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                        INDEPENDENT CONTRACTOR AGREEMENT


         This Agreement dated January __, 2001 is made between PSB BANCORP,
INC., a Pennsylvania bank holding company with primary business office located
at 11 Penn Center, Suite 2601, 1835 Market Street, Philadelphia, Pennsylvania
19103 (the "Company") and Frank J. Moran, an individual residing at [INSERT]
ADDRESS] (the "Independent Contractor").

                                   BACKGROUND

         A. The Company is a bank holding company engaged in the banking
business through its wholly owned bank subsidiary, First Penn Bank .

         B. The Company desires to hire the Independent Contractor as an
independent contractor to act as General Counsel for the Company.

         C. The Independent Contractor desires to perform such services for the
Company as an independent contractor pursuant to the terms and conditions set
forth herein.

                                    AGREEMENT

                  NOW, THEREFORE, in consideration of the premises and mutual
covenants contained herein and for good and valuable consideration the receipt
and sufficiency of which hereby acknowledged, the parties hereto, intending to
be legally bound, agree as follows:

         1. WORK TO BE PERFORMED. The Company and the Independent Contractor
agree that the Independent Contractor will perform the work described in Exhibit
"A" in accordance with this Agreement.

         2. TERMS OF PAYMENT. The Independent Contractor shall be paid a monthly
fee of $4,739.00 .
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         3. EXPENSES. The Company shall not be liable to the Independent
Contractor for any expenses paid or incurred by the Independent Contractor
unless otherwise agreed to in writing.

         4. SUPPLIES/WORK HOURS. The Independent Contractor shall supply at his
own expense, all transportation, materials, supplies and equipment required to
accomplish the work agreed to be performed in accordance with this Agreement. In
addition, the Independent Contractor shall set his own work hours and shall not
be required to maintain a pre-determined work schedule but shall be under the
supervision of the President of the Company.

         5. PAYROLL TAXES. Payroll taxes including federal, state and local
taxes shall not be withheld or paid by the Company on behalf of the Independent
Contractor or for the employees of the Independent Contractor. The Independent
Contractor shall not be treated as an employee of the Company with respect to
the services performed hereunder for federal or state tax purposes. The
Independent Contractor shall be responsible to pay all taxes as mandated by law.

         6. FRINGE BENEFITS. Because the Independent Contractor is not an
employee of the Company's, the Independent Contractor shall not be eligible for,
and shall not participate in, any employee benefits of the Company including
pension, health or other fringe benefits.

         7. WORKER'S COMPENSATION. The Company shall not obtain worker's
compensation insurance on behalf of the Independent Contractor or the employees
of the Independent Contractor. The Independent Contractor shall comply with the
worker's compensation law concerning its business and its employees.

         8. TERM OF AGREEMENT. This Agreement shall commence on the date of this
Agreement for an initial term of three (3) years unless terminated in accordance
with the provisions set forth in either Paragraph 9 or 10 herein below.

         9. TERMINATION WITHOUT CAUSE. Either party may terminate this Agreement
by giving written notice to the other party at least 60 days prior to the end of
the then current term. Such termination may be made with or without cause.
During the 60 day period after such notice
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is sent, the parties shall continue to perform the covenants set forth herein
and shall act toward each other in good faith. If the Company terminates the
Agreement under Paragraph 9 hereof, then Independent Contractor shall be
entitled to the aggregate of the unpaid monthly fees for the remaining term of
the Agreement.

         10. TERMINATION WITH CAUSE. Either party may terminate this Agreement
with reasonable cause effective immediately upon the giving of written notice of
termination for cause. The grounds for reasonable cause shall include a material
violation of this Agreement or the performance of any act exposing the other
party to liability for personal injury or property damage. Company may terminate
this Agreement immediately upon written notice if Independent Contractor acts in
a manner which is reasonably likely to damage the Company's reputation, business
or relationship with its suppliers or customers.

         11. INDEMNITY; INSURANCE. The Independent Contractor shall indemnify
and hold harmless the Company for all acts or decisions made by the Independent
Contractor while performing services for the Company. The Independent Contractor
represents and warrants to the Company that she/he carries appropriate insurance
coverages (including, without limitation, general liability insurance in the
amount of not less than $100,000 per occurrence) for the services to be
performed and covenants to carry such policies during the term hereof.

         12. CONFIDENTIALITY/RESTRICTIVE COVENANT. The Independent Contractor
acknowledges and agrees that the Company's confidential information, including
the identity of, and access to, its customers and clients, is a special and
unique asset of the Company. In recognition of this fact, the Independent
Contractor agrees that during the term hereof and at any time thereafter the
Independent Contractor will not disclose to any third party any of the Company's
confidential information, including the identity of, or any information relating
to, any of the Company's customers or clients. In addition, during the term
hereof and for a period of twelve (12) months thereafter, the Independent
Contractor agrees that he will not, directly or indirectly, induce any customer
or client of the Company to terminate its relationship with the Company.

         13. EQUITABLE RELIEF. The Independent Contractor acknowledges that the
restrictions
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contained in Paragraph 12, in view of the nature of the business in which the
Company is engaged, are reasonable and necessary in order to protect the
legitimate interests of the Company, and that any violation the restrictions
would result in irreparable injury to the Company, and the Independent
Contractor therefore acknowledges that, in the event of the Independent
Contractor's violation of any of these restrictions, the Company shall be
entitled to obtain from any court of competent jurisdiction preliminary and
permanent injunctive relief as well as damages and an equitable accounting of
all earnings, profits and other benefits arising from such violation, which
rights shall be cumulative and in addition to any other rights or remedies to
which the Company may be entitled.

         14. NON-WAIVER. The failure of either party to this Agreement to
exercise any of its rights under this Agreement at any time shall not constitute
a breach thereof and shall not be deemed to be a waiver of such rights or a
waiver of any subsequent breach.

         15. NO AUTHORITY TO BIND CLIENT. The Independent Contractor shall have
no authority to enter into contracts or agreements on behalf of the Company.
This Agreement shall not create a partnership or joint venture between the
parties.

         16. REPRESENTATION OF INDEPENDENT CONTRACTOR. The Independent
Contractor represents and warrants to the Company that it has complied with all
federal, state and local laws regarding business permits and licenses, if any,
that may be required to carry out the work to be performed under this Agreement.

         17. NOTICES. Any notice given in connection with this Agreement shall
be given in writing and delivered either by hand to the party or by certified
mail, return receipt requested, or by fax to the party at that party's address
stated herein. Any party may change its address stated herein by giving notice
of the change in accordance with this Paragraph.

         18. ASSIGNMENT OF CONTRACT. The Independent Contractor shall not assign
this Agreement in whole or in part. Any such attempt to assign this Agreement
shall be null and void.
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         19. CHOICE OF LAW. Any dispute under this Agreement or related to this
Agreement shall be decided in accordance with the laws of the Commonwealth of
Pennsylvania.

         20. DISPUTE RESOLUTION. Except as permitted in accordance with
Paragraph 13 of this Agreement, the Independent Contractor and the Company agree
that any dispute or conflict arising out of or relating to this Agreement shall
first be submitted for good faith nonbinding mediation. The mediator shall be
selected by agreement of the parties. If complete agreement cannot be reached
within 120 days of submission, any remaining disputes shall be submitted for
binding arbitration, unless the parties mutually agree otherwise. All
proceedings conducted hereunder shall be governed by the rules and standards set
forth by the American Arbitration Association, unless the parties mutually agree
otherwise, and shall be conducted in Delaware County, Pennsylvania. The expense
of all proceedings (other than for legal representation) conducted hereunder
shall be borne equally by the parties. The award rendered by the arbitrator or
arbitrators shall be final, and judgment may be entered upon it in accordance
with applicable law in any court having jurisdiction thereof.

         21. ENTIRE AGREEMENT. This is the entire Agreement between the parties
and cannot be changed or modified orally. This Agreement may be supplemented,
amended or revised only by a writing which is signed by each of the parties. All
exhibits referenced herein are made a part of this Agreement.

         22. SEVERABILITY. If any part of this Agreement shall be held to be
unenforceable, the remainder of this Agreement shall remain in full force and
effect.
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                  IN WITNESS WHEREOF, the parties hereto have executed this
Agreement as of the date first above written.

                                          COMPANY:

                                          PSB BANCORP, INC.

                                          By
                                            --------------------------------


                                          INDEPENDENT CONTRACTOR:


                                          ----------------------------------
                                                   Frank J. Moran
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                                    EXHIBIT A

                                   EXHIBIT "A"
                         LIST OF GENERAL COUNSEL DUTIES

The following is a general statement of duties and they are as follows:

         1. Attendance at all meetings of the Board of Directors of PSB Bancorp,
Inc. and such other Committees that PSB Bancorp, Inc. may request general
counsel to attend;

         2. Legal review of all contractual documents including but not limited
to leases, vendor contracts, service contracts, sales agreements, loan
participation agreements and other contracts of a general nature;

         3. Provide legal advice as requested by the Officers and Directors of
PSB Bancorp, Inc. on a continuing basis concerning routine general operations of
the Company;

         4. Maintain basic representation in all bankruptcy matters including
the following: Opening a bankruptcy file and maintaining communications with the
Court and the debtor's attorney; filing claim petitions with the Court;
reviewing all Orders of the Court as well as any and all Petitions and Motions
filed by the Debtor; maintaining general communications necessary with the
Creditors attorneys; referring where appropriate specific bankruptcy matters to
specialized bankruptcy counsel;

         5. Review of all banking related compliance materials sent to PSB
Bancorp, Inc. and, where appropriate, sending necessary correspondence to the
appropriate officials concerning the impact of such regulatory directives, etc.
also included within
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these duties are reviews of any and all federal regulations issued by federal
regulatory agencies.

         6. Providing legal advice with regard to estate law, commercial law,
banking law and regulations, forwarded to General Counsel from various
departments of PSB Bancorp, Inc. and/or its subsidiaries;

         7. Representation of PSB Bancorp, Inc. and/or its subsidiaries in minor
contractual legal matters in the Court of Common Pleas, Philadelphia, Delaware,
Chester, Montgomery and Bucks counties and also at the District Court level;

         8. Coordinate insurance claims made against PSB Bancorp, Inc. and/or
its subsidiaries acting as a conduit between PSB Bancorp, Inc. and/or its
subsidiaries and its employees and the applicable insurance company;

         9. Maintaining files for the collection of Federal regulatory agency,
newsletters, comments, regulatory changes, opinions and where appropriate
sending legal analysis of these documents to bank personnel;

         10. Where necessary, consulting with the Board concerning retaining
services of outside counsel for representation in matters requiring specialized
knowledge of an attorney;

         11. Maintaining an open line for inquiries from the tellers and all
employees having basic questions concerning Powers of Attorney, etc.;

         12. Providing all members of PSB Bancorp, Inc. and/or its subsidiaries
with a means to access to an attorney for the purposes of answering basic legal
questions;

         13. Providing informational memorandum on present and proposed
regulatory matters concerning PSB Bancorp, Inc. and/or its subsidiaries;
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         14. Providing informational memorandum and analysis of developments in
the law having particular relevance to banking institutions.