10-Q 1 r10q.txt SECURITIES AND EXCHANGE COMMISSION Washington, D.C. 20549 FORM 10-Q [X] QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934 FOR THE QUARTERLY PERIOD ENDED JUNE 30, 2003 or [ ] TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934 FOR THE TRANSITION PERIOD FROM _________________ to __________________ Commission file number: 333-30640 PEOPLES FIRST, INC. ------------------------------------------------------ (Exact name of registrant as specified in its charter) PENNSYLVANIA 23-3028825 ------------------------------- ------------------- (State or other jurisdiction of (I.R.S. Employer incorporation or organization) Identification No.) 24 SOUTH THIRD STREET, OXFORD, PENNSYLVANIA 19363 ------------------------------------------- ---------- (Address of principal executive offices) (Zip Code) (610) 932-9294 ---------------------------------------------------- (Registrant's telephone number, including area code) 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 an accelerated filer (as defined in Rule 12b-2 of the Exchange Act). [ ] Yes [X] No Indicate the number of shares outstanding of each of the issuer's classes of common stock, as of the latest practical date. COMMON STOCK, Par Value $1.00 per share 2,965,284 shares outstanding as of June 30, 2003 Item 1. Financial Statements PEOPLES FIRST, INC. CONSOLIDATED BALANCE SHEETS

Note: The balance sheet at December 31, 2002 has been derived from the audited financial statements at that date. See Notes to Consolidated Financial Statements 2 PEOPLES FIRST, INC. CONSOLIDATED STATEMENTS OF INCOME (Unaudited)

See Notes to Consolidated Financial Statements 4 PEOPLES FIRST, INC. CONSOLIDATED STATEMENTS OF CASH FLOWS (Unaudited)

See Notes to Consolidated Financial Statements 6 PEOPLES FIRST, INC. CONSOLIDATED STATEMENTS OF STOCKHOLDERS' EQUITY For the Six Months Ended June 30, 2002 (Unaudited)

PEOPLES FIRST, INC. CONSOLIDATED STATEMENTS OF STOCKHOLDERS' EQUITY For the Six Months Ended June 30, 2002 (Unaudited)

7 PEOPLES FIRST, INC. NOTES TO FINANCIAL STATEMENTS (Unaudited) June 30, 2003 Note A - Basis of Presentation The consolidated financial statements include the accounts of Peoples First, Inc. and its wholly owned subsidiary, The Peoples Bank of Oxford (the "Bank") and its subsidiaries (collectively "Peoples"). The Bank's subsidiaries include Wilmerding & Associates, Inc. ("Wilmerding"), an investment advisor registered with the SEC and based in Rosemont, Pennsylvania and Peoples First Business Investment Company, LLC ("PFBI"), a non- operating company formed in January 2002 for the purpose of holding certain equity investments in operating entities. One of such operating entities is Peoples First Land Transfer, LLC, which commenced operations in January 2002 and derives its income from the sale of title insurance. The other operating entity is Peoples First Mortgage Company, LLC, which commenced operation in May 2003 and derives its income from the sale of mortgages. All material inter-company transactions have been eliminated. Peoples First, Inc. was formed on July 27, 2000 and is subject to regulation by the Board of Governors of the Federal Reserve System. The accompanying unaudited consolidated financial statements have been prepared in accordance with generally accepted accounting principles for interim financial information and are presented in accordance with the instructions to Form 10-Q and Rule 10-01 of the Securities and Exchange Commission Regulation S-X. Accordingly, they do not include all of the information and footnotes required by generally accepted accounting principles for complete financial statements. In the opinion of management, all adjustments (consisting of normal recurring accruals) considered necessary for a fair presentation have been included. Operating results for the three and six month periods ended June 30, 2003, are not necessarily indicative of the results that may be expected for the year ending December 31, 2003. The consolidated financial statements presented in this report should be read in conjunction with the audited financial statements and the accompanying notes included in the Annual 8 Report on Form 10-K of Peoples First, Inc. filed with the Securities and Exchange Commission for the year ended December 31, 2002. Note B - Accounting Policies The accounting policies of Peoples as applied in the interim financial statements presented, are substantially the same as those followed on an annual basis as presented in the Annual Report on Form 10-K of Peoples First, Inc. filed for the year ended December 31, 2002, except as described in the following paragraph. At June 30, 2003, the Peoples had one stock-based employee compensation plan, which is described more fully in Note E. Peoples accounts for this plan under the recognition and measurement principles of APB Opinion No. 25, "Accounting for Stock Issued to Employees," and related Interpretations. No stock-based employee compensation cost is reflected in net income, as all options granted under the plan had an exercise price equal to the market value of the underlying common stock on the date of grant. The following table illustrates the effect on net income and earnings per share if Peoples had applied the fair value recognition provisions of FASB Statement No. 123, "Accounting for Stock-Based Compensation," to stock- based employee compensation.

10 Note C - Earnings per Share Basic earnings per share represents income available to common shareholders divided by the weighted-average number of common shares outstanding during the period. Diluted earnings per share reflects additional common shares that would have been outstanding if dilutive potential common shares (stock options) had been issued. Stock options were first granted in June 2003, but were not dilutive for the three and six months ended June 30, 2003. Earnings per common share calculations prior to 2003 consisted of net income available to common shareholders divided by the average shares outstanding for the period. Earnings per common share for the three and six month periods ended June 30, 2003 have been computed based upon the following: 3 Months Ended 6 Months Ended June 30, 2003 June 30, 2003 -------------- -------------- Numerator -net income $1,253,000 $2,486,000 ========== ========== Denominator: Average basic shares outstanding 2,965,284 2,965,284 Effect of dilutive stock options - - ---------- ---------- Average diluted shares outstanding 2,965,284 2,965,284 ========== ========== Note D - Comprehensive Income The only comprehensive income item that Peoples presently has is unrealized gains on securities available for sale. Total comprehensive income, which is the sum of net income and other comprehensive income for the three and six month periods ended June 30, 2003, was $1,661,000 and $2,829,000 compared to 10 $1,938,000 and $2,639,000 for the same period last year. The federal income taxes allocated to the unrealized gains are as follows:

Note E - Stock Option Plan During 2001, Peoples stockholders approved a stock option plan for key employees and directors of Peoples and its subsidiaries that is administered by a committee of the Board of Directors. Under the Plan, the Board is authorized to grant "incentive stock options" and "non-qualified stock options." A total of 200,000 shares of Peoples' common stock has been reserved for issuance under the Plan. The option price for options issued under the plan must be at least equal to 100% of the fair market value of the common stock on the grant date. No incentive stock options have been granted. On June 17, 2003, Peoples granted 85,950 nonqualified stock options to purchase common stock at $24.13 per share to employees of Peoples. Options granted under the Plan are exercisable over a period not less than one year after the grant date, but no later than ten years and one month after the date of grant in accordance with the vesting period as determined by the Plan Committee. Options expire on the earlier of ten years after the date of grant, up to twenty-four months from the date of retirement, as of the date of termination for cause, or one 11 year from the date of death, permanent disability or a change in control. Transactions under the plan are summarized as follows: Exercise Number of Price Per Options Share --------- --------- Outstanding December 31, 2002 - - Options granted 2003 85,950 $24.13 ------ ------ Outstanding June 30, 2003 85,950 $24.13 ------ ------ No options are exercisable at June 30, 2003. To date, no options have been exercised, forfeited or expired. The weighted average remaining contractual life of the options outstanding is ten years. The fair value of each option grant is estimated using the Black-Scholes option-pricing model with the following weighted- average assumptions: dividend yield of 2.5 %, expected volatility of 30.67%, risk-free interest rate of 2.81%, and expected life of 7 years. The fair value of options granted in 2003 was $6.53. Note F - Standby Letters of Credit Outstanding letters of credit written are conditional commitments issued by Peoples to guarantee the performance of a customer to a third party. Peoples' exposure to credit loss in the event of non-performance by the other party to the financial instrument for standby letters of credit is represented by the contractual amount of those instruments. Peoples had $6,695,000 of standby letters of credit as of June 30, 2003 and $5,638,000 at December 31, 2002. The Bank uses the same credit policies in making conditional obligations as it does for on-balance sheet instruments. The majority of these standby letters of credit expire within the next twelve months. The credit risk involved in issuing letters of credit is essentially the same as that involved in extending other loan commitments. Peoples requires collateral and personal guarantees supporting these letters of credit as 12 deemed necessary. Management believes that the proceeds obtained through a liquidation of such collateral and the enforcement of personal guarantees would be sufficient to cover the maximum potential amount of future payments required under the corresponding guarantees. The current amount of the liability as of June 30, 2003, for guarantees under standby letters of credit issued after December 31, 2002 is not material. Note G - Summary of New Accounting Standards In January 2003, the Financial Accounting Standards Board issued FASB Interpretation No. 46, "Consolidation of Variable Interest Entities, an Interpretation of ARB No. 51". This interpretation provides new guidance for the consolidation of variable interest entities (VIEs) and requires such entities to be consolidated by their primary beneficiaries if the entities do not effectively disperse risk among parties involved. The interpretation also adds disclosure requirements for investors that are involved with unconsolidated VIEs. The disclosure requirements apply to all financial statements issued after January 31, 2003. The consolidation requirements apply immediately to VIEs created after January 31, 2003 and are effective for the first fiscal year or interim period beginning after June 15, 2003 for VIEs acquired before February 1, 2003. The adoption of this interpretation did not have a significant impact on Peoples' financial condition or results of operations. In April 2003, the FASB issued Statement No. 149, "Amendment of Statement No. 133, Accounting for Derivative Instruments and Hedging Activities." This Statement clarifies the definition of a derivative and incorporates certain decisions made by the Board as part of the Derivatives Implementation Group process. This Statement is effective for contracts entered into or modified, and for hedging relationships designated after June 30, 2003 and should be applied prospectively. The provisions of the Statement that relate to implementation issues addressed by the Derivatives Implementation Group that have been effective should continue to be applied in accordance with their respective effective dates. Adoption of this standard is not expected to have a significant impact on Peoples' financial condition or results of operations. In May 2003, the Financial Accounting Standards Board issued Statement No. 150, "Accounting for Certain Financial Instruments 13 with Characteristics of both Liabilities and Equity." This Statement requires that an issuer classify a financial instrument that is within its scope as a liability. Many of these instruments were previously classified as equity. This Statement was effective for financial instruments entered into or modified after May 31, 2003 and otherwise was effective beginning July 1, 2003. The adoption of this standard did not have a significant impact on Peoples' financial condition or results of operations. Item 2 - Management's Discussion and Analysis of Financial Condition and Results of Operations Forward-Looking Statements Except for historical information, this report may be deemed to contain "forward-looking" statements regarding Peoples. Examples of forward-looking statements include, but are not limited to, (a) projections or statements regarding future earnings, expenses, net interest income, other income, earnings or loss per share, asset mix and quality, growth prospects, capital structure and other financial terms, (b) statements of plans and objectives of management or the board of directors, and (c) statements of assumptions, such as economic conditions in Peoples' market areas. Such forward-looking statements can be identified by the use of forward-looking terminology such as "believes," "expects," "may," "intends," "will," "should," "anticipates," or the negative of any of the foregoing or other variations thereon or comparable terminology, or by discussion of strategy. No assurance can be given that the future results covered by forward-looking statements will be achieved. Such statements are subject to risks, uncertainties, and other factors that could cause actual results to differ materially from future results expressed or implied by such forward-looking statements. Important factors that could impact Peoples' operating results include, but are not limited to, (i) the effects of changing economic conditions in Peoples' market areas and nationally, (ii) credit risks of commercial, real estate, consumer and other lending activities, (iii) significant changes in interest rates, (iv) changes in federal and state banking laws and regulations which could impact Peoples' operations, (v) funding costs, 14 (vi) the effects of armed conflicts involving the United States or its interests, and (vii) other external developments which could materially affect Peoples' business and operations. Critical Accounting Policies Note 2 to the consolidated financial statements of Peoples First, Inc. (included in Item 8 of the Annual Report on Form 10- K of Peoples First, Inc. for the year ended December 31, 2002) lists significant accounting policies used in the development and presentation of its financial statements. This discussion and analysis, the significant accounting policies, and other financial statement disclosures identify and address key variables and other qualitative and quantitative factors that are necessary for an understanding and evaluation of Peoples and its results of operations. The most significant estimates in the preparation of Peoples' financial statements are for the allowance for loan losses and the stock option plan. Please refer to the discussion of the allowance for loan loss calculation under "Results of Operations" below and refer to Note E above for the discussion on the stock option plan. Financial Condition Total assets of Peoples increased $42,796,000 or 10.5% during the first half of 2003. Increases in deposits of $37,989,000, securities sold under agreements to repurchase of $1,610,000, long-term debt of $1,617,000 and the increase in retained earnings of $1,596,000 were the primary resources for the growth in assets. This growth funded increases in federal funds sold of $17,303,000 and net loans of $27,584,000, along with increases in securities of $921,000, interest-bearing deposits with banks of $470,000 and $135,000 in premises and equipment, for the first half of 2003. Peoples' investment in FHLB stock increased by $84,000, resulting from the FHLB's stock ownership requirements as it relates to the long-term debt increase. Cash and due from bank balances decreased by $3,656,000, along with a decrease of $45,000 in accrued interest receivable and other assets. Net loans grew $27,584,000 or 9.3% during the first six months of 2003. The majority of this loan growth was in real estate 15 secured loans, which increased $28,341,000 or 11.9%, commercial loans, which were up $2,437,000 or 7.9% and tax-free loans which were up $967,000 or 8.5%. Decreases were noted in agricultural loans, which were down $1,184,000 or 16.5% and total consumer loans, which were down $945,000 or 7.0%. The growth in real estate loans was distributed through various categories in which construction and development loans were up $11,312,000, commercial real estate loans grew $8,986,000, loans secured by agricultural properties increased $5,402,000, and home equity lines of credit increased $4,325,000. The real estate secured loan categories reflecting decreases were residential second lien loans, which decreased by $1,220,000 and multi-family mortgage loans, which were down $394,000. Residential first lien mortgages remained flat, due to the majority of these mortgages being sold on the secondary market. Total deposits increased by $37,989,000 or 11.8% since year-end 2002. The increases were realized in demand deposit accounts up $14,507,000 or 18.2%, NOW and SuperNOW accounts increased $3,156,000 or 5.3%, money market accounts increased $5,769,000 or 15.7%, savings accounts jumped $14,276,000 or 28.0%, and time deposits increased $281,000 or .3% during the six months ended June 30, 2003. Impacting the increase in deposits was the trust department savings funds that were put on deposit at the Bank during the first quarter of 2003 and totaled $6,548,000 at June 30, 2003. Short and long-term debt both reflected increases this half. Securities sold under agreements to repurchase increased $1,610,000 or 20.5% and long-term debt increased by $1,617,000 or 5.4%. Results of Operations Net income for the first half 2003 was $2,486,000 and totaled $1,253,000 for the three months ended June 30, 2003. In comparison, net income for the first half of 2002 was $2,308,000 and totaled $1,194,000 for the three months ended June 30, 2002. This reflects a $178,000 or 7.7% increase in net income for the first half of 2003 compared to 2002 and an increase of $59,000 or 4.9% for the second quarter 2003 compared to the second quarter 2002. Basic and diluted earnings per share for the first half of 2003 were $.84 per share, up from $.77 per share 16 for the first half of 2002. Basic and diluted earnings per share for the second quarter of 2003 were $.42 per share, up from $.40 per share for the same period in 2002. Net interest income for the first half of 2003 increased by $261,000 or 3.3%, compared to the first half of 2002. Likewise, for the second quarter 2003, net interest income increased by $67,000 or 1.7%, compared to the same time period in 2002. This increase is a result of increased volume in earning assets. While the net interest margin averaged 4.90% for the first half of 2002, the margin began to compress during the third quarter last year and has continued to compress through the fourth quarter of 2002, averaging 4.71% for the year 2002. The compression has continued throughout the first half of 2003. For the first six months of 2003, the net interest margin has averaged 4.34%. With the current rate environment, the most recent federal funds rate reduction, the already low interest rates being paid on deposit accounts and loans continuing to be refinanced at lower rates, continued compression of the margin could occur, which could negatively impact net interest income in future periods. Peoples recorded a $300,000 provision for loan losses during the first half of 2003, that was up $120,000, as compared to a provision of $180,000 for the first half of 2002. The provision for the second quarter of 2003, totaled $150,000, which was up $60,000 compared to the second quarter 2002. As a percentage of loans, the allowance for loan losses was 1.44% at June 30, 2003, compared to 1.49% at year-end 2002 and 1.56% at June 30, 2002. Provisions for loan losses are charged to income to bring the allowance for loan losses to a level deemed appropriate by management. Management determines the adequacy of the allowance based on on-going quarterly assessments of the loan portfolio, including such factors as: changes in the nature and volume of the portfolio, effects of concentrations of credit, current and projected economic and business conditions, regulatory and consultant recommendations, repayment patterns on loans, borrower's financial condition, current charge-offs, trends in volume and severity of past due loans and classified loans, potential problem loans and supporting collateral. Management believes the allowance is presently adequate to cover the inherent risks associated with Peoples' loan portfolio. 17 Non-interest income increased by $617,000 or 29.3% and $375,000 or 36.7% for the six and three month time periods ending June 30, 2003, respectively compared to the same periods in 2002. The largest increase in non-interest income for the first half of 2003 compared to 2002 was $307,000 in mortgage banking activities. Peoples derives this income from the sale of residential mortgage loans on the secondary market. The favorable rate environment for mortgage banking activities during 2003 and 2002 has led to an increased demand for both purchase-money and refinancing mortgage loans. This increased demand and Peoples' efforts to expand the mortgage business by working more closely with local realtors in its market area has led to the increased income from mortgage banking activities. In addition, service charges on deposit accounts increased by $192,000 or 28.4%, compared to the first half of 2002. The increased service charges on deposit accounts are consistent with the continued growth in the Bank's core deposit accounts, which generate these fees. Income from fiduciary activities was up by $37,000 or 13.0%, compared to the first six months of 2002. The income increase is consistent with the increase in Peoples' Trust Department total assets under management, which equaled $129,334,000 on June 30, 2003, up from $106,187,000 at June 30, 2002. Contrary to that, investment management fees from Wilmerding decreased by $96,000 or 24.8% for the same time period. This decrease is consistent with Wilmerding's total assets under management, which equaled $209,765,000 on June 30, 2003, down from $236,820,000 at June 30, 2002. Peoples has reached an agreement with an unaffiliated third party for the sale of Wilmerding, which is expected to be a stock sale with an anticipated closing date in the third quarter. Other income reflected an increase of $168,000 or 38.7% for the first half of 2003, compared to 2002. This increase was a result of increased income from debit card commissions, earnings from investment sales through INVEST, a third party for which Peoples uses to sell investment products, and incurring a small gain on the sale of a fixed asset during the first half of 2003 versus a loss on the sale of a fixed asset in 2002. Total non-interest expense increased by $425,000 or 6.3% for the first half of 2003, compared to the same time period in 2002, and $262,000 or 7.8% for the second quarter of 2003 compared to 18 the second quarter 2002. The largest increase in non-interest expense was in salaries and employee benefits, which increased by $322,000 or 7.8% for the first half of 2003, compared to the first half of 2002. The increases in payroll and payroll related expenses resulted from normal merit increases, additions to staff and increased incentive compensation accruals. Increases in salary and benefits are anticipated as Peoples continues to grow in size and number of locations. Comparing the first half of 2003 to first half of 2002, occupancy expenses were up by $49,000, furniture and fixture expense increased $20,000, communications and supplies expense was up $13,000, taxes other than income was up $12,000, and other operating expenses were up $17,000. These increases were partially offset by a decrease of $8,000 in professional fees. Income tax expense was $934,000 for the first half of 2003, compared to $779,000 for first half of 2002 and $471,000 for the second quarter 2003, compared to $410,000 for the second quarter 2002. Income tax expense as a percentage of income before income taxes was 27.3% for the half of 2003, compared to 25.2% for the first half of 2002. The difference in Peoples' effective tax rate from the statutory rate of 34.0% is a result of tax-exempt income on loans, securities, and bank owned life insurance, along with tax credits on an investment in a low- income housing partnership. Liquidity Liquidity represents Peoples' ability to efficiently manage cash flows to support customers' loan demand, withdrawals by depositors, the payment of operating expenses, as well as the ability to take advantage of business and investment opportunities as they arise. One of Peoples' sources of liquidity is $335,802,000 in core deposits at June 30, 2003, which increased $38,111,000 over total core deposits of $297,691,000 at year-end. Core deposits consist of demand deposits, NOW and Super NOW, money market funds, savings, and time deposits under $100,000. Other sources of liquidity are available from investments in interest-bearing deposits with banks and federal funds sold, which totaled $27,753,000, and securities maturing in one year or less, which totaled $10,455,000, at June 30, 2003. In comparison, interest-bearing due from banks and federal funds sold totaled $9,980,000 and 19 securities maturing in one year or less totaled $11,167,000, at year-end 2002. In addition, Peoples has established federal funds lines of credit with other commercial banks, has borrowing capacity with the Federal Home Loan Bank of Pittsburgh, and has the Federal Reserve Discount Window, any of which can be drawn upon if needed as a source of liquidity. Management is of the opinion that Peoples' liquidity is sufficient to meet its anticipated needs. Capital Resources Total stockholders' equity was $48,803,000 as of June 30, 2003, representing a $1,939,000 increase from the beginning of the year. The growth in capital was primarily a result of net earnings retention of $1,596,000, along with an increase of $343,000 in accumulated other comprehensive income. At June 30, 2003, Peoples had a leverage ratio of 10.90%, a Tier I capital to risk-based assets ratio of 12.87%, and a total capital to risk-based assets ratio of 14.12%. At June 30, 2003, the Bank had a leverage ratio of 9.38%, a Tier I capital to risk-based assets ratio of 11.00%, and a total capital to risk- based assets ratio of 12.26%. These ratios indicate Peoples First, Inc. and the Bank both exceed the federal regulatory minimum requirements to be considered "well capitalized." In 2001, shareholders approved the 2001 Stock Option Plan. On June 17, 2003, 85,950 options were granted under the plan. Item 3. Quantitative and Qualitative Disclosure about Market There are no material changes in Peoples' interest rate risk exposure since December 31, 2002. Please refer to the Annual Report on Form 10-K of Peoples First, Inc. for the year ended December 31, 2002, filed with the Securities and Exchange Commission. Item 4. Controls and Procedures Peoples, under the supervision and with the participation of Peoples' management, including the Chief Executive Officer and the Chief Financial Officer, has evaluated the effectiveness of the design and operation of Peoples' disclosure controls and 20 procedures. Based on that evaluation, Peoples' Chief Executive Officer and Chief Financial Officer concluded that Peoples' disclosure controls and procedures are effective as of June 30, 2003. There has been no change in Peoples' internal control over financial reporting that occurred during the quarter ended June 30, 2003 that has materially affected, or is reasonably likely to materially affect, Peoples' internal control over financial reporting. Securities and Exchange Commission rules define "disclosure controls and procedures" as controls and other procedures of an issuer that are designed to ensure that information required to be disclosed by the issuer in the reports that it files or submits under the Securities Exchange Act of 1934 is recorded, processed, summarized and reported within the time periods specified in the Commission's rules and forms. Disclosure controls and procedures include, without limitation, controls and procedures designed to ensure that such information is accumulated and communicated to the issuer's management, including its principal executive officer and principal financial officer, as appropriate to allow timely decisions regarding required disclosure. PART II - OTHER INFORMATION Item 1. Legal Proceedings Not Applicable Item 2. Changes in Securities and Use of Proceeds Not Applicable Item 3. Defaults Upon Senior Securities Not Applicable Item 4. Submission of Matters to a Vote of Security Holders The Annual Meeting of Shareholders of Peoples First, Inc. was held on May 13, 2003. The only matter presented for shareholder action at the meeting was the election of three (3) class III directors to hold office for three years from the election date. 21 There was no solicitation in opposition to the nominees of the Board of Directors for election as directors. All nominees of the Board of Directors were elected. The number of votes cast for or withheld for each nominee was as follows: Nominee Name Votes for Votes withheld ------------ ------------ -------------- George C. Mason 2,306,508.66 18,122.00 Ross B. Cameron, Jr. 2,322,704.00 1,927.00 Lawrie R. Drennen, Jr. 2,321,138.20 3,492.46 Item 5. Other Information Not Applicable Item 6. Exhibits and Reports on Form 8-K (a) Exhibits Exhibit Title 3.1 Articles of Incorporation of Peoples First, Inc.. (Incorporated by reference to Exhibit 3.1 to Peoples' Registration Statement on Form S-4, No. 333-30640.) 3.2 Bylaws of Peoples First, Inc.. (Incorporated by reference to Exhibit 3.2 to Peoples' Registration Statement on Form S-4, No. 333-30640.) 31.1 Exchange Act Rules 13a-14 and 15d-14 Certification of Chief Executive Officer 31.2 Exchange Act Rules 13a-14 and 15d-14 Certification of Chief Financial Officer 32.1 18 U.S.C. Section 1350 Certification of Chief Executive Officer under Section 906 of the Sarbanes- Oxley Act of 2002 32.2 18 U.S.C. Section 1350 Certification of Chief Financial Officer under Section 906 of the Sarbanes- Oxley Act of 2002 22 (b) Reports on Form 8-K Peoples filed a Form 8-K on May 1, 2003 disclosing a press release issued by Peoples discussing first quarter earnings. 23 SIGNATURES Pursuant to the requirements of the Securities Exchange Act of 1934, Peoples has duly caused this report to be signed on its behalf by the undersigned thereunto duly authorized. PEOPLES FIRST, INC. (Registrant) Date: August 13, 2003 BY: /s/ Hugh J. Garchinsky ----------------------------- Hugh J. Garchinsky President and Chief Executive Officer Date: August 13, 2003 BY: /s/ Susan H. Reeves ----------------------------- Susan H. Reeves Senior Vice President and Chief Financial Officer 24 1 08/08/03/SL1 373382v1/00000.000 1 08/08/03/SL1 373382v1/00000.000

PEOPLES FIRST INC 10-Q