First United Bancshares, Inc. announces affiliation with City Bank & Trust of Shreveport, La.

EL DORADO, Ark.--(BUSINESS WIRE)--June 19, 1997--James V. Kelley, Chairman, President and Chief Executive Officer of First United Bancshares, Inc. ("First United"), and Ron C. Boudreaux, President and Chief Executive Officer of City Bank & Trust ("City") of Shreveport, La., announced today the signing of a definitive agreement to merge the two companies, pending approval by City's and First United's shareholders and of regulatory authorities.

City, a $60 million bank, has four locations in Shreveport, La.

As part of this transaction, First United will exchange approximately 425,000 shares of its common stock for all of the shares of City outstanding. The total purchase price based upon today's market value of First United common stock is $16.9 million. Both City and First United anticipate this transaction to qualify as a pooling of interests.

"First United is pleased to add City Bank & Trust to our holding company," stated Kelley. "This is the first Louisiana bank to join our group of banks which currently operate in Arkansas and Texas. City has a history of excellent earnings, illustrated most recently by their return on assets for 1996 of 2.14%. City has a good reputation of providing quality service to the Shreveport area and will be an excellent addition to our company."

"City Bank & Trust is looking forward to our affiliation with First United," said Boudreaux. "It gives us the opportunity to continue our operation under the same name, with the same officers and employees, while offering expanded products such as mortgage lending and full trust services. First United's philosophy of operating community banks mirrors our own. While we look forward to our affiliation with First United, our customers will benefit the most."

First United anticipates this transaction will close in late 1997 or early 1998.

First United, with $1.56 billion in assets, is a multi-bank holding company with eight affiliate banks and a non-bank subsidiary, First United Trust Company, N.A., serving 27 communities in Arkansas and Texas.

In addition, First United has signed a definitive agreement to acquire Fredonia State Bank, a $245 million bank located in Nacogdoches, Texas with branches in Garrison and Alto. First United has also signed a letter of intent to purchase Citizens National Bancshares, Inc., a $263 million bank holding company headquartered in Hope, Ark. Citizens National Bancshares owns Citizens National Bank of Hope, Ark. and Texarkana, Ark., as well as Peoples Bank and Loan Company in Lewisville, Ark.

First United's stock is listed on the NASDAQ National Market System under the symbol "UNTD."

CONTACT: First United Bancshares, Inc., El Dorado

John E. Burns, 501/863-3181