UNITED STATES
                       SECURITIES AND EXCHANGE COMMISSION
                             WASHINGTON, D. C. 20549
                                    FORM 10-Q

                   QUARTERLY REPORT UNDER SECTION 13 OR 15(d)
                     OF THE SECURITIES EXCHANGE ACT OF 1934

                      For the quarter ended March 31, 1998
                         Commission File Number 1-13253

                           THE PEOPLES HOLDING COMPANY
            --------------------------------------------------------
           (Exact name of the registrant as specified in its charter)

                             MISSISSIPPI 64-0676974
         --------------------------------------------------------------
        (State of Incorporation) (I.R.S. Employer Identification Number)

            209 Troy Street, P. O. Box 709, Tupelo, Mississippi 38801
            ---------------------------------------------------------
                    (Address of principal executive offices)

         Registrant's telephone number including area code 601-680-1001

 Indicate by check whether the registrant (1) has filed all reports required to
 be filed by Section 13 or 15(d) of the Securities Exchange Act of 1934 during
 the preceding 12 months, and (2) has been subject to such filing requirements
                             for the past 90 days.
                                 YES__X__NO_____

  Indicate the number of shares outstanding of each of the issuer's classes of
                common stock, as to the latest practicable date.

            Common stock, $5 Par Value, 5,859,472 shares outstanding
                              as of May 12, 1998

                                     1

                          THE PEOPLES HOLDING COMPANY
                                     INDEX

PART 1. FINANCIAL INFORMATION                                   PAGE

     Item 1. FINANCIAL STATEMENTS (UNAUDITED)

          Consolidated Balance Sheets -
               March 31, 1998 and December 31, 1997...............3
         
          Consolidated Statements of Income - Three Months
               Ended March 31, 1998 and 1997......................4
          
          Consolidated Statements of Cash Flows
               Three Months Ended March 31, 1998 and 1997.........5
         
          Notes to Consolidated Financial Statements..............6

     Item 2. Management's Discussion and Analysis of Financial
          Condition and Results of Operations.....................7

PART II. OTHER INFORMATION

     Item 1. Legal Proceedings...................................11

     Item 6.(b) Reports on Form 8-K..............................11

     Signatures..................................................11

                                                        

                                       2

                   THE PEOPLES HOLDING COMPANY AND SUBSIDIARY
                           CONSOLIDATED BALANCE SHEETS

                                                 MARCH 31        DECEMBER 31
                                                   1998             1997      
                                               ------------      -----------
                                                (Unaudited)       (Note 1)
Assets
   Cash and due from banks ................ $    38,276,988    $  32,932,007
   Federal funds sold .....................      14,000,000        6,000,000
                                                 ----------       ----------
        Cash and cash equivalents .........      52,276,988       38,932,007

   Interest bearing balances with banks          13,337,005       14,972,568
   Securities held-to-maturity (market
      value-$65,928,847 and $60,555,766
      at March 31, 1998 and December 31,
      1997, respectively) .................      65,223,876       59,893,375

   Securities available-for-sale (amortized
      cost-$216,708,174 and $187,836,120 at
      March 31, 1998 and December 31, 1997,
      respectively) .......................     217,835,216      188,738,354
   
   Loans, net of unearned income .........      628,181,893      627,945,380
      Allowance for loan losses ...........      (9,145,895)      (9,103,828)
                                                -----------     ------------ 
         Net Loans ........................     619,035,998      618,841,552

   Premises and equipment .................      24,083,237       23,492,657
   Other assets ...........................      26,095,935       26,184,367
                                                -----------     ------------ 
            Total Assets .................. $ 1,017,888,255    $ 971,054,880
                                              =============     ============

Liabilities
   Deposits:
      Noninterest-bearing ................. $   121,317,519    $ 120,828,654
      Certificates of deposit exceeding 
          $100,000 ........................     108,150,650      106,952,104
      Interest bearing ....................     649,473,954      607,133,427
                                               ------------     ------------
                Total Deposits ............     878,942,123      834,914,185
   
   Treasury tax and loan note account .....       7,415,868        6,101,276
   Borrowings ................. ...........      17,876,724       18,454,080
   Other liabilities ......................      13,532,379       13,434,422
                                               ------------     ------------
                Total Liabilities ......... $   917,767,094    $ 872,903,963

Shareholders' Equity
   Common Stock, $5 par value-7,500,000
     shares authorized, 5,859,472 shares  
     issued and outstanding at March 31, 1998
     and December 31, 1997, respectively ..      29,297,360       29,297,360
   Additional paid-in capital .............      39,875,796       39,875,796
   Unrealized gains on securities,    
     available-for-sale, net of tax........         706,655          565,708
   Retained earnings ......................      30,241,350       28,412,053
                                               ------------     ------------
             Total Shareholders' Equity ...     100,121,161       98,150,917
                                               ------------     ------------
             Total Liabilities and
               Shareholders' Equity ....... $ 1,017,888,255    $ 971,054,880
                                              =============     ============

See Notes to Consolidated Financial Statements

                                       3

                      THE PEOPLES HOLDING COMPANY AND SUBSIDIARY
                        CONSOLIDATED STATEMENTS OF INCOME

                                                THREE MONTHS ENDED MARCH 31
            
                                                   1998             1997
                                                   ----             ----
                                                       (Unaudited)
Interest Income
      Loans ................................  $ 14,541,502     $ 13,129,673
      Securities:                                                          
           Taxable .........................     3,140,091        3,203,063
           Tax-exempt ......................       822,381          719,164
                                                                           
      Other ................................       377,733          206,791
                                                   -------          -------
                Total interest income ......    18,881,707       17,258,691
                                                                           
Interest Expense                                                           
      Time deposits exceeding $100,000 .....     1,448,496          867,639
      Other deposits .......................     6,733,000        6,266,525
      Borrowings ...........................       346,271          299,077
                                                    ------           ------
                Total interest expense .....     8,527,767        7,433,241
                                                 ---------        ---------
                Net interest income ........    10,353,940        9,825,450
Provision for loan losses ..................       640,668          570,000
                                                   -------          -------
                Net interest income after                                  
                provision for loan losses ..     9,713,272        9,255,450
                                                                           
Noninterest income:                                                           
      Service charges on deposit accounts...     1,697,268        1,598,356
      Fees and commission ..................       445,110          440,016
      Trust revenue ........................       180,000          149,700
      Gains on sale of securities and loans.       230,039           90,655
      Other ................................       839,191          571,700
                                                   -------          -------
                Total noninterest income ...     3,391,608        2,850,427
                                                                           
Noninterest expense:                                                         
      Salaries and employee benefits .......     5,101,579        4,655,620
      Net occupancy ........................       643,821          684,009
      Equipment ............................       497,016          445,062
      Other ................................     2,842,645        2,567,258
                                                 ---------        ---------
                Total noninterest expense...  $  9,085,061     $  8,351,949
                                                 ---------        ---------
Income before income taxes .................     4,019,819        3,753,928
Income taxes ...............................     1,165,094        1,152,762
                                                 ---------        ---------
                Net income .................  $  2,854,725     $  2,601,166
                                                 =========        =========
                                                                           
Basic and diluted earnings per share .......         $ .49           $  .44
                                                     =====            =====
                                                                           
Weighted average shares outstanding ........     5,859,472        5,859,472
                                                 =========        =========
                                                               
See Notes to Consolidated Financial Statements.

                                       4

                   THE PEOPLES HOLDING COMPANY AND SUBSIDIARY
                      CONSOLIDATED STATEMENTS OF CASH FLOWS

                                                  THREE MONTHS ENDED MARCH 31
                                                    1998             1997
                                                    ----             ----
                                                          (Unaudited)
Operating Activities
      Net income ............................   $  2,854,725      $  2,601,166  
      Adjustments to reconcile net                                              
           income to net cash provided                                          
           by operating activities:                                             
      Provision for loan losses .............        640,668           570,000  
      Provision for depreciation and                                            
           amortization .....................        635,034           618,633  
      Net amortization (accretion) of                                         
           securities premiums/discounts ....         43,054           166,494 
      Gains on sales/calls of                                          
           securities .......................       (230,039)          (90,655) 
      Increase in other liabilities .........         97,957           938,418 
      Deferred income taxes (credits)........        164,136           (98,387)
      Losses on sales of premises                                       
            and equipment ...................         38,187           103,693 
      Increase in other assets ..............        (61,167)         (333,169) 
                                                    --------          --------  
           Net Cash Provided by Operating                                       
                Activities ..................      4,182,555         4,476,193  
                                                                                
Investing Activities                                                           
      Net decrease (increase) in balances                                  
           with other banks .................      1,635,563          (480,555)
      Proceeds from maturities/calls of                                         
           securities held-to-maturity ......        579,400           342,000  
      Proceeds from maturities/calls of                                         
           securities available-for-sale ....     12,444,774        28,706,824  
      Proceeds from sales of                                                    
           securities available-for-sale ....              0         6,090,655  
      Purchases of securities                                                   
           held-to-maturity .................     (5,895,046)         (462,000) 
      Purchases of securities                                                   
           available-for-sale ...............    (41,374,737)      (55,541,198) 
      Net increase in loans .................    (22,414,244)      (14,421,919)
      Proceeds from sale of loans ...........     21,555,019         5,512,496
      Proceeds from sales of premises and                                  
           equipment  .......................         97,392           153,406  
      Purchases of premises and equipment ...     (1,205,441)       (1,135,786) 
                                                    --------          --------  
           Net Cash Used in Investing                                          
                Activities ..................    (34,577,320)      (31,236,077) 
                                                                                
Financing Activities                                                            
      Net increase in                                                
           noninterest-bearing deposits .....        488,865         4,578,491  
      Net increase in other interest-bearing                                    
           deposits .........................     43,539,073        12,103,779 
      Net increase in treasury                                       
           tax and loan note account ........      1,314,592         1,663,573  
      Increase (decrease) in borrowings .....       (577,356)        4,519,924 
      Cash dividends paid ...................     (1,025,428)         (781,335) 
                                                    --------          --------  
          Net Cash Provided by Financing                                        
                Activities ..................     43,739,746        22,084,432  
                                                  ----------        ----------  
      Decrease in Cash                                               
                and Cash Equivalents ........     13,344,981        (4,675,452) 
                                                  ----------        ----------  
Cash and cash equivalents at                                                    
      beginning of period ...................     38,932,007        46,874,641  
                                                  ----------        ----------  
Cash and cash equivalents at end of period ..   $ 52,276,988      $ 42,199,189  
                                                  ==========        ==========  
Non-cash transactions:                                                          
       Transfer of loans to other real estate   $    254,150      $    137,542  
                                                     =======           =======  
See Notes to Consolidated Financial Statements                   

                                       5

                   THE PEOPLES HOLDING COMPANY AND SUBSIDIARY
                   NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

Note 1 Basis of Presentation

The consolidated balance sheet at December 31, 1997 has been derived from the
audited consolidated financial statements at that date. The accompanying
unaudited consolidated financial statements reflect all adjustments (consisting
only of normally recurring accruals) which are, in the opinion of management,
necessary for a fair statement of the results for the interim periods presented.
The statements should be read in conjunction with the summary of accounting
policies and notes to consolidated financial statements included in the
Registrant's annual report for the year ended December 31, 1997. Certain
information and footnote disclosures normally included in financial statements
prepared in accordance with generally accepted accounting principles have been
omitted in accordance with the rules of the Securities and Exchange Commission.

Note 2 Comprehensive Income

As of January 1, 1998, the Company adopted Statement of Financial Accounting
Standards (SFAS) No. 130, "Reporting Comprehensive Income."  SFAS No. 130 
establishes new rules for the reporting and display of comprehensive income 
and its components; however, the adoption of this Statement had no impact on 
the Company's net income or shareholders' equity.  SFAS No. 130 requires 
unrealized gains or losses on the Company's available-for-sale securities, 
which prior to adoption were reported separately in shareholders' equity, to be 
included in other comprehensive income.  Prior year financial statements have 
been reclassified to conform to the requirements of SFAS No. 130.

During the first quarter of 1998 and 1997, total comprehensive income amounted
to $2,995,672 and $1,696,555.

Note 3  Other Accounting Pronouncements

In February 1998, SFAS No. 132, "Employers' Disclosures About Pensions and 
Other Postretirement Benefits," was issued, superseding the disclosure
requirements of SFAS No. 87, "Employers' Accounting for Pensions," and SFAS
No. 106, "Employers' Accounting for Postretirement Benefits Other Than 
Pensions."  SFAS No. 132 is effective for fiscal years beginning after 
December 15, 1997, and therefore the Company will adopt the new requirements
in its 1998 annual report.  SFAS No. 132 suggests a parallel format for 
presenting information about pensions and other postretirement benefits, but 
the information disclosed is not substantially different than what is required 
under current guidance.  The Company does not anticipate that the adoption of
this statement will have a significant impact on its consolidated financial
condition or results of operations.

                                       6

                   THE PEOPLES HOLDING COMPANY AND SUBSIDIARY
           MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION
                            AND RESULTS OF OPERATIONS

This Form 10-Q may contain or incorporate by reference statements which may
constitute "forward-looking statements' within the meaning of Section 27A of the
Securities Act of 1933, as amended, and Section 21 of the Securities Exchange
Act of 1934, as amended. Prospective investors are cautioned that any such
forward-looking statements are not guarantees for future performance and involve
risks and uncertainties, and that actual results may differ materially from
those contemplated by such forward-looking statements. Important factors
currently known to management that could cause actual results to differ
materially from those in forward-looking statements include significant
fluctuations in interest rates, inflation, economic recession, significant
changes in the federal and state legal and regulatory environment, significant
underperformance in the Company's portfolio of outstanding loans, and
competition in the Company's markets. The Company undertakes no obligation to
update or revise forward-looking statements to reflect changed assumptions, the
occurrence of unanticipated events or changes to future operating results over
time.

Financial Condition
- -------------------

Total assets of The Peoples Holding Company grew from $971,054,880 on December
31, 1997, to $1,017,888,255 on March 31, 1998, or 4.82% for the three month
period. Total securities increased from $248,631,729 on December 31, 1997, to
$283,059,092 on March 31, 1998, with the majority of growth in Mortgage-backed
securities.  Loans, net of unearned income, increased $236,513 or .04%.  

Total deposits for the first three months of 1998 grew from $834,914,185 at
December 31, 1997 to $878,942,123 at March 31, 1998, or an increase of 5.27%,
with the majority of growth in public fund interest bearing demand deposits.

The equity  capital to total  assets  ratio was 9.84% and 10.11% for March
31, 1998 and December 31, 1997, respectively.  The decrease is mainly due to
the significant growth in assets funded primarily by deposits.  Capital grew 
2.01% from December 31, 1997 to March 31, 1998 due to record earnings.

Results of Operations-Quarter Ended March 31, 1998 compared to 1997
- -------------------------------------------------------------------

The Company's net income for the three month period ending March 31, 1998 was
$2,854,725 compared to $2,601,166 from the first quarter of 1997. The increase
in net income for the first quarter of 1998 compared to 1997 is the result of 
customary and usual deposit gathering and lending operations. The first quarter
for 1998 and 1997 experienced the same annualized return of average assets of 
1.16%.

                                       7

Net interest income, the difference between interest earned on assets and the
cost of interest-bearing liabilities, is the largest component of the Company's
net income. The primary items of concern in managing net interest income are the
mix and maturity balance between interest-sensitive assets and related
liabilities. Net interest income was $10,353,940 and $9,825,450 for the three
months ending March 31, 1998 and 1997, respectively. Earning assets averaged
$916.6 million for first quarter ending March 31, 1998 compared to $839.0
million for the same period in 1997. The net interest margin was 4.82% and 4.96%
for the three months ending March 31, 1998 and 1997, respectively. The decrease
in net interest margin is due to increases in the volume and rate of costing
liabilities and the subsequent investment of those funds into short-term assets
instead of higher yielding long-term assets.  Although net interest margin
decreased, net interest income increased. 

The  provision  for loan losses is an amount  which,  in the  judgement  of
management,  is necessary to maintain the  allowance  for loan losses at a level
that is adequate to absorb inherent losses on the Company's current portfolio of
loans. The appropriate  level of the allowance is based on a quarterly  analysis
of the loan portfolio including consideration of such factors as the risk rating
of individual credits, size and diversity of the portfolio, economic conditions,
prior loss  experience,  and the results of periodic  credit reviews by internal
loan review and regulators.  The provision for loan losses totaled $640,668 and
$570,000  for  quarters  ending March  31, 1998 and  1997,  respectively.  The
allowance for loan losses as a percentage of net loans outstanding was 1.46% and
1.45% as of March 31, 1998 and December 31, 1997.  Net  charge-offs  to average
loans was .10% for each three month period ending March 31, 1998 and 1997.

Noninterest income, excluding gains from the sales of securities and loans,
was $3,161,569 for the quarter ending March 31, 1998, compared to $2,759,772 for
same period in 1997, or a increase of 14.56%.  Service charges increased $98,912
due to the growth in deposits.  The increase in other noninterest income was due
in part to increases in revenue from fees charged on credit card loans, 
mortgage loans, and deposit accounts of the Company.

Noninterest expenses were $9,085,061 for the quarter ending March 31, 1998,
compared to $8,351,949 for the same period in 1997, or an increase of 8.78%. 
Salaries and employee benefits increased 9.58% due to an increase in personnel
to support growth and new facilities.  The increase in other noninterest 
expenses of approximately $275,000 is due to increases in computer processing
costs, courier costs, and supply costs related to the growth in deposits.

Income tax expense was $1,165,094 for the three months ending March 31, 1998,
compared to $1,152,762 for the same period in 1997. The increase is due to
increased profits for the first quarter of 1998 compared to 1997. The Company
continues to invest in assets whose earnings are given favorable tax treatment.

Liquidity Risk

Liquidity management is the ability to meet the cash flow requirements of
customers who may be either depositors wishing to withdraw funds or borrowers
needing assurance that sufficient funds will be available to meet their credit
needs.

                                      8

Core deposits are a major source of funds used to meet cash flow needs.
Maintaining the ability to acquire these funds as needed in a variety of money
markets is a key to assuring liquidity. The Company has worked toward lowering
its dependence on other public funds. This has added more stability to the
Company's core deposit base reducing the dependence on highly liquid assets.

Approximately 88% of the Company's deposits are composed of accounts with
balances less than $100,000. The Company maintains targets for both volatile
dependency and liquidity.  At March 31, 1998, these targets were well within
the guidelines set by the Asset-Liability Committee.

Other sources available for meeting the Company's liquidity needs include 
available-for-sale securities. The available-for-sale portfolio is composed of
securities with a readily available market that can be used to convert to cash
if the need arises. In addition, the Company maintains a federal funds position
that provides day-to-day funds to meet liquidity needs and may also obtain
advances from the Federal Home Loan Bank or the treasury tax and loan note
account.

Capital Resources

The Bank is subject to various regulatory capital requirements administered by
the federal banking agencies. Failure to meet minimum capital requirements can
initiate certain mandatory, and possibly additional discretionary, actions by
regulators that, if undertaken, could have a direct material effect on the
Bank's financial statements. Under capital adequacy guidelines and the
regulatory framework for prompt corrective action, the Bank must meet specific
capital guidelines that involve quantitative measures of the Bank's assets,
liabilities, and certain off-balance-sheet items as calculated under regulatory
accounting practices. The Bank's capital amounts and classification are also
subject to qualitative judgments by the regulators about components, risk
weightings, and other factors.

Quantitative measures established by regulation to ensure capital adequacy
require the Bank to maintain minimum amounts and ratios. All banks are required
to have core capital (Tier I) of at least 4% of risk-weighted assets (as
defined), 4% of average assets (as defined), and total capital of 8% of
risk-weighted assets (as defined). As of March 31, 1998, the Bank has met all
capital adequacy requirements to which it is subject.

As of March 31, 1998, the most recent notification from the Federal Deposit
Insurance Corporation (FDIC) categorized the Bank as well capitalized under the
regulatory framework for prompt corrective action. To be categorized as well
capitalized, the Bank must maintain minimum total risk-based, Tier I risk-based,
and Tier I leverage ratios of 10%, 6%, and 5%, respectively. In the opinion of
management, there are no conditions or events since the last notification that
have changed the institution's category.

                                       9

The Bank's actual capital amounts and applicable ratios are as follows:

                                                    Actual
                                                Amount   Ratio
                                                ------   -----
                                                (000)
As of March 31, 1998
         Total Capital ....................   $101,319   15.6%
           (to Risk Weighted Assets)
         Tier I Capital ...................   $ 93,215   14.4%
           (to Risk Weighted Assets)
         Tier I Capital ...................   $ 93,215    9.4%
           (to Average Assets)

As of December 31, 1997
         Total Capital ....................   $ 99,223   15.7%
           (to Risk Weighted Assets)
         Tier I Capital ...................   $ 91,315   14.5%
           (to Risk Weighted Assets)
         Tier I Capital ...................   $ 91,315    9.9%
           (to Average Assets)

Management recognizes the importance of maintaining a strong capital base. As
the above  ratios  indicate,  the Company  exceeds the  requirements  for a well
capitalized bank.

Book value per share was $17.09 and $16.75 at March 31, 1998 and December 31,
1997, respectively. Quarterly cash dividends were raised to $.175 per share, up
from $.133 per share during the first quarter of 1997.

The Company's capital policy is to evaluate future needs based on growth,
earnings trends and anticipated acquisitions.

                                       10

Part II.  OTHER INFORMATION

   Item 1.    Legal Proceedings

              There  were no  material  proceedings  pending  at  
              March 31 1998, against the registrant or its subsidiary.

   Item 6(b)  Reports on Form 8-K

              There were no reports filed on Form 8-K during the first 
              quarter of 1998.

                                   SIGNATURES

Pursuant to the requirements of the Securities and Exchange Act of 1934, the
registrant has duly caused this report to be signed on its behalf by the
undersigned thereunto duly authorized.

                                       THE PEOPLES HOLDING COMPANY
                                       ---------------------------
                                              Registrant

DATE:  May 12, 1998                         /s/  John W. Smith
                                       ---------------------------
                                             John W. Smith
                                    President & Chief Executive Officer

                                       11

  

 9
 1000

                   3-MOS
                          DEC-31-1998
                               MAR-31-1998
                                           38277
                           13337
                                 14000
                                     0
                     217835
                           65224
                             65929
                                         628182
                                       9146
                                 1017888
                                      878942
                                      7416
                              13532
                                      17877
                                0
                                          0
                                         29297
                                       70824
                 1017888
                                  14542
                                 3962
                                   378
                                 18882
                                8181
                                8528
                            10354
                                      641
                                 230
                                   9085
                                   4020
                        4020
                                      0
                                            0
                                      2855
                                      .49
                                      .49
                                    8.44
                                       1711
                                      2213
                                     0
                                      0
                                  9104
                                      700
                                       102
                                 9147
                              9147
                                  0
                           9147