--------------------------------------------------------------------------------

                     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, 2002

     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)

                                 (386) 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                            520,700 shares
--------------------------------------                 -------------------------
               (class)                             Outstanding at April 15, 2002


--------------------------------------------------------------------------------


<PAGE>

                       PSB BANCGROUP, INC. AND SUBSIDIARY

                                      INDEX

<TABLE>
PART I. FINANCIAL INFORMATION

<S>                                                                                                          <C>
   Item 1. Financial Statements                                                                              Page
                                                                                                             ----
     Condensed Consolidated Balance Sheets -
       At March 31, 2002 (Unaudited) and At December 31, 2001...................................................2

     Condensed Consolidated Statements of Operations (Unaudited) -
       Three Months ended March 31, 2002 and 2001...............................................................3

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

     Condensed Consolidated Statements of Cash Flows (Unaudited) -
       Three Months Ended March 31, 2002 and 2001...............................................................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...............................................................................9-12

PART II. OTHER INFORMATION

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

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

</TABLE>





























                                       1
<PAGE>


                       PSB BANCGROUP, INC. AND SUBSIDIARY

                          PART I. FINANCIAL INFORMATION

                          Item 1. Financial Statements

                      Condensed Consolidated Balance Sheets



<TABLE>
                                                                                                         At
                                                                                                --------------------
                                                                                              March 31,       December 31,
                                                                                        -----------------   --------------
    Assets                                                                                         2002               2001
                                                                                                   ----               ----
                                                                                                               (Unaudited)

<S>                                                                                       <C>                  <C>
Cash and due from banks                                                                   $     791,002           637,587
Federal funds sold                                                                              235,000           273,000
                                                                                                -------           -------

              Total cash and cash equivalents                                                 1,026,002           910,587

Securities available for sale                                                                 7,083,100         7,232,327
Loans, net of allowance for loan losses of $258,441
    in 2002 and $230,106 in 2001                                                             22,039,322        18,924,380
Premises and equipment, net                                                                   1,421,295         1,433,273
Foreclosed assets                                                                                 6,377           231,203
Accrued interest receivable                                                                     174,525           158,721
Federal Home Loan Bank stock, at cost                                                            60,000            60,000
Deferred income taxes                                                                           510,542           488,829
Other assets                                                                                    105,147            88,817
                                                                                                -------            ------

              Total assets                                                                $  32,426,310        29,528,137
                                                                                          =============        ==========

    Liabilities and Stockholders' Equity

Liabilities:
    Noninterest-bearing demand deposits                                                       2,742,974         2,336,826
    Savings, NOW and money-market deposits                                                    5,433,401         4,570,909
    Time deposits                                                                            18,657,207        17,114,024
                                                                                             ----------        ----------

              Total deposits                                                                 26,833,582        24,021,759

    Advance from Federal Home Loan Bank                                                       1,200,000         1,200,000
    Other liabilities                                                                           600,314           482,293
                                                                                                -------           -------

              Total liabilities                                                              28,633,896        25,704,052
                                                                                             ----------        ----------
Stockholders' equity:
    Preferred stock                                                                                 -                 -
    Common stock                                                                                  5,182             5,179
    Additional paid-in capital                                                                4,621,118         4,618,277
    Accumulated deficit                                                                        (821,029)         (839,907)
    Accumulated other comprehensive income (loss)                                               (12,857)           40,536
                                                                                                -------            ------

              Total stockholders' equity                                                      3,792,414         3,824,085
                                                                                              ---------         ---------

              Total liabilities and stockholders' equity                                  $  32,426,310        29,528,137
                                                                                          =============        ==========
</TABLE>

See Accompanying Notes to Condensed Consolidated Financial Statements.


                                       2
<PAGE>

                       PSB BANCGROUP, INC. AND SUBSIDIARY

           Condensed Consolidated Statements of Operations (Unaudited)


<TABLE>
                                                                                                 Three Months Ended
                                                                                                      March 31,
                                                                                              -------------------------
                                                                                               2002               2001
                                                                                               ----               ----
<S>                                                                                       <C>                     <C>
Interest income:
    Loans                                                                                 $     382,122           271,406
    Securities                                                                                   93,246            62,774
    Other interest-earning assets                                                                 4,933            22,068
                                                                                                  -----            ------

              Total interest income                                                             480,301           356,248
                                                                                                -------           -------

Interest expense:
    Deposits                                                                                    209,985           203,817
    Borrowings                                                                                   12,780             2,362
                                                                                                 ------             -----

              Total interest expense                                                            222,765           206,179
                                                                                                -------           -------

Net interest income                                                                             257,536           150,069

              Provision for loan losses                                                          33,382            65,547
                                                                                                 ------            ------

Net interest income after provision for loan losses                                             224,154            84,522
                                                                                                -------            ------
Noninterest income:
    Service charges on deposit accounts                                                          28,197            13,444
    Other service charges and fees                                                               10,419             5,122
    Gain on sale of foreclosed assets                                                             8,076                -
    Other                                                                                        12,674            12,402
                                                                                                 ------            ------

              Total noninterest income                                                           59,366            30,968
                                                                                                 ------            ------
Noninterest expenses:
    Salaries and employee benefits                                                              111,860           114,662
    Occupancy expense                                                                            35,290            38,729
    Professional fees                                                                            16,881            16,480
    Data processing                                                                              32,084            23,791
    Other                                                                                        58,027            42,383
                                                                                                 ------            ------

              Total noninterest expenses                                                        254,142           236,045
                                                                                                -------           -------

              Earnings (loss) before income tax provision (benefit)                              29,378          (120,555)

Income tax provision (benefit)                                                                   10,500           (46,000)
                                                                                                 ------           -------

              Net earnings (loss)                                                         $      18,878           (74,555)
                                                                                             ==========           =======

Earnings (loss) per share, basic and diluted                                              $         .04              (.14)
                                                                                             ==========              ====

Weighted-average number of shares outstanding, basic and diluted                                518,054           515,926


Dividends per share                                                                       $         -                 -
                                                                                             ==========           =======
</TABLE>


See Accompanying Notes to Condensed Consolidated Financial Statements.



                                       3
<PAGE>

                       PSB BANCGROUP, INC. AND SUBSIDIARY

       Condensed Consolidated Statement of Changes in Stockholders' Equity

                    For the Three Months Ended March 31, 2002



<TABLE>
                                                                                                  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>
Balance at December 31, 2001              517,884      $ 5,179      4,618,277         (839,907)       40,536        3,824,085
                                                                                                                    ---------

Comprehensive income (loss):
         Net earnings (unaudited)             -            -              -             18,878           -             18,878

         Net change in unrealized
             gain on securities
             available for sale,
             net of income tax
             benefit of $32,213
             (unaudited)                      -            -              -                -         (53,393)         (53,393)
                                                                                                                    ---------

Comprehensive income (loss)
         (unaudited)                                                                                                  (34,515)
                                                                                                                    ---------

Proceeds from issuance of common
         stock, exercise of warrants
         (unaudited)                          316            3          2,841              -             -              2,844
                                         --------     --------   ------------      -----------     ---------      -----------

Balance at March 31, 2002
         (unaudited)                      518,200     $  5,182      4,621,118         (821,029)      (12,857)       3,792,414
                                         ========     ========   ============      ===========     =========      ===========

</TABLE>



















See Accompanying Notes to Condensed Consolidated Financial Statements.


                                       4
<PAGE>


                       PSB BANCGROUP, INC. AND SUBSIDIARY

           Condensed Consolidated Statements of Cash Flows (Unaudited)


<TABLE>
                                                                                              Three Months Ended
                                                                                                    March 31,
                                                                                             ----------------------
                                                                                             2002              2001
                                                                                             ----              ----
<S>                                                                                       <C>               <C>
Cash flows from operating activities:
    Net earnings (loss)                                                                   $   18,878        (74,555)
    Adjustments to reconcile net earnings (loss) to net cash provided by
      (used in) operating activities:
         Depreciation                                                                         14,486         13,223
         Provision for loan losses                                                            33,382         65,547
         Deferred income tax provision (benefit)                                              10,500        (46,000)
         Net amortization of loan fees, premiums and discounts                               (18,671)          (910)
         Gain on sale of foreclosed assets                                                    (8,076)             -
         (Increase) decrease in accrued interest receivable                                  (15,804)        25,470
         Increase in other assets                                                            (16,330)       (12,876)
         Increase (decrease) in other liabilities                                            118,021       (106,954)
                                                                                             -------       --------

                  Net cash provided by (used in) operating activities                        136,386       (137,055)
                                                                                             -------       --------
Cash flows from investing activities:
    Proceeds from principal repayments on securities available for sale                       80,447              -
    Net increase in loans                                                                 (2,945,856)    (1,212,542)
    Purchase of Federal Home Loan Bank stock                                                       -        (10,400)
    Purchase of premises and equipment                                                        (2,508)       (22,612)
    Proceeds from sales of foreclosed assets                                                  32,279              -
                                                                                              ------         ------

                  Net cash used in investing activities                                   (2,835,638)    (1,245,554)
                                                                                          ----------     ----------
Cash flows from financing activities:
    Net increase in deposits                                                               2,811,823      4,366,248
    Net decrease in federal funds purchased                                                        -       (245,000)
    Net proceeds from issuance of common stock                                                 2,844          9,000
                                                                                               -----          -----

                  Net cash provided by financing activities                                2,814,667      4,130,248
                                                                                           ---------      ---------

Net increase in cash and cash equivalents                                                    115,415      2,747,639

Cash and cash equivalents at beginning of period                                             910,587        599,621
                                                                                             -------        -------

Cash and cash equivalents at end of period                                                $1,026,002      3,347,260
                                                                                          ==========      =========

Supplemental disclosure of cash flow information: Cash paid during the period
    for:
         Interest                                                                         $  267,066        150,379
                                                                                          ==========        =======

         Income taxes                                                                     $        -              -
                                                                                          ==========        =======
    Noncash transactions:
         Accumulated other comprehensive income (loss), change in
              unrealized gain on securities available for sale, net of tax                $  (53,393)        35,087
                                                                                          ==========         ======

         Transfer of loans to foreclosed assets                                           $    6,377              -
                                                                                          ==========         ======

         Loans made on sales of foreclosed assets                                         $  207,000              -
                                                                                          ==========         ======

</TABLE>


See Accompanying Notes to Condensed Consolidated Financial Statements.



                                       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 March 31, 2002 and the results of operations
         and cash flows for the  three-month  periods  ended  March 31, 2002 and
         2001.  The results of  operations  for the three months ended March 31,
         2002 are not  necessarily  indicative of the results to be expected for
         the year ending December 31, 2002.

    PSB  BancGroup,  Inc.  ("PSB") was  incorporated  on June 30, 1997. PSB owns
         100% of the outstanding common stock of Peoples State Bank (the "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  a  variety  of
         community  banking  services to businesses and individuals  through its
         banking office located 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, 2002 or 2001.  The activity in the  allowance for loan losses
         is as follows:

                                                         Three Months Ended
                                                             March 31,
                                                           -------------
                                                       2002             2001
                                                       ----             ----

         Balance at beginning of period             $ 230,106          139,224
         Provision for loan losses                     33,382           65,547
         Charge-offs                                   (5,047)             -
                                                       ------           ------

         Balance at end of period                   $ 258,441          204,771
                                                    =========          =======


(3) Earnings (Loss) Per Share
    Basicand diluted  earnings  (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   outstanding   stock   options
         (aggregating 10,000) are not dilutive.

(4) Regulatory Matters
    The  Bank  is  required  to  maintain  certain  minimum  regulatory  capital
         requirements.  The  following  is a summary  at March  31,  2002 of the
         regulatory  capital  requirements  and the Bank's  actual  capital on a
         percentage basis:

                                                                    Regulatory
                                                          Actual    Requirement
                                                          ------    -----------

Total capital to risk-weighted assets                     13.80%        8.00%
Tier I capital to risk-weighted assets                    12.74%        4.00%
Tier I capital to average total assets - leverage ratio   10.05%        4.00%




                                       6
<PAGE>

                       PSB BANCGROUP, INC. AND SUBSIDIARY

               Review by Independent Certified Public Accountants


Hacker,   Johnson  &  Smith  PA,  the  Company's  independent  certified  public
accountants,  have made a limited  review of the financial  data as of March 31,
2002, and for the three-month periods ended March 31, 2002 and 2001 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, 2002, and the
related condensed  consolidated  statements of operations and cash flows for the
three-month   periods  ended  March  31,  2002  and  2001,   and  the  condensed
consolidated  statement of changes in  stockholders'  equity for the three-month
period ended March 31, 2002. These financial  statements are the  responsibility
of the Company's management.

     We conducted our reviews 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 auditing  standards  generally  accepted in the United States of
America,  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 reviews,  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 accounting principles generally accepted
in the United States of America.

     We have previously audited, in accordance with auditing standards generally
accepted in the United States of America,  the consolidated  balance sheet as of
December  31,  2001,  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  January 28, 2002 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, 2001, is fairly stated,  in all material  respects,  in
relation to the consolidated balance sheet from which it has been derived.




HACKER, JOHNSON & SMITH PA
Orlando, Florida
April 16, 2002






                                       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, 2002 and December 31, 2001


General

PSB BancGroup,  Inc. ("PSB") was incorporated on June 30, 1997. PSB owns 100% of
the  outstanding  common stock of Peoples State Bank (the "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  a  variety  of  community  banking  services  to  businesses  and
individuals through its banking office located in Lake City, Florida.

Liquidity and Capital Resources

During the three months ended March 31, 2002,  the Company's  primary  source of
funds consisted of a net increase in deposits of $2.8 million.  The Company used
its  capital  resources   principally  to  fund  existing  and  continuing  loan
commitments.  At March 31, 2002, the Company had commitments to originate loans,
including unfunded lines of credit and standby letters of credit,  totaling $3.2
million.  Management believes the Company has adequate resources to fund all its
commitments  and that  substantially  all of its  existing  commitments  will be
funded in 2002. At March 31, 2002, the Company had  approximately  $16.0 million
in time deposits maturing in one year or less. Management also believes that, if
so desired,  it can adjust the rates on time  deposits  to retain  deposits in a
changing interest rate environment.

As a  Florida-chartered  commercial  bank,  the Bank is  required  to maintain a
liquidity  reserve of at least 15% of its total  transaction  accounts and 8% of
its total  nontransaction  accounts less those deposits of certain public funds.
The  liquidity  reserve may  consist of cash on hand,  cash on demand with other
correspondent banks and other investments and short-term  marketable  securities
as  defined,  such as  federal  funds  sold  and  United  States  securities  or
securities  guaranteed  by the United  States.  As of March 31,  2002,  the Bank
exceeded all liquidity requirements to which it was subject.

















                                       9
<PAGE>



                       PSB BANCGROUP, INC. AND SUBSIDIARY



The  following  ratios  and  rates  are  presented  for the  dates  and  periods
indicated:

<TABLE>
                                                                        Three Months                      Three Months
                                                                           Ended          Year Ended          Ended
                                                                          March 31,       December 31,      March 31,
                                                                            2002             2001              2001
                                                                        ------------      ------------    ------------
<S>                                                                        <C>               <C>              <C>
        Average equity as a percentage
           of average assets                                               12.08%            15.78%           19.55%

        Equity to total assets at end of period                            11.70%            12.95%           18.12%

        Return on average assets (1)                                         .24%             (.66%)          (1.47%)

        Return on average equity (1)                                        1.98%            (4.18%)          (7.52%)

        Noninterest expenses to average assets (1)                          3.23%             3.99%            4.65%

        Nonperforming loans and foreclosed assets as
           a percentage of total assets at end of period                     .26%              .85%              - %


<FN>
(1)      Annualized for the three months ended March 31.
</FN>
</TABLE>

































                                       10
<PAGE>

                       PSB BANCGROUP, INC. AND SUBSIDIARY

Results of Operations

The following table sets forth, for the periods indicated, information regarding
(i) the total dollar amount of interest and dividend  income of the Company from
interest-earning  assets and the resultant average yields; (ii) the total dollar
amount of interest  expense on  interest-bearing  liabilities  and the resultant
average costs; (iii) net  interest/dividend  income; (iv) interest-rate  spread;
and (v) net interest margin.

<TABLE>
                                                                        Three Months Ended March 31,
                                               ---------------------------------------------------------------------------
                                                           2002                                         2001
                                               ----------------------------------         --------------------------------
                                                           Interest      Average                     Interest     Average
                                                Average      and         Yield/           Average      and        Yield/
                                                Balance    Dividends      Cost            Balance    Dividends      Cost
                                                -------    ---------      ----            -------    ---------      ----
                                                                        (Dollars in thousands)
<S>                                            <C>             <C>        <C>            <C>              <C>      <C>
Interest-earning assets:
   Loans                                       $ 20,306        382        7.52%          $ 12,072         271      8.98%
   Securities                                     7,116         93        5.23              3,917          63      6.43
   Other interest-earning assets (1)              1,073          5        1.86              1,559          22      5.64
                                                -------      -----                        -------       -----

       Total interest-earning assets             28,495        480        6.74             17,548         356      8.11
                                                               ---                                        ---

Noninterest-earning assets (2)                    3,017                                     2,747
                                                -------                                   -------

       Total assets                            $ 31,512                                  $ 20,295
                                                 ======                                    ======

Interest-bearing liabilities:
   Savings, NOW, money-market
       deposit accounts                           5,379         21        1.56              3,156          23      2.92
   Time deposits                                 18,029        189        4.19             11,216         181      6.46
   Other borrowings                               1,200         13        4.33                127           2      6.30
                                                -------       ----                        -------         ---

       Total interest-bearing liabilities        24,608        223        3.62             14,499         206      5.68
                                                               ---                                        ---

Noninterest-bearing demand deposits               2,640                                     1,518
Noninterest-bearing liabilities                     456                                       311
Stockholders' equity                              3,808                                     3,967
                                                -------                                   -------

       Total liabilities and
           stockholders' equity                $ 31,512                                  $ 20,295
                                                 ======                                    ======

Net interest income                                          $ 257                                     $  150
                                                               ===                                        ===

Interest-rate spread (3)                                                  3.12%                                    2.43%
                                                                          ====                                     ====

Net interest margin (4)                                                   3.61%                                    3.42%
                                                                          ====                                     ====

Ratio of average interest-earning assets to
   average interest-bearing liabilities            1.16                                      1.21
                                                   ====                                      ====


<FN>
(1)  Includes Federal Home Loan Bank stock and federal funds sold.
(2)  Includes nonaccrual loans.
(3)  Interest-rate spread represents the difference between the average yield on
     interest-earning   assets   and   the  average  cost   of  interest-bearing
     liabilities.
(4)  Net interest margin is annualized  net interest  income  divided by average
    interest-earning assets.
</FN>
</TABLE>


                                       11
<PAGE>



                       PSB BANCGROUP, INC. AND SUBSIDIARY

      Comparison of the Three-Month Periods Ended March 31, 2002 and 2001


    General.  Net earnings for the three months ended March 31, 2002 was $18,878
        or $.04 per basic and diluted share compared to a net loss of $74,555 or
        $.14 per basic and diluted share for the comparable  period in 2001. The
        increase in net earnings was  primarily due to increases in net interest
        income  and  noninterest  income,  partially  offset by an  increase  in
        noninterest expense.

    Interest Income.  Interest  income for the three months ended March 31, 2002
        was  $480,301  compared to $356,248 for the three months ended March 31,
        2001.  Interest income earned on loans was $382,122 for the three months
        ended March 31, 2002  compared to $271,406  for the  three-month  period
        ended March 31, 2001. The increase was due to an increase in the average
        loan portfolio balance to $20.3 million for the three months ended March
        31, 2002 from $12.1 million for the comparable period in 2001, partially
        offset by a decrease in the average yield earned from 8.98% to 7.52%.

    Interest Expense. Interest expense for the three months ended March 31, 2002
        was  $222,765  compared to $206,179 for the three months ended March 31,
        2001.  The  increase  was due to an increase  in the average  balance of
        interest-bearing  liabilities  from $14.5  million for the three  months
        ended March 31, 2001 to $24.6  million for the three  months ended March
        31, 2002,  partially offset by a decrease in the average cost from 5.68%
        for the three  months ended March 31, 2001 to 3.62% for the three months
        ended March 31, 2002.

    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  March  31,  2002 and 2001 of
        $33,382 and $65,547,  respectively.  The  allowance  for loan losses was
        $258,441  at March  31,  2002.  Management  believes  the  allowance  is
        adequate at March 31, 2002.

    Noninterest  Income.  Noninterest  income was $59,366  for the three  months
        ended March 31, 2002  compared to $30,968 for the  comparable  period in
        2001.  The  largest  increase  related  to  service  charges  on deposit
        accounts due to the increase in deposit accounts.

    Noninterest Expense.  Noninterest  expense was $254,142 for the three months
        ended March 31, 2002  compared to $236,045  for the three  months  ended
        March 31, 2001.  This  increase  relates to the overall  increase in the
        volume of service.

    Income Taxes.  The income tax provision for the three months ended March 31,
        2002 was $10,500 (an effective rate of 35.7%)  compared to an income tax
        benefit of $46,000 in 2001 (an effective rate of 38.2%).









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<PAGE>

                       PSB BANCGROUP, INC. AND SUBSIDIARY

                           PART II. OTHER INFORMATION


Item 6. Exhibits and Reports on Form 8-KSB

(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,  filed with the  Securities  and  Exchange  Commission  ("SEC") 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  SEC  on May  20,  1998,
        Registration No. 333-44161 and are hereby incorporated by reference. The
        exhibit marked by a triple  asterisk (***) was previously  filed as part
        of PSB's  Form  10-QSB  as filed  with the SEC on May 15,  2000,  and is
        hereby  incorporated  by  reference.  The exhibit  marked by a quadruple
        asterisk  (****)  was  previously  filed  as  part of  PSB's  Definitive
        Schedule  14-A,  as filed  with the SEC on March 16,  2000 and is hereby
        incorporated by reference.  The exhibits marked by a quintuple  asterisk
        (*****) were previously filed as part of PSB's Post Effective  Amendment
        No. 3 to the  Registration  Statement on Form SB-2 as filed with the SEC
        on May 1, 2002 and are 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 Schedule 14-A.

          Exhibit No.              Description of Exhibit

             *3.1     Articles of Incorporation of PSB
             *3.2     Bylaws of PSB
             *4.1     Specimen Common Stock Certificate
            **4.5     Amended and Restated Warrant Plan
         *****4.7     Specimen Warrant Certificate
            *10.1     Employment Agreement by and among PSB, the Bank and 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
        *****10.8     Employee Severance Agreement with Thomas M. Riherd

(b)     Reports on Form 8-KSB.  There were no reports on Form 8-KSB filed during
        the three months ended March 31, 2002.















                                       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:  May 14, 2002            By: /s/Robert W. Woodard
      ------------------           --------------------
                                   Robert W. Woodard, President and Chief
                                   Executive Officer




Date:  May 14, 2002            By: /s/Thomas M. Riherd, II
      ------------------           -----------------------
                                   Thomas M. Riherd, II, Chief Financial Officer



























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