FIRST UNITED BANCSHARES INC /AR/, S-4/A, 1996-07-10

FIRST UNITED BANCSHARES INC /AR/
S-4/A, 1996-07-10
STATE COMMERCIAL BANKS

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<PAGE> 1

AS FILED WITH THE SECURITIES AND EXCHANGE COMMISSION ON JULY 10, 1996

REGISTRATION NO. 333-06185

================================================================================
SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549

AMENDMENT NO. 1

FORM S-4
REGISTRATION STATEMENT UNDER THE SECURITIES ACT OF 1933

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

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

<TABLE>
<S> <C> <C>
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:

STAN D. SMITH
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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<CAPTION>
================================================================================================
TITLE OF EACH CLASS PROPOSED PROPOSED AGGREGATE
OF SECURITIES AMOUNT TO BE MAXIMUM OFFERING OFFERING AMOUNT OF
TO BE REGISTERED REGISTERED(1) PRICE PER UNIT(2) PRICE(3) REGISTRATION FEE
- ------------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C>
Common Stock.......... 595,000 $27.38 $14,300,000 $4,935.00
================================================================================================
</TABLE>

(1) Estimated based on the maximum number of shares to be registered.

(2) Estimated solely for the purpose of calculating the registration fee.

(3) The aggregate offering price is based on the contract purchase price. The
number of shares issued and price per share are inversely proportional to
each other.

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.
================================================================================

<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

<TABLE>
<CAPTION>
LOCATION IN PROSPECTUS AND PROXY
REGISTRATION STATEMENT ITEM AND HEADING STATEMENT
- -------------------------------------------------------- ----------------------------------------
<C> <S> <C> <C> <C>
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;
Carlisle Bancshares, 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 Incorporation of Certain Documents by
Reference......................................... Reference
12. Information with Respect to S-2 or S-3 Not Applicable
Registrants.......................................
13. Incorporation of Certain Information by Not Applicable
Reference.........................................
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 Not Applicable
Companies.........................................
17. Information with Respect to Companies Other than
S-3 or S-2 Companies
(1) Description of Business..................... Carlisle Bancshares, Inc. -- Description
of Business
(2) Market Price of and Dividends on the
Registrant's Common Equity.................. Summary -- Comparative Per Share Data;
Carlisle Bancshares, Inc. -- Principal
Stockholders of Carlisle and Related
Stockholder Matters
(3) Selected Financial Data..................... Summary -- Selected Financial Data
(4) Supplementary Financial Information......... Not Applicable
</TABLE>
<PAGE> 3

<TABLE>
<CAPTION>
LOCATION IN PROSPECTUS AND PROXY
REGISTRATION STATEMENT ITEM AND HEADING STATEMENT
- -------------------------------------------------------- ----------------------------------------
<C> <S> <C> <C> <C>
(5) Management's Discussion and Analysis of
Financial Condition and Results of
Operations.................................. Carlisle Bancshares, 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............. Financial Information
(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 Carlisle 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 Carlisle 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....................... Carlisle Bancshares, Inc. -- Principal
Stockholders of Carlisle; The
Merger -- Background of the Merger
(6) Vote Required for Approval.................. The Carlisle 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>
<PAGE> 4

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 August 29, 1996 at 2:00 P.M.

At a Special Meeting, Stockholders of First United will consider and vote
upon the merger of First United and Carlisle Bancshares, Inc. ("Carlisle")
whereby Carlisle will be merged with and into First United. The Agreement
between First United and Carlisle provides that the stockholders of Carlisle
will receive total consideration of $13,025,000, plus after-tax earnings of
Carlisle between January 1, 1996 and the closing date, consisting of fully paid
and nonassessable shares of Common Stock, $1.00 par value, of First United. The
number of shares of First United Common Stock to be exchanged for all of the
issued and outstanding shares of Carlisle Common Stock will be determined by
dividing $13,025,000, plus after-tax earnings of Carlisle between January 1,
1996 and the closing date, by the average price per share 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. Each
stockholder of Carlisle common stock shall be entitled to receive a pro rata
portion of First United common stock based on each stockholder's pro rata
ownership of the issued and outstanding shares of Carlisle. In addition, the
President of Carlisle's subsidiary, FirstBank of Arkansas, will receive First
United Common Stock having a market value of approximately $40,000 in
satisfaction of his options to buy Carlisle Common Stock in the future.

If the average price of First United Common Stock exceeds $32.00 Carlisle
may terminate the Agreement without liability. If the average price of First
United Common Stock is less than $24.00 First United may terminate the Agreement
without liability.

Carlisle is a bank holding company which is primarily engaged in the
business of banking through its three wholly-owned bank subsidiaries, with bank
offices in Lonoke, Monroe and Prairie counties which provide a full range of
banking services to its customers.

The Stockholders of First United will also consider and vote upon
amendments to First United's Articles of Incorporation that would (1) allow the
First United Board of Directors to approve certain mergers or share exchanges
with other corporations without a Stockholders' vote and (2) allow the First
United Board of Directors to increase or decrease the number of directors fixed
by the Stockholders and to fill new positions created. These votes will be
independent of each other and independent of the Merger.

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. The Board of Directors also believes that both proposed amendments
to the First United Articles of Incorporation are in the best interests of our
Stockholders and therefore recommends that you vote in favor of both proposed
amendments. Additional information regarding the proposed merger, Carlisle, the
rights of dissenting Stockholders and the proposed amendments 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

August 29, 1996

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 in the First National Bank Building, Main and Washington
Streets, El Dorado, Arkansas on August 29, 1996 at 2:00 p.m. for the following
purposes:

1. To consider and vote upon an Agreement and Plan of Reorganization dated
as of April 1, 1996, as amended on April 10, 1996 and May 30, 1996,
which provides for the merger of Carlisle Bancshares, Inc. into First
United Bancshares, Inc. of El Dorado, Arkansas.

2. To consider and vote upon a proposed amendment to the First United
Articles of Incorporation to allow the Board of Directors to approve
certain mergers and share exchanges without a Stockholders vote.

3. To consider and vote upon a proposed amendment to the First United
Articles of Incorporation to allow the Board of Directors to increase or
decrease the number of directors last fixed by the Stockholders and to
fill new positions created.

4. 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 July 8, 1996 are
entitled to vote at the meeting. The proposals 1, 2 and 3 above require 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: July 22, 1996

<PAGE> 6

CARLISLE BANCSHARES, INC.

To the Stockholders of
Carlisle Bancshares, Inc.

Enclosed is a Notice of Special Meeting of Stockholders of Carlisle
Bancshares, Inc. ("Carlisle") which will be held at 1590 Union National Plaza,
Little Rock, Arkansas on August 29, 1996 at 10:00 A.M.

At a Special Meeting, Stockholders of Carlisle will consider and vote upon
the merger of Carlisle with and into First United Bancshares, Inc. ("First
United"). The Agreement between First United and Carlisle provides that the
stockholders of Carlisle will receive total consideration of $13,025,000, plus
after-tax earnings of Carlisle between January 1, 1996 and the closing date,
consisting of fully paid and nonassessable shares of Common Stock, $1.00 par
value of First United. The number of shares of First United Common Stock to be
exchanged for all of the issued and outstanding shares of Carlisle Common Stock
will be determined by dividing $13,025,000, plus after-tax earnings of Carlisle
between January 1, 1996 and the closing date, by the average price per share 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. Each stockholder of Carlisle common stock shall be entitled to receive a
pro rata portion of First United common stock based on each stockholder's pro
rata ownership of the issued and outstanding shares of Carlisle. In addition,
the President of Carlisle's subsidiary, FirstBank of Arkansas, will receive
First United Common Stock having a market value of approximately $40,000 in
satisfaction of his options to buy Carlisle Common Stock in the future.

First United is a bank holding company which is engaged in the business of
banking through its eight wholly-owned bank subsidiaries and its trust company
subsidiary, with bank offices in Union, Sebastian, Columbia, Ouachita, Izard,
Arkansas and Crawford Counties in Arkansas and in Bowie County, Texas, which
provide a full range of banking services to its customers.

Stockholders of Carlisle will also consider and vote upon the election by
Carlisle 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.

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.

You are cordially invited to attend the meeting in person. Whether or not
you plan to attend the Annual 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/ WINTHROP P. ROCKEFELLER
------------------------------
Winthrop P. Rockefeller
Chairman of the Board
<PAGE> 7

CARLISLE BANCSHARES, INC.

NOTICE OF SPECIAL MEETING OF STOCKHOLDERS

August 29, 1996

NOTICE is hereby given that a Special Meeting of Stockholders of Carlisle
Bancshares, Inc. has been called by the Board of Directors and will be held at
1590 Union National Plaza, Little Rock, Arkansas on August 29, 1996 at 10:00
a.m. for the following purposes:

1. To consider and vote upon an Agreement and Plan of Reorganization dated
as of April 1, 1996, as amended on April 10, 1996 and May 30, 1996
(collectively, the "Agreement"), which provides for the merger of
Carlisle Bancshares, 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 July 8, 1996 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/ WINTHROP P. ROCKEFELLER
----------------------------------
Winthrop P. Rockefeller
Chairman of the Board

Dated: July 22, 1996

<PAGE> 8

FIRST UNITED BANCSHARES, INC.

AND

CARLISLE BANCSHARES, INC.

JOINT PROXY STATEMENT

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

FIRST UNITED BANCSHARES, INC.
PROSPECTUS
595,000 SHARES OF COMMON STOCK
PAR VALUE $1.00

This Proxy Statement and Prospectus ("Proxy Statement") is being furnished
to the stockholders of Carlisle Bancshares, Inc. ("Carlisle") and First United
Bancshares, Inc. ("First United or the Company") in connection with the
solicitation of proxies by the Board of Directors of Carlisle and First United,
respectively, for use at a special meeting of stockholders of Carlisle to be
held on August 29, 1996, including any adjournments or postponements of the
meeting, and for use at a special meeting of stockholders of First United to be
held on August 29, 1996, including any adjournments or postponements of the
meeting. At the meetings or any adjournments or postponements thereof, the
stockholders of Carlisle 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 Carlisle, dated
April 1, 1996 as amended on April 10, 1996 (the "Agreement"), and incidental
thereto the stockholders of Carlisle will be asked to consider and vote on a
proposal to elect to have Carlisle 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 Carlisle through a merger transaction (the
"Merger") in which Carlisle would merge with and into First United in exchange
for the issuance to the stockholders of Carlisle of up to 595,000 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 shares of First United Common Stock that may
be issued to stockholders of Carlisle in exchange for their stock in Carlisle.
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 Carlisle.

The Stockholders of First United will also consider and vote upon
amendments to First United's Articles of Incorporation that would (1) allow the
First United Board of Directors to approve certain mergers or share exchanges
with other corporations without a Stockholders vote and (2) allow the First
United Board of Directors to increase the number of directors fixed by the
Stockholders and to fill such positions. These votes will be independent of each
other and independent of the Merger.

This Proxy Statement and the accompanying forms of proxy are first being
mailed to stockholders of Carlisle and First United on or about July 22, 1996.
On June 3, 1996, the closing price on the National Association of Securities
Dealers Automatic Quotation System of a share of First United Common Stock was
$27.47, adjusted for the stock split declared on May 20, 1996.

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 JULY 22, 1996.

<PAGE> 9

NO PERSON IS AUTHORIZED BY FIRST UNITED OR CARLISLE 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 CARLISLE SINCE
THE DATE HEREOF.

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 595,000 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
AUGUST 19, 1996.

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, 1995, filed with the Commission on April 1, 1996.

2. The Company's Quarterly Report on Form 10-Q for the quarter ended
March 31, 1996.

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 Special Meetings of the Stockholders of Carlisle 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 Carlisle has
been supplied by Carlisle.

3
<PAGE> 11

TABLE OF CONTENTS

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PAGE
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<S> <C>
SUMMARY
The Company........................................................................ 6
Carlisle........................................................................... 6
The Merger......................................................................... 6
Combined Company................................................................... 7
No Fairness Opinion................................................................ 7
Election by Carlisle Stockholders Under the 1987 Act............................... 7
The First United Special Meeting................................................... 8
Proposed Amendments to First United's Articles of Incorporation.................... 8
The Carlisle Special Meeting....................................................... 8
Certain Federal Income Tax Consequences............................................ 8
Dissenters' Rights................................................................. 8
Regulatory Approvals............................................................... 8
Accounting Treatment............................................................... 9
Market Prices...................................................................... 9
Comparative Per Share Data......................................................... 9
Selected Financial Data............................................................ 10

THE CARLISLE 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........................................................... 13
Reason for the Merger.............................................................. 14
Fairness of the Transaction........................................................ 14
The Agreement...................................................................... 14
Regulatory Approvals............................................................... 15
Antitrust Matters.................................................................. 15
Certain Federal Income Tax Consequences............................................ 15
Accounting Treatment............................................................... 17
Right of Dissent Under the 1965 Act................................................ 17
Right of Dissent under the 1987 Act................................................ 18
Exchange Ratio for the Merger...................................................... 19
Expenses of the Merger............................................................. 19

FINANCIAL INFORMATION
Pro Forma Combining Balance Sheet.................................................. 21
Pro Forma Combining Statements of Income........................................... 22
Notes to Pro Forma Combining Financial Statements.................................. 27
</TABLE>

4
<PAGE> 12

<TABLE>
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PAGE
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<S> <C>
ELECTION BY CARLISLE STOCKHOLDERS UNDER THE 1987 ACT
Election Incidental to the Merger.................................................. 28
Reason for the Election............................................................ 28
Result of the Election............................................................. 28

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................................................ 33

CARLISLE BANCSHARES, INC.
Description of Business............................................................ 33
Management Discussion and Analysis................................................. 33
Directors and Executive Officers................................................... 42
Transactions with Management....................................................... 43
Principal Stockholders of Carlisle................................................. 43
Resulting Ownership in First United................................................ 43
Competition........................................................................ 43
Litigation......................................................................... 43
Offices............................................................................ 43
Employees.......................................................................... 43
Description of Carlisle Stock...................................................... 44
Comparison of Rights of Holders of Carlisle Common Stock and First United Common
Stock........................................................................... 44

PROPOSED AMENDMENTS TO FIRST UNITED'S ARTICLES OF INCORPORATION...................... 45

LEGAL MATTERS AND EXPERTS
Legal Opinions..................................................................... 47
Experts............................................................................ 47
General............................................................................ 47

INDEX TO CARLISLE FINANCIAL STATEMENTS............................................... F-1

ANNEXES
I -- Restated Agreement and Plan of Reorganization
II -- Arkansas Business Corporation Act of 1965 sec. 4-26-1007
III -- Arkansas Business Corporation Act of 1987 sec. 4-27-1301 et. seq.
</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 eight wholly-owned subsidiary banks and a trust company operating in over
28 locations in seven communities throughout the States of Arkansas and Texas.
The Company's subsidiaries 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; Commercial Bank at Alma, Alma, Arkansas, The Bank of
North Arkansas, Melbourne, Arkansas, First Stuttgart Bank & Trust Company,
Stuttgart, Arkansas, FirstBank, Texarkana, Texas and First United Trust Company,
N.A., El Dorado, Arkansas (collectively called the "Subsidiary Banks"). The
Company had consolidated assets of $1,370,822,000, and stockholders' equity of
$132,043,000 as of March 31, 1996.

On May 20, 1996, the Board of Directors of First United declared a 3-for-2
stock split effected in the form of a 50% stock dividend. The dividend was
distributed on June 28, 1996 to holders of record as of June 7, 1996. Unless
otherwise indicated, all per share data, numbers of common shares and capital
accounts contained herein have been restated to reflect this stock split.

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.

CARLISLE

Carlisle is a privately-owned Arkansas bank holding company which owns 100%
of Citizens Bank & Trust Company, Carlisle, Arkansas ("CBT"), FirstBank of
Arkansas, Brinkley, Arkansas ("FirstBank"), and Hazen First State Bank, Hazen,
Arkansas ("Hazen"). Carlisle had consolidated assets of $100,998,000 and
stockholders' equity of $7,389,000 as of March 31, 1996.

There is no public market for shares of Carlisle's outstanding capital
stock. Carlisle's principal executive offices are located at 300 Spring
Building, Suite 1010, Little Rock, Arkansas, 72201; its telephone number is
(501) 376-2128.

THE MERGER

On April 1, 1996, the Company and Carlisle entered into a definitive
agreement pursuant to which the Company proposes to acquire all of the issued
and outstanding stock of Carlisle by merger of Carlisle with and into First
United. The acquisition of Carlisle will be consummated through the issuance to
Carlisle's stockholders of approximately 500,000 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 March 29, 1996, 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 $28.14, adjusted for the stock split
declared on May 20, 1996. There is no established market value for the stock of
Carlisle.

6
<PAGE> 14

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

COMBINED COMPANY

The pro forma combined financial statements and its constituent parts of
First United and Carlisle as of and for the periods indicated 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 CARLISLE COMBINED COMBINED
---------- --------- -------- --------- ----------
<S> <C> <C> <C> <C> <C>
Assets
March 31, 1996............. $1,370,822 93.1 $100,998 6.9 $1,471,820
Shareholders' equity
March 31, 1996............. 132,043 94.7 7,389 5.3 139,432
Net interest income
Year ended December 31,
1995.................... 49,485 93.2 3,584 6.8 53,069
Three months ended March
31, 1996................ 12,622 93.0 948 7.0 13,570
Income from continuing
operations
Year ended December 31,
1995.................... 15,204 93.0 1,142 7.0 16,346
Three months ended March
31, 1996................ 4,349 92.7 342 7.3 4,691
</TABLE>

If a maximum of 595,000 shares of common stock of First United are issued
to Carlisle stockholders, First United will have a total of approximately
8,333,000 shares of common stock issued and outstanding. Present First United
stockholders will control 92.9% of such shares and Carlisle stockholders will
control 7.1% of such shares.

NO FAIRNESS OPINION

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

ELECTION BY CARLISLE STOCKHOLDERS UNDER THE 1987 ACT

The Election by the stockholders of Carlisle 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.

Carlisle 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, Carlisle must elect to be governed by the 1987 Act
in order to facilitate compliance with the applicable statutory procedures.

7
<PAGE> 15

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 August 29, 1996 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 15% 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."

PROPOSED AMENDMENTS TO FIRST UNITED'S ARTICLES OF INCORPORATION

The Stockholders of First United will also consider and vote upon
amendments to First United's Articles of Incorporation that would (1) allow the
First United Board of Directors to approve certain mergers or share exchanges
with other corporations without a Stockholders vote and (2) allow the First
United Board of Directors to increase the number of directors fixed by the
Stockholders and to fill such positions. These votes will be independent of each
other and independent of the Merger.

The affirmative vote of two-thirds of the outstanding shares of First
United Common Stock is required for approval of each proposed amendment.

THE CARLISLE SPECIAL MEETING

Approval of the Merger by the stockholders of Carlisle will be considered
at a Special Meeting to be held at 1590 Union National Plaza, Little Rock,
Arkansas on August 29, 1996, at 10:00 a.m. Central Daylight Time.

The affirmative vote of the holders of two-thirds of the outstanding shares
of Carlisle 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 99% of the outstanding stock of Carlisle.
Stockholders of Carlisle 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 Carlisle as a result of the Merger and Carlisle's stockholders will not
recognize gain or loss upon the receipt of First United Common Stock in exchange
for Carlisle common stock. Carlisle 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 Carlisle stockholders upon the receipt of First United
Common Stock in exchange for Carlisle 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 Carlisle 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 Carlisle 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".

REGULATORY APPROVALS

First United has received the preliminary approval of the Board of
Governors of the Federal Reserve to merge Carlisle into First United. First
United has also received the preliminary approval of the Arkansas Bank
Commissioner to consummate the Merger. See "The Merger -- Regulatory Approvals."

8
<PAGE> 16

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 LLP 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. Carlisle 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>
HIGH LOW
------ ------
<S> <C> <C>
1993............................................... $19.67 $15.33
1994............................................... 22.00 17.67
1995............................................... 28.67 19.00
1996 (through June 3, 1996)........................ 28.81 26.80
</TABLE>

On March 29, 1996, immediately prior to the public announcement of the
agreement in principle between First United and Carlisle as to the proposed
merger transaction, the closing sales price for First United Common Stock was
$28.14. On June 3, 1996, the closing sales price for First United Common Stock
was $27.47.

COMPARATIVE PER SHARE DATA

The following table sets forth for the periods indicated selected
historical per share data of First United and Carlisle 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
Carlisle 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 organization or the actual results that would have occurred if the
Merger had been consummated prior to the periods indicated.

<TABLE>
<CAPTION>
FIRST UNITED/CARLISLE CARLISLE PRO FORMA
FIRST PRO FORMA COMBINED(2) EQUIVALENT(3)
UNITED CARLISLE -------------------------- --------------------------
HISTORICAL(1) HISTORICAL $24.00 $28.00 $32.00 $24.00 $28.00 $32.00
------------- ---------- ------ ------ ------ ------ ------ ------
<S> <C> <C> <C> <C> <C> <C> <C> <C>
Book value per common share:
December 31, 1995................... $ 16.85 $50.67 $16.60 $16.75 $16.87 $64.74 $55.94 $49.26
March 31, 1996...................... 17.06 53.28 16.84 17.00 17.12 65.68 56.78 49.99
Cash Dividends per common share:
Year ended December 31, 1993........ .44 1.65 .44 .44 .44 1.71 1.47 1.28
Year ended December 31, 1994........ .49 1.40 .49 .49 .49 1.91 1.64 1.43
Year ended December 31, 1995........ .57 1.00 .57 .57 .57 2.22 1.90 1.66
Three Months ended March 31, 1995... .13 1.00 .13 .13 .13 .51 .43 .38
Three Months ended March 31, 1996... .15 -- .15 .15 .15 .59 .50 .44
Income per share from continuing
operations:
Year ended December 31, 1993........ 1.71 6.05 1.70 1.71 1.72 6.63 5.71 5.02
Year ended December 31, 1994........ 1.81 6.43 1.80 1.82 1.83 7.02 6.08 5.34
Year ended December 31, 1995........ 1.96 8.25 1.97 1.99 2.01 7.68 6.65 5.87
Three Months ended March 31, 1995... .47 1.53 .47 .47 .48 1.83 1.57 1.40
Three Months ended March 31, 1996... .56 2.47 .57 .57 .58 2.22 1.91 1.69
</TABLE>

9
<PAGE> 17

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

(1) On May 20, 1996, the Board of Directors of First United declared a 3-for-2
stock split effected in the form of a 50% stock dividend. The dividend was
distributed on June 28, 1996 to holders of record as of June 7, 1996. All
per share data have been restated to reflect this stock split.

(2) The First United/Carlisle Pro Forma Combined amounts do not consider the
number of shares of First United Common Stock that may be issued in such
amount as is equal to the after-tax earnings of Carlisle between January 1,
1996 and the closing date. The after-tax earnings of Carlisle for the three
months ended March 31, 1996 were $342,000. The First United/Carlisle Pro
Forma Combined amounts do not consider the number of shares of First United
Common Stock that may be issued in such amount as is equal to the intrinsic
value of any unexercised Carlisle stock options at the time of the Merger.
First United estimates the intrinsic value of such Carlisle stock options
to approximate $40,000. See "Financial Information."

(3) The Carlisle pro forma equivalents represent the respective First
United/Carlisle pro forma combined earnings, dividends and book value per
common share multiplied by the applicable exchange ratio of 3.90 ($24.00
First United stock value), 3.34 ($28.00 First United stock value) or 2.92
($32.00 First United stock value) shares of First United Common Stock for
each share of Carlisle Common Stock so that the First United/Carlisle pro
forma equivalent amounts are equated to the respective values for one share
of Carlisle Common Stock. The exchange ratio is determined by dividing
First United common stock to be received by the Carlisle stockholders by
the 139,142 shares of Carlisle Common Stock currently outstanding.

SELECTED FINANCIAL DATA

The table on the following page presents selected historical financial data
of First United and Carlisle 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 $200,000. The
First United historical data for each of the years in the five-year period ended
December 31, 1995 are based on the historical financial statements of First
United as audited by Arthur Andersen LLP, independent public accountants. The
Carlisle historical data for the year ended December 31, 1995 is derived from
the historical financial statements of Carlisle as audited by Kemp & Company,
independent auditors. The Carlisle data for each of the years in the three-year
period ended December 31, 1994 (1992 not presented separately herein) are
derived from the historical financial statements of Carlisle as audited by Ernst
& Young LLP, independent auditors. The selected financial data for First United
for the three month periods ended March 31, 1995 and 1996, and for Carlisle for
the three month periods ended March 31, 1995 and 1996 and for the year ended
December 31, 1991 have been obtained from unaudited financial statements and, in
the opinion of the respective management of First United and Carlisle, include
all adjustments necessary to present fairly the data for such periods. 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 Carlisle give
effect to the exchange of each share of Carlisle common stock for 3.34 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 Carlisle, 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."

SUMMARY FINANCIAL DATA

<TABLE>
<CAPTION>
THREE MONTHS ENDED
YEAR ENDED DECEMBER 31, MARCH 31,
-------------------------------------------------------------- -----------------------
1991 1992 1993 1994 1995 1995 1996
---------- ---------- ---------- ---------- ---------- ---------- ----------
(IN THOUSANDS, EXCEPT PER SHARE DATA)
<S> <C> <C> <C> <C> <C> <C> <C>
FIRST UNITED -- HISTORICAL
Operating Data
Total interest income.............. $ 84,935 $ 77,570 $ 71,968 $ 73,214 $ 92,735 $ 21,052 $ 24,195
Net interest income................ 36,710 42,511 43,063 42,961 49,485 11,555 12,622
Provision for possible loan
losses........................... 4,712 2,486 1,815 334 574 46 76
Income from continuing
operations....................... 8,454 12,676 13,215 14,008 15,204 3,669 4,349
Per Share Data
Income from continuing
operations....................... 1.09 1.64 1.71 1.81 1.96 0.47 0.56
Cash dividend paid................. 0.33 0.40 0.44 0.49 0.57 0.13 0.15
Selected Balance Sheet Items
Total assets....................... 1,038,320 1,086,467 1,123,598 1,106,610 1,336,020 1,269,636 1,370,822
Total securities................... 446,063 509,552 513,399 489,036 540,121 524,785 560,393
Net loans.......................... 448,972 442,661 489,333 502,826 631,537 595,963 635,654
Total deposits..................... 909,703 943,097 969,749 953,904 1,127,914 1,101,171 1,152,799
Long-term debt..................... 10,299 8,821 7,723 12,825 16,832 11,107 16,832
Capital accounts................... 85,571 95,438 108,122 109,509 130,405 116,386 132,043
CARLISLE -- HISTORICAL
Operating Data
Total interest income.............. 5,037 4,237 3,666 5,798 7,378 1,653 1,913
Net interest income................ 2,191 2,253 2,107 3,093 3,584 813 948
Provision for possible loan
losses........................... 151 180 180 65 60 11 17
Income from continuing
operations....................... 641 721 746 873 1,142 211 342
Per Share Data
Income from continuing
operations....................... 4.68 5.84 6.05 6.43 8.25 1.53 2.47
Cash dividend paid................. 1.07 -- 1.65 1.40 1.00 1.00 --
Selected Balance Sheet Items
Total assets....................... 54,064 54,745 54,908 98,066 100,794 97,935 100,998
Total securities................... 17,420 17,104 19,007 36,390 33,672 41,530 36,672
Net loans.......................... 31,460 32,570 30,852 52,518 56,953 48,833 54,924
Total deposits..................... 47,146 46,781 46,357 83,573 84,793 82,412 85,777
Long-term debt..................... 2,700 3,204 3,422 5,850 7,473 5,381 6,959
Capital accounts................... 3,578 4,306 4,847 5,930 7,027 5,899 7,389
PRO FORMA -- COMBINED
Operating Data
Total interest income.............. 89,972 81,807 75,634 79,012 100,113 22,705 26,108
Net interest income................ 38,901 44,764 45,169 46,054 53,069 12,368 13,570
Provision for possible loan
losses........................... 4,863 2,666 1,995 399 634 57 93
Income from continuing
operations....................... 9,095 13,398 13,961 14,881 16,346 3,880 4,691
Per Share Data
Income from continuing
operations....................... 1.11 1.65 1.71 1.82 1.99 0.47 0.57
Cash dividend paid................. 0.33 0.40 0.44 0.49 0.57 0.13 0.15
Selected Balance Sheet Items
Total assets....................... 1,092,384 1,141,212 1,178,506 1,204,676 1,436,814 1,367,571 1,471,820
Total securities................... 463,483 526,656 532,406 525,426 573,793 566,315 597,065
Net loans.......................... 480,432 475,231 520,185 555,344 688,490 644,796 690,578
Total deposits..................... 956,849 989,878 1,016,106 1,037,477 1,212,707 1,183,583 1,238,576
Long-term debt..................... 12,999 12,025 11,145 18,675 24,305 16,488 23,791
Capital accounts................... 89,149 99,744 112,969 115,439 137,432 122,285 139,432
</TABLE>

11
<PAGE> 19

THE CARLISLE SPECIAL MEETING

DATE, TIME AND PLACE

The Carlisle Special Meeting will be held on August 29, 1996, commencing at
10:00 a.m. Central Daylight Time, at the offices of Carlisle, 1590 Union
National Plaza, Little Rock, Arkansas.

PURPOSE OF MEETING

The purpose of the Carlisle Special Meeting is to consider and vote upon
the adoption of the Agreement between Carlisle and First United and to consider
and vote upon the election of Carlisle 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 July 8, 1996 has been fixed by the Board of
Directors of Carlisle as the record date for the determination of holders of
Carlisle common stock entitled to notice of and to vote at the Carlisle Annual
Meeting. At the close of business on June 28, 1996, there were 139,142 shares of
Carlisle common stock outstanding held by 23 shareholders of record. Holders of
record of Carlisle 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 Carlisle common
stock outstanding on the record date is required to adopt the Agreement and the
Election.

As of May 31, 1996, directors, executive officers and their affiliates own
99% of the outstanding stock of Carlisle.

VOTING; SOLICITATION OF PROXIES

Proxies for use at the Carlisle Special Meeting accompany copies of this
Proxy Statement delivered to record holders of Carlisle common stock and such
proxies are solicited on behalf of the Board of Directors of Carlisle. A holder
of Carlisle common stock may use his proxy if he is unable to attend the
Carlisle Annual 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 Carlisle, or by submitting a proxy having a later date, or
by such person appearing at the Carlisle 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.

Carlisle 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 Carlisle acting on
Carlisle's behalf, may solicit proxies personally.

12
<PAGE> 20

THE FIRST UNITED SPECIAL MEETING
DATE, TIME AND PLACE

The First United Special Meeting will be held on August 29, 1996,
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 Carlisle and First United, and to
consider and vote upon two proposed amendments to First United's Articles of
Incorporation.

SHARES OUTSTANDING AND ENTITLED TO VOTE; RECORD DATE

The close of business on July 8, 1996 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 June 28, 1996, there were 7,738,109
shares of First United Common Stock issued and outstanding held by approximately
1,400 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 and each
of the proposed amendments to the Articles of Incorporation. As of May 31, 1996,
directors, executive officers and their affiliates own approximately 15% 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.

THE MERGER

BACKGROUND FOR THE MERGER

From time to time, the Board of Directors and management of Carlisle have
considered various strategies for Carlisle, including merging with a larger
company. The Board of Directors and management determined that it was
appropriate to consider a potential merger or sale of Carlisle. Several
companies were contacted to determine whether they had interest in acquiring
Carlisle by purchase or through a merger transaction. Discussions with First
United ensued. After numerous negotiating sessions, First United and Carlisle
negotiated the Agreement, which was approved by the Board of Directors and
certain shareholders of Carlisle on April 1, 1996.

13
<PAGE> 21

REASON FOR THE MERGER

The acquisition of Carlisle will expand First United's current markets. The
banking subsidiaries of Carlisle are located in Carlisle, Arkansas, Hazen,
Arkansas and Brinkley, Arkansas. Currently, there are no banking offices in the
First United system located in Carlisle, Hazen or Brinkley. Thus, the
acquisition of Carlisle 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 Carlisle, Hazen and Brinkley areas while increasing the earning
power of First United. Moreover, it is the present intention of First United to
merge CBT, Hazen and FirstBank with First United's subsidiary First Bank & Trust
Company, Stuttgart, Arkansas ("Stuttgart") within twelve months after the
Merger. While the respective markets of the four banks do not overlap, Stuttgart
is located in Arkansas County which is contiguous to each of the counties of the
Carlisle Subsidiaries. The combined market area of the four banks will form one
contiguous area and First United believes the combination will result in
operating efficiencies.

FAIRNESS OF THE TRANSACTION

THE BOARDS OF DIRECTORS OF FIRST UNITED AND CARLISLE BELIEVE THAT THE
PROPOSED ACQUISITION TERMS ARE FAIR TO THE STOCKHOLDERS OF BOTH FIRST UNITED AND
CARLISLE 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, Carlisle will be merged with and into
First United in exchange for the issuance by the Company of approximately
500,000 newly issued shares of First United Common Stock to the holders of the
common stock of Carlisle.

The Agreement provides that the stockholders of Carlisle will receive on a
pro rata basis total consideration of $13,025,000, plus after-tax earnings of
Carlisle between January 1, 1996 and the closing date, consisting of fully paid
and nonassessable shares of Common Stock, $1.00 par value of First United. The
number of shares of First United common stock to be exchanged for all of the
issued and outstanding shares of Carlisle Common Stock will be determined by
dividing $13,025,000, plus after-tax earnings of Carlisle between January 1,
1996 and the closing date, 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. Fractional shares of
First United Common Stock shall not be issued and any Carlisle 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. In addition the president of Carlisle subsidiary FirstBank of Arkansas,
Brinkley, Arkansas, will receive First United Common Stock having a value of
approximately $40,000 in satisfaction of options to purchase Carlisle Common
Stock in the future.

The Agreement can be terminated by Carlisle if the First United Common
Stock average price is greater than $32.00. First United may terminate the
Agreement if the First United Common Stock average price is less than $24.00. In
addition, either party may terminate the Agreement, if the Merger is not closed
on or before December 31, 1996 provided that the failure to close is not caused
by a breach of the Agreement by the party seeking to terminate it.

Carlisle has agreed, for the period prior to the consummation of the
merger, to operate its businesses only in the usual, regular and ordinary
course. In addition, Carlisle will use reasonable efforts to maintain and keep
its 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

14
<PAGE> 22

assets prior to the consummation of the Merger. Carlisle has further agreed
that, prior to consummation of the Merger, it 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 Carlisle to obtain any necessary approvals, adversely
affect the ability of First United or Carlisle to perform their covenants and
agreements under the Agreement, or result in any of the conditions to the Merger
not being satisfied. Carlisle 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 Carlisle
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 First United of an
opinion from Arthur Andersen LLP 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.

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 System ("Board") for First
United to acquire Carlisle. 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 applications made to
the Board and Department have been given preliminary approval.

ANTITRUST MATTERS

The Department of Justice has fifteen (15) calendar days after approval by
the Board in which to challenge the proposed Merger on anti-trust
considerations. The approval letter or Order from the Board, therefore will
provide that the Merger may not be consummated until fifteen (15) calendar days
after the effective date of such letter or Order. The letter or Order will also
provide that the transaction must be consummated no later than ninety (90)
calendar days 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

15
<PAGE> 23

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, Carlisle will receive closing tax opinion of tax counsel to Carlisle
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
Carlisle 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 the
material federal income tax consequences of the Merger in the opinion of Shults,
Ray & Kurrus: (i) no gain or loss will be recognized by the Carlisle
stockholders upon the receipt of First United Common Stock in exchange for
Carlisle common stock in connection with the Merger; (ii) the tax basis of the
First United Common Stock to be received by the Carlisle stockholders in
connection with the Merger will be the same as the basis in the Carlisle Common
Stock surrendered in exchange therefor; (iii) the holding period of the First
United Common Stock to be received by the Carlisle stockholders in connection
with the Merger will include the holding period of the Carlisle common stock
surrendered in exchange therefor, provided that Carlisle common stock is held as
a capital asset at the effective time of the Merger; and (iv) the payment of
cash to stockholders of Carlisle 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 Carlisle or First United Common Stock Who
Dissent. A stockholder of Carlisle 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 Carlisle 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 OF FEDERAL INCOME TAX MATTERS SET FORTH ABOVE IS INCLUDED
FOR GENERAL INFORMATION ONLY AND 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 CARLISLE AND FIRST UNITED STOCKHOLDER SHOULD CONSULT HIS
OR HER OWN TAX ADVISOR WITH

16
<PAGE> 24

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 1996
consolidated financial statements to include the assets, liabilities,
stockholders' equity and results of operations of Carlisle 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 CARLISLE 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 CARLISLE, 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 Carlisle 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 Carlisle 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 with Section 4-26-1007 and is
qualified by reference to those statutory sections which are attached hereto by
Annex.

A holder of Carlisle 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 Carlisle
Bancshares, Inc., 300 Spring Building, Suite 1010, Little Rock, Arkansas 72201,
Attention: Daniel C. Horton, Secretary. 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.

17
<PAGE> 25

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 CARLISLE 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 CARLISLE 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 Carlisle 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.

Any written notice of objection to the Agreement pursuant to clause (a) of
the immediately preceding paragraph should be mailed or delivered by a Carlisle
stockholder to Carlisle Bancshares, Inc., 300 Spring Building, Suite 1010,
Little Rock, Arkansas 72201, Attention: Daniel C. Horton, Secretary or by 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 time of the stockholder votes 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 special 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 of not
fewer than thirty (30) nor more than sixty (60) days within 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,

18
<PAGE> 26

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 stockholder's 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

The number of shares of First United Common Stock to be issued pursuant to
the Merger is calculated by dividing $13,025,000, plus after-tax earnings of
Carlisle between January 1, 1996 and the closing date, 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. 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 outstanding shares of Carlisle common stock, which is 139,142. 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, the resulting exchange ratio,
and the value received per share of Carlisle common stock. As set forth below,
Carlisle stockholders will receive shares of First United Common Stock having a
minimum value of $93.61 in exchange for each share of Carlisle common stock. In
addition, the value per share of Carlisle common stock received by Carlisle
stockholders will increase by the amount of Carlisle's earnings, after allowance
for federal and state income taxes, from January 1, 1996 until the closing. For
example, the after tax earnings of Carlisle between January 1, 1996 and March
31, 1996 were $342,000, which earnings would increase the value of First United
Common Stock received per share of Carlisle common stock by $2.46. This table is
for illustration purposes only and should not be relied upon as the actual
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(1)

<TABLE>
<S> <C> <C> <C>
First United Average Sales Price........ $ 24.00 $ 28.00 $ 32.00
Total Purchase Price.................... 13,025,000 13,025,000 13,025,000
First United Common Stock Issued(2)..... 542,708 465,178 407,031
Exchange Ratio for the Merger........... 3.90 3.34 2.92
Value Received per Share of Carlisle(2). 93.61 93.61 93.61
</TABLE>

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

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

(2) The First United Common Stock issued excludes the number of shares of First
United Common Stock that may be issued in such amount as is equal to the
after-tax earnings of Carlisle between January 1, 1996 and the closing date.
The after-tax earnings of Carlisle for the three months ended March 31, 1996
were $342,000. The First United Common Stock issued also excludes the number
of shares of First United Common Stock that may be issued in such amount as
is equal to the intrinsic value of any unexercised Carlisle stock options at
the time of the Merger. First United estimates the intrinsic value of such
Carlisle stock options to approximate $40,000.

EXPENSES OF THE MERGER

First United and Carlisle 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.

19
<PAGE> 27

FINANCIAL INFORMATION

The following unaudited Pro Forma Combining Balance Sheet as of March 31,
1996, and Unaudited Pro Forma Combining Income Statements for the three months
ended March 31, 1996 and 1995 and for the years ended December 31, 1995, 1994,
and 1993 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 Carlisle 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.

20
<PAGE> 28

PRO FORMA COMBINING BALANCE SHEET

ASSETS

<TABLE>
<CAPTION>
AS OF MARCH 31, 1996
----------------------------------------------------------
PRO FORMA PRO FORMA
FIRST UNITED CARLISLE ADJUSTMENTS(1) COMBINED
------------ -------- -------------- ---------
(IN THOUSANDS)
<S> <C> <C> <C> <C>

Cash and due from banks.................. $ 42,898 $ 3,547 $ -- $ 46,445
Short-term investment.................... 73,974 1,445 -- 75,419
Securities available-for-sale............ 361,751 8,718 -- 370,469
Investment securities.................... 198,642 27,954 -- 226,596
Net loans................................ 635,654 54,924 -- 690,578
Premises and equipment................... 26,847 1,454 -- 28,301
Goodwill................................. 11,367 756 -- 12,123
Other real estate owned.................. 564 -- -- 564
Other assets............................. 19,125 2,200 -- 21,325
----------- -------- -------- ----------
Total Assets................... $ 1,370,822 $100,998 $ -- $1,471,820
=========== ======== ======== ==========

LIABILITIES

Total deposits........................... $ 1,152,799 $ 85,777 $ -- $1,238,576
Federal funds purchased and securities
sold under agreements to repurchase.... 53,420 -- -- 53,420
Other liabilities........................ 15,728 873 -- 16,601
Notes payable............................ 16,832 6,959 -- 23,791
----------- -------- -------- ----------
Total Liabilities.............. 1,238,779 93,609 -- 1,332,388
----------- -------- -------- ----------
Capital Accounts
Preferred stock........................ -- -- -- --
Common stock........................... 7,739 155 (155)(2) 8,204
465 (2)
Surplus................................ 10,972 1,863 (1,863)(2) 12,427
1,455 (2)
Undivided profits...................... 113,584 5,880 -- 119,464
Less: Treasury stock................... -- (98) 98 (2) --
Unrealized gains (losses) of securities
Available for sale.................. (252) (411) -- (663)
----------- -------- -------- ----------
Total Capital Accounts......... 132,043 7,389 -- 139,432
----------- -------- -------- ----------
Total Liabilities and Capital
Accounts..................... $ 1,370,822 $100,998 $ -- $1,471,820
=========== ======== ======== ==========
</TABLE>

21
<PAGE> 29

PRO FORMA COMBINING INCOME STATEMENT(1)

<TABLE>
<CAPTION>
FOR THE THREE MONTHS ENDED
MARCH 31, 1996
------------------------------------------
PRO FORMA
FIRST UNITED CARLISLE COMBINED
------------ -------- ----------
(IN THOUSANDS, EXCEPT FOR SHARE DATA)
<S> <C> <C> <C>
Interest income....................................... $ 24,195 $ 1,913 $ 26,108
Interest expense...................................... 11,573 965 12,538
----------- -------- ----------
Net interest income................................... 12,622 948 13,570
Provision for loan losses............................. 76 17 93
----------- -------- ----------
Net interest income after provision for loan losses... 12,546 931 13,477
Other income
Service charges on deposit accounts................. 1,089 124 1,213
Trust department income............................. 438 5 443
Security gains...................................... 59 -- 59
Other operating income.............................. 834 54 888
----------- -------- ----------
Total other income.......................... 2,420 183 2,603
----------- -------- ----------
Other expense
Salaries............................................ 3,534 295 3,829
Pension and other employee benefits................. 1,180 61 1,241
Net occupancy expense............................... 784 41 825
Equipment expense................................... 560 67 627
Data processing expense............................. 431 -- 431
Other operating expenses............................ 2,264 185 2,449
----------- -------- ----------
Total other expense......................... 8,753 649 9,402
----------- -------- ----------
Income before income taxes............................ 6,213 465 6,678
Income tax expense.................................... 1,864 123 1,987
----------- -------- ----------
Income from continuing operations..................... $ 4,349 $ 342 $ 4,691
=========== ======== ==========
Earnings per share(3)................................. $ 0.56 $ 2.47 $ 0.57
=========== ======== ==========
Weighted average shares outstanding................... 7,738,158 138,686 8,203,337
=========== ======== ==========
</TABLE>

22
<PAGE> 30

PRO FORMA COMBINING INCOME STATEMENT(1)

<TABLE>
<CAPTION>
FOR THE THREE MONTHS ENDED
MARCH 31, 1995
------------------------------------------
PRO FORMA
FIRST UNITED CARLISLE COMBINED
------------ -------- ----------
(IN THOUSANDS, EXCEPT FOR SHARE DATA)
<S> <C> <C> <C>
Interest income....................................... $ 21,052 $ 1,653 $ 22,705
Interest expense...................................... 9,497 840 10,337
----------- -------- ----------
Net interest income................................... 11,555 813 12,368
Provision for loan losses............................. 46 11 57
----------- -------- ----------
Net interest income after provision for loan losses... 11,509 802 12,311
Other income
Service charges on deposit accounts................. 948 121 1,069
Trust department income............................. 417 3 420
Security gains...................................... (145) -- (145)
Other operating income.............................. 685 40 725
----------- -------- ----------
Total other income.......................... 1,905 164 2,069
----------- -------- ----------
Other expense
Salaries............................................ 3,104 275 3,379
Pension and other employee benefits................. 892 66 958
Net occupancy expense............................... 678 40 718
Equipment expense................................... 411 51 462
Data processing expense............................. 397 -- 397
Other operating expenses............................ 2,706 246 2,952
----------- -------- ----------
Total other expense......................... 8,188 678 8,866
----------- -------- ----------
Income before income taxes............................ 5,226 288 5,514
Income tax expense.................................... 1,557 77 1,634
----------- -------- ----------
Income from continuing operations..................... $ 3,669 $ 211 $ 3,880
=========== ======== ==========
Earnings per share(3)................................. $ 0.47 $ 1.53 $ 0.47
=========== ======== ==========
Weighted average shares outstanding................... 7,738,158 138,135 8,199,529
=========== ======== ==========
</TABLE>

23
<PAGE> 31

PRO FORMA COMBINING INCOME STATEMENT(1)

<TABLE>
<CAPTION>
FOR THE YEAR ENDED
DECEMBER 31, 1995
------------------------------------------
PRO FORMA
FIRST UNITED CARLISLE COMBINED
------------ -------- ----------
(IN THOUSANDS, EXCEPT FOR SHARE DATA)
<S> <C> <C> <C>
Interest income....................................... $ 92,735 $ 7,378 $ 100,113
Interest expense...................................... 43,250 3,794 47,044
----------- -------- ----------
Net interest income................................... 49,485 3,584 53,069
Provision for loan losses............................. 574 60 634
----------- -------- ----------
Net interest income after provision for loan losses... 48,911 3,524 52,435
Other income
Service charges on deposit accounts................. 4,227 488 4,715
Trust department income............................. 1,799 68 1,867
Security gains...................................... (108) -- (108)
Other operating income.............................. 1,887 194 2,081
----------- -------- ----------
Total other income.......................... 7,805 750 8,555
----------- -------- ----------
Other expense
Salaries............................................ 13,288 1,112 14,400
Pension and other employee benefits................. 4,209 253 4,462
Net occupancy expense............................... 2,924 165 3,089
Equipment expense................................... 1,766 234 2,000
Data processing expense............................. 1,705 -- 1,705
Other operating expenses............................ 10,752 853 11,605
----------- -------- ----------
Total other expense......................... 34,644 2,617 37,261
----------- -------- ----------
Income before income taxes............................ 22,072 1,657 23,729
Income tax expense.................................... 6,868 515 7,383
----------- -------- ----------
Income from continuing operations..................... $ 15,204 $ 1,142 $ 16,346
=========== ======== ==========
Earnings per share(3)................................. $ 1.96 $ 8.25 $ 1.99
=========== ======== ==========
Weighted average shares outstanding................... 7,738,158 138,352 8,200,254
=========== ======== ==========
</TABLE>

24
<PAGE> 32

PRO FORMA COMBINING INCOME STATEMENT(1)

<TABLE>
<CAPTION>
FOR THE YEAR ENDED
DECEMBER 31, 1994
------------------------------------------
PRO FORMA
FIRST UNITED CARLISLE COMBINED
------------ -------- ----------
(IN THOUSANDS, EXCEPT FOR SHARE DATA)
<S> <C> <C> <C>
Interest income....................................... $ 73,214 $ 5,798 $ 79,012
Interest expense...................................... 30,253 2,705 32,958
----------- -------- ----------
Net interest income................................... 42,961 3,093 46,054
Provision for loan losses............................. 334 65 399
----------- -------- ----------
Net interest income after provision for loan losses... 42,627 3,028 45,655
Other income
Service charges on deposit accounts................. 3,229 426 3,655
Trust department income............................. 1,379 57 1,436
Security gains...................................... 9 -- 9
Other operating income.............................. 1,530 146 1,676
----------- -------- ----------
Total other income.......................... 6,147 629 6,776
----------- -------- ----------
Other expense
Salaries............................................ 11,071 970 12,041
Pension and other employee benefits................. 3,644 219 3,863
Net occupancy expense............................... 2,435 144 2,579
Equipment expense................................... 1,318 182 1,500
Data processing expense............................. 1,511 49 1,560
Other operating expenses............................ 8,818 879 9,697
----------- -------- ----------
Total other expense......................... 28,797 2,443 31,240
----------- -------- ----------
Income before income taxes............................ 19,977 1,214 21,191
Income tax expense.................................... 5,969 341 6,310
----------- -------- ----------
Income from continuing operations..................... $ 14,008 $ 873 $ 14,881
=========== ======== ==========
Earnings per share(3)................................. $ 1.81 $ 6.43 $ 1.82
=========== ======== ==========
Weighted average shares outstanding................... 7,738,158 135,679 8,191,326
=========== ======== ==========
</TABLE>

25
<PAGE> 33

PRO FORMA COMBINING INCOME STATEMENT(1)

<TABLE>
<CAPTION>
FOR THE YEAR ENDED
DECEMBER 31, 1993
------------------------------------------
PRO FORMA
FIRST UNITED CARLISLE COMBINED
------------ -------- ----------
(IN THOUSANDS, EXCEPT FOR SHARE DATA)
<S> <C> <C> <C>
Interest income....................................... $ 71,968 $ 3,666 $ 75,634
Interest expense...................................... 28,905 1,560 30,465
----------- -------- ----------
Net interest income................................... 43,063 2,106 45,169
Provision for loan losses............................. 1,815 180 1,995
----------- -------- ----------
Net interest income after provision for loan losses... 41,248 1,926 43,174
Other income
Service charges on deposit accounts................. 3,280 236 3,516
Trust department income............................. 1,515 54 1,569
Security gains...................................... 144 100 244
Other operating income.............................. 1,724 91 1,815
----------- -------- ----------
Total other income.......................... 6,663 481 7,144
----------- -------- ----------
Other expense
Salaries............................................ 10,356 515 10,871
Pension and other employee benefits................. 3,211 125 3,336
Net occupancy expense............................... 2,215 73 2,288
Equipment expense................................... 1,267 72 1,339
Data processing expense............................. 1,744 50 1,794
Other operating expenses............................ 10,284 464 10,748
----------- -------- ----------
Total other expense......................... 29,077 1,299 30,376
----------- -------- ----------
Income before income taxes............................ 18,834 1,108 19,942
Income tax expense.................................... 5,619 362 5,981
----------- -------- ----------
Income from continuing operations..................... $ 13,215 $ 746 $ 13,961
=========== ======== ==========
Earnings per share(3)................................. $ 1.71 $ 6.05 $ 1.71
=========== ======== ==========
Weighted average shares outstanding................... 7,738,158 123,422 8,150,387
=========== ======== ==========
</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 465,178 shares of
First United Common Stock in exchange for all common stock and the
retirement of Carlisle 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 $28.00 for these Pro Forma Combining Financial Statements. The
First United Common Stock issued excludes the number of shares of First
United Common Stock that may be issued in such amount as is equal to the
after-tax earnings of Carlisle between January 1, 1996 and the closing date.
The after-tax earnings of Carlisle for the three months ended March 31, 1996
were $342,000. The First United Common Stock issued also excludes the number
of shares of First United Common Stock that may be issued in such amount as
is equal to the intrinsic value of any unexercised Carlisle stock options at
the time of the Merger. First United estimates the intrinsic value of such
Carlisle stock options to approximate $40,000.

(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 $24.00 and $32.00,
respectively, pursuant to the Agreement.

<TABLE>
<CAPTION>
$24.00 $32.00
------ ------
<S> <C> <C>
Year ended December 31, 1993......................................... $ 1.70 $ 1.72
Year ended December 31, 1994......................................... 1.80 1.83
Year ended December 31, 1995......................................... 1.97 2.01
Three months ended March 31, 1995.................................... .47 .48
Three months ended March 31, 1996.................................... .57 .58
</TABLE>

27
<PAGE> 35

ELECTION BY CARLISLE STOCKHOLDERS UNDER THE 1987 ACT

ELECTION INCIDENTAL TO THE MERGER

THE ELECTION BY THE STOCKHOLDERS OF CARLISLE 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

Carlisle 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 Carlisle 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 Carlisle
common stock will authorize Carlisle 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 Carlisle
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, 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
than 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.

28
<PAGE> 36

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
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 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.

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<PAGE> 37

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 extent 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."

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. Between 1981 and 1995, First United acquired six
other banks in different cities within Arkansas and Texas. The banks acquired
were the First National Bank of Magnolia, Magnolia, Arkansas; Merchants and
Planters Bank, N.A. of Camden, Camden, Arkansas; City National Bank of Fort
Smith, Fort Smith, Arkansas; Commercial Bank at Alma, Alma, Arkansas; The Bank
of North Arkansas, Melbourne, Arkansas; First Stuttgart Bank & Trust Company,
Stuttgart, Arkansas; and FirstBank, Texarkana, Texas. Each of the banks are
wholly-owned by First United, and, furthermore, are banks organized under the
laws of the United States, Arkansas or Texas and are regulated by the Office of
the Comptroller of the Currency, the Federal Reserve System, the Arkansas Bank
Department or the Texas Department of Banking. As of March 31, 1996, these banks
had a total of $646,323,000 of loans outstanding, an allowance for loan losses
of $10,669,000, total deposits of $1,152,799,000 and total stockholders' equity
of $126,319,000. In 1996 First United Trust Company was chartered as a
wholly-owned subsidiary of First United to handle and expand trust business
formerly done by First United's subsidiary banks.

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

30
<PAGE> 38

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 appreciation 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 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 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 $1,000,000 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 subsidiary 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
capital requirements more sensitive to differences in risk profiles among
banking organizations, takes off-balance sheet exposures into account in
assessing capital adequacy, and minimizes disincen-

31
<PAGE> 39

tives 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 1995 Tier 1 ratio of
15.67% and Total capital ratio of 10.35% exceeds the current minimum regulatory
requirements of 4.00% and 6.00% respectively.

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

REGULATORY COMPARISON OF CAPITAL RATIOS(1)

<TABLE>
<CAPTION>
REGULATORY
MARCH 31, 1996 FIRST UNITED REQUIREMENTS
-------------- ------------ ------------
<S> <C> <C>
Total Capital/Total Assets.................................. 10.35% 6.00%
Primary Capital/Total Assets................................ 10.35% 5.50%
Total Risk-Based Capital.................................... 16.92% 8.00%
Tier 1 Capital.............................................. 15.67% 4.00%
Leverage Ratio.............................................. 8.90% 3.00%
</TABLE>

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

(1) Excludes unrealized gains and losses on securities available-for-sale.

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 Subsidiary Banks to First United
if the amount of adjusted capital, surplus and retained earnings is below
defined regulatory limits. As of December 31, 1995 First United's Subsidiary
Banks had available for payment of dividends without regulatory approval,
approximately $3,735,000 of undistributed earnings plus the net income earned in
1996. 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, 1995, First United and its Subsidiary Banks had
approximately 578 full-time equivalent employees.

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 24,000,000 shares of Common Stock, $1.00 par value. As of June 28, 1996 there
were 7,738,109 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

32
<PAGE> 40

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 Carlisle stockholder who may be deemed to be an "affiliate"
of Carlisle 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 Carlisle) for at least 30 days of
combined operations are published. This restriction is expected to expire by
October 21, 1996. See also "Carlisle Bancshares, Inc. -- Resulting Ownership in
First United".

CARLISLE BANCSHARES, INC.

DESCRIPTION OF BUSINESS

Carlisle is a multi-bank holding company which owns 100% of the common
stock of Citizens Bank & Trust Company, Carlisle, Arkansas ("CBT"), Hazen First
State Bank, Hazen, Arkansas ("Hazen") and FirstBank of Arkansas, Brinkley,
Arkansas ("FirstBank") respectively. Carlisle 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.
The subsidiaries grant commercial, installment and real estate loans to
customers principally in Lonoke County, Prairie County and Monroe County,
Arkansas. As of March 31, 1996, these subsidiaries had a total of $56,146,000 of
loans outstanding, an allowance for loan losses of $1,222,000, total deposits of
$85,777,000 and total stockholders' equity of $7,389,000.

MANAGEMENT'S DISCUSSION AND ANALYSIS

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

BALANCE SHEET ANALYSIS

Financial Condition. The total assets of Carlisle increased by $2,728,000
or 2.8% between December 31, 1995 and 1994. The increase was due primarily to
growth in the loan portfolio. At March 31, 1996 assets were $100,998,000
compared to the December 31, 1995 level of $100,794,000. Carlisle 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 for an analysis of the average balances of
interest-earning assets and interest-bearing liabilities for the years ended
December 31, 1995 and 1994.

Carlisle's loan portfolio represents the largest component of the earning
asset base and has the largest impact on income from earning assets. The markets
in which Carlisle operates are dependent upon the agribusiness economic sector.
Due to the seasonal nature of agricultural production, the volume of loans and
investment securities fluctuate relative to the agribusiness cycle. This
accounts for the decrease in loans and increase in investment securities at
March 31, 1996 compared to the December 31, 1995 levels.

Inherent in Carlisle's loan portfolio is credit risk. Carlisle maintains an
allowance for loan losses which is evaluated for adequacy by management.
Management's methodology to determine the adequacy of the allowance considers
reviews of individual loans, recent loan loss experience, current economic
conditions and

33
<PAGE> 41

the risk characteristics of the various categories of loans. See Tables 5
through 9 for detailed information concerning the loan portfolio and the
allowance for loan losses.

Investment securities are the second largest component of the earning asset
base. The average volume of investment securities has remained relatively stable
during the three months ended March 31, 1996 and the years ended December 31,
1995 and 1994. See Tables 3 and 4 for details concerning the composition and
maturity ranges of the investment portfolio.

Deposits, the primary source of funding earning assets, increased by
$1,220,000 or 1.5% between December 31, 1994 and December 31, 1995 and by
$984,000 or 1.2% between December 31, 1995 and March 31, 1996. The majority of
the increase in deposits for the indicated periods has occurred in the
certificate of deposits category reflecting the increase in market interest
rates for such deposits. See Table 10 for a maturity analysis of certificates of
deposits in excess of $100,000 as of December 31, 1995.

During 1995, Carlisle increased the level of borrowings from the Federal
Home Loan Bank in order to provide funds for the increase in loan growth.

Liquidity and Interest Rate Sensitivity Management. Liquidity is the
ability of an institution to fund the needs of its borrowers, depositors and
creditors. Based on the maturity structure and anticipated loan and deposit
funding requirements, Carlisle anticipates that its liquidity requirements will
be met in the foreseeable future. Carlisle's management is of the opinion that
the traditional funding sources of maturing loans and investment securities,
federal funds, the base of core deposits, the seasonal borrowing line of credit
with the Federal Reserve Bank ($3 million at December 31, 1995 and 1994) will be
adequate to provide liquidity needs. See Tables 4, 6 and 10 for additional
information on certain investment, loan and time deposit maturities.

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 March 31, 1996, Carlisle's Tier 1 capital and total capital as a
percentage of total risk-adjusted assets exceeded the required minimum levels.
See Table 11 for additional information concerning Carlisle's capital ratios.

EARNINGS ANALYSIS

Net income for the first three months of 1996 was approximately $342,000,
an increase of $131,000 or 62.1% over the same period in 1995. The increase was
due primarily to a $135,000 or 16.6% increase in net interest income and a
$44,000 reduction in FDIC and State Bank Department insurance assessments. For
the years ended December 31, 1995, 1994, and 1993, net income was approximately
$1,142,000, $873,000, and $746,000, respectively. The annualized return on
average assets and return on average equity for the first three months of 1996
was 1.3% and 19.0%, respectively, compared to 0.9% and 14.3% for the first three
months of 1995. For the years ended December 31, 1995, 1994 and 1993, the return
on average assets was 1.1%, 0.9%, and 1.4%, respectively, while the return on
average equity was 17.8%, 16.2%, and 16.3% respectively. As more fully discussed
in Note 2 of Notes to Consolidated Financial Statements included elsewhere
herein, Carlisle acquired Hazen and FirstBank during 1994. The effect of these
acquisitions must be considered when making comparisons of 1994 operating
results and ratios with other periods.

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

Net Interest Income. Net interest income for the first three months of 1996
was $948,000, a 16.6% increase over the same period in 1995. The primary reason
for the increase was an increase of approximately .5% in the yield on average
loans during the period. Interest on loans for the three months ended March 31,

34
<PAGE> 42

1996 increased by $238,000 or 22.1% compared to the corresponding period of
1995. As a percentage of total assets at March 31, 1996, loans totaled 54.4%
while investment securities were 36.3%.

For the years ended December 31, 1995, 1994, and 1993, net interest income
was $3,584,000, $3,093,000 and $2,107,000, respectively. The increase during
1995 compared to 1994 was due primarily to the increase in the net yield on
interest earning assets. The 1994 increase compared to 1993 was due primarily to
the increase in the volume of interest-earning assets resulting from the Hazen
and FirstBank acquisitions. See Tables 1 and 2 for more detailed information
regarding rate and volume factors which affected net interest income during the
three-year period ended December 31, 1995.

Provision for Loan Losses. For the first three months of 1996 Carlisle
provided $17,000 for loan losses compared to $11,000 for the comparable period
in 1995. The provision for loan losses was $60,000, $65,000 and $180,000 for the
years ended December 31, 1995, 1994 and 1993.

Net charge-offs on loans were $90,000 in 1995, $55,000 in 1994 and $1,000
in 1993. For the three months ended March 31, 1996, net charge-offs totaled
$10,000. The allowance for loan losses was $1,222,000 or 2.2% of loans at March
31, 1996, compared to $1,215,000 or 2.1% at December 31, 1995, and $1,245,000 or
2.3% at December 31, 1994. See Tables 7, 8 and 9 for more information regarding
loan quality and the allowance for loan losses.

Non-Interest Income. Total non-interest income for the three months ended
March 31, 1996 and 1995, was $183,000 and $164,000, respectively. Total
non-interest income for the year ended December 31, 1995 was $750,000, as
compared to $629,000 for 1994 and $481,000 in 1993. The increase in 1995 versus
1994 and in 1994 versus 1993 was primarily due to the effects of the 1994
acquisitions of Hazen and FirstBank.

Non-Interest Expense. Total non-interest expense for the three months ended
March 31, 1996 and 1995 was $649,000 and $678,000, respectively. The decrease
was due primarily to a decrease in 1996 of $44,000 in FDIC and State Bank
Department insurance assessments.

Total non-interest expense for the year ended December 31, 1995 was
$2,617,000 as compared to $2,443,000 for 1994 and $1,299,000 in 1993. The
increases for each of the years 1995 and 1994 were primarily due to the effects
of the acquisitions of Hazen and FirstBank during 1994.

Provision for Income Taxes. Income tax expense for the three months ended
March 31, 1996 and 1995 was $123,000 and $77,000, respectively, or effective tax
rates of 26.5% and 26.6%, respectively. Income tax expense for the years ended
December 31, 1995, 1994 and 1993 was $515,000, $341,000 and $362,000,
respectively. Effective tax rates were 31.1%, 28.1%, and 32.7% for 1995, 1994,
1993, respectively. Note 12 of Notes to the Consolidated Financial Statements
provides further details of the applicable income tax expense for 1995, 1994 and
1993.

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, Carlisle is required to comply with the Arkansas usury laws on loans made
within the State of Arkansas.

ACCOUNTING STANDARDS

35
<PAGE> 43

and goodwill related to assets to be held and used, and long-lived assets to be
disposed of, is not expected to have a significant impact on Carlisle's
consolidated financial statements.

STATISTICAL DISCLOSURES

CARLISLE BANCSHARES, INC.
STATISTICAL DISCLOSURES

TABLE 1 -- COMPARATIVE AVERAGE BALANCES -- YIELDS AND RATES ($ in thousands)

The table below shows the average balances of the assets and liabilities of
Carlisle, the interest income or expense associated with those assets and
liabilities, and the computed yield or rate (annualized in 1994 for the
acquisition of FirstBank) based upon the interest income or expense for each of
the last two years.

<TABLE>
<CAPTION>
1995 1994
---------------------------- ---------------------------
AVERAGE YIELD/ AVERAGE YIELD/
BALANCE INTEREST RATE BALANCE INTEREST RATE
-------- -------- ------ ------- -------- ------
<S> <C> <C> <C> <C> <C> <C>
ASSETS
Interest-earning assets:
Loans...................................... $ 56,238 $ 5,178 9.21% $54,108 $ 4,039 8.19%
Investment securities:
Taxable................................. 34,657 2,010 5.80% 34,820 1,568 4.82%
Tax-Exempt.............................. 1,775 119 6.70% 2,066 121 5.86%
Federal funds sold......................... 1,089 60 5.51% 2,259 58 2.97%
Other...................................... 295 11 3.73% 362 12 3.59%
-------- ------- ------- -------
Total interest-earning assets................ 94,054 7,378 7.84% 93,615 5,798 6.74%
Non-interest-earning assets:
Cash and due from banks.................... 3,290 3,925
Other assets............................... 4,562 2,029
Allowance for loan losses.................. (1,226) (1,242)
-------- -------
Total.............................. $100,680 $98,327
======== =======
LIABILITIES AND SHAREHOLDERS' EQUITY
Interest-bearing liabilities:
Demand deposits............................ $ 26,159 $ 676 2.58% $27,753 $ 633 2.50%
Savings deposits........................... 3,810 96 2.52% 4,459 100 2.44%
Time deposits.............................. 43,409 2,311 5.32% 41,746 1,539 4.01%
Federal funds purchased(1)................. 2,511 150 5.97% 1,483 59 4.11%
Note payable............................... 3,870 342 8.84% 3,195 262 8.20%
FHLB advances.............................. 2,315 155 6.70% 1,704 103 6.75%
Other...................................... 1,003 64 6.38% 238 9 4.20%
-------- ------- ------- -------
Total interest-bearing liabilities........... 83,077 3,794 4.57% 80,578 2,705 3.63%
Non-interest-bearing liabilities:
Demand deposits............................ 10,269 10,764
Other...................................... 916 1,597
-------- -------
11,185 12,361
Shareholders' equity......................... 6,418 5,388
-------- -------
Total.............................. $100,680 $98,327
======== =======
Net interest earnings........................ $ 3,584 $ 3,093
======= =======
Net yield on interest-earning assets......... 3.81% 3.62%
</TABLE>

36
<PAGE> 44

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

(1) The amount of federal funds purchased at December 31, 1995 was $585,000 and
the weighted average interest rate thereon was 5.36%. The maximum amount of
such borrowings outstanding at any month-end during 1995 was $5,345,000.

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.

TABLE 2 -- VOLUME AND YIELD/RATE VARIANCE ANALYSIS

The following table shows the change from year to year for each component
of the net interest margin separated into the amount generated by volume changes
and the amount generated by changes in the yield or rate ($ in thousands):

<TABLE>
<CAPTION>
1995 COMPARED TO 1994 1994 COMPARED TO 1993
CHANGE DUE TO: CHANGE DUE TO:
-------------------------- --------------------------
YIELD/ YIELD/
VOLUME RATE NET VOLUME RATE NET
------ ------ ------ ------ ------ ------
<S> <C> <C> <C> <C> <C> <C>
INTEREST EARNED ON:
Loans...................................... $163 $ 976 $1,139 $1,787 $ (410) $1,377
Investment securities:
Taxable.................................. (7) 449 442 887 (140) 747
Tax-exempt............................... (18) 16 (2) (47) 24 (23)
Federal funds sold....................... (41) 43 2 30 (6) 24
Other.................................... (2) 1 (1) 8 (1) 7
---- ------ ------ ------ ------ ------
Total interest-earning assets.... $ 95 $1,485 $1,580 $2,665 $ (533) $2,132
==== ====== ====== ====== ====== ======
INTEREST PAID ON:
Interest-bearing demand deposits........... $(32) $ 75 $ 43 $ 290 $ (37) $ 253
Savings deposits........................... (16) 12 (4) 49 (2) 47
Time deposits.............................. 64 708 772 665 (41) 624
Federal funds purchased.................... 53 38 91 58 0 58
Note payable............................... 58 22 80 62 62 124
FHLB advances.............................. 40 12 52 47 (4) 43
Other...................................... 45 10 55 (2) (1) (3)
---- ------ ------ ------ ------ ------
Total interest-bearing
liabilities.................... $212 $ 877 $1,089 $1,169 $ (23) $1,146
==== ====== ====== ====== ====== ======
</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. The balances of nonaccrual loans and
related income recognized have been included for purposes of these computations.

37
<PAGE> 45

TABLE 3 -- INVESTMENT PORTFOLIO

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

<TABLE>
<CAPTION>
DECEMBER 31,
-------------------
1995 1994
------- -------
<S> <C> <C>
HELD-TO-MATURITY
U.S. Treasury and U.S. Government agencies............................... $20,949 $25,159
Obligations of states and political subdivisions......................... 1,740 1,986
Other securities......................................................... 638 791
------- -------
Total Debt Securities.......................................... 23,327 27,936
Equity Securities........................................................ 0 0
------- -------
Total Held-to-Maturity Investment Securities................... $23,327 $27,936
======= =======
AVAILABLE-FOR-SALE
U.S. Treasury and U.S. Government agencies............................... $ 9,480 $ 8,237
Obligations of states and political subdivisions......................... 133 204
Other securities......................................................... 0 0
------- -------
Total Debt Securities.......................................... 9,613 8,441
Equity Securities........................................................ 732 13
------- -------
Total Available-for-Sale Investment Securities................. $10,345 $ 8,454
======= =======
</TABLE>

TABLE 4 -- MATURITY DISTRIBUTION AND YIELDS OF INVESTMENT PORTFOLIO

The following table details the maturities of investment securities at
December 31, 1995 and the weighted average yield for each range of maturities ($
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>
HELD-TO-MATURITY
U.S. Treasury and U.S. Government
Agencies......................... $12,615 5.84 % $6,102 6.18 % $1,216 7.32 % $1,016 7.71 % $20,949
Obligations of states and political
securities....................... 195 5.98 % 1,150 6.04 % 295 5.61 % 100 6.42 % 1,740
Other securities................... 102 5.45 % 451 7.59 % 0 0 % 85 9.93 % 638
------- ------ ------ ------ -------
Total Debt Securities...... $12,912 5.84 % $7,703 6.24 % $1,511 6.99 % $1,201 7.76 % 23,327
======= ====== ====== ======
Equity securities.................. 0
-------
Total Held-to-Maturity
Investment Securities.... $23,327
=======
AVAILABLE-FOR-SALE
U.S. Treasury and U.S. Government
Agencies......................... $ 2,380 5.01 % $7,087 4.86 % $ 13 9.26 % $ 0 0 % $ 9,480
Obligations of states and political
subdivisions..................... 6 0 % 0 0 % 0 0 % 127 7.73 % 133
Other securities................... 0 0 % 0 0 % 0 0 % 0 0 % 0
------- ------ ------ ------ -------
Total Debt Securities...... $ 2,386 $7,087 $ 13 $ 127 9,613
======= ====== ====== ======
Equity securities.................. 732
-------
Total Available-for-Sale
Investment Securities.... $10,345
=======
</TABLE>

38
<PAGE> 46

At December 31, 1995 there were no securities in the portfolio of any one
issuer with a carrying value exceeding ten percent of total stockholders'
equity. At December 31, 1995, Carlisle held $18,888 of municipal bonds which are
in default. The accrual of interest income on the bonds has been discontinued.

TABLE 5 -- COMPOSITION OF THE LOAN PORTFOLIO ($ in thousands)

<TABLE>
<CAPTION>
1995 1994
------- -------
<S> <C> <C>
Commercial, Financial and Agricultural................................... $24,263 $27,063
Real Estate -- Construction.............................................. 2,370 1,473
Real Estate -- Mortgage.................................................. 25,362 21,463
Consumer Loans........................................................... 6,173 3,765
------- -------
Total Loans.................................................... $58,168 $53,764
======= =======
</TABLE>

TABLE 6 -- LOAN MATURITIES AND SENSITIVITY TO CHANGES IN INTEREST RATES
($ in thousands):

<TABLE>
<CAPTION>
MATURING
----------------------------------------
ONE YEAR
WITHIN ONE THROUGH AFTER
YEAR OR LESS FIVE YEARS FIVE YEARS TOTAL
------------ ---------- ---------- -------
<S> <C> <C> <C> <C>
Total Loans(1)..................................... $ 32,449 $ 21,107 $4,612 $58,168
======== ======== ====== =======

</TABLE>

<TABLE>
<CAPTION>
MATURING
ONE YEAR
THROUGH AFTER
FIVE YEARS FIVE YEARS
------- ------
<S> <C> <C>
Above loans due after one year which have:
Predetermined interest rates..................... $ 20,228 $4,612
Floating interest rates.......................... 879 0
-------- ------
$ 21,107 $4,612
======== ======
</TABLE>

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

(1) The maturity information by loan type was not available.

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

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

<TABLE>
<CAPTION>
DECEMBER 31,
-------------
1995 1994
---- ----
<S> <C> <C>
Loans accounted for on a nonaccrual basis............................. $543 $645
Restructured loans.................................................... 0 0
---- ----
Non-performing loans................................................ $543 $645
==== ====
Accruing loans past due 90 days or more............................... $193 $ 0
==== ====
</TABLE>

If interest on nonaccrual loans had been accrued for 1995, such income
would not have been material. The interest which was included in earnings for
1995 for nonaccrual loans is immaterial.

At December 31, 1995, Carlisle had no loan concentrations greater than ten
percent (10%) of total loans except as shown in Table 5.

Carlisle 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

39
<PAGE> 47

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, 1995, Carlisle
has no loans which are not included in the non-performing or past due categories
above about which management has serious doubts as to their collectibility.

TABLE 8 -- ANALYSIS OF THE ALLOWANCE FOR LOAN LOSSES

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

<TABLE>
<CAPTION>
YEAR ENDED
DECEMBER 31,
-----------------
1995 1994
------ ------
<S> <C> <C>
Amount of loan loss reserve at beginning of period................. $1,245 $ 824
Loans charged off:
Real Estate -- Mortgage.......................................... (88) (66)
Commercial, Financial and Agricultural........................... (33) (9)
Consumer......................................................... (11) (17)
------ ------
Total charge-offs........................................ (132) (92)

Recoveries on loans previously charged off:
Real Estate -- Mortgage.......................................... 5 6
Commercial, Financial and Agricultural........................... 27 16
Consumer......................................................... 10 14
------ ------
Total recoveries......................................... 42 36
------ ------
Net charge-offs.................................................... (90) (56)
Additions to allowance charged to operating expense(1)............. 60 65
------ ------
Allowances of acquired subsidiaries................................ 0 412
------ ------
Amount of loan loss reserve at end of period....................... $1,215 $1,245
====== ======
Percentage of net charge-offs during period to average loans
outstanding during the period.................................... 0.16% 0.10%
====== ======
</TABLE>

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

(1) The amount charged to operations and the related balance in the allowance
for loan losses is based upon periodic evaluations of the loan portfolio by
management. These evaluations consider several factors including, but not
limited to, general economic conditions, loan portfolio composition, prior
loan loss experience, and management's reviews of individual loans.

TABLE 9 -- ALLOCATION OF THE ALLOWANCE FOR LOAN LOSSES

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

<TABLE>
<CAPTION>
DECEMBER 31,
----------------------------------------
% LOANS % LOANS
IN EACH IN EACH
1995 CATEGORY 1994 CATEGORY
------ -------- ------ --------
<S> <C> <C> <C> <C>
Commercial, Financial and Agricultural............ $ 680 42% $ 697 50%
Real Estate -- Construction....................... 12 4% 8 3%
Real Estate -- Mortgage........................... 243 44% 251 40%
Consumer.......................................... 50 10% 49 7%
Unallocated....................................... 230 240
------ ------
$1,215 $1,245
====== ======
</TABLE>

40
<PAGE> 48

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

The table below shows maturities on outstanding time deposits of $100,000
or more at December 31, 1995 ($ in thousands):

<TABLE>
<CAPTION>
CERTIFICATES
OF DEPOSIT
------------
<S> <C>
3 months or less........................................................ $ 4,444
Over 3 months through 6 months.......................................... 4,326
Over 6 months through 12 months......................................... 2,286
Over 12 months.......................................................... 400
--------
$ 11,456
========
</TABLE>

TABLE 11 -- RETURN ON EQUITY AND ASSETS

The following table shows consolidated operating and equity ratios of
Carlisle for each of the last two years:

<TABLE>
<CAPTION>
YEAR ENDED
DECEMBER 31,
---------------
1995 1994
----- -----
<S> <C> <C>
Return on assets..................................................... 1.13% .89%
Return on equity..................................................... 17.79% 16.20%
Dividend payout ratio................................................ 12.12% 21.77%
Equity to assets ratio............................................... 6.37% 5.48%
</TABLE>

41
<PAGE> 49

DIRECTORS AND EXECUTIVE OFFICERS

The Board of Directors of Carlisle will be dissolved and positions held by
executive officers of Carlisle will no longer exist upon the consummation of the
Merger. The present directors and executive officers of the Carlisle
subsidiaries are expected to remain in their respective positions with CBT,
Hazen and FirstBank, except for Daniel C. Horton, Barry L. McKuin and M. S.
Woodruff who are expected to resign their director and officer positions
indicated below. Upon consummation of the Merger Robert M. Koch, President and
Chief Executive Officer of First United's subsidiary First Stuttgart Bank &
Trust Company, will be elected to the boards of directors of the Carlisle
subsidiaries and will be elected President and Chief Executive Officer of CBT
and Hazen to replace Mr. Horton who previously held these positions. At this
time none of the directors or executive officers of Carlisle are expected to be
on the Board of Directors or an executive officer of First United after
consummation of the Merger. The directors of Carlisle and its subsidiaries are
set forth below:

DIRECTORS AND EXECUTIVE OFFICERS OF CARLISLE AND ITS SUBSIDIARIES

<TABLE>
<CAPTION>
SHARES OF
CARLISLE COMMON
STOCK OWNED
BENEFICIALLY AS
OF MAY 15, 1996
PRINCIPAL OCCUPATION, AND PERCENT OF
DIRECTOR(1) EXECUTIVE OFFICER POSITION CLASS IF MORE
NAME AGE SINCE AND DIRECTORSHIP THAN 1%
- --------------------------- --- ----------- ------------------------------ -----------------
<S> <C> <C> <C> <C> <C>
Harold Hardwick 48 1994 Banker; Director of Carlisle; 3,486 (2.5%)
President and Director of
FirstBank
Tommy Hillman 60 1994 President, Winrock Farms, 15,072 (10.8%)
Inc.; Director of Carlisle and
the Carlisle Subsidiaries
Daniel C. Horton 55 1985 Bank Consultant and Banker; 11,950 (8.6%)
Director of Carlisle and the
Carlisle Subsidiaries;
President and CEO of CBT and
Hazen; Chairman of FirstBank
Barry L. McKuin 51 1985 Financial Manager; Director 10,450 (7.5%)
and President of Carlisle;
Director of the Carlisle
Subsidiaries
Ben Myers 51 1994 Pharmacist; Director of 619
FirstBank
Robert Petter 60 1983 Farmer; Director of Hazen 248
Winthrop P. Rockefeller 47 1985 Chairman, Winrock Farms, Inc.; 84,853 (61%)
Director and Chairman of
Carlisle
Bill J. Shoup 59 1980 Executive Vice President CBT; 50
Director of CBT
Randall Snider 40 1986 Farmer; Director of CBT 50
Dewey Snowden 66 1972 Retired School Superintendent; 1
Director of FirstBank
Ralph Wilson 63 1994 Dr. of Optometry; Director of 619
FirstBank
M. Gaines Young, Jr. 61 1994 Senior Vice President CBT; 50
Director of CBT
M.S. Woodruff 68 1985 Retired Banker; Director of 10,450 (7.5%)
Carlisle and CBT; Chairman of
CBT
</TABLE>

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

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

42
<PAGE> 50

During 1995, the Board of Directors of Carlisle held one meeting and all
the incumbent directors then in office were in attendance. The Board of
Directors does not have a nominating, compensation or audit committee.

TRANSACTIONS WITH MANAGEMENT

Directors and executive officers of Carlisle 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
Carlisle in the ordinary course of business during 1995. 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 March 31, 1996, the aggregate of these related party loans was
approximately $717,000 or approximately 1.5% of total loans outstanding of the
subsidiaries.

PRINCIPAL STOCKHOLDERS OF CARLISLE

All persons who as of May 15, 1996, owned of record or beneficially more
than five (5%) of the Carlisle Common Stock and the number of shares owned
beneficially by each of them are reflected in the foregoing table.

All directors and executive officers of Carlisle and its subsidiaries as a
group (13 persons) and members of their immediate families and associates as of
May 15, 1996 owned 137,898 shares or 99.1% of the outstanding shares of Carlisle
Common Stock. No director or executive officer of Carlisle owns any shares of
First United Common Stock, except that Tommy Hillman owns 7,032 shares or less
than one percent (1%) of the 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 Carlisle Common Stock.

RESULTING OWNERSHIP IN FIRST UNITED

No stockholder of Carlisle will own five percent (5%) or more of First
United's outstanding common stock subsequent to the Merger.

COMPETITION

The banking subsidiaries of Carlisle 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 Carlisle or its
subsidiaries is a party.

OFFICES

Carlisle's executive offices are located at 300 Spring Building, Suite
1010, Little Rock, Arkansas 72201.

EMPLOYEES

As of December 31, 1995, Carlisle and its subsidiaries had 53 employees, 26
of whom are located in Carlisle, 12 of whom are located in Hazen, and 15 of whom
are located in Brinkley.

43
<PAGE> 51

DESCRIPTION OF CARLISLE STOCK

Carlisle has one class of common stock issued and outstanding. As of May
15, 1996, Carlisle had 200,000 shares of authorized common stock, $1.00 par
value, and 139,142 shares outstanding and 16,900 shares are held in treasury.
Currently, approximately 23 stockholders own shares of the common stock of
Carlisle.

<TABLE>
<CAPTION>
DIVIDENDS PAID PER SHARE
-------------------------
1993 1994 1995
----- ----- -----
<S> <C> <C> <C>
Common Stock........................................ $1.65 $1.40 $1.00
</TABLE>

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

Carlisle 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
Carlisle 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 Carlisle, and the
rights of security holders of First United, see "Election by Carlisle
Stockholders under the 1987 Act -- Result of Election."

Two-thirds of the outstanding shares of Carlisle common stock may authorize
the Merger pursuant to the 1965 Act. A simple majority of the outstanding shares
of common stockholders is required to authorize the proposed merger pursuant to
the 1987 Act. However, the Articles of Incorporation of First United provide
that two-thirds of the outstanding shares of First United Common Stock must
authorize the Merger.

The holders of Carlisle 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 Carlisle By-Laws require that the number of directors may
not be less than three nor more than ten. Furthermore, holders of Carlisle
Common Stock and First United Common Stock do not have preemptive rights with
respect to issuance of additional securities.

Both Carlisle 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 an directors with respect to liabilities
incurred by them in their conduct 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. See "Proposed Amendments To First United's Articles of
Incorporation."

First United's Articles of Incorporation contain a paragraph that may have
the effect of operating as an antitakeover 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 Carlisle Articles of Incorporation do not
contain a like provision. However, under the 1965 Act, Carlisle must have a
two-thirds ( 2/3) majority vote of all votes entitled to be cast to adopt a
merger. See "Proposed Amendments To First United's Articles of Incorporation."

44
<PAGE> 52

PROPOSED AMENDMENTS TO FIRST UNITED'S ARTICLES OF INCORPORATION

PROPOSALS INDEPENDENT OF THE MERGER AND EACH OTHER

The adoption or rejection of one or both proposed amendments is not related
to the Merger and will not have any effect on the Merger and approval or
disapproval of the Merger will not have any effect on the proposed amendments.

VOTE REQUIRED

Each proposed amendment must be approved by the affirmative vote of
two-thirds of the outstanding shares of First United Common Stock to become
effective.

PROPOSED AMENDMENT TO ARTICLE SEVENTH

Arkansas law would permit the Board of Directors to approve certain mergers
and share exchanges without first obtaining stockholder approval if the number
of shares of First United common stock to be issued in the transaction does not
exceed twenty percent (20%) of the number of shares of common stock issued and
outstanding immediately prior to consummation of the transaction. Article
Seventh of the First United Articles of Incorporation requires that for any such
merger or share exchange to be effected the stockholders must approve the
transaction by a two-thirds ( 2/3) vote of all shares issued and outstanding and
entitled to vote.

The proposed amendment to Article Seventh would allow the Board of
Directors to approve mergers or share exchanges without a stockholders vote if
(i) the number of shares to be issued in the transaction does not exceed twenty
percent (20%) of the number of shares issued and outstanding immediately prior
to consummation of the transaction and (ii) the total number of shares issued
during any consecutive twelve month period in connection with such transactions
does not exceed twenty percent (20%) of the number of shares of common stock
outstanding immediately prior to consummation of the transaction.

The proposed amendment would retain the present requirement of stockholder
approval by two-thirds of all shares issued and outstanding and entitled to vote
for (i) any transaction pursuant to which a purchaser would acquire control of
First United, (ii) any merger or share exchange transaction in which the number
of shares of First United Common Stock to be issued exceeds the levels described
above, (iii) any sale, exchange, lease or other disposition of all or
substantially all of First United's assets and property except when accompanied
in the usual and regular course of business, (iv) any dissolution or liquidation
of First United or (v) any amendment to the Articles of Incorporation.

REASON FOR THE PROPOSED AMENDMENT TO ARTICLE SEVENTH

The Board of Directors anticipates that First United will in the future
acquire additional banking subsidiaries in exchange for First United Common
Stock. The proposed amendment would provide for a more efficient assimilation of
banks into the First United system through mergers and share exchanges. At the
present time it cannot acquire additional banking subsidiaries without holding a
special stockholders meeting. It is estimated that the cost of such a special
stockholders meeting is $10,000. The Board of Directors believes that the
interest of the stockholders would be better served by allowing such
transactions when the number of shares being issued does not exceed the
percentages described above. Such transactions would be permitted under Arkansas
law but for the present provision of Article Seventh.

If the proposed amendment were in effect at the present time then a First
United Stockholders vote on the Carlisle merger would not be required. The
number of shares of First United Common Stock to be issued if that transaction
is approved will be approximately 500,000, which is approximately six and
one-half percent (6.5%) of the number of First United shares outstanding.

ARTICLE SEVENTH PRESENTLY IN EFFECT

SEVENTH. Except upon the approval of two-thirds ( 2/3) of all shares issued
and outstanding that are entitled to vote on all the following transactions, the
corporation shall not (i) effect a merger or share

45
<PAGE> 53

exchange with another corporation provided, however, that mergers authorized by
the Ark. Code Ann 4-27-1104 (as the same may be amended from time to time) may
be effected without shareholder approval, (ii) sell, exchange, lease, or
otherwise dispose of all, or substantially all, of the corporation's assets and
property except when accomplished in the usual and regular course of business of
the corporation, (iii) effect a dissolution or liquidation of the corporation,
or (iv) amend these Articles of Incorporation.

PROPOSED ARTICLE SEVENTH

SEVENTH: Except upon the approval of two-thirds ( 2/3) of all shares issued
and outstanding that are entitled to vote at a duly called shareholders
meeting, the corporation shall not:

(i) effect any transaction pursuant to which a purchaser would
acquire control of the corporation, whether by merger, consolidation,
purchase of stock or otherwise,

(ii) effect a merger or share exchange with another entity pursuant
to which the corporation would issue shares of common stock in an amount
greater than twenty percent (20%) of the number of shares of common stock
issued and outstanding immediately prior to consummation of the
transaction,

(iii) effect a merger or share exchange with another entity pursuant
to which the corporation would issue shares of common stock in an amount
that would cause the total number of shares issued during any consecutive
twelve month period in connection with such transactions to exceed twenty
percent (20%) of the number of shares of common stock issued and
outstanding immediately prior to consummation of the transaction,

(iv) sell, exchange, lease or otherwise dispose of all or
substantially all of the corporation's assets and property other than in
the usual and regular course of business of the corporation,

(v) effect a dissolution or liquidation of the corporation, or

(vi) amend these Articles of Incorporation.

PROPOSED AMENDMENT TO ARTICLE TENTH

Arkansas law would permit the Board of Directors to increase the number of
director positions by up to thirty percent (30%) of the number elected by the
stockholders within the range allowed by and unless restricted by the Articles
of Incorporation. First United's Articles of Incorporation provide that the
number of directors shall not exceed twenty-five (25) and shall be determined
only by the stockholders. First United's Bylaws provide that the number of
directors shall not be less than three (3).

The proposed amendment to Article Tenth would allow the Board of Directors
to increase or decrease the number of directors by no more than thirty percent
(30%) of the number last determined by the stockholders and to fill new
positions created. The proposed amendment would retain the maximum number of
twenty-five (25) directors and fix the minimum number at three (3). The
stockholders will continue to elect directors annually.

REASON FOR THE PROPOSED AMENDMENT

The Board of Directors believes that it is desirable that the Board have
the flexibility to add directors within the proposed limits as permitted by
Arkansas law.

ARTICLE TENTH PRESENTLY IN EFFECT

TENTH. The number of directors that constitute the Board of Directors of
the corporation shall not exceed twenty-five (25). The number of directors shall
be determined by the stockholders at each annual meeting or may be determined at
any special meeting, and the number of directors so determined shall be
applicable until the next meeting of stockholders at which directors are elected
and a new number of directors determined.

46
<PAGE> 54

PROPOSED ARTICLE TENTH

TENTH. The number of directors that constitutes the Board of Directors of
the corporation shall not exceed twenty-five (25). The number of directors
shall be determined by the stockholders at each annual meeting or may be
determined at any special meeting. The Board of Directors may increase or
decrease by thirty percent (30%) or less the number of directors last fixed
by the stockholders, provided that the number of directors shall not be
less than three (3) nor more than twenty-five (25). The Board of Directors
may fill a vacancy created by the Board of Directors under this Article
Tenth.

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 Carlisle 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, 1995 and 1994 and for each of the years in the three-year period
ended December 31, 1995 incorporated by reference in this Proxy Statement have
been audited by Arthur Andersen LLP, independent public accountants as set forth
in their report. In that report, that firm states that with respect to the
financial statements for the years-ended December 31, 1993 of InvestArk
Bankshares, Inc., a company acquired during 1994 in a transaction accounted for
as a pooling-of-interests, its opinion is based on the report of other
independent public accountants, namely Martin & Company. The financial
statements referred to above have been incorporated by reference herein in
reliance upon the authority of said firms as experts in accounting and auditing.

The consolidated financial statements of Carlisle Bancshares, Inc. at
December 31, 1995 and for the year then ended, appearing in this Proxy Statement
and Registration Statement, have been audited by Kemp & Company, independent
auditors, and at December 31, 1994, and for each of the two years in the period
ended December 31, 1994, by Ernst & Young LLP, independent auditors, as set
forth in their respective reports thereon appearing elsewhere herein, and are
included in reliance upon such reports given upon the authority of such firms as
experts in accounting and auditing.

GENERAL

As of the date of this Proxy Statement, the board of directors of First
United or Carlisle does not intend to present, and has not been informed that
another person intends to present, any matter for action at either special
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.

47
<PAGE> 55

INDEX TO CARLISLE FINANCIAL STATEMENTS

<TABLE>
<S> <C>
Financial Statements
Reports of Independent Auditors..................................................... F-2
Consolidated Balance Sheets -- December 31, 1995 and 1994........................... F-4
Consolidated Statements of Income -- Years ended December 31, 1995, 1994 and 1993... F-5
Consolidated Statements of Shareholders' Equity -- Years ended December 31, 1995,
1994 and 1993.................................................................... F-6
Consolidated Statements of Cash Flows -- Years ended December 31, 1995, 1994 and
1993............................................................................. F-7
Notes to Financial Statements -- December 31, 1995.................................. F-8
Financial Statements
Consolidated Balance Sheets -- March 31, 1996 (Unaudited) and December 31, 1995..... F-21
Consolidated Statements of Income (Unaudited) -- Three Months ended March 31, 1996
and 1995......................................................................... F-22
Consolidated Statements of Shareholders' Equity (Unaudited) -- Three Months Ended
March 31, 1996................................................................... F-23
Consolidated Statements of Cash Flows (Unaudited) -- Three Months ended March 31,
1996 and 1995.................................................................... F-24
Notes to Financial Statements (Unaudited) -- March 31, 1996......................... F-25
</TABLE>

F-1
<PAGE> 56

REPORT OF INDEPENDENT AUDITORS

The Board of Directors and Shareholders
Carlisle Bancshares, Inc.

We have audited the accompanying consolidated balance sheet of Carlisle
Bancshares, Inc. and subsidiaries as of December 31, 1995, and the related
consolidated statements of income, shareholders' equity, and cash flows for the
year then ended. 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 audit.

We conducted our audit 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 audit provides a reasonable basis for our opinion.

In our opinion, the accompanying 1995 financial statements referred to
above present fairly, in all material respects, the consolidated financial
position of Carlisle Bancshares, Inc. and subsidiaries, as of December 31, 1995,
and the consolidated results of their operations and their cash flows for the
year then ended in conformity with generally accepted accounting principles.

KEMP & COMPANY

/s/ KEMP & COMPANY
-------------------------

Little Rock, Arkansas
January 26, 1996

F-2
<PAGE> 57

REPORT OF INDEPENDENT AUDITORS

The Board of Directors and Shareholders
Carlisle Bancshares, Inc.

We have audited the accompanying consolidated balance sheet of Carlisle
Bancshares, Inc. and subsidiaries as of December 31, 1994, and the related
consolidated statements of income, shareholders' equity, and cash flows for each
of the two years in the period ended December 31, 1994. 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 Carlisle
Bancshares, Inc. and subsidiaries at December 31, 1994, and the consolidated
results of their operations and their cash flows for each of the two years in
the period ended December 31, 1994, in conformity with generally accepted
accounting principles.

ERNST & YOUNG LLP

/s/ ERNST & YOUNG LLP
-------------------------

Little Rock, Arkansas
February 14, 1995

F-3
<PAGE> 58

CARLISLE BANCSHARES, INC.

CONSOLIDATED BALANCE SHEETS
DECEMBER 31, 1995 AND 1994

ASSETS

<TABLE>
<CAPTION>
1995 1994
------------ -----------
<S> <C> <C>
Cash and due from banks (Note 3)................................. $ 4,214,843 $ 3,819,849
Federal funds sold............................................... 1,285,000
------------ -----------
Cash and cash equivalents...................................... 5,499,843 3,819,849
Interest bearing deposits in banks............................... 195,000
Investment securities (Note 4):
Held-to-maturity securities (approximate fair values of
$23,530,174 in 1995 and $27,326,834 in 1994)................ 23,327,187 27,936,266
Available-for-sale securities.................................. 10,345,256 8,454,171
------------ -----------
33,672,443 36,390,437
Loans -- net (Notes 5, 9, 10, 13 and 14)......................... 56,952,622 52,518,396
Premises and equipment, net (Note 6)............................. 1,476,219 1,637,125
Accrued interest receivable...................................... 1,718,725 1,290,675
Cost in excess of net assets of banks acquired, less accumulated
amortization of $786,644 in 1995 and $706,331 in 1994.......... 775,668 855,981
Other assets..................................................... 698,782 1,359,017
------------ -----------
$100,794,302 $98,066,480
============ ===========

LIABILITIES AND SHAREHOLDERS' EQUITY

Deposits (Note 7):
Noninterest bearing............................................ $ 10,587,497 $10,071,220
Interest bearing............................................... 74,205,235 73,501,882
------------ -----------
84,792,732 83,573,102
Federal funds purchased.......................................... 585,000 2,090,000
Note payable (Note 8)............................................ 3,760,531 4,200,775
Federal Home Loan Bank advances (Note 9)......................... 3,712,759 1,648,862
Accrued interest payable......................................... 654,162 452,061
Other liabilities................................................ 262,179 171,506
------------ -----------
Total liabilities...................................... 93,767,363 92,136,306
Commitments (Note 13)
Shareholders' equity (Notes 8 and 15):
Common stock, $1 par value:
Authorized 200,000 shares; issued: 155,586 shares in 1995
and 155,035 shares in 1994................................ 155,586 155,035
Capital surplus................................................ 1,862,938 1,838,529
Retained earnings.............................................. 5,537,847 4,534,371
Net unrealized losses on available-for-sale securities less
deferred income tax benefit of $73,185 in 1995 and $115,582
in 1994..................................................... (117,948) (186,277)
Less: Treasury stock, at cost; 16,900 shares................... (411,484) (411,484)
------------ -----------
Total shareholders' equity............................. 7,026,939 5,930,174
------------ -----------
$100,794,302 $98,066,480
============ ===========
</TABLE>

See notes to consolidated financial statements.

F-4
<PAGE> 59

CARLISLE BANCSHARES, INC.

CONSOLIDATED STATEMENTS OF INCOME
YEARS ENDED DECEMBER 31, 1995, 1994 AND 1993

<TABLE>
<CAPTION>
1995 1994 1993
---------- ---------- ----------
<S> <C> <C> <C>
Interest income:
Loans, including fees.................................. $5,178,646 $4,056,865 $2,661,752
Investment securities:
Taxable............................................. 2,009,777 1,391,845 723,867
Tax-exempt.......................................... 118,756 198,551 143,929
Other.................................................. 71,063 151,004 136,768
---------- ---------- ----------
7,378,242 5,798,265 3,666,316
Interest expense:
Deposits............................................... 3,082,257 2,251,476 1,348,866
Short-term borrowings.................................. 208,036 84,909 13,197
Long-term borrowings................................... 503,591 368,582 197,499
---------- ---------- ----------
3,793,884 2,704,967 1,559,562
---------- ---------- ----------
Net interest income...................................... 3,584,358 3,093,298 2,106,754
Provision for loan losses (Note 5)....................... 60,000 65,000 180,000
---------- ---------- ----------
Net interest income after provision for loan losses...... 3,524,358 3,028,298 1,926,754
Other income:
Service charges on deposit accounts.................... 488,019 425,739 235,686
Trust fees............................................. 67,506 57,216 54,103
Investment securities gains (Note 4)................... 100,000
Other (Note 19)........................................ 194,050 146,092 90,969
---------- ---------- ----------
749,575 629,047 480,758
Other expenses:
Salaries and employee benefits (Note 11)............... 1,364,691 1,189,429 639,916
Net occupancy expense and furniture and equipment
expense............................................. 399,338 325,687 144,950
Amortization........................................... 80,313 78,435 71,813
Other (Note 19)........................................ 772,497 849,747 442,250
---------- ---------- ----------
2,616,839 2,443,298 1,298,929
---------- ---------- ----------
Income before income taxes............................... 1,657,094 1,214,047 1,108,583
Provision for income taxes (Note 12)..................... 515,482 341,262 362,242
---------- ---------- ----------
Net income............................................... $1,141,612 $ 872,785 $ 746,341
========== ========== ==========
Net income per share..................................... $ 8.25 $ 6.43 $ 6.05
========== ========== ==========
</TABLE>

See notes to consolidated financial statements.

F-5
<PAGE> 60

CARLISLE BANCSHARES, INC.

CONSOLIDATED STATEMENTS OF SHAREHOLDERS' EQUITY
YEARS ENDED DECEMBER 31, 1995, 1994 AND 1993

<TABLE>
<CAPTION>
UNREALIZED
LOSSES ON
AVAILABLE-
COMMON CAPITAL RETAINED FOR-SALE TREASURY
STOCK SURPLUS EARNINGS SECURITIES STOCK TOTAL
-------- ---------- ---------- ---------- --------- ----------
<S> <C> <C> <C> <C> <C> <C>
Balance at January 1, 1993................... $140,300 $1,268,400 $3,306,775 $ $(409,704) $4,305,771
Net income................................... 746,341 746,341
Cash dividends ($1.65 per share)............. (203,692) (203,692)
Purchase of treasury stock (50 shares)....... (1,780) (1,780)
-------- ---------- ---------- --------- --------- ----------
Balance at December 31, 1993................. 140,300 1,268,400 3,849,424 (411,484) 4,846,640
Net income................................... 872,785 872,785
Net unrealized losses on available-for-sale
securities, net of deferred income tax
benefit of $98,877......................... (186,277) (186,277)
Cash dividends ($1.40 per share)............. (187,838) (187,838)
Issuance of 3,966 shares for cash............ 3,966 156,061 160,027
Issuance of 10,769 shares of stock in
connection with acquisition of Hazen First
State Bank (Note 2)........................ 10,769 414,068 424,837
-------- ---------- ---------- --------- --------- ----------
Balance at December 31, 1994................. 155,035 1,838,529 4,534,371 (186,277) (411,484) 5,930,174
Net income................................... 1,141,612 1,141,612
Cash dividends ($1.00 per share)............. (138,136) (138,136)
Issuance of 551 shares of stock for cash..... 551 24,409 24,960
Net change in unrealized losses on
available-for-sale securities, net of
deferred income taxes of $42,397........... 68,329 68,329
-------- ---------- ---------- --------- --------- ----------
Balance at December 31, 1995................. $155,586 $1,862,938 $5,537,847 $(117,948) $(411,484) $7,026,939
======== ========== ========== ========= ========= ==========
</TABLE>

See notes to consolidated financial statements.

F-6
<PAGE> 61

CARLISLE BANCSHARES, INC.

CONSOLIDATED STATEMENTS OF CASH FLOWS
YEARS ENDED DECEMBER 31, 1995, 1994, AND 1993

<TABLE>
<CAPTION>
1995 1994 1993
----------- ------------ -----------
<S> <C> <C> <C>
Operating activities:
Net income......................................... $ 1,141,612 $ 872,785 $ 746,341
Adjustments to reconcile net income to net cash
provided by operating activities:
Provision for loan losses..................... 60,000 65,000 180,000
Depreciation and amortization................. 245,135 217,644 101,813
Deferred income taxes......................... 48,050 4,334 14,422
Investment securities gains (Note 4).......... (100,000)
Net accretion of investment security
discounts.................................. (89,100) (142,017) (23,280)
Decrease (increase) in accrued interest
receivable other assets.................... 141,738 (208,778) (40,740)
Increase (decrease) in accrued interest
payable and other liabilities.............. 292,774 201,268 (512,627)
----------- ------------ -----------
Net cash provided by operating
activities............................... 1,840,209 1,010,236 365,929
Investing activities:
Net assets of acquired subsidiaries, net of cash
acquired........................................ 685,500
Proceeds from maturities of held-to-maturity
securities...................................... 10,895,289 9,596,301 8,095,107
Purchases of held-to-maturity securities........... (6,544,746) (16,827,814) (9,874,265)
Proceeds from maturities of available-for-sale
securities...................................... 250,000 5,619,272
Purchases of available-for-sale securities......... (1,682,723) (493,814)
Net decrease in interest bearing deposits with
other banks..................................... 195,000 396,000 392,453
Net (increase) decrease in loans................... (4,494,226) (2,310,268) 1,857,234
Proceeds from sales of other real estate........... 52,532
Purchases of premises and equipment................ (3,916) (213,350) (61,839)
----------- ------------ -----------
Net cash used by investing activities...... (1,385,322) (3,548,173) 461,222
Financing activities:
Net increase (decrease) in deposits................ 1,219,630 (323,279) (423,779)
Net increase (decrease) in federal funds
purchased....................................... (1,505,000) 1,590,000
Proceeds from borrowings on note payable........... 2,303,321
Repayments on note payable......................... (440,244) (290,871) (266,855)
Borrowings from FHLB............................... 2,189,000 500,000 500,000
Repayments on FHLB borrowings...................... (125,103) (85,073) (14,505)
Proceeds from issuance of common stock............. 24,960 160,027
Purchase of treasury stock......................... (1,780)
Cash dividends..................................... (138,136) (187,838) (203,692)
----------- ------------ -----------
Net cash provided by financing
activities............................... 1,225,107 3,666,287 (410,611)
----------- ------------ -----------
Cash and cash equivalents:
Net increase....................................... 1,679,994 1,128,350 416,540
Balance at January 1............................... 3,819,849 2,691,499 2,274,959
----------- ------------ -----------
Balance at December 31............................. $ 5,499,843 $ 3,819,849 $ 2,691,499
=========== ============ ===========
</TABLE>

See notes to consolidated financial statements.

F-7
<PAGE> 62

CARLISLE BANCSHARES, INC.

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
DECEMBER 31, 1995

NOTE 1: SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES

Consolidation

The consolidated financial statements include the accounts of Carlisle
Bancshares, Inc. (the "Company") and its wholly owned subsidiaries, Citizens
Bank & Trust, FirstBank of Arkansas, Brinkley (from purchase date of May 6,
1994), and its majority-owned bank subsidiary, Hazen First State Bank (from
purchase date of January 18, 1994). All significant intercompany accounts and
transactions have been eliminated in consolidation.

On December 29, 1994, Grand Prairie Bancshares, Inc. was merged into
Citizens Bank & Trust. This transaction did not effect the consolidated results
of operations or financial condition of Carlisle Bancshares, Inc.

Nature of operations

The Company is a bank holding company with three bank subsidiaries. The
banks operate under state bank charters and provide banking services principally
to customers located in Arkansas. The Company and its subsidiaries are subject
to regulation by the Federal Reserve, the Arkansas Bank Department and the
Federal Deposit Insurance Corporation.

Estimates

The preparation of financial statements in conformity with generally
accepted accounting principles requires management to make estimates and
assumptions that affect the reported amounts of assets and liabilities and
disclosure of contingent assets and liabilities at the date of the financial
statements and the reported amount of revenues and expenses during the reporting
period. Actual results could differ from those estimates.

Investment securities

In May 1993, the Financial Accounting Standards Board issued Statement of
Financial Accounting Standards No. 115, "Accounting for Certain Investments in
Debt and Equity Securities". The Company adopted the provisions of the statement
on January 1, 1994 with an insignificant effect on shareholders' equity.

The Company's investment securities are classified as held-to-maturity
securities and available-for-sale securities. Debt securities for which the
Company has the positive intent and ability to hold until maturity are
classified as held-to-maturity securities that are reported at cost, adjusted
for amortization of premiums and accretion of discounts. Available-for-sale
securities consist of securities not classified as held-to-maturity and are
reported at fair value.

Unrealized holding gains and losses, net of tax, on available-for-sale
securities are reported as a net amount in a separate component of shareholders'
equity until realized. Gains or losses on the sale of securities are computed
using the carrying amount of the specific securities sold.

Revenue recognition

Interest on loans is credited to operations currently based upon the
principal amount and period outstanding. Interest on loans is not accrued when
amounts are considered doubtful of collection. When interest accruals are
discontinued, unpaid interest credited to income in the current year is reversed
and interest accrued in the prior year is charged to the allowance for loan
losses. If the ultimate collectibility of principal is in doubt, any payment
received on a loan on which the accrual of interest had been suspended is
applied to reduce principal to the extent necessary to eliminate such doubt.

F-8
<PAGE> 63

CARLISLE BANCSHARES, INC.

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS -- (CONTINUED)

Allowance for loan losses

The allowance for loan losses is maintained at a level management believes
to be adequate to absorb probable losses in the loan portfolio. Management's
determination of the adequacy of the allowance is based on reviews of individual
loans, recent loan loss experience, current economic conditions and the risk
characteristics of the various categories of loans. Loans deemed uncollectible
are charged to the allowance. Provisions for loan losses and recoveries on loans
previously charged off are added to the allowance.

Premises and equipment, net

Premises and equipment are stated at cost, less accumulated depreciation.
Depreciation expense is computed generally by the declining balance method based
on the estimated useful lives of the assets.

Cost in Excess of Net Assets Acquired

Cost in excess of net assets acquired is amortized by the straight-line
method over periods ranging from 15 to 20 years (see Note 2).

Other real estate

Other real estate, which is included in Other assets in the Consolidated
Balance Sheets ($19,823 at December 31, 1995 and $166,451 at December 31, 1994),
consists of properties acquired through foreclosure proceedings, acceptance of a
deed in lieu of foreclosure, or through in-substance foreclosure. These
properties are carried at the lower of cost or fair market value based on
appraised value at the date acquired. Fair value is the estimated sales price
based on appraisal values less estimated costs of disposal. Loan losses arising
from the acquisition of such properties are charged against the allowance for
loan losses. Subsequent valuation adjustments, if any, are charged to operating
expenses. Loans aggregating approximately $148,000 were transferred to other
real estate during 1994. No loans were transferred to other real estate in 1995
or 1993.

Income taxes

The liability method is used in accounting for income taxes. Under this
method, deferred tax assets and liabilities are determined based on differences
between financial reporting and tax bases of assets and liabilities and are
measured using the enacted tax rates and laws that will be in effect when the
differences are expected to reverse.

The Company and its subsidiaries file consolidated income tax returns. It
is the Company's practice to have its subsidiaries pay to or receive from the
Company amounts based on the taxable income or loss of the subsidiaries.

Net income per share

Net income per share is based on average shares outstanding during the
year. Average shares outstanding amounted to 138,352 shares, 135,679 shares and
123,422 shares for the years ended December 31, 1995, 1994 and 1993,
respectively.

Cash equivalents

Cash equivalents include due from banks and federal funds sold and other
highly liquid investment securities with initial maturities of three months or
less when purchased. Generally, federal funds are purchased and sold for one-day
periods.

F-9
<PAGE> 64

CARLISLE BANCSHARES, INC.

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS -- (CONTINUED)

Reclassifications

Certain amounts in the 1994 and 1993 consolidated financial statements have
been reclassified to conform to the reporting format used for the 1995
consolidated financial statements.

Future Application of Accounting Standards

During 1995, the Financial Accounting Standards Board issued Statement No.
121, "Accounting for the Impairment of Long-Lived Assets and for Long-Lived
Assets to Be Disposed Of". The adoption of Statement No. 121 (required in 1996),
which establishes accounting standards for the impairment of long-lived assets
and goodwill related to assets to be held and used, and long-lived assets to be
disposed of, is not expected to have a significant impact on the Company's
consolidated financial statements.

NOTE 2: SUBSIDIARY BANKS

On May 5, 1994, the Company acquired 100% of the outstanding stock of
FirstBank of Arkansas, Brinkley for approximately $1,642,000 in cash, in a
transaction accounted for by the purchase method. The purchase price was based
on the book value as of the end of the month immediately preceding the closing
date (April 30, 1994). The Company acquired assets of approximately $24 million,
loans of $13 million, and deposits of $21 million. The bank's assets and
liabilities were recorded at book value, which approximated estimated fair value
on the date of acquisition. The results of operations of FirstBank of Arkansas,
Brinkley are included in the consolidated results of operations from the
acquisition date.

On January 18, 1994, the Company acquired 71.68% of the outstanding common
stock and 55.66% of the outstanding preferred stock of Hazen First State Bank.
On June 30, 1994, 44.34% of the remaining preferred stock and 27.82% of the
remaining common stock were purchased resulting in 100% ownership of the
preferred stock and 99.5% ownership of the common stock. The total purchase
price consisted of approximately $1,156,000 in cash and the issuance of 10,769
(valued at $39.45 per share) of the Company's common stock. The acquisition was
accounted for as a purchase and the assets and liabilities of Hazen First State
Bank were recorded at book value at the date of acquisition which approximated
estimated fair value. The bank had assets of approximately $17 million, loans of
$6 million, and deposits of $16 million on the acquisition date. Cost in excess
of net assets acquired of $123,257 was recorded in connection with this
transaction and is being amortized by the straight-line method over 15 years.
The results of operations of Hazen First State Bank from the date of majority
ownership (January 18, 1994) are included in the consolidated results of
operations.

NOTE 3: RESTRICTIONS ON CASH AND DUE FROM BANKS

The bank subsidiaries are required to maintain certain minimum cash
reserves based upon liabilities to depositors. The minimum consolidated cash
reserve requirement at December 31, 1995 was approximately $130,000. The average
reserve requirement for the year ended December 31, 1995 amounted to
approximately $311,000.

F-10
<PAGE> 65

CARLISLE BANCSHARES, INC.

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS -- (CONTINUED)

NOTE 4: INVESTMENT SECURITIES

The amortized cost and approximate fair values of investment securities are
as follows as of December 31:

<TABLE>
<CAPTION>
1995
------------------------------------------------------
GROSS GROSS
AMORTIZED UNREALIZED UNREALIZED FAIR
COST GAINS LOSSES VALUE
----------- ---------- ---------- -----------
<S> <C> <C> <C> <C>
Held-to-maturity
U.S. Treasury securities and
obligations of U.S. government
agencies......................... $18,030,536 $ 107,189 $ 44,006 $18,093,719
Obligations of states and political
subdivisions..................... 1,739,943 49,900 5 1,789,838
Corporate securities................ 638,043 26,291 781 663,553
Mortgage-backed securities.......... 2,918,665 79,563 15,164 2,983,064
----------- --------- --------- -----------
Total debt securities....... $23,327,187 $ 262,943 $ 59,956 $23,530,174
=========== ========= ========= ===========
Available-for-sale
U.S. Treasury securities and
obligations of U.S. government
agencies......................... $ 9,638,711 $ 1,826 $ 180,841 $ 9,459,696
Obligations of states and political
subdivisions..................... 137,242 8,931 13,377 132,796
Mortgage-backed securities.......... 19,787 577 20,364
----------- --------- --------- -----------
Total debt securities....... 9,795,740 11,334 194,218 9,612,856
Equity securities................... 732,400 732,400
----------- --------- --------- -----------
$10,528,140 $ 11,334 $ 194,218 $10,345,256
=========== ========= ========= ===========
</TABLE>

<TABLE>
<CAPTION>
1994
------------------------------------------------------
GROSS GROSS
AMORTIZED UNREALIZED UNREALIZED FAIR
COST GAINS LOSSES VALUE
----------- ---------- ---------- -----------
<S> <C> <C> <C> <C>
Held-to-maturity
U. S. Treasury securities and
obligations of U.S. government
agencies......................... $21,319,777 $ 2,240 $ 558,558 $20,763,459
Obligations of states and political
subdivisions..................... 1,986,262 47,077 10,711 2,022,628
Corporate securities................ 790,653 14,668 17,143 788,178
Mortgage-backed securities.......... 3,839,574 24,565 111,570 3,752,569
----------- --------- --------- -----------
Total debt securities....... $27,936,266 $ 88,550 $ 697,982 $27,326,834
=========== ========= ========= ===========
Available-for-sale
U.S. Treasury securities and
obligations of U.S. government
agencies......................... $ 8,454,208 $ $ 246,642 $ 8,207,566
Obligations of states and political
subdivisions..................... 242,495 2,863 41,236 204,122
Mortgage-backed securities.......... 29,773 139 29,634
----------- --------- --------- -----------
Total debt securities....... 8,726,476 2,863 288,017 8,441,322
Equity securities................... 12,849 12,849
----------- --------- --------- -----------
$ 8,739,325 $ 2,863 $ 288,017 $ 8,454,171
=========== ========= ========= ===========
</TABLE>

F-11
<PAGE> 66

CARLISLE BANCSHARES, INC.

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS -- (CONTINUED)

The scheduled maturities of held-to-maturity and available-for-sale debt
securities at December 31, 1995 are as follows:

<TABLE>
<CAPTION>
HELD-TO-MATURITY AVAILABLE-FOR-SALE
-------------------------- ------------------------
AMORTIZED FAIR AMORTIZED FAIR
COST VALUE COST VALUE
----------- ----------- ---------- ----------
<S> <C> <C> <C> <C>
Due in one year or less............ $12,912,080 $12,941,733 $4,096,917 $4,047,617
Due after one year through five
years............................ 6,266,845 6,323,208 5,547,532 5,404,184
Due after five years through ten
years............................ 787,697 820,566 13,150 13,406
Due after ten years................ 441,900 461,603 118,354 127,285
----------- ----------- ---------- ----------
20,408,522 20,547,110 9,775,953 9,592,492
Mortgage-backed securities......... 2,918,665 2,983,064 19,787 20,364
----------- ----------- ---------- ----------
$23,327,187 $23,530,174 $9,795,740 $9,612,856
=========== =========== ========== ==========
</TABLE>

During 1993, a $100,000 gain was recorded by the Company for a change in
value of a debt security. There were no realized gains or losses on sales of
investment securities during the three-year period ended December 31, 1995.

Securities with a carrying amount of approximately $18,550,000 at December
31, 1995 and $15,967,000 at December 31, 1994 were pledged to secure public
deposits and for other purposes (see Note 17).

NOTE 5: LOANS, ALLOWANCE FOR LOANS LOSSES AND IMPAIRED LOANS

Loans consisted of the following at December 31:

<TABLE>
<CAPTION>
1995 1994
----------- -----------
<S> <C> <C>
Real estate -- construction............................... $ 2,370,028 $ 1,472,728
Real estate -- mortgage................................... 25,362,296 21,464,672
Agricultural.............................................. 14,443,169 14,620,388
Commercial................................................ 9,819,115 12,441,334
Consumer and other........................................ 6,173,071 3,764,702
----------- -----------
Total loans..................................... 58,167,679 53,763,824
Less:
Allowance for loan losses............................... (1,215,057) (1,245,428)
----------- -----------
Loans, net...................................... $56,952,622 $52,518,396
=========== ===========
</TABLE>

Transactions in the allowance for loan losses were as follows:

<TABLE>
<CAPTION>
1995 1994 1993
---------- ---------- --------
<S> <C> <C> <C>
Balance -- January 1.............................. $1,245,428 $ 824,093 $644,900
Provision for loan losses....................... 60,000 65,000 180,000
Allowances of acquired subsidiaries............. 411,655
Net charge-offs:
Charge-offs (deduction)...................... (132,315) (91,489) (20,189)
Recoveries................................... 41,944 36,169 19,382
---------- ---------- --------
(90,371) (55,320) (807)
---------- ---------- --------
Balance -- December 31............................ $1,215,057 $1,245,428 $824,093
========== ========== ========
</TABLE>

F-12
<PAGE> 67

CARLISLE BANCSHARES, INC.

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS -- (CONTINUED)

During 1995, the Company adopted Statement of Financial Accounting
Standards ("SFAS") No. 114, "Accounting by Creditors for Impairment of a Loan",
as amended by SFAS No. 118. The Statement requires that impaired loans, which
management considers to be nonaccrual loans, be measured based on the present
value of expected future cash flows discounted at the loan's effective interest
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. The effect of
the adoption of this Statement on the Company's 1995 financial statements was
not significant.

Nonaccrual loans amounted to $543,134 at December 31, 1995 and $645,015 at
December 31, 1994. Allowance for loan losses allocations for nonaccrual loans
amounted to approximately $63,000 at December 31, 1995. Average nonaccrual loans
for the year ended December 31, 1995 amounted to approximately $594,000. There
were no significant commitments to lend additional funds to borrowers included
in the nonaccrual loans category.

NOTE 6: BANK PREMISES AND EQUIPMENT

Bank premises and equipment consists of the following at December 31:

<TABLE>
<CAPTION>
1995 1994
----------- -----------
<S> <C> <C>
Land....................................................... $ 193,813 $ 193,813
Buildings and improvements................................. 1,340,466 1,326,482
Furniture and equipment.................................... 1,297,061 1,396,638
----------- -----------
2,831,340 2,916,933
Less accumulated depreciation and amortization............. (1,355,121) (1,279,808)
----------- -----------
$ 1,476,219 $ 1,637,125
=========== ===========
</TABLE>

Depreciation expense amounted to $164,822, $139,209 and $30,000 for the
years ended December 31, 1995, 1994 and 1993, respectively.

NOTE 7: DEPOSITS

The following summarizes information on deposits as of December 31:

<TABLE>
<CAPTION>
1995 1994
----------- -----------
<S> <C> <C>
Noninterest bearing....................................... $10,587,497 $10,071,220
NOW and money market accounts............................. 25,200,135 27,900,884
Savings accounts.......................................... 3,571,095 4,028,080
Certificates of deposit, $100,000 and over................ 11,456,282 9,021,040
Other certificates of deposit............................. 33,977,723 32,551,878
----------- -----------
$84,792,732 $83,573,102
=========== ===========
</TABLE>

NOTE 8: NOTE PAYABLE

The Company's note payable to an unrelated bank is payable in annual
installments through 2006 with interest at the prime rate of the issuing bank
(8.5% at December 31, 1995 and 1994). The note is collateralized by the capital
stock of the bank subsidiaries owned by the Company. The loan agreement places
restrictions on the declaration of dividends by the banks. The banks can declare
dividends amounting to the debt service requirements without obtaining the
approval of the lender. The agreement also places restrictions on additional
borrowings and requires that certain financial ratios be maintained.

Scheduled principal payments on the note for the next five years are as
follows: 1996 -- $478,322; 1997 -- $519,770; 1998 -- $564,690; 1999 -- $613,584;
and 2000 -- $178,909.

F-13
<PAGE> 68

CARLISLE BANCSHARES, INC.

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS -- (CONTINUED)

NOTE 9: FEDERAL HOME LOAN BANK ADVANCES

The Federal Home Loan Bank advances are payable in monthly installments
with interest rates ranging from 5.72% to 7.19% and have final maturities
ranging from 2000 through 2009. The banks are required to maintain specified
levels of qualifying real estate mortgage loan collateral to secure the
borrowings.

Schedule principal payments on Federal Home Loan Bank borrowings are as
follows: 1996 -- $145,572; 1997 -- $145,354; 1998 -- $146,175; 1999 -- $254,396;
and 2000 -- $1,018,557.

NOTE 10: LOANS TO RELATED PARTIES

The bank subsidiaries have had, and expect to have in the future, banking
transactions in the ordinary course of business with their officers and
directors. Such transactions have been on similar terms, including interest
rates and collateral on loans, as those prevailing at the time for comparable
transactions with others, and have involved no more than normal risk or other
potential unfavorable aspects. Loans made to such borrowers (including companies
in which they are principal owners) amounted to approximately $1,516,000 and
$933,000 at December 31, 1995 and 1994, respectively. During 1995, approximately
$1,235,000 of new loans were made and repayments aggregated approximately
$652,000.

NOTE 11: EMPLOYEE BENEFIT PLAN

The Company has a defined contribution retirement plan for the benefit of
all eligible employees. The plan qualifies under Section 401(k) of the Internal
Revenue Code thereby allowing eligible employees to make tax deductible
contributions to the plan. The plan provides for employer contributions up to 4%
of a participant's compensation. All employer contributions are at the
discretion of the Board of Directors. The Company made contributions of $34,983,
$25,312 and $16,944 in 1995, 1994 and 1993, respectively.

NOTE 12: INCOME TAXES

Effective January 1, 1993, the Company changed its method of accounting for
income taxes from the deferred method to the liability method required by FASB
Statement No. 109, "Accounting for Income Taxes". The adoption of the Statement
had no significant effect on the Company's results of operations or financial
condition.

At December 31, 1995, the Company has net operating loss carryforwards of
approximately $608,000 for income tax purposes that expire beginning in 2003
through 2006. Those carryforwards resulted from the Company's 1994 acquisitions
of Hazen First State Bank and FirstBank of Arkansas, Brinkley. A valuation
allowance is provided when it is more likely than not that some portion of the
deferred tax asset related to the loss carryforwards will not be realized. The
Company established a valuation allowance of $71,809 for 1995 and $160,662 for
1994, which approximated the amount of acquired net operating loss carryforwards
in excess of the subsidiaries' future taxable items in the carryforward periods.

F-14
<PAGE> 69

CARLISLE BANCSHARES, INC.

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS -- (CONTINUED)

The provision for income taxes for the years ended December 31, 1995, 1994
and 1993 consisted of the following:

<TABLE>
<CAPTION>
1995 1994 1993
-------- -------- --------
<S> <C> <C> <C>
Current:
Federal.......................................... $460,371 $322,703 $323,270
State............................................ 7,061 14,225 24,550
-------- -------- --------
467,432 336,928 347,820
-------- -------- --------
Deferred:
Federal.......................................... 42,672 1,939 11,974
State............................................ 5,378 2,395 2,448
-------- -------- --------
48,050 4,334 14,422
-------- -------- --------
Applicable income taxes.......................... $515,482 $341,262 $362,242
======== ======== ========
</TABLE>

The reasons for the differences between income tax expense and the amount
computed by applying the statutory federal income tax rate to income before
taxes are as follows:

<TABLE>
<CAPTION>
1995 1994 1993
-------- -------- --------
<S> <C> <C> <C>
Federal income taxes at statutory rate............... $563,412 $417,455 $376,918
Add (deduct):
State income taxes, net of federal tax benefit..... 8,210 10,969 17,819
Tax-exempt interest income......................... (40,377) (67,507) (48,936)
Other, net......................................... (15,763) (19,655) 16,441
-------- -------- --------
Applicable income taxes.................... $515,482 $341,262 $362,242
======== ======== ========
</TABLE>

Significant components of the Company's deferred tax liabilities and assets
as of December 31 are as follows:

<TABLE>
<CAPTION>
1995 1994
-------- --------
<S> <C> <C>
Deferred tax liabilities:
Cash method of accounting.................................... $ 59,300 $ 88,950
Tax over book depreciation................................... 89,097 81,056
Prepaid assets............................................... 18,023 25,731
Investment securities........................................ 66,343 48,389
-------- --------
Total deferred tax liabilities................................. 232,763 244,126
Deferred tax assets:
Net operating loss carryforwards............................. 232,737 299,785
Unrealized losses on available-for-sale securities........... 66,166 98,877
Allowance for loan losses.................................... 241,497 255,361
Other real estate writedown.................................. 17,132 44,351
Other........................................................ 11,803 5,754
-------- --------
Total deferred tax assets...................................... 569,335 704,128
Valuation allowance for deferred tax assets.................... (71,809) (160,662)
-------- --------
497,526 543,466
-------- --------
Net deferred tax assets........................................ $264,763 $299,340
======== ========
</TABLE>

F-15
<PAGE> 70

CARLISLE BANCSHARES, INC.

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS -- (CONTINUED)

NOTE 13: COMMITMENTS

In the normal course of business there are various commitments outstanding
and contingent liabilities, such as commitments to extend credit, including
standby letters of credit to assure performance or to support debt obligations,
which are not reflected in the accompanying consolidated financial statements.
These arrangements have credit risk essentially the same as that involved in
extending loans to customers.

Commitments to extend credit which amounted to $5,026,000 and $4,454,000 at
December 31, 1995 and 1994, respectively, are agreements to lend to a customer
as long as there is no violation of any condition established in the contract.
Commitments generally have fixed expiration dates or other termination clauses
and may require payment of a fee. Since many of the commitments are expected to
expire without being drawn upon, the total commitment amounts do not necessarily
represent future cash requirements. The Company evaluates each customer's credit
worthiness on a case-by-case basis. The amount of collateral obtained, if deemed
necessary, upon extension of credit is based on management's credit evaluation
of the counterparty. Collateral held varies but may include real estate,
accounts receivable, inventory, property, plant and equipment, and
income-producing commercial properties.

Standby letters of credit which amounted to $107,000 and $86,000 at
December 31, 1995 and 1994, respectively, are conditional commitments issued by
the Company to guarantee the performance of a customer to a third party. Those
guarantees are primarily issued to support public and private borrowings
arrangements and similar transactions.

The Company's exposure to credit loss in the event of nonperformance by the
other party to the financial instruments for commitments to extend credit and
standby letters of credit is represented by the contractual amount of those
instruments. The Company uses the same credit policies in making commitments and
conditional obligations as it does for on-balancesheet instruments.

NOTE 14: CONCENTRATIONS OF CREDIT RISK

Most of the Company's business activity is with customers located within
Lonoke, Prairie and Monroe Counties of Arkansas. The concentrations of credit by
major category of loan type are set forth in Note 5.

NOTE 15: REGULATORY MATTERS

Bank regulatory agencies restrict the amount available for the payment of
dividends by the bank subsidiaries to fifty percent of net income without
obtaining prior approval of those agencies. Such approval was obtained for the
1995, 1994 and 1993 dividend payments.

The Company and the bank subsidiaries are required to maintain sufficient
capital to meet minimum capital ratios, as defined by the regulatory agencies.
At December 31, 1995, the capital ratios of the Company and the bank
subsidiaries exceeded the minimum required amounts.

NOTE 16: SUPPLEMENTAL CASH FLOWS INFORMATION

The Company paid $3,591,783, $2,466,000 and $1,405,000 in interest on
deposits and other borrowings during 1995, 1994 and 1993, respectively. Cash
payments for income taxes amounted to $497,765, $362,235 and $410,562 during
1995, 1994 and 1993, respectively.

NOTE 17: FEDERAL RESERVE SEASONAL BORROWING LINE OF CREDIT

Citizens Bank and Trust maintains a seasonal borrowing line of credit with
the Federal Reserve Bank ($3,000,000 at December 31, 1995 and 1994), to provide
funds for lending activities. There were no outstanding borrowings on this line
at either December 31, 1995 or December 31, 1994. Investment securities

F-16
<PAGE> 71

CARLISLE BANCSHARES, INC.

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS -- (CONTINUED)

with a carrying amount of approximately $3,947,000 and $4,990,000 at December
31, 1995 and 1994, respectively, have been pledged to collateralize this line of
credit.

NOTE 18: FAIR VALUES OF FINANCIAL INSTRUMENTS

The following methods and assumptions were used by the Company in
estimating its fair value disclosures for financial instruments for the year
ended December 31, 1995:

Cash, due from banks, and federal funds sold: The carrying amounts for
these assets reported in the balance sheet approximate their fair values.

Investment securities: Fair values for investment securities are based
on quoted market prices, where available. If quoted market prices are not
available, fair values are based on quoted market prices of comparable
instruments.

Loans: For variable-rate loans that reprice frequently and with no
significant change in credit risk, fair values are based on carrying
values. The fair values for fixed-rate loans are estimated using discounted
cash flow analyses, using interest rates currently being offered for loans
with similar terms to borrowers of similar credit quality.

Deposits: The fair values of noninterest bearing deposits, interest
bearing transaction accounts and savings accounts are, by definition, equal
to the amount payable on demand at the reporting date (i.e., their carrying
amounts). The carrying amounts for variable-rate, fixed-term money market
accounts and certificates of deposits approximate their fair values at the
reporting date. Fair values for fixed-rate certificates of deposit are
estimated using a discounted cash flow calculation that applies interest
rates currently being offered on certificates to a schedule of aggregated
expected monthly maturities of such deposits.

Short-term borrowings: The carrying amounts of federal funds purchased
approximate their fair values.

Note payable: Fair value on the note payable is the amount payable at
the reporting date since the interest rate is equal to the prime rate on
corporate loans.

Federal Home Loan Bank advances: Fair values are estimated using rates
currently offered for borrowings of similar maturities.

Accrued interest: The carrying amounts of accrued interest approximate
their fair values.

Commitments to extend credit and standby letters of credit: The fair
values of commitments are estimated using the fees currently charged to
enter into similar agreements, taking into account the remaining terms of
the agreements and the present credit worthiness of the counterparties. The
fair values of standby letters of credit are based on 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. Due to the insignificance of the fees that would be
currently charged for such agreements and the short-term nature of the
current agreements, no fair value estimates have been made for commitments
to extend credit and standby letters of credit.

F-17
<PAGE> 72

CARLISLE BANCSHARES, INC.

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS -- (CONTINUED)

The estimated fair values of the Company's financial instruments were as
follows at December 31, 1995:

<TABLE>
<CAPTION>
CARRYING FAIR
AMOUNT VALUE
----------- -----------
<S> <C> <C>
Financial assets
Cash and due from banks and federal funds sold.......... $ 5,499,843 $ 5,499,843
Held-to-maturity securities............................. 23,327,187 23,530,174
Available-for-sale securities........................... 10,345,256 10,345,256
Loans -- total.......................................... 58,167,679 57,580,000
Accrued interest receivable............................. 1,718,725 1,718,725
Financial liabilities
Deposits................................................ $84,792,732 $84,897,000
Short-term borrowings................................... 585,000 585,000
Notes payable........................................... 3,760,531 3,760,531
Federal Home Loan Bank advances......................... 3,712,759 3,936,000
Accrued interest payable................................ 654,162 654,162
</TABLE>

NOTE 19: SUPPLEMENTAL INCOME STATEMENT INFORMATION

The following categories of other income and expenses exceeded one percent
of the aggregate of total interest income and other income for the years ended
December 31, 1995, 1994 and 1993 : Other income: none in any year; Other
expenses: (1) FDIC and State Bank Department insurance assessments: 1995 --
$136,122, 1994 -- $216,931 and 1993 -- $137,025; (2) Printing and supplies:
1995 -- $90,313, 1994 -- $83,135 and 1993 -- $45,720; and (3) Data processing
services: 1993 -- $49,600.

NOTE 20: CARLISLE BANCSHARES, INC. (PARENT COMPANY ONLY) FINANCIAL INFORMATION

<TABLE>
<CAPTION>
DECEMBER 31,
---------------------------
1995 1994
----------- -----------
<S> <C> <C>
BALANCE SHEETS
Assets:
Cash in bank subsidiaries....................................... $ 129,656 $ 11,061
Income tax receivable from bank subsidiaries.................... 129,943 92,021
Investment in bank subsidiaries................................. 10,117,988 9,459,693
Cost in excess of net assets of bank acquired, less accumulated
amortization................................................. 660,911 732,724
----------- -----------
Total assets............................................ $11,038,498 $10,295,499
=========== ===========
Liabilities:
Note payable.................................................... $ 3,760,531 $ 4,200,775
Accrued interest payable........................................ 251,028 164,550
----------- -----------
Total liabilities....................................... 4,011,559 4,365,325
Shareholders' equity.............................................. 7,026,939 5,930,174
----------- -----------
Total liabilities and shareholders' equity................... $11,038,498 $10,295,499
=========== ===========
</TABLE>

F-18
<PAGE> 73

CARLISLE BANCSHARES, INC.

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS -- (CONTINUED)

<TABLE>
<CAPTION>
YEARS ENDED DECEMBER 31,
------------------------------------
1995 1994 1993
---------- ---------- --------
<S> <C> <C> <C>
STATEMENTS OF INCOME
Income:
Dividends from bank subsidiaries........................ $ 850,000 $1,550,649 $325,000
Other................................................... 14,208
---------- ---------- --------
850,000 1,564,857 325,000
Expenses:
Interest on note payable................................ 342,409 261,546 137,550
Amortization............................................ 71,813 72,317 71,813
Other................................................... 9,226 9,308 2,725
---------- ---------- --------
423,448 343,171 212,088
---------- ---------- --------
Income before income taxes and equity in undistributed net
income of bank subsidiaries............................. 426,552 1,221,686 112,912
Income taxes (credit)..................................... (131,093) (89,738) (53,418)
---------- ---------- --------
557,645 1,311,424 166,330
Equity in undistributed net income (distributions in
excess of net income) of bank subsidiaries.............. 583,967 (438,639) 580,011
---------- ---------- --------
Net income...................................... $1,141,612 $ 872,785 $746,341
========== ========== ========
</TABLE>

F-19
<PAGE> 74

CARLISLE BANCSHARES, INC.

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS -- (CONTINUED)

<TABLE>
<CAPTION>
YEARS ENDED DECEMBER 31,
--------------------------------------
1995 1994 1993
---------- ----------- ---------
<S> <C> <C> <C>
STATEMENTS OF CASH FLOWS
Operating activities:
Net income............................................ $1,141,612 $ 872,785 $ 746,341
Adjustments to reconcile net cash provided by
operating activities:
Distributions in excess of net income (equity in
undistributed net income) of bank subsidiaries... (583,967) 438,639 (580,011)
Amortization....................................... 71,813 72,317 71,813
Other -- net....................................... 42,557 21,235 40,532
---------- ----------- ---------
Net cash provided by operating activities..... 672,015 1,404,976 278,675
Investing activities:
Investment in bank subsidiaries -- net cash used by
investing activities............................... (2,909,089)
Financing activities:
Payments on note payable.............................. (440,244) (290,871) (266,855)
Proceeds from borrowings on note payable.............. 2,303,321
Increase (decrease) in advances from Grand Prairie
Bancshares, Inc.................................... (540,000) 215,000
Proceeds from sales of common stock................... 24,960 160,027
Purchase of treasury stock............................ (1,780)
Cash dividends........................................ (138,136) (187,838) (203,692)
---------- ----------- ---------
Net cash provided (used) by financing
activities.................................. (553,420) 1,444,639 (257,327)
---------- ----------- ---------
Increase in cash.............................. 118,595 (59,474) 21,348
Cash at beginning of year............................... 11,061 70,535 49,187
---------- ----------- ---------
Cash at end of year..................................... $ 129,656 $ 11,061 $ 70,535
========== =========== =========
</TABLE>

Supplementary Cash Flows Information -- The parent company paid $255,931,
$195,471 and $152,630 in interest during 1995, 1994 and 1993, respectively.

F-20
<PAGE> 75

CARLISLE BANCSHARES, INC.

CONSOLIDATED BALANCE SHEETS

ASSETS

MARCH 31, DECEMBER 31,
1996 1995
------------ ------------
(UNAUDITED)
<S> <C> <C>
Cash and due from banks......................................... $ 3,547,409 $ 4,214,843
Federal funds sold.............................................. 1,445,000 1,285,000
------------ ------------
Cash and cash equivalents..................................... 4,992,409 5,499,843
Investment securities:
Held-to-maturity securities (approximate fair values of
$28,036,000 in 1996 and $23,530,000 in 1995)............... 27,954,090 23,327,187
Available-for-sale securities................................. 8,718,227 10,345,256
------------ ------------
36,672,317 33,672,443
Loans -- net.................................................... 54,924,482 56,952,622
Premises and equipment, net..................................... 1,454,016 1,476,219
Accrued interest receivable..................................... 1,435,491 1,718,725
Cost in excess of net assets of banks acquired, less accumulated
amortization of $806,722 in 1996 and $786,644 in 1995......... 755,590 775,668
Other assets.................................................... 764,109 698,782
------------ ------------
$100,998,414 $100,794,302
============ ============

LIABILITIES AND SHAREHOLDERS' EQUITY

Deposits:
Noninterest bearing........................................... $ 9,878,727 $ 10,587,497
Interest bearing.............................................. 75,898,444 74,205,235
------------ ------------
85,777,171 84,792,732
Federal funds purchased......................................... 585,000
Note payable.................................................... 3,282,209 3,760,531
Federal Home Loan Bank advances................................. 3,676,315 3,712,759
Accrued interest payable........................................ 366,610 654,162
Other liabilities............................................... 506,850 262,179
------------ ------------
Total liabilities..................................... 93,609,155 93,767,363
Commitments (Note 3)
Shareholders' equity:
Common stock, $1 par value:
Authorized 200,000 shares; issued: 155,586 shares.......... 155,586 155,586
Capital surplus............................................... 1,862,938 1,862,938
Retained earnings............................................. 5,879,896 5,537,847
Net unrealized losses on available-for-sale securities less
deferred income tax benefit of $60,607 in 1996 and $73,185
in 1995.................................................... (97,677) (117,948)
Less: Treasury stock, at cost; 16,900 shares.................. (411,484) (411,484)
------------ ------------
Total shareholders' equity............................ 7,389,259 7,026,939
------------ ------------
$100,998,414 $100,794,302
============ ============
</TABLE>

See notes to unaudited consolidated financial statements.

F-21
<PAGE> 76

CARLISLE BANCSHARES, INC.

CONSOLIDATED STATEMENTS OF INCOME

<TABLE>
<CAPTION>
THREE MONTHS ENDED MARCH 31,
-----------------------------
1996 1995
----------- --------------
(UNAUDITED)
<S> <C> <C>
Interest income:
Loans, including fees.............................................. $ 1,313,728 $ 1,075,746
Investment securities:
Taxable......................................................... 527,848 528,630
Tax-exempt...................................................... 24,755 30,511
Other.............................................................. 46,913 17,937
----------- -----------
1,913,244 1,652,824
Interest expense:
Deposits........................................................... 822,393 704,128
Short-term borrowings.............................................. 4,621 17,004
Long-term borrowings............................................... 137,960 119,005
----------- -----------
964,974 840,137
----------- -----------
Net interest income.................................................. 948,270 812,687
Provision for loan losses............................................ 17,000 11,000
----------- -----------
Net interest income after provision for loan losses.................. 931,270 801,687
Other income:
Service charges on deposit accounts................................ 123,837 121,439
Other.............................................................. 59,659 42,658
----------- -----------
183,496 164,097
Other expenses:
Salaries and employee benefits..................................... 356,359 340,858
Net occupancy expense and furniture and equipment expense.......... 108,393 91,349
Amortization....................................................... 20,078 20,078
Other.............................................................. 164,563 225,893
----------- -----------
649,393 678,178
----------- -----------
Income before income taxes........................................... 465,373 287,606
Provision for income taxes........................................... 123,324 76,527
----------- -----------
Net income........................................................... $ 342,049 $ 211,079
=========== ===========
Net income per share (Note 2)........................................ $ 2.47 $ 1.53
=========== ===========
</TABLE>

See notes to unaudited consolidated financial statements.

F-22
<PAGE> 77

CARLISLE BANCSHARES, INC.

CONSOLIDATED STATEMENTS OF SHAREHOLDERS' EQUITY
THREE MONTHS ENDED MARCH 31, 1996
(UNAUDITED)

See notes to unaudited consolidated financial statements.

F-23
<PAGE> 78

CARLISLE BANCSHARES, INC.

CONSOLIDATED STATEMENTS OF CASH FLOWS

<TABLE>
<CAPTION>
THREE MONTHS ENDED MARCH 31,
------------------------------
1996 1995
----------- --------------
(UNAUDITED)
<S> <C> <C>
Operating activities:
Net income...................................................... $ 342,049 $ 211,079
Adjustments to reconcile net income to net cash provided by
operating activities:
Provision for loan losses.................................... 17,000 11,000
Depreciation and amortization................................ 63,386 60,839
Net accretion of investment security discounts............... (9,858) (24,550)
Decrease in accrued interest receivable and other assets..... 205,329 671,337
Decrease in accrued interest payable and other liabilities... (42,881) (44,912)
----------- -----------
Net cash provided by operating activities............... 575,025 884,793
Investing activities:
Proceeds from maturities of held-to-maturity securities......... 5,212,587 447,603
Purchases of held-to-maturity securities........................ (9,831,761) (5,470,000)
Proceeds from maturities of available-for-sale securities....... 1,690,807 14,905
Purchases of available-for-sale securities...................... (28,800) (277,034)
Net decrease in loans........................................... 2,011,140 3,674,184
Purchases of premises and equipment............................. (21,105) -0-
----------- -----------
Net cash used by investing activities................... (967,132) (1,610,342)
Financing activities:
Net increase (decrease) in deposits............................. 984,439 (1,161,094)
Net increase (decrease) in federal funds purchased.............. (585,000) 1,575,000
Repayments on note payable...................................... (478,322) (440,244)
Repayments on FHLB borrowings................................... (36,444) (28,081)
Cash dividends.................................................. (138,136)
----------- -----------
Net cash used by financing activities................... (115,327) (192,555)
----------- -----------
Cash and cash equivalents:
Net decrease.................................................... (507,434) (918,104)
Balance at January 1............................................ 5,499,843 3,819,849
----------- -----------
Balance at March 31............................................. $ 4,992,409 $ 2,901,745
=========== ===========
</TABLE>

See notes to unaudited consolidated financial statements.

F-24
<PAGE> 79

CARLISLE BANCSHARES, INC.

NOTES TO UNAUDITED CONSOLIDATED FINANCIAL STATEMENTS
MARCH 31, 1996

NOTE 1: FINANCIAL STATEMENT PRESENTATION

The consolidated balance sheet as of March 31, 1996, the consolidated
statements of income and cash flows for the three months ended March 31, 1996
and 1995 and the statement of shareholders' equity for the three months ended
March 31, 1996, have been prepared by the Company, without audit. In the opinion
of management, all adjustments (consisting only of normal recurring items)
necessary to present fairly the financial position, results of operations and
cash flows at March 31, 1996 and for all periods presented have been made.
Operating results for the three months ended March 31, 1996 are not necessarily
indicative of the results that may be expected for the entire year ending
December 31, 1996.

Certain information and footnote disclosures normally included in financial
statements prepared in accordance with generally accepted accounting principles
have been omitted in accordance with Article 10 of Regulation S-X. These
consolidated financial statements should be read in conjunction with the
consolidated financial statements and notes thereto for the year ended December
31, 1995 included elsewhere herein.

NOTE 2: NET INCOME PER SHARE

Net income per share is based on average shares outstanding during the
period (138,686 shares and 138,135 shares for the three-month periods ended
March 31, 1996 and 1995, respectively).

NOTE 3: SUBSEQUENT EVENT

On April 1, 1996, the Company entered into an Agreement and Plan of
Reorganization (the "Agreement") with First United Bancshares, Inc. ("First
United"). The Agreement, as amended, provides for a purchase price of
$13,025,000 plus earnings from January 1, 1996 as defined in the Agreement. The
exchange of common stock between the Company and First United will be based on
the average price per share of First United common stock for the ten trading
days preceding the closing date. The Agreement may be terminated by First United
if the price per share of First United stock is less than $24 and by the Company
if the price per share of First United Stock is greater than $32. Completion of
the transaction is subject to regulatory and shareholder approvals.

F-25
<PAGE> 80

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

Article VII, 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> 81

ITEM 21. EXHIBITS AND FINANCIAL STATEMENT SCHEDULES

<TABLE>
<CAPTION>
EXHIBIT
NO. DESCRIPTION OF EXHIBIT
- -------------------- ----------------------------------------------------------------------
<S> <C>
2 -- Restated Agreement and Plan of Reorganization Between First United
Bancshares, Inc. and Carlisle Bancshares, Inc. and Plan of Merger
attached as Exhibit A thereto. (2)
3(i) -- Articles of Incorporation of Carlisle Bancshares, Inc. (2)
3(ii) -- Bylaws of Carlisle Bancshares, Inc. (2)
5 -- Opinion of Ivester, Skinner & Camp, P.A. (1)
8 -- Tax Opinion of Shults, Ray & Kurrus regarding Carlisle Bancshares,
Inc. Acquisition (1)
21 -- Subsidiaries of First United Bancshares, Inc. (2)
23(a) -- Consent of Arthur Andersen LLP (1)
23(b) -- Consent of Martin and Company (1)
23(c) -- Consent of Kemp & Company (1)
23(d) -- Consent of Ernst & Young LLP (1)
24 -- Power of Attorney -- Signature Page of the Registration Statement
(2)
99(a) -- First United Bancshares, Inc. Form of Proxy (1)
99(b) -- Carlisle Bancshares, 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.

(4) 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

II-2
<PAGE> 82

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.

(5) 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.

(6) 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.

(7) 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> 83

SIGNATURES

Pursuant to the requirements of the Securities Act, the Registrant has duly
caused this Amendment No. 1 to Registration Statement No. 333-06185 to be signed
on its behalf by the undersigned, thereunto duly authorized in the City of
Eldorado, State of Arkansas, on July 10, 1996.

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. 1 to Registration Statement No. 333-06185 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 10th day of July,
1996.

<TABLE>
<CAPTION>
SIGNATURE TITLE DATE
- -------------------------------------------- --------------------------------- -------------
<S> <C> <C>
/s/ JAMES V. KELLEY Chairman, President, Chief July 10, 1996
- -------------------------------------------- Executive Officer and Director
James V. Kelley

/s/ JOHN E. BURNS Vice President, Chief Financial July 10, 1996
- -------------------------------------------- Officer and Principal Accounting
John E. Burns Officer

/s/ E. LARRY BURROW* Director July 10, 1996
- --------------------------------------------
E. Larry Burrow

- -------------------------------------------- Director July 10, 1996
Claiborne P. Deming

/s/ WILLIAM A. ECKERT, JR.* Director July 10, 1996
- --------------------------------------------
William A. Eckert, Jr.

/s/ ROY E. LEDBETTER* Director July 10, 1996
- --------------------------------------------
Roy E. Ledbetter

/s/ MICHAEL F. MAHONY* Director July 10, 1996
- --------------------------------------------
Michael F. Mahony

/s/ RICHARD H. MASON* Director July 10, 1996
- --------------------------------------------
Richard H. Mason

/s/ JACK W. McNUTT* Director July 10, 1996
- --------------------------------------------
Jack W. McNutt

/s/ WILLIAM E. MORGAN, JR.* Director July 10, 1996
- --------------------------------------------
William E. Morgan, Jr.
</TABLE>

II-4
<PAGE> 84

<TABLE>
<CAPTION>
SIGNATURE TITLE DATE
- --------------------------------------------- --------------------------------- -------------
<S> <C> <C>
/s/ R. MADISON MURPHY* Director July 10, 1996
- ---------------------------------------------
R. Madison Murphy

/s/ ROBERT C. NOLAN* Director July 10, 1996
- ---------------------------------------------
Robert C. Nolan

/s/ PAULA M. O'CONNOR* Director July 10, 1996
- ---------------------------------------------
Paula M. O'Connor

/s/ KATHERINE PATTON OZMENT* Director July 10, 1996
- ---------------------------------------------
Katherine Patton Ozment

/s/ CAL PARTEE, JR.* Director July 10, 1996
- ---------------------------------------------
Cal Partee, Jr.

/s/ CHELSEY PRUET* Director July 10, 1996
- ---------------------------------------------
Chelsey Pruet

/s/ JOHN D. TRIMBLE, JR.* Director July 10, 1996
- ---------------------------------------------
John D. Trimble, Jr.

/s/ RALPH C. WEISER* Director July 10, 1996
- ---------------------------------------------
Ralph C. Weiser

/s/ DAVID M. YOCUM, JR.* Director July 10, 1996
- ---------------------------------------------
David M. Yocum, Jr.

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

II-5
<PAGE> 85

AS FILED WITH THE SECURITIES AND EXCHANGE COMMISSION ON JULY 10, 1996

Registration No. 333-06185

================================================================================

SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549

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

EXHIBITS

AMENDMENT NO. 1

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> 86

FIRST UNITED BANCSHARES, INC.
FORM S-4 REGISTRATION STATEMENT

INDEX TO EXHIBITS

<TABLE>
<CAPTION>
EXHIBIT
NUMBER DESCRIPTION
------- -----------
<S> <C>
2 -- Restated Agreement and Plan of Reorganization Between First United
Bancshares, Inc. and Carlisle Bancshares, Inc. and Plan of Merger
attached as Exhibit A thereto.(2)
3(i) -- Articles of Incorporation of Carlisle Bancshares, Inc.(2)
3(ii) -- Bylaws of Carlisle Bancshares, Inc.(2)
5 -- Opinion of Ivester, Skinner & Camp, P.A.(1)
8 -- Tax Opinion of Shults, Ray & Kurrus regarding Carlisle Bancshares,
Inc. Acquisition(1)
21 -- Subsidiaries of First United Bancshares, Inc.(2)
23(a) -- Consent of Arthur Andersen LLP(1)
23(b) -- Consent of Martin and Company(1)
23(c) -- Consent of Kemp & Company(1)
23(d) -- Consent of Ernst & Young LLP(1)
24 -- Power of Attorney -- Signature Page of the Registration Statement(2)
99(a) -- First United Bancshares, Inc. Form of Proxy(1)
99(b) -- Carlisle Bancshares, Inc. Form of Proxy(1)
</TABLE>

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

(1) Filed herewith.

(2) As previously filed.

<PAGE> 1
Exhibit 5

July 10, 1996

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. 333-06185, filed on June 18, 1996, and Amendment No. 1 thereto, filed on
July 10, 1996, when issued in exchange for the outstanding common stock of
Carlisle 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

Tax Opinion of Shults, Ray & Kurrus

Regarding Carlisle Bancshares, Inc. Acquisition

<PAGE> 2
EXHIBIT 8

July 10, 1996

Carlisle Bancshares, Inc.
300 Spring Building, Suite 1010
Little Rock, Arkansas

Dear Sirs:

We are special tax counsel to Carlisle Bancshares, Inc. ("Carlisle") in
connection with certain transactions contemplated by the Agreement and Plan of
Reorganization, as amended, dated as of April 1, 1996, pursuant to which First
United Bancshares, Inc. ("First United") would issue to the stockholders of
Carlisle shares of First United Stock in exchange for all the issued and
outstanding stock of Carlisle through a merger transaction (the "Merger") in
which Carlisle 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 this Registation 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 Arthur Andersen LLP
<PAGE> 2
EXHIBIT 23(A)

CONSENT OF INDEPENDENT PUBLIC ACCOUNTANTS

As independent public accountants, we hereby consent to the
incorporation by reference in this Registration Statement on Form S-4 of our
report dated January 19, 1996 included in First United Bancshares, Inc.'s Form
10-K for the year ended December 31, 1995 and to all references to our Firm
included in this Registration Statement.

ARTHUR ANDERSEN LLP

Jackson, Mississippi
July 10, 1996

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EXHIBIT 23(B)

Consent of Martin & Company
<PAGE> 2
EXHIBIT 23(B)

CONSENT OF INDEPENDENT PUBLIC ACCOUNTANTS

As independent public accountants, we hereby consent to the
incorporation by reference in this Registration Statement on Form S-4 of our
report dated January 28, 1994 included in First United Bancshares, Inc.'s Form
10-K for the year ended December 31, 1995 and to all references to our Firm
included in this Registration Statement.

MARTIN & COMPANY

Little Rock, Arkansas

July 9, 1996

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EXHIBIT 23(C)

CONSENT OF INDEPENDENT AUDITORS

We consent to the reference to our firm under the captions "Experts" and
"Selected Financial Data" and to the use of our report dated January 26, 1996
on the consolidated financial statements of Carlisle Bancshares, Inc. as of
December 31, 1995 and for the year then ended included in Amendment No. 1 to
Registration Statement on Form S-4 (No. 333-06185) and related Prospectus of
First United Bancshares, Inc. for the registration of 595,000 shares of its
common stock.

/s/ Kemp & Company
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Little Rock, Arkansas
July 8, 1996

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EXHIBIT 23(D)

Consent of Ernst & Young LLP
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EXHIBIT 23(D)

CONSENT OF INDEPENDENT AUDITORS

We consent to the reference to our firm under the captions "Experts" and
"Selected Financial Data" and to the use of our report dated February 14, 1995
with respect to the consolidated financial statements of Carlisle Bancshares,
Inc. as of December 31, 1994 and for each of the two years then ended included
in Amendment No. 1 to Registration Statement (No. 333-06185) on Form S-4 and
related Prospectus of First United Bancshares, Inc. for the registration of
595,000 shares of its common stock.

/s/ Ernst & Young LLP
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Little Rock, Arkansas
July 8, 1996

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EXHIBIT 99(A)

First United Bancshares, Inc. Form of Proxy
<PAGE> 2
Exhibit 99(a)

FIRST UNITED BANCSHARES, INC.

PROXY

The undersigned hereby appoints James V. Kelley and John E. Burns, or
either of them acting in the absence of the other, as attorneys and proxies of
the undersigned, to represent the undersigned at the Special Meeting of
Stockholders of First United Bancshares, Inc. ("First United") to be held on
August 29, 1996 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 undersigned:

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

FOR AGAINST ABSTAIN
---- ---- ----

2. Approval of the amendment to Article Seventh of the First
United Articles of Incorporation to allow the First United
Board of Directors to approve certain mergers or share
exchanges without Stockholder approval.

FOR AGAINST ABSTAIN
---- ---- ----

3. Approval of the amendment to Article Tenth of the First United
Articles of Incorporation to allow the First United Board of
Directors to increase or decrease the number of directors last
fixed by the Stockholders and to fill new positions created.

FOR AGAINST ABSTAIN
---- ---- ----

4. 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 REORGANIZATION, FOR THE
PROPOSED AMENDMENT TO ARTICLE SEVENTH OF FIRST UNITED'S ARTICLES OF
INCORPORATION AND FOR THE PROPOSED AMENDMENT TO ARTICLE TENTH OF FIRST UNITED'S
ARTICLES OF INCORPORATION. A COPY OF THE PROXY STATEMENT HAS BEEN RECEIVED BY
THE UNDERSIGNED.

DATED:
----------------------------- -------------------------------------
Signature

-------------------------------------
Signature

Please sign exactly as name(s) appear(s) hereon 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.
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EXHIBIT 99(B)

Carlisle Bancshares, Inc. Form of Proxy
<PAGE> 2
Exhibit 99(b)

CARLISLE BANCSHARES, INC.

PROXY

The undersigned hereby appoints Daniel C. Horton and Robert L. Shults,
or either of them acting in the absence of the other, as attorneys and proxies
of the undersigned, to represent the undersigned at the Special Meeting of
Stockholders of Carlisle Bancshares, Inc. ("Carlisle") to be held on August 29,
1996 at 10:00 a.m. local time at 1590 Union National Plaza, Little Rock,
Arkansas 72201 and at any adjournment or adjournments thereof and to vote all
shares of stock of Carlisle held of record by the undersigned on the following
matters:

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

FOR AGAINST ABSTAIN
---- ---- ----

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

FOR AGAINST ABSTAIN
---- ---- ----

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:
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Signature

-------------------------------------
Signature

PLEASE CHECK IF YOU PLAN TO ATTEND THIS MEETING.
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