PEOPLES FIRST INC - 10-Q Quarterly Report

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UNITED STATES
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 SEPTEMBER 30, 2002 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 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
2,968,284 shares outstanding as of September 30, 2002

Item 1. Financial Statements

PEOPLES FIRST, INC.
CONSOLIDATED BALANCE SHEETS
(In Thousands)

Note: The balance sheet at December 31, 2001, has been derived
from the audited financial statements at that date.

The accompanying notes are an integral part of these financial
statements.

PEOPLES FIRST, INC.
CONSOLIDATED STATEMENTS OF INCOME
(Unaudited)
(In Thousands, Except Per Share Data)

The accompanying notes are an integral part of these financial
statements.

PEOPLES FIRST, INC.
CONSOLIDATED STATEMENTS OF CASH FLOWS
(Unaudited)
(In Thousands)

The accompanying notes are an integral part of these financial
statements.

PEOPLES FIRST, INC.
CONSOLIDATED STATEMENTS OF STOCKHOLDERS' EQUITY
For the Nine Months Ended September 30, 2001
(Unaudited)
(In Thousands)

PEOPLES FIRST, INC.
CONSOLIDATED STATEMENTS OF STOCKHOLDERS' EQUITY
For the Nine Months Ended September 30, 2002
(Unaudited)
(In Thousands)

PEOPLES FIRST, INC.
NOTES TO FINANCIAL STATEMENTS
(Unaudited)

September 30, 2002

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"). Peoples 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. 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 nine months ended
September 30, 2002 are not necessarily indicative of the results
that may be expected for the year ended December 31, 2002.

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
Report on Form 10-K of Peoples First, Inc. filed with the
Securities and Exchange Commission for the year ended
December 31, 2001.

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, 2001.

Note C - Comprehensive Income

The only comprehensive income item that Peoples presently has is
unrealized gains (losses) on securities available for sale.
Total comprehensive income, which is the sum of net income and
other comprehensive income for the three month and nine month
periods ended September 30, 2002, was $1,930,000 and $4,569,000
compared to $1,495,000 and $3,909,000 for the same period last
year. The federal income taxes allocated to the unrealized
gains are as follows:

Nine Months Three Months
Ended Ended
September 30, September 30,
2002 2001 2002 2001
---------------- --------------
(In Thousands)
Unrealized holding gains
arising during the period:
Before tax amount $1,392 $1,229 $ 891 $ 668
Income tax effect (473) (418) (303) (227)
---------------- --------------
Net of tax amount $ 919 $ 811 $ 588 $ 441
================ ==============

Note D - New Accounting Standards

Financial Accounting Standard Board ("FASB") Statement No. 142,
"Goodwill and Other Intangible Assets," prescribes that goodwill
associated with a business combination and intangible assets
with an indefinite useful life should not be amortized but
should be tested for impairment at least annually. The
Statement requires intangibles that are separable from goodwill
and that have a determinable useful life to be amortized over
the determinable useful life. The provisions of this Statement
became effective for Peoples in January 2002. Upon adoption of
this statement, goodwill and other intangible assets arising
from acquisitions completed before July 1, 2001 would be
accounted for in accordance with the provisions of this
statement. This transition provision could require a
reclassification of a previously separately recognized
intangible to goodwill and vice versa if the intangibles in
question do not meet the new criteria for classification as a
separately recognizable intangible. Adoption of this Statement
did not have an impact on Peoples' financial condition or
results of operations as Peoples had no goodwill or other
intangibles on its balance sheet.

In July 2001, the FASB issued Statement 143, "Accounting for
Asset Retirement Obligations," which addresses the financial
accounting and reporting for obligations associated with the
retirement of tangible long-lived assets and the associated
asset retirement costs. This Statement requires that the fair
value of a liability for an asset retirement obligation be
recognized in the period in which it is incurred if a reasonable
estimate of fair value can be made. The associated asset
retirement costs are capitalized as part of the carrying amount
of the long-lived asset. This Statement will become effective
for Peoples on January 1, 2003 and will not have an impact on
Peoples' financial condition or results of operations.

In August 2001, the FASB issued Statement 144, "Accounting for
the Impairment of or Disposal of Long-Lived Assets." This
Statement supersedes FASB Statement No. 121, "Accounting for the
Impairment of Long-Lived Assets and for Long-Lived Assets to Be
Disposed Of," and the accounting and reporting provisions of APB
Opinion No. 30, "Reporting the Results of Operations - Reporting
the Effects of Disposal of a Segment of a Business, and
Extraordinary, Unusual and Infrequently Occurring Events and
Transactions for the disposal of a segment of a business." This
Statement also amends ARB No. 51, "Consolidated Financial
Statements." The provisions of this Statement became effective
for Peoples on January 1, 2002 and did not have a significant
impact on Peoples' financial condition or results of operations.

In April 2002, the Financial Accounting Standards Board issued
Statement No. 145, "Rescission of Statements No. 4, 44 and 64,
Amendment of Statement No. 13." This statement requires that
debt extinguishment no longer be classified as an extraordinary
item since debt extinguishment has become a risk management
strategy for many companies. It also eliminates the
inconsistent accounting treatment for sale-leaseback
transactions and certain lease modifications that have economic
effects similar to sale-leaseback transactions. This statement
became effective May 15, 2002 and did not have any impact on
Peoples' financial condition or results of operations.

In June 2002, the Financial Accounting Standards Board issued
Statement No. 146, "Accounting for Costs Associated with Exit or
Disposal Activities," which nullifies EITF Issue 94-3,
"Liability Recognition for Certain Employee Termination Benefits
and Other Costs to Exit an Activity (including Certain Costs
Incurred in a Restructuring)." This statement delays
recognition of these costs until liabilities are incurred and
requires fair value measurement. It does not impact the
recognition of liabilities incurred in connection with a
business combination or the disposal of long-lived assets. The
provisions of this statement are effective for exit or disposal
activities initiated after December 31, 2002 and are not
expected to have a significant impact on Peoples' financial
condition or results of operations.

In October 2002, the Financial Accounting Standards Board issued
Statement No. 147, "Acquisitions of Certain Financial
Institutions." This statement provides guidance on accounting
for the acquisition of a financial institution, including the
acquisition of part of a financial institution. The statement
defines criteria for determining whether the acquired financial
institution meets the conditions for a "business combination."
If the acquisition meets the conditions of a "business
combination," the specialized accounting guidance under
Statement No. 72, "Accounting for Certain Acquisitions of
Banking or Thrift Institutions" will not apply after September
30, 2002 and the amount of the unidentifiable intangible asset
will be reclassified to goodwill upon adoption of Statement No.
147. The transition provisions were effective on October 1,
2002 and did not have any 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,
(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, 2001)
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 estimate in the preparation of Peoples'
financial statements is for the allowance for loan losses.
Please refer to the discussion of this calculation under
"Results of Operations" below.

Financial Condition

Total assets of Peoples increased $44,151,000 or 12.2% during
the first nine months of 2002. Increases in deposits of
$34,476,000, long-term debt of $6,532,000, other liabilities of
$908,000 and the increase in retained earnings of $2,490,000
were the primary resources for the growth in assets. This growth
funded an increase in net loans of $37,088,000 or 15.0% for the
first nine months of 2002. In addition, federal funds sold
increased $9,180,000 and accrued interest receivable and other
assets increased $1,924,000 along with increases in interest-
bearing deposits with banks of $306,000 and cash and due from
bank balances of $240,000. Peoples' investment in FHLB stock
increased by $201,000 resulting from the FHLB's stock ownership
requirements as it relates to the long-term debt increase. Total
securities decreased by $4,647,000 along with a decrease of
$141,000 in net premises and equipment.

Net loans grew $37,088,000 or 15.0% for the first nine months of
2002. The majority of this loan growth was in real estate
secured loans, which increased $32,501,000 or 16.5% and total
consumer loans were up $4,139,000 or 43.6%. The growth in real
estate loans was distributed throughout the various categories
in which commercial loans increased $8,310,000, construction and
development loans were up $8,061,000, home equity lines of
credit increased $6,667,000, residential first mortgages grew
$4,792,000, multi-family mortgages were up $4,575,000 and
agricultural loans increased $1,348,000. The only real estate
secured category to decrease was residential second liens, which
decreased by $1,252,000.

Total deposits increased by $34,476,000 or 12.2% since year-end
2001. The increases were in all deposit categories with demand
deposit accounts up $6,732,000 or 9.8%, NOW and SuperNOW
accounts grew $11,381,000 or 20.5%, money market accounts were
up $9,816,000 or 37.5%, savings accounts increased $4,909,000 or
11.7% and time deposits increased $1,638,000 or 1.8% for the
nine months ended September 30, 2002. The effects of the
depressed stock market have contributed to the growth in
deposits, along with public funds deposits from collected tax
revenues and Peoples' expansion and business development.

Results of Operations

Net income for the first nine months of 2002 was $3,650,000 or
$1.22 per share and totaled $1,342,000 or $.45 per share for the
three months ended September 30, 2002. In comparison, net
income for the first nine months of 2001 was $3,098,000 or $1.02
per share and $1,054,000 or $.35 per share for the quarter ended
September 30, 2001. This reflects a $552,000 or 17.8% increase
in net income for the first nine months of 2002 compared to 2001
and an increase of $288,000 or 27.3% for the third quarter 2002
compared to the third quarter 2001.

Net interest income for the first nine months 2002 increased by
$1,344,000 or 12.7% compared to the first nine months of 2001.
Likewise, for the third quarter 2002, net interest income
increased by $476,000 or 13.3% compared to the same time period
in 2001. This increase is a result of increased volume and an
improved net interest margin. The net interest margin held
steady at 4.71% for the year 2001. For the first nine months of
2002, the net interest margin has averaged 4.79%, adding to net
interest income. While the margin for the first nine months of
2002 has remained above 2001 levels, during the third quarter it
again started to compress. With the current rate environment
and loans continuing to be refinanced at lower rates, Peoples
anticipates continued compression of the margin, which could
negatively impact net interest income in future periods.

Peoples recorded a $330,000 provision for loan losses for the
first nine months of 2002, as compared to a provision of
$270,000 for the first nine months of 2001. The provision for
the third quarter of 2002, totaled $150,000 which was up by
$90,000 or 150.0% compared to the third quarter 2001. As a
percentage of loans, the allowance for loan losses was 1.53% at
September 30, 2002, compared to 1.66% at year-end 2001 and 1.70%
at September 30, 2001. Although the amount of the allowance for
loan losses at September 30, 2002 increased $236,000, or 5.6%,
over the amount at December 31, 2001, the allowance for loan
losses as a percentage of total loans has declined 13 basis
points since year-end 2001, principally as a result of loan
growth. Because the loan growth over the first nine months of
2002 primarily involved real estate loans, management did not
feel it necessary to maintain the level of the allowance for
loan losses, as a percentage of total loans, at the same level
that existed at December 31, 2001. 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.

Non-interest income increased by $554,000 or 18.4% and $416,000
or 39.9% for the nine and three month time periods ending
September 30, 2002, respectively, compared to the same periods
in 2001. The largest increase in non-interest income for the
first nine months of 2002 compared to 2001 was $387,000 in
realized gains on securities that were called. This gain
resulted from a recovery of the write-down that was taken on
these same bonds during the fourth quarter of 2000, along with a
2% premium that was paid on the called principal. Fees from
mortgage banking activities, added an additional $181,000 to
non-interest income in the first nine months of 2002 compared to
the same period in 2001, increasing 54.7%. Peoples derives this
income from the sale of residential mortgage loans on the
secondary market. The favorable rate environment for mortgage
banking activities during 2001 and 2002 has led to an increase
in mortgage loan and refinancing demand. This increased demand
and Peoples' efforts to expand the business by working more
closely with local realtors has led to the increased fee income
from mortgage banking activities. In addition, service charges
on deposit accounts increased by $97,000 or 10.0%, compared to
the first nine months of 2001. 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 $25,000 or 6.2% compared to
the first nine months of 2001. Contrary to that, investment
management fees from Wilmerding decreased by $34,000 or 6.0% for
the same time period. The investment management fees for
Wilmerding decreased as a result of a change in status of
certain accounts and a downturn in the market impacting the
value of securities under management and ultimately the
management fees assessed. Peoples' Trust Department and
Wilmerding's total assets under management equaled $326,169,000
on September 30, 2002, down from $341,180,000 at September 30,
2001.

There were other decreases in non-interest income, the largest
being an $84,000 write-down on an impaired security. This bond
is a municipal bond under a Housing and Urban Development
Program. The balance of the bond, net of the 15% reserve, is
$476,000. Management continues to closely monitor this security.
Also reflecting a decrease, other income was down by $18,000 or
2.4% for the first nine months 2002 compared to 2001, which
resulted primarily from a loss on the sale of an asset.

Total non-interest expense increased by $1,140,000 or 12.5% for
the first nine months of 2002 compared to the same time period
in 2001 and $394,000 or 12.6% for the third quarter of 2002
compared to the third quarter 2001. The largest increase in
non-interest expense was in salaries and employee benefits,
which increased by $805,000 or 14.6% for the first nine months
of 2002 compared to the first nine months 2001. The increases in
payroll and payroll related expenses resulted from normal merit
increases, additions to staff and increased incentive
compensation accruals, along with the rising costs of medical
insurance. Increases in salary and benefits are anticipated as
Peoples continues to grow in size and number of locations.

Comparing the first nine months of 2002 to the first nine months
of 2001, other expenses were up by $276,000 or 19.5%, primarily
as a result of increased loan origination related expenses and
fees paid by Peoples on deposit accounts with other banks.
Increases were noted in furniture and fixture expense, which
increased $89,000 or 19.8%, along with occupancy expense, which
reflected an increase of $76,000 or 11.6%. The Rising Sun
Branch that opened in December 2001 contributed to the increase
in occupancy and furniture and fixture expenses. As Peoples
continues to add new offices and services, additional operating
costs will be generated. Over time it is anticipated these
costs will be offset by the additional income generated through
the expansion of services to our customers and community and new
business development. Taxes, other than income, which is
primarily Pennsylvania shares tax expense, were up $15,000 or
5.4%, which correlates with growth in the Bank's shareholders'
equity. Reductions were achieved in communications and supplies
expense, which were down by $28,000 or 5.5%, along with
professional fees which decreased by $93,000 or 33.7%. These
reductions were a result of improved management of the supply
inventory and reduced legal and consulting costs.

Income tax expense was $1,271,000 for the first nine months of
2002 compared to $1,125,000 for first nine months of 2001, and
$492,000 for the third quarter 2002 compared to $372,000 for the
third quarter 2001. Income tax expense as a percentage of
income before income taxes was 25.8% for the first nine months
of 2002 compared to 26.6% for the first nine months of 2001.
The decrease in Peoples' effective tax rate away 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 $294,484,000 in core deposits at September 30,
2002, which increased $34,443,000 over total core deposits of
$260,041,000 at year-end. Other sources of liquidity are
available from investments in interest-bearing deposits with
banks and federal funds sold which totaled $19,729,000, and
securities maturing in one year or less, which totaled
$12,375,000, at September 30, 2002. In comparison, interest-
bearing due from banks and federal funds sold totaled
$10,243,000 and securities maturing in one year or less totaled
$10,250,000 at year-end 2001. In addition, Peoples has
established federal funds lines of credit with other commercial
banks and with the Federal Home Loan Bank of Pittsburgh, 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 $46,407,000 as of September 30,
2002, representing a $2,765,000 increase from the beginning of
the year. The growth in capital was primarily a result of net
earnings retention of $2,490,000, along with increased
accumulated other comprehensive income up $919,000, and
partially offset with treasury stock purchases of $644,000. In
November 2001, the Board approved a second stock repurchase plan
authorizing the repurchase of $1,000,000 in Peoples' stock with
a termination date of October 2002. Under this plan 33,843
shares have been repurchased at a cost of $728,000 through
September 30, 2002. In addition, on June 18, 2002, the Board
approved a third repurchase plan for repurchasing another
$1,000,000 in Peoples' stock with a termination date of June
2003.

At September 30, 2002, Peoples had a leverage ratio of 11.40%, a
Tier I capital to risk-based assets ratio of 14.51% and a total
capital to risk-based assets ratio of 15.76%. At September 30,
2002, the Bank had a leverage ratio of 9.62%, a Tier I capital
to risk-based assets ratio of 12.10% and a total capital to
risk-based assets ratio of 13.35%. 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. No
options have been granted under this plan.

Item 3. Quantitative and Qualitative Disclosure about Market
Risk

There are no material changes in Peoples' interest rate risk
exposure since December 31, 2001. Please refer to the Annual
Report on Form 10-K of Peoples First, Inc. for the year ended
December 31, 2001, filed with the Securities and Exchange
Commission.

Item 4. Controls and Procedures

Within ninety days prior to filing this report, Peoples, under
the supervision and with the participation of Peoples'
management, including the Chief Executive Officer and the Chief
Financial Officer, evaluated the effectiveness of the design and
operation of Peoples' disclosure controls and procedures. Based
on that evaluation, Peoples' Chief Executive Officer and Chief
Financial Officer concluded that Peoples' disclosure controls
and procedures are effective. There were no significant changes
to Peoples' internal controls or in other factors that could
significantly affect these controls subsequent to the date of
their evaluation.

Securities and Exchange Commission Rule 13a-14 defines
"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
Not Applicable

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. (Incorporated by
reference to Exhibit 3.1 to Peoples' Registration
Statement on Form S-4, No. 333-30640.)

3.2 Bylaws of Peoples. (Incorporated by reference to
Exhibit 3.2 to Peoples' Registration Statement on Form
S-4, No. 333-30640.)

99.1 Certification of Chief Executive Officer under Section
906 of the Sarbanes-Oxley Act of 2002

99.2 Certification of Chief Financial Officer under Section
906 of the Sarbanes-Oxley Act of 2002

(b) Reports on Form 8-K
There were no reports filed on Form 8-K during the third
quarter of 2002.

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: November 13, 2002 BY: /s/ Hugh J. Garchinsky
------------------------------
Hugh J. Garchinsky
President and
Chief Executive Officer

Date: November 13, 2002 BY: /s/ Susan H. Reeves
------------------------------
Susan H. Reeves
Senior Vice President and
Chief Financial Officer

CERTIFICATIONS

I, Hugh J. Garchinsky, Chief Executive Officer of Peoples
First, Inc., certify that:

1. I have reviewed this quarterly report on Form 10-Q of
Peoples First, Inc.;

2. Based on my knowledge, this quarterly report does not
contain any untrue statement of a material fact or omit to state
a material fact necessary to make the statements made, in light
of the circumstances under which such statements were made, not
misleading with respect to the period covered by this quarterly
report;

3. Based on my knowledge, the financial statements, and
other financial information included in this quarterly report,
fairly present in all material respects the financial condition,
results of operations and cash flows of the registrant as of,
and for, the periods presented in this quarterly report;

4. The registrant's other certifying officers and I are
responsible for establishing and maintaining disclosure controls
and procedures (as defined in Exchange Act Rules 13a-14 and 15d-
14) for the registrant and we have:

(a) designed such disclosure controls and procedures
to ensure that material information relating to the
registrant, including its consolidated subsidiaries, is
made known to us by others within those entities,
particularly during the period in which this quarterly
report is being prepared;

(b) evaluated the effectiveness of the registrant's
disclosure controls and procedures as of a date within
90 days prior to the filing date of this quarterly report
(the "Evaluation Date"); and

(c) presented in this quarterly report our
conclusions about the effectiveness of the disclosure
controls and procedures based on our evaluation as of the
Evaluation Date;

5. The registrant's other certifying officers and I have
disclosed, based on our most recent evaluation, to the
registrant's auditors and the audit committee of registrant's
board of directors (or persons performing the equivalent
function):

(a) all significant deficiencies in the design or
operation of internal controls which could adversely affect
the registrant's ability to record, process, summarize and
report financial data and have identified for the
registrant's auditors any material weaknesses in internal
controls; and

(b) any fraud, whether or not material, that involves
management or other employees who have a significant role
in the registrant's internal controls; and

6. The registrant's other certifying officers and I have
indicated in this quarterly report whether or not there were
significant changes in internal controls or in other factors
that could significantly affect internal controls subsequent to
the date of our most recent evaluation, including any corrective
actions with regard to significant deficiencies and material
weaknesses.

Date: November 13, 2002

/s/ Hugh J. Garchinsky
------------------------------
Hugh J. Garchinsky
Chief Executive Officer

I, Susan H. Reeves, Chief Financial Officer of Peoples
First, Inc., certify that:

1. I have reviewed this quarterly report on Form 10-Q of
Peoples First, Inc.;

2. Based on my knowledge, this quarterly report does not
contain any untrue statement of a material fact or omit to state
a material fact necessary to make the statements made, in light
of the circumstances under which such statements were made, not
misleading with respect to the period covered by this quarterly
report;

3. Based on my knowledge, the financial statements, and
other financial information included in this quarterly report,
fairly present in all material respects the financial condition,
results of operations and cash flows of the registrant as of,
and for, the periods presented in this quarterly report;

4. The registrant's other certifying officers and I are
responsible for establishing and maintaining disclosure controls
and procedures (as defined in Exchange Act Rules 13a-14 and 15d-
14) for the registrant and we have:

(a) designed such disclosure controls and procedures
to ensure that material information relating to the
registrant, including its consolidated subsidiaries, is
made known to us by others within those entities,
particularly during the period in which this quarterly
report is being prepared;

(b) evaluated the effectiveness of the registrant's
disclosure controls and procedures as of a date within
90 days prior to the filing date of this quarterly report
(the "Evaluation Date"); and

(c) presented in this quarterly report our
conclusions about the effectiveness of the disclosure
controls and procedures based on our evaluation as of the
Evaluation Date;

5. The registrant's other certifying officers and I have
disclosed, based on our most recent evaluation, to the
registrant's auditors and the audit committee of registrant's
board of directors (or persons performing the equivalent
function):

(a) all significant deficiencies in the design or
operation of internal controls which could adversely affect
the registrant's ability to record, process, summarize and
report financial data and have identified for the
registrant's auditors any material weaknesses in internal
controls; and

(b) any fraud, whether or not material, that involves
management or other employees who have a significant role
in the registrant's internal controls; and

6. The registrant's other certifying officers and I have
indicated in this quarterly report whether or not there were
significant changes in internal controls or in other factors
that could significantly affect internal controls subsequent to
the date of our most recent evaluation, including any corrective
actions with regard to significant deficiencies and material
weaknesses.

Date: November 13, 2002

/s/ Susan H. Reeves
------------------------------
Susan H. Reeves
Chief Financial Officer