Exhibit 10.4
                        PEOPLES STATE BANK

           SENIOR MANAGEMENT INCENTIVE COMPENSATION PLAN
                            BASIC PLAN

 1. PURPOSE

    The purpose of the Senior Management Incentive Compensation Plan
    (the Plan) is to maximize the achievement of the Bank's objectives
    by providing incentives and awards to those senior-level executives
    who attain and sustain consistently high levels of performance which
    exceed normal expectations and which contribute to the success and
    profitability of the Bank.  The Plan is designed to support the key
    goals and objectives of the Bank.

 2. GENERAL DESCRIPTION

    Incentive awards are based on individual and organization-wide
    contributions to performance as measured by critical operating
    ratios, including selected financial ratios, percentage of loan
    growth, percentage of deposit growth, and overall profitability.  At
    the same time, the Plan provides annual goals which will help the
    Bank achieve its strategic goals, as well as provide a performance
    review and measurement system.

    The incentive formulas are constructed to provide awards consistent
    with the increase in profits to the Bank.  The incentive formulas
    are designed to provide a level of performance award that is
    competitive with comparable levels of performance in other
    institutions, to assist the Bank in retaining and motivating key
    executives, and to ensure the Bank's continued growth and
    profitability.

    The incentive awards are to be supplemental compensation in the form
    of cash paid on an annual basis.  The Plan is established in
    addition to regular salary and benefits programs.  The Plan presumes
    an equitable base compensation system and a competitive benefits
    program.
                                  1
 3. ADMINISTRATION

    The Board of Directors of the Bank has the responsibility to
    definitions  interpret, administer, and amend the Plan.

    Matters before the Board shall be decided based upon the vote of a
    majority of the entire Board.  Bank officers who are members of the
    Board shall not be entitled to vote on matters relating to the
    eligibility for and/or determination of their own incentive
    compensation award.

    Prior to the beginning of each fiscal year, the Board shall review
    and revise, if deemed advisable, the operating rules for
    implementing the Plan for the coming fiscal year.
<PAGE>
    Computation of incentive awards will be performed by senior
    management and reviewed by the Board.

    The Board may deem to exclude extraordinary occurrences which
    could impact the incentive awards, either positively or negatively,
    but are, by their nature, outside the significant influence of Plan
    participants.  The actions of the Board as to the interpretation,
    construction, and administration of the Plan shall be final and
    binding for all parties, including the Bank and its employees.

 4. PARTICIPANTS

    Eligibility for participation in the Plan shall be limited to those
    individuals approved by the Board of Directors who, in the judgment
    of the President and the Board of Directors, are responsible for
    directing functions which have a significant bearing on the growth
    and profitability of the Bank.

    Prior to the beginning of each plan year, participants may be added
    or deleted at the discretion of the Board.

 5. DEFINITIONS

    For the purpose of determining the amount of the incentive
    compensation awards under the Operating Rules, the following
    definitions shall apply:
                                  2
     <circle> PERFORMANCE MEASUREMENT FACTORS - Those key operating
 ratios, plus other pertinent measures of total Bank performance, on
 which the participants will be evaluated.  These factors include:

     -NET OPERATING INCOME - After-tax net income adjusted for
      extraordinary items.

     -NET INTEREST MARGIN RATIO - Interest income minus interest expense
      divided by average earning assets.

     -LOAN GROWTH PERCENTAGE - The average percentage increase or
      decrease in the dollar amount of loans outstanding by the Bank as
      compared with the previous year.

     -DEPOSIT GROWTH PERCENTAGE - The average percentage increase or
      decrease in the dollar amount of deposits in the Bank less public
      funds and state deposits as compared with the previous year.

     -NON-INTEREST INCOME RATIO - The dollar amount of non-interest
      income adjusted for extraordinary items divided by average assets.

     -SALARY AND BENEFITS EXPENSE RATIO - The dollar amount of salary
      expense plus other personnel expense, not including accrued
      incentive compensation divided by average assets.

     -OTHER OVERHEAD EXPENSES RATIO - The dollar amount of total
      overhead expenses minus salary and benefits expenses divided by
      average assets.

     -COMMERCIAL PAST DUE PERCENTAGE - The average of the four quarterly
      past due percentages on commercial loans.
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     -INSTALLMENT PAST DUE PERCENTAGE - The average of the four
      quarterly past due percentages on installment loans.

     -REAL ESTATE PAST DUE PERCENTAGE - The ave age of the four
      quarterly past due percentages on real estate loans.

     -EARNING ASSETS RATIO - The average dollar amount of total earning
      assets divided by the average dollar amount of total assets.

     -NET CHARGE-OFFS - Net charged-off divided by average total loans
      outstanding not including student loans.
                                  3
     -NON-INTEREST BEARING DEPOSIT RATIO - The year-to-date average
      dollar amount of non-interest bearing demand deposits divided by
      the average dollar amount of total deposits.

     -SPECIFIC OBJECTIVES - The specific goals and objectives which are
      established for certain participants.

     <circle> THRESHOLD PERFORMANCE - The minimum or maximum performance
 level for each factor below or above which no award will be given;
 also, the minimum overall performance level for a single performance
 ratio chosen to show overall profitability, currently net operating
 income.

     <circle> INCENTIVE FACTOR WEIGHTING - A percentage for each of the
 incentive factors for each participating position which is used to
 modify the basic incentive percentage to reflect the relative
 importance of the factor to that position.

     <circle> POSITION LEVEL MULTIPLIERS - A multiplier used to
 recognize the impact that each senior-level officer has on overall Bank
 performance.

     <circle> DISCRETIONARY / INDIVIDUAL PERFORMANCE ADJUSTMENT - A
 multiplier which allows the Board some subjective discretion in the
 determination of the final incentive award for each participant.

     <circle> EXTRAORDINARY OCCURRENCES - Those events which, in the
 opinion of the Board of Directors, are outside the significant
 influence of Plan participants and would, by their inclusion, cause a
 significant unintended effect, positive or negative, on the Bank's
 operating and financial performance results.

 6. INCENTIVE COMPUTATION - GENERAL PROCEDURES

    The general formula for converting overall Bank results into
    individual incentive awards is as follows:

     <circle> Incentive dollars for a participant for the plan year
 equals:

      -The base annual salary of the participant,

      -Times the percentage base award,
<PAGE>
      -Times the sum of the basic formula percentage for each
       performance measure applicable to the participant's position,
                                  4
      -Times the "Position Level Multiplier,"
      -Times the "Individual Performance Adjustment."

    No incentive awards will be granted for a fiscal year, regardless
    of performance on individual factors, if the Bank's Net Operating
    Income is less than an approved minimum for that fiscal year.  In
    addition, threshold performance levels are established for each
    performance measurement factor.  Performance minimums and
    threshold performance levels are described in the Operating
    Rules.

    The calculation of the incentive compensation award may also
    include a discretionary incentive award adjustment (noted above
    as the "Individual Performance Adjustment").

 7. PAYMENT OF INDIVIDUAL INCENTIVE COMPENSATION AWARDS

    When the Bank's year-end financial results are known, participants
    will receive the incentive payment determined by evaluating their
    performance for the year using the formula established for their
    position.  The award will be paid by February 1 following the plan
    year-end or earlier if final numbers or specific projections are
    available.  Applicable withholding of taxes will be deducted from
    each payment.

 8. PARTIAL PAYMENTS:  TERMINATION OF EMPLOYMENT / NEW HIRES

    In the event of termination of employment through retirement or
    death, the employee shall be considered to have earned one-twelfth
    of the annual incentive compensation award of a particular year for
    each full month of employment in the fiscal year of his/her
    retirement or death.

    If a participant dies, any unpaid incentive awards shall be paid to
    the estate, or designated beneficiary, in one lump sum.

    Participants may not be added to the Plan after June 1 of the plan
    year.

    If an individual becomes a new participant prior to June 1 during
    the plan year, the incentive compensation award will be earned on
    the basis of one-twelfth of the annual incentive compensation for
    each full month of participation.

    In all other cases of termination, the employee forfeits any unpaid
    awards.
                                  5
 9. INCENTIVE COMPENSATION OPERATING RULES

    As of the beginning of each fiscal year, the Board shall review and
    revise, if deemed advisable, the operating rules of the Plan for the
    year then beginning.  The Operating Rules shall include the
    following:
<PAGE>
      a. Identification of employees selected under Paragraph 4 for
         participation in the Plan.

      b. Position level multipliers, performance measurement factors and
         weightings for determining the amount of the incentive
         compensation awards for the fiscal year then beginning.

      c. Other administrative and procedural rules which the Board
         considers appropriate.

    After approval by the Board of Directors, Bank management shall, as
    soon as practical, inform each of the participants under the Plan of
    the Operating Rules for the fiscal year then beginning.

 10.PERFORMANCE PROGRESS REPORTING

    The Bank's President, or his designee, will be responsible for
    written quarterly reporting to the Board of Directors of Bank
    performance during the course of the year. This data is to be made
    available to the Board within 30 days of its date of availability.

 11.AMENDMENT OR TERMINATION OF PLAN

    The Board of Directors may modify, amend, or terminate this Plan at
    any time effective at the end of a fiscal year.  The modification,
    amendment, or termination of the Plan shall in no way affect a
    participant's right to unpaid incentive compensation awards for the
    year prior to termination or modification.
                                  6
           SENIOR MANAGEMENT INCENTIVE COMPENSATION PLAN
                          OPERATING RULES

 1. GENERAL

    The following Senior Management Incentive Compensation Plan
    Operating Rules will be in effect during 2000 and until
    revised.  These Operating Rules are subject to change by the Board
    of Directors.  It is anticipated, however, that the rules will be
    revised only when significant changes occur in the Bank's operations
    which interrupt the basic continuity of the Plan.

 2. PARTICIPANT INCENTIVE PERFORMANCE MEASURES AND WEIGHTINGS

    Exhibit A lists the Plan participants, position level multipliers,
    performance measurement factors, and weightings for each participant
    for each performance measure.

 3. INCENTIVE FORMULAS

    The performance measures and weightings, including projected data
    used for calculating the individual incentive compensation awards,
    are shown in Exhibits B through D.  Exhibit E shows the projected
    incentive compensation at various levels of net operating income.

 4. THRESHOLD PERFORMANCE LEVELS

    Thresholds of performance have been established for each performance
<PAGE>
    measure and are included in each incentive formula.

    IN ADDITION TO THE INDIVIDUAL PERFORMANCE MEASUREMENT FACTOR
    THRESHOLDS, A MINIMUM NET OPERATING INCOME OF $3,217,319 MUST BE
    ATTAINED FOR THE INCENTIVE YEAR 2000 BEFORE ANY INCENTIVE AWARD CAN
    BE MADE, REGARDLESS OF INDIVIDUAL PERFORMANCE RESULTS.

    Exhibits F through S detail the historical data used for calculating
    each performance measure.  The threshold level is the percentage or
    dollar amount below or above which no award will be made for that
    factor.
                                  7
 5. INDIVIDUAL PERFORMANCE ADJUSTMENTS

    Individual performance adjustments may be used to adjust an
    individual incentive award upward as far as 1.50 times the
    extended award for contributions exceeding the average level in the
    judgment of management and/or the Board of Directors.

 6. EFFECTIVE DATE

 This Plan is effective January 1, 2000.
                                  8
<PAGE>
                                                             Exhibit A
<TABLE>
<CAPTION>
                Senior Management Incentive Compensation Plan
        Participants, Performance Measurement Factors, and Weightings

 Salary

                             Net        Net                       Non-      and        Other
                          Operating  Interest  Loan    Deposit  interest  Benefits   Overhead
                           INCOME    MARGIN   GROWTH   GROWTH   INCOME    EXPENSE    EXPENSES
 <S>                         <C>       <C>     <C>      <C>      <C>       <C>          <C>
 Chief Executive Officer     30        15        5       5        5        10           10

 Senior Financial Officer    15        20        0       0        5        10           10

 Senior Commercial Officer   10        15       15       5       10         5            5

 Senior Retail Officer       10        15       10      10       10         5            5

 Senior Operations Officer   15        10        0       0       15        15           25

 Senior Credit Officer       15        15        0       5        5         5           10
</TABLE>
<TABLE>
<CAPTION>
                                                  Real                       Non-
                                                 Estate              Net   Interest
                          Commercial Installment  Past    Earning  Charge- Bearing    Specific
                           PAST DUE   PAST DUE    DUE     ASSETS    OFFS   DEPOSITS  OBJECTIVES  TOTAL
 <S>                         <C>       <C>       <C>       <C>      <C>       <C>        <C>      <C>
 Chief Executive Officer      5         0         0         5        0         0         10       100%

 Senior Financial Officer     0         0         0        15        0        10         15       100%

 Senior Commercial Officer   10         0         0         5        5         5         10       100%

 Senior Retail Officer        0         5         5         5        5         5         10       100%

 Senior Operations Officer    0         0         0        10        0         0         10       100%

 Senior Credit Officer        5         5         5        10       10         0         10       100%
</TABLE>