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					                           PUBLIC DISCLOSURE

                                       June 13, 2005



                COMMUNITY REINVESTMENT ACT
                 PERFORMANCE EVALUATION

                              Peoples First Community Bank
                                  1022 West 23rd Street
                               Panama City, Florida 32405
                                      Docket #: 07939


                                Office of Thrift Supervision
                                     Southeast Region
                                1475 Peachtree Street, N.E.
                                  Atlanta, Georgia 30309



NOTE:   This evaluation is not, nor should it be construed as, an assessment of the financial
        condition of this institution. The rating assigned to this institution does not represent
        an analysis, conclusion or opinion of the federal financial supervisory agency
        concerning the safety and soundness of this financial institution.
                   Office of Thrift Supervision
                   Department of the Treasury                                                     Southeast Region

                   Southeast Region  Phone Number: (404) 888-0771  Fax: 404-892-8128
                   1475 Peachtree Street, NEAtlanta, GA 30309


October 12, 2005

Board of Directors
Peoples First Community Bank
1022 West 23rd Street
Panama City, Florida 32405

Members of the Board:

Enclosed is your institution’s written Community Reinvestment Act (CRA) Performance Evaluation prepared
by the Office of Thrift Supervision as of June 13, 2005. Pursuant to the provisions of the CRA and OTS
regulations (12 C.F.R. 563e), this evaluation, and your institution’s CRA rating as contained therein, must be
made available to the public by your institution.

In accordance with 12 C.F.R. 563e, this written CRA Performance Evaluation must be made available to the
public within 30 business days of its receipt by your institution. The evaluation must be placed in your CRA
public file located at your home office and each branch within this 30 business day time frame. The evaluation
may not be altered or abridged in any manner. At your discretion, previous written CRA Performance
Evaluations(s) may be retained with the most recent evaluation in your CRA public file.

Your institution is invited to prepare a response to the evaluation. The response may be placed in each CRA
public file along with the evaluation. In the event your institution elects to prepare such a response, please
forward a copy of it to this office.

All appropriate personnel, particularly customer contact personnel, need to be aware of the responsibilities that
the institution has to the public with regard to making this evaluation available. Consequently, we suggest that
your institution review internal procedures for handling CRA inquiries, including those pertaining to the
evaluation and other contents of the CRA public file.

We strongly encourage the Board of Directors, senior management, and other appropriate personnel to review
this document and to take an active interest and role in the CRA activities of your institution.

Sincerely,



Valorie Owen
Compliance Specialist

Enclosure




                                                                                                               ii
Office of Thrift Supervision                                                                                                    Evaluation Date:                       06/13/2005
Large Savings Association Performance Evaluation                                                                                Docket Number:                             07939



Table of Contents

GENERAL INFORMATION ............................................................................................................................................. 1
INSTITUTION ..................................................................................................................................................................... 2
        OVERALL RATING ......................................................................................................................................................... 2
          OVERALL RATING .................................................................................................................................................... 2
        LENDING, INVESTMENT, SERVICE TEST TABLE ............................................................................................................. 4
          LENDING, INVESTMENT, SERVICE TEST TABLE ........................................................................................................ 4
        DESCRIPTION OF INSTITUTION ...................................................................................................................................... 4
        CONCLUSIONS WITH RESPECT TO PERFORMANCE TESTS.............................................................................................. 7
    SUMMARY ........................................................................................................................................................................ 21
    II. DESCRIPTION OF INSTITUTION’S OPERATIONS IN ....................................................................................................... 21
          DESCRIPTION OF INSTITUTION’S OPERATIONS IN PANAMA CITY MSA: ................................................................. 21
    III. CONCLUSIONS WITH RESPECT TO PERFORMANCE TESTS IN ....................................................................................... 22
          DESCRIPTION OF PERFORMANCE IN PANAMA CITY MSA: ...................................................................................... 22
    SUMMARY ........................................................................................................................................................................ 25
    II. DESCRIPTION OF INSTITUTION’S OPERATIONS IN ....................................................................................................... 25
          DESCRIPTION OF INSTITUTION’S OPERATIONS IN PENSACOLA MSA: ..................................................................... 25
    III. CONCLUSIONS WITH RESPECT TO PERFORMANCE TESTS IN ....................................................................................... 25
    III. CONCLUSIONS WITH RESPECT TO PERFORMANCE TESTS IN ....................................................................................... 26
          DESCRIPTION OF PERFORMANCE IN PENSACOLA MSA: .......................................................................................... 26
          DESCRIPTION OF INSTITUTION’S OPERATIONS IN TALLAHASSEE MSA:.................................................................. 29
    III. CONCLUSIONS WITH RESPECT TO PERFORMANCE TESTS IN ....................................................................................... 30
          DESCRIPTION OF PERFORMANCE IN TALLAHASSEE MSA: ..................................................................................... 30
APPENDIX ............................................................................................................................................................................ 33
        SCOPE OF EXAMINATION ............................................................................................................................................. 33
        SUMMARY OF STATE AND MULTI-STATE MSA RATINGS ............................................................................................ 34
        FFIEC AGGREGATE CORE TABLES ............................................................................................................................. 35
CRA RATING DEFINITIONS ................................................................................................................................................ 36




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Office of Thrift Supervision                                               Evaluation Date:      06/13/2005
Large Savings Association Performance Evaluation                           Docket Number:            07939



General Information


The Community Reinvestment Act (CRA) requires each federal financial supervisory agency to use
its authority when examining financial institutions subject to its supervision, to assess the institution's
record of meeting the credit needs of its entire community, including low- and moderate-income
(LMI) neighborhoods, consistent with safe and sound operation of the institution. Upon conclusion
of such examination, the agency must prepare a written evaluation of the institution's record of
meeting the credit needs of its community.

This document is an evaluation of the CRA performance of Peoples First Community Bank (Peoples
First or Institution) prepared by the Office of Thrift Supervision, the institution's supervisory agency,
as of June 13, 2005. The agency evaluates performance in assessment area(s), as they are delineated
by the institution, rather than individual branches. This assessment area evaluation may include the
visits to some, but not necessarily all of the institution's branches. The agency rates the CRA
performance of an institution consistent with the provisions set forth in Appendix A to 12 CFR Part
563e.




                                                                                                          1
Office of Thrift Supervision                                           Evaluation Date:      06/13/2005
Large Savings Association Performance Evaluation                       Docket Number:            07939



Institution

Overall Rating


INSTITUTION'S CRA RATING: Peoples First is rated “Outstanding record of meeting
community credit need.”

This CRA evaluation was performed under the new OTS CRA guidelines in which large institutions
($1.0 billion in assets or larger) choose the percentage of weight to be given to the Lending,
Investment, and Service Tests. Peoples First chose to be evaluated with a 70.0 percent weight to the
Lending Test, a 20.0 percent weight to the Investment Test, and a 10.0 percent weight to the Service
Test.

Throughout the review period, Peoples First’s mortgage lending within the assessment area was
strong, averaging 92.4 percent of all mortgage loan originations/approvals. An analysis of Peoples
First’s mortgage lending indicated that the distribution of mortgage loans to low-income borrowers
was somewhat lower than the combined assessment area’s demographics, even when considering the
percentage of low-income families below the poverty level. However, the Institution’s level of
lending to moderate-income borrowers was commensurate with the combined assessment area’s
demographics. In addition, the Institution’s overall lending to LMI borrowers exceeded that of all
other lenders for 2003, the latest year for which information relative to other lenders was available.

Peoples First’s mortgage lending within low-income census tracts was slightly higher than the
combined assessment area’s demographics. However, the Institution’s level of lending in moderate-
income census tracts was below the areas’ demographics. In addition, the Institution’s overall
lending in LMI census tracts was generally commensurate with that of all other lenders for 2003. In
addition, Peoples First’s level of community development lending within the combined assessment
area was strong during the review period. Based upon Peoples First’s overall lending performance, a
rating of “Outstanding” was assigned for the Lending Test.

Peoples First’s record of qualified investments consisted primarily of the purchase of mortgage-
backed securities of approximately $16.5 million. Financial contributions of $335,117 were made to
non-profit organizations. The Institution is commended for supporting a wide variety of non-profit
civic organizations within the various communities it serves. Accordingly, a rating of “High
Satisfactory” was assigned for the Investment Test.




                                                                                                     2
Office of Thrift Supervision                                             Evaluation Date:      06/13/2005
Large Savings Association Performance Evaluation                         Docket Number:            07939



Institution (continued)



Peoples First provides a high level of banking services through its network of branch offices,
including, but not limited to, toll free telephone service, Internet access, and a wide range of deposit
and loan products. Although not necessarily designed to meet the needs of LMI individuals or
geographies, the Carefree, Community, and Prime 55 Checking accounts are considered beneficial to
that segment of the population. Based upon Peoples First’s overall service performance, a rating of
“High Satisfactory” was assigned for the Service Test.




                                                                                                           3
Office of Thrift Supervision                                                                      Evaluation Date:           06/13/2005
Large Savings Association Performance Evaluation                                                  Docket Number:                 07939



Institution


Lending, Investment, Service Test Table


The following table indicates the performance level of Peoples First with respect to the Lending,
Investment, and Service tests.

                                                              Peoples First Community Bank
                                                                        6/13/2005
                                                                                              1
                  PERFORMANCE                                     PERFORMANCE TESTS
                                                 Lending               Investment                   Service
                       LEVELS
                                                   Test                   Test                       Test
                    Outstanding                     X
                  High Satisfactory                                          X                         X
                  Low Satisfactory
                  Needs to Improve
                     Substantial
                   Noncompliance




Description Of Institution


Peoples First is a federally chartered, stock savings institution headquartered in Panama City, Florida,
with approximately $1.5 billion in assets at March 31, 2005, and is a wholly owned subsidiary of
Peoples First Properties, Inc.

Including the main office, Peoples First has a total of 32 full service offices in Florida, eight in Bay
County, three in Okaloosa County, three in Escambia County, two in Santa Rosa County, three in
Leon County, one in Jackson County, three in Duval County, one in St. Johns County, one in Flagler
County, one in Volusia County, one in Lake County, one in Osceola County, and four in Seminole
County. Peoples First also operates automated teller machines (ATMs) at all but one branch location.
No ATMs are operated at non-branch locations. There are a total of 556 employees, 526 full-time
and 30 part-time.

Peoples First’s historical business strategy has been predominantly the origination of fixed- and
adjustable-rate mortgage loans for retention in its loan portfolio, as well as for sale in the secondary
market. Retail deposits have been utilized as the primary source of funding for operation and growth
during the review period. Peoples First continues to exceed all regulatory capital requirements and
the FDICIA well capitalized standard.


1
    Weight selections used for the evaluation of the institution’s CRA performance could result in unrated Performance Test factors.
                                                                                                                                       4
Office of Thrift Supervision                                              Evaluation Date:     06/13/2005
Draft Large Institution Performance Evaluation                            Docket Number:           07939



Institution

Management considers Peoples First to be a community-oriented institution that primarily focuses on
the origination of residential real estate loans. As of March 31, 2005, 79.0 percent of the Institution’s
total assets consisted of mortgage loans secured by permanent mortgages on single-family residences,
multi-family dwellings, nonresidential property, and home improvements, as well as mortgage pool
securities. In addition, 4.4 percent of total assets are invested in non-mortgage loans and 7.3 percent
are invested in other types of securities.

Peoples First offers mortgage loans with terms of up to 30 years for the purchase, refinance, and
construction of single-family dwellings. Consumer, multi-family residential, and commercial loans
are also available. Peoples First also offers an array of deposit products with various features
designed to compete with those offered by other local financial institutions.

The evaluation disclosed no legal (other than the statutory limitations on investment authority
currently imposed on the charters of all federal savings associations) or regulatory impediments
adversely affecting Peoples First’s ability to meet the credit needs of the communities it serves.

Description of Combined Assessment Area

Peoples First has designated nine assessment areas in Florida, seven in Metropolitan Statistical Areas
(MSA) and two in non-MSA areas. Each area consists of whole counties and each meets the
requirements of the CRA regulation. The assessment areas are listed below:

Assessment Areas                        Counties
Panama City MSA                         Bay County
Fort Walton Beach MSA                   Okaloosa County
Daytona Beach MSA                       Volusia County
Tallahassee MSA                         Leon County
Orlando MSA                             Lake, Orange, Osceola, and Seminole Counties
Jacksonville MSA                        Duval and St. Johns Counties
Pensacola MSA                           Escambia and Santa Rosa Counties
Non- MSA Counties                       Flagler and Jackson




                                                                                                       5
Office of Thrift Supervision                                                      Evaluation Date:            06/13/2005
Draft Large Institution Performance Evaluation                                    Docket Number:                  07939



Institution

According to the 2000 Census the combined assessment area is comprised of 778 census tracts (CTs)
with income designations including 34 low-income, 188 moderate-income, 379 middle-income, and
177 upper-income CTs. The 2000 Census data will be used for analysis of the Institution’s 2003 and
2004 mortgage lending activity.

A low-income CT is one with a median family income (MFI) of less than 50.0 percent of the MFI for
the MSA. A moderate-income CT is one with a MFI of at least 50.0 percent, and less than 80.0
percent, of the MFI for the MSA. A middle-income CT is one with a MFI of at least 80.0 percent,
and less than 120.0 percent, of the MFI for the MSA. An upper-income CT is one with a MFI in
excess of 120.0 percent of the MFI for the MSA.

The following chart summarizes certain demographic characteristics of Peoples First’s combined
assessment area based upon 2000 Census Data:

                      Demographic Characteristics of the Combined Assessment Area

           Income        Number of          Population   Distribution      Distribution     Distribution of
           Category      Census Tracts                   of Families       of O.O.H.U.*     Small
                                                                                            Businesses
             Low               34              120,375      19.0%               1.3%               3.1%
           Moderate           188              845,491      18.5%              15.9%              21.3%
           Middle             379            2,084,534      22.7%              54.0%              50.4%
            Upper             177            1,003,834      39.8%              28.8%              25.2%
           TOTAL              778            4,054,234     100.0%             100.0%            100.0%

     ** O.O.H.U. - Owner Occupied Housing Units


The examiner’s review of 2000 Census data also disclosed the following additional information about
the combined assessment area:

                 Total Population                                       4,054,234
                 Population 16 and older                                3,185,565 (78.5%)
                 Population Over 65                                     536,845 (13.2%)
                 Total Housing Units                                    1,761,985
                 Rental Occupied Units                                  514,670 (29.2%)
                 1 - 4 Family Units                                     1,275,061 (72.4%)
                 Multi-Family Units                                     302,206 (17.2%)
                 Total Families                                         1,064,367
                 Families Below the Poverty Level                       89,485 (8.4%)




                                                                                                                      6
Office of Thrift Supervision                                                 Evaluation Date:         06/13/2005
Draft Large Institution Performance Evaluation                               Docket Number:               07939



Institution


Conclusions With Respect To Performance Tests


                                                 LENDING TEST



Assessment Area Concentration

Since the preceding evaluation, Peoples First originated a significant volume of mortgage loans in
relationship to its resources. In addition, the vast majority of these loans were secured by properties
located within the combined assessment area, as described below:

                                MORTGAGE LOAN ORIGINATIONS IN 2003 AND 2004
                   Loan Originations                 Number   Percent -     Volume       Percent of
                                                              Number        (000s)        Volume
                   Inside Assessment Area             6,370    92.4%      $ 948,727        91.8%
                   Outside Assessment Area              525     7.6%          85,090        8.2%
                            Total                     6,895   100.0%      $1,033,817      100.0%


The majority of Peoples First’s mortgage loan originations are generated within the Panama City and
Pensacola assessment areas. The following table presents the Institution’s overall mortgage lending
activity during the review period separated by assessment area:

                                  Assessment Area               Originations
                                  Panama City MSA                1,733/ 27.2%
                                  Pensacola MSA                  1,503/ 23.6%
                                  Tallahassee MSA                  855/ 13.4%
                                  Orlando MSA                      577/ 9.1%
                                  Fort Walton Beach MSA            513/ 8.1%
                                  Jacksonville MSA                 460/ 7.2%
                                  Flagler County                   353/ 5.5%
                                  Daytona Beach MSA                316/ 5.0%
                                  Jackson County                    60/ .9%
                                  Totals                         6,370/100.0%




                                                                                                              7
Office of Thrift Supervision                                            Evaluation Date:     06/13/2005
Draft Large Institution Performance Evaluation                          Docket Number:           07939



Institution
In addition, the examiner notes that approximately 98.4 percent of the Institution’s deposits come
from within the combined assessment area as detailed below:

                                  Assessment Area         Deposits (000’s)
                                  Panama City MSA           521.2/ 40.2%
                                  Pensacola MSA             194.2/ 15.0%
                                  Tallahassee MSA           118.5/ 9.2%
                                  Orlando MSA               139.0/ 10.7%
                                  Fort Walton Beach MSA     148.1/ 11.4%
                                  Jacksonville MSA           57.0/ 4.4%
                                  Flagler County             58.7/ 4.5%
                                  Daytona Beach MSA           19.1/ 1.5%
                                  Jackson County              39.9/ 3.1%
                                  Totals                  1,295.7/100.0%



Distribution by Borrower Income within the Combined Assessment Area

The examiner performed a review to determine the dispersion of lending to borrowers of different
income levels. Specifically, the examiner analyzed the percentage of residential mortgage loans, by
number and dollar amount, originated by the Institution to LMI borrowers compared to the
percentage of families located within the combined assessment area. In conducting this analysis, the
Institution’s lending patterns were compared to the distribution of families based upon income within
the combined assessment area as of the 2000 Census.




                                                                                                     8
Office of Thrift Supervision                                                        Evaluation Date:      06/13/2005
Draft Large Institution Performance Evaluation                                      Docket Number:            07939



Institution

As noted below, for 2003 and 2004 Peoples First’s level of lending to low-income borrowers within
the combined assessment area is well below the combined assessment area’s demographics; however,
the level of lending to moderate-income borrowers is commensurate with the percentage of families
located within the moderate-income category based upon the 2000 Census. The examiner notes that
the Institution’s ability to lend to low-income borrowers is likely affected by the number of families
with incomes below the poverty level. The examiner noted that according to the 2000 Census,
approximately 44.3 percent of the low-income families residing within the combined assessment area
have incomes below the poverty level (8.4 percent of all families living within the combined
assessment area have incomes below the poverty level).

        Income           Percent           Number       No. Pct.     Volume         Pct. of $    Distribution
        Category         Of MFI                                       ($000s)                    Of Families
          Low            <50%                  460        7.4%          31,652        3.5%          19.0%
        Moderate       >50-<80%              1,119       18.0%         104,893       11.5%          18.5%
         Middle        >80-<120%             1,473       23.7%         181,751       19.9%          22.7%
         Upper          >120%                3,164       50.9%         596,418       65.1%          39.8%
         Total                               6,216*     100.0%       $914,714       100.0%         100.0%
       *Applicant income was not available for 154 originations totaling $34.0 million.


Comparison to other mortgage lenders within the combined assessment area

Peoples First’s overall record of lending to borrowers of different income levels was also compared
to the lending activity of other lenders subject to the CRA. In accordance with the HMDA, creditors
with total assets greater than $250 million and a branch office located within an MSA must submit
certain information regarding mortgage loans for purchase, refinance, and home improvement
purposes. This information was derived from 2003 HMDA Aggregate information, the latest
available.

In order to provide a more accurate comparison, the lending activity was compiled for all types of
mortgage loans for single-family dwellings originated by lenders subject to the CRA, focusing upon
mortgage lending to LMI borrowers.




                                                                                                                  9
Office of Thrift Supervision                                                       Evaluation Date:       06/13/2005
Draft Large Institution Performance Evaluation                                     Docket Number:             07939



Institution

Based upon the data shown below, Peoples First’s overall record of lending to LMI borrowers was
slightly higher than that of other lenders within the combined assessment area, but below the
assessment areas’ demographics for LMI borrowers, even considering the percentage of families
below the poverty level.

             2003 Aggregate HMDA Borrower Income Analysis for Mortgage Loan
       Originations of similar products by All Lenders within the combined assessment area

                    Income         Percent       Peoples First    Other Lenders       Distribution
                   Category        Of MFI        Percent of No.   Percent of No.      of Families
                     Low            <50%              6.7%            5.6%               19.0%
                   Moderate       >50-<80%           16.3%           16.0%               18.5%



Geographic Distribution within the Combined Assessment Area

The examiner also performed a review to determine the adequacy of dispersion of lending among
census tracts by income level. Specifically, the examiner analyzed the percentage of residential
mortgage loans, by number and dollar amount, originated by the Institution within LMI census tracts
compared to the percentage of owner-occupied housing units (OOHUs) located within the combined
assessment area. In conducting this analysis, the Institution’s lending patterns were compared to the
distribution of OOHUs within the combined assessment area as of the 2000 Census.

As noted below, Peoples First’s 2003 and 2004 level of lending in the low-income CTs within the
combined assessment area is commensurate with the areas’ demographics based upon the 2000
Census. The Institution’s level of lending in the moderate-income CTs within the combined
assessment area is well below the areas’ demographics based upon the 2000 Census.

        Income           Percent           Number      No. Pct.    Volume          Pct of $      Distribution
        Category         of MFI                                     ($000s)                      of OOHUs
          Low            <50%                   96         1.5%       14,569          1.6%            1.3%
        Moderate       >50-<80%                539         8.5%       53,970          5.7%           15.9%
         Middle        >80-<120%             3,644        57.2%      509,841         53.7%           54.0%
         Upper          >120%                2,091        32.8%      370,347         39.0%           28.8%
         Total                               6,370                 $948,727        100.0%           100.0%
                                                       100.0%




                                                                                                                 10
Office of Thrift Supervision                                                 Evaluation Date:   06/13/2005
Draft Large Institution Performance Evaluation                               Docket Number:         07939



Institution

Comparison to other lenders within the combined assessment area

Peoples First’s overall record of lending within different geographic areas was also compared to the
lending activity of other lenders subject to the CRA. This information was derived from 2003
HMDA Aggregate information, the latest available. In order to provide a more accurate comparison,
the lending activity was compiled for all types of mortgage loans for single-family dwellings
originated by lenders subject to the CRA, focusing upon mortgage lending in LMI CTs.

Based upon this data, Peoples First’s penetration of loans within low-income geographies was also
slightly higher than that of all lenders subject to the CRA within the combined assessment area, and
commensurate with the assessment area’s demographics. The level of lending in moderate-income
geographies was below that of other lenders, and well below the combined assessment area’s
demographics as indicated below:

    2003 Aggregate HMDA Geographic Distribution Analysis for Mortgage Loan
Originations of similar products by All Lenders within the Combined Assessment Area

        Income              Percent        Peoples First    Other Lenders    Distribution
        Category             of MFI        Percent of No.   Percent of No.   of O.O.H.U.
         Low                <50%                 1.0%             .6%             1.3%
      Moderate             >50-<80%              7.5%           10.8%           15.9%


The examiner notes that Peoples First encounters significant competition for both deposits and loans
within the combined assessment area. As of June 30, 2004, the most recent date for which
information is available, Peoples First competed with 112 financial institutions with 1,189 offices,
including 95 commercial banks and 16 savings associations. The top competitors included Wachovia
Bank, N.A., Bank of America, N.A., AmSouth Bank, Compass Bank, Branch Banking & Trust
Company, Regions Bank, Washington Mutual Bank, F.A., World Savings Bank, and SunTrust Bank.
The Institution’s market share of deposits for the combined assessment area was approximately 1.9
percent.




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Office of Thrift Supervision                                                    Evaluation Date:   06/13/2005
Draft Large Institution Performance Evaluation                                  Docket Number:         07939



Institution

Small Business/Farm Loans

Based upon its size and resources, Peoples First originated a high number of loans to small businesses
during the review period. The majority (92.3 percent) of these loans were to businesses located
within the combined assessment area. Moreover, approximately 38.8 percent of these loans were
granted to businesses within the combined assessment area with revenues of less than $1 million.
Based upon information derived from the Institution’s CRA Disclosures, the examiner compiled the
following summary for 2003 and 2004:

                                  Distribution of Business/Farm Loans by Loan
                                   Size within the Combined Assessment Area

                         Loan Amount                No.    Pct of   Amt.          Pct. Of
                                                           No.      (000s)        Amt.
                            <=$100,000             1,080    68.5%   $ 44,226       22.3%
                         >$100,000<=$250,000         268    17.0%      45,790      23.1%
                             >$250,000               228    14.5%     108,043      54.6%
                               Total               1,576   100.0%    $198,059     100.0%

In order to further evaluate Peoples First’s small business lending activity, the examiner compared
the Institution to other lenders that reported small business loans in 2003 in accordance with CRA
reporting requirements. Under the CRA regulations, institutions with total assets greater than $250
million, or institutions owned by a holding company with assets in excess of $1 billion, are required
to collect certain information regarding business and farm loans. Based upon Aggregate CRA
Disclosure Reports for 2003, the latest available, the examiner noted that Peoples First’s percentage
of small business lending compared unfavorably with that of other lenders based upon the number of
loans made under $100,000. The results of the comparative analysis are as follows:

                                2003 Aggregate CRA Data Comparison of
                           Business/Farm Loans within Combined Assessment Area

                              Loan Amount                       Peoples First    All Lenders
                                                                 Pct. Of No.     Pct. Of No.
                                <=$100,000                         66.2%            93.5%
                             >$100,000<=$250,000                   17.8%             3.3%
                                  >$250,000                        16.0%             3.2%
                                    Total                         100.0%          100.0%




                                                                                                          12
Office of Thrift Supervision                                            Evaluation Date:      06/13/2005
Draft Large Institution Performance Evaluation                          Docket Number:            07939



Institution

However, during 2003 approximately 44.1 percent of Peoples First’s small business loans were to
businesses with annual revenues less than $1 million, compared to approximately 36.6 percent for all
other lenders.

Community Development Lending

Since the preceding evaluation, Peoples First reported originating 76 community development loans
totaling approximately $66.9 million, all of which were secured by property located within the
combined assessment area. These loans include, but are not limited to, the following:

Meadow Lake, LLC, Ocoee, Florida – one loan totaling $7,672,500. The loan proceeds are to be
used for the development of building lots in a moderate-income CT in Orange County.

Mission Trace Development, St. Augustine, Florida – one loan totaling $3,000,000. The loan
proceeds are to be used for the acquisition and development of residential lots in a moderate-income
CT in St. Johns County.

Ashton LLP, Pensacola, Florida – two loans totaling $2,000,000. The loan proceeds are to be used
for the construction of a hotel in a moderate-income CT in Escambia County.

Linderland, Inc., Tallahassee, Florida – two loans totaling $1,604,855,000. The loan proceeds are to
be used for the acquisition and development of residential multifamily property in a moderate-income
CT in Leon County.

AMB Properties LLC, Tallahassee, Florida – one loan totaling $885,000. The loan proceeds are to be
used for the acquisition and development of residential multifamily property in a moderate-income
CT in Leon County.

Innovative or Flexible Loan Programs

Peoples First participated in the following lending programs designed to be attractive to LMI
borrowers:

Escambia County Housing Finance Authority (ECHFA) first time homebuyers bond program –
a multi-county program. The ECHFA issues tax exempt mortgage revenue bonds to raise funds for
affordable housing on behalf of counties throughout the state of Florida. This 2004 program
provided a 30-year fixed-rate loan with an interest rate of 5.39 percent. Borrower income limits vary
with the size of the family and the allowable purchase price varies with the location of the property.
Borrowers must occupy the property as their primary residence. In addition, either down payment or
closing cost assistance is available. Conventional, as well as government insured loans are permitted.
                                                                                                      13
Office of Thrift Supervision                                            Evaluation Date:        06/13/2005
Draft Large Institution Performance Evaluation                          Docket Number:              07939



Institution

Eligible properties include single-family homes, condominiums, government insured manufactured
homes, and other 2-4 multi-family properties. Conventional loans have a maximum loan to value
ratio of 95.0 percent.

Florida Housing Finance Corporation (FHFC) first time homebuyers bond program – a statewide
program. The FHFC issues tax exempt mortgage revenue bonds to raise funds for affordable housing
throughout the state of Florida. The Institution participated in 2003 and 2004 programs that provided
a 30-year fixed-rate loan with interest rates ranging from 5.10 to 5.68 percent. Borrower income
limits vary with the size of the family and the allowable purchase price varies with the location of the
property. Borrowers must occupy the property as their primary residence. In addition, down
payment and closing cost assistance is available through a “soft” second mortgage. Conventional, as
well as government insured loans are permitted. Eligible properties include single-family homes,
condominiums, government insured manufactured homes, and two-family properties. The first and
second mortgages have a maximum loan to value ratio of between 103.0 and 105.0 percent.
Prospective borrowers are required to complete a home ownership counseling program.

The examiner notes that during the review period the Institution originated 647 loans totaling
approximately $ 52.2 million using these bond programs.

State Housing Initiative Partnership (SHIP) Program – Bay, Escambia, Leon, and Volusia Counties
participated in this statewide program. The program is for purchase, rehabilitation, and/or
construction/ permanent loans for the development of affordable housing for very low-, low-, and
moderate-income occupants. Maximum allowable borrower income varies depending upon the use
of the funds and where the eligible property is located. Eligible properties include single-family
residences, condominiums, and town homes. Unless secured by rental property, borrowers must
occupy the security property.

The examiner notes that during the review period the Institution originated 87 loans totaling
approximately $ 6.2 million using the SHIP programs.

Based upon Peoples First ’s overall record of lending within the combined assessment area, a rating
of “Outstanding” was assigned for the Lending Test. As noted, the majority of the mortgage loan
originations were secured by properties located within Institution’s combined assessment area and
lending to LMI borrowers was generally commensurate with area demographics. The rating was
largely based upon Peoples First’s level of lending to the combined assessment areas’ LMI borrowers
and in LMI census tracts, and the level of community development lending.




                                                                                                       14
Office of Thrift Supervision                                           Evaluation Date:      06/13/2005
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Institution


                                            INVESTMENT TEST

During the review period, Peoples First’s performance under this criteria consisted primarily of
monetary contributions, grants, and mortgage-backed securities. Peoples First made a strong level of
charitable contributions, primarily within the combined assessment area. Specifically, Peoples First
made charitable grants/ contributions totaling $706,282 ($273,867 and $432,405 during 2003 and
2004, respectively). Based upon the examiner’s review of an itemized list of the recipients of these
contributions, it was determined that a large number of the contributed funds were to non-profit
organizations. Further, a good percentage of these contributions met the definition of community
development investments. The examiner was able to determine that monetary contributions/grants
totaling $335,117 ($146,015 and $189,102 for 2003 and 2004, respectively) were to organizations
that addressed these needs.

In addition, during the review period the Institution purchased approximately $16.5 million of
mortgage-backed securities.

Based upon Peoples First’s overall level of qualified investments, a rating of “High Satisfactory” was
assigned for its performance under the Investment Test.




                                                                                                    15
Office of Thrift Supervision                                                    Evaluation Date:   06/13/2005
Draft Large Institution Performance Evaluation                                  Docket Number:         07939



Institution


                                            SERVICE TEST

Peoples First serves the combined assessment area with a total of 32 branch offices located in 13
Florida counties. Branch and ATM locations are identified in the chart below:

                             Peoples First Branch Office/ATM Locations

                 County              City Location           Income Level    ATM
                                                             of Geography
                 Bay                 Panama City (2)         Both Moderate   Both Yes
                                     Panama City             Middle          Yes
                                     Panama City (2)         Both Upper      Both Yes
                                     Panama City Beach       Both Middle     Both Yes
                                     (2)                     Upper           Yes
                                     Lynn Haven
                 Seminole            Altamonte Springs (2)   Both Middle     Both Yes
                                     Apopka                  Middle          Yes
                                     Casselberry             Middle          Yes
                 Escambia            Pensacola               Moderate        Yes
                                     Pensacola (2)           Both Middle     Both Yes
                 Okaloosa            Destin                  Upper           Yes
                                     Niceville               Upper           Yes
                                     Shalimar                Middle          Yes
                 Leon                Tallahassee (3)         All Middle      All Yes
                 Duval               Jacksonville            Middle          Yes
                                     Jacksonville (2)        Both Upper      Both Yes
                 Santa Rosa          Gulf Breeze             Upper           NO
                                     Pace                    Middle          Yes
                 Jackson             Marianna                Middle          Yes
                 St. Johns           Ponte Vedra Beach       Upper           Yes
                 Flagler             Palm Coast              Upper           Yes
                 Volusia             Orange City             Upper           Yes
                 Osceola             Kissimmee               Moderate        Yes
                 Lake                Clermont                Middle          Yes
                 Total               32 Branch Offices                       31 ATMs


Since the preceding evaluation, Peoples First opened four full service branch offices; two in
Jacksonville, one in Clermont, and one in Kissimmee, Florida. The Institution has adopted a branch
closing policy that outlines certain procedures to be followed in the event of a branch closing.

The office hours of all branch offices are considered convenient and consistent with those offered by
other financial institutions within the respective assessment areas and time zones. The offices’
lobbies are generally open from 9:00 a.m. to 4:00 p.m. on Mondays through Thursdays and until 6:00
p.m. on Fridays. No branch lobbies are open on Saturdays. The drive-in windows of many branches
are open on Mondays through Thursdays, from either 8:30 or 9:00 a.m. until 5:00 or 5:30 p.m.

                                                                                                          16
Office of Thrift Supervision                                            Evaluation Date:      06/13/2005
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Institution

Friday hours are generally from 8:30 or 9:00 a.m. to 5:00, 5:30, or 6:00 p.m. Two branches, lake and
Volusia Counties, are open until 6:00 p.m. Monday through Friday. Most drive-ins are open on
Saturdays to 12:00 p.m.

ATMs are available at 31 of the 32 branch offices, four of which are located in moderate-income
CTs. The ATMs are generally located outside of their respective branch offices, which enables
customers to have access seven days a week. With ATM access, customers can make withdrawals,
transfer funds from accounts, and make account inquiries. However, deposits cannot be made at any
Institution ATM. In addition, the Institution’s ATM cards can be used at machines connected to the
Star and Presto systems.

Peoples First also issues a Visa Check Card that can function as two cards in one, either an ATM or
debit card, depending upon the type of machine used. Although this is not a credit card, it is accepted
everywhere VISA credit cards are accepted. There is a purchase limit of $3,500 per day, as well as a
transaction limit of ten per day and there is no annual fee. The Institution also issues its own credit
card, a MasterCard.

Peoples First offers a wide range of deposit products including personal and commercial checking
accounts. Although not specifically targeted to LMI individuals, the Institution offers a checking
account, CareFree Checking, which should be attractive to LMI individuals under 25 years of age.
The CareFree Checking account has no minimum balance requirement, unlimited check writing, no
monthly service fee, an opening deposit of $50.00, and discounts on loans. This account also offers
free on-line banking. As of the start of this evaluation, the Institution had 4,155 CareFree Checking
accounts with balances totaling approximately $3.3 million. Interest is paid on balances of $1,000 or
more. It is the examiner’s opinion that this account would be attractive to LMI individuals.

In addition, Peoples First offers a checking account, Community Checking, which should also be
attractive to LMI individuals. The Community Checking account is for accountholders that had
CareFree accounts that have passed the age requirement. This account has no minimum balance
requirement, unlimited check writing, no monthly service fee, and an opening deposit of $50.00.
This account also offers free on-line banking. As of the start of this evaluation, the Institution had
13,975 Community Checking accounts with balances totaling approximately $34.2 million. Interest
is not paid on this account. It is the examiner’s opinion that this account would be attractive to LMI
individuals.




                                                                                                     17
Office of Thrift Supervision                                             Evaluation Date:      06/13/2005
Draft Large Institution Performance Evaluation                           Docket Number:            07939



Institution

Peoples First offers a checking account, Prime 55 Checking, which should be attractive to LMI
individuals. The Prime 55 Checking account has no minimum balance requirement, no monthly
service fee, and an opening deposit of $100.00. This account also offers free on-line banking. As of
the start of this evaluation, the Institution had 20,668 Prime 55 Checking accounts with balances
totaling approximately $457.2 million. Although no interest is paid on this account, it is the
examiner’s opinion that this account would be attractive to LMI individuals.

Peoples First has also developed a savings account targeted toward accountholders below 18 years of
age, the First Savings account. This account can be opened for as little as $25.00 and there is no
minimum balance to avoid a service charge. As of the start of this evaluation, the Institution had
2,688 First Savings accounts with balances totaling approximately $2.0 million.

Peoples First maintains a transactional Internet web site that provides general information about the
Institution, as well as a listing of available products and services, including branch office locations
and telephone numbers for each location. Customers can also check account balances and transfer
funds between Peoples First accounts, pay bills, and review checks that cleared during the preceding
six months. The inquiry, transfer functions, and the bill paying service are free.

Peoples First has a toll free number for the general public to use in contacting Institution personnel
about available products and services. The number can be used 24 hours a day, seven days a week,
but actual Institution employees are available only Monday through Friday from 7:00 a.m. to 5:30
p.m. Central time. Peoples First customers can make transfers between checking, savings, and
money market accounts, get various pieces of information about these types of accounts, and get
information about personal, automobile, or home equity loans they may have with the Institution.

Further, through a subsidiary, Peoples First also offers uninsured deposit products, as well as various
forms of insurance, including health, long term care, homeowners, auto and boat. The Institution also
provides customers with access to brokerage and consulting services through an arrangement with
Salomon Smith Barney. Brokerage services are available primarily at the Institution’s offices in
Panama City and Pensacola.




                                                                                                         18
Office of Thrift Supervision                                           Evaluation Date:      06/13/2005
Draft Large Institution Performance Evaluation                         Docket Number:            07939



Institution

Community Development Services

A number of Peoples First employees and directors are active in official capacities in various civic
organizations, many of which are engaged in community development activities. Below is a partial
list of the official capacities in which Institution individuals serve:

           Board member – Okaloosa County Workforce Development Board
           Member – Flagler Habitat for Humanity Strategic Planning Committee
           Member – United Way of Northwest Florida Finance Committee
           Board member – Northwest Florida Black Business Investment Corporation
           Board member – “House Next Door”, a non-profit organization that provides social
                              services to LMI communities in Flagler County
           President – Okaloosa County Kiwanis Club – this organization raises funds to benefit
                       needy children within the community
           Mentor – Big Brothers/Big Sisters
           Instructors – various first time homebuyer programs
           Instructors – money management workshops at University of West Florida and Gulf Coast
                         Community College

Peoples First has also created a School Banking Program (Program) designed to educate fourth and
fifth graders about the concepts of banking and how they apply to real life situations. The Program is
now in place in three market areas, Panama City, Pensacola, and Tallahassee. In addition, several
branches have community rooms that are made available to local organizations at no charge.

Based upon Peoples First’s overall level of performance, a rating of “High Satisfactory” was assigned
for its performance under the Service Test.

Record of Compliance with Anti-discrimination Laws and Regulations

A sample of loan application files was reviewed at the Institution’s most recent compliance
examination to determine the Institution’s level of compliance with anti-discrimination laws and
regulations, including the OTS Nondiscrimination Regulations; the Equal Credit Opportunity Act and
its implementing regulation, Regulation B; and the Fair Housing Act. That review disclosed no
evidence of prohibited discriminatory lending practices, and it appeared that all applicants were
treated consistently and in accordance with the Institution’s written underwriting guidelines.




                                                                                                       19
Office of Thrift Supervision                                        Evaluation Date:     06/13/2005
Draft Large Institution Performance Evaluation                      Docket Number:           07939



Institution

Response to Community Complaints

No complaints concerning Peoples First’s performance in meeting the credit needs of the combined
assessment area have been received since the preceding evaluation.




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Office of Thrift Supervision                                           Evaluation Date:      06/13/2005
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Institution



Description of Institution’s Operations in Panama City MSA:

Peoples First operates a total eight offices in the Panama City MSA, five in Panama City, two in
Panama City Beach, and one in Lynn Haven. Two branches are located in moderate-income CTs,
three are located in middle-income CTs, and three are located in upper-income CTs.

The offices within this assessment area have varying hours depending upon their location. The
lobbies of all of the Panama City area offices are open from 9:00 a.m. to 4:00 p.m. Monday through
Thursday and until 5:30 p.m. on Friday. The drive-in windows are open from 8:30 a.m. to 5:30 p.m.
Monday through Friday and from 8:30 a.m. to noon on Saturday. The hours of operation are
considered adequate and consistent with those of the Institution’s competitors.



Description of Panama City MSA Assessment Area


Peoples First’s Panama City MSA assessment area comprises all of Bay County, Florida. This
assessment area included 29 CTs with income designations, one low–income, ten moderate-income,
12 middle-income, and six upper-income tracts, as of the 2000 Census.

The 2000 Census data will be used to evaluate the Institution’s lending to borrowers of different
incomes and geographic distribution for 2003 and 2004 mortgage lending activity.

A summary of certain geographic characteristics for the assessment area based upon 2000 Census
data is as follows:

             DEMOGRAPHICS OF CTs                            FAMILY DISTRIBUTION
      CT Category Population Owner-Occupied                  Income    Distribution
                              Housing Units                 Category   of Families
       Low             1,680      1.0%                        Low          19.5%
       Moderate       37,358     19.7%                        Moderate     18.1%
       Middle         79,064     56.3%                        Middle       22.0%
       Upper          30,115     23.0%                        Upper        40.4%
        Total        148,217    100.0%                        Total       100.0%




                                                                                                    21
Office of Thrift Supervision                                                        Evaluation Date:       06/13/2005
Draft Large Institution Performance Evaluation                                      Docket Number:             07939



Institution

The examiner’s review of 2000 Census data disclosed the following additional information about the
assessment area:

                 Total Population                                     148,217
                 Population 16 and older                              116,666 (78.7%)
                 Population Over 65                                   19,817 (13.4%)
                 Total Housing Units                                  78,435
                 Rental Occupied Units                                24,827 (31.7%)
                 1 - 4 Family Units                                   52,495 (66.9%)
                 Multi-Family Units                                   12,786 (16.3%)
                 Total Families                                       40,653
                 Families Below the Poverty Level                     3,984 (9.8%)



Description of Performance in Panama City MSA:

Lending to Borrowers of Different Income Levels

In order to evaluate Peoples First’s record of lending to borrowers of different income levels for 2003
and 2004, family income levels were stratified as a percentage of the updated MFI for the Panama
City MSA. The updated MFI figures, as provided by the Department of Housing and Urban
Development, for the Panama City MSA for 2003 and 2004 were $46,500 and $48,900, respectively.

From information contained in the Institution’s 2003 and 2004 records, the examiner compiled the
following borrower income distribution statistics:

        Income           Percent           Number      No. Pct.      Volume        Pct. of $      Distribution
        Category         of MFI                                       ($000s)                     Of Families
          Low            <50%                 121         7.1%          7,488         3.3%           19.5%
        Moderate       >50-<80%               251        14.8%         22,374         9.8%           18.1%
         Middle        >80-<120%              412        24.2%         47,580        20.9%           22.0%
         Upper          >120%                 915        53.9%        150,006        66.0%           40.4%
         Total                              1,699*      100.0%       $227,448       100.0%          100.0%
       *Applicant income was not available for 34 originations totaling approximately $8.4 million.


As indicated above, the percentage of mortgage loans granted to low-income borrowers was well
below the number of low-income families within this assessment area. However, Peoples First’s
ability to originate mortgage loans to low-income borrowers may be influenced by family poverty
levels. The examiner noted that according to the 2000 Census, approximately 50.5 percent of the
                                                                                                                  22
Office of Thrift Supervision                                                       Evaluation Date:   06/13/2005
Draft Large Institution Performance Evaluation                                     Docket Number:         07939



Institution

low-income families residing within this assessment area have incomes below the poverty level (9.8
percent of all families living within this assessment area have incomes below the poverty level). The
Institution’s level of mortgage lending to moderate-income borrowers was somewhat below the
percentage of moderate-income families residing within this assessment area.

Peoples First’s overall record of lending to borrowers of different income levels was also compared
to the lending activity of other lenders subject to the CRA that maintained offices within this
assessment area, focusing upon LMI borrowers. In accordance with the HMDA, creditors with total
assets greater than $250 million and a branch office located within an MSA, must submit certain
information regarding mortgage loans for purchase, refinance, and home improvement purposes for
all property locations. This information was derived from the 2003 HMDA Aggregate information,
the latest available.

Based upon the data shown below, Peoples First’s overall record of lending to LMI borrowers was
slightly higher than that of other lenders within this assessment area, but below this assessment area’s
demographics even when considering the percentage of families below the poverty level.

             2003 Aggregate HMDA Borrower Income Analysis for Mortgage Loan
  Originations of similar products by other lenders within the Panama City MSA Assessment Area

                    Income         Percent       Peoples First    Other Lenders       Distribution
                   Category        Of MFI        Percent of No.   Percent of No.      of Families
                     Low            <50%              7.1%             5.1%              19.5%
                   Moderate       >50-<80%           13.9%            12.8%              18.1%


Geographic Distribution of Loans

The examiner also performed a review to determine the adequacy of dispersion of lending with
regard to lending within the LMI areas of the assessment area for 2003 and 2004. Specifically, the
examiner analyzed the percentage of residential mortgage loans, by number and dollar amount of the
mortgage loans originated by Peoples First within the LMI census tracts compared to the percentage
of OOHUs located within those areas.




                                                                                                             23
Office of Thrift Supervision                                                    Evaluation Date:      06/13/2005
Draft Large Institution Performance Evaluation                                  Docket Number:            07939



Institution

The analysis disclosed the following information concerning the Institution’s record of residential
mortgage lending throughout the different census tracts within the assessment area for 2003 and
2004. The percentage of OOHUs is derived from the 2000 Census:

        Income           Percent           Number        No. Pct.   Volume      Pct. of $    Distribution
        Category         of MFI                                      ($000s)                 of OOHUs
        Low            <50%                     9            0.5%        705      0.3%            1.0%
        Moderate       >50-<80%               167            9.6%     15,015      6.4%           19.7%
        Middle         >80-<120%            1,145           66.1%    160,372     68.0%           56.3%
        Upper          >120%                  412           23.8%     59,694     25.3%           23.0%
         Total                              1,733          100.0%   $235,786    100.0%          100.0%

As indicated above, the Institution’s overall record of lending in the LMI areas was below this
assessment area’s demographics on a number basis, as well as on a dollar volume basis.

Peoples First’s overall record of lending within different geographic areas was also compared to the
lending activity of other lenders subject to the CRA that maintained offices within this assessment
area. This information was derived from the 2003 HMDA Aggregate information, the latest
available. In order to provide a more accurate comparison, the lending activity was compiled for all
types of mortgage loans for single-family dwellings originated by lenders subject to the CRA,
focusing upon mortgage lending in the moderate-income census tracts.

Based upon this data, Peoples First’s level of lending within the LMI geographies was slightly higher
than that of other lenders, but below this assessment area’s demographics as indicated below:

       2003 Aggregate HMDA Geographic Distribution Analysis for Mortgage Loan
Originations of similar products by other lenders within the Panama City MSA Assessment Area

        Income              Percent        Peoples First       Other Lenders     Distribution
        Category             of MFI        Percent of No.      Percent of No.    of O.O.H.U.
      Low                  <50%                  0.6%               0.6%             1.0%
      Moderate             >50-<80%              10.2%              9.2%            19.7%




                                                                                                             24
Office of Thrift Supervision                                           Evaluation Date:      06/13/2005
Draft Large Institution Performance Evaluation                         Docket Number:            07939



Institution

Description of Institution’s Operations in Pensacola MSA:
Description of Institution’s Operations in Pensacola MSA:


Peoples First operates five offices in Escambia and Santa Rosa Counties, Florida, three in Pensacola,
one in Gulf Breeze, and one in Pace. One branch is located in a moderate-income CT, three are
located in middle-income CTs, and one is located in an upper-income CT.

Peoples First’s offices within this assessment area have varying hours depending upon where they are
located. The lobbies of the offices located in Escambia County are open for business from 9:00 a.m.
to 4:30 p.m. Monday through Thursday and until 5:00 p.m. on Friday. Two of the three drive-in
windows are open on Saturday from 8:30 a.m. until noon. The lobbies of the offices located in Santa
Rosa County open at 8:30 a.m. Monday through Friday and close at 4:30 p.m. or 5:00 p.m. depending
on the office. One Santa Rosa branch is open on Saturday from 9:00 a.m. until noon. The hours of
operation are considered adequate and consistent with those of the Institution’s competitors.

Description of Pensacola MSA Assessment Area

Peoples First’s Pensacola MSA assessment area comprises all of Escambia and Santa Rosa Counties,
Florida. This assessment area included 77 CTs with income designations, three low-income, 22
moderate-income, 37 middle-income, and 15 upper-income tracts as of the 2000 Census.

The 2000 Census data will be used to evaluate the Institution’s lending to borrowers of different
incomes and geographic distribution for 2003 and 2004 mortgage lending activity.

A summary of certain geographic characteristics for the assessment area based upon 2000 Census
data is as follows:

             DEMOGRAPHICS OF CTs                            FAMILY DISTRIBUTION
      CT Category Population Owner-Occupied                  Income    Distribution
                              Housing Units                 Category   of Families
       Low             8,368      1.3%                        Low          20.4%
       Moderate       91,046     16.2%                        Moderate     17.8%
       Middle        222,399     56.9%                        Middle       22.1%
       Upper          90,340     25.6%                        Upper        39.7%
        Total        412,153    100.0%                        Total       100.0%




                                                                                                    25
Office of Thrift Supervision                                                        Evaluation Date:       06/13/2005
Draft Large Institution Performance Evaluation                                      Docket Number:             07939



Institution

The examiner’s review of 2000 Census data disclosed the following additional information about the
assessment area:

                 Total Population                                     412,153
                 Population 16 and older                              323,123 (78.4%)
                 Population Over 65                                   52,141 (12.7%)
                 Total Housing Units                                  173,766
                 Rental Occupied Units                                53,005 (30.5%)
                 1 - 4 Family Units                                   135,160 (77.8%)
                 Multi-Family Units                                   17,851 (10.3%)
                 Total Families                                       108,105
                 Families Below the Poverty Level                     11,662 (10.8%)

Description of Performance in Pensacola MSA:


Lending to Borrowers of Different Income Levels

In order to evaluate Peoples First’s record of lending to borrowers of different income levels for 2003
and 2004, family income levels were stratified as a percentage of the updated MFI for the Pensacola
MSA. The updated MFI figures, as provided by the Department of Housing and Urban Development
for the Pensacola MSA for 2003 and 2004 were $47,400 and $49,200, respectively.

From information contained in the Institution’s 2003 and 2004 records, the examiner compiled the
following borrower income distribution statistics:

        Income           Percent           Number      No. Pct.      Volume        Pct. of $      Distribution
        Category         of MFI                                       ($000s)                     Of Families
          Low            <50%                 158        10.8%           9,986        5.3%           20.4%
        Moderate       >50-<80%               364        24.8%          31,422       16.7%           17.8%
         Middle        >80-<120%              349        23.7%          39,534       20.9%           22.1%
         Upper          >120%                 599        40.7%         107,547       57.1%           39.7%
         Total                              1,470*      100.0%       $188,489       100.0%          100.0%
       *Applicant income was not available for 33 originations totaling approximately $4.2 million.


As indicated above, the percentage of mortgage loans granted to low-income borrowers was below
the number of low-income families within this assessment area. However, Peoples First’s ability to
originate mortgage loans to low-income borrowers may be influenced by family poverty levels. The
examiner noted that according to the 2000 Census, approximately 52.9 percent of the low-income
families residing within this assessment area have incomes below the poverty level (10.8 percent of
                                                                                                    26
Office of Thrift Supervision                                                       Evaluation Date:   06/13/2005
Draft Large Institution Performance Evaluation                                     Docket Number:         07939



Institution

all families living within this assessment area have incomes below the poverty level). However, the
Institution’s level of mortgage lending to moderate-income borrowers was significantly higher than
the percentage of moderate-income families residing within this assessment area.

Peoples First’s overall record of lending to borrowers of different income levels was also compared
to the lending activity of other lenders subject to the CRA that maintained offices within this
assessment area, focusing upon LMI borrowers. In accordance with the HMDA, creditors with total
assets greater than $250 million and a branch office located within an MSA, must submit certain
information regarding mortgage loans for purchase, refinance, and home improvement purposes for
all property locations. This information was derived from 2003 HMDA Aggregate information, the
latest available.

Based upon the data shown below, Peoples First’s overall record of lending to LMI borrowers was
significantly higher than that of other lenders within this assessment area, and commensurate with
this assessment area’s demographics when considering the percentage of families below the poverty
level.

            2003 Aggregate HMDA Borrower Income Analysis for Mortgage Loan
 Originations of similar products by other lenders within the Pensacola MSA Assessment Area

                    Income         Percent       Peoples First    Other Lenders       Distribution
                   Category        Of MFI        Percent of No.   Percent of No.      of Families
                     Low            <50%              10.1%            5.2%              20.4%
                   Moderate       >50-<80%            23.7%           14.4%              17.8%


Geographic Distribution of Loans

The examiner also performed a review to determine the adequacy of dispersion of lending with
regard to lending within the LMI areas of this assessment area for 2003 and 2004. Specifically, the
examiner analyzed the percentage of residential mortgage loans, by number and dollar amount of the
mortgage loans originated by Peoples First within the LMI census tracts compared to the percentage
of OOHUs located within those areas.




                                                                                                             27
Office of Thrift Supervision                                                     Evaluation Date:      06/13/2005
Draft Large Institution Performance Evaluation                                   Docket Number:            07939



Institution

The analysis disclosed the following information concerning the Institution’s record of residential
mortgage lending throughout the different census tracts within this assessment area for 2003 and
2004. The percentage of OOHUs is derived from the 2000 Census:

        Income           Percent           Number       No. Pct.     Volume      Pct. of $    Distribution
        Category         of MFI                                       ($000s)                 of OOHUs
        Low            <50%                    12             0.8%         899     0.5%            1.3%
        Moderate       >50-<80%               156            10.4%      13,512     7.0%           16.2%
        Middle         >80-<120%              838           55.8%      101,152    52.5%           56.9%
        Upper          >120%                  497           33.0%       77,081    40.0%           25.6%
         Total                              1,503          100.0%    $192,644    100.0%          100.0%

As indicated above, the Institution’s overall record of lending in the LMI areas was lower than this
assessment area’s demographics on a number basis, as well as on a dollar volume basis.

Peoples First’s overall record of lending within different geographic areas was also compared to the
lending activity of other lenders subject to the CRA that maintained offices within this assessment
area. This information was derived from 2003 HMDA Aggregate information, the latest available.
In order to provide a more accurate comparison, the lending activity was compiled for all types of
mortgage loans for single-family dwellings originated by lenders subject to the CRA, focusing upon
mortgage lending in the moderate-income census tracts.

Based upon this data, Peoples First’s level of lending within the LMI geographies was commensurate
with that of other lenders, but below this assessment area’s demographics as indicated below:

      2003 Aggregate HMDA Geographic Distribution Analysis for Mortgage Loan
Originations of similar products by other lenders within the Pensacola MSA Assessment Area

        Income              Percent        Peoples First       Other Lenders      Distribution
        Category             of MFI        Percent of No.      Percent of No.     Of O.O.H.U.
      Low                  <50%                  0.3%                0.4%             1.3%
      Moderate             >50-<80%              9.5%                8.9%            16.2%




                                                                                                              28
Office of Thrift Supervision                                            Evaluation Date:      06/13/2005
Draft Large Institution Performance Evaluation                          Docket Number:            07939



Institution



Description of Institution’s Operations in Tallahassee MSA:


Peoples First operates three offices in the Tallahassee MSA. All three branches are located in
middle-income CTs.

The lobbies of the offices located in this assessment area are open for business from 9:00 a.m. to 5:00
p.m. Monday through Friday. The drive-ins are open from 8:30 a.m. to 5:30 p.m. Monday through
Thursday, and until 6:00 p.m. on Friday. The drive-ins are open on Saturday from 9:00 a.m. until
noon. The hours of operation are considered adequate and consistent with those of the Institution’s
competitors.

Description of Tallahassee MSA Assessment Area

Peoples First’s Tallahassee MSA assessment area comprises all of Leon County, Florida. This
assessment area included 47 CTs with income designations, nine low-income, ten moderate-income,
16 middle-income, and 12 upper-income tracts as of the 2000 Census.

The 2000 Census data will be used for a similar analysis of the Institution’s 2003 and 2004 mortgage
lending activity.

A summary of certain geographic characteristics for the assessment area based upon 2000 Census
data is as follows:

             DEMOGRAPHICS OF CTs                             FAMILY DISTRIBUTION
      CT Category Population Owner-Occupied                   Income    Distribution
                              Housing Units                  Category   of Families
       Low            42,952      6.2%                         Low          19.8%
       Moderate       34,385     11.1%                         Moderate     14.5%
       Middle         86,764     41.5%                         Middle       21.3%
       Upper          72,760     41.2%                         Upper        44.4%
        Total        236,861    100.0%                         Total       100.0%




                                                                                                     29
Office of Thrift Supervision                                                        Evaluation Date:       06/13/2005
Large Savings Association Performance Evaluation                                    Docket Number:             07939



Institution (continued)

The examiner’s review of 2000 Census data disclosed the following additional information about the
assessment area:

                 Total Population                                     236,861
                 Population 16 and older                              194,247 (82.0%)
                 Population Over 65                                   19,891 (8.4%)
                 Total Housing Units                                  103,974
                 Rental Occupied Units                                41,507 (39.9%)
                 1 - 4 Family Units                                   71,947 (69.2%)
                 Multi-Family Units                                   20,659 (19.9%)
                 Total Families                                       54,796
                 Families Below the Poverty Level                     5,164 (9.4%)



Description of Performance in Tallahassee MSA:

Lending to Borrowers of Different Income Levels

In order to evaluate Peoples First’s record of lending to borrowers of different income levels for 2003
and 2004 family income levels were stratified as a percentage of the updated MFI for the Tallahassee
MSA. The updated MFI figures, as provided by the Department of Housing and Urban Development
for the Tallahassee MSA for 2003 and 2004 were $54,500 and $55,400, respectively.

From information contained in the Institution’s 2003 and 2004 records, the examiner compiled the
following borrower income distribution statistics:

       Income            Percent          Number       No. Pct.      Volume        Pct. of $      Distribution
       Category          of MFI                                       ($000s)                     Of Families
         Low             <50%                 93         11.1%           7,263        6.3%           19.8%
       Moderate        >50-<80%              204         24.3%          20,668       17.9%           14.5%
        Middle         >80-<120%             199         23.7%          26,221       22.7%           21.3%
        Upper           >120%                343         40.9%          61,273       53.1%           44.4%
        Total                                839*       100.0%       $115,425       100.0%          100.0%
       *Applicant income was not available for 16 originations totaling approximately $9.4 million.


As indicated above, the percentage of mortgage loans granted to low-income borrowers was below
the number of low-income families within this assessment area. However, Peoples First’s ability to
originate mortgage loans to low-income borrowers may be influenced by family poverty levels. The
examiner noted that according to the 2000 Census, approximately 47.6 percent of the low-income
                                                                                                   30
Office of Thrift Supervision                                                     Evaluation Date:   06/13/2005
Large Savings Association Performance Evaluation                                 Docket Number:         07939



Institution (continued)

families residing within this assessment area have incomes below the poverty level (9.4 percent of all
families living within this assessment area have incomes below the poverty level). The Institution’s
level of mortgage lending to moderate-income borrowers was significantly higher than the percentage
of moderate-income families residing within this assessment area.

Peoples First’s overall record of lending to borrowers of different income levels was also compared
to the lending activity of other lenders subject to the CRA that maintained offices within this
assessment area, focusing upon LMI borrowers. In accordance with the HMDA, creditors with total
assets greater than $250 million and a branch office located within an MSA, must submit certain
information regarding mortgage loans for purchase, refinance, and home improvement purposes for
all property locations. This information was derived from 2003 HMDA Aggregate information, the
latest available.

Based upon the data shown below, Peoples First’s overall record of lending to LMI borrowers was
significantly higher than that of other lenders within this assessment area, and commensurate with
this assessment area’s demographics when considering the percentage of families below the poverty
level.

             2003 Aggregate HMDA Borrower Income Analysis for Mortgage Loan
      Originations of similar products by other lenders within the Tallahassee Assessment Area

                   Income        Percent       Peoples First    Other Lenders       Distribution
                  Category       Of MFI        Percent of No.   Percent of No.      of Families
                    Low           <50%               8.2%            5.3%              19.8%
                  Moderate      >50-<80%            19.4%           15.9%              14.5%


Geographic Distribution of Loans

The examiner also performed a review to determine the adequacy of dispersion of lending with
regard to lending within the LMI areas of this assessment area for 2003 and 2004. Specifically, the
examiner analyzed the percentage of residential mortgage loans, by number and dollar amount of the
mortgage loans originated by Peoples First within the LMI census tracts compared to the percentage
of OOHUs located within those areas.




                                                                                                           31
Office of Thrift Supervision                                                 Evaluation Date:      06/13/2005
Large Savings Association Performance Evaluation                             Docket Number:            07939



Institution (continued)

The analysis disclosed the following information concerning the Institution’s record of residential
mortgage lending throughout the different census tracts within this assessment area for 2003 and
2004. The percentage of OOHUs is derived from the 2000 Census:

       Income           Percent         Number       No. Pct.    Volume      Pct. of $    Distribution
       Category         of MFI                                    ($000s)                 of OOHUs
       Low            <50%                  67            7.8%      12,422    10.0%            6.2%
       Moderate       >50-<80%              77            9.0%       6,380     5.1%           11.1%
       Middle         >80-<120%            340           39.8%      43,082    34.5%           41.5%
       Upper          >120%                371           43.4%      62,905    50.4%           41.2%
        Total                              855          100.0%   $124,789    100.0%          100.0%

As indicated above, the Institution’s overall record of lending in the LMI areas was commensurate
with this assessment area’s demographics on a number basis, and as well as on a dollar volume basis.

Peoples First’s overall record of lending within different geographic areas was also compared to the
lending activity of other lenders subject to the CRA that maintained offices within this assessment
area. This information was derived from the 2003 HMDA Aggregate information, the latest
available. In order to provide a more accurate comparison, the lending activity was compiled for all
types of mortgage loans for single-family dwellings originated by lenders subject to the CRA,
focusing upon mortgage lending in the moderate-income census tracts.

Based upon this data, Peoples First’s level of lending within the LMI geographies was equal to that of
other lenders, but below this assessment area’s demographics as indicated below:

      2003 Aggregate HMDA Geographic Distribution Analysis for Mortgage Loan
   Originations of similar products by other lenders within the Tallahassee Assessment Area

       Income              Percent      Peoples First       Other Lenders     Distribution
       Category            of MFI       Percent of No.      Percent of No.    Of O.O.H.U.
      Low                <50%                 4.6%               4.8%             6.2%
      Moderate           >50-<80%             7.9%               7.7%             11.1%


As previously noted, 64.2 percent of Peoples First’s mortgage lending within the combined
assessment area is concentrated within the Panama City, Pensacola, and Tallahassee assessment
areas. Therefore, no analysis was performed with respect to the Institution’s mortgage lending
distribution in the remaining assessment areas since the results would not have been meaningful.



                                                                                                          32
Office of Thrift Supervision                                                                        Evaluation Date:             06/13/2005
Large Savings Association Performance Evaluation                                                    Docket Number:                   07939



Appendix A

Scope of Examination



                                                        SCOPE OF EXAMINATION


                          TIME PERIOD REVIEWED:                       January 1, 2003 – December 31, 2004
                          FINANCIAL INSTITUTION                                           PRODUCTS REVIEWED
                        Peoples First Community                                          HMDA loans
                        Bank                                                             Small business loans
                                  AFFILIATE(S)                     AFFILIATE              PRODUCTS REVIEWED
                                                                 RELATIONSHIP
                        None




                           LIST OF ASSESSMENT AREAS AND TYPE OF EXAMINATION
                                         TYPE OF      BRANCHES
                 ASSESSMENT AREA                                      OTHER INFORMATION
                                       EXAMINATION      VISITEDi
            Panama City MSA                         Full Scope              One                   None
            Pensacola MSA                           Full Scope              None                  None
            Tallahassee MSA                         Full Scope              None                  None
            Orlando MSA                             None                    None                  None
            Fort Walton Beach MSA                   None                    None                  None
            Jacksonville MSA                        None                    None                  None
            Flagler County                          None                    None                  None
            Daytona Beach MSA                       None                    None                  None
            Jackson County                          None                    None                  None




i   There is a statutory requirement that the written evaluation of a multi-state institution’s performance must list the individual branches
     examined in each state.




                                                                                                                                           33
Office of Thrift Supervision                                                                     Evaluation Date:            06/13/2005
Large Savings Association Performance Evaluation                                                 Docket Number:                  07939



Appendix B

Summary of State and Multi-state MSA Ratings2


                State                           Lending               Investment                Service                 Overall
            or Multi-state                        Test                   Test                    Test                    State
             MSA Name                            Rating                 Rating                  Rating                  Rating
    None




2
    Weight selections used for the evaluation of the institution’s CRA performance could result in unrated Performance Test factors.
                                                                                                                                       34
Office of Thrift Supervision                       Evaluation Date:   06/13/2005
Large Savings Association Performance Evaluation   Docket Number:         07939



Appendix C

FFIEC Aggregate Core Tables




                                                                                   35
Office of Thrift Supervision                                                           Evaluation Date:           06/13/2005
Large Institution Performance Evaluation                                               Docket Number:                 07939



CRA Rating Definitions
There are four separate and distinct CRA assessment methods set forth in the CRA: the lending, investment, and service
tests for large, retail institutions; the streamlined examination method for small institutions; the community development
test for wholesale and limited purpose institutions; and the strategic plan option for all institutions. OTS will assign an
institution one of the four assigned ratings required by Section 807 of the CRA:

1.   “Outstanding record of meeting community credit needs.”
2.   “Satisfactory record of meeting community credit needs.”
3.   “Needs to improve record of meeting community credit needs.”
4.   “Substantial noncompliance in meeting community credit needs.”

OTS judges an institution’s performance under the test and standards in the rule in the context of information about the
institution, its community, its competitors, and its peers. Among the factors to evaluate in an examination are the economic
and demographic characteristics of the assessment area(s); the lending, investment, and service opportunities in the
assessment area(s); the institution’s product offerings and business strategy; the institution’s capacity and constraints; the
prior performance of the institution; in appropriate circumstances, the performance of a similarly situated institution; and
other relevant information. An institution’s performance need not fit each aspect of a particular rating profile in order to
receive that rating, and exceptionally strong performance with respect to some aspects may compensate for weak
performance in others. The institution’s overall performance, however, must be consistent with safe and sound banking
practices and generally with the appropriate rating profile. In addition, OTS adjusts the evaluation of an institution’s
performance under the applicable assessment method in accordance with §563e.21 and §563e.28, which provide for
adjustments on the basis of evidence of discriminatory or other illegal credit practices.




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