UNITED STATES
                SECURITIES AND EXCHANGE COMMISSION
                      Washington, DC  20549

                            FORM 10-Q

(x)  Quarterly report pursuant to Section 13 or 15(d) of the
     Securities Exchange Act of 1934 for the quarterly period
     ended March 31, 2001 or

( )  Transition report pursuant to Section 13 or 15(d) of the
     Securities Exchange Act of 1934 for the transition period
     from _______________.

                           No. 000-24601
                     ------------------------
                     (Commission File Number)

                          PSB BANCORP, INC.
      ------------------------------------------------------
      (Exact Name of Registrant as Specified in its Charter)

        Pennsylvania                           23-2930740
  ------------------------              ------------------------
  (State of Incorporation)              (IRS Employer ID Number)

11 Penn Center, Suite 2601
1835 Market Street, Philadelphia, PA            19103
----------------------------------------      ----------
(Address of Principal Executive Offices)      (Zip Code)

                          (215) 979-7900
                 -------------------------------
                 (Registrant's Telephone Number)

Securities registered pursuant to Section 12(b) of the Exchange
Act:  none

Securities registered pursuant to Section 12(g) of the Exchange
Act:  Common Stock, no par value per share.

Check whether the issuer (1) has filed all reports required to be
filed by Section 13 or 15(d) of the Exchange Act during the
preceding 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 ( )

Number of shares outstanding as of March 31, 2001

     COMMON STOCK (No Par Value)            4,095,751
     ---------------------------       --------------------
         (Title of Class)              (Outstanding Shares)



                         PSB Bancorp, Inc.
                            FORM 10-Q

               For the Quarter Ended March 31, 2001

                             Contents

                                                             Page

PART I.  FINANCIAL INFORMATION.

Item 1.  Financial Statements

         Consolidated Statements of Financial Condition
         as of March 31, 2001 (Unaudited) and December  31,
         2000                                                  4

         Consolidated Statement of Income (Unaudited)
         for the Three Month Periods Ended March 31,
         2001 and 2000                                         6

         Consolidated Statement of Cash Flows (Unaudited)
         for the Three Month Periods Ended March 31, 2001
         and 2000                                              8

         Consolidated Statement of Comprehensive Income
         (Unaudited) for the Three Month Periods Ended
         March 31, 2001 and 2000                              10

         Notes to Consolidated Financial Statements           11

         Management's Discussion and Analysis of Financial
         Condition and Results of Operations                  15

PART 2.  Other Information                                    26



Part I  Financial Information

Item 1  Financial Statements

                          PSB BANCORP, INC
                  STATEMENTS OF FINANCIAL CONDITION
                           (In thousands)
<TABLE>
<CAPTION>
                                                   March 31,   December  31,
                                                      2001         2000
                                                  -----------  -------------
                                                  (unaudited)   (audited)
<S>                                               <C>          <C>
ASSETS
  Cash and due from banks                         $  2,760     $  2,937
  Interest bearing deposits with banks              12,892       14,969
  Investment securities available-for-
    sale, at fair value                             19,156       24,558
  Mortgage-backed securities available-for-
    sale, at fair value                             50,979       42,228
  Mortgage-backed securities held-to-maturity
    (fair value of $1,007 and $1,032)                  893          910
  Investment securities held-to-maturity
    (fair value of $3,799 and $4,896)                3,000        4,000
  Other investments                                  1,560        1,649
  Loans, less allowance for loan losses of
    $1,349 and $1,349, respectively                152,209      145,856
  Loans held for sale                                9,504        9,080
  Property acquired through loan foreclosure
    actions, net                                     1,512        1,046
  Premises and equipment, net                        1,784        1,820
  Accrued interest receivable                        2,205        2,165
  Prepaid corporate taxes                            1,198          973
  Deferred tax asset                                 1,115        1,379
  Other assets                                       1,323        1,249
                                                  --------     --------
     TOTAL ASSETS                                 $262,090     $254,819
                                                  ========     ========

LIABILITIES
  Deposits
    Non-interest bearing                          $ 13,034     $ 15,287
    Interest bearing                               197,235      188,888
                                                  --------     --------
                                                   210,269      204,175

  Borrowed funds                                         0            0
  Securities purchased under agreements to resell   13,328       13,402
  Income taxes payable                                   0            0
  Accrued interest payable                             447          442
  Other liabilities                                    977          818
                                                  --------     --------
     Total liabilities                             225,021      218,837
                                                  --------     --------

SHAREHOLDERS' EQUITY
  Common stock-authorized, 17,999,500 shares
    no par value, issued and outstanding,
    4,095,751                                            0            0
  Additional paid-in capital                        40,694       40,710
  Employee stock ownership plan                     (1,074)      (1,111)
  Retained earnings                                   (417)        (971)
  Accumulated other comprehensive income, net          145         (367)
  Treasury stock 446,756 shares, at cost            (2,279)      (2,279)
                                                  --------     --------
     Total shareholders' equity                     37,069       35,982
                                                  --------     --------
     TOTAL LIABILITIES AND SHAREHOLDERS' EQUITY   $262,090     $254,819
                                                  ========     ========
</TABLE>

The accompanying notes are an integral part of these financial
statements.



                          PSB BANCORP, INC
                 CONSOLIDATED STATEMENTS OF INCOME
               (In thousands, except per share data)

                                             Three months ended
                                                 March 31,
                                             2001       2000
                                          ----------- -----------
                                               (unaudited)
INTEREST INCOME
  Loans, including fees                      $3,799     $4,134
  Investment securities                       1,081      1,259
  Deposits with banks                           209         27
                                             ------     ------
     Total interest income                    5,089      5,420

INTEREST EXPENSE
  Interest on deposits                        2,574      2,011
  Interest on borrowings                        190        570
  Interest - other                                0          0
                                             ------     ------
     Total interest expense                   2,764      2,581

        Net interest income                   2,325      2,839

PROVISION FOR LOAN LOSSES                         0        100
                                             ------     ------
       Net interest income after provision
         for loan losses                      2,325      2,739
                                             ------     ------

NON-INTEREST INCOME                             271        157
                                             ------     ------
NON-INTEREST EXPENSES
  Salaries and employee benefits                979      1,076
  Occupancy and equipment                       314        271
  Other operating                               586        560
                                             ------     ------
     Total non-interest expenses              1,879      1,907
                                             ------     ------
LOSS ON INVESTMENT                               89          0
                                             ------     ------

     Income before income taxes                 628        989

INCOME TAXES                                     75        235
                                             ------     ------
NET INCOME                                   $  553     $  754
                                             ======     ======

  Net income per common share
    Basic                                    $  .14     $  .17
    Diluted                                     .12        .15

The accompanying notes are an integral part of these financial
statements.



                PSB BANCORP, INC. AND SUBSIDIARY
              CONSOLIDATED STATEMENTS OF CASH FLOWS
                          (IN THOUSANDS)
         Increase (Decrease) in Cash and Cash Equivalents

<TABLE>
<CAPTION>

                                                                          Three Months Ended
                                                                               March 31,
                                                                         --------------------
                                                                           2001        2000
                                                                         --------    --------
                                                                              (Unaudited)
<S>                                                                      <C>         <C>
CASH FLOWS BY OPERATING ACTIVITIES:
  Net Income                                                                 $553        $754
                                                                         --------    --------
  Adjustments to reconcile net income to net cash
    provided by (used in) operating activities:
      Amortization of premium/discount on mortgage-backed
        securities                                                            170         10
      Depreciation and amortization                                           102         76
      Write-down and expenses of real estate owned                              3         53
      Gain (loss) on sale of real estate owned                                  0          0
      Gain (loss) on sale of loans                                              0         19
      Loss on investment                                                       89          0
      Provision for losses on loans                                             0        100
      Deferred taxes                                                          264        289
      Compensation expense-Employee Stock Ownership Plan                       21         40
      Change in assets and liabilities:
        (Increase)decrease in loans held for sale                            (424)       424
        (Increase) decrease in accrued interest receivable                    (40)       116
        Increase in prepaid expenses and other assets                         (74)       (71)
        (Increase) decrease in prepaid corporate taxes                       (225)        50
        Increase in corporate taxes payable                                     0        225
        Increase (decrease) in accrued interest payable                         5        (82)
        Increase in accrued expenses                                          159        291
                                                                          -------    -------
     Total Adjustments                                                         50      1,540
                                                                          -------    -------
     Net cash provided for operating activities                               603      2,294
                                                                          -------    -------

CASH FLOWS FROM INVESTING ACTIVITIES:
  Purchase of mortgage-backed securities, available for sale               (9,554)         0
  Purchase of investment securities, available-for-sale                    (1,408)      (500)
  Mortgage-backed security maturities and principal repayments              8,822        878
  Acquisition costs of and proceeds from the sale of Federal
    Home Loan Bank stock                                                        0       (150)
  Proceeds from sale of real estate owned net of improvements                   0         71
  Property acquired through loan foreclosure action                          (466)      (314)
  Capital expenditures                                                        (66)      (285)
  Increase in total loans receivable, net                                  (6,353)    11,798
                                                                          -------    -------
     Net cash provided by (used in) in investing activities                (9,025)    11,498
                                                                          -------    -------

CASH FLOWS FROM FINANCING ACTIVITIES:
  Increase (decrease) in deposits, net                                      6,632     (5,077)
  Change in advances for borrowers' taxes and
   insurance                                                                 (538)      (406)
  Repayment of borrowed funds                                                   0    (14,000)
  Change in securities purchased under agreements to resell                    74        444
                                                                          -------    -------
     Net cash provided by (used in) financing activities                    6,168    (19,039)
                                                                           -------    -------

NET DECREASE IN CASH AND CASH EQUIVALENTS                                  (2,254)    (5,247)

  Cash and Cash equivalents, beginning of period                           17,906     17,275
                                                                         --------   --------
CASH AND CASH EQUIVALENTS, END OF PERIOD                                   15,652     12,028
                                                                         ========   ========

SUPPLEMENTAL DISCLOSURES OF CASH FLOW INFORMATION:

  Cash paid during the period for:

    Interest on deposits and borrowings                                  $  2,759   $  2,086
                                                                         ========   ========

    Income taxes                                                         $     75   $     73
                                                                         ========   ========
NON CASH ACTIVITIES

  Loans transferred to real estate owned                                 $    466   $    159
                                                                         ========   ========
</TABLE>



                PSB BANCORP, INC. AND SUBSIDIARY
          CONSOLIDATED STATEMENT OF COMPREHENSIVE INCOME
                        (IN THOUSANDS)

<TABLE>
<CAPTION>

                                                                          Three Months Ended
                                                                               March 31,
                                                                         --------------------
                                                                           2001        2000
                                                                         --------    --------
                                                                             (Unaudited)
<S>                                                                      <C>         <C>
Net income                                                                   $553        $754

Other comprehensive income, net of tax:

  Accumulated comprehensive gain (loss), investments available for sale       512        (124)
                                                                         --------    --------

Other comprehensive income                                                    512        (124)
                                                                         --------    --------

Comprehensive Income                                                       $1,065        $630
                                                                         ========    ========
</TABLE>



                          PSB BANCORP, INC.
                    NOTE TO FINANCIAL STATEMENTS
                          MARCH 31, 2001
                            (UNAUDITED)

Basis of Presentation:

     The consolidated financial statements include the accounts
of PSB Bancorp, Inc. ("PSB") and its wholly-owned subsidiary,
First Penn Bank (the "Bank").  Significant inter-company accounts
and transactions have been eliminated. The accompanying unaudited
consolidated financial statements have been prepared in
accordance with generally accepted accounting principles for
interim financial information. Accordingly, they do not include
all of the information and footnotes required by generally
accepted accounting principles for complete financial statements.
In the opinion of management, all adjustments considered
necessary for fair presentation have been included. Operating
results for the three months ended March 31, 2001 are not
necessarily indicative of the results that may be expected for
the full fiscal year. For further information, refer to the
financial statements and footnotes thereto included in PSB's
Annual Report on form 10-K for the year ended December 31, 2000.

Note 1.  Basic earnings per share ("EPS") is computed based on
the weighted average number of shares of common stock outstanding
during the periods presented.  Stock options are considered
common stock equivalents and are included in the computation of
dilutive EPS using the treasury stock method, unless anti-
dilutive.

     The following table reconciles the numerators and
denominators of the basic and diluted EPS computations for the
Bank's net income for the three months ended March 31, 2001:

<TABLE>
<CAPTION>
-----------------------------------------------------------------------------
                                            Income       Shares     Per-Share
                                          (Numerator) (Denominator)   Amount
-----------------------------------------------------------------------------
<S>                                         <C>         <C>          <C>
Basic EPS:
Income available to common shareholders     $553,500    3,966,429    $.14
                                                                     ====

Effect of Dilutive Securities:
Options                                                   524,806
                                                        ---------

Diluted EPS:
Income available to common shareholders     $553,500    4,491,235    $.12
                                                                     ====
</TABLE>

     The following table reconciles the numerators and
denominators of the basic and diluted EPS computations for the
Bank's net income for the three months ended March 31, 2000:

<TABLE>
<CAPTION>
-----------------------------------------------------------------------------
                                            Income       Shares     Per-Share
                                          (Numerator) (Denominator)   Amount
-----------------------------------------------------------------------------
<S>                                         <C>         <C>          <C>
Basic EPS:
Income available to common shareholders     $754,000    4,370,642    $.17
                                                                     ====

Effect of Dilutive Securities:
Options                                                   553,288
                                                        ---------

Diluted EPS:
Income available to common shareholders     $754,000    4,923,930    $.15
                                                                     ====
</TABLE>

Note 2.  Summary of Significant Accounting Policies
     In the opinion of management, the accompanying unaudited
financial statements contain all adjustments, consisting only of
normal recurring adjustments, necessary to present fairly the
financial position of PSB as of March 31, 2001 and December 31,
2000 and the results of their operations for the three months
ended March 31, 2001 and 2000.  The accounting policies and
reporting practices of PSB are in accordance with generally
accepted accounting principals and have been followed on a
consistent basis.

     The accompanying financial statements have been prepared in
accordance with instructions for Form 10-Q and accordingly do not
include all of the detailed schedules, information and notes
necessary for a fair presentation of financial condition, results
of operations and cash flows in accordance with generally
accepted accounting principals.

     The results of operations for the three months ended
March 31, 2001 and 2000 are not necessarily indicative of the
results to be expected for the full year.

Note 3.  Stock Option Plan

     PSB accounts for its stock option plan in accordance with
the provisions of Accounting Principles Board ("APB") Opinion
No. 25, Accounting for Stock Issued To Employees, and related
interpretations.  As such, compensation expense would be reported
on the date of grant only if the current market price of the
underlying stock exceeds the exercise price.  PSB has adopted
SFAS No. 123, Accounting for Stock-Based Compensation, which
permits entities to recognize as expense over the vesting period
the fair value of all stock-based awards on the date of grant.
Alternatively, SFAS No. 123 also allows entities to continue to
apply the provisions of APB Opinion No. 25 and provide pro forma
net income and pro forma earnings per share disclosures for
employee stock option grants made in 1995 and future years as if
the fair-value-based method defined in SFAS No. 123 had been
applied.  The Bank has elected to continue to apply the
provisions of APB Opinion No. 25 and provide the pro forma
disclosure provisions of SFAS No. 123.


Note 4.  Effect of New Accounting Standards

     Statement of Financial Accounting Standards (SFAS) No. 130,
"Reporting Comprehensive Income", is effective for PSB for the
period beginning June 30, 2000 and establishes reporting and
display of comprehensive income in the financial statements.
Comprehensive income represents net earnings and certain amounts
reported directly in stockholder's equity, such as the net
unrealized gain or loss on available-for-sale securities.  PSB
has adopted SFAS No. 130.

     SFAS No. 131, "Disclosure About Segments of an Enterprise
and Related Information", is effective for the Bank for the
period beginning June 30, 2000 and establishes disclosure
requirements for segment operations.  PSB has adopted SFAS
No. 131.

     SFAS No. 132, "Employers' Disclosures About Pensions and
Other Postretirement Benefits", is effective for the Bank for the
period beginning June 30, 2000 and revises the disclosure
requirements for pension and postretirement benefit plans.

     SFAS No. 133, "Accounting for Derivative Instruments and
Hedging Activities," is effective for PSB beginning June 30,
2000. The Bank has no activity subject to SFAS 133.  PSB plans to
adopt SFAS No. 133 when required.

     SFAS No. 140, Accounting for Transfers and Servicing of
Financial Assets and Extinguishments of Liabilities replaced SFAS
No. 125 effective for all transactions after March 31, 2001.  The
Bank has no activity subject to SFAS 140.  the Bank plans to
adopt SFAS No. 140 when required.

Note 5.  Securities
     The Bank divides its securities portfolio into two segments:
(a) held-to-maturity and (b) available for sale.  Held-to-
maturity securities are accounted for at cost, adjusted for
amortization of premiums and accretion of discounts, using the
level yield method, based on the Bank's intent and ability to
hold the securities until maturity.  Marketable securities
included in the available-for-sale category are accounted for at
fair value, with unrealized gains or losses, net of taxes, being
reflected as adjustments to equity.  The fair value of marketable
securities available-for-sale is determined from publicly quoted
market prices.  Securities available-for-sale, which are not
readily marketable, which include the Federal Reserve Bank stock,
are carried at cost which approximates liquidation value.
At the time of purchase, the Bank makes a determination of
whether or not it will hold the securities to maturity, based
upon an evaluation of the probability of future events.
Securities, which the Bank believes may be involved in interest
rate risk, liquidity, or other asset/liability management
decisions, which might reasonably result in such securities not
being held-to- maturity, are classified as available-for-sale.
If securities are sold, a gain or loss is determined by a
specific identification method and is reflected in the operating
results in the period the trade occurs.  Gains and losses
realized on sales of investment securities represent differences
between the net proceeds and carrying values determined by the
specific identification method.

Note 6.  Income Taxes

     PSB accounts for income taxes under the asset and liability
method.  Deferred income taxes are recognized for the future tax
consequences attributable to differences between the financial
statement carrying amounts of existing assets and liabilities and
their respective tax bases.  Deferred tax assets and liabilities
are measured using enacted tax rates expected to apply to taxable
income in the years in which those temporary differences are
expected to be resolved or settled.  The effect on deferred taxes
of a change in tax rates is recognizable in income in the period
that includes the enactment date.



Item 2  MANAGEMENT'S DISCUSSION AND ANALYSIS OF THE FINANCIAL
        CONDITION AND RESULTS OF OPERATIONS

RESULTS OF OPERATIONS

General

     The Bank's results of operations depend primarily on its net
interest income, which is the difference between interest income
on interest-earning assets, and interest expense on its interest-
bearing liabilities.  Its interest-earning assets consist
primarily of loans receivable and investment securities, while
its interest-bearing liabilities consist primarily of deposits
and borrowings.  The Bank's net income is also affected by its
provision for loan losses and its level of non-interest income as
well as its non-interest expense, such as salary and employee
benefits, occupancy costs and charges relating to non-performing
and other classified assets.

Net Income

     The Bank's net income totaled $553,500 and $754,000 for the
three months ended March 31, 2001 and 2000, respectively. PSB's
basic and diluted earnings per share for the three months ended
March 31, 2001 were $0.14 and $.0.12 respectively, compared to
$0.17 and $0.15 per share for the three months ended March 31,
2000, respectively. The decrease in earnings per share reflects
the decreased earnings of PSB primarily related to an eighty-nine
basis point decline in the net interest margin.

Net Interest Income and Average Balances

     Net interest income is a key component of the Bank's
profitability structure and is managed in coordination with the
Bank's interest rate sensitivity position.  Net interest income
for the first quarter of 2001 was $2.3 million compared to
$2.7 million, or 14.81% less than the first quarter of 2000. The
decrease generally reflected payoffs of higher yielding mortgage-
backed securities called in January of 2001 and a decrease in the
loan portfolio as well as a 42 basis point increase in the cost
of interest-bearing liabilities. The mortgage-backed securities
called in January 2001 were replaced at the end of March 2001
along with the purchase of additional mortgage-backed securities
that carried a lower yield.

     Overall, average total interest-earning assets provided a
yield of 8.03% for the three months ended March 31, 2001,
compared to 8.50% for the same period in 2000.  The average yield
for the three months ended March 31, 2001 decreased due to
decreases in the average yields on our interest-earning deposits,
investment securities and mortgage-backed securities due to an
overall decline in interest rates.  Average total loans of $159.6
million for the three months ended March 31, 2001, provided a
yield of 9.52% for the period, compared to average total loans of
$174.4 million for the three months ended March 31, 2000
providing a yield of 9.53% for the period.  The overall decrease
in average total loans was due to a decrease in the volume of our
student loan program.  Average total interest-bearing liabilities
decreased $4.4 million or 2.25% to $196.5 million at a rate of
5.63% for the three months ended March 31, 2001, from $200.9
million at a rate of 5.14% for the same period in 2000.  The
decrease in total interest-bearing liabilities was a combination
of a decrease in our borrowings and deposits in our money market
and savings deposit accounts offset by an increase in our
certificate of deposit accounts.  A change in deposit mix
resulted in a higher overall rate paid on total interest-bearing
liabilities due to the increase in deposits in higher rate-
bearing certificate of deposit accounts.



Average Balance Sheets and Rate/Yield Analysis

     Net interest income is effected by changes in both average
interest rates and average volumes of interest-earning assets and
interest-bearing liabilities.  The following tables present the
average daily balances of assets, liabilities and shareholders'
equity and the respective interest earned or paid on interest-
earning assets and interest-bearing liabilities, as well as
average rates for the period indicated (in thousands):

<TABLE>
<CAPTION>

                                                                Three Months Ended March 31,
                                                --------------------------------------------------------
                                                             2001                        2000
                                                --------- ---------  ------  --------- ---------  ------
                                                 Average  Interest/  Yield/   Average  Interest/  Yield/
                                                 Balance   Expense    Rate    Balance   Expense    Rate
                                                --------- ---------  ------  --------- ---------  ------
<S>                                             <C>       <C>        <C>     <C>       <C>        <C>
ASSETS
Interest-earning assets:
  Interest-earning deposits                     $ 22,279  $   209     3.75%  $   4,696 $    48     4.09%
  Investment securities                           26,386      385     5.84%      8,030     135     6.72%
  Mortgage-backed securities                      45,184      696     6.16%     67,954   1,084     6.38%
  Net loans                                      159,607    3,799     9.52%    174,394   4,153     9.53%
                                                --------  -------    -----   --------- -------    -----
    Total interest-earning assets                253,456  $ 5,089     8.03%    255,074 $ 5,420     8.50%
                                                ========  =======    =====   ========= =======    =====
Noninterest-earning assets                         5,810                        11,235
    Total assets                                $259,266                      $266,309
                                                ========                      ========

LIABILITIES
Interest-bearing liabilities:
  Now checking accounts                         $ 15,622  $    53     1.36%   $ 12,323  $    71    2.30%
  Money market accounts                           10,921      101     3.70%     13,768      122    3.54%
  Savings deposits                                28,868      205     2.84%     29,589      210    2.84%
  Certificates                                   127,591    2,215     6.94%    103,706    1,608    6.20%
                                                --------  -------    -----    --------  -------   -----
     Total deposits                              183,002    2,574     5.63%    159,386    2,011    5.05%
  Borrowed money                                  13,458      190     5.65%     41,558      570    5.49%
                                                --------  -------    -----    --------  -------   -----
     Total interest-bearing liabilities          196,460    2,764     5.63%    200,944    2,581    5.14%
Non-interest-bearing liabilities                  26,128                        29,442
                                                --------                      --------
     Total liabilities                           222,588                       230,386
Retained earnings or shareholders' equity         36,678                        35,923
     Total liabilities and retained earnings
       or shareholders' equity                  $259,266                      $266,309
                                                ========                      ========
Net interest income                                       $ 2,325                       $ 2,839
                                                          =======                       =======
Interest rate spread                                                  2.40%                        3.36%
Net yield on interest-earning assets                                  3.67%                        4.45%
Ratio of interest-earning assets to
  interest-bearing liabilities                                        1.29x                        1.27x
</TABLE>



Provision for Loan Losses

     The provision for loan losses represents the charge against
earnings that is required to fund the allowance for loan losses.
The Bank determines the level of the allowance for loan losses
through a regular review of the loan portfolio.  Management's
evaluation of the adequacy of the allowance for loan losses is
based upon an examination of the portfolio as well as such
factors as declining trends, the volume of loan concentrations,
adverse situations that may affect the borrowers ability to pay,
prior loss experience within the portfolio, current economic
conditions and the results of the most recent regulatory
examinations.  The adequacy of the loan loss allowance is
reviewed monthly by the Board of Directors.  See "Asset Quality -
Allowance for Loan Losses." The Bank had no provision for loan
losses during the three months ended March 31, 2001 compared to
$100,000 for the same period in 2000. Additionally, the Bank did
not have any charge-offs or recovery against the allowance for
loan losses during such periods.

Non-interest Income

     Non-interest income consists of gain on sale of loans, loan
fees, service charges, rental income and other income.  Non-
interest income increased  by $114,000, or 72.61%, to $271,000
for the three months ended March 31, 2001, from $157,000 for the
three months ended March 31, 2000. The principal reasons for the
increase in non-interest income was a $57,000 increase in gain on
sale of loans to $76,000 in 2001 from $19,000 in 2000, due to an
increase in the number of loans sold by Transnational Mortgage
Corp. in 2001, and a $76,000 increase in service fees and return
check fees to $164,000 in 2001 from $88,000 in 2000. This
increase was partially offset by a decrease in rental and other
income

Non-interest Expense

     Non-interest expense principally consists of employees'
compensation and benefits, deposit insurance premiums and
premises and occupancy costs.  Non-interest expense decreased by
$28,000, or 1.46%, for the three months ended March 31, 2001,
compared to the three months ended March 31, 2000.  The principal
reasons for the decrease was a decrease in salary and employee
benefits.

Provision for Income Taxes

     Income tax provisions for the three months ended March 31,
2001 and 2000 of $75,000 and $235,000, respectively, generally
reflect the Bank's pre-tax income in accordance with the
principles of SFAS No. 109, "Accounting for Income Taxes."

Liquidity and Interest Rate Sensitivity

     The maintenance of adequate liquidity and the mitigating of
interest rate risk is integral to the management of the Bank's
balance sheet. Liquidity represents the ability to meet potential
cash outflows resulting from deposit customers who need to
withdraw funds or borrowers who need available credit.  Interest
rate sensitivity focuses on the impact of fluctuating interest
rates and the re-pricing characteristics of rate sensitive assets
and liabilities on net interest income.

     The Bank's asset/liability management committee monitors the
level of short-term assets and liabilities to maintain an
appropriate balance between liquidity, risk and return.
Liquidity is derived from various sources which includes
increases in core deposits, sales of certificates of deposits,
the amortization and prepayment of loans and mortgage-backed
securities, maturities of investment securities and other short-
term investments. The liquidity position of the Bank is also
strengthened by a $109 million credit facility with the Federal
Home Loan Bank (FHLB).  Advances are secured by all FHLB stock
and qualifying mortgage loans. The Bank had no outstanding
borrowings as of March 31, 2001.

     Maximizing cash flow over time is crucial to the maintenance
of adequate liquidity.  The Bank's total cash flow is a product
of its operating activities, investing activities and financing
activities.  During the three months ended March 31,2001, net
cash provided by operating activities was $603,000, compared to
net cash provided by operating activities of $2.3 million for the
same period of 2000.  During the three months ended March 31,
2001, net cash used in investing activities was $9.0 million,
compared to net cash provided by investing activities of $11.5
million for the same period of 2000. Financing activities
provided net cash of $6.2 million during the three months ended
March 31, 2001, compared to $19.0 million in net cash used in
financing activities for the same period of 2000.  The net result
of these items was a $2.3 million decrease in cash and cash
equivalents for the three months ended March 31, 2001, compared
to a $5.2 million decrease in cash and cash equivalents for the
same period of 2000.

     Interest rate sensitivity is closely related to liquidity
since each is directly affected by the maturity of assets and
liabilities.  Rate sensitivity also deals with exposure to
fluctuations in interest rates and its effect on net interest
income.  The primary function of the Bank's interest rate
sensitivity management is to reduce exposure to interest rate
risk through an appropriate balance between interest-earning
assets and interest-bearing liabilities.  The goal is to minimize
fluctuations in the net interest margin of the Bank due to
general changes in interest rates.

     The blending of fixed and floating rate loans and
investments to match the re-pricing and maturity characteristics
of the various funding sources is a continuous process in an
attempt to minimize any fluctuations in net interest income. The
composition of the balance sheet is designed to minimize any
significant fluctuation in net interest income and to maximize
liquidity.  Management believes that the accessibility to FHLB
borrowings will provide the flexibility to assist in keeping
fluctuations in net interest income under control and to maintain
an adequate liquidity position.

Capital Adequacy

     The Bank is required to maintain minimum ratios of Tier I
and total capital to total "risk weighted" assets and a minimum
Tier I leverage ratio, as defined by the banking regulators. The
Bank's liquidity is quantified through the use of a standard
liquidity ratio of liquid assets (cash and cash equivalents,
investment securities available-for-sale, mortgage-backed
securities available-for-sale and Federal Home Loan Bank stock)
to short-term borrowings plus deposits. At March 31, 2001, the
Bank was required to have a minimum Tier I and total capital
ratios of 4.0% and 8.0%, respectively, and a minimum Tier I
leverage ratio of 4.0%. The Bank's actual Tier I and total
capital ratios at March 31, 2001, were 22.4% and 23.2%,
respectively, and the Bank's Tier I leverage ratio was 13.59%.
These ratios exceed the requirements for classification as a
"well capitalized" institution, the industry's highest capital
category.

    On March 31, 2001, the Bank was in compliance with regulatory
capital requirements as follows:

<TABLE>
<CAPTION>
                                    Well Capitalized    March 31,    Dec. 31,
                                         Ratios           2001         2000
                                    ----------------    ---------    --------
<S>                                 <C>                 <C>          <C>
Tier I Capital                                          $ 34,779     $ 34,183
Tier II Capital                                            1,349        1,349
                                                        --------     --------
Total Qualifying Capital                                $ 36,128     $ 35,532

Risk Adjusted Total Assets                               155,550     $146,793

Tier I Risk Based Capital Ratio          6.00%             22.36%       23.29%
Total Risk Based Capital Ratio          10.00%             23.23%       24.21%
Leverage Ratio                           5.00%             13.59%       13.21%
</TABLE>



FINANCIAL CONDITION

General

     The Bank's total assets increased $7.3 million or 2.86% from
$254.8 million  at December  31, 2000 to $262.1 million at
March 31, 2001.  The increase in assets was primarily the result
of a increase in net loans and loans held for sale.

     At March 31, 2001 the Bank's net loan portfolio totaled
$161.7 million compared to $154.9 million at December 31, 2000.
At March 31, 2001, one-to-four family residential loans totaled
$62.7 million compared to $63.5 million at December 31, 2000.  At
March 31, 2001, construction loans totaled $24.1 million compared
to $23.3 million at December 31, 2000.

     The following table summarizes the loan portfolio of the
Bank by loan category and amount at March 31, 2001 compared to
December  31, 2000,  including data regarding the portion of the
Bank's loans that bear fixed and adjustable interest rates,
respectively.  From time to time, TNMC has originated and sold
mortgage loans to third party investors within the Bank's
financial reporting periods.  Similarly, student loans are
frequently originated and sold within the Bank's financial
reporting periods.  Such mortgage and student loans are not
reflected in the financial tables and financial statements
pertaining to a particular period to the extent that such loans
were sold prior to any period end. The loan categories correspond
to the Bank's general classifications (in thousands, except for
percentage):

<TABLE>
<CAPTION>

                                       At March 31,         At December 31,
                                  --------------------   ---------------------
                                          2001                   2000
                                  --------------------   ---------------------
                                    Amount    Percent      Amount     Percent    Variance   % Change
                                  ---------- ---------   ----------  ---------  ---------- ----------
<S>                               <C>        <C>         <C>         <C>        <C>        <C>
Real Estate Loans:
  One-to-four family(1)            $ 62,734     38.41%    $ 63,557     40.60%     ($823)     -1.29%
  Construction loans                 24,180     14.81%      23,328     14.90%       852       3.65%
  Five or more family residence       2,461      1.51%       2,552      1.63%       (91)     -3.57%
  Nonresidential                     34,522     21.14%      28,805     18.40%     5,717      19.85%

Commercial loans                     14,982      9.17%      13,902      8.88%     1,080       7.77%
SBA loans                            12,477      7.64%      11,029      7.04%     1,448      13.13%
Student loans                         5,832      3.57%      11,288      7.21%    (5,456)    -48.33%
Consumer loans                        6,135      3.76%       2,099      1.34%     4,036     192.28%
                                   --------    ------      -------    ------    -------     ------
     Total loans                   $163,323    100.00%    $156,560    100.00%     6,763       4.32%
                                   ========    ======     ========    ======    =======     ======

Less:
  Unearned fees and discounts      $    261               $    275
  Undisbursed loan proceeds               -                      -
  Allowance for loan losses           1,349                  1,349
                                   --------               --------
  Net Loans                        $161,713               $154,936
                                   ========               ========

Total loans with:
  Fixed rates                      $112,229     68.72%    $107,700     68.79%
  Adjustable rates                   51,094     31.28%      48,860     31.21%
                                   --------    ------     --------    ------
     Total loans                   $163,323    100.00%    $156,560    100.00%
</TABLE>

(1) Includes loans held for sale

     Total investment securities (including mortgage-backed
securities) increased $2.3 million, or 3.13%, to $75.6 million at
March 31, 2001, from $73.3 million at December 31, 2000.

     Cash and cash equivalents, including interest-earning
deposits with banks, decreased $2.3 million or 12.84% to $15.6
million at March 31, 2001, from $17.9 million at December 31,
2000. This decrease was the result of the redemption of
certificate of deposits and disbursements of loan proceeds.

     Total liabilities increased $6.2 million to $225.0 million
at March 31, 2001 from $218.8 million at December  31, 2000. This
increase reflected an increase in the Bank's primary source of
funds and other liabilities.

Asset Quality

Delinquent Loans

     When a borrower fails to make a required payment on a loan,
the Bank attempts to cure the deficiency by contacting the
borrower and seeking payment.  Contacts are generally made on the
15th day after a payment is due.  In most cases, deficiencies are
cured promptly.  If a delinquency extends beyond 30 days, the
loan and payment history is carefully reviewed, additional
notices are sent to the borrower and efforts are made to collect
the loan.  While the Bank generally prefers to work with
borrowers to resolve such problems, when the account becomes 90
days delinquent, the Bank does institute foreclosure or other
proceedings, as necessary, to minimize any potential loss.

Non-Performing Assets

    The Bank's level of non-performing assets increased $954,000,
or 23.03% to $5.1 million, during the three months ended
March 31, 2001, from $4.1 million at December  31, 2000. As a
matter of policy, the accrual of loan interest is discontinued if
management believes that, after considering economic and business
conditions and collection efforts, the borrower's financial
condition is such that collection of interest becomes doubtful.
This is normally done when a loan reaches 90 days delinquent.  At
this time, all accrued but unpaid interest is reversed.  There
are occasional exceptions if the loans are in the process of
collection and the loan is fully secured.

     The following table sets forth non-performing assets as of
March 31, 2001 and December  31, 2000 (dollars in thousands):

<TABLE>
<CAPTION>


                                                              At March 31,        At December 31,
                                                                 2001                  2000
                                                              ------------        ---------------
<S>                                                           <C>                 <C>
Loans past due 90 days or more as to interest or
  principal and accruing interest                             $     -             $     -
Nonaccrual loans                                                3,583               3,095
Loans restructured to provided a reduction or deferral
  of interest or principal                                          -                   -
                                                              -------             -------
Total nonperforming loans                                       3,583               3,095
Real estate owned (REO)                                         1,512               1,046
                                                              -------             -------
     Total nonperforming assets                               $ 5,095             $ 4,141
                                                              =======             =======

Nonperforming loans to total loans                               2.20%               1.98%
Nonperforming assets to total assets                             1.94%               1.63%
Allowance for loan losses to total loans                         0.63%               0.86%
Allowance for loan losses to nonperforming loans                37.65%              43.59%
Allowance for loan losses to nonperforming assets               26.48%              32.58%
Net charge-offs as a percentage of total loans                      -                   -

</TABLE>

Allowance for loan losses

     The provision for loan losses is an amount charged against
earnings to fund the allowance for possible future losses on
existing loans.  In order to determine the amount of the
provision for loan losses, the Bank conducts a monthly review of
the loan portfolio to evaluate overall credit quality.  In
establishing its allowance for loan losses, management considers
the size and risk exposure for each segment of the loan
portfolio, past loss experience, current indicators such as the
present levels and trends of delinquency rates and collateral
values, and the potential losses for future periods.  The
provisions are based on management's review of the economy,
interest rates, general market conditions, and in certain
instances, an estimate of net realizable value (or fair value) of
the collateral, as applicable, considering the current and
anticipated future operating environment.  These estimates are
particularly susceptible to changes that may result in a material
adjustment to the allowance for loan losses.  As adjustments
become identified, they are reported in earnings for the period
in which they become known.  Management believes that it makes an
informed judgment based upon available information.  The adequacy
of the allowance is reviewed monthly by the Board of Directors.

     It is the objective of the Bank's evaluation process to
establish the following components of the allowance for loan
losses:  a specific allocation for certain identified loans, a
general allocation for pools of loans based on risk rating, and a
general allocation for inherent loan portfolio losses.
Management performs current evaluations of its criticized and
classified loan portfolios and assigns specific reserves that
reflects the current risk to the Bank.  As a general rule,
special mention assets will have a minimum reserve of 5%,
substandard assets will have a minimum reserve of 10%, and
doubtful assets will have a minimum reserve of 50%.  A general
reserve allocation is applied for pools of loans based on risk
rating for all loans not specifically reserved for as described
previously.

     Based upon management's analysis, the Bank recorded
provisions for loan losses during the three month periods ended
March 31, 2001 and 2000 of $0 and $100,000, respectively. The
Bank recorded no charge-offs or recoveries for the periods ended
March 31, 2001 and 2000.

Quantitative and Qualitative Disclosures About Market Risk

     For information regarding the market risk of PSB's financial
instruments, see "Liquidity and Interest Rate Sensitivity" in the
MD&A.  PSB's principal market risk exposure is to interest rate
changes.



Part II.  OTHER INFORMATION

Item 2    Legal Proceedings - None

Item 3    Changes in Securities - None

Item 4    Defaults upon Senior Securities - Not Applicable

Item 5    Submission of Matters to a Vote of Security Holders -
                                    None

Item 6    Exhibits and Reports on Form 8-K

Exhibit Index.

          Exhibit No.     Document

              2.1         Agreement and Plan of Reorganization,
                          dated as of March 19, 1999, between
                          PSB Bancorp, Inc. and First Bank of
                          Philadelphia. (incorporated herein by
                          reference to Exhibit 2.1 of the S-4
                          Registration Statement of PSB Bancorp,
                          Inc. filed June 25, 1999).

              2.2         Agreement and Plan of Reorganization
                          among PSB Bancorp, Inc., PSB Merger
                          Sub, Inc. and Jade Financial Corp.
                         (incorporated herein by reference to
                          Exhibit 2.2 of the Registration
                          Statement on Form S-4 of PSB Bancorp,
                          Inc. filed January 16, 2001.


              3.1         Articles of Incorporation of First
                          Penn Bank (incorporated herein by
                          reference to Exhibit 3.1 of the SB-2
                          Registration Statement of PSB Bancorp,
                          Inc. filed October 9, 1997).

              3.2         Bylaws of First Penn Bank
                          (incorporated herein by reference to
                          Exhibit 3.2 of the SB-2 Registration
                          Statement of PSB Bancorp, Inc. filed
                          October 9, 1997).

             10.1*        First Penn Bank's Retirement Plan
                          (incorporated herein by reference to
                          Exhibit 10.1 of the SB-2 Registration
                          Statement of PSB Bancorp, Inc. filed
                          October 9, 1997).

             10.2*        First Penn Bank's Cash or Deferred
                          Profit Sharing Plan (incorporated
                          herein by reference to Exhibit 10.2
                          of the SB-2 Registration Statement of
                          PSB Bancorp, Inc.  filed October 9,
                          1997).

             10.3*        First Penn Bank's Profit Sharing Plan
                          (incorporated herein by reference to
                          Exhibit 10.3 of the SB-2 Registration
                          Statement of PSB Bancorp, Inc filed
                          October 9, 1997).

             10.4*        Employment Agreement with Vincent J.
                          Fumo (incorporated herein by reference
                          to Exhibit 7.1 of the SB-2
                          Registration Statement of PSB Bancorp,
                          Inc filed October 9, 1997).

             10.5*        Employment Agreement with Anthony
                          DiSandro (incorporated herein by
                          reference to Exhibit 7.2 of the SB-2
                          Registration Statement of PSB Bancorp,
                          Inc filed October 9, 1997).

             10.6*        First Penn Bank's Employee Stock
                          Ownership Plan (incorporated herein by
                          reference to Exhibit 10.4 of the SB-2
                          Registration Statement of PSB Bancorp,
                          Inc. filed on October 9, 1997).


             10.7         First Penn Bank's Stock Option Plan
                          (incorporated herein by reference to
                          Exhibit 10.9 of the S-4 Registration
                          Statement of PSB Bancorp, Inc. filed
                          June 25, 1999).

             10.8         First Penn Bank's Management
                          Recognition Plan (incorporated herein
                          by reference to Exhibit 10.10 of the
                          S-4 Registration Statement of PSB
                          Bancorp, Inc. filed June 25, 1999).

             21           Schedule of Subsidiaries (incorporated
                          herein by reference to Form 10-KSB of
                          PSB Bancorp, Inc. filed on March 30,
                          2000).

____________
*  Denotes a management contract or compensatory plan or
arrangement.


(b)  Reports on Form 8-K

     (1)  Form 8-K filed on February 14, 2001 to announce the
          write-off of a $2.5 million investment in an
          aggregator of Internet banking services.



                           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 dully authorized.


PSB BANCORP, INC



By:/s/Anthony DiSandro
   Anthony DiSandro, President,
   Chief Executive Officer  & Director



By:/s/Karen Washington
   Karen Washington
   (Principal Financial Officer and
   Chief Accounting Officer)



May 15, 2001