UNITED STATES
                       SECURITIES AND EXCHANGE COMMISSION
                             Washington, D.C. 20549


                                   FORM 10-Q/A


(Mark One)
[X]    QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES
       EXCHANGE ACT OF 1934

                For the quarterly period ended December 31, 2002

                                       OR

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

             For the transition period from _________ to __________


                         Commission file number: 0-4408


                             RESOURCE AMERICA, INC.
             ------------------------------------------------------
             (Exact name of registrant as specified in its charter)

         Delaware                                           72-0654145
- -------------------------------                         ------------------
(State or other jurisdiction of                         (I.R.S. Employer
incorporation or organization)                          Identification No.)

           1845 Walnut Street
              Suite 1000
           Philadelphia, PA                                   19103
- ---------------------------------------                     ----------
(Address of principal executive offices)                    (Zip code)


       Registrant's telephone number, including area code: (215) 546-5005

         Indicate by check mark whether the registrant (1) has filed all reports
required to be filed by Section 13 or 15(d) of the Securities Exchange Act of
1934 during the preceding 12 months (or for such shorter period that the
registrant was required to file such reports), and (2) has been subject to such
filing requirements for the past 90 days.

                                 Yes [X] No [ ]

                      APPLICABLE ONLY TO CORPORATE ISSUERS
         Indicate the number of shares outstanding of each of the issuer's
classes of common stock, as of the latest practicable date:

                      17,160,500 Shares      February 3, 2003




                     RESOURCE AMERICA, INC. AND SUBSIDIARIES
                            INDEX TO QUARTERLY REPORT


                                 ON FORM 10-Q/A

                                                                                                         PAGE
                                                                                                         ----
PART I        FINANCIAL INFORMATION
                                                                                                  
     Item 1. Financial Statements

         Consolidated Balance Sheets - December 31, 2002 (Unaudited)
           and September 30, 2002...........................................................................2

         Consolidated Statements of Income (Unaudited)
           Three Months Ended December 31, 2002 and 2001....................................................3

         Consolidated Statement of Changes in Stockholders' Equity (Unaudited)
           Three Months Ended December 31, 2002.............................................................4

         Consolidated Statements of Cash Flows (Unaudited)
           Three Months Ended December 31, 2002 and 2001....................................................5

         Notes to Consolidated Financial Statements (Unaudited)
           December 31, 2002...........................................................................6 - 15

     Item 2.  Management's Discussion and Analysis of Financial Condition
              and Results of Operations...............................................................16 - 24

     Item 3.  Quantitative and Qualitative Disclosures about Market Risk..............................25 - 27

     Item 4.  Controls and Procedures......................................................................27

PART II       OTHER INFORMATION

     Item 5.  Other Information............................................................................28

     Item 6.  Exhibits and Reports on Form 8-K........................................................28 - 29

SIGNATURES.................................................................................................30








                          PART I. FINANCIAL INFORMATION

ITEM 1. FINANCIAL STATEMENTS

                             RESOURCE AMERICA, INC.
                           CONSOLIDATED BALANCE SHEETS
                        (in thousands, except share data)



                                                                          December 31,      September 30,
                                                                              2002             2002
                                                                          ------------      ------------
                                                                          (unaudited)
                                      ASSETS
                                                                                       
  Current assets:
      Cash and cash equivalents.......................................     $  44,041         $  25,736
      Accounts receivable.............................................        27,332            16,060
      Assets held for disposal........................................             -             5,488
      Prepaid expenses................................................         3,038             2,696
                                                                           ---------         ---------
        Total current assets..........................................        74,411            49,980
  Investments in real estate loans and real estate....................       200,450           202,423
  Investment in RAIT Investment Trust.................................        27,485            29,580
  Property and equipment:
      Oil and gas properties and equipment (successful efforts).......       133,024           126,983
      Gas gathering and transmission facilities.......................        29,371            28,091
      Other...........................................................         8,541             8,390
                                                                           ---------         ---------
                                                                             170,936           163,464
  Less - accumulated depreciation, depletion and amortization.........       (46,917)          (44,287)
                                                                           ---------         ---------
        Net property and equipment....................................       124,019           119,177
  Goodwill............................................................        37,471            37,471
  Intangible assets...................................................         9,312             9,589
  Other assets........................................................        25,361            19,278
                                                                           ---------         ---------
                                                                           $ 498,509         $ 467,498
                                                                           =========         =========
                       LIABILITIES AND STOCKHOLDERS' EQUITY
  Current liabilities:
      Current portion of long-term debt...............................     $   8,499         $   4,320
      Accounts payable................................................        16,346            12,378
      Accrued interest................................................         3,730             1,760
      Liabilities associated with assets held for disposal............             -            11,317
      Accrued liabilities.............................................         9,495             9,808
      Estimated income taxes..........................................             -               893
      Deferred revenue on drilling contracts..........................        22,194             4,948
                                                                            --------         ---------
        Total current liabilities.....................................        60,264            45,424
  Long-term debt:
      Senior..........................................................        65,336            65,336
      Non-recourse....................................................        76,970            68,220
      Other...........................................................        23,703            17,634
                                                                            --------         ---------
                                                                             166,009           151,190
  Liabilities associated with assets held for disposal................             -             3,144
  Asset retirement obligations........................................         3,300                 -
  Deferred revenue and other liabilities..............................         1,174             1,074
  Deferred income taxes...............................................        15,376            13,733
  Minority interest...................................................        19,164            19,394
  Commitments and contingencies.......................................             -                 -
  Stockholders' equity:
      Preferred stock, $1.00 par value: 1,000,000 authorized shares...             -                 -
      Common stock, $.01 par value; 49,000,000 authorized shares......           250               250
      Additional paid-in capital......................................       223,766           223,824
      Less treasury stock, at cost....................................       (76,330)          (74,828)
      Less ESOP loan receivable.......................................        (1,193)           (1,201)
      Accumulated other comprehensive income..........................         5,947             5,911
      Retained earnings...............................................        80,782            79,583
                                                                           ---------         ---------
        Total stockholders' equity....................................       233,222           233,539
                                                                           ---------         ---------
                                                                           $ 498,509         $ 467,498
                                                                           =========         =========

           See accompanying notes to consolidated financial statements


                                       2






                             RESOURCE AMERICA, INC.
                        CONSOLIDATED STATEMENTS OF INCOME
                                   (Unaudited)
                      (in thousands, except per share data)




                                                                               Three Months Ended
                                                                                    December 31,
                                                                          ----------------------------
                                                                            2002                2001
                                                                          --------             -------
                                                                                     
 REVENUES:
      Energy..............................................................$ 17,960             $ 28,757
      Real estate finance.................................................   3,159                3,684
      Interest and other..................................................   2,268                1,341
                                                                          --------             --------
                                                                            23,387               33,782

  COSTS AND EXPENSES:
      Energy..............................................................  10,986               20,601
      Real estate finance.................................................     846                  523
      General and administrative..........................................   1,598                1,266
      Depreciation, depletion and amortization............................   2,983                2,797
      Interest............................................................   3,338                3,315
      Provision for possible losses.......................................     373                  150
      Minority interest in Atlas Pipeline Partners, L.P...................     645                  753
                                                                          --------             --------
                                                                            20,769               29,405

  Income from continuing operations before income taxes...................   2,618                4,377
  Provision for income taxes..............................................     837                1,447
                                                                          --------             --------
  Income from continuing operations.......................................   1,781                2,930

  Discontinued operations:
      Loss on discontinued operations, net of income tax benefit of $354..       -                 (741)
                                                                          --------             --------
      Net income..........................................................$  1,781             $  2,189
                                                                          ========             ========
  Net income (loss) per common share - basic:
  From continuing operations..............................................     .10             $    .17
  Discontinued operations.................................................       -                 (.04)
                                                                          --------             --------
  Net income per common share - basic.....................................     .10             $    .13
                                                                          ========             ========
  Weighted average common shares outstanding..............................$ 17,369               17,432
                                                                          ========             ========
  Net income (loss) per common share - diluted:
  From continuing operations..............................................     .10             $    .17
  Discontinued operations.................................................       -                 (.05)
                                                                          --------             --------
  Net income per common share - diluted...................................     .10             $    .12
                                                                          ========             ========
  Weighted average common shares outstanding..............................$ 17,647               17,749
                                                                          ========             ========



           See accompanying notes to consolidated financial statements


                                       3






                             RESOURCE AMERICA, INC.
            CONSOLIDATED STATEMENT OF CHANGES IN STOCKHOLDERS' EQUITY
                      THREE MONTHS ENDED DECEMBER 31, 2002
                                   (Unaudited)
                        (in thousands, except share data)





                                                Common stock          Additional        Treasury Stock
                                          -----------------------      Paid-In      ----------------------
                                             Shares       Amount       Capital       Shares         Amount
                                          ----------------------------------------------------------------
                                                                                    
Balance, October 1, 2002..................   25,044,066   $  250     $ 223,824    (7,623,198)    $ (74,828)

Treasury shares issued....................                                 (58)        4,503            95

Purchase of treasury shares...............                                          (202,950)       (1,597)

Other comprehensive income................

Cash dividends ($.033 per share)..........

Repayment of ESOP Loan....................

Net income................................
                                             ----------   ------     ---------     ---------     ---------
Balance, December 31, 2002................   25,044,066   $  250     $ 223,766    (7,821,645)    $ (76,330)
                                             ==========   ======     =========     =========     =========




[STUBBED]


                                                      Accumulated
                                             ESOP        Other                        Totals
                                             Loan     Comprehensive     Retained   Stockholders'
                                          Receivable     Income         Earnings      Equity
                                          ------------------------------------------------------
                                                                            
Balance, October 1, 2002.................. $ (1,201)     $  5,911       $ 79,583     $ 233,539

Treasury shares issued....................                                                  37

Purchase of treasury shares...............                                              (1,597)

Other comprehensive income................                     36                           36

Cash dividends ($.033 per share)..........                                  (582)         (582)

Repayment of ESOP Loan....................        8                                          8

Net income................................                                 1,781         1,781
                                           --------      --------       --------     ---------
Balance, December 31, 2002................ $ (1,193)     $  5,947       $ 80,782     $ 233,222
                  === =====                ========      ========       ========     =========


           See accompanying notes to consolidated financial statements



                                       4





                             RESOURCE AMERICA, INC.
                      CONSOLIDATED STATEMENTS OF CASH FLOWS
                                   (Unaudited)
                                 (in thousands)




                                                                                      Three Months Ended
                                                                                           December 31,
                                                                                 ---------------------------
                                                                                      2002           2001
                                                                                     ------         ------
                                                                                        
CASH FLOWS FROM OPERATING ACTIVITIES
  Net income....................................................................   $  1,781         $  2,189
  Adjustments to reconcile net income to net cash provided by operating
      activities:
      Depreciation, depletion and amortization..................................      2,983            2,797
      Amortization of discount on senior notes and deferred finance costs.......        333              251
      Provision for possible losses.............................................        373              150
      Minority interest in Atlas Pipeline Partners, L.P.........................        645              753
      Equity in loss (earnings) of equity investee..............................        348              (87)
      Loss on discontinued operations...........................................          -              741
      Non-cash compensation.....................................................         36               83
      Deferred income taxes.....................................................      1,573              390
      Accretion of discount.....................................................       (695)          (1,201)
      Collection of interest....................................................         91                -
      (Gain) loss on asset dispositions.........................................       (818)              14
      Gain on sale of RAIT Investment Trust shares..............................       (969)               -
      Property impairments and abandonments.....................................          6                6
  Changes in operating assets and liabilities ..................................     10,126           (1,529)
                                                                                   --------         --------
  Net cash provided by operating activities.....................................     15,813            4,557

  CASH FLOWS FROM INVESTING ACTIVITIES:
  Capital expenditures..........................................................     (4,185)          (3,957)
  Principal payments on notes receivable........................................      3,764              687
  Proceeds from sale of assets..................................................          6                5
  Proceeds from sale (purchase of) RAIT Investment Trust shares.................      3,401           (1,890)
  Increase in other assets......................................................     (5,963)            (106)
  Investments in real estate loans and ventures.................................     (1,160)          (6,534)
  Decrease in other liabilities.................................................        (72)             (50)
                                                                                   --------         --------
  Net cash used in investing activities.........................................     (4,209)         (11,845)
                                                                                   --------         --------
  CASH FLOWS FROM FINANCING ACTIVITIES:
  Borrowings....................................................................     42,695           49,083
  Principal payments on borrowings..............................................    (26,828)         (48,768)
  Dividends paid to minority interest of Atlas Pipeline Partners, L.P...........       (875)            (973)
  Dividends paid................................................................       (582)            (582)
  Repayment of ESOP loan........................................................          8                8
  Treasury shares purchased.....................................................     (1,597)            (298)
  Increase in other assets......................................................       (496)             (62)
                                                                                   --------         --------
  Net cash provided by (used in) financing activities...........................     12,325           (1,592)
                                                                                   --------         --------
  Net cash used in discontinued operations......................................     (5,624)            (262)
                                                                                   --------         --------
  Increase (decrease) in cash and cash equivalents..............................     18,305           (9,142)
  Cash and cash equivalents at beginning of period..............................     25,736           48,648
                                                                                   --------         --------
  Cash and cash equivalents at end of period....................................  $  44,041         $ 39,506
                                                                                  =========         ========




           See accompanying notes to consolidated financial statements


                                       5



                             RESOURCE AMERICA, INC.
                   NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
                                December 31, 2002
                                   (Unaudited)

NOTE 1 - MANAGEMENT'S OPINION REGARDING INTERIM FINANCIAL STATEMENTS

         The consolidated financial statements of the Company and its
wholly-owned subsidiaries as of December 31, 2002 and for the three months ended
December 31, 2002 and 2001 are unaudited. Certain information and footnote
disclosures normally included in financial statements prepared in accordance
with accounting principles generally accepted in the United States of America
have been condensed or omitted in this Form 10-Q/A pursuant to the rules and
regulations of the Securities and Exchange Commission. However, in the opinion
of management, these interim financial statements include all the necessary
adjustments to fairly present the results of the interim periods presented. The
unaudited interim consolidated financial statements should be read in
conjunction with the audited financial statements included in the Company's
Annual Report on Form 10-K/A for the fiscal year ended September 30, 2002. The
results of operations for the three months ended December 31, 2002 may not
necessarily be indicative of the results of operations for the full fiscal year
ending September 30, 2003.

         Certain reclassifications have been made to the consolidated financial
statements as of and for the three months ended December 31, 2001 to conform to
the presentation for the three months ended December 31, 2002.

NOTE 2 - SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES

Comprehensive Income

     The following table presents comprehensive income for the periods
indicated:



                                                                                             Three Months Ended
                                                                                                December 31,
                                                                                       -----------------------------
                                                                                         2002                 2001
                                                                                        ------               ------
                                                                                                 (in thousands)
                                                                                                  
  Net income....................................................................       $  1,781              $ 2,189

  Other comprehensive income (loss):
      Unrealized gain on investment in RAIT Investment Trust:
        Unrealized holding gain arising during the period, net of taxes of
           $442 and $206........................................................            858                  400
        Less: reclassification adjustment for gain realized in net income.......           (610)                   -
                                                                                       --------              -------
              Change in unrealized gain.........................................            248                  400
      Unrealized (loss) gain on natural gas futures and option contracts,
        net of taxes of $95 and ($39)...........................................           (212)                  73
                                                                                       --------              -------
                                                                                             36                  473
                                                                                       --------              -------
  Comprehensive income..........................................................       $  1,817              $ 2,662
                                                                                       ========              =======

                                                                                     At December 31,     At September 30,
                                                                                          2002                 2002
                                                                                     ---------------     ----------------
                                                                                                (in thousand)
  Accumulated other comprehensive income (loss) is related to the following
    items, net of taxes:
    Marketable securities - unrealized gains.................................          $  6,371              $ 6,144
    Unrealized hedging losses................................................              (424)                (233)
                                                                                       --------              -------
                                                                                       $  5,947              $ 5,911
                                                                                       ========              =======


                                       6





                             RESOURCE AMERICA, INC.
            NOTES TO CONSOLIDATED FINANCIAL STATEMENTS - (Continued)
                                December 31, 2002
                                   (Unaudited)

NOTE 2 - SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES - (Continued)

Investment in RAIT Investment Trust

         The Company accounts for its investment in RAIT in accordance with
Statement of Financial Accounting Standard No. 115 "Accounting for Certain
Investments in Debt and Equity Securities." This investment is classified as
available-for-sale and as such is carried at fair market value based on market
quotes. Unrealized gains and losses, net of taxes, are reported as a separate
component of stockholders' equity. The cost of securities sold is based on the
specific identification method.

         The following table discloses the pre-tax unrealized gains relating to
the Company's investment in RAIT at the periods indicated:



                                                                        At December 31,   At September 30,
                                                                             2002              2002
                                                                        ---------------   ----------------
                                                                                (in thousands)

                                                                                      
Cost................................................................      $  17,924          $ 20,268
Unrealized gains....................................................          9,561             9,312
                                                                          ---------          --------
Estimated fair value................................................      $  27,485          $ 29,580
                                                                          =========          ========


Fair Value of Financial Instruments

         The following methods and assumptions were used by the Company in
estimating the fair value of each class of financial instruments for which it is
practicable to estimate fair value.

         For cash and cash equivalents, receivables and payables, the carrying
amounts approximate fair value because of the short maturity of these
instruments.

         For investments in real estate loans, because each loan is a unique
transaction involving a discrete property it is impractical to determine their
fair values. However, the Company believes the carrying amounts of the loans are
recoverable based upon the estimated fair value of the underlying collateral.

         The following table provides information about other financial
instruments at the dates indicated:


                                                    December 31, 2002                 September 30, 2002
                                              -----------------------------       ---------------------------
                                              Carrying          Estimated          Carrying       Estimated
                                               Amount           Fair Value           Amount      Fair Value
                                              ---------        ------------       ----------    -------------
                                                   (in thousands)                        (in thousands)
                                                                                      
  Energy debt................................ $ 58,255           $ 58,255          $ 49,345         $ 49,345
  Real estate finance debt...................   32,791             32,791            33,214           33,214
  Senior debt................................   65,336             67,623            65,336           67,623
  Other debt.................................   18,126             18,126             7,615            7,615
                                              --------           --------          --------         --------
                                              $174,508           $176,795          $155,510         $157,797
                                              ========           ========          ========         ========



                                       7





                             RESOURCE AMERICA, INC.
            NOTES TO CONSOLIDATED FINANCIAL STATEMENTS - (Continued)
                                December 31, 2002
                                   (Unaudited)

NOTE 2 - SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES - (Continued)

Earnings Per Share

         Basic earnings per share is determined by dividing net income by the
weighted average number of shares of common stock outstanding during the period.
Earnings (loss) per share - diluted are computed by dividing net income (loss)
by the sum of the weighted average number of shares of common stock outstanding
and dilutive potential shares issuable during the period. Dilutive potential
shares of common stock consist of the excess of shares issuable under the terms
of various stock option and warrant agreements over the number of such shares
that could have been reacquired (at the weighted average price of shares during
the period) with the proceeds received from the exercise of the options and
warrants.

         The components of basic and diluted earnings per share for each year
were as follows:

                                                           Three Months Ended
                                                              December 31,
                                                       ------------------------
                                                            (in thousands)
                                                        2002              2001
                                                       -------          -------
  Income from continuing operations..................  $ 1,781          $ 2,930
  Loss from discontinued operations..................        -             (741)
                                                       -------          -------
  Net income.........................................  $ 1,781          $ 2,189
                                                       =======          =======

  Basic average shares of common stock outstanding...   17,369           17,432
  Dilutive effect of stock option and award plans....      278              317
                                                       -------          -------
  Dilutive average shares of common stock............   17,647           17,749
                                                       =======          =======
Recently Issued Financial Accounting Standards

         In November 2002, the FASB issued Interpretation 45, "Guarantor's
Accounting and Disclosure Requirements for Guarantees, Including Indirect
Guarantees of Indebtedness of Others" (FIN 45). FIN 45 clarifies the
requirements for a guarantor's accounting for and disclosure of certain
guarantees issued and outstanding and that a guarantor is required to recognize,
at the inception of a guarantee, a liability for the obligations it has
undertaken. The objective of the initial measurement of that liability is the
fair value of the guarantee at its inception. The initial recognition and
measurement provisions are applicable on a prospective basis to guarantees
issued or modified after December 31, 2002. The Company is still evaluating the
impact of FIN 45 on its financial position and results of operations.

         In December 2002, the FASB issued Statement of Financial Accounting
Standards, "Accounting for Stock-Based Compensation - Transition and Disclosure"
No. 148 ("SFAS 148"), which is generally effective for fiscal years ending after
December 15, 2002 and, as to certain disclosure requirements, for interim
periods beginning after December 15, 2002. The Company does not believe the
adoption of SFAS 148 will have a material effect on its consolidated financial
position or results of operations.

         In January 2003, the FASB issued Interpretation No. 46, "Consolidation
of Variable Interest Entities" ("FIN 46"). The Company is assessing the impact
of adoption of FIN 46. However, based on management's preliminary assessment, it
is reasonably possible that the Company may be required to consolidate several
entities in which it has an investment. If the Company is required to
consolidate any entities, the assets and related depreciation, liabilities and
non-controlling interests of these entities will be reflected in the Company's
consolidated financial statements.




                                       8




                             RESOURCE AMERICA, INC.
            NOTES TO CONSOLIDATED FINANCIAL STATEMENTS - (Continued)
                                December 31, 2002
                                   (Unaudited)

NOTE 2 - SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES - (Continued)

Supplemental Cash Flow Information

         The Company considers temporary investments with a maturity at the date
of acquisition of 90 days or less to be cash equivalents.

         Supplemental disclosure of cash flow information:



                                                                                 Three Months Ended
                                                                                    December 31,
                                                                              ------------------------
                                                                                2002             2001
                                                                               ------          -------
                                                                                   (in thousands)
                                                                                       
  Cash paid during the period for:
      Interest...............................................................  $1,035          $   891
      Income taxes...........................................................  $    -          $ 1,500
  Non-cash activities include the following:
      Receipt of a note in connection with  the sale of a real estate loan...  $1,350          $     -


Asset Retirement Obligations

         SFAS No. 143, "Accounting for Asset Retirement Obligations" ("SFAS
143") establishes requirements for the accounting for the removal costs
associated with asset retirements. The adoption of SFAS 143 on October 1, 2002
resulted in the recording of an additional cost basis of $3.3 million to oil and
gas properties and equipment, representing the Company's share of estimated
future well plugging costs (as discounted to the present value at the dates the
wells began operations) for wells in which it has a working interest. In
addition, the Company recorded a corresponding retirement obligation liability
of $3.3 million (which includes accretion of that discounted value to September
30, 2002). Accumulated depreciation and depletion did not change as the
additional cost basis associated with the plugging liability was offset by the
estimated salvage value to be realized upon the disposal of the wells. The
cumulative and pro forma effects of initially applying SFAS 143 were not
material to the Company's Consolidated Statements of Income.

         The Company has no assets legally restricted for purposes of settling
asset retirement obligations. Except for the item above, the Company has
determined that there are no other material retirement obligations associated
with tangible long-lived assets.

NOTE 3 - GOODWILL, INTANGIBLE ASSETS AND OTHER ASSETS

Goodwill

         On October 1, 2001, the Company early-adopted SFAS 142 "Goodwill and
Other Intangible Assets," which requires that goodwill no longer be amortized,
but instead tested for impairment at least annually. At that time, the Company
had unamortized goodwill of $31.4 million. The Company evaluates its goodwill at
each year end, and will reflect the impairment of goodwill, if any, in operating
income in the income statement in the period in which the impairment is
indicated. All goodwill recorded on the Company's balance sheets is related to
the Company's energy segment.


                                       9




                             RESOURCE AMERICA, INC.
            NOTES TO CONSOLIDATED FINANCIAL STATEMENTS - (Continued)
                                December 31, 2002
                                   (Unaudited)

NOTE 3 - GOODWILL, INTANGIBLE ASSETS AND OTHER ASSETS - (Continued)

         Changes in the carrying amount of goodwill for the periods indicated
are as follows:


                                                                             Three Months Ended          Year Ended
                                                                                December 31,            September 30,
                                                                             ------------------         -------------
                                                                             2002          2001             2002
                                                                             ----          ----         -------------
                                                                                 (unaudited)
                                                                                         (in thousands)
                                                                                                
Goodwill at beginning of period (less accumulated
    amortization of $4,796, $4,069 and $4,063).........................    $ 37,471       $31,420         $31,420
Additions to goodwill related to prior year asset acquisitions.........           -             -              15
Atlas Pipeline goodwill amortization, whose fiscal year
   began January 1, 2002, at which time it adopted SFAS 142............           -            (6)            (22)
Leasing platform transferred from goodwill to other assets
    in ...................accordance with SFAS 142 (net of accumulated
    amortization of $587)..............................................           -             -            (331)
Syndication network reclassified from other assets
    in accordance with SFAS 142 (net of accumulated
    amortization of $711)..............................................           -             -           6,389
Goodwill at end of period (net of accumulated
                                                                           --------       -------         -------
    amortization of $4,209, $4,069 and $4,209).........................    $ 37,471       $31,414         $37,471
                                                                           ========       =======         =======


         Adjusted net income from continuing operations for the three months
ended December 31, 2001 would have been $2.2 million excluding goodwill
amortization, net of taxes, using the Company's effective tax rate. Adjusted
basic income per share from continuing operations for the three months ended
December 31, 2001 would have been $.13. Adjusted diluted income per share from
continuing operations for the three months ended December 31, 2001 would have
been $.12.

Intangible Assets

         Partnership management and operating contracts and the Company's
equipment leasing operating systems, or leasing platform were acquired through
acquisitions recorded at fair value on their acquisition dates. The Company
amortizes contracts acquired on a declining balance method, over their
respective estimated lives, ranging from eight to thirteen years. The leasing
platform is amortized on the straight-line method over its remaining life of six
years. Amortization expense for the quarters ended December 31, 2002 and 2001
was $318,000 and $320,000, respectively. The aggregate estimated annual
amortization expense for these contracts is approximately $1.3 million for each
of the succeeding five years.

                                                 December 31,  September 30,
                                                     2002           2002
                                                 ------------  -------------
                                                       (in thousands)
Partnership management and operating contracts...  $14,383        $14,343
Leasing platform.................................      918            918
                                                   -------        -------
                                                    15,301         15,261
Accumulated amortization.........................   (5,989)        (5,672)
                                                   -------        -------
Intangible assets, net...........................  $ 9,312        $ 9,589
                                                   =======        =======


                                       10



                             RESOURCE AMERICA, INC.
            NOTES TO CONSOLIDATED FINANCIAL STATEMENTS - (Continued)
                                December 31, 2002
                                   (Unaudited)

NOTE 3 - GOODWILL, INTANGIBLE ASSETS AND OTHER ASSETS - (Continued)

Other Assets

         The following table provides information about other assets at the
dates indicated.


                                                                 December 31,  September 30,
                                                                    2002          2002
                                                                ------------   -------------
                                                                       (in thousands)
                                                                          
  Deferred financing costs (net of accumulated amortization
      of $4,075 and $3,742).....................................  $  2,262        $ 2,122
  Equity method investments in and advances to Trapeza entities.     4,361          3,085
  Investments at lower of cost or market........................     6,081          6,137
  Other.........................................................    12,657          7,934
                                                                  --------        -------
                                                                  $ 25,361        $19,278
                                                                  ========        =======


         Deferred financing costs are amortized over the terms of the related
loans (two to seven years).

         Investments in Trapeza entities are accounted for by the equity method
of accounting as the Company, as a 50% owner of the general partner of these
entities, has the ability to exercise significant influence over its operating
and financial decisions. The Company's combined general and limited partnership
interests in these entities range from 16% to 18%.

         Investments at the lower of cost or market include non-marketable
investments in entities in which the Company has less than a 20% ownership
interest, and in which it does not have the ability to exercise significant
influence over their operating and financial decisions. These investments
include approximately 10% of the outstanding shares of The Bancorp, Inc., a
related party as disclosed in Note 4 in the Company's Annual Report on Form
10K/A for the fiscal year ended September 30, 2002.

NOTE 4 - INVESTMENTS IN REAL ESTATE LOANS AND REAL ESTATE

         The Company primarily focuses its real estate activities on managing
its existing real estate loan portfolio. In addition, one real estate
partnership which we sponsored is in the offering phase. Real estate loans
generally were acquired at discounts from both their face value and the
appraised value of the properties underlying the loans. Cash received by the
Company for payment on each real estate loan is allocated between principal and
interest. The Company also records as income the accretion of a portion of the
difference between its cost basis in a real estate loan and the sum of projected
cash flows therefrom. This accretion of discount amounted to $695,000 and $1.2
million during the three months ended December 31, 2002 and 2001, respectively.
As the Company sells senior lien interests or receives funds from refinancings
of its loans by the borrower, a portion of the cash received is employed to
reduce the cumulative accretion of discount included in the carrying value of
the Company's investments in real estate loans.



                                       11



                             RESOURCE AMERICA, INC.
            NOTES TO CONSOLIDATED FINANCIAL STATEMENTS - (Continued)
                                December 31, 2002
                                   (Unaudited)

NOTE 4 - INVESTMENTS IN REAL ESTATE LOANS AND VENTURES - (Continued)

         At December 31, 2002, the Company held real estate loans having an
aggregate face value of $616.6 million, which were being carried at an aggregate
cost of $186.4 million, including cumulative accretion. The following is a
summary of the changes in the carrying value of the Company's investments in
real estate loans for the periods indicated.


                                                              Three Months Ended
                                                                 December 31,
                                                          --------------------------
                                                            2002             2001
                                                          --------        ----------
                                                                (in thousands)
                                                                
  Loan balance, beginning of period...................... $ 187,542       $ 192,263
  New loan...............................................     1,350               -
  Addition to existing loans.............................     1,160           6,261
  Accretion of discount (net of collection of interest)..       695           1,201
  Collections of principal...............................    (4,393)              -
                                                          ---------       ---------
  Loan balance, end of period............................   186,354         199,725
  Real estate balance, end of period.....................    17,949          16,723
  Allowances for possible losses.........................    (3,853)         (2,679)
                                                          ---------       ---------
  Balance, loans and real estate, end of period.......... $ 200,450       $ 213,769
                                                          =========       =========


         In determining the Company's allowance for possible losses related to
its real estate loans and real estate, the Company considers general and local
economic conditions, neighborhood values, competitive overbuilding, casualty
losses and other factors which may affect the value of loans and real estate.
The value of loans and real estate may also be affected by factors such as the
cost of compliance with regulations and liability under applicable environment
laws, changes in interest rates and the availability of financing. Income from a
property will be reduced if a significant number of tenants are unable to pay
rent or if available space cannot be rented on favorable terms. In addition, the
Company continuously monitors collections and payments from its borrowers and
maintains an allowance for estimated losses based upon its historical experience
and its knowledge of specific borrower collection issues identified. The Company
reduces its investment in real estate loans and real estate by an allowance for
amounts that may become unrealizable in the future. Such allowance can be either
specific to a particular loan or property or general to all loans and real
estate.

         The Company has also adopted the cost recovery method for certain loans
due to unanticipated events such as the loss of a major tenant of an underlying
property, the declaration of bankruptcy and voiding of the lease by a sole
tenant and, for a hotel property underlying a loan, the severe effects of the
post-9/11 travel slump.

         The following is a summary of activity in the Company's allowance for
possible losses related to real estate loans and real estate for the periods
indicated.

                                                            Three Months Ended
                                                               December 31,
                                                          ----------------------
                                                           2002            2001
                                                          ------          ------
                                                               (in thousands)
  Balance, beginning of period........................... $3,480          $2,529
  Provision for possible losses..........................    373             150
                                                          ------          ------
  Balance, end of period................................. $3,853          $2,679
                                                          ======          ======

                                       12




                             RESOURCE AMERICA, INC.
            NOTES TO CONSOLIDATED FINANCIAL STATEMENTS - (Continued)
                                December 31, 2002
                                   (Unaudited)

NOTE 5 - DEBT

         Total debt consists of the following:

                                                  December 31,     September 30,
                                                      2002             2002
                                                  ------------     -------------
                                                         (in thousands)
  Senior debt....................................  $ 65,336          $ 65,336

  Non-recourse debt:
      Energy:
        Revolving and term bank loans............    58,095            49,345
      Real estate finance:
        Revolving credit facilities..............    18,000            18,000
        Other....................................       875               875
                                                   --------          --------
           Total non-recourse debt...............    76,970            68,220
  Other debt.....................................    32,202            21,954
                                                   --------          --------
                                                    174,508           155,510
  Less current maturities........................     8,499             4,320
                                                   --------          --------
                                                   $166,009          $151,190
                                                   ========          ========

         In December 2002, the Company's subsidiary, Atlas Pipeline ("the
Partnership"), entered into a $7.5 million credit facility with Wachovia Bank.
This facility replaced a similar $10.0 million facility administered by PNC
Bank. Borrowings under the facility are secured by a lien on and security
interest in all the property of the Partnership and its subsidiaries, including
pledges by the Partnership of the issued and outstanding equity interests in its
subsidiaries. Up to $3.0 million of the facility may be used for standby letters
of credit. No such letters of credit have been issued under the facility. The
revolving credit facility has a term ending in December 2005 and bears interest
at one of two rates, elected at the Partnership's option:

     o   the base rate plus the applicable margin; or

     o   the adjusted LIBOR plus the applicable margin.

         The base rate for any day equals the higher of the federal funds rate
plus 1/2 of 1% or the Wachovia Bank prime rate. Adjusted LIBOR is LIBOR divided
by 1.00 minus the percentage prescribed by the Federal Reserve Board for
determining the reserve requirement for euro currency funding. The applicable
margin is as follows: o where utilization of the borrowing base is equal to or
less than 50%, the applicable margin is 0.00% for base rate loans and 1.50% for
LIBOR loans;

     o   where utilization of the borrowing base is greater than 50%, but equal
         to or less than 75%, the applicable margin is 0.25% for base rate loans
         and 1.75% for LIBOR loans; and

     o   where utilization of the borrowing base is greater than 75%, the
         applicable margin is 0.50% for base rate loans and 2.00% for LIBOR
         loans.

         The Wachovia credit facility requires the Partnership to maintain
specified net worth and specified ratios of current assets to current
liabilities and debt to EBITDA, and requires it to maintain a specified interest
coverage ratio. The Partnership used this credit facility to pay off its
previous revolving credit facility at PNC Bank. At December 31, 2002, $6.5
million was outstanding under this facility at an interest rate of 2.92%.

         In January 2003, the borrowing limit under this facility increased to
$10.0 million through June 2003, the Company is actively seeking to secure the
availability to $15.0 million.


                                       13




                             RESOURCE AMERICA, INC.
            NOTES TO CONSOLIDATED FINANCIAL STATEMENTS - (Continued)
                                December 31, 2002
                                   (Unaudited)

NOTE 6 - DERIVATIVE INSTRUMENTS AND HEDGING ACTIVITIES

         The Company, through its energy subsidiaries, enters into natural gas
futures and option contracts to hedge its exposure to changes in natural gas
prices. At any point in time, such contracts may include regulated New York
Mercantile Exchange ("NYMEX") futures and options contracts and non-regulated
over-the-counter futures contracts with qualified counterparties. NYMEX
contracts are generally settled with offsetting positions, but may be settled by
the delivery of natural gas.

         The Company formally documents all relationships between hedging
instruments and the items being hedged, including the Company's risk management
objective and strategy for undertaking the hedging transactions. This includes
matching the natural gas futures and options contracts to the hedged asset. The
Company assesses, both at the inception of the hedge and on an ongoing basis,
whether the derivatives are highly effective in offsetting changes in fair value
of hedged items. When it is determined that a derivative is not highly effective
as a hedge or it has ceased to be a highly effective hedge, due to the loss of
correlation between changes in gas reference prices under a hedging instrument
and actual gas prices, the Company will discontinue hedge accounting for the
derivative and further changes in fair value for the derivative will be
recognized immediately into earnings. Gains or losses on these instruments are
accumulated in other comprehensive income (loss) to the extent that these hedges
are deemed to be highly effective as hedges, and are recognized in earnings in
the period in which the hedged item is recognized in earnings.

         At December 31, 2002, the Company had 231 open natural gas futures
contracts related to natural gas sales covering 693,000 dekatherm ("Dth") (net
to the Company) maturing through September 2003 at a combined average settlement
price of $3.58 per Dth. Based on quoted market prices, the fair value of the
Company's open natural gas futures contracts at December 31, 2002, is $3.1
million. As these contracts qualify and have been designated as cash flow
hedges, any gains or losses resulting from market price changes are deferred and
recognized as a component of sales revenues in the month the gas is sold, unless
the hedges are no longer "highly effective." Gains or losses on futures
contracts are determined as the difference between the contract price and a
reference price, generally prices on NYMEX. The Company's net unrealized loss
related to open NYMEX contracts was approximately $622,500 at December 31, 2002
and $316,600 at September 30, 2002. The unrealized loss, net of applicable
taxes, has been recorded as a liability in the Company's December 31, 2002,
Consolidated Balance Sheets and in Stockholders' Equity as a component of
Accumulated Other Comprehensive Income. The Company recognized a loss of $96,000
on settled contracts for the quarter ended December 31, 2002. No contracts were
settled for the quarter ended December 31, 2001. As of December 31, 2002, all of
the deferred net losses on derivative instruments included in accumulated other
comprehensive income (loss) are expected to be reclassified to earnings during
the next nine months. The Company recognized no gains or losses during the
quarter ended December 31, 2002, for hedge ineffectiveness or as a result of the
discontinuance of cash flow hedges.

         Although hedging provides the Company some protection against falling
prices, these activities could also reduce the potential benefits of price
increases, depending upon the instrument.

NOTE 7 - DISCONTINUED OPERATIONS

         In June 2002, the Company adopted a plan to dispose of Optiron
Corporation ("Optiron"). The Company has reduced its 50% interest in Optiron to
10% through a sale to management which was completed in September 2002. In
connection with the sale, the Company forgave $4.3 million of the $5.9 million
of indebtedness owed by Optiron. The remaining $1.6 million was retained by the
Company in the form of a promissory note which is secured by all of Optiron's
assets and by the common stock of Optiron's 90% shareholder. The note bears
interest at the prime rate plus 1% payable monthly; an additional 1% will accrue
until the maturity date of the note in 2022.



                                       14



                             RESOURCE AMERICA, INC.
            NOTES TO CONSOLIDATED FINANCIAL STATEMENTS - (Continued)
                                December 31, 2002
                                   (Unaudited)

NOTE 7 - DISCONTINUED OPERATIONS - (Continued)

         In accordance with SFAS No. 144, the results of operations have been
prepared under the financial reporting requirements for discontinued operations,
pursuant to which, all historical results of Optiron are included in the results
of discontinued operations rather than the results of continuing operations for
all periods presented.

         Summarized operating results of the discontinued Optiron operations are
as follows:
                                                             Three Months Ended
                                                                December 31,
                                                             -------------------
                                                              2002         2001
                                                             ------       ------
                                                               (in thousands)
  Loss from discontinued operations before income taxes..... $   -      $(1,095)
  Income tax benefit........................................     -          354
                                                             -----      -------
  Loss from discontinued operations......................... $   -      $  (741)
                                                             =====      =======

NOTE 8 - OPERATING SEGMENT AND MAJOR CUSTOMER INFORMATION

         The Company's operations include three reportable operating segments.
In addition to the three reportable operating segments, certain other activities
are reported in the "Other energy" and "All other" categories. These operating
segments reflect the way the Company manages its operations and makes business
decisions. The Company does not allocate income taxes to its operating segments.
Operating segment data for the periods indicated are as follows:


Three Months Ended December 31, 2002 (in thousands)


                                           Production
                                Well           and          Other       Real Estate       All
                              Drilling     Exploration    Energy (a)      Finance        Other      Eliminations      Total
                              --------     -----------    ----------    -----------      -----      ------------      -----
                                                                                             
Revenues from
  external customers........  $6,583         $8,069        $ 3,487     $   3,177      $  2,158         $(87)       $ 23,387
Interest income.............       -              -             91            18           229          (87)            251
Interest expense............       -            615             15           418         2,377          (87)          3,338
Depreciation and                   -          1,932            940            66            45            -           2,983
    amortization............
Segment profit..............    (127)         3,620           (529)        1,474        (1,820)           -           2,618
Other significant items:
    Segment assets..........   6,884        137,117         56,376       201,637        96,495            -         498,509


- ---------------------------
(a)   Revenues and expenses from segments below the quantitative thresholds are
      attributable to two operating segments of the Company. Those segments
      include well services and transportation. Theses segments have never met
      any of the quantitative thresholds for determining reportable segments.


                                       15


                             RESOURCE AMERICA, INC.
            NOTES TO CONSOLIDATED FINANCIAL STATEMENTS - (Continued)
                                December 31, 2002
                                   (Unaudited)


Three Months Ended December 31, 2001 (in thousands)


                                            Production
                                Well           and          Other       Real Estate        All
                              Drilling     Exploration    Energy (a)       Finance        Other     Eliminations      Total
                              --------     -----------    ----------    -----------       -----     ------------      -----
                                                                                               
Revenues from
  external customers........   $17,981        $7,326       $4,695         $3,716       $    127         $(63)        $33,782
Interest income.............         -             -          181             46            183          (63)            347
Interest expense............         -           477           28            569          2,304          (63)          3,315
Depreciation and                     -         1,910          830             56              1            -           2,797
    amortization............
Segment profit..............     1,393         2,775          220          2,418         (2,429)                       4,377


- ---------------------------
(a)   Revenues and expenses from segments below the quantitative thresholds are
      attributable to two operating segments of the Company. Those segments
      include well services and transportation. Theses segments have never met
      any of the quantitative thresholds for determining reportable segments.

         Operating profit (loss) per segment represents total revenues less
costs and expenses attributable thereto, including interest, provision for
possible losses and depreciation, depletion and amortization, excluding general
corporate expenses.

         The Company markets its production on a competitive basis. Gas is sold
under various types of contracts ranging from life-of-the-well to short-term
contracts. The Company is party to a ten-year agreement which expires March 2009
to sell the majority of its existing and future production to an affiliate of
First Energy Corporation ("FEC"). Pricing under the contract is established by
index-based formulas which the Company negotiates annually. Approximately 80% of
the Company's current production was dedicated to the performance of this
agreement for the nine month period ended December 31, 2002. Payments from the
affiliate are guaranteed by its parent, FEC, a publicly-traded company
(NYSE:FE).

         The Company anticipates that it will negotiate mutually agreeable
pricing terms for subsequent 12-month periods pursuant to the aforementioned
agreement. Management believes that the loss of any one customer would not have
a material adverse effect as it believes that, under current market conditions,
the Company's production could readily be absorbed by other purchasers.


                                       16





ITEM 2.  MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS
         OF OPERATIONS  (Unaudited)

         When used in this Form 10-Q/A, the words "believes" "anticipates,"
"expects" and similar expressions are intended to identify forward-looking
statements. Such statements are subject to certain risks and uncertainties more
particularly described in Item 1, under the caption "Risk Factors", in our
annual report on Form 10-K/A for fiscal 2002. These risks and uncertainties
could cause actual results to differ materially. Readers are cautioned not to
place undue reliance on these forward-looking statements, which speak only as of
the date hereof. We undertake no obligation to publicly release the results of
any revisions to forward-looking statements which we may make to reflect events
or circumstances after the date of this Form 10-Q/A or to reflect the occurrence
of unanticipated events.

Overview of First Quarter of Fiscal 2003

         Our operating results and financial condition for the first quarter of
fiscal 2003 reflect the continuing importance to us of our energy operations, as
shown in the following tables:

                   Revenues as a Percent of Total Revenues (1)

                                                         Three Months Ended
                                                             December 31,
                                                       -------------------------
                                                         2002            2001
                                                        ------          ------
  Energy (2)........................................      77%             85%
  Real estate finance...............................      14%             11%

                     Assets as a Percent of Total Assets (3)

                                                   December 31,    September 30,
                                                       2002            2002
                                                   ------------    -------------
  Energy............................................   40%             39%
  Real estate finance...............................   40%             44%

- ------------------------------
(1)   We attribute the balance (9% and 4% for the three months ended December
      31, 2002 and 2001, respectively) to revenues derived from assets which do
      not meet the definition of a business segment and corporate assets such as
      cash, common shares held in RAIT Investment Trust and other corporate
      investments.
(2)   Energy revenues decreased in the first fiscal quarter ended December 31,
      2002 as compared to the first fiscal quarter ended December 31, 2001, as a
      result of the timing of drilling funds raised and subsequently converted
      to earnings as wells are drilled. We expect this ratio to increase for the
      remaining quarters of fiscal 2003.
(3)   We attribute the balance (20% and 17% at December 31, 2002 and September
      30, 2002, respectively) to assets which do not meet the definition of a
      business segment and corporate assets , as referred to in (1) above.


                                       17





Results of Operations: Energy

         The following tables set forth information relating to revenues
recognized and costs and expenses incurred, daily production volumes, average
sales prices and production costs per equivalent unit in our energy operations
during the periods indicated:


                                                         Three Months Ended
                                                             December 31,
                                                     ---------------------------
                                                       2002               2001
                                                     --------           --------
                                                           (in thousands)
  Revenues:
      Production..............................       $  8,069           $  7,326
      Well drilling...........................          6,583             17,981
      Well services...........................          1,900              2,098
      Transportation..........................          1,408              1,352
                                                     --------           --------
                                                     $ 17,960           $ 28,757
                                                     ========           ========
  Costs and expenses:
      Production and exploration..............       $  1,586           $  2,042
      Well drilling...........................          5,725             15,620
      Well services...........................            855                917
      Transportation..........................            591                567
      Non-direct..............................          2,229              1,455
                                                     --------           --------
                                                     $ 10,986           $ 20,601
                                                     ========           ========
                                                         Three Months Ended
                                                              December 31,
                                                     ---------------------------
                                                       2002               2001
                                                     --------           --------
  Revenues (in thousands):
      Gas (1).................................       $  7,050          $  6,413
      Oil.....................................       $  1,016          $    908

  Production volumes:
      Gas (Mcf/day) (1) (2)...................         19,346            20,577
      Oil (Bbls/day) (2)......................            447               533

  Average sales prices:
      Gas (per Mmcf) (2)(3)...................       $   3.96           $  3.39
      Oil (per Bbl)...........................       $  24.71           $ 18.53

  Production costs: (4)
      As a percent of production revenues.....             19%               22%
      Per equivalent Mcfe.....................       $    .76           $   .74

- --------------------
(1)   Excludes sales of residual gas and sales to landowners.
(2)   As used in this discussion, "Mcf" and Mmcf" means thousand cubic feet and
      million cubic feet; "Mcfe" and Mmcfe" means thousand cubic feet equivalent
      and million cubic feet equivalent, and "Bbls" means barrels. Bbls are
      converted to Mcfs equivalent using the ratio of six Mcfs to one Bbl.
(3)   Our average sales price before the effects of hedging was $4.01 for the
      quarter ended December 31, 2002. No contracts were settled for the quarter
      ended December 31, 2001.
(4)   Production costs include labor to operate the wells and related equipment,
      repairs and maintenance, materials and supplies, property taxes,
      insurance, gathering charges and production overhead.


                                       18






         Our natural gas revenues were $7.0 million in the first quarter of
fiscal 2003, an increase of $637,000 (10%) from $6.4 million in the first
quarter of fiscal 2002. The increase was due to a 17% increase in the average
sales price of natural gas partially offset by a 6% decrease in production
volumes. The $649,000 increase in gas revenues consisted of $1.1 million
attributable to price increases, partially offset by $449,000 attributable to
volume decreases. We received $3.96 and $3.39 per mcf for our natural gas in the
first quarter of fiscal 2003 and 2002, respectively. As a result, if current
market conditions continue, we believe that our natural gas production revenues
will be higher in the remainder of fiscal 2003 than in fiscal 2002. There was a
decline in our natural gas volumes caused by the curtailment of natural gas
deliveries during the completion of the extension to our Crawford County, PA
system; also, unusually cold weather constrained production from some of our
wells and increased landowner gas usage. We expect volumes to rebound in
subsequent periods.

         Our oil revenues were $1.0 million in the first quarter of fiscal 2003,
an increase of $108,000 (12%) from $908,000 in the first quarter of fiscal 2002.
The increase resulted from a 33% increase in the average sales price of oil and
a 16% decrease in production volumes. The $108,000 increase in oil revenues
consisted of $303,000 attributable to price increases, partially offset by
$195,000 attributable to volume decreases. Oil prices were higher in the first
quarter of fiscal 2003 than in fiscal 2002. The prices we have received for our
oil sold in the first quarter of fiscal 2003 have increased to approximately
$25.00 per barrel. The decrease in oil volumes is a result of the natural
production decline inherent in the life of a well. This decline was not offset
by new wells added, as the majority of the wells we have drilled during the past
several years have targeted gas reserves.

         Our well drilling revenues and expenses represent the billing and costs
associated with the completion of 37 and 91 net wells for partnerships sponsored
by Atlas America in the first quarter of fiscal 2003 and 2002, respectively. Our
well drilling gross margin was $858,000 in the first quarter of fiscal 2003, a
decrease of $1.5 million from $2.4 million in the first quarter of fiscal 2002
due to a decrease in the number of wells drilled ($1.25 million) and the gross
margin per well ($250,000). The decrease in the number of wells drilled was a
result of an acceleration of the timing of funds raised through our private
investment partnerships and, thus, the drilling of wells. We recognized the
majority of the drilling revenue from our calendar 2002 private investment
partnerships through September 30, 2002. The majority of the revenue associated
with our calendar 2001 private investment partnerships was recognized through
December 31, 2001. We anticipate that drilling revenues for the second quarter
of fiscal 2003 will be greater than the drilling revenues for the second quarter
of fiscal 2002 as a result of an increase in the amount of funds raised in our
calendar 2002 public investment partnership as compared to our calendar 2001
public investment partnership. Demand for drilling equipment and services
increased in the fiscal year ended September 30, 2002, resulting in an increase
in the cost to us of obtaining such equipment and services in the quarter ended
December 31, 2001. These costs have decreased slightly in the first quarter of
fiscal 2003. In fiscal 2002, we changed the structure of our drilling contracts
to a cost-plus basis from a turnkey basis. Cost-plus contracts protect us in an
inflationary environment while limiting our profit margin. We continue to enter
into drilling contracts with gross margin rates of 13% and expect to obtain that
margin through fiscal 2003.

         Our well services revenues decreased $198,000 (9%) primarily as a
result of a decrease in services provided for third parties in the first quarter
of fiscal 2003 as compared to the first quarter of fiscal 2002. Our well service
expenses decreased $62,000 (7%) in the first quarter of fiscal 2003 as compared
to the first quarter of fiscal 2002. The decrease in fiscal 2003 also resulted
from a reduction in services provided for third parties.

         Our production and exploration expenses were $1.6 million in the first
quarter of fiscal 2003, a decrease of $456,000 (22%) from $2.0 million in the
first quarter of fiscal 2002. This decrease resulted primarily from an increase
in credit received for our contribution of leases to our investment partnership,
which offsets our exploration expense.


                                       19






         Our non-direct expenses were $2.2 million in the first quarter of
fiscal 2003, an increase of $774,000 (53%) from $1.5 million in the first
quarter of fiscal 2002. These expenses include, among other things, salaries and
benefits not allocated to a specific energy activity, costs of running our
energy corporate office, partnership syndication activities and outside
services. These expenses are partially offset by reimbursements we receive from
our partnership drilling and management activities. These reimbursements
decreased $670,000 as a result of 54 less wells drilled in the first quarter of
fiscal 2003 as compared to the first quarter of 2002, discussed earlier. We
anticipate that our reimbursements from our drilling investment partnerships for
the second quarter of fiscal 2003 will be greater than the reimbursements for
the second quarter of fiscal 2002 as a result of an increase in the amount of
funds raised in our calendar 2002 public investment partnership as compared to
our 2001 public investment partnerships. In addition, the cost of running our
energy corporate office, including postage and telephone costs, increased
approximately $100,000 as a result of continued growth in our energy operations.

Results of Operations: Real Estate Finance

         The following table sets forth certain information relating to the
revenue recognized and costs and expenses incurred in our real estate finance
operations during the periods indicated:

                                                         Three Months Ended
                                                            December 31,
                                                     -----------------------
                                                      2002            2001
                                                     -------        --------
                                                          (in thousands)
  Revenues:
      Interest...................................... $ 1,931        $ 2,328
      Accreted discount.............................     695          1,201
      Gain on resolution of loan....................     813              -
      Equity in (loss) earnings of equity investee..    (348)            87
      Net rental and fee income.....................      68             68
                                                     -------        -------
                                                     $ 3,159        $ 3,684
                                                     =======        =======

  Costs and expenses................................ $   846        $   523
                                                     =======        =======

         Revenues from our real estate finance operations decreased $525,000
(14%), from $3.7 million in the first quarter of fiscal 2002 to $3.2 million in
the first quarter of fiscal 2003. This decrease primarily resulted from the
following:

         A decrease of $903,000 (26%) in interest and accreted discount
resulting primarily from the following:

         o  The sale of two loans, one in January 2002 and one in June 2002,
            which decreased interest income by $782,000 in the first quarter of
            fiscal 2003 as compared to the first quarter of fiscal 2002.

         o  The completion of accretion of discount on three loans decreased
            interest income by $383,000 in the first quarter of fiscal 2003 as
            compared to the first quarter of fiscal 2002.

         o  An increase of $243,000 in our accretion due to an increase in our
            estimated cash flows relating to several properties. These increases
            resulted from improvements in general economic conditions in the
            areas in which these properties are located, which enabled the
            properties to obtain increased current rents or occupancy rates and
            thus increased our estimates of cash flows from these properties.


                                       20




         An increase of $813,000 in gain on resolution of a loan in the first
quarter of fiscal 2003 due to the sale of one loan having a book value of $4.2
million for $5.0 million. No loans were sold in the first quarter of fiscal
2002.

         A loss of $348,000 from our share of the operating results of our
unconsolidated real estate investments accounted for on the equity method in the
first quarter of fiscal 2003 as compared to income of $87,000 in the first
quarter of fiscal 2002. The loss was the result of an increase in depreciation
and an operating loss on a property in which we acquired an interest in March
2002.

         Costs and expenses of our real estate finance operations were $846,000
in the first quarter of fiscal 2003, an increase of $323,000 (62%) from $523,000
in the first quarter of fiscal 2002. The increase primarily resulted from
approximately $250,000 in non-recoverable payments made to protect our interests
in certain properties underlying our investments in real estate loans. In
addition, wages and benefits increased $76,000 in the first quarter of fiscal
2003 as a result of the addition of a new president and other personnel in our
real estate subsidiary in anticipation of the expansion of our real estate
operations through the sponsorship of real estate investment partnerships as
well as the on-going management of our existing portfolio of commercial loans
and real estate joint ventures. The one real estate partnership we sponsored in
fiscal 2002 is still in its offering phase and, consequently, did not generate
fees or other revenues for us.

Results of Operations: Other Revenues, Costs and Expenses

         Our interest and other income was $2.3 million in the first quarter of
fiscal 2003, an increase of $927,000 (69%) as compared to $1.3 million for the
first quarter of fiscal 2002. The following table sets forth information
relating to interest and other income during the periods indicated:

                                                          Three Months Ended
                                                             December 31,
                                                        --------------------
                                                         2002          2001
                                                        -------       ------
                                                            (in thousands)
Interest income....................................     $   251       $  347
Dividend income....................................         789          804
Gains (losses) on sale of assets...................         974          (14)
Other..............................................         254          204
                                                        -------       ------
                                                        $ 2,268       $1,341
                                                        =======       ======

         Interest income decreased $96,000 to $251,000 for the first quarter of
fiscal 2003 from $347,000 for the first quarter of fiscal 2002. The decrease was
primarily due to lower average rates earned on temporary funds invested. Gains
on sale of assets for the first quarter of fiscal 2003 were $974,000, as
compared to a loss of $14,000 for the first quarter of fiscal 2002. This
primarily reflects the sale of 163,500 shares in RAIT Investment Trust from
which we received net proceeds of $3.4 million and a realized a gain of
$969,000.

         Our general and administrative expenses increased $332,000 (26%) to
$1.6 million in the first quarter of fiscal 2003, as compared to $1.3 million in
the first quarter of fiscal 2002. This increase primarily resulted from
increases in salaries and benefits due to the addition of personnel.

         Our depreciation, depletion and amortization consists mainly of
depletion of oil and gas properties and amortization of contracts acquired. Our
depletion as a percentage of oil and gas production revenues was 24% in the
first quarter of fiscal 2003 compared to 26% in the first quarter of fiscal
2002. The variance from period to period is directly attributable to changes in
our oil and gas reserve quantities, product prices and fluctuations in the
depletable cost basis of oil and gas properties.

         The minority interest in Atlas Pipeline Partners represents 48% of the
net earnings of Atlas Pipeline Partners. The minority interest arose from the
sale in February 2000 of our natural gas gathering operations to Atlas Pipeline
Partners and Atlas Pipeline Partners' subsequent initial public offering.
Because we own a 52% interest in Atlas Pipeline Partners, it is included in our
consolidated financial statements and the ownership by the public is shown as a
minority interest.


                                       21





         Our provision for possible losses increased $223,000 (149%) to $373,000
in the first quarter of fiscal 2003 as compared to $150,000 in the first quarter
of fiscal 2002. This increase resulted from certain payments for operating
expenses of the properties underlying our loans, including insurance and
property taxes and our assessment of economic conditions in the areas in which
properties underlying our real estate loans are located.

         Our effective tax rate decreased to 32% in the first quarter of fiscal
2003 as compared to 33% in the first quarter of fiscal 2002 as a result of a
decrease in certain unfavorable permanent differences, partially offset by a
decrease in tax credits utilized.

Discontinued Operations

         In accordance with SFAS 144 "Accounting for the Impairment or Disposal
of Long Lived Assets," our decision in fiscal 2002 to dispose of Optiron
Corporation, our former energy technology subsidiary, resulted in the
presentation of Optiron as a discontinued operation for the three months ended
December 31, 2001. We had held a 50% equity interest in Optiron; as a result of
the disposition, we currently hold a 10% equity interest in Optiron.

Liquidity and Capital Resources

         General. For the quarters ended December 31, 2002 and 2001, our major
sources of liquidity have been funds generated by operations, funds raised from
investor partnerships relating to our energy operations, resolutions of real
estate loans and borrowings under our existing energy, real estate finance and
corporate credit facilities and the sale of our RAIT shares. We have employed
these funds principally in the expansion of our energy operations, the
repurchase of our common stock and the acquisition of senior lien interests
relating to our real estate loans. The following table sets forth our sources
and uses of cash for the periods indicated:

                                                          Three Months Ended
                                                             December 31,
                                                    ---------------------------
                                                      2002               2001
                                                    --------           --------
                                                            (in thousands)
  Provided by operations..........................  $ 15,813           $  4,557
  Used in investing activities....................    (4,209)           (11,845)
  Provided by (used in) financing activities......    12,325             (1,592)
  Used in discontinued operations.................    (5,624)              (262)
                                                    --------           --------
                                                    $ 18,305           $ (9,142)
                                                    ========           ========

         We had $44.0 million in cash and cash equivalents on hand at December
31, 2002, as compared to $25.7 million at September 30, 2002. Our ratio of
earnings from continuing operations before income taxes, minority interest and
interest expense to fixed charges was 2.0 to 1.0 in the first quarter of fiscal
2003 as compared to 2.6 to 1.0 in the first quarter of fiscal 2002. Our working
capital at December 31, 2002 was $14.1 million, an increase of $9.5 million from
$4.6 million at September 30, 2002. This increase in working capital is due to
an increase in cash at December 31, 2002 due to higher borrowings than at
September 30, 2002, credit availability on our energy line of credit was
increased by $7.5 million in the quarter ended December 31, 2002, we also
borrowed $5.0 million from Commerce Bank in the quarter ended December 31, 2002.
Our long-term debt (including current maturities) to total capital ratio at
December 31, 2002 was 75% as compared to 67% at September 30, 2002.


                                       22




         Cash flows from operating activities. Cash provided by operations is an
important source of short-term liquidity for us. It is directly affected by
changes in the price of natural gas and oil, and interest rates as well as our
ability to raise funds for our drilling investment partnerships and the strength
of the market for rentals of the types of properties secured by our real estate
loans. Net cash provided by operating activities increased $11.3 million in the
first quarter of fiscal 2003 to $15.8 million from $4.6 million in the first
quarter of fiscal 2002, as a result of the following:

         o  Changes in operating assets and liabilities increased operating cash
            flow by $12.1 million in the first quarter of fiscal 2003, compared
            to the first quarter of fiscal 2002. This increase was primarily due
            to an increase of $5.9 million in current liabilities due to the
            timing of payments for payables and accrued interest and an increase
            of $4.2 million in investor funds raised in the quarter ended
            December 31, 2002 as compared to September 30, 2002. In addition, a
            tax payment of $1.5 million was made in the quarter ended December
            31, 2001. No such tax payment was required in the quarter ended
            December 31, 2002.

         o  Net income from operations in our energy and real estate segments
            decreased $1.8 million. Our energy net income decreased primarily
            due to the decreased number of wells drilled in the first quarter of
            fiscal 2003 compared to the first quarter of fiscal 2002, as we
            discussed in "Results of Operations: Energy." In real estate
            finance, interest income decreased and costs associated with loans
            increased in the first quarter of fiscal 2003 as compared to the
            first quarter of fiscal 2002.


         Cash flows from investing activities. Net cash used in our investing
activities decreased $7.6 million in the first quarter of fiscal 2003 as
compared to the first quarter of fiscal 2002, as a result of the following:

         o  Net payments on notes receivable and investments in real estate
            loans and ventures increased $8.5 million. Payments received on real
            estate investments and ventures are normally dependent on third
            party refinancing or from the sale of a loan and vary from period to
            period. Additionally, investments in loans and ventures are unique
            to each property and will vary from period to period depending upon
            a number of factors. In the first quarter of fiscal 2003, we
            received proceeds of $3.7 million from the resolution of one loan.
            In the prior fiscal period we invested $2.9 million in the
            acquisition of two participations while additions to existing loans
            were $2.2 million greater than in the quarter ended December 31,
            2002.

         o  In the first quarter of fiscal 2003 we received proceeds of $3.4
            million from the sale of 163,500 RAIT shares compared to the
            purchase of $1.9 million in RAIT shares in the first quarter of
            fiscal 2002.

         o  Increases in other assets increased by $5.9 million. For the first
            quarter of fiscal 2003 we invested $1.3 million in, and lent $1.8
            million to our Trapeza entities and invested $3.2 million in leases
            associated with our equipment leasing subsidiary, LEAF Financial
            Corporation ("LEAF").

         Cash flows from financing activities. Net cash provided by our
financing activities increased $13.9 million in the first quarter of fiscal 2003
as compared to the first quarter of fiscal 2002, as a result of the following:

         o  Net borrowings increased $15.6 million, in part to fund our drilling
            investment programs.

         o  Purchases of treasury shares increased $1.3 million.

Capital Requirements

         During the quarter ended December 31, 2002, our capital requirements
related primarily to our investments in our drilling partnerships and pipeline
expansions in which we invested $2.3 million and $1.3 million, respectively. For
the quarter ended December 31, 2002 and the remaining quarters of fiscal 2003 we
funded and expect to fund these capital expenditures through cash on hand,
borrowings under the credit facilities, and from operations. We, through our
energy subsidiaries, have established two credit facilities to facilitate the
funding of our capital expenditures. In December 2002, we obtained an increase
in our borrowing base on our energy credit facility administered by Wachovia
Bank to $52.5 million. In addition, we replaced our $10.0 million PNC Bank
credit facility with a new $7.5 million credit facility with Wachovia Bank. From
January 2003 through June 2003, we have obtained an increase in this facility to
$10.0 million. We are currently seeking to increase this facility on a long term
basis to $15.0 million. We cannot assure you, however, that we will obtain the
increase we seek.

                                       23





         The level of capital expenditures we must devote to our energy
operations are dependent upon the level of funds raised through our drilling
investment partnerships. We have budgeted to raise up to $60.0 million in fiscal
2003 through drilling partnerships which we sponsor. We believe cash flow from
operations and amounts available under our credit facilities will be adequate to
fund our contributions to these partnerships. However, the amount of funds we
raise and the level of our capital expenditures will vary in the future
depending on market conditions for natural gas and other factors.

         We continuously evaluate acquisitions of gas and oil and pipeline
assets. In order to make any acquisition, we believe we will be required to
access outside capital either through debt or equity placements or through joint
venture operations with other energy companies. There can be no assurance that
we will be successful in our efforts to obtain outside capital.

Contractual Obligations and Commercial Commitments

         The following tables set forth our obligations and commitments as of
December 31, 2002.



                                                                                     Payments Due By Period
                                                                                         (in thousands)
                                                                --------------------------------------------------------------
                                                                                                 
 Contractual cash obligations:                                  Less than            1 - 3             4 - 5          After 5
                                                 Total            1 Year             Years             Years           Years
                                               ---------        ----------         ---------          -------         -------
   Long-term debt...........................   $ 174,508          $ 8,499          $ 164,067          $ 1,942          $   -
   Capital lease obligations................           -                -                  -                -              -
   Operating leases.........................       4,720            1,434              2,021            1,157            108
   Unconditional purchase obligations.......           -                -                  -                -              -
   Other long-term obligations..............           -                -                  -                -              -
                                               ---------          -------          ---------          -------          -----
   Total contractual cash obligations.......   $ 179,228          $ 9,933          $ 166,088          $ 3,099          $ 108
                                               =========          =======          =========          =======          =====







                                                                           Amount of Commitment Expiration Per Period
                                                                                         (in thousands)
                                                                ---------------------------------------------------------------
                                                                                                    
 Other commercial commitments:                                   Less than           1 - 3             4 - 5          After 5
                                                 Total            1 Year             Years             Years           Years
                                                --------        ----------          --------          -------         --------
   Lines of credit........................     $   6,048         $  5,048           $  1,000          $     -         $      -
   Standby letter of credit...............           905                -                905                -                -
   Guarantees.............................         3,176              980              2,196                -                -
   Standby replacement commitments........        10,533            5,860              4,673                -                -
   Other commercial commitments...........       194,482            2,979             61,051            3,971          126,481
                                               ---------         --------           --------          -------         --------
   Total commercial commitments...........     $ 215,144         $ 14,867           $ 69,825          $ 3,971         $126,481
                                               =========         ========           ========          =======         ========


Critical Accounting Policies

         The discussion and analysis of our financial condition and results of
operations are based upon our consolidated financial statements, which have been
prepared in accordance with accounting principles generally accepted in the
United States. The preparation of these financial statements requires us to make
estimates and judgments that affect the reported amounts of our assets,
liabilities, revenues and cost and expenses, and related disclosure of
contingent assets and liabilities. On an on-going basis, we evaluate our
estimates, including those related to provision for possible losses, deferred
tax assets and liabilities, goodwill and identifiable intangible assets, and
certain accrued liabilities. We base our estimates on historical experience and
on various other assumptions that we believe reasonable under the circumstances,
the results of which form the basis for making judgments about the carrying
values of assets and liabilities that are not readily apparent from other
sources. Actual results may differ from these estimates under different
assumptions or conditions.


                                       24



         For a detailed discussion on the application of policies critical to
our business operations and other accounting policies, see Note 2 of the "Notes
to Consolidated Financial Statements" in our Annual Report on Form 10-K/A.

Recently Issued Financial Accounting Standards

         In December 2002, the Financial Accounting Standards Board, which we
refer to as FASB issued Statement of Financial Accounting Standards, which we
refer to as SFAS 148, "Accounting for Stock-Based Compensation - Transition and
Disclosure." SFAS 148, which is generally effective for fiscal years ending
after December 15, 2002 and, as to certain disclosure requirements, for interim
periods beginning after December 15, 2002 we do not believe the adoption of SFAS
148 will have a material effect on our consolidated financial position or
results of operations.

         In November 2002, the FASB issued Interpretation 45, "Guarantor's
Accounting and Disclosure Requirements for Guarantees, Including Indirect
Guarantees of Indebtedness of Others" (FIN 45). FIN 45 clarifies the
requirements for a guarantor's accounting for and disclosure of certain
guarantees issued and outstanding and that a guarantor is required to recognize,
at the inception of a guarantee, a liability for the obligations it has
undertaken. The objective of the initial measurement of that liability is the
fair value of the guarantee at its inception. The initial recognition and
measurement provisions are applicable on a prospective basis to guarantees
issued or modified after December 31, 2002. Management is still evaluating the
impact of FIN 45 on its financial position and results of operations.

         In January 2003, the FASB issued Interpretation No. 46, "Consolidation
of Variable Interest Entities" ("FIN 46"). The Company is assessing the impact
of adoption of FIN 46. However, based on management's preliminary assessment, it
is reasonably possible that the Company may be required to consolidate several
entities in which it has an investment. If the Company is required to
consolidate the any entities, the assets and related depreciation, liabilities
and non-controlling interests of these entities will be reflected in the
Company's consolidated financial statements.


                                       25


ITEM 3.       QUANTITATIVE AND QUALITATIVE DISCLOSURES ABOUT MARKET RISK

         The primary objective of the following information is to provide
forward-looking quantitative and qualitative information about our potential
exposure to market risks. The term "market risk" refers to the risk of loss
arising from adverse changes in interest rates and oil and gas prices. The
disclosures are not meant to be precise indicators of expected future losses,
but rather indicators of reasonable possible losses. This forward-looking
information provides indicators of how we view and manage our ongoing market
risk exposures. All of our market risk sensitive instruments were entered into
for purposes other than trading.

General

         We are exposed to various market risks, principally, fluctuating
interest rates and changes in commodity prices. These risks can impact our
results of operations, cash flows and financial position. We manage these risks
through regular operating and financing activities and periodically use
derivative financial instruments.

         The following analysis presents the effect on our earnings, cash flows
and financial position as if the hypothetical changes in market risk factors
occurred on December 31, 2002. Only the potential impacts of hypothetical
assumptions are analyzed. The analysis does not consider other possible effects
that could impact our business.

Energy

         Interest Rate Risk. At December 31, 2002, the amount outstanding under
a revolving loan attributable to our energy operations had increased to $51.6
million from $43.7 million at September 30, 2002. The weighted average interest
rate for this facility increased from 3.86% at September 30, 2002 to 4.03% at
December 31, 2002 due to an increase of $7.9 million in prime borrowings (due to
temporary funding needs) which bear interest at a higher rate than our LIBOR
borrowings. Holding all other variables constant, if interest rates
hypothetically increased or decreased by 10%, our net annual income would change
by approximately $141,000.

         We have a $7.5 million revolving credit facility to fund the expansion
of Atlas Pipeline Partners' existing gathering systems and the acquisitions of
other gas gathering systems. In the quarter ended December 31, 2002, we drew
$895,200 under this facility. The balance outstanding as of December 31, 2002
was $6.5 million. At December 31, 2002, the weighted average interest rate was
2.92% and 3.27% at December 31, 2002 and September 30, 2002, respectively. A
hypothetical 10% change in the average interest rate applicable to this debt
would result in an immaterial change in our earnings, cash flow and financial
position.

         Commodity Price Risk. Our major market risk exposure in commodities is
fluctuations in the pricing of our gas and oil production. Realized pricing is
primarily driven by the prevailing worldwide prices for crude oil and spot
market prices applicable to United States natural gas production. Pricing for
gas and oil production has been volatile and unpredictable for many years. To
hedge exposure to changing natural gas prices we use financial hedges. Through
our hedges, we seek to provide a measure of stability in the volatile
environment of natural gas prices. Our risk management objective is to lock in a
range of pricing for expected production volumes, allowing us to forecast future
earnings within a predictable range.




                                       26




Energy - (Continued)

         Our contract with First Energy Solutions Corporation allow us from time
to time to "lock in" the sales price for some of our natural gas production
volumes to be delivered in either the current month or in future months, rather
than selling those same production volumes at contract prices in the month
produced. Annually, we negotiate with certain purchasers to deliver a portion of
natural gas produced for the upcoming twelve months. Most of these contracts are
indexed based and the price we receive for our gas changes as the underlying
index changes. Through the year, at our discretion, we are permitted to
designate a portion of our negotiated production volumes to be purchased at the
prevailing contract price at that time, for delivery in either the current month
or in future production months. For the quarter ended December 31, 2002,
approximately 56% of produced volumes were sold in this manner. For the fiscal
year ending September 30, 2003, we estimate in excess of 55% of our produced
natural gas volumes will be sold in this manner, leaving the remaining 45% of
our produced volumes to be sold at contract prices in the month produced or at
spot market prices. Considering those volumes already designated for the fiscal
year ending September 30, 2003, and current indices, a theoretical 10% upward or
downward change in the price of natural gas would result in approximately a 6%
change in our projected natural gas revenues.

         We periodically enter into financial hedging activities with respect to
a portion of our projected gas production. We recognize gains and losses from
the settlement of these hedges in gas revenues when the associated production
occurs. The gains and losses realized as a result of hedging are substantially
offset in the market when we deliver the associated natural gas. We do not hold
or issue derivative instruments for trading purposes.

         As of December 31, 2002, we had gas hedges in place covering 693,000
dekatherm maturing through September 30, 2003. We include an adjustment of
$622,500 on our balance sheet to mark these hedges to their fair value. "Fair
value" represents the amount that we estimate we would have realized if we had
terminated the hedges on that date. As these contracts qualify and have been
designated as cash flow hedges, we determine gains and losses on them resulting
from market price changes monthly and reflect them in accumulated other
comprehensive income (loss) until the month in which we sell the hedged
production. At that time, the amount included in accumulated other comprehensive
income (loss) related to the production sold is included in production revenues.
We determine gains or losses on open and closed hedging transactions as the
difference between the contract price and a reference price, generally closing
prices on NYMEX. Net losses relating to these hedging contracts in the first
quarter of fiscal 2003 and 2002 were $96,000 and $ -0-, respectively.

         We set forth in the following table our natural gas hedge transactions
in place as of December 31, 2002. A 10% variation in the market price of natural
gas from its levels at December 31, 2002 would not have a material impact on our
net assets, net earnings or cash flows.


                                                                  
      Open            Volumes of          Settlement Date     Weighted Average     Unrealized
    Contracts      Natural Gas (Dth)        Quarter Ended      Price Per Dth         Losses
  --------------   ----------------      ----------------    ----------------     ----------
       59               177,000          March 2003               3.56           $(185,800)

      105               315,000          June 2003                3.57            (273,100)

       67               201,000          September 2003           3.63            (163,600)
     ----              --------                                                  ---------
      231               693,000                                  $3.58           $(622,500)
     ====              ========                                  =====           =========



                                       27


Real Estate Finance

         Portfolio Loans and Related Senior Liens. The following information is
based on our loans that are not interest rate sensitive. During the quarter
ended December 31, 2002, our outstanding loans receivable (to our interest)
increased $6.0 million (2%) to $303.3 million in the aggregate and the carried
cost of our loans decreased $1.4 million (.9%) to $147.5 million in the
aggregate. The principal balance of related senior lien interests decreased
$872,000 (.4%) to $201.4 million in the aggregate.

         Debt. The interest rates on our real estate and corporate revolving
lines of credit and term loans are at the prime rate minus 1% for the
outstanding $6.4 million under our term loan at Hudson United Bank and at the
prime rate for the outstanding $18.0 million and $5.0 million lines of credit at
Sovereign Bank. These interest rates decreased during the quarter ended December
31, 2002 because there was one decrease in the defined prime rate. This defined
rate was the "prime rate" as reported in The Wall Street Journal (4.25% at
December 31, 2002). A hypothetical 10% change in the average interest rate
applicable to these lines of credit would change our net income by approximately
$102,000.

         We also have a $10.0 million term loan agreement. The loan bears
interest at the three month LIBOR rate plus 350 basis points, adjusted annually.
Principal and interest is payable monthly based on a five year amortization
schedule maturing on October 31, 2006. At December 31, 2002, $7.5 million was
outstanding on this loan at an interest rate of 4.92%. A hypothetical 10% change
in the average interest rate applicable to this loan would have an immaterial
effect on earnings, cash flow and financial position.

Financial Services

         In June 2002, LEAF Financial Corporation, our equipment-leasing
subsidiary, entered into a $10.0 million secured revolving credit facility with
National City Bank. The facility is guaranteed by us and has a term of 364 days.
Outstanding loans bear interest at one of two rates, elected at LEAF's option: o
the lender's prime rate plus 200 basis points, or o LIBOR plus 300 basis points.
As of December 31, 2002, the balance outstanding was $5.0 million at an average
interest rate of 4.38%. A hypothetical 10% change in the average interest rate
on this facility would have an immaterial effect on our earnings, cash flow and
financial position.

Other
         In June 2002, we established a $5.0 million revolving line of credit
with Commerce Bank. The facility has a term of two years and bears interest at
the prime rate, or LIBOR plus 250 basis points, elected at the borrower's
option. Each rate is subject to a floor of 5.5% and a ceiling of 9.0%. As of
December 31, 2002, the balance outstanding was $5.0 million at an average rate
of 5.5%. A hypothetical 10% change in the average interest rate on this facility
would have an immaterial effect on our earnings, cash flow and financial
position.

ITEM 4.       CONTROLS AND PROCEDURES

Evaluation of Disclosure Controls and Procedures

         Our Chief Executive Officer and Chief Financial Officer have evaluated
 our disclosure controls and procedures (as defined in Rules 13a-14(c) and
 15d-14(c)) within 90 days prior to the filing of this report. Based upon this
 evaluation, these officers believe that our disclosure controls and procedures
 are effective.

Changes in Internal Controls

         There were no significant changes in our internal controls or in other
factors that could significantly affect these controls subsequent to the date of
the last evaluation of our internal controls by our Chief Executive Officer and
Chief Financial Officer.


                                       28





                           PART II. OTHER INFORMATION

ITEM 5.       OTHER INFORMATION

         In December 2002, we agreed to a settlement of outstanding claims among
ourselves and the successor in interest to the purchasers of our former
proprietary small ticket equipment leasing subsidiary, Fidelity Leasing, Inc.
The settlement was on the terms and conditions described in Item 1,
"Business--Obligations Relating to Discontinued Obligations" in our annual
report on Form 10-K for the year ended September 30, 2002.

ITEM 6.  EXHIBITS AND REPORTS ON FORM 8-K

(a) Exhibits:


                 
    Exhibit No.       Description
    -----------       -----------
        3.1       Restated Certificate of Incorporation of Resource America. (2)
        3.2       Amended and Restated Bylaws of Resource America. (2)
       10.1       Employment Agreement between Edward E. Cohen and Resource America. (3)
       10.4       Employment Agreement between Steven J. Kessler and Resource America. (1)
       10.5       Employment Agreement between Nancy J. McGurk and Resource America. (1)
       10.6       Employment Agreement between Jonathan Z. Cohen and Resource America. (4)
       10.7       Credit Agreement among Atlas America, Inc., Resource America, Inc. and the other guarantors party
                  thereto and Wachovia, National Associate, and other banks party thereto, dated July 31, 2002. (4)
       10.7(a)    First Amendment to Loan Agreement, dated as of January 24, 2001. (6)

       10.8       Amended and Restated Loan Agreement, dated December 14, 1999, among Resource Properties XXXII, Inc.,
                  Resource Properties XXXVIII, Inc., Resource Properties II, Inc., Resource Properties 51, Inc.,
                  Resource Properties, Inc., Resource America and Jefferson Bank (now known as Hudson United Bank). (6)
       10.9(a)    Modification of Revolving Credit Loan and Security Agreement dated March 30, 2000. (6) 10.10 Revolving
                  Credit Loan Agreement dated July 27, 1999 by and between Resource America, Inc. and
                  Sovereign Bank. (6)
       10.11      Term Loan Agreement between Resource Properties, Inc. and Miller & Schroeder Investments Corporation.(7)

       10.12      Credit Agreement among Atlas Pipeline Partners, L.P. and Wachovia Bank dated December 27, 2002. (8)

       10.13      Settlement Agreement between Resource America, Inc., FLI Holdings, Inc., AEL Leasing Co., Inc. and
                  Citibank, N.A. dated December 31, 2002. (9)

       99.1       Certification Pursuant to 302 of the Sarbannes Oxley Act of 2002.
       99.2       Certification Pursuant to 302 of the Sarbannes Oxley Act of 2002.
       99.3       Certification Pursuant to 18 U.S.C. Section 1350, as Adopted Pursuant to Section 906 of
                  Sarbanes-Oxley Act of 2002.
       99.4       Certification Pursuant to 18 U.S.C. Section 1350, as Adopted Pursuant to Section 906 of
                  Sarbanes-Oxley Act of 2002.




                                       29





                 
ITEM 6.  EXHIBITS AND REPORTS ON FORM 8-K - (Continued)

(b)      Reports on Form 8-K
         None
- -----------------
(1)      Filed  previously  as an  exhibit  to our  Current  Report on Form 8-K filed on May 18,  2000 and by this  reference
         incorporated herein.
(2)      Filed  previously as an exhibit to our Quarterly  Report on Form 10-Q for the quarter ended December 31, 1999 and by
         this reference incorporated herein.
(3)      Filed  previously  as an exhibit to our  Quarterly  Report on Form 10-Q for the quarter  ended March 31, 1997 and by
         this reference incorporated herein.
(4)      Filed  previously as an exhibit to our Annual Report on Form 10-K for the year ended  September 30, 2001 and by this
         reference incorporated herein.
(5)      Filed  previously as an exhibit to our Annual Report on Form 10-K for the year ended  September 30, 1999 and by this
         reference incorporated herein.
(6)      Filed  previously as an exhibit to our Annual Report on Form 10-K for the year ended  September 30, 2000 and by this
         reference incorporated herein.
(7)      Filed  previously as an exhibit to our Quarterly  Report on Form 10-Q for the quarter ended December 31, 2000 and by
         this reference incorporated herein.
(8)      Filed  previously as an exhibit to our Quarterly  Report on Form 10-Q for the quarter ended December 31, 2002 and by
         this reference incorporated herein.
(9)      Filed previously as an exhibit to our Registration Statement on Form S-4 (File No. 333-103084) on February 11, 2003
         and by this reference incorporated herein.



                                       30





                                   SIGNATURES

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


                                             RESOURCE AMERICA, INC.
                                             (Registrant)

Date: October 31, 2003                       By: /s/ Steven J. Kessler
                                                 ---------------------
                                                 STEVEN J. KESSLER
                                                 Senior Vice President and
                                                 Chief Financial Officer

Date: October 31, 2003                       By: /s/ Nancy J. McGurk
                                                 -------------------
                                                 NANCY J. McGURK
                                                 Vice President-Finance and
                                                 Chief Accounting Officer



                                       31






                                                                    Exhibit 99.1


                                 CERTIFICATIONS


I, Edward E. Cohen, certify that:

1.   I have reviewed this quarterly report on Form 10-Q/A of Resource
     America, Inc.;

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

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

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

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

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

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

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

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

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

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

               Date:  October 31, 2003
               /s/ Edward E. Cohen
               Edward E. Cohen
               Chairman of the Board, President and Chief Executive Officer