FORM -10QSB
SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
(Mark One)
[X] QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES
EXCHANGE ACT OF 1934 FOR THE QUARTERLY PERIOD ENDED JUNE 30, 1996
OR
[ ] TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES
EXCHANGE ACT OF 1934
For the transition period from ______________ to _____________
Commission File No. 333-02690
_______________________PEOPLES FINANCIAL CORPORATION____________________
Exact name of registrant as specified in its charter)
______________Ohio______________ ______34-1822228_____
(State or other jurisdiction of (I.R.S. Employer
incorporation of organization) Identification Number)
211 Lincoln Way, East
Massillon, Ohio 44646
- --------------------- ----------
(Address of principal (Zip Code)
executive office)
Registrant's telephone number, including area code: (330) 832-7441
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 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 _____ No __X*__
As of September 1, 1996, the latest practicable date, 100 common shares of the
registrant, no par value, were issued and outstanding.
*The registrant's Registration Statement on Form S-1 was declared effective on
July 25, 1996. The registrant has conducted no business except the offering of
its shares and preparation to acquire Peoples Federal Savings and Loan
Association of Massillon. The financial information contained in this Form
10-QSB is, therefore, provided for Peoples Federal Savings and Loan
Association of Massillon.
Page 1 of 17 Pages
<PAGE>
INDEX
PEOPLES FINANCIAL CORPORATION
Page
------
PART I - FINANCIAL INFORMATION
Consolidated Statements of Financial Condition 3
Consolidated Statements of Income 4
Consolidated Statements of Cash Flows 5
Notes to Consolidated Financial Statements 7
Management's Discussion and Analysis of
Financial Condition and Results of Operations 11
PART II - OTHER INFORMATION 16
SIGNATURES 17
Page 2 of 17 Pages
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<TABLE>
CONSOLIDATED STATEMENTS OF FINANCIAL CONDITION
PEOPLES FEDERAL SAVINGS AND LOAN ASSOCIATION OF MASSILLON AND SUBSIDIARY
(In thousands)
JUNE 30, SEPTEMBER 30,
ASSETS 1996 1995
- ---------------- ---------- -------------
<S> <C> <C>
Cash and cash equivalents $ 6,041 $ 1,864
Investment securities:
Available for sale - at market 1,544 809
Held to maturity - at cost - market value of $3,718
and $7,941 at June 30, 1996 and September 30, 1995 3,687 7,912
Mortgage-backed securities:
Available for sale - at market 13,402 0
Held to maturity - at cost - market value of $9,656
and $25,820 at June 30, 1996 and September 30, 1995 9,532 26,008
Loans receivable - net 41,090 38,021
Federal Home Loan Bank stock - at cost 722 685
Accrued interest receivable 317 375
Premises and equipment - at depreciated cost 1,530 1,541
Prepaid Federal taxes on income 12 0
Other assets 375 92
-------------------
Total Assets $78,252 $77,307
===================
LIABILITIES AND RETAINED EARNINGS
Liabilities:
Deposits $67,543 $66,564
Accrued expenses and other liabilities 54 318
Advance payments by borrowers for taxes and insurance 5 0
Federal taxes on income:
Current 0 33
Deferred 570 510
-------------------
Total Liabilities 68,172 67,425
Retained earnings:
Unrealized gains on securities available for sale,
net of related tax effects 496 504
Retained earnings, net 9,584 9,378
-------------------
10,080 9,882
-------------------
Total Liabilities and Retained Earnings . $78,252 $77,307
===================
</TABLE>
Page 3 of 17 Pages
<PAGE>
<TABLE>
CONSOLIDATED STATEMENTS OF INCOME
PEOPLES FEDERAL SAVINGS AND LOAN ASSOCIATION OF MASSILLON AND SUBSIDIARY
(In thousands)
THREE MONTHS ENDED NINE MONTHS ENDED
JUNE 30 JUNE 30
------------------ -----------------
1996 1995 1996 1995
------ ------ ------ ------
<S> <C> <C> <C> <C>
Interest income:
Loans receivable $ 825 $ 804 $ 2,393 $2,357
Mortgage-backed and related securities 398 391 1,206 1,088
Investment securities 89 160 359 491
Deposits 85 31 186 92
-------------------------------------
Total interest income 1,397 1,386 4,144 4,028
Interest expense on deposit accounts 834 813 2,555 2,297
-------------------------------------
Net interest income 563 573 1,589 1,731
Provision for loan losses 0 3 105 3
-------------------------------------
Net interest income after
provision for loan losses 563 570 1,484 1,728
Other operating income 7 5 19 18
-------------------------------------
570 575 1,503 1,746
Noninterest expense:
Salaries and employee benefits 188 159 553 529
Occupancy and equipment 56 51 162 141
Federal deposit insurance premiums 38 37 115 113
Data processing costs 18 24 50 65
Advertising 5 24 24 55
Franchise taxes 36 36 89 103
Directors' fees 29 19 58 46
Other 63 61 155 231
-------------------------------------
433 411 1,206 1,283
-------------------------------------
Earnings before Federal taxes on income 137 164 297 463
Federal taxes on income:
Current 45 49 114 128
Deferred (2) 3 (23) 16
-------------------------------------
43 52 91 144
-------------------------------------
Net income $ 94 $ 112 $ 206 $ 319
=====================================
</TABLE>
Page 4 of 17 Pages
<PAGE>
<TABLE>
CONSOLIDATED STATEMENTS OF CASH FLOWS
PEOPLES FEDERAL SAVINGS AND LOAN ASSOCIATION OF MASSILLON AND SUBSIDIARY
(In thousands)
THREE MONTHS ENDED NINE MONTHS ENDED
JUNE 30 JUNE 30
1996 1995 1996 1995
------- ------- ------- -------
<S> <C> <C> <C> <C>
Cash flows from operating activities:
Net income $ 94 $ 112 $ 206 $ 319
Adjustments to reconcile net income to net
cash provided by operating activities:
Depreciation of premises and equipment 26 21 71 63
Amortization of premiums and discounts
on investment securities and
mortgage-backed securities, net 13 8 43 27
Provision for loan losses 0 3 105 3
Federal Home Loan Bank stock
dividends 0 (11) (37) (32)
Changes in assets and liabilities:
(Increase) decrease in accrued interest
receivable 37 24 58 (24)
(Increase) decrease in other assets (159) 2 (276) (13)
Increase (decrease) in accrued
expenses and other liabilities 5 26 (265) (22)
Increase (decrease) in current and
deferred Federal taxes on income 43 (8) 18 24
----------------------------------------
Net cash provided by (used in)
operating activities 59 177 (77) 345
Cash flows from investing activities:
Loan originations and principal repayments
on loans, net (2,782) (487) (3,182) (235)
Proceeds from:
Principal repayments and maturities of
mortgage-backed securities held to
maturity 553 731 2,546 3,748
Principal repayments and maturities of
mortgage-backed securities available
for sale 725 0 1,313
Principal repayments and maturities of
investment securities held to maturity 4,000 1,170 4,288 6,131
Principal repayments and maturities of
investment securities available for sale 144 0 337 0
Purchases of:
Mortgage-backed securities held to
maturity 0 (2,053) (5,640)
Mortgage-backed securities available
for sale (973) 0 (973)
Investment securities held to maturity (1,000) (500) (1,000) (4,247)
Premises and equipment (53) (5) (60) (14)
----------------------------------------
Net cash provided by (used in)
investing activities 614 (1,144) 3,269 (257)
----------------------------------------
Net cash provided by (used in)
operating and investing activities
(subtotal carried forward) $ 673 ($ 967) $ 3,192 $ 88
</TABLE>
Page 5 of 17 Pages
<PAGE>
<TABLE>
CONSOLIDATED STATEMENTS OF CASH FLOWS (CONTINUED)
PEOPLES FEDERAL SAVINGS AND LOAN ASSOCIATION OF MASSILLON AND SUBSIDIARY
(In thousands)
THREE MONTHS ENDED NINE MONTHS ENDED
JUNE 30 JUNE 30
1996 1995 1996 1995
------- ------- ------- -------
<S> <C> <C> <C> <C>
Net cash provided by (used in)
operating and investing activities
(subtotal brought forward) $ 673 ($ 967) $ 3,192 $ 88
Cash flows from financing activities:
Net increase (decrease) in deposits 169 1,017 980 700
Net increase (decrease) in advance
payments by borrowers for taxes and
insurance 3 5 0
----------------------------------------
Net cash provided by
financing activities 172 1,017 985 700
----------------------------------------
Net increase in cash and cash equivalents 845 50 4,177 788
Cash and cash equivalents at beginning of
period 5,196 2,550 1,864 1,812
----------------------------------------
Cash and cash equivalents at end of
period $ 6,041 $ 2,600 $ 6,041 $ 2,600
========================================
</TABLE>
Page 6 of 17 Pages
<PAGE>
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
PEOPLES FEDERAL SAVINGS AND LOAN ASSOCIATION OF MASSILLON AND SUBSIDIARY
For the three and nine month periods ended
June 30, 1996 and 1995
1. Basis of Presentation
The accompanying unaudited consolidated financial statements were prepared in
accordance with instructions for Form 10-QSB and, therefore, do not include
information or footnotes necessary for complete presentation of financial
position, results of operations and cash flows in conformity with generally
accepted accounting principles. Accordingly, these financial statements should
be read in conjunction with the consolidated financial statements and notes
thereto of Peoples Federal Savings and Loan Association of Massillon for the
year ended September 30, 1995. However, in the opinion of management, all
adjustments (consisting of only normal recurring accruals) which are necessary
for fair presentation of the consolidated financial statements have been
included. The results of operations for the three and nine month periods ended
June 30, 1996 and 1995 are not necessarily indicative of the results which may
be expected for an entire fiscal year.
2. Principles of Consolidation
The accompanying consolidated financial statements include the accounts of
Peoples Federal Savings and Loan Association of Massillon (the Association)
and its inactive subsidiary. All significant intercompany items have been
eliminated. Peoples Federal Savings and Loan Association of Massillon is in
the process of converting to a stock association on July 25, 1996. Upon
completion of the conversion, the Association will become a wholly-owned
subsidiary of Peoples Financial Corporation.
3. Effects of Recent Accounting Pronouncements
In May, 1993 the Financial Accounting Standards Board issued Statement of
financial Accounting Standards No. 114 (SFAS No. 114), "Accounting by
Creditors for Impairment of a Loan." SFAS No. 114 was amended by SFAS No. 118,
"Accounting by Creditors for Impairment of a Loan - Income Recognition and
Disclosures." SFAS No. 114, as amended, requires that impaired loans be
measured based upon the present value of expected future cash flows discounted
at the loan's effective interest rate or as a practical expedient, at the
loan's observable market price or fair value of the collateral. The
Association adopted the Statement effective October 1, 1995, without material
effect on consolidated financial condition or results of operations.
Page 7 of 17 Pages
<PAGE>
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (CONTINUED)
PEOPLES FEDERAL SAVINGS AND LOAN ASSOCIATION OF MASSILLON AND SUBSIDIARY
For the three and nine month periods ended
June 30, 1996 and 1995
3. Effects of Recent Accounting Pronouncements (continued)
In May 1993, the Financial Accounting Standards Board issued Statement of
Financial Accounting Standards No. 115 (SFAS No. 115), "Accounting for Certain
Investments in Debt and Equity Securities". SFAS No. 115 requires that all
debt and marketable equity securities be classified into three categories:
held to maturity, available for sale or trading. Securities classified as held
to maturity are carried at cost, adjusted for amortization of premiums and
accretion of discounts. Securities classified as available for sale are
carried at estimated fair value (market value) with the net unrealized gains
or losses being reflected as a separate component of retained earnings.
Trading securities are carried at estimated fair value with the net unrealized
gains or losses reflected in the consolidated statement of income. Management
determines the appropriate classification of debt securities at the time of
purchase. The Association adopted the Statement effective October 1, 1994. The
initial impact of the adoption of SFAS No. 115 was to increase retained
earnings by $382,000 on October 1, 1994, representing the unrealized fair
value appreciation on investment securities designated as available for sale,
net of applicable deferred Federal income taxes. Subsequent to October 1,
1994, the unrealized gains on securities designated as available for sale have
increased to a net unrealized gain of $496,000. The net increase was due to an
increase in the fair value of the Association's FHLMC stock and
reclassification of other securities as discussed in the following paragraph.
In November 1995, the Financial Accounting Standards Board issued a Special
Report (the Special Report) on implementing the provisions of SFAS No. 115.
The Special Report allowed the Association to reclassify securities, including
the held to maturity debt securities, without calling into question
management's intent to hold debt securities to maturity in the future.
Pursuant to these provisions, management reclassified $930,000 of corporate
debt securities and $13.9 million of mortgage-backed securities as available
for sale on December 31, 1995.
Page 8 of 17 Pages
<PAGE>
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (CONTINUED)
PEOPLES FEDERAL SAVINGS AND LOAN ASSOCIATION OF MASSILLON AND SUBSIDIARY
For the three and nine month periods ended
June 30, 1996 and 1995
4. Pending Legislative Changes
The Association's savings deposits are insured up to the applicable limits by
the Savings Association Insurance Fund (SAIF) of the Federal Deposit Insurance
Corporation (FDIC). The annual FDIC premium assessment has been .23% of
insured deposits of the Association. Congress is considering legislation to
require the FDIC to issue a special assessment to enable the SAIF to meet
certain reserve requirements and to reduce the annual premiums charged by the
SAIF. The assumed after-tax amount of this special assessment based on the
rate as currently predicted by the FDIC, of $.69 to $.71 per $100 of SAIF
deposits held at March 31, 1995, is approximately $299,000 to $308,000.
Congress is also considering legislation that would merge the SAIF and Bank
Insurance Fund (BIF) on January 1, 1998. The proposed legislation currently
provides for the elimination of the thrift charter or separate thrift
regulation under Federal law prior to the merger of the deposit insurance
funds. The Association would then be regulated as a bank under Federal law and
subject to the more restrictive activity limits imposed on national banks.
Upon separate legislation recently enacted into law, the Association is
required to recapture approximately $500,000 of its tax bad debt reserve for
which deferred taxes have previously been provided.
Page 9 of 17 Pages
<PAGE>
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (CONTINUED)
PEOPLES FEDERAL SAVINGS AND LOAN ASSOCIATION OF MASSILLON AND SUBSIDIARY
For the three and nine month periods ended
June 30, 1996 and 1995
5. Consummation of the Conversion to a Stock Savings and Loan Association
On October 16, 1995, the Board of Directors of Peoples Federal unanimously
adopted a Plan of Conversion to convert from a federally chartered mutual
savings and loan association to a federally chartered stock savings and loan
association with the concurrent formation of a newly chartered holding
company, Peoples Financial Corporation (the Corporation). The conversion will
be accomplished through amendment of the Association's federal charter and the
sale of the Corporation's common stock in an amount equal to the pro forma
market value of the Association after giving effect to the conversion. A
subscription offering of the shares of the Corporation's common stock to the
Association's members and to an employee stock benefit plan is being
conducted.
At the time of conversion, Peoples Federal will establish a liquidation
account in an amount equal to its regulatory capital as of June 30, 1996. The
liquidation account will be maintained for the benefit of eligible depositors
who continue to maintain their accounts at Peoples Federal after the
conversion. The liquidation account will be reduced annually to the extent
eligible depositors have reduced their qualifying deposits. Subsequent
increases will not restore an eligible account holder's interest in the
liquidation account. In the event of complete liquidation, and only in such
event, each eligible depositor will be entitled to receive a distribution from
the liquidation account in an amount proportionate to the current adjusted
qualifying balances for accounts then held. Peoples Federal may not pay
dividends that would reduce shareholders' equity below the required
liquidation account balance.
Under Office of Thrift Supervision (OTS) regulations, limitations have been
imposed on all "capital distributions", including cash dividends by savings
institutions. The regulation establishes a three-tiered system of
restrictions, with the greatest flexibility afforded to thrifts which are both
well-capitalized and given favorable qualitative examination ratings by the
OTS.
Conversion costs are being deferred and will be deducted from the proceeds of
the shares sold in the conversion. If the conversion is not completed, all
costs will be charged to expense. As of June 30, 1996, $250,000 of conversion
costs had been deferred.
Page 10 of 17 Pages
<PAGE>
MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION
AND RESULTS OF OPERATIONS
PEOPLES FEDERAL SAVINGS AND LOAN ASSOCIATION OF MASSILLON
Discussion of Financial Condition Changes from September 30, 1995 to June
30, 1996
The Association's assets totaled $78.3 million as of June 30, 1996, an
increase of $1.0 million, or 1.2%, from the September 30, 1995, total. The
increase in assets resulted primarily from an increase in cash and cash
equivalents of $4.2 million, or 224.1%, and an increase in net loans
receivable of $3.1 million, or 8.1%, from the September 30, 1995, levels. Such
increases were partially offset by decreases in investment securities of $3.5
million, or 40.0%, and decreases in mortgage-backed and related securities of
$3.1 million, or 11.8%.
Net loans receivable increased as of June 30, 1996 by $3.1 million, or 8.1%,
from the September 30, 1995, total. The increase is attributed to the
Association's pursuit of both mortgage and home equity loans during the
nine-month period and the opening of a new lending office in Canton, Ohio.
Deposits increased by $979,000, or 1.5%, from the September 30, 1995, amount.
The Association has recently offered deposits at interest rates designed to
maintain deposit levels while reducing the cost of funds.
The Association is required to meet each of three minimum capital standards
promulgated by the OTS, hereinafter described as the tangible capital
requirement, the core capital requirement and the risk-based capital
requirement. The tangible capital requirement provides for the maintenance of
retained earnings less all intangible assets equal to 1.5% of adjusted total
assets. The core capital requirement provides for the maintenance of tangible
capital plus certain forms of supervisory goodwill to equal 3% of adjusted
total assets, while the risk-based capital requirement mandates maintenance of
core capital plus general loan loss allowances equal to 8% of risk-weighted
assets as defined by OTS regulations. As of June 30, 1996, the Association's
tangible and core capital totaled $9.6 million, or 12.3%, which exceeded the
minimum requirements of $1.2 million and $2.3 million by $8.4 million and $7.2
million respectively. As of June 30, 1996, the Association's risk-based
capital was $9.8 million, or 31.5% of risk-weighted assets, exceeding the
minimum requirement by $7.3 million.
Page 11 of 17 Pages
<PAGE>
MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION
AND RESULTS OF OPERATIONS (CONTINUED)
PEOPLES FEDERAL SAVINGS AND LOAN ASSOCIATION OF MASSILLON
Comparison of Operating Results for the Nine-Month Periods Ended June 30, 1996
and 1995.
General
Net income for the nine months ended June 30, 1996, was $206,000, compared to
$319,000 for the same period in 1995, a decrease of $113,000, or 35.4%. The
primary reasons for the decrease in net income were a decrease in net interest
income of $142,000, or 8.2%, and an increase in the provision for loan losses
of $102,000, which were partially offset by a decrease in noninterest expense
of $77,000, and a decrease in income tax expense of $53,000.
Net Interest Income and Provision for Loan Losses
Interest income on loans for the nine months ended June 30, 1996, increased by
$36,000, or 1.5%, from the 1995 period. This increase resulted from an
increase in average portfolio balance outstanding partially offset by a
decrease in weighted average yield. Interest income on mortgage-backed and
related securities, investment securities and deposits increased by $80,000,
or 4.8%, from the 1995 period. This increase resulted from increases in both
average portfolio balances outstanding and weighted average yield.
Interest paid on deposits increased by $258,000, or 11.2%, for the nine months
ended June 30, 1996. This increase resulted from increases in both average
deposit balances and weighted average yield paid. The increase in the cost of
deposits generally reflects the overall increase in the general level of
interest rates in the economy during the 1996 period.
Page 12 of 17 Pages
<PAGE>
MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION
AND RESULTS OF OPERATIONS (CONTINUED)
PEOPLES FEDERAL SAVINGS AND LOAN ASSOCIATION OF MASSILLON
Comparison of Operating Results for the Nine-Month Periods Ended June 30, 1996
and 1995 (continued).
Noninterest Expense
Noninterest expense decreased by $77,000, or 6.0%, for the nine months ended
June 30, 1996, compared to the same period in 1995. Increased loan
originations resulted in deferred loan costs under SFAS No. 91 of $68,000 in
1996, compared to $4,000 in 1995. Other principal decreases in noninterest
expense were a $31,000, or 56.4% reduction in advertising and a $15,000, or
23.1% decline in data processing. The principal increases in noninterest
expense for 1996 over 1995 were $24,000, or 4.5%, in salaries and benefits and
$21,000, or 14.9%, in occupancy and equipment expense. Advertising costs were
higher in 1995 due to an expanded advertising program which was not continued
in 1996. Data processing costs were higher in 1995 due to contract termination
fees charged by the Association's former service bureau. Salaries and benefit
costs increased in 1996 due to the hiring of additional employees and normal
salary increases. Occupancy costs increased in 1996 due to depreciation on new
premises and equipment required by opening of the new loan office and use of a
new data processing service bureau, and higher than normal premises
maintenance costs.
Income Tax Expense
Income tax expense is based on income before tax for the nine months ended
June 30, 1996 and 1995. The effective tax rate did not change significantly
period to period.
Page 13 of 17 Pages
<PAGE>
MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION
AND RESULTS OF OPERATIONS (CONTINUED)
PEOPLES FEDERAL SAVINGS AND LOAN ASSOCIATION OF MASSILLON
Comparison of Operating Results for the Three-Month Periods Ended June 30,
1996 and 1995.
General
Net income for the three months ended June 30, 1996, was $94,000, compared to
$112,000 for the same period in 1995, a decrease of $18,000, or 16.1%. The
primary reasons for the decrease in net income were a reduction in net
interest income of $10,000, or 1.7%, an increase in noninterest expense of
$22,000, and a decline in income tax expense of $9,000.
Net Interest Income and Provision for Loan Losses
Interest income on loans for the three months ended June 30, 1996, increased
by $21,000, or 2.6%, from the 1995 period. This increase resulted from an
increase in average portfolio balance outstanding, partially offset by a
decrease in weighted average yield. Interest income on mortgage-backed and
related securities, investment securities and deposits decreased by $10,000,
or 1.7%, from the 1995 period. This decrease resulted from a reduction in
average portfolio balances outstanding, and was partially offset by an
increase in weighted average yield.
Interest paid on deposits increased by $21,000, or 2.6%, for the three months
ended June 30, 1996. This increase resulted from growth in average deposit
balances and a nominal increase in weighted average cost of funds.
Page 14 of 17 Pages
<PAGE>
MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION
AND RESULTS OF OPERATIONS (CONTINUED)
PEOPLES FEDERAL SAVINGS AND LOAN ASSOCIATION OF MASSILLON
Comparison of Operating Results for the Three-month Periods Ended June 30,
1996 and 1995 (continued).
Noninterest Expense
Noninterest expense increased by $22,000, or 5.4%, for the three months ended
June 30, 1996, compared to the same period in 1995. Principal increases in
noninterest expense for 1996 over 1995 were $29,000, or 18.2% in salaries and
benefits, $10,000, or 52.6% in directors' fees and $5,000, or 9.8%, in
occupancy costs. The principal decreases in noninterest expense were $19,000,
or 79.2%, in advertising and $6,000, or 25.0%, in data processing. Salaries
and benefit costs increased in 1996 due to the hiring of additional employees
and normal salary increases. Directors' fees increased in 1996 due to the
holding of special meetings. Occupancy costs increased in 1996 primarily due
to depreciation expense on asset additions. Advertising costs were higher in
1995 due to an expanded advertising program which was not continued in 1996.
Data processing costs were higher in 1995 due to contract termination fees
charged by the Association's former service bureau.
Income Tax Expense
Income tax expense is based on income before tax for the nine months ended
June 30, 1996 and 1995. The effective tax rate did not change significantly
from period to period.
Page 15 of 17 Pages
<PAGE>
PART II
PEOPLES FINANCIAL CORPORATION
ITEM 1. Legal Proceedings
Not applicable
ITEM 2. Changes in Securities
In May, 1996, the Articles of Incorporation of the registrant were
amended to eliminate cumulative voting.
ITEM 3. Defaults Upon Senior Securities
Not applicable
ITEM 4. Submission of Matters to a Vote of Security Holders
The sole shareholder of the registrant approved by an action
in writing dated May 6, 1996, an amendment to the Articles of
Incorporation increasing the authorized shares to 6,000,000
common shares and 1,000,000 preferred shares and eliminating
cumulative voting.
ITEM 5. Other Materially Important Events
Not applicable
ITEM 6. Exhibits and Reports on Form 8-K
Not applicable
Page 16 of 17 Pages
<PAGE>
SIGNATURES
PEOPLES FINANCIAL CORPORATION
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.
Date: September 6, 1996 By: /s/Paul von Gunten
_______________________________
Paul von Gunten, President and
Chief Executive Officer
Date: September 6, 1996 By: /s/James R. Rinehart
_______________________________
James R. Rinehart, Treasurer
Page 17 of 17 Pages
<TABLE> <S> <C>
<ARTICLE> 9
<MULTIPLIER> 1000
<S> <C>
<PERIOD-TYPE> 9-MOS
<FISCAL-YEAR-END> SEP-30-1996
<PERIOD-START> OCT-01-1995
<PERIOD-END> JUN-30-1996
<CASH> 285
<INT-BEARING-DEPOSITS> 5,756
<FED-FUNDS-SOLD> 0
<TRADING-ASSETS> 0
<INVESTMENTS-HELD-FOR-SALE> 14,946
<INVESTMENTS-CARRYING> 13,219
<INVESTMENTS-MARKET> 13,374
<LOANS> 41,090
<ALLOWANCE> 193
<TOTAL-ASSETS> 78,252
<DEPOSITS> 67,543
<SHORT-TERM> 0
<LIABILITIES-OTHER> 629
<LONG-TERM> 0
0
0
<COMMON> 0
<OTHER-SE> 10,080
<TOTAL-LIABILITIES-AND-EQUITY> 78,252
<INTEREST-LOAN> 2,393
<INTEREST-INVEST> 1,565
<INTEREST-OTHER> 186
<INTEREST-TOTAL> 4,144
<INTEREST-DEPOSIT> 2,555
<INTEREST-EXPENSE> 2,555
<INTEREST-INCOME-NET> 1,589
<LOAN-LOSSES> 105
<SECURITIES-GAINS> 0
<EXPENSE-OTHER> 1,206
<INCOME-PRETAX> 297
<INCOME-PRE-EXTRAORDINARY> 0
<EXTRAORDINARY> 0
<CHANGES> 0
<NET-INCOME> 206
<EPS-PRIMARY> 0
<EPS-DILUTED> 0
<YIELD-ACTUAL> 7.30
<LOANS-NON> 596
<LOANS-PAST> 0
<LOANS-TROUBLED> 0
<LOANS-PROBLEM> 0
<ALLOWANCE-OPEN> 80
<CHARGE-OFFS> 0
<RECOVERIES> 8
<ALLOWANCE-CLOSE> 193
<ALLOWANCE-DOMESTIC> 193
<ALLOWANCE-FOREIGN> 0
<ALLOWANCE-UNALLOCATED> 0
</TABLE>
