PFBX Peoples Financial Corporation (QX)

PROXY STATEMENT FOR ANNUAL MEETING OF SHAREHOLDERS

I. General

This Proxy Statement is furnished in connection with the solicitation by the Board of Directors (“Board”) of Peoples Financial Corporation (the "Company" or the "Corporation") of Proxies for the 2023 Annual Meeting of Shareholders (the "Annual Meeting") to be held in The Swetman Building at The Peoples Bank, Suite 204, 727 Howard Avenue, Biloxi, Mississippi, 39530, on April 26, 2023, at 6:30 P.M., local time, and any adjournment thereof, for the purposes stated in the foregoing Notice of Annual Meeting of Shareholders.

The mailing address of the principal executive offices of the Company is P.O. Box 529, Biloxi, Mississippi 39533-0529. The Notice of Annual Meeting, Proxy Statement, form of Proxy and 2022 Annual Report to Shareholders will be mailed to shareholders of record on or about March 15, 2023.

OUR BOARD OF DIRECTORS RECOMMENDS A VOTE FOR THE ELECTION OF EACH OF THE COMPANY’S NOMINEES USING THE ENCLOSED WHITE PROXY CARD AND URGES YOU NOT TO VOTE FOR MR. RODNEY H. BLACKWELL, NOMINEE OF THE STILWELL GROUP, AND NOT TO SIGN OR RETURN OR VOTE ANY PROXY CARD SENT TO YOU BY OTHER PARTIES.

Shareholders of record of the Company's Common Stock, par value $1.00 per share (the "Common Stock"), at the close of business on March 8, 2023 (the "Record Date"), are entitled to receive notice of and to vote at the Annual Meeting or any adjournments thereof. On the Record Date, the Company had outstanding 4,678,186 shares entitled to vote at the Annual Meeting. A majority of the outstanding shares constitutes a quorum. Each share of Common Stock entitles the holder thereof to one vote on each matter presented at the Annual Meeting for shareholder approval. Directors are elected by a plurality of the votes cast by the shares entitled to vote in the election at a meeting at which a quorum is present. Actions on all other matters are approved if the votes cast in favor of the action exceed the votes cast opposing the action. Abstentions, which include broker non-votes, or votes withheld from a nominee for the Board, 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.

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 Annual 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 Secretary of the Company prior to the exercise of the Proxy.

All properly executed WHITE Proxies, if not subsequently revoked, will be voted as directed. Except for shares held by the Employee Stock Ownership Plan or the 401(k) Plan of the Company, which are to be voted as described in footnote 1 of the table under Section V of this Proxy Statement, if no direction is indicated on properly executed WHITE Proxies for Proposal 1 or Proposal 2, the Proxies will be voted "FOR" the Company’s nominees listed in Item 1 and "FOR" Item 2.

If any properly executed WHITE Proxies are marked to vote for a number of nominees in Proposal 1 that is less than six (6), the Proxies will only be voted “FOR” those nominees so marked. If any properly executed WHITE Proxy is marked to vote “FOR” more than six (6) nominees in Proposal 1, all of the votes on Proposal 1 related to such Proxy will be invalid and will not be counted, even if though the votes related to that Proxy will be counted on Proposal 2. A vote to “WITHHOLD” is not a vote cast and will have no effect on the validity of an executed Proxy but, as described further herein, will be counted for the purposes of establishing a quorum for the meeting and may revoke a previously submitted Proxy.

The cost of soliciting proxies will be borne by the Company. The Company has retained Alliance Advisors, LLC (“Alliance”) to aid in the solicitation of proxies in conjunction with the Annual Meeting and will pay a base fee of $20,000, plus reimbursement of reasonable out-of-pocket expenses and certain incremental costs, for its proxy solicitation services. Alliance expects that approximately 20 of its employees will assist in the solicitation. Our directors, director nominees and certain executive officers named in Annex A may supplement the proxy solicitor’s solicitation of proxies by mail, personally, by telephone, by press release, by facsimile transmission or by other electronic means. No additional compensation will be paid to our directors or employees for such services. Additionally, following her retirement in 2021, Ann F. Guice, former First Vice President of the Company and former Senior Vice President of The Peoples Bank, was retained as a part-time consultant by the Company on an independent contractor basis for a monthly fee of $1,100 per month. Her services to the Company will be varied but may also include assisting with the solicitation of proxies in conjunction with the Annual Meeting.

Alliance may ask brokerage houses, banks and other custodians and nominees whether other persons are beneficial owners of the Company’s Common Stock. If so, the Company will reimburse brokers, banks and other custodians and nominees for their costs of sending our proxy materials to the beneficial owners of our Common Stock.

You may receive solicitation materials from Joseph Stilwell and a group of funds he controls, consisting of Stilwell Activist Investments, L.P., Stilwell Activist Fund, L.P., Stilwell Value Partners VII, L.P., and Stilwell Value LLC (collectively, the “Stilwell Group”). These materials may include proxy statements and green proxy cards seeking your proxy to vote for Mr. Rodney H. Blackwell, the Stilwell Group’s nominee for election to the Board. The Company is not responsible for the accuracy of any information provided by, or relating to, the Stilwell Group or Mr. Blackwell contained in any proxy solicitation materials filed or disseminated by, or on behalf of, the Stilwell Group or any other statements that the Stilwell Group may otherwise make. The Stilwell Group chooses which of the Company’s shareholders will receive its proxy solicitation materials. The Board does NOT endorse the Stilwell Group’s nominee, Mr. Rodney H. Blackwell, and urges you NOT to vote for Mr. Blackwell and NOT to sign or return or vote any proxy card sent to you by the Stilwell Group. If you have already voted using a green proxy card sent to you by the Stilwell Group, you can revoke it by voting via the Internet or by telephone by following the instructions on the WHITE proxy card, or by signing, dating and mailing the enclosed universal WHITE proxy card in the envelope provided.

Even if you would like to vote for the nominee of the Stilwell Group, Mr. Rodney H. Blackwell, we strongly recommend you use the Company’s WHITE proxy card to do so. Only your latest dated proxy will be counted and any proxy may be revoked at any time prior to its exercise at the Annual Meeting. Voting to “WITHHOLD” with respect to the nominee of the Stilwell Group, Mr. Blackwell, on a green proxy card sent to you by the Stilwell Group is NOT the same as voting for the Company’s nominees because a vote to “WITHHOLD” with respect to Mr. Blackwell on the green proxy card of the Stilwell Group will revoke any proxy you previously submitted. For example, this means that if you have submitted a WHITE proxy voting “FOR” the nominees recommended by the Board but later submit a green proxy withholding your vote from the nominee of the Stilwell Group, Mr. Blackwell, your prior vote on the WHITE proxy card in favor of the nominees recommended by the Board will not be counted. If you have any questions regarding this information or the proxy materials, please call Kathy Crabtree, Vice President and Corporate Trust Officer for The Peoples Bank at (228) 435-8208.

As a result of the actions by the Stilwell Group, we estimate we may incur approximately $300,000 of additional expense in furtherance of, and in connection with, the solicitation in excess of that normally spent for an annual meeting, including attorney fees, independent inspector of elections fees, proxy tabulator fees for the tabulations of votes submitted by participants in the Employee Stock Ownership Plan (“ESOP”) and 401(k) Plan of the Company, printer costs incurred in connection with the preparation and filing of preliminary proxy materials to be reviewed by the SEC and the preparation of additional solicitation materials, and the fees of Alliance, of which we estimate that approximately $20,000 of expense has been incurred to date. However, this estimate does not include the costs represented by salaries and wages of executive officer employees of the Company engaged in the solicitation process, costs we would normally incur in an uncontested director election or any costs associated with any potential litigation that may arise in connection with the proxy solicitation. Furthermore, the actual amount of additional expense we may incur could be materially different from what we currently estimate, depending on possible actions that might be taken by the Stilwell Group in connection with this proxy contest.

QUESTIONS AND ANSWERS ABOUT THE ANNUAL MEETING

What is a Proxy?

A proxy is a written authorization that you give to someone else prior to a meeting of shareholders to vote shares on your behalf under your instructions at the meeting. This way, you can vote your shares without attending the Annual Meeting in person. For shareholders that complete a WHITE proxy card sent by the Company, the Company has selected Chevis C. Swetman and Jeffrey H. O’Keefe, as persons designated as proxies, and each of them acting singly, to vote your shares in accordance with your instructions for the Annual Meeting, for all proposals submitted to shareholders in connection with the Annual Meeting with full power of substitution and to authorize and direct proxyholders to vote at the Annual Meeting and act on other business, all as recommended by the Board.

Why am I receiving this proxy statement?

The Board of the Company is soliciting your proxy for use at the Company’s Annual Meeting to be held in The Swetman Building at The Peoples Bank, Suite 204, 727 Howard Avenue, Biloxi, Mississippi, 39530, on April 26, 2023, at 6:30 P.M., local time and at such other meeting upon any postponements or adjournments thereof. Only holders of record of shares at the close of business on March 8, 2023 (the “Record Date”) will be entitled to notice of and to vote at the Annual Meeting or such other meeting upon any adjournments or postponements thereof. As of the Record Date, there were 4,678,186 Common Shares issued and outstanding, and entitled to vote, as further described in this Proxy Statement.

We intend to mail these proxy materials, including the WHITE proxy card, on or about March 15, 2023, to all shareholders of record entitled to vote at the Annual Meeting.

What proposals are to be presented at the Annual Meeting and what are the Board’s voting recommendations?

As described in further detail later in this proxy statement, the purpose of the Annual Meeting is to consider and vote upon the following proposals. The Board’s recommendation on each of the proposals is indicated below.

The Board strongly urges you NOT to sign or return any green proxy card sent to you by the Stilwell Group.

As of the date of the Notice of Annual Meeting, we knew of no other matters to be presented at the Annual Meeting.

How do I vote?

The Company encourages shareholders to fill out and return the enclosed universal WHITE proxy card or vote by proxy via telephone or the Internet as instructed on your universal WHITE proxy card in advance of the Annual Meeting, even if you plan to attend the Annual Meeting.

What is the required vote to approve each proposal?

For the election of directors, since there are more director nominees standing for election than Board seats to be filled, the six (6) nominees receiving the highest number of “FOR” votes will be elected, provided that a quorum is present for the Annual Meeting, in person or by proxy. Although the Company believes it is unlikely to occur, to the extent that a quorum is not present, in accordance with the Company’s Amended and Restated Bylaws (the “Bylaws”), a majority of the shares represented in person or by proxy may adjourn the Annual Meeting from time to time without further notice, and any business may be transacted at such adjourned Annual Meeting which might have been transacted at the meeting originally notified, so long as a quorum is present at the adjourned Annual Meeting. Until qualified successor directors are elected at a meeting where a quorum is present, in person or by proxy, the current directors for those seats will remain in office as holdover directors.

The other proposal will be decided by the affirmative vote of a majority of votes cast at the Annual Meeting, provided that a quorum is present, in person or by proxy. For all proposals being voted upon, abstentions and broker non-votes, if any, will not count as votes cast and, therefore, will have no effect on the outcome of these proposals, even though they may be counted for the purposes of establishing a quorum.

How many shares must be present to conduct the Annual Meeting?

Pursuant to our Bylaws, a majority of the outstanding shares entitled to vote, represented in person or by proxy, will constitute a quorum for the transaction of business at the Annual Meeting. Abstentions and “broker non-votes” are counted as present in determining whether the quorum requirement is satisfied. A broker non-vote, as further explained below, occurs when a broker holding shares for a beneficial owner does not vote on a particular proposal because the broker does not have discretionary voting power for that particular item and has not received instructions from the beneficial owner.

What is the difference between holding shares as a “shareholder of record” and as a “beneficial owner”?

If your shares are registered in your name on the Record Date, you are a shareholder of record. When you properly vote in accordance with the instructions provided on the proxy card, you are instructing the named proxies to vote your shares in the manner you indicate on your proxy.

If your shares are held in the name of your bank, broker or other nominee (herein referred to generally as a “Broker”), which is usually the case if you hold your shares in a brokerage or similar account, your shares are held in “street name.” Your Broker is the shareholder of record for your shares. As the holder of record, only your Broker is authorized to vote or grant a proxy for your shares. If your shares are held in “street name,” you should follow the instructions on your voting instruction form and provide specific instructions to your Broker on how to vote the shares they hold for you.

What is a “Broker Non-Vote”?

A broker non-vote occurs when a Broker submits a proxy on behalf of a beneficial owner for the Annual Meeting but does not vote on a particular proposal because such Broker does not have discretionary voting power with respect to that proposal and has not received voting instructions from the beneficial owner. Broker non- votes (like abstentions and withheld votes) will be counted as present for purposes of determining a quorum. Your Broker may not vote your shares at the Annual Meeting with respect to the election of the Company’s nominees without your voting instructions. Even if your Broker does not provide you with the Stilwell Group’s proxy materials, such Broker has the discretion to vote your shares on “routine” matters without your voting instructions, but not on non-routine matters such as Proposal 1. Routine matters include only Proposal 2 (Ratification of the appointment of Postlethwaite & Netterville as the Company’s independent auditors for the fiscal year ending December 31, 2023). All other proposals to be presented at the Annual Meeting are considered “non-routine” and therefore Brokers will not have discretionary authority to vote your shares with respect to the other proposals to be presented at the Annual Meeting. Therefore, it is important that you instruct your Broker how to vote your shares. We encourage you to instruct your Broker to vote your shares by following the instructions shown on the enclosed WHITE voting instruction form.

If you are a shareholder of record with respect to shares on the Record Date, you may vote by one of the following four options:

If you submit a WHITE proxy card to us without indicating instructions with respect to specific proposals, we will vote your shares consistent with the recommendations of our Board stated in this Proxy Statement. If any other matters are properly presented at the Annual Meeting for consideration, then the persons named as the Company’s designated proxies will be voted as determined by the Board.

Even if you plan to attend the Annual Meeting in person, we encourage you to vote your shares in advance via the Internet, by telephone or by signing, dating and returning your WHITE proxy card.

If your shares are held by a Broker in “street name,” please follow the instructions you receive from your Broker to vote your shares. You may need to contact your Broker to determine whether you will be able to vote electronically via the Internet or by telephone. If you wish to vote in person at the Annual Meeting you must provide an executed proxy from your Broker indicating that you were the beneficial owner of your shares on the Record Date, and that such Broker is giving you its proxy to vote such shares.

If you return your proxy by mail, please ensure you leave enough time for your proxy to be mailed and received by the inspector of election. Also note that if your shares are held through a Broker, such entity may have even earlier deadlines by which to submit your vote. Please follow their instructions accordingly.

Whether or not you plan to attend the Annual Meeting, please vote promptly by Internet or telephone by following the instructions set forth on the enclosed WHITE proxy card or by completing, signing, dating and returning the enclosed WHITE proxy card in the postage-paid envelope provided. Your promptness in voting using the WHITE proxy card will assist in the expeditious and orderly processing of the proxy and will assure that you are represented at the Annual Meeting even if you cannot attend the meeting.

We are encouraging shareholders to submit their proxies electronically (by Internet or by telephone) if possible. If you return your WHITE proxy card by mail or vote by telephone or Internet, you may nevertheless attend the Annual Meeting and vote your shares in person.

Will other candidates be nominated for election as directors at the Annual Meeting in opposition to the Company’s nominees?

Yes. The Stilwell Group has notified the Company that it intends to nominate Mr. Rodney H. Blackwell for election to the Board at the Annual Meeting in opposition to the nominees recommended by the Board. The Board unanimously recommends you vote on your WHITE proxy card “FOR” each of the six (6) nominees proposed by the Company’s Board and strongly urges you not to sign or return any green proxy card sent to you by the Stilwell Group or vote for Mr. Blackwell, the Stilwell Group nominee listed on the enclosed WHITE proxy card. The Board does not endorse Mr. Blackwell or any other nominee of the Stilwell Group. If you have previously submitted a green proxy card sent to you by the Stilwell Group, you can revoke that proxy and vote in accordance with the Board’s recommendation by using the enclosed WHITE proxy card to vote “FOR” each of the Company’s nominees and “FOR” the other proposals set forth therein.

How many candidates can be elected as directors at the Annual Meeting?

The Board has determined to maintain the size of the Board at six (6) directors, and only six (6) candidates can be elected to the Board at the Annual Meeting. Since there are more director nominees standing for election than Board seats to be filled, the six (6) nominees receiving the highest number of “FOR” votes will be elected, provided that a quorum is present at the Annual Meeting, in person or by proxy. As such, the Board does not endorse Mr. Rodney H. Blackwell, the nominee of the Stilwell Group, and unanimously recommends that you vote “FOR” each of the nominees proposed by the Company using the WHITE proxy card accompanying this proxy statement. The Board strongly urges you not to vote for Mr. Blackwell and not to sign or return the green proxy card sent to you by the Stilwell Group. If you have previously submitted a green proxy card sent to you by the Stilwell Group, you can revoke that proxy and vote in accordance with the Board’s recommendation by using the enclosed WHITE proxy card to vote “FOR” each of the Company’s nominees and “FOR” the other proposals set forth therein.

What do I need for admission to attend the Annual Meeting?

All shareholders attending the Annual Meeting in person may be required to show valid identification. If your Common Shares are in the name of your Broker, you will also need to bring evidence of your share ownership as of the Record Date, such as a brokerage account statement which shows your holdings as of the Record Date or a copy of your voting instruction form. If you do not have valid identification or proof of your share ownership, you may not be admitted to the Annual Meeting. For security purposes, packages, and bags may be inspected and you may be required to check these items. Please arrive early enough to allow yourself adequate time to clear security. Shareholders whose shares are held in the name of a Broker or other nominee and who desire to vote in person at the Annual Meeting must obtain a legal proxy from their Broker.

What should I do if I receive a green proxy card from the Stilwell Group?

The Stilwell group has notified the Company of its intention to nominate Mr. Rodney H. Blackwell for election as director to the Company’s Board at the Annual Meeting in opposition to the director nominees recommended by the Board. If the Stilwell Group proceeds with its director nomination, you may receive proxy solicitation materials from the Stilwell Group, including an opposition proxy statement and a green proxy card. We urge you to disregard such materials. The Company is not responsible for the accuracy of any information contained in any proxy solicitation materials used by the Stilwell Group or any other statements that it may otherwise make.

The Company’s Board does not endorse Mr. Blackwell or any other nominee of the Stilwell Group, and unanimously recommends that you disregard any green proxy card or solicitation materials that may be sent to you by the Stilwell Group. Voting to “WITHHOLD” with respect to the Stilwell Group’s nominee, Mr. Blackwell, on its green proxy card is NOT the same as voting “FOR” the Company’s nominees, because a vote to “WITHHOLD” with respect to the Stilwell Group’s nominee on its green proxy card will revoke any proxy you previously submitted. If you have already voted using the green proxy card, you have the right to change your vote by voting via the Internet or by telephone by following the instructions on the WHITE proxy card, or by completing, signing, dating and mailing the enclosed WHITE proxy card in the postage-paid envelope provided. Only the latest-dated, validly executed proxy that you submit will be counted — any proxy may be revoked at any time prior to its exercise at the Annual Meeting by following the instructions under “Can I change my vote?” below. If you have any questions regarding this information or the proxy materials, please call Kathy Crabtree, Vice President and Corporate Trust Officer for The Peoples Bank at (228) 435-8208.

What if I return a WHITE proxy card but do not make specific choices?

If you return a signed and dated WHITE proxy card without marking any voting selections, your shares will be voted “FOR” each of the Company’s six (6) nominees for director, and “FOR” ratification of the appointment of Postlethwaite & Netterville as the independent registered public accounting firm for the Company for the fiscal year ending December 31, 2023. If any other matter is properly presented at the Annual Meeting, your proxyholder (one of the individuals named on your WHITE proxy card) will vote your shares as determined by a majority of the Board.

Can I change my vote?

If your shares are registered in your name, you may revoke your proxy and change your vote prior to the completion of voting at the Annual Meeting by:

If your shares are held by a Broker in “street name” and you wish to revoke a proxy, you should contact your Broker and follow its procedures for changing your voting instructions. You also may vote in person at the Annual Meeting to revoke an earlier proxy if you provide an executed proxy from your Broker indicating that you were the beneficial owner of the shares on the Record Date, and that such Broker is giving you its proxy to vote the shares.

If you submit more than one proxy, only the latest dated validly executed proxy that you submit will count.

Is the Company using a universal proxy card in connection with voting at the Annual Meeting?

Yes. The SEC has adopted new rules requiring the use of a universal proxy card in contested director elections (the “New Rules”). The New Rules are applicable to the Annual Meeting. Nominees from both the Company and the Stilwell Group are included in the universal proxy cards provided by both the Company and the Stilwell Group. The Company’s Board unanimously recommends that you use the WHITE universal proxy card and vote “FOR” each of the six (6) nominees proposed by the Company and not vote for Mr. Blackwell, the nominee of the Stilwell Group.

What is an under vote and over vote and how does each impact the universal proxy card?

“Under votes” mean instances in which a shareholder returns a marked universal proxy card in a director election contest but does not exercise a vote with respect to all six (6) seats up for election at the Annual Meeting. “Over votes” mean instances in which a shareholder returns a universal proxy card in a director election but marks votes “FOR” more than the six (6) seats up for election at the Annual Meeting.

What happens if I return a WHITE proxy card but give voting instructions for less than six (6) candidates?

An “under vote” occurs when a shareholder submits less votes “FOR” director nominees than the six (6) Board of Director seats up for election. To the extent an under vote (e.g., voting “FOR” with respect to fewer than six (6) nominees on Proposal 1) occurs on a record holder’s WHITE proxy card, your shares will only be voted “FOR” those nominees you have so marked and any remaining votes on Proposal 1 shall not be voted.

What happens if I return a WHITE proxy card but give voting instructions for more than six (6) candidates?

An “over vote” occurs when a shareholder submits more votes “FOR” director nominees than there are Board of Director seats up for election. To the extent an over vote (e.g., voting “FOR” with respect to more than six (6) nominees on Proposal 1) occurs on a record holder’s WHITE proxy card, all of such record holder’s votes on Item 1 regarding nominees will be invalid and will not be counted. However, if you vote “WITHHOLD” with respect to one director nominee and vote “FOR” each of the other director nominees, you will be considered as having voting “FOR” only six (6) nominees, and your submitted vote will be counted and will not be considered an “over vote.” A vote to “WITHHOLD” is not a vote cast and will have no effect on the validity of an executed Proxy but, as described further herein, will be counted for the purposes of establishing a quorum for the meeting and may revoke a previously submitted Proxy.

If I want to vote for the Stilwell Group’s nominee, can I use the WHITE proxy card?

Yes, if you would like to vote for the Stilwell Group’s nominee, we strongly recommend that you use the Company’s WHITE proxy card to do so.

What happens if the Stilwell Group withdraws or abandons its solicitation or fails to comply with the New Rules and I already granted proxy authority in favor of the Stilwell Group?

Shareholders are encouraged to submit their votes on the WHITE proxy card. If the Stilwell Group withdraws or abandons its solicitation or fails to comply with the New Rules after a shareholder has already granted proxy authority, shareholders can still sign and date a later submitted WHITE proxy card.

If the Stilwell Group withdraws or abandons its solicitation or fails to comply with the New Rules, any votes cast in favor of the Stilwell Group’s nominee will be disregarded and not be counted, whether such vote is provided on the Company’s WHITE proxy card or the Stilwell Group’s green proxy card. Under these circumstances, your Proxy will be voted for all six (6) of the Company’s nominees.

Who will count the votes?

All votes will be counted by First Coast Results, Inc., an independent inspector of election appointed for the Annual Meeting, who will separately tabulate affirmative and negative votes, abstentions and broker non-votes (if any).

How can I find out the results of the voting at the Annual Meeting?

We expect to report the preliminary voting results of the Annual Meeting within four business days following the Annual Meeting in a Current Report on Form 8-K. Once the independent inspector of election has determined the final voting results of the Annual Meeting, we will file an amendment to the Current Report on Form 8-K reporting the final voting results within four business days following such determination.

Who will pay the costs of solicitation?

The Company will pay all expenses in connection with the solicitation of proxies for the Annual Meeting. To aid in the solicitation of proxies in conjunction with the Annual Meeting, the Company has retained Alliance Advisors, LLC (“Alliance”) and will pay a base fee of $20,000, plus reimbursement of reasonable out-of-pocket expenses and certain incremental costs, for its proxy solicitation services. Alliance expects that approximately 20 of its employees will assist in the solicitation. Our directors, Company director nominees and certain executive officers named in Annex A may supplement the proxy solicitor’s solicitation of proxies by mail, personally, by telephone, by press release, by facsimile transmission or by other electronic means. No additional compensation will be paid to our directors or employees for such services. Additionally, following her retirement in 2021, Ann F. Guice, former First Vice President of the Company and former Senior Vice President of The Peoples Bank, was retained as a part-time consultant by the Company on an independent contractor basis for a monthly fee of $1,100 per month. Her services to the Company will be varied but may also include assisting with the solicitation of proxies in conjunction with the Annual Meeting.

Alliance may ask brokerage houses, banks and other custodians and nominees whether other persons are beneficial owners of the Company’s Common Stock. If so, the Company will reimburse brokers, banks and other custodians and nominees for their costs of sending our proxy materials to the beneficial owners of our Common Stock.

As a result of the actions by the Stilwell Group, we estimate we may incur approximately $300,000 of additional expense in furtherance of, and in connection with, the solicitation in excess of that normally spent for an annual meeting, including attorney fees, independent inspector of elections fees, proxy tabulator fees for the tabulations of votes submitted by participants in the Employee Stock Ownership Plan (“ESOP”) and 401(k) Plan of the Company, printer costs incurred in connection with the preparation and filing of preliminary proxy materials with the SEC and the preparation of additional solicitation materials, and the fees of Alliance, of which we estimate that approximately $20,000 of expense has been incurred to date. However, this estimate does not include the costs represented by salaries and wages of executive officer employees of the Company engaged in the solicitation process, costs we would normally incur in an uncontested director election or any costs associated with any potential litigation that may arise in connection with the proxy solicitation. Furthermore, the actual amount of additional expense we may incur could be materially different from what we currently estimate, depending on possible actions that might be taken by the Stilwell Group in connection with this proxy contest.

Certain additional information about the participants in the solicitation is set forth in Annex A to this proxy statement, Additional Information Regarding Participants in the Solicitation.

Why did I receive multiple copies of the WHITE proxy card and proxy materials?

If you receive more than one package of our proxy materials including the WHITE proxy card, it may mean that you have multiple accounts holding your Common Shares. These may include: accounts with our transfer agent, The Asset Management and Trust Services Division of The Peoples Bank, Biloxi, Mississippi, and accounts with a Broker. In order to vote all of the shares held by you in multiple accounts, you will need to vote the shares held in each account separately. Please follow the voting instructions provided on the WHITE proxy card and any voting instruction card from your Broker that you received to ensure that all of your shares are voted.

How can I get assistance with questions relating to the proxy or voting?

If you have any questions regarding this information or the proxy materials, please call Kathy Crabtree, Vice President and Corporate Trust Officer for The Peoples Bank at (228) 435-8208.

Participants in the Solicitation

Under applicable SEC regulations, each of the Company’s directors, director nominees and certain executive officers named in Annex A are deemed to be Participants in this proxy solicitation by virtue of their position as directors and director nominees of the Company or because they may be soliciting proxies on our behalf. For information about our directors, director nominees and executive officers who may be deemed to be Participants in the solicitation, please see “Item 1: Election of Directors” on page 17 of this Proxy Statement, “Ownership of Equity Securities by Directors and Executive Officers” on page 31 of this Proxy Statement, and Annex A to this Proxy Statement. Other than the persons described in this Proxy Statement, no general class of employees of the Company will be employed to solicit shareholders in connection with this proxy solicitation. However, in the course of their regular duties, employees may be asked to perform clerical or ministerial tasks in furtherance of this solicitation.

The six (6) directors recommended by the Company’s Board for election at the Annual Meeting are listed and designated as nominees of the Company on the WHITE PROXY CARD accompanying this proxy statement, which is being used by the Company to solicit votes for the election of the nominees recommended by the Board. All nominees recommended by the Board were elected as directors at the Company’s 2022 Annual Meeting of Shareholders (“2022 Annual Meeting”).

YOU MAY HAVE ALREADY RECEIVED A COMMUNICATION FROM THE STILWELL GROUP ASKING YOU TO RETURN THEIR GREEN PROXY CARD. THE COMPANY’S BOARD OF DIRECTORS STRONGLY OPPOSES THE STILWELL GROUP’S PROXY SOLICITATION AND URGES YOU NOT TO SIGN OR RETURN ANY GREEN PROXY CARD SENT TO YOU BY THE STILWELL GROUP. Even voting to “Withhold” a vote on Mr. Blackwell, the nominee of the Stilwell Group, by signing and returning the green proxy card could invalidate any vote a shareholder may want to make “For” the nominees recommended by the Board. Instead, shareholders wanting to support nominees recommended by the Board should sign and return the WHITE PROXY CARD.

If you have already returned the green proxy card from the Stilwell Group, you may change your vote by promptly signing, dating and returning the enclosed WHITE PROXY CARD or by voting by internet using the instructions on the WHITE PROXY CARD. Only the latest dated proxy card or vote you submit will be counted.

If any other matters do come before the Annual Meeting, the person named in the accompanying Proxy or his substitute will vote the shares represented by such Proxies in accordance with the direction of a majority of the Board.

Proxy Contest

Joseph Stilwell and a group of funds he controls, including Stilwell Activist Investments, L.P., Stilwell Activist Fund, L.P., Stilwell Value Partners VII, L.P., and Stilwell Value LLC ( collectively, the “Stilwell Group”) has notified the Company that it intends to nominate Mr. Rodney H. Blackwell for election as a director at the Annual Meeting. Accordingly, there may be seven (7) nominees for election to the Board, but only six (6) nominees will be elected. The Stilwell Group also named Mr. Stewart F. Peck as an alternate nominee; however, according to the bylaws of the Company, Mr. Peck may only serve as a nominee for election as a director if Mr. Blackwell withdraws from consideration due to circumstances that are reasonably outside of the control of Mr. Blackwell and the Stilwell Group. No other nominations of persons for election as directors of the Company were submitted to the Company pursuant to the advance notice provisions of the Company’s bylaws.

Following receipt of the Stilwell Group’s notice of its intent to nominate Mr. Blackwell, the Board of the Company did exchange a series of letters with the Stilwell Group requesting more information on the involvement of another individual who is a beneficial owner of Common Stock in the Company, Mr. Philip J. Timyan. These questions focused on whether or not that involvement required Mr. Timyan to be named as a Related Person within the notice of nomination of the Stilwell Group. A summary of this exchange of correspondence as well as the background for the questions is contained in Annex B to this Proxy Statement. Even though the Board believes that the Stilwell Group did not completely respond to questions posed in relation to this issue, the Board of the Company has decided not to object to the nomination of Mr. Blackwell and to allow the nomination to proceed for now while reserving all rights with respect to the Annual Meeting and the requirements for stockholder nominations according to the Company’s bylaws, including but not limited to the right of the Board to require more information from the Stilwell Group to determine the sufficiency of its notice, as well as the right to determine, within the reasonable discretion of the Board or its designated committees, that the notice of the Stilwell Group, as supplemented, has not been made in accordance with the Company’s bylaws. The Stilwell Group filed definitive proxy materials with the SEC on March 10, 2023 that will be sent to shareholders in order to solicit proxies in support of its candidate.

Election of the Stilwell Group’s candidate, Mr. Rodney H. Blackwell, is NOT supported by our Board. We are not responsible for the accuracy of any information provided by or relating to the Stilwell Group or Mr. Blackwell contained in any proxy solicitation materials filed or to be filed or disseminated by, or on behalf of, the Stilwell Group and Mr. Blackwell or any other statements that the Stilwell Group or Mr. Blackwell may otherwise make.

Nonetheless, we urge you to elect the directors recommended by the Board, by voting via the Internet or by telephone by following the instructions on the WHITE PROXY CARD or by completing the attached WHITE PROXY CARD to vote for the six (6) nominees of the Company and returning it in the enclosed postage-paid envelope. The Board recommends that you: (i) DO NOT vote for Mr. Rodney H. Blackwell, the nominee of the Stilwell Group, on the enclosed WHITE PROXY CARD, and (ii) DO NOT sign or return any proxy card that may be sent to you by the Stilwell Group or anyone else. Voting against another person’s nominees on a proxy card sent to you by that person is not the same as voting for the Company’s nominees, because a vote against another person’s nominees on its proxy card will revoke any previous proxy submitted by you. If you have previously submitted the green proxy card to the Stilwell Group, we urge you to revoke that proxy by voting in favor of the Company’s nominees by using the enclosed WHITE PROXY CARD. Only the latest validly executed proxy that you submit will be counted.

II. Management Proposals