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SECURITIES AND EXCHANGE COMMISSION

Washington, D.C. 20549



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FORM 10-K

(Mark One)



|x | ANNUAL REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934
|- | ------------------------------------------------------------------------------------

For the fiscal year ended December 31, 2006

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 number 0-13653

THE PEOPLES BANCTRUST COMPANY, INC.

(Exact name of registrant as specified in its charter)



|                                                               |  |                                     
|-------------------------------------------------------------- |  | ------------------------------------
|Alabama                                                        |  | 63-0896239                          
|(State or other jurisdiction of incorporation or organization) |  | (I.R.S. Employer Identification No.)
|                                                               | 
|310 Broad Street, Selma, Alabama                               |  | 36701                               
|(Address of principal executive offices)                       |  | (Zip Code)                          

Registrants telephone number, including area code: (334) 875-1000.

Securities registered pursuant to Section 12(b) of the Act:

Common Stock, par value $.10 per share

(Title of Class)

Securities registered pursuant to Section 12(g) of the Act: None.

Indicate by check mark if the registrant is a well-known seasoned issuer, as defined in Rule 405 of the Securities Act. YES ̈NO  x

Indicate by check mark if the registrant is not required to file reports pursuant to Section 13 or Section 15(d) of the Act. YES ̈NO  x

Note  Checking the box above will not relieve any registrant required to file reports pursuant to Section 13 or 15(d) of the Exchange Act from their obligation under those Sections.

Indicate by check mark whether the registrant (1) has filed all reports required to be filed by Section 13 or 15(d) of the Securities Exchange
Act of 1934 during the preceding 12 months (or for such shorter period that the registrant was required to file such reports), and (2) has been subject to such filing requirements for the past 90 days. YES  x    NO ̈

Indicate by check mark if disclosure of delinquent filers pursuant to Item 405 of Regulation S-K is not contained herein, and will not be contained,
to the best of registrants knowledge, in definitive proxy or information statements incorporated by reference in Part III of this Form 10-K or any amendment to this Form 10-K. ̈

Indicate by check mark whether the registrant is a large accelerated
filer, an accelerated filer, or a non-accelerated filer. See definition of accelerated filer and large accelerated filer in Rule 12b-2 of the Exchange Act. (Check one):

Large accelerated filer ̈Accelerated filer  x                Non-accelerated filer ̈

Indicate by check mark whether the registrant is a shell company (as defined in Rule 12b-2 of the
Exchange Act). YES ̈NO  x

The registrants voting stock is traded on the Nasdaq Capital Market. The aggregate market value of the voting stock held by non-affiliates of the
registrant, computed by reference to the price ($22.70 per share) at which the stock was sold on, February 14, 2007, was approximately $82,806,000. For purposes of this calculation, the term affiliate refers to all executive
officers and directors of the registrant and all stockholders beneficially owning more than 10% of the registrants Common Stock.

As of the close of
business on March 7, 2007, 5,926,795 shares of the registrants Common Stock were outstanding.

Documents Incorporated By
Reference

Part III:

Portions of the definitive proxy
statement for the Annual Meeting of the Shareholders



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PART I



|ITEM 1. | BUSINESS
|------- | --------

Forward-Looking Statements

This Annual Report on Form 10-K of The Peoples BancTrust Company, Inc. (BancTrust) contains forward-looking statements. Additional written or
oral forward-looking statements may be made by BancTrust from time to time in filings with the Securities and Exchange Commission (SEC) or otherwise. The words believe, expect, seek, and
intend and similar expressions identify forward-looking statements, which speak only as of the date the statement is made. Such forward-looking statements are within the meaning of that term in Section 27A of the Securities Act of
1933, as amended, and Section 21E of the Securities Exchange Act of 1934, as amended (the Exchange Act). Such statements may include, but are not limited to, projections of income or loss, expenditures, acquisitions, plans for
future operations, financing needs or plans relating to services of BancTrust, as well as assumptions relating to the foregoing. Forward-looking statements are inherently subject to risks and uncertainties, some of which cannot be predicted or
quantified. See Item 1A. Risk Factors. Future events and actual results could differ materially from those set forth in, contemplated by or underlying the forward-looking statements.

BancTrust does not undertake, and specifically disclaims, any obligation to publicly release the results of revisions which may be made to
forward-looking statements to reflect the occurrence of anticipated or unanticipated events or circumstances after the date of such statements.

Available Information

BancTrust maintains an internet website, located at http://www.peoplesbt.com. Corporate
information, including access to Securities and Exchange Commission filings, is contained on the website.

The Peoples BancTrust Company, Inc. and The
Peoples Bank and Trust Company

BancTrust is a bank holding company incorporated under the laws of the State of Alabama in 1984.
BancTrust is registered under the Bank Holding Company Act of 1956, as amended (the Holding Company Act). BancTrust is the holding company for The Peoples Bank and Trust Company (Peoples Bank), which was chartered by the
State of Alabama in 1902 and acquired by BancTrust in 1985.

BancTrust and Peoples Bank are headquartered in Selma, Alabama. Peoples Bank
conducts a commercial and full-service retail banking business throughout central Alabama. BancTrust operates offices in Dallas, Autauga, Butler, Bibb, Shelby, Elmore, Lee, Tuscaloosa, Jefferson and Montgomery counties and surrounding areas of
Alabama. In addition, Peoples Bank offers trust and financial management services, including a full service brokerage operation through PrimeVest Financial Services, Inc. Some of the services offered by Peoples Bank include business and personal
checking accounts, savings accounts, money market accounts, certificates of deposit, overdraft protection, personal loans, business loans, real estate mortgage loans, internet banking, ATM banking, travelers checks, letters of credit, safe
deposit box rental, credit card opportunities and both foreign and domestic funds transfer via wire transfer or Automated Clearing House (ACH).



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Peoples Bank is a member of the Federal Deposit Insurance Corporation (FDIC), and its deposit
accounts are insured by the Deposit Insurance Fund (DIF) of the FDIC to the maximum allowed by law. Peoples Bank is subject to supervision and regulation by the Board of Governors of the Federal Reserve System (the FRB) and
the State Banking Department of the State of Alabama (the Banking Department). There are also various requirements and restrictions under the laws of the United States of America and the State of Alabama, which affect the operations of
Peoples Bank. These laws include usury requirements, restrictions relating to securities and other requirements. See Regulation, Supervision and Governmental Policy.

BancTrusts executive offices and the main office of Peoples Bank are located at 310 Broad Street, Selma, Alabama 36701. Peoples Bank operates three
offices in Selma, two offices in Tallassee, two offices in Prattville, two offices in Greenville, two offices in Tuscaloosa and one office in each of Birmingham, Montgomery, Georgiana, Centreville, McKenzie, Millbrook, Montevallo, Helena, Eclectic,
North Bibb, Valley Grande, Opelika, Auburn and Bessemer, Alabama. BancTrusts telephone number is (334) 875-1000.

Lending Activities

Loan Composition. The following table sets forth a five-year comparison of major categories of BancTrusts loans.



|                           |  |                 |         |      |   |         |  |      |         |      |   |         |  |   |        
|-------------------------- |  | --------------- | ------- | ---- | - | ------- |  | ---- | ------- | ---- | - | ------- |  | - | -------
|                           |  | At December 31,
|                           |  | (In thousands) 
|                           |  | 2006            |         | 2005 |   | 2004    |  | 2003 |         | 2002
|Commercial and industrial  |  | $               | 152,407 |      | $ | 87,339  |  | $    | 83,315  |      | $ | 127,703 |  | $ | 147,233
|Real estate - mortgage     |  |                 | 294,128 |      |   | 260,833 |  |      | 253,556 |      |   | 237,702 |  |   | 246,885
|Real estate - construction |  |                 | 145,693 |      |   | 102,005 |  |      | 53,807  |      |   | 43,377  |  |   | 41,857 
|Personal                   |  |                 | 46,332  |      |   | 45,196  |  |      | 46,693  |      |   | 51,765  |  |   | 62,522 
|Overdrafts and credit line |  |                 | 2,225   |      |   | 1,019   |  |      | 1,381   |      |   | 1,790   |  |   | 1,918  
|                           |  |                 |         |      |   |         |  |      |         |      |   |         |  |   |        
|Total loans                |  | $               | 640,785 |      | $ | 496,392 |  | $    | 438,752 |      | $ | 462,337 |  | $ | 500,415
|                           |  |                 |         |      |   |         |  |      |         |      |   |         |  |   |        
|Less:                      |  |                 |         |      |   |         |  |      |         |      |   |         |  |   |        
|Unearned discount          |  | $               | 8,986   |      | $ | 883     |  | $    | 733     |      | $ | 933     |  | $ | 1,157  
|Allowance for loan losses  |  |                 | 6,398   |      |   | 6,654   |  |      | 9,043   |      |   | 11,995  |  |   | 10,257 
|                           |  |                 |         |      |   |         |  |      |         |      |   |         |  |   |        
|Total loans, net           |  | $               | 625,401 |      | $ | 488,855 |  | $    | 428,976 |      | $ | 449,409 |  | $ | 489,001
|                           |  |                 |         |      |   |         |  |      |         |      |   |         |  |   |        

Note: Prior period real estate loan categories have been restated as BancTrust modified its
classification criteria for these types of loans. The effect was to increase prior periods real estate construction loans and decrease prior periods real estate mortgage loans by the following amounts: 2004 - $37,626; 2003 - $32,637; and 2002 -
$30,825.

The above loans include agricultural loans totaling approximately $5 million, $3 million, $3 million, $4 million and $8 million
at December 31, 2006, 2005, 2004, 2003 and 2002, respectively. Such agricultural loans do not include other business or personal loans the proceeds of which were used for non-agricultural purposes. The primary source of repayment of these loans
is a farm commodity (e.g., timber). See Note 5 to Consolidated Financial Statements incorporated in Item 15.-Exhibits and Financial Statement Schedules.



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Loan Maturities. The following table reflects at December 31, 2006 the dollar amount of loans
maturing or subject to rate adjustment based on their contractual terms. Loans with fixed rates are reflected based upon the contractual repayment schedules, while loans with variable interest rates are reflected based upon the contractual repayment
schedules up to the contractual rate adjustment dates. Demand loans, loans having no stated schedules of repayments and loans having no stated maturities are reported as due within three months.



|                                      |  |                |         |             |   |           |  |               |         |       |   |         |  |   |        
|------------------------------------- |  | -------------- | ------- | ----------- | - | --------- |  | ------------- | ------- | ----- | - | ------- |  | - | -------
|                                      |  | 0-3 Months     |         | 4-12 Months |   | 1-5 Years |  | After 5 Years |         | Total
|                                      |  | (In thousands)
|Commercial and industrial             |  | $              | 54,674  |             | $ | 14,587    |  | $             | 52,921  |       | $ | 30,225  |  | $ | 152,407
|Real estate-mortgage                  |  |                | 108,958 |             |   | 25,648    |  |               | 99,452  |       |   | 60,070  |  |   | 294,128
|Real estate-construction              |  |                | 121,115 |             |   | 12,272    |  |               | 10,018  |       |   | 2,288   |  |   | 145,693
|Personal, overdrafts and credit lines |  |                | 7,240   |             |   | 5,590     |  |               | 27,042  |       |   | 8,685   |  |   | 48,557 
|                                      |  |                |         |             |   |           |  |               |         |       |   |         |  |   |        
|Total                                 |  | $              | 291,987 |             | $ | 58,097    |  | $             | 189,433 |       | $ | 101,268 |  | $ | 640,785
|                                      |  |                |         |             |   |           |  |               |         |       |   |         |  |   |        
|Loans with fixed interest rates       |  | $              | 16,643  |             | $ | 18,061    |  | $             | 135,351 |       | $ | 96,944  |  | $ | 266,999
|Loans with variable interest rates    |  |                | 275,344 |             |   | 40,036    |  |               | 54,082  |       |   | 4,324   |  |   | 373,786
|                                      |  |                |         |             |   |           |  |               |         |       |   |         |  |   |        
|Total                                 |  | $              | 291,987 |             | $ | 58,097    |  | $             | 189,433 |       | $ | 101,268 |  | $ | 640,785
|                                      |  |                |         |             |   |           |  |               |         |       |   |         |  |   |        

Commercial and Industrial Loans. These loans are generally originated in BancTrusts
primary market area. BancTrusts commercial and industrial loans are made for a variety of business purposes, including working capital, inventory, equipment and capital expansion. At December 31, 2006, commercial and industrial loans
outstanding totaled $152.4 million, or 23.8% of BancTrusts total loan portfolio. The terms for commercial and industrial loans are generally less than one year. Commercial and industrial loan applications must be supported by current financial
information on the borrowers and, where appropriate, by adequate collateral. Approval of the loans is subject to borrowers qualifying for these loans under BancTrusts underwriting standards.

Real Estate Mortgage and Construction Loans. BancTrust also originates one-to-four family, owner-occupied residential mortgage loans secured by
property located in BancTrusts primary market area. BancTrusts residential mortgage loans totaled approximately $95.7 million at December 31, 2006. Commercial, construction and development and other real estate mortgage loans
comprised the balance of the real estate mortgage loan portfolio at December 31, 2006. BancTrust had $439.8 million, or 68.6% of its total loan portfolio, in real estate mortgage and construction loans at December 31, 2006. At
December 31, 2006, BancTrusts exposure from sub-prime mortgages was minimal.

Personal Loans. At December 31, 2006,
BancTrusts personal loan portfolio totaled $48.5 million, or 7.6% of BancTrusts total loan portfolio. BancTrusts personal loan portfolio is comprised of automobile loans (including automobile loans originated by dealers), home
improvement loans, unsecured personal notes, mobile home loans, boat loans and loans secured by savings deposits. Although personal loans tend to have a higher risk of default than other loans, management believes its monitoring and review processes
provide sufficient safeguards. These loans tend to be significantly affected by local economies. Furthermore, BancTrust has experienced increased competition from non-banking institutions in the consumer credit market, as well as reductions in the
credit quality of personal loan applicants. Management has elected to reduce its focus on personal loan originations, and continues to closely monitor the quality and performance of the personal loan portfolio.

Lending Limits. BancTrusts limit for unsecured loans to individual customers is 10% of the capital accounts of BancTrust. The limit for
unsecured and secured loans combined to individual customers is 20% of the capital accounts of BancTrust, subject to certain terms and conditions. For customers desiring loans in excess of BancTrusts lending limits, BancTrust may loan on a
participation basis with its correspondent banks taking the amount of the loan in excess of BancTrusts lending limits. In other cases, BancTrust may refer such borrowers to other institutions.



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Nonaccrual, Past Due, Restructured and Potential Problem Loans. BancTrust classifies its problem
loans into four categories: non-accrual loans, past-due loans, restructured loans, and potential problem loans. Management monitors and evaluates all loans, in an effort to identify those which currently possess, or otherwise indicate
characteristics of weakness, potential weakness or non-conformity with their original terms. A loan is evaluated in light of its performance against its original stated terms, the fair market value of the collateral securing the loan, known or
anticipated economic events and or trends, and the on-going credit worthiness of the borrower and any guarantors. If when a loan is evaluated, there is determined to be a deficiency (or deficiencies) in any of the aforementioned areas, the loan is
added to a list of loans which are subject to heightened scrutiny, and for which additional loss reserves are maintained, depending on the magnitude of the deficiencies.

When management determines that a loan no longer meets the criteria for performing loans and that collection of interest appears doubtful, the loan is placed on nonaccrual status. All loans 90 days past due are placed
on nonaccrual status, unless they are adequately secured and there is reasonable assurance of full collection of principal and interest. Management closely monitors all loans which are contractually 90 days past due, restructured or on nonaccrual
status. These loans are summarized as follows:



|                                                                                                                                                                                                                                                                                    |  |                 |       |      |   |       |  |      |       |      |   |        |  |   |      
|----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------- |  | --------------- | ----- | ---- | - | ----- |  | ---- | ----- | ---- | - | ------ |  | - | -----
|                                                                                                                                                                                                                                                                                    |  | At December 31,
|                                                                                                                                                                                                                                                                                    |  | 2006            |       | 2005 |   | 2004  |  | 2003 |       | 2002
|                                                                                                                                                                                                                                                                                    |  | (In thousands) 
|Loans accounted for on a nonaccrual basis                                                                                                                                                                                                                                           |  | $               | 4,201 |      | $ | 815   |  | $    | 2,121 |      | $ | 2,204  |  | $ | 6,128
|Accruing loans which are contractually past due 90 days or more as to interest or principal payments                                                                                                                                                                                |  |                 | 127   |      |   |      |  |      |      |      |   |       |  |   |     
|Accruing loans, the terms of which have been restructured to provide a reduction or deferral of interest or principal because of a
deterioration in the financial position of the borrower                                                                                          |  |                 | 409   |      |   | 1,547 |  |      | 3,079 |      |   | 13,708 |  |   | 454  
|The gross interest income that would have been recorded in the period then ended if the nonaccrual and restructured loans had been current in
accordance with their original terms and had been outstanding through the period or since origination, if held for part of the period |  |                 | 304   |      |   | 290   |  |      | 277   |      |   | 957    |  |   | 572  
|The amount of interest income on nonaccrual and restructured loans that was included in net income for the period                                                                                                                                                                   |  | $               | 143   |      | $ | 228   |  | $    | 158   |      | $ | 685    |  | $ | 305  

By restructuring loans, it is managements intent to reduce the risk of loss to BancTrust by
amending repayment or other terms in order to allow borrowers to recover from adverse conditions or events affecting their ability to repay, or by procuring additional collateral which would be available to BancTrust in the event of default.

At December 31, 2006, BancTrust had identified approximately $22.3 million in potential problem loans compared to $25.0 million at
December 31, 2005 (including loans identified in the above table). It is managements opinion that these loans are either adequately collateralized in order to mitigate any exposure to loss in the event of default, or that sufficient
allowance for loan loss reserves have been allocated to them in order to absorb any probable losses related to such loans. Aggressive efforts continue to reduce principal, secure additional collateral and improve the overall payment status of these
loans.



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The following table contains certain ratios related to BancTrusts non-performing assets and
allowance for loan losses.



|                                                                                |  |              |   |  |      |   |  |      |   |  |      |   |  |      |  
|------------------------------------------------------------------------------- |  | ------------ | - |  | ---- | - |  | ---- | - |  | ---- | - |  | ---- | -
|                                                                                |  | December 31, |  
|                                                                                |  | 2006         |   |  | 2005 |   |  | 2004 |   |  | 2003 |   |  | 2002 |  
|Allowance for loan losses as a percent of total loans, net of unearned discount |  | 1.01         | % |  | 1.34 | % |  | 2.06 | % |  | 2.60 | % |  | 2.05 | %
|Non performing assets as a percent of total loans net of unearned discount      |  | 0.83         | % |  | 0.72 | % |  | 0.94 | % |  | 1.00 | % |  | 2.65 | %
|Coverage of allowance for loan losses to non-accrual loans                      |  | 152          | % |  | 816  | % |  | 426  | % |  | 544  | % |  | 167  | %
|Coverage of allowance for loan losses to non-performing assets (1)              |  | 122          | % |  | 187  | % |  | 219  | % |  | 261  | % |  | 77   | %



|1) | Non-performing assets consist of loans accounted for on a non-accrual basis and other real estate owned.
|-- | --------------------------------------------------------------------------------------------------------

Management has deployed significant resources toward enhancing processes used in identifying loans it has determined require special attention due to
potential weakness. For example, the criteria by which loans are determined to possess potential weaknesses have been broadened, so as to allow for an increasing number of loans to be more closely monitored, and more frequently reviewed. Management
intends to continue to deploy resources sufficient to the process of identifying and monitoring loans that require special attention due to potential weakness. See Item 7.-Managements Discussion and Analysis of Financial Condition
and Results of Operations.

Loan Loss Experience. See Notes 1 and 5 to Consolidated Financial Statements incorporated in
Item 15.-Exhibits and Financial Statement Schedules.

The allowance for possible loan losses at BancTrust is maintained at
a level which, in managements opinion, is adequate to absorb probable losses on loans in the loan portfolio. The amount of the allowance is affected by: (1) loan charge-offs, which decrease the allowance; (2) recoveries on loans
previously charged-off, which increase the allowance; and (3) the provision for possible loan losses charged against income, which typically increases the allowance. In determining the provision for possible loan losses, management monitors
fluctuations in the allowance resulting from actual charge-offs and recoveries. The level of the allowance is based on periodic analyses of the loan portfolio, and represents an amount deemed adequate to provide for inherent losses, including
collective impairment. Among other considerations in establishing the allowance for loan losses, BancTrust considers economic conditions within industry segments, loan segmentation and historical loss experiences in the loan portfolio. Ultimately,
the total provision applied to income for a given period will generally represent accumulated increases or decreases in the allowance for possible loan losses for that period, which are deemed necessary to maintain the allowance at a level
consistent with generally accepted accounting principles. See Item 1A  Risk Factors.



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The following table is a summary of activity in the allowance for loan losses:



|                                                                                                    |  |                         |       |   |      |   |        |      |  |   |        |   |  |      |        |   |  |   |        |  
|--------------------------------------------------------------------------------------------------- |  | ----------------------- | ----- | - | ---- | - | ------ | ---- |  | - | ------ | - |  | ---- | ------ | - |  | - | ------ | -
|                                                                                                    |  | Year Ended December 31, |      
|                                                                                                    |  | 2006                    |       |   | 2005 |   |        | 2004 |  |   | 2003   |   |  | 2002 |       
|                                                                                                    |  | (Dollars in thousands)  |      
|Balance at beginning of year                                                                        |  | $                       | 6,654 |   |      | $ | 9,043  |      |  | $ | 11,995 |   |  | $    | 10,257 |   |  | $ | 7,666  |  
|Charge-offs:                                                                                        |  |                         |       |   |      |   |        |      |  |   |        |   |  |      |        |   |  |   |        |  
|Commercial and industrial                                                                           |  |                         | 397   |   |      |   | 1,354  |      |  |   | 1,090  |   |  |      | 1,420  |   |  |   | 1,256  |  
|Real estate-mortgage (1)                                                                            |  |                         | 134   |   |      |   | 326    |      |  |   | 1,977  |   |  |      | 1,775  |   |  |   | 1,652  |  
|Personal                                                                                            |  |                         | 583   |   |      |   | 1,423  |      |  |   | 1,314  |   |  |      | 2,219  |   |  |   | 2,269  |  
|Overdrafts and credit lines                                                                         |  |                         |      |   |      |   |       |      |  |   | 28     |   |  |      | 130    |   |  |   | 72     |  
|                                                                                                    |  |                         |       |   |      |   |        |      |  |   |        |   |  |      |        |   |  |   |        |  
|Total charge-offs                                                                                   |  |                         | 1,114 |   |      |   | 3,103  |      |  |   | 4,409  |   |  |      | 5,544  |   |  |   | 5,249  |  
|Recoveries:                                                                                         |  |                         |       |   |      |   |        |      |  |   |        |   |  |      |        |   |  |   |        |  
|Commercial and industrial                                                                           |  |                         | 167   |   |      |   | 632    |      |  |   | 498    |   |  |      | 118    |   |  |   | 30     |  
|Real estate-mortgage (1)                                                                            |  |                         | 144   |   |      |   | 117    |      |  |   | 294    |   |  |      | 733    |   |  |   | 13     |  
|Personal                                                                                            |  |                         | 502   |   |      |   | 640    |      |  |   | 792    |   |  |      | 718    |   |  |   | 569    |  
|Overdrafts and credit lines                                                                         |  |                         |      |   |      |   |       |      |  |   | 22     |   |  |      | 7      |   |  |   | 24     |  
|                                                                                                    |  |                         |       |   |      |   |        |      |  |   |        |   |  |      |        |   |  |   |        |  
|Total recoveries                                                                                    |  |                         | 813   |   |      |   | 1,389  |      |  |   | 1,606  |   |  |      | 1,576  |   |  |   | 636    |  
|                                                                                                    |  |                         |       |   |      |   |        |      |  |   |        |   |  |      |        |   |  |   |        |  
|Net charge-offs                                                                                     |  |                         | (301  | ) |      |   | (1,714 | )    |  |   | (2,803 | ) |  |      | (3,968 | ) |  |   | (4,613 | )
|Additions (Reductions) charged (credited) to operations                                             |  |                         | 45    |   |      |   | (675   | )    |  |   | (149   | ) |  |      | 5,706  |   |  |   | 7,204  |  
|                                                                                                    |  |                         |       |   |      |   |        |      |  |   |        |   |  |      |        |   |  |   |        |  
|Balance at end of year                                                                              |  | $                       | 6,398 |   |      | $ | 6,654  |      |  | $ | 9,043  |   |  | $    | 11,995 |   |  | $ | 10,257 |  
|                                                                                                    |  |                         |       |   |      |   |        |      |  |   |        |   |  |      |        |   |  |   |        |  
|Ratio of net charge-offs to average loans outstanding, net of unearned discounts, during the period |  |                         | 0.05  | % |      |   | 0.37   | %    |  |   | 0.82   | % |  |      | 0.95   | % |  |   | 0.40   | %
|                                                                                                    |  |                         |       |   |      |   |        |      |  |   |        |   |  |      |        |   |  |   |        |  



|(1) | Includes real estate-construction loans.
|--- | ----------------------------------------



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The following table presents an allocation of BancTrusts allowance for loan losses at the dates indicated:



|                          |  |                        |   |      |        |       |   |     |   |        |   |       |  |     |        |  |   |      
|------------------------- |  | ---------------------- | - | ---- | ------ | ----- | - | --- | - | ------ | - | ----- |  | --- | ------ |  | - | -----
|                          |  | At December 31,       
|                          |  | 2006                   |   | 2005 |        | 2004 
|                          |  | (Dollars in thousands)
|                          |  | %                      |   |      | Amount |       | % |     |   | Amount |   | %     |  |     | Amount
|Commercial and industrial |  | 19                     | % |      | $      | 1,187 |   | 28  | % |        | $ | 1,867 |  | 38  | %      |  | $ | 3,416
|Real estate mortgage (1)  |  | 67                     | % |      |        | 4,275 |   | 48  | % |        |   | 3,208 |  | 41  | %      |  |   | 3,727
|Personal                  |  | 11                     | % |      |        | 717   |   | 21  | % |        |   | 1,393 |  | 21  | %      |  |   | 1,900
|Overdraft and credit line |  | 3                      | % |      |        | 219   |   | 3   | % |        |   | 186   |  |    |        |  |   |     
|                          |  |                        |   |      |        |       |   |     |   |        |   |       |  |     |        |  |   |      
|Total Allowance           |  | 100                    | % |      | $      | 6,398 |   | 100 | % |        | $ | 6,654 |  | 100 | %      |  | $ | 9,043
|                          |  |                        |   |      |        |       |   |     |   |        |   |       |  |     |        |  |   |      



|                          |  |                        |   |      |        |        |   |     |   |        |   |       
|------------------------- |  | ---------------------- | - | ---- | ------ | ------ | - | --- | - | ------ | - | ------
|                          |  | At December 31,       
|                          |  | 2003                   |   | 2002
|                          |  | (Dollars in thousands)
|                          |  | %                      |   |      | Amount |        | % |     |   | Amount
|Commercial and industrial |  | 37                     | % |      | $      | 4,436  |   | 38  | % |        | $ | 3,910 
|Real estate mortgage (1)  |  | 40                     | % |      |        | 4,742  |   | 32  | % |        |   | 3,269 
|Personal                  |  | 23                     | % |      |        | 2,817  |   | 30  | % |        |   | 3,078 
|Overdraft and credit line |  |                       |   |      |        |       |   |    |   |        |   |      
|                          |  |                        |   |      |        |        |   |     |   |        |   |       
|Total Allowance           |  | 100                    | % |      | $      | 11,995 |   | 100 | % |        | $ | 10,257
|                          |  |                        |   |      |        |        |   |     |   |        |   |       



|(1) | Includes real estate-construction loans.
|--- | ----------------------------------------

BancTrust
estimates net-charge off totals as part of its annual budgeting process. For 2007, BancTrust estimates that net charge-offs will total approximately $700,000. Loan portfolio growth rates, economic conditions, events and other factors beyond
BancTrusts control can influence the actual amount of net-charge offs in any given period. Consequently, BancTrust is not able to predict actual charge-off levels, and must rely on management estimates and other subjective methods in
estimating charge-offs for a given period.

Investment Activities

Securities by Category. Securities are classified as either held-to-maturity, trading or available-for-sale securities. See Notes 1 and 4 to Consolidated Financial Statements incorporated in
Item 15.-Exhibits and Financial Statement Schedules. There were no securities classified as held-to-maturity or trading at December 31, 2006, 2005 or 2004. The following table sets forth the amount of securities
available-for-sale by major categories held by BancTrust at December 31, 2006, 2005 and 2004.



|                                                 |  |                 |         |      |   |         |  |   |        
|------------------------------------------------ |  | --------------- | ------- | ---- | - | ------- |  | - | -------
|                                                 |  | At December 31,
|                                                 |  | 2006            |         | 2005 |   | 2004   
|                                                 |  | (In thousands) 
|Securities Available for Sale                    |  |                 |        
|U.S. Treasury, U.S. Government Sponsored         |  | $               | 120,984 |      | $ | 125,976 |  | $ | 126,821
|Obligations of states and political subdivisions |  |                 |        |      |   |        |  |   |       
|Mortgage backed securities                       |  |                 | 75,504  |      |   | 90,913  |  |   | 116,969
|Corporate and other securities                   |  |                 | 8,114   |      |   | 9,154   |  |   | 9,954  
|                                                 |  |                 |         |      |   |         |  |   |        
|Total                                            |  | $               | 204,602 |      | $ | 226,043 |  | $ | 253,744
|                                                 |  |                 |         |      |   |         |  |   |        



8



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Corporate and other securities as of December 31, 2006, were comprised of the following:



|                |  |                              |      
|--------------- |  | ---------------------------- | -----
|                |  | Securities AvailableFor Sale
|                |  | (In thousands)              
|Corporate bonds |  | $                            | 986  
|Mutual funds    |  |                              | 2,013
|Common stock    |  |                              | 5,115
|                |  |                              |      
|Total           |  | $                            | 8,114
|                |  |                              |      

All corporate notes are rated A3 to AAA. All mortgage backed securities obligations are either
guaranteed by the Federal National Mortgage Association, the Government National Mortgage Association or the Federal Home Loan Mortgage Corporation or have AAA ratings. Common stock holdings include investments in the Federal Reserve Bank, The
Federal Home Loan Bank of Atlanta (FHLB), The Bankers Bank of Atlanta and The Alabama Bankers Bank, all of which are closely monitored by management.

Management considers all of the above securities to have a relatively low level of default or credit risk.

For information regarding the amortized cost and approximate market value of securities at December 31, 2006 and 2005, see Note 4 to Consolidated
Financial Statements incorporated in Item 15.-Exhibits and Financial Statement Schedules.

Maturity Distributions of
Securities. The following table sets forth the distributions of maturities of securities at carrying value as of December 31, 2006.



|                                                 |  |                        |        |   |            |   |        |                  |  |   |                   |   |  |              |        |   |                     |   |        |   |  |   |       |  
|------------------------------------------------ |  | ---------------------- | ------ | - | ---------- | - | ------ | ---------------- |  | - | ----------------- | - |  | ------------ | ------ | - | ------------------- | - | ------ | - |  | - | ----- | -
|                                                 |  | 0-3 Months             |        |   | 4-12Months |   |        | Over 1 to 5years |  |   | Over 5 to 10years |   |  | Over 10years |        |   | No SpecificDue Date |  
|                                                 |  | (Dollars in thousands) |       
|U.S. Treasury, U.S. government sponsored         |  |                        | 22,938 |   |            |   | 20,017 |                  |  |   | 78,029            |   |  |              |       |   |                     |   |       |   |  |   |      |  
|Obligations of states and political subdivisions |  |                        |       |   |            |   |       |                  |  |   |                  |   |  |              |       |   |                     |   |       |   |  |   |      |  
|Mortgage backed securities                       |  |                        |       |   |            |   |       |                  |  |   | 10,913            |   |  |              | 12,119 |   |                     |   | 52,472 |   |  |   |      |  
|Corporate and other securities                   |  |                        |       |   |            |   | 986    |                  |  |   |                  |   |  |              |       |   |                     |   |       |   |  |   | 7,128 |  
|                                                 |  |                        |        |   |            |   |        |                  |  |   |                   |   |  |              |        |   |                     |   |        |   |  |   |       |  
|Total                                            |  | $                      | 22,938 |   |            | $ | 21,003 |                  |  | $ | 88,942            |   |  | $            | 12,119 |   |                     | $ | 52,472 |   |  | $ | 7,128 |  
|                                                 |  |                        |        |   |            |   |        |                  |  |   |                   |   |  |              |        |   |                     |   |        |   |  |   |       |  
|Weighted average yield (%)                       |  |                        | 4.58   | % |            |   | 3.33   | %                |  |   | 3.86              | % |  |              | 4.13   | % |                     |   | 4.25   | % |  |   | 4.36  | %
|                                                 |  |                        |        |   |            |   |        |                  |  |   |                   |   |  |              |        |   |                     |   |        |   |  |   |       |  

(1) Yields on tax-exempt obligations have been computed on a tax-equivalent basis using an
incremental rate of 34%.

Expected maturities may differ from contractual maturities because borrowers may have the right to call or prepay
obligations with or without call or prepayment penalties. For information regarding the amortized cost and approximate market value of securities at December 31, 2006, by contractual maturity, see Note 4 to Consolidated Financial Statements
incorporated in Item 15.-Exhibits and Financial Statement Schedules.



9



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Deposits

Deposits are the primary funding source for BancTrust. BancTrusts deposits consist of checking accounts, regular savings deposits, NOW accounts, Money Market Accounts, Certificates of Deposit and Jumbo Certificates of Deposit.
Deposits are attracted from individuals, partnerships and corporations primarily in BancTrusts market area. In addition, BancTrust obtains deposits from state and local entities and, to a lesser extent, the U.S. Government and other depository
institutions. As of December 31, 2006, BancTrusts total deposits were $768.7 million. BancTrust was in receipt of $61.3 million in brokered time deposits at December 31, 2006.

The following table indicates the amount of BancTrusts certificates of deposit and other time deposits, including brokered time deposits, of
$100,000 or more by time remaining until maturity as of December 31, 2006.



|                               |  |                        |         |                    |   |      
|------------------------------ |  | ---------------------- | ------- | ------------------ | - | -----
|Maturity Period                |  | Certificatesof Deposit |         | Other TimeDeposits
|                               |  | (In thousands)        
|Three months or less           |  | $                      | 27,942  |                    | $ | 991  
|Over three through six months  |  |                        | 34,357  |                    |   | 958  
|Over six through twelve months |  |                        | 28,136  |                    |   | 3,701
|Over twelve months             |  |                        | 95,351  |                    |   | 2,844
|                               |  |                        |         |                    |   |      
|Total                          |  | $                      | 185,786 |                    | $ | 8,494
|                               |  |                        |         |                    |   |      

The following table sets forth the average balances and average interest rates based on daily
balances for deposits for the periods indicated.



|                                     |  |                         |         |             |      |   |                 |      |             |  |      |                 |  |             |         |  |      |  
|------------------------------------ |  | ----------------------- | ------- | ----------- | ---- | - | --------------- | ---- | ----------- |  | ---- | --------------- |  | ----------- | ------- |  | ---- | -
|                                     |  | Year Ended December 31, |        
|                                     |  | 2006                    |         |             | 2005 |   |                 | 2004 |            
|                                     |  | AverageDeposits         |         | AverageRate |      |   | AverageDeposits |      | AverageRate |  |      | AverageDeposits |  | AverageRate |        
|                                     |  | (Dollars in thousands)  |        
|Non-interest bearing demand deposits |  | $                       | 82,151  |             | 0.00 | % |                 | $    | 81,454      |  | 0.00 | %               |  | $           | 76,391  |  | 0.00 | %
|Interest bearing demand deposits     |  |                         | 239,836 |             | 2.51 | % |                 |      | 232,056     |  | 1.49 | %               |  |             | 222,341 |  | 1.01 | %
|Savings deposits                     |  |                         | 36,003  |             | 0.11 | % |                 |      | 39,314      |  | 0.10 | %               |  |             | 39,918  |  | 0.14 | %
|Time deposits                        |  |                         | 359,642 |             | 4.35 | % |                 |      | 311,864     |  | 3.11 | %               |  |             | 307,460 |  | 2.19 | %
|                                     |  |                         |         |             |      |   |                 |      |             |  |      |                 |  |             |         |  |      |  
|Total deposits                       |  | $                       | 717,632 |             | 3.02 | % |                 | $    | 664,688     |  | 1.59 | %               |  | $           | 646,110 |  | 1.59 | %
|                                     |  |                         |         |             |      |   |                 |      |             |  |      |                 |  |             |         |  |      |  

BancTrust utilizes borrowings as a source of funds, albeit to a much lesser extent than deposits.
The primary source of borrowed funds is the FHLB, of which BancTrust is a member. At December 31, 2006, BancTrust had borrowed funds outstanding with the FHLB of approximately $47.5 million. BancTrust also, from time to time, borrows funds on a
short-term or overnight basis, to meet current or immediate funding needs. These short-term borrowings are referred to as Federal funds purchased. At December 31, 2006, BancTrust had no such borrowings. For information regarding
borrowed funds at December 31, 2006, see Note 10 to Consolidated Financial Statements incorporated in Item 15.-Exhibits and Financial Statement Schedules.

Competition

In order to compete effectively, BancTrust relies substantially on local commercial
activity; personal contacts by its directors, officers, other employees and shareholders; personalized services; and its reputation in the communities it serves.

BancTrust is presently competing in its market area with several other Alabama bank holding companies. It also competes with independent banks, thrift institutions, and various other nonbank financial companies
operating locally and elsewhere.



10



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The banking business in Alabama is generally, and in BancTrusts primary service areas specifically,
highly competitive with respect to both loans and deposits. BancTrust competes with many larger banks and other financial institutions, which have offices over a wide geographic area. These larger institutions have certain inherent advantages, such
as the ability to finance wide ranging advertising campaigns and promotions and to allocate their investment assets to regions offering the highest yields and demand. They also offer services such as international banking, which are not offered
directly by BancTrust (but could be offered indirectly through correspondent institutions). By virtue of their larger total capitalization (legal lending limits to an individual consumer or corporation are limited to a percentage of BancTrusts
total capital accounts), such banks have substantially higher lending limits than does BancTrust. Other entities, both governmental and in private industry, raise capital through the issuance and sale of debt and equity securities and thereby
indirectly compete with BancTrust in the acquisition of deposit funds. See Item 1A  Risk Factors.

Under federal
law, Alabama banks and their holding companies may be acquired by out-of-state banks or their holding companies, and Alabama banks and their holding companies may acquire out-of-state banks without regard to whether the transaction is prohibited by
the laws of any state. Under federal and Alabama law, the FRB may not approve the acquisition of a bank in Alabama if such bank has not been in existence for at least five years or, if following the acquisition, the acquiring bank holding company
and its depository institution affiliates would control 30% or more of the deposits in depository institutions in Alabama. In addition, the federal banking agencies are authorized to approve interstate merger transactions without regard to whether
such transactions are prohibited by the law of any state, unless the home state of one of the banks opts out by adopting a law that applies equally to all out-of-state banks and expressly prohibits merger transactions involving out-of-state banks.
Alabama has enacted legislation that expressly authorizes Alabama banks to participate in interstate mergers in accordance with federal law.

Employees

As of December 31, 2006, BancTrust employed 275 persons, including executive officers, loan officers, bookkeepers, tellers and
others. None of BancTrusts employees are presently represented by a union or covered under a collective bargaining agreement. Management considers that BancTrusts employee relations are excellent.

Certain Ratios

The following table shows certain
ratios of BancTrust for the years ended December 31, 2006, 2005 and 2004.



|                                                  |  |                         |   |  |       |   |  |       |  
|------------------------------------------------- |  | ----------------------- | - |  | ----- | - |  | ----- | -
|                                                  |  | Year Ended December 31, |  
|                                                  |  | 2006                    |   |  | 2005  |   |  | 2004  |  
|Return on assets:                                 |  |                         |   |  |       |   |  |       |  
|Net income/average total assets                   |  | 0.95                    | % |  | 0.82  | % |  | 0.78  | %
|Return on equity:                                 |  |                         |   |  |       |   |  |       |  
|Net income/average equity                         |  | 9.52                    | % |  | 8.16  | % |  | 8.25  | %
|Dividend payout ratio:                            |  |                         |   |  |       |   |  |       |  
|Dividends declared per share/net income per share |  | 35.29                   | % |  | 39.29 | % |  | 40.74 | %
|Equity to assets ratio:                           |  |                         |   |  |       |   |  |       |  
|Average equity/average total assets               |  | 9.94                    | % |  | 10.11 | % |  | 9.45  | %

Regulation, Supervision and Governmental Policy

The following is a brief summary of certain statutes, rules and regulations affecting BancTrust and Peoples Bank. A number of other statutes and
regulations have an impact on their operations. The following summary of applicable statutes and regulations does not purport to be complete and is qualified in its entirety by reference to such statutes and regulations.

Sarbanes-Oxley Act of 2002. On July 30, 2002, the President of the United States signed the Sarbanes-Oxley Act of 2002 (the SOX
Act) into law. The SOX Act provides for sweeping changes with respect to corporate governance, accounting policies and disclosure requirements for public companies, and also for their directors and officers. Section 302 of the SOX Act
(Corporate Responsibility for Financial Reports) required the SEC to adopt new rules to implement the requirements of the SOX Act. These requirements include new financial reporting requirements and rules concerning corporate governance.
New SEC rules require a reporting companys chief executive and chief financial officers to certify certain financial and other information included in BancTrusts quarterly and annual reports.



11



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The rules also require these officers to certify that they are responsible for establishing, maintaining and regularly evaluating the effectiveness of
BancTrusts disclosure controls and procedures; that they have made certain disclosures to the auditors and to the audit committee of the board of directors about BancTrusts controls and procedures; and that they have included information
in their quarterly and annual filings about their evaluation and whether there have been significant changes to the controls and procedures or other factors which would significantly impact these controls subsequent to their evaluation.
Certifications by BancTrusts Chief Executive Officer and Chief Financial Officer of the financial statements and other information have been filed with the SEC as exhibits to this Annual Report on Form 10-K. See Item 9A.- Controls
and Procedures hereof for BancTrusts evaluation of disclosure controls and procedures. The certifications required by Section 906 of the SOX Act also accompany this Form 10-K. Also, BancTrust has incurred, and expects to continue to
incur, costs in connection with its compliance with Section 404 of the SOX Act which requires management to undertake an assessment of the adequacy and effectiveness of BancTrusts internal controls over financial reporting and requires
BancTrusts independent external auditors to attest to, and report on, managements assessment and the operating effectiveness of these controls.

USA Patriot Act. The USA Patriot Act authorizes regulatory powers to combat international terrorism. The provisions that affect financial institutions most directly provide the federal government with enhanced
authority to identify, deter, and punish international money laundering and other crimes. Among other things, the USA Patriot Act prohibits financial institutions from doing business with foreign shell banks and requires increased due
diligence for private banking transactions and correspondent accounts for foreign banks. In addition, financial institutions have to follow minimum verification of identity standards for all new accounts and are permitted to share information with
law enforcement authorities under circumstances that were not previously permitted.

Financial Modernization Legislation.The
Gramm-Leach-Bliley Act of 1999 (the GLB Act) includes a number of provisions intended to modernize and to increase competition in the American financial services industry, including authority for bank holding companies to engage in a
wider range of nonbanking activities, such as securities underwriting and general insurance activities. Under the GLB Act, a bank holding company that elects to become a financial holding company may engage in any activity that the FRB, in
consultation with the Secretary of the Treasury, determines by regulation or order is (i) financial in nature, (ii) incidental to any such financial activity, or (iii) complementary to any such financial activity and does not pose a
substantial risk to the safety or soundness of depository institutions or the financial system generally. The GLB Act specifies certain activities that are deemed to be financial in nature, including lending, exchanging, transferring, investing for
others, or safeguarding money or securities; underwriting and selling insurance; providing financial, investment, or economic advisory services; underwriting, dealing in or making a market in, securities; and any activity currently permitted for
bank holding companies by the FRB. A bank holding company may elect to be treated as a financial holding company only if all depository institution subsidiaries of the holding company are and continue to be well-capitalized and well-managed and have
at least a satisfactory rating under the Community Reinvestment Act.

National banks and state banks (assuming they have the requisite
investment authority under state law) are also authorized by the GLB Act to engage, through financial subsidiaries, in any activity that is permissible for a financial holding company (as described above) and any activity that the
Secretary of the Treasury, in consultation with the FRB, determines is financial in nature or incidental to any such financial activity, except (i) insurance underwriting, (ii) real estate development or real estate investment activities
(unless otherwise permitted by law), (iii) insurance company portfolio securities and (iv) merchant banking. The authority of a bank to invest in a financial subsidiary is subject to a number of conditions, including, among other things,
requirements that the bank must be well-managed and well-capitalized (after deducting from capital the banks outstanding investments in financial subsidiaries).

The GLB Act also adopts a number of consumer protections, including provisions intended to protect privacy of bank customers financial information and provisions requiring disclosure of ATM fees imposed by banks
on customers of other banks.

At this time, BancTrust has not determined whether it will become a financial holding company. Peoples Bank
believes that the GLB Acts financial subsidiary provisions and consumer protections have had no material impact on its operations.



12



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Bank Holding Company Regulation. BancTrust is registered as a bank holding company under the
Holding Company Act and, as such, is subject to supervision and regulation by the FRB. BancTrust is required to furnish to the FRB an annual report of its operations at the end of each fiscal year and to furnish such additional information as the
FRB may require pursuant to the Holding Company Act. BancTrust is also subject to regular examination by the FRB.

Under the Holding
Company Act, a bank holding company must obtain the prior approval of the FRB before (i) acquiring direct or indirect ownership or control of any voting shares of any bank or bank holding company if, after such acquisition, the bank holding
company would directly or indirectly own or control more than 5% of such shares; (2) acquiring all or substantially all of the assets of another bank or bank holding company; or (3) merging or consolidating with another bank holding
company. The Holding Company Act generally permits the FRB to approve interstate bank acquisitions by bank holding companies without regard to any prohibitions of state law. See Competition.

Under the Holding Company Act, approval of the FRB must be obtained prior to acquiring control of BancTrust or Peoples Bank. For purposes of the Holding
Company Act, control is defined as ownership of more than 25% of any class of voting securities of BancTrust or Peoples Bank, the ability to control the election of a majority of the directors, or the exercise of a controlling influence
over management or policies of the BancTrust or Peoples Bank.

As a bank holding company, BancTrust is prohibited under the Holding Company
Act, with certain exceptions, from acquiring direct or indirect ownership or control of more than 5% of the voting shares of a company that is not a bank or a bank holding company, or from engaging directly or indirectly in activities other than
those of banking, managing or controlling banks, or providing services for its subsidiaries. The principal exceptions to these prohibitions involve certain non-bank activities that, by statute or by FRB regulation or order, have been identified as
activities closely related to the business of banking or managing or controlling banks. The activities of BancTrust and of its non-bank subsidiaries are subject to these legal and regulatory limitations under the Holding Company Act and the
FRBs regulations thereunder. Notwithstanding the FRBs prior approval of specific nonbanking activities, the FRB has the power to order a holding company or its subsidiaries to terminate any activity, or to terminate its ownership or
control of any subsidiary, when it has reasonable cause to believe that the continuation of such activity or such ownership or control constitutes a serious risk to the financial safety, soundness or stability of any bank subsidiary of that holding
company.

The FRB has adopted guidelines regarding the capital adequacy of bank holding companies, which require bank holding companies to
maintain specified minimum ratios of capital to total assets and capital to risk-weighted assets. See Capital Requirements.

The FRB has the power to prohibit dividends by bank holding companies if, depending on the financial condition of the bank in question, the payment of dividends could be deemed as an unsafe or unsound practice. In addition, the FRB has
issued a policy statement on the payment of cash dividends by bank holding companies, which expresses the FRBs view that a bank holding company should pay cash dividends only to the extent that BancTrusts net income for the past year is
sufficient to cover both the cash dividends and a rate of earning retention that is consistent with BancTrusts capital needs, asset quality, and overall financial condition.

Bank Regulation. As an Alabama banking institution, Peoples Bank is subject to regulation, supervision and regular examination by the Banking
Department. Peoples Bank is a member of the Federal Reserve System and thus is subject to supervision and regular examination by the FRB under the applicable provisions of the Federal Reserve Act and the FRBs regulations. The deposits of
Peoples Bank are insured by the Deposit Insurance Fund (DIF) of the FDIC to the maximum extent provided by law (a maximum of $100,000 applies to all depositors of an insured bank except for owners of self-directed retirement
accounts, which are insured up to $250,000 per owner, per insured bank.). Alabama and federal banking laws and regulations control, among other things, Peoples Banks required reserves, securities, loans, mergers and consolidations, issuance of
securities, payment of dividends, and establishment of branches and other aspects of Peoples Banks operations.

There are statutory
and regulatory restrictions on the ability of Peoples Bank to pay dividends to BancTrust. Under Alabama law, a bank may not pay a dividend in excess of 90% of its net earnings until the banks surplus is equal to at least 20% of its total
capital. The approval of the Banking Department is required if the total of all the dividends declared by Peoples Bank in any calendar year will exceed its net earnings for that year combined with its retained net earnings for the preceding two
calendar years, less any required transfers to surplus. In addition, no dividends may be paid from surplus without the written approval of the Banking Department.



13



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Peoples Bank is subject to various regulatory capital requirements administered by the federal banking
agencies, including the FRBs capital adequacy guidelines for state-chartered banks that are members of the Federal Reserve System (state member banks). Failure to meet minimum capital requirements can initiate certain mandatory
 and possibly additional discretionary  actions by regulators that, if undertaken, could have a direct material effect on BancTrusts financial statements. See Capital Requirements.

As a federally insured bank, Peoples Bank is required to pay deposit insurance assessments to the FDIC based on a percentage of its insured deposits.
Under the FDICs risk-based deposit insurance assessment system, the assessment rate for an insured bank depends on the assessment risk classification assigned to the bank. The FDIC set the annual insurance assessment rates applicable to DIF
member banks like Peoples Bank from 0% for well-capitalized banks in the highest supervisory subgroup to 0.27% of insured deposits for undercapitalized banks in the lowest supervisory subgroup. Peoples Bank was a well-capitalized bank as
of December 31, 2006. In addition to deposit insurance assessments, FDIC-insured institutions are currently required to pay assessments to the FDIC at an annual rate of approximately 0.012% of insured deposits to fund interest payments on
certain bonds issued by the Financing Corporation, an agency of the federal government established to recapitalize the predecessor to the Savings Institution Insurance Fund. The Reform Act also provides for a one-time credit for eligible
institutions based on their level of insured deposits as of December 31, 1996. Subject to certain limitations applicable to institutions that are exhibiting weakness, such credit can be used to offset insurance assessments until exhausted.
Peoples Banks one-time credit is expected to approximate $573,000.

Supervision, regulation and examination of BancTrust and Peoples
Bank by the bank regulatory agencies are intended primarily for the protection of depositors rather than for holders of BancTrust stock or of BancTrust as the holder of the stock of Peoples Bank.

Capital Requirements. The FRB has established guidelines with respect to the maintenance of appropriate levels of capital by registered bank
holding companies and state member banks. The regulations of the FRB impose two sets of capital adequacy requirements: minimum leverage rules, which require bank holding companies and banks to maintain a specified minimum ratio of capital to total
assets, and risk-based capital rules, which require the maintenance of specified minimum ratios of capital to risk-weighted assets.

The regulations of the FRB require bank holding companies and state member banks to maintain a minimum leverage ratio of Tier 1 capital (as defined in the risk-based capital guidelines discussed in the following paragraphs) to
total assets of 3.0%. Although setting a minimum 3.0% leverage ratio, the regulations state that only the strongest bank holding companies and banks, with composite examination ratings of 1 under the rating system used by the federal bank
regulators, would be permitted to operate at or near such a minimum level of capital. All other bank holding companies and banks are expected to maintain a leverage ratio of at least 1% to 2% above the minimum ratio, depending on the assessment of
an individual organizations capital adequacy by its primary regulator. Any bank or bank holding company experiencing or anticipating significant growth would be expected to maintain capital well above the minimum levels. In addition, the FRB
has indicated that whenever appropriate, and in particular when a bank holding company is undertaking expansion, seeking to engage in new activities or otherwise facing unusual or abnormal risks, it will consider, on a case-by-case basis, the level
of an organizations ratio of tangible Tier 1 capital (after deducting all intangibles) to total assets in making an overall assessment of capital.

The risk-based capital rules of the FRB require bank holding companies and state member banks to maintain minimum regulatory capital levels based upon a weighting of their assets and off-balance sheet obligations
according to risk. The risk-based capital rules have two basic components: a core capital (Tier 1) requirement and a supplementary capital (Tier 2) requirement. Core capital consists primarily of common stockholders equity, certain perpetual
preferred stock (which must be noncumulative with respect to banks), and minority interests in the equity accounts of consolidated subsidiaries; less intangible assets (primarily goodwill), with limited exceptions for mortgage servicing rights and
purchased credit card relationships. Supplementary capital elements include, subject to certain limitations, the allowance for losses on loans and leases; perpetual preferred stock that does not qualify for Tier 1 and long-term preferred stock with
an original maturity of at least 20 years from issuance; hybrid capital instruments, including perpetual debt and mandatory convertible securities; and subordinated debt and intermediate-term preferred stock. The risk-based capital regulations
assign balance sheet assets and credit equivalent amounts of off-balance sheet obligations to one of four broad risk categories based principally on the degree of credit risk associated with the obligor. The assets and off-balance sheet items in the
four risk categories are weighted at 0%, 20%, 50% and 100%. These computations result in the total risk-weighted assets.



14



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The risk-based capital regulations require all banks and bank holding companies to maintain a minimum
ratio of total capital to total risk-weighted assets of 8%, with at least 4% as core capital. For the purpose of calculating these ratios: (i) supplementary capital will be limited to no more than 100% of core capital; and (ii) the
aggregate amount of certain types of supplementary capital will be limited. In addition, the risk-based capital regulations limit the allowance for loan losses includible as capital to 1.25% of total risk-weighted assets.

In addition, the FRBs capital guidelines require the agency to take into consideration concentrations of credit risk and risks from non-traditional
activities, as well as a banks ability to manage those risks, when determining a banks capital adequacy. Such evaluation will be made as a part of the banks regular safety and soundness examination. The FRBs guidelines also
specify that its assessment of a banks capital adequacy will include an assessment of the banks interest rate risk (that is, the banks exposure to declines in the economic value of its capital due to changes in interest rates) and
authorizing the agency to require a bank to hold additional capital for its interest rate risk exposure.

The FRB has adopted regulations
that classify insured depository institutions by capital levels and provide that the FRB will take various prompt corrective actions to resolve the problems of any state member bank that fails to satisfy the capital standards. Under the regulations,
a well-capitalized bank is one that is not subject to any regulatory order or directive to meet any specific capital level and that has or exceeds the following capital levels: a total risk-based capital ratio of 10%, a Tier 1 risk-based
capital ratio of 6%, and a leverage ratio of 5%. An adequately capitalized bank is one that does not qualify as well capitalized but meets or exceeds the following capital requirements: a total risk-based capital of 8%, a
Tier 1 risk-based capital ratio of 4%, and a leverage ratio of either (i) 4% or (ii) 3% if the bank has the highest composite examination rating. A bank not meeting these criteria is treated as undercapitalized,
significantly undercapitalized, or critically undercapitalized depending on the extent to which the banks capital levels are below these standards. A bank that falls within any of the three undercapitalized
categories is subjected to certain severe regulatory sanctions. As of December 31, 2006, Peoples Bank was categorized as well-capitalized.

According to FRB policy, a bank holding company is to act as a source of financial strength to its subsidiary bank and commit resources to the subsidiarys support. This support may be required when the holding
company is not able to provide it.

See Item 7.-Managements Discussion and Analysis of Financial Condition and Results of
Operations and Note 17 to Consolidated Financial Statements incorporated in Item 15.-Exhibits and Financial Statement Schedules.

Effects of Governmental Policy. The earnings and business of BancTrust and Peoples Bank have been and will be affected by the policies of various regulatory authorities of the United States, particularly the
FRB. Important functions of the FRB, in addition to those enumerated above, include the regulation of the supply of money in light of general economic conditions within the United States. The instruments of monetary policy employed by the FRB for
these purposes influence in various ways the overall level of securities, loans, other extensions of credit and deposits, and the interest rates paid on liabilities and received on interest-earning assets.

Banking is a business that depends on interest rate differentials. In general, the difference between the interest paid by Peoples Bank on its deposits
and its other borrowings and the interest received by Peoples Bank on loans extended to customers and securities held in its securities portfolios comprises the major portion of Peoples Banks earnings. The earnings and gross income of Peoples
Bank thus have been and will be subject to the influence of economic conditions generally, both domestic and foreign, and also to monetary and fiscal policies of the United States and its agencies, particularly the FRB. The nature and timing of any
future changes in such policies and their impact on Peoples Bank are not predictable.



|ITEM 1A. | RISK FACTORS
|-------- | ------------

In addition to the other information
contained in or incorporated by reference into this Form 10-K and the exhibits hereto, the following risk factors should be considered carefully in evaluating BancTrusts business. The risks disclosed below, either alone or in combination,
could materially adversely affect the business, financial condition or results of operations of BancTrust. Additional risks not presently known, or that are not currently deemed material, may also adversely affect BancTrusts business,
financial condition or results of operations.



15



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BancTrust may need to raise capital in the future when capital may not be available on favorable terms or at all.

BancTrust is required by federal and state regulatory authorities to maintain adequate levels of capital to support its operations.
BancTrust anticipates that capital resources will satisfy these requirements in the near term. However, BancTrust may need to raise additional capital to support growth or for other needs. The ability to raise additional capital, if needed, will
depend on conditions in the capital markets at that time, which are beyond BancTrusts control, as well as on BancTrusts current and anticipated financial performance. Accordingly, there can be no assurances as to BancTrusts ability
to raise additional capital, if needed, on favorable terms or at all. In the event BancTrust is unable to raise additional capital when needed, its ability to further expand operations through internal growth and acquisitions could be impeded.

BancTrusts allowance for possible loan losses may not be sufficient.

While BancTrust attempts to maintain diversification within its loan portfolio in order to avoid undue concentrations of credit risk, it also maintains an
allowance for loan losses to absorb probable losses inherent in the loan portfolio. The determination of the appropriate level of the allowance for loan losses necessarily involves subjectivity and requires BancTrust to make significant estimates of
current credit risks and future trends, all of which may change materially from period to period. Changes in economic conditions affecting borrowers, new information regarding existing loans, identification of additional problem loans and other
factors, both within and beyond BancTrusts control, may require an increase in the allowance for loan losses.

In addition,
BancTrusts primary regulatory agencies periodically review the allowance for loan losses and may require increases in the provision for loan losses or the recognition of further loan charge-offs, based on judgments different than those of
BancTrust. In addition, if net charge-offs in future periods exceed the allowance for loan losses, BancTrust will need additional provisions to increase the allowance for loan losses. These types of increases in the allowance for loan losses would
cause net income and perhaps capital to decline, constituting a material adverse effect on financial condition and results of operations of BancTrust. For a detailed discussion of BancTrusts loan loss reserve methodologies, see Allowance
for Loan Losses in Item 7, Managements Discussion and Analysis of Financial Condition and Results of Operations.

Banking is a heavily
regulated business.

The banking industry is heavily regulated under both federal and state law. BancTrust is subject, in certain
respects, to regulation by the Federal Reserve Board, the Federal Depository Insurance Corporation and the Alabama State Banking Department. BancTrusts success depends not only on competitive factors but also on state and federal regulations
affecting banks and bank holding companies. The regulations are primarily intended to protect depositors, not stockholders. The ultimate effect of recent and proposed changes to the regulation of the financial institution industry cannot be
predicted. Regulations now affecting us may be modified at any time, and there is no assurance that such modifications, if any, will not adversely affect BancTrusts business.

BancTrusts information systems may experience an interruption or breach in security.

BancTrust
relies heavily on communications and information systems to conduct its business. Failure, interruption or breach in security of these systems could result in failures or disruptions in our customer relationship management, accounting, deposit, loan
and other systems. While BancTrust maintains policies and procedures designed to prevent or limit the effect of such failures, interruptions or security breaches, there can be no assurance that such an event will not occur or that if it does, it
will be of such a nature that the aforementioned policies and procedures are able to effectively neutralize its potential adverse impact on BancTrust. The occurrence of failures, interruptions or security breaches of information systems could damage
BancTrusts reputation, result in loss of customer business, subject BancTrust to additional regulatory scrutiny, or expose BancTrust to civil litigation and possible financial liability, any of which could have a material adverse effect on the
financial condition and results of operations of BancTrust.

Technology is constantly changing.

The banking industry has been and remains in an environment of rapid technological changes and advancements, with frequent introductions of new
technology-driven products and services. Used effectively and in conjunction with sound management practices, technology can increase efficiencies and enable financial institutions to better serve customers and reduce costs. The future success of
BancTrust depends, in part, upon its ability to effectively introduce technology-driven solutions that meet customer needs and enhance operational efficiencies. Many of BancTrusts competitors have substantially greater resources to invest in
technological improvements. BancTrust may not be able to effectively implement new technology-driven products and services or be successful in marketing these products and services to its customers. Failure to successfully keep pace with
technological change affecting the banking industry could have a material adverse impact on BancTrusts business and, therefore, its financial condition and results of operations.



16



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Internal controls and procedures could fail or be circumvented.

BancTrust regularly reviews and updates its financial reporting and disclosure controls, as well as policies and procedures regarding corporate
governance. Any system of controls, however well designed and administered, has inherent limitations, including the possibility that a control can be circumvented or overridden. These limitations could result in misstatements due to error or fraud,
which may not be detected in a timely manner. Also, because of changes in conditions, internal control effectiveness may vary over time. Accordingly, even an effective system of internal control will provide only reasonable assurance with respect to
BancTrusts adherence to financial reporting, disclosure and corporate governance policies and procedures.

Banking is heavily competitive
business.

Competition in the banking and financial services industry is intense. BancTrust competes with other commercial banks,
savings and loan associations, credit unions, finance companies, insurance companies, brokerage firms and other financial intermediaries that offer similar services, operating locally and elsewhere. Many of these competitors have substantially
greater resources and lending limits than does BancTrust and may offer certain services that BancTrust does not or cannot provide. Additionally, some competitors are not subject to the same regulations that govern BancTrust and may have greater
flexibility in competing for business. The profitability of BancTrust depends upon its continued ability to compete effectively in its various markets.

BancTrusts success is heavily dependent upon local economic conditions.

The success of BancTrust depends heavily on
overall economic conditions in the geographic markets it serves. Local economic conditions in these areas have a significant impact on commercial, real estate and construction loans, the ability of borrowers to repay these loans and the value of the
collateral securing them. Adverse changes in the economic conditions of the State of Alabama in general or any one or more of these local markets could negatively impact the financial results of BancTrusts operations and have a negative effect
on its profitability.

BancTrusts financial condition and results of operations could be significantly impacted by interest rate fluctuations.

BancTrusts financial condition and profitability depends significantly upon its net interest income. Net interest income is the
difference between interest income on interest-earning assets, such as loans and investments, and interest expense on interest-bearing liabilities, such as deposits and borrowings. Net interest income will be adversely affected if market interest
rates change such that the interest paid on deposits and borrowings increases faster than the interest earned on loans and investments. Changes in interest rates could also adversely impact the economic value of BancTrusts stockholders
equity. Economic value of equity is the difference between the fair market value of assets and liabilities. See Interest Rate Risk in Item 7, Managements Discussion and Analysis of Financial Condition and Results of
Operations.

Substantial sales of BancTrusts common stock could cause declines in its stock price.

Should BancTrust or its stockholders sell substantial amounts of its common stock in the public market, the market price of BancTrusts common stock
could fall. Such sales have the potential to make it more difficult for BancTrust to raise capital through the sale of common stock or use its common stock as currency in future acquisitions.



17



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BancTrusts growth strategy contemplates merger and acquisition activity.

BancTrust seeks merger or acquisition partners that possess either desirable market presence or have potential for profit growth through enhanced
financial management, economies of scale or expanded services. Acquiring other banks, businesses or branches involves various risks commonly associated with acquisitions, including, among other things:



| |  |  | Potential exposure to unknown or contingent liabilities of the target company.
| | - |  | ------------------------------------------------------------------------------



| |  |  | Exposure to potential asset quality issues of the target company.
| | - |  | -----------------------------------------------------------------



| |  |  | Difficulty and expense of integrating the operations and personnel of the target company.
| | - |  | -----------------------------------------------------------------------------------------



| |  |  | Potential disruption to BancTrusts business.
| | - |  | ---------------------------------------------



| |  |  | The possible loss of key employees and customers of the target company.
| | - |  | -----------------------------------------------------------------------



| |  |  | Difficulty in estimating the value of the target company.
| | - |  | ---------------------------------------------------------



| |  |  | Potential changes in banking or tax laws or regulations that may affect the target company.
| | - |  | -------------------------------------------------------------------------------------------

Mergers and acquisitions typically involve the payment of a premium over book and market values, and, therefore, some dilution of tangible book value and
net income per common share may occur in connection with any future transaction. Furthermore, failure to realize the expected revenue increases, cost savings, increases in geographic or product presence, and/or other projected benefits from an
acquisition could have a material adverse effect on BancTrusts financial condition and results of operations.

BancTrust could issue additional
securities, resulting in dilution of current ownership percentages.

BancTrust may, from time to time, issue additional securities to
raise capital, finance acquisitions or honor the exercise or conversion of outstanding stock options. Such issuances would dilute the ownership interests of existing stockholders.



|ITEM 1B. | UNRESOLVED STAFF COMMENTS
|-------- | -------------------------

None



|ITEM 2. | PROPERTIES
|------- | ----------

BancTrusts principal executive
offices and Peoples Banks main office are located at 310 Broad Street, Selma, Alabama in a building owned by Peoples Bank. At March 6, 2006, Peoples Bank maintained 25 offices in Dallas, Autauga, Butler, Bibb, Elmore, Shelby, Montgomery,
Lee, Jefferson and Tuscaloosa counties, of which 8 are leased. See Notes 6 and 14 to Consolidated Financial Statements incorporated in Item 15.-Exhibits and Financial Statement Schedules.



|ITEM 3. | LEGAL PROCEEDINGS
|------- | -----------------

In the opinion of BancTrust,
based on review and consultation with legal counsel, the outcome of any litigation presently pending is not anticipated to have a material adverse effect on BancTrusts consolidated financial statements or results of operations.

See Note 14 to Consolidated Financial Statements incorporated in Item 15.-Exhibits and Financial Statement Schedules.



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

Not applicable.



18



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EXECUTIVE OFFICERS OF THE REGISTRANT

Don J. Giardina, 57 has served as President and Chief Executive Officer of Peoples Bank and BancTrust since September of 2006. Prior to assuming his current position, Mr. Giardina served as President of
Life Care Centers of America, Inc. in Cleveland Tennessee. Prior to joining Life Care Centers of America, Inc., Mr. Giardina held executive positions at other Alabama banks including President and CEO of The Bank and President of Colonial Bank
in Birmingham, Alabama.

Andrew C. Bearden, Jr., 60, has served as Executive Vice President and Chief Operating Officer of Peoples
Bank since January of 2007, and Executive Vice President and Assistant Secretary of BancTrust since 1996. Prior to assuming his position as Chief Operating Officer, Mr. Bearden served as Chief Financial Officer for Peoples Bank and BancTrust,
and managed the Operations/Finance Division of Peoples Bank since 1996. Prior to assuming his position as manager of Operations/Finance Division, Mr. Bearden served as manager of Retail/Operations Division of Peoples Bank since 1994.
Mr. Bearden was in private practice as a certified public accountant prior to his employment with Peoples Bank in 1985.

Gerald F.
Holley, 63, has served as Executive Vice President and Senior lender of Peoples Bank since February of 2003 and Executive Vice President and Assistant Secretary of BancTrust since July of 2000. Prior to assuming his current position,
Mr. Holley was Executive Vice President and Head of the Lending Division of Peoples Bank. Prior to joining BancTrust in July of 2000, Mr. Holley served as Senior Vice President of Operations for Colonial BancGroup in Montgomery, Alabama
from 1998 to 2000, and President of the Chattahoochee Valley Area Banks of Colonial BancGroup from 1993 to 1998. Mr. Holley began his banking career in Anniston, Alabama in 1962.

Terry S. Pritchett, 56, has served as Executive Vice President and Risk Management Officer of both Peoples Bank and BancTrust since October of
2002. Prior to that, Mrs. Pritchett served as Senior Vice President and Auditor for Peoples Bank and BancTrust from December 1997, to October 2002. Mrs. Pritchett joined Peoples Bank in April of 1984 as Auditor.

Thomas P. Wilbourne, 38, has served as Senior Vice President and Chief Financial Officer of Peoples Bank and BancTrust since January of 2007.
Prior to assuming his position as Chief Financial Officer, Mr. Wilbourne served as Vice President and Controller of Peoples Bank, and Vice President and Controller, Assistant Treasurer and Principal Accounting Officer of BancTrust since 2002.
Mr. Wilbourne joined Peoples Bank and BancTrust in 1997, as an Assistant Accounting Officer.

M. Scott Patterson, 64, has
served as Executive Vice President of Peoples Bank and BancTrust since 1996. Mr. Patterson also serves as Financial Services Division Manager, Secretary and Chief Investment Officer of Peoples Bank and Secretary of BancTrust. Mr. Patterson
has been in all these positions, with the exception of Chief Investment Officer, with Peoples Bank since 1985 and with BancTrust since 1997. Mr. Patterson was named Chief Investment Officer in February of 2003. Prior to coming to Peoples Bank
in 1983, Mr. Patterson served for 20 years in the United States Air Force, retiring as a Lieutenant Colonel.

Jefferson G.
Ratcliffe, Jr., 45, has served as Senior Vice President and Senior Credit Officer of Peoples Bank since February of 2003. Prior to that, Mr. Ratcliff e served as Regional President of the Prattville/Millbrook Division of Peoples Bank from
December 1997 to February of 2003. Mr. Ratcliffe joined Peoples Bank in 1985.

Lynn D. Swindal, 53, has served as Executive
Vice President-Retail Division Manager of Peoples Bank and Executive Vice President and Assistant Secretary of BancTrust since December of 1998. Prior to that, Mrs. Swindal served as Senior Vice President-Loan Administration of Peoples Bank.
Mrs. Swindal has been employed with Peoples Bank since 1978. Prior to coming to Peoples Bank, Mrs. Swindal was employed at National Bank & Trust Co. in St. Petersburg, Florida.

All officers serve at the discretion of the boards of directors of BancTrust or Peoples Bank. There are no known arrangements or understandings between
any officer and any other person pursuant to which he or she was or is to be selected as an officer.



19



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PART II



|ITEM 5. | MARKET FOR REGISTRANTS COMMON EQUITY, RELATED STOCKHOLDER MATTERS AND ISSUER PURCHASES OF EQUITY SECURITIES.
|------- | -------------------------------------------------------------------------------------------------------------

The common stock of BancTrust is listed on the Nasdaq Capital Market under the symbol PBTC.

The following table is the reported sale information for the common stock for each quarterly period within the last two fiscal years, along with the
dividends declared. Quotations reflect inter-dealer prices, without retail mark-up, mark-down or commission, and may not reflect actual transactions.



|                   |  |      |       |     |   |                                     |  |   |     
|------------------ |  | ---- | ----- | --- | - | ----------------------------------- |  | - | ----
|2006               |  | High |       | Low |   | DividendsDeclared (percommon share)
|January - March    |  | $    | 19.45 |     | $ | 17.61                               |  | $ | 0.12
|April - June       |  |      | 22.61 |     |   | 18.36                               |  |   | 0.12
|July - September   |  |      | 24.25 |     |   | 19.00                               |  |   | 0.12
|October - December |  |      | 25.60 |     |   | 18.00                               |  |   | 0.12
|                   |  |      |      
|2005               |  | High |       | Low |   | DividendsDeclared (percommon share)
|January - March    |  | $    | 18.43 |     | $ | 15.45                               |  | $ | 0.11
|April - June       |  |      | 17.42 |     |   | 15.10                               |  |   | 0.11
|July - September   |  |      | 17.49 |     |   | 15.15                               |  |   | 0.11
|October - December |  |      | 19.47 |     |   | 16.30                               |  |   | 0.11

See Note 17 to Consolidated Financial Statements incorporated in Item 15.-Exhibits and
Financial Statement Schedules regarding regulatory approval for the payment of dividends to BancTrust by Peoples Bank.

Although
BancTrust has no established policy regarding dividends, BancTrust has paid regular dividends in recent years. There can be no assurance, however, as to whether, or in what amounts, BancTrust might declare dividends in the future, or whether such
dividends, once declared, will continue. Future dividends are subject to the discretion of the Board of Directors and depend on a number of factors, including future earnings, financial condition, and capital requirements, along with economic and
market conditions.

The primary source of BancTrusts revenues (including funds to pay dividends) is dividends from Peoples Bank.
Alabama law imposes certain restrictions on the ability of BancTrust and Peoples Bank to pay dividends. See Item 1.-BusinessRegulation, Supervision and Governmental Policy and Note 17 to Consolidated Financial Statements
incorporated in Item 15.-Exhibits and Financial Statement Schedules.

As of March 7, 2007, BancTrust had 919
stockholders of record, and 5,926,795 shares of common stock outstanding. This total does not reflect the number of persons who hold stock in nominee or street name through various brokerage firms and other financial institutions.



20



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Stock Performance Comparisons

The following graph, which was prepared by SNL Securities LC (SNL), compares the cumulative total return on the Common Stock of BancTrust over the last five years with (1) the Nasdaq Composite Index,
comprised of all U.S. Companies quoted on Nasdaq, and (2) the SNL $500 Million - $1 Billion Asset-Size Bank Index, comprised of publicly traded banks and bank holding companies with total assets between $500 million and $1 billion. Cumulative
total return on the Common Stock or the index equals the total increase in value since December 31, 2001 assuming reinvestment of all dividends paid during the applicable period. The graph was prepared assuming that $100 was invested on
December 31, 2001 in the Common Stock and the securities included in the indexes. The Common Stock of BancTrust has been quoted on the Nasdaq Market since 1994.

The stock price information shown below is not necessarily indicative of future price performance. Information used was obtained by SNL from sources believed to be reliable. BancTrust is not responsible for any errors
or omissions in such information.

CUMULATIVE TOTAL SHAREHOLDER RETURN

COMPARED WITH PERFORMANCE OF SELECTED INDEXES

December 31, 2001 through
December 31, 2006

LOGO



|                                |  |               |  |          |  |          |  |          |  |          |  |         
|------------------------------- |  | ------------- |  | -------- |  | -------- |  | -------- |  | -------- |  | --------
|                                |  | Period Ending
|Index                           |  | 12/31/01      |  | 12/31/02 |  | 12/31/03 |  | 12/31/04 |  | 12/30/05 |  | 12/31/06
|Peoples BancTrust Company, Inc. |  | 100.00        |  | 115.10   |  | 144.98   |  | 150.25   |  | 186.76   |  | 250.63  
|NASDAQ Composite                |  | 100.00        |  | 68.76    |  | 103.67   |  | 113.16   |  | 115.57   |  | 127.58  
|SNL $500M-$1B Bank Index        |  | 100.00        |  | 127.67   |  | 184.09   |  | 208.62   |  | 217.57   |  | 247.44  



21



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|ITEM 6. | SELECTED FINANCIAL DATA
|------- | -----------------------

The following table sets
forth certain historical financial information for BancTrust. This information is based on the consolidated financial statements of BancTrust including applicable notes incorporated by reference elsewhere herein.

FIVE YEAR COMPARISON OF SELECTED FINANCIAL DATA



|                                           |  |                                                      |         |      |   |         |      |  |   |         |   |      |   |         |  |   |        
|------------------------------------------ |  | ---------------------------------------------------- | ------- | ---- | - | ------- | ---- |  | - | ------- | - | ---- | - | ------- |  | - | -------
|                                           |  | 2006                                                 |         | 2005 |   |         | 2004 |  |   | 2003    |   | 2002
|                                           |  | (Dollars in thousands, except for per share amounts)
|Interest income                            |  | $                                                    | 53,262  |      | $ | 42,023  |      |  | $ | 36,869  |   |      | $ | 38,799  |  | $ | 43,966 
|Interest expense                           |  |                                                      | 23,975  |      |   | 15,416  |      |  |   | 11,375  |   |      |   | 11,972  |  |   | 14,422 
|                                           |  |                                                      |         |      |   |         |      |  |   |         |   |      |   |         |  |   |        
|Net interest income                        |  |                                                      | 29,287  |      |   | 26,607  |      |  |   | 25,494  |   |      |   | 26,827  |  |   | 29,544 
|(Credit) provision for loan losses         |  |                                                      | 45      |      |   | (675    | )    |  |   | (149    | ) |      |   | 5,706   |  |   | 7,204  
|Noninterest income                         |  |                                                      | 9,598   |      |   | 9,038   |      |  |   | 8,933   |   |      |   | 11,772  |  |   | 9,888  
|Noninterest expense                        |  |                                                      | 26,975  |      |   | 27,185  |      |  |   | 26,563  |   |      |   | 25,592  |  |   | 24,856 
|Income before income tax                   |  |                                                      | 11,866  |      |   | 9,136   |      |  |   | 8,013   |   |      |   | 7,302   |  |   | 7,372  
|Provision for income tax                   |  |                                                      | 3,786   |      |   | 2,599   |      |  |   | 1,971   |   |      |   | 1,964   |  |   | 2,235  
|                                           |  |                                                      |         |      |   |         |      |  |   |         |   |      |   |         |  |   |        
|Net income                                 |  |                                                      | 8,080   |      |   | 6,537   |      |  |   | 6,042   |   |      |   | 5,338   |  |   | 5,137  
|Net income per share (basic)               |  |                                                      | 1.37    |      |   | 1.13    |      |  |   | 1.08    |   |      |   | 0.96    |  |   | 0.92   
|Net income per share (diluted)             |  |                                                      | 1.36    |      |   | 1.12    |      |  |   | 1.08    |   |      |   | 0.96    |  |   | 0.92   
|Cash dividends declared and paid per share |  |                                                      | 0.48    |      |   | 0.44    |      |  |   | 0.44    |   |      |   | 0.44    |  |   | 0.43   
|Borrowed funds                             |  |                                                      | 48,268  |      |   | 37,732  |      |  |   | 48,313  |   |      |   | 56,690  |  |   | 67,478 
|Total assets, December 31                  |  | $                                                    | 910,705 |      | $ | 811,773 |      |  | $ | 792,249 |   |      | $ | 778,581 |  | $ | 740,261



|ITEM 7. | MANAGEMENTS DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS OF OPERATIONS
|------- | -------------------------------------------------------------------------------------

INTRODUCTION

The following is a discussion and analysis of the consolidated
financial condition and results of operations of BancTrust, as of the dates and for the years indicated. It is intended to be read in conjunction with the consolidated financial statements and notes thereto, along with various other financial data
disclosures, both current and historical, contained in this Annual Report on form 10-K.

OVERVIEW

This overview is intended to discuss briefly and on a broad basis, some of the primary factors affecting the business of BancTrust. It is not intended to
be a detailed discussion of any one or multiple topics. Additionally, BancTrust does not intend to convey that topics discussed in this overview are any more significant, or possess any greater degree of risk, than topics discussed elsewhere in this
Managements Discussion and Analysis of Financial Condition and Results of Operations.

At December 31, 2006 BancTrust had total
assets of $910,705,000, compared to $811,773,000 at December 31, 2005. Asset growth primarily occurred in loans, as securities, cash and cash equivalents declined. Total deposits increased to $768,071,000 at December 31, 2006 from
$688,049,000 at December 31, 2005. BancTrust experienced increased demand for loans in 2006, thereby allowing BancTrust to redeploy funds from lower yielding securities and cash equivalent portfolios into its higher yielding loan portfolio.
BancTrusts loan growth was primarily funded through increased deposits, additional FHLB borrowings and the aforementioned reductions of investment securities and cash and cash equivalents.

BancTrust earned $29,287,000 in net interest income for the year ended December 31, 2006 (2006), compared to $26,607,000 for the year
ended December 31, 2005 (2005). In 2006, BancTrusts net interest margin was 3.71%, compared to 3.64% in 2005. Net interest margin is net interest income expressed as a percentage of average earning assets, or stated another
way, is the net yield earned on interest earning assets after deducting interest expense. As stated above, increased loan demand in 2006 contributed to the improvement in net interest margin between the two years.



22



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Provision for loan losses increased from ($675,000) in 2005 to $45,000 in 2006, representing a shift from
a credit balance, and having the effect of increasing net income in 2005, to reducing income in 2006 (see Provision for Loan Losses). Noninterest income increased in 2006, primarily due to higher deposit service charges. Noninterest
expense decreased to $26,975,000 in 2006 from $27,185,000 in 2005.

CRITICAL ACCOUNTING POLICIES

BancTrusts significant accounting policies are presented in Note 1 to Consolidated Financial Statements. These policies, along with the disclosures
presented in the other footnotes, provide information on how significant assets and liabilities are valued in the financial statements and how those values are determined. Those accounting policies involving significant estimates and assumptions by
management, which have, or could have, a material impact on the carrying value of certain assets and impact comprehensive income, are considered critical accounting policies. BancTrust recognizes the following as critical accounting policies:
Allowance for Loan Losses and Goodwill Impairment Analysis.

Allowance for Loan Losses. Managements ongoing evaluation of
the adequacy and allocation of the allowance considers both impaired and unimpaired loans and takes into consideration the Banks past loan loss experience, known and inherent risks in the portfolio, adverse situations that may affect the
borrowers ability to repay, estimated value of any underlying collateral, the reviews of regulators, and an analysis of current economic conditions. While management believes that it has exercised prudent judgment and applied reasonable
assumptions which have resulted in an allowance presented in accordance with generally accepted accounting principles, there can be no assurance that in the future, adverse economic conditions, increased nonperforming loans, regulatory concerns, or
other factors will not require further increases in, or re-allocation of the allowance. A more detailed discussion of BancTrusts allowance for loan losses is included in the respective section of Managements Discussion and Analysis and
Note 1 to Consolidated Financial Statements.

Goodwill Impairment Analysis. Goodwill represents the excess of the cost of the
acquisition over the fair value of the net assets acquired. BancTrust tests goodwill for impairment on an annual basis, or more often if events or circumstances indicate that there may be impairment. BancTrust has elected to perform its annual
testing as of June 30 each year. The goodwill impairment test is a two-step process, which requires management to make judgments in determining the assumptions used in the calculations. The first step involves estimating the fair value of each
reporting unit and comparing it to the reporting units carrying value, which includes the allocated goodwill. If the estimated fair value is less than the carrying value, then a second step is performed to measure the actual amount of goodwill
impairment. The second step first involves determining the implied fair value of goodwill. This requires BancTrust to allocate the estimated fair value to all the assets and liabilities of the reporting unit. Any unallocated fair value represents
the implied fair value of goodwill which is compared to its corresponding carrying value. If the carrying value exceeds the implied fair value, an impairment loss is recognized in an amount equal to that excess.

Fair values of reporting units were estimated using discounted cash flow models derived from internal earnings forecasts. The key assumptions used to
estimate the fair value of each reporting unit included earnings forecasts for 10 years, terminal values based on future growth rates and discount interest rates. Changes in market interest rates, depending on the magnitude and duration, could
impact the discount interest rates used in the impairment analysis. Generally, and with all other assumptions remaining the same, increasing the discount interest rate used in the analysis would tend to lower the fair value estimates, while lowering
the discount interest rate would tend to increase the fair value estimates.

The goodwill impairment analysis for 2006 indicated that no
impairment write-offs were required. Further discussion regarding BancTrusts accounting for goodwill is included at Note 1 to Consolidated Financial Statements.



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BALANCE SHEET SUMMARY

Loans

BancTrusts largest earning asset category is its loan portfolio. Because loans generally
generate the highest yields, most other assets and liabilities are managed to accommodate fluctuations in the loan portfolio.

At
December 31, 2006, BancTrusts loans, net of the unearned discount, totaled $631,800,000, compared to $495,509,000 at December 31, 2005.

The following table illustrates the loan portfolio of BancTrust at December 31, 2006 and 2005 by major loan category, along with the change in each category between the two periods.



|                                          |  |                 |         |      |   |         |  |   |         |  
|----------------------------------------- |  | --------------- | ------- | ---- | - | ------- |  | - | ------- | -
|                                          |  | At December 31, |        
|                                          |  | (In thousands)  |        
|                                          |  | 2006            |         | 2005 |   | Change  | 
|Commercial and industrial                 |  | $               | 152,407 |      | $ | 87,339  |  | $ | 65,068  |  
|Real estate - mortgage (1)                |  |                 | 439,821 |      |   | 362,838 |  |   | 76,983  |  
|Personal                                  |  |                 | 46,332  |      |   | 45,196  |  |   | 1,136   |  
|Overdrafts and credit line                |  |                 | 2,225   |      |   | 1,019   |  |   | 1,206   |  
|                                          |  |                 |         |      |   |         |  |   |         |  
|Total loans                               |  |                 | 640,785 |      |   | 496,392 |  |   | 144,393 |  
|Less:                                     |  |                 |         |      |   |         |  |   |         |  
|Unearned discount                         |  |                 | 8,986   |      |   | 883     |  |   | 8,103   |  
|Allowance for loan losses                 |  |                 | 6,398   |      |   | 6,654   |  |   | (256    | )
|                                          |  |                 |         |      |   |         |  |   |         |  
|Total loans, net of the unearned discount |  | $               | 625,401 |      | $ | 488,855 |  | $ | 136,546 |  
|                                          |  |                 |         |      |   |         |  |   |         |  



|(1) | includes real estate contruction loans.
|--- | ---------------------------------------

Real estate
mortgage loans increased to $439,821,000 at December 31, 2006 from $362,838,000 at December 31, 2005, as BancTrust continued to place emphasis on originating loans secured by real estate. BancTrust emphasizes the origination of loans
secured by real estate primarily because fair market values for real estate tend to be more stable and readily determinable than fair market values for other forms of collateral such as equipment and inventories. Additionally, real estate collateral
tends to facilitate a more orderly and timely liquidation in the event of default by the borrower.

Commercial and industrial loans totaled
$152,407,000 at December 31, 2006 compared to $87,339,000 at December 31, 2005. Commercial and industrial loans are typically secured by assets such as inventories and equipment. The growth in commercial and industrial loans in 2006 was
primarily in BancTrusts equipment financing line of business.

The personal loan portfolio increased from $45,196,000 at
December 31, 2005 to $46,332,000 at December 31, 2006. Personal loans primarily include loans to individuals for household, family and other consumer related expenditures. This increase ends a trend of declining personal loans balances
that BancTrust has experienced in recent periods. The two main factors for this declining trend remain the same as for prior periods, and are as follows: First, alternative sources of credit continue to be more available to consumers than in prior
years. Major sources of alternative credit include credit cards, finance companies and manufacturer direct financing on consumer goods such as automobiles, recreational vehicles and major appliances. Second, denials of personal loan applications
remain relatively high, primarily due to existing debt levels of personal loan applicants. For these reasons and others, BancTrust has chosen to reduce its emphasis on originating personal loans.



24



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Allowance for Loan Losses

Managements estimate of uncollectible amounts within BancTrusts loan portfolio is represented by the allowance for loan losses. The allowance for loan losses is established through charges against earnings
in the form of a provision for loan losses. A loan is charged against the allowance for loan losses when management determines that it is probable that BancTrust will not recover the entire loan balance either through repayment by the customer or
from collateral proceeds. Should a loan that has been charged off be recovered, either partially or entirely, it is credited back to the allowance. Periodic reviews of the loan portfolio that include analysis of such factors as current and expected
economic conditions, historical loss experience and levels of non-accruing loans and delinquencies, determine the appropriate level at which to maintain the allowance for loan losses. Because the allowance is based on assumptions and subjective
judgments, it is not necessarily reflective of the charge-offs that may ultimately occur.

Management monitors and evaluates all loans, in
an effort to identify those which currently possess, or otherwise indicate characteristics of weakness, potential weakness or non-conformity with their original terms. A loan is evaluated in light of its performance against its original stated
terms, the fair market value of the collateral securing the loan, known or anticipated economic events and or trends, and the on-going credit worthiness of the borrower and any guarantors. If when a loan is evaluated, there is determined to be a
deficiency (or deficiencies) in any of the aforementioned areas, the loan is added to a list of loans which are subject to heightened scrutiny, and for which additional loss reserves are maintained, depending on the magnitude of the deficiencies.
The loan continues to be monitored closely, which may include modifications through negotiations with the borrower. Such modifications may include, but are not limited to, the assignment of additional collateral, the modification of repayment terms
and the procurement of a guarantor(s). Generally after the loan has been paid back in full, or performs in a favorable manner for a sustained period of time with all identified deficiencies having been duly discharged and documented, will the loan
no longer receive the exceptionally close and frequent monitoring previously described.

Using input from BancTrusts credit risk
identification process, BancTrusts credit administration area analyzes and validates the loan loss reserve methodology at least quarterly. The analysis includes specific allowances for individual loans and general allowances for certain pools
of loans. The credit administration area along with senior management reviews and ensures the methodology is appropriate and that all risk elements have been assessed in order to determine the appropriate level of allowance for the inherent losses
in the loan portfolio at each quarter end. In addition, the allowance methodology is discussed with and reviewed quarterly by the Loan Committee of the Board of Directors.

The first area of the allowance for loan losses analysis involves the calculation of specific allowances for individual impaired loans as required by
SFAS 114 and 118. In addition, BancTrust requires that a broad group of loans be analyzed for impairment each quarter (this includes all loans of $500,000 and above that have internal risk ratings below a predetermined classification level). The
credit administration area validates all impairment testing and validates the reserve allocations for all impaired loans each quarter. Reserves associated with these activities are based on a thorough analysis of the most probable sources of
repayment which is normally the liquidation of collateral, but also includes discounted future cash flows or the market value of the loan itself.

The second reserve area is the general allowance for loan pools assessed by applying loan loss allowance factors to groups of loans within the portfolio that have similar characteristics. This part of the methodology is governed by SFAS 5.
The general allowance factors are based upon recent and historical charge-off experience and are typically applied to the portfolio by loan type. Historical loss analyses provide the basis for factors used for homogenous pools of smaller loans, such
as residential real estate and other consumer loan categories which are not evaluated based on individual risk ratings but almost entirely based on historical losses. The statistics used in this analysis of this second reserve element are adjusted
quarterly based on loss trends and risk rating migrations.



25



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At December 31, 2006, BancTrusts allowance for loan losses had a balance of $6,398,000,
compared to $6,654,000 at December 31, 2005. The ratio of the allowance to total loans, net of the unearned discount, was 1.01% and 1.34% at December 31, 2006 and 2005, respectively. At December 31, 2006, management had identified
$22,276,000 of potential problem loans compared to $24,974,000 at December 31, 2005. At each of December 31, 2006 and 2005, potential problem loans included impaired loans of $6,761,000 and $7,487,000, respectively, and non-accruing loans
of $4,201,00 and $815,000 respectively. Reserves for potential problem loans accounted for $418,298 of the $6,398,000 allowance for loan losses at December 31, 2006. At December 31, 2005, potential problem loans accounted for $2,540,000 of
the $6,654,000 of allowance for loan losses. Non-accruing loans as a percent of total loans net of the unearned discount were 0.67% and 0.16% for December 31, 2006 and December 31, 2005 respectively. The coverage of the allowance to
non-accruing loans was 152% and 816% at December 31, 2006 and 2005, respectively. As a percentage of average loans, net of the unearned discount, net loan charge offs in 2006 were 0.05% compared with 0.37% in 2005.

BancTrusts management believes that material improvements in credit quality are directly related to intensive review of and modifications to its
credit administration processes beginning late in 2002. To that end, BancTrust established the executive level position of Senior Credit Officer, thereby segregating credit administration functions from lending functions as administered by the
Senior Lender. Significant resources were then allocated to establishing and or modifying credit review processes with the intent being to produce highly critical and objective analyses of existing and proposed credit facilities. Through such
analyses, management significantly enhanced its ability to identify and manage certain risks inherent in the lending function. Management remains firmly committed to devoting the necessary time, energy and other resources required to maintain credit
quality.

Management believes that at its current level, the allowance for loan losses is sufficient to absorb all probable losses that
currently exist in BancTrusts loan portfolio. See Notes 1 and 5 to Consolidated Financial Statements incorporated in Item 15.-Exhibits and Financial Statement Schedules for further information regarding the allowance for loan
losses. See also Item 1A  Risk Factors.

Securities

BancTrusts securities portfolio decreased to $204,602,000 at December 31, 2006 from $226,043,000 at December 31, 2005. Available funds
were deployed out of BancTrusts investment securities portfolio and into its loan portfolio, to accommodate growth in the loan portfolio (see Loans).

At December 31, 2006, BancTrust had pledged to the State Treasurer for the State of Alabama and other parties $154,149,000, or approximately 75% of its investment securities portfolio. These securities are
typically pledged as collateral to government or other public entities for deposits held by BancTrust that exceed the FDIC insurable limit.

The entire securities portfolio is classified as available-for-sale, requiring that it be marked-to-market with the unrealized gains and losses, net of the related tax effect, reflected directly in stockholders equity. The
portfolio had net unrealized losses of $2,592,000 (net of tax) at December 31, 2006, compared to a net unrealized loss of $3,449,000 (net of tax) at December 31, 2005. See Notes 1 and 4 to Consolidated Financial Statements incorporated in
Item 15.-Exhibits and Financial Statement Schedules for further information regarding securities.

Cash and Cash Equivalents

Cash and cash equivalents totaled $27,455,000 at December 31, 2006 and $48,585,000 at December 31, 2005. As with securities
(see Securities), BancTrust deployed funds out of cash and cash equivalents to accommodate growth in its loan portfolio (see Loans). Cash and cash equivalents are comprised of cash and due from other banks and federal funds
sold and resell agreements. For 2006, cash and due from banks accounted for all cash and cash equivalents at December 31, 2006 compared to $34,585,000 at December 31, 2005. Federal funds sold and resell agreements totaled $14,000,000 at
December 31, 2005, while there were none outstanding at December 31, 2006. These investments are highly liquid, and typically have investment terms of only one day.



26



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Within cash and due from other banks are short term certificates of deposit held in other banks.
Historically, BancTrust has held funds in other banks on a demand basis, and at levels only necessary to conduct day-to-day correspondent banking transactions, or held substantial funds at the FHLB on a demand basis when the interest rate paid by
FHLB for such funds exceeded that of other financial institutions published federal funds rates. In order to increase the yields earned on cash equivalent instruments, BancTrust purchased from certain unaffiliated financial institutions the
aforementioned certificates of deposit. BancTrust monitors closely the financial institutions from which these certificates are purchased, and follows strict policy guidelines regarding minimum capital levels and other safety and soundness measures
that must be met before a purchase is made. These instruments typically have maturities of less than one year. BancTrust held $1,171,000 and $4,345,000 of these instruments at December 31, 2006 and 2005, respectively.

Cash and cash equivalents are monitored on a daily basis. Management attempts to strike a balance between alternative investments opportunities such as
loans and investment securities, and its operating liquidity needs (see Liquidity).

Other Real Estate

Other real estate (ORE) represents real estate BancTrust has acquired via foreclosure on loans secured by real estate, or otherwise taken
possession of in lieu of foreclosure on loans secured by real estate, or other premises not used in the ordinary course of its operations. When BancTrust takes possession of real estate in such a manner, it is recorded at its fair market value.
Periodically, BancTrust may reduce the value of ORE through write downs in its value resulting from fluctuations in market values. Additionally, BancTrust may periodically record write downs that are related to regulations addressing the maximum
period of time a single ORE property can be recorded at a value greater than $1.

Other real estate, net of accumulated write downs,
totaled $1,034,000 at December 31, 2006 and $2,746,000 at December 31, 2005.

Deposits

BancTrusts primary source of funding for its lending and investment activities is its deposit base. At December 31, 2006, BancTrust had total
deposits in the amount of $768,701,000. At December 31, 2005, total deposits were $688,049,000. BancTrust continually seeks to attract deposit relationships with new and existing customers within its primary markets. As loan demand and growth
accelerated in 2006 (see Loans), so to did BancTrusts emphasis on developing deposit relationships within its primary markets. As a result, the aforementioned increase in total deposits occurred.

Noninterest bearing deposits declined to $84,728,000 at December 31, 2006 from $85,538,000 at December 31, 2005. Interest bearing transaction
accounts such as negotiable order withdrawal (NOW) accounts and insured money market accounts (IMMA) along with savings accounts increased from a combined total of $274,975,000 at December 31, 2005 to $311,274,000 at
December 31, 2006.

Time deposits increased to $372,699,000 at December 31, 2006, compared to $327,536,000 at December 31,
2005. BancTrust attracted additional retail time deposits in its primary markets to meet some of the aforementioned loan funding requirements (see Loans), as well as $40,604,000 of brokered time deposits for the same purpose. BancTrust
utilizes brokered time deposits in order to meet funding needs not met by more traditional types of deposits. At December 31, 2006, BancTrust was in receipt of $61,273,000 of brokered time deposits. Brokered time deposits are more likely to be
withdrawn from BancTrust than other, more traditional types of deposits. Brokered time deposits are fully insured by the FDIC. See Item 1.- Business  Bank Regulation.

Liquidity

Liquidity describes BancTrusts
ability to meet its needs for cash. Those needs primarily include lending, withdrawal demands of customers and the payment of operating expenses.

Liquidity management is crucial in ensuring that BancTrust is able to conduct its day-to-day business. Without proper liquidity management, BancTrust would be restricted in its activities as a financial institution, including its ability to
meet the needs of the communities it serves.



27



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Typically, increasing the liquidity of BancTrust would serve to reduce its profits as a result of reduced
earnings from assets with shorter maturities. Estimating liquidity needs is made more complex by the fact that certain balance sheet components are, by nature, more controllable by management than others. For example, the maturity frequency of the
securities portfolio is generally manageable at the time investment decisions are made. However, deposits flowing into and out of BancTrust are much less predictable and controllable by management. Monitoring liquidity needs and the changing
relationships among certain balance sheet components is the responsibility of BancTrusts Asset Liability Committee (ALCO) (see Interest Rate Risk).

The asset items that are BancTrusts primary sources of liquidity are cash and cash equivalents (see Cash and Cash Equivalents). These
assets represent the most immediately available source of funds from which BancTrust is able to provide loans to it customers, meet the deposit withdrawal demands of its customers and pay its operating expenses.

The asset base generates liquidity through interest and fee income, loan repayments and the maturity or sales of other earning assets including
securities.At December 31, 2006, approximately 21.5% of the total securities portfolio was to mature within one year. At December 31, 2006, the entire securities portfolio, having a value of $204,602,000, was classified as
available-for-sale. These securities are generally high grade; marketable securities (see Securities).

The liability base
generates liquidity through deposit growth, the renewal of maturing deposits and accessibility to external sources of funds, (Borrowed funds). Borrowed funds totaled $48,268,000 at December 31, 2006, compared to $37,732,000 at
December 31, 2005. BancTrust has several available sources from which to borrow funds.

The predominant source of borrowed funds
utilized by BancTrust is the FHLB. At December 31, 2006, BancTrust had borrowed from the FHLB $47,452,000, along with $18,482,000 of letters of credit issued on behalf of BancTrust from the FHLB. BancTrust obtains backup letters of
credit from the FHLB as necessary to facilitate the public offering of debt instruments for which BancTrust has provided its own letters of credit to the issuer. When determining available borrowing capacity at the FHLB, BancTrust must factor both
borrowed funds balances outstanding and the total amount of letters of credit outstanding against its available lines of credit. At December 31, 2006, BancTrust had total credit facilities (borrowed funds outstanding plus letters of credit) at
the FHLB of $65,934,000 against a total line of credit of $80,374,000. See Note 10 to Consolidated Financial Statements incorporated in Item 15.-Exhibits and Financial Statement Schedules for further information regarding borrowed
funds.

At December 31, 2006, BancTrust had in place an Acquisition Facility Agreement with Endurance Capital Management,
L.P.(Endurance), setting forth a variety of possible equity, debt or combined financing vehicles that may be available to BancTrust in coordination with Endurance, although neither party is obligated to request or provide any financing
under the Acquisition Facility Agreement. The Acquisition Facility Agreement provides for a maximum of $20,000,000 in financing vehicles available to BancTrust and contains customary representations, warranties and covenants of the parties.

At December 31, 2006, BancTrust also had available, unused lines of credit with correspondent financial institutions of approximately
$52 million.



28



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The following table provides additional details regarding borrowed funds:



|                 |  |                                         |        |                |   |                     |  |      |                               |  |      |  
|---------------- |  | --------------------------------------- | ------ | -------------- | - | ------------------- |  | ---- | ----------------------------- |  | ---- | -
|                 |  | MaximumAmountOutstandingat AnyMonth End |        | AverageBalance |   | AverageInterestRate |  |      | AverageInterestRate atYearend | 
|                 |  | (Dollars in thousands)                  |       
|2006             |  |                                         |        |                |   |                     |  |      |                               |  |      |  
|FHLB borrowings  |  | $                                       | 47,715 |                | $ | 42,280              |  | 5.31 | %                             |  | 4.88 | %
|Other borrowings |  |                                         | 12,316 |                |   | 2,373               |  | 0.67 | %                             |  | 0.50 | %
|                 |  |                                         |        |                |   |                     |  |      |                               |  |      |  
|                 |  | $                                       | 60,031 |                | $ | 44,653              |  | 5.06 | %                             |  | 4.81 | %
|                 |  |                                         |        |                |   |                     |  |      |                               |  |      |  
|2005             |  |                                         |        |                |   |                     |  |      |                               |  |      |  
|FHLB borrowings  |  | $                                       | 46,469 |                | $ | 41,707              |  | 5.25 | %                             |  | 5.48 | %
|Other borrowings |  |                                         | 1,812  |                |   | 1,276               |  | 2.74 | %                             |  | 0.50 | %
|                 |  |                                         |        |                |   |                     |  |      |                               |  |      |  
|                 |  | $                                       | 48,281 |                | $ | 42,983              |  | 5.18 | %                             |  | 5.37 | %
|                 |  |                                         |        |                |   |                     |  |      |                               |  |      |  
|2004             |  |                                         |        |                |   |                     |  |      |                               |  |      |  
|FHLB borrowings  |  | $                                       | 53,966 |                | $ | 49,387              |  | 4.68 | %                             |  | 5.48 | %
|Other borrowings |  |                                         | 1,812  |                |   | 1,843               |  | 1.41 | %                             |  | 2.43 | %
|                 |  |                                         |        |                |   |                     |  |      |                               |  |      |  
|                 |  | $                                       | 55,778 |                | $ | 51,230              |  | 4.56 | %                             |  | 5.37 | %
|                 |  |                                         |        |                |   |                     |  |      |                               |  |      |  

Stockholders Equity and Regulatory Capital Requirements

Stockholders equity indicates BancTrusts net worth. Stockholders equity was $86,794,000 at December 31, 2006, compared to
$81,551,000 at December 31, 2005.

The FRB has adopted risk-based capital regulations. These regulations require all bank holding
companies and banks to achieve, and maintain, specified ratios of capital to risk-weighted assets. The risk-based capital rules assign weight factors to different classes of assets and off-balance sheet obligations at 0%, 20%, 50% or 100%, depending
upon the risk classification of the asset or obligation. All bank holding companies and banks are required to maintain a minimum total capital to total risk-weighted assets ratio of 8.00%, at least half of which must be in the form of core, or Tier
1 capital (consisting of stockholders equity, less goodwill and certain components of accumulated other comprehensive income, net of tax). BancTrusts and Peoples Banks capital ratios at December 31, 2006 were well above the
minimum regulatory requirements. See Note 17 to Consolidated Financial Statements incorporated in Item 15.-Exhibits and Financial Statement Schedules for further information regarding stockholders equity and regulatory capital
requirements.

The following table indicates BancTrusts dividends per share, earnings per share and the percent of earnings per share
represented by dividends in 2006, 2005 and 2004.



|                             |  |      |       |   |      |   |       |      |  |   |       |  
|---------------------------- |  | ---- | ----- | - | ---- | - | ----- | ---- |  | - | ----- | -
|                             |  | 2006 |       |   | 2005 |   |       | 2004 | 
|Earnings per share (diluted) |  | $    | 1.36  |   |      | $ | 1.12  |      |  | $ | 1.08  |  
|Dividends per share          |  | $    | 0.48  |   |      | $ | 0.44  |      |  | $ | 0.44  |  
|Dividend payout ratio        |  |      | 35.29 | % |      |   | 39.29 | %    |  |   | 40.74 | %



29



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Contractual Obligations

BancTrust has contractual obligations to make future payments on debt and certain lease agreements. Obligations such as debt are reflected on the balance sheet, whereas operating lease obligations for office space and
equipment are not reflected on the balance sheet. See Note 14 to Consolidated Financial Statements incorporated in Item 15.-Exhibits and Financial Statement Schedules for further information on operating lease obligations. Total
contractual obligations at December 31, 2006 are set forth in the following table.



|                              |  |                        |         |                                      |   |                                        |  |                     |        |       |   |       |  |   |        
|----------------------------- |  | ---------------------- | ------- | ------------------------------------ | - | -------------------------------------- |  | ------------------- | ------ | ----- | - | ----- |  | - | -------
|                              |  | Due in one yearor less |         | Due after oneyear throughthree years |   | Due after threeyears throughfive years |  | Due after fiveyears |        | Total
|                              |  | (In thousands)        
|FHLB and other borrowings (1) |  | $                      | 2,996   |                                      | $ | 27,529                                 |  | $                   | 10,976 |       | $ | 5,951 |  | $ | 47,452 
|Time Deposits                 |  |                        | 246,932 |                                      |   | 95,703                                 |  |                     | 30,063 |       |   | 1     |  |   | 372,699
|Operating leases              |  |                        | 616     |                                      |   | 526                                    |  |                     | 182    |       |   |      |  |   | 1,324  
|                              |  |                        |         |                                      |   |                                        |  |                     |        |       |   |       |  |   |        
|Total contractual obligations |  | $                      | 250,544 |                                      | $ | 123,758                                |  | $                   | 41,221 |       | $ | 5,952 |  | $ | 421,475
|                              |  |                        |         |                                      |   |                                        |  |                     |        |       |   |       |  |   |        

---

|(1) | includes principal payments only
|--- | --------------------------------

Off Balance Sheet Arrangements

Many of BancTrusts lending relationships contain both funded and unfunded elements. The unfunded elements of these relationships
are not reflected on the balance sheet. The following table indicates the total unfunded credit extension, or off-balance sheet, commitment amounts by expiration date. See Note 18 to Consolidated Financial Statements incorporated in
Item 15.-Exhibits and Financial Statement Schedules for further information on credit commitments.



|                                      |  |                            |        |                                         |   |                                           |  |                         |     |       |   |       |  |   |        
|------------------------------------- |  | -------------------------- | ------ | --------------------------------------- | - | ----------------------------------------- |  | ----------------------- | --- | ----- | - | ----- |  | - | -------
|                                      |  | Expires in oneyear or less |        | Expires afterone yearthrough threeyears |   | Expires afterthree yearsthrough fiveyears |  | Expires afterfive years |     | Total
|                                      |  | (Dollars in thousands)    
|Lending commitments (1)               |  | $                          | 69,869 |                                         | $ | 28,842                                    |  | $                       |    |       | $ | 9,349 |  | $ | 108,060
|Irrevocable standby letters of credit |  |                            | 16,733 |                                         |   | 4,096                                     |  |                         | 577 |       |   |      |  |   | 21,406 
|                                      |  |                            |        |                                         |   |                                           |  |                         |     |       |   |       |  |   |        
|Total credit extension commitments    |  | $                          | 86,602 |                                         | $ | 32,938                                    |  | $                       | 577 |       | $ | 9,349 |  | $ | 129,466
|                                      |  |                            |        |                                         |   |                                           |  |                         |     |       |   |       |  |   |        

---

|(1) | Lending commitments are primarily comprised of the unused portion of commercial lines of credit and equity lines of credit
|--- | --------------------------------------------------------------------------------------------------------------------------

Commitments to extend credit are agreements to lend to a customer as long as there is no violation of any condition established in the agreement.
Commitments generally have fixed expiration dates or other termination clauses and may require payment of a fee. Since many of BancTrusts commitments are expected to expire without being drawn upon, the total commitment amounts do not
necessarily represent future cash requirements. BancTrust had approximately $108,060,000 and $104,280,000 in commitments to extend credit at December 31, 2006 and 2005, respectively. BancTrust evaluates each customers credit worthiness on
a case-by-case basis. The amount of collateral obtained, if deemed necessary by BancTrust upon extension of credit, is based on managements credit evaluation of the customer. Collateral held varies, but may include certificates of deposit,
marketable securities, real estate, and other collateral.

Irrevocable standby letters of credit are conditional commitments issued by
BancTrust to guarantee the performance of a customer to an outside third party. Those guarantees are primarily issued to support public and private borrowing arrangements, including commercial paper, bond financing and similar transactions. The
credit risk involved in issuing letters of credit is essentially the same as that involved in extending loan facilities to customers. The collateral varies but may include certificates of deposit, marketable securities, real estate, and other
collateral for those commitments for which collateral is deemed necessary. BancTrust had approximately $21,406,000 and $23,218,000 in irrevocable standby letters of credit at December 31, 2006 and 2005, respectively.



30



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INCOME SUMMARY

Net Income

Net income for 2006 increased to $8,080,000 from $6,537,000 in 2005. Increases in net
interest income and noninterest income were complemented by a slight reduction in the noninterest expenses and provided an offset to the increase in provision for loan losses. Provision for loan losses was an expense of $45,000 for 2006 versus a
$675,000 boost to income in 2005.

Net Interest Income

Net interest income is the amount of total interest earned on loans and securities that remains after interest expense for interest-bearing deposits and borrowed funds has been subtracted. This is the single largest
income source for BancTrust. Movements in interest rates, coupled with other factors such as changes in the relationship of interest earning assets to interest bearing liabilities, have direct effects on BancTrusts net interest income.

The following table, Analysis of Changes in Interest Income and Expense, illustrates the changes, and causes of those changes,
in each line item that makes up net interest income. The next table, Average Balance Sheets and Analysis of Net Interest Income, is a presentation of the average balance sheet, along with the income or expense realized or incurred with
each of its components. Only earning assets and interest bearing liabilities have interest income and expense associated with them.

ANALYSIS OF CHANGES IN INTEREST INCOME AND EXPENSE

FOR THE YEARS ENDED DECEMBER 31, 2006, 2005 AND 2004

(In Thousands)



|                                                                             |  |                       |        |   |                       |   |        |                    |  |   |        |   |  |       |      |   |                     |   |       |                    |  |   |        |   |  |   |       |   |  |   |      |  
|---------------------------------------------------------------------------- |  | --------------------- | ------ | - | --------------------- | - | ------ | ------------------ |  | - | ------ | - |  | ----- | ---- | - | ------------------- | - | ----- | ------------------ |  | - | ------ | - |  | - | ----- | - |  | - | ---- | -
|                                                                             |  | 2006 Compared to 2005 |        |   | 2005 Compared to 2004 |  
|                                                                             |  | Total                 |        |   | Changesin Volume(1)   |   |        | Changesin Rates(1) |  |   | Mix(1) |   |  | Total |      |   | Changesin Volume(1) |   |       | Changesin Rates(1) |  |   | Mix(1) |  
|Interest income on:                                                          |  |                       |        |   |                       |   |        |                    |  |   |        |   |  |       |      |   |                     |   |       |                    |  |   |        |   |  |   |       |   |  |   |      |  
|Loans                                                                        |  | $                     | 11,924 |   |                       | $ | 7,440  |                    |  | $ | 3,641  |   |  | $     | 843  |   |                     | $ | 4,111 |                    |  | $ | 1,000  |   |  | $ | 3,004 |   |  | $ | 107  |  
|Taxable securities                                                           |  |                       | (668   | ) |                       |   | (1,226 | )                  |  |   | 648    |   |  |       | (90  | ) |                     |   | 640   |                    |  |   | 117    |   |  |   | 516   |   |  |   | 7    |  
|Nontaxable securities                                                        |  |                       |       |   |                       |   |       |                    |  |   |       |   |  |       |     |   |                     |   | (9    | )                  |  |   | (9     | ) |  |   | 143   |   |  |   | (143 | )
|Federal funds sold, resell agreements and interest earning deposits in banks |  |                       | (17    | ) |                       |   | (457   | )                  |  |   | 784    |   |  |       | (344 | ) |                     |   | 412   |                    |  |   | (154   | ) |  |   | 749   |   |  |   | (183 | )
|                                                                             |  |                       |        |   |                       |   |        |                    |  |   |        |   |  |       |      |   |                     |   |       |                    |  |   |        |   |  |   |       |   |  |   |      |  
|Total interest income                                                        |  | $                     | 11,239 |   |                       | $ | 5,757  |                    |  | $ | 5,073  |   |  | $     | 409  |   |                     | $ | 5,154 |                    |  | $ | 954    |   |  | $ | 4,412 |   |  | $ | (212 | )
|                                                                             |  |                       |        |   |                       |   |        |                    |  |   |        |   |  |       |      |   |                     |   |       |                    |  |   |        |   |  |   |       |   |  |   |      |  
|Interest expense on:                                                         |  |                       |        |   |                       |   |        |                    |  |   |        |   |  |       |      |   |                     |   |       |                    |  |   |        |   |  |   |       |   |  |   |      |  
|Interest bearing demand deposits                                             |  | $                     | 2,576  |   |                       | $ | 116    |                    |  | $ | 2,380  |   |  | $     | 80   |   |                     | $ | 1,206 |                    |  | $ | 98     |   |  | $ | 1,062 |   |  | $ | 46   |  
|Savings deposits                                                             |  |                       |       |   |                       |   | (3     | )                  |  |   | 3      |   |  |       |     |   |                     |   | (16   | )                  |  |   | (1     | ) |  |   | (15   | ) |  |   |     |  
|Time deposits                                                                |  |                       | 5,949  |   |                       |   | 1,487  |                    |  |   | 3,869  |   |  |       | 593  |   |                     |   | 2,961 |                    |  |   | 97     |   |  |   | 2,824 |   |  |   | 40   |  
|Federal funds purchased and and repurchase agreements                        |  |                       | 80     |   |                       |   | 13     |                    |  |   | 9      |   |  |       | 58   |   |                     |   |      |                    |  |   |       |   |  |   | 1     |   |  |   |     |  
|FHLB borrowings                                                              |  |                       | (46    | ) |                       |   | 16     |                    |  |   | (62    | ) |  |       |     |   |                     |   | (111  | )                  |  |   | (375   | ) |  |   | 314   |   |  |   | (50  | )
|                                                                             |  |                       |        |   |                       |   |        |                    |  |   |        |   |  |       |      |   |                     |   |       |                    |  |   |        |   |  |   |       |   |  |   |      |  
|Total interest expense                                                       |  | $                     | 8,559  |   |                       | $ | 1,629  |                    |  | $ | 6,199  |   |  | $     | 731  |   |                     | $ | 4,040 |                    |  | $ | (181   | ) |  | $ | 4,186 |   |  | $ | 36   |  
|                                                                             |  |                       |        |   |                       |   |        |                   
|Net changes in net interest income before loan losses                        |  | $                     | 2,680  |   |                       |   |        |                    |  |   |        |   |  |       |      |   |                     | $ | 1,114 |                    |  |   |        |   |  |   |       |   |  |   |      |  
|                                                                             |  |                       |        |   |                       |   |        |                    |  |   |        |   |  |       |      |   |                     |   |       |                    |  |   |        |   |  |   |       |   |  |   |      |  



|1) | Increases (decreases) are attributed to volume changes and rate changes on the following basis: Changes in Volume = change in volume times old rate. Changes in Rates = change in
rate times old volume. The Mix Change = change in volume times change in rate.
|-- | ----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------



|2) | Columns may not add because of rounding
|-- | ---------------------------------------



31



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THE PEOPLES BANCTRUST CO., INC.

AVERAGE BALANCE SHEETS AND ANALYSIS OF NET INTEREST INCOME

FOR THE YEARS ENDED DECEMBER
31, 2006, 2005 AND 2004

(Dollars in thousands)



|                                                                             |  |                |         |          |      |            |  |      |                |  |          |         |            |   |        |                |      |          |  |            |         |  |   |        |  |      |  
|---------------------------------------------------------------------------- |  | -------------- | ------- | -------- | ---- | ---------- |  | ---- | -------------- |  | -------- | ------- | ---------- | - | ------ | -------------- | ---- | -------- |  | ---------- | ------- |  | - | ------ |  | ---- | -
|                                                                             |  | 2006           |         |          | 2005 |            |  | 2004 |               
|                                                                             |  | AverageBalance |         | Interest |      | Yield/Cost |  |      | AverageBalance |  | Interest |         | Yield/Cost |   |        | AverageBalance |      | Interest |  | Yield/Cost |        
|ASSETS                                                                       |  |                |         |          |      |            |  |      |                |  |          |         |            |   |        |                |      |          |  |            |         |  |   |        |  |      |  
|Interest Earning Assets:                                                     |  |                |         |          |      |            |  |      |                |  |          |         |            |   |        |                |      |          |  |            |         |  |   |        |  |      |  
|Loans, net (1)                                                               |  | $              | 566,742 |          | $    | 44,063     |  | 7.77 | %              |  | $        | 460,214 |            | $ | 32,140 |                | 6.98 | %        |  | $          | 444,364 |  | $ | 28,029 |  | 6.31 | %
|Taxable securities                                                           |  |                | 206,641 |          |      | 8,177      |  | 3.96 | %              |  |          | 239,886 |            |   | 8,843  |                | 3.69 | %        |  |            | 236,519 |  |   | 8,203  |  | 3.47 | %
|Nontaxable securities                                                        |  |                |        |          |      |           |  | 0.00 | %              |  |          |        |            |   |       |                | 0.00 | %        |  |            | 152     |  |   | 9      |  | 5.92 | %
|Federal funds sold, resell agreements and interest earning deposits in banks |  |                | 16,816  |          |      | 1,022      |  | 6.08 | %              |  |          | 29,999  |            |   | 1,040  |                | 3.47 | %        |  |            | 39,719  |  |   | 628    |  | 1.58 | %
|                                                                             |  |                |         |          |      |            |  |      |                |  |          |         |            |   |        |                |      |          |  |            |         |  |   |        |  |      |  
|Total interest earning assets                                                |  |                | 790,199 |          | $    | 53,262     |  | 6.74 | %              |  |          | 730,099 |            | $ | 42,023 |                | 5.76 | %        |  |            | 720,754 |  | $ | 36,869 |  | 5.12 | %
|                                                                             |  |                |         |          |      |            |  |      |                |  |          |         |            |   |        |                |      |          |  |            |         |  |   |        |  |      |  
|Non-Interest Earning Assets:                                                 |  |                |         |          |      |            |  |      |                |  |          |         |            |   |        |                |      |          |  |            |         |  |   |        |  |      |  
|Cash and due from banks                                                      |  |                | 19,244  |          |      |            |  |      |                |  |          | 21,899  |            |   |        |                |      |          |  |            | 19,457  |  |   |        |  |      |  
|Bank premises & equipment (net)                                              |  |                | 20,970  |          |      |            |  |      |                |  |          | 18,951  |            |   |        |                |      |          |  |            | 17,330  |  |   |        |  |      |  
|Other assets                                                                 |  |                | 23,539  |          |      |            |  |      |                |  |          | 21,690  |            |   |        |                |      |          |  |            | 17,379  |  |   |        |  |      |  
|                                                                             |  |                |         |          |      |            |  |      |                |  |          |         |            |   |        |                |      |          |  |            |         |  |   |        |  |      |  
|Total non-interest earning assets                                            |  |                | 63,753  |          |      |            |  |      |                |  |          | 62,540  |            |   |        |                |      |          |  |            | 54,166  |  |   |        |  |      |  
|                                                                             |  |                |         |          |      |            |  |      |                |  |          |         |            |   |        |                |      |          |  |            |         |  |   |        |  |      |  
|Total assets                                                                 |  | $              | 853,952 |          |      |            |  |      |                |  | $        | 792,639 |            |   |        |                |      |          |  | $          | 774,920 |  |   |        |  |      |  
|                                                                             |  |                |         |          |      |            |  |      |                |  |          |         |            |   |        |                |      |          |  |            |         |  |   |        |  |      |  
|LIABILITIES AND STOCKHOLDERS EQUITY                                         |  |                |         |          |      |            |  |      |                |  |          |         |            |   |        |                |      |          |  |            |         |  |   |        |  |      |  
|Interest bearing Liabilities:                                                |  |                |         |          |      |            |  |      |                |  |          |         |            |   |        |                |      |          |  |            |         |  |   |        |  |      |  
|Interest bearing demand deposits                                             |  | $              | 239,836 |          | $    | 6,024      |  | 2.51 | %              |  | $        | 232,056 |            | $ | 3,448  |                | 1.49 | %        |  | $          | 222,341 |  | $ | 2,242  |  | 1.01 | %
|Savings deposits                                                             |  |                | 36,003  |          |      | 39         |  | 0.11 | %              |  |          | 39,314  |            |   | 39     |                | 0.10 | %        |  |            | 39,918  |  |   | 55     |  | 0.14 | %
|Time deposits                                                                |  |                | 359,642 |          |      | 15,652     |  | 4.35 | %              |  |          | 311,864 |            |   | 9,703  |                | 3.11 | %        |  |            | 307,460 |  |   | 6,742  |  | 2.19 | %
|FHLB and other borrowings                                                    |  |                | 44,653  |          |      | 2,260      |  | 5.06 | %              |  |          | 42,983  |            |   | 2,226  |                | 5.18 | %        |  |            | 51,230  |  |   | 2,337  |  | 4.56 | %
|                                                                             |  |                |         |          |      |            |  |      |                |  |          |         |            |   |        |                |      |          |  |            |         |  |   |        |  |      |  
|Total interest bearing liabilities                                           |  |                | 680,134 |          | $    | 23,975     |  | 3.53 | %              |  |          | 626,217 |            | $ | 15,416 |                | 2.46 | %        |  |            | 620,949 |  | $ | 11,376 |  | 1.83 | %
|                                                                             |  |                |         |          |      |            |  |      |                |  |          |         |            |   |        |                |      |          |  |            |         |  |   |        |  |      |  
|Non-interest bearing demand deposits                                         |  |                | 82,151  |          |      |            |  |      |                |  |          | 81,454  |            |   |        |                |      |          |  |            | 76,391  |  |   |        |  |      |  
|Other liabilities                                                            |  |                | 6,772   |          |      |            |  |      |                |  |          | 4,844   |            |   |        |                |      |          |  |            | 4,322   |  |   |        |  |      |  
|                                                                             |  |                |         |          |      |            |  |      |                |  |          |         |            |   |        |                |      |          |  |            |         |  |   |        |  |      |  
|Total non-interest bearing liabilities                                       |  |                | 88,923  |          |      |            |  |      |                |  |          | 86,298  |            |   |        |                |      |          |  |            | 80,713  |  |   |        |  |      |  
|                                                                             |  |                |         |          |      |            |  |      |                |  |          |         |            |   |        |                |      |          |  |            |         |  |   |        |  |      |  
|Total liabilities                                                            |  |                | 769,057 |          |      |            |  |      |                |  |          | 712,515 |            |   |        |                |      |          |  |            | 701,662 |  |   |        |  |      |  
|Stockholders equity                                                         |  |                | 84,895  |          |      |            |  |      |                |  |          | 80,124  |            |   |        |                |      |          |  |            | 73,258  |  |   |        |  |      |  
|                                                                             |  |                |         |          |      |            |  |      |                |  |          |         |            |   |        |                |      |          |  |            |         |  |   |        |  |      |  
|Total liabilities and stockholders equity                                   |  | $              | 853,952 |          |      |            |  |      |                |  | $        | 792,639 |            |   |        |                |      |          |  | $          | 774,920 |  |   |        |  |      |  
|                                                                             |  |                |         |          |      |            |  |      |                |  |          |         |            |   |        |                |      |          |  |            |         |  |   |        |  |      |  
|Net interest income                                                          |  |                |         |          | $    | 29,287     |  |      |                |  |          |         |            | $ | 26,607 |                |      |          |  |            |         |  | $ | 25,493 |  |      |  
|Net yield on interest earning assets                                         |  |                |         |          |      |            |  | 3.71 | %              |  |          |         |            |   |        |                | 3.64 | %        |  |            |         |  |   |        |  | 3.54 | %



|(1) | Average balances include non-accruing loans of approximately $4,201,000, $815,000 and $2,121,000 in 2006, 2005 and 2004, respectively.
|--- | --------------------------------------------------------------------------------------------------------------------------------------

The table above sets forth certain information relating to BancTrusts average interest-earning assets and interest-bearing liabilities and reflects
the average yield on assets and average cost on liabilities for the years indicated. Such yields and costs are derived by dividing income or expense by the average daily balance of assets or liabilities, respectively, for the years indicated.

2006 versus 2005.Interest income totaled $53,262,000 in 2006, compared to $42,024,000 in 2005. Both average earning assets and the
average annual yields earned on them increased in 2006, compared to 2005. Average interest earning assets in 2006 totaled $790,199,000 and yielded 6.74%. In 2005, average interest earning assets totaled $730,099,000 and yielded 5.76%.



32



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BancTrusts loan portfolio typically produces the bulk of total interest income in any given period.
In 2006, interest and fees on loans totaled $44,063,000 and in 2005, totaled $32,140,000. This increase in total interest income between the two periods was attributed to increases in both the average volume of the loan portfolio as well as the
average annual yield earned on it. The average volume of BancTrusts loan portfolio in 2006 totaled $566,742,000 compared to $460,214,000 in 2005. The average annual yield earned on the loan portfolio in 2006 was 7.77% compared to 6.98% in
2005. Overall increases in market interest rates during 2006 contributed to the higher average loan portfolio yield, while increased loan demand contributed to higher average loan volumes.

BancTrusts investment securities portfolio earned interest and dividend income in 2006 of $8,176,000 compared to $8,843,000 in 2005. A decrease in
the average balance of the investment securities portfolio offset a 27 basis point increase in the average annual yield. In 2006, the investment securities portfolio earned an average annual yield of 3.96% on average volume of $206,641,000, compared
to a 3.69% yield on average volume of $239,886,000 in 2005. Increases in market interest rates contributed to the higher average yield, while loan growth which outpaced deposit increases contributed to lower average volumes.

Interest income earned on cash equivalent investments decreased to $1,022,000 in 2006 from $1,040,000 in 2005. The average annual yield on theses assets
increased to 6.08% in 2006 on average volume of $16,816,000. In 2005, these assets earned an average annual yield of 3.47% on average volume of $29,999,000. Short term market interest rates increased with greater magnitude in 2006 than did
intermediate and longer term interest rates, thereby accounting for the significant increase in the average annual yield earned by BancTrust on its cash equivalent investments. Generally, published federal funds interest rates represent the lowest
rate at which a financial institution can invest available funds at any given point in time.

Total interest expense in 2006 was
$23,975,000 compared to $15,416,000 in 2005. This increase was accounted for in both higher average interest bearing liability volumes and the average rate of interest paid on those liabilities. In 2006, BancTrust paid an average annual rate of
3.52% on its interest bearing liabilities compared to 2.46% in 2005. In 2006, the average volume of interest bearing liabilities increased to $680,134,000 from $626,217,000 in 2005.

Interest paid on interest bearing deposits increased in 2006 to $21,715,000 from $13,190,000 in 2005. Increases in both the average annual rate of
interest paid and average volume of these deposits accounted for this increase between the two periods. BancTrust paid an average annual rate of 3.42% on interest bearing deposits in 2006, compared to 2.26% in 2005. The average volume of interest
bearing deposits in 2006 was $635,481,000, compared to $583,234,000 in 2005. As market rates of interest increased in 2006, BancTrust increased the various rates of interest it paid for many of its interest bearing deposit account products, thereby
accounting for the aforementioned increase in the average rate of interest paid on interest bearing deposit accounts. BancTrusts continued emphasis on deposit growth (see Deposits) contributed to the increase in the average volume
of interest bearing deposits between 2006 and 2005.

Interest expense on borrowed funds (primarily FHLB borrowings) increased slightly in
2006 to $2,260,000 compared to $2,226,000 in 2005. BancTrust paid an average rate of interest on borrowed funds of 5.06% in 2006 and 5.18% in 2005. The average balance of borrowed funds in 2006 was $44,653,000 and $42,983,000 in 2005.

Net interest income in 2006 totaled $29,287,000 compared to $26,607,000 in 2005. Net interest margin, which is net interest income expressed as a
percentage of average earning assets was 3.71% and 3.64% in 2006 and 2005 respectively. The primary reason that BancTrusts net interest margin improved in 2006 was the aforementioned increases in market interest rates. The redeployment of
funds from the lower yielding investment securities and cash equivalent investment portfolios into the higher yielding loan portfolio contributed to the improvement as well.

2005 versus 2004.Interest income totaled $42,023,000 in 2005, compared to $36,869,000 in 2004. Both average earning assets and the average annual
yields earned on them increased in 2005, compared to 2004. Average interest earning assets in 2005 totaled $730,099,000 and yielded 5.76%. In 2004, average interest earning assets totaled $720,754,000 and yielded 5.12%.

BancTrusts loan portfolio typically produces the bulk of total interest income in any given period. In 2005, interest and fees on loans totaled
$32,140,000 and in 2004, totaled $28,029,000. This increase in total interest income between the two periods was attributed to increases in both the average volume of the loan portfolio as well as the average annual yield earned on it. The average
volume of BancTrusts loan portfolio in 2005 totaled $460,214,000 compared to $444,364,000 in 2004. The average annual yield earned on the loan portfolio in 2005 was 6.98% compared to 6.31% in 2004. Overall increases in market interest rates
during 2005 contributed to the higher average loan portfolio yield, while increased loan demand contributed to higher average loan volumes.



33



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BancTrusts investment securities portfolio earned interest and dividend income in 2005 of
$8,843,000 compared to $8,203,000 in 2004. Increases in both the average balance of the investment securities portfolio and the average annual yield earned on it contributed to this increase. In 2005, the investment securities portfolio earned an
average annual yield of 3.69% on average volume of $239,886,000, compared to a 3.47% yield on average volume of $236,519,000 in 2004. Increases in market interest rates contributed to the higher average yield, while deposit increases along with
decreases in federal funds sold and interest earning deposits in banks (cash equivalent investments) contributed to higher average volumes.

Interest income earned on cash equivalent investments increased to $1,040,000 in 2005 from $628,000 in 2004. The average annual yield on theses assets increased to 3.47% in 2005 on average volume of $29,999,000. In
2004, these assets earned an average annual yield of 1.58% on average volume of $39,719,000. Short term market interest rates increased with greater magnitude in 2005 than did intermediate and longer term interest rates, thereby accounting for the
significant increase in the average annual yield earned by BancTrut on its cash equivalent investments. Generally, published federal funds interest rates represent the lowest rate at which a financial institution can invest available funds at any
given point in time.

Total interest expense in 2005 was $15,416,000 compared to $11,376,000 in 2004. This increase was accounted for in
both higher average interest bearing liability volumes and the average rate of interest paid on those liabilities. In 2005, BancTrust paid an average annual rate of 2.46% on its interest bearing liabilities compared to 1.83% in 2004. In 2005, the
average volume of interest bearing liabilities increased to $626,217,000 from $620,949,000 in 2004.

Interest paid on interest bearing
deposits increased in 2005 to $13,190,000 from $9,039,000 in 2004. Increases in both the average annual rate of interest paid and average volume of these deposits accounted for this increase between the two periods. BancTrust paid an average annual
rate of interest on these deposits of 2.26% in 2005, compared to 1.46% in 2004. The average volume of interest bearing deposits in 2005 was $583,234,000 compared to $569,719,000 in 2004. As market rates of interest increased in 2005, BancTrust
increased the various rates of interest it was willing to pay for many of its interest bearing deposit account products, thereby accounting for the aforementioned increase in the average rate of interest paid on interest bearing deposit accounts.
BancTrusts continued emphasis on deposit growth (see Deposits) contributed to the increase in the average volume of interest bearing deposits between 2005 and 2004.

Interest expense on borrowed funds (primarily FHLB borrowings) declined slightly in 2005 to $2,226,000 compared to $2,337,000 in 2004. BancTrust paid an
average rate of interest on borrowed funds of 5.18% in 2005 and 4.56% in 2004. The average balance of borrowed funds in 2005 was $42,983,000 and $51,230,000 in 2004. As market interest rates increased in 2005, so to did the rate of interest
BancTrust paid on adjustable rate components of its borrowed funds, thereby contributing to the increase in borrowed funds cost.

Net
interest income in 2005 totaled $26,607,000 compared to $25,493,000 in 2004. Net interest margin, which is net interest income expressed as a percentage of average earning assets was 3.64% and 3.54% in 2005 and 2004 respectively. The primary reason
that BancTrusts net interest margin improved in 2005 was the aforementioned Increases in market interest rates. The redeployment of funds from the lower yielding investment securities and cash equivalent investment portfolios into the higher
yielding loan portfolio contributed to the improvement as well.

Provision for Loan Losses

2006 versus 2005.Provision for loan losses typically represents increases to the allowance for loan losses in the form of charges against income.
Consequently, provision for loan losses typically has the effect of reducing income. In 2005 this was not the case. In 2005, BancTrusts provision for loan losses was ($675,000) and increased income for the period. In 2006, provision for loan
losses was $45,000 and reduced income for the period.

2005 versus 2004.Provision for loan losses typically represents
increases to the allowance for loan losses in the form of charges against income. Consequently, provision for loan losses typically has the effect of reducing income. As in 2004, such was not the case in 2005. In 2005, BancTrusts provision for
loan losses was ($675,000), compared to ($149,000) in 2004, each having an increasing effect on income within their respective periods. Routine and periodic reviews of the loan portfolio during 2005 indicated that reductions in the allowance for
loan losses were necessary in order to accurately reflect general and specific risks within the loan portfolio (see Allowance for Loan Losses and Critical Accounting Policies), thereby contributing to the aforementioned
reduction in provision for loan losses.



34



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Noninterest Income

BancTrust realizes income from sources other than interest earned on loans and securities. Non-loan related fees and other noninterest income is seen by management as being a major source of earnings for BancTrust.
BancTrusts primary sources of noninterest income are deposit service charges, fee-based trust services, brokerage income, credit life commissions, and its insurance subsidiary. Through the development of new services and the continued
evaluation of existing fee structures, management intends to enhance the contribution of fee and other noninterest income to future earnings.

2006 versus 2005.Deposits service charges are the largest component of noninterest income for BancTrust. In 2006, deposit service charges increased to $5,700,000 from $5,337,000 in 2005. Increases in fee eligible activities among
deposit customers attributed to the increase.

Other noninterest income increased to $2,982,000 in 2006 from $2,786,000 in 2005. Increases
in service fees related to time deposit accounts, point of sale checking account cards and leasing contributed to the increase in other noninterest income.

Net securities losses totaled $18,000 for 2006 compared to net securities gains of $14,000 2005. Trust department income increased slightly in 2006 to $934,000 from $900,000 in 2005.

2005 versus 2004.Deposits service charges are the largest component of noninterest income for BancTrust. In 2005, deposit service charges
increased to $5,337,000 from $4,749,000 in 2004. Increases in fee eligible activities among deposit customers attributed to the increase.

Other noninterest income increased to $2,786,000 in 2005 from $2,568,000 in 2004. Increases in service fees related to the issuance of letters of credit, point of sale checking account cards and cash services contributed to the increase in
other noninterest income.

Net securities gains decreased in 2005 to $14,000 from $725,000 in 2004. Trading within the investment
securities portfolio was minimal in 2005, which contributed significantly to the reduction in net securities gains. Also, as market interest rates increased during 2005, market values of fixed rate debt securities declined, thereby reducing the
amount of gains to be realized when these types are securities were sold. Trust department income increased slightly in 2005 to $900,000 from $891,000 in 2004.

Noninterest Expense

Primary examples of noninterest expense include, but are not limited to:
employee salaries and benefits, premises and equipment, outside services, data processing and security. Management is firmly committed to controlling noninterest expenses, and is constantly seeking and evaluating techniques and courses of action
that could serve to reduce them, while maintaining its ability to provide quality service to its customer base, as well as operational integrity.

2006 versus 2005.Noninterest expense totaled $26,975,000 in 2006 and $27,185,000 in 2005. Lower salaries and wages and other noninterest expenses were the primary factors in the decrease as they offset an increase in pension costs
and other benefits.

Salaries and wages in 2006 totaled $11,782,000 compared to $12,372,000 in 2005. This decrease was primarily due to
staff reductions. Pensions and other benefits expenses increased to $3,083,000 in 2006 from $2,374,000 in 2005. The majority of this increase was accounted for in incentives and other personnel expenses related primarily to the recruitment of senior
level production personnel.

Occupancy and equipment expenses increased slightly to $5,172,000 in 2006 from $5,137,000 in 2005. The impact
of a full year of depreciation on 2005 expansion efforts as well as BancTrusts renovated operations center which was placed into service in the first quarter of 2005, accounted for the majority of this increase in occupancy and equipment
expenses.

Other noninterest expenses totaled $6,938,000 and $7,302,000 in 2006 and 2005 respectively. This decline was primarily
attributable to BancTrust having realized lower expenses related to its other real estate owned portfolio and fewer deposit account activity related charge offs.



35



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2005 versus 2004.Noninterest expense totaled $27,185,000 in 2005 and $26,563,000 in 2004.
Personnel and premises expenses associated with market expansions were the primary factors in this increase.

Salaries and wages in 2005
totaled $12,372,000 compared to $11,839,000 in 2004. This increase was primarily due to personnel additions as BancTrust expanded its lending presence in several of its key markets during 2005. Pensions and other benefits expenses increased to
$2,374,000 in 2005 from $2,050,000 in 2004. The majority of this increase was accounted for in health insurance costs due to an increase in the number of covered employees as well as increases in premiums charged by the insurer.

Occupancy and equipment expenses increased to $5,137,000 in 2005 from $4,865,000 in 2004. Premises and equipment expenses associated with expansion
efforts as well as BancTrusts newly renovated operations center which was placed into service in the first quarter of 2005, accounted for the majority of this increase in occupancy and equipment expenses.

Other noninterest expenses totaled $7,302,000 and $7,809,000 in 2005 and 2004 respectively. The primary reason for this decline was that in 2004,
BancTrust realized a loss on $551,000 on the sale of a commercial real estate loan. No such losses were realized in 2004.

Income Taxes

BancTrust participates in several low-income housing projects, which provide tax credits, and invests in certain nontaxable obligations of states and
political subdivisions, thus reducing its effective tax rate. Also, BancTrust owns life insurance policies on certain employees, the earnings of which are not taxable, thus further reducing its effective tax rate. See Note 11 to Consolidated
Financial Statements incorporated in Item 15.-Exhibits and Financial Statement Schedules.

2006 versus 2005.Before
the provision for income taxes, net income totaled $11,866,000 in 2006 and $9,136,000 in 2005. Provision for income taxes totaled $3,786,000 and $2,599,000 in 2006 and 2005 respectively. The effective income tax rate increased in 2006 to 31.9% from
28.5% in 2005, primarily due to the fact that income tax credits available to BancTrust are static amounts. Consequently, as income before provision for income taxes increased, the relative beneficial impact of these income tax credits was diluted.

2005 versus 2004.Before the provision for income taxes, net income totaled $9,136,000 in 2005 and $8,013,000 in 2004. Provision
for income taxes totaled $2,599,000 and $1,971,000 in 2005 and 2004 respectively. The effective income tax rate in 2005 was 28.5% and in 2004 was 24.6%. BancTrust made certain adjustments to its deferred income tax assets and liabilities in 2004
that were not necessary in 2005, and thereby accounted for the majority of the increase in the effective tax rate for 2005.

Interest Rate Risk

The profitability of most financial institutions, including BancTrust, is greatly dependent on net interest income. Given this,
management believes changes in interest rates impact BancTrusts profitability to a greater extent than the effects of general inflation levels. Interest rates do not always move with the same magnitude, or in the same direction as inflation.
When interest-earning assets are repricing to market interest rate levels at a different pace than interest-bearing liabilities, net interest income is affected either positively or negatively, depending on the direction market rates are moving.
When interest rates are volatile, liquidity and maturity of BancTrusts assets and liabilities is crucial in maintaining desired performance levels. Interest rates are highly sensitive to many factors, including Federal Reserve monetary
policies and domestic and international political conditions such as inflation, recession, unemployment, money supply and government borrowing. Other factors that are beyond managements control may also affect interest rates. Management is
unable to predict the future of interest rate movements; therefore, management attempts to strike a relative balance between rate sensitive assets and liabilities. This strategy is designed to protect BancTrusts profitability and its economic
value of equity against radical shifts in interest rate levels. Management believes the current relationship between rate sensitive assets and rate sensitive liabilities is adequately matched, indicating an acceptable exposure to interest-rate risk.
BancTrust maintains policy limitations and guidelines with regard to the relationship between rate sensitive assets and liabilities. The table below presents a quantitative expression of interest-rate risk.



36



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In February 2006, BancTrusts management entered into an agreement known as an interest rate
floor in order to hedge BancTrusts exposure to declining market interest rates. Pursuant to the agreement, BancTrusts counterparty has agreed to pay BancTrust an amount equal to the difference between the prime interest rate and
6.50% multiplied by a $50,000,000 notional amount in the event the prime interest rate falls below 6.50% during the five year term of the agreement. BancTrust paid to its counterparty a one-time premium equal to $445,000 which is being amortized
over the 5 year term of the agreement. The interest rate floor is being marked to market and accounted for as a cash flow hedge.

On
December 31, 2006, BancTrust had a positive cumulative one-year gap position of $95,505,000, indicating that while $462,978,000 in assets could reprice during 2007, $367,473,000 in liabilities could reprice in the same time frame. The above
table reflects a positive cumulative gap position in all maturity classifications. A positive cumulative gap position implies that interest earning assets (loans and securities) will reprice at a faster pace than interest-bearing liabilities
(deposits and debt). In a rising rate environment, this position will generally have a positive effect on earnings, while in a falling rate environment this position will generally have a negative effect on earnings. Other factors, however,
including the speed at which assets and liabilities reprice in response to changes in market rates, as well as competitive factors, can influence the overall impact that changes in interest rates have on net income. The actual interest rate
sensitivity of BancTrusts assets and liabilities could vary significantly from the information set forth in the above table due to market conditions and other factors.

The process of measuring, compiling and analyzing the maturity and repricing dynamics of interest sensitive assets and liabilities is referred to as,
asset liability management (ALM). BancTrust has established an ALCO (see  Liquidity), consisting of the Chief Executive Officer, Chief Financial Officer, Chief Operating Officer, Risk Management Officer,
Senior Lender, Chief Investment Officer, Retail Division Manager, Senior Credit Officer and the Principal Accounting Officer. The ALCO is responsible for ensuring that the relationship of interest sensitive assets and liabilities, as defined by
their respective maturity and repricing characteristics, does not become so mismatched as to expose BancTrust to unacceptable levels of risk in the areas of equity capital valuation, earnings or liquidity. ALCO achieves its objectives via regular
meetings where various data relating to specific liquidity and interest rate issues are presented and discussed. At least quarterly, ALCO utilizes an interest rate risk computer model which compiles the detailed repricing and maturity
characteristics of BancTrusts interest sensitive instruments (both assets and liabilities), and produces various reports and supporting detail, which indicate BancTrusts overall interest rate risk exposure.

New Accounting Standards

See Note 1 to Consolidated
Financial Statements incorporated in Item 15.-Exhibits and Financial Statement Schedules for discussion on new accounting standards.

Impact of Inflation and Changing Prices

The financial statements and accompanying data herein have been prepared according
to accounting principles generally accepted in the United States of America. Those principles dictate that financial position and operating results be measured in terms of historical dollars, with no consideration made for changes in the relative
purchasing power of money over time due to inflation.

The nature of a financial institutions assets and liabilities differs greatly
from that of most commercial concerns. They are monetary in nature, whereas those of most commercial and industrial entities are concentrated in fixed assets or inventories. Inflation does, however, affect the growth of total assets, creating the
need for more equity capital in order to maintain appropriate ratios of capital to assets. Inflation also affects noninterest expenses, which tend to rise during periods of inflation.



|ITEM 7A. | QUANTITATIVE AND QUALITATIVE DISCLOSURES ABOUT MARKET RISK
|-------- | ----------------------------------------------------------

See Item 7.-Managements Discussion and Analysis of Financial Condition and Results of Operations.



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|ITEM 8. | FINANCIAL STATEMENTS AND SUPPLEMENTARY DATA
|------- | -------------------------------------------

The
Consolidated Financial Statements and related notes thereto, along with related financial schedules as listed in Item 15.-Exhibits and Financial Statement Schedules have been included in this report, and should be referred to in
their entirety. The table below sets forth certain quarterly supplementary financial information.

SELECTED QUARTERLY FINANCIAL DATA 2006
- 2005

(Dollars in thousands, except for per share amounts)



|                                  |  |         |         |         |      |         |  |   |         |   |  |         |         |   |         |   |         |         |  |   |         |   |  |   |         |   |  |   |         |  
|--------------------------------- |  | ------- | ------- | ------- | ---- | ------- |  | - | ------- | - |  | ------- | ------- | - | ------- | - | ------- | ------- |  | - | ------- | - |  | - | ------- | - |  | - | ------- | -
|                                  |  | 2006    |         |         | 2005 |        
|                                  |  | Dec. 31 |         | Sep. 30 |      | Jun. 30 |  |   | Mar. 31 |   |  | Dec. 31 |         |   | Sep. 30 |   |         | Jun. 30 |  |   | Mar. 31 |  
|Net interest income               |  | $       | 7,544   |         | $    | 7,562   |  | $ | 7,297   |   |  | $       | 6,884   |   |         | $ | 6,731   |         |  | $ | 6,811   |   |  | $ | 6,626   |   |  | $ | 6,439   |  
|Provision for loan losses         |  |         | 509     |         |      | 428     |  |   | (351    | ) |  |         | (541    | ) |         |   | (193    | )       |  |   | (26     | ) |  |   | (143    | ) |  |   | (313    | )
|Income before income tax          |  |         | 2,132   |         |      | 2,615   |  |   | 3,415   |   |  |         | 3,704   |   |         |   | 2,263   |         |  |   | 2,650   |   |  |   | 2,223   |   |  |   | 2,000   |  
|Provision for income tax          |  |         | 676     |         |      | 756     |  |   | 1,141   |   |  |         | 1,213   |   |         |   | 822     |         |  |   | 600     |   |  |   | 612     |   |  |   | 565     |  
|Net income                        |  |         | 1,456   |         |      | 1,859   |  |   | 2,274   |   |  |         | 2,491   |   |         |   | 1,441   |         |  |   | 2,050   |   |  |   | 1,611   |   |  |   | 1,435   |  
|Net income per share (basic)      |  | $       | 0.25    |         | $    | 0.31    |  | $ | 0.39    |   |  | $       | 0.42    |   |         | $ | 0.25    |         |  | $ | 0.35    |   |  | $ | 0.27    |   |  | $ | 0.26    |  
|Net income per share (diluted)    |  |         | 0.25    |         |      | 0.31    |  |   | 0.38    |   |  |         | 0.42    |   |         |   | 0.24    |         |  |   | 0.35    |   |  |   | 0.27    |   |  |   | 0.26    |  
|Cash dividends declared per share |  |         | 0.12    |         |      | 0.12    |  |   | 0.12    |   |  |         | 0.12    |   |         |   | 0.11    |         |  |   | 0.11    |   |  |   | 0.11    |   |  |   | 0.11    |  
|Total Assets                      |  | $       | 910,705 |         | $    | 885,596 |  | $ | 868,281 |   |  | $       | 821,993 |   |         | $ | 811,773 |         |  | $ | 806,999 |   |  | $ | 781,485 |   |  | $ | 775,901 |  



|ITEM 9. | CHANGES IN AND DISAGREEMENTS WITH ACCOUNTANTS ON ACCOUNTING AND FINANCIAL DISCLOSURE
|------- | ------------------------------------------------------------------------------------

None



|ITEM 9A. | CONTROLS AND PROCEDURES
|-------- | -----------------------

Internal Controls over Disclosure

BancTrust maintains disclosure controls and procedures, as defined in Rule 13a-15(e) promulgated under the Securities Exchange Act of
1934 (the Exchange Act) that are designed to ensure that information required to be disclosed by it in the reports that it files or submits under the Exchange Act is recorded, processed, summarized and reported within the time periods
specified under the SECs rules and forms and that such information is accumulated and communicated to BancTrusts management, including its Chief Executive Officer and Chief Financial Officer, as appropriate, to allow timely decision
making regarding required disclosure. BancTrusts, under the supervision and participation of its management, including BancTrusts Chief Executive Officer and the Chief Financial Officer, carried out an evaluation of the effectiveness of
the design and operation of BancTrusts disclosure controls and procedures as of the end of the period covered by the report pursuant to the Exchange Act. Based upon that evaluation, the Chief Executive Officer and the Chief Financial Officer
concluded that BancTrusts disclosure controls and procedures are effective in ensuring that all material information required to be disclosed in this annual report has been accumulated and communicated to them in a manner appropriate to allow
timely decisions regarding required disclosure. During the quarter ended December 31, 2006, there have been no changes in BancTrusts internal control over financial reporting that have materially affected or are reasonably likely to
materially affect, BancTrusts internal control over financial reporting. Set forth below is Managements Report on Internal Control over Financial Reporting.

Managements Report on Internal Control over Financial Reporting

The management of The Peoples
BancTrust, Inc. and subsidiary is responsible for establishing and maintaining adequate internal control over financial reporting as defined in Rules 13a-15 and 15d-15. This internal control system has been designed to provide reasonable
assurance to BancTrusts management and board of directors regarding the reliability of financial reporting and the preparation and fair presentation of financial statements for external purposes in accordance with accounting principles
generally accepted in the United States of America.

All internal control systems, no matter how well designed, have inherent
limitations. Therefore, even those systems determined to be effective can provide only reasonable assurance with respect to financial statement preparation and presentation.



38



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The management of The Peoples BancTrust, Inc. and subsidiary has assessed the effectiveness of
BancTrusts internal control over financial reporting as of December 31, 2006. To make this assessment, we used the criteria for effective internal control over financial reporting described in Internal Control  Integrated
Framework, issued by the Committee of Sponsoring Organizations of the Treadway Commission (COSO). Based on our assessment and based on such criteria, we believe that, as of December 31, 2006, BancTrusts internal control over
financial reporting was effective.

Mauldin & Jenkins, LLC, the independent registered public accounting firm that audited the
consolidated financial statements of BancTrusts included in this Annual Report on Form 10-K, has issued a report on managements assessment of BancTrusts internal control over financial reporting as of December 31,
2006. The report, which expresses an unqualified opinion on managements assessment and on the effectiveness of BancTrusts internal control over financial reporting as of December 31, 2006, is included below in this Item under
the heading Report of the Independent Registered Public Accounting Firm.

REPORT OF INDEPENDENT REGISTERED PUBLIC ACCOUNTING FIRM

To the Board of Directors

The Peoples BancTrust
Company, Inc.

Selma, Alabama

We
have audited managements assessment, included in the accompanying Managements Report on Internal Control over Financial Reporting, that The Peoples BancTrust Company, Inc. and Subsidiary maintained effective internal control over
financial reporting as of December 31, 2006, based on criteria established in Internal ControlIntegrated Framework issued by the Committee of Sponsoring Organizations of the Treadway Commission (COSO). The Peoples BancTrust
Company, Inc. and Subsidiarys management is responsible for maintaining effective internal control over financial reporting and for its assessment of the effectiveness of internal control over financial reporting. Our responsibility is to
express an opinion on managements assessment and an opinion on the effectiveness of BancTrusts internal control over financial reporting based on our audit.

We conducted our audit in accordance with the standards of the Public Company Accounting Oversight Board (United States). Those standards require that we plan and perform the audit to obtain reasonable assurance about
whether effective internal control over financial reporting was maintained in all material respects. Our audit included obtaining an understanding of internal control over financial reporting, evaluating managements assessment, testing and
evaluating the design and operating effectiveness of internal control, and performing such other procedures as we considered necessary in the circumstances. We believe that our audit provides a reasonable basis for our opinion.

A companys internal control over financial reporting is a process designed to provide reasonable assurance regarding the reliability of financial
reporting and the preparation of financial statements for external purposes in accordance with generally accepted accounting principles. A companys internal control over financial reporting includes those policies and procedures that
(1) pertain to the maintenance of records that, in reasonable detail, accurately and fairly reflect the transactions and dispositions of the assets of BancTrusts; (2) provide reasonable assurance that transactions are recorded as
necessary to permit preparation of financial statements in accordance with generally accepted accounting principles, and that receipts and expenditures of BancTrusts are being made only in accordance with authorizations of management and
directors of BancTrusts; and (3) provide reasonable assurance regarding prevention or timely detection of unauthorized acquisition, use, or disposition of BancTrusts assets that could have a material effect on the financial
statements.

Because of its inherent limitations, internal control over financial reporting may not prevent or detect misstatements. Also,
projections of any evaluation of effectiveness to future periods are subject to the risk that controls may become inadequate because of changes in conditions, or that the degree of compliance with the policies or procedures may deteriorate.



39



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In our opinion, managements assessment that The Peoples BancTrust Company, Inc. and Subsidiary
maintained effective internal control over financial reporting as of December 31, 2006, is fairly stated, in all material respects, based on criteria established in Internal ControlIntegrated Framework issued by the Committee of
Sponsoring Organizations of the Treadway Commission (COSO). Also in our opinion, The Peoples BancTrust Company, Inc. and Subsidiary maintained, in all material respects, effective internal control over financial reporting as of December 31,
2006, based on criteria established in Internal ControlIntegrated Framework issued by the Committee of Sponsoring Organizations of the Treadway Commission (COSO).

We have also audited, in accordance with the standards of the Public Company Accounting Oversight Board (United States), the consolidated balance sheets
of The Peoples BancTrust Company, Inc. and Subsidiary as of December 31, 2006 and 2005 and the related consolidated statements of income, comprehensive income, changes in stockholders equity and cash flows for each of the three years in
the period ended December 31, 2006 and our report dated March 15, 2007 expressed an unqualified opinion.

/s/
Mauldin & Jenkins, LLC

Birmingham, Alabama

March 15, 2007

PART III



|ITEM 10. | DIRECTORS AND EXECUTIVE OFFICERS OF THE REGISTRANT
|-------- | --------------------------------------------------

Information regarding directors of BancTrust is omitted from this Report as BancTrust intends to file a definitive proxy statement not later than 120 days after December 31, 2006, and the information to be included therein is
incorporated herein by reference.

Information regarding the executive officers of BancTrust is included under separate caption in Part I
of this Form 10-K.

Item 405 of Regulation S-K disclosure is omitted from this Report as BancTrust will file a definitive proxy
statement dated not later than 120 days after December 31, 2006, and the Item 405 disclosure to be included therein is incorporated herein by reference.

BancTrust has adopted a code of ethics that applies to all directors and employees, including without exception, the principal executive officer, principal financial officer, principal accounting officer and/or
controller, or persons performing similar functions. The code of ethics is attached as Exhibit 14 to this Form 10-K. It is also posted on BancTrusts internet website, located at http://www.peoplesbt.com. Any waiver or substantive
amendments of the Code of Ethics applicable to BancTrusts directors and executive officers also will be disclosed on BancTrusts website.



|ITEM 11. | EXECUTIVE COMPENSATION
|-------- | ----------------------

Information regarding
executive compensation is omitted from this Report as BancTrust will file a definitive proxy statement dated not later than 120 days after December 31, 2006 and the information to be included therein is incorporated herein by reference.



|ITEM 12. | SECURITY OWNERSHIP OF CERTAIN BENEFICIAL OWNERS AND MANAGEMENT AND RELATED STOCKHOLDER MATTERS
|-------- | ----------------------------------------------------------------------------------------------

Information required by this Item is omitted from this Report as BancTrust will file a definitive proxy statement dated not later than 120 after
December 31, 2006, and the information to be included therein is incorporated herein by reference.



40



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|ITEM 13. | CERTAIN RELATIONSHIPS AND RELATED TRANSACTIONS
|-------- | ----------------------------------------------

Information required by this Item is omitted from this Report as BancTrust will file a definitive proxy statement dated not later than 120 days after December 31, 2006, and the information to be included therein is incorporated herein
by reference.



|ITEM 14. | PRINCIPAL ACCOUNTANT FEES AND SERVICES
|-------- | --------------------------------------

Information
required by this item is omitted from the Report as BancTrust will file a definitive proxy statement dated not later than 120 days after December 31, 2006, and the information to be included therein is incorporated herein by reference.



|ITEM 15. | EXHIBITS AND FINANCIAL STATEMENT SCHEDULES
|-------- | ------------------------------------------



| | (a)(1) | The following consolidated financial statements of BancTrust included herein (beginning on page F-1), are as follows.
| | ------ | ---------------------------------------------------------------------------------------------------------------------



|                                                                                                                          |  |    
|------------------------------------------------------------------------------------------------------------------------- |  | ---
|1.      
Report of Independent Registered Public Accounting Firm.                                                         |  | F-2
|2.      
Consolidated Balance Sheets - December 31, 2006 and 2005.                                                        |  | F-3
|3.      
Consolidated Statements of Income for the Years Ended December 31, 2006, 2005 and 2004.                          |  | F-4
|4.      
Consolidated Statements of Comprehensive Income for the Years Ended December 31, 2006, 2005 and 2004.            |  | F-5
|5.      
Consolidated Statements of Changes in Shareholders Equity for the Years Ended December 31, 2006, 2005 and 2004. |  | F-6
|6.      
Consolidated Statements of Cash Flows for the Years Ended December 31, 2006, 2005 and 2004.                      |  | F-7
|7.      
Notes to Consolidated Financial Statements.                                                                      |  | F-8



| | (a)(2) | All schedules for which provision is made in the applicable accounting regulations of the SEC are not required under the related instructions or are inapplicable and therefore have
been omitted.
| | ------ | --------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------



| | (a)(3) | The following exhibits either are filed as part of this Report or are incorporated herein by reference:
| | ------ | -------------------------------------------------------------------------------------------------------

Exhibit No. 3. Articles of Incorporation and Bylaws



| | (i) | Articles of Incorporation  incorporated herein by reference to Exhibit 3(i) to the Registrants Annual Report on Form 10-K for the year ended December 31, 1997.
| | --- | -----------------------------------------------------------------------------------------------------------------------------------------------------------------



| | (ii) | Bylaws  incorporated herein by reference to Exhibit 3(ii) to the Registrants Current Report on Form 8-K, dated September 19, 2006.
| | ---- | ------------------------------------------------------------------------------------------------------------------------------------

Exhibit No. 10.1. Stock Option Plans and Agreements



| | (i) | 1992 Stock Option Plan - Incorporated herein by reference to Exhibit 10 to the Registrants Annual Report on Form 10-K for the year ended December 31, 1992.
| | --- | ------------------------------------------------------------------------------------------------------------------------------------------------------------



| | (ii) | 1999 Stock Option Plan  Incorporated herein by reference to Exhibit 99.1 to the Registrants Registration Statement on Form S-8 (File No. 333-77109).
| | ---- | ------------------------------------------------------------------------------------------------------------------------------------------------------



41



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| | (iii) | Stock Option Agreement between the Registrant and Walter A. Parrent  Incorporated herein by reference to the Exhibit 10.3 to the Registrants Current Report on Form 8-K,
dated September 9, 2005.
| | ----- | ---------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------



| | (iv) | Stock Option Agreement between the Registrant and Don J. Giardina  Incorporated herein by reference to the Exhibit 10.2 to the Registrants Current Report on Form 8-K,
dated September 1, 2006.
| | ---- | -------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------

Exhibit No. 10.2. Executive Supplemental Retirement Plans



| | (i) | Agreement dated July 17, 2001, by and between The Peoples Bank and Trust Company and Richard P. Morthland  Incorporated herein by reference to Exhibit 10.2 to the
Registrants Annual Report on Form 10-K for the fiscal year ended December 31, 2001.
| | --- | --------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------



| | (ii) | Agreement dated July 17, 2001, by and between The Peoples Bank and Trust Company and Elam P. Holley, Jr. Incorporated herein by reference to Exhibit 10.2 to the
Registrants Annual Report on Form 10-K for the fiscal year ended December 31, 2001.
| | ---- | -----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------

Exhibit No. 10.3.
Agreement with Richard P. Morthland  Incorporated herein by reference to Exhibit 10.1 to the Registrants Current Report on Form 8-K, dated December 17, 2002.

Exhibit No. 10.4. Dividend Reinvestment and Stock Purchase Plan  Incorporated herein by reference to registration statement on Form S-3
(File No. 33-60935).

Exhibit No. 10.5. Key Employee Restricted Stock Plans



| | (i) | 2005 Key Employee Restricted Stock Plan  Incorporated herein by reference to Exhibit 10.1 to the Registrants Current Report on Form 8-K, dated September 9, 2005.
| | --- | -------------------------------------------------------------------------------------------------------------------------------------------------------------------



| | (ii) | Restricted Stock Agreement between the Registrant and Walter A. Parrent dated September 9, 2005  Incorporated herein by reference to Exhibit 10.2 to the Registrants
Current Report on Form 8-K dated September 9, 2005.
| | ---- | --------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------



| | (iii) | 2006 Key Employee Restricted Stock Plan  Incorporated herein by reference to Exhibit 10.2 to the Registrants Current Report on Form 8-K, dated August 16, 2006.
| | ----- | -----------------------------------------------------------------------------------------------------------------------------------------------------------------



| | (iv) | Restricted Stock Agreement between the Registrant and Don J. Giardina dated September 1, 2006  Incorporated herein by reference to Exhibit 10.2 to the Registrants
Current Report on Form 8-K dated September 1, 2006.
| | ---- | ------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------

Exhibit No. 10.6. Term Sheet for employment of Walter A.
Parrent Incorporated herein by reference to the Registrants Current Report on Form 8-K dated September 9, 2005.

Exhibit No. 10.7. Agreements by and between the Registrant and Endurance Capital Investors, L.P. and Endurance Capital Management Company, L.P.



| | (i) | Stock Purchase Agreement, dated April 6, 2005, with Endurance Capital Investors, L.P.  Incorporated herein by reference to Exhibit 10.1 to the Registrants Current
Report on Form 8-K dated April 6, 2005.
| | --- | ------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------



| | (ii) | Investor Rights Agreement, dated April 6, 2005, with Endurance Capital Investors, L.P.  Incorporated herein by reference to Exhibit 10.2 to the Registrants Current
Report on Form 8-K dated April 6, 2005.
| | ---- | -------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------



| | (iii) | Consulting Agreement, dated April 6, 2005, with Endurance Capital Management Company, L.P.  Incorporated herein by reference to Exhibit 10.3 to the Registrants
Current Report on Form 8-K dated April 6, 2005.
| | ----- | -----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------



| | (iv) | Acquisition Facility Agreement, dated April 6, 2005, with Endurance Capital Investors, L.P.  Incorporated herein by reference to Exhibit 10.4 to the Registrants
Current Report on Form 8-K, dated April 6, 2005.
| | ---- | -------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------

Exhibit No. 10.8. Agreement with Elam P. Holley, Jr. 
Incorporated herein by reference to Exhibit 10.1 to the Registrants Current Report on Form 8-K, dated August 16, 2006.

Exhibit
No. 10.9. Employment Agreement with Don J. Giardina  Incorporated herein by reference to Exhibit 10.1 to the Registrants Current Report on Form 8-K, dated September 7, 2007.



42



---

Exhibit No. 10.10. Change in Control Employment Agreements with Andrew C. Bearden, Jr., Gerald F.
Holley, Terry S. Pritchett and Jefferson G. Ratcliffe  Incorporated herein by reference to Exhibits 10.1, 10.2, 10.3 and 10.4, respectively, to the Registrants Current Report on Form 8-K, dated December 20, 2006.

Exhibit No. 10.11. Change in Control Employment Agreement with Thomas P. Wilbourne  Incorporated herein by reference to Exhibit 10.1 to the
Registrants Current Report on Form 8-K, dated January 16, 2007.

Exhibit No. 14. Code of Ethics  Incorporated
herein by reference to Exhibit 14 to the Registrants Annual Report on Form 10-K for the fiscal year ended December 31, 2003.

Exhibit No. 21. Subsidiaries  Incorporated herein by reference to Exhibit 14 to the Registrants Annual Report on Form 10-K for the fiscal year ended December 31, 2001.

Exhibit No. 23.1 Consent of Mauldin & Jenkins Certified Public Accountants, LLC.

Exhibit No. 31.1. Certification of Principal Executive Officer pursuant to Exchange Act Rule 12a  14(a) or 15d  14(a).

Exhibit No. 31.2. Certification of Principal Financial Officer pursuant to Exchange Act Rule 12a  14(a) or 15d  14(a).

Exhibit No. 32.1. Certification pursuant to 18 U.S.C. Section 1350, as adopted pursuant to Section 906 of the
Sarbanes  Oxley Act of 2002.



| | (b) | Exhibits to this Form 10-K are attached or incorporated by reference as stated above.
| | --- | -------------------------------------------------------------------------------------



| | (c) | None.
| | --- | -----



43



---

The Peoples BancTrust Company, Inc. and Subsidiary

Consolidated Financial Statements

As of December 31, 2006 and 2005 and

For Each of the Three Years Ended December 31, 2006, 2005 and 2004.



F-1



---

REPORT OF INDEPENDENT REGISTERED PUBLIC

ACCOUNTING FIRM

To the Board of Directors

The Peoples BancTrust Company, Inc.

Selma, Alabama

We have audited
the accompanying consolidated balance sheets of The Peoples BancTrust Company, Inc. and Subsidiary as of December 31, 2006 and 2005 and the related consolidated statements of income, comprehensive income, changes in stockholders
equity and cash flows for each of the three years in the period ended December 31, 2006. These financial statements are the responsibility of the Companys management. Our responsibility is to express an opinion on these financial
statements based on our audits.

We conducted our audits in accordance with the standards of the Public Company Accounting Oversight Board
(United States). Those standards require that we plan and perform the audit to obtain reasonable assurance about whether the financial statements are free of material misstatement. An audit includes examining, on a test basis, evidence supporting
the amounts and disclosures in the financial statements. An audit also includes assessing the accounting principles used and significant estimates made by management, as well as evaluating the overall financial statement presentation. We believe
that our audits provide a reasonable basis for our opinion.

In our opinion, the consolidated financial statements referred to above
present fairly, in all material respects, the financial position of The Peoples BancTrust Company, Inc. and Subsidiary as of December 31, 2006 and 2005 and the results of their operations and their cash flows for each of the three years in the
period ended December 31, 2006, in conformity with U.S. generally accepted accounting principles.

We also have audited, in accordance
with the standards of the Public Company Accounting Oversight Board (United States), the effectiveness of The Peoples BancTrust Company, Inc. and Subsidiarys internal control over financial reporting as of December 31, 2006, based on
criteria established in Internal ControlIntegrated Framework issued by the Committee of Sponsoring Organizations of the Treadway Commission (COSO) and our report dated March 15, 2007 expressed an unqualified opinion on
managements assessment of the effectiveness of The Peoples BancTrust Company, Inc. and Subsidiarys internal control over financial reporting and an unqualified opinion on the effectiveness of The Peoples BancTrust Company, Inc. and
Subsidiarys internal control over financial reporting.

/s/ Mauldin & Jenkins, LLC

Birmingham, Alabama

March 15, 2007



F-2



---

The Peoples BancTrust Company, Inc. and Subsidiary

Consolidated Balance Sheets

December 31, 2006 and 2005



|                                                 |  |      |             |   |      |   |             |  
|------------------------------------------------ |  | ---- | ----------- | - | ---- | - | ----------- | -
|                                                 |  | 2006 |             |   | 2005 |  
|Assets                                           |  |      |             |   |      |   |             |  
|Cash and due from banks                          |  | $    | 27,454,618  |   |      | $ | 34,584,685  |  
|Federal funds sold                               |  |      |            |   |      |   | 14,000,000  |  
|                                                 |  |      |             |   |      |   |             |  
|Cash and cash equivalents                        |  |      | 27,454,618  |   |      |   | 48,584,685  |  
|Available-for-sale securities                    |  |      | 204,601,608 |   |      |   | 226,043,483 |  
|Loans, net of unearned income                    |  |      | 631,799,504 |   |      |   | 495,509,202 |  
|Allowance for loan losses                        |  |      | (6,398,376  | ) |      |   | (6,654,460  | )
|                                                 |  |      |             |   |      |   |             |  
|Loans, net                                       |  |      | 625,401,127 |   |      |   | 488,854,742 |  
|Bank premises and equipment                      |  |      | 46,200,096  |   |      |   | 37,959,775  |  
|Less accumulated depreciation                    |  |      | (20,812,899 | ) |      |   | (19,014,170 | )
|                                                 |  |      |             |   |      |   |             |  
|Bank premises and equipment, net                 |  |      | 25,387,197  |   |      |   | 18,945,605  |  
|Other real estate, net                           |  |      | 1,033,826   |   |      |   | 2,746,220   |  
|Interest receivable                              |  |      | 4,947,193   |   |      |   | 3,921,347   |  
|Intangible assets acquired, net                  |  |      | 6,428,376   |   |      |   | 6,634,209   |  
|Deferred income taxes                            |  |      | 2,640,176   |   |      |   | 2,283,470   |  
|Other assets                                     |  |      | 12,810,578  |   |      |   | 13,759,137  |  
|                                                 |  |      |             |   |      |   |             |  
|Total assets                                     |  | $    | 910,704,699 |   |      | $ | 811,772,898 |  
|                                                 |  |      |             |   |      |   |             |  
|                                                 |  |     
|Liabilities and Stockholders Equity             |  |      |             |   |      |   |             |  
|Liabilities:                                     |  |      |             |   |      |   |             |  
|Deposits:                                        |  |      |             |   |      |   |             |  
|Demand-noninterest bearing                       |  | $    | 84,728,300  |   |      | $ | 85,538,199  |  
|Demand-interest bearing                          |  |      | 277,793,376 |   |      |   | 238,009,955 |  
|Savings                                          |  |      | 33,480,766  |   |      |   | 36,965,168  |  
|Time                                             |  |      | 372,698,660 |   |      |   | 327,536,059 |  
|                                                 |  |      |             |   |      |   |             |  
|Total deposits                                   |  |      | 768,701,101 |   |      |   | 688,049,381 |  
|Other borrowed funds                             |  |      | 48,267,635  |   |      |   | 37,732,458  |  
|Interest payable                                 |  |      | 3,467,965   |   |      |   | 2,176,197   |  
|Income taxes payable                             |  |      | 9,301       |   |      |   | 222,702     |  
|Other liabilities                                |  |      | 3,464,907   |   |      |   | 2,040,768   |  
|                                                 |  |      |             |   |      |   |             |  
|Total liabilities                                |  |      | 823,910,910 |   |      |   | 730,221,507 |  
|Stockholders equity:                            |  |      |             |   |      |   |             |  
|Common stock                                     |  |      | 591,759     |   |      |   | 589,532     |  
|Treasury stock                                   |  |      |            |   |      |   | (90,688     | )
|Additional paid-in capital                       |  |      | 17,199,913  |   |      |   | 16,586,341  |  
|Accumulated other comprehensive loss, net of tax |  |      | (4,149,908  | ) |      |   | (3,448,847  | )
|Deferred stock based compensation                |  |      | (102,053    | ) |      |   | (92,250     | )
|Retained earnings                                |  |      | 73,254,079  |   |      |   | 68,007,303  |  
|                                                 |  |      |             |   |      |   |             |  
|Total stockholders equity                       |  |      | 86,793,789  |   |      |   | 81,551,391  |  
|                                                 |  |      |             |   |      |   |             |  
|Total liabilities and stockholders equity       |  | $    | 910,704,699 |   |      | $ | 811,772,898 |  
|                                                 |  |      |             |   |      |   |             |  



F-3



---

The Peoples BancTrust Company, Inc. and Subsidiary

Consolidated Statements of Income

December 31, 2006, 2005 and 2004



|                                                             |  |      |            |   |      |   |            |      |  |   |            |  
|------------------------------------------------------------ |  | ---- | ---------- | - | ---- | - | ---------- | ---- |  | - | ---------- | -
|                                                             |  | 2006 |            |   | 2005 |   |            | 2004 | 
|Interest income:                                             |  |      |            |   |      |   |            |      |  |   |            |  
|Interest and fees on loans and bankers acceptances           |  | $    | 44,063,468 |   |      | $ | 32,140,992 |      |  | $ | 28,028,661 |  
|Interest and dividends on investment securities:             |  |      |            |   |      |   |            |      |  |   |            |  
|U.S. Government securities                                   |  |      | 4,282,968  |   |      |   | 4,382,875  |      |  |   | 4,325,817  |  
|Other securities and interest-bearing deposits               |  |      | 4,859,567  |   |      |   | 5,122,167  |      |  |   | 4,359,229  |  
|Interest on federal funds sold and resell agreements         |  |      | 55,699     |   |      |   | 377,741    |      |  |   | 155,507    |  
|                                                             |  |      |            |   |      |   |            |      |  |   |            |  
|Total interest income                                        |  |      | 53,261,703 |   |      |   | 42,023,775 |      |  |   | 36,869,214 |  
|                                                             |  |      |            |   |      |   |            |      |  |   |            |  
|Interest expense:                                            |  |      |            |   |      |   |            |      |  |   |            |  
|Interest on deposits                                         |  |      | 21,714,579 |   |      |   | 13,190,372 |      |  |   | 9,038,890  |  
|Interest on federal funds purchased and other borrowed funds |  |      | 2,259,984  |   |      |   | 2,226,049  |      |  |   | 2,336,630  |  
|                                                             |  |      |            |   |      |   |            |      |  |   |            |  
|Total interest expense                                       |  |      | 23,974,563 |   |      |   | 15,416,421 |      |  |   | 11,375,520 |  
|                                                             |  |      |            |   |      |   |            |      |  |   |            |  
|Net interest income                                          |  |      | 29,287,140 |   |      |   | 26,607,354 |      |  |   | 25,493,694 |  
|Provision (credit) for loan losses                           |  |      | 45,411     |   |      |   | (675,471   | )    |  |   | (149,164   | )
|                                                             |  |      |            |   |      |   |            |      |  |   |            |  
|Net interest income after provision (credit) for loan losses |  |      | 29,241,729 |   |      |   | 27,282,826 |      |  |   | 25,642,858 |  
|                                                             |  |      |            |   |      |   |            |      |  |   |            |  
|Noninterest income:                                          |  |      |            |   |      |   |            |      |  |   |            |  
|Trust department income                                      |  |      | 934,460    |   |      |   | 900,017    |      |  |   | 890,621    |  
|Service charges on deposit accounts                          |  |      | 5,700,016  |   |      |   | 5,336,868  |      |  |   | 4,749,168  |  
|Net securities (losses) gains                                |  |      | (18,420    | ) |      |   | 14,193     |      |  |   | 724,859    |  
|Other noninterest income                                     |  |      | 2,982,295  |   |      |   | 2,786,781  |      |  |   | 2,567,997  |  
|                                                             |  |      |            |   |      |   |            |      |  |   |            |  
|Total noninterest income                                     |  |      | 9,598,351  |   |      |   | 9,037,859  |      |  |   | 8,932,645  |  
|Noninterest expense:                                         |  |      |            |   |      |   |            |      |  |   |            |  
|Salaries and wages                                           |  |      | 11,781,609 |   |      |   | 12,371,562 |      |  |   | 11,838,559 |  
|Pensions and other employee benefits                         |  |      | 3,083,281  |   |      |   | 2,373,977  |      |  |   | 2,049,789  |  
|Occupancy and equipment expenses                             |  |      | 5,171,874  |   |      |   | 5,137,987  |      |  |   | 4,865,438  |  
|Other noninterest expenses                                   |  |      | 6,937,805  |   |      |   | 7,301,540  |      |  |   | 7,808,744  |  
|                                                             |  |      |            |   |      |   |            |      |  |   |            |  
|Total noninterest expense                                    |  |      | 26,974,569 |   |      |   | 27,185,066 |      |  |   | 26,562,530 |  
|                                                             |  |      |            |   |      |   |            |      |  |   |            |  
|Income before provision for income taxes                     |  |      | 11,865,511 |   |      |   | 9,135,619  |      |  |   | 8,012,973  |  
|Provision for income taxes                                   |  |      | 3,785,865  |   |      |   | 2,598,853  |      |  |   | 1,970,877  |  
|                                                             |  |      |            |   |      |   |            |      |  |   |            |  
|Net income                                                   |  | $    | 8,079,646  |   |      | $ | 6,536,766  |      |  | $ | 6,042,096  |  
|                                                             |  |      |            |   |      |   |            |      |  |   |            |  
|Earnings per share                                           |  |      |            |   |      |   |            |      |  |   |            |  
|Basic net income per share                                   |  | $    | 1.37       |   |      | $ | 1.13       |      |  | $ | 1.08       |  
|                                                             |  |      |            |   |      |   |            |      |  |   |            |  
|Diluted net income per share                                 |  | $    | 1.36       |   |      | $ | 1.12       |      |  | $ | 1.08       |  
|                                                             |  |      |            |   |      |   |            |      |  |   |            |  
|Basic weighted average number of shares outstanding          |  |      | 5,904,912  |   |      |   | 5,805,644  |      |  |   | 5,574,190  |  
|                                                             |  |      |            |   |      |   |            |      |  |   |            |  
|Diluted weighted average number of shares outstanding        |  |      | 5,953,762  |   |      |   | 5,832,284  |      |  |   | 5,593,040  |  
|                                                             |  |      |            |   |      |   |            |      |  |   |            |  



F-4



---

The Peoples BancTrust Company, Inc. and Subsidiary

Consolidated Statements of Comprehensive Income

Years Ended December 31, 2006, 2005 and 2004



|                                                                                |  |      |            |   |      |   |            |      |  |   |            |  
|------------------------------------------------------------------------------- |  | ---- | ---------- | - | ---- | - | ---------- | ---- |  | - | ---------- | -
|                                                                                |  | 2006 |            |   | 2005 |   |            | 2004 | 
|Net income                                                                      |  | $    | 8,079,646  |   |      | $ | 6,536,766  |      |  | $ | 6,042,096  |  
|Other comprehensive income (loss):                                              |  |      |            |   |      |   |            |      |  |   |            |  
|Unrealized gains (losses) on securities available for sale during the period    |  |      | 1,340,208  |   |      |   | (3,949,943 | )    |  |   | (1,796,244 | )
|Market valuation impact of interest rate floor contract                         |  |      | (205,554   | ) |      |   |           |      |  |   |           |  
|Defined benefit pension plan adjustment impact of SFAS 158                      |  |      | (2,264,104 | ) |      |   |           |      |  |   |           |  
|Less: reclassification adjustment for net (losses) gains included in net income |  |      | (18,420    | ) |      |   | 14,193     |      |  |   | 724,859    |  
|                                                                                |  |      |            |   |      |   |            |      |  |   |            |  
|Other comprehensive loss                                                        |  |      | (1,111,031 | ) |      |   | (3,964,135 | )    |  |   | (2,521,103 | )
|Income tax benefit related to items of other comprehensive loss                 |  |      | 409,969    |   |      |   | 1,462,765  |      |  |   | 930,287    |  
|                                                                                |  |      |            |   |      |   |            |      |  |   |            |  
|Other comprehensive loss, net of tax                                            |  |      | (701,061   | ) |      |   | (2,501,370 | )    |  |   | (1,590,816 | )
|                                                                                |  |      |            |   |      |   |            |      |  |   |            |  
|Comprehensive income, net of tax                                                |  | $    | 7,378,584  |   |      | $ | 4,035,396  |      |  | $ | 4,451,280  |  
|                                                                                |  |      |            |   |      |   |            |      |  |   |            |  



F-5



---

The Peoples BancTrust Company, Inc and Subsidiary

Consolidated Statements of Changes in Stockholders Equity

Years Ended December 31, 2006, 2005 and 2004



|                                                                                                                                                                                                                |  |              |         |   |                |   |         |                          |  |                                                      |            |  |                                 |            |   |                  |   |          |       |  |   |            |   |  |   |            |  
|--------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------- |  | ------------ | ------- | - | -------------- | - | ------- | ------------------------ |  | ---------------------------------------------------- | ---------- |  | ------------------------------- | ---------- | - | ---------------- | - | -------- | ----- |  | - | ---------- | - |  | - | ---------- | -
|                                                                                                                                                                                                                |  | Common Stock |         |   | Treasury Stock |   |         | AdditionalPaid-InCapital |  | AccumulatedOtherComprehensiveIncome (Loss)net of Tax |            |  | Deferred StockBasedCompensation |            |   | RetainedEarnings |   |          | Total | 
|Balance December 31, 2003                                                                                                                                                                                       |  | $            | 556,478 |   |                | $ |        |                          |  | $                                                    | 11,144,938 |  | $                               | 643,339    |   |                  | $ |         |       |  | $ | 60,434,189 |   |  | $ | 72,778,944 |  
|                                                                                                                                                                                                                |  |              |         |   |                |   |         |                          |  |                                                      |            |  |                                 |            |   |                  |   |          |       |  |   |            |   |  |   |            |  
|Net income                                                                                                                                                                                                      |  |              |         |   |                |   |         |                          |  |                                                      |            |  |                                 |            |   |                  |   |          |       |  |   | 6,042,096  |   |  |   | 6,042,096  |  
|Cash dividends declared ($.44 per share)                                                                                                                                                                        |  |              |         |   |                |   |         |                          |  |                                                      |            |  |                                 |            |   |                  |   |          |       |  |   | (2,451,075 | ) |  |   | (2,451,075 | )
|Common stock issued (24,184 shares)                                                                                                                                                                             |  |              | 2,418   |   |                |   |         |                          |  |                                                      |            |  |                                 |            |   |                  |   |          |       |  |   |            |   |  |   | 2,418      |  
|Common stock retired (4,416 shares)                                                                                                                                                                             |  |              | (441    | ) |                |   |         |                          |  |                                                      |            |  |                                 |            |   |                  |   |          |       |  |   |            |   |  |   | (441       | )
|Net impact of common stock tendered for common stock options exercised and common stock purchased through the dividend reinvestment
plan                                                                        |  |              |         |   |                |   |         |                          |  |                                                      | 261,363    |  |                                 |            |   |                  |   |          |       |  |   |            |   |  |   | 261,363    |  
|Change in accumulated other comprehensive income, net of tax                                                                                                                                                    |  |              |         |   |                |   |         |                          |  |                                                      |            |  |                                 | (1,590,816 | ) |                  |   |          |       |  |   |            |   |  |   | (1,590,816 | )
|                                                                                                                                                                                                                |  |              |         |   |                |   |         |                          |  |                                                      |            |  |                                 |            |   |                  |   |          |       |  |   |            |   |  |   |            |  
|Balance December 31, 2004                                                                                                                                                                                       |  | $            | 558,456 |   |                | $ |        |                          |  | $                                                    | 11,406,301 |  | $                               | (947,477   | ) |                  | $ |         |       |  | $ | 64,025,210 |   |  | $ | 75,042,490 |  
|                                                                                                                                                                                                                |  |              |         |   |                |   |         |                          |  |                                                      |            |  |                                 |            |   |                  |   |          |       |  |   |            |   |  |   |            |  
|Net income                                                                                                                                                                                                      |  |              |         |   |                |   |         |                          |  |                                                      |            |  |                                 |            |   |                  |   |          |       |  |   | 6,536,766  |   |  |   | 6,536,766  |  
|Cash dividends declared ($.44 per share)                                                                                                                                                                        |  |              |         |   |                |   |         |                          |  |                                                      |            |  |                                 |            |   |                  |   |          |       |  |   | (2,554,674 | ) |  |   | (2,554,674 | )
|Common stock issued(313,986 shares)                                                                                                                                                                             |  |              | 31,398  |   |                |   |         |                          |  |                                                      |            |  |                                 |            |   |                  |   |          |       |  |   |            |   |  |   | 31,398     |  
|Common stock retired (3,217 shares)                                                                                                                                                                             |  |              | (322    | ) |                |   |         |                          |  |                                                      |            |  |                                 |            |   |                  |   |          |       |  |   |            |   |  |   | (322       | )
|Treasury stock purchased (5,700 shares)                                                                                                                                                                         |  |              |         |   |                |   | (90,688 | )                        |  |                                                      |            |  |                                 |            |   |                  |   |          |       |  |   |            |   |  |   | (90,688    | )
|Net impact of common stock sold, common stock tendered for common stock options exercised and common stock purchased through the dividend
reinvestment plan                                                     |  |              |         |   |                |   |         |                          |  |                                                      | 5,180,040  |  |                                 |            |   |                  |   |          |       |  |   |            |   |  |   | 5,180,040  |  
|Net impact of restricted common stock issued (6,000 shares)                                                                                                                                                     |  |              |         |   |                |   |         |                          |  |                                                      |            |  |                                 |            |   |                  |   | (92,250  | )     |  |   |            |   |  |   | (92,250    | )
|Change in accumulated other comprehensive income, net of tax                                                                                                                                                    |  |              |         |   |                |   |         |                          |  |                                                      |            |  |                                 | (2,501,370 | ) |                  |   |          |       |  |   |            |   |  |   | (2,501,370 | )
|                                                                                                                                                                                                                |  |              |         |   |                |   |         |                          |  |                                                      |            |  |                                 |            |   |                  |   |          |       |  |   |            |   |  |   |            |  
|Balance December 31, 2005                                                                                                                                                                                       |  | $            | 589,532 |   |                | $ | (90,688 | )                        |  | $                                                    | 16,586,341 |  | $                               | (3,448,847 | ) |                  | $ | (92,250  | )     |  | $ | 68,007,303 |   |  | $ | 81,551,391 |  
|                                                                                                                                                                                                                |  |              |         |   |                |   |         |                          |  |                                                      |            |  |                                 |            |   |                  |   |          |       |  |   |            |   |  |   |            |  
|Net income                                                                                                                                                                                                      |  |              |         |   |                |   |         |                          |  |                                                      |            |  |                                 |            |   |                  |   |          |       |  |   | 8,079,646  |   |  |   | 8,079,646  |  
|Cash dividends declared ($.48 per share)                                                                                                                                                                        |  |              |         |   |                |   |         |                          |  |                                                      |            |  |                                 |            |   |                  |   |          |       |  |   | (2,832,871 | ) |  |   | (2,832,871 | )
|Common stock issued(32,601 shares)                                                                                                                                                                              |  |              | 3,260   |   |                |   |         |                          |  |                                                      |            |  |                                 |            |   |                  |   |          |       |  |   |            |   |  |   | 3,260      |  
|Common stock retired (10,325 shares)                                                                                                                                                                            |  |              | (1,033  | ) |                |   |         |                          |  |                                                      |            |  |                                 |            |   |                  |   |          |       |  |   |            |   |  |   | (1,033     | )
|Treasury stock retired (5,700 shares)                                                                                                                                                                           |  |              |         |   |                |   | 90,688  |                          |  |                                                      |            |  |                                 |            |   |                  |   |          |       |  |   |            |   |  |   | 90,688     |  
|Net impact of common stock tendered for common stock options exercised, common stock purchased through the dividend reinvestment plan, common
stock retired and expense recognition of stock based compensation |  |              |         |   |                |   |         |                          |  |                                                      | 613,572    |  |                                 |            |   |                  |   |          |       |  |   |            |   |  |   | 613,572    |  
|Change in accumulated other comprehensive income, net of tax                                                                                                                                                    |  |              |         |   |                |   |         |                          |  |                                                      |            |  |                                 | (701,061   | ) |                  |   |          |       |  |   |            |   |  |   | (701,061   | )
|Net impact of previously issued restricted common stock vested (6,000 shares) and restricted common stock issued (6,000
shares)                                                                                 |  |              |         |   |                |   |         |                          |  |                                                      |            |  |                                 |            |   |                  |   | (9,803   | )     |  |   |            |   |  |   | (9,803     | )
|                                                                                                                                                                                                                |  |              |         |   |                |   |         |                          |  |                                                      |            |  |                                 |            |   |                  |   |          |       |  |   |            |   |  |   |            |  
|Balance December 31, 2006                                                                                                                                                                                       |  | $            | 591,759 |   |                | $ |        |                          |  | $                                                    | 17,199,913 |  | $                               | (4,149,908 | ) |                  | $ | (102,053 | )     |  | $ | 73,254,078 |   |  | $ | 86,793,789 |  
|                                                                                                                                                                                                                |  |              |         |   |                |   |         |                          |  |                                                      |            |  |                                 |            |   |                  |   |          |       |  |   |            |   |  |   |            |  



F-6



---

The Peoples BancTrust Company, Inc and Subsidiary

Consolidated Statements of Cash Flows

December 31, 2006, 2005 and 2004



|                                                                             |  |      |              |   |      |   |             |      |  |   |              |  
|---------------------------------------------------------------------------- |  | ---- | ------------ | - | ---- | - | ----------- | ---- |  | - | ------------ | -
|                                                                             |  | 2006 |              |   | 2005 |   |             | 2004 | 
|Cash flows from operating activities                                         |  |      |              |   |      |   |             |      |  |   |              |  
|Net income                                                                   |  | $    | 8,079,646    |   |      | $ | 6,536,766   |      |  | $ | 6,042,096    |  
|Adjustments to reconcile net income to cash provided by operating activities |  |      |              |   |      |   |             |      |  |   |              |  
|(Credit) provision for loan losses                                           |  |      | 45,411       |   |      |   | (675,471    | )    |  |   | (149,164     | )
|Depreciation, amortization and accretion                                     |  |      | 2,313,547    |   |      |   | 2,639,707   |      |  |   | 2,638,544    |  
|Increase in unearned discount                                                |  |      | 8,104,017    |   |      |   | 148,715     |      |  |   | 39,634       |  
|Deferred income taxes, net                                                   |  |      | 53,263       |   |      |   | 1,249,128   |      |  |   | 1,095,364    |  
|Stock based compensation                                                     |  |      | 345,315      |   |      |   |            |      |  |   |             |  
|(Gain) loss on sales of OREO                                                 |  |      | (228,769     | ) |      |   | (6,139      | )    |  |   | 225,250      |  
|Loss (gain) on sales of securities                                           |  |      | 18,420       |   |      |   | (14,193     | )    |  |   | (724,859     | )
|Write down of other real estate and equipment                                |  |      | 131,999      |   |      |   | 248,988     |      |  |   | 36,475       |  
|Decrease (increase) in assets                                                |  |      |              |   |      |   |             |      |  |   |              |  
|Interest receivable                                                          |  |      | (1,025,846   | ) |      |   | (623,051    | )    |  |   | 163,301      |  
|Income taxes receivable                                                      |  |      |             |   |      |   | 1,263,011   |      |  |   | (1,177,632   | )
|Other assets                                                                 |  |      | (326,167     | ) |      |   | 1,087,987   |      |  |   | (995,421     | )
|(Decrease) increase in other liabilities                                     |  |      |              |   |      |   |             |      |  |   |              |  
|Interest payable                                                             |  |      | 1,291,768    |   |      |   | 794,928     |      |  |   | (132,900     | )
|Minimum required contributions to defined benefits pension plan              |  |      |             |   |      |   | (336,208    | )    |  |   | (1,008,624   | )
|Income taxes payable                                                         |  |      | (213,401     | ) |      |   | 222,702     |      |  |   | (830,661     | )
|Other liabilities                                                            |  |      | 594,033      |   |      |   | 181,398     |      |  |   | (2,438,104   | )
|                                                                             |  |      |              |   |      |   |             |      |  |   |              |  
|Net cash provided by operating activities                                    |  |      | 19,183,236   |   |      |   | 12,718,268  |      |  |   | 2,783,299    |  
|Cash flows from investing activities                                         |  |      |              |   |      |   |             |      |  |   |              |  
|Proceeds from sales of available for sale securities                         |  |      | 4,522,095    |   |      |   | 2,757,252   |      |  |   | 84,010,036   |  
|Proceeds from maturities and calls of available for sale securities          |  |      | 35,589,277   |   |      |   | 28,223,125  |      |  |   | 73,210,590   |  
|Purchases of available for sale securities                                   |  |      | (17,408,468  | ) |      |   | (7,509,252  | )    |  |   | (187,985,554 | )
|Purchase of derivative instrument                                            |  |      | (445,000     | ) |      |   |            |      |  |   |             |  
|Net (increase) decrease in loans                                             |  |      | (144,721,390 | ) |      |   | (60,889,106 | )    |  |   | 23,615,040   |  
|Excess contributions to defined benefit pension plan                         |  |      |             |   |      |   | (2,000,000  | )    |  |   | (2,000,000   | )
|Purchases of bank premises and equipment                                     |  |      | (8,508,722   | ) |      |   | (3,519,116  | )    |  |   | (3,646,794   | )
|Proceeds from sales of other real estate and equipment                       |  |      | 1,953,511    |   |      |   | 1,337,111   |      |  |   | 2,404,572    |  
|                                                                             |  |      |              |   |      |   |             |      |  |   |              |  
|Net cash used in investing activities                                        |  |      | (129,018,697 | ) |      |   | (41,599,986 | )    |  |   | (10,392,110  | )
|Cash flows from financing activities                                         |  |      |              |   |      |   |             |      |  |   |              |  
|Net increase in deposits                                                     |  |      | 80,651,720   |   |      |   | 22,396,402  |      |  |   | 21,896,267   |  
|Increase (decrease) in borrowings                                            |  |      | 10,535,177   |   |      |   | (10,580,113 | )    |  |   | (8,377,925   | )
|Proceeds from issuance of common stock                                       |  |      | 140,883      |   |      |   | 4,919,467   |      |  |   | 37,661       |  
|Dividends paid                                                               |  |      | (2,622,385   | ) |      |   | (2,355,290  | )    |  |   | (2,251,762   | )
|Purchase of treasury stock                                                   |  |      |             |   |      |   | (90,688     | )    |  |   |             |  
|                                                                             |  |      |              |   |      |   |             |      |  |   |              |  
|Net cash provided by financing activities                                    |  |      | 88,705,395   |   |      |   | 14,289,778  |      |  |   | 11,304,241   |  
|(Decrease) increase in cash and cash equivalents                             |  |      | (21,130,066  | ) |      |   | (14,591,940 | )    |  |   | 3,695,430    |  
|Cash and cash equivalents                                                    |  |      |              |   |      |   |             |      |  |   |              |  
|Beginning of period                                                          |  |      | 48,584,684   |   |      |   | 63,176,624  |      |  |   | 59,481,194   |  
|                                                                             |  |      |              |   |      |   |             |      |  |   |              |  
|End of period                                                                |  | $    | 27,454,618   |   |      | $ | 48,584,684  |      |  | $ | 63,176,624   |  
|                                                                             |  |      |              |   |      |   |             |      |  |   |              |  
|Supplemental disclosure of cash flow information                             |  |      |              |   |      |   |             |      |  |   |              |  
|Cash paid during the period for                                              |  |      |              |   |      |   |             |      |  |   |              |  
|Interest                                                                     |  | $    | 22,682,795   |   |      | $ | 14,621,492  |      |  | $ | 11,508,420   |  
|                                                                             |  |      |              |   |      |   |             |      |  |   |              |  
|Income taxes                                                                 |  | $    | 3,930,363    |   |      | $ | (135,988    | )    |  | $ | 1,519,000    |  
|                                                                             |  |      |              |   |      |   |             |      |  |   |              |  
|Non-cash investing activities                                                |  |      |              |   |      |   |             |      |  |   |              |  
|Transfer of loans to other real estate                                       |  | $    | 302,576      |   |      | $ | 1,536,909   |      |  | $ | 2,293,004    |  
|                                                                             |  |      |              |   |      |   |             |      |  |   |              |  
|Transfer of premises to other real estate                                    |  | $    |             |   |      | $ | 600,837     |      |  | $ |             |  
|                                                                             |  |      |              |   |      |   |             |      |  |   |              |  



F-7



---

The Peoples BancTrust Company, Inc and Subsidiary

Notes to Consolidated Financial Statements

December 31, 2006, 2005 and 2004



|1. | Significant Accounting Policies
|-- | -------------------------------

Basis of
Consolidation

The consolidated financial statements included herein are those of The Peoples BancTrust Company, Inc. (the Company) and
its wholly owned subsidiary, The Peoples Bank and Trust Company (the Bank). The Company operates primarily in the retail banking industry. The consolidated financial statements include the accounts of the Company and its subsidiaries. Significant
intercompany transactions and balances have been eliminated in consolidation.

Nature of Operations

The Company operates as a single-segment retail banking enterprise with twenty-three offices in rural and suburban communities in central Alabama. The
Companys primary source of revenue is providing loans to customers, who are predominately small and middle-market businesses and middle-income individuals.

Use of Estimates in the Preparation of Financial Statements

The preparation of financial statements
in conformity with generally accepted accounting principles requires management to make estimates and assumptions that affect the reported amounts of assets and liabilities and disclosure of contingent assets and liabilities at the date of the
financial statements and the reported amounts of revenues and expenses during the reporting period. Actual results could differ from those estimates.

Securities

Securities are classified as either held-to-maturity, trading, or available-for-sale
securities.

Securities held-to-maturity are securities for which management has the ability and intent to hold on a long-term basis or
until maturity. These securities are carried at amortized cost, adjusted for amortization of premiums and accretion of discounts to the earlier of the maturity or call date.

Securities available-for-sale represent those securities intended to be held for an indefinite period of time, including securities that management
intends to use as part of its asset/liability strategy, or that may be sold in response to changes in interest rates, changes in prepayment risk, the need to increase regulatory capital or other similar factors. Securities available-for-sale are
recorded at market value with unrealized gains and losses, net of any tax effect, added or deducted directly from stockholders equity.

Securities carried in trading accounts are carried at market value with unrealized gains and losses reflected in income.

At
December 31, 2006 and 2005, all of the Companys securities were classified as available-for-sale as part of an asset and liability strategy to maximize the flexibility of its investment portfolio.

Realized and unrealized gains and losses are based on the specific identification method.



F-8



---

The Peoples BancTrust Company, Inc and Subsidiary

Notes to Consolidated Financial Statements

December 31, 2006, 2005
and 2004



Loans

Loans are stated at face value, net of unearned discount and the allowance for loan losses. Unearned discounts on installment loans are recognized as income over the terms of the loans by the interest method. Interest
on other loans is credited to operations based on the principal amount outstanding. Nonrefundable fees and costs associated with originating or acquiring loans are recognized by the interest method as a yield adjustment over the life of the
corresponding loan.

Allowance for Loan Losses

The allowance for loan losses is established through charges or credits to earnings in the form of a provision (credit) for loan losses. Increases and decreases in the allowance due to changes in the measurement of
the impaired loans are included in the provision for loan losses. Loans continue to be classified as impaired unless they are brought fully current and the collection of scheduled interest and principal is considered probable. When a loan or portion
of a loan is determined to be uncollectible, the portion deemed uncollectible is charged against the allowance and subsequent recoveries, if any, are credited to the allowance.

Managements periodic evaluation of the adequacy of the allowance also considers unimpaired loans and takes into consideration the Banks loan
loss experience for pools of homogeneous loans, known and inherent risks in the portfolio, adverse situations that may affect the borrowers ability to repay and current economic conditions. While management believes that it has established the
allowance in accordance with generally accepted accounting principles and has taken into account the views of its regulators and the current economic environment, there can be no assurance that in the future the Banks regulators or its
economic environment will not require further increases in the allowance.

A loan is considered impaired, based on current information and
events, if it is probable that the Company will be unable to collect the scheduled payments of principal or interest when due according to the contractual terms of the loan agreement. Uncollateralized loans are measured for impairment based on the
present value of expected future cash flows discounted at the historical effective interest rate, while all collateral-dependent loans are measured for impairment based on the fair value of the collateral.

The Company uses several factors in determining if a loan is impaired. Internal asset classification procedures include a thorough review of significant
loans and lending relationships and include the accumulation of related data. This data includes loan payment status, borrowers financial data, and borrowers operating factors such as cash flows and operating income or loss.

At December 31, 2006 and 2005, the recorded investment in loans for which impairment has been recognized totaled approximately $6,761,000 and
$7,487,000, respectively. These loans had a corresponding valuation allowance of approximately $338,000 at December 31, 2006 and $786,000 at December 31, 2005. The impaired loans were measured for impairment using the fair value of the
collateral, as substantially all of these loans were collateral dependent. The average recorded investment in impaired loans during 2006, 2005 and 2004 was approximately $5,826,279, $7,137,000 and $10,144,000, respectively. The Company recognized
approximately $462,000, $594,000 and $793,000 of interest on impaired loans during 2006, 2005 and 2004, respectively.



F-9



---

The Peoples BancTrust Company, Inc and Subsidiary

Notes to Consolidated Financial Statements

December 31, 2006, 2005
and 2004



Income Recognition on Impaired and Nonaccrual Loans

Loans, including impaired loans, are generally classified as nonaccrual if they are past due as to maturity or payment of principal or interest for a
period of more than 90 days, unless such loans are well collateralized and in the process of collection. If a loan or a portion of a loan is partially charged off, the loan is generally classified as nonaccrual. At the discretion of management,
loans that are on a current payment status or past due less than 90 days may also be classified as nonaccrual if repayment in full of principal and/or interest is in doubt.

Loans may be returned to accrual status when all principal and interest amounts contractually due (including arrearages) are reasonably assured of
repayment within an acceptable period of time, and there is a sustained period of repayment performance (generally a minimum of six months) by the borrower, in accordance with the contractual terms of interest and principal.

While a loan is classified as nonaccrual and the future collectibility of the recorded loan balance is doubtful, collections of interest and principal are
generally applied as a reduction to principal outstanding, except in the case of loans with scheduled amortizations where the payment is generally applied to the oldest payment due. When the future collection of the recorded loan balance is
expected, interest income may be recognized on a cash basis. In the case where a nonaccrual loan has been partially charged off, recognition of interest on a cash basis is limited to that which would have been recognized on the recorded loan balance
at the contractual interest rate. Receipts in excess of that amount are recorded as recoveries to the allowance for loan losses until prior charge-offs have been fully recovered.

Bank Premises and Equipment

Office
equipment, vehicles, and buildings are stated at cost less accumulated depreciation computed on the straight-line, declining-balance and other accelerated methods over the estimated useful lives of the assets. Gains or losses on disposition are
recorded in other operating income on the date of disposition, based upon the difference between the net proceeds and the adjusted carrying value of the assets sold or retired. Maintenance and repairs are charged to expense as incurred, while
renewals and betterments are capitalized. Estimated useful lives range from seven to forty years for buildings and improvements and three to five years for furniture and equipment.

Other Real Estate

Other real estate
is stated at the lower of the appraised value, less estimated costs to sell the property, or outstanding loan balance at the time of foreclosure. Any subsequent write-downs are charged against operating expenses. Operating expenses of such
properties, net of related income are included in other expenses.



F-10



---

The Peoples BancTrust Company, Inc and Subsidiary

Notes to Consolidated Financial Statements

December 31, 2006, 2005
and 2004



Goodwill and Other Intangible Assets

Goodwill represents the excess of the cost of an acquisition over the fair value of the net assets acquired. Other intangible assets represent purchased
assets that also lack physical substance but can be distinguished from goodwill because of contractual or other legal rights or because the asset is capable of being sold or exchanged either on its own or in combination with a related contract,
asset, or liability. On January 1, 2003, the Company adopted Statement of Financial Accounting Standards (SFAS) 142, Goodwill and Other Intangible Assets. Under the provisions of SFAS No. 142, goodwill and other intangible assets
with indefinite useful lives will no longer be amortized, but instead are tested for impairment as of the date of adoption and at least annually. Intangible assets that have finite lives continue to be amortized over their estimated useful lives and
also continue to be subject to impairment testing. All of the Companys other intangible assets have finite lives and are amortized on an accelerated basis over a period of no more than ten years. Prior to the adoption of SFAS 142, the
Companys goodwill was amortized over a period of 25 years using the straight-line method. Note 7 includes a summary of the Companys goodwill and other intangible assets as well as further detail about the impact of the adoption of SFAS
142.

Defined Benefit Pension Plan

In September 2006, the Financial Accounting Standards Board issued Statement No. 158, Employers Accounting for Defined Benefit Pension and Other Postretirement Plans - An Amendment of FASB Statements
No. 87, 88, 106, and 132(R). This Statement improves financial reporting by requiring an employer to recognize the overfunded or underfunded status of a defined benefit postretirement plan (other than a multiemployer plan) as an asset or
liability in its statement of financial position and to recognize changes in that funded status in the year in which the changes occur through comprehensive income of a business entity. This Statement also improves financial reporting by requiring
an employer to measure the funded status of a plan as of the date of its year-end statement of financial position, with limited exceptions.

This Statement requires the Company to:

Recognize the funded status of its defined benefit pension plan  measured as the
difference between plan assets at fair value (with limited exceptions) and the benefit obligation  in its statement of financial position. For a pension plan, the benefit obligation is the projected benefit obligation.

Recognize as a component of other comprehensive income, net of tax, the gains or losses and prior service costs or credits that arise during the period
but are not recognized as components of net periodic benefit cost pursuant to FASB Statement No. 87, Employers Accounting for Pensions, or No. 106, Employers Accounting for Postretirement Benefits Other Than
Pensions. Amounts recognized in accumulated other comprehensive income, including the gains or losses, prior service costs or credits, and the transition asset or obligation remaining from the initial application of Statements 87 and 106, if
any, are adjusted as they are subsequently recognized as components of net periodic benefit cost pursuant to the recognition and amortization provisions of those Statements.

Measure defined benefit plan assets and obligations as of the date of the employers fiscal year-end statement of financial position (with limited
exceptions).

Disclose in the notes to financial statements additional information about certain effects on net periodic benefit cost for
the next fiscal year that arise from delayed recognition of the gains or losses, prior service costs or credits, and transition asset or obligations.

This Statement amends Statement 87, FASB Statement No. 88, Employers Accounting for Settlements and Curtailments of Defined Benefit Pension Plans and for Termination Benefits, Statement 106, and



F-11



---

The Peoples BancTrust Company, Inc and Subsidiary

Notes to Consolidated Financial Statements

December 31, 2006, 2005
and 2004



FASB Statement No. 132 (revised 2003), Employers Disclosures about Pensions and Other Postretirement Benefits, and other related accounting
literature. Upon adoption of this Statement and subsequently, the Company will continue to apply the provisions in Statements 87, 88, and 106 in measuring plan assets and benefit obligations as of the date of its balance sheets and in determining
the amount of net periodic benefit cost.

The Company adopted the provisions of this standard for its fiscal year ended December 31,
2006. The Company has recognized the funded status of its defined benefit pension plan and provided the required disclosures in Note 12. Upon adoption, the Company charged other comprehensive income, net of tax, $1,428,650 related to actuarial net
gains or losses and prior service costs or credits that arose during the period but not recognized as components of net periodic benefit cost.

Income Taxes

Deferred tax assets and liabilities are reflected at currently enacted income tax rates applicable to the
period in which the deferred tax assets or liabilities are expected to be realized or settled. As changes in tax laws or rates are enacted, deferred tax assets and liabilities are adjusted through the provision for income taxes.

Earnings Per Share

Basic earnings
per share are computed by dividing net income by the weighted-average number of shares of common stock outstanding during the year. Diluted earnings per share are computed by dividing net income by the sum of the weighted-average number of shares of
common stock outstanding and dilutive potential common shares. Potential common shares consist of stock options, and are determined using the treasury stock method.

Stock-Based Compensation

At December 31, 2006, the Company had one stock-based employee
compensation plan from which all stock based compensation awards were granted after January of 2000, which is described more fully in Note 20. Stock based compensation awards granted prior to and including January of 2000, were issued under a
separate plan. Prior to January 1, 2006, the Company accounted for stock based employee compensation under the recognition and measurement provisions of APB Opinion NO. 25, Accounting for Stock Issued to Employees, and related
Interpretations, as permitted by FASB Statement No. 123, Accounting for Stock-Based Compensation. No stock-based employee compensation cost was recognized in the statements of income for the years ended December 31, 2005 and 2004,
as all options granted under the plan had an exercise price equal to the fair market value of the underlying common stock on the date of grant. Effective January 1, 2006, the Company adopted the fair value recognition provisions of FASB
Statement No. 123(R), Share-Based Payment, using the modified-prospective-transition method. Under the modified prospective approach, SFAS 123R applies to new awards and to awards that were outstanding on January 1, 2006 that are
subsequently modified, repurchased or cancelled. Under the modified prospective approach, compensation cost recognized during 2006 includes compensation cost for all share-based payments granted prior to, but not yet vested as of January 1,
2006, based on the grant-date fair value estimated in accordance with the original provisions of SFAS 123, and compensation cost for all share-based payments granted subsequent to January 1, 2006, based on the grant-date fair value estimated in
accordance with the provisions of SFAS 123R. Prior periods were not restated to reflect the impact of adopting the new standard.



F-12



---

The Peoples BancTrust Company, Inc and Subsidiary

Notes to Consolidated Financial Statements

December 31, 2006, 2005
and 2004



As a result of adopting Statement 123(R) on January 1, 2006, the both Companys income
before income taxes and net income for the year ended December 31, 2006, are $345,315 and $258,155 lower than if it had continued to account for share-based compensation under Opinion 25. Basic and diluted earnings per share for the year ended
December 31, 2006 would have been $1.41 and $1.40, respectively, if the Company had not adopted Statement 123(R), compared to reported basic and diluted earnings per share of $1.37 and $1.36, respectively. The table below illustrates the impact
that the adoption of Statement 123(R) would have had on net income, basic earnings per share and diluted earnings per share in 2005 and 2004, had it been applicable to those periods.



|                                                                                                                     |  |      |           |      |   |           |  
|-------------------------------------------------------------------------------------------------------------------- |  | ---- | --------- | ---- | - | --------- | -
|                                                                                                                     |  | 2005 |           | 2004 |  
|Net income                                                                                                           |  |      |           |      |   |           |  
|As reported                                                                                                          |  | $    | 6,536,766 |      | $ | 6,042,096 |  
|Deducts:                                                                                                             |  |      |           |      |   |           |  
|Total stock-based employee compensation expense determined under fair value based methods for all awards, net of tax |  |      |          |      |   | (52,634   | )
|                                                                                                                     |  |      |           |      |   |           |  
|Pro forma net income                                                                                                 |  | $    | 6,536,766 |      | $ | 5,989,462 |  
|                                                                                                                     |  |      |           |      |   |           |  
|Basic earnings per share                                                                                             |  |      |           |      |   |           |  
|As reported                                                                                                          |  | $    | 1.13      |      | $ | 1.08      |  
|Pro forma                                                                                                            |  | $    | 1.13      |      | $ | 1.07      |  
|Diluted earnings per share                                                                                           |  |      |           |      |   |           |  
|As reported                                                                                                          |  | $    | 1.12      |      | $ | 1.08      |  
|Pro forma                                                                                                            |  | $    | 1.12      |      | $ | 1.07      |  

Prior to the adoption of Statement 123(R), the Bank would have presented all tax benefits of
deductions resulting from the exercise of stock options as operating cash flows in the statement of cash flows. Statement 123(R) requires the cash flows resulting from the tax benefits resulting from tax deductions in excess of the compensation cost
recognized for those options (excess tax benefits) to be classified as financing cash flows.

Advertising Costs

Advertising costs are expensed as incurred.

Cash and Cash Equivalents

For purposes of reporting cash flows, cash and cash equivalents include cash and due from banks,
federal funds sold, securities purchased under agreements to resell, and interest-bearing deposits in banks.



F-13



---

The Peoples BancTrust Company, Inc and Subsidiary

Notes to Consolidated Financial Statements

December 31, 2006, 2005
and 2004



Accounting for Derivatives and Hedging Activities

As part of the Companys overall interest rate risk management, the Company occasionally uses derivative instruments. Under the guidelines of SFAS
133, Accounting for Derivative Instruments and Hedging Activities, as amended, all derivative instruments are required to be carried at fair value on the balance sheet. On the date the derivative contract is entered into, the Company
designates the derivative as a hedge of a forecasted transaction or of the variability of cash flows to be received or paid related to a recognized asset or liability cash flow hedge. Changes in the fair value of a derivative that is
highly effective as - and that is designated and qualifies as - a cash-flow hedge are recorded in other comprehensive income, until earnings are affected by the variability of cash flows (e.g., when periodic settlements on a variable-rate asset or
liability are recorded in earnings).

The Company formally documents all relationships between hedging instruments and hedged items, as well
as its risk-management objective and strategy for undertaking various hedged transactions. This process includes linking all derivatives that are designated as cash-flow hedges to specific assets and liabilities on the balance sheet or forecasted
transactions. The Company also formally assesses, both at the hedges inception and on an ongoing basis, whether the derivatives that are used in hedging transactions are highly effective in offsetting changes in cash flows of hedged items.
When it is determined that a derivative is not highly effective as a hedge or that it has ceased to be a highly effective hedge, the Company discontinues hedge accounting prospectively, as discussed below.

The Company discontinues hedge accounting prospectively when (1) it is determined that the derivative is no longer effective in offsetting changes in
the cash flows of a hedged item (including forecasted transactions); (2) the derivative expires or is sold, terminated, or exercised; (3) the derivative is dedesignated as a hedge instrument, because it is unlikely that a forecasted
transaction will occur; or (4) management determines that designation of the derivative as a hedge instrument is no longer appropriate.

When hedge accounting is discontinued because it is probable that a forecasted transaction will not occur, the derivative will continue to be carried on the balance sheet at its fair value, and gains and losses that were accumulated in
other comprehensive income will be recognized immediately in earnings. In all other situations in which hedge accounting is discontinued, the derivative will be carried at its fair value on the balance sheet, with subsequent changes in its fair
value recognized in current-period earnings.

Derivative instruments that are used as part of the Companys interest-rate
risk-management strategy consist primarily of interest-rate swaps and interest rate floors or caps. Interest-rate swaps generally involve the exchange of fixed-rate and variable-rate interest payments between two parties, based on a notional
principal amount, interest rate index and maturity date.

Interest rate floors and caps are designed to generate cash flow to the Company in
the event that a specific interest rate index decreases or increases (decreases in the case of floors and increases in the case of caps) beyond a predetermined level. If during the contractual life of the derivative agreement, the market interest
rate for the stated index migrates above its predetermined level for caps or below its predetermined level for floors, the Company is paid the difference between the predetermined interest rate and the then current market interest rate for the
stated index applied to the stated notional principal amount.

The Company is exposed to credit and market risk by using derivative
instruments. If the counterparty fails to perform, credit risk is equal to the extent of the fair-value gain in a derivative. The Company minimizes the credit (or repayment) risk in derivative instruments by entering into transactions with high
quality counterparties. Market risk is the adverse effect that a change in interest rates, or implied volatility rates has on the value of a financial instrument. The Company manages the market risk by using derivatives for hedging purposes, and
then monitoring the effectiveness of the hedges.



F-14



---

The Peoples BancTrust Company, Inc and Subsidiary

Notes to Consolidated Financial Statements

December 31, 2006, 2005
and 2004



Recently Issued Accounting Standards

In June 2006, the FASB issued FASB Interpretation No. (FIN) 48, Accounting for Uncertainty in Income Taxes-An Interpretation of FASB Statement
No. 109,which prescribes a recognition threshold and measurement attribute for the financial statement recognition and measurement of a tax position taken or expected to be taken in a tax return. FIN 48 will be effective beginning
January 1, 2007. The Company does not expect the impact of the implementation of FIN 48 on its consolidated financial statements to be significant.

In September 2006, the FASB issued Statement No. 157, Fair Value Measurements, which provides for enhanced guidance for using fair value to measure assets and liabilities. FASB Statement No. 157
defines fair value, establishes a framework for measuring fair value in generally accepted accounting principles, and expands disclosures about fair value measurements. FASB Statement No. 157 is applicable under other accounting
pronouncements that either require or permit fair value measurements and does not require any new fair value measurements. FASB Statement No. 157 is effective for financial statements issued for fiscal years beginning after
November 15, 2007, and interim periods within those fiscal years. The Company has not yet evaluated the impact of the implementation of FASB Statement No. 157.

In September 2006, the FASB ratified Emerging Issues Task Force (EITF) Issue 06-4, Accounting for Deferred Compensation and Postretirement Benefit
Aspects of Endorsement Split-Dollar Life Insurance Arrangements.EITF Issue 06-4 addresses accounting for split-dollar life insurance arrangements after the employer purchases a life insurance policy on the covered employee. EITF Issue 06-4
states that an obligation arises as a result of a substantive agreement with an employee to provide future postretirement benefits. Under EITF Issue 06-4, the obligation is not settled upon entering into an insurance arrangement. Since the
obligation is not settled, a liability should be recognized in accordance with applicable authoritative guidance. EITF Issue 06-4 is effective for fiscal years beginning after December 15, 2007. The Company has not yet evaluated the
impact of the implementation of EITF Issue 06-4.

In September 2006, the FASB ratified EITF Issue 06-5, Accounting for Purchases of Life
Insurance-Determining the Amount That Could Be Realized in Accordance with FASB Technical Bulletin (FTB) No. 85-4, Accounting for Purchases of Life Insurance. EITF Issue 06-5 addresses how an entity should determine the
amount that could be realized under the insurance contract at the balance sheet date in applying FTB 85-4 and if the determination should be on an individual or group policy basis. EITF Issue 06-5 is effective for fiscal years beginning after
December 15, 2006. The adoption of EITF Issue 06-5 is not expected to have a material effect on the Companys financial statements.



|2. | Restricted Cash Balances
|-- | ------------------------

Aggregate reserves in the
form of deposits with the Federal Reserve Bank of approximately $13,448,000 and $18,108,000 were maintained to satisfy federal regulatory requirements at December 31, 2006 and 2005, respectively.



|3. | Capital and Preferred Stock
|-- | ---------------------------

The Company is
authorized to issue 1,000,000 shares of preferred stock, par value $0.10 per share, which have been designated as Non-cumulative Non-voting Directors Preferred Stock, Series A. No preferred stock was outstanding at either December 31,
2006 or 2005.



F-15



---

The Peoples BancTrust Company, Inc and Subsidiary

Notes to Consolidated Financial Statements

December 31, 2006, 2005
and 2004



|4. | Securities
|-- | ----------

The amortized cost and approximate
market values of available-for-sale securities at December 31, 2006 and 2005 are as follows:



|                                                                         |  |                |             |                      |   |                       |  |   |                         |   |  |   |            
|------------------------------------------------------------------------ |  | -------------- | ----------- | -------------------- | - | --------------------- |  | - | ----------------------- | - |  | - | -----------
|                                                                         |  | 2006          
|Type                                                                     |  | Amortized Cost |             | GrossUnrealizedGains |   | GrossUnrealizedLosses |  |   | ApproximateMarket Value
|U.S. Government Issued Securities                                        |  | $              | 10,956,981  |                      | $ |                      |  | $ | (156,607                | ) |  | $ | 10,800,374 
|Obligations of other U.S. government sponsored agencies and corporations |  |                | 112,006,356 |                      |   |                      |  |   | (1,822,902              | ) |  |   | 110,183,454
|Mortgage backed securities                                               |  |                | 77,892,103  |                      |   | 1,465                 |  |   | (2,389,159              | ) |  |   | 75,504,409 
|Corporate and other securities                                           |  |                | 7,860,418   |                      |   | 266,647               |  |   | (13,694                 | ) |  |   | 8,113,371  
|                                                                         |  |                |             |                      |   |                       |  |   |                         |   |  |   |            
|                                                                         |  | $              | 208,715,858 |                      | $ | 268,112               |  | $ | (4,382,362              | ) |  | $ | 204,601,608
|                                                                         |  |                |             |                      |   |                       |  |   |                         |   |  |   |            
|                                                                         | 
|                                                                         |  | 2005          
|Type                                                                     |  | Amortized Cost |             | GrossUnrealizedGains |   | GrossUnrealizedLosses |  |   | ApproximateMarket Value
|U.S. Government Issued Securities                                        |  | $              | 13,958,288  |                      | $ |                      |  | $ | (291,099                | ) |  | $ | 13,667,189 
|Obligations of other U.S. government sponsored agencies and corporations |  |                | 114,969,313 |                      |   | 340                   |  |   | (2,658,918              | ) |  |   | 112,310,735
|Mortgage backed securities                                               |  |                | 93,654,751  |                      |   |                      |  |   | (2,742,880              | ) |  |   | 90,911,871 
|Corporate and other securities                                           |  |                | 8,934,008   |                      |   | 244,751               |  |   | (25,071                 | ) |  |   | 9,153,688  
|                                                                         |  |                |             |                      |   |                       |  |   |                         |   |  |   |            
|                                                                         |  | $              | 231,516,360 |                      | $ | 245,091               |  | $ | (5,717,968              | ) |  | $ | 226,043,483
|                                                                         |  |                |             |                      |   |                       |  |   |                         |   |  |   |            

Included within corporate and other securities are $2,011,249 and $756,491 in marketable equity
securities at December 31, 2006 and 2005, respectively. Also included within corporate and other securities are $3,746,800 and $3,299,100 of Federal Home Loan Bank stock at December 31, 2006 and 2005, respectively, and $598,500 and
$591,712 of Federal Reserve Bank stock at December 31, 2006 and 2005 respectively. The Federal home Loan Bank Stock and Federal Reserve Bank Stock are carried at cost because the market values were not readily determinable.

The amortized cost and approximate market value of available-for-sale securities at December 31, 2006, by contractual maturity, are shown below.
Expected maturities for mortgage-backed securities may differ from contractual maturities because borrowers may have the right to call or prepay obligations with or without call or prepayment penalties. Therefore, these securities and equity
securities are not categorized by maturity class.



|                                       |  |                               |             |              |   |            
|-------------------------------------- |  | ----------------------------- | ----------- | ------------ | - | -----------
|                                       |  | Available-for-sale Securities
|                                       |  | Cost                          |             | Market Value
|Due in one year or less                |  | $                             | 44,160,577  |              | $ | 43,940,583 
|Due after one year through five years  |  |                               | 79,802,679  |              |   | 78,029,470 
|Due after five years through ten years |  |                               |            |              |   |           
|Mortgage backed securities             |  |                               | 77,892,103  |              |   | 75,504,409 
|Equity securities                      |  |                               | 6,860,499   |              |   | 7,127,146  
|                                       |  |                               |             |              |   |            
|                                       |  | $                             | 208,715,858 |              | $ | 204,601,608
|                                       |  |                               |             |              |   |            



F-16



---

The Peoples BancTrust Company, Inc and Subsidiary

Notes to Consolidated Financial Statements

December 31, 2006, 2005
and 2004



The following table reflects BancTrusts investments gross unrealized losses and market
value, aggregated by investment category and length of time that individual securities have been in a continuous unrealized loss position, at December 31, 2006 and 2005.



|                                                                         |  |                     |            |                  |                   |         |              |  |                  |             |  |   |            |  
|------------------------------------------------------------------------ |  | ------------------- | ---------- | ---------------- | ----------------- | ------- | ------------ |  | ---------------- | ----------- |  | - | ---------- | -
|                                                                         |  | 2006                |           
|                                                                         |  | Less Than 12 Months |            |                  | 12 Months or More |        
|Type                                                                     |  | Market Value        |            | UnrealizedLosses |                   |         | Market Value |  | UnrealizedLosses |            
|U.S. Government Issued Securities                                        |  | $                   |           |                  | $                 |        |              |  | $                | 5,819,374   |  | $ | (142,279   | )
|Obligations of other U.S. government sponsored agencies and corporations |  |                     | 19,949,000 |                  |                   | (21,173 | )            |  |                  | 95,215,454  |  |   | (1,816,057 | )
|Obligations of state and political subdivisions                          |  |                     |           |                  |                   |        |              |  |                  |            |  |   |           |  
|Mortgage backed securities                                               |  |                     |           |                  |                   |        |              |  |                  | 74,888,887  |  |   | (2,389,159 | )
|Corporate and other securities                                           |  |                     |           |                  |                   |        |              |  |                  | 986,225     |  |   | (13,694    | )
|                                                                         |  |                     |            |                  |                   |         |              |  |                  |             |  |   |            |  
|Total temporarily impaired securities                                    |  | $                   | 19,949,000 |                  | $                 | (21,173 | )            |  | $                | 176,909,940 |  | $ | (4,361,189 | )
|                                                                         |  |                     |            |                  |                   |         |              |  |                  |             |  |   |            |  



|                                                                         |  |              |             |                  |   |            |  
|------------------------------------------------------------------------ |  | ------------ | ----------- | ---------------- | - | ---------- | -
|                                                                         |  | Total        |            
|                                                                         |  | Market Value |             | UnrealizedLosses |  
|U.S. Government Issued Securities                                        |  | $            | 5,819,374   |                  | $ | (142,279   | )
|Obligations of other U.S. government sponsored agencies and corporations |  |              | 115,164,454 |                  |   | (1,837,230 | )
|Obligations of state and political subdivisions                          |  |              |            |                  |   |           |  
|Mortgage backed securities                                               |  |              | 74,888,887  |                  |   | (2,389,159 | )
|Corporate and other securities                                           |  |              | 986,225     |                  |   | (13,694    | )
|                                                                         |  |              |             |                  |   |            |  
|Total temporarily impaired securities                                    |  | $            | 196,858,940 |                  | $ | (4,382,362 | )
|                                                                         |  |              |             |                  |   |            |  



|                                                                         |  |                     |            |                  |                   |          |              |  |                  |             |  |   |            |  
|------------------------------------------------------------------------ |  | ------------------- | ---------- | ---------------- | ----------------- | -------- | ------------ |  | ---------------- | ----------- |  | - | ---------- | -
|                                                                         |  | 2005                |           
|                                                                         |  | Less Than 12 Months |            |                  | 12 Months or More |         
|Type                                                                     |  | Market Value        |            | UnrealizedLosses |                   |          | Market Value |  | UnrealizedLosses |            
|U.S. Government Issued Securities                                        |  | $                   |           |                  | $                 |         |              |  | $                | 13,667,190  |  | $ | (291,098   | )
|Obligations of other U.S. government sponsored agencies and corporations |  |                     | 17,683,176 |                  |                   | (274,197 | )            |  |                  | 93,619,921  |  |   | (2,384,722 | )
|Obligations of state and political subdivisions                          |  |                     |           |                  |                   |         |              |  |                  |            |  |   |           |  
|Mortgage backed securities                                               |  |                     | 26,063,430 |                  |                   | (515,387 | )            |  |                  | 64,848,442  |  |   | (2,227,493 | )
|Corporate and other securities                                           |  |                     |           |                  |                   |         |              |  |                  | 974,754     |  |   | (25,071    | )
|                                                                         |  |                     |            |                  |                   |          |              |  |                  |             |  |   |            |  
|Total temporarily impaired securities                                    |  | $                   | 43,746,606 |                  | $                 | (789,584 | )            |  | $                | 173,110,307 |  | $ | (4,928,384 | )
|                                                                         |  |                     |            |                  |                   |          |              |  |                  |             |  |   |            |  



|                                                                         |  |              |             |                  |   |            |  
|------------------------------------------------------------------------ |  | ------------ | ----------- | ---------------- | - | ---------- | -
|                                                                         |  | Total        |            
|                                                                         |  | Market Value |             | UnrealizedLosses |  
|U.S. Government Issued Securities                                        |  | $            | 13,667,190  |                  | $ | (291,098   | )
|Obligations of other U.S. government sponsored agencies and corporations |  |              | 111,303,097 |                  |   | (2,658,919 | )
|Obligations of state and political subdivisions                          |  |              |            |                  |   |           |  
|Mortgage backed securities                                               |  |              | 90,911,872  |                  |   | (2,742,880 | )
|Corporate and other securities                                           |  |              | 974,754     |                  |   | (25,071    | )
|                                                                         |  |              |             |                  |   |            |  
|Total temporarily impaired securities                                    |  | $            | 216,856,913 |                  | $ | (5,717,968 | )
|                                                                         |  |              |             |                  |   |            |  



F-17



---

The Peoples BancTrust Company, Inc and Subsidiary

Notes to Consolidated Financial Statements

December 31, 2006, 2005
and 2004



Management evaluates securities for other-than-temporary impairment at least on a quarterly basis,
and more frequently when economic or market concerns warrant such evaluation. Consideration is given to (1) the length of time and the extent to which the fair value has been less than cost, (2) the financial condition and near-term
prospects of the issuer, and (3) the intent and ability of BancTrust to retain its investment in the issuer for a period of time sufficient to allow for any anticipated recovery in fair value. In analyzing an issuers financial condition,
management considers whether the securities are issued by the federal government or its agencies, whether downgrades by bond rating agencies has occurred, and industry analysts reports. As management has the ability to hold debt securities
until maturity, or for the foreseeable future if classified as available for sale, no declines are deemed to be other than temporary.

Gross
gains of $19,784, $14,193, and $809,537 for 2006, 2005 and 2004, respectively were realized on the sales of debt securities. Gross losses of $1,364 and $84,678 were realized on the sales of debt securities for 2006 and 2004 respectively. No losses
were realized on the sale of debt securities in 2005.

Securities with a carrying value of approximately $154,149,000 and $149,148,000 were
pledged as collateral for public funds deposits and repurchase agreements at December 31, 2006 and 2005, respectively.



|5. | Loans
|-- | -----

The major categories of loans at
December 31, 2006 and 2005 are as follows:



|                           |  |      |             |      |   |            
|-------------------------- |  | ---- | ----------- | ---- | - | -----------
|                           |  | 2006 |             | 2005
|Commercial and Industrial  |  | $    | 152,407,163 |      | $ | 87,338,864 
|Real estate mortgage       |  |      | 439,820,575 |      |   | 362,837,624
|Personal                   |  |      | 46,332,312  |      |   | 45,195,548 
|Overdrafts and credit line |  |      | 2,225,264   |      |   | 1,018,960  
|                           |  |      |             |      |   |            
|                           |  |      | 640,785,314 |      |   | 496,390,996
|                           |  |      |             |      |   |            
|Less:                      |  |      |             |      |   |            
|Unearned discount          |  |      | 8,985,811   |      |   | 881,794    
|Allowance for loan losses  |  |      | 6,398,376   |      |   | 6,654,460  
|                           |  |      |             |      |   |            
|                           |  | $    | 625,401,127 |      | $ | 488,854,742
|                           |  |      |             |      |   |            

The Banks lending is concentrated throughout Dallas, Autauga, Butler, Bibb, Elmore, Shelby,
Lee, Jefferson, Tuscaloosa and Montgomery counties in Alabama; the repayment of these loans is, in part, dependent on the economic conditions in these areas of the state. Management does not believe the loan portfolio contains concentrations of
credit risk either geographically, or by borrower, which would expose the Bank to unacceptable amounts of risk. The above loans included agricultural loans totaling approximately $4,771,000 and $3,031,000 for 2006 and 2005, respectively. Management
continually evaluates the potential risk in this segment of the portfolio in determining the adequacy of the allowance for possible loan losses.



F-18



---

The Peoples BancTrust Company, Inc and Subsidiary

Notes to Consolidated Financial Statements

December 31, 2006, 2005
and 2004



The Bank evaluates each customers credit worthiness on a case-by-case basis. The amount of
collateral obtained, if deemed necessary by the Bank, upon extension of credit is based on managements credit evaluation of the customer. Collateral held varies, but may include accounts receivable, inventory, property, plant and equipment,
residential real estate and income-producing commercial properties. No additional credit risk exposure relating to outstanding loan balances exists beyond the amounts shown in the consolidated balance sheets as of December 31, 2006 and 2005.

Loans on which the accrual of interest has been discontinued amounted to approximately $4,201,000, $815,000, and $2,121,000 for 2006, 2005,
and 2004, respectively. Had these loans been current throughout their terms, interest income would have increased approximately $144,000, $62,000, and $119,000 in 2006, 2005, and 2004, respectively.

Changes in the allowance for loan losses were as follows:



|                                         |  |      |            |   |      |   |            |      |  |   |            |  
|---------------------------------------- |  | ---- | ---------- | - | ---- | - | ---------- | ---- |  | - | ---------- | -
|                                         |  | 2006 |            |   | 2005 |   |            | 2004 | 
|Balance, beginning of year               |  | $    | 6,654,460  |   |      | $ | 9,042,942  |      |  | $ | 11,994,862 |  
|(Credit) provision charged to operations |  |      | 45,411     |   |      |   | (675,471   | )    |  |   | (149,164   | )
|Loan charged off                         |  |      | (1,114,785 | ) |      |   | (3,102,353 | )    |  |   | (4,409,406 | )
|Recoveries                               |  |      | 813,290    |   |      |   | 1,389,342  |      |  |   | 1,606,650  |  
|                                         |  |      |            |   |      |   |            |      |  |   |            |  
|Balance, end of year                     |  | $    | 6,398,376  |   |      | $ | 6,654,460  |      |  | $ | 9,042,942  |  
|                                         |  |      |            |   |      |   |            |      |  |   |            |  



|6. | Bank Premises and Equipment
|-- | ---------------------------

Bank premises and
equipment and accumulated depreciation at December 31, 2006 and 2005 are summarized as follows:



|                                                 |  |      |            |      |   |           
|------------------------------------------------ |  | ---- | ---------- | ---- | - | ----------
|                                                 |  | 2006 |            | 2005
|Buildings                                        |  | $    | 22,010,708 |      | $ | 16,357,246
|Furniture and equipment                          |  |      | 17,064,669 |      |   | 15,375,885
|Land improvements                                |  |      | 933,244    |      |   | 573,719   
|Construction in progress, substantially complete |  |      | 663,206    |      |   | 1,910,540 
|                                                 |  |      |            |      |   |           
|                                                 |  |      | 40,671,827 |      |   | 34,217,390
|Less accumulated depreciation                    |  |      | 20,812,899 |      |   | 19,014,170
|                                                 |  |      |            |      |   |           
|                                                 |  |      | 19,858,928 |      |   | 15,203,220
|Land                                             |  |      | 5,528,269  |      |   | 3,742,385 
|                                                 |  |      |            |      |   |           
|                                                 |  | $    | 25,387,197 |      | $ | 18,945,605
|                                                 |  |      |            |      |   |           

Depreciation expense on premises and equipment totaled $1,948,359 in 2006, $2,133,354 in 2005 and
$2,277,564 in 2004.



F-19



---

The Peoples BancTrust Company, Inc and Subsidiary

Notes to Consolidated Financial Statements

December 31, 2006, 2005
and 2004



|7. | Goodwill and Other Intangible Assets
|-- | ------------------------------------

The Company
has amortizable finite-lived intangible assets capitalized on its balance sheet in the form of core deposits and other intangibles. Intangible assets (including goodwill) at December 31, 2006 and 2005 are as follows:



|                                 |  |                         |           |                         |   |                  |  |   |          
|-------------------------------- |  | ----------------------- | --------- | ----------------------- | - | ---------------- |  | - | ---------
|                                 |  | As of December 31, 2006
|                                 |  | GrossCarryingAmount     |           | AccumulatedAmortization |   | NetCarryingValue
|Acquired intangible assets:      |  |                         |           |                         |   |                  |  |   |          
|Core deposits                    |  | $                       | 2,871,712 |                         | $ | 2,646,559        |  | $ | 225,153  
|Other                            |  |                         | 212,804   |                         |   | 212,804          |  |   |         
|                                 |  |                         |           |                         |   |                  |  |   |          
|Total acquired intangible assets |  | $                       | 3,084,516 |                         | $ | 2,859,363        |  | $ | 225,153  
|                                 |  |                         |           |                         |   |                  |  |   |          
|Non-amortizing goodwill:         |  | $                       | 8,136,833 |                         | $ | 1,933,610        |  | $ | 6,203,223
|                                 |  |                         |           |                         |   |                  |  |   |          
|                                 | 
|                                 |  | As of December 31, 2005
|                                 |  | GrossCarryingAmount     |           | AccumulatedAmortization |   | NetCarryingValue
|Acquired intangible assets:      |  |                         |           |                         |   |                  |  |   |          
|Core deposits                    |  | $                       | 2,871,712 |                         | $ | 2,450,517        |  | $ | 421,195  
|Other                            |  |                         | 212,804   |                         |   | 203,013          |  |   | 9,791    
|                                 |  |                         |           |                         |   |                  |  |   |          
|Total acquired intangible assets |  | $                       | 3,084,516 |                         | $ | 2,653,530        |  | $ | 430,986  
|                                 |  |                         |           |                         |   |                  |  |   |          
|Non-amortizing goodwill:         |  | $                       | 8,136,833 |                         | $ | 1,933,610        |  | $ | 6,203,223
|                                 |  |                         |           |                         |   |                  |  |   |          

During each calendar year, the Company performs an impairment test on amounts recorded in goodwill
as of June 30. For the Years ended December 31, 2006, 2005 and 2004, no amounts of impairment losses were recognized related to goodwill.

Amortization expense on finite-lived intangible assets totaled approximately $206,000 for 2006 and 227,000 for each of 2005 and 2004. Aggregate amortization expense of currently recorded core deposits and other intangibles is expected to be
as follows through December 31, 2008:



|      |  |              |         |                  |   |       |  |   |        
|----- |  | ------------ | ------- | ---------------- | - | ----- |  | - | -------
|      |  | CoreDeposits |         | AcquisitionCosts |   | Total
|2007  |  | $            | 196,042 |                  | $ |      |  | $ | 196,042
|2008  |  |              | 29,111  |                  |   |      |  |   | 29,111 
|      |  |              |         |                  |   |       |  |   |        
|Total |  | $            | 225,153 |                  | $ |      |  | $ | 225,153
|      |  |              |         |                  |   |       |  |   |        



F-20



---

The Peoples BancTrust Company, Inc and Subsidiary

Notes to Consolidated Financial Statements

December 31, 2006, 2005
and 2004



|8. | Derivatives
|-- | -----------

During 2006, the Company entered into an interest rate floor contract in order to mitigate the possible effects declining interest rates could have on a specific segment of its floating rate loan portfolio. Pursuant
to the agreement, the Company will receive payments from its counterparty if and when the stated prime rate of interest is less than 6.50% on May 6th, August 6th, November 6thor February 6thin a given year, until and including February 6, 2011. Payment amounts will be determined by multiplying the spread between stated prime on a given measurement date and 6.50%, by a notional
amount of $50,000,000. The Company paid a one-time premium of $445,000 for the contract, which is being amortized into expense over the life of the contract, which is five years. For the year ending December 31, 2006, $80,177 was expensed for
the interest floor contract.

The interest rate floor is being accounted for as a cash flow hedge and marked to market through other
comprehensive income. As of December 31, 2006, the interest rate floor contract was carried at its fair value which was equal to $160,000. The Company considers the derivative (interest rate floor) as highly effective in offsetting changes in
cash flows of the hedged items (prime based floating rate loans) should interest rates fall below the stated prime rate of interest noted above.



|                    |  |                |  |            |  |                                
|------------------- |  | -------------- |  | ---------- |  | -------------------------------
|December 31, 2006  
|Derivative Type     |  | NotionalAmount |  | Fair Value |  | Assets Hedged                  
|Interest rate floor |  | $50,000,000    |  | $160,000   |  | Prime based floating rate loans



|9. | Deposits
|-- | --------

Time deposits of less than $100,000
totaled $178,418,438 at December 31, 2006, while time deposits of $100,000 or more totaled $194,280,222. At December 31, 2005, time deposits of less than $100,000 totaled $182,090,925, while time deposits of $100,000 or more totaled
$145,445,135. The scheduled maturities of time deposits at December 31, 2006 were as follows:



|           |  |      |            
|---------- |  | ---- | -----------
|           |  | 2006
|2007       |  | $    | 246,931,483
|2008       |  |      | 72,951,559 
|2009       |  |      | 22,751,737 
|2010       |  |      | 28,697,401 
|2011       |  |      | 1,365,089  
|Thereafter |  |      | 1,391      
|           |  |      |            
|           |  | $    | 372,698,660
|           |  |      |            



F-21



---

The Peoples BancTrust Company, Inc and Subsidiary

Notes to Consolidated Financial Statements

December 31, 2006, 2005
and 2004



Contained within total time deposits at December 31, 2006 and 2005, were brokered time deposits.
Brokered time deposits totaled $61,273,404 at December 31, 2006 and $20,693,500 at December 31, 2005. The scheduled maturities of brokered time deposits at December 31, 2006 were as follows:



|     |  |      |           
|---- |  | ---- | ----------
|     |  | 2006
|2007 |  | $    | 4,490,904 
|2008 |  |      | 38,847,500
|2009 |  |      | 17,836,000
|2010 |  |      | 99,000    
|     |  |      |           
|     |  | $    | 61,273,404
|     |  |      |           



|10. | Borrowed Funds
|--- | --------------

Borrowed funds are summarized as
follows:



|                |  |      |            |      |   |           
|--------------- |  | ---- | ---------- | ---- | - | ----------
|                |  | 2006 |            | 2005
|FHLB borrowings |  | $    | 47,451,986 |      | $ | 36,920,876
|Other           |  |      | 815,649    |      |   | 811,582   
|                |  |      |            |      |   |           
|                |  | $    | 48,267,635 |      | $ | 37,732,458
|                |  |      |            |      |   |           

The Company is a member of the Federal Home Loan Bank of Atlanta (FHLB). At December 31, 2006
and 2005, the Company had FHLB borrowings outstanding of $47,451,986 and $36,920,876, respectively. Based on current collateral, the Company had $14,439,000 of additional borrowing capacity with the FHLB at December 31, 2006. FHLB has a blanket
lien on the Companys 1-4 family and certain multi family mortgage loans pledged against the amount of the outstanding debt. These borrowings bear interest rates of 0.08 percent to 7.03 percent and mature from 2007 to 2026.

At December 31, 2006, borrowed funds, including the current portion, are scheduled to mature as follows:



|           |  |   |           
|---------- |  | - | ----------
|2007       |  | $ | 2,995,760 
|2008       |  |   | 26,924,624
|2009       |  |   | 603,986   
|2010       |  |   | 10,484,096
|2011       |  |   | 492,419   
|Thereafter |  |   | 6,766,750 
|           |  |   |           
|           |  | $ | 48,267,635
|           |  |   |           

At December 31, 2006, the Company has unused lines of credit with unaffiliated financial
institutions totaling approximately $66 million.



F-22



---

The Peoples BancTrust Company, Inc and Subsidiary

Notes to Consolidated Financial Statements

December 31, 2006, 2005
and 2004



|11. | Income Taxes
|--- | ------------

The Company and the Bank file a
consolidated income tax return. The consolidated provision for income taxes is as follows:



|         |  |   |          
|-------- |  | - | ---------
|2006     |  |   |          
|Current  |  | $ | 3,732,602
|Deferred |  |   | 53,263   
|         |  |   |          
|         |  | $ | 3,785,865
|         |  |   |          
|2005     |  |   |          
|Current  |  | $ | 1,349,725
|Deferred |  |   | 1,249,128
|         |  |   |          
|         |  | $ | 2,598,853
|         |  |   |          
|2004     |  |   |          
|Current  |  | $ | 875,513  
|Deferred |  |   | 1,095,364
|         |  |   |          
|         |  | $ | 1,970,877
|         |  |   |          

Temporary differences and carryforwards which give rise to a significant portion of deferred tax
assets and liabilities at December 31 are as follows:



|                                         |  |      |            |   |      |   |           |  
|---------------------------------------- |  | ---- | ---------- | - | ---- | - | --------- | -
|                                         |  | 2006 |            |   | 2005 |  
|Allowance for loan losses                |  | $    | 2,509,764  |   |      | $ | 2,547,993 |  
|Pension expense                          |  |      | (547,421   | ) |      |   | (816,199  | )
|Intangible assets                        |  |      | (60,420    | ) |      |   | (120,326  | )
|Bank premises and equipment              |  |      | (1,324,221 | ) |      |   | (995,898  | )
|Investments                              |  |      | (452,231   | ) |      |   | (118,186  | )
|Unrealized loss on investment securities |  |      | 1,522,695  |   |      |   | 2,024,030 |  
|Unrealized loss on interest rate floor   |  |      | 75,849     |   |      |   |          |  
|Unrecognized net periodic pension costs  |  |      | 835,454    |   |      |   |          |  
|Other                                    |  |      | 80,707     |   |      |   | (237,944  | )
|                                         |  |      |            |   |      |   |           |  
|                                         |  | $    | 2,640,176  |   |      | $ | 2,283,470 |  
|                                         |  |      |            |   |      |   |           |  

The Company did not establish a valuation allowance related to the net deferred tax asset due to
taxes paid within the carry-back period being sufficient to offset future deductions resulting from the reversal of these temporary differences.



F-23



---

The Peoples BancTrust Company, Inc and Subsidiary

Notes to Consolidated Financial Statements

December 31, 2006, 2005
and 2004



The provision for income taxes is different from the amount computed by applying the federal income
tax statutory rate to income before provision for income taxes. The reasons for this difference, as a percentage of pre-tax income, are as follows:



|                                  |  |      |   |  |      |   |  |      |  
|--------------------------------- |  | ---- | - |  | ---- | - |  | ---- | -
|                                  |  | 2006 |   |  | 2005 |   |  | 2004 |  
|Federal income tax statutory rate |  | 35.0 | % |  | 34.0 | % |  | 34.0 | %
|Tax exempt income                 |  | (0.4 | ) |  | (0.5 | ) |  | (0.6 | )
|Bank owned life insurance         |  | (1.0 | ) |  | (1.0 | ) |  | (1.4 | )
|State income taxes                |  | 3.7  |   |  | 2.6  |   |  | 2.3  |  
|Income tax credits                |  | (3.6 | ) |  | (4.7 | ) |  | (5.3 | )
|Deferred tax adjustments          |  |     |   |  | (1.7 | ) |  | (3.8 | )
|Other                             |  | (1.8 | ) |  | (0.1 | ) |  | (0.6 | )
|                                  |  |      |   |  |      |   |  |      |  
|Effective tax rate                |  | 31.9 | % |  | 28.6 | % |  | 24.6 | %
|                                  |  |      |   |  |      |   |  |      |  



F-24



---

The Peoples BancTrust Company, Inc and Subsidiary

Notes to Consolidated Financial Statements

December 31, 2006, 2005
and 2004



|12. | Benefit Plans
|--- | -------------

Defined Benefit Pension Plan

The Parent Company sponsors a defined benefit pension plan covering substantially all employees. The plan calls for benefits to be paid
to eligible employees at retirement based primarily upon years of service with the Parent Company and compensation rates for the last five years. Contributions to the plan reflect benefits attributed to employees services to date, as well as
services expected to be performed in the future.

In September 2006, FASB issued SFAS 158, Employers Accounting for Defined Benefit
Pension and Other Postretirement Plans, an amendment of FASB Statements No. 87, 88, 106, and 132 (R) (SFAS 158), which changed the accounting rules for reporting and disclosures related to pension and other post-retirement
benefit plans. Companies are now required to include on the balance sheet an additional asset or liability to reflect the funded status of retirement and other post-retirement benefit plans, and a corresponding after-tax adjustment to equity through
other comprehensive income. Retroactive application of this accounting rule is prohibited; therefore, 2006 is presented as required by SFAS 158 and 2005 is presented as required under the accounting rules prior to SFAS 158. The adoption in 2006 had
no effect on the computation of net periodic benefit expense for the Companys defined benefit pension plan.

Pension expense includes
the following components:



|                                                                    |  |              |          |   |      |   |          |      |  |   |          |  
|------------------------------------------------------------------- |  | ------------ | -------- | - | ---- | - | -------- | ---- |  | - | -------- | -
|                                                                    |  | December 31, |         
|                                                                    |  | 2006         |          |   | 2005 |   |          | 2004 | 
|Service cost of the current period                                  |  | $            | 841,202  |   |      | $ | 793,314  |      |  | $ | 680,830  |  
|Interest cost on the projected benefit obligation                   |  |              | 786,553  |   |      |   | 737,433  |      |  |   | 688,372  |  
|Return on plan assets                                               |  |              | (963,680 | ) |      |   | (894,900 | )    |  |   | (655,551 | )
|Net amortization of prior service cost, and actuarial net gain/loss |  |              | 150,990  |   |      |   | 103,974  |      |  |   | 90,761   |  
|                                                                    |  |              |          |   |      |   |          |      |  |   |          |  
|Pension expense, net                                                |  | $            | 815,065  |   |      | $ | 739,821  |      |  | $ | 804,412  |  
|                                                                    |  |              |          |   |      |   |          |      |  |   |          |  

Effective 2006, SFAS 158 requires that companies recognize a balance sheet asset or liability for
their pension plans equal to the funded status of the plan, as shown below.

For 2005, a pension asset was recognized because amounts the
employer had contributed to the plan exceeded cumulative net periodic pension costs recognized. For 2006, the pension liability was equal to the funded status of the plan which reflects the change in presentation from applying SFAS 158.



F-25



---

The Peoples BancTrust Company, Inc and Subsidiary

Notes to Consolidated Financial Statements

December 31, 2006, 2005
and 2004



The following sets forth the funded status of the plan and the amounts included in the accompanying
balance sheet:



|                                                                                                                                                                                                                    |  |              |             |   |      |   |             |  
|------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------- |  | ------------ | ----------- | - | ---- | - | ----------- | -
|                                                                                                                                                                                                                    |  | December 31, |            
|                                                                                                                                                                                                                    |  | 2006         |             |   | 2005 |  
|Actuarial present value of benefit obligations:                                                                                                                                                                     |  |              |             |   |      |   |             |  
|Projected benefit obligation                                                                                                                                                                                        |  | $            | (14,669,832 | ) |      | $ | (14,183,749 | )
|Fair value of assets held in the plan                                                                                                                                                                               |  |              | 13,879,801  |   |      |   | 13,073,887  |  
|                                                                                                                                                                                                                    |  |              |             |   |      |   |             |  
|Unfunded excess of projected benefit obligation over plan assets                                                                                                                                                    |  |              | (790,031    | ) |      |   | (1,109,862  | )
|Net unrecognized loss from changes in assumptions for weighted average discount rate, expected long-term assets, mortality tables, and other
actuarial assumptions, addition of participants and projected earnings |  |              |            |   |      |   | 3,491,968   |  
|Unamortized prior service cost                                                                                                                                                                                      |  |              |            |   |      |   | (125,710    | )
|                                                                                                                                                                                                                    |  |              |             |   |      |   |             |  
|Accrued pension (liability)/asset included in the balance sheet                                                                                                                                                     |  | $            | (790,031    | ) |      | $ | 2,256,396   |  
|                                                                                                                                                                                                                    |  |              |             |   |      |   |             |  

The following table shows the pre-tax change in accumulated other comprehensive income (loss), a
component of stockholders equity, attributable to the components of net pension expense and reclassification adjustments as a result of adopting SFAS 158:



|                                                          |  |                               |           |   |                                       |   |         |       |  |   |           |  
|--------------------------------------------------------- |  | ----------------------------- | --------- | - | ------------------------------------- | - | ------- | ----- |  | - | --------- | -
|For the year ended December 31, 2006                      |  | UnrecognizedActuarial NetLoss |           |   | UnamortizedPrior ServiceCost/(Credit) |   |         | Total | 
|Accumulated Other Comprehensive Income, beginning of year |  | $                             |          |   |                                       | $ |        |       |  | $ |          |  
|Components of comprehensive income during period:         |  |                               |           |   |                                       |   |         |       |  |   |           |  
|Reclassification for adjustments arising during period    |  |                               | 2,473,289 |   |                                       |   | (58,195 | )     |  |   | 2,415,094 |  
|Amounts recognized in net periodic pension cost           |  |                               | (178,912  | ) |                                       |   | 27,922  |       |  |   | (150,990  | )
|                                                          |  |                               |           |   |                                       |   |         |       |  |   |           |  
|Accumulated Other Comprehensive Income, end of year       |  | $                             | 2,294,377 |   |                                       | $ | (30,273 | )     |  | $ | 2,264,104 |  
|                                                          |  |                               |           |   |                                       |   |         |       |  |   |           |  

The Company uses the straight-line method of amortization for prior service cost and unrecognized
gains and losses. During 2007, the Company expects to expense approximately $78,000 for unrecognized losses and record a credit of $21,000 for prior service costs.

The following table includes a reconciliation of the projected benefit obligation:



|                                               |  |              |            |   |      |   |            |  
|---------------------------------------------- |  | ------------ | ---------- | - | ---- | - | ---------- | -
|                                               |  | December 31, |           
|                                               |  | 2006         |            |   | 2005 |  
|Projected benefit obligation beginning of year |  | $            | 14,183,749 |   |      | $ | 12,624,123 |  
|Service cost                                   |  |              | 841,202    |   |      |   | 793,314    |  
|Interest cost                                  |  |              | 786,553    |   |      |   | 737,433    |  
|Distributions                                  |  |              | (339,108   | ) |      |   | (273,819   | )
|Actuarial (gains)/losses                       |  |              | (805,538   | ) |      |   | 375,413    |  
|Administrative expenses and other              |  |              | 2,974      |   |      |   | (72,715    | )
|                                               |  |              |            |   |      |   |            |  
|Projected benefit obligation end of year       |  | $            | 14,669,832 |   |      | $ | 14,183,749 |  
|                                               |  |              |            |   |      |   |            |  



F-26



---

The Peoples BancTrust Company, Inc and Subsidiary

Notes to Consolidated Financial Statements

December 31, 2006, 2005
and 2004



The following table includes a reconciliation of the fair value of plan assets:



|                               |  |              |            |   |      |   |            |  
|------------------------------ |  | ------------ | ---------- | - | ---- | - | ---------- | -
|                               |  | December 31, |           
|                               |  | 2006         |            |   | 2005 |  
|Fair value  beginning of year |  | $            | 13,073,887 |   |      | $ | 10,701,489 |  
|Contributions                  |  |              |           |   |      |   | 2,336,208  |  
|Return on plan assets          |  |              | 1,209,563  |   |      |   | 382,724    |  
|Distributions                  |  |              | (339,108   | ) |      |   | (273,819   | )
|Administrative expenses        |  |              | (64,541    | ) |      |   | (72,715    | )
|                               |  |              |            |   |      |   |            |  
|Fair value  end of year       |  | $            | 13,879,801 |   |      | $ | 13,073,887 |  
|                               |  |              |            |   |      |   |            |  

The following table sets forth the assumptions used to compute the estimated pension liability:



|                                                              |  |              |   |  |      |  
|------------------------------------------------------------- |  | ------------ | - |  | ---- | -
|                                                              |  | December 31, |  
|                                                              |  | 2006         |   |  | 2005 |  
|Weighted average discount rate - projected benefit obligation |  | 6.00         | % |  | 5.75 | %
|Increase in future compensation levels                        |  | 5.00         | % |  | 5.00 | %
|Expected long-term rate of return                             |  | 7.50         | % |  | 7.50 | %

In consultation with the plans investment management company and actuary, the Company, as
plan sponsor, arrives at an assumption for the expected long-term rate of return on plan assets. This rate is intended to reflect the average rate of earnings expected on funds invested given funding obligations, future compensation levels, and
inflation. The expected long-term rate of return is not necessarily a reflection of recent experience but rather a historical estimate of future long-term rates of return. Anticipated returns for the plan are not reduced by taxes and assume the plan
continues in place for the foreseeable future.

The Company reviews the plans asset allocation and investment mix at least annually.
Plan assets may be invested in a mix of the following major classes: equity  large cap growth; equity  small cap value; equity  international; intermediate bond; and money market. Investment strategies are based, in part, on the
Companys overall assessment of the state of the economy and its assumed direction, the Federal Reserve Boards bias in setting monetary policy, fiscal policy and its projected impact, and the direction of short and long-term interest
rates. Investment strategies are guided by an investment policy that calls for comparing the investment performance of the investment management company to an appropriate benchmark. This evaluation is conducted over a three-year horizon and also
considers the investment managers performance relative to their discipline.

The expected benefit payments by year to plan
participants are as follows:



|                  |  |   |          
|----------------- |  | - | ---------
|2007              |  | $ | 587,959  
|2008              |  |   | 682,366  
|2009              |  |   | 728,014  
|2010              |  |   | 805,975  
|2011              |  |   | 825,359  
|2012 through 2016 |  |   | 5,770,514
|                  |  |   |          
|                  |  | $ | 9,400,187
|                  |  |   |          



F-27



---

The Peoples BancTrust Company, Inc and Subsidiary

Notes to Consolidated Financial Statements

December 31, 2006, 2005
and 2004



The Company did not contribute to the plan in 2006, but contributed $2,336,208 to the plan in 2005.
The Company does not expect to make any contributions to the plan in 2007.

The incremental effect of applying SFAS 158 on individual items
on the Companys Consolidated Balance Sheet at December 31, 2006 is an increase in pension liabilities of $2,264,104, an increase in deferred tax assets of $835,454 and a decrease in stockholders equity of $1,428,650.

Executive Retirement Plans

During
2001, the Company adopted a non-qualified Executive Supplemental Retirement Plan (the Executive Plan) and entered into agreements with certain executive officers under which the Company will make payments to the executives upon their retirement, or
to the executives beneficiaries upon their death. The Executive Plan supplements the benefits payable to the executives under the Pension Plan, and is based upon the accumulated after-tax income from specified life insurance contracts. Cash
values of the underlying life insurance contracts, of which the Company is the sole beneficiary, were approximately $1,708,929 and $1,655,000 at December 31, 2006 and 2005, respectively. In August of 2006, the Company began making payments to
one of the beneficiaries upon his attainment of age 65. Accrued benefits under the Executive Plan were approximately $238,000 and $230,000 at December 31, 2006 and 2005, respectively. The expense of this plan charged to operations was $20,748,
$23,548 and $23,662 for the years ended December 31, 2006, 2005 and 2004.

Employee Benefit Plan

Effective January 1, 1998, the Company established a qualified employee benefit plan under Section 401(k) of the Internal Revenue Code covering
substantially all employees. Employees can contribute up to 15 percent of their salary to the plan on a pre-tax basis and the Company matches participants contributions up to the first 1.5 percent of each participants salary. The
Companys matching contribution charged to operations related to this plan was approximately $112,000, $109,000 and $93,000 for the years ended December 31, 2006, 2005 and 2004 respectively.

Employee Stock Ownership Plan

During
1987, the Company established an Employee Stock Ownership Plan (ESOP), a tax-qualified, defined contribution plan which covers substantially all employees. Contributions are determined by the Board of Directors of the Company. No Contributions were
made to the ESOP by the Company for any of the years 2006, 2005 and 2004. The ESOP held 63,517 and 72,088 shares of common stock in the Company at December 31, 2006 and 2005, respectively.



|13. | Noninterest expense
|--- | -------------------

Components of other
noninterest expense that exceed 1% of total revenue for each of the years ended December 31, 2006, 2005 and 2004 are as follows:



|                                                         |  |      |           |      |   |           |  |   |          
|-------------------------------------------------------- |  | ---- | --------- | ---- | - | --------- |  | - | ---------
|                                                         |  | 2006 |           | 2005 |   | 2004     
|Losses on sales or other real estate owned, net of gains |  | $    |          |      | $ |          |  | $ | 225,250  
|Loss on loan sale                                        |  |      |          |      |   |          |  |   | 550,549  
|All other items of noninterest expense                   |  |      | 6,937,805 |      |   | 7,301,540 |  |   | 7,032,945
|                                                         |  |      |           |      |   |           |  |   |          
|Total other noninterest expense                          |  | $    | 6,937,805 |      | $ | 7,301,540 |  | $ | 7,808,744
|                                                         |  |      |           |      |   |           |  |   |          



F-28



---

The Peoples BancTrust Company, Inc and Subsidiary

Notes to Consolidated Financial Statements

December 31, 2006, 2005
and 2004



|14. | Commitments and Contingencies
|--- | -----------------------------

The Bank leases
certain buildings, equipment and land under noncancelable operating leases which require various minimum annual rentals.

The total minimum
rental commitment at December 31, 2006 under the leases is as follows:



|     |  |   |          
|---- |  | - | ---------
|2007 |  | $ | 616,232  
|2008 |  |   | 355,950  
|2009 |  |   | 169,831  
|2010 |  |   | 111,497  
|2011 |  |   | 70,990   
|     |  |   |          
|     |  | $ | 1,324,500
|     |  |   |          

The total rental expense was approximately $643,000, $539,000, and $535,000 in 2006, 2005, and
2004, respectively.

The Company is from time to time a defendant in legal actions from normal business activities. Management does not
anticipate that the ultimate liability arising from litigation outstanding at December 31, 2006 will have a materially adverse effect on the Companys financial statements.



|15. | Related Party Transactions
|--- | --------------------------

Certain directors and
officers of the Company and its subsidiary bank, including their immediate families and companies in which they are principal owners, were loan customers of the Bank in the ordinary course of business. Such loans had outstanding balances of
$5,024,560 and $3,324,154 at December 31, 2006 and 2005, respectively. A summary of the loan activity with these related parties during 2006 is shown below:



|                           |  |   |            |  
|-------------------------- |  | - | ---------- | -
|Balance, beginning of year |  | $ | 3,324,154  |  
|Additions                  |  |   | 4,265,307  |  
|Reductions                 |  |   | (2,529,826 | )
|Change in related parties  |  |   | (35,075    | )
|                           |  |   |            |  
|Balance, end of year       |  | $ | 5,024,560  |  
|                           |  |   |            |  

During 2006, 2005, and 2004, the Company paid legal fees of approximately $175,000, $120,000, and
$146,000, respectively, to a law firm in which a partner of the firm serves on the board of directors of the Company.



F-29



---

The Peoples BancTrust Company, Inc and Subsidiary

Notes to Consolidated Financial Statements

December 31, 2006, 2005
and 2004



|16. | Earnings Per Share
|--- | ------------------

The following table reflects
the reconciliation of the numerator and denominator of the basic EPS computation to the numerator and denominator of the diluted EPS computation:



|                                        |  |        |           |        |           |                 |   |     
|--------------------------------------- |  | ------ | --------- | ------ | --------- | --------------- | - | ----
|                                        |  | Income |           | Shares |           | Per-ShareAmount
|For the year ended December 31, 2006    |  |        |           |        |           |                 |   |     
|Basic EPS                               |  |        |           |        |           |                 |   |     
|Income available to common stockholders |  | $      | 8,079,646 |        | 5,904,912 |                 | $ | 1.37
|                                        |  |        |           |        |           |                 |   |     
|Effect of dilutive securities           |  |        |           |        |           |                 |   |     
|Stock options                           |  |        |           |        | 48,850    |                 |   |     
|                                        |  |        |           |        |           |                 |   |     
|Diluted EPS                             |  | $      | 8,079,646 |        | 5,953,762 |                 | $ | 1.36
|                                        |  |        |           |        |           |                 |   |     
|For the year ended December 31, 2005    |  |        |           |        |           |                 |   |     
|Basic EPS                               |  |        |           |        |           |                 |   |     
|Income available to common stockholders |  | $      | 6,536,766 |        | 5,805,644 |                 | $ | 1.13
|                                        |  |        |           |        |           |                 |   |     
|Effect of dilutive securities           |  |        |           |        |           |                 |   |     
|Stock options                           |  |        |           |        | 26,640    |                 |   |     
|                                        |  |        |           |        |           |                 |   |     
|Diluted EPS                             |  | $      | 6,536,766 |        | 5,832,284 |                 | $ | 1.12
|                                        |  |        |           |        |           |                 |   |     
|For the year ended December 31, 2004    |  |        |           |        |           |                 |   |     
|Basic EPS                               |  |        |           |        |           |                 |   |     
|Income available to common stockholders |  | $      | 6,042,096 |        | 5,574,190 |                 | $ | 1.08
|                                        |  |        |           |        |           |                 |   |     
|Effect of dilutive securities           |  |        |           |        |           |                 |   |     
|Stock options                           |  |        |           |        | 18,850    |                 |   |     
|                                        |  |        |           |        |           |                 |   |     
|Diluted EPS                             |  | $      | 6,042,096 |        | 5,593,040 |                 | $ | 1.08
|                                        |  |        |           |        |           |                 |   |     



|17. | Regulatory Matters
|--- | ------------------

The approval of regulatory
authorities is required if the total of all the dividends declared by the Bank in any calendar year exceeds the Banks net income as defined for that year combined with its retained net income for the preceding two calendar years. When
necessary, the Bank obtained regulatory approval as applicable for the payment of dividends in 2006, 2005, and 2004.

The Company is subject
to various regulatory capital requirements administered by the federal banking agencies. Failure to meet minimum capital requirements can initiate certain mandatory - and possibly additional discretionary - actions by regulators that, if undertaken,
could have a direct material effect on the Companys financial statements. Under capital adequacy guidelines and the regulatory framework for prompt corrective action, the Company must meet specific capital guidelines that involve quantitative
measures of the Companys assets, liabilities, and certain off-balance-sheet items as calculated under regulatory accounting practices. The Companys capital amounts and classification are also subject to qualitative judgments by the
regulators about components, risk weightings, and other factors.

Quantitative measures established by regulation to ensure capital adequacy
require the Company to maintain minimum amounts and ratios (set forth in the table below) of total and Tier I capital (as defined in the regulations) to risk-weighted assets (as defined), and of Tier I capital (as defined) to average assets (as
defined). Management believes, as of December 31, 2006, that the Company meets all capital adequacy requirements to which it is subject.



F-30



---

The Peoples BancTrust Company, Inc and Subsidiary

Notes to Consolidated Financial Statements

December 31, 2006, 2005
and 2004



As of December 31, 2006, the most recent notification from the Federal Deposit Insurance
Corporation, categorized the Company as well capitalized under the regulatory framework for prompt corrective action. To be categorized as well capitalized, the Company must maintain minimum total risk-based, Tier I risk-based, and Tier I capital
ratios as set forth in the table below. There are no conditions or events since that notification that management believes have changed the institutions category.

The Companys and the Banks actual capital amounts and ratios are also presented in the following table.



|                                         |  |             |  |       |                               |  |                        |                                                               |       |   |  |        |  |       |  
|---------------------------------------- |  | ----------- |  | ----- | ----------------------------- |  | ---------------------- | ------------------------------------------------------------- | ----- | - |  | ------ |  | ----- | -
|                                         |  | The Company | 
|                                         |  | Actual      |  |       | For Capital Adequacy Purposes |  |                        | To Be WellCapitalized UnderPrompt CorrectiveAction Provisions |      
|                                         |  | Amount      |  | Ratio |                               |  | Amount                 |                                                               | Ratio |   |  | Amount |  | Ratio |  
|                                         |  |             |  |       |                               |  | (dollars in thousands) |                                                               |       |   |  |        | 
|As of December 31, 2006                  |  |             |  |       |                               |  |                        |                                                               |       |   |  |        |  |       |  
|Total Capital (to Risk Weighted Assets)  |  | 91,078      |  | 12.89 | %                             |  | 56,546                 |                                                               | 8.00  | % |  | 70,682 |  | 10.00 | %
|Tier 1 Capital (to Risk Weighted Assets) |  | 84,679      |  | 11.98 | %                             |  | 28,273                 |                                                               | 4.00  | % |  | 42,409 |  | 6.00  | %
|Tier 1 Capital (to Average Assets)       |  | 84,679      |  | 9.55  | %                             |  | 35,462                 |                                                               | 4.00  | % |  | 44,327 |  | 5.00  | %
|As of December 31, 2005                  |  |             |  |       |                               |  |                        |                                                               |       |   |  |        |  |       |  
|Total Capital (to Risk Weighted Assets)  |  | 85,178      |  | 14.51 | %                             |  | 46,962                 |                                                               | 8.00  | % |  | 58,703 |  | 10.00 | %
|Tier 1 Capital (to Risk Weighted Assets) |  | 78,521      |  | 13.38 | %                             |  | 23,481                 |                                                               | 4.00  | % |  | 35,222 |  | 6.00  | %
|Tier 1 Capital (to Average Assets)       |  | 78,521      |  | 9.85  | %                             |  | 31,903                 |                                                               | 4.00  | % |  | 39,878 |  | 5.00  | %
|                                         | 
|                                         |  | The Bank    | 
|                                         |  | Actual      |  |       | For Capital Adequacy Purposes |  |                        | To Be WellCapitalized UnderPrompt CorrectiveAction Provisions |      
|                                         |  | Amount      |  | Ratio |                               |  | Amount                 |                                                               | Ratio |   |  | Amount |  | Ratio |  
|                                         |  |             |  |       |                               |  | (dollars in thousands) |                                                               |       |   |  |        | 
|As of December 31, 2006                  |  |             |  |       |                               |  |                        |                                                               |       |   |  |        |  |       |  
|Total Capital (to Risk Weighted Assets)  |  | 84,939      |  | 12.04 | %                             |  | 56,418                 |                                                               | 8.00  | % |  | 70,522 |  | 10.00 | %
|Tier 1 Capital (to Risk Weighted Assets) |  | 78,540      |  | 11.14 | %                             |  | 28,209                 |                                                               | 4.00  | % |  | 42,313 |  | 6.00  | %
|Tier 1 Capital (to Average Assets)       |  | 78,540      |  | 8.98  | %                             |  | 34,969                 |                                                               | 4.00  | % |  | 43,711 |  | 5.00  | %
|As of December 31, 2005                  |  |             |  |       |                               |  |                        |                                                               |       |   |  |        |  |       |  
|Total Capital (to Risk Weighted Assets)  |  | 79,277      |  | 13.68 | %                             |  | 46,353                 |                                                               | 8.00  | % |  | 57,941 |  | 10.00 | %
|Tier 1 Capital (to Risk Weighted Assets) |  | 72,620      |  | 12.53 | %                             |  | 23,177                 |                                                               | 4.00  | % |  | 34,765 |  | 6.00  | %
|Tier 1 Capital (to Average Assets)       |  | 72,620      |  | 9.19  | %                             |  | 31,619                 |                                                               | 4.00  | % |  | 39,524 |  | 5.00  | %



|18. | Financial Instruments With Off-Balance-Sheet Risk
|--- | -------------------------------------------------

The Bank is party to financial instruments with off-balance-sheet risk in the normal course of business to meet the financing needs of its customers. These financial instruments include commitments to extend credit and standby letters of
credit. Those instruments involve, to varying degrees, elements of credit and interest rate risk in excess of the amount recognized in the consolidated statements of financial condition. The contract amounts of those instruments reflect the extent
of involvement the Bank has in particular classes of financial instruments.

The Banks exposure to credit loss in the event of
nonperformance by the counterparty to the financial instrument for commitments to extend credit and standby letters of credit is represented by the contractual amount of those instruments. The Bank uses the same credit policies in making commitments
and conditional obligations as it does for on-balance-sheet instruments.



F-31



---

The Peoples BancTrust Company, Inc and Subsidiary

Notes to Consolidated Financial Statements

December 31, 2006, 2005
and 2004



Commitments to extend credit are agreements to lend to a customer as long as there is no violation of
any condition established in the contract. Commitments generally have fixed expiration dates or other termination clauses and may require payment of a fee. Since many of the commitments are expected to expire without being drawn upon, the total
commitment amounts do not necessarily represent future cash requirements. The Bank had approximately $108,060,000 and $104,280,000 in commitments to extend credit at December 31, 2006 and 2005, respectively. The Bank evaluates each
customers credit worthiness on a case-by-case basis. The amount of collateral obtained if deemed necessary by the Bank upon extension of credit is based on managements credit evaluation of the customer. Collateral held varies, but may
include certificates of deposit, marketable securities, real estate, and other collateral.

Irrevocable standby letters of credit are
conditional commitments issued by the Bank to guarantee the performance of a customer to a third party. Those guarantees are primarily issued to support public and private borrowing arrangements, including commercial paper, bond financing and
similar transactions. The credit risk involved in issuing letters of credit is essentially the same as that involved in extending loan facilities to customers. The collateral varies but may include certificates of deposit, marketable securities,
real estate, and other collateral for those commitments for which collateral is deemed necessary. The Bank had approximately $21,406,000 and $23,218,000 in irrevocable standby letters of credit at December 31, 2006 and 2005, respectively.



|19. | Fair Value of Financial Instruments
|--- | -----------------------------------

The following
methods and assumptions were used to estimate the fair value of each class of financial instruments for which it is practicable to estimate that value:

Cash and Cash Equivalents

For those short-term instruments, the carrying amount is a reasonable
estimate of fair value.

Securities Available for Sale

For debt securities and marketable equity securities, fair values are based on quoted market prices or dealer quotes.

Loans

The fair value of loans is estimated by discounting the future cash flows using the current
rates at which similar loans would be made to borrowers with similar credit ratings and for the same remaining maturities.

Interest
Receivable

For interest receivable, the carrying amount is a reasonable estimate of fair value.

Cash Surrender Value of Life Insurance

For cash surrender value of life insurance, the carrying amount is a reasonable estimate of fair value.



F-32



---

The Peoples BancTrust Company, Inc and Subsidiary

Notes to Consolidated Financial Statements

December 31, 2006, 2005
and 2004



Deposits

The fair value of demand deposits, savings accounts, and certain money market deposits is the amount payable on demand at the reporting date. The fair value of fixed-maturity certificates of deposit is estimated using
the rates currently offered for deposits of similar remaining maturities.

Borrowed Funds

The fair value of this debt is estimated based on rates currently available to the Company for borrowings with similar terms and remaining maturities.

Interest Payable

For
interest payable, the carrying amount is a reasonable estimate of fair value.

Derivatives

Interest rate floors are recorded on the balance sheet at fair value, based on dealer quoted prices.

Commitments to Extend Credit and Irrevocable Standby Letters of Credit

The value of these unrecognized financial instruments is estimated based on the deferred fee income associated with the commitments. Such fee income is
not material to the Companys financial statements at December 31, 2006 and 2005 and therefore, the fair value of these commitments is not presented.

The estimated fair values of the Companys financial instruments at December 31, 2006 and 2005 are as follows:



|                                       |  |                |             |            |   |                |  |            |             |  |   |            
|-------------------------------------- |  | -------------- | ----------- | ---------- | - | -------------- |  | ---------- | ----------- |  | - | -----------
|                                       |  | 2006           |             | 2005      
|                                       |  | CarryingAmount |             | Fair Value |   | CarryingAmount |  | Fair Value
|Financial assets:                      |  |                |             |            |   |                |  |            |             |  |   |            
|Cash and cash equivalents              |  | $              | 27,454,618  |            | $ | 27,454,618     |  | $          | 48,584,685  |  | $ | 48,584,685 
|Investment securities:                 |  |                |             |            |   |                |  |            |             |  |   |            
|Available for sale                     |  |                | 204,601,608 |            |   | 204,601,608    |  |            | 226,043,483 |  |   | 226,043,483
|Loans                                  |  |                | 625,401,127 |            |   | 617,324,044    |  |            | 488,854,742 |  |   | 486,505,414
|Interest receivable                    |  |                | 4,947,193   |            |   | 4,947,193      |  |            | 3,921,347   |  |   | 3,921,347  
|Cash surrender value of life insurance |  |                | 9,406,583   |            |   | 9,406,584      |  |            | 9,050,852   |  |   | 9,050,852  
|                                       |  |                |             |            |   |                |  |            |             |  |   |            
|                                       |  | $              | 871,811,129 |            | $ | 863,734,047    |  | $          | 776,455,109 |  | $ | 774,105,781
|                                       |  |                |             |            |   |                |  |            |             |  |   |            
|Financial liabilities:                 |  |                |             |            |   |                |  |            |             |  |   |            
|Deposits                               |  | $              | 768,701,101 |            | $ | 772,823,930    |  | $          | 688,049,381 |  | $ | 686,765,892
|Borrowed funds                         |  |                | 48,267,635  |            |   | 48,328,385     |  |            | 37,732,458  |  |   | 38,897,392 
|Interest payable                       |  |                | 3,467,965   |            |   | 3,467,965      |  |            | 2,176,197   |  |   | 2,176,197  
|                                       |  |                |             |            |   |                |  |            |             |  |   |            
|                                       |  | $              | 820,436,701 |            | $ | 824,620,280    |  | $          | 727,958,036 |  | $ | 727,839,481
|                                       |  |                |             |            |   |                |  |            |             |  |   |            
|Derivatives:                           |  |                |             |            |   |                |  |            |             |  |   |            
|Interest rate floor                    |  | $              | 160,000     |            | $ | 160,000        |  | $          |            |  | $ |           
|                                       |  |                |             |            |   |                |  |            |             |  |   |            



F-33



---

The Peoples BancTrust Company, Inc and Subsidiary

Notes to Consolidated Financial Statements

December 31, 2006, 2005
and 2004



|20. | Stock Based Compensation
|--- | ------------------------

Stock Options

As of December 31, 2006, the Company has one stock-based compensation plan that allows for grants of incentive stock options and
nonqualified stock options. The plan permits the granting of stock options up to 550,000 shares of common stock. Under the plan, stock options granted generally have an exercise price no less than the fair market value of the underlying stock at the
date of grant. The general terms of the plan include a vesting period (usually up to five years) with an exercisable period not to exceed ten years. Dividends are not paid on unexercised options and dividends are not subject to vesting. Option
awards provide for accelerated vesting if there is a change in control (as defined in the plan). As of December 31, 2006, approximately 382,000 additional stock options could be granted under the plan.

The fair value of each stock option award is estimated on the date of grant using a Black-Scholes-Merton valuation model that uses the assumptions noted
in the following table. Expected volatilities are based on the historic price fluctuations of the common stock of the Company for given periods. The expected term of options granted is based on the short-cut method and represents the period of time
that options granted are expected to be outstanding. The risk-free rate for periods within the contractual life of the option is based on the U.S. Treasury yield curve in effect at the time of grant. Expected forfeiture rates, if any, are based upon
historical experiences.



|                            |  |                          |   |  |      |  
|--------------------------- |  | ------------------------ | - |  | ---- | -
|                            |  | Years Ended December 31, |  
|                            |  | 2006                     |   |  | 2005 |  
|Dividend yield              |  | 2.5                      | % |  | 2.4  | %
|Weighted-average volatility |  | 22.2                     | % |  | 22.6 | %
|Expected life in years      |  | 5.0                      |   |  | 4.0  |  
|Risk-free interest rate     |  | 4.9                      | % |  | 4.6  | %

The weighted-average grant-date fair value of options granted during the years ended
December 31, 2006 and 2005 was $4.14 and $2.94 respectively. No options were granted in 2004. The fair value of restricted stock grants is determined based on the closing price of the Companys shares on the grant date.



F-34



---

The Peoples BancTrust Company, Inc and Subsidiary

Notes to Consolidated Financial Statements

December 31, 2006, 2005
and 2004



A summary of stock option activity under the Plan as of December 31, 2006, 2005 and 2004 and
changes during the years then ended is presented below:



|                                 |  |         |   |  |                               |       |                                               |      |                         |   |          
|-------------------------------- |  | ------- | - |  | ----------------------------- | ----- | --------------------------------------------- | ---- | ----------------------- | - | ---------
|                                 |  | Shares  |   |  | WeightedAverageExercise Price |       | WeightedAverageRemainingContractualTerm (yrs) |      | AggregateIntrinsicValue
|Outstanding at January 1, 2006   |  | 170,410 |   |  | $                             | 14.83 |                                               |      |                         |   |          
|Granted                          |  | 111,000 |   |  |                               | 18.88 |                                               |      |                         |   |          
|Exercised                        |  | (14,830 | ) |  |                               | 13.33 |                                               |      |                         |   |          
|Expired / forfeited              |  | (1,000  | ) |  |                               | 18.50 |                                               |      |                         |   |          
|                                 |  |         |   |  |                               |       |                                               |      |                         |   |          
|Outstanding at December 31, 2006 |  | 265,580 |   |  | $                             | 16.59 |                                               | 7.02 |                         | $ | 2,366,333
|                                 |  |         |   |  |                               |       |                                               |      |                         |   |          
|Vested at December 31, 2006      |  | 155,580 |   |  | $                             | 14.97 |                                               | 5.34 |                         | $ | 1,637,998
|                                 |  |         |   |  |                               |       |                                               |      |                         |   |          
|Outstanding at January 1, 2005   |  | 137,610 |   |  | $                             | 14.10 |                                               |      |                         |   |          
|Granted                          |  | 50,000  |   |  |                               | 15.38 |                                               |      |                         |   |          
|Exercised                        |  | (6,160  | ) |  |                               | 9.03  |                                               |      |                         |   |          
|Expired / forfeited              |  | (11,040 | ) |  |                               | 11.46 |                                               |      |                         |   |          
|                                 |  |         |   |  |                               |       |                                               |      |                         |   |          
|Outstanding at December 31, 2005 |  | 170,410 |   |  | $                             | 14.83 |                                               | 6.03 |                         | $ | 790,702  
|                                 |  |         |   |  |                               |       |                                               |      |                         |   |          
|Vested at December 31, 2005      |  | 120,410 |   |  | $                             | 14.60 |                                               | 4.51 |                         | $ | 586,397  
|                                 |  |         |   |  |                               |       |                                               |      |                         |   |          
|Outstanding at January 1, 2004   |  | 154,114 |   |  | $                             | 13.51 |                                               |      |                         |   |          
|Granted                          |  |        |   |  |                               |       |                                               |      |                         |   |          
|Exercised                        |  | (7,964  | ) |  |                               | 12.04 |                                               |      |                         |   |          
|Expired / forfeited              |  | (8,540  | ) |  |                               | 5.37  |                                               |      |                         |   |          
|                                 |  |         |   |  |                               |       |                                               |      |                         |   |          
|Outstanding at December 31, 2004 |  | 137,610 |   |  | $                             | 14.10 |                                               | 5.33 |                         | $ | 273,844  
|                                 |  |         |   |  |                               |       |                                               |      |                         |   |          
|Vested at December 31, 2004      |  | 137,610 |   |  | $                             | 14.10 |                                               | 5.33 |                         | $ | 273,844  
|                                 |  |         |   |  |                               |       |                                               |      |                         |   |          

Total intrinsic value of options exercised was $83,964, $49,218 and $33,767 for the years ended
December 31, 2006, 2005 and 2004, respectively. The total fair value of options vested during the years ended December 31, 2006, 2005 and 2004 was $147,000, $0 and $82,369, respectively.

The compensation cost charged against income for the years ended December 31, 2006, 2005 and 2004 were $240,308, $0 and $0, respectively, for
BancTrusts stock option plan. Income tax benefits recognized for the respective years were $51,464, $0 and $0.

Cash received from the
exercise of options was $120,325 for the year ended December 31, 2006. The tax benefit realized for the tax deductions from option exercise of the share-based payment arrangements totaled $15,640 for the year ended December 31, 2006.

As of December 31, 2006, there was $366,651 of total unrecognized compensation cost related to the nonvested share based compensation
arrangements granted under the option plan. That cost is expected to be recognized over a weighted-average period of 2.2 years.



F-35



---

The Peoples BancTrust Company, Inc and Subsidiary

Notes to Consolidated Financial Statements

December 31, 2006, 2005
and 2004



Restricted Stock

On September 1, 2006, BancTrusts President and Chief Executive Officer was awarded 6,000 shares of restricted common stock, with an aggregate fair market value of $19.135 per share. The restricted stock
will vest in one-third increments (2,000 shares) on September 1, 2007, 2008 and 2009. The total expense associated with this grant of $114,810 will be recognized over the three year period. As of December 31, 2006, $12,757 was charged as
compensation cost against income related to this grant. The unamortized balance of the fair value of the restricted stock grant has been recorded as deferred stock based compensation in the equity section of the consolidated balance sheets.

As of December 31, 2005, $92,250 was recorded in deferred stock based compensation in the equity section of the consolidated balance
sheets related to a grant of 6,000 shares of restricted stock to BancTrusts former President and Chief Executive Officer. On May 2, 2006, this restricted stock award became fully vested upon his death. Accordingly, BancTrust recognized
$92,250 of related expense associated with this grant.



|21. | Dividend Reinvestment and Share Purchase Plan
|--- | ---------------------------------------------

In
1998, the Company adopted a dividend reinvestment and share purchase plan. Under the plan, all holders of record of common stock are eligible to participate in the plan. Participants in the plan may direct the plan administrator to invest cash
dividends declared with respect to all or any portion of their common stock. Participants may also make optional cash payments that will be invested through the plan. All cash dividends paid to the plan administrator are invested within 30 days of
cash dividend payment date. Cash dividends and optional cash payments will be used to purchase common stock of the Company in the open market, from newly-issued shares, from shares held in treasury, in negotiated transactions, or in any combination
of the foregoing. The purchase price of the shares of common stock is based on the average market price for a specified period of time immediately preceding the dividend payment date. All administrative costs are borne by the Company. No shares were
purchased under the plan in 2006. In 2005, 13,704 shares were purchased under the plan.



|22. | The Peoples BancTrust Company, Inc. (Parent Company Only)
|--- | ---------------------------------------------------------

Presented below and on the following pages are the financial statements of The Peoples BancTrust Company, Inc. (parent company only).



F-36



---

The Peoples BancTrust Company, Inc and Subsidiary

Notes to Consolidated Financial Statements

December 31, 2006, 2005
and 2004



BALANCE SHEETS

December 31, 2006 and 2005



|                                                                                                                                             |  |      |            |   |      |   |            |  
|-------------------------------------------------------------------------------------------------------------------------------------------- |  | ---- | ---------- | - | ---- | - | ---------- | -
|                                                                                                                                             |  | 2006 |            |   | 2005 |  
|Assets                                                                                                                                       |  |      |            |   |      |   |            |  
|Cash and due from banks (1)                                                                                                                  |  | $    | 462,133    |   |      | $ | 288,740    |  
|Available-for-sale securities                                                                                                                |  |      | 4,995,327  |   |      |   | 4,991,667  |  
|Investment in subsidiary bank, The Peoples Bank and Trust Company (2)                                                                        |  |      | 80,655,943 |   |      |   | 75,650,243 |  
|Other assets                                                                                                                                 |  |      | 907,144    |   |      |   | 843,777    |  
|                                                                                                                                             |  |      |            |   |      |   |            |  
|Total assets                                                                                                                                 |  | $    | 87,020,547 |   |      | $ | 81,774,427 |  
|                                                                                                                                             |  |      |            |   |      |   |            |  
|Liabilities and Stockholders Equity                                                                                                         |  |      |            |   |      |   |            |  
|Other liabilities                                                                                                                            |  |      | 226,757    |   |      |   | 223,036    |  
|Common stock, $.10 par value; 9,000,000 shares authorized; 5,917,592 and 5,895,316 shares issued at December 31, 2006 and 2005,
respectively |  |      | 591,759    |   |      |   | 589,532    |  
|Tresury stock                                                                                                                                |  |      |           |   |      |   | (90,688    | )
|Additional paid-in capital                                                                                                                   |  |      | 17,199,913 |   |      |   | 16,586,341 |  
|Accumulated, other comprehensive (loss) income, net of tax                                                                                   |  |      | (4,149,908 | ) |      |   | (3,448,847 | )
|Deferred stock based compensation                                                                                                            |  |      | (102,053   | ) |      |   | (92,250    | )
|Retained earnings                                                                                                                            |  |      | 73,254,079 |   |      |   | 68,007,303 |  
|                                                                                                                                             |  |      |            |   |      |   |            |  
|Total stockholders equity                                                                                                                   |  |      | 86,793,789 |   |      |   | 81,551,391 |  
|                                                                                                                                             |  |      |            |   |      |   |            |  
|Total liabilities and stockholders equity                                                                                                   |  | $    | 87,020,547 |   |      | $ | 81,774,427 |  
|                                                                                                                                             |  |      |            |   |      |   |            |  



|(1) | $174,780 eliminated in consolidation 2006 and $188,823 eliminated in consolidation 2005
|--- | ---------------------------------------------------------------------------------------



|(2) | Eliminated in consolidation
|--- | ---------------------------



F-37



---

The Peoples BancTrust Company, Inc and Subsidiary

Notes to Consolidated Financial Statements

December 31, 2006, 2005
and 2004



STATEMENTS OF INCOME AND RETAINED EARNINGS

For the Years Ended December 31, 2006, 2005 and 2004



|                                                          |  |      |            |   |      |   |            |      |  |   |            |  
|--------------------------------------------------------- |  | ---- | ---------- | - | ---- | - | ---------- | ---- |  | - | ---------- | -
|                                                          |  | 2006 |            |   | 2005 |   |            | 2004 | 
|Cash dividends received or receivable from subsidiary (1) |  | $    | 3,350,000  |   |      | $ | 3,290,000  |      |  | $ | 4,200,000  |  
|Equity in subsidiarys undistributed net income (1)       |  |      | 5,617,359  |   |      |   | 4,245,929  |      |  |   | 3,500,042  |  
|Interest income on U.S. Government investment securities  |  |      | 201,013    |   |      |   | 123,875    |      |  |   |           |  
|Other income                                              |  |      | 36,271     |   |      |   | 23,446     |      |  |   | 20,103     |  
|Salaries and benefits                                     |  |      | (483,084   | ) |      |   | (806,167   | )    |  |   | (1,331,000 | )
|Stock based compensation                                  |  |      | (345,315   | ) |      |   |           |      |  |   |           |  
|Other expenses                                            |  |      | (296,598   | ) |      |   | (340,317   | )    |  |   | (347,049   | )
|                                                          |  |      |            |   |      |   |            |      |  |   |            |  
|Net income                                                |  |      | 8,079,646  |   |      |   | 6,536,766  |      |  |   | 6,042,096  |  
|Retained earnings, beginning of year                      |  |      | 68,007,303 |   |      |   | 64,025,210 |      |  |   | 60,434,189 |  
|Less: cash dividends declared                             |  |      | (2,832,871 | ) |      |   | (2,554,673 | )    |  |   | (2,451,075 | )
|                                                          |  |      |            |   |      |   |            |      |  |   |            |  
|Retained earnings, end of year                            |  | $    | 73,254,079 |   |      | $ | 68,007,303 |      |  | $ | 64,025,210 |  
|                                                          |  |      |            |   |      |   |            |      |  |   |            |  



|(1) | Eliminated in consolidation
|--- | ---------------------------



F-38



---

The Peoples BancTrust Company, Inc and Subsidiary

Notes to Consolidated Financial Statements

December 31, 2006, 2005
and 2004



STATEMENTS OF CASH FLOWS

For the Years Ended December 31, 2006, 2005 and 2004



|                                                                                  |  |      |            |   |      |   |            |      |  |   |            |  
|--------------------------------------------------------------------------------- |  | ---- | ---------- | - | ---- | - | ---------- | ---- |  | - | ---------- | -
|                                                                                  |  | 2006 |            |   | 2005 |   |            | 2004 | 
|Operating activities                                                              |  |      |            |   |      |   |            |      |  |   |            |  
|Net income                                                                        |  | $    | 8,079,646  |   |      | $ | 6,536,776  |      |  | $ | 6,042,096  |  
|Adjustments to reconcile net income to net cash provided by operating activities: |  |      |            |   |      |   |            |      |  |   |            |  
|Subsidiary income in excess of dividends (1)                                      |  |      | (5,617,359 | ) |      |   | (4,245,929 | )    |  |   | (3,500,042 | )
|Accretion                                                                         |  |      | (17,680    | ) |      |   | (16,667    | )    |  |   |           |  
|Stock based compensation                                                          |  |      | 345,315    |   |      |   |           |      |  |   |           |  
|Decrease (increase) in other assets                                               |  |      | (152,768   | ) |      |   | (93,798    | )    |  |   | 9,275      |  
|Minimum required contributions to defined benefits pension plan                   |  |      |           |   |      |   |           |      |  |   | (1,008,624 | )
|Increase (decrease) in other liabilities                                          |  |      | 3,721      |   |      |   | (15,234    | )    |  |   | 876,770    |  
|                                                                                  |  |      |            |   |      |   |            |      |  |   |            |  
|Net cash provided by operating activities                                         |  |      | 2,640,875  |   |      |   | 2,165,138  |      |  |   | 2,419,475  |  
|                                                                                  |  |      |            |   |      |   |            |      |  |   |            |  
|Investing activities                                                              |  |      |            |   |      |   |            |      |  |   |            |  
|Purchase of available for sale securities                                         |  |      | (1,985,980 | ) |      |   | (4,975,000 | )    |  |   |           |  
|Proceeds from maturities and calls of available for sale securities               |  |      | 2,000,000  |   |      |   |           |      |  |   |           |  
|Land purchased                                                                    |  |      |           |   |      |   |           |      |  |   | (1,003,247 | )
|                                                                                  |  |      |            |   |      |   |            |      |  |   |            |  
|Net cash provided by (used in) investing activities                               |  |      | 14,020     |   |      |   | (4,975,000 | )    |  |   | (1,003,247 | )
|                                                                                  |  |      |            |   |      |   |            |      |  |   |            |  
|Financing activities                                                              |  |      |            |   |      |   |            |      |  |   |            |  
|Dividends paid                                                                    |  |      | (2,622,385 | ) |      |   | (2,355,290 | )    |  |   | (2,251,762 | )
|Increase in borrowed funds                                                        |  |      |           |   |      |   |           |      |  |   | 950,000    |  
|Purchase of treasury stock                                                        |  |      |           |   |      |   | (90,688    | )    |  |   |           |  
|Proceeds from issuance of common stock                                            |  |      | 140,883    |   |      |   | 4,919,467  |      |  |   | 37,661     |  
|                                                                                  |  |      |            |   |      |   |            |      |  |   |            |  
|Net cash provided by (used in) financing activities                               |  |      | (2,481,502 | ) |      |   | 2,473,489  |      |  |   | (1,264,101 | )
|                                                                                  |  |      |            |   |      |   |            |      |  |   |            |  
|(Decrease) increase in cash and cash equivalents                                  |  |      | 173,393    |   |      |   | (336,373   | )    |  |   | 152,127    |  
|Cash and cash equivalents                                                         |  |      |            |   |      |   |            |      |  |   |            |  
|Beginning of year                                                                 |  |      | 288,740    |   |      |   | 625,113    |      |  |   | 472,986    |  
|                                                                                  |  |      |            |   |      |   |            |      |  |   |            |  
|End of year                                                                       |  | $    | 462,133    |   |      | $ | 288,740    |      |  | $ | 625,113    |  
|                                                                                  |  |      |            |   |      |   |            |      |  |   |            |  



|(1) | Eliminated in consolidation
|--- | ---------------------------



F-39



---

SIGNATURES

Pursuant to the requirements of Section 13 or 15(d) of the Securities Exchange Act of 1934, the Registrant has duly caused this report to be signed on behalf by the undersigned, thereunto duly authorized.



|                     |  |  |  |                                                  |  |                     |  |                                                      
|-------------------- |  |  |  | ------------------------------------------------ |  | ------------------- |  | -----------------------------------------------------
|                     |  |  |  | THE PEOPLES BANCTRUST COMPANY, INC. (Registrant)
|                     |  |  | 
|Date: March 16, 2007 |  |  |  | By:                                              |  | /s/ Don J. Giardina
|                     |  |  |  |                                                  |  |                     |  | Don J. Giardina President and Chief Executive
Officer

Pursuant to the requirements of the Securities Exchange Act of 1934, this report has been signed
below by the following persons on behalf of the Registrant and in the capacities indicated and on the dates indicated.



|                                                                                                                             |  |  |  |               
|---------------------------------------------------------------------------------------------------------------------------- |  |  |  | --------------
|DATE: SIGNATURE AND TITLE:                                                                                                   |  |  |  |               
|                                                                                                                             |  | 
|/s/ Ted M. Henry Ted M.
Henry Chairman of the Board of Directors                                                             |  |  |  | March 15, 2007
|                                                                                                                             |  | 
|/s/ Don J. Giardina Don J.
Giardina President, Chief Executive Officer and
Director                                          |  |  |  | March 15, 2007
|                                                                                                                             |  | 
|/s/ Thomas P. Wilbourne Thomas P.
Wilbourne Senior Vice President and Chief Financial
Officer (Principal Accounting Officer) |  |  |  | March 15, 2007
|                                                                                                                             |  | 
|/s/ Johnny Crear Johnny
Crear Director                                                                                       |  |  |  | March 15, 2007
|                                                                                                                             |  | 
|/s/ Harry W. Gamble, Jr. Harry W.
Gamble, Jr. Director                                                                       |  |  |  | March 15, 2007
|                                                                                                                             |  | 
|/s/ Edith M. Jones Edith M.
Jones Director                                                                                   |  |  |  | March 15, 2007
|                                                                                                                             |  | 
|/s/ D. Joseph McInnes D. Joseph
McInnes Director                                                                             |  |  |  | March 15, 2007



---

|                                                         |  |  |  |               
|-------------------------------------------------------- |  |  |  | --------------
|                                                         |  | 
|/s/ Thomas E. Newton Thomas E.
Newton Director           |  |  |  | March 15, 2007
|                                                         |  | 
|/s/ David Y. Pearce David Y.
Pearce Director             |  |  |  | March 15, 2007
|                                                         |  | 
|/s/ Julius E. Talton, Jr. Julius E.
Talton, Jr. Director |  |  |  | March 15, 2007
|                                                         |  | 
|/s/ Daniel P. Wilbanks Daniel P.
Wilbanks Director       |  |  |  | March 15, 2007