FOR IMMEDIATE RELEASE

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

PEOPLES FINANCIAL CORPORATION EARNINGS TOTAL $577,000
FOR THIRD QUARTER OF 2011

BILOXI, MS (October 26, 2011)—Peoples Financial Corporation (NASDAQ Capital Market: PFBX), parent of The Peoples Bank, earned $577,000 in the third quarter of 2011, a decline of 29% from the second quarter of 2011, but a 59% increase over the same period a year ago, announced Chevis C. Swetman, Chairman and Chief Executive Officer of the holding company and the bank.

Earnings for the nine-month period ended September 30, 2011, totaled $1,825,000, a decrease of 32% from the same period in 2010. Net income for the year to date includes gains from sale of securities of $794,000, gains on death benefits of life insurance policies of $470,000, losses from the write down of foreclosed property of $666,000 and losses from the charge off of interest income on loans placed on nonaccrual of $536,000. 

Earnings per weighted average share for third quarter of 2011 were $.12, compared to $.07 in third quarter of 2010. Earnings per share figures are based on 5,136,918 weighted average shares outstanding as of September 30, 2011 and 5,151,697 as of September 30, 2010.

“Our bank’s bottom line is still being pressured by extremely low net interest margins and economic uncertainty,” said Swetman. “However, our loan loss provision continues to decline and loan volume appears to be recovering, giving us increased confidence going into the fourth quarter.  For 2012 we should see positive loan growth and increased interest income,” he added.

“Loan volume has increased for the last three quarters, reaching $422,000,000 at the end of the most recent period, a 7.3% jump from the second quarter.  This is a 3.12% loan growth since the first of the year and well exceeds our projection for 2011,” added Swetman.

Provision for loan losses in third quarter of 2011 totaled $544,000, compared to $1,045,000 for the same period last year. For the first nine months of 2011, the provision was $1,731,000, compared to $3,780,000 for the same period in 2010.

Primary capital increased to 14.17% in the most recent quarter, compared to 13.74% in third quarter 2010 and 13.94% in second quarter 2011.

Founded in 1896, with $817 million in assets as of September 30, 2011, 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.