SCHEDULE TO

          TENDER OFFER STATEMENT UNDER SECTION 14(d)(1) or 13(e)(1) OF
                       THE SECURITIES EXCHANGE ACT OF 1934

                           The Peoples Holding Company
                       (Name of Subject Company (Issuer))

                           The Peoples Holding Company
                       (Name of Filing Person, the Issuer)

                          COMMON STOCK, $5.00 PAR VALUE
                         (Title of Class of Securities)

                                   711148 10 6
                      (CUSIP Number of Class of Securities)

                               E. Robinson McGraw,
                      President and Chief Executive Officer
                           The Peoples Holding Company
                                 209 Troy Street
                            Tupelo, Mississippi 38804
                                 (662) 680-1001
           (Name, address and telephone number of person authorized to
         receive notices and communications on behalf of filing persons)

                                 with a copy to:
                               W.P. Mitchell, Esq.
                     Mitchell, Voge, Corban and Morris, LLP
                                   P.O. Box 29
                             108 N. Broadway Street
                            Tupelo, Mississippi 38804
                                 (662) 842-4231

                            CALCULATION OF FILING FEE

         Transaction valuation*             Amount of filing fee:
              $13,899,176                        $2,779.84

*Calculated  solely for purposes of  determining  the filing fee, in  accordance
with Rule 0-11 of the Securities  Exchange Act of 1934. This calculation assumes
the purchase of 604,312 shares of Common Stock of The Peoples Holding Company at
the maximum tender offer purchase price of $23.00 per share in cash.

[   ]  Check the box if any part of the fee is offset  as  provided  by Rule 011
       Rule 011(a)(2) and identify the filing with which the offsetting  fee was
       previously  paid.  Identify the previous filing by registration statement
       number or the Form or Schedule and the date of its filing.

       Amount Previously Paid: N/A        Form or Registration Number: N/A
       Filing Party: N/A                  Date Filed: N/A

[   ]  Check the box if the filing relates solely to preliminary  communications
       made before the commencement of a tender offer.

Check the  appropriate  boxes below to designate any  transactions  to which the
statement relates:

[   ]  third party tender offer subject to Rule 14d-1.
[ X ]  issuer tender offer subject to Rule 13e-4.
[   ]  going private transaction subject to Rule 13e-3.
[   ]  amendment to Schedule 13D under Rule 13d-2.

Check the following box if the filing is a final amendment reporting the results
of a tender offer: [ ]

This Tender Offer Statement on Schedule TO relates to the issuer tender offer of
The  Peoples  Holding  Company,  a  Mississippi  corporation,  to purchase up to
604,312  shares of its  Common  Stock,  $5.00 par value per share.  The  Peoples
Holding  Company is offering to purchase these shares at a price of $23.00,  net
to the  seller in cash,  without  interest,  upon the terms and  subject  to the
conditions set forth in the Offer to Purchase,  dated April 16, 2001 (the "Offer
to Purchase"),  and in the related Letter of  Transmittal,  which, as amended or
supplemented  from time to time,  together  constitute  the tender  offer.  This
Tender  Offer  Statement  on Schedule  TO is  intended to satisfy the  reporting
requirements  of Rule  13e-4(c)(1)  of the  Securities  Exchange Act of 1934, as
amended.

The information in the Offer to Purchase is hereby  incorporated by reference in
response to all the items of this Schedule TO.

Item 1.  SUMMARY TERM SHEET.

The information  under the heading "Summary Term Sheet" in the Offer to Purchase
is incorporated herein by reference.

Item 2.  SUBJECT COMPANY INFORMATION.

The name of the subject company is The Peoples Holding Company.  The address and
telephone  number of its  principal  executive  offices  are:  209 Troy  Street,
Tupelo, Mississippi, 38804; (662)680-1001.

The subject securities are Common Stock, $5.00 par value, of The Peoples Holding
Company. The number of shares of the subject securities  outstanding as of April
9, 2001, is 6,043,124.

Information  about the trading market and price of the subject  securities under
"Section 8.  Share,  Trading  Price and  Dividend  Information"  of the Offer to
Purchase is incorporated herein by reference.

Item 3.  IDENTITY AND BACKGROUND OF FILING PERSON.

The filing person is the subject company.

Item 4.  TERMS OF THE TRANSACTION.

(a) Information  about the terms of the transaction  under "Section 1. Number of
Shares; Priority of Purchases;  Odd Lots; Proration," "Section 2. Purpose of the
Offer;  Certain  Effects of the Offer,"  "Section  3.  Procedure  for  Tendering
Shares,"  "Section 4.  Purchase of Shares and  Payment of the  Purchase  Price,"
"Section  5.  Conditional  Tender of  Shares,"  "Section  6.Withdrawal  Rights,"
"Section 7. Material  Federal Income Tax  Consequences,"  "Section 11. Effect of
Offer on  Market  for  Shares;  Registration  under the 1934  Act,"  "Section13.
Certain  Conditions  of  this  Offer,"  "Section  14.  Cancellation,  Extension,
Termination  and  Amendment,"  "Section 15. Fees and Expenses," and "Section 16.
Source and Amount of Funds" of the Offer to Purchase is  incorporated  herein by
reference.  There will be no  material  differences  in the  rights of  security
holders as a result of this transaction.

(b) The subject company will purchase shares of the subject  securities  validly
tendered and not withdrawn by its shareholders,  including  shareholders who may
be officers,  directors or affiliates of the subject  company,  on the terms and
subject to the  conditions  contained  in the Offer to Purchase  and the related
Letter of  Transmittal.  The subject company has been advised that its officers,
directors and  controlling  shareholders do not intend to tender shares pursuant
to the  Offer to  Purchase  and  therefore  no  securities  are  expected  to be
purchased from them in the transaction.

Item 5.  PAST CONTRACTS, TRANSACTIONS, NEGOTIATIONS AND AGREEMENTS.

The subject company is not aware of any agreement,  arrangement or understanding
(whether  or not  legally  enforceable)  between  the  subject  company  (or any
director,  executive officer or controlling  shareholder of the subject company)
and any  other  person  with  respect  to  securities  of the  subject  company.
Information under "Section 9. Information About Us" and "Section 10. Information
about our Directors,  Executive  Officers and Controlling  Shareholders"  of the
Offer to Purchase is incorporated herein by reference.

Item 6.  PURPOSES OF THE TRANSACTION AND PLANS OR PROPOSALS.

The information about the purpose of the transaction under"Section 2. Purpose of
the Offer; Certain Effects of the Offer" is incorporated herein by reference.

The information about plans or proposals under "Section 9. Information About Us"
is incorporated herein by reference.

Item 7.  SOURCE AND AMOUNT OF FUNDS OR OTHER CONSIDERATION.

The  information  under "Section 16. Source and Amount of Funds" of the Offer to
Purchase is incorporated herein by reference.  None of the funds are expected to
be borrowed.

Item 8.  INTEREST IN SECURITIES OF THE SUBJECT COMPANY.

The information under "Section 10.  Information  about our Directors,  Executive
Officers  and   Controlling   Shareholders"   and  under   "Section  17.  Recent
Transactions in Our Shares" of the Offer to Purchase is  incorporated  herein by
reference.

Item 9.  PERSONS/ASSETS, RETAINED, EMPLOYED, COMPENSATED OR USED.

The  information  under  "Section  15.  Fees  and  Expenses"  and  "Section  18.
Miscellaneous" of the Offer to Purchase is incorporated herein by reference.

Item 10.  FINANCIAL STATEMENTS.

The consideration in the Offer consists solely of cash. The Offer is not subject
to any financing  condition and the Offeror is a public reporting  company under
Section  13(a) or 15(d) of the Act that files reports  electronically  on EDGAR.
Historical  financial  statements  for the year ended December 31, 2000 as filed
with the Securities  and Exchange  Commission on Form 10-K are  incorporated  by
reference herein. The information under "Section 9. Information About Us" of the
Offer to  Purchase  is also  incorporated  herein  by  reference  as to how such
documents can be obtained.

Item 11.  ADDITIONAL INFORMATION.

The information under "Section 10.  Information  about our Directors,  Executive
Officers and Controlling  Shareholders"  and "Section 12. Certain Legal Matters"
of the Offer to Purchase is incorporated herein by reference.

         (a)(1)   Not Applicable.
         (a)(2)   None.
         (a)(3)   Not applicable.
         (a)(4)   Not applicable.
         (a)(5)   None.
         (b)      None.

Item 12.  EXHIBITS.

         The following exhibits are submitted herewith:

         (a):   (a)(1) Offer to Purchase dated April 16, 2001
                (a)(2) Letter of Transmittal
                (a)(3) Form of Guidelines for Substitute Form W9
                (a)(4) Notice of Guaranteed Delivery
                (a)(5) Form of letter to brokers, dealers, commercial banks,
                       trust companies and other nominees
                (a)(6) Form of letter to be used by brokers, dealers,
                       commercial banks, trust companies and other nominees
                       to their clients
                (a)(7) Form of letter to shareholders dated April 16, 2001 from
                       the President and Chief Executive Officer of Peoples
                (a)(8) Press Release
         (b) -(h) None or not applicable
         (i)      Consent of Independent Auditors

Item 13.  INFORMATION REQUIRED BY SCHEDULE 13E-3.
         Not applicable.

                                    Signature

After due inquiry and to the best of my knowledge and belief, I certify that the
information set forth in this statement is true, complete and correct.

Date: April 16, 2001

                                           The Peoples Holding Company

                                       by:  /s/ E. Robinson McGraw
                                            --------------------------
                                                E. Robinson McGraw
                                       President and Chief Executive Officer

                                OFFER TO PURCHASE

                           THE PEOPLES HOLDING COMPANY

OFFER TO PURCHASE  FOR CASH UP TO 604,312  SHARES OF COMMON STOCK OF THE PEOPLES
HOLDING COMPANY AT A PURCHASE PRICE OF $23.00.

THE PRORATION PERIOD AND YOUR RIGHT TO WITHDRAW SHARES YOU TENDER WILL EXPIRE AT
5:00 P.M., NEW YORK CITY TIME, ON MAY 15, 2001, UNLESS THE OFFER IS EXTENDED. WE
MAY EXTEND THE OFFER PERIOD AT ANY TIME.

The Peoples  Holding  Company  invites you to tender your shares of Common Stock
for purchase by the Company on the terms and  conditions set forth in this offer
to purchase and the letter of transmittal and other accompanying  documents.  We
are offering:

o    to purchase up to 604,312  shares of our Common  Stock in this tender offer
     at a price  of  $23.00  per  share,  net to the  seller  in  cash,  without
     interest;

o    if the number of shares tendered is less than 604,312, we will purchase all
     of the shares tendered, and

o    if the number of shares  tendered is more than  604,312,  we will  purchase
     shares

o    first  from  holders  of less than 100  shares  who  tendered  all of their
     shares, and

o    then, on a pro rata basis from all other shareholders who tendered shares.

If you want to tender your shares in our offer, you should:

o    specify the number of shares you want to tender, and

o    follow  the  instructions  in  this  document  and the  related  documents,
     including the accompanying letter of transmittal, to submit your shares.

Our offer is not conditioned on any minimum number of shares being tendered. Our
offer is, however, subject to certain other conditions,  as discussed in Section
13.

We reserve the right to  increase  the number of shares we purchase by an amount
which does not  exceed 2% of the  outstanding  shares of our Common  Stock as of
April 9, 2001.

Our board of directors  has  approved  this offer.  However,  neither we nor our
board of directors,  nor the information  agent makes any  recommendation to any
shareholder as to whether you should tender or not tender your shares.  You must
make your own decision whether to tender your shares and, if so, how many shares
to tender.

This document contains or incorporates important information about our offer. We
urge you to read it in its entirety and refer to the information incorporated by
reference.

The date of this Offer to Purchase is April 16, 2001.

                              IMPORTANT PROCEDURES

If you  want  to  tender  all or part of  your  shares,  you  must do one of the
following before our offer expires:

o    if your shares are registered in the name of a broker,  dealer,  commercial
     bank,  trust  company or other  nominee,  contact  the nominee and have the
     nominee tender your shares for you,

o    if you hold certificates in your own name,  complete and sign the letter of
     transmittal  according to its  instructions,  and deliver it, together with
     any required signature guarantee,  the certificates for your shares and any
     other documents required by the letter of transmittal,  to The Peoples Bank
     and Trust Company, the depositary for this offer, or

o    if you are an institution  participating  in The Depository  Trust Company,
     which we call the "book-entry  transfer facility" in this document,  tender
     your shares according to the procedure for book-entry transfer described in
     Section 3.

If you want to tender your shares but:

o    your certificates for the shares are not immediately available or cannot be
     delivered to the depositary, or

o    you cannot comply with the procedure for book-entry transfer, or

o    your other required  documents cannot be delivered to the depositary before
     the expiration of our offer,

you can still  tender  your shares if you comply  with the  guaranteed  delivery
procedure described in Section 3.

TO TENDER YOUR SHARES YOU MUST CAREFULLY FOLLOW THE PROCEDURES DESCRIBED IN THIS
DOCUMENT,  THE  LETTER OF  TRANSMITTAL  AND THE OTHER  DOCUMENTS  RELATED TO OUR
OFFER.

If you have any  questions or need  assistance,  you should  contact The Peoples
Bank and Trust Company,  the  information  agent for our offer.  You may request
additional  copies of this document,  the letter of transmittal or the notice of
guaranteed  delivery  from the  information  agent.  The Peoples  Bank and Trust
Company may be reached at:

         The Peoples Bank and Trust Company
         P.O. Box 709
         Tupelo, MS 38802-0709
         1-800-492-0365

In any  jurisdiction in which the securities or blue sky laws require this offer
to be made by a licensed broker or dealer,  the offer is being made on Peoples's
behalf by Morgan Keegan & Company, Inc.

                               SUMMARY TERM SHEET

This summary  highlights the most material terms of our tender offer. You should
realize  that it does not  describe  all of the details of our offer to the same
extent that they are  described  in the body of this  document and the letter of
transmittal.  We urge you to read the entire  document and the related letter of
transmittal  because they contain the full details of our offer.  Where helpful,
we have included references to the sections in this document where you will find
a  more  complete  discussion  of the  item  referenced.  A  table  of  contents
immediately follows this summary.

WHO IS OFFERING TO PURCHASE MY        The Peoples Holding Company is offering to
SHARES?                               purchase  up  to  604,312  shares  of  our
                                      outstanding Common Stock.  SEE SECTION 1.

WHAT IS THE PURCHASE PRICE?           The purchase price for our offer is $23.00
                                      per share.

HOW AND WHEN WILL I BE PAID?          If your shares are purchased in our offer,
                                      you will be  paid  the  purchase price, in
                                      cash,  without  interest, as  soon  as  is
                                      practicable  after  the  expiration of the
                                      offer  period  and  the  acceptance of the
                                      shares for payment.  SEE SECTION 4.

HOW MANY SHARES WILL THE PEOPLES      We will purchase up  to  604,312 shares of
HOLDING COMPANY PURCHASE IN ALL?      our outstanding Common Stock in our offer,
                                      or  approximately  10%  of our outstanding
                                      Common  Stock.  We  reserve  the  right to
                                      purchase additional shares up to 2% of the
                                      outstanding   shares   of   Common  Stock,
                                      subject to applicable  legal requirements.
                                      Our  offer  is  not  conditioned   on  any
                                      minimum  number of  shares being tendered.

IF I TENDER MY SHARES, HOW MANY       All of  the  shares that you tender in our
OF MY SHARES WILL THE PEOPLES         offer may not be  purchased.  If more than
HOLDING COMPANY PURCHASE?             604,312  shares  are  tendered,   we  will
                                      purchase  shares  based  on  the following
                                      order of priority:

                                      o  First, we will purchase shares from all
                                         holders of "odd lots" of less than  100
                                         shares who properly tender all of their
                                         shares.

                                      o  Second, we  will  purchase  shares from
                                         all  other  shareholders  who  properly
                                         tender  shares, on  a  pro rata  basis,
                                         subject  to   the  conditional   tender
                                         provisions described in Section 5. As a
                                         result,  we  will  purchase  the   same
                                         percentage of shares tendered from each
                                         tendering  shareholder  in  this second
                                         category.    We   will  announce   this
                                         proration     percentage,   if   it  is
                                         necessary, after our offer expires.

                                      o  Finally,  if  necessary  to  permit  us
                                         to  purchase  604,312  shares,   shares
                                         conditionally  tendered (for  which the
                                         condition was not  initially satisfied)
                                         and not properly withdrawn prior to the
                                         expiration  date, we may purchase these
                                         conditionally tendered shares  selected
                                         by  random  lot  in   accordance   with
                                         Section 5.  To be eligible for purchase
                                         by random lot shareholders whose shares
                                         are  conditionally  tendered  must have
                                         tendered all of their shares.

                                      As  noted  above, we  may  also  choose to
                                      purchase   an   additional   2%   of   the
                                      outstanding   shares  of   Common   Stock,
                                      subject  to  applicable  legal rules.  SEE
                                      SECTION 14.

HOW WILL THE PEOPLES HOLDING          We would need a maximum of $13,899,176  to
COMPANY PAY FOR THE SHARES?           purchase  604,312  shares  at the price of
                                      $23.00.  In  addition,  we expect to incur
                                      fees and expenses  in connection with this
                                      offer of approximately $100,000. We intend
                                      to  fund  the   purchase  of  shares  with
                                      dividends  we   will   receive   from  our
                                      subsidiary,  The  Peoples  Bank and  Trust
                                      Company.

HOW LONG DO I HAVE TO TENDER MY       You may tender your shares until our offer
SHARES TO THE PEOPLES HOLDING         expires. The offer is scheduled  to expire
COMPANY?                              on  May 15, 2001, at  5:00 p.m.,  New York
                                      City time, but we  may choose to extend it
                                      at  any  time.  We  cannot  assure that we
                                      will extend our offer or, if we extend it,
                                      for  how  long  it will  be extended.  SEE
                                      SECTIONS 1 AND 14.

HOW WILL I BE NOTIFIED IF THE         If our offer  is extended,  we will make a
PEOPLES HOLDING COMPANY EXTENDS       public announcement before 9:00 a.m.,  New
THIS OFFER?                           York City time,  on the first business day
                                      after  the offer was  scheduled to expire.
                                      SEE SECTION 14.

WHAT ARE THE CONDITIONS TO THE        Our  obligation to accept and pay for your
PEOPLES HOLDING COMPANY'S OFFER?      tendered  shares  is  conditioned  on  the
                                      satisfaction  or  waiver of the conditions
                                      described  in Section 13.  In  addition to
                                      customary  conditions,  these   conditions
                                      include the following:

                                      (a). We will  not be obligated to purchase
                                           any  shares  if,  in  our  good faith
                                           reasonable  judgment, our purchase of
                                           shares in the offer
                                           o  would  result in our Common  Stock
                                              being  held  of  record  by  fewer
                                              than 300 persons, or
                                           o  would  result in our Common  Stock
                                              no  longer  being  quoted  on  the
                                              American Stock Exchange, or
                                           o  would   otherwise   constitute   a
                                              "going  private  transaction"  for
                                              purposes  of  Rule  13e-3  of  the
                                              Securities and Exchange Commission
                                              under the  Securities Exchange Act
                                              of 1934; or

                                      (b). We  will not be  required to  proceed
                                           with  the  offer if  we  experience a
                                           material   adverse   change  in   our
                                           business conditions or are prohibited
                                           from   doing  so   because  of  legal
                                           process,   or   if   a  third   party
                                           proposes, announces or makes a tender
                                           or  exchange  offer, merger, business
                                           combination    or    other    similar
                                           transaction involving us.

HOW DO I TENDER MY SHARES?            To tender your shares, you  must  complete
                                      one  of  the   actions   described   under
                                      "Important Procedures" on the inside front
                                      cover  of  this document  before the offer
                                      expires.   You   may   also  contact   the
                                      information  agent  or  your   broker  for
                                      assistance.  The  contact  information for
                                      the  information  agent   appears  on  the
                                      inside front cover and on the last page of
                                      this  document.   SEE  SECTION  3 and  the
                                      instructions to the letter of transmittal.

ONCE I HAVE TENDERED SHARES           If you tender your shares  and change your
"YES."  IN THE OFFER, CAN I           mind, you  may withdraw your shares at any
CHANGE MY MIND?                       time   before   our   offer   expires.  In
                                      addition, after our  offer  expires, if we
                                      have not  accepted for  payment the shares
                                      you  have tendered to us, you may withdraw
                                      your  shares  at  any  time after  May 25,
                                      2001. SEE SECTION 6.  To properly withdraw
                                      your shares, you  must  timely  deliver  a
                                      written  notice of your  withdrawal to the
                                      depositary  at  the  address  or facsimile
                                      number appearing on the  last page of this
                                      document.  Your  notice  must specify your
                                      name, address and  social security number,
                                      the number of shares to be withdrawn, and,
                                      if the certificates have been delivered or
                                      otherwise  identified,   the   certificate
                                      number(s) for  the  shares and the name of
                                      the  registered  holder(s) of  the shares.
                                      All signatures on the notice of withdrawal
                                      must  be   guaranteed   by   an   eligible
                                      guarantor institution if certificates have
                                      already  been delivered.  Some  additional
                                      requirements apply if the certificates for
                                      shares to be withdrawn have been delivered
                                      to the  depositary or  if your shares have
                                      been  tendered  under  the  procedure  for
                                      book-entry transfer set forth  in  SECTION
                                      3.  SEE SECTION 6.

WHAT DO THE PEOPLES HOLDING           Our  board of directors has approved  this
COMPANY AND ITS BOARD OF              offer.  However, neither we  nor our board
DIRECTORS THINK ABOUT THIS OFFER?     of directors nor  the information agent is
                                      making   any   recommendation    regarding
                                      whether  you should  tender or  not tender
                                      your  shares.   You must decide whether to
                                      tender  your shares.   You  should discuss
                                      whether  to  tender  your shares with your
                                      broker or other financial or  tax advisor.
                                      Directors, officers and  affiliates of The
                                      Peoples Holding Company  have indicated to
                                      us  that  they  do  not  intend to  tender
                                      shares pursuant to this offer.

WHAT IS A RECENT MARKET PRICE         Our Common Stock is traded on the American
OF THE PEOPLES HOLDING COMPANY        Stock Exchange under the symbol "PHC."  On
COMMON STOCK?                         April 9, 2001, a date close to the date of
                                      this  document,  the  last per share sales
                                      price  of  The   Peoples  Holding  Company
                                      Common Stock as  reported  on the American
                                      American  Stock  Exchange  was $18.50.  We
                                      urge  you  to obtain  more  current market
                                      quotations for your shares. SEE SECTION 8.

WILL I HAVE TO PAY BROKERAGE          If  you are a  registered  shareholder and
COMMISSIONS OR STOCK TRANSFER         tender   your   shares   directly  to  the
TAX IF I TENDER MY SHARES TO          depositary,  you  will not need to pay any
THE PEOPLES HOLDING COMPANY?          brokerage commissions.  If you hold shares
                                      through  a  broker or  bank,  however, you
                                      should  ask your  broker or bank to see if
                                      you  will  be charged a fee to tender your
                                      shares.  Except as  otherwise set forth in
                                      the letter of transmittal,  transfer taxes
                                      on the purchase of shares pursuant to this
                                      offer  will be paid by The Peoples Holding
                                      Company.  SEE SECTION 1.

WHAT ARE THE UNITED STATES            Generally,  you  will be subject to United
FEDERAL INCOME TAX CONSEQUENCES       States  Federal income  taxation  when you
IF I TENDER MY SHARES TO THE          receive cash  from  us in exchange for the
PEOPLES HOLDING COMPANY?              shares you tender.   The cash  you receive
                                      will be treated either as:

                                      o  a sale or exchange eligible for capital
                                         gains treatment; or

                                      o  a  dividend  subject to ordinary income
                                         tax.

                                      SEE SECTION 7.

WHAT ARE THE EXPECTED BENEFITS,       We  are  making  this  offer   because  we
POTENTIAL DISADVANTAGES, OF THE       believe  that, given  the  current  market
OFFER FOR SHAREHOLDERS?               price of the shares,  the  purchase of the
                                      shares of Common  Stock  on the  terms and
                                      conditions  outlined  in  this offer is an
                                      attractive   investment  for  The  Peoples
                                      Holding   Company.    This   offer   gives
                                      shareholders an opportunity to sell all or
                                      part of their  investment in our shares on
                                      potentially   more  favorable  terms  than
                                      would otherwise be available. Shareholders
                                      who choose not to tender their shares will
                                      realize a proportionate increase  in their
                                      relative  equity  interest in  The Peoples
                                      Holding Company and in our future earnings
                                      and assets.  Our purchase of shares in the
                                      offer  will  reduce  the "public float" in
                                      our Common Stock  (the  number  of  shares
                                      owned   by   outside   shareholders    and
                                      available  for  trading in  the securities
                                      markets). This could result in lower stock
                                      prices or reduced liquidity in the trading
                                      market for Common Stock in the future. SEE
                                      SECTIONS 2 AND 11.

WHOM DO I CONTACT IF I HAVE           You can contact our Information Agent, The
QUESTIONS ABOUT THE PEOPLES           Peoples   Bank   and   Trust  Company   at
HOLDING COMPANY'S OFFER?              1-800-492-0365  with  questions  regarding
                                      this offer.

                                TABLE OF CONTENTS

Forward Looking .....................................................    1

Number of Shares; Priority of Purchases; Odd Lots; Proration ........    2

Purpose of the Offer; Certain Effects of the Offer ..................    3

Procedure for Tendering Shares ......................................    5

Purchase of Shares and Payment of the Purchase Price ................    8

Conditional Tender of Shares ........................................    9

Withdrawal Rights ...................................................   10

Material Federal Income Tax Consequences ............................   10

Share, Trading Price and Dividend ...................................   13

Information About Us ................................................   13

Information about our Directors, Executive Officers and
     Controlling Shareholders .......................................   16

Effect of Offer on Market for Shares;
     Registration under the 1934 Act Effect On Market ...............   17

Certain Legal Matters General .......................................   18

Certain Conditions of this Offer ....................................   19

Cancellation, Extension, Termination and Amendment ..................   20

Fees and Expenses ...................................................   22

Source and Amount of Funds ..........................................   22

Recent Transactions in Our Shares ...................................   22

Miscellaneous .......................................................   23

As used in this document,  the terms  "Peoples," "The Peoples Holding  Company,"
"we,"  "our"  and "us"  refer to The  Peoples  Holding  Company,  a  Mississippi
corporation.

  1

                           Forward-Looking Statements

This  document  contains a number of  forward-looking  statements  regarding the
financial  condition,  results of operations and business of The Peoples Holding
Company.  These  statements  may be made  directly  in this  document  or may be
incorporated in this document by reference to other documents.  These statements
may also include  references to periods  following the  completion of our offer.
You can find many of these  statements by looking for words such as  "believes,"
"expects,"  "anticipates,"  "estimates,"  "intends,"  "plans," "may," "will" and
"potential"  and for similar  expressions.  Forward-looking  statements  involve
substantial risks and  uncertainties.  Some of the factors that may cause actual
results to differ  materially  from those  contemplated  by the  forward-looking
statements include, but are not limited to, the following possibilities:

     o    the timing and occurrence or non-occurrence  of events,  including the
          conditions to our offer,  may be subject to  circumstances  beyond our
          control;

     o    there  may  be  increases  in  competitive  pressure  among  financial
          institutions or from non-financial institutions;

     o    changes in the interest rate  environment may reduce interest  margins
          or may adversely affect mortgage banking operations;

     o    changes  in  deposit  flows,  loan  demand or real  estate  values may
          adversely affect our business;

     o    changes in accounting principles, policies or guidelines may cause our
          financial condition to be perceived differently;

     o    general economic  conditions,  either nationally or locally in some or
          areas  in  which  we do  business,  or  conditions  in the  securities
          markets, the banking industry or the mortgage banking industry, may be
          less favorable than we currently anticipate;

     o    legislation or regulatory changes may adversely affect our business;

     o    technological  changes  may be more  difficult  or  expensive  than we
          anticipate;

     o    success  or  consummation  of new  business  initiatives  may be  more
          difficult or expensive than we anticipate; or

     o    litigation  or  other  matters  before  regulatory  agencies,  whether
          currently  existing  or  commencing  in  the  future,  may  delay  the
          occurrence or non-occurrence of events longer than we anticipate.

All subsequent written and oral forward-looking  statements concerning our offer
or other matters addressed in this document and attributable to us or any person
acting on our behalf are  qualified by these  cautionary  statements.  We do not
undertake   any   obligation   to  release   publicly  any   revisions  to  such
forward-looking  statements to reflect events or circumstances after the date of
this document or to reflect the occurrence of unanticipated events.

  2
                       THE PEOPLES HOLDING COMPANY'S OFFER

SECTION 1.  NUMBER OF SHARES; PRIORITY OF PURCHASES; ODD LOTS; PRORATION

GENERAL.  On the terms and subject to the conditions of our offer,  as set forth
in this  document  and the related  letter of  transmittal,  we are  offering to
purchase up to 604,312 shares of our Common Stock for a purchase price of $23.00
per share, net to the seller in cash, without interest, the "Purchase Price."

The term "expiration date" means 5:00 p.m., New York City time, on May 15, 2001,
unless and until we, in our sole discretion, extend the period of time for which
our offer will remain open. If extended by us, the term "expiration  date" means
the latest time and date at which our offer, as extended,  expires.  SEE SECTION
14 for a  description  of our right to extend,  cancel,  terminate  or amend our
offer.

Shares  properly  tendered and not  withdrawn  will be purchased at the Purchase
Price upon the terms and subject to the  conditions of our offer,  including the
odd lot,  proration  and  conditional  tender  provisions  described  below.  In
accordance with the rules of the Securities and Exchange Commission, we may, and
we reserve the right to,  purchase in our offer an additional  amount of shares,
not to exceed 2% of our outstanding Common Stock,  without amending or extending
our offer. SEE SECTION 14.

All shares  tendered and not purchased  because of proration or the  conditional
tender procedures, will be returned to you at our expense as soon as practicable
following the expiration date.

Tendering  shareholders  will not be obligated to pay any charges or expenses of
The  Peoples  Bank  and  Trust  Company,  the  depositary  for  our  offer  (the
"depositary"),  or any brokerage commissions. Except as set forth in Instruction
6 of the  letter  of  transmittal,  transfer  taxes on the  purchase  of  shares
pursuant to this offer will be paid by The Peoples Holding Company.

This  document and the related  letter of  transmittal  will be mailed to record
holders of shares of our Common Stock and will be  furnished  to brokers,  banks
and similar  persons  whose names or the names of whose  nominees  appear on the
shareholder list or, if applicable, who are listed as participants in a clearing
agency's  security  position  listing for  subsequent  transmittal to beneficial
owners of our Common Stock.

PRIORITY  OF  PURCHASES.  Upon the terms and  subject to the  conditions  of our
offer,  if  604,312 or fewer  shares  are  properly  tendered  and not  properly
withdrawn, we will purchase all properly tendered shares at the Purchase Price.

Upon the terms and subject to the conditions of our offer,  if more than 604,312
shares are validly  tendered and not  withdrawn,  we will  purchase such validly
tendered shares in the following order of priority:

     o    First,  we will  purchase  shares  properly  tendered and not properly
          withdrawn from any "odd lot" holder (as defined below) who

          o    tenders all the shares owned  (beneficially  or of record) by the
               odd lot holder; and

          o    completes  the  section  entitled  "Odd  Lots" in the  letter  of
               transmittal  and,  if  applicable,  in the  notice of  guaranteed
               delivery; and

     o    Second,  after the purchase of all the shares properly tendered by odd
          lot holders, subject to the conditional tender provisions described in
          SECTION 5, we will  purchase  shares from all other  shareholders  who
          properly  tender  shares,   on  a  pro  rata  basis  with  appropriate
          adjustment to avoid fractional  shares.  As a result, we will purchase
          the same percentage of shares tendered from each tendering shareholder
          in this second category.  We will announce this proration  percentage,
          if it is necessary, after our offer expires.

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     o    Finally, if necessary to permit us to purchase 604,312 shares,  shares
          conditionally  tendered  (for which the  condition  was not  initially
          satisfied) and not properly  withdrawn  prior to the expiration  date,
          will, to the extent  feasible,  be selected for purchase by random lot
          in  accordance  with  Section 5. To be eligible for purchase by random
          lot  shareholders  whose shares are  conditionally  tendered must have
          tendered all of their shares.

ODD LOT HOLDERS.  For purposes of our offer, the term "odd lot holder" means any
person who owns, beneficially or of record, a total of fewer than 100 shares. As
set forth above,  shares of odd lot holders will be accepted for payment  before
proration, if any, of the purchase of other tendered shares. To qualify for this
preference,  an odd lot holder must tender all shares owned,  beneficially or of
record,  by the odd lot holder and must so indicate in the letter of transmittal
or, if applicable,  the notice of guaranteed  delivery.  This  preference is not
available to beneficial or record holders of a total of 100 or more shares, even
if these holders have separate accounts or certificates  representing fewer than
100 shares.

PRORATION.  If proration of tendered  shares is required,  we will determine the
final  proration  factor as promptly as practicable  after the expiration  date.
Proration for each  shareholder  tendering  shares,  other than odd lot holders,
will be based on the ratio of the number of shares tendered by such  shareholder
to the total number of shares tendered by all  shareholders  (other than odd lot
holders),  subject to the conditional tender provisions  described in SECTION 5.
This ratio will be applied to  shareholders  tendering  shares to determine  the
number of shares  (rounded up to the nearest whole share) that will be purchased
from each such shareholder pursuant to our offer.

Because of the potential difficulty in determining the number of shares properly
tendered and not properly  withdrawn,  including  shares  tendered by guaranteed
delivery  procedures  as  described  in  Section  3, and  because of the odd lot
procedures  described above and the conditional  tender procedures  described in
SECTION 5, we do not expect that we will be able to announce the final proration
percentage or commence  payment for any shares  purchased  under our offer until
seven to ten business days after the expiration date. The preliminary results of
any proration  will be announced by press release as soon as  practicable  after
the expiration date.  Shareholders may obtain preliminary  proration information
from the information agent and may be able to obtain this information from their
brokers.

As  described  in SECTION 7, the number of shares that we will  purchase  from a
shareholder  under our offer may  affect the United  States  federal  income tax
consequences  to  that  shareholder  and,  therefore,   may  be  relevant  to  a
shareholder's   decision  whether  or  not  to  tender  shares.  The  letter  of
transmittal  affords each  shareholder the opportunity to designate the order of
priority in which shares are to be purchased in the event of proration, should a
shareholder  decide  to do so for  federal  income  tax  reasons.  In  addition,
shareholders  may choose to submit a  "conditional  tender" under the procedures
discussed in Section 5 in order to structure their tender for federal income tax
reasons.

SECTION 2.  PURPOSE OF THE OFFER; CERTAIN EFFECTS OF THE OFFER

From April 17, 1999 to April 9, 2001, we have repurchased  approximately 259,760
shares of our Common Stock in privately negotiated and open market transactions.
On March 20, 2001 our board of directors approved this offer.

  4

PURPOSE OF THE OFFER.  We are making this offer  because our board of  directors
believes that,  given our business,  assets and prospects and the current market
price of the  shares,  the  purchase  of the shares  pursuant to the offer is an
attractive  investment  for The  Peoples  Holding  Company.  We have  sufficient
resources,  in available cash and dividends we will receive from our subsidiary,
The Peoples Bank & Trust Company, to fund the amount required to purchase shares
under the offer and pay related expenses.

In addition,  we believe the offer may be attractive from the perspective of our
shareholders:

     o    The offer provides shareholders who are considering a sale of all or a
          portion of their shares the  opportunity to sell their shares pursuant
          to the offer for cash without the usual  transaction  costs associated
          with market sales.

     o    Any odd lot holders whose shares are  purchased  pursuant to the offer
          not only will avoid the  payment of  brokerage  commissions  for their
          sale of shares directly to The Peoples Holding Company,  but also will
          avoid any applicable odd lot discounts payable on sales of odd lots.

     o    The offer also may give  shareholders  the  opportunity  to sell their
          shares at the Purchase  Price that may be greater  than market  prices
          prevailing immediately prior to the announcement of the offer.

     o    To the  extent  the  purchase  of  shares in the  offer  results  in a
          reduction in the number of shareholders of record, the costs to us for
          services to shareholders will be reduced.

     o    This offer allows shareholders to sell a portion of their shares while
          retaining a continuing equity interest in The Peoples Holding Company.
          Shareholders who determine not to accept the offer will increase their
          proportionate  interest in The Peoples Holding Company's  equity,  and
          thus in The Peoples  Holding  Company's  future  earnings  and assets,
          subject to The Peoples  Holding  Company's  right to issue  additional
          shares and other equity securities in the future.

The offer also presents some potential  risks and  disadvantages  to The Peoples
Holding Company and our continuing shareholders.

     o    The  offer  will  result  in a  decrease  in the  amount  of cash  and
          investments  held  by The  Peoples  Holding  Company.  However,  after
          completion of the offer, we will continue to maintain adequate capital
          in line with government regulations for a "well capitalized" financial
          institution. SEE SECTION 9.

     o    The offer will reduce the "public  float" (the number of shares  owned
          by outside  shareholders  and available for trading in the  securities
          markets).  This may result in lower stock prices or reduced  liquidity
          in the trading market for Common Stock in the future.

We may in the future purchase  additional  shares on the open market, in private
transactions, through tender offers or otherwise, subject to the approval of our
board of directors.  Future purchases by us may be on the same terms or on terms
that are more or less favorable to the shareholders than the terms of our offer.
Rule 13e-4  promulgated  under the 1934 Act prohibits us and our affiliates from
purchasing  any shares,  other than  pursuant  to our offer,  until at least ten
business days after the  expiration  date. Any possible  future  purchases by us
will depend on many factors,  including market price of the shares,  the results
of our offer,  our business  and  financial  position  and general  economic and
market conditions.

  5

Shareholders  who  do  not  tender  their  shares  pursuant  to  our  offer  and
shareholders  who  otherwise  retain an equity  interest in The Peoples  Holding
Company  (including  as a result  of a  partial  tender  of their  shares,  or a
proration  pursuant to the offer or a conditional tender the condition for which
was not  satisfied)  will  continue to be  shareholders  of The Peoples  Holding
Company with the attendant  risks and rewards  associated with owning the equity
securities of The Peoples Holding Company.

OUR BOARD OF DIRECTORS  HAS  APPROVED  THIS OFFER.  HOWEVER,  NEITHER WE NOR OUR
BOARD OF DIRECTORS,  NOR THE INFORMATION  AGENT MAKES ANY  RECOMMENDATION  AS TO
WHETHER A SHAREHOLDER SHOULD TENDER OR REFRAIN FROM TENDERING HIS OR HER SHARES,
AND NEITHER WE NOR OUR BOARD OF DIRECTORS HAS  AUTHORIZED ANY PERSON TO MAKE ANY
SUCH   RECOMMENDATION.   SHAREHOLDERS  ARE  URGED  TO  EVALUATE   CAREFULLY  ALL
INFORMATION  CONTAINED  IN THIS  OFFER,  CONSULT  THEIR OWN  INVESTMENT  AND TAX
ADVISORS  AND MAKE THEIR OWN DECISION  WHETHER TO TENDER  SHARES AND, IF SO, HOW
MANY SHARES TO TENDER. DIRECTORS, OFFICERS AND AFFILIATES OF THE PEOPLES HOLDING
COMPANY HAVE  INDICATED TO US THAT THEY DO NOT INTEND TO TENDER SHARES  PURSUANT
TO THIS  OFFER.  Section 10  provides  information  about  their  current  share
ownership.

USE OF SHARES  ACQUIRED.  The  shares we  purchase  pursuant  to this offer will
become  treasury stock and will be available for issuance by The Peoples Holding
Company in the  future  without  further  shareholder  action  (except as may be
required by  applicable  law or the rules  applicable  to companies  with shares
traded on the American Stock Exchange or any other securities  exchange on which
the  shares may be listed)  for  purposes  including,  but not  limited  to, the
acquisition of other  businesses,  the raising of additional  capital for use in
our businesses  and the  satisfaction  of  obligations  under existing or future
employee  benefit plans. We do not currently issue shares under any compensatory
and benefit  plans,  and we  currently  have no plans for the issuance of shares
purchased pursuant to our offer.

SECTION 3.  PROCEDURE FOR TENDERING SHARES

To tender shares  pursuant to our offer, a properly  completed and duly executed
letter of transmittal  (or facsimile  thereof),  together with the  certificates
representing  the  tendered  shares and any other  required  documents,  must be
transmitted  to and received by the  depositary  at its address set forth on the
last page of this document prior to the expiration date of the offer. The method
of delivery of all required documents is at the option and risk of the tendering
shareholder.  If  delivery  is by mail,  registered  mail  with  return  receipt
requested, properly insured, is recommended.

In the letter of transmittal,  the tendering shareholder must: (i) set forth his
name and address; (ii) set forth the number of shares he is tendering; and (iii)
set forth the number of the stock certificate(s) representing such shares.

In cases where shares are tendered by a registered holder of The Peoples Holding
Company Common Stock who has completed either the box entitled  "Special Payment
Instructions" or the box entitled "Special Delivery  Instructions" on the letter
of transmittal,  all signatures on the letters of transmittal must be guaranteed
by an  "Eligible  Institution."  An  "Eligible  Institution"  is a bank,  broker
dealer,  credit union,  savings  association or other entity that is a member in
good standing of the Securities  Transfer  Agents  Medallion  Program or a bank,
broker,  dealer,  credit union,  savings association or other entity which is an
"eligible  guarantor  institution,"  as that  term is  defined  in Rule  17Ad-15
promulgated  under the  Securities  Exchange  Act of 1934,  as  amended.  If the
certificates are registered in the name of a person other than the signer of the
letter of  transmittal,  or if  certificates  for  unpurchased  shares are to be
issued to a person other than the registered holder(s), the certificates must be
endorsed or  accompanied  by  appropriate  stock  powers,  in either case signed
exactly  as the name or names of the  registered  owner or owners  appear on the
certificates,  with  the  signature(s)  on  the  certificates  or  stock  powers
guaranteed as aforesaid.

  6

A tender of shares  pursuant to the procedures  described  below in this Section
will constitute a binding  agreement  between the tendering  shareholder and The
Peoples  Holding  Company  upon the terms and subject to the  conditions  of our
offer.

THE METHOD OF DELIVERING ALL DOCUMENTS,  INCLUDING  CERTIFICATES FOR SHARES, THE
LETTER OF TRANSMITTAL AND ANY OTHER REQUIRED DOCUMENTS,  IS AT YOUR ELECTION AND
RISK. IF DELIVERY IS BY MAIL,  REGISTERED  MAIL WITH RETURN  RECEIPT  REQUESTED,
PROPERLY INSURED, IS RECOMMENDED.

ALL DELIVERIES IN CONNECTION  WITH OUR OFFER,  INCLUDING A LETTER OF TRANSMITTAL
AND  CERTIFICATES  FOR SHARES,  MUST BE MADE TO THE DEPOSITARY AND NOT TO US, OR
THE  BOOK-ENTRY  TRANSFER  FACILITY.  ANY  DOCUMENTS  DELIVERED  TO  US  OR  THE
BOOK-ENTRY  TRANSFER  FACILITY  WILL  NOT BE  FORWARDED  TO THE  DEPOSITARY  AND
THEREFORE WILL NOT BE DEEMED TO BE PROPERLY TENDERED.  IN ALL CASES,  SUFFICIENT
TIME SHOULD BE ALLOWED TO ENSURE TIMELY DELIVERY.

BOOK-ENTRY  DELIVERY.  The depositary  will establish an account with respect to
the shares at The  Depository  Trust  Company  ("DTC") for purposes of our offer
within  two  business  days  after  the  date of this  document.  Any  financial
institution  that is a participant in DTC's system may make book-entry  delivery
of shares by causing DTC to transfer such shares into the  depositary's  account
in accordance  with DTC's  procedure for such transfer.  Even though delivery of
shares may be effected through book-entry transfer into the depositary's account
at DTC,  a  properly  completed  and duly  executed  letter of  transmittal  (or
facsimile thereof), with any required signature guarantee, or an Agent's Message
in the case of a book-entry transfer, and any other required documentation, must
in any case be  transmitted to and received by the depositary at its address set
forth on the last page of this  document  prior to the  expiration  date, or the
guaranteed  delivery  procedures set forth herein must be followed.  Delivery of
the  letter of  transmittal(or  other  required  documentation)  to DTC does not
constitute delivery to the depositary.

GUARANTEED DELIVERY. If you want to tender your shares pursuant to our offer but
your  share  certificates  are not  immediately  available,  the  procedure  for
book-entry  transfer  cannot be completed on a timely basis, or if time will not
permit all required  documents to reach the  depositary  prior to the expiration
date, you can still tender your shares if all the following conditions are met:

     o    the tender is made by or through an Eligible Institution;

     o    the depositary receives by hand, mail,  overnight courier or facsimile
          transmission,  prior to the expiration date, a properly  completed and
          duly  executed  notice  of  guaranteed  delivery  in the  form we have
          provided with this document (with signatures guaranteed by an Eligible
          Institution); and

     o    the depositary receives,  within three American Stock Exchange trading
          days  after  the  date of its  receipt  of the  notice  of  guaranteed
          delivery,

     o    the certificates  for all tendered shares,  or confirmation of receipt
          of the shares  pursuant to the  procedure for  book-entry  transfer as
          described above, and

     o    a properly  completed  and duly  executed  letter of  transmittal  (or
          facsimile thereof),  or an Agent's Message in the case of a book-entry
          transfer,   and  any  other  documents   required  by  the  letter  of
          transmittal.

In any  event,  the  exchange  of the  Purchase  Price for shares  tendered  and
accepted  for  purchase  pursuant  to our offer will be made only  after  timely
receipt by the depositary of certificates  for the shares,  properly  completed,
duly executed letter(s) of transmittal and any other required documents.

  7

To avoid  backup  federal  income tax  withholding  with respect to the Purchase
Price  received by a shareholder  pursuant to our offer,  the  shareholder  must
provide the depositary with a correct taxpayer  identification number or certify
that he or she is not  subject  to backup  Federal  income  tax  withholding  by
completing the Substitute Form W-9 included in the letter of transmittal.

DETERMINATION OF VALIDITY; REJECTION OF SHARES; WAIVER OF DEFECTS; NO OBLIGATION
TO GIVE NOTICE OF DEFECTS. All questions as to the validity,  form,  eligibility
(including  time of  receipt)  and  acceptance  of any tender of shares  will be
determined by us in our sole discretion, and our determination will be final and
binding.  We reserve the absolute right to reject any or all tenders  determined
by us not to be in proper form or the  acceptance  or purchase for which may, in
the opinion of our counsel,  be unlawful.  We also reserve the absolute right to
waive prior to the  expiration  date any condition  (other than the  nonwaivable
conditions) or any defect or irregularity in the tender of any shares. No tender
of shares  will be  deemed  to have been  validly  made  until all  defects  and
irregularities  have been cured or waived.  Our  interpretation of the terms and
conditions of our offer (including this document,  the letter of transmittal and
its instructions  and other offer materials) will be final and binding.  Neither
we,  the  depositary  nor any  other  person  will  be  under  any  duty to give
notification  of any  defects or  irregularities  in the tender of any shares or
will incur any liability for failure to give any such notification.

ESOP.  As of December 31, 2000,  The Peoples Bank and Trust  Company's  Employee
Stock  Ownership  Plan(the  "ESOP")  held  344,343  shares,  all of  which  were
allocated to the individual  accounts of the ESOP plan  participants.  Under the
terms of the ESOP, the Trustee,  The Peoples Bank & Trust Company,  must consent
to a tender of shares pursuant to our offer. The  Administrative  Committee that
advises  the Trustee on matters of this  nature has  recommended  to the Trustee
that the Trustee:  (i) not tender any of the unallocated ESOP shares pursuant to
our offer;  and (ii) not consent to the tender of shares by  participants in the
ESOP who have been allocated shares over which such participants have investment
discretion.  The  Trustee  has  decided  to  follow  the  recommendation  of the
Administrative Committee. Further, the Trustee will not tender shares which have
been  allocated  to  participants  but for which such  participants  do not have
investment discretion.  Therefore, no shares held by the ESOP, whether allocated
or unallocated, will be tendered pursuant to this offer.

YOUR REPRESENTATIONS AND WARRANTIES;  OUR ACCEPTANCE CONSTITUTES AN AGREEMENT. A
tender of shares under any of the  procedures  described  above will  constitute
your  acceptance  of the  terms and  conditions  of our  offer,  as well as your
representation and warranty to us that:

     o    you have a "net long position" in the shares or equivalent  securities
          at least equal to the shares tendered within the meaning of Rule 14e-4
          promulgated by the SEC under the Exchange Act, and

     o    the tender of shares complies with Rule 14e-4.

It is a violation of Rule 14e-4 for a person, directly or indirectly,  to tender
shares for that  person's own account  unless,  at the time of tender and at the
end of the proration period, the person so tendering:

     o    has a "net long position" equal to or greater than the amount tendered
          in the subject securities or securities immediately  convertible into,
          or exchangeable or exercisable for, the subject securities, and

     o    will deliver or cause to be delivered  the shares in  accordance  with
          the terms of the tender offer.

Rule 14e-4 provides a similar restriction  applicable to the tender or guarantee
of a tender on behalf of another person.

Our acceptance for payment of shares  tendered under our offer will constitute a
binding  agreement between you and us upon the terms and conditions of our offer
described in this and related documents.

  8

FEDERAL  BACKUP   WITHHOLDING  TAX.  Under  the  United  States  federal  backup
withholding  tax rules,  31% of the gross  proceeds  payable to a shareholder or
other  payee in the tender  offer must be  withheld  and  remitted to the United
States  Treasury,  unless the  shareholder or other payee provides such person's
taxpayer  identification  number  (employer   identification  number  or  social
security number) to the depositary and certifies under penalties of perjury that
such number is correct or otherwise establishes an exemption.  If the depositary
is not  provided  with the  correct  taxpayer  identification  number or another
adequate  basis for  exemption,  the holder may be subject to certain  penalties
imposed by the Internal Revenue Service.  Therefore,  each tendering shareholder
should  complete and sign the substitute Form W-9 included as part of the letter
of transmittal in order to provide the information and  certification  necessary
to avoid backup withholding,  unless such shareholder  otherwise  establishes to
the satisfaction of the depositary that the shareholder is not subject to backup
withholding.

Certain  shareholders  (including,  among others,  all  corporations and certain
foreign  shareholders (in addition to foreign  corporations)) are not subject to
these backup withholding rules. In order for a foreign shareholder to qualify as
an  exempt  recipient,  that  shareholder  must  submit  an  IRS  Form  W-8 or a
Substitute  Form W-8,  signed  under  penalties  of perjury,  attesting  to that
shareholder's  exempt  status.  The  applicable  form can be  obtained  from the
depositary. See Instruction 9 of the letter of transmittal.

TO PREVENT  FEDERAL  BACKUP  WITHHOLDING  TAX EQUAL TO 31% OF THE GROSS PAYMENTS
MADE TO SHAREHOLDERS FOR SHARES PURCHASED UNDER OUR OFFER,  EACH SHAREHOLDER WHO
DOES NOT OTHERWISE ESTABLISH AN EXEMPTION FROM SUCH WITHHOLDING MUST PROVIDE THE
DEPOSITARY WITH THE  SHAREHOLDER'S  CORRECT TAXPAYER  IDENTIFICATION  NUMBER AND
PROVIDE OTHER  INFORMATION BY COMPLETING  THE SUBSTITUTE  FORM W-9 INCLUDED WITH
THE LETTER OF TRANSMITTAL.

For a discussion of United States federal income tax  consequences  to tendering
shareholders, SEE SECTION 7.

SECTION 4.  PURCHASE OF SHARES AND PAYMENT OF THE PURCHASE PRICE

ACCEPTANCE.  Upon the terms and conditions of our offer,  as soon as practicable
following the expiration date, we will:

     o    pay for shares properly tendered and not properly withdrawn, and

     o    accept for  payment,  pay for and thereby  purchase,  shares  properly
          tendered and not properly  withdrawn.  The acceptance for purchase and
          the purchase of shares validly tendered and not withdrawn will be made
          as soon as practicable after all the conditions to our offer have been
          satisfied or waived.  For purposes of our offer,  we will be deemed to
          have accepted for purchase and thereby acquired tendered shares as, if
          and when we give  oral or  written  notice  to the  depositary  of our
          acceptance of the tenders of such shares (the "Acceptance Notice").

Upon the terms and  conditions of our offer,  as soon as  practicable  after the
expiration  date, we will accept for payment and pay a single per share purchase
price for  604,312  shares,  subject to  increase  or  decrease  as  provided in
Sections 1 and 14, if properly  tendered  and not  properly  withdrawn,  or such
lesser number of shares as are properly tendered and not properly withdrawn,  at
the Purchase Price of $23.00.

DEPOSITARY.  Delivery of the  aggregate  Purchase  Price in exchange  for shares
pursuant  to our offer  will be made by the  depositary  as soon as  practicable
after receipt of the Acceptance  Notice.  The  depositary  will act as agent for
tendering  shareholders  for the purpose of receiving the Purchase Price from us
and remitting the same to tendering shareholders. Under no circumstances will we
pay interest by reason of any delay in making such payment.

  9

ANY TENDERING  SHAREHOLDER OR OTHER PAYEE WHO FAILS TO COMPLETE FULLY,  SIGN AND
RETURN TO THE  DEPOSITARY  THE  SUBSTITUTE  FORM W-9 INCLUDED WITH THE LETTER OF
TRANSMITTAL  MAY BE SUBJECT TO FEDERAL INCOME BACKUP  WITHHOLDING  TAX OF 31% OF
THE GROSS PROCEEDS PAID TO THE  SHAREHOLDER OR OTHER PAYEE UNDER OUR OFFER.  SEE
SECTION 3. ALSO SEE SECTION 7 REGARDING  ADDITIONAL UNITED STATES FEDERAL INCOME
TAX CONSEQUENCES.

RETURN OF  CERTIFICATES.  If any  tendered  shares are not accepted for purchase
pursuant  to the  terms  and  conditions  of our  offer  for any  reason,  or if
certificates  are submitted  for more shares than are tendered,  or if we should
cancel the offer  because any other  condition of our offer is not  satisfied or
waived,  certificates  for  such  unpurchased  shares  will be  returned  to the
tendering  shareholder  by the  depositary  as  soon  as  practicable  following
consummation, cancellation or termination of our offer.

SECTION 5.  CONDITIONAL TENDER OF SHARES

Under the circumstances  described above in Section 1, we may prorate the number
of shares purchased pursuant to our offer. Shareholders may wish to tender their
shares, but only on the condition that all or some other minimum number of their
shares are  purchased.  In  addition,  as  discussed in Section 7, the number of
shares  to be  purchased  from a  particular  shareholder  may  affect  the  tax
treatment  of the purchase to the  shareholder  and the  shareholder's  decision
whether  to  tender  and how many  shares  to  tender.  The  conditional  tender
alternative  allows a shareholder to tender shares subject to the condition that
a specified  minimum number of the  shareholder's  shares tendered pursuant to a
letter  of  transmittal  - which  may be all of the  shares  tendered  - must be
purchased  if  any of the  shareholder's  tendered  shares  are  purchased.  The
conditional  tender alternative is made available so that a shareholder may: (i)
know with  certainty the number of his shares,  if any,  which will be purchased
pursuant  to our offer  (provided  his  shares  are  properly  tendered  and the
condition of his tender is otherwise  satisfied);  or (ii) seek to structure the
purchase  of  shares  pursuant  to our  offer in such a  manner  that it will be
treated as a sale of such shares by the shareholder,  rather than the payment of
a dividend to the shareholder, for federal income tax purposes. EACH SHAREHOLDER
IS URGED TO CONSULT WITH HIS OR HER OWN TAX ADVISOR.

If you  wish to make a  conditional  tender  you must  indicate  this in the box
captioned  "Conditional Tenders" in the letter of transmittal or, if applicable,
in the notice of guaranteed delivery.  You also must calculate and appropriately
indicate  the minimum  number of shares that must be  purchased if any are to be
purchased.  After  our offer  expires,  if more than  604,312  shares  have been
properly tendered and not properly  withdrawn and we must prorate our acceptance
of and payment for tendered  shares,  we will calculate a preliminary  proration
percentage   based  upon  all  shares  properly   tendered,   conditionally   or
unconditionally.  If the effect of this preliminary proration would be to reduce
the number of shares to be  purchased  from any  shareholder  below the  minimum
number specified by that shareholder,  the conditional tender will automatically
be regarded as withdrawn, unless chosen by lot for reinstatement as discussed in
the next paragraph.

After giving effect to these  withdrawals,  we will accept the remaining  shares
properly  tendered,  conditionally or  unconditionally,  on a pro rata basis, if
necessary.  If we are able to purchase all of the remaining  tendered shares and
the number that we would purchase  would be below  604,312,  then, to the extent
feasible,  we will select enough of the conditional tenders that would otherwise
have been  deemed  withdrawn  to permit us to  purchase  604,312  shares.  To be
eligible for purchase by random lot, shareholders whose shares are conditionally
tendered must have tendered all of their shares.

All shares tendered by a shareholder subject to a conditional tender pursuant to
the  letter of  transmittal  or  notice  of  guaranteed  delivery,  regarded  as
withdrawn  as a  result  of  proration  and not  eventually  purchased,  will be
returned as soon as practicable after the EXPIRATION DATE without any expense to
the shareholder.

  10

SECTION 6.  WITHDRAWAL RIGHTS

Shares tendered  pursuant to our offer may be withdrawn at any time prior to the
time the offer  expires on the  EXPIRATION  DATE.  In addition,  unless  earlier
accepted for purchase in the offer, shares tendered may also be withdrawn at any
time  after  May  25,  2001.  For a  withdrawal  to  be  effective,  a  written,
telegraphic,  telex or  facsimile  transmission  notice  of  withdrawal  must be
received by the  Expiration  Date by the  depositary at its address set forth on
the last page of this  document and must  specify the name of the person  having
tendered  the shares to be withdrawn  and the number of shares to be  withdrawn,
and,  if  certificates  have  been  delivered  or  otherwise  identified  to the
depositary,  the name of the  registered  holder and the  serial  numbers of the
particular  certificates  evidencing the shares withdrawn must also be furnished
to the depositary.

If certificates  have already been delivered,  the signature(s) on the notice of
withdrawal must be guaranteed by an Eligible  Institution  (i.e., a bank, broker
dealer,  credit union,  savings  association or other entity that is a member in
good standing of the Securities  Transfer  Agents  Medallion  Program or a bank,
broker,  dealer,  credit union,  savings association or other entity which is an
"eligible  guarantor  institution,"  as that  term is  defined  in Rule  17Ad-15
promulgated  under the Securities  Exchange Act of 1934, as amended) unless such
shares have been tendered for the account of any Eligible Institution.

All questions as to the form and validity (including time of receipt) of notices
of  withdrawal  will  be  determined  by us in  our  sole  discretion,  and  our
determination  will be final and  binding.  Neither we, the  depositary  nor any
other  person  will be under any duty to give  notification  of any  defects  or
irregularities  in any  notice of  withdrawal  or will incur any  liability  for
failure to give any such  notification.  Any shares  properly  withdrawn will be
deemed not to have been validly  tendered  for  purposes of our offer.  However,
withdrawn shares may be re-tendered by following one of the procedures described
under Section 3 at any time prior to the expiration date.

SECTION 7.  MATERIAL FEDERAL INCOME TAX CONSEQUENCES

The following discussion summarizes certain U.S. federal income tax consequences
to holders of shares  relevant to our offer.  The  discussion  contained in this
summary  is based  upon the  Internal  Revenue  Code of 1986,  as  amended  (the
"Code"),  temporary  and  final  Treasury  Regulations  promulgated  thereunder,
proposed   Treasury   Regulations,   published   rulings,   notices   and  other
administrative  pronouncements  of the Internal  Revenue  Service  ("IRS"),  and
judicial decisions now in effect, all of which are subject to change at any time
by  legislative,  judicial or  administrative  action.  Any such  changes may be
applied  retroactively  in  a  manner  that  could  materially  affect  the  tax
consequences described herein.

This  summary  assumes  that the shares are held as capital  assets,  within the
meaning of Section  1221 of the Code.  This  summary does not address all of the
tax  consequences  that may be relevant to particular  shareholders  in light of
their personal  circumstances,  or to certain types of  shareholders  including,
without   limitation,   financial   institutions,   dealers  in   securities  or
commodities,  securities traders that elect to mark to market,  foreign persons,
insurance  companies,  tax-exempt  organizations,  persons  who hold shares as a
position in a straddle or as a part of a hedging or conversion transaction,  and
persons who acquired shares pursuant to an exercise of employee stock options or
rights or  otherwise as  compensation.  In  particular,  the  discussion  of the
consequences  of an  exchange of shares for cash  pursuant to our offer  applies
only to a United States holder.  For purposes of this summary,  a "United States
holder" is a holder of shares  that is: (i) a citizen or  resident of the United
States; (ii) a corporation,  partnership or other entity created or organized in
or under the laws of the United States,  any state or any political  subdivision
thereof;  (iii) an estate the income of which is subject to U.S.  federal income
taxation  regardless  of its  source;  or (iv) a trust whose  administration  is
subject to the primary supervision of a U.S. court and the trustees of which are
one or more U.S.  persons  who have the  authority  to control  all  substantial
decisions of the trust.
  11

The summary  does not address the state,  local or foreign tax  consequences  of
participating in our offer. Each shareholder  should consult its own tax advisor
concerning  the decision to participate in our offer as well as the specific tax
consequences (foreign, federal, state and local) applicable to it.

An exchange of shares for cash  pursuant to our offer by a United  States holder
will be a  taxable  transaction  for U.S.  federal  income  tax  purposes.  As a
consequence  of the exchange,  a United  States  holder will,  depending on such
holder's  particular  circumstances,  be  treated  either  as  having  sold such
holder's shares or as having received a dividend  distribution  from The Peoples
Holding Company, with the tax consequences described below.

Under the Code,  a United  States  holder whose  shares are  exchanged  for cash
pursuant  to our offer  will be  treated as having  sold such  holder's  shares,
rather than as having  received a dividend,  if the  exchange:  (i) results in a
"complete  termination"  of such holder's equity interest in The Peoples Holding
Company; (ii) is "substantially  disproportionate"  with respect to such holder;
or (iii) is "not  essentially  equivalent  to a  dividend"  with  respect to the
holder. For purposes of this analysis, in addition to shares actually owned by a
United States holder,  such holder will be deemed to constructively  own certain
shares. For purposes of these  constructive  ownership rules, a holder is deemed
to constructively  own shares which are owned by other persons,  such as certain
family members,  a trust or other entities.  Because the constructive  ownership
rules are complex,  each United States holder should consult its own tax advisor
as to the applicability of these rules.

If a United States holder sells shares to persons other than The Peoples Holding
Company  at or about the time  such  holder  also  sells  shares to The  Peoples
Holding  Company  pursuant  to our offer and the various  sales  effected by the
holder  are  part of an  overall  plan to  reduce  or  terminate  such  holder's
proportionate interest in The Peoples Holding Company, then the sales to persons
other  than The  Peoples  Holding  Company  may,  for U.S.  federal  income  tax
purposes,  be integrated  with the holder's sale of shares pursuant to our offer
and, if  integrated,  should be taken into  account in  determining  whether the
holder satisfies any of the three tests described below.

A United  States  holder will  satisfy the  "complete  termination"  test if all
shares  actually or  constructively  owned by such holder are exchanged for cash
pursuant to our offer.

A United States holder will satisfy the "substantially disproportionate" test if
immediately  after the exchange  such holder owns,  actually or  constructively,
less than 50% of the total combined  voting power of all classes of stock of The
Peoples Holding Company entitled to vote and such holder's  percentage  interest
in The Peoples  Holding Company  (i.e.,the  number of voting shares actually and
constructively  owned by such  holder  divided  by the  number of voting  shares
outstanding)  is less  than  80% of such  holder's  percentage  interest  in The
Peoples Holding Company prior to the exchange.

A United  States  holder  will  satisfy  the "not  essentially  equivalent  to a
dividend"  test if the  reduction in such  holder's  percentage  interest in The
Peoples Holding Company, as described above, constitutes a "meaningful reduction
of the holder's proportionate interest" given such holder's particular facts and
circumstances.  The IRS has  indicated  in  published  rulings  that a  minority
shareholder in a publicly  traded  corporation  whose relative stock interest is
minimal  (i.e.,  less than 1%) and who  exercises  no  control  with  respect to
corporate  affairs is considered to have a "meaningful  reduction"  generally if
such  shareholder  has some  reduction  in such  shareholder's  stock  ownership
percentage.

  12

The Peoples  Holding  Company cannot predict whether or to what extent our offer
will be  oversubscribed.  If our offer is  oversubscribed,  proration of tenders
pursuant to our offer will cause The  Peoples  Holding  Company to accept  fewer
shares than are tendered.  Therefore,  a holder can be given no assurance that a
sufficient  number of such  holder's  shares will be  exchanged  pursuant to our
offer to ensure that such exchange  will be treated as a sale,  rather than as a
dividend,  for U.S. federal income tax purposes  pursuant to the rules discussed
above.  A holder may wish to condition his tender on a minimum  number of shares
being  redeemed as described in Section 5 above,  so that none of such  holder's
shares are  redeemed  unless The Peoples  Holding  Company  accepts a sufficient
number of his  shares so that he  satisfies  one or more of the tests  described
above.  While  such a  conditional  tender  may ensure  that a  redemption  of a
holder's shares would be treated as an exchange for federal income tax purposes,
a  conditional  tender may result in no shares  being  accepted  by The  Peoples
Holding Company.  In determining the minimum number of shares to be accepted for
purchase in such a conditional  tender, a holder should take into account shares
constructively  owned by the  holder  pursuant  to the  rules  discussed  above.
Shareholders  considering a conditional  tender due to the foregoing reasons are
urged to consult with their tax advisors  regarding the relative  advantages and
disadvantages of such a tender.

If a United  States  holder's  sale of its  shares  satisfies  one of the  tests
described  above,  such holder will recognize  capital gain or loss equal to the
difference  between the amount of cash  received and such  holder's tax basis in
the  shares  sold.  Any  capital  gain  or  loss so  recognized  generally  will
constitute long-term capital gain or loss if the holding period for the holder's
shares sold is greater than one year as of the date of the sale.  In the case of
a United States holder that is an  individual,  estate or trust,  such long-term
capital  gain or loss  generally  will be taxed at a  maximum  rate of 20%.  The
federal  income tax rates  applicable to capital gains for taxpayers  other than
individuals,  estates and trusts are currently  the same as those  applicable to
ordinary  income. A United States holder's ability to deduct capital losses from
ordinary income is limited.  Capital losses generally may be used by a corporate
taxpayer  only  to  offset  capital  gains,  and  by a  taxpayer  other  than  a
corporation  only to the extent of capital gains plus $3,000 of ordinary  income
per year.

If a United States  holder who sells shares  pursuant to our offer does not meet
one of the tests described  above and, thus, is not treated as having  exchanged
such holder's shares for cash, the entire amount of cash received by such holder
will be treated as a dividend  to the extent of The  Peoples  Holding  Company's
current and accumulated earnings and profits,  which The Peoples Holding Company
anticipates will be sufficient to cover the amount of any such dividend and will
be includible in the holder's  gross income as ordinary  income in its entirety,
without  reduction  for  the tax  basis  of the  shares  sold.  No loss  will be
recognized.  As to an exchange  which is treated as a dividend,  a United States
holder's tax basis in the shares sold  generally  will be added to such holder's
tax basis in such holder's remaining shares. To the extent that cash received in
exchange  for  shares is  treated as a dividend  to a  corporate  United  States
holder,  such holder will be: (i)  eligible for a  dividends-received  deduction
(subject to  applicable  limitations);  and (ii)  subject to the  "extraordinary
dividend"  provisions of the Code. To the extent, if any, that the cash received
by a United  States holder  exceeds The Peoples  Holding  Company's  current and
accumulated  earnings and profits, it will be treated first as a tax-free return
of such holder's tax basis in the shares and thereafter as capital gain.

Shareholders whose shares are not purchased pursuant to the offer will not incur
any tax liability as a result of the consummation of our offer.

THE PEOPLES  HOLDING  COMPANY  SHAREHOLDERS  ARE URGED TO CONSULT  THEIR OWN TAX
ADVISORS  AS TO THE  PRECISE  FEDERAL,  STATE,  LOCAL,  FOREIGN  AND  OTHER  TAX
CONSEQUENCES OF THIS OFFER.

  13

SECTION 8.  SHARE, TRADING PRICE AND DIVIDEND

INFORMATION  SHARES  OUTSTANDING.  As of  April  9,  2001,  we  had  outstanding
6,043,124 shares of Common Stock,  $5.00 par value. The 604,312 shares of Common
Stock that we are offering to purchase represent approximately 10% of our issued
and outstanding Common Stock as of April 9, 2001.  Assuming that we purchase all
604,312  shares of Common Stock that we are offering to purchase,  the number of
our issued and outstanding  shares of Common Stock would be reduced to 5,438,812
shares immediately after the offer.

SHARE PRICES.  Our Common Stock is traded on the American  Stock  Exchange under
the symbol "PHC." The following  table shows the high and low bid prices for our
Common Stock for each  quarter  since  December  31,  1998,  as well as the cash
dividends paid per share on the Common Stock during the past two years.

         YEAR              QUARTERLY
         QUARTER           DIVIDENDS         LOW       HIGH
         -----------       ---------       -------   --------

         2001
         ----
         1st Quarter         $.230          $16.38    $19.75

         2000
         ----
         1st Quarter         $.220          $23.75    $28.50
         2nd Quarter          .220           18.88     25.25
         3rd Quarter          .220           19.00     21.25
         4th Quarter          .220           17.81     21.00

         1999
         ----
         1st Quarter         $.210          $30.50    $36.75
         2nd Quarter          .210           29.63     36.00
         3rd Quarter          .210           27.00     34.00
         4th Quarter          .210           28.38     34.25

On April 9, 2001, a date close to the date of this document,  the last per share
sale price of The  Peoples  Holding  Company  Common  Stock as  reported  on the
American Stock Exchange was $18.50. We urge you to obtain current  quotations of
the market price of our Common Stock.

SECTION 9.  INFORMATION ABOUT US

GENERAL.  The  Peoples  Holding  Company  is a  Mississippi  corporation  and  a
financial holding company  registered with the Board of Governors of the Federal
Reserve  System  under the Bank  Holding  Company Act of 1956,  as amended.  The
Peoples  Holding  Company was  incorporated  on November 10,  1982,  in order to
acquire all of the common  stock of The Peoples  Bank & Trust  Company,  Tupelo,
Mississippi (the Bank). The Peoples Holding Company  commenced  business on July
1, 1983, and the acquisition of the Bank was also  consummated at that time. All
of The Peoples Holding Company's  business  activities are conducted through the
Bank  and  the  Bank's  wholly-owned  subsidiaries,  Peoples  Insurance  Agency,
Dominion Life and Health P.A.,  Alliance  Finance  Company and Dominion  Company
(Dominion companies).  The Bank accounts for substantially all of the assets and
revenues of The Peoples Holding  Company.  On December 31, 2000, The Bank had 41
banking offices in Tupelo,  Aberdeen,  Amory,  Batesville,  Belden,  Booneville,
Calhoun  City,  Coffeeville,   Corinth,   Grenada,   Guntown,   Hernando,  Iuka,
Louisville,  New Albany,  Okolona,  Olive Branch,  Pontotoc,  Saltillo,  Sardis,
Shannon,  Smithville,  Southaven,  Verona, Water Valley, West Point, and Winona,
Mississippi.

  14

The Bank also has three  insurance  offices  located at Corinth,  Louisville and
Tupelo. All members of the Board of Directors of The Peoples Holding Company are
also  members  of the Board of  Directors  of the Bank.  Responsibility  for the
management of the Bank and its subsidiaries  remains with the Board of Directors
and Officers of the Bank;  however,  management services rendered to the Bank by
The Peoples Holding  Company are intended to supplement the internal  management
of the Bank and expand the scope of banking  services  normally offered by them.
The Bank, which is The Peoples Holding Company's subsidiary,  was established in
February 1904 as a  state-chartered  bank. It is insured by the Federal  Deposit
Insurance  Corporation.  As a commercial  bank, a complete  range of banking and
financial   services  is  provided  to  individuals  and  small  to  medium-size
businesses.  These services include checking and savings accounts,  business and
personal loans,  interim  construction and residential  mortgage loans,  student
loans,  equipment  leasing,  as  well  as  safe  deposit  and  night  depository
facilities. Automated teller machines located throughout our market area and our
PC  Banking  product  provide  24-hour  banking  services.  Accounts  receivable
factoring  is also  available  to  qualified  businesses.  In addition to a wide
variety of  fiduciary  services,  the Bank  administers  (as trustee or in other
fiduciary  or  representative  capacities)  pension,  profit-sharing  and  other
employee benefit plans, and personal trusts and estates. In addition to offering
annuities  and mutual  funds,  the  acquisition  of the  insurance  agencies has
expanded  The Bank's  product  and  delivery  network to  include  personal  and
business insurance  coverages.  Neither The Peoples Holding Company nor the Bank
has any foreign  activities.  At December 31, 2000, The Peoples  Holding Company
had  consolidated   total  assets,   deposits,   and  shareholders'   equity  of
approximately $1,211,940,000, $1,046,605,000, and $121,661,000, respectively.

The following table shows our capital ratios for bank regulatory  purposes as of
December 31, 2000,  and on a proforma  basis  assuming  604,312 shares of Common
Stock are purchased at $23.00 per share plus additional related expenses. Dollar
amounts below are shown in thousands.

                                        Actual                   Proforma
                                ----------------------    ----------------------
                                  Amount       Ratio        Amount       Ratio
                                ----------   ---------    ----------   ---------
Total Risk Based Capital to
   Risk Weighted Assets
- ------------------------------
     Consolidated ............   $122,855      15.15%      $108,755      13.41%
     Bank only ...............   $122,165      15.06%      $108,065      13.32%

Tier 1 to Risk Weighted Assets
- ------------------------------
     Consolidated ............   $112,711      13.90%      $ 98,611      12.16%
     Bank only ...............   $112,022      13.81%      $ 97,922      12.07%

Tier 1 Leverage Capital to
   Average Assets
- ------------------------------
     Consolidated ............   $112,711       9.48%      $ 98,611       8.39%
     Bank only ...............   $112,022       9.42%      $ 97,922       8.34%

Proforma  book value per share at December 31, 2000,  and earnings per share for
the year ended  December 31, 2000 are $19.54 and $2.03,  respectively,  assuming
604,312 shares of common stock are purchased at $23.00 per share plus additional
related  expenses.  These  compare  to actual  historical  amounts of $20.09 and
$1.83, respectively.

  15

WHERE YOU CAN FIND ADDITIONAL INFORMATION. We are subject to the information and
reporting  requirements of the Exchange Act, and in accordance with such laws we
file with the SEC  periodic  reports,  proxy  statements  and other  information
relating to our business, financial condition and other matters. We are required
to disclose in these proxy statements filed with the SEC certain information, as
of particular  dates,  concerning  our directors and executive  officers,  their
compensation,  stock  options  granted  to them,  the  principal  holders of our
securities and any material interest of such persons in transactions with us. We
have also filed with the SEC an Issuer  Tender  Offer  Statement on Schedule TO,
which includes  additional  information  with respect to our offer. The reports,
statements  and  other  information  (including  any  exhibits,   amendments  or
supplements to such documents) we file may be inspected and copied at the public
reference facilities maintained by the SEC at Room 1024, 450 Fifth Street, N.W.,
Washington,  D.C.  20549;  and at the following  regional  offices of the SEC: 7
World Trade Center,  Suite 1300, New York, New York 10048;  and Citicorp Center,
500 West Madison Street,  Suite 1400,  Chicago,  Illinois 60661.  Copies of this
material  can also be  obtained  by mail,  upon  payment of the SEC's  customary
charges,  by writing to the Public Reference Section at 450 Fifth Street,  N.W.,
Washington,  D.C.  20549.  The SEC also  maintains a web site on the Internet at
http://www.sec.gov  that contains reports,  proxy and information statements and
other information regarding registrants that file electronically with the SEC.

INCORPORATION  BY REFERENCE.  The rules of the SEC allow us to  "incorporate  by
reference"  information  into this  document,  which means that we can  disclose
important  information  to  you  by  referring  you to  another  document  filed
separately with the SEC. These documents contain important information about us.
We are  incorporating  by reference in this document the following  documents we
have filed with the SEC:

     o    Our Annual  Report on Form 10-K for the year ended  December 31, 2000;
          and

     o    Our Proxy  Statement  dated March 19, 2001,  for our annual meeting of
          shareholders on April 17, 2001.

We incorporate by reference these documents and any additional documents that we
may  file  with  the SEC  between  the  date of this  document  and the  date of
expiration of withdrawal  rights by reference.  Those documents include periodic
reports, such as annual reports on Form 10-K, quarterly reports on Form 10-Q and
current  reports on Form 8-K. Item 8 and Exhibit 13 of our Annual Report on Form
10-K  for the year  ended  December  31,  2000  and the  consolidated  financial
statements for the years ended December 31, 2000 and 1999, have been audited and
are incorporated herein by reference.

You can obtain any of the documents  incorporated  by reference in this document
from us without charge, excluding any exhibits to those documents, by requesting
them in writing or by  telephone  from us.  Please  direct your  written or oral
request to Stuart R. Johnson Chief Financial Officer, The Peoples Bank and Trust
Company,  209 Troy Street,  Tupelo,  Mississippi  38802,  1-800-492-0365,  (662)
680-1477.  Please be sure to  include  your  complete  name and  address in your
request. If you request any incorporated  documents, we will mail them to you by
first class mail, or another equally prompt means, within one business day after
we receive your request.  In addition,  you can obtain copies of these documents
from the SEC's  website.  Such  documents may also be inspected at the locations
described above.

PLANS OR PROPOSALS.  Except as described in this document,  we currently have no
plans, proposals or negotiations that relate to or would result in:

     o    any  extraordinary  transaction  (such as a merger,  reorganization or
          liquidation)  involving  The  Peoples  Holding  Company  or any of its
          subsidiaries;

     o    any purchase,  sale or transfer of a material  amount of the assets of
          The Peoples Holding Company or any of its subsidiaries;

  16

     o    any  material  change  in the  present  dividend  rate or  policy,  or
          indebtedness or capitalization of, The Peoples Holding Company;

     o    any change in the present  board of  directors  or  management  of The
          Peoples  Holding  Company  (including any plans or proposals to change
          the number or the term of directors or to fill any existing  vacancies
          on the board or to change any material term of the employment contract
          of any executive officer);

     o    any other material change in The Peoples Holding  Company's  corporate
          structure or business;

     o    The Peoples Holding  Company's  Common Stock to cease to be authorized
          to be quoted on the American Stock Exchange;

     o    The Peoples  Holding  Company's  Common  Stock  becoming  eligible for
          termination of registration under Section 12(g)(4) of the 1934 Act;

     o    the  suspension of The Peoples  Holding  Company's  obligation to file
          reports under Section 15(d) of the 1934 Act;

     o    the acquisition by any person of additional  securities of The Peoples
          Holding  Company,  or the  disposition  of  securities  of The Peoples
          Holding Company; or

     o    any changes in The Peoples Holding Company's articles of incorporation
          or bylaws or other  actions  that  could  impede  the  acquisition  of
          control of The Peoples Holding Company.

PAST CONTACTS,  TRANSACTIONS,  NEGOTIATIONS AND AGREEMENTS.  The Peoples Holding
Company is not aware of any agreement, arrangement or understanding,  whether or
not legally  enforceable,  between The Peoples Holding Company (or any executive
officer or director of The Peoples  Holding  Company)  and any other person with
respect to any securities of The Peoples Holding Company.

SECTION 10.  INFORMATION ABOUT OUR DIRECTORS, EXECUTIVE OFFICERS AND CONTROLLING
             SHAREHOLDERS

As of April 9, 2001, our executive officer was:

         E.  Robinson McGraw, President and Chief Executive Officer

As of April 9, 2001, our directors were:

         William M. Beasley         George H. Booth, II
         Frank M. Brooks            John M. Creekmore
         Marshall H. Dickerson      Eugene B. Gifford, Jr.
         Robert C. Leake            E. Robinson McGraw
         J. Niles McNeel            C. Larry Michael
         John W. Smith              H. Joe Truelove
         J. Heywood Washburn        Robert H. Weaver
         J. Larry Young

SECURITIES  OWNERSHIP.  The  following  table  provides  information  about  the
aggregate  number  and  percentage  of  shares  of our  Common  Stock  that  are
beneficially  owned  by  our  directors,   executive  officers  and  controlling
shareholders, as of April 9, 2001.

                                    DIRECTLY         BENEFICIALLY
EXECUTIVE                            OWNED              OWNED
OFFICER:                             SHARES             SHARES         PERCENT*
- --------------------               ----------       --------------    ----------
E.  Robinson McGraw .............    3,516               (458)

  17

                                    DIRECTLY         BENEFICIALLY
                                     OWNED              OWNED
DIRECTORS:                           SHARES             SHARES         PERCENT*
- --------------------               ----------       --------------    ----------
William M. Beasley ..............   25,344             (3,793)
George H. Booth, II .............    4,310             (2,025)
Frank M. Brooks .................   13,460               (679)
John M. Creekmore ...............    1,168               (225)
Marshall H. Dickerson ...........    4,661                 (0)
Eugene B. Gifford, Jr. ..........   41,750            (18,879)
Robert C. Leake .................   18,249             (5,772)
E. Robinson McGraw ..............    3,516               (458)
J. Niles McNeel .................   12,626             (5,804)
C. Larry Michael ................    6,240                 (0)
John W. Smith ...................    7,183             (7,826)
H. Joe Truelove .................   14,427                 (0)
J. Heywood Washburn .............   36,725            (24,000)
Robert H. Weaver ................   98,539                 (0)**         1.63%
J. Larry Young ..................    2,972               (262)

*Percent in excess of 1% ownership is shown.
**(Excludes  10,872  shares  owned by his wife for  which Mr.  Weaver  disclaims
beneficial ownership)

Our proxy  statement for our annual meeting of  shareholders to be held on April
17, 2001,  described  transactions  in which we have engaged with our  executive
officers,  directors  and  their  associates,  some of which are  continuing  in
nature. To our knowledge, except as described in our Annual Report on Form 10-K,
our  Quarterly  Reports  on Form 10-Q or the  portions  of our  proxy  statement
incorporated in this document,  none of our directors or executive  officers has
entered  into or  proposed or  received  any  proposed  material  agreements  or
arrangements with respect to The Peoples Holding Company,  and, except for their
interest in our securities,  as described above,  none of them is a party to any
contract,  understanding,  relationship  or  arrangement  with  respect  to  our
securities.

To our  knowledge,  none of our  directors,  executive  officers or  controlling
shareholders  has  engaged  in any  transaction  within the past sixty days with
respect  to  any  of  our  securities   except  in  connection  with  our  stock
compensation  plans.  Shares are purchased in the open market by the independent
bank trustee administering our 401(k) plan.

We have been advised by our officers,  directors and affiliates that they do not
intend to tender any shares of Common Stock pursuant to this offer.

SECTION 11.  EFFECT OF OFFER ON MARKET FOR SHARES;  REGISTRATION  UNDER THE 1934
             ACT EFFECT ON MARKET.

As of April 9, 2001,  there were 6,043,124  shares of Common Stock  outstanding.
The  purchase  of shares  pursuant to our offer will reduce the number of shares
that might  otherwise trade publicly and may reduce the number of holders of The
Peoples  Holding Company Common Stock.  Nonetheless,  we believe that there will
still be a sufficient number of shares outstanding and publicly traded following
our offer to ensure a  continued  trading  market  in the  shares.  Based on the
published guidelines of the American Stock Exchange,  we do not believe that our
purchase  of shares  pursuant  to our offer will cause our  remaining  shares of
Common  Stock  to  be  delisted  from  the  American  Stock  Exchange.  We  have
conditioned  our offer so that we may  cancel the offer,  and not  purchase  any
shares,  if the offer would result our the Common Stock being  delisted from the
American Stock Exchange.

  18

MARGIN SECURITIES.  The shares are currently "margin securities" under the rules
of the Federal  Reserve  Board.  This has the effect,  among  other  things,  of
allowing  brokers to extend credit on the  collateral of the shares.  We believe
that,  following the purchase of shares  pursuant to our offer,  the shares will
continue to be "margin  securities"  for purpose of the Federal  Reserve Board's
margin regulations.

REGISTRATION  UNDER THE 1934 ACT. The shares are registered  under the 1934 Act,
which  requires,  among other things,  that The Peoples  Holding Company furnish
certain information to its shareholders and to the SEC and comply with the SEC's
proxy  rules in  connection  with  meetings  of The  Peoples  Holding  Company's
shareholders.  The Peoples Holding Company  believes that its purchase of shares
pursuant  to our offer  will not  result in the  shares  becoming  eligible  for
deregistration  or not subject to the reporting  obligations under the 1934 Act.
We have  conditioned our offer so that we may cancel the offer, and not purchase
any shares,  if the offer would  result in the Common Stock being held of record
by fewer than 300 persons.

SECTION 12.  CERTAIN LEGAL MATTERS GENERAL.

We are not  aware of any  license  or  regulatory  permit  which  appears  to be
material to our  business  and which is likely to be  adversely  affected by our
acquisition of shares  pursuant to our offer or, except as disclosed  below,  of
any  approval or other  action by any state,  federal or foreign  government  or
governmental  agency  that  would be  required  prior  to or as a result  of the
acquisition of shares pursuant to our offer.  We expressly  reserve the right to
challenge the validity and applicability of any state, foreign or other statutes
or  regulations   purporting  to  require   approval  of  the   commencement  or
consummation of our offer.

There can be no assurance that any license, permit, approval or other action, if
needed, would be obtained and, if obtained,  there can be no assurance as to the
date of any such  license,  permit or approval or the absence of any  litigation
challenging  any such license,  permit or approval.  Similarly,  there can be no
assurance  that  adverse  consequences  might not result to The Peoples  Holding
Company  or to its  business  in the  event  of  adverse  regulatory  action  or
inaction.

BANK  REGULATORY  MATTERS.  As a registered  bank holding  company,  The Peoples
Holding  Company is subject to the  supervision  and  regulation  of the Federal
Reserve  Board.  Because we are (and upon  completion  of the offer will remain)
"well-capitalized" and "well-managed," as those terms are defined by the Federal
Reserve Board, and not subject to any unresolved  supervisory  issues, we do not
require  the  approval  of the Federal  Reserve  Board in order to complete  the
proposed tender offer.

The Bank  Holding  Company  Act of 1956 and the Change in Bank  Control Act each
govern acquisition of control of bank holding companies.  As a general matter, a
person may not acquire  control of a bank  holding  company  such as The Peoples
Holding Company without the prior approval of the Federal Reserve Board.  If, as
a result of the offer, any shareholder becomes the beneficial owner of more than
10% of our  Common  Stock,  such  shareholder  may be  required  to  reduce  its
ownership interest in The Peoples Holding Company or obtain regulatory  approval
to continue to own more than 10%. Each shareholder whose ownership  interest may
be so increased  is urged to consult the  shareholder's  own legal  counsel with
respect to the consequences to the shareholder of the tender offer.

  19

SECTION 13.  CERTAIN CONDITIONS OF THIS OFFER

OFFER SUBJECT TO CONDITIONS.  Notwithstanding any other provisions of our offer,
we will not be required  to accept for  purchase  or  purchase  any shares,  may
postpone the acceptance  for purchase of or the purchase of shares  tendered and
may  cancel,  terminate  or amend  our  offer as  provided  herein if any of the
following  conditions  are not  satisfied or waived on or before the  expiration
date.

AVOIDANCE OF RULE 13e-3 TRANSACTION  CONDITION.  The Peoples Holding Company may
amend or terminate  our offer,  and shall not be required to accept for purchase
any shares tendered if, in our good faith reasonable  judgment,  any purchase of
shares  under the offer  could  result in the offer  being  considered  a "going
private transaction" under Rule 13e-3 of the Securities and Exchange Commission,
that is,

     o    if our  purchase of shares  pursuant to this offer would result in our
          Common Stock being held of record by fewer than 300 persons; or

     o    if our  purchase of shares  pursuant to this offer would result in our
          Common Stock no longer being  authorized for trading on American Stock
          Exchange.

The Avoidance of Rule 13e-3 Transaction  Condition is a nonwaivable condition to
our offer.

NO  LEGAL  PROHIBITION  CONDITION.  The  Peoples  Holding  Company  will  not be
obligated to close our offer if a preliminary or permanent injunction, decree or
order has been entered by any governmental authority, or another legal restraint
or  prohibition is in effect,  which  enjoins,  restrains or prohibits our offer
(the "No Legal Prohibition Condition"). As of the date of this document, no such
injunction,  decree, order,  restraint or prohibition exists, nor to The Peoples
Holding Company's  knowledge has any of the foregoing been threatened.  However,
The Peoples  Holding  Company can give no assurance that an injunction,  decree,
order,  restraint or prohibition will not exist in the future. In any event, the
No Legal Prohibition Condition is a nonwaivable condition to our offer.

MATERIAL  ADVERSE  CHANGE  CONDITION.  The Peoples  Holding  Company will not be
obligated  to close  our offer if,  after the date of this  document,  there has
occurred:  (i) the  declaration  of any banking  moratorium or any suspension of
payments in respect of banks in the United  States  (whether or not  mandatory);
(ii) any  general  suspension  of  trading  in, or  limitation  on  prices  for,
securities on any U.S. national securities  exchange or in the  over-the-counter
market;  (iii) the commencement of war, armed  hostilities or any other national
or international  crisis directly or indirectly involving the United States;(iv)
any  limitation(whether  or not  mandatory) by any  governmental,  regulatory or
administrative  agency or authority on, or any event which, in the sole judgment
of The Peoples Holding Company might materially  affect, the extension of credit
by banks or other lending institutions in the United States; (v) any significant
decrease  in the market  price of the  shares or in the market  prices of equity
securities  generally  in the  United  States  or  any  change  in  the  general
political,  market,  economic or financial  conditions  in the United  States or
abroad that could have in the sole  judgment of The  Peoples  Holding  Company a
material  adverse  effect on the business,  condition  (financial or otherwise),
income,  operations  or  prospects  of  The  Peoples  Holding  Company  and  its
subsidiaries,  taken as a whole,  or on the trading in the  shares;  (vi) in the
case of any of the  foregoing  existing at the time of the  announcement  of our
offer, a material  acceleration or worsening  thereof;  (vii) any decline in the
Dow Jones  Industrial  Average or the S&P 500  Composite  Index or the  American
Stock Exchange  Composite  Index by an amount in excess of 10% measured from the
close of  business  on April 9,  2001;  or (viii)  any  change in the  business,
condition  (financial  or  otherwise),income,  operations  or  prospects  of The
Peoples  Holding  Company and its  subsidiaries,  taken as a whole which, in the
sole judgment of The Peoples Holding Company, is or may be materially adverse to

  20

The Peoples Holding Company and its subsidiaries taken as a whole (the "Material
Adverse Change  Condition").  The Peoples Holding Company is not aware of any of
these events having occurred. In any event, The Peoples Holding Company reserves
the right (but is not  obligated),  subject to the rules and  regulations of the
SEC, to waive or amend on or before the  expiration  date the  Material  Adverse
Change Condition.

NO COMPETING OFFER CONDITION.  The Peoples Holding Company will not be obligated
to close our offer if,  after the date of this  document,  a tender or  exchange
offer with  respect  to some or all of the shares  (other  than our  offer),  or
merger  or  acquisition  proposal  for The  Peoples  Holding  Company  has  been
proposed, announced or made by another person or The Peoples Holding Company has
learned that: (i) any person or "group" (within the meaning of Section  13(d)(3)
of the 1934 Act) has  acquired or proposes to acquire  beneficial  ownership  of
more than 5% of the  outstanding  shares,  whether  through the  acquisition  of
stock,  the formation of a group,  the grant of any option or right or otherwise
(other than as disclosed  in a Schedule 13D or 13G (or an amendment  thereto) on
file  with the SEC on the date of this  document);  or (ii) any such  person  or
group  that on or prior to the date of this  document  had filed such a Schedule
with the SEC thereafter has acquired or has proposed to acquire, whether through
the acquisition of stock,  the formation of a group,  the grant of any option or
right or otherwise, beneficial ownership of additional shares representing 2% or
more of the  outstanding  shares;  or (iii)  any  person  or group  has  filed a
Notification and Report Form under the  Hart-Scott-Rodino  Antitrust Improvement
Act of 1976,  reflecting an intent to acquire The Peoples Holding Company or any
of the shares (the "No Competing Offer Condition").  The Peoples Holding Company
is not aware of any such  event  having  occurred.  In any  event,  The  Peoples
Holding Company reserves the right (but is not obligated),  subject to the rules
and  regulations of the SEC, to waive or amend prior to the expiration  date the
No Competing Offer Condition.

WAIVER OF CONDITIONS.  The Peoples Holding Company  reserves the absolute right,
prior  to the  expiration  date,  to  waive  these  conditions  (other  than the
Avoidance  of Rule  13e-3  Transaction  Condition  and the No Legal  Prohibition
Condition,  which  conditions are not  waivable).  Waiver or amendment of any of
these conditions may require an extension of the expiration date and our offer.

EFFECT OF FAILING TO SATISFY CONDITIONS.  If any of the conditions have not been
satisfied or waived by the  expiration  date, we may elect either to: (i) extend
the  expiration  date and our offer and  retain all  shares  tendered  until the
expiration  date of the offer as  extended,  subject to the right of a tendering
shareholder to withdraw his or her shares; (ii) waive the conditions (other than
the Avoidance of Rule 13e-3  Transaction  Condition and the No Legal Prohibition
Condition),  extend our offer for a period of ten business  days if our offer is
scheduled to expire prior thereto,  if such waiver constitutes a material change
in our offer, and thereafter  purchase all properly  tendered  shares;  or (iii)
terminate  our offer and  purchase  none of the shares  and return all  tendered
shares.  The Peoples  Holding  Company  will not accept for  purchase any shares
pursuant to our offer until such time as the  conditions  have been satisfied or
waived.

TENDERING OF SHARES BY OFFICERS AND DIRECTORS OF THE PEOPLES HOLDING COMPANY. We
have been advised by our  officers,  directors and  affiliates  that they do not
intend to tender any shares of Common Stock pursuant to this offer.

SECTION 14.  CANCELLATION, EXTENSION, TERMINATION AND AMENDMENT

We expressly  reserve the right to cancel our offer if any of the  conditions to
our  offer  are not  satisfied  by the  time the  offer  period  expires.  Those
shareholders  who tendered shares to The Peoples Holding  Company,  prior to the
expiration  date,  will receive  prompt return of their share  certificates  and
other related documentation from the depositary as soon as practicable following
the cancellation of our offer.

  21

We reserve the right, in our sole discretion, at any time and from time to time,
to  extend  the  period  of time  during  which  our  offer is open and to delay
acceptance for payment of, and payment for, any shares by giving oral or written
notice of such extension to the depositary and making a public  announcement  of
such extension.  Our reservation of the right to delay acceptance for payment is
limited by Rule 13e-4(f)(5)  promulgated  under the Exchange Act, which requires
that we must  pay the  consideration  offered  or  return  the  shares  tendered
promptly after termination or withdrawal of our offer.

We also reserve the right,  in our sole  discretion,  to terminate our offer and
not accept for payment or pay for any shares not previously accepted for payment
or paid for or, subject to applicable law, to postpone payment for shares if any
conditions to our offer fail to be satisfied by giving oral or written notice of
such  termination  or  postponement  to  the  depositary  and  making  a  public
announcement of such termination or  postponement.  Our reservation of the right
to delay  payment for shares  which we have  accepted for purchase is limited by
Rule 13e-4(f)(5) promulgated under the Exchange Act, which requires that we must
pay the  consideration  offered  or return the shares  tendered  promptly  after
termination or withdrawal of our offer.

Subject to compliance  with applicable law, we further reserve the right, in our
sole  discretion,  and  regardless  of  whether  or not  any of  the  events  or
conditions  described  in Section 13 have  occurred  or are deemed by us to have
occurred, to amend our offer in any respect,  including,  without limitation, by
decreasing or increasing  the  consideration  offered in our offer to holders of
shares or by decreasing  or increasing  the number of shares being sought in our
offer.  Amendments to our offer may be made at any time and from time to time by
public  announcement,  such  announcement,  in the case of an  extension,  to be
issued no later than 9:00 a.m.,  New York City time,  on the next  business  day
after the last previously scheduled or announced expiration date.

Without   limiting  the  manner  in  which  we  may  choose  to  make  a  public
announcement,  except as required by  applicable  law, we have no  obligation to
publish,  advertise or otherwise  communicate any such public announcement other
than by making a release  through  Business  Wire,  Dow Jones  News  Service  or
another comparable news service.

If we materially change the terms of our offer or the information concerning our
offer,  we will extend our offer to the extent  required  by Rules  13e-4(d)(2),
13e-4(e)(3) and 13e-4(f)(1)  promulgated under the Exchange Act. These rules and
certain related releases and interpretations of the SEC provide that the minimum
period during which a tender offer must remain open following  material  changes
in the terms of the tender  offer or  information  concerning  the tender  offer
(other than a change in price or a change in percentage  of  securities  sought)
will depend on the facts and circumstances,  including the relative  materiality
of such terms or information. If we take any of the following actions:

     o    increase or decrease the price to be paid for the shares,

     o    increase  the number of shares  being sought in our offer by more than
          2% of our outstanding Common Stock, or

     o    decrease the number of shares being sought in our offer, and our offer
          is scheduled to expire within 10 business days from the date notice of
          such  increase  or  decrease  is  first  published,  sent or  given to
          security  holders in the manner specified in this Section 14, then our
          offer  will be  extended  until the  expiration  of such  period of 10
          business days.

The Peoples  Holding  Company also  reserves the right to delay  acceptance  for
purchase of, or purchase  of, any shares  pursuant to our offer,  regardless  of
whether  such shares were  theretofore  accepted for  purchase,  and to amend or
terminate  our offer and not  accept for  purchase  or  purchase  any shares not
theretofore accepted for purchase, or purchased,  upon the failure of any of the
conditions  of our offer to be satisfied  or waived on or before the  expiration
date.

  22

Any cancellation,  extension, termination,  amendment or delay of our offer will
be followed as promptly as  practicable  by public  announcement  thereof,  such
announcement  in the case of an  extension to be issued no later than 9:00 a.m.,
New York City time,  on the next  business  day after the  previously  scheduled
expiration date. Without limiting the manner in which we may choose to make such
public announcement, we will not, unless otherwise required by rules of the SEC,
have any obligation to make any such public  announcement other than by making a
release to the Dow Jones News  Service.  If, prior to the  expiration  date,  we
increase the Purchase  Price offered to holders of The Peoples  Holding  Company
Common  Stock,  such increase will be applicable to all holders whose shares are
accepted for  purchase  pursuant to our offer and if, at the time notice of such
increase is first  published,  sent or given to holders of The  Peoples  Holding
Company Common Stock,  our offer is scheduled to expire at any time earlier than
the  expiration of a period ending on the tenth  business day from and including
the date that such notice is first so published,  sent or given,  our offer will
be extended  until the  expiration  of such  period of ten  business  days.  For
purposes  of our offer,  a  "business  day" means any day other than a Saturday,
Sunday or  federal  holiday  and  consists  of the time  period  from 12:01 a.m.
through 12:00 midnight, New York City time.

SECTION 15.  FEES AND EXPENSES

The Peoples  Holding  Company has retained The Peoples Bank and Trust Company to
act as the Information  Agent in connection with our offer. The Peoples Bank and
Trust Company may contact  shareholders by mail,  telephone,  facsimile,  telex,
telegraph  or  other  electronic  means,  and  may  request  brokers,   dealers,
commercial  banks,  trust  companies and other nominee  shareholders  to forward
materials relating to the offer to beneficial owners. The Peoples Bank and Trust
Company will receive  reasonable and customary  compensation  in connection with
our offer.

The Peoples Holding Company will pay the depositary,  The Peoples Bank and Trust
Company,  reasonable and customary  compensation  for its services in connection
with  our  offer,  plus  reimbursement  for  out-of-pocket  expenses,  and  will
indemnify the depositary against certain  liabilities and expenses in connection
therewith, including liabilities under the federal securities laws.

No fees or  commissions  will be payable by us to brokers,  dealers,  commercial
banks or trust companies  (other than fees to the parties  described  above) for
soliciting  tenders  of shares  under our  offer.  Shareholders  holding  shares
through  brokers or banks are urged to consult the brokers or banks to determine
whether  transaction costs are applicable if shareholders  tender shares through
such  brokers or banks and not  directly to the  depositary.  Brokers,  dealers,
commercials  banks and trust companies will be reimbursed by The Peoples Holding
Company  for  customary  mailing  and  handling  expenses  incurred  by  them in
forwarding material to their customers.

SECTION 16.  SOURCE AND AMOUNT OF FUNDS

The amount of funds required to purchase the maximum  number of shares  pursuant
to our offer is $13,999,176.  We expect the fees and expenses  applicable to our
offer to be approximately an additional $100,000.  We anticipate that all of the
funds necessary to pay such amounts will be  provided from dividends  paid to us
by our subsidiary, The Peoples Bank and Trust Company. The approximate amount of
dividends  expected to be paid by the Bank for this tender is  $13,999,176.  The
Bank  currently  has the ability to pay these  dividends to The Peoples  Holding
Company.

SECTION 17.  RECENT TRANSACTIONS IN OUR SHARES

Since April 17, 1999, we have  repurchased  approximately  259,760 shares of our
Common Stock with price  ranging from $18.375 to $32.75 in privately  negotiated
and open market transactions.  To our knowledge, there have been no transactions
in our Common Stock by any of our directors,  executive  officers or controlling
shareholders or by any executive  officer or director of any of our subsidiaries
within the 60 day period preceding the date of this document except as described
in Section 10.
  23

SECTION 18.  MISCELLANEOUS

No person has been directly or  indirectly  employed or retained by, or is to be
compensated  by,  The  Peoples  Holding   Company  to  make   solicitations   or
recommendations  in connection with our offer. We have not authorized  anyone to
give  any  information  or make  any  representation  about  our  offer  that is
different  from, or in addition to, that  contained,  or  incorporated,  in this
document or in the related letter of transmittal. Therefore, if anyone does give
you  information  of this  sort,  you  should  not  rely on it.  If you are in a
jurisdiction where our offer to purchase shares of Common Stock is unlawful,  or
if you are a person to whom it is unlawful  to direct  this type of offer,  then
the offer  presented in this  document  does not extend to you. The  information
contained in this document  speaks only as of the date of this  document  unless
the information specifically indicates that another date applies.

The Peoples Holding Company is not aware of any jurisdiction where the making of
our offer is not in  compliance  with  applicable  law. If The  Peoples  Holding
Company becomes aware of any  jurisdiction  where the making of our offer is not
in compliance  with any valid  applicable  law, The Peoples Holding Company will
make a good  faith  effort to comply  with such law.  If,  after such good faith
effort,  The Peoples Holding Company cannot comply with such law, our offer will
not be made to (nor will  tenders be accepted  from or on behalf of) the holders
of  shares  residing  in such  jurisdiction.  In any  jurisdiction  in which the
securities  or blue sky laws require this offer to be made by a licensed  broker
or dealer,  the offer is being made on The Peoples Holding  Company's  behalf by
Morgan Keegan & Company.

The depositary for our offer is: The Peoples Bank and Trust Company.

BY MAIL:

         The Peoples Bank and Trust Company
         Attention Trust Department
         P.O. Box 709
         Tupelo, MS 38802-9985

BY HAND OR OVERNIGHT DELIVERY:

         The Peoples Bank and Trust Company
         Attention Trust Department
         209 Troy Street
         Tupelo, MS 38802-0709

BY FACSIMILE TRANSMISSION:

         The Peoples Bank and Trust Company
         Attention Trust Department
         (662)680-1231
         CONFIRM BY TELEPHONE: (662)680-1210

THE INFORMATION AGENT FOR THE OFFER IS:

The Peoples Bank and Trust Company
P.O. Box 709
Tupelo, MS 38802-0709
1-800-492-0365
E-mail: teresam@thepeopleplace.com

ANY  QUESTIONS OR REQUESTS  FOR  ASSISTANCE  MAY BE DIRECTED TO THE  INFORMATION
AGENT AT THE ADDRESS AND PHONE NUMBER  LISTED  ABOVE.  REQUESTS  FOR  ADDITIONAL
COPIES OF THE OFFER TO PURCHASE,  THE LETTER OF TRANSMITTAL  OR OTHER  DOCUMENTS
RELATED TO THE OFFER MAY BE DIRECTED TO THE INFORMATION AGENT.

                              LETTER OF TRANSMITTAL

                        To Tender Shares of Common Stock
                                       of
                           The Peoples Holding Company
                        Pursuant to The Offer to Purchase
                              Dated April 16, 2001

        THE OFFER AND WITHDRAWAL RIGHTS WILL EXPIRE AT 5:00 P.M. NEW YORK
            CITY TIME ON MAY 15, 2001, UNLESS THE OFFER IS EXTENDED.

       The Depositary for the Offer is: The Peoples Bank and Trust Company

BY MAIL:
         The Peoples Bank and Trust Company
         Attention Trust Department
         P.O. Box 709
         Tupelo, MS 38802-9985

BY HAND OR OVERNIGHT DELIVERY:
         The Peoples Bank and Trust Company
         Attention Trust Department
         209 Troy Street
         Tupelo, MS 38802-0709

BY FACSIMILE TRANSMISSION:
         The Peoples Bank and Trust Company
         Attention Trust Department
         (662)680-1231
         CONFIRM BY TELEPHONE: (662)680-1210

            DESCRIPTION OF SHARES TENDERED (SEE INSTRUCTIONS 3 AND 4)

[   ]    Check here if any of the certificates  representing  Shares that you
         own have been lost, destroyed or stolen, See Instruction 15.

         Number  of  Shares  represented  by  lost,  destroyed  or  stolen
         certificates:_______________

Tendered Certificates:

         Name(s) and Address(es) of Registered Holder(s):

         __________________________________________________________________

         __________________________________________________________________

         __________________________________________________________________

         (Please use  pre-addressed  label or fill in as names appear on
         certificate(s)) (Attach Signed Additional List if Necessary)

                                    Number of
                                    Shares                    Number of
         Certificate                Represented by            Shares
         Number(s)*                 Certificate               Tendered**

         ___________                ______________            __________
         ___________                ______________            __________
         ___________                ______________            __________

                                    Total Number
                                    of Shares Tendered: ___________

Indicate in this box the order (by certificate  number) in which your shares are
to   be   purchased.   See   Instruction   3.***
      _________            _________            _________            _________
1st: |_________|     2nd: |_________|     3rd: |_________|     4th: |_________|

(Attach an additional signed list(s) if necessary).

     *    DOES NOT need to be  completed  if you are  tendering  your  shares by
          book-entry transfer.

     **   Unless otherwise  indicated,  all shares evidenced by each certificate
          will be deemed to have been tendered.

     ***  If you do not  designate  an order,  then in the  event  less than all
          shares  tendered  are  purchased  pursuant  to the Offer,  your shares
          tendered herewith will be selected for purchase by the Depositary.

This Letter of Transmittal  is for use in connection  with the Offer to Purchase
for Cash shares of Common Stock of The Peoples  Holding  Company dated April 16,
2001 (the  "Offer to  Purchase").  Only  shares of Common  Stock of The  Peoples
Holding  Company   ("Shares")  may  be  tendered  pursuant  to  this  Letter  of
Transmittal.  Delivery of this Letter of Transmittal  and all other documents to
an address, or transmission of instructions to a facsimile number, other than as
set forth above does not constitute a valid delivery.  Please read carefully the
entire Letter of Transmittal,  including the accompanying  instructions,  before
checking  any box below.  This Letter of  Transmittal  is to be used only if (a)
certificates  are  to be  forwarded  herewith  (or  such  certificates  will  be
delivered  pursuant to a Notice of Guaranteed  Delivery  previously  sent to the
Depositary)  or (b) delivery of shares is to be made by  book-entry  transfer to
the Depositary's account at The Depositary Trust Company (the "DTC") pursuant to
the procedures set forth in the Offer to Purchase.

If you desire to tender shares pursuant to the Offer and you cannot deliver your
Share  certificate(s)  (or you are  unable to  comply  with the  procedures  for
book-entry  transfer on a timely basis) and all other documents required by this
Letter of Transmittal  are delivered to the  Depositary  prior to the expiration
date, you may tender your shares according to the guaranteed delivery procedures
set  forth  in the  section  of the  Offer to  Purchase  titled  "Procedure  for
Tendering  Shares."  See  Instruction  2.  Delivery of documents to DTC does not
constitute delivery to the Depositary.

"Expiration  date" means 5:00 p.m., New York City time, on May 15, 2001,  unless
and until The  Peoples  Holding  Company,  in its sole  discretion,  extends the
Offer,  in which case the  "expiration  date"  means the latest time and date at
which the Offer, as extended, expires.

               PLEASE READ CAREFULLY THE ACCOMPANYING INSTRUCTIONS

                                    ODD LOTS

                              (SEE INSTRUCTION 13)

Complete  this section  only if you own, or are  tendering on behalf of a person
who owns,  beneficially or of record,  an aggregate of fewer than 100 shares and
you are tendering all of your shares.

The undersigned either (check one box):

[   ]  is the  beneficial  or record  owner of an  aggregate  of fewer  than 100
       shares, all of which are being tendered; or

[   ]  is a broker, dealer, commercial bank, trust company or other nominee that
      (a) is tendering for the beneficial owner(s), shares with respect to which
       it  is  the  record  holder, and (b) believes, based upon representations
       made  to it  by  the  beneficial  owner(s),  that  each  such  person  is
       the  beneficial  owner of an  aggregate of fewer than 100 shares  and  is
       tendering all of the shares.

                THIS BOX IS FOR USE BY ELIGIBLE INSTITUTIONS ONLY

[   ]  Check here if tendered shares are being delivered by book-entry  transfer
       to the Depositary's account at DTC and  complete  the  following  (Please
       Print):

          Name of Tendering Institution: _________________________

          DTC Account No.: _______________________________________

          Transaction Code No.:___________________________________

[   ]  Check here if tendered shares are being delivered pursuant to a Notice of
       Guaranteed Delivery  previously sent to the  Depositary  and complete the
       following (Please Print):

         Name(s) of Registered Holder(s):
         ____________________________________________________________________

         ____________________________________________________________________

         ____________________________________________________________________

         Date of Execution of Notice of Guaranteed Delivery:_________________

         Name of Institution that Guaranteed Delivery:
         ____________________________________________________________________

         DTC Account No.:____________________________________________________

         Transaction Code No.:_______________________________________________

                          TENDER AND POWER OF ATTORNEY

To The Peoples Bank and Trust Company:

The  undersigned  hereby tenders to The Peoples Holding  Company,  a Mississippi
corporation  ("Peoples"),  the above described shares of Common Stock of Peoples
(the "Shares"), at $23.00 per Share net to the seller in cash, without interest,
on the terms and conditions described in the Offer to Purchase,  dated April 16,
2001 (the "Offer to Purchase"),  receipt of which is hereby acknowledged, and in
this Letter of Transmittal  which, as amended or supplemented from time to time,
together constitute the "Offer." Subject to, and effective upon,  acceptance for
payment of the Shares  tendered in accordance  with the terms and subject to the
conditions  of the Offer,  including,  if the Offer is extended or amended,  the
terms and conditions of the extension or amendment,  the  undersigned  agrees to
sell, assign and transfer to, or upon the order of, Peoples all right, title and
interest in and to all Shares tendered and orders the registration of all Shares
if tendered by book-entry transfer and irrevocably  constitutes and appoints The
Peoples Bank and Trust Company (the  "Depositary")  as the true and lawful agent
and  attorney-in-fact  of the  undersigned  with respect to the Shares with full
knowledge that the Depositary also acts as the agent of Peoples, with full power
of substitution  (the power of attorney being deemed to be an irrevocable  power
coupled with an interest), to:

o    deliver  certificate(s)  for the Shares or transfer ownership of the Shares
     on the account books maintained by DTC, together, in either such case, with
     any and all accompanying evidences of transfer and authenticity, to or upon
     the order of Peoples upon receipt by the Depositary,  as the  undersigned's
     agent, of the Purchase Price (as defined below) for such Shares;

o    present  certificates  for the  Shares for  cancellation  and  transfer  on
     Peoples's books; and

o    receive  all  benefits  and  otherwise  exercise  all  rights  of legal and
     beneficial  ownership  of the  Shares  to which  the  undersigned  would be
     entitled by virtue of the  ownership  of such  Shares,  subject to the next
     paragraph, all in accordance with the terms of the Offer.

The undersigned hereby represents and warrants to Peoples that:

1.   the  undersigned has full power and authority to tender,  sell,  assign and
     transfer  the Shares  tendered  hereby  and when and to the extent  Peoples
     accepts the Shares for payment,  Peoples will acquire good,  marketable and
     unencumbered  title to the tendered Shares,  free and clear of all security
     interests, liens, restrictions,  charges,  encumbrances,  conditional sales
     agreements  or other  obligations  relating  to the sale or transfer of the
     Shares, and not subject to any adverse claims;

2.   the undersigned  understands  that tenders of Shares pursuant to any one of
     the  procedures  described in Section 3 of the Offer to Purchase and in the
     instructions   to  this  Letter  of   Transmittal   will   constitute   the
     undersigned's  acceptance  of  the  terms  and  conditions  of  the  Offer,
     including the undersigned's representation and warranty that

     (a)  the undersigned has a "net long position,"  within the meaning of Rule
          14e-4 promulgated under the Securities Exchange Act of 1934 (the "1934
          Act"),  in the Shares or  equivalent  securities at least equal to the
          Shares being tendered, and

     (b)  the tender of Shares complies with Rule14e-4 under the 1934 Act;

3.   the  undersigned  will,  upon request,  execute and deliver any  additional
     documents  deemed by the Depositary or Peoples to be necessary or desirable
     to complete the sale, assignment and transfer of the Shares tendered; and

4.   the undersigned has read, understands and agrees to all of the terms of the
     Offer.

The  undersigned  understands  that  Peoples's  acceptance  of  Shares  tendered
pursuant  to any one of the  procedures  described  in Section 3 of the Offer to
Purchase and in the instructions to this Letter of Transmittal will constitute a
binding agreement between the undersigned and Peoples upon the terms and subject
to the  conditions  of the Offer.  The  undersigned  acknowledges  that under no
circumstances will Peoples pay interest on the Purchase Price, including without
limitation, by reason of any delay in making payment.

All  authorities  conferred  or  agreed  to  be  conferred  by  this  Letter  of
Transmittal  will survive the death or  incapacity of the  undersigned,  and any
obligation  of  the  undersigned   will  be  binding  on  the  heirs,   personal
representatives,  executors,  administrators,  successors,  assigns, trustees in
bankruptcy and legal representatives of the undersigned. Except as stated in the
Offer to Purchase, this tender is irrevocable.

The name(s) and address(es) of the registered  holder(s)  should be printed,  if
they are not already printed above,  exactly as they appear on the  certificates
evidencing  Shares  tendered.  The  certificate  numbers,  the  number of Shares
evidenced  by the  certificates,  and the number of Shares that the  undersigned
wishes to tender  should be set forth in the  appropriate  boxes above,  and the
price  at which  the  shares  are  being  tendered  should  be set  forth in the
appropriate boxes below.

The undersigned  recognizes that, under the circumstances set forth in the Offer
to  Purchase,  Peoples  may  terminate  or amend the Offer or may  postpone  the
acceptance for payment of, or the payment for, Shares tendered or may accept for
payment  fewer  than  all  of  the  Shares  tendered  hereby.   The  undersigned
understands  that  certificate(s)  for any shares not tendered or not  purchased
will be  returned to the  undersigned  at the address  indicated  above,  unless
otherwise  indicated in the box entitled  "Special Payment  Instructions" or the
box entitled "Special Delivery Instructions" below. The undersigned acknowledges
that Peoples has no obligation,  pursuant to the "Special Payment  Instructions"
box,  to transfer  any  certificate  for Shares from the name of its  registered
holder(s),  or to order the  registration  or transfer of any Shares tendered by
book-entry transfer,  if Peoples does not purchase any of the Shares represented
by such certificate or tendered by such book-entry transfer.

The check for the  aggregate  net  Purchase  Price for the Shares  tendered  and
purchased  will be  issued  to the order of the  undersigned  and  mailed to the
address  indicated  above,  unless  otherwise  indicated  in the boxes  entitled
"Special Payment Instructions" or "Special Delivery Instructions" below.

                               CONDITIONAL TENDERS

                               (SEE INSTRUCTION 8)

You may  condition  the tender of your Shares upon the  purchase by Peoples of a
specified  minimum number of the Shares you are tendering  hereby (which minimum
number can be all of the Shares you are hereby  tendering),  all as described in
the Offer to Purchase. It is your responsibility to calculate the minimum number
of Shares  that must be  purchased  if any are  purchased,  and you are urged to
consult your own tax advisor before completing this section. Unless this box has
been  checked  and a minimum  number of Shares  specified,  your  tender will be
deemed unconditional.

[   ]   Minimum   number  of  Shares  that  must  be   purchased,   if  any  are
        purchased:_____________Shares.

If, because of proration, the minimum number of Shares that you designated above
will not be purchased,  Peoples may accept conditional tenders by random lot, if
necessary.  However,  to be eligible  for  purchase by random lot, you must have
tendered all your Shares and checked the following box.

[   ]   The tendered Shares represent all of the Shares held by me.

                          SPECIAL PAYMENT INSTRUCTIONS

Complete this box ONLY if you want certificate(s) for Shares not tendered or not
purchased and/or any check for the aggregate  Purchase Price to be issued in the
name of someone  other than you,  or if you want shares  that you  delivered  by
book-entry  transfer to be  returned  by credit to an account at the  book-entry
transfer facility other than the one designated earlier.

     Issue:  [   ] Check                [   ]  Certificate(s) to:

    Name:_________________________________________________________
    Address:______________________________________________________
    ______________________________________________________________
    ______________________________________________________________
                                       (Include Zip Code)
    Taxpayer Identification or Social Security Number (See Substitute Form W-9):
    ______________________________________________________________

[   ]  Credit shares  delivered by book-entry  transfer and not purchased to the
       account set forth below:

         Account Number:

                          SPECIAL DELIVERY INSTRUCTIONS

Complete this box only if you want certificate(s) for Shares not tendered or not
purchased and/or any check for the aggregate Purchase Price of Shares purchased,
issued in your name, to be mailed or sent to someone other than you or to you at
an address other than that shown under "Description of Shares" above.

    Mail:             [   ] Check       [   ]  Certificate(s) to:

    Name:_________________________________________________________
    Address:______________________________________________________
    ______________________________________________________________
    ______________________________________________________________
                                       (Include Zip Code)

Peoples has no obligation,  pursuant to the "Special Payment  Instructions,"  to
transfer any certificate  for Shares from the name of its registered  holder(s),
or to order the  registration  or transfer of any Shares  tendered by book-entry
transfer,  if Peoples does not purchase  any of the Shares  represented  by such
certificate or tendered by such book-entry transfer.

                                PLEASE SIGN HERE
             (PLEASE ALSO COMPLETE AND RETURN THE ENCLOSED FORM W-9)

(Must be signed by the  registered  holder(s)  exactly as name(s)  appear(s)  on
certificate(s) or on a security  position listing or by person(s)  authorized to
become  registered  holder(s) by certificate(s)  and documents  transmitted with
this  Letter  of   Transmittal.   If  signature  is  by  a  trustee,   executor,
administrator,  guardian, attorney-in-fact,  officer of a corporation or another
person acting in a fiduciary or representative  capacity,  please set forth full
title and see Instruction 5).

         ____________________________________________________________

         ____________________________________________________________

Dated: ____________________, 2001

Name(s):_____________________________________________________________
                                    (Please Print)
Capacity (full title):_______________________________________________
Address:_____________________________________________________________
         ____________________________________________________________
         ____________________________________________________________
                                    (Include Zip Code)
Areas Code(s) and Telephone Number(s):_______________________________

                            GUARANTEE OF SIGNATURE(S)
                           (SEE INSTRUCTIONS 1 AND 5)

Name of Firm:________________________________________________________

Authorized Signature:________________________________________________

Name(s):_____________________________________________________________
                                    (Please Print)
Title: ______________________________________________________________
Address:_____________________________________________________________
        _____________________________________________________________
        _____________________________________________________________
                           (Include Zip Code)
Area Code(s) and Telephone Number(s): _______________________________
Dated: ____________________, 2001

                              LETTER OF TRANSMITTAL

                                  INSTRUCTIONS

              FORMING PART OF THE TERMS AND CONDITIONS OF THE OFFER

1.   SIGNATURE GUARANTEE.  Depending on how the certificates for your shares are
     registered  and to whom you want payments or deliveries  made, you may need
     to have the  signatures  on this  Letter of  Transmittal  guaranteed  by an
     "Eligible Institution." An "Eligible Institution" is a bank, broker dealer,
     credit union,  savings association or other entity that is a member in good
     standing of the Securities  Transfer  Agents  Medallion  Program or a bank,
     broker,  dealer, credit union, savings association or other entity which is
     an  "eligible  guarantor  institution,"  as that  term is  defined  in Rule
     17Ad-15  promulgated under the Securities Exchange Act of 1934, as amended.
     No signature guarantee is required if either:

     o    this Letter of Transmittal  is signed by the  registered  holder(s) of
          the  shares  tendered  (which,   for  these  purposes,   includes  any
          participant in DTC whose name appears on a security  position  listing
          as the  owner of the  shares)  exactly  as the name of the  registered
          holder(s) appears on the certificate(s) for the shares and payment and
          delivery are to be made directly to the holder,  unless the holder has
          completed either of the boxes entitled "Special Payment  Instructions"
          or "Special Delivery Instructions" above; or

     o    the shares are tendered for the account of an Eligible Institution. In
          all  other  cases,  including  if you have  completed  either  the box
          entitled   "Special  Payment   Instructions"   or  "Special   Delivery
          Instructions"  above,  an  Eligible  Institution  must  guarantee  all
          signatures  on this Letter of  Transmittal.  You may also need to have
          any certificates you deliver endorsed or accompanied by a stock power,
          and the signatures on these  documents also may need to be guaranteed.
          See Instruction 5.

2.   DELIVERY OF LETTER OF TRANSMITTAL  AND  CERTIFICATES;  GUARANTEED  DELIVERY
     PROCEDURES. This Letter of Transmittal is to be used only if:

     o    certificates for shares are delivered with it to the Depositary, or

     o    the certificates will be delivered  pursuant to a Notice of Guaranteed
          Delivery previously sent to the Depositary, or

     o    a  tender  for  shares  is being  made  concurrently  pursuant  to the
          procedure for tender by book-entry  transfer set forth in Section 3 of
          the Offer to Purchase.

     Unless  shares are being  tendered by  book-entry  transfer,  as  described
     below, (a) a properly  completed and duly executed Letter of Transmittal or
     duly executed and manually signed  facsimile copy of it, in accordance with
     the  instructions  of the Letter of  Transmittal  (including  any  required
     signature guarantees),  (b) certificates for the shares being tendered, and
     (c) any other  documents  required by the Letter of  Transmittal  should be
     mailed or delivered to the Depositary at the appropriate  address set forth
     on the front page of this  document and must be received by the  Depositary
     prior to the expiration of the Offer. If certificates  are forwarded to the
     Depositary in multiple  deliveries,  a properly completed and duly executed
     Letter of Transmittal must accompany each such delivery.

     Shares  also  may  be  validly  tendered  pursuant  to the  procedures  for
     book-entry  transfer as described  in the Offer to  Purchase.  In order for
     shares to be validly tendered by book-entry  transfer,  the Depositary must
     receive,  prior to the expiration  date of the Offer,  (a)  confirmation of
     such delivery and (b) either a properly  completed  and executed  Letter of
     Transmittal (or manually signed facsimile thereof) or an Agent's Message if
     the tendering  shareholder has not delivered a Letter of  Transmittal,  and
     (c) all documents required by the Letter of Transmittal.  The term "Agent's
     Message"  means a  message,  transmitted  by DTC to, and  received  by, the
     Depositary  and forming a part of a Book-Entry  Confirmation,  which states
     that DTC has received an express acknowledgment from the participant in DTC
     tendering  the shares that such  participant  has received and agrees to be
     bound by the  terms  of the  Letter  of  Transmittal  and that The  Peoples
     Holding Company may enforce such agreement against the participant.  If you
     are tendering by book-entry transfer,  you must expressly  acknowledge that
     you have received and agreed to be bound by the Letter of  Transmittal  and
     that the Letter of Transmittal may be enforced against you.

     If your  Share  certificates  are not  immediately  available,  you  cannot
     deliver your shares and all other  required  documents to the Depositary or
     you cannot complete the procedure for delivery by book-entry transfer prior
     to the  expiration  date,  you  may  tender  your  shares  pursuant  to the
     guaranteed delivery procedure set forth in the Offer to Purchase.  Pursuant
     to such procedure:

     (i) such tender must be made by or through an Eligible Institution;

     (ii) a properly  completed and duly executed Notice of Guaranteed  Delivery
     substantially in the form provided by The Peoples Holding Company (with any
     required signature  guarantees) must be received by the Depositary prior to
     the expiration of the Offer; and

     (iii) the certificates  for all physically  delivered shares in proper form
     for transfer by delivery,  or a confirmation of a book-entry  transfer into
     the Depositary's account at DTC of all shares delivered electronically,  in
     each case  together with a properly  completed and duly executed  Letter of
     Transmittal  (or  manually  signed  facsimile  thereof)  with any  required
     signature guarantees (or, in the case of a book-entry transfer,  an Agent's
     Message),  and any other documents  required by this Letter of Transmittal,
     must be received by the  Depositary  within three  American  Stock Exchange
     trading  days  after  the date  the  Depositary  receives  such  Notice  of
     Guaranteed Delivery, all as provided in the Offer to Purchase.

     The method of delivery of all documents,  including Share certificates, the
     Letter of Transmittal and any other required documents,  is at the election
     and risk of the tendering shareholder, and the delivery will be deemed made
     only when  actually  received  by the  Depositary.  If delivery is by mail,
     registered  mail  with  return  receipt  requested,  properly  insured,  is
     recommended.  In all  cases,  sufficient  time  should be allowed to ensure
     timely delivery.

     Except as specifically  permitted by the Offer to Purchase,  no alternative
     or  contingent  tenders  will be  accepted.  By  executing  this  Letter of
     Transmittal  (or  facsimile  thereof),  you waive any right to receive  any
     notice of the acceptance for payment of the shares.

3.   INADEQUATE  SPACE.  If  the  space  provided  herein  is  inadequate,   the
     certificate  numbers or the number of shares should be listed on a separate
     signed schedule and attached to this Letter of Transmittal.

4.   PARTIAL TENDERS (NOT  APPLICABLE TO  SHAREHOLDERS  WHO TENDER BY BOOK-ENTRY
     TRANSFER).  If you wish to tender fewer than all the shares  represented by
     any certificate  delivered to the Depositary,  fill in the number of shares
     that  are to be  tendered  in  the  box  entitled  "Description  of  Shares
     Tendered." In such case, a new  certificate for the remainder of the shares
     represented by the old certificate  will be sent to you,  unless  otherwise
     provided  in  the  "Special  Payment  Instructions"  or  "Special  Delivery
     Instructions"  boxes  on  this  Letter  of  Transmittal,   as  promptly  as
     practicable  following the  expiration  or  termination  of the Offer.  All
     shares  represented by  certificates  delivered to the  Depositary  will be
     deemed to have been tendered unless otherwise indicated.

5.   SIGNATURE ON LETTER OF TRANSMITTAL. If this Letter of Transmittal is signed
     by the registered holder(s) of the shares tendered hereby, THE SIGNATURE(S)
     MUST CORRESPOND WITH THE NAME(S) AS WRITTEN ON THE FACE OF THE CERTIFICATES
     WITHOUT ALTERNATION, ENLARGEMENT OR ANY CHANGE WHATSOEVER.

     If any of the  shares  tendered  hereby  are held of  record by two or more
     persons,  all such persons must sign this Letter of Transmittal.  If any of
     the shares  tendered  hereby are registered in different names on different
     certificates,  it will be necessary  to  complete,  sign and submit as many
     separate  Letters  of  Transmittal  (or  facsimiles  thereof)  as there are
     different registrations of certificates.

     If this Letter of Transmittal is signed by the registered  holder(s)of  the
     shares tendered  hereby,  no endorsements of certificates or separate stock
     powers are required  unless payment of the Purchase Price is to be made to,
     or shares not tendered or not  purchased  are to be  registered in the name
     of,  any  person  other than the  registered  holder(s),  in which case the
     certificate(s)  evidencing the shares  tendered  hereby must be endorsed or
     accompanied by appropriate  stock powers,  in either case signed exactly as
     the name(s) of the  registered  holder(s)  appear(s) on such  certificates.
     Signatures on any such  certificates  or stock powers must be guaranteed by
     an Eligible Institution. See Instruction 1.

     If this  Letter  of  Transmittal  is  signed  by a  person  other  than the
     registered holder(s) of the shares tendered hereby, certificates evidencing
     the shares  tendered  hereby must be endorsed or accompanied by appropriate
     stock  powers,  in  either  case,  signed  exactly  as the  name(s)  of the
     registered holder(s) appear(s) on such certificate(s).  Signature(s) on any
     such  certificates  or  stock  powers  must be  guaranteed  by an  Eligible
     Institution.  See  Instruction  1. If this  Letter  of  Transmittal  or any
     certificate or stock power is signed by a trustee, executor, administrator,
     guardian, attorney-in-fact, officer of a corporation or other person acting
     in a fiduciary or representative  capacity,  such person should so indicate
     when  signing,  and proper  evidence  satisfactory  to The Peoples  Holding
     Company of the authority of such person so to act must be submitted.

6.   TRANSFER  TAXES.  The Peoples  Holding Company will pay or cause to be paid
     any stock  transfer  taxes  with  respect to the sale and  transfer  of any
     shares to it or its order pursuant to the Offer. If, however:

     o    payment of the  aggregate  Purchase  Price is to be made to any person
          other than the registered holder(s), or

     o    Shares not tendered or not  purchased are to be registered in the name
          of any person other than the registered holder(s), or

     o    if tendered shares are registered in the name of any person other than
          the person(s) signing this Letter of Transmittal,  then the Depositary
          will deduct the amount of any stock transfer taxes (whether imposed on
          the registered  holder(s),  such other person or otherwise) payable on
          account of the transfer to such person from the Purchase  Price unless
          satisfactory  evidence  of the  payment of such  taxes,  or  exemption
          therefrom, is submitted.  Except as provided in this Instruction 6, it
          will not be necessary to affix transfer tax stamps to the certificates
          representing shares tendered hereby.

7.   SPECIAL PAYMENT AND DELIVERY INSTRUCTIONS. If certificate(s) for shares not
     tendered or not purchased and/or check(s) are to be issued in the name of a
     person  other  than the  signer  of this  Letter of  Transmittal  or if the
     certificates  and/or checks are to be sent to someone other than the person
     signing this Letter of Transmittal or to the signer at a different address,
     the box entitled  "Special  Payment  Instructions"  and/or the box entitled
     "Special  Delivery  Instructions"  on this letter of transmittal  should be
     completed as applicable and  signatures  must be guaranteed as described in
     Instruction 1.

8.   CONDITIONAL TENDERS. As described in the Offer to Purchase,  you may tender
     shares  subject to the condition  that a specified  minimum  number of your
     shares  tendered  must be  purchased  if any such  shares so  tendered  are
     purchased.  Under certain  circumstances,  The Peoples  Holding Company may
     prorate the number of shares purchased pursuant to the Offer. In that case,
     the  Depositary  will  perform  a  preliminary  proration,  and any  shares
     tendered  pursuant to a conditional  tender for which the condition was not
     satisfied  will   automatically  be  regarded  as  withdrawn,   subject  to
     reinstatement  if  such  conditionally  tendered  shares  are  subsequently
     selected by lot for purchase.  If conditional tenders would otherwise be so
     regarded  as  withdrawn  and would  cause the total  number of shares to be
     purchased to fall below 604,312,  then, to the extent feasible, The Peoples
     Holding Company will select enough of such  conditional  tenders that would
     otherwise have been so withdrawn to permit The Peoples  Holding  Company to
     purchase  604,312  shares.  However,  to be eligible for purchase by random
     lot,  you  must  have  tendered  all your  shares  and  checked  the box so
     indicating.  In  selecting  among such  conditional  tenders,  The  Peoples
     Holding Company will select by lot and will limit its purchase in each case
     to the designated minimum number of shares to be purchased.

     All  tendered  shares will be deemed  unconditionally  tendered  unless the
     "Conditional  Tenders"  box is  completed.  As  discussed  in the  Offer to
     Purchase,   the  number  of  shares  to  be  purchased  from  a  particular
     shareholder  may  affect  the  tax  treatment  of  such  purchase  to  such
     shareholder  and  such  shareholder's  decision  whether  to  tender.  Each
     shareholder  is  urged to  consult  with  his or her own tax  advisor.  Any
     tendering  shareholder  wishing to make a conditional tender must calculate
     and appropriately indicate such minimum number of shares.

9.   TAXPAYER  IDENTIFICATION NUMBER,  SUBSTITUTE FORM W-9. Under federal income
     tax law, a  shareholder  who  receives a payment  pursuant  to the Offer is
     required to provide the Depositary with the shareholder's  correct Taxpayer
     Identification Number ("TIN") on Substitute Form W-9. A Substitute Form W-9
     appears on the page following the last page of these  instructions.  If the
     Depositary  is not provided the correct TIN,  payments that are made to the
     shareholder  or other payee with respect to the Offer may be subject to 31%
     backup withholding.

     Certain  shareholders  (including,  among others,  corporations and certain
     foreign  individuals)  are not subject to backup  withholding and reporting
     requirements.  In order for a foreign  individual  to  qualify as an exempt
     recipient, the shareholder must submit a completed IRS Form W-8 Certificate
     of Foreign Status or a Substitute Form W-8, signed under penalty of perjury
     attesting  to the  exempt  status.  This  form  may be  obtained  from  the
     Depositary.  See the enclosed  "Guidelines  for  Certification  of Taxpayer
     Identification Number on Substitute Form W-9" for more instructions.

     If the backup withholding  applies,  the Depositary is required to withhold
     31% of any  payments  made  to  the  shareholder  or  other  payee.  Backup
     withholding is not an additional tax. Rather,  the tax liability of persons
     subject  to  backup  withholding  will  be  reduced  by the  amount  of tax
     withheld,  provided that the required  information is given to the Internal
     Revenue  Service.  If  withholding  results in an  overpayment  of taxes, a
     refund may be obtained from the Internal Revenue Service.

     The  box  in  Part 3 of the  Substitute  Form  W-9  may be  checked  if the
     tendering  shareholder  or other  payee  has not been  issued a TIN and has
     applied  for a number or intends to apply for a number in the near  future.
     If the box in Part 3 is checked,  the  shareholder or other payee must also
     complete the  Certificate  of Awaiting  Taxpayer  Identification  Number in
     order to avoid backup withholding.  Notwithstanding  that the box in Part 3
     is checked and the Certificate of Awaiting Taxpayer  Identification  Number
     is also  completed,  the Depositary  will withhold 31% on all payments made
     prior to the time a properly  certified TIN is provided to the  Depositary.
     However,  the withheld  amount will be refunded to the shareholder if a TIN
     is provided to the Depositary within 60 days.

     The  shareholder  is required  to give the  Depositary  the TIN (e.g.,  his
     social  security  number or employer  identification  number) of the record
     owner of the shares or of the last  transferee  appearing on the  transfers
     attached to, or endorsed on, the shares.  If the shares are  registered  in
     more than one name or are not in the name of the actual owner,  consult the
     enclosed "Guidelines for Certification of Taxpayer Identification Number on
     Substitute Form W-9" for additional guidance on which number to report.

10.  WITHHOLDING FOR NON-U.S. SHAREHOLDERS.  Although a non-U.S. shareholder may
     be  exempt  from U.S.  federal  backup  withholding,  certain  payments  to
     non-U.S. shareholders are subject to U.S. withholding tax at a rate of 30%.
     Foreign  shareholders are urged to consult their tax advisors regarding the
     application of U.S. federal income tax withholding,  including  eligibility
     for a withholding tax reduction or exemption and refund procedures.

11.  REQUEST FOR ASSISTANCE OR ADDITIONAL  COPIES. Any questions or requests for
     assistance or for additional  copies of the Offer to Purchase,  this Letter
     of  Transmittal  or other  tender  offer  materials  may be directed to the
     Information  Agent,  The Peoples  Bank and Trust  Company at P.O.  Box 709,
     Tupelo, MS 38802-0709; 1-800-492-0365; E-mail: teresam@thepeopleplace.com ;
     and such copies will be furnished promptly at The Peoples Holding Company's
     expense.   Shareholders  may  also  contact  their  local  broker,  dealer,
     commercial  bank or trust company for documents  relating to, or assistance
     concerning, the Offer.

12.  IRREGULARITIES.  All  questions  as to the number of shares to be accepted,
     the  price  to  be  paid  therefor  and  the  validity,  form,  eligibility
     (including  time of receipt)  and  acceptance  for payment of any tender of
     shares will be  determined  by The  Peoples  Holding  Company,  in its sole
     discretion,  which  determination is final and binding on all parties.  The
     Peoples  Holding  Company  reserves the absolute right to reject any or all
     tenders it  determines  not to be in proper  form or the  acceptance  of or
     payment  for which may, in the  opinion of The  Peoples  Holding  Company's
     counsel,  be  unlawful.  The Peoples  Holding  Company  also  reserves  the
     absolute  right to waive any of the conditions of the Offer (other than the
     Avoidance of Rule 13e-3 Transaction  Condition and the No Legal Prohibition
     Condition) and any defect or  irregularity  in the tender of any particular
     shares or any particular shareholder. No tender of shares will be deemed to
     be validly  made until all  defects  or  irregularities  have been cured or
     waived.  None of The Peoples Holding  Company,  the Depositary or any other
     person  is  or  will  be  obligated  to  give  notice  of  any  defects  or
     irregularities  in tenders,  and none of them will incur any  liability for
     failure to give any such notice.

13.  ODD LOTS.  If The Peoples  Holding  Company is to  purchase  fewer than all
     shares properly tendered and not properly  withdrawn,  the shares purchased
     first will consist of all shares  properly  tendered by any shareholder who
     owns,  beneficially or of record, an aggregate of fewer than 100 shares and
     who tenders all of such shareholder's  shares.  This preference will not be
     available unless the section captioned "Odd Lots" is completed.

14.  ORDER OF  PURCHASE  IN EVENT OF  PRORATION.  As  described  in the Offer to
     Purchase,  you may  designate  the  order in which  your  shares  are to be
     purchased  in the event of  proration.  The order of  purchase  may  affect
     whether any capital  gain or loss  recognized  on the shares  purchased  is
     long-term or  short-term  (depending  on the holding  period for the shares
     purchased) and the amount of gain or loss recognized for federal income tax
     purposes.

15.  LOST, STOLEN OR DESTROYED CERTIFICATES. If your certificate(s) representing
     shares have been lost,  stolen or destroyed,  so indicate.  The  Depositary
     will send you  additional  documentation  that will need to be completed to
     effectively surrender such lost, stolen or destroyed certificates.

16.  WAIVER  OF  CONDITIONS.   The  conditions  set  forth  in  this  Letter  of
     Transmittal are for the sole benefit of The Peoples Holding Company and may
     be asserted prior to the  expiration  date by The Peoples  Holding  Company
     regardless of the  circumstances  giving rise to any such conditions or may
     be  waived at any one time and from  time to time  prior to the  expiration
     date in The Peoples Holding Company's sole discretion.

                                    IMPORTANT

This Letter of Transmittal (or a manually signed  facsimile of it) together with
share certificates or confirmation of book-entry transfer and all other required
documents  must be  received  by the  Depositary,  or the  Notice of  Guaranteed
Delivery must be received by the Depositary, prior to the expiration date of the
Offer.

Any  questions or requests  for  assistance  may be directed to the  Information
Agent at the  address  and  telephone  numbers  set forth  below.  Requests  for
additional  copies of the Offer to  Purchase  and Letter of  Transmittal  may be
directed to the Information Agent.

                     THE INFORMATION AGENT FOR THE OFFER IS:

The Peoples Bank and Trust Company
P.O. Box 709
Tupelo, MS 38802-0709
1-800-492-0365
E-mail: teresam@thepeopleplace.com

    DEPARTMENT OF THE TREASURY INTERNAL REVENUE SERVICE SUBSTITUTE FORM W-9:
          REQUEST FOR TAXPAYER IDENTIFICATION NUMBER AND CERTIFICATION

PAYER'S NAME:              The Peoples Bank and Trust Company

PART 1 - PLEASE PROVIDE YOUR TAX IDENTIFICATION NUMBER (TIN) IN THE BOX BELOW
                AND CERTIFY BY SIGNING AND DATING BELOW.

Social Security Number:    __ __ __-__ __-__ __ __ __

or  Employer Identification Number: __ __ - __ __ __ __ __ __ __

For payees exempt from backup  withholding,  please write "EXEMPT" here (see the
enclosed Guidelines):

PART 2 - CERTIFICATION - Under penalties of perjury,  I certify that:

(1)  the  number  shown on this form is my correct  TIN (or I am  waiting  for a
     number to be issued to me) and

(2)  I am not subject to backup  withholding either because (i) I am exempt from
     backup  withholding,  or (ii) I have  not  been  notified  by the  Internal
     Revenue Service ("IRS") that I am subject to backup withholding as a result
     of a failure  to report all  interest  or  dividends,  or (iii) the IRS has
     notified me that I am no longer subject to backup withholding. and

(3)  I am a U.S. person (including a U.S. resident alien).

PART 3 - Awaiting TIN [   ]

INSTRUCTIONS  - You  must  cross  out Part 2 item  (2)  above  if you have  been
notified by the IRS that you are currently subject to backup withholding because
of under reporting interest or dividends on your tax returns.  However, if after
being  notified  by the IRS that you were  subject  to  backup  withholding  you
received  another  notification  from the IRS that you are no longer  subject to
backup withholding, do not cross out such item (2).

SIGNATURE: ____________________________ DATE:______________

NOTE: FAILURE TO COMPLETE AND RETURN THIS FORM MAY RESULT IN BACKUP WITHHOLDING,
PLEASE   REVIEW  THE  ENCLOSED   GUIDELINES   FOR   CERTIFICATION   OF  TAXPAYER
IDENTIFICATION NUMBER ON SUBSTITUTE FORM W-9 FOR ADDITIONAL DETAILS .

YOU MUST COMPLETE THE FOLLOWING  CERTIFICATE IF YOU CHECKED THE BOX IN PART 3 OF
SUBSTITUTE FORM W-9.

             CERTIFICATE OF AWAITING TAXPAYER IDENTIFICATION NUMBER

I certify under the penalty of perjury that a taxpayer identification number has
not been issued to me and either (a) I have mailed an  application  to receive a
taxpayer  identification  number to the  appropriate  Internal  Revenue  Service
Center  or  Social  Security  Administration  Office  or (b) I intend to mail or
deliver an application in the near future. I understand that if I do not provide
a taxpayer  identification number within 60 days, 31% of all reportable payments
made to me thereafter will be withheld until I provide a number.

SIGNATURE:_________________________  DATE:________________

                    FORM OF GUIDELINES FOR SUBSTITUTE FORM W9
        GUIDELINES FOR CERTIFICATION OF TAXPAYER IDENTIFICATION NUMBER ON
                               SUBSTITUTE FORM W-9

Guidelines for Determining the Proper  Identification  Number to Give the Payer.
Social  Security  numbers  have  nine  digits  separated  by two  hyphens:  i.e.
000-00-0000.  Employer identification numbers have nine digits separated by only
one hyphen: i.e.  00-0000000.  The table below will help determine the number to
give    the    payer.

For this type of account:                 Give name and SSN of:
- -------------------------                 ---------------------
1.  Individual                            The individual

2.  Two or more individuals               The actual owner of the account or, if
    (joint account)                       combined  funds,  the first individual
                                          on the account. *

3.  Custodian account of a minor          The minor. Circle the minor's name and
    (Uniform Gift to Minors Act)          furnish  the minor's  social  security
                                          number.

4.  a.  The usual revocable savings       The grantor-trustee*
        trust account (grantor is also
        trustee)

    b.  So-called trust account that      The actual owner *
        is not a legal or valid trust
        under state law

5.  Sole proprietorship                   The  owner.  (You   must   show   your
                                          individual  name,  but  you  may  also
                                          enter your business or "DBA" name. You
                                          may use either  your SSN  or your  EIN
                                          (if you have one)).

                                          *Note: List first band circle the name
                                          of  the   person  whose   number   you
                                          furnish. If only one person on a joint
                                          account  has  an  SSN,  that  person's
                                          number must be furnished.

For this type of account:                 Give name and EIN of:
- -------------------------                 ---------------------
6.  Sole proprietorship                   The  owner.   (You   must  show   your
                                          individual  name,  but  you  may  also
                                          enter your business or "DBA" name. You
                                          may  use  either  your SSN or your EIN
                                          (if you have one)).

7.  A valid trust, estate, or             The  legal  entity   (List  first  and
    pension trust                         circle  the  name  of the legal trust,
                                          estate,  or  pension   trust.   Do not
                                          furnish the identifying number of  the
                                          personal  representative  or   trustee
                                          unless the  legal entity itself is not
                                          designated in the account title.)

8.  Corporate                             The corporation

9.  Association, club, religious,         The organization
    charitable, educational or
    other tax-exempt organization

10.  Partnership                          The partnership

11.  A broker or registered nominee       The broker or nominee

12.  Account with the Department of       The public entity
     Agriculture in the name of a
     public entity (such as a State or
     local government, school district,
     or prison) that receives
     agricultural program payments

Note: If no name is circled when there is more than one name, the number will be
considered to be that of the first name listed.

        GUIDELINES FOR CERTIFICATION OF TAXPAYER IDENTIFICATION NUMBER ON
                              SUBSTITUTE FORM W-9

                               OBTAINING A NUMBER

If you do not have a  taxpayer  identification  number  or you do not know  your
number,  obtain Form SS-5,  Application for a Social Security Card (for resident
individuals),  Form SS-4,  Application for Employer  Identification  Number (for
businesses and all other entities),  or Form W-7, Application for IRS Individual
Taxpayer  Identification Number (for alien individuals required to file U.S. tax
returns),  at an office of the Social  Security  Administration  or the Internal
Revenue Service.

To  complete  the   Substitute   Form  W-9,  if  you  do  not  have  a  taxpayer
identification number, check the box in Part 3 - Awaiting TIN, sign and date the
Form,  and give it to the  requester.  Generally,  you will then have 60 days to
obtain taxpayer  identification  number and furnish it to the requester.  If the
requester does not receive your taxpayer  identification  number within 60 days,
backup  withholding,  if  applicable,  will  begin and will  continue  until you
furnish your taxpayer identification number to the requester.

PAYEES AND PAYMENTS EXEMPT FROM BACKUP WITHHOLDING

Payments of dividends  and patronage  dividends not generally  subject to backup
withholding include the following:

o    Payments to nonresident aliens subject to withholding under Section 1441.

o    Payments to partnerships not engaged in a trade or business in the U.S. and
     which have at least one nonresident alien partner.

o    Payments  of  patronage  dividends  not paid in money.

o    Payments  made  by  certain   foreign   organizations.

o    Section 404(k) distributions made by an ESOP.

Payments of interest not  generally  subject to backup  withholding  include the
following:

o    Payments of interest on obligations issued by individuals. Note: You may be
     subject to backup  withholding if this interest is $600 or more and is paid
     in the course of the payer's  trade or business  and you have not  provided
     your correct taxpayer identification number to the payer.

o    Payments of tax-exempt interest (including  exempt-interest dividends under
     Section 852).

o    Payments described in Section 6049(b)(5) to non-resident aliens.

o    Payments on tax-free covenant bonds under Section 1451.

o    Payments made by certain foreign organizations.

o    Mortgage or student loan interest paid to you.

Set forth below is a list of payees that are exempt from backup withholding with
respect to all or certain  types of payments.  For interest and  dividends,  all
listed payees are exempt except the payee in item (9). For broker  transactions,
all payees listed in items (1) through (13) and any person  registered under the
Investment  Advisors Act of 1940 who regularly  acts as a broker is exempt.  For
payments  subject to reporting under Sections 6041 and 6041A,  the payees listed
in items (1) through (7) are generally exempt. For barter exchange  transactions
and patronage dividends,  the payees listed in items (1) through (5) are exempt.

To avoid possible  erroneous backup  withholding,  exempt payees described above
should furnish their taxpayer identification number, check the Exempt Payee Box,
and return the  Substitute  Form W-9 to the payer.  Certain  payments other than
interest,   dividends,  and  patronage  dividends,   that  are  not  subject  to
information  reporting are also not subject to backup withholding.  For details,
SEE SECTIONS  6041,  6041A,  6042,  6044,  6045,  6049,  6050A and 6050N and the
regulations promulgated thereunder.

(1)  An  organization  exempt  from tax  under  Section  501(a),  any IRA,  or a
     custodial  account  under  Section  403(b)(7) if the account  satisfies the
     requirements of Section 401(f)(2).

(2)  The United States or any of its agencies or instrumentalities.

(3)  A state, the District of Columbia, a possession of United States, or any or
     their subdivisions or instrumentalities.

(4)  A foreign  government  or any if its  political  subdivisions,  agencies or
     instrumentalities.

(5)  An international organization or any of its agencies or instrumentalities.

(6)  A corporation.

(7)  A foreign central bank of issue.

(8)  A dealer in securities or commodities  registered in the U.S., the District
     of Columbia, or a possession of the U.S.

(9)  A futures commission merchant registered with the Commodity Futures Trading
     Commission.

(10) A real estate investment trust.

(11) An entity registered at all times under the Investment Company Act of 1940.

(12) A common trust fund operated by a bank under Section 584(a).

(13) A financial institution.

(14) A middleman known in the investment community as a nominee or custodian.

(15) A trust exempt from tax under Section 664 or described in Section 4947.

PRIVACY ACT  NOTICE.  - Section  6109  requires  most  recipients  of  dividend,
interest,  or other payments to give taxpayer  identification  numbers to payers
who  must  report  the  payments  to the  IRS.  The IRS  uses  the  numbers  for
identification  purposes.  Payers  must be  given  the  numbers  whether  or not
recipients are required to file tax returns.  Payers must generally withhold 31%
of taxable  interest,  dividend,  and certain other payments to a payee who does
not furnish a taxpayer  identification  number to a payer. Certain penalties may
also  apply.   PENALTIES:   (1)   PENALTY   FOR  FAILURE  TO  FURNISH   TAXPAYER
IDENTIFICATION  NUMBER.  - If you fail to furnish your  taxpayer  identification
number to a requester, you are subject to a penalty of $50 for each such failure
unless your failure is due to reasonable cause and not to willful  neglect.  (2)
CIVIL PENALTY FOR FALSE INFORMATION WITH RESPECT TO WITHHOLDING. - If you make a
false  statement  with no  reasonable  basis which  results in no  imposition of
backup  withholding,  you are subject to a penalty of $500. (3) CRIMINAL PENALTY
FOR FALSIFYING  INFORMATION.-  Falsifying  certifications  or  affirmations  may
subject you to criminal penalties including fines and/or imprisonment.

FOR  ADDITIONAL  INFORMATION  CONSULT YOUR TAX ADVISER OR THE  INTERNAL  REVENUE
SERVICE

                          NOTICE OF GUARANTEED DELIVERY
                          OF SHARES OF COMMON STOCK OF

                           THE PEOPLES HOLDING COMPANY

             PURSUANT TO THE OFFER TO PURCHASE DATED APRIL 16, 2001

This Notice of Guaranteed  Delivery,  or one  substantially  in the form hereof,
must be used to accept the Offer (as defined below) if:

o    certificates  evidencing shares of Common Stock, $5.00 par value per share,
     (the "Shares") of The Peoples Holding  Company,  a Mississippi  corporation
     ("Peoples"),  are not  immediately  available or cannot be delivered to The
     Peoples Bank and Trust Company (the  "Depositary")  prior to the expiration
     date,

o    the procedure for  book-entry  transfer  described in the Offer to Purchase
     dated  April  16,  2001 and the  related  Letter of  Transmittal  cannot be
     completed on a timely basis, or

o    time will not permit all required documents, including a properly completed
     and duly executed Letter of Transmittal (or a manually signed  facsimile of
     the Letter of Transmittal),  an Agent's Message in the case of a book-entry
     transfer  (as  defined in the Offer to  Purchase),  and any other  required
     documents, to reach the Depositary prior to the expiration date (as defined
     in the Offer to Purchase).

The Offer to  Purchase  and the  related  Letter of  Transmittal,  as amended or
supplemented from time to time, together constitute the "Offer."

          TO:     The Peoples Bank and Trust Company

BY MAIL:
         The Peoples Bank and Trust Company
         Attention Trust Department
         P.O. Box 709
         Tupelo, MS 38802-9985

BY HAND OR OVERNIGHT DELIVERY:
         The Peoples Bank and Trust Company
         Attention Trust Department
         209 Troy Street
         Tupelo, MS 38802-0709

BY FACSIMILE TRANSMISSION:
         The Peoples Bank and Trust Company
         Attention Trust Department
         (662)680-1231
         CONFIRM BY TELEPHONE: (662)680-1210

This Notice of Guaranteed Delivery, properly completed and duly executed, may be
delivered by hand,  mail,  overnight  courier or facsimile  transmission  to the
Depositary. SEE SECTION 3 of the Offer to Purchase.

For this notice to be validly  delivered,  it must be received by the Depositary
at one of the above addresses before the Offer expires.  Delivery of this notice
to another address will not constitute a valid delivery.  Deliveries to Peoples,
the information agent or the book-entry  transfer facility will not be forwarded
to the Depositary and will not constitute a valid delivery.

This form is not to be used to guarantee signatures.  If a signature on a Letter
of  Transmittal  is required to be  guaranteed  by an Eligible  Institution  (as
defined in the Letter of  Transmittal)  under the  instructions to the Letter of
Transmittal,  such  signature  guarantee  must  appear in the  applicable  space
provided in the signature box on the Letter of Transmittal.

                                    * * * * *

By signing  this  Notice of  Guaranteed  Delivery,  you tender to Peoples at the
Purchase Price of $23.00 per share, upon the terms and subject to the conditions
described  in the Offer to  Purchase  and the  related  Letter  of  Transmittal,
receipt of which you hereby  acknowledge,  the number of shares  specified below
pursuant to the  guaranteed  delivery  procedure  described  in Section 3 of the
Offer to Purchase.

You hereby tender to Peoples,  upon the terms and subject to the  conditions set
forth in the Offer to Purchase and the related Letter of Transmittal, receipt of
which is hereby  acknowledged,  the number of shares of Common  Stock of Peoples
listed below,  pursuant to the  guaranteed  delivery  procedure set forth in the
Offer to Purchase.

           NUMBER OF SHARES TENDERED: _______________________________

                                    ODD LOTS
                (SEE INSTRUCTION 13 TO THE LETTER OF TRANSMITTAL)

Complete  this section  only if you own, or are  tendering on behalf of a person
who owns,  beneficially or of record,  an aggregate of fewer than 100 Shares and
you are tendering all of your Shares.

The undersigned either (check one box):

[   ]  is the  beneficial  or record  owner of an  aggregate  of fewer  than 100
       Shares, all of which are being tendered; or

[   ]  is a broker, dealer, commercial bank, trust company or other nominee that
      (a) is tendering for the beneficial owner(s), Shares with respect to which
       the undersigned is  the record  holder,  and  (b)  believes,  based  upon
       representations  made to it by the  beneficial owner(s), that  each  such
       person is the beneficial owner of an  aggregate of fewer  than 100 Shares
       and is tendering all of the Shares.

                               CONDITIONAL TENDERS
                (SEE INSTRUCTION 8 OF THE LETTER OF TRANSMITTAL)

You may  condition  the tender of your Shares upon the  purchase by Peoples of a
specified  minimum number of the Shares you are tendering  hereby (which minimum
number can be all of the Shares you are hereby  tendering),  all as described in
the Offer to Purchase. It is your responsibility to calculate the minimum number
of Shares  that must be  purchased  if any are  purchased,  and you are urged to
consult your own tax advisor before completing this section. Unless this box has
been  checked  and a minimum  number of Shares  specified,  your  tender will be
deemed unconditional.

[   ]   Minimum   number  of  Shares  that  must  be   purchased,   if  any  are
        purchased:_____________ Shares.

If, because of proration, the minimum number of Shares that you designated above
will not be purchased,  Peoples may accept conditional tenders by random lot, if
necessary.  However,  to be eligible  for  purchase by random lot, you must have
tendered all your Shares and checked the following box.

[   ]   The tendered Shares represent all of the Shares held by me.

SIGNATURES

Signatures:

         __________________________________________________

         __________________________________________________

Name(s) of Record Holders(s): ________________________________________________
                                         (please type or print)

Certificate Nos.: ____________________________________________________________

Address:______________________________________________________________________

______________________________________________________________________________

______________________________________________________________________________
                               (Include Zip Code)

Daytime Area Code and Telephone Number:_______________________________________

Date:_________________________________________________________________________

If Shares will be delivered by book-entry transfer, provide the Account Number.

Account Number:_______________________________________________________________

                              GUARANTEE OF DELIVERY

                    (Not to be Used for Signature Guarantee)

The undersigned,  a bank, broker dealer,  credit union,  savings  association or
other entity that is a member in good standing of the Securities Transfer Agents
Medallion Program or a bank, broker,  dealer,  credit union, savings association
or other entity which is an "eligible  guarantor  institution,"  as that term is
defined in Rule 17Ad-15  promulgated under the Securities  Exchange Act of 1934,
as amended,  (each of the foregoing  constituting  an ("Eligible  Institution"),
guarantees delivery to the Depositary of the Shares tendered, in proper form for
transfer,  or a  confirmation  that the  Shares  tendered  have  been  delivered
pursuant to the  procedure  for  book-entry  transfer  described in the Offer to
Purchase into the Depositary's  account at the book-entry transfer facility,  in
each case  together with a properly  completed  and duly  executed  Letter(s) of
Transmittal (or a facsimile(s)  thereof), or an Agent's Message in the case of a
book-entry transfer, and any other required documents, all within three American
Stock Exchange  trading days after the date of receipt by the Depositary of this
Notice of Guaranteed Delivery.

The Eligible Institution that completes this form must communicate the guarantee
to the Depositary and must deliver the Letter of  Transmittal  and  certificates
for Shares to the Depositary  within the time set forth above.  Failure to do so
could result in a financial loss to such Eligible Institution.

Name of Firm: ___________________________________________

Authorized Signature:____________________________________

Name:____________________________________________________
                   (Please Print)
Title:___________________________________________________

Address:_________________________________________________
        _________________________________________________
        _________________________________________________

Areas Code(s) and Telephone Number(s):___________________

Dated: ____________________, 2001

NOTE: DO NOT SEND SHARE CERTIFICATES WITH THIS FORM. SHARE  CERTIFICATES  SHOULD
BE SENT WITH THE LETTER OF TRANSMITTAL.

                       FORM OF LETTER TO BROKERS, DEALERS

[The Peoples Holding Company, inc.  Letterhead]

April 16, 2001

     Re:  Offer  to  Purchase  for Cash by The  Peoples  Holding  Company  Up to
          604,312  shares of its Common Stock at a Purchase  Price of $23.00 Per
          Share.  The offer,  proration  period and withdrawal  rights expire at
          5:00 p.m.,  New York City time,  on May 15, 2001,  unless the offer is
          extended.

To Brokers, Dealers, Commercial Banks, Trust Companies and Other Nominees:

We are enclosing the material  listed below relating to our offer to purchase up
to 604,312 shares of our Common Stock at a purchase price of $23.00,  net to the
seller in cash, without interest,  as specified by tendering  shareholders.  Our
offer is being made on the terms and subject to the  conditions set forth in the
Offer to Purchase,  dated April 16, 2001,  and the related Letter of Transmittal
(as amended or supplemented from time to time).

Only common shares  validly  tendered at the purchase  price and not  withdrawn,
will be purchased. However, because of the proration provisions described in the
Offer to Purchase,  all Common shares tendered may not be purchased if more than
604,312  Common  shares are  tendered.  All shares  tendered and not  purchased,
including  shares not purchased  because of proration or the conditional  tender
procedures,  will be returned at The Peoples Holding  Company's expense promptly
following the expiration date.

We reserve the right, in our sole discretion,  purchase additional shares in the
offer up to 2% of the outstanding shares of Common Stock,  subject to applicable
legal requirements.

As described in the Offer to Purchase,  if more than 604,312  Common shares have
been validly tendered and not withdrawn,  we will purchase validly tendered (and
not withdrawn) common shares in the following order of priority:

     o    First,  we will purchase shares from all holders of "odd lots" of less
          than 100 shares who have properly  tendered all of their shares at the
          purchase  price prior to the  expiration  date and  completed the "Odd
          Lots" box in the Letter of  Transmittal  and,  if  applicable,  in the
          Notice of Guaranteed Delivery;

     o    Second,  we  will  purchase  all  shares  conditionally   tendered  in
          accordance  with  Section  5 of the  Offer to  Purchase  for which the
          condition  was satisfied  without  regard to the procedure in the next
          bulleted   clause,   and  all  other  shares  tendered   properly  and
          unconditionally on a pro rata basis if necessary; and

     o    Finally, if necessary to permit us to purchase 604,312 shares,  shares
          conditionally  tendered  (for which the  condition  was not  initially
          satisfied)  and not withdrawn  prior to the expiration  date,  will be
          selected  for purchase by random lot in  accordance  with the Offer to
          Purchase - provided  that,  to be eligible for purchase by random lot,
          all common  shares owned by the tendering  shareholder  must have been
          properly  tendered and the  appropriate  box must have been checked in
          the  "Conditional  Tenders" box in the Letter of  Transmittal  and, if
          applicable, in the Notice of Guaranteed Delivery.

For your information and for forwarding to your clients for whom you hold shares
registered in your name (or in the name of your  nominee),  we are enclosing the
following documents:

     1.   The Offer to Purchase;

     2.   The Letter of Transmittal for your use and for the information of your
          clients(together  with  accompanying  instructions and Substitute Form
          W-9);

     3.   A  letter  to The  Peoples  Holding  Company's  shareholders  from the
          President and Chief Executive Officer of The Peoples Holding Company;

     4.   A Notice of Guaranteed  Delivery to be used to accept the Offer if the
          shares and all other  required  documents  cannot be  delivered to the
          Depositary by the expiration date;

     5.   A letter that may be sent to your clients for whose  accounts you hold
          shares  registered in your name or in the name of your  nominee,  with
          space provided for obtaining such clients' instructions with regard to
          the offer.

Your prompt action is requested. We urge you to contact your clients as promptly
as possible.  The offer,  proration period and withdrawal  rights expire at 5:00
p.m., New York City time, on May 15, 2001, unless the offer is extended.

We will not pay any fees or  commissions  to any broker,  dealer or other person
for soliciting  tenders of shares  pursuant to the Offer.  We will, upon written
request,  reimburse brokers,  dealers,  commercial banks and trust companies for
reasonable  and  customary  handling  and mailing  expenses  incurred by them in
forwarding  materials  related to the offer to their customers.  We will pay all
stock transfer taxes applicable to our purchase of Shares pursuant to the offer,
except as otherwise  provided in the Offer to Purchase and  Instruction 6 of the
Letter of Transmittal.

Any questions or requests for  assistance  or additional  copies of the enclosed
materials  should be  directed to The Peoples  Bank and Trust  Company.  You may
reach The Peoples Bank and Trust  Company at the address on the last page of the
Offer to Purchase, or by calling 1-800-492-0365.

Thank you for your consideration.

                                                Sincerely,

                                                /S/ E.  Robinson McGraw
                                                -----------------------
                                                  E.  Robinson McGraw
                                          President and Chief Executive Officer

Nothing  contained  herein or in the enclosed  documents shall constitute you or
any person  the agent of The  Peoples  Holding  Company  or the  Depositary,  or
authorize  you or any other person to use any document or make any  statement on
behalf  of any of them in  connection  with  the  tender  offer  other  than the
documents enclosed herewith and the statements contained herein.

                  FORM OF LETTER TO BE USED BY BROKERS, DEALERS

April 16, 2001

Re:  Offer to Purchase for Cash Made by The Peoples  Holding Company for 604,312
     shares of its Common  Stock.  The offer,  proration  period and  withdrawal
     rights expire at 5:00 p.m., New York City time, on May 15, 2001, unless the
     offer is extended.

To Our Clients:

Enclosed for your consideration are the Offer to Purchase,  dated April 16, 2001
(the "Offer to Purchase")  and the related  Letter of  Transmittal in connection
with  the  offer by The  Peoples  Holding  Company,  a  Mississippi  corporation
("Peoples"),  to purchase up to 604,312 shares of its Common Stock,  at purchase
price of $23.00  per  share,  net to the seller in cash,  without  interest,  as
specified  by tendering  shareholders.  The offer is being made on the terms and
subject to the  conditions  set forth in the Offer to Purchase and the Letter of
Transmittal  (as  amended  or  supplemented  from time to time).  Also  enclosed
herewith are certain other materials related to the Offer, including a letter to
shareholders  from E. Robinson McGraw,  President and Chief Executive Officer of
Peoples.

Only Common  shares  validly  tendered  and not  withdrawn,  will be  purchased.
However,  because of the proration  provisions  described in Peoples's  Offer to
Purchase,  all Common shares  tendered may not be purchased if more than 604,312
Common shares are tendered.  All shares  tendered and not  purchased,  including
shares not purchased because of proration or the conditional  tender procedures,
will be returned at Peoples's expense promptly following the expiration date.

Peoples  reserves  the right,  in its sole  discretion,  to purchase  additional
shares in the offer up to 2% of the outstanding shares of Common Stock,  subject
to applicable legal requirements.

As described in Peoples's Offer to Purchase,  if more than 604,312 common shares
have been validly  tendered and not  withdrawn,  Peoples will  purchase  validly
tendered (and not withdrawn) Common shares in the following order of priority:

o    First,  Peoples will purchase shares from all holders of "odd lots" of less
     than 100 shares who have properly tendered all of their shares prior to the
     expiration  date  and  completed  the  "Odd  Lots"  box  in the  Letter  of
     Transmittal and, if applicable, in the Notice of Guaranteed Delivery;

o    Second,   Peoples  will  purchase  all  shares  conditionally  tendered  in
     accordance  with Section 5 of the Offer to Purchase for which the condition
     was satisfied  without regard to the procedure in the next bulleted clause,
     and all other shares tendered  properly and  unconditionally  on a pro rata
     basis if necessary; and

o    Finally, if necessary to permit Peoples to purchase 604,312 shares,  shares
     conditionally   tendered   (for  which  the  condition  was  not  initially
     satisfied) and not withdrawn prior to the expiration date, will be selected
     for  purchase  by random  lot in  accordance  with the Offer to  Purchase -
     provided that, to be eligible for purchase by random lot, all Common shares
     owned by the tendering shareholder must have been properly tendered and the
     appropriate box must have been checked in the "Conditional  Tenders" box in
     the Letter of Transmittal  and, if applicable,  in the Notice of Guaranteed
     Delivery.

A tender of your shares can only be made by us pursuant to your  instructions as
we are the  holder  of record of shares  held for your  account.  The  Letter of
Transmittal is furnished to you for your  information only and cannot be used by
you to tender shares held by us for your account.

Please  instruct us as to whether you wish us to tender any or all of the Shares
held by us for your account,  upon the terms and subject to the  conditions  set

forth in the Offer to Purchase and the Letter of Transmittal.  Your attention is
directed to the following:

o    The offer is for up to 604,312  shares of Common  Stock.  Peoples  may, but
     will  not  be  obligated  to  purchase  additional  shares  up to 2% of the
     outstanding  Common Stock,  subject to applicable legal  requirements.  The
     offer is not  conditioned on any minimum  number of shares being  tendered.
     The offer is, however, subject to certain other conditions set forth in the
     Offer to Purchase.

o    The offer, proration period and withdrawal rights will expire at 5:00 p.m.,
     New York City time,  on May 15, 2001,  unless the offer is  extended.  Your
     instructions should be forwarded to us in ample time to permit us to submit
     a tender on your behalf.

o    Tendering  shareholders will not be obligated to pay brokerage  commissions
     or  solicitation  fees  on  Peoples's  purchase  of  shares  in the  offer.
     Shareholders,  however,  may incur fees  associated  with the  tendering of
     shares held in custodial or other beneficiary accounts.  Any stock transfer
     taxes applicable to the purchase of shares by Peoples pursuant to the offer
     will be paid by  Peoples,  except  as  otherwise  provided  in the Offer to
     Purchase and Instruction 6 of the Letter of Transmittal.

o    You may  instruct  us to  tender  shares  on  your  behalf  subject  to the
     condition  that a  specified  minimum  number  of your  tendered  shares be
     purchased if any such tendered  shares are  purchased,  as described in the
     Offer to Purchase.  It is your  responsibility  to  calculate  such minimum
     number and you are urged to consult a tax advisor. If you wish us to make a
     conditional  tender on your behalf,  you must  complete  the box  captioned
     "Conditional  Tenders" in the  Instruction  Form. If, because of proration,
     the minimum  number of shares  that you  specified  will not be  purchased,
     Peoples  may  accept  conditional  tenders  by random  lot,  if  necessary.
     However,  to be eligible for purchase by random lot, you must have tendered
     all your shares and check the box so  indicating.  In selecting  among such
     conditional tenders, Peoples will select by lot and will limit its purchase
     in each case to the designated minimum number of shares to be purchased.

o    If you are an odd lot  holder,  meaning  that  you own  beneficially  or of
     record fewer than 100 shares,  and you instruct us to tender on your behalf
     all such shares at the purchase price before the expiration  date and check
     the box captioned "Odd Lots" in the attached instruction form, Peoples will
     accept all such  shares  for  purchase  before  proration,  if any,  of the
     purchase of other shares properly tendered and not properly withdrawn.

o    Peoples's board of directors has approved the offer. However, you must make
     your own decision  whether to tender  shares and, if so, how many shares to
     tender  and the price or prices at which  you are  tendering  your  shares.
     Neither we,  Peoples,  its board of directors,  nor the  Information  Agent
     makes any  recommendation  to any  shareholder  as to  whether to tender or
     refrain from tendering shares.

If you  wish to have us  tender  any or all of your  shares  held by us for your
account upon the terms and subject to the  conditions  set forth in the Offer to
Purchase, please so instruct us by completing, executing and returning to us the
attached  Instruction  Form.  An envelope to return  your  instruction  to us is
enclosed.  If you  authorize  tender of your  shares,  all such  shares  will be
tendered unless otherwise  specified on the Instruction  Form. Your instructions
should be  forwarded to us in ample time to permit us to submit a tender on your
behalf prior to the expiration of the offer.

The tender offer is being made solely under the Offer to Purchase and the Letter
of  Transmittal  and is being made to all  holders of Common  Stock.  The tender
offer is not being made to, nor will  tenders be accepted  from or on behalf of,
holders of shares residing in any jurisdiction in which the making of the tender
offer or acceptance thereof would not be in compliance with the securities, blue
sky or other laws of such jurisdiction.

                                INSTRUCTION FORM

                           Offer to Purchase for Cash

                       Made by The Peoples Holding Company

                               for 604,312 Shares

                               of its Common Stock

By signing this Instruction  Form you acknowledge  receipt of our letter and the
enclosed  Offer to  Purchase,  dated April 16, 2001,  and the related  Letter of
Transmittal  in  connection  with  the  offer  by The  Peoples  Holding  Company
("Peoples") to purchase up to 604,312 shares of its Common Stock ("Shares") at a
price of $23.00 per Share, net to the seller in cash (the "Offer"), as specified
by tendering  shareholders,  upon the terms and subject to the conditions of the
Offer.  Peoples may, but will not be obligated to, purchase additional shares up
to 2% of the  outstanding  shares of Common Stock,  subject to applicable  legal
requirements.

This will instruct you to tender to Peoples the number of Shares indicated below
(or, if no number is indicated  below,  all Shares) that are held by you for the
account of the  undersigned,  at the price per Share indicated  below,  upon the
terms and subject to the conditions of the Offer.

                                 SHARES TENDERED

[   ]  If fewer than all Shares are to be  tendered,  please  check this box and
       indicate  below  the  aggregate  number of  Shares  to be tendered by us.
       Unless this box is checked, it will be assumed that all Shares held by us
       for your account are to be tendered.

       _________________ Shares

                                    ODD LOTS
                (See Instruction 13 to the Letter of Transmittal)

Complete this section only if you own,  beneficially or of record,  an aggregate
of fewer than 100 Shares and are tendering all of your Shares.

[   ]  The  undersigned  is the  beneficial  or record  owner of an aggregate of
       fewer than 100 Shares, all of which are being tendered; or

[   ]  is a dealer,  commercial bank, trust company or other nominee that (a) is
       tendering for the beneficial  owner(s),  Shares with respect to which the
       undersigned  is  the  record   holder,  and  (b)  believes,   based  upon
       representations  made to it by the  beneficial owner(s), that  each  such
       person is  the beneficial  owner of an aggregate of fewer than 100 Shares
       and is tendering all of the Shares.

                               CONDITIONAL TENDERS
                (See Instruction 8 of the Letter of Transmittal)

You may  condition  the tender of your Shares upon the  purchase by Peoples of a
specified  minimum number of the Shares you are tendering  hereby (which minimum
number can be all of the Shares you are hereby  tendering),  all as described in
the Offer to Purchase. It is your responsibility to calculate the minimum number
of Shares  that must be  purchased  if any are  purchased,  and you are urged to
consult your own tax advisor before completing this section. Unless this box has
been  checked  and a minimum  number of Shares  specified,  your  tender will be
deemed unconditional.

[   ]   Minimum   number  of  Shares  that  must  be   purchased,   if  any  are
        purchased:_____________Shares.

If, because of proration, the minimum number of Shares that you designated above
will not be purchased,  Peoples may accept conditional tenders by random lot, if
necessary.  However,  to be eligible  for  purchase by random lot, you must have
tendered all your Shares and checked the following box.

[   ]   The tendered Shares represent all of the Shares held by me.

PLEASE SIGN HERE

(Must be signed by the  registered  holder(s)  exactly as name(s)  appear(s)  on
certificate(s) or on a security  position listing or by person(s)  authorized to
become  registered  holder(s) by certificate(s)  and documents  transmitted with
this  Letter  of   Transmittal.   If  signature  is  by  a  trustee,   executor,
administrator,  guardian, attorney-in-fact,  officer of a corporation or another
person acting in a fiduciary or representative  capacity,  please set forth full
title and see Instruction 5.)

         ________________________________________________________

         ________________________________________________________

Dated: ____________________, 2001

Name(s):_________________________________________________________
                                    (Please Print)
Capacity (full title):___________________________________________
Address:_________________________________________________________
         ________________________________________________________
         ________________________________________________________
                                    (Include Zip Code)
Areas Code(s) and Telephone Number(s):___________________________

                         FORM OF LETTER TO SHAREHOLDERS

[The Peoples Holding Company LETTERHEAD]

April 16, 2001

Dear Shareholder:

Our board of  directors  has approved the  repurchase  of 604,312  shares of our
Common  Stock at a purchase  price of $23.00 per share,  net cash to the seller,
without interest,  through a procedure  commonly referred to as an issuer tender
offer.  Upon  expiration  of the offer,  we will  purchase  those Common  shares
tendered up to 604,312 common shares at the purchase price. No brokerage fees or
commissions  will be charged to you if you tender shares you hold  directly.  If
you have shares through a broker or bank, however, you should ask your broker or
bank if you will be charged a fee to tender your shares.

The offer,  and the procedures you must follow if you want to tender your common
shares,  are  explained in detail in the enclosed  Offer to Purchase,  Letter of
Transmittal, and related documents.

We encourage you to read carefully the Offer to Purchase,  Letter of Transmittal
and related  documents.  Neither The  Peoples  Holding  Company nor our board of
directors makes any  recommendation to any shareholder  whether or not to tender
any shares, or at what price shares should be tendered.  Directors, officers and
affiliates of The Peoples Holding Company have indicated that they do not intend
to tender shares pursuant to our offer.

To assist us with this offer, we have engaged The Peoples Bank and Trust Company
to serve as information  agent.  All questions and requests for documents should
be directed to The Peoples Bank and Trust Company You may reach The Peoples Bank
and Trust  Company at the address on the last page of the Offer to Purchase,  or
by calling 1-800-492-0365.

Please note that the offer is  scheduled  to expire at 5:00 p.m.,  New York City
time, on May 15, 2001, unless extended by The Peoples Holding Company. Again, we
encourage you to read carefully the enclosed materials.

Thank you for your consideration.

                                            Sincerely,

                                            /s/ E.  Robinson McGraw
                                           -------------------------
                                              E.  Robinson McGraw
                                      President and Chief Executive Officer

                                  PRESS RELEASE
                                 EXHIBIT (a)(10)

 April 16, 2001

Contact: Stuart R. Johnson
Chief Financial Officer
The Peoples Bank and Trust Company

THE PEOPLES HOLDING COMPANY  ANNOUNCES OFFER TO PURCHASE UP TO 604,312 SHARES OF
ITS COMMON STOCK AT $23.00 PER SHARE

TUPELO,  MISSISSIPPI - The Peoples  Holding  Company,  (American Stock Exchange:
PHC) (the "Company"),  the holding company for The Peoples Bank & Trust Company,
is pleased to announce  that it will offer to  purchase up to 604,312  shares of
the Company's Common Stock,  approximately 10% of those  outstanding.  The offer
will be made at a  purchase  price of $23.00 per share by issuer  tender  offer,
which commences today. The Company's  management and Board of Directors  believe
that the  Company's  business,  assets and  prospects,  coupled with the current
market  price of its shares of Common  Stock,  make the  purchase  of the shares
pursuant  to the terms and  conditions  of the  offer an  attractive  investment
opportunity.

The offer will be made  pursuant to the Offer to Purchase  dated April 16, 2001,
and  related  materials,  and  will  expire  on May 15,  2001  unless  otherwise
extended.  The Information  Agent for The Peoples Holding Company's tender offer
is The  Peoples  Bank and Trust  Company,  and any  questions  or  requests  for
documents  or forms  related to the offer should be directed to The Peoples Bank
and Trust Company at  1-800-492-0365.  The Peoples  Holding  Company's  Board of
Directors has approved this tender offer.  However,  neither The Peoples Holding
Company,   its  Board  of  Directors  nor  the   Information   Agent  makes  any
recommendation to shareholders whether to tender or refrain from tendering their
shares,  or as to the price or prices at which they may  choose to tender  their
shares.  Directors,  officers and affiliates of The Peoples  Holding Company are
not intending to tender shares in this offer.

THIS PRESS RELEASE IS FOR INFORMATIONAL PURPOSES ONLY AND IS NOT AN OFFER TO BUY
OR A  SOLICITATION  OF AN  OFFER  TO SELL  ANY  SHARES  OF THE  PEOPLES  HOLDING
COMPANY'S COMMON STOCK. THE OFFER IS BEING MADE SOLELY BY THE OFFER OF PURCHASE,
WHICH IS BEING MAILED TO  SHAREHOLDERS  TODAY.  Shareholders  and  investors are
urged to read The Peoples Holding  Company's  Schedule TO being filed today with
the SEC in  connection  with this  tender  offer,  which  includes  the Offer to
Purchase and related  materials.  These materials contain important  information
including  the various terms and  conditions to the offer.  Investors may obtain
copies of The Peoples Holding Company's Schedule TO for free from the SEC at the
SEC's website  (www.sec.gov) or from The Peoples Holding  Company's  Information
Agent for purposes of this transaction, The Peoples Bank and Trust Company.

COMMUNITY BANKING.  The Peoples Bank & Trust Company's  business  activities are
conducted through the bank and its wholly-owned subsidiaries,  Peoples Insurance
Agency,  Dominion Life and Health P.A.,  Alliance  Finance  Company and Dominion
Company  (Dominion  companies).  The Bank accounts for  substantially all of the
assets and revenues of The Peoples  Holding  Company.  On December 31, 2000, The
Peoples  Holding  Company  had 41 banking  offices in Tupelo,  Aberdeen,  Amory,
Batesville,  Belden,  Booneville,  Calhoun City, Coffeeville,  Corinth, Grenada,
Guntown,   Hernando,  Iuka,  Louisville,  New  Albany,  Okolona,  Olive  Branch,
Pontotoc,  Saltillo,  Sardis,  Shannon,  Smithville,  Southaven,  Verona,  Water
Valley, West Point, and Winona,  Mississippi.  The Peoples Bank is headquartered
in Tupelo, Mississippi, and has over $1.2 Billion in assets. The Peoples Holding
Company,  The Peoples  Bank's parent  company,  is traded on the American  Stock
Exchange (PHC).

STATEMENTS  IN THIS PRESS  RELEASE  RELATING  TO THE PEOPLES  HOLDING  COMPANY'S
PLANS, OBJECTIVES,  OR FUTURE PERFORMANCE ARE FORWARD-LOOKING  STATEMENTS WITHIN
THE  MEANING OF THE  PRIVATE  SECURITIES  LITIGATION  REFORM  ACT OF 1995.  SUCH
STATEMENTS ARE BASED ON MANAGEMENT'S CURRENT  EXPECTATIONS.  THE PEOPLES HOLDING
COMPANY'S ACTUAL  STRATEGIES AND RESULTS IN FUTURE PERIODS MAY DIFFER MATERIALLY
FROM THOSE CURRENTLY EXPECTED DUE TO VARIOUS RISKS AND UNCERTAINTIES,  INCLUDING
THOSE DISCUSSED IN THE PEOPLES  HOLDING  COMPANY'S 2000 FORM 10-K AND SUBSEQUENT
10Q REPORTS FILED WITH THE SECURITIES AND EXCHANGE COMMISSION.

                                                                   Exhibit (i)

                         Consent of Independent Auditors

We  consent  to the  incorporation  by  reference  in the  Issuer  Tender  Offer
Statement  (Schedule  TO-1) of The  Peoples  Holding  Company and in the related
Prospectus, filed pursuant to Rule 13e-4 of the Securities Exchange Act of 1934,
as  amended,  of  our  report  dated  January  31,  2001,  with  respect  to the
consolidated financial statements of The Peoples Holding Company included in its
Annual Report (Form 10-K) for the year ended  December 31, 2000,  filed with the
Securities and Exchange Commission.

                                               /s/ Ernst & Young LLP

Memphis, Tennessee
April 10, 2001