UNITED STATES

SECURITIES AND EXCHANGE COMMISSION

WASHINGTON, D.C. 20549

SCHEDULE 14 A14A INFORMATION

(Rule 14a-101)

Proxy Statement Pursuant to Sectionsection 14(a) of the

the Securities Exchange Act of 1934

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PEOPLES FINANCIAL CORPORATION

(Exact name of registrant as specified in its charter)

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NOTICE OF ANNUALSPECIAL MEETING OF SHAREHOLDERS

NOTICE IS GIVEN that, pursuant to a call of its Board of Directors, the Annuala Special Meeting of Shareholders of Peoples Financial Corporation (the “Company”"Company" or the “Corporation”) will be held in The Swetman Building at The Peoples Bank, Suite 204, 727 Howard Avenue, Biloxi, Mississippi, 39530, on April 25, 2018,March 10, 2021, at 6:30 P.M., local time, for the purpose of considering and voting upon the following matters:

Only those shareholders of record at the close of business on February 16, 2018,3, 2021, will be entitled to notice of, and to vote at, the meeting or any adjournments thereof. For those that attend the meeting, attendees will be strongly encouraged to observe applicable public health guidance with respect to COVID-19, including wearing masks and socially distancing.

Important Notice Regarding the Availability of Proxy Materials for the AnnualSpecial Meeting of

Shareholders to be Held on April 25, 2018March 10, 2021

Pursuant to rules promulgated by the Securities and Exchange Commission (the “SEC”), we are providing access to our proxy materials both by sending you this full set of proxy materials, including a noticeNotice of annual meeting,Special Meeting and form of Proxy, and 2017 Annual Report to Shareholders, and by notifying you of the availability of our proxy materials on the Internet.The noticeNotice of annual meeting, proxy statement,Special Meeting, Proxy Statement and the form of Proxy and the 2017 Annual Report to Shareholders are available at the following website address:

https://www.shareholderaccountingsoftware.com/tspweb/peoples/pxsignon.asp. In accordance with the SEC rules, the materials on the site are searchable, readable and printable and the site does not have “cookies” or other tracking devices which identify visitors.

WHETHER OR NOT YOU EXPECT TO BE PRESENT AT THE SPECIAL MEETING, PLEASE DATE, SIGN AND RETURN PROMPTLY THE ACCOMPANYING PROXY. IF YOU DO ATTEND THE SPECIAL MEETING, YOU MAY REVOKE YOUR PROXY AND VOTE IN PERSON. THE PROXY ALSO MAY BE REVOKED AT ANY TIME PRIOR TO ITS EXERCISE BY WRITTEN NOTICE TO THE SECRETARY OF THE COMPANY OR BY EXECUTION OF A SUBSEQUENTLY DATED PROXY.

				By Order of the Board of Directors
				By Order of the Board of Directors Chevis C. Swetman
				Chevis C. Swetman
March 20, 2018				Chairman, President and Chief Executive Officer

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PROXY STATEMENT FOR ANNUALSPECIAL MEETING OF SHAREHOLDERS

I. General

This Proxy Statement is furnished in connection with the solicitation by the Board of Directors (the “Board”) of Peoples Financial Corporation (the “Company”"Company") of Proxies for the Annuala Special Meeting of Shareholders (the “Annual Meeting”"Special Meeting") to be held in The Swetman Building at The Peoples Bank, Suite 204, 727 Howard Avenue, Biloxi, Mississippi, 39530, on April 25, 2018,March 10, 2021, at 6:30 P.M., local time, and any adjournment thereof, for the purposes statedin the foregoing Notice of AnnualSpecial Meeting of Shareholders. For those that attend the Special Meeting, attendees will be strongly encouraged to observe applicable public health guidance with respect to COVID-19, including wearing masks and socially distancing. The mailing address of the principal executive offices of the Company is P.O. Box 529, Biloxi, Mississippi 39533-0529. The noticeNotice of annual meeting,Special Meeting, Proxy Statement, and form of Proxy and 2017 Annual Report to Shareholders will be mailed to shareholders of record on or about March 20, 2018.February 11, 2021.

Shareholders of record of the Company’sCompany's Common Stock, par value $1.00 per share (the “Common Stock”"Common Stock"), at the close of business on February 16, 20183, 2021 (the “Record Date”"Record Date"), are entitled to receive notice of and to vote at the AnnualSpecial Meeting or any adjournments thereof. On the Record Date, the Company had outstanding 5,083,1864,878,557 shares of Common Stock entitled to vote at the AnnualSpecial Meeting. A majority of the outstanding shares constitutes a quorum. Except in the election of directors, eachEach share of Common Stock entitles the holder thereof to one vote on each matter presented at the AnnualSpecial Meeting for shareholder approval.Assuming a quorum at the Special Meeting, the affirmative vote of a majority of the voting power present, in person or by proxy, of holders of the Common Stock is required for approval of Proposals 1 and 2. Action on a matter is approved if the votes cast in favor of the action exceed the votes cast opposing the action. Abstentions, which include broker non-votes, are counted for purposes of determining a quorum, but are otherwise not counted.counted and have no effect on the outcome of the matters to be voted upon. The Board unanimously recommends that shareholders vote “FOR” the approval of Proposal 1 and Proposal 2.

The Board is also soliciting proxies to grant discretionary authority to adjourn the Special Meeting, if necessary, for the purpose of soliciting additional proxies in favor of the approval of Proposal 1 and/or Proposal 2. Assuming a quorum at the Special Meeting, the affirmative vote of a majority of the voting power present, in person or by proxy, of holders of the Common Stock is required for the approval of the proposal to adjourn the Special Meeting.  Action on a matter is approved if the votes cast in favor of the action exceed the votes cast opposing the action.  Abstentions, which include broker non-votes, are counted for purposes of determining a quorum, but are otherwise not counted and have no effect on the outcome of the matters to be voted upon. The Board unanimously recommends that shareholders vote “FOR” the approval of the adjournment of the Special Meeting, if necessary, to solicit additional proxies in the event that there are not sufficient votes at the time of the Special Meeting to approve Proposal 1 and/or Proposal 2.

Any person giving a Proxy has the right to revoke it at any time before it is exercised. A shareholder may revoke his or her Proxy (l) by revoking it in person at the AnnualSpecial Meeting, (2) by written notification to the Secretary of the Company which is received prior to the exercise of the Proxy, or (3) by a subsequent Proxy presented to the Company prior to the exercise of the Proxy. All properly executed Proxies, if not revoked, will be voted as directed. If the shareholder does not direct to the contrary, the shares will be voted “FOR”the nominees listed in Item"FOR" Items 1, 2 and “FOR” Item 23 described in the Notice of AnnualSpecial Meeting of Shareholders. Solicitation of Proxies will be primarily by mail. Officers, directors, and employees of The Peoples Bank (hereinafter referred to as the “Bank”(the "Bank") also may solicit Proxies personally. The Company will reimburse brokers and other persons holding shares in their names, or in the names of nominees, for the expense of transmitting Proxy materials. The cost of soliciting Proxies will be borne by the Company.

If a shareholder marks “ABSTAIN” on the shareholder’s Proxy, fails to submit a Proxy or vote in person at the Special Meeting or fails to instruct the shareholder’s bank, broker or other nominee how to vote with respect to Proposal 1, 2 or 3, the shareholder will not be deemed to have cast a vote with respect to Proposal 1 or 2, and it will have no effect on Proposals 1 or 2.

If you hold your Common Stock through a broker, the broker may be prevented from voting shares held in your brokerage account (a “broker non-vote”) unless you have given the broker voting instructions.  A “broker non-vote” occurs when a broker lacks discretionary voting power to vote on a “non-routine” proposal and a beneficial owner fails to give the broker voting instructions on that matter.  The rules of the New York Stock Exchange determine whether matters presented at a shareholder meeting are “routine” or “non-routine” in nature.  Proposal 1 and Proposal 2 to be considered at the Special Meeting are “non-routine” matters.  If you hold your Common Stock through a broker and do not instruct your broker how to vote your shares on Proposal 1 and Proposal 2, no votes will be cast on your behalf for either or both of these proposals at the Special Meeting.  On the other hand, Proposal 3, the adjournment proposal, is considered to be a “routine” matter.  If your broker does not receive instructions on how to vote your shares on Proposal 3, the broker will have discretion to vote the shares.

The Board of Directors is not aware of any matters other than as set forth herein which are likely to be brought before the meeting.Special Meeting. If other matters do come before the meeting,Special Meeting as to which this Proxy confers discretionary authority, the person named in the accompanying Proxy or his or her substitute will vote the shares represented by such ProxiesProxy in accordance with the recommendationsdirection of a majority of the Board of Directors.

II. Management ProposalsProposed Amendments to Articles of Incorporation

Item 1: Election

Introduction and Background

In 2019, the Company and its wholly owned bank subsidiary, The Peoples Bank, Biloxi, Mississippi (the “Bank”), through the Executive Strategic Oversight Committee of Directors

The following nominees have been designated by the Nominating CommitteeBank (“ESOC”), began efforts to adopt a comprehensive strategic plan for the Company and are proposedthe Bank (the “Strategic Plan”). In a set of resolutions adopted by the Board of Directorsthe Company in 2019, the Board resolved that, once the Strategic Plan was finalized by ESOC and approved by the Bank’s board of directors, the Board would carefully consider the Strategic Plan, including the anticipated impact it could have on the future performance of the Company, and approve the Strategic Plan for adoption by the Company should it be found sufficient to maximize shareholder value over the long-term. The Strategic Plan was finalized by ESOC and approved by the Bank’s board of directors in November, 2019, but due to the numerous challenges of 2020, including the worldwide COVID-19 pandemic and the operational impediments it has presented, the Board of the Company did not have the opportunity to consider the Strategic Plan’s contents for approval by the Company until recently.

In December, 2020, the Board of the Company authorized the Company’s Audit Committee to examine the Strategic Plan and, after considering the elements of the Strategic Plan, the Bank’s progress toward its goals in 2020, the unforeseen and unique challenges posed to the Bank in 2020, and the prospects for the Bank meeting the Strategic Plan’s goals going forward, make a recommendation to the Board with respect to the following: (i) whether or not the Strategic Plan should be approved by the Board as the best way to maximize Company shareholder value over the foreseeable future as reasonably determined by the Audit Committee and the Board; (ii) what alternative strategies, if any, should be considered in addition to those stated in the Strategic Plan; and (iii) if the Strategic Plan is sufficient to maximize Company shareholder value, what other changes with respect to the Company’s governing documents may be necessary or appropriate to place the Company in a better position to pursue the strategic goals stated in the approved Strategic Plan.

Pursuant to recommendations made by the Audit Committee as a result of that charge, the Board of the Company, at a meeting held in January 2021, approved the Strategic Plan with slight revisions made for the purposes of implementation by the Company and, in order to place the Company in a better position to pursue the strategic goals stated in the Strategic Plan, approved certain amendments to the Company’s Bylaws and Articles of Incorporation (“Articles”), along with the calling of the Special Meeting for the required shareholder approval of the proposed amendments to the Articles of the Company. The Bylaw amendments made pursuant to the Board’s approval in January 2021, were announced in a Current Report on Form 8-K filed by the Company on January 27, 2021.

Therefore, upon recommendation from its Audit Committee, the Board of the Company is proposing amendments to the Articles of the Company to update the Articles and allow the Company to more effectively pursue the goals of the Strategic Plan adopted by the Board, within the parameters of current financial industry considerations and to allow the Board and management additional flexibility in dealing with potential challenges to successful operation of the Company under its governance structure. Set forth below are the changes proposed to be made to the Articles.

Proposal 1: Amending the Articles of Incorporation of the Company to eliminate cumulative voting in the election of directors.

The Amendment

On January 27, 2021, upon recommendation of the Audit Committee, the Board unanimously approved, subject to shareholder approval, an amendment to the Articles of the Company to eliminate cumulative voting for election atof directors of the Annual Meeting.Company, by inserting a new Article ELEVENTH. The shares represented byproperly executed Proxies will, unless authorityproposed addition of ARTICLE ELEVENTH is as follows:

ELEVENTH:     The right to vote is withheld, be votedcumulate votes in favor of these persons.In the election of directors eachshall not exist with respect to shares of stock of the Corporation.

Background: Reasons for the Amendment; Recommendation of the Board

The Company's shareholders currently are able to elect directors by a procedure called "cumulative voting.” Under Mississippi law, for entities incorporated prior to 2002, cumulative voting is present unless specifically eliminated in the Articles filed with the Mississippi Secretary of State. The Company was incorporated in 1984 and because the Company's Articles currently do not address cumulative voting, shareholders of the Company have the right to cumulatively vote in any election of directors. Cumulative voting enables a shareholder may vote his shares cumulativelyto cumulate votes for the election of a nominee by multiplying thecasting a number of shares he is entitledvotes for such nominee equal to vote by the number of directors to be elected. This product shall beelected multiplied by the number of votes to which the shareholder is entitled. The shareholder also may distribute his or her votes among two or more nominees on the same basis. This procedure allows a shareholder to cumulate his or her votes for one or more of the nominees for director, meaning that his or her votes may be cast for one nominee or by distributing this numbermore of votes among any numberthe nominees. For example, in an election of nominees. Ifthree directors, if a shareholder withholds authorityheld one vote, the shareholder would have three votes. He or she could cast those three votes for one ormoreof the nominees, or cast two votes for one nominee and does not direct otherwise,one vote for another, or cast one vote for each of the total number of votes that the shareholder is entitled to cast will be distributed equally among the remainingthree nominees. Should any of these

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nominees be unableThe Board believes this procedure is overly complicated to acceptimplement and seldom if ever used by shareholders and is no longer in the nomination, the shares voted in favorbest interests of the nominee will be voted for such other personsCompany and its shareholders. In addition:

Accordingly, the Board of Directors believes that cumulative voting is no longer in the best interests of the Company and its shareholders and unanimously recommends that elimination of cumulative voting is a prudent step that would institute a system of representational fairness in which each shareholder’s influence in director elections is proportionate to the number of shares owned by such shareholder.

Required Vote

The affirmative vote of a majority of the votes cast on the matter, assuming a quorum is present at the Special Meeting (in person or by proxy), is required for approval of this amendment to the Articles of Incorporation.

THE BOARD OF DIRECTORS UNANIMOUSLY RECOMMENDS THAT SHAREHOLDERS VOTE “FOR” THIS AMENDMENT TO THE ARTICLES OF INCORPORATION OF THE COMPANY.

Proposal 2: Amending the Articles of Incorporation of the Company to add exculpatory and indemnification provisions for directors and officers of the Company.

The Amendment

On January 27, 2021, upon recommendation of the Audit Committee, the Board unanimously approved, subject to shareholder approval, an amendment to the Articles of the Company to add Article TWELFTH to provide for robust exculpatory and indemnification provisions for the directors and officers of the Company. The proposed addition of ARTICLE TWELFTH is as follows:

TWELFTH:

(a) A director shall nominate. Eachnot be liable to the Corporation or its shareholders for money damages for any action taken, or any failure to take any action, as a director, except liability for: (i) the amount of financial benefit received by a director to which he is electednot entitled; (ii) an intentional infliction of harm on the Corporation or its shareholders; (iii) a violation of Section 79-4-8.33 of Mississippi Code of 1972, as amended; or (iv) an intentional violation of criminal law.

(b) Subject to hold office until the next Annual Meetingprovisions of Shareholdersthis ARTICLE TWELFTH, the Corporation shall indemnify any person who was or is a party, or is threatened to be made a party, to any threatened, pending or completed claim, action, suit or proceeding, whether civil, criminal, administrative or investigative, including appeals (including any action by or in the right of the Corporation) (“Proceeding”), by reason of the fact that he or she is or was a director, officer, employee or agent of the Corporation, or is or was serving at the request of the Corporation as a director, officer, partner, employee or agent of another Corporation, partnership, joint venture, trust or other enterprise, against expenses (including attorneys’ fees), judgments, fines and until his successoramounts paid in settlement actually and reasonably incurred by him or her in connection with such a Proceeding: (A) to the fullest extent permitted by the Mississippi Business Corporation Act in effect from time to time (the "Act") and (B) despite the fact that such person has failed to meet the standard of conduct set forth in Miss. Code Ann. § 81-5-105 (1972, as amended), or would be adjudged liable to the Corporation in connection with a Proceeding by or in the right of the Corporation. Any indemnification under this ARTICLE TWELFTH shall be made by the Corporation only as authorized in the specific case upon a determination that indemnification of the director, officer, employee or agent is electedproper in the circumstances because he or she has met the applicable standard of conduct set forth in Section (a) and qualified.

The persons who will(b) of this ARTICLE TWELFTH, such determination to be elected tomade (i) by the Board of Directors willby majority vote of a quorum consisting of directors not at the time parties to the Proceeding, (ii) if a quorum cannot be the five nominees receiving the largest numberobtained under (i), by majority vote of votes.

A majority of the persons nominated are independent as defined in the OTCQX listing standards. No family relationship exists between any director, executive officer or person nominated to become a director of the Company.

None of the persons nominated held directorship at any time during the past five years at any public company, with the exception of the Company, or registered investment company.

Drew Allen

Mr. Allen, age 66, has served as an independent director of the Company since 1996 and of the Bank since 1993. He earned his Bachelor of Science degree with an emphasis in Marketing from Mississippi State University. Mr. Allen is President of Allen Beverages, Inc., a beverage distributor headquartered in Gulfport, MS. He holds numerous leadership positions in professional, civic and charitable organizations on both a local and state level and has received regional and local recognition for his service. The Company believes that Mr. Allen’s qualifications to serve on the Board include his executive leadership and management experience.

Rex E. Kelly

Mr. Kelly, age 70, has served as an independent director of the Company since 2002 and of the Bank since 1996. Until his retirement in 2005, he was the Director of Corporate Communications of Mississippi Power Company, a subsidiary of The Southern Company, Gulfport, MS. Mr. Kelly earned his Bachelor of Science degree in American Studies from the University of Southern Mississippi and has held leadership positions in professional, civic and community organizations and has received national and regional recognition for outstanding leadership. He is currently a consultant in the area of strategic communications/corporate and public relations. The Company believes that Mr. Kelly’s qualifications to serve on the Board include his corporate strategy, communications and organizational acumen.

Dan Magruder

Mr. Magruder, age 70, has served as an independent director of the Company since 2000 and of the Bank since 1993 and has also served as Vice Chairman of the Company board since 2003. Mr. Magruder earned his Bachelor of Engineering degree from Vanderbilt University. During his service in the U.S. Navy, he attended the Navy Nuclear Power School, Nuclear Submarine Prototype School and Submarine School. Subsequently, Mr. Magruder assumed executive positions with several organizations before joining Rex Distributing Co., Inc., a beverage distributor headquartered in Gulfport, MS, as president in 1987. He retired from Rex Distributing Co., Inc. in 2016. Mr. Magruder has provided leadership to a variety of professional, civic and charitable organizations. The Company believes that Mr. Magruder’s qualifications to serve on the Board include his executive leadership and management experience.

Jeffrey H. O’Keefe

Mr. O’Keefe, age 61, has served as an independent director of the Company since 2011 and of the Bank since

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1986. Mr. O’Keefe earned his Bachelor of Science in Business Administration from the University of Southern Mississippi. He has been with Bradford-O’Keefe Funeral Homes, Inc. since 1970 and served as its President and Chief Executive Officer from 1983 until 2017, at which time he was named Chairman. During his career, he has held leadership positions with a number of professional, community and civic organizations. The Company believes that Mr. O’Keefe’s qualifications to serve on the Board include his executive leadership and management experience.

Chevis C. Swetman

Mr. Swetman, age 69, has served as a director of the Company since 1984 and of the Bank since 1975. He has served as Chairman of the Company since 1994. Mr. Swetman is President and Chief Executive Officer of the Company and the Bank and has been employed with the Bank since 1971. He earned a Bachelor of Science in Finance degree and a Master of Business Administration degree from the University of Southern Mississippi. In addition to his role with the Company, Mr. Swetman has been recognized numerous times for his leadership in professional, civic and community organizations. The Company believes that Mr. Swetman’s qualifications to serve on the Board encompasses his 45 years of experience in banking, including serving as Chairman for more than 20 years.

Item 2: Appointment of Independent Registered Public Accounting Firm

Porter Keadle Moore, LLC, of Atlanta, Georgia, has served as the independent registered public accounting firm for the Company since 2006 andcommittee duly designated by the Board of Directors has appointed(in which designation directors who are parties may participate), consisting of two or more directors not at the firm as auditors fortime parties to the fiscal year ending December 31, 2018.

The Company has been advised that neither the firm nor any of its partners has any direct or any material indirect financial interest in the securities of the Company or any of its subsidiaries, except as auditors and consultants on accounting procedures and tax matters. The Board does not anticipate that representatives of Porter Keadle Moore, LLC, will attend the Annual Meeting.

Although not required to do so,Proceeding, (iii) by special legal counsel (a) selected by the Board of Directors has chosen to submitor its appointment of Porter Keadle Moore, LLC, for ratification by the Company’s shareholders. It is the intention of the person namedcommittee in the Proxy to vote such Proxy “FOR” the ratificationmanner prescribed in (i) or (ii) or (b) if a quorum of this appointment. If this proposal does not pass, the Board of Directors cannot be obtained under (i) and a committee cannot be designated under (ii), selected by majority vote of the full Board of Directors (in which selection directors who are parties may participate), (iv) by the shareholders (but shares owned by or voted under the control of directors who are at the time parties to the Proceeding may not be voted on the determination) or (v) by a court.

(c) The Corporation upon request shall pay or reimburse any person who was or is a party, or is threatened to be made a party, to any Proceeding by reason of the fact that he or she is or was a director, officer, employee or agent of the Corporation, or is or was serving at the request of the Corporation as a director, officer, partner, employee or agent of another corporation, partnership, joint venture, trust or other enterprise, for his or her reasonable expenses (including legal fees) in advance of final disposition of the Proceeding as long as (1) such person furnishes the Corporation a written undertaking, executed personally or on his or her behalf, to repay the advance if it is ultimately determined by a judgment or other final adjudication that his or her acts or omissions did violate the applicable standard of conduct set forth in Section (a) or (b) of this ARTICLE TWELFTH, which undertaking must be an unlimited general obligation of such person, and which shall be accepted by the Corporation without reference to final ability to make repayment or to collateral and (2) a determination is made by any of the persons described in (i) through (iv) of Section (b) of this ARTICLE TWELFTH that the facts then known to those making the determination would not preclude indemnification under this ARTICLE TWELFTH. Such request need not be accompanied by the affirmation otherwise required by the Act.

(d) The foregoing right of indemnification or reimbursement shall not be exclusive of other rights to which such persons may be entitled as a matter of law.

(e) The Board of Directors or shareholders of the corporation may adopt a policy for the indemnification of directors, officers, employees and agents of the corporation, as they from time to time see necessary or prudent in the best interest of the corporation.

(f) The corporation may, upon the affirmative vote of a majority of its Board of Directors, purchase insurance for the purpose of indemnifying individuals to the extent that such indemnification is allowed in the preceding paragraphs. Such insurance may, but need not be, for the benefit of all directors, officers, or employees.

(g) The invalidity or unenforceability of any provision of this ARTICLE TWELFTH shall not in any way affect the remaining provisions hereof, which shall continue in full force and effect. Neither the amendment nor repeal of this ARTICLE TWELFTH, nor the adoption or amendment of any other provision of the Corporation's Bylaws or the Articles of Incorporation inconsistent with this ARTICLE TWELFTH, shall apply to or affect in any respect the applicability of this ARTICLE TWELFTH with respect to any act or failure to act which occurred prior to such amendment, repeal or adoption.

Background: Reasons for the Amendment; Recommendation of the Board

Article VI of the Company’s Bylaws currently provides the Company with the authority to indemnify the Company’s directors, officers and employees. Such a provision was part of the Company’s original Bylaws adopted in 1985, and it remained unchanged until it was amended to be consistent with the proposed ARTICLE TWELFTH at the meeting of the Company’s Board on January 27, 2021. Subsequent to the Company’s formation, Mississippi law was amended to provide mandatory exculpation and indemnification for bank and bank holding company directors and officers in the performance of their duties except in limited circumstances, some of which require inclusion as part of the Company’s Articles of Incorporation.

The Board believes it is appropriate to adopt provisions within the Company’s Articles in accordance with current Mississippi law, including Miss. Code Ann. § 79-4-2.02 and the updated bank director statute in § 81-5-105, to require the indemnification and exculpation of directors and officers in accordance with best governance practice. Including such provisions is common market practice among peers and will reconsiderhelp the matter.Company solicit strong candidates for directors and officers as such needs arise.

Required Vote

The affirmative vote of a majority of the votes cast on the matter, assuming a quorum is present at the Special Meeting (in person or by proxy) is required for approval of this amendment to the Articles of Incorporation.

The Board of Directors unanimously recommends that shareholders vote “FOR” this appointmentamendment to the Articles of Porter Keadle Moore, LLC.

III. Corporate Governance

General

The Company has a long-standing commitment to strong corporate governance practices. The practices provide an important framework within which our Board of Directors and Management can pursue the strategic objectivesIncorporation of the Company and ensure long-term vitality for the benefit of our shareholders.Company.

Proposal 3: The cornerstone of our practices is an independent and qualified board of directors. All directors are elected annually by the shareholders, and the membership of all board committees are composed entirely of independent directors. The Company’s Code of Conduct, which is posted on its website,www.thepeoples.com, applies to all directors, officers and employees.

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Board Independence

Messrs. Allen, Kelly, Magruder and O’Keefe are independent as defined by OTCQX listing standards.

Board Composition

The Company’s Nominating Committee Charter definesAt the process and criteria for selecting individualsSpecial Meeting, we may ask shareholders to be nominated for electionvote to adjourn the Board of Directors. It is the Company’s intention that all nominees, including those recommended by shareholders, be considered using this same process and criteria.

In accordance with the by-lawsSpecial Meeting to solicit additional proxies in favor of the Company, the Nominating Committee determines, subjectapproval of Proposal 1 and/or Proposal 2 if we have not obtained sufficient votes to the Company’s by-laws, the sizeapprove both of the Board and developsproposals. Approval of Proposal 3 to adjourn the meeting requires the affirmative vote of a slatemajority of nominees to stand for electionthe votes cast on the matter, assuming a quorum is present at the annual meeting of shareholders. In developing the slate, the Nominating Committee considers the qualifications set forth in its Charter. Minutes of all Nominating Committee meetings are maintained. The Nominating Committee reports its recommendations regarding the slate of nominees to the Board of Directors for their ratification. Once the slate is ratified, the Board of Directors instructs the President of the Company to take such actions as are required to distribute proxy materials to the shareholders in accordance with the Company’s by-laws and applicable regulatory requirements.

Further, it is the Company’s intention that the minimum qualifications for nominees be those individuals who have an understanding of the Company’s role in the local economy and who have demonstrated integrity and good business judgment. The Committee is encouraged to consider geographic and demographic diversity among candidates with financial, regulatory and/Special Meeting (in person or business experience, but not so as to compromise the goal of attracting the most qualified individual candidates.

Director Nomination

Since the Company was founded in 1984, there has never been a conflict or dispute regarding director nominations. Accordingly, the Company does not feel that it is necessary at this time to provide a process whereby nominations may be made directly to the Nominating Committee, and this committee does not have a policy for considering candidates recommended by shareholders. However, in accordance with the Company’s by-laws, shareholders may make nominations for election to the Board by delivering written nominations to the Company’s President not less than 14 days or not more than 50 days prior to the meeting when the election is to be held. If the Company does not give at least 21 days’ notice of the meeting, shareholders are allowed to make nominations by mailing or delivering same to the President not later than the close of business on the seventh day following the day on which the notice of meeting is mailed. The Company welcomes nominations from its shareholders; however, nominations not made in accordance with the by-laws may be disregarded by the Chairman of the meeting. The Company has never received nominations from shareholders.

Shareholder nominations shall include 1) the name, age, business address and residence address of the nominee, 2) the principal occupation or employment of the nominee, 3) the number of shares of the Company’s common stock which are beneficially owned by the nominee, 4) written consent from the potential nominee, and 5) other information relating to the nominee that may be required under federal law and regulations governing such interests. The written notice shall also include the 1) name and address of the shareholder making the nomination, and 2) the number of shares of the Company’s common stock which are beneficially owned by the shareholder making the nomination.

Of the five directors recommended for election at the 2018 Annual Meeting, all nominees were elected as directors at our 2017 Annual Meeting.

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Board Attendance

There were six meetings of the Board of Directors of the Company held during 2017. All directors attended 75% or more of the total number of meetings of the Board of Directors and the total number of meetings held by the committees on which they served. The Board of Directors at its discretion, meets onunanimously recommends a periodic basis in executive session with only non-employee directors in attendance.

The Company does not have a written policy that members ofvote “FOR” the Board of Directors attendProposal to adjourn the Annual Meeting of Shareholders, but they are encouraged to do so. Three of the directors of the Company were in attendance at the 2017 Annual Meeting.

Board Leadership

The Chairman leads the Board of Directors and oversees board meetings and the delivery of information necessary for the Board of Directors’ informed decision-making. The Chairman also serves as the principal liaison between the Board of Directors and our Management. The Board of Directors determines whether the role of the Chairman and the Chief Executive Officer should be separated or combined based on its judgment as to the structure that best serves the interests of the Company. Currently, the Board of Directors believes that the positions of Chairman and Chief Executive Officer should be held by the same person as this combination has served and is serving the Company well by providing unified leadership and direction. The Vice Chairman of the Board of Directors is designated as the lead independent director and calls and presides over executive sessions of the Board of Directors.

Board Committees

The Company has the following standing committees: an Audit Committee, a Compensation Committee and a Nominating Committee.

The Company’s Audit Committee is currently composed of independent directors Drew Allen, Rex E. Kelly, Dan Magruder and Jeffrey H. O’Keefe. The Company’s Board of Directors has determined that Drew Allen is an audit committee financial expert as that term is defined in pertinent SEC regulations. The Board based its determination on the experience of Mr. Allen as the chief executive officer of his company in analyzing and evaluating financial statements and consulting with his company’s auditors as well as his long tenure on the Company’s Audit Committee. Mr. Magruder serves as chairman of the Audit Committee, which met ten times during 2017. The Audit Committee may, from time to time, call upon certain advisors or consultants as it deemsmeeting, if necessary. The Audit Committee acts pursuant to its Audit Committee Charter. The Audit Committee submits its report to the shareholders in Section X below. The Audit Committee’s Charter is available for review on the Company’s website atwww.thepeoples.com.

The Compensation Committee’s primary responsibility is to aid the Board of Directors in discharging its duties by recommending to the full Board the compensation of the Company’s Chief Executive Officer and other named executive officers of the Company. The Chief Executive Officer may attend meetings of the Compensation Committee to discuss executive performance and compensation. The Executive Vice-President attends each meeting of the Compensation Committee and presents his insights and suggestions. The Executive Vice-President and Chief Financial Officer each provide information and analysis to the Compensation Committee that is used in determining the named executive officers’ compensation. The Compensation Committee has been authorized by the Board of Directors to engage consultants, experts, and/or other advisors that are knowledgeable regarding compensation practices within the financial services industry. The hiring of such consultants is at the discretion of the Committee. The Compensation Committee did not engage any consultants during 2017. The Committee, composed of independent directors Drew Allen, Rex E. Kelly, Dan Magruder and Jeffrey H. O’Keefe, met one time during 2017 to review the executive

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officers’ performance and consider bonuses for the preceding year and salaries for the upcoming year. Mr. Allen serves as chairman of the Compensation Committee. The Compensation Committee’s Charter is available for review on the Company’s website atwww.thepeoples.com.

The Company’s Nominating Committee is composed of independent directors Drew Allen, Rex E. Kelly, Dan Magruder and Jeffrey H. O’Keefe. Mr. Kelly serves as chairman of the Nominating Committee. The Nominating Committee acts pursuant to its Nominating Committee Charter which is available on the Company’s website atwww.thepeoples.com. The Nominating Committee met seven times during 2017 to nominate individuals to stand for election as directors of the Company and to consider nominees to serve as directors of the Bank.

Board’s Role in Risk Management

Risk is an integral part of the deliberations of the Board of Directors and its committees throughout the year. The Audit Committee and the Board of Directors annually review the Company’s risk assessments, considering management’s plan for mitigating these risks. The Board receives monthly written reports relating to the Company’s risk management and meets frequently with the Chief Risk Officer and other members of Management. The Audit Committee at its discretion meets on a periodic basis with managers from the Audit, Compliance, Security, I/T Security and Loan Review Departments.

Shareholder Communication

The Company has implemented a shareholder communication process to facilitate communications between shareholders and the Board of Directors. Any shareholder of the Company who wishes to communicate with the Board of Directors, a committee of the Board, the independent directors as a group, or any individual member of the Board, may contact Greg M. Batia, Vice President and Auditor, P. O. Box 1172, Biloxi, MS 39533-1172, or at his e-mail address:gbatia@thepeoples.com. Mr. Batia will compile and submit on a periodic basis all shareholder correspondence to the entire Board of Directors, or, if and as designated in the communication, to a committee of the Board, the independent directors as a group or an individual Board member.

IV. III. Voting Securities and Principal Holders Thereof

On February 16, 2018,3, 2021, the Company had outstanding 5,083,1864,878,577 shares of its Common Stock $1.00 par value, owned by 445[●] shareholders. The following is certain information about the shareholders beneficially owning more than five percent of the outstanding shares of the Company. (1)

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(1) As a practical expediency in creating this preliminary proxy statement, the beneficial ownership presented is as of December 31, 2020, unless otherwise indicated below.

(2) Shares held by the Employee Stock Ownership Plan (“ESOP”) are allocated to the participants’ account. The participants retain voting rights and the trustee of the ESOP, The Asset Management and Trust Services Division of The Peoples Bank, Biloxi, Mississippi, has dispositive powers.

(3) Participants with shares allocated to their ESOP account have voting rights but no dispositive powers. Participants with shares allocated to their 401(k) account have voting rights and dispositive powers.

(4) Includes (i) shares allocated to Mr. Quave’s ESOP account; (ii) shares allocated to Mr. Quave’s 401(k) account; (iii) shares owned by Mr. Quave’s wife, of which Mr. Quave has neither voting rights nor dispositive powers; and (iv) shares owned by Mr. Quave’s minor children, of which Mr. Quave has voting rights and dispositive powers.

(5) Includes (i) shares allocated to Mr. Swetman’s ESOP account; (ii) shares allocated to Mr. Swetman’s 401(k) account; (iii) shares owned by Mr. Swetman and his wife jointly, of which Mr. Swetman shares voting rights and dispositive powers with his wife; (iv) shares owned by Mr. Swetman’s minor children, of which Mr. Swetman has voting rights and dispositive powers; (v) shares owned by Mr. Swetman’s IRA account, of which Mr. Swetman has voting rights and dispositive powers and (vi) shares owned by a private company, in which Mr. Swetman has a 94% ownership interest, of which Mr. Swetman has both voting rights and dispositive powers.

(6) Includes (i) shares allocated to Mr. Swetman’s ESOP account; (ii) shares allocated to Mr. Swetman’s 401(k) account; (iii) shares owned by Mr. Swetman and his wife jointly, of which Mr. Swetman shares voting rights and dispositive powers with his wife; (iv) shares owned by Mr. Swetman's IRA account, of which Mr. Swetman has voting rights and dispositive powers; and (v) shares owned by the IRA account of Mr. Swetman's wife, of which Mr. Swetman has neither voting rights nor dispositive powers.

(7) According to Amendment No. 4 to Schedule 13G filed with the SEC on February 13, 2020, by Jeffrey L. Gendell, as of December 31, 2019, Jeffrey L. Gendell, through limited liability companies for which he serves as managing member, has shared voting power and shared dispositive power with respect to 472,701 shares of the Company’s Common Stock. The forgoing information has been included solely in reliance upon the disclosures contained in the referenced amended Schedule 13G.

(8) According to Schedule 13G filed with the SEC on February 10, 2020, by Jason A. Stock and William C. Waller, as of December 31, 2019, Jason A. Stock and William C. Waller, through a limited liability company and a limited partnership for which they serve as managers or managing directors, have shared voting power and shared dispositive power with respect to 260,022 shares of the Company’s Common Stock. The forgoing information has been included solely in reliance upon the disclosures contained in the referenced Schedule 13G.

(9) According to Amendment No. 1 to Schedule 13D filed with the SEC on December 23, 2020, by Joseph Stilwell, as of December 18, 2020, Joseph Stilwell, through a limited liability company and limited partnerships for which he serves as manager, has shared voting power and shared dispositive power with respect to 484,645 shares of the Company’s Common Stock. The forgoing information has been included solely in reliance upon the disclosures contained in the referenced amended Schedule 13D.

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V.IV. Ownership of Equity Securities by Directors and Executive Officers

The table below sets forth the beneficial ownership of the Company’sCompany's Common Stock as of February 16, 2018,3, 2021, by persons who are currently serving as directors persons nominated for election at the Annual Meeting and all named executive officers. Also shown is the ownership by all directors and executive officers as a group. The persons listed have sole voting and dispositive power as to all shares except as indicated. Percent of outstanding shares of Common Stock owned is not shown where less than one percent.

Beneficial Ownership of Equity Securities by Directors and Executive Officers

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B. Responsibility of the Compensation Committee:

The primary responsibility of the Compensation Committee is to aid the Board in discharging its duties by recommending to the full Board the compensation of the Company’s Chief Executive Officer and other named executive officers of the Company.

C. Role of Executive Officers:

The Chief Executive Officer may attend the meetings of the Compensation Committee to discuss executive performance and compensation. The Executive Vice-President attends each meeting of the Compensation Committee and presents his insights and suggestions. The Executive Vice-President and Chief Financial Officer each provide information and analysis to the Compensation Committee that is used in determining the named executive officers’ compensation.

D. Consultants, Experts and/or Other Advisors:

The Compensation Committee has been authorized by the Board of Directors to engage consultants, experts, and/or other advisors that are knowledgeable regarding compensation practices within the financial services industry. The hiring of such consultants is at the discretion of the Committee. The Committee did not engage any consultants in 2017.

E. Factors used to Determine Compensation:

The Compensation Committee’s considerations consist of, but are not limited to, analysis of the following factors: financial performance of the Company, including ROA, return on equity, and management of assets, liabilities, capital and risk. Additionally, the Compensation Committee uses annual compensation surveys to compare the compensation of positions in similar financial institutions of comparable asset size. Specifically, the Bank Administration Institute (“BAI”) Bank Cash Compensation Survey, which includes compensation data obtained from banks with assets between $500 million and $1 billion in a region that includes Alabama, Arkansas, Iowa, Kansas, Kentucky, Louisiana, Minnesota, Mississippi, Missouri, Nebraska, North Dakota, Ohio, Oklahoma, South Dakota and Tennessee and the Mississippi Bankers Association (“MBA”) Salary Survey, which includes compensation data obtained from banks in Mississippi with assets between $500 million and $1 billion, are used as reference material in evaluating the compensation of the named executive officers; however, the Company does not benchmark compensation to any specific company or companies. The Company does not have access to the identity of the specific companies included in these surveys.

In determining total compensation, the Committee also considers the performance of the individual named executive officers in areas such as: the scope of responsibility of the executive; leadership within the Company, the community and the financial services industry; achievement of work goals; and whether the Company, under the executive’s leadership, has been a good corporate citizen while enhancing shareholder value.

All of these factors are considered in the context of the complexity and the difficulty of managing business risks in the prevailing economic conditions and regulatory environment. The analysis is conducted with respect to each of the named executive officers, including the Chief Executive Officer.

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F. Compensation Components:

The named executive officers’ total compensation package includes several components. The Company rewards current performance and achievement of short-term goals primarily through salaries and bonuses. Other deferred compensation elements, including(1) As a practical expediency in creating this preliminary proxy statement, the Executive Supplemental Income Plan and Deferred Compensation Plan, are designed to meet long-term objectives including retaining high-performing executives and to plan for management succession as well as to reward loyalty.

Salaries

Salaries are the foundation of each named executive officer’s total compensation package and are normally the largest single component. Salarybeneficial ownership presented is the only guaranteed cash payment a named executive officer receives. The Company’s goal is to provide an assured level of cash compensation in the form of salary to attract and retain high caliber executives. Job specific knowledge and experience as well as leadership ability are recognized with salary.

In establishing the salary of the Chief Executive Officer for 2017, the Committee primarily considered Mr. Swetman’s performance and the performance of the Company during 2016 and the compensation levels of chief executive officers of comparable financial institutions. In considering the performance of the Company, the Committee considered the Company’s ROA, the change in problem assets and asset growth, but utilized no objective criteria. The Committee utilized asset size peer group compensation data as provided by the MBA and the BAI.

For other named executive officers, the Committee’s recommendation concerning salaries was based upon the compensation levels of executive officers of comparable financial institutions, the performance of the Company during 2016 and the individual performance of these named executive officers. The performance of the Company for purposes of establishing salaries was evaluated based on ROA. Individual performance was measured using criteria such as level of job responsibility, achievement of work goals and management skills. Among the goals considered was the reduction of problem assets. The Committee also considered asset size peer group compensation data as provided by the MBA and BAI for executive officers with similar duties and responsibilities.

Bonuses

The Compensation Committee awards performance bonuses based upon pre-determined performance objectives in accordance with The Peoples Bank Bonus Plan (“The Bonus Plan”). Performance bonuses are generally the other cash component paid to named executive officers on an annual basis and may be determined by The Bonus Plan. The Chief Executive Officer and all other named executive officers are eligible to receive a bonus which is based on the financial performance of the Company. The specific formula and pre-determined goals under The Bonus Plan were established by the Compensation Committee using the Company’s ROA. The performance bonus calculation, which is approved by the Compensation Committee, allows the named executive officer to earn up to a maximum percentage of their salary on established ROA targets. The targets and bonus calculations as a percentage of salary and targets are:

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The Compensation Committee may, at its discretion, also recommend to the Board that the executive officers receive an additional bonus which is determined on a subjective basis. If this additional discretionary bonus is recommended, the Committee documents its actions in the minutes of their committee meetings. No performance based or discretionary bonuses were awarded to executive officers for 2017 due to the performance of the Company.

Executive Supplemental Income Plan

The Company maintains an Executive Supplemental Income Plan (“ESI”) which provides executives with salary continuation benefits upon their retirement, or death benefits to their named beneficiary in the event of their death. Executives of the Company and the Bank are selected to participate in the plan at the discretion of the Board of Directors. All named executive officers of the Company have been selected to participate in the plan. ESI benefits are based upon position and salary of the named executive officer at retirement, disability or death. Normal retirement benefits under the plan are equal to 67% of salary for the Chief Executive Officer, 58% of salary for the Executive Vice-President and 50% of salary for the other named executive officer at the time of normal retirement, and are payable monthly over a period of 15 years. The ESI is administered by Banc Consulting Partners, who also provide guidance to the Company relating to the valuation method and assumptions.

The ESI was established in 1988, at which time Mr. Swetman became a participant. Miss Wood and Mr. Fulmer became participants after their date of hire at the discretion of the Board.

Benefits are also available in the event of death, disability or early retirement. Under early retirement provisions, if separation from service occurs on or after the early retirement date and prior to the normal retirement date, the Company will pay the named executive officer a reduced benefit. The annual benefit set forth for normal retirement will be reduced by one-half percent (0.5%) for each month or partial month between separation from service and the normal retirement date. The benefit will be paid monthly over a period of 15 years. Benefits will commence on the last day of the month following the named executive officer’s separation from service. The early retirement date means the date the named executive officer attains at least age 55, has at least 15 years of employment at the Company, and has participated in this plan for a minimum of five years. As of December 31, 2017, Miss Wood and Mr. Fulmer are the only named executive officers eligible to receive this benefit. The normal retirement date means the date the named executive officer attains age 65.

If separation from service occurs prior to the early retirement date or prior to the normal retirement date, the Company will pay the named executive officer his or her executive benefit accrual balance as of his or her separation from service. The benefit will be paid in a single lump-sum within 60 days of separation from service.

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If a named executive officer becomes disabled prior to the normal retirement date, the Company will pay the named executive officer his or her annual benefit as defined under normal retirement. The benefit will begin the last day of the month commencing with the month following the named executive officer’s normal retirement date and the benefits will be paid monthly over a period of 15 years.

If the named executive officer dies prior to early retirement, normal retirement or disability, the named executive officer’s named beneficiary is entitled to full benefits under the ESI. If the named executive officer dies while receiving benefits, the named beneficiary is entitled to the remainder of any unpaid benefits.

Upon a change of control prior to separation from service, the Company will pay the named executive officer his or her annual benefit as defined under normal retirement. The benefit will begin the last day of the month commencing with the month following the named executive officer’s normal retirement date, or, for named executive officers who have already attained their normal retirement date, their separation from service, and the benefits will be paid monthly over a period of 15 years.

Each named executive officer’s agreement under the ESI may be terminated by the Company. In the event the named executive officer’s agreement under the ESI is terminated, the Company will pay the named executive officer his or her executive accrual balance as of the termination of the agreement, or, if a change of control has occurred, the normal retirement benefit. The benefit will begin on the first date allowable under the ESI and the benefit will be paid over a period of 15 years, or, in some special circumstances, paid in one lump sum.

If any amount is required to be included in the income of a named executive officer due to a failure of his or her ESI agreement to meet the requirements of Section 409A of the Internal Revenue Code, the named executive officer may petition the plan administrator for a distribution of that portion of his or her executive benefit accrual that is required to be included in the named executive officer’s income. Upon the grant of such a petition, which will not be unreasonably withheld, the Company will distribute to the named executive officer an amount equal to the portion of the executive benefit accrual required to be included in his or her income, which amount cannot exceed the named executive officer’s unpaid executive benefit accrual. Any distribution will affect and reduce the named executive officer’s benefits to be paid under his or her ESI agreement.

The benefits will be paid out of the general assets of the Company. The Company has elected to purchase life insurance contracts, more specifically Bank Owned Life Insurance (“BOLI”), each of which it may use as a source to fund these future benefits. The Company is the owner and beneficiary of these life insurance policies, which are a general asset of the Company.

Deferred Compensation Plan

The Company maintains a Deferred Compensation Plan for those executives of the Bank holding the title of vice-president, senior vice-president or executive vice-president and approved for participation in the plan by the Board of Directors. Except for the Chief Executive Officer, all named executive officers participated in the plan in 2017. The plan provides each named executive officer a fixed benefit upon his or her early retirement, normal retirement or disability, or a death benefit to a named beneficiary in the event of the named executive officer’s death. The benefit under the plan is $100,000, payable monthly over a 15 year period, upon the named executive officer’s early retirement, normal retirement or disability and, in the event of a named executive officer’s death, the benefits will be paid to his or her beneficiary. Should the named executive officer separate from service prior to his or her early retirement, normal retirement, disability or death, he or she forfeits all benefits under the plan. In addition, if within three years following his or her separation from service, a named executive officer becomes engaged in the banking business within a certain geographic area around the Company, the named executive officer will forfeit all benefits under the plan.

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The Company has purchased life insurance contracts which it may use as a source to fund these future benefits. The Company is the owner and beneficiary of these life insurance policies, which is a general asset of the Company.

The Deferred Compensation Plan was established in 1992, at which time Miss Wood became a participant. Mr. Fulmer became a participant upon his promotion to vice-president of the Bank.

If separation from service occurs prior to a named executive officer’s normal retirement date, the named executive officer will be entitled to full benefits provided he or she has met the early retirement eligibility. The early retirement date means the first day of any month coincident with or following the month in which the named executive officer attains at least age 55 and has at least 10 years of employment at the Company. The normal retirement date means the date the named executive officer attains age 65. As of December 31, 2017, Miss Wood and Mr. Fulmer are the only named executive officers eligible to receive benefits under the Deferred Compensation Plan.

If a named executive officer becomes disabled, he or she is entitled to full benefits under the Deferred Compensation Plan.

If the named executive officer dies prior to early retirement, normal retirement or disability, the named executive officer’s named beneficiary is entitled to full benefits under the Deferred Compensation Plan. If the named executive officer dies while receiving benefits, the named beneficiary is entitled to the remainder of any unpaid benefits.

In the event of a change of control, unless the Deferred Compensation Plan is terminated by the transferee, purchaser or successor entity within 120 days of the change of control, no named executive officer will be entitled to a distribution under this plan as a result of the change in control. If the Deferred Compensation Plan is terminated within 120 days of a change of control, then each named executive officer will become immediately eligible to receive the present value of his or her benefits under this plan. In addition, in the event the Deferred Compensation Plan is continued but a named executive officer is involuntarily terminated within 180 days of a change of control, the terminated named executive officer will be eligible to receive his or her benefits under this plan. Such benefits will be calculated by taking the present value of the benefits provided and such benefits will be paid in a lump sum within 180 days of the change in control.

Split-Dollar Agreement

The Company owns endorsement split-dollar policies, of which the Bank is the owner and beneficiary, which provide a guaranteed death benefit of $150,000 to the Chief Executive Officer’s beneficiaries.

Employee Stock Ownership Plan

The Company maintains an Employee Stock Ownership Plan covering all eligible employees of the Company. The Board determines the total contribution to the Plan, which is allocated to all participants based on their compensation.

401(k) Plan

The Company maintains a 401(k) Plan in which eligible employees of the Company may choose to participate. The Board determines the formula for the matching contribution to the Plan, which is currently 75% of the employee’s contribution (up to 6% of compensation).

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G. Accounting and Tax Treatment:

While the Compensation Committee considers the accounting and tax implications in the design of the compensation program, these have not had a significant impact in their decision-making process.

H. Shareholder Approval of Compensation of Named Executive Officers:

At our 2016 annual meeting of shareholders, the Company held its second advisory (non-binding) vote on the compensation of the named executive officers. A majority of our shareholders voted in favor of the resolution approving the 2015 compensation of the named executive officers. The Compensation Committee considered these shareholders’ votes in determining the 2016 compensation of the named executive officers. Shareholders will be provided their next opportunity to cast an advisory (non-binding) vote on the compensation of the named executive officers at the 2019 annual meeting of shareholders, at which time the frequency of submitting the compensation of the named executive officers to the shareholders in the future will be submitted for an advisory (non-binding) vote as well.

There are no employment contracts with the executive officers.

Summary Compensation Table

The Summary Compensation Table below displays the total compensation awarded to, earned by or paid to the named executive officers for 2017 and 2016.

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Estimated Payments from the Executive Supplemental Income Plan

The table below indicates the amount of compensation payable to each named executive officer under the Executive Supplemental Income Plan, as applicable upon different termination events. The amounts shown assume a termination date of December 31, 2017 and present total amounts for each scenario.

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Estimated Payments from the Deferred Compensation Plan

The table below indicates the amount of compensation payable to each named executive officer under the Deferred Compensation Plan, as applicable upon different termination events. The amounts shown assume a termination date of December 31, 2017 and present total amounts for each scenario.

Directors’ Compensation

During 2017, directors who are employees of the Bank did not receive any compensation for serving on the Board of the Bank or the Company or on any Board committee. All non-employee directors received an annual retainer of $3,500. Non-employee directors additionally receive $500 per board meeting attended and $300 per committee meeting attended. The chairman of the Audit Committee received $500 per audit committee meeting attended. The chairman of all other committees received $400 per committee meeting attended.

The Company offers a Directors’ Deferred Income Plan whereby directors of the Company and the Bank are given an opportunity to defer receipt of their annual director’s fees. For those who choose to participate, benefits are payable monthly for 10 years beginning on the first day of the month following the later of the director’s normal retirement age or separation from service. Normal retirement age is 65. The amount of the benefit will vary depending on the fees the director has deferred and the length of time the fees have been deferred. Interest on deferred fees accrues at an annual rate of 10%, compounded annually. After payments have commenced, interest accrues at an annual rate of 7.50%, compounded monthly. In the event of the director’s death, benefits are payable to the director’s named beneficiary. The Company has purchased life insurance contracts which it may use as a source to fund these future benefits. The Company is the owner and beneficiary of these life insurance policies, which are a general asset of the Company.

The Company also offers an Outside Directors’ Supplemental Income Plan to provide a benefit to its non-employee directors. The benefit is based upon the age of the Outside Director upon his appointment to the

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board. Directors Drew Allen and Dan Magruder are entitled to receive $5,000 annually for 10 years, Director Rex E. Kelly is entitled to receive $4,000 annually for 10 years and Director Jeffrey H. O’Keefe is entitled to receive $6,000 annually for 10 years. The benefit is payable upon the later of the Outside Director’s attainment of age sixty-five or cessation of service as a director. An Outside Director must serve as an Outside Director until the earlier of his death or 10 consecutive years as an Outside Director to be entitled to any benefit. In the event of the death of the Outside Director, their beneficiary shall receive a death benefit totaling the remainder of benefits due the Outside Director. The death benefit will be paid in a single lump sum within 90 days following the Outside Director’s death. The Company has purchased life insurance contracts which it may use as a source to fund these future benefits. The Company is the owner and beneficiary of these life insurance policies, which are a general asset of the Company.

Director Compensation Table

The Director Compensation Table below presents information on fees earned or paid to directors in 2017.

VII. Transactions with Related Parties

In the ordinary course of business, the Company, through its bank subsidiary, extends loans in the ordinary course of business to certain officers and directors and their personal business interests at, in the opinion of Management, the same terms including interest rates and collateral, as those prevailing at the same time for comparable loans of similar credit risk with persons not related to the Company or its subsidiaries. These loans, which are subject to approval by the Company’s Board of Directors, do not involve more than normal risk of collectability and do not include other unfavorable features. Other than these transactions, there were no material transactions with any such persons during the year ended December 31, 2017.

VIII. Section 16(a) Beneficial Ownership Reporting Compliance

Directors, executive officers of the Company and holders of more than 10 percent of the Company’s outstanding shares are required to file reports under Section 16 of the Securities Exchange Act of 1934.

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Federal regulations require disclosure of any failures to file these reports on a timely basis. Based solely upon a review of Forms 3, 4 and 5 furnished to the Company, the Company believes that during 2017 its officers, directors and greater than 10 percent beneficial owners complied with all filing requirements.

IX. Executive Officers

The following sets forth certain information with respect to the executive officers of the Company who are not also directors as of December 31, 2017:2020.

(2) Participants with shares allocated to their ESOP account have voting rights but no dispositive powers. Participants with shares allocated to their 401(k) account have voting rights and dispositive powers.

(3) Includes shares allocated to Mr. Fulmer’s ESOP account and shares allocated to Mr. Fulmer’s 401(k) account.

(4) Includes shares held by Mr. O’Keefe’s minor child of which Mr. O’Keefe is the custodian and has sole voting rights and dispositive powers.

(5) See Note (6) at Section IV.

(6) Includes shares allocated to Miss Wood’s ESOP account.

X. Audit Committee Report

The Board of Directors has established an Audit Committee, whose responsibilities are set forth in the Audit Committee Charter. All members of the Audit Committee are deemed to be independent, as such term is defined by OTCQX. The Audit Committee oversees the operation of the Company’s Audit Department. The Audit Committee also periodically meets with the independent public accountants for the Company and its subsidiaries, and makes recommendations to the Board of Directors concerning any matters related to the independent public accountants.

The Audit Committee has reviewed and discussed the audited financial statements with Management. The Audit Committee has also discussed with the independent auditors the matters required to be discussed by SAS 61, as amended, as adopted by the Public Company Accounting Oversight Board in Rule 3200T. The Audit Committee has discussed with the independent auditors the auditors’ independence, and has received the written disclosures and the letter from the independent auditors required by applicable requirements of the Public Company Accounting Oversight Board regarding the independent auditor’s communication with the Audit Committee concerning independence. The Audit Committee has considered whether the independent auditors’ provision of non-audit services is compatible with maintaining the auditors’ independence.

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The Audit Committee has discussed with Management and the independent auditors the process used for certifications by the Company’s chief executive officer and chief financial officer which are required for certain periodic filings by the Company with the SEC. The Board of Directors maintains an Audit Committee Charter, which meets the requirements of the Sarbanes-Oxley Act of 2002, and rules promulgated by the SEC.

Based upon the reviews and discussions with Management and the independent auditors as referenced above, the Audit Committee has recommended to the Board of Directors that the financial statements be included in the Annual Report on Form 10-K for the fiscal year ended December 31, 2017 for filing with the SEC.

This report is presented by the Audit Committee, consisting of the following persons:

XI. Independent Accountants’ Fees

The Company’s Audit and Non-Audit Service Pre-Approval Policy (the “Policy”) stipulates that all services provided by the independent accountants are subject to specific pre-approval by the Audit Committee. During 2017, the Company was in compliance with this Policy.

The following table sets forth the aggregate fees billed by Porter Keadle Moore, LLC, for the years ended December 31, 2017 and 2016 for professional services rendered for: Audit Fees, Audit-Related Fees and Tax Fees. Audit Fees includes aggregate fees billed for professional services rendered by Porter Keadle Moore, LLC, for the audit of the Company’s annual consolidated financial statements for the years ended December 31, 2017 and 2016, a review of the annual report on Form 10-K and limited reviews of quarterly condensed consolidated financial statements included in periodic reports filed with the SEC during 2017 and 2016, including out of pocket expenses. Audit-Related Fees include fees billed for professional services rendered by Porter Keadle Moore, LLC, during the years ended December 31, 2017 and 2016, which relate to the audit of the Company’s employee benefit plans for the years ended December 31, 2016 and 2015. Tax Fees include the aggregate fees billed for tax services rendered by Porter Keadle Moore, LLC, during the years ended December 31, 2017 and 2016. These services consisted of tax compliance and tax consultation services. There were no other fees paid to Porter Keadle Moore, LLC, during 2017 and 2016.

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XII.V. Proposals of Shareholders

In order for a shareholder proposal to be included in a Proxy Statement and form of Proxy prepared by the Board of Directors for the Annual Meeting, it must meet the requirements of Rule 14a-8 ofunder the Securities Exchange Act of 1934 and be received at the principal executive offices of the Company not less than 120 days in advance of the first anniversary of the date on which the previous year’s Proxy Statement and form of Proxy were mailed to shareholders. Thus, a shareholder proposal must be have been received on or before November 21, 201816, 2020 in order to be included in the Proxy Statement and form of Proxy for the 2019 annual meeting.Annual Meeting.

In accordance with the Company’s by-laws,Bylaws, as amended, shareholders may make proposals for consideration at the annual meetingAnnual Meeting by delivering their written proposalgiving timely notice thereof in writing to the Company’s PresidentSecretary of the Company. To be timely, a shareholder’s notice must be delivered to or mailed and received at the principal executive offices of the Company not less than 1490 days ornor more than 50120 days prior to the 2018 annual meeting. Ifdate of the Company does not give at least 21Annual Meeting; provided, however, that if fewer than 100 days’ notice or prior public disclosure of the date of the meeting is given or made to shareholders, are allowednotice by the shareholders to make proposals by mailingbe timely must be so delivered or delivering their proposal to the Presidentreceived not later than the close of business on the seventh10th day following the earlier of (i) the day on which thesuch notice of the date of such meeting is mailed.was mailed or (ii) the day on which such public disclosure was made. A shareholder’s notice to the Secretary shall set forth as to each matter the shareholder proposes to bring before a meeting of shareholders (i) a brief description of the business desired to be brought before the meeting and the reasons for conducting such business at the meeting, (ii) the name and address, as they appear on the Company’s books, of the shareholder proposing such business and any other shareholders known by such shareholder to be supporting such proposal, (iii) the class and number of shares of the Company which are beneficially owned by such shareholder on the date of such shareholder’s notice and by any other shareholders known by such shareholder to be supporting such proposal on the date of such shareholder’s notice, and (iv) any material interest of the shareholder in such proposal.

				BY ORDER OF THE BOARD OF DIRECTORS
				Chevis C. Swetman
				Chairman

Exhibit “A”

PROPOSED AMENDMENTS TO ARTICLES OF INCORPORATION

PEOPLES FINANCIAL CORPORATION

21Now Therefore, Be it

Resolved: That the Articles of Incorporation of Peoples Financial Corporation shall be amended by adding a new Article ELEVENTH to read as follows:

ELEVENTH:     The right to cumulate votes in the election of directors shall not exist with respect to shares of stock of the Corporation.

Resolved Further: That the Articles of Incorporation of Peoples Financial Corporation shall be amended by adding a new Article TWELFTH to read as follows:

TWELFTH:

(a) A director shall not be liable to the Corporation or its shareholders for money damages for any action taken, or any failure to take any action, as a director, except liability for: (i) the amount of financial benefit received by a director to which he is not entitled; (ii) an intentional infliction of harm on the Corporation or its shareholders; (iii) a violation of Section 79-4-8.33 of Mississippi Code of 1972, as amended; or (iv) an intentional violation of criminal law.

(b) Subject to the provisions of this ARTICLE TWELFTH, the Corporation shall indemnify any person who was or is a party, or is threatened to be made a party, to any threatened, pending or completed claim, action, suit or proceeding, whether civil, criminal, administrative or investigative, including appeals (including any action by or in the right of the Corporation) (“Proceeding”), by reason of the fact that he or she is or was a director, officer, employee or agent of the Corporation, or is or was serving at the request of the Corporation as a director, officer, partner, employee or agent of another Corporation, partnership, joint venture, trust or other enterprise, against expenses (including attorneys’ fees), judgments, fines and amounts paid in settlement actually and reasonably incurred by him or her in connection with such a Proceeding: (A) to the fullest extent permitted by the Mississippi Business Corporation Act in effect from time to time (the "Act") and (B) despite the fact that such person has failed to meet the standard of conduct set forth in Miss. Code Ann. § 81-5-105 (1972, as amended), or would be adjudged liable to the Corporation in connection with a Proceeding by or in the right of the Corporation. Any indemnification under this ARTICLE TWELFTH shall be made by the Corporation only as authorized in the specific case upon a determination that indemnification of the director, officer, employee or agent is proper in the circumstances because he or she has met the applicable standard of conduct set forth in Section (a) and (b) of this ARTICLE TWELFTH, such determination to be made (i) by the Board of Directors by majority vote of a quorum consisting of directors not at the time parties to the Proceeding, (ii) if a quorum cannot be obtained under (i), by majority vote of a committee duly designated by the Board of Directors (in which designation directors who are parties may participate), consisting of two or more directors not at the time parties to the Proceeding, (iii) by special legal counsel (a) selected by the Board of Directors or its committee in the manner prescribed in (i) or (ii) or (b) if a quorum of the Board of Directors cannot be obtained under (i) and a committee cannot be designated under (ii), selected by majority vote of the full Board of Directors (in which selection directors who are parties may participate), (iv) by the shareholders (but shares owned by or voted under the control of directors who are at the time parties to the Proceeding may not be voted on the determination) or (v) by a court.

(c) The Corporation upon request shall pay or reimburse any person who was or is a party, or is threatened to be made a party, to any Proceeding by reason of the fact that he or she is or was a director, officer, employee or agent of the Corporation, or is or was serving at the request of the Corporation as a director, officer, partner, employee or agent of another corporation, partnership, joint venture, trust or other enterprise, for his or her reasonable expenses (including legal fees) in advance of final disposition of the Proceeding as long as (1) such person furnishes the Corporation a written undertaking, executed personally or on his or her behalf, to repay the advance if it is ultimately determined by a judgment or other final adjudication that his or her acts or omissions did violate the applicable standard of conduct set forth in Section (a) or (b) of this ARTICLE TWELFTH, which undertaking must be an unlimited general obligation of such person, and which shall be accepted by the Corporation without reference to final ability to make repayment or to collateral and (2) a determination is made by any of the persons described in (i) through (iv) of Section (b) of this ARTICLE TWELFTH that the facts then known to those making the determination would not preclude indemnification under this ARTICLE TWELFTH. Such request need not be accompanied by the affirmation otherwise required by the Act.

(d) The foregoing right of indemnification or reimbursement shall not be exclusive of other rights to which such persons may be entitled as a matter of law.

(e) The Board of Directors or shareholders of the corporation may adopt a policy for the indemnification of directors, officers, employees and agents of the corporation, as they from time to time see necessary or prudent in the best interest of the corporation.

(f) The corporation may, upon the affirmative vote of a majority of its Board of Directors, purchase insurance for the purpose of indemnifying individuals to the extent that such indemnification is allowed in the preceding paragraphs. Such insurance may, but need not be, for the benefit of all directors, officers, or employees.

(g) The invalidity or unenforceability of any provision of this ARTICLE TWELFTH shall not in any way affect the remaining provisions hereof, which shall continue in full force and effect. Neither the amendment nor repeal of this ARTICLE TWELFTH, nor the adoption or amendment of any other provision of the Corporation's Bylaws or the Articles of Incorporation inconsistent with this ARTICLE TWELFTH, shall apply to or affect in any respect the applicability of this ARTICLE TWELFTH with respect to any act or failure to act which occurred prior to such amendment, repeal or adoption.

PROXY FOR 2018 ANNUAL2021SPECIAL MEETING OF SHAREHOLDERS

April 25, 2018MARCH 10, 2021

The undersigned hereby appoint Chevis C. Swetman, the true and lawful attorney-in-fact for the undersigned, with full power of substitution, to vote as proxy for the undersigned at the Annuala Special Meeting of Shareholders of Peoples Financial Corporation (the “Company”) to be held at The Swetman Building at The Peoples Bank, Suite 204, 727 Howard Avenue, Biloxi, Mississippi, 39530, at 6:30 P.M., local time, on April 25, 2018,March 10, 2021, and at any and all adjournments thereof, the number of shares which the undersigned would be entitled to vote if then personally present, for the following purposes:

(INSTRUCTIONS: AUTHORITY TO VOTE FOR ANY NOMINEE MAY BE WITHHELD BY LINING THROUGH OR OTHERWISE STRIKING OUT THE NAME OF ANY NOMINEE.)

For ☐          Against ☐               Abstain ☐          

For ☐          Against ☐               Abstain ☐

THIS PROXY, WHICH IS SOLICITED ON BEHALF OF THE BOARD OF DIRECTORS OF THE COMPANY, WILL BE VOTED FOR THE NOMINEES LISTED IN ITEM“FOR” ITEMS 1, 2 AND FOR ITEM 2,3, UNLESS A CONTRARY DIRECTION IS INDICATED, IN WHICH CASE IT WILL BE VOTED AS DIRECTED. IF AUTHORITY IS GRANTED PURSUANT TO PROPOSAL 3 ABOVE, THE PROXY INTENDS TO VOTE ON ANY OTHER BUSINESS COMINGMATTERS DO COME BEFORE THE ANNUALSPECIAL MEETING AS TO WHICH THIS PROXY CONFERS DISCRETIONARY AUTHORITY, THIS PROXY WILL BE VOTED IN ACCORDANCE WITH THE DIRECTION OF A MAJORITY OF THE BOARD OF DIRECTORS OF THE COMPANY. YOU MAY REVOKE YOUR PROXY AT ANY TIME BEFORE IT IS VOTED AT THE SPECIAL MEETING.

Please date the Proxy and sign your name exactly as it appears on the stock records of the Company. When shares are held by joint tenants, both should sign. When signing as attorney, executor, administrator, trustee or guardian, please give full titles as such. If signed as a corporation or other entity, please sign in entity’s name by authorized person.

You may also access the proxy materials and vote your proxy online by using your 12 digit control number found below at

https://www.shareholderaccountingsoftware.com/tspweb/peoples/pxsignon.asp .