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 June 30, 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                        515,784 shares
--------------------------------------              ----------------------------
                 (class)                            Outstanding at July 13, 2000


<PAGE>



                       PSB BANCGROUP, INC. AND SUBSIDIARY

                                      INDEX

PART I. FINANCIAL INFORMATION

   Item 1. Financial Statements                                            Page

     Condensed Consolidated Balance Sheets -
       At June 30, 2000 (Unaudited) and At December 31, 1999..................2

     Condensed Consolidated Statements of Operations (Unaudited) -
       Three and Six Months ended June 30, 2000 and 1999......................3

     Condensed Consolidated Statement of Changes in Stockholders"
       Equity (Unaudited) - Six Months Ended June 30, 2000....................4

     Condensed Consolidated Statements of Cash Flows (Unaudited) -
       Six Months Ended June 30, 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.............................................9-10

   Item 3. Quantitative and Qualitative Disclosure about Market Risk.........11

PART II. OTHER INFORMATION

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

   Item 4.  Submission of Matters to a Vote of Security Holders..............12

   Item 6.  Exhibits and Reports on Form 8-K.................................13

SIGNATURES...................................................................14


                                       1
<PAGE>
<TABLE>


                       PSB BANCGROUP, INC. AND SUBSIDIARY

                          PART I. FINANCIAL INFORMATION

                          Item 1. Financial Statements

                      Condensed Consolidated Balance Sheets

                                                                                        June 30,        December 31,
    Assets                                                                                2000              1999
                                                                                          ----              ----
                                                                                                        (unaudited)

<S>                                                                                  <C>                   <C>
Cash and due from banks                                                              $    818,166          929,837
Interest-bearing deposits with banks                                                       11,049          145,833
Federal funds sold                                                                        229,000        2,182,000
                                                                                       ----------       ----------

              Total cash and cash equivalents                                           1,058,215        3,257,670

Securities available for sale                                                           2,804,868        1,475,027
Securities held to maturity                                                               500,000        1,000,000
Loans receivable, net of allowance for loan losses of $90,514 in
    2000 and $42,382 in 1999                                                            7,222,671        4,235,120
Accrued interest receivable                                                               106,704           79,439
Premises and equipment, net                                                             1,305,010          366,500
Federal Home Loan Bank stock, at cost                                                      14,400            9,400
Deferred income taxes                                                                     361,966          250,095
Other assets                                                                              137,043          122,990
                                                                                       ----------       ----------

              Total assets                                                           $ 13,510,877       10,796,241
                                                                                       ==========       ==========

    Liabilities and Stockholders' Equity

Liabilities:
    Noninterest-bearing demand deposits                                                 1,139,604          907,021
    Savings, NOW and money-market deposits                                              2,019,373        2,267,127
    Time deposits                                                                       6,212,148        3,386,261
                                                                                       ----------       ----------

              Total deposits                                                            9,371,125        6,560,409

    Accrued interest payable and other liabilities                                        133,423           58,562
                                                                                       ----------       ----------

              Total liabilities                                                         9,504,548        6,618,971
                                                                                       ----------       ----------

Stockholders' equity:
    Preferred stock                                                                          -                -
    Common stock                                                                            5,152            5,145
    Additional paid-in capital                                                          4,594,454        4,587,657
    Accumulated deficit                                                                  (576,749)        (404,244)
    Accumulated other comprehensive income (loss)                                         (16,528)         (11,288)
                                                                                       ----------       ----------

              Total stockholders' equity                                                4,006,329        4,177,270
                                                                                       ----------       ----------

              Total liabilities and stockholders' equity                             $ 13,510,877       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           Six Months Ended
                                                                          June 30,                     June 30,
                                                                  ---------------------------------------------------
                                                                     2000            1999        2000          1999
                                                                     ----            ----        ----          ----
<S>                                                               <C>              <C>          <C>            <C>
Interest income:
     Loans receivable                                             $ 153,933         7,545       267,520         7,545
     Securities                                                      46,347           506        84,725           506
     Other interest-earning assets                                   18,481        45,445        53,495        97,834
                                                                    -------       -------       -------       -------

               Total interest income                                218,761        53,496       405,740       105,885
                                                                    -------       -------       -------       -------

Interest expense:
     Deposits  97,264                                                 6,120       170,843         6,120
     Borrowings                                                        -            4,342          -           12,071
                                                                    -------       -------       -------       -------

               Total interest expense                                97,264        10,462       170,843        18,191
                                                                    -------       -------       -------       -------

               Net interest income                                  121,497        43,034       234,897        87,694

Provision for loan losses                                            35,088         5,472        48,132         5,472
                                                                    -------      --------       -------       -------

Net interest income after provision
     for loan losses                                                 86,409        37,562       186,765        82,222
                                                                    -------      --------       -------       -------

Noninterest income-
     Service charges on deposit accounts and
          other fees                                                 18,997           849        36,161           849
                                                                    -------     ---------       -------       -------

Noninterest expense:
     Salaries and employee benefits                                  99,265       100,042       186,748       149,605
     Occupancy expense                                               46,139        19,214        83,553        23,453
     Professional fees                                               30,415        14,860        39,935        15,400
     Data processing                                                 23,504        18,111        45,679        18,111
     Litigation expense                                                -             -           89,382          -
     Other                                                           31,622        17,698        58,844        29,452
                                                                    -------       -------       -------       -------

               Total other expense                                  230,945       169,925       504,141       236,021
                                                                    -------       -------       -------       -------

               Loss before income tax benefit                      (125,539)     (131,514)     (281,215)     (152,950)

Income tax benefit                                                  (49,335)      (49,318)     (108,710)      (57,315)
                                                                    -------       -------       -------       -------

               Net loss                                           $ (76,204)      (82,196)     (172,505)      (95,635)
                                                                    =======       =======       =======       =======

Loss per share, basic and diluted                                 $    (.15)         (.16)         (.34)         (.30)
                                                                    =======     =========     =========       =======

Weighted-average number of shares
     outstanding, basic and diluted                                 515,146       512,163       515,013       323,999
                                                                    =======       =======       =======       =======

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 Six Months Ended June 30, 2000

                                                                                                    Accumulated
                                                                                                       Other
                                                                                                       Compre-
                                                                   Additional                          hensive           Total
                                              Common Stock          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)                -            -              -             (172,505)         -             (172,505)

         Net change in unrealized
             loss on securities
             available for sale,
             net of income taxes
             of $3,161 (unaudited)           -            -              -                 -           (5,240)           (5,240)
                                                                                                                      ---------

Comprehensive income (loss)
             (unaudited)                                                                                               (177,745)

Issuance of common stock upon
         exercise of warrants
         (unaudited)                          756            7          6,797              -             -                6,804
                                         --------      -------    -----------       -----------     ---------        ----------

Balance at June 30, 2000
         (unaudited)                      515,234      $ 5,152      4,594,454          (576,749)      (16,528)        4,006,329
                                          =======        =====      =========           =======        ======         =========









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

                                       4
<PAGE>
<TABLE>


                       PSB BANCGROUP, INC. AND SUBSIDIARY

           Condensed Consolidated Statements of Cash Flows (Unaudited)

                                                                                              Six Months Ended
                                                                                                  June 30,

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

<S>                                                                                    <C>                    <C>
     Net loss                                                                          $   (172,505)          (95,635)
     Adjustments to reconcile net loss to net cash
       used in operating activities:
         Depreciation and amortization                                                       23,777             1,336
         Provision for loan losses  48,132                                                    5,472
         Deferred income tax benefit                                                       (108,710)          (57,315)
         Net amortization of fees, costs, premiums and discounts                              8,364              -
         Increase in accrued interest receivable and other assets                           (41,318)          (64,070)
         Increase in accrued interest payable and other liabilities                          74,861            50,086
                                                                                          ---------         ---------

               Net cash used in operating activities                                       (167,399)         (160,126)
                                                                                          ---------         ---------

Cash flows from investing activities:

     Purchase of securities held to maturity                                                   -           (1,000,000)
     Purchase of securities available for sale                                           (1,336,154)             -
     Proceeds from maturities of securities held to maturity                                500,000              -
     Purchase of premises and equipment                                                    (962,287)          (44,212)
     Net increase in loans          (3,046,135)                                            (748,915)
     Purchase of Federal Home Loan Bank stock                                                (5,000)           (9,400)
                                                                                          ---------         ---------

               Net cash used in investing activities                                     (4,849,576)       (1,802,527)
                                                                                          ---------         ---------

Cash flows from financing activities:

     Net increase in deposits                                                             2,810,716         2,135,316
     Net decrease in borrowings                                                                -             (465,000)
     Retirement of common stock                                                                -             (177,390)
     Net proceeds from issuance of common stock                                               6,804         4,583,802
                                                                                          ---------         ---------

               Net cash provided by financing activities                                  2,817,520         6,076,728
                                                                                          ---------         ---------

Net (decrease) increase in cash and cash equivalents                                     (2,199,455)        4,114,075

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

Cash and cash equivalents at end of period                                             $  1,058,215         4,158,643
                                                                                          =========         =========

Supplemental  disclosure of cash flow  information-
  Cash paid during the period for:
         Interest                                                                      $    110,290            14,110
                                                                                          =========         =========

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

     Noncash transaction-
         Accumulated other comprehensive income (loss), change
               in unrealized loss on securities available for sale,
               net of tax                                                              $     (5,240)             -
                                                                                          =========         =========


See Accompanying Notes to Condensed Consolidated Financial Statements.
</TABLE>
                                       5

<PAGE>


                       PSB BANCGROUP, INC. AND SUBSIDIARY

        Notes to Condensed Consolidated Financial Statements (unaudited)

(1) Description of Business and Basis of 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 June 30, 2000, the results of operations for
         the three- and six-month  periods ended June 30, 2000 and 1999 and cash
         flows for the  six-month  periods  ended  June 30,  2000 and 1999.  The
         results of operations  for the three and six months ended June 30, 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 six months  ended
         June 30, 2000 or 1999. The activity in the allowance for loan losses is
         as follows:
<TABLE>

                                                                     Three Months Ended          Six Months Ended
                                                                          June 30,                     June 30,
                                                                 -------------------------------------------------
                                                                     2000            1999        2000         1999
                                                                     ----            ----        ----         ----

<S>                                                              <C>                           <C>
                Balance at beginning of period                   $ 55,426            -         42,382         -
                Provision for loan losses                          35,088           5,472      48,132        5,472
                                                                   ------           -----      ------        -----

                Balance at end of period                         $ 90,514           5,472      90,514        5,472
                                                                   ======           =====      ======        =====
</TABLE>

(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. The Company's common stock equivalents are not dilutive.

(4) Regulatory Matters
     The Bank  is  required  to  maintain  certain  minimum  regulatory  capital
         requirements.  The  following  is a  summary  at June  30,  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              36.75%           8.00%
      Tier I capital to risk-weighted assets             35.83%           4.00%
      Tier I capital to total assets - leverage ratio    26.01%           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 June 30,
2000,  and for the three- and  six-month  periods  ended June 30,  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 June 30, 2000, the
related  condensed  consolidated  statements  of  operations  for the three- and
six-month   periods  ended  June  30,  2000  and  1999,  the  related  condensed
consolidated  statement  of changes in  stockholders'  equity for the  six-month
period ended June 30, 2000 and the related condensed consolidated  statements of
cash  flows for the  six-month  periods  ended  June 30,  2000 and  1999.  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
July 12, 2000


                                       8
<PAGE>


                       PSB BANCGROUP, INC. AND SUBSIDIARY

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

                Comparison of June 30, 2000 and December 31, 1999

Liquidity and Capital Resources

    The  Company's  primary  source of cash during the six months ended June 30,
    2000 was from net deposit  inflows of $2.8 million.  Cash was used primarily
    to originate loans, net of principal  repayments,  totaling $3.0 million and
    to purchase securities available for sale of $1.3 million. At June 30, 2000,
    the Company had unfunded  lines of credit  totaling $.5 million and had time
    deposits of $4.8 million maturing in one year or less. At June 30, 2000, the
    Bank exceeded its regulatory liquidity requirements.

                    Three Months Ended June 30, 2000 and 1999

Results of Operations

General.  Net loss for the three  months ended June 30, 2000 was $76,204 or $.15
   per basic and  diluted  share  compared  to a net loss of $82,196 or $.16 per
   basic and diluted share for the comparable period in 1999. The Bank commenced
   operations on April 28, 1999. At June 30, 2000,  the Company had not achieved
   the asset size to operate profitably.

Interest  Income.  Interest  income was $218,761 for the three months ended June
   30,  2000  compared to $53,496 for the  comparable  period in 1999.  Interest
   income earned on loans was $153,933 for the three months ended June 30, 2000.
   The average  loan  portfolio  balance was $6.3  million for the three  months
   ended June 30, 2000 and the average yield earned was 9.78%.

Interest Expense.  Interest expense on deposits was $97,264 for the three months
   ended June 30, 2000 compared to $6,120 for the comparable period in 1999. The
   average balance of  interest-bearing  deposits was $7.8 million for the three
   months ended June 30, 2000 and the average cost was 4.98%.

Provision  for  Loan  Losses.  The  provision  for loan  losses  is  charged  to
   operations 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 June 30, 2000 of $35,088 and the  allowance  for loan losses was
   $90,514 at June 30, 2000.  Management  believes the  allowance is adequate at
   June 30, 2000.

Noninterest Expense. Noninterest expense was $230,945 for the three months ended
   June 30, 2000  compared to $169,925 for the three months ended June 30, 1999.
   Noninterest expense increased due to the overall growth of the Company.

Income Tax  Benefit.  The income tax benefit for the three months ended June 30,
   2000 was  $49,335  (an  effective  rate of 39.3%)  compared  to  $49,318  (an
   effective tax rate of 37.5%) for the three months ended June 30, 1999.

                                       9
<PAGE>

                       PSB BANCGROUP, INC. AND SUBSIDIARY

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

                     Six Months Ended June 30, 2000 and 1999

Results of Operations

General.  Net loss for the six months  ended June 30, 2000 was  $172,505 or $.34
   per basic and  diluted  share  compared  to a net loss of $95,635 or $.30 per
   basic and diluted share for the comparable period in 1999. The Bank commenced
   operations on April 28, 1999. At June 30, 2000,  the Company had not achieved
   the asset size to operate profitably.

Interest Income.  Interest income was $405,740 for the six months ended June 30,
   2000 compared to $105,885 for the comparable period in 1999.  Interest income
   earned on loans was  $267,520  for the six months  ended June 30,  2000.  The
   average loan portfolio balance was $5.6 million for the six months ended June
   30, 2000 and the average yield earned was 9.62%.

Interest Expense.  Interest  expense on deposits was $170,843 for the six months
   ended June 30, 2000 compared to $6,120 for the comparable period in 1999. The
   average  balance of  interest-bearing  deposits  was $7.1 million for the six
   months ended June 30, 2000 and the average cost was 4.84%.

Provision  for  Loan  Losses.  The  provision  for loan  losses  is  charged  to
   operations 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 six
   months ended June 30, 2000 of $48,132 and the  allowance  for loan losses was
   $90,514 at June 30, 2000.  Management  believes the  allowance is adequate at
   June 30, 2000.

Noninterest Expense.  Noninterest  expense was $504,141 for the six months ended
   June 30, 2000  compared to $236,021 for the six months ended June 30, 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 the overall
   growth of the Company.

Income Tax  Benefit.  The income tax benefit  for the six months  ended June 30,
   2000 was  $108,710  (an  effective  rate of 38.7%)  compared  to $57,315  (an
   effective tax rate of 37.5%) for the six months ended June 30, 1999.

                                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.

                                       10
<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.

                           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 the Holding  Company,  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 the  Holding  Company  and the Bank,  from any and all claims
related to his employment.

                                       11
<PAGE>


                       PSB BANCGROUP, INC. AND SUBSIDIARY

Item 4. Submission of Matters to a Vote of Security Holders

The Annual Meeting of Shareholders (the "Annual Meeting") of PSB BancGroup, Inc.
was held on April 18, 2000, to consider the election of two directors each for a
term of three  years,  the  ratification  of the  appointment  of the  Company's
independent  auditors  for the year ending  December 31, 2000 and to approve the
Company's Amended 1998 Key Employee Stock Option and Limited Rights Plan.

At the Annual  Meeting,  415,356 shares were present in person or by proxy.  The
following is a summary and tabulation of the matters that were voted upon at the
Annual Meeting:

   Proposal I.

   The election of two directors, each for a term of three years:

                                                                     Abstentions
                                                                      and Broker
                                      For        Withheld   Against    Nonvotes
                                     -------     --------   -------  -----------

           John W. Burns III         374,225       41,131       -             -
                                     =======       ======   ========      =====

           Robert M. Eadie           374,225       41,131       -             -
                                     =======       ======   ========      =====

   Proposal II:

   To  ratify  the  appointment  of  Hacker,  Johnson,  Cohen & Grieb  PA as the
   Company's independent auditors for the year ending December 31, 2000:

                                                                     Abstentions
                                                                     and Broker
                            For         Withheld      Against        Nonvotes
                           -------      --------      -------        -----------

                           339,469         -            -              75,887
                           =======      =======       ========         ======

   Proposal III:

   To approve the  Company's  Amended  1998  Employee  Stock  Option and Limited
Rights Plan:

                                                                     Abstentions
                                                                     and Broker
                            For         Withheld      Against        Nonvotes
                          -------      ---------      -------        -----------

                          371,625          -            2,600         41,131
                          =======      =========        =====         ======


                                       12
<PAGE>


                       PSB BANCGROUP, INC. AND SUBSIDIARY

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 exhibit(s) marked by a single asterisk (*)
     were  previously  filed  as a part of the  Holding  Company'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 the Holding  Company'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 exhibits marked by a triple asterisk (***)
     was previously filed as part of the Holding  Company's Form 10-QSB as filed
     with the Securities  and Exchange  Commission on May 5, 2000 and are hereby
     incorporated  by reference.  The exhibit  marked by the quadruple  asterisk
     (****) was  previously  filed as part of the Holding  Company's  Definitive
     Form 14-A, as filed with the  Securities  and Exchange  Commission on March
     16, 2000 and is hereby  incorporated  by  reference.  The  exhibit  numbers
     correspond to the exhibit numbers in the referenced  documents,  except for
     Exhibit  No.  10.7,  which  was  designated  Appendix  A in the  referenced
     Definitive Form 14-A.

        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
     ****10.7         Amended 1998 Employee Stock Option and Limited Rights Plan
           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 June 30, 2000.


                                       13
<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:  August 1, 2000                   By: /s/Alton C. Milton, Sr.
      ------------------------             ---------------------------------
                                           Alton C. Milton, Sr.,
                                           Chairman of the Board




Date:  August 1, 2000                   By: /s/Robert W. Woodard
      ------------------------             ---------------------------------
                                           Robert W. Woodard,
                                           President and Chief Executive
                                           Officer (Principal Financial Officer)






                                       14