# U.S. SECURITIES AND EXCHANGE COMMISSION 
Washington, D.C. 20549

# FORM 10-QSB

(Mark One)

|[X] | Quarterly report under Section 13 or 15(d) of the Securities Exchange Act of 1934
|--- | ---------------------------------------------------------------------------------
|    | For the quarter ended September 30, 2003                                         

|[   ] | Transition report under Section 13 or 15(d) of the Exchange Act
|----- | ---------------------------------------------------------------
|      | For the transition period from ___________ to _____________    

Commission file number
333-25179

PEOPLE'S COMMUNITY CAPITAL CORPORATION(Exact name of registrant as specified in its charter)

|SOUTH CAROLNA            |  | 58-2287073                          
|------------------------ |  | ------------------------------------
|(State of Incorporation) |  | (I.R.S. Employer Identification No.)

125 PARK AVENUE, S.W., AIKEN, SOUTH CAROLINA 29801
(Address of principal executive offices)   (Zip Code)

(803) 641-0142(Issuer's Telephone Number, Including Area Code)

NOT APPLICABLE(Former Name, Former Address and Former Fiscal Year, if Changed Since Last Report)

Check whether the issuer (1) has filed all reports required to be filed by Section 13 or 15(d) of the
Exchange Act during the past 12 months (or for such shorter period that the registrant was required to file such reports), and (2)
has been subject to such filing requirements for the past 90 days.  Yes X   No

State the number of shares  outstanding of each of the issuer's  classes of common equity,  as of
the latest  practicable date:  1,084,130 shares of common stock, par value $.01 per share,  outstanding at
November 10, 2003.

Transitional Small Business Disclosure
Format (check one):  Yes    NoX

---

# PART I  FINANCIAL
INFORMATION

# Item 1. Financial
Statements.

# Peoples
Community Capital Corporation Consolidated Balance Sheets

|                                                                     | September 30, | December 31,
|-------------------------------------------------------------------- | ------------- | ------------
|
|
|Assets                                                               |               |             
|Cash and due from banks                                              |               |             
|Federal funds sold                                                   |               |             
|Short-term investments                                               |               |             
|Investment securities - available for sale                           |               |             
|Investment securities - held to maturity (market value of $4,973,639 |               |             
|and $4,988,839 at September 30, 2003 and December 31, 2002           |               |             
|respectively)                                                        |               |             
|Loans receivable, net                                                |               |             
|Properties and equipment, net                                        |               |             
|Accrued interest receivable                                          |               |             
|Other real estate owned                                              |               |             
|Other assets                                                         |               |             
|                                                                     |               |             
|Total assets                                                         |               |             
|                                                                     |               |             
|Liabilities and Shareholders' Equity                                 |               |             
|Liabilities:                                                         |               |             
|Non-interest bearing deposits                                        |               |             
|Interest bearing deposits                                            |               |             
|                                                                     |               |             
|Total deposits                                                       |               |             
|Accrued interest payable                                             |               |             
|Federal Home Loan Bank advance                                       |               |             
|Other borrowings                                                     |               |             
|Accrued expenses and other liabilities                               |               |             
|                                                                     |               |             
|Total liabilities                                                    |               |             
|                                                                     |               |             
|Shareholders' equity:                                                |               |             
|Common stock, $.01 par value; 10,000,000 shares authorized,          |               |             
|1,100,583 shares issued at September 30, 2003 and 1,046,193 at       |               |             
|December 31, 2002                                                    |               |             
|Additional paid-in-capital                                           |               |             
|Retained earnings                                                    |               |             
|Accumulated other comprehensive income                               |               |             
|                                                                     |               |             
|Total shareholders' equity                                           |               |             
|                                                                     |               |             
|Total liabilities and shareholders' equity                           |               |             
|                                                                     |               |             

See
accompanying Notes to Consolidated Financial Statements.

2

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# Peoples
Community Capital Corporation Consolidated Statements of Income (Unaudited)

|                                             | For the three months | For the nine months
|-------------------------------------------- | -------------------- | -------------------
|
|
|Interest income:                             |                      |                    
|Loans, including fees                        |                      |                    
|Federal funds sold                           |                      |                    
|Securities, short-term investments, and cash |                      |                    
|                                             |                      |                    
|Total interest income                        |                      |                    
|                                             |                      |                    
|Interest expense:                            |                      |                    
|Deposits                                     |                      |                    
|Other borrowings                             |                      |                    
|                                             |                      |                    
|Total interest expense                       |                      |                    
|                                             |                      |                    
|Net interest income                          |                      |                    
|Provision for loan losses                    |                      |                    
|                                             |                      |                    
|Net interest income after provision          |                      |                    
|for loan losses                              |                      |                    
|                                             |                      |                    
|Non-interest income:                         |                      |                    
|Service charges on deposit accounts          |                      |                    
|Realized net gains on sales of securities    |                      |                    
|Insurance and brokerage commissions          |                      |                    
|Other                                        |                      |                    
|                                             |                      |                    
|Total non-interest income                    |                      |                    
|                                             |                      |                    
|Non-interest expenses:                       |                      |                    
|Salaries and employee benefits               |                      |                    
|Occupancy and equipment                      |                      |                    
|Consulting and professional fees             |                      |                    
|Customer related                             |                      |                    
|General operating                            |                      |                    
|Other                                        |                      |                    
|                                             |                      |                    
|Total non-interest expenses                  |                      |                    
|                                             |                      |                    
|Income before income taxes                   |                      |                    
|Income tax provision                         |                      |                    
|                                             |                      |                    
|Net income                                   |                      |                    
|                                             |                      |                    
|Earnings per share:                          |                      |                    
|Basic                                        |                      |                    
|Diluted                                      |                      |                    

See
accompanying Notes to Consolidated Financial Statements.

3

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# Peoples
Community Capital Corporation Statement of Changes in Shareholders Equity and
Comprehensive Income For the Nine Months
ended September 30, 2002 and September 30, 2003(Unaudited)

|                                     |  |  |  |           | Accumulated |  
|------------------------------------ |  |  |  | --------- | ----------- | -
|
|
|
|Balance, December 31, 2001           |  |  |  | 991,845   |             | $
|                                     |  | 
|Comprehensive Income:                |  | 
|                                     |  | 
|Net income                           |  |  |  | -         |             |  
|Accumulated other comprehensive      |  | 
|income net of income tax of $34,754  |  |  |  | -         |             |  
|                                     |  |  |  |           |             |  
|Total comprehensive income           |  |  |  | -         |             |  
|                                     |  |  |  |           |             |  
|Stock split effected in the form     |  | 
|of a stock dividend (5%)             |  |  |  | 49,379    |             |  
|                                     |  | 
|Cash paid in lieu of stock dividends |  |  |  | -         |             |  
|                                     |  | 
|Stock options exercised              |  |  |  | 4,969     |             |  
|                                     |  |  |  |           |             |  
|Balance, September 30, 2002          |  |  |  | 1,046,193 |             |  
|                                     |  |  |  |           |             |  
|                                     |  | 
|Balance, December 31, 2002           |  |  |  | 1,046,193 |             |  
|                                     |  | 
|Comprehensive Income:                |  | 
|                                     |  | 
|Net income                           |  |  |  | -         |             |  
|                                     |  | 
|Accumulated other comprehensive      |  | 
|(loss) net of income tax benefit of  |  | 
|$27,198                              |  |  |  | -         |             |  
|                                     |  |  |  |           |             |  
|Total comprehensive income           |  |  |  | -         |             |  
|                                     |  |  |  |           |             |  
|Stock split effected in the form     |  | 
|of a stock dividend (5%)             |  |  |  | 52,090    |             |  
|                                     |  | 
|Cash paid in lieu of stock dividends |  |  |  | -         |             |  
|                                     |  | 
|Stock options exercised              |  |  |  | 2,300     |             |  
|                                     |  |  |  |           |             |  
|Balance, September 30, 2003          |  |  |  | 1,100,583 |             | $
|                                     |  |  |  |           |             |  

See
accompanying Notes to Consolidated Financial Statements.

4

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# Peoples
Community Capital Corporation Consolidated Statements of Cash Flows

# (Unaudited)

|                                                                             | For the nine months
|---------------------------------------------------------------------------- | -------------------
|
|
|Operating activities:                                                        |                    
|Net income                                                                   |                    
|Adjustments to reconcile net income to net cash provided by                  |                    
|operating activities:                                                        |                    
|Depreciation and amortization                                                |                    
|Provision for loan losses                                                    |                    
|Amortization of held to maturity investments                                 |                    
|Changes in deferred and accrued amounts:                                     |                    
|Other assets and accrued interest receivable                                 |                    
|Accrued expenses and other liabilities                                       |                    
|                                                                             |                    
|Net cash provided by operating activities                                    |                    
|                                                                             |                    
|Investing activities:                                                        |                    
|Activity in securities available for sale:                                   |                    
|Sales                                                                        |                    
|Purchases                                                                    |                    
|Maturities and calls                                                         |                    
|Net decrease (increase) in short-term investments                            |                    
|Purchase of property and equipment                                           |                    
|Loan originations and principal collections - net                            |                    
|Net increase in federal funds sold                                           |                    
|                                                                             |                    
|Net cash used for investing activities                                       |                    
|                                                                             |                    
|Financing activities:                                                        |                    
|Issuance of stock                                                            |                    
|Net increase in deposits                                                     |                    
|Net (decrease) increase in other borrowings                                  |                    
|Payment of cash dividends in lieu of stock for fractional shares             |                    
|                                                                             |                    
|Net cash provided by financing activities                                    |                    
|                                                                             |                    
|Net (decrease) increase in cash and due from banks                           |                    
|Cash and due from banks at  beginning of period                              |                    
|                                                                             |                    
|Cash and due from banks at end of period                                     |                    
|                                                                             |                    
|Supplemental disclosure:                                                     |                    
|Cash paid during the period for interest                                     |                    
|                                                                             |                    
|Income taxes paid                                                            |                    
|                                                                             |                    
|Unrealized net loss(gain)on securities available for sale, net of income tax |                    
|                                                                             |                    

See
accompanying Notes to Consolidated Financial Statements.

5

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# Peoples
Community Capital Corporation Notes to Consolidated
Financial Statements(Unaudited)

# Note 1. Basis of
Presentation

The
accompanying unaudited consolidated financial statements have been prepared in accordance
with accounting principles generally accepted in the United States of America for interim
financial information and with the instructions to Form 10-QSB and Item 310(b) of
Regulation S-B of the Securities and Exchange Commission. Accordingly, they do not include
all of the information and footnotes required by accounting principles generally accepted
in the United States of America for complete financial statements. However, in the opinion
of management, all adjustments (consisting of normal recurring adjustments) considered
necessary for a fair presentation have been included. Operating results for the nine
months ended September 30, 2003 are not necessarily indicative of the results that may be
expected for the year ending December 31, 2003. For further information, please refer to
the consolidated financial statements and footnotes thereto for the Companys fiscal
year ended December 31, 2002, included in the Companys Form 10-KSB for the year
ended December 31, 2002.

# Note 2. Summary of
organization

Peoples
Community Capital Corporation was incorporated in South Carolina on February 26, 1997 for
the purpose of operating as a bank holding company. Our wholly-owned subsidiary,
Peoples Community Bank of South Carolina, commenced business on September 22, 1997
and is primarily engaged in the business of accepting savings and demand deposits and
providing mortgage, consumer and commercial loans to the general public. Our bank operates
two banking centers located in Aiken and one located in North Augusta, South Carolina. In
December 1999, our bank formed a subsidiary, Peoples Financial Services, Inc., that
provides comprehensive financial planning services in addition to full service brokerage,
including stocks, bonds, mutual funds, and insurance products. In June 2003, we opened a
loan production office in rented space in Charleston, South Carolina. The purpose of this
office is to solicit loans, primarily in the real estate construction market.

# Note 3. Earnings per
share

The
following reconciles the numerator and denominator of the basic and diluted earnings per
share computation:

|                                                   | Three months ended September 30, | Nine months ended September 30,
|-------------------------------------------------- | -------------------------------- | -------------------------------
|
|Numerator:                                         |                                  |                                
|(included in basic and diluted earnings per share) |                                  |                                
|                                                   |                                  |                                
|Denominator:                                       |                                  |                                
|Weighted average common shares outstanding for:    |                                  |                                
|Basic earnings per share                           |                                  |                                
|Dilutive securities:                               |                                  |                                
|Stock options - Treasury stock method              |                                  |                                
|                                                   |                                  |                                
|Diluted earnings per share                         |                                  |                                
|                                                   |                                  |                                
|The average market price used in calculating       |                                  |                                
|assumed number of shares                           |                                  |                                
|                                                   |                                  |                                

6

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# Note 4. Stock option plan

SFAS
No. 123, Accounting for Stock-Based Compensation, encourages all
entities to adopt a fair value based method of accounting for employee stock compensation
plans, whereby compensation cost is measured at the grant date based on the value of the
award and is recognized over the service period, which is usually the vesting period.
However, it also allows an entity to continue to measure compensation cost for those plans
using the intrinsic value based method of accounting prescribed by Accounting Principles
Board (APB) Opinion No. 25, Accounting for Stock Issued to Employees,
whereby compensation cost is the excess, if any, of the quoted market price of the stock
at the grant date (or other measurement date) over the amount an employee must pay to
acquire the stock. Stock options issued under our stock option plan have no intrinsic
value at the grant date, and under Opinion No. 25, no compensation cost is recognized.

The
Company sponsors a stock option plan (the Plan) for the benefit of the directors, officers
and employees. The Board may grant up to 289,406 options (adjusted for 5% stock dividends
issued March 2001, January 2002, and January 2003). During the first quarter of 2003, the
Board granted 15,000 stock options at an exercise price of $12.90 that vest over the next
two years and expire in 2013. During the second quarter of 2003, the Board granted 1,500
stock options at an exercise price of $15.00 which vest over three years and expire in
2013. The Company has adopted the disclosure-only provisions of SFAS No. 123,
Accounting for Stock-Based Compensation. Accordingly, no compensation
cost has been recognized for the stock option plan. Had compensation cost been
determined based on the fair value at the grant date for the above stock option awards
consistent with the provisions of SFAS No. 123, the Companys net income and earnings
per share would have been adjusted to the proforma amounts indicated below:

|                                 | For the three months ended | For the nine months ended
|-------------------------------- | -------------------------- | -------------------------
|
|
|Net income as reported           |                            |                          
|Net income - Proforma            |                            |                          
|Earnings per share - As reported |                            |                          
|Basic                            |                            |                          
|Diluted                          |                            |                          
|Earnings per share - Proform     |                            |                          
|Basic                            |                            |                          
|Diluted                          |                            |                          

The
fair value of the option grant is estimated on the date of grant using the Black-Scholes
option pricing model. The risk free interest rate used was 4.77%, the expected option life
was ten years, the assumed dividend rate was zero and the expected volatility was 8.0%.

# Note 5. Recently issued
accounting standards

In
December 2002, the FASB issued SFAS No. 148, Accounting for Stock-based
CompensationTransition and Disclosure, an amendment of FASB Statement No. 123,
Accounting for Stock-Based Compensation, to provide alternative methods of
transition for a voluntary change to the fair value based method of accounting for
stock-based employee compensation. SFAS No. 148 also amends the disclosure provisions
of SFAS No. 123 and Accounting Pronouncement Board (APB) Opinion
No. 28, Interim

7

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Financial Reporting, to require
disclosure in the summary of significant accounting policies of the effects of an
entitys accounting policy with respect to stock-based employee compensation on
reported net income and earnings per share in annual and interim financial statements.
While SFAS No. 148 does not amend SFAS No. 123 to require companies to account
for employee stock options using the fair value method, the disclosure provisions of SFAS
No. 148 are applicable to all companies with stock-based employee compensation,
regardless of whether they account for that compensation using the fair value method of
SFAS No. 123 or the intrinsic value method of APB Opinion No. 25. The provisions
of SFAS No. 148 are effective for annual financial statements for fiscal years ending
after December 15, 2002, and for financial reports containing condensed financial
statements for interim period beginning after December 15, 2002. The Company has
adopted the disclosure provisions of SFAS No. 148 which had no impact on the
financial condition or operating results of the Company.

In
April 2003, the FASB issued SFAS No. 149, Amendment of Statement 133 on
Derivative Instruments and Hedging Activities. SFAS No. 149 amends and
clarifies accounting for derivative instruments, including certain derivative instruments
embedded in other contracts and loan commitments that relate to the origination of
mortgage loans held for sale, and for hedging activities under SFAS No. 133. SFAS
No. 149 is generally effective for contracts entered into or modified after
June 30, 2003. The adoption of SFAS No. 149 did not have a material impact on
the financial condition or operating results of the Company.

In
May 2003, the FASB issued SFAS No. 150, Accounting for Certain Financial
Instruments with Characteristics of both Liabilities and Equity. SFAS No. 150
establishes standards for how an issuer classifies and measures certain financial
instruments with characteristics of both liabilities and equity. It requires that an
issuer classify a financial instrument that is within its scope as a liability (or an
asset in some circumstances.) Many of those instruments were previously classified as
equity. SFAS No. 150 is generally effective for financial instruments entered into or
modified after May 31, 2003, and otherwise is effective at the beginning of the first
interim period beginning after June 15, 2003. The adoption of SFAS No. 150 did
not have a material impact on the financial condition or operating results of the Company.

In
June 2003, the American Institute of Certified Public Accountants (AICPA) issued an
exposure draft of a proposed Statement of Position (SOP), Allowance for Credit
Losses. The proposed SOP addresses the recognition and measurement by creditors of the
allowance for credit losses related to all loans, as that term is defined in SFAS No. 114,
Accounting by Creditors for Impairment of a Loan. The proposed SOP provides that
the allowance for credit losses reported on a creditors balance sheet should consist
only of (1) a component for individual loan impairment recognized and measured pursuant to
FASB Statement No. 114 and (2) one or more components of collective loan impairment
recognized pursuant to FASB Statement No. 5, Accounting for Contingencies, and
measured in accordance with the guidance in the proposed SOP. The provisions of the
proposed SOP would be effective for financial statements for fiscal years beginning after
December 15, 2003, with earlier application permitted. The effect of initially applying
the provisions of the proposed SOP would be reported as a change in accounting estimate.
Comments on the exposure draft were due by September 19, 2003. The effect on the financial
condition or operating results of the Company related to the adoption of this proposed SOP
have not been determined, but would most likely be material.

8

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# Item 2.  
Managements Discussion and Analysis or Plan of Operation.

This
discussion and analysis is intended to assist the reader in understanding our financial
condition and results of operations.

This
Report contains statements which constitute forward-looking statements within the meaning
of Section 27A of the Securities Act of 1933 and the Securities Exchange Act of 1934.
These statements are based on many assumptions and estimates and are not guarantees of
future performance. Our actual results may differ materially from those projected in any
forward-looking statements, as they will depend on many factors about which we are unsure,
including many factors which are beyond our control. The words may,
would, could, will, expect,
anticipate, believe, intend, plan, and
estimate, as well as similar expressions, are meant to identify such
forward-looking statements. Potential risks and uncertainties include, but are not limited
to:

| | o | significant increases in competitive pressure in the banking and financial services industries;
| | - | -----------------------------------------------------------------------------------------------

| | o | changes in the interest rate environment which could reduce anticipated or actual margins;
| | - | ------------------------------------------------------------------------------------------

| | o | changes in political conditions or the legislative or regulatory environment;
| | - | -----------------------------------------------------------------------------

| | o | general economic conditions, either nationally or regionally and especially in primary
service area, becoming less favorable than expected resulting in, among other things, a
deterioration in credit quality;
| | - | ---------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------

| | o | changes occurring in business conditions and inflation;
| | - | -------------------------------------------------------

| | o | changes in technology;
| | - | ----------------------

| | o | changes in monetary and tax policies;
| | - | -------------------------------------

| | o | the level of allowance for loan loss;
| | - | -------------------------------------

| | o | the rate of delinquencies and amounts of charge-offs;
| | - | -----------------------------------------------------

| | o | the rates of loan growth;
| | - | -------------------------

| | o | adverse changes in asset quality and resulting credit risk-related losses and expenses;
| | - | ---------------------------------------------------------------------------------------

| | o | changes in the securities markets; and
| | - | --------------------------------------

| | o | other risks and uncertainties detailed from time to time in our filings with the
Securities and Exchange Commission.
| | - | --------------------------------------------------------------------------------------------------------------------

9

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CRITICAL ACCOUNTING
POLICIES

We
have adopted various accounting policies which govern the application of accounting
principles generally accepted in the United States of America in the preparation of our
financial statements. The significant accounting policies of the company are described in
the footnotes to the consolidated financial statements at December 31, 2002 as filed on
our 10-KSB for that date.

Certain
accounting policies involve significant judgments and assumptions by management which have
a material impact on the carrying value of certain assets and liabilities; management
considers such accounting policies to be critical accounting policies. The judgments and
assumptions used by management are based on historical experience and other factors, which
are believed to be reasonable under the circumstances. Because of the nature of the
judgments and assumptions made by management, actual results could differ from these
judgments and estimates which could have a material impact on the carrying values of
assets and liabilities and the results of operations of our company.

We
believe the allowance for loan losses is a critical accounting policy that requires the
most significant judgments and estimates used in preparation of our consolidated financial
statements. Refer to the discussion under Allowance for Loan Losses section of this report
for a detailed description of our estimation process and methodology related to the
allowance for loan losses.

FINANCIAL CONDITION AND
RESULTS OF OPERATIONS

EARNINGS REVIEW  Comparison of
the three months ended September 30, 2003 to the three months ended September 30, 2002

Our
net income for the third quarter of 2003 was $292,694 compared to $280,026 for the same
period last year, an increase of 5%. The basic income per share remained at $.27. The
improvement in earnings resulted primarily from the continued growth in the level of
earning assets, a reduction in the loan loss provision, an increase in certain
non-interest income categories, and a decrease in non-interest expense for the period. The
level of average earning assets was $101.5 million for the three months ended September
30, 2003 as compared to $90.9 million for the three months ended September 30, 2002.

Net
interest income represents the difference between interest received or accrued on interest
earning assets and interest paid or accrued on interest bearing liabilities. The following
presents, in a tabular form, average balance sheets that highlight the main components of
interest earning assets and interest bearing liabilities, on an annualized basis, for the
three month periods ended September 30, 2003 and 2002. Yields are derived by dividing
income or expense by the average balance of the corresponding assets or liabilities.
Average balances have been derived from daily averages.

10

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|                              | Three months ended September 30, 2003 | Three months ended September 30, 2002
|----------------------------- | ------------------------------------- | -------------------------------------
|
|
|ASSETS                        |                                       |                                      
|Federal funds sold            |                                       |                                      
|Cash & short-term investments |                                       |                                      
|Securities                    |                                       |                                      
|Loans                         |                                       |                                      
|                              |                                       |                                      
|Total earnings assets         |                                       |                                      
|                              |                                       |                                      
|Cash and due from banks       |                                       |                                      
|Premises and equipment        |                                       |                                      
|Other assets                  |                                       |                                      
|Allowance for loan losses     |                                       |                                      
|                              |                                       |                                      
|Total assets                  |                                       |                                      
|                              |                                       |                                      
|LIABILITIES & EQUITY          |                                       |                                      
|Interest-bearing deposits:    |                                       |                                      
|Transaction accounts          |                                       |                                      
|Money market accounts         |                                       |                                      
|Savings deposits              |                                       |                                      
|Time deposits                 |                                       |                                      
|                              |                                       |                                      
|Total interest bearing        |                                       |                                      
|deposits                      |                                       |                                      
|Interest-bearing borrowings   |                                       |                                      
|                              |                                       |                                      
|Total interest bearing        |                                       |                                      
|liabilities                   |                                       |                                      
|                              |                                       |                                      
|Demand deposits               |                                       |                                      
|Other liabilities             |                                       |                                      
|Shareholders' equity          |                                       |                                      
|                              |                                       |                                      
|Total liabilities &           |                                       |                                      
|shareholders' equity          |                                       |                                      
|                              |                                       |                                      
|Net interest spread           |                                       |                                      
|Net interest income/margin    |                                       |                                      

Net
interest income was $908,085 for the three months ended September 30, 2003 as compared to
$934,554 for the three months ended September 30, 2002, representing a 3% decrease. The
net interest margin (net interest income divided by average earning assets) was 3.58% for
the three months ended September 30, 2003 compared to the net interest margin of 4.11% for
the three months ended September 30, 2002. Net yields were lower in the third quarter this
year as yields on earning assets have declined from the prior year due to the current
interest rate environment. Rates paid on deposits have continued to decline as well, but
there was not as much opportunity to decrease rates to the extent that asset yields
decreased.

Interest
income for the third quarter of 2003 was $1,215,575 compared to $1,335,534 for the same
period in 2002. The volume of total earnings assets increased by approximately $11 million
between the two periods, but the average rate earned on assets decreased from 5.88% to
4.79%. The largest component of interest income was interest and fees on loans amounting
to $974,909 for the quarter ended September 30, 2003 compared to $1,049,716 for the
comparable prior year period. Average loan balances increased by $3.6 million. The overall
rate on the loan portfolio decreased from 7.23% for the three months ended September 30,
2002 to 6.32% for the three-month period ended September 30, 2003. Interest earned on
federal funds sold decreased from $33,587 for the third quarter of 2002 to $15,759 for the
third quarter of 2003. The average balances of

11

---

federal funds sold  decreased $1.3 million, but the yield fell from 1.69% to 0.94%. The
securities portfolio earned $203,403 for the third quarter of 2003 with a yield of 2.68%.
For the third quarter of 2002, the portfolio earned $235,986 with a yield of 4.10%. The
average balance outstanding increased $7.3 million.

Interest
expense decreased from $400,980 for the three months ended September 30, 2002 to $307,490
for the three months ended September 30, 2003. The decrease was the direct result of the
decrease in rates paid on deposits and other liabilities, from an average of 2.20% for the
third quarter last year to an average rate of 1.53% this year. Average interest-bearing
liabilities, primarily deposits, increased by $7.5 million, or 10%. Other interest-bearing
borrowings remained largely unchanged.

Non-interest Income

Non-interest
income for the three-month period ended September 30, 2003 was $273,310 compared to
$325,172 for the same period in 2002. Service charges on deposit accounts increased by
$68,791, primarily due to a new overdraft product. Losses on the product are recorded in
non-interest expense. Included in net income for the third quarter of 2002 were net gains
on sale of securities in the amount of $75,548. There were no security sales in the third
quarter of 2003. Gross income from the sale of non deposit products was down $65,570 for
the period as low interest rates had an effect on annuity product sales. Other
non-interest income increased due to increased fees from brokered mortgage loans as
customers took advantage of low mortgage rates for new mortgages and refinancing
activities.

Non-interest Expense

Non-interest
expense for the quarters ended September 30, 2003 and 2002 were $723,445 and $758,785,
respectively, a difference of $35,340, or 5%. The decrease can largely be attributed to
the decrease in salaries associated with lower commissions being paid on non-deposit
products as sales of those products have declined due to low interest rates. Customer
related expenses increased due to a new overdraft product. Fees for the administration of
the product are charged to customer related expenses. The increase in other non-interest
expense is due to increased advertising and the charge-off losses from the new overdraft
product.

EARNINGS REVIEW  Comparison of
the nine months ended September 30, 2003 to the nine months ended September 30, 2002

Our
net income for the nine months ended September 30, 2003 was $821,366 compared to $722,469
for the same period last year. The basic income per share increased to $.75 compared to
$.69 for the same period in 2002, as adjusted for the stock dividends paid in 2002 and
2003. This improvement in earnings reflects the continuing growth in the level of earning
assets since the bank commenced operations, a reduction in the loan loss reserve, and
improvements in non-interest income. The level of average earning assets was $99.8 million
for the nine months ended September 30, 2003 as compared to $86.6 million for the nine
months ended September 30, 2002.

The
following presents, in a tabular form, yield and rate data for interest-bearing balance
sheet components during the nine month periods ended September 30, 2003 and 2002, along
with average balances and the related interest income and interest expense amounts.

12

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|                                   | Nine months ended September 30, 2003 | Nine months ended September 30, 2002
|---------------------------------- | ------------------------------------ | ------------------------------------
|
|
|ASSETS                             |                                      |                                     
|Federal funds sold                 |                                      |                                     
|Cash and short-term investments    |                                      |                                     
|Securities                         |                                      |                                     
|Loans                              |                                      |                                     
|                                   |                                      |                                     
|Total earning assets               |                                      |                                     
|Cash and due from banks            |                                      |                                     
|Premises and equipment             |                                      |                                     
|Other assets                       |                                      |                                     
|Allowance for loan losses          |                                      |                                     
|                                   |                                      |                                     
|Total assets                       |                                      |                                     
|                                   |                                      |                                     
|LIABILITIES & EQUITY               |                                      |                                     
|Interest-bearing deposits:         |                                      |                                     
|Transaction accounts               |                                      |                                     
|Money market accounts              |                                      |                                     
|Savings deposits                   |                                      |                                     
|Time deposits                      |                                      |                                     
|                                   |                                      |                                     
|Total interest bearing deposits    |                                      |                                     
|Interest-bearing borrowings        |                                      |                                     
|                                   |                                      |                                     
|Total interest-bearing liabilities |                                      |                                     
|                                   |                                      |                                     
|Demand deposits                    |                                      |                                     
|Other liabilities                  |                                      |                                     
|Shareholders' equity               |                                      |                                     
|                                   |                                      |                                     
|Total liabilities &                |                                      |                                     
|shareholders equity                |                                      |                                     
|                                   |                                      |                                     
|Net interest spread                |                                      |                                     
|                                   |                                      |                                     
|Net interest income/margin         |                                      |                                     
|                                   |                                      |                                     

Net
interest income was $2,666,243 for the nine months ended September 30, 2003 as compared to
$2,643,010 for the nine months ended September 30, 2002. The net interest margin (net
interest income divided by average earning assets) was 3.56% for the nine months ended
September 30, 2003 compared to the net interest margin of 4.07% for the nine months ended
September 30, 2002.

Interest
income for the nine months ending September 30, 2003 was $3,685,432 compared to $3,930,822
for the same period in 2002. The volume of total earning assets increased from $86.6
million at September 30, 2002 to $99.8 million at September 30, 2003. The largest
component of interest income was interest and fees on loans amounting to $2,986,056 for
the nine months ended September 30, 2003 compared to $3,053,788 for the comparable prior
year period. The overall rate on the loan portfolio decreased from 7.36% for the nine
months ended September 30, 2002 to 6.51% for the nine month period ended September 30,
2003 as we encountered a period of low interest rates. Average loan balances, however,
increased by $5.8 million. The balance in federal funds sold increased by $1.6 million,
but the average yield fell from 1.68% to 1.10%. Interest income on securities decreased
between the two periods as the average balances were $4.4 million higher, but the yield
fell from 4.28% to 2.72%.

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Interest
expense decreased from $1,287,812 for the nine months ended September 30, 2002 to
$1,019,189 for the nine months ended September 30, 2003 due to a decrease in average rates
paid on liabilities from 2.45% to 1.71%. This decrease occurred even though the size of
interest-bearing liabilities, primarily deposits, increased from $70.0 million to $79.6
million, an increase of 14%. Other interest-bearing borrowings and expense increased due
to a $2,500,000 loan from the Federal Home Loan Bank in April 2002 at the rate of 3.65%
which has been outstanding for all of 2003 unlike 2002.

Non-interest Income

Non-interest
income for the nine months ended September 30, 2003 was $836,166 compared to $811,081 for
the same period in 2002. Of this total, $455,332 represented service charges on deposit
accounts for the nine months ended September 30, 2003 compared to $354,370 for the
comparable period in 2002. The increase in income from deposit service charges is due
largely to a new overdraft product. Losses on the product are recorded in non-interest
expense. We had net gains on sale of securities of $67,994 for the nine months ended
September 30, 2003 compared to net gains of $86,886 during the same period last year.
Non-deposit fees from our financial services subsidiary were $54,680 through September 30,
2003 compared to $186,038 through the same period in 2002. The decrease from last year can
be attributed to low interest rates that had a negative effect on annuity product sales.
Other non-interest income increased from $183,787 for the nine months ended September 30,
2002 to $258,160 for the nine months ended September 30, 2003 in large part due to
increased fees from brokered mortgage loans as customers took advantage of low mortgage
rates for new mortgages and refinancing activities. Brokered mortgage fees increased from
$103,356 to $152,846 for the period.

Non-interest Expense

Non-interest
expense for the nine months ended September 30, 2003 and 2002 was $2,194,912 and
$2,172,185, respectively, a 1% increase. The largest component of non-interest expense for
the nine months ended September 30, 2003 and 2002 was salaries and employee benefits of
$1,256,380 and $1,308,110, respectively. Salaries and employee benefits expense decreased
4% primarily due to lower commissions being paid on non-deposit products as sales of these
products have declined due to low interest rates. Occupancy and equipment expense
increased from $246,736 to $264,279, or 7%, due to increased depreciation and due to rent
paid on a loan production office in Charleston that opened in June 2003. Consulting and
professional fees increased from $113,469 to $125,898, or 11%, largely due to legal fees
paid in the normal course of business relating to collection of problem loans. General
operating expenses remained virtually unchanged overall between the two periods at
$306,562 in 2002 and $309,170 in 2003. Other non-interest expense increased from $118,374
to $139,445, or 18%, due mainly to increases in advertising and charge-offs related to the
new overdraft product.

Provision for Loan Losses

The
provision for loan losses was $78,258 and $193,261, respectively, for the nine months
ended September 30, 2003 and 2002, bringing the total reserve balance to $915,000 and
$800,000 at September 30, 2003 and 2002, respectively. This amount represents 1.48% of
gross loans at September 30, 2003, compared to 1.33% at September 30, 2002. It reflects
our estimate of the amounts necessary to maintain the allowance for loan losses at a level
believed to be adequate in relation to the current size, mix and quality of the loan
portfolio. The reserve has specifically been increased in relation to gross loans due to
the uncertainty that may exist in our portfolio with regards to current economic
conditions existing in our market. See the description of the allowance for loan losses
below. However, our judgment as to the adequacy of the allowance is based upon a

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number of  assumptions  about future  events
that we believe to be reasonable, but
which may or may not be accurate. Because of the inherent uncertainty of assumptions made
during the evaluation process, there can be no assurance that charge-offs in future
periods will not exceed the allowance for loan losses or that additional increases in the
loan loss allowance will not be required. We had $10,483 in loans that were classified as
non-accrual at September 30, 2003 compared to $475,785 in non-accrual loans at September
30, 2002. The non-accrual balance at September 30, 2002 consisted primarily of loans that
were either secured by real estate or guaranteed by a governmental agency. The non-accrual
balance at September 30, 2002 resulted in part in a foreclosure of real estate now shown
on the balance sheet as other real estate owned in the amount of $378,880. There were net
charge-offs of $3,258 for the nine months ended September 30, 2003 and $30,261 of net
charge-offs for the nine months ended September 30, 2002.

BALANCE SHEET REVIEW

Total
consolidated assets grew by $7.3 million from $102,015,141 at December 31, 2002 to
$109,320,455 at September 30, 2003. The increase was generated primarily through deposit
growth of $7.1 million. The funds were invested in our bond portfolio for an increase in
investment securities of $7.3 million.

Loans

Outstanding
loans represent the largest component of earning assets as of September 30, 2003 at
$60,714,910, or approximately 59% of total earning assets. Net loans increased $765,853,
or 1%, since December 31, 2002. Growth in loans slowed for the period as many loans
reached maturity and were paid out, and new loan growth has been affected by the recent
economic conditions.

The
interest rates charged on loans vary with the degree of risk, maturity and amount of the
loan. Competitive pressures, money market rates, availability of funds, and government
regulations also influence interest rates. The average yield on our loans for the nine
months ended September 30, 2003 was 6.51% as compared to a yield of 7.24% for the year
ended December 31, 2002.

The
principal components of our loan portfolio at September 30, 2003 and December 31, 2002,
consisted of real estate loans comprising approximately 87.9% and 86.7% of total loans,
respectively. Real estate loan means any loan secured by real estate, regardless of the
purpose of the loan. It is common practice for financial institutions in our market area
to obtain a security interest in real estate whenever possible, in addition to any other
available collateral. This collateral is taken to reinforce the likelihood of the ultimate
repayment of the loan and tends to increase the magnitude of the real estate portfolio
component. The following table shows the composition of the loan portfolio by category.

|                                   | September 30, 2003 | December 31, 2002
|---------------------------------- | ------------------ | -----------------
|
|Commercial and industrial          |                    |                  
|Real estate mortgage - residential |                    |                  
|Real estate mortgage - commercial  |                    |                  
|Real estate mortgage - other       |                    |                  
|Consumer and other                 |                    |                  
|                                   |                    |                  
|Total loans                        |                    |                  
|Allowance for loan losses          |                    |                  
|Unearned fees                      |                    |                  
|                                   |                    |                  
|Total net loans                    |                    |                  
|                                   |                    |                  

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Allowance for Loan Losses

The
allowance for loan losses at September 30, 2003 was $915,000, or 1.48% of loans
outstanding, compared to an allowance of $840,000, or 1.38% of loans outstanding, at
December 31, 2002. The allowance for loan losses is based upon our continuing evaluation
of the collectibility of loans based somewhat on historical loan loss experience, but
primarily on current economic conditions affecting the ability of borrowers to repay, the
volume of loans, the quality of collateral securing non-performing and problem loans, and
other factors deserving recognition. The current downward trend in economic conditions
that could potentially affect our borrowers and their ability to pay are of particular
concern at present and our reserve reflects this concern. The banks policy has been
to review the allowance for loan losses using a reserve factor for each type of loan since
there have been few delinquencies and little charge-off activity since the banks
inception. The overall objective is to apply percentages to the loans based on the
relative inherent risk for that loan type and grade. Reserve factors are based on peer
group data, information from regulatory agencies, and on the experience of our banks
lenders. The reserve factors will change depending on trends in national and local
economic conditions, the depth of experience of our banks lenders, delinquency
trends, and other factors. The banks general strategy is to maintain a minimum
coverage of a certain percentage of gross loans until it has sufficient historical data
and trends available.

Cash, Short-Term
Investments and Securities

Cash
(invested in overnight funds), short-term investments, and securities represented
approximately 41% of earning assets at September 30, 2003, or $42,482,886. This
represented an increase of $7.9 million from the December 31, 2002 balance of $34,602,094.
The combined yield on invested cash, short-term investments and securities was 2.42% for
the nine months ended September 30, 2003 compared to 3.48% for the year ended December 31,
2002. Short-term investments at September 30, 2003 and at December 31, 2002 consisted of
commercial paper in another financial institution with balances of $1,945,680 and
$1,989,500, respectively. Included in available-for-sale securities is $274,200 of stock
purchased in the Federal Home Loan Bank of Atlanta (FHLB). This purchase was a requirement
from the FHLB in order to borrow from them in the future.

Other Real Estate Owned

In
November 2002, we foreclosed on certain property in Richmond County, Georgia pursuant to a
customers loans that were in default. We believe that the carrying value of $378,880
is not impaired as of this date and that any future sale of the property would be in an
amount sufficient to realize its book value.

Deposits and Other
Borrowings

Our
primary source of funds for loans and investments is deposits. Deposits grew $7,058,509,
or 8%, since year-end 2002 for a total of $93,710,000 at September 30, 2003. The average
rates paid on interest-bearing deposits were 1.65% and 2.31% at September 30, 2003 and
December 31, 2002, respectively. In pricing deposits, we consider our liquidity needs, the
direction and levels of interest rates, and local market conditions. We have seen a
decrease in the price of our deposits due to declining rates in the general economy and in
the local market.

In
April 2002, we secured an advance of $2,500,000 with the FHLB at a rate of 3.65%. The loan
has a five year maturity with an early conversion option as of April 2004 and each quarter
thereafter. If the FHLB

16

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exercises its conversion option, the
advance will be converted to a floating rate or can be repaid without penalty. If the FHLB
does not exercise its option, the advance will continue at the original rate.

Shareholders Equity

The
Board of Directors declared a 5% stock dividend which was paid on January 29, 2003 to
shareholders of record on January 15, 2003. The number of shares issued was 52,090 with a
market value of $11.80 for a total decrease in retained earnings of $614,662. Cash paid in
lieu of stock for fractional shares totaled $2,593.

During
the third quarter, an employee exercised stock options for which 2,300 shares of stock
have been issued. Another employee exercised stock options since the period ended
September 30, 2003 for which 1,435 shares of stock have been issued. Since September 30,
2003 we purchased 9,888 shares of our stock at $16.00 per share, 5,000 shares at $16.05
per share, and 3,000 shares at $15.95 per share. Our Board of Directors authorized the
repurchase of up to 10% of the outstanding shares of stock as of February 28, 2003. These
purchases are the first made since that authorization.

Liquidity and Sources of
Capital

At
September 30, 2003, our liquid assets, consisting of cash and due from banks and Federal
funds sold, amounted to $9,950,988, representing 9.1% of total assets. Short-term
investments (which carry terms of less than 90 days and could be considered a cash
equivalent) and securities equaled $34,622,886, or 31.7% of total assets. These securities
provide a secondary source of liquidity because they can be converted into cash in a
timely manner. Our ability to maintain and expand our deposit base and borrowing
capabilities also serves as a source of liquidity. For the nine months ended September 30,
2003, total deposits increased by $7,058,509, representing an increase of 8%, or 11% on an
annualized basis. Growth for the year thus far is not necessarily indicative of expected
growth for the remainder of the year. We closely monitor and seek to maintain appropriate
levels of interest-earning assets and interest-bearing liabilities so that maturities of
assets are such that adequate funds are provided to meet customer withdrawals and loan
demand.

We
plan to meet future cash needs through the liquidation of temporary investments,
maturities of loans and investment securities, and generation of deposits. In addition,
the bank maintains two unsecured lines of credit from correspondent banks, one in the
amount of $2,700,000 and another for $1,800,000. The bank is also a member of the FHLB,
from which additional applications may be made for borrowing capabilities, if needed.

The
bank currently maintains a level of capitalization in excess of the minimum capital
requirements set by the regulatory agencies. Despite anticipated asset growth, we expect
capital ratios to continue to be adequate for the next two to three years. However, no
assurances can be given in this regard, as rapid growth, deterioration in loan quality,
and operating losses, or a combination of these factors, could change our capital position
in a relatively short period of time.

Below
is a table that reflects the leverage and risk-based regulatory capital ratios of the bank
at September 30, 2003:

|                      |  | Well-Capitalized | Minimum
|--------------------- |  | ---------------- | -------
|
|Tier 1 capital        |  |                  |        
|Total capital         |  |                  |        
|Tier 1 leverage ratio |  |                  |        

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Off-Balance Sheet Risk

Through
the operations of our bank, we have made contractual commitments to extend credit in the
ordinary course of our business activities. These commitments are legally binding
agreements to lend money to our customers at predetermined interest rates for a specified
period of time. At September 30, 2003, we had issued commitments to extend credit of
$16,477,000 through various types of commercial lending arrangements and we had $515,000
in letters of credit issued. We evaluate each customers credit worthiness on a
case-by-case basis. The amount of collateral obtained, if deemed necessary by us upon
extension of credit, is based on our credit evaluation of the borrower. Collateral varies
but may include accounts receivable, inventory, property, plant and equipment, commercial
and residential real estate. We manage the credit risk on these commitments by subjecting
them to normal underwriting and risk management processes.

# Item 3. Internal
Controls and Procedures

As
of the end of the period covered by this report, we carried out an evaluation, under the
supervision and with the participation of our management, including our Chief Executive
Officer and Chief Financial Officer, of the effectiveness of our disclosure controls and
procedures as defined in Exchange Act Rule 13a-15(e). Based upon that evaluation, our
Chief Executive Officer and Chief Financial Officer have concluded that our current
disclosure controls and procedures are effective as of September 30, 2003.

The
design of any system of controls and procedures is based in part upon certain assumptions
about the likelihood of future events. There can be no assurance that any design will
succeed in achieving its stated goals under all potential future conditions, regardless of
how remote.

18

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# PART II  OTHER
INFORMATION

# Item 1. Legal Proceedings

Not Applicable

# Item 2. Changes in
Securities and Use of Proceeds

Not Applicable

# Item 3. Defaults Upon
Senior Securities

Not Applicable

# Item 4. Submission of Matters
to a Vote of Security Holders

None.

# Item 5. Other Information

None.

# Item 6. Exhibits and
Report on Form 8-K

(a)      
Exhibits:

| | Exhibit                   
Description
| | --------------------------------------

|31 | Certifications of Chief Executive Officer and Chief Financial Officer pursuant to Section
302 of the Sarbanes-Oxley Act of 2002.
|-- | --------------------------------------------------------------------------------------------------------------------------------

|32 | Certifications of Chief Executive Officer and Chief Financial Officer pursuant to Section
906 of the Sarbanes-Oxley Act of 2002. This exhibit is not filed for purposes
of Section 18 of the Securities Exchange Act of 1934 but is instead furnished as provided
by applicable rules of the Securities and Exchange Commission.
|-- | ----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------

| | (b)       Reports on Form 8-K 
| | -------------------------------

| | The
following reports were filed on Form 8-K during the quarter ended September 30, 2003:
| | -----------------------------------------------------------------------------------------

| | The
Company filed a Form 8-K on July 15, 2003 to disclose the issuance of a press release
announcing its financial results for the second quarter ended June 30, 2003.
| | ----------------------------------------------------------------------------------------------------------------------------------------------------------------------

19

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SIGNATURES

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

| |  | Peoples' Community Capital Corporation(Registrant)
| |  | --------------------------------------------------

|Date:  November 10, 2003 |  | By:   /s/  Tommy B. Wessinger
|------------------------ |  | -----------------------------
|                         |  | Tommy B. Wessinger           
|                         |  | Chief Executive Officer      

|Date:  November 10, 2003 |  | By:   /s/  Jean H. Covington                            
|------------------------ |  | --------------------------------------------------------
|                         |  | Jean H. Covington                                       
|                         |  | Principal Accounting Officer and Chief Financial Officer

20

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INDEX TO EXHIBITS

Exhibit Number   
        Description

| | 31 | Certifications of Chief Executive Officer and Chief Financial Officer pursuant to Section 302 of the Sarbanes-Oxley Act
of 2002.
| | -- | --------------------------------------------------------------------------------------------------------------------------------

| | 32 | Certifications of Chief Executive Officer and Chief Financial Officer pursuant to Section
906 of the Sarbanes-Oxley Act of 2002. This exhibit is not filed for purposes
of Section 18 of the Securities Exchange Act of 1934 but is instead furnished as provided
by applicable rules of the Securities and Exchange Commission.
| | -- | ----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------

21