<PAGE>




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


                                   FORM 10-QSB
                                ----------------


(X) QUARTERLY REPORT UNDER SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT
OF 1934

For the quarterly period ending   December 31, 2001
                                ----------------------

                                       or

(  ) TRANSITION REPORT UNDER SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT
OF 1934

For the transition period from                 to
                               ---------------

Commission File Number           0-25355
                       -----------------------

                               PFSB BANCORP, INC.
     ----------------------------------------------------------------------
        (Exact name of small business issuer as specified in its charter)


         Missouri                                      31-1627743
------------------------------------              --------------------
(State or other jurisdiction of                    (I.R.S. Employer
incorporation or organization)                     Identification No.)


 123 W. Lafayette St., P.O. Box 72, Palmyra, MO                  63461
------------------------------------------------              ------------
(Address of principal executive offices)                      (Zip Code)


      573-769-2134
--------------------------------------
(Issuer's telephone number)





As of February 12, 2002, there were 416,952 shares of the Registrant's Common
Stock, $.01 par value per share, outstanding.

Transitional Small Business Disclosure Format

                      Yes            No     X
                          ----------     ----------


<PAGE>


                       PFSB BANCORP, INC. AND SUBSIDIARIES
                                   FORM 10-QSB
                                DECEMBER 31, 2001
<TABLE>
<CAPTION>

INDEX                                                                     PAGE
-----                                                                     ----

<S>                                                                   <C>

PART I - FINANCIAL INFORMATION
------------------------------

ITEM 1 - FINANCIAL STATEMENTS (UNAUDITED)

  CONSOLIDATED STATEMENTS OF FINANCIAL CONDITION                           1

  CONSOLIDATED STATEMENTS OF INCOME                                        2

  CONSOLIDATED STATEMENTS OF CASH FLOWS                                    3

  NOTES TO CONSOLIDATED FINANCIAL STATEMENTS                             4-6

ITEM 2 -  MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL
          CONDITION AND RESULTS OF OPERATIONS                           7-10


PART II - OTHER INFORMATION
---------------------------

ITEM 1.   LEGAL PROCEEDINGS                                               11

ITEM 2.   CHANGES IN SECURITIES AND USE OF PROCEEDS                       11

ITEM 3.   DEFAULTS UPON SENIOR SECURITIES                                 11

ITEM 4.   SUBMISSION OF MATTERS TO A VOTE OF SECURITY HOLDERS             11

ITEM 5.   OTHER INFORMATION                                               11

ITEM 6.   EXHIBITS AND REPORTS ON FORM 8-K                                11

SIGNATURES                                                                12
</TABLE>



<PAGE>


                       PFSB BANCORP, INC. AND SUBSIDIARIES
                 CONSOLIDATED STATEMENTS OF FINANCIAL CONDITION
                             (Dollars in thousands)

<TABLE>
<CAPTION>

                                                                                                   December 31,     September 30,
                                                                                                       2001            2001
                                                                                                  --------------- ----------------
ASSETS                                                                                             (Unaudited)      (Unaudited)
<S>                                                                                                <C>                 <C>

   Cash (includes interest-bearing deposits of $4,547 and $3,883, respectively)                       $4,762           $4,185
   Investment securities:
       Available-for-sale, at fair value                                                               6,166            6,036
       Held-to-maturity (fair value of $912 and $912, respectively)                                      900              900
   Mortgage-backed securities held-to-maturity (fair value of $6,899 and $7,061, respectively)         6,854            6,970
   Stock in Federal Home Loan Bank of Des Moines ("FHLB")                                                427              427
   Loans receivable, net (allowance for loan losses of $320 and $299 respectively)                    50,594           49,901
   Accrued interest receivable                                                                           438              538
   Premises and equipment                                                                              1,008            1,030
   Other assets                                                                                           89               57
                                                                                                   ---------        ---------

                                              TOTAL ASSETS                                           $71,238          $70,044


LIABILITIES AND STOCKHOLDERS' EQUITY

LIABILITIES
   Deposits                                                                                          $61,950          $60,736
   Advances from borrowers for property taxes and insurance                                               40               55
   Dividends Payable                                                                                      62               --
   Other liabilities                                                                                     127              117
                                                                                                     -------          -------

                                           TOTAL LIABILITIES                                          62,179           60,908

STOCKHOLDERS' EQUITY
   Common stock, $.01 par value per share; 5,000,000 authorized, 559,000 issued                            6                6
   Additional paid-in capital                                                                          4,939            4,937
   Retained earnings-substantially restricted                                                          6,322            6,317
   Accumulated other comprehensive income (loss)                                                         (84)              28
   Unearned ESOP shares                                                                                 (324)            (335)
   Unearned SBIP shares                                                                                 (140)            (157)
   Treasury stock, at cost (142,048 and 142,048 shares of common stock, respectively)                 (1,660)          (1,660)
                                                                                                     -------          -------

                                       TOTAL STOCKHOLDERS' EQUITY                                      9,059            9,136
                                                                                                     -------          -------


                               TOTAL LIABILITIES AND STOCKHOLDERS' EQUITY                            $71,238          $70,044
                                                                                                     =======          =======
</TABLE>


See accompanying notes to consolidated financial statements.

                                      -1-

<PAGE>

                       PFSB BANCORP, INC. AND SUBSIDIARIES
                        CONSOLIDATED STATEMENTS OF INCOME
                (Dollars in thousands, except per share amounts)

<TABLE>
<CAPTION>

                                                                                   Three Months Ended
                                                                                      December 31,
                                                                                    2001         2000
                                                                                ------------- ------------
                                                                                       (Unaudited)
<S>                                                                            <C>                <C>

INTEREST INCOME
   Mortgage loans                                                                $    960     $    846
   Consumer and other loans                                                             6           13
   Interest-bearing deposits                                                           27           44
   Investment securities                                                               89          257
   Mortgage-backed securities                                                         104           49
                                                                                 --------     --------

TOTAL INTEREST INCOME                                                            $  1,186     $  1,209

INTEREST EXPENSE
   Deposits                                                                           678          781
   Advances from FHLB                                                                  --           64
                                                                                 --------     --------

TOTAL INTEREST EXPENSE                                                           $    678     $    845
                                                                                 --------     --------

NET INTEREST INCOME                                                                   508          364

PROVISION FOR LOAN LOSSES                                                              21           --
                                                                                 --------     --------

NET INTEREST INCOME AFTER PROVISION FOR LOAN LOSSES                                   487          364

NON-INTEREST INCOME
   Service charges and other fees                                                      25           16
   Loss from foreclosed assets                                                         (7)          (2)
   Loss from sale of investments                                                       (1)          --
   Other income                                                                         2           10
                                                                                 --------     --------

TOTAL NON-INTEREST INCOME                                                              19           24

NON-INTEREST EXPENSE
   Employee salaries and benefits                                                     215          201
   Occupancy costs                                                                     42           44
   Advertising                                                                         10           13
   Data processing                                                                     24           23
   Federal insurance premiums                                                           3            3
   Professional fees                                                                   46           38
   Directors' fees                                                                     17           15
   Other expenses                                                                      55           56
                                                                                 --------     --------

TOTAL NON-INTEREST EXPENSE                                                            412          393
                                                                                 --------     --------

INCOME (LOSS) BEFORE INCOME TAXES                                                      94           (5)

INCOME TAXES (INCOME TAX BENEFIT)                                                      26           (2)
                                                                                 --------     --------

NET INCOME (LOSS)                                                                $     68     $     (3)
                                                                                 ========     ========

BASIC INCOME (LOSS) PER SHARE                                                    $   0.19     $  (0.01)
                                                                                 ========     ========
DILUTED INCOME (LOSS) PER SHARE                                                  $   0.18     $  (0.01)
                                                                                 ========     ========
</TABLE>


 See accompanying notes to Consolidated Financial Statements

                                      -2-

<PAGE>


                       PFSB BANCORP, INC. AND SUBSIDIARIES
                      CONSOLIDATED STATEMENTS OF CASH FLOWS
                             (Dollars in thousands)


<TABLE>
<CAPTION>
                                                                                                      Three Months Ended
                                                                                                          December 31
                                                                                                       2001         2000
                                                                                                   -------------------------
                                                                                                          (Unaudited)
<S>                                                                                                     <C>         <C>
CASH FLOWS FROM OPERATING ACTIVITIES
Net Income                                                                                           $    68     $     (3)
   Adjustments to reconcile net income to net cash provided by operating activities
   Depreciation and amortization                                                                          22           21
   Amortization of premiums and discounts                                                                  1           (1)
   Provisions for loan losses                                                                             21           --
   Gain on sale of investments                                                                             1           --
   (Gain) Loss on sale of foreclosed real estate                                                           7           --
   ESOP shares released                                                                                   13           13
   Amortization of SBIP                                                                                   16           11
   Changes to assets and liabilities increasing (decreasing) cash flows
      Accrued interest receivable                                                                        100          123
      Other assets                                                                                        28           87
      Other liabilities                                                                                    9          (56)
                                                                                                    --------     --------

NET CASH PROVIDED BY OPERATING ACTIVITIES                                                                286          195

CASH FLOWS FROM INVESTING ACTIVITIES
   Proceeds from maturities and calls of investment securities, held-to-maturity                                       --
   Purchase of investment securities, available-for-sale                                              (3,050)          --
   Proceeds from maturities and calls of investment securities, available-for-sale                     2,748           --
   Purchase of mortgage-backed securities                                                               (501)          --
   Principal collected on mortgage-backed securities                                                     616          152
   Loans originated, net of repayments                                                                   397          215
   Purchase of mortgage loans                                                                         (1,116)        (399)
   Proceeds from sale of education loans                                                                  --           27
   Purchase of premises and equipment                                                                     --          (12)
   Expenditures on foreclosed real estate                                                                 (2)          --
                                                                                                    --------     --------

NET CASH USED BY INVESTING ACTIVITIES                                                               $   (908)    $    (17)

CASH FLOWS FROM FINANCING ACTIVITIES
   Net increase in deposits                                                                            1,214          350
   Advances from FHLB
      Borrowings                                                                                          --           --
      Repayments                                                                                          --       (1,500)
   Net increase (decrease) in advances for taxes and insurance                                           (15)         (17)
                                                                                                    --------     --------

NET CASH PROVIDED (USED) BY FINANCING ACTIVITIES                                                     $ 1,199     $ (1,167)
                                                                                                    --------     --------
NET INCREASE (DECREASE) IN CASH                                                                          577         (989)
CASH, BEGINNING OF PERIOD                                                                              4,185        3,792
                                                                                                    --------     --------

CASH, END OF PERIOD                                                                                 $  4,762     $  2,803
                                                                                                    ========     ========
</TABLE>


See accompanying notes to Consolidated Financial Statements

                                      -3-

<PAGE>


                       PFSB BANCORP, INC. AND SUBSIDIARIES
                   NOTES TO CONSOLIDATED FINANCIAL STATEMENTS


NOTE A--Basis of Presentation
-----------------------------

The accompanying unaudited, consolidated financial statements have been prepared
by PFSB Bancorp, Inc. (the "Company") in accordance with instructions to Form
10-QSB. Accordingly, they do not include all of the information and footnotes
required by generally accepted accounting principles for complete financial
statements. In the opinion of management, all adjustments (consisting only of
normal recurring accruals) necessary for a fair presentation are reflected in
the December 31, 2001, interim financial statements.

The results of operations for the period ended December 31, 2001, are not
necessarily indicative of the operating results for the full year. The
accompanying consolidated financial statements and related notes of PFSB
Bancorp, Inc. should be read in conjunction with the audited financial
statements and related notes included in the Company's Annual Report for the
year ended September 30, 2001.

NOTE B--Formation of Holding Company and Conversion to Stock Form
-----------------------------------------------------------------

On March 31, 1999, the Company became the holding company for Palmyra Savings
(the "Bank) upon the Bank's conversion from a federally chartered mutual savings
association to a federally chartered capital stock savings bank. The conversion
was accomplished through the sale and issuance by the Company of 559,000 shares
of common stock at $10 per share. Proceeds from the sale of common stock, net of
expenses incurred of $608,237, were $4,981,763, inclusive of $447,200 related to
shares held by Palmyra Savings' Employee Stock Ownership Plan ("ESOP").

NOTE C--Net Income (Loss) Per Share
-----------------------------------

Basic income per share is computed by dividing income available to common
stockholders by the weighted average number of common shares outstanding for the
period. Diluted income per common share reflects the potential dilution that
could occur if securities or other contracts to issue common stock were
exercised or converted into common stock.


<TABLE>
<CAPTION>

                                                                                     Three Months Ended
                                                                                        December 31,
                                                                                      2001         2000
                                                                                  ------------------------
                                                                                    (In thousands, except
                                                                                     per share amounts)
<S>                                                                                  <C>         <C>
Basic earnings per share:

   Income (loss) available to common shareholders                                     $   68        $   (3)
                                                                                      ------        ------
   Average common shares outstanding                                                     367           442
                                                                                      ------        ------
   Basic income (loss) per share                                                      $ 0.19        $(0.01)
                                                                                      ------        ------
   Diluted income (loss) per share                                                    $ 0.18        $(0.01)
                                                                                      ------        ------
</TABLE>




                                      -4-

<PAGE>

                       PFSB BANCORP, INC. AND SUBSIDIARIES
                   NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
                                   (Continued)

NOTE D--Employee Stock Ownership Plan
-------------------------------------

In connection with the conversion to stock form, Palmyra Savings established an
ESOP for the exclusive benefit of participating employees (all salaried
employees who have completed at least 1000 hours of service in a twelve-month
period and have attained the age of 21). The ESOP borrowed funds from the
Company in an amount sufficient to purchase 44,720 shares (8% of the Common
Stock issued in the stock offering). The loan is secured by the shares purchased
and will be repaid by the ESOP with funds from contributions made by Palmyra
Savings, dividends received by the ESOP and any other earnings on ESOP assets.
Contributions will be applied to repay interest on the loan first, and then the
remainder will be applied to principal. The loan is expected to be repaid in
approximately 10 years. Shares purchased with the loan proceeds are held in a
suspense account for allocation among participants as the loan is repaid.
Contributions to the ESOP and shares released from the suspense account are
allocated among participants in proportion to their compensation relative to
total compensation of all active participants. Participants will vest in their
accrued benefits under the employee stock ownership plan at the rate of 20% per
year, beginning upon the completion of two years of service. Vesting is
accelerated upon retirement, death or disability of the participant. Forfeitures
will be reallocated to remaining plan participants. Benefits may be payable upon
retirement, death, disability or separation from service. Since Palmyra Savings'
annual contributions are discretionary, benefits payable under the ESOP cannot
be estimated.

The Company accounts for its ESOP in accordance with Statement of Position
("SOP") 93-6, Employers Accounting for Employee Stock Ownership Plans.
Accordingly, the debt of the ESOP is eliminated in consolidation and the shares
pledged as collateral are reported as unearned ESOP shares in the consolidated
statements of financial condition. Contributions to the ESOP shall be sufficient
to pay principal and interest currently due under the loan agreement. As shares
are committed to be released from collateral, the Company reports compensation
expense equal to the average market price of the shares for the respective
period, and the shares become outstanding for earnings per share computations.
Dividends on allocated ESOP shares are recorded as a reduction of retained
earnings; dividends on unallocated ESOP shares are recorded as a reduction of
debt and accrued interest.

A summary of ESOP shares at December 31, 2001 is as follows:

   Shares committed for release                               4,472
   Shares released                                            7,826
   Unreleased shares                                         32,422
                                                          ---------
                            TOTAL                            44,720
                                                          =========
   Fair value of unreleased shares                        $ 392,630
                                                          =========

NOTE E--Stock Based Compensation Plans
--------------------------------------

The Board of Directors adopted, and the shareholders subsequently approved on
January 27, 2000, the PFSB Bancorp, Inc. 2000 Stock-Based Incentive Plan
("SBIP"). The purpose of the SBIP is to attract and retain qualified personnel
in key positions, provide officers, employees and non-employee directors of the
Company and Palmyra Savings, with a proprietary interest in the Company as an
incentive to contribute to the success of the Company, promote the attention of
management to other stockholder's concerns, and reward employees for outstanding
performance.

The SBIP authorizes the granting of options to purchase common stock of the
Company and awards of restricted shares of common stock. Subject to certain
adjustments to prevent dilution of awards to participants, the number of shares
of common stock reserved for awards under the SBIP is 78,260 shares, consisting
of 55,900 shares reserved for options and 22,360 shares reserved for restricted
stock awards. All employees and non-employee directors of the Company and its
affiliates are eligible to receive awards under the SBIP. The SBIP is
administered by a committee consisting of members of the Board of Directors who
are not employees of the Company or its affiliates.

                                      -5-

<PAGE>

                       PFSB BANCORP, INC. AND SUBSIDIARIES
                   NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
                                   (Continued)

On April 6, 2000, the Company granted options for 44,720 shares at $10.25 per
share and awarded the 22,360 shares of restricted stock pursuant to the SBIP.

The options will enable the recipient to purchase stock at the exercise price
above. The options vest over three years following the date of grant and are
exercisable for up to 10 years. As of December 31, 2001, options for 17,396
shares had vested, and options for 1,218 shares were exercised.

The restricted stock awards do not require any payment by the recipient and vest
over five years following the date of the award. The Company funded the
restricted stock awards with Treasury Stock which was purchased at a price above
the fair market value of the Company's stock at the award date resulting in an
increase in additional paid-in capital of $50,316. Amortization of the awards
resulted in a charge to compensation and benefit expense of $16,085 for the
three month period ended December 31, 2001.

The Company adopted SFAS No. 123, Accounting for Stock-Based Compensation, which
permits entities to recognize, as expense over the vesting period, the fair
value of all stock-based awards on the date of grant. Alternatively, SFAS No.
123 allows entities to disclose pro forma net income and income per share as if
the fair value-based method defined in SFAS No. 123 has been applied, while
continuing to apply the provisions of Accounting Principles Board ("APB")
Opinion No. 25, Accounting for Stock Issued to Employees, under which
compensation expense is recorded on the date of grant only if the current market
price of the underlying stock exceeds the exercise price.

As permitted under SFAS No. 123, "Accounting for Stock-Based Compensation" the
Company has elected to apply the recognition provisions of Accounting Principles
Board Opinion No. 25, under which compensation expense is recorded on the date
of grant only if the current market price of the underlying stock exceeds the
exercise price. Accordingly, adoption of SFAS No. 123 will have no impact on the
Company's consolidated financial position or results of operations.

NOTE F--Comprehensive Income
----------------------------

On October 1, 1998 the Company adopted the provisions of Statement of Financial
Accounting Standards No. 130, "Reporting Comprehensive Income", which
established standards for reporting and display of comprehensive income and its
components (revenues, expenses, gains and losses) in a full set of
general-purpose financial statements. For the three month period ended December
31, 2001 and 2000, unrealized holding gains and losses on investments in debt
and equity securities available-for-sale were the Company's only other
comprehensive income component.

Comprehensive income for the three month period ended December 31, 2001 and 2000
is summarized as follows:


<TABLE>
<CAPTION>

                                                                                    Three Months Ended
                                                                                       December 31,
                                                                                     2001         2000
                                                                                 --------------------------
                                                                                  (Dollars in thousands)
<S>                                                                                 <C>         <C>
Net Income (loss)                                                                    $  68          $ (3)

Other comprehensive income:
  Net unrealized holding gains (losses) on investments
   in debt and equity securities available-for-sale                                   (112)          139

  Adjustments for net securities (gains) losses realized
   in net income, net of applicable income taxes                                        (1)           --
                                                                                     ------         ----

Total other comprehensive income (loss)                                              $ (45)         $136
                                                                                     ======         ====
</TABLE>




                                      -6-

<PAGE>

                       PFSB BANCORP, INC. AND SUBSIDIARIES
                     MANAGEMENT'S DISCUSSION AND ANALYSIS OF
                  FINANCIAL CONDITION AND RESULTS OF OPERATIONS

Forward Looking Statements
--------------------------

This report contains forward-looking statements within the meaning of the
federal securities laws. These statements are not historical facts, rather they
are statements based on PFSB Bancorp, Inc.'s (the "Company's") current
expectations regarding its business strategies and their intended results and
its future performance. Forward-looking statements are preceded by terms such as
"expects," "believes," "anticipates," "intends," and similar expressions.
Forward-looking statements are not guarantees of future performance. Numerous
risks and uncertainties could cause or contribute to the Company's actual
results; performance and achievements to be materially different from those
expressed or implied by the forward-looking statements. Factors that may cause
or contribute to these differences include, without limitation, general economic
conditions, including changes in market interest rates and changes in monetary
and fiscal policies of the federal government; legislative and regulatory
changes; and other factors disclosed periodically in the Company's filings with
the Securities and Exchange Commission. Because of the risks and uncertainties
inherent in forward-looking statements, readers are cautioned not to place undue
reliance on them, whether included in this report or made elsewhere from time to
time by the Company or on its behalf. The Company assumes no obligation to
update any forward-looking statements.

General
-------

The Company is a Missouri corporation that was organized for the purpose of
becoming the holding company for Palmyra Savings ("Bank") upon the Bank's
conversion from a federal mutual savings association to a federal stock savings
bank. The Bank's conversion was completed on March 31, 1999. The Bank's business
consists principally of attracting retail deposits from the general public and
using these funds to originate and purchase residential mortgage loans generally
located in Missouri.

The Company's operating results depend primarily on its net interest income,
which is the difference between the income it receives from its loans and
investments, and the interest paid on deposits and borrowings. Non-interest
income and expenses also affect the Company's operating results. Non-interest
income would include such items as loan service fees, service charges, and other
fees. Non-interest expense would include such items as salaries and benefits,
occupancy costs, data processing expenses, and other expenses.

The discussion and analysis included herein covers material changes in results
of operations during the three month periods ended December 31, 2001 and 2000 as
well as those material changes in liquidity and capital resources that have
occurred since September 30, 2001.

Financial Condition at December 31, 2001 and September 30, 2001
---------------------------------------------------------------

Total assets increased $1.2 million to $71.2 million at December 31, 2001. There
was a $577,000 increase in cash and interest bearing deposits, a $130,000
increase in investment securities, a $116,000 decrease in mortgage-backed
securities, a $693,000 increase in loans receivable, a $100,000 decrease in
accrued interest receivable, a $22,000 decrease in premises and equipment, and a
$32,000 increase in other assets. There were $2.0 million in securities, which
were called in the period, $750,000 which were sold, and $3.1 million in
securities which were purchased. The increases in cash and interest bearing
deposits, investment securities, and loans receivable were primarily funded by a
$1.2 million increase in deposits. The decrease in accrued interest receivable
was due primarily to the timing of payments on mortgage loans and investment
securities. One property was foreclosed and sold during the period.

Total liabilities increased $1.3 million to $62.2 million at December 31, 2001
as compared to September 30, 2001. The increase was due to an increase in
deposits of $1.2 million, an increase in dividends payable of $62,000, and
decrease in advances for taxes & insurance of $15,000, and an increase in other
liabilities of $10,000.

                                      -7-

<PAGE>

                       PFSB BANCORP, INC. AND SUBSIDIARIES
                     MANAGEMENT'S DISCUSSION AND ANALYSIS OF
                  FINANCIAL CONDITION AND RESULTS OF OPERATIONS
                                   (Continued)

Stockholders' equity at December 31, 2001 decreased $77,000 to $9.1 million or
12.7% of total assets as compared to September 30, 2001. An increase in retained
earnings of $5,000 was due to earnings of $68,000, accrued dividend expense of
$62,000 and a decrease in unearned ESOP and SBIP shares of $28,000, offset by
unrealized losses on securities for the period of $112,000.

Non-performing assets include non-accrual loans, loans 90 days or more
delinquent and still accruing interest, foreclosed real estate and other
repossessed assets. The following table presents non-performing assets at the
dates indicated.

<TABLE>
<CAPTION>

                                                                                        December 31,     September 30,
                                                                                            2001            2001
                                                                                       --------------- ---------------
<S>                                                                                        <C>          <C>

          Non-accrual loans                                                                 $317            $404
          Loans past due 90 days or more and still accruing interest                          --              --
          Foreclosed real estate and other repossessed assets                                 --              --
                                                                                            ----            ----
               Total non-performing assets                                                  $317            $404
                                                                                            ====            ====
</TABLE>

Non-accrual loans at December 31, 2001 and September 30, 2001 consisted
primarily of residential real estate loans. All non-accrual loans are classified
as substandard. As of December 31, 2001, one current loan was classified as
$92,000 substandard and $5,000 loss due to value of the collateral securing the
loan.

Results of Operations for the Three Months Ended December 31, 2001 and 2000
---------------------------------------------------------------------------

Net Income - Net income increased $71,000 to $68,000 for the quarter ended
December 31, 2001 as compared to a net loss of $3,000 for the quarter ended
December 31, 2000. Diluted income per share increased from $(0.01) for the 2000
quarter end to $0.18 for the 2001 quarter end.

Net Interest Income - Net interest income increased $144,000 to $508,000 for the
three months ended December 31, 2001. Interest income decreased $23,000 for the
three month period ended December 31, 2001 as compared to the three month period
ended December 31, 2000, while interest expense decreased $167,000, resulting in
a increase in net interest income of $144,000. The decrease in interest income
was primarily due to the dramatic decrease in interest rates, due to overall
economic conditions, from December 31, 2000 to December 31, 2001. Although loans
receivable increased $5.9 million for the period ended December 31, 2000 as
compared to the period ended December 31, 2001, interest on mortgage loans
increased only $114,000, due to a decrease in yield on mortgage loans from 7.66%
to 7.52%. Interest bearing deposits increased $2.0 million but the yield on
these deposits decreased from 6.32% to 1.67%, resulting in a decrease in income
on interest bearing deposits of $17,000. Interest on investment securities
decreased $168,000 due in part to the decrease in investment securities of $9.5
million and a decrease in yield on investment securities from 5.98% to 5.52%
from the quarter ended December 31, 2000 to the quarter ended December 31, 2001.
Mortgage-backed securities increased $3.9 million during the period but the
yield decreased from 6.75% to 6.26%, resulting in an increase in interest income
on mortgage-backed securities of $55,000. Interest expense decreased $167,000
from the three month period ended December 31, 2001 as compared to the same
period ended December 31, 2000. This was primarily due to a decrease in deposit
expense of $103,000 along with a decrease in interest expense on FHLB advances
of $64,000. Although deposits, primarily certificates of deposit, increased $5.2
million from December 31, 2000 to December 31, 2001, deposit expense decreased
due to a decrease in cost of funds, from 5.50% to 4.12% during the same period.
The decrease in interest on advances was the result of all outstanding advances
being paid off in the December 31, 2000 quarter.

Provision for Loan Losses - The provision for loan losses increased $21,000 from
December 31, 2000 to December 31, 2001. The increase was mainly due to the
increase in loans receivable of $5.9 million from December 31, 2000 to December
31, 2001. The allowance for loan losses is maintained at a level which, in
management's judgment, is adequate to absorb credit losses inherent in


                                      -8-

<PAGE>

                       PFSB BANCORP, INC. AND SUBSIDIARIES
                     MANAGEMENT'S DISCUSSION AND ANALYSIS OF
                  FINANCIAL CONDITION AND RESULTS OF OPERATIONS
                                   (Continued)

the loan portfolio. The amount of the allowance is based on management's
evaluation of the collectibility of the loan portfolio, including the nature of
the portfolio, credit concentrations, trends in historical loss experience,
specific impaired loans and economic conditions. Allowances for impaired loans
are generally determined based on collateral values or the present value of
estimated cash flows. The allowance is increased by a provision for loan losses,
which is charged to expense, and reduced by charge-offs, net of recoveries.

Management applies its normal loan review procedures in determining when a loan
is impaired. All nonaccrual loans are considered impaired except those
classified as small-balance homogeneous loans which are collectively evaluated
for impairment. The Company considers all one-to four-family residential
mortgage loans, residential construction loans, and all consumer and other loans
to be smaller homogeneous loans. Impaired loans are assessed individually and
impairment identified when the accrual of interest has been discontinued, loans
have been restructured or management has serious doubts about the future
collectibility of principal and interest, even though the loans are currently
performing. Factors considered in determining impairment include, but are not
limited to, expected future cash flow, the financial condition of the borrower
and current economic conditions. The Company measures each impaired loan based
on the fair value of its collateral and charges off those loans or portions of
loans deemed uncollectible. Management has elected to continue to use its
existing nonaccrual methods for recognizing interest income on impaired loans.

Noninterest Income - Total noninterest income decreased $5,000 to $19,000 for
December 31, 2001. Service charges and other fees increased $9,000 for the three
month period ended December 31, 2001 as compared to the three month period ended
December 31, 2000. This increase was offset by an increase in loss from
foreclosed assets of $5,000 and a decrease in other income of $8,000.

Noninterest Expense - Total noninterest expense increased $19,000 to $412,000
for December 31, 2001. Of this increase, $14,000 was due to an increase in
employee salaries and benefits and $8,000 was due to an increase in professional
fees.

Income Taxes - Income taxes increased from a $2,000 tax benefit for the quarter
ended December 31, 2000 to a $26,000 tax expense for the quarter ended December
31, 2001 due to the increase in before tax income.

Liquidity and Capital Resources
-------------------------------

The Company's primary sources of funds are maturities and prepayments of
investment securities, customer deposits, proceeds from principal and interest
payments on loans and Federal Home Loan Bank of Des Moines advances. While
investment securities maturities and scheduled amortization of loans are a
predictable source of funds, deposit flows, investment securities prepayments
and mortgage prepayments are greatly influenced by general interest rates,
economic conditions and competition.

Palmyra Savings must maintain an adequate level of liquidity to ensure the
availability of sufficient funds to fund loan originations and deposit
withdrawals, to satisfy other financial commitments and to take advantage of
investment opportunities. Palmyra Savings generally maintains sufficient cash
and short-term investments to meet short-term liquidity needs. At December 31,
2001, cash and interest-bearing deposits totaled $4.8 million, or 6.7% of total
assets. Investment securities classified as available-for-sale totaled $6.2
million at December 31, 2001.

The Bank's primary investing activity is the origination and purchase of one- to
four-family mortgage loans. At December 31, 2001, the Bank had outstanding loan
commitments totaling $2.4 million and had undisbursed loans in process totaling
$665,000. Certificates of deposit that are scheduled to mature in less than one
year from December 31, 2001 totaled $24.4 million. Historically, the Bank has
been able to retain a significant amount of its deposits as they mature.
Management believes it has adequate resources to fund all loan commitments from
the cash inflow from savings deposits, loan payments and maturities of
investment securities. Management also has the ability to obtain advances from
the Federal Home Loan Bank to supplement liquidity.

                                      -9-

<PAGE>

                       PFSB BANCORP, INC. AND SUBSIDIARIES
                     MANAGEMENT'S DISCUSSION AND ANALYSIS OF
                  FINANCIAL CONDITION AND RESULTS OF OPERATIONS
                                   (Continued)


Office of Thrift Supervision regulations require Palmyra Savings to maintain
specific amounts of regulatory capital. As of December 31, 2001, Palmyra Savings
complied with all regulatory capital requirements stated below. The following
table summarizes Palmyra Savings' capital ratios and the ratios required by
regulation at December 31, 2001.

<TABLE>
<CAPTION>

                                                                                                         To Be Well Capitalized
                                                                              For Capital                Under Prompt Corrective
                                               Actual                      Adequacy Purposes                Action Provisions
                                               ------                      -----------------                -----------------
                                          Amount      Ratio              Amount        Ratio              Amount        Ratio
                                          ------      -----              ------        -----              ------        -----
                                                                       (Dollars in thousands)
<S>                                        <C>        <C>                  <C>         <C>                 <C>        <C>
As of December 31, 2001
  Total Risk-Based Capital
  (to Risk Weighted Assets)                $8,699     23.86%               $2,917      8.0%                $3,646     10.0%
  Tier 1 Capital
  (to Risk Weighted Assets)                $8,384     22.99%               $1,459      4.0%                $2,188      6.0%
  Tier 1 Capital
  (to Adjusted Assets)                     $8,384     11.76%               $2,140      3.0%                $3,566      5.0%
  Tangible Capital
  (to Adjusted Assets)                     $8,384     11.76%               $1,070      1.5%                 N/A        N/A
</TABLE>



                                      -10-

<PAGE>

                       PFSB BANCORP, INC. AND SUBSIDIARIES
                           PART II - OTHER INFORMATION

ITEM 1.  LEGAL PROCEEDINGS

Neither the Company nor Palmyra Savings is a party to any material legal
proceedings at this time. From time to time Palmyra Savings is involved in
various claims and legal actions arising in the ordinary course of business.

ITEM 2.  CHANGES IN SECURITIES AND USE OF PROCEEDS

None

ITEM 3. DEFAULTS UPON SENIOR SECURITIES

None

ITEM 4. SUBMISSION OF MATTERS TO A VOTE OF SECURITY HOLDERS

None

ITEM 5. OTHER INFORMATION

None

ITEM 6. EXHIBITS AND REPORTS ON FORM 8-K

a.       Exhibits

         3.1 Articles of Incorporation of PFSB Bancorp, Inc.*

         3.2 Bylaws of PFSB Bancorp, Inc.*

         4.0 Form of Stock Certificate of PFSB Bancorp, Inc.*

         10.1 Employment Agreement with Eldon R. Mette * *

         10.2 Employment Agreement with Ronald L. Nelson * *

         10.3 PFSB Bancorp, Inc. 2000 Stock-Based Incentive Plan * * *

b.       Reports on Form 8-K

         On November 13, 2001, the Company filed a Current Report on For 8-K
         announcing the date of the Company's 2002 Annual Meeting of
         Stockholders. The press release announcing the meeting date is filed by
         exhibit.

*        Incorporated by reference from the Form SB-2 (Registration No.
         333-69191), as amended, as filed on December 18, 1998.

**       Incorporated by reference from the Form 10-QSB for the quarter ended
         March 31, 1999, as filed on May 17, 1999.

***      Incorporated by reference from the Definitive Proxy Statement for the
         2000 Annual Meeting of Stockholders, as filed on December 15, 1999.

                                      -11-

<PAGE>

                                   SIGNATURES

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

                                         PFSB Bancorp, Inc.


 Date:  February 14, 2002                By:/s/ Eldon R. Mette
                                            -------------------------------
                                                Eldon R. Mette
                                                President and Chief Executive
                                                Officer

Date:  February 14, 2002                 By:/s/ Ronald L. Nelson
                                            -------------------------------
                                                Ronald L. Nelson
                                                Vice President, Treasurer
                                                and Secretary

                                      -12-