FIRST UNITED BANCSHARES INC /AR/, S-4/A, 1994-05-04

FIRST UNITED BANCSHARES INC /AR/
S-4/A, 1994-05-04
STATE COMMERCIAL BANKS

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<PAGE> 1

AS FILED WITH THE SECURITIES AND EXCHANGE COMMISSION ON MAY 4, 1994

REGISTRATION NUMBER 33-52341
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SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549

AMENDMENT NO. 2

FORM S-4
REGISTRATION STATEMENT UNDER THE SECURITIES ACT OF 1933
------------------------
FIRST UNITED BANCSHARES, INC.
(Exact name of registrant as specified in its charter)

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ARKANSAS 6022 71-0538646
(State or other jurisdiction of (Primary Standard Industrial) (I.R.S. Employer
incorporation or organization) Classification Code) Identification No.)
</TABLE>

MAIN AND WASHINGTON STREETS
EL DORADO, ARKANSAS 71730
(501) 863-3181
(Address, including ZIP Code, and telephone number,
including area code, of registrant's principal executive offices)
------------------------
JOHN E. BURNS
MAIN AND WASHINGTON STREETS
EL DORADO, ARKANSAS 71730
(501) 863-3181
(Name, address, including ZIP Code, and telephone number,
including area code, of agent for service)
------------------------
Copies to:

S. SCOTT LUTON

IVESTER, SKINNER & CAMP, P.A.

111 CENTER STREET, SUITE 1200

LITTLE ROCK, ARKANSAS 72201

APPROXIMATE DATE OF COMMENCEMENT OF PROPOSED SALE TO THE PUBLIC: As soon as
practicable after the effective date of this Registration Statement.

IF THE SECURITIES BEING REGISTERED ON THIS FORM ARE BEING OFFERED IN
CONNECTION WITH THE FORMATION OF A HOLDING COMPANY AND THERE IS COMPLIANCE WITH
GENERAL INSTRUCTION G, CHECK THE FOLLOWING BOX. / /

CALCULATION OF REGISTRATION FEE

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PROPOSED
TITLE OF EACH CLASS PROPOSED MAXIMUM OFFERING AGGREGATE
OF SECURITIES AMOUNT TO BE PRICE PER OFFERING AMOUNT OF
TO BE REGISTERED REGISTERED(1) UNIT(2) PRICE REGISTRATION FEE
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Common Stock...................... 985,849 $26.50 $26,125,000 $9,010.00
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(1) Estimated based on the maximum number of shares to be registered.
(2) Estimated solely for the purpose of calculating the registration fee.

THE REGISTRANT HEREBY AMENDS THIS REGISTRATION STATEMENT ON SUCH DATE OR
DATES AS MAY BE NECESSARY TO DELAY ITS EFFECTIVE DATE UNTIL THE REGISTRANT SHALL
FILE A FURTHER AMENDMENT WHICH SPECIFICALLY STATES THAT THIS REGISTRATION
STATEMENT SHALL THEREAFTER BECOME EFFECTIVE IN ACCORDANCE WITH SECTION 8(A) OF
THE SECURITIES ACT OF 1933 OR UNTIL THE REGISTRATION STATEMENT SHALL BECOME
EFFECTIVE ON SUCH DATE AS THE SECURITIES AND EXCHANGE COMMISSION, ACTING
PURSUANT TO SAID SECTION 8(A), MAY DETERMINE.

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<PAGE> 2

FIRST UNITED BANCSHARES, INC.

CROSS REFERENCE SHEET SHOWING LOCATION IN PROSPECTUS OF INFORMATION
REQUIRED BY ITEM 501(B) OF REGULATION S-K

A. INFORMATION ABOUT THE TRANSACTION

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REGISTRATION STATEMENT ITEM AND HEADING LOCATION IN PROSPECTUS AND PROXY STATEMENT
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1. Forepart of Registration Statement and Outside Front
Cover Page of Prospectus............................ Facing Page of Registration
Statement; Cross Reference
Sheet, Cover Page of Proxy
Statement

2. Inside Front and Outside Back Cover Pages of
Prospectus.......................................... Available Information;
Incorporation of Certain
Documents by Reference; Table
of Contents

3. Risk Factors, Ratio of Earnings to Fixed Charges and
Other Information................................... Summary; Financial Information

4. Terms of the Transaction.............................. The Merger

5. Pro Forma Financial Information....................... Summary -- Selected Financial
Data; Financial Information

6. Material Contacts with the Company Being Acquired..... The Merger -- Background of the
Merger; InvestArk Bankshares,
Inc. -- Resulting Ownership in
First United

7. Additional Information Required for Reoffering by
Persons and Parties Deemed to be Underwriters....... Not Applicable

8. Interests of Named Experts and Counsel................ Legal Matters and Experts

9. Disclosure of Commission Position on Indemnification
for Securities Act Liabilities...................... Not Applicable

B. INFORMATION ABOUT THE REGISTRANT

10. Information with Respect to S-3 Registrants........... First United Bancshares, Inc.

11. Incorporation of Certain Information by Reference..... Incorporation of Certain
Documents by Reference

12. Information with Respect to S-2 or S-3 Registrants.... Not Applicable

13. Incorporation of Certain Information by Reference..... Not Applicable

14. Information with Respect to Registrants Other than S-3
or S-2 Registrants.................................. Not Applicable

C. INFORMATION ABOUT THE COMPANY BEING ACQUIRED

15. Information with Respect to S-3 Companies............. Not Applicable

16. Information with Respect to S-2 or S-3 Companies...... Not Applicable

17. Information with Respect to Companies Other than S-3
or S-2 Companies

(1) Description of Business........................... InvestArk Bankshares, Inc. --
Description of Business

(2) Market Price of and Dividends on the Registrant's
Common Equity..................................... Summary -- Comparative Per Share
Data; InvestArk Bankshares,
Inc. -- Principal Stockholders
of InvestArk and Related
Stockholder Matters

(3) Selected Financial Data........................... Summary -- Selected Financial
Data

(4) Supplementary Financial Information............... Not Applicable
</TABLE>
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<TABLE>
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LOCATION IN PROSPECTUS AND PROXY
REGISTRATION STATEMENT ITEM AND HEADING STATEMENT
- ------------------------------------------------------------ ---------------------------------
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(5) Management's Discussion and Analysis of Financial
Condition and Results of Operations............... InvestArk Bankshares, Inc. --
Management Discussion and
Analysis
(6) Changes In and Disagreements with Accountants on
Accounting and Financial Disclosure............... Not Applicable
(7) Financial Statements.............................. Financial Information
(8) Quarterly Financial Information................... Not Applicable
(9) Financial Statement Schedules..................... Not Applicable

D. VOTING AND MANAGEMENT INFORMATION

18. Information if Proxies, Consents or Authorizations Are
to be Solicited
(1) Date, Time and Place of Information............... Cover Page of Proxy
(2) Revocability of Proxy............................. The InvestArk Special Meeting --
Voting; Solicitation of
Proxies; The First United
Special Meeting -- Voting;
Solicitation of Proxies
(3) Dissenters' Rights of Appraisal................... The Merger -- Right of Dissent
under the 1965 Act; Right of
Dissent under the 1987 Act
(4) Persons Making the Solicitation................... The InvestArk Special Meeting --
Voting; Solicitation of
Proxies; The First United
Special Meeting -- Voting;
Solicitation of Proxies
(5) Interest of Affiliates of the Registrant in the
Proposed Transaction; Voting Securities and
Principal Holders................................. InvestArk Bankshares, Inc. --
Principal Stockholders of
InvestArk; Directors and
Executive Officers; The
Merger -- Background of the
Merger
(6) Vote Required for Approval........................ The InvestArk Special Meeting --
Vote Required; The First United
Special Meeting -- Vote
Required
(7) (i) Directors and Executive Officers.............. Incorporation of Certain
Documents by Reference
(ii) Executive Compensation....................... Incorporation of Certain
Documents by Reference
(iii) Certain Relationships and Related
Transactions................................ Incorporation of Certain
Documents by Reference
19. Information if Proxies, Consents or Authorizations Are
Not to be Solicited or in an Exchange Offer......... Not Applicable
</TABLE>

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FIRST UNITED BANCSHARES, INC.

To the Stockholders of
First United Bancshares, Inc.

Enclosed is a Notice of Special Meeting of Stockholders of First United
Bancshares, Inc. ("First United") which will be held at the main office of First
National Bank of El Dorado at Main and Washington Streets, El Dorado, Arkansas
on June 13, 1994 at 2:00 P.M.

At a Special Meeting, Stockholders of First United will consider and vote
upon the merger of First United and InvestArk Bankshares, Inc. ("InvestArk")
whereby InvestArk will be merged with and into First United. The Agreement
between First United and InvestArk provides that the stockholders of InvestArk
will receive total consideration of $26,125,000 consisting of fully paid and
nonassessable shares of Common Stock, $1.00 par value of First United, if the
average price of First United Common Stock is between $26.50 and $29.50. If the
average price is in this range the number of shares of First United common stock
to be exchanged for all of the issued and outstanding shares of InvestArk Common
Stock will be determined by dividing $26,125,000 by the average price of First
United Common stock. The average price of First United Common Stock is defined
as the average sales price per share for all trades occurring during the period
of ten (10) trading days on which one or more trades actually takes place and
which ends immediately prior to the second trading day preceding the closing
date. Notwithstanding the foregoing, the number of shares of First United Common
Stock to be exchanged shall not be less than 885,593 and shall not be greater
than 985,849 which equate to an average price of First United Common Stock of
$29.50 and $26.50, respectively.

If the average price of First United common stock is less than $26.50, the
amount of shares issued shall equal the ceiling of 985,849 shares. Also, if the
average price of First United common stock is more than $29.50, the amount of
shares issued shall equal the floor of 885,593 shares. The total consideration
exchanged will vary from $26,125,00 if the average price is either higher than
$29.50 or lower than $26.50. For example, if the average price is $35.00, the
InvestArk stockholders shall receive 885,593 shares of First United common
stock, each share having a value of $35.00 representing total consideration of
$30,995,755. If the average price is $22.00, the InvestArk stockholders shall
receive 985,849 shares of First United common stock, each having a value of
$22.00 representing a total of $21,688,678.

InvestArk is a bank holding company which is primarily engaged in the
business of banking through its two wholly-owned bank subsidiaries, with branch
offices in Izard and Arkansas counties which provide a full range of banking
services to its customers.

The Board of Directors believes that the proposed merger upon the terms and
conditions set forth in the accompanying Proxy Statement is in the best
interests of our Stockholders and therefore recommends that you vote in favor of
the merger. Additional information regarding the proposed merger, InvestArk and
the rights of dissenting Stockholders is set forth in the enclosed Proxy
Statement and I urge you to read this material carefully.

You are cordially invited to attend the meeting in person. Whether or not
you plan to attend the Special Meeting, please sign, date and return as soon as
possible the enclosed proxy in the enclosed self-addressed and stamped envelope.
If you attend the meeting, you may vote in person if you wish, even though you
previously returned your proxy.

Very truly yours,

/s/ JAMES V. KELLEY
James V. Kelley
Chairman of the Board
<PAGE> 5

FIRST UNITED BANCSHARES, INC.

NOTICE OF SPECIAL MEETING OF STOCKHOLDERS

June 13, 1994

NOTICE is hereby given that a Special Meeting of Stockholders of First
United Bancshares, Inc. has been called by the Board of Directors and will be
held at the main office of First National Bank Building, Main and Washington
Streets, El Dorado, Arkansas on June 13, 1994 at 2:00 p.m. for the following
purposes:

1. To consider and vote upon an Agreement and Plan of Reorganization dated
as of December 17, 1993 which provides for the merger of InvestArk
Bankshares, Inc. into First United Bancshares, Inc. of El Dorado,
Arkansas.

2. To transact such other business as may properly come before the meeting
or any adjournment thereof.

All Stockholders of record at the close of business on April 29, 1994 are
entitled to vote at the meeting. The proposal 1 above requires the affirmative
vote of two-thirds of shares entitled to vote for approval.

Whether or not you plan to attend, please sign the enclosed Proxy and
return it at once in the stamped return envelope in order to insure that your
shares will be represented at the meeting. If you attend in person, the proxy
can be disregarded, if you wish, and you may vote your own shares.

By Order of the Board of Directors

/s/ ROBERT G. DUDLEY
Robert G. Dudley, Secretary

Dated: May 16, 1994

<PAGE> 6

INVESTARK BANKSHARES, INC.

To the Stockholders of
InvestArk Bankshares, Inc.

Enclosed is a Notice of Special Meeting of Stockholders of InvestArk
Bankshares, Inc. ("InvestArk") which will be held at the main office of First
Stuttgart Bank and Trust Company at 412 South Main Street, Stuttgart, Arkansas
on June 13, 1994 at 10:00 A.M.

At a Special Meeting, Stockholders of InvestArk will consider and vote upon
the merger of InvestArk with and into First United Bancshares, Inc. ("First
United"). The Agreement between First United and InvestArk provides that the
stockholders of InvestArk will receive total consideration of $26,125,000
consisting of fully paid and nonassessable shares of Common Stock, $1.00 par
value of First United, if the average price of First United Common Stock is
between $26.50 and $29.50. If the average price is in this range the number of
shares of First United common stock to be exchanged for all of the issued and
outstanding shares of InvestArk Common Stock will be determined by dividing
$26,125,000 by the average price of First United Common Stock. The average price
of First United Common Stock is defined as the average sales price per share for
all trades occurring during the period of ten (10) trading days on which one or
more trades actually takes place and which ends immediately prior to the second
trading day preceding the closing date. Notwithstanding the foregoing, the
number of shares of First United Common Stock to be exchanged shall not be less
than 885,593 and shall not be greater than 985,849 which equate to an average
price of First United Common Stock of $29.50 and $26.50, respectively.

If the average price of First United common stock is less than $26.50, the
amount of shares issued shall equal the ceiling of 985,849 shares. Also, if the
average price of First United common stock is more than $29.50, the amount of
shares issued shall equal the floor of 885,593 shares. The total consideration
exchanged will vary from $26,125,000 if the average price is either higher than
$29.50 or lower than $26.50. For example, if the average price is $35.00, the
InvestArk stockholders shall receive 885,593 shares of First United common
stock, each share having a value of $35.00 representing total consideration of
$30,995,755. If the average price is $22.00, the InvestArk stockholders shall
receive 985,849 shares of First United common stock, each share having a value
of $22.00 representing a total of $21,688,678.

Stockholders of InvestArk will also consider and vote upon the election by
InvestArk to be governed by the Arkansas Business Corporation Act of 1987. This
vote will be incidental to the vote on the merger in that the election will only
be made in order to facilitate compliance with statutory law in consummating the
merger and no election will be made unless the merger is approved.

First United is a bank holding company which is engaged in the business of
banking through its five wholly-owned bank subsidiaries, with branch offices in
Union, Van Buren, Columbia, Ouachita, and Crawford counties which provide a full
range of banking services to its customers.

The Board of Directors believes that the proposed merger upon the terms and
conditions set forth in the accompanying Proxy Statement is in the best
interests of our stockholders and therefore recommends that you vote in favor of
the merger and the election to be governed by the 1987 Act. Additional
information regarding the proposed merger, the above-referenced election, First
United and the rights of dissenting stockholders is set forth in the enclosed
Proxy Statement and I urge you to read this material carefully.

Very truly yours,

/s/ HARRY C. ERWIN
Harry C. Erwin
Chairman of the Board
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INVESTARK BANKSHARES, INC.

NOTICE OF SPECIAL MEETING OF STOCKHOLDERS

June 13, 1994

NOTICE is hereby given that the Special Meeting of Stockholders of
InvestArk Bankshares, Inc. has been called by the Board of Directors and will be
held at the main office of First Stuttgart Bank and Trust Company located at 412
South Main Street, Stuttgart, Arkansas on June 13, 1994 at 10:00 a.m. for the
following purposes:

1. To consider and vote upon an Agreement and Plan of Reorganization
("Agreement") dated as of December 17, 1993 which provides for the merger
of InvestArk Bankshares, Inc. into First United Bancshares, Inc. of El
Dorado, Arkansas.

2. To consider and vote upon an election to be governed by the Arkansas
Business Corporation Act of 1987. This vote will be incidental to the
vote upon the Agreement and will only be effective if the Agreement is
approved.

3. To transact such other business as may properly come before the meeting
or any adjournment thereof.

All stockholders of record at the close of business on April 29, 1994 are
entitled to vote at the meeting. Both proposals 1 and 2 above require the
affirmative vote of two-thirds of shares entitled to vote for approval.

By Order of the Board of Directors

/s/ HARRY C. ERWIN
Harry C. Erwin
Chairman of the Board

Dated: May 16, 1994

<PAGE> 8

FIRST UNITED BANCSHARES, INC.

AND

INVESTARK BANKSHARES, INC.

JOINT PROXY STATEMENT
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FIRST UNITED BANCSHARES, INC.

PROSPECTUS
985,849 SHARES OF COMMON STOCK
PAR VALUE $1.00

This Proxy Statement and Prospectus ("Proxy Statement") is being furnished
to the stockholders of InvestArk Bankshares, Inc. ("InvestArk") and First United
Bancshares, Inc. ("First United or the Company") in connection with the
solicitation of proxies by the Board of Directors of InvestArk and First United,
respectively, for use at the special meeting of stockholders of InvestArk to be
held on June 13, 1994, including any adjournments or postponements of the
meeting, and for use at a special meeting of stockholders of First United to be
held on June 13, 1994, including any adjournments or postponements of the
meeting. At the meetings or any adjournments or postponements thereof, the
stockholders of InvestArk and First United will be asked to consider and vote on
a proposal to authorize and approve the transactions contemplated by the
Agreement and Plan of Reorganization between First United and InvestArk, dated
December 17, 1993 (the "Agreement"), and incidental thereto the stockholders of
InvestArk will be asked to consider and vote on a proposal to elect to have
InvestArk governed by the Arkansas Business Corporation Act of 1987. Pursuant to
the Agreement and the Plan of Merger ("Plan of Merger") which is Exhibit A to
the Agreement, First United would acquire all of the issued and outstanding
stock of InvestArk through a merger transaction (the "Merger") in which
InvestArk would merge with and into First United in exchange for the issuance to
the stockholders of InvestArk of up to 985,849 shares of First United common
stock, par value $1.00 ("Common Stock").

First United has agreed to register under the Securities Act of 1933, as
amended (the "Securities Act") the 985,849 shares of First United Common Stock
that may be issued to stockholders of InvestArk in exchange for their stock in
InvestArk. Consequently, this Proxy Statement serves as a Prospectus of First
United under the Securities Act for the issuance of shares of First United
Common Stock to stockholders of InvestArk.

This Proxy Statement and the accompanying forms of proxy are first being
mailed to stockholders of InvestArk and First United on or about May 16, 1994.
On May 2, 1994, the closing price on the National Association of Securities
Dealers Automatic Quotation System of a share of First United Common Stock was
$30.00.

THE ABOVE MATTERS ARE DISCUSSED IN DETAIL IN THIS PROXY STATEMENT.
STOCKHOLDERS ARE STRONGLY URGED TO READ AND CONSIDER CAREFULLY THIS
PROXY STATEMENT IN ITS ENTIRETY.
------------------------

THE SECURITIES TO BE ISSUED IN THE PROPOSED TRANSACTION HAVE NOT BEEN APPROVED
OR DISAPPROVED BY THE SECURITIES AND EXCHANGE COMMISSION OR ANY STATE SECURITIES
COMMISSION NOR HAS THE SECURITIES AND EXCHANGE COMMISSION OR ANY STATE
SECURITIES COMMISSION PASSED UPON THE ACCURACY OR ADEQUACY OF THIS PROXY
STATEMENT. ANY REPRESENTATION TO THE CONTRARY IS A CRIMINAL OFFENSE.
------------------------

THE DATE OF THIS PROXY STATEMENT IS MAY 16, 1994.

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NO PERSON IS AUTHORIZED BY FIRST UNITED OR INVESTARK TO GIVE ANY
INFORMATION OR TO MAKE ANY REPRESENTATION, OTHER THAN THOSE CONTAINED IN THIS
PROXY STATEMENT, IN CONNECTION WITH THE SOLICITATION AND THE OFFERING MADE BY
THIS PROXY STATEMENT AND, IF GIVEN OR MADE, SUCH INFORMATION OR REPRESENTATIONS
SHOULD NOT BE RELIED UPON AS HAVING BEEN AUTHORIZED. THIS PROXY STATEMENT DOES
NOT CONSTITUTE THE SOLICITATION OF A PROXY OR AN OFFER TO SELL, OR A
SOLICITATION OF AN OFFER TO PURCHASE, ANY SECURITIES IN ANY JURISDICTION IN
WHICH SUCH SOLICITATION OR OFFERING MAY NOT LAWFULLY BE MADE.

NEITHER THE DELIVERY OF THIS PROXY STATEMENT NOR ANY DISTRIBUTION OF
SECURITIES MADE HEREUNDER SHALL IMPLY THAT THERE HAS BEEN NO CHANGE IN THE
INFORMATION SET FORTH HEREIN OR IN THE AFFAIRS OF FIRST UNITED OR INVESTARK
SINCE THE DATE HEREOF.

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AVAILABLE INFORMATION

First United is subject to the informational requirements of the Securities
Exchange Act of 1934, as amended ("Exchange Act"), and, in accordance therewith,
files proxy statements, reports and other information with the Securities and
Exchange Commission ("Commission"). This filed material can be inspected and
copied at the public reference facilities maintained by the Commission at Room
1024, 450 Fifth Street, N.W., Washington, D.C. 20549, and at the Commission's
Regional Offices in Chicago (500 West Madison, Northwestern Atrium Center, 14th
Floor, Chicago, Illinois 60661) and in New York (75 Park Place, New York, New
York 10007) and copies of such material can be obtained by mail from the Public
Reference Section of the Commission, 450 Fifth Street, N.W., Washington, D.C.
20549, at prescribed rates. First United's Common Stock is traded on the
National Association of Securities Dealers Automated Quotation National Market
System and the Company's Exchange Act reports and other information can be
inspected and copied at the National Association of Securities Dealers, 1735 "K"
Street, N.W., Washington, D.C. 20006.

First United has filed with the Commission a Registration Statement on Form
S-4 (together with any amendments thereto, the "Registration Statement") under
the Securities Act with respect to a maximum 985,849 shares of First United
Common Stock to be issued upon consummation of the transactions contemplated by
the Agreement. This Proxy Statement does not contain all the information set
forth in the Registration Statement and the exhibits thereto, certain portions
of which have been omitted as permitted by rules and regulations of the
Commission. Copies of the Registration Statement are available from the
Commission, upon payment of prescribed rates. For further information, reference
is made to the Registration Statement and the exhibits filed therewith.
Statements contained in this Proxy Statement or any document incorporated by
reference in this Proxy Statement relating to the contents of any contract or
other document referred to herein or therein are not necessarily complete, and
in each instance reference is made to the copy of such contract or other
document filed as an exhibit to the Registration Statement or such other
document, each such statement being qualified in all respects by such reference.

------------------------

INCORPORATION OF CERTAIN DOCUMENTS BY REFERENCE

THIS PROXY STATEMENT INCORPORATES DOCUMENTS BY REFERENCE WHICH ARE NOT
PRESENTED HEREIN OR DELIVERED HEREWITH. THESE DOCUMENTS ARE AVAILABLE UPON
REQUEST FROM MR. JOHN E. BURNS, VICE PRESIDENT AND CHIEF FINANCIAL OFFICER,
FIRST UNITED BANCSHARES, INC., MAIN AND WASHINGTON STREETS, EL DORADO, ARKANSAS
71730, (501) 863-3181. IN ORDER TO ENSURE TIMELY DELIVERY OF THE DOCUMENTS, ANY
REQUEST, ALTHOUGH NOT REQUIRED, SHOULD BE MADE, BY CERTIFIED MAIL, ON OR BEFORE
JUNE 6, 1994.

2
<PAGE> 10

The following documents of First United, which have been filed with the
Commission under the Exchange Act, are incorporated by reference into this Proxy
Statement:

1. The Company's Annual Report on Form 10-K for the fiscal year ended
December 31, 1993, filed with the Commission on March 30, 1994.

2. The Company's most recent Current Report on Form 8-K filed with the
Commission on January 5, 1994.

Each document filed subsequent to the date of this Proxy Statement pursuant
to Section 13(a), 13(c), 14 or 15(d) of the Exchange Act prior to the holding of
the meeting of the Stockholders of InvestArk and First United, respectively,
shall be deemed to be incorporated by reference in this Proxy Statement and
shall be part hereof from the date of filing of such document. Any statement
contained in a document incorporated or deemed to be incorporated in this Proxy
Statement shall be deemed to be modified or superseded for purposes of this
Proxy Statement to the extent that a statement contained herein or in any other
subsequently filed document which also is or is deemed to be incorporated by
reference modifies or supersedes such document.

All information contained in this Proxy Statement relating to First United
has been supplied by First United and all information relating to InvestArk has
been supplied by InvestArk.

3
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TABLE OF CONTENTS

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SUMMARY
The Company......................................................................... 6
InvestArk........................................................................... 6
Federal Reserve Board Investigations................................................ 6
The Merger.......................................................................... 6
Combined Company.................................................................... 7
No Fairness Opinion................................................................. 7
Election by InvestArk Stockholders Under the 1987 Act............................... 7
The First United Special Meeting.................................................... 8
The InvestArk Special Meeting....................................................... 8
Certain Federal Income Tax Consequences............................................. 8
Dissenters' Rights.................................................................. 8
Regulatory Approvals................................................................ 9
Accounting Treatment................................................................ 9
Market Prices....................................................................... 9
Comparative Per Share Data.......................................................... 9
Selected Financial Data............................................................. 11
THE INVESTARK SPECIAL MEETING
Date, Time and Place................................................................ 12
Purpose of Meeting.................................................................. 12
Shares Outstanding and Entitled to Vote; Record Date................................ 12
Vote Required....................................................................... 12
Voting; Solicitation of Proxies..................................................... 12
THE FIRST UNITED SPECIAL MEETING
Date, Time and Place................................................................ 13
Purpose of Meeting.................................................................. 13
Shares Outstanding and Entitled to Vote; Record Date................................ 13
Vote Required....................................................................... 13
Voting; Solicitation of Proxies..................................................... 13
THE MERGER
Background of the Merger............................................................ 14
Reason for the Merger............................................................... 16
Fairness of the Transaction......................................................... 16
The Agreement....................................................................... 16
Regulatory Approvals................................................................ 18
Antitrust Matters................................................................... 18
Certain Federal Income Tax Consequences............................................. 18
Accounting Treatment................................................................ 19
Right of Dissent Under the 1965 Act................................................. 19
Right of Dissent under the 1987 Act................................................. 20
Exchange Ratio for the Merger....................................................... 21
Expenses of the Merger.............................................................. 22
FINANCIAL INFORMATION
Pro Forma Combining Balance Sheets.................................................. 23
Pro Forma Combining Statements of Income............................................ 24
Notes to Pro Forma Combining Financial Statements................................... 27
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4
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ELECTION BY INVESTARK STOCKHOLDERS UNDER THE 1987 ACT
Election Incidental to the Merger................................................... 27
Reason for the Election............................................................. 27
Result of the Election.............................................................. 27
FIRST UNITED BANCSHARES, INC.
General............................................................................. 30
Regulation.......................................................................... 30
Offices............................................................................. 32
Employees........................................................................... 32
Description of First United Common Stock............................................ 32
Resale of First United Common Stock................................................. 32
Recent Acquisition.................................................................. 33
INVESTARK BANKSHARES, INC.
Description of Business............................................................. 33
Management's Discussion and Analysis................................................ 33
Directors and Executive Officers.................................................... 42
Transactions with Management........................................................ 43
Principal Stockholders of InvestArk................................................. 43
Federal Reserve Board Investigations................................................ 44
Resulting Ownership in First United................................................. 45
Registration Rights................................................................. 46
Competition......................................................................... 46
Litigation.......................................................................... 46
Offices............................................................................. 47
Employees........................................................................... 47
Description of InvestArk Stock...................................................... 47
Comparison of Rights of Holders of InvestArk Common Stock and
First United Common Stock........................................................ 47
LEGAL MATTERS AND EXPERTS
Legal Opinions...................................................................... 48
Experts............................................................................. 48
General............................................................................. 48
INDEX TO INVESTARK FINANCIAL STATEMENTS............................................... F-1
ANNEXES
I - Agreement and Plan of Reorganization I-1
II - Arkansas Business Corporation Act of 1965 sec. 4-26-1007 II-1
III- Arkansas Business Corporation Act of 1987 sec. 4-27-1301 et. seq. III-1
</TABLE>

5
<PAGE> 13

SUMMARY

The following is a summary of certain information contained elsewhere in
this Proxy Statement. Reference is made to, and this summary is qualified in its
entirety by, the more detailed information contained elsewhere in this Proxy
Statement, in the attached Annexes and in the documents incorporated by
reference. Stockholders are urged to read carefully this Proxy Statement and the
attached Annexes in their entirety.

THE COMPANY

The Company is a multi-bank holding company located in El Dorado, Arkansas
with five wholly-owned subsidiary banks operating in over 28 locations in seven
communities throughout the State of Arkansas. The Company's subsidiary banks
consist of First National Bank of El Dorado, El Dorado, Arkansas; First National
Bank of Magnolia, Magnolia, Arkansas; City National Bank of Fort Smith, Fort
Smith, Arkansas; Merchants and Planters Bank, N.A., Camden, Arkansas; and
Commercial Bank at Alma, Alma, Arkansas (collectively called the "Subsidiary
Banks"). The Company had consolidated assets of $938,694,000, and stockholders'
equity of $91,257,000 as of December 31, 1993.

The Company's Common Stock is traded on the National Association of
Securities Dealers Automated Quotation National Market System Over-the-Counter
Market (NASDAQ-NMS) under the symbol "UNTD". The Company's principal executive
offices are located at Main and Washington Streets, El Dorado, Arkansas, 71730,
and its telephone number is (501) 863-3181.

INVESTARK

InvestArk is a privately-owned Arkansas bank holding company which owns
99.7% of Bank of North Arkansas, Melbourne, Arkansas ("North Arkansas") and 100%
of First Stuttgart Bank and Trust Company, Stuttgart, Arkansas ("First Bank").
InvestArk had consolidated assets of $184,904,000 and stockholders' equity of
$16,865,000 as of December 31, 1993.

There is no public market for shares of InvestArk's outstanding capital
stock. InvestArk's principal executive offices are located at 412 South Main
Street, Stuttgart, Arkansas, 72021; its telephone number is (501) 673-3545.

FEDERAL RESERVE BOARD INVESTIGATIONS

On March 4, 1993, the Board of Governors of the Federal Reserve System
commenced a formal investigation of the ownership and control of Worthen Banking
Corporation ("Worthen"). The investigation appears to be focused on whether
members of the families of Jackson T. Stephens and Wilton R. Stephens (deceased)
have exerted control over Worthen in violation of the Bank Holding Company Act
and the Change in Bank Control Act. The events and transactions which are the
subject of the investigation do not involve InvestArk or First United. The
investigation is still ongoing. See "InvestArk Bankshares, Inc. -- Federal
Reserve Board Investigations."

In addition, in February 1993, InvestArk management was advised that the
Federal Reserve Bank of St. Louis (the "St. Louis FED") had initiated a review
of the purchase and sale of municipal and other securities by and between
Stephens Inc., a registered broker-dealer owned by the Stephens family, and
InvestArk's bank subsidiaries to determine whether the transactions violated the
prohibitions of Section 23A and 23B of the Federal Reserve Act. First United's
obligation to consummate the Merger is conditioned upon the St. Louis FED not
having notified either of the parties of actual or proposed regulatory action
having an adverse effect on First United, InvestArk or the InvestArk bank
subsidiaries. See "InvestArk Bankshares, Inc. -- Federal Reserve Board
Investigations."

THE MERGER

On December 17, 1993, the Company and InvestArk entered into a definitive
agreement pursuant to which the Company proposes to acquire all of the issued
and outstanding stock of InvestArk by merger of InvestArk with and into First
United. The acquisition of InvestArk will be consummated through the issuance

6
<PAGE> 14

to InvestArk's stockholders of up to 985,849 shares of First United Common
Stock. The reason for the Merger is to expand the markets of the Company and
thereby increase the earning potential of the Company. The Agreement requires
that the merger be accounted for as a pooling of interests. See "The
Merger -- The Agreement."

On October 21, 1993, the date immediately prior to the announcement of the
agreement in principle, shares of First United Common Stock traded on the
NASDAQ-NMS at a closing sales price of $29.50. There is no established market
value for the stock of InvestArk.

Stephens Inc., a registered broker-dealer, served as a financial adviser to
InvestArk with respect to the Merger. For its role, Stephens Inc. is to receive
a $100,000 cash payment plus reasonable expenses from InvestArk. Stephens Inc.
is controlled by certain members of the families of Jackson T. Stephens and
Wilton R. Stephens (deceased) who are also affiliates of InvestArk. There are no
other benefits, other than the benefit of share ownership and/or continued
employment, to be received by insiders, officers, directors, affiliates or
principal stockholders of either InvestArk or First United as a result of the
Merger.

THE BOARD OF DIRECTORS OF FIRST UNITED AND INVESTARK UNANIMOUSLY RECOMMEND
THAT FIRST UNITED AND INVESTARK STOCKHOLDERS, RESPECTIVELY, VOTE IN FAVOR OF THE
ADOPTION OF THE AGREEMENT.

COMBINED COMPANY

As a result of the Merger, the combined operations and its constituent
parts of First United and InvestArk as of December 31, 1993 and for the year
then ended will reflect assets, shareholders' equity, net interest income and
income from continuing operations as follows (in thousands):

<TABLE>
<CAPTION>
% %
FIRST PRO FORMA PRO FORMA PRO FORMA
UNITED COMBINED INVESTARK COMBINED COMBINED
-------- --------- --------- --------- ----------
<S> <C> <C> <C> <C> <C>
Assets................................. $938,694 83.54 $ 184,904 16.46 $1,123,598
Shareholders' equity................... 91,257 84.40 16,865 15.60 108,122
Net interest income.................... 35,553 82.56 7,510 17.44 43,063
Income from continuing operations...... 11,937 90.33 1,278 9.67 13,215
</TABLE>

If the maximum of 985,849 shares of common stock of First United are issued
to InvestArk stockholders, First United will have a total of 5,258,125 shares of
common stock issued and outstanding. Present First United stockholders will
control 81.25% of such shares and InvestArk stockholders will control 18.75% of
such shares. Approximately two-thirds of all shares issued to InvestArk
stockholders will be issued to members of the Stephens family. Pursuant to an
agreement with the Board of Governors of the Federal Reserve System, these
shares will be placed in trust and the voting power over such shares shall be
exercised by the trustee, who shall vote such shares equal to the percentages of
affirmative and negative votes of all other shares on any matter presented to
stockholders. The W. R. Stephens Trust and the W. R. Stephens, Jr. Trust
presently own approximately 3.95% of all issued and outstanding shares of First
United common stock and these shares will continue to be voted by their
respective trustees. See "InvestArk Bankshares, Inc. -- Resulting Ownership in
First United."

NO FAIRNESS OPINION

No fairness opinion will be rendered in connection with this transaction.

ELECTION BY INVESTARK STOCKHOLDERS UNDER THE 1987 ACT

The Election by the stockholders of InvestArk to be governed by the
Arkansas Business Corporation Act of 1987 codified at Ark. Code Ann. sec.
4-27-101 et. seq. (the "1987 Act") is incidental to and a condition of the
Merger proposal and approval of such election will have no force or effect
unless the Merger is likewise approved.

7
<PAGE> 15

InvestArk is a corporation organized under the Arkansas Business
Corporation Act of 1965, codified at Ark. Code Ann. sec. 4-26-101 et.seq. (the
"1965 Act"). The 1987 Act is applicable to those corporations that were
incorporated on or after January 1, 1988 or those "1965 Act" corporations that
elect to be governed by the 1987 Act by amending their Articles of Incorporation
to so state. The stockholders of First United elected to be governed by the 1987
Act by amending its Articles of Incorporation.

The 1965 Act and 1987 Act have statutory merger procedures that must be
complied with in order to legally consummate a merger. Although both Acts
contain similar provisions, InvestArk must elect to be governed by the 1987 Act
in order to facilitate compliance with the applicable statutory procedures.

THE FIRST UNITED SPECIAL MEETING

Approval of the Merger by the stockholders of First United will be
considered at a Special Meeting to be held at the First National Bank Building,
El Dorado, Arkansas on June 13, 1994 at 2:00 p.m. Central Daylight Time.

The affirmative vote of the holders of two-thirds of the outstanding shares
of First United Common Stock is required for approval of the Merger. Directors,
executive officers and their affiliates hold a total of approximately 26.50% of
the outstanding Common Stock of First United. Stockholders of First United are
entitled to dissenters' rights. See "The Merger -- Right of Dissent under the
1987 Act."

THE INVESTARK SPECIAL MEETING

Approval of the Merger by the stockholders of InvestArk will be considered
at a Special Meeting to be held at 412 South Main Street, Stuttgart, Arkansas on
June 13, 1994, at 10:00 a.m. Central Daylight Time.

The affirmative vote of the holders of a two-thirds of the outstanding
shares of InvestArk common stock is required for the approval of the Merger and
the Election to be governed by the 1987 Act. Directors, executive officers and
their affiliates hold a total of 6.30% of the outstanding stock of InvestArk. In
addition, stockholders who in the aggregate own 66.14% of the issued and
outstanding shares of InvestArk common stock have contractually committed to
vote their shares in favor of the Merger. Stockholders of InvestArk are entitled
to dissenters' rights. See "The Merger -- Right of Dissent under the 1965 Act;
Right of Dissent under the 1987 Act."

CERTAIN FEDERAL INCOME TAX CONSEQUENCES

It is intended that for federal income tax purposes the Merger will be
treated as a reorganization within the meaning of Section 368(a) of the Internal
Revenue Code of 1986, as amended (the "Code"), and, accordingly, for federal
income tax purposes, no gain or loss will be recognized by either First United
or InvestArk as a result of the Merger and InvestArk's stockholders will not
recognize gain or loss upon the receipt of First United Common Stock in exchange
for InvestArk common stock. InvestArk expects to receive an opinion of counsel,
dated as of the effective date of the Merger, opining that no gain or loss will
be recognized by the InvestArk stockholders upon the receipt of First United
Common Stock in exchange for InvestArk common stock in connection with the
Merger. The parties to this transaction will not request a ruling from the
Internal Revenue Service concerning the taxability of this transaction. See "The
Merger -- Certain Federal Income Tax Consequences."

DISSENTERS' RIGHTS

Holders of both First United Common Stock and InvestArk common stock are
entitled to dissenter's rights with respect to the Merger. Holders of First
United Common Stock may exercise their right of dissent under the 1987 Act,
while Holders of InvestArk Common Stock may exercise their right of dissent
under either the 1965 Act or the 1987 Act. See "The Merger -- Right of Dissent
under the 1965 Act; Right of Dissent under the 1987 Act."

8
<PAGE> 16

REGULATORY APPROVALS

At this time, First United has received the approval of the Board of
Governors of the Federal Reserve to merge InvestArk into First United. First
United has also received the approval of the Arkansas Bank Commissioner to
consummate the Merger. See "The Merger -- Regulatory Approvals."

ACCOUNTING TREATMENT

First United intends to treat the Merger as a pooling of interests for
accounting purposes. Consummation of the Merger is conditioned upon the receipt
of the opinion of Arthur Andersen & Co. that the Merger will qualify for the
pooling of interests accounting treatment. See "The Merger -- Accounting
Treatment."

MARKET PRICES

First United Common Stock is traded over-the-counter in the NASDAQ National
Market System. InvestArk common stock is not traded publicly and there is no
quoted market for the stock. The table below shows the high and low closing
sales prices for First United Common Stock.

<TABLE>
<CAPTION>
FIRST UNITED
COMMON STOCK(1)
--------------------
1 SHARE
--------------------
HIGH LOW
------ -------
<S> <C> <C>
1991............................................ $13.50 $ 11.75
1992............................................ $26.00 $13.375
1993............................................ $29.50 $ 23.00
</TABLE>

- ---------------
(1) All share prices have been adjusted for a two-for-one stock split which was
declared July 27, 1992.

On October 21, 1993, immediately prior to the public announcement of the
agreement in principle between First United and InvestArk as to the proposed
merger transaction, the closing sales price for First United Common Stock was
$29.50. On May 2, 1994, the closing sales price for First United Common Stock
was $30.00.

COMPARATIVE PER SHARE DATA

The following table sets forth for the periods indicated selected
historical per share data of First United and InvestArk and the corresponding
pro forma and pro forma equivalent per share amounts giving effect to the
proposed Merger. The data presented are based upon the consolidated financial
statements and related notes of First United which are incorporated by reference
in this Proxy Statement, and the consolidated financial statements and related
notes of InvestArk and the pro forma combining balance sheet and income
statements, including the notes thereto, appearing elsewhere herein. This
information should be read in conjunction with such historical and pro forma
financial statements and related notes thereto. The assumptions used in the
preparation of this table appear elsewhere in this Proxy Statement. See
"Financial Information." These data are not necessarily indicative of the
results of the future operations of the combined

9
<PAGE> 17

organization or the actual results that would have occurred if the Merger had
been consummated prior to the periods indicated.

<TABLE>
<CAPTION>
FIRST UNITED/INVESTARK INVESTARK PRO FORMA
FIRST PRO FORMA COMBINED(1) EQUIVALENT(2)
UNITED INVESTARK ------------------------ ------------------------
HISTORICAL HISTORICAL $26.50 $29.00 $29.50 $26.50 $29.00 $29.50
---------- ---------- ------ ------ ------ ------ ------ ------
<S> <C> <C> <C> <C> <C> <C> <C> <C>
Book value per common share:
December 31, 1993............ $21.36 $78.09 $20.56 $20.90 $20.96 $93.75 $87.15 $85.94
Cash dividends per common
share:
Year ended December 31,
1991...................... .50 .90 .50 .50 .50 2.28 2.09 2.05
Year ended December 31,
1992...................... .60 .95 .60 .60 .60 2.74 2.50 2.46
Year ended December 31,
1993...................... .66 1.15 .66 .66 .66 3.01 2.75 2.71
Income per share from
continuing operations:
Year ended December 31,
1991...................... 1.77 4.19 1.61 1.63 1.64 7.34 6.80 6.72
Year ended December 31,
1992...................... 2.44 10.33 2.41 2.45 2.46 10.99 10.22 10.09
Year ended December 31,
1993...................... 2.79 5.93 2.51 2.55 2.56 11.45 10.63 10.50
</TABLE>

- ---------------

(1) See "Financial Information."

(2) The InvestArk pro forma equivalents represent the respective First
United/InvestArk pro forma combined earnings, dividends and book value per
common share multiplied by the applicable exchange ratio of 4.56 ($26.50
First United stock value), 4.17 ($29.00 First United stock value) or 4.10
($29.50 First United stock value) shares of First United Common Stock for
each share of InvestArk Common Stock so that the First United/InvestArk pro
forma equivalent amounts are equated to the respective values for one share
of InvestArk Common Stock. The exchange ratio is determined by dividing
First United common stock to be received by the InvestArk stockholders by
the 215,960 shares of InvestArk Common Stock currently outstanding.

SELECTED FINANCIAL DATA

The table on the following page presents selected historical financial data
of First United and InvestArk and selected unaudited pro forma financial data
after giving effect to the Merger as a pooling of interests for accounting
purposes, assuming the Merger had occurred at the beginning of the earliest
period presented, but without giving effect to costs associated with the
consummation of the Merger, which currently are estimated to total $175,000. The
First United historical data for each of the years in the five-year period ended
December 31, 1993 are based on the historical financial statements of First
United as audited by Arthur Andersen & Co., independent public accountants. The
InvestArk historical data for each of the years in the five-year period ended
December 31, 1993 are based on the historical financial statements of InvestArk
as audited by Martin and Company, independent auditors. The pro forma data is
not necessarily indicative of the results of operations or the financial
condition that would have been reported had the Merger been in effect during
those periods, or as of those dates, or that may be reported in the future. Pro
forma combined per share data of First United and InvestArk give effect to the
exchange of each share of InvestArk common stock for 4.17 shares of First United
Common Stock.

10
<PAGE> 18

These data should be read in conjunction with the consolidated financial
statements of each of First United and InvestArk, and the related notes thereto,
incorporated by reference herein and in conjunction with the unaudited pro forma
financial information, including the notes thereto, appearing elsewhere in this
Proxy Statement. See "Incorporation of Certain Documents by Reference" and
"Financial Information."

SELECTED FINANCIAL DATA

<TABLE>
<CAPTION>
YEAR ENDED DECEMBER 31,
-----------------------------------------------------------
1989 1990 1991 1992 1993
--------- --------- ----------- ----------- -----------
(IN THOUSANDS, EXCEPT PER SHARE DATA)
<S> <C> <C> <C> <C> <C>
FIRST UNITED -- HISTORICAL
Operating Data
Total interest income.................. $ 65,903 $ 68,213 $ 68,796 $ 63,381 $ 59,413
Net interest income.................... 24,825 26,913 29,933 34,691 35,553
Provision for possible loan losses..... 3,837 2,122 3,250 2,422 1,215
Income from continuing operations...... 6,201 7,438 7,547 10,443 11,937
Per Share Data
Income from continuing operations...... 1.45 1.74 1.77 2.44 2.79
Cash dividend paid..................... 0.50 0.50 0.50 0.60 0.66
Selected Balance Sheet Items
Total assets........................... 765,338 797,242 848,582 895,527 938,694
Total securities....................... 261,600 294,366 373,824 427,090 425,535
Net loans.............................. 374,136 376,544 369,726 363,655 406,331
Total deposits......................... 660,851 689,713 743,631 772,995 806,449
Long-term debt......................... 11,643 10,536 9,429 8,321 7,214
Capital accounts....................... 61,025 66,327 71,737 79,618 91,257
INVESTARK -- HISTORICAL
Operating Data
Total interest income.................. $ 14,756 $ 15,786 $ 15,960 $ 14,188 $ 12,555
Net interest income.................... 5,942 6,171 6,777 7,819 7,510
Provision for possible loan losses..... 448 1,576 1,463 64 600
Income from continuing operations...... 1,435 286 907 2,233 1,278
Per Share Data
Income from continuing operations...... 6.64 1.32 4.19 10.33 5.93
Cash dividend paid..................... 0.63 0.60 0.90 0.95 1.15
Selected Balance Sheet Items
Total assets........................... 164,535 183,114 189,738 190,933 184,904
Total securities....................... 60,956 74,690 72,239 82,462 87,864
Net loans.............................. 81,409 87,621 86,745 85,906 83,002
Total deposits......................... 143,135 159,936 166,072 170,102 163,300
Long-term debt......................... 1,100 890 870 500 509
Capital accounts....................... 12,908 13,102 13,833 15,820 16,865
</TABLE>

11
<PAGE> 19

THE INVESTARK SPECIAL MEETING

DATE, TIME AND PLACE

The InvestArk Special Meeting will be held on June 13, 1994, commencing at
10:00 a.m. Central Daylight Time, at the offices of InvestArk, 412 South Main
Street, Stuttgart, Arkansas.

PURPOSE OF MEETING

The purpose of the InvestArk Special Meeting is to consider and vote upon
the adoption of the Agreement between InvestArk and First United and to consider
and vote upon the election of InvestArk to be governed by the Arkansas Business
Corporation Act of 1987 (the "Election").

SHARES OUTSTANDING AND ENTITLED TO VOTE; RECORD DATE

The close of business on April 29, 1994 has been fixed by the Board of
Directors of InvestArk as the record date for the determination of holders of
InvestArk common stock entitled to notice of and to vote at the InvestArk
Special Meeting. At the close of business on April 29, 1994, there were 215,960
shares of InvestArk common stock issued and outstanding held by 159 shareholders
of record. Holders of record of InvestArk common stock on the record date are
entitled to one vote per share and are entitled to dissenters' rights. See "The
Merger -- Right of Dissent under the 1965 Act; Right of Dissent under the 1987
Act."

VOTE REQUIRED

The affirmative vote of two-thirds of all the shares of InvestArk common
stock outstanding on the record date is required to adopt the Agreement and the
Election.

As of January 1, 1994, directors, executive officers and their affiliates
own 6.30% of the outstanding stock of InvestArk. In addition, other stockholders
who in the aggregate own 66.14% of the outstanding shares of InvestArk common
stock, have contractually committed to vote their shares in favor of the Merger.

VOTING; SOLICITATION OF PROXIES

Proxies for use at the InvestArk Special Meeting accompany copies of this
Proxy Statement delivered to record holders of InvestArk common stock and such
proxies are solicited on behalf of the Board of Directors of InvestArk. A holder
of InvestArk common stock may use his proxy if he is unable to attend the
InvestArk

12
<PAGE> 20

Special Meeting in person or wishes to have his shares voted by proxy even if he
does attend the meeting. The proxy may be revoked in writing by the person
giving it at any time before it is exercised by notice of such revocation to the
secretary of InvestArk, or by submitting a proxy having a later date, or by such
person appearing at the InvestArk meeting and electing to vote in person. All
proxies validly submitted and not revoked will be voted in the manner specified
therein. If no specification is made, the proxies will be voted in favor of the
Merger and the Election.

InvestArk will bear the cost of solicitation of proxies from its
stockholders. In addition to using the mails, proxies may be solicited by
personal interview. Officers and other employees of InvestArk acting on
InvestArk's behalf, may solicit proxies personally.

THE FIRST UNITED SPECIAL MEETING

DATE, TIME AND PLACE

The First United Special Meeting will be held on June 13, 1994, commencing
at 2:00 p.m. Central Daylight Time at the First National Bank Building, Main and
Washington Streets, El Dorado, Arkansas.

PURPOSE OF MEETING

The purpose of the First United Special Meeting is to consider and vote
upon the adoption of the Agreement between InvestArk and First United.

SHARES OUTSTANDING AND ENTITLED TO VOTE; RECORD DATE

The close of business on April 29, 1994 has been fixed by the Board of
Directors of First United as the record date for determination of holders of
First United Common Stock entitled to notice of and to vote at the First United
Special Meeting. At the close of business on April 29, 1994, there were
4,272,276 shares of First United Common Stock issued and outstanding held by
approximately 800 stockholders of record. Holders of record of First United
Common Stock on the record date are entitled to one vote per share, and are
entitled to Dissenter's Rights. See "The Merger -- Right of Dissent under the
1987 Act."

VOTE REQUIRED

The affirmative vote of two-thirds of all the shares of First United Common
Stock outstanding on the record date is required to adopt the Agreement. As of
January 1, 1994, directors, executive officers and their affiliates own
approximately 26.50% of the outstanding Common Stock of First United.

VOTING; SOLICITATION OF PROXIES

Proxies for use at the First United Special Meeting accompany copies of
this Proxy Statement delivered to record holders of First United Common Stock. A
holder of First United Common Stock may use his proxy if he is unable to attend
the First United Special Meeting in person or wishes to have his shares voted by
proxy even if he does attend the meeting. The proxy may be revoked in writing by
the person giving it at any time before it is exercised by notice of such
revocation to the secretary of First United, or by submitting a proxy having a
later date, or by such person appearing at the First United Special Meeting and
electing to vote in person. All proxies validly submitted and not revoked will
be voted in the manner specified therein. If no specification is made, the
proxies will be voted in favor of the Merger.

First United will bear the cost of solicitation of proxies from its
stockholders. In addition to using the mails, proxies may be solicited by
personal interview. Officers and other employees of First United, acting on
First United's behalf, may solicit proxies personally.

13
<PAGE> 21

THE MERGER

BACKGROUND OF THE MERGER

From time to time, the board of directors and management of InvestArk have
considered various strategies for InvestArk, including merging with a larger
company. Representatives of Stephens Inc. of Little Rock, Arkansas, InvestArk's
financial advisors, were authorized to solicit potential merger partners.
Stephens Inc. initially compiled a broad list of prospects who might have an
interest. This list was then narrowed to a list of potential merger partners,
including First United, based on an evaluation of compatibility with InvestArk's
business, ability to provide satisfactory terms, and business and financial
prospects. The board viewed each of these criteria as being important to the
maximization of the InvestArk stockholders' value and the long-term best
interest of stockholders. Of primary importance was the ability of the potential
merger partner to continue and increase the market value of the investment by
InvestArk stockholders through continued and enhanced business operations. The
board also considered whether a potential merger partner would be able to
provide InvestArk stockholders with readily marketable shares if a merger
transaction ensued and was effected through a tax-advantaged share exchange.

Twelve companies from the list, including First United, were contacted on a
confidential basis concerning the possible merger. Eight of those companies were
sufficiently interested to sign confidentiality agreements and receive a package
of basic information about InvestArk. Although several parties indicated
additional general interest after reviewing the basic information, only First
United expressed a level of interest serious enough to merit further discussion.
After indicating specific interest and after the confidentiality agreement was
executed, First United was given the opportunity to examine the books and
records of InvestArk on a confidential basis. After First United completed its
review, the chairman of the board of InvestArk, with the assistance of
InvestArk's financial advisors, negotiated the specific financial terms of the
transaction with First United's Chief Financial Officer. These terms were placed
in a letter of intent which was executed on October 21, 1993. This letter of
intent provided the framework for the definitive, binding agreement between
InvestArk and First United. The definitive agreement was prepared and finalized
between October 21, 1993, and December 17, 1993. The definitive agreement was
formally presented to InvestArk's board for consideration on that date.

In order to fully and finally evaluate the economic terms of the
transaction, the InvestArk board of directors, with the assistance of its
financial advisors, reviewed and evaluated the proposed transaction based on a
variety of criteria. The price was evaluated as a multiple of InvestArk's 1992
income, as a multiple of InvestArk's estimated 1993 net income, and as a
multiple of InvestArk's estimated September 30, 1993, book value. Assuming that
each First United share is valued in the range of $26.50 to $29.50, the First
United offer is equal to 11.70 times InvestArk's 1992 net income, and
approximately 1.5 times InvestArk's September 30, 1993 book value as estimated
at the time. These multiples were determined by the board of InvestArk to be
within the range of reasonableness when compared to other similar transactions.

The proposed transaction was also evaluated in regard to the earnings
effect on First United and on the basis of the amount of dividends which, based
on past payment history, would result to InvestArk stockholders. These
comparisons also indicated that the proposed transaction would be beneficial.

14
<PAGE> 22

The InvestArk board, with the assistance of its financial advisors, also
compared the proposed transaction with other transactions which were apparently
similar. The table below is a summary of selected comparable merger transactions
that the board considered which reflects the names, dates, total value and
multiples of income and equity of the targets.

<TABLE>
<CAPTION>
TRANSACTION
VALUE/ TARGET
-----------------
DATE TRANSACTION NET
ACQUIRER TARGET ANNOUNCED VALUE INCOME EQUITY
- ------------------------------------- --------- ---------------------- ------ ------
(DOLLARS IN THOUSANDS)
<S> <C> <C> <C> <C>
Worthen Banking Corp. 01/31/92 $ 37,950(a) 11.6x 1.9x
First National Bank, Fayetteville
Worthen Banking Corp. 06/30/92 100,000 30.1 2.0
The Union of Arkansas Corp.
State First Financial Corp. 01/01/93 7,352(b) 10.1 1.2
First National Bank of Nashville 8,388(c) 11.5 1.4
Union Planters Corp. 01/01/93 25,300 13.9 1.5
Bank of East Tennessee
Worthen Banking Corp. 04/23/93 14,700(d) 15.2 1.9
First Bentonville Bancshares, Inc.
Union Planters Corp. 05/31/93 15,500 N/A 3.3
Garrett Bancshares, Inc.
Union Planters Corp. 06/01/93 8,300 12.2 1.3
Erin Bank & Trust Company
Union Planters Corp. 08/20/93 23,000 22.0 1.9
Mid-South Bancorp, Inc.
</TABLE>

- ---------------

(a) Based on $15,750 thousand of cash paid and the issuance of 1,200 thousand
shares multiplied by the Worthen stock price as of 01/31/92 of $18.50.

(b) Based on the issuance of 262,566 shares issued multiplied by
estimated/approximate value of $28.00 per share.

(c) Based on the issuance of 37,000 additional shares which is subject to
satisfaction of contingency provisions in the purchase agreement.

(d) Purchase price based on a stated multiple of 1.85 times adjusted book
value, to be paid 60% in stock and the assumption of approximately $5
million of debt.

The InvestArk board evaluated the price/earnings multiples of the stock of
selected publicly traded bank holding companies located in Arkansas, Missouri,
and Tennessee. This evaluation reflected that the trading range price of First
United shares was reasonable in comparison to the shares of other selected
publicly traded bank holding companies, and therefore the shares to be received
by InvestArk stockholders appeared to be reasonably valued by the market. The
board of InvestArk also reviewed a summary of selected comparable merger
transactions and determined that the total consideration was reasonable and
within the range of other similar transactions. The board of InvestArk also
reviewed the First United 1992 annual report on Form 10-K, as well as the Form
10-Q filed by First United for the period ended September 30, 1993. The board of
InvestArk, through its financial advisors, also requested certain additional
information regarding material litigation, environmental concerns and
nonperforming assets of First United. The historical and current market price
and trading trends for First United stock were also charted and reviewed. These
were viewed favorably by the board of InvestArk.

15
<PAGE> 23

After all of these matters were reviewed and considered by the board, the
board determined that the First United offer was acceptable, and the Agreement
was approved on December 17, 1993, for presentation to the InvestArk
stockholders.

For its role as financial advisor to InvestArk, Stephens Inc. is to receive
a cash payment of $100,000 from InvestArk, plus reimbursement for reasonable
expenses which are expected to be minimal. Payment is to be made at the closing
of the merger. Stephens Inc. is controlled by certain members of the families of
Wilton R. Stephens (deceased) and Jackson T. Stephens, who are also affiliates
of InvestArk. Various Stephens family members and trusts own in the aggregate
66.14% of the outstanding shares of InvestArk common stock and have entered into
an agreement with First United to vote such shares in favor of the Merger.

Stephens Inc. has acted as a market maker for First United common stock,
which is traded on the National Association of Securities Dealers automated
quotation system national market system, for many years. However, Stephens Inc.
has temporarily suspended its role as a market maker in First United common
stock pending closing of the merger.

REASON FOR THE MERGER

The acquisition of InvestArk will expand First United's current markets.
The banking subsidiaries of InvestArk are located in Melbourne, Arkansas and
Stuttgart, Arkansas. Currently, there are no banking offices in the First United
system located in Melbourne or Stuttgart. Thus, the acquisition of InvestArk
expands First United's market into new areas.

Management of First United believes that by expanding its markets, it will
increase the range and competitiveness of its banking services to persons
residing in the Melbourne and Stuttgart areas while increasing the earning power
of First United.

FAIRNESS OF THE TRANSACTION

THE BOARD OF DIRECTORS OF FIRST UNITED AND INVESTARK BELIEVE THAT THE
PROPOSED ACQUISITION TERMS ARE FAIR TO THE STOCKHOLDERS OF BOTH FIRST UNITED AND
INVESTARK AND RECOMMEND A VOTE IN FAVOR OF THE ADOPTION OF THE AGREEMENT.

THE AGREEMENT

The following description of certain features of the Agreement is qualified
in its entirety by the full text of the Agreement, which is incorporated herein
by reference and attached hereto by Annex.

Under the terms of the Agreement, InvestArk will be merged with and into
First United in exchange for the issuance by the Company of a maximum of 985,849
newly issued shares of First United Common Stock to the holders of the common
stock of InvestArk.

The Agreement provides that the stockholders of InvestArk will receive
total consideration of $26,125,000 consisting of fully paid and nonassessable
shares of Common Stock, $1.00 par value of First United, if the average price of
First United Common Stock is between $26.50 and $29.50. If the average price is
in this range the number of shares of First United common stock to be exchanged
for all of the issued and outstanding shares of InvestArk Common Stock will be
determined by dividing $26,125,000 by the average price of First United Common
Stock. The average price of First United Common Stock is defined as the average
sales price per share for all trades occurring during the period of ten (10)
trading days on which one or more trades actually takes place and which ends
immediately prior to the second trading day preceding the closing date.
Notwithstanding the foregoing, the number of shares of First United Common Stock
to be exchanged shall not be less than 885,593 and shall not be greater than
985,849 which equate to an average price of First United Common Stock of $29.50
and $26.50, respectively.

16
<PAGE> 24

$29.50, the amount of shares issued shall equal the floor of 885,593 shares. The
total consideration exchanged will vary from $26,125,000 if the average price is
either higher than $29.50 or lower than $26.50. For example, if the average
price is $35.00, the InvestArk stockholders shall receive 885,593 shares of
First United common stock, each share having a value of $35.00 representing
total consideration of $30,995,755. If the average price is $22.00, the
InvestArk stockholders shall receive 985,849 shares of First United common
stock, each share having a value of $22.00 representing total consideration of
$21,688,678. See "The Merger -- Exchange Ratio for the Merger".

Fractional shares of First United Common Stock shall not be issued and any
InvestArk stockholder entitled to receive a fractional share shall receive a
cash payment equal to the value of the fractional share based on the average
price of First United Common Stock.

The Agreement can be terminated by InvestArk if the First United Common
Stock average price is less than $22.00 and the scheduled closing date is more
than 120 days after the date of the Agreement. First United may terminate the
Agreement if the First United Common Stock average price is $35.00 or more and
the scheduled closing date is more than 120 days after the date of the
Agreement. However, First United may not terminate the Agreement based upon the
aforementioned ground if: (i) First United has agreed or announced its intention
to be acquired by a third party or merge into a third party that is the
surviving corporation, or (ii) First United has received an unsolicited offer of
proposal to engage in such a transaction. In addition, either party may
terminate the Agreement, if the Merger is not closed on or before May 31, 1994
provided that the failure to close is not caused by a breach of the Agreement by
the party seeking to terminate it.

First United and InvestArk have agreed, for the period prior to the
consummation of the merger, to operate their respective businesses only in the
usual, regular and ordinary course. In addition, First United and InvestArk will
use reasonable efforts to maintain and keep their respective properties in as
good repair and condition as at present, except for ordinary wear and tear and
to perform all obligations required under all material contracts, leases, and
documents relating to or affecting their respective assets prior to the
consummation of the Merger. First United and InvestArk have further agreed that,
prior to consummation of the Merger, they will not incur any material
liabilities or obligations, except in the ordinary course of business, or take
any action which would or is reasonably likely to adversely affect the ability
of either First United or InvestArk to obtain any necessary approvals, adversely
affect the ability of First United or InvestArk to perform their covenants and
agreements under the Agreement, or result in any of the conditions to the Merger
not being satisfied. InvestArk has further agreed that, unless otherwise
required by applicable law, it shall not initiate, solicit or encourage any
inquiry or proposal which constitutes a competing transaction.

The Agreement requires that certain conditions occur or be waived prior to
the closing date ("conditions precedent"), including (a) approval by InvestArk
stockholders by two-thirds of all outstanding shares; (b) approval by First
United stockholders by two-thirds of all outstanding shares; (c) approval by the
appropriate bank regulatory authorities; (d) receipt by the Company of an
opinion from Arthur Andersen & Co. that the Merger will qualify for pooling of
interests treatment under the applicable accounting principles; and (e)
satisfaction of other normal conditions to closing a merger transaction. It is
also a condition to the Merger that First United have an effective registration
statement on file with the Securities and Exchange Commission covering the
issuance of shares to be exchanged pursuant to the Merger. Prior to the
effective date of the Merger, any condition of the Agreement except, those
required by law may be waived by the party benefited by the condition.

The effective date of the Merger will be the date the Articles of Merger
are filed with the Arkansas Secretary of State, or the date so stated in the
Articles of Merger. The Agreement provides that a closing date will be set by
mutual agreement to occur within a reasonable time following the date on which
the last of all regulatory and other approvals necessary to consummate the
Merger have been received and all necessary time periods imposed by regulatory
authorities have elapsed. The parties may, however, amend the Agreement to
provide a later closing date.

17
<PAGE> 25

REGULATORY APPROVALS

The Merger is subject to prior approval by the appropriate banking
regulatory authorities. An application has been filed for approval of the Merger
with the Board of Governors of the Federal Reserve ("Board") for First United to
acquire InvestArk. In conjunction with the Board application, the Merger is also
subject to review by the Department of Justice as to its competitive effects. An
application has also been filed with the Arkansas Bank Department ("Department")
for approval of the Merger. The application made to the Board was approved on
March 15, 1994. The application made to the department was approved on February
24, 1994.

ANTITRUST MATTERS

The Department of Justice has thirty (30) calendar days after approval by
the Board in which to challenge the proposed Merger on anti-trust
considerations. The approval letter from the Board provided that the Merger may
not be consummated until thirty (30) calendar days after the effective date of
such letter. The thirty calendar days has expired from the effective date of the
Board's approval. The letter also provided that the transaction must be
consummated no later than three (3) months from that effective date unless the
period is extended for good cause by the Board upon request by First United.

CERTAIN FEDERAL INCOME TAX CONSEQUENCES

General. For federal income tax purposes the law provides that participants
(a "Party" or "Parties") in a transaction, including the transaction
contemplated by the Merger, which meets certain specific statutory and case law
requirements (a "reorganization") are entitled to special tax treatment which
effectively defers the instance of taxation on any gain inherent in a
reorganization. This result is achieved by treating the Parties as if they had
continued substantially unaffected by the reorganization. Under Section 361, no
gain or loss is recognized by a Party as a result of a reorganization (Section
references under this caption are to the Internal Revenue Code of 1986, as
amended (the "Code"). Section 362(b) provides that the tax basis of property
received by a Party in a reorganization is the same as it would be in the hands
of the transferor, increased by any gain recognized by the transferor on such
transfer. The tax basis of the underlying assets of the Parties is not changed.

For the stockholders of corporations which are Parties to a reorganization,
Section 354 provides that no gain or loss shall be recognized to such
stockholders on the exchange of their stock of one Party for the stock of
another Party. Section 358 provides that the basis of the stock received by such
a stockholder shall be the same as the basis of the stock surrendered in the
exchange. Under Section 1223, the holding period of the stock received by a
stockholder of one of the Parties will include the period for which the stock
exchanged by such stockholder was held.

As a result of case law interpreting the special tax treatment available
for reorganizations, there is also (i) a continuity-of-interest concept which
requires that, in the aggregate, stockholders of each of the corporate parties
to a reorganization maintain a minimum level of equity ownership in the
surviving corporate party, (ii) a continuity of business enterprise requirement;
and (iii) a valid business purpose requirement.

Tax Consequences. It is expected that at or prior to the closing date of
the Merger, InvestArk will receive closing tax opinion of tax counsel to
InvestArk that for federal income tax purposes, under current law, assuming that
the Merger and related transactions will take place as described in the Merger
Agreement and that the case law requirements described above, relating to
continuity of stockholder interest, continuity of business enterprise and valid
business purpose, are satisfied, the Merger will constitute a reorganization
within the meaning of Section 368(a)(1)(A) of the Code, and First United and
InvestArk each will be a Party to the reorganization within the meaning of
Section 368(b) of the Code.

If the Merger constitutes such a reorganization, the following will be all
of the material federal income tax consequences of the Merger to InvestArk and
its stockholders in the opinion of Shults, Ray & Kurrus: (i) no gain or loss
will be recognized by the InvestArk stockholders upon the receipt of First
United Common Stock in exchange for InvestArk common stock in connection with
the Merger; (ii) the tax basis of the First

18
<PAGE> 26

United Common Stock to be received by the InvestArk stockholders in connection
with the Merger will be the same as the basis in the InvestArk Common Stock
surrendered in exchange therefor; (iii) the holding period of the First United
Common Stock to be received by the InvestArk stockholders in connection with the
Merger will include the holding period of the InvestArk common stock surrendered
in exchange therefor, provided that InvestArk common stock is held as a capital
asset at the effective time of the Merger; and (iv) the payment of cash to
stockholders of InvestArk in lieu of the issuing fractional shares of First
United Common Stock will be treated as if the fractional shares were distributed
as part of the exchange and then redeemed by First United for cash and the
payments received will be treated as distributions in redemption of the
fractional shares, subject to the provisions of Section 302 of the Code.

Cash Received by Holders of InvestArk or First United Common Stock Who
Dissent. A stockholder of InvestArk or First United who perfects his dissenter's
rights under the laws of Arkansas and who receives payment of the fair value of
his shares of InvestArk common stock will be treated as having received such
payment in redemption of such stock. Such redemption will be subject to the
conditions and limitations of Section 302 of the Code, including the attribution
rules of Section 318. In general, if the dissenting shares of common stock are
held by the holder as a capital asset at the effective time of the Merger, such
holder will recognize capital gain or loss measured by the difference between
the amount of cash received by such holder and the basis for such shares. Each
holder of common stock who contemplates exercising his dissenter's rights should
consult his own tax adviser as to the possibility that any payment to him will
be treated as dividend income.

THE DISCUSSION SET FORTH ABOVE DOES NOT ADDRESS THE STATE, LOCAL OR FOREIGN
TAX ASPECTS OF THE MERGER. THE DISCUSSION IS BASED ON CURRENTLY EXISTING
PROVISIONS OF THE CODE, EXISTING AND PROPOSED TREASURY REGULATIONS THEREUNDER
AND CURRENT ADMINISTRATIVE RULINGS AND COURT DECISIONS. ALL OF THE FOREGOING ARE
SUBJECT TO CHANGE AND ANY SUCH CHANGE COULD AFFECT THE CONTINUING VALIDITY OF
THIS DISCUSSION. EACH INVESTARK AND FIRST UNITED STOCKHOLDER SHOULD CONSULT HIS
OR HER OWN TAX ADVISOR WITH RESPECT TO THE SPECIFIC TAX CONSEQUENCES OF THE
MERGER TO HIM OR HER, INCLUDING THE APPLICATION AND EFFECT OF STATE, LOCAL AND
FOREIGN TAX LAWS.

ACCOUNTING TREATMENT

First United intends to treat the merger as a pooling of interests for
accounting purposes. Consequently, in accordance with generally accepted
accounting principles, First United anticipates that it will restate its
consolidated financial statements to include the assets, liabilities,
stockholders' equity and results of operations of InvestArk as reflected in its
consolidated financial statements, subject to appropriate adjustments, if any,
to conform accounting principles of the two companies.

RIGHT OF DISSENT UNDER THE 1965 ACT

HOLDERS OF INVESTARK COMMON STOCK WILL BE ENTITLED TO EXERCISE DISSENTER'S
RIGHTS EITHER UNDER THE 1965 ACT OR THE 1987 ACT. IF APPROVED, THE ELECTION TO
BE GOVERNED BY THE 1987 ACT BY THE STOCKHOLDERS OF INVESTARK, AS DISCUSSED
BELOW, WILL BE MADE PRIOR TO CONSUMMATION OF THE MERGER BUT SUBSEQUENT TO A VOTE
ON SUCH MERGER. THEREFORE, FIRST UNITED WILL RECOGNIZE COMPLIANCE WITH EITHER
THE 1965 ACT OR THE 1987 ACT AS A VALID EXERCISE OF DISSENTER'S RIGHTS WITH
RESPECT TO SUCH MERGER. FOR A DISCUSSION OF THE PROCEDURE TO BE FOLLOWED UNDER
THE 1987 ACT, SEE "THE MERGER -- RIGHT OF DISSENT UNDER THE 1987 ACT."

Under Arkansas law, holders of InvestArk common stock are entitled to
dissenters' rights pursuant to Ark. Code Ann. sec. 4-26-1007 of the 1965 Act.
However, if a holder of shares of InvestArk common stock chooses to follow the
procedure under the 1965 Act, he shall only be entitled to such rights if he
complies with that statute. The following summary does not purport to be a
complete statement of the method of compliance

19
<PAGE> 27

with Section 4-26-1007 and is qualified by reference to those statutory sections
which are attached, hereto by Annex.

A holder of InvestArk stock who wishes to perfect his dissenter's rights in
the event that the Merger is adopted must:

(a) File with the corporation, prior to or at the meeting of
stockholders at which the vote on the Agreement is to be made, written
objection to the Agreement; and

(b) Not have voted in favor of the Agreement.

Any written notice of objection to the Agreement pursuant to clause (a) of
the immediately proceeding paragraph should be mailed or delivered to InvestArk
Bankshares, Inc., 412 South Main Street, Stuttgart, Arkansas 72021, Attention:
Harry C. Erwin, Chief Executive Officer. Because the written objection must be
delivered prior to or at the stockholder vote on the Agreement, it is
recommended, although not required, that a stockholder using the mail should use
certified or registered mail, return receipt requested, to confirm that he has
made timely delivery.

Within ten (10) days after the consummation of the Merger, any stockholder
objecting to the Merger must make a written demand on First United for payment
of the fair value of his shares as of the day before the vote on the Agreement
was taken. This second notice should be mailed to First United Bancshares, Inc.,
Main and Washington Streets, El Dorado, Arkansas, 71730, Attention: John E.
Burns, Vice President and Chief Financial Officer. The demand must state the
number and class of shares owned. If a demand is not made within the 10-day
period, the stockholder is bound by the Agreement.

Within ten (10) days after the Merger is effected, First United shall give
notice to each dissenting stockholder who made demand as provided above for the
payment of the value of his shares. If the dissenting stockholder and First
United agree upon the value of the shares within thirty (30) days after the date
of the Merger, then payment shall be made within ninety (90) days of the Merger.
Simultaneously with the payment, the dissenting stockholder shall surrender the
certificates representing his shares.

If within the thirty-day period no agreement is reached as to the value of
the dissenting stockholder's shares, the dissenting stockholder must file a
petition in Pulaski County Circuit Court within 60 days after the expiration of
the 30-day period asking for a determination of the fair value of his shares.
The judgment will be final and is payable only upon and simultaneously with the
surrender of the certificates representing the shares to First United. If a
dissenting stockholder fails to file a petition within the 60-day period, he and
all persons claiming under him shall be bound by the terms of the Agreement.

RIGHT OF DISSENT UNDER THE 1987 ACT

HOLDERS OF FIRST UNITED COMMON STOCK OR INVESTARK COMMON STOCK SHALL BE
ENTITLED TO DISSENTER'S RIGHTS PURSUANT TO ARK. CODE ANN. SEC. 4-27-1301 ET.
SEQ. OF THE 1987 ACT WITH RESPECT TO THE MERGER. HOWEVER, A HOLDER OF FIRST
UNITED COMMON STOCK SHALL ONLY BE ENTITLED TO EXERCISE DISSENTER'S RIGHTS UNDER
THE 1987 ACT, WHEREAS A HOLDER OF INVESTARK COMMON STOCK MAY ALSO EXERCISE SUCH
RIGHTS UNDER THE 1965 ACT, SEE "THE MERGER -- RIGHT OF DISSENT UNDER THE 1965
ACT."

The following summary does not purport to be a complete statement of the
method of compliance with the 1987 Act and is qualified by reference to those
statutory sections which are attached hereto by Annex.

A holder of either InvestArk or First United Common Stock who wishes to
perfect his dissenter's rights in the event that the Merger is adopted must:

(a) File with the corporation, prior to or at the meeting of
stockholders at which the vote on the Agreement is to be made, written
objection to the Agreement; and

(b) Not have voted in favor of the Agreement.

20
<PAGE> 28

Any written notice of objection to the Agreement pursuant to clause (a) of
the immediately preceding paragraph should be mailed or delivered to InvestArk
Bankshares, Inc., 412 South Main Street, Stuttgart, Arkansas 72021, Attention:
Mr. Harry C. Erwin, Chief Executive Officer (if you are a stockholder of First
United, to First United Bancshares, Inc., Main and Washington Streets, El
Dorado, Arkansas 71730, Attention: John E. Burns, Vice President and Chief
Financial Officer). Because the written objection must be delivered prior to or
at the stockholder vote on the Merger, it is recommended, although not required,
that a stockholder using the mail should use certified or registered mail,
return receipt requested, to confirm that he has made timely delivery.

If the Merger is adopted at the stockholders meeting, the corporation must
send to the dissenting stockholder, no later than ten (10) days after the
corporate action was taken, a dissenter's notice which will inform the
stockholder where a demand for payment must be sent, where the stockholder's
share certificates must be deposited and provide a form for demanding payment.
The dissenter's notice will also notify the stockholder of a time period within
not fewer than thirty (30) nor more than sixty (60) days which the stockholder
must deliver the payment demand form and stock certificates to the corporation.

As soon as the Merger is consummated, or upon receipt of a payment demand
by the dissenting stockholder, First United must pay the dissenting stockholder
the amount First United estimates to be the fair value of the shares, plus
accrued interest and deliver to the dissenting stockholder the corporation's
balance sheet as of the most recent fiscal year, an income statement for that
year, a statement of changes in stockholder equity for that year, and the latest
available interim financial statement. At this time, First United shall also
deliver to the dissenting stockholder a statement of the corporation's estimate
of fair value of the shares, an explanation of how interest was calculated, a
statement of the dissenter's right to demand a higher value for his shares and a
copy of the appropriate statutory provisions governing the dissenters rights
procedure.

Within thirty (30) days after the dissenting stockholder has received
payment in the amount the corporation estimates to be the fair value of the
shares, the dissenting stockholder must notify the corporation, in writing, of
his own estimate of fair value. If the dissenting stockholder does not notify
the corporation within this thirty (30) day period, he waives his right to
demand a higher payment.

If the demand for payment, as referenced in the immediately preceding
paragraph remains unsettled for sixty (60) days from the date the corporation
receives the dissenting stockholders demand for payment, the corporation must
commence a proceeding and file a petition in Pulaski County Circuit Court to
determine the fair value of the shares and the amount of accrued interest to be
paid.

EXCHANGE RATIO FOR THE MERGER

If the average sales price is between $26.50 and $29.50 the number of
shares of First United Common Stock to be issued pursuant to the Merger is
calculated by dividing $26,125,000 by the average sales price of First United
Common Stock for all trades occurring during the period of ten (10) days on
which one or more trades actually takes place and which ends immediately prior
to the second trading day preceding the closing date. If the average sales price
is less than $26.50 the total number of shares exchanged will be the ceiling of
985,849. If the average sales price is more than $29.50 the total number of
shares exchanged will be the floor of 885,593. The exchange ratio for the Merger
is calculated by taking the number of shares of First United Common Stock to be
issued and dividing this number by the total number of issued and outstanding
shares of InvestArk common stock, which is 215,960. The following table
illustrates a range of average sales prices for First United Common Stock and
based upon these average sales prices, calculates the number of shares of First
United Common Stock to be issued and the resulting exchange ratio. Furthermore,
the table illustrates the total consideration to be exchanged which shall vary
depending upon the average sales price of First United Common Stock. This table
is for illustration purposes only and should not be relied upon as the actual

21
<PAGE> 29

amount of shares to be issued, the actual average sales price, the actual
exchange ratio, or the actual amount of consideration to be exchanged.

CALCULATION OF EXCHANGE RATIO

<TABLE>
<CAPTION>
FIRST UNITED FIRST UNITED TOTAL
AVERAGE COMMON STOCK EXCHANGE CONSIDERATION
SALES PRICE ISSUED RATIO(2) EXCHANGED
- ------------ ------------ -------- -------------
<S> <C> <C> <C>
22.00 985,849 4.5650 21,688,678
26.50 985,849 4.5650 26,125,000
28.00 933,035 4.3204 26,125,000
29.50 885,593 4.1007 26,125,000
35.00 885,593 4.1007 30,995,755
</TABLE>

- ---------------

(2) The Exchange Ratio represents the number of shares of First United Common
Stock that a stockholder of InvestArk would receive for one share of
InvestArk common stock. However, as discussed above, fractional shares will
not be issued.

EXPENSES OF THE MERGER

First United and InvestArk will bear their own expenses incident to
preparing for entering into and carrying out the Merger Agreement and the
consummation of the Merger, except that First United will pay all expenses
incident to the preparation of this Proxy Statement and its printing and
distribution and for the filing of necessary applications for approval of the
Merger with the Board and Department.

FINANCIAL INFORMATION

The following unaudited Pro Forma Combining Balance Sheet as of December
31, 1993, and Unaudited Pro Forma Combining Income Statements for the years
ended December 31, 1993, 1992, and 1991 illustrate the effect of the proposed
Merger as if the Merger had occurred at the beginning of the earliest period
presented.

These Pro Forma Combining Financial Statements should be read in
conjunction with the historical financial statements of First United which are
incorporated by reference herein and InvestArk which are included herein.

The Pro Forma Combining Financial Statements are presented for comparative
purposes only and are not intended to be indicative of actual results had the
transactions occurred as of the dates indicated above nor do they purport to
indicate which may be attained in the future.

22
<PAGE> 30

PRO FORMA COMBINING BALANCE SHEETS(1)

<TABLE>
<CAPTION>
DECEMBER 31, 1993
-----------------------------------------------------------
PRO FORMA PRO FORMA
FIRST UNITED INVESTARK ADJUSTMENTS COMBINED
------------ --------- ----------- ----------
(IN THOUSANDS)
<S> <C> <C> <C> <C>
ASSETS
Cash and due from banks.................... $ 45,013 $ 7,214 $ $ 52,227
Short-term investments..................... 32,671 1,180 33,851
Securities held for sale................... 83,468 0 83,468
Investment securities...................... 342,067 87,864 429,931
Net loans.................................. 406,331 83,002 489,333
Premises and equipment..................... 11,182 2,722 13,904
Goodwill................................... 4,308 0 4,308
Other real estate owned.................... 897 143 1,040
Other assets............................... 12,757 2,779 15,536
------------ --------- ----------- ----------
Total Assets..................... $938,694 $ 184,904 $ 0 $1,123,598
------------ --------- ----------- ----------
------------ --------- ----------- ----------
LIABILITIES AND CAPITAL ACCOUNTS
Deposits................................... $806,449 $ 163,300 $ $ 969,749
Federal funds purchased and securities sold
under agreements to repurchase........... 27,109 3,403 30,512
Other liabilities.......................... 6,665 827 7,492
Long-term debt............................. 7,214 509 7,723
------------ --------- ----------- ----------
Total Liabilities................ 847,437 168,039 1,015,476
------------ --------- ----------- ----------
Preferred stock............................ 0 0 0
Common stock............................... 4,272 2,191 (2,191)(2) 5,173
901 (2)
Surplus.................................... 11,126 1,105 (1,105)(2) 13,391
2,265 (2)
Undivided Profits.......................... 75,859 13,720 89,579
Less: Treasury Stock....................... 0 (130) 130 (2) 0
Net unrealized loss on marketable
equity securities.................. -- (21) -- (21)
------------ --------- ----------- ----------
Total Capital Accounts........... 91,257 16,865 0 108,122
------------ --------- ----------- ----------
Total Liabilities and Capital
Accounts....................... $938,694 $ 184,904 $ 0 $1,123,598
------------ --------- ----------- ----------
------------ --------- ----------- ----------
</TABLE>

23
<PAGE> 31

PRO FORMA COMBINING INCOME STATEMENT(1)

<TABLE>
<CAPTION>
FOR THE YEAR ENDED DECEMBER 31, 1993

------------------------------------
FIRST PRO FORMA
UNITED INVESTARK COMBINED
--------- ------- ---------
(IN THOUSANDS, EXCEPT FOR SHARE DATA)
<S> <C> <C> <C>
Interest income............................................ $59,413 $12,555 $71,968
Interest expense........................................... 23,860 5,045 28,905
--------- ------- ---------
Net interest income........................................ 35,553 7,510 43,063
Provision for loan losses.................................. (1,215) (600) (1,815)
--------- ------- ---------
Net interest income after provision for loan losses........ 34,338 6,910 41,248
Other income
Service charges on deposit accounts...................... 2,932 348 3,280
Trust department income.................................. 1,000 515 1,515
Security gains........................................... 55 -- 55
Other service charges and fees........................... -- 90 90
Other operating income................................... 1,168 556 1,724
--------- ------- ---------
Total other income............................... 5,155 1,509 6,664
Other expense
Salaries................................................. 8,167 2,189 10,356
Pension and other employee benefits...................... 2,454 758 3,212
Net occupancy expense.................................... 1,788 427 2,215
Equipment expense........................................ 814 454 1,268
Data processing expense.................................. 1,573 171 1,744
Other operating expense.................................. 7,289 2,994 10,283
--------- ------- ---------
Total other expense.............................. 22,085 6,993 29,078
--------- ------- ---------
Income before income taxes................................. 17,408 1,426 18,834
Income tax expense......................................... 5,471 148 5,619
--------- ------- ---------
Income from continuing operations.......................... $11,937 $ 1,278 $13,215
--------- ------- ---------
--------- ------- ---------
Earnings per share(3)...................................... $ 2.79 $ 5.93 $ 2.55
Weighted average shares outstanding........................ 4,272,276 215,450 5,173,138
</TABLE>

24
<PAGE> 32

PRO FORMA COMBINING INCOME STATEMENT(1)

<TABLE>
<CAPTION>
FOR THE YEAR ENDED DECEMBER 31, 1992
------------------------------------
FIRST PRO FORMA
UNITED INVESTARK COMBINED
--------- --------- ---------
(IN THOUSANDS, EXCEPT FOR SHARE DATA)
<S> <C> <C> <C>
Interest income............................................ $63,381 $14,188 $77,569
Interest expense........................................... 28,690 6,369 35,059
--------- ------- ---------
Net interest income........................................ 34,691 7,819 42,510
Provision for loan losses.................................. (2,422) (64) (2,486)
--------- ------- ---------
Net interest income after provision for loan losses........ 32,269 7,755 40,024
--------- ------- ---------
Other income
Service charges on deposit accounts...................... 2,831 380 3,211
Trust department income.................................. 919 488 1,407
Security gains............................................. 386 0 386
Other service charges and fees........................... 0 68 68
Other operating income................................... 1,379 568 1,947
--------- ------- ---------
Total other income............................... 5,515 1,504 7,019
--------- ------- ---------
Other expense
Salaries................................................. 7,770 2,088 9,858
Pension and other employee benefits...................... 2,611 454 3,065
Net occupancy expense.................................... 1,881 422 2,303
Equipment expense........................................ 605 433 1,038
Data processing expense.................................. 1,860 166 2,026
Other operating expense.................................. 7,966 2,962 10,928
--------- ------- ---------
Total other expense.............................. 22,693 6,525 29,210
--------- ------- ---------
Income before income taxes................................. 15,091 2,734 17,825
Income tax expense......................................... 4,648 501 5,149
--------- ------- ---------
Income from continuing operations.......................... $10,443 $ 2,233 $12,676
--------- ------- ---------
--------- ------- ---------
Earnings per share(3)...................................... $ 2.44 $ 10.33 $ 2.45
Weighted average shares outstanding........................ 4,272,276 216,235 5,173,138
</TABLE>

25
<PAGE> 33

PRO FORMA COMBINING INCOME STATEMENT(1)

<TABLE>
<CAPTION>
FOR THE YEAR ENDED DECEMBER 31,
1991
-----------------------------------
FIRST PRO FORMA
UNITED INVESTARK COMBINED
--------- ------- ---------
(IN THOUSANDS, EXCEPT FOR SHARE
DATA)
<S> <C> <C> <C>
Interest income............................................ $ 68,976 $15,960 $ 84,936
Interest expense........................................... 39,043 9,182 48,225
--------- ------- ---------
Net interest income........................................ 29,933 6,778 36,711
Provision for loan losses.................................. (3,250) (1,464) (4,714)
--------- ------- ---------
Net interest income after provision for loan losses........ 26,683 5,314 31,997
Other income
Service charges on deposit accounts...................... 2,669 397 3,066
Trust department income.................................. 886 470 1,356
Security gains........................................... 254 0 254
Other service charges and fees........................... 0 82 82
Other operating income................................... 1,137 666 1,803
--------- ------- ---------
Total other income............................... 4,946 1,615 6,561
--------- ------- ---------
Other expense
Salaries................................................. 7,566 2,040 9,606
Pension and other employee benefits...................... 2,279 412 2,691
Net occupancy expense.................................... 1,773 461 2,234
Equipment expense........................................ 623 370 993
Data processing expense.................................. 1,570 163 1,733
Other operating expense.................................. 7,285 2,448 9,733
--------- ------- ---------
Total other expense.............................. 21,096 5,894 26,990
--------- ------- ---------
Income before income taxes................................. 10,533 1,035 11,568
Income tax expense....................................... 2,986 128 3,114
--------- ------- ---------
Income from continuing operations.......................... $ 7,547 $ 907 $ 8,454
--------- ------- ---------
--------- ------- ---------
Earnings per share(3)...................................... $ 1.77 $ 4.19 $ 1.63
Weighted average shares outstanding........................ 4,272,276 216,212 5,173,138
</TABLE>

26
<PAGE> 34

NOTES TO PRO FORMA COMBINING FINANCIAL STATEMENTS

(1) The adjustments to the Pro Forma Combining Financial Statements do not
include direct expenses related to the Merger, which will be recorded
at the time of the Merger. The pro forma data are not necessarily
indicative of the operating results or financial position that would
have occurred had the Merger been consummated at the dates indicated,
nor necessarily indicative of future operating results of financial
position.

(2) These adjustments reflect the issuance of approximately 900,862 shares
of First United Common Stock in exchange for all InvestArk common
stock and the retirement of InvestArk common stock held in treasury.
The actual number of shares of First United Common Stock to be issued
pursuant to the Merger will fluctuate based upon the average price of
First United Common Stock assumed to be at 29.00 for these Pro Forma
Combining Financial Statements.

(3) Pro forma per share data are based on the number of shares of First
United Common Stock that would have been outstanding had the Merger
occurred at the beginning of the earliest period presented. The
following table illustrates pro forma earnings per share based upon
the allowable minimum and maximum average price of First United Common
Stock of $26.50 and $29.50, respectively, pursuant to the Agreement.

<TABLE>
<CAPTION>
$26.50 $29.50
------ ------
<S> <C> <C>
Year ended December 31, 1991.................................. $ 1.61 $ 1.64
Year ended December 31, 1992.................................. 2.41 2.46
Year ended December 31, 1993.................................. 2.51 2.56
</TABLE>

ELECTION BY INVESTARK STOCKHOLDERS UNDER THE 1987 ACT

ELECTION INCIDENTAL TO THE MERGER

THE ELECTION BY THE STOCKHOLDERS OF INVESTARK TO BE GOVERNED BY THE
ARKANSAS BUSINESS CORPORATION ACT OF 1987 IS INCIDENTAL TO THE MERGER PROPOSAL
AND APPROVAL OF SUCH ELECTION WILL HAVE NO FORCE OR EFFECT UNLESS THE MERGER IS
LIKEWISE APPROVED.

REASON FOR THE ELECTION

InvestArk is a corporation that was organized under the Arkansas Business
Corporation Act of 1965, codified at Ark. Code Ann. sec.4-26-101 et.seq. The
1987 Act is applicable to those corporations that were incorporated on or after
January 1, 1988 or those "1965 Act" corporations that elect to be governed by
the 1987 Act by amending their Articles of Incorporation to so state. The
stockholders of First United elected to be governed by the 1987 Act by amending
its Articles of Incorporation.

The 1965 Act and 1987 Act have statutory merger procedures that must be
complied with in order to legally consummate a merger. Although both acts
contain similar provisions, it is advisable for InvestArk to elect to be
governed by the 1987 Act in order to facilitate compliance with the applicable
statutory requirements.

RESULT OF THE ELECTION

The affirmative vote of two-thirds of all outstanding shares of InvestArk
common stock will authorize InvestArk to amend its Articles of Incorporation and
thereby elect to be governed by the 1987 Act. First United is governed by the
1987 Act and shares of First United Common Stock received by InvestArk
stockholders upon consummation of the Merger will entitle such stockholders
rights under the 1987 Act. The following discussion is an analysis of the
material differences between the 1965 and 1987 Act with respect to Stockholders'
rights.

Powers of Directors in Setting Preferences, Rights and Limitation of
Classes and Series of Stocks. The 1965 Act states that the preferences, rights
and limitations of classes of stock must be specified in the Articles,

27
<PAGE> 35

and that the power to establish certain limited rights and preferences for
series may be delegated to the Board. The 1987 Act, however, allows inclusion of
a provision in the Articles which gives the Board the power to set the
preferences, rights and limitations of any class or series of stock before any
shares of the class or series are issued. This power is exercised by filing with
the Secretary of State Articles of Amendment, adopted without stockholder
action.

Preemptive Rights. The 1987 Act denies stockholders preemptive rights
(i.e., the right of existing stockholders to acquire newly-issued shares of
stock on a pro rata basis of current ownership interest) unless the Articles
specifically authorize preemptive rights. In contrast, the 1965 Act grants
certain preemptive rights unless denied by the Articles.

Restrictions On Distributions. The 1987 Act allows a corporation to elect
in its Articles to restrict its ability to make distributions. The 1965 Act has
no such provision.

Quorum. The 1987 Act, like the 1965 Act, provides that a quorum, for
purposes of a stockholders meeting, will be a majority of the shares entitled to
vote unless the Articles provide otherwise. The 1987 Act does not provide a
minimum size for the quorum. The 1965 Act provides that a quorum may not be less
that one-third of the shares entitled to vote.

Cumulative Voting. Cumulative voting is a method of voting for directors
where each share entitled to vote is given as many votes as there are board
positions being voted on; the votes may be "cumulated," or cast for a single
position, rather than spread among the available positions. The 1987 Act does
not allow stockholders to cumulate their votes for election of directors unless
the Articles of Incorporation so provide. This is contrary to the 1965 Act,
which grants stockholders absolute cumulative voting rights.

Removal of Directors. The 1987 Act allows the Articles to provide that
directors may be removed only for cause. The 1965 Act does not allow such a
limitation and provides that directors may be removed with or without cause by a
majority of the shares entitled to vote.

Vacancy on Board of Directors. The 1987 Act provides that unless the
Articles provide otherwise, any vacancy on the board may be filled by either the
stockholders or the remaining directors. This is a change from the 1965 Act,
under which the remaining directors fill vacancies unless the Articles provide
otherwise.

Amendment of By-Laws. The 1987 Act provides that the Articles may reserve
to the stockholders the power to amend a corporation's by-laws. If the power is
not so reserved, the board may amend the by-laws, but stockholders may not be
excluded from the power to amend the by-laws. The 1965 Act provides that the
board of directors alone have the power to amend the by-laws, unless the
Articles reserve that power solely to the stockholders.

By-Law Increasing Quorum or Voting Requirements for Stockholders. The 1987
Act allows the stockholders to adopt a by-law that fixes a greater stockholder
quorum or voting requirement than the statutory requirement if such by-law is
authorized by the Articles of Incorporation. The 1965 Act has no such provision.

Voting to Adopt Merger. The 1987 Act allows the Articles to set a voting
requirement for mergers which is greater than the statutory requirement of a
majority of votes to be cast. The 1965 Act includes a statutory requirement of
two-thirds of the votes entitled to be cast to approve a merger.

Sales of Assets in Regular Course of Business and Mortgage of Assets.
Unless otherwise provided in the Articles, the 1987 Act allows the board to act
without stockholder approval in the sale or other disposition of all, or
substantially all, of the property of the corporation in the usual course of
business and to mortgage all or any of the corporation's property, whether or
not in the usual course of business. However, the 1965 Act contains the same
provision.

Notice of Stockholder Meetings. The 1987 Act requires notice of the date,
time, and place of each annual or special meeting of the stockholders. If the
meeting is to consider a proposal to increase the authorized capital stock or in
bonded indebtedness of the corporation, the notice must be given no fewer than
75 days before the meeting period. The 1965 Act has the same provision. Under
the 1987 Act, in all other cases the

28
<PAGE> 36

notice must be given no fewer than 10 and no more than 60 days before the
meeting date. Under the 1965 Act notice cannot be given fewer than 10 and more
than 50 days prior to the meeting.

Proxies. Like the 1965 Act, the 1987 Act allows a stockholder to vote by
proxy. The procedural provisions for the exercise of proxies under the 1987 Act
are the same as under the 1965 Act.

Voting. The 1987 Act, unlike the 1965 Act, does not count abstaining votes
in determining whether there are sufficient affirmative votes to approve a
measure. The 1965 Act states that (unless a greater number is required by
statute or by the Articles) approval by stockholders takes the affirmative vote
of a majority of the shares represented at the meeting and entitled to vote on
the subject matter. The 1987 Act, however, provides that the action is approved
if the votes cast within the voting group favoring the action exceed the votes
cast opposing the action.

Dissenting Stockholders. Those transactions giving rise to dissenters'
rights under the 1965 Act are as follows:

1. Consummation of a sale of all or substantially all of the assets of
a corporation otherwise than in the usual or ordinary course of its
business.

2. Consummation of a merger or consolidation to which the corporation
is a party unless on the date the Articles of Merger are filed the
surviving corporation wholly owns the other corporations that are parties
to the Merger.

Under the 1987 Act, a stockholder is entitled to dissent from the following
corporate actions:

1. Consummation of a plan of merger to which the corporation is a
party if stockholder approval is required or if the corporation is a
subsidiary that is merged with its parent;

2. Consummation of a plan of share exchange to which the corporation
is a party and which requires stockholder approval;

3. Consummation of a sale or exchange of all, or substantially all, of
the property of the corporation other than in the usual and regular course
of business if stockholder approval is required;

4. An amendment of the Articles of Incorporation that materially and
adversely affects the rights of dissenters' shares; or

5. Any other corporate action taken pursuant to a stockholder vote to
the extend the Articles of Incorporation, the By-Laws, or a resolution of
the board of directors provides that stockholders are entitled to dissent.

For a summary of the procedure that would be followed in order to exercise
dissenters' rights under the 1965 Act, See "The Merger -- Right of Dissent under
the 1965 Act." For a summary of the procedure that would be followed in order to
exercise dissenters' rights under the 1987 Act, See "The Merger -- Right of
Dissent under the 1987 Act."

29
<PAGE> 37

FIRST UNITED BANCSHARES, INC.
GENERAL

First United is a multi-bank holding company incorporated in 1980 for the
purpose of holding all of the outstanding stock of The First National Bank of El
Dorado, El Dorado, Arkansas having assets of $286 million, deposits of $244
million, and stockholders' equity of $31 million, as of September 30, 1993.
Between 1981 and 1988, First United acquired three other banks in different
cities within Arkansas. The banks acquired were the First National Bank of
Magnolia, Magnolia, Arkansas, having assets of $201 million, deposits of $176
million, and stockholders' equity of $21 million, as of September 30, 1993;
Merchants and Planters Bank, N.A. of Camden, Camden, Arkansas, having assets of
$90 million, deposits of $81 million, and stockholders' equity of $9 million as
of September 30, 1993; and City National Bank of Fort Smith, Fort Smith,
Arkansas, having assets of $310 million deposits of $271 million and
stockholders' equity of $27 million as of September 30, 1993. Each of the banks
are wholly-owned by First United, and, furthermore, are banks organized under
the laws of the United States and are regulated by the Office of the Comptroller
of the Currency.

On November 30, 1993 First United acquired Commerce Financial Corporation
which wholly-owned Commercial Bank at Alma, Alma, Arkansas. Commerce Financial
Corporation was merged into First United which succeeded to the ownership of
Commercial Bank at Alma which had assets of $45 million, deposits of $40
million, and stockholders' equity of $5.5 million as of the date of closing.
Commercial Bank at Alma is a state-chartered institution and is regulated under
the supervision of the Arkansas Bank Department.

The banks offer customary services of banks of similar size and similar
markets, including interest-bearing and non-interest-bearing deposit accounts,
commercial, real estate and personal loans, trust services, correspondent
banking services and safe deposit box activities.

The banking business is highly competitive. The Subsidiary Banks of First
United compete actively with national and state banks, savings and loan
associations, securities dealers, mortgage bankers, finance companies and
insurance companies.

REGULATION

First United is a registered bank holding company pursuant to the Bank
Holding Company Act of 1956, as amended (the "Act"), and as such, is subject to
regulation and examination by the Federal Reserve Board and is required to file
with the Federal Reserve Board annual reports and other information regarding
the business operations of itself and its subsidiaries. The Act provides that a
bank holding company may be required to obtain Federal Reserve Board approval
for the acquisition of more than 5% of the voting securities of substantially
all of the assets of any bank or bank holding company, unless it already owns a
majority of the voting securities of such bank or bank holding company. The Act
prohibits First United from engaging in any business other than banking or
bank-related activities specifically allowed by the Federal Reserve Board. The
Act also prohibits First United and its subsidiaries from engaging in certain
tie-in arrangements in connection with the extension of credit, the lease of
sale of property or the provision of any services.

As a registered bank holding company, First United is subject to the
Federal Reserve Board's position that a bank holding company should serve as a
"source of strength" for its bank subsidiaries. In an early application of the
doctrine the Federal Reserve Board announced that failure to assist a troubled
bank subsidiary when its holding company was in a position to do so was an
unsafe and unsound practice and the Federal Reserve Board claimed the authority
to order a bank holding company to capitalize its subsidiary banks.

In 1991 Congress modified the source of strength doctrine by creating a
system of prompt corrective actions under which the federal banking agencies are
required to take certain actions to resolve the problems of depository
institutions based on their level of capitalization. In a bank holding company
organization, an undercapitalized insured depository institution must submit a
capital restoration plan to the appropriate agency which may not accept the plan
unless the company controlling the institution has guaranteed that the
institution will comply with the plan until the institution has been adequately
capitalized on average during

30
<PAGE> 38

each of four consecutive calendar quarters. The aggregate liability to the
guaranteeing companies is the lesser of an amount equal to 5 percent of the
institution's total assets at the time the institution became undercapitalized,
or the amount which is necessary to bring the institution into compliance with
applicable capital standards.

For a significantly undercapitalized institution, the appropriate agency
must prohibit a bank holding company from making any capital distribution
without prior Federal Reserve Board approval. The agency also may require a bank
holding company to divest or liquidate the institution.

First United and its subsidiaries are also subject to various federal
banking laws including the Financial Institutions, Reform, Recovery and
Enforcement Act of 1989 ("FIRREA") which, among other things, made substantive
changes to the deposit insurance system. As a part of the reorganization of the
deposit insurance funds, the deposit premiums for insurance of Bank Insurance
Fund members were significantly increased. FIRREA also authorized bank holding
companies to acquire savings and thrift institutions without tandem operation
restrictions. Furthermore, FIRREA expanded the authority of regulatory agencies
to assess severe penalties ranging from $5,000 per day to $l,000,000 per day, on
persons or institutions that the agency finds in violation of a broad range of
activities.

First United and its subsidiaries are also subject to the provisions of the
Federal Deposit Insurance Corporation Improvement Act of 1991, which provided
for industry-wide standards in such areas as real estate lending, further
restrictions on brokered deposits and insider lending, establishment of a
risk-based deposit insurance system, enhanced examinations and audits of banking
institutions, the adoption of a Truth-in-Savings Act, various
merger-and-acquisitions related provisions, and the implementation of
legislation on foreign bank operations in the United States.

The provisions of the Community Reinvestment Act of 1977, as amended, are
applicable to the subsidiaries of First United. Federal regulators are required
to consider performance under the Community Reinvestment Act before approving an
application to establish a branch or acquire another financial institution. The
Federal Reserve Board has promulgated regulations governing compliance with the
Community Reinvestment Act in Regulation BB. Recent regulatory and statutory
developments show that compliance with the Community Reinvestment Act is subject
to strict scrutiny and is often grounds for denial of an application to federal
regulators. First United's subsidiary banks are all rated "satisfactory" for CRA
purposes.

On January 19, 1989, the Federal Reserve Board issued final guidelines to
implement risk-based capital requirements for bank holding companies. The
guidelines establish a systematic analytical framework that makes regulatory
capitial requirements more sensitive to differences in risk profiles among
banking organizations, takes off-balance sheet exposures into account in
assessing capital adequacy, and minimizes disincentives to holding liquid,
low-risk assets. The guidelines provided for phasing in risk-based capital
standards through the end of 1992, at which time the standards became fully
effective. The Company's year end 1993 Tier 1 ratio of 18.83% and Total capital
ratio of 19.53% exceeds the current minimum regulatory requirements of 4.00% and
8.00% respectively.

The table below illustrates all of the capital requirements applicable to
First United and its subsidiaries.

REGULATORY COMPARISON OF CAPITAL RATIOS

<TABLE>
<CAPTION>
REGULATORY
DECEMBER 31, 1993 FIRST UNITED REQUIREMENTS
- ----------------------------------------------------------------- ------------ ------------
<S> <C> <C>
Total Capital/Total Assets....................................... 10.53% 6.00%
Primary Capital/Total Assets..................................... 10.53% 5.50%
Total Risk-Based Capital......................................... 19.53% 8.00%
Tier 1 Capital................................................... 18.83% 4.00%
Leverage Ratio................................................... 9.31% 3.00%
</TABLE>

31
<PAGE> 39

First United's Subsidiary Banks are subject to a variety of regulations
concerning the maintenance of reserves against deposits, limitations on the
rates that can be charged on loans or paid on deposits, branching, restrictions
on the nature and amounts of loans and investments that can be made and limits
on daylight overdrafts.

The Subsidiary Banks are limited in the amount of dividends they may
declare. Prior approval must be obtained from the appropriate regulatory
authorities before dividends can be paid by the Banks to First United if the
amount of adjusted capital, surplus and retained earnings is below defined
regulatory limits. First United's subsidiary banks will have available for
payment of dividends without regulatory approval, approximately $15,400,000 of
undistributed earnings as of December 31, 1993. The Subsidiary Banks are also
restricted from extending credit or making loans to or investments in First
United and certain other affiliates as defined in the Act. Furthermore, loans
and extensions of credit are subject to certain other collateral requirements.

OFFICES

First United's executive offices are located in the offices of First
National Bank of El Dorado at Main and Washington Streets, El Dorado, Arkansas
71730.

EMPLOYEES

As of December 31, 1993, First United and its Subsidiary Banks had
approximately 373 full-time equivalent employees, 100 of whom are located in El
Dorado, 144 of whom are located in Fort Smith, 67 of whom are located in
Magnolia, 37 of whom are located in Camden, and 25 of whom are located in Alma.

DESCRIPTION OF FIRST UNITED COMMON STOCK

The following summary of the terms of First United Common Stock does not
purport to be complete and is qualified in its entirety by reference to the 1987
Act and First United's Amended and Restated Articles of Incorporation. First
United's Amended and Restated Articles of Incorporation authorizes the issuance
of 12,000,000 shares of Common Stock, $1.00 par value. There are 4,272,276 fully
paid and non-assessable shares of First United Common Stock issued and
outstanding.

Each share of First United Common Stock is entitled to one vote on all
matters to be voted on by stockholders, including the right to cumulate votes
for the election of the Board of Directors, and to dividends when and if
declared from time to time by the Board of Directors. There is no right of
preemption associated with the First United Common Stock. Upon liquidation, each
share would be entitled to share pro rata in all of the assets of First United
available for distribution to the holders of Common Stock. The transfer agent
for First United Common Stock is First National Bank of El Dorado, El Dorado,
Arkansas. First United Common Stock is traded on NASDAQ-National Market System
over-the-counter under the symbol of "UNTD."

RESALE OF FIRST UNITED COMMON STOCK

The First United Common Stock issued pursuant to the Merger will be freely
transferable under the Securities Act of 1933 (the "Securities Act"), except for
shares issued to any InvestArk stockholder who may be deemed to be an
"affiliate" of InvestArk for purposes of Rule 145 under the Securities Act. Each
such stockholder has entered into an agreement with First United providing that
such affiliate will not transfer any First United Common Stock received in the
merger except in compliance with the Securities Act and will not sell or
otherwise transfer such Common Stock (or any interest therein) until financial
results of First United and its subsidiaries (including InvestArk) for at least
30 days of combined operations are published. This restriction is expected to
expire by November 15, 1994. See also "InvestArk Bancshares, Inc. -- Resulting
Ownership in First United".

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<PAGE> 40

RECENT ACQUISITION

On November 30, 1993, First United acquired Commerce Financial Corporation,
Alma, Arkansas, which wholly-owned Commercial Bank at Alma, Alma, Arkansas.
Commercial Bank at Alma is a state-chartered commercial bank which at the
closing date had approximately $45,000,000 in assets, $40,000,000 in deposits
and $5,500,000 million in stockholder equity. The merger of Commerce Financial
Corporation with and into First United was accounted for under the purchase
method of accounting. Total cash consideration paid by First United in the
acquisition of Commerce Financial Corporation was approximately $5,367,000.

INVESTARK BANKSHARES, INC.
DESCRIPTION OF BUSINESS

InvestArk is a multi-bank holding company which owns 99.7% and 100% of the
common stock of The Bank of North Arkansas, Melbourne, Arkansas ("North
Arkansas") and First Stuttgart Bank and Trust Company, Stuttgart, Arkansas,
("First Bank") respectively. InvestArk may engage, directly or through
subsidiaries, in those activities closely related to banking which are
specifically permitted under the Bank Holding Company Act of 1956, as amended.

InvestArk was organized as an Arkansas bank holding company on July 20,
1984. The sole asset of InvestArk is the stock it holds in its two bank
subsidiaries. The subsidiaries grant commercial, installment and real estate
loans to customers principally in Arkansas County and Izard County, Arkansas. As
of September 30, 1993, these subsidiaries had a total of $83,133,078 of loans
outstanding and a loan loss reserve of $896,091. InvestArk adjusted its
allowance for possible loan losses and reserve against other real estate owned
to add $690,000 in the fourth quarter of 1993. This amount resulted in a
reduction of the same amount in InvestArk's capital account. However, this
reduction in capital was substantially recouped by InvestArk's retention of
fourth quarter earnings. For a more complete discussion regarding the
aforementioned mentioned adjustment, see "InvestArk Bankshares,
Inc. -- Management Discussion and Analysis".

MANAGEMENT'S DISCUSSION AND ANALYSIS

The following discussion and analysis highlights the significant factors
affecting InvestArk's consolidated financial statements. For a more complete
understanding of the following discussion, reference should be made to
InvestArk's consolidated financial statements and related notes thereto
presented elsewhere in this Proxy Statement.

BALANCE SHEET ANALYSIS

Financial Condition. At December 31, 1993 total assets were $184,904,000
reflecting a modest decrease over the December 31, 1992 level of $190,940,000.
InvestArk receives a major portion of its income from earning assets which
consist of interest bearing deposits with other banks, federal funds sold,
investment securities and loans. See tables 1 and 2.

InvestArk's loan portfolio represents the largest component of the earning
asset base and has the largest impact upon income from earning assets. However,
the loan portfolio continues to experience modest declines as a result of
weakened loan demand. Inherent in InvestArk's loan portfolio is credit risk.
InvestArk maintains an allowance against which loan losses are charged.
Management evaluates the allowance adequacy quarterly. Management's methodology
to determine the adequacy of the allowance considers specific credit reviews,
past loan loss experience, current economic conditions and trends and the volume
and composition of the loan portfolio. See tables 5 through 9 and "Earnings
Analysis -- Provision for Possible Loan Losses" for additional information.

Investment securities continues to grow. At December 31, 1993, investment
securities had a balance of $87,864,000 as compared to December 31, 1992 level
of $82,462,000. The increase from 1992 to 1993 primarily reflects a shift out of
cash and due from bank accounts to investment securities in an effort to
maximize earning asset levels. See tables 3 and 4.

33
<PAGE> 41

As the primary source to fund earning assets, deposits have decreased to a
level of $163,300,000 at December 31, 1993 as compared to December 31, 1992
level of $170,102,000. Time deposits decreased by $8,110,000 or 10% for the year
ended December 31, 1993 due to declining interest rates and the resulting shift
from interest bearing deposits due to depositors shortening their time horizons.
See table 10 for further analysis of time deposits in excess of $100,000.

Liquidity and Interest Rate Sensitivity Management. Liquidity is the
ability of the bank to fund the needs of its borrowers, depositors and
creditors. Based on maturity structure and anticipated loan and deposit funding
requirements, InvestArk anticipates that its liquidity requirements will be met
in the foreseeable future. InvestArk's management is of the opinion that
traditional sources of maturing loans and investment securities, federal funds
and the base of core deposits will be adequate to provide liquidity needs. See
tables 4, 6 and 10 for additional information on certain investment, loan and
time deposit maturities.

The matching of assets and liabilities may be analyzed by examining the
extent to which such assets and liabilities are "interest rate sensitive" and by
monitoring an institution's interest rate sensitivity "gap." An asset or
liability is said to be interest rate sensitive within a specific time period if
it will mature or reprice within that time period. The interest rate sensitivity
gap is defined as the difference between the amount of interest-earning assets
expected to mature or reprice within a specific time period and the amount of
interest-bearing liabilities expected to mature or reprice within that time
period. A gap is considered positive when the amount of interest rate sensitive
assets maturing within a specific time frame exceeds the amount of interest rate
sensitive liabilities maturing within that same time frame. During a period of
falling interest rates, a positive gap tends to result in a decrease in net
interest income. Whereas in a rising interest rate environment, an institution
with a positive gap could experience the opposite results. The table below
represents InvestArk's gap position as of December 31, 1993 (in thousands):

<TABLE>
<CAPTION>
0-30 31-90 91-180 181-365 OVER
DAYS DAYS DAYS DAYS 1 YEAR
------ ------ ------ ------- -------
<S> <C> <C> <C> <C> <C>
Rate sensitive assets...................................... 29,745 12,583 14,224 20,053 98,212
Rate sensitive liabilities................................. 24,471 14,807 11,661 15,712 73,161
------ ------ ------ ------- -------
Net gap.......................................... 5,274 (2,224) 2,563 4,341 25,051
------ ------ ------ ------- -------
------ ------ ------ ------- -------
</TABLE>

At December 31, 1993, InvestArk's interest-bearing assets maturing or
repricing within one year exceeded the interest-bearing liabilities maturing or
repricing within the same time period. Based upon its evaluation of the interest
rate market, management feels InvestArk's gap position is in compliance with its
asset/liability management policies.

Capital. The Federal Reserve Board requires banks to maintain capital based
on "risk-adjusted" assets so that categories of assets with potentially higher
risk will require more capital backing than assets with lower risk. In addition,
banks are required to maintain capital to support, on a risk-adjusted basis,
certain off-balance sheet activities such as loan commitments.

At December 31, 1993, InvestArk's Tier 1 capital and total capital as a
percentage of total risk-adjusted assets were each 13.5% which exceeded the
required minimum levels. The required minimum levels for Tier 1 capital and
total capital are 4.0% and 8.0%, respectively.

EARNINGS ANALYSIS

For the years ended December 31, 1993, 1992, and 1991, net income was
approximately $1,278,000, $2,233,000, and $907,000, respectively. For the years
ended December 31, 1993, 1992 and 1991, the return on average assets was 0.7%,
1.3%, and 0.5%, respectively, while the return on average equity was 7.6%,
14.3%, and 6.3%, respectively.

The primary components of total income and expense which affect net income
are net interest income, provision for possible loan losses, non-interest
income, non-interest expense and the provision for income taxes. Significant
factors affecting these categories are presented below.

34
<PAGE> 42

Net Interest Income. For the years ended December 31, 1993, 1992, and 1991,
net interest income was $7,510,000, $7,819,000 and $6,777,000, respectively. The
decrease in 1993 over 1992 levels results from levels of yields on investment
securities and yields decreasing relatively more as compared to rate decreases
on interest-bearing deposits. These increases in 1992 over 1991 levels result
from increases in earnings assets and a decrease in interest expense which was
the result of falling interest rates. See Tables 1 and 2.

Provision for Possible Loan Losses. For the year ended December 31, 1993,
InvestArk made additions to its allowance for possible loan losses of
approximately $600,000 compared to $64,000 in 1992 and $1,463,000 in 1991.
Almost 60% or $311,000 of the increase in 1993 as compared to 1992 levels
results primarily from concern with respect to decrease in agricultural yields
in the fall of 1993. The drop in yields was attributable to extremely dry
weather conditions throughout the crop cycle which conditions were only
partially offset by improved commodity prices. Based on such data, management
determined that a reserve of approximately 1.25% was necessary for its
agribusiness-related loans. As discussed in Note 3 to the consolidated financial
statements the markets in which InvestArk operates are dependent upon the
agribusiness economic sector. Additionally, the credit worthiness of a large
loan was downgraded and a portion specifically reserved which accounted for 15%
of the increase in the provision during 1993. As a result of the plant
modernization measures undertaken by this borrower in 1993, cash flows from
operations were diverted from the scheduled debt repayments to capital
expenditures. Pending resumption of principal and interest payments, the loan
was placed on nonaccrual and specifically reserved based on underlying
collateral values.

Net charge-offs on loans were $179,000 in 1993, $175,000 in 1992 and
$929,000 in 1991, respectively. The allowance for loans and lease losses were
$1,494,000 or 1.8% of loans at December 31, 1993, compared to $1,073,000 or 1.2%
at December 31, 1992.

Non-Interest Income. Total non-interest income for the year ended December
31, 1993 was $1,509,000 as compared to $1,504,000 for 1992 and $1,615,000 in
1991. The large increase in 1992 over 1991 was primarily in the category of
other operating income. Other operating income increased primarily because of
lease rental income derived from leveraged lease transactions entered into
during 1991. Management believes the level of non-interest income prior to 1992
is more representative of the levels to be expected in the future as the
leverage leases terminate in April 1994.

Non-Interest Expense. Total non-interest expense for the year ended
December 31, 1993 was $6,988,000 as compared to $6,517,000 for 1992 and
$5,890,000 in 1991. The increase for 1993 is primarily in the category of
employee benefits. The increase for 1992 is primarily in the category of other
expense. Other expense increased primarily because of increased annual FDIC
insurance assessments, legal fees and costs attributable to the foreclosure and
subsequent writedowns of other real estate.

Provision for Income Taxes. Income tax expense for the years ended December
31, 1993, 1992 and 1991 was $148,000, $501,000, and $128,000, respectively.
Effective tax rates were 10%, 18%, and 12% for 1993, 1992, 1991, respectively.
Note 7 to the consolidated financial statements provides further details of the
applicable income tax expense.

REGULATORY ISSUES

Pursuant to the Interest Rate Control Amendment to the Constitution of the
State of Arkansas, "consumer loans and credit sales" have a maximum limitation
of 17% per annum and all "general loans" have a maximum limitation of 5% over
the Federal Reserve Discount Rate in effect at the time the loans are made. The
Arkansas Supreme Court has determined that "consumer loans and credit sales" are
"general loans" and are subject to the limitation of 5% over the Federal Reserve
Discount Rate as well as a maximum limitation of 17% per annum. As a general
rule, InvestArk is required to comply with the Arkansas usury laws on loans made
within the State of Arkansas.

35
<PAGE> 43

ACCOUNTING STANDARDS

During 1993 the Financial Accounting Standards Board (FASB) issued SFAS No.
114 (Accounting by Creditors for Impairment of a Loan) which becomes effective
beginning in 1995. This statement defines the measurement requirements for loans
that are impaired or deemed to be troubled debt restructurings. Management has
not determined the effect that this statement will have upon adoption.

Also during 1993 the FASB issued SFAS No. 115 "Accounting for Certain
Investments in Debt and Equity Securities," which InvestArk will adopt on
January 1, 1994. This statement addresses the accounting and reporting for
investments in debt and certain equity securities. Debt securities not
classified as trading account securities or investment securities expected to be
held to maturity and all equity securities will be classified as
available-for-sale securities and reported at fair value, with net unrealized
gains and losses reported, net of tax, as a separate component of stockholders'
equity. InvestArk believes the impact of adopting this statement will not be
material to its financial position or results of operations as it expects to
hold its investment securities to maturity.

36
<PAGE> 44

INVESTARK BANKSHARES, INC.

STATISTICAL DISCLOSURES

TABLE 1 -- COMPARATIVE AVERAGE BALANCES -- YIELDS AND RATES ($ IN THOUSANDS)

The Average Assets and Liabilities table below shows the average balances
of the assets and liabilities of the corporation, the interest income or expense
associated with those assets and liabilities, and the computed yield or rate
based upon the interest income or expense for each of the last three years.

<TABLE>
<CAPTION>
1993 1992 1991
------------------------------ ------------------------------ ------------------------------
AVERAGE REVENUE/ YIELD/ AVERAGE REVENUE/ YIELD/ AVERAGE REVENUE/ YIELD/
BALANCE EXPENSE RATE BALANCE EXPENSE RATE BALANCE EXPENSE RATE
-------- -------- ------ -------- -------- ------ -------- -------- ------
<S> <C> <C> <C> <C> <C> <C> <C> <C> <C>
ASSETS
Interest-earning assets:
Federal funds sold and
securities purchased
under resell
agreements.............. 718 21 2.92% 1,531 66 4.31% 1,713 150 8.76%
Investment securities:
U.S. Treasury and U.S.
Agencies.............. $ 50,867 $ 2,969 5.84% $ 45,492 $ 3,059 6.72% $ 36,018 $ 2,814 7.81%
Obligations of states
and political
subdivisions.......... 20,759 1,993 9.60% 17,020 1,833 10.77% 15,550 1,581 10.17%
Other securities........ 26,546 1,554 5.85% 28,407 1,867 6.57% 33,828 2,634 7.79%
Loans -- net of unearned
income.................. 82,110 6,577 8.01% 86,718 7,874 9.08% 89,164 9,241 10.36%
-------- -------- ------ -------- -------- ------ -------- -------- ------
Total interest-earning
assets.................... 180,999 13,114 7.25% 179,168 14,699 8.20% 176,272 16,420 9.32%
Cash and due from banks..... 4,990 5,467 5,368
Other assets................ 6,528 9,236 10,113
Allowance for loan losses... (1,078) (1,078) (1,134)
-------- -------- --------
Total Assets........ $191,439 $192,793 $190,619
-------- -------- --------
-------- -------- --------
LIABILITIES AND STOCKHOLDERS' EQUITY
Interest-bearing
liabilities:
Interest-bearing demand
deposits................ $ 38,211 $ 1,072 2.81% $ 32,844 $ 1,110 3.38% $ 29,110 $ 1,427 4.90%
Savings deposits.......... 26,663 803 3.01% 21,804 741 3.40% 16,319 718 4.40%
Time deposits............. 76,242 3,047 4.00% 85,628 4,300 5.02% 93,867 6,520 6.95%
Federal funds purchased
and securities sold
under repurchase
agreements.............. 3,814 123 3.22% 5,556 218 3.92% 6,944 517 7.45%
-------- -------- ------ -------- -------- ------ -------- -------- ------
Total interest-bearing
liabilities............... 144,930 5,045 3.48% 145,833 6,369 4.37% 146,240 9,182 6.28%
-------- -------- --------
Noninterest-bearing demand
deposits.................. 27,972 30,161 28,203
Accrued expenses and other
liabilities............... 1,756 1,164 1,756
Stockholders' equity........ 16,781 15,635 14,420
-------- -------- --------
Total liabilities
and stockholders'
equity............ $191,439 $192,793 $190,619
-------- -------- --------
-------- -------- --------
NET INTEREST MARGIN........... $ 8,069 $ 8,330 $ 7,238
Less tax equivalent
adjustments:
Investments............. 559 511 461
-------- -------- --------
Net interest margin
per annual
report............ $ 7,510 $ 7,819 $ 6,777
-------- -------- --------
-------- -------- --------
</TABLE>

Non-accruing loans have been included in the average loan balances and
interest collected prior to these loans having been placed on non-accrual has
been included in interest income. Interest income and average yield on
tax-exempt assets have been calculated on a fully tax equivalent basis using a
34% tax rate for the years 1993, 1992 and 1991.

37
<PAGE> 45

INVESTARK BANKSHARES, INC.

STATISTICAL DISCLOSURES -- (CONTINUED)

TABLE 2 -- VOLUME AND YIELD/RATE VARIANCE ANALYSIS

The Volume and Yield/Rate variance table shows the change from year to year
for each component of the tax equivalent net interest margin separated into the
amount generated by volume changes and the amount generated by changes in the
yield or rate (Tax Equivalent Basis -- $ in Thousands):

<TABLE>
<CAPTION>
1993 COMPARED TO 1992 1992 COMPARED TO 1991
CHANGE DUE TO: CHANGE DUE TO:
---------------------------- ----------------------------
YIELD/ YIELD/
VOLUME RATE NET VOLUME RATE NET
------ ------ ------ ------ ------ ------
<S> <C> <C> <C> <C> <C> <C>
REVENUE EARNED ON:
Federal funds sold and securities purchased
under resell agreements................... (35) (10) (45) (16) (68) (84)
Investment securities:
U.S. Treasury and U.S. Agencies........... 361 (451) (90) 741 (496) 245
Obligations of states and political
subdivisions............................ 403 (243) 160 150 102 252
Other securities.......................... (122) (191) (313) (422) (345) (767)
Loans -- net of unearned income.............. (418) (879) (1,297) (255) (1,112) (1,367)
------ ------ ------ ------ ------ ------
Total interest-earning assets.................. 189 (1,774) (1,585) 198 (1,919) (1,721)
INTEREST PAID ON:
Interest-bearing demand deposits............. 181 (219) (38) 183 (500) (317)
Savings deposits............................. 166 (104) 62 241 (218) 23
Time deposits................................ (473) (780) (1,253) (570) (1,650) (2,220)
Federal funds purchased and securities sold
under repurchase agreements............... (68) (27) (95) (103) (196) (299)
------ ------ ------ ------ ------ ------
Total interest-bearing liabilities............. (194) (1,130) (1,324) (249) (2,564) (2,813)
------ ------ ------ ------ ------ ------
Change in net interest income on a tax
equivalent
basis........................................ 383 (644) (261) 447 645 1,092
------ ------ ------ ------ ------ ------
------ ------ ------ ------ ------ ------
</TABLE>

The change in interest due to both volume and yield/rate has been allocated
to change due to volume and change due to yield/rate in proportion to the
absolute value of the change of each. Tax exempt income has been adjusted to a
tax equivalent basis using a tax rate of 34% for the years 1993, 1992 and 1991.
The balances of non-accrual loans and related income recognized have been
included for purposes of these computations.

38
<PAGE> 46

INVESTARK BANKSHARES, INC.

STATISTICAL DISCLOSURES -- (CONTINUED)

TABLE 3 -- INVESTMENT PORTFOLIO

The table below indicates book values of investment securities by type at
year-end for each of the last three years (in thousands):

<TABLE>
<CAPTION>
DECEMBER 31,
-------------------------------
1993 1992 1991
------- ------- -------
<S> <C> <C> <C>
U.S. Treasury and U.S. Government agencies...................... $51,380 $46,466 $40,012
Obligations of states and political subdivisions................ 24,700 18,701 15,901
Other securities................................................ 8,399 13,839 16,252
------- ------- -------
Total Debt Securities................................. 84,479 79,006 72,165
Equity Securities............................................... 3,385 3,455 66
------- ------- -------
Total Investment Securities........................... $87,864 $82,461 $72,231
------- ------- -------
------- ------- -------
</TABLE>

TABLE 4 -- MATURITY DISTRIBUTION AND YIELDS OF INVESTMENT PORTFOLIO

The following table details the maturities of investment securities at
December 31, 1993 and the weighted average yield for each range of maturities
(Tax Equivalent Basis -- in thousands):

<TABLE>
<CAPTION>
MATURING
---------------------------------------------------------------------------------------
AFTER ONE AFTER FIVE AFTER
WITHIN BUT WITHIN BUT WITHIN TEN
ONE YEAR YIELD FIVE YEARS YIELD TEN YEARS YIELD YEARS YIELD TOTAL
-------- ----- ---------- ----- ---------- ----- ------ ----- -------
<S> <C> <C> <C> <C> <C> <C> <C> <C> <C>
U.S. Treasury and U.S. Government
Agencies................................ $11,960 7.01 % $ 34,783 5.85 % $ 2,406 9.35 % $2,231 7.58 % $51,380
Obligations of states and political
subdivisions............................ 1,379 7.25 % 13,567 8.02 % 7,287 8.47 % 2,467 10.26% 24,700
Other securities.......................... 1,914 8.78 % 4,205 8.49 % 1,750 8.91 % 530 8.89 % 8,399
-------- ---------- ---------- ------ -------
Total debt securities............. $15,253 7.25 % $ 52,555 6.62 % $ 11,443 8.72 % $5,228 8.97 % $84,479
-------- ---------- ---------- ------
-------- ---------- ---------- ------
Equity securities......................... 3,385
-------
Total investment securities....... $87,864
-------
-------
</TABLE>

Included in the above maturity schedule are mortgage related securities
totaling $10,075,000 which have contractual maturities as follows: Within One
Year -- $3,369,000; After One But Within Five Years -- $2,863,000; After Five
But Within Ten Years -- $1,772,000; After Ten Years -- $2,071,000. Due to the
nature of mortgage related securities, the actual maturities of these
investments can be substantially shorter than their contractual maturity.
Management believes the actual weighted average maturity of the entire mortgage
related portfolio to be approximately 7.35 years.

At December 31, 1993 there were no securities in the portfolio of any one
issuer with a carrying value exceeding ten percent of total stockholders'
equity.

TABLE 5 -- COMPOSITION OF THE LOAN PORTFOLIO

<TABLE>
<CAPTION>
1993 1992 1991 1990 1989
------ ------ ------ ------ ------
<S> <C> <C> <C> <C> <C>
Commercial, Financial and Agricultural....................... 35,232 39,112 39,654 44,274 38,252
Real Estate.................................................. 37,956 35,493 36,808 33,097 31,952
Consumer Loans............................................... 11,290 12,373 11,051 10,470 10,994
Loans for Purchasing or Carrying Securities.................. 0 0 0 0 17
Financing Leases............................................. 18 0 0 0 0
------ ------ ------ ------ ------
Total Loans........................................ 84,496 86,978 87,513 87,841 81,215
------ ------ ------ ------ ------
------ ------ ------ ------ ------
</TABLE>

Construction loans outstanding at December 31, 1993 are not material in
amount. However, to the extent loans are made to finance construction, those
amounts are included in the table above as Real Estate Loans.

39
<PAGE> 47

INVESTARK BANKSHARES, INC.

STATISTICAL DISCLOSURES -- (CONTINUED)

TABLE 6 -- LOAN MATURITIES AND SENSITIVITY TO CHANGES IN INTEREST RATES

<TABLE>
<CAPTION>
WITHIN ONE ONE YEAR AFTER
YEAR OR THROUGH FIVE
LESS FIVE YEARS YEARS TOTAL
---------- ---------- ----- ------
<S> <C> <C> <C> <C>
Commercial, Financial and Agricultural................ 27,885 7,285 62 35,232
Real Estate (Excluding loans secured by 1-4 family
residential properties)............................. 9,626 12,954 0 22,580
---------- ---------- ----- ------
37,511 20,239 62 57,812
---------- ---------- ----- ------
---------- ---------- ----- ------
</TABLE>

<TABLE>
<CAPTION>
MATURING:
-------------------------------
ONE YEAR AFTER
THROUGH FIVE
FIVE YEARS YEARS TOTAL
---------- ----- ------
<S> <C> <C> <C>
Above loans due after one year which have:
Predetermined interest rates.................................... 17,310 62 17,372
Floating interest rates......................................... 2,929 0 2,929
---------- ----- ------
20,239 62 20,301
---------- ----- ------
---------- ----- ------
</TABLE>

TABLE 7 -- NON-PERFORMING ASSETS AND PAST DUE LOANS

The table below shows InvestArk's non-performing assets and past due loans
at the end of each of the last five years (in thousands):

<TABLE>
<CAPTION>
DECEMBER 31,
------------------------------------------------
1993 1992 1991 1990 1989
----- ------ ------ ------ ------
<S> <C> <C> <C> <C> <C>
Loans accounted for on a non-accrual basis...... $ 474 $ 446 $ 764 $1,570 $ 831
Restructured loans.............................. 0 0 0 231 231
----- ------ ------ ------ ------
Non-performing loans.......................... 474 446 764 1,801 1,062
Other Real Estate Owned......................... 143 1,242 2,753 890 1,190
----- ------ ------ ------ ------
Non-performing assets......................... 617 1,688 3,517 2,691 2,252
Accruing loans past due 90 days or more......... 31 100 993 1,969 1,017
----- ------ ------ ------ ------
Total non-performing assets and past due
loans...................................... $ 648 $1,788 $4,510 $4,660 $3,269
----- ------ ------ ------ ------
----- ------ ------ ------ ------
</TABLE>

If interest on non-accrual loans had been accrued, such income would have
approximated $39,000 in 1993. The interest which was included in earnings for
1993 for non-accrual loans is immaterial.

At December 31, 1993, InvestArk had no loan concentrations greater than ten
percent of total loans except as shown in Table 5.

InvestArk does not accrue interest on any loan for which payment of
interest or principal is not expected, on any loan which is seriously delinquent
unless the obligation is both well secured and in the process of collection, or
on any loan that is maintained on a cash basis due to deterioration in the
financial condition of the borrower. Management considers a debt to be "well
secured" if it is secured by collateral in the form of liens on or pledges of
real or personal property that have a realizable value sufficient to discharge
the debt in full or by the guaranty of a financially responsible party. A debt
is considered to be "in process of collection" if, based on a probable specific
event, it is expected that the loan will be repaid or brought current. At
December 31, 1993, InvestArk has no loans about which Management has serious
doubts as to their collectibility other than those disclosed above.

40
<PAGE> 48

INVESTARK BANKSHARES, INC.

STATISTICAL DISCLOSURES -- (CONTINUED)

TABLE 8 -- ANALYSIS OF THE ALLOWANCE FOR LOAN LOSSES

The table below summarizes InvestArk's loan loss experience for each of the
last five years (in thousands):

<TABLE>
<CAPTION>
YEAR ENDED DECEMBER 31,
-------------------------------------------------
1993 1992 1991 1990 1989
------ ------ ------ ----- ------
<S> <C> <C> <C> <C> <C>
Amount of loan loss reserve at beginning of period....... $1,073 $1,184 $ 978 $ 922 $1,004
Loans charged off:
Real estate loans...................................... (35) (52) (93) (13) (35)
Commercial, Financial and Agricultural................. (180) (219) (831) (713) (551)
Consumer............................................... (40) (80) (58) (22) (44)
------ ------ ------ ----- ------
Total charge-offs.............................. (255) (351) (982) (748) (630)
Recoveries on loans previously charged off:
Real estate loans...................................... 16 2 2 12 19
Commercial, Financial and Agricultural................. 24 157 27 4 9
Consumer............................................... 36 17 24 28 33
------ ------ ------ ----- ------
Total recoveries............................... 76 176 53 44 61
Net charge-offs.......................................... (179) (175) (929) (704) (569)
Additions to allowance charged to operating expense...... 600 64 1,135 760 487
------ ------ ------ ----- ------
Amount of loan loss reserve at end of period............. $1,494 $1,073 $1,184 $ 978 $ 922
------ ------ ------ ----- ------
------ ------ ------ ----- ------
Percentage of net charge-offs during period to average
loans outstanding during the period.................... 0.22% 0.20% 1.04% 0.83% 0.71%
------ ------ ------ ----- ------
------ ------ ------ ----- ------
</TABLE>

TABLE 9 -- ALLOCATION OF THE ALLOWANCE FOR LOAN LOSSES

The following table is a summary by allocation category of InvestArk's
allowance for loan losses (in thousands):

<TABLE>
<CAPTION>
DECEMBER 31,
------------------------------------------------------------------------------------------------------------------
% LOANS % LOANS % LOANS % LOANS % LOANS
IN EACH IN EACH IN EACH IN EACH IN EACH
1993 CATEGORY 1992 CATEGORY 1991 CATEGORY 1990 CATEGORY 1989 CATEGORY
------ -------- -------- -------- -------- -------- -------- -------- -------- --------
<S> <C> <C> <C> <C> <C> <C> <C> <C> <C> <C>
Commercial,
Financial
and
Agricultural... $ 943 42% $ 754 45% $ 825 45% $ 716 50% $ 662 47%
Real Estate... 378 45% 225 41% 200 42% 171 38% 167 39%
Consumer...... 85 13% 89 13% 86 13% 63 12% 78 14%
Unallocated... 88 5 71 28 15
------ -------- -------- -------- --------
$1,494 $ 1,073 $ 1,182 $ 978 $ 922
------ -------- -------- -------- --------
------ -------- -------- -------- --------
</TABLE>

TABLE 10 -- TIME DEPOSITS OF $100,000 OR MORE

The table below shows maturities on outstanding time deposits of $100,000
or more at December 31, 1993 (in thousands):

<TABLE>
<CAPTION>
CERTIFICATES
OF DEPOSIT
------------
<S> <C>
3 months or less............................................................. $ 9,734
Over 3 months through 6 months............................................... 5,715
Over 6 months through 12 months.............................................. 4,758
Over 12 months............................................................... 1,303
------------
$ 21,510
------------
------------
</TABLE>

41
<PAGE> 49

DIRECTORS AND EXECUTIVE OFFICERS

The Board of Directors of InvestArk will be dissolved and positions held by
executive officers of InvestArk will no longer exist upon the consummation of
the Merger. Executive officers of the InvestArk subsidiaries are expected to
remain in the respective positions with North Arkansas and First Bank. At this
time none of the directors or executive officers of InvestArk are expected to be
on the Board of Directors or an executive officer of First United after
consummation of the Merger. The directors of InvestArk and its subsidiaries are
set forth below:

DIRECTORS OF INVESTARK AND ITS SUBSIDIARIES

<TABLE>
<CAPTION>
SHARES OF INVESTARK
COMMON STOCK OWNED
BENEFICIALLY AS OF
DECEMBER 31, 1993
DIRECTOR (1)PRINCIPAL OCCUPATION AND PERCENT OF
NAME AGE SINCE AND DIRECTORSHIP CLASS IF MORE THAN 1%
- ------------------- --- -------- ------------------------------------ ---------------------
<S> <C> <C> <C> <C>
Wesley Arnold 58 1988 Self-employed Grocer, Director of 100
North Arkansas
Harry C. Erwin 56 1984 Chairman & Chief Executive Officer 4,315(2.00%)
of InvestArk; Chairman & Chief
Executive Officer of First Bank;
Director of North Arkansas
L. Clyde Carter 84 1984 Retired, Director of InvestArk; 5,116(2.37%)
Director of First Bank
Harlin Hames 56 1985 Retired 1985; Director of North 225
Arkansas
Tommy Hillman 57 1979 President, Winrock Farms, Inc. 1,715
Director of InvestArk; Director of
First Bank; Director of North
Arkansas
Jerry J. Hoskyn 51 1991 Self-employed Farmer; Director of 100
InvestArk; Director of First Bank
Harold Ives 64 1985 President, Terminal Truck Brokers, 996
Inc. Director of InvestArk; Director
of First Bank
Steven M. Keith 38 1992 President, KBX, Inc. -- Grain 100
Brokerage Director of InvestArk;
Director of First Bank
Cole Martin 52 1992 Director of InvestArk; Director of 100
First Bank; President of First Bank;
Chairman of North Arkansas
James E. Miller 58 1988 Owner of G.H. Miller & Sons; 150
Director of North Arkansas
John E. Stephens 45 1988 Self-Employed Farmer; Director of 700
InvestArk, Director of First Bank;
Director of North Arkansas;
Secretary of InvestArk
</TABLE>

- ---------------

(1) This column represents the year in which the directorship commenced. If a
person serves as director for both InvestArk and one or both of its
subsidiaries, the year disclosed reflects the date the directorship in
InvestArk commenced.

42
<PAGE> 50

EXECUTIVE OFFICERS OF INVESTARK AND ITS SUBSIDIARIES

In addition to Messrs. Harry C. Erwin, Cole Martin, and John E. Stephens,
the executive officers of InvestArk and its subsidiaries are:

SHARES OF
INVESTARK COMMON
STOCK OWNED
EXECUTIVE BENEFICIALLY AS
OFFICER OF
NAME AGE SINCE POSITION DECEMBER 31, 1993
- -------------------- --- --------- ------------------------------------- ------------------
<S> <C> <C> <C> <C>
Robert M. Koch 48 1989 Senior Vice President of First Bank 0
Lloyd T. Jones, Sr. 52 1986 President and Chief Executive Officer 25
of North Arkansas; Director of North
Arkansas
</TABLE>

During 1993, the Board of Directors of InvestArk held 16 meetings and all
the incumbent directors then in office were in attendance at more than
seventy-five percent of the meetings. The Board of Directors does not have a
nominating, compensation or audit committee.

TRANSACTIONS WITH MANAGEMENT

Directors and executive officers of InvestArk and its subsidiaries, their
associates and members of their immediate families were customers of and had
transactions including loans and commitments to lend with subsidiaries of
InvestArk in the ordinary course of business during 1993. All such loans and
commitments were made by the subsidiaries on substantially the same terms,
including interest rates and collateral, as those prevailing at the time for
comparable transactions with other persons and did not involve more than normal
risk of collectibility or present other unfavorable features. Similar
transactions may be expected to take place in the ordinary course of business in
the future. On December 31, 1993, the aggregate of these related party loans was
approximately $2,212,000 or approximately 2.6% of total loans outstanding of the
subsidiaries and 2.0% of pro forma combined capital accounts.

PRINCIPAL STOCKHOLDERS OF INVESTARK

The following table sets forth, as of December 31, 1993, the only persons
who were known by InvestArk to own of record or beneficially more than five (5%)
of InvestArk Common Stock and the number of shares owned beneficially by each of
them.

<TABLE>
<CAPTION>
NAME AND ADDRESS SHARES DIRECTLY OWNED PERCENT OF CLASS
- ------------------------------------------------------------ --------------------- ----------------
<S> <C> <C>
W. R. Stephens, Jr. Trust................................... 45,200 20.92%
Vernon J. Giss, Trustee
Ernest Butler, Jr., Trustee
W. R. Stephens Trust........................................ 34,158 15.81%
Jackson T. Stephens, Trustee
Vernon J. Giss, Trustee
Bess C. Stephens, Trustee
Jackson T. Stephens......................................... 48,358 22.39%
</TABLE>

Various other Stephens family members and affiliated entities listed on the
chart below own in the aggregate an additional 15,133 shares or 7.00% of the
outstanding shares of InvestArk Common Stock.

All directors and executive officers of InvestArk and its subsidiaries as a
group (12 persons) as of December 31, 1993 owned 13,642 shares or 6.30% of the
outstanding shares of InvestArk Common Stock. No director or executive officer
of InvestArk owns any shares of First United Common Stock. Neither First United
nor any of its subsidiaries nor any director or executive officer of First
United owns any shares of InvestArk Common Stock.

43
<PAGE> 51

FEDERAL RESERVE BOARD INVESTIGATIONS

On March 4, 1993, the Board of Governors of the Federal Reserve System (the
"Board") ordered its staff to commence a formal investigation to review the
ownership and control of Worthen Banking Corporation of Little Rock, Arkansas
("Worthen") for compliance with the control provisions of the Bank Holding
Company Act and the Change in Bank Control Act. This investigation appears to be
focused primarily on whether members of the families of Jackson T. Stephens and
Wilton R. Stephens (deceased) and affiliated entities (collectively, the
Stephens Family), who currently own 26% of Worthen's outstanding common stock,
have exerted control over Worthen in violation of the above-referenced statutes.
First United has been advised by the Stephens Family that the investigation is
continuing, but the Board has not announced any finding or determination that
any violation of law has or has not occurred. The events and transactions which
are the subject of the Worthen investigation do not in any way relate to or
involve InvestArk or First United.

In addition, in February 1993, InvestArk management was advised by the
Federal Reserve Bank of St. Louis (the "St. Louis FED") that the agency had
initiated a review of certain transactions between InvestArk's bank subsidiaries
and Stephens Inc., a registered broker-dealer owned by the Stephens Family.
These transactions involved the purchase and sale of municipal and other
securities; and the purpose of the review, which is still ongoing, is to
determine whether the transactions violated the prohibitions of Sections 23A and
23B of the Federal Reserve Act. Section 23A places several restrictions on what
it refers to as "covered transactions" between a bank and its affiliates. Except
as exempted by the Federal Reserve Board, covered transactions include bank
loans or extensions of credit to an affiliate, purchases of securities issued by
an affiliate, purchases of assets from an affiliate, the bank's acceptance of
securities issued by an affiliate as collateral for a loan or extension of
credit, and the bank's issuance of a guaranty, acceptance, or letter of credit
on behalf of an affiliate. Covered transactions are subject to two general
limitations. First, with respect to quantitative restrictions, covered
transactions between a bank (including its subsidiaries) and an affiliate are
limited to 10% of the bank's capital and surplus. Aggregate covered transactions
between a bank (including its subsidiaries) and all affiliates are limited to
20% of the bank's capital and surplus. Secondly, any covered transaction between
a bank and an affiliate must be on terms and conditions that are consistent with
safe and sound banking practices. Certain covered transactions are subject to
collateral requirements. The amount of collateral required depends on the type
of collateral used, as set forth in the statute. Depending upon the type of
collateral used the market value of such collateral must equal between 100% of
the covered transaction and 130% of the covered transaction. Section 23A also
contains an absolute prohibition on the bank's (or bank subsidiaries) purchase
of low-quality assets from an affiliate. Section 23B generally requires that a
bank and its subsidiaries engage in transactions with affiliates only on terms
and under circumstances, including credit standards, that are substantially the
same, or at least as favorable to the bank or its subsidiary, as those
prevailing at the time for comparable transactions with or involving
non-affiliated companies. Alternatively, in the absence of comparable
transactions, any such transactions must be on terms and under circumstances,
including credit standards, that in good faith would be offered to or applied to
non-affiliated companies.

The St. Louis FED has not announced any results of its review. However,
First United's obligation to consummate the Merger is conditioned upon the St.
Louis FED not having notified either of the parties of actual or proposed
regulatory action with respect to the investigation that could reasonably be
expected to have an adverse effect on First United, InvestArk or InvestArk's
bank subsidiaries. InvestArk management has reviewed the transactions under
review by the St. Louis FED and determined that InvestArk's bank subsidiaries
have benefitted from significant appreciation of the securities purchased taken
as a whole. In order to assure compliance with Section 23A and 23B of the
Federal Reserve Act, InvestArk and its subsidiary banks underwent a two step
process (1) an internal review was conducted to identify all "covered"
transactions with Stephens Inc., if any, and (2) new policies and procedures
were established and reviewed by the St. Louis FED, to ensure compliance with
the Section 23A and 23B of the Federal Reserve Act with respect to any future
affiliate transactions. InvestArk management has no reason to believe that the
St. Louis FED will take any action with respect to the transactions under review
which would have a material adverse effect on First United, InvestArk or
InvestArk's bank subsidiaries.

44
<PAGE> 52

RESULTING OWNERSHIP IN FIRST UNITED

The W. R. Stephens Trust beneficially owns 207,884 shares of First United
Common Stock which equals 4.86% of the issued and outstanding shares of First
United. The W.R. Stephens Jr. Trust beneficially owns 2,100 shares of First
United Common Stock which equals .04% of the issued and outstanding shares of
First United. The additional shares of First United Common Stock to be received
by these and other Stephens Family members in the Merger will increase the total
number of shares beneficially owned by the Stephens Family to a maximum of
862,140, or 16.40% of the outstanding shares of First United Common Stock.
Accordingly, the Stephens Family would be required to file a Notice of Change in
Bank Control and receive approval of the Board in order to own and vote these
shares directly. Because of the existence of the Worthen investigation, and in
lieu of making such a filing at this time, the Stephens family has agreed to
place all of the shares of First United Common Stock its members and affiliates
will receive in the Merger in trust with an independent trustee. The
beneficiaries of the Stephens Trust and the number of shares deposited therein
by each of them are set forth in the following table. The agreement governing
the Stephens Trust provides that the Trustee shall have sole authority to vote
the shares deposited by the beneficiaries, and shall vote them in proportion to
the percentage of shares of First United Common Stock voted for or against any
proposal brought before the stockholders of First United. However, any
abstention of First United Common Stock will not be counted in computing the
above described percentage. (The 209,984 shares of Common Stock of First United
beneficially owned by the W.R. Stephens Trust and the W.R. Stephens Jr. Trust
will continue to be owned and voted directly by their respective trustees). The
beneficiaries of the Stephens Trust will retain dispositive power over the
shares of First United Common stock deposited therein; provided that they have
agreed not to sell 5% or more of the outstanding shares of First United Common
Stock to a purchaser or group of purchasers without the prior written approval
of the Board unless the sale is transacted in connection with an acquisition of
First United approved by its Board of Directors. The Stephens Trust will
terminate when, and if, the Stephens Family ceases to own 10% or more of the
shares of First United's outstanding Common Stock or the Board grants the
Stephens Family permission to own and vote the shares held therein directly.
Based upon the maximum of 985,849 shares to be issued to the stockholders of
InvestArk, the Stephens Trust will own of record 12.41% of the outstanding
shares of First United Common Stock as reflected by the table below.

STEPHENS FAMILY
FIRST UNITED STOCK OWNERSHIP

<TABLE>
<CAPTION>
FIRST UNITED FIRST UNITED FIRST UNITED % % %
SHARES SHARES TO BE SHARES OWNED SHARES SHARES TOTAL
STEPHENS CURRENTLY ACQUIRED IN AFTER THE DIRECTLY OWNED IN SHARES
SHAREHOLDERS OWNED MERGER(1) MERGER OWNED(2) TRUST(2) OWNED(2)
- ----------------------------------------- ------------ ------------ ------------ -------- -------- --------
<S> <C> <C> <C> <C> <C> <C>
W. R. Stephens Trust..................... 207,884(3) 155,981 363,865 3.95% 2.97% 6.92%
Bess C. Stephens,
Jackson T. Stephens and
Vernon J. Giss, Trustee
Jackson T. Stephens...................... 0 220,731 220,731 -- 4.20% 4.20%
W. R. Stephens, Jr. Trust................ 2,100(3) 206,338 208,438 .04% 3.92% 3.96%
Vernon J. Giss and
Ernest Butler, Jr., Trustees
W. R. Stephens, Jr. ..................... 0 1,971 1,971 -- .04% .04%
Revocable Trust
W. R. Stephens, Jr., Trustee
Elizabeth Ann Stephens................... 0 45,743 45,743 -- .87% .87%
Campbell Trust
Vernon J. Giss and
Ernest Butler, Jr., Trustees
Warren A. Stephens....................... 0 15,872 15,872 -- .30% .30%
Stephens Group, Inc. .................... 0 5,520 5,520 -- .10% .10%
------------ ------------ ------------ -------- -------- --------
Total................................ 209,984 652,156 862,140 3.99% 12.41% 16.40%
</TABLE>

45
<PAGE> 53

- ---------------

(1) Computed based on the maximum number of First United shares (985,849) to be
issued to InvestArk stockholders in connection with the merger, taking into
account cash payments for fractional shares.

(2) Computed based on 5,258,125 shares (4,272,276 shares currently outstanding
plus the maximum number of shares to be issued in the merger.)

(3) These shares will not be deposited in the Stephens Trust.

REGISTRATION RIGHTS

Pursuant to the Shareholders Agreement dated December 17, 1993 by and
between W. R. Stephens, The W. R. Stephens, Jr. Trust, The W. R. Stephens Trust,
Jackson T. Stephens, Warren A. Stephens and The Elizabeth Ann Stephens Trust
(the "Shareholders") and First United, the Shareholders, on or after the
effective date of the Merger, shall have three different types of registration
rights.

Demand Rights on Form Other Than S-3. The Shareholders have the right to
make two requests of First United to register under the Securities Act, in each
case, at least Five Million ($5,000,000) in market value of First United Common
Stock beneficially owned by the Shareholders. First United has agreed to use its
best reasonable efforts to register the shares as soon as practicable if a
request is made. However, First United will be entitled to postpone for a
reasonable period of time the registering of the Common Stock, if, in good
faith, the board of directors of First United determines it is advisable because
registering the Common Stock at such time would be materially detrimental to
First United. If the filing is delayed by 90 days First United shall obtain the
written opinion of a nationally recognized banking firm supporting the
determination to postpone the filing. If the Shareholders exercise their right
of demand, they shall pay all out-of-pocket expenses incurred in connection with
the registration of the securities, except for registration on Form S-3 as
discussed below.

Demand Rights on Form S-3. If a demand for registration is made in
accordance with the immediately preceding paragraph and such registration is
filed on Form S-3, the Shareholders shall pay all underwriting discounts and
commissions applicable to the First United Common Stock held by said
Shareholders, the fees and disbursements of their own counsel and accountants
and all other expenses associated with the offering of the Shareholder's stock.
If First United chooses to issue additional shares of common stock concurrently
with the registration of Shareholder's stock, it shall pay all underwriting
discounts and commissions applicable to the additional stock, the fees and
disbursements of its own counsel and accountants and its pro rata share of all
other expenses of the offering.

Piggy-Back Rights. If at any time First United proposes to register any of
its securities under the Securities Act of 1933, other than securities to be
issued pursuant to a stock option or other employee benefit plan, First United
has agreed to give written notice to the Shareholders of such a registration.
If, within five days after receipt of such notice, the Shareholders submit a
written request to First United, First United shall include the First United
Common Stock held by the Shareholders and specified in the Shareholder's request
in such a registration. Notwithstanding the foregoing, if the offering of the
Shareholder's securities is to be made by or through underwriters, First United
shall not be required to include the shares of First United Common Stock of the
Shareholders if the managing or co-managing underwriters reasonably believe in
good faith that such inclusion would materially and adversely affect such
offering. Under the right of "piggy-back" registration, First United shall pay
all expenses incurred in connection with registration of the securities.

COMPETITION

The banking subsidiaries of InvestArk compete actively with national and
state banks, savings and loan associations, securities dealers, mortgage
bankers, finance companies and insurance companies.

LITIGATION

There is no material pending litigation in which InvestArk or its
subsidiaries is a party.

46
<PAGE> 54

OFFICES

InvestArk's executive offices are located in the offices of First Stuttgart
Bank and Trust Company, Stuttgart, Arkansas, at 412 South Main Street,
Stuttgart, Arkansas 72021.

EMPLOYEES

As of December 31, 1993, InvestArk and its subsidiaries has 108 employees,
32 of whom are located in Melbourne and 76 of whom are located in Stuttgart.

DESCRIPTION OF INVESTARK STOCK

InvestArk has one class of common stock issued and outstanding. As of
December 31, 1993, InvestArk had 5,000,000 shares of authorized common stock,
$10.00 par value, and 215,960 shares issued and outstanding while 3,162 shares
are held in treasury. Currently, approximately 159 stockholders own shares of
the common stock of InvestArk.

<TABLE>
<CAPTION>
DIVIDENDS PAID PER SHARE
-------------------------
1991 1992 1993
----- ----- -----
<S> <C> <C> <C>
Common Stock................................ $0.75 $0.85 $1.05
</TABLE>

COMPARISON OF RIGHTS OF HOLDERS OF INVESTARK COMMON STOCK AND FIRST UNITED
COMMON STOCK

InvestArk is a corporation organized and existing under the laws of the
State of Arkansas, including the Arkansas Business Corporation Act of 1965.
First United is a corporation organized and existing under the laws of the State
of Arkansas, including the Arkansas Business Corporation Act of 1987. Holders of
InvestArk common stock have the rights, privileges and duties provided by the
1965 Act, while the holders of First United Common Stock have the rights,
privileges and duties provided by the 1987 Act. For a detailed discussion of all
material differences between the rights of security holders of InvestArk, and
the rights of security holders of First United, see "Election by InvestArk
Stockholders under the 1987 Act -- Result of Election".

The holders of InvestArk common stock and First United Common Stock are
both entitled to cumulative voting for directors. Pursuant to First United's
By-Laws, the number of directors of the corporation may not be less than three
nor more than twenty-five. The InvestArk By-Laws require that the number of
directors may not be less than three nor more than ten. Furthermore, holders of
InvestArk common stock and First United common stock do not have preemptive
rights with respect to issuance of additional securities.

Both InvestArk and First United have corporate power to indemnify their
officers and directors with respect to certain liabilities. Under the 1987 Act,
the ability to indemnify officers and directors with respect to liabilities
incurred by them in their conduct and good faith of the business of the
corporation is broader than under the 1965 Act. Such power is limited, however,
by applicable federal laws and regulations including federal banking laws and
regulations and the applicable state law.

First United's Articles of Incorporation contain a paragraph that may have
the effect of operating as an anti-takeover provision. Paragraph SEVENTH
contains a super-majority voting requirement of two-thirds ( 2/3) of all shares
issued and outstanding that are entitled to vote for approval of 1) a merger or
share exchange with another corporation unless such merger or share exchange can
be effected under the authority of state law without shareholder approval, 2) a
transaction to sell, exchange, lease or otherwise dispose of all, or
substantially all, of the corporation's assets and property except where
accomplished in the usual and regular course of business, 3) a transaction
effecting a dissolution or liquidation of the corporation, or 4) any amendment
of the Articles of Incorporation. The InvestArk Articles of Incorporation do not
contain a like provision. However, under the 1965 Act, InvestArk must have a
two-thirds ( 2/3) majority vote of all votes entitled to be cast to adopt a
merger.

47
<PAGE> 55

LEGAL MATTERS AND EXPERTS

LEGAL OPINIONS

The legality of the First United Common Stock to be issued after the Merger
has been consummated by and between First United and InvestArk will be passed
upon for First United by Ivester, Skinner & Camp, P.A., 111 Center Street, Suite
1200, Little Rock, Arkansas 72201. Certain tax matters relating to the Merger
will be passed upon by Shults, Ray & Kurrus, 200 West Capitol Avenue, Suite
1600, Little Rock, Arkansas 72201.

EXPERTS

The consolidated financial statements of First United Bancshares, Inc. as
of December 31, 1993 and 1992 and for each of the years in the three-year period
ended December 31, 1993 are incorporated by reference in this Proxy Statement
and have been audited by Arthur Andersen & Co., independent public accountants,
as indicated in their reports with respect thereto, and such consolidated
financial statements of First United have been incorporated by reference herein
in reliance upon the authority of said firm as experts in accounting and
auditing.

The consolidated financial statements of InvestArk Bankshares, Inc. as of
December 31, 1993, 1992 and 1991 have been audited by Martin and Company,
independent auditors, whose report thereon appear elsewhere herein and in the
Registration Statement and have been so included in reliance upon the report of
Martin and Company given upon their authority of said firm as experts in
accounting and auditing.

GENERAL

As of the date of this Proxy Statement, the board of directors of First
United or InvestArk does not intend to present, and has not been informed that
another person intends to present, any matter for action at either meeting of
stockholders other than as discussed in this Proxy Statement. If any other
matters properly come before the meeting, it is intended that the holders of the
proxies will act in accordance with their best judgment.

48
<PAGE> 56

INDEX TO INVESTARK FINANCIAL STATEMENTS

<TABLE>
<S> <C>
Financial Statements -- December 31, 1993, 1992 and 1991
Report of Independent Auditors...................................................... F-2
Consolidated Balance Sheets......................................................... F-3
Consolidated Statements of Income................................................... F-4
Consolidated Statements of Stockholders' Equity..................................... F-5
Consolidated Statements of Cash Flows............................................... F-6
Notes to Financial Statements....................................................... F-7
</TABLE>

F-1
<PAGE> 57

INDEPENDENT AUDITOR'S REPORT

The Board of Directors
Investark Bankshares, Inc.
Stuttgart, Arkansas

We have audited the consolidated balance sheets of Investark Bankshares,
Inc. and subsidiaries at December 31, 1993 and 1992, and the related
consolidated statements of income, stockholders' equity, and cash flows for each
of the years in the three year period ended December 31, 1993. These financial
statements are the responsibility of the Company's management. Our
responsibility is to express an opinion on these financial statements based on
our audits.

We conducted our audits in accordance with generally accepted auditing
standards. Those standards require that we plan and perform the audit to obtain
reasonable assurance about whether the financial statements are free of material
misstatement. An audit includes examining, on a test basis, evidence supporting
the amounts and disclosures in the financial statements. An audit also includes
assessing the accounting principles used and significant estimates made by
management, as well as evaluating the overall financial statement presentation.
We believe that our audits provide a reasonable basis for our opinion.

In our opinion, the financial statements referred to above present fairly,
in all material respects, the consolidated financial position of Investark
Bankshares, Inc. and subsidiaries, at December 31, 1993 and 1992, and the
consolidated results of their operations and their cash flows for each of the
years in the three year period ended December 31, 1993, in conformity with
generally accepted accounting principles.

Martin & Company
Certified Public Accountants

January 28, 1994

F-2
<PAGE> 58

INVESTARK BANKSHARES, INC.

CONSOLIDATED BALANCE SHEETS
DECEMBER 31, 1993 AND 1992

ASSETS

<TABLE>
<CAPTION>
1993 1992
------------ ------------
<S> <C> <C>
Cash and due from banks......................................... $ 7,214,200 $ 12,938,041
Interest bearing deposits with other Banks...................... 1,180,607 1,744,435
Federal funds sold.............................................. 425,000
Investment securities -- at amortized cost (approximate fair
value of $90,264,913 and $85,407,531 at December 31, 1993 and
1992, respectively)........................................... 87,863,744 82,461,782
Loans........................................................... 84,524,871 87,025,647
Less: Unearned interest....................................... (29,095) (46,944)
Allowance for loan losses............................... (1,493,554) (1,073,186)
------------ ------------
83,002,222 85,905,517
------------ ------------
Premises and equipment, less allowance for depreciation......... 2,721,970 2,956,535
Accrued interest receivable and other assets.................... 2,921,623 4,508,206
------------ ------------
$184,904,366 $190,939,516
------------ ------------
------------ ------------
LIABILITIES AND STOCKHOLDERS' EQUITY
Deposits:
Demand........................................................ $ 26,951,112 $ 26,677,868
Savings and interest-bearing demand........................... 63,458,333 62,423,952
Time deposits................................................. 72,890,494 81,000,303
------------ ------------
163,299,939 170,102,123
------------ ------------
Borrowed funds.................................................. 3,911,988 4,215,540
Accrued interest payable and other liabilities.................. 812,027 745,669
Minority interest in subsidiaries............................... 15,100 56,078
------------ ------------
Total liabilities............................................... 168,039,054 175,119,410
------------ ------------
Commitments and contingencies (Note 11)
Stockholders' equity:
Common stock, $10 par value; 5,000,000 shares authorized,
219,122 shares issued, 215,960 and 215,356 shares
outstanding................................................ 2,191,220 2,191,220
Surplus....................................................... 1,105,133 1,098,929
Retained earnings............................................. 13,719,965 12,690,099
Less: Treasury stock, 3,162 and 3,766 shares at cost.......... (129,964) (157,144)
Net unrealized loss on marketable equity securities...... (21,042) (2,998)
------------ ------------
Total stockholders' equity...................................... 16,865,312 15,820,106
------------ ------------
$184,904,366 $190,939,516
------------ ------------
------------ ------------
</TABLE>

The accompanying notes are an integral part of these financial statements.

F-3
<PAGE> 59

INVESTARK BANKSHARES, INC.

CONSOLIDATED STATEMENTS OF INCOME
YEARS ENDED DECEMBER 31, 1993, 1992 AND 1991

<TABLE>
<CAPTION>
1993 1992 1991
---------- ---------- ----------
<S> <C> <C> <C>
Interest income:
Loans, including fees................................. $6,577,419 $7,873,808 $9,240,762
U. S. Government obligations.......................... 852,087 864,223 658,113
Obligations of federal agencies and corporations...... 2,116,520 2,194,579 2,156,191
Obligations of states and political subdivisions...... 1,433,853 1,322,492 1,120,763
Other securities...................................... 1,553,915 1,867,193 2,633,943
Federal funds sold and securities purchased under
resell agreements.................................. 20,930 65,979 150,115
---------- ---------- ----------
12,554,724 14,188,274 15,959,887
---------- ---------- ----------
Interest expense:
Deposits.............................................. 4,921,914 6,163,074 8,714,734
Borrowed funds........................................ 123,246 206,159 467,660
---------- ---------- ----------
5,045,160 6,369,233 9,182,394
---------- ---------- ----------
Net interest income..................................... 7,509,564 7,819,041 6,777,493
Provision for credit losses............................. 600,000 64,491 1,463,398
---------- ---------- ----------
Net interest income after provision for credit losses... 6,909,564 7,754,550 5,314,095
---------- ---------- ----------
Noninterest income:
Trust department fees................................. 515,135 488,510 469,848
Service charges -- deposits........................... 347,725 380,190 397,121
Other service charges and fees........................ 90,000 67,676 81,570
Other................................................. 555,787 567,535 666,435
---------- ---------- ----------
1,508,647 1,503,911 1,614,974
---------- ---------- ----------
Noninterest expense:
Salaries.............................................. 2,188,969 2,088,131 2,039,672
Employee benefits..................................... 757,828 453,918 411,830
Net occupancy......................................... 427,220 422,272 460,821
Equipment............................................. 453,475 432,458 369,521
Other................................................. 3,160,034 3,119,775 2,608,291
---------- ---------- ----------
6,987,526 6,516,554 5,890,135
---------- ---------- ----------
Income before income taxes and minority interest in net
earnings of consolidated subsidiaries................. 1,430,685 2,741,907 1,038,934
Provision for income taxes.............................. 147,753 500,721 128,271
---------- ---------- ----------
Income before minority interest in net earnings of
consolidated subsidiaries............................. 1,282,932 2,241,186 910,663
Minority interest in net earnings of consolidated
subsidiaries.......................................... 5,106 7,964 4,097
---------- ---------- ----------
Net income.............................................. $1,277,826 $2,233,222 $ 906,566
---------- ---------- ----------
---------- ---------- ----------
Net income per share.................................... $ 5.93 $ 10.33 $ 4.19
---------- ---------- ----------
---------- ---------- ----------
Average number of shares outstanding during the year.... 215,450 216,235 216,212
---------- ---------- ----------
---------- ---------- ----------
</TABLE>

The accompanying notes are an integral part of these financial statements.

F-4
<PAGE> 60

INVESTARK BANKSHARES, INC.

CONSOLIDATED STATEMENTS OF STOCKHOLDERS' EQUITY
YEARS ENDED DECEMBER 31, 1993, 1992 AND 1991

<TABLE>
<CAPTION>
ALLOWANCE FOR
COMMON STOCK UNREALIZED LOSSES
------------------- RETAINED TREASURY ON MARKETABLE
SHARES AMOUNT SURPLUS EARNINGS STOCK EQUITY SECURITIES TOTAL
------- ---------- ---------- ----------- --------- ----------------- -----------
<S> <C> <C> <C> <C> <C> <C> <C>
Balance -- December 31, 1990...... 219,122 $2,191,220 $1,098,929 $ 9,949,919 $(118,624) $ (19,589) $13,101,855
Net income...................... 906,566 906,566
Cash dividends $.90 per share... (194,566) (194,566)
Sale of marketable equity
securities................... 19,589 19,589
------- ---------- ---------- ----------- --------- ----------------- -----------
Balance -- December 31, 1991...... 219,122 2,191,220 1,098,929 10,661,919 (118,624) 0 13,833,444
Net income...................... 2,233,222 2,233,222
Cash dividends $.95 per share... (205,042) (205,042)
Increase in unrealized loss on
marketable equity
securities................... (2,998) (2,998)
Purchase 856 common shares...... (38,520) (38,520)
------- ---------- ---------- ----------- --------- ----------------- -----------
Balance -- December 31, 1992...... 219,122 2,191,220 1,098,929 12,690,099 (157,144) (2,998) 15,820,106
Net income...................... 1,277,826 1,277,826
Cash dividends
$1.15 per share.............. (247,960) (247,960)
Increase in unrealized loss of
marketable equity
securities................... (18,044) (18,044)
Sale of 604 common shares....... 6,204 27,180 33,384
------- ---------- ---------- ----------- --------- ----------------- -----------
Balance -- December 31, 1993...... 219,122 $2,191,220 $1,105,133 $13,719,965 $(129,964) $ (21,042) $16,865,312
------- ---------- ---------- ----------- --------- ----------------- -----------
------- ---------- ---------- ----------- --------- ----------------- -----------
</TABLE>

The accompanying notes are an integral part of these financial statements.

F-5
<PAGE> 61

INVESTARK BANKSHARES, INC.

CONSOLIDATED STATEMENTS OF CASH FLOWS
YEARS ENDED DECEMBER 31, 1993, 1992 AND 1991

<TABLE>
<CAPTION>
1993 1992 1991
----------- ----------- -----------
<S> <C> <C> <C>
Operating activities:
Net income...................................... $ 1,277,826 $ 2,233,222 $ 906,566
----------- ----------- -----------
Adjustments to reconcile net income to net cash
provided by operating activities:
Provision for credit losses.................. 600,000 64,491 1,463,398
Depreciation................................. 552,153 529,097 467,406
Writedown of other real estate and leased
equipment.................................. 205,927 454,170 364,236
Net amortization (accretion) of investment
security premiums (discounts).............. 22,144 (3,344) (135,264)
Net gain on disposition of investment
securities................................. (75,609) (15,771) (404,126)
Deferred income tax benefit.................. (278,044) (6,315) (61,466)
Minority interest in subsidiaries'
undistributed
income..................................... 5,106 7,964 4,097
(Increase) decrease in interest receivable
and other assets........................... 415,887 687,464 (2,263,412)
Increase (decrease) in interest payable and
other liabilities.......................... 20,275 (784,344) (334,609)
----------- ----------- -----------
Total adjustments....................... 1,467,839 933,412 (899,740)
----------- ----------- -----------
Net cash provided by operating activities......... 2,745,665 3,166,634 6,826
----------- ----------- -----------
Cash flows from investing activities:
Proceeds from maturities of CD's -- other
banks........................................ 1,060,178 291,342 2,551,737
Purchase of CD's -- other banks................. (496,000)
Proceeds from disposition of investment
securities................................... 29,638,082 20,440,815 22,433,415
Purchase of investment securities............... (35,004,973) (30,646,818) (19,103,182)
Net (increase) decrease in loans................ 2,303,295 775,175 (908,807)
Proceeds from sale of equipment and other
real estate.................................. 1,291,285 1,104,105 209,686
Purchase of premises and equipment.............. (366,061) (236,121) (640,334)
----------- ----------- -----------
Net cash provided (used) by investing
activities...................................... (1,574,194) (8,271,502) 4,542,515
----------- ----------- -----------
Cash flows from financing activities:
Net increase in demand deposits, NOW and savings
deposits..................................... 1,307,625 6,866,620 2,681,621
Net increase (decrease) in time deposits........ (8,109,809) (2,836,351) 3,454,392
Proceeds of long-term debt...................... 860,764
Repayment of borrowings......................... (851,034) (369,699)
Increase (decrease) in short-term borrowings.... (313,282) (3,365,602) 116,641
Payment on capital notes........................ (300,000) (30,000)
Purchase of Treasury Stock...................... (38,520)
Proceeds from sale of treasury stock............ 33,384
Cash dividends.................................. (247,960) (205,042) (194,566)
----------- ----------- -----------
Net cash provided (used) by financing
activities...................................... (7,320,312) (248,594) 6,028,088
----------- ----------- -----------
Net increase (decrease) in cash and equivalents... (6,148,841) (5,353,462) 10,577,429
Cash and cash equivalents at beginning of year.... 13,363,041 18,716,503 8,139,074
----------- ----------- -----------
Cash and cash equivalents at end of year.......... $ 7,214,200 $13,363,041 $18,716,503
----------- ----------- -----------
----------- ----------- -----------
</TABLE>

The accompanying notes are an integral part of these financial statements.

F-6
<PAGE> 62

INVESTARK BANKSHARES, INC.

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

NOTE 1: SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES

The accounting principles and reporting policies followed by Investark
Bankshares, Inc. and its subsidiaries (the "Company") conform with generally
accepted accounting principles and with general practices within the financial
services industry. The following is a description of the more significant of
these policies:

Principles of consolidation

The consolidated financial statements include the accounts of the Company
and its subsidiaries, First Stuttgart Bank and Trust Company (formerly First
National Bank in Stuttgart), Stuttgart, Arkansas (100% owned) and of The Bank of
North Arkansas, Melbourne, Arkansas (99.7% owned). All significant intercompany
balances and transactions have been eliminated.

Cash flows

For purposes of reporting cash flows, cash and cash equivalents include
cash and due from banks, and federal funds sold.

Investment securities

Investment securities, except for investments in mutual funds, are stated
at cost adjusted for amortization of premiums and accretion of discounts.
Investments in mutual funds are carried at the lower of cost or market. Gains
and losses on the sale of investment securities are computed using the specific
identification method.

Allowance for loan losses

The allowance for loan losses is established through charges to expense and
is maintained at a level which, in management's judgement, is necessary to
provide for future losses from the current portfolios. This judgement is based
on analysis of the current and expected economic conditions, risk
characteristics of the loan portfolios and prior loan loss experience in
relation to loans outstanding.

Interest on loans

Interest on installment loans is recognized as income over the lives of the
loans by the sum-of-the-months-digits and simple interest methods. The results
of using the sum-of-the-months-digits method do not differ materially from those
obtained by using the interest method. Interest on other loans is recognized
based on the principal amounts outstanding. The accrual of interest on loans is
discontinued when, in the opinion of management, there is doubt as to the
ability of the borrower to pay interest or principal. The balances of non-
accrual loans were $474,067 and $446,379 at December 31, 1993 and 1992. Interest
previously accrued but uncollected on these loans was $148,031 and $51,142 at
December 31, 1993 and 1992.

Premises and equipment

Premises and equipment are stated at cost, less accumulated depreciation.
Depreciation is computed principally by the straight-line method.

Real estate owned other than premises

Real estate owned other than premises consists primarily of property
acquired in settlement of loans These properties are initially recorded at the
lower of cost or fair value as determined by appraisal at the date acquired.
Losses arising from such acquisitions are charged to the allowance for loan
losses. Carrying values are subsequently reduced through a charge to operations
when current appraisals indicate a decline in value.

F-7
<PAGE> 63

INVESTARK BANKSHARES, INC.

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS -- (CONTINUED)

Fair value is based on the estimated net amount realizable on disposition of the
property. Amounts included in other assets at December 31, 1993 and 1992, were
$142,874 and $1,241,534, respectively.

Income taxes

Provisions for income taxes are based on amounts reported in the statements
of income (after exclusion of non-taxable income such as interest on state and
municipal securities) and include deferred taxes on temporary differences in the
recognition of income and expense for tax and financial statement purposes.
Deferred taxes are computed using the liability method as prescribed in SFAS No.
109, "Accounting for Income Taxes."

Off-balance-sheet financial instruments

In the ordinary course of business the Company has entered into
off-balance-sheet financial instruments consisting of commitments to extend
credit, commitments under credit card arrangements, commercial letters of credit
and standby letters of credit. Such financial instruments are recorded in the
financial statements when they become payable.

Trust Department assets

In accordance with the usual practice of banks, property other than cash
deposits held by the Company's subsidiary bank's Trust Department in a fiduciary
or agency capacity for customers, is not included in the consolidated financial
statements.

Reclassification

Certain 1992 amounts have been reclassified to conform with the 1993
presentation.

NOTE 2: INVESTMENT SECURITIES

The book and approximate fair values of investment securities are
summarized as follows:

<TABLE>
<CAPTION>
DECEMBER 31, 1993
------------------------------------------------------
BOOK UNREALIZED UNREALIZED APPROXIMATE
VALUE GAINS LOSSES FAIR VALUE
----------- ---------- ---------- -----------
<S> <C> <C> <C> <C>
U. S. Government........................... $18,030,129 $ 555,924 $ (15,504) $18,570,549
Federal agencies and corporations.......... 23,773,613 236,020 (58,853) 23,950,780
States and political subdivisions.......... 24,699,566 1,138,754 (52,828) 25,785,492
Other securities........................... 7,900,568 311,839 (5,043) 8,207,364
Mortgage-backed securities................. 10,074,910 335,498 (23,596) 10,386,812
----------- ---------- ---------- -----------
Total debt securities...................... 84,478,786 2,578,035 (155,824) 86,900,997
Federal Reserve Bank stock and other equity
securities............................... 3,384,958 (21,042) 3,363,916
----------- ---------- ---------- -----------
$87,863,744 $2,578,035 $ (176,866) $90,264,913
----------- ---------- ---------- -----------
----------- ---------- ---------- -----------
</TABLE>

F-8
<PAGE> 64

INVESTARK BANKSHARES, INC.

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS -- (CONTINUED)

<TABLE>
<CAPTION>
DECEMBER 31, 1992
------------------------------------------------------
BOOK UNREALIZED UNREALIZED APPROXIMATE
VALUE GAINS LOSSES FAIR VALUE
----------- ---------- ---------- -----------
<S> <C> <C> <C> <C>
U. S. Government........................... $14,742,329 $ 495,362 $ (4,973) $15,232,718
Federal agencies and corporations.......... 20,335,711 411,055 (98,673) 20,648,093
States and political subdivisions.......... 18,440,150 719,055 (39,473) 19,119,732
Other securities........................... 16,612,521 1,065,524 (18,474) 17,659,571
Mortgage-backed securities................. 11,872,671 456,403 (37,059) 12,292,015
----------- ---------- ---------- -----------
Total debt securities...................... 82,003,382 3,147,399 (198,652) 84,952,129
Federal Reserve Bank stock and other equity
securities............................... 458,400 (2,998) 455,402
----------- ---------- ---------- -----------
$82,461,782 $3,147,399 $ (201,650) $85,407,531
----------- ---------- ---------- -----------
----------- ---------- ---------- -----------
</TABLE>

The book and approximate fair values of investment securities at December
31, 1993 and 1992, by contractual maturity, are shown below. Actual maturities
may differ from contractual maturities due to the existence of call or
prepayment options.

<TABLE>
<CAPTION>
DECEMBER 31, 1993 DECEMBER 31, 1992
---------------------------- ----------------------------
APPROXIMATE APPROXIMATE
BOOK VALUE FAIR VALUE BOOK VALUE FAIR VALUE
------------ ------------ ------------ ------------
<S> <C> <C> <C> <C>
Due in one year or less............... $11,883,780 $12,063,150 $14,794,911 $15,008,930
Due after one year through five
years............................... 49,692,189 50,900,606 37,230,012 38,798,851
Due after five years through ten
years............................... 9,671,306 10,142,426 13,483,007 13,984,579
Due after ten years................... 3,156,601 3,408,003 4,622,783 4,867,753
Mortgage-backed securities............ 10,074,910 10,386,812 11,872,669 12,292,016
------------ ------------ ------------ ------------
Total debt securities................. 84,478,786 86,900,997 82,003,382 84,952,129
Equity securities..................... 3,384,958 3,363,916 458,400 455,402
------------ ------------ ------------ ------------
$87,863,744 $90,264,913 $82,461,782 $85,407,531
------------ ------------ ------------ ------------
------------ ------------ ------------ ------------
</TABLE>

Proceeds from disposition of investment securities during 1993 and 1992
were as follows:

<TABLE>
<CAPTION>
1993 1992
----------- -----------
<S> <C> <C>
Proceeds from disposition (primarily maturities and
calls).................................................. $29,638,082 $20,440,815
Realized gains on disposition............................. 76,826 21,773
Realized losses on disposition............................ 1,217 6,002
</TABLE>

The Company has the intent and ability to hold securities which may have
book values greater than fair values to their maturity date.

Investment securities with carrying amounts of $31,289,667 and $34,330,551
at December 31, 1993 and 1992, respectively, were pledged to secure public
deposits and for other purposes required or permitted by law.

F-9
<PAGE> 65

INVESTARK BANKSHARES, INC.

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS -- (CONTINUED)

NOTE 3: LOANS

Major classifications of loans are as follows:

<TABLE>
<CAPTION>
DECEMBER DECEMBER
31, 31,
1993 1992
---------- ----------
<S> <C> <C>
Real estate................................................ $37,955,597 $35,492,564
Agricultural production.................................... 14,099,782 12,467,213
Commercial................................................. 19,800,236 24,262,093
Loans to individuals....................................... 11,318,623 12,420,292
Other (including overdrafts)............................... 1,350,633 2,383,485
----------- -----------
84,524,871 87,025,647
Less: unearned interest.................................... 29,095 46,944
----------- -----------
Net loans.................................................. 84,495,776 86,978,703
Less: allowance for possible loan losses................... 1,493,554 1,073,186
----------- -----------
$83,002,222 $85,905,517
----------- -----------
----------- -----------
</TABLE>

The Company's subsidiary banks grant agribusiness, commercial and other
loans throughout their market areas. Although they have diversified loan
portfolios, a substantial portion of their borrowers' ability to honor their
contracts is dependent upon the agribusiness economic sector.

NOTE 4: ALLOWANCE FOR POSSIBLE LOAN LOSSES

Changes in the allowance for possible loan losses were as follows:

<TABLE>
<CAPTION>
1993 1992
--------- ---------
<S> <C> <C>
Balance -- Beginning of year................................. $1,073,186 $1,184,181
Provision charged to operations.............................. 600,000 64,491
Recoveries................................................... 75,719 175,998
Loans charged-off............................................ (255,351) (351,484)
---------- ----------
Balance -- End of year....................................... $1,493,554 $1,073,186
---------- ----------
---------- ----------
</TABLE>

NOTE 5: PREMISES AND EQUIPMENT

Major classifications of these assets are summarized as follows:

<TABLE>
<CAPTION>
USEFUL LIVES
------------
1993 1992 (YEARS)
--------- --------- ------------
<S> <C> <C> <C>
Land............................................. $ 619,437 $ 627,937
Buildings and improvements....................... 3,243,733 3,696,562 5-40
Furniture and equipment.......................... 2,250,439 3,219,031 3-15
--------- ---------
6,113,609 7,543,530
Less: allowance for depreciation................. 3,391,639 4,586,995
--------- ---------
$2,721,970 $2,956,535
--------- ---------
--------- ---------
</TABLE>

Depreciation expense was $552,153, $529,097 and $467,406 in 1993, 1992 and
1991, respectively.

F-10
<PAGE> 66

INVESTARK BANKSHARES, INC.

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS -- (CONTINUED)

NOTE 6: LEASES

First Stuttgart Bank is lessor of computer equipment under operating leases
which expire during 1994. Minimum future rental payments receivable under these
noncancellable leases are:

The lessees are to provide all maintenance to the equipment under the terms
of the leases.

NOTE 7: INCOME TAXES

The income tax provision, including taxes on securities gains and losses
consists of the following:

<TABLE>
<CAPTION>
1993 1992 1991
--------- -------- --------
<S> <C> <C> <C>
Federal income tax
Currently payable................................ $ 425,797 $507,036 $189,737
Deferred......................................... (278,044) (6,315) (61,466)
--------- -------- --------
$ 147,753 $500,721 $128,271
--------- -------- --------
--------- -------- --------
</TABLE>

The tax effect of the temporary differences which comprise deferred income
taxes are as follows:

<TABLE>
<CAPTION>
1993 1992 1991
--------- -------- --------
<S> <C> <C> <C>
Temporary differences in tax and book
reporting of bad debts...................... $(195,799)
Temporary differences in tax and book
reporting of security transactions.......... (917) $ (8,868) $(15,632)
Depreciation expense different for tax and
book purposes............................... (61,201) 6,706 30,049
Temporary differences in tax and book
reporting for other real estate
transactions................................ 11,450 (10,957) (75,883)
Effect of recognizing loss on pension plan
curtailment................................. (73,100)
Other -- net.................................. 41,523 6,804
--------- -------- --------
$(278,044) $ (6,315) $(61,466)
--------- -------- --------
--------- -------- --------
</TABLE>

The income tax provision differs from the statutory rate primarily because
of the income tax treatment of exempt income and provision for loan losses and
use of alternative minimum tax credits.

NOTE 8: EMPLOYEE BENEFIT PLANS

First Stuttgart Bank has a defined benefit pension plan which covers
substantially all its employees. The benefits are based on years of service and
the employee's compensation during the last five years of employment. The
funding policy is to contribute annually an amount that does not exceed the
maximum amount deductible for federal income tax purposes. Contributions are
intended to provide not only for benefits attributed to service to date but also
for those expected to be earned in the future.

F-11
<PAGE> 67

INVESTARK BANKSHARES, INC.

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS -- (CONTINUED)

The following tables set forth the plan's funded status and amounts
recognized in the Bank's balance sheet at December 31, 1993 and 1992 (amounts in
thousands):

<TABLE>
<CAPTION>
1993 1992
------ ------
<S> <C> <C>
Actuarial present value of benefit obligations:
Accumulated benefit obligation, including vested benefits of
$860 and $770............................................... $ 879 $ 781
------ ------
------ ------
Projected benefit obligation for service rendered to date...... $1,071 $ 957
Plan assets at fair value...................................... 1,117 1,008
------ ------
Plan assets in excess of projected benefit obligation.......... 46 51
Unrecognized prior service cost................................ (27) (28)
Unrecognized net obligation at January 1, 1993 and 1992, being
recognized over 22 years.................................... (42) (45)
Unrecognized net loss.......................................... 116 110
------ ------
Prepaid pension cost........................................... $ 93 $ 88
------ ------
------ ------
</TABLE>

Net pension cost for 1993, 1992 and 1991 included the following components:

<TABLE>
<CAPTION>
1993 1992 1991
---- ---- ----
<S> <C> <C> <C>
Service costs-benefits earned during the period........... $ 55 $ 55 $ 59
Interest cost on projected benefit obligation............. 67 59 53
Expected return on plan assets............................ (71) (63) (60)
Amortization of:
Prior service cost...................................... (1) (1) (1)
Unrecognized net obligation existing at January 1, 1993,
1992 and 1991........................................ (3) (3) (3)
Gain.................................................... 1 2 5
---- ---- ----
Net pension cost.......................................... $ 48 $ 49 $ 53
---- ---- ----
---- ---- ----
</TABLE>

The weighted-average discount rate and the rate of increase in future
compensation levels used in determining the actuarial present value of the
projected benefit obligation were 7.0% and 4.5% respectively. The expected
long-term rate of return on assets was 7.0%.

In connection with the merger with First United Bancshares, First Stuttgart
Bank is to terminate its defined benefit plan during 1994. Under generally
accepted accounting principles, if the net effect of the termination is a loss,
it should be recognized when the termination is probable and the effects are
reasonably estimable. Accordingly, a loss of $215,000 on the termination of this
plan is included in the accompanying 1993 statement of income.

The Bank of North Arkansas has a defined contribution employee benefit
plan, qualified under IRC Section 401(k) that covers all employees, with the
exception of employees who are highly compensated. Contributions to the plan are
based on the total amount of salary reduction the employee elects to defer, a
discretionary matching contribution equal to a percentage of the amount the
employee elects to defer, which percentage will be determined each year by the
employer, and a discretionary amount determined each year by the employer. To
share in the matching and discretionary contribution, the employee must complete
a year of service and be actively employed on the last day of the Plan Year. The
amount of pension expense was $13,345 and $15,606 for 1993 and 1992,
respectively.

F-12
<PAGE> 68

INVESTARK BANKSHARES, INC.

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS -- (CONTINUED)

NOTE 9: DISCLOSURES ABOUT FAIR VALUE OF FINANCIAL INSTRUMENTS

The following methods and assumptions were used to estimate the fair value
of each class of financial instruments for which it is practicable to estimate
that value:

Cash and due from banks and short-term investments:
For these short-term items, the carrying amount is a reasonable estimate of
fair value.

Investment securities:
Fair values are based on quoted market prices, if available. If a quoted
market price is not available, fair value is estimated using quoted market
prices for similar securities.

Loans:
The fair value of loans is estimated by discounting the expected future
cash flows using current rates at which similar loans would be made to
borrowers with similar credit ratings and for similar remaining maturities.

Deposit liabilities:
The fair value of demand deposits, savings accounts and certain money
market deposits is the amount payable on demand at the reporting date. The
fair value of fixed-maturity certificates of deposit is estimated using the
rates currently offered for deposits with similar remaining maturities.

Borrowed funds:
For borrowings with fixed interest rates, fair value is estimated using the
rates currently available to the Company's subsidiary banks for debt with
similar terms and remaining maturities. For floating rate debt the fair
value approximates the recorded liability.

Commitments to extend credit and letters of credit:
The fair value of commitments is estimated using the fees currently charged
to enter into similar arrangements, taking into account the remaining terms
of the agreements and the present creditworthiness of the counterparties.
For fixed rate loan commitments, fair value also considers the difference
between current levels of interest rates and committed rates. The fair
value of letters of credit is based on the fees currently charged for
similar agreements or on the estimated cost to terminate them or otherwise
settle the obligations with the counterparties at the reporting date.

F-13
<PAGE> 69

INVESTARK BANKSHARES, INC.

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS -- (CONTINUED)

The estimated fair values of the Company's financial instruments at
December 31, 1993 and 1992 are as follows (amounts in thousands):

<TABLE>
<CAPTION>
1993 1992
--------------------- ---------------------
CARRYING FAIR CARRYING FAIR
VALUE VALUE VALUE VALUE
-------- -------- -------- --------
<S> <C> <C> <C> <C>
Financial assets:
Cash and equivalents.......................... $ 7,214 $ 7,214 $ 13,363 $ 13,363
Short-term investments........................ 1,181 1,181 1,744 1,744
Investment securities......................... 87,864 90,286 82,461 85,410
Loans......................................... 84,496 84,682 86,979 88,730
Less: allowance for loan losses............... (1,494) (1,494) (1,073) (1,073)
-------- -------- -------- --------
Net loans..................................... $ 83,002 $ 83,188 $ 85,906 $ 87,657
-------- -------- -------- --------
-------- -------- -------- --------
Financial liabilities:
Deposits...................................... $163,300 $163,648 $170,102 $107,706
Borrowed funds................................ 3,912 3,912 4,216 4,216
Off-balance-sheet instruments:
Commitments to extend credit.................. 21,637 21,637 18,375 18,375
Letters of credit............................. 647 647 472 472
</TABLE>

NOTE 10: NOTES PAYABLE

Borrowed funds at December 31, 1993 and 1992 include the following:

<TABLE>
<CAPTION>
1993 1992
-------- --------
<S> <C> <C>
Note payable, 5.5% interest, due monthly through May 2003,
secured by pledge of assets.................................. $320,133
Note payable, 4.4% interest, due monthly through May 1998,
secured by pledge of assets.................................. 189,597
Note payable, 6% interest, due in annual installments of
$190,000 plus interest through 1998, secured by 79,762 shares
of stock of The Bank of North Arkansas....................... $500,000
-------- --------
$509,730 $500,000
-------- --------
-------- --------
</TABLE>

Scheduled maturities after December 31, 1993 are as follows:

<TABLE>
<CAPTION>
YEAR ENDED
DECEMBER
31, AMOUNT
- ----------- --------
<S> <C>
1994............................................... $ 66,396
1995............................................... 69,698
1996............................................... 73,166
1997............................................... 76,809
1998............................................... 52,731
After 1998......................................... 170,930
--------
$509,730
--------
--------
</TABLE>

F-14
<PAGE> 70

INVESTARK BANKSHARES, INC.

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS -- (CONTINUED)

NOTE 11: COMMITMENTS AND CONTINGENCIES

The consolidated financial statements do not reflect various commitments
and contingent liabilities which arise in the normal course of the Company's
business and which involve elements of credit risk, interest rate risk and
liquidity risk. These commitments and contingent liabilities consist of
commitments to extend credit and letters of credit. A summary of the commitments
and contingent liabilities at December 31, 1993 and 1992 are summarized below:

<TABLE>
<CAPTION>
1993 1992
---------- ----------
<S> <C> <C>
Commitments to extend credit............................... $18,411,675 $15,725,759
Credit card arrangements................................... 3,225,782 2,648,940
Letters of credit.......................................... 646,938 472,038
----------- -----------
$22,284,395 $18,846,737
----------- -----------
----------- -----------
</TABLE>

Commitments to extend credit, credit card arrangements and letters of
credit all include some exposure to credit loss in the event of nonperformance
of the customer. The Company's credit policies and procedures for credit
commitments and financial guarantees are the same as those for extensions of
credit that are recorded in the consolidated financial statements. Because these
instruments have fixed maturity dates, and because many of them expire without
being drawn upon, they do not generally present any significant liquidity risk
to the Company.

In the ordinary course of business, there are various legal proceedings
involving the Company and its subsidiaries, most of which are considered
litigation incidental to the conduct of business. These proceedings include,
among other matters, defense of routine corporate, employment, banking and
lender liability related litigation. Management, after consulting with legal
counsel and based on the facts available and proceedings to date, some of which
are preliminary, is of the opinion that the ultimate resolution of these
proceedings will not have a material adverse effect on the consolidated
financial position of the Company.

NOTE 12: CONCENTRATIONS OF CREDIT

Substantially all of the Company's loans, commitments to loan and letters
of credit have been granted to customers in their trade area who are also
depositors of the Company. The concentrations of credit by type of loan are set
forth in Note 3. The distribution of commitments to extend credit approximates
the distribution of loans outstanding.

NOTE 13: DIVIDEND RESTRICTIONS

As State Banks, First Stuttgart Bank and The Bank of North Arkansas are
each restricted in the amount of dividends they may pay in any year without
prior permission from the Arkansas Bank Commissioner to fifty percent of its net
income for the year. The Banks' ability to pay dividends is also restricted by
the minimum capital requirement of their regulatory agencies which require them
to maintain at least an 8.25% risk-based capital ratio.

NOTE 14: RELATED PARTY TRANSACTIONS

Some of the directors and executive officers and the companies in which
they had a significant interest were customers of and had transactions with the
Company's subsidiary banks. Such transactions were made in the ordinary course
of the Banks' business on substantially the same terms and conditions, including
interest rates and collateral, as those prevailing at the same time for
comparable transactions with other customers and did not, in the opinion of
management, involve more than a normal credit risk or present other unfavorable
features. The aggregate amount of loans to such related parties amounted to
$2,212,481 and $3,345,252 at

F-15
<PAGE> 71

INVESTARK BANKSHARES, INC.

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS -- (CONTINUED)

December 31, 1993 and 1992, respectively. Transactions during 1993 included new
loans amounting to $2,459,497 and repayments amounting to $3,592,268.

NOTE 15: SUPPLEMENTAL CASH FLOW INFORMATION

The Company paid $5,166,679 and $7,031,918 in interest on deposits and
other borrowings during 1993 and 1992, respectively, and income taxes of
$289,000 and $470,000 for 1993 and 1992.

NOTE 16: PENDING MERGER

On December 17, 1993 the Company entered into an agreement to merge with
First United Bancshares, Inc. of El Dorado, Arkansas. Under the terms of this
agreement First United would acquire all of the outstanding stock of Investark
Bankshares, Inc. through issuance of First United common stock valued at
approximately $26,125,000. This transaction is expected to be consummated in the
first half of 1994.

NOTE 17: EFFECTS OF RECENTLY ADOPTED ACCOUNTING STANDARDS

During 1993, the Financial Accounting Standards Board (FASB) issued SFAS
No. 114 (Accounting by Creditors for Impairment of a Loan) which becomes
effective beginning in 1995. This statement requires that impaired loans that
are within the scope of the Statement essentially be measured based on the
present value of expected future cash flows discounted at the loan's effective
rate, or as a practical expedient, at the loan's observable market price or the
fair value of the collateral if the loan is collateral dependent. Management has
not determined the effect this statement will have when adopted.

In 1993, the Financial Accounting Standards Board (FASB) issued SFAS No.
115, (Accounting for Certain Investments in Debt and Equity Securities), that
becomes effective for fiscal years beginning after 1993. This Statement
addresses the accounting and reporting for investments in debt and certain
equity securities. Debt securities not classified as trading account securities
or investment securities expected to be held to maturity and all equity
securities will be classified as available for sale and are reported at fair
value, with net unrealized gains and losses reported, net of tax, as a separate
component of stockholders' equity. InvestArk will apply the new rules starting
in the first quarter of 1994 and believes the impact of adopting this statement
will not be material to its financial position or results of operations.

F-16
<PAGE> 72

INVESTARK BANKSHARES, INC.

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS -- (CONTINUED)

NOTE 18: CONDENSED FINANCIAL INFORMATION OF PARENT COMPANY

The financial position of Investark Bankshares, Inc. (parent company only),
its results of operations and cash flows are summarized as follows:

<TABLE>
<CAPTION>
DECEMBER 31,
--------------------------
1993 1992
---------- ----------
<S> <C> <C>
Condensed financial position:
Assets:
Cash............................................................. $ 52,090 $ 94,395
Investment in subsidiaries....................................... 16,826,950 16,174,658
Other assets..................................................... 185,811 137,195
----------- -----------
Total assets............................................. $17,064,851 $16,406,248
----------- -----------
----------- -----------
Liabilities and capital accounts:
Long-term debt................................................... $ 500,000
Other liabilities................................................ $ 199,539 86,142
----------- -----------
Total liabilities........................................ 199,539 586,142
----------- -----------
Common stock....................................................... 2,191,220 2,191,220
Surplus............................................................ 1,105,133 1,098,929
Retained earnings.................................................. 13,719,965 12,690,099
Treasury stock..................................................... (129,964) (157,144)
Net unrealized loss on marketable equity securities................ (21,042) (2,998)
----------- -----------
Total capital............................................ 16,865,312 15,820,106
----------- -----------
Total liabilities and capital............................ $17,064,851 $16,406,248
----------- -----------
----------- -----------
</TABLE>

F-17
<PAGE> 73

INVESTARK BANKSHARES, INC.

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS -- (CONTINUED)

<TABLE>
<CAPTION>
YEAR ENDED DECEMBER 31,
--------------------------------------
1993 1992 1991
--------- ---------- ---------
<S> <C> <C> <C>
Condensed operating results:
Dividends from subsidiaries.......................... $ 703,072 $ 734,746 $ 245,766
Other income......................................... 2,726 3,790
---------- ---------- ---------
703,072 737,472 249,556
---------- ---------- ---------
Interest............................................. 15,133 55,437 73,924
Other expense........................................ 70,978 54,611 29,718
---------- ---------- ---------
86,111 110,048 103,642
---------- ---------- ---------
Income before tax benefit and equity in undistributed
income of subsidiaries............................... 616,961 627,424 145,914
Income tax benefit..................................... (31,685) (35,412) (46,937)
---------- ---------- ---------
Income before equity in undistributed income of
subsidiaries......................................... 648,646 662,836 192,851
Equity in undistributed income of subsidiaries......... 629,180 1,570,386 713,715
---------- ---------- ---------
Net income............................................. $1,277,826 $2,233,222 $ 906,566
---------- ---------- ---------
---------- ---------- ---------
Condensed statements of cash flows:
Cash flows from operating activities:
Net income........................................ $1,277,826 $2,233,222 $ 906,566
Undistributed income.............................. (629,180) (1,570,386) (713,715)
Gain on sale of stock............................. (1,896)
Amortization...................................... 3,011 3,011 2,814
(Increase) decrease in other assets............... (75,166) (26,103) 76,595
Increase (decrease) in other liabilities.......... 139,948 (13,431) 5,909
---------- ---------- ---------
716,439 624,417 278,169
---------- ---------- ---------
Cash flows from investing activities:
Purchase First Stuttgart Bank stock.................. (44,168)
Purchase Bank of North Arkansas stock................ (923) (13,756)
Proceeds from sale of stock.......................... 9,796
---------- ---------- ---------
(44,168) 8,873 (13,756)
---------- ---------- ---------
Cash flows from financing activities:
Sale of treasury stock............................... 33,384
Purchase of treasury stock........................... (38,520)
Proceeds from long-term debt......................... 313,764
Repayment of borrowings.............................. (813,764) (369,699)
Dividends paid....................................... (247,960) (205,042) (194,566)
---------- ---------- ---------
(714,576) (613,261) (194,566)
---------- ---------- ---------
Net increase (decrease) in cash........................ (42,305) 20,029 69,847
Cash beginning of year................................. 94,395 74,366 4,519
---------- ---------- ---------
Cash at end of year.................................... $ 52,090 $ 94,395 $ 74,366
---------- ---------- ---------
---------- ---------- ---------
Supplementary data for cash flows:
Interest paid........................................ $ 15,133 $ 55,437 $ 95,607
</TABLE>

F-18
<PAGE> 74

PART II

INFORMATION NOT REQUIRED IN PROSPECTUS

ITEM 20. INDEMNIFICATION OF DIRECTORS AND OFFICERS

The Arkansas Business Corporation Act of 1987 (the "Act") codified at Ark.
Code Ann. sec.4-27-101 et. seq. and more specifically at Ark. Code Ann.
sec.4-27-850 permits an Arkansas Corporation to indemnify directors, officers,
employees and agents under some circumstances, and mandates indemnification
under certain limited circumstances. The Act permits a corporation to indemnify
a director, officer, employee, or agent for expenses (including attorneys'
fees), judgements, fines and amounts paid in settlement actually and reasonably
incurred if such person acted in good faith and in a manner he reasonably
believed to be in or not opposed to the best interests of the corporation.
Indemnification against expenses incurred by a director, officer, employee or
agent in connection with his defense of a proceeding against such person for
actions in such capacity is mandatory to the extent that such person has been
successful on the merits. If a director, officer, employee, or agent is
determined to be liable to the corporation, indemnification for expenses is not
allowable, subject to limited exceptions where a court deems the award of
expenses appropriate. The Act grants express power to an Arkansas corporation to
purchase liability insurance for its directors, officers, employees and agents,
regardless of whether any such person is otherwise eligible for indemnification
by the corporation. Advancement of expenses is permitted, but a person receiving
such advances must repay those expenses if it is ultimately determined that he
is not entitled to indemnifications.

The Amended and Restated Articles of Incorporation and the Bylaws of First
United provides that the directors, officers, employees and agents of First
United shall be indemnified as set forth below.

AMENDED AND RESTATED ARTICLES OF INCORPORATION

TWELFTH. The corporation may indemnify any person who was, or is, a party
or is threatened to be made a party to any threatened, pending or completed
action, suit or proceeding to the fullest extent permitted by the Arkansas
Business Corporation Act as it now exists or may hereafter be amended.

BY-LAWS

Section 6. INDEMNIFICATION. Every person who was or is a party or is
threatened to be made a party to or is involved in any action, suit, proceeding,
whether civil, criminal, administrative, or investigative, by reason of the fact
that he is or was a director or officer of the Corporation or is or was serving
at the request of the Corporation as a director or officer of another
corporation, or as its representative in a partnership, joint venture, trust, or
other enterprise, shall be indemnified and held harmless to the fullest extent
legally permissible under and pursuant to any procedure specified in the
Arkansas Business Corporation Act of the State of Arkansas, as amended and as
the same may be amended hereafter, against all expenses, liabilities, and losses
(including attorney's fees, judgments, fines and amounts paid or to be paid in
settlement) reasonably incurred or suffered by him in connection therewith. Such
right of indemnification shall be a contract right that may be enforced in any
lawful manner by such person. Such right of indemnification shall not be
exclusive of any other right which such director or officer may have or
hereafter acquire and, without limiting the generality of such statement, he
shall be entitled to his rights of indemnification under any agreement, vote of
stockholders, provisions of law, or otherwise, as well as his rights under this
paragraph.

The board of directors may cause the Corporation to purchase and maintain
insurance on behalf of any person who is or was a director or officer of the
Corporation, or is or was serving at the request of the Corporation as a
director or officer of another corporation, or as its representative in a
partnership, joint venture, trust or other enterprise against any liability
asserted against such person and incurred in any such capacity or arising out of
such status, whether or not the Corporation would have power to indemnify such
person.

II-1
<PAGE> 75

ITEM 21. EXHIBITS AND FINANCIAL STATEMENT SCHEDULES

<TABLE>
<CAPTION>
EXHIBIT
NO. DESCRIPTION OF EXHIBIT
- ---------------------------------------------------------------------------------------------
<S> <C>
2 -- Agreement and Plan of Reorganization Between First United Bancshares,
Inc. and InvestArk Bankshares, Inc. and Plan of Merger attached as
Exhibit A thereto.(2)
3(i) -- Articles of Incorporation of InvestArk Bankshares, Inc.(2)
3(ii) -- Bylaws of InvestArk Bankshares, Inc.(2)
5 -- Opinion of Ivester, Skinner & Camp, P.A.(1)
8 -- Tax Opinion of Shults, Ray & Kurrus regarding InvestArk Bankshares,
Inc. Acquisition.(1)
9 -- Trust agreement dated , 1994 by and among Jackson T.
Stephens, the W.R. Stephens Trust, the W.R.Stephens, Jr. Trust, W.R.
Stephens, Jr., Warren A. Stephens, the Elizabeth Ann Stephens
Campbell Trust, Stephens Group, Inc. and the Bank of New York, as
trustee.(2)
10 -- Shareholders Agreement dated December 17, 1993 by and among First
United, W.R. Stephens, Jr., the W.R. Stephens Trust, the W.R.
Stephens Trust, Jackson T. Stephens, Warren A. Stephens and Elizabeth
Ann Stephens Trust.(2)
21 -- Subsidiaries of First United Bancshares, Inc.(2)
23(a) -- Consent of Arthur Andersen & Co.(1)
23(b) -- Consent of Martin and Company(1)
24 -- Power of Attorney -- Signature Page of the Registration Statement(2)
99(a) -- First United Bancshares, Inc. Form of Proxy(1)
99(b) -- InvestArk Bankshares, Inc. Form of Proxy(1)
</TABLE>

- ---------------

(1) Filed herewith.

(2) As previously filed.

ITEM 22. UNDERTAKINGS

(1) The undersigned registrant hereby undertakes that, for purposes of
determining any liability under the Securities Act of 1933, each filing of the
registrant's annual report pursuant to section 13(a) or section 15(d) of the
Securities Exchange Act of 1934 (and, where applicable, each filing of an
employee benefit plan's annual report pursuant to section 15(d) of the
Securities Exchange Act of 1934) that is incorporated by reference in the
registration statement shall be deemed to be a new registration statement
relating to the securities offered therein, and the offering of such securities
at that time shall be deemed to be the initial bona fide offering thereof.

(2) The undersigned registrant hereby undertakes to deliver or cause to be
delivered with the prospectus, to each person to whom the prospectus is sent or
given, the latest annual report to security holders that is incorporated by
reference in the prospectus and furnished pursuant to and meeting the
requirements of Rule 14a-3 or Rule 14c-3 under the Securities Exchange Act of
1934; and, where interim financial information required to be presented by
Article 3 of Regulation S-X are not set forth in the prospectus, to deliver, or
cause to be delivered to each person to whom the prospectus is sent or given,
the latest quarterly report that is specifically incorporated by reference in
the prospectus to provide such interim financial information.

(3) The undersigned registrant hereby undertakes as follows: that prior to
any public reoffering of the securities registered hereunder through use of a
prospectus which is a part of this registration statement, by any person or
party who is deemed to be an underwriter within the meaning of Rule 145(c), the
issuer undertakes that such reoffering prospectus will contain the information
called for by the applicable registration form with respect to reofferings by
persons who may be deemed underwriters, in addition to the information called
for by the other Items of the applicable form.

II-2
<PAGE> 76

(4) The registrant undertakes that every prospectus (i) that is filed
pursuant to paragraph (3) immediately preceding, or (ii) that purports to meet
the requirements of section 10(a)(3) of the Act and is used in connection with
an offering of securities subject to Rule 415, will be filed as a part of an
amendment to the registration statement and will not be used until such
amendment is effective, and that, for purposes of determining any liability
under the Securities Act of 1933, each such post-effective amendment shall be
deemed to be a new registration statement relating to the securities offered
therein, and the offering of such securities at that time shall be deemed to be
the initial bona fide offering thereof.

(5) Insofar as indemnification for liabilities arising under the Securities
Act of 1933 may be permitted to directors, officers and controlling persons of
the registrant pursuant to the foregoing provisions, or otherwise, the
registrant has been advised that in the opinion of the Securities and Exchange
Commission such indemnification is against public policy as expressed in the Act
and is, therefore, unenforceable. In the event that a claim for indemnification
against such liabilities (other than the payment by the registrant of expenses
incurred or paid by a director, officer or controlling person of the registrant
in the successful defense of any action, suit or proceeding) is asserted by such
director, officer or controlling person in connection with the securities being
registered, the registrant will, unless in the opinion of its counsel the matter
has been settled by controlling precedent, submit to a court of appropriate
jurisdiction the question of whether such indemnification by it is against
public policy as expressed in the Act and will be governed by the final
adjudication of such issue.

(6) The undersigned registrant hereby undertakes to supply by means of a
post-effective amendment all information concerning a transaction, and the
company being acquired involved therein, that was not the subject of and
included in the registration statement when it became effective.

(7) The undersigned registrant hereby undertakes to respond to requests for
information that is incorporated by reference into the prospectus pursuant to
Items 4, 10(b), 11, or 13 of this Form, within one business day of receipt of
such request, and to send the incorporated documents by first class mail or
other equally prompt means. This includes information contained in documents
filed subsequent to the effective date of the registration statement through the
date of responding to the request.

(8) The undersigned registrant hereby undertakes:

(1) To file, during any period in which offers or sales are being
made, a post-effective amendment to this registration statement.

(i) To include any prospectus required by section 10(a)(3) of the
Securities Act of 1933;

(ii) To reflect in the prospectus any facts or events arising after
the effective date of the registration statement (or the most recent
post-effective amendment thereof) which, individually or in the
aggregate, represent a fundamental change in the information set forth
in the registration statement;

(iii) To include any material information with respect to the plan
of distribution not previously disclosed in the registration statement
or any material change to such information in the registration
statement;

Provided, however, that paragraphs (a)(1)(i) and (a)(1)(ii) do not apply if
the registration statement is on Form S-3 (sec. 239.13 of this chapter) or Form
S-8 (sec. 239.16b of this chapter), and the information required to be included
in a post-effective amendment by those paragraphs is contained in periodic
reports filed by the registrant pursuant to section 13 or section 15(d) of the
Securities Exchange Act of 1934 that are incorporated by reference in this
registration statement.

(2) That, for the purpose of determining any liability under the
Securities Act of 1933, each such post-effective amendment shall be deemed
to be a new registration statement relating to the securities offered
therein, and the offering of such securities at that time shall be deemed
to be the initial bona fide offering thereof.

(3) To remove from registration by means of a post-effective amendment
any of the securities being registered which remain unsold at the
termination of the offering.

II-3
<PAGE> 77

SIGNATURES

Pursuant to the requirements of the Securities Act, the Registrant has duly
caused this Amendment No. 2 to the Registration Statement No. 33-52341 to be
signed on its behalf by the undersigned, thereunto duly authorized in the City
of El Dorado, State of Arkansas, on May 4, 1994.

FIRST UNITED BANCSHARES, INC.

/s/ JAMES V. KELLEY
James V. Kelley
Chairman, President and Chief
Executive Officer

/s/ JOHN E. BURNS
John E. Burns
Vice President, Chief Financial
Officer
and Principal Accounting Officer

Pursuant to the requirements of the Securities Act of 1933, this Amendment
No. 2 to the Registration Statement No. 33-52341 has been signed by the
following persons in the capacities and on the dates indicated.

IN WITNESS WHEREOF, I have hereunto set my hand this 4th day of May, 1994.

<TABLE>
<CAPTION>
SIGNATURE TITLE DATE
- --------------------------------------------- ---------------------------- -----------------
<S> <C> <C>
/s/ JAMES V. KELLEY Chairman, President, Chief May 4, 1994
James V. Kelley Executive Officer and
Director
/s/ JOHN E. BURNS Vice President, Chief May 4, 1994
John E. Burns Financial Officer and
Principal Accounting
Officer
/s/ E. LARRY BURROW* Director May 4, 1994
E. Larry Burrow
/s/ CLAIBORNE P. DEMING* Director May 4, 1994
Claiborne P. Deming
/s/ GRADY E. DUPRIEST* Director May 4, 1994
Grady E. DuPriest
/s/ WILLIAM A. ECKERT, JR.* Director May 4, 1994
William A. Eckert, Jr.
/s/ ROY E. LEDBETTER* Director May 4, 1994
Roy E. Ledbetter
/s/ MICHAEL F. MAHONY* Director May 4, 1994
Michael F. Mahony
/s/ RICHARD H. MASON* Director May 4, 1994
Richard H. Mason
/s/ JACK W. MCNUTT* Director May 4, 1994
Jack W. McNutt
</TABLE>

II-4
<PAGE> 78

<TABLE>
<CAPTION>
SIGNATURE TITLE DATE
- --------------------------------------------- ---------------------------- -----------------
<S> <C> <C>
/s/ WILLIAM E. MORGAN, JR.* Director May 4, 1994
William E. Morgan, Jr.
/s/ R. MADISON MURPHY* Director May 4, 1994
R. Madison Murphy
/s/ ROBERT C. NOLAN* Director May 4, 1994
Robert C. Nolan
/s/ PAULA M. O'CONNOR* Director May 4, 1994
Paula M. O'Connor
/s/ KATHERINE PATTON OZMENT* Director May 4, 1994
Katherine Patton Ozment
/s/ CAL PARTEE, JR.* Director May 4, 1994
Cal Partee, Jr.
/s/ W. C. PARTEE* Director May 4, 1994
W. C. Partee
/s/ CHESLEY PRUET* Director May 4, 1994
Chesley Pruet
/s/ JOHN D. TRIMBLE, JR.* Director May 4, 1994
John D. Trimble, Jr.
/s/ RALPH C. WEISER* Director May 4, 1994
Ralph C. Weiser
/s/ DAVID M. YOCUM, JR.* Director May 4, 1994
David M. Yocum, Jr.

*By: JAMES V. KELLEY May 4, 1994
JOHN E. BURNS
James V. Kelley
John E. Burns
(Attorneys-in-fact)
</TABLE>

II-5
<PAGE> 79

AS FILED WITH THE SECURITIES AND EXCHANGE COMMISSION ON MAY 4, 1994

REGISTRATION NO. 33-52341
- --------------------------------------------------------------------------------
- --------------------------------------------------------------------------------
SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549

---------------------

EXHIBITS

AMENDMENT NO. 2

FORM S-4

REGISTRATION STATEMENT
UNDER
THE SECURITIES ACT OF 1933

---------------------

FIRST UNITED BANCSHARES, INC.
(Exact name of registrant as specified in its charter)

- --------------------------------------------------------------------------------
- --------------------------------------------------------------------------------
<PAGE> 80

FIRST UNITED BANCSHARES, INC.

AMENDMENT NO. 1 TO

FORM S-4 REGISTRATION STATEMENT

INDEX TO EXHIBITS

<TABLE>
<CAPTION>
EXHIBIT NO. DESCRIPTION
- -----------------------------------------------------------------------------------
<S> <C>
2 -- Agreement and Plan of Reorganization Between First United Bancshares,
Inc. and InvestArk Bankshares, Inc. and Plan of Merger attached as
Exhibit A thereto.(2)
3(i) -- Articles of Incorporation of InvestArk Bankshares, Inc.(2)
3(ii) -- Bylaws of InvestArk Bankshares, Inc.(2)
5 -- Opinion of Ivester, Skinner & Camp, P.A.(1)
8 -- Tax Opinion of Shults, Ray & Kurrus regarding InvestArk Bankshares,
Inc. Acquisition.(1)
9 -- Trust agreement dated , 1994 by and among Jackson T.
Stephens, the W.R. Stephens Trust, the W.R. Stephens, Jr. Trust, W.R.
Stephens, Jr., Warren A. Stephens, the Elizabeth Ann Stephens
Campbell Trust, Stephens Group, Inc. and the Bank of New York, as
trustee.(2)
10 -- Shareholders Agreement dated December 17, 1993 by and among First
United, W.R. Stephens, Jr., the W.R. Stephens Trust, the W.R.
Stephens Trust, Jackson T. Stephens, Warren A. Stephens and Elizabeth
Ann Stephens Trust.(2)
21 -- Subsidiaries of First United Bancshares, Inc.(2)
23(a) -- Consent of Arthur Andersen & Co.(1)
23(b) -- Consent of Martin and Company(1)
24 -- Power of Attorney -- Signature Page of the Registration Statement(2)
99(a) -- First United Bancshares, Inc. Form of Proxy(1)
99(b) -- InvestArk Bankshares, Inc. Form of Proxy(1)
</TABLE>

- ---------------

(1) Filed herewith.

(2) As previously filed.

<PAGE> 1

Exhibit 5
<TABLE>
<S> <C> <C>
INVESTER, SKINNER & CAMP, P.A.
ATTORNEYS AT LAW
HERMANN INVESTER* 111 CENTER STREET, SUITE 1200 TELECOPIER
H. EDWARD SKINNER** LITTLE ROCK, ARKANSAS 72201-4442 (501) 376-8536
CHARLES R. CAMP (501) 376-7788
WAYNE B. BALL***(T)
RANDAL R. FRAZIER *ALSO ADMITTED IN THE U.S. PATENT
ROBERT KELLER JACKSON AND TRADEMARK OFFICE
LAURA G. WILTSHIRE **ALSO ADMITTED IN MISSOURI
MILDRED HAVARD HANSEN ***ALSO ADMITTED IN TEXAS
VALERIE F. BOYCE May 4, 1994 (T) BOARD RECOGNIZED SPECIALIST
TODD A. LEWELLEN* IN TAX LAW
STANLEY D. SMITH
S. SCOTT LUTON
</TABLE>

First United Bancshares, Inc.
Main and Washington Streets
El Dorado, Arkansas 71730

Gentlemen:

In our opinion, the shares of First United Bancshares,Inc. common
stock, $1.00 par value per share, being registered under Registration Statement
No. 33-52341, filed on February 18, 1994, Amendment No. 1 thereto, filed on
April 12, 1994, and Amendment No. 2 thereto, filed on May 4, 1994, when issued
in exchange for the outstanding common stock of InvestArk Bancshares, Inc.,
will constitute legally issued, fully paid, nonassessable shares of First
United Bancshares, Inc.

We consent to the inclusion of this opinion in the Registration
Statement and reference to us under the caption "Legal Opinions" in the Proxy
Statement included in the Registration Statement.

IVESTER, SKINNER & CAMP, P.A.

/s/ IVESTER, SKINNER & CAMP, P.A.

<PAGE> 1
Exhibit 8

May 4, 1994

InvestArk Bankshares, Inc.
412 South Main Street
Stuttgart, Arkansas 72021

Dear Sirs:

We are special tax counsel to InvestArk Bancshares, Inc. ("InvestArk")
in connection with certain transactions contemplated by the Agreement and Plan
of Reorganization dated as of December 17, 1993, pursuant to which First United
Bancshares, Inc. ("First United") would issue to the stockholders of InvestArk
a minimum of 885,593 and a maximum of 985,849 shares of First United stock in
exchange for all the issued and outstanding stock of InvestArk through a merger
transaction (the "Merger") in which InvestArk would be merged with and into
First United. In that connection, our opinion is as set forth in the section
entitled, "THE MERGER - Certain Federal Income Tax Consequences" in the Proxy
Statement dated May 16, 1994 (the "Proxy Statement").

We hereby consent to the filing of this letter as Exhibit 8 to the
Registration Statement on Form S-4 which the Proxy Statement is a part and to
the reference to us in the section entitled 'THE MERGER - Certain Federal
Income Tax Consequences" in the Proxy Statement.

Very truly yours,

/s/ SHULTS, RAY & KURRUS

Shults, Ray & Kurrus

<PAGE> 1

Exhibit 23(a)

CONSENT OF INDEPENDENT PUBLIC ACCOUNTANTS

As independent public accounts, we hereby consent to the incorporation
by reference in this Amendment No. 2 to Registration Statement No. 33-52341 on
Form S-4 of our report dated January 18, 1994 included in First United
Bancshares, Inc.'s Form 10-K for the year ended December 31, 1993 and to all
references to our Firm included in this Registration Statement.

ARTHUR ANDERSEN & CO.

Jackson, Mississippi

May 4, 1994

<PAGE> 1
Exhibit 23(b)

CONSENT OF INDEPENDENT PUBLIC ACCOUNTANTS

As independent public accountants, we hereby consent to the use of our
report dated January 28, 1994 and to all references to our Firm included in
this Amendment No. 2 to Registration Statement No. 33-52341 on Form S-4.

MARTIN & COMPANY

Little Rock, Arkansas
May 4, 1994

<PAGE> 1
Exhibit 99(a)

FIRST UNITED BANCSHARES, INC.

PROXY

The undersigned hereby appoints James V. Kelley and John E. Burns or
both of them acting in the absence of the others, as attorneys and proxies of
the undersigned, to represent the undersigned at the Special Meeting of
Stockholders of First United Banchsares, Inc. ("First United") to be held on
June 13, 1994 at 2:00 p.m. local time at the First National Bank Building,
Main and Washington Streets, El Dorado, Arkansas and at any adjournment or
adjournments thereof and to vote all shares of stock of First United held of
record by the undersigend.

1. Approval of the Agreement and Plan of Reorganization which provides
for the merger of InvestArk Bankshares, Inc. into First United.

FOR ____ AGAINST ____ ABSTAIN ____

2. In their discretion on such other matters as may properly come
before the meeting.

THIS PROXY IS SOLICITED ON BEHALF OF THE BOARD OF DIRECTORS
(Continued and to be signed on other side)

THIS PROXY WILL BE VOTED AS DIRECTED BUT, WHERE NO DIRECTION IS GIVEN, IT WILL
BE VOTED "FOR" APPROVAL OF THE AGREEMENT AND PLAN OF MERGER. A COPY OF THE
PROXY STATEMENT HAS BEEN RECEIVED BY THE UNDERSIGNED.

DATED: ____________________ ______________________________
Signature

______________________________
Signature

Please sign exactly as name(s) appear(s) heron and return promptly in the
enclosed envelope. When signing as attorney, executor, administrator, trustee,
guardian or corporate official, please give your title as such.

___ PLEASE CHECK IF YOU PLAN TO ATTEND THIS MEETING

<PAGE> 1
Exhibit 99(b)

INVESTARK BANKSHARES, INC.

PROXY

The undersigned hereby appoints Harry C. Erwin acting in the absence of
the others, as attorney and proxy of the undersigned, to represent the
undersigned at the Special Meeting of Stockholders of InvestArk Bankshares, Inc.
("InvestArk") to be held on June 13, 1994 at 10:00 a.m. local time at the
First Stuttgart Bank and Trust Company building, 412 South Main, Stuttgart,
Arkansas and at any adjournment or adjournments thereof and to vote all shares
of stock of InvestArk held of record by the undersigend.

1. Approval of the Agreement and Plan of Reorganization which provides
for the merger of InvestArk Bankshares, Inc. into First United.

FOR ____ AGAINST ____ ABSTAIN ____

2. Approval of the election by InvestArk to be governed by the
Arkansas Business Corporation Act of 1987.

FOR ____ AGAINST ____ ABSTAIN ____

3. In their discretion on such other matters as may properly come
before the meeting.

THIS PROXY IS SOLICITED ON BEHALF OF THE BOARD OF DIRECTORS
(Continued and to be signed on other side)

THIS PROXY WILL BE VOTED AS DIRECTED BUT, WHERE NO DIRECTION IS GIVEN, IT WILL
BE VOTED "FOR" APPROVAL OF THE AGREEMENT AND ELECTION. A COPY OF THE PROXY
STATEMENT HAS BEEN RECEIVED BY THE UNDERSIGNED.

DATED: ____________________ ______________________________
Signature

______________________________
Signature

___ PLEASE CHECK IF YOU PLAN TO ATTEND THIS MEETING