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UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
Washington, DC 20549
FORM 11-K
| x | ANNUAL REPORT PURSUANT TO SECTION 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934 |
For the fiscal year ended December 31, 2003
OR
| ¨ | TRANSITION REPORT PURSUANT TO SECTION 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934 [NO FEE REQUIRED]. |
For the transition period from to .
Commission file number: 001-13253
| A. | Full title of the plan and the address of the plan, if different from that of the issuer named below: |
THE PEOPLES BANK & TRUST COMPANY 401(K) PLAN
| B. | Name of issuer of the securities held pursuant to the plan and the address of its principal executive office: |
THE PEOPLES HOLDING COMPANY
209 Troy Street
Tupelo, MS 38802
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THE PEOPLES BANK & TRUST COMPANY 401(k) PLAN
| Page | ||
| 1 | ||
| 2 | ||
| Financial Statements: |
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| 3 | ||
| 4 | ||
| 5 - 8 | ||
| Supplemental Schedule: |
||
| Schedule H, Line 4i - Schedule of Assets (Held at End of Year) |
9 - 10 | |
| 11 | ||
| Exhibit 23.1 Consent of Independent Registered Public Accounting Firm |
||
| Exhibit 23.2 Consent of Independent Auditor |
||
All other schedules are omitted because there is no information to report.
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REPORT OF INDEPENDENT REGISTERED PUBLIC ACCOUNTING FIRM
401(k) Oversight Committee
The Peoples Bank & Trust Company
Tupelo, Mississippi
We have audited the accompanying statement of net assets available for benefits of The Peoples Bank & Trust Company 401(k) Plan as of December 31, 2003, and the related statement of changes in net assets available for benefits for the year then ended. These financial statements are the responsibility of the Plan’s management. Our responsibility is to express an opinion on these financial statements based on our audit.
We conducted our audit in accordance with the standards of the Public Company Accounting Oversight Board (United States). Those standards require that we plan and perform the audit to obtain reasonable assurance about whether the financial statements are free of material misstatement. An audit includes examining, on a test basis, evidence supporting the amounts and disclosures in the financial statements. An audit also includes assessing the accounting principles used and significant estimates made by management, as well as evaluating the overall financial statement presentation. We believe that our audit provides a reasonable basis for our opinion.
In our opinion, the financial statements referred to above present fairly, in all material respects, the net assets available for benefits of The Peoples Bank & Trust Company 401(k) Plan as of December 31, 2003, and the changes in its net assets available for benefits for the year then ended in conformity with accounting principles generally accepted in the United States of America.
Our audit of the Plan’s financial statements as of and for the year ended December 31, 2003, was conducted for the purpose of forming an opinion on the financial statements taken as a whole. The supplemental schedule of assets (held at the end of the year) is presented for the purpose of additional analysis and is not a required part of the basic financial statements, but is supplementary information required by the Department of Labor’s Rules and Regulations for Reporting and Disclosure under the Employee Retirement Income Security Act of 1974. This supplemental information is the responsibility of the Plan’s management. The supplemental information has been subjected to the auditing procedures applied in the audit of the basic financial statements for the year ended December 31, 2003, and, in our opinion, is fairly stated in all material respects in relation to the basic financial statements taken as a whole.
/s/ T. E. LOTT & COMPANY
Columbus, Mississippi
July 1, 2004
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To the Administrative Committee
The Peoples Bank and Trust Company
401(k) Plan
Tupelo, Mississippi
We have audited the accompanying statement of net assets available for benefits of The Peoples Bank and Trust Company 401(k) Plan as of December 31, 2002, and the related statements of changes in net assets available for benefits for the year then ended. These financial statements are the responsibility of the Plan’s management. Our responsibility is to express an opinion on these financial statements based on our audit.
We conducted our audit in accordance with auditing standards generally accepted in the United States of America. Those standards require that we plan and perform the audit to obtain reasonable assurance about whether the financial statements are free of material misstatement. An audit includes examining, on a test basis, evidence supporting the amounts and disclosures in the financial statements. An audit also includes assessing the accounting principles used and significant estimates made by management, as well as evaluating the overall financial statement presentation. We believe that our audit provides a reasonable basis for our opinion.
In our opinion, the financial statements referred to above present fairly, in all material respects, the net assets available for benefits of The Peoples Bank and Trust Company 401(k) Plan as of December 31, 2002, and the changes in its net assets available for benefits for the year then ended in conformity with accounting principles generally accepted in the United States of America.
Our audit was conducted for the purpose of forming an opinion on the basic financial statements taken as a whole. The supplemental schedules of assets held for investment purposes at end of year, and reportable transactions, together referred to as “supplemental information”, are presented for the purpose of additional analysis and are not a required part of the basic financial statements but are supplementary information required by the Department of Labor’s Rules and Regulations for Reporting and Disclosure under the Employee Retirement Income Security Act of 1974. This supplemental information is the responsibility of the Plan’s management. The supplemental information has been subjected to the auditing procedures applied in the audits of the basic financial statements and, in our opinion, is fairly stated in all material respects in relation to the basic financial statements taken as a whole.
/s/ NAIL MCKINNEY PROFESSIONAL ASSOCIATES
April 23, 2003
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THE PEOPLES BANK & TRUST COMPANY
401(k) PLAN
STATEMENTS OF NET ASSETS AVAILABLE FOR BENEFITS
DECEMBER 31, 2003 AND 2002
| 2003 |
2002 | |||||
| ASSETS | ||||||
| INVESTMENTS AT FAIR VALUE (Note E) |
||||||
| Participant directed |
$ | 10,200,591 | $ | 6,456,794 | ||
| Participant note receivable |
17,402 | 1,424 | ||||
| Total investments |
10,217,993 | 6,458,218 | ||||
| RECEIVABLES |
||||||
| Employer contribution |
742,488 | 644,644 | ||||
| Dividends |
17,038 | 13,446 | ||||
| Total receivables |
759,526 | 658,090 | ||||
| Total Assets |
10,977,519 | 7,116,308 | ||||
| LIABILITIES | ||||||
| Cash overdraft |
— | 1,182 | ||||
| Total liabilities |
— | 1,182 | ||||
| Net Assets Available for Benefits |
$ | 10,977,519 | $ | 7,115,126 | ||
The accompanying notes are an integral part of these statements.
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THE PEOPLES BANK & TRUST COMPANY
401(k) PLAN
STATEMENTS OF CHANGES IN NET ASSETS AVAILABLE FOR BENEFITS
YEARS ENDED DECEMBER 31, 2003 AND 2002
| 2003 |
2002 |
||||||
| ADDITIONS |
|||||||
| Investment income (loss): |
|||||||
| Net appreciation (depreciation) in fair value of investments (Note E) |
$ | 1,609,309 | $ | (388,947 | ) | ||
| Interest |
3,830 | 4,154 | |||||
| Dividends |
62,330 | 45,738 | |||||
| 1,675,469 | (339,055 | ) | |||||
| Contributions: |
|||||||
| Employer |
742,488 | 644,644 | |||||
| Participant deferrals |
1,338,609 | 1,217,956 | |||||
| Rollover |
14,803 | — | |||||
| 2,095,900 | 1,862,600 | ||||||
| Total Additions |
3,771,369 | 1,523,545 | |||||
| DEDUCTIONS |
|||||||
| Benefits paid to participants |
359,115 | 309,023 | |||||
| Certain deemed distributions |
3,285 | — | |||||
| Other expenses |
400 | — | |||||
| Total deductions |
362,800 | 309,023 | |||||
| NET INCREASE |
3,408,569 | 1,214,522 | |||||
| NET ASSETS AVAILABLE FOR BENEFITS |
|||||||
| Beginning of year |
7,115,126 | 5,900,604 | |||||
| End of year, before transfer of plan assets into The Peoples Bank & Trust Company 401(k) Plan for insurance agency employees |
10,523,695 | $ | 7,115,126 | ||||
| Transfer of plan assets to The Peoples Bank & Trust Company 401(k) Plan for insurance agency employees (Note G) |
453,824 | ||||||
| Net assets available for plan benefits after transfer to The Peoples Bank & Trust Company 401(k) Plan for insurance agency employees |
$ | 10,977,519 | |||||
The accompanying notes are an integral part of these statements.
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THE PEOPLES BANK & TRUST COMPANY
401(k) PLAN
DECEMBER 31, 2003 AND 2002
NOTE A - DESCRIPTION OF PLAN
The following brief description of The Peoples Bank & Trust Company 401(k) Plan (Plan) is provided for general information purposes only. Participants should refer to the Plan agreement for more complete information.
General
The Plan is a defined contribution plan covering substantially all employees of The Peoples Bank & Trust Company. It is subject to the provisions of the Employee Retirement Income Security Act of 1974 (ERISA).
Contributions
Each year, participants may contribute up to the applicable IRS limits, as defined in the Plan. Participants may also contribute amounts representing distributions from other qualified defined benefit or contribution plans. The employer matches 100% of the employee’s salary deferral contribution up to four percent of the employee’s compensation. The employer may make a discretionary profit sharing contribution. Contributions are subject to certain limitations.
Participant Accounts
Each participant’s account is credited with the participant’s contribution and allocations of the employer contribution and plan earnings/losses. Each participant’s account is also charged with an allocation of administrative expenses, when applicable. Allocations are based on participant earnings or account balances, as defined. The benefit to which a participant is entitled is the benefit that can be provided from the participant’s vested account.
Vesting
Participants are immediately 100% vested in salary deferral contribution and earnings allocated to those accounts. Vesting in matching employer contributions and profit sharing contributions is based on a six year graduated schedule. Forfeitures of non-vested employer match contributions will reduce employer match contribution or reduce expenses of the plan. Forfeitures of non-vested employer profit sharing contributions will be allocated to other participants based on compensation.
Payment of Benefits
Upon termination of service with the employer, a participant may elect to receive a lump-sum distribution of his or her entire vested account balance. Benefits are recorded when paid.
( Continued )
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THE PEOPLES BANK & TRUST COMPANY
401(k) PLAN
NOTES TO FINANCIAL STATEMENTS
DECEMBER 31, 2003 AND 2002
NOTE A - DESCRIPTION OF PLAN (Continued)
Participant Notes Receivable
Participants may borrow from their fund accounts up to a maximum equal to the lesser of $50,000 or 50% of their deferral account balance. Loan availability is generally limited to hardship restrictions. Loan terms range from 1-5 years unless the loan is for the purchase of a principal residence. The loans are secured by the balance in the participant’s account and bear interest at prime plus one. Principal and interest is paid ratably through payroll deductions.
NOTE B - SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES
Basis of Accounting
The Plan’s financial statements are prepared using the accrual basis of accounting, with the exception of the payment of benefits, which are recognized as a reduction in the net assets available for benefits of the Plan as they are disbursed to participants.
Investment Valuation
Quoted market prices are used to value investments. Purchases and sales of securities are recorded on a trade-date basis.
Administrative Expenses
The Plan sponsor absorbs all of the administrative expenses of the Plan.
Estimates
The preparation of financial statements in conformity with accounting principles generally accepted in the United States of America requires the plan administrator to make estimates and assumptions that affect certain reported amounts and disclosures. Accordingly, actual results may differ from those estimates.
Forfeitures
Forfeitures are based on a participant’s compensation. At December 31, 2003, there were forfeitures pending in the amount of $10,563.
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THE PEOPLES BANK & TRUST COMPANY
401(k) PLAN
NOTES TO FINANCIAL STATEMENTS
DECEMBER 31, 2003 AND 2002
NOTE C - PLAN TERMINATION
Although it has not expressed any intent to do so, The Peoples Bank & Trust Company has the right at any time to terminate the Plan subject to the provisions of ERISA. In the event of plan termination, all employees will become 100% vested in their accounts.
NOTE D - TAX STATUS
The Plan obtained its latest determination letter on July 3, 2003, in which the Internal Revenue Service stated that the Plan, as then designed, was in compliance with the applicable requirements of the Internal Revenue Code. The Plan has been amended since that date. The plan administrator and the Plan’s tax counsel believe that the Plan is currently designed and being operated in compliance with the applicable requirements of the Internal Revenue Code. Therefore, no provision for income taxes has been included in the Plan’s financial statements.
NOTE E - INVESTMENTS
The fair value of individual investments that represent 5% or more of the Plan’s net assets as of December 31, 2003 and 2002, are as follows:
| 2003 |
2002 | |||||
| Peoples Holding Company Common Stock, |
$ | 2,809,604 | $ | 1,941,982 | ||
| Federated Max-Cap Index SS, |
2,132,596 | 1,725,553 | ||||
| Federated Total Return Bond SS, |
1,270,214 | — | ||||
| Vanguard/Wellington Fund, Inc., |
— | 1,469,155 | ||||
| Vanguard/Wellesley Income Fund, |
— | 901,883 | ||||
( Continued )
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THE PEOPLES BANK & TRUST COMPANY
401(k) PLAN
NOTES TO FINANCIAL STATEMENTS
DECEMBER 31, 2003 AND 2002
NOTE E - INVESTMENTS (Continued)
During 2003 and 2002, the Plan’s investments (including gains and losses on investments bought and sold, as well as held during the year) appreciated (depreciated) in value by $1,609,309 and $(388,947), respectively, as follows:
| 2003 |
2002 |
||||||
| Appreciation (depreciation) in fair value: |
|||||||
| Employer Securities |
$ | 474,413 | $ | 168,326 | |||
| Registered Investment Companies |
1,134,896 | (557,273 | ) | ||||
| $ | 1,609,309 | $ | (388,947 | ) | |||
NOTE F - RELATED PARTY TRANSACTIONS
The Peoples Bank & Trust Company is the trustee of the Plan. Federated Investors, Inc., and related subsidiaries act as custodian and a clearing house for the Plan as well as investment advisor for certain of the Plan’s investments.
NOTE G - TRANSFER OF FUNDS
The Peoples Bank & Trust Company purchased Southern Insurance Company on May 1, 2000. The final transfer of funds occurred on June 19, 2003, and is listed as an addition to the increase in net assets.
NOTE H - RECLASSIFICATION
Certain items in the 2002 financial statements have been reclassified to conform to the 2003 presentation.
NOTE I - SUBSEQUENT EVENT
The Peoples Bank & Trust Company acquired Renasant Bank during 2004 and amended the Plan to make all newly acquired eligible employees participants of the Plan as of July 1, 2004.
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SUPPLEMENTAL SCHEDULE
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THE PEOPLES BANK & TRUST COMPANY
401(k) PLAN
EIN 64-0220550 PLAN 004
SCHEDULE H, LINE 4i - SCHEDULE OF ASSETS (HELD AT END OF YEAR)
DECEMBER 31, 2003
| (a) |
(b) Identity of issue, |
(c) Description of investment including maturity date, rate of interest, collateral, par, or maturity value |
(d) Cost |
(e) Current Value | |||||||
| * |
Baron | Registered Investment Co., Baron Growth Fund |
$ | * | * | $ | 258,892 | ||||
| * |
Federated | Registered Investment Co., Federated Cap Appreciation A |
* | * | 475,165 | ||||||
| * |
Federated | Registered Investment Co., Federated Mortgage SS |
* | * | 513,410 | ||||||
| * |
Federated | Registered Investment Co., Federated Max Cap Index SS |
* | * | 2,132,596 | ||||||
| * |
Federated | Registered Investment Co., Fed US Govt Sec 1-3YRS SS |
* | * | 386,505 | ||||||
| * |
Federated | Registered Investment Co., Federated Stock Trust Fund |
* | * | 264,305 | ||||||
| * |
Federated | Registered Investment Co., Fed International Equity A |
* | * | 326,441 | ||||||
| * |
Federated | Registered Investment Co., Federated Total Return Bond SS |
* | * | 1,270,214 | ||||||
| * |
Federated | Registered Investment Co., Federated Intl High Income A |
* | * | 198,129 | ||||||
| * |
Janus | Registered Investment Co., Janus Adviser Cap Appreciation |
* | * | 263,777 | ||||||
| * |
Federated | Registered Investment Co., Federated Kaufmann A |
* | * | 395,076 | ||||||
| * |
Lord Abbett | Registered Investment Co., Lord Abbett Mid-Cap Value A |
* | * | 37,685 | ||||||
| * |
MFS | Registered Investment Co., MFS International Value A Fund |
* | * | 325,432 | ||||||
( Continued )
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THE PEOPLES BANK & TRUST COMPANY
401(k) PLAN
EIN 64-0220550 PLAN 004
SCHEDULE H, LINE 4i - SCHEDULE OF ASSETS (HELD AT END OF YEAR)
DECEMBER 31, 2003
| (a) |
(b) Identity of issue, |
(c) Description of investment including maturity date, rate of interest, collateral, par, or maturity value |
(d) Cost |
(e) Current Value | ||||||
| * |
Peoples Holding Company |
Trust for U. S. Treasury obligations |
* | * | $ | 8,570 | ||||
| * |
The Peoples Bank Stock |
Employer Security, Peoples Holding Co., Common Stock |
* | * | 2,809,604 | |||||
| * |
Federated |
Registered Investment Co., Federated Prime Obligations SS |
* | * | 391,396 | |||||
| * |
Turner |
Registered Investment Co., Turner Small Cap Value Fund |
* | * | 143,394 | |||||
| * |
Participant Loans |
Range of interest rates from 5% to 10% |
* | * | 17,402 | |||||
| $ | 10,217,993 | |||||||||
| * | Denotes party-in-interest |
| ** | Cost information has been omitted for participant directed investment. |
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Pursuant to the requirements of the Securities Exchange Act of 1934, the trustees (or other persons who administer the employee benefit plan) have duly caused this Annual Report on Form 11-K to be signed on its behalf by the undersigned hereunto duly authorized.
| THE PEOPLES BANK & TRUST COMPANY 401(K) PLAN | ||||
| Date: July 8, 2004 |
/s/ HOLLIS RAY SMITH | |||
| Hollis Ray Smith Division Vice President Human Resources Department | ||||
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EXHIBIT 23.1
CONSENT OF INDEPENDENT REGISTERED PUBLIC ACCOUNTING FIRM
We hereby consent to the incorporation by reference in the Registration Statement on Form S-8 (Commission File Number 333-104445) pertaining to The Peoples Bank & Trust Company 401(k) Plan of our report dated July 1, 2004, relating to the financial statements and schedules of The Peoples Bank & Trust Company 401(k) Plan for the plan year ending December 31, 2003, included in this Annual Report on Form 11-K.
/s/ T. E. LOTT & COMPANY
Columbus, Mississippi
July 1, 2004
EXHIBIT 23.2
CONSENT OF INDEPENDENT AUDITOR
We hereby consent to the incorporation by reference in the Registration Statement on Form S-8 (Commission File Number 333-104445) pertaining to The Peoples Bank & Trust Company 401(k) Plan of our report dated April 23, 2003, relating to the financial statements and schedules of The Peoples Bank & Trust Company 401(k) Plan for the plan year ending December 31, 2002, included in this Annual Report on Form 11-K for the year ended December 31, 2003.
/s/ NAIL McKINNEY PROFESSIONAL ASSOCIATION
Tupelo, Mississippi
July 9, 2004