First United Bancshares Inc. Announces Affiliation With First Republic Bancshares Inc.

EL DORADO, Ark.--(BUSINESS WIRE)--Oct. 20, 1997--James V. Kelley, Chairman, President and Chief Executive Officer of First United Bancshares, Inc. ("First United"), George W. Bolton, Jr., Chairman of First Republic Bancshares, Inc. ("Republic"), and Henry A. Logue, President and Chief Executive Officer of First Republic Bank, announced today the signing of a letter of intent to merge the two companies, pending approval by Republic's and First United's shareholders and of regulatory authorities.

Republic is the parent company of First Republic Bank, which operates six locations in Monroe, West Monroe, Ruston and Rayville, La. At Sept. 30, 1997, Republic, with total assets of $149 million, reported total deposits of $125 million and loans of $103 million.

As part of this transaction, First United will exchange approximately 800 thousand shares of its common stock for all of the outstanding shares of Republic on a fully-diluted basis. The total purchase price based upon today's market value of First United common stock is approximately $32 million. First United anticipates realizing immediate operating efficiencies from this transaction and when closed, further anticipates the earnings impact to be accretive to 1998 operating results. Both Republic and First United anticipate this transaction to qualify as a pooling of interests.

"With their strong network of banks in north Louisiana, as well as their close geographic proximity to many of our existing operations, First Republic will be an excellent addition to First United," said Kelley. "First Republic's strong commitment to quality service and to their communities is a perfect fit with the philosophy of First United."

"By joining with First United, we are able to continue our efforts to make First Republic Bank the best possible bank it can be," said Logue. "This affiliation is a great opportunity for our shareholders, customers and employees. First Republic Bank, Founded for Service, will remain the bank of choice in our market areas. We look forward to the opportunity to grow and prosper in the communities we serve in north Louisiana."

First United anticipates this transaction will close during the first quarter of 1998.

First United, with $1.84 billion in assets, is a multi-bank holding company with nine affiliate banks and a non-bank subsidiary, First United Trust Company, N.A., serving 30 communities in Arkansas and Texas.

In addition, First United has signed a definitive agreement to obtain City Bank & Trust, a $64 million bank in Shreveport, La. Also, First United has signed a definitive agreement 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. Once these mergers are finalized, First United will have approximately $2.4 billion in assets and will serve 38 communities in Arkansas, Texas and Louisiana.

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, 870/863-3181