SCHEDULE 14A INFORMATION

  Proxy Statement Pursuant to Section 14(a) of the Securities
                     Exchange Act of 1934

Filed by the Registrant [X]
Filed by a Party other than the Registrant [ ]

Check the appropriate box:

[ ]  Preliminary Proxy Statement    [ ]  Confidential, for Use
                                         of the Commission Only
                                         (as permitted by 
                                         Rule 14a-6(e)(2))
[X]  Definitive Proxy Statement
[ ]  Definitive Additional Materials
[ ]  Soliciting Material Pursuant to Rule 14a-11(c) or Rule     
     14a-12

                  THE PEOPLES HOLDING COMPANY
      ---------------------------------------------------
       (Name of Registrant as Specified In Its Charter)

 Payment of Filing Fee (Check the appropriate box):

[ ]  $125 per Exchange Act Rule 0-11(c)(1)(ii), 14a-6(i)(1), or 
      14a-6(i)(2) or Item 22(a)(2) of Schedule 14A.
[ ]  $500 per each party to the controversy pursuant to         
      Exchange Act Rule 14a-6(i)(3).
[ ]  Fee computed on table below per Exchange Act Rules 14a-
          6(i)(4) and 0-11:
          
          1)  Title of each clas of securities to which trans   
              action applies:
          2)  Aggregate number of securities to which transac   
              tion applies:
          3)  Per unit price or other underlying value of       
              transaction computed pursuant to Exchange Act     
              Rule 0-11:
          4)  Proposed maximum aggregate value of transaction:
          5)  Total fee paid:
[X]  Fee paid previously with preliminary materials.
[ ]  Check box if any part of the fee is offset as provided by  
     Exchange Act Rule 0-11(a)(2) and identify the filing for   
     which the offsetting fee was paid previously.  Identify    
     the previous filing by registration statement number, or   
     the Form or Schedule and the date of its filing.

1

                  THE PEOPLES HOLDING COMPANY

                  DEFINITIVE PROXY STATEMENT

                           CONTENTS

          Notice of meeting to shareholders  ................ 3

          Proxy statement  .................................. 4

          Appendix A,  Proxy Form  .......................... 

2

                    THE PEOPLES HOLDING COMPANY
                           P. O. BOX 709
                     TUPELO, MISSISSIPPI 38802

             NOTICE OF ANNUAL MEETING OF STOCKHOLDERS
                   TO BE HELD ON APRIL 11, 1995

TO THE STOCKHOLDERS:

   Notice is hereby given that the Annual Meeting of Stockholders
of The Peoples Holding Company (the "Company") will be held at the
principal office of The Peoples Bank and Trust Company at 209 Troy
Street, Tupelo, Mississippi, on April 11, 1995, at 2:00 o'clock
p.m. for the purpose of considering and voting on the following
matters:

          (1)  Authority to elect as members of the board of     
          directors for the terms specified the five (5)     
          nominees presented in the proxy material.

          (2)  To consider and act upon a proposal to amend
          the articles of incorporation to increase to
          7,500,000 the number of authorized shares of
          common stock.

          (3)  To ratify the appointment of Ernst and Young     
          LLP of Memphis, Tennessee, as auditors for the Company   
          for the current year.

          (4)  To exercise its discretion on any other matters     
          which properly come before said meeting.

Information regarding the matters to be acted upon at the meeting
is contained in the Proxy Statement accompanying this Notice.

   BY ORDER OF THE BOARD OF DIRECTORS

March 17, 1995                     /s/  John W. Smith
                                  ---------------------  
                                     Signature

                             IMPORTANT
WHETHER YOU EXPECT TO ATTEND THE MEETING OR NOT, PLEASE MARK,
SIGN, DATE, AND RETURN THE ENCLOSED PROXY IN THE ENVELOPE
PROVIDED, WHICH REQUIRES NO POSTAGE IF MAILED IN THE UNITED
STATES, AS PROMPTLY AS POSSIBLE.
3

                    THE PEOPLES HOLDING COMPANY

                          PROXY STATEMENT

    ANNUAL MEETING OF STOCKHOLDERS TO BE HELD ON APRIL 11, 1995

                           INTRODUCTION

   The accompanying Proxy is solicited by and on behalf of the
Board of Directors of The Peoples Holding Company (the "Company")
for use at the Annual Meeting of Stockholders to be held on April
11, 1995, and any adjournments thereof.  The time and place of the
meeting is set forth in the accompanying Notice of Meeting.  All
expenses of preparing, printing and mailing the Proxy and all
materials used in the solicitation thereof will be borne by the
Company.  In addition to the use of the mails, proxies may be
solicited by personal interview and telephone by directors,
officers and other employees of the Company, none of whom will
receive additional compensation for their services.  The date on
which this Proxy Statement and the accompanying Proxy are first
being sent or given to Stockholders of the Company is March 17,
1995.

                      PURPOSE OF THE MEETING

The annual meeting will be held for the purpose of:
1.  Electing five members of Board of Directors of the Company for
    terms specified;
2.  Considering and acting upon a proposal to amend the articles   
    of incorporation to increase to 7,500,000 the number of        
    authorized shares of common stock;
3.  Voting on auditors for the Company for the current year;
4.  Transacting such other matters as may properly come before
    the meeting.

                   VOTES REQUIRED FOR APPROVALS

   The Company has issued and outstanding 2,604,760 shares of
Common Stock, par value of $5.00 per share, which is the only
class of stock outstanding.  Only the holders of record of Common
Stock of the Company at the close of business on March 17, 1995,
are entitled to notice of and vote on the matters to come before
the Annual Meeting of Stockholders or any adjournment thereof.
   Presence, in person or by proxy, of the holders of a majority
of the outstanding shares of Common Stock of the Company entitled
to vote at the Annual Meeting is necessary to constitue a quorum
at the Meeting or any adjournment thereof.    
   A stockholder is entitled to one (1) vote, in person or by
proxy, at the Annual Meeting for each share of Common Stock of the
Company held of record in his or her name at the close of business
on the record date, March 17, 1995.
4 

   Affirmative vote of a majority of the outstanding shares of
Common Stock of the Company is required to elect directors.  Each
shareholder shall have the right to vote, allocable to the number
of shares owned by him, for as many persons as there are directors
to be elected, or to cumulate such votes and give one candidate as
many votes as the number of directors multiplied by the number of
votes allocable to his share equal, or to distribute such votes,
on the same principle, among as many candidates as he shall see
fit; without any conditions precedent to such action.
   Affirmative vote of a majority of outstanding shares of Common
Stock of the Company is required to approve the proposed amendment
to the articles of incorporation.
   Affirmative vote of a majority of outstanding shares of Common
Stock of the Company is required to approve auditors.
   Stockholders may designate a person or persons other than those
named in the enclosed Proxy to vote their shares at the Annual
Meeting or any adjournment thereof.  As to any other matter or
business which may be brought before the Annual Meeting or any
adjournment thereof, a vote may be cast pursuant to the accompany-
ing Proxy in accordance with the judgment of the person or persons
voting the same, but the management and Board of the Company do
not know of any other matters or business to come before the
meeting.  Any stockholder has the power to vote his or her Proxy
at any time, insofar as it has not been exercised, by written
notice or subsequently dated Proxy, received by the Company, or by
oral revocation given by the stockholder in person at the Annual
Meeting or any adjournment thereof.

               PRINCIPAL HOLDERS OF VOTING SECURITY

   The Company has only Common Stock outstanding and as of January
31, 1995, the Company had 2270 stockholders of record. To the
knowledge of management of the Company, no stockholder owns
beneficially more than five (5) percent of the Company's out-
standing Common Stock.  As of January 31, 1995, policy making
officers and directors as a group beneficially owned a total of
one hundred eighty-four thousand seven hundred thirty-three
(184,733) shares, or seven and nine one hundredths (7.09%) of
total shares of Common Stock outstanding. 

5

                       ELECTION OF DIRECTORS

   The charter of incorporation and bylaws of the Company provide
for a board of not less than seven nor more than twenty members to
be determined annually by the affirmative vote of a majority of
the entire Board of Directors of the Company.  The number of 
directors is currently fixed at fourteen, and the Board of Direc-
tors has voted to fix the number of members at fourteen for the
ensuing year.  The Board of Directors is divided into three clas-
ses having staggered terms.  All five of the directors whose terms
end in 1995 have been nominated for re-election to another term.

   The five persons named below will be nominated for election to
serve terms for the period indicated below and until their succes-
sors are duly elected and qualified.  It is the intention of the
persons named in the proxy to vote for the election of the five
nominees.  The following table sets forth the name, age, principal
occupation or position, periods of service as a director, number
of shares of company stock beneficially owned and certain other
information as to said directors and nominees:
 
[CAPTION]
NAME; AGE;                                     SHARES OF COMPANY STOCK
POSITION; and                                    OWNED DIRECTLY and
PRINCIPAL                      DIRECTOR           (INDIRECTLY) and
OCCUPATION                     SINCE(1)        PERCENTAGE OF TOTAL (2)

          NOMINEES FOR 3-YEAR TERMS ENDING IN  1998:
[S]                            [C]               [C]               [C]
Dr. Walter L. Bourland;         1983             25,208            .97%
 69; retired physician                           (1,861)           .07%

John W. Smith; 59;              1978              6,541             *
 President, The Peoples                          (1,449)
 Holding Company and
 The Peoples Bank and
 Trust Company

Jimmy S. Threldkeld; 62;        1974             10,329             *
 President, JCO, Inc.,                               (0)
 real estate development

Robert H. Weaver; 63;           1980             32,781           1.26%
 attorney, Watkins,                                  (0)  (3)        
 Ludlam & Stennis 

J. Larry Young; 56;             1982              1,204             *
 pharmacist and partner,                           (117)
 Ramsey-Young Pharmacy

6

[CAPTION]
                 DIRECTORS WITH TERMS ENDING IN 1996:
[S]                            [S]               [C]               [C]
William M. Beasley; 43;         1989             10,917              *
  attorney, Mitchell, Voge,                      (5,206)
  Beasley and Corban

A. M. Edwards, Jr.; 68;         1983              2,561              *
 attorney, Edwards, Storey,                      (2,561)
 Marshall & Helveston

Eugene B. Gifford, Jr.; 60;     1987             15,730              *
 attorney; Gifford and                           (5,819)
 Allred

Leonard W. Walden; 71;          1982             13,760              *
 President, Builder's                            (1,211)
 Supply, Inc.
[CAPTION]
             DIRECTORS WITH TERMS ENDING IN 1997:
[S]                            [C]               [C]              [C]
George H. Booth, II; 41;                            660              *
 Secretary, Tupelo                                   (0)
 Hardware Company (whole-
 sale and retail hardware)

Frank B. Brooks; 51;            1989              5,842              *
  farmer                                           (588)

Robert C. Leake; 62;            1973              8,748              *
 President, Leake &                              (3,657)          
 Goodlett, Inc. (building
 supplies and contractors)
 Chairman, Board of Directors
 of The Peoples Holding Company
 and The Peoples Bank and
 Trust Company

David P. Searcy; 70; cattle     1973              4,426              *
 farmer and retired busi-                        (2,061)
 nessman

J. Heywood Washburn; 64;        1982             10,662              *
 sales associate, TRI, Inc.,                    (10,834)
 (real estate agency) 

7

(1)  The Company was formed in 1982.  Dates stated for years prior
to 1982 indicate the first year of service as a director of The
Peoples Bank and Trust Company.  Persons who were serving as
directors of The Peoples Bank and Trust Company in 1982 also
became directors of the Company at that time.

(2)  Less than 1% ownership is marked with an asterisk (*).

(3)  Excludes 5,132 shares owned by his wife for which Mr.     
Weaver disclaims beneficial ownership.

   All of the directors and nominees for the terms listed above
presently serve on both the Board of Directors of the Company and
of The Peoples Bank and Trust Company.  All shares of the Bank are
owned by the Company.

             COMPENSATION, MEETINGS AND COMMITTEES OF
                      THE BOARD OF DIRECTORS

   Compensation of Directors.  Directors who are officers of the
Company receive no additional compensation for their service as
directors.  The Board of Directors fixes the compensation for
outside directors and currently, outside directors are paid a
monthly fee of $200.00 plus an additional monthly fee of $200.00
for each regular board meeting they attend.  Directors are also
paid an additional fee of $200.00 for each committee meeting or
special called board meeting which they attend.  The Chairman of
the Board is paid $1,666.67 per month plus a fee of $200.00 for
each committee meeting which he attends.

   Meetings and Attendance.  The Board of Directors of the Company
met eight times during 1994. No director attended less than 75% of
the aggregate of the total number of meetings held by the Board of
Directors and the total number of meetings held by all committees
of the board on which they served.  The Board of Directors of the
Bank met thirteen times during 1994.
 
   Executive Committee. The Executive Committee has charge over
all matters under the direction and control of the Board of
Directors which may require attention between regular meetings of
the Board of Directors.  The members of the Executive Committee
are Robert C. Leake, Chairman, Dr. Walter L. Bourland, A. M.
Edwards, Jr., David P. Searcy, John W. Smith and Jimmy S. Threldk-
eld.  The committee met fourteen times during 1994 with no member
attending less than 75% of the meetings.  

8

   The Board of Directors of the Company performs the functions of
the Compensation Committee, the Personnel Committee and the Nomi-
nating Committee.  Mr. Smith does not attend or participate in
board meetings when executive salaries and other executive bene-
fits are discussed and approved.  The members of the board that
make up the Compensation Committee and the Personnel Committee
are:  William M. Beasley, George H. Booth, II, Frank B. Brooks,
Dr. Walter L. Bourland, A. M. Edwards, Jr., Eugene B. Gifford,
Jr., Robert C. Leake, David P. Searcy, John W. Smith, Jimmy S.
Threldkeld, Leonard W. Walden, J. Heywood Washburn, Robert H.
Weaver and J. Larry Young.

   Compensation Committee Interlocks and Insider Participation. 
John W. Smith serves on the board which acts as the Compensation
Committee.  He does not attend or participate in any board meet-
ings when executive salaries or other executive benefits are
discussed and approved.

   Audit Committee. The Audit Committee of the Board of Directors
of the Bank also functions as the Audit Committee of the Company
and is composed of the following directors:  William M. Beasley,
Chairman, Dr. Walter L. Bourland, A. M. Edwards, Jr., Jimmy S.
Threldkeld and Leonard W. Walden.  The Audit Committee is an
independent committee made up entirely of outside directors who
are independent of management of the Company.  The Audit Committee
meets with the internal auditors and with the independent public
accountant and reports regularly to the Board of Directors.  The
Audit Committee met eleven times during 1994.

               PROPOSED AMENDMENT TO ARTICLES OF
                   INCORPORATION INCREASING
             NUMBER OF AUTHORIZED SHARES OF STOCK

          The Board of Directors has proposed an amendment to the
Articles of Incorporation, as previously amended, and directed
that the amendment be submitted to the shareholders for approval. 
The amendment would increase the number of authorized shares of
common stock from 4,200,000 to 7,500,000.

          Full text of the proposed resolution and amendment is as
follows:

          RESOLVED, that Article Fourth of the Articles of Incor-
          poration of The Peoples Holding Company, as previously
          amended, be amended to read as follows:

9

          FOURTH:  The aggregate number of shares which the corpo-
          ration shall have authority to issue is Seven Million
          Five Hundred Thousand (7,500,000) shares of common
          stock, all of one class, having a par value of Five
          Dollars ($5.00) each.

          Of the 4,200,000 authorized shares of common stock,
2,604,760 shares are presently issued and outstanding.  The Board
of Directors believes that the proposed increase in the number of
authorized shares of common stock will benefit the Company by
improving its flexibility and responding to future business needs
and opportunities.  The additional authorized shares will be
available for issuance from time to time in connection with
further stock splits in the form of stock dividends, financings,
acquisitions and for other corporate purposes which the Board of
Directors may deem advisable.  The Board of Directors has no
present intention of addition acquisitions or additional stock
dividends.

          The common stock of the Company was split three-for- one
in 1987, and there have been subsequent stock dividends of four
percent in the years 1990, 1991 and 1994.  206,025 shares of stock
were issued in connection with the Lakes Capital Corporation (Bank
of Water Valley) merger in 1987, and 91,226 shares were issued in
connection with the merger with New South Capital Corporation (New
South Bank) in 1994.  

          If the amendment is approved, the increased number of
authorized shares of common stock, as well as the presently autho-
rized but unissued shares of common stock, might be utilized in a
transaction which could have the effect of delaying or preventing
a change of control of the Company, which some or a majority of
the stockholders may consider desirable.  Such stock could be
issued to third parties to discourage a takeover attempt or to
dilute the ownership interest of a substantial stockholder who
opposes board policies. 

          The Articles of Incorporation contain certain provisions
which might have the effect of delaying or preventing a change in
control of the Company, such as a classified board of directors
and approval by not less than eighty percent of the outstanding
shares of certain transactions involving a shareholder owning or
controlling twenty percent or more of the voting stock of the
Company.  The Board of Directors does not presently intend to
propose other changes to the Articles of Incorporation which might
be construed to have the effect of discouraging takeover attempts,
and neither is the Board aware of any present effort or threat to
obtain control of the Company.  
          The Board of Directors unanimously recommends that you
vote FOR this proposal.  
10

                        EXECUTIVE OFFICERS

   All executive officers of the Company are elected by the Board
of Directors and hold office for a term of one year and thereafter
until their successors are elected and qualified.  The following
information with respect to executive officers of the Company is
provided: 

[CAPTION]

NAME                  AGE    POSITION HELD AND YEAR FIRST ELECTED
[S]                   [C]    [C]
John W. Smith         59     Director and Executive Vice President
                             of the Company from July, 1983, until
                             July, 1993, and Director and President    
                             since July, 1993.
                             Director and Executive Vice President
                             of the Bank from 1978 and 1976, res-      
                             pectively, until July 1993, and Direc-    
                             tor and President since July, 1993.   

    The Administrative Committee of the Employee Stock Ownership Plan
is composed of three participants of the Plan, none of whom are in the
executive management of the Company.

[CAPTION]
                  SUMMARY COMPENSATION TABLE

                      ANNUAL COMPENSATION
NAME                                              OTHER     ALL   
AND                                               ANNUAL   OTHER
PRINCIPAL                                         COMPEN-  COMPEN-
POSITIONS               YEAR  SALARY(1) BONUS(1)  SATION   SATION 
[S]                     [C]   [C]       [C]       [C]      [C]        
John W. Smith           1994  $180,000  $10,588      (2)       (3)
President and           1993  $164,711  $13,114      (2)       (3)
CEO since               1992  $150,576      0        (2)       (3)
July, 1993

All Policy              1994  $334,197  $10,588                (3)
Making Officers         1993  $415,719  $18,532                (3)
and Directors           1992  $488,625     0                   (3)
as a Group (14)         

11

Compensation for the executive officers was set based on the evaluation
of the salary records of the peer group of bank holding companies in
the state and in the region and on the performance of the Company.  

   (1)  Salary and bonus forms of compensation are composed of
salary and directors' fees paid currently and salary and directors'
fees the payment of which was deferred under either the Directors'
Deferred Fee Plan or the Executive Deferred Compensation Plan.    

   (2)  No disclosure is necessary of the aggregate amount of
personal benefits if less than the lesser of $50,000.00 or 10% of
the cash compensation disclosed in the cash compensation table.
Officers and employees use their personal automobiles for bank
business and are reimbursed at a rate of $.29 per mile.

   (3)  See pages 13-14, Directors' Deferred Fee Plan and Executive
Deferred Compensation Plan.

COMPENSATION COMMITTEE

   The Board of Directors of the Company performs the function of
the Compensation Committee.  Mr. Smith does not attend the board
meeting when the executive salaries and other executive benefits are
discussed and approved.  The members of the board that make up the
Compensation Committee are:  Robert C. Leake, Chairman, William M.
Beasley, George H. Booth, II, Frank B. Brooks, Dr. Walter L.
Bourland, A. M. Edwards, Jr., Eugene B. Gifford, Jr., David P.
Searcy, John W. Smith, Jimmy S. Threldkeld, Leonard W. Walden, J.
Heywood Washburn, Robert H. Weaver, and J. Larry Young.

EMPLOYEE STOCK OWNERSHIP PLAN (ESOP)

   The Bank adopted an Employee Stock Ownership Plan effective as of
January 1, 1981, and the Company adopted said plan effective as of
November 1, 1983.  The plan has subsequently been amended to comply
with all law changes.  This plan covers all employees who have
attained the age of twenty-one and have at least one year of
continuous service.  The non-officer directors of the Company do not
participate in the Plan.  The Bank set aside $400,000 in 1994 for
this Plan.  The amount set aside is used to purchase shares of the
Company stock and other stock which is held in trust for the
employees until retirement, death, or break in service.  The Plan
presently owns 153,146 shares of the common stock of the Company or
5.88% of the total outstanding shares.  These shares are voted by
the employees participating in the Plan.  Eligible employees
participate in the Plan based on their salary for the year. 
Benefits are distributed in the form of shares held for the
employee's account.
12

   At the beginning of 1994, the Plan held 135,325 shares of common
stock of the Company.  Between January 1, 1994, and December 31,
1994, 21,168 additional shares were purchased less 3,347 shares
distributed to retired and terminated participants, bringing the
total at the end of 1994 to 153,146 shares.  All Company stock
purchased for the Plan was either purchased on the open market or
from terminated ESOP participants.  John W. Smith participated in
the contribution to the Employee Stock Ownership Plan, and his share
of the contribution for 1994 was approximately $5,707.60.

PENSION PLAN

   The Pension Plan of the Bank has been adopted by the Company.
Listed in the table below are the Retirement Benefits estimated to
be paid to participants in the Company's Pension Plan at normal
retirement date, age 65.  The Non-Officer Directors of the Company
do not participate in the Plan.  The Plan allows early and delayed
retirement.  The Company elected to adopt Financial Accounting
Standards Board Statements of Financial Accounting Standards (FAS)
No. 87 and No. 88 in 1986.  The Pension expense since 1986 has been
computed under those statements, resulting in an expense of $323,640
in 1991, an expense of $486,925 in 1992, an expense of $592,811 in
1993, and an expense of $593,688 in 1994 under (FAS) No. 87 and an
expense of $159,294 under (FAS) No. 88 in 1992 due to a voluntary
Early Retirement Window.  No expense has resulted from (FAS) No. 88
in prior years.  The Company's funding policy is to contribute
annually an amount that falls within the minimum and maximum amount
determined by consulting actuaries in accordance with the Employee
Retirement Income Security Act of 1974.  The Company contribution to
the Plan for 1994 was $730,803.  Said evaluation is based on data
concerning all employees participating in the Plan as a group.  The
actuary does not compute and assign any part of a total contribution
as the current cost of retirement benefits for a specific employee.

13

   The table below shows the estimated maximum current benefits
payable under the Plan assuming retirement at age 65 of persons in
the specified remuneration and years of service classification.
[CAPTION]
                         ESTIMATED CURRENT ANNUAL PENSION
   FINAL AVERAGE         BENEFITS FOR REPRESENTATIVE YEARS
ANNUAL COMPENSATION      __________OF SERVICE____________ 
                           15          20              25
[S]                     [C]         [C]            [C]
     10,000              2,100       2,800           3,500
     20,000              4,200       5,600           7,000
     30,000              7,110       9,480          11,850
     40,000             10,110      13,480          16,850
     50,000             13,110      17,480          21,850
     60,000             16,110      21,480          26,850
     80,000             22,110      29,480          36,850
    100,000             28,110      37,480          46,850
    120,000             34,110      45,480          56,850
    140,000             40,110      53,480          66,850
    160,000             46,110      61,480          76,850
    180,000             52,110      69,480          86,850
    200,000             58,110      77,480          96,850
    220,000             64,110      85,480         104,055

Assumption--Age 65, no survivor annuity, straight life, 10 year
certain, annual Covered Compensation of 21,000.

   The estimated credited years of service and the compensation
covered by the Plan, where required, for each of the individuals
named in the Cash Compensation Table are as follows:  John Smith 29
($190,714.00).  (For Plan years beginning after December 31, 1993,
certain limitations on compensation will apply if still applicable
at the retirement of the participant.  Currently the maximum
compensation amount is $150,000.00.)

   John Smith has a three year employment contract with the Company. 
This employment contract shall not be effective unless there be a
final consummation of a takeover transaction which is not recommend-
ed by the affirmative vote of a majority of the Board of Directors. 
The annual compensation to be paid during the term of the contract
shall be the same amount as the officer's salary as of his final
date of employment immediately preceeding the effective date of the
employment contract, together with all Pension Plan, Employee Stock
Ownership Plan, Executive Deferred Compensation Plan and other
fringe benefits to which the officer is entitled. 

14

BENEFIT RESTORATION PLAN

   Effective May 1, 1991, The Peoples Bank and Trust Company
established a Benefit Restoration Plan.  Due to subsequent changes
in the federal tax laws governing the integration of social security
benefits into the pension plan formula, The Peoples Bank & Trust
Company again amended The Peoples Bank & Trust Company Pension Plan,
and on December 13, 1994, restated the Benefit Restoration Plan
effective January 1, 1994.  This plan is an unfunded non-qualified
deferred compensation plan maintained solely for the purpose of
restoring certain benefits for officers covered under The Peoples
Bank and Trust Company Pension Plan who experienced a decrease of
$50 or more in the present value of their pension benefits and had
a $100 or more decrease in the projected amount of their future
benefits resulting from an amendment to the Plan which revised the
plan's Social Security integration formula in order to comply with
recent IRS regulations.  The plan will pay the eligible employees a
benefit equal to the difference in what their benefit is under the
revised plan and what their benefit would have been under the plan
prior to its amendment.

   The normal retirement age under the Benefit Restoration Plan is
age 65 and the employee is eligible for early retirement upon
reaching the age of 55, provided the employee has 15 years of
service with the bank.  A death benefit equal to a 50% joint and
survivor annuity will be payable to the employee's spouse in the
event of his or her death.  During 1994 the bank contributed $45,179
to this plan.

INCENTIVE COMPENSATION PLAN

          The Board of Directors of the Bank adopted an Incentive
Compensation Plan to be effective January 1, 1988, and this plan was
subsequently revised and amended effective January 1, 1993. 
Incentive benefits will be paid to eligible officers and employees
after the end of each calendar year and shall be based upon
performance of the Bank during each such calendar year.  The funds
available for cash distribution under this plan shall be determined
(a) by setting aside one percent (1%) of the average assets of the
Bank after taxes, after allocation of annual contribution to
Employee Stock Ownership Plan and after incentive pay as determined
by this formula; (b) by subtracting from the annual net income of
the Bank prior to taxes, Employee Stock Ownership Plan contribution
and incentive pay computed under this plan, the amount determined to
be one percent (1%) of average assets after taxes, after Employee
Stock Ownership Plan contribution and after incentive pay as
determined by this formula; (c) by appropriating thirty percent
(30%) of any excess of net income over one percent (1%) of average
assets as computed above for distribution among eligible officers
and employees under this plan.
15

          Said funds as above computed and appropriated shall be
distributed among the eligible officers and employees of the Bank
according to the relationship that each individual's earnings has to
the total earnings of all eligible employees of the plan.  Provided,
however, that the president of the Bank shall not be eligible to
participate in this plan.  Provided, further, however, that any
officer or employee whose score on their latest annual personal
employee evaluation is not sufficient to merit an increase in salary
shall not be eligible for participation in this plan.  Payment shall
be made to all eligible bank officers and employees who were
officers or employees of the Bank on January 1 and have continued in
employment through December 31 of the year for which payments are
being made.  Provided, however, that prorata benefits will be paid
upon the earnings of any otherwise eligible officers or employees
separated from service during such year for which benefits are being
paid through death, retirement or long term disability.

          Prior service with a bank acquired by or merged into The
Peoples Bank and Trust Company shall not be treated as credible
service under this plan.

          During 1994, the bank contributed $147,522 to this plan.

EXECUTIVE INCENTIVE COMPENSATION PLAN

          The President of the Bank is covered under this plan which
is based upon a broader criteria of bank performance.  Compensation
is determined under a formula based upon the return on assets (ROA)
of the Company and the criticized assets (CA) of the Bank.

          Return on assets will be computed upon net profits after
taxes and payment of Executive Incentive Compensation and all other
bonuses payable to officers and employees.  

          Criticized assets will be a total of substandard loans,
doubtful loans, loss loans, other real estate, repossessed assets,
substandard securities and fifty percent of OAEM.  The percentage
ratio of the above total of criticized assets to year-end equity
plus loan loss reserves will then be determined.

16

          The scores from the calculations of return on assets and
criticized assets will be applied to the following plan formula:
[CAPTION]
     ROA      SCORE            CA                SCORE
[S]           [C]              [C]               [C]
     .99        0%             50%                 0%
    l.075      10%             47%                10%
    l.l50      20%             44%                20%
    l.225      30%             41%                30%
    l.300      40%             38%                40%
    l.375      50%             35%                50%
    l.450      60%             32%                60%
    l.525      70%             29%                70%
    l.600      80%             26%                80%
    l.675      90%             23%                90%
    l.750     l00%           0-20%               100%

Interpolation will be used to determine the score for ratios falling
between the parameters listed above.  The calculation will be made
using the above scores and the Incentive Compensation will be
awarded based on the equation as follows:  ROA Score x CA Score x
Base Salary=Executive's Incentive Compensation.

The Board of Directors approved the sum of $10,588 to fund the plan
for 1994.
No other remuneration payments are proposed in the future to
officers directly or indirectly pursuant to any existing plan or
arrangement.  

17

DIRECTORS' DEFERRED FEE PLAN AND
EXECUTIVE DEFERRED COMPENSATION PLAN

   (3)  On November 12, 1985, the Board of Directors adopted the
Directors' Deferred Fee Plan and the Executive Deferred Compensation
Plan, hereinafter referred to as Part A, and effective January 1,
1989, eligible directors and employees were given the opportunity to
defer additional compensation under Part B of these Plans.  Under
the terms of the Plans, non-employee directors and eligible
employees may elect to defer, respectively, up to 100% of directors'
fees and retainers and up to 10% of salary, as approved from time to
time by the Administrative Committee of the Plans.  Amounts deferred
under Part A of the Plans accrue interest annually at 130% of the
Moody's Average Corporate Bond Rate for the month of October
preceding December 31 of each preceding year, and amounts deferred
under Part B of the Plans accrue interest annually at the Moody's
Average Corporate Bond Rate for the month of October preceding
December 31 of each preceding year.  If a Participant remains an
employee or director until his or her normal retirement date and
shall then retire, the Company is obligated to pay to the Partici-
pant an amount equal to the amount originally deferred under Part A
as annually compounded by 130% of the Moody's Average Corporate Bond
Rate and at the Moody's Average Corporate Bond Rate for the amount
originally deferred under Part B until the Participant's normal
retirement date. That result will then continue to be annually
compounded by the appropriate percentage (130% in the case of Part
A and 100% in the case of Part B) of the Moody's Average Corporate
Bond Rate being used at the time of normal retirement until the time
the total retirement benefit, which will generally be paid monthly
over a 15 year period, is completed.  If a Participant terminates
his or her employment prior to normal retirement, he or she will
receive a termination benefit upon the earlier of (i) the Parti-
cipant's death or (ii) attainment of his or her early retirement
date or (iii) at the time said Participant ceases his or her
employment if such date is later than his or her early retirement
date.  This benefit shall be determined by improving the Parti-
cipant's deferrals under Part A by the Moody's Average Corporate
Bond Rate and under Part B by 75% of the Moody's Average Corporate
Bond Rate, each as compounded on an annual basis if said Participant
has been an employee or a director for less than ten years or if
employment is discontinued for cause and by 130% and 100%, respec-
tively, of the Moody's Average Corporate Bond Rate as compounded on
an annual basis if said Participant has been an employee or director
for ten or more years with such amount being computed from the date
of entry to the termination date of the Participant.  This benefit
will normally be paid monthly over a fifteen year period.

18

   If a Participant shall die after he or she begins receiving a
benefit but before receiving 180 installments of his or her benefit,
the amount will be continued to the Participant's beneficiary until
the balance of 180 monthly payments have been made.  If a Partici-
pant dies prior to the time he or she begins receiving a benefit,
his or her beneficiary is entitled to the higher of the Pre-
Retirement Death Benefit or the Participant's Accrued Benefit under
the Plan.  This benefit will normally be paid monthly over a fifteen
year period.

   The Plans are administered by an Administrative Committee which
is appointed by the Board, and the Committee has the authority to
amend the Plans or extend them for additional years, subject to the
right of the Board to terminate the Plans.  The committee has
approved deferrals under the Plans for 1994 at the rates provided
for under the terms of the Plans.  The Plans are unfunded, and it is
anticipated that they will result in no cost to the Company over the
term of the Plans because life insurance policies on the lives of
the Participants have been purchased in amounts estimated to be
sufficient to pay benefits under the Plans.  The Company is both the
owner and beneficiary of all the insurance policies.  On December
31, 1994, there were eight directors and twenty officers participat-
ing in Part A of the Plan and eleven directors and thirty-six
officers participating in Part B of the Plans.  During 1994,
$4,044.60 was paid from the Directors' Deferred B Plan as widows'
benefits of deceased directors and $5,898.00 was paid in benefits to
retired directors.  In addition $10,484.64 was paid in benefits to
retired non-executive officers, and $38,076.00 was paid to the widow
of a deceased non-executive officer.  Amounts deferred during 1994
by the individuals in the groups specified in the cash compensation
table are included in the totals disclosed in the table.  Amounts
accrued during 1994, including deferrals, were as follows:  Mr.
Smith, $3,048.00 in Part A and $1,831.45  in Part B; all executives
and directors, including retired executives and directors as a
group, $75,454.26 in Part A and $205,997.00 in Part B.

19

                         PERFORMANCE TABLE
                       
                                Fiscal year ending       
                    ---------------------------------------------- 
Company              1989    1990    1991    1992    1993    1994
                    ----------------------------------------------
The Peoples
Holding Company      $100   $97.72  $98.98  $142.05 $173.02 $191.13

Industry Index        100    88.18  144.25   149.62  158.14  158.80

Broad Market          100    81.12  104.14   105.16  126.14  132.44 

Peer Group            100    90.47  122.93   168.44  210.71  215.54

This chart sets forth the cumulative total shareholder return
(assuming reinvestment of dividends) to The Peoples Holding
Company's shareholders during the five year period ended December
31, 1994, as well as the NASDAQ market index, an industry group of
35 East South Central Banks and a peer group of Mississippi bank
holding companies.  The peer group used was:  Hancock Holding
Company, NBC Capital Corporation, First National Financial Corpora-
tion and First M & F Corporation for 1990 thru 1993.  First National
Financial Corporation merged into a much larger bank in 1994 and
their individual performance was not available and was not used in
1994.  The weighted market capitalization rate for each holding
company was used in compiling the peer group index.  The Company
will use the East South Central Banks as the Industry Index in the
future.  The Company feels that a peer group of only three bank
holding companies is not large enough to give a true representation
of the comparison performance.

Note to chart above:  Assume $100 invested on January 1, 1990, in
The Peoples Holding Company stock, and an identical amount in the
NASDAQ market index - The peer group of bank holding companies - The
East South Central Banks Industry Index.

There can be no assurance that the Company's stock performance will
continue into the future with the same or similar trends depicted in
the graph above.  The Company will not make nor endorse any
predictions as to future stock performance.

20

                 TRANSACTIONS WITH MANAGEMENT

   The Bank has had in the past, and expects to have in the future,
banking transactions in the ordinary course of its business with
directors, officers, principal stockholders of the Company and their
associates, on the same terms, including interest rates and
collateral on loans, as those prevailing at the same time for
comparable transactions with others, and do not involve more than
normal risks of collectibility or present other unfavorable
features.  Other than these transactions, there were no material
transactions with this group during 1994.

                      SHAREHOLDERS' PROPOSALS

   Proposals of security holders intended to be presented at the
next meeting must be received by the Company for inclusion in the
Company's Proxy Statement and form of Proxy relating to that meeting
by December 9, 1995.

             RELATIONSHIP WITH INDEPENDENT ACCOUNTANTS

   The Board of Directors has selected the firm of Ernst & Young
LLP, Certified Public Accountants, as independent auditors of the
Company.  In this capacity the firm will audit the books and records
of The Peoples Holding Company and provide written certificates on
the financial statements of the Company.  The firm has served in
this capacity since the Company's formation. A representative of
this firm will attend the annual stockholders meeting and will be
available to respond to appropriate questions.  Ernst & Young
prepared the Federal and State Income Tax Returns for the years 1980
through 1993, which were approved by the Board of Directors.  Cost
of preparing the tax returns was included in the total bill and the
actual cost is not readily determinable. 

                  RELATIONSHIP WITH LEGAL COUNSEL

   The Company and its subsidiary have retained the law firm of
Mitchell, Voge, Beasley and Corban as general counsel.  W. P.
Mitchell is a partner in said law firm and is Chairman Emeritus of
the Board of Directors of the Bank.  William M. Beasley is also a
partner in said law firm.  The Company and its subsidiary paid this
firm fees and expenses totaling $141,748.88 during 1994.

   During 1994, the Bank retained the firm of Edwards, Storey,
Marshall and Helveston as local counsel for the branch bank at West
Point, Mississippi.  A. M. Edwards, Jr. is a partner in said law
firm.  During 1994 the bank retained the firm of Gifford and Allred
as local counsel for the branch bank at Booneville, Mississippi. 
Eugene B. Gifford, Jr. is a partner in that law firm. 

21

                       FINANCIAL STATEMENTS

   THE COMPANY WILL FURNISH, WITHOUT CHARGE, TO EACH STOCKHOLDER
REQUESTING SUCH A COPY OF ITS ANNUAL REPORT ON FORM 10-K, INCLUDING
THE FINANCIAL STATEMENTS AND THE SCHEDULES THEREOF REQUIRED TO BE
FILED WITH THE COMMISSION PURSUANT TO RULE 13 a-1 UNDER THE ACT FOR
THE COMPANY'S MOST RECENT FISCAL YEAR, TO A BENEFICIAL OWNER OF ITS
SECURITIES UPON RECEIPT OF A WRITTEN REQUEST FROM SUCH PERSON.  EACH
REQUEST MUST SET FORTH A GOOD FAITH REPRESENTATION THAT, AS OF THE
RECORD DATE FOR THE ANNUAL MEETING OF THE COMPANY'S SECURITY
HOLDERS, THE PERSON MAKING THE REQUEST WAS A BENEFICIAL OWNER OF
SECURITIES ENTITLED TO VOTE AT SUCH MEETING.  REQUEST FOR THE ABOVE
INFORMATION SHOULD BE DIRECTED TO:  THE PEOPLES HOLDING COMPANY, P.
O. BOX 709, TUPELO, MISSISSIPPI 38802, ATTENTION:  WAYNE CONWILL,
VICE PRESIDENT. 

                          OTHER BUSINESS

   Management at present knows of no other business to be brought
before the meeting.  If further business is properly brought before
the meeting or an adjournment thereof, it is the intention of
management to vote the accompanying proxies in accordance with
management's judgment.

BY ORDER OF THE BOARD OF DIRECTORS

                                   /S/ John W. Smith
                                  ___________________              
                                    Signature

22

APPENDIX A....  PROXY FORM

THE PEOPLES                                    PROXY
HOLDING COMPANY
P. O. Box 709                  THIS PROXY IS SOLICITED ON BEHALF OF
Tupelo, Mississippi 38802      THE BOARD OF DIRECTORS

                         The undersigned hereby appoints William M.          
                         Beasley, George H. Booth, II, Frank B. Brooks,
                         A. M. Edwards, Jr., and Eugene B. Gifford, Jr. as   
                         proxies, each with the power to appoint his or her  
                         substitute and hereby authorizes them to represent  
                         and to vote, as designated below, all the shares    
                         of common stock of The Peoples Holding Company      
                         held on record by the undersigned on March 17,      
                         1995, at the annual meeting of shareholders to be   
                         held on April 11, 1995, or any adjournment thereof. 
                       
(1)  Election of Directors.
     NOMINEES:

     FOR THREE-YEAR TERM ENDING IN 1998: Dr. Walter L. Bourland, John W.
Smith, Jimmy S. Threldkeld, Robert H. Weaver and J. Larry Young

    VOTE FOR all nominees listed               VOTE WITHHELD for all         
    (except as written to the                  nominees listed [_______]
     contrary below)   [_______]
(Instructions: To withhold authority to vote for any individual nominee,
write that nominee's name on the space provided below.)

(2)  To approve a proposal to amend the articles of incorporation to in-
crease to 7,500,000 the authorized shares of common stock of the Company.    
  FOR[____]  AGAINST[___]     ABSTAIN [__]

(3)  To ratify the appointment of Ernst & Young LLP of Memphis, Tennessee,
as auditors for the Company for the current year.
     FOR[___]   AGAINST[___]     ABSTAIN[___]

(4)  In their discretion, the Proxies are authorized to vote such other     
business as may properly come before the meeting.

THIS PROXY WHEN PROPERLY EXECUTED WILL BE VOTED IN THE MANNER DIRECTED
HEREIN BY THE UNDERSIGNED STOCKHOLDER.  IF NO DIRECTION IS MADE, THIS PROXY
WILL BE VOTED FOR PROPOSALS 1, 2 and 3.

23

Please sign below exactly as name appears on back of proxy card.  When
shares are held by joint tenants, both should sign.  If a corporation,
please sign in full corporate name by President or other authorized officer. 
If a partnership, please sign in partnership name by authorized person.

Dated ____________________, 1995    __________________________________
                                       Signature
                                                                             
                                    __________________________________
                                       Signature if held jointly

PLEASE MARK, SIGN, DATE AND RETURN THIS PROXY CARD PROMPTLY USING THE
ENCLOSED ENVELOPE.

24