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) January 20, 2009

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 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 (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))

TABLE OF CONTENTS

EX-99.1

Item 2.02. Results of Operations and Financial Condition

On January 20, 2009, Peoples Financial Corporation issued a press release announcing its earnings for 2008.

Item 9.01. Financial Statements and Exhibits.

     ( c) Exhibits

99.1 Press Release issued by Peoples Financial Corporation dated January 20, 2009, headed “Peoples Financial Corporation Earns $1.8 Million in Fourth Quarter 2008, $5.0 Million for Year.”

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: January 20, 2009

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 EARNS $1.8 MILLION
IN FOURTH QUARTER 2008, $5.0 MILLION FOR YEAR

BILOXI, MS (January 20, 2009)—Peoples Financial Corporation (NASDAQ Capital Market: PFBX), parent of The Peoples Bank, earned $1,820,000 in fourth quarter 2008 and $5,034,000 for the year ended December 31, 2008, announced Chevis C. Swetman, chairman and chief executive officer of the holding company and the bank.

Earnings per share were $.34 per average weighted share for the fourth quarter of 2008 and totaled $.94 per average weighted share for the full year. Earnings per share figures are based on average weighted shares outstanding of 5,342,470 for the 12 months ended December 31, 2008 and 5,489,861 for the 12 months ended December 31, 2007.

“Our bank returned to profitability in the fourth quarter of 2008, despite the worst paralysis of the capital markets in my lifetime or even since the Great Depression,” said Swetman. “Our loan volume grew in the fourth quarter, although far more slowly than we would like. We have money to lend, and we are aggressively seeking business in a market largely driven by fear of the unknown and fear of the future,” he added.

Fourth quarter income was 38% lower than earnings for the same period the year before. Full year net income was 54% lower, due mainly to non-cash charges recorded in the third quarter of 2008 for increased loan loss provision and loss on investment in preferred shares of Federal Home Loan Mortgage Company (FHLMC, commonly known as Freddie Mac).

In November, 2008, Peoples Financial announced it had declined to participate in the federal government’s $700 billion rescue fund for financial institutions. “We have plenty of capital,” said Swetman. “In fact, our primary capital as of the end of 2008 rose to 12.91%, despite the meltdown of the financial markets around us. Times like these validate the careful, conservative philosophy that our Board of Directors and senior management team have always followed in operating our bank,” he added.

Founded in 1896, with $896 million in assets as of December 31, 2008, 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 bank also operates a mortgage loan department providing residential loans for primary, secondary and multi-family homes up to four units.

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 December 31,	2008		2007
Net interest income	$	6,837	$	7,665
Provision for loan losses		252		52
Non-interest income		2,523		2,651
Non-interest expense		6,829		6,370
Income taxes		459		964
Net income		1,820		2,930
Earnings per share		0.34		0.54

Year Ended December 31,	2008		2007
Net interest income	$	28,339	$	30,519
Provision for loan losses		2,347		(1,045	)
Non-interest income		7,539		9,767
Non-interest expense		26,520		25,263
Income taxes		1,977		5,042
Net income		5,034		11,026
Earnings per share		0.94		2.01

PERFORMANCE RATIOS

December 31,	2008			2007
Return on average assets		0.55	%		1.15	%
Return on average equity		4.71	%		10.77	%
Net interest margin		3.58	%		3.55	%
Efficiency ratio		78	%		61	%

BALANCE SHEET SUMMARY

December 31,	2008		2007
Total assets	$	896,408	$	927,357
Loans		467,377		450,992
Securities		349,816		392,595
Total deposits		510,476		569,130
Total federal funds purchased		226,609		231,225
Shareholders’ equity		107,966		106,542
Book value per share		20.45		19.66
Weighted average shares		5,342,470		5,489,861

PERIOD END DATA

December 31,	2008			2007
Allowance for loan losses as a percentage of loans		2.38	%		2.08	%
Loans past due 90 days and still accruing		2,340			1,234
Nonaccrual loans		15,553			45
Primary capital		12.91	%		12.13	%