U.S. SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
FORM 10-QSB
(Mark One)
X Quarterly report under Section 13 or 15(d) of the Securities Exchange Act
of 1934
For the quarterly period ended March 31, 2000
Transition report under Section 13 or 15(d) of the Exchange Act
- ----
For the transition period from to
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Commission file number 333-44161
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PSB BANCGROUP, INC.
---------------------------------------------------------------
(Exact Name of Small Business Issuer as Specified in Its Charter)
Florida 59-3454146
- ------------------------- --------------
(State or Other Jurisdiction (I.R.S. Employer
of Incorporation or Organization) Identification No.)
500 South First Street
Lake City, Florida 32025
--------------------------------------
(Address of Principal Executive Offices)
(904) 754-0002
----------------------------------------------
(Issuer's Telephone Number, Including Area Code)
--------------------------------------------------------------
(Former Name, Former Address and Former Fiscal Year, if Changed
Since Last Report)
Check whether the issuer: (1) filed all reports required to be filed by
Section 12, 13 or 15(d) of the Exchange Act during the past 12 months (or for
such shorter period that the registrant was required to file such reports), and
(2) has been subject to such filing requirements for the past 90 days:
YES X NO
----
State the number of shares outstanding of each of the issuer's classes of
common equity, as of the latest practicable date;
Common stock, par value $.01 per share 515,034 shares
- -------------------------------------- ----------------------------
(class) Outstanding at April 18, 2000
(CONFORMED COPY)
<PAGE>
PSB BANCGROUP, INC. AND SUBSIDIARY
INDEX
PART I. FINANCIAL INFORMATION
Item 1. Financial Statements Page
Condensed Consolidated Balance Sheets -
At March 31, 2000 (Unaudited) and At December 31, 1999..............2
Condensed Consolidated Statements of Operations (Unaudited) -
Three Months ended March 31, 2000 and 1999..........................3
Condensed Consolidated Statement of Changes in Stockholders
Equity (Unaudited) - Three Months Ended March 31, 2000..............4
Condensed Consolidated Statements of Cash Flows (Unaudited) -
Three Months Ended March 31, 2000 and 1999..........................5
Notes to Condensed Consolidated Financial Statements (Unaudited)......6
Review by Independent Certified Public Accountants....................7
Report on Review by Independent Certified Public Accountants..........8
Item 2. Management's Discussion and Analysis of Financial Condition
and Results of Operations.............................................9
Item 3. Quantitative and Qualitative Disclosure about Market Risk......10
PART II. OTHER INFORMATION
Item 1. Legal Proceedings.............................................11
Item 6. Exhibits and Reports on Form 8-K..............................11
SIGNATURES................................................................12
1
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<TABLE>
PSB BANCGROUP, INC. AND SUBSIDIARY
PART I. FINANCIAL INFORMATION
Item 1. Financial Statements
Condensed Consolidated Balance Sheets
March 31, December 31,
Assets 2000 1999
---- ----
(unaudited)
<S> <C> <C>
Cash and due from banks $ 778,329 929,837
Interest-bearing deposits with banks 11,099 145,833
Federal funds sold 2,482,000 2,182,000
---------- ----------
Total cash and cash equivalents 3,271,428 3,257,670
Securities available for sale 1,473,300 1,475,027
Securities held to maturity 1,000,000 1,000,000
Loans receivable, net of allowance for loan losses of $55,426 in
2000 and $42,382 in 1999 5,478,119 4,235,120
Accrued interest receivable 72,351 79,439
Premises and equipment, net 740,085 366,500
Federal Home Loan Bank stock, at cost 14,400 9,400
Deferred income taxes 310,360 250,095
Other assets 117,740 122,990
---------- ----------
Total assets $ 12,477,783 10,796,241
========== ==========
Liabilities and Stockholders' Equity
Liabilities:
Noninterest-bearing demand deposits 968,023 907,021
Savings, NOW and money-market deposits 2,224,027 2,267,127
Time deposits 5,102,256 3,386,261
---------- ----------
Total deposits 8,294,306 6,560,409
Accrued interest payable and other liabilities 99,044 58,562
---------- ----------
Total liabilities 8,393,350 6,618,971
---------- ----------
Stockholders' equity:
Preferred stock - -
Common stock 5,151 5,145
Additional paid-in capital 4,592,655 4,587,657
Accumulated deficit (500,545) (404,244)
Accumulated other comprehensive income (loss) (12,828) (11,288)
---------- ----------
Total stockholders' equity 4,084,433 4,177,270
---------- ----------
Total liabilities and stockholders' equity $ 12,477,783 10,796,241
========== ==========
See Accompanying Notes to Condensed Consolidated Financial Statements.
</TABLE>
2
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<TABLE>
PSB BANCGROUP, INC. AND SUBSIDIARY
Condensed Consolidated Statements of Operations (Unaudited)
Three Months Ended
March 31,
2000 1999
---- ----
Interest income:
<S> <C>
Loans receivable $ 113,587 -
Securities 38,378 -
Other interest-earning assets 35,014 52,389
------- ------
Total interest income 186,979 52,389
------- ------
Interest expense:
Deposits 73,579 -
Borrowings - 7,729
------- ------
Total interest expense 73,579 7,729
------- ------
Net interest income 113,400 44,660
Provision for loan losses 13,044 -
------- ------
Net interest income after provision for loan losses 100,356 44,660
------- ------
Noninterest income-
Service charges on deposit accounts and other fees 17,164 -
------- ------
Noninterest expenses:
Salaries and employee benefits 87,483 49,563
Occupancy expense 37,414 4,239
Professional fees 9,520 540
Data processing 22,175 -
Litigation expense 89,382 -
Other 27,222 11,754
------- ------
Total noninterest expenses 273,196 66,096
------- ------
Loss before income tax benefit (155,676) (21,436)
Income tax benefit (59,375) (7,997)
------- ------
Net loss $ (96,301) (13,439)
======= ======
Loss per share, basic and diluted $ (.19) (.14)
======= ======
Weighted-average number of shares outstanding, basic and diluted 514,881 95,993
======= ======
Dividends per share $ - -
======= ======
See Accompanying Notes to Condensed Consolidated Financial Statements.
</TABLE>
3
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<TABLE>
PSB BANCGROUP, INC. AND SUBSIDIARY
Condensed Consolidated Statement of Changes in Stockholders" Equity
For the Three Months Ended March 31, 2000
Accumulated
Other
Compre-
Common Stock Additional hensive Total
------------------- Paid-In Accumulated Income Stockholders'
Shares Amount Capital Deficit (Loss) Equity
------ ------ ---------- ----------- ------------ -------------
<S> <C> <C> <C> <C> <C> <C> <C> <C>
Balance at December 31, 1999 514,478 $ 5,145 4,587,657 (404,244) (11,288) 4,177,270
---------
Comprehensive income (loss):
Net loss (unaudited) - - - (96,301) - (96,301)
Net change in unrealized
loss on securities
available for sale,
net of income taxes
of $890 (unaudited) - - - - (1,540) (1,540)
----------
Comprehensive income (loss)
(unaudited) (97,841)
Issuance of common stock upon
exercise of warrants
(unaudited) 556 6 4,998 - - 5,004
-------- ------- ----------- ----------- --------- ----------
Balance at March 31, 2000
(unaudited) 515,034 $ 5,151 4,592,655 (500,545) (12,828) 4,084,433
======= ===== ========= ======= ====== =========
See Accompanying Notes to Condensed Consolidated Financial Statements.
</TABLE>
4
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<TABLE>
PSB BANCGROUP, INC. AND SUBSIDIARY
Condensed Consolidated Statements of Cash Flows (Unaudited)
Three Months Ended
March 31,
2000 1999
---- ----
Cash flows from operating activities:
<S> <C> <C>
Net loss $ (96,301) (13,439)
Adjustments to reconcile net loss to net cash used in
operating activities:
Depreciation and amortization 3,789 -
Provision for loan losses 13,044 -
Deferred income tax benefit (59,375) (7,997)
Net amortization of fees, costs, premiums and discounts 2,887 -
Decrease in accrued interest receivable and
other assets 12,338 7,642
Increase in accrued interest payable and other liabilities 40,482 -
---------- ---------
Net cash used in operating activities (83,136) (13,794)
---------- ---------
Cash flows from investing activities:
Net increase in loans (1,259,633) -
Purchase of Federal Home Loan Bank stock (5,000) -
Purchase of premises and equipment (377,374) -
---------- ---------
Net cash used in investing activities (1,642,007) -
---------- ---------
Cash flows from financing activities:
Net increase in deposits 1,733,897 -
Net decrease in borrowings - (465,000)
Net proceeds from issuance of common stock 5,004 4,362,015
---------- ---------
Net cash provided by financing activities 1,738,901 3,897,015
---------- ---------
Net increase in cash and cash equivalents 13,758 3,883,221
Cash and cash equivalents at beginning of period 3,257,670 44,568
---------- ---------
Cash and cash equivalents at end of period $ 3,271,428 3,927,789
========== =========
Supplemental disclosure of cash flow information:
Cash paid during the period for:
Interest $ 34,552 7,729
========== =========
Income taxes $ - -
========== =========
Noncash transaction-
Accumulated other comprehensive income (loss), change in
unrealized loss on securities available for sale, net of tax $ (1,540) -
========== =========
See Accompanying Notes to Condensed Consolidated Financial Statements.
</TABLE>
<PAGE>
PSB BANCGROUP, INC. AND SUBSIDIARY
Notes to Condensed Consolidated Financial Statements (unaudited)
(1) Description of Business and Basis on Presentation
General. In the opinion of management, the accompanying condensed
consolidated financial statements contain all adjustments (consisting
principally of normal recurring accruals) necessary to present fairly
the financial position at March 31, 2000 and the results of operations
and cash flows for the three-month periods ended March 31, 2000 and
1999. The results of operations for the three months ended March 31,
2000 are not necessarily indicative of the results to be expected for
the year ending December 31, 2000.
PSB BancGroup, Inc. ("PSB") was incorporated on June 30, 1997. PSB owns
100% of the outstanding common stock of Peoples State Bank ("Bank")
(collectively the "Company"). PSB was organized simultaneously with the
Bank and its only business is the ownership and operation of the Bank.
The Bank is a Florida state-chartered commercial bank and its deposits
are insured by the Federal Deposit Insurance Corporation. The Bank
opened for business on April 28, 1999 and provides community banking
services to businesses and individuals in Lake City, Florida.
(2) Loan Impairment and Loan Losses
No loans were identified as impaired at or during the three months ended
March 31, 2000. The Bank had not opened for business as of March 31,
1999. The activity in the allowance for loan losses is as follows:
Three
Months
Ended
March 31,
--------
2000
----
Balance at beginning of period $ 42,382
Provision for loan losses 13,044
------
Balance at end of period $ 55,426
======
(3) Loss Per Share
Basic and diluted loss per share have been computed on the basis of the
weighted-average number of shares of common stock outstanding during
the periods.
(4) Regulatory Matters
The Bank is required to maintain certain minimum regulatory capital
requirements. The following is a summary at March 31, 2000 of the
regulatory capital requirements and the Bank's actual capital on a
percentage basis:
Regulatory
Actual Requirement
Total capital to risk-weighted assets 38.29% 8.00%
Tier I capital to risk-weighted assets 49.76% 4.00%
Tier I capital to total assets - leverage ratio 33.54% 4.00%
6
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PSB BANCGROUP, INC. AND SUBSIDIARY
Review by Independent Certified Public Accountants
Hacker, Johnson, Cohen & Grieb PA, the Company's independent certified public
accountants, have made a limited review of the financial data as of March 31,
2000, and for the three-month periods ended March 31, 2000 and 1999 presented in
this document, in accordance with standards established by the American
Institute of Certified Public Accountants.
Their report furnished pursuant to Article 10 of Regulation S-X is included
herein.
7
<PAGE>
Report on Review by Independent Certified Public Accountants
The Board of Directors
PSB BancGroup, Inc.
Lake City, Florida:
We have reviewed the accompanying condensed consolidated balance sheet of
PSB BancGroup, Inc. and Subsidiary (the "Company") as of March 31, 2000, and the
related condensed consolidated statements of operations and cash flows for the
three-month periods ended March 31, 2000 and 1999, and the condensed
consolidated statement of changes in stockholders' equity for the three-month
period ended March 31, 2000. These financial statements are the responsibility
of the Company's management.
We conducted our review in accordance with standards established by the
American Institute of Certified Public Accountants. A review of interim
financial information consists principally of applying analytical procedures to
financial data and making inquiries of persons responsible for financial and
accounting matters. It is substantially less in scope than an audit conducted in
accordance with generally accepted auditing standards, the objective of which is
the expression of an opinion regarding the financial statements taken as a
whole. Accordingly, we do not express such an opinion.
Based on our review, we are not aware of any material modifications that
should be made to the condensed consolidated financial statements referred to
above for them to be in conformity with generally accepted accounting
principles.
We have previously audited, in accordance with generally accepted auditing
standards, the consolidated balance sheet as of December 31, 1999, and the
related consolidated statements of operations, changes in stockholders' equity
and cash flows for the year then ended (not presented herein); and in our report
dated February 8, 2000 we expressed an unqualified opinion on those consolidated
financial statements. In our opinion, the information set forth in the
accompanying condensed consolidated balance sheet as of December 31, 1999, is
fairly stated, in all material respects, in relation to the consolidated balance
sheet from which it has been derived.
HACKER, JOHNSON, COHEN & GRIEB PA
Tampa, Florida
April 18, 2000
8
<PAGE>
PSB BANCGROUP, INC. AND SUBSIDIARY
Item 2. Management's Discussion and Analysis
of Financial Condition and Results of Operations
Comparison of March 31, 2000 and December 31, 1999
Liquidity and Capital Resources
The Company's primary source of cash during the three months ended March 31,
2000 was from net deposit inflows of $1.7 million. Cash was used primarily
to originate loans, net of principal repayments, totaling $1.3 million. At
March 31, 2000, the Company had unfunded lines of credit totaling $252,000
and had time deposits of $4.2 million maturing in one year or less. At March
31, 2000, the Bank exceeded its regulatory liquidity requirements.
Three Months Ended March 31, 2000 and 1999
Results of Operations
General. Net loss for the three months ended March 31, 2000 was $96,301 compared
to a net loss of $13,439 for the comparable period in 1999. The Bank
commenced operations on April 28, 1999. At March 31, 2000, the Company had
not achieved the asset size to operate profitably.
Interest Income. Interest income was $186,979 for the three months ended March
31, 2000. Interest income earned on loans was $113,587. The average loan
portfolio balance was $4.9 million for the three months ended March 31, 2000
and the average yield earned was 9.33%.
Interest Expense. Interest expense on deposits was $73,579 for the three months
ended March 31, 2000. The average balance of interest-bearing deposits was
$6.3 million for the three months ended March 31, 2000 and the average cost
was 4.66%.
Provision for Loan Losses. The provision for loan losses is charged to earnings
to increase the total allowance to a level deemed appropriate by management
and is based upon the volume and type of lending conducted by the Company,
industry standards, the amount of nonperforming loans and general economic
conditions, particularly as they relate to the Company's market areas, and
other factors related to the collectibility of the Company's loan portfolio.
The Company recorded a provision for loan losses for the three months ended
March 31, 2000 of $13,044 and the allowance for loan losses was $55,426 at
March 31, 2000. Management believes the allowance is adequate at March 31,
2000.
Noninterest Expense. Noninterest expense was $273,196 for the three months ended
March 31, 2000 compared to $66,096 for the three months ended March 31, 1999.
A portion of this increase resulted from $89,382 in litigation expenses
associated with the civil suit brought against the Company by the former
President of the Bank. Noninterest expense also increased due to commencement
of banking operations.
Income Tax Benefit. The income tax benefit for the three months ended March 31,
2000 was $59,375 (an effective rate of 38.1%).
Year 2000 Issues
The Company's operating and financial systems have been found to be compliant;
the "Y2K Problem" has not adversely affected the Company's operations nor does
management expect that it will.
9
<PAGE>
PSB BANCGROUP, INC. AND SUBSIDIARY
Item 3. Quantitative and Qualitative Disclosures About Market Risk
Market risk is the risk of loss from adverse changes in market prices and rates.
The Company's market risk arises primarily from interest rate risk inherent in
its lending and deposit taking activities. The Company has little or no risk
related to trading accounts, commodities or foreign exchange.
Management actively monitors and manages its interest rate risk exposure. The
primary objective in managing interest-rate risk is to limit, within established
guidelines, the adverse impact of changes in interest rates on the Company's net
interest income and capital, while adjusting the Company's asset-liability
structure to obtain the maximum yield-cost spread on that structure. Management
relies primarily on its asset-liability structure to control interest rate risk.
However, a sudden and substantial increase in interest rates could adversely
impact the Company's earnings, to the extent that the interest rates borne by
assets and liabilities do not change at the same speed, to the same extent, or
on the same basis. There have been no significant changes in the Company's
market risk exposure since December 31, 1999.
10
<PAGE>
PSB BANCGROUP, INC. AND SUBSIDIARY
PART II. OTHER INFORMATION
Item 1. Legal Proceedings
On September 19, 1999, C.F. Douglas, the Bank's former President and
Chief Executive Officer, filed a lawsuit against PSB, the Bank and seven
of the eight Bank directors relating to the termination of his
employment by the Bank. The lawsuit alleged breach of his employment
contract, tortious interference with the contract and a fraudulent
inducement regarding his entering into the contract. On March 23, 2000,
the parties agreed to amicably settle the lawsuit. The terms of the
settlement called for the Company to pay Mr. Douglas a lump sum
settlement in an amount less than $90,000 and for Mr. Douglas to fully
release all the defendants, as well as all employees, officers and
directors of PSB and the Bank, from any and all claims related to his
employment.
Item 6. Exhibits and Reports on Form 8-K
(a) Exhibits. The following exhibits are filed with or incorporated by
reference into this report. The exhibits marked by a single asterisk (*)
were previously filed as a part of PSB's Registration Statement on Form
SB-2, as effective with the Securities and Exchange Commission on
January 13, 1998, Registration No. 333-44161 and are hereby incorporated
by reference. The exhibits marked by a double asterisk (**) were
previously filed as part of PSB's Amendment No. 3 to the Registration
Statement on Form SB-2 as filed with the Securities and Exchange
Commission on May 18, 1998, Registration No. 333-44161 and hereby
incorporated by reference. The exhibit numbers correspond to the exhibit
numbers in the referenced documents.
Exhibit No. Description of Exhibit
*3.1 Articles of Incorporation of PSB BancGroup, Inc.
*3.2 Bylaws of PSB BancGroup, Inc.
*4.1 Specimen Common Stock Certificate
*4.2 Specimen Warrant Certificate
*4.4 PSB Bancgroup, Inc. Warrant Plan
**4.5 Amended and Restated Warrant Plan
*10.1 Employment Agreement with Robert W. Woodard
*10.2 Land Purchase Agreement
**10.3 Addendum to Land Purchase Agreement
**10.4 Amended Employment Agreement with Robert W. Woodard
10.6 Employment Agreement with Wesley T. Small
27 Financial Data Schedule (for SEC use only)
(b) Reports on Form 8-K. There were no reports on Form 8-K filed during the
three months ended March 31, 2000.
11
<PAGE>
PSB BANCGROUP, INC. AND SUBSIDIARY
SIGNATURES
Pursuant to the requirements of the Securities Exchange Act of 1934, the
Registrant has duly caused this report to be signed on its behalf by the
undersigned thereunto duly authorized.
PSB BANCGROUP, INC.
(Registrant)
Date: May 3, 2000 By: /s/ Alton C Milton
--------------------- --------------------------------
Alton C. Milton, Sr.,
Chairman of the Board
Date: May 3, 2000 By: /s/ Robert W. Woodard
--------------------- --------------------------------
Robert W. Woodard, President and
Chief Executive Officer
(Principal Financial Officer)
12
EMPLOYMENT AGREEMENT
BY AND AMONG
PEOPLES STATE BANK
AND
PSB BANCGROUP, INC.
AND
WESLEY T. SMALL
THIS EMPLOYMENT AGREEMENT ("Agreement") is entered into this 9th day of
November 1999, by and among PEOPLES STATE BANK, a Florida chartered commercial
bank ("Bank"), PSB BANCGROUP, INC., the Bank's parent holding-company and a
Florida Corporation ("Corporation"), and WESLEY T. SMALL ("Employee"). The Bank,
the Corporation and the Employee are collectively referred to herein as the
"Parties."
RECITALS
WHEREAS, the Bank and the Corporation wish to retain Employee as the
Bank's President and Chief Executive Officer to perform the duties and
responsibilities as are described in this Agreement and as the Bank's Board of
Directors ("Board") may assign to Employee from time to time; and
WHEREAS, Employee desires to become employed by the Bank and to serve
as the Bank's President and Chief Executive Officer in accordance with the terms
and provisions of this Agreement.
NOW, THEREFORE, in consideration of the mutual agreements contained
herein and other good and valuable consideration, the receipt and sufficiency of
which are hereby acknowledged, the Parties hereto represent, warrant, undertake,
covenant and agree as follows:
OPERATIVE TERMS
1. Employment and Term. The Bank shall employ Employee and Employee
shall be employed pursuant to the terms of this Agreement to perform the
services specified in Section 2 herein. The initial term of employment shall be
for a period of twelve (12) months, commencing on November 15, 1999.
Upon mutual written agreement, the Parties may extend the term of this
Agreement for two six- month periods (the "Extensions"). Prior to agreeing to
either of the Extensions, the Board shall review Employee's performance and this
Agreement.
In the event the Employee gives notice of termination of employment,
the Bank may elect, at its sole option, to have the term of this Agreement
expire immediately or upon the thirtieth (30th) day following the delivery to
the Bank and the Corporation of such notice of termination. Except as otherwise
provided in the following paragraph with respect to a voluntary termination for
Good Reason, a voluntary employment termination by the Employee shall result in
the termination of the rights and obligations of the Parties under this
Agreement; provided, however, that the terms and provisions of Section 12 shall
continue to apply.
Exhibit 10.6
1
<PAGE>
In the event the Bank desires to involuntarily terminate the employment
of Employee (for purposes of this Agreement, a voluntary employment termination
by the Employee for Good Reason shall be treated as an involuntary termination
of the Employee's employment without Cause), the Bank shall deliver to the
Employee a notice of termination, and the following provisions shall apply:
(a) In the event the involuntary termination is for Cause,
this Agreement shall terminate immediately upon delivery to
the Employee of such notice of termination. Such a termination
for Cause shall result in the termination of all rights and
obligations of the Parties under this Agreement.
(b) In the event the involuntary termination is without Cause,
the Employee shall be entitled to receive the severance
benefits set forth in Sections 9(f) and 9(g) herein.
2. Position, Responsibilities and Duties. During the term of
this Agreement, Employee shall serve in the following capacities and shall
fulfill the following responsibilities and duties:
(a) Specific Duties: Employee shall serve as the Bank's
President and Chief Executive Officer, through election by the
Board. In such capacity, Employee shall have the same powers,
duties and responsibilities of supervision and management of
the Bank usually accorded to a President and Chief Executive
Officer of similar financial institutions. In addition,
Employee shall use his best efforts to perform the duties and
responsibilities enumerated in this Agreement and any other
duties assigned to Employee by the Board and to utilize and
develop contacts and customers to enhance the business of the
Bank. Specifically, Employee shall devote his full business
time and attention and use his best efforts to accomplish and
fulfill the following duties and responsibilities, as well as
other duties assigned to Employee from time to time by the
Board:
(i) manage Bank personnel;
(ii) serve on such committees as appointed by the
Board from time to time;
(iii) supervise all Bank activities;
(iv) work closely with the Bank's Executive Vice
President, Robert W. Woodard, specifically
in the area of Bank operations;
(v) keep the Board informed of important
developments concerning the Bank's
activities, industry developments and
regulatory initiatives affecting the Bank;
(vi) maintain adequate expense records relating
to Employee's activities on behalf of the
Bank;
(vii) recommend marketing efforts to increase the
business of the Bank;
Exhibit 10.6
2
<PAGE>
(viii) coordinate with the Bank's Executive Vice
President, other officers, accountants,
auditors and counsel to the extent necessary
to further the business of the Bank, keeping
in compliance with government laws and
regulations and otherwise keeping the Bank
in as good a financial and legal posture as
possible; and
(ix) conduct and undertake all other activities,
responsibilities, and duties normally
expected to be undertaken and accomplished
by a President and Chief Executive Officer
of a financial institution similar in scope
and operation to the Bank's business.
(b) General Duties: During the term of this Agreement, and
except for illness, vacation periods and leaves of absences,
Employee shall devote all of his working time, attention,
skill and best efforts to accomplish and faithfully perform
all of the duties assigned to Employee on a full-time basis.
Employee shall, at all times, conduct himself in a manner that
will reflect positively upon the Bank. Employee shall obtain
such licenses, certificates, accreditations and professional
memberships and designations as the Bank may reasonably
require. Employee shall join and maintain membership in such
social and civic organizations as Employee or the Board deems
appropriate to foster the Bank's contacts and business network
in the community.
3. Compensation. During the term of this Agreement, Employee
shall be compensated as follows:
(a) Base Salary: Employee shall receive an annual salary of
$75,000 (the "Base Salary") in equal installments, in
accordance with the Bank's standard payroll practices, reduced
appropriately by deductions for federal income withholding
taxes, social security taxes and other deductions required by
applicable laws. The Bank may adjust the Base Salary from time
to time based upon the Board's evaluation of Employee's
performance. In no event, however, will the Base Salary be
reduced without Employee's written concurrence.
(b) Benefit Plans: During the term of this Agreement, the
Employee will be entitled to participate in and receive the
benefits of any profit-sharing plans, 401(k) plans, deferred
compensation plans, or other plans, benefits and privileges
given to employees and executives of the Bank which are
currently in effect at the execution of this Agreement or
which may come into existence thereafter, to the extent the
Employee is otherwise eligible and qualifies to so participate
in and receive such benefits or privileges. The Bank shall not
make any changes in such plans, benefits or privileges which
would adversely affect the Employee's rights or benefits
thereunder, unless such change occurs pursuant to a program
applicable to all executive officers (Vice President or above)
of the Bank and does not result in a proportionately greater
adverse change in the rights of or benefits to the Employee as
compared with any other executive officer of the Bank. Nothing
paid to the Employee under any plan or arrangement presently
in effect or made available in the future shall be deemed to
be in lieu of the Base Salary payable to the Employee pursuant
to Section 3 herein.
Exhibit 10.6
3
<PAGE>
4. Payment of Business Expenses. Employee is authorized to incur
reasonable expenses in performing his duties. The Bank will reimburse Employee
for authorized expenses, according to the Bank's established policies, promptly
after Employee's presentation of an itemized account of such expenditures.
5. Vacation. Employee is entitled to three (3) weeks paid
vacation time per year on a non-cumulative basis. Two (2) weeks of the vacation
must be taken during two (2) consecutive weeks.
6. Fringe Benefits.
(a) Medical Benefits: Employee is entitled to participate in
all medical and health care benefit plans through health
insurance, corporate funds, medical reimbursement plans or
other plans, if any, provided, or to be provided, by the Bank
for its employees.
(b) Club Memberships and Education: The Bank will reimburse
Employee for membership dues for joining service organizations
such as the Rotary Club or Kiwanis Club. The Bank will also
reimburse Employee for admission or attendance fees for
educational meetings or seminars offered by such organizations
as the Florida Bankers Association.
7. Disability/Illness.
(a) Illness: Employee shall be paid his full Base Salary for
any period of his illness or incapacity: provided that such
illness or incapacity does not render Employee unable to
perform his duties under this Agreement for a period longer
than three (3) consecutive months. At the end of such
three-month period, the Bank may terminate Employee's
employment and this Agreement.
(b) Disability: If the Bank terminates this Agreement pursuant
to Employee's disability as determined under Section 7(a)
herein, the Bank shall pay to Employee, as a disability
payment, an amount equal to Employee's monthly Base Salary,
payable in accordance with the Bank's standard payroll
practices, commencing on the effective date of Employee's
termination and ending on the earlier of:
(i) the date Employee returns to full time
employment in his capacity as the Bank's
President and Chief Executive Officer;
(ii) Employee's full time employment by another
financial institution;
(iii) three (3) months after the date of such
termination, after which Employee will be
entitled to receive benefits under any
disability insurance plan provided by the
Bank; or
(iv) the date of Employee's death.
The Bank may satisfy its obligations under this Section, at its option,
through the purchase of disability insurance. The provisions of such
policy will control the amounts paid to Employee. Such disability
insurance will be coordinated with any disability plans made available
to Employee pursuant to Section 6 herein.
Exhibit 10.6
4
<PAGE>
(c) Continuation of Coverages: During any period of illness or
disability, the Bank will continue any other life, health and
disability coverages for Employee substantially identical to the
coverages maintained prior to Employee's termination for disability.
Such coverages shall cease upon the earlier of:
(i) Employee's full time employment by another
financial institution;
(ii) one (1) year after the date of such
termination (with the exception of
disability insurance coverage); or
(iii) the date of Employee's death.
(d) No Reduction in Base Salary: During the period in which
Employee is disabled or subject to illness or incapacity, other than as
described in Section 7(b) herein, there shall be no reduction in
Employee's Base Salary.
8. Death During Employment. In the event of Employee's death during the
term of this Agreement, the Bank's obligation to Employee shall be limited to
the portion of Employee's compensation which would be payable up to the first
working day of the first month after Employee's death, except that any
compensation payable to Employee under any benefit plan maintained by the Bank
will be paid pursuant to its terms.
9. Termination.
(a) Illness, Incapacity or Death: This Agreement shall
terminate upon Employee's illness, incapacity or death in
accordance with the provisions of Sections 7 and 8 herein.
(b) Termination for Cause: The Bank shall have the right, at
any time, upon prior written notice of termination satisfying
the requirements of Section 11 herein, to terminate the
Employee's employment hereunder, including termination for
Cause. For the purpose of this Agreement, termination for
Cause shall mean termination for personal dishonesty,
incompetence, willful misconduct, material breach of fiduciary
duty, intentional failure to perform the duties stated in this
Agreement, willful violation of any law, rule or regulation
(other than traffic violations or similar offenses), willful
violation of a final cease-and-desist order, personal default
on indebtedness to a third party which is not corrected within
30 days from the date of default, willful or intentional
breach or negligence or misconduct in the performance of such
duties or material breach of any provision of this Agreement
as determined by a court of competent jurisdiction or in final
agency action by a federal or state regulatory agency having
jurisdiction over the Bank. For purposes of this Section, no
act, or failure to act, on the Employee's part shall be
considered "willful" unless done, or omitted to be done, by
him not in good faith and without reasonable belief that his
action or omission was in the best interest of the Bank;
provided that any act or omission to act by the Employee in
reasonable reliance upon an opinion of counsel to The Bank
shall not be deemed to be willful. In the event Employee is
terminated for Cause, Employee shall have no right to
compensation or other benefits for any period after such date
of termination.
Exhibit 10.6
5
<PAGE>
(c) Involuntary Termination: If the Employee is terminated by
the Bank other than for Cause or in connection with a
Change-in-Control of the Corporation (as defined in Section
9[e] herein), Employee's right to compensation and other
benefits under this Agreement shall be as set forth in
Sections 9(f)(i) and 9(g) herein. In the event the Employee is
terminated by the Bank in connection with a Change-in-Control
of the Corporation, Employee's right to compensation and other
benefits under this Agreement shall be as set forth in
Sections 9(f)(ii) and 9(h) herein.
(d) Termination for Good Reason: Employee may terminate his
employment hereunder for Good Reason. For purposes of this
Agreement, "Good Reason" shall mean (i) a failure by the Bank
to comply with any material provision of this Agreement, which
failure has not been cured within ten business (10) days after
a notice of such noncompliance has been given by the Employee
to the Bank; or (ii) subsequent to a Change-in-Control of the
Corporation as defined in Section 9(e) herein and without the
Employee's express written consent, any of the following shall
occur: the assignment to the Employee of any duties
inconsistent with the Employee's positions, duties,
responsibilities and status with the Bank immediately prior to
a Change-in-Control of the Corporation; a change in the
Employee's reporting responsibilities, titles or offices as in
effect immediately prior to a Change-in- Control of the
Corporation; any removal of the Employee from, or any failure
to re-elect the Employee to, any of such positions, except in
connection with a termination of employment for Cause,
disability, death, or removal pursuant to Sections 9(a) or
9(b) herein; a reduction by the Bank in the Employee's annual
salary as in effect immediately prior to a Change-in- Control
of the Corporation; the failure of the Bank to continue in
effect any bonus, benefit or compensation plan, life insurance
plan, health and accident plan or disability plan in which the
Employee is participating at the time of a Change-in-Control
of the Corporation, or the taking of any action by the Bank
which would adversely affect the Employee's participation in
or materially reduce the Employee's benefits under any of such
plans, or the transfer of the Employee to any location outside
of Columbia County, Florida or the assignment of substantial
duties to the Employee to be completed outside Columbia
County, Florida.
(e) Change-in-Control: "Change-in-Control" is defined herein
to mean an event where a person: (i) directly or indirectly,
or acting through one or more other persons, owns, controls or
has power to vote more than 50% of any class of the then
outstanding voting securities of the Corporation; or (ii)
controls in any manner the election of the directors of the
Corporation. For purposes of this Agreement, a
Change-in-Control shall be deemed not to have occurred in
connection with a reorganization, consolidation, or merger of
the Corporation where the stockholders of the Corporation,
immediately before the consummation of the transaction, will
own over 50% of the total combined voting power of all classes
of stock entitled to vote of the surviving entity immediately
after the transaction.
(f) Severance Payment:
(i) If the Employee shall terminate his
employment for Good Reason as defined in
Section 9(d) herein, or if the Employee is
terminated by the Bank for other than Cause
pursuant to Section 9(c) herein, then in
lieu of any further salary payments to the
Employee for periods subsequent to the date
Exhibit 10.6
6
<PAGE>
of termination, the Employee shall be paid,
as severance, twelve (12) months Base Salary
(ii) In the event Employee's employment is
terminated as a result of a Change-in-
Control or a Change-in-Control of the
Corporation occurs within twelve (12) months
of the Employees' involuntary termination or
termination for Good Reason, Employee shall
be entitled to a severance payment equal to
his current Base Salary. Any payment under
Section 9(f)(i) and 9(f)(ii) shall be made
in substantially equal semi-monthly
installments on the fifteenth and last days
of each month until paid in full.
(g) Additional Severance Benefits: Unless the Employee is
terminated for Cause pursuant to Section 9(b) herein, pursuant
to Section 10(b) herein, or pursuant to a termination of
employment by the Employee for other than Good Reason, the
Bank shall maintain in full force and effect, for the
continued benefit of the Employee for the remaining term of
this Agreement, or twelve (12) months (whichever is longer),
all Employee benefit plans and programs in which the Employee
was entitled to participate immediately prior to the date of
termination; provided, however, that the Employee's continued
participation is possible under the general terms and
provisions of such plans and programs. Further, the Bank shall
pay for the same or similar benefits if such benefits are
available to the Employee on an individual or group basis as a
result of contractual or statutory provisions requiring or
permitting such availability including, but not limited to,
health insurance covered under COBRA.
(h) Mitigation: Employee shall not be required to mitigate the
amount of any payment provided for in Sections 9(f) and 9(g)
of this Agreement by seeking other employment or otherwise.
10. Required Provisions by Regulation. The Parties acknowledge
that the laws and regulations governing the Bank require that certain provisions
be provided in each employment agreement with officers and employees of the
Bank. The Parties agree to be bound by the following provisions:
(a) Suspension/Temporary Prohibition: If the Employee is
suspended and/or temporarily prohibited from participating in
the conduct of the Bank's affairs by a notice served under
Section 655.037 Florida Statutes or under Section 8(e) or
(g)(1) of the Federal Deposit Insurance Act [12 U.S.C.
ss.1818(e)(3) and (g)(1)] the Bank's obligations under this
Agreement shall be suspended as of the date of such service
unless stayed by appropriate proceedings. If the charges and
the notice are dismissed, the Bank may in its discretion:
(i) pay the Employee all or part of his compensation
withheld while the obligations under this
Agreement are suspended; and
(ii) reinstate (in whole or part) any of the Bank's
obligations which were suspended.
(b) Permanent Prohibition: If the Employee is removed and/or
permanently prohibited from participating in the conduct of
the Bank's affairs by an order issued under Section
Exhibit 10.6
7
<PAGE>
655.037 Florida Statutes or Section 8(e)(4) or (g)(1) of the
Federal Deposit Insurance Act [12 U.S.C. ss.1818(e)(4) or
(g)(1)], all of the Bank's obligations under this Agreement
shall terminate as of the effective date of the order, but the
Employee's vested rights, if any shall not be affected.
(c) Default Under FDIA: If the Bank is in default [as defined
in Section 3(x)(1) of the Federal Deposit Insurance Act], all
obligations under this Agreement shall terminate as of the
date of default, but this subsection of this Agreement shall
not affect the Employee's vested rights if any.
(d) Regulatory Termination: All obligations under this
Agreement shall be terminated, except to the extent that a
determination has been made that continuation of this
Agreement is necessary for continued operation of the Bank:
(i) by the Director or his or her designee, at
the time the Federal Deposit Insurance
Corporation ("FDIC") enters into an
agreement to provide assistance to or on
behalf of the Bank under the authority
contained in Section 13(c) of the Federal
Deposit Insurance Act; or
(ii) by the Department or the Director or his or
her designee, at the time the Department or
the Director or his or her designee approves
a supervisory merger to resolve problems
related to operation of the Bank or when the
Bank's determined by the Director to be in
unsafe or unsound condition.
Any of the Employee's rights that have already
vested, however, shall not be affected by such
action. For purposes of this subsection of this
Agreement, the term "Director" shall mean the
Director of the FDIC.
11. Notice of Termination.
(a) Employee's Notice: Employee shall have the right, upon
prior written notice of termination of not less than thirty
(30) days, to terminate his employment hereunder. In such
event, Employee shall have no right after the date of
termination to compensation or other benefits as provided in
this Agreement, unless such termination is for "Good Reason",
as defined in Section 9(d) herein. If the Employee provides a
notice of termination for Good Reason, the date of termination
shall be the date on which the notice of termination is given.
(b) Specificity: Any termination of the Employee's employment
by the Bank or by Employee shall be communicated by written
notice of termination to the other Party hereto. For purposes
of this Agreement, a "notice of termination" shall mean a
dated notice which shall: (i) indicate the specific
termination provision in the Agreement relied upon; (ii) set
forth in reasonable detail the facts and circumstances claimed
to provide a basis for termination of the Employee's
employment under the provision so indicated; and (iii) set
forth the date of termination, which shall be not less than
thirty (30) days nor more than forty-five (45) days after such
notice of termination is given, except in the case of the
Exhibit 10.6
8
<PAGE>
Bank's termination of the Employee's employment for Cause, in
which case date of termination shall be the date such notice
of termination is given.
(c) Delivery of Notices: All notices given or required to be
given herein shall be in writing, sent by United States
first-class certified or registered mail, postage prepaid, by
way of overnight carrier or by hand delivery. If to the
Employee (or to the Employee's spouse or estate upon the
Employee's death) notice shall be sent to Employee's
last-known address, and if to the Bank and the Corporation,
notice shall be sent to their respective corporate
headquarters. All such notices shall be effective when
deposited in the mail if sent via first- class certified or
registered mail, or upon delivery if by hand delivery or sent
via overnight carrier. Any Party, by notice in writing, may
change or designate the place for receipt of all such notices.
12. Post-Termination Obligations. The Bank shall pay to Employee such
compensation as is required pursuant to this Agreement; provided, however, any
such payment shall be subject to Employee's post-termination cooperation. Such
cooperation shall include the following:
(i) Employee shall furnish such information and
assistance as may be reasonably required by
the Bank or the Corporation in connection
with any litigation or settlement of any
dispute between the Bank and/or the
Corporation and a borrower and/or any other
third parties (including without limitation
serving as a witness in court or other
proceedings);
(ii) Employee shall provide such information or
assistance to the Bank and/or the
Corporation in connection with any
regulatory examination by any state or
federal regulatory agency;
(iii) Employee shall keep the Bank's trade secrets
and other proprietary or confidential
information secret to the fullest extent
practicable, subject to compliance with all
applicable laws.
Upon submission of proper receipts, the Bank shall promptly reimburse
Employee for any reasonable expenses in current by Employee in complying with
the provisions of this Section.
13. Attorneys' Fees. In the event that any claim or controversy
hereunder is the subject of any litigation or arbitration between or among the
Parties, the prevailing party shall be entitled to an award of all reasonable
costs, including attorneys' fees.
14. Indebtedness. If during the term of this Agreement, Employee
becomes indebted to the Bank for any reason, the Bank may, at its election, set
off and collect any sums due Employee out of any amounts which the Bank may owe
Employee from his Base Salary or other compensation. Furthermore, upon the
termination of this Agreement, all sums owed by Employee shall become
immediately due and payable. Employee shall pay all expenses and attorneys' fees
actually or necessarily incurred by the Bank in connection with any collection
proceeding for Employee's indebtedness to us. Notwithstanding any of the
foregoing, any indebtedness to us secured by a mortgage on Employee's residence
shall not be subject to the foregoing provisions, and shall be governed by the
loan documents evidencing such indebtedness.
Exhibit 10.6
9
<PAGE>
15. Maintenance of Trade Secrets and Confidential Information. Employee
shall use his best efforts and utmost diligence to guard and protect all of the
Bank's trade secrets and confidential information. Employee shall not, either
during the term or after termination of this Agreement, for whatever reason,
use, in any capacity, or divulge or disclose in any manner, to any Person, the
identity of the Bank's customers, or its customer lists, methods of operation,
marketing and promotional methods, processes, techniques, systems, formulas,
programs or other trade secrets or confidential information relating to the
Bank's business. Upon termination of this Agreement or Employee's employment,
for any reason, Employee shall immediately return and deliver to the Bank all
records and papers and all matters of whatever nature which bear trade secrets
or confidential information relating to the Bank.
16. Competitive Activities.
(a) Limitation on Outside Activities: Employee agrees that
during the term of this Agreement, except with the express
consent of the Board, Employee will not, directly or
indirectly, engage or participate in, become a director of, or
render advisory or other services for, or in connection with,
or become interested in, or make any financial investment in
any firm, corporation, business entity or business enterprise
competitive with or to any business of the Bank; provided,
however, that Employee shall not be precluded or prohibited
from owning passive investments, including investments in the
securities of other financial institutions, so long as such
ownership does not require Employee to devote substantial time
to management or control of the business or activities in
which Employee has invested.
(b) Agreement Not to Compete: Employee acknowledges that by
virtue of his employment with the Bank, Employee will acquire
an intimate knowledge of the activities and affairs of the
Bank, including trade secrets and other confidential matters.
Employee, therefore, agrees that during the term of this
Agreement, and for a period of eight (8) months (in the event
Employee does not receive severance compensation) or fourteen
(14) months (in the event Employee does receive severance
compensation) following the termination of Employee's
employment hereunder, Employee shall not become employed,
directly or indirectly, whether as an Employee, independent
contractor, consultant, or otherwise, with a federally-insured
financial institution located in, or with any business
enterprise, business entity or Person whose intent is to
organize another financial institution in, Columbia County,
Florida.
Employee further agrees that for a period of twelve (12)
months following the termination of Employee's employment
hereunder for any reason, Employee shall not directly or
indirectly solicit the business of any then current customer
of the Bank, regardless of whether or not Employee was
responsible for generating such customer's business for the
Bank. This restriction shall apply to both loan customers and
depositors of the Bank.
Employee hereby agrees that the duration of the
anticompetitive covenant set forth herein is reasonable, and
its geographic scope is not unduly restrictive.
Exhibit 10.6
10
<PAGE>
17. Remedies for Breach.
(a) Arbitration: The Parties agree that, except for the
specific remedies for injunctive relief as contained in
Section 17(b) and other equitable relief, any controversy or
claim arising out of or relating to this Agreement, or any
breach thereof, including, without limitation, any claim that
this Agreement or any portion thereof is invalid, illegal or
otherwise voidable, shall be submitted to binding arbitration
before and in accordance with the Rules of the American
Arbitration Association and judgment upon the determination
and/or award of such arbitrator may be entered in any court
having jurisdiction thereof; provided, however, that this
clause shall not be construed to permit the award of punitive
damages to either Party. The prevailing Party to said
arbitration shall be entitled to an award of reasonable
attorney's fees. The venue for arbitration shall be in
Columbia County, Florida.
(b) Injunctive Relief: The Parties acknowledge and agree that
the services to be performed by Employee are special and
unique and that money damages cannot fully compensate the Bank
in the event of Employee's violation of the provisions of
Section 16 of this Agreement. Thus, in the event of a breach
of any of the provisions of such Section, Employee agrees that
the Bank, upon application to a court of competent
jurisdiction, shall be entitled to an injunction restraining
Employee from any further breach of the terms and provision of
such Section. Should the Bank prevail in an action seeking an
injunction restraining Employee, Employee shall pay all costs
and reasonable attorneys' fees incurred by the Bank in and
relating to obtaining such injunction. Such injunctive relief
may be obtained without bond and Employee's sole remedy, in
the event of the entry of such injunction, shall be the
dissolution of such injunction. Employee hereby waives any and
all claims for damages by reason of the wrongful issuance of
any such injunction.
(c) Cumulative Remedies: Notwithstanding any other provision
of this Agreement, the injunctive relief described in Section
17(b) herein and all other remedies provided for in this
Agreement which are available to the Bank as a result of
Employee's breach of this Agreement, are in addition to and
shall not limit any and all remedies existing at or in equity
which may also be available to the Bank.
18. Assignment. This Agreement shall inure to the benefit of and be
binding upon the Employee, and to the extent applicable, his heirs, assigns,
executors, and personal representatives, and to the Bank and the Corporation,
and to the extent applicable, their successors, and assigns, including, without
limitation, any person, partnership, or corporation which may acquire all or
substantially all of the Bank's or the Corporation's assets and business, or
with or into which the Bank or Corporation may be consolidated or merged, and
this provision shall apply in the event of any subsequent merger, consolidation,
or transfer, unless such merger or consolidation or subsequent merger or
consolidation is a transaction of the type which would result in termination
under Sections 10(c) and 10(d) herein.
19. Miscellaneous.
(a) Amendment of Agreement: Unless as otherwise provided
herein, this Agreement may not be modified or amended except
in writing signed by the Parties.
Exhibit 10.6
11
<PAGE>
(b) Certain Definitions: For purposes of this Agreement, the
following terms whenever capitalized herein shall have the
following meanings:
(i) "Person" shall mean any natural person,
corporation, partnership (general or
limited), trust, association or any other
business entity.
(ii) "Attorneys' Fees" shall include the legal
fees and disbursements charged by attorneys
and their related expenses, court costs,
paralegal fees, etc. incurred in settlement,
trial, appeal or in bankruptcy proceedings.
(c) Headings for Reference Only: The headings of the Sections
and the Subsections herein are included solely for convenient
reference and shall not control the meaning of the
interpretation of any of the provisions of this Agreement.
(d) Governing Law/Jurisdiction: This Agreement shall be
construed in accordance with and governed by the laws of the
State of Florida. Any litigation involving the Parties and
their rights and obligations hereunder shall be brought in the
appropriate court in Columbia County, Florida.
(e) Severability: If any of the provisions of this Agreement
shall be held invalid for any reason, the remainder of this
Agreement shall not be affected thereby and shall remain in
full force and effect in accordance with the remainder of its
terms.
(f) Entire Agreement: This Agreement and all other documents
incorporated or referred to herein, contain the entire
agreement of the Parties and there are no representations,
inducements or other provisions other than those expressed in
writing herein. This Agreement amends, supplants and
supersedes any and all prior agreements between the Parties.
(g) Waiver: No course of conduct by the Parties and no delay
or omission of any Party to exercise any right or power given
under this Agreement shall: (i) impair the subsequent exercise
of any right or power, or (ii) be construed to be a waiver of
any default or any acquiescence in or consent to the curing of
any default while any other default shall continue to exist,
or be construed to be a waiver of such continuing default or
of any other right or power that shall theretofore have
arisen. Any power and/or remedy granted by law and by this
Agreement to any Party hereto may be exercised from time to
time, and as often as may be deemed expedient. All such rights
and powers shall be cumulative to the fullest extent permitted
by law.
(h) Pronouns: As used herein, words in the singular include
the plural, and the masculine include the feminine and neuter
gender, as appropriate.
(i) Recitals: The Recitals set forth at the beginning of this
Agreement shall be deemed to be incorporated into this
Agreement by this reference as if fully set forth herein, and
this Agreement shall be interpreted with reference to and in
light of such Recitals.
Exhibit 10.6
12
<PAGE>
IN WITNESS WHEREOF, the Parties hereto have executed this Agreement as
of the day and year first written above.
EMPLOYEE PEOPLES STATE BANK
/s/ Wesley T. Small By: /s/ A. C. Milton
- -------------------------- ---------------------
Wesley T. Small, Employee A.C. Milton,
Chairman of the Board and
Acting Chief Executive
Officer and President
/s/ Penny Cooper /s/ Jimmie Kirk
- -------------------------- ----------------------
Witness Witness
PSB BANCGROUP, INC.
By: /s/ Robert W. Woodard
--------------------------
Robert W. Woodard,
President and Chief
Executive Officer
/s/ Jimmie Kirk
-------------------------
Witness
Exhibit 10.6
13
<TABLE> <S> <C>
<ARTICLE> 9
<LEGEND>
This schedule contains summary financial
information extracted from Form 10-QSB
for the period ended March 31, 2000 and
is qualified in its entirety by
reference to such financial statements.
</LEGEND>
<CIK> 0001052634
<NAME> PSB Bancgroup, Inc.
<S> <C>
<PERIOD-TYPE> 3-MOS
<FISCAL-YEAR-END> Dec-31-2000
<PERIOD-START> Jan-01-2000
<PERIOD-END> Mar-31-2000
<CASH> 778
<INT-BEARING-DEPOSITS> 11
<FED-FUNDS-SOLD> 2,482
<TRADING-ASSETS> 0
<INVESTMENTS-HELD-FOR-SALE> 1,473
<INVESTMENTS-CARRYING> 1,000
<INVESTMENTS-MARKET> 988
<LOANS> 5,533
<ALLOWANCE> 55
<TOTAL-ASSETS> 12,478
<DEPOSITS> 8,295
<SHORT-TERM> 0
<LIABILITIES-OTHER> 99
<LONG-TERM> 0
0
0
<COMMON> 5
<OTHER-SE> 4,079
<TOTAL-LIABILITIES-AND-EQUITY> 12,478
<INTEREST-LOAN> 114
<INTEREST-INVEST> 38
<INTEREST-OTHER> 35
<INTEREST-TOTAL> 187
<INTEREST-DEPOSIT> 74
<INTEREST-EXPENSE> 74
<INTEREST-INCOME-NET> 113
<LOAN-LOSSES> 13
<SECURITIES-GAINS> 0
<EXPENSE-OTHER> 273
<INCOME-PRETAX> (156)
<INCOME-PRE-EXTRAORDINARY> (96)
<EXTRAORDINARY> 0
<CHANGES> 0
<NET-INCOME> (96)
<EPS-BASIC> (.19)
<EPS-DILUTED> (.19)
<YIELD-ACTUAL> 4.61
<LOANS-NON> 0
<LOANS-PAST> 0
<LOANS-TROUBLED> 0
<LOANS-PROBLEM> 0
<ALLOWANCE-OPEN> 42
<CHARGE-OFFS> 0
<RECOVERIES> 0
<ALLOWANCE-CLOSE> 55
<ALLOWANCE-DOMESTIC> 55
<ALLOWANCE-FOREIGN> 0
<ALLOWANCE-UNALLOCATED> 0
</TABLE>
