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                                  EXHIBIT 99.1

             PLEASE MARK, SIGN, DATE AND RETURN THIS PROXY PROMPTLY
                      IN THE ENCLOSED POSTAGE PAID ENVELOPE

                                      PROXY

           THIS PROXY IS SOLICITED ON BEHALF OF THE BOARD OF DIRECTORS
                     OF INTER-CITY FEDERAL BANK FOR SAVINGS

         The undersigned shareholder of Inter-City Federal Bank for Savings
hereby appoints ___________________________ and __________________________, or
either of them, as proxies with full power of substitution and authorizes them
to vote and act for the undersigned as designated below, with respect to all the
shares of common stock, par value $.01 per share, of Inter-City held of record
by the undersigned on February __, 1999, at the Special Meeting of Shareholders
of Inter-City to be held on March __, 1999, and at any adjournments or
postponements of that meeting and, at their discretion, the proxies are
authorized to vote on such other business as may properly come before the
Inter-City special meeting.

         THE SHARES REPRESENTED BY THIS PROXY WILL BE VOTED AS DIRECTED ON THIS
PROXY CARD BY THE UNDERSIGNED SHAREHOLDER. IF NO DIRECTION IS SPECIFIED WHEN THE
DULY EXECUTED PROXY IS RETURNED, SUCH SHARES WILL BE VOTED IN ACCORDANCE WITH
THE RECOMMENDATIONS OF THE BOARD OF DIRECTORS OF INTER-CITY, OR, IF A MATTER IS
PROPERLY BROUGHT BEFORE THE INTER-CITY SPECIAL MEETING AS TO WHICH THE BOARD OF
DIRECTORS HAS MADE NO RECOMMENDATION, THE PROXIES WILL VOTE THE SHARES IN THEIR
DISCRETION.

         The Board of Directors of Inter-City recommends that you vote FOR
approval of the Agreement and Plan of Merger by and between The Peoples Holding
Company, The Peoples Bank & Trust Company and Inter-City Federal Bank for
Savings, dated December 14, 1998.

1.       Proposal to approve the Agreement and Plan of Merger, dated December
         14, 1998, by and between Peoples Holding, Peoples Bank and Inter-City
         pursuant to which Inter-City will merge with and into Peoples Bank and
         each share of Inter-City's common stock (except for dissenting shares
         and cash that will be paid instead of fractional shares) will be
         converted into 2.78 shares of Peoples Holding common stock, and such
         other terms and conditions as are set forth in the agreement.

         [  ]  FOR           [  ]  AGAINST           [  ]  ABSTAIN

2.       To transact such other business as may properly come before the
         Inter-City special meeting or any adjournment or adjournments of that
         meeting.


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Please date and sign this proxy exactly as the name appears on your stock
certificate. When shares are held by joint tenants, both should sign. When
signing as attorney, executor, administrator, trustee or guardian, please give
full title as such. If a corporation, please sign the full corporate name by
president or other authorized officer. If a partnership, please sign a
partnership name by authorized person.

Date: 
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                                                 Signature of Shareholder


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                                                 Print Name of Shareholder