FORM 10-KSB

                       SECURITIES AND EXCHANGE COMMISSION
                             Washington, D.C. 20549


[ X ]    ANNUAL REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES
         EXCHANGE ACT OF 1934

                  For the Fiscal Year Ended  September 30, 1999

                           OR

[   ]    TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES
         EXCHANGE ACT OF 1934

        For the transition period from______________to___________________

         Commission File Number: 0-28838

                          PEOPLES FINANCIAL CORPORATION
                 (Name of small business issuer in its charter)

            Ohio                                               34-1822228
(State or other jurisdiction of                             (I.R.S. Employer
incorporation or organization)                           Identification Number)


                   211 Lincoln Way East, Massillon, Ohio 44646
               (Address of principal executive offices) (Zip Code)

                    Issuer's telephone number: (330) 832-7441

      Securities registered pursuant to Section 12(b) of the Exchange Act:
                                      None

      Securities registered pursuant to Section 12(g) of the Exchange Act:
                        Common Shares, without par value
                                (Title of Class)

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

     Check if there is no disclosure of delinquent  filers  pursuant to Item 405
of Regulation S-B contained in this form,  and no disclosure  will be contained,
to the best of issuer's knowledge, in definitive proxy or information statements
incorporated  by reference  in Part III of this Form 10-KSB or any  amendment to
this Form 10-KSB. [X]

     The issuer's  revenues for the fiscal year ended  September 30, 1999,  were
$6.8 million.

     Based upon the  average  bid and asked  prices  quoted by The Nasdaq  Stock
Market, the aggregate market value of the voting stock held by non-affiliates of
the issuer on December 9, 1999, was $7.16 million.

     1,265,108  of the issuer's  common  shares were issued and  outstanding  on
December 9, 1999.


<PAGE>



Documents Incorporated by Reference

         The following  sections of Peoples Financial  Corporation's 1999 Annual
Report to Shareholders  are  incorporated by reference into Part II of this Form
10-KSB:

     1.   Management's  Discussion  and  Analysis  of  Financial  Condition  and
          Results of Operations; and

     2.   Financial Statements.

         The following  sections of the definitive  Proxy Statement for the 2000
Annual Meeting of Shareholders of Peoples Financial Corporation are incorporated
by reference into Part III of this Form 10-KSB:

     1.   PROPOSAL ONE - ELECTION OF DIRECTORS;

     2.   COMPENSATION OF EXECUTIVE OFFICERS AND DIRECTORS; and

     3.   VOTING  SECURITIES  AND  OWNERSHIP  OF CERTAIN  BENEFICIAL  OWNERS AND
          MANAGEMENT.






























                                      -2-
<PAGE>


                                     PART I

Item 1.       Description of Business

         Peoples Financial  Corporation  ("PFC"),  an Ohio corporation formed in
1995, is a unitary savings and loan holding company which owns all of the issued
and outstanding  common stock of Peoples Federal Savings and Loan Association of
Massillon ("Peoples  Federal"),  a savings and loan association  chartered under
the laws of the United  States.  On September 12, 1996,  PFC acquired all of the
common stock issued by Peoples  Federal upon its conversion from mutual to stock
form (the "Conversion").

         Because  PFC's  activities  have been limited  primarily to holding the
common stock of Peoples  Federal since acquiring such common stock in connection
with the Conversion,  the following discussion focuses primarily on the business
of Peoples Federal.

General

         Peoples  Federal  is  principally  engaged  in the  business  of making
permanent  first  and  second  mortgage  loans  secured  by one- to  four-family
residential  real estate  located in Peoples  Federal's  primary market area and
investing in U.S. Government and agency obligations,  interest-bearing  deposits
in  other  financial  institutions,  mortgage-backed  securities  and  municipal
securities.  Peoples  Federal  also  originates  loans for the  construction  of
residential  real estate and loans secured by multifamily real estate (over four
units) and  nonresidential  real  estate.  The  origination  of consumer  loans,
including  unsecured  loans and loans  secured by deposits,  constitutes a small
portion  of  Peoples  Federal's  lending  activities.  Loan  funds are  obtained
primarily  from  deposits,  which are  insured  up to  applicable  limits by the
Federal Deposit Insurance Corporation ("FDIC"), and loan and mortgage-backed and
related securities repayments.

         Peoples  Federal   conducts   business  from  its  main  office  and  a
full-service  branch  office,  both located in  Massillon,  Ohio,  and a lending
office in the Belden  Village area of North Canton,  Ohio.  Massillon is located
eight  miles  west of  Canton,  32 miles  south of Akron  and 50 miles  south of
Cleveland. Peoples Federal's primary market area consists of Stark County, Ohio,
and adjacent counties.

         In addition to the historic financial  information included herein, the
following discussion contains forward-looking  statements that involve risks and
uncertainties.  Economic  circumstances  and PFC's operations and actual results
could  differ  significantly  from  those  discussed  in  those  forward-looking
statements.  Some  of the  factors  that  could  cause  or  contribute  to  such
differences  are discussed  herein,  but also include changes in the economy and
interest  rates in the nation and in PFC's general  market area.  See Exhibit 99
hereto,  "Safe  Harbor  Under the Private  Securities  Litigation  Reform Act of
1995," which is incorporated herein by reference.

Lending Activities

         General.  Peoples Federal's primary lending activity is the origination
of conventional  mortgage loans secured by one- to four-family  homes located in
Peoples  Federal's primary market area and home equity loans secured by first or
second mortgages on single-family,  owner-occupied  homes. In July 1998, Peoples
Federal  began   offering   home  equity  lines  of  credit  on   single-family,
owner-occupied  properties.  Loans for the  construction  of one- to four-family
homes and mortgage loans on multifamily properties containing five units or more
and  nonresidential  properties  are also  offered by Peoples  Federal.  Peoples
Federal does not originate loans insured by the Federal  Housing  Administration
or loans  guaranteed  by the  Veterans  Administration.  In addition to mortgage
lending,  Peoples  Federal makes  unsecured  loans and consumer loans secured by
deposits.  Peoples Federal has recently begun  originating its mortgage loans in
accordance with  traditional  secondary  market  guidelines but has not sold any
loans.





                                       -3-
<PAGE>

         Loan  Portfolio  Composition.  The  following  table  presents  certain
information with respect to the composition of Peoples  Federal's loan portfolio
at the dates indicated:
<TABLE>
<CAPTION>

                                                                              At September 30,
                                                                   1999                               1998
                                                                       Percent                            Percent
                                                                       of total                           of total
                                                          Amount         loans               Amount         loans
                                                                            (Dollars in thousands)
<S>                                                        <C>             <C>                <C>           <C>
Residential real estate loans:
One- to four-family (first and second mortgage)          $62,062          77.73%            $52,762          76.86%
Home equity (secured by mortgages)                         1,543           1.93               1,475           2.15
Multifamily                                                  392            .49                 320            .47
Nonresidential real estate loans                           3,406           4.27               3,897           5.68
Construction loans                                        12,215          15.30               9,831          14.32
                                                          ------         ------              ------         ------

     Total real estate loans                              79,618          99.72              68,285          99.48

Consumer loans:
Loans on deposits                                            124            .16                 192            .28
Other consumer loans                                          99            .12                 168            .24
                                                          ------         ------              ------         ------

Total consumer loans                                         223            .28                 360            .52
                                                          ------         ------              ------         ------

Total loans                                               79,841         100.00%             68,645         100.00%
                                                                         ======                             ======
Other items:
Deferred loan origination (fees) costs                       (16)                                26
Loans in process                                          (6,528)                            (4,134)
     Allowance for loan losses                              (213)                              (196)
                                                          ------                             ------

Net loans                                                $73,084                            $64,341
                                                          ======                             ======
</TABLE>


         Loan  Maturity  Schedule.   The  following  table  sets  forth  certain
information  as of September  30,  1999,  regarding  the dollar  amount of loans
maturing in Peoples  Federal's  portfolio  based on their  contractual  terms to
maturity.  Demand loans and loans having no stated schedule of repayments and no
stated maturity are reported as due in one year or less.
<TABLE>
<CAPTION>

                                 Due during the year ending      Due 4-5      Due 6-10     Due 11-20     Due more than
                                         September 30,         years after  years after  years after    20 years after
                                 2000       2001        2002     9/30/99       9/30/99      9/30/99         9/30/99        Total
                              -------     ------      ------      ------       -------      -------         -------       -------
                                                                  (In thousands)
<S>                             <C>          <C>        <C>         <C>         <C>          <C>               <C>         <C>
Mortgage loans:
  One- to four-family (first
    mortgage)                 $14,279     $2,509      $2,527      $4,887       $12,440      $19,137         $18,498       $74,277
  Home equity (first and
    second  mortgage)             107        121         131         271           690          223              -          1,543
  Multifamily                      -          -           -           -             -            75             317           392
  Nonresidential                   46         -           38          80           261        2,942              39         3,406
Consumer loans                    101         70          31          21            -            -               -            223
                               ------      -----       -----       -----        ------       ------          ------        ------
     Total loans              $14,533     $2,700      $2,727      $5,259       $13,391      $22,377         $18,854       $79,841
                               ======      =====       =====       =====        ======       ======          ======        ======

</TABLE>

         Of the loans due more than one year after  September  30,  1999,  loans
with aggregate balances of $56.8 million have fixed rates of interest, and loans
with aggregate balances of $8.5 million have adjustable interest rates.

         One- to Four-Family  Residential Real Estate Loans. The primary lending
activity of Peoples Federal has been the  origination of permanent  conventional
loans  secured  by  one-  to  four-family  residences,  primarily  single-family
residences,  located within Peoples Federal's  designated  lending area. Peoples



                                      -4-
<PAGE>

Federal  also  originates  loans  for the  construction  of one- to  four-family
residences  and home  equity  loans  secured  by first or  second  mortgages  on
single-family,  owner-occupied,  residential real estate.  Each of such loans is
secured by a mortgage on the underlying real estate and improvements thereon, if
any.

         OTS  regulations  limit the amount  that  Peoples  Federal  may lend in
relationship to the appraised  value of the real estate and  improvements at the
time of loan origination.  In accordance with such regulations,  Peoples Federal
makes fixed-rate first mortgage loans on single-family or duplex, owner-occupied
residences  up to 95% of the  value of the real  estate  and  improvements  (the
"Loan-to-Value  Ratio" or "LTV"). Low- to moderate-income loans are granted with
LTVs up to 95% on  single-family  or  duplex,  owner-occupied  residences.  Home
equity  loans  secured  by first or  second  mortgages  are made  with a maximum
combined LTV for the first and second  mortgages of 80%.  Peoples  Federal makes
adjustable-rate  first  mortgage  loans  for  investment  purposes  on  one-  to
four-family,  nonowner-occupied  residences  in amounts  up to 75% LTV.  Peoples
Federal requires private mortgage  insurance  ("PMI") for the amount of loans in
excess  of 85% of the  value of the real  estate  securing  such  loans.  PMI is
required  for the  amount  of any loan in excess of 85% of the value of the real
estate  and  improvements  for  low-  to   moderate-income   loans.   Fixed-rate
residential  real estate loans are offered by Peoples Federal for terms of up to
30 years.

         Adjustable-rate mortgage loans are offered by Peoples Federal for terms
of up to 30 years and with  various  alternative  features.  The  interest  rate
adjustment  periods on ARMs are either one year, three years or a fixed rate for
10 years followed by one-year adjustment periods.  The interest rate adjustments
on ARMs  presently  originated  by  Peoples  Federal  are tied to changes in the
weekly  average  yield  on  the  one-  and  three-year  U.S.  Treasury  constant
maturities index, respectively. Rate adjustments are computed by adding a stated
margin,  typically 2.75%, to the index. The maximum allowable adjustment at each
adjustment  date is usually 1% with a maximum  adjustment of 3% over the term of
the loan,  although Peoples Federal will make available an ARM with a 2% maximum
adjustment at each adjustment date and a maximum  adjustment of 6% over the term
of the loan.  The initial rate is dependent,  in part, on how often the rate can
be  adjusted.  Peoples  Federal  also  offers  an ARM  on  two-  to  four-family
properties  with a  margin  of  3.5%  over  the  index  and  2%  and 6%  maximum
adjustments at each adjustment date and over the term of the loan, respectively.
Peoples Federal originates ARMs which have initial interest rates lower than the
sum of the index plus the margin.  Such loans are subject to  increased  risk of
delinquency or default due to increasing  monthly payments as the interest rates
on such loans  increase to the  fully-indexed  level,  although such increase is
considered in Peoples  Federal's  underwriting of any such loans with a one-year
adjustment period.

         The  aggregate   amount  of  Peoples   Federal's  one-  to  four-family
residential   real  estate  loans,   excluding   construction   loans,   equaled
approximately  $63.6 million at September  30, 1999,  and  represented  79.7% of
loans at such date. The largest individual loan balance on a one- to four-family
loan at such date was  $352,000.  At such date,  four  loans  secured by one- to
four-family  residential real estate in the amount of $107,000 were more than 90
days delinquent or nonaccruing.

         In April 1997,  Peoples  Federal began  offering  loans to borrowers to
build or buy a new residence using the equity in their current  residence as the
down payment.  Bridge loans are  structured as temporary  mortgage  loans,  with
interest  payments only required,  at a fixed rate with a term of two years. The
maximum loan amount  offered is $125,000.  If the current  residence is not sold
within  the   two-year   period,   the  bridge  loan  must  be  converted  to  a
non-owner-occupied mortgage loan.

         Bridge loans are  considered to involve a greater degree of risk due to
the fact that the  borrower  may also  have a  construction  loan  from  Peoples
Federal at the same time.  The risk is reduced by  requiring  any other liens on
the current  residence  to be paid off with the proceeds of the loan or before a
loan is granted,  requiring a maximum  LTV of 80% of the current  residence  and
evaluating  the credit  history  of the  borrower.  The risk is also  reduced by
Peoples Federal's overall limitation. At September 30, 1999, one- to four-family
mortgage  loans  included  $722,000,  or .9% of total loans,  invested in bridge
loans secured by property located within the primary lending area. At such date,
no bridge loans were delinquent.

         In July 1998, Peoples Federal began offering home equity line of credit
loans secured by the equity in single-family owner-occupied residences. The home
equity line of credit loan is an adjustable-rate  mortgage loan with an interest
rate one percent over the prime rate as  published  in the Wall Street  Journal,
monthly payments of 1.5% of the previous month's balance and a term of up to ten
years. The maximum loan available is $50,000. The maximum combined LTV of a home
equity  line of credit  loan and any other  mortgage  loan  secured  by the same
property is 80%.

         Multifamily Residential Real Estate Loans. In addition to loans on one-
to four-family  properties,  Peoples  Federal makes loans secured by multifamily
properties  containing  over four  units.  Such  loans are made with  adjustable
interest rates, a maximum LTV of 75% and a maximum term of 30 years.

         Multifamily lending is generally  considered to involve a higher degree
of risk because the loan amounts are larger and the borrower  typically  depends

                                      -5-
<PAGE>

upon  income  generated  by the  project to cover  operating  expenses  and debt
service.  The profitability of a project can be affected by economic conditions,
government  policies  and other  factors  beyond the  control  of the  borrower.
Peoples Federal attempts to reduce the risk associated with multifamily  lending
by evaluating the creditworthiness of the borrower and the projected income from
the project and by obtaining  personal  guarantees on loans made to corporations
and  partnerships.  Peoples Federal  currently  requires that borrowers agree to
submit  financial  statements,  rent rolls and tax  returns  annually  to enable
Peoples Federal to monitor the loans.

         At September 30, 1999, loans secured by multifamily  properties totaled
approximately  $392,000,  or less than one  percent of its total  loans,  all of
which were secured by property located within Peoples  Federal's  primary market
area and all of which  were  performing  in  accordance  with their  terms.  The
largest property securing such a loan is a twelve-unit apartment building.

         Construction Loans. Peoples Federal makes loans for the construction of
residential  and  nonresidential  real  estate.  Such  loans are  structured  as
permanent  loans with fixed rates of  interest  and for terms of up to 30 years.
Although  most  of  the   construction   loans  originated  by  Peoples  Federal
historically were made to owner-occupants  for the construction of single-family
homes by a general contractor,  throughout the last three fiscal years,  Peoples
Federal has also made loans to  developers  who did not have a purchaser for the
property at the time the loan was made.

         Construction  loans generally involve greater  underwriting and default
risks than do loans  secured by  mortgages  on  existing  properties  due to the
concentration  of principal in a limited  number of loans and  borrowers and the
effects of general economic conditions on real estate developments,  developers,
managers and builders.  In addition,  such loans are more  difficult to evaluate
and  monitor.  Loan funds are advanced  upon the  security of the project  under
construction,  which  is more  difficult  to  value  before  the  completion  of
construction.  Moreover,  because of the  uncertainties  inherent in  estimating
construction  costs, it is relatively  difficult to evaluate  accurately the LTV
and the total loan funds required to complete a project.  In the event a default
on a construction loan occurs and foreclosure follows, Peoples Federal must take
control  of the  project  and  attempt  either  to  arrange  for  completion  of
construction or dispose of the unfinished  project.  Additional risk exists with
respect to loans made to developers who do not have a buyer for the property, as
the  developer  may lack funds to pay the loan if the  property is not sold upon
completion. Peoples Federal attempts to reduce such risks on loans to developers
by requiring  personal  guarantees  and  reviewing  current  personal  financial
statements and tax returns and other projects undertaken by the developers.

         At September 30, 1999, a total of $12.2 million, or approximately 15.3%
of Peoples  Federal's  total loans,  consisted  of  construction  loans.  All of
Peoples  Federal's  construction  loans are secured by property  located  within
Peoples  Federal's primary market area, and the economy of such lending area has
been relatively stable. At September 30, 1999, all of such loans were performing
in accordance with their terms.

         Nonresidential  Real Estate  Loans.  Peoples  Federal  also makes loans
secured by  nonresidential  real  estate  consisting  of retail  stores,  office
buildings, churches, a theater, manufacturing facilities, an industrial facility
and a warehouse.  Such loans  generally  are  originated  with terms of up to 20
years and a  minimum  loan  amount  of  $20,000  and a  maximum  loan  amount of
$500,000.  Such loans have a maximum LTV of 75%. Peoples Federal makes loans for
land  development  in amounts up to 75% LTV and a maximum  term of three  years.
Peoples  Federal also makes loans on  undeveloped  land in amounts up to 75% LTV
and a maximum term of five years,  and on improved  lots  (streets with all city
utilities) in amounts up to 80% LTV for five years.

         Nonresidential real estate lending is generally considered to involve a
higher degree of risk than residential lending due to the relatively larger loan
amounts  and the  effects  of  general  economic  conditions  on the  successful
operation of  income-producing  properties.  If the cash flow on the property is
reduced,  for  example,  as leases are not obtained or renewed,  the  borrower's
ability to repay may be impaired.  Peoples Federal has endeavored to reduce such
risk by evaluating the credit history and past performance of the borrower,  the
location of the real  estate,  the quality of the  management  constructing  and
operating the property,  the debt service ratio, the quality and characteristics
of the income stream  generated by the property and  appraisals  supporting  the
property's valuation.  Peoples Federal also requires personal guarantees on such
loans.

         At  September  30,  1999,  Peoples  Federal had a total of $3.4 million
invested in  nonresidential  real  estate  loans,  all of which were  secured by
property  located  within  Peoples  Federal's  primary  market area.  Such loans
comprised  approximately  4.3% of Peoples Federal's total loans at such date. At
such date, Peoples Federal had no delinquent nonresidential real estate loans.


                                      -6-
<PAGE>

         Federal  regulations limit the amount of nonresidential  mortgage loans
which an association may make to 400% of its tangible capital.  At September 30,
1999, Peoples Federal's  nonresidential  mortgage loans totaled 41.7% of Peoples
Federal's tangible capital.

         Consumer Loans.  Peoples Federal makes various types of consumer loans,
including  unsecured  loans and loans  secured by deposits.  Such loans are made
only at fixed rates of interest for terms of up to five years.  Peoples  Federal
has been  attempting  to increase  its  consumer  loan  portfolio as part of its
interest rate risk  management  efforts and because a higher rate of interest is
received on consumer loans.

         Consumer  loans may  entail  greater  credit  risk than do  residential
mortgage loans.  The risk of default on consumer loans increases  during periods
of recession, high unemployment and other adverse economic conditions.  Although
Peoples  Federal has not had  significant  delinquencies  on consumer  loans, no
assurance can be provided that delinquencies will not increase.

         At September 30, 1999, Peoples Federal had approximately  $223,000,  or
less than one percent of its total loans,  invested in consumer  loans.  At such
date, four loans in the amount of $7,000 were more than 90 days delinquent.

         Loan Solicitation and Processing.  Loan originations are developed from
a number of sources,  including  continuing business with depositors,  borrowers
and  real  estate  developers,  periodic  newspaper  and  radio  advertisements,
solicitations by Peoples Federal's lending staff and walk-in customers.

         Loan  applications  for  permanent  mortgage  loans  are  taken by loan
personnel.  Peoples Federal obtains a credit report,  verification of employment
and  other  documentation  concerning  the  credit-worthiness  of the  borrower.
Peoples  Federal  limits the ratio of mortgage loan  payments to the  borrower's
income to 28% and the ratio of the  borrower's  total debt payments to income to
38%. An appraisal  of the fair market value of the real estate on which  Peoples
Federal  will be  granted  a  mortgage  to  secure  the loan is  prepared  by an
independent  fee  appraiser  approved  by the Board of  Directors.  Since  1993,
Peoples Federal has required a survey of the property securing every real estate
loan. In 1994, Peoples Federal adopted an environmental policy. Pursuant to such
policy,  Peoples Federal requires a Phase I Environmental  Site Assessment by an
approved  environmental  consultant  during processing of an application for any
commercial  real  estate  loan in the amount of  $250,000  or greater and before
foreclosing  on any real estate.  For  nonresidential  real estate loans of less
than  $250,000,  single-family  homes,  duplexes  and  multi-family  homes,  the
borrower is required to complete an Environmental Inspection Questionnaire.  For
larger multi-tenant properties, including apartment buildings, nursing homes and
day care centers, tests for lead paint, lead in the drinking water and radon are
performed. Significant negative information from any such questionnaire or tests
may result in further investigation.

         For multifamily and nonresidential mortgage loans, a personal guarantee
of the borrower's obligation to repay the loan is required. Peoples Federal also
obtains  information  with respect to prior projects  completed by the borrower.
Upon the  completion  of the  appraisal  and the receipt of  information  on the
borrower,  the  application  for a loan  is  submitted  to the  Loan  Committee,
comprised of certain management officials, for approval or rejection if the loan
amount does not exceed $500,000.  If the loan amount exceeds $500,000, or if the
application does not conform in all respects with Peoples Federal's underwriting
guidelines, the application is accepted or rejected by the Board of Directors.

         If a mortgage  loan  application  is approved,  title  insurance is now
obtained on the title to the real estate  which will secure the  mortgage  loan.
Prior to April 1, 1994,  Peoples Federal did not require title insurance but did
obtain  an  attorney's  opinion  of  title.  Borrowers  are  required  to  carry
satisfactory fire and casualty insurance and flood insurance, if applicable, and
to name Peoples Federal as an insured mortgagee.

         The  procedure  for approval of  construction  loans is the same as for
permanent mortgage loans, except that an appraiser evaluates the building plans,
construction specifications and estimates of construction costs. Peoples Federal
also  evaluates the  feasibility  of the proposed  construction  project and the
experience and record of the builder.

         Consumer loans are  underwritten on the basis of the borrower's  credit
history and an analysis of the borrower's income and expenses,  ability to repay
the loan and the value of the collateral, if any.

         Peoples  Federal's loans carry no pre-payment  penalties but do provide
that the entire  balance of the loan is due upon sale of the  property  securing
the loan. Peoples Federal generally enforces such due-on-sale provisions.



                                      -7-
<PAGE>

         Loan Originations, Purchases and Sales. Peoples Federal originated only
fixed-rate  loans  until July  1995.  Peoples  Federal  has never sold loans but
originates  its mortgage  loans in  accordance  with Federal Home Loan  Mortgage
Corporation ("FHLMC") secondary market guidelines.

         The  following   table  presents   Peoples   Federal's   mortgage  loan
origination and participation activity for the periods indicated:
<TABLE>
<CAPTION>

                                                           Year ended September 30,
                                                          1999                  1998
                                                                (In thousands)
<S>                                                     <C>                     <C>
Loans originated:
  One- to four-family residential (1)                  $29,980               $28,879
  Multifamily residential                                  -                     188
  Nonresidential                                            34                 1,209
  Consumer                                                 109                   276
                                                        ------                ------
     Total loans originated
                                                        30,123                30,552
                                                        ------                ------
Reductions:
  Principal repayments                                 (21,389)              (22,834)
Increase (decrease) in other items, net (2)                  9                    19
                                                        ------                ------
     Net increase                                      $ 8,743               $ 7,699
                                                        ======                ======
</TABLE>

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

(1)  Includes construction loans, net of undisbursed loans in process.

(2)  Consists of deferred fees and costs and the allowance for loan losses.


         Office of Thrift Supervision  ("OTS")  regulations  generally limit the
aggregate  amount that a savings  association may lend to any one borrower to an
amount equal to 15% of the  association's  total  capital  under the  regulatory
capital  requirements  plus any  additional  loan  reserve not included in total
capital. A savings association may lend to one borrower an additional amount not
to exceed 10% of total capital plus additional reserves if the additional amount
is fully  secured by certain  forms of  "readily  marketable  collateral."  Real
estate is not  considered  "readily  marketable  collateral."  In addition,  the
regulations  require that loans to certain  related or  affiliated  borrowers be
aggregated  for  purposes of such limits.  An exception to these limits  permits
loans to one borrower of up to $500,000 "for any purpose."

         Based on such limits,  Peoples  Federal was able to lend  approximately
$1.3 million to one borrower at September 30, 1999.  The largest  amount Peoples
Federal had outstanding to one borrower at September 30, 1999, was $1.5 million,
consisting  of eight loans.  Although the loans were,  at September 30, 1999, in
excess of the amount that  Peoples  Federal  could lend to one  borrower at that
date,  they  were  below  the  limit at the time  they  were  made and were not,
therefore,  in violation of the lending  limit  regulation.  The excess over the
September 30, 1999, limit resulted from the payment of an intercompany  dividend
from  Peoples  Federal to PFC to fund the  special  dividend  paid by PFC to its
shareholders   on  November  19,   1999.   Such  loans  were  secured  by  three
single-family residences and five nonresidential  properties.  All of such loans
were current at September 30, 1999.

         Delinquent Loans,  Nonperforming  Assets and Classified Assets.  When a
borrower fails to make a required payment on a loan, Peoples Federal attempts to
cause the  delinquency  to be cured by contacting  the borrower.  In most cases,
delinquencies are cured promptly.

         When a loan is fifteen days or more delinquent,  the borrower is sent a
delinquency  notice.  When a loan is thirty  days  delinquent,  Peoples  Federal
generally  telephones the borrower.  Depending upon the  circumstances,  Peoples
Federal  may  also   inspect  the  property  and  inform  the  borrower  of  the
availability of credit counseling from Peoples Federal and counseling  agencies.
Before a loan  becomes 90 days  delinquent,  Peoples  Federal  will make further
contact with the borrower and,  depending  upon the  circumstances,  may arrange
appropriate  alternative  payment  arrangements.  After a loan  becomes  90 days
delinquent, Peoples Federal may refer the matter to an attorney for foreclosure.
A decision as to whether and when to initiate  foreclosure  proceedings is based
on such  factors  as the  amount  of the  outstanding  loan in  relation  to the
original indebtedness,  the extent of the delinquency and the borrower's ability
and willingness to cooperate in curing  delinquencies.  If a foreclosure occurs,
the real estate is sold at public sale and may be purchased by Peoples Federal.

         Real  estate  acquired  by Peoples  Federal as a result of  foreclosure
proceedings  is classified  as real estate owned ("REO") until it is sold.  When
property is so  acquired,  it is  initially  recorded by Peoples  Federal at the
lower of cost or fair value of the real estate,  less  estimated  costs to sell.
Any  reduction  in fair value is  reflected  in a  valuation  allowance  account
established by a charge to income. Costs incurred to carry other real estate are
charged to expense.  Peoples Federal had no REO property at September 30, 1999.


                                      -8-
<PAGE>


         Peoples  Federal  evaluates  a loan  for  nonaccrual  status  when  the
payments are 90 days or more past due.

         The following table reflects the amount of loans in a delinquent status
as of the dates indicated:
<TABLE>
<CAPTION>

                                                                         September 30,
                                                      1999                                       1998
                                                                   Percent                                    Percent
                                                                  of total                                   of total
                                       Number        Amount        loans            Number       Amount        loans
                                                                   (Dollars in thousands)
<S>                                     <C>            <C>           <C>              <C>        <C>            <C>
Loans delinquent for (1):
  30 - 59 days                           4            $403           .51%              4        $  97           .14%
  60 - 89 days                           2              18           .02               2           19           .03
  90 days and over                       8             114           .14               1          115           .17
                                        --             ---           ---               -          ---           ---
   Total delinquent loans               14            $535           .67%              7         $231           .34%
                                        ==             ===           ===               =          ===           ===
</TABLE>

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

(1)  The  number  of days a loan is  delinquent  is  measured  from  the day the
     payment was due under the terms of the loan agreement.


         The following table sets forth  information with respect to the accrual
and nonaccrual  status of Peoples Federal's loans which are 90 days or more past
due and other nonperforming assets at the dates indicated:
<TABLE>
<CAPTION>

                                                                                 At September 30,
                                                                         1999                       1998
                                                                              (Dollars in thousands)
<S>                                                                       <C>                       <C>
Loans accounted for on a nonaccrual basis:
  Real estate:
    Residential                                                          $ 92                       $115
    Nonresidential                                                          -                          -
  Consumer
                                                                            7                          -
                                                                          ---                        ---
     Total nonaccruing loans
                                                                           99                        115
Accruing loans contractually past due 90 days or more:
    Real estate:
      Residential                                                          15                          -
      Nonresidential                                                        -                          -
    Consumer                                                                -                          -
                                                                          ---                        ---
     Total accruing loans contractually past
       due 90 days or more                                                 15                          -
                                                                          ---                        ---

     Total nonperforming loans                                           $114                       $115
                                                                          ===                        ===

     Total loan loss allowance                                           $213                       $196
                                                                          ===                        ===

Total nonperforming assets as
a percentage of total assets                                              .12%                       .13%
                                                                          ===                        ===
Loan loss allowance as a percent
of nonperforming loans                                                    187%                       170%
                                                                          ===                        ===
</TABLE>


         For the year ended  September  30, 1999,  gross  interest  income which
would have been recorded had non-accruing  loans been current in accordance with
their  original  terms was $3,000.  During the year ended  September  30,  1999,
$7,000 was recorded as interest income as former nonaccruing loans were returned
to accrual status. During the periods shown, Peoples Federal had no restructured


                                      -9-
<PAGE>

loans within the meaning of Statement of Financial Accounting Standards ("SFAS")
No. 15. There are no loans which are not  currently  classified  as  nonaccrual,
more than 90 days past due or restructured but which may be so classified in the
near future  because  management has concerns as to the ability of the borrowers
to comply with repayment terms.

         OTS regulations  require that each thrift institution  classify its own
assets on a regular  basis.  Problem  assets are  classified  as  "substandard,"
"doubtful" or "loss."  "Substandard"  assets have one or more defined weaknesses
and are characterized by the distinct  possibility that the insured  institution
will sustain some loss if the deficiencies are not corrected.  "Doubtful" assets
have  the  same  weaknesses  as  "substandard"   assets,   with  the  additional
characteristics  that (i) the weaknesses  make collection or liquidation in full
on the basis of currently existing facts, conditions and values questionable and
(ii)  there  is a high  possibility  of  loss.  An asset  classified  "loss"  is
considered  uncollectible  and of such little value that its  continuance  as an
asset of the  institution  is not  warranted.  The  regulations  also  contain a
"special mention"  category,  consisting of assets which do not currently expose
an  institution  to a sufficient  degree of risk to warrant  classification  but
which possess credit deficiencies or potential weaknesses deserving management's
close attention.

         Generally,  Peoples Federal  classifies as "substandard" all loans that
are delinquent  more than 90 days,  unless  management  believes the delinquency
status is short-term due to unusual  circumstances.  Loans delinquent fewer than
90 days may also be classified if the loans have the  characteristics  described
above rendering classification appropriate.

         One mortgage and four  consumer  loans in Peoples  Federal's  portfolio
were classified as substandard at September 30, 1999.

         Federal  examiners are authorized to classify an association's  assets.
If an association does not agree with an examiner's  classification of an asset,
it may appeal this  determination  to the Regional  Director of the OTS. Peoples
Federal had no disagreements with the examiners  regarding the classification of
assets at the time of the last examination.

         OTS regulations  require that Peoples Federal establish prudent general
allowances  for loan losses for any loan  classified as substandard or doubtful.
If an asset, or portion  thereof,  is classified as loss, the  association  must
either  establish  specific  allowances  for losses in the amount of 100% of the
portion of the asset classified loss, or charge off such amount.

         Allowance for Loan Losses.  Peoples Federal  maintains an allowance for
loan losses based upon a number of relevant factors,  including, but not limited
to, trends in the level of nonperforming  assets and classified  loans,  current
and  anticipated  economic  conditions in the primary  lending  area,  past loss
experience,  possible losses arising from specific problem assets and changes in
the composition of the loan portfolio.

         The single  largest  component  of  Peoples  Federal's  loan  portfolio
consists of one- to four-family residential real estate loans. Substantially all
of these loans are secured by residential real estate and require a down payment
of 15% of the lower of the sales price or appraised value of the real estate. In
addition,  all of these  loans are  secured by  property  in  Peoples  Federal's
primary  lending area.  Peoples  Federal's  practice of making loans only in its
local market area and  requiring a 15% down payment  have  contributed  to a low
charge-off history.

         In  addition to one- to  four-family  residential  real  estate  loans,
Peoples  Federal  makes  additional  real estate  loans  including  home equity,
multifamily residential real estate, nonresidential real estate and construction
loans.  These real estate  loans are  secured by  property in Peoples  Federal's
lending area and also require the  borrower to provide a down  payment.  Peoples
Federal has not experienced  any  charge-offs  from these other real estate loan
categories.

         Management believes that maintenance of the allowance at current levels
is prudent.  The allowance for loan losses is reviewed quarterly by the Board of
Directors.  While  the  Board  of  Directors  believes  that  it uses  the  best
information  available to determine the  allowance  for loan losses,  unforeseen
market conditions could result in material  adjustments,  and net earnings could
be significantly  adversely affected, if circumstances differ substantially from
the assumptions used in making the final determination.












                                      -10-
<PAGE>

         The  following  table  sets  forth an  analysis  of  Peoples  Federal's
allowance for loan losses for the periods indicated.
<TABLE>
<CAPTION>

                                                                       For the year ended September 30,
                                                                         1999                  1998
                                                                           (Dollars in thousands)
<S>                                                                      <C>                   <C>
Balance at beginning of period                                           $196                  $145

Charge-offs                                                                 -                     -
Recoveries                                                                  5                     9
Provision for loan losses (charged to operations)                          12                    42
                                                                          ---                   ---
Balance at end of period                                                 $213                  $196
                                                                          ===                   ===
Ratio of net charge-offs (recoveries) to
  average net loans outstanding during the
  period                                                                 (.01)%                (.01)%
Ratio of allowance for loan losses to total
  loans                                                                   .27%                  .29%
</TABLE>


         At September  30, 1999,  $30,000 of the  allowance  for loan losses was
allocated to  nonresidential  loans and $183,000  was  allocated to  residential
loans.  At September  30,  1998,  $30,000 of the  allowance  for loan losses was
allocated to  nonresidential  loans and $166,000  was  allocated to  residential
loans.

Mortgage-Backed and Related Securities

         Peoples Federal  maintains a significant  portfolio of  mortgage-backed
securities in the form of FHLMC,  Federal National Mortgage Association ("FNMA")
and   Government   National   Mortgage   Association   ("GNMA")    participation
certificates, as well as two mortgage-backed securities not issued by government
agencies.  Mortgage-backed  securities  generally  entitle  Peoples  Federal  to
receive a portion of the cash flows from an identified pool of mortgages. FHLMC,
FNMA and GNMA securities are each guaranteed by their respective  agencies as to
principal and interest.

         The  FHLMC  is a  corporation  chartered  by the  U.S.  Government  and
guarantees the timely  payment of interest and the ultimate  return of principal
on participation  certificates.  The FNMA is a corporation chartered by the U.S.
Congress and  guarantees  the timely  payment of principal  and interest on FNMA
securities.  Although FHLMC and FNMA securities are not backed by the full faith
and credit of the U.S.  Government,  these  securities are generally  considered
among the highest  quality  investments  with minimal credit risk. The GNMA is a
government   agency.   GNMA   securities   are   backed   by   Federal   Housing
Authority-insured  and  Veterans  Administration-guaranteed  loans.  The  timely
payment of principal  and interest on GNMA  securities is guaranteed by the GNMA
and backed by the full faith and credit of the U.S. Government.

         Peoples Federal has also invested in mortgage-backed  securities issued
by two other issuers.  The first  security  represents a $684,000  interest,  at
market value,  in a trust fund  consisting  primarily of a pool of  conventional
adjustable-rate mortgage loans secured by first liens on multifamily residential
real estate  originated  by Guardian  Savings  and Loan  Association  located in
California  ("Guardian  Savings").  Peoples  Federal  receives  a portion of the
principal and interest  payments made on the underlying loans. The risks of such
securities  include the possibility  that borrowers will default on the loans or
that borrowers will pay the loans before maturity, reducing the yield on Peoples
Federal's investment.

         The second such security  represents the right to receive principal and
interest payments from mortgage loans obtained by persons  purchasing  timeshare
units in Discovery  Beach Resort and Tennis Club in Cocoa  Beach,  Florida.  The
loans are secured by mortgages on the underlying  timeshare  units.  As with the
Guardian Savings  securities,  this security's risks include default on or early
repayment of the loans. As the collateral for the loans is vacation property, it
can  reasonably  be  anticipated  that a borrower  might  default on such a loan
rather than default on a loan secured by a primary  residence.  The market value
of such security at September 30, 1999, was $34,000.

         Neither  of  the  privately   issued   mortgage-backed   securities  is
guaranteed. Peoples Federal is receiving timely payments on both securities.




                                      -11-
<PAGE>

         Peoples   Federal  has  also   invested  in   collateralized   mortgage
obligations ("CMOs"). CMOs are securities issued by special purpose entities and
secured  by  mortgage-backed  securities.  The  cash  flow  from  the  mortgages
underlying  a CMO is  segmented  and  paid in  accordance  with a  predetermined
priority to investors holding various CMO classes. Each class has its own stated
maturity,  estimated average life,  coupon rate and prepayment  characteristics.
All of Peoples Federal's CMOs are performing in accordance with their terms. All
of People's  Federal's CMOs are issued by and guaranteed by FNMA and FHLMC. None
of Peoples Federal's CMOs are considered "high risk" under OTS pronouncements.

         Mortgage-backed  and  related  securities  generally  yield  less  than
individual  loans  originated by Peoples  Federal.  In addition,  a high rate of
prepayment of the underlying loans could have a material  negative effect on the
yield on the  securities,  which are purchased at a premium over their  original
principal  amounts.  Mortgage-backed  and related securities present less credit
risk than loans  originated by Peoples  Federal and held in its  portfolio,  and
Peoples  Federal  has  purchased  adjustable-rate  mortgage-backed  and  related
securities  as part of its effort to reduce its interest  rate risk. If interest
rates rise in general,  including  the interest  paid by Peoples  Federal on its
liabilities,  the interest  rates on the loans backing the  mortgage-backed  and
related  securities will also adjust upward. At September 30, 1999, $6.8 million
of Peoples  Federal's  mortgage-backed  and related  securities  had  adjustable
rates.

         The following table sets forth the carrying value of Peoples  Federal's
mortgage-backed and related securities at the dates indicated.
<TABLE>
<CAPTION>

                                                                                     At September 30,
                                                                              1999                     1998
                                                                                     (In thousands)
<S>                                                                           <C>                       <C>
FNMA certificates                                                          $ 1,659                   $   895
GNMA certificates                                                            3,568                     4,925
FHLMC certificates                                                           4,544                     6,435
Guardian Savings and Loan certificate                                          684                       700
Discovery Resort Limited Partnership Notes                                      34                        91
Collateralized mortgage obligation -
  FHLMC REMIC                                                                  123                       213
                                                                            ------                    ------

Total mortgage-backed  and related securities                              $10,612                   $13,259
                                                                            ======                    ======
</TABLE>

































                                      -12-


<PAGE>


         The  following  table  sets  forth  information   regarding   scheduled
maturities, amortized costs, market value and weighted average yields of Peoples
Federal's mortgage-backed and related securities at September 30, 1999. Expected
maturities will differ from contractual  maturities due to scheduled  repayments
and because  borrowers may have the right to call or prepay  obligations with or
without   prepayment   penalties.   The  following  table  does  not  take  into
consideration  the effects of  scheduled  repayments  or the effects of possible
prepayments.

<TABLE>
<CAPTION>

                                                                At September 30, 1999
                          One year or less      After one to five years   After five to ten years         After ten years
                        Carrying    Average     Carrying     Average       Carrying     Average       Carrying      Average
                         value        yield       value       yield         value       yield          value        yield
                       ---------    ---------  ---------     ---------    ---------     ---------    ---------      -------
                                                               (Dollars in thousands)
<S>                        <C>          <C>        <C>        <C>           <C>           <C>            <C>          <C>

FNMA certificates         $   -           -%    $   -           - %          $335        8.20%        $  345          8.44%
GNMA certificates             -           -         -           -               -          -           3,568          6.72
FHLMC certificates            -           -         -           -             619        7.90            914          7.08
Guardian Savings and Loan
  certificate                 -           -         -           -               -          -             684          6.40
Discovery Resort Limited
  Partnership Notes           -           -        34         7.38              -          -               -            -
FHLMC  REMICs                 -           -         -          -                -          -           4,113          5.85
                           ----        ----      ----         ----            ---        ----          -----          ----
Total                     $   -           -%    $  34         7.38%          $954        8.00%        $9,624          6.42%
                           ====        ====      ====         ====            ===        ====          =====          ====



                                      At September 30, 1999
                           Total mortgage-backed and related securities
                                             portfolio
                              Carrying         Market       Average
                               value           value         yield
                             ---------       ---------     ---------
                                       (Dollars in thousands)
<S>                              <C>            <C>           <C>
FNMA certificates              $   680        $   709         8.32%
GNMA certificates                3,568          3,591         6.72
FHLMC certificates               1,533          1,551         7.41
Guardian Savings and Loan
  certificate                      684            684         6.40
Discovery Resort Limited
  Partnership Notes                 34             34         7.38
FHLMC  REMICs                    4,113          4,113         5.85
                                ------         ------         ----

Total                          $10,612        $10,682         6.56%
                                ======         ======         ====
</TABLE>


         For  additional  information,  see Note B of the Notes to  Consolidated
Financial Statements.








                                      -13-
<PAGE>

Investment Activities

         OTS regulations  require that Peoples Federal maintain a minimum amount
of  liquid  assets,  which  may  be  invested  in U.  S.  Treasury  obligations,
securities  of  various  federal  agencies,  certificates  of deposit at insured
banks, bankers' acceptances and federal funds. Peoples Federal is also permitted
to make investments in certain commercial paper, corporate debt securities rated
in one  of the  four  highest  rating  categories  by  one  or  more  nationally
recognized statistical rating organizations,  and mutual funds, as well as other
investments permitted by federal regulations.

         Peoples   Federal's   investments   include   three   automobile   loan
pass-through  certificates.  Such certificates  represent  interests in pools of
automobile  loans. In November 1996, Duff & Philips withdrew its ratings on some
certificates and at September 30, 1997,  these  investments were written down to
estimated  realizable value. During fiscal 1998, all collections were applied to
principal until the recorded values of the investments were eliminated.  Further
collections  during  fiscal  1998 and 1999 were  recorded  as a recovery  to the
allowance  for  loan  losses.  Management  expects  final  collections  on these
certificates during fiscal 2000.

         The following  table sets forth the  composition  of Peoples  Federal's
certificates of deposit in the Federal Home Loan Bank (the "FHLB") of Cincinnati
and investment securities at the dates indicated:
<TABLE>
<CAPTION>

                                                                    At September 30,
                                                         1999                                          1998
                                    Carrying        % of       Market       % of      Carrying      % of      Market     % of
                                       value       Total        value      Total         value     Total       value    Total
                                                                      (Dollars in thousands)
<S>                                     <C>          <C>         <C>         <C>       <C>       <C>         <C>      <C>
Certificates of deposit in the
  FHLB                                $1,000       24.81%      $1,000      24.55%       $    -          - %   $    -       - %

Investment securities:
  U.S. government and federal
    agency securities                      -        -               -       -            1,003      22.70      1,003     22.30
FHLB and FHLMC stock                   2,074       51.47        2,074      50.90         2,449      55.42      2,449     54.46

Municipal securities                     956       23.72        1,000      24.55           967      21.88      1,045     23.24
                                       -----      ------        -----     ------         -----     ------      -----    ------

Total interest-bearing deposits
  and investment securities           $4,030      100.00%      $4,074     100.00%       $4,419     100.00%    $4,497    100.00%
                                       =====      ======        =====     ======         =====     ======      =====    ======
</TABLE>



























                                      -14-



<PAGE>


         The following  tables set forth the  contractual  maturities,  carrying
values,  market values and average yields for Peoples Federal's  certificates of
deposit in the FHLB of  Cincinnati  and  investment  securities at September 30,
1999.
<TABLE>
<CAPTION>

                                                                    At September 30, 1999
                                           One year or less       After one to five years      After five years
                                       Carrying        Average       Carrying    Average     Carrying       Average
                                        value          yield          value      yield        value         yield
                                                                     (Dollars in thousands)
<S>                                       <C>            <C>            <C>        <C>           <C>          <C>
Investment securities:
Certificates of deposit in
  the FHLB                               $1,000           5.10%          $  -         -%         $  -            -%
FHLB and FHLMC stock                      2,074           3.89              -         -             -            -
Municipal securities                         12           6.50            143       6.25          801         6.06
                                          -----           ----            ---       ----          ---         ----
Total                                    $3,086           4.30%          $143       6.25%        $801         6.06%
                                          =====           ====            ===       ====          ===         ====

</TABLE>


<TABLE>
<CAPTION>

                                                                              At September 30, 1999
                                                       Average                                                  Weighted
                                                        life              Carrying             Market            average
                                                      in years              value              value              yield
                                                                             (Dollars in thousands)
<S>                                                      <C>                <C>                 <C>                <C>
Investment securities:
Certificates of deposit in the
  FHLB                                                    .15               $1,000             $1,000              5.10%
FHLB and FHLMC stock                                        -                2,074              2,074              3.89
Municipal securities                                     5.58                  956              1,000              6.10
                                                         ----                -----              -----              ----

Total                                                    2.86               $4,030             $4,074              4.72%
                                                         ====                =====              =====              ====
</TABLE>


Deposits and Borrowings

         General. Deposits have traditionally been the primary source of Peoples
Federal's funds for use in lending and other investment activities.  In addition
to deposits,  Peoples Federal derives funds from interest payments and principal
repayments  on loans  and  mortgage-backed  and  related  securities,  income on
earning assets,  service charges and gains on the sale of assets.  Loan payments
are a relatively  stable  source of funds,  while  deposit  inflows and outflows
fluctuate  more  in  response  to  general   interest  rates  and  money  market
conditions.  Peoples  Federal first received FHLB advances in April 1998 and PFC
borrowed funds for a brief period in September and October 1997.

         Deposits.  Deposits  are  attracted  principally  from  within  Peoples
Federal's  primary  market area  through the  offering of a broad  selection  of
deposit instruments,  including negotiable order of withdrawal ("NOW") accounts,
money market accounts,  passbook savings accounts and term certificate accounts.
Interest rates paid, maturity terms,  service fees and withdrawal  penalties for
the various types of accounts are established  periodically by the management of
Peoples Federal based on Peoples Federal's liquidity requirements,  growth goals
and interest rates paid by competitors.  Peoples Federal does not use brokers to
attract deposits.

         At  September  30,  1999,  Peoples  Federal's  certificates  of deposit
totaled $50.7 million, or 77% of total deposits.  Of such amount,  approximately
$28.7 million in certificates  of deposit mature within one year.  Based on past
experience  and Peoples  Federal's  prevailing  pricing  strategies,  management
believes that a  substantial  percentage  of such  certificates  will renew with
Peoples Federal at maturity. If there is a significant deviation from historical
experience,  Peoples  Federal  can  utilize  borrowings  from  the  FHLB  as  an
alternative to this source of funds.




                                      -15-
<PAGE>

         The  following  table sets forth the dollar  amount of  deposits in the
various  types of  savings  programs  offered  by  Peoples  Federal at the dates
indicated:
<TABLE>
<CAPTION>

                                                                                At September 30,
                                                                     1999                           1998
                                                                           Percent                          Percent
                                                                          of total                         of total
                                                          Amount          deposits         Amount          deposits
                                                                               (Dollars in thousands)
<S>                                                         <C>              <C>            <C>              <C>
Transaction accounts:
 NOW accounts (1)                                        $ 2,064             3.11%        $ 1,824              2.77%
 Money market accounts (2)                                 2,603             3.93           2,616              3.97
 Passbook savings accounts (3)                            10,869            16.40          10,433             15.86
                                                          ------           ------          ------            ------

  Total transaction accounts
                                                          15,536            23.44          14,873             22.60
Certificates of deposit:
   2.01 -  4.00%                                           1,268             1.91             126               .19
   4.01 -  6.00%                                          40,699            61.41          36,181             54.99
   6.01 -  8.00%                                           8,773            13.24          14,617             22.22
                                                          ------           ------          ------            ------

  Total certificates of deposit
                                                          50,740            76.56          50,924             77.40
                                                          ------           ------          ------            ------
  Total deposits                                         $66,276           100.00%        $65,797            100.00%
                                                          ======           ======          ======            ======
</TABLE>

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

(1)  Peoples  Federal's  weighted  average  interest  rate paid on NOW  accounts
     fluctuates  with the  general  movement  of interest  rates.  The  weighted
     average rate on NOW accounts was 1.50% and 1.75% at September  30, 1999 and
     1998, respectively.

(2)  Peoples  Federal's  weighted  average  interest  rate paid on money  market
     accounts  fluctuates  with the  general  movement of  interest  rates.  The
     weighted  average rate on money market  accounts was 2.19% at September 30,
     1999 and 1998.

(3)  Peoples  Federal's  weighted  average  rate on  passbook  savings  accounts
     fluctuates  with the  general  movement  of interest  rates.  The  weighted
     average rate on passbook accounts was 2.00% at September 30, 1999 and 1998.


         The  following  table shows rate and maturity  information  for Peoples
Federal's certificates of deposit as of September 30, 1999:
<TABLE>
<CAPTION>

                                                                              Amount  Due
                                                                 Over             Over
                                               Up to         1 year to         2 years to        Over
                                             one year         2 years           3 years         3 years         Total
                                             --------         -------           -------         -------         -----
                                                                           (In thousands)
<S>                                             <C>              <C>             <C>           <C>               <C>
  2.01 -   4.00%                              $ 1,262         $     6           $    -         $    -         $ 1,268
  4.01 -   6.00                                25,032          11,333            1,351          2,983          40,699
  Over  6.01                                    2,380           1,223            3,793          1,377           8,773
                                               ------          ------            -----          -----          ------

  Total certificates
    of deposit                                $28,674         $12,562           $5,144         $4,360         $50,740
                                               ======          ======            =====          =====          ======

</TABLE>



                                      -16-
<PAGE>

         The  following   table   presents  the  amount  of  Peoples   Federal's
certificates of deposit of $100,000 or more by the time remaining until maturity
as of September 30, 1999:
<TABLE>
<CAPTION>

  Maturity                                                             Amount
                                                               (In thousands)
<S>                                                                     <C>

  Three months or less                                                 $  465
  Over 3 months to 6 months                                               485
  Over 6 months to 12 months                                            1,807
  Over 12 months                                                        2,672
                                                                        -----
       Total                                                           $5,429
                                                                        =====

</TABLE>

         The  following  table  sets forth  Peoples  Federal's  deposit  account
balance activity for the periods indicated:

<TABLE>
<CAPTION>

                                                    Year ended September 30,
                                                    1999                  1998
                                                     (Dollars in thousands)
<S>                                                 <C>                   <C>
   Beginning balance                             $65,797               $65,660

   Deposits                                       56,363                53,991
   Withdrawals                                   (58,380)              (56,220)
                                                  ------                ------
   Net decreases before interest credited         (2,017)               (2,229)
   Interest credited                               2,496                 2,366
                                                 -------               -------
  Ending balance
                                                 $66,276               $65,797
                                                  ======                ======
    Net increase
                                                 $   479               $   137
                                                  ======                ======

   Percent increase                                  .73%                  .21%
                                                     ===                   ===
</TABLE>


         Borrowings.  The  FHLB  System  functions  as a  central  reserve  bank
providing  credit  for its  member  institutions  and  certain  other  financial
institutions.  As a member in good standing of the FHLB of  Cincinnati,  Peoples
Federal  is  authorized  to apply  for  advances  from  the FHLB of  Cincinnati,
provided  certain  standards of  creditworthiness  have been met.  Under current
regulations,  an association must meet certain qualifications to be eligible for
FHLB advances.  The extent to which an association is eligible for such advances
will depend upon  whether it meets the  Qualified  Thrift  Lender Test (the "QTL
Test").  If an  association  meets the QTL Test, it will be eligible for 100% of
the advances it would otherwise be eligible to receive.  If an association  does
not meet the QTL Test,  it will be eligible for such advances only to the extent
it holds specified QTL Test assets.  At September 30, 1999,  Peoples Federal was
in compliance with the QTL Test.

         The  following  table  sets  forth  certain  information  as  to  PFC's
borrowings at the dates indicated:
<TABLE>
<CAPTION>

                                                          At September 30,
                                                      1999                1998
                                                      (Dollars in thousands)
<S>                                                   <C>                  <C>
FHLB advances                                      $11,000               $4,000
Weighted average interest rate of FHLB
  advances                                             5.45%              5.74%

</TABLE>



                                      -17-
<PAGE>


         The following table sets forth the maximum balance, the average balance
and the weighted average interest rate of PFC's borrowings:
<TABLE>
<CAPTION>

                                                    Year ended September 30,
                                                  1999                 1998
                                                   (Dollars in thousands)
<S>                                               <C>                    <C>
Maximum balance                                 $12,000               $4,000
Average balance                                   6,917                1,583
Weighted average interest rate                     4.94%               5.29%
</TABLE>


         PFC obtained an unsecured 90-day loan from a bank in the amount of $3.0
million,  with an interest rate of 8.5%, in September 1997 in  conjunction  with
its special distribution to shareholders. This loan was repaid in October 1997.

Yields Earned and Rates Paid

         The spread between the average interest rate on interest-earning assets
and the average interest rate on interest-bearing liabilities decreased to 2.43%
for the year ended  September 30, 1999,  from 2.53% for the year ended September
30, 1998. The spread for the year ended September 30, 1998, increased from 2.52%
for the year ended September 30, 1997.

         The yield on  interest-earning  assets  decreased to 7.19% for the year
ended  September 30, 1999,  from 7.48% for the year ended September 30, 1998, as
the  average  rates  on  loans  receivable,   investments  and   mortgage-backed
securities declined. The cost of funds to Peoples Federal decreased to 4.76% for
the year ended  September 30, 1999,  from 4.95% for the year ended September 30,
1998,  due to lower  rates on  certificates  of  deposit,  partially  offset  by
increased average balances on certificates of deposit and FHLB advances.

         The yield on  interest-earning  assets  increased to 7.48% for the year
ended September 30, 1998, from 7.32% for the year ended September 30, 1997, as a
result of an  increase  in loans  receivable,  partly  offset by a  decrease  in
investments and mortgage-backed securities. The cost of funds to Peoples Federal
increased to 4.95% for the year ended  September  30,  1998,  from 4.80% for the
year ended  September 30, 1997, due to an increased  average  balance and higher
rates on certificates of deposit and increased borrowings.




















                                      -18-
<PAGE>


         The following  table sets forth, at the dates  indicated,  the weighted
average yields earned on PFC's  interest-earning  assets,  the weighted  average
interest  yield  paid on  interest-bearing  liabilities  and the  interest  rate
spread.
<TABLE>
<CAPTION>

                                                                                       At September 30,
                                                                                 1999                  1998
<S>                                                                               <C>                  <C>
Weighted average yield on loan portfolio                                         7.47%                 7.73%
Weighted average yield on mortgage-backed and related securities                 6.44                  6.79
Weighted average yield on investment securities                                  4.71                  4.46
Weighted average yield on interest-bearing deposits                              4.29                  4.44
Weighted average yield on all interest-earning assets                            7.14                  7.34
Weighted average yield on deposits                                               4.78                  5.07
Weighted average yield on borrowings                                             5.45                  5.69
Weighted average yield paid on all interest-bearing liabilities                  4.88                  5.11
                                                                                 ----                  ----
Interest rate spread (spread between weighted average interest rate
  on all interest-bearing assets and all interest-bearing liabilities)           2.26%                 2.23%
                                                                                 ====                  ====
</TABLE>


Competition

         Peoples Federal competes for deposits with other savings  associations,
commercial  banks and credit unions and with the issuers of commercial paper and
other  securities,  such as shares in money  market  mutual  funds.  The primary
factors in competing for deposits are interest  rates and  convenience of office
location.   In  making  loans,  Peoples  Federal  competes  with  other  savings
associations,  commercial  banks,  consumer  finance  companies,  credit unions,
leasing  companies,  mortgage  companies  and  other  lenders.  Peoples  Federal
competes for loan  originations  primarily  through the interest  rates and loan
fees  offered  and  through the  efficiency  and  quality of services  provided.
Competition  is affected by, among other  things,  the general  availability  of
lendable funds,  general and local economic  conditions,  current  interest rate
levels and other factors which are not readily predictable.

         The size of financial  institutions  competing with Peoples  Federal is
likely  to  increase  as  a  result  of  changes  in  statutes  and  regulations
eliminating various restrictions on interstate and inter-industry  branching and
acquisitions.
Such increased competition may have an adverse effect upon Peoples Federal.

Subsidiaries

         Peoples  Federal  owns  all  of the  outstanding  shares  of  Massillon
Community  Service  Corporation,  the only asset of which was stock of Intrieve,
Incorporated,  a data processing  company.  Such shares were redeemed on October
20, 1995.

Personnel

         As of September 30, 1999,  Peoples  Federal had 19 full-time  employees
and 3 part-time employees.


                                   REGULATION

General

         PFC is a savings  and loan  holding  company  within the meaning of the
Home Owners Loan Act, as amended (the "HOLA").  Consequently,  PFC is subject to
regulation,  examination  and  oversight  by the OTS and  must  submit  periodic
reports  to the OTS  concerning  its  activities  and  financial  condition.  In
addition,  as a  corporation  organized  under  Ohio  law,  PFC  is  subject  to
provisions of the Ohio Revised Code applicable to corporations generally.

         As a savings association organized under the laws of the United States,
Peoples Federal is subject to regulatory  oversight by the OTS.  Because Peoples
Federal's  deposits are insured by the FDIC,  Peoples Federal is also subject to
examination  and  regulation  by the FDIC.  Peoples  Federal must file  periodic
reports  with  the  OTS  concerning  its  activities  and  financial  condition.
Examinations are conducted  periodically by the OTS to determine whether Peoples
Federal is in compliance with various  regulatory  requirements and is operating
in a safe  and  sound  manner.  Peoples  Federal  is a  member  of the  FHLB  of
Cincinnati.



                                      -19-
<PAGE>

         On November 12, 1999,  the  Gramm-Leach-Bliley  Act (the "GLB Act") was
enacted into law. The GLB Act makes sweeping  changes in the financial  services
in which various types of financial  institutions may engage. The Glass-Steagall
Act, which had generally  prevented banks from  affiliating  with securities and
insurance firms,  was repealed.  A new "financial  holding  company," which owns
only  well  capitalized  and  well  managed  depository  institutions,  will  be
permitted to engage in a variety of financial  activities,  including  insurance
and securities underwriting and agency activities.

         The GLB Act permits  unitary  savings  and loan  holding  companies  in
existence on May 4, 1999, including PFC, to continue to engage in all activities
that they were  permitted to engage in prior to the  enactment of the Act.  Such
activities  are  essentially  unlimited,  provided  that the  thrift  subsidiary
remains a qualified  thrift lender.  Any thrift holding company formed after May
4, 1999,  will be subject to the same  restrictions as a multiple thrift holding
company.  In addition,  a unitary thrift holding  company in existence on May 4,
1999,  may be sold only to a financial  holding  company  engaged in  activities
permissible for multiple savings and loan holding companies.

         The GLB Act is not expected to have a material effect on the activities
in which PFC and Peoples  Federal  currently  engage,  except to the extent that
competition  with other types of  financial  institutions  may  increase as they
engage in activities not permitted prior to enactment of the GLB Act.

Office of Thrift Supervision

         General.  The OTS is an office of the Department of the Treasury and is
responsible  for  the  regulation  and  supervision  of all  federally-chartered
savings  associations  and all other savings  associations the deposits of which
are insured by the FDIC in the Savings Association Insurance Fund ("SAIF").  The
OTS  issues  regulations   governing  the  operation  of  savings  associations,
regularly  examines  such  associations  and  imposes   assessments  on  savings
associations based on their asset size to cover the costs of general supervision
and examination.  The OTS also may initiate  enforcement actions against savings
associations and certain persons  affiliated with them for violations of laws or
regulations  or for  engaging  in unsafe or unsound  practices.  If the  grounds
provided by law exist,  the OTS may  appoint a  conservator  or  receiver  for a
savings association.

         Savings  associations are subject to regulatory oversight under various
consumer  protection  and fair  lending  laws.  These laws  govern,  among other
things,  truth-in-lending  disclosures,  equal credit  opportunity,  fair credit
reporting  and  community  reinvestment.  Failure to abide by  federal  laws and
regulations  governing  community  reinvestment  could  limit the  ability of an
association to open a new branch or engage in a merger.  Community  reinvestment
regulations  evaluate  how well and to what  extent  an  institution  lends  and
invests in its  designated  service area,  with  particular  emphasis on low- to
moderate-income communities and borrowers in that area.

         Regulatory  Capital  Requirements.  Peoples  Federal is required by OTS
regulations to meet certain minimum capital  requirements.  The tangible capital
requirement  requires savings associations to maintain "tangible capital" of not
less than 1.5% of their  adjusted total assets.  Tangible  capital is defined in
OTS regulations as core capital minus any intangible assets.

         "Core capital" is comprised of common  stockholders'  equity (including
retained earnings),  noncumulative preferred stock and related surplus, minority
interests in consolidated  subsidiaries,  certain  nonwithdrawable  accounts and
pledged  deposits  of  mutual  associations.  OTS  regulations  require  savings
associations  to  maintain  core  capital of at least 4% of their  total  assets
except for  associations  with the  highest  examination  rating and  acceptable
levels of risk.

         OTS regulations require that savings associations  maintain "risk-based
capital" in an amount not less than 8% of their risk-weighted assets. Risk-based
capital is defined as adjusted  core capital plus  certain  additional  items of
capital,  which in the case of  Peoples  Federal  includes  a general  loan loss
allowance of $213,000 at September 30, 1999.

         The OTS has adopted an interest rate risk  component to the  risk-based
capital  requirement.  Pursuant to the interest rate risk  component,  a savings
association  will have to measure  the effect of an  immediate  200 basis  point
change in interest  rates on the value of its portfolio as determined  under the
methodology  of the OTS. If the measured  interest  rate risk is above the level



                                      -20-
<PAGE>

deemed normal under the regulation,  the association  will be required to deduct
one-half of such excess  exposure  from its total capital when  determining  its
risk-based  capital.  In general,  an association with less than $300 million in
assets and a risk-based  capital ratio in excess of 12% is not be subject to the
interest rate risk component.

         The OTS has adopted  regulations  governing prompt corrective action to
resolve  the  problems  of capital  deficient  and  otherwise  troubled  savings
associations.   At  each  successively   lower  defined  capital  category,   an
association  is subject  to more  restrictive  and more  numerous  mandatory  or
discretionary  regulatory actions or limits, and the OTS has less flexibility in
determining how to resolve the problems of the institution. In addition, the OTS
generally can downgrade an association's  capital category,  notwithstanding its
capital level, if, after notice and opportunity for hearing,  the association is
deemed to be  engaging  in an  unsafe or  unsound  practice  because  it has not
corrected  deficiencies  that resulted in it receiving a less than  satisfactory
examination  rating on matters  other  than  capital or it is deemed to be in an
unsafe or unsound  condition.  All  undercapitalized  associations must submit a
capital   restoration   plan  to  the  OTS   within  45  days   after   becoming
undercapitalized.  Such associations will be subject to increased monitoring and
asset  growth  restrictions  and will be required to obtain  prior  approval for
acquisitions,  branching  and  engaging in new lines of  business.  Furthermore,
critically  undercapitalized  institutions must be placed in  conservatorship or
receivership within 90 days of reaching that capitalization  level, except under
limited circumstances.  Peoples Federal's capital at September 30, 1999, met the
standards for the highest category, a "well-capitalized" institution.

         Federal  law  prohibits  a savings  association  from  making a capital
distribution to anyone or paying management fees to any person having control of
the association if, after such distribution or payment, the association would be
undercapitalized.  In addition,  each company  controlling  an  undercapitalized
association  must  guarantee that the  association  will comply with its capital
plan until the association has been adequately  capitalized on an average during
each of four preceding calendar quarters and must provide adequate assurances of
performance.  The aggregate  liability  pursuant to such guarantee is limited to
the lesser of (a) an amount equal to 5% of the association's total assets at the
time  the  institution  became  undercapitalized  and  (b)  the  amount  that is
necessary to bring the association  into  compliance with all capital  standards
applicable to such association at the time the association  fails to comply with
its capital restoration plan.

         Liquidity.  OTS regulations require that a savings association maintain
a minimum daily balance of liquid assets (cash, certain time deposits,  bankers'
acceptances  and specified  United States  government,  state or federal  agency
obligations).  During fiscal 1999,  certain maturity  requirements were removed,
which,  in Peoples  Federal's  case,  resulted in a greater  eligible  liquidity
amount and  percentage  at  September  30,  1999,  than at prior  year ends.  At
September 30, 1999,  such minimum  requirement  was an amount equal to a monthly
average  of not  less  than 4% of its net  withdrawable  savings  deposits  plus
borrowings  payable in one year or less.  Monetary penalties may be imposed upon
associations failing to meet the liquidity  requirement.  The eligible liquidity
of Peoples Federal at September 30, 1999, was  approximately  $13.3 million,  or
17.2%.

         Qualified  Thrift  Lender Test.  Savings  associations  are required to
maintain a  specified  level of  investments  in assets that are  designated  as
qualifying thrift investments ("QTIs"),  which are generally related to domestic
residential  real  estate and  manufactured  housing and  include  credit  card,
student and small  business loans and stock issued by any FHLB, the FHLMC or the
FNMA. Under such test, 65% of an institution's  "portfolio assets" (total assets
less goodwill and other  intangibles,  property used to conduct business and 20%
of liquid assets) must consist of QTI on a monthly  average basis in nine out of
every 12 months. A savings  association may also qualify as a QTL by meeting the
definition  of  "domestic  building  and loan  association"  under the  Internal
Revenue Code of 1986, as amended (the "Code").  In order for an  institution  to
meet the  definition  of a "domestic  building and loan  association"  under the
Code, at least 60% of such institution's  assets must consist of specified types
of  property,  including  cash  loans  secured  by  residential  real  estate or
deposits,  educational loans and certain governmental  obligations.  The OTS may
grant  exceptions  to the QTL test  under  certain  circumstances.  If a savings
association  fails to meet the QTL test, the association and its holding company
become  subject to certain  operating  and  regulatory  restrictions.  A savings
association  that fails to meet the QTL test will not be  eligible  for new FHLB
advances. At September 30, 1999, Peoples Federal met the QTL test.

         Lending Limit.  OTS regulations  generally  limit the aggregate  amount
that a savings association can lend to one borrower to an amount equal to 15% of
the association's  Lending Limit Capital. A savings  association may lend to one
borrower an  additional  amount not to exceed 10% of the  association's  Lending
Limit  Capital,  if the  additional  amount is fully secured by certain forms of
"readily  marketable   collateral."  Real  estate  is  not  considered  "readily


                                      -21-
<PAGE>

marketable  collateral."  Certain  types of loans are not subject to the lending
limit. A general  exception to the 15% limit  provides that an  association  may
lend to one borrower up to $500,000,  for any purpose.  In applying the limit on
loans to one borrower,  the  regulations  require that loans to certain  related
borrowers  be  aggregated.  At  September  30,  1999,  Peoples  Federal  was  in
compliance with this lending limit.

         Transactions with Insiders and Affiliates. Loans to executive officers,
directors and principal shareholders and their related interests must conform to
the  lending  limit on loans to one  borrower,  and the  total of such  loans to
executive  officers,   directors,   principal  shareholders  and  their  related
interests  cannot  exceed the  association's  Lending  Limit Capital (or 200% of
Lending Limit Capital for qualifying institutions with less than $100 million in
deposits).   Most  loans  to   directors,   executive   officers  and  principal
shareholders  must be approved  in advance by a majority of the  "disinterested"
members of the board of  directors  of the  association,  with any  "interested"
director  not  participating.  All loans to  directors,  executive  officers and
principal  shareholders must be made on terms  substantially the same as offered
in  comparable  transactions  with  the  general  public  or as  offered  to all
employees in a company-wide benefit program, and loans to executive officers are
subject to additional  limitations.  Peoples Federal was in compliance with such
restrictions at September 30, 1999.

         All transactions between savings associations and their affiliates must
comply with  Sections  23A and 23B of the Federal  Reserve Act (the  "FRA").  An
affiliate of a savings  association is any company or entity that  controls,  is
controlled by or is under common control with the savings association. PFC is an
affiliate  of Peoples  Federal.  Generally,  Sections 23A and 23B of the FRA (i)
limit the extent to which a savings  association or its  subsidiaries may engage
in "covered  transactions"  with any one  affiliate to an amount equal to 10% of
such  institution's  capital stock and surplus,  (ii) limit the aggregate of all
such  transactions with all affiliates to an amount equal to 20% of such capital
stock and  surplus,  and (iii)  require that all such  transactions  be on terms
substantially  the same, or at least as favorable to the  association,  as those
provided in transactions  with a non-affiliate.  The term "covered  transaction"
includes the making of loans,  purchasing of assets, issuance of a guarantee and
other similar types of  transactions.  In addition to the limits in Sections 23A
and 23B,  a  savings  association  may not make any loan or other  extension  of
credit to an  affiliate  unless  the  affiliate  is engaged  only in  activities
permissible  for a bank  holding  company  and may not  purchase  or  invest  in
securities of any affiliate  except shares of a subsidiary.  Peoples Federal was
in compliance with these requirements and restrictions at September 30, 1999.

         Limitations  on  Capital   Distributions.   The  OTS  imposes   various
restrictions  or  requirements  on the ability of  associations  to make capital
distributions,  including dividend payments.  An association which has converted
from mutual to stock form is prohibited  from  declaring or paying any dividends
or from  repurchasing  any of its stock  if,  as a result,  the net worth of the
association  would be reduced below the amount required to be maintained for the
liquidation   account  established  in  connection  with  its  mutual  to  stock
conversion.

         An  application  must be submitted  and  approval  from the OTS must be
obtained  by a  subsidiary  of a savings  and loan  holding  company  (1) if the
proposed  distribution would cause total distributions for that calendar year to
exceed net income for that year to date plus the savings association's  retained
net income for the preceding two years; (2) if the savings  association will not
be at least adequately  capitalized following the capital  distribution;  (3) if
the  proposed   distribution  would  violate  a  prohibition  contained  in  any
applicable statute,  regulation or agreement between the savings association and
the OTS (or the FDIC), or a condition  imposed on the savings  association in an
OTS-approved  application or notice;  or (4) if the savings  association has not
received  certain  favorable  examination  ratings  from the OTS.  If a  savings
association  subsidiary  of a  holding  company  is  not  required  to  file  an
application, it must file a notice with the OTS.

         Holding Company  Regulation.  PFC is a savings and loan holding company
within the meaning of the HOLA. As such, PFC has registered  with the OTS and is
subject to OTS regulations, examination, supervision and reporting requirements.

         The HOLA  generally  prohibits a savings and loan holding  company from
controlling any other savings  association or savings and loan holding  company,
without prior  approval of the OTS, or from  acquiring or retaining more than 5%
of the voting shares of a savings association or holding company thereof,  which
is not a  subsidiary.  Under certain  circumstances,  a savings and loan holding
company is permitted to acquire,  with the approval of the OTS, up to 15% of the
previously unissued voting shares of an undercapitalized savings association for
cash without  such savings  association  being deemed to be  controlled  by PFC.
Except  with the prior  approval of the OTS, no director or officer of a savings
and loan holding  company or person owning or  controlling by proxy or otherwise
more than 25% of such holding  company's  stock may also acquire  control of any
savings institution,  other than a subsidiary institution,  or any other savings
and loan holding company.

         As a unitary  savings and loan holding  company,  PFC  generally has no
restrictions on its activities. The broad latitude to engage in activities under
current law can be restricted.  If the OTS  determines  that there is reasonable
cause to believe that the  continuation by a savings and loan holding company of


                                      -22-
<PAGE>

an activity  constitutes  a serious risk to the financial  safety,  soundness or
stability  of its  subsidiary  savings  association,  the  OTS may  impose  such
restrictions as deemed  necessary to address such risk,  including  limiting (i)
payment of dividends by the savings  association,  (ii) transactions between the
savings association and its affiliates,  and (iii) any activities of the savings
association that might create a serious risk that the liabilities of PFC and its
affiliates  may be  imposed  on the  savings  association.  Notwithstanding  the
foregoing rules as to permissible  business  activities of a unitary savings and
loan holding company, if the savings association subsidiary of a holding company
fails to meet the QTL test,  then such  unitary  holding  company  would  become
subject to the activities restrictions applicable to multiple holding companies.
At September 30, 1999, Peoples Federal met both those tests.

         If PFC  acquired  control of another  savings  institution,  other than
through a merger or other business  combination with Peoples Federal,  PFC would
become a multiple savings and loan holding  company.  Unless the acquisition was
an emergency thrift acquisition and each subsidiary savings  association met the
QTL test, the activities of PFC and any of its subsidiaries  (other than Peoples
Federal or other subsidiary savings associations) would thereafter be subject to
activity restrictions.

         The  OTS may  approve  acquisitions  resulting  in the  formation  of a
multiple savings and loan holding company that controls savings  associations in
more  than one state  only if the  multiple  savings  and loan  holding  company
involved controls a savings association that operated a home or branch office in
the state of the  association to be acquired as of March 5, 1987, or if the laws
of the state in which the  institution  to be acquired  is located  specifically
permit  institutions to be acquired by  state-chartered  institutions or savings
and loan holding  companies  located in the state where the acquiring  entity is
located (or by a holding  company that  controls  such  state-chartered  savings
institutions).  As under prior law, the OTS may approve an acquisition resulting
in a multiple savings and loan holding company controlling savings  associations
in more than one state in the case of certain emergency thrift acquisitions.

         Federal  Regulation  of  Acquisitions  of  Control  of PFC and  Peoples
Federal.   Federal   limitations   generally  require  regulatory   approval  of
acquisitions at specified  levels.  Under pertinent federal law and regulations,
no person, directly or indirectly, or acting in concert with others, may acquire
control of  Peoples  Federal or PFC  without 60 days'  prior  notice to the OTS.
"Control"  is  generally  defined as having  more than 25%  ownership  or voting
power;  however,  ownership  or  voting  power of more  than  10% may be  deemed
"control" if certain factors are in place. If the acquisition of control is by a
company,  the acquiror  must obtain  approval,  rather than give notice,  of the
acquisition as a savings and loan holding company.

         In addition, any merger of Peoples Federal must be approved by the OTS.
Further,  any merger of PFC in which PFC is not the resulting  company must also
be approved by the OTS.

Federal Deposit Insurance Corporation

         Deposit Insurance and Assessments.  The FDIC is an independent  federal
agency  that  insures  the  deposits,  up to  prescribed  statutory  limits,  of
federally  insured banks and savings and loan  associations  and  safeguards the
safety and  soundness of the banking and savings and loan  industries.  The FDIC
administers two separate  insurance  funds,  the Bank Insurance Fund ("BIF") for
commercial banks and state savings banks and the SAIF for savings  associations.
Peoples Federal is a member of the SAIF and its deposit  accounts are insured by
the FDIC up to the prescribed  limits.  The FDIC has examination  authority over
all  insured  depository  institutions,   including  Peoples  Federal,  and  has
authority to initiate  enforcement  actions  against  federally-insured  savings
associations if the FDIC does not believe the OTS has taken  appropriate  action
to safeguard safety and soundness and the deposit insurance fund.

         The FDIC is required to maintain  designated  levels of reserves in the
SAIF and in the BIF. The FDIC may increase  assessment  rates for either fund if
necessary  to restore the fund's  ratio of  reserves to insured  deposits to its
target level within a reasonable time and may decrease such rates if such target
level has been met. The FDIC has established a risk-based  assessment system for
both SAIF and BIF members. Under this system, assessments vary based on the risk
the  institution  poses  to its  deposit  insurance  fund.  The  risk  level  is
determined  based on the  institution's  capital  level and the FDIC's  level of
supervisory concern about the institution.

         Prior to  September  1996,  the  SAIF's  ratio of  reserves  to insured
deposits  was  significantly  below the level  required by law,  while the BIF's
ratio was above the required level. As a result,  institutions with SAIF-insured
deposits were paying higher deposit insurance assessments than institutions with
BIF-insured deposits.  Federal legislation providing for the recapitalization of
the SAIF became effective in September 1996 and included a special assessment of
$.657 per $100 of SAIF-insured  deposits held at March 31, 1995. Peoples Federal
had  approximately  $65.5  million in  deposits  at March 31,  1995,  and paid a
special assessment of $427,000.


                                      -23-
<PAGE>

Federal Reserve Requirements

         Effective   December  1,  1998,   FRB   regulations   require   savings
associations to maintain reserves of 3% of net transaction  accounts  (primarily
NOW  accounts)  up to  $44.3  million  (subject  to an  exemption  of up to $5.0
million),  and of 10% of net transaction accounts in excess of $44.3 million. At
September  30,  1999,  Peoples  Federal  was  in  compliance  with  the  reserve
requirements then in effect and also with the new requirements.

Federal Home Loan Banks

         The Federal Home Loan Banks provide credit to their members in the form
of  advances.  Peoples  Federal is a member of the FHLB of  Cincinnati  and must
maintain an  investment  in the capital  stock of the FHLB of  Cincinnati  in an
amount  equal to the  greater  of 1.0% of the  aggregate  outstanding  principal
amount of Peoples Federal's  residential mortgage loans, home purchase contracts
and similar  obligations  at the  beginning of each year,  or 5% of its advances
from the  FHLB of  Cincinnati.  Peoples  Federal  was in  compliance  with  this
requirement with an investment in stock of the FHLB of Cincinnati of $924,000 at
September 30, 1999.

         FHLB  advances  to  member  institutions  who  meet  the QTL  Test  are
generally  limited  to the  lower of (i) 25% of the  member's  assets or (ii) 20
times the member's  investment  in FHLB stock.  At September  30, 1999,  Peoples
Federal's  maximum  limit on  advances  was  approximately  $18.5  million.  The
granting  of  advances  is also  subject  to the  FHLB's  collateral  and credit
underwriting guidelines.

         Upon the  origination  or  renewal  of a loan or  advance,  the FHLB is
required by law to obtain and maintain a security  interest in collateral in one
or more of the following categories: fully-disbursed, whole first mortgage loans
on improved residential property or securities  representing a whole interest in
such  loans;  securities  issued,  insured or  guaranteed  by the United  States
Government  or an agency  thereof;  deposits  in any FHLB;  or other real estate
related collateral (up to 30% of the member association's capital) acceptable to
the FHLB, if such collateral has a readily  ascertainable value and the FHLB can
perfect its security interest in the collateral.

         The FHLB is required to establish standards of community  investment or
service  that its  members  must  maintain  for  continued  access to  long-term
advances.  The  standards  take into  account a member's  performance  under the
Community  Reinvestment Act and its record of lending to first-time home buyers.
All  long-term  advances  by the FHLB  must be made  only to  provide  funds for
residential housing finance.


                                    TAXATION

Federal Taxation

         PFC and Peoples  Federal  are each  subject to the federal tax laws and
regulations  which apply to corporations  generally.  In addition to the regular
income tax,  PFC and Peoples  Federal may be subject to an  alternative  minimum
tax.  An  alternative  minimum  tax is imposed  at a minimum  tax rate of 20% on
"alternative  minimum  taxable  income"  (which  is the  sum of a  corporation's
regular taxable income,  with certain  adjustments,  and tax preference  items),
less any available  exemption.  Such tax  preference  items include  interest on
certain  tax-exempt  bonds issued after August 7, 1986. In addition,  75% of the
amount  by  which  a  corporation's  "adjusted  current  earnings"  exceeds  its
alternative  minimum taxable income  computed  without regard to this preference
item and prior to reduction by net operating  losses, is included in alternative
minimum  taxable  income.  Net  operating  losses can offset no more than 90% of
alternative  minimum taxable income.  The alternative  minimum tax is imposed to
the  extent it  exceeds  the  corporation's  regular  income  tax.  Payments  of
alternative  minimum tax may be used as credits  against regular tax liabilities
in  future  years.  However,  the  Taxpayer  Relief  Act of  1997  repealed  the
alternative minimum tax for certain "small corporations" for tax years beginning
after  December  31,  1997.  A  corporation   initially  qualifies  as  a  small
corporation if it had average gross receipts of $5,000,000 or less for the three
tax years ending with its first tax year beginning after December 31, 1996. Once
a  corporation  is  recognized  as a small  corporation,  it will continue to be
exempt  from  the  alternative  minimum  tax for as long  as its  average  gross
receipts  for the  prior  three-year  period  does  not  exceed  $7,500,000.  In
determining  if a  corporation  meets this  requirement,  the first year that it
achieved small corporation status is not taken into consideration. PFC's average
gross receipts for the three tax years ending on September 30, 1999 is $191,000,
and,  as a result,  PFC does  qualify  as a small  corporation  exempt  from the
alternative  minimum tax. Peoples Federal's average gross receipts for the three
tax years  ending on  September  30, 1999,  is $6.5  million,  and, as a result,
Peoples  Federal  does  not  qualify  as a small  corporation  exempt  from  the
alternative minimum tax.


                                      -24-
<PAGE>
         Prior to the enactment of the Small  Business Jobs  Protection Act (the
"Act"),   which  was  signed  into  law  on  August  21,  1996,  certain  thrift
institutions,  such as Peoples  Federal,  were allowed  deductions for bad debts
under methods more  favorable than those granted to other  taxpayers.  Qualified
thrift  institutions  could  compute  deductions  for bad debts using either the
specific  charge-off  method of  Section  166 of the Code or one of two  reserve
methods of Section 593 of the Code. The reserve methods under Section 593 of the
Code permitted a thrift institution  annually to elect to deduct bad debts under
either (i) the "percentage of taxable  income" method  applicable only to thrift
institutions,  or (ii) the "experience"  method that also was available to small
banks.  Under the "percentage of taxable income"  method,  a thrift  institution
generally  was allowed a deduction for an addition to its bad debt reserve equal
to 8% of its taxable  income  (determined  without  regard to this deduction and
with  additional   adjustments).   Under  the  "experience"   method,  a  thrift
institution  was  generally  allowed a deduction for an addition to its bad debt
reserve  equal to the  greater  of (i) an  amount  based on its  actual  average
experience for losses in the current and five preceding  taxable years,  or (ii)
an amount necessary to restore the reserve to its balance as of the close of the
base year. A thrift  institution  could elect  annually to compute its allowable
addition to bad debt reserves for  qualifying  loans either under the experience
method or the percentage of taxable income method.  For tax years prior to 1996,
Peoples Federal generally used the percentage of taxable income method.

         The  Act   eliminated  the  percentage  of  taxable  income  method  of
accounting  for bad debts by thrift  institutions,  effective  for taxable years
beginning after 1995.  Thrift  institutions  that are treated as small banks are
allowed to utilize the experience method applicable to such institutions,  while
thrift institutions that are treated as large banks are required to use only the
specific charge off method.

         A thrift  institution  required  to  change  its  method  of  computing
reserves  for bad debts  will  treat  such  change as a change in the  method of
accounting,  initiated  by the taxpayer and having been made with the consent of
the  Secretary of the  Treasury.  Section  481(a) of the Code  requires  certain
amounts to be recaptured with respect to such change.  Generally, the amounts to
be recaptured will be determined  solely with respect to the "applicable  excess
reserves" of the taxpayer.  The amount of the applicable excess reserves will be
taken into account  ratably over a six-taxable  year period,  beginning with the
first  taxable  year  beginning  after  1995,  subject to the  residential  loan
requirement described below. In the case of a thrift institution that is treated
as a large bank,  the amount of the  institution's  applicable  excess  reserves
generally  is the  excess  of (i) the  balances  of its  reserve  for  losses on
qualifying real property loans (generally loans secured by improved real estate)
and its reserve for losses on nonqualifying  loans (all other types of loans) as
of the close of its last taxable year  beginning  before  January 1, 1996,  over
(ii) the  balances  of such  reserves as of the close of its last  taxable  year
beginning before January 1, 1988 (i.e., the "pre-1988 reserves"). In the case of
a thrift institution that is treated as a small bank, like Peoples Federal,  the
amount of the institution's  applicable excess reserves  generally is the excess
of (i) the balances of its reserve for losses on qualifying  real property loans
and its  reserve for losses on  nonqualifying  loans as of the close of its last
taxable  year  beginning  before  January 1, 1996,  over (ii) the greater of the
balance of (a) its  pre-1988  reserves or (b) what the thrift's  reserves  would
have been at the close of its last year  beginning  before  January 1, 1996, had
the thrift always used the experience method.

         For  taxable  years that begin  after  December  31,  1995,  and before
January 1, 1998, if a thrift meets the  residential  loan  requirement for a tax
year, the recapture of the applicable excess reserves  otherwise  required to be
taken into  account as a Code  Section  481(a)  adjustment  for the year will be
suspended. A thrift meets the residential loan requirement if, for the tax year,
the principal amount of residential  loans made by the thrift during the year is
not less than its base amount. The "base amount" generally is the average of the
principal  amounts of the  residential  loans made by the thrift  during the six
most recent tax years beginning  before January 1, 1996. A residential loan is a
loan as  described  in Section  7701(a)(19)(C)(v)  (generally  a loan secured by
residential or church property and certain mobile homes), but only to the extent
that the loan is made to the owner of the property.

         The balance of the pre-1988  reserves is subject to the  provisions  of
Section 593(e),  as modified by the Act, which require  recapture in the case of
certain excessive  distributions to shareholders.  The pre-1988 reserves may not
be  utilized  for  payment  of  cash  dividends  or  other  distributions  to  a
shareholder  (including  distributions in dissolution or liquidation) or for any
other  purpose  (except  to  absorb  bad debt  losses).  Distribution  of a cash
dividend by a thrift institution to a shareholder is treated as made: first, out
of the institution's post-1951 accumulated earnings and profits;  second, out of
the pre-1988  reserves;  and third, out of such other accounts as may be proper.
To the extent a distribution by Peoples Federal to PFC is deemed paid out of its
pre-1988  reserves under these rules, the pre-1988 reserves would be reduced and
the gross income of Peoples  Federal for tax purposes  would be increased by the
amount  which,  when  reduced by the income  tax,  if any,  attributable  to the
inclusion of such amount in its gross income,  equals the amount deemed paid out
of the pre-1988  reserves.  As of September 30, 1999,  the pre-1988  reserves of
Peoples Federal for tax purposes  totaled  approximately  $1.8 million.  Peoples
Federal believes it had approximately  $3.6 million of accumulated  earnings and
profits for tax purposes as of September 30, 1999,  which would be available for
dividend  distributions,  provided  regulatory  restrictions  applicable  to the
payment  of  dividends  are met.  No  representation  can be made as to  whether
Peoples  Federal  will have  current  or  accumulated  earnings  and  profits in
subsequent years.


                                      -25-
<PAGE>
         The tax returns of Peoples  Federal have been audited or closed without
audit through fiscal year 1995. In the opinion of management, any examination of
open  returns  would not  result in a  deficiency  which  could  have a material
adverse effect on the financial condition of Peoples Federal.

Ohio Taxation

         PFC is subject to the Ohio corporation franchise tax, which, as applied
to PFC, is a tax measured by both net earnings and net worth. The rate of tax is
the greater of (i) 5.1% on the first $50,000 of computed Ohio taxable income and
8.9% of computed  Ohio taxable  income in excess of $50,000 or (ii) 0.582% times
taxable net worth.  For tax years beginning after December 31, 1998, the rate of
tax is the  greater of (i) 5.1% on the first  $50,000 of computed  Ohio  taxable
income and 8.5% of  computed  Ohio  taxable  income in excess of $50,000 or (ii)
 .400% times taxable net worth.

         A special litter tax is also applicable to all corporations,  including
PFC,  subject  to the Ohio  corporation  franchise  tax  other  than  "financial
institutions."  If the franchise tax is paid on the net income basis, the litter
tax is equal to .11% of the first  $50,000 of computed  Ohio taxable  income and
 .22% of computed Ohio taxable income in excess of $50,000.  If the franchise tax
is paid on the net worth basis,  the litter tax is equal to .014% times  taxable
net worth.

         Peoples  Federal  is a  "financial  institution"  for State of Ohio tax
purposes.  As  such,  it is  subject  to the  Ohio  corporate  franchise  tax on
"financial  institutions,"  which was  imposed  annually  at a rate of 1.5% (for
years prior to 1999) of the taxable book net worth of Peoples Federal determined
in accordance with generally accepted accounting principles.  For tax year 1999,
however, the franchise tax on financial  institutions is computed as 1.4% of the
taxable book net worth and for tax year 2000 and years  thereafter  the tax will
be 1.3% of the taxable  book net worth.  As a "financial  institution,"  Peoples
Federal is not subject to any tax based upon net income or net  profits  imposed
by the State of Ohio.


Item 2.       Description of Property

         The  following  table sets forth certain  information  at September 30,
1999,  regarding the properties on which the main office,  the branch office and
the lending office of Peoples Federal are located:
<TABLE>
<CAPTION>


                                            Owned           Date       Square               Net
Location                                or leased       acquired      footage      book value(1)              Deposits
<S>                                         <C>             <C>          <C>              <C>                   <C>
Main Office:

211 Lincoln Way East
Massillon, Ohio  44646                      Owned           1958        7,200          $647,000              $50.3 million

Branch Office:

2312 Lincoln Way N.W.
Massillon, Ohio  44647                      Owned           1978        1,400          $421,000              $16.0 million

Lending Office:

4344 Metro Circle, N.W.
North Canton, Ohio 44720                 Leased(2)           N/A           -                 -                    N/A

</TABLE>

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

(1)  At September 30, 1999,  Peoples Federal's office premises and equipment had
     a  total  net  book  value  of $1.4  million.  For  additional  information
     regarding Peoples Federal's office premises and equipment,  see Notes A and
     E of Notes to Consolidated Financial Statements.

(2)  The lease is for a term of three years, expiring in 2002, with a three-year
     renewal option.



                                      -26-
<PAGE>


Item 3.       Legal Proceedings

         Neither  PFC nor  Peoples  Federal is  presently  involved in any legal
proceedings of a material nature.  From time to time, Peoples Federal is a party
to legal proceedings incidental to its business to enforce its security interest
in collateral pledged to secure loans made by Peoples Federal.

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

         Not applicable.


                                     PART II

Item 5.       Market for Common Equity and Related Stockholder Matters

         There were  1,265,108  common shares of PFC  outstanding on December 3,
1999, held of record by approximately 340  shareholders.  Price information with
respect  to  PFC's  common  shares  is  quoted  on The  Nasdaq  SmallCap  Market
("Nasdaq")  under the symbol "PFFC." The high and low bids for the common shares
of PFC, as quoted by Nasdaq,  and dividends declared per common share for fiscal
years ending  September 30, 1998 and  September  30, 1999,  are set forth below.
Such amounts do not include retail markups, markdowns or commissions.
<TABLE>
<CAPTION>

                              09/99      06/99      03/99      12/98       09/98       06/98        03/98       12/97
<S>                             <C>       <C>        <C>         <C>         <C>         <C>          <C>        <C>
Dividends Declared           $ 0.160     $ 0.160   $ 0.150    $ 0.150     $ 0.150     $ 0.150      $ 0.125     $ 0.125
High Bid During Quarter       10.000      10.125    10.875     12.000      13.063      16.375       20.000      15.250
Low Bid During Quarter         9.438       8.750     8.000      9.500      10.313      12.625       14.000      12.500
</TABLE>

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


         The income of PFC  consists  of  dividends  which may  periodically  be
declared  and paid by the Board of  Directors  of Peoples  Federal on the common
shares of Peoples Federal held by PFC and earnings on deposits in FHLB, from the
net proceeds  retained by PFC from the sale of PFC's common shares in connection
with the Conversion.  In addition to certain federal income tax  considerations,
OTS regulations impose limitations on the payment of dividends and other capital
distributions by savings associations.

         Under OTS  regulations  applicable to converted  savings  associations,
Peoples  Federal is not permitted to pay a cash dividend on its common shares if
the regulatory  capital of Peoples  Federal would, as a result of the payment of
such dividend,  be reduced below the amount required for the liquidation account
(which was established  for the purpose of granting a limited  priority claim on
the assets of Peoples Federal, in the event of a complete liquidation,  to those
members of Peoples  Federal before the Conversion who maintain a savings account
at Peoples  Federal  after the  Conversion)  or  applicable  regulatory  capital
requirements prescribed by the OTS.

         An  application  must be submitted  and  approval  from the OTS must be
obtained  by a  subsidiary  of a savings  and loan  holding  company  (1) if the
proposed  distribution would cause total distributions for that calendar year to
exceed net income for that year to date plus the savings association's  retained
net income for the preceding two years; (2) if the savings  association will not
be at least adequately  capitalized following the capital  distribution;  (3) if
the  proposed   distribution  would  violate  a  prohibition  contained  in  any
applicable statute,  regulation or agreement between the savings association and
the OTS (or the FDIC), or a condition  imposed on the savings  association in an
OTS-approved  application or notice;  or (4) if the savings  association has not
received  certain  favorable  examination  ratings  from the OTS.  If a  savings
association  subsidiary  of a  holding  company  is  not  required  to  file  an
application, it must file a notice with the OTS.

Item 6.       Management's Discussion and Analysis or Plan of Operation

         The information required herein is incorporated by reference from PFC's
1999 Annual Report to Shareholders ("Annual Report"), the Managements Discussion
and Analysis of which is included in Exhibit 13 as attached hereto.




                                      -27-

<PAGE>
Item 7.       Financial Statements

         The financial  statements required herein are incorporated by reference
from the Annual  Report,  the  financial  statements  of which are  included  in
Exhibit 13 attached hereto.

Item 8.       Changes in and Disagreements with Accountants on Accounting and
              Financial Disclosure

         Not applicable.


                                    PART III

Item 9.       Directors,  Executive Officers,  Promoters and Control Persons;
              Compliance with Section 16(a) of the Exchange Act

        The information contained in the definitive Proxy Statement for the 2000
Annual Meeting of Shareholders of PFC (the "Proxy Statement"), which is included
as Exhibit 99.1 hereto, under the caption "PROPOSAL ONE - ELECTION OF DIRECTORS"
is incorporated herein by reference.

Item 10.      Executive Compensation

        The  information  contained  in the Proxy  Statement  under the  caption
"COMPENSATION  OF EXECUTIVE  OFFICERS AND DIRECTORS" is  incorporated  herein by
reference.

Item 11.      Security Ownership of Certain Beneficial Owners and Management

        The  information  contained  in the Proxy  Statement  under the  caption
"VOTING SECURITIES AND OWNERSHIP OF CERTAIN BENEFICIAL OWNERS AND MANAGEMENT" is
incorporated herein by reference.

Item 12.      Certain Relationships and Related Transactions

        The  information  contained  in the Proxy  Statement  under the  caption
"COMPENSATION  OF EXECUTIVE  OFFICERS AND DIRECTORS - Certain  Transactions"  is
incorporated herein by reference.



























                                      -28-
<PAGE>

Item 13.      Exhibits and Reports on Form 8-K
<TABLE>
<CAPTION>

              (a)   Exhibits
<S>                                                                <C>
                    3.1             Articles of Incorporation (incorporated by reference)

                    3.2             Code of Regulations (incorporated by reference)

                    10.1            Employment Agreement with Mr. Paul von Gunten  (incorporated
                                    by reference)

                    10.2            Employment Agreement with Ms. Linda Fowler (incorporated
                                    by reference)

                    10.3            Employment Agreement with Mr. James Rinehart (incorporated
                                    by reference)

                    10.4            Employment Agreement with Ms. Cynthia Wagner (incorporated
                                    by reference)

                    10.5            Peoples Financial Corporation 1997 Stock Option and Incentive Plan (incorporated by
                                    reference)

                    10.6            Peoples Financial Corporation Recognition and Retention Plan and Trust Agreement
                                    (incorporated by reference)

                    13              Portions of 1999 Annual Report to Shareholders

                    21              Subsidiaries of Peoples Financial Corporation (incorporated by reference)

                    23              Consent of Grant Thornton LLP

                    27              Financial Data Schedule

                    99.1            Proxy Statement for 2000 Annual Meeting of Shareholders (incorporated by reference)

                    99.2            Safe Harbor Under the Private Securities Litigation Reform Act of 1995
</TABLE>

              (b)   No reports on Form 8-K were filed  during the last  quarter
                    of the fiscal year ended September 30, 1999.













                                      -29-
<PAGE>


                                   SIGNATURES

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

                                         PEOPLES FINANCIAL CORPORATION


                                         By/s/Paul von Gunten
                                         Paul von Gunten
Date  December 28, 1999                  President
                                         (Principal Executive Officer)

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

By /s/ Paul von Gunten                  By /s/ James R. Rinehart
    Paul von Gunten                        James R. Rinehart
    President and Director                 Treasurer
                                           (Principal Financial Officer)


Date  December 28, 1999                 Date  December 28, 1999



By /s/ Victor C. Baker                  By /s/ James P. Bordner
    Victor C. Baker                        James P. Bordner
    Director                               Director


Date  December 28, 1999                 Date  December 28, 1999



By /s/ Alan C. Edie                     By /s/ Thomas E. Shelt
    Alan C. Edie                           Vincent G. Matecheck
    Director                               Secretary and Director



Date  December 28, 1999                 Date  December 28, 1999



By /s/ Thomas E. Shelt                  By /s/ Vince E. Stephan
    Thomas E. Shelt                        Vince E. Stephan
    Director                               Chairman of the Board of Directors


Date  December 28, 1999                 Date  December 28, 1999








                                      -30-
<PAGE>


                                INDEX TO EXHIBITS

<TABLE>
<CAPTION>

EXHIBIT
NUMBER        DESCRIPTION
<S>                 <C>                                                                  <C>
3.1           Articles of Incorporation of Peoples Financial           Incorporated by reference to Pre-Effective
              Corporation                                              Amendment No. 1 to the Registration Statement
                                                                       on Form S-1 of the Registrant (No. 333-2690)
                                                                       filed with the Securities and Exchange
                                                                       Commission (the "SEC") on June 28, 1996 (the
                                                                       "S-1"), Exhibit 3.1.

3.2           Code of Regulations of Peoples Financial Corporation     Incorporated by reference to Exhibit 3.2 to the
                                                                       S-1.

10.1          Employment Agreement with Mr. von Gunten                 Incorporated by reference to Exhibit 10.1 to the
                                                                       Form 10-KSB filed by the Registrant with the
                                                                       SEC on December 26, 1996 (the "1996 10-KSB").

10.2          Employment Agreement with Ms. Fowler                     Incorporated by reference to Exhibit 10.2 to the
                                                                       1996 10-KSB.

10.3          Employment Agreement with Mr. Rinehart                   Incorporated by reference to Exhibit 10.3 to the
                                                                       1996 10-KSB.

10.4          Employment Agreement with Ms. Wagner                     Incorporated by reference to Exhibit 10.4 to the
                                                                       1996 10-KSB.

10.5          Peoples Financial Corporation 1997 Stock Option          Incorporated by reference to Exhibit A to the
              and Incentive Plan                                       definitive Proxy Statement filed with the SEC on
                                                                       February 6, 1997.

10.6          Peoples Financial Corporation Recognition and            Incorporated by reference to Exhibit B to the
              Retention Plan and Trust Agreement                       definitive Proxy Statement filed with the SEC on
                                                                       February 6, 1997.

13            Portions of 1999 Annual Report to Shareholders

21            Subsidiaries of Peoples Financial Corporation            Incorporated by reference to Exhibit 21 to the
                                                                       1996 10-KSB.
23            Consent of Grant Thornton LLP

27            Financial Data Schedule

99.1          Proxy Statement for the 2000 Annual Meeting of           Incorporated by reference to definitive Proxy
              Shareholders.                                            Statement to be filed separately.

99.2          Safe Harbor Under the Private Securities Litigation
              Reform Act of 1995
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