_______________________________________________________________________________ 
                                 UNITED STATES 
                      SECURITIES AND EXCHANGE COMMISSION 
                            Washington, D. C. 20549

                                   FORM 10-K 

(Mark One) 
[X] Annual Report Pursuant to Section 13 or 15(d) of the Securities Exchange Act
of 1934, For the Fiscal Year Ended December 31, 1997 
[ ] Transition Report Pursuant to Section 13 or 15(d) of the Securities Exchange
Act of 1934

Commission File Number Number 0-16839 

                           PEOPLES FIRST CORPORATION 
            (Exact name of registrant as specified in its charter)

          Kentucky                                               61-1023747 
(State or other jurisdiction of                               (I R S Employer 
 incorporation or organization)                             Identification No.)
100 South Fourth Street 
Paducah, Kentucky                                           42002-2200 
(Address of principal exective offices)                          (Zip Code) 

     Registrant's telephone number, including area code: (502) 441-1200 

          Securities Registered Pursuant to Section 12(g) of the Act: 
                         Common Stock, No Par Value 

Indicate by check mark whether the Registrant (1) has filed all reports
required to be filed by Section 13 of 15(d) of the Securities Exchange Act of
1934 during the preceding 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 [ ] 

Indicate by check mark if disclosure of delinquent filers pursuant to Item 405 
of Regulation S-K is not contained herein, and will not be contained, to the 
best of Registrant's knowledge, in definitive proxy or information statements 
incorporated by reference in Part III of this Form 10-K or any amendment to
this Form 10-K.  [ ] 

The aggregate market value of the voting stock held by non-affiliates of the 
Registrant as of February 16, 1998: Common stock, no par value - $313,847,000.

The number of shares outstanding of the Registrant's only class of stock as of
February 16, 1998: Common stock, no par value - 10,024,311 shares outstanding.

               Documents Incorporated by Reference - None 



_____________________________________________________________________________1











INDEX 
                                                                           Page
_______________________________________________________________________________ 

PART I. 

Item 1.  Business                                                             3
Item 2.  Properties                                                          15
Item 3.  Legal Proceedings                                                   15
Item 4.  Submission of Matters to a Vote of Securities Holders               15

PART II. 

Item 5.  Market for the Registrant's Common Stock and Related 
           Shareholder Matters                                               16
Item 6.  Selected Financial Data                                             17
Item 7.  Management's Discussion and Analysis of Financial 
           Condition and Results of Operations                               19
Item 8.  Financial Statements and Supplementary Data                         31
Item 9.  Changes in and Disagreements with Accountants on 
           Accounting and Financial Disclosure                               62

PART III. 

Item 10.  Directors and Executive Officers of the Registrant                 63
Item 11.  Executive Compensation                                             67
Item 12.  Security Ownership of Certain Beneficial Owners 
            and Management                                                   70
Item 13.  Certain Relationships and Related Transactions                     71

PART IV. 

Item 14.  Exhibits, Financial Statement Schedules and Reports 
            on Form 8-K                                                      71

          Signatures                                                         73













                                                                              2






PART I 

Item 1.  Business 

Peoples First Corporation (the "Company") is a multi-bank and unitary savings
and loan holding company registered with the Board of Governors of the Federal
Reserve System ("Federal Reserve Board") pursuant to Section 5(a) of the Bank
Holding Company Act of 1956, as amended.  Its primary business is banking.  In
recent years, the Company has been one of the ten largest independent financial
institutions headquartered in Kentucky.  The Company conducts a complete range
of commercial and personal banking activities through two wholly owned
subsidiaries: The Peoples First National Bank & Trust Company of Paducah
("Peoples Bank") in the Kentucky counties of McCracken, Marshall, Ballard,
Livingston, Calloway and Graves Counties, and in the Tennessee county of
Montgomery; and, Peoples First, F.S.B. of Central City (Saving Bank) in
Muhlenberg, Ohio, McLean and Butler Counties.  As a part of the Company's
banking services, it subsidiaries are engaged in mortgage orgination and
servicing, investment management and trust services, the issuance of credit
and debit cards, the sale of loans, full-service brokerage services and the
sale of bank-eligible insurance products.  Its primary market is western
Kentucky and northwestern Tennessee and Peoples First Corporation's principal
executive offices are located at 100 South Fourth Street, Paducah, Kentucky
42002-2200. 

The Company is a Kentucky Corporation incorporated on March 1, 1983.  The
Company became a bank holding company when it acquired Peoples Bank in 1983.
The Company acquired (and subsequently merged into Peoples Bank during 1994)
First Liberty Bank in 1985, First National Bank of LaCenter in 1987, Salem Bank,
Inc. in 1989, Bank of Murray in 1992 and Liberty Bank and Trust in 1994.  The
Savings Bank was acquired in 1994.  During 1996 the Company acquired all of the
outstanding shares of Guaranty FSB (and subsequently merged into Peoples Bank
during 1997) in exchange for 315,002 shares of Peoples First Corporation common
stock.  Guaranty FSB's had three locations immediately southeast of the market
area served by Peoples Bank. 

Dividends from Peoples Bank and the Savings Bank (collectively the "banks") are
the principal source of cash flow for the Company.  Legal limitations are
imposed on the amount of dividends that may be paid by the banks.  Although
the Company may engage in other activities, subject to rules and regulations of
the Federal Reserve Board and Kentucky Department of Financial Institutions, it
is currently expected that the banks will remain the principal source of
operating revenues. 

Peoples Bank, organized in 1926, provides a full range of banking services to
the Western Kentucky region through its main office in Paducah, Kentucky and
twelve full service branch offices, three limited service branch offices and one
business operations office.  Commercial lending services provided to medium-size
and small businesses, real estate mortgage lending and individual consumer
lending services are the primary sources of operating revenues.  Peoples Bank
had total deposits of $1,030.7 million at December 31, 1997 and is the first or
second largest commercial banking operation in each of the six Kentucky counties
it operates.  At December 31, 1997, Peoples Bank had 483 full-time equivalent
employees. 
                                                                              3






The Savings Bank, organized in 1934, provides a broad array of banking services
to the Western Kentucky region through its main office in Central City, Kentucky
and five branch offices.  Residential real estate mortgage lending is the
primary source of operating income.  First Kentucky FSB had total deposits of
$146.9 million at December 31, 1997 and is largest financial institution
headquartered in their immediate West-Central Kentucky market area.  At December
31, 1997, the Savings Bank had 70 full-time equivalent employees. 

Management considers employee relations to be good with all of the bank
employees, none of which are covered by a collective bargining agreement. 

Competition 

The banks actively compete on local and regional levels with other commercial
banks and financial institutions for all types of deposits, loans, trust
accounts and the provision of financial and other services.  With respect to
certain banking services, the banks compete with insurance companies, savings
and loan associations, credit unions and other financial institutions.  Many of
the banks' competitors are not commercial banks or savings and loan
associations.  For example, the banks compete for funds with  money market
mutual funds, brokerage houses, and governmental and private issuers of money
market instruments.  The banks also compete for loans with other financial
institutions and private concerns providing financial services.  These include
finance companies, credit unions, certain governmental agencies and merchants
who extend their own credit selling to consumers and other customers.  Many of
the financial institutions and other interests with which the banks compete
have capital resources substantially in excess of the capital and resources of
the banks. 

Supervision and Regulation

The Registrant is a bank holding company within the meaning of the Bank Holding
Company Act.  As such, it is registered with the Federal Reserve Board (FRB) and
files reports with and is subject to examination by that body. 

Peoples Bank, chartered under the National Bank Act, is subject to the supervi-
sion of and is regularly examined by the Comptroller of the Currency of the
United States.  By law, Peoples Bank is a member of the Federal Reserve System
and insured members of the Bank Insurance Fund of the Federal Deposit Insurance
Corporation (FDIC).  As such, it is subject to regulation by these federal
agencies.  The Savings Bank is a federally chartered savings association,
subject to the supervision of and are regularly examined by Office of Thrift
Supervision.  It is subject to certain reserve requirements of the FRB and are
insured members of the Savings Association Insurance Fund of the FDIC, and, as
such, are subject to regulation and examined by these federal agencies. 

The Financial Institutions Reform, Recovery and Enforcement Act of 1989 (FIRREA)
was principally designed to deal with the financial crisis involving the thrift
industry and the Federal Savings and Loan Insurance Corporation.  FIRREA
contains many provisions which affect banks and bank holding companies.  FIRREA
included substantial increases in the enforcement powers available to
regulators.  The FDIC's enforcement powers were expanded.  Several civil and

                                                                              4






criminal penalties were added which address misconduct and knowingly or
recklessly causing a substantial loss to an insured institution.  FIERRA
expanded the power of bank holding companies by permitting them to acquire any
savings assocation, including healthy as well as troubled institutions. 

The Federal Deposit Insurance Corporation Improvement Act of 1991 (FDICIA)
contained many provisions affecting the banking industry.  FDICIA included
provisions, among others to: 1) reform the deposit insurance system, 2)
establish a format for closer monitoring of financial institutions and to enable
prompt corrective action by banking regulators when a financial institution
begins to experience difficulty, 3) establish five capital levels for financial
institutions that would impose more scrutiny and restriction on less capitalized
insstitutions, 4) require regulators to set operational and managerial standards
for all insured institutions, including limits on excessive compensation to
executive officers, directors and principal shareholders, and establish
standards for loans secured by real estate, 5) adopt certain accounting reforms
and require annual on-site examinations of federally insured institutions and
the ability to require independent audits, 6) restrict state-chartered banks
from engaging in activities not permitted for national banks unless they are
adequately capitalized and have FDIC approval.  Further FDCIA permited the FDIC
to make special assessments on insured depository institutions, in amounts
determined by the FDIC to be necessary to give it adequate assessment income to
repay amounts borrowed from the U.S. Treasury Department and other sources or
for any other purpose the FDIC deems necessary. 

Future legislative actions, possibly including restructuring and modernization
of financial institution regulation, could have dramatic effect on the cost of
doing business and competitiveness.  The terms or timing of future legislation
or regulatory actions that may be adopted cannot be predicted, accordingly, the
potential effect on the Company is unknown. 

Changes in the national economy and in the money markets, together with the
effects of actions by monetary and fiscal authorities, make it exceedingly
difficult to predict with any reasonable accuracy the possible future changes in
interest rates and their effect on deposit levels, loan demand and the business
and earnings of the Company and its subsidiaries. 














                                                      


                                                                              5






Statistical Disclosures

I.  Distribution of Assets, Liabilities and Stockholders' Equity; Interest Rates
and Interest Differential 

A.  AVERAGE BALANCE SHEETS                       For the Year Ended December 31,
    (in thousands)                               1997         1996         1995
_______________________________________________________________________________

INTEREST-EARNING ASSETS 
Loans (1)                                  $1,063,185     $960,726     $865,707
Taxable securities                            252,993      244,917      251,107
Non-taxable securities                         61,416       61,734       64,835
Short-term investments                          2,644        2,512        2,877
                                            ---------    ---------    ---------
                                            1,380,238    1,269,889    1,184,526
NONINTEREST-EARNING ASSETS 
Cash and due from banks                        30,324       35,586       33,515
Allowance for loan losses                     (14,965)     (14,066)     (12,691)
Other assets                                   47,844       44,221       40,582
                                            ---------    ---------    ---------
                                           $1,443,441   $1,335,630   $1,245,932
                                            =========    =========    =========

INTEREST-BEARING LIABILITIES 
Transaction accounts                         $352,563     $310,666     $253,689
Savings deposits                               79,864       84,684       87,618
Time deposits                                 618,628      588,289      598,514
Short-term borrowings                         100,285      112,459       86,400
Long-term borrowings                           44,524        9,785        7,946
Other liabilities                               1,060        1,382        1,292
                                            ---------    ---------    ---------
                                            1,196,924    1,107,265    1,035,459

NONINTEREST-BEARING LIABILITIES 
Demand deposits                                84,176       82,269       82,752
Other liabilities                              13,330       11,523        9,176

STOCKHOLDERS' EQUITY                          149,011      134,573      118,545
                                            ---------    ---------    ---------
                                           $1,443,441   $1,335,630   $1,245,932
                                            =========    =========    =========

(1) Nonperforming loans are included in 
    average loans 








                                                                              6






B. ANALYSIS OF NET INTEREST EARNINGS             For the Year Ended December 31,
   (in thousands)                                1997         1996         1995
_______________________________________________________________________________

INTEREST INCOME 
Loans (TE) (2)                                $97,017      $87,950      $78,573
Taxable securities                             16,733       15,842       16,082
Non-taxable securities (TE) (2)                 5,364        5,704        5,847
Short-term investments                            133          122          160
                                              -------      -------      -------
                                              119,247      109,618      100,662

INTEREST EXPENSE 
Transaction accounts                           14,122       11,606        9,101
Saving deposits                                 2,309        2,422        2,460
Time deposits                                  35,030       32,874       34,047
Short-term borrowings                           5,452        5,958        4,939
Long-term borrowings                            2,588          608          515
Other liabilities                                  80           91           90
                                              -------      -------      -------
                                               59,581       53,559       51,152
                                              -------      -------      -------
NET INTEREST INCOME (TE) (2)                   59,666       56,059       49,510
TE Basis Adjustment                            (1,775)      (1,945)      (1,916)
                                              -------      -------      -------
NET INTEREST EARNINGS                         $57,891      $54,114      $47,594
                                              =======      =======      =======

(2) Tax equivalent (TE) interest income is based 
    upon a Federal income tax rate of 35%. 























                                                                              7






B. AVERAGE YIELDS AND RATES PAID                 For the Year Ended December 31,
                                                 1997         1996         1995
_______________________________________________________________________________

AVERAGE YIELDS FOR INTEREST-EARNING ASSETS 
Loans (TE) (1) (2)                               9.13%        9.15%        9.08%
Taxable securities                               6.61%        6.47%        6.40%
Non-taxable securities (TE) (2)                  8.73%        9.24%        9.02%
Short-term investments                           5.03%        4.86%        5.56%
All interest-earning assets                      8.64%        8.63%        8.50%

AVERAGE RATES FOR INTEREST-BEARING LIABILITIES 
Transaction accounts                             4.01%        3.74%        3.59%
Saving deposits                                  2.89%        2.86%        2.81%
Time deposits                                    5.66%        5.59%        5.69%
Short-term borrowings                            5.44%        5.30%        5.72%
Long-term borrowings                             5.81%        6.21%        6.48%
Other liabilities                                7.55%        6.58%        6.97%
All interest-bearing liabilities                 4.98%        4.84%        4.94%
                                                 ----         ----         ----
NET INTEREST-RATE SPREAD (TE) (2)                3.66%        3.79%        3.56%
                                                 ====         ====         ====

NET YIELD ON INTEREST-EARNING ASSETS             4.32%        4.41%        4.18%
                                                 ====         ====         ====

(1) Nonperforming loans are included in 
    average loans 
(2) Tax equivalent (TE) interest income is based 
    upon a Federal income tax rate of 35%. 























                                                                              8






C. FOR THE LAST TWO FISCAL YEARS 

CHANGES ATTRIBUTABLE TO VOLUME AND RATE        Change       Due to       Due to
(in thousands)                              1997/1996       Volume     Rate (3)
_______________________________________________________________________________

INTEREST INCOME 
Loans (1) (2)                                  $9,067       $9,380        ($313)
Taxable securities                                891          522          369
Non-taxable securities (TE) (2)                  (340)         (29)        (311)
Short-term investments                             11            6            5
                                               ------
                                                9,629        9,525          104
INTEREST EXPENSE 
Transaction accounts                            2,516        1,565          951
Saving deposits                                  (113)        (138)          25
Time deposits                                   2,156        1,695          461
Short-term borrowings                            (506)        (645)         139
Long-term borrowings                            1,980        2,159         (179)
Other liabilities                                 (11)         (21)          10
                                               ------
                                                6,022        4,337        1,685
                                               ------       ------       ------
NET INTEREST INCOME (TE) (2)                   $3,607       $5,188      ($1,581)
                                               ======       ======       ======

(1) Nonperforming loans are included in average loans. 
(2) Tax equivalent (TE) net interest income is based upon a Federal income 
    tax rate of 35%. 
(3) Changes due to both rate and volume are included in due to rate. 























                                                                              9






CHANGES ATTRIBUTABLE TO VOLUME AND RATE        Change       Due to       Due to
(in thousands)                              1996/1995       Volume     Rate (3)
_______________________________________________________________________________

INTEREST INCOME 
Loans (TE) (1)                                 $9,377       $8,624         $753
Taxable securities                               (240)        (396)         156
Non-taxable securities (TE) (2)                  (143)        (280)         137
Short-term investments                            (38)         (20)         (18)
                                               ------
                                                8,956        7,254        1,702

INTEREST EXPENSE 
Transaction accounts                            2,505        2,044          461
Saving deposits                                   (38)         (82)          44
Time deposits                                  (1,173)        (582)        (591)
Short-term borrowings                           1,019        1,490         (471)
Long-term borrowings                               93          119          (26)
Other liabilities                                   1            6           (5)
                                               ------
                                                2,407        3,547       (1,140)
                                               ------       ------       ------
NET INTEREST INCOME (TE) (2)                   $6,549       $3,707       $2,842
                                               ======       ======       ======

(1) Nonperforming loans are included in average loans. 
(2) Tax equivalent (TE) net interest income is based upon a Federal income 
    tax rate of 35%. 
(3) Changes due to both rate and volume are included in due to rate. 
























                                                                             10






II.  Security Portfolios 

A.  Footnote 4 to the Consolidated Financial Statements included herein on page
43 presents the book value as of the end of 1997 and 1996 of securities by type
of security. 

B.  Footnote 4 to the Consolidated Financial Statements included herein on page 
43 presents the amortized cost, estimated market value and the weighted average
yield of securities at December 31, 1997, by contractual maturity range. 

C.  As of December 31, 1997, the Company owned no securities (other than U. S. 
Government and U. S. Government agencies and corporations) issued by one issuer 
for which the book value exceeded ten percent of stockholders' equity. 

III.  Loan Portfolio 

A.  The table of Types of Loans in Management's Discussion and Analysis of 
Financial Condition and Results of Operations (MDA) included herein on page 20
presents the amount of all loans in various categories as of the end of 1997 
and 1996. 

B. The following table presents the maturities in the loan portfolio, excluding
commercial paper, real estate mortgage, installment, consumer revolving credit 
and other loans at December 31, 1997: 

Loan Portfolio Maturities         1 year       1 to 5         Over
December 31, 1997                or less        years      5 years        Total
_______________________________________________________________________________
(in thousands) 

Commercial, financial 
  and agricultural               $81,459      $28,485       $9,980     $119,924
Real estate construction          18,284        3,744        2,129       24,157
                                 -------      -------      -------      -------
                                 $99,743      $32,229      $12,109     $144,081
                                 =======      =======      =======      =======

The amounts of these loans due after one year which have predetermined rates 
and adjustable rates are $17.9 million and $26.4 million, respectively. 

C. Risk Elements 

1.  The table of Nonperforming Assets in MDA included herein on page 22 states 
the amount of nonaccrual, past due and restructured loans.  The following table 
states the gross interest income that would have been recorded for the years 
ended December 31, 1993 through 1997, if the nonaccrual and renegotiated loans 
had been current in accordance with their original terms, and the amount of 
interest income that was included in net income for each year: 





                                                                             11






<TABLE>
<CAPTION>
<S>                         <C>          <C>          <C>          <C>          <C>

Interest Income on Nonaccrual 
  and Restructured Loans 
Year ended December 31,             1997         1996         1995         1994         1993
____________________________________________________________________________________________
(in thousands) 

Contractual interest                $749         $504         $421         $209         $407
Interest recognized                  441          343          351          192          279

</TABLE>
2.  Potential Problem Loans 
 
Internal credit review procedures are designed to alert management of possible
credit problems which would create serious doubts as to the future ability of
borrowers to comply with loan repayment terms.  At December 31, 1997, loans
with a total principal balance of $26.5 million had been identified which may
become nonperforming in the future, compared to $26.4 million at December 31,
1996.  Potential problem loans are not included in nonperforming assets since
the borrowers currently meet all applicable loan agreement terms.  The
identified potential problem loan totals consist of many different loans and are
generally loans for which the collateral appears to be sufficient but that have
potential financial weakness evidenced by internal credit review's analysis of
historical financial information.  At December 31, 1997, a total of $7.4 million
of potential problem loans were to three borrowers. 

3.  Foreign Outstandings 

There were no foreign outstandings at anytime during the last three years. 

4.  Loan Concentrations 

As of December 31, 1997, there was no concentration of loans exceeding 10% of 
total loans which are not otherwise disclosed in the Types of Loans table 
pursuant to III. A.  There were no amounts loaned in excess of 10% of total 
loans to a multiple of borrowers engaged in similar activities which would 
cause them to be similarly impacted by economic or other conditions.  Most 
loans are originated in the immediate market area of the banks. 

D. Other Interest Bearing Assets 

The Company has no other interest earning assets that would be required to 
be disclosed under Item III. C.1. or 2. if such assets were loans. 











                                                                             12


IV.  SUMMARY OF LOAN LOSS EXPERIENCE 

A.  The following table presents an analysis of loss experience and the allow- 
ance for loan losses for the years ended December 31, 1997, 1996, 1995, 1994, 
and 1993: 

<TABLE>
<CAPTION>
<S>                         <C>          <C>          <C>          <C>          <C>
Analysis of the Allowance 
  for Loan Losses 
Year ended December 31,             1997         1996         1995         1994         1993
_______________________________________________________________________________ _____________
(in thousands) 

Balance at beginning of 
 year                            $14,795      $13,371      $12,188      $10,715       $8,606
Allowance associated with 
 loans acquired                       --          481           --           --           --
Provision charged to 
 expense                           5,041        2,664        2,167        1,723        2,541
Loan charge-offs 
  Commercial, financial 
   and agricultural                 (463)        (467)        (450)        (248)        (463)
  Real estate mortgage              (848)        (401)        (225)         (81)        (240)
  Installment loans               (1,984)      (1,273)        (540)        (279)        (317)
  Consumer revolving 
   credit                           (447)        (383)         (92)         (78)         (24)
                                  ------       ------       ------       ------       ------
                                  (3,742)      (2,524)      (1,307)        (686)      (1,044)

Loan charge-off recoveries 
  Commercial, financial 
   and agricultural                  135          556          133          339          376
  Real estate mortgage                34           59           63            9          110
  Installment loans                  133          141          117           76          122
  Consumer revolving
   credit                             46           47           10           12            4
                                  ------       ------       ------       ------       ------
                                     348          803          323          436          612
                                  ------       ------       ------       ------       ------
Net loan charge-offs              (3,394)      (1,721)        (984)        (250)        (432)
                                  ------       ------       ------       ------       ------
Balance at end of year           $16,442      $14,795      $13,371      $12,188      $10,715
                                  ======       ======       ======       ======       ======


Year end balance of loans     $1,101,707   $1,036,429     $914,497     $805,947     $704,037
Average loans outstanding      1,063,185      960,726      865,707      755,314      660,345
Allowance / year end loans          1.49%        1.42%        1.46%        1.51%        1.52%
Provision / net chargeoffs        148.53%      154.79%      220.22%      689.20%      588.19%
Nonperforming assets              13,067       12,187        6,806        6,679        6,591
Potential problem loans           26,488       26,362       14,300       14,800       22,400

</TABLE>

                                                                             13



B. The following tables present a breakdown of the allowance for loan losses 
at December 31, 1997, 1996, 1995, 1994 and 1993: 

<TABLE>
<CAPTION>
<S>                         <C>          <C>          <C>          <C>          <C>

Allocation of the Allowance 
  for Loan Losses 
December 31,                        1997         1996         1995         1994         1993
____________________________________________________________________________________________
(in thousands) 

Commercial, financial 
 and agricultural                 $4,000       $3,107       $2,951       $3,134       $2,973
Real estate 
  Construction                       150          150           97           97           61
  Residential mortgage             2,000        1,612        1,598        1,496        1,285
  Commercial mortgage              3,498        4,100        3,905        4,050        3,626
Consumer loans                     6,200        5,526        4,581        3,215        2,598
Consumer revolving credit            594          300          239          196          172
                                  ------       ------       ------       ------       ------
                                 $16,442      $14,795      $13,371      $12,188      $10,715
                                  ======       ======       ======       ======       ======

Percent of Loans in Each 
 Category to Total Loans 
December 31,                        1997         1996         1995         1994         1993
____________________________________________________________________________________________

Commercial, financial 
 and agricultural                   10.9%        11.6%        12.5%        13.9%        16.9%
Real estate mortgage 
  Construction                       2.2%         2.9%         2.1%         2.4%         1.7%
  Residential mortgage              42.5%        40.7%        39.9%        39.5%        38.3%
  Commercial mortgage               17.1%        16.8%        17.3%        17.3%        18.1%
Consumer loans                      27.1%        27.9%        28.0%        26.6%        24.6%
Other                                0.2%         0.1%         0.2%         0.3%         0.4%
                                   -----        -----        -----        -----        -----
                                   100.0%       100.0%       100.0%       100.0%       100.0%
                                   =====        =====        =====        =====        =====
</TABLE>
V. DEPOSITS 

A.B.  Average Balances and Rates Paid by Deposit 

The Average Balance Sheets table and Average Yields and Rates Paid table in- 
cluded herein on pages 6 and 8 present the average amount of and the average
rate paid for the years ended December 31, 1997, 1996 and 1995. 

C. Foreign Deposits 

The Company had no foreign deposits during the past three years. 




                                                                             14


D.E.  Maturity Distribution of Time Deposits of $100,000 or More 

The following table states the amount of time certificates of deposit at 
December 31, 1997, of $100,000 or more by maturity: 

Maturity of $100,000 Time Deposits 
December 31, 1997 
_______________________________________________________________________________
(in thousands) 

Maturing 3 months or less                                               $15,878
Maturing over 3 months through 6 months                                  12,336
Maturing over 6 months through 12 months                                 33,043
Maturing over 12 months                                                  44,336
                                                                        -------
                                                                       $105,593
                                                                        =======

                                                 For the Year Ended December 31,
VI.  RETURN ON EQUITY AND ASSETS                 1997         1996         1995
_______________________________________________________________________________

1.  Return on average assets                     1.12%        1.29%        1.19%
2.  Return on average equity                    10.86%       12.75%       12.46%
3.  Dividend payout ratio                       50.62%       36.00%       31.17%
4.  Equity to assets ratio                      10.31%       10.08%        9.51%


VII.  SHORT-TERM BORROWINGS 

A.  Footnote 8 to the Consolidated Financial Statements included herein on page
49 presents for each category of short-term borrowings, the amounts outstanding
at the end of the reported periods, the weighted average interest rate, the
maximum amount of borrowings in each catergory at any month-end and the
approximate weighted interest rate. 

Item 2.  PROPERTIES 

The Company's investments in premises and equipment are comprised of properties
owned and leased by the banks.  Peoples Bank owns the building housing its main
offices, which contains 17,325 square feet of space and is located at 401
Kentucky Avenue.  Peoples Bank also owns its Service Center, located at 100
South Fourth Street, which contains 50,000 square feet of space and houses the
Company's executive offices.  Of the twenty-seven other banking offices of the
banks, twenty-four are owned and three are leased by their respective bank. 

Item 3.  LEGAL PROCEEDINGS - None 

Item 4.  SUBMISSION OF MATTERS TO A VOTE OF SECURITY HOLDERS - None 




                                                                             15






PART II 

Item 5.  MARKET FOR THE REGISTRANT'S COMMON STOCK AND RELATED SHAREHOLDER 
         MATTERS 

Market Information, Dividends 
The registrant's only class of common stock is traded on the National Associa- 
tion of Securities Dealers Automated Quotation System National Market System. 
Peoples First Corporation's common stock symbol is "PFKY".  Share and per share
information have been adjusted to give effect to 5% stock dividends declared
on January 17, 1996 and January 21, 1997.  The high and low stock prices and
the quarterly dividends declared on the Company's common stock for each quarter
of 1997 and 1996 are as follows: 

High and Low Stock Prices          First       Second        Third       Fourth
  Dividends Declared             quarter      quarter      quarter      quarter
_______________________________________________________________________________

High 1997                         $26.50       $29.25       $34.75       $39.50
Low 1997                           23.33        23.50        27.75        28.50
Cash dividends declared             0.19         0.19         0.22         0.22

High 1996                         $22.38       $22.62       $21.90       $24.29
Low 1996                           19.50        19.76        20.00        20.95
Cash dividends declared             0.14         0.15         0.15         0.19

Holders 
The approximate number of holders of registrant's only class of common stock as 
of February 16, 1998, was 3,250. 
  























                                                                             16






<TABLE>
<CAPTION>
<S>                         <C>          <C>          <C>          <C>          <C>

SELECTED FINANCIAL DATA 

December 31,                        1997         1996         1995         1994         1993
____________________________________________________________________________________________
(in thousands) 

Interest-Earning Assets 
Loans, net                    $1,087,405   $1,023,520     $901,126     $793,759     $693,322
Securities                       316,493      304,311      306,642      333,527      375,366
Short-term investments                 0            0            0            0        3,100
                               ---------    ---------    ---------    ---------    ---------
                               1,403,898    1,327,831    1,207,768    1,127,286    1,071,788
Cash and due from banks           46,820       43,285       37,524       39,333       42,591
Premises and equipment            20,310       19,376       18,226       16,980       16,698
Other assets                      29,969       27,272       24,078       26,957       25,429
                               ---------    ---------    ---------    ---------    ---------
                              $1,500,997   $1,417,764   $1,287,596   $1,210,556   $1,156,506
                               =========    =========    =========    =========    =========
Liabilities and Stockholders' Equity 
Interest-bearing deposits     $1,086,487   $1,029,877     $960,744     $910,598     $906,646
Noninterest-bearing deposits      90,354       85,376       86,360       87,985       86,250
Short-term borrowings            114,472      132,167       93,469       84,567       32,502
Long-term borrowings              43,104       14,013        7,757        9,536       16,555
Other liabilities                 11,853       11,782       11,094        7,607        8,182
                               ---------    ---------    ---------    ---------    ---------
                               1,346,270    1,273,215    1,159,424    1,100,293    1,050,135
Stockholders' equity             154,727      144,549      128,172      110,263      106,371
                               ---------    ---------    ---------    ---------    ---------
                              $1,500,997   $1,417,764   $1,287,596   $1,210,556   $1,156,506
                               =========    =========    =========    =========    =========

____________________________________________________________________________________________
</TABLE>
As more fully explained in Note 2 to the consolidated financial statements,
  additional banking organizations were acquired in 1996 and 1994. 



















                                                                             17

<TABLE>
<CAPTION>
<S>                         <C>          <C>          <C>          <C>          <C>

Year ended December 31,             1997         1996         1995         1994         1993
____________________________________________________________________________________________
(in thousands except per share data) 

Results of Operations 
Interest income                 $117,472     $107,673      $98,746      $84,404      $80,845
Interest expense                  59,581       53,559       51,152       38,855       37,997
                                 -------      -------      -------      -------      -------
Net interest income               57,891       54,114       47,594       45,549       42,848
Provision for loan losses          5,041        2,664        2,167        1,723        2,541
Net interest income after        -------      -------      -------      -------      -------
  provision for loan losses       52,850       51,450       45,427       43,826       40,307
Noninterest income                10,548        8,535        7,944        7,076        6,683
Noninterest expense               39,280       34,843       32,158       32,312       29,373
                                 -------      -------      -------      -------      -------
Income before tax expense         24,118       25,142       21,213       18,590       17,617
Income tax expense                 7,931        7,978        6,446        5,465        4,807
                                 -------      -------      -------      -------      -------
Net Income                       $16,187      $17,164      $14,767      $13,125      $12,810
                                 =======      =======      =======      =======      =======

Average shares outstanding 
  Basic                            9,998        9,787        9,600        9,943        9,854
  Assuming dilution               10,188        9,956        9,804        9,730        9,705
Earnings per common share 
  Basic                            $1.62        $1.75        $1.54        $1.35        $1.32
  Assuming dilution                 1.59         1.72         1.51         1.32         1.30
Cash dividends per common 
  share                             0.82         0.63         0.48         0.39         0.34

____________________________________________________________________________________________
</TABLE>
Shares outstanding and per share amounts have been adjusted for a two-for-one 
  stock split on January 4, 1994 and 5% stock dividends on April 19, 1995, 
  January 17, 1996 and January 21, 1997. 

As more fully explained in Note 2 to the consolidated financial statements,
  additional banking organizations were acquired in 1996 and 1994. 
















                                                                             18

Item 7.  Management's Discussion and Analysis of Financial Condition and 
         Results of Operations 

Management's discussion and analysis includes forward-looking statements.  Many
factors affect Peoples First Corporation's (Company) financial position and
profitability, including changes in economic conditions, the volatility of
interest rates, political events and competition from other providers of
financial services.  Because these factors are unpredictable and beyond the
Company's control, earnings may fluctuate from period to period.  The purpose of
this discussion and analysis is to provide annual report readers with
information relevant to understanding and assessing the financial condition and
results of operations of the Company. 

Headquartered in Paducah, Kentucky, the Company is a bank and unitary savings
and loan holding company registered with the Federal Reserve Board.  The
Company's market area is primarily western Kentucky and the contiguous
interstate areas.  This discussion should be read in conjunction with the
consolidated financial statements and accompanying notes. 

The Company's one commercial banking subsidiary and one savings bank subsidiary
operate principally in a single business segment offering general commercial and
savings bank services through 28 banking offices.  Commercial banking services,
mortgage banking and consumer financing are all activities the Company considers
to be their one business segment. 

EARNING ASSETS 
Average earning assets of the Company for 1997, increased 8.7%, or $110.3
million to $1,380.2 million from $1,269.9 million for 1996.  This compares to
growth of average earning assets of 7.2% and 6.3%, for 1996 and 1995,
respectively.  The Company maintains a consistently favorable ratio of average
earning assets to average total assets.  The ratio was 95.6% and 95.1%, for 1997
and 1996, respectively. 

The Company's principal business is making real estate, consumer and commercial
loans.  As such, loans are the Company's primary earning assets and loans are an
increasing part of total earning assets.  Average loans for 1997 increased
10.7%, or $102.5 million, to $1,063.1 million, while average loan growth for
1996 and 1995 was 11.0% and 14.6%, respectively. 

Table 1 
Average Earning Assets 
Year ended December 31,                          1997         1996         1995
_______________________________________________________________________________
(dollars in thousands) 

Total average earning assets               $1,380,238   $1,269,889   $1,184,526
Percent of average earning assets 
  Average loans                                  77.0%        75.7%        73.1%
  Average securities                             22.8         24.1         26.7
  Average other earning assets                    0.2          0.2          0.2



                                                                             19






The Company primarily directs lending activities to its regional market from
which deposits are drawn.  Management has focused on secured lending and the
growth of real estate mortgage and consumer loans during the last three years. 

<TABLE>
<CAPTION>
<S>                         <C>          <C>          <C>          <C>          <C>

Table 2 
Types of Loans 
December 31,                        1997         1996         1995         1994         1993
____________________________________________________________________________________________
(in thousands) 

Commercial, financial 
  and agricultural              $119,924     $120,283     $113,929     $111,929     $118,906
Real estate 
  Construction                    24,157       29,933       19,386       19,421       12,255
  Residential mortgage           468,330      421,129      364,607      318,551      269,265
  Commercial mortgage            188,502      174,576      158,429      139,629      127,666
Consumer, net                    298,724      289,653      255,975      214,309      173,191
Other                              2,070          855        1,463        1,952        2,250
                               ---------    ---------    ---------    ---------    ---------
                               1,101,707    1,036,429      913,789      805,791      703,533
Allowance for loan losses        (16,442)     (14,795)     (13,371)     (12,188)     (10,715)
                               ---------    ---------    ---------    ---------    ---------
                              $1,085,265   $1,021,634     $900,418     $793,603     $692,818
                               =========    =========    =========    =========    =========
</TABLE>
The Company maintains a portfolio of securities held for sale as an available
source of funding for loan growth.  In prior years, reductions in the investment
portfolios were used to fund loan growth.  Beginning in 1997, in order to
further leverage stockholders' equity without creating excessive interest-rate
risk, management reduced the amount of loan funding derived from security
maturities.  Average securities increased $7.8 million during 1997, following
decreases of $9.3 million during 1996 and $39.0 million during 1995.  U. S.
treasury and agency obligations represent approximately 75.0% of the securities
portfolios at December 31, 1997. 

At December 31, 1997, mortgage-backed securities which included Real Estate
Mortgage Investment Conduit (REMIC) and CMO instruments were approximately 52.6%
of the securities portfolios, compared to approximately 53.5% at December 31,
1996.  The REMIC issues are 100% U.  S. agencies issues.  The CMO issues are
marketable, collateralized mortgage obligations backed by agency-pooled
collateral or whole-loan collateral.  All nonagency issues held are currently
rated AA or AAA by either Standard & Poors or Moody's.  At December 31, 1997,
approximately 15.0% of the mortgage-backed securities are floating-rate issues,
the majority being indexed to the Constant Maturity Treasury index.
Management's normal practice is to purchase securities at or near par value to
reduce risk of premium write-offs resulting from unexpected prepayments. 

At December 31, 1997, the Company did not have any structured notes (as
currently defined by regulatory agencies) in the securities portfolios since
management believes the uncertainty of cash flows from these securities, which
are driven by interest-rate movements, could expose the Company to greater
market risk than traditional securities. 

                                                                             20


FUNDING 
An important and stable source of funding is core deposits, considered by
management to include demand deposits, interest-bearing transaction accounts,
saving deposits and time deposits under $100,000.  Average core deposits for
1997 increased 6.4%, or $62.1 million to $1,029.4 million from $967.3 million
for 1996.  Excluding the 1997 branch purchase and the 1996 savings bank
acquisiton, the 1997 increase was 2.7%, or $26.1 million, compared to 3.8%, or
$37.2 million for 1996.  Local markets for deposits are competitive.  Core
deposits are a decreasing portion of average interest-bearing liabilities.  The
core deposit base is supplemented with brokered deposits, short-term and
long-term borrowings to fully fund loan growth.  Average brokered deposits
amounted to $13.9 million, $22.8 million and $24.7 million for the years ended
December 31, 1997, 1996 and 1995, respectively.  Average short-term and
long-term borrowings were $144.8 million for 1997, up from $122.2 million for
1996 and $94.3 million for 1995. 

Management plans to continue to increase reliance on non-core funding.  The
Company's subsidiary banks have obtained various short-term and long-term
advances from the Federal Home Loan Bank (FHLB) under Blanket Agreements for
Advances and Security Agreements (Agreements).  The Agreements entitle the banks
to borrow additional funds from the FHLB to fund mortgage loan programs and
satisfy other funding needs.  Additional funding totaling approximately $182.8
million is available at December 31, 1997 from undrawn federal funds purchased,
lines-of-credit for U.S. treasury notes and FHLB advances. 

Table 3 
Average Interest-bearing Liabilities 
Year ended December 31,                          1997         1996         1995
_______________________________________________________________________________
(dollars in thousands) 

Total average interest-bearing 
 liabilities                               $1,196,924   $1,107,265   $1,035,459
Percent of average total interest- 
 bearing liabilities 
  Interest-bearing core deposits                 78.9%        80.5%        81.4%
  CDs of $100,000 or more                         7.7          6.2          7.0
  Brokered deposits                               1.2          2.1          2.4
  Average short-term borrowings                   8.4         10.2          8.3
  Average long-term borrowings                    3.7          0.9          0.8
  Other                                           0.1          0.1          0.1


NONPERFORMING ASSETS AND RISK ELEMENTS 
The Company's loan underwriting guidelines, credit review procedures and
policies are designed to protect the Company from avoidable credit losses.
Some losses although inevitably occur.  The Company's process for monitoring
loan quality includes detailed, monthly analyses of delinquencies, nonperforming
assets and potential problem loans.  Management extensively monitors credit
policies, including policies related to appraisals, assessment of the financial
condition of borrowers, restrictions on out-of-area lending and avoidance of
loan concentrations. 

                                                                             21






The amount of nonperforming assets at December 31, 1997 remains at managable
levels.  Diversification within the loan portfolio is an important means of
reducing inherent lending risks.  At December 31, 1997, the Company had no
concentrations of ten percent or more of total loans in any single industry
nor geographical area outside the Paducah, Kentucky, western Kentucky regions,
the immediate market area of the banks. 

Nonperforming assets, including nonaccrual, 90-day past due and restructured
loans and foreclosed properties, totaled $13.1 million at December 31, 1997,
compared to $12.2 million and $6.8 million at December 31, 1996 and 1995,
respectively.  Nonperforming assets as a percentage of total loans and other
real estate increased to 1.18% at December 31, 1997 compared to 1.17% and 0.74%
at December 31, 1996 and 1995, respectively.  The 1997 nonaccrual loan balance
is comprised of twelve residential rental and commercial loans with outstanding
balances between $100,000 and $500,000, and numerous consumer loans with an
average balance of $22,000.  The 1996 increase in nonperforming assets is
principally due to one $3.0 million loan that was past due 90 days, one $1.0
million nonaccrual loan and numerous small consumer loans.  Management was
prepared for the increased level of consumer chargeoffs and nonperforming loans
and believes that the level will remain relatively high compared to prior
periods due to increased outstandings and to the cyclical nature of consumer
credit.  There are generally good economic conditions in the market area and
management believes the Company's comprehensive loan administration and workout
procedures are adequate to manage the credit risks. 

The Company discontinues the accrual of interest on loans which become ninety
days past due as to principal or interest, unless the loans are adequately
secured and in the process of collection.  Other real estate owned is carried at
the lower of cost or fair value.  A loan is classified as a renegotiated loan
when the interest rate is materially reduced or the term is extended beyond the
original maturity date because of the inability of the borrower to service the
debt under the original terms. 

<TABLE>
<CAPTION>
<S>                         <C>          <C>          <C>          <C>          <C>

Table 4 
Nonperforming Assets 
December 31,                        1997         1996         1995         1994         1993
____________________________________________________________________________________________
(in thousands) 

Nonaccrual loans                  $5,848       $4,680       $1,817         $531         $835
Loans past due 90 days             4,451        4,710        1,471        1,838          503
Renegotiated loans                 2,532        2,707        2,874        2,741        2,995
Other real estate owned              236           90          644        1,569        2,258
                                  ------       ------       ------       ------       ------
                                 $13,067      $12,187       $6,806       $6,679       $6,591
                                  ======       ======       ======       ======       ======
Nonperforming assets as a 
  percent of total loans 
  and other real estate             1.18%        1.17%        0.74%        0.83%        0.93%
Allowance for loan losses 
  coverage of nonperform- 
  ing assets                         126%         121%         196%         182%         163%

</TABLE>                                                                     22


Internal credit review procedures are designed to alert management of possible
credit problems which would create serious doubts as to the future ability of
borrowers to comply with loan repayment terms.  At December 31, 1997, loans with
a total principal balance of $26.5 million have been identified that may become
nonperforming in the future, compared to $26.4 million at December 31, 1996 and
$12.8 million at December 31, 1995.  The 1996 increase was due to two commercial
loan relationships.  Management works closely with these borrowers in their
efforts to resolve potential cash flow problems.  Potential problem loans are
not included in nonperforming assets since the borrowers currently meet all
applicable loan agreement terms. 


CAPITAL RESOURCES AND DIVIDENDS 
The board of directors develops and reviews the capital goals and policies of
the consolidated entity and of the banks.  The Company's capital policies are
designed to retain sufficient amounts for healthy financial ratios, considering
future planned asset growth and to leverage stockholders' equity to a desirable
degree.  The Company's banks were "well capitalized" based on the regulatory
defined minimums of a Tier I leverage ratio of 5%, a Tier I capital ratio of 6%
and a total capital ratio of 10%.

Stockholders' equity was 10.3% of assets at December 31, 1997, an increase from
10.2% at December 31, 1996.  Unrealized gain or loss on securities held for
sale, net of applicable income taxes, is recorded directly to stockholders'
equity.  Exclusive of the $1.2 million unrealized net gain on securities held
for sale, net of applicable income taxes, stockholders' equity increased $8.9
million, or 6.2%, during 1997.  This compares to an increase, exclusive of the
$0.6 million unrealized net loss on securities held for sale, net of applicable
income taxes, of $17.0 million, or 13.4%, during 1996.  The capital base has
been strengthened through the issuance of common stock and earnings retention.
Common stock was issued through various shareholder and employee plans and for
the savings bank acquisition in 1996.  The earnings retention rate, which the
board of directors adjusts through declaration of cash dividends, was 49.4% for
1997, 64.0% for 1996 and 68.8% for 1995.  The board of directors raised the
quarterly dividend to $0.14 per share in the third quarter of 1995, to $0.15 per
share in the second quarter of 1996 to $0.19 per share in the fourth quarter of
1996 and to $0.22 per share in the third quarter of 1997.  Stock dividends of 5%
were declared in April 1995, in January 1996 and January 1997. 

Proceeds from the sale of common stock through shareholder and employee plans
amounted to $1.8 million in 1997, $1.7 million in 1996 and $2.2 million in 1995.
During 1996, the board of directors authorized the repurchase of up to 400,000
shares of the Company's common stock in the open market.  A total of 64,606 were
repurchased during 1997 for $0.9 million and 89,005 shares were repurchased
during 1996 for $1.9 million.  Following the fourth dividend in 1997, the
Company terminated the stockholders' dividend reinvestment plan and cancelled
the repurchase authorization pursuant to the merger agreement with Union
Planters Corporation dated November 17, 1997. 

Subsidiary bank dividends are the principal source of funds for the Company's
payment of dividends to its stockholders.  At December 31, 1997, approximately
$28.7 million in retained earnings of the banks was available for dividend 

                                                                             23






payments to the Company without regulatory approval or without reducing capital
of the respective banks below minimum standards.  Under the Federal Reserve
Board's risk-based capital guidelines for bank holding companies, the minimum
ratio of total capital to risk-adjusted assets (including certain off-balance
sheet items, such as standby letters of credit) is currently 8.0%.  The minimum
Tier I capital to risk-adjusted assets is 4.0%.  The Company's total capital and
Tier I capital to risk-adjusted assets ratio was 14.90% and 13.64%,
respectively, at December 31, 1997 compared with 14.33% and 13.15%, respectively
at December 31, 1996.  The Federal Reserve Board also requires bank holding
companies to comply with minimum leverage ratio guidelines.  The leverage ratio
is the ratio of Tier I capital to its total consolidated quarterly average
assets, less goodwill and certain other intangible assets.  The guidelines
require a minimum leverage ratio of 3.0% for companies that meet certain
specified criteria.  The Company's leverage ratio was 9.76% at December 31,
1997, compared with 9.55% at December 31, 1996. 

The Federal Deposit Insurance Act requires federal bank regulatory agencies to
take "prompt corrective action" with respect to FDIC-insured depository
institutions that do not meet minimum capital requirements.  As of December 31,
1997, all of the Company's insured depository institutions met the criteria to
be classified as "well capitalized".

RESULTS OF OPERATIONS 
Net income for the year ended December 31, 1997 was $16.2 million, down 5.8%
from $17.2 million for the year ended December 31, 1996, which was an increase
of 16.2% from $14.8 million for the year ended December 31, 1995.  Increased
revenue was offset by additional provision for loan losses and noninterest
expense.  Revenues improved due to loan growth and better fee income.  Overhead
increased due to costs associated with consolidation of some bank systems,
consulting fees and merger related expenses.  Basic earnings per common share
for the year ended December 31, 1997 was $1.62, down 7.4% from $1.75 for the
year ended December 31, 1996, and compared to $1.54 for the year ended
December 31, 1995.  Basic earnings per common share for the fourth quarter of
1997, decreased 45.3% to $0.29 from $0.53 for the fourth quarter of 1996.  The
effect of stock options, the Company's only dilutive securities, is minimal.   
Earnings per common share assuming dilution for the year ended December 31,
1997 was $1.59, compared to $1.72 for the year ended December 31, 1996, and to
$1.51 for the year ended December 31, 1995.  Return on average stockholders'
equity for the years ended December 31, 1997, 1996 and 1995 was 10.86%, 12.75%
and 12.46%, respectively.  Return on average assets for the years ended 1997,
1996 and 1995 was 1.12%, 1.29% and 1.19%, respectively. 

NET INTEREST INCOME 
The operating results of the Company depend primarily on its net interest
income, which is the difference between interest income earned on
interest-bearing assets and interest expense on interest-bearing liabilities,
consisting mainly of deposits.  Net interest income is determined by the
difference between yields earned on assets and rates paid on liabilities
(interest-rate spread) and the relative amounts of interest-earning assets and
interest-bearing liabilities.  The Company's interest-rate spread is affected by
regulatory, economic and competitive factors that influence interest rates, loan
demand and deposit flows. 

                                                                             24






For the year ended December 31, 1997, net interest income, on a tax-equivalent
(TE) basis, increased 6.4%, or $3.6 million to $59.7 million compared to $56.1
million for 1996.  For the year ended December 31, 1996, net interest income
(TE) increased 13.3%, or $6.6 million from $49.5 million for 1995.  The 1997
increase is attributable to increased volume of earning assets, while volume and
interest-rate spread improvement played a balanced role in the 1996 increase.
Net interest income (TE) as a percent of average earning assets was 4.32%, 4.41%
and 4.18% for the years ended December 31, 1997, 1996 and 1995, respectively.
Management attributes the 1997 drop to the concentration on secured real estate
lending and competitive consumer loan markets.  The banks generally maintain a
relatively balanced position between volumes of rate-repricing assets and
liabilities to guard to some degree against adverse effects to net interest
income from possible fluctuations in interest rates. 

PROVISION FOR LOAN LOSSES 
The Company's primary business of making real estate, consumer and commercial
loans entails potential loan losses, the magnitude of which depends on a variety
of economic factors affecting borrowers which are beyond the control of the
Company.  The provision for loan losses reflects management's judgement of the
cost associated with credit risk inherent in the loan portfolio.  The provision
for loan losses amounted to $5.0 million for 1997, an increase of 85.2% compared
to $2.7 million for 1996, which was an increase of 22.7% compared to $2.2
million in 1995.  The provision for loan losses as a percentage of average loans
was 0.47% for the year ended December 31, 1997, up from 0.28% for the year ended
December 31, 1996 and 0.25% for the year ended December 31, 1995.  The increase
in the 1997 provision was essential to provide for the growth in outstanding
loans and the continuing trend of increasing consumer loan chargeoffs. 

Net chargeoffs for 1997 were $3.4 million compared to $1.7 million for 1996 and
$1.0 million for 1995.  Net chargeoffs were $1.0 million in both the third and
fourth quarters of 1997.  As a percentage of average loans, net chargeoffs were
0.32% for 1997, up from 0.18% for 1996 and 0.11% for 1995.  The allowance for
loan losses is maintained at a level which management considers adequate to
absorb estimated potential losses in the loan portfolio, after reviewing the
individual loans and in relation to risk elements in the portfolios and giving
consideration to the prevailing economy and anticipated changes.  At December
31, 1997, the allowance for loan losses is 1.49% of outstanding loans compared
1.42% of outstanding loans at December 31, 1996.  The December 31, 1997
allowance is 126% of nonperforming assets compared to 121% at December 31, 1996.

NONINTEREST INCOME 
During the last two years, the Company has continued to engage outside
consulting firms to review banking products, services and charges.  As a result,
fees from traditional deposit services as well as revenues from brokerage
services, trust services and other commission business have been increased by
management's focus on improving all areas of noninterest income.  Noninterest
income is an important but not yet significant source of revenue for the
Company, representing 15.0% of tax equivalent net revenues in 1997, compared to
13.1% in 1995 and 13.7% in 1995.  Noninterest income amounted to $10.5 million
in 1997, a 23.5% increase compared to $8.5 million in 1996 which was an increase
of 7.6% compared to $7.9 million in 1995. 


                                                                             25






Service charges on deposit accounts, the largest component of noninterest
income, increased 26.2% in 1997 and 7.5% in 1996.  The increases are primarily
attributable to a change in the assessment of overdraft fees.  This level of
increase is not expected to continue in future years. 

Trust fees for 1997 increased 12.4% from 1996 which increased 9.0% from 1995.
These increases match the growth in the amount of trust assets managed which
were primarily in estate and personal trust accounts.  The fall in insurance
commissions is due to more competition.  Income from bankcards, investment
brokerage services and property and casualty insurance products all generated
higher level of fees in 1997 due to account growth. 

NONINTEREST EXPENSE 
The ratio of noninterest expense net of noninterest income exclusive of
securities gains to average total assets has been very consistent despite many
re-engineering efforts, and was 1.99% for 1997, 1.97% for 1996 and 1.96% for
1995.  Since internal asset growth is not expected to reach significant levels,
management wants to focus on controlling the rate of increase of noninterest
expense through more employee productivity.  The Company consolidated one of the
previously separate corporate subsidiaries into the lead bank during 1997 and
six in 1995 and 1994 to allow the personnel at all locations to better focus on
consistent quality customer service, increasing the volume of business and to
reduce a small amount of redundant costs.  Also during 1997, two data processing
systems were converted to the Company's primary data processor to allow for
uniform product delivery and better employee utilization. 

Noninterest expense for 1997, which includes costs associated with consolidation
of bank systems, additional consulting fees and merger related expenses,
increased 12.9%, to $39.3 million, compared to $34.8 million for 1996.
Noninterest expense for 1996, reflecting higher equipment and data processing
costs, increased 8.1%, compared to $32.2 million for 1995.  Noninterest expense
for 1995 decreased 0.3% due to reduced deposit insurance rates and the absence
of merger-related professional fees.

Salaries and employee benefits increased 8.4% in 1997, compared to 4.1% in 1996.
Staffing levels, considering the branch acquisition in 1997 and the savings bank
acquisition in 1996, were comparable at December 31, 1997 and 1995.  The
Company has made investments in equipment and facilities of approximately $8.6
million during the last three years as technology has advanced and the need to
leverage personnel costs has intensified.  Occupancy expense increased 11.5% in
1997, 2.5% in 1996 and 5.5% in 1995.  Equipment expense increased 23.9% in 1997,
15.2% in 1996 and 13.2% in 1995 due to depreciation and maintenance of new
equipment.  Depreciation is computed using the straight-line method over the
estimated useful lives of the assets which range from two to ten years for
equipment.  Much of the recent years' equipment purchases are electronic and
technology sensitive items which the Company depreciates over a five year or
shorter period.  Management plans to continue to invest in technology for new
product delivery systems. 

Due to the current level of soundness of the Federal Deposit Insurance
Corporation (FDIC), deposit insurance assessments are now a minimal amount.  In
the second quarter of 1995, the FDIC reduced the rate paid by most commercial

                                                                             26






banks from $0.23 to $0.04 per $100 of insured deposits and effective January
1996, the rate was reduced to a $2,000 minimum per bank.  All of the Company's
subsidiaries received the lowest applicable deposit assessment rates from the
FDIC.  In the third quarter of 1996, the FDIC made a special assessment on
savings banks' deposits of $0.657 for every $100 of saving bank deposits on
March 31, 1995 to support the failing savings bank industry.  The amount of the
special assessment paid in 1996 by the Company's savings bank subsidiaries was
$1.3 million.  Management expects the level of deposit insurance expense to be
insignificant in 1998. 

Increased data processing expense is attributable to a greater volume of
activity and the outsourcing of some activities.  The increase was 18.9% in 1997
and 15.4% in 1996.  Excluding system conversion costs, the increase in 1997
was 12.2%.  Kentucky Bankshare tax legislation was passed in 1997, reforming the
assessment of this tax.  The tax increased 5.2% in 1997 and increased 13.6% in
1996.  The banks are required to maintain significant noninterest-bearing
balances with the Federal Reserve and to pay fees to regulatory agencies for
periodic examinations by the agencies. 

The significant $1.5 million increase in legal, accounting and consulting fees
in 1997 are due to the combining of subsidiaries, product and system reviews by
consultants and the Union Planters merger. 

INCOME TAXES 
The Company's income tax planning is based on the goal of maximizing, long-term,
after-tax profitability.  Income tax expense is impacted by the mix of taxable
versus tax-exempt revenues from securities and loans as well as certain
nondeductible expenses.  The Company manages the effective tax rate to some
degree based upon changing tax laws, particularly alternative minimum tax
provisions, the availability and price of nontaxable debt securities and other
portfolio considerations. 

The decrease in income tax expense for 1997 and the increase in 1996 are
attributable to corresponding changes in operating earnings and increasingly
higher effective tax rates in both years.  The Company's effective income tax
rate was 32.9%, 31.7% and 30.4%, for the years ended December 31, 1997, 1996 and
1995, respectively.  The effective tax rate increased due to the continued
decline in nontaxable income and an increase in nondeductible merger-related
expenses and interstate taxation. 

LIQUIDITY AND INTEREST-RATE SENSITIVITY 
The objective of liquidity management is to ensure the ability to access
funding which enables each bank to efficiently satisfy the cash flow
requirements of depositors and borrowers.  The goal of the asset/liability
management (ALM) process is to manage the structure of the balance sheet to
provide the maximum level of net interest income while maintaining acceptable
levels of interest sensitivity risk.  The Company's objective of liquidity
management is to ensure the ability to access funding which enables each bank to





                                                                             27






efficiently satisfy the cash flow requirements of depositors and borrowers.  ALM
involves the funding and investment strategies necessary to maintain an
appropriate balance between interest sensitive assets and liabilities as well as
to assure adequate liquidity. 

The Company monitors funds available from a number of sources to meet its
objectives.  The primary source of liquidity for the banks, in addition to loan
repayments, is their debt securities portfolios.  Securities classified as held
for sale are those that the Company intends to use as part of its
asset/liability management and that may be sold prior to maturity in response to
changes in interest rates, resultant prepayment risks and other factors.  The
Company's access to the retail deposit market through individual locations in
nine different counties has been a reliable source of funds.  Additional funds
for liquidity are available by borrowing federal funds from correspondent banks,
Federal Home Loan Bank borrowings and brokered deposits.  Various types of
analyses are performed to ensure adequate liquidity, and to evaluate the
desirability of the relative interest rate sensitivity of assets and
liabilities.  Management considers current liquidity positions of the banks to
be adequate to meet depositor and borrower needs. 

Because banks must assume interest rate risks as part of their normal opera-
tions, the Company actively manages its interest rate sensitivity as well as
liquidity positions.  Both interest rate sensitivity and liquidity are affected
by maturing assets and sources of funds; however, management must also consider
those assets and liabilities with interest rates which are subject to change
prior to maturity.  Management does not make interest bets, but instead seeks to
fairly closely match the duration of repricing assets and liabilities over time.

The Company's ALM policy provides limits for interest rate risk.  Declines in
simulated net interest income for the following twelve months are limited to 5%
based upon immediate up or down shifts in interest rate of 200 basis points.  At
December 31, 1997, this simulation estimated net interest income exposure to be
4.9%.  Simulated declines in economic value are limited to 20.0% of capital.  At
December 31, 1997, the estimated economic exposure was 5.9% of capital.
Currently, the Company does not employ interest rate swaps, financial futures or
options to affect interest rate risks. 

The banks and the Company collectively measure their level of earnings
exposure to future interest rate movements.  Simulation and interest rate gap
analyses are used to scrutinize the sensitivity of net interest income over a
relatively short (1-2 years) time horizon.  The analyses are used to examine the
impact on earnings of an immediate interest rate shock as well as other
forecasted interest rate scenarios.  Each scenario incorporates what management
believes to be the most reasonable assumptions about such variables as volumes,
prepayment rates for mortgage assets and repricing characteristics.  A valuation
analysis is also performed to measure the sensitivity of the Company's net
interest income.  This analysis involves discounting projected future cash flows
of assets, liabilities and off-balance sheet positions to arrive at an estimated
net present economic value. 




                                                                             28






<TABLE>
<CAPTION>
<S>                         <C>          <C>          <C>          <C>          <C>          <C>          <C>          <C>

Table 5 
Interest Rate Sensitivity 
 Analysis                           1-90       91-365     Total at      >1 - <3      >3 - <5     >5 - <15      Over 15
December 31, 1997                   Days         Days       1 year        years        years        years        years        Total
___________________________________________________________________________________________________________________________________
(in thousands) 

Rate Sensitive Assets 
Securities, at cost 
  U.S. treasury 
   and agencies                       $0      $13,211      $13,211      $17,029      $41,307       $4,475       $1,544      $77,566
  Mortgage-backed                 12,360       29,479       41,839       42,318       34,660       43,237        2,732      164,786
  Municipal bonds                  1,585        2,040        3,625        7,689        8,351       42,772          176       62,613
  Other                            7,471           66        7,537           35        1,601            0            0        9,173
                                 -------      -------      -------      -------    ---------    ---------    ---------    ---------
                                  21,416       44,796       66,212       67,071       85,919       90,484        4,452      314,138
Loans                            330,681      424,711      755,392      168,413      101,948       74,822        3,272    1,103,847
                                 -------      -------      -------      -------    ---------    ---------    ---------    ---------
                                 352,097      469,507      821,604      235,484      187,867      165,306        7,724    1,417,985
Rate Sensitive Liabilities 
Deposits 
  Transaction and savings        238,814            0      238,814       30,739       30,739      153,694       22,407      476,393
  Time                           152,233      250,929      403,162      186,593       16,563        3,776            0      610,094
Short-term borrowings             57,759       56,713      114,472            0            0            0            0      114,472
Long-term borrowings              33,703        2,420       36,123          937          837        3,596        1,611       43,104
                                 -------      -------      -------      -------    ---------    ---------    ---------    ---------
                                 482,509      310,062      792,571      218,269       48,139      161,066       24,018    1,244,063
                                 -------      -------      -------      -------    ---------    ---------    ---------    ---------
Period Gap                     ($130,412)    $159,445      $29,033      $17,215     $139,728       $4,240     ($16,294)    $173,922
                                 =======      =======      =======      =======    =========    =========    =========    =========

Cumulative Gap at 12/31/97     ($130,412)     $29,033      $29,033      $46,248     $185,976     $190,216     $173,922     $173,922
</TABLE>
Management made the following assumptions in preparing the Interest Rate
Sensitivity Analysis: 

     1 Assets and liabilities are generally scheduled according to their 
       earliest repricing dates regardless of their contractual maturities. 
     2 Nonaccrual loans are included in the rate-sensitive category. 
     3 The scheduled maturities of mortgage-backed securities assume 
       principal prepayments on dates estimated by management, relying 
       primarily on current and concensus interest-rate forecasts in 
       conjunction with historical prepayment schedules. 
     4 Transaction and savings deposits that have no contractual maturities 
       are scheduled according to management's best estimate of their re- 
       pricing in response to changes in market rates. 







                                                                             29


DATA PROCESSING SYSTEMS AND THE YEAR 2000 RISK FACTOR 
In June 1997, the Company implemented its "Y2K Project" to address a potential
problem with which substantially all users of automated data processing and
information systems are faced.  This problem arises from the use by older
systems of only two digits, rather than the full four digits, to represent the
year applicable to a transaction.  Computer systems so programmed may not
operate properly when the last two digits or the year become "00" as will occur
on January 1, 2000.  In some cases inputting a date later than December 31,
1999, would cause a computer to stop operating while in other cases incorrect
output may result.  This potential problem could adversely effect a wide variety
of automated information systems such as mainframe applications, personal
computers, communication systems and other information systems routinely
utilized in all industries. 

Substantially all of the date-sensitive software/applications utitlized by the
Company is provided by outside vendors.  The Company primarily uses a
third-party to provide "core" operating system/application software to process
data pertaining to its demand deposits, saving accounts, CDs and other deposits,
loans and like items.  On August 15, 1997, this third-party provider certified
the Company's core operating system to be Year-2000 compliant, and testing is
expected to be completed by December of 1998. 

Other third-party-provided application software is used to process substan-
tially all of the Company's other data, such as credit cards, trust accounts,
investment-security management, accounts payable and others.  Testing of these
systems is expected to be completed by September of 1998 and Year-2000
compliance achieved prior to December of 1998 either through installation of
presently available software upgrades or through installation of, and conversion
to, presently available alternative systems.  Each third-party provider is
contractually bound at its own expense to bring its software into Year-2000
compliance and to maintain it in compliance should problems be identified during
testing.  By December of 1998, testing of all third-party-provided software and
hardware is expected to be completed. 

The banks continue to bear some risk arising from the advent of the Year-2000
and could be adversely affected should significant bank customers fail to
address the issue appropiately.  At present, management has no reason to believe
that any customer with which it has significant banking relationships are
failing to take appropriate action to effect Year-2000 compliance or that its
software/application vendors will be unable to perform under their contracts.
Based on currently available information, management does not anticipate that
the cost to address the Year 2000 issues will have a material adverse impact on
the Company's financial condition, results of operations, or liquidity. 

NEW ACCOUNTING PRONOUNCEMENTS 
The Financial Accounting Standards Board recently issued Statement of Financial
Accounting Stardards No.  130 and No.  131.  They are effective for the
Company's next year financial statements.  Management does not believe these
statements will have a material impact on the Company's financial statements. 




                                                                             30






Item 8.  FINANCIAL STATEMENTS AND SUPPLEMENTARY DATA 

Independent Auditors' Report 
_______________________________________________________________________________ 

The Board of Directors and Stockholders 
Peoples First Corporation 

We have audited the accompanying consolidated balance sheets of Peoples First
Corporation and subsidiaries as of December 31, 1997 and 1996, and the related
consolidated statements of income, changes in stockholders' equity and cash
flows for each of the years in the three-year period ended December 31, 1997.
These consolidated financial statements are the responsibility of the Company's
management.  Our responsibility is to express an opinion on these consolidated
financial statements based upon our audits. 

We conducted our audits in accordance with generally accepted auditing
standards.  Those standards require that we plan and perform the audit to obtain
reasonable assurance about whether the financial statements are free of material
misstatement.  An audit includes examining, on a test basis, evidence supporting
the amounts and disclosures in the financial statements.  An audit also includes
assessing the accounting principles used and significant estimates made by
management, as well as evaluating the overall financial statement presentation.
We believe that our audits provide a reasonable basis for our opinion. 

In our opinion, the consolidated financial statements referred to above present
fairly, in all material respects, the financial position of Peoples First
Corporation and subsidiaries as of December 31, 1997 and 1996, and the results
of their operations and their cash flows for each of the years in the three-year
period ended December 31, 1997, in conformity with generally accepted accounting
principles. 


/s/ KPMG Peat Marwick LLP 

St. Louis, Missouri 
January 23, 1998 
















                                                                             31






                                                       December 31, December 31,
CONSOLIDATED BALANCE SHEETS                                   1997         1996
_______________________________________________________________________________
(in thousands) 
 
ASSETS 
Cash and due from banks                                    $46,820      $43,285
Securities held for sale                                   217,871      182,352
Securities held for investment                              98,622      121,959
Loans held for sale                                          2,140        1,886
Loans receivable, net                                    1,085,265    1,021,634
Goodwill and other intangible assets                        12,106       10,923
Premises and equipment                                      20,310       19,376
Other assets                                                17,863       16,349
                                                         ---------    ---------
                                                        $1,500,997   $1,417,764
                                                         =========    =========
LIABILITIES AND STOCKHOLDERS' EQUITY 
Deposits 
  Demand deposits                                          $90,354      $85,376
  Interest-bearing transaction accounts                    402,955      335,977
  Savings deposits                                          73,438       85,145
  Time deposits                                            610,094      608,755
                                                         ---------    ---------
                                                         1,176,841    1,115,253
Short-term borrowings                                      114,472      132,167
Long-term borrowings                                        43,104       14,013
Other liabilities                                           11,853       11,782
                                                         ---------    ---------
     Total liabilities                                   1,346,270    1,273,215

Stockholders' Equity 
  Common stock                                               7,818        7,812
  Surplus                                                   70,627       69,691
  Retained earnings                                         74,754       66,762
  Unrealized net gain on 
   securities held for sale                                  1,528          284
                                                         ---------    ---------
                                                           154,727      144,549
                                                         ---------    ---------
                                                        $1,500,997   $1,417,764
                                                         =========    =========

Fair value of securities held for investment              $102,191     $125,061
Common shares issued and outstanding                        10,007        9,999








See accompanying notes to consolidated financial statements.                 32






                                                     Year Ended December 31,
CONSOLIDATED STATEMENTS OF INCOME                1997         1996         1995
_______________________________________________________________________________
(in thousands except per share data) 

INTEREST INCOME 
Interest and fees on loans                    $96,948      $87,872      $78,487
Taxable interest on securities                 16,733       15,842       16,082
Nontaxable interest on securities               3,658        3,837        4,017
Interest on short-term investments                133          122          160
                                              -------      -------      -------
                                              117,472      107,673       98,746
INTEREST EXPENSE 
Interest on deposits                           51,461       46,902       45,608
Other interest expense                          8,120        6,657        5,544
                                               ------       ------       ------
                                               59,581       53,559       51,152
                                               ------       ------       ------
Net Interest Income                            57,891       54,114       47,594
Provision for Loan Losses                       5,041        2,664        2,167
                                               ------       ------       ------
Net Interest Income after 
 Provision for Loan Losses                     52,850       51,450       45,427

Noninterest Income                             10,548        8,535        7,944
Noninterest Expense                            39,280       34,843       32,158
                                               ------       ------       ------
Income Before Income Tax Expense               24,118       25,142       21,213
Income Tax Expense                              7,931        7,978        6,446
                                               ------       ------       ------
NET INCOME                                    $16,187      $17,164      $14,767
                                               ======       ======       ======

EARNINGS PER COMMON SHARE 
Basic                                           $1.62        $1.75        $1.54
Assuming dilution                                1.59         1.72         1.51

CASH DIVIDENDS PER COMMON SHARE                  0.82         0.63         0.48















See accompanying notes to consolidated financial statements.                 33






<TABLE>
<CAPTION>
<S>                                      <C>          <C>          <C>          <C>          <C>          <C>

                                                                                Unrealized net
                                                                                 gain (loss)      Debt on
CONSOLIDATED STATEMENTS OF CHANGES             Common                  Retained on securities        ESOP
 IN STOCKHOLDERS' EQUITY                        stock      Surplus     earnings held for sale      shares        Total
______________________________________________________________________________________________________________________
(in thousands, except share data) 

BALANCE AT DECEMBER 31, 1994                   $6,422      $34,859      $73,739      ($4,624)       ($133)    $110,263
Net income                                                               14,767                                 14,767
Cash dividends declared ($0.48 per share)                                (4,604)                                (4,604)
Common stock dividends declared (5%)              665       16,359      (17,024)                                     0
Issuance of 168,938 common shares pursuant 
 to shareholder and employee plans                120        2,051                                               2,171
Reduction of ESOP debt                                                                                 25           25
Change in unrealized net gain 
 (loss) on securities held for sale                                                    5,550                     5,550
                                               ------       ------       ------       ------       ------      -------
BALANCE AT DECEMBER 31, 1995                    7,207       53,269       66,878          926         (108)     128,172
Net income                                                               17,164                                 17,164
Cash dividends declared ($0.63 per share)                                (6,169)                                (6,169)
Common stock dividend declared (5%)               372       10,739      (11,111)                                     0
Issuance of 87,457 common shares pursuant 
 to shareholder and employee plans                 65        1,696                                               1,761
Issuance of 315,002 common shares 
 for acquisition                                  234        5,803                                               6,037
Repurchase of 89,005 common shares                (66)      (1,816)                                             (1,882)
Reduction of ESOP debt                                                                                108          108
Change in unrealized net gain 
 (loss) on securities held for sale                                                     (642)                     (642)
                                               ------       ------       ------       ------       ------      -------
BALANCE AT DECEMBER 31, 1996                   $7,812      $69,691      $66,762         $284           $0     $144,549
Net income                                                               16,187                                 16,187
Cash dividends declared ($0.82 per share)                                (8,195)                                (8,195)
Issuance of 72,127 common shares pursuant 
 to shareholder and employee plans                 56        1,770                                               1,826
Repurchase of 64,606 common shares                (50)        (834)                                               (884)
Change in unrealized net gain 
 (loss) on securities held for sale                                                    1,244                     1,244
                                               ------       ------       ------       ------       ------      -------
BALANCE AT DECEMBER 31, 1997                   $7,818      $70,627      $74,754       $1,528           $0     $154,727
                                               ======       ======       ======       ======       ======      =======






</TABLE>





See accompanying notes to consolidated financial statements.                 34


<TABLE>
<CAPTION>
<S>                                                   <C>          <C>          <C>

                                                                  Year Ended December 31,
CONSOLIDATED STATEMENTS OF CASH FLOWS                         1997         1996         1995
____________________________________________________________________________________________

OPERATING ACTIVITIES 
Net income                                                 $16,187      $17,164      $14,767
Adjustments to reconcile net income to net 
  cash provided by operating activities: 
    Depreciation and amortization                            3,681        3,126        2,752
    Net premium amortization                                   135          575          953
    Provision for loan losses                                5,041        2,664        2,167
    Net increase in loans held for sale                       (254)        (377)        (553)
    Provision for deferred income taxes                       (972)         352         (316)
    Increase (decrease) in accrued items                    (1,807)        (152)       3,167
    Other, net                                              (1,886)      (1,026)        (718)
                                                            ------       ------       ------
Net Cash Provided by Operating 
  Activities                                                20,125       22,326       22,219

INVESTING ACTIVITIES 
Proceeds from sales of securities 
  held for sale                                              3,677            0       12,086
Proceeds from maturities, calls and
  prepayments of securities held for sale                   11,620       24,266        4,000
Proceeds from maturities, calls and
  prepayments of securities held for investment             11,278       26,263       30,307
Principal collected on mortgage-backed 
  securities held for sale                                  25,045       17,412        9,045
Principal collected on mortgage-backed 
  securities held for investment                            20,633       21,545       14,332
Purchase of securities held for sale                       (73,467)     (73,565)     (33,033)
Purchase of securities held for investment                  (8,590)      (6,502)      (1,775)
Net increase in loans                                      (69,068)     (78,072)    (109,011)
Purchases of premises and equipment                         (3,379)      (2,044)      (3,190)
Net cash received in acquisition                                 0        1,185            0
                                                            ------       ------       ------
Net Cash Used by Investing Activities                      (82,251)     (69,512)     (77,239)
















See accompanying notes to consolidated financial statements.                 35


CONSOLIDATED STATEMENTS OF                                        Year Ended December 31,
 CASH FLOWS - CONTINUED                                       1997         1996         1995
____________________________________________________________________________________________
(in thousands) 

FINANCING ACTIVITIES 
Net increase in deposits                                   $61,588      $25,620      $48,521
Net increase (decrease) in other short-term borrowings     (17,695)      34,447        8,903
Proceeds from long-term borrowings                          43,500            0          139
Repayments of long-term borrowings                         (14,409)        (830)      (1,919)
Proceeds from issuance of common stock                         401          696        1,418
Repurchase of common stock                                    (884)      (1,882)           0
Cash dividends paid                                         (6,840)      (5,104)      (3,851)
                                                            ------       ------       ------
Net Cash Provided by Financing Activities                   65,661       52,947       53,211
                                                            ------       ------       ------
Cash and Cash Equivalents 
  Decrease                                                   3,535        5,761       (1,809)
  Beginning of Year                                         43,285       37,524       39,333
                                                            ------       ------       ------
  End of Year                                              $46,820      $43,285      $37,524
                                                            ======       ======       ======

SUPPLEMENTAL DISCLOSURES 
Cash paid for interest expense                             $58,764      $54,279      $48,642
Cash paid for income taxes                                   8,500        8,824        5,558

NONCASH INVESTING AND FINANCING TRANSACTIONS 
Other real estate transferred 
  from loans, net                                              397          108           30
Dividends reinvested                                         1,356        1,065          753
Common stock issued in acquisition                               0        6,037            0











</TABLE>









See accompanying notes to consolidated financial statements.                 36






1.  SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES 
Peoples First Corporation (Company) through its subsidiaries, Peoples First
National Bank and Trust Company and Peoples First, F.S.B., operates principally
in a single business segment offering a full range of banking services to
individual and corporate customers in the western Kentucky and contiguous
interstate area.  The Company and the subsidiary banks are subject to the
regulations of various Federal and state agencies and undergo periodic
examination by regulators. 

The accounting policies and reporting practices of the Company and its
subsidiaries conform to generally accepted accounting principles and general
practices within the banking industry.  In preparing financial statements,
management is required to make assumptions and estimates which affect the
Company's reported amounts of assets and liabilities and the results of
operations.  Estimates and assumptions involve future events and may change. 

The more significant accounting policies are summarized below. 

BASIS OF PRESENTATION 
The consolidated financial statements include the accounts of the Company and
its subsidiaries.  All significant intercompany balances and transactions have
been eliminated.  Prior period financial statements are also restated to include
the accounts of companies which are acquired and accounted for as pooling of
interests.  Results of operations of companies acquired subject to purchase
accounting are included from the dates of acquisition.  In accordance with
purchase accounting, assets and liabilities of purchased companies are stated at
fair values, less accumulated amortization and depreciation since the dates of
acquisition.  The excess of cost over fair value of the net assets acquired is
being amortized on the straight-line method over a fifteen-year period. 

SECURITIES HELD FOR SALE AND INVESTMENT 
At acquisition, securities are classified into one of three categories: trading,
held for sale or investment.  Transfers of debt securities between categories
are recorded at fair value at the date of transfer.  Unrealized gains or losses
associated with transfers of debt securities from the investment to the held for
sale category are recorded and maintained as a separate component of stock-
holders' equity.  The unrealized gains or losses included as a separate
component of stockholders' equity for debt securities transferred to the
investment from the held for sale category are maintained and amortized into
earnings over the remaining life of the debt securities as an adjustment to
yield in a manner consistent with the amortization or accretion of premiums or
discounts on the associated securities. 

Trading securities are bought and held principally with the intention of selling
them in the near term.  The Company currently has no trading securities.
Securities that are being held for indefinite periods of time, including secur-
ities that management intends to use as a part of its asset/liability strategy,
or that may be sold in response to changes in interest rates, changes in prepay-
ment risk, to meet liquidity needs, the need to increase regulatory capital or
other similar factors, are classified as securities held for sale and are stated



                                                                             37






at fair value.  Fair value is based on market prices quoted in financial publi-
cations or other independent sources.  Net unrealized gains or losses are
excluded from earnings and reported, net of applicable income taxes, as a
separate component of stockholders' equity until realized.  Securities for which
the Company has the ability and positive intent to hold until maturity are
classified as securities held for investment and are carried at cost, adjusted
for amortization of premiums and accretion of discounts, which are recognized as
adjustments to interest income on the level yield method. 

Certain changes in circumstances and other events that are isolated,
nonrecurring and unusual for the Company that could not have been reasonably
anticipated may cause the Company to change its intent to hold a certain
security to maturity without necessarily calling into question its intent to
hold other securities for investment. 

Realized gains or losses on securities held for sale or investment are accounted
for using the specific security.  A decline in the fair value of any security
held for sale or investment below cost that is deemed other than temporary
results in a charge to earnings and the establishment of a new cost basis for
the security.  Mortgage-backed securities represent a significant portion of the
security portfolios.  Amortization of premiums and accretion of discounts on
mortgage-backed securities are analyzed in relation to the corresponding
prepayment rates, both historical and estimated, using a method which
approximates the level yield method. 

LOANS HELD FOR SALE 
The Company's operations include a limited amount of mortgage banking.  Mortgage
banking activities include the origination of residential mortgage loans for
sale to various investors.  Mortgage loans originated and intended for sale in
the secondary market, principally under programs with the Government National
Mortgage Association (GNMA) or the Federal National Mortgage Association (FNMA),
are carried at the lower of cost or market value.  Mortgage banking revenues,
including origination fees, servicing fees, net gains on sales of servicing
rights, net gains or losses on sales of mortgages and other fee income amount to
less than 1% of the Company's total revenue for the years ended December 31,
1997, 1996 and 1995.  Loans sold with retained servicing rights are also an
immaterial amount. 

LOANS RECEIVABLE 
Loans receivable held for investment are carried at cost, as the Company has the
ability and it is management's intention to hold them to maturity.  Interest on
commercial and real estate mortgage loans is accrued if deemed collectible and
credited to income based upon the principal amount outstanding. 

The Company evaluates the collectibility of both contractual interest and
contractual principal of all receivables when assessing the need for loss
recognition.  When in the opinion of management the collection of interest on a
loan is unlikely or when either principal or interest is past due over 90 days,





                                                                             38






that loan is generally placed on nonaccrual status.  When a loan is placed in
nonaccrual status, accrued interest for the current period is reversed and
charged against earnings and accrued interest from prior periods is charged
against the allowance for loan losses.  A loan remains on nonaccrual status
until the loan is current as to payment of both principal and interest and/or
the borrower demonstrates the ability to pay and remain current.  Interest
payments received on nonaccrual loans are applied to principal if there is any
doubt as to the collectibility of total principal, otherwise these payments are
recorded as interest income. 

The Company recognizes interest income on nonaccrual impaired loans equal to the
amount of interest received, if any, in cash.  All changes in the present value
of estimated future cash flows are recorded as an adjustment to the allowance
for loan losses and ultimately the provision for loan losses.  No interest
income is recognized for changes in present value attributable to the passage of
time. 

ALLOWANCE FOR LOAN LOSSES 
The allowance for loan losses is increased by provisions for loan losses charged
to operations and is maintained at a level adequate to absorb estimated credit
losses associated with the loan portfolio, including binding commitments to lend
and off-balance sheet credit instruments.  The allowance for loan losses is
decreased by charge offs, net of recoveries.  At the end of each quarter, or
more frequently if warranted, management uses a systematic, documented approach
in determining the appropriate level of the allowance for loan losses.
Management's approach provides for general and specific allowances and is based
upon current economic conditions, past loan loss experience, collection
experience, risk characteristics of the loan portfolio, assessment of collateral
values and such other factors which in management's judgement deserve current
recognition in estimating potential loan losses. 

Certain impaired loans are reported at the present value of expected future cash
flows discounted at the loan's effective interest rate, or at the loan's
observable market price or the fair value of the collateral if the loan is
collateral dependent, by allocating a portion of the allowance for loan losses
to such loans.  If these allocations cause the allowance for loan losses to be
increased, such increase is recorded as provision for loan losses. 

GOODWILL AND OTHER INTANGIBLE ASSETS 
Net assets of subsidiaries acquired in purchase transactions are recorded at
fair value at the date of acquisition.  The excess of cost over net assets
acquired (goodwill) is amortized by systematic charges in the statement of
income over the period benefited.  Management evaluates the periods of
amortization continually to determine whether later events and circumstances
warrant revised estimates.  Currently, amortization is provided on a
straight-line basis over fifteen years.  Accumulated amortization was $5.1
million at December 31, 1997 and $4.1 million at December 31, 1996.
Amortization expense was $977,724, $879,164 and $829,884, for the years ended
December 31, 1997, 1996 and 1995, respectively. 




                                                                             39






Included on the consolidated balance sheets, are core deposit intangibles
arising from purchase acquisitions in 1997 and 1996.  The carrying amount at
December 31, 1997 is $2,497,628.  Currently, amortization of the intangible
asset is provided on an accelerated basis over ten years.  Accumulated
amortization was $190,056 at December 31, 1997 and $21,724 at December 31, 1996.
Amortization expense was $168,332 and $21,724 for the years ended December 31,
1997 and 1996, respectively. 

The Company recognizes a loss on impaired assets, other than loans, when the
carrying amount of the asset may not be recoverable.  Management periodically
evaluates whether events or circumstances have occurred that would result in
impairment in the value or life of goodwill or other intangibles.  Management
considers an intangible to be potentially impaired if internal management
reports for respective business units show a net loss before amortization of
intangibles.  The recoverability of the asset is then evaluated using
undiscounted cash flow projections. 

PREMISES AND EQUIPMENT 
Premises and equipment are stated at cost, less accumulated depreciation and
amortization.  The provision for depreciation and amortization is computed using
the straight-line method over the estimated useful lives of the assets.  Esti-
mated useful lives on buildings range from ten to thirty years and two to ten
years on equipment.  Leasehold improvements are amortized over the term of the
related leases.  Expenditures for major renewals and betterments of premises and
equipment are capitalized and those for maintenance and repairs are expensed as
incurred. 

OTHER REAL ESTATE 
Real estate acquired through foreclosure or deed in lieu of foreclosure is in-
cluded in other assets, and is recorded at the lower of cost or the property's
fair value at the time of foreclosure less estimated disposal costs, if any.
The excess of cost over fair value of other real estate at the date of
acquisition is charged to the allowance for loan losses.  Subsequent reductions
in carrying value to reflect current fair value and any other period costs are
charged to expense as incurred. 

STOCK OPTIONS 
The Company recognizes no compensation cost for stock option grants in the
financial statements. 

INCOME TAXES 
Income tax expense is reported as the total of current income taxes payable and
the net change in deferred income taxes payable provided for temporary
differences.  Deferred income taxes reflect the net tax effects of temporary
differences between the carrying values of assets and liabilities for financial
reporting purposes and the values for income tax purposes.  Deferred income
taxes are recorded at the statutory Federal rates in effect at the time that the
temporary differences are expected to reverse.  The measurement of deferred tax
assets is reduced, if necessary, by the amount of any tax benefits that, based
upon management's judgment of available evidence, are not expected to be
realized.  The significant components of deferred tax assets and liabilities are


                                                                             40






principally related to unrealized net gain or loss on securities, provision for
loan losses, amortization of premiums on debt securities, depreciation and
deferred compensation.  The Company files a consolidated Federal income tax
return which includes its subsidiaries. 

PER COMMON SHARE (EPS) DATA 
Share and per share information have been adjusted to give effect to stock
dividends in the three years ended December 31, 1997. 

EPS Reconciliation                                                    Per share
Year Ended December 31, 1997                   Income       Shares       amount
_______________________________________________________________________________
(in thousands) 

Basic EPS 
Income available to 
 common stockholders                          $16,187        9,998        $1.62
                                                                           ====
Effect of dilutive securities 
  Stock options                                    --          190
                                               ------       ------
Diluted EPS                                   $16,187       10,188        $1.59
                                                                           ====

EPS Reconciliation                                                    Per share
Year Ended December 31, 1996                   Income       Shares       amount
_______________________________________________________________________________
(in thousands) 

Basic EPS 
Income available to 
 common stockholders                          $17,164        9,787        $1.75
                                                                           ====
Effect of dilutive securities 
  Stock options                                    --          169
                                               ------       ------
Diluted EPS                                   $17,164        9,956        $1.72
                                                                           ====

EPS Reconciliation                                                    Per share
Year Ended December 31, 1995                   Income       Shares       amount
_______________________________________________________________________________
(in thousands) 

Basic EPS 
Income available to 
 common stockholders                          $14,767        9,600        $1.54
                                                                           ====
Effect of dilutive securities 
  Stock options                                    --          204
                                               ------       ------
Diluted EPS                                   $14,767        9,804        $1.51
                                                                           ====
                                                                             41






CASH AND CASH EQUIVALENTS 
For purposes of the consolidated statements of cash flows, the Company considers
cash and due from banks and highly liquid securities purchased with a maturity
of three months or less to be cash equivalents. 

RECLASSIFICATIONS 
Certain amounts in the 1996 and 1995 consolidated financial statements have been
reclassified to conform with the 1997 presentation.  The reclassifications had
no effect on previously reported stockholders' equity or net income. 

2.  BUSINESS COMBINATIONS 
During the three year period ended December 31, 1997, the Company was a party
to one business combination, which was accounted for using the purchase method
of accounting.  Results of operations subject to purchase accounting are
included from the date of acquisition.  Disclosure of pro forma condensed
results of operations as if this acquisition were consummated as of the
beginning of the period have been omitted due to the immaterial effect on
operations. 

On August 30, 1996, the Company consummated the acquisition of Peoples First,
F.S.B., formerly Guaranty Federal Savings Bank, and subsequent merged the
Savings Bank into Peoples Bank during 1997.  The Company acquired all of the
outstanding shares of the Savings Bank in exchange for 315,002 shares of Peoples
First Corporation common stock.  The Saving Bank had three locations in
Clarksville, Tennessee, immediately southeast of the market area served by the
Company's other subsidiary banks.  Immediately prior to the acquisition, the
savings bank had total assets of approximately $55.9 million. 

On October 9, 1997, the lead bank consummated the purchase of Republic Bank &
Trust Company's Benton, Kentucky branch.  The cash purchase included one branch
office facility and deposits of approximately $33.0 million.  This purchase
doubled the lead bank's presence in Marshall County, Kentucky. 

On November 17, 1997, the Company entered into a definitive Agreement and Plan
of Merger (Agreement) with Union Planters Corporation (Union Planters).  Under
the agreement, each common outstanding share of the Company will be exchanged
for 0.6 share of Union Planters' common stock.  Each of the Company's out-
standing incentive stock option and nonqualified stock option will be converted
to options to acquire Union Planters' common stock at the same 0.6 exchange
ratio.  In connection with the Agreement, the Company granted Union Planters an
option to purchase 19.9% of its common stock in certain circumstances.  The
transaction is subject to regulatory approval, Company shareholder approval and
other customary terms and conditions.  The merger is expected to be consummated
in May 1998. 

 3.  CASH AND DUE FROM BANKS 
The Company's banking subsidiaries are required to maintain certain reserve
balances in cash with Federal Reserve Banks (FRB).  The reserve balances
maintained in accordance with FRB requirements, partially satisfied by vault
cash on hand, as of December 31, 1997 and 1996 were $8.8 million and $8.0
million, respectively.  The average amount of required reserves were $7.7
million and $12.8 million, respectively, for the years ended December 31, 1997
and 1996. 
                                                                             42






4.  SECURITIES HELD FOR SALE AND INVESTMENT 
The amortized cost and fair value of securities held for sale as of 
December 31, 1997 and 1996 are summarized as follows: 

                                                Gross        Gross
Securities Held For Sale       Amortized   unrealized   unrealized         Fair
December 31, 1997                   cost        gains       losses        value
_______________________________________________________________________________
(in thousands) 

U.S. treasury and agencies       $74,858         $700         ($84)     $75,474
Mortgage-backed securities       131,585        1,875         (136)     133,324
Federal Home Loan Bank 
 stock                             7,472            0            0        7,472
Federal Reserve Bank stock         1,601            0            0        1,601
                                 -------      -------      -------      -------
                                $215,516       $2,575        ($220)    $217,871
                                 =======      =======      =======      =======

                                                Gross        Gross
Securities Held For Sale       Amortized   unrealized   unrealized         Fair
December 31, 1996                   cost        gains       losses        value
_______________________________________________________________________________
(in thousands) 

U.S. treasury and agencies       $58,604         $307        ($310)     $58,601
Mortgage-backed securities       108,487          916         (501)     108,902
Federal Home Loan Bank 
 stock                            13,395           30            0       13,425
Federal Reserve Bank stock         1,424            0            0        1,424
                                 -------      -------      -------      -------
                                $181,910       $1,253        ($811)    $182,352
                                 =======      =======      =======      =======

The amortized cost and fair value of securities held for investment as of
December 31, 1997 and 1996 are summarized as follows: 

Securities                                      Gross        Gross
  Held for Investment          Amortized   unrealized   unrealized         Fair
December 31, 1997                   cost        gains       losses        value
_______________________________________________________________________________
(in thousands) 

U.S. treasury and agencies        $2,708           $3         ($12)      $2,699
Mortgage-backed securities        33,200          322          (67)      33,455
State and political 
 subdivisions                     62,614        3,323            0       65,937
Other                                100            0            0          100
                                 -------      -------      -------      -------
                                 $98,622       $3,648         ($79)    $102,191
                                 =======      =======      =======      =======


                                                                             43






Securities                                      Gross        Gross
  Held for Investment          Amortized   unrealized   unrealized         Fair
December 31, 1996                   cost        gains       losses        value
_______________________________________________________________________________
(in thousands) 

U.S. treasury and agencies        $7,102           $7         ($35)      $7,074
Mortgage-backed securities        53,819          486         (168)      54,137
State and political 
 subdivisions                     60,938        2,830          (18)      63,750
Other                                100            0            0          100
                                 -------      -------      -------      -------
                                $121,959       $3,323        ($221)    $125,061
                                 =======      =======      =======      =======


Proceeds from sales of securities during 1997 and 1995 were $3,676,900 and
$12,085,690, respectively.  Gross gains of $0 and $178,143 and no gross losses
were realized on those sales during 1997 and 1995, respectively.  There were no
sales of securities during 1996. 

The amortized cost, estimated fair value and the weighted average yield of
securities held for sale and held for investment at December 31, 1997, by
estimated maturity, are shown below.  Actual maturities will differ from the
depicted maturities because of the borrowers' right to call or prepay
obligations with or without prepayment penalties.  Management evaluates, on an
ongoing basis, the potential maturities for asset/liability purposes.  Yields on
tax-exempt obligations have not been computed on a tax-equivalent basis. 

Securities Held for Sale                                               Weighted
  Maturity Distribution                     Amortized         Fair      average
December 31, 1997                                cost        value        yield
_______________________________________________________________________________
(in thousands) 

U.S. treasury and agencies 
  1 year or less                              $13,002      $12,986         5.49%
  Over 1 through 5 years                       56,716       57,266         6.44
  Over 5 through 10 years                       5,140        5,222         6.68
  Over 10 years                                     0            0           --
Mortgage-backed securities 
  1 year or less                                9,721        9,763         6.54
  Over 1 through 5 years                       99,128      100,437         6.76
  Over 5 through 10 years                      15,232       15,523         6.98
  Over 10 years                                 7,504        7,601         6.27
Federal Home Loan Bank 
 stock                                          7,472        7,472         7.17
Federal Reserve Bank stock                      1,601        1,601         6.00
                                              -------      -------
                                             $215,516     $217,871         6.59%
                                              =======      =======         ====


                                                                             44






Securities Held for Investment                                         Weighted
  Maturity Distribution                     Amortized         Fair      average
December 31, 1997                                cost        value        yield
_______________________________________________________________________________
(in thousands) 

U.S. treasury and agencies 
  1 year or less                                 $209         $208         4.99%
  Over 1 through 5 years                        2,499        2,491         6.27
Mortgage-backed securities 
  1 year or less                               12,691       12,685         5.75
  Over 1 through 5 years                       14,829       15,020         7.05
  Over 5 through 10 years                       3,238        3,268         5.90
  Over 10 years                                 2,443        2,481         7.04
State and political subdivisions 
  1 year or less                                4,811        4,853         6.38
  Over 1 through 5 years                       16,827       17,689         6.25
  Over 5 through 10 years                      29,305       31,174         5.78
  Over 10 years                                11,670       12,222         5.36
Other 
  Over 1 through 5 years                          100          100         7.88
                                              -------      -------
                                              $98,622     $102,191         6.07%
                                              =======      =======         ====

At December 31, 1997 and 1996, securities with carrying values of approxi-
mately $186.4 million and $151.8 million, respectively, were pledged to secure
repurchase agreements, public and trust deposits and for other purposes as
required by law.  Amounts advanced under repurchase agreements represent
short-term borrowings and are reflected as liabilities in the consolidated
balance sheets. 

5.  LOANS RECEIVABLE 
The Company's lending activities are concentrated primarily in western Kentucky,
southern Illinois, northwestern Tennessee and southeastern Missouri.  The loan
portfolio is well diversified and consists of business loans extending across
many industry types, as well as loans to individuals.  As of December 31, 1997
and 1996, total loans to any group of customers engaged in similar activities
and having similar economic characteristics, as defined by standard industrial
classifications, did not exceed 10% of total loans, although the geographical
concentration is a necessary factor for regional banks. 












                                                                             45






Major classification of loans receivable are as follows: 

December 31,                                                  1997         1996
_______________________________________________________________________________
(in thousands) 

Commercial, financial and agricultural                    $119,924     $120,283
Real estate 
  Construction                                              24,157       29,933
  Residential mortgage                                     468,330      421,129
  Commercial mortgage                                      188,502      174,576
Consumer, net of unearned income of $1,410 and  
 $4,854 at December 31, 1997 and 1996                      298,724      289,653
Other                                                        2,070          855
                                                         ---------    ---------
                                                         1,101,707    1,036,429
Allowance for loan losses                                  (16,442)     (14,795)
                                                         ---------    ---------
                                                        $1,085,265   $1,021,634
                                                         =========    =========

The Company evaluates each customer's creditworthiness on a case by case basis.
The amount of collateral obtained, if deemed necessary by the Company upon
extension of credit, is based on management's credit evaluation of the borrower.
Collateral varies but may include accounts receivable, inventory, property,
plant and equipment, income producing commercial properties, real estate and
other property owned by the borrowers. 

Activity in the allowance for loan losses was as follows for the three-year
period ended December 31, 1997: 

Allowance for Loan Losses 
Year Ended December 31,                          1997         1996         1995
_______________________________________________________________________________
(in thousands) 

Balance at beginning of year                  $14,795      $13,371      $12,188
Allowance associated with loans acquired          ---          481          ---
Provision charged to expense                    5,041        2,664        2,167
Loans charged off                              (3,742)      (2,524)      (1,307)
Recoveries of loans 
 previously charged off                           348          803          323
                                               ------       ------       ------
Net loans charged off                          (3,394)      (1,721)        (984)
                                               ------       ------       ------
Balance at end of year                        $16,442      $14,795      $13,371
                                               ======       ======       ======

Nonaccrual and renegotiated loans totaled $8.4 million and $7.4 million at
December 31, 1997 and 1996, respectively.  Loans, except large groups of
smaller-balance homogeneous loans, for which the full collection of principal


                                                                             46






and interest is not probable, or a delay in payments is expected, are evaluated
for impairment.  The Company measures and reports impaired loans that are not
part of a homogenous pool of similar loans at either the present value of
expected future cash flows discounted at the loan's effective rate, the market
price of the loan, or fair value of the underlying collateral if the loan is
collateral dependent.  Information regarding impaired loans at December 31,
1997 and 1996 is as follows: 

Impaired Loans 
December 31,                                                  1997         1996
_______________________________________________________________________________
(in thousands) 

Recorded investment in impaired loans                       $6,300       $4,454
Less portion for which no allowance 
 for loan losses is allocated                                    0          325
                                                            ------       ------
Portion of impaired loan balance for 
 which an allowance for loan losses 
 is allocated                                               $6,300       $4,129
                                                            ======       ======
Portion of allowance for loan losses 
 allocated to the impaired loan balance                     $1,638       $1,142
                                                            ======       ======

Information regarding impaired loans is as follows for the years ended 
December 31, 1997 and 1996: 

Impaired Loans 
Year Ended December 31,                                       1997         1996
_______________________________________________________________________________
(in thousands) 

Average investment in impaired loans                        $5,176       $4,926
Interest income recognized on 
 impaired loans                                                572          488
Interest income recognized on 
 impaired loans on cash basis                                   38            0

Certain officers and directors of the Company and its subsidiaries and certain
corporations and individuals related to them are loan customers of the Company's
banks.  The activity of these loans during the years ended December 31, 1997 and
1996 is summarized below.  Such loans were made on substantially the same terms,
including interest rates and collateral, as those prevailing at the time for
comparable transactions with other customers.  These loans did not involve more
than the normal risk of collectibility. 







                                                                             47






Loans to Officers and Directors 
Year Ended December 31,                                       1997         1996
_______________________________________________________________________________
(in thousands) 

Balance at beginning of year                               $23,007      $13,445
Additions                                                      642        9,905
Repayments                                                    (438)        (743)
Changes in officer and director status                     (14,803)         400
                                                            ------       ------
Balance at end of year                                      $8,408      $23,007
                                                            ======       ======

6.  PREMISES AND EQUIPMENT 
A summary of premises and equipment is as follows: 

December 31,                                                  1997         1996
_______________________________________________________________________________
(in thousands) 

Land                                                        $3,528       $2,738
Buildings                                                   20,112       19,580
Equipment                                                   16,282       14,544
Leasehold improvements                                         994          994
                                                            ------       ------
                                                            40,916       37,856
Accumulated depreciation and amortization                  (20,606)     (18,480)
                                                            ------       ------
                                                           $20,310      $19,376
                                                            ======       ======

The amount of depreciation and amortization related to premises and equipment
that was charged to operating expenses in 1997, 1996 and 1995 was $2,439,843
$2,148,864 and $1,857,202 respectively. 

7.  DEPOSIT LIABILITIES 
The aggregate amount of time deposits, each with a minimum balance of $100,000,
was $105.6 million and $102.5 million at December 31, 1997 and 1996,
respectively.  Interest expense on time deposits over $100,000 was $6.4 million,
$5.3 million and $6.0 million for the years ended December 31, 1997, 1996 and
1995, respectively.  Also included in deposit liabilities were brokered time
deposits of $13.4 million and $15.5 million at December 31, 1997 and 1996,
respectively.  At December 31, 1997, the scheduled maturities of time deposits
were as follows: 









                                                                             48






Time Deposit Maturities 
For the years ending December 31, 
__________________________________________________________________ 
(in thousands) 

          1998                               $380,395
          1999                                151,931
          2000                                 57,677
          2001                                 12,258
          2002 and thereafter                   7,833
                                              -------
                                             $610,094
                                              =======

8.  SHORT-TERM BORROWINGS 
Federal funds purchased, repurchase agreements and U.S. treasury notes generally
represent borrowings with overnight maturities as do certain short-term advances
from the Federal Home Loan Bank (FHLB) of Cincinnati.  Information pertaining to
the subsidiary banks' short-term borrowings is summarized below: 

Short-term Borrowings                            1997         1996         1995
_______________________________________________________________________________
(dollars in thousands) 

Federal funds purchased 
  Average balance                             $21,125      $19,284      $13,414
  Year end balance                             26,824       21,525       15,100
  Highest month-end balance                    46,725       33,100       35,000
  Average interest rate                          5.69%        5.44%        6.07%
  Year end interest rate                         5.82%        6.40%        5.60%
Repurchase agreements 
  Average balance                             $27,273      $28,041      $25,794
  Year end balance                             33,810       28,415       23,869
  Highest month-end balance                    33,810       36,624       32,120
  Average interest rate                          4.69%        4.48%        4.64%
  Year end interest rate                         4.43%        4.74%        4.05%
Short-term FHLB advances 
  Average balance                             $48,382      $63,161      $46,733
  Year end balance                             50,800       79,400       54,500
  Highest month-end balance                    79,900       83,700       54,500
  Average interest rate                          5.72%        5.51%        6.19%
  Year end interest rate                         5.95%        5.54%        5.85%
U.S. treasury notes 
  Average balance                              $3,505       $1,973           $0
  Year end balance                              3,038        2,826            0
  Highest month-end balance                    11,828        4,899            0
  Average interest rate                          5.32%        5.06%          --
  Year end interest rate                         5.26%        5.16%          --

At December 31, 1997, the subsidiary banks had total lines-of-credit for Federal
funds purchased from unaffiliated banks of $55.0 million, of which $28.2 million
was undrawn and available, and total lines-of-credit for U.S. treasury notes of
$15.0 million, of which $11.9 million was undrawn and available. 
                                                                             49






9.  LONG-TERM BORROWINGS 
Information pertaining to the subsidiary banks' long-term borrowings is
summarized below: 

December 31,                                     1997         1996
__________________________________________________________________
(in thousands) 

Federal Home Loan Bank advances               $43,104      $14,013
                                               ======       ======

The subsidiary banks obtain various short-term and long-term advances from the
FHLB under Blanket Agreements for Advances and Security Agreements (Agreements).
The Agreements entitle the subsidiary banks to borrow funds from the FHLB to
fund mortgage loan programs and satisfy other funding needs.  At December 31,
1997, the subsidiary banks had total secured lines-of-credit from the FHLB of
$235.6 million, of which $141.7 million was undrawn and available.  Interest
rates on long-term advances at December 31, 1997 range from 5.10% to 8.10%.
Most all interest rates are variable and at December 31, 1997, no rates are
fixed for more than a one-year period.  FHLB advances are collateralized by the
banks' FHLB stock, other securities in the approximate amount of $9.5 million
and certain single-family first mortgage loans in the approximate amount of
$339.2 million.  As members of the FHLB system, the Company's subsidiary banks
must hold a minimum of FHLB stock equal to one percent of home mortgage related
assets.  Additional FHLB stock ownership is required as the level of advances
increases.  The subsidiary banks are in compliance with the FHLB stock ownership
requirements with a total required investment of $7.5 million at December 31,
1997.  The long-term advances provide for scheduled monthly payments but may be
prepaid at the option of the subsidiary banks with the payment of a premium. 

Annual minimum principal repayment requirements for long-term borrowings for the
years 1998 through 2002 are $1,040,459, $10,575,667, $20,504,617, $545,424 and
$3,574,931, respectively. 

10.  FINANCIAL INSTRUMENTS WITH OFF-BALANCE-SHEET RISK 
The Company is a party to financial instruments with off-balance-sheet risk in
the normal course of business to meet the financing needs of its customers.
These financial instruments include commitments to extend credit and standby
letters of credit.  The Company's exposure to credit loss in the event of
nonperformance by the other party to the financial instrument for commitments to
extend credit and standby letters of credit is represented by the contractual
amount of those instruments. 

Commitments to extend credit are agreements to lend to a customer as long as
there is no violation of any condition established in the contract.  Standby
letters of credit are conditional commitments issued by the Company to guarantee
the performance of a customer to a third party.  These off-balance-sheet
financial instruments generally have fixed expiration dates or other termination
clauses and may require payment of a fee.  Since some of the financial
instruments may expire without being drawn upon, the total amounts do not



                                                                             50






necessarily represent future cash requirements.  Commitments to extend credit
and standby letters of credit are subject to the same underwriting and collater-
alizing standards as on-balance-sheet items. 

Contractual commitments to extend credit and standby letters of credit at
December 31, 1997 and 1996 are summarized as follows: 

Financial Instruments with 
  Off-Balance-Sheet Risk 
December 31,                                                  1997         1996
_______________________________________________________________________________
(in thousands) 

Contractual commitments to extend credit                  $136,256     $126,331
Standby letters of credit                                   15,160       11,882

Of the total commitments to extend credit at December 31, 1997 and 1996, $0 and
$1,000, respectively, represent fixed-rate loan commitments. 

11.  EMPLOYEE BENEFITS 
The Company maintains a noncontributory Employee Stock Ownership Plan (ESOP)
and an employer matching 401(k) Plan.  The plans cover substantially all of
the Company's employees. 

Employer contributions to the ESOP are determined annually by the Company's
board of directors and were $260,000, $236,130 and $215,360 for the years ended
1997, 1996 and 1995, respectively.  The ESOP's investments include 230,990 and
300,363 shares of the Company's common stock at December 31, 1997 and 1996,
respectively.  The fair value of the Company's common stock owned by the ESOP
was $9.0 million and $7.3 million at December 31, 1997 and 1996, respectively.
Participants may elect to receive their benefits either in a lump-sum cash
amount or in shares of Company stock. 

Under the 401(k) Plan, participants may voluntarily contribute a percentage of
their salary through payroll deductions.  The Company is currently committed to
make contributions to the 401(k) Plan annually in an amount equal to 100% of the
first 3% contribution of each participant's base salary.  For the years ended
December 31, 1997, 1996 and 1995, the Company's required matching contribution
amounted to $302,496, $258,747 and $243,924, respectively.  Employees have
several investment options in which contributions may be invested. 

Post retirement benefits other than pensions are not provided for the Company's
employees.  Eligible retired employees may for a period of time maintain certain
health care benefits through policies of the Company at the retired employee's
expense.  There was no cost for employee benefits for retired employees in 1997,
1996 and 1995. 

12.  STOCKHOLDERS' EQUITY 

AUTHORIZED CAPITAL STOCK 
The Company has six million authorized shares of no par preferred stock and
thirty million authorized shares of no par, $0.7812 stated value common stock. 

                                                                             51






SHARE PURCHASE RIGHTS PLAN 
In January of 1995, the Board of Directors of the Company adopted a Share
Purchase Rights Plan and distributed a dividend of one Preferred Share Purchase
Right (Right) for each outstanding common share of the Company and for each
common share issued thereafter.  The Rights are generally designed to deter
coercive takeover tactics and to encourage all persons interested in acquiring
control of the Company to deal with each shareholder on a fair and equal basis.
Each Right trades in tandem with its respective share of common stock until the
occurrence of certain events, in which case it would separate from the common
stock and entitle the registered holder, subject to the terms of the Rights
Agreement, to purchase certain equity securities at a price below their market
value.  The Company has not issued any of the authorized no par preferred stock.

DIVIDEND REINVESTMENT AND STOCK PURCHASE PLAN 
In 1987, the Board of Directors of the Company adopted the Peoples First
Corporation Share Owner Dividend Reinvestment and Stock Purchase Plan (DRIP),
and amended the plan during 1994.  The DRIP provided for the issuance of
1,203,930 shares of authorized but previously unissued common stock.  On certain
investment dates, shares may be purchased with all or a portion of reinvested
dividends or with optional cash payments not to exceed $3,000.  The price of
shares purchased pursuant to the DRIP is the average market price reported by
NASDAQ for the last five trading days of the month preceding the dividend
payment month.  At December 31, 1997 and 1996, 694,930 shares and 756,032 shares
were reserved for issuance under the DRIP.  Shares issued under the DRIP totaled
61,102, 74,717 and 71,858 shares in 1997, 1996 and 1995, respectively.  After
the fourth quarter dividend cycle of 1997, the Board of Directors terminated the
DRIP. 

STOCK OPTION PLAN 
The Peoples First Corporation 1986 Stock Option Plan (Option Plan), as amended
in 1994, authorizes the granting to key employees of the Company incentive stock
options and nonqualified stock options to purchase common stock of the Company
at market value at the time the options are granted.  The Option Plan authorizes
grants of options to purchase up to ten percent of the Company's outstanding
common shares.  The authorized number of option shares at December 31, 1997 was
1,000,712 of which 150,675 is available for further grant under the Option Plan.
Shares sold under the Option Plan may be either unissued authorized shares or
shares reacquired by the Company.  Options granted are exercisable, subject to
vesting and other requirements, at varying times from the first through the
tenth year after the grant date.  Optionees may exercise their options with cash
or with shares of the Company's common stock. 

No compensation cost is recognized for stock option grants in the financial
statements.  Had the Company determined compensation cost based on the fair
value at the grant date for its stock options, the Company's net income and
net income per common share would have been the pro forma amounts indicated
below, considering only options granted in 1997, 1996 and 1995.  The full impact
of calculating compensation cost for stock options is not reflected because
compensation cost is reflected over the options' vesting period of up to ten
years and compensation cost for options granted prior to January 1, 1995 is not
considered. 


                                                                             52






Pro Forma Net Income 
Year Ended December 31,                          1997         1996         1995
_______________________________________________________________________________
(in thousands, except per share data) 

Net Income 
  As reported                                 $16,187      $17,164      $14,767
  Pro forma                                    16,120       17,103       14,749

Earnings per Common Share - Basic 
  As reported                                    1.62         1.75         1.54
  Pro forma                                      1.62         1.75         1.54
Earnings per Common Share - Assuming dilution 
  As reported                                    1.59         1.72         1.51
  Pro forma                                      1.59         1.72         1.51

The per share weighted-average fair value of stock options granted during 1997,
1996 and 1995 was $5.87, $4.92 and $5.03 on the date of grant using an
option-pricing model (Black Scholes) with the following weighted-average
assumptions: 1997 - 3.67% expected dividend yield, 24.72% expected volatility,
6.29% risk-free interest rate and ten year expected life; 1996 - 3.28% expected
dividend yield, 24.63% expected volatility, 6.16% risk-free interest rate and
eight year expected life; 1995 - 2.50% expected dividend yield, 23.21% expected
volatility, 5.53% risk-free interest rate and ten year expected life.
 
                                                                       Weighted
                                                                        average
                                                             Number    exercise
Stock Option Plan Activity                                of shares       price
_______________________________________________________________________________

Outstanding at December 31, 1994                           602,844        11.04
  Granted                                                   43,549        21.32
  Exercised                                               (114,281)        7.67
  Forfeited                                                (25,051)       13.93
                                                           -------
Outstanding at December 31, 1995                           507,061        12.53
  Granted                                                   82,974        23.22
  Exercised                                                (12,740)        8.59
  Forfeited                                                (10,304)       19.56
                                                           -------
Outstanding at December 31, 1996                           566,991       $14.06
  Granted                                                   15,000        26.13
  Exercised                                                (11,025)        9.70
  Forfeited                                                (13,891)       20.81
                                                           -------
Outstanding at December 31, 1997                           557,075       $14.31
                                                           =======

At December 31, 1997, the range of exercise prices and weighted-average
remaining contractual life of outstanding options was $6.40 - $26.13 and 4.5
years, respectively.  At December 31, 1997 and 1996, the number of shares
subject to options that were exercisable was 557,075 and 329,709, respectively. 
                                                                             53






RETAINED EARNINGS RESTRICTION 
In connection with the Company's savings bank subsidiary conversion from mutual
to stock form of ownership during 1991, the subsidiary restricted the amount of
retained earnings at that date by establishing a liquidation account equal to
$6,750,000 for the purpose of granting to eligible depositors a priority in the
event of future liquidation.  Only in such an event, an eligible depositor who
continues to maintain an account will be entitled to receive a distribution from
the liquidation account.  The total amount of the liquidation account decreases
in an amount proportionately corresponding to decreases in the deposit account
balances of the eligible account holders. 

DIVIDEND LIMITATIONS 
Payment of dividends by the subsidiary banks, which is the principal source of
funds for payment of cash dividends by the Company to its shareholders, are
subject to various national and/or state regulatory restrictions.  At December
31, 1997, total retained earnings of the Company's direct subsidiaries was
approximately $89.2 million, of which $28.7 million was available for payment of
dividends without approval by the applicable regulatory authority. 

REGULATORY CAPITAL 
The Company and its subsidiary banks are subject to various regulatory capital
requirements administered by the federal banking agencies.  Failure to meet
minimum capital requirements can initiate certain mandatory, and possibly
additional discretionary, actions by the regulators that, if undertaken, could
have a direct material effect on the Company's financial statements.  Under
capital adequacy guidelines and the regulatory framework for prompt corrective
action, the Company and its subsidiary banks must meet specific capital
guidelines that involve quantitative measures of the entity's assets,
liabilities and certain off-balance-sheet items calculated under regulatory
accounting practices.  The Company's and subsidiary banks' capital amounts and
classification are also subject to qualitative judgments by the regulators
about components, risk weightings, and other factors. 

Quantitative measures established by regulators to ensure capital adequacy
require the Company and subsidiary banks to maintain minimum amounts and ratios
of total and Tier I capital (as defined in the regulations) to risk-weighted
assets (as defined), and of Tier I capital to average assets (as defined).
Managements believes, as of December 31, 1997, that the Company and subsidiary
banks meet all capital adequacy requirements to which they are subject. 

As of December 31, 1997, the most recent notification from the Office of the
Comptroller of the Currency categorized the Company's only significant
subsidiary as well capitalized under the regulatory framework for prompt
corrective action.  To be categorized as well capitalized the Company must
maintain minimum total risk-based, Tier I risk-based and Tier I leverage ratios
as set forth in the following table.  There are no conditions or events since
those notifications that management believes have changed the institutions'
category. 





                                                                             54






The Company's and Peoples Bank's actual capital amounts and ratios are also
presented in the following table.  Totals of $0.0 and $3.7 million were
effectively deducted from capital for interest-rate risk in 1997 and 1996,
respectively. 

<TABLE>
<CAPTION>
<S>                                      <C>          <C>          <C>          <C>          <C>          <C>
                                                                                                       To Be Well
                                                                                                    Capitalized Under
                                                                             For Capital            Prompt Corrective
Regulatory Capital                                    Actual              Adequacy Purposes         Action Provisions
December 31, 1997 and 1996                     Amount        Ratio       Amount        Ratio       Amount        Ratio
______________________________________________________________________________________________________________________
(amounts in thousands) 

As of December 31, 1997: 
Total Capital to Risk Weighted Assets 
  Company                                    $154,040        14.61%     $84,335         8.00%    $105,419        10.00%
  Peoples Bank                                127,963        13.35       76,656         8.00       95,819        10.00
Tier I Capital to Risk Weighted Assets 
  Company                                     140,824        13.36       42,168         4.00       63,251         6.00
  Peoples Bank                                115,945        12.10       38,328         4.00       57,492         6.00
Tier I Capital to Average Assets 
  Company                                     140,824         9.56       58,916         4.00       73,645         5.00
  Peoples Bank                                115,945         8.95       51,830         4.00       64,788         5.00
As of December 31, 1996: 
Total Capital to Risk Weighted Assets 
  Company                                    $144,908        14.33%     $80,914         8.00%    $101,143        10.00%
  Peoples Bank                                120,572        13.77       70,045         8.00       87,556        10.00
Tier I Capital to Risk Weighted Assets 
  Company                                     132,986        13.15       40,457         4.00       60,686         6.00
  Peoples Bank                                109,920        12.55       35,022         4.00       52,534         6.00
Tier I Capital to Average Assets 
  Company                                     132,986         9.55       55,688         4.00       69,609         5.00
  Peoples Bank                                109,920         9.42       46,690         4.00       58,362         5.00

</TABLE>
13.  INCOME TAXES 
The current and deferred portions of income tax expense were as follows:

Year Ended December 31,                          1997         1996         1995
_______________________________________________________________________________
(in thousands) 

Current taxes                                  $8,903       $7,626       $6,762
Deferred taxes                                   (972)         352         (316)
                                                -----        -----        -----
Income tax expense                             $7,931       $7,978       $6,446
                                                =====        =====        =====








                                                                             55

The following is a reconciliation between the amount of income tax expense and
the amount of tax computed by applying the statutory Federal income tax rates: 

Year Ended December 31,                          1997         1996         1995
_______________________________________________________________________________
(in thousands) 

Tax computed at statutory rates                $8,598       $8,800       $7,425
Increase (decrease) in taxes 
  resulting from: 
    Tax-exempt income                          (1,162)      (1,266)      (1,328)
    Goodwill and other intangible 
     asset amortization                           343          308          290
    Other, net                                    152          136           59
                                                -----        -----        -----
Income tax expense                             $7,931       $7,978       $6,446
                                                =====        =====        =====

Not all temporary differences are accounted for through income tax expense on
the consolidated statements of income.  The tax effects of temporary
differences, that give rise to significant elements of the deferred tax assets
and deferred tax liabilities are as follows: 

December 31,                                                  1997         1996
_______________________________________________________________________________
(in thousands) 

Deferred tax assets: 
  Allowance for loan losses                                 $5,494       $4,871
  Deferred compensation                                        257          487
  Other                                                        184          111
                                                             -----        -----
                                                             5,935        5,469
Deferred tax liabilities: 
  Unrealized security gains                                   (139)         (35)
  Stock dividends on securities                               (885)        (675)
  Premises and equipment                                    (1,409)      (1,346)
  Other                                                       (512)        (470)
                                                             -----        -----
                                                            (2,945)      (2,526)
                                                             -----        -----
Net deferred tax assets                                     $2,990       $2,943
                                                             =====        =====

Deferred tax assets have not been reduced by a valuation allowance.  Based on
the weight of available evidence, management believes it is more likely than not
all of the deferred tax assets will be realized.  Neither current or deferred
taxes have been provided for approximately $3.3 million of income at December
31, 1997 and 1996 which represents allocations for bad debt deductions for tax
purposes only.  Under existing tax regulations, if the amounts that qualify for
Federal income tax purposes are later used for purposes other than bad debt
losses, including distributions in liquidation, such distributions will be
subject to Federal income tax at the then current corporate rate. 
                                                                             56






14.  CONTINGENCIES 

LEGAL PROCEEDINGS 
In the ordinary course of business, there are various legal proceedings pending
against the Company and its subsidiaries.  Management, after consultation with
legal counsel, is of the opinion that the ultimate resolution of these
proceedings will have no material effect on the consolidated financial condition
or results of operations of the Company. 

15.  SUPPLEMENTAL INCOME STATEMENT INFORMATION 
Details of noninterest income and noninterest expense are as follows: 
 
Noninterest Income 
Year Ended December 31,                          1997         1996         1995
_______________________________________________________________________________
(in thousands) 

Service fees on deposits                       $5,199       $4,119       $3,831
Net securities gains                                0            0          178
Trust department fees                           1,495        1,330        1,220
Insurance commissions                             507          578          664
Bankcard fees                                     695          648          565
Other income                                    2,652        1,860        1,486
                                               ------       ------       ------
                                              $10,548       $8,535       $7,944
                                               ======       ======       ======


Noninterest Expense 
Year Ended December 31,                          1997         1996         1995
_______________________________________________________________________________
(in thousands) 

Salaries                                      $15,096      $13,854      $13,302
Employee benefits                               2,634        2,500        2,411
Occupancy expense                               2,022        1,814        1,769
Equipment expense                               2,689        2,171        1,885
FDIC insurance expense                            208        1,637        1,338
Data processing expense                         3,080        2,590        2,245
Bankshare taxes                                 1,612        1,533        1,349
Goodwill and other intangible 
 asset amortization                             1,146          901          830
Legal, accounting and consulting fees           1,996          534          705
Other expense                                   8,797        7,309        6,324
                                               ------       ------       ------
                                              $39,280      $34,843      $32,158
                                               ======       ======       ======

16.  PARENT COMPANY FINANCIAL INFORMATION 
Following are condensed balance sheets of Peoples First Corporation (parent
company only) as of December 31, 1997 and 1996, and the related condensed
statements of income and cash flows for the years ended 1997, 1996 and 1995: 

                                                                             57






Condensed Balance Sheets 
December 31,                                     1997         1996
__________________________________________________________________ 
(in thousands) 

ASSETS 
Cash in subsidiary bank                        $6,305       $3,329
Investment in subsidiaries                    148,108      141,257
Other assets                                      562          320
                                              -------      -------
                                             $154,975     $144,906
                                              =======      =======
LIABILITIES AND STOCKHOLDERS' EQUITY 
Other liabilities                                $248         $357

Stockholders' equity 
Common stock                                    7,818        7,812
Surplus                                        70,627       69,691
Retained earnings                              74,754       66,762
Unrealized net gain on  
  securities held for sale                      1,528          284
                                              -------      -------
                                              154,727      144,549
                                              -------      -------
                                             $154,975     $144,906
                                              =======      =======

Common shares issued and outstanding           10,007        9,999

























                                                                             58






Condensed Statements of Income 
Year Ended December 31,                          1997         1996         1995
_______________________________________________________________________________
(in thousands) 

INCOME 
Dividends from subsidiaries                   $11,500       $9,100       $5,078
Other income                                        4            3            3
                                               ------       ------       ------
                                               11,504        9,103        5,081
EXPENSE 
Interest expense                                    6           11           44
Legal and accounting fees                         962          217          284
Other expense                                     380          390          378
                                               ------       ------       ------
                                                1,348          618          706
                                               ------       ------       ------
Income before income tax benefit 
  and equity in undistributed 
  income of subsidiaries                       10,156        8,485        4,375
Income tax benefit                                425          200          164
Income before equity in                        ------       ------       ------
  undistributed income 
  of subsidiaries                              10,581        8,685        4,539
Equity in undistributed 
  income of subsidiaries                        5,606        8,479       10,228
                                               ------       ------       ------
NET INCOME                                    $16,187      $17,164      $14,767
                                               ======       ======       ======
























                                                                             59






Condensed Statement of Cash Flows 
Year Ended December 31,                          1997         1996         1995
_______________________________________________________________________________
(in thousands) 

OPERATING ACTIVITIES 
Net income                                    $16,187      $17,164      $14,767
Adjustments to reconcile net income to net 
  cash provided by operating activities: 
    Equity in undistributed 
     income of subsidiaries                    (5,606)      (8,479)     (10,228)
    Amortization and other, net                  (282)         137         (271)
Net Cash Provided by                           ------       ------       ------
  Operating Activities                         10,299        8,822        4,268

FINANCING ACTIVITIES 
Repayments of notes payable                         0            0       (1,530)
Proceeds from issuance of common stock            401          696        1,418
Repurchase of common stock                       (884)      (1,882)           0
Cash dividends paid                            (6,840)      (5,104)      (3,851)
                                               ------       ------       ------
Net Cash Used by Financing Activities          (7,323)      (6,290)      (3,963)

Net Increase (Decrease) in Cash                 2,976        2,532          305
  and Cash Equivalents 
Cash and Cash Equivalents at 
  Beginning of Year                             3,329          797          492
                                               ------       ------       ------
Cash and Cash Equivalents at End of 
  Year                                         $6,305       $3,329         $797
                                               ======       ======       ======

SUPPLEMENTAL DISCLOSURES 
Cash paid for interest expense                     $0           $0          $53
Cash received for income taxes                   (244)        (558)        (345)

NONCASH INVESTING AND FINANCING TRANSACTIONS 
Dividends reinvested                            1,356        1,065          753


17.  DISCLOSURE ABOUT FAIR VALUE OF FINANCIAL INSTRUMENTS 
To value financial instruments for both on- and off-balance sheet assets and
liabilities where it is practicable to estimate that value, quoted market prices
are utilized by the Company where readily available.  If quoted market prices
are not available, fair values are based on estimates using present value and
other valuation techniques.  These techniques are significantly affected by the
assumptions used, including the discount rate and estimates of future cash
flows.  The calculated fair value estimates, therefore, cannot be substantiated
by comparison to independent markets and, in many cases, could not be realized
in immediate settlement of the instrument.  Certain financial instruments are
excluded from disclosure requirements.  Accordingly, the aggregate fair value
amounts presented are not intended to represent the underlying value of the
Company. 
                                                                             60






The following methods and assumptions were used in estimating the fair value for
financial instruments. 

CASH, DUE FROM BANKS, ACCRUED INTEREST RECEIVABLE, ACCRUED INTEREST PAYABLE
AND SHORT-TERM BORROWINGS 
The carrying amount reported for cash, due from banks, accrued interest receiv-
able, accrued interest payable and short-term borrowings approximates the fair
value for those assets and liabilities. 

DEBT AND EQUITY SECURITIES 
For securities held both for sale and investment, fair values are based on
quoted market prices or dealer quotes, if available.  If a quoted market price
is not available, fair value is estimated using quoted prices for similar
securities. 

LOANS  
Loan balances are assigned fair values based on a discounted cash flow analysis.
The discount rate is based on the treasury yield curve, with rate adjustments
for credit risk, liquidity, servicing costs and the prepayment uncertainty. 

DEPOSITS 
The fair value for demand deposits and interest-bearing deposits with no fixed
maturity date is considered to be equal to the amount payable on demand or
maturity date.  Time deposits are assigned fair values based on a discounted
cash flow analysis using discount rates which approximate interest rates
currently being offered on liabilities with comparable maturities. 

LONG-TERM BORROWINGS 
The fair value of long-term borrowings is based on a discounted cash flow
analysis with a discount rate based on current incremental borrowing rates for
similar types of arrangements. 

UNRECOGNIZED FINANCIAL INSTRUMENTS 
No fair value of loan commitments is presented since the Company does not
generally collect fees for loan commitments.  The fair value of guarantees and
letters of credit is based on equivalent fees that would be charged for similar
agreements and is less than $100,000 for 1997 and 1996. 
















                                                                             61






The book values and estimated fair values for financial instruments as of
December 31, 1997 and 1996 are reflected below. 

Financial Instruments 
December 31, 1997                                       Book value   Fair value
_______________________________________________________________________________ 
(in thousands) 

Financial Assets 
Cash and due from banks                                    $46,820      $46,820
Securities held for sale                                   217,871      217,871
Securities held for investment                              98,622      102,191
Loans held for sale                                          2,140        2,140
Loans receivable, net                                    1,085,265    1,136,838
Accrued interest receivable                                 10,910       10,910

Financial Liabilities 
Deposits                                                 1,176,841    1,183,277
Short-term borrowings                                      114,472      114,472
Long-term borrowings                                        43,104       43,157
Accrued interest payable                                     7,035        7,035


Financial Instruments 
December 31, 1996                                       Book value   Fair value
_______________________________________________________________________________ 
(in thousands) 

Financial Assets 
Cash and due from banks                                    $43,285      $43,285
Securities held for sale                                   182,352      182,352
Securities held for investment                             121,959      125,061
Loans held for sale                                          1,886        1,886
Loans receivable, net                                    1,021,634    1,063,034
Accrued interest receivable                                  9,850        9,850

Financial Liabilities 
Deposits                                                 1,115,253    1,118,860
Short-term borrowings                                      132,167      132,167
Long-term borrowings                                        14,013       13,854
Accrued interest payable                                     6,297        6,297



Item 9.  CHANGES IN AND DISAGREEMENTS WITH ACCOUNTANTS ON ACCOUNTING AND 
         FINANCIAL DISCLOSURE 

During the years ended December 31, 1997, 1996 and 1995 and in the subsequent
interim period, there has been no change in, or disagreements on accounting
matters with, the Company's independent auditor. 



                                                                             62






PART III 

Item 10.  DIRECTORS AND EXECUTIVE OFFICERS OF THE REGISTRANT 

The Company's Board of Directors consists of 17 members, divided into three
classes.  Directors are elected to three-year terms, and one class of directors
is elected at each annual meeting of shareholders. 

The Company's Articles of Incorporation provide that the number of its directors
will be fixed from time to time by the Board of Directors.  Between meetings of
shareholders held for the election of directors, the Board of Directors may
increase or decrease the number of directors last approved by the shareholders
by thirty percent (30%) or less.  Any vacant directorship, whether resulting
from an increase in the number of directors or otherwise, may be filled by the
affirmative vote of the majority of the Directors then in office, whether or not
a quorum of the Board of Directors exists at the time of the vote, for a term of
office continuing only until the next election of directors by the shareholders.
A decrease in the number of directors, however, will not have the effect of
shortening the term of any incumbent director. 

The following information is furnished as of December 31, 1997, with respect to
each of the Company's directors and nondirector executive officers.  Unless
otherwise indicated, each person has been engaged in the listed occupation for
the past five years. 

<TABLE>
<CAPTION>
<S>                                                   <C>          <C>          <C>

                                                                                   Shares of
                                                       Director or                    Common
Name, Age, Principal Occupation or Position,             Executive                     Stock
Other Directorships                                        Officer         Term Beneficially                Percentage
                                                             since         ends    Owned (1)              of Class (2)
DIRECTORS

Walter L. Apperson, 64                                        1992         2000        1,981                    *
President and Chief Executive Officer,
Murray Ledger and Times, a daily newspaper

Glen Berryman, 59                                             1996         1998        8,520                    *
Independent insurance agent,
Berryman Insurance 

William R. Dibert, 59                                         1989         2000       11,101                    *
President and Chief Executive Officer of Crounse
Corporation, a river transportation company

Joe Dick, 69                                                  1992         1998       30,599      (3)           *
Vice Chairman of the Corporation

R. E. Fairhurst, Jr., 50                                      1987         2000      114,943      (4)             1.10%
Owner of Fairhurst Realty, real estate broker

William Rowland Hancock, 49                                   1989         1998       42,154      (5)           *
President of Hancock Fabrics, Inc., a
fabric retailer
                                                                             63


                                                                                   Shares of
                                                       Director or                    Common
Name, Age, Principal Occupation or Position,             Executive                     Stock
Other Directorships                                        Officer         Term Beneficially                Percentage
                                                             since         ends    Owned (1)              of Class (2)
DIRECTORS - CONTINUED

James T. Holloway, 66 Consultant, Peoples Security            1994         1999       54,491      (6)           *
Finance Co.  Director, Southern Finance Co.

Dennis W. Kirtley, 53                                         1994         2000       92,277      (7)           *
President and Chief Executive Officer
of First Kentucky Federal Savings Bank

Allan B. Kleet, 48                                            1986         1999      122,346      (8)           *
Principal Accounting Officer
of the Corporation

Aubrey W. Lippert, 56                                         1983         2000      222,537      (9)             2.10%
Chairman of the Board, President, and Chief
Executive Officer of the Corporation;
Chairman of the Board and Chief Executive Officer
of PFNB

Joe Harry Metzger, 67                                         1983         1998       27,275     (10)           *
Vice President of R & M Grocery Co.

Jerry L. Page, 63                                             1983         1998      135,219     (11)             1.30%
Business Consultant

Rufus E. Pugh, 62                                             1987         1999        8,796     (12)           *
President of Golden Eagle Distributing, Inc.
a wholesale beer distributor

Neal H. Ramage, 58                                            1989         1999       48,537     (13)           *
President of Peoples First of Livingston County

Allan Rhodes, Jr., 46                                         1991         2000       19,841     (14)           *
President of Bluegrass Honda-BMW, Inc., an
automobile dealership

Mary Warren Sanders, 48                                       1992         1999       89,463     (15)           *
Certified Public Accountant with Michael D.
Pierce, CPA

Victor F. Speck, Jr., 61                                      1987         1999       42,813     (16)           *
President of Pico Properties, Real Estate
Investments
Former President of Welders Supply Company, Inc.,
a supplier of welding products and equipment



                                                                             64






                                                                                   Shares of
                                                       Director or                    Common
Name, Age, Principal Occupation or Position,             Executive                     Stock
Other Directorships                                        Officer         Term Beneficially                Percentage
                                                             since         ends    Owned (1)              of Class (2)

EXECUTIVE OFFICERS

George B. Shaw, 51                                            1993                     9,044     (17)           *
President of PFNB
Former President and Chief
Executive Officer of Bowling
Green Bank & Trust Co.

David A. Long, 36                                             1996                     7,679     (18)           *
Chief Operating Officer of PFNB
Former President and Chief Executive
Officer of Peoples First Marshall County.

</TABLE>
*    Represents 1% or less of the outstanding Common Stock. 

(1)  In the table above, the named person has sole voting and dispositive power
with respect to the reported shares unless otherwise indicated.  When joint
ownership is noted, the joint owners share voting and dispositive power with
respect to the shares.  When holdings of a family member are included but are
noted as being held "individually," the family member has sole voting and
investment powers with respect to the indicated shares.  Employees of the
Corporation or PFNB have voting but no investment power with respect to shares
held in the employee's ESOP account. 

(2)  Shares of Common Stock subject to currently exercisable options are deemed
outstanding for computing the percentage of class of the person holding such
options but are not deemed outstanding for computing the percentage of calss of
any other person. 

(3)  Includes 586 shares held jointly by Mr. Dick and his wife. 

(4)  Of the listed shares, Mr. Fairhurst's wife holds 6,112 shares individually,
and Mr. Fairhurst's sons hold 1,110 shares.  In addition, Mr. Fairhurst holds
67,788 shares as trustee for two trusts created by his father's estate, with
respect to which he has sole voting and investment power. 

(5)  Includes 9,529 shares held jointly by Mr. Hancock and his wife and 2,258
shares owned by Mr. Hancock's minor children. 

(6)  Includes 53,762 shares owned jointly by Mr. Holloway and his wife. 

(7)  Includes 72,188 shares held jointly by Mr. Kirtley and his wife, 1,312
shares held individually by Mr. Kirtley's wife and 3,744 shares held in Mr.
Kirtley's First Kentucky Federal ESOP account for which he has voting but no
investment power. 


                                                                             65





(8)  Includes 117,768 shares subject to currently exercisable stock options, 753
shares held individually by Mr. Kleet's wife, and 3,825 shares held in Mr.
Kleet's ESOP account.  Mr. Kleet disclaims beneficial ownership of the share
held by his wife. 

(9)  Includes 157,479 shares subject to currently exercisable stock options and
24,277 shares held in Mr. Lippert's ESOP account, and 210 shares held by Mr.
Lippert as custodian for his grandchildren. 

(10) Includes 23,889 shares held individually by Mr. Metzger's wife. 

(11) Includes 112,843 shares held in trust for the joint benefit of Mr. Page and
his wife. 

(12) Includes 2,210 shares held jointly by Mr. Pugh and his wife. 

(13) Includes 22,689 shares subject to currently exercisable stock options, 904
shares held in Mr. Ramage's ESOP account, and 24,755 shares held jointly by Mr.
Ramage and his wife. 

(14) Includes 19,378 shares held jointly by Mr. Rhodes and his wife. 

(15) Includes 9,908 shares held individually by Ms. Sanders' husband and 78,594
held in trust of which Ms. Sanders is beneficial owner with voting and
dispositive rights. 

(16) Includes 5,594 shares held individually by Mr. Speck's wife. 

(17) Includes 8,764 shares subject to currently exercisable stock options, and
49 shares held in Mr. Shaw's ESOP account. 

(18) Includes 5,478 shares subject to currently exercisable stock options and
1,594 shares held in Mr. Long's ESOP account. 

Section 16(a) Beneficial Ownership Reporting Compliance 

Section 16(a) of the Securities Exchange Act of 1934, as amended, requires
directors and officers of the Corporation and persons who beneficially own ten
percent or more of the Common Stock to file reports with the Securities and
Exchange Commission and the Corporation with respect to their beneficial
ownership of the Corporation's equity securities.  Based on its review of the
reports furnished to the Corporation during and with respect to 1997, the
Corporation believes that its directors, officers, and beneficial owners have
filed all required reports in a timely manner. 









                                                                             66






Item 11.  EXECUTIVE COMPENSATION 

Summary Compensation Table 

The following table sets forth information with respect to the compensation of
the Corporation's Chief Executive Officer and its most highly compensated
executive officers whose total annual salary and bonus for 1997 exceeded
$100,000. 

<TABLE>
<CAPTION>
<S>                         <C>          <C>          <C>          <C>          <C>          <C>

                            Annual Compensation
                                                                          Other
                                                                         Annual    Long-Term    All other
Name and Principal                                                    compensa- compensation    compensa-
Position                            Year       Salary        Bonus      tion(1)   options(#)      tion(2)

Aubrey W. Lippert                   1997     $290,000           $0           $0           $0       $8,977
Chairman of the Board,              1996      247,500       60,241            0       15,750        8,936
President and Chief                 1995      225,000       43,402            0       13,230        8,798
Executive Officer
of the Corporation
Chairman of the Board
and Chief Executive
Officer of PFNB

Allan B. Kleet                      1997     $181,385           $0           $0           $0       $8,977
Principal Accounting Officer        1996      143,774       34,994            0       33,600        8,490
of the Corporation                  1995      138,244       26,667            0        6,836        8,036

George B. Shaw                      1997     $136,000           $0           $0           $0       $7,590
President of PFNB                   1996      155,700            0            0            0        8,875
                                    1995      133,560            0            0        6,615        7,765

Dennis W. Kirtley                   1997     $115,224       $9,132      $14,200           $0       $6,431
President and Chief                 1996      112,224        9,132       14,200            0        5,827
Executive Officer of                1995      107,096        8,674       14,200            0        6,372
Peoples First, F.S.B.


</TABLE>
(1)  Does not include perquisites, the value of which in all cases did not
exceed 10% of the total of the named individual's salary and bonus.  Listed
amounts represent fees for service as directors of the Corporation and affiliate
Banks. 

(2)  The following amounts are included in the above table.  Contributions made
under the Employee Stock Ownership Plans in 1997 were Mr. Lippert $3,631; Mr.
Kleet $3,631; Mr. Shaw $3,086; Mr. Kirtley $2,615.  Contributions made under the
401(k) Plan in 1997 were: Mr. Lippert $4,800,; Mr. Kleet $4,800; Mr. Shaw
$4,080; Mr. Kirtley $3,457.  Life insurance premiums paid in 1997 were Mr.
Lippert $546; Mr. Kleet $546; Mr. Shaw $424; Mr. Kirtley $359. 



                                                                             67


Options/SAR Grants in Last Fiscal Year 



<TABLE>
<CAPTION>
<S>            <C>          <C>          <C>          <C>          <C>          <C>



Individual Grants:                                                      Potential realizable
                  Number of   % of total                                    value at assumed
                 securities total options/                             annual rates of stock
                 underlying SARs granted     Exercise                 price appreciation for
                   options/ to employees      or base   Expiration           option/SAR term
Name           SARs granted      in 1997        price         date         5.00%       10.00%
____________________________________________________________________________________________

Aubrey W. Lippert         0          ---          ---          ---          ---          ---

Allan B. Kleet            0          ---          ---          ---          ---          ---

George B. Shaw            0          ---          ---          ---          ---          ---

Dennis W. Kirtley         0          ---          ---          ---          ---          ---




Aggregated Otion/SAR Exercises in Last Fiscal Year 
and Fiscal Year End Option/SAR Values 


                                           Number of securities       Value of unexercised
                     Shares               underlying unexercised      in-the-money options
                acquired on        Value    options at year end            at year end
Name               exercise     realized  Exercisable Unexercisable Exercisable Unexercisable
____________________________________________________________________________________________

Aubrey W. Lippert         0          ---      157,479            0   $4,209,597           $0

Allan B. Kleet            0          ---      117,768            0    2,908,048            0

George B. Shaw            0          ---       23,980            0      497,458            0

Dennis W. Kirtley         0          ---            0            0            0            0




</TABLE>






                                                                             68


Director Compensation 

Nonemployee and employee directors other than Mr. Lippert and Mr. Kleet receive
an annual fee of $4,000 for their services.  Directors may elect to defer
directors fees until they leave the Board.  Deferred amount are deemed to have
been invested in either a 30 month certificate of deposit or (effective in May
1997) in Common Stock. 

Joe Dick, Vice Chairman and a director of the Corporation and the former
President, Chief Executive Officer and Chairman of Bank of Murray (now Peoples
First of Calloway County), provided advisory services with respect to marketing,
business development and oeprations to Peoples First of Calloway County from his
retirement as of January 1, 1993 through December 31, 1997.  For his consulting
services, Mr. Dick was paid $100,000 per year during the five-year term of a
consulting and non-competition agreement with the Corporation. 

Dennis W. Kirtley, a director of the Corporation and President of First Kentucky
Federal Savings Bank, entered into a three-year employment agreement with First
Kentucky as of March 10, 1994.  The employment agreement provided for Mr.
Kirtley's continued employment as President and Chief Executive Officer of First
Kentucky (which was merged with PFNB effective February 12, 1998) for three
years from that date at a base salary, wich was $115,224 in 1997.  The agreement
also provided for the payment of compensation and other benefits to Mr. Kirtley
upon termination of his employment in certain circumstances during the term of
the agreement. 




























                                                                             69






Item 12.  SECURITY OWNERSHIP OF CERTAIN BENEFICIAL OWNERS AND MANAGEMENT 

The following table sets forth, as of December 31, 1997, certain information
with respect to each person known to the Corporation to beneficially own five
percent or more of the outstanding Common Stock, as well as the aggregate number
of shares of Common Stock beneficially owned by all of the directors and
officers of the Corporation and executive officers of the Corporation's
affiliate banks (the "Banks") as a group. 

                                            Number of
                                           shares and
                                            nature of
                                           beneficial   Percentage
Name and Address                            ownership     of class
________________________________________________________________________________

Peoples First National                      1,147,544         11.5%
Bank and Trust Company                            (1)
100 S. 4th Street
P.O. Box 1920
Paducah, Kentucky  42001

All Directors and Officers
of the Corporation and Executive
Officers of the Banks as a
Group (29) persons                          1,165,406         11.2%
                                                  (2)          (3)

(1)  Includes 847,181 share PFNB holds in a Fiduciary capacity, as trustee,
executor or otherwise, including 693,024 shares held with sole voting and
dispositive power, and 154,157 shares held with shared voting and dispositive
power.  In addition, PFNB holds 300,363 shares as Trustee for the Corporation's
Employee Stock Ownership Plan (the "ESOP"), with respect to which PFNB has sole
dispositive power.  PFNB must vote 300,363 shares as specifically directed by
each ESOP member with respect to the shares allocated to that member's account.

(2)  The number of shares owned by individual directors and executive officers
of the Corproation and the nature of their beneficial ownership are set forth in
the table under "Item 10.  Directors and Executive Officers of the Registrant."
Other officers of the Corporation and executive officers of the Banks
beneficially own 114,562 shares. 

(3)  Shares of Common Stock subject to options that are or will become
exercisable within 60 days have been deemed outstanding for computing the
percentage of class of the group, whose members hold the options, but are not
deemed outstanding for computing the percentage of class of any other person. 







                                                                             70






Item 13.  CERTAIN RELATIONSAHIPS AND RELATED TRANSACTIONS. 

The Corporation's subsidiary PFNB has engaged, and may engage in the future, in
banking transactions in the ordinary course of business with various directors
and officers of the Corporation and the Banks and with many of their associates.
Loans to these parties have been made on substantially the same terms (including
interest rates and collateral) as those prevailing at the time for comparable
transactions with others, and in the opinion of management, such loans did not
involve more than normal risk of collectability, or present other unfavorable
features.  The aggegate balance of outstanding loans to directors and officers
of the Corporation and the Banks and certain corporations and individuals
related to such persons totaled $8.4 million or 5.4% of the Corporation's
stockholders' equity as of December 31, 1997. 



PART IV  

Item 14.  EXHIBITS, FINANCIAL STATEMENTS, SCHEDULES AND REPORTS ON FORM 8-K 

     (a)  (1)   Financial Statements are incorporated herein by reference 
                and listed in Item 8 hereof. 

          (2)   Financial Statement Schedules - None 

          (3)   List of Exhibits filed with original: 
 
          (3.1) Amended and Restated Articles of Incorporation of Peoples 
                First Corporation are incorporated herein by reference 
                to Exhibit 3(1) to the Registrant's Form 10-K for the year 
                ended December 31, 1994. 

          (3.2) Bylaws and Amendments of Peoples First Corporation are 
                incorporated herein by reference to Exhibit 3(b) to the 
                Registrant's Form 10-K for the year ended December 31, 1992. 
 
          (10.1)Peoples First Corporation 1986 Stock Option Plan is 
                incorporated herein by reference to Exhibit 10 to Form 
                10-Q/A for the quarter ended March 31, 1994. 

          (21)  Subsidiaries of Registrant. 
 
          (23)  Consent of KPMG Peat Marwick LLP, independent public 
                accountants. 

          (27)  Financial Data Schedules (SEC use only). 
 
          (99)  Undertakings. 
 




                                                                             71






     (b)  Reports on Form 8-K 

          Peoples First Corporation filed a current report on Form 
          8-K dated November 17, 1997 on November 24, 1997 to report the 
          execution of a definitive Plan and Agreement of Merger with 
          Union Planters Corporation 















































                                                                             72






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

                                                  PEOPLES FIRST CORPORATION 
 

                              Date:  03/11/98     /s/ Aubrey W. Lippert 
                                                  Aubrey W. Lippert 
                                                  President and Chairman 
                                                  of the Board 

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

Signature                          Title                              Date 
_____________________              ______________________             ________ 


/s/ Aubrey W. Lippert              President and Chairman             03/11/98 
Aubrey W. Lippert                  of the Board 


/s/ Allan B. Kleet                 Principal Accounting Officer       03/11/98 
Allan B. Kleet 
 

/s/ William R. Dibert              Director                           03/11/98 
William R. Dibert 


/s/ Joe Dick                       Director                           03/11/98 
Joe Dick 


/s/ Richard E. Fairhurst, Jr.      Director                           03/11/98 
Richard E. Fairhurst, Jr. 


/s/ William Rowland Hancock        Director                           03/11/98 
William Rowland Hancock 


/s/ Dennis W. Kirtley              Director                           03/11/98 
Dennis W. Kirtley 




                                                                             73






Signature                          Title                              Date 
_____________________              ______________________             ________ 


/s/ Jerry L. Page                  Director                           03/11/98 
Jerry L. Page 

/s/ Rufus E. Pugh                  Director                           03/11/98 
Rufus E. Pugh 


/s/ Victor F. Speck, Jr.           Director                           03/11/98 
Victor F. Speck, Jr. 








































                                                                             74