Annual Report (Form 10-K), fiscal year 1994

ITEM 1. BUSINESS.
DESCRIPTION OF BUSINESS
First United Bancshares, Inc. (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 (FNBE). Between 1981 and 1994, First United acquired six other banks in different cities within Arkansas. The banks acquired were the First National Bank of Magnolia (FNBM), Merchants and Planters Bank, N.A., of Camden (MPBC), City National Bank of Fort Smith (CNBFS), Commercial Bank at Alma (CBA), The Bank of North Arkansas (BNA), and First Stuttgart Bank and Trust Company (FSBTC). Each of the banks are wholly-owned by First United.
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. For further discussion of First United operations, see pages 4 through 19 of the Annual Report, which is incorporated by reference to Item 7 in the Form 10-K.
COMPETITION
The banking business is highly competitive. The banking subsidiaries 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 or 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. 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 or sale of property or the provision of any services. Under Title VI of the Financial Institutions, Reform, Recovery and Enforcement Act of 1989, the Act has been amended to authorize bank holding companies to acquire savings and thrift institutions without tandem operations restrictions.
First United's seven banking subsidiaries ("the 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. All of the Banks are regulated by the Federal Deposit Insurance Corporation. In addition, as national banking associations, FNBE, FNBM, MPBC, and CNBFS are subject to the regulation and supervision of the Comptroller of the Currency, while CBA, BNA and FSBTC are subject to the regulation of the Arkansas State Bank Department. Each of the Banks is a member of the Federal Reserve System and is subject to regulation by the Federal Reserve Board.
The Banks are limited in the amount of dividends they may declare. Prior approval must be obtained from the appropriate regulatory authorities before dividends can be paid by the Banks to First United if the amount of adjusted capital, surplus and retained earnings is below defined regulatory limits. See Note 14 of Notes to the Consolidated Financial Statements, which is incorporated by reference into Item 8 of this Annual Report on Form 10-K. The Banks are also restricted from extending credit or making loans to or investments in First United and certain other affiliates as defined in the Federal Reserve Act. Furthermore, loans and extensions of credit are subject to certain other collateral requirements.
EMPLOYEES
At December 31, 1994, First United had approximately 478 full-time equivalent employees and considers its relationship with its employees to be good.
ITEM 2.



ITEM 2. PROPERTIES.
PROPERTIES
The seven subsidiaries of First United hold in fee and primarily occupy their main office buildings. In addition, the subsidiaries occupy and operate branches located in fifteen (15) communities throughout Arkansas. The majority of the branch locations are held in fee. The locations not held in fee are leased for various terms. First United does not own or lease any real property. Minimal office space is required for First United's officers and employees and such space is provided without charge by FNBE. First United's data processing operations are also located in facilities owned by FNBE.
ITEM 3.

ITEM 3. LEGAL PROCEEDINGS.
LEGAL PROCEEDINGS
First United and its subsidiaries have been named as defendants in various legal actions arising from normal business activities in which damages of various amounts are claimed. The amount, if any, of ultimate liability with respect to such matters cannot be determined. However, after consulting with legal counsel, management believes any such liability will not have a material effect on First United's consolidated financial condition or results of operations.
ITEM 4.

ITEM 4. SUBMISSION OF MATTERS TO A VOTE OF SECURITY HOLDERS.
Not Applicable.
PART II
ITEM 5.

ITEM 5. MARKET FOR REGISTRANTS COMMON EQUITY AND RELATED STOCKHOLDERS MATTERS.
The information required in response to this Item is incorporated by reference from the disclosure contained under the caption "Common Stock and Dividends" on page 14 of the Annual Report to Stockholders, which is included as Exhibit 13 hereto.
ITEM 6.

ITEM 6. SELECTED FINANCIAL DATA.
The information required in response to this Item is incorporated by reference from the disclosure contained under the caption "Selected Financial Data" on page 20 of the Annual Report to Stockholders, which is included as Exhibit 13 hereto.
ITEM 7.

ITEM 7. MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS OF OPERATIONS.
The information required in response to this Item is incorporated by reference from the disclosure contained under the caption "Financial Analysis" on pages 4-19 of the Annual Report to Stockholders, which is included as Exhibit 13 hereto.
ITEM 8.


ITEM 8. FINANCIAL STATEMENTS AND SUPPLEMENTARY DATA.
The information required in response to this Item is incorporated by reference from the disclosure contained under the caption "Financial Statements and Notes" on pages 22-38 of the Annual Report to Stockholders, which is included as Exhibit 13 hereto.
ITEM 9.

ITEM 9. CHANGES IN AND DISAGREEMENTS WITH ACCOUNTANTS ON ACCOUNTING AND FINANCIAL DISCLOSURE.
Not applicable.
PART III
ITEM 10.



ITEM 10. DIRECTORS AND EXECUTIVE OFFICERS OF REGISTRANT.
Pursuant to general instruction G(3) of the instructions to Form 10-K, information concerning First United's executive officers and other significant employees is included under the separate captions "Executive Officers of the Registrant" and "Significant Other Employees" at the end of Part I of this report. The remaining information required in response to this Item is incorporated by reference from the disclosure contained under the caption "Executive Officers and Directors" on pages 40-42 of the Annual Report to Stockholders, which is included as Exhibit 13 hereto, and is incorporated by reference from the Definitive Proxy Statement which will be filed with the Securities and Exchange Commission no later than 120 days after the end of the 1994 fiscal year covered by this Annual Report on 10-K.
ITEM 11.

ITEM 11. EXECUTIVE COMPENSATION.
The information required in response to this Item is incorporated by reference from the Definitive Proxy Statement which will be filed with the Securities and Exchange Commission no later than 120 days after the end of the 1994 fiscal year covered by this Annual Report on 10-K.
ITEM 12.

ITEM 12. SECURITY OWNERSHIP OF CERTAIN BENEFICIAL OWNERS AND MANAGEMENT.
The information required in response to this Item is incorporated by reference from the Definitive Proxy Statement which will be filed with the Securities and Exchange Commission no later than 120 days after the end of the 1994 fiscal year covered by this Annual Report on 10-K.
ITEM 13.

ITEM 13. CERTAIN RELATIONSHIPS AND RELATED TRANSACTIONS.
The information required in response to this Item is incorporated by reference from the Definitive Proxy Statement which will be filed with the Securities and Exchange Commission no later than 120 days after the end of the 1994 fiscal year covered by this Annual Report on 10-K.
PART IV
ITEM 14.

ITEM 14. EXHIBITS, FINANCIAL STATEMENTS SCHEDULES, AND REPORT ON FORM 8K.
ITEM 14(A)(1) FINANCIAL STATEMENTS.
The following consolidated financial statements and the report of independent auditors of First United Bancshares, Inc. and subsidiaries for the year ended December 31, 1994 as required by Item 8, are:
ITEM 14(A)(2) FINANCIAL STATEMENT SCHEDULES.
Not applicable.
ITEM 14(A)(3) FINANCIAL STATEMENT SCHEDULES.
The Exhibits required by Item 601 of Regulation S-K which are required to be filed in response to this Item 14(a)(3) are submitted as a separate section of this Annual Report on Form 10-K under the caption "Exhibit Index".
ITEM 14(B) REPORTS ON FORM 8-K.
First United Bancshares, Inc. filed a Current Report on Form 8-K dated on June 16, 1994, describing under Item 2 that First United Bancshares, Inc. had consummated an Agreement and Plan of Reorganization with InvestArk Bankshares, Inc., whereby First United Bancshares, Inc. acquired ownership of one hundred percent (100%) of the issued and outstanding stock of InvestArk Bankshares, Inc.
First United Bancshares, Inc. filed an amendment to its Current Report on Form 8-K dated June 16, 1994 on Form 8-K/A on August 12, 1994, which provided pro forma financial statements of First United and InvestArk Bankshares, Inc. and historical financial statements of InvestArk Bankshares, Inc.
First United Bancshares, Inc. filed a Current Report on Form 8-K dated October 18, 1994, under Item 5 thereof, disclosing the restated financial statements of First United as a result of accounting for the merger by and between First United and InvestArk Bankshares, Inc. under the pooling of interests method.
ITEM 14(C) EXHIBITS.
The exhibits required by Item 601 of Regulation S-K which are required to be filed in response to this Item 14(c) are submitted as a separate section of this Annual Report on Form 10-K under the caption "Exhibit Index".
ITEM 14(D) FINANCIAL STATEMENT SCHEDULES.
Not applicable.
SIGNATURES
Pursuant to the requirements of Section 13 or 15(d) of the Securities Exchange Act of 1934, the Registrant has duly caused this report to be signed on its behalf by the undersigned, thereunto duly authorized, on the 20th day of March, 1995.
FIRST UNITED BANCSHARES, INC.
By:/s/ JOHN E. BURNS John E. Burns, Chief Financial Officer
POWER OF ATTORNEY
Each person whose signature appears below hereby authorizes James V. Kelley and/or John E. Burns, to file one or more amendments to this Annual Report on Form 10-K, which amendments may make such changes to the Annual Report on Form 10-K as he deems appropriate, and each such person hereby appoints James V. Kelley and/or John E. Burns as his lawful attorney-in-fact to execute in the name and on behalf of each such person individually, and in each capacity stated below, any such amendments to the Annual Report on Form 10-K.
Pursuant to the requirements of the Securities Exchange Act of 1934, this report has been signed below by the following persons on behalf of the Registrant and in the capacities and on the dates indicated.
FIRST UNITED BANCSHARES, INC. ANNUAL REPORT ON FORM 10-K December 31, 1994
EXHIBIT INDEX