As Filed with the Securities and Exchange Commission on May 9, 1994
REGISTRATION NO. 33-51901
SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
_____________________________
AMENDMENT NO. 2
TO
FORM S-4
REGISTRATION STATEMENT
UNDER
THE SECURITIES ACT OF 1933
_____________________________
HIBERNIA CORPORATION
(Exact Name of Registrant as Specified in its charter)
Louisiana 6711 72-0724532
(State or Jurisdiction (Primary Standard (I.R.S. of
Incorporation Industrial Classification Identification
or Organization) Code Number) Number)
313 Carondelet Street
New Orleans, Louisiana 70130
(504) 533-5332
(Address, Including Zip Code, and Telephone Number, Including Area
Code, of Registrant's Principal Executive Offices)
_____________________________
Gary L. Ryan
Associate Counsel
Hibernia Corporation
313 Carondelet Street
New Orleans, Louisiana 70130
(504) 533-5560
(Name, Address, Including Zip Code, and Telephone Number,
Including Area Code of Agent for Service)
COPIES TO:
Patricia C. Meringer
Secretary and Associate Counsel
Hibernia Corporation
313 Carondelet Street
New Orleans, Louisiana 70130
(504) 533-2486
Paul M. Haygood, Esq.
Stone, Pigman, Walther, Wittmann & Hutchinson
546 Carondelet Street
New Orleans, Louisiana 70130
(504) 581-3200
____________________________
APPROXIMATE DATE OF COMMENCEMENT OF PROPOSED SALE OF SECURITIES TO
THE PUBLIC:
As soon as practicable after this registration statement is
declared effective.
If the securities being registered on this Form are being
offered in connection with the formation of a holding company and
there is compliance with General Instruction G, check the following
box. ______
/_____/
CALCULATION OF REGISTRATION FEE
_________________________________________________________________
Title of Each Amount Proposed Proposed Amount of
Class of to be Maximum Maximum Registration
Securities to Registered(1) Offering Aggregate Fee
be Registered Price Offering
Per Share Price
__________________________________________________________________
Class A
Common Stock,
no par value 2,412,903 Shares $7.75 $18,700,000 $ 6,488.00
______________________________________________________________
1. Estimated solely for purposes of calculating the filing fee
/due hereunder, based on an aggregate value of the stock to be
issued in the Merger of $18,700,000 and the average of the high and
low sales prices of a share of Hibernia Corporation ("Hibernia")
Class A Common Stock, no par value per share, on January 7, 1994
pursuant to Rule 457 of the Securities Act of 1933 (the "Securities
Act").
THIS REGISTRATION STATEMENT SHALL BECOME EFFECTIVE IN
ACCORDANCE WITH SECTION 8(A) OF THE SECURITIES ACT OF 1933, AS
AMENDED, OR ON SUCH DATE AS THE SECURITIES AND EXCHANGE COMMISSION,
ACTING PURSUANT TO SAID SECTION 8(A), MAY DETERMINE.
HIBERNIA CORPORATION
Cross Reference Sheet Pursuant to Item 501(b) of Regulation S-K
Item of Form S-4 Location or Caption in
Proxy
Statement (Prospectus)
1. Forepart of Registration Statement Introduction
and Outside Front Cover Page of
Prospectus
2. Inside Front and Outside Back Table of Contents;
Cover Pages of Prospectus Available
Information
3. Risk Factors, Ratio of Earnings Introduction; The
To Fixed Charges and Other Companies; Summary
4. Terms of the Transaction Introduction; Summary;
Proposed Merger
5. Pro Forma Financial Pro Forma Financial
Information Information
6. Material Contacts with the Proposed Merger
Company Being Acquired
7. Additional Information Required Not Applicable
for Reoffering by Persons and
Parties Deemed to be Underwriters
8. Interests of Named Experts and Validity of Shares; Experts
Counsel
9. Disclosure of Commission Position Proposed Merger
on Indemnification for Securities
Act Liabilities
10. Information with Respect to Introduction; Available
S-3 Registrants Information; The Companies
11. Incorporation of Certain Available Information
Information by Reference
12. Information with Respect to Not Applicable
S-2 or S-3 Registrants
13. Incorporation of Certain Not Applicable
Information by Reference
14. Information with Respect to Not Applicable
Registrants other than
S-2 or S-3 Registrants
15. Information with Respect to Not Applicable
S-3 Companies
16. Information with Respect to Not Applicable
S-2 or S-3 Companies
17. Information with Respect to Summary; The Companies;
Companies Other Than S-2 Certain Information
or S-3 Companies Concerning Commercial
18. Information if Proxies, Introduction; Summary;
Consents or Authorizations Meeting Information;
are to be Solicited Proposed Merger;
Certain Information
Concerning Commercial;
Relationship with
Independent Auditors
19. Information if Proxies, Not Applicable
Consent, Authorizations are not
to be Solicited or in an Exchange
Offer
COMMERCIAL BANCSHARES, INC.
Post Office Box 575
Franklin, Louisiana 70538
May 12, 1994
Dear Shareholder:
You are cordially invited to attend a Special Meeting of
Shareholders of Commercial Bancshares, Inc. ("Commercial"), which
will be held at the office of First Commercial Bank, 301 Northwest
Boulevard, Franklin, Louisiana 70538, on June 15, 1994, at 10:00
a.m. (the "Special Meeting").
At the Special Meeting, you will be asked to consider and
vote upon a proposal to approve an Agreement and Plan of Merger
(the "Agreement") between Commercial and Hibernia Corporation
("Hibernia"), pursuant to which Commercial will merge with and into
Hibernia (the "Merger"). Under the terms of the Agreement, the
shareholders of Commercial will receive, in the aggregate, $18.7
million payable in Hibernia's Class A Common Stock, no par value
("Hibernia Common Stock"), based on its average market price over
the five-day period immediately preceding the last day before the
closing of the Merger; provided that, regardless of the price of
the Hibernia Common Stock immediately preceding the closing of the
Merger, Commercial's shareholders will not receive fewer than 8.4
shares of Hibernia Common Stock for each outstanding share of
Commercial's Common Stock, par value $2.00 per share (the
"Commercial Common Stock"). If, before the closing date of the
Merger, Hibernia enters into an agreement to acquire St. Mary
Holding Corporation or St. Mary Bank & Trust Company, Inc., the
amount received by Commercial's shareholders in the Merger will
increase to $20.7 million payable in Hibernia Common Stock with a
minimum of at least 9.3 shares of Hibernia Common Stock for each
outstanding share of Commercial Common Stock. Hibernia has
indicated, however, that it does not currently intend to acquire
St. Mary Holding Corporation or St. Mary Bank & Trust Company, Inc.
Consummation of the Merger is subject to certain conditions,
including approval of the Merger by Commercial's shareholders and
various regulatory agencies, and approval of an amendment to
Commercial's Articles of Incorporation (described below) by
Commercial's shareholders.
At the Special Meeting, the shareholders of Commercial
also will be asked to consider and vote upon an amendment to
Commercial's Articles of Incorporation to eliminate provisions of
the present Article VII that cannot be complied with in the context
of a merger with a publicly held company such as Hibernia, as well
as provisions that are not consistent with Hibernia's Articles of
Incorporation, and to provide that the Merger may be approved by a
majority of the voting power present or represented at the Special
Meeting (the "Amendment"). The purpose of the Amendment is to
eliminate certain provisions from Commercial's Articles of
Incorporation that are an impediment to the consummation of the
Merger, and to provide that, after the Amendment is approved, the
Merger may be approved by a majority of the voting power present or
represented at the Special Meeting. The proposal to approve the
Merger will be withdrawn if the proposed Amendment is not approved
by Commercial's shareholders.
If Commercial's Board of Directors does not receive a
sufficient number of proxies by the date of the Special Meeting to
approve both the Amendment and the Merger, the shareholders will be
asked at the Special Meeting to approve an adjournment to permit
further solicitation of proxies by the Board. The Board of
Directors recommends that shareholders vote "FOR" adjournment under
those circumstances.
The enclosed Notice of Special Meeting of Shareholders and
Proxy Statement-Prospectus describe the Merger and the proposed
Amendment. Please read these materials carefully and consider the
information contained in them. The Agreement has been approved
unanimously by your Board of Directors. The Board believes the
proposed Merger with Hibernia to be in the best interests of
Commercial's shareholders. In that connection, the Board has
received an opinion of The Bank Advisory Group, Inc. that the terms
of the Merger are fair, from a financial standpoint, to the
shareholders of Commercial.
It is very important that your shares be represented at the
Special Meeting, regardless of whether you plan to attend in
person. Approval of the proposed Amendment requires the
affirmative vote of the holders of at least 75% of the outstanding
shares of Commercial Common Stock. If Commercial's shareholders
approve the proposed Amendment, the affirmative vote of a majority
of the voting power of Commercial present or represented at the
Special Meeting will be required to approve the Merger. If
Commercial's shareholders do not approve the proposed Amendment,
the proposal to approve the Merger will be withdrawn. A failure to
vote FOR the Amendment (whether by failure to return the enclosed
proxy card, by marking "abstain" on the enclosed proxy card with
respect to the Amendment, or otherwise) will have the same effect
as a vote against the Amendment. Similarly, marking "abstain" on
the enclosed proxy card with respect to the proposal to approve the
Merger will have the same effect as a vote against the proposal to
approve the Merger. Approval of any adjournment of the Special
Meeting requires the affirmative vote of a majority of the voting
power present or represented by proxy. Therefore, I urge you to
(1) vote for approval of all three proposals on the enclosed proxy
card and (2) execute, date and return the enclosed proxy card in
the enclosed postage-paid envelope as soon as possible.
As noted above, the Merger is subject to various regulatory
clearances. Even though the Commercial shareholders are being
asked to approve the Merger at the Special Meeting, it is possible,
although we are advised by Hibernia that it does not think it
likely, that all such clearances may not be obtained prior to the
Special Meeting or otherwise in time for the closing of the Merger
to occur no later than July 1, 1994, the deadline for the closing
under the Agreement. In such event, your Board of Directors will
consider the various options available to Commercial in determining
what course of action Commercial should then pursue.
Commercial's Board of Directors has unanimously approved the
Merger and Amendment and unanimously recommends that you vote FOR
approval of all three proposals. On behalf of the Board of
Directors, I urge you to vote FOR approval of the Merger, the
Amendment to the Articles of Incorporation and the proposal to
adjourn the Special Meeting, if necessary, to permit further
solicitation of proxies by the Board.
Very truly yours,
Newman Trowbridge, Jr.
Chairman of the Board
NOTICE OF SPECIAL MEETING OF SHAREHOLDERS
OF
COMMERCIAL BANCSHARES, INC.
June 15, 1994
NOTICE IS HEREBY GIVEN that, pursuant to the call of the
directors of Commercial Bancshares, Inc. ("Commercial"), a Special
Meeting of the shareholders of Commercial will be held at the
office of First Commercial Bank, 301 Northwest Boulevard, Franklin,
Louisiana 70538, on June 15, 1994, at 10:00 a.m., for the purpose
of considering and voting upon the following matters:
1. A proposal to amend Article VII of the Articles of
Incorporation of Commercial as set forth in Appendix A to
the accompanying Proxy Statement-Prospectus (the
"Amendment").
2. A proposal to approve a merger of Commercial with and
into Hibernia Corporation ("Hibernia") (the "Merger"),
and the related Agreement and Plan of Merger between
Commercial and Hibernia dated as of September 28, 1993
(the "Agreement"), a copy of which is attached as
Appendix B to the accompanying Proxy Statement-Prospectus
and incorporated herein by this reference, and which
Agreement also provides for the merger of First
Commercial Bank (the "Bank") with and into Hibernia
National Bank ("HNB") (the "Bank Merger").
3. The adjournment of the Special Meeting one or more times
if the Board does not receive a sufficient number of
proxies to approve both the Amendment and the Merger to
permit further solicitation of proxies for this purpose
by the Board.
4. The transaction of such other business as may properly
come before the meeting and any adjournments or
postponements thereof.
The Board of Directors has fixed the close of business on May
12, 1994 as the record date for determining the shareholders
entitled to receive notice of, and to vote at, the Special Meeting.
Each share of common stock, par value $2.00 per share, of
Commercial (the "Commercial Common Stock") will entitle the holder
thereof to one vote on all matters that come before the Special
Meeting. Approval of the Amendment requires the affirmative vote
in person or by proxy at the Special Meeting of the holders of at
least 75% of the outstanding shares of Commercial Common Stock. If
the shareholders approve the Amendment, the approval of the Merger
will require the affirmative vote of a majority of the voting power
of Commercial present or represented by proxy at the Special
Meeting. If the proposed Amendment is not approved, the proposal
to approve the Merger will be withdrawn. Approval of any
adjournment requires the affirmative vote of a majority of the
voting power present or represented by proxy at the Special
Meeting.
Dissenting shareholders who comply with the procedural
requirements of the Business Corporation Law of Louisiana will be
entitled to receive payment of the fair cash value of their shares
if the Merger is effected upon approval by less than eighty percent
(80%) of Commercial's total voting power.
By Order of the Board of Directors,
David H. Stiel, Jr.
Secretary
SHAREHOLDERS ARE URGED TO DATE, SIGN AND RETURN THE ENCLOSED PROXY
AS PROMPTLY AS POSSIBLE, REGARDLESS OF WHETHER YOU PLAN TO ATTEND
THE MEETING IN PERSON. IF YOU DO ATTEND THE MEETING, YOU MAY THEN
REVOKE YOUR PROXY IN THE MANNER DESCRIBED IN THE ACCOMPANYING PROXY
STATEMENT-PROSPECTUS.
COMMERCIAL BANCSHARES, INC.
PROXY
This Proxy is Solicited on Behalf of
The Board of Directors of Commercial Bancshares, Inc.
The undersigned shareholder of COMMERCIAL BANCSHARES, INC.
("Commercial"), a Louisiana corporation, hereby appoints NEWMAN
TROWBRIDGE, JR. and DAVID H. STIEL, JR. and each of them, proxies
with power of substitution to vote and act for the undersigned, as
designated below, with respect to the number of shares of the
Commercial Common Stock the undersigned would be entitled to vote
if personally present at the Special Meeting of Shareholders of
Commercial which will be held at the office of First Commercial
Bank, 301 Northwest Boulevard, Franklin, Louisiana 70538, on June
15, 1994, at 10:00 a.m. (the "Special Meeting"), and at any
adjournments or postponements thereof, and, at their discretion,
the proxies are authorized to vote upon such other business as may
properly come before the meeting.
THE SHARES REPRESENTED BY THIS PROXY WILL BE VOTED AS DIRECTED
HEREIN BY THE SHAREHOLDER. IF NO DIRECTION IS SPECIFIED WHEN THE
DULY EXECUTED PROXY IS RETURNED, SUCH SHARES WILL BE VOTED IN
ACCORDANCE WITH THE RECOMMENDATIONS OF THE BOARD OF DIRECTORS OF
COMMERCIAL.
The Board of Directors of Commercial recommends that you vote:
(a) FOR approval of the Amendment to the Articles of Incorporation
of Commercial; (b) FOR approval of the Merger of Commercial with
and into Hibernia Corporation; and (c) FOR approval of any
adjournment of the Special Meeting, if necessary to permit further
solicitation of proxies to vote in favor of the Amendment and
Merger.
THIS PROXY IS CONTINUED ON THE REVERSE SIDE
PLEASE SIGN ON THE REVERSE SIDE AND RETURN PROMPTLY
<PAGE>
PLEASE MARK YOUR CHOICE LIKE
THIS ___ IN BLUE OR BLACK INK
/__/
_____________________
Common Stock
Item 1 - Approval of the Amendment to the Articles of
Incorporation
For Against Abstain
______ ______ ______
/_____/ /_____/ /_____/
Item 2 - Approval of Merger of Commercial with and into Hibernia
Corporation
For Against Abstain
______ ______ ______
/_____/ /_____/ /_____/
Item 3 - Approval of any adjournment of the Special Meeting for
purposes of permitting further solicitation of proxies by
Commercial's Board of Directors
For Against Abstain
______ ______ ______
/_____/ /_____/ /_____/
The undersigned hereby acknowledges receipt of a copy of the
accompanying Notice of Special Meeting of Shareholders and Proxy
Statement and hereby revokes any proxy or proxies heretofore given.
Date_______________________________
Signature__________________________
Please mark, date and sign as your account name appears and return
in the enclosed envelope. If acting as executor, administrator,
trustee, guardian, or in a similar capacity, you should so indicate
when signing. If the person signing is a corporation, partnership
or other entity, please sign the full name of the corporation or
partnership or other entity by a duly authorized officer, partner
or other person. If the shares are held jointly, each shareholder
named should sign.
PROXY STATEMENT
COMMERCIAL BANCSHARES, INC.
SPECIAL MEETING OF SHAREHOLDERS
To Be Held on June 15, 1994
PROSPECTUS
HIBERNIA CORPORATION
2,493,333 SHARES
CLASS A COMMON STOCK
(NO PAR VALUE)
This Proxy Statement-Prospectus is being furnished to the
holders of common stock, par value $2.00 per share (the "Commercial
Common Stock"), of Commercial Bancshares, Inc. ("Commercial") in
connection with the solicitation of proxies by the Board of
Directors of Commercial for use at a special meeting of
shareholders (the "Special Meeting") to be held at 10:00 a.m.,
local time, on June 15, 1994, at the office of First Commercial
Bank, 301 Northwest Boulevard, Franklin, Louisiana 70538, and at
any adjournments or postponements thereof.
At the Special Meeting, the holders of record of Commercial
Common Stock as of the close of business on May 12, 1994 (the
"Record Date") will consider and vote upon (i) a proposal to amend
Article VII of the Articles of Incorporation of Commercial as set
forth in Appendix A hereto (the "Amendment"); (ii) a proposal to
approve the merger of Commercial with and into Hibernia (the
"Merger"), and the related Agreement and Plan of Merger (the
"Agreement") between Commercial and Hibernia pursuant to which
First Commercial Bank (the "Bank") will also merge with and into
Hibernia National Bank ("HNB") (the "Bank Merger"); and (iii) a
proposal to approve adjournment of the Special Meeting to permit,
if necessary, further solicitation by Commercial's Board of proxies
to approve the Amendment and Merger. Upon consummation of the
Merger, each outstanding share of Commercial Common Stock, except
for shares owned beneficially by Hibernia and its subsidiaries and
shares as to which dissenter's rights have been perfected and not
withdrawn or otherwise forfeited, will be converted into the number
of shares of Hibernia's Class A Common Stock, no par value (the
"Hibernia Common Stock"), determined in the manner described below
under the heading "PROPOSED MERGER - Terms of the Merger," with
cash being paid in lieu of any fractional share interests. For a
description of the Agreement, which is included in its entirety as
Appendix B to this Proxy Statement-Prospectus, see "PROPOSED
MERGER."
This Proxy Statement-Prospectus also constitutes a prospectus
of Hibernia with respect to the shares of Hibernia Common Stock to
be issued pursuant to the Agreement if the Merger is consummated.
The actual number of shares of Hibernia Common Stock to be issued
will be determined in accordance with the terms of the Agreement.
The outstanding shares of Hibernia Common Stock are listed on
the New York Stock Exchange, Inc. (the "NYSE"). The reported last
sale price of Hibernia Common Stock on the NYSE Composite
Transactions Reporting System on May 10, 1994 was $______ per
share.
This Proxy Statement-Prospectus and the accompanying proxy
card are first being mailed to shareholders of Commercial on or
about May 13, 1994.
THESE SECURITIES HAVE NOT BEEN APPROVED OR DISAPPROVED BY THE
SECURITIES AND EXCHANGE COMMISSION OR ANY STATE SECURITIES
COMMISSION, NOR HAS THE SECURITIES AND EXCHANGE COMMISSION OR ANY
STATE SECURITIES COMMISSION PASSED UPON THE ACCURACY OR ADEQUACY OF
THIS PROXY STATEMENT-PROSPECTUS. ANY REPRESENTATION TO THE
CONTRARY IS A CRIMINAL OFFENSE.
THE SHARES OF HIBERNIA COMMON STOCK OFFERED HEREBY ARE NOT
SAVINGS ACCOUNTS, DEPOSITS OR OTHER OBLIGATIONS OF A BANK OR
SAVINGS ASSOCIATION AND ARE NOT INSURED BY THE FEDERAL DEPOSIT
INSURANCE CORPORATION OR ANY OTHER GOVERNMENTAL AGENCY.
The date of this Proxy Statement-Prospectus is May 12, 1994.
TABLE OF CONTENTS
Page
INTRODUCTION . . . . . . . . . . . . . . . . . . . . . . .
AVAILABLE INFORMATION. . . . . . . . . . . . . . . . . . .
INCORPORATION OF CERTAIN DOCUMENTS BY REFERENCE. . . . . .
THE COMPANIES. . . . . . . . . . . . . . . . . . . . . . .
SUMMARY. . . . . . . . . . . . . . . . . . . . . . . . . .
MEETING INFORMATION. . . . . . . . . . . . . . . . . . . .
General . . . . . . . . . . . . . . . . . . . . . . . . .
Commercial; Employee Stock Ownership Plan . . . . . . .
Votes Required . . . . . . . . . . . . . . . . . . . . .
Recommendation of Commercial's Board . . . . . . . . . .
Other Matters . . . . . . . . . . . . . . . . . . . . .
PROPOSED AMENDMENT TO ARTICLES OF INCORPORATION OF
COMMERCIAL . . . . . . . . . . . . . . . . . . . . . . .
ADJOURNMENT OF SPECIAL MEETING . . . . . . . . . . . . . .
PRO FORMA FINANCIAL INFORMATION. . . . . . . . . . . . . .
PROPOSED MERGER. . . . . . . . . . . . . . . . . . . . . .
Background of and Reasons for Merger . . . . . . . . . .
Terms of the Merger. . . . . . . . . . . . . . . . . . .
Opinion of Financial Advisor . . . . . . . . . . . . . .
Surrender of Certificates . . . . . . . . . . . . . . .
Representations and Warranties;
Conditions to the Merger; Waiver. . . . . . . . . . . .
Regulatory and Other Approvals . . . . . . . . . . . . .
Business Pending the Merger . . . . . . . . . . . . . .
Effective Date of the Merger; Termination . . . . . . .
Management and Operations After the Merger . . . . . . .
Certain Differences in Rights of Shareholders . . . . .
Interests of Certain Persons in the Merger . . . . . . .
Material Tax Consequences . . . . . . . . . . . . . . .
Resale of Hibernia Common Stock . . . . . . . . . . . .
Rights of Dissenting Shareholders . . . . . . . . . . .
Dividend Reinvestment Plan . . . . . . . . . . . . . . .
Accounting Treatment . . . . . . . . . . . . . . . . . .
CERTAIN REGULATORY CONSIDERATIONS. . . . . . . . . . . . .
CERTAIN INFORMATION CONCERNING COMMERCIAL. . . . . . . . .
Description of Business . . . . . . . . . . . . . . . .
Ownership of Commercial Common Stock and Dividends . . .
RELATIONSHIP WITH INDEPENDENT AUDITORS . . . . . . . . . .
VALIDITY OF SHARES . . . . . . . . . . . . . . . . . . . .
EXPERTS . . . . . . . . . . . . . . . . . . . . . . . . .
COMMERCIAL BANCSHARES, INC AND SUBSIDIARY FINANCIAL
STATEMENTS. . . . . . . . . . . . . . . . . . . . . . . .
APPENDIX A -- ARTICLES OF AMENDMENT TO ARTICLES OF
INCORPORATION OF COMMERCIAL
APPENDIX B -- AGREEMENT AND PLAN OF MERGER
APPENDIX C -- ARTICLE VII OF ARTICLES OF INCORPORATION OF
COMMERCIAL
APPENDIX D -- OPINION OF THE BANK ADVISORY GROUP, INC.
APPENDIX E -- SELECTED PROVISIONS OF LOUISIANA LAW RELATING
TO RIGHTS OF DISSENTING SHAREHOLDERS
APPENDIX F -- OPINION OF ERNST & YOUNG REGARDING CERTAIN TAX
MATTERS
INTRODUCTION
This Registration Statement relates to shares of Class A Common
Stock, no par value of Hibernia Corporation, a Louisiana
corporation, which will be issued in connection with the Merger of
Commercial Bancshares, Inc., a Louisiana corporation, with and into
Hibernia. The shares of Hibernia Common Stock offered hereby will
be exchanged, upon consummation of the Merger, for the outstanding
shares of common stock, $2.00 par value, of Commercial (the
"Commercial Common Stock").
Shareholders of Commercial will be asked to approve the Merger
at a Special Meeting to be held on June 15, 1994. The proxy
statement relating to such Special Meeting is included in this
Proxy Statement-Prospectus.
The terms of the Merger are described in this Proxy Statement-
Prospectus, and a copy of the Agreement and Plan of Merger between
Hibernia and Commercial is attached hereto as Appendix B for
reference.
AVAILABLE INFORMATION
Hibernia Corporation is subject to the informational
requirements of the Securities Exchange Act of 1934, as amended
(the "Exchange Act"), and in accordance therewith files reports,
proxy statements and other information with the Securities and
Exchange Commission (the "Commission"). Such reports, proxy
statements and other information can be inspected and copied at the
public reference facilities of the Commission at Room 1024, 450
Fifth Street, N.W., Washington, D.C. 20549, and at the Commission's
Regional Offices located at 75 Park Place, 14th Floor, New York,
New York 10007 and Northwestern Atrium Center, 500 West Madison
Street, Suite 1400, Chicago, Illinois 60661. Copies of such
materials can be obtained from the Public Reference Section of the
Commission at 450 Fifth Street, N.W., Washington, D.C. 20549, at
prescribed rates. In addition, reports, proxy statements and other
information concerning Hibernia may be inspected at the offices of
the New York Stock Exchange, Inc. (the "NYSE"), 20 Broad Street,
New York, New York 10005, on which the shares of Hibernia Common
Stock are listed.
Hibernia has filed with the Commission a registration statement
on Form S-4 (together with all amendments and exhibits thereto, the
"Registration Statement") under the Securities Act of 1933, as
amended (the "Securities Act") with respect to the Hibernia Common
Stock offered hereby. This Proxy Statement-Prospectus does not
contain all of the information set forth in the Registration
Statement. For further information with respect to Hibernia and
the Hibernia Common Stock offered hereby, reference is hereby made
to the Registration Statement. Statements contained in this
Prospectus concerning the provisions of certain documents are not
necessarily complete and, in each instance, reference is made to
the copy of the document filed as an exhibit to the Registration
Statement, each such statement being qualified in all respects by
such reference. Copies of all or any part of the Registration
Statement, including exhibits thereto, may be obtained, upon
payment of the prescribed fees, at the offices of the Commission
and the NYSE, as set forth above.
INCORPORATION OF CERTAIN DOCUMENTS BY REFERENCE
Incorporated by reference in this Prospectus are the following
documents filed by Hibernia Corporation with the Commission
pursuant to the Exchange Act: Hibernia's (1) Annual Report on Form
10-K for the year ended December 31, 1993; (2) definitive Proxy
Statement dated April 8, 1994 relating to its 1994 Annual Meeting
of Shareholders held on April 26, 1994 except for the information
contained therein under the headings "Executive Compensation --
Report of the Executive Compensation Committee" and "-- Stock
Performance Graph"; and (3) a Current Report on Form 8-K dated
January 12, 1994.
All documents subsequently filed by Hibernia with the Commission
pursuant to Sections 13(a), 13(c), 14 or 15(d) of the Exchange Act
after the date of this Prospectus and prior to the termination of
the offering of Common Stock made hereby shall be deemed to be
incorporated by reference in this Prospectus and to be a part
hereof from the date such documents are filed, except that any and
all information included in any proxy statement filed by Hibernia
under the headings "Executive Compensation -- Report of the
Executive Compensation Committee" and "-- Stock Performance Graph"
are hereby expressly excluded from such incorporation by reference.
Any statement contained in a document incorporated or deemed to be
incorporated by reference herein modifies or supersedes such
statement. Any statement so modified or superseded shall not be
deemed, except as so modified or superseded, to constitute a part
of this Prospectus.
Hibernia will provide, without charge, to each person to whom
this Prospectus is delivered, on the written or oral request of any
such person, a copy of any or all of the information incorporated
herein by reference other than exhibits to such information (unless
such exhibits are specifically incorporated by reference into such
information). Written or oral requests should be directed to
Hibernia Corporation, 313 Carondelet Street, New Orleans, Louisiana
70130, Attention: Assistant Corporate Secretary, Telephone (504)
587-3411.
THE COMPANIES
Hibernia. Hibernia is a Louisiana corporation registered under
the Bank Holding Company Act of 1956, as amended ("BHCA"). As of
December 31, 1993, Hibernia had total consolidated assets of
approximately $4.8 billion and shareholders' equity of
approximately $428 million. As of December 31, 1993, Hibernia was
ranked, on the basis of total assets, as the 90th largest bank
holding company in the United States and the second largest
headquartered in Louisiana.
As of December 31, 1993 Hibernia had a single banking
subsidiary, Hibernia National Bank ("HNB"), that provides retail
and commercial banking services through 101 branches throughout
Louisiana. As of December 31, 1993, HNB was the largest bank
headquartered in Louisiana.
The principal executive offices of Hibernia are located at 313
Carondelet Street, New Orleans, Louisiana 70130, and its telephone
number is (504) 533-5532. For additional information concerning
the business and financial condition of Hibernia, reference should
be made to the Hibernia reports incorporated herein by reference.
See "AVAILABLE INFORMATION."
Selected Financial Data.
The closing per share market price of Hibernia Common Stock on
July 26, 1993, the day prior to the date on which the agreement in
principle between Commercial and Hibernia was executed and
announced, was $7.125. On September 28, 1993, the date on which
the Agreement was executed, the closing per share market price of
the Hibernia Common Stock was $8.25.
SELECTED FINANCIAL DATA
(Unaudited)
The following table sets forth certain historical consolidated
information for Hibernia Corporation. This information is based on
historical financial statements and related notes of Hibernia
Corporation incorporated by reference into this Proxy Statement -
Prospectus. Pro forma financial information giving effect to the
merger and other probable mergers is included in the "PRO FORMA
FINANCIAL INFORMATION".
HIBERNIA CORPORATION
SELECTED FINANCIAL INFORMATION
<TABLE>
<CAPTION>
Year Ended December 31
Unaudited ($ in thousands, except per share amounts) 1993 1992 1991 1990 1989
<S> <C> <C> <C> <C> <C>
Net interest income $195,705 $197,278 $234,599 $261,318 $214,530
Net income (loss) from continuing operations 47,950 (7,915) (143,997) (10,995) 61,644
Per share:
Net income (loss) from continuing operations 0.58 (0.27) (5.12) (0.40) 2.30
Cash dividends 0.03 - .15 .90 .91
Book value 5.12 4.48 7.05 13.16 14.45
SELECTED PERIOD-END BALANCES
Debt - 8,269 94,534 104,367 55,406
Total assets 4,795,583 4,734,038 6,018,429 7,357,850 6,698,851
</TABLE>
Commercial. Commercial is a Louisiana corporation registered
under the BHCA. As of December 31 1993, Commercial had total
consolidated assets of $169 million and shareholders' equity of
$14.1 million. Commercial's sole subsidiary is the Bank, a
Louisiana banking association having seven offices in St. Mary,
Iberia and Vermilion Parishes in Louisiana. The Bank engages in
retail and commercial banking services, including taking deposits
and extending secured and unsecured credit. On a pro forma basis
prior to the other pending mergers, Commercial's assets would
represent approximately 3.4% of the total assets of the combined
entity after the Merger, and Commercial's shareholders' equity
would represent approximately 3.2% of the total shareholders'
equity. Commercial's total deposits would represent, on a pro
forma basis, approximately 3.5% of the total deposits of the
combined entity.
The principal offices of Commercial are located at 521 Main
Street, Franklin, Louisiana 70538. Its telephone number is (318)
828-5140. For additional information concerning the business of
Commercial and its financial condition, see "CERTAIN INFORMATION
CONCERNING COMMERCIAL" AND "COMMERCIAL CONSOLIDATED FINANCIAL
INFORMATION."
SELECTED FINANCIAL DATA
(Unaudited)
The following table sets forth certain historical consolidated
information for Commercial Bancshares, Inc. This information is
based on historical financial statements and related notes of
Commercial Bancshares, Inc. contained elsewhere in this Proxy
Statement -Prospectus. Pro forma financial information giving
effect to the merger and other probable mergers is included in the
"PRO FORMA FINANCIAL INFORMATION".
COMMERCIAL BANCSHARES, INC.
SELECTED FINANCIAL INFORMATION
<TABLE>
<CAPTION>
Year Ended December 31
Unaudited ($ in thousands, except per share amounts) 1993 1992 1991 1990 1989
<S> <C> <C> <C> <C> <C>
Net interest income $6,459 $6,538 $5,590 $4,917 $5,434
Net income (loss) from continuing operations 1,667 1,589 870 (867) (2,646)
Per share:
Net income (loss) from continuing operations 5.91 5.63 3.08 (3.07) (9.36)
Cash dividends 1.00 - - - 0.04
Book value 50.00 43.05 35.10 30.29 33.32
SELECTED PERIOD-END BALANCES
Debt 3,345 3,545 7,288 8,150 9,013
Total assets 168,757 180,241 174,392 174,189 173,604
</TABLE>
COMMERCIAL BANCSHARES, INC. AND SUBSIDIARY
QUARTERLY INCOME RESULTS
Unaudited ($ in thousands, except per share amounts)
<TABLE>
<CAPTION>
1993
I II III IV
<S> <C> <C> <C> <C>
Interest income $2,822 $2,725 $2,579 $2,577
Net interest income 1,681 1,657 1,555 1,566
Income before cumulative effect
of accounting change 421 422 349 475
Net income 842 422 349 475
Net income per share before cumulative
effect of accounting change $1.49 $1.50 $1.24 $1.68
1992
I II III IV
Interest income $3,330 $3,195 $3,004 $2,883
Net interest income 1,582 1,660 1,634 1,662
Income before extraordinary item 238 573 499 279
Net income 238 573 835 412
Net income per share before extraordinary
item $0.84 $2.03 $1.77 $0.99
</TABLE>
COMPARATIVE PER SHARE INFORMATION
(Unaudited)
The following table sets forth for Hibernia Corporation common
stock and Commercial Bancshares, Inc. common stock certain
historical, unaudited pro forma combined and unaudited pro forma
equivalent per share financial information. This table is based on
and should be read in conjunction with the historical financial
statements and related notes of Hibernia Corporation, incorporated
by reference to this Proxy Statement - Prospectus, and Commercial
Bancshares, Inc., contained elsewhere in this Proxy Statement -
Prospectus. The pro forma information, which reflects the merger
using the pooling of interests method of accounting, is presented
for informational purposes only and should not be construed as
indicative of the actual operations that would have occurred had
the merger been consummated at the beginning of the periods
indicated below or which may occur after the merger is consummated.
The pro forma information gives effect to the issuance of 2,493,333
shares of Hibernia Corporation common stock for all the outstanding
shares of Commercial Bancshares, Inc.
HIBERNIA CORPORATION AND COMMERCIAL BANCSHARES, INC.
COMPARATIVE PER SHARE INFORMATION
Unaudited
<TABLE>
<CAPTION>
HISTORICAL COMMERCIAL
PRO FORMA BANCSHARES,
COMMERCIAL HIBERNIA INC.
HIBERNIA BANCSHARES, CORPORATION PRO FORMA
CORPORATION INC. (WITH C.B.I.) (1) EQUIVALENT (2)
Per Common Share:
<S> <C> <C> <C> <C>
Net income (loss) from continuing operations
For the year ended December 31,
1993 $0.58 $5.91 $0.58 $5.13
1992 (0.27) 5.63 (0.20) (1.77)
1991 (5.12) 3.08 (4.68) (41.42)
Cash dividends
For the year ended December 31,
1993 $0.03 $1.00 $0.03 $0.27
1992 - - - -
1991 0.15 - 0.15 1.33
Book Value
For the year ended December 31,
1993 $5.12 $50.00 $5.14 $45.49
(1) Refer to "PRO FORMA FINANCIAL INFORMATION".
(2) Pro forma equivalent amounts are computed by multiplying the pro forma combined amounts by the
Commercial Bancshares exchange ratio of 8.85.
</TABLE>
From time to time, Hibernia investigates and holds discussions
and negotiations in connection with possible transactions with
other financial institutions. At the date hereof, Hibernia has
entered into definitive merger agreements with four financial
institutions, including Commercial, which are described in
documents incorporated herein by reference and described in more
detail below under "PRO FORMA FINANCIAL STATEMENTS." See "AVAILABLE
INFORMATION." A summary of these transactions is also included
below. See "SUMMARY." In addition, Hibernia intends to continue
to pursue merger opportunities in the future. Although it is
anticipated that such transactions may be entered into both before
and after the Merger, there can be no assurance as to when or if,
or the terms upon which, such transactions may be pursued or
consummated. If required under applicable law, any such
transactions would be subject to regulatory approval and the
approval of shareholders.
SUMMARY
This summary is necessarily general and abbreviated and has
been prepared to assist shareholders of Commercial in their review
of this Proxy Statement-Prospectus. This summary is not intended
to be a complete explanation of the matters covered in this Proxy
Statement-Prospectus and is qualified in its entirety by reference
to the more detailed information contained elsewhere in this Proxy
Statement-Prospectus, the Appendices hereto and the documents
incorporated herein by reference, all of which shareholders are
urged to read carefully prior to the Special Meeting.
The Proposed Merger; Amendment to Articles
In accordance with the terms of the Agreement, Commercial will
be merged with and into Hibernia, whereupon the separate existence
of Commercial will cease. Immediately thereafter, assuming all
appropriate regulatory clearances have been obtained, the Bank will
be merged into HNB, with HNB as the surviving bank. On the
Effective Date, each outstanding share of Commercial Common Stock,
other than shares held by shareholders who exercise and perfect
dissenters' rights in accordance with Louisiana law and shares
owned beneficially by Hibernia and its subsidiaries, will be
converted into a number of shares determined by the application of
a formula based upon the average market price of Hibernia Common
Stock for the five trading days immediately prior to the last
trading day before the day on which closing of the Merger occurs
(the "Closing Date"). The aggregate value of Hibernia Common Stock
to be exchanged for the outstanding Commercial Common Stock will be
$18.7 million, which may be increased if certain contingencies,
which are not currently considered likely, occur. Regardless of
the market value of the Hibernia Common Stock, however, each
Commercial shareholder is assured of receiving at least 8.4 shares
of Hibernia Common Stock for each share of Commercial Common Stock
held by him. See "PROPOSED MERGER --Terms of the Merger."
Commercial also proposes to amend Article VII of its Articles
of Incorporation, which currently creates significant impediments
to the Merger. This Amendment requires the affirmative vote of at
least 75% of the outstanding shares of Commercial Common Stock.
See "PROPOSED AMENDMENT TO THE ARTICLES OF INCORPORATION OF
COMMERCIAL."
Finally, Commercial proposes to adjourn the Special Meeting
one or more times, if necessary, to permit further solicitation by
Commercial's Board of proxies if it shall not have received a
sufficient number before the Special Meeting to approve the
Amendment and Merger. Approval of any adjournment requires the
affirmative vote of a majority of the voting power present or
represented by proxy. See "ADJOURNMENT OF SPECIAL MEETING."
Management and Operations After the Merger
After the Effective Date, the offices of the Bank, following
the Bank Merger, will operate as branch banking offices of HNB. As
of the Effective Date, the directors of Commercial and the Bank
will resign their positions as directors. See "PROPOSED MERGER--
Management and Operations After the Merger."
Recommendation of the Board of Directors
The Board of Directors of Commercial has unanimously approved
the Agreement, believes that the Merger is in the best interests of
the shareholders and recommends that the shareholders vote FOR the
Merger. The Board of Directors has received from The Bank Advisory
Group, Inc. ("Bank Advisory Group") an opinion that the terms of
the Merger are fair, from a financial standpoint, to the common
shareholders of Commercial. See "PROPOSED MERGER -- Opinion of
Financial Advisor." Commercial's Board believes that the Merger
will provide significant value to all Commercial shareholders and
will enable them to participate in opportunities for growth that
Commercial's Board believes the Merger makes possible. In
recommending the Merger to the shareholders, Commercial's Board of
Directors considered, among other factors, the financial terms of
the Merger, the liquidity it will afford Commercial's shareholders
and the likelihood and potential adverse impact of increased
competition for Commercial in its market area if Commercial remains
independent. See "PROPOSED MERGER--Background of and Reasons for
the Merger."
Other Pending Merger Transactions for Hibernia
In addition to Commercial, Hibernia has entered into
definitive merger agreements with three other financial
institutions. Each of these transactions is subject to certain
conditions, similar to the conditions to the Merger described
herein. These transactions may be consummated before or after
consummation of the Merger. Shareholders of Commercial will not
have the right to vote on any of the other pending transactions.
In addition, if the Merger is consummated prior to consummation of
one or more of the other transactions, former shareholders of
Commercial who have not exercised and perfected dissenters' rights
will be shareholders of Hibernia at the time those transactions are
consummated. Shareholders of Hibernia do not have the right to
vote on any of the pending merger transactions.
The table below includes certain information concerning the
pending merger transactions, other than Commercial, to which
Hibernia is a party. Further information concerning the effects of
these transactions, including complete pro forma financial
information, is included herein below. See "PRO FORMA FINANCIAL
INFORMATION." All information included in the following table is
as of December 31, 1993, and all percentages are percentages of the
total combined entity, assuming consummation of all pending mergers
including Commercial.
<TABLE>
<CAPTION>
<S> <C> <C> <C> <C> <C>
Name Purchase Assets Assets as Shareholders' Equity as
Price % of Total Equity % of Total
Bastrop National
Bank $21.5 million $130 million 2.29% $14.8 million 3.08%
First Bancorp
of Louisiana, Inc. $36 million $225 million 3.96% $13.6 million 2.83%
First Continental
Bancshares, Inc. $33.2 million $400 million 7.03% $17.4 million 3.63%
On a pro forma basis, and based upon historical results, if each of the
pending mergers had been effective on January 1, 1991, the pending
transactions, including Commercial and taken as a whole, would not have been
dilutive to earnings, as shown on the Pro Forma Combined Statement of Income
included in the Pro Forma Financial Statements below. In fact, as shown in
those pro forma statements of income, the transactions, on a pro forma basis,
would be accretive to earnings per share (i.e., the transactions, on a pro
forma basis, would increase the earnings per share of Hibernia shareholders).
On a pro forma basis, as of December 31, 1993, the book value of the shares of
Hibernia would be slightly reduced by each of the pending transactions (by $.02
cents per share for Bastrop, by $.09 per share for First Bancorp and by $.30 per
share for First Continental). The effect of the Merger on the book value of
Hibernia Common Stock, as well as Commercial Common Stock, is shown in the
Comparative Per Share Data Table included herein below.
Basis for the Terms of the Merger
A number of factors were considered by the Board of Directors
of Commercial in approving the terms of the Merger, including,
without limitation, information concerning the financial condition,
results of operations and prospects of Hibernia, Commercial, HNB
and the Bank; the ability of the combined entity to compete in the
relevant banking markets; the market price of Hibernia Common
Stock; the absence of an active trading market for Commercial's
common stock; the dividend policies of each company; the
anticipated tax-free nature of the Merger to Commercial's
shareholders for federal income tax purposes; and the financial
terms of other business combinations in the banking industry. See
"PROPOSED MERGER --Background of and Reasons for the Merger."
Advice and Opinion of Financial Advisor
Bank Advisory Group, Commercial's financial advisor, has
rendered both oral and written opinions that the terms of the
Merger are fair, from a financial standpoint, to Commercial's
shareholders. A copy of the opinion of Bank Advisory Group is
attached hereto as Appendix D and should be read in its entirety
with respect to the assumptions made therein and other matters
considered. See "PROPOSED MERGER--Opinion of Financial Advisor"
for further information regarding, among other things, the
selection of such firm and its compensation in connection with the
Merger.
Votes Required
Approval of the Merger requires the affirmative vote of the
holders of a majority of the outstanding shares of Commercial
Common Stock. However, the Amendment must be approved by the
affirmative vote of at least 75% of the outstanding shares of
Commercial Common Stock in order for a majority vote to be
sufficient to approve the Merger. If the Amendment is not so
approved, the proposal to approve the Merger will be withdrawn.
Directors of Commercial and members of their families have voting
power with respect to approximately 179,475 shares of Commercial
Common Stock, representing approximately 63.7% of the Commercial
Common Stock outstanding as of the Record Date. Subject to receipt
of certain fairness opinions from Bank Advisory Group, the
directors of Commercial and the Bank, who own in the aggregate
78,224 shares of Commercial Common Stock representing approximately
27.8% of the outstanding shares of Commercial Common Stock, have
agreed to vote their stock in favor of approval of the Agreement at
any meeting of Commercial's shareholders held before July 1, 1994
at which the Merger is considered, unless they are legally required
to abstain from voting or to vote against the Merger. See "MEETING
INFORMATION--Record Date; Voting Rights" and "CERTAIN INFORMATION
RELATING TO COMMERCIAL--Voting Securities and Certain Holders
Thereof."
Conditions; Abandonment; Amendment
Consummation of the Merger is subject to the satisfaction of
a number of conditions, including approval of the Agreement by the
shareholders of Commercial and the Federal Reserve Board and
approval of the Bank Merger by the Office of the Comptroller of the
Currency ("OCC"). Applicable law provides that the Merger may not
be consummated until at least 30, but no more than 90, days after
approval of the Federal Reserve Board is obtained. Hibernia has
filed applications for the requisite regulatory approvals. See
"PROPOSED MERGER--Representations and Warranties; Conditions to
Closing; Waiver" and "--Regulatory and Other Approvals."
Substantially all of the conditions to consummation of the
Merger (except for required shareholder and regulatory approvals)
may be waived at any time by the party for whose benefit they were
created, and the Agreement may be amended or supplemented at any
time by written agreement of the parties, except that no such
waiver, amendment or supplement executed after approval of the
Agreement by Commercial's shareholders may reduce the ratio of
Hibernia Common Stock to Commercial Common Stock to be issued in
the Merger (the "Exchange Ratio"). In addition, the Agreement may
be terminated, either before or after shareholder approval, under
certain circumstances. See "PROPOSED MERGER--Representations and
Warranties; Conditions to Closing; Waiver" and "--Effective Date of
the Merger; Termination." However, any material change in the
terms of the Agreement after solicitation of votes from Commercial
shareholders for the Special Meeting will require a resolicitation
of votes from Commercial's shareholders.
Material Tax Consequences
It is a condition to consummation of the Merger that the
parties receive an opinion of counsel or a public accounting firm
to the effect that the Merger when consummated in accordance with
the terms of the Agreement will constitute a reorganization within
the meaning of Section 368 of the Internal Revenue Code of 1986, as
amended (the "Code"), and that the exchange of Commercial Common
Stock for Hibernia Common Stock will not give rise to the
recognition of gain or loss for federal income tax purposes to
Commercial's shareholders with respect to such exchange. The
parties have received such an opinion from Ernst & Young, certified
public accountants, who also serve as independent auditors for
Hibernia. A copy of such opinion is attached hereto as Appendix F.
See "PROPOSED MERGER--Material Tax Consequences."
Because of the complexities of the federal income tax laws and
because the tax consequences may vary depending upon a holder's
individual circumstances or tax status, it is recommended that each
shareholder of Commercial consult his or her tax advisor concerning
the federal (and any applicable state, local or other) tax
consequences of the Merger to him or her.
Dissenters' Rights
Each holder of Commercial Common Stock who objects to the
Merger is entitled to the rights and remedies of dissenting
shareholders provided in Section 12: 131 of the Louisiana Business
Corporation Law, as amended, a copy of which is attached hereto as
Appendix E. However, if dissenters' rights are exercised and
perfected with respect to 10% or more of the outstanding shares of
Commercial Common Stock, Hibernia may abandon the Merger. In
addition, dissenting shareholders may receive value for their
shares that is more or less than, or equal to, the value received
by other shareholders in the Merger. See "PROPOSED MERGER--Rights
of Dissenting Shareholders."
Differences in Shareholders' Rights
Upon completion of the Merger, shareholders of Commercial, to
the extent they receive shares of Hibernia Common Stock in the
Merger, will become shareholders of Hibernia and their rights as
such will be governed by Hibernia's Articles of Incorporation and
Bylaws. The rights of shareholders of Hibernia are different in
certain respects from the rights of shareholders of Commercial.
See "PROPOSED MERGER--Certain Differences in Shareholders' Rights."
Accounting Treatment
The parties intend the Merger to be treated as a pooling-of-
interests for financial accounting purposes. If, among other
things, holders of more than 10% of the outstanding shares of
Commercial Common Stock exercise and perfect dissenters' rights,
the Merger will not qualify for the pooling-of-interests method of
accounting, and Hibernia will not be obligated to effect the
Merger. See "PROPOSED MERGER -- Accounting Treatment."
MEETING INFORMATION
General
Each copy of this Proxy Statement-Prospectus mailed to holders
of Commercial Common Stock is accompanied by a proxy card furnished
in connection with the solicitation of proxies by Commercial's
Board of Directors for use at the Special Meeting and at any
adjournments or postponements thereof. This Proxy Statement and
the accompanying proxy card are first being mailed to shareholders
of Commercial on approximately May 13, 1994. The Special Meeting
is scheduled to be held on June 15, 1994, at 10:00 a.m. local time,
at the office of First Commercial Bank, 301 Northwest Boulevard,
Franklin, Louisiana 70538. Only holders of record of Commercial
Common Stock at the close of business on May 12, 1994 (the "Record
Date") are entitled to notice of and to vote at the Special
Meeting. At the Special Meeting, the shareholders of Commercial
will consider and vote upon the following: (i) a proposal to amend
the Articles of Incorporation of Commercial; (ii) a proposal to
approve the Merger and the related Agreement; (iii) the adjournment
of the Special Meeting one or more times, if necessary, to permit
further solicitation of proxies to approve the Amendment and
Merger; and (iv) such other matters as may properly be brought
before the Special Meeting.
HOLDERS OF COMMERCIAL COMMON STOCK ARE REQUESTED TO COMPLETE,
DATE AND SIGN THE ACCOMPANYING PROXY CARD AND RETURN IT PROMPTLY TO
COMMERCIAL IN THE ENCLOSED POSTAGE-PAID, ADDRESSED ENVELOPE.
FAILURE TO RETURN YOUR PROPERLY EXECUTED PROXY CARD OR TO VOTE AT
THE MEETING WILL HAVE THE SAME EFFECT AS A VOTE AGAINST THE
AMENDMENT AND WILL RESULT IN THE WITHDRAWAL OF THE MERGER PROPOSAL.
Any holder of Commercial Common Stock who has delivered a
proxy may revoke it any time before it is voted by giving notice of
revocation in writing or delivering a signed proxy card bearing a
later date to Commercial, provided that such notice or proxy card
must actually be received by Commercial before the vote of
shareholders at the Special Meeting. Any notice of revocation or
proxy card should be sent to Commercial at First Commercial Bank,
407 Charity Street, Abbeville, Louisiana 70511-0550, Attention:
David H. Stiel, Jr., Secretary.
The shares of Commercial Common Stock represented by properly
executed proxies received at or before the Special Meeting and not
subsequently revoked will be voted as directed in such proxies.
Proxy cards that are received and that do not contain instructions
as to how to vote the shares represented thereby will be voted FOR
approval of the Amendment and FOR approval of the Merger. If any
other matters are properly presented for consideration at the
Special Meeting, the persons named in the enclosed proxy card will
have discretionary authority to vote on such matters in accordance
with their best judgment; provided, however, that such
discretionary authority will be exercised only to the extent
permissible under applicable law. If necessary, and unless
contrary instructions are given, the proxy holder also may vote in
favor of a proposal to adjourn the Special Meeting one or more
times to permit further solicitation of proxies in order to obtain
sufficient votes to approve the Amendment and Merger Agreement. As
of the date of this Proxy Statement-Prospectus, Commercial's Board
of Directors is unaware of any matter to be presented at the
Special Meeting other than the proposal to amend the Articles of
Incorporation and the proposal to approve the Merger.
The cost of soliciting proxies from shareholders of Commercial
will be borne by Commercial. Such solicitation will be made by
mail but also may be made by telephone or in person by the
directors, officers and employees of Commercial (who will receive
no additional compensation for doing so).
COMMERCIAL SHAREHOLDERS SHOULD NOT FORWARD ANY STOCK
CERTIFICATES WITH THEIR PROXY CARDS. IF THE MERGER IS APPROVED,
SHAREHOLDERS OF COMMERCIAL WILL RECEIVE INSTRUCTIONS AS TO
EXCHANGING THEIR STOCK CERTIFICATES.
<PAGE>
Commercial's Employee Stock Ownership Plan
Each employee of Commercial who is a participant in the
Commercial Bancshares, Inc. Employee Stock Ownership Plan and Trust
(the "ESOP") may direct the trustee of the ESOP (the "Trustee") as
to the manner in which shares of Commercial Common Stock allocated
to such participant's account under the ESOP (the "Plan Shares")
shall be voted by the Trustee at the Special Meeting on the
proposals to approve the Amendment and the Merger. Each ESOP
participant has received with this Proxy Statement-Prospectus a
letter from the Trustee providing instructions as to the voting of
such participant's Plan Shares and a Voting Instruction Card to be
used by the participant to give voting directions to the Trustee.
In order to direct the Trustee with respect to the voting of Plan
Shares, an ESOP participant must complete, sign and date the Voting
Instruction Card and return it to the Trustee in the envelope
provided, so that it is received by the Trustee no later than June
10, 1994. Prior to the Special Meeting, the Trustee will tabulate
the instructions received by the deadline and shall determine the
aggregate votes for and against approval of the Amendment and the
Merger. At the Special Meeting, the Trustee will vote the shares
of Commercial Common Stock held by it on the Record Date for which
it has received instructions in the manner so determined. The
Trustee will not vote any Plan Shares on the proposal to approve
the Merger or the Amendment to the extent it does not receive
instructions with respect thereto. The Trustee of the ESOP holds
15,723 shares of Commercial Common Stock on behalf of the
participants of such plan.
Votes Required
As of the Record Date, there were 281,843 shares of Commercial
Common Stock outstanding and entitled to vote at the Special
Meeting, with each share being entitled to one vote. The
affirmative vote of holders of at least 75% of the outstanding
shares of Commercial Common Stock is required to approve the
proposed Amendment. If the Amendment is approved, the affirmative
vote of a majority of the voting power of Commercial present or
represented by proxy and entitled to vote at the Special Meeting
will be required to approve the Merger. The affirmative vote of a
majority of Commercial's voting power present or represented by
proxy is required to approve any adjournment of the Special
Meeting. Members of Commercial's Board of Directors, along with
members of their families who are expected to vote in favor of
approval of the Merger, own approximately 63.7% of the outstanding
Commercial Common Stock and, therefore, will hold, if the Amendment
is approved, sufficient Commercial Common Stock to approve the
Merger.
If the Amendment is not approved by Commercial's shareholders,
the affirmative vote of the holders of 75% of the total voting
power of Commercial plus a majority of the Commercial Common Stock
that is not deemed owned by any Major Stockholder, as defined in
Article VII of Commercial's Articles of Incorporation, would be
required to approve the Merger. However, notwithstanding the
receipt of such approval, the Merger cannot take place unless
certain provisions of Commercial's Articles of Incorporation are
deleted. See "PROPOSED AMENDMENT TO ARTICLES OF INCORPORATION OF
COMMERCIAL--In General" and "PROPOSED AMENDMENT TO ARTICLES OF
INCORPORATION OF COMMERCIAL--Description of Article VII and
Proposed Amendment." The Amendment is designed to facilitate
consummation of the Merger by eliminating those provisions and
adding a provision that expressly permits the approval of the
Merger by a majority of the voting power present or represented at
the Special Meeting. See "PROPOSED AMENDMENT TO ARTICLES OF
INCORPORATION OF COMMERCIAL--Reasons For Approval."
For purposes of the Special Meeting, the presence in person or
by proxy of a majority of the outstanding shares of Commercial
Common Stock is necessary to constitute a quorum of shareholders in
order to take action. For these purposes, shares of Commercial
Common Stock which are present, or represented by proxy, at the
Special Meeting will be counted for quorum purposes regardless of
whether the holder of the shares or proxy actually votes on the
Amendment or the Agreement or whether a broker with discretionary
authority fails to exercise its discretionary voting authority with
respect to the Amendment or Merger. Accordingly, an "abstention"
will be considered present for quorum purposes, but will have the
same effect as a vote "against" the proposal as to which the
abstention is made. Approval of the Amendment requires the
affirmative vote of at least 75% of the outstanding Commercial
Common Stock. For purposes of voting on the Amendment, therefore,
shares not present or represented by proxy at the Special Meeting,
abstentions and "broker non-votes" will have the same effect as
votes "against" the Amendment. If the Amendment is approved, the
affirmative vote of a majority of the voting power of Commercial
present or represented by proxy at the Special Meeting will be
necessary to approve the Merger. Therefore, for purposes of voting
on the Merger, "abstentions" and "broker non-votes" will have the
same effect as a vote against the Merger. Similarly, for purposes
of voting on any adjournment of the Special Meeting to permit
further solicitation of proxies, abstentions and broker non-votes
will have the same effect as a vote against the adjournment.
Each outstanding share of Commercial Common Stock is entitled
to one vote on each matter that comes before the Special Meeting.
As of the Record Date for the Special Meeting, there were 281,843
shares of Commercial Common Stock outstanding and entitled to vote
at the Special Meeting.
The directors and executive officers of Commercial and their
affiliates beneficially owned approximately 63,623 shares or
approximately 22.6% of the outstanding shares of Commercial Common
Stock as of the Record Date. Each director of Commercial and the
Bank has executed an agreement with Hibernia pursuant to which such
shareholder has committed, subject to certain conditions, to vote
the shares of Commercial Common Stock owned by him in favor of the
proposal to approve the Merger. The directors of Commercial and
the Bank have beneficial ownership of approximately 78,224 shares
of Commercial Common Stock representing approximately 27.8% of the
outstanding shares of Commercial Common Stock. Additionally,
Commercial has been advised that all of its directors and executive
officers intend to vote their shares in favor of approval of the
Amendment and the Merger. Members of directors' families who are
expected to vote in favor of the Amendment and the Merger own an
additional approximately 40% of the outstanding Commercial Common
Stock.
As of the Record Date, the directors and executive officers of
Hibernia and their affiliates beneficially owned no shares of
Commercial Common Stock.
Recommendation of Commercial's Board
Commercial's Board has unanimously approved the Amendment to
the Articles of Incorporation and the Merger and unanimously
recommends that Commercial's shareholders vote FOR approval of the
Amendment, FOR approval of the Merger and FOR approval of any
adjournment necessary to permit further solicitation of proxies by
the Board. See "PROPOSED MERGER--Background of and Reasons for the
Merger" and "--Opinion of Financial Advisor".
Other Matters
The Board of Directors of Commercial is not aware of any
business to be acted upon at the Special Meeting other than
consideration of the proposed Amendment and the Merger. If,
however, other matters are properly brought before the Special
Meeting, or any adjournments or postponements thereof, the persons
appointed as proxies will have discretion to vote or abstain from
voting thereon according to their best judgment.
PROPOSED AMENDMENT TO
ARTICLES OF INCORPORATION OF COMMERCIAL
In General
At the Special Meeting, Commercial will seek shareholder
approval of the Amendment to amend Article VII of the Articles of
Incorporation of Commercial as currently in effect. A copy of
Article VII of Commercial's Articles of Incorporation as currently
in effect is attached to this Proxy Statement-Prospectus as
Appendix C and a copy of the proposed Amendment thereto is attached
as Appendix A. Article VII contains provisions described more
fully below that are significant impediments to any attempts to
acquire Commercial. Unless repealed or modified, Article VII will
prevent the Merger from taking place. Under Article VII, the
Merger can occur only if certain conditions are satisfied,
including the following: (i) upon consummation of the Merger, the
holders of Commercial Common Stock must retain the proportionate
equity and voting interests in Hibernia that such holders had in
Commercial before the Merger; and (ii) upon consummation of the
Merger, the Articles of Incorporation of Hibernia would be required
to contain provisions "substantially the same" as those contained
in Article VII of Commercial's Articles of Incorporation. In order
to comply with the first of these requirements, immediately
following the Merger, the persons who currently are the
shareholders of Commercial would have to own, in the aggregate,
100% of the outstanding Hibernia Common Stock in the proportions
such shareholders currently own Commercial Common Stock.
Compliance with these requirements is practicably impossible and
unacceptable to Hibernia due, among other things, to the dramatic
increase in the cost of the transaction that such compliance would
cause. Consequently, the cost of compliance with those provisions
is prohibitive, for Hibernia and for nearly any other bank holding
company that might wish to merge with Commercial. Accordingly, the
repeal or modification of Article VII is necessary to the
consummation of the Merger. Commercial's Board of Directors
unanimously recommends the proposed Amendment to Article VII.
Description of Article VII and Proposed Amendment
Article VII contains several provisions that impede the
accomplishment of certain types of major transactions, including
transactions such as the Merger. The Amendment, if approved, will
result in the repeal of all of these provisions of Article VII.
The following description of Article VII is qualified in its
entirety by the exact terms and provisions of Article VII, a copy
of which is attached as Appendix C.
75% Vote Requirement for Certain Transactions. Article VII
prevents Commercial from engaging in certain major transactions
unless they first are approved by the affirmative vote of the
holders of 75% of the total voting power of Commercial. The
transactions subject to this requirement include (i) the merger or
consolidation of Commercial with or into any "Major Stockholder"
(as defined in Article VII), (ii) any sale, lease, exchange,
mortgage, pledge, transfer or other alienation to or with any Major
Stockholder of all or any substantial part of the assets of
Commercial, (iii) any plan of recapitalization or reclassification
of shares of any class of capital stock entitled to vote generally
in the election of directors, and (iv) any plan or proposal to
liquidate or dissolve Commercial. The term "Major Stockholder"
includes a person and such person's Associates and Affiliates (as
those terms are defined in Article VII) who, in the aggregate,
beneficially own, directly or indirectly, 5% or more of the
outstanding shares of any class of capital stock of Commercial
entitled to vote generally in the election of directors. A person
is deemed to be a beneficial owner of shares which such person,
together with any Affiliate or Associate of such person, owns or
has a right to acquire, or with respect to which such person and
any of such person's Associates or Affiliates has any agreement,
arrangement or understanding to acquire, hold, vote or alienate.
For purposes of Article VII, Hibernia may be deemed to be a Major
Stockholder. As a result, if the foregoing provisions of Article
VII are not modified, the Merger could only be approved by the
affirmative vote of the holders of 75% of the total voting power of
Commercial. Approval of the Amendment will reduce the vote
necessary to approve the Merger to the affirmative vote of a
majority of the voting power of Commercial present or represented
by proxy at the Special Meeting. Amendment of Article VII requires
the affirmative vote of the holders of at least 75% of the
outstanding shares of Commercial Common Stock.
Proportionate Equity and Voting Rights in Surviving
Corporation. Article VII requires that, in every merger or
consolidation in which Commercial is not the surviving corporation,
the holders of Commercial's capital stock must retain their
proportionate equity and voting interests in the surviving or
resulting corporation that such holders had in Commercial before
the merger or consolidation. As discussed above, compliance with
such a provision is practicably impossible and renders the cost of
the Merger prohibitive for Hibernia. Accordingly, the Merger
cannot be consummated unless this requirement of Article VII is
eliminated.
Substantially Similar Provisions in Articles of Incorporation
of Surviving Corporation. Article VII also requires that, in every
merger or consolidation in which Commercial is not the surviving or
resulting corporation, the Articles of Incorporation of the
surviving or resulting corporation contain provisions
"substantially the same" as those of Article VII. Article VII
would require, in the context of the Merger, that the Articles of
Incorporation of Hibernia, as the surviving corporation, contain
provisions that are substantially the same as those contained in
Article VII of Commercial's Articles of Incorporation. If Hibernia
were to amend its Articles of Incorporation to include provisions
that are substantially the same, its shares of common stock could
not be listed on the New York Stock Exchange. As a result, the
Merger cannot be consummated unless this requirement of Article VII
is modified.
Approval by Independent Majority of Shareholders. Article VII
provides that, in the case of any merger or consolidation of
Commercial into a Major Stockholder or alienation of all or a
substantial part of the assets of Commercial to a Major
Stockholder, the shareholder vote approving the transaction must
also include the affirmative vote of a majority of the shares of
capital stock entitled to vote that are not deemed owned by the
Major Stockholder. Each of Commercial's directors has entered into
an agreement with Hibernia under which (among other things) the
director has agreed, subject to certain conditions, to vote the
shares of Commercial Common Stock owned by such director in favor
of the Merger (the "Joinder Agreement"). As a result of these
agreements, Hibernia may be deemed to be the beneficial owner of
the shares of Commercial Common Stock that are deemed under Article
VII to be owned by such directors and, therefore, Hibernia may be
deemed to be a Major Stockholder of Commercial for purposes of
Article VII. As such, unless this provision of Article VII is
amended, the Merger would require the affirmative vote of a
majority of the shares of Commercial Common Stock not deemed owned
by Hibernia. Amendment of this provision, along with the
provisions of Article VII requiring the affirmative vote of the
holders of 75% of the total voting power of Commercial to approve
the Merger, will mean that directors of Commercial, along with
members of their families who are expected to vote in favor of
approving the Merger, will hold sufficient Commercial Common Stock
to approve the Merger.
75% Vote Requirement for Amendment. Article VII provides that
any amendment to the Articles of Incorporation of Commercial that
would amend or repeal any provision of Articles IV, VI and VII must
be approved by the affirmative vote of holders of at least 75% of
the outstanding shares of Commercial Common Stock. The Amendment
would eliminate this provision; however, Article IX(B) of
Commercial's Articles of Incorporation similarly requires the
affirmative vote of 75% of the total voting power of Commercial in
order to amend Articles IV, VI and VII (and, in addition, Article
IX).
Reduction of Vote Required to Approve Merger
The Amendment expressly provides that the shareholders may
approve a merger of Commercial with or into Hibernia by the
affirmative vote of a majority of the voting power of Commercial
present or represented at any annual or special meeting called for
that purpose. The Amendment further clarifies that the Merger may
be approved by such a vote, notwithstanding that the merger may
result in the amendment of all or any portion of the Articles of
Incorporation of Commercial, and notwithstanding the provisions of
Articles III, IV, VI and IX prohibiting amendments of those
articles unless first approved by, in the case of Article III, two-
thirds of the shareholders, and in the case of Articles IV, VI, VII
and IX, 75% of the total voting power of Commercial. The purpose
of these provisions is to clarify that a majority of the voting
power present or represented at the Special Meeting is permitted to
approve the Merger and that no other action on the part of the
shareholders will be necessary for the Merger to take effect.
Reasons for Approval
One of the purposes of Article VII and certain other
provisions of Commercial's Articles of Incorporation is to render
more difficult the accomplishment by Commercial of certain major
transactions, such as any merger, exchange, or sale of all or
substantially all of Commercial's assets, as a means of
discouraging unwanted takeover attempts. The proposed Merger of
Commercial with and into Hibernia has been determined by
Commercial's Board to be in the best interests of Commercial and
its shareholders for the reasons stated under "PROPOSED MERGER-
Background of and Reasons for Merger." Therefore, Commercial's
Board recommends adoption of the Amendment in order to facilitate
approval of the Merger. While it might be possible to delete only
the portions of Article VII that create significant impediments to
the Merger, Commercial's Board nevertheless recommends deletion of
the entirety of Article VII as currently in effect, and adoption of
the amended Article VII, in order to facilitate approval of the
Merger. Members of Commercial's Board, along with members of their
families who are expected to vote in favor of approval of the
Merger, own 63.5% of the outstanding Commercial Common Stock and,
therefore, will hold, if the Amendment is approved, sufficient
Commercial Common Stock to approve the Merger at the Special
Meeting if the Amendment is approved.
If the Amendment is adopted, the protections of the existing
Article VII against unwanted takeover attempts will no longer be in
place. In such event, if the Merger then is not subsequently
consummated, it is expected that Commercial's Board would consider
the desirability of recommending to Commercial's shareholders re-
adoption of the same or similar provisions.
Required Vote
Under the provisions of Article VII and Article IX(B) of
Commercial's Articles of Incorporation, approval of the Amendment
requires the affirmative vote of the holders of at least 75% of all
the outstanding shares of Commercial Common Stock. Directors and
executive officers of Commercial and their affiliates having
beneficial ownership derived from voting power, as of the Record
Date, of approximately 22.6% of the Commercial Common Stock have
indicated that they intend to vote for the approval of the
Amendment. An additional approximately 41.10% of the outstanding
Commercial Common Stock is owned by members of the directors'
families who are expected to vote in favor of the Amendment.
THE BOARD OF DIRECTORS OF COMMERCIAL UNANIMOUSLY RECOMMENDS
THAT YOU VOTE "FOR" THE AMENDMENT TO THE ARTICLES OF INCORPORATION.
ADJOURNMENT OF SPECIAL MEETING
In the event a sufficient number of proxies to approve both
the Amendment and Merger are not received by the date of the
Special Meeting, the persons named as proxies may propose to
adjourn the Special Meeting one or more times to permit further
solicitation of proxies. Any such adjournment will require the
affirmative vote of a majority of the Commercial Common Stock
present or represented by proxy at the Special Meeting. In order
to permit proxies that have been received by the Board of Directors
of Commercial at the time of the Special Meeting to be voted, if
necessary, for adjournment under the circumstances described above,
the Board of Directors of Commercial is submitting the question of
adjournment to permit further solicitation of proxies to approve
the Amendment and Merger as a separate matter for consideration by
Commercial's shareholders. Commercial will pay the costs of any
additional solicitation and of any adjourned session of the Special
Meeting.
THE BOARD OF DIRECTORS OF COMMERCIAL UNANIMOUSLY RECOMMENDS
THAT COMMERCIAL'S SHAREHOLDERS VOTE FOR APPROVAL OF ADJOURNMENT, IF
NECESSARY, TO PERMIT FURTHER SOLICITATION OF PROXIES.
PRO FORMA FINANCIAL INFORMATION
The information in the column titled "Hibernia" on the pro
forma balance sheet and income statement are summarized from
Hibernia's audited financial statements in its Annual Report on
Form 10-K for the year ended December 31, 1993. The information
contained in the columns titled "Commercial Bancshares, Inc.",
"Bastrop National Bank", "First Bancorp of Louisiana, Inc." and
"First Continental Bancshares, Inc." are based on December 31,
1993, 1992 and 1991 financial statements of those entities. The
pro forma financial statements do not purport to be indicative of
the results that actually would have occurred if the pending
transactions had occurred on the dates indicated or that may be
obtained in the future.
On November 4, 1993, Hibernia announced that it had reached an
agreement to merge with First Bancorp of Louisiana, Inc. ("First
Bancorp"). First Bancorp is a bank holding company headquartered
in Monroe, Louisiana that owns First National Bank of West Monroe
and Southern National Bank at Tallulah. As of December 31, 1993,
First Bancorp had consolidated assets of approximately $225 million
and operated six banking branches in Monroe and Tallulah.
Shareholders of First Bancorp will receive in the merger shares of
Hibernia Common Stock valued at approximately $36 million, which
amount may be increased under certain circumstances.
On November 4, 1993, Hibernia announced that it had reached an
agreement to merge with Bastrop National Bank ("Bastrop"). Bastrop
is a national bank headquartered in Bastrop, Louisiana which
operates four branches in Morehouse Parish and had, as of December
31, 1993, total assets of approximately $131 million. Shareholders
of Bastrop will receive in the merger shares of Hibernia Common
Stock valued at $21.5 million.
On December 6, 1993, Hibernia announced that it had reached an
agreement to merge with First Continental Bancshares, Inc. ("First
Continental"). First Continental is a bank holding company
headquartered in Jefferson Parish, Louisiana and owns all of the
stock of First National Bank of Jefferson Parish ("FNJ"). As of
December 31, 1993, First Continental reported consolidated assets
of approximately $400 million, and FNJ operated eight branches in
Jefferson Parish. The transaction will be effected through an
exchange of Hibernia Common Stock for the equity securities of
First Continental. Based on the market price of Hibernia Common
Stock on the date of this Proxy Statement-Prospectus, the aggregate
value of the Hibernia Common Stock to be exchanged in this merger
would be approximately $33.2 million.
Each of these transactions will be accounted for as a pooling
of interests.
The mergers with First Bancorp, Bastrop and First Continental
are subject to the satisfaction of certain conditions similar to
those described herein with regard to the Merger. There can be no
assurance that any or all of such proposed mergers will occur, or
that the timing of the consummation of such mergers will be as
assumed in the Pro Forma Financial Statements.
The following pro forma financial statements reflect
Hibernia's pending mergers as described in its public reports and
press releases, giving effect to the assumptions and adjustments
described in the accompanying notes.
PRO FORMA COMBINED SELECTED FINANCIAL INFORMATION
(Unaudited)
The following table sets forth certain unaudited pro forma combined
financial information for Hibernia Corporation and Commercial
Bancshares, Inc. This table is based on and should be read in
conjunction with the historical financial statements and related
notes of Hibernia Corporation, incorporated by reference to this
Proxy Statement - Prospectus, and Commercial Bancshares, Inc.,
contained elsewhere in this Proxy Statement - Prospectus. The
table also gives effect to other probable mergers to which Hibernia
Corporation is a party, as discussed in Note C to the pro forma
combined financial statements. These mergers include Bastrop
National Bank, First Bancorp of Louisiana, Inc. and First
Continental Bancshares, Inc. The pro forma information, which
reflects the mergers using the pooling of interests method of
accounting, is presented for informational purposes only and should
not be construed as indicative of the actual operations that would
have occurred had the mergers been consummated at the beginning of
the periods indicated below or which may occur after the mergers
are consummated. The pro forma information gives effect to the
issuance of 2,493,333 shares of Hibernia Corporation common stock
for all the outstanding shares of Commercial Bancshares, Inc. and
12,090,413 shares of Hibernia Corporation common stock for all the
outstanding shares of Bastrop National Bank, First Bancorp of
Louisiana, Inc. and First Continental Bancshares, Inc. in each of
the periods presented.
PRO FORMA HIBERNIA CORPORATION*
PRO FORMA COMBINED SELECTED FINANCIAL INFORMATION
</TABLE>
<TABLE>
<CAPTION>
Year Ended December 31
Unaudited ($ in thousands, except per share amounts) 1993 1992 1991
<S> <C> <C> <C>
Net interest income $202,164 $203,816 $240,189
Net income (loss) from continuing operations 49,617 (6,326) (143,127)
Per share:
Net income (loss) from continuing operations 0.58 (0.20) (4.68)
Cash dividends 0.03 - 0.15
Book value 5.14 4.49 6.80
SELECTED PERIOD-END BALANCES
Debt - 11,814 101,822
Total assets 4,960,932 4,914,279 6,192,821
* Includes Hibernia Corporation and Commercial Bancshares, Inc.
</TABLE>
TOTAL HIBERNIA CORPORATION**
PRO FORMA COMBINED SELECTED FINANCIAL INFORMATION
<TABLE>
<CAPTION>
Year Ended December 31
Unaudited ($ in thousands, except per share amounts) 1993 1992 1991
<S> <C> <C> <C>
Net interest income $234,064 $234,398 $263,348
Net income (loss) from continuing operations 55,391 (1,752) (141,367)
Per share:
Net income (loss) from continuing operations 0.57 (0.04) (3.31)
Cash dividends 0.03 - 0.15
Book value 4.88 4.32 5.32
SELECTED PERIOD-END BALANCES
Debt 4,262 25,710 127,566
Total assets 5,686,883 5,592,710 6,862,752
** Includes Hibernia Corporation, Commercial Bancshares, Inc., Bastrop National Bank,
First Bancorp of Louisiana, Inc. and First Continental Bancshares, Inc.
</TABLE>
PRO FORMA COMBINED BALANCE SHEET
(Unaudited)
The following unaudited pro forma combined balance sheet combines
the historical balance sheets of Hibernia Corporation and
Commercial Bancshares, Inc. as if the merger had been effective on
December 31, 1993. This unaudited pro forma combined balance sheet
should be read in conjunction with the historical financial
statements and related notes of Hibernia Corporation, incorporated
by reference to this Proxy Statement - Prospectus, and Commercial
Bancshares, Inc., contained elsewhere in this Proxy Statement -
Prospectus. The unaudited proforma combined balance sheet also
gives effect to other probable mergers to which Hibernia
Corporation is a party, as discussed in Note C to the pro forma
combined financial statements. These mergers include Bastrop
National Bank, First Bancorp of Louisiana, Inc. and First
Continental Bancshares, Inc. and have been included in the pro
forma combined balance sheet as if the mergers had been effective
on December 31, 1993.
HIBERNIA CORPORATION
PRO FORMA COMBINED BALANCE SHEET
December 31, 1993
<TABLE>
<CAPTION>
PRO FORMA
COMMERCIAL PRO HIBERNIA
HIBERNIA BANCSHARES FORMA CORPORATION
Unaudited ($ in thousands) CORPORATION INC. ADJ. (WITH C.B.I.)
<S> <C> <C> <C> <C>
ASSETS
Cash and due from banks $216,675 $8,583 $225,258
Interest-bearing time deposits in domestic banks - 7 7
Federal funds sold and securities purchased
under agreements to resell 220,000 2,850 ($3,408)B 219,442
Securities available for sale 394,640 33,270 427,910
Securities held to maturity 1,526,231 58,502 1,584,733
Loans, net of unearned income 2,328,119 58,916 2,387,035
Reserve for possible loan losses (159,143) (1,326) (160,469)
Loans, net 2,168,976 57,590 2,226,566
Bank premises and equipment 81,291 2,936 84,227
Customers' acceptance liability 11,800 - 11,800
Other assets 175,970 5,019 180,989
TOTAL ASSETS $4,795,583 $168,757 ($3,408) $4,960,932
LIABILITIES
Deposits:
Demand, noninterest-bearing $812,693 $23,084 $835,777
Interest-bearing 3,273,342 125,809 3,399,151
Total Deposits 4,086,035 148,893 4,234,928
Federal funds purchased and securities sold under
agreements to repurchase 137,986 - 137,986
Liability on acceptances 11,800 - 11,800
Payables arising from securities transactions
not yet settled 50,875 - 50,875
Other liabilities 80,515 2,426 ($63)B 82,878
Debt - 3,345 (3,345)B -
TOTAL LIABILITIES 4,367,211 154,664 (3,408) 4,518,467
SHAREHOLDERS' EQUITY
Preferred Stock - - -
Common Stock 160,535 629 4,158 A 165,322
Surplus 404,745 591 (5,312)A 400,024
Treasury Stock - (1,154) 1,154 A -
ESOP commitment - - -
Retained earnings (deficit) (147,160) 13,968 (133,192)
Unrealized gain on securities available for sale 10,252 59 10,311
TOTAL SHAREHOLDERS' EQUITY 428,372 14,093 0 442,465
TOTAL LIABILITIES AND SHAREHOLDERS' EQUITY $4,795,583 $168,757 ($3,408) $4,960,932
See notes to Pro Forma Combined Financial Statements.
</TABLE>
HIBERNIA CORPORATION
PRO FORMA COMBINED BALANCE SHEET
December 31, 1993
(con't.)
<TABLE>
<CAPTION>
PRO FORMA FIRST FIRST TOTAL
HIBERNIA BASTROP BANCORP CONTINENTAL PRO PRO FORMA
CORPORATION NATIONAL OF LOUISIANA, BANCSHARES, FORMA HIBERNIA
Unaudited ($ in thousands) (WITH C.B.I.) BANK INC. INC. ADJ. CORPORATION
<S> <C> <C> <C> <C> <C> <C>
ASSETS
Cash and due from banks $225,258 $5,494 $10,963 $13,141 $254,856
Interest-bearing time deposits in domestic banks 7 - 1,077 - 1,084
Federal funds sold and securities purchased
under agreements to resell 219,442 10,525 15,775 22,000 ($19,114)E 235,718
(12,910)D
Securities available for sale 427,910 76,710 94,396 95,056 3,073 F 697,145
Securities held to maturity 1,584,733 - - 32,651 (614)E 1,616,770
Loans, net of unearned income 2,387,035 35,482 99,775 223,093 2,745,385
Reserve for possible loan losses (160,469) (384) (1,413) (6,590) (168,856)
Loans, net 2,226,566 35,098 98,362 216,503 2,576,529
Bank premises and equipment 84,227 1,284 2,002 6,051 93,564
Customers' acceptance liability 11,800 - - - 11,800
Other assets 180,989 1,411 2,507 14,510 199,417
TOTAL ASSETS $4,960,932 $130,522 $225,082 $399,912 ($29,565) $5,686,883
LIABILITIES
Deposits:
Demand, noninterest-bearing $835,777 $16,483 $33,067 $60,999 $946,326
Interest-bearing 3,399,151 98,558 166,468 284,351 3,948,528
Total Deposits 4,234,928 115,041 199,535 345,350 4,894,854
Federal funds purchased and securities sold under
agreements to repurchase 137,986 - 2,021 13,234 153,241
Liability on acceptances 11,800 - - - 11,800
Payables arising from securities transactions
not yet settled 50,875 - - - 50,875
Other liabilities 82,878 720 1,186 12,047 ($4,338)E 92,493
Debt - - 8,752 11,884 (15,090)E 4,262
(800)C
(484)C
TOTAL LIABILITIES 4,518,467 115,761 211,494 382,515 (20,712) 5,207,525
SHAREHOLDERS' EQUITY
Preferred Stock - - - 11,422 (11,422)D -
Common Stock 165,322 300 1,364 2,145 18,724 C 188,536
681 D
Surplus 400,024 1,000 6,744 2,741 (19,197)C 389,143
(2,169)D
Treasury Stock - - (1,639) (118) 1,757 C -
ESOP commitment - - (400) - (400)
Retained earnings (deficit) (133,192) 13,461 7,519 400 (300)E (112,112)
Unrealized gain on securities available for sale 10,311 - - 807 3,073 F 14,191
TOTAL SHAREHOLDERS' EQUITY 442,465 14,761 13,588 17,397 (8,853) 479,358
TOTAL LIABILITIES AND SHAREHOLDERS' EQUITY $4,960,932 $130,522 $225,082 $399,912 ($29,565) $5,686,883
See notes to Pro Forma Combined Financial Statements.
</TABLE>
PRO FORMA COMBINED STATEMENTS OF INCOME
(Unaudited)
The following unaudited pro forma combined statements of income for
the years ended December 31, 1993, 1992, and 1991 combine the
historical statements of income of Hibernia Corporation and
Commercial Bancshares, Inc. as if the merger had been effective on
January 1, 1991. These unaudited pro forma combined statements of
income should be read in conjunction with the historical financial
statements and related notes of Hibernia Corporation, incorporated
by reference to this Proxy Statement - Prospectus, and Commercial
Bancshares, Inc., contained elsewhere in this Proxy Statement -
Prospectus. The cost associated with the merger, estimated to be
approximately $1.3 million, will be accounted for as a current
period expense upon consummation of the merger and has not been
reflected in the pro forma combined statements of income. The
unaudited pro forma combined statements of income also give effect
to other probable mergers to which Hibernia Corporation is a party,
as discussed in Note C to the pro forma combined financial
statements. These mergers include Bastrop National Bank, First
Bancorp of Louisiana, Inc. and First Continental Bancshares, Inc.
and have been included in the pro forma combined statements of
income as if the mergers had been effective on January 1, 1991.
HIBERNIA CORPORATION
PRO FORMA COMBINED STATEMENT OF INCOME
Year Ended December 31, 1993
<TABLE>
<CAPTION>
PRO FORMA
COMMERCIAL HIBERNIA
HIBERNIA BANCSHARES, CORPORATION
Unaudited ($ in thousands, except per share data) CORPORATION INC. (WITH C.B.I.)
<S> <C> <C> <C>
Interest Income
Interest and fees on loans $185,378 $5,479 $190,857
Interest on securities:
U.S. government securities and obligations of
U.S. government agencies 105,939 5,001 110,940
Obligations of states and political subdivisions - 42 42
Trading account interest 33 - 33
Interest on time deposits in domestic banks 194 1 195
Interest on federal funds sold and securities
purchased under agreements to resell 8,186 180 8,366
Total Interest Income 299,730 10,703 310,433
Interest Expense
Interest on deposits 100,092 3,992 104,084
Interest on federal funds purchased and
securities sold under agreements to repurchase 3,654 - 3,654
Interest on debt and other 279 252 531
Total Interest Expense 104,025 4,244 108,269
Net Interest Income 195,705 6,459 202,164
Provision for possible loan losses (6,200) 75 (6,125)
Net Interest Income After Provision for
Possible Loan Losses 201,905 6,384 208,289
Noninterest Income
Trust fees 12,692 - 12,692
Service charges on deposits 30,046 820 30,866
Other service, collection and exchange charges 15,768 176 15,944
Gain on settlement of acquired loans 1,308 - 1,308
Other operating income 7,403 67 7,470
Securities gains, net - - -
Total Noninterest Income 67,217 1,063 68,280
Noninterest Expense
Salaries and employee benefits 83,364 2,404 85,768
Occupancy expense, net 20,611 401 21,012
Equipment expense 11,043 392 11,435
Data processing expense 16,504 21 16,525
Foreclosed property expense 2,188 (178) 2,010
Provision for data processing enhancements 11991 - 11,991
Other operating expense 73,775 1,938 75,713
Total Noninterest Expense 219,476 4,978 224,454
Income Before Income Taxes and
Cumulative Effect of Accounting Change 49,646 2,469 52,115
Income tax expense 1,696 802 2,498
Income from Continuing Operations $47,950 $1,667 $49,617
Pro Forma Weighted Average Common Shares 83,175,129 2,493,333 85,668,462
Pro Forma Income Per Common Share
from Continuing Operations (H) $0.58 * $0.58
See notes to Pro Forma Combined Financial Statements.
*Historical
</TABLE>
HIBERNIA CORPORATION
PRO FORMA COMBINED STATEMENT OF INCOME
Year Ended December 31, 1993
(con't.)
<TABLE>
<CAPTION>
PRO FORMA FIRST FIRST TOTAL
HIBERNIA BASTROP BANCORP CONTINENTAL PRO PRO FORMA
CORPORATION NATIONAL OF LOUISIANA, BANCSHARES, FORMA HIBERNIA
Unaudited ($ in thousands, except per share data) (WITH C.B.I.) BANK INC. INC. ADJ. CORPORATION
<S> <C> <C> <C> <C> <C>
Interest Income
Interest and fees on loans $190,857 $3,183 $7,470 $22,636 $224,146
Interest on securities:
U.S. government securities and obligations of
U.S. government agencies 110,940 4,312 4,678 6,890 126,820
Obligations of states and political subdivisions 42 630 537 13 1,222
Trading account interest 33 - - - 33
Interest on time deposits in domestic banks 195 - 100 - 295
Interest on federal funds sold and securities
purchased under agreements to resell 8,366 200 207 446 9,219
Total Interest Income 310,433 8,325 12,992 29,985 361,735
Interest Expense
Interest on deposits 104,084 3,378 4,308 9,230 121,000
Interest on federal funds purchased and
securities sold under agreements to repurchase 3,654 - 59 289 4,002
Interest on debt and other 531 8 377 1,753 2,669
Total Interest Expense 108,269 3,386 4,744 11,272 127,671
Net Interest Income 202,164 4,939 8,248 18,713 234,064
Provision for possible loan losses (6,125) 28 (235) 725 (5,607)
Net Interest Income After Provision for
Possible Loan Losses 208,289 4,911 8,483 17,988 239,671
Noninterest Income
Trust fees 12,692 - 7 611 13,310
Service charges on deposits 30,866 513 803 2,755 34,937
Other service, collection and exchange charges 15,944 138 470 815 17,367
Gain on settlement of acquired loans 1,308 - - - 1,308
Other operating income 7,470 47 136 578 (905)G 7,326
Securities gains, net - 51 90 24 165
Total Noninterest Income 68,280 749 1,506 4,783 (905) 74,413
Noninterest Expense
Salaries and employee benefits 85,768 1,451 3,211 8,087 98,517
Occupancy expense, net 21,012 358 660 727 22,757
Equipment expense 11,435 93 304 745 12,577
Data processing expense 16,525 14 200 755 (741)G 16,753
Foreclosed property expense 2,010 - (88) 5,213 7,135
Provision for data processing enhancements 11,991 - - - 11,991
Other operating expense 75,713 915 1,966 5,174 (164)G 83,604
Total Noninterest Expense 224,454 2,831 6,253 20,701 (905) 253,334
Income Before Income Taxes and
Cumulative Effect of Accounting Change 52,115 2,829 3,736 2,070 0 60,750
Income tax expense 2,498 779 1,030 1,052 5,359
Income from Continuing Operations $49,617 $2,050 $2,706 $1,018 $0 $55,391
Pro Forma Weighted Average Common Shares 85,668,462 2,866,667 4,800,000 4,423,746 97,758,875
Pro Forma Income Per Common Share
from Continuing Operations (H) $0.58 $0.57
See notes to Pro Forma Combined Financial Statements.
*Historical
</TABLE>
HIBERNIA CORPORATION
PRO FORMA COMBINED STATEMENT OF INCOME
Year Ended December 31, 1992
<TABLE>
<CAPTION>
PRO FORMA
COMMERCIAL HIBERNIA
HIBERNIA BANCSHARES, CORPORATION
Unaudited ($ in thousands, except per share data) CORPORATION INC. (WITH C.B.I.)
<S> <C> <C> <C>
Interest Income
Interest and fees on loans $253,183 $6,489 $259,672
Interest on securities:
U.S. government securities and obligations of
U.S. government agencies 89,131 5,619 94,750
Obligations of states and political subdivisions 3 70 73
Trading account interest 99 - 99
Interest on time deposits in domestic banks 223 4 227
Interest on federal funds sold and securities
purchased under agreements to resell 14,095 230 14,325
Total Interest Income 356,734 12,412 369,146
Interest Expense
Interest on deposits 141,502 5,497 146,999
Interest on federal funds purchased and
securities sold under agreements to repurchase 6,515 - 6,515
Interest on debt and other 11,439 377 11,816
Total Interest Expense 159,456 5,874 165,330
Net Interest Income 197,278 6,538 203,816
Provision for possible loan losses 66,275 150 66,425
Net Interest Income After Provision for
Possible Loan Losses 131,003 6,388 137,391
Noninterest Income
Trust fees 12,263 2 12,265
Service charges on deposits 31,870 713 32,583
Other service, collection and exchange charges 13,928 183 14,111
Gain on settlement of acquired loans 4,151 - 4,151
Loss on planned sale of Texas bank (2,934) - (2,934)
Other operating income 9,972 22 9,994
Securities gains, net 17,190 44 17,234
Total Noninterest Income 86,440 964 87,404
Noninterest Expense
Salaries and employee benefits 86,141 2,565 88,706
Occupancy expense, net 23,275 407 23,682
Equipment expense 13,447 387 13,834
Data processing expense 17,477 22 17,499
Foreclosed property expense 16,302 (124) 16,178
Other operating expense 68,716 1,868 70,584
Total Noninterest Expense 225,358 5,125 230,483
Income (Loss) Before Income Taxes and
Extraordinary Items (7,915) 2,227 (5,688)
Income tax expense - 638 638
Income (Loss) from Continuing Operations ($7,915) $1,589 ($6,326)
Pro Forma Weighted Average Common Shares 29,608,279 2,493,333 32,101,612
Pro Forma Income (Loss) Per Common Share
from Continuing Operations (H) ($0.27)* ($0.20)
See notes to Pro Forma Combined Financial Statements.
*Historical
</TABLE>
HIBERNIA CORPORATION
PRO FORMA COMBINED STATEMENT OF INCOME
Year Ended December 31, 1992
(con't.)
<TABLE>
<CAPTION>
PRO FORMA FIRST FIRST TOTAL
HIBERNIA BASTROP BANCORP CONTINENTAL PRO PRO FORMA
CORPORATION NATIONAL OF LOUISIANA, BANCSHARES, FORMA HIBERNIA
Unaudited ($ in thousands, except per share data) (WITH C.B.I.) BANK INC. INC. ADJ. CORPORATION
<S> <C> <C> <C> <C> <C>
Interest Income
Interest and fees on loans $259,672 $3,410 $6,286 $24,612 $293,980
Interest on securities:
U.S. government securities and obligations of
U.S. government agencies 94,750 4,775 4,940 7,017 111,482
Obligations of states and political subdivisions 73 572 555 2 1,202
Trading account interest 99 - - - 99
Interest on time deposits in domestic banks 227 2 132 - 361
Interest on federal funds sold and securities
purchased under agreements to resell 14,325 178 146 549 15,198
Total Interest Income 369,146 8,937 12,059 32,180 422,322
Interest Expense
Interest on deposits 146,999 3,743 4,737 12,169 167,648
Interest on federal funds purchased and
securities sold under agreements to repurchase 6,515 4 69 322 6,910
Interest on debt and other 11,816 11 186 1,353 13,366
Total Interest Expense 165,330 3,758 4,992 13,844 187,924
Net Interest Income 203,816 5,179 7,067 18,336 234,398
Provision for possible loan losses 66,425 40 710 1,152 68,327
Net Interest Income After Provision for
Possible Loan Losses 137,391 5,139 6,357 17,184 166,071
Noninterest Income
Trust fees 12,265 - 7 577 12,849
Service charges on deposits 32,583 481 661 2,726 36,451
Other service, collection and exchange charges 14,111 179 523 932 15,745
Gain on settlement of acquired loans 4,151 - - - 4,151
Loss on planned sale of Texas bank (2,934) - - - (2,934)
Other operating income 9,994 31 6 640 (911)G 9,760
Securities gains, net 17,234 22 60 20 17,336
Total Noninterest Income 87,404 713 1,257 4,895 (911) 93,358
Noninterest Expense
Salaries and employee benefits 88,706 1,336 2,404 7,034 99,480
Occupancy expense, net 23,682 351 634 726 25,393
Equipment expense 13,834 133 308 744 15,019
Data processing expense 17,499 14 205 747 (739)G 17,726
Foreclosed property expense 16,178 - (30) 6,554 22,702
Other operating expense 70,584 985 1,550 5,592 (172)G 78,539
Total Noninterest Expense 230,483 2,819 5,071 21,397 (911) 258,859
Income (Loss) Before Income Taxes and
Extraordinary Items (5,688) 3,033 2,543 682 0 570
Income tax expense 638 854 598 232 2,322
Income (Loss) from Continuing Operations ($6,326) $2,179 $1,945 $450 $0 ($1,752)
Pro Forma Weighted Average Common Shares 32,101,612 2,866,667 4,800,000 4,423,746 44,192,025
Pro Forma Income (Loss) Per Common Share
from Continuing Operations (H) ($0.20) ($0.04)
See notes to Pro Forma Combined Financial Statements.
*Historical
</TABLE>
HIBERNIA CORPORATION
PRO FORMA COMBINED STATEMENT OF INCOME
Year Ended December 31, 1991
<TABLE>
<CAPTION>
PRO FORMA
COMMERCIAL HIBERNIA
HIBERNIA BANCSHARES, CORPORATION
Unaudited ($ in thousands, except per share data) CORPORATION INC. (WITH C.B.I.)
<S> <C> <C> <C>
Interest Income
Interest and fees on loans $451,675 $7,857 $459,532
Interest on securities:
U.S. government securities and obligations of
U.S. government agencies 114,629 6,002 120,631
Obligations of states and political subdivisions 4,970 229 5,199
Trading account interest 70 - 70
Interest on time deposits in domestic banks 100 61 161
Interest on federal funds sold and securities
purchased under agreements to resell 9,285 292 9,577
Total Interest Income 580,729 14,441 595,170
Interest Expense
Interest on deposits 317,780 8,216 325,996
Interest on federal funds purchased and
securities sold under agreements to repurchase 16,177 - 16,177
Interest on debt and other 12,173 635 12,808
Total Interest Expense 346,130 8,851 354,981
Net Interest Income 234,599 5,590 240,189
Provision for possible loan losses 178,330 10 178,340
Net Interest Income After Provision for
Possible Loan Losses 56,269 5,580 61,849
Noninterest Income
Trust fees 14,346 2 14,348
Service charges on deposits 34,779 754 35,533
Other service, collection and exchange charges 19,938 218 20,156
Credit card income 5,251 - 5,251
Gain on settlement of acquired loans 9,043 - 9,043
Other operating income 8,512 27 8,539
Securities gains, net 17,801 22 17,823
Total Noninterest Income 109,670 1,023 110,693
Noninterest Expense
Salaries and employee benefits 115,173 2,510 117,683
Occupancy expense, net 28,785 411 29,196
Equipment expense 13,979 453 14,432
Data processing expense 12,548 17 12,565
Foreclosed property expense 24,854 244 25,098
Credit card expense 3,136 - 3,136
Other operating expense 110,679 1,935 112,614
Total Noninterest Expense 309,154 5,570 314,724
Income (Loss) Before Minority Interests (143,215) 1,033 (142,182)
Less: Minority interest - - -
Income (Loss) Before Income Taxes,
Extraordinary Item and Cumulative Effect
of Accounting Change (143,215) 1,033 (142,182)
Income tax expense 782 163 945
Income (Loss) from Continuing Operations ($143,997) $870 ($143,127)
Pro Forma Weighted Average Common Shares 28,116,938 2,493,333 30,610,271
Pro Forma Income (Loss) Per Common Share
from Continuing Operations (H) ($5.12)* ($4.68)
See notes to Pro Forma Combined Financial Statements.
*Historical
</TABLE>
HIBERNIA CORPORATION
PRO FORMA COMBINED STATEMENT OF INCOME
Year Ended December 31, 1991
(con't.)
<TABLE>
<CAPTION>
PRO FORMA FIRST FIRST TOTAL
HIBERNIA BASTROP BANCORP CONTINENTAL PRO PRO FORMA
CORPORATION NATIONAL OF LOUISIANA, BANCSHARES, FORMA HIBERNIA
Unaudited ($ in thousands, except per share data) (WITH C.B.I.) BANK INC. INC. ADJ. CORPORATION
<S> <C> <C> <C> <C> <C>
Interest Income
Interest and fees on loans $459,532 $3,648 $5,845 $26,672 $495,697
Interest on securities:
U.S. government securities and obligations of
U.S. government agencies 120,631 4,694 4,743 5,861 135,929
Obligations of states and political subdivisions 5,199 495 574 6 6,274
Trading account interest 70 - - - 70
Interest on time deposits in domestic banks 161 37 324 - 522
Interest on federal funds sold and securities
purchased under agreements to resell 9,577 470 386 984 11,417
Total Interest Income 595,170 9,344 11,872 33,523 649,909
Interest Expense
Interest on deposits 325,996 5,150 6,580 17,645 355,371
Interest on federal funds purchased and
securities sold under agreements to repurchase 16,177 - 74 543 16,794
Interest on debt and other 12,808 19 319 1,250 14,396
Total Interest Expense 354,981 5,169 6,973 19,438 386,561
Net Interest Income 240,189 4,175 4,899 14,085 263,348
Provision for possible loan losses 178,340 17 432 1,800 180,589
Net Interest Income After Provision for
Possible Loan Losses 61,849 4,158 4,467 12,285 82,759
Noninterest Income
Trust fees 14,348 - 6 490 14,844
Service charges on deposits 35,533 442 605 2,629 39,209
Other service, collection and exchange charges 20,156 162 573 884 21,775
Credit card income 5,251 - 2 160 5,413
Gain on settlement of acquired loans 9,043 - - - 9,043
Other operating income 8,539 37 - 368 (799)G 8,145
Securities gains, net 17,823 (278) (17) 179 17,707
Total Noninterest Income 110,693 363 1,169 4,710 (799) 116,136
Noninterest Expense
Salaries and employee benefits 117,683 1,231 2,195 6,954 128,063
Occupancy expense, net 29,196 350 378 899 30,823
Equipment expense 14,432 85 211 851 15,579
Data processing expense 12,565 17 194 665 (658)G 12,783
Foreclosed property expense 25,098 - (2) 3,685 28,781
Credit card expense 3,136 - - - 3,136
Other operating expense 112,614 799 1,317 4,469 (141)G 119,058
Total Noninterest Expense 314,724 2,482 4,293 17,523 (799) 338,223
Income (Loss) Before Minority Interests (142,182) 2,039 1,343 (528) 0 (139,328)
Less: Minority interest - - - 311 311
Income (Loss) Before Income Taxes,
Extraordinary Item and Cumulative Effect
of Accounting Change (142,182) 2,039 1,343 (839) 0 (139,639)
Income tax expense 945 478 305 - 1,728
Income (Loss) from Continuing Operations ($143,127) $1,561 $1,038 ($839) $0 ($141,367)
Pro Forma Weighted Average Common Shares 30,610,271 2,866,667 4,800,000 4,423,746 42,700,684
Pro Forma Income (Loss) Per Common Share
from Continuing Operations (H) ($4.68) ($3.31)
See notes to Pro Forma Combined Financial Statements.
*Historical
</TABLE>
HIBERNIA CORPORATION
NOTES TO PRO FORMA COMBINED FINANCIAL STATEMENTS
A. Hibernia Corporation will issue common stock with an aggregate
market value at the date of merger of $18.7 million to effect
the merger with Commercial Bancshares, Inc. (Commercial
Bancshares). The Hibernia Corporation common stock is assumed
to have a market value of $7.50 per share resulting in the
issuance of 2,493,333 shares of common stock for all the
outstanding common stock of Commercial Bancshares (exchange
ratio of 8.85). In the event the average of the mean of the
high and low prices of Hibernia Corporation common stock for
the five business days preceding the last trading day
immediately prior to the merger exceeds $7.90 per share,
approximately 2,367,000 of Hibernia Corporation common stock
will be issued for all of the outstanding common stock of
Commercial Bancshares (exchange ratio of 8.40). The stated
value of Hibernia Corporation common stock is $1.92 per share.
In accordance with the pooling of interests method of
accounting, the historical equities of the merged companies
are combined.
B. Hibernia Corporation will use available federal funds sold to
retire Commercial Bancshares, Inc. debt of $3,345,000 and
related accrued interest of $63,000. The retirement of this
debt is not a requirement of the merger.
C. In addition to the Commercial Bancshares, Inc. merger,
Hibernia Corporation is a party to pending mergers with
Bastrop National Bank (Bastrop National), First Bancorp of
Louisiana, Inc. (First Bancorp) and First Continental
Bancshares, Inc. (First Continental). Hibernia Corporation
will issue common stock to effect these mergers in
transactions using the pooling of interests method of
accounting.
It is assumed that prior to these mergers the following debt
and equity instruments of the designated company will be
converted into common stock of the designated company and that
such common stock will then be exchanged for Hibernia
Corporation common stock.
1) $800,000 in First Bancorp convertible subordinated
debentures will be converted to 30,064 shares of First
Bancorp common stock.
2) $484,000 of convertible premium related to First
Continental senior secured notes will be converted to
415,107 shares of First Continental common stock.
The Hibernia Corporation common stock is assumed to have a
market value of $7.50 per share and a stated value of $1.92
per share. In accordance with the pooling of interests method
of accounting, the historical equities of the merged companies
are combined.
Hibernia Mkt Value Stated Value Exchange
Shares of Shares of Shares Ratio
Bastrop National 2,866,667 $21,500,000 $ 5,504,000 9.55
First Bancorp 4,800,000 36,000,000 9,216,000 20.20
First Continental 4,069,125 30,518,000 7,813,000 1.60
Total 11,735,792 $88,018,000 $22,533,000
D. Hibernia Corporation will acquire the outstanding First
Continental preferred stock through the issuance of
approximately $2,660,000 of common stock and payment of
$12,910,000 of cash. The Hibernia Corporation common stock is
assumed to have a market value of $7.50 per share resulting in
the issuance of 354,621 shares. The stated value of Hibernia
Corporation common stock is $1.92 per share. Available
federal funds will be used to fund the cash payment.
E. Hibernia Corporation will use available federal funds sold and
investment securities to retire debt and related accrued
interest and redemption premium. Investment securities of
$614,000, which represent an escrow account previously
established by First Continental, will be used to fund a
portion of the debt retirement.
Redemption
Debt Interest Premium
First Bancorp $ 3,690,000 $ 50,000 $ -
First Continental 11,400,000 4,288,000 300,000
$15,090,000 $4,338,000 $300,000
The retirement of this debt is required by the debt agreement
or the respective merger agreement.
F. To record the effect of the adoption of Statement of Financial
Accounting Standards No. 115, "Accounting for Certain
Investments in Debt and Equity Securities" (SFAS No. 115), for
Bastrop National (increase in value of securities available
for sale of $1,089,000) and for First Bancorp (increase in
value of securities available for sale of $1,984,000).
Hibernia Corporation, Commercial Bancshares and First
Continental adopted SFAS No. 115 effective December 31, 1993.
This entry conforms the accounting policies of all of the
companies.
G. To eliminate intercompany transactions between Hibernia
Corporation and First Continental primarily related to data
processing charges paid by First Continental to Hibernia
Corporation.
H. Hibernia Corporation expects to achieve savings through
reductions in interest expense and operating costs in
connection with the proposed mergers. The savings vary from
merger to merger depending upon Hibernia Corporation's pre-
merger operations in the respective geographic area. The
majority of the savings will be achieved through the
retirement of long-term debt upon merger and consolidation of
certain operations. The extent to which the savings will be
achieved depends, among other things, on the regulatory
environment and economic conditions, and may be affected by
unanticipated changes in business activities, inflation and
certain external factors such as FDIC assessments. Therefore,
there can be no assurance that such savings will be realized.
No adjustment has been included in the unaudited pro forma
financial statements for the anticipated savings.
PROPOSED MERGER
This section of the Proxy Statement describes certain aspects
of the Merger. The following description does not purport to be
complete and is qualified in its entirety by reference to the
Agreement, which is attached as Appendix B to this Proxy Statement-
Prospectus and is incorporated herein by reference. All
shareholders are urged to read the Agreement carefully and in its
entirety.
Background and Reasons for Merger
Background. Commercial held discussions during 1990 with
another financial institution concerning the possibility of a
merger or other business combination. In connection with those
discussions, Commercial first engaged Bank Advisory Group. Those
discussions were terminated because the parties were unable to
agree on the terms of a transaction, including the price payable to
Commercial's shareholders. Following these discussions,
Commercial's Board remained interested in pursuing a merger with a
large financial institution. In 1992, Commercial held discussions
with another financial institution concerning a possible merger and
again retained Bank Advisory Group to assist Commercial in these
discussions. Commercial and this other financial institution
exchanged letters expressing the parties' preliminary intention to
enter into a merger, subject to certain conditions, including the
negotiation and execution of a definitive agreement. The
conditions were not fulfilled and the discussions concerning the
proposed merger were terminated. During the first six months of
1993, Commercial held discussions with several other financial
institutions and continued to retain Bank Advisory Group to provide
financial analysis, but these discussions did not progress beyond
a very preliminary stage.
In June, 1993, Commercial was contacted by Hibernia to discuss
a possible merger. A special meeting of Commercial's Board was
held on July 20, 1993, to consider, inter alia, the terms of a
proposed transaction with Hibernia. At that meeting, the Board
approved entering into an agreement in principle with Hibernia and
the negotiation of a definitive agreement. Commercial's Board
considered a draft of the Agreement at a joint meeting of the
Boards of Directors of Commercial and the Bank held on September
21, 1993. At that meeting, a representative of Bank Advisory Group
presented its opinion, described below, on the fairness of the
transaction to the shareholders of Commercial from a financial
standpoint. This opinion was made subject to the results of Bank
Advisory Group's due diligence review of Hibernia. The Bank
recommended the draft Agreement at the joint meeting. Commercial's
Board reconvened on September 27, 1993, and unanimously approved
the Agreement.
Reasons for the Merger. In reaching its determination that
the Merger is in the best interests of Commercial's shareholders,
Commercial's Board consulted with its advisors, as well as with
Commercial's management, and considered a number of factors,
including, but not limited to, the following:
(a) The amount and type of consideration to be received
by Commercial's shareholders in the Merger;
(b) That the Hibernia Common Stock to be issued in the
Merger will be listed for trading on the NYSE and should
provide Commercial's shareholders with liquidity that is
unavailable to holders of Commercial Common Stock, for which
an active market does not exist.
(c) That Hibernia will offer a wider range of products
and services to the customers and communities served by the
Bank.
(d) That the Merger will allow Commercial's shareholders
to become shareholders of Hibernia, an institution which is
one of the largest bank holding companies headquartered in
Louisiana.
(e) That the Merger is expected generally to be a tax-
free transaction to Commercial and its shareholders (see
"Material Tax Consequences");
(f) That business combinations involving financial
institutions are increasing in the Southeast generally and, in
particular, in Louisiana, that such combinations will likely
intensify the competition for business in Commercial's market
area, and that the current and prospective economic and
regulatory environment and competitive constraints will make
it more difficult for a small independent financial
institution, such as Commercial, to operate as successfully in
the future as it has in the past, since larger institutions
are better able to deal with the additional regulatory burdens
being placed on financial institutions and to spread the
additional costs of compliance over a larger asset base; and
(g) That, pursuant to the Agreement, prior to the
mailing of this Proxy Statement-Prospectus and again within
five (5) days before the Closing Date Commercial must receive
an opinion of Bank Advisory Group that the terms of the
Agreement are fair to Commercial's shareholders from a
financial standpoint (see "Opinion of Financial Advisor").
Commercial's Board did not assign any specific or relative
weight to the foregoing factors in its considerations.
Based on the foregoing, the Board of Directors of Commercial
has unanimously approved the Agreement, believes that the Merger is
in the best interests of the shareholders and recommends that the
shareholders vote FOR the Merger. The Board of Directors has
received from Bank Advisory Group an opinion that the terms of the
Merger are fair, from a financial standpoint, to the common
shareholders of Commercial. See "PROPOSED MERGER--Opinion of
Financial Advisor." Commercial's Board believes that the Merger
will provide significant value to all Commercial shareholders and
will enable them to participate in opportunities for growth that
Commercial's Board believes the Merger makes possible. In
recommending the Merger to the shareholders, Commercial's Board of
Directors considered, among other factors, the financial terms of
the Merger, the liquidity it will afford Commercial's shareholders
and the likelihood of increased competition for Commercial in its
market area.
Terms of the Merger
On the Effective Date, each outstanding share of Commercial
Common Stock (other than shares held by dissenting shareholders)
will be converted into the number of shares of Hibernia Common
Stock determined in accordance with the following formula: ($18.7
million divided by 281,843 (the number of outstanding shares of
Commercial Common Stock) ) divided by the Fair Market Value of
Hibernia Common Stock. The Fair Market Value of the Hibernia
Common Stock will be the average of the high and low trading prices
of the stock for the five trading days prior to the last trading
day immediately preceding the Closing Date. For example, if the
Fair Market Value of the Hibernia Common Stock is $7.00, each share
of Commercial Common Stock will be exchanged for 9.478 shares of
Hibernia Common Stock. In the event the market value of the
Hibernia Common Stock exceeds $7.90, the minimum exchange ratio
will be 8.4 : 1. Therefore, Commercial shareholders are assured of
receiving at least 8.4 shares of Hibernia Common Stock for each
share of Commercial Common Stock owned by them as of the Record
Date. There is no maximum exchange ratio established by the terms
of the Merger.
The Agreement also provides that the aggregate value of
Hibernia Common Stock to be exchanged for Commercial Common Stock
will be increased to $20.7 million from $18.7 million if, prior to
the Closing Date, Hibernia enters into an agreement to merge with
St. Mary Holding Corporation or St. Mary Bank and Trust Company.
Hibernia has no obligation to enter into any agreement with St.
Mary and is not pursuing any discussions in that regard. Hibernia
has no obligation or current intention to enter into such an
agreement, and, therefore, an increase in the purchase price based
upon this provision of the Agreement is not anticipated.
Upon the effectiveness of the Merger, the conversion of shares
of Commercial Common Stock to Hibernia Common Stock will be
automatic, and Commercial shareholders will automatically be
entitled to all of the rights and privileges afforded to Hibernia
shareholders as of such date.
For a discussion of the rights of dissenting shareholders, see
"PROPOSED MERGER--Rights of Dissenting Shareholders."
Opinion of Financial Advisor
Pursuant to an engagement letter dated July 22, 1993,
Commercial retained Bank Advisory Group to act as an independent
financial analyst and advisor to the Board of Directors of
Commercial in connection with the proposed Merger. Bank Advisory
Group, as part of its line of professional services, renders
valuation opinions of banks and bank holding companies in
connection with mergers and acquisitions nationwide.
In connection with the September 21, 1993, meeting of the
Commercial Board, Bank Advisory Group delivered its written opinion
to the Commercial Board to the effect that, as of the date of that
opinion, the terms of the proposed Merger were fair, from a
financial standpoint, to the common shareholders of Commercial,
subject to the completion of certain additional due diligence by
Bank Advisory Group at Hibernia and the Bank (the "September 1993
Opinion"). On November 22, 1993, Bank Advisory Group delivered to
Commercial's Board an updated opinion to the effect that, as of the
date of that opinion, the terms of the Merger were fair, from a
financial standpoint, to the common shareholders of Commercial (the
"November 1993 Opinion"). The November 1993 Opinion deleted the
references in the September 1993 Opinion that made the September
1993 Opinion subject to certain additional due diligence and
included references to updated financial statements of Hibernia and
Commercial and consideration of the First Bancorp and Bastrop
transactions. On __________, 1993, Bank Advisory Group delivered
to Commercial's Board a further updated opinion, for use as
Appendix D to this Proxy Statement-Prospectus, to the effect that,
as of the date of that opinion, the terms of the Merger were fair,
from a financial standpoint, to the common shareholders of
Commercial (the "Proxy Statement Opinion"). The Proxy Statement
Opinion is identical to the November 1993 Opinion other than for
references to consideration by Bank Advisory Group of (i) financial
statements of Commercial and Hibernia that are subsequent in date
to those to which reference is made in the November 1993 Opinion,
and (ii) the proposed transaction between Hibernia and First
Continental Bancshares announced on December 6, 1993. The
September 1993 Opinion, the November 1993 Opinion, and the Proxy
Statement Opinion are sometimes referred to herein as the
"Opinions."
The full text of Bank Advisory Group's Proxy Statement Opinion
is attached hereto as Appendix D and is incorporated herein by
reference. The description of the Proxy Statement Opinion set
forth herein is qualified in its entirety by reference to Appendix
D. Commercial shareholders are urged to read the Proxy Statement
Opinion in its entirety for a description of the procedures
followed, assumptions made, matters considered, and limitations on
the reviews undertaken by Bank Advisory Group. Bank Advisory
Group's Proxy Statement Opinion relates only to the fairness of the
financial terms of the proposed Merger from the perspective of the
common shareholders of Commercial and does not constitute a
recommendation to any Commercial shareholder as to how such
shareholder should vote at the Special Meeting.
In connection with rendering its Opinions, Bank Advisory Group
reviewed, among other things, (i) the Agreement or drafts thereof;
(ii) in the case of the Proxy Statement Opinion, the Registration
Statement on Form S-4 of Hibernia of which this Proxy Statement-
Prospectus is a part; (iii) audited consolidated financial
statements for Commercial for the years ended December 31, 1992 and
1993, and for Hibernia, in Annual Report Form and Form 10-K, for
the years ended December 31, 1991, 1992 and 1993, and unaudited
quarterly financial statements for Hibernia, in its Quarterly
Report to Shareholders and Quarterly Report on Form 10-Q, for the
six months ended June 30, 1993, with respect to the September 1993
Opinion, and for the nine months ended September 30, 1993, with
respect to the November 1993 Opinion; (iv) consolidated financial
statements on form F.R. Y-9C, for Commercial for the six months
ended June 30, 1993, with respect to the September 1993 Opinion,
and for the nine months ended September 30, 1993, with respect to
the November 1993 Opinion, and for Hibernia for the years ended
1990, 1991, and 1992 and for the three months ended March 31, 1993,
with respect to the September 1993 Opinion, and for the nine months
ended September 30, 1993, with respect to the November 1993
Opinion; (v) Reports of Condition and Income for the Bank for the
four years ended December 31, 1990, 1991, 1992 and 1993, and for
the six month period ended June 30, 1993, with respect to the
September 1993 Opinion, and for the nine months ended September 30,
1993, with respect to the November 1993 Opinion, and for HNB for
the four years ended December 31, 1990, 1991, 1992 and 1993 and for
the six month period ended June 30, 1993, with respect to the
September 1993 Opinion, and for the nine months ended September 30,
1993, with respect to the November 1993 Opinion; (vi) the
Prospectus dated December 1992, setting forth the terms of
Hibernia's issuance of Hibernia Common Stock in exchange for debt
restructuring; and (vii) with respect to the November 1993 Opinion,
equity research reports regarding Hibernia prepared by various
analysts who cover the financial institutions sector. In addition,
Bank Advisory Group reviewed certain financial analyses and
forecasts for the Bank prepared by the management of the Bank,
including projections of future performance, and certain other
summary materials and analyses with respect to the Bank's loan
portfolio, securities portfolio, deposit base, fixed assets, and
operations prepared by the Bank's management. Bank Advisory Group
also reviewed (i) the economy in general and, in particular, the
local economies in which the Bank and Hibernia and its subsidiaries
operate; (ii) the financial terms and price levels for commercial
banks recently acquired in the United States, and specifically in
Louisiana and East Texas, together with the financial performance
and conditions of such banks; (iii) the price-to-equity and price-
to-earnings multiples of banking organizations based in Louisiana
and Mississippi with publicly-traded common stock, together with
the financial performance and condition of such banking
organizations; (iv) with respect to the November 1993 Opinion and
Proxy Statement Opinion, the financial terms and stated price
levels of other banking organizations, the proposed acquisitions of
which had been publicly announced by Hibernia subsequent to
September 28, 1993 and prior to the respective dates of those
opinions; and (v) such other information -- including financial
studies, analyses, investigations, and economic and market criteria
- -- that Bank Advisory Group deemed relevant.
Bank Advisory Group also held discussions with members of the
senior management of Commercial regarding its past and current
business operations, financial conditions and future prospects.
Bank Advisory Group conducted on-site due diligence investigations
at both Hibernia and the Bank and met with members of the
management of both Commercial and Hibernia to discuss relevant
information provided to Bank Advisory Group.
For purposes of its Opinions, Bank Advisory Group relied upon
the information provided by the managements of Commercial and
Hibernia, or otherwise reviewed by Bank Advisory Group, as being
complete and accurate in all material respects. Bank Advisory
Group did not verify through independent inspection or examination
the specific assets or liabilities of Commercial and Hibernia or
their subsidiary banks. In issuing its Opinions, Bank Advisory
Group assumed that there had been no material change in the assets,
financial condition, results of operations, or business prospects
of Commercial and Hibernia since the date of the most recent
financial statements to which reference was made in such Opinion.
Set forth below is a summary of the report presented by Bank
Advisory Group to Commercial's Board on September 21, 1993 in
connection with its September 1993 Opinion:
Pro Forma Merger Analysis. Bank Advisory Group analyzed
certain pro forma effects resulting from consummation of the Merger
from the perspective of both Commercial and Hibernia, based upon
the projections relating to Commercial and Hibernia. The analysis
considered the effects of the consummation of the Merger and
Hibernia's acquisition of Commercial only; the effects of other
announced or pending merger transactions involving Hibernia were
not considered. This analysis indicated that the Merger would be
dilutive of Commercial's estimated earnings per share in 1993,
accretive to Commercial's projected earnings per share in 1994, and
slightly dilutive of Commercial's estimated earnings per share
thereafter. This analysis also indicated, among other things, that
the Merger would be dilutive of Commercial's estimated equity per
share, have no effect on its dividends, and not have a material
impact on Hibernia's estimated earnings per share, equity per
share, or dividends.
Comparison with Selected Companies. Bank Advisory Group
compared selected historical stock market information, earnings,
book value, total assets, and financial ratios for Hibernia to the
corresponding data and ratios of six other regional banking
organizations in Louisiana and Mississippi having publicly-traded
common stock (specifically, Trustmark Corporation, First Commerce
Corporation, Whitney Holding Corporation, Hancock Holding Company,
Deposit Guaranty Corporation, and Premier Bancorp, Inc.), based on
publicly available information, subject to the limits on Bank
Advisory Group's review described above. This comparison showed
that, as of September 15, 1993; (i) the ratio of Hibernia's market
bid price to its annualized earnings per share for the first six
months of 1993 was 14.9x, compared to a weighted average of 7.75x
for the six selected regional banking organizations; and (ii) the
ratio of Hibernia's market bid price to its latest book value per
share was 1.64x, compared to a weighted average of 1.55x for the
six selected regional banking organizations. Bank Advisory Group
also analyzed for Hibernia and the six other regional banking
organizations the ratio of total equity capital to total assets,
the ratio of risk based capital to risk assets, the ratio of non-
performing loans and other real estate to total loans and other
real estate, the ratio of loan loss reserves to total loans, the
ratio of net charge-offs to average loans, the return on average
assets, the return on average equity capital, the ratio of common
dividends declared to net income and the ratio of other dividends
declared to net income, in each case for the three-month period
ended March 31, 1993. The following table provides the results of
this analysis by Bank Advisory Group.<PAGE>
COMPARABLE VALUES FOR REGIONAL BANKING ORGANIZATIONS
LOUISIANA & MISSISSIPPI
(Dollars in Thousands)
Loan
Total Risk Based Nonperform Loss
Holding Company Total Equity Cap/ Capital/ Loans+ORE/ Reserves/
City, State, Zip Assets Tot Assets Risk Assets Total Lns+ORE Tot Loans
3/93 3/93 3/93 3/93 3/93
_____________ __________ __________ ___________ _____________ ________
Premier $3,912,485 7.52% 15.99% 4.46% 4.39%
Bancorp, Inc.
Baton Rouge, LA
First Commerce 6,003,645 7.23 21.16 3.25 3.45
Corporation
New Orleans, LA
Hibernia 4,664,363 8.14 15.83 6.83 8.35
Corporation
New Orleans, LA
Whitney 2,873,535 6.79 16.56 9.86 10.29
Holding
Corporation
New Orleans, LA
Hancock Holding 1,787,433 7.43 14.93 2.14 1.85
Company
Gulfport, MS
Deposit 4,816,828 7.37 14.36 2.37 3.27
Guaranty
Corporation
Jackson, MS
Trustmark
Corporation 4,172,593 7.29 16.06 0.97 2.80
Jackson, MS
_____________ __________ __________ ___________ _____________ ________
Gr. Totals, 7
Institutions $ 28,230,882 7.42% 16.57% 4.04% 4.78%
_____________ __________ __________ ___________ _____________ ________
COMPARABLE VALUES FOR REGIONAL BANKING ORGANIZATIONS
LOUISIANA & MISSISSIPPI
(Dollars in Thousands)
(Continued)
Net Chg- Return Return Common Div Other Div
Holding Company Offs/ on Average on Average Declared/ Declared/
City, State, Zip Avg Loans Assets Equity Cap Net Income Net Income
3/93 3/93 3/93 3/93 3/93
_____________ __________ __________ ___________ _____________ ________
Premier (0.11%) 5.94% 79.58% 0.00% 1.18%
Bancorp, Inc.
Baton Rouge, LA
First Commerce 0.34 1.49 21.28 21.93 4.85
Corporation
New Orleans, LA
Hibernia 0.88 0.88 11.01 0.00 0.00
Corporation
New Orleans, LA
Whitney 0.42 1.19 17.95 11.18 0.00
Holding
Corporation
New Orleans, LA
Hancock Holding 0.27 0.67 18.15 20.60 0.00
Company
Gulfport, MS
Deposit (0.19) 1.15 16.11 27.20 0.00
Guaranty
Corporation
Jackson, MS
Trustmark
Corporation 0.21 1.10 15.30 23.87 0.00
Jackson, MS
_____________ __________ __________ ___________ _____________ ________
Gr. Totals, 7
Institutions 0.25% 1.73% 25.33% 10.49% 1.36%
_____________ __________ __________ ___________ _____________ ________
Analysis of Selected Merger Transactions. Bank Advisory Group
analyzed the acquisitions of selected banks in Louisiana and Texas
since July 1992. These transactions included (Acquiror/Acquiree):
Premier Bancorp/Alerion Bank; First Commerce Corporation/First
Acadiana National Bancshares; Comerica, Inc./Sugar Creek National
Bank; Banc One Corporation/United American Bancshares, Inc.;
Charter Bancshares, Inc./University National Bank; First Bancorp of
LA, Inc./Southern National Bank; BancWest Bancorp, Inc./Community
State Bank; Fredonia State Bank/Commercial State Bank; City Bank &
Trust/Fontainebleau Commercial Bank; Surety Capital Corp./First
State Bank; Surety Capital Corp./Bank of East Texas; First
Commercial Corporation/Texas Commerce Bank Longview and First
Commercial Corporation/Stone Fort National Bank. For each such
acquisition, Bank Advisory Group considered the assets, return on
assets, return on equity, and ratio of equity to assets of the
acquired bank, as well as the deal structure (cash or stock), the
total price paid, the price/equity multiple, the price/earnings
multiple, the price/equity index, and the price/earnings index,
along with the weighted averages for all the acquired banks and for
the profitable acquired banks only. Excluding the acquisition of
the one non-profitable bank, the figures were as follows:
Weighted
High Low Average Commercial
Assets $(000): 330,225 8,414 128,043 166,631
Return on Assets: 1.96% 0.66%(1) 1.04% 1.53%
Return on Equity: 19.69% 7.42% 12.81% 21.50%
Equity to Assets: 14.04% 6.44% 8.54% 7.96%
Total Price $(000): 47,000 640 15,549 18,700
Price/Equity Multiple: 1.68x 1.00x 1.42x 1.41x
Price/Earnings Multiple:
19.29x 6.43x 11.66x 7.22x(2)
Price/Equity Index: 14.23 7.61 12.14 11.22
Price/Earnings Index: 14.37 7.38 12.09 11.03
_____________
(1) Combined return on average assets for Texas Commerce Bank
Longview and Stone Fort National Bank.
(2) Based on Commercial's earnings for the twelve-month period
ended June 30, 1993.
No company or transaction used in the above analysis as a
comparison is identical to Commercial, Hibernia or the Merger.
Accordingly, an analysis of the results of the foregoing is not
mathematical; rather, it involves complex considerations and
judgments concerning differences in the financial and operating
characteristics of the companies and other factors that could
affect the public trading value of the companies to which
Commercial, Hibernia and the Merger are being compared.
Analysis of Selected Financial Data for Commercial and
Hibernia. Bank Advisory Group's report included an analysis of
selected historical financial information for Commercial and
Hibernia for the three years ended December 31, 1990, 1991, and
1992, and year-to-date figures through March 31, 1993. This review
included income statement and balance sheet data for each of
Commercial and Hibernia, selected financial ratios relating to
capital structure, profitability, balance sheet composition, asset
quality, and liquidity, and calculations relating to the relative
composition of assets, liabilities, loans and leases, and income
and expenses.
Marketability of Shares Received. Commercial shareholders
will receive Hibernia shares which, with the exception of certain
restrictions which apply to directors, executive officers and
certain substantial shareholders of Commercial, will be immediately
marketable. Unlike the market for Commercial's shares, Hibernia's
shares are actively traded. Hibernia's Common Stock is listed for
trading on the NYSE.
The summary set forth above does not purport to be a complete
description of the presentation by Bank Advisory Group to the
Commercial Board or of the analysis performed by Bank Advisory
Group. The preparation of a fairness opinion is not necessarily
susceptible to partial analyses or summary description. Bank
Advisory Group believes that its analyses and the summary set forth
above must be considered as a whole and that selecting portions of
its analysis and of the factors considered, without considering all
analyses and factors, would create an incomplete view of the
process underlying the analyses set forth in its presentation to
the Commercial Board. In addition, Bank Advisory Group may have
given various analyses more or less weight than other analyses, and
may have deemed various assumptions more or less probable than
other assumptions, so that the ranges of valuations resulting from
any particular analysis described above should not be taken to be
Bank Advisory Group's view of the actual value of Commercial or the
combined value of Commercial and Hibernia. The fact that any
specific analysis has been referred to in the summary above is not
meant to indicate that such analysis was given greater weight than
any other analysis.
In performing its analyses, Bank Advisory Group made numerous
assumptions with respect to industry performance, general business,
and economic conditions and other matters, many of which are beyond
the control of Commercial or Hibernia. The analyses performed by
Bank Advisory Group are not necessarily indicative of actual values
or actual future results, which may be significantly more or less
favorable than suggested by such analyses. Such analyses were
prepared solely as part of Bank Advisory Group's analysis of the
fairness of the financial terms of the Merger from the perspective
of the common shareholders of Commercial and were provided to the
Commercial Board in connection with the delivery of Bank Advisory
Group's opinion. The analyses do not purport to be appraisals or
to reflect the prices at which a company might actually be sold or
the prices at which any securities may trade at the present time or
at any time in the future. Bank Advisory Group used in its
analyses various projections of future performance prepared by the
managements of Commercial and Hibernia. The projections are based
on numerous variables and assumptions which are inherently
unpredictable and must be considered not certain of occurrence as
projected. Accordingly, actual results could vary significantly
from those set forth in such projections.
As described above, Bank Advisory Group's opinion and
presentation to the Commercial Board were among the many factors
taken into consideration by the Commercial Board in making its
determination to approve the Merger.
Prior to its retention in connection with this opinion, Bank
Advisory Group provided consulting services to Commercial and the
Bank; however, Bank Advisory Group has indicated that the revenues
derived from the delivery of such services are insignificant when
compared to Bank Advisory Group's total gross revenues. Bank
Advisory Group has not provided any services to Hibernia.
The terms of the Merger were negotiated between members of
management of Hibernia and Commercial. Bank Advisory Group did not
participate in the negotiation of the Agreement, including the
negotiation of the Exchange Ratio.
The engagement letter dated July 22, 1993, between Bank
Advisory Group and Commercial provides that Bank Advisory Group
will receive between $25,000 and $27,000 as professional fees for
providing the Opinions and certain other services. Approximately
$6,000 to $7,000 of these fees represents compensation for certain
written, detailed analyses furnished by Bank Advisory Group, and
approximately $19,000 to $20,000 is compensation for issuing
fairness opinions regarding the financial adequacy of the proposed
Merger. Commercial also agreed to reimburse Bank Advisory Group
for certain out-of-pocket expenses and to indemnify and hold
harmless Bank Advisory Group against certain liabilities.
Surrender of Certificates
As soon as practicable after the Effective Date, the transfer
agent of Hibernia, in its capacity as Exchange Agent, will mail all
non-dissenting shareholders of Commercial Bancshares a letter of
transmittal, together with instructions for the exchange of their
Commercial Common Stock certificates for certificates representing
Hibernia Common Stock. Until so exchanged, each certificate
representing Commercial Common Stock outstanding immediately prior
to the Effective Date shall be deemed for all purposes to evidence
ownership of the number of shares of Hibernia Common Stock into
which such shares have been converted on the Effective Date.
Shareholders should not send their Commercial Common Stock
certificates for surrender until they receive further instructions
from the Exchange Agent.
Representations and Warranties; Conditions to the Merger; Waiver
The Agreement contains representations and warranties by
Commercial regarding, among other things, its organization,
authority to enter into the Agreement, capitalization, properties,
financial statements, pending and threatened litigation,
contractual obligations and contingent liabilities. The Agreement
also contains representations and warranties by Hibernia regarding,
among other things, its organization and authority to enter into
the Agreement, capitalization, financial statements and other
public reports. Except as otherwise provided in the Agreement,
these representations and warranties will not survive the Effective
Date.
The obligations of Hibernia and Commercial to consummate the
Merger and the Bank Merger are conditioned upon, among other
things, approval of the Agreement by Commercial's shareholders; the
receipt of necessary regulatory approvals, including the approval
of the OCC and the Federal Reserve without any materially
burdensome conditions; the receipt of an opinion to the effect that
the Merger, when consummated in accordance with the terms of the
Agreement, will constitute a reorganization within the meaning of
Section 368 of the Code and that, to the extent Commercial Common
Stock is exchanged for Hibernia Common Stock, Commercial's
shareholders will recognize no gain or loss for federal income tax
purposes with respect to such exchange; the effectiveness under the
Securities Act of a registration statement relating to the Hibernia
Common Stock to be issued in connection with the Merger and the
absence of a stop order suspending such effectiveness; the absence
of an order, decree or injunction enjoining or prohibiting the
consummation of the Merger and the Bank Merger; the receipt of all
required state securities law permits or authorizations; the
accuracy of the representations and warranties set forth in the
Agreement as of the Closing Date; the listing of the Hibernia
Common Stock to be issued in the Merger on the NYSE; the receipt of
certain opinions of counsel; in the case of Commercial, the receipt
of certain opinions of Bank Advisory Group; and, in the case of
Hibernia, the absence of an event that would preclude the Merger
from being accounted for as a pooling of interests. In this
regard, Hibernia may abandon the Merger if Commercial shareholders
holding more than 10% of the outstanding Commercial Common Stock
exercise and perfect dissenters' rights.
Except with respect to any required shareholder or regulatory
approval, substantially all of the conditions to consummation of
the Merger may be waived at any time by the party for whose benefit
they were created, and the Agreement may be amended or supplemented
at any time by written agreement of the parties, except that no
such waiver, amendment or supplement executed after approval of the
Agreement by Commercial's shareholders may reduce the Exchange
Ratio. In addition, any material change in the terms of the
Agreement that occurs after solicitation of votes from Commercial
shareholders for the Special Meeting would require a resolicitation
of votes on the Agreement from Commercial shareholders.
Regulatory and Other Approvals
Hibernia is a registered bank holding company and as such is
regulated by the Federal Reserve Board. The approval of the
Federal Reserve Board of the Merger is required in order to
consummate the Merger.
HNB is regulated by the OCC, and the Bank Merger consequently
must be approved by the OCC before it may be effected. Although
the Bank is a Louisiana bank, no state regulatory approval of the
Bank Merger is required.
When the approval of the Federal Reserve and the OCC have been
obtained, Commercial and Hibernia must wait at least 30 days prior
to consummating the Merger. During this 30-day period, the
Department of Justice may object to the Merger on antitrust
grounds.
As of the date of this Proxy Statement, approvals of the
Merger and/ or the Bank Merger have not been received from either
the Federal Reserve or the OCC. Under the terms of the Agreement,
all required approvals must be obtained in sufficient time to
permit a closing of the transaction no later than July 1, 1994 (the
"Termination Date"). In the event Federal Reserve approval is not
obtained by June 1, 1994, the Merger cannot be effected by the
Termination Date.
Approval by the OCC is not required in order to effect the
Merger, although such approval is required for the Bank Merger. In
the event approval of the Merger is obtained from the Federal
Reserve in time to permit the Merger to be closed on or prior to
the Termination Date, but approval of the Bank Merger is not
obtained by such time, it is anticipated that the Merger will be
closed but that the Bank Merger will be deferred until OCC approval
of the Bank Merger has been obtained.
Bank regulatory approvals of the Merger and the Bank Merger
have been delayed pending completion of an OCC examination of
Hibernia. Although the examination is still in progress and no
examination report has been issued, Hibernia has indicated that it
does not expect the results of the examination to have a material
adverse effect on Hibernia or HNB.
If approval of the Merger by the Federal Reserve is not
received in sufficient time to permit a closing of the Merger on or
before the Termination Date, the parties will either terminate the
Agreement or agree to a modification which permits the Merger to
occur at a later time. Commercial and Hibernia have not negotiated
or agreed upon any such modification to the Agreement. In the
event that Commercial and Hibernia agree to such a modification and
the modification results in a material change in the terms of the
Agreement, Commercial will resolicit proxies from Commercial
shareholders with respect to the Agreement as so modified.
The shares of Hibernia Common Stock offered pursuant to the
Proxy Statement-Prospectus will be registered with the Securities
and Exchange Commission and the state securities regulators in
those states that require such registration. The shares will also
be listed on the NYSE.
Business Pending the Merger
Under the terms of the Agreement, neither Commercial nor the
Bank may, without the prior written consent of Hibernia or as
otherwise provided in the Agreement: (i) create or issue any
additional shares of capital stock or any options or other rights
to purchase or acquire shares of capital stock; (ii) enter into
employment contracts with directors, officers or employees or
otherwise agree to increase the compensation of or pay any bonus to
such persons except in accordance with existing policy; (iii) enter
into or substantially modify any employee benefits plans; (iv)
establish any automatic teller machines or branch or other banking
offices; (v) make any capital expenditure(s) in excess of $100,000;
(vi) merge with any other company or bank or liquidate or otherwise
dispose of its assets; or (vii) acquire another company or bank
(except in connection with foreclosures of bona fide loan
transactions). In addition, Commercial may not solicit bids or
other transactions that would result in a merger of Commercial or
the Bank with an entity other than Hibernia or HNB. Commercial is
also prohibited from paying dividends prior to the Closing Date,
except that it may pay a dividend of $1.00 per shares of Commercial
Common Stock on or after March 31, 1994 if the Merger has not been
consummated as of that date.
Effective Date of the Merger; Termination
After all conditions to consummation of the Merger have been
satisfied or waived, the Merger will become effective as of the
date and time of the issuance by the Louisiana Secretary of State
of a certificate of merger relating to the Merger (the "Effective
Date").
Prior to the Effective Date, the Agreement may be terminated
by either party, whether before or after approval of the Agreement
and the Merger by Commercial's shareholders: (i) in the event of
a material breach by the other party of any representation,
warranty or covenant which has not been cured within the period
allowed by the Agreement; (ii) if any of the conditions precedent
to the obligations of such party to consummate the Merger have not
been satisfied, fulfilled or waived as of the Closing Date; (iii)
if any application for any required federal or state regulatory
approval has been denied, and the time for all appeals of such
denial has run; (iv) if the shareholders of Commercial fail to
approve the Merger at the Special Meeting; or (v) in the event that
the Merger is not consummated by July 1, 1994. The Agreement also
may be terminated at any time by the mutual consent of the parties.
In the event of termination, the Agreement becomes null and void,
except that certain provisions thereof relating to expenses and
confidentiality and the accuracy of information provided for
inclusion in the Registration Statement of which this Prospectus is
a part survive any such termination and any such termination does
not relieve any breaching party from liability for any uncured
breach of any covenant or agreement giving rise to such
termination.
Management and Operations After the Merger
On the Effective Date, Commercial will be merged with and into
Hibernia. Immediately thereafter, the Bank will merge with and
into HNB, and the separate existences of Commercial and the Bank
will cease. The offices of the Bank will operate as branch banking
offices of HNB. The employees of the Bank on the Effective Date
will become employees of HNB as of the Effective Date and will be
employed on an "at will" basis thereafter, subject to any existing
employment agreements or similar contractual obligations assumed by
Hibernia.
The Boards of Directors of Hibernia and HNB following the
Merger shall consist of those persons serving as directors
immediately prior thereto. Information regarding the directors of
Hibernia elected at its annual meeting of shareholders on April 26,
1994 is contained in documents incorporated herein by reference.
See "AVAILABLE INFORMATION." The directors of Commercial and the
Bank will resign their positions as directors as of the Effective
Date.
Certain Differences in Rights of Shareholders
If the shareholders of Commercial approve the Amendment and
the Merger and the Merger is subsequently consummated, all
shareholders of Commercial, other than any shareholders who
exercise and perfect dissenters' rights, will become shareholders
of Hibernia. As shareholders of Hibernia, their rights will be
governed by and subject to Hibernia's Articles of Incorporation and
Bylaws, rather than Commercial's Articles of Incorporation and
Bylaws. The following is a summary of the principal differences
between the rights of shareholders of Commercial and Hibernia not
described elsewhere in this Proxy Statement-Prospectus.
Liquidity of Stock. There currently is no ready market for
the shares of Commercial Common Stock, and such a market is not
likely to develop in the future. The shares of Hibernia Common
Stock that will be issued in the Merger will be registered under
applicable securities laws and may therefore be freely resold by
persons who are not "affiliates" of Commercial or Hibernia. In
addition, the Hibernia Common Stock is listed on the NYSE and
actively traded on that exchange. Current quotes of the market
price of Hibernia Common Stock are available from brokerage firms
and other securities professionals, as well as other sources, and
are published in major newspapers on a daily basis.
Shareholder Actions and Voting Requirements. Commercial's
Articles of Incorporation require a super-majority (more than a
majority of the shares represented) to authorize (a) modification,
amendment, or removal of preemptive rights; (b) removal of
directors; (c) adoption, amendment, or repeal of Bylaws; or (d)
amendment of certain provisions of the Articles of Incorporation
relating to directors, Bylaws, mergers, consolidations and certain
other major transactions. Commercial's Articles of Incorporation,
as in effect before the Special Meeting, also contain various
"anti-takeover" provisions which are described in detail above.
See "PROPOSED AMENDMENT TO ARTICLES OF INCORPORATION OF COMMERCIAL
- --Description of Article VII and Proposed Amendment." If the
Amendment is approved, a majority of the voting power present or
represented by proxy at a meeting called for the purpose will be
sufficient to approve (a) any agreement of merger or consolidation,
(b) any sale, lease, exchange, or other disposition of all or
substantially all of Commercial's assets, and (c) dissolution or
liquidation of Commercial.
Hibernia's Articles of Incorporation and Bylaws are consistent
with the Amendment but do not include provisions similar to those
contained in Article VII and elsewhere in Commercial's Articles of
Incorporation requiring super-majority votes to approve certain
transactions or to amend those provisions of the Articles and
Bylaws.
Preemptive Rights. All shareholders of Commercial have
preemptive rights with respect to the issuance by Commercial of
shares of stock, except with respect to certain specified
issuances. Shareholders of Hibernia have no preemptive rights.
Removal of Directors. The shareholders of Commercial may
remove a director from office, but only for cause and only by
affirmative vote of 75% of the total voting power of the
corporation entitled to vote generally for directors of the
corporation at any special meeting called for the purpose.
Shareholders of Hibernia may remove a director for cause (defined
as gross negligence or wilful misconduct) by the vote of a majority
of the total voting power and may remove a director without cause
by a vote of two-thirds of the total voting power.
Amendment of Articles and Bylaws. As described in more detail
above, Commercial's Articles of Incorporation currently provide
that certain provisions of those Articles of Incorporation
(relating to directors, Bylaws, mergers, consolidations and certain
other fundamental changes, and certain required shareholder votes)
may only be amended by 75% of the outstanding shares of the
corporation. The Amendment, if approved, would modify these voting
requirements in certain respects. See "PROPOSED AMENDMENT TO THE
ARTICLES OF INCORPORATION OF COMMERCIAL." Hibernia's Articles of
Incorporation may be amended by a vote of a majority of the voting
power present at any meeting called for that purpose.
Commercial's Articles of Incorporation provide that the Bylaws
may be amended by the affirmative vote of a majority of the entire
Board of Directors or by the affirmative vote of the holders of 75%
or more of the total voting power of the corporation. Commercial's
Bylaws provide that they may be amended or repealed by the
affirmative vote of a majority of the entire Board of Directors or
by the affirmative vote of a majority of the shareholders at any
shareholders' meeting. The Bylaws of Hibernia may be amended or
repealed by a vote of two-thirds of the total voting power
outstanding or by a vote of two-thirds of the "continuing
directors" of the company, as defined in the Bylaws. A "continuing
director" for this purpose is generally a director who was
nominated for election by a majority of the existing directors.
Special Meetings of Shareholders. The Board of Directors may
call a special meeting of the shareholders of Commercial at any
time. In addition, Commercial shareholders owning an aggregate of
at least 51% of the capital stock of Commercial may call a special
meeting of the shareholders of Commercial.
Special meetings of the shareholders of Hibernia may be called
by the Chairman of the Board, the President, the Chief Executive
Officer or the Treasurer of Hibernia. In addition, shareholders
holding one-fifth or more of the total voting power of Hibernia may
request a special meeting of shareholders and, upon receipt of such
request, the Secretary of Hibernia is required to call a special
meeting of the shareholders.
Shareholder Proposals. Commercial's Articles of Incorporation
and Bylaws do not contain any provision either expressly forbidding
or permitting a shareholder to submit a proposal for consideration
at shareholders' meeting or to nominate any person for election as
a director. Hibernia's Bylaws contain certain provisions expressly
allowing shareholders to submit such proposal and to nominate
individuals for election as directors, under certain circumstances
and provided the shareholder complies with all of the conditions
set forth in those provisions. In addition, the proxy rules
applicable to public companies whose stock is registered with the
Securities and Exchange Commission, such as Hibernia, protect these
rights of shareholders even in the absence of a bylaw provision
such as Hibernia's.
Certain Transfer Restrictions Relating to 5-Percent
Shareholders. Article IX of Hibernia's Articles of Incorporation
restricts transfers of equity interests in Hibernia under certain
circumstances. This restriction (the "5-Percent Restriction") is
intended to protect Hibernia from certain transfers of equity
interests which could have a material adverse effect on Hibernia's
ability to use certain tax benefits to reduce its taxable income.
Under the 5-Percent Restriction, if, before December 29, 1995, a
shareholder transfers or agrees to transfer Hibernia stock or stock
equivalents, the transfer will be prohibited and void to the extent
that it would result under applicable Federal income tax rules in
the identification of a new "5-percent shareholder" of Hibernia or
an increase in the percentage stock ownership of any existing "5-
percent shareholder" is increased.
The 5-Percent Restriction does not apply to any transfer
which has been approved in advance by the Board of Directors of
Hibernia, or which is made in compliance with exceptions
established from time to time by resolution of the Board of
Directors. The Board of Directors may withhold its approval of a
transfer only if, in its judgment, the transfer may result in any
limitation on the use by Hibernia of its net operating loss
carryforwards or built-in tax losses or other tax attributes. The
Board of Directors may adopt further resolutions exempting
additional transfers from the 5-Percent Restriction.
The 5-Percent Restriction may adversely affect the
marketability of the Hibernia Common Stock by discouraging
potential investors from acquiring equity securities of Hibernia.
However, since its adoption in September 1992, the 5-Percent
Restriction does not appear to have had any such adverse affect on
the marketability of the Hibernia Common Stock.
While the 5-Percent Restriction may have the effect of
impeding a shareholder's attempt to acquire a significant or
controlling interest in Hibernia, the purpose of the 5-Percent
Restriction is to preserve the tax benefits of Hibernia's previous
losses, not to insulate management from change. Management of
Hibernia believes the tax benefits outweigh any anti-takeover
impact of the 5-Percent Restriction. Any anti-takeover effect of
the 5-Percent Restriction will end with the termination of the 5-
Percent Restriction on December 29, 1995.
Indemnification of Officers and Directors. Hibernia's
Articles of Incorporation provide for indemnification of officers
and directors of the company under the circumstances permitted by
Louisiana law. This indemnification provision requires
indemnification, except as prohibited by law, of officers and
directors of Hibernia or any of its wholly-owned subsidiaries
against expenses, judgments, fines and amounts paid in settlement
actually and reasonably incurred in connection with any action,
suit or proceeding, whether civil or criminal, administrative or
investigative (including any action by or in the right of Hibernia)
by reason of the fact that the person served as an officer or
director of Hibernia or one of its subsidiaries. Officers and
directors may only be indemnified against expenses in cases brought
by the officer or director against Hibernia if the action is a
claim for indemnification, the officer or director prevails in the
action, or indemnification is included in any settlement or is
awarded by the court. The indemnification provision further
requires Hibernia to advance defense costs to officers and
directors in such suits and proceedings upon receipt of an
undertaking to repay such expenses unless it is ultimately
determined that the officer or director is entitled to
indemnification as authorized by the Article.
Commercial's Bylaws provide that, with two exceptions, the
corporation shall indemnify an individual made a party to a
proceeding because he is or was a director against liability
incurred in the proceeding if (a) he conducted himself in good
faith; and (b) he reasonably believed (i) in the case of conduct in
his official capacity with the corporation, that his conduct was in
its best interest, and (ii) in all other cases, that his conduct
was at least not opposed to its best interests; and (c) in the case
of any criminal proceeding, he had no reasonable cause to believe
his conduct was unlawful. The two exceptions are that the
corporation may not indemnify a director (x) in connection with a
proceeding by or in the right of the corporation in which the
director was adjudged liable to the corporation, or (y) in
connection with any proceeding charging improper personal benefit
to him, whether or not involving action in his official capacity,
in which he was adjudged liable on the basis that a personal
benefit was improperly received by him. Indemnification permitted
under Commercial's Bylaws in connection with a proceeding by or in
the right of the corporation is limited to reasonable expenses
incurred in connection with defense of the claims.
Like the corresponding provision of Hibernia's Articles of
Incorporation, Commercial's Bylaws provide that Commercial shall
pay for or reimburse the reasonable expenses of directors who are
parties to a proceeding and that such expenses must be paid in
advance of the final adjudication of the matter. The standards
imposed by Commercial's Bylaws, however, differ somewhat from
Hibernia's in this regard. Under Commercial's Bylaws, Commercial
is only obligated to advance legal fees to directors if (a) the
director furnishes the corporation a written affirmation of his
good faith belief that he has met the standard of conduct described
in the preceding paragraph, (b) the director furnishes the
corporation a written undertaking, executed personally or on his
behalf, to repay the advanced amounts if it is ultimately
determined that he did not meet the applicable standard of conduct,
and (c) a determination is made that the facts then known to those
making the determination would not preclude indemnification under
the Bylaws.
Commercial's Bylaws require indemnification of a director or
officer who was wholly successful in the defense of any proceeding
to which he is a party because he is or was a director or officer
of the corporation against reasonable expenses incurred by him in
connection with the proceeding. Additionally, Commercial may, but
is not required to, indemnify and advance expenses to officers,
employees or agents of the corporation who are not directors to the
same extent as such indemnification or payment may be available to
a director.
Interests of Certain Persons in the Merger
Termination of Deferred Compensation Agreements. The Bank and
Commercial maintain deferred compensation plans for their directors
(collectively, the "Plans"). Under the Plans, each participating
director may elect to defer all or a portion of his board and
committee fees. The total amount of this deferred compensation is
an unfunded liability of the Bank or Commercial, and interest
accrues on this amount during each year at the rate payable on 10-
Year Treasury Bills as of January 1 of that year, compounded
annually. Fifteen current directors of the Bank and Commercial are
participants in one or both Plans and have entered into deferred
compensation agreements with Commercial or the Bank (or both) to
evidence such participation. Three of these directors have reached
their retirement dates under the Plans. The Plans are intended to
permit each participant to receive his deferred benefits following
their retirement dates payable over 180 months for all participants
except four, for whom the benefits are payable over 120 months.
The benefits may become payable before retirement under certain
circumstances, including if the participant dies or ceases to be a
director. The amount of these payments is determined generally by
the length of participation in the Plan, the aggregate amount
deferred by the participant, the amount of interest accrued before
retirement, and the rate of interest at the time of retirement when
the amount of the monthly payment is determined. Under the Plans,
a death benefit also is payable to the participant's beneficiary or
successor if the participant dies while still serving as a
director. The amount of this benefit is the greater of a lump sum
amount provided in such participant's agreement or the
participant's plan account balance as of the date of death. If a
participant dies after retirement while benefits are still being
paid to the participant, his remaining monthly payments are payable
to his beneficiary or successor.
As a condition to the consummation of the Merger, Hibernia has
required that the deferred compensation agreements be terminated at
or prior to the Closing, and that the aggregate after tax cost to
Commercial and the Bank of the terminations not exceed $600,000.
Commercial and the Bank maintain life insurance policies on certain
of their directors, including all of the directors participating in
the Plans. To effectuate the termination of the deferred
compensation agreements, Commercial and the Bank have entered into
agreements (the "Termination Agreements") with all but one of the
participants permitting Commercial or the Bank to terminate the
deferred compensation agreements by distributing to each such
participant the insurance policy on his life maintained by the Bank
or Commercial or, in the case of one participant, by making a cash
payment to him. One director has not yet agreed to the termination
of his deferred compensation agreement, and Hibernia has indicated
that it will assume Commercial's obligations under that director's
agreement if it is not terminated prior to the Closing. The cash
value of the insurance policies expected to be delivered to the
participants exceeds the credited amounts in the participants'
accounts under the Plans. Set forth below is a table showing as of
December 31, 1993, for each participant who has entered into a
Termination Agreement (including directors who have reached their
Plan retirement dates, (a) with respect to benefits under the Plan,
the approximate amount of the participant's Plan account balance
(amounts deferred plus accrued interest) and the amount of the
death benefit payable under the Plan to the participant's
beneficiaries in the event of his death before reaching his plan
retirement date, and (b) with respect to the insurance policies to
be distributed pursuant to the Termination Agreements, the death
benefit payable under, and cash surrender value of, the insurance
policy being distributed to him.
The amounts shown below in the column entitled "Death Benefit
as of 12/31/93" are the amounts of the death benefits to each of
the directors who participate in one or both of the Plans. This
amount would be payable to the director even if the agreements were
not terminated.
Deferred Compensation Plan Benefits Insurance Policy Benefits
Plan Policy
Account Cash Death
Balance Lump Sum Value Benefit
as of Pre-Retirement as of as of
Director 12/31/93 Death Benefit 12/31/93 12/31/93
Blevins $107,748 $529,000 $159,131 $706,673
Caffery 9,315 * 18,451 33,237
Dronet 42,358 347,000 71,539 436,565
Edwards 33,492 780,000 97,215 892,317
Landry 33,492 419,000 81,402 515,057
Miller 42,361 399,000 99,123 409,000
Noland(CBI) 55,819 720,000 113,102 720,000
Noland(FCB) 97,553 682,000 220,452 926,016
Poindexter 52,354 * 69,193 168,630
Sagrera 33,492 374,000 81,865 470,243
Snellgrove 42,358 428,000 76,847 518,797
St. Blanc 42,358 444,000 81,899 544,969
Thomson 33,277 * 41,860 93,690
Trowbridge 83,221 678,000 169,832 866,895
Zuniga 72,273 441,000 91,265 547,083
*Retired director. A lump sum death benefit is not payable after
retirement.
Indemnification of Commercial Directors. The terms of the
Merger include certain provisions that protect the officers and
directors of Commercial and the Bank from and against liability for
actions arising while they served in those capacities for
Commercial and/or the Bank. The Agreement provides for
indemnification of such persons to the same extent as they would
have been indemnified under the Articles of Incorporation and
Bylaws of Hibernia in effect on September 28, 1993, except that the
Agreement limits Hibernia's aggregate liability for such
indemnification to $5 million and requires each officer and
director eligible for such indemnification to execute a joinder
agreement in which such persons agree to cooperate with Hibernia in
any litigation or proceeding giving rise to a claim of
indemnification. The indemnification provisions of the Agreement
do not apply to claims of which such persons were aware or should
have been aware on or prior to the Closing Date as to which
Commercial's or the Bank's director and officer liability insurance
carrier was not notified prior to the Closing.
The Agreement also provides for indemnification of
Commercial's officers, directors and certain affiliates from and
against liability arising under the Securities Act or otherwise if
such liability arises out of or is based on an untrue statement in
the Registration Statement or omission of a material fact required
to be stated therein or necessary to make the statements made
therein not misleading. This indemnification does not apply to
statements made in reliance on information furnished to Hibernia by
Commercial for use in the Registration Statement, including this
Proxy Statement-Prospectus.
Insofar as indemnification for liabilities arising under the
Securities Act of 1933 may be permitted to directors, officers or
persons controlling Hibernia or First Continental pursuant to the
foregoing arrangements, Hibernia and First Continental have been
informed that, in the opinion of the Securities and Exchange
Commission such indemnification is against public policy as
expressed in the Securities Act and is therefore unenforceable.
Change of Control Severance Agreements. A number of employees
and officers of Commercial and the Bank have executed agreements
with Commercial and/or the Bank that provide for the payment of
certain amounts in the event the employment of any such person is
terminated as a result of the Merger. These agreements provide for
severance in the event the employee is terminated as a result of a
change of control of Commercial and/or the Bank in an amount equal
to either six months' or one year's salary, depending upon the
seniority and position of the particular employee.
Advisory Board of Directors. If the Merger occurs, HNB is
considering the creation of an Advisory Board of Directors for the
Acadiana Region. If the Advisory Board is created, the number and
identities of the persons who would serve on that Board have not
been determined, but the Board, if created, is likely to include
members of the Board of Directors of the Bank. The function and
authority of such a Board has not yet been determined. If such a
Board is created, the members of the Advisory Board would be
compensated for their attendance at each meeting of the board in an
amount that has not been determined but that is expected to be
comparable to the amounts currently paid to HNB's other advisory
boards.
Material Tax Consequences
The following is a summary description of the material income
tax consequences of the Merger; it is not intended to be a
complete description of the federal income tax consequences of the
Merger. Tax laws are complex, and each shareholder's individual
circumstances may affect the tax consequences to such shareholder.
In addition, no information is provided with respect to the tax
consequences of the Merger under applicable state, local or other
tax laws. Each shareholder is therefore urged to consult a tax
advisor regarding the tax consequences of the Merger to him or her.
Consummation of the Merger is conditioned upon the receipt of
an opinion to the effect that the Merger, when consummated in
accordance with the terms of the Agreement, will constitute a
reorganization within the meaning of Section 368 of the Code, and
that the exchange of Commercial Common Stock for Hibernia Common
Stock will not give rise to the recognition of gain or loss for
federal income tax purposes to Commercial's shareholders with
respect to such exchange. See "PROPOSED MERGER--Representations
and Warranties; Conditions to the Merger; Waiver."
If the Merger constitutes a reorganization within the meaning
of Section 368 of the Code: (i) no gain or loss will be recognized
by Commercial, the Bank, Hibernia or HNB by reason of the Merger;
(ii) a shareholder of Commercial will not recognize any gain or
loss for federal income tax purposes to the extent Hibernia Common
Stock is received in the Merger in exchange for Commercial Common
Stock; (iii) the tax basis in the Hibernia Common Stock received by
a shareholder of Commercial will be the same as the tax basis in
the Commercial Common Stock surrendered in exchange therefor; and
(iv) the holding period, for federal income tax purposes, for
Hibernia Common Stock received in exchange for Commercial Common
Stock will include the period during which the shareholder held the
Commercial Common Stock surrendered in the exchange, provided that
the Commercial Common Stock was held as a capital asset at the
Effective Date.
The Louisiana income tax treatment to the shareholder of
Commercial should be substantially the same as the federal income
tax treatment to the shareholders of Commercial described above.
Shareholders residing in states other than Louisiana are encouraged
to consult their tax advisors regarding the state income tax
implications of the Merger to them.
The parties have received the opinion of Ernst & Young,
certified public accountants, to the effect that the Merger, if
consummated in accordance with the terms thereof as set forth in
the Agreement, will constitute a reorganization under Section 368
of the Code and will have the tax effects described in this
section. A copy of Ernst & Young's opinion in this regard is
attached hereto as Appendix F. As noted in the opinion, the
opinion is based upon certain representations and assumptions
described therein. Shareholders of Commercial are urged to review
the full text of the opinion of Ernst & Young attached hereto as
Appendix F with regard to the tax consequences of the Merger to
them.
Cash received by Commercial shareholders in lieu of fractional
shares will be taxed to them as a distribution in partial
redemption of their Commercial Common Stock. Similarly, cash
received by Commercial shareholders who exercise and perfect
dissenters' rights will be taxable to them as a distribution in
full redemption of their Commercial Common Stock. See "PROPOSED
MERGER--Rights of Dissenting Shareholders." The character of the
gain, if any, recognized by a shareholder who receives cash will
depend upon the character of the Commercial Common Stock so
redeemed. Commercial shareholders who receive cash are urged to
consult their tax advisors to determine the tax effect to them of
their receipt of cash.
Cash received by a dissenting shareholder of Commercial in
exchange for his or her Commercial stock should be treated as
having been received by such shareholder as a distribution in
redemption of his or her stock, subject to the provisions and
limitations of Section 302 of the Code. If, as a result of such
distribution, a shareholder owns no stock either directly or
through the application of Section 318(a) of the Code, the
redemption should be a complete termination of interest within the
meaning of Section 302(b)(3) of the Code and such cash will be
treated as a distribution in full payment in exchange for his or
her stock, as provided by Section 302(a) of the Code. The
Louisiana income tax treatment to dissenting shareholders of
Commercial will be substantially the same as the federal income tax
treatment to such shareholders. Shareholders residing outside of
Louisiana should consult their tax advisors as to the state income
tax consequences of exercising dissenters' rights.
Resale of Hibernia Common Stock
The shares of Hibernia Common Stock issuable to shareholders
of Commercial upon consummation of the Merger have been registered
under the Securities Act. It is a condition to closing of the
Merger that all shares of Hibernia Common Stock issued in
connection with the Merger be approved for listing, upon official
notice of issuance, on the NYSE. Such shares may be traded freely
by those shareholders not deemed to be affiliates of Commercial as
that term is defined under the Securities Act. The term
"affiliate" generally means each person who controls, or is a
member of a group that controls, or who is under common control
with, Commercial, and for purposes hereof could be deemed to
include all executive officers, directors and 10% shareholders of
Commercial.
Hibernia Common Stock received and beneficially owned by those
shareholders who are deemed to be affiliates of Commercial may be
resold without registration as provided by Rule 145, or as
otherwise permitted, under the Securities Act. Such affiliates,
provided they are not affiliates of Hibernia Corporation, may
publicly resell Hibernia Common Stock received by them in the
Merger subject to certain limitations, principally as to the manner
of sale, during the two years following the Effective Date. After
the two-year period, such affiliates may resell their shares
without restriction. In addition, shares of Hibernia Common Stock
issued to affiliates of Commercial in the Merger will not be
transferable until financial statements pertaining to at least 30
days of post-Merger combined operations of Hibernia and Commercial
have been published, in order to satisfy certain requirements of
the Commission relating to pooling-of-interests accounting
treatment.
The Agreement provides that Commercial will use its best
efforts to identify those persons who may be deemed to be
affiliates of Commercial and to cause each person so identified to
deliver to Hibernia a written agreement providing that such person
will not dispose of Commercial Common Stock or Hibernia Common
Stock received in the Merger except in compliance with the
Securities Act, the rules and regulations promulgated thereunder
and the Commission's rules relating to pooling-of-interests
accounting treatment.
Rights of Dissenting Shareholders
Each Commercial shareholder who objects to the Merger is
entitled to the rights and remedies of dissenting shareholders
provided in Louisiana Revised Statutes Section 12: 131 of the
Louisiana Business Corporation Law, as amended ("LBCL"), a copy of
which is set forth as Appendix E hereto.
Section 131 requires that shareholders of Louisiana companies
who vote against a merger have the right to dissent if the merger
is authorized by less than 80% of the total voting power of the
company. In order to so dissent, the shareholder must file with
the corporation a written objection to the merger, which objection
must be filed with the corporation prior to or at the date of the
meeting at which the vote is taken. In addition, the shareholder
must vote against the merger at the meeting. If the merger is
approved by less than eighty percent of the total voting power of
the company, the company must provide by registered mail notice of
such vote to shareholders who filed a written objection and voted
against the merger. A dissenting shareholder may then file with
the company a written demand for the fair cash value of his shares
as of the date before the vote was taken. The demand must be made
within twenty days of the mailing of the notice from the company
and must include the fair value being requested by the dissenting
shareholder. The shareholder must also include in the demand a
post office address to which the company's reply may be sent and
must deposit his shares in escrow at a bank or trust company, duly
endorsed and transferred to the company on the sole condition that
the fair value be paid. If the company does not agree with the
fair value requested by the dissenting shareholder, it must notify
the shareholder within twenty days after receipt of the
shareholder's demand and state in such notice the value it is
willing to pay for the shares. If a disagreement continues over
the fair value, the LBCL provides a method for determination of
fair value by a district court in the parish in which the
corporation (if it still exists) or the merged corporation has its
registered office.
The amount received by a dissenting shareholder may be more or
less than, or equal to, the value of the Hibernia Common Stock
received by other Commercial shareholders in the Merger.
Shareholders who file a demand for payment of fair value cease
to have any rights as shareholders of the company thereafter.
Also, shareholders may withdraw their demand at any time before the
company gives notice of disagreement. Withdrawal of a demand
thereafter requires the written consent of the company in order to
be effective.
Each step must be taken in strict compliance with the
applicable provisions of the statute in order for holders of
Commercial Common Stock to perfect dissenters' rights.
Dividend Reinvestment Plan
Hibernia Corporation maintains a Dividend Reinvestment Plan
through which shareholders of Hibernia who participate in the plan
may reinvest dividends in Hibernia Common Stock. Shares are
purchased for participants in the plan at their market value as
determined by the market price of the stock as listed on the NYSE.
The plan also permits participants to purchase additional shares
with cash at the then-current market price. All shares purchased
through the plan are held in a separate account for each
participant maintained by Hibernia's transfer agent. Shareholders
who participate in the Dividend Reinvestment Plan purchase shares
through the plan without paying brokerage commissions or other
costs ordinarily associated with open market purchases of stock.
It is anticipated that the Dividend Reinvestment Plan will continue
after the Effective Date and that shareholders of Commercial who
become shareholders of Hibernia will have the same opportunity to
participate in the plan as other shareholders of Hibernia.
Accounting Treatment
It is anticipated that the Merger will be accounted for as a
"pooling-of-interests" transaction. In order for the Merger to
qualify for pooling-of-interests accounting treatment, 90% or more
of the outstanding Commercial Common Stock must be exchanged for
Hibernia Common Stock. If holders of more than 10% of the
outstanding Commercial Common Stock exercise and perfect
dissenters' rights, the Merger will not qualify for pooling-of-
interests accounting treatment. Also, in order for the pooling-
of-interests accounting method to apply, "affiliates" of Commercial
cannot reduce their holdings of Hibernia Common Stock received in
the Merger for a period beginning 30 days prior to the Effective
Date and ending upon the publication of at least 30 days of post-
Merger combined operations of Commercial and Hibernia. Persons
believed by Commercial to be "affiliates" have agreed to comply
with these restrictions.
Commercial has agreed to use its best efforts to permit the
transaction to be accounted for as a pooling-of-interests.
Hibernia is not obligated to consummate the Merger if the Merger
does not qualify for pooling-of-interests accounting treatment.
CERTAIN REGULATORY CONSIDERATIONS
General
As a bank holding company, Hibernia is subject to the
regulation and supervision of the Federal Reserve Board. Under the
BHCA, bank holding companies may not directly or indirectly acquire
the ownership or control of more than 5% of the voting shares or
substantially all of the assets of any company, including a bank,
without the prior approval of the Federal Reserve Board. In
addition, bank holding companies are generally prohibited from
engaging under the BHCA in nonbanking activities, subject to
certain exceptions.
Hibernia's banking subsidiary, HNB is subject to supervision
and examination by applicable federal and state banking agencies.
HNB is a national banking association subject to the regulation and
supervision of the Comptroller of the Currency (the "Comptroller").
HNB is also subject to various requirements and restrictions under
federal and state law, including requirements to maintain reserves
against deposits, restrictions on the types and amounts of loans
that may be granted and the interest that may be charged thereon
and limitations on the types of investments that may be made and
the types of services that may offered. Various consumer laws and
regulations also affect the operations of HNB. In addition to the
impact of regulation, commercial banks are affected significantly
by the actions of the Federal Reserve Board as it attempts to
control the money supply and credit availability in order to
influence the economy.
Payment of Dividends
Hibernia has substantial capital in excess of its needs for
capital. Consequently, although Hibernia would ordinarily depend
upon payment of dividends by HNB in order to pay dividends to its
shareholders, it does not currently depend upon HNB dividends for
the sources of its dividends to shareholders. In the event its
capital position changes or management determines to preserve
holding company capital for other purposes, Hibernia would derive
substantially all of its income from the payment of dividends by
HNB, and its ability to pay dividends would be affected by the
ability of HNB to pay dividends. HNB is subject to various
statutory restrictions on its ability to pay dividends to Hibernia.
Under such restrictions, the amount available for payment of
dividends to Hibernia by HNB was approximately $60 million at
December 31,, 1993. In addition, the OCC has the authority to
prohibit any national bank from engaging in an unsafe or unsound
practice, and the OCC has indicated its view that it generally
would be an unsafe and unsound practice to pay dividends except out
of current operating earnings. The ability of HNB to pay dividends
in the future is presently, and could be further, influenced by
bank regulatory policies or agreements and by capital guidelines.
Additional information in this regard is contained in documents
incorporated by reference herein. See "AVAILABLE INFORMATION."
In addition, consistent with its policy regarding bank holding
companies serving as a source of strength for their subsidiary
banks, the Federal Reserve Board has stated that, as a matter of
prudent banking, a bank holding company generally should not
maintain a rate of cash dividends unless its net income available
to common stockholders has been sufficient to fully fund the
dividends, and the prospective rate of earnings retention appears
to be consistent with the holding company's capital needs, asset
quality and overall financial conditions.
Restrictions on Extensions of Credit
HNB is subject to restrictions imposed by federal law on the
ability of any national bank to extend credit to affiliates,
including Hibernia, to purchase the assets thereof, to issue a
guarantee, acceptance or letter of credit on their behalf
(including an endorsement or standby letter of credit) or to
purchase or invest in the stock or securities thereof or to take
such stock or securities as collateral for loans to any borrower.
Such extensions of credit and issuances generally must be secured
by eligible collateral and are generally limited to 15% of HNB's
capital and surplus.
CERTAIN INFORMATION CONCERNING COMMERCIAL
Description of Business
General. Commercial was incorporated on October 21, 1983, as
a business corporation under the laws of the State of Louisiana for
the principal purpose of engaging in banking and non-banking
activities as allowed for a bank holding company. Commercial is a
registered bank holding company under the BHCA, and acts as a
holding company for its wholly-owned subsidiary, the Bank, a state
bank organized under the laws of Louisiana. The Bank is
Commercial's only subsidiary. Commercial is a legal entity
separate and distinct from the Bank. Commercial receives
substantially all of its revenue from dividends paid to it by the
Bank.
The Bank is the successor to Commercial Bank & Trust Company,
which was organized as a state bank under the laws of Louisiana in
1906. In July, 1989, Commercial Bank & Trust Company changed its
name to First Commercial Bank in connection with a merger of First
National Bank of Abbeville with and into Commercial Bank & Trust
Company. As of December 31, 1993, Commercial and the Bank had
total consolidated assets of approximately $169 million and total
consolidated shareholders' equity of approximately $14.1 million.
The Bank offers consumer and commercial banking services in
St. Mary, Iberia and Vermilion Parishes, Louisiana. The Bank has
a total of seven banking offices, with one office located in each
of Baldwin, Centerville, and New Iberia, Louisiana and two offices
located in both Franklin and Abbeville, Louisiana. Additionally,
the Bank has one drive-up only facility that is close to, and
operated in conjunction with, one of the banking offices located in
Franklin. The Bank provides customary banking services such as
checking and savings accounts, various types of time deposits, safe
deposit facilities and money transfers. The Bank also finances
commercial transactions and makes and services both secured and
unsecured loans to individuals, firms and corporations. The
lending operations of the Bank include various types of credit
services for the customers of the Bank. Commercial's principal
executive office is at 521 Main Street, Franklin, Louisiana 70538,
and its telephone number is (318) 828-5140.
There is no individual customer or group of customers, the
loss of which would have a material adverse effect on the
operations of the Bank. No significant portion of the Bank's loans
is concentrated within a single industry or group of related
industries.
Properties. All properties of Commercial are held through the
Bank. As indicated above, the Bank has seven banking offices and
one drive-up only facility. The Bank owns the land, building and
certain related properties where each of its banking offices is
located, other than the New Iberia branch, the Oaklawn branch in
Abbeville and the drive-up only facility in Franklin, which are
leased. The following table gives the location of each of
Commercial's banking offices. None of the banking offices owned by
the Bank is subject to a mortgage.
First Commercial Bank, Franklin, LA Baldwin Branch
521 Main Street Highway 90 and Main Street
Franklin, Louisiana 70538 Baldwin, Louisiana 70514
Edward H. Peterman Branch Drive-In Branch
Highway 182 West 501 First Street
Centerville, Louisiana 70522 Franklin, Louisiana 70538
Northwest Branch Abbeville Branch
301 Northwest Boulevard 407 Charity Street
Franklin, Louisiana 70538 Abbeville, Louisiana 70510
Oaklawn Branch New Iberia Branch
1110 Veterans Memorial Drive 956 South Lewis Street
Abbeville, Louisiana 70510 New Iberia, Louisiana 70560
On September 16, 1993, the Bank received a notice that it had
not timely renewed its lease of the Oaklawn Branch and that the
lease had terminated. The Bank has remained in occupancy at the
Oaklawn Branch pursuant to the terms of an Occupancy Agreement
entered into with certain of the co-owners of the Branch. The Bank
was unable to resolve this dispute through negotiations with the
lessors of the Oaklawn Branch and, as a result, determined, with
Hibernia's consent, to move its Oaklawn Branch to a different
location that management of Commercial believes will be more
favorable. The co-owners of the property who did not execute the
Occupancy Agreement commenced litigation against Commercial and the
Bank in this regard, which they vigorously contested. On February
7, 1994, the parties settled this litigation under an agreement
that permits the Bank to continue leasing the Branch through August
1, 1994, with an option to extend the lease through December 31,
1994, during which time the Bank intends to construct a new branch.
The alleged termination of the Oaklawn Branch lease, the settlement
of the litigation and the decision by the Bank to relocate that
branch did not result in any modification to the terms of the
proposed Merger.
Employees. Commercial and the Bank have, in the aggregate,
approximately 85 full-time equivalent employees.
Competitive Conditions. Commercial and the Bank do business
in St. Mary, Iberia and Vermilion Parishes. Eight other commercial
banks and savings and loan institutions are doing business in St.
Mary Parish, nine other commercial banks and savings and loan
institutions are doing business in Iberia Parish, and nine other
commercial banks and savings and loan institutions are doing
business in Vermillion Parish. Intense competition for loans and
deposits comes from other commercial banks and savings and loan
associations in the Bank's market areas. The Bank also competes
with credit unions, small loan companies, insurance companies,
mortgage companies, finance companies, brokerage houses and other
financial institutions, some of which are not subject to the same
degree of regulation and restrictions as the Bank and many of which
have financial resources far greater than the Bank.
Ownership of Commercial Common Stock and Dividends
Market Prices. As of the Record Date, there were 281,843
shares of Commercial Common Stock outstanding and approximately 120
shareholders of record of such shares. There is no established
trading market for Commercial Common Stock, and it has been subject
to only limited trading. The shares are not listed on any exchange
or quoted on any automated quotation system, and no institution
makes a market in the stock. The following table sets forth sales
prices for shares of Commercial Common Stock, of which Commercial's
management is aware, occurring since January 1, 1990. The prices
are based on the best knowledge of Commercial's management, are not
necessarily indicative of the fair market value of the shares at
the time of the trade, and may not reflect all trades or the prices
of those trades.
Approximate
Date of
Transaction Number of Shares Price Per Share
December 28, 1990 500 $24.00
February 25, 1991 500 22.00
July 12, 1991 800 20.00
February 4, 1992 40 21.00
May 27, 1993 600 45.00
In addition to the transactions described above, six
transactions have occurred with respect to "directors qualifying
shares" of certain current and one former director of the Bank.
Under Louisiana law, directors of the Bank are required to own at
least the lesser of $5,000 book value or $1,000 par value of shares
of Commercial or the Bank. These shares are sometimes called
"directors' qualifying shares." Before January 1, 1993, six
directors of the Bank each owned as their qualifying shares 500
shares of Commercial Common Stock, which were acquired from
Commercial for their par value of $2.00 per share. These shares
were subject to a restriction that permitted Commercial to
repurchase at the same price of $2.00 per share any of these shares
that such director proposed to transfer. In January of 1993
Commercial agreed to remove the restrictions permitting such
repurchase by Commercial for the 500 directors' qualifying shares
owned by J. Roland Livingston, the President and a director of
Commercial. On April 19, 1993, Commercial repurchased 500
directors' qualifying shares at $2.00 per share from an individual
who had ceased to be a director of the Bank.
Finally, in May 1993, the Board of Commercial determined to
eliminate certain restrictions affecting the shares owned by four
directors of the Bank. These shares had been issued to the
directors as directors' qualifying shares and were subject to the
restriction that Commercial could repurchase them at their par
value of $2.00 per share. In order to eliminate the restrictions,
Commercial exercised its option to repurchase the shares and then
issued the same number of shares to each director of the Bank whose
shares had been repurchased. During May and June 1993, Commercial
repurchased the directors' qualifying shares of the four directors
at the par value thereof of $2.00 per share, and then immediately
resold these shares to each such director at a price of $40.00 per
share. At the time of these transactions, Commercial was not
involved in any merger discussions with Hibernia.
The proposed Merger was first publicly announced on July 27,
1993. The most recent sale of Commercial Common Stock of which
Commercial's management is aware before that date occurred on or
about May 27, 1993, at $45 per share for a total of 600 shares.
Ownership of Principal Shareholders. Except for the
Commercial Common Stock, Commercial has no other class of voting
securities issued or outstanding. The following table provides
information concerning persons known to Commercial to be beneficial
owners, directly or indirectly, of more than 5% of the outstanding
shares of Commercial Common Stock, as of the Record Date. Except
as set forth below, no person is known by Commercial as of such
date to be the beneficial owner of more than 5% of the outstanding
voting securities of Commercial. Unless otherwise noted, the named
persons have sole voting and investment power with respect to the
shares indicated.
Number of Percentage
Name and Address Shares of of
Common Stock Class Owned
P. Foster Bailey 22,491.67 7.98%
P. O. Box 842
Baton Rouge, Louisiana 70821-0842
James J. Bailey, III 22,491.67 7.98%
P. O. Box 842
Baton Rouge, Louisiana 70821-0842
Virginia B. Noland and 22,491.67(1) 7.98%
John B. Noland
Suite 2424, One American Place
Baton Rouge, Louisiana 70825-0007
W. Prescott Foster 20,337.5 7.22%
HC 60, Box 659
Franklin, LA 70538
Murphy J. Foster, Jr. 20,837.50 7.39%
P. O. Box 212
Franklin, Louisiana 70538-9614
Commercial Bancshares, Inc.
Employee Stock Ownership Plan 15,723.00 5.58%
P. O. Box 1200
Jackson, Mississippi 39215-1200
Patricia Palfrey Stiel and 14,825.00(2) 5.26%
David H. Stiel, Jr.
P. O. Box 452
Franklin, Louisiana 70538-0452
Marjorie P. Trowbridge 14,127.00 5.01%
P. O. Box 1068
Franklin, Louisiana 70538-1068
________________________________
(1) Includes 20,991.67 shares held by Mrs. Noland and 1,500 shares
held by Mr. Noland.
(2) Includes 9,125 shares held by Mrs. Stiel, 5,300 shares held by
Mr. Stiel and 400 shares held by corporations controlled by
Mr. Stiel.
Ownership of Directors and Executive Officers of Commercial.
The following table provides information concerning the shares of
Commercial Common Stock beneficially owned, directly or indirectly,
by each director and executive officer of Commercial, and all
directors and executive officers as a group, as of the Record Date.
Unless otherwise noted, the named persons have sole voting and
investment power with respect to the shares indicated.
Number of Percentage
Name and Address Shares of of
Common Stock Class Owned
Murphy J. Foster, Jr. 20,837.50 7.39%
John T. Landry 540.00 *
J. Roland Livingston 1,412.3983(1) *
John B. Noland 22,491.67(2) 7.98%
David H. Stiel, Jr. 14,825.00(3) 5.26%
Newman Trowbridge, Jr. 3,516.00 1.25%
All directors and executive 63,622.568(2)(3) 22.57%
officers as a group
____________________________
* Less than 1%
(1) Includes 912.3983 shares held for Mr. Livingston's benefit by
Commercial's Employee Stock Ownership Plan.
(2) Includes 20,991 shares held by Mr. Noland's spouse.
(3) Includes 9,125 shares held by Mr. Stiel's spouse and 400
shares held by corporations controlled by Mr. Stiel.
Dividends. Commercial declared a dividend of $1.00 per share
of Commercial Common Stock during the second quarter of 1993.
Commercial did not declare any dividends during either the 1992 or
1991 calendar years. The Agreement prohibits Commercial from
declaring or paying any dividends while the Agreement remains in
effect, except that, if the Merger does not close before March 31,
1994, Commercial is permitted to declare and pay on or after March
31, 1994, its normal dividend of $1.00 per outstanding share of
Commercial Common Stock.
Commercial's ability to declare and pay dividends also is
restricted under the provisions of a loan agreement between Deposit
Guaranty National Bank ("Deposit Guaranty") and Commercial. Under
the provisions of this loan agreement, Commercial is prohibited
from declaring or paying any dividend during the fiscal year to the
extent that such dividend exceeds 8% of the consolidated net income
of Commercial and the Bank in that year.
Commercial's ability to pay dividends is dependent upon the
earnings and financial condition of the Bank, since substantially
all of the funds used by Commercial to pay dividends are derived
from dividends paid by the Bank to Commercial. Dividend payments
by the Bank are subject to certain regulatory restrictions.
RELATIONSHIP WITH INDEPENDENT AUDITORS
Commercial has appointed Castaing, Hussey & Lolan, Certified
Public Accountants, as independent auditors for the fiscal year
ending December 31, 1993. Castaing, Hussey and Lolan has
continuously served as the independent auditors for Commercial
since the Fall of 1991. A representative of Castaing, Hussey &
Lolan is expected to be present at the Special Meeting of
Commercial's shareholders, will have an opportunity to make a
statement if he desires and will be available to respond to
appropriate questions.
VALIDITY OF SHARES
The validity of the shares of Common Stock offered hereby has
been passed upon for Hibernia by Patricia C. Meringer, Associate
Counsel and Secretary of Hibernia. As of the date of this
prospectus, Ms. Meringer owned no shares of Hibernia Common Stock
and held options to purchase 15,716 shares of Hibernia Common
Stock, which options are not currently exercisable.
EXPERTS
The consolidated financial statements of Hibernia incorporated
in this Prospectus by reference from Hibernia's Annual Report on
Form 10-K for the fiscal year ended December 31, 1993, have been
audited by Ernst & Young, independent auditors, as set forth in
their report thereon incorporated herein by reference, and has been
so incorporated by reference in reliance upon such report given
upon the authority of such firm as experts in accounting and
auditing.
The consolidated financial statements of Commercial for the
fiscal years ended December 31, 1993, 1992 and 1991 contained in
this Proxy Statement-Prospectus have been audited by Castaing,
Hussey & Lolan, certified public accountants, as set forth in their
reports thereon contained therein, and have been included herein in
reliance upon such reports given upon the authority of such firm as
experts in accounting and auditing.
COMMERCIAL BANCSHARES, INC. AND SUBSIDIARY
FINANCIAL STATEMENTS
MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND
RESULTS OF OPERATIONS FOR THE TWO YEARS ENDED DECEMBER 31, 1993
The following discussion provides certain information
concerning the financial condition and results of operations of
First Commercial Bancshares, Inc. (CBI) for the two years ended
December 31, 1993. The financial position and results of
operations of CBI were due primarily to its banking subsidiary,
First Commercial Bank. Management's discussion should be read in
conjunction with the financial statements and accompanying notes
presented elsewhere in this Proxy Statement.
Overview
Net Income for 1993 totaled $2,088,000 compared to $2,058,000
for 1992. Return on average assets was 1.22% and return on average
equity was 15.91% for 1993, compared to 1.18% and 19.02%,
respectively, for 1992. Net income for 1993 included
$421,000 realized from the adoption of a new
accounting standard relating to the accounting for income taxes.
This is reported on the statement of income as a cumulative effect of a
change in accounting principle.
The adoption of the new standard created a deferred tax asset, net
of valuation allowances, of $421,000 as of January 1, 1993. Net
income for 1992 included extraordinary items related to the
utilization of a net operating loss carryforward and a gain on debt
extinguishment totaling $469,000. The gain on debt extinguishment
was the result of a negotiated payoff of a portion of CBI's debt
originated at the time of the acquisition of the First National
Bank of Abbeville in 1986.
Average assets in 1993 declined by $3,338,000, or 1.91%, from
1992 caused by a decline in customer deposits of $3,569,000, or
2.29%. This decline was caused by investors continuing to seek
higher interest rates in non-banking products. Because of CBI's
low loan to deposit ratio and the decline of total loans caused by
continued slow demand in CBI's market area, the loss of deposits
did not impair liquidity.
Net interest income remained relatively the same from 1992 to
1993. The net margin, the percentage of net interest income to net
earning assets, rose slightly in 1993, an indication of the
continual low interest rates and healthy spread between rates on
deposits and yields on investments and loans. Average earning
assets comprised 91.16% and 91.36% of total average assets in 1993
and 1992, respectively.
The ratios include the effect of the change to SFAS 115 for
the accounting for investment securities, the effect of which is
immaterial.
An Agreement and Plan of Merger between CBI and Hibdernia Corporation
(Hibernia) was signed on September 28, 1993. The agreement provides for
a merger of the companies in a stock for stock exchange accounted for as
a pooling of interests. Total consideration is $18.7 million of Hibernia
stock. The merger is contingent upon shareholder and regulatory approval.
Results of Operations
Net Interest Income. Net interest income for 1993 was
$6,459,000, compared to $6,538,000 for 1992. The decline of
$79,000 was caused by the decrease in average net assets and was
offset partially by the increase in the net interest margin of
.03%. Table 2 shows the fluctuations in net interest income by
volume and rate. Non-interest bearing deposits as a percent of
total deposits increased .92% from 1992 to 1993.
Investment securities continued to be the largest component of
earning assets. Average investment securities for 1993 was
$90,465,000, or 57.49% of average earning assets. Average loans
totaled $60,513,000 and comprised 38.45% of average earning assets.
The remaining earning asset of CBI was its position in Federal
Funds Sold. The net yield on investment securities declined .97%
from 1992 to 1993. The net yield on loans declined .65% during
that same time. The net yield on total earning assets declined
.92% from 1992 to 1993, but was offset by a 1.02% decrease in the
rate paid on interest bearing liabilities, for an increase in the
net interest spread of .10%.
Loan demand continued to be slow and payments on existing
loans exceeded loans originated during 1993. Average loans
decreased $6,417,000 from 1992 to 1993. Because of the decline in
total assets, the percentage of average loans to average total
assets decreased only 3.00%, from 38.35%. The decrease in net
loans had a negative effect on the net interest margin of CBI since
loans are the highest earning asset of CBI and suffered the
smallest decline in net yield in 1993.
Table 1 presents the average balance sheets, net interest
income and net yield for each category of assets for 1993, 1992 and
1991. Table 2 provides the components of changes in net interest
income.
Interest Rate Sensitivity. The interest rate sensitivity gap
is the difference between the amount of interest bearing assets and
interest bearing liabilities maturing in any given time frame. A
primary objective of asset/liability management is to maximize net
interest margin while not subjecting CBI to significant interest
rate risk in periods of rising or falling interest rates. At
December 31, 1993 CBI's one year repricing gap, defined as
repricing assets minus repricing liabilities as a percentage of
total assets, was .60%, i.e. more of CBI's liabilities than assets
reprice within a one year time frame. Because more liabilities
reprice in the one year time frame a rise in interest rates will
cause a decrease in net interest income. The negative repricing
gap of CBI is minimal.
<TABLE>
<CAPTION>
Interest Rate Sensitivity
(Dollars in thousands)
<S> <C> <C> <C> <C> <C> <C> <C>
Over One Non-Interest
0 - 30 31 - 90 91 - 180 181 - 365 Year Bearing Totals
Assets
Cash and due
from banks $ -0- $ -0- $ -0- $ -0- $ -0- $ 8,583 $ 8,583
Federal funds sold 2,850 -0- -0- -0- -0- -0- 2,850
Investments 8,059 4,397 8,703 16,660 53,953 -0- 91,772
Loans 19,338 2,925 4,116 7,448 23,763 -0- 57,590
Other assets -0- -0- -0- -0- -0- 7,962 7,962
Totals $ 30,247 $ 7,322 $ 12,819 $ 24,108 $ 77,716 $ 16,545 $168,757
Sources of funds
Non-Interest bearing
deposits $ -0- $ -0- $ -0- $ -0- $ -0- $ 23,084 $ 23,084
Interest bearing
demand deposits 13,002 -0- -0- -0- 39,006 -0- 52,008
Savings 3,432 -0- -0- -0- 10,297 -0- 13,729
Time deposits 16,909 13,402 14,418 11,007 4,336 -0- 60,072
Notes payable 3,345 -0- -0- -0- -0- -0- 3,345
Other liabilities -0- -0- -0- -0- -0- 2,426 2,426
Shareholders' equity -0- -0- -0- -0- -0- 14,093 14,093
Totals $ 36,688 $13,402 $ 14,418 $ 11,007 $ 53,639 $ 39,603 $168,757
Rate sensitivity gap (6,441) (6,080) (1,599) 13,101 24,077 (23,058)
Cumulative rate
sensitivity gap (6,441) (12,521) (14,120) (1,019) 23,058 -0-
Cumulative rate
sensitivity gap as
a percentage of
total assets -3.82% -7.42% -8.37% -0.60% 13.66% 0.00%
Average Balances, Yields and Rates Paid Table 1
The table below summarizes average assets, liabilities and shareholders' equity, interest earned and paid and
average yields and rates for the two years ended December 31, 1993:
1993 1992
Average Income/ Yields/ Average Income/ Yields/
(Dollars in thousands) Balances Expense Rates Balances Expense Rates
Assets
Loans (1) 60,513 5,479 9.05% 66,930 6,489 9.70%
Investment securities 90,465 5,044 5.58% 86,968 5,693 6.55%
Federal funds sold 6,390 180 2.82% 6,916 230 3.33%
Total Earning Assets 157,368 10,703 6.80% 160,814 12,412 7.72%
Allowance for possible loan
losses (1,314) (1,374)
Other assets 15,127 15,079
Total assets 171,181 174,519
Liabilities and shareholders' equity
Interest-bearing deposits:
Deposits other than time 67,492 1,755 2.60% 64,116 2,200 3.43%
Time deposits 62,030 2,237 3.61% 69,881 3,296 4.72%
Total interest -
bearing deposits 129,522 3,992 3.08% 133,997 5,496 4.10%
Notes payable 3,494 252 7.21% 5,656 378 6.68%
Total interest -
bearing liabilities 133,016 4,244 3.19% 139,653 5,874 4.21%
Noninterest-bearing deposits 22,718 21,812
Other liabilities 2,327 2,235
Shareholders' equity 13,120 10,819
Total liabilities and
shareholders' equity 171,181 174,519
Net interest spread 3.61% 3.51%
Net interest income/margin 6,459 4.10% 6,538 4.07%
(1) Interest income includes loan fees of $157,000 and $192,000 for the years ended December 31, 1993 and 1992.
Nonaccrual loans are included in average balances and income on such loans is recognized on a cash basis.
Interest Rate/Volume Analysis Table 2
1993/1992
(Dollars in thousands) Change due to
Total
Rate Volume Change
Interest Income
Loans (376) (634) (1,010)
Investment Securities
Treasuries (107) (163) (270)
Agencies (787) 661 (126)
Municipals (7) (24) (31)
Other Securities (4) (217) (221)
Interest-bearing deposits with
other banks 0 (1) (1)
Federal funds sold (32) (18) (50)
Total interest income (1,313) (396) (1,709)
Interest expense
Deposits
Deposits other than time (564) 119 (445)
Time deposits (691) (368) (1,059)
Notes payable 0 (126) (126)
Total interest expense (1,255) (375) (1,630)
Net interest income (58) (21) (79)
1992/1991
Change due to
Total
Rate Volume Change
Interest Income
Loans (841) (527) (1,368)
Investment Securities
Treasuries (263) 72 (191)
Agencies (678) 673 (5)
Municipals (7) (145) (152)
Other Securities (32) (161) (193)
Interest-bearing deposits with
other banks (2) (56) (58)
Federal funds sold (152) 90 (62)
Total interest income (1,975) (54) (2,029)
Interest expense
Deposits
Deposits other than time (1,225) 486 (739)
Time deposits (1,311) (668) (1,979)
Notes payable (115) (142) (257)
Total interest expense (2,651) (324) (2,975)
Net interest income 676 270 946
NOTE: The changes in interest due to both volume and rate have
been allocated proportionally between rate and volume.
Interest income includes loan fees of $157,000, $192,000,
and $192,000 for the years ended December 31, 1993, 1992,
and 1991. Nonaccrual loans are included in average
balances and income on such loans is recognized on a cash
basis.
Provision for Possible Loan Losses. The provision for loan
losses charged to operating expense is the result of a continuing
review and assessment of the loan portfolio, taking into
consideration the history of chargeoffs in the loan portfolio by
category, the current economic conditions in the lending area, the
payment history, ability to repay and strength of collateral of
specific borrowers, and other relevant factors. The 1993 provision
is $75,000, compared to $150,000 in 1992. Recoveries in 1993 of
$221,000 exceeded chargeoffs of $165,000 by $56,000.
CBI maintains an allowance for loan losses which it believes
is adequate to absorb reasonably foreseeable losses in the loan
portfolio. The allowance for loan losses increased $131,000 from
December 31, 1992 to 1993, caused by the $75,000 provision and the
$56,000 net recoveries. Coupled with the decrease in loans, the
allowance for loan losses as a percentage of total loans grew from
1.86% at year end 1992 to 2.25% at year end 1993.
Non-Interest Income. Non-interest income in 1993 totaled
$1,063,000 compared to $964,000 in 1992. The increase was caused
mostly by the increase in service charges and related fees on
deposit accounts. Included in non-interest income in 1992 was a
$202,000 loss on the sale of equity securities and a $246,000 gain
on the sale of other investment securities.
Non-Interest Expense. Non-interest expenses decreased
$147,000 or 2.87% from 1992 levels. Salaries and related benefits
declined $161,000 or 6.28%, caused entirely by a decrease of
$197,000 in the expense for hospitalization insurance for 1993.
Occupancy expense remained ------------------------.
virtually unchanged from 1992 to 1993, and amortization of the
intangibles associated with the purchase of the First National Bank
of Abbeville continued to decline. Other operating expenses
increased slightly. An increase in legal fees associated with the
pending merger were offset by a decline in the net costs of other
real estate owned and other foreclosed assets. For 1993, gains on
the sale of such properties exceeded the costs associated with
foreclosed properties. See Note 10 in the accompanying financial
statements for an analysis of the components of other operating
expenses.
The decrease in hospitalization insurance in 1993 results in
a large part from the reversal of an over-accrual of the estimated
1992 year end liability in CBI's self insured hospitalization plan.
The expense for 1994 is expected to be approximately $100,000
larger than in 1993.
The effective tax rate for 1993 was 32.5%, compared to 28.7%
in 1992. The 1992 effective rate was lower because of the
utilization of available tax credits.
Analysis of Financial Condition
Investment Securities. In May, 1993 the FASB issued SFAS No.
115, "Accounting for Certain Investments in Debt and Equity
Securities". This standard requires that CBI classify its
securities portfolio into securities held for trading, securities
held to maturity, and securities available for sale. Criteria are
established for determining whether a security is held for sale or
held to maturity. If the security does not fit into either one of
those categories, it is classified as available for sale. Gains
and losses caused by fluctuation in the market value of securities
held for sale are charged to the income statement in the year that
the increase or decrease in value occur. Fluctuations in the
market value, net of related tax effect, of securities available
for sale are accounted for as a change in a component of
stockholders' equity and are not charged to the income statement.
No adjustment to carrying value for fluctuations in market value is
made for securities held to maturity. CBI adopted this accounting
method effective December 31, 1993. Approximately 64% of the
existing investment portfolio was classified as held to maturity,
including all U. S. Treasuries and most U. S. Agencies. The
remaining 36% of the portfolio was classified as available for sale
and includes most mortgaged-backed securities. The classification
of these securities as available for sale resulted in an increase
to stockholders equity of $59,000. See Note 3 to the accompanying
financial statements for an analysis of securities between
available for sale and held to maturity, together with the
unrealized gains and losses for each category.
In 1993 average investment securities increased by $3,497,000
from 1992, and from 1991 to 1992 increased by $5,754,000. The
total market value of investment securities at December 31, 1993
was $92,546,000, including gross unrealized gains of $1,110,000 and
gross unrealized losses of $278,000. There were no realized gains
or losses from the sale of investment securities in 1993. Gross
gains of $246,000 and gross losses of $-0- were realized in 1992 on
the sale of investments in debt securities. The portion of the investment
securities portfolio classified as available for sale is used as a source of
liquidity and a means of managing interest rates and interest rate sensitivity.
In addition, the entire portfolio serves as a source of collateral on certain
deposits.
Securities Portfolio. The carrying amount of securities at
the dates indicated is set forth in the table below:
December 31
(Dollars in thousands) 1993 1992
Held to Maturity:
U. S. Treasury $ 16,491 $ 21,716
U. S. Agencies 33,305 25,098
Mortgage-backed securities 7,954 41,164
State and Political Subdivision 752 1,451
Total $ 58,502 89,429
Available for Sale:
U. S. Treasury $ -0- N/A
U. S. Agencies 6,897 N/A
Mortgage-backed securities 26,373 N/A
State and Political Subdivisions -0-
Total $ 33,270
Total Investment Securities $ 91,772 $ 89,429
Investment Securities Maturity Distribution. The amortized
cost and estimated market value of investment securities at
December 31, 1993, by contractual maturity, are shown below.
Expected maturities will differ from contractual maturities because
the issuers may have the right to prepay obligations with or
without penalties.
<PAGE>
After One Through After Five Through
Within One Year Five Years Ten Years Total
(Dollars in thousands) Amount Yield Amount Yield Amount Yield Amount Yield
Held to Maturity:
U. S. Treasury 12,372 5.01% 4,119 4.44% -0- 0.00% 16,491 4.87%
U. S. Agencies 5,020 6.04% 28,286 5.55% -0- 0.00% 33,305 5.62%
State and Political
Subdivisions 50 8.99% 231 9.06% 470 5.18% 752 6.62%
Subtotal 17,442 32,636 470 50,548 5.39%
Mortgage-backed
securities 7,954 7.06%
Total - Held to
Maturity 58,502 5.62%
Available for Sale:
U. S. Treasury -0- 0.00% -0- 0.00% -0- 0.00% -0- 0.00%
U. S. Agencies 5,854 3.35% 1,043 4.74% -0- 0.00% 6,897 3.56%
State and Political
Subdivisions -0- 0.00% -0- 0.00% -0- 0.00% -0- 0.00%
Subtotal 5,854 1,043 -0- 6,897 3.56%
Mortgage-backed
securities 26,373 6.57%
Total - Available
for Sale 33,270 5.95%
Total Investment
Securities 91,772 5.74%
NOTE: The yield on tax exempt securities is not on a tax equivalent basis for this schedule.
<PAGE>
CBI's mortgage-backed securities and collateralized mortgage
obligations consists of ownership interests in pools of residential
mortgages guaranteed by U. S. government agencies with contract
maturities up to 30 years. However, the underlying mortgages are
subject to significant prepayments, particularly when the contract
rates on the mortgages exceed the current market rates on such
loans. The weighted average life of the mortgage backed securities
portfolio, based on current prepayment assumptions, is 1.9 years.
Loans. Loans outstanding at December 31, 1993 totaled
$57,590,000, net of the allowance for loan losses. Average loans
in 1993 were $60,513,000, a decrease of $6,417,000 from the average
for 1992. The 1992 average of $66,930,000 was a decrease of
$4,709,000 form the 1991 average balance.
The following table shows the amounts of loans outstanding
according to the type of loan for each of the periods rendered:
December 31
1993 1992
(Dollars in thousands) Amount Percent Amount Percent
Loans:
Real Estate-Construction $ 963 1.63% $ 1,153 1.79%
Real Estate-Other 33,971 57.66% 36,991 57.51%
Commercial, Industrial
and Agricultural 16,925 28.73% 18,448 28.68%
Consumer 7,007 11.89% 7,698 11.97%
Other 50 0.09% 29 0.05%
Total $ 58,916 100.00% $ 64,319 100.00%
Allowance for possible
loan losses:
Real Estate $ 380 28.66% $ 264 22.09%
Commercial, Industrial
and Agricultural 526 39.67% 487 40.75%
Consumer 89 6.71% 77 6.44%
Unallocated 331 24.96% 367 30.72%
Total $ 1,326 100.00% $ 1,195 100.00%
Real estate loans comprise 59.29% and commercial, industrial
and agricultural loans 28.73% of the loan portfolio at December 31,
1993. These percentages are consistent with 1992.
At December 31, 1993, fixed rate loans totaled $44,520,000 and
variable rate loans totaled $14,396,000.
Nonperforming Assets. Non-accrual loans, restructured loans
and foreclosed assets are include din nonperforming assets.
Nonperforming assets declined $1,591,000 during 1993 to $1,875,000
at December 31, 1993. The decrease of $1,658,000 in other real
estate owned was caused principally by the sale of a large piece of
improved real estate. Non-performing loans increased by $67,000
from year end 1992.
Nonaccrual loans are loans on which the accrual of interest
income has been discontinued and previously accrued interest has
been reversed, because the borrower's financial condition has
deteriorated to the extent that the collection of principal and
interest is doubtful. Until the loans is returned to performing
status, generally as the result of the full payment of all past due
principal and interest, interest income is recorded on the cash
basis. Interest income that would have been recognized on
nonaccrual loans had those loans been on accrual status at
contractual terms throughout 1993 was approximately $81,000.
Interest income recognized on nonaccrual loans for 1993 was not
significant.
The table below summarizes non-performing assets and includes
several ratios that measure the level of non-performing assets:
December 31
(Dollars in thousands) 1993 1992
Nonperforming loans
Nonaccrual loans $ 1,267 $ 848
Restructured loans -0- 352
Total nonperforming loans 1,267 1,200
Real estate and other property
acquired by foreclosure 608 2,266
Total nonperforming assets $ 1,875 $ 3,466
Loans 90 days or more past due
and still accruing interest $ 81 $ 43
Nonperforming loans as a % of
total loans 2.15% 1.87%
Nonperforming assets as a % of
total loans and real estate and
other property acquired by
foreclosure 3.15% 5.21%
Allowable for possible loan losses
as a % of nonperforming loans 104.66% 99.58%
Allowable for possible loan losses
as a % of nonperforming assets 70.72% 34.48%
Summary of Loan Loss Experience. The loan loss experience for
the two years ended December 31, 1993 is summarized in the
following table:
(Dollars in thousands) 1993 1992
Balance at beginning of year $ 1,195 $ 1,306
Loans charged off:
Real Estate - Construction -0- -0-
Real Estate - Other 50 -0-
Commercial, Industrial and Agricultural 42 250
Consumer 73 156
Total charge-offs 165 406
Recoveries on loans previously
charged off
Real Estate - Construction 2 -0-
Real Estate - Other 11 5
Commercial, Industrial and Agricultural 152 93
Consumer 56 47
Total recoveries 221 145
Net loans charged off (recoveries) (56) 261
Additions charged to operations 75 150
Balance at end of year $ 1,326 $ 1,195
Ratio of net charge-offs (recoveries)
to average loans outstanding during
the period (0.09% 0.39%
Deposits. Total deposits at December 31, 1993 were
$148,893,000, down $13,580,000 from the December 31, 1992 total of
$162,473,000. Average deposits in 1993 declined $3,568,000 from
1992. Average time deposits decreased $7,851,000 in 1993 and was
partially offset by increases in other types of deposits.
Time deposits of $100,000 or more were $13,725,000 at December
31, 1993, which comprises 9.22% of total deposits. CBI had no
brokered deposits at December 31, 1993.
Deposit Average Balances and Rates. The following table
indicates the average daily amount of deposits and rates paid on
such deposits for the periods indicated:
December 31
1993 1992
(Dollars in thousands) Amount Rate Amount Rate
Noninterest-bearing
demand $ 22,718 0.00% $ 21,812 0.00%
Interest-bearing
demand 53,419 2.63% 51,257 3.46%
Savings 14,074 2.50% 12,859 3.32%
Time deposits 62,030 3.61% 69,881 4.72%
Total deposits $ 152,241 2.62% $ 155,809 3.53%
Maturities of Time Deposits of $100,000 or More. The
maturities of time deposits of $100,000 or more are summarized for
December 31, 1993 in the table below:
December 31, 1993
(Dollars in thousands)
3 months or less 7,193
Over 3 months to 6 months 2,942
Over 6 months to 12 months 2,731
Over 12 months 859
Total 13,725
Liquidity. Liquidity involves CBI's ability to raise funds to
support asset growth or to reduce assets, meet deposit withdrawals
and other borrowing needs, maintain reserve requirements and
otherwise operate the company on an ongoing basis.
As shown in the accompanying 1993 statement of cash flows,
cash and cash equivalents decreased by $6,792,000 from December 31,
1992 to December 31, 1993. The decline in CBI's assets and
deposits has caused this decrease in liquidity position. Net
income from operations contributed $3,749,000 to cash and cash
equivalents. During the past two years CBI has relied on its
position in federal funds sold, payments on loans and maturities in
the investment portfolio for liquidity. These factors are
considered to maintain adequate liquidity for CBI.
The lease on a branch facility in Abbeville will expire at the
end of 1994. CBI has elected to build a new facility rather than
renew the lease. Construction should be completed in 1994 at a
total estimated cost of $800,000. CBI will pay for the
construction out of existing liquidity. There are no other
material capital expenditures planned for 1994 or subsequent years.
Capital Resources. CBI maintains adequate capital for
regulatory purposes and has sufficient capital to absorb the risks
inherent in the business. Risk-based capital requirements have
been established that weight different assets according to the
level of risk associated with that type of assets. The table below
summarizes CBI's capital levels for December 31, 1993 and 1992:
<PAGE>
Specific Minimum
Ratio
December 31 Requirements
1993 1992
Tier 1 Capital 21.78% Not Available 4.00%
Total Capital 23.03% Not Available 8.00%
Leverage Ratio 9.79% 8.20% 4% - 5%
COMMERCIAL BANCSHARES, INC.
AND SUBSIDIARY
Consolidated Financial Statements
as of December 31, 1993 and 1992
and For Each of the Three Years
in the Period Ended December 31, 1993
Together with Auditors' Report
COMMERCIAL BANCSHARES, INC.
AND SUBSIDIARY
Consolidated Financial Statements
as of December 31, 1993 and 1992
and For Each of the Three Years
in the Period Ended December 31, 1993
Together with Auditors' Report
TABLE OF CONTENTS
Exhibit Page
Independent Auditors' Report 1
Consolidated Statements of Condition A 2
Consolidated Statements of Income B 3
Consolidated Statements of Changes in
Shareholders' Equity C 4
Consolidated Statements of Cash Flows D 5
Notes to Consolidated Financial Statements E 6 - 20
Independent Auditors' Report on Additional
Information 21
Additional Information:
Consolidating Statement of Condition
Information F 22
Consolidating Statement of Income
Information G 23
Consolidating and Eliminating Entries H 24
INDEPENDENT AUDITORS' REPORT
Board of Directors
Commercial Bancshares, Inc. and Subsidiary
Abbeville, Louisiana
We have audited the accompanying consolidated statements of
condition of Commercial Bancshares, Inc. and Subsidiary as of
December 31, 1993 and 1992, and the related consolidated statements
of income, changes in shareholders' equity and cash flows for each
of the three years in the period ended December 31, 1993. These
financial statements are the responsibility of the Holding
Corporation and Subsidiary's management. Our responsibility is to
express an opinion on these financial statements based on our
audits.
We conducted our audits in accordance with generally accepted
auditing standards. Those standards require that we plan and
perform the audit to obtain reasonable assurance about whether the
financial statements are free of material misstatement. An audit
includes examining, on a test basis, evidence supporting the
amounts and disclosures in the financial statements. An audit also
includes assessing the accounting principles used and significant
estimates made by management, as well as evaluating the overall
financial statement presentation. We believe that our audits
provide a reasonable basis for our opinion.
In our opinion, the consolidated financial statements referred to
above present fairly, in all material respects, the financial
position of Commercial Bancshares, Inc. and Subsidiary as of
December 31, 1993 and 1992, and the results of their operations and
their cash flows for each of the three years in the period ended
December 31, 1993, in conformity with generally accepted accounting
principles.
As discussed in Note 8, Commercial Bancshares, Inc. and Subsidiary
changed its method of accounting for deferred income taxes as of
December 31, 1993.
January 25, 1994
<PAGE>
Exhibit A
COMMERCIAL BANCSHARES, INC. AND SUBSIDIARY
CONSOLIDATED STATEMENTS OF CONDITION - DECEMBER 31, 1993 AND 1992
(Dollars in Thousands)
Assets
1993 1992
Cash and Due from Banks $ 8,583 $ 6,835
Interest Bearing Deposits 7 47
Federal Funds Sold 2,850 11,350
Total Cash and Cash Equivalents 11,440 18,232
Investment Securities 91,772 89,429
Loans (net of allowance for loan losses of
$1,326 and $1,195 in 1993 and 1992,
respectively) 57,590 63,124
Premises and Equipment, Net 2,936 3,235
Real Estate and Other Property Acquired
by Foreclosure, Net 608 2,266
Accrued Interest Receivable 1,775 1,775
Other Assets 2,636 2,180
Total Assets $ 168,757 $ 180,241
Liabilities and Shareholders' Equity
Liabilities:
Deposits:
Non-interest Bearing Deposits $ 23,084 $ 26,143
Interest Bearing Deposits 125,809 136,330
Total Deposits 148,893 162,473
Accrued Interest Payable 473 555
Notes Payable 3,345 3,545
Other Liabilities 1,953 1,514
Total Liabilities 154,664 168,087
Shareholders' Equity:
Common Stock, $2 par value, 500,000 shares
authorized, 314,723 shares issued,
281,843 and 282,343 shares outstanding
in 1993 and 1992 629 629
Capital Surplus 591 515
Undivided Profits 13,968 12,163
Treasury Stock, 32,880 and 32,380 Shares
at Cost in 1993 and 1992 (1,154) (1,153)
Net Unrealized Gain on Investment
Securities Available for Sale 59 -0-
Total Shareholders' Equity 14,093 12,154
Total Liabilities and Shareholders'
Equity $ 168,757 $ 180,241
The accompanying Notes to Consolidated Financial Statements are an
integral part of these statements.
Exhibit B
COMMERCIAL BANCSHARES, INC. AND SUBSIDIARY
CONSOLIDATED STATEMENTS OF CONDITION - DECEMBER 31, 1993 AND 1992
(Dollars in Thousands)
1993 1992 1991
Interest Income:
Loans, Including Fees $ 5,479 $ 6,489 $ 7,857
Investment Securities:
Taxable 5,002 5,623 6,063
Non-taxable 42 70 229
Federal Funds Sold 180 230 292
Total Interest Income 10,703 12,412 14,441
Interest Expense:
Deposits 3,992 5,497 8,216
Notes Payable 252 377 635
Total Interest Expense 4,244 5,874 8,851
Net Interest Income 6,459 6,538 5,590
Provision For Loan Losses 75 150 10
Net Interest Income After Provision
For Loan Losses 6,384 6,388 5,580
Other Income:
Customer Service Fees 962 861 918
Loss on Sale of Marketable
Equity Securities -0- (202) (213)
Gain on Sale of Other
Investment Securities -0- 246 235
Other Income 101 59 83
Total Other Income 1,063 964 1,023
Other Expenses:
Salaries and Employee Benefits 2,404 2,565 2,510
Occupancy Expense 793 794 864
Amortization of Intangible Assets 131 155 176
Other Operating Expenses 1,650 1,611 2,020
Total Other Expenses 4,978 5,125 5,570
Income Before Income Tax Expense,
Extraordinary Items and Cumulative
Effect of a Change In Accounting
Principle 2,469 2,227 1,033
Income Tax Expense 802 638 163
Income Before Extraordinary Items
and Cumulative effect of a
Change in Accounting Principle 1,667 1,589 870
Extraordinary Items:
Benefit of Utilization of Net
Operating Loss Carryforward -0- 185 200
Gain on Debt Extinguishment,
Net of Income Taxes -0- 284 -0-
Cumulative Effect of a Change in
Accounting Principle 421 -0- -0-
Net Income $ 2,088 $ 2,058 $ 1,070
The accompanying Notes to Consolidated Financial Statements are an
integral part of these statements.
</TABLE>
<TABLE>
<CAPTION>
Exhibit C
COMMERCIAL BANCSHARES, INC. AND SUBSIDIARY
CONSOLIDATED STATEMENTS OF FOR THE YEARS ENDED
CHANGES IN SHAREHOLDERS' EQUITY DECEMBER 31, 1993, 1992 AND 1991
(Dollars in Thousands)
Net
Unrealized
Unrealized Gain on
Loss on Investment
Marketable Securities
Common Capital Undivided Treasury Equity Available
Stock Surplus Profits Stock Securities for Sale
<S> <C> <C> <C> <C> <C> <C>
Balance, December 31, 1990 $ 629 $ 515 $ 9,035 $(1,153) $ (473) $ -0-
Net Income 1,070
Change in Unrealized Loss on
Marketable Equity Securities 287
Balance, December 31, 1991 629 515 10,105 (1,153) (186) -0-
Net Income 2,058
Change in Unrealized Loss
on Marketable
Equity Securities 186
Balance, December 31, 1992 629 515 12,163 (1,153) -0- -0-
Net Income 2,088
Dividends ($1.00 per share) (283)
Sale of Treasury Stock 76 4
Purchase of Treasury Stock (5)
Change in Net Unrealized Gain
on Investment Securities
Available for Sale 59
Balance, December 31, 1993 $ 629 $ 591 $ 13,968 $(1,154) $ -0- $ 59
The accompanying Notes to Consolidated Financial Statements are an integral part of these statements.
Exhibit D
COMMERCIAL BANCSHARES, INC. AND SUBSIDIARY
FOR THE YEARS ENDED
CONSOLIDATED STATEMENTS OF CASH FLOWS DECEMBER 31, 1993, 1992 AND 1991
(Dollars in Thousands)
1993 1992 1991
Cash Flows From Operating Activities:
Net Income $ 2,088 $ 2,058 $ 1,070
Adjustments to Reconcile Net Income to Net Cash
Provided by Operating Activities:
Provision for Loan and Foreclosed Property Losses 193 217 337
Change in Deferred Income Taxes (542) (1) -0-
Net Premium Amortization and Discount Accretion 1,283 637 (315)
Net Gain on Sale of Investment Securities -0- (44) (22)
Gain on Debt Extinguishment -0- (431) -0-
(Gain) Loss on Disposition of Foreclosed Property
and Premises and Equipment (39) 30 22
Depreciation and Amortization 438 482 563
(Increase) Decrease in Accrued Interest Receivable
and Other Assets (34) (531) 795
Decrease in Accrued Interest Payable (83) (441) (358)
Increase (Decrease) in Other Liabilities 445 393 (72)
Net Cash Provided By Operating Activities 3,749 2,369 2,020
Cash Flows From Investing Activities:
Proceeds from Sales and Maturities of Investment Securities 41,751 45,924 16,283
Purchase of Investment Securities (45,319) (50,859) (24,768)
Net Decrease in Certificate of Deposit -0- -0- 1,000
Net Decrease in Loans 5,311 4,089 3,383
Proceeds from Sales of Foreclosed Property 1,799 905 1,656
Purchase of Additional Interest in Real Estate
Acquired By Foreclosure -0- (514) -0-
Purchase of Premises and Equipment (97) (95) (130)
Net Cash Provided By (Used In) Investing Activities 3,445 (550) (2,576)
Cash Flows From Financing Activities:
Net Increase (Decrease) in Demand Deposits, NOW
Accounts and Savings Accounts $ (9,445) $ 17,544 $ 7,042
Net Decrease in Certificates of Deposit (4,134) (10,149) (6,904)
Repayments of Notes Payable (200) (3,312) (863)
Payment of Dividends (282) -0- -0-
Net Sale of Treasury Stock 75 -0- -0-
Net Cash Provided By (Used In) Financing Activities (13,986) 4,083 (725)
Net Increase (Decrease) In Cash and Cash Equivalents (6,792) 5,902 (1,281)
Cash and Cash Equivalents, Beginning of Year 18,232 12,330 13,611
Cash and Cash Equivalents, End of Year $ 11,440 $ 18,232 $ 12,330
Supplemental Disclosure of Cash Flow Information:
Cash Paid During the Year for Interest $ 4,327 $ 6,315 $ 9,208
Cash Paid During the Year for Income Taxes 897 546 175
Income Tax Refunds Received During the Year 29 -0- 867
Transfers from Loans to Real Estate and
Other Property Acquired by Foreclosure 148 152 418
The accompanying Notes to Consolidated Financial Statements are an integral part of these statements.
Exhibit E
COMMERCIAL BANCSHARES, INC. AND SUBSIDIARY
NOTES TO CONSOLIDATED
FINANCIAL STATEMENTS DECEMBER 31, 1993, 1992 AND 1991
NOTE 1 - SUMMARY OF SIGNIFICANT ACCOUNTING AND REPORTING POLICIES:
The accounting and reporting policies of Commercial Bancshares, Inc. (Holding
Corporation) and Subsidiary conform to generally accepted accounting
principles and the prevailing practices within the banking industry. A
summary of significant accounting policies is as follows:
Principles of Consolidation
The consolidated financial statements include the accounts of Commercial
Bancshares, Inc. and its wholly-owned subsidiary, First Commercial Bank. All
material intercompany transactions and balances have been eliminated.
Fair Value of Financial Instruments
Statement No. 107 (SFAS No. 107), "Disclosures about Fair Value of Financial
Instruments," issued by the Financial Accounting Standards Board in December
1991, requires disclosure of fair value information about financial
instruments, whether or not recognized in the balance sheet, for which it is
practicable to estimate that value. The techniques are significantly
affected by the assumptions used, including the discount rate and estimates
of future cash flows. In that regard, the derived fair value estimates
cannot be substantiated by comparison to independent markets and, in many
cases, could not be realized in immediate settlement of the instrument.
Statement 107 excludes certain financial instruments and all nonfinancial
instruments from its disclosure requirements. Accordingly, the aggregate
fair value amounts presented do not represent the underlying value of the
Holding Corporation and Subsidiary.
The following methods and assumptions were used to estimate the fair value of
each class of financial instruments for which it is practicable to estimate
that value:
Cash and Cash Equivalents
For those short-term instruments, the carrying amount is a reasonable
estimate of fair value.
Investment Securities
Fair value equals quoted market price, if available. If a quoted market
price is not available, fair value is estimated using quoted market prices
for similar securities.
Loans
The fair value is estimated by discounting the future cash flows using the
current rates at which similar loans would be made to borrowers with
similar credit ratings and for the same remaining maturities.
Deposits
The fair value of demand deposits, NOW accounts, savings accounts, and
money market deposits is the amount payable on demand at the reporting
date. The fair value of fixed-maturity certificates of deposit is
estimated using the rates currently offered for deposits of similar
remaining maturities.
Exhibit E
Continued
COMMERCIAL BANCSHARES, INC. AND SUBSIDIARY
NOTES TO CONSOLIDATED
FINANCIAL STATEMENTS DECEMBER 31, 1993, 1992 AND 1991
NOTE 1 - SUMMARY OF SIGNIFICANT ACCOUNTING AND REPORTING POLICIES
(Continued):
Notes Payable
Rates currently available to the Holding Corporation and Subsidiary for
debt with similar terms and remaining maturities are used to estimate fair
value of existing debt.
Commitments to Extend Credit and Standby Letters of Credit
The fair value of commitments is estimated using the fees currently
charged to enter into similar agreements, taking into account the
remaining terms of the agreements and the present creditworthiness of the
counterparties. For fixed-rate loan commitments, fair value also
considers the difference between current levels of interest rates and the
committed rates. The fair value of letters of credit is based on fees
currently charged for similar agreements or on the estimated cost to
terminate them or otherwise settle the obligations with the counterparties
at the reporting date.
Investment Securities
In September 1993, SFAS 115, "Accounting for Certain Investments in Debt and
Equity Securities," was issued by the Financial Accounting Standards Board.
The Statement modifies the accounting and reporting for certain investments
as follows:
Debt securities that the Holding Corporation and Subsidiary intend and
show the ability to hold to maturity are classified as "held to maturity
securities" and reported at cost, adjusted for amortization of premiums
and accretion of discounts which are recognized as adjustments to interest
income. Debt and equity securities that are bought and held principally
for the purpose of selling them in the near future are classified as
"trading securities" and reported at fair market value, with unrealized
gains and losses included in income for the year. Debt and equity
securities not included in the above two categories are classified as
"available for sale securities", with unrealized gains and losses excluded
from income and reported as a separate component of shareholders' equity.
Generally effective for years beginning after December 15, 1993, the
Statement allows companies to apply the provisions as of the end of an
earlier fiscal year for which annual financial statements have not previously
been issued. The amounts included for investment securities in the financial
statements as of December 31, 1993 have been accounted for under SFAS 115.
For previous years, investment securities, other than marketable equity
securities, are carried at cost, adjusted for amortization of premiums and
accretion of discounts. Marketable equity securities are stated at the lower
of aggregate cost or market and are adjusted by a charge to a valuation
account, "Unrealized Loss on Marketable Equity Securities", a component of
shareholders' equity.
In all cases, realized gains or losses on disposition of investment
securities are recorded in other income on the trade date based on the net
proceeds and the adjusted carrying amount of the securities sold using the
specific identification method.
Loans
Loans are stated at the principal amount outstanding, net of unearned
discount and allowance for loan losses. Unearned discount relates
principally to consumer installment loans. The related interest income is
recognized principally by the simple interest method which records interest
based on the principle amount outstanding. Loan fees which represent an
adjustment to the interest yield are deferred and amortized over the
estimated life of the loan.
Exhibit E
Continued
COMMERCIAL BANCSHARES, INC. AND SUBSIDIARY
NOTES TO CONSOLIDATED
FINANCIAL STATEMENTS DECEMBER 31, 1993, 1992 AND 1991
NOTE 1 - SUMMARY OF SIGNIFICANT ACCOUNTING AND REPORTING POLICIES
(Continued):
Loans (Continued)
When the payment of principal or interest on a loan is delinquent for 90
days, or earlier in some cases, the loan is placed on non-accrual status,
unless the loan is in the process of collection and the underlying collateral
fully supports the carrying value of the loan. If the decision is made to
continue accruing interest on the loan, periodic reviews are made to confirm
the accruing status of the loan. When a loan is placed on non-accrual
status, interest accrued during the current year prior to the judgement of
uncollectibility is charged to operations. Interest accrued during prior
periods is charged to the allowance for loan losses. Generally, any payments
received on non-accrual loans are applied first to outstanding loan amounts
and next to the recovery of charged-off loan amounts. Any excess is treated
as recovery of lost interest.
Allowance For Loan Losses
The allowance for loan losses is a valuation allowance available for losses
incurred on loans. All losses are charged to the allowance for loan losses
when the loss actually occurs or when a determination is made that a loss is
likely to occur. Recoveries are credited to the allowance at the time of
recovery.
Management's judgment as to the level of future losses on existing loans
involves the consideration of current and anticipated economic conditions and
their potential effects on specific borrowers; an evaluation of the existing
relationships among loans, potential loan losses, and the present level of
the allowance; results of examinations of the loan portfolio by regulatory
agencies; and management's internal review of the loan portfolio.
It should be understood that estimates of future loan losses involve an
exercise of judgment. While it is possible that in particular periods the
Bank may sustain losses which are substantial relative to the allowance for
loan losses, it is the judgment of management that the allowance for loan
losses reflected in the consolidated statements of condition is adequate to
absorb possible losses in the existing loan portfolio.
Premises and Equipment
Premises and equipment are stated at cost less accumulated depreciation.
Depreciation expense is computed primarily using the straight-line method
over the estimated useful lives of the assets which range from 3 to 40 years.
Leasehold improvements are amortized on a straight-line basis over the
periods of the leases or the estimated useful lives, whichever is shorter.
Real Estate Acquired by Foreclosure
Real estate acquired by foreclosure is recorded at the lower of the Bank's
cost or the asset's fair value, less estimated costs to sell, which becomes
the property's new basis. Any write-downs based on the asset's fair value at
date of acquisition are charged to the allowance for loan losses. Costs
incurred in maintaining foreclosed real estate and subsequent write-downs to
reflect declines in the fair value of the property are included in income
(loss) on foreclosed property. Gains on sales of such real estate are taken
into income based on the buyer's initial and continuing investment in the
property.
Exhibit E
Continued
COMMERCIAL BANCSHARES, INC. AND SUBSIDIARY
NOTES TO CONSOLIDATED
FINANCIAL STATEMENTS DECEMBER 31, 1993, 1992 AND 1991
NOTE 1 - SUMMARY OF SIGNIFICANT ACCOUNTING AND REPORTING POLICIES
(Continued):
Intangible Assets
Unamortized costs paid in excess of the fair market value of the acquired net
tangible assets of First National Bank of Abbeville in 1986 are included in
other assets in the consolidated statements of condition. Identifiable
intangible assets, principally related to depositor and borrower
relationships, are being amortized using an accelerated method over the
estimated periods benefitted (6 to 12 years). The unamortized balance at
December 31, 1993 and 1992 was $182,000 and $240,000, respectively.
Amortization expense on identifiable intangible assets was $58,000, $81,000
and $107,000 for 1993, 1992 and 1991, respectively. The remaining costs
(goodwill) are being amortized on the straight-line basis over 12 years. The
unamortized balance at December 31, 1993 and 1992 was $160,000 and $199,000,
respectively. Amortization expense was $39,000 for each of the years ending
December 31, 1993, 1992 and 1991, respectively.
Income Taxes
Provisions for income taxes are based on amounts reported in the statements
of income (after adjustments for non-taxable items) and include deferred
taxes on temporary differences in the recognition of income and expense for
tax and financial statement purposes. For 1993, as discussed in Note 8,
deferred taxes are computed on the liability method as prescribed in SFAS No.
109, "Accounting for Income Taxes."
Deferred tax assets are attributed primarily to the provision for loan
losses, writedowns on other real estate owned and other property acquired and
deferred compensation. Deferred tax liabilities are attributed primarily to
depreciation on premises and equipment and a change in the method for
accounting for bad debts for tax purposes.
The tax sharing agreement between the Holding Corporation and the Bank states
that the Bank is responsible for the tax liability less applicable credits
calculated as if it were filing a separate return.
Consolidated Statements of Cash Flows
For purposes of reporting cash flows, cash and cash equivalents include cash
on hand, amounts due from banks, including interest bearing deposits and
federal funds sold. Generally, federal funds are purchased and sold for one
day periods.
Reclassifications
Certain reclassifications have been made to the 1991 and 1992 consolidated
financial statements in order to conform to the classifications adopted for
reporting in 1993.
<PAGE>
NOTE 2 - CASH AND DUE FROM BANKS:
The Bank is required to maintain average reserve balances with the Federal
Reserve Bank. Cash and due from banks in the consolidated statements of
condition included amounts so restricted of $500,000 at December 31, 1993 and
1992.
Exhibit E
Continued
COMMERCIAL BANCSHARES, INC. AND SUBSIDIARY
NOTES TO CONSOLIDATED
FINANCIAL STATEMENTS DECEMBER 31, 1993, 1992 AND 1991
NOTE 3 - INVESTMENT SECURITIES:
The amortized cost and related market value of investment securities (in
thousands) are presented below:
December 31, 1993
Amortized Unrealized Unrealized Market
Cost Gains Losses Value
Investment Securities Held
to Maturity:
U.S. Treasuries $16,491 $ 105 $ -0- $16,596
U.S. Agencies 33,305 462 (78) 33,689
State and Political
Subdivisions 752 40 -0- 792
Mortgage-Backed Securities 7,954 260 (15) 8,199
Subtotal 58,502 867 (93) 59,276
Investment Securities Available for Sale:
U.S. Treasuries -0- -0- -0- -0-
U.S. Agencies 6,918 15 (36) 6,897
State and Political Subdivisions -0- -0- -0- -0-
Mortgage-Backed Securities 26,294 228 (149) 26,373
Subtotal 33,212 243 (185) 33,270
Total $91,714 $ 1,110 $ (278) $92,546
December 31, 1992
Amortized Unrealized Unrealized Market
Cost Gains Losses Value
U.S. Treasuries $21,716 $ 234 $ (42) $21,908
U.S. Agencies 25,098 266 (105) 25,259
State and Political Subdivisions 1,451 42 -0- 1,493
Mortgage-Backed Securities 41,164 652 (148) 41,668
Totals $89,429 $ 1,194 $ (295) $90,328
The following is a reconciliation of the amortized cost of investment
securities (in thousands) to the amount reported in the financial statements
for the year ended December 31, 1993:
Amortized Cost of Investment Securities $91,714
Unrealized Holding Gains on Securities
Available for Sale 243
Unrealized Holding Losses on Securities
Available for Sale (185)
Carrying Value of Investment Securities $91,772
Exhibit E
Continued
COMMERCIAL BANCSHARES, INC. AND SUBSIDIARY
NOTES TO CONSOLIDATED
FINANCIAL STATEMENTS DECEMBER 31, 1993, 1992 AND 1991
NOTE 3 - INVESTMENT SECURITIES (Continued):
The amortized cost and related market value of investment securities (in
thousands) at December 31, 1993, by contractual maturity, are shown below.
Expected maturities will differ from contractual maturities because borrowers
may have the right to call or prepay obligations with or without call or
prepayment penalties.
Amortized Market
Cost Value
Investment Securities Held to Maturity:
Due in One Year or Less $ 17,442 $ 17,549
Due After One Year through Five Years 32,636 33,037
Due After Five Years through Ten Years 470 491
Due After Ten Years -0- -0-
50,548 51,077
Mortgage-Backed Securities 7,954 8,199
Subtotal 58,502 59,276
Investment Securities Available for Sale:
Due in One Year or Less $ 5,885 $ 5,854
Due After One Year through Five Years 1,033 1,043
Due After Five Years through Ten Years -0- -0-
Due After Ten Years -0- -0-
6,918 6,897
Mortgage-Backed Securities 26,294 26,373
Subtotal 33,212 33,270
Totals $ 91,714 $ 92,546
Proceeds from sales of investments in debt securities during 1993 were $-0-.
Proceeds from sales of investments in debt securities during 1992 were
$8,360,000. Gross gains of $246,000 and gross losses of $-0- were realized
on those sales.
Proceeds from sales on investments in debt securities during 1991 were
$15,340,000. Gross gains of $236,000 and gross losses of $1,000 were
realized on those sales.
Investment securities with a carrying amount of approximately $28,709,000 and
$30,320,000 and an estimated market value of $29,128,000 and $30,886,000 at
December 31, 1993 and 1992, respectively, were pledged to secure public
deposits and for other purposes required or permitted by law.
<PAGE>
NOTE 4 - LOANS:
The loan portfolio consists of various types of loans classified by major
type (in thousands) as follows:
1993 1992
Real Estate - Construction $ 963 $ 1,153
Real Estate - Other 33,971 36,991
Commercial and Industrial 16,409 17,807
Consumer 7,007 7,698
Agriculture 516 641
Other 50 29
58,916 64,319
Less Allowance for Loan Losses 1,326 1,195
Totals $ 57,590 $ 63,124
Exhibit E
Continued
COMMERCIAL BANCSHARES, INC. AND SUBSIDIARY
NOTES TO CONSOLIDATED
FINANCIAL STATEMENTS DECEMBER 31, 1993, 1992 AND 1991
NOTE 4 - LOANS (Continued):
Loans had an estimated fair value of $58,392,000 and $64,229,000 at December
31, 1993 and 1992, respectively.
As of December 31, 1993 and 1992, loans outstanding to directors, officers,
and their affiliates were approximately $3,075,000 and $4,634,000,
respectively. In the opinion of management, all transactions entered into
between the Bank and such related parties have been and are, in the ordinary
course of business, made on the same terms and conditions as similar
transactions with unaffiliated persons. During 1993, $2,647,000 of new and
renewal loans were made and repayments of $4,206,000 were received. Letters
of Credit and unadvanced lines of credit to directors, officers, and their
affiliates totaled $1,357,000 and $1,305,000 at December 31, 1993 and 1992.
At December 31, 1993, fixed rate loans totaled $44,520,000 and variable rate
loans totaled $14,396,000.
At December 31, 1993, 1992 and 1991 loans on which the accrual of interest
had been discontinued or reduced amounted to $1,267,000, $848,000 and
$1,547,000, respectively. Interest income foregone on these non-accrual
loans was $81,000, $82,000 and $44,000 for the years ended December 31, 1993,
1992 and 1991, respectively.
The Bank had five troubled debt restructurings during 1992 involving
commercial loans. The aggregate recorded investment at December 31, 1992 was
$352,000. The amount of interest income included in net income during 1992
from these loans was $22,000. If the loans would have been continued under
the original terms gross interest income for 1992 would have been $31,000.
In 1991, there were six troubled debt restructings at an aggregate recorded
investment of $817,000. Recorded interest income on these loans was $10,000
for 1991. If the restructed loans had continued under their original terms
gross interest income for 1991 would have been $148,000. There were no
troubled debt restructurings during 1993.
An analysis of activity in the allowance for loan losses (in thousands) is as
follows:
1993 1992 1991
Balance at Beginning of Year $ 1,195 $ 1,306 $ 2,064
Provision Charged to Operations 75 150 10
Loans Charged Off (165) (406) (966)
Loan Recoveries 221 145 198
Balance at End of Year $ 1,326 $ 1,195 $ 1,306
<PAGE>
NOTE 5 - PREMISES AND EQUIPMENT:
Premises and equipment (in thousands) are summarized below:
1993 1992
Land $ 456 $ 456
Buildings 3,511 3,511
Leasehold Improvements 90 296
Furniture, Fixtures, and Equipment 2,584 3,039
Construction in Progress 1 -0-
6,642 7,302
Less Accumulated Depreciation and Amortization (3,706) (4,067)
Premises and Equipment, Net $ 2,936 $ 3,235
Depreciation expense included in the consolidated statements of income was
$323,000, $342,000 and $403,000 for the years ended December 31, 1993, 1992
and 1991, respectively.
Exhibit E
Continued
COMMERCIAL BANCSHARES, INC. AND SUBSIDIARY
NOTES TO CONSOLIDATED
FINANCIAL STATEMENTS DECEMBER 31, 1993, 1992 AND 1991
NOTE 6 - DEPOSITS:
Deposits (in thousands) are summarized below:
1993 1992
Demand $ 23,084 $ 26,143
NOW Accounts 27,097 28,641
Savings 13,729 14,775
Money Market Accounts 24,911 28,707
Time Certificates of Deposits 60,072 64,207
Totals $ 148,893 $ 162,473
Deposits had an estimated fair value of $149,140,000 and $162,736,000 at
December 31, 1993 and 1992, respectively.
Included in the interest bearing deposits are certificates of deposit in
amounts of $100,000 or more totaling $13,725,000 and $13,960,000 at December
31, 1993 and 1992, respectively.
NOTE 7 - NOTES PAYABLE:
Notes payable consist of the following note secured by 100% of the stock of
the subsidiary bank. The note is subject to the terms of a loan agreement
which specifies minimum net worth and capital requirements, common stock
dividend restrictions, loan loss reserve requirements, limitations on non-
performing assets and other customary covenants.
1993 1992
Note payable to a bank (in thousands),
bearing interest payable quarterly at
the rate of 1% in excess of the prime
rate of the lending bank, 7.00% at
December 31, 1993 and 1992. $ 3,345 $ 3,545
Notes payable had a estimated fair value of $3,345,000 and $3,545,000 at
December 31, 1993 and 1992, respectively.
Maturities of notes payables (in thousands) for each of the five years
succeeding December 31, 1993, are as follows:
Year Amount
December 31, 1994 $ 390
December 31, 1995 655
December 31, 1996 705
December 31, 1997 780
December 31, 1998 815
Total $ 3,345
During 1992 a portion of the notes payable were discounted by the lending
bank. The extraordinary item reported at December 31, 1992 is the $431,000
discount allowed by the lending bank, net of $147,000 in related income
taxes.
Exhibit E
Continued
COMMERCIAL BANCSHARES, INC. AND SUBSIDIARY
NOTES TO CONSOLIDATED
FINANCIAL STATEMENTS DECEMBER 31, 1993, 1992 AND 1991
NOTE 8 - CHANGE IN ACCOUNTING PRINCIPLE:
Deferred income taxes at December 31, 1992 were computed under the method
prescribed in the Accounting Principles Board Opinion No. 11 (APB No. 11)
issued by the American Institute of Certified Public Accountants.
In early 1992, the Financial Accounting Standards Board issued Statement No.
109 (SFAS No. 109) which supersedes APB No. 11 for the accounting for income
taxes. SFAS No. 109 requires companies to change from the deferred method of
accounting for income taxes to the liability method. Under the liability
method, deferred tax balances are calculated at balance sheet dates and
represent amounts of income taxes refundable or payable in future years
resulting from temporary differences. The change in deferred tax balances is
recorded as an element of income tax expense in the financial statements.
The cumulative effect of restating deferred taxes as of January 1, 1993 was
an increase in net income of $421,000.
NOTE 9 - INCOME TAXES:
The components of the provision for federal income taxes (in thousands) are
as follows:
1993 1992 1991
Current Income Tax Provision $ 948 $ 601 $ 121
Income Taxes Related to Gain on Debt
Extinguishment -0- (147) -0-
Benefit of Prior Net Operating Losses -0- 185 200
Refund in Excess of Benefit Recorded
in Prior Year (30) -0- (98)
Change in Deferred Income Taxes (116) (1) (60)
Total $ 802 $ 638 $ 163
The provision for federal income taxes differs from the amount computed by
applying the federal income tax statutory rate on operations as follows (in
thousands):
1993 1992 1991
Amount % Amount % Amount %
Taxes Calculated at Statutory
Rate $ 839 34.0 $ 757 34.0 $ 351 34.0
Increases (Decreases) in Taxes
Resulting From:
Tax-Exempt Interest (29) (1.2) (38) (1.7) (116) (11.2)
Amortization of Costs Incurred
and Excess Purchase Price
of Acquired Company 39 1.6 55 2.5 77 7.5
Utilization of Available Tax
Credits -0- -0- (164) (7.4) -0- -0-
Refund in Excess of Benefit
Recorded (30) (1.2) -0- -0- (98) (9.5)
Deferred Tax from Prior Year -0- -0- -0- -0- (60) (5.8)
Other, Net (17) (.7) 28 1.3 9 .8
Totals $ 802 32.5 $ 638 28.7 $ 163 15.8
Exhibit E
Continued
COMMERCIAL BANCSHARES, INC. AND SUBSIDIARY
NOTES TO CONSOLIDATED
FINANCIAL STATEMENTS DECEMBER 31, 1993, 1992 AND 1991
NOTE 9 - INCOME TAXES (Continued):
Deferred income taxes (in thousands), according to the timing differences
which caused them, are as follows:
1993 1992 1991
Depreciation $ (13) $ (19) $ (16)
Provision for Loan Losses (45) (5) 215
Deferred Compensation (75) 14 (13)
Capital Loss not Utilized Due to Limitation -0- (46) (85)
Other Real Estate Owned 38 63 2
Limitation on Recording of Deferred Tax Debits -0- -0- (102)
Other (21) (8) (1)
Increase (Decrease) in Deferred Income
Taxes $ (116) $ (1) $ -0-
The net deferred tax asset (in thousands) as of December 31, 1993 is as
follows:
Deferred Tax Assets $ 1,111
Deferred Tax Liabilities (397)
Deferred Tax Asset Valuation Allowance (177)
Net Deferred Tax Asset $ 537
NOTE 10 - OTHER OPERATING EXPENSES:
The components of other operating expenses (in thousands) were:
1993 1992 1991
Regulatory Assessments $ 381 $ 388 $ 361
Foreclosed Property Expense, Net (62) 66 541
Legal Fees 177 39 50
Other Expenses 1,154 1,118 1,068
Total $ 1,650 $ 1,611 $ 2,020
NOTE 11 - CONCENTRATION OF CREDIT RISK:
The Bank grants primarily real estate and commercial loans to customers in
Vermilion, St. Mary and Iberia Parishes and the immediate surrounding areas.
The Bank's portfolio consists of business loans extending across many
industry types, as well as loans to individuals. The Bank's primary service
area has some dependency on energy and energy related industries. Although
the Bank has a diversified loan portfolio, a substantial portion of its
debtors' ability to honor their contracts is dependent upon real estate
values and the business economic sector.
Exhibit E
Continued
COMMERCIAL BANCSHARES, INC. AND SUBSIDIARY
NOTES TO CONSOLIDATED
FINANCIAL STATEMENTS DECEMBER 31, 1993, 1992 AND 1991
NOTE 12 - FINANCIAL INSTRUMENTS WITH OFF-BALANCE SHEET RISK:
The Bank is a party to various financial instruments with off-balance sheet
risk in the normal course of business to meet the financing needs of its
customers. These financial instruments include commitments to extend credit
and standby letters of credit and involve, to varying degrees, elements of
credit risk in excess of the amounts recognized in the consolidated
statements of condition.
The Bank's exposure to credit loss in the event of nonperformance by the
other party to the financial instrument for commitments to extend credit and
standby letters of credit is represented by the contractual amount of those
instruments. The Bank uses the same credit policies in making commitments
and conditional obligations as it does for on-balance-sheet instruments. The
Bank does not anticipate any material loss as a result of these transactions.
1993 1992
Commitments to Extend Credit (in thousands) $ 7,952 $ 7,018
Standby Letters of Credit (in thousands) $ 657 $ 639
The fair values of commitments to extend credit and standby letters of credit
were $7,952,000 and $657,000 at December 31, 1993 and $7,018,000 and $639,000
at December 31, 1992.
Commitments to extend credit are agreements to lend to a customer as long as
there is no violation of any condition established in the contract.
Commitments generally have fixed expiration dates or other termination
clauses and may require payment of a fee. Since some of the commitments are
expected to expire without being drawn upon, the total commitment amounts
disclosed above do not necessarily represent future cash requirements. The
Bank evaluates each customer's creditworthiness on a case-by-case basis. The
amount of collateral obtained, if considered necessary by the Bank upon
extension of credit, is based on management's credit evaluation of the
counterparty.
Standby letters of credit are conditional commitments issued by the Bank to
guarantee the performance of a customer to a third party. The credit risk
involved in issuing letters of credit is essentially the same as that
involved in extending loan facilities to customers.
NOTE 13 - COMMITMENTS AND CONTINGENT LIABILITIES:
The Holding Corporation and Subsidiary are also subject to claims and
lawsuits which arise primarily in the ordinary course of business. Based on
information presently available and advice received from legal counsel
representing the Holding Corporation and Subsidiary in connection with such
claims and lawsuits, it is the opinion of management that the disposition or
ultimate determination of such claims and lawsuits will not have a material
adverse effect on the consolidated financial position of the Holding
Corporation and Subsidiary.
The Bank is a party to three operating lease agreements for the rental of
branch bank and drive-in facilities. Monthly payments total $5,000 through
lease periods that begin to expire in 1994.
<PAGE>
Required payments (in thousands) for each of the remaining years under the
lease agreements are as follows:
Amount
1994 $ 21
1995 10
1996 2
Total $ 33
Lease payments included in Occupancy Expense totaled $46,000, $40,000 and
$40,000 for the years ending December 31, 1993, 1992 and 1991, respectively.
Exhibit E
Continued
COMMERCIAL BANCSHARES, INC. AND SUBSIDIARY
NOTES TO CONSOLIDATED
FINANCIAL STATEMENTS DECEMBER 31, 1993, 1992 AND 1991
NOTE 14 - DIVIDEND RESTRICTIONS:
The Bank is restricted under applicable regulatory laws in the payment of
dividends to an amount equal to current year earnings plus undistributed
earnings for the immediately preceding year, unless prior permission is
received from the Commissioner of Financial Institutions. Payment of
dividends by the Holding Corporation are subject to restrictive covenants of
the debt agreement and the above mentioned restriction in the merger
agreement.
NOTE 15 - REGULATORY MATTERS:
The Bank is required to maintain minimum amounts of capital to total "risk
weighted" assets, as defined by the banking regulators. At December 31,
1993, the Bank is required to have minimum Tier 1 and Total Capital ratios of
4.00% and 8.00%, respectively. The Bank's actual ratios at that date were
21.78% and 23.03%, respectively. The Bank's leverage ratio at December 31,
1993, was 9.79%.
NOTE 16 - EMPLOYEE BENEFIT PLANS:
The Bank has an Employee Stock Ownership Plan (ESOP) covering employees who
meet certain eligibility requirements. The cost of the Plan is borne by the
Bank through contributions determined by the Board of Directors.
Contributions to the ESOP were $9,000, $30,000 and $1,000 for the years ended
December 31, 1993, 1992 and 1991, respectively.
The Bank also has a salary deferral plan covering substantially all employees
who meet eligibility requirements. The plan provides for payments upon
retirement, death or disability. The Bank makes a matching contribution for
a portion of the employee salary deferrals. The Bank's contributions to the
plan were $43,000, $38,000 and $35,000 for the years ended December 31, 1993,
1992 and 1991, respectively.
NOTE 17 - RELATED PARTY TRANSACTIONS:
The majority of the insurance coverages for the Bank were written through an
insurance agency owned by a member of the Board of Directors. The policies
provide coverage for bank facilities and equipment, blanket bond and
liability coverage, and other miscellaneous insurance needs. Payments to the
agency totalled $125,000, $184,000 and $78,000 during the years ended
December 31, 1993, 1992 and 1991, respectively.
NOTE 18 - PARENT COMPANY FINANCIAL STATEMENTS (Continued):
The following are parent company only statements of condition (in thousands)
as of December 31, 1993 and 1992, and statements of income (in thousands) and
cash flows (in thousands) for the years ended December 31, 1993, 1992 and
1991.
Exhibit E
Continued
COMMERCIAL BANCSHARES, INC. AND SUBSIDIARY
NOTES TO CONSOLIDATED
FINANCIAL STATEMENTS DECEMBER 31, 1993, 1992 AND 1991
NOTE 18 - PARENT COMPANY FINANCIAL STATEMENTS (Continued):
Statements of Condition
1993 1992
Assets
Cash $ 184 $ 316
Investment in Subsidiary Bank 16,354 14,404
Intangible Assets, Net 941 1,072
Other Assets 184 106
Total Assets $ 17,663 $ 15,898
Liabilities and Shareholders' Equity
Liabilities:
Accrued Interest Payable $ 64 $ 68
Notes Payable 3,345 3,545
Other Payables 161 131
Total Liabilities 3,570 3,744
Shareholders' Equity:
Common Stock 629 629
Capital Surplus 591 515
Treasury Stock (1,154) (1,153)
Undivided Profits 14,027 12,163
Total Shareholders' Equity 14,093 12,154
Total Liabilities and Shareholders' Equity $ 17,663 $ 15,898
Statements of Income
1993 1992 1991
Operating Income:
Dividends from Subsidiary Bank $ 550 $ 2,400 $ -0-
Other Operating Income 1 37 85
551 2,437 85
Operating Expenses:
Interest Expense 252 378 635
Other Operating Expenses 290 251 255
542 629 890
Income from Operations 9 1,808 (805)
Income Tax Benefit 167 251 434
176 2,059 (371)
Extraordinary Items -0- 469 -0-
Cumulative Effect of A Change in
Accounting Principle 19 -0- -0-
195 2,528 (371)
Equity in Undistributed Earnings
of Subsidiary 1,893 (470) 1,441
Net Income $ 2,088 $ 2,058 $ 1,070
Exhibit E
Continued
COMMERCIAL BANCSHARES, INC. AND SUBSIDIARY
NOTES TO CONSOLIDATED
FINANCIAL STATEMENTS DECEMBER 31, 1993, 1992 AND 1991
NOTE 18 - PARENT COMPANY FINANCIAL STATEMENTS (Continued):
Statements of Cash Flows
1993 1992 1991
Cash Flows From Operating Activities:
Net Income $ 2,088 $ 2,058 $ 1,070
Adjustments to Reconcile Net Income
to Net Cash Provided by Operating
Activities:
Equity in Undistributed Earnings (1,893) 470 (1,441)
Change in Deferred Income Taxes (55) (20) (130)
Gain on Sale of Investment
Securities -0- (1) -0-
Gain on Debt Extinguishment -0- (431) -0-
(Increase) Decrease in Other Assets (58) 290 (263)
Increase (Decrease) in Other
Liabilities 63 (17) (95)
Depreciation and Amortization 131 156 176
Net Cash Provided by (Used in)
Operating Activities: 276 2,505 (683)
Cash Flows From Investing Activities:
Purchase of Investment Securities -0- (867) -0-
Proceeds from Sales and Maturities of
Investment Securities -0- 868 1,218
Net Cash Provided by Investing Activities -0- 1 1,218
Cash Flows From Financing Activities:
Repayments of Notes Payable (200) (3,312) (863)
Dividends Paid (283) -0- -0-
Net Sale of Treasury Stock 75 -0- -0-
Net Cash Used In Financing Activities (408) (3,312) (863)
Net Decrease In Cash and Cash Equivalents (132) (806) (328)
Cash and Cash Equivalents, Beginning of
Year 316 1,122 1,450
Cash and Cash Equivalents, End of Year $ 184 $ 316 $ 1,122
Exhibit E
Continued
COMMERCIAL BANCSHARES, INC. AND SUBSIDIARY
NOTES TO CONSOLIDATED
FINANCIAL STATEMENTS DECEMBER 31, 1993, 1992 AND 1991
NOTE 19 - AGREEMENT TO MERGE WITH HIBERNIA CORPORATION:
An Agreement and Plan of Merger between Commercial Bancshares (Commercial)
and Hibernia Corporation (Hibernia) was signed on September 28, 1993. The
agreement provides for a merger of the companies in a stock for stock
exchange accounted for as a pooling of interests. Total consideration is
$18.7 million of Hibernia stock. The merger is contingent upon shareholder
and regulatory approval.
Termination of the merger agreement can be:
1. By mutual consent.
2. By Hibernia, if Commercial and the Bank have not terminated the
directors deferred compensation agreements, or if the termination resulted in
after-tax costs of more than $600,000 in the aggregate.
3. By Hibernia, in the event that Hibernia determines that the facts and
circumstances surrounding the Merger prohibit or materially jeopardize the
treatment of the Merger as a pooling-of-interests for accounting purposes.
Commercial cannot pay dividends while the agreement is in effect, except if
the merger does not occur prior to March 31, 1994, Commercial may pay its
regular $1.00 per share dividend.
INDEPENDENT AUDITORS' REPORT ON ADDITIONAL INFORMATION
Board of Directors
Commercial Bancshares, Inc. and Subsidiary
Abbeville, LA
Our report on our audit of the basic consolidated financial statements of
Commercial Bancshares, Inc. and Subsidiary for 1993 appears on page 1. That
audit was made for the purpose of forming an opinion on the basic
consolidated financial statements taken as a whole. The consolidating
information on pages 22 through 24 is presented for the purpose of additional
analysis and is not a required part of the basic financial statements. This
consolidating information is the responsibility of the Company's management.
Such information has been subjected to the auditing procedures applied in our
audit of the basic consolidated financial statements and, in our opinion, is
fairly stated in all material respects when considered in relation to the
basic consolidated financial statements taken as a whole.
January 25, 1994
Exhibit F
COMMERCIAL BANCSHARES, INC. AND SUBSIDIARY
CONSOLIDATING STATEMENT OF CONDITION INFORMATION DECEMBER 31, 1993
(Dollars in Thousands)
Consolidating Commercial
First and Bancshares,
Commercial Commercial Eliminating Inc. and
ASSETS Bancshares Bank Entries Subsidiary
Cash and Due from Banks $ 184 $ 8,583 $ (184) $ 8,583
Interest Bearing Deposits 7 7
Federal Funds Sold 2,850 2,850
Total Cash and Cash Equivalents 184 11,440 (184) 11,440
Investment Securities 91,772 91,772
Loans, Net 57,571 19 57,590
Premises and Equipment, Net 2,622 314 2,936
Real Estate Acquired by Foreclosure, Net 608 608
Accrued Interest Receivable 1,775 1,775
Other Assets 17,479 2,130 (16,973) 2,636
TOTAL ASSETS $ 17,663 $ 167,918 $ (16,824) $ 168,757
LIABILITIES AND SHAREHOLDERS' EQUITY
LIABILITIES:
Deposits:
Non-interest Bearing $ -0- $ 23,268 $ (184) $ 23,084
Interest Bearing 125,809 125,809
Total Deposits -0- 149,077 (184) 148,893
Accrued Interest Payable 64 409 473
Other Liabilities 161 2,077 (285) 1,953
Notes Payable 3,345 3,345
TOTAL LIABILITIES 3,570 151,563 (469) 154,664
SHAREHOLDERS' EQUITY:
Common Stock 629 600 (600) 629
Capital Surplus 591 5,400 (5,400) 591
Treasury Shares, At Cost (1,154) (1,154)
Undivided Profits 14,027 10,296 (10,355) 13,968
Unrealized Gain on Investment Securities
Available for Sale -0- 59 -0- 59
TOTAL SHAREHOLDERS' EQUITY 14,093 16,355 (16,355) 14,093
TOTAL LIABILITIES AND SHAREHOLDERS' EQUITY $ 17,663 $ 167,918 $ (16,824) $ 168,757
COMMERCIAL BANCSHARES, INC. AND SUBSIDIARY
CONSOLIDATING STATEMENT OF CONDITION INFORMATION DECEMBER 31, 1993
(Dollars in Thousands)
Consolidating Commercial
First and Bancshares,
Commercial Commercial Eliminating Inc. and
Bancshares Bank Entries Subsidiary
INTEREST INCOME:
Loans, Including Fees $ $ 5,479 $ $ 5,479
Investment Securities:
Taxable 5,002 5,002
Non-taxable 42 42
Federal Funds Sold 180 180
-0- 10,703 -0- 10,703
INTEREST EXPENSE:
Deposits 3,992 3,992
Notes Payable 252 252
252 3,992 -0- 4,244
NET INTEREST INCOME (LOSS) (252) 6,711 6,459
PROVISION FOR LOAN LOSSES 75 75
NET INTEREST INCOME (LOSS) AFTER PROVISION
FOR LOAN LOSSES (252) 6,636 -0- 6,384
OTHER INCOME:
Customer Service Fees 962 962
Other Income 2,444 99 (2,442) 101
2,444 1,061 (2,442) 1,063
OTHER EXPENSES:
Salaries and Employee Benefits 2,404 2,404
Occupancy Expense 793 793
Amortization of Intangible Assets 131 131
Other Operating Expenses 159 1,491 1,650
290 4,688 -0- 4,978
INCOME BEFORE INCOME TAX EXPENSE (BENEFIT)
AND CUMULATIVE EFFECT OF A CHANGE IN
ACCOUNTING PRINCIPLE 1,902 3,009 (2,442) 2,469
INCOME TAX EXPENSE (BENEFIT) (167) 969 802
INCOME BEFORE CUMULATIVE EFFECT OF A
CHANGE IN ACCOUNTING PRINCIPLE 2,069 2,040 (2,442) 1,667
CUMULATIVE EFFECT OF A CHANGE IN ACCOUNTING
PRINCIPLE 19 402 421
NET INCOME $ 2,088 $ 2,442 $ (2,442) $ 2,088
COMMERCIAL BANCSHARES, INC. AND SUBSIDIARY
CONSOLIDATING AND ELIMINATING ENTRIES
(Dollars in Thousands)
(1)
Premises and Equipment, Net $ 314
Loans, Net 19
Other Liabilities 235
Other Assets $ 568
To reclassify intangibles resulting from
excess price paid over book value from
other assets to appropriate accounts.
(2)
Non-interest Bearing Deposits 184
Cash and Due from Banks 184
To eliminate parent company's demand
deposit accounts at the subsidiary
bank.
(3)
Common Stock 600
Capital Surplus 5,400
Undivided Profits 7,913
Other Income 2,442
Other Assets 16,355
To eliminate equity in subsidiary and
investment in consolidated subsidiary.
(4)
Other Liabilities
Other Assets 50
50
To eliminate intercompany accounts
APPENDIX A
ARTICLES OF AMENDMENT TO
THE ARTICLES OF INCORPORATION
OF COMMERCIAL BANCSHARES, INC.
On _______________, 1994, the shareholders of Commercial
Bancshares, Inc. (the "Company"), a Louisiana corporation, at a
meeting at which ___________ of the 281,843 outstanding shares of
common stock, $2.00 par value, entitled to vote were present or
represented by proxy (the "Meeting"), by a vote of _______ shares
in favor, ________ shares against , and _________ shares
abstaining, amended the Articles of Incorporation of the Company to
eliminate therefrom in its entirety Article VII as in effect
immediately before the Meeting and to substitute in its place the
following Article VII, and accordingly Article VII was amended to
read as follows:
"ARTICLE VII
"The shareholders, by the affirmative vote of a majority
of the voting power present or represented by proxy at any
annual or special meeting called for the purpose, may approve
a merger of the Corporation with and into Hibernia Corporation
and the related agreement of merger. Any such approval shall
be fully effective notwithstanding that such merger may result
in the amendment of all or any portion of the Articles of
Incorporation of the Corporation, and notwithstanding any
other provision of these Articles of Incorporation to the
contrary, including, but not limited to, the provisions of
Article III, IV, VI, and IX prohibiting amendments of Articles
III, IV, VI, VII and IX unless first approved (a) in the case
of Article III, by two-thirds (2/3) of the shareholders and
(b) in the case of Articles IV, VI, VII and IX, by 75% of the
total voting power of the Corporation."
These Articles of Amendment to the Articles of Incorporation
of Commercial Bancshares, Inc. are dated ________, 1994.
WITNESSES: COMMERCIAL BANCSHARES, INC.
__________________ BY: _____________________________
J. Roland Livingston
__________________ ITS: President
__________________ BY: _______________________________
David H. Stiel, Jr.
__________________ ITS: Secretary
APPENDIX B
AGREEMENT AND PLAN OF MERGER
OF
COMMERCIAL BANCSHARES, INC.
WITH AND INTO
HIBERNIA CORPORATION
AGREEMENT AND PLAN OF MERGER dated as of September 28, 1993
(this "Agreement"), adopted and made by and between Commercial
Bancshares, Inc. ("Commercial") and Hibernia Corporation
("Hibernia").
Commercial is a corporation duly organized and existing under
the laws of the State of Louisiana; has its registered office at
521 Main Street, Franklin, Louisiana 70538; and is a bank holding
company within the meaning of the Bank Holding Company Act of 1956,
as amended (the "Bank Holding Company Act"). The presently
authorized capital stock of Commercial consists solely of 500,000
shares of common stock of the par value of $2.00 each ("Commercial
Common Stock"). As of July 31, 1993, 314,723 shares of Commercial
Common Stock had been issued, 281,843 shares of Commercial Common
Stock were outstanding, and 32,880 shares of Commercial Common
Stock were held in Commercial's treasury. All outstanding shares
of Commercial Common Stock have been duly issued and are validly
outstanding, fully paid and nonassessable. The foregoing are the
only voting securities of Commercial authorized, issued, or
outstanding, and there are no existing options, warrants, calls, or
commitments of any kind obligating Commercial to issue any share of
its capital stock or any other security of which it is or will be
the issuer. None of the shares of Commercial's capital stock has
been issued in violation of preemptive rights of shareholders.
Commercial owns 100 percent of the outstanding voting shares of
First Commercial Bank (the "Bank"), a Louisiana banking corporation
duly organized and existing under the laws of the State of
Louisiana.
Hibernia is a corporation duly organized and existing under
the laws of the State of Louisiana; has its registered office at
313 Carondelet Street, New Orleans, Louisiana 70130; and is a bank
holding company within the meaning of the Bank Holding Company Act.
Hibernia owns all of the issued and outstanding shares of capital
stock of Hibernia National Bank ("HNB"). The presently authorized
capital stock of Hibernia is 300,000,000 shares, consisting of
100,000,000 shares of preferred stock, no par value, 100,000,000
shares of Class B non-voting common stock, no par value, and
100,000,000 shares of Class A voting common stock, no par value
(the Class A voting common stock being referred to hereinafter as
"Hibernia Common Stock"). As of July 31, 1993, no shares of
Hibernia's preferred stock or its Class B non-voting common stock
were outstanding, 83,437,931 shares of Hibernia Common Stock were
outstanding, and no shares of Hibernia Common Stock were held in
Hibernia's treasury. All outstanding shares of Hibernia Common
Stock have been duly issued and are validly outstanding, fully paid
and nonassessable. The foregoing are the only voting securities of
Hibernia authorized, issued or outstanding and there are no
existing options, warrants, calls or commitments of any kind
obligating Hibernia to issue any share of its capital stock or any
other security of which it is or will be the issuer, except that
Hibernia has authorized or reserved 1,500,000 shares of Hibernia
Common Stock for issuance under its 1987 Stock Option Plan,
pursuant to which options covering 817,837 shares of Hibernia
Common Stock were outstanding as of July 31, 1993, 2,823,970 (as
adjusted) shares of Hibernia Common Stock for issuance under its
1992 Long-Term Incentive Plan, pursuant to which options covering
914,500 shares of Hibernia Common Stock were outstanding as of July
31, 1993, 1,000,000 shares of Hibernia Common Stock for issuance
under its 1993 Director Stock Option Plan, pursuant to which
options covering 75,000 shares of Hibernia Common Stock will be
outstanding upon amendment or waiver of Section 19(n) of the
Registration Rights Agreement referred to in Section 12.4 hereof
and 703,263 shares of Hibernia Common Stock are available for
issuance pursuant to Hibernia's Dividend Reinvestment and Stock
Purchase Plan. None of the shares of Hibernia's capital stock has
been issued in violation of preemptive rights of shareholders.
The Boards of Directors of Commercial and Hibernia have duly
approved this Agreement and have authorized the execution hereof by
Commercial's Chairman of the Board and Hibernia's President and
Chief Executive Officer, respectively. Subject to receipt and
approval by the Board of Directors of Commercial of a written
fairness opinion of Bank Advisory Group regarding the Merger (the
"Fairness Opinion"), Commercial has directed that this Agreement be
submitted to a vote of its shareholders in accordance with Part XI
of the Louisiana Business Corporation Law ("LBCL") and the terms of
this Agreement.
In consideration of their mutual promises and obligations, the
parties hereto adopt and make this Agreement for the merger of
Commercial with and into Hibernia and prescribe the terms and
conditions of such merger and the mode of carrying it into effect,
which shall be as follows:
1. The Merger. On the Effective Date (as defined in Section
14 hereof), Commercial shall be merged with and into Hibernia under
the Articles of Incorporation of Hibernia, pursuant to the
provisions of, and with the effect provided in, Part XI of the LBCL
(the "Merger") and the Merger Agreement in substantially the form
of Exhibit 1 hereto (the "Merger Agreement").
2. Hibernia Capital Stock. The shares of the capital stock
of Hibernia issued and outstanding immediately prior to the
Effective Date shall, on the Effective Date, continue to be issued
and outstanding.
<PAGE>
3. Commercial Common Stock.
3.1. Conversion. On the Effective Date and subject to
the provisions of Section 3.7 hereof,
(a) each share of Commercial Common Stock issued and
outstanding immediately prior to the Effective Date, other than (i)
shares as to which dissenters' rights have been perfected and not
withdrawn or otherwise forfeited under Section 12: 131 of the LBCL
and (ii) shares owned beneficially by Hibernia or its subsidiaries,
shall, by virtue of the Merger automatically and without any action
on the part of the holder thereof, become and be converted into the
number of shares of Hibernia Common Stock that equals the Exchange
Rate set forth in Section 3.8 hereof;
(b) holders of certificates which represent shares of
Commercial Common Stock outstanding immediately prior to the
Effective Date (hereinafter called "Old Certificates") shall cease
to be, and shall have no rights as, shareholders of Commercial;
(c) each share of Commercial Common Stock held in the
treasury of Commercial or owned beneficially by Hibernia or any of
its subsidiaries shall be cancelled; and
(d) Old Certificates shall be exchangeable by the
holders thereof in the manner provided in the transmittal materials
described below for new certificates for the number of whole shares
of Hibernia Common Stock to which such holders shall be entitled in
accordance with the Exchange Rate set forth in Section 3.8 and a
check representing cash paid in lieu of fractional shares as
provided in Section 3.2 hereof.
3.2. Fractional Shares. Each holder of Old Certificates
who would otherwise have been entitled to receive a fraction of a
share of Hibernia Common Stock (after taking into account all
shares of Commercial Common Stock represented by the Old
Certificates then delivered by such holder) shall receive, in lieu
thereof, cash (without interest) in an amount equal to such
fractional part of a share multiplied by the Average Market Price
of Hibernia Common Stock on the Closing Date as defined in Section
3.8(c) hereof.
3.3. Transmittal Materials. As promptly as practicable
after the Effective Date, Hibernia shall send or cause to be sent
to each former shareholder of record of Commercial transmittal
materials for use in exchanging Old Certificates for certificates
representing Hibernia Common Stock and a check representing cash
paid in lieu of fractional shares, if any. The letter of
transmittal will contain instructions with respect to the surrender
of Old Certificates and the distribution of certificates
representing Hibernia Common Stock. If any certificate for shares
of Hibernia Common Stock is to be issued in a name other than that
in which an Old Certificate surrendered for exchange is issued, the
Old Certificate so surrendered shall be properly endorsed and
otherwise in proper form for transfer and the person requesting
such exchange shall affix any requisite stock transfer tax stamps
to the Old Certificate surrendered or provide funds for their
purchase or establish to the satisfaction of the exchange agent to
be appointed by Hibernia in connection with such exchange (the
"Exchange Agent") that such taxes are not payable.
3.4. Rights as Shareholders. Former shareholders of
Commercial will be able to vote after the Effective Date at any
meeting of Hibernia shareholders or pursuant to any written consent
procedure the number of whole shares of Hibernia Common Stock into
which their shares of Commercial Common Stock are converted,
regardless of whether they have exchanged their Old Certificates.
Whenever a dividend is declared by Hibernia on the Hibernia Common
Stock after the Effective Date, the declaration shall include
dividends on all shares issuable hereunder, but no shareholder will
be entitled to receive his distribution of such dividends until
physical exchange of his Old Certificates shall have been effected.
Upon physical exchange of his Old Certificates, any such person
shall be entitled to receive from Hibernia an amount equal to all
dividends (without interest thereon and less the amount of taxes,
if any, that may have been withheld, imposed or paid thereon)
declared, and for which the payment has occurred, on the shares
represented thereby.
3.5. Cancellation of Old Certificates. On and after the
Effective Date there shall be no transfers on the stock transfer
books of Commercial or Hibernia of the shares of Commercial Common
Stock which were issued and outstanding immediately prior to the
Effective Date. If, after the Effective Date, Old Certificates are
properly presented to Hibernia, they shall be cancelled and
exchanged for certificates representing shares of Hibernia Common
Stock and a check representing cash paid in lieu of fractional
shares as herein provided. Any other provision of this Agreement
notwithstanding, neither the Exchange Agent nor any party hereto
shall be liable to a holder of Commercial Common Stock for any
amount paid or property delivered in good faith to a public
official pursuant to any applicable abandoned property, escheat, or
similar law.
3.6. Property Transfers. From time to time, as and when
requested by Hibernia and to the extent permitted by Louisiana law,
the officers and directors of Commercial last in office shall
execute and deliver such deeds and other instruments and shall take
or cause to be taken such further or other actions as shall be
necessary in order to vest or perfect in or to confirm of record or
otherwise to Hibernia title to, and possession of, all the
property, interests, assets, rights, privileges, immunities,
powers, franchises, and authorities of Commercial, and otherwise to
carry out the purposes of this Agreement.
3.7. Dissenters' Shares. Shares of Commercial Common
Stock held by any holder having rights of a dissenting shareholder
as provided in Part XIII of the LBCL, who shall have properly
objected to the Merger and who shall have properly demanded payment
on his stock in accordance with and subject to the provisions of
Section 12:131 of the LBCL, shall not be converted as provided in
Section 3.1 hereof until such time as such holder shall have failed
to perfect, or shall have effectively lost, his right to appraisal
of and payment for his shares of Commercial Common Stock, at which
time such shares shall be converted as provided in Section 3.1
hereof.
3.8. Exchange Rate.
(a) The Exchange Rate shall be the number that is the
greater of (i) the number obtained by dividing the Deliverable
Amount (as defined below) by the total number of issued and
outstanding shares of Commercial Common Stock on the Closing Date
or (ii) 8.4; provided, however, that if on or before the Effective
Date Hibernia or any of its subsidiaries enters into an agreement
in principle or a definitive agreement with one or more of St. Mary
Holding Corporation, a Louisiana corporation, and any of its direct
subsidiaries (collectively, "St. Mary") to acquire St. Mary by
merger, purchase, consolidation or otherwise (the "St. Mary
Agreement"), the Exchange Rate shall be the number that is the
greater of (i) the number obtained by dividing the Deliverable
Amount by the total number of issued and outstanding shares of
Commercial Common Stock on the Closing Date or (ii) 9.3.
(b) For purposes of this Agreement, the Deliverable
Amount shall be the number that equals $18.7 million divided by the
Average Market Price of Hibernia Common Stock on the Closing Date
(as defined in paragraph (c) below); provided, however, that if on
or before the Closing Date Hibernia enters into a St. Mary
Agreement, the Deliverable Amount shall be the number that equals
$20.7 million divided by the Average Market Price of Hibernia
Common Stock on the Closing Date (as defined in paragraph (c)
below).
(c) For purposes of this Agreement, the Average Market
Price of Hibernia Common Stock on the Closing Date shall be the
average of the mean of the high and low prices of one share of
Hibernia Common Stock for the five business days preceding the last
trading day immediately prior to the Closing Date as reported in
The Wall Street Journal.
4. Articles of Incorporation; Bylaws. The Articles of
Incorporation and Bylaws of Hibernia in force immediately prior to
the Effective Date shall on and after the Effective Date continue
to be the Articles of Incorporation and Bylaws of Hibernia,
respectively, unless altered, amended or repealed in accordance
with applicable law.
5. Employees. Hibernia shall cause to be provided as soon
as practicable after the Effective Date for the employees of
Commercial and the Bank immediately prior to the Effective Date the
employee benefits then made available to employees of Hibernia and
its subsidiaries, subject to the terms and conditions under which
those employee benefits are made available to such employees;
provided, however, that for purposes of determining the eligibility
of an employee of Commercial or the Bank (or both) to receive, and
the benefits to which such employee shall be entitled, under
Hibernia's benefits plans after the Effective Date, any period of
employment of such employee with Commercial or the Bank shall be
deemed equivalent to having been employed for that same period by
Hibernia and/or its subsidiaries.
6. Negative Covenants. From the date hereof until the
Effective Date, or until the termination of this Agreement,
Commercial covenants and agrees that it will not do, or agree to
commit to do, and Commercial will cause the Bank not to do and not
to agree or commit to do, without the prior written consent of
Hibernia, any of the following:
(a) in the case of Commercial (and not the Bank), make,
declare, set aside or pay any dividend or declare or make any
distribution on, or directly or indirectly combine, redeem,
purchase or otherwise acquire, any shares of Commercial Common
Stock (other than in a fiduciary capacity); provided, however,
that, if the Merger does not occur prior to March 31, 1994,
Commercial may declare and pay, on or after March 31, 1994, its
normal dividend of $1.00 per outstanding share of Commercial Common
Stock;
(b) authorize the creation or issuance of or issue any
additional shares of its capital stock, or any options, calls,
warrants, stock appreciation rights or commitments relating to its
capital stock or any securities or obligations convertible into or
exchangeable for, or giving any person any right to subscribe for
or acquire from it, shares of its capital stock;
(c) enter into any employment contracts with, increase
the rate of compensation of, or pay or agree to pay any bonus to,
any of its directors, officers or employees, except in accordance
with the existing policy and except for the payment to employees of
Commercial and/or the Bank on or before the Closing Date of bonuses
in amounts consistent with the amounts paid to such employees as
bonuses in prior years, pro rated for the elapsed portion of the
year to which such bonuses to be paid apply, which bonuses may be
paid notwithstanding the provisions of Section 9.9 of this
Agreement to the contrary;
(d) enter into or substantially modify (except as may be
required by applicable law) any pension, retirement, stock option,
stock purchase, stock appreciation right, savings, profit sharing,
deferred compensation, consulting, bonus, group insurance or other
employee benefit, incentive or welfare contract, plan or
arrangement, or any trust agreement related thereto, in respect of
any of its directors, officers or other employees; provided,
however, that Hibernia acknowledges that Commercial and the Bank
and their respective directors are parties to certain deferred
compensation agreements described on Schedule 7.9 hereto and that
Commercial and/or the Bank shall be entitled to terminate such
deferred compensation agreements on or before the Closing Date, so
long as the aggregate after-tax costs to Commercial and the Bank
incurred in connection with such termination shall not exceed
$600,000);
(e) other than as contemplated hereby and other than the
pledge of the Bank's stock to Deposit Guaranty Bank as security for
a loan to Commercial in the aggregate principal amount of
$3,500,000, (i) carry on its business other than in the usual,
regular and ordinary course in substantially the same manner as
heretofore conducted, (ii) amend its or the Bank's Articles of
Incorporation or Bylaws (except to the extent required in order to
effect the Merger as contemplated herein), (iii) impose, or suffer
the imposition, on any share of stock held by Commercial in the
Bank, of any material lien, charge, or encumbrance, or permit any
such lien to exist, (iv) establish or add any automatic teller
machines or branch or other banking offices, (v) make any capital
expenditures in excess of $100,000 or (vi) take any action that
would materially and adversely affect the ability of any party
hereto to obtain the approvals necessary for consummation of the
transactions contemplated hereby or that would materially and
adversely affect Commercial's ability to perform its covenants and
agreements hereunder;
(f) except with respect to transactions contemplated
hereby, merge with any other corporation or bank or permit any
other corporation or bank to merge into it or consolidate with any
other corporation or bank; acquire control over any other firm,
bank, corporation or organization or create any subsidiary (except
in a fiduciary capacity or in connection with foreclosures in bona
fide loan transactions); liquidate; or sell or dispose of any
assets or acquire any assets, otherwise than in the ordinary course
of its business consistent with its past practice; or
(g) knowingly fail to comply with any laws, regulations,
ordinances, or governmental actions applicable to it and to the
conduct of its business in a manner significant, material and
adverse to its business.
7. Representations and Warranties of Commercial. Commercial
(and not its directors or officers in their personal capacities)
hereby represents and warrants as follows:
7.1. Recitals. The facts set forth in the preamble to
this Agreement with respect to it are true and correct.
7.2. Organization and Qualification. Each of Commercial
and the Bank is a corporation or bank duly organized, validly
existing, and in good standing under the laws of the State of
Louisiana; each of Commercial and the Bank has the corporate power
and authority to carry on its business as it is now being conducted
and to own, lease and operate its assets, properties and business;
and Commercial has all requisite power and authority to execute and
deliver this Agreement and perform its obligations hereunder.
7.3. Ownership of Other Banks. Commercial does not own,
directly or indirectly, 5 percent or more of the outstanding
capital stock or other voting securities of any corporation, bank,
or other organization except the Bank. The presently authorized
capital stock of the Bank consists solely of 12,000 shares of
common stock of the par value of $50.00 each, of which 12,000
shares of common stock are outstanding. The outstanding shares of
capital stock of the Bank are validly issued and outstanding, fully
paid and, except as may be affected by Louisiana Revised Statute
Section 6:262, nonassessable and, except as provided on Schedule
7.3 hereto, all of such shares are owned by Commercial, free and
clear of all liens, claims and encumbrances.
7.4. Corporate Authorization. The execution, delivery
and, subject to receipt by the Board of Directors of Commercial of
the Fairness Opinion, performance of this Agreement have been
authorized by Commercial's Board of Directors, and, subject to the
receipt of such Fairness Opinion and the approval of this Agreement
by its shareholders in accordance with the LBCL, all corporate acts
and other proceedings required for the due and valid authorization,
execution, delivery and performance by Commercial of this Agreement
and the consummation of the Merger have been validly and
appropriately taken. Subject to such shareholder approval and to
such regulatory approvals as are required by law, this Agreement is
a legal, valid and binding obligation of Commercial, enforceable
against Commercial in accordance with its terms, except that
enforcement may be limited by bankruptcy, reorganization,
insolvency and other similar laws and court decisions relating to
or affecting the enforcement of creditors' rights generally and by
general equitable principles or principles of Louisiana law that
are similar to equitable principles in jurisdictions that recognize
a distinction between law and equity.
7.5. No Conflicts. Except as disclosed on Schedule 7.5
hereto, the execution and delivery of this Agreement by Commercial
does not, and the consummation of the transactions contemplated
hereby by it will not, constitute (i) a breach or violation of, or
a default under, any law, rule or regulation or any judgment,
decree, order, governmental permit or license, or agreement,
indenture or instrument of Commercial or the Bank or to which
Commercial or the Bank is subject, which breach, violation or
default would have a material and adverse effect on the financial
condition, properties, businesses or results of operations of
Commercial and the Bank taken as a whole or on the transactions
contemplated hereby, (ii) to the best of the knowledge of
Commercial's management, a breach or violation of, or a default
under, any law, rule or regulation or any judgment, decree, order,
governmental permit or license, or agreement, indenture or
instrument of Commercial or the Bank or to which Commercial or the
Bank is subject, or (iii) a breach or violation of, or a default
under, the Articles of Incorporation or Bylaws of Commercial or the
Bank; and the consummation of the transactions contemplated hereby
will not require any consent or approval under any such law, rule,
regulation, judgment, decree, order, governmental permit or license
or the consent or approval of any other party to any such
agreement, indenture or instrument, other than any required
approvals of shareholders and applicable regulatory authorities.
7.6. Financial Statements; Dividend Restrictions.
Commercial has delivered to Hibernia prior to the execution of this
Agreement true and correct copies of the following consolidated
financial statements (collectively referred to herein as the
"Commercial Financial Statements"): Commercial's Consolidated
Balance Sheets as of June 30, 1993 and 1992 (unaudited) and
December 31, 1992, 1991 and 1990 (audited); Consolidated
Statements of Income and Changes in Stockholders' Equity and
Consolidated Statements of Cash Flows for the years ended December
31, 1992, 1991 and 1990 (audited), and Consolidated Statements of
Income for the six-month periods ended June 30, 1993 and 1992
(unaudited). Each of the Commercial Financial Statements
(including the related notes) fairly presents the consolidated
results of operations of Commercial and the Bank for the respective
periods covered thereby and the consolidated financial condition of
Commercial and the Bank as of the respective dates thereof
(subject, in the case of unaudited statements, to year-end audit
adjustments that will not be material in amount or effect and
provided that such unaudited statements do not include required
statements of cash flows and changes in stockholders' equity and
all required footnote disclosure), in each case in accordance with
GAAP consistently applied during the periods involved, except as
may be noted therein. Except as disclosed in the Commercial
Financial Statements, including the notes thereto, or Schedule 7.6
hereto, and except as otherwise required by this Agreement, there
are no restrictions in any note, indenture, agreement, statute or
otherwise (except for statutes or regulations applicable to
Louisiana corporations or state banks generally) precluding
Commercial or the Bank from paying dividends, in each case when, as
and if declared by its Board of Directors.
7.7. No Material Adverse Change. Since June 30, 1993,
there has been no event or condition of any character (whether
actual, or to the knowledge of Commercial or the Bank, threatened
or contemplated) that has had or can reasonably be anticipated to
have, or that, if concluded or sustained adversely to Commercial,
would reasonably be anticipated to have, a material adverse effect
on the financial condition, results of operations, business or
prospects of Commercial or the Bank, excluding changes in laws or
regulations that affect banking institutions generally.
7.8. Litigation and Proceedings. Except as set forth on
Schedule 7.8 hereto, no litigation, proceeding or controversy
before any court or governmental agency is pending against
Commercial that in the opinion of its management is likely to have
a material and adverse effect on the business, results of
operations or financial condition of Commercial and the Bank taken
as a whole, and, to the best of its knowledge, no such litigation,
proceeding or controversy has been threatened or is contemplated.
Except as disclosed on Schedule 7.8 hereto, no member of
Commercial's consolidated group is subject to any written
agreement, memorandum, or order with or by any bank or bank holding
company regulatory authority restricting its operations or
requiring any material actions.
7.9. Material Contracts. Except for this Agreement and
arrangements made in the ordinary course of business or disclosed
on Schedule 7.9 hereto, neither Commercial nor the Bank is bound by
any material contract to be performed after the date hereof that is
not terminable by Commercial or the Bank without penalty or
liability on thirty days prior notice.
7.10. Brokers' or Finders' Fees. No agent, broker,
investment banker, investment or financial advisor or other person
acting on behalf of Commercial or the Bank or under their authority
is entitled to any commission, broker's or finder's fee from any of
the parties hereto in connection with any of the transactions
contemplated by this Agreement, except for fees payable in
connection with the financial services rendered to Commercial
and/or the Bank by Bank Advisory Group, for which Commercial and/or
the Bank will pay a fee.
7.11. Contingent Liabilities. Except as disclosed on
Schedule 7.11 hereto or as reflected in the Commercial Financial
Statements and except in the case of the Bank for unfunded loan
commitments made in the ordinary course of business consistent with
past practices, as of June 30, 1993, neither Commercial nor the
Bank has any obligation or liability (contingent or otherwise) that
was material, or that when combined with all similar obligations or
liabilities would have been material, to Commercial and the Bank
taken as a whole and there does not exist a set of circumstances
resulting from transactions effected or events occurring prior to,
on, or after June 30, 1993, or from any action omitted to be taken
during such period that, to the knowledge of Commercial, could
reasonably be expected to result in any such material obligation or
liability.
7.12. Tax Liability. The amounts set up as liabilities
for taxes in the Commercial Financial Statements are sufficient for
the payment of all respective taxes (including, without limitation,
federal, state, local, and foreign excise, franchise, property,
payroll, income, capital stock, and sales and use taxes) accrued in
accordance with GAAP and unpaid at the respective dates thereof.
7.13. Material Obligations Paid. Since June 30, 1993,
neither Commercial nor the Bank has incurred or paid any obligation
or liability that would be material to Commercial on a consolidated
basis, except for cancellation of the Deferred Compensation
Agreements described on Schedule 7.9 hereto, the payment of the
outstanding debt of Commercial to Deposit Guaranty Bank (to the
extent paid prior to the Closing) and obligations incurred or paid
in connection with transactions by it in the ordinary course of its
business consistent with its past practices.
7.14. Tax Returns; Payment of Taxes. All federal, state,
local, and foreign tax returns (including, without limitation,
estimated tax returns, withholding tax returns with respect to
employees, and FICA and FUTA returns) required to be filed by or on
behalf of Commercial or the Bank have been timely filed or requests
for extensions have been timely filed and granted and have not
expired for periods ending on or before December 31, 1992, and all
returns filed are complete and accurate to the best information and
belief of their respective managements; all taxes shown on filed
returns have been paid. As of the date hereof, there is no audit,
examination, deficiency or refund litigation or matter in
controversy with respect to any taxes that might result in a
determination materially adverse to Commercial or the Bank except
as reserved against in the Commercial Financial Statements. All
taxes, interest, additions and penalties due with respect to
completed and settled examinations or concluded litigation have
been paid, and Commercial's reserves for bad debts at December 31,
1992, as filed with the Internal Revenue Service were not greater
than the maximum amounts permitted under the provisions of Section
585 of the Internal Revenue Code of 1986, as amended (the "Internal
Revenue Code").
7.15. Loans. To the best knowledge and belief of its
management, each loan reflected as an asset of Commercial in the
Commercial Financial Statements, as of June 30, 1993, or acquired
since that date, is the legal, valid, and binding obligation of the
obligor named therein, enforceable in accordance with its terms,
and no loan is subject to any asserted defense, offset or
counterclaim known to Commercial, except as disclosed in writing to
Hibernia on or prior to the date hereof.
7.16. Allowance for Loan Losses. The allowances for
possible loan losses shown on the balance sheets of Commercial as
of June 30, 1993 are adequate in all material respects under the
requirements of GAAP to provide for possible losses, net of
recoveries, relating to loans previously charged off, on loans
outstanding (including accrued interest receivable) as of June 30,
1993, and each such allowance has been established in accordance
with GAAP.
7.17. Title to Assets; Adequate Insurance Coverage.
Except as described on Schedule 7.17:
(a) As of June 30, 1993, Commercial and the Bank had,
and except with respect to assets disposed of for adequate
consideration in the ordinary course of business since such date,
now have, good and merchantable title to all real property and good
and merchantable title to all other material properties and assets
reflected in the Commercial Financial Statements, free and clear of
all mortgages, liens, pledges, restrictions, security interests,
charges and encumbrances of any nature except for (i) mortgages and
encumbrances which secure indebtedness which is properly reflected
in the Commercial Financial Statements or which secure deposits of
public funds as required by law; (ii) liens for taxes accrued by
not yet payable; (iii) liens arising as a matter of law in the
ordinary course of business with respect to obligations incurred
after June 30, 1993, provided that the obligations secured by such
liens are not delinquent or are being contested in good faith; (iv)
such imperfections of title and encumbrances, if any, as do not
materially detract from the value or materially interfere with the
present use of any of such properties or assets or the potential
sale of any such owned properties or assets; and (v) capital leases
and leases, if any, to third parties for fair and adequate
consideration. Commercial and the Bank own, or have valid
leasehold interests in, all material properties and assets,
tangible or intangible, used in the conduct of its business. Any
real property and other material assets held under lease by
Commercial or the Bank are held under valid, subsisting and
enforceable leases with such exceptions as are not material and do
not interfere with the use made or proposed to be made by Hibernia
in such lease of such property.
(b) With respect to each lease of any real property or
a material amount of personal property to which Commercial or the
Bank is a party, except for financing leases in which Commercial or
the Bank is lessor. (i) such lease is in full force and effect in
accordance with its terms; (ii) all rents and other monetary
amounts that have become due and payable thereunder have been paid;
(ii) there exists no default or event, occurrence, condition or act
which with the giving of notice, the lapse of time or the happening
of any further event, occurrence, condition or act would become a
default under such lease; and (iv) neither the Merger nor the
merger of the Bank and HNB will constitute a default or a cause for
termination or modification of such lease.
(c) Neither Commercial nor the Bank has any legal
obligation, absolute or contingent, to any other person to sell or
otherwise dispose of any substantial part of its assets or to sell
or dispose of any of its assets except in the ordinary course of
business consistent with past practices.
(d) To the knowledge and belief of its management, the
policies of fire, theft, liability and other insurance maintained
with respect to the assets or businesses of Commercial and the Bank
provide adequate coverage against loss and the fidelity bonds in
effect as to which Commercial or the Bank is named insured meet the
applicable standards of the American Bankers Association.
7.18. Employee Plans. To the best of Commercial's
knowledge and belief, it, the Bank, and all "employee benefit
plans," as defined in Section 3(3) of the Employee Retirement
Income Security Act of 1974, as amended ("ERISA"), that cover one
or more employees employed by Commercial or the Bank:
(i) is in compliance with all laws, regulations,
reporting and licensing requirements and orders applicable to its
business or to such plan or any of its employees (because of such
employee's activities on behalf of it), the breach or violation of
which could have a material and adverse effect on such business;
and
(ii) has received no notification from any agency
or department of federal, state or local government or the staff
thereof asserting that any such entity is not in compliance with
any of the statutes, regulations or ordinances that such
governmental authority enforces, or threatening to revoke any
license, franchise, permit or governmental authorization, and is
subject to no agreement with any such governmental authority with
respect to its assets or business.
7.19. Copies of Employee Plans. On or prior to the date
hereof, Commercial has provided Hibernia with true, complete and
accurate copies of all pension, retirement, stock purchase, stock
bonus, stock ownership, stock option, savings, stock appreciation
right or profit-sharing plans, any employment, deferred
compensation, consultant, severance, bonus, or collective
bargaining agreement or group insurance contract, or any other
incentive, welfare, or employee benefit plan or agreement
maintained by it or the Bank for its or the Bank's employees or
former employees.
7.20. Plan Liability. Except for liabilities to the
Pension Benefit Guaranty Corporation pursuant to Section 4007 of
ERISA, all of which have been fully paid, and except for
liabilities to the Internal Revenue Service under section 4971 of
the Internal Revenue Code, all of which have been fully paid,
neither Commercial nor the Bank has any liability to the Pension
Benefit Guaranty Corporation or to the Internal Revenue Service
with respect to any pension plan qualified under Section 401 of the
Internal Revenue Code.
7.21. No Default. Except with regard to the lease of the
Oaklawn branch described on Schedule 7.17 hereto, neither
Commercial nor the Bank is in default in any materi al respect
under any contract, agreement, commitment, arrangement, lease,
insurance policy or other instrument to which it is a party or by
which its respective assets, business or operations may be bound or
affected or under which it or its respective assets, business or
operations receive benefits, and there has not occurred any event
that with the lapse of time or the giving of notice or both would
constitute such a default.
7.22. Minutes. Prior to the date hereof, Commercial has
made available to Hibernia, for inspection pursuant to the terms of
Section 9(e) hereof, the minutes of meetings of Commercial's and
the Bank's Board of Directors and all committees thereof held prior
to the date hereof, which minutes are complete and correct in all
respects and fully and fairly present the deliberations and actions
of such Boards and committees and accurately reflect the business
condition and operations of Commercial and the Bank as of the dates
and for the periods indicated therein.
7.23. Insurance Policies. Attached hereto as Schedule
7.23 is a schedule detailing all policies of fire, theft, public
liability, and other insurance (including without limitation
fidelity bonds and directors and officers liability insurance)
maintained by Commercial or the Bank at the date hereof. Except as
disclosed on Schedule 7.23 hereto, neither Commercial nor the Bank
has received any notice of a premium increase or cancellation with
respect to any of its insurance policies or bonds, and within the
last three years, neither Commercial nor the Bank has been refused
any insurance coverage sought or applied for, and it has no reason
to believe that existing insurance coverage cannot be renewed as
and when the same shall expire, upon terms and conditions as
favorable as those presently in effect, other than possible
increases in premiums or unavailability of coverage that do not
result from any extraordinary loss experience of Commercial or the
Bank.
7.24. Investments. Except for pledges to secure public
or trust deposits, none of the investments reflected in the
Commercial Financial Statements under the heading "Investment
Securities," and none of the investments made by Commercial or the
Bank since June 30, 1993, and none of the assets reflected in the
Commercial Financial Statements under the heading "Cash and Due
From Banks," is subject to any restriction, whether contractual or
statutory, that materially impairs the ability of Commercial or the
Bank freely to dispose of such investment at any time. With
respect to all repurchase agreements to which Commercial or the
Bank is a party, Commercial or the Bank, as the case may be, has a
valid, perfected first lien or security interest in the government
securities or other collateral securing each such repurchase
agreement which equals or exceeds the amount of the debt secured by
such collateral under such agreement.
7.25. Environmental Matters. Except as set forth on
Schedule 7.25, neither Commercial nor the Bank nor, to the
knowledge of Commercial and the Bank, any previous owner or
operator of any properties at any time owned (including any
properties owned as a result of foreclosure of a loan, whether
still owned or subsequently resold) leased, or occupied by
Commercial or the Bank or used by Commercial or the Bank in their
respective business ("Commercial Properties") used, generated,
treated, stored, or disposed of any hazardous waste, toxic
substance, or similar materials on, under, or about Commercial
Properties except in compliance with all applicable federal, state,
and local laws, rules, and regulations pertaining to air and water
quality, hazardous waste, waste disposal, air emissions, and other
environmental matters ("Environmental Laws"). Neither Commercial
nor the Bank has received any notice of noncompliance with
Environmental Laws, applicable laws, orders, or regulations of any
governmental authorities relating to waste generated by any such
party or otherwise or notice that any such party is liable or
responsible for the remediation, removal, or clean-up of any site
relating to Commercial Properties.
8. Representations and Warranties of Hibernia. Hibernia
(and not its directors or officers in their personal capacities)
hereby represents and warrants as follows:
8.1. Recitals. The facts set forth in the preamble to
this Agreement with respect to it are true and correct.
8.2. Organization and Qualification. Hibernia is a
corporation, and HNB is a national banking association, duly
organized, validly existing and in good standing under the laws of
the State of Louisiana and the United States of America,
respectively. Each of Hibernia and its material subsidiaries has
the corporate power and authority to carry on its business as it is
now being conducted and to own, lease and operate its assets,
properties and business, and Hibernia has all requisite power and
authority to execute and deliver this Agreement and perform its
obligations hereunder.
8.3. Shares Fully Paid and Non Assessable. The
outstanding shares of capital stock of Hibernia Corporation and HNB
are validly issued and outstanding, fully paid and nonassessable
(subject, in the case of HNB, to 12 U.S.C. Section 55) and all of
such shares of HNB are owned directly or indirectly by Hibernia
free and clear of all liens, claims, and encumbrances. The shares
of Hibernia Common Stock to be issued in connection with the Merger
pursuant to this Agreement have been duly authorized and, when
issued in accordance with the terms of this Agreement, will be
validly issued, fully paid, and nonassessable.
8.4. Due Authorization. The execution, delivery and
performance of this Agreement have been authorized by Hibernia's
Board of Directors, and, subject to the regulatory and other
approvals required by Section 12 hereof, all corporate acts and
other proceedings required for the due and valid authorization,
execution, delivery and performance by Hibernia of this Agreement
and the consummation of the Merger have been validly and
appropriately taken. Subject to receipt of the regulatory and
other approvals required by Section 12 hereof, this Agreement is a
legal, valid, and binding obligation of Hibernia enforceable
against Hibernia in accordance with its terms, except that
enforcement may be limited by bankruptcy, insolvency, and other
laws of general applicability relating to or affecting creditors'
rights generally and by general equitable principles or principles
of Louisiana law that are similar to equitable principles in
jurisdictions that recognize a distinction between law and equity.
8.5. No Conflicts. Except as disclosed on Schedule 8.5
hereto, the execution and delivery of this Agreement by Hibernia
does not, and the consummation of the transactions contemplated
hereby by it will not, constitute (i) a breach or violation of, or
a default under, any law, rule, or regulation or any judgment,
decree, order, governmental permit or license, or agreement,
indenture, or instrument of Hibernia or its subsidiaries or by
which Hibernia or any of its subsidiaries is subject, which breach,
violation or default would have a material and adverse effect on
the financial condition, properties, businesses, or results of
operations of Hibernia and its subsidiaries taken as a whole or on
the transactions contemplated hereby, (ii) to the best of the
knowledge of Hibernia's management, a breach or violation of, or a
default under, any law, rule, or regulation or any judgment,
decree, order, governmental permit or license, or agreement,
indenture, or instrument of Hibernia or its subsidiaries or to
which Hibernia or any of its subsidiaries is subject, or (iii) a
breach or violation of, or a default under the Articles of
Incorporation or Association or Bylaws of Hibernia, or of its
subsidiaries, and the consummation of the transactions contemplated
hereby will not require any consent or approval under any such law,
rule, regulation, judgment, decree, order, governmental permit or
license or the consent or approval of any other party to any such
agreement, indenture, or instrument, other than any required
approvals of shareholders and applicable regulatory authorities.
8.6. Reports of Hibernia. As of their respective dates,
none of its Annual Report on Form 10-K for the fiscal year ended
December 31, 1992, its Quarterly Reports on Form 10-Q for the
periods ended March 31 and June 30, 1993, and its proxy statement
for its 1993 annual meeting of shareholders, each in the form
(including exhibits) filed with the Securities and Exchange
Commission (the "SEC") and its quarterly report to shareholders
for the period ended June 30, 1993 (collectively, the "Hibernia
Reports"), contained any untrue statement of a material fact or
omitted to state a material fact required to be stated therein or
necessary to make the statements made therein, in light of the
circumstances under which they were made, not misleading. There is
no fact or circumstance that, individually or in the aggregate,
materially and adversely has affected or is so affecting, or, in
the opinion of the executive officers of Hibernia, may reasonably
be expected in the future to so affect, the business, financial
condition, net worth, properties, prospects or results of
operations of Hibernia and its subsidiaries, taken as a whole, that
has not been disclosed in the Hibernia Reports. Each of the
balance sheets in or incorporated by reference into the Hibernia
Reports (including the related notes) fairly presents the financial
position of the entity or entities to which it relates as of its
date and each of the statements of income and stockholders' equity
and statement of cash flows or equivalent statements in the
Hibernia Reports (including any related notes and schedules) fairly
presents the results of operations and changes in stockholders'
equity, as the case may be, of the entity or entities to which it
relates for the periods set forth therein (subject, in the case of
unaudited statements, to year-end audit adjustments that will not
be material in amount or effect), in each case in accordance with
GAAP consistently applied during the periods involved, except as
may be noted therein. Copies of the Hibernia Reports have been
furnished to Commercial on or before the date hereof.
8.7. No Material Adverse Change. Since June 30, 1993,
there has been no event or condition of any character (whether
actual, or to the knowledge of Hibernia or HNB, threatened or
contemplated) that has had or can reasonably be anticipated to
have, or that, if concluded or sustained adversely to Hibernia,
would reasonably be anticipated to have, a material adverse effect
on the financial condition, results of operations, business or
prospects of Hibernia or HNB, excluding changes in laws or
regulations that affect banking institutions generally.
8.8. Loans. To the best knowledge and belief of its
management, and management of HNB, each loan reflected as an asset
of Hibernia in the unaudited consolidated balance sheet contained
in Hibernia's quarterly report to shareholders for the period ended
June 30, 1993, or acquired since that date, is the legal, valid and
binding obligation of the obligor named therein, enforceable in
accordance with its terms, and no loan is subject to any asserted
defense, offset, or counterclaim known to Hibernia, except as
disclosed on Schedule 8.8 hereto.
8.9. Litigation. Except as disclosed on Schedule 8.9
hereto, no litigation, proceeding or controversy before any court
or governmental agency is pending that in the opinion of its
management is likely to have a material and adverse effect on the
business, results of operations or financial condition of Hibernia
and its subsidiaries taken as a whole, and, to the best of its
knowledge, no such litigation, proceeding or controversy has been
threatened or is contemplated. Except as disclosed on Schedule
8.9, neither Hibernia nor HNB is subject to any written agreement,
memorandum or order with or by any bank or bank holding company
regulatory authority that materially restricts its operations or
requires any material actions.
8.10. Contingent Liabilities. Except as disclosed on
Schedule 8.10 hereto or reflected in the Hibernia Reports and
except in the case of Hibernia's subsidiaries for unfunded loan
commitments made in the ordinary course of business consistent with
past practices, as of June 30, 1993, neither Hibernia nor any of
its subsidiaries had any obligation or liability (contingent or
otherwise) that was material, or that when combined with all
similar obligations or liabilities would have been material, to
Hibernia and its subsidiaries taken as a whole.
8.11. Payment of Obligations. Between June 30, 1993 and
the date hereof, neither Hibernia nor HNB has incurred or paid any
obligation or liability that would be material to Hibernia on a
consolidated basis, except for obligations incurred or paid in
connection with transactions by it in the ordinary course of its
business consistent with its past practices and except as reflected
in the Hibernia Financial Statements.
8.12. Taxes. All federal, state, local and foreign tax
returns (including, without limitation, estimated tax returns,
withholding tax returns with respect to employees, and FICA and
FUTA returns) required to be filed by or on behalf of Hibernia and
HNB have been timely filed or requests for extensions have been
timely filed, granted and have not expired for periods ending on or
before June 30, 1993, and all returns filed are complete and
accurate to the best information and belief of their respective
senior management. All taxes shown as shown on filed returns have
been paid. Except as set forth on Schedule 8.12 hereto, as of the
date hereof, there is no audit, examination, deficiency or refund
litigation or matter in controversy with respect to any taxes that
might result in a determination materially adverse to Hibernia or
HNB. All taxes, interest, additions and penalties due with respect
to completed and settled examinations or concluded litigation have
been paid. Hibernia's reserve for bad debts at December 31, 1992,
as filed with the Internal Revenue Service, were not greater than
the maximum amounts permitted under the provisions of Section 585
of the Internal Revenue Code.
8.13. Allowances for Possible Loan Losses. The
allowances for possible loan losses shown on the balance sheets of
Hibernia contained in the Hibernia reports referred to in Sections
8.6 and 9.5(i) hereof, as of the respective dates thereof, were or
will be, as the case may be, adequate in all material respects
under the requirements of GAAP to provide for possible loan losses,
net of recoveries relating to loans previously charged off, on
loans outstanding (including accrued interest receivable) as of the
respect dates of such balance sheets and each such allowance has
been or will have been established in accordance with GAAP. To the
knowledge of Hibernia's and HNB's management, Hibernia is not
likely to be required to materially increase the provision for loan
losses between the date hereof and the Effective Date.
8.14. Benefit Plans. To the knowledge and belief of
Hibernia's senior management, Hibernia, each of its subsidiaries
and all "employee benefit plans," as defined in Section 3(3) of
ERISA, that cover one or more employees employed by Hibernia or any
of its subsidiaries:
(i) is in compliance with all laws, regulations,
reporting and licensing requirements and orders applicable to its
business or to such plan or any of its employees (because such
employee's activities on behalf of it), the breach or violation of
which could have a material and adverse effect on such business;
and
(ii) has received no notification from any agency
or department of federal, state or local government or the staff
thereof asserting that any such entity is not in compliance with
any of the statutes, regulations or ordinances that such
governmental authority enforces, or threatening to revoke any
license, franchise or permit or governmental authorization, and is
subject to no agreement or written understanding with any such
governmental authorities with respect to its assets or business.
9. Agreements and Covenants. Hibernia and Commercial each
hereby agrees and covenants to the other that:
9.1. Shareholder Approvals. If required by applicable
law, this Agreement shall be submitted to its respective
shareholders at a special meeting called and held in accordance
with applicable provisions of law (to be scheduled to the extent
possible for the date of the shareholders' meeting for the other
party hereto, if any) at which its shareholders shall be asked to
consider and vote upon this Agreement and the transactions
contemplated hereby.
9.2. Actions Necessary to Complete Merger. It shall use
its best efforts in good faith to take or cause to be taken all
action necessary or desirable under this Agreement on its part as
promptly as practicable so as to permit the consummation of this
Agreement at the earliest possible date (including obtaining the
consent or approval of each governmental authority and individual,
partnership, corporation, association, or any other form of
business or professional entity whose consent or approval is
required for the consummation of the transactions contemplated
hereby, requesting the delivery of appropriate opinions and letters
from its counsel and recommending that this Agreement be approved
by its shareholders) and cooperate fully with the other party
hereto to that end; provided, however, that neither party shall be
obligated to take or cause to be taken any action which is or
creates a material burden on such party, except to the extent such
actions are reasonably anticipated to be required in order to
effect the Merger.
9.3. Preparation of Registration Statement and Proxy
Statement. It shall prepare as promptly as practicable jointly
with the other party hereto a proxy statement to be mailed to the
shareholders of each party the shareholders of which are to vote
upon this Agreement in connection with the transactions
contemplated hereby and to be part of a registration statement (the
"Registration Statement") to be filed by Hibernia with the SEC
pursuant to the Securities Act of 1933, as amended (the "1933 Act")
with respect to the shares to be issued in the Merger. When the
Registration Statement or any post-effective amendment thereto
shall become effective, and at all times subsequent to such
effectiveness, up to and including the time of the last shareholder
meeting with respect to the transactions contemplated hereby, such
Registration Statement and all amendments or supplements thereto,
with respect to all information set forth therein furnished or to
be furnished by Hibernia relating to Hibernia and by Commercial
relating to Commercial, (i) will comply in all material respects
with the provisions of the 1933 Act and the rules and regulations
of the SEC thereunder and (ii) will not contain any untrue
statement of a material fact or omit to state a material fact
required to be stated therein or necessary to make the statements
contained therein not misleading. Hibernia will advise Commercial
promptly after it receives notice thereof of the time when the
Registration Statement has become effective or any supplement or
amendment has been filed, of the issuance of any stop order, of the
suspension of the qualification of the Hibernia Common Stock
issuable in connection with the Merger for offering or sale in any
jurisdiction, of the initiation or threat of any proceeding for any
such purpose, or of any request by the SEC for the amendment or
supplement of the Registration Statement or for additional
information.
9.4. Press Releases and Public Statements. Unless
approved by Hibernia in advance, Commercial will not issue any
press release or written statement for general circulation relating
to the transactions contemplated hereby, except as otherwise
required by law. The parties will cooperate in any public
announcements directly related to the Merger; provided, however,
that, in the event Hibernia determines to file a current report on
Form 8-K that discloses only the substantive facts of a previously
released press release, such filing may be made without prior
consultation with Commercial so long as Commercial is furnished
with a copy of such report within a reasonable time after its
filing.
9.5. Material Developments; Access to Information.
(i) In order to afford Commercial access to such
information as it may reasonably deem necessary to perform its due
diligence review with respect to Hibernia and its assets in
connection with the Merger, Hibernia shall (and shall cause HNB
to), (A) upon reasonable notice, afford Commercial and its
officers, employees, counsel, accountants and other authorized
representatives, during normal business hours throughout the period
prior to the Effective Date and to the extent consistent with
applicable law, access to its premises, properties, books and
records, and to furnish Commercial and such representatives with
such financial and operating data and other information of any kind
respecting its business and properties as Commercial shall from
time to time reasonably request to perform such review, (B)
furnish Commercial with copies of all reports filed by Hibernia
with the Securities and Exchange Commission ("SEC") throughout the
period after the date hereof prior to the Effective Date promptly
after such reports are so filed, and (C) promptly advise Commercial
of the occurrence before the Effective Date of any event or
condition of any character (whether actual or to the knowledge of
Hibernia, threatened or contemplated) that has had or can
reasonably be anticipated to have, or that, if concluded or
sustained adversely to Hibernia, would reasonably be anticipated to
have, a material adverse effect on the financial condition, results
of operations, business or prospects of its consolidated group as
a whole.
(ii) In order to afford Hibernia access to such
information as it may reasonably deem necessary to perform any due
diligence review with respect to the assets of Commercial to be
acquired as a result of the Merger, Commercial shall (and shall
cause the Bank to), upon reasonable notice, afford Hibernia and its
officers, employees, counsel, accountants, and other authorized
representatives access, during normal business hours throughout the
period prior to the Effective Date, to all of its and the Bank's
properties, books, contracts, commitments, loan files, litigation
files, and records (including, but not limited to, the minutes of
the Boards of Directors of Commercial and the Bank and all
committees thereof), and it shall (and shall cause the Bank to),
upon reasonable notice and to the extent consistent with applicable
law, furnish promptly to Hibernia such information as Hibernia may
reasonably request to perform such review.
(iii) No investigation pursuant to this Section 9.5
shall affect or be deemed to modify any representation or warranty
made by, or the conditions to the obligations to consummate the
Merger of, either party to this Agreement.
9.6. Prohibited Negotiations. Prior to the Effective
Date, neither Commercial nor the Bank shall solicit or encourage
inquiries or proposals with respect to, furnish any information
relating to, or participate in any negotiations or discussions
concerning, any acquisition or purchase of all or a substantial
portion of the assets of, or of a substantial equity interest in,
Commercial or the Bank or any business combination with Commercial
or the Bank other than as contemplated by this Agreement.
Commercial shall instruct each officer, director, agent, or
affiliate of it or the Bank to refrain from doing any of the above,
and Commercial will notify Hibernia promptly if any such inquiries
or proposals are received by, any such information is requested
from, or any such negotiations or discussions are sought to be
initiated with, Commercial; provided, however, that nothing
contained in this section shall be deemed to prohibit any officer
or director of Commercial or the Bank from taking any action that,
in the opinion of counsel to Commercial or the Bank, a copy of
which opinion shall be furnished to Hibernia upon its request, is
required by applicable law.
9.7. Affiliates. Prior to the Closing Date (as defined
in Section 14 hereof), Commercial shall deliver to Hibernia a
letter identifying all persons whom it believes to be "affiliates"
of Commercial for purposes of Rule 145(c) or Rule 144 (as
applicable) under the 1933 Act ("Affiliates"). Commercial shall
use its best efforts to cause each person so identified to deliver
to Hibernia prior to the Effective Date a written agreement in
substantially the form of Exhibit 9.7 hereto providing, among other
things,that such person will not dispose of Hibernia Common Stock
received in the Merger except in compliance with the 1933 Act and
the rules and regulations thereunder and except in accordance with
Section 201.01 of the SEC's Codification of Financial Reporting
Policies; provided, however, that Commercial shall have no such
obligation to use its best efforts to cause any such identified
person to deliver to Hibernia such agreement if such person may not
lawfully execute such agreement.
9.8. Adjustment for Changes in Outstanding Shares. In
the event that prior to the Effective Date the outstanding shares
of Hibernia Common Stock shall have been increased, decreased, or
changed into or exchanged for a different number or kind of shares
or securities by reorganization, recapitalization,
reclassification, stock dividend, stock split, or other like
changes in the Hibernia's capitalization, then an appropriate and
proportionate adjustment shall be made in the number and kind of
shares of Hibernia Common Stock to be thereafter delivered pursuant
to Section 3.1 hereof.
9.9. Accounting Treatment. It shall use its best
efforts to cause the Merger to qualify for pooling-of-interests
accounting treatment to the extent factors affecting such treatment
are within its control.
9.10. Cooperation in Bank Merger. Promptly upon request
by Hibernia, Commercial shall, and it shall cause the Bank to, take
any and all necessary or appropriate actions to cause the Bank to
become merged with and into HNB effective as of, or as soon as
practicable after, the Effective Date.
9.11. Adoption of Accounting Policies. After the
satisfaction or waiver of all conditions to the Closing set forth
in Section 12 of this Agreement and in any event prior to the
Effective Date (unless this Agreement is terminated pursuant to
Section 13 hereof), Commercial shall, and it shall cause the Bank
to, take any and all necessary or appropriate actions to adopt all
Hibernia accounting procedures and policies (including without
limitation those policies pertaining to charged-off and non-accrual
assets); provided, however, that no such action taken by
Commercial or the Bank at the request of Hibernia or HNB pursuant
to this Section shall be deemed to be, or be deemed to cause, a
breach of any representation or warranty made by Commercial herein.
9.12. Indemnification of Directors and Officers of
Commercial and the Bank.
(a) From and after the Effective Date of the Merger,
Hibernia agrees to indemnify and hold harmless each person who, as
of the date immediately prior to the Closing Date, served as an
officer or director of Commercial or the Bank (an "Indemnified
Person") from and against all damages, liabilities, judgments and
claims (and related expenses including, but not limited to,
attorney's fees and amounts paid in settlement) based upon or
arising from his capacity as an officer or director of Commercial
or the Bank, to the same extent as he would have been indemnified
under the Articles of Incorporation and/or Bylaws of Hibernia, as
such documents were in effect on the date of this Agreement as if
he were an officer or director of Hibernia at all relevant times;
provided, however, that the indemnification provided by this
Section shall not apply to any claim against an Indemnified Person
if such Indemnified Person knew or should have known of the
existence of the claim and failed to make a good faith effort to
require Commercial or the Bank, as the case may be, to notify its
director and officer liability insurance carrier of the existence
of such claim prior to the Closing Date.
(b) The rights granted to the Indemnified Persons
hereby shall be contractual rights inuring to the benefit of all
Indemnified Persons and shall survive this Agreement and any
merger, consolidation or reorganization of Hibernia or HNB.
(c) The rights to indemnification granted by this
subsection 9.12 are subject to the following limitations: (i) the
total aggregate indemnification to be provided by Hibernia pursuant
to subsection 9.12(a) shall not exceed, as to all of the
Indemnified Persons as a group, the sum of $5,000,000, and Hibernia
shall have no responsibility to any Indemnified person for the
manner in which such sum is allocated among that group (but nothing
in this subsection is intended to prohibit the Indemnified Persons
from seeking reallocation among themselves); (ii) a director or
officer who would otherwise be an Indemnified Person under this
subsection 9.12 shall not be entitled to the benefits hereof unless
such director or officer has executed a Joinder Agreement (the
"Joinder Agreement") in the form of Exhibit 9.12 hereto; and (iii)
amounts otherwise required to be paid by Hibernia to an Indemnified
Person pursuant to this subsection 9.12 shall be reduced by any
amounts that such Indemnified Person recovers by virtue of the
claim for which other employees and officers indemnification is
sought.
(d) Hibernia agrees that the $5,000,000 indemnification
limit set forth in paragraph (c) of this Section 9.12 shall not
apply to any damages, liabilities, judgments and claims (and
related expenses, including but not limited to attorney's fees and
amounts paid in settlement) insofar as they arise out of or are
based upon the matters for which indemnification is provided in
Section 11.2 hereof.
9.13. Covenant to Close. At such time as is deemed
appropriate by the parties hereto or as otherwise set forth in this
Agreement, and upon satisfaction or waiver of each of the
conditions to Closing of the Merger, the parties agree to take such
actions as are reasonably necessary or appropriate to effect the
Closing and the Merger.
9.14. Cooperation in Rule 144 Transfers. Hibernia agrees
to use its best efforts to file in a timely manner all materials
required to be filed pursuant to Section 13, 14, or 15(d) of the
Exchange Act, or the rules and regulations promulgated thereunder,
so as to continue the availability of Rule 144 for sales of
Hibernia Common Stock. In the event of any proposed sale by any
former shareholder of Commercial who receives shares of Hibernia
Common Stock by reason of the Merger, Hibernia covenants to use its
best efforts to cooperate with such shareholder so as to enable
such sale to be made in accordance with Rule 144, the requirements
of Hibernia's transfer agent and the reasonable requirements of any
broker through which such a sale is proposed to be executed,
including, but not limited to, furnishing at its expense an opinion
of counsel or other statement satisfactory to the transfer agent to
the effect that the shares may be transferred, to the extent it is
able to furnish such an opinion.
10. Permits, Consents and Approvals. As promptly as
practicable after the date hereof:
(a) Hibernia shall submit an application to the Board
of Governors of the Federal Reserve System (the "Federal Reserve
Board") for approval of the transactions contemplated hereby in
accordance with the provisions of the Bank Holding Company Act;
(b) Hibernia shall submit an application to the
Comptroller of the Currency (the "Comptroller") for approval of the
transactions contemplated hereby in accordance with the provisions
of the Bank Merger Act;
(c) Commercial shall endeavor to have its Affiliates
execute a written agreement in substantially the form of Exhibit
9.7 hereto; provided, however, that Commercial shall have no such
obligation prior to the receipt by the Board of Directors of
Commercial of the Fairness Opinion; and
(d) Commercial shall endeavor to have each of the
directors of Commercial and the Bank execute a Non-Competition
Agreement in substantially the form of Exhibit 10(d) hereto;
provided, however, that Commercial shall have no such obligation
prior to the receipt by the Board of Directors of Commercial of the
Fairness Opinion.
11. Confidentiality; Hold Harmless; Restriction on
Acquisitions.
11.1. Confidentiality. The parties hereto acknowledge
that each of them or their representatives or agents has engaged
in, and may continue to engage in, certain due diligence reviews
and examinations with respect to the other and that, in the course
of such reviews and examination, has received or may receive in the
future confidential or proprietary information. Hibernia and
Commercial agree, on behalf of themselves, their respective
officers, directors, employees, representatives and agents, that,
for a period of five years after the date hereof, they will not use
any information obtained pursuant to due diligence investigations
for any purpose unrelated to the consummation of the transactions
contemplated by this Agreement, and, if the Merger is not
consummated, will hold all such information and documents in
confidence unless and until such time as such information or
documents otherwise become publicly available or as it is advised
by counsel that any such information or document is required by law
to be disclosed, in which event the party required to make such
disclosure shall advise and consult with the other party reasonably
in advance of such disclosure regarding the information proposed to
be disclosed. In the event of the termination of this Agreement,
Hibernia and Commercial shall, promptly upon request by the other
party, either destroy or return any documents so obtained.
11.2. Hold Harmless. Hibernia will indemnify and hold
harmless Commercial, each of its directors and officers and each
person, if any who controls Commercial or the Bank within the
meaning of the 1933 Act against any losses, claims, damages or
liabilities, joint, several or solidary, to which they or any of
them may become subject, under the 1933 Act or otherwise, insofar
as such losses, claims, damages or liabilities (or actions in
respect thereof) arise out of or are based upon an untrue statement
or alleged untrue statement of a material fact contained in the
Registration Statement, or in any amendment or supplement thereto,
or arising out of or based upon the omission or alleged omission to
state therein a material fact required to be stated therein or
necessary to make the statements therein not misleading, and will
reimburse each such person for any legal or other expenses
reasonably incurred by such person in connection with investigating
or defending any such action or claim; provided, however, that
Hibernia shall not be liable in any such case to the extent that
any such loss, claim, damage or liability (or action in respect
thereof) arises out of or is based upon any untrue statement or
alleged untrue statement or omission or alleged omission made in
the Registration Statement or any such amendment or supplement in
reliance upon and in conformity with information furnished to
Hibernia by Commercial or the Bank for use therein. Promptly after
receipt by an indemnified party hereunder of notice of the
commencement of any action, such indemnified party shall, if a
claim in respect thereof is to be made against Hibernia under this
Section, notify Hibernia in writing of the commencement thereof.
In case any such action shall be brought against any indemnified
party and it shall notify Hibernia of the commencement thereof,
Hibernia shall be entitled to participate therein, and to the
extent that it shall wish, to assume the defense thereof, with
counsel satisfactory to such indemnified party, and, after notice
from Hibernia to such indemnified party of its election to so
assume the defense thereof, Hibernia shall not be liable to such
indemnified party under this Section 11.2 for any legal expenses of
other counsel or any other expenses subsequently incurred by such
indemnified party.
11.3. Restriction on Acquisitions. Prior to Closing, or
until termination of this Agreement, Hibernia shall not, directly
or indirectly, without the consent of Commercial, acquire, or enter
into agreements to acquire, any financial institution in Abbeville,
Baldwin, Centerville, Franklin or New Iberia, Louisiana (other than
the Bank or St. Mary), whether by merger, consolidation, purchase
or otherwise. If, prior to termination of this Agreement or prior
to the Closing, Hibernia enters into a St. Mary Agreement (as
defined in Section 3.8 hereof) and if, as a result of a St. Mary
Agreement, the Merger is not consummated, then Hibernia shall pay
to Commercial on demand the sum of $500,000 as a "break-up fee."
For purposes of this Section 11.3, "financial institution" shall
mean any bank or savings and loan holding company, or any federal
or state chartered bank, savings bank, thrift, homestead
association, savings association, savings and loan association,
cooperative bank or other similar financial institution.
12. Conditions. The consummation of the Merger is
conditioned upon:
12.1. Shareholder Approval; Dissenters. Approval of this
Agreement by the required vote of shareholders of Commercial and
exercise and perfection of dissenters' rights pursuant to Section
12: 131 of the LBCL by holders of Commercial Common Stock holding
in the aggregate no more than 10% of the Commercial Common Stock
outstanding on the Closing Date.
12.2. Federal Reserve Board and OCC Approvals.
Procurement by Hibernia of the approval of the Federal Reserve
Board and the Comptroller of the Merger and any and all other
transactions contemplated hereby.
12.3. Federal Reserve Bank Approval. Procurement by
Hibernia of the approval of the Federal Reserve Bank of Atlanta, if
such approval is required under the terms of the Agreement between
Hibernia and the Federal Reserve Bank dated December 23, 1991.
12.4. Other Approvals. Procurement of all other consents
and approvals and satisfaction of all other requirements prescribed
by law that are necessary to the consummation of the transactions
contemplated by this Agreement, including, but not limited to, the
consent (if required) of the parties to the Registration Rights
Agreement dated May 27, 1992 among Hibernia and certain other
parties who hold "Registrable Securities" (as therein defined) to
the issuance of the Hibernia common stock provided for in this
Agreement, whether by consent, waiver or amendment of the
Registration Rights Agreement.
12.5. No Restraining Action. No litigation or proceeding
initiated by any governmental authority shall be pending before any
court or agency that shall present a claim to restrain, prohibit or
invalidate the transactions contemplated hereby and neither
Hibernia nor Commercial shall be prohibited by any order of any
court or other governmental authority from consummating the
transactions provided for in this Agreement.
12.6. Opinion of Hibernia Counsel. Commercial and its
directors shall have received an opinion, dated the Closing Date,
of counsel for Hibernia, in form and substance satisfactory to
Commercial, as to such matters as Commercial may reasonably request
with respect to the transactions contemplated hereby.
12.7. Opinion of Commercial Counsel. Hibernia, its
directors and its officers who sign the Registration Statement
shall have received an opinion, dated the Closing Date, of
Breazeale, Sachse, & Wilson, counsel for Commercial, in form and
substance satisfactory to Hibernia, which shall cover such matters
as Hibernia may reasonably request with respect to the transactions
contemplated hereby.
12.8. Representations, Warranties and Agreements of
Commercial. Each of the representations, warranties, and
agreements of Commercial contained herein in all material respects
shall be true on, or complied with by, the Closing Date as if made
on such date (or on the date when made in the case of any
representation or warranty which specifically relates to an earlier
date) and Hibernia shall have received a certificate signed by the
Chairman of the Board and the President of Commercial, dated the
Closing Date, to such effect; Commercial shall have furnished to
Hibernia such other certificates as Hibernia shall reasonably
request in connection with the Closing (as defined in Section 14
hereof), evidencing compliance with the terms hereof and its
status, business and financial condition. Commercial shall have
furnished Hibernia with such further documents or other materials
as Hibernia shall have reasonably requested in connection with the
transactions contemplated hereby.
12.9. Representations, Warranties and Agreements of
Hibernia. Each of the representations, warranties and agreements
of Hibernia contained herein in all material respects shall be true
on, or complied with by, the Closing Date as if made on such date
(or the date when made in the case of any representations or
warranty which specifically relates to an earlier date) and
Commercial shall have received a certificate signed by the Chief
Executive Officer and the Treasurer of Hibernia, dated the Closing
Date, to such effect; Hibernia shall have furnished to Commercial
such other certificates as Commercial shall reasonably request in
connection with the Closing, evidencing compliance with the terms
hereof and its status, business and financial condition. Hibernia
shall have furnished Commercial with such further documents or
other materials as Commercial shall have reasonably requested in
connection with the transactions contemplated hereby.
12.10. Effective Registration Statement. The
Registration Statement shall have become effective and no stop
order suspending the effectiveness of the Registration Statement
shall have been issued and no proceedings for that purpose shall
have been initiated or threatened by the SEC and Commercial shall
have received a certificate to such effect from the officer of
Hibernia designated as its agent for service on the cover page of
the Registration Statement (which certificate may be to the
knowledge of such officer).
12.11. Blue Sky. Hibernia shall have received all state
securities laws and "blue sky" permits and other authorizations
necessary to consummate the transactions contemplated hereby.
12.12. Tax Ruling. Commercial shall have received an
opinion of a nationally recognized public accounting firm
satisfactory to Hibernia, which opinion shall be satisfactory in
form and substance to Hibernia and Commercial, to the effect that
the Merger when consummated in accordance with the terms hereof
will constitute a reorganization within the meaning of Section
368(a) of the Internal Revenue Code, and that the exchange of
Commercial Common Stock to the extent exchanged for Hibernia Common
Stock will not give rise to gain or loss to the shareholders of
Commercial with respect to such exchange and that the Louisiana
income tax treatment to the shareholders of Commercial will be
substantially the same as the federal income tax treatment to the
shareholders of Commercial.
12.13. Termination of Deferred Compensation Agreements.
Commercial and the Bank shall have terminated the deferred
compensation agreements listed on Schedule 7.9 hereto on or before
the Closing Date.
12.14. Listing on New York Stock Exchange. The shares of
Hibernia Common Stock issuable to the holders of Commercial Common
Stock in the Merger shall have been approved for listing on the New
York Stock Exchange, Inc. on or before the Closing Date, subject to
official notice of issuance.
12.15. Fairness Opinion. Commercial shall have received
a letter from Bank Advisory Group dated within five days of the
scheduled date of mailing of the Proxy Statement to its
shareholders, and updated to within five days of the Closing Date
to the effect that the terms of the Merger are fair to its
shareholders from a financial point of view.
12.16. Assertion of Conditions. A failure to satisfy any
of the requirements set forth in Section 12.6, 12.9 or 12.15 shall
only constitute conditions to consummation of the Merger if
asserted by Commercial and a failure to satisfy any of the
requirements set forth in Section 12.7 or 12.8 shall only
constitute conditions to consummation of the Merger if asserted by
Hibernia.
13. Termination. This Agreement may be terminated
prior to the Closing Date, either before or after its approval by
the shareholders of the parties hereto, in any of the following
events:
13.1. Mutual Consent. By the mutual consent of the
parties hereto, if the Board of Directors of each party so
determines by vote of a majority of the members of its entire
Board.
13.2. Breach of Representation, Warranty or Covenant.
By either party hereto, in the event of a breach by the other party
(a) of any covenant or agreement contained herein or (b) of any
representation or warranty herein, if (i) the facts constituting
such breach reflect a material and adverse change in the financial
condition, results of operations, business, or prospects taken as
a whole, of the breaching party, which in either case cannot be or
is not cured within 60 days after written notice of such breach is
given to the party committing such breach, or (ii) in the event of
a breach of a warranty or covenant, such breach results in a
material increase in the cost of the non-breaching party's
performance of this Agreement.
13.3. Passage of Time; Inability to Satisfy Conditions.
By either party hereto, in the event that (i) the Merger is not
consummated by July 1, 1994, or (ii) any condition to Closing
cannot be satisfied by July 1, 1994 and will not be waived by the
party or parties entitled to waive it.
13.4. Failure to Obtain Regulatory Approval. By either
party hereto, at any time after the Federal Reserve Board, the
Federal Reserve Bank or the Comptroller has denied any application
for any approval or clearance required to be obtained as a
condition to the consummation of the Merger and the time period for
all appeals or requests for reconsideration thereof has run.
13.5. Failure to Obtain Shareholder Approval. By either
party hereto, if the Merger is not approved by the required vote of
shareholders of Commercial.
13.6. Dissenters. By Hibernia, if holders of more than
10 percent of the outstanding Commercial Common Stock exercise
statutory rights of dissent and appraisal pursuant to Part XIII of
the LBCL.
13.7. Material Adverse Change. By Commercial, if a
material adverse change as described in Section 8.7 of this
Agreement occurs, and by Hibernia, if a material adverse change as
described in Section 7.7 hereof occurs, after the date hereof and
prior to the Closing.
13.8. Termination of Deferred Compensation Agreements.
By Hibernia, if Commercial and the Bank have not terminated the
deferred compensation agreements listed on Schedule 7.9 hereto or,
if terminated, the termination of such agreements shall have
resulted in after-tax costs to Commercial or the Bank in excess of
$600,000 in the aggregate.
13.9. Pooling-of-Interests Accounting Treatment. By
Hibernia, in the event that Hibernia shall determine that the facts
and circumstances surrounding the Merger prohibit or materially
jeopardize the treatment of the Merger as a pooling-of-interests
for accounting purposes.
13.10. Fairness Opinion. By Commercial, if it shall not
have received a letter from Bank Advisory Group dated within five
days of the scheduled date of mailing of its proxy statement to its
shareholders, and updated to within five days of the Closing Date,
to the effect that the terms of the Merger are fair to its
shareholders from a financial point of view.
14. Closing and Effective Date. The closing of the Merger
(the "Closing") shall take place at the office of Hibernia at 313
Carondelet Street, New Orleans, Louisiana, at 11:00 a.m. local
time, or at such other place or time as shall be mutually agreeable
to the parties hereto, on the first business day occurring after
the last to occur of: (i) November 29, 1993; (ii) the date that
falls 30 days after the date of the order of the Federal Reserve
Board approving the Merger pursuant to the Bank Holding Company
Act; (iii) the date that falls 30 days after the date of the order
of the Comptroller approving the merger of the Bank with and into
HNB pursuant to the Bank Merger Act; and (iv) the date that falls
5 days after the date on which the last meeting of shareholders
called to approve this Agreement is held; or such later date within
60 days of such date as may be agreed upon between the parties
hereto (the date and time of the Closing being referred to herein
as the "Closing Date"). Immediately upon consummation of the
Closing, or on such other later date as the parties hereto may
agree, the Merger Agreement shall be certified, executed,
acknowledged and delivered to the Secretary of State of the State
of Louisiana (the "Secretary") for filing pursuant to and in
accordance with the provisions of Section 12:112 of the LBCL. The
Merger shall become effective as of the date and time of issuance
by the Secretary of a certificate of merger relating to the Merger
(such date and time being referred to herein as the "Effective
Date").
15. Survival and Termination of Representations, Warranties
and Covenants.
15.1. Except as otherwise provided in this Section 15,
the representations, warranties and covenants contained in this
Agreement shall terminate as of the earlier of the Effective Date
or the termination of this Agreement. Upon termination of such
representations, warranties and covenants, such provisions shall be
of no further force or effect, and no party hereto shall have any
legal right to redress, whether for breach of contract or
otherwise, as a result of a breach of any such provision.
15.2. The provisions and agreements set forth in
Sections 3, 5, 9.12, 9.14 and 11 and the last sentence of Section
8.3 hereof shall survive the Closing, if the Closing occurs, for
the benefit of the shareholders, directors and officers of
Commercial who are the intended beneficiaries of such provisions.
15.3. The provisions of Section 11 and liabilities for
a breach of the provisions of Sections 9.2 or 9.13 shall survive
the termination of this Agreement if this Agreement terminates
without the Closing or the Merger having occurred, in which event
liability for a breach of Section 9.2 or Section 9.13 shall survive
the termination of the Agreement for a period of 180 days following
the date on which the Agreement terminates. Nevertheless, no party
to this Agreement shall have a legal right to redress or cause of
action for a breach of Section 9.2 except in those circumstances in
which such breach directly resulted in the termination of the
Agreement.
15.4. In consideration of the mutual benefits and
agreements contained in this Agreement, each of the parties hereto,
on behalf of itself and its successors and assigns, hereby
irrevocably waives any right or cause of action which otherwise
would survive in the absence of this Section 15.
16. Amendment; Waivers. To the extent permitted under
applicable law, prior to the Closing Date any provision of this
Agreement may be amended or modified at any time, either before or
after its approval by the shareholders of the parties hereto, (i)
by an agreement in writing among the parties hereto approved by
their respective Boards of Directors and executed in the same
manner as this Agreement, and (ii) as provided in Section 12:112 of
the LBCL. Except with respect to any required shareholder or
regulatory approval, each party hereto, by written instrument
signed by a duly authorized officer of such party, may at any time
(whether before or after approval of this Agreement by the
shareholders of Hibernia or Commercial) extend the time for the
performance of any of the obligations or other acts of the other
party hereto and may waive (i) any inaccuracies of the other party
in the representations or warranties contained in this agreement or
any document delivered pursuant hereto, (ii) compliance with any of
the covenants, undertakings, or agreements of the other party, or
satisfaction of any of the conditions precedent to its obligations,
contained herein or (iii) the performance by the other party of any
of its obligations set out herein or therein; provided that no such
waiver executed after approval of this Agreement by the
shareholders of Hibernia or Commercial shall change the number of
shares of Hibernia Common Stock into which shares of Commercial
Common Stock will be converted by the Merger.
17. Execution in Counterparts. This Agreement may be
executed in counterparts, each of which shall be deemed to
constitute an original. Each such counterpart shall become
effective when one counterpart has been signed by each party
hereto.
18. Governing Law. This Agreement shall be governed by, and
interpreted in accordance with, the laws of the State of Louisiana
applicable to agreements made and entirely to be performed within
such State, except as federal law may be applicable.
19. Expenses. Each party hereto will bear all expenses
incurred by it in connection with this Agreement and the
transactions contemplated hereby, including the fees, expenses and
disbursements of its counsel and auditors, provided that printing
expenses shall be borne by Hibernia.
20. No Assignment. Prior to the Effective Date, neither
party hereto may assign any of its rights or obligations under this
Agreement to any other person without the prior written consent of
the other bank holding company that is a party hereto, including
any transfer or assignment by operation of law.
21. Notices. All notices or other communications which are
required or permitted hereunder shall be in writing and sufficient
if delivered personally or sent by registered or certified mail,
postage prepaid, to the Chief Executive Officer of Hibernia at the
address of such party set forth in the preamble to this Agreement
or to the Chairman of the Board of Commercial at 200 Willow Street,
Franklin, Louisiana 70538, and shall be deemed to have been given
as of the date so personally delivered or mailed. A copy of all
notices or other communications directed to Hibernia shall be sent
to:
Hibernia National Bank
313 Carondelet Street
New Orleans, Louisiana 70130
Attention: Corporate Law Division
and a copy of all notices or other communications directed to
Commercial shall be sent to:
J. Roland Livingston
First Commercial Bank
407 Charity
Abbeville, Louisiana 70511-0550
22. Headings. The headings in this Agreement are inserted
for convenience of reference only and are not intended to be a part
of or to affect the meaning or interpretation of this Agreement.
23. Entire Agreement. This Agreement and the Schedules and
Exhibits hereto supersede any and all oral or written agreements
and understandings heretofore made relating to the subject matter
hereof and contain the entire agreement of the parties relating to
the subject matter hereof. The terms and conditions of this
Agreement shall inure to the benefit of and be binding upon the
parties hereto, and their respective successors. Nothing in this
Agreement or in the Merger Agreement is intended to or shall be
construed to confer upon or to give any person other than the
parties hereto any rights, remedies, obligation or liabilities
under or by reason of this Agreement except as expressly provided
herein.
IN WITNESS WHEREOF, the parties hereto have caused this
instrument to be executed in counterparts by their duly authorized
officers and their corporate seals to be hereunto affixed, all as
of the day and year first above written.
Hibernia Corporation
Stephen A. Hansel
President and Chief Executive
Officer
Attest:
Patricia C. Meringer
Secretary
Commercial Bancshares, Inc.
By:
Newman Trowbridge, Jr.
Chairman of the Board
Attest:
Secretary
AMENDMENT TO AGREEMENT AND PLAN OF MERGER
OF
COMMERCIAL BANCSHARES, INC.
WITH AND INTO
HIBERNIA CORPORATION
THIS AMENDMENT TO THE AGREEMENT AND PLAN OF MERGER dated as of September
28, 1993 (this "Amendment"), is hereby adopted and made by and between
Commercial Bancshares, Inc. ("Commercial") and Hibernia Corporation
("Hibernia") as of May 12, 1994.
WHEREAS, Commercial and Hibernia entered into that certain Agreement
and Plan of Merger dated as of September 28, 1993 (the "Agreement") providing
for the merger of Commercial with and into Hibernia; and
WHEREAS, Commercial and Hibernia have determined it to be in each of
their best interests to amend the Agreement in certain respects as set forth
below.
NOW, THEREFORE, in consideration of the agreements set forth herein,
and other good and valuable consideration, the receipt and sufficiency of
which are hereby acknowledged, the parties hereto agree as follows:
1. Section 12.2 of the Agreement is hereby amended and restated to read
as follows:
"12.2 Federal Reserve Board Approval. Procurement by Hibernia of
the approval of the Federal Reserve Board of the Merger."
2. All other provisions of the Agreement shall remain unchanged.
IN WITNESS WHEREOF, the parties hereto have caused this instrument to
be executed in counterparts by their duly authorized officers and their
corporate seals to be hereunto affixed, all as of the day and year first
above written.
Hibernia Corporation
By:
Stephen A. Hansel
President and Chief Executive
Officer
Attest:
By:
Patricia C. Meringer
Secretary
Commercial Bancshares, Inc.
By:
Newman Trowbridge, Jr.
Chairman of the Board
Attest:
By:
APPENDIX C
ARTICLE VII OF THE ARTICLES OF INCORPORATION
OF COMMERCIAL BANCSHARES, INC.
ARTICLE VII
Certain Transactions
A. Transactions. Except as otherwise expressly provided in
Paragraph D of this Article, the affirmative vote of the holders of
75% of the total voting power of the Corporation cast at a meeting
of the stockholders for that purpose shall be required:
(i) to adopt any agreement to merge or consolidate the
Corporation with or into any Major Stockholder (as
defined below), or
(ii) to authorize any sale, lease, exchange, mortgage,
pledge, transfer or other alienation to or with
any Major Stockholder of all or any substantial
part of the assets of the Corporation, or
(iii) to adopt any plan of recapitalization or
reclassification of shares of any class of capital
stock entitled to vote generally in the election
of directors, or
(iv) to adopt any plan or proposal to liquidate or
dissolve the Corporation.
This affirmative vote shall be required even if no vote or some
lesser percentage is specified by law or in an agreement between
the Corporation and any other party, or otherwise.
B. Definitions. For purposes of this Article VII:
(i) "Major Stockholder" means any individual, firm,
corporation or other entity, (hereafter
collectively called "person") including any of its
Affiliates or Associates (defined below), that as
of the record date for determining stockholders
entitled to notice and vote on any of the
transactions described in Paragraph A above, or
immediately prior to the consummation of that
transaction, is the beneficial owner (defined
below), directly or indirectly, of 5% or more of
the outstanding shares of any class of capital
stock of the Corporation entitled to vote
generally in the election of directors;
(ii) For the purposes of this Article VII, the term
"Affiliate" means any person that directly or
indirectly (through one or more intermediaries)
controls, or is controlled by, or is under common
control with a person. "Control," ("controlling,"
"controlled by" and "under common control with")
means the possession, directly or indirectly, of
the power to direct or cause the direction of the
management and policies of a person whether
through the ownership of voting securities, by
contract, or otherwise.
For purposes of this Article VII, the term
"Associate means:
(1) any corporation or organization (other than
the Corporation or a majority-owned subsidiary
of the Corporation) of which such a person is
an officer or partner or is, directly or
indirectly, the beneficial owner of 10% or
more of any class of equity securities.
(2) any trust or other estate in which the person
has a substantial beneficial interest or
serves as a trustee or in a similar fiduciary
capacity, and
(3) any relative or spouse of a person, or any
relative of such spouse, who has the same home
as that person or who is a director or officer
of the Corporation or any of its subsidiaries.
(iii) a person deemed to be the beneficial owner of
shares of capital stock of the Corporation:
(a) that it has the right to acquire under any
agreement or upon exercise of conversion
rights, warrants, or options, or otherwise, or
(b) that are beneficially owned, directly or
indirectly, by it or its Affiliate or Associate or
by any other person with which it or its Affiliate
or Associate has any agreement, arrangement or
understanding to acquire, hold, vote or alienate
capital stock of the Corporation.
(iv) the outstanding shares of capital stock of the
Corporation includes shares deemed owned by a
Major Stockholder (or a person deemed a Major
Stockholder) through application of sub-clauses
(a) and (b) above but does not include any other
shares that may be issuable by the Corporation
pursuant to any agreement, or upon exercise of
conversion rights, warrants, or options, or
otherwise.
C. Determinations. On the basis of information known to the
Corporation, the Board of Directors shall determine whether any
person beneficially owns 5% or more of the outstanding shares of
the capital stock of the Corporation entitled to vote generally in
the election of directors and whether any person is an Affiliate or
Associate of another. All such determinations shall be conclusive
and binding for all purposes of this Article VII.
D. Exceptions. The shareholder vote required by Paragraph
A of this Article VII shall not apply to any transaction described
in that Paragraph if the Corporation is then and at all times
throughout the preceding twelve months has been, directly or
indirectly, the beneficial owner of a majority of the shares of
each class of outstanding capital stock of each other party to the
transaction.
E. Successors. In every merger or consolidation in which
the Corporation is not to be the surviving or resulting
corporation, the holders of each class of capital stock of the
Corporation shall retain their proportionate equity and voting
interests in the surviving or resulting corporation. Further, the
articles of incorporation of the surviving or resulting corporation
shall contain provisions substantially the same as this Article
VII. If the Corporation is to be the surviving or resulting
corporation, these Articles of Incorporation shall not be amended,
altered, changed or repealed in the merger or consolidation
adversely to affect, directly or indirectly, any of the provisions
of these Articles.
F. Merger into Major Stockholder. In case of merger or
consolidation of the Corporation into a Major Stockholder or
alienation of all or a substantial part of the assets of the
Corporation to a Major Stockholder, the stockholder vote approving
those transactions must also include the affirmative vote of a
majority of the shares of capital stock entitled to vote on the
transactions not deemed owned by the Major Stockholder.
G. Certain Amendments to Articles of Incorporation.
Notwithstanding any other provisions of these Articles of
Incorporation or the bylaws of the Corporation (and notwithstanding
the fact that some lesser percentage may be specified by Hibernia
Corporation) the affirmative vote of the holders of at least 75% of
the outstanding shares of capital stock of the Corporation entitled
to vote generally in the election of directors (considered for this
purpose as one class) cast at a meeting of the stockholders called
for that purpose shall be required for any corporate action that
would, directly or indirectly, amend, alter, change, repeal or
adversely affect any provision of Articles IV, VI and VII,
inclusive, of these Articles of Incorporation.
APPENDIX D
FORM OF OPINION OF THE BANK ADVISORY GROUP
January __, 1994
Board of Directors
Commercial Bancshares, Inc.
Franklin, Louisiana
Gentlemen:
You have requested that The Bank Advisory Group, Inc. act as
an independent financial analyst and advisor to the common
shareholders of Commercial Bancshares, Inc. ("CBI") and its wholly-
owned subsidiary, First Commercial Bank. Specifically, we have
been asked to render advice and analysis in connection with the
proposed merger of Commercial Bancshares, Inc. with and into
Hibernia Corporation, New Orleans, Louisiana (the "Merger"). In
our role as an independent financial analyst, you have requested
our opinion with regard to the fairness -- from the perspective of
the common shareholders of Commercial Bancshares, Inc. -- of the
financial terms of the proposed merger pursuant to the provisions
of the Agreement and Plan of Merger of Commercial Bancshares, Inc.
with and into Hibernia Corporation (the "Agreement") dated
September 28, 1993.
In conjunction with our review of the Agreement, our
understanding is that Hibernia Corporation ("Hibernia") proposed to
consummate the Merger pursuant to the following financial terms:
The Shareholders of Commercial Bancshares, Inc. shall receive
Aggregate Consideration equal to $18,700,000 in Hibernia
common stock based on the Average Market Price of Hibernia
common stock on the Closing Date; provided, however, that the
exchange ratio shall not fall below 8.4 shares of Hibernia
common stock for each share of CBI common stock.
If on or before the Closing Date, Hibernia Enters into an
agreement in principle or a definite agreement with St. Mary
Holding, Inc. to acquire -- via merger, purchase,
consolidation, or otherwise -- St. Mary Holding, Inc. and/or
its subsidiary, St. Mary Bank & Trust Company, the
shareholders of Commercial Bancshares, Inc. shall receive
Aggregate Consideration equal to $20,700,000 in Hibernia
common stock, based on the Average Market Price of Hibernia
common stock on the Closing Date; provided, however, that the
exchange ratio shall not fall below 9.3 shares of Hibernia
common stock for each share of CBI common stock.
For the purpose of calculating the Aggregate Consideration,
the Average Market Price of Hibernia common stock on the date
of closing shall represent the average of the mean of the high
and low prices of one share of Hibernia common stock for the
five business days preceding the last trading day immediately
prior to the Closing Date.
The Bank Advisory Group, Inc., as part of its line of
professional services, specializes in rendering valuation opinions
of banks and bank holding companies in connection with mergers and
acquisitions nationwide. Prior to our retention for this
assignment, The Bank Advisory Group has provided consulting
services to Commercial Bancshares, Inc. and First Commercial Bank,
however, the revenues derived from the delivery of such services
are insignificant when compared to The Bank Advisory Group's total
gross revenues. The Bank Advisory Group has not provided any
services to Hibernia Corporation.
In connection with this opinion and with respect to Commercial
Bancshares, Inc., we have reviewed, among other things:
1. Audited consolidated financial statements for CBI for the
years ended December 31, 1992 and 1991.
2. Consolidated financial statements for CBI, on form F.R.
Y-9C, for the nine months ended September 30, 1993, as
filed with the Federal Reserve System;
3. Reports of Condition and Income for First Commercial
Bank, the subsidiary bank of CBI, for the three years
ended December 31, 1990, 1991, and 1992, and for the nine
month period ended September 30, 1993, as filed with
Federal bank regulatory agencies;
4. The economy in general and, in particular, the local
economies in which First Commercial Bank operates;
5. Since January 1, 1992, and in connection with our ongoing
professional relationship with Commercial Bancshares,
Inc.:
(a) Certain internal financial analyses and forecasts
for First Commercial Bank prepared by the
management of First Commercial Bank, including
projections of future performance;
(b) Certain other summary materials and analyses with
respect to First Commercial Bank's loan portfolio,
securities portfolio, deposit base, fixed assets,
and operations including, but not limited to: (i)
schedule of loans and other assets identified by
management as deserving special attention or
monitoring given the characteristics of the
loan/asset and the local economy, (ii) analyses
concerning the adequacy of the loan loss reserve,
(iii) schedules of "other real estate owned"
including current carrying values and recent
appraisals, and (iv) schedules of securities,
detailing book values, market values, and lengths
to maturity; and,
6. Such other information -- including financial studies,
analyses, investigations, and economic and market
criteria -- that we deem relevant to this assignment.
In connection with this opinion and with respect to Hibernia
Corporation, we have reviewed, among other things:
1. Audited consolidated financial statements for Hibernia,
in Annual Report Form and Form 10-K, for the years ended
December 31, 1992 and 1991; and, unaudited quarterly
financial statements for Hibernia, in quarterly report
format, for the nine month period ending September 30,
1993;
2. Consolidated financial statements for Hibernia, on form
F.R. Y-9C, for the years ended 1990, 1991, and 1992; and,
for the nine months ended September 30, 1993, as filed
with the Federal Reserve System;
3. Reports of Condition and Income for Hibernia National
Bank, the subsidiary bank of Hibernia, for the three
years ended December 31, 1990, 1991, and 1992, and for
the nine month period ended September 30, 1993, as filed
with Federal bank regulatory agencies;
4. Prospectus dated December 1992, setting forth the terms
of Hibernia's issuance of Class A common stock in
exchange for debt restructuring;
5. Equity research reports regarding Hibernia prepared by
various analysts who cover the financial institutions
sector;
6. The economy in general and, in particular, the local
economies in which Hibernia and its subsidiaries operate;
and,
7. Such other information -- including financial studies,
analyses, investigations, and economic and market
criteria -- that we deem relevant to this assignment.
In connection with this opinion and with respect to the
proposed Merger, we have reviewed, among other things:
1. The Agreement, which sets forth, among other items, the
terms, conditions to closing, pending litigation against
both CBI and Hibernia, and representations and warranties
of CBI and Hibernia with respect to the proposed Merger;
2. The Proxy Statement-Prospectus, to which this opinion is
appended, that is being furnished to the shareholders of
CBI in connection with the proposed Merger;
3. The financial terms and price levels for commercial banks
recently acquired in the United States -- specifically in
Louisiana, Mississippi and East Texas -- together with
the financial performance and condition of such banks;
4. The financial terms and stated price levels of other
banking organizations, the proposed acquisition of which
has been publicly announced by Hibernia subsequent to
September 28, 1993 and prior to the date of this opinion;
5. The price-to-equity and price-to-earnings multiples of
banking organizations based in Louisiana, Mississippi and
Texas with publicly-traded common stock, together with
the financial performance and condition of such banking
organizations, and
6. Such other information -- including financial studies,
analyses, investigations, and economic and market
criteria -- that we deem relevant to this assignment.
Based on our experience, we believe our review of, among other
things, the aforementioned items provides a reasonable basis for
our opinion, recognizing that we are expressing an informed
professional opinion -- not a certification of value.
We have relied upon the information provided by the management
of Commercial Bancshares, Inc. and Hibernia Corporation, or
otherwise reviewed by us, as being complete and accurate in all
material respects. Furthermore, we have not verified through
independent inspection or examination the specific assets or
liabilities of CBI and Hibernia or their subsidiary banks. And, we
have relied upon assurances provided by Hibernia that none of the
pending litigation proceedings against Hibernia will have a
material adverse affect on the business, prospects or financial
condition of Hibernia. We have also assumed that there has been no
material change in the assets, financial condition, results of
operations, or business prospects of Commercial Bancshares, Inc.
and Hibernia since the date of the last financial statements made
available to us. We have met with the management of both CBI and
Hibernia to discuss relevant information that has been provided to
us.
Based on all factors that we deem relevant and assuming the
accuracy and completeness of the information and data provided to
us, we conclude that the terms of the proposed Merger, as outlined
herein, are fair, from a financial standpoint, to the common
shareholders of Commercial Bancshares, Inc.
This opinion is available for disclosure to the shareholders
of Commercial Bancshares, Inc. Accordingly, we hereby consent to
the inclusion of our opinion as an appendix to the Proxy Statement-
Prospectus relating to the proposed Merger, and to the reference of
our firm in the Proxy Statement-Prospectus.
Respectfully submitted,
THE BANK ADVISORY GROUP, INC.
By:___________________________
APPENDIX E
CERTAIN PROVISIONS OF LOUISIANA LAW RELATING TO
THE RIGHTS OF DISSENTING SHAREHOLDERS
A. Except as provided in subsection B of this section, if a
corporation has, by vote of its shareholders, authorized a sale,
lease or exchange of all of its assets, or has, by vote of its
shareholders, become a party to a merger or consolidation, then,
unless such authorization or action shall have been given or
approved by at least eighty percent of the total voting power, a
shareholder who voted against such corporate action shall have the
right to dissent. If a corporation has become a party to a merger
pursuant to R.S. 12:112(H), the shareholders of any subsidiaries
party to the merger shall have the right to dissent without regard
to the proportion of the voting power which approved the merger and
despite the fact that the merger was not approved by vote of the
shareholders of any of the corporations involved.
B. The right to dissent provided by this Section shall not
exist in the case of:
(1) A sale pursuant to an order of a court having
jurisdiction in the premises.
(2) A sale for cash on terms requiring distribution of
all or substantially all of the net proceeds to the
shareholders in accordance with their respective
interests within one year after the date of the
sale.
(3) Shareholders holding shares of any class of stock
which, at the record date fixed to determine
shareholders entitled to receive notice of and to
vote at the meeting of shareholders at which a
merger or consolidation was acted on, were listed
on a national securities exchange or were
designated as a national market system security or
an inter-dealer quotation system by the National
Association of Securities Dealers, Inc., unless the
articles of the corporation issuing such stock
provide otherwise or the shares of such
shareholders were not converted by the merger or
consolidation solely into shares of the surviving
or new corporation.
C. Except as provided in the last sentence of this
subsection, any shareholder electing to exercise such right of
dissent shall file with the corporation, prior to or at the meeting
of shareholders at which such proposed corporate action is
submitted to a vote, a written objection to such proposed corporate
action, and shall vote his shares against such action. If such
proposed corporate action be taken by the required vote, but by
less than eighty percent of the total voting power, and the merger,
consolidation or sale, lease or exchange of assets authorized
thereby be effected, the corporation shall promptly thereafter give
written notice thereof, by registered mail, to each shareholder who
filed such written objection to, and voted his shares against, such
action, at such shareholder's last address on the corporation's
records. Each such shareholder may, within twenty days after the
mailing of such notice to him, but not thereafter, file with the
corporation a demand in writing for the fair cash value of his
shares as of the day before such vote was taken; provided that he
state in such demand the value demanded, and a post office address
to which the reply of the corporation may be sent, and at the same
time deposit in escrow in a chartered bank or trust company located
in the parish of the registered office of the corporation, the
certificates representing his shares, duly endorsed and transferred
to the corporation upon the sole condition that said certificates
shall be delivered to the corporation upon payment of the value of
the shares determined in accordance with the provisions of this
section. With his demand the shareholder shall deliver to the
corporation, the written acknowledgment of such bank or trust
company that it so holds his certificates of stock. Unless the
objection, demand and acknowledgment aforesaid be made and
delivered by the shareholder within the period above limited, he
shall conclusively be presumed to have acquiesced in the corporate
action proposed or taken. In the case of a merger pursuant to R.S.
12:112(H), the dissenting shareholder need not file an objection
with the corporation nor vote against the merger, but need only
file with the corporation, within twenty days after a copy of the
merger certificate was mailed to him, a demand in writing for the
cash value of his shares as of the day before the certificate was
filed with the secretary of state, state in such demand the value
demanded and a post office address to which the corporation's reply
may be sent, deposit the certificates representing his shares in
escrow as hereinabove provided, and deliver to the corporation with
his demand the acknowledgment of the escrow bank or trust company
as hereinabove prescribed.
D. If the corporation does not agree to the value so stated
and demanded, or does not agree that a payment is due, it shall,
within twenty days after receipt of such demand and acknowledgment,
notify in writing the shareholder, at the designated post office
address, of its disagreement, and shall state in such notice the
value it will agree to pay if any payment should be held to be due;
otherwise it shall be liable for, and shall pay to the dissatisfied
shareholder, the value demanded by him for his shares.
E. In case of disagreement as to such fair cash value, or as
to whether any payment is due, after compliance by the parties with
the provisions of subsections C and D of this section, the
dissatisfied shareholder, within sixty days after receipt of notice
in writing of the corporation's disagreement, but not thereafter,
may file suit against the corporation, or the merged or
consolidated corporation, as the case may be, in the district court
of the parish in which the corporation or the merged or
consolidated corporation, as the case may be, has its registered
office, praying the court to fix and decree the fair cash value of
the dissatisfied shareholder's shares as of the day before such
corporate action complained of was taken, and the court shall, on
such evidence as may be adduced in relation thereto, determine
summarily whether any payment is due, and, if so, such cash value,
and render judgment accordingly. Any shareholder entitled to file
such suit may, within such sixty-day period but not thereafter,
intervene as a plaintiff in such suit filed by another shareholder,
and recover therein judgment against the corporation for the fair
cash value of his shares. No order or decree shall be made by the
court staying the proposed corporate action, and any such corporate
action may be carried to completion notwithstanding any such suit.
Failure of the shareholder to bring suit, or to intervene in such
a suit, within sixty days after receipt of notice of disagreement
by the corporation shall conclusively bind the shareholder (1) by
the corporation's statement that no payment is due, or (2) if the
corporation does not contend that no payment is due to accept the
value of his shares as fixed by the corporation in its notice of
disagreement.
F. When the fair value of the shares has been agreed upon
between the shareholder and the corporation, or when the
corporation has become liable for the value demanded by the
shareholder because of failure to give notice of disagreement and
of the value it will pay, or when the shareholder has become bound
to accept the value the corporation agrees is due because of his
failure to bring suit within sixty days after receipt of notice of
the corporation's disagreement, the action of the shareholder to
recover such value must be brought within five years from the date
the value was agreed upon, or the liability of the corporation
became fixed.
G. If the corporation or the merged or consolidated
corporation, as the case may be, shall, in its notice of
disagreement, have offered to pay to the dissatisfied shareholder
on demand an amount in cash deemed by it to be the fair cash value
of his shares, and if, on the institution of a suit by the
dissatisfied shareholder claiming an amount in excess of the amount
so offered, the corporation, or the merged or consolidated
corporation, as the case may be, shall deposit in the registry of
the court, there to remain until the final determination of the
cause, the amount so offered, then, if the amount finally awarded
such shareholder, exclusive of interest and costs, be more than the
amount offered and deposited as aforesaid, the costs of the
proceeding shall be taxed against the corporation, or the merged or
consolidated corporation, as the case may be; otherwise the costs
of the proceeding shall be taxed against the corporation, or the
merged or consolidated corporation, as the case may be; otherwise
the costs of the proceeding shall be taxed against such
shareholder.
H. Upon filing a demand for the value of his shares, the
shareholder shall cease to have any of the rights of a shareholder
except the rights accorded by this section. Such a demand may be
withdrawn by the shareholder at any time before the corporation
gives notice of disagreement, as provided in subsection D of this
section. After such notice of disagreement is given, withdrawal of
a notice of election shall require the written consent of the
corporation. If a notice of election is withdrawn, or the proposed
corporate action is abandoned or rescinded, or a court shall
determine that the shareholder is not entitled to receive payment
for his shares, or the shareholder shall otherwise lose his
dissenter's rights, he shall not have the right to receive payment
for his shares, his share certificates shall be returned to him
(and, on his request, new certificates shall be issued to him in
exchange for the old ones endorsed to the corporation), and he
shall be reinstated to all his rights as a shareholder as of the
filing of his demand for value, including any intervening
preemptive rights, and the right to payment of any intervening
dividend or other distribution, or, if any such rights have expired
or any such dividend or distribution other than in cash has been
completed, in lieu thereof, at the election of the corporation, the
fair value thereof in cash as determined by the board as of the
time of such expiration or completion, but without prejudice
otherwise to any corporate proceedings that may have been taken in
the interim.
APPENDIX F
FORM OF OPINION OF ERNST & YOUNG REGARDING CERTAIN TAX MATTERS
February 23, 1994
Hibernia Corporation
313 Carondoelet
P.O. Box 61540
New Orleans, Louisiana 70161
Dear Sir or Madam:
This letter is in response to your request that we provide you with
our opinion concerning certain federal income tax consequences
which would arise from consummation of the proposed merger of
Commercial Bancshares, Inc. ("Commercial") with and into Hibernia
Corporation ("Hibernia") (the "Commercial Merger"), and the
proposed merger of First Commercial Bank (the "Bank") with and into
Hibernia National Bank ("HNB") (the "Bank Merger"). (Hereinafter,
the Commercial Merger and the Bank Merger are referred to
collectively as the "Mergers.")
In rendering this opinion, we have relied upon the facts,
summarized below, as they have been presented to us orally by the
management of Hibernia and verified, in the Statements of Facts and
Representations dated September 28, 1993 provided by the
managements of Commercial, Bank, Hibernia and HNB; in the Agreement
and Plan of Merger made and entered into by Commercial, Bank and
Hibernia as of September 28, 1993 (the "Agreement"); in the form of
the Agreement to Merge between HNB and Bank (The "Bank Plan of
Merger"); and in the Registration Statement (Form S - 4), dated
January 12, 1994, to be filed with the Securities and Exchange
Commission and containing the preliminary Proxy Statement -
Prospectus of Commercial and Hibernia ("Prospectus"). (These are
sometimes hereinafter referred to collectively as "documents.")
You have represented to us that the facts contained in the
documents provide an accurate and complete description of the facts
and circumstances concerning the proposed Mergers. We have made no
independent determination regarding such facts and circumstances
and, therefore, have relied upon the facts and representations in
the documents set forth above for purposes of this letter. Any
changes to the facts or documents set forth above may affect the
conclusions stated herein.
We understand that you will include a reference to Ernst & Young
and our opinion in the Prospectus relating to the issuance of
Hibernia Common Stock in connection with the proposed Mergers and
the special meetings of the Commercial and Bank shareholders with
respect thereto. We consent to such reference in the Prospectus
under the caption, "Conditions to Consummation of the Mergers." We
also understand that this letter will be submitted for inclusion as
an exhibit with Amendment 1 to the Form S-4 Registration Statement.
We consent to such inclusion.
STATEMENT OF FACTS
Commercial is a bank holding company organized under the laws of
the State of Louisiana. Commercial's assets consist of cash and
100 percent of the issued and outstanding Bank Common Stock.
Commercial conducts no material business other than acting as a
bank holding company of Bank. Commercial has 500,000 authorized
shares of Common Stock par value $2.00 per share of which 314,723
were issued and 281,843 shares were outstanding as of July 31, 1993
(referred to hereinafter as the "Commercial Common Stock"). Shares
totaling 32,880 were held in Commercial's treasury as of July 31,
1993. Such outstanding shares are closely held by approximately
118 shareholders. Commercial has no options, warrants,
subscription rights or other rights to purchase Common Stock.
Bank is a state banking association organized under the laws of the
State of Louisiana, engaged principally in the banking business.
Bank has 12,000 authorized shares of Common Stock of which 12,000
were issued and outstanding and held by Commercial as of September
28, 1993 ("Bank Common Stock").
Hibernia is a bank holding company organized under the laws of the
State of Louisiana with shares registered under the Securities Act.
The presently authorized capital stock of Hibernia is 300,000,000
shares, consisting of 100,000,000 shares of preferred stock, no par
value; 100,000,000 shares of Class B non-voting Common Stock, no
par value; and 100,000,000 shares of Class A voting Common Stock,
no par value (the Class A voting Common Stock being referred to
hereinafter as "Hibernia Common Stock"). As of July 31, 1993, no
shares of Hibernia's preferred stock or its Class B non-voting
Common Stock were outstanding; 83,437,931 shares of Hibernia Common
Stock were outstanding; and no shares of Hibernia Common Stock were
held in Hibernia's treasury. There are no existing options,
warrants, calls or commitments of any kind obligating Hibernia to
issue any share of its capital stock or any other security of which
it is or will be the issuer, except that Hibernia has issued
1,812,000 warrants to purchase an aggregate of 1,812,000 shares of
Hibernia Common Stock pursuant to the terms of the Senior Secured
Restructuring Agreement dated May 27, 1992, pursuant to which
788,753 warrants were outstanding as of July 31, 1993.
Additionally, Hibernia has authorized or reserved 1,500,000 shares
of Hibernia Common Stock for issuance under its 1987 Stock Option
Plan, pursuant to which options covering 817,837 shares of Hibernia
Common Stock were outstanding as of July 31, 1993, 2,823,970 (as
adjusted) shares of Hibernia Common Stock for issuance under its
1992 Long-Term Incentive Plan, pursuant to which options covering
914,500 shares of Hibernia Common Stock were outstanding as of July
31, 1993, 1,000,000 shares of Hibernia Common Stock for issuance
under its 1993 Director Stock Option Plan, pursuant to which
options covering 75,000 shares of Hibernia Common Stock will be
outstanding upon the lifting of certain contractual restrictions
and 703,263 shares of Hibernia Common Stock are available for
issuance pursuant to Hibernia's Dividend Reinvestment and Stock
Purchase Plan. Hibernia Common Stock is traded on the New York
Stock Exchange.
HNB is a nationally chartered commercial bank engaged principally
in the full service banking business. HNB is a wholly-owned
subsidiary of Hibernia.
BUSINESS PURPOSE
The management of Hibernia represents to us that Hibernia desires
to consummate the Mergers in order to improve its presence in the
Louisiana market. As discussed in the Prospectus under the
caption, "Background of and Reasons for the Mergers," the
Commercial and Bank Boards of Directors believe the customers,
depositors, and communities served by Bank will benefit from being
part of a larger banking entity as a result of the future growth,
synergies and cost savings expected to be realized from the
Mergers.
PROPOSED TRANSACTIONS
In accordance with the above-stated business purpose, the following
transaction has been proposed:
1. After all necessary regulatory approvals have been
granted, there will be simultaneous mergers (i.e., the
Mergers) of Commercial with and into Hibernia in
accordance with the provisions of the Louisiana Business
Corporation Law ("LBCL"), and Bank with and into HNB in
accordance with the provisions of Bank Merger Act, 12
U.S.C. Sections 1828 et. seq. and 12 U.S.C. Section 215a
("Bank Merger Act"). In the documents covering the
Mergers, upon completion of the Commercial Merger,
Hibernia will cause the Bank Merger to occur.
2. In the Commercial Merger, Hibernia will acquire all of
the assets and assume all of the liabilities of
Commercial in exchange for Hibernia Common Stock. As a
result of the Commercial Merger, each share of the issued
and outstanding Commercial Common Stock shall be
converted into and become the number of shares of
Hibernia Common Stock determined in accordance with the
exchange rate. The exchange rate shall be the number
obtained by dividing the deliverable amount (defined
below) by the total number of issued and outstanding
shares of Commercial Common Stock on the closing date.
The deliverable amount equals $18.7 million divided by
the average market price (defined below) of Hibernia
Common Stock on the closing date. The average market
price equals the average of the high and low sales prices
of one share of Hibernia Common Stock for the five
trading days immediately preceding on the trading date
prior to the closing date. Holders of certificates which
represent shares of Commercial Common Stock outstanding
immediately prior to the effective date of the Commercial
Merger (hereinafter called "Old Certificates") shall
cease to be, and shall have no rights as shareholders of
Commercial after the Commercial Merger.
3. In the Bank Merger, HNB will acquire all the assets and
assume all of the liabilities of Bank. As a result of
the Bank Merger, each share of the issued and outstanding
Bank Common Stock, shall cease to be outstanding and will
be canceled. No additional shares of Hibernia Common
Stock nor shares of HNB Common Stock will be issued in
the Bank Merger.
4. No fractional shares will be issued. Each holder of Old
Certificates who would otherwise have been entitled to
receive a fraction of a share of Hibernia Common Stock
shall receive in lieu thereof, cash (without interest) in
an amount equal to such fractional part of a share
multiplied by the average market price of Hibernia Common
Stock.
5. By following certain statutory procedures, shareholders
of Commercial may exercise dissenter's rights entitling
them to receive in cash the value of their respective
Commercial Common Stock in lieu of receiving Hibernia
Common Stock in the Commercial Merger.
REPRESENTATIONS
For purposes of our evaluation, we have received from the
managements of Commercial, Bank, Hibernia and HNB, Statements
of Facts and Representations, dated September 28, 1993, as set
forth below. References to the "Code" are to the Internal
Revenue Code of 1986, as amended.
The following representations have been made by Commercial in
connection with the Commercial Merger:
(a) There is no plan or intention by the shareholders
of Commercial who own five percent or more of the
Commercial Common Stock and to the best knowledge
of management of Commercial, there is no intention
on the part of the remaining shareholders of
Commercial, to sell, exchange or otherwise dispose
of a number of shares of Hibernia Common Stock
received in the transaction that would reduce the
Commercial shareholders' ownership of Hibernia
Common Stock to a number of shares having a value,
as of the date of the transaction, of less than 50
percent of the value of all of the formerly
outstanding Common Stock of Commercial as of the
same date. For purposes of this representation,
any shares of Commercial Common Stock surrendered
by dissenters, or exchanged for cash in lieu of
fractional shares of Hibernia Common Stock, will be
treated as outstanding Commercial Common Stock on
the date of the transaction. Moreover, shares of
Commercial Common Stock and shares of Hibernia
Common Stock held by former Commercial shareholders
and otherwise sold, redeemed, or disposed of prior
or subsequent to the transaction will be considered
in making this representation.
(b) Any liabilities of Commercial assumed by Hibernia
and any liabilities to which the transferred assets
of Commercial are subject were incurred by
Commercial in the ordinary course of its business.
(c) Commercial is not under the jurisdiction of a court
in a Title 11 or similar case within the meaning of
Section 368(a)(3)(A) of the Code.
The following representations have been made by Hibernia in
connection with the Commercial Merger:
(d) Hibernia has no plan or intention to reacquire any
of its Common Stock issued in the Commercial
Merger.
(e) Hibernia has no plan or intention to sell or
otherwise dispose of any of the assets of
Commercial acquired in the transaction except for
dispositions made in the ordinary course of
business.
(f) Following the transaction, Hibernia will continue,
substantially unchanged, the banking business of
Commercial operated through Commercial's banking
subsidiary, Bank, which will be merged into HNB.
The following representations have been made by both
Commercial and Hibernia in connection with the Commercial
Merger:
(g) The fair market value of the Hibernia Common Stock
to be received by each Commercial shareholder will
be approximately equal to the fair market value of
the Commercial Common Stock surrendered in the
exchange.
(h) Except for expenses relating to the registration of
Hibernia Common Stock and certain proxy printing
and mailing expenses to be paid solely by Hibernia,
which are directly related to the Mergers in
accordance with the guidelines established in
Revenue Ruling 73-54, 1973-1 C.B. 187, Hibernia,
Commercial, and the shareholders of Commercial will
pay their respective expenses, if any, incurred in
connection with the transaction.
(i) There is no intercorporate indebtedness existing
between Commercial and its affiliates on the one
hand and Hibernia and its affiliates on the other
hand which was issued, acquired, or will be settled
at a discount.
(j) No two parties to the transaction are investment
companies as defined in Section 368(a)(2)(F)(iii)
and (iv) of the Code.
(k) The fair market value of the assets of Commercial
to be transferred to Hibernia will equal or exceed
the sum of the liabilities assumed by Hibernia plus
the amount of liabilities, if any, to which the
transferred assets are subject.
(l) The payment of cash in lieu of fractional shares of
Hibernia Common Stock is solely for the purpose of
avoiding the expense and inconvenience to Hibernia
of issuing fractional shares and does not represent
separately bargained for consideration. The total
cash consideration that will be paid in the
transaction to the Commercial shareholders instead
of issuing fractional shares of Hibernia will not
exceed one percent of the total consideration that
will be issued in the transaction to the Commercial
shareholders in exchange for their shares of
Commercial Common Stock. The fractional share
interests of each Commercial shareholder will be
aggregated, and no Commercial shareholder will
receive cash in an amount equal to or greater than
the value of one full share of Hibernia Common
Stock.
(m) None of the compensation received by any
shareholder-employees of Commercial will be
separate consideration for, or allocable to, any of
their shares of Commercial Common Stock; none of
the shares of Hibernia Common Stock received by any
shareholder-employees will be separate
consideration for, or allocable to, any employment
agreement; and the compensation paid to any
shareholder-employees will be for services actually
rendered and will be commensurate with amounts paid
to third parties bargaining at arm's-length for
similar services.
(n) The Commercial Merger will qualify as a statutory
merger under the Louisiana Business Corporation Law
("LBCL").
(o) The shareholders of Commercial (immediately before
the proposed transaction) receiving shares of
Hibernia Common Stock will not own (immediately
after the proposed transaction) more than fifty
percent of the fair market value of Hibernia Common
Stock.
The following representations have been made by Commercial in
connection with the Bank Merger:
(aa) There is no plan or intention by the shareholder of
Bank, Commercial (or its shareholders) to sell,
exchange or otherwise dispose of a number of shares
of Hibernia Common Stock constructively received in
the transaction that would reduce the Bank
shareholders' ownership of Hibernia Common Stock to
a number of shares having a value, as of the date
of the transaction, of less than 50 percent of the
value of all of the formerly outstanding Bank
Common Stock as of the same date. For purposes of
this representation, any shares of Bank Common
Stock constructively exchanged for cash or other
property, surrendered by dissenters, or exchanged
for cash in lieu of fractional shares of HNB Common
Stock will be treated as outstanding Bank Common
Stock on the date of the transaction. Moreover,
shares of Bank Common Stock and shares of Hibernia
Common Stock held by Bank shareholders and
otherwise sold, redeemed, or disposed of prior or
subsequent to the transaction will be considered in
making this representation.
(bb) The liabilities of Bank assumed by HNB and the
liabilities to which the transferred assets of Bank
are subject were incurred by Bank in the ordinary
course of its business.
(cc) Bank is not under the jurisdiction of a court in a
Title 11 or similar case within the meaning of
Section 368(a)(3)(A) of the Code.
(dd) The basis and fair market value of the assets of
Bank transferred to HNB will each equal or exceed
the sum of the liabilities assumed by HNB, plus
amount of liabilities, if any, to which the
transferred assets are subject.
The following representations have been made by Hibernia in
connection with the Bank Merger:
(ee) No additional Hibernia Common Stock is being issued
or exchanged in the merger of Bank into HNB. No
additional HNB Common Stock is being issued or
exchanged in the merger of Bank into HNB.
(ff) Prior to the transaction, Hibernia will be in
control of HNB within the meaning of Section 368(c)
of the code wherein "control" is defined to mean
the ownership of stock possessing at least 80
percent of the total combined voting power of all
classes of stock entitled to vote and at least 80
percent of the total number of shares of all other
classes of the corporation.
(gg) Following the transaction, HNB will not issue
additional shares of its Common Stock that would
result in Hibernia losing control of HNB within the
meaning of Section 368(c) of the Code.
(hh) Hibernia has no plan or intention to reacquire any
of its Common Stock constructively issued in the
Bank Merger.
(ii) Hibernia has no plan or intention to liquidate HNB;
to merge HNB into another corporation; to sell or
otherwise dispose of the Common Stock of HNB; or to
cause HNB to sell or otherwise dispose of any of
the assets of Bank acquired in the transaction,
except for dispositions made in the ordinary course
of business. As Hibernia makes other acquisitions,
it is likely that some or all of the acquired banks
will be merged with and into HNB. At this time,
the discussion provided under the caption "Parties
to the Merger" in the Prospectus provides a
complete list of all pending acquisitions that are
covered by signed agreements. However, no Common
Stock of HNB will be issued as consideration in any
of the pending acquisitions.
(jj) Following the transaction, HNB will continue the
historic business of Bank or will use a significant
portion of Bank's historic business assets in its
business.
(kk) No Common Stock of HNB will be issued in the Bank
Merger.
The following representations as made by both Commercial and
Hibernia in connection with the Bank Merger:
(ll) HNB will acquire at least 90 percent of the fair
market value of the net assets and at least 70
percent of the fair market of the gross assets held
by Bank immediately prior to the Bank Merger. For
purposes of this representation, amounts paid by
Bank to dissenters, Bank assets used to pay its
reorganization expenses, and all redemptions and
distributions (except for regular, normal
dividends) made by Bank immediately preceding the
transfer, will be included as assets of Bank held
immediately prior to the transaction.
(mm) Except for expenses relating to the registration of
Hibernia Common Stock and certain proxy printing
and mailing expenses to be paid solely by Hibernia,
which are directly related to the Mergers in
accordance with the guidelines established in
Revenue Ruling 73-54, 1973-1 C.B. 187, Hibernia,
HNB, Bank and the shareholders of Bank will pay
their respective expenses, if any, incurred in
connection with the transaction.
(nn) There is no intercorporate indebtedness existing
between Hibernia and Bank and their affiliates or
between HNB and Bank that was issued, acquired, or
will be settled at a discount.
(oo) No two parties to the transaction are investment
companies as defined in Section 368(a)(2)(F)(iii)
and (iv) of the Code.
(pp) None of the compensation received by any
shareholder-employees of Bank will be separate
consideration for, or allocable to, any of their
shares of Bank Common Stock; none of the shares of
Hibernia Common Stock received by any
shareholder-employees will be separate
consideration for, or allocable to, any employee
agreement; and the compensation paid to any
shareholder-employees will be for services actually
rendered and will be commensurate with amounts paid
to third parties bargaining at arm's-length for
similar services.
(qq) The Bank Merger will qualify as a statutory merger
under the Bank Merger Act and under applicable
state law.
TECHNICAL ANALYSIS
Section 368(a)(1)(A) of the Code provides that a
reorganization (a "Type A" reorganization) includes a
statutory merger or consolidation. Such a reorganization can
only be achieved by strict compliance with the applicable
corporation laws of the United States or a state or territory
of the United States. A statutory merger occurs wherein one
party (the surviving corporation) to the transaction absorbs
the other party whose corporate existence ceases. It has been
represented by the management of Hibernia that the merger of
Commercial with and into Hibernia, wherein Hibernia Common
Stock is to be exchanged for Commercial Common Stock, is to
occur as a statutory merger under applicable law.
Section 368(a)(2)(D) of the Code provides that the acquisition
by one corporation in exchange for stock of a corporation
which is in control of the acquiring corporation, of
substantially all of the properties of another corporation,
shall not disqualify a transaction under Section 368(a)(1)(A)
if (i) no stock of the acquiring corporation is used in the
transaction and (ii) the transaction would have otherwise
qualified as a Type A reorganization had the merger been into
the controlling corporation. It has been represented by the
management of Hibernia that the merger of Bank with and into
HNB, wherein Hibernia Common Stock is to be constructively
exchanged for Bank Common Stock, is to occur as a statutory
merger under applicable law.
Revenue Procedure 77-37, 1977-2 C.B. 568 (Section 3.01) provides
that, for advance ruling purposes, the "substantially all"
requirement of Section 368(a)(2)(D) is satisfied if there is
a transfer of assets representing at least 90 percent of the
fair market value of the net assets and at least 70 percent of
the fair market value of the gross assets held by the
transferor corporation immediately prior to the transfer. Any
payments to dissenters and any redemptions and distributions
(except for regular dividend distributions) made by the
corporation immediately preceding the transfer and which are
a part of the Agreement will be considered as assets held by
the corporation immediately prior to the transfer.
Additionally, the payment of expenses incurred in connection
with the Mergers is taken into consideration in applying the
"substantially all" test.
In the proposed Bank Merger, it has been represented by the
managements of Bank and HNB that HNB will acquire assets
representing at least 90 percent of the fair market value of
the net assets and 70 percent of the fair market value of the
gross assets of Bank and that, for this purpose, the fair
market value of the net and gross assets of Bank will be
determined before payment by Bank of any expenses incurred by
it in connection with the Bank Merger, before payment to any
dissenters to the Bank Merger, and before any redemptions and
distributions (except for regular, normal dividends) made by
Bank immediately preceding the transfer. Based upon the
foregoing representations, the "substantially all" requirement
will be met in the Bank Merger.
Additional Requirements
Sections 1.368-1(b) and 1.368-2(g) of the Income Tax
Regulations (the "Regulations") provide that the following
additional requirements must be met for a transaction to
qualify as a reorganization within the meaning of Section 368
of the Code:
(i) "continuity of interest" must be present,
(ii) "continuity of business enterprise" must exist, and
(iii) the transaction must be undertaken for reasons
pertaining to the continuance of the business of a
corporation which is a party to the transaction.
Continuity of Interest
In general, the continuity of interest test requires the
owners of the reorganized entity to receive and retain a
meaningful equity in the surviving entity. See e.g., Pinellas
Ice & Cold Storage Co. v. Comm'r, 287 U.S. 462 (1933);
Cortland Specialty Company v. Comm'r, 60 F.2d 937 (2d Cir.
1932), cert. denied, 288 U.S. 599 (1932); Helvering v.
Minnesota Tea Co., 296 U.S. 378 (1935).
Revenue Procedure 77-37, 1977-2 C.B. 568 (Section 3.02)
provides that, for advance ruling purposes, the continuity of
interest requirement is satisfied if there is a continuing
interest through stock ownership in the acquiring or
transferee corporation (or a corporation in "control" thereof
within the meaning of Section 368(c) of the Code) on the part
of the former shareholders of the acquired or transferor
corporation which is equal in value as of the effective date
of the reorganization, to at least 50 percent of the value of
all of the formerly outstanding stock of the acquired or
transferor corporation as of that date. Sales, redemptions,
and other dispositions of stock occurring prior or subsequent
to the exchange which are part of the plan of reorganization
will be considered in determining whether there is a 50
percent continuing interest through stock ownership as of the
effective date of the reorganization.
Based upon our understanding of the facts presented to us
orally and as set forth in the Statements of Facts and
Representations dated September 28, 1993, the 50 percent
continuity of interest test of Revenue Procedure 77-37, supra,
will be met in the Commercial Merger and the Bank Merger. It
has been represented by the management of Commercial that the
shareholders of Commercial have no plan or intention to sell,
exchange or otherwise dispose of a number of Hibernia shares
to be received in the transaction that will reduce their
Hibernia Common Stock holdings to less than the requisite 50
percent continuity of interest. Accordingly, in the
Commercial Merger there will be a continuing interest through
Common Stock ownership in Hibernia on the part of the former
shareholders of Commercial.
In Revenue Ruling 68-526, 1968-2 C.B. 156, the Internal
Revenue Service (the "Service) held that the acquisition of
the assets (and assumption of liabilities) of a parent
corporation and its 60 percent owned subsidiary constituted
separate tax-free reorganizations when the transactions
occurred pursuant to one plan of reorganization and for valid
business reasons. In Revenue Ruling 76-528, 1976-2 C.B. 103,
the Service clarified that the continuity of interest
requirement was met in Revenue Ruling 68-526 with respect to
the subsidiary acquisition even when the Parent had no assets
other than stock of a subsidiary because, in light of the
acquisition of the parent's assets, and its dissolution
pursuant to the plan of reorganization, the parent's
shareholders, in effect, "stepped into the parent's shoes" as
the only qualified parties to receive and continue the stock
interest formerly held by the parent corporation. Although no
assurance can be given that the Service will agree, the
rationale of the above Revenue Rulings suggests that the
continuity of interest maintained by the Commercial
shareholders in the Commercial Merger is relevant in
determining whether the continuity of interest requirement is
satisfied in the Bank Merger. See also PLR 9109044 (December
4, 1990) where the Service, after applying the step
transaction doctrine, ruled that a sideways merger of a Bank
Holding Company and its wholly owned banking subsidiary into
an acquiring bank holding company and its banking subsidiary
respectively constituted reorganizations under Section
368(a)(1)(C) and Section 368(a)(2)(D).
In the past, the Service has frequently ruled on certain facts
that the simultaneous mergers of a parent and its wholly-owned
subsidiary into an acquiring parent corporation and its
wholly-owned subsidiary, each qualified as a Section
368(a)(1)(A) reorganization (see e.g., PLR 9111025 (December
14, 1990), 9047015 (August 24, 1990) and 9003053 (October 26,
1989)). In other rulings involving slightly different facts
(i.e., minority shareholders in the subsidiary), the Service
held that the subsidiary mergers were Section 368(a)(1)(A)
reorganizations by reason of Section 368(a)(2)(D) (see e.g.,
PLR 9109044 (December 4, 1990), 8943067 (August 2, 1989) and
8942090 (July 27, 1989)).
Although private letter rulings are not binding on the Service
as precedent, they cited to illustrate a consistent rulings
position. In recent years, while the Service has declined to
rule on whether a transaction qualifies as a reorganization
pursuant to Section 368(a)(1)(A) of the Code (see section
3.01(26) of Rev. Proc. 92-3, 1992-1 C.B. 561, 564), it has
consistently ruled that the receipt by a target parent's
shareholders of stock of an acquiring corporation will not
prevent a lower tier target's merger from satisfying the
continuity of interest requirement of Section 1.368-1(b) of
the Regulations. See, for example, PLR 9237031 (June 16,
1992) and PLR 9317027 (January 29, 1993).
Continuity of Business Enterprise
Section 1.368-1(b) of the Regulations also provides that a
continuity of business enterprise (as described in Section
1.368-1(d) of the Regulations) is a requisite to a
reorganization. Section 1.368-1(d) of the Regulations
provides that continuity of business enterprise requires that
the acquiring corporation either continue the acquired
corporation's historic business or use a significant portion
of the acquired corporation's historic assets in a business.
The proposed Bank Merger will meet the continuity of business
enterprise test of Section 1.368-1(d) because, based upon the
representation of the management of HNB, HNB will continue the
historic business of Bank or will use a significant portion of
Bank's historic assets in a business.
Revenue Ruling 85-197, 1985-2 C.B. 120, provides that for
purposes of the continuity of business enterprise requirement,
the historic business of a holding company is the business of
its operating subsidiary. Similarly, Revenue Ruling 85-198,
1985-2 C.B. 120, held that the continuity of business
enterprise requirement was met upon the merger of two bank
holding companies where the business of a former subsidiary of
the acquired holding company was continued through a
subsidiary of the acquiring corporation. Accordingly, the
continuity of business enterprise requirement is met with
regard to the Commercial Merger because Hibernia through its
wholly-owned subsidiary HNB, will continue the banking
business indirectly conducted by Commercial.
Business Purpose
Section 1.368-2(g) of the Regulations provides that a
reorganization must be undertaken for reasons germane to the
continuance of the business of a corporation which is a party
to the reorganization. As heretofore indicated in the
Business Purpose Section set forth above, there are
substantial business reasons for the Mergers. Accordingly,
the Mergers each satisfy the business purpose requirement as
set forth in the Regulations.
Constructive Exchange of Shares
To avoid the expense and inconvenience of issuing Hibernia
shares to itself in the Bank Merger, and because Commercial's
shareholders will have already received fair value for their
shares, the shares of Bank Common Stock obtained by Hibernia
in the Commercial Merger shall be canceled. (See the
preceding discussion regarding Rev. Rul 76-528) In the Bank
Merger, which occurs simultaneously, but is to be described in
the closing documents covering the Mergers as a step following
the Commercial Merger, HNB technically would acquire the
assets of Bank by issuing shares of Hibernia Common Stock to
the Bank shareholders, Hibernia (as the result of the
Commercial Merger).
The Tax Court has consistently held that the physical transfer
of shares is not necessary if it would be a "meaningless
gesture," particularly in situations where common ownership is
present. See, Fowler Hosiery Co., 36 T.C. 201 (1961), aff'd
301 F.2d 394 (7th Cir. 1962) and William Holton George, 26
T.C. 396 (1956). In fact, the Service has ruled that the
absence of an actual physical exchange of shares does not
prevent a transaction from qualifying as a tax-free
reorganization if such an exchange would have been a
"meaningless gesture" or a "useless task." See Rev. Rul.
70-240, 1970-1 C.B. 81 and Rev. Rul. 75-383, 1975-2 C.B. 127.
See also Davant v. Commissioner, 366 F.2d 874 (5th Cir. 1966);
James Armour, Inc., 43 T.C. 295 (1964); American Manufacturing Co., 55 T.C.
204 (1970). In addition, the Service held in Revenue Ruling 78-47, 1978-1 C.B. 113,
that a physical issuance of shares was unnecessary in order to eliminate certain expenses
associated with a reorganization.
The Service has also consistently permitted constructive exchanges in private letter
rulings. See e.g., PLR 8750071 (September 17, 1987), 8722021 (February 25, 1987),
8620043 (February 14, 1986), 8403028 (October 17, 1983), and 8306010 (November 4,
1982).
Based on the above, the constructive exchange described herein does not prevent the
Bank Merger from qualifying as a tax-free reorganization.
Other Statutory Provisions
Section 368(b) of the Code defines the term "a party to a reorganization" to include a
corporation resulting from a reorganization, and both corporations, in the case of a
reorganization resulting from the acquisition by one corporation of stock or properties
of another.
Section 361(a) of the Code provides that no gain or loss shall be recognized to a
transferor corporation which is a party to a reorganization on any exchange pursuant to
the plan of reorganization solely for stock or securities in another corporation which is
a party to the reorganization.
Section 354(a)(1) of the Code provides that no gain or loss shall be recognized if stock
or securities in a corporation which is a party to a reorganization are, in pursuance of
the plan of reorganization, exchanged solely for stock or securities in such corporation
or in another corporation which is a party to the reorganization.
Section 362(b) of the Code generally provides that if property is acquired by a
corporation in connection with the reorganization, then the basis shall be the same as it
would be in the hands of the transferor, increased by the amount of gain recognized to
the transferor on such transfer.
Section 1223(2) of the Code provides that in determining a taxpayer's holding period for
property, there shall be included the period for which such property was held by another
person, if such property has, for the purpose of determining gain or loss from a sale or
exchange, the same basis in whole or in part in such taxpayer's hands as it would have
had in the hands of such other person.
Section 381 of the Code applies to certain transactions, including those transactions to
which Section 361 of the Code applies, where there is a transfer in connection with a
reorganization described in Section 368(a)(1)(A) or in Section 368(a)(1)(A) and Section
368(a)(2)(D) of the Code.
FEDERAL INCOME TAX CONSEQUENCES
Based solely upon the facts orally represented to us, the Statements of Facts and
Representations, the Agreement, and the Bank Plan of Merger, it is our opinion that the
following federal income tax consequences will result:
In the merger of Commercial with and into Hibernia:
(1) Provided the proposed merger of Commercial with and into Hibernia qualifies as
a statutory merger under Louisiana law, the Commercial Merger will be a
reorganization within the meaning of Section 368(a)(1)(A) of the Code.
Commercial and Hibernia will each be a party to a reorganization within the
meaning of Section 368(b) of the Code.
(2) No gain or loss will be recognized by Commercial upon the transfer of its assets
to Hibernia in exchange solely for Hibernia Common Stock, cash for dissenters,
if any, and the assumption by Hibernia of the liabilities of Commercial, since any
cash for dissenters will be distributed to the shareholders (Sections 361(b) and
357(a) of the Code).
(3) No gain or loss will be recognized to Hibernia on receipt of the Commercial
assets in exchange for Hibernia Common Stock (Section 1032(a) of the Code).
(4) The basis of the assets of Commercial in the hands of Hibernia will, in each case,
be the same as the basis of those assets in the hands of Commercial immediately
prior to the transaction (Section 362(b) of the Code).
(5) The holding period of the assets of Commercial in the hands of Hibernia will, in
each case, include the period for which such assets were held by Commercial
(Section 1223(2) of the Code).
(6) No gain or loss will be recognized by the shareholders of Commercial upon the
receipt of solely Hibernia Common Stock in exchange for their shares of
Commercial Common Stock (Section 354(a)(1) of the Code).
(7) The basis of Hibernia Common Stock to be received by the shareholders of
Commercial will be, in each instance, the same as the basis of the Common Stock
of Commercial surrendered in exchange therefor (Section 358(a)(1) of the Code).
(8) The holding period of the Hibernia Common Stock to be received by the
shareholders of Commercial in the transaction will include in each instance, the
period during which the Commercial Common Stock surrendered in exchange
therefor is held as a capital asset on the date of the surrender (Section 1223(l) of
the Code).
(9) Hibernia will succeed to and take into account those tax attributes of Commercial
described in Section 381(c) of the Code. (Section 381(a) of the Code and Section
1.381(a)-1 of the Regulations) These items will be taken into account by
Hibernia subject to the conditions and limitations specified in Sections 381, 382,
383, and 384 of the Code and the Regulations thereunder.
(10) As provided by Section 381(c)(2) of the Code and Section 1.381(c)(2)-1 of the
Regulations, Hibernia will succeed to and take into account the earnings and
profits, or deficit in earnings and profits, of Commercial as of the date of
transfer. Any deficit in the earnings and profits of Hibernia or Commercial will
be used only to offset the earning and profits accumulated after the date of
transfer.
(11) Cash received by a dissenting shareholder of Commercial in exchange for his or
her Commercial Common Stock will be treated as having been received by such
shareholder as a distribution in redemption of his or her stock, subject to the
provisions and limitations of Section 302 of the Code. If, as a result of such
distribution, a shareholder owns no stock either directly or through the application
of Section 318(a) of the Code, the redemption will be a complete termination of
interest within the meaning of Section 302(b)(3) of the Code and such cash will
be treated as a distribution in full payment in exchange for his or her stock, as
provided by Section 302(a) of the Code.
(12) The payment of cash in lieu of fractional share interests of Hibernia Common
Stock will be treated as if the fractional shares were distributed as part of the
exchange and then were redeemed by Hibernia. These cash payments will be
treated as distributions in full payment in exchange for the stock redeemed, as
provided in Section 302(a) of the Code. (Rev. Rul. 66-365, 1966-2 C.B. 116 and
Rev. Proc. 77-41, 1977-2 C.B. 574)
In the merger of Bank with and into HNB:
(13) Provided the proposed merger of Bank with and into HNB qualifies as statutory
merger under Louisiana Law and the Bank Merger Act, the acquisition by HNB
of substantially all of the assets of Bank solely in constructive exchange for
Hibernia Common Stock, cash for dissenters, if any, and the assumption by HNB
of the liabilities of Bank, will qualify as a reorganization under the provisions of
Sections 368(a)(1)(A) and 368(a)(2)(D) of the Code. Bank, Hibernia and HNB
will each be a party to a reorganization within the meaning of Section 368(b) of
the Code.
(14) No gain or loss will be recognized to Bank upon the transfer of substantially all
of its assets to HNB in constructive exchange for Hibernia Common Stock, cash
for dissenters, if any, and the assumption of Bank's liabilities by HNB, since any
cash for dissenters will be distributed to the Bank shareholders (Sections 361 and
357(a) of the Code).
(15) No gain or loss will be recognized by either Hibernia or HNB upon the
acquisition by HNB of substantially all of the assets of Bank in constructive
exchange for Hibernia Common Stock, cash for dissenters, if any, and the
assumption of Bank's liabilities (Section 1032(a) of the Code). (Rev. Rul.
57-278, 1957-1 C.B. 124.)
(16) The basis of the assets of Bank acquired by HNB will be the same in the hands
of HNB as the basis of such assets in the hands of Bank immediately prior to the
exchange (Section 362(b) of the Code).
(17) The basis of the HNB Common Stock in the hands of Hibernia will be increased
by an amount equal to the basis of the Bank assets in the hands of HNB and
decreased by the sum of the amount of the liabilities of Bank assumed by HNB
and the amount of liabilities to which the assets of Bank are subject (Section
1.358-6 of proposed regulations).
(18) The holding period of the assets of Bank received by HNB will, in each instance,
include the period for which such assets were held by Bank (Section 1223(2) of
the Code).
(19) As provided by Section 381(c) of the Code and Section 1.381(c)(2)-1 of the
Regulations, HNB will succeed to and take into account the earnings and profits,
or deficit in earnings and profits, of Bank as of the date of transfer. Any deficit
in the earnings and profits of Bank or HNB will be used only to offset the
earnings and profits accumulated after the date of transfer.
(20) The shareholder of HNB will recognize no gain or loss upon the constructive
exchange of Bank Common Stock solely for Hibernia Common Stock. (Section
354(a)(1) of the Code.)
(21) Bank will recognize no gain or loss on the transfer of its assets to HNB in
constructive exchange for Hibernia Common Stock and the assumption by HNB
of the liabilities of Bank, as described above. (Sections 361(a) and 357(a) of the
Code.)
(22) Bank will close its taxable year as of the date of the distribution or transfer.
HNB will not close its taxable year merely because of the merger. (Section
381(b) of the Code.)
(23) Pursuant to Section 381(a) of the Code and Section 1.381(a)-1 of the Regulations,
HNB will succeed to and take into account the items of Bank described in Section
381(c) of the Code. These items will be taken into account by HNB subject to
the provisions and limitations specified in Sections 381, 382, 383 and 384 of the
Code and Regulations promulgated thereunder.
STATE INCOME TAX CONSEQUENCES
(1) The Louisiana income tax treatment to the shareholders of Commercial will be
substantially the same as the federal income tax treatment to the shareholders of
Commercial.
SCOPE OF OPINION
The scope of this opinion is expressly limited to the federal income tax issues specifically
addressed in (1) through (23) in the section entitled "Federal Income Tax Consequences"
above and (1) in the section entitled "State Income Tax Consequences" above.
Specifically, our opinion has not been requested and none is expressed with regard to the
federal, foreign, state or local income tax consequences for the shareholders of Hibernia
and HNB. We have made no determination nor expressed any opinion as to any
limitations, including those which may be imposed under Section 382, on the availability
of net operating loss carryovers (or built-in gains or losses), if any, after the Mergers,
the application (if any) of the alternative minimum tax to this transaction, nor the
application of any consolidated return or employee benefit issues which may arise as a
result of the Mergers. Further, we have made no determination as whether Commercial
dividend distributions have been sufficient to eliminate any undistributed personal holding
company tax liability. We have made no determination nor expressed any opinion as to
the fair market value of any of the assets being transferred in the Mergers nor the
common shares being exchanged in the Mergers. Furthermore, our opinion has not been
requested and none is expressed with respect to any foreign, state or local tax
consequences to Commercial, Bank, Hibernia, and HNB.
Our opinion, as stated above, is based upon the analysis of the Code, the Regulations
thereunder, current case law, and published rulings. The foregoing are subject to
change, and such change may be retroactively effective. If so, our views, as set forth
above, may be affected and may not be relied upon. Further, any variation or
differences in the facts or representations recited herein, for any reason, might affect our
conclusions, perhaps in an adverse manner, and make them inapplicable. In addition,
we have undertaken no obligation to update this opinion for changes in facts or law
occurring subsequent to the date thereof.
This letter represents our views as to the interpretation of existing law and, accordingly,
no assurance can be given that the Service or the courts will agree with the above
analysis.
Very truly yours,
PART II. INFORMATION NOT REQUIRED IN PROSPECTUS
Item 20. Indemnification of Directors and Officers.
The Louisiana Business Corporation Law ("LBCL") contains two
provisions that directly affect the liability of officers and
directors of Louisiana corporations to the corporations and
shareholders whom they serve. Section 83 permits Louisiana
corporations to indemnify officers and directors, as well as
certain other individuals who act on behalf of such corporations.
Sections 91 and 92 set forth the liability of officers and
directors of Louisiana corporations.
Section 91 of the LBCL provides that officers and directors of
Louisiana corporations are fiduciaries with respect to the
corporation and its shareholders and requires that they discharge
the duties of their positions as such in good faith and with the
diligence, care, judgment and skill which ordinarily prudent men
would exercise under similar circumstances in like positions.
Section 91 specifically provides that it is not intended to
derogate from any indemnification permitted under Section 83,
discussed below.
Section 92 of the LBCL limits the liability of officers and
directors with respect to certain matters, as well as imposes
personal liability for certain actions, such as the knowing
issuance of shares in violation of the LBCL. Paragraph E of
Section 92 permits a director, in the performance of his duties, to
be fully protected from liability in relying in good faith on the
records of the corporation and upon such information, opinions,
reports or statements presented to the corporation, the board of
directors, or any committee of the board by any of the
corporation's officers or employees, or by any committee of the
board of directors, or by any counsel, appraiser, engineer or
independent or certified public accountant selected with reasonable
care by the board of directors or any committee thereof or any
officer having the authority to make such a selection or by any
other person as to matters the directors reasonably believe are
within such other person's professional or expert competence and
which person is selected with reasonable care by the board of
directors or any committee thereof or any officer having the
authority to make such selection.
Section 83 of the LBCL permits a Louisiana corporation to
indemnify any person who is or was a party or is threatened to be
made a party to any action, suit or proceeding by reason of the
fact that he or she was a director, officer, employee or agent of
the corporation, or was serving at the request of the corporation
in one of those capacities for another business. Such persons may
be indemnified against expenses (including attorneys' fees),
judgments, fines and amounts paid in settlement actually and
reasonably incurred by such persons in connection with any such
action as long as the indemnified party acted in good faith and in
a manner he or she reasonably believed to be in, or not opposed to,
the best interests of the corporation. With respect to criminal
actions or proceedings, the indemnified person must not only have
acted in good faith and in a manner believed to be in or not
opposed to the best interest of the corporation; he or she must
also not have had any reasonable cause to believe that his or her
conduct was unlawful.
The LBCL treats suits by or in the right of the corporation,
or derivative suits, differently from other legal actions.
Indemnification is not permitted in a derivative action for any
expenses if the individual seeking indemnification is adjudged
liable for negligence or misconduct in the performance of his or
her duty to the corporation unless specifically ordered by the
court. Otherwise, officers and directors may be indemnified in
derivative actions only with respect to expenses (including
attorneys' fees) actually and reasonably incurred in connection
with the defense or settlement of the action.
Indemnification of officers and directors may only be made by
the corporation if the corporation has specifically authorized
indemnification after determining that the applicable standard of
conduct has been met. This determination may be made (i) by the
board of directors by a majority vote of a quorum consisting of
directors who were not parties to such action, suit or proceeding,
or (ii) if such a quorum is not obtainable or a quorum of
disinterested directors so directs, by independent legal counsel,
or (iii) by the shareholders.
Indemnification of officers and directors against reasonable
expenses is mandatory under Section 83 of the LBCL to the extent
the officer or director is successful on the merits or in the
defense of any action or suit against him giving rise to a claim of
indemnification.
Louisiana corporations are permitted to advance the costs of
defense to officers and directors with respect to claims for which
they may be indemnified under Section 83 of the LBCL. In order to
advance such costs, however, such procedure must be approved by the
board of directors by a majority of a quorum consisting of
disinterested directors. In addition, a corporation may only
advance defense costs if it has received an undertaking from the
officer or director to repay the amounts advanced unless it is
ultimately determined that he or she is entitled to be indemnified
as otherwise authorized by Section 83.
Louisiana corporations are also specifically permitted to
procure insurance on behalf of officers and directors and former
officers and directors for actions taken in their capacities as
such. Insurance coverage may be broader than the limits of
indemnification under Section 83. Also, the indemnification
provided for in Section 83 is not exclusive of any other rights to
indemnification, whether arising from contracts or otherwise.
The Company has adopted an indemnification provision to its
articles of incorporation that provides for indemnification of
officers and directors under the circumstances permitted by
Louisiana law. The Company's indemnification provision requires
indemnification, except as prohibited by law, of officers and
directors of the Company or any of its wholly-owned subsidiaries
against expenses, judgments, fines and amounts paid in settlement
actually and reasonably incurred in connection with any action,
suit or proceeding, whether civil or criminal, administrative or
investigative (including any action by or in the right of the
Company) by reason of the fact that the person served as an officer
or director of the Company or one of its subsidiaries. Officers
and directors may only be indemnified against expenses in cases
brought by the officer or director against the Company if the
action is a claim for indemnification, the officer or director
prevails in the action, or indemnification is included in any
settlement or is awarded by the court. The indemnification
provision further requires the Company to advance defense costs to
officers and directors in such suits and proceedings upon receipt
of an undertaking to repay such expenses unless it is ultimately
determined that the officer or director is entitled to
indemnification as authorized by the Article.
The Company's Articles of Incorporation further provide that
no director or officer of the Company shall be personally liable to
the Company or its shareholder for monetary damages for breach of
fiduciary duty as an officer or director. This provision is
limited to those circumstances in which such a limitation of
liability is permitted under applicable law and would not be
operative in any circumstances in which the law prohibits such an
limitation.
The Articles of Association of the Bank include
indemnification and limitation of liability provisions identical to
those adopted by the Company and described above.
Item 21. Exhibits and Financial Statement Schedules.
EXHIBIT DESCRIPTION
2 Agreement and Plan of Merger (included as
Appendix A to the Proxy Statement-Prospectus)
3.1 Exhibit 4.1 to the Registration Statement on
Form S-3 filed with the Commission by the
Registrant (Registration No. 33-23591) is
hereby incorporated by reference (Articles of
Incorporation of the Registrant, as amended to
date)
3.2 Exhibit 4.2 to the Registration Statement on
Form S-8 filed with the Commission by the
Registrant (Post-Effective Amendment No. 2 to
Registration No. 2-96194) is hereby
incorporated by reference (By-Laws of the
Registrant, as amended to date)
5 Opinion of Patricia C. Meringer, Esq. re:
legality of shares
8 Opinion of Ernst & Young, certified public
accountants, regarding certain tax matters
(included as Appendix D to the Proxy
Statement-Prospectus)
10.13 Exhibit 10.13 to the Annual Report on Form 10-
K for the fiscal year ended December 31, 1988,
filed with the Commission by the Registrant
(Commission File No. 0-7220) is hereby
incorporated by reference (Deferred
Compensation Plan for Outside Directors of
Hibernia Corporation and its Subsidiaries, as
amended to date)
10.14 Exhibit 10.14 to the Annual Report on Form 10-
K for the fiscal year ended December 31, 1990,
filed with the Commission by the Registrant
(Commission File No. 0-7220) is hereby
incorporated by reference (Hibernia
Corporation Executive Life Insurance Plan)
10.16 Exhibit 4.7 to the Registration Statement on
Form S-8 filed with the Commission by the
Registrant (Registration No. 33-26871) is
hereby incorporated by reference (Hibernia
Corporation 1987 Stock Option Plan, as amended
to date)
10.28 Exhibits M and N to the Company's definitive
proxy statement dated August 17, 1992 relating
to its 1992 Annual Meeting of Shareholders
filed with the Commission by the Registrant is
hereby incorporated by reference (Warrant
Agreement dated as of May 27, 1992 among the
Registrant, The Chase Manhattan
Bank (National Association) and certain other
lenders, including the Form of Warrant
attached thereto)
10.29 Exhibit L to the Registrant's definitive proxy
statement dated August 17, 1992 relating to
its 1992 Annual Meeting of Shareholders filed
with the Commission by the Registrant is
hereby incorporated by reference (Registration
Rights Agreement dated as of May 27, 1992
among the Registrant, The Chase Manhattan Bank
(National Association) and certain other
lenders, as amended to date)
10.30 Exhibit 10.30 to a Current Report on Form 8-K
dated July 17, 1992 filed by the Registrant
with the Commission is hereby incorporated by
reference (Stock Purchase Agreement dated as
of July 17, 1992 between the Registrant,
Hibernia National Bank in Texas and Comerica
Incorporated)
10.31 Exhibit 10.31 to a Current Report on Form 8-K
dated September 15, 1992 filed by the
Registrant with the Commission is hereby
incorporated by reference (Amendment to Stock
Purchase Agreement dated September 10, 1992
between Registrant and Comerica Incorporated)
10.34 Exhibit C to the Registrant's definitive proxy
statement dated August 17, 1992 relating to
its 1992 Annual Meeting of Shareholders filed
by the Registrant with the Commission is
hereby incorporated by reference (Long-Term
Incentive Plan of Hibernia Corporation)
10.35 Exhibit A to the Registrant's definitive proxy
statement dated March 23, 1993 relating to its
1993 Annual Meeting of Shareholders filed by
the Registrant with the Commission is hereby
incorporated by reference (1993 Director Stock
Option Plan of Hibernia Corporation)
10.36 Exhibit 10.36 to the Registrant's Annual
Report on Form 10-K for the fiscal year ended
December 31, 1993 filed with the Commission
(Commission file no. 0-7220) is hereby
incorporated by reference (Employment
agreement between Stephen A. Hansel and
Hibernia Corporation)
10.37 Termination Agreements with directors of First Commercial
Bank and Commercial Bancshares, Inc. providing for the
termination of their interest in certain deferred
compensation benefits
13 Exhibit 13 to the Registrant's Annual Report
on Form 10-K for the fiscal year ended
December 31, 1993 filed with the Commission
(Commission file No. 0-7220) is hereby
incorporated by reference (1993 Annual Report
to security holders of the Registrant).
22 Exhibit 22 to the Annual Report on Form 10-K
of the Registrant for the fiscal year ended
December 31, 1989 filed with the Commission
(Commission file no. 0-7220) is hereby
incorporated by reference (Subsidiaries of the
Registrant)
23(a) Consents of Patricia C. Meringer, Esq.
(included with Exhibit 5)
23(b) Consent of Ernst & Young
Consent of Castaing, Hussey and Lolan
Consent of The Bank Advisory Group, Inc.
(included with Appendix D)
24 Powers of Attorney
Item 22. Undertakings.
The undersigned registrant hereby undertakes:
(i) to file, during any period in which offers or sales are
being made pursuant to this Registration Statement, a post-
effective amendment to this Registration Statement:
(a) to include prospectus required by Section 10(a)(3) of
the Securities Act of 1933;
(b) to reflect in the prospectus any facts or events
arising after the effective date of the Registration Statement (or
the most recent post-effective amendment hereof) which,
individually or in the aggregate, represent a fundamental change in
the information set forth in the Registration Statement; and
(c) to include any material information with respect to
the plan of distribution not previously disclosed in the
Registration Statement or any material change to such information
in the Registration Statement;
(ii) that, for purposes of determining any liability under
the Securities Act of 1933, each filing of the registrant's annual
report pursuant to section 13(a) or section 15(d) of the Securities
Exchange Act of 1934 (and, where applicable, each filing of an
employee benefit plan's annual report pursuant to section 15(d) of
the Securities Exchange Act of 1934) that is incorporated by
reference in the registration statement shall be deemed to be a new
registration statement relating to the securities offered therein,
and the offering of such securities at that time shall be deemed to
be the initial bona fide offering thereof;
(iii) to deliver or cause to be delivered with the
prospectus, to each person to whom the prospectus is sent or given,
the latest annual report to security holders that is incorporated
by reference in the prospectus and furnished pursuant to and
meeting the requirements of Rule 14a-3 or Rule 14c-3 under the
Securities Exchange Act of 1934; and, where interim financial
information required to be presented by Article 3 of Regulation S-X
are not set forth in the prospectus, to deliver, or cause to be
delivered to each person to whom the prospectus is sent or given,
the latest quarterly report that is specifically incorporated by
reference in the prospectus to provide such interim financial
information;
(iv) that prior to any public reoffering of the securities
registered hereunder through use of a prospectus which is a part of
this registration statement, by any person or party who is deemed
to be an underwriter within the meaning of Rule 145(c), the issuer
undertakes that such reoffering prospectus will contain the
information called for by the applicable registration form with
respect to reofferings by persons who may be deemed underwriters,
in addition to information called for by the other Items of the
applicable form;
(v) that every prospectus (a) that is filed pursuant to the
preceding paragraph, or (b) that purports to meet the requirements
of section 10(a)(3) of the Act and is used in connection with an
offering of securities subject to Rule 415, will be filed as a part
of an amendment to the registration statement and will not be used
until such amendment is effective and that, for purposes of
determining any liability under the Securities Act of 1933, each
such post-effective amendment shall be deemed to be a new
registration statement relating to the securities offered therein,
and the offering of such securities at that time shall be deemed to
be the initial bona fide offering thereof.
(vi) to respond to requests for information that is
incorporated by reference into the prospectus pursuant to Items 4,
10(b), 11 or 13 of Form S-4 within one business day of receipt of
such request and to send the incorporated documents by first class
mail or other equally prompt means. This includes information
contained in documents filed subsequent to the effective date of
the registration statement through the date of responding to the
request.
(vii) to supply by means of a post-effective amendment all
information concerning a transaction, and the company being
acquired involved therein, that was not the subject of and included
in the registration statement when it became effective.
SIGNATURES
Pursuant to the requirements of the Securities Act of 1933,
the Registrant hereby certifies that it has reasonable grounds to
believe that it meets all of the requirements for filing on Form S-
4 and has duly caused this Amendment No. 2 to be signed on its
behalf by the undersigned, thereunto duly authorized, in the City
of New Orleans, State of Louisiana, on May 9, 1994.
HIBERNIA CORPORATION
By: /S/ RON E. SAMFORD, JR.
Ron E. Samford, Jr.
Controller and Executive
Vice President
Pursuant to the requirements of the Securities Act of 1933,
Amendment No. 2 to the Registration Statement has been signed by
the following persons in the capacities indicated on May 9, 1994.
Signatures Title
*
_____________________________ Chairman of the Board
Robert H. Boh
*
_____________________________ President and Chief Executive
Stephen A. Hansel Officer and Director
*
_____________________________ Chief Financial Officer
Robert W. Close
*
_____________________________ Chief Accounting Officer
Ron E. Samford, Jr.
*
_____________________________ Director
W. James Amoss, Jr.
*
_____________________________ Director
J. Terrell Brown
*
_____________________________ Director
Brooke H. Duncan
*
_____________________________ Director
Richard W. Freeman
*
_____________________________ Director
Robert L. Goodwin
*
_____________________________ Director
Dick H. Hearin
*
_____________________________ Director
Robert T. Holleman
*
_____________________________ Director
Hugh J. Kelly
*
_____________________________ Director
John P. Laborde
*
_____________________________ Director
Sidney W. Lassen
*
_____________________________ Director
Donald J. Nalty
*
_____________________________ Director
Robert T. Ratcliff
*
_____________________________ Director
James H. Stone
*
_____________________________ Director
Virgnia Eason Weinmann
*
_____________________________ Director
E. L. Williamson
*
_____________________________ Director
Robert E. Zetzmann
*By: /S/ PATRICIA C. MERINGER
Patricia C. Meringer
Attorney-in-Fact
EXHIBIT INDEX
Exhibit Sequential Page
Number
5 Opinion of Patricia C. Meringer, Esq.*
10.37 Agreements Terminating and Dissolving Unfunded Deferred
Compensation Agreement
23(a) Consent of Patricia C. Meringer, Esq. (included with
Exhibit 5)*
23(b) Consent of Ernst & Young
Consent of Castaing, Hussey & Lolan
Consent of The Bank Advisory Group, Inc.
(included with Appendix D)*
24 Powers of Attorney*
________
* Previously filed
EXHIBIT 10.37
AGREEMENTS TERMINATING AND DISSOLVING
UNFUNDED DEFERRED COMPENSATION AGREEMENT
This agreement is made and entered into as of the 2nd day of
September, 1993, by and between First Commercial Bank, a banking
corporation authorized and existing under the laws of the State of
Louisiana ("the Bank"), and Newman Trowbridge, Jr. (the
"Director").
RECITALS
WHEREAS, the Bank has previously adopted and established a
non-tax qualified plan of deferred compensation for the purpose of
permitting members of the Board of Directors of the Bank to defer
fees payable to them for services as a member of the Board of
Directors of the Bank or of committees and advisory boards
established by the Board of Directors; and
WHEREAS, by agreement effective as of January 1, 1991, the
Bank and the Director entered into an Amended And Restated Unfunded
Deferred Compensation Agreement (the "Agreement") evidencing the
rights and obligations of the Bank and the Director pursuant to the
deferred compensation plan; and
WHEREAS, an agreement has been entered into with Hibernia
Corporation which would result in the merger of the Bank into
Hibernia National Bank (the "Merger"); and
WHEREAS, a condition of consummation of the Merger is the
termination and dissolution of the deferred compensation plan; and
WHEREAS, it is in the best interest of the Bank, its
shareholders, and the Director to terminate and dissolve the
deferred compensation plan as evidenced by the Agreement and it is
the desire of the Bank and Director by these presents to so
terminate and dissolve the deferred compensation plan.
NOW, THEREFORE, in consideration of the terms and conditions
hereof, the Bank and the Director hereby mutually covenant and
agree as follows:
1. The Bank has, from time to time, acquired, as owner,
policies of insurance on the lives of members of its Board of
Directors, which insurance is intended to protect the Bank
financially against the loss of the Directors' service to the Bank.
Specifically, the Bank is the owner of Policy Number 1510406 issued
by Security Life of Denver (the "Policy") insuring the life of the
Director.
2. The Director and the Bank mutually agree that the
Agreement shall immediately terminate and dissolve and neither the
Bank nor the Director shall have any further rights or obligations
thereunder, without further action by the Director, upon the
execution by the Bank of an irrevocable absolute assignment of the
Policy to the Director and the mailing of said assignment to the
issuer of the Policy or the issuer's agent.
3. Upon execution of the assignment, the Bank shall give the
Director notice of same by transmitting a copy thereof to the
Director at the Director's last know address; however, the failure
to give the notice required by this paragraph shall not prevent or
delay the termination of the Agreement.
4. Upon assignment of the Policy to the Director, the Bank
shall have no further responsibility or obligation with respect to
the Policy or the Agreement. The Bank, however, agrees to timely
execute such other documentation as may be reasonably required or
requested by the issuer of the Policy or the Director in order to
evidence transfer of the ownership of the Policy to the Director.
IN WITNESS WHEREOF, the Bank and the Director have executed
this agreement, in duplicate originals, as of the day and date
first above written.
WITNESSES: FIRST COMMERCIAL BANK
/S/ DONNA COLE BY: /S/ NEWMAN TROWBRIDGE, JR.
NEWMAN TROWBRIDGE, JR.
CHAIRMAN
/S/ BY: /S/ NEWMAN TROWBRIDGE, JR.
NEWMAN TROWBRIDGE, JR.
DIRECTOR
AGREEMENT TERMINATING AND DISSOLVING
UNFUNDED DEFERRED COMPENSATION AGREEMENT
This agreement is made and entered into as of the 17th day of
September, 1993 by and between First Commercial Bank, a banking
corporation authorized and existing under the laws of the State of
Louisiana (the "Bank"), and James Poindexter (the "Director").
RECITALS
WHEREAS, the Bank has previously adopted and established a
non-tax qualified plan of deferred compensation for the purposes of
permitting members of the Board of Directors of the Bank to defer
fees payable to them for services as a member of the Board of
Directors of the Bank or of committees and advisory boards
established by the Board of Directors; and
WHEREAS, by agreement effective as of January 1, 1982, the
Bank and the Director entered into an Amended and Restated Unfunded
Deferred Compensation Agreement (the "Agreement") evidencing the
rights and obligations of the Bank and the Director pursuant to the
deferred compensation plan; and
WHEREAS, an agreement has been entered into with Hibernia
Corporation which would result in the merger of the Bank into
Hibernia National Bank (the "Merger"); and
WHEREAS, a condition of consummation of the Merger is the
termination and dissolution of the deferred compensation plan; and
WHEREAS, it is in the best interest of the Bank, its
shareholders, and the Director to terminate and dissolve the
deferred compensation plan as evidenced by the Agreement and it is
the desire of the Bank and Director by these presents to so
terminate and dissolve the deferred compensation plan.
NOW, THEREFORE, in consideration of the terms and conditions
hereof, the Bank and the Director hereby mutually covenant and
agree as follows:
1. The Director and Bank mutually agree that the Agreement
shall immediately terminate and dissolve and neither the Bank nor
the Director shall have any further rights or obligations
thereunder, without further action by the Director, upon the
payment by the Bank to the Director of the sum of SIXTY NINE
THOUSAND ONE HUNDRED NINETY THREE AND NO/100 ($69,193.00 DOLLARS.
2. Payment pursuant to the terms hereof shall be deemed to
have been made upon the mailing by the Bank to Director of a
certified check drawn on the Bank in the amount set forth in
Paragraph 1 hereof.
IN WITNESS HEREOF, the Bank and the Director have executed
this agreement, in duplicate originals, as of the day and date
first above written.
WITNESSES: FIRST COMMERCIAL BANK
/S/ CHERYL L. HARRIS BY: /S/ NEWMAN TROWBRIDGE, JR.
/S/ HOPE A. ARCENEAUX NEWMAN TROWBRIDGE, JR.,
CHAIRMAN
/S/ DONNA COLE BY: /S/ JAMES POINDEXTER
/S/ BETTY VEEDAN JAMES POINDEXTER
DIRECTOR
EXHIBIT 23(b)(i)
CONSENT OF ERNST & YOUNG
Consent of Independent Auditors
We consent to the reference to our firm under the caption "Experts"
in the Registration Statement (Form S-4 No. 33-51901) and related
Prospectus of Hibernia Corporation for the registration of 2,412,903 shares
of its common stock to be issued pursuant to its proposed merger
with Commercial Bancshares, Inc. and to the incorporation by
reference therein of our report dated January 11, 1994, with
respect to the consolidated financial statements of Hibernia
Corporation incorporated by reference in its Annual Report (Form
10-K) for the year ended December 31, 1993, filed with the
Securities and Exchange Commission.
s/ERNST & YOUNG
New Orleans, Louisiana
May 9, 1994
EXHIBIT 23(b)(ii)
CONSENT OF CASTAING, HUSSEY AND LOLAN
We consent to the reference to our firm under the caption "Experts"
in the Registration Statement (Form S-4) and related Prospectus
of Hibernia Corporation for the registration of its common stock to be issued
pursuant to its proposed merger with Commercial Bancshares, Inc. and to the
inclusion therein of our report dated January 25, 1994, with
respect to the consolidated financial statements of Commercial
Bancshares, Inc. and also included therein, filed with the
Securities and Exchange Commission.
s/Castaing, Hussey and Lolan CPAs
New Iberia, Louisiana
May 9, 1994
EXHIBIT 24
P0WER OF ATTORNEY
KNOW ALL MEN BY THESE PRESENTS, that the undersigned director
of Hibernia Corporation, a Louisiana corporation (the
"Corporation"), does hereby name, constitute and appoint Robert W.
Close, Patricia C. Meringer and Ron E. Samford, Jr., and each of
them (with full power to each of them to act alone), his true and
lawful agents and attorneys-in-fact, for him and on his behalf and
in his name, place and stead, in any and all capacities, to sign,
execute, acknowledge, deliver, and file (a) with the Securities and
Exchange Commission (or any other governmental or regulatory
authority), a Registration Statement on Form S-4 (or other
appropriate form) and any and all amendments (including post-
effective amendments) thereto, with any and all exhibits and any
and all other documents required to be filed with respect thereto
or in connection therewith, relating to the registration under the
Securities Act of 1933 of Common Stock of the Corporation to be
issued in the merger between the Corporation and Commercial
Bancshares, Inc. ("Commercial") wherein the Corporation agrees to
exchange shares of its common stock for all of the outstanding
shares of common stock of Commercial and merge Commercial into the
Corporation, authorized by resolutions adopted by the Board of
Directors on September 28, 1993, and (b) with the securities
agencies or officials of various jurisdictions, all applications,
qualifications, registrations or exemptions relating to such
offering under the laws of any such jurisdiction, including any
amendments thereto or other documents required to be filed with
respect thereto or in connection therewith, granting unto said
agents and attorneys, and each of them, full power and authority to
do and perform each and every act and thing requisite and necessary
to be done in and about the premises in order to effectuate the
same as fully to all intents and purposes as the undersigned might
or could do if personally present, and the undersigned hereby
ratifies and confirms all that said agents and attorneys-in-fact,
or any of them may lawfully do or cause to be done by virtue
hereof.
IN WITNESS WHEREOF, the undersigned has hereunto set his hand
on this 26th day of October, 1993.
s/ W. JAMES AMOSS, JR.
W. James Amoss, Jr.
Director
HIBERNIA CORPORATION
P0WER OF ATTORNEY
KNOW ALL MEN BY THESE PRESENTS, that the undersigned Chairman
and director of Hibernia Corporation, a Louisiana corporation (the
"Corporation"), does hereby name, constitute and appoint Robert W.
Close, Patricia C. Meringer and Ron E. Samford, Jr., and each of
them (with full power to each of them to act alone), his true and
lawful agents and attorneys-in-fact, for him and on his behalf and
in his name, place and stead, in any and all capacities, to sign,
execute, acknowledge, deliver, and file (a) with the Securities and
Exchange Commission (or any other governmental or regulatory
authority), a Registration Statement on Form S-4 (or other
appropriate form) and any and all amendments (including post-
effective amendments) thereto, with any and all exhibits and any
and all other documents required to be filed with respect thereto
or in connection therewith, relating to the registration under the
Securities Act of 1933 of Common Stock of the Corporation to be
issued in the merger between the Corporation and Commercial
Bancshares, Inc. ("Commercial") wherein the Corporation agrees to
exchange shares of its common stock for all of the outstanding
shares of common stock of Commercial and merge Commercial into the
Corporation, authorized by resolutions adopted by the Board of
Directors on September 28, 1993, and (b) with the securities
agencies or officials of various jurisdictions, all applications,
qualifications, registrations or exemptions relating to such
offering under the laws of any such jurisdiction, including any
amendments thereto or other documents required to be filed with
respect thereto or in connection therewith, granting unto said
agents and attorneys, and each of them, full power and authority to
do and perform each and every act and thing requisite and necessary
to be done in and about the premises in order to effectuate the
same as fully to all intents and purposes as the undersigned might
or could do if personally present, and the undersigned hereby
ratifies and confirms all that said agents and attorneys-in-fact,
or any of them may lawfully do or cause to be done by virtue
hereof.
IN WITNESS WHEREOF, the undersigned has hereunto set his hand
on this 26th day of October, 1993.
S/ROBERT H. BOH
Robert H. Boh
Chairman and Director
HIBERNIA CORPORATION
P0WER OF ATTORNEY
KNOW ALL MEN BY THESE PRESENTS, that the undersigned director
of Hibernia Corporation, a Louisiana corporation (the
"Corporation"), does hereby name, constitute and appoint Robert W.
Close, Patricia C. Meringer and Ron E. Samford, Jr., and each of
them (with full power to each of them to act alone), his true and
lawful agents and attorneys-in-fact, for him and on his behalf and
in his name, place and stead, in any and all capacities, to sign,
execute, acknowledge, deliver, and file (a) with the Securities and
Exchange Commission (or any other governmental or regulatory
authority), a Registration Statement on Form S-4 (or other
appropriate form) and any and all amendments (including post-
effective amendments) thereto, with any and all exhibits and any
and all other documents required to be filed with respect thereto
or in connection therewith, relating to the registration under the
Securities Act of 1933 of Common Stock of the Corporation to be
issued in the merger between the Corporation and Commercial
Bancshares, Inc. ("Commercial") wherein the Corporation agrees to
exchange shares of its common stock for all of the outstanding
shares of common stock of Commercial and merge Commercial into the
Corporation, authorized by resolutions adopted by the Board of
Directors on September 28, 1993, and (b) with the securities
agencies or officials of various jurisdictions, all applications,
qualifications, registrations or exemptions relating to such
offering under the laws of any such jurisdiction, including any
amendments thereto or other documents required to be filed with
respect thereto or in connection therewith, granting unto said
agents and attorneys, and each of them, full power and authority to
do and perform each and every act and thing requisite and necessary
to be done in and about the premises in order to effectuate the
same as fully to all intents and purposes as the undersigned might
or could do if personally present, and the undersigned hereby
ratifies and confirms all that said agents and attorneys-in-fact,
or any of them may lawfully do or cause to be done by virtue
hereof.
IN WITNESS WHEREOF, the undersigned has hereunto set his hand
on this 26th day of October, 1993.
S/J. TERRELL BROWN
J. Terrell Brown
Director
HIBERNIA CORPORATION
P0WER OF ATTORNEY
KNOW ALL MEN BY THESE PRESENTS, that the undersigned director
of Hibernia Corporation, a Louisiana corporation (the
"Corporation"), does hereby name, constitute and appoint Robert W.
Close, Patricia C. Meringer and Ron E. Samford, Jr., and each of
them (with full power to each of them to act alone), his true and
lawful agents and attorneys-in-fact, for him and on his behalf and
in his name, place and stead, in any and all capacities, to sign,
execute, acknowledge, deliver, and file (a) with the Securities and
Exchange Commission (or any other governmental or regulatory
authority), a Registration Statement on Form S-4 (or other
appropriate form) and any and all amendments (including post-
effective amendments) thereto, with any and all exhibits and any
and all other documents required to be filed with respect thereto
or in connection therewith, relating to the registration under the
Securities Act of 1933 of Common Stock of the Corporation to be
issued in the merger between the Corporation and Commercial
Bancshares, Inc. ("Commercial") wherein the Corporation agrees to
exchange shares of its common stock for all of the outstanding
shares of common stock of Commercial and merge Commercial into the
Corporation, authorized by resolutions adopted by the Board of
Directors on September 28, 1993, and (b) with the securities
agencies or officials of various jurisdictions, all applications,
qualifications, registrations or exemptions relating to such
offering under the laws of any such jurisdiction, including any
amendments thereto or other documents required to be filed with
respect thereto or in connection therewith, granting unto said
agents and attorneys, and each of them, full power and authority to
do and perform each and every act and thing requisite and necessary
to be done in and about the premises in order to effectuate the
same as fully to all intents and purposes as the undersigned might
or could do if personally present, and the undersigned hereby
ratifies and confirms all that said agents and attorneys-in-fact,
or any of them may lawfully do or cause to be done by virtue
hereof.
IN WITNESS WHEREOF, the undersigned has hereunto set his hand
on this 26th day of October, 1993.
S/BROOKE H. DUNCAN
Brooke H. Duncan
Director
HIBERNIA CORPORATION
P0WER OF ATTORNEY
KNOW ALL MEN BY THESE PRESENTS, that the undersigned director
of Hibernia Corporation, a Louisiana corporation (the
"Corporation"), does hereby name, constitute and appoint Robert W.
Close, Patricia C. Meringer and Ron E. Samford, Jr., and each of
them (with full power to each of them to act alone), his true and
lawful agents and attorneys-in-fact, for him and on his behalf and
in his name, place and stead, in any and all capacities, to sign,
execute, acknowledge, deliver, and file (a) with the Securities and
Exchange Commission (or any other governmental or regulatory
authority), a Registration Statement on Form S-4 (or other
appropriate form) and any and all amendments (including post-
effective amendments) thereto, with any and all exhibits and any
and all other documents required to be filed with respect thereto
or in connection therewith, relating to the registration under the
Securities Act of 1933 of Common Stock of the Corporation to be
issued in the merger between the Corporation and Commercial
Bancshares, Inc. ("Commercial") wherein the Corporation agrees to
exchange shares of its common stock for all of the outstanding
shares of common stock of Commercial and merge Commercial into the
Corporation, authorized by resolutions adopted by the Board of
Directors on September 28, 1993, and (b) with the securities
agencies or officials of various jurisdictions, all applications,
qualifications, registrations or exemptions relating to such
offering under the laws of any such jurisdiction, including any
amendments thereto or other documents required to be filed with
respect thereto or in connection therewith, granting unto said
agents and attorneys, and each of them, full power and authority to
do and perform each and every act and thing requisite and necessary
to be done in and about the premises in order to effectuate the
same as fully to all intents and purposes as the undersigned might
or could do if personally present, and the undersigned hereby
ratifies and confirms all that said agents and attorneys-in-fact,
or any of them may lawfully do or cause to be done by virtue
hereof.
IN WITNESS WHEREOF, the undersigned has hereunto set his hand
on this 26th day of October, 1993.
S/RICHARD W. FREEMAN, JR.
Richard W. Freeman, Jr.
Director
HIBERNIA CORPORATION
P0WER OF ATTORNEY
KNOW ALL MEN BY THESE PRESENTS, that the undersigned director
of Hibernia Corporation, a Louisiana corporation (the
"Corporation"), does hereby name, constitute and appoint Robert W.
Close, Patricia C. Meringer and Ron E. Samford, Jr., and each of
them (with full power to each of them to act alone), his true and
lawful agents and attorneys-in-fact, for him and on his behalf and
in his name, place and stead, in any and all capacities, to sign,
execute, acknowledge, deliver, and file (a) with the Securities and
Exchange Commission (or any other governmental or regulatory
authority), a Registration Statement on Form S-4 (or other
appropriate form) and any and all amendments (including post-
effective amendments) thereto, with any and all exhibits and any
and all other documents required to be filed with respect thereto
or in connection therewith, relating to the registration under the
Securities Act of 1933 of Common Stock of the Corporation to be
issued in the merger between the Corporation and Commercial
Bancshares, Inc. ("Commercial") wherein the Corporation agrees to
exchange shares of its common stock for all of the outstanding
shares of common stock of Commercial and merge Commercial into the
Corporation, authorized by resolutions adopted by the Board of
Directors on September 28, 1993, and (b) with the securities
agencies or officials of various jurisdictions, all applications,
qualifications, registrations or exemptions relating to such
offering under the laws of any such jurisdiction, including any
amendments thereto or other documents required to be filed with
respect thereto or in connection therewith, granting unto said
agents and attorneys, and each of them, full power and authority to
do and perform each and every act and thing requisite and necessary
to be done in and about the premises in order to effectuate the
same as fully to all intents and purposes as the undersigned might
or could do if personally present, and the undersigned hereby
ratifies and confirms all that said agents and attorneys-in-fact,
or any of them may lawfully do or cause to be done by virtue
hereof.
IN WITNESS WHEREOF, the undersigned has hereunto set his hand
on this 26th day of October, 1993.
S/ROBERT L. GOODWIN
Robert L. Goodwin
Director
HIBERNIA CORPORATION
P0WER OF ATTORNEY
KNOW ALL MEN BY THESE PRESENTS, that the undersigned
President, Chief Executive Officer and director of Hibernia
Corporation, a Louisiana corporation (the "Corporation"), does
hereby name, constitute and appoint Robert W. Close, Patricia C.
Meringer and Ron E. Samford, Jr., and each of them (with full power
to each of them to act alone), his true and lawful agents and
attorneys-in-fact, for him and on his behalf and in his name, place
and stead, in any and all capacities, to sign, execute,
acknowledge, deliver, and file (a) with the Securities and Exchange
Commission (or any other governmental or regulatory authority), a
Registration Statement on Form S-4 (or other appropriate form) and
any and all amendments (including post-effective amendments)
thereto, with any and all exhibits and any and all other documents
required to be filed with respect thereto or in connection
therewith, relating to the registration under the Securities Act of
1933 of Common Stock of the Corporation to be issued in the merger
between the Corporation and Commercial Bancshares, Inc.
("Commercial") wherein the Corporation agrees to exchange shares of
its common stock for all of the outstanding shares of common stock
of Commercial and merge Commercial into the Corporation, authorized
by resolutions adopted by the Board of Directors on September 28,
1993, and (b) with the securities agencies or officials of various
jurisdictions, all applications, qualifications, registrations or
exemptions relating to such offering under the laws of any such
jurisdiction, including any amendments thereto or other documents
required to be filed with respect thereto or in connection
therewith, granting unto said agents and attorneys, and each of
them, full power and authority to do and perform each and every act
and thing requisite and necessary to be done in and about the
premises in order to effectuate the same as fully to all intents
and purposes as the undersigned might or could do if personally
present, and the undersigned hereby ratifies and confirms all that
said agents and attorneys-in-fact, or any of them may lawfully do
or cause to be done by virtue hereof.
IN WITNESS WHEREOF, the undersigned has hereunto set his hand
on this 26th day of October, 1993.
s/STEPHEN A. HANSEL
Stephen A. Hansel
President, Chief
Executive Officer
and Director
HIBERNIA CORPORATION
P0WER OF ATTORNEY
KNOW ALL MEN BY THESE PRESENTS, that the undersigned director
of Hibernia Corporation, a Louisiana corporation (the
"Corporation"), does hereby name, constitute and appoint Robert W.
Close, Patricia C. Meringer and Ron E. Samford, Jr., and each of
them (with full power to each of them to act alone), his true and
lawful agents and attorneys-in-fact, for him and on his behalf and
in his name, place and stead, in any and all capacities, to sign,
execute, acknowledge, deliver, and file (a) with the Securities and
Exchange Commission (or any other governmental or regulatory
authority), a Registration Statement on Form S-4 (or other
appropriate form) and any and all amendments (including post-
effective amendments) thereto, with any and all exhibits and any
and all other documents required to be filed with respect thereto
or in connection therewith, relating to the registration under the
Securities Act of 1933 of Common Stock of the Corporation to be
issued in the merger between the Corporation and Commercial
Bancshares, Inc. ("Commercial") wherein the Corporation agrees to
exchange shares of its common stock for all of the outstanding
shares of common stock of Commercial and merge Commercial into the
Corporation, authorized by resolutions adopted by the Board of
Directors on September 28, 1993, and (b) with the securities
agencies or officials of various jurisdictions, all applications,
qualifications, registrations or exemptions relating to such
offering under the laws of any such jurisdiction, including any
amendments thereto or other documents required to be filed with
respect thereto or in connection therewith, granting unto said
agents and attorneys, and each of them, full power and authority to
do and perform each and every act and thing requisite and necessary
to be done in and about the premises in order to effectuate the
same as fully to all intents and purposes as the undersigned might
or could do if personally present, and the undersigned hereby
ratifies and confirms all that said agents and attorneys-in-fact,
or any of them may lawfully do or cause to be done by virtue
hereof.
IN WITNESS WHEREOF, the undersigned has hereunto set his hand
on this 26th day of October, 1993.
s/DICK H. HEARIN
Dick H. Hearin
Director
HIBERNIA CORPORATION
P0WER OF ATTORNEY
KNOW ALL MEN BY THESE PRESENTS, that the undersigned director
of Hibernia Corporation, a Louisiana corporation (the
"Corporation"), does hereby name, constitute and appoint Robert W.
Close, Patricia C. Meringer and Ron E. Samford, Jr., and each of
them (with full power to each of them to act alone), his true and
lawful agents and attorneys-in-fact, for him and on his behalf and
in his name, place and stead, in any and all capacities, to sign,
execute, acknowledge, deliver, and file (a) with the Securities and
Exchange Commission (or any other governmental or regulatory
authority), a Registration Statement on Form S-4 (or other
appropriate form) and any and all amendments (including post-
effective amendments) thereto, with any and all exhibits and any
and all other documents required to be filed with respect thereto
or in connection therewith, relating to the registration under the
Securities Act of 1933 of Common Stock of the Corporation to be
issued in the merger between the Corporation and Commercial
Bancshares, Inc. ("Commercial") wherein the Corporation agrees to
exchange shares of its common stock for all of the outstanding
shares of common stock of Commercial and merge Commercial into the
Corporation, authorized by resolutions adopted by the Board of
Directors on September 28, 1993, and (b) with the securities
agencies or officials of various jurisdictions, all applications,
qualifications, registrations or exemptions relating to such
offering under the laws of any such jurisdiction, including any
amendments thereto or other documents required to be filed with
respect thereto or in connection therewith, granting unto said
agents and attorneys, and each of them, full power and authority to
do and perform each and every act and thing requisite and necessary
to be done in and about the premises in order to effectuate the
same as fully to all intents and purposes as the undersigned might
or could do if personally present, and the undersigned hereby
ratifies and confirms all that said agents and attorneys-in-fact,
or any of them may lawfully do or cause to be done by virtue
hereof.
IN WITNESS WHEREOF, the undersigned has hereunto set his hand
on this 26th day of October, 1993.
s/ROBERT T. HOLLEMAN
Robert T. Holleman
Director
HIBERNIA CORPORATION
P0WER OF ATTORNEY
KNOW ALL MEN BY THESE PRESENTS, that the undersigned director
of Hibernia Corporation, a Louisiana corporation (the
"Corporation"), does hereby name, constitute and appoint Robert W.
Close, Patricia C. Meringer and Ron E. Samford, Jr., and each of
them (with full power to each of them to act alone), his true and
lawful agents and attorneys-in-fact, for him and on his behalf and
in his name, place and stead, in any and all capacities, to sign,
execute, acknowledge, deliver, and file (a) with the Securities and
Exchange Commission (or any other governmental or regulatory
authority), a Registration Statement on Form S-4 (or other
appropriate form) and any and all amendments (including post-
effective amendments) thereto, with any and all exhibits and any
and all other documents required to be filed with respect thereto
or in connection therewith, relating to the registration under the
Securities Act of 1933 of Common Stock of the Corporation to be
issued in the merger between the Corporation and Commercial
Bancshares, Inc. ("Commercial") wherein the Corporation agrees to
exchange shares of its common stock for all of the outstanding
shares of common stock of Commercial and merge Commercial into the
Corporation, authorized by resolutions adopted by the Board of
Directors on September 28, 1993, and (b) with the securities
agencies or officials of various jurisdictions, all applications,
qualifications, registrations or exemptions relating to such
offering under the laws of any such jurisdiction, including any
amendments thereto or other documents required to be filed with
respect thereto or in connection therewith, granting unto said
agents and attorneys, and each of them, full power and authority to
do and perform each and every act and thing requisite and necessary
to be done in and about the premises in order to effectuate the
same as fully to all intents and purposes as the undersigned might
or could do if personally present, and the undersigned hereby
ratifies and confirms all that said agents and attorneys-in-fact,
or any of them may lawfully do or cause to be done by virtue
hereof.
IN WITNESS WHEREOF, the undersigned has hereunto set his hand
on this 26th day of October, 1993.
s/HUGH J. KELLY
Hugh J. Kelly
Director
HIBERNIA CORPORATION
P0WER OF ATTORNEY
KNOW ALL MEN BY THESE PRESENTS, that the undersigned director
of Hibernia Corporation, a Louisiana corporation (the
"Corporation"), does hereby name, constitute and appoint Robert W.
Close, Patricia C. Meringer and Ron E. Samford, Jr., and each of
them (with full power to each of them to act alone), his true and
lawful agents and attorneys-in-fact, for him and on his behalf and
in his name, place and stead, in any and all capacities, to sign,
execute, acknowledge, deliver, and file (a) with the Securities and
Exchange Commission (or any other governmental or regulatory
authority), a Registration Statement on Form S-4 (or other
appropriate form) and any and all amendments (including post-
effective amendments) thereto, with any and all exhibits and any
and all other documents required to be filed with respect thereto
or in connection therewith, relating to the registration under the
Securities Act of 1933 of Common Stock of the Corporation to be
issued in the merger between the Corporation and Commercial
Bancshares, Inc. ("Commercial") wherein the Corporation agrees to
exchange shares of its common stock for all of the outstanding
shares of common stock of Commercial and merge Commercial into the
Corporation, authorized by resolutions adopted by the Board of
Directors on September 28, 1993, and (b) with the securities
agencies or officials of various jurisdictions, all applications,
qualifications, registrations or exemptions relating to such
offering under the laws of any such jurisdiction, including any
amendments thereto or other documents required to be filed with
respect thereto or in connection therewith, granting unto said
agents and attorneys, and each of them, full power and authority to
do and perform each and every act and thing requisite and necessary
to be done in and about the premises in order to effectuate the
same as fully to all intents and purposes as the undersigned might
or could do if personally present, and the undersigned hereby
ratifies and confirms all that said agents and attorneys-in-fact,
or any of them may lawfully do or cause to be done by virtue
hereof.
IN WITNESS WHEREOF, the undersigned has hereunto set his hand
on this 26th day of October, 1993.
s/JOHN P. LABORDE
John P. Laborde
Director
HIBERNIA CORPORATION
P0WER OF ATTORNEY
KNOW ALL MEN BY THESE PRESENTS, that the undersigned director
of Hibernia Corporation, a Louisiana corporation (the
"Corporation"), does hereby name, constitute and appoint Robert W.
Close, Patricia C. Meringer and Ron E. Samford, Jr., and each of
them (with full power to each of them to act alone), his true and
lawful agents and attorneys-in-fact, for him and on his behalf and
in his name, place and stead, in any and all capacities, to sign,
execute, acknowledge, deliver, and file (a) with the Securities and
Exchange Commission (or any other governmental or regulatory
authority), a Registration Statement on Form S-4 (or other
appropriate form) and any and all amendments (including post-
effective amendments) thereto, with any and all exhibits and any
and all other documents required to be filed with respect thereto
or in connection therewith, relating to the registration under the
Securities Act of 1933 of Common Stock of the Corporation to be
issued in the merger between the Corporation and Commercial
Bancshares, Inc. ("Commercial") wherein the Corporation agrees to
exchange shares of its common stock for all of the outstanding
shares of common stock of Commercial and merge Commercial into the
Corporation, authorized by resolutions adopted by the Board of
Directors on September 28, 1993, and (b) with the securities
agencies or officials of various jurisdictions, all applications,
qualifications, registrations or exemptions relating to such
offering under the laws of any such jurisdiction, including any
amendments thereto or other documents required to be filed with
respect thereto or in connection therewith, granting unto said
agents and attorneys, and each of them, full power and authority to
do and perform each and every act and thing requisite and necessary
to be done in and about the premises in order to effectuate the
same as fully to all intents and purposes as the undersigned might
or could do if personally present, and the undersigned hereby
ratifies and confirms all that said agents and attorneys-in-fact,
or any of them may lawfully do or cause to be done by virtue
hereof.
IN WITNESS WHEREOF, the undersigned has hereunto set his hand
on this 26th day of October, 1993.
s/SIDNEY W. LASSEN
Sidney W. Lassen
Director
HIBERNIA CORPORATION
P0WER OF ATTORNEY
KNOW ALL MEN BY THESE PRESENTS, that the undersigned Vice
Chairman and director of Hibernia Corporation, a Louisiana
corporation (the "Corporation"), does hereby name, constitute and
appoint Robert W. Close, Patricia C. Meringer and Ron E. Samford,
Jr., and each of them (with full power to each of them to act
alone), his true and lawful agents and attorneys-in-fact, for him
and on his behalf and in his name, place and stead, in any and all
capacities, to sign, execute, acknowledge, deliver, and file (a)
with the Securities and Exchange Commission (or any other
governmental or regulatory authority), a Registration Statement on
Form S-4 (or other appropriate form) and any and all amendments
(including post-effective amendments) thereto, with any and all
exhibits and any and all other documents required to be filed with
respect thereto or in connection therewith, relating to the
registration under the Securities Act of 1933 of Common Stock of
the Corporation to be issued in the merger between the Corporation
and Commercial Bancshares, Inc. ("Commercial") wherein the
Corporation agrees to exchange shares of its common stock for all
of the outstanding shares of common stock of Commercial and merge
Commercial into the Corporation, authorized by resolutions adopted
by the Board of Directors on September 28, 1993, and (b) with the
securities agencies or officials of various jurisdictions, all
applications, qualifications, registrations or exemptions relating
to such offering under the laws of any such jurisdiction, including
any amendments thereto or other documents required to be filed with
respect thereto or in connection therewith, granting unto said
agents and attorneys, and each of them, full power and authority to
do and perform each and every act and thing requisite and necessary
to be done in and about the premises in order to effectuate the
same as fully to all intents and purposes as the undersigned might
or could do if personally present, and the undersigned hereby
ratifies and confirms all that said agents and attorneys-in-fact,
or any of them may lawfully do or cause to be done by virtue
hereof.
IN WITNESS WHEREOF, the undersigned has hereunto set his hand
on this 26th day of October, 1993.
s/DONALD J. NALTY
Donald J. Nalty
Vice Chairman and
Director
HIBERNIA CORPORATION
P0WER OF ATTORNEY
KNOW ALL MEN BY THESE PRESENTS, that the undersigned director
of Hibernia Corporation, a Louisiana corporation (the
"Corporation"), does hereby name, constitute and appoint Robert W.
Close, Patricia C. Meringer and Ron E. Samford, Jr., and each of
them (with full power to each of them to act alone), his true and
lawful agents and attorneys-in-fact, for him and on his behalf and
in his name, place and stead, in any and all capacities, to sign,
execute, acknowledge, deliver, and file (a) with the Securities and
Exchange Commission (or any other governmental or regulatory
authority), a Registration Statement on Form S-4 (or other
appropriate form) and any and all amendments (including post-
effective amendments) thereto, with any and all exhibits and any
and all other documents required to be filed with respect thereto
or in connection therewith, relating to the registration under the
Securities Act of 1933 of Common Stock of the Corporation to be
issued in the merger between the Corporation and Commercial
Bancshares, Inc. ("Commercial") wherein the Corporation agrees to
exchange shares of its common stock for all of the outstanding
shares of common stock of Commercial and merge Commercial into the
Corporation, authorized by resolutions adopted by the Board of
Directors on September 28, 1993, and (b) with the securities
agencies or officials of various jurisdictions, all applications,
qualifications, registrations or exemptions relating to such
offering under the laws of any such jurisdiction, including any
amendments thereto or other documents required to be filed with
respect thereto or in connection therewith, granting unto said
agents and attorneys, and each of them, full power and authority to
do and perform each and every act and thing requisite and necessary
to be done in and about the premises in order to effectuate the
same as fully to all intents and purposes as the undersigned might
or could do if personally present, and the undersigned hereby
ratifies and confirms all that said agents and attorneys-in-fact,
or any of them may lawfully do or cause to be done by virtue
hereof.
IN WITNESS WHEREOF, the undersigned has hereunto set his hand
on this 26th day of October, 1993.
s/JOE D. SMITH, JR.
Joe D. Smith, Jr.
Director
HIBERNIA CORPORATION
P0WER OF ATTORNEY
KNOW ALL MEN BY THESE PRESENTS, that the undersigned director
of Hibernia Corporation, a Louisiana corporation (the
"Corporation"), does hereby name, constitute and appoint Robert W.
Close, Patricia C. Meringer and Ron E. Samford, Jr., and each of
them (with full power to each of them to act alone), his true and
lawful agents and attorneys-in-fact, for him and on his behalf and
in his name, place and stead, in any and all capacities, to sign,
execute, acknowledge, deliver, and file (a) with the Securities and
Exchange Commission (or any other governmental or regulatory
authority), a Registration Statement on Form S-4 (or other
appropriate form) and any and all amendments (including post-
effective amendments) thereto, with any and all exhibits and any
and all other documents required to be filed with respect thereto
or in connection therewith, relating to the registration under the
Securities Act of 1933 of Common Stock of the Corporation to be
issued in the merger between the Corporation and Commercial
Bancshares, Inc. ("Commercial") wherein the Corporation agrees to
exchange shares of its common stock for all of the outstanding
shares of common stock of Commercial and merge Commercial into the
Corporation, authorized by resolutions adopted by the Board of
Directors on September 28, 1993, and (b) with the securities
agencies or officials of various jurisdictions, all applications,
qualifications, registrations or exemptions relating to such
offering under the laws of any such jurisdiction, including any
amendments thereto or other documents required to be filed with
respect thereto or in connection therewith, granting unto said
agents and attorneys, and each of them, full power and authority to
do and perform each and every act and thing requisite and necessary
to be done in and about the premises in order to effectuate the
same as fully to all intents and purposes as the undersigned might
or could do if personally present, and the undersigned hereby
ratifies and confirms all that said agents and attorneys-in-fact,
or any of them may lawfully do or cause to be done by virtue
hereof.
IN WITNESS WHEREOF, the undersigned has hereunto set his hand
on this 26th day of October, 1993.
s/JAMES H. STONE
James H. Stone
Director
HIBERNIA CORPORATION
P0WER OF ATTORNEY
KNOW ALL MEN BY THESE PRESENTS, that the undersigned director
of Hibernia Corporation, a Louisiana corporation (the
"Corporation"), does hereby name, constitute and appoint Robert W.
Close, Patricia C. Meringer and Ron E. Samford, Jr., and each of
them (with full power to each of them to act alone), his true and
lawful agents and attorneys-in-fact, for him and on his behalf and
in his name, place and stead, in any and all capacities, to sign,
execute, acknowledge, deliver, and file (a) with the Securities and
Exchange Commission (or any other governmental or regulatory
authority), a Registration Statement on Form S-4 (or other
appropriate form) and any and all amendments (including post-
effective amendments) thereto, with any and all exhibits and any
and all other documents required to be filed with respect thereto
or in connection therewith, relating to the registration under the
Securities Act of 1933 of Common Stock of the Corporation to be
issued in the merger between the Corporation and Commercial
Bancshares, Inc. ("Commercial") wherein the Corporation agrees to
exchange shares of its common stock for all of the outstanding
shares of common stock of Commercial and merge Commercial into the
Corporation, authorized by resolutions adopted by the Board of
Directors on September 28, 1993, and (b) with the securities
agencies or officials of various jurisdictions, all applications,
qualifications, registrations or exemptions relating to such
offering under the laws of any such jurisdiction, including any
amendments thereto or other documents required to be filed with
respect thereto or in connection therewith, granting unto said
agents and attorneys, and each of them, full power and authority to
do and perform each and every act and thing requisite and necessary
to be done in and about the premises in order to effectuate the
same as fully to all intents and purposes as the undersigned might
or could do if personally present, and the undersigned hereby
ratifies and confirms all that said agents and attorneys-in-fact,
or any of them may lawfully do or cause to be done by virtue
hereof.
IN WITNESS WHEREOF, the undersigned has hereunto set his hand
on this 26th day of October, 1993.
s/ERNEST L. WILLIAMSON
Ernest L. Williamson
Director
HIBERNIA CORPORATION
P0WER OF ATTORNEY
KNOW ALL MEN BY THESE PRESENTS, that the undersigned director
of Hibernia Corporation, a Louisiana corporation (the
"Corporation"), does hereby name, constitute and appoint Robert W.
Close, Patricia C. Meringer and Ron E. Samford, Jr., and each of
them (with full power to each of them to act alone), his true and
lawful agents and attorneys-in-fact, for him and on his behalf and
in his name, place and stead, in any and all capacities, to sign,
execute, acknowledge, deliver, and file (a) with the Securities and
Exchange Commission (or any other governmental or regulatory
authority), a Registration Statement on Form S-4 (or other
appropriate form) and any and all amendments (including post-
effective amendments) thereto, with any and all exhibits and any
and all other documents required to be filed with respect thereto
or in connection therewith, relating to the registration under the
Securities Act of 1933 of Common Stock of the Corporation to be
issued in the merger between the Corporation and Commercial
Bancshares, Inc. ("Commercial") wherein the Corporation agrees to
exchange shares of its common stock for all of the outstanding
shares of common stock of Commercial and merge Commercial into the
Corporation, authorized by resolutions adopted by the Board of
Directors on September 28, 1993, and (b) with the securities
agencies or officials of various jurisdictions, all applications,
qualifications, registrations or exemptions relating to such
offering under the laws of any such jurisdiction, including any
amendments thereto or other documents required to be filed with
respect thereto or in connection therewith, granting unto said
agents and attorneys, and each of them, full power and authority to
do and perform each and every act and thing requisite and necessary
to be done in and about the premises in order to effectuate the
same as fully to all intents and purposes as the undersigned might
or could do if personally present, and the undersigned hereby
ratifies and confirms all that said agents and attorneys-in-fact,
or any of them may lawfully do or cause to be done by virtue
hereof.
IN WITNESS WHEREOF, the undersigned has hereunto set his hand
on this 26th day of October, 1993.
s/ROBERT E. ZETZMANN
Robert E. Zetzmann
Director
HIBERNIA CORPORATION
</TABLE>
