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SECURITIES AND EXCHANGE COMMISSION

WASHINGTON, D.C. 20549



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FORM 10-Q



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(MARK ONE)

|x | QUARTERLY REPORT UNDER SECTION 13 OR 15 (D) OF THE SECURITIES EXCHANGE ACTOF 1934
|- | ---------------------------------------------------------------------------------

For the quarterly period ended September 30, 2006

OR



| ̈ | TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(D) OF THE SECURITIES EXCHANGE ACT OF 1934
|- | ----------------------------------------------------------------------------------------

Commission File Number: O-13653



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THE PEOPLES BANCTRUST COMPANY, INC.

(Exact name of registrant as specified on its charter)



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|                                                               |  |                                     
|-------------------------------------------------------------- |  | ------------------------------------
|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)                          

(334) 875-1000

(Registrants telephone number, including area code)



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Indicate by a 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 such shorter time 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 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 ̈Non-Accelerated Filer  x

Indicate by check mark, whether the registrant is shell company (as defined in rule 12b-2 of the Exchange
Act)    Yes ̈No  x

As of the close of business on November 10, 2006, 5,912,071 shares of the registrants Common Stock, par value $.10 per share, were
outstanding.



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PART I - FINANCIAL INFORMATION

Item 1. Financial Statements

THE PEOPLES BANCTRUST COMPANY, INC.

CONSOLIDATED BALANCE SHEETS

(In
Thousands)



|                                                 |  |                    |         |   |                   |   |         |  
|------------------------------------------------ |  | ------------------ | ------- | - | ----------------- | - | ------- | -
|                                                 |  | September 30, 2006 |         |   | December 31, 2005 |  
|                                                 |  | (unaudited)        |         |   |                   |  
|Assets                                           |  |                    |         |   |                   |   |         |  
|Cash and due from banks                          |  | $                  | 48,359  |   |                   | $ | 34,585  |  
|Federal funds sold                               |  |                    |        |   |                   |   | 14,000  |  
|                                                 |  |                    |         |   |                   |   |         |  
|Cash and cash equivalents                        |  |                    | 48,359  |   |                   |   | 48,585  |  
|                                                 |  |                   
|Available-for-sale securities                    |  |                    | 198,535 |   |                   |   | 226,043 |  
|                                                 |  |                   
|Loans, net of unearned income                    |  |                    | 592,242 |   |                   |   | 495,509 |  
|Allowance for loan losses                        |  |                    | (6,112  | ) |                   |   | (6,654  | )
|                                                 |  |                    |         |   |                   |   |         |  
|Loans, net                                       |  |                    | 586,128 |   |                   |   | 488,855 |  
|                                                 |  |                   
|Bank premises and equipment                      |  |                    | 41,123  |   |                   |   | 37,960  |  
|Less accumulated depreciation                    |  |                    | (20,314 | ) |                   |   | (19,014 | )
|                                                 |  |                    |         |   |                   |   |         |  
|Bank premises and equipment, net                 |  |                    | 20,808  |   |                   |   | 18,946  |  
|                                                 |  |                   
|Other real estate, net                           |  |                    | 1,314   |   |                   |   | 2,746   |  
|Interest receivable                              |  |                    | 5,001   |   |                   |   | 3,921   |  
|Intangible assets acquired, net                  |  |                    | 6,478   |   |                   |   | 6,634   |  
|Deferred income taxes                            |  |                    | 2,315   |   |                   |   | 2,283   |  
|Other assets                                     |  |                    | 16,657  |   |                   |   | 13,759  |  
|                                                 |  |                    |         |   |                   |   |         |  
|Total assets                                     |  | $                  | 885,596 |   |                   | $ | 811,773 |  
|                                                 |  |                    |         |   |                   |   |         |  
|Liabilities and Stockholders Equity             |  |                    |         |   |                   |   |         |  
|Liabilities:                                     |  |                    |         |   |                   |   |         |  
|Deposits:                                        |  |                    |         |   |                   |   |         |  
|Demand-noninterest bearing                       |  | $                  | 83,852  |   |                   | $ | 85,538  |  
|Demand-interest bearing                          |  |                    | 250,650 |   |                   |   | 238,010 |  
|Savings                                          |  |                    | 34,970  |   |                   |   | 36,965  |  
|Time                                             |  |                    | 373,969 |   |                   |   | 327,536 |  
|                                                 |  |                    |         |   |                   |   |         |  
|Total deposits                                   |  |                    | 743,440 |   |                   |   | 688,049 |  
|Other borrowed funds                             |  |                    | 48,530  |   |                   |   | 37,732  |  
|Interest payable                                 |  |                    | 3,628   |   |                   |   | 2,176   |  
|Income taxes payable                             |  |                    | 1,221   |   |                   |   | 223     |  
|Other liabilities                                |  |                    | 2,300   |   |                   |   | 2,042   |  
|                                                 |  |                    |         |   |                   |   |         |  
|Total liabilities                                |  |                    | 799,120 |   |                   |   | 730,222 |  
|                                                 |  |                   
|Stockholders equity:                            |  |                    |         |   |                   |   |         |  
|Common stock                                     |  |                    | 591     |   |                   |   | 590     |  
|Treasury stock                                   |  |                    |        |   |                   |   | (91     | )
|Additional paid-in capital                       |  |                    | 17,066  |   |                   |   | 16,586  |  
|Accumulated other comprehensive loss, net of tax |  |                    | (3,579  | ) |                   |   | (3,449  | )
|Deferred stock based compensation                |  |                    | (112    | ) |                   |   | (92     | )
|Retained earnings                                |  |                    | 72,509  |   |                   |   | 68,007  |  
|                                                 |  |                    |         |   |                   |   |         |  
|Total stockholders equity                       |  |                    | 86,476  |   |                   |   | 81,551  |  
|                                                 |  |                    |         |   |                   |   |         |  
|Total liabilities and stockholders equity       |  | $                  | 885,596 |   |                   | $ | 811,773 |  
|                                                 |  |                    |         |   |                   |   |         |  

See notes to Unaudited Condensed Consolidated Financial Statements



2



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THE PEOPLES BANCTRUST COMPANY, INC.

CONSOLIDATED STATEMENTS OF INCOME

(In thousands except share and per share
data)



|                                                                      |  |                                 |           |      |                                |           |      |  |   |           |   |  |   |           |  
|--------------------------------------------------------------------- |  | ------------------------------- | --------- | ---- | ------------------------------ | --------- | ---- |  | - | --------- | - |  | - | --------- | -
|                                                                      |  | Three Months EndedSeptember 30, |           |      | Nine Months EndedSeptember 30, |          
|                                                                      |  | 2006                            |           | 2005 |                                |           | 2006 |  |   | 2005      |  
|                                                                      |  | (unaudited)                     |           |      | (unaudited)                    |          
|Interest income:                                                      |  |                                 |           |      |                                |           |      |  |   |           |   |  |   |           |  
|Interest and fees on loans and bankers acceptances                    |  | $                               | 11,721    |      | $                              | 8,403     |      |  | $ | 31,980    |   |  | $ | 23,285    |  
|Interest and dividends on investment securities:                      |  |                                 |           |      |                                |           |      |  |   |           |   |  |   |           |  
|U.S. Government securities                                            |  |                                 | 1,069     |      |                                | 1,112     |      |  |   | 3,243     |   |  |   | 3,275     |  
|Other securities and interest-bearing deposits                        |  |                                 | 947       |      |                                | 1,082     |      |  |   | 2,955     |   |  |   | 3,441     |  
|Interest on federal funds sold and interest bearing deposits in banks |  |                                 | 417       |      |                                | 246       |      |  |   | 710       |   |  |   | 755       |  
|                                                                      |  |                                 |           |      |                                |           |      |  |   |           |   |  |   |           |  
|Total interest income                                                 |  |                                 | 14,155    |      |                                | 10,843    |      |  |   | 38,888    |   |  |   | 30,757    |  
|                                                                      |  |                                 |           |      |                                |           |      |  |   |           |   |  |   |           |  
|Interest expense:                                                     |  |                                 |           |      |                                |           |      |  |   |           |   |  |   |           |  
|Interest on deposits                                                  |  |                                 | 5,994     |      |                                | 3,523     |      |  |   | 15,501    |   |  |   | 9,162     |  
|Interest on federal funds purchased and other borrowed funds          |  |                                 | 600       |      |                                | 509       |      |  |   | 1,645     |   |  |   | 1,719     |  
|                                                                      |  |                                 |           |      |                                |           |      |  |   |           |   |  |   |           |  
|Total interest expense                                                |  |                                 | 6,594     |      |                                | 4,032     |      |  |   | 17,146    |   |  |   | 10,881    |  
|                                                                      |  |                                 |           |      |                                |           |      |  |   |           |   |  |   |           |  
|Net interest income                                                   |  |                                 | 7,562     |      |                                | 6,811     |      |  |   | 21,743    |   |  |   | 19,876    |  
|                                                                      |  |                                 |           |     
|Provision (credit) for loan losses                                    |  |                                 | 428       |      |                                | (26       | )    |  |   | (465      | ) |  |   | (482      | )
|                                                                      |  |                                 |           |      |                                |           |      |  |   |           |   |  |   |           |  
|Net interest income after provision (credit) for loan losses          |  |                                 | 7,134     |      |                                | 6,837     |      |  |   | 22,207    |   |  |   | 20,358    |  
|                                                                      |  |                                 |           |      |                                |           |      |  |   |           |   |  |   |           |  
|Noninterest income:                                                   |  |                                 |           |      |                                |           |      |  |   |           |   |  |   |           |  
|Trust department income                                               |  |                                 | 214       |      |                                | 227       |      |  |   | 745       |   |  |   | 673       |  
|Service charges on deposit accounts                                   |  |                                 | 1,458     |      |                                | 1,461     |      |  |   | 4,287     |   |  |   | 3,863     |  
|Net securities (losses) gains                                         |  |                                 | 0         |      |                                | 0         |      |  |   | (18       | ) |  |   | 14        |  
|Other noninterest income                                              |  |                                 | 646       |      |                                | 650       |      |  |   | 1,972     |   |  |   | 2,159     |  
|                                                                      |  |                                 |           |      |                                |           |      |  |   |           |   |  |   |           |  
|Total noninterest income                                              |  |                                 | 2,318     |      |                                | 2,338     |      |  |   | 6,986     |   |  |   | 6,709     |  
|                                                                      |  |                                 |           |     
|Noninterest expense:                                                  |  |                                 |           |      |                                |           |      |  |   |           |   |  |   |           |  
|Salaries and wages                                                    |  |                                 | 2,950     |      |                                | 3,092     |      |  |   | 8,776     |   |  |   | 9,348     |  
|Pensions and other employee benefits                                  |  |                                 | 887       |      |                                | 523       |      |  |   | 2,092     |   |  |   | 1,524     |  
|Occupancy and equipment expenses                                      |  |                                 | 1,302     |      |                                | 1,289     |      |  |   | 3,749     |   |  |   | 3,869     |  
|Other noninterest expenses                                            |  |                                 | 1,697     |      |                                | 1,621     |      |  |   | 4,842     |   |  |   | 5,453     |  
|                                                                      |  |                                 |           |      |                                |           |      |  |   |           |   |  |   |           |  
|Total noninterest expense                                             |  |                                 | 6,836     |      |                                | 6,525     |      |  |   | 19,459    |   |  |   | 20,194    |  
|                                                                      |  |                                 |           |      |                                |           |      |  |   |           |   |  |   |           |  
|Income before provision for income taxes                              |  |                                 | 2,615     |      |                                | 2,650     |      |  |   | 9,734     |   |  |   | 6,873     |  
|                                                                      |  |                                 |           |     
|Provision for income taxes                                            |  |                                 | 756       |      |                                | 600       |      |  |   | 3,109     |   |  |   | 1,777     |  
|                                                                      |  |                                 |           |      |                                |           |      |  |   |           |   |  |   |           |  
|Net income                                                            |  | $                               | 1,860     |      | $                              | 2,050     |      |  | $ | 6,625     |   |  | $ | 5,096     |  
|                                                                      |  |                                 |           |      |                                |           |      |  |   |           |   |  |   |           |  
|Earnings per share                                                    |  |                                 |           |      |                                |           |      |  |   |           |   |  |   |           |  
|Basic net income per share                                            |  | $                               | 0.31      |      | $                              | 0.35      |      |  | $ | 1.12      |   |  | $ | 0.88      |  
|                                                                      |  |                                 |           |      |                                |           |      |  |   |           |   |  |   |           |  
|Diluted net income per share                                          |  | $                               | 0.31      |      | $                              | 0.35      |      |  | $ | 1.12      |   |  | $ | 0.88      |  
|                                                                      |  |                                 |           |      |                                |           |      |  |   |           |   |  |   |           |  
|Dividends per share                                                   |  | $                               | 0.12      |      | $                              | 0.11      |      |  | $ | 0.36      |   |  | $ | 0.33      |  
|                                                                      |  |                                 |           |      |                                |           |      |  |   |           |   |  |   |           |  
|Basic weighted average number of shares outstanding                   |  |                                 | 5,906,523 |      |                                | 5,881,047 |      |  |   | 5,901,939 |   |  |   | 5,776,439 |  
|                                                                      |  |                                 |           |      |                                |           |      |  |   |           |   |  |   |           |  
|Diluted weighted average number of shares outstanding                 |  |                                 | 5,951,038 |      |                                | 5,906,186 |      |  |   | 5,938,918 |   |  |   | 5,803,011 |  
|                                                                      |  |                                 |           |      |                                |           |      |  |   |           |   |  |   |           |  

See notes to Unaudited Condensed Consolidated Financial Statements



3



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THE PEOPLES BANCTRUST COMPANY, INC.

CONDENSED CONSOLIDATED STATEMENTS OF COMPREHENSIVE INCOME

(In Thousands)



|                                                                                                  |  |                                 |       |      |                                |        |      |  |   |       |   |  |   |        |  
|------------------------------------------------------------------------------------------------- |  | ------------------------------- | ----- | ---- | ------------------------------ | ------ | ---- |  | - | ----- | - |  | - | ------ | -
|                                                                                                  |  | Three Months EndedSeptember 30, |       |      | Nine Months EndedSeptember 30, |       
|                                                                                                  |  | (Unaudited)                     |       |      | (Unaudited)                    |       
|                                                                                                  |  | 2006                            |       | 2005 |                                |        | 2006 |  |   | 2005  |  
|Net income                                                                                        |  | $                               | 1,860 |      | $                              | 2,050  |      |  | $ | 6,625 |   |  | $ | 5,096  |  
|Other comprehensive income:                                                                       |  |                                 |       |      |                                |        |      |  |   |       |   |  |   |        |  
|Unrealized (losses) gains on securities available for sale and cash flow hedges during the period |  |                                 | 2,497 |      |                                | (1,057 | )    |  |   | (225  | ) |  |   | (2,420 | )
|Less: reclassification adjustment for net gains included in net income                            |  |                                 |      |      |                                |       |      |  |   | (18   | ) |  |   | 14     |  
|                                                                                                  |  |                                 |       |      |                                |        |      |  |   |       |   |  |   |        |  
|Other comprehensive (loss) income                                                                 |  |                                 | 2,497 |      |                                | (1,057 | )    |  |   | (206  | ) |  |   | (2,434 | )
|Income tax (benefit) provision related to items of other comprehensive loss                       |  |                                 | 922   |      |                                | (390   | )    |  |   | (76   | ) |  |   | (898   | )
|                                                                                                  |  |                                 |       |      |                                |        |      |  |   |       |   |  |   |        |  
|Other comprehensive (loss) income, net of tax                                                     |  |                                 | 1,576 |      |                                | (667   | )    |  |   | (130  | ) |  |   | (1,536 | )
|                                                                                                  |  |                                 |       |      |                                |        |      |  |   |       |   |  |   |        |  
|Comprehensive income, net of tax                                                                  |  | $                               | 3,435 |      | $                              | 1,383  |      |  | $ | 6,495 |   |  | $ | 3,560  |  
|                                                                                                  |  |                                 |       |      |                                |        |      |  |   |       |   |  |   |        |  

See notes to Unaudited Condensed Consolidated Financial Statements



4



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THE PEOPLES BANCTRUST COMPANY, INC.

CONSOLIDATED STATEMENTS OF CASHFLOWS

(In thousands)



|                                                                             |  |                                |         |   |      |   |         |  
|---------------------------------------------------------------------------- |  | ------------------------------ | ------- | - | ---- | - | ------- | -
|                                                                             |  | Nine Months EndedSeptember 30, |        
|                                                                             |  | 2006                           |         |   | 2005 |  
|                                                                             |  | (unaudited)                    |        
|Cash flows from operating activities                                         |  |                                |         |   |      |   |         |  
|Net income                                                                   |  | $                              | 6,625   |   |      | $ | 5,096   |  
|Adjustments to reconcile net income to cash provided by operating activities |  |                                |         |   |      |   |         |  
|(Credit) provision for loan losses                                           |  |                                | (465    | ) |      |   | (482    | )
|Depreciation, amortization and accretion                                     |  |                                | 1,601   |   |      |   | 1,977   |  
|Increase in unearned discount                                                |  |                                | 1,757   |   |      |   | 186     |  
|Stock based compensation                                                     |  |                                | 297     |   |      |   |        |  
|(Gain) loss on sales of OREO                                                 |  |                                | (71     | ) |      |   | 16      |  
|Loss (gain) on sales of securities                                           |  |                                | 18      |   |      |   | (14     | )
|Write down of other real estate and equipment                                |  |                                | 27      |   |      |   | 34      |  
|Decrease (increase) in assets                                                |  |                                |         |   |      |   |         |  
|Interest receivable                                                          |  |                                | (1,080  | ) |      |   | (226    | )
|Income taxes receivable                                                      |  |                                |        |   |      |   | 1,263   |  
|Other assets                                                                 |  |                                | (2,828  | ) |      |   | 724     |  
|(Decrease) increase in other liabilities                                     |  |                                |         |   |      |   |         |  
|Interest payable                                                             |  |                                | 1,452   |   |      |   | 684     |  
|Minimum required contributions to defined benefits pension plan              |  |                                |        |   |      |   | (336    | )
|Income taxes payable                                                         |  |                                | 998     |   |      |   | 723     |  
|Other liabilities                                                            |  |                                | 258     |   |      |   | (49     | )
|                                                                             |  |                                |         |   |      |   |         |  
|Net cash provided by operating activities                                    |  |                                | 8,590   |   |      |   | 9,596   |  
|                                                                             |  |                               
|Cash flows from investing activities                                         |  |                                |         |   |      |   |         |  
|Proceeds from sales of available for sale securities                         |  |                                | 5,024   |   |      |   | 2,323   |  
|Proceeds from maturities and calls of available for sale securities          |  |                                | 23,501  |   |      |   | 25,020  |  
|Purchases of available for sale securities                                   |  |                                | (938    | ) |      |   | (7,465  | )
|Purchase of derivative instrument                                            |  |                                | (445    | ) |      |   |        |  
|Net increase in loans                                                        |  |                                | (98,915 | ) |      |   | (49,769 | )
|Contribution to defined benefit pension plan                                 |  |                                |        |   |      |   | (2,000  | )
|Purchases of bank premises and equipment                                     |  |                                | (3,329  | ) |      |   | (3,832  | )
|Proceeds from sales of other real estate and equipment                       |  |                                | 1,963   |   |      |   | 2,131   |  
|                                                                             |  |                                |         |   |      |   |         |  
|Net cash used in investing activities                                        |  |                                | (73,139 | ) |      |   | (33,592 | )
|                                                                             |  |                               
|Cash flows from financing activities                                         |  |                                |         |   |      |   |         |  
|Net increase in deposits                                                     |  |                                | 55,391  |   |      |   | 16,959  |  
|Increase (decrease) in borrowings                                            |  |                                | 10,798  |   |      |   | (10,251 | )
|Proceeds from issuance of common stock                                       |  |                                | 95      |   |      |   | 4,900   |  
|Dividends paid                                                               |  |                                | (1,962  | ) |      |   | (1,759  | )
|Purchase of treasury stock                                                   |  |                                |        |   |      |   | (91     | )
|                                                                             |  |                                |         |   |      |   |         |  
|Net cash provided by financing activities                                    |  |                                | 64,323  |   |      |   | 9,758   |  
|                                                                             |  |                               
|Decrease in cash and cash equivalents                                        |  |                                | (226    | ) |      |   | (14,237 | )
|                                                                             |  |                               
|Cash and cash equivalents                                                    |  |                                |         |   |      |   |         |  
|Beginning of period                                                          |  |                                | 48,585  |   |      |   | 63,177  |  
|                                                                             |  |                                |         |   |      |   |         |  
|End of period                                                                |  | $                              | 48,359  |   |      | $ | 48,939  |  
|                                                                             |  |                                |         |   |      |   |         |  
|                                                                             |  |                               
|Supplemental disclosure of cash flow information                             |  |                                |         |   |      |   |         |  
|Cash paid during the period for                                              |  |                                |         |   |      |   |         |  
|Interest                                                                     |  |                                | 15,694  |   |      |   | 10,197  |  
|Income taxes                                                                 |  |                                | 2,067   |   |      |   | 666     |  

See notes to Unaudited Condensed Consolidated Financial Statements



5



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THE PEOPLES BANCTRUST COMPANY, INC. AND SUBSIDIARY

Notes to the Unaudited Condensed Consolidated Financial Statements

Accounting Policies:

The
accompanying unaudited condensed consolidated financial statements of The Peoples BancTrust Company, Inc, (BancTrust) and its subsidiary, The Peoples Bank and Trust Company (Peoples Bank), along with its subsidiaries Loan
Express, Inc. and The Peoples Insurance Agency, Inc. have been prepared in accordance with generally accepted accounting principles for interim information and with the instructions to Form 10-Q and Article 10 of Regulation S-X. Accordingly, they do
not include all of the information and footnotes required by generally accepted accounting principles for complete financial statements. In the opinion of management, all adjustments (consisting only of normal recurring accruals) considered
necessary for a fair presentation have been included. The results of operations are not necessarily indicative of the results of operations for the full year or any other interim periods. For further information refer to the consolidated financial
statements and footnotes thereto included in BancTrusts Annual Report on Form 10-K for the fiscal year ended December 31, 2005.

Commitments and Contingencies:

BancTrust and its subsidiaries are from time to time defendants in legal
actions arising from normal business activities. Management does not anticipate that the ultimate liability arising from litigation outstanding at September 30, 2006 will have a materially adverse effect on BancTrusts financial
statements.

Earnings Per Share (EPS):

The following table reflects the reconciliation of the numerator and denominator of the basic EPS computation to the diluted EPS computation for the three
and nine months ended September 30, 2006 and 2005 respectively (in thousands, except per share data):



|                                        |  |                                       |       |        |       |                 |   |                                      |  |  |  |        |  |        |       |                 |       |  |   |     
|--------------------------------------- |  | ------------------------------------- | ----- | ------ | ----- | --------------- | - | ------------------------------------ |  |  |  | ------ |  | ------ | ----- | --------------- | ----- |  | - | ----
|                                        |  | Three months ended September 30, 2006 |       |        |       |                 |   | Nine months ended September 30, 2006
|                                        |  | Income                                |       | Shares |       | Per-ShareAmount |   |                                      |  |  |  | Income |  | Shares |       | Per-ShareAmount
|Basic EPS                               |  |                                       |       |        |       |                 |   |                                      |  |  |  |        |  |        |       |                 |       |  |   |     
|Income available to common stockholders |  | $                                     | 1,860 |        | 5,907 |                 | $ | 0.31                                 |  |  |  |        |  | $      | 6,625 |                 | 5,902 |  | $ | 1.12
|Effect of dilutive securities           |  |                                       |       |        |       |                 |   |                                      |  |  |  |        |  |        |       |                 |       |  |   |     
|Stock options                           |  |                                       |       |        | 43    |                 |   |                                      |  |  |  |        |  |        |       |                 | 37    |  |   |     
|                                        |  |                                       |       |        |       |                 |   |                                      |  |  |  |        |  |        |       |                 |       |  |   |     
|Diluted EPS                             |  | $                                     | 1,860 |        | 5,950 |                 | $ | 0.31                                 |  |  |  |        |  | $      | 6,625 |                 | 5,939 |  | $ | 1.12
|                                        |  |                                       |       |        |       |                 |   |                                      |  |  |  |        |  |        |       |                 |       |  |   |     
|                                        |  |                                       |       |       
|                                        |  | Three months ended September 30, 2005 |       |        |       |                 |   | Nine months ended September 30, 2005
|                                        |  | Income                                |       | Shares |       | Per-ShareAmount |   |                                      |  |  |  | Income |  | Shares |       | Per-ShareAmount
|Basic EPS                               |  |                                       |       |        |       |                 |   |                                      |  |  |  |        |  |        |       |                 |       |  |   |     
|Income available to common stockholders |  | $                                     | 2,050 |        | 5,881 |                 | $ | 0.35                                 |  |  |  |        |  | $      | 5,096 |                 | 5,776 |  | $ | 0.88
|Effect of dilutive securities           |  |                                       |       |        |       |                 |   |                                      |  |  |  |        |  |        |       |                 |       |  |   |     
|Stock options                           |  |                                       |       |        | 25    |                 |   |                                      |  |  |  |        |  |        |       |                 | 27    |  |   |     
|                                        |  |                                       |       |        |       |                 |   |                                      |  |  |  |        |  |        |       |                 |       |  |   |     
|Diluted EPS                             |  | $                                     | 2,050 |        | 5,906 |                 | $ | 0.35                                 |  |  |  |        |  | $      | 5,096 |                 | 5,803 |  | $ | 0.88



6



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Stock-Based Compensation

At September 30, 2006, BancTrust had a stock option plan, which is described more fully in Note 20 to the Consolidated Financial Statements its
Annual Report on Form 10-K. Effective January 1, 2006, BancTrust adopted SFAS No. 123 (revised), Share-Based Payment (SFAS 123(R)) utilizing the modified prospective method of accounting. Prior to the adoption of
SFAS 123(R) BancTrust accounted for stock option grants in accordance with APB Opinion No. 25, Accounting for Stock Issued to Employees (the intrinsic value method), and accordingly recognized no compensation expense for stock
option grants.

Under the modified prospective method, SFAS 123(R) 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 costs recognized in the first nine months of 2006 include compensation costs 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 costs 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 123(R). Prior periods were not restated to reflect the impact of adopting the new standard.

Grant-date fair value is measured on the date of grant using an option-pricing model with market assumptions. The grant-date fair value is amortized into
expense on a straight-line basis over the vesting period. Option pricing models require the use of highly subjective assumptions, including but not limited to, expected stock price volatility, forfeiture rates, and interest rates, which if changed
can materially affect fair value estimates. Accordingly the model does not necessarily provide a reliable single measure of the fair value of BancTrusts stock options.

As a result of adopting SFAS 123(R) on January 1, 2006, net income for the nine months ended September 30, 2006, was approximately $297,000
lower than if BancTrust had continued to account for stock-based compensation under APB No. 25 for stock option grants. Basic and diluted earnings per share for the nine months ended September 30, 2006 were $0.05 lower as a result of
BancTrust adopting SFAS 123(R). Net income and earnings per share for the nine months ended September 30, 2005 would not have been affected by the adoption of SFAS 123(R).

On September 9, 2005 BancTrust granted options to its then present President and Chief Executive Officer to purchase 50,000 shares of its common
stock at the then current market price ($15.375). Also on September 9, 2005 BancTrust awarded its then present President and Chief Executive Officer 6,000 shares of restricted common stock. On May 2, 2006, both the options and restricted
shares became fully vested and exercisable upon the death of BancTrusts aforementioned President and Chief Executive Officer. Accordingly, BancTrust recognized approximately $239,000 of related expense in the second quarter of 2006, on a
pre-tax basis.

The following is a summary of BancTrusts weighted average assumptions used to estimate the weighted-average per share
fair value of options granted during the nine months ended September 30, 2006 and 2005 on the date of grant using the Black-Scholes option-pricing model.



|                                                                 |  |                                       |       |   |      |   |       |  
|---------------------------------------------------------------- |  | ------------------------------------- | ----- | - | ---- | - | ----- | -
|                                                                 |  | For the nine months endedSeptember 30 |      
|                                                                 |  | 2006                                  |       |   | 2005 |  
|Expected life (in years)                                         |  |                                       | 5.0   |   |      |   | 4.0   |  
|Expected volatility                                              |  |                                       | 22.17 | % |      |   | 22.59 | %
|Risk-free interest rate                                          |  |                                       | 4.86  | % |      |   | 4.56  | %
|Expected dividend yield                                          |  |                                       | 2.45  | % |      |   | 2.59  | %
|Weighted-average fair value of options granted during the period |  | $                                     | 4.14  |   |      | $ | 2.94  |  

At September 30, 2006, there was approximately $517,000 of pre-tax, unrecognized compensation
costs related to share-based payments which is expected to be recognized over a weighted-average period of 2.7 years.



7



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The following table represents stock option activity for the nine months ended
September 30, 2006:



|                                         |  |                                       |   |  |                              |                                      |                                         |      |  |  |        |         |   |                              |   |                                         |  |     
|---------------------------------------- |  | ------------------------------------- | - |  | ---------------------------- | ------------------------------------ | --------------------------------------- | ---- |  |  | ------ | ------- | - | ---------------------------- | - | --------------------------------------- |  | ----
|                                         |  | Three Months Ended September 30, 2006 |   |  |                              | Nine Months Ended September 30, 2006
|                                         |  | Number                                |   |  | WeightedAverageExercisePrice |                                      | WeightedAverageRemainingContractualLife |      |  |  | Number |         |   | WeightedAverageExercisePrice |   | WeightedAverageRemainingContractualLife
|                                         |  |                                       |   |  |                              |                                      | (years)                                 |      |  |  |        |         |   |                              |   | (years)                                
|Options outstanding, beginning of period |  | 208,440                               |   |  | $                            | 16.49                                |                                         |      |  |  |        | 170,410 |   |                              | $ | 14.83                                   |  |     
|Granted                                  |  | 66,500                                |   |  |                              | 15.78                                |                                         |      |  |  |        | 111,000 |   |                              |   | 18.39                                   |  |     
|Exercised                                |  | (2,200                                | ) |  |                              | 14.09                                |                                         |      |  |  |        | (8,670  | ) |                              |   | 12.79                                   |  |     
|Terminated                               |  |                                      |   |  |                              |                                      |                                         |      |  |  |        |        |   |                              |   |                                        |  |     
|                                         |  |                                       |   |  |                              |                                      |                                         |      |  |  |        |         |   |                              |   |                                         |  |     
|Options outstanding, end of period       |  | 272,740                               |   |  |                              | 16.67                                |                                         | 7.11 |  |  |        | 272,740 |   |                              |   | 16.67                                   |  | 7.11
|                                         |  |                                       |   |  |                              |                                      |                                         |      |  |  |        |         |   |                              |   |                                         |  |     
|Exercisable, end of period               |  | 161,740                               |   |  | $                            | 15.48                                |                                         | 3.19 |  |  |        | 161,740 |   |                              | $ | 15.48                                   |  | 3.19
|                                         |  |                                       |   |  |                              |                                      |                                         |      |  |  |        |         |   |                              |   |                                         |  |     

Shares available for future stock option grants to employees and directors under existing plans
totaled 381,076 at September 30, 2006. At September 30, 2006 the aggregate intrinsic value of options outstanding was $637,000 and the aggregate intrinsic value of options exercisable was $341,000. Total intrinsic value of options
exercised was $16,000 for the three months ended September 30, 2006 and $53,000 for the nine months ended September 30, 2006.

The following
table summarizes BancTrusts nonvested stock option activity for the three and nine months ended September 30, 2006:



|                                         |  |                                       |  |                                        |      |                                      |  |        |         |   |                                       |   |     
|---------------------------------------- |  | ------------------------------------- |  | -------------------------------------- | ---- | ------------------------------------ |  | ------ | ------- | - | ------------------------------------- | - | ----
|                                         |  | Three Months Ended September 30, 2006 |  |                                        |      | Nine Months Ended September 30, 2006
|                                         |  | Number                                |  | Weighted Average Grant Date Fair Value |      |                                      |  | Number |         |   | WeightedAverage Grant Date Fair
Value
|Options outstanding, beginning of period |  | 56,500                                |  | $                                      | 4.02 |                                      |  |        | 50,000  |   |                                       | $ | 2.94
|Granted                                  |  | 54,500                                |  |                                        | 4.27 |                                      |  |        | 111,000 |   |                                       |   | 4.14
|Terminated                               |  |                                      |  |                                        |     |                                      |  |        |        |   |                                       |   |    
|Vested                                   |  |                                      |  |                                        |     |                                      |  |        | (50,000 | ) |                                       |   | 2.94
|                                         |  |                                       |  |                                        |      |                                      |  |        |         |   |                                       |   |     
|Options outstanding, end of period       |  | 111,000                               |  | $                                      | 4.14 |                                      |  |        | 111,000 |   |                                       | $ | 4.14
|                                         |  |                                       |  |                                        |      |                                      |  |        |         |   |                                       |   |     

Recently Adopted Accounting Standards

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.



8



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This Statement will require BancTrust to:



| | a. | Recognize the funded status of a benefit 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.
| | -- | -------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------



| | b. | 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, are adjusted as they are subsequently
recognized as components of net periodic benefit cost pursuant to the recognition and amortization provisions of those Statements.
| | -- | -------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------



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



| | d. | 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 obligation.
| | -- | --------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------

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 FASB Statement No. 132 (revised 2003), Employers
Disclosures about Pensions and Other Postretirement Benefits, and other related accounting literature. Upon initial application of this Statement and subsequently, BancTrust 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 statement of financial position and in determining the amount of net periodic benefit cost.

BancTrust will be required to initially recognize the funded status of its defined benefit pension plan and to provide the required disclosures as of the end of its fiscal year which is December 31, 2006.
BancTrust is in the process of evaluating the effect this statement will have on its financial results and condition for future periods.



9



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

GENERAL

The
following analysis focuses on the financial condition and results of operations of BancTrust, and should be read in conjunction with the consolidated financial statements included in this report.

Managements discussion and analysis includes certain forward-looking statements addressing, among other things, BancTrusts prospects for
earnings, asset growth and net interest margin. Forward-looking statements are accompanied by, and identified with, such terms as anticipates, believes, expects, intends, and similar phrases.
Managements expectations for BancTrusts future necessarily involve a number of uncertainties, assumptions and estimates. Factors that could cause actual results to differ from the expectations expressed herein include factors summarized
in Item 1A of BancTrusts Annual Report on Form 10-K for the fiscal year ended December 31, 2005. Accordingly, any forward-looking statements included herein do not purport to be predictions of future events or circumstances and may
not be realized.

Use of estimates in the preparation of financial statements in conformity with accounting principles generally accepted
in the United States, requires management to make estimates and assumptions that affect the reported amounts of assets and liabilities, the disclosure of contingent assets and liabilities and the reported amounts of revenues and expenses during the
reporting periods. Actual results could differ from those estimates. Material estimates that are particularly susceptible to significant change in the near term relate to the determination of the allowance for loan and lease losses, goodwill
impairment and deferred tax assets or liabilities.

CRITICAL ACCOUNTING POLICIES

BancTrust has adopted various accounting policies which govern the application of accounting principles generally accepted in the United States of
America in the preparation of its financial statements. Significant accounting policies are described in the footnotes to the consolidated financial statements in BancTrusts Annual Report on Form 10-K for the year ended December 31, 2005.

Certain accounting policies involve significant judgments and assumptions by management which may have a material impact on the carrying
value of certain assets and liabilities. Management considers these accounting policies to be critical accounting policies. The judgments and assumptions used are based on historical experience and other factors, which management believes are
reasonable under the circumstances. Because of the nature of the judgments and assumptions management makes, actual results could differ from these judgments and estimates which could have a material impact on the carrying values of BancTrusts
assets and liabilities and results of operations.

Allowance for Loan Losses - A loan is considered impaired, based on current
information and events, if it is probable that BancTrust 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.

BancTrust uses several factors in determining if a loan is impaired. The 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, operating income or loss,
etc.

The allowance for loan losses is established through charges to earnings in the form of a provision 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.



10



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Managements periodic evaluation of the adequacy of the allowance also considers impaired loans and
takes into consideration BancTrust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, 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 BancTrusts regulators or its economic environment will not require further increases in the allowance.

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. BancTrust performed its goodwill impairment analysis according to the aforementioned method as of
June 30, 2006. This analysis indicated that no goodwill impairment was present; therefore no impairment loss was recognized.

Income taxes - The determination of BancTrusts overall income tax provision is complex and requires careful analysis. As part of the overall business strategy, BancTrust may enter into business transactions that require
management to consider tax laws and regulations that apply to the specific facts and circumstances under consideration. This analysis includes evaluating the amount and timing of the realization of income tax liabilities or benefits. Management
continually monitors tax developments as they affect BancTrusts overall tax position.

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.

FINANCIAL CONDITION

Cash and Cash Equivalents

At September 30, 2006, cash and cash equivalents totaled $48,359,000,
compared to 48,585,000 at December 31, 2005. Cash and cash equivalents primarily consist of cash and due from banks, combined with federal funds sold. At September 30, 2006, cash and cash equivalents consisted entirely of cash and due from
banks, compared to $34,585,000 of cash and due from banks and $14,000,000 of federal funds sold at December 31, 2005.



11



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Investments

At September 30, 2006, investment securities totaled $198,535,000 compared to $226,043,000 at December 31, 2005. The decline in investment securities was primarily due to increased loan volumes (see 
Loans), as available funds were redeployed into the higher yielding loan portfolio.

At September 30, 2006,
BancTrust had pledged to the State Treasurer for the State of Alabama and other parties $158,664,000, or approximately 80% 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 (net of tax) of
$3,336,000 at September 30, 2006 and $3,449,000 (net of tax) at December 31, 2005. BancTrust considers these losses to be temporary.

Loans

Total loans, net of the unearned discount, increased $96,733,000 to $592,242,000 at September 30, 2006, from $495,509,000 at
December 31, 2005. The majority of this increase was realized in the commercial and industrial loan portfolio, as well as in the real estate loan portfolio. BancTrust continues to place emphasis on originating loans secured by real estate, as
well as on loans to commercial interests. Particular emphasis is placed on originating commercial real estate loans. The following table indicates each of the major loan categories of BancTrust, and the change in volume of each when comparing
September 30, 2006 to December 31, 2005.



|                                          |  |                    |         |                   |   |         |  |   |        |  
|----------------------------------------- |  | ------------------ | ------- | ----------------- | - | ------- |  | - | ------ | -
|                                          |  | September 30, 2006 |         | December 31, 2005 |   | Change  | 
|                                          |  |                    |         | (In thousands)    |   |         | 
|Commercial and industrial                 |  | $                  | 123,950 |                   | $ | 87,339  |  | $ | 36,611 |  
|Real estate - mortgage                    |  |                    |         |                   |   |         |  |   |        |  
|Commercial                                |  |                    | 308,072 |                   |   | 265,740 |  |   | 42,332 |  
|Residential                               |  |                    | 114,227 |                   |   | 97,098  |  |   | 17,129 |  
|Personal                                  |  |                    | 47,631  |                   |   | 45,196  |  |   | 2,435  |  
|Overdrafts and credit line                |  |                    | 1,001   |                   |   | 1,019   |  |   | (18    | )
|                                          |  |                    |         |                   |   |         |  |   |        |  
|Total loans                               |  |                    | 594,881 |                   |   | 496,392 |  |   | 98,489 |  
|Less:                                     |  |                    |         |                   |   |         |  |   |        |  
|Unearned discount                         |  |                    | 2,639   |                   |   | 883     |  |   | 1,756  |  
|                                          |  |                    |         |                   |   |         |  |   |        |  
|Total loans, net of the unearned discount |  | $                  | 592,242 |                   | $ | 495,509 |  | $ | 96,733 |  
|                                          |  |                    |         |                   |   |         |  |   |        |  

Commercial and industrial loans increased from $87,339,000 at December 31, 2005, to
$123,950,000 at September 30, 2006. Demand for these types of loans has increased in BancTrusts newer and more economically dynamic markets, thereby contributing to higher volumes.

Total real estate loans increased $59,461,000 to $422,299,000 at September 30, 2006 from $362,838,000 at December 31, 2005. Specifically,
commercial real estate loans increased $42,332,000 from $265,740,000 at December 31, 2005 to $308,072,000 at September 30, 2006, while residential real estate loans increased $17,129,000 to $114,227,000 from $97,098,000 for the same
period. BancTrust has placed significant emphasis on originating loans secured by real estate. As a result, the total balances of BancTrusts real estate loan portfolios have consistently and significantly increased in recent periods.

Personal loans increased from $45,196,000 at December 31, 2005 to $47,631,000 at September 30, 2006. BancTrust has placed
continually less significance on personal loan originations in recent periods, as both increased competition from alternative sources of credit and increased levels of denials of personal loan applications have contributed to generally lower
personal loan portfolio totals over time. Alternative sources of credit primarily include credit cards and finance companies.



12



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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. The loan will be closely monitored and may be modified through negotiations with the borrower, depending
on the severity of its condition. 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). Only 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 processes, BancTrusts credit administration personnel analyze and
validate the loan loss reserve methodology at least quarterly. The analyses include specific allowances for individual loans and general allowances for certain pools of loans. The credit administration personnel, along with senior management review
and ensure 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.

The first element of the allowance for loan losses 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 over 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 element of the allowance for loan losses is the application of loan charge off factors to specific pools of loans that contain similar characteristics. This part of the methodology is governed by SFAS 5. These factors are based
upon recent and historical net loan charge-off experience and are typically applied to the portfolio by loan type. Historical net loan charge off factors used in this analysis are adjusted quarterly based on loss trends.

The third reserve element involves the application of identifiable risk factors that are less quantifiable and of a more subjective nature. Examples of
such factors may include additional reserves for relatively new lines of business or new markets, where BanTrusts lending experience and local economic knowledge is limited.

At September 30, 2006, BancTrusts allowance for loan losses had a balance of $6,112,000, compared to $6,654,000 at December 31, 2005. The
ratio of the allowance to total loans, net of the unearned discount, was 1.03% and 1.34% at September 30, 2006 and December 31, 2005, respectively. As a percentage of total loans, net of the unearned discount, non-accruing loans decreased
to 0.07% at September 30, 2006, compared to 0.16% at December 31, 2005. The coverage of the allowance to non-accruing loans was 14.21X and 8.16X at September 30, 2006 and December 31, 2005, respectively.



13



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Loans requiring special attention because of potential weakness (special attention loans)
decreased to $3,654,000 at September 30, 2006 from $7,487,000 at December 31, 2005. This reduction is due in part to intensive efforts by management to reduce special attention loans. Special attention loans are comprised of those loans
management has deemed to be impaired, according to SFAS 114 as previously described. At September 30, 2006, approximately $378,000 of the $6,112,000 allowance for loan losses was allocated to special attention loans. Loan accounted for on a
nonaccrual basis decreased to $430,000 at September 30, 2006 from $815,000 at December 31, 2005. The following table indicates the loan charge off and recovery activity of BancTrust for the three and nine months ended September 30,
2006 and 2005.



|                                           |  |                                  |      |   |                                 |   |      |      |  |   |      |   |  |   |        |  
|------------------------------------------ |  | -------------------------------- | ---- | - | ------------------------------- | - | ---- | ---- |  | - | ---- | - |  | - | ------ | -
|                                           |  | Three Months Ended September 30, |      |   | Nine Months Ended September 30, |  
|                                           |  | 2006                             |      |   | 2005                            |   |      | 2006 |  |   | 2005 |  
|                                           |  | (In Thousands)                   |     
|Loans charged-off                          |  | $                                | 319  |   |                                 | $ | 399  |      |  | $ | 760  |   |  | $ | 2,532  |  
|Recoveries of loans previously charged off |  |                                  | (219 | ) |                                 |   | (283 | )    |  |   | (683 | ) |  |   | (1,112 | )
|                                           |  |                                  |      |   |                                 |   |      |      |  |   |      |   |  |   |        |  
|Net loans (recovered) charged-off          |  | $                                | 100  |   |                                 | $ | 116  |      |  | $ | 77   |   |  | $ | 1,420  |  
|                                           |  |                                  |      |   |                                 |   |      |      |  |   |      |   |  |   |        |  

Deposits

BancTrust held $743,440,000 in total deposits at September 30, 2006 compared to $688,049,000 at December 31, 2005. Time and interest bearing demand deposits increased, while noninterest bearing and savings
deposits decreased. The net effect was a $55,391,000 increase in total deposits between the two periods.

Included in time deposits at
September 30, 2006 was $51,023,000 of brokered time deposits, compared to $20,669,000 at December 31, 2005. Brokered deposits are more likely to be withdrawn from BancTrust upon maturity than other more traditional types of deposits. These
deposits are fully insured by the Federal Deposit Insurance Corporation and are typically deployed by management to meet short-term funding needs.

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.

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 between 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). Also, the asset base provides liquidity through interest and fee income on loans,
loan repayments and the maturity or sales of other earning assets, including securities. BancTrusts securities are generally high grade, marketable securities. At September 30, 2006, the entire investment securities portfolio of BancTrust
was classified as available-for-sale (see - Investments).



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The liability base provides liquidity through deposit growth, the rollover of maturing deposits and
accessibility to external sources of funds, (borrowed funds). Borrowed funds totaled $48,530,000 at September 30, 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 Federal Home
Loan Bank of Atlanta (FHLB). At September 30, 2006, BancTrust had total advances from FHLB of $47,715,000. When combined with approximately $18,500,000 of guarantees on commercial letters of credit provided by the FHLB, BancTrust
had approximately $66,215,000 of active credit facilities at the FHLB on September 30, 2006. Total credit facilities available to BancTrust at the FHLB were approximately $74,361,000 on September 30, 2006. BancTrust had unused federal
funds lines of credit with correspondent financial institutions of approximately $52,000,000 at September 30, 2006.

Stockholders Equity and
Regulatory Capital

At September 30, 2006, stockholders equity totaled $86,476,000, compared to $81,551,000 at
December 31, 2005. Risk-based capital regulations require all bank holding companies and banks to achieve and maintain a minimum total capital to risk based assets ratio of 8%, at least half of which must be in the form of Tier 1 capital. Tier
1 capital primarily consists of stockholders equity less goodwill and other qualifying intangible assets and net unrealized gains or losses on available for sales securities). The following table indicates the risk-based capital ratios of
BancTrust and Peoples Bank at September 30, 2006.



|                                  |  |                                                                     |         |  |              |   |  |   |         |  |       |  
|--------------------------------- |  | ------------------------------------------------------------------- | ------- |  | ------------ | - |  | - | ------- |  | ----- | -
|                                  |  | Risk-Based Capital Ratios & Leverage RatiosAs of September 30, 2006 |        
|                                  |  | Dollars in Thousands                                                |        
|                                  |  | BancTrust                                                           |         |  | Peoples Bank |  
|RISK-BASED CAPITAL RATIOS         |  |                                                                     |         |  |              |   |  |   |         |  |       |  
|Tier 1 Capital                    |  | $                                                                   | 83,688  |  | 12.22        | % |  | $ | 77,782  |  | 11.38 | %
|Tier 1 Capital  Minimum Required |  |                                                                     | 27,404  |  | 4.00         | % |  |   | 27,331  |  | 4.00  | %
|                                  |  |                                                                     |         |  |              |   |  |   |         |  |       |  
|Excess                            |  | $                                                                   | 56,284  |  | 8.22         | % |  | $ | 50,451  |  | 7.38  | %
|                                  |  |                                                                     |         | 
|Total Capital                     |  | $                                                                   | 89,800  |  | 13.11        | % |  | $ | 83,894  |  | 12.28 | %
|Total Capital  Minimum Required  |  |                                                                     | 54,808  |  | 8.00         | % |  |   | 54,661  |  | 8.00  | %
|                                  |  |                                                                     |         |  |              |   |  |   |         |  |       |  
|Excess                            |  | $                                                                   | 34,992  |  | 5.11         | % |  | $ | 29,233  |  | 4.28  | %
|                                  |  |                                                                     |         | 
|Net risk-weighted assets          |  | $                                                                   | 685,104 |  |              |   |  | $ | 683,265 |  |       |  
|                                  |  |                                                                     |         | 
|LEVERAGE RATIOS                   |  |                                                                     |         |  |              |   |  |   |         |  |       |  
|Total Tier 1 Capital              |  | $                                                                   | 83,688  |  | 9.62         | % |  | $ | 77,782  |  | 9.00  | %
|Minimum Leverage Requirement      |  |                                                                     | 34,797  |  | 4.00         | % |  |   | 34,559  |  | 4.00  | %
|                                  |  |                                                                     |         |  |              |   |  |   |         |  |       |  
|Excess                            |  | $                                                                   | 48,891  |  | 5.62         | % |  | $ | 43,223  |  | 5.00  | %
|                                  |  |                                                                     |         | 
|Average Total Assets,             |  |                                                                     |         |  |              |   |  |   |         |  |       |  
|Net of all intangibles            |  | $                                                                   | 869,928 |  |              |   |  | $ | 863,987 |  |       |  



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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 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 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 against radical shifts in interest rate levels.

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. BancTrust has established an
ALCO (see - Liquidity), consisting of executive management 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 assets and liabilities, and produces various reports and supporting detail, which indicate BancTrusts overall interest rate risk status.

RESULTS OF OPERATIONS

Three Months Ended September 30, 2006 Compared to Three Months
Ended September 30, 2005.

The profitability of BancTrust in a given period is heavily dependent on the amount of net interest
income it is able to generate. Simply stated, net interest income is the amount of interest income realized on earning assets such as loans and investments that remains after deducting interest expense incurred on interest bearing liabilities such
as interest bearing deposits and borrowed funds.

For the three months ended September 30, 2006 (the 2006 quarter)
BancTrust earned $14,155,000 of interest income on its interest earning assets, compared to $10,843,000 for the same period in 2005 (the 2005 quarter). Increases in the average annual yields and average volumes of interest earning assets
accounted for the increase in interest income between the two periods. In the 2006 quarter, interest earning assets yielded 6.92% on average volume of $811,111,000, and 5.87% on average volume of $732,373,000 in the 2005 quarter.

Interest and fees on loans totaled $11,721,000 in the 2006 quarter and $8,403,000 in the 2005 quarter. Both the average annual yield earned on the loan
portfolio and its average balance increased between the two periods. In the 2006 quarter, loans yielded an average of 8.00% on an average balance of $581,620,000, compared to an average annual yield of 7.10% on an average balance of $469,903,000 in
the 2005 quarter. Increased loan demand between the two periods (see Loans) contributed to higher average balances, while increases in market interest rates between the two periods contributed to the higher average yields.

Interest income earned on the investment securities portfolio declined to $2,016,000 in the 2006 quarter from $2,194,000 in the 2005
quarter. The average balance of the investment securities portfolio declined to $200,446,000 in the 2006 quarter from $237,602,000 in the 2005 quarter. The decrease in the average balance of the investment securities portfolio was the primary
contributing factor to the lower interest income earned from it, given that the average annual yield increased to 3.99% in the 2006 quarter from 3.66% in the 2005 quarter. The lower average balance was primarily the result of available funds within
the investment securities portfolio being redeployed into the higher yielding loan portfolio. Increases in market interest rates contributed to the higher average yield between the two quarters.



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Interest income earned on federal funds sold and interest bearing deposits in banks totaled $417,000 in
the 2006 quarter and $246,000 in the 2005 quarter. In the 2006 quarter, federal funds and interest bearing deposits in banks earned an average annual yield of 5.70% on average volume of $29,045,000 compared to an average annual yield of 3.92% on
average volume of $24,869,000 in the 2005 quarter. Increases in short term market interest rates between the two quarters contributed to the higher average annual yield on these instruments.

Interest expense on deposits increased to $5,994,000 in the 2006 quarter from $3,523,000 in the 2005 quarter. Increases in both average balances and the
average annual rates of interest paid on interest bearing deposits were contributing factors. In the 2006 quarter, the average annual cost of interest bearing deposits was 3.62%, compared to 2.39% in the 2005 quarter. The average balance of interest
bearing deposits in the 2006 quarter was $656,420,000, compared to $584,963,000 in the 2005 quarter. Higher market interest rates and loan demand contributed to the increased cost of interest bearing deposits between the two periods.

Interest expense on borrowed funds increased to $600,000 in the 2006 quarter from $509,000 in the 2005 quarter. This increase is primarily attributable
to a higher average balance of borrowed funds in the 2006 quarter compared to the 2005 quarter, as the average cost of borrowed funds declined between the two periods. The average rate of interest paid on borrowed funds was 4.92% in the 2006 quarter
and 5.36% in the 2005 quarter. The average balance of borrowed funds in the 2006 quarter totaled $48,361,000, compared to $38,059,000 in the 2005 quarter.

The resulting net interest income for the 2006 quarter totaled $7,562,000 compared to $6,811,000 for the 2005 quarter. Expressed as an annualized percentage of average interest earning assets for a given period, net
interest income is referred to as net interest margin. BancTrusts net interest margin in the 2006 quarter was 3.70%, compared to 3.69% in the 2005 quarter.

Provision for loan losses in the 2006 quarter totaled $428,000 compared to ($26,000) in the 2005 quarter. The provision for loan losses in a given period represents adjustments to the allowance for loan losses account
that are deemed necessary to adequately provide for potential losses within BancTrusts loan portfolio at a given point in time (see Allowance for Loan Losses). In the 2005 quarter, the provision for loan losses represented
adjustments that lowered the allowance for loan losses account, causing the ($26,000) provision for loan losses amount to have an increasing effect on income. In the 2006 quarter, BancTrust deemed it necessary to increase the allowance for loan
losses, and therefore realized $428,000 of provision for loan losses, which had a decreasing effect on income.

Noninterest income
decreased slightly in the 2006 quarter to $2,318,000, compared to $2,338,000 in the 2005 quarter.

Noninterest expense increased
approximately 4.8%, from $6,525,000 in the 2005 quarter to $6,836,000 in the 2006 quarter. Significant increases in employee benefits expenses associated health care premiums and BancTrusts primary employee incentive plan were the primary
contributing factors to the overall increase in noninterest expense between the two quarters.

Provision for income taxes in the 2006
quarter totaled $756,000 compared to $600,000 in the 2005 quarter. The effective income tax rate increased to 28.9% in the 2006 quarter from 22.6% in the 2005 quarter. In the 2005 quarter, BancTrust realized benefits from the recognition of certain
tax credits that were not available in the 2006 quarter. Consequently, the provision for income taxes was higher in the 2006 quarter than in the 2005 quarter.



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Nine Months Ended September 30, 2006 Compared to Nine Months Ended September 30, 2005.

For the nine months ended September 30, 2006 (YTD 2006) BancTrust earned $38,888,000 of interest income on its interest earning assets,
compared to $30,757,000 for the same period in 2005 (YTD 2005). Increases in the average annual yields and average volumes of interest earning assets accounted for the increase in interest income between the two periods. In YTD 2006,
interest earning assets yielded 6.68% on average volume of $778,559,000, and 5.66% on average volume of $726,250,000 in YTD 2005.

Interest
and fees on loans totaled $31,980,000 in YTD 2006 and $23,285,000 in YTD 2005. Both the average annual yield earned on the loan portfolio and its average balance increased between the two periods. In YTD 2006, loans yielded an average of 7.75% on an
average balance of $551,774,000, compared to an average annual yield of 6.90% on an average balance of $451,324,000 in YTD 2005. Increased loan demand between the two periods (see Loans) contributed to higher average balances,
while increases in market interest rates between the two periods contributed to the higher average yields.

Interest income earned on the
investment securities portfolio declined to $6,198,000 in YTD 2006 from $6,716,000 in YTD 2005. The average balance of the investment securities portfolio declined to $210,374,000 in YTD 2006 from $243,153,000 in YTD 2005. The decrease in the
average balance of the investment securities portfolio was the primary contributing factor to the lower interest income earned from it, given that the average annual yield increased to 3.94% in YTD 2006 from 3.69% in YTD 2005. The lower average
balance was primarily the result of available funds within the investment securities portfolio being redeployed into the higher yielding loan portfolio. Increases in market interest rates contributed to the higher average yield between the two
periods.

Interest income earned on federal funds sold and interest bearing deposits in banks totaled $710,000 in YTD 2006 and $755,000 in
YTD 2005. In YTD 2006, federal funds and interest bearing deposits in banks earned an average annual yield of 5.78% on average volume of $16,412,000 compared to an average annual yield of 3.18% on average volume of $31,773,000 in YTD 2005. Increases
in short term market interest rates between the two periods contributed to the higher average annual yield on these instruments, while increases in BancTrusts loan portfolio contributed to lower average balances.

Interest expense on deposits increased to $15,501,000 in YTD 2006 from $9,162,000 in YTD 2005. Increases in both average balances and the average annual
rates of interest paid on interest bearing deposits were contributing factors. In YTD 2006, the average annual cost of interest bearing deposits was 3.31%, compared to 2.11% in YTD 2005. The average balance of interest bearing deposits in YTD 2006
was $626,616,000, compared to $579,314,000 in YTD 2005. Higher market interest rates and loan demand contributed to the increased cost of interest bearing deposits between the two periods. In YTD 2006, BancTrust purchased approximately $33,000,000
of brokered time deposits, which contributed to the aforementioned increases in both the average balance of interest bearing deposits and their average annual cost.

Interest expense on borrowed funds decreased to $1,645,000 in YTD 2006 from $1,719,000 in YTD 2005. Decreases in both the average balance and average rate of interest paid contributed to the overall decline. In YTD
2006, BancTrust paid an average annual rate of interest on its borrowed funds of 5.12% on average volume of $42,970,000. In YTD 2005, BancTrust paid an average annual rate of interest on its borrowed funds of 5.24% on average volume of $43,838,000.

The resulting net interest income for YTD 2006 totaled $21,743,000 compared to $19,876,000 for YTD 2005. Expressed as an annualized
percentage of average interest earning assets for a given period, net interest income is referred to as net interest margin. BancTrusts net interest margin in YTD 2006 was 3.73%, compared to 3.66% in YTD 2005.

Provision for loan losses generally has the effect of decreasing income, as it represents additions to the allowance for loan losses deemed necessary to
adequately provide for potential losses within BancTrusts loan portfolio (see Allowance for Loan Losses). However, for both YTD 2006 and YTD 2005, BancTrust realized credits in its provision for loan losses account, as
periodic analyses of its loan portfolio indicated that reductions to the allowance for loan losses account were warranted. BancTrust realized a credit provision for loan losses in each of YTD 2006 and YTD 2005 in the amounts of $465,000 and $482,000
respectively.



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Noninterest income increased in YTD 2006 to $6,986,000, compared to $6,709,000 in YTD 2005. Fee income
earned on deposit accounts and trust services accounted for the majority of this increase between the two periods, and were partially offset by decreases in fees associated with the issuance of letters of credit and the termination in late 2005 of
BancTrusts residential mortgage origination business.

Noninterest expense decreased approximately 3.6%, from $20,194,000 in YTD 2005
to $19,459,000 in YTD 2006. Decreases in expenses associated with other real estate owned, deposit insurance premiums, deposit account charge offs and fee reimbursements all contributed to the overall decrease in noninterest expense between the two
periods.

The provision for income taxes in YTD 2006 totaled $3,109,000 compared to $1,777,000 in YTD 2005. The effective income tax rate
increased to 31.9% in YTD 2006 from 25.9% in YTD 2005. In TYD 2005, BancTrust realized benefits from the recognition of certain tax credits that were not available in YTD 2006. Consequently, the provision for income taxes was higher in YTD 2006 than
in YTD 2005.

IMPACT OF NEW ACCOUNTING STANDARDS

See Notes to the Unaudited Condensed Consolidated Financial Statements.

Item 3. Quantitative and Qualitative
Disclosures About Market Risk

Interest sensitivity is one measure of the vulnerability of earnings to changes in the general level of
interest rates. Whenever interest-earning assets reprice to market interest rates at a different pace than interest-bearing liabilities, net interest income performance will be affected favorably or unfavorably, depending on whether or not market
interest rates are in a state of decline or rise. Management is unable to predict future changes in market rates and their impact on BancTrusts profitability. Management believes that the current relationship of interest-earning assets to
interest-bearing liabilities provides adequate protection against any potential negative impact arising from changes in market rates of interest.

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.

Item 4. Controls and Procedures

BancTrust carried out an evaluation, under the supervision and with the participation of its chief executive officer and chief financial officer, of the effectiveness of the design and operation of its disclosure controls and procedures as
of September 30, 2006, pursuant to Rule 13a  15(b) of the Securities Exchange Act of 1934. Based on this evaluation, BancTrusts chief executive officer and chief financial officer concluded that BancTrusts disclosure controls
and procedures, as designed and implemented, are effective in timely alerting them to material information required to be included in its periodic SEC reports. It should be noted that the design of any system of controls is based in part upon
certain assumptions about the likelihood of future events, and there can be no assurance that any design will succeed in achieving its stated goals under all potential future conditions, regardless of how remote.

In addition, BancTrust reviewed its internal controls. There has been no change in BancTrusts internal control over financial reporting during the
last fiscal quarter that has materially affected, or is reasonably likely to materially affect, BancTrusts internal controls over financial reporting.



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Item 5. Other Information

On September 1, 2006, BancTrusts President and Chief Executive Officer, Don J. Giardina was awarded 6,000 shares of restricted common stock, and options to purchase 50,000 shares of common stock at the
price of $19.135, which was the fair market value of BancTrusts common stock on the date of grant. BancTrust will recognize expenses associated with both the restricted stock grant and the options grant over a three year period, until both are
fully vested. See Notes to the Unaudited Condensed Consolidated Financial Statements (Stock Based Compensation) in Item 1 (Financial Statements). See also, Current Reports on Form 8-K, dated August 16 and
September 1, 2006.

PART II  OTHER INFORMATION

Item 1.A Risk Factors

There were no material changes from risk factors as previously disclosed
in BancTrusts Form 10-K for the period ended December 31, 2005 in response to Item 1A. to Part 1 of Form 10-K.

Item 6.
Exhibits



|                 |  |                                                                                                                                                                           
|---------------- |  | --------------------------------------------------------------------------------------------------------------------------------------------------------------------------
|Exhibit No. 31.1 |  | Certification of Chief Executive Officer pursuant to Section 302 of the Sarbanes  Oxley Act of 2002                                                                      
|                 | 
|Exhibit No. 31.2 |  | Certification of Chief Financial Officer pursuant to Section 302 of the Sarbanes  Oxley Act of 2002                                                                      
|                 | 
|Exhibit No. 32.1 |  | Chief Executive Officer and Chief Financial Officer Certification pursuant to 18 U.S.C. Section 1350, as adopted pursuant to Section 906 of the Sarbanes-Oxley Act of 2002



20



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SIGNATURES

Pursuant to the requirements of the Securities Exchange Act of 1934, the registrant has duly caused this report to be signed on its behalf by the undersigned, thereunto duly authorized.



|                        |  |                                                
|----------------------- |  | -----------------------------------------------
|                        |  | The Peoples BancTrust Company, Inc.            
|                        | 
|Date: November 13, 2006 |  | /s/ Don J. Giardina                            
|                        |  | Don J. Giardina                                
|                        |  | President and Chief Executive Officer          
|                        | 
|Date: November 13, 2006 |  | /s/ Andrew C. Bearden, Jr.                     
|                        |  | Andrew C. Bearden, Jr.                         
|                        |  | Executive Vice President and                   
|                        |  | Chief Financial Officer                        
|                        | 
|Date: November 13, 2006 |  | /s/ Thomas P. Wilbourne                        
|                        |  | Thomas P. Wilbourne                            
|                        |  | Vice President and Principal Accounting Officer



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