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UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
WASHINGTON, D.C. 20549

SCHEDULE 14A

Proxy Statement Pursuant to Section 14(a) of the Securities
Exchange Act of 1934 (Amendment No. )

Filed by the Registrant [X]

Filed by a Party other than the Registrant [_]

Check the appropriate box:

[_] Preliminary Proxy Statement

[_] CONFIDENTIAL, FOR USE OF THE
COMMISSION ONLY (AS PERMITTED BY
RULE 14A-6(E)(2))

[X] Definitive Proxy Statement

[_] Definitive Additional Materials

[_] Soliciting Material Pursuant to (S) 240.14a-11(c) or (S) 240.14a-12

SUPERIOR FINANCIAL CORP.
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(Name of Registrant as Specified In Its Charter)

- --------------------------------------------------------------------------------
(Name of Person(s) Filing Proxy Statement, if other than the Registrant)

Payment of Filing Fee (Check the appropriate box):

[X] No fee required.

[_] Fee computed on table below per Exchange Act Rules 14a-6(i)(4) and 0-11.

(1) Title of each class of securities to which transaction applies:

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(2) Aggregate number of securities to which transaction applies:

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(3) Per unit price or other underlying value of transaction computed
pursuant to Exchange Act Rule 0-11 (set forth the amount on which
the filing fee is calculated and state how it was determined):

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(4) Proposed maximum aggregate value of transaction:

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(5) Total fee paid:

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[_] Fee paid previously with preliminary materials.

[_] Check box if any part of the fee is offset as provided by Exchange
Act Rule 0-11(a)(2) and identify the filing for which the offsetting fee
was paid previously. Identify the previous filing by registration statement
number, or the Form or Schedule and the date of its filing.

(1) Amount Previously Paid:

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(2) Form, Schedule or Registration Statement No.:

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(3) Filing Party:

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(4) Date Filed:

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Notes:

Reg. (S) 240.14a-101.

SEC 1913 (3-99)

[LOGO] SUPERIOR
FINANCIAL CORP

Superior Financial Corp.
16101 LaGrande Drive
Suite 103
Little Rock, Arkansas 72223
Telephone: (501) 324-7282

To Our Shareholders:

The annual meeting of the shareholders of Superior Financial Corp.
("Superior") will be held at 9:00 a.m., central daylight time, Wednesday, May
22, 2002, at 16101 LaGrande Drive, Little Rock, Arkansas.

Enclosed is the notice of the meeting, a proxy statement, a proxy card,
Superior's Annual Report to its Shareholders and Superior's Annual Report on
Form 10-K. We hope you will study the enclosed material carefully and attend
the meeting in person.

Whether you plan to attend the meeting or not, please sign and date the
enclosed proxy card and return it in the accompanying envelope as promptly as
possible. Please indicate in the space provided on the proxy card whether or
not you plan to attend the meeting in person. The proxy may be revoked by your
vote in person at the meeting, by your execution and submission of a later
dated proxy, or by your giving written notice of revocation to the Secretary of
Superior Financial Corp. at any time prior to the voting thereof. Thank you for
your support.

By Order of the Board of Directors

/s/ C. Stanley Bailey
C. Stanley Bailey
Chairman of the Board
and Chief Executive Officer

April 23, 2002

Superior Financial Corp.
16101 LaGrande Drive
Suite 103
Little Rock, Arkansas 72223
Telephone: (501) 324-7282

NOTICE
of the
ANNUAL MEETING OF SHAREHOLDERS
of
SUPERIOR FINANCIAL CORP.
To Be Held May 22, 2002

NOTICE IS HEREBY GIVEN that the annual meeting of shareholders of Superior
Financial Corp. ("Superior"), a Delaware corporation, will be held at 16101
LaGrande Drive, Little Rock, Arkansas, on Wednesday, May 22, 2002, at 9:00
a.m., central daylight time, for the following purposes:

1. To elect the nominees named in the Proxy Statement as directors to serve
for a term of one year.

2. To transact such other business as may properly come before the meeting
or any adjournments thereof, but which is not now anticipated.

These matters are discussed in detail in the accompanying proxy statement.
Only shareholders of record at the close of business on March 29, 2002, will be
entitled to notice of, and to vote at, the meeting. A complete list of the
shareholders entitled to vote at the meeting, arranged in alphabetical order
and showing the address of each shareholder and the number of shares registered
in the name of each shareholder, shall be open for examination by any
shareholder at Superior's office at 16101 LaGrande Drive, Little Rock,
Arkansas, during ordinary business hours for any purpose germane to the
meeting. Such list will be open for a period of at least ten days prior to the
meeting.

All shareholders of Superior are cordially invited to attend the meeting in
person. WHETHER OR NOT YOU PLAN TO ATTEND THE MEETING IN PERSON, PLEASE SIGN
AND DATE THE ENCLOSED PROXY CARD AND RETURN IT IN THE ACCOMPANYING ENVELOPE AS
PROMPTLY AS POSSIBLE. THE PROXY MAY BE REVOKED BY YOUR VOTE IN PERSON AT THE
MEETING, BY YOUR EXECUTION AND SUBMISSION OF A LATER DATED PROXY, OR BY YOUR
GIVING WRITTEN NOTICE OF REVOCATION TO THE SECRETARY OF SUPERIOR AT ANY TIME
PRIOR TO THE VOTING THEREOF.

By Order of the Board of Directors

/s/ C. Stanley Bailey
C. Stanley Bailey
Chairman of the Board
and Chief Executive Officer

April 23, 2002

Superior Financial Corp.
16101 LaGrande Drive
Suite 103
Little Rock, Arkansas 72223
Telephone: (501) 324-7282

PROXY STATEMENT
FOR 2002 ANNUAL MEETING OF SHAREHOLDERS

This Proxy Statement and the accompanying proxy are furnished on or about
April 23, 2002, by Superior Financial Corp. ("Superior") to the holders of
record of common stock, par value $0.01, of Superior (the "Common Stock") in
connection with the annual meeting of Superior's shareholders and any
adjournments thereof (the "Annual Meeting") to be held on Wednesday, May 22,
2002, at 16101 LaGrande Drive, Little Rock, Arkansas. The matters to be
considered and acted upon, including the election of directors, are discussed
herein.

The Board of Directors of Superior (the "Board") recommends the election of
the eight director-nominees named in this Proxy Statement for a term of one
year.

The enclosed proxy is solicited on behalf of the Board and is revocable at
any time prior to the voting of such proxy by giving written notice of
revocation to the Secretary of Superior, or by executing and submitting a later
dated proxy, or by voting in person at the Annual Meeting. Mere attendance at
the Annual Meeting without submitting a later dated proxy will not be
sufficient to revoke a previously submitted proxy. All properly executed
proxies delivered pursuant to this solicitation will be voted at the Annual
Meeting and in accordance with instructions, if any. If no instructions are
given, the proxies will be voted FOR election of the director-nominees named
herein and in accordance with the instructions of management as to any other
matters that may properly come before the Annual Meeting.

Superior will pay the cost of soliciting proxies. In addition to the use of
the mails, proxies may be solicited by personal interview, telephone, facsimile
or electronic communication. Banks, brokers, nominees or fiduciaries will be
required to forward the soliciting material to the principals and to obtain
authorization of the execution of proxies. Superior may, upon request,
reimburse banks, brokers and other institutions, nominees and fiduciaries for
their expenses in forwarding proxy material to the principals. Superior has
retained the firm of Georgeson & Co. to solicit street-name holders and will
pay such firm a fee of $6,500 plus out of pocket expenses.

Shareholders Eligible to Vote

This Proxy Statement is furnished to the holders of Common Stock who were
holders of record as of the close of business on March 29, 2002. Only those
holders are eligible to vote at the Annual Meeting. As of March 29, 2002 there
were outstanding 8,600,626 shares of Common Stock and 1,163 stockholders of
record. Each share of Common Stock is entitled to one vote.

Votes will be tabulated and counted by one or more inspectors of election
appointed by the Chairman of the Board. Proxies marked as abstentions and
shares held in street name which have been designated by brokers on proxy cards
as not voted will not be counted as votes cast. Such proxies will be counted
for purposes of determining a quorum at the Annual Meeting. A quorum consists
of a majority of the shares of Common Stock outstanding.

VOTING SECURITIES AND PRINCIPAL SHAREHOLDERS

Principal Shareholders

The following table sets forth certain information regarding the beneficial
ownership of the Common Stock as of March 29, 2002 by each person of record
believed by Superior to own beneficially 5% or more of the Common Stock.

Percentage
Number Beneficially
Name and Address of Shares Owned
---------------- --------- ------------

Franklin Mutual Advisers, LLC.... 735,700 8.59%
51 John F. Kennedy Parkway
Short Hills, New Jersey 07078

C. Stanley Bailey(1)............. 617,748 6.80
16101 LaGrande Drive, Ste 103
Little Rock, Arkansas 72223

Steven N. Stein(2)............... 577,600 6.74
441 Vine Street, Suite 507
Cincinnati, Ohio 45202

Alexander D. Warm(1)............. 537,100 6.27
2335 Florence Avenue
Cincinnati, Ohio 45206

FleetBoston Financial Corporation 528,300 6.17
100 Federal Street
Boston, Massachusetts, 02110

Financial Stocks, Inc(1)......... 462,999 5.41
441 Vine Street, Suite 507
Cincinnati, Ohio 45202

- --------
(1) Includes 513,582 shares of Common Stock subject to stock options, 487,500
of which were provided pursuant to Mr. Bailey's original employment
agreement, 45,048 shares held jointly by Mr. Bailey and his wife Virginia
H. Bailey, 10,316 shares held in Mrs. Bailey's IRA and 4,350 shares held in
the Mary Brittan Bailey Trust.
(2) John M. Stein, a director of Superior, and Steven N. Stein, a principal
shareholder of Superior, are directors, executive officers and principal
shareholders of Financial Stocks, Inc. Alexander D. Warm, who is the
beneficial owner of 224,600 shares of Common Stock and trustee of a trust
which owns 312,500 shares of Common Stock, and Stanley L. Vigran, who owns
30,000 shares of Common Stock, are the remaining directors and shareholders
of Financial Stocks, Inc., which is a general partner and investment
manager of certain investment funds, including Vine Street Exchange Fund,
L. P., which owns 227,999 shares of Common Stock, and Financial Stocks
Private Equity Fund 1998 L.P., which owns 235,000 shares of Common Stock.
John M Stein and Steven N. Stein are brothers. Steven N. Stein and John M.
Stein each disclaim any ownership of Common Stock held by the other.

SECURITY OWNERSHIP OF MANAGEMENT AND DIRECTORS

The following table sets forth certain information regarding the beneficial
ownership of the Common Stock as of March 29, 2002 by each director and each
executive officer, and all directors and executive officers as a group.

Percentage
Number of Beneficially
Name Shares Owned
---- --------- ------------

C. Stanley Bailey................ 617,748(1) 6.80%
Brian A. Gahr.................... 503(6) *
Rick D. Gardner.................. 16,410(2) *
Howard B. McMahon................ 3,019 *
C. Marvin Scott.................. 263,246(3) 2.98%
John M. Stein.................... 160,800(4) 1.88%
John E. Steuri................... 10,063 *
David E. Stubblefield............ 12,075(5) *
Officers and Directors as a Group 1,083,864 12.65%

- --------
* Represents less than 1%

(1) Includes 513,582 shares of Common Stock subject to stock options, 487,500
of which were provided under Mr. Bailey's original employment agreement,
45,048 shares held jointly by Mr. Bailey and his wife Virginia H. Bailey,
10,316 shares held in Mrs. Bailey's IRA and 4,350 shares held in the Mary
Brittan Bailey Trust.

(2) Includes 11,379 shares of Common Stock subject to stock options.

(3) Includes 262,743 shares of Common Stock subject to stock options, 243,750
of which were provided under Mr. Scott's original employment agreement.

(4) John M. Stein, a director of Superior, and Steven N. Stein, a principal
shareholder of Superior, are directors, executive officers and principal
shareholders of Financial Stocks, Inc. Alexander D. Warm, who is the
beneficial owner of 224,600 shares of Common Stock and trustee of a trust
which owns 312,500 shares of Common Stock, and Stanley L. Vigran, who owns
30,000 shares of the Common Stock, are the remaining directors and
shareholders of Financial Stocks, Inc. Financial Stocks, Inc. is a general
partner and investment manager of certain investments funds, including Vine
Street Exchange Fund, L.P., which owns 227,999 shares of Common Stock, and
Financial Stocks Private Equity Fund 1998 L.P., which owns 235,000 share of
Common Stock. Steven N. Stein and John M. Stein are brothers. Steven N.
Stein and John M. Stein each disclaim any ownership of Common Stock held by
the other.

(5) Includes 10,000 shares held in an irrevocable trust, of which Mr.
Stubblefield is a co-trustee.

(6) Shares held in a living trust, of which Mr. Gahr is a co-trustee.

ELECTION OF DIRECTORS

The Board recommends that the shareholders elect the eight persons named
below to hold office for the term of one year, or until their successors are
elected and qualified. Superior's Restated Certificate of Incorporation
provides that the number of directors which shall constitute the entire Board
shall be fixed from time to time by resolutions adopted by the Board, but shall
not be less than three persons.

If, prior to the voting at the Annual Meeting, any person proposed for
election as a director is unavailable to serve or for good cause cannot serve,
the shares represented by all valid proxies may be voted for the election of
such substitute as the members of the Board may recommend. Superior's
management knows of no reason why any person would be unavailable or unable to
serve as a director.

Assuming a quorum is present at the Annual Meeting, a plurality of the votes
cast will be sufficient to elect the directors. On the proxy card, voting for
directors is Proposal 1.

The bylaws of Superior contain certain limitations on shareholder
nominations of candidates for election as directors. See "Bylaw Provisions
Regarding Conduct of Shareholders' Meetings."

The following table provides certain biographical information about each
nominee to be proposed on behalf of the Board. Unless otherwise indicated, each
person has been engaged in the principal occupation shown for the last five
years. Executive officers serve at the discretion of the Board.

DIRECTORS TO BE NOMINATED ON BEHALF OF THE BOARD FOR A TERM OF ONE YEAR

Name, Age and Year Position and Office Held with Superior Present and Principal Occupation for the
Became Director and Superior Bank Last Five Years
- --------------------- -------------------------------------- ----------------------------------------------------

C. Stanley Bailey* Chairman of the Board, Chief Chief Financial Officer and Executive Vice
53, 1998 Executive Officer of both President of Hancock Holding Company and
Superior and Superior Bank Hancock Bank, Gulfport, Mississippi, 1995-1998;
Vice Chairman of the Board of Directors, AmSouth
Bancorporation and AmSouth Bank, Birmingham,
Alabama 1971-1994

C. Marvin Scott* President, Chief Operating Chief Retail Officer and Senior Vice President,
52, 1998 Officer and Director of both Hancock Holding Company and Hancock Bank,
Superior and Superior Bank Gulfport Mississippi, 1996-1998; Executive Vice
President--Consumer Banking, AmSouth Bank
Birmingham, Alabama 1988-1996

Rick D. Gardner* Chief Financial Officer and Chief Financial Officer and subsequently Chief
42, 2001 Director of both Superior and Executive Officer of First Commercial Mortgage
Superior Bank Company, Little Rock, Arkansas, 1996-1998; Chief
Financial Officer, Metmor Financial, Kansas City,
Missouri, 1990-1995

Brian A. Gahr Director of Superior and Division Vice President of Whirlpool Corp. since
47, 1999 Superior Bank 1995, Fort Smith, Arkansas

Howard B. McMahon Director of Superior; director of Owner of M-P Warehouse, Fort Smith, Arkansas,
63, 1999 Superior Bank since 1995 2000-Present; prior to 2001, Vice President of SSI,
Inc., a general contractor in Fort Smith, Arkansas

John M. Stein Director of Superior and President, Financial Stocks, Inc., Cincinnati, Ohio,
35, 1998 Superior Bank 1995 to present; Vice President, Bankers Trust
Company, New York, New York, 1993-1995

John E. Steuri Director of Superior and Private Investments, 2000-Present; Chairman of
62, 1999 Superior Bank Advanced Thermal Technologies, Inc., 1996-2000;
Chairman, President & CEO of ALLTEL
Information Systems from 1988 to 1996, Little
Rock, Arkansas

David E. Stubblefield Director of Superior; director of President and Chief Executive Officer of ABF
64, 1998 Superior Bank since 1994 Freight Systems, Inc., Fort Smith, Arkansas

- --------
* Indicates that the director/nominee is also an executive officer.

The Board has established audit, compensation and loan and investment
committees. The Audit Committee currently consists of Messrs. Gahr, McMahon and
Stein, none of whom is an employee of Superior. The Audit Committee reviews the
general scope of the audit conducted by Superior's independent auditors, the
fees charged for their work and matters relating to Superior's internal control
systems. In performing its functions, the Audit Committee meets separately with
representatives of Superior's independent auditors, with Superior's internal
auditors and with representatives of senior management. The Audit Committee met
four times in 2001.

The Compensation Committee currently consists of Messrs. Stein, Steuri and
Stubblefield, none of whom is an employee of Superior. The Compensation
Committee administers Superior stock option plans and grants options and other
awards to company employees under such plans. In addition, the Compensation
Committee is responsible for establishing policies dealing with various
compensation and employee benefit matters of Superior. The Compensation
Committee met four times in 2001.

The Loan and Investment Committee presently consists of Messrs.
Stubblefield, Gahr, McMahon, and Steuri. The Loan and Investment Committee
oversees loan and investment policies and activities and reviews and approves
loan relationships of $2,000,000 and greater. The Loan and Investment Committee
met twenty-four times in 2001.

Superior does not have a nominating committee.

During 2001, the Board met 14 times. All directors attended 75% or more of
these meetings, plus meetings of committees of the Board on which they served.

SECTION 16(a) BENEFICIAL OWNERSHIP REPORTING COMPLIANCE

Section 16(a) of the Securities Exchange Act of 1934 requires Superior
directors, certain officers and 10% shareholders to file reports of ownership
and changes in ownership with the Securities and Exchange Commission (the
"SEC"). Such officers, directors and 10% shareholders are required by SEC
regulations to furnish Superior with copies of all Section 16(a) reports they
file, including initial reports on Form 3 and annual reports on Form 5.

Based solely on its review of the copies of such forms received by it, or
written representations from certain reporting persons that no reports on Form
5 were required for those persons, Superior believes that during 2001 all
filings applicable to its officers, directors and 10% shareholders were made
timely.

COMPENSATION COMMITTEE INTERLOCKS
AND INSIDER PARTICIPATION

The Compensation Committee currently consists of Messrs. Stein, Steuri and
Stubblefield, none of whom is an employee of Superior. Before the formation of
the Compensation Committee, and in connection with the acquisition of Superior
Bank (the "Bank"), Messrs. Bailey and Scott negotiated their respective
employment agreements with Financial Stocks, Inc. and Keefe, Bruyette & Woods,
Inc., who acted as the lead investor and the placement agent, respectively, and
were instrumental in raising the capital necessary for such acquisition and for
payment of the costs associated with such acquisition and each of whom is a
principal shareholder. See "--Employment Agreements."

Other Transactions--Loans

Certain directors, officers and principal shareholders of Superior and their
affiliated interests were customers of and had transactions with the Bank in
the ordinary course of business; additional transactions may be expected to
take place in the ordinary course of business. Included in such transactions
were outstanding loans and commitments from the Bank, all of which were made in
the ordinary course of business 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 collectability or present other unfavorable features.

Director Compensation

Non-employee directors of Superior and the Bank currently receive fees of
$1,000 for each Board meeting of each entity attended. Non-employee members of
committees of Superior and the Bank receive fees of $250 for each committee
meeting attended. All of the directors of Superior also serve as directors of
the Bank. Fees paid to directors of Superior for their services as directors of
the Bank or as directors of Superior totaled $109,000 in 2001.

EXECUTIVE COMPENSATION
AND OTHER INFORMATION

The following table provides certain summary information concerning
compensation paid or accrued by Superior to or on behalf of Superior's Chairman
of the Board and Chief Executive Officer and the only other two executive
officers of Superior who were paid or otherwise compensated in excess of
$100,000 in 2001.

Long Term
Compensation Awards
----------------------

Annual Compensation Restricted Securities
---------------------- Stock Underlying All Other
Name and Principal Position Year Salary ($) Bonus ($) Awards ($) Options (#) Compensation
- --------------------------- ---- ----------- ---------- ---------- ----------- -------------
C. Stanley Bailey.......... 2001 $ 323,750 $ 150,000 -- 15,000 *
Chairman and CEO 2000 300,000 150,000 -- 32,000 *
1999 250,000 125,000 -- 31,250 *

C. Marvin Scott............ 2001 $ 243,750 $ 110,000 -- 15,000 *
President and Chief 2000 220,000 110,000 -- 21,250 *
Operating Officer 1999 170,000 85,000 -- 20,732 $ 102,000(1)

Rick D. Gardner............ 2001 $ 151,875 $ 70,000 -- 12,000 *
Chief Financial Officer 2000 140,000 70,000 -- 7,000 *
1999 125,000 35,938 -- 6,830 *

- --------
* Does not include amounts attributable to miscellaneous benefits received by
the named officers. The costs of providing such benefits to the named
officers for the years ended 2001, 2000 and 1999 did not exceed the lesser
of $50,000 or 10% of the total annual salary and bonus reported.

(1) Represents a reimbursement paid to Mr. Scott for relocation expenses and
income taxes incurred by the reimbursement.

Stock Option Plans

Superior adopted the Superior Financial Corp. 1998 Long Term Incentive Plan
(the "LTIP") on June 17, 1998. It was ratified by the shareholders at the 1999
Annual Meeting. The LTIP is an omnibus plan administered by the Compensation
Committee to provide equity-based incentive compensation for Superior's key
employees. It provides for issuance of incentive stock options, qualified under
Section 422 of the Internal Revenue Code of 1986, as amended (the "Code"), and
non-qualified stock options. The LTIP also provides for issuance of stock
appreciation rights, whether in tandem with options or separately, and awards
of restricted shares subject to time-based restrictions and/or performance
goals.

The LTIP imposes a limit on the total number of shares that may be issued
during the ten-year term of the LTIP equal to 10% of the number of shares
outstanding as of December 31, 1998. It imposes a limit on the number of awards
that may be granted to all employees in any one calendar year equal to 1% of
the number of shares outstanding on December 31, 1998. On that date there were
10,080,503 shares of Common Stock

outstanding. However, any unused portion of the annual shares limit shall be
carried forward and available to be awarded in future years. Finally, the LTIP
limits the number of restricted stock awards that may be granted each year,
which are time-based restricted only (i.e., without regard to any performance
goals), to a number of shares equal to .33% (one-third of one percent) of the
number of shares outstanding on December 31, 1998.

Each award is non-transferrable during the life of the employee, except as
permitted by the Compensation Committee to the employee's family or a trust for
the employee's family. The awards do not create a right to employment. Upon a
change in control of Superior any vesting schedules and performance goals are
deemed satisfied.

As discussed further below, options were granted to Mr. Bailey and Mr. Scott
pursuant to their Founder's Agreements and Employment Agreements, respectively.
Those options were issued before adoption of the LTIP by Superior's Board and
are non-qualified stock options. Those options were not issued pursuant to the
LTIP.

Options

The following table shows certain information respecting exercised and
unexercised options for Common Stock held by Superior executive officers at
December 31, 2001. Certain options have been granted pursuant to a performance
based vesting schedule which only permits the holder to exercise a portion of
his or her options upon accomplishing pre-defined levels of stock price
performance.

Aggregated Option Exercises in Last Fiscal Year and Fiscal Year-End Option
Values

Number of
Securities Value of
Underlying Unexercised
Unexercised In-the-Money
Options At Options At
December 31, December 31,
2001 2001(2)
-------------- ------------------

Shares
Acquired On Value Exercisable/ Exercisable/
Name Exercise(#) Realized($)(1) Unexercisable Unexercisable
---- ----------- -------------- -------------- ------------------
C. Stanley Bailey -- -- 513,582/52,168 $2,882,582/256,436
C. Marvin Scott.. -- -- 262,743/37,989 1,466,656/178,955
Rick D. Gardner.. -- -- 11,379/19,991 48,938/84,542

- --------
(1) Value realized is the difference between the fair market value of the
securities underlying the options and the exercise price on the date of
exercise.

(2) Value is calculated by subtracting the exercise price from the market value
of underlying securities at December 31, 2001. The market value for the
Common Stock as of December 31, 2001 was $15.65.

The following table shows certain information regarding grants of options
respecting Common Stock to certain executive officers of Superior during 2001.

Option Grants in Last Fiscal Year

Potential Realizable
Value at Assumed
Annual Rates of Stock
Individual Price Appreciation for
Grants Option Term
---------- ----------------------
Percent of
Total
Options
Number of Granted Market
Securities to Exercise Price
Underlying Employees or Base On
Options in Fiscal Price Date of Expiration
Name Granted (#) Year ($/Sh) Grant Date 5%($) 10%($)
- ---- ----------- ---------- --------- -------- ---------- -------- --------
C. Stanley Bailey 15,000 11.9% $ 13.05 $ 13.05 April 2011 $303,600 $461,550
C. Marvin Scott.. 15,000 11.9 13.05 13.05 April 2011 303,600 461,550
Rick D. Gardner.. 12,000 9.5 13.05 13.05 April 2011 242,880 369,240

Employment Agreements

Mr. Bailey has an employment agreement with Superior which provides, among
other things, that Mr. Bailey serve as the Chairman of the Board of Directors
and Chief Executive Officer of Superior and the Bank. Mr. Bailey's compensation
for 2001 was determined by Superior's Compensation Committee. See "Compensation
Committee Report--2001 Compensation."

Mr. Scott has an agreement with Superior which provides, among other things,
that Mr. Scott serve as the President of Superior and the Bank. Mr. Scott's
compensation for 2001 was determined by Superior's Compensation Committee. See
"Compensation Committee Report--2001 Compensation."

Mr. Gardner has an agreement with Superior to serve as Superior's and the
Bank's Chief Financial Officer. Mr. Gardner's compensation for 2001 was
determined by Superior's Compensation Committee. See "Compensation Committee
Report--2001 Compensation."

Superior has agreed with each of Mr. Bailey, Mr. Scott and Mr. Gardner to
pay certain severance benefits upon a change of control of Superior. A change
of control is defined for this purpose as the occurrence of a transaction the
result of which is that more than 25% of the outstanding shares of Common Stock
(or a successor or parent) are acquired by any person, entity or group acting
in concert, which before the transaction, owned less than 25% of the
outstanding shares of the Common Stock. In the event of a change of control,
Mr. Bailey will be entitled to receive, subject to Section 280(g) of the Code,
an amount equal to three times his total compensation for the preceding 12
months. Each of Mr. Scott and Mr. Gardner will be entitled to receive,
respectively, an amount equal to 2.99 times of his total compensation for the
preceding 12 months.

Benefit Plans

Superior has established a contributory profit sharing plan pursuant to
Section 401(k) of the Code covering substantially all employees (the "Plan").
Superior is the Plan administrator and investment advisor, and Capital Guardian
serves as the Plan's trustee. Each year Superior determines, at its discretion,
the amount of matching contributions not to exceed 6% of the employee's annual
compensation vesting ratably over a four year period. Total Plan expenses
charged to Superior's operations for 2001 were $366,164.

Interests of Management and Others in Certain Transactions

Mr. Bailey, Mr. Scott and Mr. Gardner have entered into employment
agreements with Superior. These agreements provide, among other things, that
each of them is entitled to receive options to acquire shares of Common Stock
pursuant to a vesting schedule determined by the occurrence of certain events.
See "--Employment Agreements."

COMPENSATION COMMITTEE REPORT

The Compensation Committee consists of John M. Stein, John E. Steuri and
David E. Stubblefield, none of whom is an employee of Superior or the Bank. The
committee reviews and determines cash compensation of executive officers of
Superior.

Compensation Principles

The committee determines executive compensation in accordance with five
principles: (1) Superior's financial performance measured against attainment of
Superior's business goals and the performance of peer-group institutions; (2)
the competitiveness of executive compensation with Superior's peers; (3) the
encouragement of stock ownership of management; (4) the individual performance
of each executive officer; and (5) recommendations by the Chief Executive
Officer regarding all executive officers other than himself. No
disproportionate weight is assigned to any individual principle. In 2001, the
Compensation Committee determined that bonuses for the executive officers,
including the Chief Executive Officer, would be a percentage of base salary,
determined by the achievement of objective performance goals.

2001 Compensation

The Compensation Committee determined the compensation for Superior's
executive officers, including the Chief Executive Officer. In 2001, C. Stanley
Bailey, the Chief Executive Officer was paid a salary of $323,700 and a bonus
of $150,000. In 2001, C. Marvin Scott, the Chief Operating Officer and Rick D.
Gardner, the Chief Financial Officer were paid salaries of $243,750 and
$151,875, respectively, and bonuses of $110,000 and $70,000, respectively.

Stock Awards

Certain stock awards to Mr. Bailey, Mr. Scott and Mr. Gardner are governed
by the terms of their employment agreements. See "--Employment Agreements."

This foregoing report is submitted by the Compensation Committee.

Committee:

John M. Stein
John E. Steuri
David E. Stubblefield

Performance Graph

[CHART]

SUPERIOR NASDAQ NASDAQ MARKET
FINANCIAL CORP. BANK INDEX INDEX-U.S. COS.

2/08/99 100.00 100.00 100.00
3/31/99 85.56 100.63 102.08
6/30/99 97.78 108.00 111.64
9/30/99 106.67 98.29 114.22
12/31/99 98.89 100.85 165.78
3/31/00 84.44 91.11 190.38
6/30/00 90.55 88.63 165.53
9/30/00 100.00 105.46 152.31
12/31/00 97.22 115.08 101.97
3/31/01 116.67 109.75 76.88
6/30/01 132.44 123.14 90.10
9/30/01 131.11 119.94 62.57
12/31/01 138.67 125.46 81.56

ASSUMES $100 INVESTED ON FEB. 08, 1999
FISCAL YEAR ENDING DEC. 31, 2001

Neither the foregoing graph nor the Compensation Committee Report is to be
deemed to be incorporated by reference into any past or subsequent filings by
Superior under the Securities Act of 1933 or the Securities Exchange Act of
1934.

AUDIT COMMITTEE REPORT

The Audit Committee currently consists of Messrs. Gahr, McMahon and Stein,
none of whom is an employee of Superior. The Audit Committee has adopted a
charter, which was attached as an exhibit to Superior's proxy statement for its
2001 annual meeting. The Audit Committee reviews its charter for adequacy on an
annual basis. In accordance with its charter, the Audit Committee met four
times in 2001. The Audit Committee has reviewed Superior's audited financial
statements with management to determine whether such statements were consistent
with Superior's audit policy and whether Superior's internal controls were
adequate for the preparation of the financial statements.

The Audit Committee has reviewed and discussed with management Superior's
audited financial statements as of and for the fiscal year ended December 31,
2001. The Committee also has discussed with the independent auditors for
Superior the matters required to be discussed by Statement on Auditing
Standards No. 61, Communication with Audit Committees, as amended. The
Committee has received the written disclosures and the letter from the
independent auditors for Superior required by Independence Standards Board
Standard No. 1, Independence Discussions with Audit Committees, as amended, and
has discussed with the independent auditors that firm's independence from
management and Superior. In addition, the Audit Committee considered the
compatibility of nonaudit services with the auditor's independence.

Based on the review and discussions referred to in the above paragraph, the
Committee recommended to the Board that the year-end audited financial
statements be included in the Company's Annual Report on Form 10-K for the
fiscal year ended December 31, 2001 for filing with the Securities and Exchange
Commission.

One of the Audit Committee's responsibilities is to recommend to the Board
an independent auditor. In making its recommendation, the Audit Committee
considers, among others, the following factors:

. the fees paid to Superior's independent auditor in relation to the
services they provided and the compatibility of any non-audit services
that Superior's independent auditor provided to Superior with such firm's
status as Superior's independent auditor;

. the auditor's system of internal controls for the purpose of assuring the
quality of the audit, including (a) engagement partner rotation policy,
(b) whether compensation of key partners on the account is based in part
on marketing nonaudit services, (c) procedures for resolution of
technical issues, including the roles of the reviewing partner and the
national office and (d) results of the most recent peer review;

. the auditor's expertise in Superior's industry;

. the education and experience of the key partners on the audit;

. any relationship that might affect independence, such as whether any of
Superior's senior financial staff are recent alumni of the auditor; and

. the scope, plan and staffing of the audit, including whether the proposed
fees are adequate and appropriate relative to the scope of the work
contemplated.

The foregoing report is submitted by the Audit Committee.

Committee:

Brian A. Gahr
Howard B. McMahon
John M. Stein

DISCLOSURES REGARDING INDEPENDENT AUDITOR FEES

Ernst & Young LLP acted as Superior's and the Bank's independent auditors
for 2001. It is expected that representatives of this firm will be present at
the Annual Meeting and have an opportunity to make a statement to, and to
answer questions from, shareholders.

Audit Fees

Audit related fees for the year ended December 31, 2001 totaled $143,715
(Annual Audit: $125,000; Audit Related Services: $18,715). Superior expects to
pay additional fees in connection with the expanded audit performed by Ernst &
Young LLP at Superior's request.

Financial Information Systems Design and Implementation Fees

For the year ending December 31, 2001, Ernst & Young LLP was not engaged to
and did not provide any of the professional services described in Paragraph
(c)(4)(ii) of Rule 2-01 of Regulation S-X.

All Other Fees

For the year ended December 31, 2001, Ernst & Young LLP billed $39,853 to
Superior for services other than those described above.

Compatibility of Fees

Superior's Audit Committee has considered the provision of non-audit
services by Ernst & Young LLP and the fees paid to Ernst & Young LLP for such
services, and believes that the provision of such services and their fees are
compatible with maintaining Ernst & Young LLP's independence (See "Audit
Committee Report").

BYLAW PROVISIONS REGARDING CONDUCT OF SHAREHOLDERS' MEETINGS

Superior's bylaws contain two provisions relating to the conduct of
shareholders' meetings. The first provision requires that certain procedures be
followed by a shareholder of record who wishes to present business at the
annual meeting of shareholders, including the nomination of candidates for
election as directors. In order to nominate persons for election as a director
or to present other business at a meeting, a shareholder must provide written
notice thereof to the Secretary of Superior not less than 60 days nor more than
90 days prior to the first anniversary of the preceding year's annual meeting,
provided that, if the date of the annual meeting is advanced by more than 30
days or delayed by more than 60 days from such anniversary date, notice by the
shareholder to be timely must be delivered not earlier than the 90th day prior
to such annual meeting or the 20th day following the day on which public
announcement of the date of such meeting is first made.

As it relates to director nominations, the written notice must state all
information as to each nominee required to be disclosed in solicitations of
proxies for election of directors under SEC regulations, including the written
consent of each such nominee. As for any other business that the shareholder
proposes to bring before the meeting, the written notice must contain a brief
description of the business, the reasons for conducting the business at the
meeting and any material interest in such business of such shareholder. The
notice must also contain the name and address of such shareholder and the class
and number of shares of Superior owned beneficially and of record, as well as
the same information for each beneficial owner who may be nominated for
election as a director. The Board is not required to nominate a person
designated by a shareholder or to take up such other business as may be
contained in a written notice from a shareholder; however, compliance with this
procedure would permit a shareholder to nominate the individual at the
shareholders meeting, and any shareholder may vote shares in person or by proxy
for any individual such shareholder desires. The procedures relating to
nominating directors and presenting other business at a shareholders' meeting
may only be used by a shareholder who is a shareholder of record at the time of
the giving of the notice by the shareholder to the secretary of Superior. The
procedures do not prohibit or apply to shareholder proposals under SEC rule
14a-8 as described at "Proposals of Shareholders."

The second provision of Superior's bylaws relates to the conduct of the
business at a shareholder meeting. Under that provision, the Board has the
authority to adopt rules for the conduct of meetings, and, unless inconsistent
with any such rules, the Chairman of the meeting may prescribe such rules,
regulations and procedures as, in his judgment, are appropriate for the proper
conduct of the meeting.

PROPOSALS OF SHAREHOLDERS

Subject to certain rules of the SEC, proposals by shareholders intended to
be presented at Superior's 2003 annual meeting of shareholders must be received
at Superior's principal executive offices not less than 120 calendar days in
advance of April 23, 2003 (December 24, 2002) for inclusion in the proxy or
information statement relating to the 2003 annual meeting.

OTHER MATTERS

Superior does not know of any matters to be presented for action at the
meeting other than those listed in the notice of the meeting and referred to
herein.

Superior has furnished without charge to its shareholders, herewith, a copy
of its annual report on Form 10-K, including Superior financial statements but
excluding financial statement schedules and exhibits, required to be filed with
the SEC for the year ended December 31, 2001. A copy of the financial statement
schedules and exhibits may be obtained upon written request to Rick D. Gardner,
16101 LaGrande Drive, Suite 103, Little Rock, Arkansas 72223.

PLEASE SIGN AND DATE THE ENCLOSED PROXY CARD, AND RETURN IT IN THE
ACCOMPANYING ENVELOPE AS PROMPTLY AS POSSIBLE.

YOU MAY REVOKE THE PROXY BY GIVING WRITTEN NOTICE OF REVOCATION TO THE
SECRETARY OF SUPERIOR AT ANY TIME PRIOR TO THE VOTING THEREOF, BY EXECUTING AND
SUBMITTING A LATER DATED PROXY, OR BY ATTENDING THE MEETING AND VOTING IN
PERSON.

SOLICITED BY THE BOARD OF DIRECTORS
PROXY
Common Stock
Superior Financial Corp
Annual Meeting of Shareholders
May 22, 2002

The undersigned hereby appoints C. Stanley Bailey and C. Marvin Scott
and either of them, or such other persons as the Board of Directors of
Superior Financial Corp. ("Superior") may designate, proxies for the
undersigned, with full power of substitution, to represent the
undersigned and to vote all of the shares of common stock, par value
$0.01, of Superior (the "Common Stock") which the undersigned would be
entitled to vote at the annual meeting of shareholders to be held on May
22, 2002 and at any and all adjournments thereof. The proxies, in their
discretion, are further authorized to vote (i) for the election of a
person to the Board of Directors if any nominee named herein becomes
unable to serve or for good cause will not serve, and (ii) on any other
matter that may properly come before the meeting, including matters
incident to the conduct of the meeting.

1. Election of Directors:

NOMINEES FOR A TERM EXPIRING IN 2003: C. Stanley Bailey, Brian A. Gahr,
Rick D. Gardner, Howard B. McMahon, C. Marvin Scott, John M. Stein, John
E. Steuri and David E. Stubblefield

[_] FOR all nominees listed except as marked to the
contrary [_] WITHHOLD AUTHORITY to vote for all
nominees

INSTRUCTIONS: TO WITHHOLD AUTHORITY TO VOTE FOR ANY INDIVIDUAL, STRIKE A
LINE THROUGH THE NOMINEE'S NAME IN THE ABOVE LIST.

(Continued On Reverse Side)

(Continued from reverse side)
THIS PROXY IS SOLICITED ON BEHALF OF THE BOARD OF DIRECTORS AND WILL BE
VOTED AS DIRECTED HEREIN. IF NO DIRECTION IS GIVEN, THIS PROXY WILL BE
VOTED FOR THE PERSONS NAMED IN PROPOSAL 1.
Please sign and date this proxy.
I will [_] will not [_] attend the meeting.

Dated:_____, 2002

Phone No.:______________

_____________________
(Signature of
Shareholder)

_____________________

(Signature of Shareholder,
if more than one)

Please sign exactly
as your name appears
on the envelope in
which this material
was mailed. Agents,
executors,
administrators,
guardians, and
trustees must give
full title as such.
Proxies of
corporations should
be signed by their
President or
authorized officer.