U.S. SECURITIES AND EXCHANGE COMMISSION
                             Washington, D.C. 20549

                                   FORM 10-QSB

(Mark One)

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


For the quarterly period ended March 31, 2000

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

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

Commission file number   333-44161
                       -----------


                               PSB BANCGROUP, INC.
         ---------------------------------------------------------------
        (Exact Name of Small Business Issuer as Specified in Its Charter)


        Florida                                          59-3454146
-------------------------                              --------------
(State or Other Jurisdiction                          (I.R.S. Employer
of Incorporation or Organization)                     Identification No.)

                             500 South First Street
                            Lake City, Florida 32025
                     --------------------------------------
                    (Address of Principal Executive Offices)

                                 (904) 754-0002
                 ----------------------------------------------
                (Issuer's Telephone Number, Including Area Code)


         --------------------------------------------------------------
         (Former Name, Former Address and Former Fiscal Year, if Changed
                               Since Last Report)

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

YES  X     NO
    ----

   State the number of shares  outstanding  of each of the  issuer's  classes of
common equity, as of the latest practicable date;

Common stock, par value $.01 per share                      515,034 shares
--------------------------------------             ----------------------------
            (class)                                Outstanding at April 18, 2000

                                                           (CONFORMED COPY)

<PAGE>





                       PSB BANCGROUP, INC. AND SUBSIDIARY

                                      INDEX

PART I. FINANCIAL INFORMATION

   Item 1. Financial Statements                                         Page

     Condensed Consolidated Balance Sheets -
       At March 31, 2000 (Unaudited) and At December 31, 1999..............2

     Condensed Consolidated Statements of Operations (Unaudited) -
       Three Months ended March 31, 2000 and 1999..........................3

     Condensed Consolidated Statement of Changes in Stockholders
       Equity (Unaudited) - Three Months Ended March 31, 2000..............4

     Condensed Consolidated Statements of Cash Flows (Unaudited) -
       Three Months Ended March 31, 2000 and 1999..........................5

     Notes to Condensed Consolidated Financial Statements (Unaudited)......6

     Review by Independent Certified Public Accountants....................7

     Report on Review by Independent Certified Public Accountants..........8

   Item 2.  Management's Discussion and Analysis of Financial Condition

     and Results of Operations.............................................9

   Item 3. Quantitative and Qualitative Disclosure about Market Risk......10

PART II. OTHER INFORMATION

   Item 1.  Legal Proceedings.............................................11

   Item 6.  Exhibits and Reports on Form 8-K..............................11

SIGNATURES................................................................12


                                       1
<PAGE>
<TABLE>


                       PSB BANCGROUP, INC. AND SUBSIDIARY

                          PART I. FINANCIAL INFORMATION

                          Item 1. Financial Statements

                      Condensed Consolidated Balance Sheets

                                                                                           March 31,       December 31,
    Assets                                                                                   2000              1999
                                                                                             ----              ----
                                                                                          (unaudited)

<S>                                                                                      <C>                   <C>
Cash and due from banks                                                                  $    778,329          929,837
Interest-bearing deposits with banks                                                           11,099          145,833
Federal funds sold                                                                          2,482,000        2,182,000
                                                                                           ----------       ----------

              Total cash and cash equivalents                                               3,271,428        3,257,670

Securities available for sale                                                               1,473,300        1,475,027
Securities held to maturity                                                                 1,000,000        1,000,000
Loans receivable, net of allowance for loan losses of $55,426 in
    2000 and $42,382 in 1999                                                                5,478,119        4,235,120
Accrued interest receivable                                                                    72,351           79,439
Premises and equipment, net                                                                   740,085          366,500
Federal Home Loan Bank stock, at cost                                                          14,400            9,400
Deferred income taxes                                                                         310,360          250,095
Other assets                                                                                  117,740          122,990
                                                                                           ----------       ----------

              Total assets                                                               $ 12,477,783       10,796,241
                                                                                           ==========       ==========

    Liabilities and Stockholders' Equity

Liabilities:
    Noninterest-bearing demand deposits                                                       968,023          907,021
    Savings, NOW and money-market deposits                                                  2,224,027        2,267,127
    Time deposits                                                                           5,102,256        3,386,261
                                                                                           ----------       ----------

              Total deposits                                                                8,294,306        6,560,409

    Accrued interest payable and other liabilities                                             99,044           58,562
                                                                                           ----------       ----------

              Total liabilities                                                             8,393,350        6,618,971
                                                                                           ----------       ----------

Stockholders' equity:
    Preferred stock                                                                              -                -
    Common stock                                                                                5,151            5,145
    Additional paid-in capital                                                              4,592,655        4,587,657
    Accumulated deficit                                                                      (500,545)        (404,244)
    Accumulated other comprehensive income (loss)                                             (12,828)         (11,288)
                                                                                           ----------       ----------

              Total stockholders' equity                                                    4,084,433        4,177,270
                                                                                           ----------       ----------

              Total liabilities and stockholders' equity                                 $ 12,477,783       10,796,241
                                                                                           ==========       ==========







See Accompanying Notes to Condensed Consolidated Financial Statements.
</TABLE>

                                       2
<PAGE>
<TABLE>


                       PSB BANCGROUP, INC. AND SUBSIDIARY

           Condensed Consolidated Statements of Operations (Unaudited)

                                                                                                 Three Months Ended
                                                                                                   March 31,

                                                                                                 2000            1999
                                                                                                 ----            ----
Interest income:
<S>                                                                                           <C>
    Loans receivable                                                                          $ 113,587           -
    Securities                                                                                   38,378           -
    Other interest-earning assets                                                                35,014         52,389
                                                                                                -------         ------

              Total interest income                                                             186,979         52,389
                                                                                                -------         ------

Interest expense:
    Deposits                                                                                     73,579           -
    Borrowings                                                                                     -             7,729
                                                                                                -------         ------

              Total interest expense                                                             73,579          7,729
                                                                                                -------         ------

Net interest income                                                                             113,400         44,660

              Provision for loan losses                                                          13,044           -
                                                                                                -------         ------

Net interest income after provision for loan losses                                             100,356         44,660
                                                                                                -------         ------

Noninterest income-
    Service charges on deposit accounts and other fees                                           17,164           -
                                                                                                -------         ------

Noninterest expenses:
    Salaries and employee benefits                                                               87,483         49,563
    Occupancy expense                                                                            37,414          4,239
    Professional fees                                                                             9,520            540
    Data processing                                                                              22,175           -
    Litigation expense                                                                           89,382           -
    Other                                                                                        27,222         11,754
                                                                                                -------         ------

              Total noninterest expenses                                                        273,196         66,096
                                                                                                -------         ------

              Loss before income tax benefit                                                   (155,676)       (21,436)

Income tax benefit                                                                              (59,375)        (7,997)
                                                                                                -------         ------

              Net loss                                                                        $ (96,301)       (13,439)
                                                                                                =======         ======

Loss per share, basic and diluted                                                             $    (.19)          (.14)
                                                                                                =======         ======

Weighted-average number of shares outstanding, basic and diluted                                514,881         95,993
                                                                                                =======         ======

Dividends per share                                                                           $    -              -
                                                                                                =======         ======



See Accompanying Notes to Condensed Consolidated Financial Statements.
</TABLE>

                                       3
<PAGE>
<TABLE>


                       PSB BANCGROUP, INC. AND SUBSIDIARY

       Condensed Consolidated Statement of Changes in Stockholders" Equity

                    For the Three Months Ended March 31, 2000


                                                                                                   Accumulated
                                                                                                      Other
                                                                                                     Compre-
                                              Common Stock         Additional                        hensive         Total
                                           -------------------      Paid-In        Accumulated        Income      Stockholders'
                                           Shares       Amount      Capital         Deficit           (Loss)         Equity
                                           ------       ------     ----------      -----------     ------------  -------------
<S>                 <C> <C>               <C>          <C>          <C>               <C>            <C>            <C>
Balance at December 31, 1999              514,478      $ 5,145      4,587,657         (404,244)      (11,288)       4,177,270
                                                                                                                    ---------

Comprehensive income (loss):
         Net loss (unaudited)                -            -              -             (96,301)         -             (96,301)

         Net change in unrealized
             loss on securities
             available for sale,
             net of income taxes
             of $890 (unaudited)             -            -              -                -           (1,540)          (1,540)
                                                                                                                    ----------

Comprehensive income (loss)
             (unaudited)                                                                                              (97,841)

Issuance of common stock upon
         exercise of warrants
         (unaudited)                          556            6          4,998             -             -               5,004
                                         --------      -------    -----------       -----------     ---------       ----------

Balance at March 31, 2000
         (unaudited)                      515,034      $ 5,151      4,592,655          (500,545)      (12,828)      4,084,433
                                          =======        =====      =========           =======        ======       =========

















See Accompanying Notes to Condensed Consolidated Financial Statements.
</TABLE>
                                       4

<PAGE>
<TABLE>


                       PSB BANCGROUP, INC. AND SUBSIDIARY

           Condensed Consolidated Statements of Cash Flows (Unaudited)

                                                                                              Three Months Ended
                                                                                                  March 31,

                                                                                             2000            1999
                                                                                             ----            ----
Cash flows from operating activities:

<S>                                                                                    <C>                 <C>
    Net loss                                                                           $     (96,301)      (13,439)
    Adjustments to reconcile net loss to net cash used in
      operating activities:
         Depreciation and amortization                                                         3,789          -
         Provision for loan losses                                                            13,044          -
         Deferred income tax benefit                                                         (59,375)       (7,997)
         Net amortization of fees, costs, premiums and discounts                               2,887          -
         Decrease in accrued interest receivable and
              other assets                                                                    12,338         7,642
         Increase in accrued interest payable and other liabilities                           40,482          -
                                                                                          ----------     ---------

                  Net cash used in operating activities                                      (83,136)      (13,794)
                                                                                          ----------     ---------

Cash flows from investing activities:

    Net increase in loans                                                                 (1,259,633)         -
    Purchase of Federal Home Loan Bank stock                                                  (5,000)         -
    Purchase of premises and equipment                                                      (377,374)         -
                                                                                          ----------     ---------

                  Net cash used in investing activities                                   (1,642,007)         -
                                                                                          ----------     ---------

Cash flows from financing activities:

    Net increase in deposits                                                               1,733,897          -
    Net decrease in borrowings                                                                  -         (465,000)
    Net proceeds from issuance of common stock                                                 5,004     4,362,015
                                                                                          ----------     ---------

                  Net cash provided by financing activities                                1,738,901     3,897,015
                                                                                          ----------     ---------

Net increase in cash and cash equivalents                                                     13,758     3,883,221

Cash and cash equivalents at beginning of period                                           3,257,670        44,568
                                                                                          ----------     ---------

Cash and cash equivalents at end of period                                               $ 3,271,428     3,927,789
                                                                                          ==========     =========

Supplemental  disclosure of cash flow  information:
  Cash paid during the period for:
         Interest                                                                        $    34,552         7,729
                                                                                          ==========     =========

         Income taxes                                                                    $      -             -
                                                                                          ==========     =========

    Noncash transaction-
         Accumulated other comprehensive income (loss), change in
              unrealized loss on securities available for sale, net of tax               $    (1,540)         -
                                                                                          ==========     =========


See Accompanying Notes to Condensed Consolidated Financial Statements.
</TABLE>


<PAGE>


                       PSB BANCGROUP, INC. AND SUBSIDIARY

        Notes to Condensed Consolidated Financial Statements (unaudited)

(1) Description of Business and Basis on Presentation

     General.  In  the  opinion  of  management,   the  accompanying   condensed
         consolidated  financial statements contain all adjustments  (consisting
         principally of normal recurring  accruals)  necessary to present fairly
         the financial  position at March 31, 2000 and the results of operations
         and cash flows for the  three-month  periods  ended  March 31, 2000 and
         1999.  The results of  operations  for the three months ended March 31,
         2000 are not  necessarily  indicative of the results to be expected for
         the year ending December 31, 2000.

     PSB BancGroup,  Inc.  ("PSB") was  incorporated  on June 30, 1997. PSB owns
         100% of the  outstanding  common stock of Peoples  State Bank  ("Bank")
         (collectively the "Company"). PSB was organized simultaneously with the
         Bank and its only  business is the ownership and operation of the Bank.
         The Bank is a Florida state-chartered  commercial bank and its deposits
         are  insured by the Federal  Deposit  Insurance  Corporation.  The Bank
         opened for  business on April 28, 1999 and provides  community  banking
         services to businesses and individuals in Lake City, Florida.

(2)  Loan Impairment and Loan Losses

     No  loans were  identified  as impaired at or during the three months ended
         March 31,  2000.  The Bank had not opened for  business as of March 31,
         1999. The activity in the allowance for loan losses is as follows:

                                                                Three
                                                                Months
                                                                Ended
                                                               March 31,
                                                               --------
                                                                 2000
                                                                 ----
                Balance at beginning of period                $ 42,382
                Provision for loan losses                       13,044
                                                                ------

                Balance at end of period                      $ 55,426
                                                                ======

(3)  Loss Per Share

     Basic and  diluted  loss per share have been  computed  on the basis of the
         weighted-average  number of shares of common stock  outstanding  during
         the periods.

(4) Regulatory Matters

     The Bank  is  required  to  maintain  certain  minimum  regulatory  capital
         requirements.  The  following  is a summary  at March  31,  2000 of the
         regulatory  capital  requirements  and the Bank's  actual  capital on a
         percentage basis:

                                                                     Regulatory
                                                            Actual   Requirement

         Total capital to risk-weighted assets               38.29%      8.00%
         Tier I capital to risk-weighted assets              49.76%      4.00%
         Tier I capital to total assets - leverage ratio     33.54%      4.00%


                                       6
<PAGE>


                       PSB BANCGROUP, INC. AND SUBSIDIARY

               Review by Independent Certified Public Accountants

Hacker,  Johnson,  Cohen & Grieb PA, the Company's  independent certified public
accountants,  have made a limited  review of the financial  data as of March 31,
2000, and for the three-month periods ended March 31, 2000 and 1999 presented in
this  document,  in  accordance  with  standards  established  by  the  American
Institute of Certified Public Accountants.

Their  report  furnished  pursuant to Article 10 of  Regulation  S-X is included
herein.





















                                       7
<PAGE>



          Report on Review by Independent Certified Public Accountants

The Board of Directors
PSB BancGroup, Inc.
Lake City, Florida:

     We have reviewed the accompanying  condensed  consolidated balance sheet of
PSB BancGroup, Inc. and Subsidiary (the "Company") as of March 31, 2000, and the
related condensed  consolidated  statements of operations and cash flows for the
three-month   periods  ended  March  31,  2000  and  1999,   and  the  condensed
consolidated  statement of changes in  stockholders'  equity for the three-month
period ended March 31, 2000. These financial  statements are the  responsibility
of the Company's management.

     We conducted our review in accordance  with  standards  established  by the
American  Institute  of  Certified  Public  Accountants.  A  review  of  interim
financial  information consists principally of applying analytical procedures to
financial  data and making  inquiries of persons  responsible  for financial and
accounting matters. It is substantially less in scope than an audit conducted in
accordance with generally accepted auditing standards, the objective of which is
the  expression  of an opinion  regarding the  financial  statements  taken as a
whole. Accordingly, we do not express such an opinion.

     Based on our review,  we are not aware of any material  modifications  that
should be made to the condensed  consolidated  financial  statements referred to
above  for  them  to  be  in  conformity  with  generally  accepted   accounting
principles.

     We have previously  audited, in accordance with generally accepted auditing
standards,  the  consolidated  balance  sheet as of December 31,  1999,  and the
related consolidated  statements of operations,  changes in stockholders' equity
and cash flows for the year then ended (not presented herein); and in our report
dated February 8, 2000 we expressed an unqualified opinion on those consolidated
financial  statements.  In  our  opinion,  the  information  set  forth  in  the
accompanying  condensed  consolidated  balance sheet as of December 31, 1999, is
fairly stated, in all material respects, in relation to the consolidated balance
sheet from which it has been derived.

HACKER, JOHNSON, COHEN & GRIEB PA
Tampa, Florida
April 18, 2000

                                       8
<PAGE>


                       PSB BANCGROUP, INC. AND SUBSIDIARY

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

               Comparison of March 31, 2000 and December 31, 1999

Liquidity and Capital Resources

    The Company's primary source of cash during the three months ended March 31,
    2000 was from net deposit  inflows of $1.7 million.  Cash was used primarily
    to originate loans, net of principal  repayments,  totaling $1.3 million. At
    March 31, 2000, the Company had unfunded lines of credit  totaling  $252,000
    and had time deposits of $4.2 million maturing in one year or less. At March
    31, 2000, the Bank exceeded its regulatory liquidity requirements.

                   Three Months Ended March 31, 2000 and 1999

Results of Operations

General. Net loss for the three months ended March 31, 2000 was $96,301 compared
   to a net  loss of  $13,439  for the  comparable  period  in  1999.  The  Bank
   commenced  operations on April 28, 1999.  At March 31, 2000,  the Company had
   not achieved the asset size to operate profitably.

Interest Income.  Interest  income was $186,979 for the three months ended March
   31, 2000.  Interest  income  earned on loans was  $113,587.  The average loan
   portfolio  balance was $4.9 million for the three months ended March 31, 2000
   and the average yield earned was 9.33%.

Interest Expense.  Interest expense on deposits was $73,579 for the three months
   ended March 31, 2000. The average  balance of  interest-bearing  deposits was
   $6.3  million for the three  months ended March 31, 2000 and the average cost
   was 4.66%.

Provision for Loan Losses.  The provision for loan losses is charged to earnings
   to increase the total  allowance to a level deemed  appropriate by management
   and is based upon the volume and type of lending  conducted  by the  Company,
   industry  standards,  the amount of nonperforming  loans and general economic
   conditions,  particularly as they relate to the Company's  market areas,  and
   other factors related to the  collectibility of the Company's loan portfolio.
   The Company  recorded a provision  for loan losses for the three months ended
   March 31,  2000 of $13,044 and the  allowance  for loan losses was $55,426 at
   March 31, 2000.  Management  believes the  allowance is adequate at March 31,
   2000.

Noninterest Expense. Noninterest expense was $273,196 for the three months ended
   March 31, 2000 compared to $66,096 for the three months ended March 31, 1999.
   A portion of this  increase  resulted  from  $89,382 in  litigation  expenses
   associated  with the civil suit  brought  against  the  Company by the former
   President of the Bank. Noninterest expense also increased due to commencement
   of banking operations.

Income Tax Benefit.  The income tax benefit for the three months ended March 31,
   2000 was $59,375 (an effective rate of 38.1%).

                                Year 2000 Issues

The Company's  operating and financial  systems have been found to be compliant;
the "Y2K Problem" has not adversely  affected the Company's  operations nor does
management expect that it will.

                                       9
<PAGE>


                       PSB BANCGROUP, INC. AND SUBSIDIARY

Item 3.  Quantitative and Qualitative Disclosures About Market Risk

Market risk is the risk of loss from adverse changes in market prices and rates.
The Company's  market risk arises  primarily from interest rate risk inherent in
its  lending and deposit  taking  activities.  The Company has little or no risk
related to trading accounts, commodities or foreign exchange.

Management  actively  monitors and manages its interest rate risk exposure.  The
primary objective in managing interest-rate risk is to limit, within established
guidelines, the adverse impact of changes in interest rates on the Company's net
interest  income and capital,  while  adjusting  the  Company's  asset-liability
structure to obtain the maximum yield-cost spread on that structure.  Management
relies primarily on its asset-liability structure to control interest rate risk.
However,  a sudden and  substantial  increase in interest rates could  adversely
impact the Company's  earnings,  to the extent that the interest  rates borne by
assets and liabilities do not change at the same speed,  to the same extent,  or
on the same  basis.  There have been no  significant  changes  in the  Company's
market risk exposure since December 31, 1999.















                                       10
<PAGE>


                       PSB BANCGROUP, INC. AND SUBSIDIARY

                           PART II. OTHER INFORMATION

Item 1.  Legal Proceedings

        On September 19, 1999,  C.F.  Douglas,  the Bank's former  President and
        Chief Executive Officer, filed a lawsuit against PSB, the Bank and seven
        of  the  eight  Bank  directors  relating  to  the  termination  of  his
        employment by the Bank.  The lawsuit  alleged  breach of his  employment
        contract,  tortious  interference  with the  contract  and a  fraudulent
        inducement regarding his entering into the contract.  On March 23, 2000,
        the parties  agreed to  amicably  settle the  lawsuit.  The terms of the
        settlement  called  for  the  Company  to pay  Mr.  Douglas  a lump  sum
        settlement  in an amount less than $90,000 and for Mr.  Douglas to fully
        release  all the  defendants,  as well as all  employees,  officers  and
        directors  of PSB and the Bank,  from any and all claims  related to his
        employment.

Item 6.  Exhibits and Reports on Form 8-K

(a)     Exhibits.  The  following  exhibits  are filed with or  incorporated  by
        reference into this report. The exhibits marked by a single asterisk (*)
        were previously filed as a part of PSB's Registration  Statement on Form
        SB-2,  as  effective  with the  Securities  and Exchange  Commission  on
        January 13, 1998, Registration No. 333-44161 and are hereby incorporated
        by  reference.  The  exhibits  marked  by a double  asterisk  (**)  were
        previously  filed as part of PSB's  Amendment No. 3 to the  Registration
        Statement  on Form  SB-2 as  filed  with  the  Securities  and  Exchange
        Commission  on May 18,  1998,  Registration  No.  333-44161  and  hereby
        incorporated by reference. The exhibit numbers correspond to the exhibit
        numbers in the referenced documents.

        Exhibit No.       Description of Exhibit

            *3.1          Articles of Incorporation of PSB BancGroup, Inc.
            *3.2          Bylaws of PSB BancGroup, Inc.
            *4.1          Specimen Common Stock Certificate
            *4.2          Specimen Warrant Certificate
            *4.4          PSB Bancgroup, Inc. Warrant Plan
           **4.5          Amended and Restated Warrant Plan
           *10.1          Employment Agreement with Robert W. Woodard
           *10.2          Land Purchase Agreement
          **10.3          Addendum to Land Purchase Agreement
          **10.4          Amended Employment Agreement with Robert W. Woodard
            10.6          Employment Agreement with Wesley T. Small
              27          Financial Data Schedule (for SEC use only)

(b)     Reports on Form 8-K.  There were no reports on Form 8-K filed during the
        three months ended March 31, 2000.


                                       11
<PAGE>


                       PSB BANCGROUP, INC. AND SUBSIDIARY

                                   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.

                                          PSB BANCGROUP, INC.
                                             (Registrant)





Date:  May 3, 2000                        By: /s/ Alton C Milton
      ---------------------                   --------------------------------
                                              Alton C. Milton, Sr.,
                                              Chairman of the Board




Date:  May 3, 2000                        By: /s/ Robert W. Woodard
      ---------------------                   --------------------------------
                                              Robert W. Woodard, President and
                                              Chief Executive Officer
                                              (Principal Financial Officer)







                                       12