As filed with the Securities and Exchange Commission on July 31, 1996.
                                                Registration No. 333-_______

                       SECURITIES AND EXCHANGE COMMISSION
                             Washington, D.C. 20549

                                    FORM S-8
                             REGISTRATION STATEMENT
                                      UNDER
                           THE SECURITIES ACT OF 1933

                       ----------------------------------

                            TF Financial Corporation
             ------------------------------------------------------      
             (Exact name of registrant as specified in its charter)

          Delaware                                        74-2705050
- -------------------------------                       -------------------
(State or other jurisdiction of                       (I.R.S. Employer
incorporation or organization)                        Identification No.)

                                  3 Penns Trail
                           Newtown, Pennsylvania 18940
                                 (215) 579-4000
                    (Address of principal executive offices)

                            TF Financial Corporation
                        1996 Directors Stock Option Plan
                            ------------------------
                            (Full Title of the Plan)

                               Richard Fisch, Esq.
                      Malizia, Spidi, Sloane & Fisch, P.C.
                               1301 K Street, N.W.
                                 Suite 700 East
                             Washington, D.C. 20005
                                 (202) 434-4660
            (Name, address and telephone number of agent for service)

                           --------------------------
                         CALCULATION OF REGISTRATION FEE
<TABLE>
<CAPTION>

=======================================================================================
Title of                            Proposed Max-    Proposed Max-     Amount of
Securities to     Amount to         imum Offering    imum Aggregate    Registration
be Registered     be Registered     Price Per Unit   Offering Price(2) Fee (2)(3)(4)
- -------------     -------------     --------------   ----------------- -------------
Common Stock
<C>                <C>              <C>              <C>               <C>    
$.10 par value     25,000(1)        $14.75(2)        $368,750          $200.00
=======================================================================================
</TABLE>

(1)   The maximum  number of shares of common stock  issuable  upon  exercise of
      options granted or to be granted under the TF Financial  Corporation  1996
      Directors  Stock  Option Plan  consists of 25,000  shares  which are being
      registered under this Registration  Statement and for which a registration
      fee is being paid.

(2)   Under Rule 457(h) of the 1933 Act, the registration fee may be calculated,
      inter  alia,  based  upon the  price at which  the  stock  options  may be
      exercised.  An aggregate of 25,000 shares are being registered  hereby, of
      which 25,000  shares are under  option at an exercise  price of $14.75 per
      share ($368,750 in the aggregate).

(3)   Represents the $200 minimum filing fee.

(4)   Under Rule 462 of the 1933 Act, the Registration Statement  on  Form  S-8
      shall be effective upon filing with the Commission.



<PAGE>




** THIS DOCUMENT CONSTITUTES THE PROSPECTUS COVERING SECURITIES THAT HAVE
BEEN REGISTERED UNDER THE SECURITIES ACT OF 1933.**

PROSPECTUS

                                  25,000 Shares

                                  -------------

                            TF FINANCIAL CORPORATION
                                  COMMON STOCK
                           (Par Value $.10 Per Share)

                                  -------------

                            TF FINANCIAL CORPORATION
                        1996 DIRECTORS STOCK OPTION PLAN

                                  -------------

      This Prospectus  relates to 25,000 shares of common stock,  par value $.10
per share (the "Common Stock"), of TF Financial  Corporation (the "Company"),  a
Delaware  corporation  which is the  savings and loan  holding  company of Third
Federal Savings Bank (the "Savings Bank"), which may be issued from time to time
by the Company to holders of Options  granted or to be granted by the Company to
directors of the Company and any  subsidiary  of the Company  pursuant to the TF
Financial Corporation 1996 Directors Stock Option Plan (the "Plan").  Holders of
options  granted or to be granted under the Plan (the "Options") are referred to
herein  as  "Optionees."  Each  offer  made  under  the  Plan  pursuant  to this
Prospectus is made at the price and on the terms and conditions contained in the
stock option agreements entered into between the Company and each Optionee.

      This Prospectus is for use as of the date hereof and in subsequent  years.
Information  which is  likely to change  from year to year will be  included  in
appendices to this Prospectus.

      The issued and  outstanding  Common  Stock of the Company is traded in the
over-the-counter  market,  and  transactions are reported on the Nasdaq National
Market under the symbol "THRD".  Shares of Common Stock which may be issued upon
exercise of Options granted or to be granted under the Plan, will also be traded
in  over-the-counter  market. On July 26, 1996, the last reported sales price of
the Common Stock in the National Market System was $14.00 per share.

- --------------------------------------------------------------------------------
THESE  SECURITIES  HAVE NOT BEEN APPROVED OR  DISAPPROVED  BY THE SECURITIES AND
EXCHANGE COMMISSION, NOR HAS THE COMMISSION PASSED UPON THE ACCURACY OR ADEQUACY
OF THIS PROSPECTUS. ANY REPRESENTATION TO THE CONTRARY IS A CRIMINAL OFFENSE.
- --------------------------------------------------------------------------------

                 The date of this Prospectus is July 31, 1996


<PAGE>



      No  person  has been  authorized  to give any  information  or to make any
representation  not contained in this  Prospectus,  and, if given or made,  such
information or representation  must not be relied upon as having been authorized
by the  Company.  This  Prospectus  does  not  constitute  an offer to sell or a
solicitation  of an offer to buy any  securities  other  than the  Common  Stock
offered by this  Prospectus or an offer to sell or a solicitation of an offer to
buy such Common Stock in any  jurisdiction  to any person to whom it is unlawful
to make such offer or solicitation in such jurisdiction. Neither the delivery of
this  Prospectus nor any sale made  hereunder  shall,  under any  circumstances,
create  any  implication  that  there has been no change in the  affairs  of the
Company  or that the  information  contained  herein is  correct  as of any time
subsequent to the date hereof.


<PAGE>



                               TABLE OF CONTENTS

                           TF Financial Corporation
                       1996 Directors Stock Option Plan

                                                                     Page
                                                                     ----

General Plan Information....................................         1

Administration..............................................         1

Purpose.....................................................         2

Securities to be Offered....................................         2

Eligibility to Participate in Plan..........................         2

Purchases of Securities Pursuant to the Plan
 and Payment for Securities Offered.........................         2

  Grant of Options..........................................         2
  Term of the Plan..........................................         3
  Stock Option Agreements...................................         3
  Option Price..............................................         3
  Option Period.............................................         3
  Non-transferability.......................................         3
  Conditions of Exercise....................................         4
  Payment for Options.......................................         4
  Cashless Exercise.........................................         4
  Issuance of Common Stock..................................         4
  Dividend Equivalent Rights................................         4

Recapitalization, Merger, Consolidation, Change in
 Control and Similar Transactions...........................         5

Amendment and Termination of the Plan.......................         5

Restrictions on Resale......................................         6

Federal Income Tax Consequences.............................         6

Annual Report to Shareholders...............................         7

Additional Information......................................         7

Legal Opinion...............................................         7

Appendix A..................................................       A-1
  Administration............................................       A-1
  Number of Shares Subject to Plan..........................       A-1
  Participation in the Plan.................................       A-1
  Outstanding Awards........................................       A-1


<PAGE>



                           TF Financial Corporation
                       1996 Directors Stock Option Plan

General Plan Information
- ------------------------

      This  Prospectus  relates to 25,000 shares of the Common Stock,  par value
$.10 per share,  of TF  Financial  Corporation  (the  "Company"),  which will be
offered upon  exercise of options  granted or to be granted  under the Company's
1996 Directors Stock Option Plan (the "Plan").

      The  Company was formed  under the laws of the State of  Delaware  for the
purpose of  becoming a savings  and loan  holding  company and became the parent
corporation of Third Federal Savings Bank (the "Savings Bank") on July 13, 1994,
(the "Effective  Date") at which time the Company  acquired all of the shares of
capital stock of the Savings Bank. The Board of Directors of the Company adopted
the Plan at its meeting on May 21, 1996. The Plan is to continue in effect for a
period of ten years from the Effective Date (i.e., May 20, 2006), unless earlier
terminated or extended by the Company.

      Pursuant to the Plan,  25,000  shares of Common  Stock were  reserved  for
issuance by the Company upon  exercise of Stock Options  ("Options")  awarded to
directors of the Company and the Bank.  Options  granted under the Plan will not
be  Incentive  Stock  Options  within the  meaning  of  Section  422 of the Code
("Non-Incentive Stock Option").

      Upon  exercise of a  Non-Incentive  Stock Option,  the Optionee  generally
recognizes  ordinary  income to the extent that the exercise  price is less than
the fair market value of the Common  Stock on the date of exercise.  The Company
is entitled to a federal  income tax  deduction  equal to the amount of ordinary
income  recognized by the Optionee at the time of such income  recognition.  See
"Federal Income Tax Consequences."

      The Plan will not be qualified  under Section 401(a) of the Code and it is
exempt from the  provisions of the Employee  Retirement  Income  Security Act of
1974, as amended.

      The statements  herein concerning the terms and provisions of the Plan are
summaries and do not purport to be complete.  All such  statements are qualified
in their entirety by reference to the full text of the Plan document as filed as
Exhibit 4.1 to the Registration Statement of which this Prospectus is a part.

      Additional updating and other information with respect to the Plan and the
Common Stock offered  hereby may be provided in the future to holders of Options
by means of one or more supplements or appendices to this Prospectus. Additional
information about the Plan (including a copy of the Plan), plan  administration,
and the Company may be obtained at the Company's  principal  offices,  which are
located at 3 Penns Trail,  Newtown,  Pennsylvania 18940. The Company's telephone
number is (215) 579-4000.

Administration
- --------------

      The  Plan  is  administered  by a  Committee  of the  Company's  Board  of
Directors (the  "Committee").  The Plan provides that the Committee will consist
of at least three  non-employee  directors  of the  Company.  The members of the
Committee are  appointed by the Board and serve at the pleasure of the Board.  A
majority of the entire Committee shall constitute a quorum,  and the action of a
majority

                                      1


<PAGE>



of the  members  present at any  meeting  at which a quorum is present  shall be
deemed the action of the Committee.

      Subject to the express  provisions of the Plan and resolutions  adopted by
the Board,  the  Committee  has  authority to interpret  the Plan, to prescribe,
amend,  and  rescind  the rules and  regulations  relating  to the Plan,  and to
determine  the form and  content  of  Options  to be issued  under the Plan.  In
addition,  the Committee is authorized to make all other  determinations  deemed
necessary or advisable for the administration of the Plan and shall have and may
exercise  such other power and such  authority  as may be delegated to it by the
Board from time to time. All decisions,  determinations,  and interpretations of
the Committee shall be final and conclusive to all persons affected thereby.

      Additional  information  about the Plan and the  Committee may be obtained
from the  Company at the address of the Company as listed  under  "General  Plan
Information."  For  a  list  of  the  current  members  of  the  Committee,  see
"Administration" at Appendix A.

Purpose
- -------

      The  purpose of the Plan is to promote  the  interests  of the  Company by
attracting  and  retaining  the  best  available   personnel  for  positions  of
substantial responsibility to serve as directors of the Company and the Bank and
to provide additional  incentive to such directors of the Company to promote the
success and profitability of the Company's business.

Securities to be Offered
- ------------------------

      The  aggregate  number  of  shares  of  Common  Stock  which may be issued
pursuant to Options  granted or to be granted  under the Plan is 25,000  shares,
subject to certain  adjustments  for  changes in the  capital  structure  of the
Company,  as described  below.  See  "Recapitalization,  Merger,  Consolidation,
Change in Control and  Similar  Transactions."  Any shares  subject to an Option
award under the Plan which expire or are  terminated  unexercised  will again be
available for issuance under the Plan.

Eligibility to Participate in Plan
- ----------------------------------

      Options  to  purchase  Common  Stock  under  the  Plan may be  awarded  to
directors of the Company,  the Savings Bank, and any present or future parent or
subsidiary corporations.

Purchases of Securities Pursuant to the Plan and Payment for Securities Offered
- -------------------------------------------------------------------------------

Grant of Options
- ----------------

      Non-Incentive  Stock  Options  will be granted to eleven  directors of the
Company  or the  Bank  who  are not  employees  as of the  Effective  Date at an
exercise  price equal to the fair market  value of the Common Stock on such date
of grant. The Options will be immediately exercisable.  Such Options will remain
exercisable  for up to ten (10) years from such date of grant without  regard to
continued  service as a  director.  In the event of such  person's  death,  such
Options may be exercised by the personal  representative of his estate or person
or persons to whom his rights under such Options shall have passed by will or by
laws of descent and distribution.  Options awarded shall provide for the payment
of cash amounts  upon the payment of a cash  dividend on the Common  Stock.  The
holder of such Options shall receive payment of cash in an amount  equivalent to
the cash dividend payable as if Options awarded

                                      2


<PAGE>



herein had been  exercised  and such Common  Stock held.  Such rights to receive
such cash shall  expire  upon the  expiration  or  exercise  of such  underlying
Options. Such rights are non-transferable and shall attach to Options whether or
not such Options are immediately exercisable.

      For  a  description  of  the  number  of  persons  currently  eligible  to
participate in the Plan and the number of persons actually  participating in the
Plan, see "Participation in the Plan" at Appendix A.

      Term of the  Plan.  The  Plan  was  effective  May 21,  1996,  and  unless
previously  terminated,  the Plan  shall  continue  in effect  for a term of ten
years,  after which no further awards may be granted.  The future  expiration of
the Plan, or its termination by the Board, will not affect any Option previously
granted.

      Stock Option Agreements.  The Options granted under the Plan are evidenced
by stock option agreements (the "Option  Agreements")  substantially in the form
of the Option  Agreements  filed as exhibits to the  Registration  Statement  of
which this  Prospectus  is a part.  Each  Option  Agreement,  and any  amendment
thereto, will contain such terms and conditions consistent with the requirements
of the Plan as the  Committee  shall  determine.  Such Option  Agreements  shall
constitute the only form of reports which  participants shall receive related to
the status of Options granted or which are exercisable under the Plan.

      The Plan provides that the Board of Directors of the Company may authorize
the  Committee  to direct  the  execution  of an  instrument  providing  for the
modification  of any  outstanding  Option,  provided that no such  modification,
extension or renewal shall confer on the Option  recipient (the  "Optionee") any
rights or benefit  which could not be  conferred by the grant of a new Option at
such time, and shall not materially  decrease the Optionee's  benefits under the
Option  without the Optionee's  consent,  except as provided under Section 14 of
the  Plan,  which  permits   modification  of  the  Plan.  (See  "Amendment  and
Termination of the Plan" below.)

      Option Price.  The exercise price for the purchase of shares subject to an
Option  shall be equal to 100  percent  of the fair  market  value of the shares
covered by the Option on that date.  The exercise  price of Options must be paid
for in full in cash or shares of Common Stock, or a combination of both.

      Notwithstanding  anything herein to the contrary, the Committee shall have
the  authority to cancel  outstanding  Options  granted  under the Plan with the
consent of the  Optionee  and to reissue new Options at a lower  exercise  price
equal to the then Fair Market  Value per share of Common Stock in the event that
the Fair Market Value per share of Common Stock at any time prior to the date of
exercise of outstanding Options falls below the exercise price of such Options.

      Option Period.  The term of  exercisability of an Option granted under the
Plan  shall be for a period of ten years  from the Date of  Grant.  In  general,
Options will not be exercisable  after the expiration of their term as set forth
in the Plan or the Option Agreement.

      A total of six months must  elapse  between the date of grant of an Option
and the date of the sale of Common Stock  received  through the exercise of such
Option.

     Non-transferability. No Option granted under the Plan is transferable other
than by will or the laws of descent and distribution.

                                      3


<PAGE>



      Conditions of Exercise.  Options may be exercised  only during the periods
specified in the Plan or the Option Agreement,  certain  information as to which
is provided above (see "Option Period"). Except as described above and as may be
limited by agreement, there is no limitation upon the number of Options that may
be exercised in any one year,  and Options not  exercised in any one year may be
exercised in subsequent years over the term of the Option.

      Payment for Options. Under the Plan, full payment for each share of Common
Stock  purchased  upon the exercise of any Option  granted  shall be made at the
time of exercise of each such Option and shall be paid in cash (in United States
dollars),  Common Stock, or a combination of cash and Common Stock. Common Stock
utilized in full or partial payment of the exercise price shall be valued at its
fair market  value at the date of  exercise.  The Company  shall  accept full or
partial payment in Common Stock only to the extent  permitted by applicable law.
No shares of Common Stock shall be issued until full payment  therefore has been
received  by the  Company,  and no  Optionee  shall  have any of the rights of a
shareholder of the Company until the shares of Common Stock are issued to him.

      Cashless  Exercise.  An  Optionee  who has held an Option for at least six
months  may  engage in the  "cashless  exercise"  of the  Option.  In a cashless
exercise,  an Optionee  gives the Company  written notice of the exercise of the
Option together with an order to a registered  broker-dealer or equivalent third
party,  to sell part or all of the Optioned  Stock and to deliver  enough of the
proceeds to the Company to pay the Option price and any  applicable  withholding
taxes.  If the Optionee  does not sell the Optioned  Stock  through a registered
broker-dealer  or equivalent third party, he can give the Company written notice
of the  exercise of the Option and the third  party  purchaser  of the  Optioned
Stock shall pay the Option price plus any  applicable  withholding  taxes to the
Company.

      Issuance of Common  Stock.  Shares  issued to Optionees  upon  exercise of
Options  shall be either newly issued  shares of the Company or treasury  shares
purchased  in the market,  at the  Company's  discretion.  In either  case,  the
Optionee  shall not pay any fees,  commissions  or other charges for such Common
Stock  other than the  exercise  price as stated in the Option  Agreement.  Cash
proceeds  from the sale of Common  Stock  issued  pursuant  to the  exercise  of
Options will be added to the general funds of the Company to be used for general
corporate  purposes.  Shares of Common Stock shall not be issued with respect to
any Option  granted  under the Plan  unless the  issuance  and  delivery of such
Common  Stock  shall  comply with all  relevant  provisions  of law,  including,
without  limitation,  the  Securities  Act of 1933,  as  amended,  the rules and
regulations promulgated thereunder, any applicable state securities law, and the
requirements  of any stock  exchange  upon  which the  Common  Stock may then be
listed.

      Inability of the Company to obtain  approval from any  regulatory  body or
authority  deemed by the  Company or counsel  thereto  to be  necessary  for the
lawful issuance and sale of any Common Stock hereunder shall relieve the Company
of any liability in respect of the non-issuance or sale of such Common Stock. As
a condition  to the  exercise  of an Option,  the Company may require the person
exercising  the Option to make such  representations  and  warranties  as may be
necessary  to  assure  the  availability  of an  exemption  from any  additional
registration requirements of federal or state securities laws.

      Dividend  Equivalent  Rights:  Options  awarded under the Plan provide the
right of the optionee to receive dividend  equivalent rights.  Such rights shall
provide that upon the payment of a cash dividend on the Common Stock, the holder
of such Options  shall  receive  payment of cash in an amount  equivalent to the
cash  dividend  payable as if such  Options had been  exercised  and such Common
Stock held.  Such rights  shall expire upon the  expiration  or exercise of such
underlying Options. Such rights are non-

                                      4


<PAGE>



transferable  and shall  attach  to  Options  whether  or not such  Options  are
immediately exercisable. All options granted to directors in accordance with the
schedule of awards  contained in the Plan shall have  associated  with them such
dividend equivalent rights.

Recapitalization,   Merger,  Consolidation,   Change  in  Control,  and  Similar
- --------------------------------------------------------------------------------
Transactions
- ------------

      Subject to any required action by the shareholders of the Company,  within
the sole discretion of the Committee,  the aggregate  number of shares of Common
Stock for which Options may be granted  under the Plan,  the number of shares of
Common Stock covered by each outstanding Option and the exercise price per share
of  Common  Stock of each  Option  shall  be  proportionately  adjusted  for any
increase or decrease  in the number of issued and  outstanding  shares of Common
Stock resulting from a subdivision or  consolidation of shares or the payment of
a stock  dividend on the Common  Stock or any other  increase or decrease in the
number  of  such  shares  of  Common  Stock   effected   without  a  receipt  of
consideration   by  the  Company  (other  than  by  shares  held  by  dissenting
stockholders).

      In  the  event  of  any  change  in  control,  recapitalization,   merger,
consolidation,  exchange  of shares,  spin-off,  reorganization,  tender  offer,
partial or complete  liquidation,  or other extraordinary  corporate action, the
Committee, in its sole discretion,  shall have the power, prior to or subsequent
to such action or events,  to (i)  appropriately  adjust the number of shares of
Common  Stock  subject to each Option,  the  exercise  price per share of Common
Stock,  and the  consideration  to be given or received by the Company  upon the
exercise of any outstanding  Options;  (ii) cancel any or all previously granted
Options,  providing that  appropriate  consideration  is paid to the Optionee in
connection  therewith;  and/or (iii) make such other  adjustments  in connection
with  the  Plan as the  Committee,  in its  sole  discretion,  deems  necessary,
desirable, appropriate, or advisable.

      The Committee  has at all times the power to accelerate  the exercise date
of all Options  granted  under the Plan. In the case of any change in control of
the Company as determined by the Committee, all outstanding options shall become
immediately exercisable.  A change in control is defined to include (i) the sale
of all, or a material portion, of the assets of the Company;  (ii) the merger or
recapitalization of the Company whereby the Company is not the surviving entity;
(iii) a change of control of the Company as  otherwise  defined by the Office of
Thrift  Supervision  ("OTS")  or its  regulations;  and  (iv)  the  acquisition,
directly  or  indirectly,  of the  beneficial  ownership  (within the meaning of
Section 13(d) of the Securities  Exchange Act of 1934 and rules and  regulations
promulgated  thereunder) of 25% or more of the outstanding  voting securities of
the Company by any person,  trust,  entity or group.  This limitation  shall not
apply to a  transaction  in which the  purchase  of shares  by  underwriters  in
connection  with a public offering of Common Stock, or the purchase of shares of
up to 25% of any class of securities of the Company by a tax-qualified  employee
stock benefit plan. The determination of the Committee as to whether a change in
control has occurred shall be conclusive and binding.

Amendment and Termination of the Plan
- -------------------------------------

      The Board of Directors may alter, suspend, or discontinue the Plan, except
that no action of the Board may increase the maximum number of shares  permitted
to be optioned  under the Plan.  The Plan shall continue in effect for a term of
ten years from the Effective Date, after which no future awards may be granted.

                                      5


<PAGE>



Restrictions on Resale
- ----------------------

      Unless specifically  included as a term and condition of any Option, there
are no  restrictions on the resale of Common Stock acquired upon the exercise of
Options.  Such shares of Common Stock, however, may be resold only in compliance
with the  registration  requirements  of the  Securities Act of 1933, as amended
(the "1933 Act"), and applicable state securities laws.

      Under the 1933 Act,  affiliates of the Company generally may resell shares
of Common Stock  purchased  pursuant to the Plan only (i) in accordance with the
provisions  of Rule 144 under the 1933 Act, or (ii)  pursuant  to an  applicable
current and effective registration statement under the 1933 Act.

      As defined in Rule 405 under the 1933 Act, an  affiliate of the Company is
a  person  who  directly,  or  indirectly  through  one or more  intermediaries,
controls,  or is controlled by, or is under common control with the Company. The
determination  of whether a person is an affiliate of the Company is primarily a
factual  one  based  upon  whether  he   possesses,   directly  or   indirectly,
individually  or in  concert  with  others,  the  power to  direct  or cause the
direction  of the  management  or policies of the Company,  whether  through the
ownership of voting stock, by executive position, by membership on the Board, by
contract or  otherwise.  Therefore,  each  Optionee  should  consult his counsel
concerning  whether  he is  an  affiliate  of  the  Company  and  the  attendant
restrictions on the resale under the 1933 Act of Common Stock acquired  pursuant
to the Plan.

      In  addition,  the  receipt  of an Option to  purchase  Common  Stock by a
director of the Company is a reportable transaction under Section 16 of the 1934
Act,  and Forms 3, 4, or 5 are  required  to be filed  with the  Securities  and
Exchange Commission in connection with such transaction.  The sale by a director
of Common Stock issued upon an exercise of an Option within six months after the
receipt of such Option may create liability of such persons to the Company under
the "short-swing  profit"  provisions of Section 16(b) of the 1934 Act. For this
reason,  the Plan  contains a  provision  that a total of six month must  elapse
between  the date of the grant of an  Option  and the date of the sale of Common
Stock received through the exercise of an Option.

Federal Income Tax Consequences
- -------------------------------

      Under  present  federal  tax  laws,  awards  under  the Plan will have the
following consequences:

      1.The grant of an Option will not by itself result in the  recognition  of
        taxable income to the Optionee nor entitle the Company to a deduction at
        the time of such grant.

      2.The  exercise  of a  Non-Incentive  Stock  Option  will  result  in  the
        recognition  of ordinary  income by the Optionee on the date of exercise
        in an amount equal to the difference  between the exercise price and the
        fair  market  value  on the  date of  exercise  of the  shares  acquired
        pursuant to the Option.

      3.Receipt of income as a result of Dividend  Equivalent  Rights  held  by
        an Optionee will be taxable as ordinary income when received.

      4.The Company  will be allowed a tax  deduction  for Federal tax  purposes
        equal to the amount of ordinary income  recognized by an Optionee at the
        time the Optionee recognizes such ordinary income under an Non-Incentive
        Stock Option .

                                      6


<PAGE>




      The  foregoing  provides  a general  summary  of the  federal  income  tax
consequences  applicable  to Options  under the Plan.  Each Optionee is urged to
consult his or her own tax advisor for information  regarding applicable federal
and state tax consequences.

Annual Report to Shareholders
- -----------------------------

      The Company's financial statements for the period ended December 31, 1995,
as contained in the  Company's  Form 10-K are  incorporated  by reference in the
Registration  Statement to which this  Prospectus is a part. In the future,  the
Company's latest Annual Report to Stockholders,  including financial statements,
will be mailed to all stockholders of record as of the close of business on such
record  date.  Any person  wishing to receive a copy of such  Annual  Report may
obtain a copy by  writing  the  Company at the  address  set forth  above  under
"Additional Information."

Additional Information
- ----------------------

      Additional  updating  information with respect to the Common Stock and the
Plan covered herein may be provided in the future to participants under the Plan
by means of  appendices  to this  Prospectus.  The nature and  frequency  of any
reports to be made to participants as to their participation in the Plan will be
determined by the Committee.

      The Company upon written or oral request,  will provide  without charge to
any person to whom this  Prospectus is delivered:  a copy of the Plan, a copy of
its latest Annual Report to Stockholders  (when available) and a copy of any and
all of the documents that have been  incorporated by reference in Item 3 of Part
II of the  Registration  Statement of which this  Prospectus is a part, and that
such  documents  are deemed  incorporated  by reference in this 1933 Act Section
10(a)  Prospectus.  Further,  other  documents  required to be delivered to Plan
participants as specified in Item 9 of Part II of the Registration Statement are
available upon request. Any such request can be oral or in writing and should be
addressed to the Corporate Secretary,  TF Financial Corporation,  3 Penns Trail,
Newtown,   Pennsylvania  18940.  The  Registrant's  telephone  number  is  (215)
579-4000.

Legal Opinion
- -------------

      The validity of the Common Stock offered hereby has been passed on for the
Company by Malizia,  Spidi, Sloane & Fisch, P.C., 1301 K Street, N.W., Suite 700
East, Washington, D.C. 20005.



                                      7


<PAGE>



                                   APPENDIX A

                        ADDITIONAL INFORMATION CONCERNING
                                       THE
                            TF FINANCIAL CORPORATION
                        1996 DIRECTORS STOCK OPTION PLAN
                              (As of July 31, 1996)

Administration
- --------------

      The Board has appointed Directors Dusek, Olsen, and Gola as members of the
Committee responsible for administration of the 1996 Directors Stock Option Plan
("Plan").

Number of Shares Subject to Plan
- --------------------------------

      On May 21, 1996,  Options  covering 25,000 shares of the Common Stock were
outstanding,  which were granted at an exercise price of $14.75 per share. As of
the date of this Appendix,  25,000 shares of Common Stock remain  issuable under
the Plan,  which  provides  for the  issuance  of Options  for a total of 25,000
shares of Common Stock.

Participation in the Plan
- -------------------------

      As of May 21,  1996,  the  Company  and its  subsidiaries  had 8 directors
eligible  to  participate  in the  Plan.  Of such  persons,  as of May  21,1996,
Non-Incentive  Stock Options to purchase  25,000 shares of Common Stock,  in the
aggregate  were held by 8  non-employee  members  of the  Board of TF  Financial
Corporation or Third Federal Savings Bank.

Outstanding Awards
- ------------------

      The following table presents  information  with respect to the outstanding
Options under the Plan as of the date of this Appendix.

<TABLE>
<CAPTION>
                         Number of Shares Presently  Number of Persons  Exercise Price
Grant Date                  Subject to Options        Holding Awards      Per Share
- ----------               --------------------------  -----------------  --------------

<S>                               <C>                        <C>            <C>   
May 21, 1996                      25,000                     8              $14.75
 
Total Awards Outstanding          25,000                     8              $14.75


</TABLE>

                                    A-1


<PAGE>



                                    PART II

                INFORMATION REQUIRED IN REGISTRATION STATEMENT

Item 3.  Incorporation of Certain Documents by Reference
- --------------------------------------------------------

     The Company is subject to the informational  requirements of the Securities
Exchange Act of 1934 (the "1934 Act") and,  accordingly,  files periodic reports
and  other  information  with  the  Securities  and  Exchange   Commission  (the
"Commission").  Reports, proxy statements,  and other information concerning the
Company  filed with the  Commission  may be inspected and copies may be obtained
(at present rates) at the Commission's Public Reference Section,  Room 1024, 450
Fifth Street, N.W., Washington, DC 20549.

         The following  documents  filed with the  Commission  are  incorporated
by reference in the  Registration  Statement  and  the Prospectus  constituting 
Part I of such Registration Statement:

     (1) The Company's  Registration  Statement on Form S-1 (No. 33-76960) filed
with the Commission on March 28, 1994 and amendments thereto;

     (2) The Company's  Annual Report on Form 10-K filed with the Commission for
the fiscal ended December 31, 1995, as filed with the Commission;

     (3) The  Company's  Quarterly  Report on Form 10-Q for the  quarters  ended
March 31, 1996 and June 30, 1996, as filed with the Commission;

     (4) The Company's  Definitive  Proxy  Statement  related to the 1996 Annual
Meeting of Stockholders as filed with the Commission on;

     (5) The  Company's  Registration  Statement  on Form 8-A as filed  with the
Commission on March 16, 1994;

     (6)  Information  as to the  Options  which will be  included in the future
either in the Company's proxy  statements,  annual reports or appendices to this
Prospectus.

     All documents filed by the Company pursuant to Sections 13, 14, or 15(d) of
the  Securities  Exchange  Act of 1934  after the date  hereof  and prior to the
termination  of the offering of the shares of Common Stock shall be deemed to be
incorporated by reference in this Registration Statement herein and to be a part
hereof from the date of filing of such documents.

Item 4.  Description of Securities.
- ----------------------------------

     Not  applicable  because the  Company's  Common Stock is  registered  under
Section 12 of the 1934 Act.

Item 5.  Interests of Named Experts and Counsel.
- -----------------------------------------------

       Not applicable.

                                     II-1


<PAGE>



Item 6.  Indemnification of Directors and Officers.
- --------------------------------------------------

       Section  145  of  the  Delaware  General  Corporation  Law  authorizes  a
corporation such as the registrant to indemnify officers, directors,  employees,
and agents under certain circumstances.  Section 145 requires indemnification of
directors,  officers,  employees,  and  agents who have been  successful  on the
merits or otherwise in defense of certain actions,  suits,  proceedings  claims,
issues,  and  matters.   Article  XVIII  of  the  registrant's   Certificate  of
Incorporation provides for indemnification.

       Section 102(b)(7) of the Delaware General  Corporation Law allows for the
limitation  of  liability  of  directors.   Article  XVII  of  the  registrant's
Certificate  of  Incorporation  provides  for the  limitation  of  liability  of
directors.

       The registrant  believes that these provisions  assist the registrant in,
among other  things,  attracting  and retaining  qualified  persons to serve the
registrant and its subsidiary.  However, a result of such provisions could be to
increase the expenses of the  registrant and  effectively  reduce the ability of
stockholders  to sue on behalf of the registrant  because certain suits could be
barred or amounts that might  otherwise be obtained on behalf of the  registrant
could be required to be repaid by the registrant to an indemnified party.

       Additionally, the Company has in force a Directors and Officers Liability
Policy  underwritten by CNA with a $5.0 million aggregate limit of liability and
an aggregate  deductible of $100,000 per loss both for claims  directly  against
officers and directors and for claims where the Company is required to indemnify
directors and officers.

       Insofar as indemnification  for liabilities  arising under the Securities
Act of 1933 ("1933  Act") may be permitted to  directors,  officers,  or persons
controlling the Company  pursuant to the foregoing  provisions,  the Company has
been informed that in the opinion of the Securities and Exchange Commission such
indemnification  is against  public  policy as  expressed in the 1933 Act and is
therefore unenforceable.

Item 7.  Exemption from Registration Claimed.
- --------------------------------------------

       Not applicable since no restricted  securities within the meaning of Rule
144 of the Securities  Act of 1933 will be reoffered or resold  pursuant to this
Registration Statement.

Item 8.  Exhibits
- -----------------

       For a list of all exhibits filed or included as part of this Registration
Statement, see "Index to Exhibits" at the end of this Registration Statement.

Item 9.  Undertakings
- ---------------------

       (a)  The undersigned registrant hereby undertakes:

            (1) To file,  during any  period in which  offers or sales are being
            made, a post-effective amendment to this registration statement;

            (i) To  include  any prospectus required by Section 10(a)(3) of the
            Securities Act of 1933;

                                     II-2


<PAGE>



            (ii) To reflect in the  prospectus any facts or events arising after
            the effective date of the registration statement (or the most recent
            post-effective  amendment  thereof)  which,  individually  or in the
            aggregate,  represent a fundamental  change in the  information  set
            forth in the registration statement;

            (iii) To include any material  information  with respect to the plan
            of  distribution  not  previously   disclosed  in  the  registration
            statement  or  any  material  change  to  such  information  in  the
            registration statement;

provided  however,  that paragraphs  (a)(1)(i) and (a)(1)(ii) do no apply if the
registration statement is on Form S-3, Form S-8, and the information required to
be included in a  post-effective  amendment by those  paragraphs is contained in
periodic reports filed by the registrant  pursuant to Section 13 or 15(d) of the
Securities  Exchange  Act of 1934  that are  incorporated  by  reference  in the
registration statement.

            (2) That,  for the purpose of  determining  any liability  under the
Securities Act of 1933, each such post-effective amendment shall be deemed to be
a new registration statement relating to the securities offered therein, and the
offering of such  securities at that time shall be deemed to be the initial bona
fide offering thereof.

            (3)  To  remove  from  registration  by  means  of a  post-effective
amendment  any of the  securities  being  registered  which remain unsold at the
termination of the offering.

            (4) If  the  registrant  is a  foreign  private  issuer,  to  file a
post-effective  amendment to the registration statement to include any financial
statements  required by Rule 3-19 of Regulation  S-X at the start of any delayed
offering or throughout a continuous offering.

       (b) The undersigned  registrant  hereby  undertakes that, for purposes of
determining  any liability  under the Securities Act of 1933, each filing of the
registrant's  annual  report  pursuant to section  13(a) or section 15(d) of the
Securities  Exchange  Act of 1934  (and,  where  applicable,  each  filing of an
employee  benefit  plan's  annual  report  pursuant  to  section  15(d)  of  the
Securities  Exchange  Act of 1934)  that is  incorporated  by  reference  in the
registration  statement  shall  be  deemed  to be a new  registration  statement
relating to the securities offered therein,  and the offering of such securities
at that time shall be deemed to be the initial bona fide offering thereof.

       (c) The undersigned  registrant  hereby undertakes to deliver or cause to
be delivered with the prospectus,  to each person to whom the prospectus is sent
or given, the latest annual report,  to security holders that is incorporated by
reference  in  the  prospectus  and  furnished   pursuant  to  and  meeting  the
requirements  of Rule 14a-3 or Rule 14c-3 under the  Securities  Exchange Act of
1934;  and,  where  interim  financial  information  required to be presented by
Article 3 of Regulation S-X is not set forth in the prospectus,  to deliver,  or
cause to be  delivered to each person to whom the  prospectus  is sent or given,
the latest  quarterly  report that is specifically  incorporated by reference in
the prospectus to provide such interim financial information.

       (d)  Insofar  as  indemnification   for  liabilities  arising  under  the
Securities Act of 1933 may be permitted to directors,  officers, and controlling
persons of the registrant  pursuant to the foregoing  provisions,  or otherwise,
the  registrant  has been  advised  that in the  opinion of the  Securities  and
Exchange  Commission such  indemnification is against public policy as expressed
in the 1933 Act and is, therefore,  unenforceable. In the event that a claim for
indemnification  against  such  liabilities  (other  than  the  payment  by  the
registrant of expenses incurred or paid by a director,  officer,  or controlling
person of the  registrant  in the  successful  defense of any action,  suit,  or
proceeding) is asserted by such director,

                                     II-3


<PAGE>



officer,   or  controlling  person  in  connection  with  the  securities  being
registered, the registrant will, unless in the opinion of its counsel the matter
has been  settled by  controlling  precedent,  submit to a court of  appropriate
jurisdiction the question whether such  indemnification  by it is against public
policy expressed in the 1933 Act and will be governed by the final  adjudication
of such issue.


                                     II-4


<PAGE>




                                   SIGNATURES

       Pursuant to the  requirements of the Securities Act of 1933, TF Financial
Corporation  certifies that it has  reasonable  grounds to believe that it meets
all of the requirements for filing a Registration  Statement on Form S-8 and has
duly  caused  this  Registration  Statement  to be signed  on its  behalf by the
undersigned  thereunto  duly  authorized,   in  the  City  of  Newtown  and  the
Commonwealth of Pennsylvania, on the 31st day of July 1996.

                                   TF Financial Corporation

                                   By:   /s/ John R. Stranford
                                         John R. Stranford
                                         President and Chief Operating Officer
                                         (Duly Authorized Representative)


<PAGE>



                                POWER OF ATTORNEY

       We, the undersigned  directors and officers of TF Financial  Corporation,
do hereby severally constitute and appoint John R. Stranford our true and lawful
attorney  and  agent,  to do any and all  things  and  acts in our  names in the
capacities  indicated below and to execute any and all instruments for us and in
our names in the  capacities  indicated  below which said John R.  Stranford may
deem  necessary or advisable to enable TF Financial  Corporation  to comply with
the  Securities  Act of  1933,  as  amended,  and  any  rules,  regulations  and
requirements of the Securities and Exchange  Commission,  in connection with the
Registration  Statement on Form S-8  relating to the  offering of the  Company's
Common Stock, including specifically, but not limited to, power and authority to
sign for us or any of us in our  names in the  capacities  indicated  below  the
Registration  Statement  and any and all  amendments  (including  post-effective
amendments)  thereto;  and we hereby  ratify and  confirm  all that said John R.
Stranford shall do or cause to be done by virtue hereof.

       Pursuant  to  the  requirements  of the  Securities  Act  of  1933,  this
registration  statement  has been signed below by the  following  persons in the
capacities and on the date indicated.

<TABLE>
<CAPTION>

<S>                                     <C>                     <C>                                          <C> 
/s/ John R. Stranford                         July 31, 1996     /s/ Robert N. Dusek                             July 31, 1996
- --------------------------------        ---------------------   -------------------------------------        -----------------
John R. Stranford                               Date            Robert N. Dusek                                       Date
President and Chief Operating Officer                           Chairman of the Board
(Principal Executive Officer)                                   and Director



/s/ Carl F. Gregory                           July 31, 1996     /s/ George A. Olsen                             July 31, 1996
- --------------------------------        ---------------------   --------------------------------------        ---------------
Carl F. Gregory                                 Date            George A. Olsen                                       Date
Director                                                        Director



/s/ Thomas J. Gola                           July 31, 1996      /s/ William C. Niemczura                        July 31, 1996
- --------------------------------        ---------------------   ------------------------------------          ----------------
Thomas J. Gola                                 Date             William C. Niemczura                                  Date
Director                                                        Senior Vice President
                                                                (Principal Financial and Accounting Officer)

</TABLE>

<PAGE>



                                     INDEX TO EXHIBITS

Exhibit Description                                                        
- -------------------                                                        

       4.1        TF Financial Corporation                                 
                  1996 Directors Stock Option Plan

       4.2        Form of Stock Option Agreement to be entered into        
                  with Optionees with respect to Non-Incentive Stock 
                  Options

       5.1        Opinion of Malizia, Spidi, Sloane & Fisch, P.C. as to the
                  validity of the Common Stock being registered

       23.1       Consent of Malizia, Spidi, Sloane & Fisch, P.C. (appears 
                  in their opinion filed as Exhibit 5.1)

       23.2       Consent of Independent Accountants

       24         Reference is made to the Signatures section of this      
                  Registration Statement for the Power of Attorney
                  contained therein
[{"type": "S-8", "sequence": "1", "description": "FORM S-8", "secsgml_size_bytes": 52203}]
{"company-data": {"conformed-name": "TF FINANCIAL CORP", "cik": "0000921051", "assigned-sic": "6035", "irs-number": "742705050", "state-of-incorporation": "DE", "fiscal-year-end": "0630"}, "filing-values": {"form-type": "S-8", "act": "33", "file-number": "333-09235", "film-number": "96601479"}, "business-address": {"street1": "3 PENNS TRAIL", "city": "NEWTOWN", "state": "PA", "zip": "18940", "phone": "2155794000"}, "mail-address": {"street1": "3 PENNS TRAIL", "city": "NEWTOWN", "state": "PA", "zip": "18940"}}
As filed with the Securities and Exchange Commission on July 31, 1996.
                                                Registration No. 333-_______

                       SECURITIES AND EXCHANGE COMMISSION
                             Washington, D.C. 20549

                                    FORM S-8
                             REGISTRATION STATEMENT
                                      UNDER
                           THE SECURITIES ACT OF 1933

                       ----------------------------------

                            TF Financial Corporation
             ------------------------------------------------------      
             (Exact name of registrant as specified in its charter)

          Delaware                                        74-2705050
- -------------------------------                       -------------------
(State or other jurisdiction of                       (I.R.S. Employer
incorporation or organization)                        Identification No.)

                                  3 Penns Trail
                           Newtown, Pennsylvania 18940
                                 (215) 579-4000
                    (Address of principal executive offices)

                            TF Financial Corporation
                        1996 Directors Stock Option Plan
                            ------------------------
                            (Full Title of the Plan)

                               Richard Fisch, Esq.
                      Malizia, Spidi, Sloane & Fisch, P.C.
                               1301 K Street, N.W.
                                 Suite 700 East
                             Washington, D.C. 20005
                                 (202) 434-4660
            (Name, address and telephone number of agent for service)

                           --------------------------
                         CALCULATION OF REGISTRATION FEE
=======================================================================================
Title of                            Proposed Max-    Proposed Max-     Amount of
Securities to     Amount to         imum Offering    imum Aggregate    Registration
be Registered     be Registered     Price Per Unit   Offering Price(2) Fee (2)(3)(4)
- -------------     -------------     --------------   ----------------- -------------
Common Stock
$.10 par value     25,000(1)        $14.75(2)        $368,750          $200.00
=======================================================================================
(1)   The maximum  number of shares of common stock  issuable  upon  exercise of
      options granted or to be granted under the TF Financial  Corporation  1996
      Directors  Stock  Option Plan  consists of 25,000  shares  which are being
      registered under this Registration  Statement and for which a registration
      fee is being paid.

(2)   Under Rule 457(h) of the 1933 Act, the registration fee may be calculated,
      inter  alia,  based  upon the  price at which  the  stock  options  may be
      exercised.  An aggregate of 25,000 shares are being registered  hereby, of
      which 25,000  shares are under  option at an exercise  price of $14.75 per
      share ($368,750 in the aggregate).

(3)   Represents the $200 minimum filing fee.

(4)   Under Rule 462 of the 1933 Act, the Registration Statement  on  Form  S-8
      shall be effective upon filing with the Commission.
** THIS DOCUMENT CONSTITUTES THE PROSPECTUS COVERING SECURITIES THAT HAVE
BEEN REGISTERED UNDER THE SECURITIES ACT OF 1933.**

PROSPECTUS

                                  25,000 Shares

                                  -------------

                            TF FINANCIAL CORPORATION
                                  COMMON STOCK
                           (Par Value $.10 Per Share)

                                  -------------

                            TF FINANCIAL CORPORATION
                        1996 DIRECTORS STOCK OPTION PLAN

                                  -------------

      This Prospectus  relates to 25,000 shares of common stock,  par value $.10
per share (the "Common Stock"), of TF Financial  Corporation (the "Company"),  a
Delaware  corporation  which is the  savings and loan  holding  company of Third
Federal Savings Bank (the "Savings Bank"), which may be issued from time to time
by the Company to holders of Options  granted or to be granted by the Company to
directors of the Company and any  subsidiary  of the Company  pursuant to the TF
Financial Corporation 1996 Directors Stock Option Plan (the "Plan").  Holders of
options  granted or to be granted under the Plan (the "Options") are referred to
herein  as  "Optionees."  Each  offer  made  under  the  Plan  pursuant  to this
Prospectus is made at the price and on the terms and conditions contained in the
stock option agreements entered into between the Company and each Optionee.

      This Prospectus is for use as of the date hereof and in subsequent  years.
Information  which is  likely to change  from year to year will be  included  in
appendices to this Prospectus.

      The issued and  outstanding  Common  Stock of the Company is traded in the
over-the-counter  market,  and  transactions are reported on the Nasdaq National
Market under the symbol "THRD".  Shares of Common Stock which may be issued upon
exercise of Options granted or to be granted under the Plan, will also be traded
in  over-the-counter  market. On July 26, 1996, the last reported sales price of
the Common Stock in the National Market System was $14.00 per share.

- --------------------------------------------------------------------------------
THESE  SECURITIES  HAVE NOT BEEN APPROVED OR  DISAPPROVED  BY THE SECURITIES AND
EXCHANGE COMMISSION, NOR HAS THE COMMISSION PASSED UPON THE ACCURACY OR ADEQUACY
OF THIS PROSPECTUS. ANY REPRESENTATION TO THE CONTRARY IS A CRIMINAL OFFENSE.
- --------------------------------------------------------------------------------

                 The date of this Prospectus is July 31, 1996
No  person  has been  authorized  to give any  information  or to make any
representation  not contained in this  Prospectus,  and, if given or made,  such
information or representation  must not be relied upon as having been authorized
by the  Company.  This  Prospectus  does  not  constitute  an offer to sell or a
solicitation  of an offer to buy any  securities  other  than the  Common  Stock
offered by this  Prospectus or an offer to sell or a solicitation of an offer to
buy such Common Stock in any  jurisdiction  to any person to whom it is unlawful
to make such offer or solicitation in such jurisdiction. Neither the delivery of
this  Prospectus nor any sale made  hereunder  shall,  under any  circumstances,
create  any  implication  that  there has been no change in the  affairs  of the
Company  or that the  information  contained  herein is  correct  as of any time
subsequent to the date hereof.
TABLE OF CONTENTS

                           TF Financial Corporation
                       1996 Directors Stock Option Plan

                                                                     Page
                                                                     ----

General Plan Information....................................         1

Administration..............................................         1

Purpose.....................................................         2

Securities to be Offered....................................         2

Eligibility to Participate in Plan..........................         2

Purchases of Securities Pursuant to the Plan
 and Payment for Securities Offered.........................         2

  Grant of Options..........................................         2
  Term of the Plan..........................................         3
  Stock Option Agreements...................................         3
  Option Price..............................................         3
  Option Period.............................................         3
  Non-transferability.......................................         3
  Conditions of Exercise....................................         4
  Payment for Options.......................................         4
  Cashless Exercise.........................................         4
  Issuance of Common Stock..................................         4
  Dividend Equivalent Rights................................         4

Recapitalization, Merger, Consolidation, Change in
 Control and Similar Transactions...........................         5

Amendment and Termination of the Plan.......................         5

Restrictions on Resale......................................         6

Federal Income Tax Consequences.............................         6

Annual Report to Shareholders...............................         7

Additional Information......................................         7

Legal Opinion...............................................         7

Appendix A..................................................       A-1
  Administration............................................       A-1
  Number of Shares Subject to Plan..........................       A-1
  Participation in the Plan.................................       A-1
  Outstanding Awards........................................       A-1
TF Financial Corporation
                       1996 Directors Stock Option Plan

General Plan Information
- ------------------------

      This  Prospectus  relates to 25,000 shares of the Common Stock,  par value
$.10 per share,  of TF  Financial  Corporation  (the  "Company"),  which will be
offered upon  exercise of options  granted or to be granted  under the Company's
1996 Directors Stock Option Plan (the "Plan").

      The  Company was formed  under the laws of the State of  Delaware  for the
purpose of  becoming a savings  and loan  holding  company and became the parent
corporation of Third Federal Savings Bank (the "Savings Bank") on July 13, 1994,
(the "Effective  Date") at which time the Company  acquired all of the shares of
capital stock of the Savings Bank. The Board of Directors of the Company adopted
the Plan at its meeting on May 21, 1996. The Plan is to continue in effect for a
period of ten years from the Effective Date (i.e., May 20, 2006), unless earlier
terminated or extended by the Company.

      Pursuant to the Plan,  25,000  shares of Common  Stock were  reserved  for
issuance by the Company upon  exercise of Stock Options  ("Options")  awarded to
directors of the Company and the Bank.  Options  granted under the Plan will not
be  Incentive  Stock  Options  within the  meaning  of  Section  422 of the Code
("Non-Incentive Stock Option").

      Upon  exercise of a  Non-Incentive  Stock Option,  the Optionee  generally
recognizes  ordinary  income to the extent that the exercise  price is less than
the fair market value of the Common  Stock on the date of exercise.  The Company
is entitled to a federal  income tax  deduction  equal to the amount of ordinary
income  recognized by the Optionee at the time of such income  recognition.  See
"Federal Income Tax Consequences."

      The Plan will not be qualified  under Section 401(a) of the Code and it is
exempt from the  provisions of the Employee  Retirement  Income  Security Act of
1974, as amended.

      The statements  herein concerning the terms and provisions of the Plan are
summaries and do not purport to be complete.  All such  statements are qualified
in their entirety by reference to the full text of the Plan document as filed as
Exhibit 4.1 to the Registration Statement of which this Prospectus is a part.

      Additional updating and other information with respect to the Plan and the
Common Stock offered  hereby may be provided in the future to holders of Options
by means of one or more supplements or appendices to this Prospectus. Additional
information about the Plan (including a copy of the Plan), plan  administration,
and the Company may be obtained at the Company's  principal  offices,  which are
located at 3 Penns Trail,  Newtown,  Pennsylvania 18940. The Company's telephone
number is (215) 579-4000.

Administration
- --------------

      The  Plan  is  administered  by a  Committee  of the  Company's  Board  of
Directors (the  "Committee").  The Plan provides that the Committee will consist
of at least three  non-employee  directors  of the  Company.  The members of the
Committee are  appointed by the Board and serve at the pleasure of the Board.  A
majority of the entire Committee shall constitute a quorum,  and the action of a
majority

                                      1
of the  members  present at any  meeting  at which a quorum is present  shall be
deemed the action of the Committee.

      Subject to the express  provisions of the Plan and resolutions  adopted by
the Board,  the  Committee  has  authority to interpret  the Plan, to prescribe,
amend,  and  rescind  the rules and  regulations  relating  to the Plan,  and to
determine  the form and  content  of  Options  to be issued  under the Plan.  In
addition,  the Committee is authorized to make all other  determinations  deemed
necessary or advisable for the administration of the Plan and shall have and may
exercise  such other power and such  authority  as may be delegated to it by the
Board from time to time. All decisions,  determinations,  and interpretations of
the Committee shall be final and conclusive to all persons affected thereby.

      Additional  information  about the Plan and the  Committee may be obtained
from the  Company at the address of the Company as listed  under  "General  Plan
Information."  For  a  list  of  the  current  members  of  the  Committee,  see
"Administration" at Appendix A.

Purpose
- -------

      The  purpose of the Plan is to promote  the  interests  of the  Company by
attracting  and  retaining  the  best  available   personnel  for  positions  of
substantial responsibility to serve as directors of the Company and the Bank and
to provide additional  incentive to such directors of the Company to promote the
success and profitability of the Company's business.

Securities to be Offered
- ------------------------

      The  aggregate  number  of  shares  of  Common  Stock  which may be issued
pursuant to Options  granted or to be granted  under the Plan is 25,000  shares,
subject to certain  adjustments  for  changes in the  capital  structure  of the
Company,  as described  below.  See  "Recapitalization,  Merger,  Consolidation,
Change in Control and  Similar  Transactions."  Any shares  subject to an Option
award under the Plan which expire or are  terminated  unexercised  will again be
available for issuance under the Plan.

Eligibility to Participate in Plan
- ----------------------------------

      Options  to  purchase  Common  Stock  under  the  Plan may be  awarded  to
directors of the Company,  the Savings Bank, and any present or future parent or
subsidiary corporations.

Purchases of Securities Pursuant to the Plan and Payment for Securities Offered
- -------------------------------------------------------------------------------

Grant of Options
- ----------------

      Non-Incentive  Stock  Options  will be granted to eleven  directors of the
Company  or the  Bank  who  are not  employees  as of the  Effective  Date at an
exercise  price equal to the fair market  value of the Common Stock on such date
of grant. The Options will be immediately exercisable.  Such Options will remain
exercisable  for up to ten (10) years from such date of grant without  regard to
continued  service as a  director.  In the event of such  person's  death,  such
Options may be exercised by the personal  representative of his estate or person
or persons to whom his rights under such Options shall have passed by will or by
laws of descent and distribution.  Options awarded shall provide for the payment
of cash amounts  upon the payment of a cash  dividend on the Common  Stock.  The
holder of such Options shall receive payment of cash in an amount  equivalent to
the cash dividend payable as if Options awarded

                                      2
herein had been  exercised  and such Common  Stock held.  Such rights to receive
such cash shall  expire  upon the  expiration  or  exercise  of such  underlying
Options. Such rights are non-transferable and shall attach to Options whether or
not such Options are immediately exercisable.

      For  a  description  of  the  number  of  persons  currently  eligible  to
participate in the Plan and the number of persons actually  participating in the
Plan, see "Participation in the Plan" at Appendix A.

      Term of the  Plan.  The  Plan  was  effective  May 21,  1996,  and  unless
previously  terminated,  the Plan  shall  continue  in effect  for a term of ten
years,  after which no further awards may be granted.  The future  expiration of
the Plan, or its termination by the Board, will not affect any Option previously
granted.

      Stock Option Agreements.  The Options granted under the Plan are evidenced
by stock option agreements (the "Option  Agreements")  substantially in the form
of the Option  Agreements  filed as exhibits to the  Registration  Statement  of
which this  Prospectus  is a part.  Each  Option  Agreement,  and any  amendment
thereto, will contain such terms and conditions consistent with the requirements
of the Plan as the  Committee  shall  determine.  Such Option  Agreements  shall
constitute the only form of reports which  participants shall receive related to
the status of Options granted or which are exercisable under the Plan.

      The Plan provides that the Board of Directors of the Company may authorize
the  Committee  to direct  the  execution  of an  instrument  providing  for the
modification  of any  outstanding  Option,  provided that no such  modification,
extension or renewal shall confer on the Option  recipient (the  "Optionee") any
rights or benefit  which could not be  conferred by the grant of a new Option at
such time, and shall not materially  decrease the Optionee's  benefits under the
Option  without the Optionee's  consent,  except as provided under Section 14 of
the  Plan,  which  permits   modification  of  the  Plan.  (See  "Amendment  and
Termination of the Plan" below.)

      Option Price.  The exercise price for the purchase of shares subject to an
Option  shall be equal to 100  percent  of the fair  market  value of the shares
covered by the Option on that date.  The exercise  price of Options must be paid
for in full in cash or shares of Common Stock, or a combination of both.

      Notwithstanding  anything herein to the contrary, the Committee shall have
the  authority to cancel  outstanding  Options  granted  under the Plan with the
consent of the  Optionee  and to reissue new Options at a lower  exercise  price
equal to the then Fair Market  Value per share of Common Stock in the event that
the Fair Market Value per share of Common Stock at any time prior to the date of
exercise of outstanding Options falls below the exercise price of such Options.

      Option Period.  The term of  exercisability of an Option granted under the
Plan  shall be for a period of ten years  from the Date of  Grant.  In  general,
Options will not be exercisable  after the expiration of their term as set forth
in the Plan or the Option Agreement.

      A total of six months must  elapse  between the date of grant of an Option
and the date of the sale of Common Stock  received  through the exercise of such
Option.

     Non-transferability. No Option granted under the Plan is transferable other
than by will or the laws of descent and distribution.

                                      3
Conditions of Exercise.  Options may be exercised  only during the periods
specified in the Plan or the Option Agreement,  certain  information as to which
is provided above (see "Option Period"). Except as described above and as may be
limited by agreement, there is no limitation upon the number of Options that may
be exercised in any one year,  and Options not  exercised in any one year may be
exercised in subsequent years over the term of the Option.

      Payment for Options. Under the Plan, full payment for each share of Common
Stock  purchased  upon the exercise of any Option  granted  shall be made at the
time of exercise of each such Option and shall be paid in cash (in United States
dollars),  Common Stock, or a combination of cash and Common Stock. Common Stock
utilized in full or partial payment of the exercise price shall be valued at its
fair market  value at the date of  exercise.  The Company  shall  accept full or
partial payment in Common Stock only to the extent  permitted by applicable law.
No shares of Common Stock shall be issued until full payment  therefore has been
received  by the  Company,  and no  Optionee  shall  have any of the rights of a
shareholder of the Company until the shares of Common Stock are issued to him.

      Cashless  Exercise.  An  Optionee  who has held an Option for at least six
months  may  engage in the  "cashless  exercise"  of the  Option.  In a cashless
exercise,  an Optionee  gives the Company  written notice of the exercise of the
Option together with an order to a registered  broker-dealer or equivalent third
party,  to sell part or all of the Optioned  Stock and to deliver  enough of the
proceeds to the Company to pay the Option price and any  applicable  withholding
taxes.  If the Optionee  does not sell the Optioned  Stock  through a registered
broker-dealer  or equivalent third party, he can give the Company written notice
of the  exercise of the Option and the third  party  purchaser  of the  Optioned
Stock shall pay the Option price plus any  applicable  withholding  taxes to the
Company.

      Issuance of Common  Stock.  Shares  issued to Optionees  upon  exercise of
Options  shall be either newly issued  shares of the Company or treasury  shares
purchased  in the market,  at the  Company's  discretion.  In either  case,  the
Optionee  shall not pay any fees,  commissions  or other charges for such Common
Stock  other than the  exercise  price as stated in the Option  Agreement.  Cash
proceeds  from the sale of Common  Stock  issued  pursuant  to the  exercise  of
Options will be added to the general funds of the Company to be used for general
corporate  purposes.  Shares of Common Stock shall not be issued with respect to
any Option  granted  under the Plan  unless the  issuance  and  delivery of such
Common  Stock  shall  comply with all  relevant  provisions  of law,  including,
without  limitation,  the  Securities  Act of 1933,  as  amended,  the rules and
regulations promulgated thereunder, any applicable state securities law, and the
requirements  of any stock  exchange  upon  which the  Common  Stock may then be
listed.

      Inability of the Company to obtain  approval from any  regulatory  body or
authority  deemed by the  Company or counsel  thereto  to be  necessary  for the
lawful issuance and sale of any Common Stock hereunder shall relieve the Company
of any liability in respect of the non-issuance or sale of such Common Stock. As
a condition  to the  exercise  of an Option,  the Company may require the person
exercising  the Option to make such  representations  and  warranties  as may be
necessary  to  assure  the  availability  of an  exemption  from any  additional
registration requirements of federal or state securities laws.

      Dividend  Equivalent  Rights:  Options  awarded under the Plan provide the
right of the optionee to receive dividend  equivalent rights.  Such rights shall
provide that upon the payment of a cash dividend on the Common Stock, the holder
of such Options  shall  receive  payment of cash in an amount  equivalent to the
cash  dividend  payable as if such  Options had been  exercised  and such Common
Stock held.  Such rights  shall expire upon the  expiration  or exercise of such
underlying Options. Such rights are non-

                                      4
transferable  and shall  attach  to  Options  whether  or not such  Options  are
immediately exercisable. All options granted to directors in accordance with the
schedule of awards  contained in the Plan shall have  associated  with them such
dividend equivalent rights.

Recapitalization,   Merger,  Consolidation,   Change  in  Control,  and  Similar
- --------------------------------------------------------------------------------
Transactions
- ------------

      Subject to any required action by the shareholders of the Company,  within
the sole discretion of the Committee,  the aggregate  number of shares of Common
Stock for which Options may be granted  under the Plan,  the number of shares of
Common Stock covered by each outstanding Option and the exercise price per share
of  Common  Stock of each  Option  shall  be  proportionately  adjusted  for any
increase or decrease  in the number of issued and  outstanding  shares of Common
Stock resulting from a subdivision or  consolidation of shares or the payment of
a stock  dividend on the Common  Stock or any other  increase or decrease in the
number  of  such  shares  of  Common  Stock   effected   without  a  receipt  of
consideration   by  the  Company  (other  than  by  shares  held  by  dissenting
stockholders).

      In  the  event  of  any  change  in  control,  recapitalization,   merger,
consolidation,  exchange  of shares,  spin-off,  reorganization,  tender  offer,
partial or complete  liquidation,  or other extraordinary  corporate action, the
Committee, in its sole discretion,  shall have the power, prior to or subsequent
to such action or events,  to (i)  appropriately  adjust the number of shares of
Common  Stock  subject to each Option,  the  exercise  price per share of Common
Stock,  and the  consideration  to be given or received by the Company  upon the
exercise of any outstanding  Options;  (ii) cancel any or all previously granted
Options,  providing that  appropriate  consideration  is paid to the Optionee in
connection  therewith;  and/or (iii) make such other  adjustments  in connection
with  the  Plan as the  Committee,  in its  sole  discretion,  deems  necessary,
desirable, appropriate, or advisable.

      The Committee  has at all times the power to accelerate  the exercise date
of all Options  granted  under the Plan. In the case of any change in control of
the Company as determined by the Committee, all outstanding options shall become
immediately exercisable.  A change in control is defined to include (i) the sale
of all, or a material portion, of the assets of the Company;  (ii) the merger or
recapitalization of the Company whereby the Company is not the surviving entity;
(iii) a change of control of the Company as  otherwise  defined by the Office of
Thrift  Supervision  ("OTS")  or its  regulations;  and  (iv)  the  acquisition,
directly  or  indirectly,  of the  beneficial  ownership  (within the meaning of
Section 13(d) of the Securities  Exchange Act of 1934 and rules and  regulations
promulgated  thereunder) of 25% or more of the outstanding  voting securities of
the Company by any person,  trust,  entity or group.  This limitation  shall not
apply to a  transaction  in which the  purchase  of shares  by  underwriters  in
connection  with a public offering of Common Stock, or the purchase of shares of
up to 25% of any class of securities of the Company by a tax-qualified  employee
stock benefit plan. The determination of the Committee as to whether a change in
control has occurred shall be conclusive and binding.

Amendment and Termination of the Plan
- -------------------------------------

      The Board of Directors may alter, suspend, or discontinue the Plan, except
that no action of the Board may increase the maximum number of shares  permitted
to be optioned  under the Plan.  The Plan shall continue in effect for a term of
ten years from the Effective Date, after which no future awards may be granted.

                                      5
Restrictions on Resale
- ----------------------

      Unless specifically  included as a term and condition of any Option, there
are no  restrictions on the resale of Common Stock acquired upon the exercise of
Options.  Such shares of Common Stock, however, may be resold only in compliance
with the  registration  requirements  of the  Securities Act of 1933, as amended
(the "1933 Act"), and applicable state securities laws.

      Under the 1933 Act,  affiliates of the Company generally may resell shares
of Common Stock  purchased  pursuant to the Plan only (i) in accordance with the
provisions  of Rule 144 under the 1933 Act, or (ii)  pursuant  to an  applicable
current and effective registration statement under the 1933 Act.

      As defined in Rule 405 under the 1933 Act, an  affiliate of the Company is
a  person  who  directly,  or  indirectly  through  one or more  intermediaries,
controls,  or is controlled by, or is under common control with the Company. The
determination  of whether a person is an affiliate of the Company is primarily a
factual  one  based  upon  whether  he   possesses,   directly  or   indirectly,
individually  or in  concert  with  others,  the  power to  direct  or cause the
direction  of the  management  or policies of the Company,  whether  through the
ownership of voting stock, by executive position, by membership on the Board, by
contract or  otherwise.  Therefore,  each  Optionee  should  consult his counsel
concerning  whether  he is  an  affiliate  of  the  Company  and  the  attendant
restrictions on the resale under the 1933 Act of Common Stock acquired  pursuant
to the Plan.

      In  addition,  the  receipt  of an Option to  purchase  Common  Stock by a
director of the Company is a reportable transaction under Section 16 of the 1934
Act,  and Forms 3, 4, or 5 are  required  to be filed  with the  Securities  and
Exchange Commission in connection with such transaction.  The sale by a director
of Common Stock issued upon an exercise of an Option within six months after the
receipt of such Option may create liability of such persons to the Company under
the "short-swing  profit"  provisions of Section 16(b) of the 1934 Act. For this
reason,  the Plan  contains a  provision  that a total of six month must  elapse
between  the date of the grant of an  Option  and the date of the sale of Common
Stock received through the exercise of an Option.

Federal Income Tax Consequences
- -------------------------------

      Under  present  federal  tax  laws,  awards  under  the Plan will have the
following consequences:

      1.The grant of an Option will not by itself result in the  recognition  of
        taxable income to the Optionee nor entitle the Company to a deduction at
        the time of such grant.

      2.The  exercise  of a  Non-Incentive  Stock  Option  will  result  in  the
        recognition  of ordinary  income by the Optionee on the date of exercise
        in an amount equal to the difference  between the exercise price and the
        fair  market  value  on the  date of  exercise  of the  shares  acquired
        pursuant to the Option.

      3.Receipt of income as a result of Dividend  Equivalent  Rights  held  by
        an Optionee will be taxable as ordinary income when received.

      4.The Company  will be allowed a tax  deduction  for Federal tax  purposes
        equal to the amount of ordinary income  recognized by an Optionee at the
        time the Optionee recognizes such ordinary income under an Non-Incentive
        Stock Option .

                                      6
The  foregoing  provides  a general  summary  of the  federal  income  tax
consequences  applicable  to Options  under the Plan.  Each Optionee is urged to
consult his or her own tax advisor for information  regarding applicable federal
and state tax consequences.

Annual Report to Shareholders
- -----------------------------

      The Company's financial statements for the period ended December 31, 1995,
as contained in the  Company's  Form 10-K are  incorporated  by reference in the
Registration  Statement to which this  Prospectus is a part. In the future,  the
Company's latest Annual Report to Stockholders,  including financial statements,
will be mailed to all stockholders of record as of the close of business on such
record  date.  Any person  wishing to receive a copy of such  Annual  Report may
obtain a copy by  writing  the  Company at the  address  set forth  above  under
"Additional Information."

Additional Information
- ----------------------

      Additional  updating  information with respect to the Common Stock and the
Plan covered herein may be provided in the future to participants under the Plan
by means of  appendices  to this  Prospectus.  The nature and  frequency  of any
reports to be made to participants as to their participation in the Plan will be
determined by the Committee.

      The Company upon written or oral request,  will provide  without charge to
any person to whom this  Prospectus is delivered:  a copy of the Plan, a copy of
its latest Annual Report to Stockholders  (when available) and a copy of any and
all of the documents that have been  incorporated by reference in Item 3 of Part
II of the  Registration  Statement of which this  Prospectus is a part, and that
such  documents  are deemed  incorporated  by reference in this 1933 Act Section
10(a)  Prospectus.  Further,  other  documents  required to be delivered to Plan
participants as specified in Item 9 of Part II of the Registration Statement are
available upon request. Any such request can be oral or in writing and should be
addressed to the Corporate Secretary,  TF Financial Corporation,  3 Penns Trail,
Newtown,   Pennsylvania  18940.  The  Registrant's  telephone  number  is  (215)
579-4000.

Legal Opinion
- -------------

      The validity of the Common Stock offered hereby has been passed on for the
Company by Malizia,  Spidi, Sloane & Fisch, P.C., 1301 K Street, N.W., Suite 700
East, Washington, D.C. 20005.

                                      7
APPENDIX A

                        ADDITIONAL INFORMATION CONCERNING
                                       THE
                            TF FINANCIAL CORPORATION
                        1996 DIRECTORS STOCK OPTION PLAN
                              (As of July 31, 1996)

Administration
- --------------

      The Board has appointed Directors Dusek, Olsen, and Gola as members of the
Committee responsible for administration of the 1996 Directors Stock Option Plan
("Plan").

Number of Shares Subject to Plan
- --------------------------------

      On May 21, 1996,  Options  covering 25,000 shares of the Common Stock were
outstanding,  which were granted at an exercise price of $14.75 per share. As of
the date of this Appendix,  25,000 shares of Common Stock remain  issuable under
the Plan,  which  provides  for the  issuance  of Options  for a total of 25,000
shares of Common Stock.

Participation in the Plan
- -------------------------

      As of May 21,  1996,  the  Company  and its  subsidiaries  had 8 directors
eligible  to  participate  in the  Plan.  Of such  persons,  as of May  21,1996,
Non-Incentive  Stock Options to purchase  25,000 shares of Common Stock,  in the
aggregate  were held by 8  non-employee  members  of the  Board of TF  Financial
Corporation or Third Federal Savings Bank.

Outstanding Awards
- ------------------

      The following table presents  information  with respect to the outstanding
Options under the Plan as of the date of this Appendix.
Number of Shares Presently  Number of Persons  Exercise Price
Grant Date                  Subject to Options        Holding Awards      Per Share
- ----------               --------------------------  -----------------  --------------
May 21, 1996                      25,000                     8              $14.75
 
Total Awards Outstanding          25,000                     8              $14.75
A-1
PART II

                INFORMATION REQUIRED IN REGISTRATION STATEMENT

Item 3.  Incorporation of Certain Documents by Reference
- --------------------------------------------------------

     The Company is subject to the informational  requirements of the Securities
Exchange Act of 1934 (the "1934 Act") and,  accordingly,  files periodic reports
and  other  information  with  the  Securities  and  Exchange   Commission  (the
"Commission").  Reports, proxy statements,  and other information concerning the
Company  filed with the  Commission  may be inspected and copies may be obtained
(at present rates) at the Commission's Public Reference Section,  Room 1024, 450
Fifth Street, N.W., Washington, DC 20549.

         The following  documents  filed with the  Commission  are  incorporated
by reference in the  Registration  Statement  and  the Prospectus  constituting 
Part I of such Registration Statement:

     (1) The Company's  Registration  Statement on Form S-1 (No. 33-76960) filed
with the Commission on March 28, 1994 and amendments thereto;

     (2) The Company's  Annual Report on Form 10-K filed with the Commission for
the fiscal ended December 31, 1995, as filed with the Commission;

     (3) The  Company's  Quarterly  Report on Form 10-Q for the  quarters  ended
March 31, 1996 and June 30, 1996, as filed with the Commission;

     (4) The Company's  Definitive  Proxy  Statement  related to the 1996 Annual
Meeting of Stockholders as filed with the Commission on;

     (5) The  Company's  Registration  Statement  on Form 8-A as filed  with the
Commission on March 16, 1994;

     (6)  Information  as to the  Options  which will be  included in the future
either in the Company's proxy  statements,  annual reports or appendices to this
Prospectus.

     All documents filed by the Company pursuant to Sections 13, 14, or 15(d) of
the  Securities  Exchange  Act of 1934  after the date  hereof  and prior to the
termination  of the offering of the shares of Common Stock shall be deemed to be
incorporated by reference in this Registration Statement herein and to be a part
hereof from the date of filing of such documents.

Item 4.  Description of Securities.
- ----------------------------------

     Not  applicable  because the  Company's  Common Stock is  registered  under
Section 12 of the 1934 Act.

Item 5.  Interests of Named Experts and Counsel.
- -----------------------------------------------

       Not applicable.

                                     II-1
Item 6.  Indemnification of Directors and Officers.
- --------------------------------------------------

       Section  145  of  the  Delaware  General  Corporation  Law  authorizes  a
corporation such as the registrant to indemnify officers, directors,  employees,
and agents under certain circumstances.  Section 145 requires indemnification of
directors,  officers,  employees,  and  agents who have been  successful  on the
merits or otherwise in defense of certain actions,  suits,  proceedings  claims,
issues,  and  matters.   Article  XVIII  of  the  registrant's   Certificate  of
Incorporation provides for indemnification.

       Section 102(b)(7) of the Delaware General  Corporation Law allows for the
limitation  of  liability  of  directors.   Article  XVII  of  the  registrant's
Certificate  of  Incorporation  provides  for the  limitation  of  liability  of
directors.

       The registrant  believes that these provisions  assist the registrant in,
among other  things,  attracting  and retaining  qualified  persons to serve the
registrant and its subsidiary.  However, a result of such provisions could be to
increase the expenses of the  registrant and  effectively  reduce the ability of
stockholders  to sue on behalf of the registrant  because certain suits could be
barred or amounts that might  otherwise be obtained on behalf of the  registrant
could be required to be repaid by the registrant to an indemnified party.

       Additionally, the Company has in force a Directors and Officers Liability
Policy  underwritten by CNA with a $5.0 million aggregate limit of liability and
an aggregate  deductible of $100,000 per loss both for claims  directly  against
officers and directors and for claims where the Company is required to indemnify
directors and officers.

       Insofar as indemnification  for liabilities  arising under the Securities
Act of 1933 ("1933  Act") may be permitted to  directors,  officers,  or persons
controlling the Company  pursuant to the foregoing  provisions,  the Company has
been informed that in the opinion of the Securities and Exchange Commission such
indemnification  is against  public  policy as  expressed in the 1933 Act and is
therefore unenforceable.

Item 7.  Exemption from Registration Claimed.
- --------------------------------------------

       Not applicable since no restricted  securities within the meaning of Rule
144 of the Securities  Act of 1933 will be reoffered or resold  pursuant to this
Registration Statement.

Item 8.  Exhibits
- -----------------

       For a list of all exhibits filed or included as part of this Registration
Statement, see "Index to Exhibits" at the end of this Registration Statement.

Item 9.  Undertakings
- ---------------------

       (a)  The undersigned registrant hereby undertakes:

            (1) To file,  during any  period in which  offers or sales are being
            made, a post-effective amendment to this registration statement;

            (i) To  include  any prospectus required by Section 10(a)(3) of the
            Securities Act of 1933;

                                     II-2
(ii) To reflect in the  prospectus any facts or events arising after
            the effective date of the registration statement (or the most recent
            post-effective  amendment  thereof)  which,  individually  or in the
            aggregate,  represent a fundamental  change in the  information  set
            forth in the registration statement;

            (iii) To include any material  information  with respect to the plan
            of  distribution  not  previously   disclosed  in  the  registration
            statement  or  any  material  change  to  such  information  in  the
            registration statement;

provided  however,  that paragraphs  (a)(1)(i) and (a)(1)(ii) do no apply if the
registration statement is on Form S-3, Form S-8, and the information required to
be included in a  post-effective  amendment by those  paragraphs is contained in
periodic reports filed by the registrant  pursuant to Section 13 or 15(d) of the
Securities  Exchange  Act of 1934  that are  incorporated  by  reference  in the
registration statement.

            (2) That,  for the purpose of  determining  any liability  under the
Securities Act of 1933, each such post-effective amendment shall be deemed to be
a new registration statement relating to the securities offered therein, and the
offering of such  securities at that time shall be deemed to be the initial bona
fide offering thereof.

            (3)  To  remove  from  registration  by  means  of a  post-effective
amendment  any of the  securities  being  registered  which remain unsold at the
termination of the offering.

            (4) If  the  registrant  is a  foreign  private  issuer,  to  file a
post-effective  amendment to the registration statement to include any financial
statements  required by Rule 3-19 of Regulation  S-X at the start of any delayed
offering or throughout a continuous offering.

       (b) The undersigned  registrant  hereby  undertakes that, for purposes of
determining  any liability  under the Securities Act of 1933, each filing of the
registrant's  annual  report  pursuant to section  13(a) or section 15(d) of the
Securities  Exchange  Act of 1934  (and,  where  applicable,  each  filing of an
employee  benefit  plan's  annual  report  pursuant  to  section  15(d)  of  the
Securities  Exchange  Act of 1934)  that is  incorporated  by  reference  in the
registration  statement  shall  be  deemed  to be a new  registration  statement
relating to the securities offered therein,  and the offering of such securities
at that time shall be deemed to be the initial bona fide offering thereof.

       (c) The undersigned  registrant  hereby undertakes to deliver or cause to
be delivered with the prospectus,  to each person to whom the prospectus is sent
or given, the latest annual report,  to security holders that is incorporated by
reference  in  the  prospectus  and  furnished   pursuant  to  and  meeting  the
requirements  of Rule 14a-3 or Rule 14c-3 under the  Securities  Exchange Act of
1934;  and,  where  interim  financial  information  required to be presented by
Article 3 of Regulation S-X is not set forth in the prospectus,  to deliver,  or
cause to be  delivered to each person to whom the  prospectus  is sent or given,
the latest  quarterly  report that is specifically  incorporated by reference in
the prospectus to provide such interim financial information.

       (d)  Insofar  as  indemnification   for  liabilities  arising  under  the
Securities Act of 1933 may be permitted to directors,  officers, and controlling
persons of the registrant  pursuant to the foregoing  provisions,  or otherwise,
the  registrant  has been  advised  that in the  opinion of the  Securities  and
Exchange  Commission such  indemnification is against public policy as expressed
in the 1933 Act and is, therefore,  unenforceable. In the event that a claim for
indemnification  against  such  liabilities  (other  than  the  payment  by  the
registrant of expenses incurred or paid by a director,  officer,  or controlling
person of the  registrant  in the  successful  defense of any action,  suit,  or
proceeding) is asserted by such director,

                                     II-3
officer,   or  controlling  person  in  connection  with  the  securities  being
registered, the registrant will, unless in the opinion of its counsel the matter
has been  settled by  controlling  precedent,  submit to a court of  appropriate
jurisdiction the question whether such  indemnification  by it is against public
policy expressed in the 1933 Act and will be governed by the final  adjudication
of such issue.

                                     II-4
SIGNATURES

       Pursuant to the  requirements of the Securities Act of 1933, TF Financial
Corporation  certifies that it has  reasonable  grounds to believe that it meets
all of the requirements for filing a Registration  Statement on Form S-8 and has
duly  caused  this  Registration  Statement  to be signed  on its  behalf by the
undersigned  thereunto  duly  authorized,   in  the  City  of  Newtown  and  the
Commonwealth of Pennsylvania, on the 31st day of July 1996.

                                   TF Financial Corporation

                                   By:   /s/ John R. Stranford
                                         John R. Stranford
                                         President and Chief Operating Officer
                                         (Duly Authorized Representative)
POWER OF ATTORNEY

       We, the undersigned  directors and officers of TF Financial  Corporation,
do hereby severally constitute and appoint John R. Stranford our true and lawful
attorney  and  agent,  to do any and all  things  and  acts in our  names in the
capacities  indicated below and to execute any and all instruments for us and in
our names in the  capacities  indicated  below which said John R.  Stranford may
deem  necessary or advisable to enable TF Financial  Corporation  to comply with
the  Securities  Act of  1933,  as  amended,  and  any  rules,  regulations  and
requirements of the Securities and Exchange  Commission,  in connection with the
Registration  Statement on Form S-8  relating to the  offering of the  Company's
Common Stock, including specifically, but not limited to, power and authority to
sign for us or any of us in our  names in the  capacities  indicated  below  the
Registration  Statement  and any and all  amendments  (including  post-effective
amendments)  thereto;  and we hereby  ratify and  confirm  all that said John R.
Stranford shall do or cause to be done by virtue hereof.

       Pursuant  to  the  requirements  of the  Securities  Act  of  1933,  this
registration  statement  has been signed below by the  following  persons in the
capacities and on the date indicated.
/s/ John R. Stranford                         July 31, 1996     /s/ Robert N. Dusek                             July 31, 1996
- --------------------------------        ---------------------   -------------------------------------        -----------------
John R. Stranford                               Date            Robert N. Dusek                                       Date
President and Chief Operating Officer                           Chairman of the Board
(Principal Executive Officer)                                   and Director

/s/ Carl F. Gregory                           July 31, 1996     /s/ George A. Olsen                             July 31, 1996
- --------------------------------        ---------------------   --------------------------------------        ---------------
Carl F. Gregory                                 Date            George A. Olsen                                       Date
Director                                                        Director

/s/ Thomas J. Gola                           July 31, 1996      /s/ William C. Niemczura                        July 31, 1996
- --------------------------------        ---------------------   ------------------------------------          ----------------
Thomas J. Gola                                 Date             William C. Niemczura                                  Date
Director                                                        Senior Vice President
                                                                (Principal Financial and Accounting Officer)
INDEX TO EXHIBITS

Exhibit Description                                                        
- -------------------                                                        

       4.1        TF Financial Corporation                                 
                  1996 Directors Stock Option Plan

       4.2        Form of Stock Option Agreement to be entered into        
                  with Optionees with respect to Non-Incentive Stock 
                  Options

       5.1        Opinion of Malizia, Spidi, Sloane & Fisch, P.C. as to the
                  validity of the Common Stock being registered

       23.1       Consent of Malizia, Spidi, Sloane & Fisch, P.C. (appears 
                  in their opinion filed as Exhibit 5.1)

       23.2       Consent of Independent Accountants

       24         Reference is made to the Signatures section of this      
                  Registration Statement for the Power of Attorney
                  contained therein