1 1/2 c. peanut butter morsels, divided
2 c. all purpose flour
1 tsp. baking soda
1/2 tsp. baking powder
1/4 tsp. salt
1 c. butter, softened
1 1/4 c. sugar
2 eggs
1 tsp. vanilla extract
1 1/2 c. milk
3/4 c. coconut, toasted

Preheat oven to 350 degrees. Melt over hot (not boiling) water, 1/2 cup peanut butter morsels; stir until smooth. Set aside.

In small bowl, combine flour, baking soda, baking powder and salt; set aside.

In large bowl, combine butter and sugar; beat until creamy. Blend in melted morsels. Beat in eggs and vanilla extract. Alternately blend in flour and milk.

Pour into 2 greased and floured 8" round cake pans. Bake until crust is golden brown, 35 to 40 minutes; cool 10 minutes. Remove from pans; cool cake completely. Fill layers and frost side and top of cake with Peanut Butter Cream Frosting. Garnish with coconut, if desired.

PEANUT BUTTER CREAM FROSTING:

1 c. peanut butter morsels
1 (8 oz.) pkg. cream cheese, softened
1 tsp. vanilla extract
1/8 tsp. salt
3 c. sifted powdered sugar
2 tbsp. milk

Melt over hot (not boiling) water, 1 cup peanut butter morsels; stir until smooth. In large bowl, combine melted morsels, cream cheese, vanilla extract and salt; beat well. Beat in powdered sugar alternately with milk until mixture is of spreading consistency.