##### Table of Contents



SECURITIES AND EXCHANGE COMMISSION
 Washington, D.C. 20549
 FORM 10-Q
 þ
    
    QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15 (d) OF THE SECURITIES EXCHANGE ACT OF 1934
 For
the quarterly period ended September 30, 2005
 or
 o
    
    TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934
 Commission
File Number 0 - 30050
 PEOPLES FINANCIAL CORPORATION
  Mississippi
    
    64-0709834(State or other jurisdiction of
incorporation or organization)
    
    (I.R.S. Employer Identification No.)
 Lameuse and Howard Avenues, Biloxi, Mississippi
    
    39533(Address of principal executive offices)
    
    (Zip Code)
 
  þ o
 o þ
 o þ




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TABLE OF CONTENTS  PART IItem 2  Managements Discussion and Analysis of Financial Condition and Results of OperationsItem 4: Controls and ProceduresPART IIItem 5  Other InformationItem 6  Exhibits and Reports on Form 8-KSIGNATURESConsent of Independent Registered Public Accounting FirmCertification of CEO Pursuant to Section 302Certification of CFO Pursuant to Section 302Certification of CEO Pursuant to 18 U.S.C. Section 1350Certification of CFO Pursuant to 18 U.S.C. Section 1350    Table of Contents  
      September 30, December 31, and September 30,
    
    2005
    
    
    2004
    
    
    2004AssetsCash and due from banks
    
    $
    58,454,381
    
    
    $
    32,724,625
    
    
    $
    47,911,793Federal funds sold
    
    
    97,000,000Held to maturity securities, market value of$41,920,000 - September 30, 2005;$6,698,000 - December 31, 2004;$3,078,000 - September 30, 2004
    
    
    41,804,453
    
    
    
    6,587,375
    
    
    
    2,944,232Available for sale securities, at market value
    
    
    191,961,031
    
    
    
    173,030,808
    
    
    
    210,686,836Federal Home Loan Bank Stock, at cost
    
    
    1,432,800
    
    
    
    1,401,900
    
    
    
    1,395,200Loans
    
    
    347,081,539
    
    
    
    334,193,124
    
    
    
    324,438,772Less: Allowance for loan losses
    
    
    11,015,042
    
    
    
    6,569,614
    
    
    
    6,593,339Loans, net
    
    
    336,066,497
    
    
    
    327,623,510
    
    
    
    317,845,433Bank premises and equipment, net of
accumulated depreciation of
$18,304,000 -
September 30, 2005; $17,174,000 - December
31, 2004; and $16,780,000 - September
30, 2004
    
    
    17,749,847
    
    
    
    18,018,504
    
    
    
    16,621,465Other real estate
    
    
    120,956
    
    
    
    168,091
    
    
    
    335,968Accrued interest receivable
    
    
    3,982,223
    
    
    
    2,745,235
    
    
    
    2,750,455Other assets
    
    
    18,736,639
    
    
    
    15,141,101
    
    
    
    17,044,290Total assets
    
    $
    767,308,827
    
    
    $
    577,441,149
    
    
    $
    617,535,672




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##### Table of Contents



September 30, December 31, and September 30,
    
    2005
    
    
    2004
    
    
    2004Liabilities & Shareholders EquityLiabilities:Deposits:Demand, non-interest bearing
    
    $
    147,796,135
    
    
    $
    89,529,270
    
    
    $
    96,794,637Savings and demand, interest bearing
    
    
    248,024,104
    
    
    
    180,464,256
    
    
    
    197,338,514Time, $100,000 or more
    
    
    49,598,212
    
    
    
    51,948,077
    
    
    
    60,448,594Other time deposits
    
    
    60,753,503
    
    
    
    67,249,927
    
    
    
    64,140,656Total deposits
    
    
    506,171,954
    
    
    
    389,191,530
    
    
    
    418,722,401Federal funds purchased and securities
sold under agreements to repurchase
    
    
    159,090,166
    
    
    
    87,277,125
    
    
    
    98,221,499Borrowings from Federal Home Loan Bank
    
    
    7,359,080
    
    
    
    7,202,970
    
    
    
    7,201,167Notes payable
    
    
    
    
    
    
    1,239
    
    
    
    4,183Other liabilities
    
    
    7,465,071
    
    
    
    7,966,852
    
    
    
    7,067,223Total liabilities
    
    
    680,086,271
    
    
    
    491,639,716
    
    
    
    531,216,473Shareholders Equity:Common Stock, $1 par value, 15,000,000
shares authorized, 5,549,128
shares issued and
outstanding at September 30, 2005,
5,555,419
shares issued and outstanding at December
31, 2004 and 5,555,419 shares
issued and
outstanding at September 30, 2004
    
    
    5,549,128
    
    
    
    5,555,419
    
    
    
    5,555,419Surplus
    
    
    65,780,254
    
    
    
    65,780,254
    
    
    
    65,780,254Undivided profits
    
    
    17,522,402
    
    
    
    15,391,524
    
    
    
    15,081,064Accumulated other comprehensive income
    
    
    (1,629,228
    )
    
    
    (925,764
    )
    
    
    (97,538
    )Total shareholders equity
    
    
    87,222,556
    
    
    
    85,801,433
    
    
    
    86,319,199Total liabilities and shareholders equity
    
    $
    767,308,827
    
    
    $
    577,441,149
    
    
    $
    617,535,672




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##### Table of Contents



For The Quarters Ended September 30,
    
    
    For The Nine Months Ended September 30,2005
    
    
    2004
    
    
    2005
    
    
    2004Interest income:Interest and fees on loans
    
    $
    5,661,300
    
    
    $
    4,403,970
    
    
    $
    16,742,141
    
    
    $
    12,567,666Interest and dividends on securities:U. S. Treasury
    
    
    702,176
    
    
    
    351,134
    
    
    
    1,755,843
    
    
    
    972,783U. S. Government agencies and
corporations
    
    
    1,170,691
    
    
    
    1,196,517
    
    
    
    3,266,360
    
    
    
    3,777,752States and political subdivisions
    
    
    214,543
    
    
    
    149,105
    
    
    
    624,012
    
    
    
    365,055Other investments
    
    
    16,061
    
    
    
    54,160
    
    
    
    151,344
    
    
    
    177,775Interest on federal funds sold
    
    
    220,318
    
    
    
    35,161
    
    
    
    393,254
    
    
    
    56,088Total interest income
    
    
    7,985,089
    
    
    
    6,190,047
    
    
    
    22,932,954
    
    
    
    17,917,119Interest expense:Time deposits of $100,000 or more
    
    
    370,665
    
    
    
    229,412
    
    
    
    879,204
    
    
    
    592,371Other deposits
    
    
    1,084,360
    
    
    
    717,852
    
    
    
    2,831,473
    
    
    
    2,021,141Borrowing from Federal Home Loan
Bank
    
    
    109,336
    
    
    
    108,276
    
    
    
    330,276
    
    
    
    334,663Federal funds purchased and
securities sold under
agreements to repurchase
    
    
    519,107
    
    
    
    264,112
    
    
    
    1,268,989
    
    
    
    745,757Total interest expense
    
    
    2,083,468
    
    
    
    1,319,652
    
    
    
    5,309,942
    
    
    
    3,693,932Net interest income
    
    
    5,901,621
    
    
    
    4,870,395
    
    
    
    17,623,012
    
    
    
    14,223,187Provision for losses on loans
    
    
    5,103,000
    
    
    
    61,000
    
    
    
    3,590,000
    
    
    
    424,000Net interest income after provision
for losses on loans
    
    
    798,621
    
    
    
    4,809,395
    
    
    
    14,033,012
    
    
    
    13,799,187Other operating income:Trust department income and fees
    
    
    343,613
    
    
    
    328,945
    
    
    
    1,057,904
    
    
    
    1,079,125Service charges on deposit accounts
    
    
    1,136,682
    
    
    
    1,406,102
    
    
    
    3,862,791
    
    
    
    4,410,645Other service charges, commissions
and fees
    
    
    55,263
    
    
    
    71,145
    
    
    
    219,630
    
    
    
    216,422Gain on sale of banking premises
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    1,270,697Loss on sale of securities
    
    
    
    
    
    
    
    
    
    
    (442,539
    )
    
    
    (129,950
    )Other income
    
    
    205,619
    
    
    
    214,059
    
    
    
    680,188
    
    
    
    902,583Total other operating income
    
    $
    1,741,177
    
    
    $
    2,020,251
    
    
    $
    5,377,974
    
    
    $
    7,749,522




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##### Table of Contents



For The Quarters Ended September 30,
    
    
    For The Nine Months Ended September 30,2005
    
    
    2004
    
    
    2005
    
    
    2004Other operating expense:Salaries and employee benefits
    
    $
    2,910,696
    
    
    $
    2,848,598
    
    
    $
    8,566,547
    
    
    $
    8,454,507Net occupancy
    
    
    377,987
    
    
    
    381,399
    
    
    
    1,073,967
    
    
    
    1,063,583Equipment rentals, depreciation and
maintenance
    
    
    598,857
    
    
    
    509,658
    
    
    
    1,940,465
    
    
    
    1,762,753Other expense
    
    
    1,327,683
    
    
    
    1,146,871
    
    
    
    3,836,086
    
    
    
    3,971,563Total other operating expense
    
    
    5,215,223
    
    
    
    4,886,526
    
    
    
    15,417,065
    
    
    
    15,252,406Income (loss) before income taxes and
extraordinary gain
    
    
    (2,675,425
    )
    
    
    1,943,120
    
    
    
    3,993,921
    
    
    
    6,296,303Income taxes
    
    
    (908,020
    )
    
    
    517,700
    
    
    
    1,179,980
    
    
    
    1,812,700Income (loss)before extraordinary gain
    
    
    (1,767,405
    )
    
    
    1,425,420
    
    
    
    2,813,941
    
    
    
    4,483,603Extraordinary gain, net of taxes
    
    
    
    
    
    
    
    
    
    
    538,000Net
Income (Loss)
    
    $
    (1,767,405
    )
    
    $
    1,425,420
    
    
    $
    3,351,941
    
    
    $
    4,483,603




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##### Table of Contents



Accumu-Unearned
    
    
    lated Other
    
    
    Compre-# of
    
    
    Common
    
    
    
    
    
    
    
    
    
    
    Compensa-
    
    
    Comprehen-
    
    
    hensiveShares
    
    
    Stock
    
    
    Surplus
    
    
    Undivided Profits
    
    
    tion
    
    
    sive Income
    
    
    Income
    
    
    TotalBalance, January
1, 2004
    
    
    5,557,379
    
    
    $
    5,557,379
    
    
    $
    65,780,254
    
    
    $
    11,574,074
    
    
    $
    (94,899
    )
    
    $
    687,141
    
    
    
    
    
    
    $
    83,503,949Comprehensive
Income:Net income
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    4,483,603
    
    
    
    
    
    
    
    
    
    
    $
    4,483,603
    
    
    
    4,483,603Net unrealized loss
on available for
sale securities,
net of tax
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    (251,701
    )
    
    
    (251,701
    )
    
    
    (251,701
    )Reclassification adjustment
for available for
sale securities
sold in current
year,
net of tax
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    (532,978
    )
    
    
    (532,978
    )
    
    
    (532,978
    )Total
comprehensive
income
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    $
    3,698,924Allocation of ESOP
shares
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    94,899
    
    
    
    
    
    
    
    
    
    
    
    94,899Retirement of stock
    
    
    (1,960
    )
    
    
    (1,960
    )
    
    
    
    
    
    
    (32,022
    )
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    (33,982
    )Cash dividends,
($ .17 per share)
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    (944,591
    )
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    (944,591
    )Balance,
September 30, 2004
    
    
    5,555,419
    
    
    $
    5,555,419
    
    
    $
    65,780,254
    
    
    $
    15,081,064
    
    
    $
    
    
    
    $
    (97,538
    )
    
    
    
    
    
    $
    86,319,199




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##### Table of Contents



Accumu-Unearned
    
    
    lated Other
    
    
    Compre-# of
    
    
    Common
    
    
    
    
    
    
    Undivided
    
    
    Compensa-
    
    
    Comprehen-
    
    
    hensiveShares
    
    
    Stock
    
    
    Surplus
    
    
    Profits
    
    
    tion
    
    
    sive Income
    
    
    Income
    
    
    TotalBalance, January 1,
2005
    
    
    5,555,419
    
    
    $
    5,555,419
    
    
    $
    65,780,254
    
    
    $
    15,391,524
    
    
    $
    
    
    
    $
    (925,764
    )
    
    
    
    
    
    $
    85,801,433Comprehensive
Income:Net income
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    3,351,941
    
    
    
    
    
    
    
    
    
    
    $
    3,351,941
    
    
    
    3,351,941Net unrealized loss
on available for
sale securities,
net of tax
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    (937,779
    )
    
    
    (937,779
    )
    
    
    (937,779
    )Reclassification
adjustment for
available for sale
securities sold or
liquidated in
current year, net
of tax
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    234,315
    
    
    
    234,315
    
    
    
    234,315Total
comprehensive
income
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    $
    2,648,477Retirement of stock
    
    
    (6,291
    )
    
    
    (6,291
    )
    
    
    
    
    
    
    (111,636
    )
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    (117,927
    )Effect of
retirement of stock
on accrued
dividends
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    399
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    399Cash dividends,
($ .20 per share)
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    (1,109,826
    )
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    (1,109,826
    )Balance,
September 30, 2005
    
    
    5,549,128
    
    
    $
    5,549,128
    
    
    $
    65,780,254
    
    
    $
    17,522,402
    
    
    $
    
    
    
    $
    (1,629,228
    )
    
    
    
    
    
    $
    87,222,556




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##### Table of Contents



For The Nine Months Ended September 30,
    
    2005
    
    
    2004Cash flows from operating activities:Net income
    
    $
    3,351,941
    
    
    $
    4,483,603Adjustments to reconcile net income to net cash
provided by operating activities:Loss on sale of available for sale securities
    
    
    442,539
    
    
    
    129,950Gain on sales of other real estate
    
    
    (366,865
    )
    
    
    (100,750
    )Gain on sale of bank premises
    
    
    
    
    
    
    (1,270,697
    )Depreciation and amortization
    
    
    1,173,148
    
    
    
    1,052,000Provision for losses on loans
    
    
    3,590,000
    
    
    
    424,000Provision for losses on other real estate
    
    
    7,000
    
    
    
    178,130Changes in assets and liabilities:Accrued interest receivable
    
    
    (1,236,988
    )
    
    
    345,547Other assets
    
    
    (1,340,944
    )
    
    
    (2,819,466
    )Other liabilities
    
    
    (1,033,093
    )
    
    
    1,067,285Net cash provided by operating activities
    
    
    4,586,738
    
    
    
    3,489,602Cash flows from investing activities:Proceeds from maturities and calls of held to
maturity securities
    
    
    4,435,000
    
    
    
    1,408,622Investment in held to maturity securities
    
    
    (39,652,078
    )Proceeds from maturities, sales and calls of
available for sale securities
    
    
    129,641,255
    
    
    
    112,252,864Investment in available for sale securities
    
    
    (150,083,264
    )
    
    
    (116,758,457
    )(Investment in) redemption of Federal Home Loan Bank
stock
    
    
    (30,900
    )
    
    
    579,000Loans, net
    
    
    (12,120,987
    )
    
    
    (26,140,868
    )Proceeds from sale of bank premises
    
    
    
    
    
    
    2,837,500Acquisition of premises and equipment
    
    
    (904,491
    )
    
    
    (1,287,764
    )Proceeds from sales of other real estate
    
    
    495,000
    
    
    
    1,074,000Federal funds sold
    
    
    (97,000,000
    )Other assets
    
    
    (357,524
    )
    
    
    (343,132
    )Net cash used in investing activities
    
    $
    (165,577,989
    )
    
    $
    (26,378,235
    )




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##### Table of Contents



For The Nine Months Ended September 30,
    
    2005
    
    
    2004Cash flows from financing activities:Demand and savings deposits, net increase
    
    $
    125,826,713
    
    
    $
    43,079,629Time deposits, net increase (decrease)
    
    
    (8,846,289
    )
    
    
    2,369,544Principal payments on notes
    
    
    (1,239
    )
    
    
    (11,153
    )Cash dividends
    
    
    (2,109,402
    )
    
    
    (1,778,198
    )Retirement of stock
    
    
    (117,927
    )
    
    
    (33,982
    )Federal funds purchased and securities sold under
agreements to repurchase
    
    
    71,813,041
    
    
    
    3,182,238Repayments to Federal Home Loan Bank
    
    
    (133,048
    )
    
    
    (30,123,630
    )Borrowings from Federal Home Loan Bank
    
    
    289,158
    
    
    
    20,254,949Net cash provided by financing activities
    
    
    186,721,007
    
    
    
    36,939,397Net increase in cash and cash equivalents
    
    
    25,729,756
    
    
    
    14,050,764Cash and cash equivalents, beginning of period
    
    
    32,724,625
    
    
    
    33,861,029Cash and cash equivalents, end of period
    
    $
    58,454,381
    
    
    $
    47,911,793




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##### Table of Contents



For the Nine
    
    
    For the Year
    
    
    For the NineMonths Ended
    
    
    Ended
    
    
    Months EndedSeptember 30,
    
    
    December 31,
    
    
    September 30,2005
    
    
    2004
    
    
    2004Balance, beginning of
period
    
    $
    6,569,614
    
    
    $
    6,398,694
    
    
    $
    6,398,694Recoveries
    
    
    1,220,363
    
    
    
    493,920
    
    
    
    447,255Loans charged off
    
    
    (364,935
    )
    
    
    (771,000
    )
    
    
    (676,610
    )Provision for loan losses
    
    
    3,590,000
    
    
    
    448,000
    
    
    
    424,000Balance, end of period
    
    $
    11,015,042
    
    
    $
    6,569,614
    
    
    $
    6,593,339




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##### Table of Contents



Less Than TwelveMonths
    
    
    Over Twelve Months
    
    
    TotalGross
    
    
    
    
    
    
    Gross
    
    
    
    
    
    
    GrossFair
    
    
    Unreal-
    
    
    Fair
    
    
    Unreal-
    
    
    Fair
    
    
    Unreal-Value
    
    
    ized Loss
    
    
    Value
    
    
    ized Loss
    
    
    Value
    
    
    ized LossU. S. Treasury
    
    $
    69,368
    
    
    $
    (308
    )
    
    $
    3,955
    
    
    $
    (44
    )
    
    $
    73,323
    
    
    $
    (352
    )U. S. Govt. Agencies
    
    
    104,542
    
    
    
    (904
    )
    
    
    17,516
    
    
    
    (478
    )
    
    
    122,058
    
    
    
    (1,382
    )States and
political
subdivisions
    
    
    3,079
    
    
    
    (28
    )
    
    
    3,301
    
    
    
    (84
    )
    
    
    6,380
    
    
    
    (112
    )FHLMC preferred
stock
    
    
    
    
    
    
    
    
    
    
    2,141
    
    
    
    (934
    )
    
    
    2,141
    
    
    
    (934
    )Total
    
    $
    176,989
    
    
    $
    (1,240
    )
    
    $
    26,913
    
    
    $
    (1,540
    )
    
    $
    203,902
    
    
    $
    (2,780
    )




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Forward-Looking Information
  Overview




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##### Table of Contents



For the nine months ended September 30,
    
    2005
    
    
    2004Net income per share
    
    $
    0.60
    
    
    $
    0.81Book value per share
    
    $
    15.72
    
    
    $
    15.61Return on average total assets
    
    
    .66
    %
    
    
    .99
    %Return on average shareholders equity
    
    
    5.17
    %
    
    
    7.02
    %Allowance for loan losses as a % of loans,
net of unearned discount
    
    
    3.16
    %
    
    
    2.04
    %
 Financial Condition
 Federal Funds Sold
  Held to Maturity Securities
   September 30,
    
    2005


    

    2004Amount
    
    
    %
    
    
    Amount
    
    
    %U. S. Treasury securities
    
    $
    35,654,125
    
    
    
    85
    %
    
    $States and political
subdivisions
    
    
    6,150,328
    
    
    
    15
    %
    

    
    2,944,232
    
    
    
    100
    %Totals
    
    $
    41,804,453
    
    
    
    100
    %
    
    $
    2,944,232
    
    
    
    100
    %




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##### Table of Contents



Available for Sale Securities
   September 30,
    

    2005


    
    2004Amount
    
    
    %
    
    
    Amount
    
    
    %U. S. Treasury securities
    
    $
    50,572,436
    
    
    
    26
    %
    
    $
    72,083,380
    
    
    
    34
    %U. S. Government agencies
    
    
    124,059,226
    
    
    
    65
    %
    
    
    121,455,359
    
    
    
    58
    %States and political
subdivisions
    
    
    14,372,073
    
    
    
    7
    %
    
    
    13,571,474
    
    
    
    6
    %Other securities
    
    
    2,957,297
    
    
    
    2
    %
    
    
    3,576,624
    
    
    
    2
    %Totals
    
    $
    191,961,031
    
    
    
    100
    %
    
    $
    210,686,836
    
    
    
    100
    %
 Loans
  Bank Premises and Equipment
  Accrued Interest Receivable
  Other Real Estate




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##### Table of Contents



Other Assets
  Deposits
  Federal Funds Purchased and Securities Sold Under Agreements to Repurchase
  Shareholders Equity and Capital Adequacy
  RESULTS OF OPERATIONS
 Net Interest Income
  Nine Months Ended September 30, (In thousands, except percentages)
    
    2005
    
    
    2004Total interest income (1)
    
    $
    23,254
    
    
    $
    18,105Total interest expense
    
    
    5,310
    
    
    
    3,694Net interest earnings
    
    $
    17,944
    
    
    $
    14,411Net yield on interest earning assets (2)
    
    
    4.16
    %
    
    
    3.68
    %
 
 (1)
    
    All interest earned is reported on a taxable equivalent basis using a tax rate of 34% in
2005 and 2004.(2)
    
    Interest income in 2005 included $900,000 received in 2005
for prior years. See Note 10. Net
yield would have been 3.95% without this interest.




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##### Table of Contents



Attributable To:For the Nine
        
    For the NineMonths
    
    
    MonthsEnded
    
    
    EndedSeptember
    
    
    September
    
    
    Increase30, 2005
    
    
    30, 2004
    
    
    (Decrease)
    
    
    Volume
    
    
    Rate
    
    
    Rate/ VolumeINTEREST
INCOME: (1)Loans (2)
    
    $
    16,742
    
    
    $
    12,568
    
    
    $
    4,174
    
    
    $
    1,031
    
    
    $
    2,905
    
    
    $
    238Federal funds sold
    
    
    393
    
    
    
    56
    
    
    
    337
    
    
    
    112
    
    
    
    75
    
    
    
    150Held to maturity:Taxable securities
    
    
    198
    
    
    
    19
    
    
    
    179
    
    
    
    297
    
    
    
    (7
    )
    
    
    (111
    )Non-taxable
securities
    
    
    317
    
    
    
    183
    
    
    
    134
    
    
    
    192
    
    
    
    (28
    )
    
    
    (30
    )Available for sale:Taxable securities
    
    
    4,824
    
    
    
    4,731
    
    
    
    93
    
    
    
    (39
    )
    
    
    133
    
    
    
    (1
    )Non-taxable
securities
    
    
    629
    
    
    
    370
    
    
    
    259
    
    
    
    191
    
    
    
    45
    
    
    
    23Other securities
    
    
    151
    
    
    
    178
    
    
    
    (27
    )
    
    
    (39
    )
    
    
    16
    
    
    
    (4
    )Total
    
    $
    23,254
    
    
    $
    18,105
    
    
    $
    5,149
    
    
    $
    1,745
    
    
    $
    3,139
    
    
    $
    265INTEREST EXPENSE:Savings and
negotiable interest
bearing deposits
    
    $
    1,646
    
    
    $
    1,065
    
    
    $
    581
    
    
    $
    (30
    )
    
    $
    629
    
    
    $
    (18
    )Time deposits
    
    
    2,065
    
    
    
    1,549
    
    
    
    516
    
    
    
    (131
    )
    
    
    707
    
    
    
    (60
    )Borrowings from FHLB
    
    
    330
    
    
    
    334
    
    
    
    (4
    )
    
    
    (42
    )
    
    
    44
    
    
    
    (6
    )Federal funds
purchased and
securities sold
under agreements to
repurchase
    
    
    1,269
    
    
    
    746
    
    
    
    523
    
    
    
    210
    
    
    
    244
    
    
    
    69Total
    
    $
    5,310
    
    
    $
    3,694
    
    
    $
    1,616
    
    
    $
    7
    
    
    $
    1,624
    
    
    $
    (15
    )
 
 (1)
    
    All interest earned is reported on a taxable equivalent basis using a tax rate of 34% in 2005
and 2004.(2)
    
    Loan fees are included in these figures. Includes nonaccrual loans.




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##### Table of Contents



Provision for Loan Losses
     Service Charges on Deposit Accounts
  Gain On Sale of Bank Premises
  Loss on Sale of Securities
  Page 20




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##### Table of Contents



Other Income
  Other Expense
  Extraordinary Gain
  LIQUIDITY
    
 Item 4: Controls and Procedures
   Page 21




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Exhibit 23    Consent of Independent Registered Public Accounting FirmExhibit 31.1 Certification of Chief Executive Officer Pursuant to Section
302 of the Sarbanes-Oxley Act of 2002Exhibit 31.2 Certification Chief Financial Officer Pursuant to Section 302
of the Sarbanes-Oxley Act of 2002Exhibit 32.1 Certification of Chief Executive Officer Pursuant to 18
U.S.C. ss.1350Exhibit 32.2 Certification of Chief Financial Officer Pursuant to 18
U.S.C. ss. 1350.
   Page 22




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PEOPLES FINANCIAL CORPORATION(Registrant)Date: November 8, 2005By:
    
    /s/ Chevis C. SwetmanChevis C. SwetmanChairman, President and Chief Executive OfficerDate: November 8, 2005By:
    
    /s/ Lauri A. WoodLauri A. WoodChief Financial Officer and Controller(principal financial and accounting officer)
 Page 23