Item 8.01. Other Events.
In its periodic filings, Peoples Financial Corporation (the "Company") has
disclosed the pertinent facts relating to a civil action filed by USF&G against
the Company's bank subsidiary and other non-related parties. On December 29,
2008, the Company's bank subsidiary, The Peoples Bank, Biloxi, Mississippi, and
USF&G reached an out of court settlement, pursuant to which the bank subsidiary
did not admit any wrongdoing. This settlement effectively concludes the matter
between USF&G and the bank subsidiary only.