8-K

UNITED STATES
SECURITIES AND EXCHANGE COMMISSION

WASHINGTON, DC 20549

FORM 8-K

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

Date of Report (Date of earliest event reported) July 28, 2010

PEOPLES FINANCIAL CORPORATION

(Exact Name of Registrant as Specified in its Charter)

Mississippi
(State or Other Jurisdiction of Incorporation)

01-12103	64-0709834
(Commission File Number)	(IRS Employer Identification No.)
152 Lameuse Street Biloxi, MS	39530
(Address of Principal Executive Offices)	(Zip Code)

(228) 435-5511
(Registrant’s Telephone Number, Including Area Code)

(Former Name or Former Address, if Changed Since Last Report)

Check the appropriate box below if the Form 8-K filing is intended to simultaneously Satisfy the filing obligation of the registrant under any of the following provisions (see General Instructions A.2 below):

o Written communications pursuant to Rule 425 under the Securities Act (17 CFR 230. 425)

o Soliciting material pursuant to Rule 14a-12 under the Exchange Act (17CFR 240.14a-12)

o Pre-commencement communications pursuant to Rule 14d-2(b) under the Exchange Act ( 17CFR 240.14d-2(b))

o Pre-commencement communications pursuant to Rule 13e-4(c) under the Exchange Act (17 CFR 240.13e-4(c))

Item 2.02. Results of Operations and Financial Condition

On July 28, 2010 Peoples Financial Corporation issued a press release announcing its earnings for the first half of 2010.

Item 9.01. Financial Statements and Exhibits.

(c) Exhibits

99.1 Press Release issued by Peoples Financial Corporation dated July 28, 2010, headed “Peoples Financial Corporation Earnings Jump 66% Over Previous Quarter Primarily Due to Securities Sales.”

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 hereunto duly authorized.

Dated: July 28, 2010

PEOPLES FINANCIAL CORPORATION
By:	/s/ Chevis C. Swetman
	Chevis C. Swetman
	Chairman, President and CEO

EX-99.1

Exhibit 99.1

FOR IMMEDIATE RELEASE

For more information, contact:
Investor Relations
228-435-8208
investorrelations@thepeoples.com

PEOPLES FINANCIAL CORPORATION EARNINGS JUMP 66%
OVER PREVIOUS QUARTER PRIMARILY DUE TO SECURITIES SALES

BILOXI, MS (July 28, 2010)—Second quarter earnings of Peoples Financial Corporation (NASDAQ Capital Market: PFBX), parent of The Peoples Bank, increased 66% over the first quarter of 2010, primarily due to sales of securities, announced Chevis C. Swetman, chairman and chief executive officer of the holding company and the bank.

Net income for the quarter ended June 30, 2010, totaled $1,446,000, compared to $872,000 for the first quarter of the year. Securities sales of $34 million during the second quarter resulted in $1,035,000 of net income.

Earnings for the first half of 2010 totaled $2,318,000, an increase of 22% over the same period in 2009.

Earnings per share for the most recent quarter were $.28 per weighted average share, seven times the $.04 per share for the same period last year. Earnings per share figures are based on weighted average shares outstanding of 5,151,697 for the three months ended June 30, 2010 and 5,157,356 for the three months ended June 30, 2009.

For the first half of 2010, earnings per share totaled $.45 per average weighted share, compared to $.37 per share in the same period last year. Earnings per share figures are based on weighted average shares outstanding of 5,151,697 for the six months ended June 30, 2010 and 5,189,474 for the six months ended June 30, 2009.

“We were able to deliver solid earnings in the last quarter, due to an increase in non-interest income, predominantly securities sales; strict internal cost controls and rational pricing of our deposit base,” said Swetman. “There comes a time when you need to take securities gains off the table. The majority of these gains came from the liquidation of our mortgage-backed securities portfolio and the sale of short term U.S. Treasuries,” he said.

“We also added more than $1,500,000 to our provision for loan losses, as we continue to carefully monitor every single credit in our bank,” Swetman added.

Provision for loan losses totaled $1,585,000 for the most recent quarter, compared to $1,150,000 in the last quarter. For the full year to date, loan loss reserves have totaled $2,735,000, compared to $1,850,000 for the first six months of 2009.

Loan volume was about flat with the previous quarter, down less than 1%. “Business activity across the Gulf Coast remains sluggish, and the media coverage of the BP oil spill is not helping our

tourism industry,” said Swetman. “We are watching the situation carefully to see if this environmental disaster has any significant impact on our own business,” he added.

Founded in 1896, with $888 million in assets as of June 30, 2010, The Peoples Bank operates 16 branches along the Mississippi Gulf Coast in Hancock, Harrison, Jackson and Stone counties. In addition to a comprehensive range of retail and commercial banking services, the bank also operates a trust and investment services department that has provided customers with financial, estate and retirement planning services since 1936.

The Peoples Bank is a wholly-owned subsidiary of Peoples Financial Corporation, listed on the NASDAQ Capital Market under the symbol PFBX. Additional information is available on the Internet at www.thepeoples.com.

This news release contains forward-looking statements and reflects industry conditions, company performance and financial results. These forward-looking statements are subject to a number of risk factors and uncertainties which could cause the Company’s actual results and experience to differ from the anticipated results and expectation expressed in such forward-looking statements.

PEOPLES FINANCIAL CORPORATION

(In thousands, except per share figures) (Unaudited)

EARNINGS SUMMARY	Three Months Ended June 30,					Six Months Ended June 30,
	2010		2009			2010		2009
Net interest income	$	6,556	$	6,569		$	13,548	$	12,844
Provision for loan losses		1,585		1,502			2,735		1,850
Non-interest income		3,685		2,166			5,818		4,789
Non-interest expense		6,687		7,083			13,616		13,639
Income taxes		522		(50	)		697		240
Net income		1,446		200			2,318		1,904
Earnings per share		.28		.04			.45		.37

TRANSACTIONS IN THE ALLOWANCE FOR LOAN LOSSES
	Three Months Ended June 30,						Six Months Ended June 30,
	2010			2009			2010			2009
Allowance for loan losses January 1,	$	8,279		$	11,373		$	7,828		$	11,114
Recoveries		18			224			74			329
Charge-offs		(714	)		(3,301	)		(1,469	)		(3,495	)
Provision for loan losses		1,585			1,502			2,735			1,850
Allowance for loan losses June 30,	$	9,168		$	9,798		$	9,168		$	9,798

ASSET QUALITY	June 30,
	2010			2009
Allowance for loan losses as a percentage of loans		2.06	%		2.10	%
Loans past due 90 days and still accruing	$	7,595		$	1,659
Nonaccrual loans		23,461			14,284

PERFORMANCE RATIOS (annualized)	June 30,
	2010			2009
Return on average assets		.52	%		.41	%
Return on average equity		4.41	%		3.63	%
Net interest margin		3.60	%		3.17	%
Efficiency ratio		82	%		86	%
Primary capital		13.07	%		12.06	%

BALANCE SHEET SUMMARY	June 30,
	2010		2009
Total assets	$	888,499	$	946,324
Securities		351,289		391,637
Loans		445,736		467,165
Other real estate		1,397		2,451
Total deposits		519,555		518,293
Total federal funds purchased		170,872		236,971
Shareholders’ equity		106,822		102,561
Book value per share		20.74		19.91
Weighted average shares		5,151,697		5,189,474