.59%      201,866        3,060         6.15%
    Investment securities.......................     56,620          508         3.64%       47,792          587         4.98%
    Other interest-earning assets(2)............     94,384          246         1.06%       53,966          209         1.57%
                                                   --------       ------                   --------      -------
      Total interest-earning assets.............    681,228        8,657         5.15%      676,114       10,587         6.35%
                                                                  ------                                 -------
Non interest-earning assets.....................     34,960                                  35,298
                                                   --------                                --------
      Total assets..............................   $716,188                                $711,412
                                                   ========                                ========

Liabilities and stockholders' equity:
  Interest-bearing liabilities:
    Deposits....................................   $442,687        2,044         1.87%     $423,239        2,830         2.71%
    Advances from the FHLB and other
      Borrowings................................    204,026        2,778         5.52%      222,359        3,037         5.54%
                                                   --------       ------                    -------      -------
      Total interest-bearing liabilities........    646,713        4,822         3.02%      645,598        5,867         3.69%
                                                                  ------                                 -------
Non interest-bearing liabilities................      6,422                                   7,806
                                                   --------                                --------
      Total liabilities.........................    653,135                                 653,404
Stockholders' equity............................     63,053                                  58,008
                                                   --------                                --------
   Total liabilities and stockholders' equity...   $716,188                                $711,412
                                                   ========                                ========
Net interest income.............................                  $3,835                                 $ 4,720
                                                                  ======                                 =======
Interest rate spread (3)........................                                 2.13%                                   2.66%

Net yield on interest-earning assets (4)........                                 2.28%                                   2.83%

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.

                                       12
<PAGE>

Rate/Volume Analysis

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

                                                       Three months ended
                                                             March 31,
                                                           2003 vs. 2002
                                                --------------------------------
                                                         Increase (decrease)
                                                               due to
                                                --------------------------------
                                                   Volume       Rate        Net
                                                --------------------------------
Interest income:
     Loans receivable, net                        $  (106)   $  (574)   $  (680)
     Mortgage-backed securities                      (516)      (692)    (1,208)
     Investment securities                            490       (569)       (79)
     Other interest-earning assets                    412       (375)        37
                                                  -------    -------    -------
        Total interest-earning assets                 280     (2,210)    (1,930)
                                                  =======    =======    =======

Interest expense:

     Deposits                                         817     (1,603)      (786)
     Advances from the FHLB and other borrowings     (250)        (9)      (259)
                                                  -------    -------    -------
       Total interest-bearing liabilities             567     (1,612)    (1,045)
                                                  =======    =======    =======
Net change in net interest income                 $  (287)   $  (598)   $  (885)
                                                  =======    =======    =======

Total Interest Income.  Total interest income decreased by $1.9 million or 18.2%
to $8.7  million for the three  months  ended March 31, 2003  compared  with the
first quarter of 2002 primarily because of the consequences of record low market
interest rates. As a result, during the past year the Bank's callable investment
securities were called, higher coupon mortgage-related securities were paid down
at an accelerated  rate, and loans were  refinanced by borrowers at lower rates,
or away from the Bank,  resulting in large paydowns of higher yielding loans. In
addition,  the  interest  rates on the Bank's  adjustable  rate  loans  adjusted
downward.   Furthermore,   the  Company's   cash  and  cash   equivalents   were
significantly  higher  during the 2003  period,  while the rate  earned on these
assets,  the federal funds rate minus 25 basis points,  was substantially  lower
during the 2003 period.  At March 31, 2003,  cash and cash  equivalents  totaled
$96.7 million.

Total Interest Expense. Total interest expense decreased by $1.0 million to $4.8
million for the  three-month  period ended March 31,  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.

Non-interest   income.   Total  non-interest   income  was  $1,084,000  for  the
three-month  period  ended March 31, 2003  compared  with  $540,000 for the same
period in 2002.  The increase is primarily  due to $506,000 in gains on sales of
mortgage-backed  securities  available for sale during the first quarter of 2003
while there were no such sales during the 2002 period.

                                       13
<PAGE>

Non-interest  expense.  Total non-interest expense increased by $320,000 to $3.7
million for the three months ended March 31, 2003 compared to the same period in
2002. Compensation and benefits expense was higher during the 2003 period due to
a $93,000 one-time reduction in pension expense during the first quarter of 2002
caused by participants  who had very high balances  leaving the plan.  Occupancy
and  equipment  expense  increased in part  because  maintenance  expenses  were
unusually  high during the first  quarter of 2003 due to inclement  weather.  In
addition,  the  Bank  opened  a  new  branch  office  during  January  of  2003.
Professional  fees were higher  during the first quarter of 2003 compared to the
year earlier period mainly due to the timing of the payment of costs  associated
with fiscal  year end audit and legal  services.  Other  expenses  were  $77,000
higher  during the first quarter of 2003 compared with the first quarter of 2002
due in large part to a $49,000  increase  in loan  origination  costs due to the
increased volume of the Company's loan  originations and the Company's  strategy
of absorbing  much of the cost,  ordinarily  paid by the borrower,  to originate
certain loan products.

                                       14
<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, 2003 in the ability of the Company and its  subsidiaries to fund their
operations.

At March 31, 2003,  the Company had  commitments  outstanding  under  letters of
credit of $0.9 million,  commitments to originate  loans of $18.5  million,  and
commitments  to fund  undisbursed  balances of closed  loans and unused lines of
credit of $29.9  million.  There has been no material  change during the quarter
ended March 31, 2003 in any of the Company's  other  contractual  obligations or
commitments to make future payments.

Capital Requirements

The Bank is in compliance  with all of its capital  requirements as of March 31,
2003.



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, 2003.


CONTROLS AND PROCEDURES

Disclosure Controls and Procedures

The Chief  Executive  Officer and the Chief Financial  Officer (the  "Certifying
Officers") have evaluated the effectiveness of the Company's disclosure controls
and  procedures  as of a date  within 90 days prior to the  filing  date of this
report  and have  concluded  that such  controls  and  procedures  ensured  that
material  information was made known to them,  particularly during the period in
which this report was being prepared.

Internal Controls

The   Certifying   Officers  have  concluded  that  there  were  no  significant
deficiencies  in the  design or  operation  of  internal  controls  which  could
adversely affect the Company's ability to record, process,  summarize and report
financial data; nor have there been any significant changes in internal controls
or in other factors that could significantly affect internal controls subsequent
to the date of their evaluation, including any corrective actions with regard to
significant deficiencies and material weaknesses.

                                       15
<PAGE>

NEW ACCOUNTING PRONOUNCEMENTS

In  January  2003 the FASB  issued FIN Number  46,  "Consolidation  of  Variable
Interest Entities." This Interpretation of ARB No. 51,  "Consolidated  Financial
Statements,"  was issued to  address  perceived  weaknesses  in  accounting  for
entities commonly known as special-purpose or  off-balance-sheet  entities,  but
the  guidance  applies  to a larger  population  of  entities.  FIN 46  provides
guidance  for  identifying  the  party  with a  controlling  financial  interest
resulting  from  arrangements  or  financial  interests  rather than from voting
interests. FIN 46 defines the term "variable interest entity" (VIE) and is based
on the  premise  that  if a  business  enterprise  has a  controlling  financial
interest in a VIE, the assets, liabilities, and results of the activities of the
VIE should be included in the consolidated  financial statements of the business
enterprise.  An enterprise that consolidates a VIE is the primary beneficiary of
the VIE. The primary beneficiary is the party whose variable interest(s) absorbs
a majority of the entity's expected losses,  receives a majority of its expected
residual returns,  or both. FIN 46 requires the primary beneficiary of a VIE, as
well as other enterprises that hold a significant variable interest in a VIE, to
provide certain financial statement  disclosures.  Some disclosures are required
in all  financial  statements  issued after January 31, 2003 if it is reasonably
possible that an enterprise will consolidate or disclose information about a VIE
when FIN 46 becomes effective.  FIN 46 applies immediately to VIEs created after
January 31, 2003 and to VIEs in which an  enterprise  obtains an interest  after
that date. For variable  interests in VIEs created before  February 1, 2003, FIN
46  applies  to public  enterprises  no later  than the  beginning  of the first
interim or annual  period  beginning  after June 15,  2003.  The adoption of the
provisions of FIN 46 by the Company has not and will not have a material  impact
on the Company's financial condition or results of operations.

On April  30,  2003 the  Financial  Accounting  Standards  Board  (FASB)  issued
Statement  No. 149,  Amendment of Statement 133 on  Derivative  Instruments  and
Hedging Activities. The Statement amends and clarifies accounting for derivative
instruments,   including  certain  derivative   instruments  embedded  in  other
contracts,  and for hedging  activities  under  Statement  133. The new guidance
amends   Statement  133  for  decisions   made:  as  part  of  the   Derivatives
Implementation  Group process that effectively  required amendments to Statement
133, in connection with other Board projects dealing with financial instruments,
and regarding implementation issues raised in relation to the application of the
definition   of  a  derivative,   particularly   regarding  the  meaning  of  an
"underlying"  and the  characteristics  of a derivative that contains  financing
components. This Statement clarifies under what circumstances a contract with an
initial net investment meets the  characteristic of a derivative as discussed in
Statement 133. In addition,  it clarifies when a derivative contains a financing
component  that  warrants  special  reporting  in the  statement  of cash flows.
Statement 149 amends  certain other existing  pronouncements.  This Statement is
effective for contracts  entered into or modified after June 30, 2003, except as
stated below and for hedging  relationships  designated after June 30, 2003. The
guidance should be applied prospectively.  The provisions of this Statement that
relate to  Statement  133  Implementation  Issues that have been  effective  for
fiscal quarters that began prior to June 15, 2003, should continue to be applied
in  accordance  with their  respective  effective  dates.  In addition,  certain
provisions  relating to forward purchases or sales of when-issued  securities or
other securities that do not yet exist,  should be applied to existing contracts
as well as new  contracts  entered  into after  June 30,  2003.  The  Company is
presently  evaluating  this new standard but does not expect the adoptionof SFAS
No.  149 to have a  material  effect on the  Company's  financial  condition  or
results of operations.

                                       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

The Annual Meeting of  Stockholders  (the  "Meeting") of the Company was held on
April 23,  2003.  There were  outstanding  and  entitled  to vote at the Meeting
2,728,145  shares of Common  Stock of the  Company.  There  were  present at the
meeting or by proxy the holders of 2,385,508 shares of Common Stock representing
87.44%  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, 2003 fiscal  year.  The result of the
voting at the Meeting is as follows (percentages in terms of votes cast):

      Proposal 1
      Carl F. Gregory                       FOR: 2,370,334   PERCENT FOR: 99.37%
      Robert N. Dusek                       FOR: 2,360,013   PERCENT FOR: 98.93%

      Proposal 2
      Ratification of the appointment of
        Grant Thornton, LLP as independent
        auditor for the Company for the
        December 31, 2003 fiscal year       FOR: 2,371,798   PERCENT FOR: 99.43%

ITEM 5.    OTHER INFORMATION
           None

ITEM 6.    EXHIBITS AND REPORTS ON FORM 8-K
           (a) Exhibits
               99.1  Certification pursuant to 18 U.S.C.ss.1350, as adopted
                     pursuant to Section 906 of the Sarbanes-Oxley Act of 2002
           (b) Reports on Form 8-K
                     On April 24, 2003 the Company filed a Form 8-K wherein the
                     Company included the press release announcing the Company's
                     earnings for the first quarter of 2003.

                                       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:      May 9, 2003                John R. Stranford
    -----------------------           President and CEO
                                     (Principal Executive Officer)


                                      /s/ Dennis R. Stewart
                                      ---------------------
Date:      May 9, 2003                Dennis R. Stewart
     ----------------------           Senior Vice President and
                                      Chief Financial Officer
                                      (Principal Financial & Accounting Officer)


                                       18
<PAGE>

                            CERTIFICATION PURSUANT TO
                  SECTION 302 OF THE SARBANES-OXLEY ACT OF 2002

I, John R. Stranford, President and Chief Executive Officer, certify that:

1.  I  have  reviewed  this  quarterly  report  on  Form  10-Q  of TF  Financial
Corporation (Registrant);

2. Based on my  knowledge,  this  quarterly  report  does not contain any untrue
statement of a material fact or omit to state a material fact  necessary to make
the statements made, in light of the  circumstances  under which such statements
were made, not  misleading  with respect to the period covered by this quarterly
report;

3.  Based  on my  knowledge,  the  financial  statements,  and  other  financial
information  included in this quarterly  report,  fairly present in all material
respects the financial  condition,  results of operations  and cash flows of the
Registrant as of, and for, the periods presented in this quarterly report;

4.  The  Registrant's  other  certifying  officer  and  I  are  responsible  for
establishing and maintaining  disclosure  controls and procedures (as defined in
Exchange Act Rules 13a-14 and 15d-14) for the Registrant and we have:

a) designed  such  disclosure  controls and  procedures  to ensure that material
information relating to the Registrant, including its consolidated subsidiaries,
is made known to us by others  within those  entities,  particularly  during the
period in which this quarterly report is being prepared;

b) evaluated  the  effectiveness  of the  Registrant's  disclosure  controls and
procedures  as of a date  within  90  days  prior  to the  filing  date  of this
quarterly report (the "Evaluation Date"); and

c) presented in this quarterly report our conclusions about the effectiveness of
the  disclosure  controls  and  procedures  based  on our  evaluation  as of the
Evaluation Date;

5. The registrant's other certifying officer and I have disclosed,  based on our
most recent evaluation,  to the Registrant's auditors and the audit committee of
Registrant's board of directors (or persons performing the equivalent function):

a) all significant  deficiencies in the design or operation of internal controls
which  could  adversely  affect the  Registrant's  ability  to record,  process,
summarize and report  financial data and have  identified  for the  Registrant's
auditors any material weaknesses in internal controls; and

b) any  fraud,  whether  or not  material,  that  involves  management  or other
employees who have a significant role in the Registrant's internal controls; and

6. The  Registrant's  other  certifying  officer  and I have  indicated  in this
quarterly  report  whether or not there  were  significant  changes in  internal
controls or in other factors that could  significantly  affect internal controls
subsequent to the date of our most recent  evaluation,  including any corrective
actions with regard to significant deficiencies and material weaknesses.

                                           /s/ John R. Stranford
                                           ---------------------
Date:      May 9, 2003                     John R. Stranford
    ----------------------                 President and Chief Executive Officer
                                           (Principal Executive Officer)


                                       19
<PAGE>

                            CERTIFICATION PURSUANT TO
                  SECTION 302 OF THE SARBANES-OXLEY ACT OF 2002

I, Dennis R. Stewart, Senior Vice President and Chief Financial Officer, certify
that:

1.  I  have  reviewed  this  quarterly  report  on  Form  10-Q  of TF  Financial
Corporation (Registrant);

2. Based on my  knowledge,  this  quarterly  report  does not contain any untrue
statement of a material fact or omit to state a material fact  necessary to make
the statements made, in light of the  circumstances  under which such statements
were made, not  misleading  with respect to the period covered by this quarterly
report;

3.  Based  on my  knowledge,  the  financial  statements,  and  other  financial
information  included in this quarterly  report,  fairly present in all material
respects the financial  condition,  results of operations  and cash flows of the
Registrant as of, and for, the periods presented in this quarterly report;

4.  The  Registrant's  other  certifying  officer  and  I  are  responsible  for
establishing and maintaining  disclosure  controls and procedures (as defined in
Exchange Act Rules 13a-14 and 15d-14) for the Registrant and we have:

a) designed  such  disclosure  controls and  procedures  to ensure that material
information relating to the Registrant, including its consolidated subsidiaries,
is made known to us by others  within those  entities,  particularly  during the
period in which this quarterly report is being prepared;

b) evaluated  the  effectiveness  of the  Registrant's  disclosure  controls and
procedures  as of a date  within  90  days  prior  to the  filing  date  of this
quarterly  report (the  "Evaluation  Date");  and

c) presented in this quarterly report our conclusions about the effectiveness of
the  disclosure  controls  and  procedures  based  on our  evaluation  as of the
Evaluation Date;

5. The registrant's other certifying officer and I have disclosed,  based on our
most recent evaluation,  to the Registrant's auditors and the audit committee of
Registrant's board of directors (or persons performing the equivalent function):

a) all significant  deficiencies in the design or operation of internal controls
which  could  adversely  affect the  Registrant's  ability  to record,  process,
summarize and report  financial data and have  identified  for the  Registrant's
auditors any material weaknesses in internal controls; and

b) any  fraud,  whether  or not  material,  that  involves  management  or other
employees who have a significant role in the Registrant's internal controls; and

6. The  Registrant's  other  certifying  officer  and I have  indicated  in this
quarterly  report  whether or not there  were  significant  changes in  internal
controls or in other factors that could  significantly  affect internal controls
subsequent to the date of our most recent  evaluation,  including any corrective
actions with regard to significant  deficiencies  and material  weaknesses.

                                      /s/ Dennis R. Stewart
                                      ---------------------
Date:      May 9, 2003                Dennis R. Stewart
    ----------------------            Senior Vice President and
                                      Chief Financial Officer
                                      (Principal Financial & Accounting Officer)


                                       20