<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
[ ] TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES
EXCHANGE ACT OF 1934
FOR THE TRANSITION PERIOD FROM ______ TO _______
Commission file number 0-7449
------
PEOPLE'S BANCSHARES, INC.
(Exact name of registrant as specified in its charter)
MASSACHUSETTS 04-3272233
- ------------- ----------
(State or other jurisdiction of (I.R.S. Employer
incorporation or organization) Identification No.)
545 PLEASANT STREET
NEW BEDFORD, MASSACHUSETTS 02740
- -------------------------- -----
(Address of principal executive offices) (Zip Code)
Registrant's telephone number, including area code (508) 991-2601
--------------
-----------------------------
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 .
----- -----
The number of shares of Registrant's Common Stock, $0.10 par value, outstanding
as of March 31, 1997 was 3,592,170.
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PEOPLE'S BANCSHARES, INC.
FORM 10-Q
QUARTERLY REPORT
--------------------
TABLE OF CONTENTS
Facing Page 1
Table of Contents 2
PART I. FINANCIAL INFORMATION (*)
Item 1. Financial Statements:
Consolidated Balance Sheets 3
Consolidated Statements of Income 4
Consolidated Statements of Changes in Stockholders'
Equity 5
Consolidated Statements of Cash Flows 6
Notes to Unaudited Consolidated Financial Statements 8
Item 2. Management's Discussion and Analysis of Financial
Condition and Results of Operations 9
PART II OTHER INFORMATION 14
SIGNATURES 15
EXHIBITS 16
(*) The financial information at December 31, 1996 has been derived from
the audited financial statements at that date and should be read in
conjunction therewith. All other financial statements are unaudited.
2
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PEOPLE'S BANCSHARES, INC. AND SUBSIDIARY
========================================
<TABLE>
CONSOLIDATED BALANCE SHEETS
---------------------------
(Dollars in thousands)
(Unaudited)
March 31, December 31,
1997 1996
--------- ------------
ASSETS
------
<S> <C> <C>
Cash and cash equivalents $ 14,494 $ 12,478
Investment securities, available for sale 252,346 192,517
Loans held for sale 16,095 25,612
Loans 249,340 250,911
Less allowance for loan losses (4,378) (4,716)
--------- ---------
Loans, net 244,962 246,195
Other real estate owned, net 846 493
Banking premises and equipment, net 13,118 13,034
Accrued interest receivable 3,246 2,888
Deferred income taxes 1,325 550
Intangible assets 1,295 1,338
Due from broker 214 --
Other assets 833 1,028
--------- ---------
Total assets $ 548,774 $ 496,133
========= =========
LIABILITIES AND STOCKHOLDERS' EQUITY
------------------------------------
Deposits $ 328,331 $ 336,238
Borrowed funds 184,358 123,920
Mortgagors' escrow accounts 1,253 973
Accrued interest payable 1,726 1,114
Accrued expenses 1,839 1,941
Other liabilities 477 883
--------- ---------
Total liabilities 517,984 465,069
--------- ---------
Stockholders' equity:
Serial preferred stock - par value $0.10 per share; authorized
10,000,000 shares, none issued - -
Common stock - par value $0.10 per share; authorized 20,000,000 shares,
issued and outstanding 3,592,170 and 3,562,970 shares 359 356
Additional paid-in capital 23,119 22,967
Retained earnings 9,547 8,562
--------- ---------
33,025 31,885
Net unrealized loss on securities available
for sale, after tax effects (2,235) (821)
--------- ---------
Total stockholders' equity 30,790 31,064
--------- ---------
Total liabilities and stockholders' equity $ 548,774 $ 496,133
========= =========
</TABLE>
See accompanying notes to unaudited consolidated financial statements.
3
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PEOPLE'S BANCSHARES, INC. AND SUBSIDIARY
========================================
<TABLE>
CONSOLIDATED STATEMENTS OF INCOME
---------------------------------
(Dollars and shares in thousands, except per share data)
(Unaudited)
<CAPTION>
Three Months Ended
March 31,
-------------------------
1997 1996
------- -------
<S> <C> <C>
Interest and dividend income:
Interest and fees on loans $ 5,599 $ 3,675
Interest and dividends on investment securities 4,091 2,902
Interest on short-term investments 39 32
------- -------
Total interest and dividend income 9,729 6,609
------- -------
Interest expense:
Interest on deposits 2,836 1,752
Interest on borrowed funds 2,479 1,903
------- -------
Total interest expense 5,315 3,655
------- -------
Net interest income 4,414 2,954
Provision for loan losses - 75
------- -------
Net interest income, after provision for loan losses 4,414 2,879
------- -------
Other income:
Customer service fees 345 277
Losses on sales of securities, net (11) (24)
Gains on sales of loans, net 913 459
Gain on sale of banking premises and equipment - 62
Miscellaneous 35 121
------- -------
Total other income 1,282 895
------- -------
Operating expenses:
Salaries and employee benefits 2,059 1,515
Occupancy and equipment 409 306
Data processing 305 139
Professional fees 141 52
Other real estate owned, net 53 18
Other general and administrative 680 650
------- -------
Total operating expenses 3,647 2,680
------- -------
Income before income taxes 2,049 1,094
Provision for income taxes 741 407
------- -------
Net income $ 1,308 $ 687
======= =======
Income per share (primary and fully diluted) $ 0.36 $ 0.25
======= =======
Weighted average shares outstanding
(primary and fully diluted) 3,646 2,744
======= =======
</TABLE>
See accompanying notes to unaudited consolidated financial statements.
4
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PEOPLE'S BANCSHARES, INC. AND SUBSIDIARY
========================================
<TABLE>
CONSOLIDATED STATEMENTS OF CHANGES IN STOCKHOLDERS' EQUITY
----------------------------------------------------------
Three Months Ended March 31, 1997 and 1996
------------------------------------------
(Dollars in thousands)
(Unaudited)
<CAPTION>
Net Unrealized
Loss on
Additional Securities
Common Paid-in Retained Available
Stock Capital Earnings for Sale Total
------ ---------- -------- -------------- -------
<S> <C> <C> <C> <C> <C>
Balance at December 31, 1996 $356 $22,967 $8,562 $ (821) $31,064
Net income - - 1,308 - 1,308
Cash dividends paid - - (323) - (323)
Exercise of stock options 3 152 - - 155
Change in net unrealized loss on securities
available for sale, after tax effects - - - (1,414) (1,414)
---- ------- ------ ------- -------
Balance at March 31, 1997 $359 $23,119 $9,547 $(2,235) $30,790
==== ======= ====== ======= =======
Balance at December 31, 1995 $232 $14,015 $5,870 $ (440) $19,677
Net income - - 687 - 687
Cash dividends paid - - (116) - (116)
Exercise of stock warrants 5 236 - - 241
Issuance of common stock 97 7,448 - - 7,545
Change in net unrealized loss on securities
available for sale, after tax effects - - - (652) (652)
---- ------- ------ ------- -------
Balance at March 31, 1996 $334 $21,699 $6,441 $(1,092) $27,382
==== ======= ====== ======= =======
</TABLE>
See accompanying notes to unaudited consolidated financial statements.
5
<PAGE> 6
PEOPLE'S BANCSHARES, INC. AND SUBSIDIARY
========================================
<TABLE>
CONSOLIDATED STATEMENTS OF CASH FLOWS
-------------------------------------
(Dollars in thousands)
(unaudited)
<CAPTION>
Three Months Ended
March 31,
---------------------------
1997 1996
--------- ---------
<S> <C> <C>
Cash flows from operating activities:
Net income $ 1,308 $ 687
Adjustments to reconcile net income to net
cash provided (used) by operating activities:
Provision for loan losses - 75
Depreciation and amortization 342 312
Gain on sale of banking premises and equipment - (62)
Losses on sales of securities, net 11 24
Loans originated for sale (54,412) (34,691)
Principal balance of loans sold 63,929 23,414
Write-downs, provisions, and gain or loss on sales of other real estate owned 7 (23)
Deferred tax provision - 300
Increase in other assets, net of other liabilities (74) (1,204)
--------- ---------
Net cash provided (used) by operating activities 11,111 (11,168)
--------- ---------
Cash flows from investing activities:
Cash and cash equivalents received through acquisition - 20,664
Proceeds from sales of investment securities available for sale 42,723 -
Proceeds from amortization of mortgage-backed securities
available for sale 6,004 10,232
Purchase of securities available for sale (110,987) (53,136)
Loan (originations and purchases) amortization and payoffs, net 708 3,445
Proceeds from sales of other real estate owned 66 254
Additions to banking premises and equipment, net (252) (458)
--------- ---------
Net cash used in investing activities (61,738) (18,999)
--------- ---------
Cash flows from financing activities:
Net (decrease) increase in deposits (7,907) 2,975
Net increase (decrease) in borrowings with maturities of three months or less 7,408 (27,828)
Proceeds from issuance of borrowings with maturities in excess of three months 88,200 54,920
Repayment of borrowings with maturities in excess of three months (35,170) -
Increase in mortgagors' escrow accounts 280 335
Proceeds from issuance of common stock - 7,545
Proceeds from exercise of stock warrants and options 155 241
Cash dividends (323) (116)
--------- ---------
Net cash provided by financing activities 52,643 38,072
--------- ---------
Net increase in cash and cash equivalents 2,016 7,905
Cash and cash equivalents at beginning of period 12,478 11,303
--------- ---------
Cash and cash equivalents at end of period $ 14,494 $ 19,208
========= =========
</TABLE>
See accompanying notes to unaudited consolidated financial statements.
6
<PAGE> 7
<TABLE>
<S> <C> <C>
Supplementary information:
Interest paid on deposit accounts $ 2,847 $ 1,712
Interest paid on borrowed funds 1,856 1,687
Transfer from loans to other real estate owned, net 426 -
Income taxes paid 247 -
Increase in due from brokers, net 214 15,133
Assets acquired in acquisition of branches - 124,845
Liabilities assumed in acquisition of branches - 145,509
</TABLE>
See accompanying notes to unaudited consolidated financial statements.
7
<PAGE> 8
NOTES TO UNAUDITED CONSOLIDATED FINANCIAL STATEMENTS
- ----------------------------------------------------
SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES
- ------------------------------------------
(1) The Consolidated Balance Sheet as of March 31, 1997, and the Consolidated
Statements of Income, Consolidated Statements of Changes in Stockholders'
Equity, and Consolidated Statements of Cash Flows for the periods ended
March 31, 1997 and 1996 of People's Bancshares, Inc. and Subsidiary (the
"Company") furnished in this report are unaudited; however, these interim
consolidated financial statements reflect all adjustments that are, in the
opinion of management, necessary for a fair statement of the results for
the interim periods presented. Interim results are not necessarily
indicative of results to be expected for the year.
The unaudited consolidated interim financial statements furnished in this
report are intended to be read in conjunction with the consolidated
financial statements of the Company presented in its Annual Report for the
year ended December 31, 1996.
(2) EARNINGS PER SHARE
------------------
Earnings per share is computed using the weighted average number of shares
and common stock equivalents outstanding during each period. Earnings per
share computations include common stock equivalents attributable to
outstanding stock options and warrants. Weighted average equivalent shares
outstanding for the quarters ended March 31, 1997 and 1996 were
approximately 3,646,000 and 2,744,000, respectively.
8
<PAGE> 9
MANAGEMENT'S DISCUSSION AND ANALYSIS
OF
FINANCIAL CONDITION AND RESULTS OF OPERATIONS
The following discussion and analysis should be read in conjunction with the
unaudited consolidated financial statements and related notes included in this
report.
ASSETS
The Company's total assets at March 31, 1997 were $548.8 million, an increase of
$52.6 million from December 31, 1996. The increase primarily reflects an
increase of $59.8 million in investment securities consisting primarily of
mortgage-backed securities funded with a $60.4 million increase in borrowed
funds.
LOANS
Total loans and loans held for sale decreased $11.1 million primarily as a
result of a decrease in loans held for sale. At March 31, 1997, the Company's
loans and loans held for sale were as follows:
<TABLE>
<CAPTION>
(in millions)
<S> <C>
Residential mortgage loans $171,208
Commercial, commercial real estate
and construction loans 86,825
Consumer loans 7,402
--------
Total $265,435
========
</TABLE>
DEPOSITS
Total deposits decreased $7.9 million to $328.3 million at March 31, 1997 from
$336.2 million at December 31, 1996. The decrease in deposits reflects a $1.3
million increase in IRAs and time certificates of deposit offset by a $9.2
million decrease in core deposits.
NON-PERFORMING ASSETS AND ALLOWANCE FOR LOAN LOSSES
The allowance for loan losses has been established to absorb foreseeable losses
inherent in the loan portfolio. The provision for loan losses and the level of
the allowance are evaluated periodically by management and the Board of
Directors. These provisions are the results of the Company's internal loan
review, historical loan loss experience, trends in delinquent and non-accrual
loans, known and inherent risks in the nature and volume of the loan portfolio,
adverse situations that may affect the borrower's ability to repay, collateral
values, an estimate of potential loss exposure on significant credits,
concentrations of credit, and present and prospective economic conditions based
on facts then known.
Periodically, management reviews the portfolio, classifying each loan into
categories by assessing the degree of risk involved. Considering this review,
the Company establishes the adequacy of its allowance and necessary additions
are charged to operations through the provision for loan losses.
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Loan losses are charged against the allowance when management believes the
collectibility of the loan balance is unlikely.
The allowance is an estimate. Ultimate losses may vary from current estimates
and future additions to the allowance may become necessary. In addition,
regulatory agencies, as an integral part of their examination process, review
the Company's allowance and may require the Company to provide additions to the
allowance based on their assessment, which may differ from management's.
At March 31, 1997, the Company's allowance for loan losses totaled $4.4 million
or 1.65% of total loans and loans held for sale and 121.2% of non-performing
loans compared to $4.7 million or 1.71% of total loans and loans held for sale
and 122.1% of non-performing loans at December 31, 1996, and compared to $5.2
million or 1.93% of total loans and loans held for sale and 94.1% of
non-performing loans at March 31, 1996. Management recorded no provision for
loan losses for the three month period ended March 31, 1997, compared to $75,000
for the same period in 1996. The Company recorded a $1.7 million loan loss
allowance in connection with the Branch Acquisition in March 1996. Net
charge-offs were $338,000 for the three month period ended March 31, 1997
compared to net charge-offs of $374,000 for the same period in 1996.
Non-performing assets were $4.5 million or 0.81% of total assets at March 31,
1997 compared to $4.4 million or 0.88% of total assets at December 31, 1996 and
$5.8 million or 1.09% of total assets at March 31, 1996.
EQUITY
The Company completed a rights offering on March 8, 1996 raising net proceeds of
$7.5 million through the sale of approximately 968,000 shares of its common
stock. At March 31, 1997, the Company had 3,592,170 common shares outstanding.
RESULTS OF OPERATIONS
OVERVIEW
Comparisons of year to year operating results have been significantly affected
by the purchase of five branches from subsidiaries of Fleet Bank, N.A. and
Shawmut Bank N.A. (the "Branch Acquisition") in March 1996 that have resulted in
the Company increasing its asset size from $324.4 million at December 31, 1995
to $548.8 million at March 31, 1997. Operating results have also been
significantly affected by the growth of People's Mortgage Corporation ("PMC")
which is reflected in gains on sales of loans of $913,000, PMC operating
expenses of $1.7 million, and income before income taxes of $290,000 from PMC
operations in the first three months of 1997 compared to $459,000, $1.1 million,
and a net loss before income taxes of $97,000, respectively, in the
corresponding period of 1996. Quarterly comparisons have also been significantly
affected by the Company increasing its investment portfolio (primarily
mortgage-backed securities) by $28.9 million since March 31, 1996 funded by an
increase of $31.0 million in borrowed funds. Net income amounted to $1.3 million
or $0.36 per share (primary and fully diluted) for the three months ended March
31, 1997 compared to net income of $687,000 or $0.25 per share (primary and
fully diluted) for the same period in 1996.
10
<PAGE> 11
NET INTEREST INCOME
Net interest income increased $1.5 million for the three months ended March 31,
1997 compared to the same period in 1996. This change resulted mostly from
increased average earning assets. For the first three months of 1997, average
earning assets increased 46.0% compared to the same period in 1996.
Interest and dividend income increased to $9.7 million for the three months
ended March 31, 1997 from $6.6 million for the same period in 1996. The yield on
average earning assets increased to 7.62% for the three months ended March 31,
1997 from 7.56% for the same period in 1996. Yields on loans decreased to 8.32%
for the three months ended March 31, 1997 compared to 8.63% for the same period
in 1996. The decrease in loan yields is attributable to the continuing
amortization of the Company's portfolio of higher rate-higher risk multi-family
real estate loans and to pricing pressure on new commercial and commercial real
estate originations. Yields on investments increased to 6.90% for the three
months ended March 31, 1997 compared to 6.53% for the same period in 1996.
Interest expense increased to $5.3 million for the three months ended March 31,
1997 from $3.7 million for the same period in 1996. This increase was due to a
$576,000 increase in interest expense on borrowed funds and a $1.1 million
increase in interest expense on deposits for the three months ended March 31,
1997 compared to the same period in 1996.
During the first three months of 1997, average borrowed funds amounted to $174.6
million compared to $134.6 million during the same period of 1996. The Company
has increased its use of borrowed funds to fund purchases of mortgage-backed
securities. Rates paid on average borrowed funds were 5.68% for the three months
ended March 31, 1997 compared to 5.66% for the same period in 1996.
The increase in deposit interest expense was due to an increase in the average
cost of deposits to 3.88% for the three month period ended March 31, 1997 from
3.73% for the same period in 1996. Deposit interest expense also increased due
to an increase in average deposits to $293.1 million for the three months ended
March 31, 1997 compared to $188.0 million for the same period in 1996.
PROVISION FOR LOAN LOSSES
There was no provision for loan losses necessary for the three months ended
March 31, 1997. The provision for loan losses amounted to $75,000 for the three
month period in 1996. The prior period provision for loan losses was deemed
necessary due to the continued weakness of the local economy and real estate
market. If the local economy and real estate market deteriorate, it may be
necessary for the Company to make additional provisions for loan losses.
OTHER INCOME
Other income was $1.3 million for the three months ended March 31, 1997 compared
to $895,000 for the same period in 1996. The quarterly increase is primarily
attributable to a $454,000 increase in gains from sales of loans and a $68,000
increase in customer service fees. The increase in loan sale gains reflects the
growth of People's Mortgage Corporation since March 31, 1995 while the increase
in customer service fees reflects the Company's increased depositor base
resulting from the Branch Acquisition.
11
<PAGE> 12
OPERATING EXPENSES
Total operating expenses amounted to $3.6 million for the three months ended
March 31, 1997 compared to $2.7 million for the same period in 1996. Operating
expenses for the period ended March 31, 1996 include an estimated $223,000 in
non-recurring expenses related to the Branch Acquisition.
Salaries and benefits expense increased $544,000 for the three months ended
March 31, 1997 compared to the same period in 1996. The increase in salaries and
benefits reflects general salary increases, added lending and PMC staffing, and
operations of the five branches acquired in the Branch Acquisition in 1996.
Occupancy and equipment expense increased $103,000 for the three months ended
March 31, 1997 compared to the same period in 1996. Data processing expense
increased $166,000 for the three months ended March 31, 1997 compared to the
same period in 1996. Professional fees expense increased $89,000 for the three
months ended March 31, 1997, compared to the same period in 1996. Other real
estate owned expenses increased $35,000 for the three months ended March 31,
1997 compared to the same period in 1996. Other general and administrative
expenses increased $30,000 for the three months ended March 31, 1997 compared to
the same period in 1996. All increases in operating expense, other than OREO
related expenses, are primarily due to additional costs associated with acquired
branches and the growth of PMC.
PROVISION FOR INCOME TAXES
The Company recognized income tax expense of $741,000 in the three months ended
March 31, 1997 compared to income tax expense of $407,000 for the same period in
1996. The effective tax rate for the three months ended March 31, 1997 was 36.2%
compared to 37.2% for the same period in 1996. The decrease in the effective tax
rate is due to lower state income taxes as a result of the February 1996
formation of PSB Security Corporation I.
LIQUIDITY AND CAPITAL RESOURCES
The Company's liquidity management focuses upon the Company's ability to provide
the cash reserves and cash equivalents necessary to honor contractual
liabilities and commitments, meet depositors' withdrawal demands, fund
operations and provide customers with adequate available credit. The Company's
primary sources of liquidity are customer deposits, principal and interest
payments on loans, interest and dividends on investments and proceeds from the
maturity or sale of investments. The Company also has the ability to borrow from
the Federal Home Loan Bank of Boston on a collateralized basis. The Company
believes that it has adequate liquidity to meet its needs.
At March 31, 1997, the Company's capital exceeded all regulatory requirements.
The Company's Tier 1 leverage capital ratio at March 31, 1997 was 5.89%,
compared to 6.01% at December 31, 1996. The Company's book value per share was
$8.57 at March 31, 1997, $8.72 at December 31, 1996, and $8.20 at March 31,
1996. The Company's book value per share was adversely affected in the first
quarter of 1997 because of a $1.4 million increase in the net unrealized loss on
securities available for sale, net of tax effects, that is included in equity as
a valuation account (but not in Tier 1 capital) under generally accepted
accounting principles.
12
<PAGE> 13
OTHER INFORMATION
On September 30, 1995, the Company entered into an agreement with Fleet Bank of
Massachusetts, N.A. and Shawmut Bank of Massachusetts, N.A. to acquire certain
assets and liabilities of five branches that were required to be divested in
connection with the merger of Shawmut National Corporation with and into Fleet
Financial Group, Inc. The branch acquisition was completed on March 8, 1996.
On March 8, 1996 the Company completed an offering of its common stock in order
to maintain its status as a "well-capitalized" institution as defined by the
FDIC upon the completion of the Branch Acquisition. The Company raised net
proceeds of $7.5 million upon completion of the offering.
On April 15, 1997, the Company declared an $0.11 dividend to be paid on May 14,
1997 to shareholders of record on April 30, 1997.
13
<PAGE> 14
PART II - OTHER INFORMATION
ITEM 5 OTHER INFORMATION
Richard S. Straczynski was appointed President and Chief
Executive Officer of the Company effective April 7, 1997. Mr.
Straczynski served as President and Chief Operating Officer of
the Hibernia Savings Bank of Quincy, Massachusetts from 1995
until 1997. Prior to that he served as a Regional President of
Citizens Bank of Massachusetts, as a Regional President for
the Bank of New England and its successor Fleet Bank of
Massachusetts, N.A., and as an Executive President for the
Bank of New England.
ITEM 6 EXHIBITS AND REPORTS ON FORM 8-K
(a) Exhibits
EXHIBIT DESCRIPTION
3.1 Restated Articles of Organization of the Company (filed as
Exhibit 3.1 to the Company's Annual Report on Form 10-K for
the year ended December 31, 1995 and incorporated herein by
reference)
3.2 By-laws of the Company, as amended and restated (filed as
Exhibit 3.2 to the Company's Annual Report on Form 10-K for
the year ended December 31, 1995 and incorporated herein by
reference)
4.1 Specimen certificate for shares of Common Stock of the Company
(filed as Exhibit 4.1 to the Company's Annual Report on Form
10-K for the year ended December 31, 1995 and incorporated
herein by reference)
4.2 Articles IV and VI(I)-(K) of Restated Articles of Organization
of the Company (see Exhibit 3.1)
4.3 Articles I and IV of By-laws of the Company (see Exhibit 3.2)
27 Financial Data Schedule (Filed herewith).
(b) Reports on Form 8-K. No reports on Form 8-K were filed during
the quarter ended March 31, 1997
14
<PAGE> 15
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.
PEOPLE'S BANCSHARES, INC.
5/14/97 By: /s/ Richard S. Straczynski
----------------- -------------------------------------
Date Richard S. Straczynski
President and Chief Executive Officer
5/14/97 By: /s/ Colin C. Blair
----------------- -------------------------------------
Date Colin C. Blair
Chief Financial Officer and Treasurer
15
<PAGE> 16
EXHIBIT INDEX
EXHIBIT DESCRIPTION
3.1 Restated Articles of Organization of the Company (filed as
Exhibit 3.1 to the Company's Annual Report on Form 10-K for
the year ended December 31, 1995 and incorporated herein by
reference)
3.2 By-laws of the Company, as amended and restated (filed as
Exhibit 3.2 to the Company's Annual Report on Form 10-K for
the year ended December 31, 1995 and incorporated herein by
reference)
4.1 Specimen certificate for shares of Common Stock of the Company
(filed as Exhibit 4.1 to the Company's Annual Report on Form
10-K for the year ended December 31, 1995 and incorporated
herein by reference)
4.2 Articles IV and VI(I)-(K) of Restated Articles of Organization
of the Company (see Exhibit 3.1)
4.3 Articles I and IV of By-laws of the Company (see Exhibit 3.2)
27 Financial Data Schedule (Filed herewith).
16
<TABLE> <S> <C>
<ARTICLE> 9
<LEGEND>
THIS SCHEDULE CONTAINS SUMMARY FINANCIAL INFORMATION EXTRACTED FROM PEOPLE'S
BANCSHARES, INC. AND SUBSIDIARY QUARTERLY FINANCIAL STATEMENTS FOR THE THREE
MONTHS ENDED MARCH 31, 1997 AND IS QUALIFIED IN ITS ENTIRETY BY REFERENCE TO
SUCH FINANCIAL STATEMENTS CONTAINED IN SUCH FORM 10-Q.
</LEGEND>
<MULTIPLIER> 1,000
<CURRENCY> US $
<S> <C>
<PERIOD-TYPE> 3-MOS
<FISCAL-YEAR-END> DEC-31-1996
<PERIOD-START> JAN-01-1997
<PERIOD-END> MAR-31-1997
<EXCHANGE-RATE> 1
<CASH> 14,494
<INT-BEARING-DEPOSITS> 0
<FED-FUNDS-SOLD> 0
<TRADING-ASSETS> 0
<INVESTMENTS-HELD-FOR-SALE> 252,346
<INVESTMENTS-CARRYING> 0
<INVESTMENTS-MARKET> 0
<LOANS> 249,340
<ALLOWANCE> 4,378
<TOTAL-ASSETS> 548,774
<DEPOSITS> 328,331
<SHORT-TERM> 20,308
<LIABILITIES-OTHER> 477
<LONG-TERM> 164,050
0
0
<COMMON> 359
<OTHER-SE> 30,431
<TOTAL-LIABILITIES-AND-EQUITY> 548,774
<INTEREST-LOAN> 5,599
<INTEREST-INVEST> 4,091
<INTEREST-OTHER> 39
<INTEREST-TOTAL> 9,729
<INTEREST-DEPOSIT> 2,836
<INTEREST-EXPENSE> 5,315
<INTEREST-INCOME-NET> 4,414
<LOAN-LOSSES> 0
<SECURITIES-GAINS> (11)
<EXPENSE-OTHER> 3,647
<INCOME-PRETAX> 2,049
<INCOME-PRE-EXTRAORDINARY> 2,049
<EXTRAORDINARY> 0
<CHANGES> 0
<NET-INCOME> 1,308
<EPS-PRIMARY> .36
<EPS-DILUTED> .36
<YIELD-ACTUAL> 3.07
<LOANS-NON> 3,610
<LOANS-PAST> 0
<LOANS-TROUBLED> 351
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<ALLOWANCE-CLOSE> 4,378
<ALLOWANCE-DOMESTIC> 3,219
<ALLOWANCE-FOREIGN> 0
<ALLOWANCE-UNALLOCATED> 1,159
</TABLE>
