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, 2007                           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.)


               1818 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  [ ]

      Indicate  by check mark  whether  the  registrant  is a large  accelerated
   filer, an accelerated  filer, or a  non-accelerated  filer. See definition of
   "accelerated filer and large accelerated filer" in Rule 12b-2 of the
                           Exchange Act. (Check one):

  Large accelerated filer [ ] Accelerated filer [ ] Non-accelerated filer [X]

        Indicate by check mark whether the registrant is a shell company
                 (as defined in Rule 12b-2 of the Exchange Act).

                             Yes [ ]  No  [X]

  The number of outstanding shares of the issuer's $1.11 par value common stock
                       as of August 6, 2007 was 6,716,761.





<PAGE>

PART I - FINANCIAL INFORMATION
Item 1. Financial Statements

         Peoples Bancorporation, Inc. and Subsidiaries
                  Consolidated Balance Sheets
           (Dollars in thousands except share data)
<TABLE>
<CAPTION>
                                                                                   June 30,           June 30,          December 31,
                                                                                     2007              2006                2006
                                                                                     ----              ----                ----
                                                                                  Unaudited          Unaudited            Audited
ASSETS
<S>                                                                               <C>                <C>                <C>
CASH AND DUE FROM BANKS ....................................................      $  13,666          $  11,047          $  10,819
INTEREST-BEARING DEPOSITS IN OTHER BANKS ...................................            260                238                108
FEDERAL FUNDS SOLD .........................................................          2,624             16,654             12,514
                                                                                  ---------          ---------          ---------
     Total cash and cash equivalents .......................................         16,550             27,939             23,441
SECURITIES
     Available for sale ....................................................         76,322             54,056             81,686
     Held to maturity (market value of $12,831, $12,530
         and $13,382) ......................................................         13,141             12,793             13,500
       Other investments, at cost ..........................................          3,713              2,375              4,283
LOANS-less allowance for loan losses
     of $3,920, $4,095 and $4,070 ..........................................        382,787            365,803            354,011
PREMISES AND EQUIPMENT, net of accumulated
     depreciation and amortization .........................................         11,418             11,117             11,117
ACCRUED INTEREST RECEIVABLE ................................................          3,076              2,401              3,043
CASH SURRENDER VALUE OF LIFE INSURANCE .....................................         11,138              9,568             10,934
OTHER ASSETS ...............................................................          2,393              2,096              1,799
                                                                                  ---------          ---------          ---------
         TOTAL ASSETS ......................................................      $ 520,538          $ 488,148          $ 503,814
                                                                                  =========          =========          =========
LIABILITIES AND SHAREHOLDERS' EQUITY
LIABILITIES
DEPOSITS
     Noninterest-bearing ...................................................      $  54,405          $  55,837          $  54,993
     Interest-bearing ......................................................        356,132            352,494            330,052
                                                                                  ---------          ---------          ---------
         Total deposits ....................................................        410,537            408,331            385,045

SECURITIES SOLD UNDER REPURCHASE AGREEMENTS ................................         19,665             28,234             18,368
FEDERAL FUNDS PURCHASED ....................................................          1,694                  -                  -
NOTES PAYABLE TO FEDERAL HOME LOAN BANK ....................................         38,000              5,000             50,000
ACCRUED INTEREST PAYABLE ...................................................          3,409              2,206              2,926
OTHER LIABILITIES ..........................................................            444              1,105              1,411
                                                                                  ---------          ---------          ---------
         Total Liabilities .................................................        473,749            444,876            457,750
                                                                                  ---------          ---------          ---------
SHAREHOLDERS' EQUITY
Common Stock - 15,000,000 shares authorized, $1.11
     Par value per share, 6,716,761 shares, 6,276,613 shares
       and 6,666,568 shares outstanding, respectively ......................          7,456              6,967              7,400
Additional paid-in capital .................................................         38,769             34,908             38,614
Retained Earnings ..........................................................          1,830              2,109                 32
Accumulated other comprehensive income (loss) ..............................         (1,266)              (712)                18
                                                                                  ---------          ---------          ---------
         Total Shareholders' Equity ........................................         46,789             43,272             46,064
                                                                                  ---------          ---------          ---------
TOTAL LIABILITIES AND SHAREHOLDERS' EQUITY .................................      $ 520,538          $ 488,148          $ 503,814
                                                                                  =========          =========          =========
</TABLE>

See Notes to Unaudited  Consolidated  Financial Statements which are an integral
part of these statements.

                                       1
<PAGE>

Peoples Bancorporation, Inc. and Subsidiaries
          Consolidated Statements of Income
  (Dollars in thousands except per share and share data)
                      Unaudited
<TABLE>
<CAPTION>
                                                                                 Three Months Ended             Six Months Ended
                                                                                     June 30,                        June 30,
                                                                                     --------                        --------
                                                                                2007         2006             2007            2006
                                                                                ----         ----             ----            ----
INTEREST INCOME
<S>                                                                        <C>            <C>             <C>            <C>
   Interest and fees on loans .........................................    $     7,704    $     7,221     $    14,959    $    14,158
   Interest on securities
       Taxable ........................................................            714            506           1,452          1,001
       Tax-exempt .....................................................            352            101             703            188
   Interest on federal funds ..........................................             23             35              62             53
                                                                           -----------    -----------     -----------    -----------
Total interest income .................................................          8,793          7,863          17,176         15,400
                                                                           -----------    -----------     -----------    -----------
INTEREST EXPENSE
   Interest on deposits ...............................................          3,582          2,566           6,789          4,897
   Interest on federal funds purchased and securities
       sold under repurchase agreements ...............................            114            197             202            381
   Interest on notes payable Federal Home Loan Bank ...................            303            252             700            498
                                                                           -----------    -----------     -----------    -----------
Total interest expense ................................................          3,999          3,015           7,691          5,776
                                                                           -----------    -----------     -----------    -----------
Net interest income ...................................................          4,794          4,848           9,485          9,624
PROVISION FOR LOAN LOSSES .............................................            150            256             300            493
                                                                           -----------    -----------     -----------    -----------
Net interest income after provision for loan losses ...................          4,644          4,592           9,185          9,131
                                                                           -----------    -----------     -----------    -----------
NON-INTEREST INCOME
    Service charges on deposit accounts ...............................            455            491             871            955
    Customer service fees .............................................             29             41              72             96
    Mortgage banking ..................................................            118            125             242            203
    Brokerage services ................................................             56             60              83            137
    Bank owned life insurance .........................................            117             94             234            193
    Gain (loss) on sale of assets acquired in settlement of loans .....              -             (4)              7            124
    Other noninterest income ..........................................            142            126             434            253
                                                                           -----------    -----------     -----------    -----------
              Total noninterest income ................................            917            933           1,943          1,961
                                                                           -----------    -----------     -----------    -----------
NON-INTEREST EXPENSES
   Salaries and benefits ..............................................          2,353          2,228           4,636          4,486
   Occupancy ..........................................................            208            193             416            390
   Equipment ..........................................................            326            334             642            697
   Marketing and advertising ..........................................            103            103             216            216
   Communications .....................................................             57             60             122            121
   Printing and supplies ..............................................             50             47              95             90
   Bank paid loan costs ...............................................             45             70              93            137
   Director fees ......................................................            104             81             218            178
   ATM/Debit card expenses ............................................             85             74             163            147
   Legal and professional fees ........................................             96            142             174            354
   Other operating expenses ...........................................            488            454             955            850
                                                                           -----------    -----------     -----------    -----------
             Total noninterest expenses ...............................          3,915          3,786           7,730          7,666
                                                                           -----------    -----------     -----------    -----------
   Income before income taxes .........................................          1,646          1,739           3,398          3,426
PROVISION FOR INCOME TAXES ............................................            449            593             929          1,099
                                                                           -----------    -----------     -----------    -----------

   Net income .........................................................    $     1,197    $     1,146     $     2,469    $     2,327
                                                                           ===========    ===========     ===========    ===========
INCOME PER COMMON SHARE
   BASIC ..............................................................    $      0.18    $      0.17     $      0.37    $      0.35
                                                                           ===========    ===========     ===========    ===========
   DILUTED ............................................................    $      0.18    $      0.17     $      0.37    $      0.35
                                                                           ===========    ===========     ===========    ===========
WEIGHTED AVERAGE COMMON SHARES
   BASIC ..............................................................      6,716,761      6,586,806       6,706,048      6,576,919
                                                                           ===========    ===========     ===========    ===========
   DILUTED ............................................................      6,722,945      6,669,483       6,711,174      6,674,308
                                                                           ===========    ===========     ===========    ===========
CASH DIVIDENDS PAID PER COMMON SHARE ..................................    $      0.05    $      0.05     $      0.10    $      0.10
                                                                           ===========    ===========     ===========    ===========
</TABLE>

See Notes to Unaudited  Consolidated  Financial Statements which are an integral
part of these statements.

                                       2
<PAGE>

                 Peoples Bancorporation, Inc. and Subsidiaries
           Consolidated Statements of Changes in Shareholders' Equity
                for the six months ended June 30, 2006 and 2007

                    (Dollars in thousands except share date)
                                  (Unaudited)

<TABLE>
<CAPTION>
                                                                                                        Accumulated
                                                        Common stock            Additional                  other         Total
                                                        ------------             paid-in     Retained   comprehensive  shareholders'
                                                    Shares         Amount        capital     earnings   Income (loss)    equity
                                                    ------         ------        -------     --------   -------------    ------
<S>                                                 <C>          <C>           <C>          <C>          <C>           <C>
Balance, December 31, 2005 ......................   6,245,356    $    6,932    $   34,684   $      408   $     (853)   $  41,171
Net Income ......................................                                                2,327                     2,327
Other comprehensive income, net of tax:
   Unrealized holding losses on
   securities available for sale,
   net of income taxes of $48 ...................                                                               141          141
                                                                                                                       ---------
Comprehensive income ............................                                                                          2,468
Cash Dividends ..................................                                                 (626)                     (626)
Proceeds from exercise of stock options
                                                       31,257            35           186                                    221
Stock-based compensation ........................                                      38                                     38
                                                   ----------    ----------    ----------   ----------   ----------    ---------
Balance, June 30, 2006 ..........................   6,276,613    $    6,967    $   34,908   $    2,109   $     (712)   $  43,272
                                                   ==========    ==========    ==========   ==========   ==========    =========

Balance, December 31, 2006 ......................   6,666,568    $    7,400    $   38,614   $       32   $       18    $  46,064
Net Income ......................................                                                2,469                     2,469
Other comprehensive income, net of tax:
   Unrealized holding losses on
   securities available for sale,
     net of income taxes of $652 ................                                                            (1,284)      (1,284)
                                                                                                                       ---------
Comprehensive income ............................                                                                          1,185
Cash Dividends ..................................                                                 (671)                     (671)
Proceeds from exercise of stock
options .........................................      50,193            56           115                                    171
Stock-based compensation ........................                                      40                                     40
                                                   ----------    ----------    ----------   ----------   ----------    ---------
Balance, June 30, 2007 ..........................   6,716,761    $    7,456    $   38,769   $    1,830   $   (1,266)   $  46,789
                                                   ==========    ==========    ==========   ==========   ==========    =========
</TABLE>




See Notes to Unaudited Consolidated  Financials Statements which are an integral
part of these statements.








                                       3
<PAGE>


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

<TABLE>
<CAPTION>
                                                                                                                 (Unaudited)
                                                                                                               Six Months Ended
                                                                                                                   June 30,
                                                                                                                   --------
                                                                                                           2007                2006
                                                                                                           ----                ----
CASH FLOWS FROM OPERATING ACTIVITIES
<S>                                                                                                     <C>                <C>
   Net income ................................................................................          $  2,469           $  2,327
   Adjustments to reconcile net income to net cash provided
     by operating activities:
   Gain on sale of premises and equipment ....................................................              (177)                (3)
   Gain on sale of assets acquired in settlement of loans ....................................                (7)              (124)
   Provision for loan losses .................................................................               300                493
   Provision (benefit) for deferred income taxes .............................................              (823)                 -
   Depreciation and amortization .............................................................               531                550
   Amortization and accretion (net) of premiums and discounts on securities ..................                29                 74
   Stock-based compensation ..................................................................                40                 38
   Decrease (increase) in accrued interest receivable ........................................               (33)                40
   Decrease (increase) in other assets .......................................................               873                (13)
   Increase (decrease) in accrued interest payable ...........................................               483                (75)
   Increase (decrease) in other liabilities ..................................................              (967)               204
                                                                                                        --------           --------
     Net cash provided by operating activities ...............................................             2,718              3,511
                                                                                                        --------           --------

CASH FLOWS FROM INVESTING ACTIVITIES
   Purchases of securities held to maturity ..................................................                 -             (1,980)
   Purchases of securities available for sale ................................................            (4,757)            (6,677)
   Sales (purchases) of other investments ....................................................               570               (330)
   Proceeds from principal pay-downs on securities available for sale ........................             3,583              1,915
   Proceeds from the sale of securities available for sale ...................................               315                  -
   Proceeds from the maturities and calls of securities available for sale ...................             4,600             16,050
   Investment in bank owned life insurance ...................................................              (204)              (165)
   Net (increase) decrease in loans ..........................................................           (29,076)             7,345
   Proceeds from the sale of  assets acquired in settlement of loans .........................                32              1,552
   Proceeds from the sale of premises and equipment ..........................................               510                 30
   Purchase of premises and equipment ........................................................            (1,165)            (1,059)
                                                                                                        --------           --------
     Net cash provided by (used in) investing activities .....................................           (25,592)            16,681
                                                                                                        --------           --------

CASH FLOWS FROM FINANCING ACTIVITIES
   Net increase in deposits ..................................................................            25,492             17,982
   Net increase (decrease) in securities sold under repurchase agreements ....................             1,297             (3,502)
   Net increase (decrease) in federal funds purchased ........................................             1,694             (4,039)
   Net decrease in notes payable to Federal Home Loan Bank ...................................           (12,000)           (12,500)
   Proceeds from the exercise of stock options ...............................................               171                221
   Cash dividend .............................................................................              (671)              (626)
                                                                                                        --------           --------
     Net cash provided (used in) by financing activities .....................................            15,983             (2,464)
                                                                                                        --------           --------
     Net increase (decrease) in cash and cash equivalents ....................................            (6,891)            17,728
CASH AND CASH EQUIVALENTS, BEGINNING OF PERIOD ...............................................            23,441             10,211
                                                                                                        --------           --------
CASH AND CASH EQUIVALENTS, END OF PERIOD .....................................................          $ 16,550           $ 27,939
                                                                                                        ========           ========

CASH PAID FOR
     Interest ................................................................................          $  7,208           $  5,851
                                                                                                        ========           ========
     Income Taxes ............................................................................          $    697           $    868
                                                                                                        ========           ========
</TABLE>


     See  Notes to  Unaudited  Consolidated  Financial  Statements  which are an
integral part of these statements.


                                       4
<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 2006 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.  All have  maturities  of three
months or less.

COMMON STOCK

     The Board of Directors declared cash dividends of $0.05 per common share to
shareholders of record March 16, 2007 and June 15, 2007,  payable March 30, 2007
and June 29, 2007, respectively.

EARNINGS PER SHARE

     Statement of Financial  Accounting Standards ("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 for the six months ended June
30,  2007 and 2006 was  6,706,048  and  6,576,919,  respectively.  The  weighted
average  number of common shares  outstanding  for diluted net income per common
share was  6,711,174  and  6,674,308  for the six months ended June 30, 2007 and
2006. Weighted average shares in 2006 have been restated to reflect the 5% stock
dividend declared in December, 2006.

STOCK BASED COMPENSATION

     On  January  1,  2006,  the  Company  adopted  the fair  value  recognition
provisions  of  Financial  Accounting  Standards  Board  ("FASB")  Statement  of
Financial Accounting Standards ("SFAS") No. 123(R),  "Accounting for Stock-Based
Compensation,"  to account for compensation  costs under its stock option plans.
Compensation cost is recognized from the adoption date forward for all new stock
options  granted and for any  outstanding  unvested  awards as if the fair value
method had been applied to those awards as of the date of grant.

     The Company has four stock option plans, the "1993 Employee Incentive Stock
Option  Plan," the "1997  Non-Employee  Directors  Stock Option Plan," the "2004
Stock Option Plan" and the "2007 Non-Employee  Directors Stock Option Plan." The


                                       5
<PAGE>

"1993  Employee  Incentive  Stock Option Plan"  expired in 2003,  but options to
purchase 29,934 shares remain  available for exercise under this plan. The "1997
Non-Employee  Directors  Stock  Option  Plan"  expired in 2007,  but  options to
purchase 58,734 shares remain  available for exercise under this plan. Under the
"2004 Stock Option  Plan," the Board of Directors  may grant options to officers
and  employees  to purchase  common stock of the Company at prices not less than
100 percent of the fair value of the stock on the date of grant. The outstanding
options become exercisable in various increments  beginning on the date of grant
and  expire  not more  than ten years  from the date of  grant.  Under the "2007
Non-Employee  Directors  Stock Option Plan," upon  adjournment  of the Company's
annual  meeting  of  shareholders  each  year,  each  person who has served as a
non-employee  director  of the Company or one the Banks  during the  immediately
preceding year is granted options to purchase 500 shares of common stock up to a
maximum of 5,000 per director in the aggregate under both the "2007 Non-Employee
Directors Stock Option Plans" and the "1997 Non-Employee  Directors Stock Option
Plan.  The option  price shall not be less than 100 percent of the fair value of
the stock on the grant date. The outstanding  options become  exercisable on the
grant date and expire at the earlier of one year after the  director's  death or
permanent  and  total  disability,  90 days  after the  director  ceases to be a
director for any reason other than death or permanent  and total  disability  or
ten years from the grant date. At June 30, 2007, an aggregate of 359,645  shares
were reserved for issuance on exercise of options under all four of these plans.
During the first six months of 2007,  options to  purchase  20,617  shares  were
granted with a weighted average fair value of $11.05 per share. The following is
a summary of the status of the  Company's  plans as of June 30, 2007 and changes
during the six months ended June 30, 2007.


                                                                     Weighted
                                                                      Average
                                                                     Exercise
                                                   Shares             Price
                                                   ------             -----

Outstanding, December 31, 2006 ...............    199,084             $ 8.88
Granted ......................................     20,617             $11.05
Exercised ....................................    (54,520)            $ 3.96
Forfeited ....................................       (956)            $ 9.81
                                                  -------
Outstanding, June 30, 2007 ...................    164,225             $10.78
                                                  =======

Options Exercisable, June 30, 2007 ...........    120,588
                                                  =======



                                       6
<PAGE>

MANAGEMENT'S OPINION

     The accompanying  unaudited  consolidated  financial  statements of Peoples
Bancorporation, Inc. have been prepared in accordance with accounting principles
generally  accepted  in the  United  States of  America  for  interim  financial
information  and with the  instructions to Form 10-Q according to guidelines set
forth  by the  Securities  and  Exchange  Commission.  Accordingly,  they do not
include all  information and notes required by accounting  principles  generally
accepted in the United  States of America  for  complete  financial  statements.
However,  in the opinion of management,  all  adjustments  (consisting of normal
recurring adjustments)  considered necessary for the fair presentation have been
included.  The results of operations for any interim period are not  necessarily
indicative of the results to be expected for an entire year.





                                       7
<PAGE>

Forward-Looking Statements

     From time to time,  including  in this  report,  the  Company  may  publish
forward-looking  statements  relating to such matters as  anticipated  financial
performance,  business prospects,  technological developments,  new products and
similar   matters.   All   statements   that  are  not   historical   facts  are
"forward-looking  statements."  Words such as "estimate,"  "project,"  "intend,"
"expect,"  "believe,"  "anticipate,"  "plan," and similar  expressions  identify
forward-looking statements. The Private Securities Litigation Reform Act of 1995
provides a safe harbor for forward-looking  statements.  In order to comply with
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;  adequacy  of the
allowance for loan losses; dependence on senior management; and recently-enacted
or proposed  legislation.  Statements  contained  in this report  regarding  the
demand for Peoples  Bancorporation'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.

     The Company  undertakes  no  obligation  to  publicly  update or revise any
forward-looking  statements,  whether  as a result  of new  information,  future
events or otherwise.  In light of these risks,  uncertainties,  and assumptions,
the forward-looking events discussed in this report might not occur.


Critical Accounting Policies

     Peoples Bancorporation, Inc. (the "Company") has adopted various accounting
policies that govern the application of accounting principles generally accepted
in the United States of America in the  preparation  of the Company's  financial
statements.  The significant accounting policies of the Company are described in
Item 8,  Note 1 to the  Consolidated  Financial  Statements  in the 2006  Annual
Report on Form 10-K of Peoples Bancorporation, Inc.

     Certain accounting policies involve  significant  judgments and assumptions
by  management  that have a  material  impact on the  carrying  value of certain
assets and  liabilities;  management  considers such  accounting  policies to be
critical accounting  policies.  The judgments and assumptions used by management
are based on historical  experience and other factors,  which are believed to be
reasonable under the  circumstances.  Because of the nature of the judgments and
assumptions made by management, actual results could differ from these judgments
and estimates and such differences  could have a material impact on the carrying
values of assets and liabilities and the results of operations of the Company.

                                       8
<PAGE>

     Of  these  significant  accounting  policies,  the  Company  considers  its
policies  regarding the allowance  for loan losses (the  "Allowance")  to be its
most  critical  accounting  policy due to the  significant  degree of management
judgment  involved in determining  the amount of the Allowance.  The Company has
developed  policies and  procedures for assessing the adequacy of the Allowance,
recognizing  that this process  requires a number of  assumptions  and estimates
with respect to its loan portfolio. The Company's assessments may be impacted in
future  periods by  changes in  economic  conditions,  the impact of  regulatory
examinations,  and the discovery of information with respect to borrowers, which
is not  known to  management  at the time of the  issuance  of the  consolidated
financial statements. Refer to the discussion under "Provision and Allowance for
Loan Losses,  Loan Loss Experience"  section of the Company's 2006 Annual Report
on Form 10-K and the "Allowance for Loan Losses" and "Provision for Loan Losses"
sections of this report on Form 10-Q for a detailed description of the Company's
estimation process and methodology related to the Allowance.





                                       9
<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 2006 Annual Report of Peoples Bancorporation,  Inc. on Form 10-K. Results of
operations for the three-month and six-month periods ended June 30, 2007 are not
necessarily indicative of the results to be attained for any other period.


Overview

         The  Company  is  a  bank  holding  company  with  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 seven banking offices and one loan-production  office
located in the Upstate Area of South Carolina.





                                       10
<PAGE>


                  FINANCIAL CONDITION AND RESULTS OF OPERATIONS

EARNINGS PERFORMANCE

Overview

     The Company's  consolidated  net income for the second  quarter of 2007 was
$1,197,000  or $0.18 per  diluted  share  compared  to  $1,146,000  or $0.17 per
diluted  share for the second  quarter of 2006,  an increase of $51,000 or 4.5%.
Net income for the six months  ended June 30, 2007 was  $2,469,000  or $0.37 per
diluted  share  compared to  $2,327,000  or $0.35 per diluted  share for the six
months ended June 30, 2006,  an increase of $142,000 or 6.1%.  Return on average
equity for the six months and three  months  ended June 30,  2007 was 10.54% and
10.07%  respectively,  compared  to 10.88% and 10.53%  respectively  for the six
months and three months ended June 30,  2006.  Return on average  assets for the
six  months  and  three   months  ended  June  30,  2007  was  0.99%  and  0.95%
respectively,  compared to 0.96% and 0.94%  respectively  for the six months and
three months ended June 30, 2006.  The  increases in the  Company's  net income,
diluted  earnings  per share,  return on average  equity,  and return on average
assets in the first  half of 2007 are  largely  attributable  to higher  average
balances and yields of earning assets.

Interest Income, Interest Expense and Net Interest Income

     The largest  component of the Company's income is net interest income.  Net
interest income,  which is the difference  between the interest earned on assets
and the interest paid for the  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  $54,000 or 1.1% to  $4,794,000 in the quarter ended June
30, 2007 compared to $4,848,000 in the quarter ended June 30, 2006.  For the six
months ended June 30, 2007 net interest income before  provision for loan losses
decreased  $139,000 or 1.4% to  $9,485,000  compared to  $9,624,000  for the six
months  ended June 30, 2006.  The  Company's  net interest  margin for the three
months and six months  ending  June 30,  2007 was 4.07% and 4.09%  respectively,
compared  to 4.25% and 4.25%  respectively  for the three  months and six months
ended June 30, 2006.

     The  Company's  total  interest  income for the second  quarter of 2007 was
$8,793,000 compared to $7,863,000 for the second quarter of 2006, an increase of
$930,000 or 11.8%.  Total interest income for the six months ended June 30, 2007
was $17,176,000  compared to $15,400,000 for the six months ended June 30, 2006,
an increase of  $1,776,000  or 11.5%.  Interest  and fees on loans,  the largest
component of total interest income,  increased $483,000 in the second quarter of
2007 to  $7,704,000  compared to $7,221,000  for the second  quarter of 2006, an
increase of 6.7%.  Interest  and fees on loans  increased  $801,000  for the six
months ended June 30, 2007 to $14,959,000  compared to  $14,158,000  for the six
months ended June 30, 2006, an increase of 5.7%. The increases in total interest
income and  interest  and fees on loans were  primarily  due to higher  interest
rates and fees  charged on loans.  Interest  on taxable  securities,  the second
largest  component of total  interest  income  increased  $208,000 in the second
quarter of 2007 to $714,000 compared to $506,000 for the second quarter of 2006,
an increase of 41.1%.  Interest on taxable securities increased $451,000 for the


                                       11
<PAGE>

six months ended June 30, 2007 to $1,452,000  compared to $1,001,000 for the six
months ended June 30, 2006,  an increase of 45.1%.  The increases in interest on
taxable  securities  were due  primarily  to higher  interest  rates and  higher
average  balances.   Interest  on  tax-exempt  securities,  the  second  largest
component of total interest income  increased  $251,000 in the second quarter of
2007 to  $352,000  compared  to  $101,000  for the second  quarter  of 2006,  an
increase of 248.5%. Interest on tax-exempt securities increased $515,000 for the
six months  ended June 30,  2007 to $703,000  compared  to $188,000  for the six
months ended June 30, 2006, an increase of 273.9%.  The increases in interest on
tax-exempt  securities  were due  primarily  to higher  average  balances and to
higher interest rates.

     The Company's  total  interest  expense for the second  quarter of 2007 was
$3,999,000 compared to $3,015,000 for the second quarter of 2006, an increase of
$984,000 or 32.6%. Total interest expense for the six months ended June 30, 2007
was $7,691,000 compared to $5,776,000 for the six months ended June 30, 2006, an
increase of  $1,915,000  or 33.2%.  Interest  expense on  deposits,  the largest
component of total interest expense,  increased $1,016,000 in the second quarter
of 2007 to $3,582,000  compared to $2,566,000 for the second quarter of 2006, an
increase of 39.6%. Interest expense on deposits increased $1,892,000 for the six
months  ended June 30, 2006 to  $6,789,000  compared to  $4,897,000  for the six
months  ended June 30,  2006,  an increase of 38.6%.  The  increases in interest
expense on deposits are largely  attributable  to higher  interest rates paid on
these accounts, as well as higher average balances during the first half of 2007
when  compared  to the same  period of 2006.  Interest  on notes  payable to the
Federal Home Loan Bank ("FHLB"),  the second largest component of total interest
expense,  increased  $51,000 or 20.2% to $303,000 in the second  quarter of 2007
compared to $252,000 for the second  quarter of 2006.  Interest on notes payable
to the  Federal  Home Loan Bank  increased  $202,000 or 40.6% to $700,000 in the
first  half of 2007  compared  to  $498,000  for the  first  half of  2006.  The
increases are largely  attributable  to higher market  interest rates and higher
average  balances in these accounts  during the first half of 2007 when compared
to the same period of 2006.  Interest on federal funds  purchased and securities
sold under repurchase agreements,  the third largest component of total interest
expense,  decreased  $83,000 or 42.1% to $114,000 in the second  quarter of 2007
compared to $197,000 for the second  quarter of 2006.  Interest on federal funds
purchased and securities sold under repurchase  agreements decreased $179,000 or
47.0% to $202,000 in the first half of 2007  compared to $381,000  for the first
half of 2006. These decreases are largely attributable to lower average balances
in these accounts during the first half of 2007 when compared to the same period
of 2006.

Provision for Loan Losses

     The provision for loan losses charged to operations during the three months
ended June 30, 2007 was  $150,000  compared to  $256,000,  for the three  months
ended June 30, 2006,  a decrease of $106,000 or 41.4%.  The  provision  for loan
losses charged to operations during the six months ended June 30, 2007 decreased
$193,000 or 39.1% to  $300,000,  compared to $493,000  for the six months  ended
June 30, 2006.  The changes in the  Company's  provision for loan losses for the
second  quarter and first half of 2007 are based on  management's  evaluation of


                                       12
<PAGE>

the Company's overall credit quality and its estimate of loan losses inherent in
the loan  portfolio.  See "BALANCE SHEET REVIEW - Allowance for Loan Losses" for
further discussion.

Non-interest Income

     Non-interest  income  decreased  $16,000 or 1.7% to $917,000 for the second
quarter  of  2007  compared  to  $933,000  for  the  second   quarter  of  2006.
Non-interest  income decreased  $18,000 or 0.9% to $1,943,000 for the first half
of 2007  compared  to  $1,961,000  for the first half of 2006.  Service  fees on
deposit  accounts,  the largest  component  of  non-interest  income,  decreased
$36,000 or 7.3% to $455,000 for the second  quarter of 2007 compared to $491,000
for the second  quarter of 2006.  Service  fees on  deposit  accounts  decreased
$84,000  or 8.8% to  $871,000  for the first  six  months  of 2007  compared  to
$955,000  for the first six months of 2006.  The  decreases  in service  fees on
deposit   accounts   are   largely   attributable   to  a   smaller   number  of
transaction-based deposit accounts.

     Mortgage  banking income  decreased $7,000 or 5.6% in the second quarter of
2007 to  $118,000  compared  to  $125,000  in the second  quarter  of 2006,  and
increased  $39,000 or 19.2% in the first half of 2007 to  $242,000  compared  to
$203,000  in the first half of 2006.  These  changes  in the levels of  mortgage
banking  income  are  largely  due to the  substantial  swings in the demand for
residential mortgage loan originations that occur from time to time.

     Other  noninterest  income  increased  $16,000 or 12.7% to $142,000 for the
second  quarter of 2007  compared  to $126,000  for the second  quarter of 2006.
Other noninterest  income increased  $181,000 or 71.5% to $434,000 for the first
half of 2007 compared to $253,000 for the first half of 2006.  This  substantial
increase is largely  attributable to a $169,000 gain on the sale of a portion of
a  parcel  of land  acquired  in 2005 for a new  branch  office  of The  Peoples
National Bank.  Construction of the facility has begun on the remaining  portion
of the land and is expected to be completed during the fourth quarter of 2007.

     There were no gains  realized on the sale of available for sale  securities
during the second quarter and first half of 2007 and 2006.

Non-interest Expense

     Total non-interest expense increased $129,000 or 3.4% to $3,915,000 for the
second quarter of 2007 from  $3,786,000  for the second  quarter of 2006.  Total
non-interest  expense increased $64,000 or 0.8% to $7,730,000 for the first half
of 2007 from $7,666,000 for the first half of 2006.  Salaries and benefits,  the
largest  component  of  non-interest  expense,  increased  $125,000 or 5.6%,  to
$2,353,000 for the second quarter of 2007 from $2,228,000 for the second quarter
of 2006. Salaries and benefits increased $150,000 or 3.3%, to $4,636,000 for the
first half of 2007 from  $4,486,000 for the first half of 2006. The increases in
salaries and benefits are  primarily  due to normal  salary  increases and other
changes in personnel throughout the Company.

                                       13
<PAGE>

     Occupancy and furniture and equipment  expense  increased $7,000 or 1.3% to
$534,000  in the  second  quarter of 2007  compared  to  $527,000  in the second
quarter of 2006.  Occupancy  and  furniture  and  equipment  expenses  decreased
$29,000 or 2.7% to $1,058,000 for the first half of 2007 from $1,087,000 for the
first half of 2006.

     Legal and  professional  fees decreased  $46,000 or 32.4% to $96,000 in the
second quarter of 2007 compared to $142,000 in the second quarter of 2006. Legal
and professional fees decreased $180,000 or 50.8% to $174,000 for the first half
of 2007  compared  to $354,000 in the first half of 2006.  These  decreases  are
largely  attributable  to legal fees associated with the termination of a former
employee of the Company incurred during the first half of 2006.

     Director fees increased $23,000 or 28.4% to $104,000 for the second quarter
of 2007  compared  to  $81,000  in the second  quarter  of 2006.  Director  fees
increased  $40,000 or 22.5% to $218,000  for the first half of 2007  compared to
$178,000 for the first half of 2006, largely due to an increase in fees paid for
committee  meetings and the  resumption  of the payment of director  fees at the
Bank of Anderson, N. A., which were suspended during the first quarter of 2006.

     All other  operating  expenses were $828,000 in the second  quarter of 2007
compared to $808,000 for the second  quarter of 2006,  an increase of $20,000 or
2.5%. All other operating  expense  increased  $83,000 or 5.3% to $1,644,000 for
the first half of 2007 from $1,561,000 for the first half of 2006.

Income Taxes

     The provision for income taxes decreased  $144,000 or 24.3% to $449,000 for
the second  quarter of 2007 compared to $593,000 for the second quarter of 2006.
The provision for income taxes  decreased  $170,000 or 15.5% to $929,000 for the
first  half of 2007  compared  to  $1,099,000  for the first  half of 2006.  The
provision  for income taxes is an estimate,  and  management  considers  several
factors in making this estimate  including  current  pre-tax income levels,  the
amount of  tax-exempt  income,  and a comparison  of prior  period  estimates to
income taxes ultimately determined.



                                       14
<PAGE>


BALANCE SHEET REVIEW

Loans

     Outstanding  loans  represent  the largest  component of earning  assets at
80.1% of total earning assets. As of June 30, 2007, the Company held total gross
loans  outstanding of  $386,707,000  an increase of  $28,626,000,  or 8.0%, from
$358,081,000  in total  gross  loans  outstanding  at  December  31, 2006 and an
increase  of  $16,809,000,  or 4.5%,  from  $369,898,000  in total  gross  loans
outstanding at June 30, 2006. The increase in outstanding loans is reflective of
an increase  in overall  loan  demand,  coupled  with an  increase in  marketing
efforts. The following table summarizes outstanding loans by type:


<TABLE>
<CAPTION>
Loan Portfolio Composition                                                                      June 30,               December 31,
                                                                                                --------               ------------
(Dollars in Thousands)                                                                   2007               2006            2006
                                                                                         ----               ----            ----
                                                                                               (Unaudited)               (Audited)

<S>                                                                                   <C>                <C>              <C>
Commercial and Industrial - not secured by real estate ....................           $ 42,252           $ 39,626         $ 38,505
Commercial and Industrial - secured by real estate ........................            104,646             92,169           90,298
Residential real estate - mortgage ........................................            100,563            105,312           97,835
Residential real estate - construction ....................................            125,193            116,515          117,465
Consumer loans ............................................................             14,053             16,276           13,978
                                                                                      --------           --------         --------
     Gross Loans ..........................................................           $386,707           $369,898         $358,081
                                                                                      ========           ========         ========
</TABLE>

      The interest rates charged on loans vary with the degree of risk, maturity
and amount of the loan.  Competitive  pressures,  market rates,  availability of
funds,  and government  regulation also influence  interest  rates.  The average
yield on the Company's  loans for the six months and three months ended June 30,
2007 was 8.17% and 8.20% respectively,  compared to 7.56% and 7.66% respectively
for the six months and three  months ended June 30,  2006.  The Federal  Reserve
increased  the federal  funds target rate by 50 basis  points  during the second
quarter of 2006,  culminating  a two-year  period  during which it increased the
federal funds target rate seventeen  times for a total of 425 basis points.  The
Federal Reserve has not changed  interest rates since June 2006. A large portion
of the  Company's  adjustable-rate  loans,  which  constitute  48%  of the  loan
portfolio,  reprice almost immediately  following an interest rate change by the
Federal Reserve.

     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 other
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 do
employ  mortgage  loan  originators  who  originate  loans that are  pre-sold at
origination to third parties.

     The Company's  commercial lending activity is directed  principally towards
businesses  whose  demands for funds fall within each Bank's legal lending limit
and which are potential  deposit  customers of the Banks. This category of loans
includes loans made to individuals,  partnerships,  and corporations,  which are


                                       15
<PAGE>

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 an 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 strengths and low debt-to-worth ratios. At
June  30,  2007  approximately  $4,677,000  or 11.1% 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 that the loan portfolio is adequately diversified.  The
Company has no foreign  loans or loans for highly  leveraged  transactions.  The
Company has few, if any, agricultural loans.

Allowance for Loan Losses

     The allowance  for loan losses at June 30, 2007 was  $3,920,000 or 1.01% of
loans  outstanding  compared  to  $4,070,000  or 1.14% of loans  outstanding  at
December 31, 2006 and compared to  $4,095,000 or 1.11% of loans  outstanding  at
June 30,  2006.  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 the
collateral  securing   non-performing  and  problem  loans,  and  other  factors
deserving recognition.

     At June 30, 2007 the Company had $919,000 in non-accruing  loans,  $419,000
in  restructured  loans,  no loans  more  than  ninety  days  past due and still
accruing  interest,  and $359,000 in other real estate  owned.  This compares to
$993,000 in non-accruing  loans,  $421,000 in restructured  loans, no loans more
than  ninety  days past due on which  interest  was  still  being  accrued,  and
$271,000 in other real estate owned at December 31, 2006. At June 30, 2006,  the
Company had $1,768,000 in non-accruing  loans,  $645,000 in restructured  loans,
$93,000 in loans more than ninety days past due and still accruing interest, and
$586,000  in other real  estate  owned.  Non-performing  loans at June 30,  2007
consisted  of $587,000  in mortgage  loans,  $314,000  in  commercial  loans and
$18,000 in consumer  loans.  Non-performing  assets as a percentage of loans and
other real estate  owned was 0.44%,  0.47%,  and 0.83% at each of June 30, 2007,
December 31, 2006, and June 30, 2006, respectively.

     Net charge-offs  during the first six months of 2007 were $450,000 compared
to net  charge-offs  of  $253,000  for the  first  six  months  of 2006  and net
charge-offs  of $727,000 for the year ended December 31, 2006. The allowance for


                                       16
<PAGE>

loan losses as a percentage of non-performing  loans was 293%, 288%, and 163% as
of June 30, 2007, December 31, 2006, and June 30, 2006, respectively.

     The Company  accounts for impaired loans in accordance  with the provisions
of SFAS No. 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.  When the ultimate  collectibility of an
impaired loan's  principal is in doubt,  wholly or partially,  all cash receipts
are then applied to principal.  At each of June 30, 2007, December 31, 2006, and
June 30, 2006, 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 uses 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, 2007 securities totaled $93,176,000,  which represents 19.3%
of total earning assets.  Securities held at June 30, 2007 decreased  $6,293,000
or 6.3%  from  $99,469,000  invested  as of  December  31,  2006  and  increased
$23,952,000 or 34.6% from $69,224,000  invested as of June 30, 2006. The size of
the Company's  investment  portfolio is managed and fluctuates from time to time
based on the amount of public  deposits  held,  loan  demand,  liquidity  needs,
investment strategy, and other pertinent factors.

     At June 30, 2007 the Company's  total  investments  classified as available
for sale had an amortized cost of $78,241,000  and a market value of $76,322,000
for an unrealized  loss of $1,919,000.  At December 31, 2006 the Company's total
investments   classified  as  available  for  sale  had  an  amortized  cost  of
$81,658,000 and a market value of $81,686,000 for an unrealized gain of $28,000.
This  compares  to an  amortized  cost of  $55,135,000  and a  market  value  of
$54,056,000  for an unrealized  loss of $1,079,000 on the Company's  investments
classified  as  available  for sale at June 30,  2006.  The  changes  in  market
valuation of the  securities  portfolio are related to changes in interest rates
and not the credit quality of the issuer.  Management  believes that maintaining
most of its  securities  in the available  for sale  category  provides  greater
flexibility  in the  management of the overall  investment  portfolio.  In cases
where the market value is less than the book value,  the Company has the ability
and intent to hold these  securities  that are in an unrealized  loss  positions
until a market price recovery or maturity,  and therefore  these  securities are
not considered impaired on an other-than-temporary basis.

Cash Surrender Value of Life Insurance

     The Company's  cash surrender  value of life  insurance was  $11,138,000 at
June 30,  2007,  an increase of  $204,000 or 1.9% from the  $10,934,000  held at
December  31, 2006 and an increase of  $1,570,000  or 16.4% from the  $9,568,000


                                       17
<PAGE>

held at June 30, 2006.  The increase in cash  surrender  value of life insurance
since June 2006 is due to the purchase of  additional  life  insurance  policies
during the fourth quarter of 2006 on certain  officers of the Company.  Earnings
from the ownership of these policies are informally  used to offset  portions of
the cost of certain employee-related benefits.


Cash and Cash Equivalents

     The Company's cash and cash  equivalents  decreased  $6,891,000 or 29.4% to
$16,550,000 at June 30, 2007 from $23,441,000 at December 31, 2006 and decreased
$11,389,000 or 40.8% from  $27,939,000 at June 30, 2006. The substantial  swings
in the level of cash and cash  equivalents are due to fluctuations in the Banks'
needs for immediate liquidity.

Deposits

     The  Banks'  primary  source of funds for loans and  investments  are their
deposits.  Total deposits increased  $25,492,000 or 6.6% to $410,537,000 at June
30, 2007 from $385,045,000 at December 31, 2006 and increased $2,206,000 or 0.5%
from  $408,331,000  at June  30,  2006.  Competition  for  deposit  accounts  is
primarily  based on the interest rates paid,  location  convenience and services
offered.

     During the first six  months of 2007,  interest-bearing  deposits  averaged
$346,613,000  compared to  $338,644,000  for the first six months of 2006.  From
time to time the Banks  solicit  certificates  of deposit from  various  sources
through  brokers.  This is done to  reduce  the  need  for  funding  from  other
short-term  sources such as federal funds  purchased and  short-term  borrowings
from the Federal Home Loan Bank of Atlanta.  On June 30, 2007 brokered  deposits
totaled  $22,240,000.  On  December  31,  2006  and  June 30,  2006  there  were
$28,999,000 and $28,235,000 in brokered deposits, respectively.

     The average interest rate paid on  interest-bearing  deposits was 3.95% for
the first six months of 2007 compared to 2.92% for the first six months of 2006.
In pricing  deposits,  the Company  considers its liquidity needs, the direction
and levels of interest  rates,  and local  market  conditions.  At June 30, 2007
interest-bearing deposits comprised 86.3% of total deposits compared to 85.7% at
December 31, 2006 and 86.3% at June 30, 2006.

     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, these core deposits continue to provide the
Company with a large  source of  relatively  stable  funds.  Core  deposits as a
percentage of total deposits averaged approximately 78% at June 30, 2007, 77% at
December  31, 2006 and 77% at June 30, 2006.  Time  deposits of $100,000 or more
represented 22.9% of total deposits at June 30, 2007, 22.7% at December 31, 2006
and 21.9% at June 30, 2006. The Company's  larger-denomination time deposits are
generally  garnered from  customers  within the local market areas of its banks,
and  therefore  may  have a  greater  degree  of  stability  than  is  typically
associated with this source of funds at other financial institutions.

                                       18
<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  FHLB.  At  June  30,  2007  short-term  borrowings  totaled
$59,359,000  and were comprised of $19,665 in securities  sold under  repurchase
agreements, $1,694,000 in federal funds purchased, and $38,000,000 in short-term
advances  from the FHLB.  At December  31, 2006  short-term  borrowings  totaled
$63,368,000   and  were  comprised  of  $18,368,000  in  securities  sold  under
repurchase agreements,  and $45,000,000 in short-term advances from the FHLB. At
June 30, 2006  short-term  borrowings  totaled  $28,234,000  and were  comprised
entirely of securities sold under repurchase  agreements.  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 each of December 31, 2006, and June 30, 2006. This long-term advance from the
FHLB was converted to a short-term advance during the second quarter of 2007.


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 to borrow
funds on a  short-term  basis 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-term
and long-term funds on a secured basis.  At June 30, 2007, The Peoples  National
Bank had total borrowing  capacity from the FHLB equal to  $59,530,000,  and the
unused portion of this line of credit was $34,530,000.  Bank of Anderson,  N. A.
had total borrowing capacity from the FHLB equal to $28,500,000,  and the unused
portion of this line of credit was $15,500,000 at June 30, 2007. Seneca National
Bank had  established  secured lines of credit with the FHLB at June 30, 2007 of
$5,730,000,  all of which  were  unused.  At June 30,  2007,  the Banks also had
unused federal funds lines of credit with various  correspondent  banks totaling
$40,306,000.

     Peoples  Bancorporation,  Inc.,  the parent  holding  company,  has limited
liquidity needs outside of those of its subsidiaries,  and requires funds to pay
limited operating expenses and dividends.  The parent company's  liquidity needs
are fulfilled  through  management  fees assessed each  subsidiary bank and from
dividends passed up to the parent company from The Peoples National Bank.

     During the first half of 2007,  the Company  made capital  expenditures  of
approximately  $847,000  toward  construction  of a full-service  retail banking
office in Greenville, South Carolina for The Peoples National Bank. Additional


                                       19
<PAGE>

expenditures  in the  amount of  approximately  $918,000  are  expected  for the
construction  of this facility,  which is expected to be completed in the fourth
quarter of 2007.  During the first half of 2007,  the Company  also made capital
expenditures of  approximately  $95,000  associated with the purchase of two new
LED display signs  located at the  Powdersville  office of The Peoples  National
Bank and the main office Seneca  National  Bank.  During the first half of 2007,
the Company also made capital expenditures of approximately  $92,000 for general
building needs and $452,000 for furniture and equipment purchases.

     The Company is currently  considering the acquisition of an existing retail
banking facility.  The Company anticipates capital expenditures of approximately
$750,000 to purchase,  renovate,  equip, and furnish this facility.  The Company
may make other lesser capital expenditures in the normal course of business

     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.





                                       20
<PAGE>

OFF-BALANCE SHEET RISK AND DERIVATIVE FINANCIAL INSTRUMENTS

     The  Company,  through  the  operations  of the  Banks,  makes  contractual
commitments to extend credit in the ordinary course of its business  activities.
These  commitments are legally binding  agreements to lend money to customers of
the Banks at  predetermined  interest  rates for a specified  period of time. At
June 30, 2007, the Banks had issued commitments to extend credit of $113,502,000
through various types of arrangements.  The commitments  generally expire in one
year. Past experience  indicates that many of these commitments to extend credit
will expire not fully used. As described under "Liquidity," the Company believes
that it has adequate  sources of liquidity  to fund  commitments  that are drawn
upon by the borrowers.

     In addition to commitments  to extend credit,  the Banks also issue standby
letters of credit, which are assurances to a third party that it will not suffer
a loss if the Bank's  customer fails to meet its  contractual  obligation to the
third party. Standby letters of credit totaled $6,047,000 at June 30, 2007. Past
experience  indicates  that many of these standby  letters of credit will expire
unused. However,  through its various sources of liquidity, the Company believes
that it will have the necessary  resources to meet these obligations  should the
need arise.  Various types of collateral  secure most of the standby  letters of
credit.  The Company  believes  that the risk of loss  associated  with  standby
letters of credit is  comparable  to the risk of loss  associated  with its loan
portfolio.  Moreover,  the fair value  associated  with any  standby  letters of
credit issued by the Company is immaterial to the Company.

     Neither  the Company  nor the Banks are  involved in any other  off-balance
sheet  contractual  relationships or transactions that could result in liquidity
needs or  other  commitments  or  significantly  impact  earnings.  The  Peoples
National Bank has an operating lease agreement for its loan-processing office in
Greenville,  South Carolina totaling approximately $7,000 at June 30, 2007. This
obligation is payable in installments over the next four months.




                                       21
<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 Company and the Banks are required to maintain  certain  capital ratios
by federal banking regulators. The following table sets forth the capital ratios
for the Company and the Banks as of June 30, 2007:


                                 CAPITAL RATIOS
                             (Dollars 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 ...............         $51,975         12.55%          N/A              N/A       $33,131          8.00%
Tier 1 Risk-based Capital ..............          48,055         11.60           N/A              N/A        16,571          4.00
Leverage Ratio .........................          48,055          9.13           N/A              N/A        21,054          4.00

The Peoples National Bank:
Total Risk-based Capital ...............         $29,965         11.55%      $25,944            10.00%      $20,755          8.00%
Tier 1 Risk-based Capital ..............          27,655         10.66        15,566             6.00        10,377          4.00
Leverage Ratio .........................          27,655          9.04        15,296             5.00        12,237          4.00

Bank of Anderson, N. A.:
Total Risk-based Capital ...............         $13,674         12.77%      $10,708            10.00%      $ 8,566          8.00%
Tier 1 Risk-based Capital ..............          12,417         11.59         6,428             6.00         4,285          4.00
Leverage Ratio .........................          12,417          8.56         7,253             5.00         5,802          4.00

Seneca National Bank:
Total Risk-based Capital ...............         $ 5,683         12.14%      $ 4,681            10.00%      $ 3,745          8.00%
Tier 1 Risk-based Capital ..............           5,216         11.14         2,809             6.00         1,873          4.00
Leverage Ratio .........................           5,216          8.53         3,057             5.00         2,446          4.00
</TABLE>



                                       22
<PAGE>


RECENTLY ISSUED ACCOUNTING STANDARDS

     The  following  is a summary of recent  authoritative  pronouncements  that
could  impact  the  accounting,  reporting,  and / or  disclosure  of  financial
information by the Company.

     In February 2006, the Financial  Accounting Standards Board ("FASB") issued
Statement of Financial  Accounting  ("SFAS")  No. 155,  "Accounting  for Certain
Hybrid Financial  Instruments--an amendment of FASB Statements No. 133 and 140."
This Statement amends SFAS No. 133,  "Accounting for Derivative  Instruments and
Hedging  Activities," and SFAS No. 140,  "Accounting for Transfers and Servicing
of Financial Assets and Extinguishments of Liabilities." This Statement resolves
issues addressed in SFAS No. 133  Implementation  Issue No. D1,  "Application of
Statement 133 to Beneficial Interests in Securitized Financial Assets." SFAS No.
155 permits fair value  re-measurement for any hybrid financial  instrument that
contains  an embedded  derivative  that  otherwise  would  require  bifurcation,
clarifies which interest-only  strips and principal-only  strips are not subject
to the  requirements  of Statement  133,  establishes a requirement  to evaluate
interests  in  securitized  financial  assets  to  identify  interests  that are
freestanding  derivatives or that are hybrid financial  instruments that contain
an embedded derivative requiring  bifurcation,  clarifies that concentrations of
credit  risk in the form of  subordination  are not  embedded  derivatives,  and
amends  Statement  140 to eliminate  the  prohibition  on a  qualifying  special
purpose entity from holding a derivative financial instrument that pertains to a
beneficial interest other than another derivative financial instrument. SFAS No.
155 is  effective  for all  financial  instruments  acquired or issued after the
beginning of an entity's first fiscal year that begins after September 15, 2006.
The  Company  does not  believe  that the  adoption  of SFAS No. 155 will have a
material impact on its financial position, results of operations and cash flows.

     In March 2006, the FASB issued SFAS No. 156,  "Accounting  for Servicing of
Financial Assets--an amendment of FASB Statement No. 140." This Statement amends
FASB No. 140,  "Accounting  for Transfers and Servicing of Financial  Assets and
Extinguishments  of Liabilities,"  with respect to the accounting for separately
recognized servicing assets and servicing liabilities.  SFAS No. 156 requires an
entity to  recognize  a  servicing  asset or  servicing  liability  each time it
undertakes  an  obligation  to  service a  financial  asset by  entering  into a
servicing  contract;  requires all separately  recognized  servicing  assets and
servicing  liabilities to be initially  measured at fair value,  if practicable;
permits an entity to choose its subsequent measurement methods for each class of
separately recognized servicing assets and servicing liabilities; at its initial
adoption,  permits a one-time  reclassification of available for sale securities
to trading  securities by entities with  recognized  servicing  rights,  without
calling into question the treatment of other available for sale securities under
SFAS No. 115,  provided that the available for sale securities are identified in
some  manner as  offsetting  the  entity's  exposure to changes in fair value of
servicing assets or servicing liabilities that a servicer elects to subsequently
measure at fair value;  and requires  separate  presentation of servicing assets
and servicing  liabilities  subsequently measured at fair value in the statement
of financial position and additional  disclosures for all separately  recognized
servicing assets and servicing liabilities.  An entity should adopt SFAS No. 156


                                       23
<PAGE>

as of the  beginning of its first fiscal year that begins  after  September  15,
2006.  The Company  does not  believe  the  adoption of SFAS No. 156 will have a
material impact on its financial position, results of operations and cash flows.

     In July  2006,  the FASB  issued  FASB  Interpretation  No. 48 ("FIN  48"),
"Accounting  for  Uncertainty in Income Taxes".  FIN 48 clarifies the accounting
for uncertainty in income taxes recognized in enterprises'  financial statements
in  accordance  with  SFAS  No.  109,  "Accounting  for  Income  Taxes".  FIN 48
prescribes  a  recognition  threshold  and  measurement   attributable  for  the
financial  statement  recognition  and  measurement  of a tax position  taken or
expected  to be  taken  in a tax  return.  FIN  48  also  provides  guidance  on
derecognition,  classification,  interest and  penalties,  accounting in interim
periods,  disclosures  and  transitions.  FIN 48 is  effective  for fiscal years
beginning  after  December 15, 2006. The Company has analyzed the effects of FIN
48 and has  determined  that it will have no impact on its  financial  position,
results of operations or cash flows.

     In September 2006, the FASB issued SFAS No. 157, "Fair Value Measurements."
SFAS No. 157 defines fair value,  establishes  a framework  for  measuring  fair
value in generally accepted accounting principles, and expands disclosures about
fair value  measurements.  This  standard  does not  require  any new fair value
measurements,  but rather  eliminates  inconsistencies  found in  various  prior
pronouncements. SFAS No. 157 is effective for the Company on January 1, 2008 and
is not  expected  to  have a  significant  impact  on  the  Company's  financial
statements.

     In September 2006, the FASB issued SFAS No. 158, "Employers' Accounting for
Defined  Benefit  Pension and Other  Postretirement  Plans" ("SFAS 158"),  which
amends  SFAS  87 and  SFAS  106 to  require  recognition  of the  overfunded  or
underfunded  status of pension  and other  postretirement  benefit  plans on the
balance  sheet.  Under  SFAS 158,  gains and  losses,  prior  service  costs and
credits,  and any remaining  transition  amounts under SFAS 87 and SFAS 106 that
have  not  yet  been  recognized  through  net  periodic  benefit  cost  will be
recognized in accumulated other comprehensive income, net of tax effects,  until
they are amortized as a component of net periodic cost. The measurement  date --
the date at which the  benefit  obligation  and plan  assets are  measured -- is
required to be the company's fiscal year end. SFAS 158 is effective for publicly
held companies for fiscal years ending after  December 15, 2006,  except for the
measurement date  provisions,  which are effective for fiscal years ending after
December 15, 2008.  The Company does not have a defined  benefit  pension  plan.
Therefore,  SFAS 158 will not  impact  the  Company's  financial  conditions  or
results of operations.

     In September, 2006, The FASB ratified the consensuses reached by the FASB's
Emerging  Issues Task Force ("EITF")  relating to EITF 06-4  "Accounting for the
Deferred   Compensation  and  Postretirement   Benefit  Aspects  of  Endorsement
Split-Dollar  Life  Insurance   Arrangements".   EITF  06-4  addresses  employer
accounting for endorsement split-dollar life insurance arrangements that provide
a benefit to an  employee  that  extends to  postretirement  periods.  Employers
should  recognize a liability for future  benefits in  accordance  with SFAS No.
106, "Employers' Accounting for Postretirement Benefits Other Than Pensions", or
Accounting  Principles  Board ("APB") Opinion No. 12,  "Omnibus  Opinion--1967".
EITF 06-4 is  effective  for fiscal  years  beginning  after  December 15, 2006.
Entities should  recognize the effects of applying this Issue through either (a)


                                       24
<PAGE>

a change in  accounting  principle  through a  cumulative-effect  adjustment  to
retained  earnings  or to  other  components  of  equity  or net  assets  in the
statement of financial  position as of the  beginning of the year of adoption or
(b) a change in accounting  principle through  retrospective  application to all
prior periods.  The Company does not believe the adoption of EITF 06-4 will have
a material  impact on its financial  position,  results of  operations  and cash
flows.

     In September 2006, the FASB ratified the consensus  reached related to EITF
06-5, "Accounting for Purchases of Life  Insurance--Determining  the Amount That
Could  Be  Realized  in  Accordance  with  FASB  Technical  Bulletin  No.  85-4,
Accounting  for  Purchases  of  Life   Insurance."   EITF  06-5  states  that  a
policyholder  should consider any additional amounts included in the contractual
terms of the insurance policy other than the cash surrender value in determining
the amount that could be realized under the insurance  contract.  EITF 06-5 also
states that a  policyholder  should  determine the amount that could be realized
under the life insurance  contract assuming the surrender of an  individual-life
by  individual-life  policy (or  certificate  by certificate in a group policy).
EITF 06-5 is effective for fiscal years  beginning  after December 15, 2006. The
Company does not believe the  adoption of EITF 06-5 will have a material  impact
on its financial position, results of operations and cash flows.

     In February  2007, the FASB issued SFAS No. 159, "The Fair Value Option for
Financial  Assets and  Financial  Liabilities  - Including  an amendment of FASB
Statement No. 115." This statement  permits,  but does not require,  entities to
measure many financial  instruments  at fair value.  The objective is to provide
entities with an opportunity to mitigate  volatility in reported earnings caused
by measuring related assets and liabilities  differently without having to apply
complex hedge accounting provisions. Entities electing this option will apply it
when the  entity  first  recognizes  an  eligible  instrument  and  will  report
unrealized  gains and  losses on such  instruments  in  current  earnings.  This
statement 1) applies to all entities,  2) specifies  certain  election dates, 3)
can be applied on an instrument-by-instrument  basis with some exceptions, 4) is
irrevocable and 5) applies only to entire  instruments.  One exception is demand
deposit  liabilities which are explicitly excluded as qualifying for fair value.
With respect to SFAS No. 115, available for sale and held to maturity securities
at the  effective  date are eligible for the fair value option at that date.  If
the fair value option is elected for those  securities  at the  effective  date,
cumulative  unrealized  gains and losses at that date shall be  included  in the
cumulative-effect  adjustment and thereafter,  such securities will be accounted
for as trading  securities.  SFAS 159 is effective for the Company on January 1,
2008.  The Company is currently  analyzing the fair value option  provided under
SFAS No. 159.

     Other accounting standards that have been issued or proposed by the FASB or
other standards-setting bodies are not expected to have a material impact on the
Company's financial position, results of operations and cash flows.


                                       25
<PAGE>

Item 3.   QUANTITATIVE AND QUALITATIVE DISCLOSURES ABOUT MARKET RISK

    Market risk is the risk of loss  arising  from  adverse  changes in the fair
value of financial instruments due to a change in interest rates, exchange rates
and equity prices.  The Company's  primary type of market risk is  interest-rate
risk.

     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 in order to maintain adequate liquidity.
The Company seeks to achieve this objective by maintaining the proper balance of
rate-sensitive earning assets and rate-sensitive  liabilities.  The relationship
of rate-sensitive earning assets to rate-sensitive  liabilities is the principal
factor in projecting  the effect that  fluctuating  interest  rates will have on
future net interest income. Rate-sensitive assets and rate-sensitive 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.

     Each  of  the   Company's   banking   subsidiaries   has   established   an
Asset/Liability Management Committee. These committees use a variety of tools to
analyze  interest-rate  sensitivity,  including a static gap  presentation and a
simulation  model. A static gap  presentation  reflects the  difference  between
total  interest-sensitive  assets and  liabilities  within certain time periods.
While the static gap is a widely used measure of interest rate  sensitivity,  it
is not,  in  management's  opinion,  the  best  indicator  of a  company's  true
sensitivity position.  Accordingly,  the Company's banking subsidiaries also use
an earnings  simulation  model that estimates the variations in interest  income
under  different  interest-rate  environments  to measure  and manage the bank's
short-term  interest-rate risk.  According to the model, as of June 30, 2007 the
Company was positioned so that net interest income would increase  $637,000 over
the next twelve months if market  interest  rates were to gradually  rise by 100
basis points over the same period. Conversely, net interest income would decline
$408,000 in the next twelve months if interest  rates were to gradually  decline
by 100 basis points over the same period.  Computation of prospective effects of
hypothetical interest-rate changes are based on numerous assumptions,  including
relative levels of market interest rates and loan prepayment,  and should not be
relied upon as indicative of actual results.  Further,  the  computations do not
contemplate  all actions that the Company and its customers  could  undertake in
response to changes in interest rates.

     Additionally,   each  of  the  Company's  banking   subsidiaries   measures
anticipated  changes  in its  theoretical  economic  value of equity in order to
ascertain its  long-term  interest rate risk.  This is done by  calculating  the
difference  between  the  theoretical  market  value of the  bank's  assets  and
liabilities  and  subjecting  the  balance  sheet  to  different   interest-rate
environments to measure and manage long-term interest rate risk.

     It is the  responsibility  of the  Asset/Liability  Committees to establish
parameters  for various  interest risk  measures,  to set  strategies to control
interest rate risk within those parameters,  to maintain adequate and stable net


                                       26
<PAGE>

interest  income,  and to direct the  implementation  of  tactics to  facilitate
achieving their objectives.

     Management  is not aware of any  known  events  or  uncertainties  that are
expected  to have or are  reasonably  likely  to have a  material  effect on the
Company's liquidity,  capital resources or results of operations.  Management is
not aware of any current recommendations by the regulatory authorities, which if
they were to be  implemented,  would  have a  material  effect on the  Company's
liquidity, capital resources or results of operations.



                                       27
<PAGE>


Item 4T.          CONTROLS AND PROCEDURES

     Based on the  evaluation  required by 17 C.F.R.  Section  240.13a-15(b)  or
240.15d-15(b) of the Company's disclosure controls and procedures (as defined in
17  C.F.R.  Sections  240.13a-15(e)  and  240.15d-15(e)),  the  Company's  chief
executive  officer and chief financial  officer concluded that such controls and
procedures,  as of the end of the period covered by this quarterly report,  were
effective.

     There has been no change in the Company's  internal  control over financial
reporting during the most recent fiscal quarter that has materially affected, or
is reasonably likely to materially  affect,  the Company's internal control over
financial reporting.





                                       28
<PAGE>



PART II.  OTHER INFORMATION

Item 4.       Submission of Matters to a Vote of Security Holders

Annual Meeting of Shareholders

On May 17, 2007, The Company held its Annual Meeting of Shareholders. The voting
results of the 2006 Annual Meeting of Shareholders follows.

Proposal #1 - Election of Directors

The following persons were elected as Directors to serve for the terms set forth
below with 5,223,570 shares voted, representing 78% of the total shares entitled
to vote:
                                                          Broker
                               For          Withheld    Non-Votes   Term (years)
                               ---          --------    ---------   ------------
Paul C. Aughtry, III ......  5,045,831       177,739        0             3
R. David Land .............  5,043,511       180,059        0             3
Eugene W. Merritt, Jr. ....  5,041,702       181,868        0             3
George B. Nalley, Jr. .....  5,044,831       178,739        0             3
A. J. Thompson, Jr. .......  4,997,976       225,594        0             3
Timothy J. Reed ...........  5,045,831       177,739        0             2
D. Gray Suggs .............  5,035,723       187,847        0             1

The following persons continue to serve as directors for the terms indicated.

                                                            Year Term Ends
                                                            --------------
              Charles E. Dalton                               2008
              George Weston Nalley                            2008
              Larry D. Reeves                                 2008
              R. Riggie Ridgeway                              2008
              William R. Rowan, III                           2008
              Robert E. Dye, Jr.                              2009
              W. Rutledge Galloway                            2009
              E. Smyth McKissick, III                         2009
              William B. West                                 2009

Additionally,  as  reported in a Form 8-K filed July 20,  2007,  as a meeting on
July 19, 2007, the Board of Directors elected L. Andrew  Westbrook,  III, to the
Company's Board of Directors. Mr. Westbrook is President of The Peoples National
Bank and Bank of Anderson, N. A.

Proposal #2 - Approval of the Peoples  Bancorporation,  Inc.  2007  Non-Employee
Directors Stock Option Plan

The shareholders  approved the Peoples  Bancorporation,  Inc. 2007  Non-Employee
Directors  Stock  Option  Plan with  3,314,081  or 63% voting in favor,  373,697
shares voting against, 65,319 shares abstaining and 1,470,473 broker non-votes.



                                       29
<PAGE>



Item 6.  Exhibits

                      Exhibits.

10       Peoples Bancorporation 2007 Non-Employee Directors Stock Option Plan
31.1     Rule 13a-14(a)/15d-14(a) Certifications
31.2     Rule 13a-14(a)/15d-14(a) Certifications
32       Section 1350 Certifications





                                       30
<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 13, 2007                    By:    /s/ R. Riggie Ridgeway
                                                ------------------------
                                                  R. Riggie Ridgeway
                                                  President and CEO


Dated:  August 13, 2007                    By:   /s/ Robert E. Dye, Jr.
                                               ------------------------
                                                  Robert E. Dye, Jr.
                                                  Sr. Vice President & CFO
                                                  (principal financial officer)



                                       31
<PAGE>



                                  Exhibit Index

Exhibit No.       Description of Exhibit

10          Peoples Bancorporation 2007 Non-Employee Directors Stock Option Plan
31.1        Rule 13a-14(a)/15d-14(a) Certifications
31.2        Rule 13a-14(a)/15d-14(a) Certifications
32          Section 1350 Certifications



                                       32