<PAGE>

               UNITED STATES SECURITIES AND EXCHANGE COMMISSION
                            WASHINGTON, D.C. 20549

                                  FORM 10-QSB
Mark One


[ X ]   QUARTERLY REPORT UNDER SECTION 13 OR 15(d) OF THE SECURITIES AND
               EXCHANGE ACT OF 1934

             For the quarterly period ended    September 30, 1999
                                            ------------------------

[   ]   TRANSITION REPORT UNDER SECTION 13 OR 15(d) OF THE EXCHANGE ACT

             For the transition period from __________  to __________

                        Commission File Number: 333-12293

                              Peoples Bancorp, Inc.
     ---------------------------------------------------------------------

       (Exact name of small business issuer as specified in its charter)

           Georgia                                    58-2265412
-------------------------------               -------------------------------
(State or other jurisdiction of                     (IRS Employer
incorporation or organization)                     Identification No.)

                516 Bankhead Highway, Carrollton, Georgia 30117
              ---------------------------------------------------
                   (Address of principal executive offices)

                                (770) 838-9608
                      -----------------------------------
                          (Issuer's telephone number)

                                       N/A
       ----------------------------------------------------------------
     (Former name, former address and former fiscal year, if changed since last
     report)

Check whether the issuer (1) 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
    -----    -----

               APPLICABLE ONLY TO ISSUERS INVOLVED IN BANKRUPTCY
                  PROCEEDINGS DURING THE PRECEDING FIVE YEARS

Check whether the registrant filed all documents and reports required to be
filed by Section 12, 13 or 15(d) of the Exchange Act after the distribution of
securities under a plan confirmed by court.
Yes       No
   -----     -----

                     APPLICABLE ONLY TO CORPORATE ISSUERS

State the number of shares outstanding of each of the issuer's classes of common
equity, as of November 1, 1999:   800,000; $.01 par value.

Transitional Small Business Disclosure Format (Check One)  Yes       No   X
                                                               -----    -----
<PAGE>

                      PEOPLES BANCORP, INC. AND SUBSIDIARY



--------------------------------------------------------------------------------

                                      INDEX
                                      -----

<TABLE>
<CAPTION>
                                                                                                                        Page
                                                                                                                        ----
<S>                                                                                                                     <C>

PART I.     FINANCIAL INFORMATION

            Item 1.  Financial Statements

               Consolidated Balance Sheet - September 30, 1999............................................................3

               Consolidated Statements of Income and Comprehensive
                Income (Loss) - Three Months Ended September 30, 1999 and 1998
                and Nine Months Ended September 30, 1999 and 1998.........................................................4

               Consolidated Statement of Cash Flows - Nine
                Months Ended September 30, 1999 and 1998..................................................................5

               Notes to Consolidated Financial Statements.................................................................6

            Item 2.  Management's Discussion and Analysis of
                      Financial Condition and Results of Operations.......................................................7


PART II.    OTHER INFORMATION

            Item 4 - Submission of Matters to a Vote of Security Holders.................................................15

            Item 6 - Exhibits and Reports on Form 8-K....................................................................15

            Signatures...................................................................................................16
</TABLE>

                                       2
<PAGE>

                        PART I - FINANCIAL INFORMATION
                             FINANCIAL STATEMENTS

                     PEOPLES BANCORP, INC. AND SUBSIDIARY

                          CONSOLIDATED BALANCE SHEET
                              SEPTEMBER 30, 1999
                                  (Unaudited)

                    Assets
                    ------
Cash and due from banks                                         $       789,364
Interest-bearing deposits in banks                                      199,000
Federal funds sold                                                    1,983,540
Securities available-for-sale, at fair value                         12,755,175

Loans                                                                25,026,258
Less allowance for loan losses                                          311,464
                                                                ----------------
       Loans, net                                                    24,714,794
                                                                ----------------

Premises and equipment                                                3,534,040
Other assets                                                            457,660
                                                                ----------------

       Total assets                                             $    44,433,573
                                                                ================


      Liabilities and Stockholders' Equity
      ------------------------------------

Deposits
    Demand                                                      $     2,353,104
    Interest-bearing demand                                          13,342,221
    Savings                                                             218,815
    Time                                                             20,195,590
                                                                ----------------
       Total deposits                                                36,109,730
Other liabilities                                                       376,310
                                                                ----------------
       Total liabilities                                             36,486,040
                                                                ----------------

Commitments and contingent liabilities

Stockholders' equity
    Preferred stock, par value $.01; 1,000,000 shares
     authorized; none issued or outstanding                                   -
    Common stock, par value $.01; 10,000,000 shares
     authorized; 800,000 shares issued and outstanding                    8,000
    Capital surplus                                                   7,970,587
    Retained earnings                                                    77,100
    Accumulated other comprehensive loss                               (108,154)
                                                                ----------------
       Total stockholders' equity                                     7,947,533
                                                                ----------------

       Total liabilities and stockholders' equity               $    44,433,573
                                                                ================

The accompanying notes are an integral part of these consolidated financial
statements.

                                       3
<PAGE>

                     PEOPLES BANCORP, INC. AND SUBSIDIARY

                       CONSOLIDATED STATEMENTS OF INCOME
                        AND COMPREHENSIVE INCOME (LOSS)
                THREE MONTHS ENDED SEPTEMBER 30, 1999 AND 1998
               AND NINE MONTHS ENDED SEPTEMBER 30, 1999 AND 1998
                                  (Unaudited)

<TABLE>
<CAPTION>
                                                                 Three Months Ended                     Nine Months Ended
                                                                    September 30,                         September 30,
                                                           --------------------------------     --------------------------------

                                                                1999              1998               1999            1998
                                                           --------------    --------------     --------------    --------------
<S>                                                        <C>                <C>                <C>              <C>
Interest income
    Loans                                                  $      575,062     $     351,272      $   1,538,325    $      904,085
    Taxable securities                                            177,627           163,573            498,569           440,869
    Deposits in banks                                               1,200             1,980              4,754             5,940
    Federal funds sold                                             41,873            55,265            119,738           160,503
                                                           --------------    --------------     --------------    --------------
              Total interest income                               795,762           572,090          2,161,386         1,511,397
                                                           --------------    --------------     --------------    --------------

Interest expense on deposits                                      384,735           266,052          1,051,989           651,751
                                                           --------------    --------------     --------------    --------------

              Net interest income                                 411,027           306,038          1,109,397           859,646
Provision for loan losses                                          47,500            30,000            120,500            84,000
                                                           --------------    --------------     --------------    --------------
              Net interest income after
                provision for loan losses                         363,527           276,038           988,897            775,646
                                                           --------------    --------------     --------------    --------------

Service charges on deposit accounts                                18,032            11,623             48,588            30,263
Gain on sales of securities available-for-sale                          -             5,227             15,950            20,557
Other operating income                                             16,485            41,664             91,162           106,566
                                                           --------------    --------------     --------------    --------------
              Total other income                                   34,517            58,514            155,700           157,386
                                                           --------------    --------------     --------------    --------------

Other expenses
    Salaries and employee benefits                                171,872           149,520            500,322           440,734
    Occupancy and equipment expenses                               37,084            17,257             19,717            49,558
    Other operating expenses                                      114,125           140,556            339,515           337,992
                                                           --------------    --------------     --------------    --------------
              Total other expenses                                323,081           307,333            859,554           828,284
                                                           --------------    --------------     --------------    --------------

              Income before income taxes                           74,963            27,219            285,043           104,748

Income tax expense                                                 26,363                 -             62,595                 -
                                                           --------------    --------------     --------------    --------------

              Net income                                           48,600            27,219            222,448           104,748
                                                           --------------    --------------     --------------    --------------

Other comprehensive income (loss):
    Unrealized gains (losses) on securities
      available-for-sale arising during period, net of tax        (22,227)           47,232           (149,407)           54,463
       Less: reclassification adjustment
          for gains included in net income, net of tax                  -            (5,227)           (10,527)          (20,557)
                                                           --------------    --------------     --------------    --------------
    Total other comprehensive income (loss)                       (22,227)           42,005           (159,934)           33,906
                                                           --------------    --------------     --------------    --------------

              Comprehensive income                         $       26,373     $      69,224      $      62,514    $      138,654
                                                           ==============    ==============     ==============    ==============

Basic and diluted earnings per common share                $         0.06     $        0.03      $        0.28    $         0.13
                                                           ==============    ==============     ==============    ==============

Weighted average shares outstanding (basic
   and diluted)                                                   800,000           800,000            800,000           800,000
                                                           ==============    ==============     ==============    ==============

Cash dividends per common share                            $            -     $           -      $          -     $            -
                                                           ==============    ==============     ==============    ==============
</TABLE>

The accompanying notes are an integral part of these consolidated financial
statements.

                                       4
<PAGE>

                     PEOPLES BANCORP, INC. AND SUBSIDIARY

                     CONSOLIDATED STATEMENTS OF CASH FLOWS
                 NINE MONTHS ENDED SEPTEMBER 30, 1999 AND 1998
                                  (Unaudited)

<TABLE>
<CAPTION>
                                                                                        1999                       1998
                                                                                ---------------------     -----------------------
<S>                                                                             <C>                       <C>
OPERATING ACTIVITIES
    Net income                                                                  $            222,448      $              104,748
    Adjustments to reconcile net income  to net cash
        provided by operating activities:
        Depreciation and amortization                                                         29,557                      89,229
        Provision for loan losses                                                            120,500                      84,000
        Gain on sale of securities available-for-sale                                        (15,950)                    (20,557)
        Increase in interest receivable                                                      (62,135)                    (56,107)
        Increase in interest payable                                                          79,604                      28,334
        Other operating activities                                                            32,985                      32,220
                                                                                ---------------------     -----------------------

              Net cash provided by operating activities                                      407,009                     261,867
                                                                                ---------------------     -----------------------

INVESTING ACTIVITIES
    Purchases of securities available-for-sale                                            (5,111,107)                (10,049,246)
    Proceeds from sales of securities available-for-sale                                   1,200,872                   3,519,336
    Proceeds from maturities of securities available-for-sale                              2,242,704                   1,111,402
    Net increase in interest-bearing deposits in banks                                        (1,000)                   (198,000)
    Net (increase) decrease in Federal funds sold                                           (533,382)                  2,868,612
    Net increase in loans                                                                 (6,988,455)                 (6,434,838)
    Purchase of premises and equipment                                                    (1,184,436)                    (32,738)
                                                                                ---------------------     -----------------------

              Net cash used in investing activities                                      (10,374,804)                 (9,215,472)
                                                                                ---------------------     -----------------------

FINANCING ACTIVITIES
    Net increase in deposits                                                               9,718,589                   8,866,017
                                                                                ---------------------     -----------------------

              Net cash provided by financing activities                                    9,718,589                   8,866,017
                                                                                ---------------------     -----------------------

Net decrease  in cash and due from banks                                                    (249,206)                    (87,588)

Cash and due from banks, beginning of period                                               1,038,570                     451,967
                                                                                ---------------------     -----------------------

Cash and due from banks, end of period                                          $            789,364      $              364,379
                                                                                =====================     =======================

SUPPLEMENTAL DISCLOSURES OF CASH FLOW INFORMATION
    Cash paid (received) during period for:
        Interest                                                                $            972,385      $              623,417

        Income taxes                                                                          80,422      $               (3,056)

NONCASH TRANSACTION
    Net unrealized (gains) losses on securities available-for-sale              $            241,819      $              (33,906)
</TABLE>

The accompanying notes are an integral part of these consolidated financial
statements.

                                       5
<PAGE>

                     PEOPLES BANCORP, INC. AND SUBSIDIARY
                  NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
                                  (Unaudited)




NOTE 1. BASIS OF PRESENTATION

        The consolidated financial information included herein is unaudited;
        however, such information reflects all adjustments (consisting solely of
        normal recurring adjustments) which are, in the opinion of management,
        necessary for a fair statement of results for the interim period.

        The results of operations for the nine month period ended September 30,
        1999 are not necessarily indicative of the results to be expected for
        the full year.


NOTE 2. CURRENT ACCOUNTING DEVELOPMENTS

        In June 1998, the Financial Accounting Standards Board issued SFAS No.
        133, "Accounting for Derivative Instruments and Hedging Activities". The
        effective date of this statement has been deferred by SFAS No. 137 until
        fiscal year beginning after June 15, 2000. However, the statement
        permits early adoption as of the beginning of any fiscal quarter after
        its issuance. The Company expects to adopt this statement effective
        January 1, 2001. SFAS No. 133 requires the Company to recognize all
        derivatives as either assets or liabilities in the balance sheet at fair
        value. For derivatives that are not designated as hedges, the gain or
        loss must be recognized in earnings in the period of change. For
        derivatives that are designated as hedges, changes in the fair value of
        the hedged assets, liabilities, or firm commitments must be recognized
        in earnings or recognized in other comprehensive income until the hedged
        item is recognized in earnings, depending on the nature of the hedge.
        The ineffective portion of a derivative's change in fair value must be
        recognized in earnings immediately. Management has not yet determined
        what effect the adoption of SFAS No. 133 will have on the Company's
        earnings or financial position.

        There are no other recent accounting pronouncements that have had, or
        are expected to have, a material effect on the Company's financial
        statements.

                                       6
<PAGE>

                     PEOPLES BANCORP, INC. AND SUBSIDIARY




Item 2. MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS
        OF OPERATIONS

        The following is management's discussion and analysis of certain
        significant factors which have affected the financial position and
        operating results of the Company and its bank subsidiary, Peoples Bank
        of West Georgia, during the periods included in the accompanying
        consolidated financial statements.

        SPECIAL CAUTIONARY NOTICE REGARDING FORWARD LOOKING STATEMENTS

        Certain of the statements made herein under the caption "Management's
        Discussion and Analysis of Financial Condition and Results of
        Operations" ("MD&A") are forward-looking statements for purposes of the
        Securities Act of 1933, as amended (the "Securities Act") and the
        Securities Exchange Act of 1934, as amended (the "Exchange Act"), and as
        such may involve known and unknown risks, uncertainties and other
        factors which may cause the actual results, performance or achievements
        of the Company to be materially different from future results,
        performance or achievements expressed or implied by such forward-looking
        statements. Such forward looking statements include statements using the
        words such as "may," "will," "anticipate," "should," "would," "believe,"
        "contemplate," "expect," "estimate," "continue," "may," "intend," or
        other similar words and expressions of the future. Our actual results
        may differ significantly from the results we discuss in these forward-
        looking statements.

        These forward-looking statements involve risks and uncertainties and may
        not be realized due to a variety of factors, including, without
        limitation: the effects of future economic conditions; governmental
        monetary and fiscal policies, as well as legislative and regulatory
        changes; the risks of changes in interest rates on the level and
        composition of deposits, loan demand, and the values of loan collateral,
        securities, and other interest-sensitive assets and liabilities;
        interest rate risks; the effects of competition from other commercial
        banks, thrifts, mortgage banking firms, consumer finance companies,
        credit unions, securities brokerage firms, insurance companies, money
        market and other mutual funds and other financial institutions operating
        in the Company's market area and elsewhere, including institutions
        operating regionally, nationally, and internationally, together with
        such competitors offering banking products and services by mail,
        telephone, computer, and the Internet; the possible effects of the Year
        2000 issues on the Company.

                                       7
<PAGE>

        Management's current assessment and estimates with respect to the
        Company's Year 2000 compliance efforts and the impact of Year 2000
        issues on the Company's business and operations have been included in
        the MD&A. Various factors could cause actual plans and results to differ
        materially from those contemplated by such assessments, estimates and
        forward-looking statements, many of which are beyond the control of the
        Company. Some of these factors include, but are not limited to
        representations by the Company's vendors and counterparties,
        technological advances, economic considerations, and consumer
        perceptions. The Company's Year 2000 compliance program is an ongoing
        process involving continual evaluation and may be subject to change in
        response to new developments.

        Liquidity and Capital Resources

        As of September 30, 1999, the liquidity ratio of the Bank, as determined
        under guidelines established by regulatory authorities, was
        satisfactory.

        As of September 30, 1999, the capital ratios of the Company and the Bank
        were adequate based on regulatory minimum capital requirements. The
        minimum capital requirements and the actual capital ratios for the
        Company and the Bank are as follows:

<TABLE>
<CAPTION>
                                                         Actual
                                             --------------------------------
                                                               Peoples Bank
                                                 Peoples          of West         Regulatory
                                              Bancorp, Inc.       Georgia        Requirement
                                             ---------------  ---------------  ---------------
<S>                                          <C>              <C>              <C>
    Leverage capital ratios                         18.68 %        14.28 %            4.00 %
    Risk-based capital ratios:
       Core capital                                 29.22          22.65              4.00
       Total capital                                30.35          23.80              8.00
</TABLE>


        As the Company continues to grow, the capital ratios will decrease
        rapidly during the next twelve months to levels closer to, but still in
        excess of, regulatory minimum requirements.

                                       8
<PAGE>

Financial Condition

Following is a summary of the Company's balance sheets for the periods
indicated:


<TABLE>
<CAPTION>
                                              September 30,          December 31,
                                                  1999                   1998                 Increase (Decrease)
                                            ------------------     ----------------    ----------------------------------
                                                    (Dollars in Thousands)                  Amount            Percent
                                            ---------------------------------------    ---------------    ---------------
<S>                                         <C>                    <C>                 <C>                <C>
Cash and due from banks                     $             789      $         1,039     $        (250)         (24.06) %
Interest-bearing deposits in banks                        199                  198                  1            0.51
Federal funds sold                                      1,984                1,450                534           36.83
Securities                                             12,755               11,313              1,442           12.75
Loans                                                  24,715               17,847              6,868           38.48
Premises and equipment                                  3,534                2,379              1,155           48.55
Other assets                                              458                  297                161           54.21
                                            ------------------     ----------------    ---------------
                                            $          44,434      $        34,523     $        9,911           28.71
                                            ==================     ================    ===============

Deposits                                    $          36,110      $        26,391     $        9,719           36.83 %
Other liabilities                                         376                  247                129           52.23
Stockholders' equity                                    7,948                7,885                 63            0.80
                                            ------------------     ----------------    ---------------
                                            $          44,434      $        34,523     $        9,911           28.71
                                            ==================     ================    ===============
</TABLE>


As indicated in the above table, the Company's total assets have grown at a rate
of 28.71%. Continued strong deposit growth of 36.83% was invested primarily in
loans. The Company's loan to deposit ratio has increased from 68.44% at December
31, 1998 to 69.31% at September 30, 1999. The Company's total equity was
increased by year-to-date earnings of $222,000 which has put the Company in a
cumulatively profitable position. The Company's total equity was decreased by
$160,000 due to unrealized losses on securities in its portfolio that have
maturities greater than one year.

                                       9
<PAGE>

Results of Operations For The Three Months Ended September 30, 1999 and 1998 and
for the Nine Months Ended September 30, 1999 and 1998

Following is a summary of the Company's operations for the periods indicated.


<TABLE>
<CAPTION>
                                                             Three Months Ended
                                                               September 30,
                                                          1999                1998                  Increase (Decrease)
                                                     --------------     ----------------     --------------------------------
                                                           (Dollars in Thousands)                Amount           Percent
                                                     -----------------------------------     --------------    --------------
<S>                                                  <C>                <C>                  <C>               <C>
Interest income                                      $         796      $           572      $         224          39.16 %
Interest expense                                               385                  266                119          44.74
Net interest income                                            411                  306                105          34.31
Provision for loan losses                                       48                   30                 18          60.00
Other income                                                    35                   58                (23)        (39.66)
Other expense                                                  323                  307                 16           5.21
Income tax expense                                              26                    -                 26              -
Net income                                                      49                   27                 22          81.48
</TABLE>

<TABLE>
<CAPTION>
                                                             Nine Months Ended
                                                               September 30,
                                                          1999                1998                  Increase (Decrease)
                                                     --------------     ----------------     --------------------------------
                                                           (Dollars in Thousands)                Amount           Percent
                                                     -----------------------------------     --------------    --------------
<S>                                                  <C>                <C>                  <C>               <C>
Interest income                                      $       2,161      $         1,511      $         650          43.02 %
Interest expense                                             1,052                  651                401          61.60
Net interest income                                          1,109                  860                249          28.95
Provision for loan losses                                      121                   84                 37          44.05
Other income                                                   156                  157                 (1)         (0.64)
Other expense                                                  859                  828                 31           3.74
Income tax expense                                              63                    -                 63              -
Net income                                                     222                  105                117         111.43
</TABLE>


As indicated in the above table, the Company's net interest income has increased
by $105,000 and $249,000 for the third quarter and first nine months of 1999,
respectively, as compared to the same periods in 1998. The Company's net
interest margin decreased to 4.11% during the first nine months of 1999 as
compared to 4.35% for the previous year. The increase in net interest income is
due primarily to the increased volume of average interest-earning assets. The
decrease in the net interest margin is due to the significant growth in
interest-bearing deposits that has outpaced new loan demand.

                                       10
<PAGE>

The provision for loan losses increased by $18,000 and by $37,000 for the third
quarter and first nine months of 1999, respectively, as compared to the same
periods in 1998. The overall increase is due primarily to the net loan growth.
The Company's allowance for loan losses as a percentage of total loans amounted
to 1.24% at September 30, 1999 as compared to 1.19% at December 31, 1998. The
allowance for loan losses is maintained at a level that is deemed appropriate by
management to adequately cover all known and inherent risks in the loan
portfolio. Management's evaluation of the loan portfolio includes a continuing
review of loan loss experience, current economic conditions which may affect the
borrower's ability to repay and the underlying collateral value.

Information with respect to nonaccrual, past due and restructured loans at
September 30, 1999 and 1998 is as follows:

<TABLE>
<CAPTION>
                                                                                                     September 30,
                                                                                            ---------------------------------
                                                                                                 1999              1998
                                                                                            ---------------   ---------------
                                                                                                 (Dollars in Thousands)
                                                                                            ---------------------------------
<S>                                                                                         <C>               <C>
Nonaccrual loans                                                                            $           22    $            -
Loans contractually past due ninety days or more as to interest
   or principal payments and still accruing                                                              -                 -
Restructured loans                                                                                       -                 -
Loans, now current about which there are serious doubts as to the
   ability of the borrower to comply with loan repayment terms                                           -                 -
Interest income that would have been recorded on nonaccrual
   and restructured loans under original terms                                                           1                 -
Interest income that was recorded on nonaccrual and restructured loans                                   -                 -
</TABLE>

It is the policy of the Bank to discontinue the accrual of interest income when,
in the opinion of management, collection of such interest becomes doubtful. This
status is accorded such interest when (1) there is a significant deterioration
in the financial condition of the borrower and full repayment of principal and
interest is not expected and (2) the principal or interest is more than ninety
days past due, unless the loan is both well-secured and in the process of
collection.

Loans classified for regulatory purposes as loss, doubtful, substandard, or
special mention that have not been included in the table above do not represent
or result from trends or uncertainties which management reasonably expects will
materially impact future operating results, liquidity or capital resources.
These classified loans do not represent material credits about which management
is aware of any information which causes management to have serious doubts as to
the ability of such borrowers to comply with the loan repayment terms.

                                       11
<PAGE>

Information regarding certain loans and allowance for loan loss data through
September 30, 1999 and 1998 is as follows:

<TABLE>
<CAPTION>
                                                                                                 Nine Months Ended
                                                                                                   September 30,
                                                                                          ---------------------------------
                                                                                                1999             1998
                                                                                          ---------------   ---------------
                                                                                               (Dollars in Thousands)
                                                                                          ---------------------------------
<S>                                                                                       <C>               <C>
Average amount of loans outstanding                                                       $       20,758    $       11,639
                                                                                          ===============   ===============

Balance of allowance for loan losses at beginning of period                               $          215    $          101
                                                                                          ---------------   ---------------
                                                                                          ---------------   ---------------

Loans charged off
   Commercial and financial                                                                           18                 -
   Real estate mortgage                                                                                -                 -
   Instalment                                                                                          7                 5
                                                                                          ---------------   ---------------
                                                                                                      25                 5
                                                                                          ---------------   ---------------

Loans recovered
   Commercial and financial                                                                            -                 -
   Real estate mortgage                                                                                -                 -
   Instalment                                                                                          1                 5
                                                                                          ---------------   ---------------
                                                                                                       1                 5
                                                                                          ---------------   ---------------

Net charge-offs                                                                                       24                 -
                                                                                          ---------------   ---------------

Additions to allowance charged to operating expense during period                                    121                84
                                                                                          ---------------   ---------------

Balance of allowance for loan losses at end of period                                     $          312    $          185
                                                                                          ===============   ===============

Ratio of net loans charged off during the period to
   average loans outstanding                                                                        .12%                -%
                                                                                          ===============   ===============
</TABLE>


Other income decreased by $23,000 and $1,000 during the third quarter and first
nine months of 1999, respectively, as compared to the same period in 1998 due to
increases in service charges being offset by decreases in other operating
income, primarily mortgage origination fees.

Other expenses increased during the third quarter and first nine months of 1999,
respectively, as compared to the same periods in 1998 by $16,000 and $31,000 due
to normal increased operating costs associated with the Bank's growth. These
increases were substantially offset by reduced net equipment and occupancy
expenses. The Company purchased in 1998 an existing 24,000 square foot building
in downtown Carrollton, Georgia for its future banking facilities. The sellers
of the building occupied the building during the first quarter of 1999 and paid
the Company $62,000 in rents which is netted against occupancy and equipment
expenses for the nine month period. The sellers have now vacated the premises.
The Company expects to generate rent of $3,000 to $5,000 during the remainder of
1999 from other tenants.

                                       12
<PAGE>

The Company is now anticipating moving into its new facilities in November of
1999. The Company has also entered into a contractual agreement to sell its
current banking facilities to an independent third party for $332,000. This
agreement will have no significant effect on earnings.

The Company has also purchased branch banking facilities in Douglasville,
Georgia at a cost of $412,000. The branch is expected to open in the first
quarter of 2000. The Company also opened a limited banking facility in Villa
Rica, Georgia in July of 1999. This facility is currently being leased at a
monthly lease of $1,225.

The Company has recorded income tax provisions of $26,000 and $63,000 for the
third quarter and first nine months of 1999, respectively. The year to date
effective tax rate for 1999 is 22%. This rate is substantially lower than the
Federal statutory rate of 34% due to the utilization of net operating loss
carryovers. No income tax provisions were recorded through September 30, 1998
due to the utilization of net operating loss carryovers.

Capability of the Bank's Processing Software to Accommodate the Year 2000
-------------------------------------------------------------------------

Project Summary: Senior management and all employees formed the Project Team for
---------------
Year 2000. The project manager is the chief operating officer, which reports to
the Executive Committee and Board. This team has been charged with the
responsibility of assessing the problem, overseeing corrective action, as well
as testing the Year 2000 readiness of all equipment, software, and applications
after upgrades have been made.

Readiness: The team distinguished between critical and non critical systems.
---------
Mission critical systems have priority attention. These systems are: core
processing system, both hardware and software; automated new accounts and loan
document preparation software; ATM processor; network server, and personal
computers. As of December 31, 1998, all personal computers and network server
located within the Bank have been tested and certified by an outside firm to be
Year 2000 ready. The Bank outsources the core processing (checks, deposits,
loans) with an outside firm, The InterCept Group, Thomson, Georgia. Testing
began in early 1998 and covered all future dates identified by the FFIEC as
being potential problem dates. Testing has been completed successfully.

The Bank relies on other outside vendors for many services such as electricity,
phone service, water, gas, bond accounting, accounts payable, and other forms.
The Bank can make no representations about third parties; however, the Bank is
making a coordinated effort to help vendors and customers to be aware of the
Year 2000 issue.

Contingency Plans: Due to the critical nature of our core processing system and
-----------------
our automated platform for new accounts and loan document preparation, we have
developed contingency plans and also adopted the contingency plan of the outside
provider. Contingency plans have also been developed in the event of disruption
of service due to power outage, etc. These plans are in process of testing and
will be ongoing throughout the remainder of 1999. An independent review of the
plan has been completed and the Board is updated monthly on the contingency
testing and any other matter regarding Year 2000.

Costs: After the assessment phase, the Board of Directors approved a budget of
-----
$35,000 to address the Year 2000 Issue, mainly new hardware. This budget is
subject to continuous review and amendment. Management does not expect the cost
of remediation to vary significantly from the present budget.

                                       13
<PAGE>

Customer Awareness and Preparedness: The Bank took an early stance in
-----------------------------------
communicating with our customers and the community in general about the Year
2000 Issues. We have sponsored a Y2K conference addressing present state of
compliance, impact on small business, and legal and insurance issues. Messages
and brochures have been sent to our customers. This will be a continued
concentration throughout 1999. The Bank's web site allows customers to attach to
the FFIEC's Y2K information regarding awareness and fraud prevention.

Credit Risk: Loan customers could also experience business interruptions which
-----------
could affect their ability to repay debts owed to the Bank resulting in adverse
bank performance. Action has been taken by the Bank's senior credit officer to
evaluate the current commercial relationships and is continuing with the
assessment of each new commercial relationship.

The Company is not aware of any known trends, events or uncertainties, other
than the effect of events as described above, that will have or that are
reasonably likely to have a material effect on its liquidity, capital resources
or operations. The Company is also not aware of any current recommendations by
the regulatory authorities which, if they were implemented, would have such an
effect.

                                       14
<PAGE>

                          PART II - OTHER INFORMATION





ITEM 4.  SUBMISSION OF MATTERS TO A VOTE OF SECURITY HOLDERS.

       None


ITEM 6.  EXHIBITS AND REPORTS ON FORM 8-K.

         (a)   Exhibits.

               27. Financial Data Schedule. (For SEC use only.)

         (b)   Reports on Form 8-K.

               None.

                                       15
<PAGE>

                                  SIGNATURES




           In accordance with the requirements of the Exchange Act, the
registrant caused this report to be signed on its behalf by the undersigned,
thereunto duly authorized.


                                PEOPLES BANCORP, INC.
                                    (Registrant)



DATE: November 12, 1999         BY: /s/ Timothy I. Warren
      -------------------           --------------------------------------------
                                    Timothy I. Warren. President and C.E.O.
                                    (Principal Executive Officer)


DATE: November 12, 1999         BY: /s/ Elaine B. Lovvorn
      -------------------           --------------------------------------------
                                    Elaine B. Lovvorn, Secretary and Treasurer
                                    (Principal Financial and Accounting Officer)

                                       16