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
   September 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 September 30, 2001 was 3,170,718.




<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>
                                                                                        September 30, 2001         December 31, 2000
                                                                                              Unaudited                  Audited
                                                                                              ---------                  -------
ASSETS
<S>                                                                                          <C>                       <C>
CASH AND DUE FROM BANKS ...........................................................          $  13,415                 $   9,462
INTEREST-BEARING DEPOSITS IN OTHER BANKS ..........................................                 20                        43
FEDERAL FUNDS SOLD ................................................................              3,351                     1,180
                                                                                             ---------                 ---------
     Total cash and cash equivalents ..............................................             16,786                    10,685
SECURITIES
     Available for sale ...........................................................             33,017                    31,673
     Held for investment (market value
         of $3,456, and $3,794) ...................................................              3,340                     3,754
       Other investments, at cost .................................................              1,802                     1,088
LOANS-less allowance for loan losses
         of $2,282 and $2,023 .....................................................            206,749                   183,003
LOANS HELD FOR SALE ...............................................................             21,232                    16,992
PREMISES AND EQUIPMENT, net of accumulated
     depreciation and amortization ................................................              7,969                     8,138
ACCRUED INTEREST RECEIVABLE .......................................................              1,730                     1,816
OTHER ASSETS ......................................................................              3,222                     2,351
                                                                                             ---------                 ---------
         TOTAL ASSETS .............................................................          $ 295,847                 $ 259,500
                                                                                             =========                 =========

LIABILITIES AND SHAREHOLDERS' EQUITY
LIABILITIES
DEPOSITS
     Noninterest-bearing ..........................................................          $  38,467                 $  28,716
     Interest-bearing .............................................................            200,638                   176,918
                                                                                             ---------                 ---------
         Total deposits ...........................................................            239,105                   205,634
SECURITIES SOLD UNDER REPURCHASE
     AGREEMENTS ...................................................................             19,375                    14,157
FEDERAL FUNDS PURCHASED ...........................................................                129                     3,660
NOTES PAYABLE TO FEDERAL HOME LOAN BANK ...........................................              6,500                     8,000
ACCRUED INTEREST PAYABLE ..........................................................              1,644                     1,721
OTHER LIABILITIES .................................................................              1,019                       513
                                                                                             ---------                 ---------
         Total Liabilities ........................................................            267,772                   233,685
                                                                                             ---------                 ---------
SHAREHOLDERS' EQUITY
Common  Stock - 10,000,000 shares authorized,
     $1.67 Par value per share, 3,170,718 shares and
     3,168,046 shares outstanding .................................................              5,295                     5,290
Additional paid-in capital ........................................................             20,593                    20,587
Retained Earnings .................................................................              1,818                         0
Accumulated other comprehensive income ............................................                369                       (62)
                                                                                             ---------                 ---------
         Total Shareholders' Equity ...............................................             28,075                    25,815
                                                                                             ---------                 ---------
TOTAL LIABILITIES AND SHAREHOLDERS' EQUITY ........................................          $ 295,847                 $ 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                Nine Months Ended
                                                                               September 30,                     September 30,
                                                                            2001           2000              2001             2000
                                                                            ----           ----              ----             ----
INTEREST INCOME
<S>                                                                    <C>              <C>              <C>              <C>
Interest and fees on loans .....................................       $    4,453       $    4,258       $   13,383       $   11,763
Interest on securities
     Taxable ...................................................              475              524            1,452            1,574
     Tax-exempt ................................................               41               46              127              149
Interest on federal funds ......................................              159               86              402              325
                                                                       ----------       ----------       ----------       ----------
Total interest income ..........................................            5,128            4,914           15,364           13,811

INTEREST EXPENSE
Interest on deposits ...........................................            2,373            2,161            7,429            5,935
Interest on federal funds purchased and securities
     sold under repurchase agreements ..........................              185              205              534              563
Interest on notes payable Federal Home
     Loan Bank .................................................               62               64              292              182
                                                                       ----------       ----------       ----------       ----------
Total interest expense .........................................            2,620            2,430            8,255            6,680

Net interest income ............................................            2,508            2,484            7,109            7,131
PROVISION FOR LOAN LOSSES ......................................              149              180              401              498
                                                                       ----------       ----------       ----------       ----------
Net interest income after provision for
     loan losses ...............................................            2,359            2,304            6,708            6,633

NON-INTEREST INCOME
Service fees and other income ..................................            1,281              764            3,787            1,857

NON-INTEREST EXPENSE
Salaries and benefits ..........................................            1,399            1,197            4,068            3,355
Occupancy ......................................................              135               91              383              264
Equipment ......................................................              159              155              468              447
Other operating expenses .......................................              689              564            2,098            1,680
                                                                       ----------       ----------       ----------       ----------
                                                                            2,382            2,007            7,017            5,746

Income before income taxes .....................................            1,258            1,061            3,478            2,744

PROVISION FOR INCOME TAXES .....................................              452              365            1,248              940
                                                                       ----------       ----------       ----------       ----------

Net income .....................................................       $      806       $      696       $    2,230       $    1,804
                                                                       ==========       ==========       ==========       ==========

INCOME PER COMMON SHARE:
     BASIC .....................................................       $     0.25       $     0.23       $     0.70       $     0.57
                                                                       ==========       ==========       ==========       ==========
     DILUTED ...................................................       $     0.25       $     0.22       $     0.69       $     0.54
                                                                       ==========       ==========       ==========       ==========


WEIGHTED AVERAGE COMMON SHARES OUTSTANDING:

    BASIC ......................................................        3,168,937        3,014,996        3,168,343        3,149,773
                                                                       ==========       ==========       ==========       ==========
    DILUTED ....................................................        3,264,417        3,099,781        3,256,240        3,325,354
                                                                       ==========       ==========       ==========       ==========

DIVIDENDS PAID PER COMMON SHARE ................................       $     0.04       $    0.035       $     0.12       $     0.11
                                                                       ==========       ==========       ==========       ==========
</Table>


                                       3
<Page>


                 Peoples Bancorporation, Inc. and Subsidiaries
           Consolidated Statements of Changes in Shareholders' Equity
             for the nine months ended September 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                                                                                   1,804                           1,804
Other comprehensive income, net of tax:
   Unrealized holding gains on
   securities available for sale ..........                                                                    143             143
   Less reclassification adjustments
      for gains included in net income ....                                                                      0               0
                                                                                                                       -----------
Comprehensive income ......................                                                                                  1,947
Cash Dividends ............................                                                   (316)                           (316)
Proceeds from stock options ...............      29,337            49           (23)                                            26
                                            -----------    ----------    -----------    ----------   -------------    ------------
Balance, September 30, 2000 ...............   3,016,964    $    5,038    $   18,844     $    1,488   $        (367)   $     25,003
                                            ===========    ==========    ==========     ==========   =============    ============

Balance, December 31, 2000 * ..............   3,168,046    $    5,290    $   20,587     $        0   $         (62)   $     25,815
Net Income                                                                                   2,230                           2,230
Other comprehensive income, net of tax:
   Unrealized holding losses on
   securities available for sale ..........                                                                    431             431
   Less reclassification
   adjustments for gains
   included in net income .................                                                                      0               0
                                                                                                                       -----------
Comprehensive income ......................                                                                                  2,661
Cash Dividends ............................                                                   (412)                           (412)
Proceeds from stock options ...............       2,672             5             6                                             11
                                            -----------    ----------    ----------     ----------   -------------    ------------
Balance, September 30, 2001 ...............   3,171,718    $    5,295    $   20,593     $    1,818   $         369    $     28,075
                                            ===========    ==========    ==========     ==========   =============    ============
</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)
                                                                                                           Nine months Ended
                                                                                                              September 30,
                                                                                                        2001                  2000
                                                                                                        ----                  ----
CASH FLOWS FROM OPERATING ACTIVITIES
<S>                                                                                                 <C>                   <C>
   Net Income ..........................................................................            $   2,230             $   1,804
   Adjustments to reconcile net income to net cash provided
     by operating activities
   Provision for loan losses ...........................................................                  401                   497
   Depreciation and amortization .......................................................                  421                   393
   Amortization and accretion (net) of premiums and
     discounts on securities ...........................................................                  (19)                   25
    Origination of mortgage loans held for sale ........................................             (232,297)             (136,168)
    Sale of mortgage loans held for sale ...............................................              228,056               135,043
   (Increase)decrease in accrued interest receivable ...................................                   86                  (178)
   Increase in other assets ............................................................                 (765)                 (589)
   Increase (decrease) in accrued interest payable .....................................                  (77)                  338
   Increase (decrease) in other liabilities ............................................                  (81)                  196
                                                                                                    ---------             ---------
     Net cash provided (used) by operating activities ..................................               (2,045)                1,361
                                                                                                    ---------             ---------

CASH FLOWS FROM INVESTING ACTIVITIES
   Purchases of securities available for sale ..........................................              (28,343)               (4,580)
   Proceeds from the maturity of securities available for sale .........................                3,769                 3,194
   Proceeds from the call of securities available for sale .............................               23,600                   433
   Net increase in loans ...............................................................              (23,887)              (36,640)
   Purchase of premises and equipment ..................................................                 (251)                 (525)
                                                                                                    ---------             ---------
     Net cash used in investing activities .............................................              (25,112)              (38,118)
                                                                                                    ---------             ---------

CASH FLOWS FROM FINANCING ACTIVITIES
   Net increase in deposits ............................................................               33,471                30,898
   Net increase in securities sold under repurchase
     agreements ........................................................................                5,219                 1,574
    Net increase(decrease) in Federal funds purchased ..................................               (3,531)                  130
   Net decrease in notes payable Federal Home Loan Bank ................................               (1,500)               (3,000)
   Proceeds from stock options exercised ...............................................                   11                    26
   Cash dividend .......................................................................                 (412)                 (316)
                                                                                                    ---------             ---------
     Net cash provided by financing activities .........................................               33,258                29,312
                                                                                                    ---------             ---------
     Net increase in cash and cash equivalents .........................................                6,101                (7,445)
CASH AND CASH EQUIVALENTS, BEGINNING OF YEAR ...........................................               10,685                20,754
                                                                                                    ---------             ---------
CASH AND CASH EQUIVALENTS, END OF PERIOD ...............................................            $  16,786             $  13,309
                                                                                                    =========             =========

CASH PAID FOR
     Interest ..........................................................................            $   8,334             $   6,431
                                                                                                    =========             =========
     Income Taxes ......................................................................            $   1,204             $     810
                                                                                                    =========             =========
</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 on
Form 10-K 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,  and $0.05 per  common  share to
shareholders of record September 21,2001, payable October 5, 2001.

     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 3,168,343
at September 30, 2001 and 3,149,773 at September 30, 2000. The weighted  average
number of common shares  outstanding for diluted net income per common share was
3,256,240 and 3,325,354 for the nine months ended September 30, 2001 and 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  nine-month  period  ending  September  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 third  quarter of 2001 was
$806,000,  or $0.25 per diluted share compared to $696,000, or $0.22 per diluted
share for the third  quarter  of 2000.  Net  income  for the nine  months  ended
September  30,  2001 was  $2,230,000,  or $0.69 per  diluted  share  compared to
$1,804,000,  or $0.54 per diluted share for the nine months ended  September 30,
2000.  Return on average  equity  for the nine  months  and three  months  ended
September  30, 2001 was 11.13% and 11.76%,  respectively,  compared to 9.81% and
11.08%,  respectively,  for the nine months and three months ended September 30,
2000.  Return on average  assets  for the nine  months  and three  months  ended
September  30,  2001 was 1.06% and 1.10%,  respectively,  compared  to 1.02% and
1.13%,  respectively,  for the nine months and three months ended  September 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
$1,981,000 for the nine months ended September 30, 2001 compared to net earnings
of $1,626,000 for the nine months ended September 30, 2000. Bank of Anderson, N.
A.  recorded net earnings of $255,000  for the nine months ended  September  30,
2001  compared to net earnings of $163,000  for the nine months ended  September
30, 2000.  Seneca  National  Bank  recorded net earnings of $37,000 for the nine
months ended September 30, 2001 compared to net earnings of $13,000 for the nine
months ended September 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 increased $24,000,  or 0.9%, to
$2,508,000 in the quarter ended September 30, 2001 compared to $2,484,000 in the
quarter ended  September 30, 2000. For the nine months ended  September 30, 2001
net interest income before provision for loan losses decreased $22,000, or 0.3%,
to  $7,109,000  compared to $7,131,000  for the nine months ended  September 30,
2000.  For the nine  months  and  three  months  ended  September  30,  2001 the
Company's  net interest  margin was 3.62% and 3.66%,  respectively,  compared to
4.38% and  4.31%,  respectively,  for the nine  months  and three  months  ended
September 30, 2000. The decreases 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.  This is  associated  with  the  Federal  Reserve's  lowering  of
short-term  interest rates eight times in the first nine months of the year 2001
for a total decrease of 3.50% in the Federal Funds Rate.

     The  Company's  total  interest  income  for the third  quarter of 2001 was
$5,128,000  compared to $4,914,000 for the third quarter of 2000, an increase of
$214,000 or 4.4%.  Total interest income for the nine months ended September 30,
2001 was $15,364,000 compared to $13,811,000 for the nine months ended September
30, 2000, an increase of $1,553,000  or 11.2%.  Interest and fees on loans,  the
largest  component of total  interest  income,  increased  $195,000 in the third
quarter of 2001 to $4,453,000  compared to  $4,258,000  for the third quarter of
2000, an increase of 4.6%.  Interest and fees on loans increased  $1,620,000 for
the nine months ended September 30, 2001 to $13,383,000  compared to $11,763,000
for the nine  months  ended  September  30,  2000,  an  increase  of 13.8%.  The
significant  increase  in  interest  and fees on loans for the  quarter  and the
nine-month  period ending  September 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 third  quarter of 2001 was
$2,620,000  compared to $2,430,000 for the third quarter of 2000, an increase of
$190,000,  or 7.8%.  Total interest  expense for the nine months ended September
30,  2001 was  $8,255,000  compared  to  $6,680,000  for the nine  months  ended
September 30, 2000, an increase of  $1,575,000,  or 23.6%.  Interest  expense on
deposits, the largest component of total interest expense, increased $212,000 in
the third  quarter of 2001 to $2,373,000  compared to  $2,161,000  for the third
quarter of 2000,  an increase of 9.8%.  Interest  expense on deposits  increased
$1,494,000 for the nine months ended  September 30, 2001 to $7,429,000  compared
to  $5,935,000  for the nine months ended  September  30,  2000,  an increase of
25.2%.  The increase in total interest  expense and interest expense on deposits
for the quarter and year-to-date  period ending September 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  nine  months  ended   September   30,  2001  was  $149,000  and   $401,000,
respectively,  compared to $180,000 and  $498,000,  respectively,  for the three
months and nine months ended  September 30, 2000.  The decrease in the Company's
provision for loan losses for the third quarter and first nine 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  $517,000,  or 67.7%, to $1,281,000 for the
third  quarter  of 2001  compared  to  $764,000  for the third  quarter of 2000.
Non-interest income increased $1,930,000, or 103.9%, to $3,787,000 for the first
nine months of 2001  compared to  $1,857,000  for the first nine months of 2000.
The increase in  non-interest  income for the two comparative  periods  resulted
largely from an increase in fees associated with the Company's  mortgage lending
operations.  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 at The Peoples  National
Bank, and during the first quarter of 2001 at Bank of Anderson, N. A. and Seneca
National Bank.

Non-interest Expense

     Total non-interest expense increased $375,000,  or 18.7%, to $2,382,000 for
the third quarter of 2001 from  $2,007,000 for the third quarter of 2000.  Total
non-interest  expense increased  $1,271,000 or 22.1% to $7,017,000 for the first
nine months of 2001 from $5,746,000 for the first nine months of 2000.  Salaries
and benefits, the largest component of non-interest expense, increased $202,000,
or 16.9%,  to $1,399,000  for the third quarter of 2001 from  $1,197,000 for the
third quarter of 2000.  Salaries and benefits increased  $713,000,  or 21.3%, to
$4,068,000 for the first nine months of 2001 from  $3,355,000 for the first nine
months of 2000. The increase in salaries and benefits is primarily  attributable
to additional  staffing  associated  with the  Company's  continued  growth,  in
particular  the  Company's  mortgage  lending  operations,   and  normal  salary
increases  throughout the Company.  Occupancy and equipment  expenses  increased
$48,000,  or 19.5%,  to $294,000 for the third quarter of 2001 from $246,000 for
the third quarter of 2000.  Occupancy and equipment expenses increased $140,000,
or 19.7%,  to $851,000  for the first nine months of 2001 from  $711,000 for the
first nine months 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.  Other operating  expenses for the quarter
and year-to-date  period ending  September 30, 2001,  increased 22.2% and 24.9%,
respectively  when  compared to the same  periods in 2000.  The increase in this
category  of  non-interest  expense  is  attributable  to the  continued  growth
experienced during 2001.



                                       9
<Page>

BALANCE SHEET REVIEW

Loans

     Outstanding  loans  represent  the largest  component of earning  assets at
76.9% of total earning  assets.  As of September 30, 2001, the Company had total
gross loans  outstanding  of  $209,031,000,  which excludes loans held for sale.
Loans  increased  $24,005,000,  or  13.0%,  from  $185,026,000  in  total  gross
outstanding loans at December 31, 2000 and increased $30,893,000,  or 17.3% from
$178,138,000,  in total gross loans  outstanding  at  September  30,  2000.  The
increase resulted from growth in lending activity at the Company's three banking
subsidiaries.

     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 September 30, 2001 was 7.99%
compared to 9.03% for the first nine months of 2000.  Approximately 38.8% 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  September  30,  2001 the  Company  held
$21,232,000  of mortgage  loans for sale compared to $16,992,000 at December 31,
2000 and $8,094,000 at September 30, 2000. During the third quarter of 2001, the
Company originated $53,068,000 and sold $31,836,000 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 September 30, 2001, approximately $11,165,000,  or 7.4%, 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.



                                       10
<Page>

Allowance for Loan Losses

     The  allowance  for loan losses at September  30, 2001 was  $2,282,000,  or
1.09%  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
$1,967,000,  or 1.10% of loans  outstanding at September 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 September 30, 2001, the Company had $1,207,000 in non-accruing loans, no
restructured  loans,  no loans more than ninety days past due and still accruing
interest,  and $957,000 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 September 30, 2000, the Company
had $1,073,000 in non-accruing  loans,  no restructured  loans and no loans more
than ninety days past due and still  accruing  interest,  and  $502,000 in other
real estate  owned.  Non-performing  loans at  September  30, 2001  consisted of
$263,000 in commercial  loans;  $756,000 in real estate  loans;  and $188,000 in
consumer  loans.  Non-performing  assets as a percentage of loans and other real
estate owned was 0.94%, 0.81% and 0.84% at September 30, 2001, December 31, 2000
and September 30, 2000, respectively.

     Net  charge-offs  during  the first  nine  months  of 2001  were  $142,000,
compared to net  charge-offs  of $112,000  for the first nine months of 2000 and
net  charge-offs of $239,000 for the year ended December 31, 2000. The allowance
for loan losses as a percentage of non-performing loans was 189%, 183% and 173%,
respectively,  as of  September  30, 2001,  September  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 September 30, 2001, September 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  September  30,  2001  securities  totaled  $38,159,000.  Securities
increased  $1,644,000  from  $36,515,000  invested as of  December  31, 2000 and
$1,363,000 from $36,796,000 invested as of September 30, 2000.

         At September 30, 2001, the Company's  total  investments  classified as
available  for  sale  had a book  value of  $32,458,000  and a  market  value of
$33,017,000  for an  unrealized  gain of  $559,000.  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 September 30, 2000 the Company's  total  investments  classified as available
for sale had a book value of $32,595,000  and a market value of $32,037,000  for
an unrealized loss of $558,000.



                                       11
<Page>

Deposits

         The Company's  primary source of funds for loans and investments is its
deposits.  Deposits grew $33,471,000, or 16.3%, to $239,105,000 at September 30,
2001 from $205,634,000 at December 31, 2000 and grew $39,432,000, or 19.7%, from
$199,673,000  at  September  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  nine  months  of  2001,  interest-bearing  deposits
averaged  $196,222,000  compared  to  $161,765,000  for the first nine months of
2000. The average interest rate paid on interest-bearing  deposits was 5.04% for
the first nine  months of 2001  compared  to 4.89% for the first nine  months of
2000.  In pricing  deposits,  the Company  considers its  liquidity  needs,  the
direction and levels of interest rates and local market conditions. At September
30, 2001 interest-bearing deposits comprised 83.9% of total deposits compared to
86.0% at December 31, 2000 and 84.8% at September 30, 2000.

         The  Company's  core deposit  base  consists  largely of consumer  time
deposits,  savings  accounts,  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  76.0% and
74.8% for the nine months ended September 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.

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  September  30, 2001
short-term  borrowings  totaled  $21,004,000  and were  comprised of $129,000 in
Federal  funds  purchased,  $19,375,000  in  securities  sold  under  repurchase
agreements,  and  $1,500,000 in  short-term  advances from the Federal Home Loan
Bank of Atlanta. 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  September  30, 2000
short-term  borrowings  totaled  $19,138,000  and were  comprised of $130,000 in
Federal  funds  purchased,  $17,008,000  in  securities  sold  under  repurchase
agreements and $2,000,000 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  September  30,  2001  compared  to
$5,000,000 at December 31, 2000 and none at September 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 September 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
$38,187,000.  The  unused  portion  of this line of credit  was  $31,687,000  at
September 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 $6,696,000 and $3,549,000 respectively.  At September 30, 2001 the
Banks had  unused  federal  funds  lines of  credit  totaling  $15,871,000  with
correspondent banks.

                                       12
<Page>

         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  nine  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.

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 September 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 ...............         $29,998           13.46%      $22,279           10.00%        $17,823         8.00%
Tier 1 Risk-based Capital ..............          27,706           12.43        13,374            6.00           8,916         4.00
Leverage Ratio .........................          27,706            9.31        14,880            5.00          11,904         4.00

Peoples National Bank:
Total Risk-based Capital ...............         $17,331           11.86%      $14,613           10.00%        $11,690         8.00%
Tier 1 Risk-based Capital ..............          15,883           10.86         8,775            6.00           5,850         4.00
Leverage Ratio .........................          15,883            8.16         9,732            5.00           7,786         4.00

Bank of Anderson, N. A:
Total Risk-based Capital ...............         $ 6,211           12.43%      $ 4,997           10.00%        $ 3,997         8.00%
Tier 1 Risk-based Capital ..............           5,661           11.31         3,003            6.00           2,002         4.00
Leverage Ratio .........................           5,661            8.73         3,242            5.00           2,594         4.00

Seneca National Bank:
Total Risk-based Capital ...............         $ 3,655           13.36%      $ 2,736           10.00%        $ 2,189         8.00%
Tier 1 Risk-based Capital ..............           3,371           12.31         1,643            6.00           1,095         4.00
Leverage Ratio .........................           3,371            9.81         1,718            5.00           1,375         4.00
</Table>



                                       13
<Page>

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 a future  date are not  expected to have a
material impact on the consolidated financial statements upon adoption.

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 and 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 September 30, 2001, on a cumulative basis through
12  months,   rate-sensitive   liabilities  exceeded  rate-sensitive  assets  by
$73,784,000.  This  liability-sensitive  position is largely attributable to the
Company's Certificates of Deposits and NOW accounts,  which totaled $122,404,000
and  $32,249,000,  respectively,  at September 30, 2001, and will reprice within
one year. This assumption that the Company's NOW accounts may reprice within one
year may or may not hold true, as the Company believes that its NOW accounts are
generally not price-sensitive.

PART II.  OTHER INFORMATION

Item 2.        Changes in Securities and Use of Proceeds

               During the period ended September 30, 2001 the Registrant  issued
               shares of common stock to the  following  classes of persons upon
               the exercise of options issued pursuant to the Registrant's  1993
               Incentive  Stock Option Plan. The securities were issued pursuant
               to the exemption  from  registration  provided by Section 4(2) of
               the Securities Act of 1933 because the issuance did not involve a
               public offering.


                                                                    Aggregate
                                 Class of       # of Shares         Exercise
              Date Issued        Purchasers        Issued            Price
              -----------        ----------        ------            -----
              9/10/2001          Employees         2,672            $11,490

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  September
     30, 2001.



                                       14
<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:  November 6, 2001                 By: /s/ Robert E. Dye
                                            ------------------------------------
                                             Robert E. Dye
                                             President and Chairman of the Board


Dated:  November 6, 2001                 By:/s/ William B. West
                                            ------------------------------------
                                             William B. West
                                             Sr. Vice President & CFO
                                             (principal financial officer)


















                                       15