10QSB/A

                                  UNITED STATES
                       SECURITIES AND EXCHANGE COMMISSION
                              WASHINGTON, DC 20549

                                   FORM 10-QSB/A


(Mark One)

/X/     Quarterly  report under Section 13 or 15(d) of the  Securities  Exchange
        Act of 1934

                For the quarterly period ended September 30, 2003

/ /     Transition report under Section 13 or 15(d) of the Exchange Act

              For the transition period from ________ to __________

                          Commission file number 0-631


                            WEBFINANCIAL CORPORATION
        ----------------------------------------------------------------
        (Exact Name of Small Business Issuer as Specified in Its Charter)


             DELAWARE                                      56-2043000
 ---------------------------------                         ----------
   (State or Other Jurisdiction of                        (IRS Employer
    Incorporation or Organization)                     Identification No.)


                         590 Madison Avenue, 32nd Floor
                               New York, NY 10022
          ------------------------------------------------------------
          (Address of Principal Executive Offices, Including Zip Code)

                                  212-758-3232
                ------------------------------------------------
                (Issuer's Telephone Number, Including Area Code)


            Check whether the issuer (1) filed all reports  required to be filed
by  Section  13 or 15(d) of the  Exchange  act during the past 12 months (or for
such shorter period that the registrant was required to file such reports),  and
(2) has been subject to such filing requirements for the past 90 days:

                                Yes [ X ] No [ ]

     Shares of Issuer's Common Stock Outstanding at November 14, 2003: 4,366,866

     Transitional Small Business Disclosure Format:  Yes / /    No   /X/






                                      INDEX


Part I - Financial Information                                            Page Number
- ------------------------------                                            -----------

Item 1.    Condensed Consolidated Financial Statements:

           Condensed Consolidated Statements of Financial Condition as of
           September 30, 2003 (unaudited) and December 31, 2002...............   2

           Condensed Consolidated Statements of Operations
           Three Months Ended September 30, 2003 and 2002 (unaudited).........   4

           Condensed Consolidated Statements of Operations
           Nine Months Ended September 30, 2003 and 2002 (unaudited).........    5

           Condensed Consolidated Statements of Cash Flows
           Nine Months Ended September 30, 2003 and 2002 (unaudited).........    6

           Notes to Condensed Consolidated Financial Statements (unaudited)..    8

Item 2.    Management's Discussion and Analysis or Plan of Operation.........   11

Item 3.    Controls and Procedures...........................................   14


Part II - Other Information
- ---------------------------

Item 6.    Exhibits and Reports on Form 8-K..................................   15

           Signatures........................................................   16


                                       1




PART I.   FINANCIAL INFORMATION

ITEM 1.   CONDENSED CONSOLIDATED FINANCIAL STATEMENTS

                    WEBFINANCIAL CORPORATION AND SUBSIDIARIES
            CONDENSED CONSOLIDATED STATEMENTS OF FINANCIAL CONDITION
                  (Amounts in thousands except per share data)

                    ASSETS                               SEPT. 30, 2003   DECEMBER 31, 2002
                                                           (UNAUDITED)

 Cash and due from banks                                  $     17          $     152
 Interest bearing deposits in other banks                    3,451              2,697
 Federal funds sold                                          2,732              3,697
                                                          --------          ---------
      Total cash and cash equivalents                        6,200              6,546

 Investment securities
      Held-to-maturity (estimated fair value $109 at
         September 30, 2003 and $20 at December 31, 2002)      109                 19
      Available-for-sale                                     2,078              1,722
                                                          --------          ---------
      Total investment securities                            2,187              1,741

Loans, net of deferred fees                                  8,981             11,826
Purchased receivables
         Accounts receivable factoring                       6,614              4,622
         Other                                                 323                479
 Allowance for credit losses                                (1,451)            (1,526)
                                                          --------          ---------
      Total loans and purchased receivables, net            14,467             15,401

Foreclosed assets                                              200                 36
Premises and equipment, net                                     18                 41
Accrued interest receivable                                    305                259
Goodwill, net                                                1,380              1,380
Other assets                                                   764                761
                                                          --------          ---------
                                                          $ 25,521          $  26,165
                                                          ========          ==========

                                   (continued)


                                       2




                    WEBFINANCIAL CORPORATION AND SUBSIDIARIES
      CONDENSED CONSOLIDATED STATEMENTS OF FINANCIAL CONDITION (continued)
                  (Amounts in thousands except per share data)


                                                          SEPT. 30, 2003     DECEMBER 31, 2002
                                                            (unaudited)

LIABILITIES AND STOCKHOLDERS' EQUITY
Deposits:
   Non interest-bearing demand                               $     794             $   668
   NOW/MMA accounts                                                590                 680
   Certificates of deposit                                      10,833              12,272
                                                             ---------             -------
         Total deposits                                         12,217              13,620

 Other liabilities                                                 282                 919
                                                             ---------             -------
 Total liabilities before minority interest                     12,499              14,539

 Minority interest                                                 409                 356

 Commitments and contingencies                                       -                   -

 Stockholders' Equity
     Preferred stock, 10,000,000 shares authorized, none issued      -                   -
     Common stock 50,000,000 shares authorized,
           $.001 par value, 4,366,866 shares issued
           and outstanding at September 30, 2003 and
           December 31, 2002                                         4                   4
      Paid-in-capital                                           36,606              36,606
      Accumulated  deficit                                     (24,384)            (25,083)
      Accumulated other comprehensive income (loss)                387                (257)
                                                             ---------             -------
 Total stockholders' equity                                     12,613              11,270
                                                             ---------             -------

                                                             $  25,521             $26,165
                                                             =========             =======


         THE ACCOMPANYING NOTES ARE AN INTEGRAL PART OF THESE STATEMENTS


                                       3


                    WEBFINANCIAL CORPORATION AND SUBSIDIARIES
    CONDENSED CONSOLIDATED STATEMENTS OF OPERATIONS AND COMPREHENSIVE INCOME
                                   (UNAUDITED)
                 (Amounts in thousands except per share amounts)

                                                                            FOR THE THREE MONTHS
                                                                            ENDED SEPTEMBER 30,
                                                                             2003          2002
                                                                             ----          ----
Interest income
   Loans and purchased receivables, including fees                     $     1,142    $       795
   Cash equivalents                                                              4             12
   Federal funds sold                                                            5              4
   Investments                                                                  22              5
                                                                       -----------    -----------
          Total interest income                                              1,173            816

Interest expense                                                                72             90
                                                                       -----------    -----------

      Net interest income before provision (credit) for
      credit losses                                                          1,101            726

Provision (credit) for credit losses                                           (32)            51
                                                                       -----------    -----------

      Net interest income after provision (credit) for
      credit losses                                                          1,133            675

Noninterest income
      Loss on sale of assets                                                   (35)          --
      Fee income                                                               105             97
      Miscellaneous income, net                                                 58             69
                                                                       -----------    -----------
          Total noninterest income                                             128            166

Noninterest expenses
      Salaries, wages, and benefits                                            260            183
      Professional and legal fees                                               69             76
      Accounts receivable factoring management and broker fees                 340            205
      Other management fees - related party                                     78             78
      Loss on impairment of securities available-for-sale                      325           --
      Other general and administrative                                         248            146
                                                                       -----------    -----------
          Total noninterest expenses                                         1,320            688
                                                                       -----------    -----------
             Income (loss) before income taxes and minority interest           (59)           153

Income tax expense                                                            --               30
                                                                       -----------    -----------

      Income (loss) before minority interest                                   (59)           123

Income attributable to minority interest                                        20              7
                                                                       -----------    -----------

      Net income (loss)                                                        (79)           116


Other comprehensive income (loss)
      Unrealized gains (losses) on available-for-sale
        securities arising in period                                           164           (241)
      Reclassification adjustment - loss included in
        net income                                                             325              -
                                                                       -----------    -----------
      Net unrealized gains (losses)                                            489           (241)
      Income tax expense on other comprehensive income                           -              -
                                                                       -----------    -----------
      Other comprehensive income (loss)                                        489           (241)
                                                                       -----------    -----------

    Comprehensive income (loss)                                        $       410    $      (125)
                                                                       ===========    ===========

Net income (loss) per common share, basic and diluted                  $      (.02)   $       .03
Weighted average number of common shares:
      Basic                                                              4,366,866      4,366,866
      Diluted                                                            4,368,375      4,366,866

         THE ACCOMPANYING NOTES ARE AN INTEGRAL PART OF THESE STATEMENTS

                                       4


                    WEBFINANCIAL CORPORATION AND SUBSIDIARIES
    CONDENSED CONSOLIDATED STATEMENTS OF OPERATIONS AND COMPREHENSIVE INCOME
                                   (UNAUDITED)
                 (Amounts in thousands except per share amounts)

                                                                          FOR THE NINE MONTHS
                                                                          ENDED SEPTEMBER 30,
                                                                           2003          2002
                                                                           ----          ----
Interest income
   Loans and purchased receivables, including fees                    $     3,197    $     1,719
   Cash equivalents                                                            12             44
   Federal funds sold                                                          30             18
   Investments                                                                 65             35
                                                                      -----------    -----------
         Total interest income                                              3,304          1,816

Interest expense                                                              263            236
                                                                      -----------    -----------

         Net interest income before credit  for credit losses               3,041          1,580

Credit for credit losses                                                      (38)           (89)
                                                                      -----------    -----------

         Net interest income after credit for credit losses                 3,079          1,669

Noninterest income
   Gain on sale of assets                                                     198           --
   Fee income                                                                 370            313
   Miscellaneous income, net                                                  194            213
                                                                      -----------    -----------
         Total noninterest income                                             762            526

Noninterest expenses
   Salaries, wages, and benefits                                              745            751
   Professional and legal fees                                                297            469
   Accounts receivable factoring management and broker fees                   913            372
   Other management fees - related party                                      233            267
   Loss on impairment of securities available-for-sale                        325           --
   Other general and administrative                                           573            480
                                                                      -----------    -----------
         Total noninterest expenses                                         3,086          2,339
                                                                      -----------    -----------
            Income (loss) before income taxes and minority interest           755           (144)

Income tax expense (credit)                                                     2             (9)
                                                                      -----------    -----------

   Income (loss) before minority interest                                     753           (135)

Income attributable to minority interest                                       54             17
                                                                      -----------    -----------

   Net income (loss)                                                          699           (152)

Other comprehensive income (loss)
   Unrealized gains (losses) on available-for-sale securities
      arising in period                                                       593           (182)
   Gain on sale of securities included in net income                         (274)          --

   Reclassification adjustment - loss included in
        net income                                                            325           --
                                                                       -----------    -----------
   Net unrealized gains (losses)                                              644           (182)

   Income tax expense on other comprehensive income                            --           --
      Other comprehensive income (loss)                               -----------    -----------
                                                                              644           (182)
                                                                      -----------    -----------
   Comprehensive income (loss)                                        $     1,343    $      (334)
                                                                      ===========    ===========
Net income (loss) per common share, basic and diluted                 $       .16    $      (.03)
Weighted average number of common shares:
    Basic                                                               4,366,866      4,366,866
    Diluted                                                             4,367,792      4,366,866

         THE ACCOMPANYING NOTES ARE AN INTEGRAL PART OF THESE STATEMENTS

                                       5




                    WEBFINANCIAL CORPORATION AND SUBSIDIARIES
           CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS (UNAUDITED)
                             (Amounts in thousands)

                                                              FOR THE NINE MONTHS
                                                              ENDED SEPTEMBER 30,
                                                                2003       2002
                                                                ----       ----
Cash flows from operating activities:
Net income (loss) from operations                             $   699    $  (152)
Adjustments to reconcile net income (loss) to net cash
  used in operating activities:
    Minority interest                                              54         17
    Depreciation                                                   23         30
    Credit for credit losses                                      (38)       (89)
    Gain on sale of securities available-for-sale                (274)      --
    Loss on impairment of securities available-for-sale           325       --
    Accretion of loan fees, net                                  (103)       (92)
    Amortization of servicing assets                               42         26
    Amortization of other assets                                    6         12
    Loss on disposition of foreclosed assets                       56       --
Changes in operating assets and liabilities:
    Accrued interest receivable                                   (46)      (288)
    Other assets                                                  (52)      (189)
    Interest payable                                              (97)        39
    Other liabilities                                            (540)        26
                                                              -------    -------
        Net cash provided by (used in) operating activities        55       (660)

Cash flows from investing activities:
    Purchase of investment securities held-to-maturity           (100)      --
    Principal payments received on investment securities
       held-to-maturity                                            10          7
    Purchase of investment securities available-for-sale       (2,675)    (1,177)
    Sale of investment securities available-for-sale              858         60
    Principal payments received on investment securities
       available-for-sale                                       2,054        123
    Purchase of premises and equipment                           --           (2)
    Proceeds from sale of foreclosed assets                      --           19
    Loans originated, receivables purchased, and principal
       collections, net                                           855     (7,187)
                                                              -------    -------
       Net cash used in investing activities                    1,002     (8,157)

Cash flows from financing activities:
    Net increase in noninterest bearing deposits                  126        489
    Net increase (decrease) in NOW/MMA deposits                   (90)       451
    Net increase (decrease) in certificates of deposit         (1,439)     6,733
                                                              -------    -------
       Net cash provided by financing activities               (1,403)     7,673


                                   (continued)


                                       6




                    WEBFINANCIAL CORPORATION AND SUBSIDIARIES
     CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS (UNAUDITED)(CONTINUED)
                             (Amounts in thousands)

                                                                FOR THE NINE MONTHS
                                                                ENDED SEPTEMBER 30,
                                                                  2003      2002
                                                                  ----      ----

        Net increase (decrease) in cash and cash equivalents      (346)    (1,144)

        Cash and cash equivalents at beginning of period         6,546      5,095
                                                               -------    -------

         Cash and cash equivalents at end of period            $ 6,200    $ 3,951
                                                               =======    =======

Supplemental disclosure of cash flow information:
         Cash paid for interest                                    297        197
         Cash paid for income taxes                                  2         (9)

Supplemental disclosure of additional non-cash activities:

During the first quarter of 2003, the Company acquired foreclosed assets of $220
in  lieu of  loan  payments.  In the  third  quarter  of  2003,  these  acquired
foreclosed assets were written down to an expected market value of $200.

At September 30, 2003, the Company had a balance of net  unrealized  gains from
available-for-sale  securities  of $387.  The balance at December 31, 2002 was a
net  unrealized  loss on  available-for-sale  securities of $257. Net unrealized
gains and losses on  available-for-sale  securities  are shown as  "accumulated
other comprehensive income (loss)" on the Condensed  Consolidated  Statements of
Financial Condition.  The change in net unrealized losses on  available-for-sale
securities  between the two periods  resulted in a $644 increase in  accumulated
other comprehensive income.

         THE ACCOMPANYING NOTES ARE AN INTEGRAL PART OF THESE STATEMENTS


                                       7




                    WEBFINANCIAL CORPORATION AND SUBSIDIARIES
        NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS (UNAUDITED)
          (All numbers except shares and per share data in thousands)

1.          SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES

            Basis   of   Presentation--The    accompanying   interim   condensed
consolidated   financial   statements  of   WebFinancial   Corporation  and  its
subsidiaries  (the "Company") are unaudited and have been prepared in conformity
with the  requirements  of  Regulation  S-X  promulgated  under  the  Securities
Exchange Act of 1934, as amended (the "Exchange Act"),  particularly  Rule 10-01
thereof,  which  governs  the  presentation  of  interim  financial  statements.
Accordingly,  they do not include all of the information and footnotes  required
by accounting principles generally accepted in the United States of America. The
accompanying interim condensed  consolidated financial statements should be read
in conjunction with the Company's  significant  accounting policies as set forth
in Note 1 to the  consolidated  financial  statements  in the  Company's  Annual
Report on Form 10-K for the year ended December 31, 2002 (the "2002 10-K").  The
Condensed Consolidated Statement of Financial Condition at December 31, 2002 was
extracted from the Company's audited consolidated financial statements contained
in the 2002  Form  10-K,  and does  not  include  all  disclosures  required  by
accounting  principles  generally  accepted in the United  States of America for
annual consolidated financial statements.

            In the opinion of  management,  all  adjustments  are  comprised  of
normal  recurring  accruals  necessary for the fair  presentation of the interim
financial statements.  Operating results for the nine months ended September 30,
2003 are not necessarily  indicative of the results that may be expected for the
year ending December 31, 2003.

2.          ORGANIZATION AND RELATIONSHIPS

            The  consolidated   financial   statements   include  the  financial
statements  of  WebFinancial  Corporation  and  its  subsidiaries:  WebFinancial
Holding  Corporation,  a wholly owned  subsidiary  of the Company  ("Holdings"),
WebBank ("WebBank"),  Praxis Investment Advisers, Inc. ("Praxis"),  WebFinancial
Government Lending,  Inc.  ("Lending"),  and Web Film Financial,  Inc. ("Film"),
collectively referred to as the Company. WebBank is a Utah-chartered  industrial
loan corporation,  and is subject to comprehensive regulation,  examination, and
supervision by the Federal Deposit Insurance Corporation ("FDIC"), and the State
of Utah Department of Financial  Institutions.  WebBank provides  commercial and
consumer specialty finance services. All inter-company accounts and transactions
have been eliminated in consolidation.

3.          OTHER COMPREHENSIVE INCOME (LOSS)

            Other comprehensive income (loss) is defined as the change in equity
during a period from  transactions  and other  events not included in net income
(loss), excluding changes resulting from investments by owners (e.g., supplement
stock offerings) and distributions to owners (e.g., dividends).

            As of September 30, 2003,  accumulated  other  comprehensive  income
(loss) consisted of the following:

            Balance at December 31, 2002                          $  (257)
            Net change during  the period related
                   to unrealized holding gains
                   on securities available-for-sale
                   arising during the period.                         644
                                                                  -------
            Balance at September 30, 2003                         $   387
                                                                  =======


                                       8




4.          OPERATING SEGMENT INFORMATION

Operating  segments  represent  components of an enterprise about which separate
financial  information  is available  that is  evaluated  regularly by the chief
executive  officer  in  deciding  how to  allocate  resources  and in  assessing
performance.

The Company evaluates segment performance internally based on lines of business.
The  Company  has  identified  two  operating  segments.  The first is  accounts
receivable  factoring.  The second operating  segment,  termed "other," includes
commercial lending, fee for services,  and investment  activities.  The accounts
receivable factoring segment is defined as the program operated by WebBank under
sourcing and servicing  agreements  with two factoring  companies.  Purchases of
factored  accounts  receivable  made by any other entity  within the Company are
included in the other  segment.  As of  September  30,  2003 and 2002,  accounts
receivable factoring balances of $0 and $1,160,000,  respectively,  were held by
entities of the Company other than WebBank.

The following is a summary of selected  operating  segment  information  for the
three months and nine months ended  September 30, 2003 and 2002. The information
represents  operating  results as if the segments were operated on a stand-alone
basis.  However,  the results do not reflect a full allocation of costs based on
the current  structure of the  segments,  and therefore the results might not be
comparable to like information from other companies.

                                                                  Accounts
                                                                 Receivable                            Consolidated
                                                                  Factoring               Other          Company
                                                                 ----------               -----        ------------

THREE MONTHS ENDED SEPTEMBER 30, 2003:
Statement of Operations Information:
Net interest income after provision (credit) for
  credit losses                                                   $    772                $    361       $  1,133
Noninterest income                                                    --                       128            128
Noninterest expenses                                                   458                     862          1,320
                                                                  --------                --------       --------
Income (loss) before taxes and minority interest                       314                    (373)           (59)
Income tax expense                                                    --                      --             --
Income attributable to minority interest                              --                        20             20
                                                                  --------                --------       --------
Net income (loss)                                                 $    314                $   (393)      $    (79)

Statement of Financial Condition Information (as
of September 30, 2003):
Total assets                                                      $  9,195                $ 16,326       $ 25,521
Net loans and purchased receivables                               $  6,389                $  8,078       $ 14,467
Deposits                                                          $  8,021                $  4,196       $ 12,217

THREE  MONTHS ENDED SEPTEMBER 30, 2002:
Statement of Operations Information:
Net interest income after credit for credit losses                $    406                $    269       $    675
Noninterest income                                                    --                       166            166
Noninterest expenses                                                   251                     437            688
                                                                  --------                --------       --------
Income (loss) before taxes and minority interest                       155                      (2)           153
Income tax expense (credit)                                             79                     (49)            30
Income attributable to minority interest                              --                         7              7
                                                                  --------                --------       --------
Net income                                                        $     76                $     40       $    116

Statement of Financial Condition Information (as
of September 30, 2002):
Total assets                                                      $  5,690                $ 20,609       $ 26,299
Net loans and purchased receivables                               $  5,489                $ 12,486       $ 17,975
Deposits                                                          $  5,622                $  9,365       $ 14,987


                                       9



                                                                  Accounts
                                                                 Receivable                            Consolidated
                                                                  Factoring               Other          Company
                                                                 ----------               -----        ------------

NINE MONTHS ENDED SEPTEMBER 30, 2003:
Statement of Operations Information:
Net interest income after credit for credit losses                 $2,064                $ 1,015          $3,079
Noninterest income                                                      -                    762             762
Noninterest expenses                                                1,148                  1,938           3,086
                                                                   ------                -------          ------
Income (loss) before taxes and minority interest                      916                   (161)            755
Income tax expense                                                      -                      2               2
Income attributable to minority interest                                -                     54              54
                                                                   ------                -------          -------
Net income (loss)                                                  $  916                $  (217)         $  699

Statement of Financial Condition Information (as
of September 30, 2003):
Total assets                                                       $9,195                $16,326         $25,521
Net loans and purchased receivables                                $6,389                 $8,078         $14,467
Deposits                                                           $8,021                 $4,196         $12,217

NINE MONTHS ENDED SEPTEMBER 30, 2002:
Statement of Operations Information:
Net interest income after credit for credit losses                 $  652                $ 1,017         $ 1,669
Noninterest income                                                      -                    526             526
Noninterest expenses                                                  492                  1,847           2,339
                                                                   ------                -------         -------
Income (loss) before taxes and minority interest                      160                   (304)           (144)
Income tax expense (credit)                                           102                   (111)             (9)
Income attributable to minority interest                                -                     17              17
                                                                   ------                -------         -------
Net income (loss)                                                  $   58                $  (210)        $  (152)

Statement of Financial Condition Information (as
of September 30, 2002):
Total assets                                                       $5,690                $20,609         $26,299
Net loans and purchased receivables                                $5,489                $12,486         $17,975
Deposits                                                           $5,622                 $9,365         $14,987

5.          SUBSEQUENT EVENTS

            WebFinancial  Corporation is announcing  that notices of termination
have been issued  with  respect to certain  accounts  receivable  factoring  and
service  arrangements,  with the  terminations  to be effective in May 2004, and
that another  accounts  receivable  program was terminated in February 2004. The
arrangement  regarding  accounts  receivable  factoring that has been terminated
effective in May 2004 accounted for substantially all of the revenues and income
from the Company's Accounts  Receivable  Factoring  operating segment for fiscal
2002 and 2003.  It is  possible  that this  termination  may not take  effect as
provided in the termination notice and the arrangement may continue. However, in
the event of  termination,  there can be no  assurance  that the Company will be
able to successfully enter into a replacement arrangement or arrangements.

                                       10




ITEM 2.  MANAGEMENT'S DISCUSSION AND ANALYSIS OR PLAN OF OPERATION

            The  following  discussion  should be read in  conjunction  with the
consolidated unaudited interim financial statements as of and for the nine month
period ended  September 30, 2003 of the Company and the notes thereto  presented
elsewhere herein.

CHANGES IN FINANCIAL CONDITION
SEPTEMBER 30, 2003 COMPARED TO DECEMBER 31, 2002

            Total  assets  decreased  by $644,000  during the nine months  ended
September  30, 2003.  During this  period,  the Company  realized a  significant
increase in purchased  receivables  related to the Company's accounts receivable
factoring program,  which was offset by an even larger decrease in the Company's
commercial loan portfolio.

            The balance of the Company's accounts receivable factoring portfolio
at September 30, 2003 was $6,614,000  versus $4,622,000 at December 31, 2002, an
increase of  $1,992,000 or 43%. All of the  purchased  receivables  generated in
2002 were the result of a sourcing and  servicing  agreement  with one factoring
company  located in Maryland.  The Company  entered into a similar  agreement in
early 2003 with a second factoring company located in Georgia.

            Offsetting the increase in accounts receivable factoring was an even
larger decrease in the Company's  commercial loan  portfolio.  Total  commercial
loans were  $8,981,000  at September  30, 2003, a decrease of  $2,845,000 or 24%
from the prior  year-end total of  $11,826,000.  The majority of the decline was
due to several loan payoffs, one loan sale, and one foreclosure.  The foreclosed
loan balance was  transferred  to other  foreclosed  assets at fair market value
less estimated selling costs. The Company  discontinued  issuing new loans under
its  commercial  loan  program in 2001 but  continues  to service the  remaining
portfolio.

            Regarding  liabilities  and  stockholders'  equity,  certificates of
deposit  decreased by  $1,439,000  from December 31, 2002 to September 30, 2003.
The reduction in certificates of deposit  resulted from a decrease in commercial
loan balances and slower than expected growth in accounts receivable  factoring.
Other liabilities  decreased by $637,000 during the same nine month period.  The
change was primarily due to the purchase of  available-for-sale  securities  for
which  the  trade  date  and  settlement  date  straddled   December  31,  2002.
Stockholders'  equity  increased by  $1,343,000  between  periods as a result of
$699,000 in current year net income and a $644,000 increase in accumulated other
comprehensive income.


CHANGES IN RESULTS OF OPERATIONS
THREE MONTHS ENDED  SEPTEMBER 30, 2003 COMPARED TO THREE MONTHS ENDED  SEPTEMBER
30, 2002

            Net loss for the three months ended September 30, 2003 was $(79,000)
or $(.02) per share compared to net income of $116,000 or $.03 per share for the
same period in 2002, a decrease of $195,000 or $.05 per share.

            The  Company's  net  interest  income after  provision  (credit) for
credit losses  increased by $458,000 in 2003 over the same period in 2002.  Most
of  that  increase  was  due  to  additional   interest  income  from  purchased
receivables.  During the third quarter of 2002, which was also the third quarter
of the Company's  accounts  receivable  factoring  program,  net interest income
after  provision  for credit  losses from  purchased  receivables  was $444,000.
During the third  quarter of 2003,  that  amount  increased  to  $1,089,000,  an
increase of  $645,000 or 145%.  Interest  expense for the Company  decreased  by
$18,000 in 2003 versus the same  period in 2002.  Increases  in average  deposit
balances  were offset by  decreases in interest  rates paid on  deposits,  which
resulted in relatively stable comparative interest expense.


                                       11




            Noninterest  income for the Company  decreased by $38,000 during the
three  months  ended  September  30,  2003  compared to the three  months  ended
September 30, 2002.  Most of the change was due to a $35,000 loss on the sale of
foreclosed assets in the third quarter of 2003.

            The   Company's   noninterest   expenses   increased   by  $632,000,
comparatively,  between the two periods.  Salary  expense  increased by $77,000,
primarily due to a $57,000 accrual of bonus expense in 2003 versus no accrual in
2002.  The other  major  changes  between  periods  were a $135,000  increase in
third-party  management/broker  costs  related  to  increased  activity  in  the
Company's  accounts  receivable   factoring  program  and  a  $325,000  loss  on
impairment of available-for-sale securities.

NINE MONTHS ENDED SEPTEMBER 30, 2003 COMPARED TO NINE MONTHS ENDED SEPTEMBER 30,
2002

            Net income for the nine months ended September 30, 2003 was $699,000
or $.16 per share  compared to a net loss of  $(152,000) or $(.03) per share for
the same  period in 2002.  The  comparison  of net  income  for the two  periods
represented an increase of $851,000 or $.19 per share.

            The  Company's  net interest  income after credit for credit  losses
increased  by  $1,410,000  in 2003 versus the same period in 2002.  Most of that
increase  was due to  additional  interest  income from  purchased  receivables.
During the first  nine  months of 2002,  which was the first nine  months of the
Company's  accounts  receivable  factoring  program,  net interest  income after
credit for credit losses from  purchased  receivables  was $714,000.  During the
first nine months of 2003, that amount  increased to $2,613,000,  an increase of
$1,899,000  or 266%.  Interest  expense for the Company  increased by $27,000 in
2003 versus the same period in 2002.  Increases in average deposit balances were
offset by  decreases  in  interest  rates paid on  deposits,  which  resulted in
relatively stable comparative interest expense.

            Noninterest  income for the Company increased by $236,000 during the
nine months ended September 30, 2003 compared to the nine months ended September
30,  2002.  The  majority  of  the  increase  was  due  to  gains  on  sales  of
available-for-sale   securities.   Fee  income   increased   by   $57,000,   and
miscellaneous  income  decreased  by $19,000 in 2003  versus the same  period in
2002.

            The   Company's   noninterest   expenses   increased   by  $747,000,
comparatively,  between the two nine month periods.  Salary expense  declined by
$6,000 between periods.  An increase of $164,000 in bonus expense accrual during
the first nine months of 2003 versus no accrual in 2002 was offset by the effect
of staff  reductions  that took place in 2002.  The Company's  professional  and
legal fees decreased by $172,000,  mainly due to approximately $100,000 in costs
incurred  in 2002 to  defend  the  Company  against  legal  action  by a  former
employee.  Additionally,  collection  costs related to problem  loans  decreased
significantly  in 2003.  Occupancy  expense  decreased by $25,000 from period to
period,  primarily due to the closing of an office in Washington  D.C. The other
major  changes  between   periods  were  a  $541,000   increase  in  third-party
management/broker  costs related to increased activity in the Company's accounts
receivable   factoring   program   and  a  $325,000   loss  on   impairment   of
available-for-sale securities.

LIQUIDITY AND CAPITAL RESOURCES

            At September 30, 2003 and December 31, 2002,  the Company's cash and
cash  equivalents  totaled  $6,200,000 and  $6,546,000,  respectively.  The cash
balances at December 31, 2002 and September  30,2003 included  liquidity to fund
expected  growth in  purchased  receivables.  Funding  for  WebBank is  obtained
primarily  from  certificates  of deposit  obtained  through  brokers and from a
$500,000 unsecured line of credit with a local  correspondent  bank.  Management
believes that the Company's current cash and cash equivalent balances,  expected
operating  cash flows,  and WebBank  borrowing  sources are adequate to meet its
liquidity needs through at least the next 12 months.


                                       12




            Unused commitments to fund purchased  receivables,  not shown on the
statement of financial  condition,  were  $16,881,000  at September 30, 2003 and
$6,382,000  at December  31,  2002.  The  increase  was due to  additions of new
clients  and  increases  in credit  limits of  existing  clients  related to the
Company's accounts receivable factoring program.

            On October 10,  2003,  the  Company  filed with the  Securities  and
Exchange  Commission  ("SEC") a  registration  statement  covering  rights to be
dividended to the Company's  stockholders  to purchase shares of Common Stock of
the  Company for up to an  aggregate  price of $10  million.  The purpose of the
offering is to raise new capital to be used as  additional  working  capital for
the Company's  business and general  corporate  purposes.  The Board has not yet
finalized  the number of rights to be issued,  the number of shares to be issued
upon exercise of each right, or the subscription price per share with respect to
the rights  offering.  The Company has  received  comments  from the SEC on this
filing. The Company is in the process of responding to such comments.

            The  Company's   officers  and  Steel  Partners,   Ltd.,  an  entity
controlled by the Company's  Chairman,  devote significant time to the Company's
administration   and  exploring   potential   acquisition   and  other  business
opportunities.  There  can be no  assurance  that  the  Company  will be able to
acquire an additional  business,  or that such business will be  profitable.  In
order to finance an acquisition,  the Company may be required to incur or assume
indebtedness or issue securities.

NEW ACCOUNTING PRONOUNCEMENTS

            In  April  2003,  the FASB  issued  SFAS No.  149,  "Accounting  for
Derivative  Instruments  and Hedging  Activities."  SFAS No. 149 amends SFAS No.
133,  "Accounting for Derivative  Instruments and Hedging  Activities." SFAS No.
149 improves  financial  reporting by requiring that  contracts with  comparable
characteristics  be  accounted  for  similarly.  SFAS No. 149 is  effective  for
contracts  entered  into or  modified  after June 30, 2003 and should be applied
prospectively.  The Company  adopted SFAS No. 149 with no material impact on its
financial condition or results of operations for the nine months ended September
30, 2003.

            In May 2003, the FASB issued SFAS No. 150,  "Accounting  for Certain
Financial Instruments with Characteristics of both Liabilities and Equity." SFAS
No. 150 improves financial reporting by establishing standards for how an issuer
classifies and measures certain financial  instruments with  characteristics  of
both liabilities and equity. SFAS No. 150 is effective for financial instruments
entered into or modified  after May 31, 2003,  and otherwise is effective at the
beginning of the first interim period beginning after June 15, 2003. The Company
adopted  SFAS No. 150 with no  material  impact on its  financial  condition  or
results of operations for the nine months ended September 30, 2003.

FORWARD-LOOKING STATEMENTS

            THE FOLLOWING  IMPORTANT FACTORS,  AMONG OTHERS,  COULD CAUSE ACTUAL
RESULTS TO DIFFER MATERIALLY FROM THOSE INDICATED BY FORWARD-LOOKING  STATEMENTS
MADE IN THIS  QUARTERLY  REPORT  ON  FORM  10-QSB  AND  PRESENTED  ELSEWHERE  BY
MANAGEMENT.  ALL FORWARD-LOOKING  STATEMENTS INCLUDED IN THIS DOCUMENT ARE BASED
ON  INFORMATION  AVAILABLE  TO THE COMPANY ON THE DATE  HEREOF,  AND THE COMPANY
ASSUMES NO OBLIGATION TO UPDATE ANY SUCH FORWARD-LOOKING STATEMENTS. A NUMBER OF
UNCERTAINTIES  EXIST THAT COULD AFFECT THE COMPANY'S FUTURE  OPERATING  RESULTS,
INCLUDING, WITHOUT LIMITATION,  GENERAL ECONOMIC CONDITIONS, CHANGES IN INTEREST
RATES, THE COMPANY'S ABILITY TO ATTRACT  DEPOSITS,  AND THE COMPANY'S ABILITY TO
CONTROL COSTS.  BECAUSE OF THESE AND OTHER FACTORS,  PAST FINANCIAL  PERFORMANCE
SHOULD NOT BE  CONSIDERED AN  INDICATION  OF FUTURE  PERFORMANCE.  THE COMPANY'S
FUTURE  OPERATING  RESULTS  MAY VARY  SIGNIFICANTLY.  INVESTORS  SHOULD  NOT USE
HISTORICAL  TRENDS TO  ANTICIPATE  FUTURE  RESULTS  AND SHOULD BE AWARE THAT THE
TRADING PRICE OF THE COMPANY'S COMMON STOCK MAY BE SUBJECT TO WIDE  FLUCTUATIONS
IN RESPONSE TO  QUARTERLY  VARIATIONS  IN OPERATING  RESULTS AND OTHER  FACTORS,
INCLUDING THOSE  DISCUSSED IN THIS QUARTERLY  REPORT ON FORM 10-QSB AND THE RISK
FACTORS IN THE COMPANY'S ANNUAL REPORT ON FORM 10-K.


                                       13



ITEM 3.  CONTROLS AND PROCEDURES

            In the Form 10-QSB for the period  ended  September  30,  2003,  the
Company   reported  the   impairment  on  two  of  its   investment   securities
available-for-sale  as temporary.  The  unrealized  holding losses were excluded
from  earnings  and  reported in  accumulated  other  comprehensive  income as a
separate component of stockholders' equity. This determination was made based on
the  Company's  consideration  of facts and  circumstances,  many of which  were
unique, complex and highly judgmental, known to the Company at the time.

            After  careful  reconsideration  of all the  factors  regarding  the
impairment of its investment in the two subject securities,  the Company has now
determined,  based on additional facts and  circumstances  then available to the
Company,  that the  impairment  as of September  30, 2003,  should be treated as
other  than  temporary.  Therefore,  the  Company  is  amending  the  accounting
treatment  of those  securities  to show the decline in their market value below
cost of $325,000 as a charge to earnings for the periods presented, resulting in
a new cost basis for the  securities.  This charge to  earnings,  along with its
effect  on all other  related  disclosures,  is  incorporated  in the  financial
statements contained in this Form 10-QSB/A.

            In the  future,  the Company  will make every  effort to utilize all
information  available to it in  determining  proper  evaluation of its impaired
securities.   Enhancements  will  be  made  to  the  information  gathering  and
evaluation  processes  including,  for  example,  circulation  of  documentation
regarding impairment determinations to all members of senior management.

            The Company, under the supervision and with the participation of the
Company's management,  including the Company's Chief Executive Officer and Chief
Financial  Officer,  has evaluated the effectiveness of the design and operation
of the Company's  "disclosure  controls and procedures," as such term is defined
in Rules  13a-15e  and 15d-15e  promulgated  under the  Exchange  Act as of this
report.  Based  upon that  evaluation,  the Chief  Executive  Officer  and Chief
Financial  Officer have  concluded  that the Company's  disclosure  controls and
procedures  were effective as of the end of the period covered by this report to
provide  reasonable  assurance that information  required to be disclosed by the
Company in reports that it files or submits  under the Exchange Act is recorded,
processed,  summarized  and reported  within the time  periods  specified in SEC
rules and forms.  There have been no changes in  internal  controls  or in other
factors that could significantly affect these controls subsequent to the date of
their  evaluation,  including any corrective  actions with regard to significant
deficiencies and material weaknesses other than those listed above.

            A control  system,  no matter how well  conceived and operated,  can
provide only  reasonable,  not absolute,  assurance  that the  objectives of the
control  system are met.  Because of the  inherent  limitations  in all  control
systems,  no  evaluation  of controls can provide  absolute  assurance  that all
control  issues  and  instances  of fraud,  if any,  within a company  have been
detected.

                                       14




PART II.  OTHER INFORMATION

ITEM 6.   EXHIBITS AND REPORTS ON FORM 8-K

          (a)   Exhibits

                31.1  Certification  of  Chief  Executive  Officer  pursuant  to
                      Section 302 of the Sarbanes-Oxley Act of 2002.

                31.2  Certification  of  Chief  Financial  Officer  pursuant  to
                      Section 302 of the Sarbanes-Oxley Act of 2002.

                32.1  Certification  of  Chief  Executive  Officer  pursuant  to
                      Section 906 of the Sarbanes-Oxley Act of 2002.

                32.2  Certification  of  Chief  Financial  Officer  pursuant  to
                      Section 906 of the Sarbanes-Oxley Act of 2002.

          (b)   Reports on Form 8-K during the quarter
                None.


                                       15




                                   SIGNATURES


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


Date:  March 8, 2003                        WebFinancial Corporation


                                            By: /s/ Warren G. Lichtenstein
                                                ------------------------------
                                                Warren G. Lichtenstein
                                                President and Chief Executive
                                                Officer



                                            By: /s/ Glen M. Kassan
                                                ------------------------------
                                                Glen M. Kassan
                                                Vice President and Chief
                                                Financial Officer

EX-31

                                                                    Exhibit 31.1

                            Section 302 Certification


I, Warren G. Lichtenstein, certify that:

1)   I have reviewed  this  quarterly  report on Form  10-QSB/A of  WebFinancial
     Corporation, a Delaware corporation;
2)   Based on my knowledge, this report does not contain any untrue statement of
     a material  fact or omit to state a  material  fact  necessary  to make the
     statements made, in light of the circumstances  under which such statements
     were made,  not  misleading  with  respect  to the  period  covered by this
     report;
3)   Based on my  knowledge,  the  financial  statements,  and  other  financial
     information  included  in  this  report,  fairly  present  in all  material
     respects the financial  condition,  results of operations and cash flows of
     the small  business  issuer as of, and for,  the periods  presented in this
     report;
4)   The  small  business  issuer's  other  certifying   officer(s)  and  I  are
     responsible  for  establishing  and  maintaining  disclosure  controls  and
     procedures  (as defined in Exchange Act Rules  13a-15(e) and 15d-15(e)) for
     the small business issuer and have:
     a)   Designed  such  disclosure  controls  and  procedures,  or caused such
          disclosure   controls  and   procedures  to  be  designed   under  our
          supervision, to ensure that material information relating to the small
          business  issuer,  including its  consolidated  subsidiaries,  is made
          known to us by others within those entities,  particularly  during the
          period in which this report is being prepared;
     b)   Evaluated the effectiveness of the small business issuer's  disclosure
          controls and procedures  and presented in this report our  conclusions
          about the effectiveness of the disclosure controls and procedures,  as
          of the  end of the  period  covered  by  this  report  based  on  such
          evaluation; and
     c)   Disclosed  in this  report any change in the small  business  issuer's
          internal  control over financial  reporting  that occurred  during the
          small business issuer's most recent fiscal quarter (the small business
          issuer's  fourth fiscal  quarter in the case of an annual report) that
          has materially affected, or is reasonably likely to materially affect,
          the small business issuer's internal control over financial reporting;
          and
5)   The  small  business  issuer's  other  certifying  officer(s)  and  I  have
     disclosed,  based on our most recent  evaluation  of internal  control over
     financial reporting,  to the small business issuer's auditors and the audit
     committee of the small  business  issuer's  board of directors  (or persons
     performing the equivalent functions):
     a)   All significant  deficiencies and material weaknesses in the design or
          operation  of internal  control  over  financial  reporting  which are
          reasonably  likely to  adversely  affect the small  business  issuer's
          ability   to  record,   process,   summarize   and  report   financial
          information; and
     b)   Any fraud, whether or not material,  that involves management or other
          employees who have a significant  role in the small business  issuer's
          internal control over financial reporting.


Date: March 8, 2004             By: /s/ Warren G. Lichtenstein
                                        ----------------------------------------
                                        Warren G. Lichtenstein
                                        President and Chief Executive Officer

EX-31

                                                                    Exhibit 31.2


                            Section 302 Certification

I, Glen M. Kassan, certify that:

1)   I have reviewed  this  quarterly  report on Form  10-QSB/A of  WebFinancial
     Corporation, a Delaware corporation;
2)   Based on my knowledge, this report does not contain any untrue statement of
     a material  fact or omit to state a  material  fact  necessary  to make the
     statements made, in light of the circumstances  under which such statements
     were made,  not  misleading  with  respect  to the  period  covered by this
     report;
3)   Based on my  knowledge,  the  financial  statements,  and  other  financial
     information  included  in  this  report,  fairly  present  in all  material
     respects the financial  condition,  results of operations and cash flows of
     the small  business  issuer as of, and for,  the periods  presented in this
     report;
4)   The  small  business  issuer's  other  certifying   officer(s)  and  I  are
     responsible  for  establishing  and  maintaining  disclosure  controls  and
     procedures  (as defined in Exchange Act Rules  13a-15(e) and 15d-15(e)) for
     the small business issuer and have:
     a)   Designed  such  disclosure  controls  and  procedures,  or caused such
          disclosure   controls  and   procedures  to  be  designed   under  our
          supervision, to ensure that material information relating to the small
          business  issuer,  including its  consolidated  subsidiaries,  is made
          known to us by others within those entities,  particularly  during the
          period in which this report is being prepared;
     b)   Evaluated the effectiveness of the small business issuer's  disclosure
          controls and procedures  and presented in this report our  conclusions
          about the effectiveness of the disclosure controls and procedures,  as
          of the  end of the  period  covered  by  this  report  based  on  such
          evaluation; and
     c)   Disclosed  in this  report any change in the small  business  issuer's
          internal  control over financial  reporting  that occurred  during the
          small business issuer's most recent fiscal quarter (the small business
          issuer's  fourth fiscal  quarter in the case of an annual report) that
          has materially affected, or is reasonably likely to materially affect,
          the small business issuer's internal control over financial reporting;
          and
5)   The  small  business  issuer's  other  certifying  officer(s)  and  I  have
     disclosed,  based on our most recent  evaluation  of internal  control over
     financial reporting,  to the small business issuer's auditors and the audit
     committee of the small  business  issuer's  board of directors  (or persons
     performing the equivalent functions):
     a)   All significant  deficiencies and material weaknesses in the design or
          operation  of internal  control  over  financial  reporting  which are
          reasonably  likely to  adversely  affect the small  business  issuer's
          ability   to  record,   process,   summarize   and  report   financial
          information; and
     b)   Any fraud, whether or not material,  that involves management or other
          employees who have a significant  role in the small business  issuer's
          internal control over financial reporting.

Date: March 8, 2004                   By:  /s/ Glen M. Kassan
                                      ---------------------------------
                                      Glen M. Kassan
                                      Vice President and Chief Financial Officer

EX-32

                                                                    Exhibit 32.1

                    CERTIFICATION OF CHIEF EXECUTIVE OFFICER

  Pursuant to Section 906 of the Sarbanes-Oxley Act of 2002 (18 U.S.C.ss.1350)


Pursuant to Section 906 of the Sarbanes-Oxley  Act of 2002 (18 U.S.C.  ss.1350),
the undersigned, Warren G. Lichtenstein, Chief Executive Officer of WebFinancial
Corporation,  a Delaware corporation (the "Company") does hereby certify, to his
knowledge, that:

The Quarterly  Report on Form 10-QSB/A for the quarter ended  September 30, 2003
of the Company (the "Report")  fully complies with the  requirements  of Section
13(a) or 15(d)  of the  Securities  Exchange  Act of 1934,  and the  information
contained in the Report fairly presents, in all material respects, the financial
condition and results of operations of the Company.


                                            /s/ Warren G. Lichtenstein
                                           -------------------------------------
                                           Warren G. Lichtenstein
                                           President and Chief Executive Officer
                                           March 8, 2004

EX-32

                                                                    Exhibit 32.2

                    CERTIFICATION OF CHIEF FINANCIAL OFFICER

  Pursuant to Section 906 of the Sarbanes-Oxley Act of 2002 (18 U.S.C.ss.1350)


Pursuant to Section 906 of the Sarbanes-Oxley  Act of 2002 (18 U.S.C.  ss.1350),
the  undersigned,   Glen  Kassan,   Chief  Financial   Officer  of  WebFinancial
Corporation,  a Delaware corporation (the "Company") does hereby certify, to his
knowledge, that:

The Quarterly  Report on Form 10-QSB/A for the quarter ended  September 30, 2003
of the Company (the "Report")  fully complies with the  requirements  of Section
13(a) or 15(d)  of the  Securities  Exchange  Act of 1934,  and the  information
contained in the Report fairly presents, in all material respects, the financial
condition and results of operations of the Company.



                                        /s/ Glen Kassan
                                      ------------------------------------------
                                      Glen Kassan
                                      Vice President and Chief Financial Officer
                                      March 8, 2004