8-K

UNITED STATES SECURITES 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 12, 2006

PEOPLES FINANCIAL CORPORATION

(Exact Name of Registrant as Specified in its Charter)

Mississippi
(State or Other Jurisdiction of Incorporation)

0-30050	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 Addresss, 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 (17 CFR 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))

TABLE OF CONTENTS

Press Release

Item 2.02. Results of Operations and Financial Condition

On July 12, 2006, Peoples Financial Corporation issued a press release announcing its earnings for the first six months of 2006.

Item 9.01. Financial Statements and Exhibits.

(c) Exhibits

99.1 Press Release issued by Peoples Financial Corporation dated July 12, 2006, headed “Peoples Financial Corporation First Half 2006 Earnings Continue to Set New Highs.”

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 12, 2006

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

EX-99.1

Exhibit 99.1

Exhibit 99.1: Peoples Financial Corporation Press Release Dated July 12, 2006

FOR IMMEDIATE RELEASE

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

PEOPLES FINANCIAL CORPORATION FIRST HALF 2006
EARNINGS CONTINUE TO SET NEW HIGHS

BILOXI, MS (July 12, 2006)—Peoples Financial Corporation (NASDAQ Small Cap: PFBX), parent of The Peoples Bank, reported earnings for second quarter ended June 30, 2006, exceeded income for the first quarter of the year, breaking the record for operating earnings set in the last period, announced Chevis C. Swetman, chairman and chief executive officer of the holding company and the bank.

Net income for second quarter 2006 increased to $2,557,000, up $24,000 over first quarter 2006. For the first half of 2006, net income totaled $5,090,000.

Earnings in the same period last year included two extraordinary gains and an investment loss that combined to add $740,000 to operating earnings. Income for the first half of 2006 increased 16% over recurring operating earnings for the first six months of 2005.

Earnings per share for the comparable periods in 2006 and 2005 were the same at $.92 a share.

Earnings per share figures are based on weighted average shares outstanding of 5,548,403 and 5,551,781 at June 30, 2006 and June 30, 2005, respectively.

Loan volume increased to $401 million for the second quarter of 2006, 16% more than the same period in 2005 and 13% higher than first quarter of 2006.

-more-

Peoples Financial Corporation reports second quarter 2006 results—page 2

“Our operating earnings for the second quarter exceeded the record we set in the first quarter of this year,” said Chevis C. Swetman, chairman and CEO of the holding company and the bank. “While the deposit growth is beginning to moderate until the first homeowner-grant checks arrive later this summer, our loan volume continues to increase in every category and every region of the Mississippi Gulf Coast” added Swetman.

Founded in 1896, with $879 million in assets as of June 30, 2006, 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 Small Cap 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.

 -30-

2 – YEAR FINANCIAL HIGHLIGHTS
(In Thousands, Except Per Share Amounts)
                            (Unaudited)

Earnings (1)	2006			2005
Six Months Ended June 30,
Net Income	$	5,090		$	5,119
Net Income Per Share		0.92			0.92
Financial Condition
June 30,		2006			2005		Change
Total Assets	$	878,582		$	664,956			32	%
Loans — Net of Unearned Discounts		401,010			347,501			15	%
Investment Securities		382,819			236,760			62	%
Total Deposits		622,992			428,990			45	%
Shareholders’ Equity		90,220			89,379			1	%
Book Value Per Share		16.26			16.11			1	%
Selected Ratios
Return on average shareholders’ equity		11.46	%		11.69	%
Return on average total assets		1.17	%		1.63	%
Primary capital to average assets		11.60	%		15.22	%
Allowance for loan losses as a % of loans, net of unearned discount		2.75	%		1.71	%

(1) Based on weighted average shares outstanding of 5,548,403and 5,551,781 at June 30, 2006 and 2005, respectively.