SECURITIES AND EXCHANGE COMMISSION
                             WASHINGTON, D.C. 20549

                                    FORM 10-Q

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

 For the Quarterly Period Ended                                  Commission file
         June 30, 2001                                              000-20616

                          PEOPLES BANCORPORATION, INC.
             (Exact name of registrant as specified in its charter)

            South Carolina                                 57-09581843
 (State or other jurisdiction of                        (I.R.S. Employer
incorporation or organization)                          Identification No.)

               1800 East Main Street, Easley, South Carolina 29640
               --------------------------------------------- -----
               (Address of principal executive offices) (Zip Code)

                  Registrant's telephone number: (864) 859-2265


Indicate by check mark whether the registrant (1) has filed all reports required
to be filed  by  Section  13 or 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 [ ]

The number of outstanding shares of the issuer's $1.67 par value common stock as
of June 30, 2001 was 3,168,046.



<PAGE>



PART I - FINANCIAL INFORMATION
Item 1. Financial Statements


        Peoples Bancorporation, Inc. and Subsidiaries
                 Consolidated Balance Sheets
           (Amounts in thousands except share data)
<TABLE>
<CAPTION>
                                                                                             June 30, 2001         December 31, 2000
                                                                                               Unaudited               Audited
                                                                                               ---------               -------
ASSETS
<S>                                                                                            <C>                    <C>
CASH AND DUE FROM BANKS .............................................................          $   9,900              $   9,462
INTEREST-BEARING DEPOSITS IN OTHER BANKS ............................................                 21                     43
FEDERAL FUNDS SOLD ..................................................................             22,585                  1,180
                                                                                               ---------              ---------
     Total cash and cash equivalents ................................................             32,506                 10,685
SECURITIES
     Available for sale .............................................................             25,448                 31,673
     Held for investment (market value
         of $3,444, and $3,794) .....................................................              3,356                  3,754
       Other investments, at cost ...................................................              1,802                  1,088
LOANS-less allowance for loan losses
     of $2,176 and $2,023 ...........................................................            193,775                183,003
LOANS HELD FOR SALE .................................................................             21,378                 16,992
PREMISES AND EQUIPMENT, net of accumulated
     depreciation and amortization ..................................................              8,008                  8,138
ACCRUED INTEREST RECEIVABLE .........................................................              1,550                  1,816
OTHER ASSETS ........................................................................              3,134                  2,351
                                                                                               ---------              ---------
         TOTAL ASSETS ...............................................................          $ 290,957              $ 259,500
                                                                                               =========              =========

LIABILITIES AND SHAREHOLDERS' EQUITY
LIABILITIES
DEPOSITS
     Noninterest-bearing ............................................................          $  34,309              $  28,716
     Interest-bearing ...............................................................            203,478                176,918
                                                                                               ---------              ---------
         Total deposits .............................................................            237,787                205,634
SECURITIES SOLD UNDER REPURCHASE
     AGREEMENTS .....................................................................             18,409                 14,157
FEDERAL FUNDS PURCHASED .............................................................                  0                  3,660
NOTES PAYABLE TO FEDERAL HOME LOAN BANK .............................................              5,000                  8,000
ACCRUED INTEREST PAYABLE ............................................................              1,758                  1,721
OTHER LIABILITIES ...................................................................                847                    513
                                                                                               ---------              ---------
         Total Liabilities ..........................................................            263,801                233,685
                                                                                               ---------              ---------
SHAREHOLDERS' EQUITY
Common Stock - 10,000,000 shares authorized, $1.67
     Par value per share, 3,168,046 shares outstanding ..............................              5,290                  5,290
Additional paid-in capital ..........................................................             20,587                 20,587
Retained Earnings ...................................................................              1,170                      0
Accumulated other comprehensive income ..............................................                109                    (62)
                                                                                               ---------              ---------
         Total Shareholders' Equity .................................................             27,156                 25,815
                                                                                               ---------              ---------
TOTAL LIABILITIES AND SHAREHOLDERS' EQUITY ..........................................          $ 290,957              $ 259,500
                                                                                               =========              =========
</TABLE>






                                       2
<PAGE>


                  PEOPLES BANCORPORATION, INC. AND SUBSIDIARIES
                        CONSOLIDATED STATEMENTS OF INCOME
                                   (Unaudited)
                    (Amounts in thousands except share data)

<TABLE>
<CAPTION>
                                                                                 Three Months Ended               Six Months Ended
                                                                                     June 30,                        June 30,
                                                                               2001             2000           2001          2000
                                                                               ----             ----           ----          ----
INTEREST INCOME
<S>                                                                    <C>              <C>              <C>              <C>
Interest and fees on loans .....................................       $    4,512       $    3,983       $    8,930       $    7,505
Interest on securities
     Taxable ...................................................              446              527              977            1,050
     Tax-exempt ................................................               42               49               86              103
Interest on federal funds ......................................              181               87              243              239
                                                                       ----------       ----------       ----------       ----------
Total interest income ..........................................            5,181            4,646           10,236            8,897

INTEREST EXPENSE
Interest on deposits ...........................................            2,611            2,015            5,056            3,774
Interest on federal funds purchased and securities
     sold under repurchase agreements ..........................              170              166              349              358
Interest on notes payable Federal Home
     Loan Bank .................................................               68               92              230              118
                                                                       ----------       ----------       ----------       ----------
Total interest expense .........................................            2,849            2,273            5,635            4,250

Net interest income ............................................            2,332            2,373            4,601            4,647
PROVISION FOR LOAN LOSSES ......................................              119              155              252              318
                                                                       ----------       ----------       ----------       ----------
Net interest income after provision for
     loan losses ...............................................            2,213            2,218            4,349            4,329

NON-INTEREST INCOME
Service fees and other income ..................................            1,292              628            2,506            1,093

NON-INTEREST EXPENSE
Salaries and benefits ..........................................            1,395            1,110            2,669            2,158
Occupancy ......................................................              125               87              248              173
Equipment ......................................................              164              156              309              292
Other operating expenses .......................................              712              599            1,409            1,116
                                                                       ----------       ----------       ----------       ----------
                                                                            2,396            1,952            4,635            3,739

Income before income taxes .....................................            1,109              894            2,220            1,683

PROVISION FOR INCOME TAXES .....................................              397              312              796              575
                                                                       ----------       ----------       ----------       ----------

Net income .....................................................       $      712       $      582       $    1,424       $    1,108
                                                                       ==========       ==========       ==========       ==========


INCOME PER COMMON SHARE:
     BASIC .....................................................       $     0.22       $     0.19       $     0.45       $     0.35
                                                                       ==========       ==========       ==========       ==========
     DILUTED ...................................................       $     0.22       $     0.17       $     0.44       $     0.34
                                                                       ==========       ==========       ==========       ==========

WEIGHTED AVERAGE COMMON SHARES OUTSTANDING:
    BASIC ......................................................        3,168,046        3,145,753        3,168,046        3,141,787
                                                                       ==========       ==========       ==========       ==========
    DILUTED ....................................................        3,247,522        3,381,771        3,251,643        3,259,796
                                                                       ==========       ==========       ==========       ==========
DIVIDENDS PAID PER COMMON
     SHARE .....................................................       $     0.04       $    0.035       $     0.08       $     0.07
                                                                       ==========       ==========       ==========       ==========
</TABLE>


                                       3
<PAGE>


                  Peoples Bancorporation, Inc. and Subsidiaries
           Consolidated Statements of Changes in Shareholders' Equity
                for the three months ended June 30, 2001 and 2000

                    (Amounts in thousands except share data)
                                   (Unaudited)

<TABLE>
<CAPTION>
                                                                                                        Accumulated
                                                     Common stock           Additional                     other          Total
                                                     ------------             paid-in        Retained   comprehensive  shareholders'
                                                 Shares         Amount        capital        earnings      income         equity
                                                 ------         ------        -------        --------      ------         ------
<S>                                            <C>           <C>            <C>            <C>           <C>             <C>
Balance, December 31, 1999* ................   2,987,627     $    4,989     $   18,867     $        0    $     (510)     $   23,346
Net Income .................................                                                    1,108                         1,108
Other comprehensive income, net of tax:
   Unrealized holding gains on
     securities available for sale .........                                                                    (79)            (79)
   Less reclassification
     adjustments for gains
     included in net income ................                                                                      0               0
                                                                                                                         ----------
Comprehensive income .......................                                                                                  1,029
Cash Dividends .............................                                                     (210)                         (210)
Proceeds from stock options ................      23,433             39            (35)                                           4
                                              ----------     ----------     ----------     ----------    ----------      ----------
Balance, June 30, 2000 .....................   3,011,060     $    5,028     $   18,832     $      898    $     (589)     $   24,169
                                              ==========     ==========     ==========     ==========    ==========      ==========

Balance, December 31, 2000* ................   3,168,046     $    5,290     $   20,587     $        0    $      (62)     $   25,815
Net Income .................................                                                    1,424                         1,424
Other comprehensive income, net of tax:
   Unrealized holding losses on
     securities available for sale .........                                                                    171             171
   Less reclassification
     adjustments for gains
     included in net income ................                                                                      0               0
                                                                                                                         ----------
                                                                                                                                  0
Comprehensive income .......................                                                                                  1,595
Cash Dividends .............................                                                     (254)                         (254)
Proceeds from stock options
                                              ----------     ----------     ----------     ----------    ----------      ----------
Balance, June 30, 2001 .....................   3,168,046     $    5,290     $   20,587     $    1,170    $      109      $   27,156
                                              ==========     ==========     ==========     ==========    ==========      ==========
</TABLE>


* 5% stock  dividends  issued in January 2000 and 2001 are reflected in December
31, 1999 and 2000 data.





                                       4
<PAGE>



                  Peoples Bancorporation, Inc. and Subsidiaries
                     Consolidated Statements of Cash Flows
                             (Amounts in thousands)

<TABLE>
<CAPTION>
                                                                                                             (Unaudited)
                                                                                                          Six Months Ended
                                                                                                               June 30,
                                                                                                       2001                  2000
                                                                                                       ----                  ----
CASH FLOWS FROM OPERATING ACTIVITIES
<S>                                                                                                  <C>                  <C>
   Net Income ............................................................................           $   1,424            $   1,108
   Adjustments to reconcile net income to net cash provided
     by operating activities
   Provision for loan losses .............................................................                 252                  318
   Depreciation and amortization .........................................................                 274                  259
   Amortization and accretion (net) of premiums and
     discounts on securities .............................................................                 (48)                  18
   Origination of mortgage loans held for sale ...........................................            (179,229)             (60,893)
   Sale of mortgage loans held for sale ..................................................             174,843               49,606
   (Increase)decrease in accrued interest receivable .....................................                 266                 (100)
   Increase in other assets ..............................................................                (782)                (252)
   Increase in accrued interest payable ..................................................                  37                  185
   Increase in other liabilities .........................................................                  89                   34
                                                                                                     ---------            ---------
     Net cash provided (used) by operating activities ....................................              (2,874)               9,717
                                                                                                     ---------            ---------

CASH FLOWS FROM INVESTING ACTIVITIES
   Purchases of securities available for sale ............................................             (16,319)              (4,330)
   Proceeds from the maturity of securities available for sale ...........................               2,736                2,078
   Proceeds from the call of securities available for sale ...............................              19,800                  133
   Net increase in loans .................................................................             (10,869)             (28,221)
   Purchase of premises and equipment ....................................................                (145)                (453)
                                                                                                     ---------            ---------
     Net cash used in investing activities ...............................................              (4,797)             (30,793)
                                                                                                     ---------            ---------

CASH FLOWS FROM FINANCING ACTIVITIES
   Net increase in deposits ..............................................................              32,153               29,241
   Net increase in securities sold under repurchase
     agreements ..........................................................................               4,253                1,027
   Net increase(decrease) in Federal funds purchased .....................................              (3,660)                   0
   Net increase (decrease) in notes payable Federal Home Loan Bank .......................              (3,000)               3,000
   Proceeds from stock options exercised .................................................                   0                    4
   Cash dividend .........................................................................                (254)                (210)
                                                                                                     ---------            ---------
     Net cash provided by financing activities ...........................................              29,492               33,062
                                                                                                     ---------            ---------
     Net increase in cash and cash equivalents ...........................................              21,821               (7,448)
CASH AND CASH EQUIVALENTS, BEGINNING OF YEAR .............................................              10,685               20,754
                                                                                                     ---------            ---------
CASH AND CASH EQUIVALENTS, END OF PERIOD .................................................           $  32,506            $  13,306
                                                                                                     =========            =========

CASH PAID FOR
     Interest ............................................................................           $   5,598            $   4,065
                                                                                                     =========            =========
     Income Taxes ........................................................................           $     726            $     391
                                                                                                     =========            =========
</TABLE>








                                       5
<PAGE>



                  PEOPLES BANCORPORATION, INC. AND SUBSIDIARIES
              NOTES TO UNAUDITED CONSOLIDATED FINANCIAL STATEMENTS

SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES

      A summary of these  policies  is  included  in the 2000  Annual  Report to
shareholders and incorporated herein by reference.

STATEMENT OF CASH FLOWS

      Cash  includes  currency  and coin,  cash items in process of  collection,
amounts due from banks and federal funds sold.

COMMON STOCK

     The Board of Directors declared cash dividends of $0.04 per common share to
shareholders of record March 23, 2001 and June 21, 2001,  respectively,  payable
April 6, 2001 and July 6, 2001, respectively.

     SFAS No. 128,  "Earnings per Share" requires that the Company present basic
and diluted net income per common share. The assumed conversion of stock options
creates the  difference  between basic and diluted net income per share.  Income
per share is calculated by dividing net income by the weighted average number of
common shares outstanding for each period presented. The weighted average number
of common shares outstanding for basic net income per common share was 3,168,046
at June 30, 2001 and 3,141,787 at June 30, 2000. The weighted  average number of
common shares  outstanding for diluted net income per common share was 3,251,643
at June 30, 2001 and 3,259,796 at June 30, 2000.

      The Company issued a  five-percent  common stock dividend in January 2001.
Per share data in 2000 has been restated to reflect this transaction.

MANAGEMENT'S OPINION

     In  the  opinion  of  management,   the  accompanying  unaudited  financial
statements of Peoples Bancorporation,  Inc. contain all adjustments necessary to
fairly  present the  financial  results of the interim  periods  presented.  The
results of operations for any interim period are not  necessarily  indicative of
the results to be expected for an entire year.




                                       6
<PAGE>

Item 2.           MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL
                     CONDITION AND RESULTS OF OPERATIONS

     The following  discussion and analysis  should be read in conjunction  with
the consolidated financial statements and related notes and with the statistical
information  and  financial  data  appearing  in this report as well as the 2000
Annual  Report  of  Peoples  Bancorporation,  Inc.  on  Form  10-K.  Results  of
operations  for the six-month  period  ending June 30, 2001 are not  necessarily
indicative of the results to be attained for any other period.

Forward-Looking Statements

         From time to time,  Peoples  Bancorporation,  Inc. (the  "Company") may
publish  forward-looking  statements  relating  to such  matters as  anticipated
financial  performance,  business  prospects,  technological  developments,  new
products and similar matters.  The Private  Securities  Litigation Reform Act of
1995 provides a safe harbor for forward-looking  statements.  In order to comply
with the terms of the safe harbor,  the Company  notes that a variety of factors
could cause the Company's  actual  results and  experience to differ  materially
from the anticipated  results or other  expectations  expressed in the Company's
forward-looking  statements.  The risks and  uncertainties  that may  affect the
operations,  performances,  development  and results of the  Company's  business
include,  but are not limited to, the following:  risks from changes in economic
and industry  conditions;  changes in interest  rates;  risks inherent in making
loans,  including repayment risks and value of collateral;  dependence on senior
management;  and recently-enacted or proposed legislation.  Statements contained
in this filing  regarding  the demand for the  Company's  products and services,
changing  economic  conditions,  interest rates,  consumer spending and numerous
other factors may be forward-looking statements and are subject to uncertainties
and risks.

Overview

      Peoples Bancorporation,  Inc. was incorporated under South Carolina law on
March 6, 1992,  for the purpose of becoming a bank holding  company by acquiring
all of the Common Stock of The Peoples  National Bank,  Easley,  South Carolina.
The  Company  commenced  operations  on July 1, 1992 upon  effectiveness  of the
acquisition of The Peoples  National Bank. On May 19, 2000, the Company filed an
election with the Federal Reserve Bank of Richmond to become a financial holding
company, pursuant to the Gramm-Leach-Bliley Act of 1999, and the election became
effective June 23, 2000. As a financial holding company, Peoples Bancorporation,
Inc. may engage in  activities  that are  financial in nature or incidental to a
financial  activity as described in the law and regulations  adopted pursuant to
the law. To date, the Company has not engaged in any activities other than those
permitted  to a bank  holding  company  and has not yet taken  advantage  of its
status as a financial holding company to engage in additional activities.

       The Company has three  wholly-owned  subsidiaries:  The Peoples  National
Bank,  Easley,   South  Carolina,  a  national  bank  which  commenced  business
operations in August 1986;  Bank of Anderson,  National  Association,  Anderson,
South Carolina, a national bank which commenced business operations in September
1998; and, Seneca National Bank, Seneca,  South Carolina,  a national bank which
commenced business  operations in February 1999 (sometimes referred to herein as
the "Banks").

     Currently,  the Company engages in no significant operations other than the
ownership  of its  three  subsidiaries  and the  support  thereof.  The  Company
conducts its business  from six banking  offices  located in the Upstate Area of
South Carolina.




                                       7
<PAGE>

                  FINANCIAL CONDITION AND RESULTS OF OPERATIONS

EARNINGS PERFORMANCE

Overview

     The  consolidated  Company's net income for the second  quarter of 2001 was
$712,000,  or $0.22 per diluted share compared to $582,000, or $0.17 per diluted
share for the second  quarter of 2000.  Net income for the six months ended June
30, 2001 was $1,424,000,  or $0.44 per diluted share compared to $1,108,000,  or
$0.34 per  diluted  share for the six  months  ended  June 30,  2000.  Return on
average  equity  for the six  months and three  months  ended June 30,  2001 was
10.84% and 10.67%, respectively,  compared to 9.15% and 9.52%, respectively, for
the six months and three months ended June 30,  2000.  Return on average  assets
for the six months and three  months  ended June 30,  2001 was 1.04 % and 1.00%,
respectively,  compared to 0.96% and 0.97%, respectively, for the six months and
three months ended June 30, 2000.  The increases in the Company's net income and
earnings per fully diluted share in 2001 are  attributable  to the attainment of
profitability  by Seneca National Bank,  which commenced  operations in February
1999,  and  increased  earnings  at The  Peoples  National  Bank  and at Bank of
Anderson,  N. A.  resulting  largely from an increase in interest  income from a
larger base of  interest-earning  assets  coupled with an increase in fee income
associated with the Company's mortgage loan operations and the introduction of a
new  overdraft  protection  product.  The Peoples  National  Bank  recorded  net
earnings of  $1,261,000  for the six months ended June 30, 2001  compared to net
earnings of $1,011,000 for the six months ended June 30, 2000. Bank of Anderson,
N. A.  recorded  net earnings of $157,000 for the six months ended June 30, 2001
compared to net  earnings of $104,000  for the six months  ended June 30,  2000.
Seneca  National  Bank recorded net earnings of $22,000 for the six months ended
June 30, 2001 compared to a net loss of $3,000 for the six months ended June 30,
2000.

Interest Income, Interest Expense and Net Interest Income

     The largest  component of the Company's net income is net interest  income.
Net interest  income,  which is the  difference  between the interest  earned on
interest-earning  assets and the interest paid on  interest-bearing  liabilities
used to fund those assets,  measures the gross profit from lending and investing
activities  and is  the  primary  contributor  to the  Company's  earnings.  Net
interest income before provision for loan losses decreased $41,000,  or 1.7%, to
$2,332,000  in the quarter  ended June 30, 2001  compared to  $2,373,000  in the
quarter ended June 30, 2000. For the six months ended June 30, 2001 net interest
income  before  provision  for  loan  losses  decreased  $46,000,  or  1.0%,  to
$4,601,000  compared to $4,647,000  for the six months ended June 30, 2000.  For
the six months and three months ended June 30, 2001 the  Company's  net interest
margin  was  3.60%  and  3.49%,  respectively,  compared  to  4.37%  and  4.26%,
respectively,  for the six months and three  months  ended  June 30,  2000.  The
decreases in the dollar  amount of net  interest  income and in the net interest
margin  resulted  primarily from rapid  decreases in short-term  rates earned on
interest-earning assets that outweighed corresponding decreases in rates paid on
interest-bearing  liabilities at the Banks associated with the Federal Reserve's
lowering of short-term  interest  rates six times in the first six months of the
year.

     The  Company's  total  interest  income for the second  quarter of 2001 was
$5,181,000 compared to $4,646,000 for the second quarter of 2000, an increase of
$535,000 or 11.5%.  Total interest income for the six months ended June 30, 2001
was  $10,236,000  compared to $8,897,000 for the six months ended June 30, 2000,
an increase of  $1,339,000  or 15.0%.  Interest  and fees on loans,  the largest
component of total interest income,  increased $529,000 in the second quarter of
2001 to  $4,512,000  compared to $3,983,000  for the second  quarter of 2000, an
increase of 13.3%.  Interest and fees on loans increased  $1,425,000 for the six
months  ended June 30, 2001 to  $8,930,000  compared to  $7,505,000  for the six
months ended June 30, 2000, an increase of 19.0%.  The  significant  increase in
interest and fees on loans for the quarter and the six-month  period ending June
30 2001 is  attributable  to a larger base of  outstanding  loans  during  these
periods when compared to the same periods in 2000.



                                       8
<PAGE>

     The Company's  total  interest  expense for the second  quarter of 2001 was
$2,849,000 compared to $2,273,000 for the second quarter of 2000, an increase of
$576,000,  or 25.3%.  Total  interest  expense for the six months ended June 30,
2001 was  $5,635,000  compared to  $4,250,000  for the six months ended June 30,
2000, an increase of $1,385,000,  or 32.6%.  Interest  expense on deposits,  the
largest  component of total interest expense,  increased  $596,000 in the second
quarter of 2001 to $2,611,000  compared to $2,015,000  for the second quarter of
2000, an increase of 29.6%.  Interest expense on deposits  increased  $1,282,000
for the six months ended June 30, 2001 to $5,056,000  compared to $3,774,000 for
the six months ended June 30,2000,  an increase of 34.0%.  The increase in total
interest   expense  and  interest  expense  on  deposits  for  the  quarter  and
year-to-date  period  ending June 30, 2001 when  compared to the same periods in
2000 is  attributable  to a larger base of  interest-bearing  liabilities in the
2001 periods.

Provision for Loan Losses

     The amount charged to the provision for loan losses by the Company is based
on  management's  judgment as to the amount  required  to maintain an  allowance
adequate to provide for losses inherent in the Company's loan portfolio.

     The provision for loan losses charged to operations during the three months
and six months  ended June 30, 2001 was  $119,000  and  $252,000,  respectively,
compared to $155,000 and  $318,000,  respectively,  for the three months and six
months ended June 30, 2000.  The decrease in the  Company's  provision  for loan
losses  for  the  second  quarter  and  first  six  months  of  2001  is  partly
attributable to some  diminishment of the strong loan growth  experienced by the
Company's  banking  subsidiaries in 2001 and reflective of the Company's overall
credit quality.

Non-interest Income

     Non-interest  income increased  $664,000,  or 105.7%, to $1,292,000 for the
second  quarter of 2001  compared  to $628,000  for the second  quarter of 2000.
Non-interest income increased $1,413,000, or 129.3%, to $2,506,000 for the first
half of 2001 compared to $1,093,000  for the first half of 2000. The increase in
non-interest  income for the two comparative  periods  resulted  largely from an
increase in fees on mortgage loans.  Another factor contributing to the increase
in non-interest  income is additional fee income associated with a new overdraft
privilege product, which was implemented during the third quarter of 2000.

Non-interest Expense

     Total non-interest expense increased $444,000,  or 22.8%, to $2,396,000 for
the second quarter of 2001 from $1,952,000 for the second quarter of 2000. Total
non-interest  expense  increased  $896,000 or 24.0% to $4,635,000  for the first
half of 2001 from $3,739,000 for the first half of 2000.  Salaries and benefits,
the largest component of non-interest expense,  increased $285,000, or 25.7%, to
$1,395,000 for the second quarter of 2001 from $1,110,000 for the second quarter
of 2000. Salaries and benefits increased  $511,000,  or 23.7%, to $2,669,000 for
the first half of 2001 from  $2,158,000 for the first half of 2000. The increase
in salaries  and  benefits is  primarily  attributable  to  additional  staffing
associated  with the  Company's  continued  growth and normal  salary  increases
throughout the Company.  Occupancy and equipment expenses increased $46,000,  or
18.9%,  to $289,000 for the second  quarter of 2001 from $243,000 for the second
quarter of 2000.  Occupancy and equipment expenses increased $92,000,  or 19.8%,
to $557,000 for the first half of 2001 from $465,000 for the first half of 2000.
The increase in occupancy and equipment expenses is due primarily to an increase
in depreciation  expense and maintenance expense associated with the purchase of
a new corporate  office building in October 2000 and partial  occupancy in March
2001.

BALANCE SHEET REVIEW

Loans

     Outstanding  loans  represent  the largest  component of earning  assets at
72.4% of total earning assets.  As of June 30, 2001, the Company had total gross
loans outstanding of $195,951,000.  Loans increased  $10,925,000,  or 5.9%, from
$185,026,000 in total gross outstanding loans at December 31, 2000 and increased
$25,901,000,  or 15.2% from  $170,050,000,  in total gross loans  outstanding at
June 30,  2000.  The  increase  resulted  from new  loans  generated  by Bank of
Anderson  and Seneca  National  Bank and strong loan growth  experienced  by The
Peoples National Bank.



                                       9
<PAGE>

     The interest rates charged on loans vary with the degree of risk,  maturity
and amount of the loan. Competitive pressures,  money market rates, availability
of funds, and government  regulation also influence  interest rates. The average
yield on the  Company's  loans for the  quarter  ended  June 30,  2001 was 8.20%
compared to 8.92% for the first six months of 2000.  Approximately  38.5% of the
Company's loans are tied to the prime interest rate.

     The Company's loan portfolio consists  principally of residential  mortgage
loans, commercial loans and consumer loans. Substantially all of these loans are
to borrowers  located in South  Carolina and are  concentrated  in the Company's
market areas.

     The Company's real estate loans are primarily  construction loans and loans
secured by real estate,  both  commercial  and  residential,  located within the
Company's  trade  areas.  The  Company  does  not  actively  pursue   long-term,
fixed-rate mortgage loans for retention in its loan portfolio.

     The Banks employ mortgage loan  originators who originate and package loans
that are pre-sold at origination to third  parties.  Peoples  National Bank also
has a wholesale  mortgage loan  department  that packages,  purchases and closes
loans for a number of third party  community  banks and mortgage loan companies.
The  loans  originated  by the  banks  and  purchased  from  third  parties  are
classified as loans held for sale for reporting  purposes.  The Company does not
service mortgage loans,  therefore the Company receives a service release fee on
all loans sold to third parties.  At June 30, 2001 the Company held  $21,378,000
of mortgage  loans for sale  compared to  $16,992,000  at December  31, 2000 and
$17,949,000  at June 30, 2000.  During the second  quarter of 2001,  the Company
originated $179,229,000 and sold $157,851,000 in mortgage loans.

     The Company's  commercial lending activity is directed  principally towards
businesses  whose demands for funds fall within each Bank's legal lending limits
and which are potential  deposit  customers of the Banks. This category of loans
includes loans made to  individuals,  partnerships or corporate  borrowers,  and
which are obtained for a variety of business  purposes.  Particular  emphasis is
placed on loans to small and medium-sized  businesses.  The Company's commercial
loans are spread  throughout a variety of industries,  with no industry or group
of related  industries  accounting  for a significant  portion of the commercial
loan  portfolio.  Commercial  loans are made on either a  secured  or  unsecured
basis.   When  taken,   security  usually  consists  of  liens  on  inventories,
receivables,  equipment,  furniture and fixtures. Unsecured commercial loans are
generally  short-term with emphasis on repayment  strength and low debt-to-worth
ratio. At June 30, 2001, approximately $12,350,000, or 8.8%, of commercial loans
were unsecured.

     The  Company's   direct   consumer  loans  consist   primarily  of  secured
installment loans to individuals for personal,  family, and household  purposes,
including automobile loans to individuals, and pre-approved lines of credit.

     Management  believes the loan  portfolio  is  adequately  diversified.  The
Company has no foreign  loans or loans for highly  leveraged  transactions.  The
Company has very few agricultural loans.

Allowance for Loan Losses

     The allowance for loan losses at June 30, 2001 was $2,176,000,  or 1.11% of
loans  outstanding  (excluding  loans held for sale) compared to $2,023,000,  or
1.09% of loans  outstanding at December 31, 2000 and to $1,812,000,  or 1.07% of
loans  outstanding at June 30, 2000. The allowance for loan losses is based upon
management's  continuing  evaluation of the collectibility of loans based on the
historical  loan loss  experience of the Company,  current  economic  conditions
affecting the ability of borrowers to repay, the volume of loans, the quality of
collateral  securing   non-performing  and  problem  loans,  and  other  factors
deserving recognition.

     At June 30, 2001,  the Company had  $1,003,000 in  non-accruing  loans,  no
restructured  loans,  no loans more than ninety days past due and still accruing
interest,  and $941,000 in Other Real Estate Owned. This compares to $993,000 in
non-accruing loans,  $67,000 in restructured  loans,  $67,000 in loans more than
ninety days past due on which interest was still being accrued,  and $478,000 in
Other Real Estate Owned at December 31, 2000. At June 30, 2000,  the Company had
$703,000 in non-accruing loans, $218,000 in restructured loans and no loans more
than ninety days past due and still  accruing  interest,  and  $219,000 in other
real estate owned.  Non-performing  loans at June 30, 2001 consisted of $223,000
in  commercial  loans;  $738,000 in real estate  loans;  and $42,000 in consumer
loans.  Non-performing  assets as a  percentage  of loans and other real  estate
owned was 0.89%,  0.81% and 0.41% at June 30,  2001,  December 31, 2000 and June
30, 2000, respectively.



                                       10
<PAGE>

     Net charge-offs during the first six months of 2001 were $98,000,  compared
to net  charge-offs  of  $33,000  for the  first  six  months  of  2000  and net
charge-offs  of $83,000 for the year ended  December 31, 2000. The allowance for
loan losses as a percentage  of  non-performing  loans was 217%,  258% and 173%,
respectively, as of June 30, 2001, June 30, 2000 and December 31, 2000.

         The  Company  accounts  for  impaired  loans  in  accordance  with  the
provisions  of  Statement  of  Financial   Accounting  Standards  ("SFAS")  114,
Accounting  by Creditors for  Impairment of a Loan.  SFAS No. 114, as amended by
SFAS No. 118,  requires  that  impaired  loans be measured  based on the present
value of  expected  future  cash flows or the  underlying  collateral  values as
defined in the  pronouncement.  The Company  includes the provisions of SFAS NO.
114, if any, in the allowance for loan losses. When the ultimate  collectability
of an impaired  loan's  principal  is in doubt,  wholly or  partially,  all cash
receipts are applied to principal.  At each of June 30, 2001, June 30, 2000, and
December 31, 2000 the Company had no impaired loans.

Securities

         The Company  invests  primarily in  obligations of the United States or
obligations  guaranteed as to principal and interest by the United States, other
taxable securities and in certain obligations of states and municipalities.  The
Company  does not  invest  in  corporate  bonds  nor  does it hold  any  trading
securities.  The Company maintains its investment portfolio to provide liquidity
for unexpected  deposit  liquidation or loan  generation,  to meet the Company's
interest rate  sensitivity  goals,  to secure public  deposits,  and to generate
income. At June 30, 2001 securities totaled  $30,606,000.  Securities  decreased
$5,909,000 from $36,515,000 invested as of December 31, 2000 and $7,028,000 from
$37,634,000 invested as of June 30, 2000.

         At June  30,  2001,  the  Company's  total  investments  classified  as
available  for  sale  had a book  value of  $27,084,000  and a  market  value of
$27,249,000  for an  unrealized  gain of  $165,000.  At  December  31,  2000 the
Company's total investments classified as available for sale had a book value of
$31,767,000 and a market value of $31,673,000 for an unrealized loss of $94,000.
At June 30, 2000 the  Company's  total  investments  classified as available for
sale had a book value of $34,780,000  and a market value of  $33,887,000  for an
unrealized loss of $893,000.

Deposits

         The Bank's  primary  source of funds for loans and  investments  is its
deposits.  Deposits grew $32,153,000, or 15.6%, to $237,787,000 at June 30, 2001
from  $205,634,000  at December 31, 2000 and grew  $39,770,000,  or 20.1%,  from
$198,017,000 at June 30, 2000. The increase resulted from deposits  generated by
all of the Banks.  Competition  for deposit  accounts is primarily  based on the
interest rates, location, convenience, and services provided.

         During the first six months of 2001, interest-bearing deposits averaged
$192,544,000  compared  to  $158,543,000  for the first six months of 2000.  The
average interest rate paid on interest-bearing  deposits was 5.25% for the first
six  months of 2001  compared  to 4.49% for the  first  six  months of 2000.  In
pricing  deposits,  the Company considers its liquidity needs, the direction and
levels  of  interest  rates  and  local  market  conditions.  At June  30,  2001
interest-bearing deposits comprised 85.6% of total deposits compared to 84.8% at
June 30, 2000.

         The  Company's  core deposit  base  consists  largely of consumer  time
deposits,  savings,  NOW accounts,  money market accounts and checking accounts.
Although such core  deposits are becoming  increasingly  interest-sensitive  for
both the Company and the industry as a whole,  core deposits continue to provide
the Company with a large source of funds. Core deposits as a percentage of total
deposits  averaged  approximately  72.6% and 79.3% for the six months ended June
30, 2001 and 2000,  respectively.  The Company closely  monitors its reliance on
certificates  greater than $100,000,  which are generally considered less stable
and less reliable than core deposits.



                                       11
<PAGE>

Borrowings

         The Company's  borrowings  are  comprised of Federal  funds  purchased,
securities sold under repurchase  agreements,  and both short-term and long-term
advances from the Federal Home Loan Bank of Atlanta. At June 30, 2001 short-term
borrowings  totaled  $18,409,000 and were comprised  entirely of securities sold
under repurchase agreements.  At December 31, 2000 short-term borrowings totaled
$20,817,000  and were  comprised  of  $3,660,000  in  Federal  funds  purchased,
$14,157,000 in securities sold under  repurchase  agreements,  and $3,000,000 in
short-term advances from the Federal Home Loan Bank of Atlanta. At June 30, 2000
short-term  borrowings totaled  $19,461,000 and were comprised of $16,461,000 in
securities  sold  under  repurchase  agreements  and  $3,000,000  in  short-term
advances from the Federal Home Loan Bank of Atlanta.  Short-term  borrowings are
used primarily for the immediate cash needs of the Company. The Company also had
$5,000,000  of long-term  advances from the Federal Home Loan Bank of Atlanta at
June 30, 2001,  compared to  $5,000,000  at December 31, 2000 and  $5,000,000 at
June 30, 2000.

LIQUIDITY

         Liquidity management involves meeting the cash flow requirements of the
Company.  The Company's  liquidity position is primarily dependent upon its need
to respond to  short-term  demand for funds caused by increased  loan demand and
withdrawals  from deposit  accounts.  The Company's  primary  liquidity  sources
include cash and due from banks,  federal funds sold, and  securities  available
for sale.  In addition,  the Company  (through the Banks) has the ability,  on a
short-term  basis,  to borrow  funds  from the  Federal  Reserve  System  and to
purchase  federal funds from other  financial  institutions.  The Banks are also
members of the Federal Home Loan Bank System and have the ability to borrow both
short and  long-term  funds on a secured  basis.  At June 30,  2001 The  Peoples
National  Bank had total  borrowing  capacity from the Federal Home Loan Bank of
Atlanta  equal to  twenty  percent  (20%) of its total  assets or  approximately
$38,082,000.  The unused portion of this line of credit was  $33,082,000 at June
30, 2001. The Company's other two bank subsidiaries, Bank of Anderson and Seneca
National  Bank,  each had  established  secured lines of credit with the Federal
Home Loan  Bank  totaling  ten  percent  (10%) of each  bank's  total  assets or
approximately $6,402,000 and $3,404,000 respectively. At June 30, 2001 the Banks
had unused federal funds lines of credit totaling $14,600,000 with correspondent
banks.

         Peoples  Bancorporation,  Inc., the parent holding company, has limited
liquidity needs, and requires  liquidity to pay limited  operating  expenses and
dividends only.

         During  the  first six  months  of 2001,  the  Company  had no  capital
expenditures other than through the normal course of business.  No large capital
expenditures are currently anticipated through the remainder of 2001.

         Company management  believes its liquidity sources are adequate to meet
its  operating  needs  and does not know of any  trends  that may  result in the
Company's liquidity materially increasing or decreasing.




                                       12
<PAGE>


CAPITAL ADEQUACY and RESOURCES

         The capital needs of the Company have been met through the retention of
earnings and from the proceeds of prior public stock offerings.

         The following  table sets forth the capital  ratios for the Company and
the Banks as of June 30, 2001:
                                 CAPITAL RATIOS
                             (Amounts in Thousands)
<TABLE>
<CAPTION>
                                                                                                 Well                 Adequately
                                                                                             Capitalized             Capitalized
                                                                         Actual              Requirement             Requirement
                                                                  Amount       Ratio       Amount      Ratio       Amount      Ratio
                                                                  ------       -----       ------      -----       ------      -----
Company:
<S>                                                              <C>           <C>         <C>         <C>        <C>          <C>
Total Risk-based Capital ....................................    $29,224       13.67%      $21,378     10.00%     $17,103      8.00%
Tier 1 Risk-based Capital ...................................     27,048       12.65        12,889      6.00        7,926      4.00
Leverage Ratio ..............................................     27,048        9.23        14,652      5.00        1,722      4.00

Peoples National Bank:
Total Risk-based Capital ....................................    $16,527       11.75%      $14,066     10.00%     $11,252      8.00%
Tier 1 Risk-based Capital ...................................     15,149       10.77         8,440      6.00        5,626      4.00
Leverage Ratio ..............................................     15,149        7.90         9,588      5.00        7,670      4.00

Bank of Anderson, N. A:
Total Risk-based Capital ....................................    $ 6,037       12.95%      $ 4,662     10.00%      $3,729      8.00%
Tier 1 Risk-based Capital ...................................      5,505       11.80         2,799      6.00        1,866      4.00
Leverage Ratio ..............................................      5,505        8.86         3,107      5.00        2,485      4.00

Seneca National Bank:
Total Risk-based Capital ....................................    $ 3,593       14.42%      $ 2,492     10.00%      $1,993      8.00%
Tier 1 Risk-based Capital ...................................      3,326       13.35         1,495      6.00          997      4.00
Leverage Ratio ..............................................      3,326       10.98         1,515      5.00        1,212      4.00
</TABLE>

IMPACT OF NEW ACCOUNTING PRONOUNCEMENTS

In July 2001, the SEC issued Staff Accounting  Bulletin (SAB) No. 102 - Selected
Loan Loss Allowance  Methodology  Issues. This staff accounting bulletin clearly
defines the required development, documentation, and application of a systematic
methodology for  determining  allowances for loan and lease losses in accordance
with generally accepted accounting  principles.  The Company believes that it is
in compliance with SAB 102.

Additional  accounting  standards  that have been issued or proposed by the FASB
that do not  require  adoption  until  future  dates are not  expected to have a
material impact on the consolidated financial statements upon adoption.



                                       13
<PAGE>



Item 3.  QUANTITATIVE AND QUALITATIVE DISCLOSURES ABOUT MARKET RISK

     Market risk is the risk of loss from adverse  changes in market  prices and
interest rates. The Company's market risk arises  principally from interest rate
risk  inherent in its lending,  deposit,  and borrowing  activities.  Management
actively  monitors and manages its  interest  rate risk  exposure.  Although the
Company manages certain other risks,  such as credit quality and liquidity risk,
in the normal course of business,  management considers interest rate risk to be
its most  significant  market risk and the risk that could  potentially have the
largest  material  effect on the  Company's  financial  condition and results of
operations.  Other  types of market  risks,  such as foreign  currency  risk and
commodity  price  risk,  do not  arise in the  normal  course  of the  Company's
business activities.

     The primary  objective of  Asset/Liability  Management at the Company is to
manage  interest  rate risk and achieve  reasonable  stability  in net  interest
income  throughout  interest rate cycles.  This is achieved by  maintaining  the
proper   balance   of   rate-sensitive   earning   assets   and   rate-sensitive
interest-bearing  liabilities. The relationship of rate-sensitive earning assets
to  rate-sensitive  interest-bearing  liabilities  is the  principal  factor  in
projecting  the effect that  fluctuating  interest rates will have on future net
interest  income.  Rate-sensitive  assets and  liabilities are those that can be
repriced  to  current  market  rates  within a  relatively  short  time  period.
Management monitors the rate sensitivity of earning assets and  interest-bearing
liabilities  over the entire life of these  instruments,  but places  particular
emphasis on the first year. At June 30, 2001,  on a cumulative  basis through 12
months,   rate-sensitive   liabilities   exceeded   rate-sensitive   assets   by
$63,226,000.  This  liability-sensitive  position is largely attributable to the
assumption  that the Company's NOW accounts,  which totaled  $27,069,000 at June
30, 2001,  will reprice  within one year.  This  assumption  may or may not hold
true,  as  the  Company  believes  that  its  NOW  accounts  are  generally  not
price-sensitive.





                                       14
<PAGE>


PART II.  OTHER INFORMATION

Item 1.       Legal Proceedings

               Incorporated  by  reference  to Part II, Item 1 of the  Company's
               Form 10-Q for the quarter ended March 31, 2001.

Item 4.       Submission to a Vote of Security Holders

On May 17, 2001, the Company held its Annual Meeting of Shareholders. The result
of the 2001 Annual Meeting of Shareholders is as follows:

The following persons were elected as Directors to serve for the terms set forth
below with 1,584,263 shares voted, representing 50% of the total voting shares:

                                 For         Withheld    Against    Term (years)
                                 ---         --------    -------    ------------
 David C. King .............  1,573,939       10,324          0            3
 Andrew M. McFall, III .....  1,573,709       10,554          0            3
 Eugene W. Merritt, Jr. ....  1,573,939       10,324          0            3
 George B. Nalley, Jr. .....  1,573,939       10,324          0            3
 Nell W. Smith .............  1,572,145       12,118          0            3
 A. J. Thompson, Jr. .......  1,568,485       15,778          0            3

Item 6.       Exhibits and Reports on Form 8-K

(a)      Exhibits.

               No Exhibits

(b)      Reports on Form 8-K.

               No reports on Form 8-K were filed  during the quarter  ended June
30, 2001.



                                       15
<PAGE>



SIGNATURES

     Pursuant to the  requirements  of the Securities  Exchange Act of 1934, the
Registrant  has duly  caused  this  report  to be  signed  on its  behalf by the
undersigned thereunto duly authorized.


                                      PEOPLES BANCORPORATION, INC.


Dated:  August 10, 2001               By:    /s/ Robert E. Dye
                                           -------------------
                                             Robert E. Dye
                                             President and Chairman of the Board


Dated:  August 10, 2001               By:   /s/ William B. West
                                          ---------------------
                                             William B. West
                                             Sr. Vice President & CFO
                                             (principal financial officer)





                                       16