PEOPLES FINANCIAL CORPORATION/THE PEOPLES BANK
CONCERNS POLICY

Peoples Financial Corporation/The Peoples Bank is committed to fully comply with securities law and regulations and with laws prohibiting fraud against shareholders.  This commitment is evidenced by this policy which has been established by the Peoples Financial Corporation and The Peoples Bank Audit Committee in order to handle the receipt, retention, and treatment of any concerns/complaints received.  Several options are available for reporting any concerns/complaints.  These options are identified below: 

• Report thru External Hotline (hosted by Silentwhistle) at 1 877-874-8416
• Report thru External Hotline (hosted by Silentwhistle) thru website (http://thepeoples.silentwhistle.com)
• Report directly with Internal Auditor at (228) 435-8673 or Audit Committee Chairman at (228) 831-4343 Ext. 212
• Email to internalauditor@thepeoples.com  
• Sending correspondence to The Peoples Bank, P.O. Box 1172, Biloxi, MS 39533 

 Any complaint received by the External Hotline or the Internal Auditor will be treated confidentially and also anonymously (if desired by the complainant and the concern is submitted in an appropriate manner).  Each complaint will be handled in the uniform manner specified below:

• After the receipt and recording of a complaint, a notification is submitted to the complainant (if known) that the complaint has been received.  In addition, the Audit Committee Chairman is also notified of the submission of the complaint.  After a discussion with the Audit Committee Chairman to gauge the severity of the concern, the Auditor and/or the Audit Committee Chairman may inform the other Audit Committee members immediately or after more research is performed.
• An initial evaluation of the complaint is performed to determine its importance and priority so that decisions concerning the resources to be designated to the complaint can be made.
• The investigation will examine the facts related to the complaint to determine whether any misconduct, violation of law, breach of ethics or company policy has occurred.  During this phase of the process, certain expertise may be needed in order to appropriately carry out the investigation.  Thus, the Audit Committee has complete authority to engage outside advisors, as it deems necessary, to ensure its responsibilities are properly fulfilled.
• A report will be prepared describing the complaint, the facts learned during the investigation and the conclusion of the investigation.  This report will be conveyed to the Audit Committee for review and subsequent action, if needed.
• Following the report, a determination will be made as to what action, if any, should be taken.  This would include disciplining those involved, correcting the conditions which led to the misconduct, and reporting the misconduct to the regulatory authorities, if required.  

This policy will be publicly distributed by placement in the Peoples Financial Corporation Annual Report and on The Peoples Bank website.   The policy will also be distributed to The Peoples Bank employees via internal company publication and placement on The Peoples Bank internal web page.  The confidentiality/anonymity of this process is in effect to instill assurance that all complaints will be handled properly, without the risk of subversion or retaliation by management.  All complaints will be retained in a confidential file maintained in the Internal Audit Department for a period of five (5) years from the date the complaint is made.