FORM 10-QSB
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 DECEMBER 31, 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. 0-28838
PEOPLES FINANCIAL CORPORATION
______________________________________________________________________
(Exact name of small business issuer 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)
Issuer'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 __X__ No _____
As of February 7, 1997, the latest practicable date, 1,491,012 common shares of
the registrant, no par value, were issued and outstanding.
Page 1 of 17 Pages
<PAGE>
INDEX
PEOPLES FINANCIAL CORPORATION
PAGE
PART I - FINANCIAL INFORMATION
Consolidated Statements of Financial Condition 3
Consolidated Statements of Earnings 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
<PAGE>
<TABLE>
CONSOLIDATED STATEMENTS OF FINANCIAL CONDITION
PEOPLES FINANCIAL CORPORATION
(In thousands, except share data)
December 31, September 30,
ASSETS 1996 1996
------------ -------------
<S> <C> <C>
Cash and due from banks $ 278 $ 276
Interest-bearing deposits in other financial institutions 7,467 12,257
-------- --------
Cash and cash equivalents 7,745 12,533
Investment securities designated as available
for sale - at market 6,654 5,087
Investment securities - at cost, approximate market value
of $2,200 and $1,712 as of December 31, 1996 and
September 30, 1996 2,176 1,688
Mortgage-backed and related securities designated
as available for sale - at market 15,708 14,113
Mortgage-backed and related securities - at amortized cost,
approximate market value of $8,470 and $9,011 as of
December 31, 1996 and September 30, 1996 8,301 8,875
Loans receivable - net 45,963 44,206
Office premises and equipment - at depreciated cost 1,490 1,515
Stock in Federal Home Loan Bank - at cost 761 748
Accrued interest receivable 358 397
Prepaid expenses and other assets 86 95
-------- --------
Total assets $ 89,242 $ 89,257
======== ========
LIABILITIES AND SHAREHOLDERS' EQUITY
Deposits $ 64,160 $ 64,355
Other liabilities 210 667
Accrued federal income taxes 22 32
Deferred federal income taxes 745 497
-------- --------
Total liabilities 65,137 65,551
Shareholders' equity:
Preferred stock - authorized 1,000,000 shares without par
value; no shares issued -- --
Common stock - authorized 6,000,000 shares without par
or stated value; 1,491,012 shares issued and outstanding -- --
Additional paid-in capital 14,203 14,203
Retained earnings - restricted 9,699 9,455
Unrealized gains on securities designated as available
for sale, net of related tax effects 800 645
Shares acquired by Employee Stock Ownership Plan (597) (597)
-------- --------
Total shareholders' equity 24,105 23,706
-------- --------
Total liabilities and shareholders' equity $ 89,242 $ 89,257
======== ========
</TABLE>
Page 3 of 17 Pages
<PAGE>
<TABLE>
CONSOLIDATED STATEMENTS OF EARNINGS
PEOPLES FINANCIAL CORPORATION
(In thousands, except per share data)
Three Months Ended
December 31,
1996 1995
------ ------
<S> <C> <C>
Interest income
Loans $ 940 $ 795
Mortgage-backed and related securities 401 407
Investment securities 108 137
Interest-bearing deposits and other 117 41
------ ------
Total interest income 1,566 1,380
Interest expense on deposit accounts 782 870
------ ------
Net interest income 784 510
Provision for losses on loans 3 105
------ ------
Net interest income after
provision for losses on loans 781 405
Other operating income 14 6
------ ------
795 411
General, administrative and other expense
Employee compensation and benefits 212 177
Occupancy and equipment 59 57
Franchise taxes 36 17
Federal deposit insurance premiums 23 38
Data processing 19 16
Advertising 11 13
Other operating 69 69
------ ------
Total general, administrative and other expense 429 387
------ ------
Earnings before income taxes 366 24
Federal income taxes
Current 112 4
Deferred 10 1
------ ------
Total federal income taxes 122 5
------ ------
Net earnings $ 244 $ 19
====== ======
Earnings per share $ 0.17 N/A
====== ======
</TABLE>
Page 4 of 17 Pages
<PAGE>
<TABLE>
CONSOLIDATED STATEMENTS OF CASH FLOWS
PEOPLES FINANCIAL CORPORATION
(In thousands)
Three Months Ended
December 31,
-------------------------
1996 1995
------ ------
<S> <C> <C>
Cash flows provided by (used in) operating activities:
Net earnings for the period $ 244 $ 19
Adjustments to reconcile net earnings to net
cash provided by (used in) operating activities:
Depreciation of premises and equipment 25 23
Amortization of premiums and discounts
on investment securities and
mortgage-backed securities, net 13 15
Amortization of deferred loan costs -- 4
Provision for losses on loans 3 105
Federal Home Loan Bank stock
dividends (13) (24)
Increase (decrease) in cash due to changes in:
Accrued interest receivable 38 63
Prepaid expenses and other assets 9 49
Other liabilities (460) (43)
Accrued interest payable 5 --
Federal income taxes:
Current (10) --
Deferred 168 (26)
-------- --------
Net cash provided by
operating activities 22 185
Cash flows provided by (used in) investing activities:
Purchase of mortgage-backed and related
securities designated as available for sale (1,984) --
Principal repayments on mortgage-backed
and related securities 1,038 1,425
Purchase of investment securities (1,000) --
Purchase of investment securities
designated as available for sale (1,500) --
Principal repayments and maturities of
investment securities 592 283
Loan principal repayments 4,562 1,690
Loan disbursements (6,322) (1,812)
Purchase of office premises and equipment -- (5)
-------- --------
Net cash provided by (used in)
investing activities (4,614) 1,581
-------- --------
Net cash provided by (used in)
operating and investing activities
(subtotal carried forward) $ (4,592) $ 1,766
Page 5 of 17 Pages
<PAGE>
CONSOLIDATED STATEMENTS OF CASH FLOWS (CONTINUED)
PEOPLES FINANCIAL CORPORATION
(In thousands)
Three Months Ended
December 31,
-------------------------
1996 1995
------ ------
Net cash provided by (used in)
operating and investing activities
(subtotal brought forward) $ (4,592) $ 1,766
Cash flows provided by (used in)
financing activities:
Net increase (decrease) in deposit accounts (196) 656
-------- --------
Net cash provided by (used in)
financing activities (196) 656
-------- --------
Net increase (decrease) in cash and cash equivalents (4,788) 2,422
Cash and cash equivalents at beginning of period 12,533 1,864
-------- --------
Cash and cash equivalents at end of period $ 7,745 $ 4,286
======== ========
Supplemental disclosure of cash flow information:
Cash paid during the period for:
Federal income taxes $ 5 $ 35
======== ========
Interest on deposits $ 777 $ 873
======== ========
Supplemental disclosure of non-cash investing activities:
Unrealized gains on securities designated as
available for sale, net of related tax effects $ 155 $ 75
======== ========
</TABLE>
Page 6 of 17 Pages
<PAGE>
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
PEOPLES FINANCIAL CORPORATION
For the three month periods ended
December 31, 1996 and 1995
On October 16, 1995, the Board of Directors of Peoples Federal Savings and Loan
Association of Massillon ("Peoples Federal" or the "Association") adopted a Plan
of Conversion (the "Plan") whereby Peoples Federal would convert to the stock
form of ownership and issue all of Peoples Federal's outstanding stock to a
newly formed holding company, Peoples Financial Corporation ("PFC"). Pursuant to
the Plan, PFC offered for sale up to 1,495,000 common shares to certain
depositors of Peoples Federal and members of the community. The conversion was
completed on September 12, 1996, and resulted in the issuance of 1,491,012
common shares of PFC, which, after consideration of offering expenses totaling
approximately $707,000, and share purchases by the Peoples Financial Corporation
Employee Stock Ownership Plan (the "ESOP") totaling $597,000, resulted in net
equity proceeds of $13.6 million.
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 a 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 Financial Corporation for the year ended September 30, 1996.
However, in the opinion of management, all adjustments (consisting of only
normal recurring accruals) which are necessary for a fair presentation of the
consolidated financial statements have been included. The results of operations
for the three-month periods ended December 31, 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 PFC
and Peoples Federal. All significant intercompany items have been eliminated.
Page 7 of 17 Pages
<PAGE>
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (CONTINUED)
PEOPLES FINANCIAL CORPORATION
For the three month periods ended
December 31, 1996 and 1995
3. EFFECTS OF RECENT ACCOUNTING PRONOUNCEMENTS
In October 1995, the Financial Accounting Standards Board (the "FASB") issued
Statement of Financial Accounting Standards ("SFAS") No. 123, "Accounting for
Stock-Based Compensation", establishing financial accounting and reporting
standards for stock-based employee compensation plans. SFAS No. 123 encourages
all entities to adopt a new method of accounting to measure compensation cost
for all employee stock compensation plans based on the estimated fair value of
the award at the financial statement date. Companies are, however allowed to
continue to measure compensation cost for those plans using the intrinsic value
based method of accounting, which generally does not result in compensation
expense recognition for most plans. Companies that elect to remain with the
existing accounting are required to disclose in a footnote to the financial
statements pro forma net earnings and, if presented, earnings per share, as if
SFAS No. 123 had been adopted. The accounting requirements of SFAS No. 123 are
effective for transactions entered into during fiscal years that begin after
December 15, 1995, although companies are required to disclose information for
awards granted in their first fiscal year beginning after December 15, 1994.
Management has determined that PFC will continue to account for stock-based
compensation pursuant to Accounting Principles Board Opinion No. 25, and
therefore the disclosure provisions of SFAS No. 123 will have no effect on its
consolidated financial position or results of operations.
Page 8 of 17 Pages
<PAGE>
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (CONTINUED)
PEOPLES FINANCIAL CORPORATION
For the three month periods ended
December 31, 1996 and 1995
In June 1996, the FASB issued SFAS No. 125 "Accounting for Transfers of
Financial Assets, Servicing Rights, and Extinguishment of Liabilities", that
provides accounting guidance on transfers of financial assets, servicing of
financial assets, and extinguishment of liabilities. SFAS No. 125 introduces an
approach to accounting for transfers of financial assets that provides a means
of dealing with more complex transactions in which the seller disposes of only a
partial interest in the assets, retains rights or obligations, makes use of
special purpose entities in the transaction, or otherwise has continuing
involvement with the transferred assets. The new accounting method, referred to
as the financial components approach, provides that the carrying amount of the
financial assets transferred be allocated to components of the transaction based
on their relative fair values. SFAS No. 125 provides criteria for determining
whether control of assets has been relinquished and whether a sale has occurred.
If the transfer does not qualify as a sale, it is accounted for as a secured
borrowing. Transactions subject to the provisions of SFAS No. 125 include, among
others, transfers involving repurchase agreements, securitizations of financial
assets, loan participations, factoring arrangements, and transfers of
receivables with recourse.
An entity that undertakes an obligation to service financial assets recognizes
either a servicing asset or liability for the servicing contract (unless related
to a securitization of assets, and all the securitized assets are retained and
classified as held-to-maturity). A servicing asset or liability that is
purchased or assumed is initially recognized at its fair value. Servicing assets
and liabilities are amortized in proportion to and over the period of estimated
net servicing income or net servicing loss and are subject to subsequent
assessments for impairment based on fair value.
SFAS No. 125 provides that a liability is removed from the balance sheet only if
the debtor either pays the creditor and is relieved of its obligation for the
liability or is legally released from being the primary obligor.
SFAS No. 125 is effective for transfers and servicing of financial assets and
extinguishment of liabilities occurring after December 31, 1996, and is to be
applied prospectively. Earlier or retroactive application is not permitted.
Management does not believe that adoption of SFAS No. 125 will have a material
adverse effect on PFC's consolidated financial position or results of
operations.
Page 9 of 17 Pages
<PAGE>
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (CONTINUED)
PEOPLES FINANCIAL CORPORATION
For the three month periods ended
December 31, 1996 and 1995
4. PENDING LEGISLATIVE CHANGES
Congress has enacted legislation that would merge the Savings Association
Insurance Fund (the "SAIF") and the Bank Insurance Fund (the "BIF") on January
1, 1999. The 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. Peoples Federal would then be regulated as a bank
under federal law and subject to the more restrictive activity limits imposed on
national banks.
5. EARNINGS PER SHARE
Earnings per share for the three months ended December 31, 1996, is based upon
the weighted-average shares outstanding during the period less shares in the
ESOP that are unallocated and not committed to be released. Weighted-average
common shares deemed outstanding, which gives effect to 59,678 unallocated ESOP
shares, totaled 1,431,334 for the three months ended December 31, 1996.
The provisions of Accounting Principles Board Opinion No. 15 "Earnings per
Share" are not applicable to the three months ended December 31,1995, as the
Corporation completed its conversion to stock form in September 1996.
Page 10 of 17 Pages
<PAGE>
MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION
AND RESULTS OF OPERATIONS
PEOPLES FINANCIAL CORPORATION
NOTE REGARDING FORWARD-LOOKING STATEMENTS
In addition to historical information contained herein, the following discussion
contains forward-looking statements that involve risks and uncertainties.
Economic circumstances, PFC's operations and PFC's actual results could differ
significantly from those discussed in the forward-looking statements. Some of
the factors that could cause or contribute to such differences are discussed
herein but also include changes in the economy and interest rates in the nation
and PFC's market area generally. See Exhibit 99 hereto, which is incorporated
herein by reference.
Some of the forward-looking statements included herein are the statements
regarding management's determination of the amount of allowance for losses on
loans, legislative changes with respect to the federal thrift charter and the
effect of certain accounting pronouncements.
DISCUSSION OF FINANCIAL CONDITION CHANGES FROM
SEPTEMBER 30, 1996 TO DECEMBER 31,1996
PFC's assets totaled $89.2 million as of December 31, 1996, a decrease of
$15,000 from the September 30, 1996 total. Changes in operating assets from
September 30, 1996 levels consisted of increases of $2.1 million in investment
securities, $1.0 million in mortgage-backed securities and $1.8 million in net
loans receivable, which were offset by a decrease in cash and cash equivalents
of $4.8 million.
Cash and cash equivalents totaled $7.7 million at December 31, 1996, a decrease
of $4.8 million, or 38.2%, from the total at September 30, 1996. Excess funds
were redeployed primarily to higher-yielding investment securities,
mortgage-backed securities and loans.
Investment securities totaled $8.8 million at December 31, 1996, an increase of
$2.1 million, or 30.3%, over the total at September 30, 1996. This increase
resulted primarily from purchases of $2.5 million and net fair value
appreciation of $148,000, offset by maturities of $512,000 and principal
repayments of $80,000.
Mortgage-backed securities totaled $24.0 million at December 31, 1996, an
increase of $1.0 million, or 4.4%, over the total at September 30, 1996. This
increase resulted primarily from purchases of $2.0 million and net fair value
appreciation of $88,000, which were partially offset by principal repayments of
$1.0 million.
Page 11 of 17 Pages
<PAGE>
MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION
AND RESULTS OF OPERATIONS (CONTINUED)
PEOPLES FINANCIAL CORPORATION
DISCUSSION OF FINANCIAL CONDITION CHANGES FROM
SEPTEMBER 30, 1996 TO DECEMBER 31,1996 (CONTINUED)
Net loans receivable totaled $46.0 million at December 31, 1996, an increase of
$1.8 million, or 4.0%, over the September 30, 1996, total. The increase is
attributed to Peoples Federal's continued focus on its marketing program to
originate new mortgage and home equity loans at the main office and the branch
lending office.
Deposits totaled $64.2 million at December 31, 1996, a decrease of $195,000, or
..3%, from the September 30, 1996, amount. Peoples Federal has recently offered
deposits at interest rates designed to reduce the cost of funds, while
management monitors deposit levels to minimize deposit outflows.
Peoples Federal is required to meet each of three minimum capital standards
promulgated by the Office of Thrift Supervision (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 shareholders' equity 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 equal
to 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 December 31,
1996, the Association's tangible and core capital totaled $15.5 million, or
19.2%, which exceeded the minimum requirements of $1.2 million and $2.4 million
by $14.3 million and $13.1 million, respectively. As of December 31, 1996, the
Association's risk-based capital was $15.7 million, or 48.6% of risk-weighted
assets, exceeding the minimum requirement by $13.1 million.
Page 12 of 17 Pages
<PAGE>
MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION
AND RESULTS OF OPERATIONS (CONTINUED)
PEOPLES FINANCIAL CORPORATION
COMPARISON OF OPERATING RESULTS FOR THE THREE-MONTH PERIODS
ENDED DECEMBER 31, 1996 AND 1995.
GENERAL
Net earnings for the three months ended December 31, 1996, totaled $244,000,
compared to $19,000 for the same period in 1995, an increase of $225,000. The
primary reasons for the increase in net earnings were an increase in net
interest income of $274,000, or 53.7%, and a decrease in provision for losses on
loans of $102,000, or 97.1%, which were partially offset by an increase in
general, administrative and other expense of $42,000, or 10.9% and an increase
in income tax provision of $117,000.
NET INTEREST INCOME
Interest income on loans for the three months ended December 31, 1996, increased
by $145,000, or 18.2%, over the 1995 period. This increase resulted from a $7.7
million increase in average portfolio balance outstanding, partially offset by a
..12% decrease in weighted average yield. Interest income on mortgage-backed and
related securities, investment securities and deposits increased by $41,000, or
7.0%, over the 1995 period. This increase resulted from a $3.3 million increase
in average portfolio balances outstanding, partially offset by a .11% decrease
in weighted average yield.
Interest paid on deposits decreased by $88,000, or 10.1%, for the three months
ended December 31, 1996. This decrease resulted from a $3.1 million decline in
average deposit balances and a .30% decrease in weighted average cost of funds.
As a result of the foregoing, net interest income increased by $274,000, or
53.7%, for the three months ended December 31, 1996, compared to 1995. The
interest rate spread increased to 2.30% for the three months ended December 31,
1996, as compared to 2.07% for the comparable 1995 three-month period. The net
interest margin increased to 3.61% for the three months ended December 31, 1996,
as compared to 2.69% for the comparable 1995 period.
Page 13 of 17 Pages
<PAGE>
MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION
AND RESULTS OF OPERATIONS (CONTINUED)
PEOPLES FINANCIAL CORPORATION
COMPARISON OF OPERATING RESULTS FOR THE THREE-MONTH
PERIODS ENDED DECEMBER 31, 1996 AND 1995 (CONTINUED)
ALLOWANCE FOR LOSSES ON LOANS
It is the Association's policy to provide valuation allowances for estimated
losses on loans based on past loan loss experience, changes in the composition
of the loan portfolio, trends in the level of delinquent and problem loans,
adverse situations that may affect the borrower's ability to repay, the
estimated value of any underlying collateral and current and anticipated
economic conditions in the primary lending area. The allowance for loan losses
is increased by charges to earnings and decreased by charge-offs (net of
recoveries). After considering the above guidelines, management decided to
increase the allowance for losses on loans by $3,000 during the three months
ended December 31, 1996. The provision for the three-month period ended December
31, 1995, totaled $105,000. This increase during the three months ended December
31, 1995, was primarily due to the fact that 90-day delinquent loans increased
by $681,000. The properties securing these loans were sold at a sheriff's sale
in October, 1996, with Peoples Federal receiving full repayment in December,
1996. There can be no assurance that the allowance for losses on loans of
Peoples Federal will be adequate to cover losses on nonperforming loans in the
future.
OTHER OPERATING INCOME
Other operating income was $14,000 for the three months ended December 31, 1996,
an increase of $8,000 over the 1995 amount. The increase was primarily due to
late payment fees on the delinquent loans collected in December 1996. Also
included in other operating income are safe deposit box rentals, negotiable
order of withdrawal account fees and service fees.
Page 14 of 17 Pages
<PAGE>
MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION
AND RESULTS OF OPERATIONS (CONTINUED)
PEOPLES FINANCIAL CORPORATION
COMPARISON OF OPERATING RESULTS FOR THE THREE-MONTH
PERIODS ENDED DECEMBER 31, 1996 AND 1995 (CONTINUED)
GENERAL, ADMINISTRATIVE AND OTHER EXPENSE
General, administrative and other expense increased by $42,000, or 10.9%, for
the three months ended December 31, 1996, compared to the same period in 1995.
The principal component of the increase for 1996 over 1995 was $35,000, or
19.8%, in employee compensation and benefits, due to the hiring of new employees
and for costs accrued relative to the ESOP.
FEDERAL INCOME TAXES
Federal income taxes are based on earnings before taxes for the three months
ended December 31, 1996 and 1995. The increase of $117,000 in the provision for
income taxes resulted primarily from the $342,000 increase in earnings before
income taxes. The effective tax rates were 33.3% for 1996, and 20.8% for 1995.
Page 15 of 17 Pages
<PAGE>
PART II
PEOPLES FINANCIAL CORPORATION
ITEM 1. LEGAL PROCEEDINGS
Not applicable
ITEM 2. CHANGES IN SECURITIES
Not applicable
ITEM 3. DEFAULTS UPON SENIOR SECURITIES
Not applicable
ITEM 4. SUBMISSION OF MATTERS TO A VOTE OF SECURITY HOLDERS
Not applicable
ITEM 5. OTHER MATERIALLY IMPORTANT EVENTS
Not applicable
ITEM 6. EXHIBITS AND REPORTS ON FORM 8-K
(a) Exhibits
27 Financial data schedule for the three months ended December
31, 1996.
99 Safe Harbor under the Private Securities Litigation Reform
Act of 1995 (incorporated by reference to the Annual Report
on Form 10-KSB for the fiscal year ended September 30, 1996,
filed with the Securities and Exchange Commission on
December 26, 1996, Exhibit 99).
(b) Reports on Form 8-K
Not applicable
Page 16 of 17 Pages
<PAGE>
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.
PEOPLES FINANCIAL CORPORATION
Date: February 10, 1997 By: Paul von Gunten
_____________________________
Paul von Gunten, President
and Chief Executive Officer
Date: February 10, 1997 By: James R. Rinehart
_____________________________
James R. Rinehart, Treasurer
Page 17 of 17 Pages
<TABLE> <S> <C>
<ARTICLE> 9
<MULTIPLIER> 1000
<S> <C>
<PERIOD-TYPE> 3-MOS
<FISCAL-YEAR-END> SEP-30-1997
<PERIOD-START> OCT-01-1996
<PERIOD-END> DEC-31-1996
<CASH> 278
<INT-BEARING-DEPOSITS> 7,467
<FED-FUNDS-SOLD> 0
<TRADING-ASSETS> 0
<INVESTMENTS-HELD-FOR-SALE> 22,362
<INVESTMENTS-CARRYING> 10,477
<INVESTMENTS-MARKET> 10,670
<LOANS> 45,963
<ALLOWANCE> 196
<TOTAL-ASSETS> 89,242
<DEPOSITS> 64,160
<SHORT-TERM> 0
<LIABILITIES-OTHER> 977
<LONG-TERM> 0
0
0
<COMMON> 14,203
<OTHER-SE> 9,902
<TOTAL-LIABILITIES-AND-EQUITY> 89,242
<INTEREST-LOAN> 940
<INTEREST-INVEST> 509
<INTEREST-OTHER> 117
<INTEREST-TOTAL> 1,566
<INTEREST-DEPOSIT> 782
<INTEREST-EXPENSE> 782
<INTEREST-INCOME-NET> 784
<LOAN-LOSSES> 3
<SECURITIES-GAINS> 0
<EXPENSE-OTHER> 429
<INCOME-PRETAX> 366
<INCOME-PRE-EXTRAORDINARY> 244
<EXTRAORDINARY> 0
<CHANGES> 0
<NET-INCOME> 244
<EPS-PRIMARY> .17
<EPS-DILUTED> .17
<YIELD-ACTUAL> 7.20
<LOANS-NON> 0
<LOANS-PAST> 9
<LOANS-TROUBLED> 0
<LOANS-PROBLEM> 0
<ALLOWANCE-OPEN> 193
<CHARGE-OFFS> 0
<RECOVERIES> 0
<ALLOWANCE-CLOSE> 196
<ALLOWANCE-DOMESTIC> 196
<ALLOWANCE-FOREIGN> 0
<ALLOWANCE-UNALLOCATED> 0
</TABLE>
