<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, 1997
-------------------------------
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
incorporation or organization) Identification No.)
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, 1997, there were
1,500,000 shares of $1 par value common stock authorized, and 738,168 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, 1997 1996 1996
- ------------------------------------------------ ------------ ------------ ------------
<S> <C> <C> <C>
ASSETS
Cash and due from banks $ 26,409,184 $ 26,873,638 $ 30,812,399
Held to maturity securities, market value of
$109,094,000 - March 31, 1997;
$128,879,000 - December 31, 1996;
$161,185,000 - March 31, 1996 108,786,686 127,870,283 160,174,406
Available for sale securities, at market value 51,841,605 53,159,353 64,236,336
Federal funds sold 2,900,000 -0- 2,400,000
Loans 227,262,354 228,508,895 215,028,761
Less: Unearned income 17,320 17,295 25,406
Allowance for loan losses 4,546,681 4,522,704 4,579,984
------------ ------------ ------------
Loans, net 222,698,353 223,968,896 210,423,371
Bank premises and equipment, net of
accumulated depreciation of $7,122,000 -
March 31, 1997; $6,880,000 - December
31, 1996; and $6,418,000 - March 31, 1996 8,451,413 8,626,068 8,734,040
Other real estate 436,384 264,962 716,301
Accrued interest receivable 3,396,989 3,891,465 3,381,216
Other assets 3,602,746 2,958,967 3,214,661
Intangible assets 416,535 495,993 734,367
------------ ------------ ------------
TOTAL ASSETS $428,939,895 $448,109,625 $484,827,097
============ ============ ============
</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, 1997 1996 1996
- ------------------------------------------------- ------------- ------------- -------------
<S> <C> <C> <C>
LIABILITIES & SHAREHOLDERS' EQUITY
Liabilities:
Deposits:
Demand, non-interest bearing $ 72,234,869 $ 73,535,221 $ 69,898,179
Savings and demand, interest bearing 152,819,782 153,596,132 209,835,286
Time, $100,000 or more 73,185,075 84,973,369 91,034,555
Other time deposits 56,754,225 56,027,287 54,874,607
------------- ------------- -------------
Total deposits 354,993,951 368,132,009 425,642,627
Accrued interest payable 665,809 1,005,508 1,152,239
Federal funds purchased 9,325,000 16,500,000 -0-
Notes payable 223,787 226,608 391,097
Other liabilities 2,871,581 1,891,296 2,190,504
------------- ------------- -------------
TOTAL LIABILITIES 368,080,128 387,755,421 429,376,467
SHAREHOLDERS' EQUITY:
Common Stock, $1 par value, 1,500,000 shares
authorized, 738,168 shares issued and
outstanding at March 31, 1997, December
31, 1996 and March 31, 1996, after giving
retroactive effect to two for one stock split
effective October 16, 1996 738,168 738,168 738,168
Surplus 53,926,262 53,926,262 48,926,262
Undivided profits 6,806,435 5,428,068 6,497,620
Additional minimum liability in excess of prior
service cost, net of tax -0- -0- (294,512)
Unrealized gain (loss) on available for sale
securities, net of tax (611,098) 261,706 (260,658)
Note payable offset associated with employee
stock ownership plan -0- -0- (156,250)
------------- ------------- -------------
TOTAL SHAREHOLDERS' EQUITY 60,859,767 60,354,204 55,450,630
------------- ------------- -------------
TOTAL LIABILITIES AND SHAREHOLDERS' EQUITY $ 428,939,895 $ 448,109,625 $ 484,827,097
============= ============= =============
</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, 1997 1996
- ------------------------------------------------------- ---------- ----------
<S> <C> <C>
INTEREST INCOME:
Interest and fees on loans $5,147,595 $5,160,824
Interest and dividends on investments:
U. S. Treasury 1,564,543 2,126,460
U. S. Government agencies and corporations 994,989 727,108
States and political subdivisions 113,184 97,430
Other investments 7,010 17,918
Interest on federal funds sold 139,883 241,123
---------- ----------
TOTAL INTEREST INCOME 7,967,204 8,370,863
---------- ----------
INTEREST EXPENSE:
Time deposits of $100,000 or more 1,156,571 1,272,643
Other deposits 2,073,221 2,411,219
Mortgage indebtedness 3,035 3,182
Federal funds purchased 55,102 27,717
---------- ----------
TOTAL INTEREST EXPENSE 3,287,929 3,714,761
---------- ----------
NET INTEREST INCOME 4,679,275 4,656,102
Provision for losses on loans -0- -0-
---------- ----------
NET INTEREST INCOME AFTER PROVISION FOR LOSSES ON LOANS $4,679,275 $4,656,102
---------- ----------
</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, 1997 1996
- ------------------------------------------------- ---------- ----------
<S> <C> <C>
OTHER OPERATING INCOME:
Trust department income and fees $ 190,583 $ 227,617
Service charges on deposit accounts 943,376 924,241
Other service charges, commissions and fees 65,556 59,283
Other income 108,114 135,059
Gain on sale of securities 640,613 -0-
---------- ----------
TOTAL OTHER OPERATING INCOME 1,948,242 1,346,200
---------- ----------
OTHER OPERATING EXPENSE:
Salaries and employee benefits 1,906,973 1,940,426
Net occupancy 215,801 180,227
Equipment rentals, depreciation and maintenance 418,081 407,602
Other expense 1,295,908 1,139,256
---------- ----------
TOTAL OTHER OPERATING EXPENSE 3,836,763 3,667,511
---------- ----------
INCOME BEFORE INCOME TAXES 2,790,754 2,334,791
Income taxes 984,250 525,175
---------- ----------
NET INCOME $1,806,504 $1,809,616
========== ==========
</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
minimum
liability in Unrealized
excess of Gain (Loss) Note
prior on Available Payable
# of service for Sale Offset
Common Common Undivided cost, net of Securities, Associated
Shares Stock Surplus Profits tax Net of Tax With ESOP Total
--------- --------- ------------ ----------- ----------- ------------ ----------- ------------
<S> <C> <C> <C> <C> <C> <C> <C> <C>
BALANCE, JANUARY 1, 1996,
AS PREVIOUSLY REPORTED 369,084 $ 369,084 $ 49,295,346 $ 5,075,542 $ (294,512) $ 336,945 $ (200,000) $ 54,582,405
Two-for-one stock split in
1996 369,084 369,084 (369,084)
--------- --------- ------------ ----------- ----------- ------------ ----------- ------------
BALANCE, JANUARY 1, 1996,
AS RESTATED 738,168 738,168 48,926,262 5,075,542 (294,512) 336,945 (200,000) 54,582,405
Net income 1,809,616 1,809,616
Cash dividends, common
($ .525 per share) (387,538) (387,538)
Net change in unrealized
gain (loss) on available
for sale securities, net
of tax (597,603) (597,603)
Reduction to note payable
offset associated with esop 43,750 43,750
--------- --------- ------------ ----------- ----------- ------------ ----------- ------------
BALANCE, MARCH 31, 1996 738,168 $ 738,168 $ 48,926,262 $ 6,497,620 $ (294,512) $ (260,658) $ (156,250) $ 55,450,630
========= ========= ============ =========== =========== ============ =========== ============
BALANCE, JANUARY 1, 1997 738,168 $ 738,168 $ 53,926,262 $ 5,428,068 $ -0 $ 261,706 $ -0 $ 60,354,204
Net income 1,806,504 1,806,504
Cash dividends, common
($ .58 per share) (428,137) (428,137)
Net change in unrealized
gain (loss) on available for
sale securities, net of tax (872,804) (872,804)
--------- --------- ------------ ----------- ----------- ------------ ----------- ------------
BALANCE, MARCH 31, 1997 738,168 $ 738,168 $ 53,926,262 $ 6,806,435 $ -0 $ (611,098) $ -0 $ 60,859,767
========= ========= ============ =========== =========== ============ =========== ============
</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, 1997 1996
- ---------------------------------------------------------- ------------ ------------
<S> <C> <C>
CASH FLOWS FROM OPERATING ACTIVITIES:
Net income $ 1,806,504 $ 1,809,616
Adjustments to reconcile net income to net cash provided
by operating activities:
Proceeds from sales of other real estate -0- 1,700
Gain on sales of other real estate -0- (650)
Depreciation and amortization 334,458 334,458
Provision for losses on other real estate 8,778 9,487
Changes in assets and liabilities:
Accrued interest receivable 494,476 (211,550)
Other assets (21,182) 153,394
Accrued interest payable (339,699) 12,471
Other liabilities 830,285 366,761
------------ ------------
NET CASH PROVIDED BY OPERATING ACTIVITIES 3,113,620 2,475,687
------------ ------------
CASH FLOWS FROM INVESTING ACTIVITIES:
Proceeds from maturities of held to maturity securities 27,090,000 53,947,481
Investment in held to maturity securities (8,006,403) (48,979,804)
Investment in available for sale securities (5,456) (44,312,014)
Loans, net decrease 1,090,343 9,270,142
Acquisition of premises and equipment (80,345) (199,398)
Federal funds sold (2,900,000) (2,400,000)
Other assets (22,197) (140,724)
------------ ------------
NET CASH PROVIDED BY (USED IN) INVESTING ACTIVITIES $ 17,165,942 $(32,814,317)
------------ ------------
</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, 1997 1996
- ------------------------------------------------------ ------------ ------------
<S> <C> <C>
CASH FLOWS FROM FINANCING ACTIVITIES:
Demand and savings deposits, net increase (decrease) $ (2,076,702) $ 41,755,846
Time deposits, net increase (decrease) (11,061,356) 7,715,046
Principal payments on notes (2,821) (2,673)
Cash dividends (428,137) (387,538)
Federal funds purchased, net decrease (7,175,000) (12,150,000)
------------ ------------
NET CASH PROVIDED BY (USED IN) FINANCING ACTIVITIES (20,744,016) 36,930,681
------------ ------------
NET INCREASE (DECREASE) IN CASH AND CASH EQUIVALENTS (464,454) 6,592,051
CASH AND CASH EQUIVALENTS, BEGINNING OF PERIOD 26,873,638 24,220,348
------------ ------------
CASH AND CASH EQUIVALENTS, END OF PERIOD $ 26,409,184 $ 30,812,399
============ ============
</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, 1997 and 1996
1. The accompanying unaudited consolidated financial statements have been
prepared with the accounting policies in effect as of December 31, 1996 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, 1997, 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 738,168 for the quarters ended March 31, 1997 and 1996.
4. At March 31, 1997 and 1996, the total recorded investment in impaired
loans amounted to $595,000 and $1,173,000, 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 at
March 31, 1996. The amount of that recorded investment in impaired loans
for which there was no related allowance for loan losses was $595,000 and
$1,075,000 at March 31, 1997 and 1996, respectively.
At March 31, 1997, the average recorded investment in impaired loans was
$598,000. During the first quarter of 1997, the Company recognized $9,000
in interest income on impaired loans. During the first quarter of 1997,
the Company received $12,000 in interest payments on impaired loans.
5. Transactions in the allowance for loan losses were as follows:
<TABLE>
<S> <C>
Balance, January 1, 1997 $ 4,522,704
Recoveries 47,112
Loans charged off (23,135)
-----------
Balance, March 31, 1997 $ 4,546,681
===========
</TABLE>
6. At March 31, 1997 and 1996, renegotiated and restructured loans amounted
to $2,275,000 and $2,391,000. The Company recognized $45,000 and $26,000
in interest income on these loans during the quarters ended March 31, 1997
and 1996, respectively. The amount of interest that would have been
recognized during these quarters under the original terms of the loan
agreements was $50,000 and $51,000.
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 $3,628,000 and $3,702,000 for the quarters
ended March 31, 1997 and 1996, respectively, for interest on deposits and
borrowings. Income tax payments totaled $140,000 during the quarter ended
March 31, 1997 and no income tax payments were made during the first
quarter of 1996. Loans transferred to other real estate amounted to
$180,200 for the quarter ended March 31, 1997. No loans were transferred
to other real estate during the quarter ended March 31, 1996.
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, 1997 and 1996.
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 1997 were the
continued strength in earnings and the sale of shares of Hibernia Corporation
common stock at a gain of $640,000. Earnings were $1,806,000 for the quarter
ended March 31, 1997 as compared with $1,810,000 for the quarter ended March
31, 1996. The following schedule compares financial highlights (in thousands)
for the quarters ended March 31, 1997 and 1996:
<TABLE>
<CAPTION>
For the quarters ended March 31, 1997 1996
- -------------------------------------------------------- -------- --------
<S> <C> <C>
Net income per share $ 2 $ 2
Book value per share $ 82 $ 75
Return on average total assets 1.63% 1.54%
Return on average shareholders' equity 11.93% 13.16%
Allowance for loan losses as a % of
loans, net of unearned discount 2.00% 2.13%
</TABLE>
FINANCIAL CONDITION
HELD TO MATURITY SECURITIES
The Company has structured its portfolio during the last 36 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, 1997 and 1996. Gross
unrealized gains for held to maturity securities were $735,000 and $1,487,000
and gross unrealized losses for held to maturity securities were $428,000 and
$476,000 for the quarters ended March 31, 1997 and 1996, respectively. The
following schedule reflects the mix of the held to maturity investment
portfolio at March 31, 1997 and 1996:
Page 10 of 17
<PAGE> 11
<TABLE>
<CAPTION>
March 31, 1997 1996
- ------------------------------ --------------------- ---------------------
Amount % Amount %
------------ ------ ------------ ------
<S> <C> <C> <C> <C>
U. S. Treasury securities $ 86,741,687 79.80% $138,241,037 86.30%
U. S. Government
agencies 15,958,846 14.70% 17,484,636 10.90%
States and political
subdivisions 6,086,153 5.50% 4,448,733 2.80%
------------ ------ ------------ ------
Totals $108,786,686 100.00% $160,174,406 100.00%
============ ====== ============ ======
</TABLE>
AVAILABLE FOR SALE SECURITIES
Available for sale securities decreased $12 million in the management of the
Company's liquidity position. Gross unrealized gains were $449,000 and $506,000
and gross unrealized losses were $1,374,000 and $900,000 at March 31, 1997 and
1996, respectively. The following schedule reflects the mix of available for
sale securities at March 31, 1997 and 1996:
<TABLE>
<CAPTION>
March 31, 1997 1996
- -------------------------------- -------------------- --------------------
Amount % Amount %
----------- ------ ----------- ------
<S> <C> <C> <C> <C>
U. S. Treasuries $ 5,894,640 11.40% $ 6,871,350 10.70%
U. S. Government
agencies 45,305,632 87.40% 56,668,154 88.20%
Other securities 641,333 1.20% 696,832 1.10%
----------- ------ ----------- ------
Totals $51,841,605 100.0% $64,236,336 100.0%
=========== ====== =========== ======
</TABLE>
OTHER ASSETS
Other assets increased $388,000 at March 31, 1997, as compared with March 31,
1996, primarily as a result of deferred taxes on unrealized losses on available
for sale securities.
DEPOSITS
Total deposits decreased $71 million at March 31, 1997, as compared with March
31, 1996. 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.
FEDERAL FUNDS PURCHASED
Federal funds purchased were $9,325,000 at March 31, 1997. This fluctuation is
directly related to the liquidity needs of the bank subsidiary.
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 14.76% at March 31,
1997, as compared with 12.77% at March 31, 1996. 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 $23,000 for the first quarter of 1997 as compared
with the first quarter of 1996. Total interest income decreased $404,000 for
the quarter ended March 31, 1997, as compared with the quarter ended March 31,
1996. Total interest expense decreased $427,000 for the quarter ended March 31,
1997, as compared with quarter ended March 31, 1996. 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) 1997 1996
- ---------------------------------------------------- ---------- ----------
<S> <C> <C>
Total interest income (1) $ 8,026 $ 8,421
Total interest expense 3,288 3,715
---------- ----------
Net interest earnings $ 4,738 $ 4,706
========== ==========
Net yield on interest earning assets 4.66% 4.31%
========== ==========
</TABLE>
(1) All interest earned is reported on a taxable equivalent basis using a tax
rate of 34% in 1997 and 1996.
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, 1997 and
1996. These changes are generally attributable to a change in volume and/or a
change in the applicable rates.
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/
1997 1996 (Decrease) Volume Rate Volume
---------- ---------- ---------- ---------- ---------- ----------
<S> <C> <C> <C> <C> <C> <C>
INTEREST
INCOME: (1)
Loans (2) (3) $ 5,147 $ 5,161 $ (14) $ 95 $ (107) $ (2)
Federal funds
sold 140 241 (101) (103) 4 (2)
Held to maturity:
Taxable securities 1,711 2,208 (497) (553) 75 (19)
Non-taxable
securities 171 148 23 45 (17) (5)
Available for
sale:
Taxable
securities 850 645 205 150 45 10
Other securities 7 18 (11) 4 (12) (3)
---------- ---------- ---------- ---------- ---------- ----------
Total $ 8,026 $ 8,421 $ (395) $ (362) $ (12) $ (21)
========== ========== ========== ========== ========== ==========
INTEREST
EXPENSE:
Savings and
negotiable
interest
bearing
deposits $ 1,257 $ 1,605 $ (348) $ (280) $ (82) $ 14
Time deposits 1,973 2,079 (106) (97) (8) (1)
Federal funds
purchased 55 28 27 54 (9) (18)
Mortgage
indebtedness 3 3 -0- -0- -0- -0-
---------- ---------- ---------- ---------- ---------- ----------
Total $ 3,288 $ 3,715 $ (427) $ (323) $ (99) $ (5)
========== ========== ========== ========== ========== ==========
</TABLE>
(1) All interest earned is reported on a taxable equivalent basis using a tax
rate of 34% in 1997 and 1996.
(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 1997.
GAIN ON SALE OF SECURITIES
During the first quarter of 1997, the Company sold 45,862 shares of common
stock of Hibernia Corporation it had carried in its available for sale
portfolio at a realized gain of $640,000.
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, 1997, cash and due
from banks, investment securities and federal funds sold were 54% of total
deposits, as compared with 61% at March 31, 1996.
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 9, 1997.
(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>
Drew Allen 580,877 8
William A. Barq 580,885 0
Andy Carpenter 580,885 0
Chevis C. Swetman 580,735 150
F. Walker Tucei 580,885 0
</TABLE>
Shares not voted amounted to 157,283.
Item 5 - Other Information
At a meeting held on April 9, 1997, the Board of Directors of the Company
approved the following slate of officers:
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
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: April 30, 1997
-------------------------------------
By: /s/ Chevis C. Swetman
---------------------------------------
Chevis C. Swetman
Chairman, President and Chief
Executive Officer
Date: April 30, 1997
-------------------------------------
By: /s/ Lauri A. Wood
---------------------------------------
Lauri A. Wood
Chief Financial Officer and Controller
(principal financial and accounting officer)
Page 17 of 17
<PAGE> 18
INDEX TO EXHIBITS
<TABLE>
<CAPTION>
EXHIBIT
NUMBER DESCRIPTION
- ------- -----------
<S> <C>
27 - Financial Data Schedule
</TABLE>
<TABLE> <S> <C>
<ARTICLE> 9
<S> <C>
<PERIOD-TYPE> 3-MOS
<FISCAL-YEAR-END> DEC-31-1997
<PERIOD-END> MAR-31-1997
<CASH> 26,409,184
<INT-BEARING-DEPOSITS> 0
<FED-FUNDS-SOLD> 2,900,000
<TRADING-ASSETS> 0
<INVESTMENTS-HELD-FOR-SALE> 51,841,605
<INVESTMENTS-CARRYING> 108,786,686
<INVESTMENTS-MARKET> 109,094,000
<LOANS> 227,262,354
<ALLOWANCE> 4,546,681
<TOTAL-ASSETS> 428,939,895
<DEPOSITS> 354,993,951
<SHORT-TERM> 0
<LIABILITIES-OTHER> 2,871,581
<LONG-TERM> 223,787
0
0
<COMMON> 738,168
<OTHER-SE> 60,121,599
<TOTAL-LIABILITIES-AND-EQUITY> 428,939,895
<INTEREST-LOAN> 5,147,595
<INTEREST-INVEST> 2,679,726
<INTEREST-OTHER> 139,883
<INTEREST-TOTAL> 7,967,204
<INTEREST-DEPOSIT> 3,229,792
<INTEREST-EXPENSE> 3,287,929
<INTEREST-INCOME-NET> 4,679,275
<LOAN-LOSSES> 0
<SECURITIES-GAINS> 640,613
<EXPENSE-OTHER> 3,836,763
<INCOME-PRETAX> 2,790,754
<INCOME-PRE-EXTRAORDINARY> 2,790,754
<EXTRAORDINARY> 0
<CHANGES> 0
<NET-INCOME> 1,806,504
<EPS-PRIMARY> 2
<EPS-DILUTED> 2
<YIELD-ACTUAL> 4.66
<LOANS-NON> 128,000
<LOANS-PAST> 2,916,000
<LOANS-TROUBLED> 2,275,000
<LOANS-PROBLEM> 0
<ALLOWANCE-OPEN> 4,522,704
<CHARGE-OFFS> 23,135
<RECOVERIES> 47,112
<ALLOWANCE-CLOSE> 4,546,681
<ALLOWANCE-DOMESTIC> 4,546,681
<ALLOWANCE-FOREIGN> 0
<ALLOWANCE-UNALLOCATED> 50,000
</TABLE>
