SECURITIES AND EXCHANGE COMMISSION
                    Washington, DC  20549

FORM 10-QSB


(Mark One)

[ X ]    QUARTERLY REPORT UNDER SECTION 13 OR 15 (d) OF THE
         SECURITIES EXCHANGE ACT OF 1934
             FOR THE QUARTER ENDED MARCH 31, 2003

[   ]    TRANSITION REPORT UNDER SECTION 13 OR 15(d) OF THE
         SECURITIES AND EXCHANGE ACT OF 1934 FOR THE
         TRANSITION PERIOD FROM
             __________________ TO _________________

              Commission File Number:  0001060244

              _______PEOPLES BANCORP, INC._______
      (Exact name of issuer as specified in its charter)

 ______Maryland________       _________52-2027776_________
(State of incorporation)  (I.R.S. Employer Identification No.)

P. O. BOX 210, 100 SPRING STREET, CHESTERTOWN, MARYLAND 21620
           (Address of principal executive offices)

                  _____(410) 778-3500_____
                 (Issuer's telephone number)

 _______________________Not Applicable_______________________
(Former name, former address and former fiscal year, if
                   changed since last report)


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

State the number of shares outstanding of each of the issuer's
classes of common equity, as of the latest practicable date:

THE REGISTRANT HAS 796,304 SHARES OF COMMON STOCK ($10.00 PAR)
OUTSTANDING AS OF MARCH 31, 2003.

Transitional Small Business Disclosure Format (check one)
             YES _________            NO ____X____




PEOPLES BANCORP, INC. AND SUBSIDIARY
FORM 10-QSB
INDEX


Part I  -  Financial Information                          Page

     Item 1   Financial Statements
              Consolidated Statements of Condition           3
              Consolidated Statements of Income              4
              Consolidated Statements of Cash Flows          5
              Notes to Financial Statements                  6

     Item 2   Management's Discussion and Analysis of
              Financial Condition and Results of
              Operation                                    7-9

     Item 3   Controls and Procedures                       10


Part II   -   Other Information

     Item 1   Legal Proceedings                             11
     Item 2   Changes in Securities                         11
     Item 3   Defaults Upon Senior Securities               11
     Item 4   Submission of Matters to a Vote of Security
              Holders                                       11
     Item 5   Other Information                             11
     Item 6   Exhibits and Reports on Form 8-K              11






PEOPLES BANCORP, INC. AND SUBSIDIARY
PART I - FINANCIAL INFORMATION
CONSOLIDATED STATEMENTS OF CONDITION
(Dollar Amounts In Thousands)        (un-audited)
                                       March 31   December 31,
                    ASSETS               2003             2002
Cash and due from banks                  $4,703         $5,024
Federal funds sold                        5,023          3,652
Interest-bearing deposits                     0              0
Investment securities available for sale 28,282         33,364
Investment securities held to maturity  (approximate fair
   value of $2,056 and $2,082)            2,025          2,027
Loans, less allowance for credit losses
  of $1,159 and $1,160                  120,277        119,535
Premises and equipment                    3,366          3,428
Accrued interest income                   1,013          1,029
Federal Home Loan Bank stock                411            386
Other assets                                733            675
                                       $165,833       $169,120

              LIABILITIES AND STOCKHOLDERS' EQUITY
Deposits
  Noninterest-bearing                   $21,826        $22,745
  Interest-bearing                      116,827        115,435
                                        138,653        138,180
Fed Funds Purchased And Repurchase
  Agreements                              6,633         10,727
Accrued interest payable                    343            357
Accrued expenses                            381             86
Deferred income taxes                       251            281
Other liabilities                           216            201
                                        146,477        149,832
Stockholders' equity
  Common stock, par value $10 per share authorized 876,000
  shares, issued and outstanding 796,304 shares as of
  March 31, 2003                          7,963          8,013
  Capital surplus                         2,921          2,921
  Retained earnings                       7,850          7,684
                                         18,734         18,618
  Net unrealized gain on securities
   available for sale                       622            670
                                         19,356         19,288
                                       $165,833       $169,120



PEOPLES BANCORP, INC. AND SUBSIDIARY
CONSOLIDATED STATEMENTS OF INCOME (UNAUDITED)
(DOLLAR AMOUNTS IN THOUSANDS EXCEPT PER-SHARE DATA)
                                      For the three
                                      months ended    Year End
                                         March 31     December
                                      2003      2002      2002
Interest and dividend revenue
  Loans, including fees             $2,040    $2,019    $8,302
  U.S. Treasury securities               0         0         0
  Government Agencies Securities       363       458     1,706
  Municipal Securities                   0         0         0
  Federal funds sold                    13        10        49
  Deposits with banks                    0         0         0
  Equity securities                      5         6        23
   Total interest and dividend revenue
                                     2,421     2,493    10,080

Interest expense
  Deposit and Repurchase Agreement     727       801     3,168
   Total interest expense              727       801     3,168

   Net interest income               1,694     1,692     6,912

Provision for credit losses              3        18       133
   Net interest income after
   Provision for credit losses       1,691     1,674     6,779

Other operating revenue
  Service charges on deposit
     accounts                          154       138       612
  Miscellaneous revenue                 72        72       194
   Total other operating revenue       226       210       806

Other expenses
  Salaries and employee benefits       637       603     2,501
  Occupancy                             51        46       209
  Furniture and equipment               56        52       222
  Other operating                      268       264     1,111
   Total other expenses              1,012       965     4,043

Income before income taxes             905       919     3,542
Income taxes                           333       333     1,287
Net income                            $572      $586    $2,255

Basic earnings per common share      $0.71     $0.72     $2.80



PEOPLES BANCORP, INC. AND SUBSIDIARY
CONSOLIDATED STATEMENTS OF CASH FLOWS            (UNAUDITED)
                                                 For the Three
                                                 Months Ended
                                                  March 31
CASH FLOWS FROM OPERATING ACTIVITIES           2003      2002
  Interest received                           $2,435   $2,370
  Other revenue received                         178      119
  Cash paid for operating expenses              (643)    (846)
  Interest paid                                 (742)    (909)
  Taxes paid                                    (348)       0
                                                 880      734
CASH FLOWS FROM INVESTING ACTIVITIES
  Cash paid for premises, equipment, intangibles,
    and construction in progress                  (2)     (41)
  Net customer loans repaid (advanced)          (736)  (3,461)
  Proceeds from sales and maturities of securities
    Available for sale                         5,001      603
    Held to maturity                               0        0
  Purchase of FHLB stock                         (25)       0
  Proceeds from sale of other real estate owned
          and equipment                           10        0
                                               4,248   (2,899)
CASH FLOWS FROM FINANCING ACTIVITIES
  Net change in time deposits                  1,229     (748)
  Net change in other deposits                  (756)   3,196
  Net change in Securities sold under repurchase
   agreements                                    906   (2,393)
  Repayment of Notes payable                  (5,000)       0
  Repurchase of stock                           (200)    (385)
  Dividends paid                                (275)    (244)
                                              (4,078)    (574)
NET INCREASE (DECREASE) IN CASH                1,050   (2,739)
CASH AND EQUIVALENTS AT BEGINNING OF PERIOD    8,676    6,928
CASH AND EQUIVALENTS AT END OF PERIOD         $9,726   $4,189
RECONCILIATION OF NET INCOME TO NET CASH PROVIDED
  FROM OPERATING ACTIVITIES
  Net income                                    $572     $586
  ADJUSTMENTS
    Depreciation and amortization                 57       59
    Provision for loan losses                      3       18
    Security discount accretion, net of premium
      amortization                                 7       (1)
    Loss (gains) on sales                          0        0
    Decrease (increase) in accrued interest
      receivable and other assets                (45)    (183)
    Increase (decrease)
      Deferred origination fees and costs, net    (9)     (10)
      Accrued Interest payable and other
           liabilities                           295       265
                                                $880      $734



PEOPLES BANCORP, INC. AND SUBSIDIARY
NOTES TO FINANCIAL STATEMENTS



1.        BASIS OF PRESENTATION

          The accompanying unaudited condensed financial
statements have been prepared in accordance with generally
accepted accounting principles for the interim financial
information and with the instructions to Form 10-QSB and
Regulation S-X of the Securities and Exchange Commission.
Accordingly, they do not include all the information and
footnotes required by generally accepted accounting principles
for complete financial statements.  In the opinion of
management, all adjustments (consisting of normal recurring
accruals) considered necessary for a fair presentation have
been included.  The operating results of the quarter ended
March 31, 2003 is not necessarily indicative of the results
that may be expected for the years ending December 31, 2003.
For further information, refer to the financial statements and
footnotes included in the annual report as of December 31,
2002.

2.        CASH FLOWS

          For purposes of reporting cash flows, cash and cash
equivalents include cash on hand, amounts due from banks and
overnight investments in federal funds sold.

3.        COMPREHENSIVE INCOME

          For the three months ended March 31, 2003 and 2002,
total comprehensive income, net of taxes, was $524,000 and
$409,000 respectively.

4.        COMMITMENTS

          For purposes of reporting unused commitments, the
following table represents un-funded obligations rounded to
the approximate thousand dollar of obligation:


          Revolving home equity lines     $   2,153,000.00
          Commercial Real Estate          $   2,501,000.00
          Other unused commitments        $  15,795,000.00
          Commercial Letters of Credit    $   2,154,000.00



PEOPLES BANCORP, INC. AND SUBSIDIARY
PART I  FINANCIAL INFORMATION
ITEM 2  MANAGEMENT'S DISCUSSION AND ANALYSIS OR PLAN OF
OPERATION

          This Report contains statements which constitute
forward-looking statements within the meaning of Section 27A
of the Securities Act of 1933 and Section 21E of the
Securities Exchange Act of 1934.  These statements appear in a
number of places in this Report and include all statements
regarding the intent, belief or current expectations of the
Company, its directors or its officers with respect to, among
other things: (i) the Company's financing plans; (ii) trends
affecting the Company's financial condition or results of
operations; (iii) the Company's growth strategy and operating
strategy; and (iv) the declaration and payment of dividends.
Investors are cautioned that any such forward-looking
statements are not guarantees of future performance and
involve risks and uncertainties, and that actual results
may differ materially from those projected in the forward-
looking statements as a result of various factors discussed
herein and those factors discussed in detail in the Company's
filings with the Securities and Exchange Commission.

          The following discussion of the financial condition
and results of operations of the Registrant (the Company)
should be read in conjunction with the Company's financial
statements and related notes and other statistical information
included elsewhere herein.


GENERAL

          The Company was incorporated in Maryland on December
10, 1996 as a bank holding company.  Stock of a Maryland state
bank with the name Peoples Bank of Kent County, Maryland  (the
"Bank") was exchanged in March, 1997 for the outstanding stock
of the Company.

          The Bank was established and incorporated in 1910.
The Company currently engages in no business other than owning
and managing the Bank.


FINANCIAL CONDITION, LIQUIDITY AND SOURCES OF CAPITAL

          The primary sources of liquidity of the Bank are
from loan payments, short-term investments, including federal
funds sold, and cash and due from banks.  Average liquid
assets (cash and amounts due from banks, interest bearing
deposits in other banks, federal funds sold, and investment
securities) compared to average deposits were 28.19% at March
31, 2003 as compared to 30.33% at the same period last year.
Another source of liquidity is a secured line of credit for
$21,769,000 from the Federal Home Loan Bank of which
$2,000,000 has been advanced leaving $19,769,000 available, as
well as lines of credit in the amount of $8,000,000 from
correspondent banks, namely, Bank of America and Allfirst
Bank.

          Tier one capital ratios of the Bank, based on
average assets for the three months ended March 31, 2003 and
2002 were 13.76% and 15.00%, respectively.  Both are
substantially in excess of regulatory minimum requirements.
The Bank expects that its current capital and short-term
investments will satisfy the Bank's cash requirements for the
foreseeable future.  However, no assurance can be given in
this regard as rapid growth, deterioration in loan quality or
a downturn in earnings, or a combination of these factors
could change the Bank's capital position in a relatively short
period of time.

          At March 31, 2003, the Bank's interest rate
sensitivity, as measured by gap analysis, showed the bank was
liability-sensitive with a three-month cumulative gap, as a
percentage of interest-earning assets, of 92.81%.  This shows
that the bank is fairly evenly matched where any rate change
will affect the same amount of both assets and liabilities.
Generally, liability sensitivity indicates that a higher
dollar amount of liabilities re-price than assets and in a
declining rate environment net interest income increases.  On
the other hand, if interest rates increase, then typically the
net interest income should decline.  The bank controls this
matching of assets to liabilities to minimize interest rate
risk while at the same time maximizing income.


RESULTS AND PLAN OF OPERATION

          Net income for the three months ended March 31,
2003, was $572,000, or $.71 per share, compared to $586,000,
or $.72 per share, for the first three months of 2002.  Net
interest income increased approximately $2,000 with a decrease
of approximately $15,000 in provision to loan losses, and
other operating income increased approximately $16,000.
However those increases were offset by an increase of $47,000
in total other operating expenses.  The increase in total
operating expenses is primarily attributed to an increase in
salaries and benefits of approximately $34,000.  The Bank has
had growth in total assets of $10,256,000 as of March 31, 2003
compared to March 31,2002.

          The Bank's loan portfolio increased from $119.5
million at December 31, 2002 to $120.3 million at March 31,
2003.  Loan income has increased $21,000 or 1.04% from
$2,019,000 for the first three months of 2002 to $2,040,000
for the first three months ended March 30, 2003.  The Bank's
provision for loan losses was $3,000 for the quarter ended
March 31, 2003 compared to $18,000 for the quarter ended March
21, 2002.  The allowance for loan losses was .95% of total
loans in 2003.  The level of the allowance for loan losses
represents management's current estimate of future losses in
the loan portfolio; however, there can be no assurance that
loan losses in future periods will not exceed the allowance
for loan losses or that additional increases in the allowance
will not be required.


                 ALLOWANCE FOR LOAN LOSSES
                                                     Year end
                                  March 30,2002  December 2002
Balance at beginning of year         1,159,910       1,062,286
Loan losses:
  Commercial                                 0          15,473
  Mortgages                                  0               0
  Consumer                               6,064          21,786
            Total loan losses            6,064          37,259
Recoveries on loans previously charged off
  Commercial                                 0              63
  Mortgages                                  0               0
  Consumer                               2,048           1,820
            Total loan recoveries        2,048           1,883
Net loan losses                          4,016          35,376

Provision for loan losses charged to
            expense                      3,000         133,000
Balance                              1,158,894       1,159,910
Allowance for loan losses to loans
            outstanding                   .95%           0.96%


          Non-interest expense increased $47,000 to $1,012,000
for the quarter ended March 31, 2003, from $965,000 for the
quarter ended March 31, 2002.  The increase was primarily
related to the increases in salaries and benefits of $34,000.
The increase in salaries and benefits was due to increased
health insurance premiums.

          The company's assets ended the first quarter of 2003
at $165.8 million, a decrease of $3,287,000, or 1.98% from
$169.1 million at December 31, 2003.  This decrease can be
attributed primarily to a decrease in the Banks available for
sale investments of $5.1, which was offset by $1.4 million
increase in Federal Funds sold.

          Management expects that its 2003 income will exceed
expenses.  Although management expects that the Company's
current profitably will continue, future events, such
as an unanticipated deterioration in the loan portfolio, could
reverse this trend.  Management's expectations are based on
managements best judgments and actual results will depend on
the number of factors that cannot be predicted with certainty
and thus fulfillment of managements expectations cannot be
assured.

          The Bank employed sixty-four full time equivalent
employees during the first quarter of 2003.  The Company
employs no employees outside those hired by the Bank.

          The Bank offers a variety of commercial banking
services in its trade area, which encompasses all of Kent
County, northern Queen Anne's County and southern Cecil
County, Maryland.  This primary service area is located
between the Chesapeake Bay and the western boundary of
Delaware.  The Bank emphasizes its primary goal of meeting the
banking needs of individuals and small to medium sized
business in its daily operations.  The Bank offers a full
range of deposit services that are generally available in most
banks and other similar institutions, i.e., checking accounts,
now accounts, savings accounts and other time deposits of
various types, ranging from daily money market accounts to
long-term certificates of deposit.

          The Bank also offers a broad range of short and
medium term commercial and personal loans.  The bank
originates demand and balloon type mortgage loans to fit may
types of loan requests, i.e., real estate construction,
acquisition, home equity and a variety of commercial purposes.
Loans originated to date are anticipated to be held in the
Bank's portfolio.

          The Bank's services also include cash management
opportunities, safe deposit boxes, direct deposit of various
types of needs, automatic transfers of funds, as well as
discount brokerage services and financial planning, along with
security sales and purchases, including mutual funds and
annuities.  The bank also offers ATM services though the Star
and Cirrus networks.  The Bank offers Master Card and Visa
credit card services through a correspondent bank as an agent
for the Bank as well as debit card services.

MARKET RISK

          Net interest income of the Company is one of the
most important factors in evaluating the financial performance
of the Company.  The Company uses interest sensitivity
analysis to determine the effect of rate changes.  Net
interest income is projected over the one-year period to
determine the effect of an increase or decrease in the prime
rate of 100 basis points.  If prime were to decrease 100 basis
points, the Company would experience a decrease in net
interest income of approximately $36,000, if all assets and
liabilities maturing within that period were adjusted for the
rate change.  The sensitivity analysis does not consider the
likelihood of these rate changes nor whether management's
reaction to this rate change would be to re-price its loans
and deposits.  This paragraph contains certain forward-looking
statements within the meaning of and made pursuant to the safe
harbor provisions of the Private Litigation Securities Reform
Act of 1995.




PEOPLES BANCORP, INC. AND SUBSIDIARY
PART I  FINANCIAL INFORMATION
Item 3   CONTROLS AND PROCEDURES.



          Within 90 days prior to the date of this report, we
carried out an evaluation, under the supervision and with the
participation of our principal executive officer and principal
financial officer, of the effectiveness of the design and
operation of our disclosure controls and procedures.  Based on
this evaluation, our principal executive officer and principal
financial officer concluded that our disclosure controls and
procedures are effective in timely alerting them to material
information required to be included in our periodic SEC
reports.  The design of any system of controls is based in
part upon certain assumptions about the likelihood of future
events, and there can be no assurance that any design will
succeed in achieving its stated goals under all potential
future conditions, regardless of how remote.

          In addition, we reviewed our internal controls, and
there have been no significant changes in our internal
controls or in other factors that could significantly affect
those controls subsequent to the date of their last
evaluation.



PEOPLES BANCORP, INC. AND SUBSIDIARY
PART II  OTHER INFORMATION


Item 1   LEGAL PROCEEDINGS
         Not applicable

Item 2   CHANGES IN SECURITIES
         The Bank adopted a policy of purchasing stock from
         existing stockholders.
         During the present quarter 5,000 shares of stock were
         purchased.

Item 3   DEFAULTS UPON SENIOR SECURITIES
         Not applicable

Item 4   SUBMISSION OF MATTERS TO A VOTE OF SECURITY HOLDERS
         Not applicable

Item 5   OTHER INFORMATION
         Not applicable.

Item 6   EXHIBITS AND REPORTS ON FORM 8-K
     a)  Exhibits
         1.  Proxy Statement dated May 29, 2002, is
             incorporated by reference.
         2.  Registration statement dated May 1, 1998, is
             incorporated by reference.

     b)  Reports on Form 8-K
         There were no reports on Form 8-K filed for the
         quarter ended March 31, 2003.






                       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 BANCORP, INC.




Date: __MAY 9, 2003__             By: _/X/THOMAS G. STEVENSON
                                   Thomas G. Stevenson
                                   President,
                                   Chief Executive Officer and
                                   Chief Financial Officer




CERTIFICATION OF PRINCIPAL EXECUTIVE AND FINANCIAL OFFICER


Pursuant to 18 U.S.C. 1350
(Section 302 and 906 of the Sarbanes-Oxley Act of 2002)

I, Thomas G. Stevenson, certify that:

1.  I have reviewed this quarterly report on Form 10-Q of
    Peoples Bancorp, Inc.;

2.  Based on my knowledge, this quarterly report does not
    contain any untrue statement of a material fact or omit to
    state a material fact necessary to make the statements
    made, in light of the circumstances under which such
    statements were made, not misleading with respect to the
    period covered by this quarterly report;

3.  Based on my knowledge, the financial statements, and other
    financial information included in this quarterly report,
    fairly present in all material respects the financial
    condition, results of operations and cash flows of the
    registrant as of, and for, the periods presented in
    this quarterly report;

4.  The registrant's other certifying officers and I are
    responsible for establishing and maintaining disclosure
    controls and procedures (as defined in Exchange Act Rules
    13a-14 and 15d-14) for the registrant and we have:

     a) designed such disclosure controls and procedures to
        ensure that material information relating to the
        registrant, including its consolidated subsidiaries,
        is made known to us by others within those entities,
        particularly during the period in which this quarterly
        report is being prepared;

     b) evaluated the effectiveness of the registrant's
        disclosure controls and procedures as of a date within
        90 days prior to the filing date of this quarterly
        report (March 20, 2003); and

     c) presented in this quarterly report our conclusions
        about the effectiveness of the disclosure controls and
        procedures based on our evaluation as of the
        Evaluation Date;

5.  The registrant's other certifying officers and I have
    disclosed, based on our most recent evaluation, to the
    registrant's auditors and the audit committee of
    registrant's board of directors (or persons performing the
    equivalent function):

     a) all significant deficiencies in the design or
        operation of internal controls which could adversely
        affect the registrant's ability to record, process,
        summarize and report financial data and have
        identified for the registrant's auditors any material
        weaknesses in internal controls; and

     b) any fraud, whether or not material, that involves
        management or other employees who have a significant
        role in the registrant's internal controls; and

6.  The registrant's other certifying officers and I have
    indicated in this [quarterly/annual] report whether or not
    there were significant changes in internal controls or in
    other factors that could significantly affect internal
    controls subsequent to the date of our most recent
    evaluation, including any corrective actions with regard
    to significant deficiencies and material weaknesses.

                                 Peoples Bancorp, Inc.


Date: __MAY 9, 2003__            By:_/X/THOMAS G. STEVENSON_
                                   Thomas G. Stevenson
                                   President,
                                   Chief Executive Officer
                                   and Chief Financial Officer





                      EXHIBIT 99.1

PEOPLES BANCORP, INC. CERTIFICATION OF PRESIDENT, CHIEF
EXECUTIVE OFFICER AND CHIEF FINANCIAL OFFICER

Certification of President, Chief Executive Officer and Chief
                 Financial Officer
              Pursuant to 18 U.S.C. 1350
      (Section 906 of the Sarbanes-Oxley Act of 2002)


We, the undersigned, certify that to the best of our
knowledge, based upon a review of the Quarterly Report on Form
10-Q for the period ended June 30, 2002 of the Registrant (the
"Report"):

    ( 1 )   The Report fully complies with the requirements of
            Section 13(a) or 15(d) of the Securities Exchange
            Act of 1934, as amended; and


    ( 2 )   The information contained in the Report fairly
            presents, in all material respects, the financial
            condition and  results of operations of the
            Registrant.


                                Peoples Bancorp, Inc.



Date: __MAY 9,2003__            By:_/X/THOMAS G. STEVENSON_
                                  Thomas G. Stevenson
                                  President,
                                  Chief Executive Officer
                                  and Chief Financial Officer