<PAGE> 1
SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 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, 1996
-----------------------------
or
[ ] TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE
SECURITIES EXCHANGE ACT OF 1934
Commission File Number 2 - 98268
------------------------------
PEOPLES FINANCIAL CORPORATION
- --------------------------------------------------------------------------------
(Exact name of registrant as specified in its charter)
Mississippi 64-0709834
- --------------------------------------------------------------------------------
(State or other jurisdiction of (I.R.S. Employer Identification No.)
incorporation or organization)
Lameuse and Howard Avenues, Biloxi, Mississippi 39533
- --------------------------------------------------------------------------------
(Address of principal executive offices) (Zip Code)
(601) 435-5511
- --------------------------------------------------------------------------------
(Registrant's telephone number, including area code)
Indicate by check mark whether the registrant (1) has filed all reports required
to be filed by Section 13 or 15(d) of the Securities Exchange Act of 1934 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
-------- --------
Indicate the number of shares outstanding of each of the issuer's classes of
common stock, as of the last practicable date.
Peoples Financial Corporation has only one class of common stock authorized. At
May 1, 1996, there were 1,500,000 shares of $1 par value common stock
authorized, and 369,084 shares issued and outstanding.
Page 1 of 17
<PAGE> 2
PART I
FINANCIAL INFORMATION
PEOPLES FINANCIAL CORPORATION AND SUBSIDIARIES
CONSOLIDATED BALANCE SHEETS
(Unaudited)
<TABLE>
<CAPTION>
March 31, December 31, and March 31, 1996 1995 1995
- ----------------------------------------------------------------------------------------------------------------
<S> <C> <C> <C>
ASSETS
Cash and due from banks $ 30,812,399 $ 24,220,348 $ 17,457,841
Held to maturity securities, market
value of $161,185,000 - March 31, 1996;
$167,384,000 - December 31, 1995;
$152,187,000 - March 31, 1995 160,174,406 165,142,083 152,886,774
Available for sale securities, at
market value 64,236,336 20,829,655 198,083
Federal funds sold 2,400,000 -0- 18,450,000
Loans 215,028,761 224,069,011 221,730,386
Less: Unearned income 25,406 22,531 16,469
Allowance for loan losses 4,579,984 4,352,967 4,895,601
-----------------------------------------------------------------
Loans, net 210,423,371 219,693,513 216,818,316
Bank premises and equipment, net of
accumulated depreciation of
$6,418,000 - March 31, 1996;
$6,171,000 - December 31, 1995;
and $5,638,000 - March 31, 1995 8,734,040 8,789,642 8,609,271
Other real estate 716,301 726,838 935,948
Accrued interest receivable 3,381,216 3,169,666 3,048,293
Other assets 3,214,661 2,919,601 2 ,900,023
Intangible assets 734,367 813,825 1,052,199
-----------------------------------------------------------------
TOTAL ASSETS $ 484,827,097 $ 446,305,171 $ 422,356,748
=================================================================
</TABLE>
Page 2 of 17
<PAGE> 3
PEOPLES FINANCIAL CORPORATION AND SUBSIDIARIES
CONSOLIDATED BALANCE SHEETS (Continued)
(Unaudited)
<TABLE>
<CAPTION>
March 31, December 31, and March 31, 1996 1995 1995
- -----------------------------------------------------------------------------------------------------------
<S> <C> <C> <C>
LIABILITIES & SHAREHOLDERS' EQUITY
LIABILITIES:
Deposits:
Demand, non-interest bearing $ 69,898,179 $ 82,790,093 $ 74,600,843
Savings and demand, interest
bearing 209,835,286 155,187,526 212,087,271
Time, $100,000 or more 91,034,555 84,117,293 31,168,352
Other time deposits 54,874,607 54,076,823 51,749,744
------------------------------------------------------------
Total deposits 425,642,627 376,171,735 369,606,210
Accrued interest payable 1,152,239 1,139,768 511,116
Federal funds purchased -0- 12,150,000 -0-
Notes payable 391,097 437,520 576,578
Other liabilities 2,190,504 1,823,743 1,998,346
------------------------------------------------------------
TOTAL LIABILITIES 429,376,467 391,722,766 372,692,250
SHAREHOLDERS' EQUITY:
Common Stock, $1 par value, 1,500,000
shares authorized, 369,084
shares issued and outstanding at
March 31, 1996, December 31, 1995
and March 31, 1995, after giving
retroactive effect to two for one
stock split effective November 22, 1995 369,084 369,084 369,084
Surplus 49,295,346 49,295,346 43,545,346
Undivided profits 6,497,620 5,075,542 6,081,318
Additional minimum liability in
excess of prior service cost,
net of tax (294,512) (294,512) -0-
Unrealized gain (loss) on available
for sale securities, net of tax (260,658) 336,945 -0-
Note payable offset associated with
employee stock ownership plan (156,250) (200,000) (331,250)
-------------------------------------------------------------
TOTAL SHAREHOLDERS' EQUITY 55,450,630 54,582,405 49,664,498
-------------------------------------------------------------
TOTAL LIABILITIES AND SHAREHOLDERS'
EQUITY $ 484,827,097 $ 446,305,171 $ 422,356,748
=============================================================
</TABLE>
See Selected Notes to Consolidated Financial Statements.
Page 3 of 17
<PAGE> 4
PEOPLES FINANCIAL CORPORATION AND SUBSIDIARIES
CONSOLIDATED STATEMENTS OF INCOME
(Unaudited)
<TABLE>
<CAPTION>
For the Quarters Ended March 31, 1996 1995
- -----------------------------------------------------------------------------------------------------
<S> <C> <C>
INTEREST INCOME:
Interest and fees on loans $ 5,160,824 $ 5,064,621
Interest and dividends on investments:
U. S. Treasury 2,126,460 1,911,898
U. S. Government agencies and corporations 727,108 147,804
States and political subdivisions 97,430 68,898
Other investments 17,918 4,711
Interest on federal funds sold 241,123 186,671
-----------------------------------------
TOTAL INTEREST INCOME 8,370,863 7,384,603
-----------------------------------------
INTEREST EXPENSE:
Time deposits of $100,000 or more 1,272,643 457,704
Other deposits 2,411,219 2,258,060
Mortgage indebtedness 3,182 3,322
Federal funds purchased 27,717 13,395
-----------------------------------------
TOTAL INTEREST EXPENSE 3,714,761 2,732,481
-----------------------------------------
NET INTEREST INCOME 4,656,102 4,652,122
Provision for losses on loans -0- -0-
NET INTEREST INCOME AFTER PROVISION FOR LOSSES -----------------------------------------
ON LOANS $ 4,656,102 $ 4,652,122
-----------------------------------------
</TABLE>
Page 4 of 17
<PAGE> 5
PEOPLES FINANCIAL CORPORATION AND SUBSIDIARIES
CONSOLIDATED STATEMENTS OF INCOME (Continued)
(Unaudited)
<TABLE>
<CAPTION>
For the Quarters Ended March 31, 1996 1995
- -----------------------------------------------------------------------------------------------------
<S> <C> <C>
OTHER OPERATING INCOME:
Trust department income and fees $ 227,617 $ 269,199
Service charges on deposit accounts 924,241 665,057
Other service charges, commissions and fees 59,283 66,881
Other income 135,059 116,194
---------------------------------------
TOTAL OTHER OPERATING INCOME 1,346,200 1,117,331
---------------------------------------
OTHER OPERATING EXPENSE:
Salaries and employee benefits 1,940,426 1,693,665
Net occupancy 180,227 187,257
Equipment rentals, depreciation and
maintenance 407,602 378,961
Other expense 1,139,256 1,181,130
---------------------------------------
TOTAL OTHER OPERATING EXPENSE 3,667,511 3,441,013
---------------------------------------
INCOME BEFORE INCOME TAXES 2,334,791 2,328,440
Income taxes 525,175 779,678
---------------------------------------
NET INCOME $ 1,809,616 $ 1,548,762
=======================================
</TABLE>
See Selected Notes to Consolidated Financial Statements.
Page 5 of 17
<PAGE> 6
PEOPLES FINANCIAL CORPORATION AND SUBSIDIARIES
CONSOLIDATED STATEMENTS OF SHAREHOLDERS' EQUITY
(Unaudited)
<TABLE>
<CAPTION>
Additional Unrealized Gain
minimum liability (Loss) on
# of in excess of Available for
CommonS Common Undivided prior service Sale Securities,
hares Stock Surplus Profits cost, net of tax Net of Tax
------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C> <C> <C>
BALANCE, JANUARY 1, 1995, AS
PREVIOUSLY REPORTED 184,542 $184,542 $43,729,888 $4,901,640 $ -0- $ -0-
Two-for-one stock split in
1995 184,542 184,542 (184,542)
------------------------------------------------------------------------------------------
Balance, January 1, 1995, as
restated 369,084 369,084 43,545,346 4,901,640 -0- -0-
Net income 1,548,762
Cash dividends, common
($1.00 per share) (369,084)
Reduction to note payable
offset associated with
esop
Balance, March 31, 1995 ---------------------------------------------------------------------------------------
369,084 $369,084 $43,545,346 $6,081,318 $ - 0- $ - 0-
=======================================================================================
BALANCE, JANUARY 1, 1996 369,084 $369,084 $49,295,346 $5,075,542 $(294,512) $336,945
Net income 1,809,616
Cash dividends, common
($1.05 per share) (387,538)
Net change in unrealized
gain (loss) on available
for sale securities,
net of tax (597,603)
Reduction to note payable
offset associated with esop
---------------------------------------------------------------------------------------
Balance, March 31, 1996 369,084 $369,084 $49,295,346 $6,497,620 $(294,512) $ (260,658)
=======================================================================================
</TABLE>
<TABLE>
<CAPTION>
Note Payable
Offset
Associated
With ESOP Total
----------------------------
<S> <C> <C>
BALANCE, JANUARY 1, 1995, AS
PREVIOUSLY REPORTED $ (375,000) $ 48,441,070
----------------------------
Two-for-one stock split in
1995
Balance, January 1, 1995, as
restated (375,000) 48,441,070
Net income 1,548,762
Cash dividends, common
($1.00 per share) (369,084)
Reduction to note payable
offset associated with
esop 43,750 43,750
Balance, March 31, 1995 ---------------------------
$ (331,250) $ 49,664,498
===========================
BALANCE, JANUARY 1, 1996 $ (200,000) $54,582,405
Net income 1,809,616
Cash dividends, common
($1.05 per share) (387,538)
Net change in unrealized
gain (loss) on available
for sale securities,
net of tax (597,603)
Reduction to note payable
offset associated with
esop 43,750 43,750
---------------------------
Balance, March 31, 1996 $ (156,250) $55,450,630
===========================
</TABLE>
See Selected Notes to Consolidated Financial Statements.
Page 6 of 17
<PAGE> 7
PEOPLES FINANCIAL CORPORATION AND SUBSIDIARIES
CONSOLIDATED STATEMENTS OF CASH FLOWS
(Unaudited)
<TABLE>
<CAPTION>
For the Quarters Ended March 31, 1996 1995
- --------------------------------------------------------------------------------------------------------
<S> <C> <C>
CASH FLOWS FROM OPERATING ACTIVITIES:
Net income $ 1,809,616 $ 1,548,762
Adjustments to reconcile net income to net
cash provided by operating activities:
Proceeds from sales of other real estate 1,700 -0-
Gain on sales of other real estate (650) -0-
Depreciation and amortization 334,458 334,458
Provision for losses on other real estate 9,487 10,578
Changes in assets and liabilities:
Accrued interest receivable (211,550) 273,921
Other assets 153,394 (347,933)
Accrued interest payable 12,471 60,960
Other liabilities 366,761 613,896
------------------------------------------
NET CASH PROVIDED BY OPERATING ACTIVITIES 2,475,687 2,494,642
CASH FLOWS FROM INVESTING ACTIVITIES: ------------------------------------------
Proceeds from maturities of held to maturity
securities 53,947,481 25,006,580
Investment in held to maturity securities (48,979,804) (18,395,145)
Investment in available for sale securities (44,312,014) -0-
Loans, net decrease 9,270,142 1,110,057
Acquisition of premises and equipment (199,398) (227,462)
Federal funds sold (2,400,000) (18,450,000)
Other assets (140,724) (4,088)
------------------------------------------
NET CASH USED IN INVESTING ACTIVITIES $ (32,814,317) $ (10,960,058)
------------------------------------------
</TABLE>
Page 7 of 17
<PAGE> 8
PEOPLES FINANCIAL CORPORATION AND SUBSIDIARIES
CONSOLIDATED STATEMENTS OF CASH FLOWS (Continued)
(Unaudited)
<TABLE>
<CAPTION>
For the Quarters Ended March 31, 1996 1995
- ---------------------------------------------------------------------------------------------------------
<S> <C> <C>
CASH FLOWS FROM FINANCING ACTIVITIES:
Demand and savings deposits, net increase $ 41,755,846 $ 22,173,527
Time deposits, net increase (decrease) 7,715,046 (757,732)
Principal payments on notes (2,673) (2,534)
Cash dividends (387,538) (369,084)
Federal funds purchased, net decrease (12,150,000) (15,900,000)
-------------------------------------------
NET CASH PROVIDED BY FINANCING ACTIVITIES 36,930,681 5,144,177
-------------------------------------------
NET INCREASE (DECREASE) IN CASH AND CASH
EQUIVALENTS 6,592,051 (3,321,239)
CASH AND CASH EQUIVALENTS, BEGINNING OF PERIOD 24,220,348 20,779,080
-------------------------------------------
CASH AND CASH EQUIVALENTS, END OF PERIOD $ 30,812,399 $ 17,457,841
===========================================
</TABLE>
See Selected Notes to Consolidated Financial Statements.
Page 8 of 17
<PAGE> 9
PEOPLES FINANCIAL CORPORATION AND SUBSIDIARIES SELECTED
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
For the Quarters Ended March 31, 1996 and 1995
1. The accompanying unaudited consolidated financial statements have been
prepared with the accounting policies in effect as of December 31, 1995 as set
forth in the Notes to the Consolidated Financial Statements of Peoples
Financial Corporation and Subsidiaries (the Company). In the opinion of
Management, all adjustments necessary for a fair presentation of the condensed
consolidated financial statements have been included and are of a normal
recurring nature.
The accompanying unaudited consolidated financial statements have been prepared
also in accordance with the instructions to Form 10-Q and Rule 10-01 of
Regulations S-X. Accordingly, they do not include all of the information and
footnotes required by generally accepted accounting principles for complete
financial statements.
2. The results of operations for the quarter ended March 31, 1996, are not
necessarily indicative of the results to be expected for the full year.
3. Per share data is based on the weighted average shares of common stock
outstanding of 369,084 for the quarters ended March 31, 1996 and 1995.
4. At March 31, 1996 and 1995, the total recorded investment in impaired loans
amounted to $1,173,000 and $2,138,000, respectively. The amount of that
recorded investment in impaired loans for which there is a related allowance
for loan losses and the amount of that allowance was $98,000 and $1,232,000 at
March 31, 1996 and 1995, respectively. The amount of that recorded
investment in impaired loans for which there was no related allowance for loan
losses was $1,075,000 and $906,000 at March 31, 1996 and 1995, respectively.
At March 31, 1996, the average recorded investment in impaired loans was
$1,197,000. During the first quarter of 1996, the Company recognized $16,000
in interest income on impaired loans. During the first quarter of 1996, the
Company received $20,000 in interest payments on impaired loans.
5. Transactions in the allowance for loan losses were as follows:
<TABLE>
<S> <C>
Balance, January 1, 1996 $4,352,967
Recoveries 244,086
Loans charged off (17,069)
----------
Balance, March 31, 1996 $4,579,984
==========
</TABLE>
6. At March 31, 1996 and 1995, renegotiated and restructured loans amounted
to $2,391,000 and $2,473,000. The Company recognized $26,000 and $22,000 in
interest income on these loans during the quarters ended March 31, 1996 and
1995, respectively. The amount of interest that would have been recognized
during these quarters under the original terms of the loan agreements was
$51,000 and $54,000.
Page 9 of 17
<PAGE> 10
7. The Company has defined cash and cash equivalents to include cash and due
from banks. The Company paid $3,702,000 and $2,672,000 for the quarters ended
March 31, 1996 and 1995, respectively, for interest on deposits and borrowings.
No income tax payments were made during the first quarter of 1996 and income
tax payments totaled $236,000 for the quarter ended March 31, 1995. No loans
were transferred to other real estate during the quarters ended March 31, 1996
and 1995.
Item 2 - Management's Discussion and Analysis of Financial Condition and
Results of Operations
The following presents Management's discussion and analysis of the consolidated
financial condition and results of operations of Peoples Financial Corporation
and Subsidiaries (the Company) for the quarters ended March 31, 1996 and 1995.
These comments highlight the significant events and should be considered in
combination with the Consolidated Financial Statements included in this report
on Form 10-Q.
OVERVIEW
The significant developments during the first quarter of 1996 were the dramatic
increases in securities and deposits. The entire securities portfolio
increased $71 million at March 31, 1996, as compared with March 31, 1995. This
increase resulted primarily from the $56 million increased in deposits at March
31, 1996, as compared with March 31, 1995. The following schedule compares
financial highlights (in thousands) for the quarters ended March 31, 1996 and
1995:
<TABLE>
<CAPTION>
For the quarters ended March 31, 1996 1995
- ------------------------------------------------------------------------------------------------------
<S> <C> <C>
Net income per share $ 5 $ 4
Book value per share $ 150 $ 135
Return on average total assets 1.54% 1.47%
Return on average shareholders' equity 13.16% 12.63%
Allowance for loan losses as a % of
loans, net of unearned discount 2.13% 2.21%
</TABLE>
FINANCIAL CONDITION
HELD TO MATURITY SECURITIES
The Company has structured its portfolio during the last 24 months to
strengthen its liquidity position. These securities generally have maturities
of 3 months, 6 months, and 2 years. There were no realized gains or losses on
these investments during the quarters ended March 31, 1996 and 1995. Gross
unrealized gains for held to maturity securities were $1,487,000 and $1,082,000
and gross unrealized losses for held to maturity securities were $476,000 and
$1,782,000 for the quarters ended March 31, 1996 and 1995, respectively. The
following schedule reflects the mix of the held to maturity investment
portfolio at March 31, 1996 and 1995:
Page 10 of 17
<PAGE> 11
<TABLE>
<CAPTION>
March 31, 1996 1995
- --------------------------------------------------------------------------------------------------------
Amount % Amount %
- --------------------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C>
U. S. Treasury securities $138,241,037 86.30% $134,233,787 87.80%
U. S. Government
agencies 17,484,636 10.90% 14,051,416 9.20%
States and political
subdivisions 4,448,733 2.80% 4,601,571 3.00%
-----------------------------------------------------------------
Totals $160,174,406 100.00% $152,886,774 100.00%
=================================================================
</TABLE>
AVAILABLE FOR SALE SECURITIES
Available for sale securities increased significantly during the first quarter
of 1996 to $ 64 million. Until September 30, 1995, the Company had invested
primarily in held to maturity securities. This change resulted from the
management of the Company's liquidity position. Gross unrealized gains were
$506,000 and gross unrealized losses were $900,000 at March 31, 1996. There
were no unrealized gains or losses at March 31, 1995. The following schedule
reflects the mix of available for sale securities at March 31, 1996 and 1995:
<TABLE>
<CAPTION>
March 31, 1996 1995
Amount % Amount %
<S> <C> <C> <C> <C>
--------------------------------------------------------------------
U. S. Treasuries $ -
$ 6,871,350 10.70% 0- -0-
U. S. Government
agencies 56,668,154 88.20% -0- -0-
Other securities 696,832 1.10% 198,083 100.0%
--------------------------------------------------------------------
Totals $ 64,236,336 100.0% $198,083 100.0%
====================================================================
</TABLE>
FEDERAL FUNDS SOLD
Federal funds sold have decreased $16 million at March 31, 1996, as compared
with March 31, 1995. This fluctuation is directly related to the liquidity
needs of the bank subsidiary.
DEPOSITS
Total deposits have increased $56 million at March 31, 1996, as compared with
March 31, 1995. Significant increases or decreases in total deposits from
quarter to quarter are anticipated by Management as customers in the casino
industry and county and municipal areas reallocate their resources
periodically. As discussed above, the Company has managed its funds including
planning the timing of investment maturities so as to achieve appropriate
liquidity.
Page 11 of 17
<PAGE> 12
SHAREHOLDERS' EQUITY AND CAPITAL ADEQUACY
Strength, security and stability have been the hallmark of the Company since
its founding in 1985 and of its bank subsidiary since its founding in 1896. A
strong capital foundation is fundamental to the continuing prosperity of the
Company and the security of its customers and shareholders. One measure of
capital adequacy is the primary capital ratio which was 12.77% at March 31,
1996, as compared with 12.91% at March 31, 1995. These ratios are well above
the regulatory minimum of 6.00%. Management continues to emphasize the
importance of maintaining the appropriate capital levels of the Company.
RESULTS OF OPERATIONS
NET INTEREST INCOME
Net interest income, the amount by which interest income on loans, investments
and other interest earning assets exceeds interest expense on deposits and
other borrowed funds, is the single largest component of the Company's income.
Management's objective is to provide the largest possible amount of income
while balancing interest rate, credit, liquidity and capital risk.
Net interest income increased $4,000 for the first quarter of 1996 as compared
with the first quarter of 1995. Total interest income increased $986,000 or
13% for the quarter ended March 31, 1996, as compared with the quarter ended
March 31, 1995. Total interest expense increased $982,000 or 36% for the
quarter ended March 31, 1996, as compared with quarter ended March 31, 1995.
The following schedule summarizes net interest earnings and net yield on
interest earning assets:
Net Interest Earnings and Net Yield on Interest Earning Assets
<TABLE>
<CAPTION>
Quarters Ended March 31, (In
thousands, except percentages) 1996 1995
- --------------------------------------------------------------------------------------------------------
<S> <C> <C>
Total interest income (1) $ 8,421 $ 7,421
Total interest expense 3,715 2,732
--------------------------------------
Net interest earnings $ 4,706 $ 4,689
======================================
Net yield on interest earning assets 4.31% 4.87%
======================================
</TABLE>
(1) All interest earned is reported on a taxable equivalent basis using a tax
rate of 34% in 1996 and 1995.
The schedule on page 13 provides an analysis of the change in total interest
income and total interest expense for the quarters ended March 31, 1996 and
1995. These changes are generally attributable to a change in volume and/or a
change in the applicable rates. The loosening by the Federal Reserve System in
the two years has lead to a general increase in prime lending rates as well as
yields earned on investments and rates paid on funds. The prime lending rate
for loans fluctuated periodically from 8.50% at January 1, 1995 to 8.25% at
March 31, 1996.
Page 12 of 17
<PAGE> 13
Analysis of Changes in Interest Income and Interest Expense
(In Thousands)
<TABLE>
<CAPTION>
Attributable To:
--------------------------------------
For the For the
Quarter Quarter
Ended Ended
March 31, March 31, Increase Rate/
1996 1995 (Decrease) Volume Rate Volume
-------------------------------------------------------------------------------
<S> <C> <C> <C> <C> <C> <C>
INTEREST
INCOME: (1)
Loans (2) (3) $ 5,161 $ 5,065 $ 96 $ (5) $ 102 $ (1)
Federal funds
sold 241 187 54 64 (7) (3)
Held to maturity:
Taxable securities 2,208 2,060 148 69 76 3
Non-taxable securities 148 104 44 (3) 48 (1)
Available for
sale:
Taxable
securities 645 -0- 645 645 -0- -0-
Other securities 18 5 13 11 1 1
------------------------------------------------------------------------------
Total $ 8,421 $ 7,421 $ 1,000 $ 781 $ 220 $ (1)
==============================================================================
INTEREST
EXPENSE:
Savings and
negotiable
interest
bearing
deposits $ 1,605 $ 1,569 $ 36 $ (54) $ 94 $ (4)
Time deposits 2,079 1,147 932 899 18 15
Federal funds
purchased 28 13 15 5 7 3
Mortgage
indebtedness 3 3 -0- (1) 1 -0-
------------------------------------------------------------------------------
Total $ 3,715 $ 2,732 $ 983 $ 849 $ 120 $ 14
==============================================================================
</TABLE>
(1) All interest earned is reported on a taxable equivalent basis using a tax
rate of 34% in 1996 and 1995.
(2) Loan fees are included in these figures.
(3) Includes nonaccrual loans.
Page 13 of 17
<PAGE> 14
PROVISION FOR LOAN LOSSES
The Company has not charged a provision for loan losses to operating expense
since 1993. The Company carefully monitors the quality and volume of its loan
portfolio. Based on current conditions, Management feels that the allowance
for loan losses is adequate and does not anticipate any provision for loan
losses during 1996.
SERVICE CHARGES ON DEPOSIT ACCOUNTS
Service charges on deposit accounts have increased $260,000 for the quarter
ended March 31, 1996, as compared with the quarter ended March 31, 1995, as a
result of fees earned on automatic teller machines (ATMs). These fees have
grown due to the increased number of ATMs in service as well as the
implementation of surcharge fees on ATM transactions at casinos beginning in
November 1993 and an increase in surcharge fees on April 1, 1995.
SALARIES AND EMPLOYEE BENEFITS
Salaries and employee benefits have increased $247,000 for the quarter ended
March 31, 1996, as compared with the quarter ended March 31, 1995, as a result
of the increased number of employees in 1996 as well as an increase in health
insurance premiums during the first quarter of 1996.
LIQUIDITY
Liquidity represents the Company's ability to adequately provide funds to
satisfy demands from depositors, borrowers and other commitments by either
converting assets to cash or accessing new or existing sources of funds.
Management monitors these funds requirements in such a manner as to satisfy
these demands and provide the maximum earnings on its earning assets.
Deposits, payments of principal and interest on loans, proceeds from maturities
of held to maturity securities and earnings on held to maturity securities are
the principal sources of funds for the Company. At March 31, 1996, cash and
due from banks, investment securities and federal funds sold were 61% of total
deposits, as compared with 51% at March 31, 1995.
.
Page 14 of 17
<PAGE> 15
PART II
OTHER INFORMATION
Item 4 - Submission of Matters to a Vote of Security Holders
(a) The Annual Meeting of Shareholders of the Company was held on
April 8, 1996.
(b) The following five directors were elected at the meeting to
hold office for a term of one year:
<TABLE>
<CAPTION>
Approve Disapprove
--------------------------
<S> <C> <C>
William A. Barq 320,127 2,526
Andy Carpenter 321,957 1,920
L. V. Pringle, III 320,127 2,526
Chevis C. Swetman 321,912 1,956
F. Walker Tucei 319,977 2,646
</TABLE>
Shares not voted amounted to 45,420.
Mr. Pringle died on April 30, 1996. The Board will elect an
individual to complete the remainder of his one year term at its next
regularly scheduled meeting on May 22, 1996.
Item 5 - Other Information
At a meeting held on April 8, 1996, the Board of Directors of the Company
approved the following slate of officers:
<TABLE>
<S> <C>
Chevis C. Swetman President and Chief Executive Officer
Andy Carpenter Executive Vice President
Jeannette E. Romero First Vice President
Thomas J. Sliman Second Vice President
Robert M. Tucei Vice President and Secretary
David M. Hughes Vice President
Lauri A. Wood Chief Financial Officer and Controller
</TABLE>
Page 15 of 17
<PAGE> 16
Item 6 - Exhibits and Reports on Form 8-K
(a) Exhibits
Schedule 27 - Financial Data Schedule
(b) Reports on Form 8-K
None.
Page 16 of 17
<PAGE> 17
SIGNATURES
Pursuant to the requirement of Section 13 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.
PEOPLES FINANCIAL CORPORATION
(Registrant)
Date: May 8, 1996
--------------------------
By: /s/ Chevis C. Swetman
--------------------------
Chevis C. Swetman
Chairman, President and Chief Executive Officer
Date: May 8, 1996
--------------------------
By: /s/ Lauri A. Wood
--------------------------
Lauri A. Wood
Chief Financial Officer and Controller
(principal financial and accounting officer)
Page 17 of 17
<PAGE> 18
EXHIBIT INDEX
<TABLE>
<CAPTION>
EXHIBIT
NUMBER DESCRIPTION
- ------- -----------
<S> <C>
27 Schedule 27 - Financial Data Schedule
</TABLE>
<TABLE> <S> <C>
<ARTICLE> 9
<S> <C>
<PERIOD-TYPE> 3-MOS
<FISCAL-YEAR-END> DEC-31-1996
<PERIOD-END> MAR-31-1996
<CASH> 30,812,399
<INT-BEARING-DEPOSITS> 0
<FED-FUNDS-SOLD> 2,400,000
<TRADING-ASSETS> 0
<INVESTMENTS-HELD-FOR-SALE> 64,236,336
<INVESTMENTS-CARRYING> 160,174,406
<INVESTMENTS-MARKET> 161,185,000
<LOANS> 215,028,761
<ALLOWANCE> 4,579,984
<TOTAL-ASSETS> 484,827,097
<DEPOSITS> 425,642,627
<SHORT-TERM> 0
<LIABILITIES-OTHER> 2,190,504
<LONG-TERM> 391,097
<COMMON> 369,084
0
0
<OTHER-SE> 55,081,546
<TOTAL-LIABILITIES-AND-EQUITY> 484,827,097
<INTEREST-LOAN> 5,160,863
<INTEREST-INVEST> 2,968,916
<INTEREST-OTHER> 241,123
<INTEREST-TOTAL> 8,370,863
<INTEREST-DEPOSIT> 3,683,862
<INTEREST-EXPENSE> 3,714,761
<INTEREST-INCOME-NET> 4,656,102
<LOAN-LOSSES> 0
<SECURITIES-GAINS> 0
<EXPENSE-OTHER> 3,667,511
<INCOME-PRETAX> 2,334,791
<INCOME-PRE-EXTRAORDINARY> 2,334,791
<EXTRAORDINARY> 0
<CHANGES> 0
<NET-INCOME> 1,809,616
<EPS-PRIMARY> 5
<EPS-DILUTED> 5
<YIELD-ACTUAL> 4.31
<LOANS-NON> 530,000
<LOANS-PAST> 3,610,000
<LOANS-TROUBLED> 2,391,000
<LOANS-PROBLEM> 0
<ALLOWANCE-OPEN> 4,352,967
<CHARGE-OFFS> 17,069
<RECOVERIES> 244,086
<ALLOWANCE-CLOSE> 4,579,984
<ALLOWANCE-DOMESTIC> 4,579,984
<ALLOWANCE-FOREIGN> 0
<ALLOWANCE-UNALLOCATED> 250,000
</TABLE>
