As Filed with the Securities and Exchange Commission on June 20,
1994
REGISTRATION NO. 33-52249
SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
_____________________________
AMENDMENT NO. 3 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 (Primary Standard (I.R.S. Employer
Jurisdiction of Industrial Identification
Incorporation or Classification Number)
Organization)
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
Martin D. Werner, Esq.
Werner & Blank Co., LPA
7205 W. Central Avenue
Toledo, Ohio 43617
(419) 841-8051
____________________________
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 to be Proposed Proposed Amount of
class of Registered Maximum Maximum Registration
securities to Offering Aggregate Fee
be registered Price per Offering
Share Price
_________________________________________________________________
Class A
Common Stock,
no par value 4,800,000 $7.50 $36,000,000 $12,413
shares
_________________________________________________________________
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 $36,000,000 and the average of the
high and low sales prices of a share of the Registrant's Class
A Common Stock, no par value per share, on February 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;
Information Certain Regulatory
Considerations
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;
Counsel Experts; Relationship
with Independent
Auditors
9. Disclosure of Commission Position
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
<PAGE>
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 or Certain Information
S-3 Companies Concerning First Bancorp
18. Information if Proxies, Introduction; Summary;
Consents or Authorizations Meeting Information;
are to be Solicited Proposed Merger; Certain
Information Concerning
First Bancorp;
Relationship with
Independent Auditors
19. Information if Proxies, Not Applicable
Consent, Authorizations are not
to be Solicited or in an Exchange
Offer
NOTICE OF SPECIAL MEETING OF SHAREHOLDERS
OF
FIRST BANCORP OF LOUISIANA, INC.
July __, 1994
NOTICE IS HEREBY GIVEN that, pursuant to the call of the
directors of First Bancorp of Louisiana, Inc. ("First Bancorp"), a
Special Meeting of the shareholders of First Bancorp will be held
at the main office of First National Bank of West Monroe, 500
Natchitoches Street, West Monroe, Louisiana 71294-0487, on July 14,
1994, at 5:00 p.m., for the purpose of considering and voting upon
the following matters:
1. A proposal to approve a Merger of First Bancorp with and
into Hibernia Corporation ("Hibernia") (the "Merger"),
and the related Agreement and Plan of Merger between
First Bancorp and Hibernia dated as of November 4, 1993
(the "Agreement"), a copy of which is attached as
Appendix A to the accompanying Proxy Statement-Prospectus
and incorporated herein by this reference, and which
Agreement also provides for the merger of First National
Bank of West Monroe ("FNB") and Southern National Bank of
Tallulah ("SNB") (collectively, the "Banks"),
subsidiaries of First Bancorp, with and into Hibernia
National Bank ("HNB") (the "Bank Merger").
2. 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 June
__, 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 $5.00 per share, of
First Bancorp (the "First Bancorp Common Stock") will entitle the
holder thereof to one vote on all matters that come before the
Special Meeting. Approval of the Merger will require the
affirmative vote of a majority of the voting power of First Bancorp
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 First Bancorp's total voting power.
By Order of the Board of Directors,
Patrick L. Spencer
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.
FIRST BANCORP OF LOUISIANA, INC.
PROXY
This Proxy is Solicited on Behalf of
The Board of Directors of First Bancorp of Louisiana, Inc.
The undersigned shareholder of First Bancorp of Louisiana,
Inc., a Louisiana corporation, hereby appoints Dave Norris and Ike
Hamilton, 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 Common Stock of First Bancorp of
Louisiana, Inc. ("First Bancorp") the undersigned would be entitled
to vote if personally present at the Special Meeting of
Shareholders of First Bancorp, which will be held at the office of
First National Bank of West Monroe, 500 Natchitoches Street,
Monroe, Louisiana 71294-0487 on July 14, 1994, at 5:00 p.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 RECOMMENDATION OF THE BOARD OF DIRECTORS OF
FIRST BANCORP.
The Board of Directors of First Bancorp recommends that you
vote FOR approval of the Merger of First Bancorp with and into
Hibernia Corporation.
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/
/___/
_____________________ ____________________
Account Number Common Stock
Item 1 Approval of Merger of First Bancorp with and into
Hibernia Corporation
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
FIRST BANCORP OF LOUISIANA, INC.
SPECIAL MEETING OF SHAREHOLDERS
To Be Held on July 14, 1994
PROSPECTUS
HIBERNIA CORPORATION
4,800,000 SHARES OF
CLASS A COMMON STOCK
(NO PAR VALUE)
This Proxy Statement-Prospectus is being furnished to the
holders of common stock, par value $5.00 per share (the "First
Bancorp Common Stock"), of First Bancorp of Louisiana, Inc. ("First
Bancorp") in connection with the solicitation of proxies by the
Board of Directors of First Bancorp for use at a special meeting of
shareholders (the "Special Meeting") to be held at 5:00 p.m., local
time, on July 14, 1994, at the office of First National Bank of
West Monroe, 500 Natchitoches Street, West Monroe, Louisiana 71294-
0487, and at any adjournments or postponements thereof.
At the Special Meeting, the holders of record of First
Bancorp Common Stock as of the close of business on June 14, 1994
(the "Record Date") will consider and vote upon a proposal to
approve the merger of First Bancorp with and into Hibernia (the
"Merger"), and the related Agreement and Plan of Merger dated
November 4, 1993 (the "Agreement") between First Bancorp and
Hibernia pursuant to which, immediately following the merger of
First Bancorp into Hibernia, First National Bank of West Monroe
("FNB") and Southern National Bank of Tallulah ("SNB")
(collectively, the "Banks") will also merge with and into Hibernia
National Bank ("HNB") (the "Bank Merger"). Upon consummation of
the Merger, each outstanding share of First Bancorp Common Stock,
except for shares owned beneficially by Hibernia and its
subsidiaries and shares as to which dissenters 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 A 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. See "PROPOSED MERGER -- Terms of the Merger."
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 June __, 1994 was
$______ per share.
This Proxy Statement-Prospectus and the accompanying
proxy card are first being mailed to shareholders of First Bancorp
on or about July __, 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 July __, 1994.
TABLE OF CONTENTS
Page
INTRODUCTION . . . . . . . . . . . . . . . . . . . . .
AVAILABLE INFORMATION. . . . . . . . . . . . . . . . .
INCORPORATION OF CERTAIN DOCUMENTS BY REFERENCE. . . .
THE PARTIES TO THE MERGER. . . . . . . . . . . . . . .
SUMMARY. . . . . . . . . . . . . . . . . . . . . . . .
MEETING INFORMATION. . . . . . . . . . . . . . . . . .
Date, Place and Time . . . . . . . . . . . . . .
Record Date; Voting Rights . . . . . . . . . . .
Voting and Revocation of Proxies. . . . . . . . .
Solicitation of Proxies . . . . . . . . . . . . .
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 . .
Material Tax Consequences . . . . . . . . . . . .
Resale of Hibernia Common Stock . . . . . . . . .
Rights of Dissenting Shareholders . . . . . . . .
Dividend Reinvestment Plan. . . . . . . . . . . .
Accounting Treatment. . . . . . . . . . . . . . .
CERTAIN REGULATORY CONSIDERATIONS . . . . . . .. . . .
CERTAIN INFORMATION RELATING TO FIRST BANCORP. . . . .
Description of Business . . . . . . . . . . . . .
Ownership of First Bancorp Common Stock
and Dividends . . . . . . . . . . . . . . . . .
RELATIONSHIP WITH INDEPENDENT AUDITORS . . . . . . . .
VALIDITY OF SHARES . . . . . . . . . . . . . . . . . .
EXPERTS . . . . . . . . . . . . . . . . . . . . . . .
FIRST BANCORP CONSOLIDATED FINANCIAL INFORMATION . . .
APPENDIX A -- AGREEMENT AND PLAN OF MERGER
APPENDIX B -- OPINION OF AUSTIN ASSOCIATES, INC.
APPENDIX C -- SELECTED PROVISIONS OF LOUISIANA LAW RELATING
TO RIGHTS OF DISSENTING SHAREHOLDERS
APPENDIX D -- 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 First Bancorp of Louisiana, 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, $5.00 par value, of First
Bancorp (the "First Bancorp Common Stock").
Shareholders of First Bancorp will be asked to approve the
Merger at a Special Meeting to be held on July 14, 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 First Bancorp is attached hereto as Appendix A 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 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 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", (3) Quarterly Report on Form 10-Q for the
fiscal quarter ended March 31, 1994, and (4) 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 PARTIES TO THE MERGER
Hibernia. Hibernia is a Louisiana corporation registered
under the Bank Holding Company Act of 1956, as amended ("BHCA").
As of March 31, 1994, Hibernia had total consolidated assets of
approximately $5.0 billion and shareholders' equity of
approximately $432 million. As of March 31, 1994, 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 March 31, 1994 Hibernia had a single banking subsidiary,
Hibernia National Bank ("HNB"), that provides retail and commercial
banking services through 101 branches throughout Louisiana. As of
March 31, 1994, 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) 587-5532. 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 market price per share
of Hibernia Common Stock on November 3, 1993, the day prior to the
announcement of the proposed Merger was $7.375.
SELECTED FINANCIAL DATA
(Unaudited)
The following table sets forth certain historical consolidated
information for Hibernia Corporation. This information is based on
historical financial statements and related notes of Hibernia
Corporation incorporated by reference into this Proxy Statement -
Prospectus. Pro forma financial information giving effect to the
merger and other probable mergers is included in the "PRO FORMA
FINANCIAL INFORMATION".
<TABLE>
HIBERNIA CORPORATION
SELECTED FINANCIAL INFORMATION
<CAPTION>
3 Months Ended
Year Ended December 31 March 31
Unaudited ($ in thousands, except per share amounts) 1993 1992 1991 1990 1989 1994 1993
<S> <C> <C> <C> <C> <C> <C> <C>
Net interest income $195,705 $197,278 $234,599 $261,318 $214,530 $48,947 $50,393
Net income (loss) from continuing operations 47,950 (7,915) (143,997) (10,995) 61,644 17,136 10,283
Per share:
Net income (loss) from continuing operations 0.58 (0.27) (5.12) (0.40) 2.30 0.20 0.12
Cash dividends 0.03 - .15 .90 .91 0.04 -
Book value 5.12 4.48 7.05 13.16 14.45 5.16 4.60
SELECTED PERIOD-END BALANCES
Debt - 8,269 94,534 104,367 55,406 - 6,241
Total assets 4,795,583 4,734,038 6,018,429 7,357,850 6,698,851 5,019,183 4,664,363
</TABLE>
First Bancorp. First Bancorp is a Louisiana corporation
registered under the BHCA. As of March 31, 1994, First Bancorp had
total consolidated assets of $ 219 million and shareholders' equity
of $14.8 million. First Bancorp's banking subsidiaries are First
National Bank of West Monroe, a national banking association having
six (6) offices in Ouachita Parish in Louisiana, and Southern
National Bank at Tallulah, a national banking association having
one (1) office in Tallulah, Louisiana. The Banks engage in retail
and commercial banking services, including taking deposits and
extending secured and unsecured credit.
The principal offices of First Bancorp are located at 500
Natchitoches Street, West Monroe, Louisiana 71294-0487 and its
telephone number is (318) 387-8330. For additional information
concerning the business of First Bancorp and its financial
condition, see "CERTAIN INFORMATION CONCERNING FIRST BANCORP" and
"FIRST BANCORP CONSOLIDATED FINANCIAL INFORMATION."
SELECTED FINANCIAL DATA
(Unaudited)
The following table sets forth certain historical consolidated
information for First Bancorp of Louisiana, Inc. This information
is based on historical financial statements and related notes of
First Bancorp of Louisiana, Inc. contained elsewhere in this Proxy
Statement - Prospectus. Pro forma financial information giving
effect to the merger and other probable mergers is included in the
"PRO FORMA FINANCIAL INFORMATION".
<TABLE>
FIRST BANCORP OF LOUISIANA, INC.
SELECTED FINANCIAL INFORMATION
<CAPTION>
Year Ended December 31 3 Months Ended March 31,
Unaudited ($ in thousands, except per share amounts) 1993 1992 1991 1990 1989 1994 1993
<S> <C> <C> <C> <C> <C> <C> <C>
Net interest income $8,248 $7,067 $4,899 $4,005 $4,308 $2,243 $1,863
Net income from continuing operations 2,706 1,945 1,038 682 686 673 578
Per share:
Net income from continuing operations:
Primary 13.00 9.11 4.67 2.86 2.56 3.24 2.76
Fully diluted 11.58 8.15 4.18 2.66 2.42 2.89 2.46
Cash dividends 1.00 0.50 0.35 0.27 - - -
Book value 65.45 52.35 42.03 36.96 32.49 71.12 55.26
SELECTED PERIOD-END BALANCES
Debt 8,752 2,452 3,088 4,053 4,558 8,182 3,181
Total assets 225,082 156,556 150,592 128,995 121,900 219,428 152,001
</TABLE>
FIRST BANCORP OF LOUISIANA, INC.
QUARTERLY INCOME RESULTS
Unaudited ($ in thousands, except per share amounts)
[CAPTION]
<TABLE>
1994
I
<S> <C> <C> <C> <C>
Interest income $3,699
Net interest income 2,292
Net income 673
Net income per share:
Primary $3.24
Fully diluted $2.89
1993
I II III IV
Interest income $2,863 $2,877 $3,284 $3,968
Net interest income 1,863 1,857 2,058 2,470
Net income 578 604 741 783
Net income per share:
Primary $2.76 $2.89 $3.57 $3.78
Fully diluted $2.46 $2.57 $3.17 $3.38
1992
I II III IV
Interest income $3,054 $3,065 $3,000 $2,940
Net interest income 1,596 1,762 1,827 1,882
Net income 569 423 367 586
Net income per share:
Primary $2.60 $1.97 $1.75 $2.80
Fully diluted $2.24 $1.71 $1.70 $2.50
PRO FORMA COMBINED SELECTED FINANCIAL INFORMATION
(Unaudited)
The following table sets forth certain unaudited pro forma
combined financial information for Hibernia and First Bancorp.
This table is based on and should be read in conjunction with the
historical financial statements and related notes of Hibernia which
are incorporated herein by reference and of First Bancorp which are
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 Commercial
Bancshares, Inc., Bastrop National Bank 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 4,800,000 shares of Hibernia Common Stock for all the
outstanding shares of First Bancorp and 9,852,917 shares of
Hibernia Corporation common stock for all the outstanding shares of
Commercial Bancshares, Inc., Bastrop National Bank and First
Continental Bancshares, Inc. in each of the periods presented.<PAGE>
PRO FORMA COMBINED SELECTED FINANCIAL INFORMATION
(Unaudited)
The following table sets forth certain unaudited pro forma combined
financial information for Hibernia Corporation and First Bancorp of
Louisiana, 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 into this
Proxy Statement - Prospectus, and First Bancorp of Louisiana, 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 Commercial
Bancshares, Inc., Bastrop National Bank, First Continental
Bancshares, Inc. and Pioneer Bancshares Corporation. 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 4,800,000 shares of
Hibernia Corporation common stock for all the outstanding shares of
First Bancorp of Louisiana, Inc. and 18,154,258 shares of Hibernia
Corporation common stock for all the outstanding shares of
Commercial Bancshares, Inc., Bastrop National Bank, First
Continental Bancshares, Inc. and Pioneer Bancshares Corporation, in
each of the periods presented.
</TABLE>
<TABLE>
PRO FORMA HIBERNIA CORPORATION*
PRO FORMA COMBINED SELECTED FINANCIAL INFORMATION
<CAPTION>
Year Ended December 31 3 Months Ended March 31
Unaudited ($ in thousands, except per share amounts) 1993 1992 1991 1994 1993
<S> <C> <C> <C> <C> <C>
Net interest income $203,953 $204,345 $239,498 $51,190 $52,256
Net income (loss) from continuing operations 50,656 (5,970) (142,959) 17,809 10,861
Per share:
Net income (loss) from continuing operations 0.58 (0.17) (4.34) 0.20 0.12
Cash dividends 0.03 - 0.15 0.04 -
Book value 5.00 4.36 6.30 5.06 4.48
SELECTED PERIOD-END BALANCES
Debt 8,752 10,721 97,622 3,802 9,422
Total assets 5,020,665 4,890,594 6,169,021 5,235,002 4,816,364
* Includes Hibernia Corporation and First Bancorp of Louisiana, Inc.
</TABLE>
<TABLE>
TOTAL HIBERNIA CORPORATION**
PRO FORMA COMBINED SELECTED FINANCIAL INFORMATION
<CAPTION>
Year Ended December 33 Months Ended March 31
Unaudited ($ in thousands, except per share amounts) 1993 1992 1991 1994 1993
<S> <C> <C> <C> <C> <C>
Net interest income $250,746 $251,267 $277,629 $62,171 $63,588
Net income (loss) from continuing operations 59,081 448 (139,696) 20,418 12,910
Per share:
Net income (loss) from continuing operations 0.56 0.01 (2.74) 0.19 0.12
Cash dividends 0.03 - 0.15 0.04 -
Book value 4.84 4.21 4.90 4.77 4.35
SELECTED PERIOD-END BALANCES
Debt 30,194 32,587 134,809 3,802 31,446
Total assets 6,075,188 5,952,552 7,219,452 6,253,408 5,869,219
** Includes Hibernia Corporation, First Bancorp of Louisiana, Inc., Commercial Bancshares, Inc.,
Bastrop National Bank, First Continental Bancshares, Inc., and Pioneer Bancshares Corporation.
</TABLE>
COMPARATIVE PER SHARE INFORMATION
(Unaudited)
The following table sets forth for Hibernia Common Stock and
First Bancorp Common Stock certain historical, unaudited pro forma
combined and unaudited pro forma equivalent per shares financial
information. This table is based on and should be read in
conjunction with the historical financial statements and related
notes of Hibernia, incorporated by reference to this Proxy
Statement/Prospectus, and First Bancorp, 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 information 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 4,800,000 shares of Hibernia Common Stock for all the
outstanding shares of First Bancorp.
<TABLE>
HIBERNIA CORPORATION AND FIRST BANCORP OF LOUISIANA, INC.
COMPARATIVE PER SHARE INFORMATION
Unaudited
<CAPTION>
HISTORICAL PRO FORMA FIRST
HIBERNIA BANCORP OF
FIRST CORPORATION LOUISIANA, INC.
HIBERNIA BANCORP OF (WITH FIRST PRO FORMA
CORPORATIONLOUISIANA, INC. BANCORP) (1) EQUIVALENT (2)
Per Common Share:
<S> <C> <C> <C> <C>
Net income (loss) from continuing operations
For the three months ended March 31,
1994 $0.20 $2.89 (3) $0.20 $4.04
1993 0.12 2.46 (3) 0.12 2.42
For the year ended December 31,
1993 $0.58 $11.58 (3) $0.58 $11.72
1992 (0.27) 8.15 (3) (0.17) (3.43)
1991 (5.12) 4.18 (3) (4.34) (87.67)
Cash dividends
For the three months ended March 31,
1994 $0.04 - $0.04 $0.81
1993 - - - -
For the year ended December 31,
1993 $0.03 $1.00 $0.03 $0.61
1992 - 0.50 - -
1991 0.15 0.35 0.15 3.03
Book Value
For the three months ended March 31,
1994 $5.16 $71.12 $5.06 $102.21
For the year ended December 31,
1993 $5.12 $65.45 $5.03 $101.61
(1) Refer to "PRO FROMA FINANCIAL INFORMATION".
(2) Pro forma equivalent amounts are computed by multiplying the pro forma combined amount by the
First Bancorp exchange ratio of 20.20.
(3) Fully diluted.
</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 in addition to First Bancorp which are described in
documents incorporated herein by reference and described under "PRO
FORMA FINANCIAL INFORMATION" below. In addition, Hibernia is
pursuing other possible acquisition opportunities and intends to
continue to pursue such 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 First Bancorp 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
In accordance with the terms of the Agreement, First Bancorp
will be merged with and into Hibernia, whereupon the separate
existence of First Bancorp will cease. Immediately thereafter, the
Banks will be merged into HNB, with HNB as the surviving bank. On
the Effective Date, each outstanding share of First Bancorp Common
Stock, other than shares held by shareholders who exercise and
perfect dissenters' rights in accordance with Louisiana law, 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 ten business days preceding the last trading day
immediately prior to the closing of the Merger (the "Closing
Date"). The aggregate value of Hibernia Common Stock to be
exchanged for the outstanding First Bancorp Common Stock will be
$36 million, which may be increased if certain contingencies occur.
In particular, if the book value of First Bancorp is greater than
or equal to $14.6 million in each full month following March 31,
1994, the aggregate value of the Hibernia Common Stock to be
exchanged in the Merger will be increased by the lesser of (i) the
aggregate net after-tax income of First Bancorp for each full month
ended after March 31, 1994 and prior to the Closing Date, or (ii)
$250,000. Also, in the event Hibernia either sells all or
substantially all of its assets or merges with another entity in a
merger in which Hibernia is not the surviving entity prior to the
Closing Date, then the Average Market Price of the Hibernia Common
Stock for purposes of the Exchange Ratio will be the lesser of (i)
the average market price of Hibernia Common Stock for the ten
business days preceding the last trading day immediately prior to
the Closing Date, or (ii) $10.00 per share. This provision does
not establish a maximum exchange ratio; rather, its effect is to
limit the amount of dilution that would be experienced by FBL
shareholders if Hibernia were to merge with another company in a
transaction in which Hibernia was not the surviving entity. See
"PROPOSED MERGER -- Terms of the Merger."
Each of the directors of SNB holds 200 shares of common stock
in SNB as directors' qualifying shares. Pursuant to the terms of
the agreements between each of these directors and SNB dated August
1993, SNB will repurchase such shares when the directors resign
their positions. The directors of SNB are expected to resign their
positions on or before the Closing Date. The amount to be paid to
each director is $1,000 (the amount originally paid by the director
for the shares) plus interest at a rate of 8% per annum. For this
purpose, interest will be calculated from the date the director
purchased the shares through the date of his resignation from the
SNB board of directors.
Management and Operations After the Merger
After the Effective Date, the offices of the Banks will
operate as branch banking offices of HNB. As of the Effective
Date, the directors of First Bancorp Bancshares and the Banks will
resign their positions as directors. See "PROPOSED MERGER --
Management and Operations After the Merger." Certain officers of
First Bancorp and its subsidiaries have executed employment
agreements with Hibernia, and Hibernia may create an advisory board
of directors on which some or all of the directors of First Bancorp
and its subsidiaries may serve - See "PROPOSED MERGER -- Interests
of Certain Persons in the Merger."
Other Pending Merger Transactions for Hibernia
In addition to First Bancorp, Hibernia has entered into
definitive merger agreements with four 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 First Bancorp 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 First
Bancorp 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 First Bancorp, 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 March 31, 1994, and all percentages are percentages of the
total combined entity, assuming consummation of all pending mergers
including First Bancorp.
Name Deposits Deposits Assets Assets Shareholders' Assets
as % of as % of Equity as %
Total Total Total
Commercial
Bancshares,
Inc. $151 million 2.78% $170 million 2.72% $13.7 million 2.69%
Bastrop
National
Bank $106 million 1.95% $122 million 1.95% $15.1 million 2.97%
First
Continental
Bancshares,
Inc. $345 million 7.05% $400 million 7.03% $17.4 million 3.63%
Pioneer
Bancshares
Corp. $365 million 5.97% $366 million 5.85% $29.1 million 5.72%
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 First Bancorp and taken as a
whole, would have increased earnings per share in each of the years
1991, 1992 and 1993, as shown on the Pro Forma Combined Statement
of Income included in the Pro Forma Financial Statements below.
On a pro forma basis, as of March 31, 1994, the book value of
the shares of Hibernia would be slightly increased by the pending
transactions. The effect of the Merger on the book value of
Hibernia Common Stock, as well as First Bancorp Common Stock, is
shown in the Comparative Per Share Data table included herein.
<PAGE>
Recommendation of the Board of Directors
The Board of Directors of First Bancorp 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
Austin Associates, Inc. an opinion that the terms of the Merger are
fair, from a financial point of view, to the shareholders of First
Bancorp. See "PROPOSED MERGER -- Opinion of Financial Advisor."
First Bancorp's Board believes that the Merger will provide
significant value to all First Bancorp shareholders and will enable
them to participate in opportunities for growth that First
Bancorp's Board believes the Merger makes possible. In
recommending the Merger to the shareholders, First Bancorp's Board
of Directors considered, among other factors, the financial terms
of the Merger, the liquidity it will afford First Bancorp's
shareholders and the business earnings and potential for future
growth of First Bancorp, and Hibernia. See "PROPOSED MERGER --
Background of and Reasons for the Merger."
Basis for the Terms of the Merger
A number of factors were considered by the Board of Directors
of First Bancorp in approving the terms of the Merger, including,
without limitation, information concerning the financial condition,
results of operations and prospects of Hibernia, First Bancorp, HNB
and the Banks; 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 First Bancorp's
common stock; the consideration to be received by First Bancorp
shareholders in relation to First Bancorp's earnings and book
value; the anticipated tax-free nature of the Merger to First
Bancorp'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
Austin Associates, Inc., First Bancorp's financial advisor,
has rendered both oral and written opinions that the terms of the
Merger are fair, from a financial point of view, to First Bancorp's
shareholders. A copy of the opinion of Austin Associates, Inc. is
attached hereto as Appendix B 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 First Bancorp
Common Stock. Directors of First Bancorp and members of their
families have voting power with respect to 28,431 shares of First
Bancorp Common Stock, representing 13.69% of the First Bancorp
Common Stock outstanding as of the Record Date. In addition, these
individuals and members of their families have the right to acquire
an additional 16,911 shares in the aggregate upon conversion of
certain debentures, which, when added to their common stock
holdings, would give them the right to vote 20.19% First Bancorp
Common Stock if they were the only debenture holders who converted
their debentures. See "PROPOSED MERGER -- Ownership of First
Bancorp Common Stock." Subject to receipt of certain fairness
opinions from Austin Associates, Inc. the directors of First
Bancorp have agreed to vote their stock in favor of approval of the
Agreement at any meeting of First Bancorp's shareholders held
before September 30, 1994 at which the Merger is considered, unless
they are legally required to abstain from voting or to vote against
the Merger in the opinion of their counsel. See "MEETING
INFORMATION -- Record Date; Voting Rights" and "CERTAIN INFORMATION
RELATING TO FIRST BANCORP -- Voting Securities and Certain Holders
Thereof." The First Bancorp Employee Stock Ownership Plan ("ESOP")
holds 66,274 (31.92%) of the shares of FBL Common Stock outstanding
as of the Record Date. Shares held by the ESOP on behalf of First
Bancorp employees will only be voted in accordance with the
instructions of the employees.
Certain convertible debentures of FBL (collectively, the
"Debentures") may be converted by the holders thereof at any time
prior to the consummation of the Merger. If the Debentures are
converted prior to the Record Date, the underlying shares of FBL
Common Stock to be issued to the holders of the Debentures will be
entitled to vote at the Special Meeting. FBL Common Stock issued
after the Record Date upon conversion of Debentures will not be
entitled to vote at the Special Meeting.
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 First Bancorp 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. 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 First Bancorp's shareholders may reduce the ratio of
Hibernia Common Stock to First Bancorp Common Stock to be issued in
the Merger (the "Exchange Ratio"). Any other material change to
the Agreement after the date of the Special Meeting would require,
however, a resolicitation of First Bancorp's shareholders for the
purpose of voting on the transaction as amended. 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."
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 First Bancorp Common
Stock for Hibernia Common Stock will not give rise to the
recognition of gain or loss for federal income tax purposes to
First Bancorp's shareholders with respect to such exchange. The
parties have received an opinion from Ernst & Young, certified
public accountants, who also serve as independent auditors for
Hibernia, 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(a) of the Code.
A copy of such opinion is attached hereto as Appendix D. See
"PROPOSED MERGER -- Material Tax Consequences."
Because of the complexities of the 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 First Bancorp 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 First Bancorp 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 C. However, if dissenters' rights are exercised and
perfected with respect to 10% or more of the outstanding shares of
First Bancorp 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 First Bancorp,
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 shareholder of Hibernia are different in
certain respects from the rights of shareholders of First Bancorp.
See "PROPOSED MERGER -- Certain Differences in Rights of
Shareholders."
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 First
Bancorp Common Stock exercise and perfect dissenters' rights, the
Merger will not qualify for pooling-of-interests accounting
treatment, and Hibernia will not be obligated to effect the Merger.
In addition, unless the holders of 90% of the aggregate shares of
First Bancorp outstanding plus the total number of shares that may
be acquired upon conversion of the convertible debentures are
exchanged for Hibernia Common Stock in the Merger, the Merger will
not qualify for pooling of interests accounting treatment. See
"PROPOSED MERGER -- Accounting Treatment."
MEETING INFORMATION
General
Each copy of this Proxy Statement-Prospectus mailed to holders
of First Bancorp Common Stock is accompanied by a proxy card
furnished in connection with the solicitation of proxies by First
Bancorp'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 First Bancorp on approximately July __, 1994. The
Special Meeting is scheduled to be held on July 14, 1994, at 5:00
p.m. local time, at the main office of First National Bank of West
Monroe, 500 Natchitoches Street, West Monroe, Louisiana 71294-0487.
Only holders of record of First Bancorp Common Stock at the close
of business on June 14, 1994 (the "Record Date") are entitled to
notice of and to vote at the Special Meeting. At the Special
Meeting, the shareholders of First Bancorp will consider and vote
upon a proposal to approve the Merger and the related Agreement,
and such other matters as may properly be brought before the
Special Meeting.
HOLDERS OF FIRST BANCORP COMMON STOCK ARE REQUESTED TO
COMPLETE, DATE AND SIGN THE ACCOMPANYING PROXY CARD AND RETURN IT
PROMPTLY TO FIRST BANCORP IN THE ENCLOSED POSTAGE-PAID, ADDRESSED
ENVELOPE.
Any holder of First Bancorp 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 First Bancorp, provided that such notice or proxy
card must actually be received by First Bancorp before the vote of
shareholders at the Special Meeting. Any notice of revocation or
proxy card should be sent to First Bancorp at P. O. Box 487, West
Monroe, Louisiana 71294-0487, Attention: Patrick L. Spencer,
Secretary.
The shares of First Bancorp 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 Merger and the related Agreement. 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 Merger and the related Agreement.
As of the date of this Proxy Statement-Prospectus, First Bancorp's
Board of Directors is unaware of any matter to be presented at the
Special Meeting other than the proposal to approve the Merger.
The cost of soliciting proxies from shareholders of First
Bancorp will be borne by First Bancorp. Such solicitation will be
made by mail but also may be made by telephone or in person by the
directors, officers and employees of First Bancorp (who will
receive no additional compensation for doing so).
FIRST BANCORP SHAREHOLDERS SHOULD NOT FORWARD ANY STOCK
CERTIFICATES WITH THEIR PROXY CARDS. IF THE MERGER IS APPROVED,
SHAREHOLDERS OF FIRST BANCORP WILL RECEIVE INSTRUCTIONS AS TO
EXCHANGING THEIR STOCK CERTIFICATES.
First Bancorp's Employee Stock Ownership Plan
Each employee of First Bancorp who is a participant in the
First Bancorp of Louisiana, 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 First Bancorp 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 proposal to approve 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 July
14, 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 Merger. At the
Special Meeting, the Trustee will vote the shares of First Bancorp
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
to the extent it does not receive instructions with respect
thereto. The Trustee of the ESOP holds 66,274 shares (31.92% of
the outstanding shares) of First Bancorp Common Stock on behalf of
the participants of such plan.
Votes Required
As of the Record Date, there were [207,612] shares of First
Bancorp Common Stock outstanding and entitled to vote at the
Special Meeting, with each share being entitled to one vote. In
addition, holders of Debentures have the right to acquire, in the
aggregate, 30,064 shares of First Bancorp Common Stock. However,
unless a Debenture was converted prior to the Record Date, the
underlying shares of FBL Common Stock to be issued upon conversion
will not be entitled to vote at the Special meeting. If any of the
Debentures is converted prior to the Record Date, the shares of
First Bancorp Common Stock received on such conversion would
increase the number of shares outstanding. Conversion of
Debentures prior to the Record Date would also increase the number
of votes required to approve the Merger. All shares issued upon
conversion of Debentures prior to the Record Date are included in
the total number of shares outstanding and entitled to vote set
forth above in this paragraph. The affirmative vote of a majority
of the voting power of First Bancorp present or represented by
proxy and entitled to vote at the Special Meeting will be required
to approve the Merger. Members of First Bancorp's Board of
Directors and officers, along with members of their families who
are expected to vote in favor of approval of the Merger, own 13.69%
of the outstanding First Bancorp Common Stock.
Holders of certain debentures issued by First Bancorp have the
right to convert their debentures into First Bancorp at any time
prior to the Closing Date. If all such debentures were converted,
an additional 30,064 shares of First Bancorp Common Stock would be
issued. If issued prior to the Record Date, these shares would be
entitled to be voted on the Merger at the Special Meeting. As the
determination of whether and when to convert the debentures is
solely within the holders discretion, there can be no assurance as
to whether any or all of the debentures will be converted.
For purposes of the Special Meeting, the presence in person or
by proxy of a majority of the outstanding shares of First Bancorp
Common Stock is necessary to constitute a quorum of shareholders in
order to take action. For these purposes, shares of First Bancorp
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
Merger or whether a broker with discretionary authority fails to
exercise its discretionary voting authority with respect to the
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. Also,
shares held in the First Bancorp ESOP will not be vital unless
instructions are received from employees. These shares will not be
considered present or represented if instructions are not received
from employees. The affirmative vote of a majority of the voting
power of First Bancorp present or represented by proxy at the
Special Meeting will be necessary to approve the Merger.
Each outstanding share of First Bancorp 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
[207,612] shares of First Bancorp Common Stock outstanding and
entitled to vote at the Special Meeting.
The directors and executive officers of First Bancorp and
their affiliates beneficially owned a total of [28,431] shares or
approximately [13.69%] of the outstanding shares of First Bancorp
Common Stock as of the Record Date. Each shareholder who is a
director has executed an agreement with Hibernia pursuant to which
such shareholder has committed, subject to certain conditions, to
vote the shares of First Bancorp Common Stock owned by him in favor
of the proposal to approve the Merger. Additionally, First Bancorp
has been advised that all of its directors and executive officers
intend to vote their shares in favor of approval of the Merger.
As of the Record Date, the directors and executive officers of
Hibernia and their affiliates beneficially owned no shares of First
Bancorp Common Stock.
Recommendation of First Bancorp's Board
First Bancorp's Board has unanimously approved the Merger and
unanimously recommends that First Bancorp's shareholders vote FOR
approval of the Merger. See "PROPOSED MERGER -- Background of and
Reasons for the Merger" and "-- Opinion of Financial Advisor."
Other Matters
The Board of Directors of First Bancorp is not aware of any
business to be acted upon at the Special Meeting other than
consideration of the proposed 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.
PRO FORMA FINANCIAL INFORMATION
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.
The information in the column titled "Hibernia" on the Pro
Forma Combined Balance Sheet, pro forma statements of income and
audited statements of income are summarized from Hibernia's Report
on Form 10-K for the year ended December 31, 1993. The information
contained in the columns titled "Bastrop", "First Commercial",
"First Bancorp" and "First Continental" 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 September 28, 1993, Hibernia signed an agreement and plan
of merger with Commercial Bancshares, Inc. ("Commercial"), a bank
holding company headquartered in Franklin, Louisiana, which owns
First Commercial Bank, headquartered in Abbeville, Louisiana. At
March 31, 1994, Commercial reported consolidated assets of $170
million and operated eight banking branches in the Acadiana region
of Louisiana. Shareholders of Commercial will receive Hibernia
Common Stock valued at $18.7 million in exchange for their shares
of Commercial, and the transaction will be accounted for as a
pooling of interests.
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. As of
March 31, 1994, Bastrop reported consolidated assets of
approximately $122 million and operated two banking branches in
Bastrop. Shareholders of Bastrop will receive Hibernia Common
Stock valued at $21.5 million in exchange for their common stock of
Bastrop, and the transaction will be accounted for as a pooling of
interests.
On December 6, 1993, Hibernia announced that it had reached an
agreement to merge with First Continental Bancshares, Inc. ("First
Continental"), a Louisiana bank holding company that owns First
National Bank of Jefferson Parish ("FNJ"). At March 31, 1994,
First Continental reported consolidated assets of $400 million and
operated eight banking branches in Jefferson Parish, Louisiana.
Common and preferred stockholders of First Continental will receive
Hibernia Common Stock valued at approximately $31.7 million, and
certain other security and debt holders will receive cash and
Hibernia Common Stock, in the merger. This merger will also be
accounted for as a pooling of interests.
On June 1, 1994, Hibernia announced that it had reached an
agreement to merge with Pioneer Bancshares Corporation ("Pioneer"),
a Louisiana bank holding company headquartered in Shreveport,
Louisiana that owns Pioneer Bank & Trust and Pioneer Mortgage
Company. At March 31, 1994, Pioneer reported consolidated assets
of $366 million and operated 11 banking branches in Caddo Parish,
Louisiana. Shareholders of Pioneer will receive Hibernia Common
Stock valued at approximately $67 million in the merger. This
merger will be accounted for as a pooling of interests.
The mergers with Commercial, Bastrop, First Continental and
Pioneer are subject to the satisfaction of certain conditions
similar to those described herein with regard to the Merger. There
can be no assurance that any of such proposed mergers will occur,
or that the timing of the consummation of such mergers will be as
assumed in the Pro Forma Financial Statements.
PRO FORMA COMBINED BALANCE SHEET
(Unaudited)
The following unaudited pro forma combined balance sheet
combines the historical balance sheets of Hibernia and First
Bancorp as if the Merger had been effective on March 31, 1994.
This unaudited pro forma combined balance sheet should be read in
conjunction with the historical financial statements and related
notes of Hibernia, incorporated by reference to this Proxy
Statement/Prospectus, and First Bancorp, contained elsewhere in
this Proxy Statement/Prospectus. The unaudited pro forma combined
balance sheet also gives effect to other probably mergers to which
Hibernia is a party, as discussed in Note D to the pro forma
combined financial statements. These mergers include Commercial
Bancshares, Inc., Bastrop National Bank, First Continental and
Pioneer Bancshares Corporation, and have been included in the pro
forma combined balance sheets as if the mergers had been effective
on March 31, 1994.
<TABLE>
HIBERNIA CORPORATION
PRO FORMA COMBINED BALANCE SHEET
March 31, 1994
<CAPTION>
FIRST PRO FORMA
BANCORP OF PRO HIBERNIA
HIBERNIA LOUISIANA, FORMA CORP. (WITH
Unaudited ($ in thousands) CORPORATION INC. ADJ. 1ST BANCORP)
<S> <C> <C> <C> <C>
ASSETS
Cash and due from banks $262,264 $11,046 $273,310
Interest-bearing time deposits in domestic banks - 784 784
Federal funds sold and securities purchased
under agreements to resell 287,167 5,200 ($3,609)(B) 288,758
Securities available for sale 457,384 63,003 520,387
Securities held to maturity 1,562,959 36,404 1,599,363
Loans, net of unearned income 2,347,542 99,106 2,446,648
Reserve for possible loan losses (158,922) (1,390) (160,312)
Loans, net 2,188,620 97,716 0 2,286,336
Bank premises and equipment 83,430 1,958 85,388
Customers' acceptance liability 12,350 - 12,350
Other assets 165,009 3,317 168,326
TOTAL ASSETS $5,019,183 $219,428 ($3,609) $5,235,002
LIABILITIES
Deposits:
Demand, noninterest-bearing $916,182 $30,134 $946,316
Interest-bearing 3,400,684 163,251 3,563,935
Total Deposits 4,316,866 193,385 0 4,510,251
Federal funds purchased and securities sold under
agreements to repurchase 172,780 1,767 174,547
Liability on acceptances 12,350 - 12,350
Other liabilities 85,476 1,329 ($29)(B) 86,776
Debt - 8,182 (800)(A) 3,802
(3,580)(B)
TOTAL LIABILITIES 4,587,472 204,663 (4,409) 4,787,726
SHAREHOLDERS' EQUITY
Preferred Stock - - -
Common Stock 160,640 1,364 7,852 (A) 169,856
Surplus 405,051 6,744 (8,691)(A) 403,104
Treasury Stock - (1,639) 1,639 (A) 0
Retained earnings (deficit) (133,369) 8,193 (125,176)
Unrealized gain (loss) on securities
available for sale (611) 103 (508)
TOTAL SHAREHOLDERS' EQUITY 431,711 14,765 800 447,276
TOTAL LIABILITIES AND SHAREHOLDERS' EQUITY $5,019,183 $219,428 ($3,609) $5,235,002
See notes to Pro Forma Combined Financial Statements.
</TABLE>
<PAGE>
<TABLE>
HIBERNIA CORPORATION
PRO FORMA COMBINED BALANCE SHEET
March 31, 1994 (con't.)
<CAPTION>
PRO FORMA FIRST TOTAL
HIBERNIA COMMERCIAL BASTROP CONTINENTAL PIONEER PRO PRO FORMA
CORP. (WITH BANCSHARES NATIONAL BANCSHARES, BANCSHARES FORMA HIBERNIA
Unaudited ($ in thousands) 1ST BANCORP) INC. BANK INC. CORP. ADJ. CORPORATION
<S> <C> <C> <C> <C> <C> <C> <C>
ASSETS
Cash and due from banks $273,310 $7,534 $3,018 $17,934 $13,958 $315,754
Interest-bearing time deposits in domestic banks 784 12 - - 9,111 9,907
Federal funds sold and securities purchased
under agreements to resell 288,758 8,700 3,575 20,000 12,550 ($24,965)(E) 295,183
($13,435)(D)
Securities available for sale 520,387 33,750 50,266 107,160 48,735 760,298
Securities held to maturity 1,599,363 55,553 28,981 22,956 120,117 (473)(E) 1,826,497
Loans, net of unearned income 2,446,648 57,097 34,147 219,356 150,586 2,907,834
Reserve for possible loan losses (160,312) (1,301) (385) (6,394) (2,594) (170,986)
Loans, net 2,286,336 55,796 33,762 212,962 147,992 2,736,848
Bank premises and equipment 85,388 2,871 1,241 5,962 7,402 102,864
Customers' acceptance liability 12,350 - - - - 12,350
Other assets 168,326 5,554 1,555 12,190 6,082 193,707
TOTAL ASSETS $5,235,002 $169,770 $122,398 $399,164 $365,947 ($38,873) $6,253,408
LIABILITIES
Deposits:
Demand, noninterest-bearing $946,316 $23,904 $15,810 $62,159 $73,239 $1,121,428
Interest-bearing 3,563,935 127,273 90,345 277,858 250,406 4,309,817
Total Deposits 4,510,251 151,177 106,155 340,017 323,645 5,431,245
Federal funds purchased and securities sold under
agreements to repurchase 174,547 - 405 16,184 1,939 193,075
Liability on acceptances 12,350 - - - - 12,350
Other liabilities 86,776 1,975 721 14,057 5,011 ($4,524)(E) 104,016
Debt 3,802 2,955 - 11,995 6,259 (20,614)(E) 3,802
(595)(C)
TOTAL LIABILITIES 4,787,726 156,107 107,281 382,253 336,854 (25,733) 5,744,488
SHAREHOLDERS' EQUITY
Preferred Stock - - - 11,422 0 (11,422)(D) 0
Common Stock 169,856 629 300 2,145 2,880 28,220 (C) 204,711
681 (D)
Surplus 403,104 591 1,000 2,741 6,742 (29,710)(C) 381,774
(2,694)(D)
Treasury Stock 0 (1,154) - (118) (813) 2,085 (C) 0
Retained earnings (deficit) (125,176) 14,139 13,926 1,218 20,178 (300)(E) (76,015)
Unrealized gain (loss) on securities
available for sale (508) (542) (109) (497) 106 0 (1,550)
TOTAL SHAREHOLDERS' EQUITY 447,276 13,663 15,117 16,911 29,093 (13,140) 508,920
TOTAL LIABILITIES AND SHAREHOLDERS' EQUITY $5,235,002 $169,770 $122,398 $399,164 $365,947 ($38,873) $6,253,408
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 three months ended March 31, 1994 and 1993, and the
years ended December 31, 1993, 1992 and 1991 combined the
historical statements of income of Hibernia and First Bancorp 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, incorporated by reference into this Proxy
Statement/Prospectus, and First Bancorp, contained elsewhere in
this Proxy Statement/Prospectus. The cost associated with the
Merger, estimated to be $____ million, will be accounted for as a
current period expense upon consummation of the Merger and has not
been reflected in the pro forma combined statements of income. The
unaudited pro forma combined statements of income also give effect
to other probable mergers to which Hibernia is a party, as
discussed in Note C to the pro forma combined financial statements.
These mergers include Commercial Bancshares, Inc., Bastrop National
Bank, First Continental Bancshares, Inc. and Pioneer Bancshares
Corporation, and have been included in the pro forma combined
statements of income as if the mergers had been effective on
January 1, 1991.
<PAGE>
<TABLE>
HIBERNIA CORPORATION
PRO FORMA COMBINED STATEMENT OF INCOME
Three Months Ended March 31, 1994
<CAPTION>
FIRST PRO FORMA
BANCORP OF HIBERNIA
HIBERNIA LOUISIANA,CORP. (WITH
Unaudited ($ in thousands, except per share data) CORPORATION INC. 1ST BANCORP)
<S> <C> <C> <C>
Interest Income
Interest and fees on loans $46,751 $2,160 $48,911
Interest on securities:
U.S. government securities and obligations of
U.S. government agencies 26,615 1,223 27,838
Obligations of states and political subdivisions - 157 157
Trading account interest 5 - 5
Interest on time deposits in domestic banks - 22 22
Interest on federal funds sold and securities
purchased under agreements to resell 1,483 89 1,572
Total Interest Income 74,854 3,651 78,505
Interest Expense
Interest on deposits 24,823 1,253 26,076
Interest on federal funds purchased and
securities sold under agreements to repurchase 1,084 14 1,098
Interest on debt and other - 141 141
Total Interest Expense 25,907 1,408 27,315
Net Interest Income 48,947 2,243 51,190
Provision for possible loan losses - (45) (45)
Net Interest Income After Provision for
Possible Loan Losses 48,947 2,288 51,235
Noninterest Income
Trust fees 2,951 3 2,954
Service charges on deposits 7,885 279 8,164
Other service, collection and exchange charges 4,607 169 4,776
Other operating income 1,757 52 1,809
Securities gains (losses), net - 3 3
Total Noninterest Income 17,200 506 17,706
Noninterest Expense
Salaries and employee benefits 22,409 1,024 23,433
Occupancy expense, net 5,099 178 5,277
Equipment expense 2,834 99 2,933
Data processing expense 4,729 54 4,783
Foreclosed property expense (4,256) 4 (4,252)
Other operating expense 17,216 483 17,699
Total Noninterest Expense 48,031 1,842 49,873
Income Before Income Taxes 18,116 952 19,068
Income tax expense 980 279 1,259
Income from Continuing Operations $17,136 $673 $17,809
Pro Forma Weighted Average Common Shares 83,635,150 4,800,000 88,435,150
Pro Forma Income Per Common Share
from Continuing Operations (G) $0.20 * $0.20
See notes to Pro Forma Combined Financial Statements.
*Historical
</TABLE>
<PAGE>
<TABLE>
HIBERNIA CORPORATION
PRO FORMA COMBINED STATEMENT OF INCOME
Three Months Ended March 31, 1994 (con't.)
<CAPTION>
PRO FORMA FIRST TOTAL
HIBERNIA COMMERCIAL BASTROP CONTINENTAL PIONEER PRO PRO FORMA
CORP. (WITH BANCSHARES NATIONAL BANCSHARES,BANCSHARES FORMA HIBERNIA
Unaudited ($ in thousands, except per share data) 1ST BANCORP) INC. BANK INC. CORPORATION ADJ. CORPORATION
<S> <C> <C> <C> <C> <C> <C>
Interest Income
Interest and fees on loans $48,911 $1,252 $731 $5,088 $3,416 $59,398
Interest on securities:
U.S. government securities and obligations of
U.S. government agencies 27,838 1,146 1,013 1,813 2,081 33,891
Obligations of states and political subdivisions 157 13 171 4 3 348
Trading account interest 5 - - - - 5
Interest on time deposits in domestic banks 22 - - - 34 56
Interest on federal funds sold and securities
purchased under agreements to resell 1,572 64 59 117 77 1,889
Total Interest Income 78,505 2,475 1,974 7,022 5,611 95,587
Interest Expense
Interest on deposits 26,076 950 785 2,143 1,546 31,500
Interest on federal funds purchased and
securities sold under agreements to repurchase 1,098 - 51 13 1,162
Interest on debt and other 141 62 2 451 98 754
Total Interest Expense 27,315 1,012 787 2,645 1,657 33,416
Net Interest Income 51,190 1,463 1,187 4,377 3,954 62,171
Provision for possible loan losses (45) 0 0 150 125 230
Net Interest Income After Provision for
Possible Loan Losses 51,235 1,463 1,187 4,227 3,829 61,941
Noninterest Income
Trust fees 2,954 - - 128 - 3,082
Service charges on deposits 8,164 210 130 624 701 9,829
Other service, collection and exchange charges 4,776 55 34 259 545 5,669
Other operating income 1,809 21 5 328 268 ($229)(F) 2,202
Securities gains (losses), net 3 - - 162 - 165
Total Noninterest Income 17,706 286 169 1,501 1,514 (229) 20,947
Noninterest Expense
Salaries and employee benefits 23,433 617 352 1,917 1,976 28,295
Occupancy expense, net 5,277 129 72 184 293 5,955
Equipment expense 2,933 91 34 183 219 3,460
Data processing expense 4,783 8 6 190 70 (188)(F) 4,869
Foreclosed property expense (4,252) 6 - 573 57 (3,616)
Other operating expense 17,699 652 269 1,275 968 (41)(F) 20,822
Total Noninterest Expense 49,873 1,503 733 4,322 3,583 (229) 59,785
Income Before Income Taxes 19,068 246 623 1,406 1,760 0 23,103
Income tax expense 1,259 75 158 589 604 2,685
Income from Continuing Operations $17,809 $171 $465 $817 $1,156 $0 $20,418
Pro Forma Weighted Average Common Shares 88,435,150 2,493,333 2,866,667 4,423,746 8,370,512 106,589,408
Pro Forma Income Per Common Share
from Continuing Operations (G) $0.20 $0.19
See notes to Pro Forma Combined Financial Statements.
*Historical
</TABLE>
<PAGE>
<TABLE>
HIBERNIA CORPORATION
PRO FORMA COMBINED STATEMENT OF INCOME
Three Months Ended March 31, 1993
<CAPTION>
FIRST PRO FORMA
BANCORP OF HIBERNIA
HIBERNIA LOUISIANA,CORP. (WITH
Unaudited ($ in thousands, except per share data) CORPORATION INC. 1ST BANCORP)
<S> <C> <C> <C>
Interest Income
Interest and fees on loans $46,850 $1,605 $48,455
Interest on securities:
U.S. government securities and obligations of
U.S. government agencies 26,173 1,094 27,267
Obligations of states and political subdivisions - 120 120
Trading account interest 2 - 2
Interest on time deposits in domestic banks 173 25 198
Interest on federal funds sold and securities
purchased under agreements to resell 3,371 19 3,390
Total Interest Income 76,569 2,863 79,432
Interest Expense
Interest on deposits 25,121 932 26,053
Interest on federal funds purchased and
securities sold under agreements to repurchase 861 30 891
Interest on debt and other 194 38 232
Total Interest Expense 26,176 1,000 27,176
Net Interest Income 50,393 1,863 52,256
Provision for possible loan losses 5,000 - 5,000
Net Interest Income After Provision for
Possible Loan Losses 45,393 1,863 47,256
Noninterest Income
Trust fees 3,054 3 3,057
Service charges on deposits 7,214 174 7,388
Other service, collection and exchange charges 3,912 - 3,912
Other operating income 1,516 150 1,666
Securities gains, net - - 0
Total Noninterest Income 15,696 327 16,023
Noninterest Expense
Salaries and employee benefits 20,743 632 21,375
Occupancy expense, net 4,893 159 5,052
Equipment expense 2,737 75 2,812
Data processing expense 3,669 49 3,718
Foreclosed property expense 2,594 4 2,598
Other operating expense 16,170 439 16,609
Total Noninterest Expense 50,806 1,358 52,164
Income Before Income Taxes and
Extraordinary Items 10,283 832 11,115
Income tax expense - 254 254
Income from Continuing Operations $10,283 $578 $10,861
Pro Forma Weighted Average Common Shares 82,399,612 4,800,000 87,199,612
Pro Forma Income (Loss) Per Common Share
from Continuing Operations (G) $0.12 * $0.12
See notes to Pro Forma Combined Financial Statements.
*Historical
</TABLE>
<PAGE>
<TABLE>
HIBERNIA CORPORATION
PRO FORMA COMBINED STATEMENT OF INCOME
Three Months Ended March 31, 1993 (con't.)
<CAPTION>
PRO FORMA FIRST TOTAL
HIBERNIA COMMERCIAL BASTROP CONTINENTAL PIONEER PRO PRO FORMA
CORP. (WITH BANCSHARES NATIONAL BANCSHARES,BANCSHARES FORMA HIBERNIA
Unaudited ($ in thousands, except per share data) 1ST BANCORP) INC. BANK INC. CORPORATION ADJ. CORPORATION
<S> <C> <C> <C> <C> <C> <C>
Interest Income
Interest and fees on loans $48,455 $1,390 $777 $5,644 $3,291 $59,557
Interest on securities:
U.S. government securities and obligations of
U.S. government agencies 27,267 1,361 1,190 1,710 2,334 33,862
Obligations of states and political subdivisions 120 13 144 1 3 281
Trading account interest 2 - - - - 2
Interest on time deposits in domestic banks 198 - - - 63 261
Interest on federal funds sold and securities
purchased under agreements to resell 3,390 58 54 79 98 3,679
Total Interest Income 79,432 2,822 2,165 7,434 5,789 97,642
Interest Expense
Interest on deposits 26,053 1,079 861 2,350 1,695 32,038
Interest on federal funds purchased and
securities sold under agreements to repurchase 891 - - 55 - 946
Interest on debt and other 232 62 2 459 315 1,070
Total Interest Expense 27,176 1,141 863 2,864 2,010 34,054
Net Interest Income 52,256 1,681 1,302 4,570 3,779 63,588
Provision for possible loan losses 5,000 75 0 435 449 5,959
Net Interest Income After Provision for
Possible Loan Losses 47,256 1,606 1,302 4,135 3,330 57,629
Noninterest Income
Trust fees 3,057 0 - 226 - 3,283
Service charges on deposits 7,388 180 119 696 796 9,179
Other service, collection and exchange charges 3,912 33 33 258 931 5,167
Other operating income 1,666 70 6 742 82 ($227)(F) 2,339
Securities gains, net 0 0 2 8 (75) (65)
Total Noninterest Income 16,023 283 160 1,930 1,734 (227) 19,903
Noninterest Expense
Salaries and employee benefits 21,375 522 338 1,848 1,850 25,933
Occupancy expense, net 5,052 100 68 177 421 5,818
Equipment expense 2,812 97 34 169 167 3,279
Data processing expense 3,718 3 5 185 234 (183)(F) 3,962
Foreclosed property expense 2,598 93 - 1,114 633 4,438
Other operating expense 16,609 438 244 1,670 906 (44)(F) 19,823
Total Noninterest Expense 52,164 1,253 689 5,163 4,211 (227) 63,253
Income Before Income Taxes and
Extraordinary Items 11,115 636 773 902 853 0 14,279
Income tax expense 254 215 214 400 286 1,369
Income from Continuing Operations $10,861 $421 $559 $502 $567 $0 $12,910
Pro Forma Weighted Average Common Shares 87,199,612 2,493,333 2,866,667 4,423,746 8,370,512 105,353,870
Pro Forma Income (Loss) Per Common Share
from Continuing Operations (G) $0.12 $0.12
See notes to Pro Forma Combined Financial Statements.
*Historical
</TABLE>
<PAGE>
<TABLE>
HIBERNIA CORPORATION
PRO FORMA COMBINED STATEMENT OF INCOME
Year Ended December 31, 1993
<CAPTION>
FIRST PRO FORMA
BANCORP OF HIBERNIA
HIBERNIA LOUISIANA,CORP. (WITH
Unaudited ($ in thousands, except per share data) CORPORATION INC. 1ST BANCORP)
<S> <C> <C> <C>
Interest Income
Interest and fees on loans $185,378 $7,470 $192,848
Interest on securities:
U.S. government securities and obligations of
U.S. government agencies 105,939 4,678 110,617
Obligations of states and political subdivisions - 537 537
Trading account interest 33 - 33
Interest on time deposits in domestic banks 194 100 294
Interest on federal funds sold and securities
purchased under agreements to resell 8,186 207 8,393
Total Interest Income 299,730 12,992 312,722
Interest Expense
Interest on deposits 100,092 4,308 104,400
Interest on federal funds purchased and
securities sold under agreements to repurchase 3,654 59 3,713
Interest on debt and other 279 377 656
Total Interest Expense 104,025 4,744 108,769
Net Interest Income 195,705 8,248 203,953
Provision for possible loan losses (6,200) (235) (6,435)
Net Interest Income After Provision for
Possible Loan Losses 201,905 8,483 210,388
Noninterest Income
Trust fees 12,692 7 12,699
Service charges on deposits 30,046 803 30,849
Other service, collection and exchange charges 15,768 470 16,238
Gain on settlement of acquired loans 1,308 - 1,308
Other operating income 7,403 136 7,539
Securities gains (losses), net - 90 90
Total Noninterest Income 67,217 1,506 68,723
Noninterest Expense
Salaries and employee benefits 83,364 3,211 86,575
Occupancy expense, net 20,611 660 21,271
Equipment expense 11,043 304 11,347
Data processing expense 16,504 200 16,704
Foreclosed property expense 2,188 (88) 2,100
Provision for data processing enhancements 11,991 - 11,991
Other operating expense 73,775 1,966 75,741
Total Noninterest Expense 219,476 6,253 225,729
Income Before Income Taxes and
Cumulative Effect of Accounting Change 49,646 3,736 53,382
Income tax expense 1,696 1,030 2,726
Income from Continuing Operations $47,950 $2,706 $50,656
Pro Forma Weighted Average Common Shares 83,175,129 4,800,000 87,975,129
Pro Forma Income Per Common Share
from Continuing Operations (G) $0.58 * $0.58
See notes to Pro Forma Combined Financial Statements.
*Historical
</TABLE>
<PAGE>
<TABLE>
HIBERNIA CORPORATION
PRO FORMA COMBINED STATEMENT OF INCOME
Year Ended December 31, 1993 (con't.)
<CAPTION>
PRO FORMA FIRST TOTAL
HIBERNIA COMMERCIAL BASTROP CONTINENTAL PIONEER PRO PRO FORMA
CORP. (WITH BANCSHARES, NATIONAL BANCSHARES,BANCSHARES FORMA HIBERNIA
Unaudited ($ in thousands, except per share data) 1ST BANCORP) INC. BANK INC. CORPORATION ADJ. CORPORATION
<S> <C> <C> <C> <C> <C> <C>
Interest Income
Interest and fees on loans $192,848 $5,479 $3,183 $22,636 $14,704 $238,850
Interest on securities:
U.S. government securities and obligations of
U.S. government agencies 110,617 5,001 4,312 6,890 8,980 135,800
Obligations of states and political subdivisions 537 42 630 13 85 1,307
Trading account interest 33 - - - - 33
Interest on time deposits in domestic banks 294 1 - - 255 550
Interest on federal funds sold and securities
purchased under agreements to resell 8,393 180 200 446 217 9,436
Total Interest Income 312,722 10,703 8,325 29,985 24,241 385,976
Interest Expense
Interest on deposits 104,400 3,992 3,378 9,230 6,596 127,596
Interest on federal funds purchased and
securities sold under agreements to repurchase 3,713 - - 289 15 4,017
Interest on debt and other 656 252 8 1,753 948 3,617
Total Interest Expense 108,769 4,244 3,386 11,272 7,559 135,230
Net Interest Income 203,953 6,459 4,939 18,713 16,682 250,746
Provision for possible loan losses (6,435) 75 28 725 1,509 (4,098)
Net Interest Income After Provision for
Possible Loan Losses 210,388 6,384 4,911 17,988 15,173 254,844
Noninterest Income
Trust fees 12,699 - - 611 - 13,310
Service charges on deposits 30,849 820 513 2,755 2,965 37,902
Other service, collection and exchange charges 16,238 176 138 815 2,290 19,657
Gain on settlement of acquired loans 1,308 - - - - 1,308
Other operating income 7,539 67 47 578 564 ($905)(F) 7,890
Securities gains (losses), net 90 - 51 24 (73) 92
Total Noninterest Income 68,723 1,063 749 4,783 5,746 (905) 80,159
Noninterest Expense
Salaries and employee benefits 86,575 2,404 1,451 8,087 7,593 106,110
Occupancy expense, net 21,271 401 358 727 1,264 24,021
Equipment expense 11,347 392 93 745 755 13,332
Data processing expense 16,704 21 14 755 186 (741)(F) 16,939
Foreclosed property expense 2,100 (178) - 5,213 723 7,858
Provision for data processing enhancements 11,991 - - - - 11,991
Other operating expense 75,741 1,938 915 5,174 4,733 (164)(F) 88,337
Total Noninterest Expense 225,729 4,978 2,831 20,701 15,254 (905) 268,588
Income Before Income Taxes and
Cumulative Effect of Accounting Change 53,382 2,469 2,829 2,070 5,665 0 66,415
Income tax expense 2,726 802 779 1,052 1,975 7,334
Income from Continuing Operations $50,656 $1,667 $2,050 $1,018 $3,690 $0 $59,081
Pro Forma Weighted Average Common Shares 87,975,129 2,493,333 2,866,667 4,423,746 8,370,512 106,129,387
Pro Forma Income Per Common Share
from Continuing Operations (G) $0.58 $0.56
See notes to Pro Forma Combined Financial Statements.
*Historical
</TABLE>
<PAGE>
<TABLE>
HIBERNIA CORPORATION
PRO FORMA COMBINED STATEMENT OF INCOME
Year Ended December 31, 1992
<CAPTION>
FIRST PRO FORMA
BANCORP OF HIBERNIA
HIBERNIA LOUISIANA,CORP. (WITH
Unaudited ($ in thousands, except per share data) CORPORATION INC. 1ST BANCORP)
<S> <C> <C> <C>
Interest Income
Interest and fees on loans $253,183 $6,286 $259,469
Interest on securities:
U.S. government securities and obligations of
U.S. government agencies 89,131 4,940 94,071
Obligations of states and political subdivisions 3 555 558
Trading account interest 99 - 99
Interest on time deposits in domestic banks 223 132 355
Interest on federal funds sold and securities
purchased under agreements to resell 14,095 146 14,241
Total Interest Income 356,734 12,059 368,793
Interest Expense
Interest on deposits 141,502 4,737 146,239
Interest on federal funds purchased and
securities sold under agreements to repurchase 6,515 69 6,584
Interest on debt and other 11,439 186 11,625
Total Interest Expense 159,456 4,992 164,448
Net Interest Income 197,278 7,067 204,345
Provision for possible loan losses 66,275 710 66,985
Net Interest Income After Provision for
Possible Loan Losses 131,003 6,357 137,360
Noninterest Income
Trust fees 12,263 7 12,270
Service charges on deposits 31,870 661 32,531
Other service, collection and exchange charges 13,928 523 14,451
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 6 9,978
Securities gains, net 17,190 60 17,250
Total Noninterest Income 86,440 1,257 87,697
Noninterest Expense
Salaries and employee benefits 86,141 2,404 88,545
Occupancy expense, net 23,275 634 23,909
Equipment expense 13,447 308 13,755
Data processing expense 17,477 205 17,682
Foreclosed property expense 16,302 (30) 16,272
Other operating expense 68,716 1,550 70,266
Total Noninterest Expense 225,358 5,071 230,429
Income (Loss) Before Income Taxes and
Extraordinary Items (7,915) 2,543 (5,372)
Income tax expense - 598 598
Income (Loss) from Continuing Operations ($7,915) $1,945 ($5,970)
Pro Forma Weighted Average Common Shares 29,608,279 4,800,000 34,408,279
Pro Forma Income (Loss) Per Common Share
from Continuing Operations (G) ($0.27)* ($0.17)
See notes to Pro Forma Combined Financial Statements.
*Historical
</TABLE>
<PAGE>
<TABLE>
HIBERNIA CORPORATION
PRO FORMA COMBINED STATEMENT OF INCOME
Year Ended December 31, 1992 (con't.)
<CAPTION>
PRO FORMA FIRST TOTAL
HIBERNIA COMMERCIAL BASTROP CONTINENTAL PIONEER PRO PRO FORMA
CORP. (WITH BANCSHARES, NATIONAL BANCSHARES,BANCSHARES FORMA HIBERNIA
Unaudited ($ in thousands, except per share data) 1ST BANCORP) INC. BANK INC. CORPORATION ADJ. CORPORATION
<S> <C> <C> <C> <C> <C> <C>
Interest Income
Interest and fees on loans $259,469 $6,489 $3,410 $24,612 $14,947 $308,927
Interest on securities:
U.S. government securities and obligations of
U.S. government agencies 94,071 5,619 4,775 7,017 11,030 122,512
Obligations of states and political subdivisions 558 70 572 2 187 1,389
Trading account interest 99 - - - - 99
Interest on time deposits in domestic banks 355 4 2 - 252 613
Interest on federal funds sold and securities
purchased under agreements to resell 14,241 230 178 549 343 15,541
Total Interest Income 368,793 12,412 8,937 32,180 26,759 449,081
Interest Expense
Interest on deposits 146,239 5,497 3,743 12,169 9,158 176,806
Interest on federal funds purchased and
securities sold under agreements to repurchase 6,584 - 4 322 - 6,910
Interest on debt and other 11,625 377 11 1,353 732 14,098
Total Interest Expense 164,448 5,874 3,758 13,844 9,890 197,814
Net Interest Income 204,345 6,538 5,179 18,336 16,869 251,267
Provision for possible loan losses 66,985 150 40 1,152 2,221 70,548
Net Interest Income After Provision for
Possible Loan Losses 137,360 6,388 5,139 17,184 14,648 180,719
Noninterest Income
Trust fees 12,270 2 - 577 6 12,855
Service charges on deposits 32,531 713 481 2,726 3,129 39,580
Other service, collection and exchange charges 14,451 183 179 932 2,284 18,029
Gain on settlement of acquired loans 4,151 - - - - 4,151
Loss on planned sale of Texas bank (2,934) - - - - (2,934)
Other operating income 9,978 22 31 640 1,447 ($911)(F) 11,207
Securities gains, net 17,250 44 22 20 14 17,350
Total Noninterest Income 87,697 964 713 4,895 6,880 (911) 100,238
Noninterest Expense
Salaries and employee benefits 88,545 2,565 1,336 7,034 6,936 106,416
Occupancy expense, net 23,909 407 351 726 1,351 26,744
Equipment expense 13,755 387 133 744 570 15,589
Data processing expense 17,682 22 14 747 864 (739)(F) 18,590
Foreclosed property expense 16,272 (124) - 6,554 2,637 25,339
Other operating expense 70,266 1,868 985 5,592 5,876 (172)(F) 84,415
Total Noninterest Expense 230,429 5,125 2,819 21,397 18,234 (911) 277,093
Income (Loss) Before Income Taxes and
Extraordinary Items (5,372) 2,227 3,033 682 3,294 0 3,864
Income tax expense 598 638 854 232 1,094 3,416
Income (Loss) from Continuing Operations ($5,970) $1,589 $2,179 $450 $2,200 $0 $448
Pro Forma Weighted Average Common Shares 34,408,279 2,493,333 2,866,667 4,423,746 8,370,512 52,562,537
Pro Forma Income (Loss) Per Common Share
from Continuing Operations (G) ($0.17) $0.01
See notes to Pro Forma Combined Financial Statements.
*Historical
</TABLE>
<PAGE>
<TABLE>
HIBERNIA CORPORATION
PRO FORMA COMBINED STATEMENT OF INCOME
Year Ended December 31, 1991
<CAPTION>
FIRST PRO FORMA
BANCORP OF HIBERNIA
HIBERNIA LOUISIANA,CORP. (WITH
Unaudited ($ in thousands, except per share data) CORPORATION INC. 1ST BANCORP)
<S> <C> <C> <C>
Interest Income
Interest and fees on loans $451,675 $5,845 $457,520
Interest on securities:
U.S. government securities and obligations of
U.S. government agencies 114,629 4,743 119,372
Obligations of states and political subdivisions 4,970 574 5,544
Trading account interest 70 - 70
Interest on time deposits in domestic banks 100 324 424
Interest on federal funds sold and securities
purchased under agreements to resell 9,285 386 9,671
Total Interest Income 580,729 11,872 592,601
Interest Expense
Interest on deposits 317,780 6,580 324,360
Interest on federal funds purchased and
securities sold under agreements to repurchase 16,177 74 16,251
Interest on debt and other 12,173 319 12,492
Total Interest Expense 346,130 6,973 353,103
Net Interest Income 234,599 4,899 239,498
Provision for possible loan losses 178,330 432 178,762
Net Interest Income After Provision for
Possible Loan Losses 56,269 4,467 60,736
Noninterest Income
Trust fees 14,346 6 14,352
Service charges on deposits 34,779 605 35,384
Other service, collection and exchange charges 19,938 573 20,511
Credit card income 5,251 2 5,253
Gain on settlement of acquired loans 9,043 - 9,043
Other operating income 8,512 - 8,512
Securities gains, net 17,801 (17) 17,784
Total Noninterest Income 109,670 1,169 110,839
Noninterest Expense
Salaries and employee benefits 115,173 2,195 117,368
Occupancy expense, net 28,785 378 29,163
Equipment expense 13,979 211 14,190
Data processing expense 12,548 194 12,742
Foreclosed property expense 24,854 (2) 24,852
Credit card expense 3,136 - 3,136
Other operating expense 110,679 1,317 111,996
Total Noninterest Expense 309,154 4,293 313,447
Income (Loss) Before Minority Interests (143,215) 1,343 (141,872)
Less: Minority interest - - 0
Income (Loss) Before Income Taxes,
Extraordinary Item and Cumulative Effect
of Accounting Change (143,215) 1,343 (141,872)
Income tax expense 782 305 1,087
Income (Loss) from Continuing Operations ($143,997) $1,038 ($142,959)
Pro Forma Weighted Average Common Shares 28,116,938 4,800,000 32,916,938
Pro Forma Income (Loss) Per Common Share
from Continuing Operations (G) ($5.12)* ($4.34)
See notes to Pro Forma Combined Financial Statements.
*Historical
</TABLE>
<PAGE>
<TABLE>
HIBERNIA CORPORATION
PRO FORMA COMBINED STATEMENT OF INCOME
Year Ended December 31, 1991 (con't.)
<CAPTION>
PRO FORMA FIRST TOTAL
HIBERNIA COMMERCIAL BASTROP CONTINENTAL PIONEER PRO PRO FORMA
CORP. (WITH BANCSHARES, NATIONAL BANCSHARES,BANCSHARES FORMA HIBERNIA
Unaudited ($ in thousands, except per share data) 1ST BANCORP) INC. BANK INC. CORPORATION ADJ. CORPORATION
<S> <C> <C> <C> <C> <C> <C>
Interest Income
Interest and fees on loans $457,520 $7,857 $3,648 $26,672 $16,686 $512,383
Interest on securities:
U.S. government securities and obligations of
U.S. government agencies 119,372 6,002 4,694 5,861 12,042 147,971
Obligations of states and political subdivisions 5,544 229 495 6 394 6,668
Trading account interest 70 - - - - 70
Interest on time deposits in domestic banks 424 61 37 - 291 813
Interest on federal funds sold and securities
purchased under agreements to resell 9,671 292 470 984 572 11,989
Total Interest Income 592,601 14,441 9,344 33,523 29,985 679,894
Interest Expense
Interest on deposits 324,360 8,216 5,150 17,645 14,866 370,237
Interest on federal funds purchased and
securities sold under agreements to repurchase 16,251 - - 543 - 16,794
Interest on debt and other 12,492 635 19 1,250 838 15,234
Total Interest Expense 353,103 8,851 5,169 19,438 15,704 402,265
Net Interest Income 239,498 5,590 4,175 14,085 14,281 277,629
Provision for possible loan losses 178,762 10 17 1,800 2,561 183,150
Net Interest Income After Provision for
Possible Loan Losses 60,736 5,580 4,158 12,285 11,720 94,479
Noninterest Income
Trust fees 14,352 2 - 490 11 14,855
Service charges on deposits 35,384 754 442 2,629 2,715 41,924
Other service, collection and exchange charges 20,511 218 162 884 1,636 23,411
Credit card income 5,253 - - 160 - 5,413
Gain on settlement of acquired loans 9,043 - - - - 9,043
Other operating income 8,512 27 37 368 207 ($799)(F) 8,352
Securities gains, net 17,784 22 (278) 179 186 17,893
Total Noninterest Income 110,839 1,023 363 4,710 4,755 (799) 120,891
Noninterest Expense
Salaries and employee benefits 117,368 2,510 1,231 6,954 5,548 133,611
Occupancy expense, net 29,163 411 350 899 1,169 31,992
Equipment expense 14,190 453 85 851 491 16,070
Data processing expense 12,742 17 17 665 761 (658)(F) 13,544
Foreclosed property expense 24,852 244 - 3,685 2,421 31,202
Credit card expense 3,136 - - - - 3,136
Other operating expense 111,996 1,935 799 4,469 3,842 (141)(F) 122,900
Total Noninterest Expense 313,447 5,570 2,482 17,523 14,232 (799) 352,455
Income (Loss) Before Minority Interests (141,872) 1,033 2,039 (528) 2,243 0 (137,085)
Less: Minority interest 0 - - 311 - 311
Income (Loss) Before Income Taxes,
Extraordinary Item and Cumulative Effect
of Accounting Change (141,872) 1,033 2,039 (839) 2,243 0 (137,396)
Income tax expense 1,087 163 478 - 572 2,300
Income (Loss) from Continuing Operations ($142,959) $870 $1,561 ($839) $1,671 $0 ($139,696)
Pro Forma Weighted Average Common Shares 32,916,938 2,493,333 2,866,667 4,423,746 8,370,512 51,071,196
Pro Forma Income (Loss) Per Common Share
from Continuing Operations (G) ($4.34) ($2.74)
See notes to Pro Forma Combined Financial Statements.
*Historical
</TABLE>
<PAGE>
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 $36.0 million to effect
the merger with First Bancorp of Louisiana, Inc. (First
Bancorp). It is assumed that prior to this merger $800,000 of
First Bancorp convertible subordinated debentures will be
converted to 30,064 shares of First Bancorp common stock. The
Hibernia Corporation common stock is assumed to have a market
value of $7.50 per share resulting in the issuance of
4,800,000 shares of common stock for all the outstanding
common stock of First Bancorp (exchange ratio of 20.20). 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 First Bancorp debt of $3,580,000 and related accrued
interest of $29,000. The retirement of the First Bancorp debt
is required by the debt agreement.
C. In addition to the First Bancorp merger, Hibernia Corporation
is a party to pending mergers with Commercial Bancshares, Inc.
(Commercial Bancshares), Bastrop National Bank (Bastrop
National), First Continental Bancshares, Inc. (First
Continental) and Pioneer Bancshares Corporation (Pioneer).
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 $595,000 of
convertible premium related to First Continental senior
secured notes will be converted to 415,107 of First
Continental common stock and that such common stock will then
be exchanged for Hibernia Corporation 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
Commercial Bancshares 2,493,333 $ 18,700,000 $ 4,787,000 8.85
Bastrop National 2,866,667 21,500,000 5,504,000 9.55
First Continental 4,069,125 30,518,000 7,813,000 1.60
Pioneer 8,370,512 62,779,000 16,071,000 30.50
Total 17,799,637 $133,497,000 $34,175,000
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
$13,435,000 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
$473,000, 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
Commercial Bancshares $ 2,955,000 $ 9,000 $ -
First Continental 11,400,000 4,465,000 300,000
Pioneer 6,259,000 50,000 -
$20,614,000 $4,524,000 $300,000
The retirement of the Commercial Bancshares and Pioneer debt
is not a requirement of the merger. The retirement of the
First Continental debt is required by the merger agreement.
F. To eliminate intercompany transactions between Hibernia
Corporation and First Continental primarily related to data
processing charges paid by First Continental to Hibernia
Corporation.
G. 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-Prospectus 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 A 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
As a result of recent improvement in the Louisiana economy,
there has been a sharp increase in the level of interest in and the
number of acquisitions of financial institutions in Louisiana. One
of the responsibilities of the Board of Directors of First Bancorp
is to consider various strategic alternatives, including whether to
affiliate with a larger, more diversified financial organization,
as viable opportunities might arise.
In May 1993, another bank holding company unaffiliated with
First Bancorp or Hibernia contacted First Bancorp about a proposed
affiliation. Extensive discussions were held with this bank
holding company over the ensuing months and resulted in an offer to
acquire First Bancorp. In October 1993, prior to these
negotiations being concluded, Hibernia contacted representatives of
First Bancorp and expressed a similar interest in a proposed
affiliation. The financial terms of the proposed transaction with
Hibernia were considerably more advantageous to First Bancorp and
its shareholders than the offer received from the other potential
acquirer. After several meetings and extensive negotiations, the
Merger Agreement was executed on November 4, 1993. The Merger
Agreement calls for an exchange of Hibernia Common Stock for all of
the outstanding shares of First Bancorp in a tax-free merger.
In determining that the Merger was in the best interests of
First Bancorp and its stockholders, the Board of Directors of First
Bancorp considered a numerous factors, including: (a) the
business, earnings and potential for future growth of First Bancorp
and Hibernia; (b) potential operational and managerial benefits
that could be derived from the Merger; (c) the consideration to be
received by First Bancorp stockholders in the Merger in relation to
the book value and earnings of First Bancorp; (d) the prices paid
for First Bancorp stock in the limited trades known to First
Bancorp management; (e) prices paid in similar merger transactions;
(f) the tax-free nature of the stock-for-stock exchange; (g) the
liquidity provided by holding shares of Hibernia which are traded
on the NYSE; and (h) the fairness opinion issued by Austin
Associates.
Based on the foregoing, the Board of Directors of First
Bancorp has unanimously approved the Agreement and 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 Austin Associates an opinion that the
terms of the Merger are fair, from a financial point of view, to
the common shareholders of First Bancorp. See "PROPOSED MERGER --
Opinion of Financial Advisor." First Bancorp's Board believes that
the Merger will provide significant value to all First Bancorp
shareholders and will enable them to participate in opportunities
for growth that First Bancorp's Board believes the Merger makes
possible.
Terms of the Merger
On the Effective Date, each outstanding share of First Bancorp
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: ($36.0
million divided by 237,676 (the number of outstanding shares of
First Bancorp Common Stock taking into account the issuance of
30,064 shares as a result of conversion of certain convertible
debentures)) 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
ten business 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 $7.50, each share of First Bancorp
Common Stock will be exchanged for 20.20 shares of Hibernia Common
Stock.
The Agreement also provides that the aggregate value of
Hibernia Common Stock to be exchanged for First Bancorp Common
Stock will be increased if book value of First Bancorp is at least
$14.6 million in each month after March 31, 1994 prior to the
Closing Date. In that event, the increase in value, to be paid in
shares of Hibernia Common Stock, will be the lesser of (i) the net
aggregate after-tax income of First Bancorp for each full month
ended after March 31, 1994 and prior to the Closing Date, and (ii)
$250,000.
The Agreement also provides for a minimum value, regardless of
the actual market price, of $10.00 per share of Hibernia Common
Stock in the event Hibernia enters into a merger in which Hibernia
is not the surviving entity or sells all or substantially all of
its assets prior to the Closing Date of the Merger. This provision
does not establish a maximum exchange ratio; rather, its effect is
to limit the amount of dilution that would be experienced by FBL
shareholders if Hibernia were to merge with another company in a
transaction in which Hibernia was not the surviving entity.
Upon the effectiveness of the Merger, the conversion of shares
of First Bancorp Common Stock to Hibernia Common Stock will be
automatic, and First Bancorp 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."
Advice and Opinion of Financial Advisor
First Bancorp retained the financial institution consulting
firm of Austin Associates, Inc., Toledo, Ohio ("Austin
Associates"), as financial advisor in connection with the proposed
Merger. Prior to execution of the Agreement, Austin Associates
orally advised the Board of Directors that the terms of the Merger
provided fair consideration to First Bancorp shareholders. Austin
Associates subsequently delivered to the Board of Directors of
First Bancorp its written opinion dated ________, 1994 that, based
on the matters set forth therein, the terms of the Merger as
provided for in the Agreement are fair to First Bancorp's
stockholders from a financial point of view. A copy of Austin
Associates' opinion is set forth as Appendix B to this Proxy
Statement-Prospectus and should be read in its entirety.
Austin Associates, as part of its financial institution
consulting business, is routinely engaged in the valuation of banks
and other financial institutions and their securities in connection
with mergers and acquisitions and other transactions. First
Bancorp retained Austin Associates on the basis of its reputation
and its experience in evaluating financial institutions. In
addition, Austin Associates had performed consulting services for
First Bancorp in the past and was familiar with First Bancorp and
its operations. The terms of the Merger were negotiated between
the respective managements of First Bancorp and Hibernia. Austin
Associates did not participate in direct negotiations between the
parties.
In rendering its opinion, Austin Associates reviewed, among
other things: (1) this Proxy Statement-Prospectus; (2) the
financial statements of First Bancorp and Hibernia for the years
1990 through 1993; (3) publicly available information regarding the
performance of a peer group of six regional bank holding companies
in Louisiana and Mississippi (First Commerce Corporation, Premier
Bancorp, Inc., Whitney Holding Corporation, Deposit Guaranty
Corporation, Trustmark Corporation and Grenada Sunburst System
Corporation); (4) the financial terms, to the extent publicly
available, of sale transactions involving commercial banking
organizations with total assets between $100 and $500 million that
occurred from 1987 to 1993 certain comparable transactions; and (5)
conducted such other analysis and reviewed such other information
as Austin Associates deemed relevant.
Austin Associates did not conduct a physical inspection of any
of the properties or assets of First Bancorp or Hibernia. Austin
Associates has assumed and relied upon the accuracy and
completeness of the financial and other information provided to it
or publicly available, has relied upon the representations and
warranties of First Bancorp and Hibernia made in the Agreement, and
has not independently attempted to verify any of such information.
Austin Associates has also assumed that the conditions to the
Merger as set forth in the Merger Agreement would be satisfied and
that the Merger would be consummated on a timely basis in the
manner contemplated by the Agreement. No limitations were imposed
by First Bancorp upon Austin Associates on the scope of its
investigation nor were any specific instructions given to Austin
Associates in connection with its fairness opinion.
Set forth below is a summary of selected analyses performed by
Austin Associates in reaching its opinion.
Summary of Proposal. Austin Associates reviewed the terms of
the merger proposal, including the consideration provided for in
the Agreement, the resulting percentage ownership of the combined
company that would be held by First Bancorp shareholders
immediately following the proposed transaction, and the value of
the consideration offered.
Pro Forma Merger Analysis. Austin Associates analyzed certain
pro forma effects resulting from the Merger, assuming a purchase
price of $36,000,000, including changes in earnings, the change in
the ratio of tangible common equity to assets, the change in book
value per share and dividends. The analysis showed, among other
things, dilution in earnings per share ("EPS") and dilution in book
value per share for the shareholders of Hibernia. Based on an
assumed closing price of $8.00 per share for Hibernia and expected
quarterly cash dividends of Hibernia of $.03 per share, dividends
per share received by current First Bancorp shareholders would
increase 127 percent.
Analysis of Selected Merger Transactions. Austin Associates
analyzed selected bank holding company mergers involving
acquisitions of certain commercial banking companies which have
consummated since June 1, 1987. Austin Associates reviewed the
prices paid for organizations with total assets between $100 and
$500 million. Austin Associates calculated the price/last twelve-
month ("LTM") EPS multiple and the price/book value multiple in
each such merger. These calculations yielded a median price/LTM
EPS multiple of 12.7x and a median price/book value multiple of
1.32. The resulting price/LTM EPS from the Hibernia proposal to
acquire First Bancorp was 16.9x and the resulting price/book
multiple using First Bancorp's June 30, 1993 total shareholders'
equity was 2.96.
No company or transaction used in the above analyses as a
comparison is identical to First Bancorp, Hibernia or the
contemplated transaction. Accordingly, an analysis of the results
of the foregoing is not mathematical; rather, it involves complex
considerations and judgments concerning differences in financial
and operating characteristics of the companies and other factors
that could affect the public trading value of the companies to
which they are being compared.
Stock Trading History. Austin Associates examined the history
of the trading prices and volumes for the common stock of First
Bancorp and Hibernia.
Consideration for Shares. The rate of exchange and general
terms of the Agreement were proposed by Hibernia and negotiated and
agreed to by First Bancorp on an arm's-length basis.
The summary set forth above does not purport to be a complete
description of the analyses performed by Austin Associates. The
preparation of a fairness opinion is not necessarily susceptible to
partial analysis or summary description. Austin Associates
believes that its analyses and the summary set forth above must be
considered as a whole and that selecting portions of its analyses,
without considering all analyses, or selecting part or all of the
above summary, without considering all factors and analyses, would
create an incomplete view of the processes underlying the analyses
set forth in the Austin Associates opinion. In addition, Austin
Associates 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 range of
valuations resulting from any particular analysis described above
should not be taken to be Austin Associates' view of the actual
value of First Bancorp or the combined company. 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 analyses.
Hibernia determined the amount of consideration to be paid to
First Bancorp shareholders in the Merger. Austin Associates did
not advise Hibernia in any manner with regard to establishing the
consideration to be paid.
For Austin Associates' services as financial advisor in the
proposed transaction, First Bancorp will pay Austin Associates fees
of $76,000, of which $25,000 will be paid for the issuance of the
fairness opinion. In addition, First Bancorp has agreed to
reimburse Austin Associates for reasonable out-of-pocket expenses
and indemnify Austin Associates against certain liabilities,
including liabilities under the securities laws.
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 First Bancorp a letter of
transmittal, together with instructions for the exchange of their
First Bancorp Common Stock certificates for certificates
representing Hibernia Common Stock. Until so exchanged, each
certificate representing First Bancorp 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 First Bancorp
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 First
Bancorp 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 First Bancorp to consummate
the Merger and the Bank Merger are conditioned upon, among other
things, approval of the Agreement by First Bancorp'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 First Bancorp
Common Stock is exchanged for Hibernia Common Stock, First
Bancorp'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 First Bancorp, the receipt of certain opinions of Austin
Associates 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 First Bancorp shareholders holding more than 10% of the
outstanding First Bancorp 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 First Bancorp's shareholders may reduce the Exchange
Ratio.
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, and the Merger must be consummated within 90
calendar days after such approval is obtained.
HNB is regulated by the OCC, and the Bank Merger consequently
must be approved by the OCC before it may be effected.
When the approval of the Federal Reserve and the OCC have been
obtained, First Bancorp 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.
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.
The regulatory approvals sought in connection with the Merger
and the Bank Merger may be obtained or denied prior to or after the
Special Meeting. The vote on the Merger at the Special Meeting is
not dependent or conditioned upon receipt of any such approvals
prior to the Special Meeting. Even if the Merger is approved at
the Special Meeting, it may not be consummated thereafter. Failure
to receive the requisite regulatory approvals will result in a
termination of the Agreement.
Business Pending the Merger
Under the terms of the Agreement, neither First Bancorp nor
the Banks 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, First Bancorp may not solicit bids or
other transactions that would result in a merger of First Bancorp
or the Banks with an entity other than Hibernia or HNB. First
Bancorp may pay normal and customary dividends prior to the Closing
Date.
Effective Date of the Merger; Termination
After all conditions to consummation of the Merger have been
satisfied or waived, the effective date shall be the date and time
that 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 First Bancorp'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 First Bancorp fail to
approve the Merger at the Special Meeting; or (v) in the event that
the Merger is not consummated by September 30, 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, First Bancorp will be merged with and
into Hibernia. Immediately thereafter, the Banks will merge with
and into HNB and the separate existences of First Bancorp and the
Banks will cease. The offices of the Banks will operate as branch
banking offices of HNB. The employees of the Banks 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. Certain information regarding the
directors of Hibernia elected at its annual meeting of shareholders
on April 27, 1993 is contained in documents incorporated herein by
reference. See "AVAILABLE INFORMATION." The directors of First
Bancorp and the Banks will resign their positions as directors as
of the Effective Date. Some of these directors may serve on an
advisory board of Hibernia after the Merger. See "PROPOSED MERGER
- -- Interests of Certain Persons in the Merger."
Certain Differences in Rights of Shareholders
If the shareholders of First Bancorp approve the Merger and
the Merger is subsequently consummated, all shareholders of First
Bancorp, 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 First Bancorp's Articles of Incorporation and Bylaws. The
following is a summary of the principal differences between the
rights of shareholders of First Bancorp and Hibernia not described
elsewhere in this Proxy Statement-Prospectus.
Liquidity of Stock. There currently is no ready market for
the shares of First Bancorp 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 First Bancorp 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.
Preemptive Rights. Neither shareholders of Hibernia nor First
Bancorp have preemptive rights.
Removal of Directors. 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. One or more directors of First Bancorp may be
removed by the affirmative vote of 75% of the total power present
at a meeting called for that purpose.
Amendment of Articles and Bylaws. 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. The Articles
of Incorporation of First Bancorp may be amended by the affirmative
vote of two-thirds of the voting power present at a meeting called
for that purpose.
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. The Bylaws of First Bancorp may be
amended by the affirmative vote of a majority of the voting power
present at any meeting called for that purpose.
Special Meetings of Shareholders. 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.
A special meeting of shareholders of First Bancorp may be called at
any time by the President, the Board of Directors, or the
Shareholders of not less than ten percent (10%) of all shares
entitled to vote at such meeting.
Shareholder Proposals. 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.
Certain Transfer Restrictions Relating to 5-Percent
Shareholders. Article IX of Hibernia's Articles of Incorporation
restricts transfers of equity interests in the 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.
First Bancorp's Articles of Incorporation provide that First
Bancorp shall indemnify its directors, officers, employees, and
agents of the Corporation and may purchase and maintain liability
insurance for such persons as, and to the extent, permitted by
Louisiana law.
Interests of Certain Persons in the Merger
Indemnification of First Bancorp Directors. The terms of the
Merger include certain provisions that protect the officers and
directors of First Bancorp and the Banks from and against liability
for actions arising while they served in those capacities for First
Bancorp and/or the Banks. 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 November 4, 1993, except that the
Agreement limits Hibernia's aggregate liability for such
indemnification to $12 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 First
Bancorp's or either of the Banks' director and officer liability
insurance carrier was not notified prior to the Closing.
The Agreement also provides for indemnification of First
Bancorp'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 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 First Bancorp for use in the
Registration Statement, including this Proxy Statement-Prospectus.
Employment Agreements. Hibernia has executed, subject to
consummation of the Merger, employment agreements with J. Herbert
Boydstun, President of First Bancorp, and Malcolm E. Maddox,
President of FNB. In addition, SNB entered into an employment
agreement in November 1993 with John R. Ulmer, President of SNB,
which would be assumed by Hibernia if the Merger is consummated.
Each of these contracts provides for employment for a period of
three years after the date thereof and salaries at the levels
currently earned by those individuals, with annual salary increases
and bonuses based upon Hibernia's policies and the performance of
each individual. Mr. Boydstun's contract includes a minimum bonus
of $46,000, and Mr. Maddox's contract includes a minimum bonus of
$25,000. Each contract may be terminated for cause by Hibernia
without liability for further payments thereunder. The agreements
may also be terminated without cause by Hibernia or for "good
reason", as defined therein, by the individual, which termination
would require Hibernia to pay the individual the salary provide for
therein for the remainder of the unexpired term of the contract.
For purposes of these contracts, "good reason" is generally defined
as a material diminution or other adverse change in the duties and
responsibilities of the employee or requiring the employee to
relocate without his consent.
Advisory Board of Directors. If the Merger occurs, HNB is
considering the creation of an Advisory Board of Directors for the
Northeast Region. The Advisory Board would function in largely the
same manner as Hibernia's City Boards of Directors, meeting on a
quarterly basis and providing business development support to HNB.
An Advisory Board would give HNB the benefit of the experience of
some of the individuals who have been involved with the
institutions that Hibernia intends to acquire in the Monroe area.
If the Advisory Board is created, the number and identities of the
persons who would serve on that Board has not been determined, but
the Board, if created, is likely to include some members of the
Board of Directors of the Banks. The function and authority some 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.
Repurchase of SNB Shares. Pursuant to the terms of agreements
executed by directors of SNB in August 1993, the directors'
qualifying shares purchased by such directors will be repurchased
by SNB at the time the directors resign their positions. The
directors are expected to resign their positions on or before the
Closing Date. The amount to be paid to each director is $1,000
(the amount originally paid by the director for the shares) plus
interest at a rate of 8% per annum. For this purpose, interest
will be calculated from the date the director purchased the shares
through the date of his resignation from the SNB board of
directors. These agreements provide for such a repurchase
regardless of the reason for the director's resignation, and,
therefore, these amounts would be required to be paid in certain
circumstances even if the merger did not occur.
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 First Bancorp Common Stock for Hibernia Common
Stock will not give rise to the recognition of gain or loss for
federal income tax purposes to First Bancorp'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 First Bancorp, the Banks, Hibernia or HNB by reason of the
Merger; (ii) a shareholder of First Bancorp 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 First
Bancorp Common Stock; (iii) the tax basis in the Hibernia Common
Stock received by a shareholder of First Bancorp will be the same
as the tax basis in the First Bancorp Common Stock surrendered in
exchange therefor; and (iv) the holding period, for federal income
tax purposes, for Hibernia Common Stock received in exchange for
First Bancorp Common Stock will include the period during which the
shareholder held the First Bancorp Common Stock surrendered in the
exchange, provided that the First Bancorp Common Stock was held as
a capital asset at the Effective Date.
The Louisiana income tax treatment to the shareholders of
First Bancorp should be substantially the same as the federal
income tax treatment to the shareholders of First Bancorp 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 of the Agreement, will
constitute a reorganization for purposes of Section 368 of the Code
and will have the tax effects described in this section. A copy of
the opinion of Ernst & Young in this regard is attached hereto as
Appendix D. As noted in the opinion, the opinion is based upon
certain representations and assumptions described therein.
Shareholders of First Bancorp are urged to review the full text of
the opinion of Ernst & Young attached hereto as Appendix D with
regard to the tax consequences of the Merger to them.
For information regarding the federal income tax consequences
of cash payments received by dissenting shareholders, see "PROPOSED
MERGER -- Rights of Dissenting Shareholders."
Resale of Hibernia Common Stock
The shares of Hibernia Common Stock issuable to shareholders
of First Bancorp 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 First Bancorp
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, First Bancorp, and for purposes hereof could be deemed to
include all executive officers, directors and 10% shareholders of
First Bancorp.
Hibernia Common Stock received and beneficially owned by those
shareholders who are deemed to be affiliates of First Bancorp 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 First Bancorp in the Merger will not be
transferable until financial statements pertaining to at least 30
days of post-Merger combined operations of Hibernia and First
Bancorp have been published, in order to satisfy certain
requirements of the Commission relating to pooling-of-interests
accounting treatment.
The Agreement provides that First Bancorp will use its best
efforts to identify those persons who may be deemed to be
affiliates of First Bancorp and to cause each person so identified
to deliver to Hibernia a written agreement providing that such
person will not dispose of First Bancorp 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 First Bancorp 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 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, 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 First Bancorp 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 First
Bancorp Common Stock to perfect dissenters' rights.
Cash received by a dissenting shareholder of First Bancorp in
exchange for his or her First Bancorp 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 First
Bancorp 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.
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 First Bancorp 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 First Bancorp Common Stock, including all of the
shares to be issued on conversion of the Debentures, must be
exchanged for Hibernia Common Stock. If holders of more than 10%
of the outstanding First Bancorp Common Stock exercise and perfect
dissenters' rights, the Merger will not qualify for pooling-of-
interest accounting. Also, in order for the pooling-of-interests
accounting method to apply, "affiliates" of First Bancorp 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 First Bancorp and Hibernia. Persons
believed by First Bancorp to be "affiliates" have agreed to comply
with these restrictions.
First Bancorp 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
Band Holding Company Act of 1956 (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, Hibernia National Bank, 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 $61 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 FIRST BANCORP
Description of Business
General. First Bancorp is a registered bank holding company
headquartered in West Monroe, Louisiana that was incorporated under
the laws of Louisiana in 1987. First Bancorp engages in the
banking business through its subsidiaries, FNB and SNB. As of
March 31, 1994, First Bancorp's consolidated assets were equal to
$219 million, and the Banks had aggregate deposits of $193 million
as of that date.
FNB is located in Ouachita Parish, Louisiana (which Parish has
approximately 142,000 residents) and operates its main office and
seven additional branch offices in West Monroe, Calhoun and Monroe,
Louisiana. As of March 31, 1994, FNB had total assets of
approximately $158 million and deposits of approximately $139
million. In 1993 First Bancorp acquired SNB, which is located in
Madison Parish, Louisiana (a parish of approximately 12,000
residents). SNB had total assets of approximately $61 million and
total deposits of approximately $55 million as of March 31, 1994.
SNB operates a single office.
The Banks provide a wide range of retail banking services,
including checking and savings accounts; certificates of deposit;
individual retirement accounts; commercial, real estate, consumer
and agricultural loans; and safe deposit boxes.
There is no individual customer or group of customers, the
loss of which would have a material adverse effect on the
operations of the Banks. No significant portion of the Banks'
loans is concentrated within a single industry or group of related
industries.
Properties. FNB operates in six locations (500 Natchitoches
Street, 200 Thomas Road and 1905 North 7th Street in West Monroe,
1604 Winnsboro Road and 2289 Louisville Avenue in Monroe and 2995
Highway 80 in Calhoun), and SNB operates in one location at 500
East Askew in Tallulah. Each of the properties on which branches
or offices of the Banks are located are owned by First Bancorp or
the Banks or operated under leases with third parties, the terms of
which are fair to the Banks and provide for rent in amounts that do
not exceed the rates charged for similar properties to other
entities in the relevant markets.
Employees. FNB had 85 employees as of December 31, 1993, and
SNB had 29 employees as of that date. First Bancorp has no
employees that are not otherwise employed by one of the Banks.
Competitive Conditions. The principal markets in which First
Bancorp competes are Ouachita and Madison Parishes. For deposits
and loan, First Bancorp competes with other banks, savings
institutions, credit unions, finance companies, insurance
companies, governmental agencies and other financial institutions.
Litigation. First Bancorp and the Banks are parties to
litigation arising in the ordinary course of their businesses. In
addition, on June 6, 1994, a lawsuit was commenced in the United
States District Court for the Western District of Louisiana against
First Bancorp and certain of its officers, directors and
shareholders on behalf of Walter T. Silmon. The complaint in
Silmon v. First Bancorp, et al. alleges that the defendants
fraudulently induced the plaintiff to redeem a debenture of First
Bancorp for cash rather than First Bancorp Common Stock by
withholding material information from the plaintiff at the time the
debentures were redeemed. The plaintiff seeks damages in an
approximate amount of $5.6 million. First Bancorp believes this
case is without merit and intend to vigorously defend the
litigation.
Ownership of First Bancorp Common Stock and Dividends
Market Prices. As of the Record Date, there were 207,612
shares of First Bancorp Common Stock outstanding and approximately
189 shareholders of record of such shares. There is no established
trading market for First Bancorp 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 First Bancorp Common Stock, of
which First Bancorp's management is aware, occurring since January
1, 1992. The prices are based on the best knowledge of First
Bancorp'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
02/19/92 14 $23.75*
02/19/92 1,472 $16.02*
03/10/92 1,001 $23.75*
03/26/92 454 $23.75*
04/21/92 104 $23.75*
05/06/92 11,812 $25.55*
05/28/92 125 $23.75
05/28/92 175 $23.75
06/08/92 45 $23.75*
06/12/92 7,007 $26.61**
06/25/92 717 $26.61**
11/04/92 63 $15.87
11/04/92 63 $23.75
11/06/92 471 $23.75*
03/10/93 200 $23.75
03/10/93 200 $23.75
04/16/93 38 $23.75
04/16/93 38 $23.75
04/22/93 195 $25.00
05/06/93 11,813 $25.04*
06/09/93 1,536 $34.66**
09/23/93 449 Unknown
________________
* Denotes purchase by First Bancorp
** Denotes purchase by First Bancorp from the First Bancorp ESOP
The transactions which occurred on May 6, 1992 and 1993
resulted from the foreclosure by FNB on a loan that was secured by
First Bancorp Common Stock. First Bancorp purchased those shares
from FNB in each of those transactions.
The proposed Merger was first publicly announced on November
4, 1993. The most recent sale of First Bancorp Common Stock of
which First Bancorp's management is aware before that date occurred
on or about September 23, 1993 for a total of 449 shares, the sale
price of which is not known to First Bancorp.
Ownership of Principal Shareholders. Except for the First
Bancorp Common Stock, First Bancorp has no other class of voting
securities issued or outstanding. The following table provides
information concerning persons known to First Bancorp to be
beneficial owners, directly or indirectly, of more than 5% of the
outstanding shares of First Bancorp Common Stock, as of the Record
Date. Except as set forth below, no person is known by First
Bancorp as of such date to be the beneficial owner of more than 5%
of the outstanding voting securities of First Bancorp. Unless
otherwise noted, the named persons own the shares directly and have
sole voting and investment power with respect to the shares
indicated.
Name and Address Amount and Nature
of Beneficial Owner of Beneficial Ownership % of Class
Louise G. Leigh 12,476 6.00%
1401 South Grand
Monroe, LA 71202-2011
J. Herbert Boydstun 20,956(1) 10.09%
P. O. Box 487
West Monroe, LA 71294-0487
Robert P. McLeod 12,792 6.16%
P. O. Box 2270
Monroe, LA 71207-2270
The foregoing table assumes that none of the debentures which
are convertible into First Bancorp Common Stock are converted. See
"PROPOSED MERGER -- Vote Required." The following tables shows the
holdings of First Bancorp's principal shareholders assuming all of
the debentures are fully converted.
Name Number of Shares % of Class
Louise G. Leigh 12,476 5.25%
J. Herbert Boydstun 26,593(2) 11.19%
Robert P. McLeod 18,680 7.86%
_____________________
(1) Includes 6,112 shares held in the ESOP for Mr. Boydstun's
account, which he is entitled to vote in the Merger.
2) Includes 6,112 shares held in the ESOP for Mr. Boydstun's
account, which he is entitled to vote in the Merger.
Ownership of Directors and Executive Officers of First
Bancorp. The following table provides information concerning the
shares of First Bancorp Common Stock beneficially owned, directly
or indirectly, by each director and executive officer of First
Bancorp, 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.
Name Number of Shares % of Class
J. Herbert Boydstun 20,956(1) 10.09%
R. L. Davis, Jr. 3,258(2) 1.57%
Dave Norris 292 *
Patrick L. Spencer 3,925(3) 1.89%
All directors and
executive officers
as a group 28,431 13.69%
_________
* Less than 1%.
The foregoing table assumes that none of the debentures that
are convertible into First Bancorp Common Stock are converted prior
to the Record Date. See "PROPOSED MERGER -- Vote Required." The
following tables shows the ownership of First Bancorp Common Stock
by directors and executive officers assuming that all of the
convertible debentures are converted prior to the Record Date.
____________________
(1) Includes 6,112 shares held by the ESOP for Mr. Boydstun's
account which Mr. Boydstun will vote in the Merger.
(2) Includes 149 shares held by Mr. Davis' wife.
(3) Includes 3,555 shares held by the ESOP for Mr. Spencer's
account which Mr. Spencer may vote in the Merger.
Name Number of Shares % of Class
J. Herbert Boydstun 26,593(4) 11.19%
R. L. Davis, Jr. 8,895(5) 3.74%
Dave Norris 292 *
Patrick L. Spencer 9,562(6) 4.02%
All directors and
executive officers
as a group 45,342 19.08%
____________________
(4) Includes 6,112 shares held by the ESOP for Mr. Boydstun's
account which Mr. Boydstun will vote in the Merger.
(5) Includes 149 shares held by Mr. Davis' wife.
(6) Includes 3,555 shares held by the ESOP for Mr. Spencer's
account which Mr. Spencer may vote in the Merger.
Dividends. First Bancorp has paid dividends to its
shareholders in each of the last three fiscal years, including a
dividends of $.35 per share in 1991, a dividends of $.50 per share
in 1992 and a dividend of $1.00 per share in 1993.
First Bancorp's ability to pay dividends is dependent upon the
earnings and financial condition of the Banks, since substantially
all of the funds used by First Bancorp to pay dividends are derived
from dividends paid by the Banks to First Bancorp. Dividend
payments by the Banks are subject to certain regulatory
restrictions.
RELATIONSHIP WITH INDEPENDENT AUDITORS
KPMG Peat Marwick continuously served as the independent
auditors for First Bancorp from 1987 through 1993. A
representative of KPMG Peat Marwick is expected to be present at
the Special Meeting of First Bancorp'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 8,000 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 First Bancorp as of
December 31, 1993 and 1992 and for each of the years in the three-
year period ended December 31, 1993 contained in this Proxy
Statement-Prospectus have been audited by KPMG Peat Marwick,
certified public accountants, as set forth in their report thereon
contained therein, and have been included herein in reliance upon
such report given upon the authority of such firm as experts in
accounting and auditing.
FIRST BANCORP CONSOLIDATED FINANCIAL INFORMATION
FIRST BANCORP OF LOUISIANA, INC.
AND SUBSIDIARIES
Consolidated Financial Statements
December 31, 1993, 1992, and 1991
(With Independent Auditors' Report Thereon)<PAGE>
Independent Auditors' Report
To the Board of Directors
First Bancorp of Louisiana, Inc.:
We have audited the accompanying balance sheets of First Bancorp of
Louisiana, Inc. and Subsidiaries as of December 31, 1993 and 1992,
and the related consolidated statements of income, stockholders'
equity, and cash flows for each of the years in the three year
period ended December 31, 1993. These consolidated financial
statements are the responsibility of the Company's management. Our
responsibility is to express an opinion on these consolidated
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 statements presentation. We believe that our audits
provides a reasonable basis for our opinion.
In our opinion, the financial statements referred to above present
fairly, in all material respects, the financial position of First
Bancorp of Louisiana, Inc. and Subsidiaries as of December 31, 1993
and 1992, and the results of their operations and their cash flows
for each of the years in the three year period ended December 31,
1993, in conformity with generally accepted accounting principles.
As discussed in note 10 to the consolidated financial statements,
the Company changed its method of accounting for income taxes in
1993 to adopt the provisions of the Financial Accounting Standards
Board's Statement of Financial Accounting Standards No. 109,
Accounting for Income Taxes.
KPMG PEAT MARWICK
Shreveport, Louisiana
February 10, 1994
FIRST BANCORP OF LOUISIANA, INC. AND SUBSIDIARIES
Consolidated Balance Sheets
December 31, 1993 AND 1992
1993 1992
ASSETS
Cash and Due from Banks $ 10,963,341 11,815,310
Federal Funds Sold 15,775,000 825,000
Interest-bearing deposits with
financial institutions 1,077,101 1,077,474
Investment securities:
Mortgage-backed securities,
approximate market values of
$33,053,954 in 1993 and
$22,305,977 in 1992 32,607,926 21,769,377
Other debt securities,
approximate market values of
$63,326,454 in 1993 and
$49,221,605 in 1992 61,788,482 47,446,139
94,396,408 69,215,516
Loans, net 98,362,065 69,563,468
Premises and Equipment, net 2,002,263 1,640,299
Accrued interest receivable 1,876,458 1,518,937
Other Assets 629,393 899,659
TOTAL ASSETS $225,082,029 156,555,663
LIABILITIES AND STOCKHOLDERS EQUITY
DEPOSITS
Demand, noninterest-bearing $ 33,067,489 26,975,743
Interest-bearing demand accounts 47,460,816 33,391,507
Savings 18,455,891 11,772,828
Time 100,550,732 68,654,612
TOTAL DEPOSITS 199,534,928 140,794,690
Long-term debt 4,890,000 2,452,487
Federal Home Loan Bank advances 3,861,662
Accrued Interest Payable 622,867 350,295
Securities sold under agreements
to repurchase 2,021,249 1,700,513
Other Liabilities 563,304 309,752
TOTAL LIABILITIES 211,494,010 145,607,737
STOCKHOLDERS' EQUITY
Common Stock, Par Value $5
per share. 1,000,000 shares
authorized; 272,700 shares
issued 1,363,500 1,363,500
Capital Surplus 6,743,622 6,743,622
Retained Earnings 7,519,598 5,020,586
Treasury stock, 65,088 and
63,552 shares in 1993
and 1992, respectively,
at cost (1,638,701) (1,585,463)
Employee Stock Ownership
Plan commitment (400,000) (594,319)
TOTAL STOCKHOLDERS' EQUITY 13,588,019 10,947,926
COMMITMENTS AND CONTINGENT
LIABILITIES
$225,082,029 156,555,663
See accompanying notes to consolidated financial statements.
FIRST BANCORP OF LOUISIANA, INC. AND SUBSIDIARIES
Consolidated Statements of Income
Years ended December 31, 1993, 1992, and 1991
1993 1992 1991
INTEREST INCOME
Loans $ 7,470,388 6,286,019 5,845,228
Investment
Securities:
U. S. Government
and Agency
Obligations 2,335,376 2,472,422 2,523,581
Mortgage-backed 1,618,751 1,668,749 1,587,823
Obligations of
states and
political
subdivisions 536,931 555,133 573,989
Other 723,870 798,813 631,160
Interest-bearing
deposits with
financial
institutions 100,337 131,584 323,943
Federal Funds
sold and other 206,532 146,539 385,977
TOTAL INTEREST
INCOME 12,992,185 12,059,259 11,871,701
INTEREST EXPENSE:
Deposits:
Time 2,955,949 3,400,329 4,985,181
Interest-bearing
demand accounts 983,959 975,395 1,163,020
Savings 368,954 361,915 431,118
Long-Term debt 376,688 185,786 318,789
Other 58,861 69,056 74,244
TOTAL INTEREST
EXPENSE 4,744,411 4,992,481 6,972,352
NET INTEREST
INCOME 8,247,774 7,066,778 4,899,349
Provision (reduction
of allowance)
for loan
losses (235,000) 710,000 432,000
NET INTEREST
INCOME AFTER
PROVISION FOR
LOAN LOSSES 8,482,774 6,356,778 4,467,349
<PAGE>
OTHER OPERATING INCOME
Customer
Service Charges 803,412 660,963 604,577
Investment Securities
Gains (losses),
net 90,030 59,527 (17,972)
Other Real Estate
Gains, net 110,210 63,226 26,475
Other 613,337 536,824 581,067
TOTAL OTHER
OPERATING INCOME 1,616,989 1,320,540 1,194,147
OTHER OPERATING EXPENSES
Salaries and
Employee Benefits 3,210,959 2,403,749 2,194,554
Occupancy and
Equipment 964,727 941,884 588,902
Other 2,187,842 1,788,475 1,535,132
TOTAL OTHER
OPERATING EXPENSES 6,363,528 5,134,108 4,318,588
INCOME BEFORE
TAX EXPENSE 3,736,235 2,543,210 1,342,908
Income Tax Expense 1,029,611 597,789 304,888
NET INCOME $2,706,624 1,945,421 1,038,020
Net income per share:
Average common
shares outstanding $ 13.00 9.11 4.67
Average common
shares outstanding
assuming full
dilution $ 11.58 8.15 4.18
See accompanying notes to consolidated financial statements.
FIRST BANCORP OF LOUISIANA, INC. AND SUBSIDIARIES
Consolidated Statements of Stockholders' Equity
Years ended December 31, 1993 and 1992
[CAPTION]
<TABLE>
Employee
Stock Total
Ownership Stock-
Common Capital Retained Treasury Plan holders'
Stock Surplus Earnings Stock Commitment Equity
<S> <C> <C> <C> <C> <C> <C>
Balances at December 31, 1990 $1,363,500 6,743,622 2,237,445 (1,228,654) (825,254) 8,290,659
Purchase of 3,878 shares of
common stock as treasury
stock - - - (93,718) - (93,718)
Cash dividends declared,
$.35 per share - - (89,583) 12,402 - (77,181)
Reduction of commitment to
ESOP - - - - 105,815 105,815
Net income - - 1,038,020 - 1,038,020
Balances at December 31, 1991 1,363,500 6,743,622 3,185,882 (1,309,970) (719,439) 9,263,595
Purchase of 11,285 shares of
common stock as treasury
stock - - - (281,400) - (281,400)
Cash dividends declared,
$.50 per share - - (110,717) 5,907 - (104,810)
Reduction of commitment to
ESOP - - - - 125,120 125,120
Net income - - 1,945,421 - - 1,945,421
Balances at December 31, 1992 1,363,500 6,743,622 5,020,586 (1,585,463) (594,319) 10,947,926
Purchase of 1,536 shares of
common stock as treasury
stock - - - (53,238) - (53,238)
Cash dividends declared,
$1.00 per share - - (207,612) - - (207,612)
Reduction of commitment to
ESOP - - - - 194,319 194,319
Net income - - 2,706,624 - - 2,706,624
Balances at December 31, 1993 $1,363,500 6,743,622 7,519,598 (1,638,701 (400,000) 13,588,019
</TABLE>
See accompanying notes to consolidated financial statements.
FIRST BANCORP OF LOUISIANA, INC. AND SUBSIDIARIES
Statements of Cash Flows
Years ended December 31, 1993, 1992, and 1991
1993 1992 1991
OPERATING ACTIVITIES:
Net Income $ 2,706,624 1,945,421 1,038,020
Adjustments to
reconcile net
income to net
cash provided
by operating
activities:
Provision (reduction
of allowance) for
loan losses (235,000) 710,000 432,000
Provision for
depreciation 328,069 453,101 273,117
Net amortization of
premium on
investment
securities 154,484 44,834 1,617
Deferred income
taxes 162,918 (376,239) (40,403)
Losses (gains) on
sales of investment
securities (90,030) (59,527) 17,972
Gains on sales of
premises and
equipment and
other assets (119,157) (64,403) (31,281)
Decrease in
accrued interest
receivable 598,996 92,053 58,756
Decrease (increase)
in other assets 248,496 (10,632) (44,401)
Increase (decrease)
in accrued interest
payable 33,565 (555,792) (10,889)
Increase (decrease)
in other
liabilities (635,890) (55,144) 202,116
NET CASH PROVIDED BY
OPERATING ACTIVITIES 3,153,075 2,123,672 1,896,624
INVESTING ACTIVITIES:
Net decrease in interest-
bearing deposits with
financial institutions 373 1,060,526 2,272,000
Proceeds from sales
of investment
securities 568,168 2,193,324 482,028
Proceeds from maturities
and principal paydowns
of investment
securities 30,132,787 14,611,400 9,783,826
Purchases of investment
securities (22,284,485) (20,957,384) (17,601,250)
Purchases of loans - - (4,273,050)
Net Increase in Loans (7,616,547) (10,526,270) (7,203,051)
Proceeds from sales of
premises and
equipment and
other assets 220,989 290,489 180,479
Purchases of premises
and equipment (244,253) (1,011,264) (99,068)
Cash paid to purchase
subsidiary bank (9,180,612) - -
Cash received from
acquisition 6,366,076 - -
NET CASH USED BY
INVESTING ACTIVITIES ( 2,037,504) (14,339,179) (16,458,086)
FINANCING ACTIVITIES:
Net Increase in
Deposits 6,563,555 5,044,047 21,584,755
Net (decrease)
increase in
obligations under
repurchase
agreements 186,261 481,565 (186,600)
Cash Dividends Paid ( 207,612) ( 104,810) ( 77,181)
Payments to acquire
treasury stock (53,238) (281,400) (93,718)
Proceeds from long-
term debt 8,500,000 850,000 2,048,168
Payments on long-
term debt (5,868,168) (1,360,000) (2,908,168)
Proceeds from Federal
Home Loan Bank
advances 4,006,000 - -
Payments on Federal
Home Loan Bank
advances (144,338) - -
NET CASH PROVIDED BY
FINANCING ACTIVITIES 12,982,460 4,629,402 20,367,256
INCREASE (DECREASE) IN CASH
& CASH EQUIVALENTS 14,098,031 (7,586,105) 5,805,794
CASH AND CASH
EQUIVALENTS AT
BEGINNING OF YEAR 12,640,310 20,226,415 14,420,621 <PAGE>
CASH AND CASH
EQUIVALENTS AT
END OF YEAR 26,738,341 12,640,310 20,226,415
See accompanying notes to consolidated financial statements.
FIRST BANCORP OF LOUISIANA, INC. AND SUBSIDIARIES
Notes to Consolidated Financial Statements
(1) Business and Summary of Significant Accounting Policies
Business - First Bancorp of Louisiana, Inc. ("First Bancorp") is
incorporated under the laws of the State of Louisiana as a bank
holding company. First Bancorp, through its subsidiary banks,
provides a full range of banking services to individual and
corporate customers in northeast Louisiana. First Bancorp and its
subsidiary banks are subject to regulations of certain federal
agencies and undergo periodic examinations by those regulatory
authorities.
Principles of Consolidation and Basis of Presentation - The
consolidated financial statements include the results of operations
of First Bancorp and First National and its subsidiary, First
National Computer Center, Inc. for the three year period ended
December 31, 1993, and the results of operations of Southern
National Bank at Tallulah since August 31, 1993, its date of
acquisition (See note 2). All significant intercompany balances
and transactions have been eliminated in consolidation.
The consolidated financial statements have been prepared in
conformity with generally accepted accounting principles. In
preparing the consolidated financial statements, management is
required to make estimates and assumptions that affect the reported
amounts of assets and liabilities as of the date of the balance
sheet and income and expenses for the period. Actual results could
differ significantly from those estimates.
Material estimates that are particularly susceptible to significant
change relate to the determination of the allowance for loan losses
and the valuation of other real estate acquired in connection with
foreclosures or in satisfaction of loans. In connection with the
determination of the allowances for loan losses and the valuation
of other real estate, management obtains independent appraisals for
significant properties.
Cash and Cash Equivalents - For purposes of reporting cash flows,
cash and cash equivalents include cash on hand, amounts due from
banks, and federal funds sold. Generally, federal funds are sold
for one-day periods.
Investment Securities - Investment securities are carried at cost
adjusted for accretion of discount and amortization of premium on
a constant yield basis to maturity. Gains or losses on the sale of
investment securities are based upon the adjusted cost of the
specific security sold.
All investments in debt securities held by First Bancorp are
classified in the accompanying financial statements as investment
securities based on management's ability and intention to hold such
securities for the foreseeable future.
The amortization of premiums and discounts on mortgage-backed
securities and collateralized mortgage obligations are periodically
adjusted to reflect the actual prepayment experience on the
underlying mortgage loans.
In May 1993, the Financial Accounting Standards Board (FASB) issued
Statement of Financial Accounting Standards No. 115, Accounting for
Certain Investments in Debt and Equity Securities. Statement 115
addresses the accounting and reporting for investments in equity
securities that have readily determinable fair values and for all
investments in debt securities. Statement 115 is effective for
fiscal years beginning after December 15, 1993, and must be adopted
prospectively. First Bancorp will adopt Statement 115 effective
January 1, 1994. While management has not made a final
determination of the impact of adopting Statement 115, First
Bancorp expects its stockholders' equity to increase for a portion
of the net unrealized gains reflected in note 3, net of tax, on
securities that will be classified as available for sale. There
will be no effect from adopting Statement 115 on First Bancorp's
results of operation.
Loans - Loans are stated at the principal amount outstanding with
appropriate reduction for unearned discount and the allowance for
loan losses.
Interest on commercial, real estate, and installment loans is
accrued as earned. Accrual of interest is discontinued on a loan
when management believes, after considering economic and business
conditions and collection efforts, that the borrower's financial
condition is such that the collection of interest is uncertain.
Normally, loans are reviewed for placement in a noninterest-
accruing status when the principal or interest has been billed and
uncollected for a period of ninety days. Generally, when a loan is
placed on nonaccrual status, any interest previously accrued but
not collected is reversed unless the collateral for the loan is
sufficient to cover the accrued interest or a guarantor assures
payment of interest.
In May 1993, the FASB issued Statement of Financial Accounting
Standards No. 114, Accounting by Creditors for Impairment of a
Loan. Statement 114 addresses recognition criteria for loan
impairment and the measurement methods for certain impaired and
restructured loans. If it is probable that a creditor will be
unable to collect all principal and interest due, then impairment
is measured by (1) the present value of expected future cash flows
discounted at the loan's original effective interest rate, (2)
market price of impaired loan, or (3) fair value of collateral.
Statement 114 is effective for fiscal years beginning after
December 15, 1994, and must be adopted prospectively. Management
has not determined the effect of adopting Statement 114 on its
financial position or results of operations.
Allowance for Loan Losses - The allowance for loan losses is
maintained at a level believed adequate by management to absorb
potential loan losses. Management's determination of the adequacy
of the allowance is based on an evaluation of the relative risks
inherent in the loan portfolio, taking into consideration the
nature, volume, and quality of the portfolio, specific problem
loans, past credit loss experience, current and future economic
conditions, results of internal review procedures, and other
relevant factors. The provision for loan losses is charged to
expense and loans charged off, net of recoveries, are charged
directly to the allowance.
While management uses available information to recognize losses on
loans, future additions to the allowance may be necessary based on
changes in economic conditions. In addition, various regulatory
agencies, as an integral part of their examination process,
periodically review First Bancorp's allowance for loan losses.
Such agencies may require First Bancorp to recognize additions to
the allowances based on their judgments about information available
to them at the time of their examination.
Premises and Equipment - First Bancorp premises and equipment are
stated at acquisition cost, less accumulated depreciation and
amortization. Depreciation is computed on the straight-line method
over the estimated useful lives of the assets. Leasehold
improvements are amortized on a straight-line basis over the life
of the respective lease or the estimated useful lives of the
improvements, whichever is shorter. Maintenance and repairs are
charged to operating expense and renewals and betterments are
capitalized. Gains or losses on dispositions are reflected
currently in the statement of income.
Income Taxes - First Bancorp and its subsidiary banks file a
consolidated federal tax return. Income taxes and benefits are
allocated based on each company's contribution to the total federal
tax liability.
Effective January 1, 1993, First Bancorp adopted the provisions of
Statement of Financial Accounting Standards No. 109, Accounting for
Income Taxes. Under the asset and liability method of Statement
109, deferred tax assets and liabilities are recognized for the
future tax consequences attributable to differences between the
financial statement carrying amounts of existing assets and
liabilities and their respective tax bases and operating loss and
tax credit carryfowards. Deferred tax assets and liabilities are
measured using enacted tax rates expected to apply to taxable
income in the years in which those temporary differences are
expected to be recovered or settled. Under Statement 109, the
effect on deferred tax assets and liabilities of a change in tax
rates is recognized in income in the period that includes the
enactment date. The impact of the adoption of Statement 109 was
not significant and accordingly a cumulative effect of a change in
accounting principle is not reflected in the consolidated statement
of income for 1993.
Prior to 1993, First Bancorp accounted for its income taxes in
accordance with APB Opinion No. 11. Pursuant to the deferred
method under APB Opinion 11, deferred income taxes were recognized
for income and expense items that are reported in different years
for financial reporting purposes and income tax purposes using the
tax rate applicable in the year of the calculation. Under the
deferred method, deferred taxes are not adjusted for subsequent
changes in tax rates.
Other Real Estate - Other real estate and repossessed assets of
$114,000 and $144,000 are included in other assets in the
consolidated financial statements at December 31, 1993 and 1992,
respectively, and consist of properties acquired in satisfaction of
uncollectible loans. These properties are carried at the lower of
acquisition cost or fair value based on their appraised value at
the date acquired less selling costs. Any write-down required from
the loan receivable to acquisition cost or fair value at the date
of foreclosure is charged to the allowance for loan losses.
Subsequent gains or losses on the sale of these properties are
credited or charged to earnings while losses resulting from
periodic valuation of these properties are charged to earnings.
Net Income Per Share - Net income per average share outstanding is
calculated based on the weighted average number of shares
outstanding during the year. The average number of shares
outstanding during 1993, 1992, and 1991 was 208,258, 213,587, and
222,248, respectively. Net income per average share outstanding
assuming full dilution also considers the impact of conversion of
First Bancorp's subordinated debentures into common shares as of
the beginning of each year. The average number of shares
outstanding during 1993, 1992, and 1991 assuming full dilution was
238,322, 245,530, and 264,353, respectively.
Reclassifications - Certain prior year amounts have been
reclassified to conform to the 1993 presentation.
(2) Acquisition
On August 31, 1993, First Bancorp acquired 100% of the outstanding
common stock of Southern National Bank at Tallulah ("Southern") for
a total cost of $9,181,000. The acquisition was accounted for as a
purchase. The fair values of net assets acquired approximated the
purchase price at date of acquisition, accordingly no goodwill was
recorded as a result of the acquisition. At the date of
acquisition, Southern had approximately $62,620,000 of assets,
which included $21,034,000 of loans, $33,662,000 of investments,
$6,366,000 of cash and cash equivalents, and $1,558,000 of other
assets. Additionally, Southern had $52,176,000 of deposits,
$1,263,000 of other liabilities, and $9,181,000 in stockholders'
equity.
The following unaudited pro forma information reflects results of
operations for the years 1993 and 1992, as though the acquisition
had occurred as of January 1, 1992:
1993 1992
(unaudited)
Total interest income $15,935,341 16,928,628
Net interest income $10,084,403 9,900,520
Net income $ 3,167,804 2,774,155
Net income per common share $ 15.21 12.99
Net income per common share assuming
full dilution $ 13.51 11.53
(3) Proposed Merger with Hibernia Corporation
On November 4, 1993, First Bancorp entered into an agreement with
Hibernia Corporation (Hibernia) whereby the shareholders of First
Bancorp will receive a certain number of Hibernia shares of common
stock based upon the fair value of the Hibernia stock at the
agreement's closing date. It is anticipated that First Bancorp's
convertible subordinated debentures will be converted into First
Bancorp common stock pursuant to the terms of the debenture
agreements prior to the merger. At the time the merger with
Hibernia is closed, First Bancorp's notes payable will become due
and payable.
Completion of the merger is subject to regulatory approvals and
approval of the shareholders of First Bancorp.
(4) Cash and Due From Banks
The subsidiary banks are members of the Federal Reserve System and
are required to maintain reserve balances in accordance with
Federal Reserve Bank requirements. Included in cash and due from
banks are reserve requirements of $1,242,000 and $877,000 at
December 31, 1993 and 1992, respectively.
(5) Investment Securities
The amortized cost and estimated market values of investments in
debt securities at December 31, 1993 and 1992, are as follows:
December 31, 1993
GROSS GROSS
AMORTIZED UNREALIZED UNREALIZED MARKET
COST GAINS LOSSES VALUE
U. S. Treasury
Securities and
Obligations of
Other U. S.
Government
Agencies and
Corporations 42,566,411 783,848 (33,793) 43,316,466
Obligations of
States and
Political
Subdivisions 9,478,349 602,746 (4,547) 10,076,548
Corporate
Securities 8,523,704 190,043 - 8,713,747
Other Securities 1,220,018 - (325) 1,219,693
61,788,482 1,576,637 (38,665) 63,326,454
Mortgage-backed
Securities 32,607,926 547,644 (101,616) 33,053,954
TOTAL $94,396,408 2,124,281 (140,281) 96,380,408
December 31, 1992
GROSS GROSS
AMORTIZED UNREALIZED UNREALIZED MARKET
COST GAINS LOSSES VALUE
U. S. Treasury
Securities and
Obligations of
Other U. S.
Government
Agencies and
Corporations 31,065,082 1,057,409 - 32,122,491
Obligations of
States and
Political
Subdivisions 6,099,710 424,065 - 6,523,775
Corporate
Securities 9,055,433 289,355 - 9,344,788
Other Securities 1,225,914 4,637 - 1,230,551
47,446,139 1,775,466 - 49,221,605
Mortgage-backed
Securities 21,769,377 592,928 (56,328) 22,305,977
TOTAL $69,215,516 2,368,394 (56,328) 71,527,582
The amortized cost and estimated market value of debt securities a
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.
ESTIMATED
AMORTIZED MARKET
COST VALUE
Due in One Year or Less 26,944,000 27,370,348
Due After One Year Through Five Years 24,246,109 24,779,886
Due After Five Years Through Ten Years 7,122,459 7,528,472
Due After Ten Years 3,475,914 3,647,748
61,788,482 63,326,454
Mortgage-backed securities 32,607,926 33,053,954
TOTAL 94,396,408 96,380,408
Proceeds from sales of investment securities during 1993 were
$570,000. Gross gains of $90,000 were realized on those sales.
Proceeds from sales of investment securities during 1992 were
$2,193,000, which resulted in gross gains of $60,000. Proceeds
from sales of investment securities during 1991 were $482,000,
which resulted in gross losses of $18,000.
Investments in debt securities having an amortized cost of
$35,523,000 and $21,164,000 at December 31, 1993 and 1992,
respectively, were pledged to secure public funds on deposit and
for other purposes as required or permitted by law.
(6) Loans and Allowance for Loan Losses
The composition of First Bancorp loan portfolio at December 31,
1993 and 1992, is as follows:
1993 1992
Commercial, industrial,
and agricultural 31,853,101 22,609,889
Real Estate - Mortgage 51,830,849 38,811,613
Real Estate - Construction 5,775,000 4,449,000
Installment Loans to
Individuals 10,735,015 5,844,216
Total 100,193,965 71,714,718
Less:
Allowance for
loan losses (1,413,027) (1,983,588)
Unearned Discount (418,873) (167,662)
Loans, Net 98,362,065 69,563,468
At December 31, 1993 and 1992, First Bancorp had discontinued the
accrual of interest on loans aggregating approximately $863,000 and
$1,513,000, respectively. Net interest income for 1993 and 1992
would have been higher by approximately $108,000 and $167,000,
respectively, had interest been accrued at contractual rates on
these nonperforming loans.
Changes in the allowance for loan losses for the years ended
December 31, 1993, 1992, and 1991 are summarized as follows:
1993 1992 1991
Balance, January 1 1,983,588 1,415,131 1,299,786
Allowance for loan losses
acquired from acquisition
of Southern 332,450 _ _
Provision (reduction of
allowance) for loan losses (235,000) 710,000 432,000
Loans Charged Off (829,032) (217,336) (406,327)
Recoveries on loans
previously charged off 161,021 75,793 89,672
Balance, December 31 $1,413,027 1,983,588 1,415,131
During 1993, 1992, and 1991, First Bancorp reduced loans through
the repossession of other real estate and assets in the amount of
approximately $85,000, $134,000, and $62,000, respectively. Also
during 1990, $918,000 of First Bancorp common stock representing
35,437 shares was received by First National in lieu of repayment
on a loan. First Bancorp purchased 11,813 shares of this stock
from First National for $296,000 during 1993, 11,812 shares of this
stock for $308,000 during 1992, and 11,812 shares of this stock for
$314,000 during 1991. This stock is reflected as treasury stock in
the accompanying First Bancorp balance sheet since its
repossession.
(7) Premises and Equipment
Premises and equipment at December 31, 1993 and 1992, are
summarized as follows:
Estimated
Useful 1993 1992
Life
Land - 559,700 424,417
Buildings and
Leasehold Improvements 5-40 years 2,124,569 1,593,545
Furniture, Fixtures and
Equipment 3-10 years 2,560,402 1,651,808
Automobiles 2-3 years 187,231 133,154
5,431,902 3,802,924
Less Accumulated
Depreciation and
Amortization (3,429,639) (2,162,625)
Premises and Equipment, Net $ 2,002,263 $ 1,640,299
(8) Time Deposits
Included in time deposits at December 31, 1993 and 1992, are
$23,277,000 and $10,750,000, respectively, of certificates of
deposits in denominations of $100,000 or more. Interest on
certificates of $100,000 or more amounted to $792,000, $465,000,
and $768,000 in 1993, 1992, and 1991, respectively.
(9) Long-Term Debt and Federal Home Loan Bank Advances
Long-term debt and Federal Home Loan Bank advances outstanding at
December 31, 1993 and 1992, consist of the following:
1993 1992
Notes payable to an unaffiliated bank
in quarterly principal installments
of $90,000 plus interest at a New
York bank's prime rate plus 1%
through 1997 $ - $1,008,168
Note payable to an unaffiliated
bank in quarterly principal
installments of $110,000 plus
interest at a New York bank's
prime rate plus 1% (7% at
December 31, 1993) through
2003 3,690,000 -
Convertible subordinated
debentures payable; interest
due semiannually at 10% due
2002 800,000 850,000
Employee Stock Ownership Plan
commitment consisting of a
note payable to an unaffiliated
bank in quarterly principal
installments of $31,280 through
1997 plus interest at 97% of a
New York bank's prime rate (5.8%
at December 31, 1993) 400,000 594,319
4,890,000 2,452,487
Federal Home Loan Bank advances 3,861,662 -
$8,751,662 $2,452,487
The note payable to an unaffiliated bank of $3,690,000 at December
31, 1993, is collateralized by the common stock of the subsidiary
banks. The loan agreement places certain restrictions on First
Bancorp with respect to dividends, other distributions to
stockholders, future borrowings, issuance of common stock, sale of
stock of subsidiaries, and other matters. In addition, the loan
agreement related to the Employee Stock Ownership Plan commitment
contains similar restrictions.
During 1992, First Bancorp repurchased the subordinated debentures
which were outstanding at December 31, 1991. In a separate
transaction, First Bancorp issued $850,000 in convertible,
subordinated debentures to certain directors and officers and
others. The terms of the new debentures are the same as the
original debentures with the exception of a change in the
conversion price. During 1993, First Bancorp repurchased $50,000
of these debentures from one debenture holder.
The holders of subordinated debentures may elect, upon maturity, to
convert the debentures into shares of First Bancorp common stock at
the conversion price of $26.61 per share or receive cash equal to
the principal amount of the debentures plus accrued interest.
Also, at the option of the holder, the debentures are convertible
into common stock at the conversion price at any time prior to
maturity. At the option of First Bancorp, the debentures may be
redeemed for cash equal to the principal amount of the debentures
plus accrued interest at any time prior to maturity.
The aggregate scheduled principal payments of long-term debt
including the ESOP commitment for the next five years and
thereafter are as follows:
1994 $565,120
1995 565,120
1996 565,120
1997 464,640
1998 440,000
Thereafter 2,290,000
The scheduled maturities do not include special annual principal
payments commencing in March 1995 on the note payable to an
unaffiliated bank. The additional principal payments are to be
paid in an amount equal to the product of the First Bancorp's net
income for the prior year, less all debt service payments made with
respect to the note during the year, multiplied by fifty percent.
The above schedule also does not consider any pre-payments which
can be made at the discretion of First Bancorp.
The advances from the Federal Home Loan Bank were obtained to fund
certain loans made by First Bancorp. The balance of loans which
secure the advances amounted to $3,899,000 at December 31, 1993.
The advances accrue interest at contractual rates of 5.7% to 6.3%
per annum and are due in monthly installments of approximately
$39,000, including interest. The advances are scheduled to
amortize through various dates between 2002 and 2008. However,
should the loans for which the advances were obtained pay down at
a faster rate than anticipated, then the advances are to be paid
down at a correspondingly faster rate.
(10) Income Taxes
Effective January 1, 1993, First Bancorp adopted Statement 109.
The cumulative effect of this change in accounting for income taxes
determined as of January 1, 1993, was not significant and
accordingly a cumulative effect of change in accounting principle
is not reflected in the consolidated statement of income for the
year ended December 31, 1993. Prior year's financial statements
have not been restated to apply the provisions of Statement 109.
Federal income tax expense (benefit) applicable to net income for
the years ended 1993, 1992, and 1991, is as follows:
1993 1992 1991
Current expense $ 866,693 974,028 345,291
Deferred expense (benefit) 162,918 (376,239) ( 40,403)
$1,029,611 597,789 304,888
The significant components of deferred income tax expense (benefit)
for the years ended December 31, 1992 and 1991, are as follows:
1992 1991
Depreciation and amortization $(66,013) 196
Net accretion of discount on
investment securities 1,947 19,162
Provision for loan losses (193,275) (39,217)
Effect of Alternative Minimum Tax (116,768) _
Other (2,130) (20,544)
Deferred income tax expense (benefit) $(376,239) (40,403)
A reconciliation of the expected federal income tax expense
[computed by applying the federal corporate income tax rate of 34%
in 1993, 1992, and 1991 to pretax income (loss)] to actual income
tax benefit follows:
1993 1992 1991
Expected federal income
tax expense $1,270,319 864,692 456,589
Tax-exempt income (136,364) (142,184) (146,050)
Utilization of Alternative
Minimum Tax credit
carryforward (46,861) (116,768) -
Other (57,483) (7,951) (5,651)
Actual income tax $1,029,611 597,789 304,888
Effective tax rate 27.6% 23.5% 22.7%
The tax effects of temporary differences that give rise to
significant portions of the deferred tax assets and deferred tax
liabilities at December 31, 1993, are presented below:
Deferred tax assets:
Premises and equipment - depreciation $ 60,423
Allowance for loan losses 74,867
Other real estate 22,279
Total gross deferred tax assets 157,569
Less valuation allowance -
Net deferred tax assets 157,569
Deferred tax liabilities - investment securities 38,170
Total deferred tax liabilities 38,170
Net deferred tax asset $119,399
No valuation allowance was recorded against the gross deferred tax
asset because management believes that it is more likely than not
the gross deferred tax asset will be realized in full. First
Bancorp based its conclusion on various factors, including ongoing
profitable operations as well as significant taxes available in the
carryback period. There was no change in the valuation allowance
during 1993.
At December 31, 1993, current income taxes payable of $32,000 was
included in other liabilities, while at December 31, 1992, current
income taxes payable of $74,000 was included in other liabilities.
At December 31, 1993 and 1992, deferred tax assets of $119,000 and
$382,000, respectively, were included in other assets.
(11) Employee Benefit Plans
First Bancorp maintains an Employee Stock Ownership Plan (ESOP).
The Plan covers substantially all employees who qualify as to age
and length of service. A participant's interest in his or her
account becomes totally vested after completion of five years of
service. Contributions to the ESOP are at the discretion of the
Board of Directors of First Bancorp; however, contributions,
including dividends received from First Bancorp, must be sufficient
to pay any current obligations of the ESOP. Expense related to the
ESOP of $466,000, $135,000, and $154,000 is included in salaries
and employee benefits in the consolidated statements of income for
the years ended December 31, 1993, 1992, and 1991, respectively.
On October 15, 1993, Plan management elected to allocate additional
shares to participant accounts up to the maximum permissible amount
as determined by the Internal Revenue Code effective for the Plan
year ended December 31, 1992. Under this new amendment, an
additional 6,914 shares and 6,339 shares were allocated to
participant accounts for the Plan years ended December 31, 1993 and
1992, respectively.
At December 31, 1993 and 1992, the ESOP had outstanding a note
payable to an unaffiliated bank in the amount of $400,000 and
$594,000, respectively, which is guaranteed by First Bancorp.
Interest on this debt amounted to $32,000, $41,000, and $69,000,
during the years ended December 31, 1993, 1992, and 1991,
respectively. All interest payments were made by the ESOP. At
December 31, 1993, the borrowing is secured by 16,842 shares of
First Bancorp's common stock and is payable in quarterly
installments of $31,280 through 1997, plus interest at 97% of a New
York bank's prime rate (5.8% at December 31, 1993).
At December 31, 1993 and 1992, the ESOP owned 66,274 and 67,810
shares, respectively, of First Bancorp common stock.
(12) Regulatory Matters
Applicable federal regulations impose restrictions on the amounts
of dividends that may be declared by First Bancorp and its
subsidiary banks. In addition to the formal statutes and
regulations, regulatory authorities also consider the adequacy of
total capital in relation to assets, deposits, and other such
items. Capital adequacy considerations could further limit the
availability of dividends from the subsidiary banks to First
Bancorp.
National banks are required to obtain approval of the Comptroller
of the Currency if dividends declared in any year exceed the
profits of that year combined with the net retained profits of the
preceding two years. During 1993, 1992, and 1991, the subsidiary
banks paid dividends to First Bancorp totaling $6,790,000,
$850,000, and $1,200,000, respectively. For First National, prior
approval of the regulatory authorities will be required during
1994, if the amount to be paid as dividends exceeds profits for the
same period plus $1,190,000 available for payment at December 31,
1993. Regulatory approval will be required during 1994 for
Southern to pay any dividends.
The Federal Deposit Insurance Corporation Improvement Act of 1991
("FDICIA") was signed into law on December 19, 1991. The prompt
corrective actions of FDICIA place restrictions on any insured
depository institution that does not meet certain requirements,
including minimum capital ratios. The restrictions are based on an
institution's FDICIA defined capital category and become
increasingly more severe as an institution's capital category
declines. In addition to the prompt corrective action
requirements, FDICIA includes significant changes to the legal and
regulatory environment for insured depository institutions,
including reductions in insurance coverage for certain kinds of
deposits, increased supervision by the federal regulatory agencies,
increased reporting requirements for insured institutions, and new
regulations concerning internal controls, accounting, and
operations.
The prompt corrective action regulations define specific capital
categories based on an institution's capital ratios. The capital
categories, in declining order, are "well capitalized," "adequately
capitalized," "undercapitalized," "significantly undercapitalized,"
and "critically undercapitalized." To be considered "well
capitalized," an institution is required to have at least a 5%
leverage ratio, a 6% Tier I risk-based capital ratio, and a 10%
total risk-based capital ratio. However, the regulatory agencies
may impose higher minimum standards on individual institutions or
may downgrade an institution from one category because of safety
and soundness concerns.
At December 31, 1993, First Bancorp's leverage ratio was 6.1%, Tier
I risk-based ratio was 11.0%, and a total risk-based ratio was
12.8%.
(13) Related Parties
First Bancorp enters into various loans and other transactions in
the ordinary course of business with its directors, executive
officers, and some of their related business interests. The loans
and other transactions are made on substantially the same terms as
those prevailing at the time for comparable loans and similar
transactions with other persons. Certain officers and directors
and entities in which these individuals were principals were
indebted to First Bancorp in the aggregate amount (net of
participation loans sold) of $2,087,000 and $1,874,000 at December
31, 1993 and 1992, respectively. During 1993, First Bancorp loaned
$678,000 in new loans to these individuals and recorded $857,000 in
reductions.
(14) Supplemental Cash Flow Information
During 1993, 1992, and 1991, First Bancorp paid to depositors and
other banks interest payments of $5,645,000, $5,548,000, and
$6,983,000, respectively. Also during 1993, 1992, and 1991, First
Bancorp paid to the Internal Revenue Service $975,000, $1,019,000,
and $255,000 in tax payments, respectively.
(15) Fair Value of Financial Instruments
Statement of Financial Accounting Standards No. 107, Disclosures
about Fair Value of Financial Instruments, requires that First
Bancorp disclose estimated fair values for its financial
instruments. Fair value estimates, methods, and assumptions are
set forth below for First Bancorp's financial instruments.
Cash and Cash Equivalents and Other Short-Term Investments - For
those short-term investments, the carrying amount is a reasonable
estimate of fair value.
Investment Securities _ The fair value, which approximates the
estimated market values, of longer-term investments and mortgage-
backed securities, except certain state and municipal securities,
is estimated based on bid prices published in financial newspapers
or bid quotations received from securities dealers. The fair
value, which approximates the estimated market values, of certain
state and municipal securities is not readily available through
market sources other than dealer quotations, so fair value
estimates are based on quoted market prices of similar instruments,
adjusted for differences between the quoted instruments and the
instruments being valued.
Loan Receivables - Fair values are estimated for portfolios of
loans with similar financial characteristics. Loans are segregated
by type such as commercial, commercial real estate, residential
mortgage, and consumer. The carrying amount of performing loans
that were funded or will mature within three months of the balance
sheet date approximate the fair value of those loans.
Additionally, the carrying amount of adjustable rate loans that
reprice within ninety days also approximate the fair value of those
loans. The fair value of the remaining performing and
nonperforming loans is calculated by discounting scheduled cash
flows through the estimated maturity using estimated market
discount rates that reflect the credit and interest rate risk
inherent in the loan. The estimate of maturity is based on First
Bancorp's historical experience with repayments for each loan
classification, modified, as required, by an estimate of the effect
of current economic and lending conditions.
Deposit Liabilities and Repurchase Agreements - The fair value of
deposits with no stated maturity, such as noninterest-bearing
demand deposits, savings, NOW accounts, money market accounts, and
repurchase agreements, is equal to the amount payable. The fair
value of time deposits is based on the discounted value of
contractual cash flows. The discount rate is estimated using the
rates currently offered for deposits of similar remaining
maturities.
Long-Term Debt and Federal Home Loan Bank Advances - The carrying
amount of First Bancorp's long-term debt approximates fair value as
the note payable to a bank and the Employee Stock Ownership Plan
commitment adjust for changes in current interest rates.
Additionally, the carrying amount of First Bancorp's subordinated
debentures also approximate fair value as management of First
Bancorp has determined that the original terms in which the
subordinated debentures were issued would not be significantly
different from the terms of new debentures if such were to be
issued at each year end.
Interest Accruals - The fair value of First Bancorp's accrued
interest receivable and accrued interest payable amounts
approximate their carrying value due to the short maturity of these
financial instruments.
<PAGE>
The estimated fair values of First Bancorp's financial instruments
at December 31, 1993 and 1992, are as follows:
1993 1992
Carrying Estimated Carrying Estimated
Amount Fair Value Amount Fair Value
Financial assets:
Cash and due
from banks $ 10,963,341 10,963,341 11,815,310 11,815,310
Federal funds
sold and
other
temporary
investments 15,775,000 15,775,000 825,000 825,000
Interest-bearing
deposits with
financial
institutions 1,077,101 1,077,101 1,077,474 1,077,474
Investment
securities 94,396,408 96,380,408 69,215,516 71,527,582
Loans, net 98,362,065 99,269,088 69,563,468 70,090,806
Accrued interest
receivable 1,876,458 1,876,458 1,518,937 1,518,937
Financial liabilities:
Deposits:
Demand,
noninterest-
bearing 33,067,489 33,067,489 26,975,743 26,975,743
Interest-
bearing
demand
accounts 47,460,816 47,460,816 33,391,507 33,391,507
Savings 18,455,891 18,455,891 11,772,828 11,772,828
Time 100,550,732 100,739,001 68,654,612 68,983,458
Long-term debt 4,890,000 4,890,000 2,452,487 2,452,487
Federal Home Loan
Bank advances 3,861,662 3,861,662 - _
Accrued interest
payable 622,867 622,867 350,295 350,295
Securities sold
under agreements
to repurchase 2,021,249 2,021,249 1,700,513 1,700,513
Fair value estimates are made at a specific point in time, based on
relevant market information and information about the financial
instrument. These estimates do not reflect any premium or discount
that could result from offering for sale at one time First
Bancorp's entire holdings of a particular financial instrument.
Because no market exists for a significant portion of First
Bancorp's financial instruments, fair value estimates are based on
judgments regarding future expected loss experience, current
economic conditions, risk characteristics of various financial
instruments, and other factors. These estimates are subjective in
nature and involve uncertainties and matters of significant
judgment and therefore cannot be determined with precision.
Changes in assumptions could significantly affect the estimates.
Fair value estimates are based on existing on- and off-balance
sheet financial instruments, without attempting to estimate the
value of anticipated future business and the value of assets and
liabilities that are not considered financial instruments.
(16) Financial Instruments With Off-Balance Sheet Risk
First Bancorp is a party to 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. Those
instruments involve, to varying degrees, elements of credit risk in
excess of the amount recognized in the balance sheet. The
contractual or notional amounts of those instruments reflect the
extent of involvement First Bancorp has in particular classes of
financial instruments.
First Bancorp'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 or notional amount of those
instruments. First Bancorp uses the same credit policies in making
commitments and conditional obligations as it does for on-balance
sheet instruments.
Contractual or
Notional Amount
at December 31, 1993
Financial instruments whose contract
amounts represent credit risk:
Aggregate commitments to extend credit $ 7,778,333
Less amounts previously funded (2,617,678)
Net commitments unfunded $ 5,160,655
Standby letters of credit $ 964,238
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
many of the commitments are expected to expire without being drawn
upon, the total commitment amounts 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 deemed necessary by First Bancorp upon extension of
credit is based on management's credit evaluation of the
counterparty. Collateral held varies but may include accounts
receivable; inventory; property, plant, and equipment; real estate;
and income-producing commercial properties.
Standby letters of credit are conditional commitments issued by
First Bancorp to guarantee the performance of a customer to a third
party. Those guarantees are primarily issued to support public and
private short-term borrowing arrangements. The credit risk
involved in issuing letters of credit is essentially the same as
that involved in extending loan facilities to customers. First
Bancorp holds collateral supporting those commitments for which
collateral is deemed necessary.
17) Concentration of Credit Risk
First Bancorp grants real estate, commercial, industrial,
agricultural, and other loans to customers primarily in northeast
Louisiana. Although First Bancorp has a diversified loan
portfolio, a substantial portion (approximately 58%) of its loans,
although not always funded for such purpose, are secured by real
estate and its ability to fully collect its loans is dependent upon
the real estate market in this region. First Bancorp typically
requires collateral sufficient in value to cover the principal
amount of the loan. Such collateral is evidenced by mortgages on
property held and readily accessible to First Bancorp.
(18) Parent Company Only Condensed Financial Information
The financial information below summarizes the financial position,
results of operations, and cash flows for First Bancorp of
Louisiana, Inc. (parent company only) as of and for the years ended
December 31, 1993 and 1992, and for each year in the three year
period ended December 31, 1993.
<PAGE>
Balance Sheets
(Parent Only)
December 31, 1993 and 1992
Assets 1993 1992
Cash $ 181,885 793,069
Investment in subsidiaries 18,205,750 12,854,630
Other assets 152,720 183,346
Total assets $18,540,355 13,831,045
Liabilities and Stockholders' Equity
Liabilities:
Long-term debt $ 4,890,000 2,452,487
Payable to subsidiary bank _ 295,781
Accrued interest payable 50,336 34,923
Other liabilities 12,000 99,928
Total liabilities 4,952,336 2,883,119
Stockholders' equity:
Common stock 1,363,500 1,363,500
Capital surplus 6,743,622 6,743,622
Undivided profits 7,519,598 5,020,586
Treasury stock (1,638,701) (1,585,463)
Employee Stock Ownership
Plan commitment (400,000) (594,319)
Total stockholders' equity 13,588,019 10,947,926
Total liabilities and
stockholders' equity $18,540,355 13,831,045
<PAGE>
Statements of Income
(Parent Only)
Years ended December 31, 1993, 1992 and 1991
1993 1992 1991
Dividends $6,790,000 850,000 1,200,000
Interest income 7,915 22,286 79,478
Interest expense-long-term debt 206,440 185,786 318,789
Operating expenses (213,791) (43,771) (54,486)
Income before income tax
benefit and equity in
undistributed earnings of
subsidiaries 6,377,684 642,729 906,203
Income tax benefit 158,432 138,162 106,802
Income before equity in
undistributed earnings of
subsidiaries 6,536,116 780,891 1,013,005
Equity in undistributed earnings
(distributions in excess
of earnings) of subsidiaries (3,829,492) 1,164,530 25,015
Net income $2,706,624 1,945,421 1,038,020
<PAGE>
Statements of Cash Flows
(Parent Only)
Years ended December 31, 1993, 1992 and 1991
1993 1992 1991
Operating activities:
Net income $2,706,624 1,945,421 1,038,020
Adjustments to reconcile
net income to net cash
used by operating
activities:
Equity in earnings
of subsidiary (2,960,508) (2,014,530) (1,225,015)
Decrease in payable
to subsidiary bank (295,781) (307,704) (314,199)
Decrease (increase) in
other assets 30,626 21,477 (105,945)
Increase (decrease) in
accrued interest
payable 15,413 (9,753) (12,045)
Decrease (increase) in
other liabilities (87,928) (128,354) 83,385
Net cash used by
operating activities (591,554) (493,443) (535,799)
Investing activities:
Cash paid to purchase
subsidiary bank (9,180,612) - -
Dividends received from
subsidiary banks 6,790,000 850,000 1,200,000
Net cash provided
(used) by investing
activities (2,390,612) 850,000 1,200,000
Financing activities:
Cash dividends paid (207,612) (104,810) (77,181)
Proceeds from long-term
debt 8,500,000 850,000 2,048,168
Payments on long-term
debt (5,868,168) (1,360,000) (2,908,168)
Payments to acquire
treasury stock (53,238) (281,400) (93,718)
Net cash provided
(used) by financing
activities 2,370,982 (896,210) (1,030,899)
Net decrease in cash (611,184) (539,653) (366,698)
Cash at beginning of year 793,069 1,332,722 1,699,420
Cash at end of year $181,885 793,069 1,332,722
<PAGE>
FIRST BANCORP OF LOUISIANA, INC. AND SUBSIDIARIES
Consolidated Balance Sheets
Unaudited ($ in thousands)
March 31, March 31,
Assets 1994 1993
Cash and due from banks $10,893 $6,731
Federal funds sold and securities purchased
under agreements to resell 5,200 4,750
Total Cash and Cash Equivalents $16,093 $11,481
Interest-bearing deposits with financial
institutions 784 1,078
Investment securities - 62,480
Securities available for sale 63,003 -
Securities held to maturity 36,393 -
Loans, (net of allowance for loan losses of
$1,390 and 1,973 at March 31, 1994 and 1993
respectively) 97,728 72,537
Premises and equipment, net 1,963 1,594
Accrued interest receivable 1,916 1,787
Real Estate Owned 117 219
Other assets 1,279 825
Total Assets $219,276 $152,001
Liabilities and Stockholders' Equity
Deposits
Demand, noninterest bearing $29,875 $21,561
Money Market and NOW accounts 46,220 32,595
Savings 19,859 11,989
Time $97,278 $68,378
Total Deposits $193,232 $134,523
Notes payable 4,380 1,731
FHLB Advances Payable 3,802 1,450
Federal Funds purchased and securities sold
under agreements to repurchase 1,767 1,649
Accrued interest payable 624 412
Other Liabilities 706 679
Total Liabilities $204,511 $140,444
Stockholders' equity:
Common stock, par value $5 per share.
1,000,000 shares authorized; 272,700
shares issued 1,363 1,363
Capital surplus 6,744 6,744
Retained earnings 8,193 5,599
Unrealized Gain - FAS 115 104 0
Treasury stock, 65,088 and 63,552 shares in
1994 and 1993, respectively, at cost (1,639) (1,586)
Employee Stock Ownership Plan commitment 0 (563)
Total Stockholders' Equity $14,765 $11,557
Total Liabilities and Stockholders' Equity $219,276 $152,001
See accompanying notes to consolidated financial statements.
Consolidated Statements of Income
Unaudited ($ in thousands, except per share data)
3 months ended March 31,
1994 1993
Interest Income
Loans, including fees $2,206 $1,605
Investment securities:
US government and agency obligations 653 526
Mortgage-backed 403 376
Obligations of states and political
subdivisions 158 120
Other 168 191
Deposits with financial institutions 22 25
Federal funds sold and other 89 20
Total interest income 3,699 2,863
Interest expense
Deposits:
Time 886 634
Money Market and NOW accounts 261 217
Savings 106 81
Notes payable 84 38
Other 70 30
Total interest expense 1,407 1,000
Net interest income 2,292 1,863
Provision for loan losses (45) 0
Net interest income after provision
for loan losses 2,337 1,863
Other operating income:
Customer service charges 273 174
Other charges and commissions 176 154
Investment securities gains
(losses), net 0 0
Total other operating income 449 328
Other operating expenses:
Salaries and employee benefits 1,007 632
Occupancy and equipment 277 234
Other operating expenses 550 493
Total other operating expenses 1,834 1,359
Income before income tax expense 952 832
Income tax expense 279 254
Net Income $673 $578
Net income per share
Average common shares outstanding $3.24 $2.76
Average common shares outstanding
assuming full dilution $2.89 $2.46
See accompanying notes to consolidated financial statements.
FIRST BANCORP OF LOUISIANA, INC. AND SUBSIDIARIES
Consolidated Statements of Stockholders' Equity
Unaudited ($ in thousands)
<TABLE>
For the 3 months ended
March 31, 1994
Employee Stock
Unrealized Ownership Total
Gains Plan Stock-
Common Capital Retained Treasury on Stock holders'
Stock Surplus Earnings Stock Securities Commitment Equity
<S> <C> <C> <C> <C> <C> <C>
Balances at December 31, 1993 $1,363 $6,744 $7,520 ($1,639) ($400) $13,588
Reduction of commitment to ESOP $400 $ 400
Effect of change in accounting
for securities available for
sale, net of tax $104 $ 104
Net income $ 673 $ 673
Balances at March 31, 1994 $1,363 $6,744 $ 8,193 ($1,639) $104 -0- $14,765
Balances at December 31, 1992 $1,363 $6,744 $ 5,020 ($1,585) ($594) $10,948
Reduction of commitment to ESOP $ 31 $ 31
Net income $ 578 $ 578
Balances at March 31, 1993 $1,363 $6,744 $ 5,598 ($1,585) ($563) $11,557
</TABLE>
FIRST BANCORP OF LOUISIANA, INC AND SUBSIDIARIES
Consolidated Statements of Cash Flows
Unaudited ($ in thousands)
3 months ended March 31
1994 1993
Operating Activities
Net Income $ 673 $ 578
Adjustments to reconcile net income to net cash
provided by operating activities:
Provision for depreciation and amortization 88 84
Net amortization of investment securities 61 26
Decrease (increase) in accrued
interest receivable (39) (268)
Decrease (increase) in other assets (768) (61)
Increase in accrued interest payable 0 61
Increase in other liabilities 92 369
Net Cash Provided by Operating Activities 107 789
Investing Activities
Net decrease in interest-bearing deposits with
financial institutions 293 0
Proceeds from maturities and principal paydowns of
investment securities 10,728 6,710
Purchases of investment securities (15,634) 0
Net decrease (increase) in loans 634 (3,056)
Proceeds from sales of premises and equipment and
other assets 2 0
Purchases of premises and equipment (49) (38)
Net cash (used by) provided by investing
activities (4,026) 3,616
Financing activities:
Net decrease in deposits (6,303) (6,272)
Net decrease in Federal Funds Purchased
and obligations under repurchase agreements (254) (52)
Payments on notes payable (110) (690)
Net increase (decrease) in FHLB advances (59) 1,450
Net cash used by financing activities (6,726) (5,564)
Increase (decrease) in cash and cash equivalents (10,645) (1,159)
Cash and cash equivalents at beginning of year 26,738 12,640
Cash and cash equivalents at end of year $16,093 $11,481
See accompanying notes to consolidated financial statements.
FIRST BANCORP OF LOUISIANA, INC. AND SUBSIDIARY
Notes to Consolidated Financial Statements
Unaudited ($ in thousands)
NOTE 1 - Per Share Data and Market Value of Stock
Net income per average share outstanding is calculated based on the
weighted average number of shares outstanding during the year. The
average number of shares outstanding for the three months ended
March 31, 1994 and 1993 was 207,612 and 209,148, respectively. Net
income per average share outstanding assuming full dilution also
considers the impact of conversion of First Bancorp's subordinated
debentures into common shares as of the beginning of each year. The
average number of shares outstanding during the three months ended
March 31, 1994 and 1993 was 237,676 and 241,091 respectively.
There is not an established public trading market for the Company's
common stock. However, an annual valuation of the stock is prepared
for the Employee Stock Ownership Plan. As of December 31, 1993 the
value of the Company's common stock was estimated to be $53.00.
NOTE 2 - Non-Performing Loans
March 31,
1994 1993
Nonaccrual loans $ 762 $1,567
Restructured loans 781 857
Total nonperforming loans $1,543 $2,424
Accruing loans past due
ninety days or more $170 $ 832
When the payment of principal or interest on a loan is delinquent
for 120 days, or earlier in some cases, the loan is placed on
nonaccrual 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 nonaccrual 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 nonaccrual 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.
Interest income in the amount of $30 would have been recorded on
nonaccrual loans during the three months ended March 31, 1994 if
they had been performing in accordance with their contractual terms.
During the three months ended March 31, 1994, the company recorded
no interest income on nonaccrual loans.
In addition to the nonperforming loans disclosed above, management
has identified loans totalling $292 thousand for which payments are
current, but which, in management's opinion, are subject to
potential future classification as non-performing or past due.
FIRST BANCORP OF LOUISIANA, INC. AND SUBSIDIARY
Notes to Consolidated Financial Statements
Unaudited ($ in thousands)
NOTE 3 - Investment Securities and Money Market Assets
During the first quarter of 1994 First Bancorp adopted Statement of
Financial Accounting Standards No. 115, "Accounting for Certain
Investments in debt and Equity Securities" (FAS 115). This
pronouncement provides guidance regarding the appropriate
classification of debt and equity securities in a company's balance
sheet and also provides for the recognition of unrealized holding
gains and losses as a result of changes in the fair value of
securities available for sale. For the Company, the balance sheet
classification guidelines pursuant of FAS 115 are consistent with
the Company's classification prior to adoption of FAS 115. The
carrying value of securities held to maturity continues to be
amortized cost. Securities available for sale are now carried at
their estimated fair value in accordance with FAS 115. As a result
of adopting FAS 115, the carrying value of securities held for sale
reflects $155 in net unrealized gains as of March 31, 1994. The
aggregate market value of securities held to maturity exceeded their
amortized cost by approximately $445 at March 31, 1994.
First Bancorp's Management's Discussion and Analysis
The following discussion provides certain information concerning
the financial condition and results of operations of First Bancorp
of Louisiana, Inc. ("First Bancorp") for the three years ended
December 31, 1993. The financial position and results of
operations of FBL were due primarily to its banking subsidiary,
First National Bank of West Monroe ("FNB") until August 31, 1993
and FNB and Southern National Bank at Tallulah ("SNB") from
September 1, 1993 until December 31, 1993. Management's discussion
should be read in conjunction with the financial statements and
accompanying notes presented elsewhere in this Proxy Statement.
Acquisition
On August 31, 1993, First Bancorp acquired 100% of the outstanding
common stock of SNB for a total of $9,181,000. The acquisition was
accounted for as a purchase. The fair values of net assets
acquired approximated the purchase price at date of acquisition,
accordingly no goodwill was recorded as a result of the
acquisition. At the date of acquisition, SNB had approximately
$62,620,000 of assets, which included $21,034,000 of loans,
$33,662,000 of investments, $6,366,000 of cash and cash
equivalents, and $1,558,000 of other assets. Additionally, SNB had
$52,176,000 of deposits, $1,263,000 of other liabilities, and
$9,181,000 in stockholders' equity.
Merger
An Agreement and Plan of Merger between First Bancorp and Hibernia
Corporation was signed on November 4, 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
$36 million of Hibernia stock. The merger is contingent upon
shareholder and regulatory approval.
Results of Operations of the Interim Period March 31, 1994 Compared
With March 31, 1993.
Net income for the first quarter of 1994 was $673,000 compared to
$578,000 for the same quarter of 1993. Net income is largely
dependent upon net interest income, or the difference between
interest received on loans and investments, the interest-bearing
assets, and interest paid on certain deposit accounts and long-term
debt, the interest-bearing liabilities. Net interest income is
affected by the average yield on the loans and investments, the
balances of these interest-bearing assets and liabilities, and the
magnitude of change of each.
Interest income increased $836,000 from $2,863,000 in the first
quarter of 1993 to $3,699,000 in the first quarter of 1994, and of
this increase, SNB accounted for $1,048,000 increase and FNB
decreased $208,000. Interest expense increased $407,000 from
$1,000,000 in 1993 to $1,407,000 in 1994. FNB declined $24,000 and
SNB accounted for an increase of $384,000. The decrease in
interest income at FNB resulted primarily from maturing assets
continuing to re-price at lower yields after most liabilities had
already reached lower rates at this point in the low rate
environment.
Net interest income increased by $429,000 from $1,863,000 in 1993
to $2,292,000 in 1994. The result of this increase is due to the
inclusion of SNB in the first quarter results of 1994.
Non-interest income increased $121,000 during the period, from
$328,000 in 1993 to $449,000 in 1994 with SNB accounting for
$126,000 of this increase.
Non-interest expense, excluding income taxes and provision for loan
losses, increased $476,000 from $1,358,000 in 1993 to $1,834,000 in
1994. SNB accounted for $425,000 of this increase.
FNB and SNB maintain an allowance for potential loan losses that
management believes is adequate to cover future losses on
outstanding loans. The allowance for loan losses was $1,390,000 at
March 31, 1994, compared to $2,571,000 at March 31, 1993. During
the first quarter of 1994, a negative provision of $45,000 was
recorded with no provision charged to operations during the first
quarter of 1993.
Income taxes increased $25,000 from $254,000 in 1993 to $279,000 in
1994 due to an increase of $119,000 in income before taxes.
Results of Operations December 31, 1993 compared with December 31,
1992
For the year ended December 31, 1993, net income was $2,707,000 as
compared to $1,945,000 for the year ended December 31, 1992.
Interest income increased $933,000 from $12,059,000 in 1992 to
$12,992,000 in 1993, and of this increase, SNB accounted for
$1,470,000 and FNB decreased $523,000. Interest expense declined
$248,000 from $4,992,000 for 1992 to $4,744,000 for 1993. FNB
declined $822,000 and SNB accounted for an increase of $554,000.
The increase in net interest income at FNB resulted primarily from
maturing investments being redeployed in the form of increased loan
demand and liabilities continuing to re-price at lower yields. As
a result of the above, net interest income increased by $1,181,000
from $7,067,000 in 1992 to $8,248,000 in 1993. The net interest
margin, the difference in the average yield on assets and the
average rate paid on liabilities, increased slightly at FNB from
4.20% in 1992 to 4.36% in 1993.
Non-interest income increased $296,000 during the period, from
$1,321,000 in 1992 to $1,617,000 in 1993 with SNB accounting for
$183,000 of this increase.
Non-interest expense, excluding income taxes and provision for loan
losses, increased $1,230,000 from $5,134,000 in 1992 to $6,364,000
in 1993. Of this increase, SNB accounted for $586,000, FNB,
$473,000 and First Bancorp, $163,000. The $473,000 increase at FNB
was primarily due to an increase in pension expense of $341,000.
The increase of $163,000 at First Bancorp relates to professional
fees incurred in merger negotiations with various financial
institutions.
FNB and SNB maintain an allowance for potential loan losses that
management believes is adequate to cover future losses on
outstanding loans. The allowance for loan losses was $1,413,000 at
the end of 1993, compared to $1,984,000 at the end of 1992. A
negative provision of $235,000 was charged to operations during
1993 with a $710,000 provision charged to operations during 1992.
Income taxes increased $432,000 from $598,000 in 1992 to $1,030,000
in 1993 due to an increase of $1,193,000 in income before taxes.
Results of Operations as of December 31, 1992 Compared With
December 31, 1991.
Net income for 1992 was $1,945,000, as compared to $1,038,000 for
1991. The increase of $907,000 for 1992 over 1991 was due
primarily to a 44% increase in net interest income from $4,899,000
for 1991 to $7,067,000 for 1992, for a difference of $2,168,000.
Interest income for 1992 was $12,059,000, and, for 1991, was
$11,872,000. The increase of $187,000 resulted from an increase in
the average balances of interest-earning assets.
Interest expense for 1992 was $4,992,000, and, for 1991, was
$6,972,000. The decrease of $1,980,000 is attributable to lower
interest rates paid on deposits and long-term debt partially offset
by an increase in the average balances of interest-bearing
liabilities.
The greater decline in interest expense than in interest income is
attributable to more frequent repricing of liabilities than assets
early in the declining rate environment. This resulted in an
increase in net interest margin from 2.90% in 1991 to 4.20% in 1992
and the 44% increase in net interest income.
Non-interest income for 1992 and 1991 was $1,321,000 and
$1,194,000, respectively. The increase of $127,000 is primarily
attributable to sales of investment securities and other real
estate in 1992, that resulted in net pre-tax gains of $123,000.
Non-interest expense, excluding income taxes and provision for loan
losses, increased $815,000 from $4,319,000 in 1991 to $5,134,000 in
1992. The majority of the increase is attributable to an increase
in personnel expenses of $209,000, increased occupancy expenses of
$353,000, and general overhead expenses of $253,000. The increase
in personnel expense is primarily related to an increase in
personnel associated with opening an additional branch location and
an increase in incentive bonuses paid in 1992. The increase in
occupancy expenses is also due to opening the additional branch
location. The increase in general overhead of $253,000 is
primarily due to increases in banking agency assessments of
$70,000, donations of $32,000, and advertising costs of $33,000.
The allowance for loan losses for 1992 and 1991 was $1,415,000 and
$1,300,000, respectively, with $710,000 charged to operations in
1992 and $432,000 charged to operations in 1991 to provide for the
allowance.
Income taxes increased from $305,000 in 1991 to $598,000 in 1992,
due to the $1,200,000 increase in income before taxes.
Results of Operations as of December 31, 1991 Compared With
December 31, 1990.
Net income for 1991 was $1,038,000, as compared to 1990 net income
of $682,000. The increase of $356,000 for 1991 over 1990 was due
primarily to a 22% increase in net interest income from $4,005,000
in 1990 to $4,899,000 in 1991, for a difference of $894,000.
Interest income increased $990,000 from $10,882,000 in 1990 to
$11,872,000 in 1991. The increase was due to a $16,256,000
increase (15%) in interest-earning assets as a result of the
closing of a local savings and loan.
Interest expense for 1991 and 1990 was $6,972,000 and $6,877,000,
respectively, an increase of $95,000. The increase in interest
expense was due to the increase in average interest bearing
liabilities of $15,931,000 or 18% largely offset by re-pricing
early in the declining rate environment. Earning asset yields
declined from 9.83% in 1990 to 9.31% in 1991 while the cost of
interest-bearing liabilities declined from 7.37% in 1990 to 6.41%
in 1991, thereby increasing the net interest margin from 2.46% in
1990 to 2.90% in 1991.
Non-interest income decreased $13,000 from $1,207,000 in 1990 to
$1,194,000 in 1991, due primarily to an decrease in income from
Other Real Estate of $214,000 offset by an increase in income from
the initial year of alternative investment product sales of
$175,000.
Non-interest expense, excluding income taxes and provision for loan
losses, increased from $4,003,000 in 1990 to $4,319,000 in 1991 or
$316,000. The primary change was related to increases in banking
agency assessments of $120,000 and professional fees of $60,000.
The allowance for loan losses was $1,415,000 and $1,300,000 at the
end of 1991 and 1990, respectively. During 1991 and 1990, $432,000
and $440,000, respectively, was charged to operations to provide
for the allowance.
Income taxes increased $218,000 from $87,000 in 1990 to $305,000 in
1991, due to the $574,000 increase in income before taxes.
APPENDIX A
AGREEMENT AND PLAN OF MERGER
OF
FIRST BANCORP OF LOUISIANA, INC.
WITH AND INTO
HIBERNIA CORPORATION
AGREEMENT AND PLAN OF MERGER dated as of November 4, 1993
(this "Agreement"), adopted and made by and between First Bancorp
of Louisiana, Inc. ("FBL") and Hibernia Corporation ("Hibernia").
FBL is a corporation duly organized and existing under the
laws of the State of Louisiana; has its registered office at 500
Natchitoches Street, West Monroe, Louisiana 71291; 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 FBL consists solely of
1,000,000 shares of common stock of the par value of $5.00 each
("FBL Common Stock"). As of July 31, 1993, 272,700 shares of FBL
Common Stock had been issued, 207,612 shares of FBL Common Stock
were outstanding, and 65,088 shares of FBL Common Stock were held
in FBL's treasury. All outstanding shares of FBL Common Stock have
been duly issued and are validly outstanding, fully paid and
nonassessable. The foregoing are the only voting securities of FBL
authorized, issued, or outstanding, and there are no existing
options, warrants, calls, or commitments of any kind obligating FBL
to issue any share of its capital stock or any other security of
which it is or will be the issuer, other than the obligation to
issue shares upon conversion of the Debentures (as defined herein).
None of the shares of FBL's capital stock has been issued in
violation of preemptive rights of shareholders. FBL owns 96.8
percent and 100 percent, respectively, of the outstanding voting
shares of Southern National Bank of Tallulah and First National
Bank of West Monroe ( collectively, the "Banks"), each of which is
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 are
outstanding as of the date 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 FBL and Hibernia have duly approved
this Agreement and have authorized the execution hereof by FBL's
President and Hibernia's President and Chief Executive Officer,
respectively. FBL will direct 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 FBL
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), FBL 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.
3. FBL Common Stock.
3.1. Conversion. On the Effective Date and subject to
the provisions of Section 3.7 hereof,
(a) each share of FBL 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
FBL 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 FBL;
(c) each share of FBL Common Stock held in the treasury
of FBL 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 FBL 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 of the mean of high and low prices
of one share of Hibernia Common Stock for the five business days
preceding the Effective Date as reported in The Wall Street
Journal, or, if the Hibernia Common Stock is not then so reported,
the average of the fair market values of one share of Hibernia
Common Stock on the five business days preceding the Effective Date
determined pursuant to such reasonable method as the Board of
Directors of Hibernia may adopt in good faith for such purpose, and
no such holder shall be entitled to dividends, voting rights or any
other right of shareholders in respect of any fractional share.
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 FBL 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 FBL
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 FBL 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 FBL or Hibernia of the shares of FBL 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 FBL 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 FBL 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 FBL, and otherwise to carry out the purposes of this
Agreement.
3.7. Dissenters' Shares. Shares of FBL 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 FBL 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 number
obtained by dividing the Deliverable Amount (as defined below) by
the total number of issued and outstanding shares of FBL Common
Stock on the Closing Date.
(b) For purposes of this Agreement, and except as
provided in paragraph (d) of this Section, the Deliverable Amount
shall be the number that equals $ 36 million divided by the Average
Market Price of Hibernia Common Stock on the Closing Date (as
defined in paragraph (c) below); provided, however, that, in the
event that this Closing does not occur on or before March 31, 1994
and FBL's book value is greater than or equal to $15 million in
each full month following March 31, the Deliverable Amount shall be
increased by an amount equal to the lesser of (i) the aggregate net
after tax income of FBL for each full month ended after March 31,
1994 and prior to the Closing, or (ii) $250,000.
(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 ten business days preceding the last
trading day immediately prior to the Closing Date as reported in
The Wall Street Journal.
(d) In the event that, prior to the Effective Date,
Hibernia has publicly announced its intention to merge with an
unaffiliated third party as a result of which Hibernia would not be
the surviving corporation, be acquired by an unaffiliated third
party or sell or transfer all or substantially all of its assets to
an unaffiliated person pursuant to which a controlling interest in
Hibernia or Hibernia National Bank, then the Average Market Price
for purposes of computing the Exchange Ratio shall be the lesser of
(i) the Average Market Price as computed in accordance with Section
3.8(c) above, or (ii) $10.00 per share.
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 FBL
and the Banks 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 FBL or either of the Banks (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 FBL or either of the Banks 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, FBL
covenants and agrees that it will not do, or agree to commit to do,
and FBL will cause the Banks 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 FBL (and not the Banks), make,
declare, set aside or pay any dividend, other than regularly
declared dividends in accordance with past practice, or declare or
make any distribution on, or directly or indirectly combine,
redeem, purchase or otherwise acquire, any shares of FBL Common
Stock (other than in a fiduciary capacity and except as required by
Section 15.02 of FBL's Employee Stock Ownership Plan (the "FBL
ESOP"));
(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) except as otherwise contemplated in this Agreement,
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 past practices;
(d) except with respect to the termination and
distribution of the FBL ESOP as contemplated herein, 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;
(e) other than as contemplated hereby, (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 Banks' Articles of Incorporation or Bylaws, (iii)
impose, or suffer the imposition, on any share of stock held by FBL
in the Banks, 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, (vi) sell assets,
including but not limited to, loans or securities (other than
securities listed as held for sale on the FBL Financial
Statements), for the purpose of taking profits or (vii) 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 FBL'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 FBL. FBL (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 FBL and
the Banks is a corporation or bank duly organized, validly
existing, and in good standing under the laws of the State of
Louisiana; each of FBL and the Banks have 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
FBL has all requisite power and authority to execute and deliver
this Agreement and perform its obligations hereunder.
7.3. Ownership of Other Banks. FBL 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 Banks. The presently authorized
capital stock of First National Bank of West Monroe consists solely
of 1,280,000 shares of common stock of the par value of $ 5.00
each, of which 484,252 shares of common stock are outstanding and
no such shares are held in treasury. The presently authorized
capital stock of Southern National Bank of Tallulah consists solely
of 75,046 shares of common stock of the par value of $ 5.00 each,
of which 75,046 shares of common stock are outstanding and no such
shares are held in treasury. The outstanding shares of capital
stock of the Banks 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 FBL (except for 2,400
shares of the common stock of Southern National Bank Tallulah,
which are held by the directors of such bank), free and clear of
all liens, claims and encumbrances.
7.4. Corporate Authorization. The execution, delivery
and performance of this Agreement have been authorized by FBL's
Board of Directors, and, subject to 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 FBL 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 FBL, enforceable against FBL 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 FBL 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 FBL or the Banks or to which FBL or the Banks 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 FBL and the Banks taken as
a whole or on the transactions contemplated hereby, (ii) to the
best of the knowledge of FBL'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 FBL or the Banks or to which
FBL or the Banks is subject, or (iii) a breach or violation of, or
a default under, the Articles of Incorporation or Bylaws of FBL or
the Banks; 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. FBL
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 "FBL Financial
Statements"): FBL's Consolidated Balance Sheets as of September
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 nine-month periods ended
September 30, 1993 and 1992 (unaudited). Each of the FBL Financial
Statements (including the related notes) fairly presents the
consolidated results of operations of FBL and the Banks for the
respective periods covered thereby and the consolidated financial
condition of FBL and the Banks 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), in each
case in accordance with GAAP consistently applied during the
periods involved, except as may be noted therein. Except as
disclosed in the FBL 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 FBL or the Banks from paying dividends, in
each case when, as and if declared by its Board of Directors.
7.7. No Material Adverse Change. Since September 30,
1993, there has been no event or condition of any character
(whether actual, or to the knowledge of FBL or the Banks,
threatened or contemplated) that has had or can reasonably be
anticipated to have, or that, if concluded or sustained adversely
to FBL, would reasonably be anticipated to have, a material adverse
effect on the financial condition, results of operations, business
or prospects of FBL or the Banks, 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 FBL 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 FBL and the Banks 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 FBL'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 FBL nor either of the Banks is
bound by any material contract to be performed after the date
hereof that is not terminable by FBL or the Banks 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 FBL or the Banks 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; provided, however, that Austin &
Associates will provide the Fairness Opinion to FBL in connection
with the Merger, and FBL will pay Austin & Associates a fee in
connection with such Fairness Opinion.
7.11. Contingent Liabilities. Except as disclosed on
Schedule 7.11 hereto or as reflected in the FBL Financial
Statements and except in the case of the Banks for unfunded loan
commitments made in the ordinary course of business consistent with
past practices, as of September 30, 1993, neither FBL nor either of
the Banks have 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 FBL
and the Banks 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 September 30, 1993, or from any
action omitted to be taken during such period that, to the
knowledge of FBL, 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 FBL 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 September 30,
1993, neither FBL nor the Banks have incurred or paid any
obligation or liability that would be material to FBL 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.
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 FBL or the Banks 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 FBL or the Banks except as
reserved against in the FBL Financial Statements. All taxes,
interest, additions and penalties due with respect to completed and
settled examinations or concluded litigation have been paid, and
FBL'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 FBL in the FBL
Financial Statements, as of September 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 FBL, 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 FBL as of
September 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 September
30, 1993, and each such allowance has been established in
accordance with GAAP.
7.17. Title to Assets; Adequate Insurance Coverage.
(a) As of September 30, 1993, FBL and the Banks 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 FBL 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 FBL 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
September 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; (v) the pledge of the
stock of the Banks to Whitney National Bank disclosed on Schedule
7.6 hereto, (vi) the pledge of certain mortgage-backed securities
to the Federal Home Loan Bank ("FHLB") to secure certain advances
from FHLB and (vii) capital leases and leases, if any, to third
parties for fair and adequate consideration. FBL and the Banks
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 FBL or the Banks 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 FBL or either of
the Banks is a party, except for financing leases in which FBL or
the Banks 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 Banks and HNB will constitute a default or a cause
for termination or modification of such lease.
(c) Neither FBL nor the Banks have 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, including
fidelity bonds, maintained with respect to the assets or businesses
of FBL and the Banks provide adequate coverage against loss.
7.18. Employee Plans. To the best of FBL's knowledge
and belief, it, the Banks, 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 FBL or the Banks:
(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, FBL 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 Banks
for its or the Banks' 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 FBL nor the Banks have 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. Neither FBL nor the Banks are in
default in any material 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. Within thirty days after the date
hereof, FBL will make available to Hibernia, for inspection
pursuant to the terms of Section 9.5 hereof, the minutes of
meetings of FBL's and the Banks' Boards 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 FBL and
the Banks 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 FBL or the Banks at the date hereof. Except as
disclosed on Schedule 7.23 hereto, neither FBL nor the Banks have
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 FBL nor the Banks have 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 FBL or the Banks.
7.24. Investments. Except for pledges to secure public
or trust deposits, none of the investments reflected in the FBL
Financial Statements under the heading "Investment Securities," and
none of the investments made by FBL or the Banks since September
30, 1993, and none of the assets reflected in the FBL 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 FBL or the Banks freely to
dispose of such investment at any time. With respect to all
repurchase agreements to which FBL or the Banks is a party, FBL or
the Banks, 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. Neither FBL nor the Banks
nor, to the knowledge of FBL and the Banks, 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 FBL or
the Banks or used by FBL or the Banks in their respective business
("FBL Properties") used, generated, treated, stored, or disposed of
any hazardous waste, toxic substance, or similar materials on,
under, or about FBL 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 FBL nor the Banks have 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 FBL
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 will 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 September 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 September 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 FBL on or before the date hereof.
8.7. No Material Adverse Change. Since September 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 affecting 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
September 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. Environmental Matters. Hibernia and HNB are in
material compliance with all environmental laws and regulations
applicable to them as to which failure to comply could be
reasonably anticipated to result in a material adverse change in
the financial condition of Hibernia or a material loss to Hibernia
or HNB.
9. Agreements and Covenants. Hibernia and FBL 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 satisfy any materially burdensome condition placed
upon any regulatory approval required in order to consummate 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 FBL relating
to FBL, (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 FBL 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 and FBL in advance, FBL and Hibernia 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 FBL so long as FBL is furnished with a copy
of such report prior to its filing.
9.5. Material Developments; Access to Information.
(i) In order to afford FBL 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 FBL 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 FBL and such representatives with such
financial and operating data and other information of any kind
respecting its business and properties as FBL shall from time to
time reasonably request to perform such review, (B) furnish FBL
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 FBL 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 FBL to be acquired
as a result of the Merger, FBL shall (and shall cause the Banks
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 Banks'
properties, books, contracts, commitments, loan files, litigation
files, and records (including, but not limited to, the minutes of
the Boards of Directors of FBL and the Banks and all committees
thereof), and it shall (and shall cause the Banks 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 FBL nor the Banks 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,
FBL or the Banks or any business combination with FBL or the Banks
other than as contemplated by this Agreement. FBL shall instruct
each officer, director, agent, or affiliate of it or the Banks to
refrain from doing any of the above, and FBL 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, FBL; provided,
however, that nothing contained in this section shall be deemed to
prohibit any officer or director of FBL or the Banks from taking
any action that, in the opinion of counsel to FBL or the Banks, 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), FBL shall deliver to Hibernia a letter
identifying all persons whom it believes to be "affiliates" of FBL
for purposes of Rule 145(c) or Rule 144 (as applicable) under the
1933 Act ("Affiliates"). FBL 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 FBL 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. In addition, the parties hereto shall
endeavor to obtain a comfort letter from a certified public
accounting firm regarding accounting for the Merger as a pooling-
of-interests prior to execution hereof, which letter shall be
affirmed as of the Closing Date.
9.10. Cooperation in Bank Merger. Promptly upon request
by Hibernia, FBL shall, and it shall cause the Banks to, take any
and all necessary or appropriate actions to cause the Banks 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. As soon as
practicable 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), FBL shall, and it shall
cause the Banks 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 FBL or the Banks 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 FBL
herein.
9.12. 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.
9.13. 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 FBL 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.
9.14. Indemnification of Directors and Officers of FBL
and the Banks.
(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 FBL or either of the Banks (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 FBL or the
Banks, 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 FBL or either of the Banks, 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 9.14 are subject to the following limitations: (i) the
total aggregate indemnification to be provided by Hibernia pursuant
to subsection 9.14(a) shall not exceed, as to all of the
Indemnified Persons as a group, the sum of $12,000,000, 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 9.14 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 9.14
hereto; and (iii) amounts otherwise required to be paid by Hibernia
to an Indemnified Person pursuant to this subsection 9.14 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 $12,000,000 indemnification
limit set forth in paragraph (c) of this Section 9.14 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.
9.15. Administration of FBL ESOP after Closing. At the
Effective Date, Hibernia will freeze participation in the FBL ESOP
and will continue to maintain the FBL ESOP through the "transition
period" as defined by Section 410 (b) (6) (C) of the Code. During
the transition period and to the extent permitted by law, Hibernia
will, to the extent permitted under Section 404 and Section 415 of
the Code, accelerate the allocation of the "special suspense
shares" and "suspense shares" as defined in the FBL ESOP;
provided, however, that additional employer contributions for the
purpose of accelerating the allocation of suspense shares will not
be made by Hibernia until all special suspense shares have been
allocated.
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) FBL shall endeavor to have its Affiliates execute a
written agreement in substantially the form of Exhibit 9.7 hereto;
provided, however, that FBL shall have no such obligation prior to
the receipt by the Board of Directors of FBL of the Fairness
Opinion; and
(d) FBL shall endeavor to have each of the directors of
FBL and First National Bank of West Monroe execute a Non-
Competition Agreement in substantially the form of Exhibit 10(d)
hereto; provided, however, that FBL shall have no such obligation
prior to the receipt by the Board of Directors of FBL of the
Fairness Opinion.
11. Confidentiality; Hold Harmless; Restriction on
Acquisitions.
11.1. Confidentiality. For a period of five years after
the date hereof, 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 FBL agree, on behalf of
themselves, their respective officers, directors, employees,
representatives and agents, that 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 FBL
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 FBL, each of its directors and officers and each person,
if any who controls FBL or the Banks 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 FBL or either of the Banks 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 of Acquisitions. Hibernia agrees that
it will not acquire or agree to acquire or merge with any bank or
financial institution in Ouachita Parish while this Agreement is in
effect that, in the reasonable opinion of FBL, would result in a
concentration of market share in the Monroe banking market that
would exceed the aggregate Herfendal-Hirschman Index threshold of
1800
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 FBL and
exercise and perfection of dissenters' rights pursuant to Section
12: 131 of the LBCL by holders of FBL Common Stock holding in the
aggregate no more than 10% of the FBL 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. 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 FBL shall be prohibited by any order of any
court or other governmental authority from consummating the
transactions provided for in this Agreement.
12.5. Opinion of Hibernia Counsel. FBL and its
directors shall have received an opinion, dated the Closing Date,
of counsel for Hibernia, in substantially the form of Exhibit 12.6
hereto with respect to the transactions contemplated hereby.
12.6. Opinion of FBL Counsel. Hibernia, its directors
and its officers who sign the Registration Statement shall have
received an opinion, dated the Closing Date, of Werner & Blank, PLA
counsel for FBL, which firm may, with respect to matters of
Louisiana law, rely upon the opinion of FBL's local counsel, in
substantially the form of Exhibit 12.7 hereto with respect to the
transactions contemplated hereby.
12.7. Representations, Warranties and Agreements of FBL.
Each of the representations, warranties, and agreements of FBL
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 President of FBL, dated
the Closing Date, to such effect; FBL 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. FBL shall have furnished
Hibernia with such further documents or other materials as Hibernia
shall have reasonably requested in connection with the transactions
contemplated hereby.
12.8. 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 FBL
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 FBL such other
certificates as FBL 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 FBL with such further documents or other materials as FBL
shall have reasonably requested in connection with the transactions
contemplated hereby.
12.9. 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 FBL 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).
12.10. Blue Sky. Hibernia shall have received all state
securities laws and "blue sky" permits and other authorizations
necessary to consummate the transactions contemplated hereby.
12.11. Tax Ruling. FBL 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 FBL, 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 FBL Common Stock to the
extent exchanged for Hibernia Common Stock will not give rise to
gain or loss to the shareholders of FBL with respect to such
exchange and that the Louisiana income tax treatment to the
shareholders of FBL will be substantially the same as the federal
income tax treatment to the shareholders of FBL.
12.12. Listing on New York Stock Exchange. The shares
of Hibernia Common Stock issuable to the holders of FBL 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.
12.13. Fairness Opinion. FBL shall have received a
letter from Austin & Associates, Inc. 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.
12.14. Employment Agreements. Hibernia and/or HNB shall
have executed employment agreements, to be effective as of the
Effective Date, with J. Herbert Boydstun and Malcolm E. Maddox.
12.15. Assertion of Conditions. A failure to satisfy
any of the requirements set forth in Section 12.5, 12.8, 12.12 or
12.14 shall only constitute conditions to consummation of the
Merger if asserted by FBL and a failure to satisfy any of the
requirements set forth in Section 12.6 or 12.7 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 September 30, 1994, or (ii) any condition to Closing
cannot be satisfied by September 30, 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 FBL.
13.6. Dissenters. By Hibernia, if holders of more than
10 percent of the outstanding FBL Common Stock exercise statutory
rights of dissent and appraisal pursuant to Part XIII of the LBCL.
13.7. Material Adverse Change. By FBL, 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. Use of Pooling-of-Interests Accounting Treatment.
By Hibernia, in the event it 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.
13.9. Fairness Opinion. By FBL, if it shall not have
received a letter from Austin & Associates, Inc. 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 last business day of the month
occurring after the last to occur of: (i) 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; (ii)
the date that falls 30 days after the date of the order of the
Comptroller approving the merger of the Banks with and into HNB
pursuant to the Bank Merger Act; and (iii) 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, 9.13, 9.14, 9.15 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 FBL who are the intended beneficiaries of such provisions;
provided, however, that the provisions of Section 9.14 shall
survive the Closing for a period of five years from the date of the
Closing only.
15.3. The provisions of Section 11 and liabilities for
a breach of the provisions of Sections 9.2 or 9.12 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 9.12 shall survive
the termination of the Agreement for a period of 180 days following
the date on which the Agreement terminates. The parties further
agree that a breach of Section 9.2 or 9.12 may be enforced by an
action for specific performance of this Agreement. 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 FBL) 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 FBL shall change the number of shares
of Hibernia Common Stock into which shares of FBL 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 President of each party hereto at the
address of such party set forth in the preamble to this Agreement
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:
HNB
313 Carondelet Street
New Orleans, Louisiana 70130
Attention: Corporate Law Division
and a copy of all notices or other communications directed to FBL
shall be sent to:
Werner & Blank, LPA
7205 W. Central avenue
Toledo, Ohio 43617
Attention: Martin D. Werner, Esq.
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
s/STEPHEN A. HANSEL
Stephen A. Hansel
President and Chief Executive
Officer
Attest:
s/PATRICIA C. MERINGER
Patricia C. Meringer
Secretary
FIRST BANCORP OF LOUISIANA, INC.
By: s/J. HERBERT BOYDSTUN
J. Herbert Boydstun
President
Attest:
Secretary
AMENDMENT TO AGREEMENT AND PLAN OF MERGER
OF
FIRST BANCORP OF LOUISIANA, INC.
WITH AND INTO
HIBERNIA CORPORATION
THIS AMENDMENT TO THE AGREEMENT AND PLAN OF MERGER dated as of
November 4, 1993 (this "Amendmentt"), is hereby adopted and made by
and between First Bancorp of Louisiana, Inc. ("FBL") and Hibernia
Corporation ("Hibernia") as of March 29, 1994.
WHEREAS, FBL and Hibernia enetered into that certain Agreement
and Plan of Merger dated as of November 4, 1993 (the "Agreement")
providing for the merger of FBL with and into Hibernia; and
WHEREAS, FBL and Hibernia have determined it to be in each of
their best interests to amend the Agreement in certain respects as
set forth below; and
WHEREAS, the Boards of Directors of FBL and Hibernia have duly
approved this Amendment and have authorized the execution hereof by
FBL's President and Hibernia's President and Chief Executive
Officer, respectively.
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 3.8(b) of the Agreement is hereby amended and restated
to read as follows:
(b) For purposes of this Agreement, and except as
provided in paragraph (d) of this Section, the Deliverable Amount
shall be the number that equals $36 million divided by the Average
Market Price of Hibernia Common Stock on the Closing Date (as
defined in paragraph (c) below); provided, however, that in the
event that the Closing does not occur on or before March 31, 1994,
and FBL's book value is greater than or equal to $14.6 million on
March 31, 1994, then as of the last day of, and for, each full
month ending thereafter, the Deliverable Amount shall be increased
by the lesser of (i) the aggregate monthly net after tax income of
FBL, or (ii) $250,000.
2. The Agreement is hereby amended to redesignate the existing
Section 12.15 as Section 12.16 and to add a new Section 12.15 as
follows:
12.15 Conversion of Debentures and Repayment of ESOP
Loan. On or before the Closing Date: (i) all of the outstanding
convertible debentures of FBL shall have been converted into FBL
Common Stock, and (ii) all indebtedness of the FBL ESOP shall have
been repaid in full.
3. The Agreement is hereby amended to delete the phrase "Section
12.6 or 12.7" in the redesignated Section 12.16 and replace it with
the phrase "Section 12.6, 12.7 or 12.15."
4. 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: s/STEPHEN A. HANSEL
Stephen A. Hansel
President and Chief Executive
Officer
Attest:
By: s/PATRICIA C. MERINGER
Patricia C. Meringer
Secretary
FIRST BANCORP OF LOUISIANA, INC.
By: s/J. HERBERT BOYDSTUN
J. Herbert Boydstun
President
Attest:
By: s/PATRICK L. SPENCER
Secretary
APPENDIX B
FORM OF OPINION OF AUSTIN ASSOCIATES, INC.
April 15, 1994
Board of Directors
First Bancorp of Louisiana, inc.
500 Natchitoches Street
Box 487
West Monroe, LA 71294-0487
Members of the Board:
You have requested our opinion as to the fairness, from a financial
point of view, to First Bancorp of Louisiana, Inc. ("First
Bancorp") and its shareholders of the terms of the Agreement and
Plan of Merger dated November 4, 1993 (the "Merger Agreement")
between First Bancorp and Hibernia Corporation, New Orleans,
Louisiana ("Hibernia"). The terms of the Merger Agreement provide
for the merger of First Bancorp with and into Hibernia.
Under the Merger Agreement, shareholders of First Bancorp, other
than those exercising dissenter's rights, will receive $36 million
of Hibernia common stock in exchange for all outstanding shares of
First Bancorp stock. The number of shares issued to First Bancorp
shareholders will be determined by the average of the man of the
high and low prices of Hibernia stock for the 10 business days
preceding closing. In the event that Hibernia is not the surviving
entity, the average price of Hibernia calculated above may not
exceed $10.00 per share. The aggregate price to be received by
First Bancorp may increase if the merger has not been consummated
by March 31, 1994.
In carrying out our engagement, we have reviewed and analyzed
material bearing upon the financial and operating condition of
First Bancorp and Hibernia, including, but not limited to, the
following: (i) the Prospectus/Proxy Statement; (ii) the financial
statements of First Bancorp and Hibernia for the years 1990 through
1993; (iii) certain other publicly available information on First
Bancorp and Hibernia; (iv) publicly available information
regarding the performance of certain other companies whose business
activities were believed by Austin Associates to be generally
comparable to those of First Bancorp and Hibernia; (v) the
financial terms, to the extent publicly available, of certain
comparable transactions; and (vi) such other analysis and
information as Austin Associates deemed relevant.
In our review and analysis, we relied upon and assumed the accuracy
and completeness of the financial and other information provided to
us, or publicly available, and have not attempted to verify the
same. We have made no independent verification as to the status of
individual loans made by First Bancorp or Hibernia, and have
instead relied upon representations and information concerning
loans of First Bancorp and Hibernia in the aggregate. In rendering
our opinion, we have assumed that the transaction will be a tax-
free reorganization with no material adverse tax consequences to
any of the parties involved or to First Bancorp shareholders
receiving Hibernia stock. In addition, we have assumed in the
course of obtaining the necessary regulatory approvals for the
transaction, no condition will be imposed that will have a material
adverse effect on the contemplated benefits of the transaction to
First Bancorp and its shareholders.
Based upon our analysis and subject to the qualifications described
herein, we believe that as of the date of this letter, the terms of
the Merger Agreement are fair, from a financial point of view, to
First Bancorp and its shareholders.
For our services in rendering this opinion, First Bancorp will pay
us a fee and indemnify us against certain liabilities.
s/AUSTIN ASSOCIATES, INC.
Austin Associates, Inc.
Toledo, Ohio
APPENDIX C
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 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, 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 herein-above 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 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 D
FORM OF OPINION OF ERNST & YOUNG REGARDING CERTAIN TAX MATTERS
April 15, 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 First
Bancorp of Louisiana, Inc. ("FBL") with and into Hibernia
Corporation ("Hibernia") (the "FBL Merger"), and the proposed
merger of Southern National Bank of Tallulah and First National
Bank of West Monroe (collectively the "Banks") with and into
Hibernia National Bank ("HNB") (the "Bank Merger"). (Hereinafter,
the FBL 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 November 4, 1993 provided by the managements
of FBL, Banks, Hibernia and HNB; in the Agreement and Plan of
Merger made and entered into by FBL and Hibernia as of November 4,
1993 (the "Agreement"); in the form of the Agreement to Merge
between Banks and HNB (the "Bank Plan of Merger"); and in the
Registration Statement (Form S - 4), dated April 15, 1994, to be
filed with the Securities and Exchange Commission and containing
the Proxy Statement - Prospectus of FBL 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 FBL and Banks 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
appendix to the Form S-4 Registration Statement. We consent to
such inclusion.
STATEMENT OF FACTS
FBL is a bank holding company organized under the laws of the State
of Louisiana. FBL's assets consist of 96.8 percent and 100
percent, respectfully, of the outstanding voting shares of Southern
National Bank of Tallulah and First National Bank of West Monroe
Common Stock. FBL conducts no material business other than acting
as a bank holding company of Banks. FBL has 1,000,000 authorized
shares of Common Stock of which 272,700 were issued and 207,612
shares were outstanding as of December 31, 1993 (referred to
hereinafter as "FBL Common Stock"). Shares totaling 65,088 were
held in FBL's treasury as of December 31, 1993. Such outstanding
shares are closely held by approximately 189 shareholders of
record. FBL has no options, warrants, subscription rights or other
rights to purchase FBL Common Stock.
Banks are nationally chartered commercial banks, engaged
principally in the banking business. Southern National Bank at
Tallulah has 75,046 authorized shares of Common Stock of which
75,046 were issued and outstanding and held by FBL except 2,400
shares of the Common Stock which are held by the directors of such
bank as of December 31, 1993. Pursuant to the terms of the
Qualifying Shares Repurchase Agreement between these directors and
Southern National Bank at Tallulah dated August 31, 1993, Southern
National Bank at Tallulah will pay each director $1,000, plus
interest at a rate of 8 percent per annum, for his qualifying
shares on or before the effective date of the Mergers. Each
director paid $1,000 for his shares at the time he became a
director, and interest is calculated from the date an individual
first became a director of Southern National Bank at Tallulah,
through the date the shares are repurchased. First National Bank
of West Monroe has 1,280,000 authorized shares of Common Stock of
which 484,252 were issued and outstanding and held by FBL as of
December 31, 1993.
Hibernia is a bank holding company organized under the laws of the
State of Louisiana with shares registered under the Securities Act
of 1933. 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
December 31, 1993, no shares of Hibernia's preferred stock or its
Class B non-voting Common Stock were outstanding; 83,611,764 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 660,847 warrants were outstanding as of December
31, 1993. Additionally, Hibernia has authorized or reserved
1,706,250 shares of Hibernia Common Stock for issuance under its
1987 Stock Option Plan, pursuant to which options covering
1,549,437 shares of Hibernia Common Stock were outstanding as of
December 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 905,000 shares of Hibernia
Common Stock were outstanding as of December 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 were outstanding and 675,468
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 banking business. HNB is a wholly-owned subsidiary of
Hibernia.
BUSINESS PURPOSE
The management of Hibernia has represented 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 FBL and
Banks Boards of Directors believe the customers, depositors, and
communities served by Banks 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 and shareholder approvals have
been granted, there will be simultaneous mergers (i.e., the
Mergers) of FBL with and into Hibernia in accordance with the
provisions of the Louisiana Business Corporation Act ("LBCL"), and
Banks 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 the completion of the FBL Merger, Hibernia will cause the Bank
Merger to occur.
2. In the FBL Merger, Hibernia will acquire all of the assets and
assume all of the liabilities of FBL in exchange for Hibernia
Common Stock. As a result of the FBL Merger, each share of the
issued and outstanding FBL 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 FBL Common
Stock on the closing date. The deliverable amount equals $36
million divided by the Average Market Price of Hibernia Common
Stock on the closing date (average of the high and low sales prices
of one share of Hibernia Common Stock for the ten trading days
immediately preceding the trading date prior to the closing date).
However, in the event that this closing does not occur on or before
March 31, 1994 and FBL's book value is greater than or equal to
$14.2 million in each full month following March 31, the
deliverable amount shall be increased by an amount equal to the
lesser of (i) the aggregate net after tax income of FBL for each
full month ended after March 31, 1994 and prior to the closing, or
(ii) $250,000. Holders of certificates which represent shares of
FBL Common Stock outstanding immediately prior to the effective
date of the FBL Merger (hereinafter called "Old Certificates")
shall cease to be, and shall have no rights as shareholders of FBL
after the FBL Merger.
3. In the Bank Merger, HNB will acquire all the assets and assume
all of the liabilities of Banks. As a result of the Bank Merger,
each share of the issued and outstanding Banks 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 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 FBL
may exercise dissenter's rights entitling them to receive in cash
the value of their respective FBL Common Stock in lieu of receiving
Hibernia Common Stock in the FBL Merger.
REPRESENTATIONS
For purposes of our evaluation, we have received from the
managements of FBL, Banks, Hibernia and HNB, Statements of Facts
and Representations, dated November 4, 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 in connection with the
FBL Merger:
(a) The fair market value of the Hibernia Common Stock to be
received by each FBL Common Stock shareholder will be approximately
equal to the fair market value of the FBL Common Stock surrendered
in the exchange.
(b) There is no plan or intention by the shareholders of FBL
who own five percent or more of the FBL Common Stock and to the
best knowledge of management of FBL, there is no intention on the
part of the remaining shareholders of FBL, to sell, exchange or
otherwise dispose of a number of shares of Hibernia Common Stock
received in the transaction that would reduce the FBL 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 FBL
as of the same date. For purposes of this representation, any
shares of FBL Common Stock surrendered by dissenters, or exchanged
for cash in lieu of fractional shares of Hibernia Common Stock,
will be treated as outstanding FBL Common Stock on the date of the
transaction. Moreover, shares of FBL Common Stock and shares of
Hibernia Common Stock held by former FBL shareholders and otherwise
sold, redeemed, or disposed of prior or subsequent to the
transaction will be considered in making this representation.
(c) Hibernia has no plan or intention to reacquire any of its
Common Stock issued in the FBL Merger, other than a nominal amount
of shares of Common Stock that may be acquired in ordinary business
transactions (including, but not limited to, open market purchases
and brokers' transactions).
(d) Hibernia has no plan or intention to sell or otherwise
dispose of any of the assets of FBL acquired in the transaction
except for dispositions made in the ordinary course of business.
(e) Any liabilities of FBL assumed by Hibernia and any
liabilities to which the transferred assets of FBL are subject were
incurred by FBL in the ordinary course of its business.
(f) Following the transaction, Hibernia will continue,
substantially unchanged, the banking business of FBL operated
through FBL's banking subsidiaries, Banks, which will be merged
into HNB.
(g) Except for expenses relating to the registration of the
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, FBL, and the
shareholders of FBL will pay their respective expenses, if any,
incurred in connection with the transaction.
(h) There is no intercorporate indebtedness existing between
FBL 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.
(i) No two parties to the transaction are investment
companies as defined in Section 368(a)(2)(F)(iii) and (iv) of the
Code.
(j) FBL 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.
(k) The fair market value of the assets of FBL 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 FBL 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 FBL shareholders in
exchange for their shares of FBL Common Stock. The fractional
share interests of each FBL shareholder will be aggregated, and no
FBL 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 FBL will be separate consideration for, or allocable
to, any of their shares of FBL 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 FBL Merger will qualify as a statutory merger under
the Louisiana Business Corporation Law ("LBCL").
(o) The shareholders of FBL (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 in connection
with the Bank Merger:
(aa) No additional Hibernia Common Stock is being issued or
exchanged on the merger of Banks into HNB. No additional HNB
Common Stock is being issued or exchanged in the merger of Bank
into HNB.
(bb) There is no plan or intention by the shareholder of
Banks, FBL, to sell, exchange or otherwise dispose of a number of
shares of Hibernia Common Stock constructively received in the
transaction that would reduce the Banks shareholder's 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 Banks as of the
same date. For purposes of this representation, any shares of
Banks 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 Banks Common Stock on the date of the transaction.
Moreover, shares of Banks Common Stock and shares of Hibernia
Common Stock held by Banks shareholders and otherwise sold,
redeemed, or disposed of prior or subsequent to the transaction
will be considered in making this representation.
(cc) 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 Banks immediately prior to the Bank
Merger. For purposes of this representation, amounts paid by Banks
to dissenters, Banks assets used to pay its reorganization
expenses, and all redemptions and distributions (except for
regular, normal dividends) made by Banks immediately preceding the
transfer, will be included as assets of Banks held immediately
prior to the transaction.
(dd) 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.
(ee) 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.
(ff) Hibernia has no plan or intention to reacquire any of its
Common Stock constructively issued in the Bank Merger.
(gg) 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 definitive agreements. However,
no Common Stock of HNB will be issued as consideration in any of
the pending acquisitions.
(hh) The liabilities of Banks assumed by HNB and the
liabilities to which the transferred assets of Banks are subject
were incurred by Banks in the ordinary course of business.
(ii) Following the transaction, HNB will continue the historic
business of Banks or will use a significant portion of Banks'
historic business assets in its business.
(jj) 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, Banks and the
shareholders of Banks will pay their respective expenses, if any,
incurred in connection with the transaction.
(kk) There is no intercorporate indebtedness existing between
Hibernia and Banks and their affiliates or between HNB and Banks
that was issued, acquired, or will be settled at a discount.
(ll) No two parties to the transaction are investment
companies as defined in Section 368(a)(2)(F)(iii) and (iv) of the
Code.
(mm) Banks are 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.
(nn) The basis and fair market value of the assets of Banks
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.
(oo) None of the compensation received by any shareholder-
employees of Banks will be separate consideration for, or allocable
to, any of their shares of Banks 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.
(pp) 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 FBL with and into
Hibernia, wherein Hibernia Common Stock is to be exchanged for FBL
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 Banks with and into HNB, wherein Hibernia Common
Stock is to be constructively exchanged for Banks 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 ninety 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 Banks 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 Banks and that, for this purpose, the fair market value
of the net and gross assets of Banks will be determined before
payment by Banks 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 Banks 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 November 4, 1993, the 50 percent continuity of interest test
of Revenue Procedure 77-37, supra, will be met in the FBL Merger
and the Bank Merger. It has been represented by the management of
FBL that the shareholders of FBL 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 FBL Merger there will be a
continuing interest through Common Stock ownership in Hibernia on
the part of the former shareholders of FBL.
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 FBL shareholders
in the FBL 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) of the Code..
The Service has frequently ruled 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, the Service held that the subsidiary
mergers were Section 368(a)(1)(A) reorganizations by reason of
Section 368(a)(2)(D) of the Code (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 Banks or will use a significant portion of
Banks' 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 FBL Merger because Hibernia through its wholly-owned
subsidiary HNB, will continue the banking business indirectly
conducted by FBL.
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 FBL's shareholders will
have already received fair value for their shares, the shares of
Banks Common Stock obtained by Hibernia in the FBL 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 FBL Merger, HNB technically would acquire the assets
of Banks by issuing shares of Hibernia Common Stock to the Banks
shareholder, Hibernia (as the result of the FBL 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 1032 of the Code provides that no gain or loss shall be
recognized to a corporation on the receipt of money or other
property in exchange for stock of such corporation.
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 FBL with and into Hibernia:
(1) Provided the proposed merger of FBL with and into
Hibernia qualifies as a statutory merger under Louisiana Business
Corporation Law, the FBL Merger will be a reorganization within the
meaning of Section 368(a)(1)(A) of the Code. FBL 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 FBL 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 FBL, 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 FBL assets in exchange for Hibernia Common Stock (Section
1032(a) of the Code).
(4) The basis of the assets of FBL in the hands of Hibernia
will, in each case, be the same as the basis of those assets in the
hands of FBL immediately prior to the transaction (Section 362(b)
of the Code).
(5) The holding period of the assets of FBL in the hands of
Hibernia will, in each case, include the period for which such
assets were held by FBL (Section 1223(2) of the Code).
(6) No gain or loss will be recognized by the shareholders of
FBL who receive solely Hibernia Common Stock in exchange for their
shares of FBL Common Stock (Section 354(a)(1) of the Code).
(7) The basis of Hibernia Common Stock to be received by the
shareholders of FBL will be, in each instance, the same as the
basis of the Common Stock of FBL surrendered in exchange therefore
(Section 358(a)(1) of the Code).
(8) The holding period of the Hibernia Common Stock to be
received by the shareholders of FBL in the transaction will include
in each instance, the period during which the FBL Common Stock
surrendered in exchange therefore 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 FBL 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 FBL as of the date of transfer. Any deficit in the
earnings and profits of Hibernia or FBL will be used only to offset
the earning and profits accumulated after the date of transfer.
(11) Cash received by a dissenting shareholder of FBL in
exchange for his or her FBL Common Stock will be treated as having
been received by such shareholder as a distribution in redemption
of his or her Common 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 Banks with and into HNB:
(13) Provided the proposed merger of Banks with and into HNB
qualifies as statutory mergers under the Bank Merger Act, the
acquisition by HNB of substantially all of the assets of Banks
solely in constructive exchange for Hibernia Common Stock, cash for
dissenters, if any, and the assumption by HNB of the liabilities of
Banks, will qualify as a reorganization under the provisions of
Sections 368(a)(1)(A) and 368(a)(2)(D) of the Code. Banks,
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 Banks 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 Banks' liabilities by HNB, since any cash for
dissenters will be distributed to the Banks' 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 Banks in constructive exchange for Hibernia Common Stock, cash
for dissenters, if any, and the assumption of Banks' liabilities
(Section 1032(a) of the Code). (Rev. Rul. 57-278, 1957-1 C.B.
124.)
(16) The basis of the assets of Banks acquired by HNB will be
the same in the hands of HNB as the basis of such assets in the
hands of Banks 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
Banks assets in the hands of HNB and decreased by the sum of the
amount of the liabilities of Banks assumed by HNB and the amount of
liabilities to which the assets of Banks are subject
(Section 1.358-6 of Proposed Regulations).
(18) The holding period of the assets of Banks received by HNB
will, in each instance, include the period for which such assets
were held by Banks (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 Banks as of the date of transfer. Any deficit in the
earnings and profits of Banks 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 Banks Common Stock solely for
Hibernia Common Stock. (Section 354(a)(1) of the Code.)
(21) Banks 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 Banks, as
described above. (Sections 361(a) and 357(a) of the Code.)
(22) Banks 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 Banks 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
FBL will be substantially the same as the federal income tax
treatment to the shareholders of FBL.
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 FBL 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 FBL, Banks,
Hibernia, and HNB other than the state or local tax consequences
enumerated in (1) above.
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
proxystatement 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)
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 KPMG Peat Marwick
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) 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;
(iv) 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;
(v) 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; and
(vi) 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. 3 to be signed on its
behalf by the undersigned, thereunto duly authorized, in the City
of New Orleans, State of Louisiana, on June __, 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. 1 to the Registration Statement has been signed by
the following persons in the capacities indicated on June __, 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
Elton R. King
*
_____________________________ 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.*
23(a) Consent of Patricia C. Meringer, Esq. (included with
Exhibit 5)*
23(b) Consent of Ernst & Young
Consent of KPMG Peat Marwick
24 Powers of Attorney*
________
* Previously filed
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. 33-52249) and related
Prospectus of Hibernia Corporation for the registration of
4,800,000 shares of its common stock to be issued pursuant to its
proposed merger with First Bancorp of Louisiana, 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
June __, 1994
EXHIBIT 23(b)(ii)
CONSENT OF KPMG PEAT MARWICK
We consent to the reference to our firm under the caption "Experts"
in the Registration Statement on Form S-4 of Hibernia Corporation
for the registration of its common stock to be issued pursuant to
its proposed merger with First Bancorp of Louisiana, Inc. and to
the inclusion therein of our report dated February 10, 1994, with
respect to the consolidated financial statements of First Bancorp
of Louisiana, Inc. and Subsidiaries also included therein, filed
with the Securities and Exchange Commission.
s/KPMG PEAT MARWICK
Shreveport, Louisiana
June __, 1994
