PEOPLES FIRST INC - 10-Q Quarterly Report

Back to GetFilings.com

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 MARCH 31, 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 March 31, 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

PEOPLES FIRST, INC.
CONSOLIDATED STATEMENTS OF INCOME
(Unaudited)

See Notes to Consolidated Financial Statements

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

See Notes to Consolidated Financial Statements

PEOPLES FIRST, INC.
CONSOLIDATED STATEMENTS OF STOCKHOLDERS' EQUITY
For the Three Months Ended March 31, 2002
(Unaudited)

PEOPLES FIRST, INC.
CONSOLIDATED STATEMENTS OF STOCKHOLDERS' EQUITY
For the Three Months Ended March 31, 2003
(Unaudited)

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

March 31, 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"). 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. 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. 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 months ended
March 31, 2003, are not necessarily indicative of the results
that may be expected for the year ended 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
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.

Note C - Comprehensive Income

The only comprehensive income item that Peoples presently has is
unrealized losses on securities available for sale. Total
comprehensive income, which is the sum of net income and other
comprehensive income for the three month period ended March 31,
2003, was $1,168,000 compared to $701,000 for the same period
last year. The federal income taxes allocated to the unrealized
losses are as follows:

Three months Ended
March 31,
------------------
2003 2002
----- ------
(In Thousands)
Unrealized holding losses arising during
the period:
Before tax amount $(98) $(626)
Income tax effect 33 213
---- -----
Net of tax amount $(65) $(413)
==== =====

Note D - New Accounting Standards

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 became effective for
Peoples on January 1, 2003, and did not have an impact on
Peoples' financial condition or results of operations.

In July 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 and 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 November 2002, the Financial Accounting Standards Board
(FASB) issued FASB Interpretation No. 45 (FIN 45), "Guarantor's
Accounting and Disclosure Requirements for Guarantees, Including
Indirect Guarantees of Indebtedness of Others." This
Interpretation expands the disclosures to be made by a guarantor
in its financial statements about its obligations under certain
guarantees and requires the guarantor to recognize a liability
for the fair value of an obligation assumed under certain
specified guarantees. FIN 45 clarifies the requirements of FASB
Statement No. 5, "Accounting for Contingencies." In general,
FIN 45 applies to contracts or indemnification agreements that
contingently require the guarantor to make payments to the
guaranteed party based on changes in an underlying that is
related to an asset, liability or equity security of the
guaranteed party, which would include financial standby letters
of credit. Certain guarantee contracts are excluded from both
the disclosure and recognition requirements of this
Interpretation, including, among others, guarantees related to
commercial letters of credit and loan commitments. The
disclosure requirements of FIN 45 require disclosure of the
nature of the guarantee, the maximum potential amount of future
payments that the guarantor could be required to make under the
guarantee and the current amount of the liability, if any, for
the guarantor's obligations under the guarantee. The accounting
recognition requirements of FIN 45 are to be applied
prospectively to guarantees issued or modified after
December 31, 2002. Adoption of FIN 45 did not have a
significant impact on Peoples' financial condition or results of
operations.

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 nonperformance by the other party to the financial
instrument for standby letters of credit is represented by the
contractual amount of those instruments. Peoples had $5,434,000
of standby letters of credit as of March 31, 2003. 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
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 March 31, 2003 for guarantees under standby
letters of credit issued after December 31, 2002 is not
material.

In April 2003, the Financial Accounting Standards Board 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.

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, 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 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 $26,432,000 or 6.5% during the
first quarter of 2003. Increases in deposits of $16,768,000,
securities sold under agreements to repurchase of $7,265,000,
long-term debt of $1,822,000, and the increase in retained
earnings of $788,000 were the primary resources for the growth
in assets. This growth funded increases in federal funds sold
of $22,674,000 and net loans of $5,858,000, along with an
increase in interest-bearing deposits with banks of $1,742,000,
for the first quarter of 2003. Peoples' investment in FHLB
stock increased by $232,000, resulting from the FHLB's stock
ownership requirements as it relates to the long-term debt
increase. Total securities decreased by $2,627,000, along with a
decrease of $1,115,000 in accrued interest receivable and other
assets.

Net loans grew $5,858,000 or 2.0% during the first three months
of 2003. The majority of this loan growth was in real estate
secured loans, which increased $5,397,000 or 2.3%, and
commercial loans, which were up $2,665,000 or 8.6%. Decreases
were noted in agricultural loans, which were down $1,091,000 or
15.1% and total consumer loans, which were down $511,000 or
3.8%. The growth in real estate loans was distributed through
various categories in which construction and development loans
were up $2,376,000, home equity lines of credit increased
$1,754,000, loans secured by agricultural properties increased
$1,582,000, commercial real estate loans increased $1,274,000,
and residential first mortgage loans grew $475,000. The real
estate secured loan categories reflecting decreases were multi-
family mortgage loans, which were down $1,465,000 and
residential second lien loans, which decreased by $563,000.

Total deposits increased by $16,768,000 or 5.2% since year-end
2002. The increases were realized in demand deposit accounts up
$4,532,000 or 5.7%, money market accounts increased $3,073,000
or 8.4%, savings accounts jumped $10,703,000 or 21.0%, and time
deposits increased $345,000 or .4% during the three months ended
March 31, 2003. NOW and SuperNOW accounts decreased $1,885,000
or 3.2%. Impacting the increase in deposits was the addition of
$7,330,000 in trust department savings funds that were deposited
at the Bank, during the first quarter of 2003.

Short and long-term debt both reflected increases this quarter.
Securities sold under agreements to repurchase, increased
$7,265,000 or 92.5% and long-term debt increased by $1,822,000
or 6.1%.

Results of Operations

Net income for the first quarter of 2003 was $1,233,000 or $.42
per share. In comparison, net income for the first quarter of
2002 was $1,114,000 or $.37 per share. This reflects a $119,000
or 10.7% increase in net income for the first three months of
2003 compared to 2002.

Net interest income for the first quarter of 2003 increased by
$194,000 or 5.0%, compared to the first quarter of 2002. This
increase is a result of increased volume in earning assets.
While the net interest margin averaged 4.71% for the year 2002,
the margin began to compress during the third quarter last year
and has continued to compress through the fourth quarter of 2002
and first quarter of 2003. For the first three months of 2003,
the net interest margin has averaged 4.44%. With the current
rate environment, 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 $150,000 provision for loan losses for the
first quarter of 2003, which was up $60,000, as compared to a
provision of $90,000 for the first quarter of 2002. As a
percentage of loans, the allowance for loan losses was 1.50% at
March 31, 2003, compared to 1.49% at year-end 2002 and 1.65% at
March 31, 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.

Non-interest income increased by $242,000 or 22.4% for the
quarter ended March 31, 2003, compared to the same period in
2002. The largest increase in non-interest income for the first
quarter of 2003 compared to 2002 was $129,000 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
$81,000 or 23.9%, compared to the first quarter 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 $16,000 or 11.4%, compared to the first quarter of 2002.
The income increase is consistent with the increase in Peoples'
Trust Department total assets under management, which equaled
$114,165,000 on March 31, 2003, up from $96,781,000 at March 31,
2002. Contrary to that, investment management fees from
Wilmerding decreased by $46,000 or 23.0% for the same time
period. This decrease is consistent with Wilmerding's total
assets under management, which equaled $199,678,000 on March 31,
2003, down from $253,369,000 at March 31, 2002.

Other income reflected an increase of $62,000 or 26.1% for the
first quarter of 2003, compared to 2002. This increase was a
result of increased income from debit card commissions, earnings
from Peoples First Land Transfer, LLC and a gain on the sale of
a fixed asset.

Total non-interest expense increased by $163,000 or 4.9% for the
first quarter of 2003, compared to the same time period in 2002.
The largest increase in non-interest expense was in salaries and
employee benefits, which increased by $140,000 or 6.8% for the
first quarter of 2003, compared to the first quarter 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 quarter of 2003 to first quarter of 2002,
occupancy expenses were up by $29,000, furniture and fixture
expense increased $5,000, communications and supplies expense
was up $7,000, taxes other than income was up $8,000, and
professional fees were up $11,000. These increases were
partially offset by a decrease of $37,000 in other operating
expenses.

Income tax expense was $463,000 for the first quarter of 2003,
compared to $369,000 for first quarter of 2002. Income tax
expense as a percentage of income before income taxes was 27.3%
for the quarter of 2003, compared to 24.9% for the first quarter
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 $314,826,000 in core deposits at March 31, 2003,
which increased $17,135,000 over total core deposits of
$297,691,000 at year-end. Other sources of liquidity are
available from investments in interest-bearing deposits with
banks and federal funds sold, which totaled $34,396,000, and
securities maturing in one year or less, which totaled
$12,033,000, at March 31, 2003. In comparison, interest-bearing
due from banks and federal funds sold totaled $9,980,000 and
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 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 $47,587,000 as of March 31, 2003,
representing a $723,000 increase from the beginning of the year.
The growth in capital was primarily a result of net earnings
retention of $788,000, partially offset with a decrease of
$65,000 in accumulated other comprehensive.

At March 31, 2003, Peoples had a leverage ratio of 11.29%, a
Tier I capital to risk-based assets ratio of 13.69%, and a total
capital to risk-based assets ratio of 14.95%. At March 31,
2003, the Bank had a leverage ratio of 9.62%, a Tier I capital
to risk-based assets ratio of 11.58%, and a total capital to
risk-based assets ratio of 12.83%. 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

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

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
first quarter of 2003.

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: May 12, 2003 BY:/s/Hugh J. Garchinsky
-------------------------------
Hugh J. Garchinsky
President and Chief Executive
Officer

Date: May 12, 2003 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: May 12, 2003

/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: May 12, 2003

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