SCHEDULE 14A INFORMATION

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 Section 240.14a-11(c) or Section 240.14a-2.

United Companies Financial Corporation
- --------------------------------------------------------------------------------
(Name of Registrant as Specified In Its Charter)

- --------------------------------------------------------------------------------
(Name of Person(s) Filing Proxy Statement, if other than 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 0-12.

(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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2

'LOGO'

UNITED COMPANIES FINANCIAL CORPORATION
P.O. BOX 1591 -- 4041 ESSEN LANE
BATON ROUGE, LOUISIANA 70821

NOTICE OF 1998 ANNUAL MEETING OF SHAREHOLDERS

PLEASE TAKE NOTICE that the 1998 Annual Meeting of Shareholders of United
Companies Financial Corporation, a Louisiana corporation (the "Company"), will
be held at Twelve United Plaza, Auditorium, First Floor, 8549 United Plaza
Boulevard, Baton Rouge, Louisiana, on Tuesday, May 12, 1998, at 9:00 a.m. The
Annual Meeting is being held to consider and act upon:

(1) the election of three persons to the Board of Directors to serve
until the 2001 Annual Meeting of Shareholders or until each of their
successors is duly elected and qualified; and

(2) such other business as may properly come before the Annual Meeting
or any adjournment thereof.

The Board of Directors has fixed the close of business on April 6, 1998, as
the record date for the determination of shareholders entitled to notice of, and
to vote at, the Annual Meeting.

Your proxy card is enclosed. You are cordially invited to attend the Annual
Meeting, but if you do not expect to attend or if you plan to attend but it is
more convenient for the designated proxies to vote your shares, please execute,
date and return the enclosed proxy card in the enclosed postage-paid envelope as
soon as possible to ensure that your shares will be voted at the Annual Meeting.

BY ORDER OF THE BOARD OF DIRECTORS

J. TERRELL BROWN
Chairman and Chief Executive Officer

Baton Rouge, Louisiana
April 10, 1998

IMPORTANT

TO ASSURE YOUR REPRESENTATION AT THE MEETING, PLEASE DATE, SIGN AND MAIL
PROMPTLY THE ENCLOSED PROXY FOR WHICH A RETURN ENVELOPE IS PROVIDED.
3

UNITED COMPANIES FINANCIAL CORPORATION
P.O. BOX 1591 -- 4041 ESSEN LANE
BATON ROUGE, LOUISIANA 70821

PROXY STATEMENT

INTRODUCTION

The accompanying Proxy is solicited on behalf of the Board of Directors of
United Companies Financial Corporation, a Louisiana corporation (the "Company"),
for use at the 1998 Annual Meeting of Shareholders of the Company (the "Annual
Meeting") to be held at 9:00 a.m. on Tuesday, May 12, 1998, at Twelve United
Plaza, Auditorium, First Floor, 8549 United Plaza Boulevard, Baton Rouge,
Louisiana, and any postponements or adjournments thereof. This Proxy Statement
is being furnished in connection with the Annual Meeting. The Company
anticipates that this Proxy Statement and the accompanying Proxy will be first
sent or given to shareholders of the Company on approximately April 10, 1998.

Shareholders are being asked at the Annual Meeting to elect three persons
to the Company's Board of Directors to serve until the 2001 Annual Meeting of
Shareholders or until their successors are duly elected and qualified.

The Board of Directors has fixed the close of business on April 6, 1998, as
the record date (the "Record Date") for the determination of the shareholders
entitled to notice of, and to vote at, the Annual Meeting. On the Record Date,
the Company had issued and outstanding and entitled to vote 28,802,771 shares of
its common stock, $2.00 par value (the "Common Stock") and 1,898,070 shares of
its 6 3/4% PRIDES(SM), Convertible Preferred Stock, $2.00 par value (the
"PRIDES"). The Common Stock and the PRIDES are the only outstanding classes of
voting securities of the Company. Each outstanding share of Common Stock will be
entitled to one vote, and each outstanding share of PRIDES will be entitled to
4/5 of a vote, on each matter considered at the Annual Meeting. There is no
cumulative voting. Any shareholder giving a Proxy has the power to revoke it at
any time before it is exercised by providing written notice of revocation to the
Secretary of the Company or by filing a Proxy of a later date with the Secretary
of the Company. The holders of a majority of the total voting power of the
outstanding shares of Common Stock and PRIDES as of the Record Date, whether
present in person or represented by proxy, will constitute a quorum for the
transaction of business at the Annual Meeting. The shares held by each
shareholder who signs and returns the enclosed form of Proxy will be counted for
purposes of determining the presence of a quorum at the Annual Meeting, whether
or not the shareholder abstains on all or any matter to be acted on at the
Annual Meeting. Abstentions are counted toward the calculation of a quorum.
Broker non-votes (which result when a broker holding shares for a beneficial
owner has not yet received voting instructions on certain matters from such
beneficial owner) will also be counted toward fulfillment of quorum
requirements.

The enclosed form of Proxy provides a means for a shareholder to vote for
all the nominees for director listed thereon or to withhold authority to vote
for one or more of such nominees. The form of Proxy also provides a means for a
shareholder to vote for, against or abstain from voting on each of the other
matters to be acted upon at the Annual Meeting. Each Proxy will be voted in
accordance with the shareholder's directions.

The Company's by-laws, as amended, provide that directors are elected by a
plurality of the votes cast. Accordingly, the withholding of authority by a
shareholder (including broker non-votes) will not be counted in computing a
plurality and thus will have no effect on the results of the election of such
nominees. Approval of any other matters as may properly come before the meeting
will require the affirmative vote of a majority of the total voting power of the
Common Stock and the PRIDES (voting together as a single class) present in
person or represented by proxy and entitled to vote at the Annual Meeting unless
otherwise provided by law or the Company's restated articles of incorporation or
by-laws, as amended.

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

(SM) Servicemark of Merrill Lynch & Co., Inc.
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The cost of preparing, assembling, printing and mailing this Proxy
Statement, the form of Proxy, and the Notice of 1998 Annual Meeting of
Shareholders will be paid by the Company. In addition to solicitation by use of
the mails, solicitation of Proxies may also be made personally by certain
directors, officers and employees of the Company, and no additional compensation
will be paid to such individuals. In addition, the Company has retained Morrow &
Co., New York, N.Y., to aid in the solicitation of Proxies for a fee of $7,500
plus disbursements and incremental charges. The Company will also supply brokers
or persons holding stock in their names or in the names of their nominees with
such number of Proxies, proxy material and annual reports as they may require
for mailing to beneficial owners, and will reimburse them for their reasonable
expenses incurred in connection therewith.

The Company's principal executive offices are located at 4041 Essen Lane,
Baton Rouge, Louisiana, 70809, telephone: (504) 987-0000.

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SECURITY HOLDINGS OF MANAGEMENT AND OTHERS

The following table sets forth the amount and percent of shares of Common
Stock and the amount and percent of shares of PRIDES which, as of March 2, 1998,
are deemed under the rules of the Securities and Exchange Commission (the "SEC")
to be "beneficially owned" by each director and nominee for director of the
Company, by each executive officer of the Company, by all directors, nominees
and executive officers of the Company as a group, and by any person or "group"
(as that term is used in the Securities Exchange Act of 1934, as amended, the
"Exchange Act") known to the Company as of that date to be a "beneficial owner"
of more than 5% of the outstanding shares of Common Stock or PRIDES:

AMOUNT AND
NATURE OF
BENEFICIAL PERCENTAGE
DIRECTORS, NOMINEES AND EXECUTIVE OFFICERS TITLE OF CLASS OWNERSHIP(1)(2) OF CLASS(3)
- ------------------------------------------ -------------- --------------- -----------

James J. Bailey, III(4)........................ Common Stock 176,360 --
PRIDES 3,000 --
General Robert H. Barrow (retired)(5).......... Common Stock 58,274 --
John W. Barton, Sr.(6)......................... Common Stock 13,900 --
J. Terrell Brown(7)............................ Common Stock 913,475 3.13%
Jon R. Burke(8)................................ Common Stock 79,000 --
PRIDES 2,000 --
Richard A. Campbell(9)......................... Common Stock 159,023 --
PRIDES 9,000 --
Harris J. Chustz, Jr.(10)...................... Common Stock 129,606 --
John D. Dienes(11)............................. Common Stock 110,728 --
C. Geron Hargon................................ Common Stock 37,712 --
Roy G. Kadair, M.D.(12)........................ Common Stock 24,300 --
O. Miles Pollard, Jr.(13)...................... Common Stock 69,900 --
Dale E. Redman(14)............................. Common Stock 222,589 --
William H. Wright, Jr. (15).................... Common Stock 328,262 1.14%
All directors, nominees and executive officers Common Stock 2,323,129 7.88%
as a group (13 persons)...................... PRIDES 14,000 --
OTHER PERSONS
- -----------------------------------------------

United Companies Financial Corporation
Employee Stock Ownership Plan and Trust
515 South Flower Street, Suite 2700
Los Angeles, CA 90071-2291 (16).............. Common Stock 3,686,397 12.80%
NewSouth Capital Management, Inc.
1000 Ridgeway Loop Rd. -- Suite 233
Memphis, TN 38120 (17)....................... Common Stock 1,884,685 6.54%
Highbridge Capital Corporation
Highbridge Capital Management, Inc.
Dubin & Swieca Capital Management, Inc.
c/o Highbridge Capital Corporation
The Residence, Unit #2, South Church Street
Grand Cayman, Cayman Islands
British West Indies (18)..................... PRIDES 306,550 16.15%
The Capital Group Companies, Inc.
Capital Research and Management Company
The Income Fund of America, Inc.
c/o The Capital Group Companies, Inc.
833 South Hope Street
Los Angeles, CA 90071 (19)................... PRIDES 393,000 20.71%

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

(1) Under rules promulgated by the SEC, "beneficial ownership" includes having
or sharing with others the power to vote or direct the investment of
securities. Accordingly, a person having or sharing the power to vote or
direct the investment of securities is deemed to "beneficially own" the
securities even if such person has no right to receive any part of the
dividends on or the proceeds from the sale of these securities. Also,
because "beneficial ownership" extends to persons, such as co-trustees
under a trust, who share power to vote or control the disposition of the
securities, the very same securities may be deemed "beneficially owned" by
two or more persons shown in the table. Information with respect to
"beneficial ownership" shown in the table above is based upon information
supplied by the directors and executive officers of the Company and filings
made with the SEC or furnished to the Company by any shareholder.

(2) Includes pro rata shares, where applicable, that have been allocated to an
individual's account in the Company's Employee Stock Ownership Plan and
Trust (the "ESOP") and in the Company's Employees' Savings Plan (the
"401(k) Plan").

(3) Less than 1%, except as otherwise indicated.

(4) Includes 56,712 shares of which Mr. Bailey, as of March 2, 1998, may be
deemed to be beneficial owner as a result of rights that he may exercise to
acquire beneficial ownership within 60 days. Also includes shares held by
family members and/or controlled affiliates.

(5) Includes 56,712 shares of which General Barrow, as of March 2, 1998, may be
deemed to be beneficial owner as a result of rights that he may exercise to
acquire beneficial ownership within 60 days.

(6) Includes 8,000 shares of which Mr. Barton, as of March 2, 1998, may be
deemed to be beneficial owner as a result of rights that he may exercise to
acquire beneficial ownership within 60 days.

(7) Includes 263,824 shares of which Mr. Brown, as of March 2, 1998, may be
deemed to be beneficial owner as a result of rights that he may exercise to
acquire beneficial ownership within 60 days. Also includes shares held by
family members and/or controlled affiliates.

(8) Includes 8,000 shares of which Mr. Burke, as of March 2, 1998, may be
deemed to be beneficial owner as a result of rights that he may exercise to
acquire beneficial ownership within 60 days.

(9) For the holdings of Common Stock, includes 56,712 shares of which Mr.
Campbell, as of March 2, 1998, may be deemed to be beneficial owner as a
result of rights that he may exercise to acquire beneficial ownership
within 60 days.

(10) Includes 4,000 shares of which Mr. Chustz, as of March 2, 1998, may be
deemed to be beneficial owner as a result of rights that he may exercise to
acquire beneficial ownership within 60 days. Also includes shares held by
family members and/or controlled affiliates.

(11) Includes 54,998 shares of which Mr. Dienes, as of March 2, 1998, may be
deemed to be beneficial owner as a result of rights that he may exercise to
acquire beneficial ownership within 60 days.

(12) Includes 4,000 shares of which Dr. Kadair, as of March 2, 1998, may be
deemed to be beneficial owner as a result of rights that he may exercise to
acquire beneficial ownership within 60 days. Also includes shares held by
family members and/or controlled affiliates.

(13) Includes 30,400 shares of which Mr. Pollard, as of March 2, 1998, may be
deemed to be beneficial owner as a result of rights that he may exercise to
acquire beneficial ownership within 60 days.

(14) Includes 127,488 shares of which Mr. Redman, as of March 2, 1998, may be
deemed to be beneficial owner as a result of rights that he may exercise to
acquire beneficial ownership within 60 days.

(15) Includes 12,800 shares of which Mr. Wright, as of March 2, 1998, may be
deemed to be beneficial owner as a result of rights that he may exercise to
acquire beneficial ownership within 60 days. Also includes shares held by
family members and/or controlled affiliates.

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(16) Held by U.S. Trust Company of California as trustee. An ESOP participant
exercises voting rights over shares of Common Stock allocated to the
participant's account, whether or not vested. Voting rights for any
unallocated shares of Common Stock held by the ESOP are voted by the
trustee in proportion to the voting of allocated shares by the ESOP
participants. At March 2, 1998, there were approximately 813,000
unallocated shares held by the ESOP. The Plan Administrator, a committee
composed of four officers and directors of the Company, may, in certain
circumstances, direct the trustee to purchase, sell, resell or otherwise
dispose of shares of Common Stock.

(17) This information is based solely upon a photocopy of a Schedule 13G
(Amendment No. 1) for the year ended December 31, 1997, provided to the
Company by such beneficial owner.

(18) This information is based solely upon a photocopy of a Schedule 13G for the
year ended December 31, 1995, provided to the Company by such beneficial
owner.

(19) This information is based solely upon a photocopy of Schedule 13G for the
year ended December 31, 1997, provided to the Company by such beneficial
owner.

ELECTION OF DIRECTORS

The Company's Board of Directors is divided into three classes, currently
consisting of four directors each, whose terms expire in successive years. The
Board of Directors has nominated James J. Bailey, III, J. Terrell Brown and
Richard A. Campbell to the class of directors to hold office for a term of three
years expiring with the 2001 Annual Meeting of Shareholders or until their
respective successors are duly elected and qualified. Messrs. Bailey, Brown and
Campbell are presently serving as directors in the class whose terms expire at
the 1998 Annual Meeting of Shareholders. John W. Barton, Sr. is also presently
serving as a director in such class having been elected to fill the unexpired
term of Robert D. Kilpatrick, whose untimely death in January 1997, created a
vacancy in the Board. Mr. Barton's term of office will therefore expire
concurrently with the 1998 Annual Meeting. The Board of Directors decided not to
nominate someone for the fourth seat in such class, and in accordance with
Section 4.1 of the Company's by-laws, as amended, has reduced the class from
four members to three and concomitantly reduced the total number of directors
from twelve to eleven. The terms of office of the other eight directors of the
Company continue after the Annual Meeting as set forth below. The enclosed form
of Proxy confers discretionary authority with respect to the election of
directors, but no authority under the Proxy will be exercised to vote for the
election of any person as a director, other than the persons named in this Proxy
Statement who have been nominated by the present Board of Directors, unless, for
some reason not presently known, one or more of such nominees should become
unavailable. In such event, it is intended that the Proxy would be voted for a
substitute nominee or nominees who would be designated by the Board of Directors
prior to the 1998 Annual Meeting. In order to be elected a director, a nominee
must receive a plurality of the votes cast by the holders of the Common Stock
and the PRIDES. The name and age, principal occupation or employment, and other
data regarding each nominee and those directors whose terms continue after the
1998 Annual Meeting, based on information received from the respective nominees
and directors are set forth below:

NOMINEES TO SERVE UNTIL THE 2001 ANNUAL MEETING

JAMES J. BAILEY, III

Mr. Bailey, age 56, has served as a director of the Company since 1987. Mr.
Bailey is managing partner of Bailey Family Investments and Chairman of St. Mary
Bank and Trust, Franklin, Louisiana and he is a member of the board of directors
of First Commerce Corporation and City National Bank of Baton Rouge.

J. TERRELL BROWN

Mr. Brown, age 58, is Chairman of the Board of Directors and Chief
Executive Officer of the Company and Chief Executive Officer of each of the
subsidiaries of the Company. He has served as a director and executive officer
since 1972 and was named Chief Executive Officer in 1985. Mr. Brown is also a
director of Hibernia Corporation and Sizeler Property Investors, Inc.

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RICHARD A. CAMPBELL

Mr. Campbell, age 66, has served as a director of the Company since 1987.
For the past five years, Mr. Campbell has been an independent oil and gas
exploration geologist in Lafayette, Louisiana, and has co-invested with Camex
Operating Company and/or Camex, Inc. in oil and gas exploration activities.

THE BOARD OF DIRECTORS RECOMMENDS A VOTE FOR EACH OF THE ABOVE NOMINEES FOR
DIRECTOR.

DIRECTORS WHOSE TERMS CONTINUE AFTER THE ANNUAL MEETING

Directors whose terms continue until the 2000 Annual Meeting

HARRIS J. CHUSTZ, JR.

Mr. Chustz, age 47, has served as a director of the Company since 1995.
Prior to his retirement in 1996, he served as the Manager of Finance and
Accounting with Florida Keys Electric Cooperative since 1976. Mr. Chustz now
engages in private investments. He is the son of the Company's former Chairman
of the Board, Harris J. Chustz.

ROY G. KADAIR, M.D.

Dr. Kadair, age 52, is a practicing physician (Internal Medicine) and has
been associated with the Baton Rouge Clinic for over 20 years. He was elected as
a director of the Company in 1995. He is a director and member of the executive
committee of General Health System and serves on the board of directors of Baton
Rouge General Hospital and Gulf South Health Plans.

DALE E. REDMAN

Mr. Redman, age 50, is Executive Vice President, Chief Financial Officer
and Assistant Secretary of the Company and Vice Chairman of each of the
subsidiaries of the Company. Prior to his appointment as Chief Financial Officer
and Executive Vice President in 1988, Mr. Redman served as Secretary and
Treasurer of the Company. He has served as a director since 1983. Mr. Redman is
also a director of Picadilly Cafeterias, Inc.

WILLIAM H. WRIGHT, JR.

Mr. Wright, age 71, has served as a director of the Company since 1972. He
serves as Chairman of the Board of Wright Insurance Agency, Inc. and is a
director of City National Bank of Baton Rouge.

Directors whose terms continue until the 1999 Annual Meeting

ROBERT H. BARROW, GENERAL (RETIRED)

General Barrow, age 76, has served as a director of the Company since 1983.
He retired as Commandant of the United States Marine Corps in July 1983.

JON R. BURKE

Mr. Burke, age 50, has served as a director of the Company since April,
1997, when he was elected by the Board of Directors to fill a directorship
created by an increase in the authorized number of directors. He is presently
the managing member of Capital Appreciation Management Company, L.L.C., which is
the managing general partner of an Atlanta-based merchant banking fund
specializing in acquiring controlling interests in companies located in the
Southeastern United States. Mr. Burke is also a principal with Brown, Burke
Capital Partners, Inc., which provides financial advisory services to middle
market corporations in connection with mergers and acquisitions as well as
financings. From 1973-1996, Mr. Burke was employed by The Robinson-Humphrey
Company, Inc. ("R-H") and most recently served as a Senior Vice President.
Beginning in 1993, R-H provided certain investment banking services to the
Company, including acting, in June 1993, as placement agent for an offering by
the Company of 800,000 shares of convertible preferred stock

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under Regulation S promulgated by the SEC under the Exchange Act. Mr. Burke is
also a member of the board of directors of The Intercept Group, Inc.

JOHN D. DIENES

Mr. Dienes, age 56, serves as President and Chief Operating Officer of the
Company and is an executive officer of each subsidiary of the Company. He was
first elected as a member of the Company's Board of Directors in 1995. Mr.
Dienes joined the Company in February 1994. He has over 30 years of experience
in the financial services industry, and prior to his employment with the
Company, he served as Executive Vice President of NationsBank Corporation,
Dallas, Texas ("NationsBank"). Mr. Dienes began his career in 1964 with Republic
National Bank of Dallas. He participated in the 1988 merger of Republic and
InterFirst National Bank and became a Managing Director of the successor
corporation, FirstRepublic Bank. In 1989, FirstRepublic was acquired by NCNB
Corp., which became NationsBank.

O. MILES POLLARD, JR.

Mr. Pollard, age 60, has served as a director of the Company since 1990. He
is engaged in private investments and serves as President of Cadogan Properties,
Inc. and Secretary of Randall Management Services, Inc. He is a director of
First Commerce Corporation and City National Bank of Baton Rouge.

BOARD MEETINGS, COMMITTEES AND COMPENSATION

During the year ended December 31, 1997, six meetings of the Board of
Directors were held. Each incumbent director who is either a nominee for
reelection or whose term continues through the 1998 Annual Meeting attended at
least 75% of the aggregate of the meetings of the Board of Directors and
committees of the Board held during the period for which he was a director or a
member of a particular committee. The following directors presently serve on the
Audit Committee: James J. Bailey, III, General Robert H. Barrow, Jon R. Burke,
Roy G. Kadair, M.D., and William H. Wright, Jr. The Audit Committee met six
times in 1997. The primary functions of the Audit Committee are as follows: to
review the scope and timing of the audit and non-audit services to be rendered
by the Company's independent accountants; to approve the audit plans of the
independent accountants and internal auditors and to review their reports upon
completion of their audits; to review the appropriateness of the Company's
accounting policies, the adequacy of its financial controls and the reliability
of the financial information reported to the public; and to report to the Board
of Directors on its activities. The following directors presently serve on the
Compensation Committee: John W. Barton, Sr., Richard A. Campbell, Harris J.
Chustz, Jr. and O. Miles Pollard, Jr. The Compensation Committee met three times
in 1997. The primary functions of the Compensation Committee are as follows: to
review and approve, subject to ratification by the Board of Directors, the Chief
Executive Officer's compensation; to consult with the Chief Executive Officer
and approve compensation for members of senior management; to administer the
Company's stock incentive plans for employees, including approval of all awards
thereunder; to approve an annual aggregate amount that may be used for the
Company's Management Incentive Plan and to administer such plan; and to report
to the Board of Directors on its activities. The following directors presently
serve on the Nominating Committee: James J. Bailey, III, Jon R. Burke, Harris J.
Chustz, Jr. and William H. Wright, Jr. The primary functions of the Nominating
Committee are to review the qualifications of candidates for the Company's Board
of Directors suggested by Board members, management, shareholders and others, to
consider the performance of incumbent directors in determining whether to
nominate them for reelection and to recommend to the Board a slate of nominees
for election as directors. A shareholder who wishes to recommend an individual
for board membership may do so by writing to: Secretary, United Companies
Financial Corporation, 4041 Essen Lane, Baton Rouge, Louisiana 70809. In order
for a shareholder to bring any director nominations before the 1998 Annual
Meeting, certain conditions (including timely notice to the Company) set forth
in the Company's by-laws, as amended, must be complied with. See "Shareholder
Proposals" below.

Directors who are full-time employees of the Company receive no additional
compensation for services as a director. Each non-employee director received
$1,000 per Board meeting and $500 per Committee meeting

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attended during 1997. Each Committee Chairman received an annual retainer of
$1,000. Each director who is not an employee of the Company also received during
1997 an annual retainer of $4,800, paid in quarterly increments.

Each member of the Board of Directors who is not an employee of the Company
is entitled to participate in the Company's 1996 Non-Employee Director Stock
Plan (the "1996 Director Plan"). The 1996 Director Plan provides for the
automatic grant of stock options to purchase 4,000 shares of the Company's
Common Stock and the award of 1,000 shares of restricted stock to each
non-employee director each year at the annual meeting of shareholders. The
options and restricted stock awarded under the 1996 Director Plan vest six
months following the date of award. The Company also has two other option plans
for non-employee directors, the 1993 Non-Employee Director Stock Option Plan
(the "1993 Director Plan") and the 1989 Non-Employee Director Stock Option Plan
(the "1989 Director Plan"). Awards under the 1993 and 1989 Director Plans are no
longer being made. The exercise prices of options awarded under the 1996, 1993
and 1989 Director Plans are based upon 100% of the fair market value of the
Common Stock on the date of the grants. As of March 2, 1998 options to purchase
394,848 shares of Common Stock at an average exercise price of $13.82 per share
were outstanding under the Company's 1996, 1993 and 1989 Director Plans.

The Company has executed change of control contracts with certain of its
officer-directors as described below under "Employment Agreements and Change of
Control Arrangements".

EXECUTIVE OFFICERS

In addition to the individuals nominated for director above who are also
executive officers of the Company, the following individual presently serves as
an executive officer of the Company:

C. GERON HARGON

Mr. Hargon, age 52, serves as Executive Vice President of the Company and
President of United Companies Lending Group, Inc., United Companies Lending
Corporation ("UC Lending"), and several other wholly-owned subsidiaries of the
Company. Mr. Hargon joined the Company on September 1, 1995. Mr. Hargon has over
25 years experience in the financial services industry, and prior to joining the
Company, served as Chairman of Hibernia National Bank's South Central Region.

During his 19 years with Hibernia, Mr. Hargon served as Chief Operating
Officer and also managed its Baton Rouge and Texas commercial banking
operations. Mr. Hargon is a director of General Health System.

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EXECUTIVE COMPENSATION

SUMMARY OF EXECUTIVE COMPENSATION

The following table sets forth certain information on the annual and
long-term compensation for the Chief Executive Officer and each of the three
most highly compensated executive officers of the Company (collectively, the
Chief Executive Officer and such other executive officers shall be referred to
herein as the "Named Executive Officers") for the years ended December 31, 1997,
1996 and 1995.

SUMMARY COMPENSATION TABLE

LONG TERM
COMPENSATION
-----------------------
AWARDS
ANNUAL COMPENSATION -----------------------
----------------------------------- RESTRICTED SECURITIES
OTHER ANNUAL STOCK UNDERLYING ALL OTHER
BONUS COMPENSATION AWARDS OPTIONS COMPENSATION
NAME AND PRINCIPAL POSITION YEAR SALARY($) ($)(1) ($)(2) ($)(3) (4)/(#) ($)(5)
- --------------------------- ---- --------- -------- ------------ ---------- ---------- ------------

J. Terrell Brown.......... 1997 $434,109 $885,198 -- $690,000 70,000 $38,296
Chairman and Chief 1996 413,438 489,966 -- 489,953 -- 36,471
Executive Officer 1995 393,750 833,616 -- 304,000 50,000 39,308
John D. Dienes............ 1997 $296,180 $509,013 -- $345,000 35,000 $21,757
President and Chief 1996 280,792 364,538 -- 196,280 -- 17,535
Operating Officer 1995 266,250 475,699 -- 208,000 24,000 20,505
C. Geron Hargon........... 1997 $218,548 $385,403 -- $345,000 30,000 $21,147
Executive Vice President 1996 203,838 210,314 -- 210,311 -- 2,625
and President, UC 1995 66,668 359,025 -- 437,500 30,000 --
Lending
Dale E. Redman............ 1997 $277,144 $483,666 -- $345,000 32,500 $20,857
Executive Vice 1996 265,013 266,457 -- 266,436 -- 18,848
President and Chief 1995 246,095 445,298 -- 208,800 24,000 19,592
Financial Officer

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

(1) Amounts awarded under the Company's Management Incentive Plan, even if
deferred. Included in the amounts awarded to J. Terrell Brown in 1997, 1996
and 1995 were $16,050, $16,379 and $16,562, respectively, which were
deferred pursuant to an unfunded salary deferral agreement entered into
between the Company and Mr. Brown in 1989. The aggregate deferred amount
payable by the Company to Mr. Brown at March 2, 1998 was $168,452.

(2) No personal benefits, which are non-cash compensation, are disclosed in the
"Other Annual Compensation" column since they did not exceed the lesser of
either $50,000 or 10% of the total annual salary and bonus for any of the
Named Executive Officers.

(3) Reflects the value of the shares of restricted stock based upon the closing
price of the Company's Common Stock on the date of award. The awards of
shares of restricted stock that are reflected in the table for 1997 will
vest immediately if, during the three-year period following award, the
closing price for the Company's Common Stock reaches $60.00 per share. The
closing price of a share of Common Stock reported on March 2, 1998, was
$16.00. The awards in 1997 were for the following number of shares of Common
Stock: Mr. Brown, 20,000 shares; Mr. Dienes, 10,000 shares; Mr. Hargon,
10,000 shares and Mr. Redman, 10,000 shares. The shares of the restricted
stock awarded in 1996 and 1995 have fully vested, except the award to Mr.
Hargon in 1995, which, as of December 31, 1997, was 50% vested, and with the
remaining two 25% increments to vest in 1998 and 1999, respectively. The
number of unvested shares of restricted stock and the fair market value of
such shares as of December 31, 1997 held by Messrs. Brown, Dienes, Hargon,
and Redman at December 31, 1997, were as follows: Mr. Brown, 20,000 shares
($310,000); Mr. Dienes, 10,000 shares ($155,000); Mr. Hargon, 17,000 shares

9
12

($263,500); and Mr. Redman, 10,000 shares ($155,000). Dividends have been
and will continue to be paid on unvested shares of restricted stock.

(4) Represents options granted under the Company's stock option plans for
employees after giving effect to stock dividends. All options have been
granted at an exercise price equal to 100% of the fair market value of the
Common Stock on the date of the grant. For additional information regarding
options granted during the last fiscal year, see "Option Grants in Last
Year," and for information regarding current holdings of options, see
"Options Exercised and Year-End Values of Unexercised Options." The non-
qualified option to purchase shares of Common Stock awarded to Mr. Brown in
1995 was amended after award to allow Mr. Brown to transfer such option to
his immediate family members, including trusts for the benefit of such
family members and partnerships in which such family members are the only
partners. Mr. Brown transferred such option to a family limited partnership
in 1996.

(5) Amounts reported include, among other things, amounts contributed or accrued
for 1997, 1996 and 1995 for the named officers under the Company's Employee
Stock Ownership Plan ("ESOP") and Employees' Savings Plan. Amounts for Mr.
Brown for 1997, 1996 and 1995 also include $16,379, $16,562, and $16,729,
respectively, in loans to Mr. Brown for payment of a portion of the premiums
on a life insurance policy. The loans were made without interest and are
secured by an assignment of the policy. See "Transactions with Management
and Others."

OPTIONS GRANTED IN LAST YEAR

The following table sets forth information regarding the options granted
during the year ended December 31, 1997, to the Named Executive Officers.

OPTION GRANTS IN LAST YEAR
INDIVIDUAL GRANTS

POTENTIAL REALIZABLE
VALUE AT ASSUMED
NUMBER OF % OF TOTAL ANNUAL RATES
SECURITIES OPTIONS OF STOCK PRICE
UNDERLYING GRANTED TO APPRECIATION FOR
OPTIONS EMPLOYEES EXERCISE OPTION TERM
GRANTED IN LAST PRICE EXPIRATION ----------------------
NAME (#)(1)(2) YEAR ($/SH)(1) DATE 5% ($) 10% ($)
---- ---------- ---------- --------- ---------- -------- ----------

J. Terrell Brown............. 50,000 5.72% $27.38 02-04-2007 $860,800 $2,181,435
20,000 2.29% 23.94 11-11-2007 301,083 763,004
John D. Dienes............... 25,000 2.86% 27.38 02-04-2007 430,400 1,090,718
10,000 1.14% 23.94 11-11-2007 150,542 381,502
C. Geron Hargon.............. 20,000 2.29% 27.38 02-04-2007 344,320 872,574
10,000 1.14% 23.94 11-11-2007 150,542 381,502
Dale E. Redman............... 22,500 2.57% 27.38 02-04-2007 387,360 981,646
10,000 1.14% 23.94 11-11-2007 150,542 381,502

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

(1) The options granted to the Named Executive Officers were awarded under the
Company's 1996 Long-Term Incentive Compensation Plan (the "1996 Plan"). The
options granted under the 1996 Plan are not exercisable, except in limited
circumstances, until three years have elapsed from the date such options are
granted. The exercise price of the options equals 100% of the fair market
value of a share of Common Stock on the date of grant, and has been rounded
to the nearest cent.

(2) The 1996 Plan allows the Compensation Committee to provide, originally or by
way of later amendment, that an option awarded thereunder may be transferred
by the participant to his or her immediate family members. None of the
options reflected in the above table contained such transferability feature
as originally awarded, and through the date hereof, none of such options
have been amended to add the transferability provision.

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13

OPTIONS EXERCISED AND YEAR-END VALUES OF UNEXERCISED OPTIONS

The following table sets forth information, as of December 31, 1997,
regarding the number of shares received and the value realized upon exercise of
stock options, as well as the number and value of exercisable and unexercisable
options to purchase Common Stock of the Company held by any of the Named
Executive Officers.

AGGREGATE OPTION EXERCISES IN LAST YEAR AND YEAR-END 1997 OPTION VALUES

VALUE OF UNEXERCISED
NUMBER OF UNEXERCISED IN-THE-MONEY OPTIONS AT
OPTIONS AT YEAR-END
SHARES YEAR-END 1997(#) 1997($)(1)(2)(3)
ACQUIRED ON VALUE --------------------------- ---------------------------
NAME EXERCISE(#) REALIZED($) EXERCISABLE UNEXERCISABLE EXERCISABLE UNEXERCISABLE
- ---- ----------- ----------- ----------- ------------- ----------- -------------

J. Terrell Brown................. -- -- 263,824 120,000 $2,860,703 --
John D. Dienes................... -- -- 54,998 59,000 -- --
C. Geron Hargon.................. -- -- -- 60,000 -- --
Dale E. Redman................... -- -- 127,488 56,500 $1,402,467 --

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

(1) All options were awarded at the fair market value of the shares of Common
Stock on the date of the grant.

(2) Values in each column are based on the closing price, as reported on the New
York Stock Exchange, of the Company's Common Stock on December 31, 1997
($15.50).

(3) The exercise prices of the reported options range from $2.77 to $31.25 per
share (as adjusted for stock dividends) with a weighted average exercise
price of $13.96 per share.

COMPENSATION COMMITTEE INTERLOCKS AND INSIDER PARTICIPATION

The members of the Compensation Committee of the Board of Directors during
1997 were John W. Barton, Sr., Richard A. Campbell, Harris J. Chustz, Jr. and O.
Miles Pollard, Jr. No member of the Compensation Committee was an officer or
employee of the Company or any of its subsidiaries during 1997. No executive
officer of the Company served during 1997 as a director or as a member of the
compensation committee of another entity, one of whose executive officers served
as a director or on the Compensation Committee of the Company.

The following Compensation Committee Report on Executive Compensation and
Stock Performance Graph shall not be deemed incorporated by reference by any
general statement incorporating this Proxy Statement into any filing by the
Company under the Securities Act of 1933, as amended, or under the Securities
Exchange Act of 1934, as amended, except to the extent the Company specifically
incorporates this information by reference, and the following information shall
not otherwise be deemed filed under either of such acts.

COMPENSATION COMMITTEE REPORT ON EXECUTIVE COMPENSATION

The Company's compensation programs for executives and key employees are
administered by the Compensation Committee (the "Committee") of the Company's
Board of Directors. The Committee, during 1997 and at present, is comprised of
the following members, each of whom are outside, independent directors of the
Company and each of whom qualify as "Non-Employee Directors" under Rule
16b-3(b)(3)(i) of the Exchange Act: Richard A. Campbell, Chairman, John W.
Barton, Sr., Harris J. Chustz, Jr. and O. Miles Pollard, Jr. The Committee met
three times during 1997. No Committee member is eligible to participate in any
Company compensation program that it administers.

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14

In accordance with the rules and regulations of the Commission, the
Committee offers the following report on the Company's compensation policies for
its executive officers and key employees. The report made herein covers the
following items:

- Duties of the Committee and its compensation philosophy

- Components of the Company's compensation programs

- Compensation of the Chief Executive Officer

Each of the foregoing items will be discussed in order below.

COMMITTEE DUTIES AND PHILOSOPHY

Duties of the Committee include establishing the compensation program for
the Chief Executive Officer (the "CEO"), consulting with the CEO regarding and
ultimately approving the compensation for other executive officers,
administering the Company's Management Incentive Plan including the approval of
annual amounts to be distributed as bonuses thereunder, and administering the
Company's incentive stock plans for employees.

While the Committee's general philosophy on executive compensation is one
of attempting to link compensation to the value and level of performance of the
executive, in implementing this philosophy, the Committee focuses on the
following: (i) providing a competitive compensation program that enables the
Company to attract, retain and motivate a high-quality executive management team
focused on enhancing shareholder value; (ii) coordinating compensation programs
with the Company's annual and long-term objectives and strategies; and (iii)
providing compensation opportunities that are based on the performance of the
Company.

To the extent practicable and consistent with the foregoing compensation
philosophy, the Committee intends to comply with Section 162(m) of the Internal
Revenue Code of 1986, as amended, which limits the deduction allowable to the
Company for compensation paid to the Chief Executive Officer and each of the
four other most highly compensated executive officers to $1 million. Qualified
performance-based compensation is excluded from this limitation if certain
requirements are met. The Company's policy is generally to preserve the federal
income tax deductibility of compensation paid. Notwithstanding the Company's
policy to preserve the federal income tax deductibility of compensation
payments, to the extent that compliance with Section 162(m) conflicts with the
Committee's compensation policy, the Committee may authorize payments that may
cause an executive officer's income to exceed the deductible limits.

COMPONENTS OF THE COMPENSATION PROGRAM

Base Salary. The salary levels of the Company's executive officers and key
employees are reviewed by the Committee annually in consultation with the CEO.
In determining appropriate base-salary levels, the Committee considers such
factors as duties and responsibilities inherent in the position in question,
initiative, performance, tenure and pay practices for executives of other
companies in the financial services industry, geographic location of the
executive as well as business conditions generally prevailing in the mortgage
industry.

Cash Bonuses. Annual awards of cash bonuses are made to executives and key
employees pursuant to the Company's Management Incentive Plan (the "Bonus
Plan"). The cash bonuses are based upon the attainment by the Company of
financial objectives based on return on equity during the prior year. Bonuses
are not paid unless a specified threshold level of financial performance is
achieved by the Company, which is presently set at a minimum of a 10% return on
equity. As evidenced by the bonus column in the Summary Compensation Table set
forth elsewhere in this proxy statement, a significant portion of the
executives' cash compensation was at risk depending upon Company performance for
1997. Total cash bonuses paid to 237 individuals participating in the Bonus Plan
during 1997 was approximately $6.2 million, compared to cash bonuses of
approximately $4.0 million paid to 159 individuals participating in such plan
during 1996. The aggregate cash bonuses paid for 1997 increased significantly
over the 1996 bonuses because only a portion of
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15

the bonus (50% for each of Messrs. Brown, Hargon and Redman and 65% for Mr.
Dienes) otherwise payable to such persons for year end 1996 was paid in cash.
Rather, the bonus not paid in cash was paid in shares of restricted stock under
the 1996 Plan (as defined below).

Equity-Based Incentives. The Company has a 1996 Long-Term Incentive
Compensation Plan (the "1996 Plan"), the purpose of which is to provide the
Company's key employees with long-term incentive to promote the financial
success of the Company through the award of stock options and shares of
restricted stock. The Company also has a 1993 Stock Incentive Plan (the "1993
Plan") which also provides for the award of stock options and shares of
restricted stock. At December 31, 1997, however, only 169,722 shares were
available for award under the 1993 Plan.

The 1996 Plan provides broad discretion to the Committee with respect to
the terms and conditions that may be included in awards of stock options or
restricted stock made thereunder. The Committee believes that such discretion
allows it to tailor awards under the 1996 Plan to the specific facts and
circumstances of a particular award. Notwithstanding such broad discretion, the
Committee has continued to award stock options with three year vesting periods
(the 1993 Plan required a three year period) to induce continued service by the
employee with the Company and to align the interests of the employee with the
long-term interests of the Company's shareholders. Further, during 1997, the
Committee recommended and the Board of Directors approved the award of an
aggregate of 128,900 shares of restricted stock, the vesting of which is subject
to the attainment during the three years following award of a market price of
$60.00 per share for the Company's Common Stock. Of such shares, an aggregate of
50,000 were awarded to Messrs. Brown, Dienes, Hargon and Redman.

During 1997, options to purchase an aggregate 167,500 shares of the
Company's Common Stock were awarded to Messrs. Brown, Dienes, Hargon and Redman.
The options have a three year vesting period and exercise prices equal to the
fair market value of the Company's Common Stock on the date of award. As of
December 31, 1997, options to purchase an aggregate of approximately 2.0 million
shares of the Company's Common Stock were held by the Company's employees under
its stock option plans. Included in this amount as of December 31, 1997, were
options to purchase 741,810 shares of the Company's Common Stock at an average
exercise price of $13.96 per share held by Messrs. Brown, Dienes, Hargon and
Redman. Further, shares of restricted stock were also awarded to such persons in
1997, with an effective date of December 31, 1996, in lieu of a portion of the
cash bonus not paid under the Bonus Plan for year end 1996. Such awards of
restricted stock are equal in value, as of December 31, 1996, to the bonus
portion not paid. Such shares of restricted stock vested on September 16, 1997,
when the market price of the Company's Common Stock reached $32.00 per share.

COMPENSATION OF THE CHIEF EXECUTIVE OFFICER

In establishing the compensation for Mr. Brown, the Committee observes the
same guidelines as set forth for executive officers generally. No specific
weighting is assigned to these guidelines, or factors, in determining the CEO's
compensation. For 1997, the base salary of Mr. Brown was increased by the
guaranteed increase in base salary under his employment contract with the
Company, the term of which expired in 1997.

Richard A. Campbell, Chairman
John W. Barton, Sr.
Harris J. Chustz, Jr.
O. Miles Pollard, Jr.

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16

STOCK PERFORMANCE GRAPH

For the period commencing January 1, 1993 and ending December 31, 1997, the
following line graph provides a comparison of the total shareholder return on
the Company's Common Stock with the return of (i) the Standard & Poor's 500
Index and (ii) a Company-selected peer group of thirteen (13) other companies
engaged primarily in consumer lending, namely: Aames Financial Corporation,
Cityscape Financial Corporation, ContiFinancial Corporation, Delta Financial
Corporation, First Alliance Corporation, Green Tree Financial Corporation, IMC
Mortgage Company, Imperial Credit Industries, Inc., Litchfield Financial
Corporation, Mego Financial Corporation, The Money Store, Inc., North American
Mortgage Company and Southern Pacific Funding Corporation. All amounts have been
calculated as if all dividends were reinvested.

COMPARISON OF FIVE YEAR CUMULATIVE
TOTAL RETURN OF THE COMPANY, S&P 500 INDEX
AND COMPANY-SELECTED PEER GROUP

UNITED
COMPANIES
MEASUREMENT PERIOD FINANCIAL S&P 500
(FISCAL YEAR COVERED) CORPORATION INDEX PEER GROUP

1992 100.0 100.0 100.0
1993 449.1 109.8 172.9
1994 342.9 111.3 193.1
1995 672.4 153.1 377.7
1996 685.1 188.8 611.7
1997 404.5 252.0 417.1

EMPLOYMENT AGREEMENTS AND CHANGE OF CONTROL ARRANGEMENTS

The Company has historically had employment contracts with key management
employees, including Messrs. Brown and Redman. The terms of the contracts with
Messrs. Brown and Redman expired in 1997, however, and the contracts were not
renewed.

The Company has in effect supplemental retirement agreements (entitled
"deferred compensation agreements" for Messrs. Brown and Redman) with Messrs.
Brown, Dienes, Hargon and Redman pursuant to which, upon retirement at or after
age 55, (age 56 for Mr. Dienes) the employee will receive monthly payments for
10 years. The compensation amount increases based on the number of years of
service after age 55, with a cap at age 70. For Messrs. Brown and Redman, should
they elect to exercise their rights under such agreements at age 55, they will
receive $35,000 per annum for the 10-year period, and for Mr. Dienes at age 56
and Mr. Hargon at age 55, they will receive $10,700 and $22,500 per annum,
respectively, for the 10-year period. Should Messrs. Brown, Dienes, Hargon or
Redman wait until age 65 to exercise their rights under the agreements, they
will receive $200,000, $150,000, $120,000 and $135,000 per annum, respectively,
for the 10-year period. The Company has purchased life insurance on the lives of
Messrs. Brown, Dienes, Hargon and Redman to fund its obligations under these
supplemental retirement agreements. Under separate split dollar agreements, the
beneficiaries of Messrs. Brown, Dienes, Hargon and Redman will receive a death
benefit equal to the policy value, $1,365,000, $1,198,000, $1,103,000 and
$1,190,000, respectively, minus the lesser of the cash value of the policy or
premiums paid and any policy indebtedness to the insurer.

14
17

Under an additional unfunded salary deferral agreement entered into in
1989, a specified amount of compensation otherwise payable to Mr. Brown is
credited to an account to be paid to Mr. Brown or beneficiaries designated by
him on the earlier of Mr. Brown's death or termination of employment. During
1997 Mr. Brown's compensation, as reflected in the Bonus section of the Summary
Compensation Table, includes $16,050 which was deferred pursuant to this
agreement.

Although not the purpose of these employment, deferred compensation and
supplemental retirement agreements, a possible effect of such contracts may be
to discourage or deter a potential tender offer for the Company.

The Company has entered into change of control contracts with Messrs.
Brown, Dienes and Redman. The contracts provide, in general, that each executive
will be entitled to a lump sum payment of three years salary and bonus (Mr.
Dienes will also receive cash payments in the amount of $8,333.00 per month
until he reaches age 65) plus the continuation of certain benefits if the
executive is terminated without cause or his duties or responsibilities are
diminished within 24 months after a change of control of the Company. The
Company believes that these contracts are important in retaining qualified
management through a transition in ownership, if a change were to occur, by
providing such executives with a certain comfort level during such transition so
that they can focus on what is in the best interests of the shareholders rather
than on their position with the Company.

TRANSACTIONS WITH MANAGEMENT AND OTHERS

The Company and its subsidiaries have, from time to time, made loans to
certain of its executive officers and directors and/or to entities in which such
persons have a material interest. Each of these loans were secured by a first
mortgage on the residence, and/or commercial or other real estate. There were no
such loans outstanding during 1997 or through March 31, 1998.

Since 1989, the Company has made loans to Mr. Brown without interest,
secured by an assignment of a life insurance policy owned by Mr. Brown. The
loans were incurred to pay a portion of the premium on the assigned life
insurance policy. The Company has agreed to make annual loans of comparable
amounts for payment of a portion of these insurance premiums through the earlier
of the date of termination of Mr. Brown's employment or 2004. As of March 2,
1998, the aggregate principal owed by Mr. Brown on such loans was $168,452.

In the ordinary course of business, the Company and its subsidiaries have
purchased liability, worker's compensation, fidelity bond and various property
and other insurance coverages from the Wright Insurance Agency, Inc., of which
Mr. Wright is the majority owner. Premiums paid by the Company and its
subsidiaries for this insurance coverage were approximately $2.0 million for the
year ended December 31, 1997. The Company and its subsidiaries expect to
purchase additional insurance coverage in the future from the Wright Insurance
Agency, Inc. The Company believes that the premiums paid to the Wright Insurance
Agency, Inc. for the above-described coverage are comparable to those premiums
that would be charged by an unaffiliated third party for insurance of similar
coverage.

At December 31, 1997, the Company guaranteed loans to the ESOP made by a
financial institution with an aggregate principal balance outstanding of $10.5
million. The loans are to be repaid with interest at rates which range from 7.1%
to 8.4% per annum. The proceeds of the loans were used by the ESOP for purchases
of the Company's Common Stock. During 1997, the ESOP borrowed $3.4 million from
the Company to purchase shares of the Company's Common Stock. At December 31,
1997, the balance of Company loans to the ESOP was $3.2 million.

15
18

SECTION 16 BENEFICIAL OWNERSHIP REPORTING COMPLIANCE

Section 16(a) of the Exchange Act requires the Company's directors and
certain officers and persons who own more than ten percent of the Company's
Common Stock to file with the SEC reports of ownership and changes in ownership
of the Company's securities. Directors, certain officers and greater than ten
percent beneficial owners are required by applicable regulations to furnish the
Company with all Section 16(a) forms they file.

Based solely upon a review of the copies of the forms furnished to the
Company, or written representations from certain reporting persons that no Form
5 reports were required to be filed, the Company believes that during 1997 all
of its directors and pertinent officers complied with the applicable filing
requirements under Section 16(a).

AUDITOR SERVICES

The Company's consolidated financial statements for the year ended December
31, 1997, were audited by the firm of Deloitte & Touche LLP. Such firm has been
selected as the Company's auditors until replaced by the Board of Directors and
is not being submitted for approval or ratification by the shareholders. A
representative of such firm will be present at the 1998 Annual Meeting of
Shareholders to respond to any appropriate questions and will have the
opportunity to make a statement, if he or she so desires.

SHAREHOLDER PROPOSALS

Any shareholder's proposal to be considered by the Company for inclusion in
the proxy material for the 1999 Annual Meeting of Shareholders must be submitted
in accordance with applicable regulations of the SEC and received by the Company
at its principal executive offices no later than December 14, 1998.

In order for a shareholder to bring any business or director nominations
before the 1998 Annual Meeting, certain conditions set forth in Section 2.8 and
Subsection 4.9.2 of the by-laws of the Company, as amended, must be complied
with, including, but not limited to, the delivery of a notice to the Secretary
of the Company not less than 60 days in advance of the Annual Meeting, or if
fewer than 70 days notice or prior disclosure of the date of the Annual Meeting
is given or made to the shareholders, not later than the tenth day following the
day on which the notice of the date of the Annual Meeting was mailed or such
prior disclosure was made. The requirements as to the form and content of such
advance notice are set forth in Section 2.8 and Subsection 4.9.2 of the
Company's amended by-laws, a copy of which is available upon request from the
Company's Secretary, at (504) 987-0000.

OTHER MATTERS

The Board of Directors knows of no other matters which may be properly, or
are likely to be, brought before the 1998 Annual Meeting. However, if any proper
matters are brought before the meeting, the persons named in the enclosed Proxy
will vote thereon as the Board of Directors recommends.

BY ORDER OF THE BOARD OF DIRECTORS

SHERRY E. ANDERSON,
Secretary

Baton Rouge, Louisiana
April 10, 1998

16
19
UNITED COMPANIES FINANCIAL CORPORATION
THE SOLICITATION OF THIS PROXY IS MADE ON BEHALF OF THE BOARD OF DIRECTORS

The undersigned hereby appoints the trustee of United Companies
Financial Corporation Employee's Savings Plan (the "401(k) Plan"), with full
power of substitution, the attorney and proxy of the undersigned to attend the
Annual Meeting of Shareholders of UNITED COMPANIES FINANCIAL CORPORATION to be
held at Twelve United Plaza, Auditorium, First Floor, 8549 United Plaza
Boulevard, Baton Rouge, Louisiana, at 9:00 a.m. on May 12, 1998, or any
postponement or adjournment thereof, and to vote the stock allocated to the
account of the undersigned in the 401(k) Plan with all powers the undersigned
would possess if present upon the following matters and upon any other business
that may properly come before the meeting or any postponement or adjournment
thereof.

This proxy when properly executed will be voted as specified herein. If
no specification is made, it is the intention of the proxies to vote FOR
proposals 1 and 2.

INSTRUCTIONS: This proxy, signed and dated, must be returned for your
shares to be represented at the Annual Meeting. To vote, please mark the
appropriate box for each proposal in blue or black ink, date and sign this proxy
exactly as your name appear(s) hereon. If stock is held jointly, signature
should include both names. Executors, administrators, trustees, guardians and
others signing in a representative capacity should give their full title. The
shares represented by this proxy will be voted as specified by the undersigned.
If no choice is specified, the proxy will be voted FOR proposals 1 and 2. PLEASE
return promptly in the enclosed postage paid envelope.

SEE REVERSE SIDE

Please mark
your votes as [X]
indicated in
this example

THE BOARD OF DIRECTORS RECOMMENDS FOR WITHHOLD
A VOTE FOR PROPOSALS 1 AND 2. all nominees listed AUTHORITY
1. Election of three directors to below, except as to vote for all
serve until the 2001 Annual otherwise indicated nominees listed below
Meeting of Shareholders [ ] [ ]

The nominees are:
James J. Bailey, III, J. Terrell
Brown and Richard A. Campbell

INSTRUCTIONS: If you wish to withhold
authority selectively to vote for any
individual nominee, strike a line
through the nominee's name above.

FOR AGAINST ABSTAIN
2. In Their Discretion, the [ ] [ ] [ ]
Proxies are Authorized to
Vote Upon Such Other
Business as May
Properly Come Before To vote for all items AS
the Meeting. RECOMMENDED BY THE BOARD OF
[ ] DIRECTORS, mark this box, sign,
date and return this proxy. (NO
ADDITIONAL VOTE IS NECESSARY JUST
SIGN, DATE AND RETURN.)

Signature(s)_____________ Dated____, 1998

-----------------------------------------
Title

NOTE: Please sign this proxy as name(s) appear hereon and return it promptly in
the envelope provided, whether or not you plan to attend the meeting.

UNITED COMPANIES FINANCIAL CORPORATION
THE SOLICITATION OF THIS PROXY IS MADE ON BEHALF OF THE BOARD OF DIRECTORS

The undersigned hereby appoints the trustee of United Companies
Financial Corporation Employee Stock Ownership Plan and Trust (the "ESOP"), with
full power of substitution, the attorney and proxy of the undersigned to attend
the Annual Meeting of Shareholders of UNITED COMPANIES FINANCIAL CORPORATION to
be held at Twelve United Plaza, Auditorium, First Floor, 8549 United Plaza
Boulevard, Baton Rouge, Louisiana, at 9:00 a.m. on May 12, 1998, or any
postponement or adjournment thereof, and to vote the stock allocated to the
account of the undersigned in the ESOP with all powers the undersigned would
possess if present upon the following matters and upon any other business that
may properly come before the meeting or any postponement or adjournment thereof.

This proxy when properly executed will be voted as specified herein. If
no specification is made, it is the intention of the proxies to vote FOR
proposals 1 and 2.

SEE REVERSE SIDE

Please mark
your votes as [X]
indicated in
this example

The nominees are:
James J. Bailey, III, J. Terrell
Brown and Richard A. Campbell

INSTRUCTIONS: If you wish to withhold
authority selectively to vote for any
individual nominee, strike a line
through the nominee's name above.

Signature(s)_____________ Dated____, 1998

-----------------------------------------
Title

NOTE: Please sign this proxy as name(s) appear hereon and return it promptly in
the envelope provided, whether or not you plan to attend the meeting.

UNITED COMPANIES FINANCIAL CORPORATION
THE SOLICITATION OF THIS PROXY IS MADE ON BEHALF OF THE BOARD OF DIRECTORS

The undersigned hereby appoints J. TERRELL BROWN and DALE E. REDMAN,
and each of them with full power of substitution, the attorney and proxy of the
undersigned to attend the Annual Meeting of Shareholders of UNITED COMPANIES
FINANCIAL CORPORATION to be held at Twelve United Plaza, Auditorium, First
Floor, 8549 United Plaza Boulevard, Baton Rouge, Louisiana, at 9:00 a.m. on May
12, 1998, or any postponement or adjournment thereof, and to vote the stock of
the undersigned with all powers the undersigned would possess if present upon
the following matters and upon any other business that may properly come before
the meeting or any postponement or adjournment thereof.

This proxy when properly executed will be voted as specified herein. If
no specification is made, it is the intention of the proxies to vote FOR
proposals 1 and 2.

INSTRUCTIONS: This proxy, signed and dated, must be returned for your
shares to be represented at the Annual Meeting. To vote, please mark the
appropriate box for each proposal in blue or black ink, date and sign this proxy
exactly as your name appear(s) hereon. If stock is held jointly, signature
should include both names. Executors, administrators, trustees, guardians and
others signing in a representative capacity should give their full title. The
shares represented by this proxy will be voted as specified by the
shareholder(s). If no choice is specified, the proxy will be voted FOR proposals
1 and 2. PLEASE return promptly in the enclosed postage paid envelope.

SEE REVERSE SIDE

Please mark
your votes as [X]
indicated in
this example

The nominees are:
James J. Bailey, III, J. Terrell
Brown and Richard A. Campbell

INSTRUCTIONS: If you wish to withhold
authority selectively to vote for any
individual nominee, strike a line
through the nominee's name above.

Signature(s)_____________ Dated____, 1998

-----------------------------------------
Title

NOTE: Please sign this proxy as name(s) appear hereon and return it promptly in
the envelope provided, whether or not you plan to attend the meeting.