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, 2004

[   ]    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 794,012 SHARES OF COMMON STOCK ($10.00 PAR)
OUTSTANDING AS OF MARCH 31, 2004.

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  7-10

    Item 3  Controls and Procedures 0                       11


Part II  -  Other Information
    Item 1  Legal Proceedings                               12
    Item 2  Changes in Securities                           12
    Item 3  Defaults Upon Senior Securities                 12
    Item 4  Submission of Matters to a Vote of Security
            Holders                                         12
    Item 5  Other Information                               12
    Item 6  Exhibits and Reports on Form 8-K                12



PEOPLES BANCORP, INC. AND SUBSIDIARY
PART I - FINANCIAL INFORMATION
CONSOLIDATED STATEMENTS OF CONDITION (unaudited)
(Dollar Amounts In Thousands)
                                       March 31   December 31,
                                         2004           2003
                     ASSETS
Cash and due from banks                  $4,259       $3,479
Federal funds sold                        2,758        7,509
Securities available for sale            19,878       22,901
Securities held to maturity
  (approximate fair value of $5,087
    and $3,044)                           5,021        3,034
Federal Home Loan Bank stock                411          411
Loans, less allowance for loan losses
  of $1,205 and $1,217                  144,422      137,800
Premises and equipment                    3,759        3,747
Accrued interest receivable                 894          897
Other assets                                685          619
                                       $182,087     $180,397

            LIABILITIES AND STOCKHOLDERS' EQUITY
Deposits
  Noninterest-bearing                   $26,413      $25,023
  Interest-bearing                      120,714      122,734
                                        147,127      147,757
Securities sold under
  repurchase agreements                   8,558        8,975
Notes payable                             5,000        3,000
Accrued interest payable                    288          312
Accrued expenses                            440           64
Deferred income taxes                        91           99
Other liabilities                           259          243
                                        161,763      160,450
Stockholders' equity
  Common stock, par value $10 per share authorized 1,000,000
  shares, issued and   outstanding 794,012 shares
  as of March 31, 2004                    7,940        7,940
  Additional Paid in capital              2,921        2,921
  Retained earnings                       9,080        8,691
                                         19,941       19,552
   Accumulated other comprehensive income   383          395
                                         20,324       19,947
                                       $182,087     $180,397




PEOPLES BANCORP, INC. AND SUBSIDIARY
CONSOLIDATED STATEMENTS OF INCOME (unaudited)
(DOLLAR AMOUNTS IN THOUSANDS EXCEPT PER-SHARE DATA)

For the three months ended     Year Ended
                                         March 31  December 31
                                         2004    2003    2003
Interest and dividend revenue
  Loans, including fees                 $2,209  $2,040  $8,453
  Government Agencies Securities           239     363   1,219
  Federal funds sold                        14      13      41
  Equity securities                          4       5      17
    Total interest and dividend revenue  2,466   2,421   9,730

Interest expense
  Deposits                                 613     714   2,704
  Borrowed funds                            15      13      88
    Total interest expense                 628     727   2,792

    Net interest income                  1,838   1,694   6,938

Provision for loan losses                    7       3      88
  Net interest income after
    Provision for loan losses            1,831   1,691   6,850

Noninterest revenue
  Service charges on deposit accounts      170     154     660
  Other noninterest revenue                 82      72     199
    Total noninterest revenue              252     226     859

Noninterest expenses
  Salaries and employee benefits           630     637   2,575
  Occupancy                                 61      51     211
  Furniture and equipment                   56      56     201
  Other operating                          279     268   1,129
    Total noninterest expenses           1,026   1,012   4,116

Income before income taxes               1,057     905   3,593
Income taxes                               398     333   1,333
Net income                              $  659  $  572 $ 2,260

Basic earnings per common share          $0.83   $0.71   $2.84



PEOPLES BANCORP, INC. AND SUBSIDIARY
CONSOLIDATED STATEMENTS OF CASH FLOWS (UNAUDITED)
                                   For the Three Months Ended
                                                  March 31
                                               2004      2003
CASH FLOWS FROM OPERATING ACTIVITIES
  Interest received                         $ 2,466   $ 2,435
  Fees and commissions                          252       178
  Cash paid to suppliers and employees         (556)     (643)
  Interest paid                                (652)     (742)
  Taxes paid                                   (482)     (348)
                                              1,028       880
CASH FLOWS FROM INVESTING ACTIVITIES
  Cash paid for premises, equipment
    and software                                (72)       (2)
  Loans made, net of principal collected     (6,622)     (736)
  Proceeds from maturities and calls of securities
    Available for sale                        3,001     5,001
    Held to maturity                              1         -
  Purchase of securities held to maturity    (1,990)        -
  Purchase of FHLB stock                          -       (25)
  Proceeds from sale of other real estate owned and
  Equipment                                       -        10
                                             (5,682)    4,248
CASH FLOWS FROM FINANCING ACTIVITIES
  Net increase (decrease) in
     Time deposits                            1,360     1,229
     Other deposits                          (1,990)     (756)
     Securities sold under repurchase
     Agreements                                (417)      906
  Advances under (repayment of) notes payable 2,000    (5,000)
  Repurchase of stock                             -      (200)
  Dividends paid                               (270)     (257)
                                                683    (4,078)
NET INCREASE (DECREASE) IN CASH              (3,971)    1,050
CASH AND EQUIVALENTS AT BEGINNING OF PERIOD  10,988     8,676
CASH AND EQUIVALENTS AT END OF PERIOD       $ 7,017   $ 9,726
RECONCILIATION OF NET INCOME TO NET CASH PROVIDED
  FROM OPERATING ACTIVITIES
  Net income                                $   659   $   572
  ADJUSTMENTS
    Depreciation and amortization                60        57
    Provision for loan losses                     7         3
    Security discount accretion,
    net of premium amortization                   5         7
    Decrease (increase) in accrued interest
      receivable and other assets               (63)      (45)
    Increase (decrease)
      Deferred origination fees and costs, net   (8)       (9)
      Accrued Interest payable and other
      Liabilities                               368       295
                                             $1,028      $880




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, 2004 are not necessarily indicative of the results
that may be expected for the year ending December 31, 2004.
For further information, refer to the financial statements and
footnotes included in the annual report as of December 31,
2003.


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, 2004 and 2003,
total comprehensive income, net of taxes, was $647,000 and
$524,000 respectively.  Comprehensive income is the sum of net
income and the change in the unrealized gain or loss on
securities available for sale, net of income taxes.


4.      COMMITMENTS

          For purposes of reporting unused commitments, the
following table represents unfunded obligations.


          Revolving home equity lines       $   2,752,628
          Commercial Real Estate            $   6,253,599
          Other unused commitments          $  19,543,697
          Commercial Letters of Credit      $   2,045,476


5.       EARNINGS PER SHARE

          Earnings per share are calculated based on the
weighted average shares outstanding of:

                                      2004       2003

          Quarter ended March 31     794,012    797,971




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 21.98% for the
quarter ended March 31, 2004 compared to 28.19% for the same
period last year.  Another source of liquidity is a secured
line of credit for $25,250,000 from the Federal Home Loan Bank
of which $5,000,000 has been advanced leaving $20,250,000
available, as well as lines of credit in the amount of
$8,000,000 from other correspondent banks.

          Tier one capital ratios of the Bank, based on
average assets for the three months ended March 31, 2004 and
2003 were 12.13% and 13.76%, 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, 2004, 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 85.12%.  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,
2004, was $659,000, or $.83 per share, compared to $572,000,
or $.71 per share, for the first three months of 2003.  Net
interest income increased approximately $144,000 with a
increase of approximately $26,000 in other noninterest
revenue. However those increases were offset by an increase of
approximately $4,000 in the provision for loan losses and
$14,000 in total noninterest expenses.  As a result income
taxes have increased approximately $65,000 to $398,000 from
$333,000 for the same time period.  The Bank has had growth
in total assets of $1,690,000 as of March 31, 2004 compared to
December 31,2003.

          The Bank's loan portfolio increased from $137.8
million at December 31, 2003 to $144.4 million at March 31,
2004.  Loan income has increased $169,000 or 8.28% from
$2,040,000 for the first three months of 2003 to $2,209,000
for the first three months of 2004.  The Bank's provision for
loan losses was $6,500 for the quarter ended March 31, 2004
compared to $3,000 for the quarter ended March 21, 2003.  The
allowance for loan losses was .83% of total loans at March 31,
2004.  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

                          Three months ended     Year ended
                            March 31,2004    December 31, 2003
Balance at beginning
          of period           $ 1,216,881        $ 1,159,910
Loan losses:
  Commercial                            0              9,812
  Mortgages                             0                  0
  Consumer                         19,110             26,934
            Total loan losses      19,110             36,746
Recoveries on loans previously charged off
  Commercial                            0                 90
  Mortgages                             0                  0
  Consumer                            600              5,727
            Total loan recoveries     600              5,817
Net loan losses                    18,510             30,929
Provision for loan losses charged
                     to expense     6,500             87,900
Balance at end of period      $ 1,204,871        $ 1,216,881

Allowance for loan losses to loans
           Outstanding              0.83%              0.88%


          Noninterest income increased $26,000 or 11.5% to
$252,000 for the quarter ended March 31. 2004 from $226,000
for the quarter ended March 31, 2003.  This is the result of
collecting approximately $13,800 in overdraft activity service
charges in 2004.  Management does not view the increased
overdraft activity as a problem since we have continued to
collect these overdrawn balances and the fees associated with
them.  Investment services income is up approximately $7,900
due to increased customer activity, most likely the result of
improved stock market returns.

          Noninterest expense increased $14,000 to $1,026,000
for the quarter ended March 31, 2004, from $1,012,000 for the
quarter ended March 31, 2003.  The increase was primarily
related to an increase in other insurance of $5,000, data
processing of $11,000 and occupancy expense of $10,000.
The increase to other insurances cost is the result of
increasing insurance coverage to include the Holding Company
and Terrorism insurance coverage.  Data processing costs have
increased due to increased charges from the Bank's outside
data processor.  The increase to occupancy expense is the
result of increased depreciation expense of $4,200 and taxes
on bank property of $1,270.  Other unusual expenses incurred
in 2004 include repairs to the Main office heating system
costing $3,000, repair work to the lock boxes and teller
vaults at our Galena office increased expenses $1,174,
consolidated cost of branch snow removal was $1,000 and new
ATM/terminal router updates cost $905.  However these
increases were offset by a reduction to salaries and employee
benefits of $7,000 due to reduced health care costs and $4,000
less in office supplies.

          The company's assets ended the first quarter of 2004
at $182.1 million, an increase of $1,690,000, or .99% from
$180.4 million at December 31, 2003.  This increase can be
attributed primarily to an increase in the Loans of $6.6
million, which was offset by $4.7 million decrease in
Federal Funds sold.

          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 a
number of factors that cannot be predicted with certainty and
thus fulfillment of managements expectations cannot be
assured.

          The Bank employed sixty-three full time equivalent
employees during the first quarter of 2004.  The Company
employs no staff 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 many
types of loan requests, including 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, automatic
transfers of funds, as well as discount brokerage services and
financial planning.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 $49,600, 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 Company adopted a policy of purchasing stock
          from existing stockholders.
          During the present quarter no 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 March 31, 2004, 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, 2004.








                     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 7, 2004___    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-QSB 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 18, 2004); 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 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 7, 2004___    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-QSB for the period ended March 31, 2004 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 7, 2004___    By: __/X/_THOMAS G. STEVENSON____
                              Thomas G. Stevenson
                              President,
                              Chief Executive Officer
                              and Chief Financial Officer