<PAGE>
SECURITIES AND EXCHANGE COMMISSION
Washington, D. C. 20549
FORM 10-K
ANNUAL REPORT PURSUANT TO SECTION 13 OR 15(d)
OF THE SECURITIES EXCHANGE ACT OF 1934
For the fiscal year ended December 31, 1993. Commission file No. 1-10294
HIBERNIA CORPORATION
(Exact name of registrant as specified in its charter)
LOUISIANA 72-0724532
(State or other jurisdiction of (I.R.S. Employer
incorporation or organization) Identification No.)
313 CARONDELET STREET, NEW ORLEANS, LOUISIANA 70130
(Address of principal executive offices) (Zip Code)
Registrant's telephone number, including area code: (504) 586-5332
Securities registered pursuant to Section 12(b) of the Act:
CLASS A COMMON STOCK, NO PAR VALUE
(Title of class)
NEW YORK STOCK EXCHANGE
(Name of each exchange on which registered)
Securities registered pursuant to Section 12(g) of the Act: NONE
Indicate by check mark whether the Registrant (1) has filed all reports required
to be filed by Section 13 or 15(d) of the Securities Exchange Act of 1934 during
the preceding 12 months (or for such shorter period that the Registrant was
required to file such reports), and (2) has been subject to such filing
requirements for the past 90 days.
YES X NO
Indicate by check mark if disclosure of delinquent filers pursuant to Item 405
of Regulation S-K is not contained herein, and will not be contained, to the
best of Registrant's knowledge, in definitive proxy or information statements
incorporated by reference in Part III of this Form 10-K or any amendment to this
Form 10-K. [ ]
State the aggregate market value of the voting stock held by
non-affiliates of the Registrant as of February 28, 1994.
Class A Common Stock, no par value - $617,907,428
State the aggregate number of shares outstanding of each of
the Registrant's classes of common stock as of February 28, 1994.
Class A Common Stock, no par value - 83,654,164
DOCUMENTS INCORPORATED BY REFERENCE
Portions of the Registrant's annual report to shareholders for the year ended
December 31, 1993 are incorporated by reference into Parts I and II of this
Report.
Portions of the Registrant's definitive proxy statement, which will be filed
within 120 days of the end of the registrant's fiscal year, are incorporated by
reference into Part III of this Report.
<PAGE>
INDEX TO FORM 10-K
Certain information required by Form 10-K is incorporated by reference
from the Annual Report as indicated below. Only that information expressly
incorporated by reference is deemed filed with the Commission.
PART I
Item 1 Business *
Item 2 Properties *
Item 3 Legal Proceedings *
Item 4 Submission of Matters to a Vote of Security Holders None
Item X Identification of Executive Officers *
PART II
Item 5 Market of the Registrant's Common Equity and Related
Stockholder Matters ***
Item 6 Selected Financial Data ***
Item 7 Management Discussion and Analysis of Financial
Condition and Results of Operations ***
Item 8 Financial Statements and Supplementary Data ***
Item 9 Changes in and Disagreements with Accountants on
Accounting and Financial Disclosure None
PART III(1)
Item 10 Directors and Executive Officers of the Registrant
Item 11 Executive Compensation
Item 12 Security Ownership of Certain Beneficial Owners and Management
Item 13 Certain Relationships and Related Transactions
PART IV
Item 14 Exhibits, Financial Statement Schedules and Reports on Form 8-K
(a) Financial Statements
Independent Auditors' Report ***
Hibernia Corporation and Subsidiary:
Consolidated Balance Sheets - December 31,
1993 and 1992 ***
Consolidated Income Statements - Years
Ended December 31, 1993, 1992 and 1991 ***
Consolidated Statements of Changes in
Shareholders' Equity - Years Ended
December 31, 1993, 1992 and 1991 ***
Consolidated Statements of Cash Flows -
Years Ended December 31, 1993, 1992
and 1991 ***
Notes to Consolidated Financial Statements ***
(b) Reports on Form 8-K **
Item 5 Other Event June 24, 1993
Item 5 Other Event September 13, 1992
Item 5 Other Event December 7, 1993
Item 5 Other Event December 10, 1993
Item 5 Other Event December 17, 1993
Item 5 Other Event January 20, 1993
(c) Exhibits **
* This information is included in the Form 10-K and is not incorporated by
reference to the Annual Report.
** Reports on Form 8-K and Exhibits have been separately filed with the
Commission.
*** This information is included in Exhibit 13.
(1) The material required by Items 10 through 13 is incorporated by reference to
the Company's definitive Proxy Statement pursuant to Instruction G of Form 10-K
The Company will file a definitive Proxy Statement with the Commission by April
30, 1994, provided, however, that the "Report of Executive Compensation
Committee" and the "Performance Graph" contained therein are not incorporated
herein by reference.
<PAGE>
PART I
ITEM 1. BUSINESS
Hibernia Corporation ("Company") is a bank holding company
organized in 1972 and, as of December 31, 1993, was the second
largest bank holding company in Louisiana with assets of $4.8
billion and deposits of $4.1 billion. Hibernia National Bank, the
Company's sole bank subsidiary from and after December 31, 1992,
("Louisiana Bank") was chartered in 1933 and currently has 101
branches located throughout Louisiana. On December 31, 1992, the
Company completed the sale of its former bank subsidiary, Hibernia
National Bank in Texas, ("Texas Bank"), to Comerica Incorporated.
Hibernia Corporation's most significant asset is its investment in
the Louisiana Bank, and its major source of income in 1994 is
expected to be interest on its deposits in the Louisiana Bank and
potential dividends from the Louisiana Bank.
The Louisiana Bank offers a comprehensive range of retail and
commercial banking services and products. These products include
personal and commercial checking, savings and time deposits, money
market deposit accounts, money transfer, safe deposit facilities,
access to automated teller machines, short- and long-term credit
facilities, residential and commercial mortgages to individuals and
businesses and cash management services. The Louisiana Bank's
small business banking division focuses on the needs of businesses
with sales of less than $5 million. This division offers an array
of small business banking products and services, including the
TABBS packaged deposit product.
The Louisiana Bank provides financial risk management products
and advisory services to its customers. These products are
designed to assist customers in managing their exposure in the
areas of interest rate, currency and commodity risks. The
Louisiana Bank also offers repurchase agreements, bankers
acceptances, Eurodollar access, safekeeping of securities, U.S.
Government and Government agency obligations, tax-free municipal
obligations, reverse repurchase agreements, letters of credit and
collection and foreign exchange transactions. At December 31,
1993, the Louisiana Bank performed mortgage servicing, which
includes acceptance and application of mortgage loan and escrow
payments, for approximately 25,000 residential loans.
The trust division of the Louisiana Bank offers a variety of
agency, fiduciary, investment advisory, employee benefit and
custodial services. Through Tower Investors, Inc., the Louisiana
Bank sells fixed and variable annuities in retail markets, although
recent court rulings may require that such annuities be offered
through a third party in the future. The Louisiana Bank also
provides retail and discount brokerage services through Hibernia
Investment Securities, Inc. ("HISI"), a registered broker-dealer
and member of the National Association of Securities Dealers, Inc.
COMPETITION
There is significant competition among banks and bank holding
companies in Louisiana. The Louisiana Bank competes with national
and state banks for deposits, loans, and trust accounts and with
savings and loan associations and credit unions for loans and
deposits. In addition, the Louisiana Bank competes with other
providers of financial services, including finance companies,
institutional buyers of commercial paper, money market funds,
brokerage firms, investment companies, insurance companies and
several governmental agencies, which are all actively engaged in
marketing various types of loans, commercial paper, short-term
obligations, investments and other services. Commercial banking
institutions located outside Louisiana compete for banking business
in the Louisiana Bank's marketing area.
In connection with the sale of the Texas Bank, the Company
agreed not to engage in banking business in the state of Texas for
a three-year period commencing December 31, 1992.
SUPERVISION AND REGULATION
The banking industry is extensively regulated under both
federal and state law. The Company is subject to regulation under
the Bank Holding Company Act of 1956 ("BHCA") and to supervision by
the Board of Governors of the Federal Reserve System ("FRB"). The
BHCA requires the Company to obtain the prior approval of the
Federal Reserve Board for bank acquisitions, limits the acquisition
of shares of out-of-state banking organizations unless permitted by
state law and prescribes limitations on the nonbanking activities
of the Company. The Louisiana Bank is subject to regulation and
examination by the Office of the Comptroller of the Currency
("OCC").
The Federal Deposit Insurance Corporation Improvement Act of
1991 ("FDICIA") further expanded the regulatory and enforcement
powers of bank regulatory agencies. Among the significant
provisions of FDICIA is the requirement that bank regulatory
agencies prescribe standards relating to internal controls,
information systems, internal audit systems, loan documentation,
credit underwriting, interest rate exposure, asset growth,
compensation, fees and benefits. FDICIA mandates annual
examinations of banks by their primary regulators.
In June 1993, the OCC terminated a consent order under which
the Louisiana Bank had been operating since 1991. In November
1993, the FRB terminated an agreement under which the Company had
been operating since 1991. These terminations were primarily the
result of several major initiatives undertaken in 1992 designed to
restore the Company to financial health. These initiatives
included hiring a new chief executive officer and forming a new
management team; selling the Texas Bank; accelerating the
disposition of problem assets; restructuring its outstanding bank
debt; and raising new capital. As a result, at December 31, 1992,
the regulatory ratios of both the Louisiana Bank and the Company
exceeded regulatory minimums; all debt outstanding to the bank
lenders had been converted to common stock; and the Company raised
an additional $79 million in capital through a rights offering that
was fully subscribed. During 1993, the Company continued to reduce
the level of problem assets and earnings levels increased
significantly.
The banking industry is affected by the monetary and fiscal
policies of the Federal Reserve Board. An important function of
the Federal Reserve Board is to regulate the national supply of
bank credit to moderate recessions and to curb inflation. Among
the instruments of monetary policy used by the Federal Reserve
Board to implement its objectives are: open market operations in
U.S. Government securities, changes in the discount rate on bank
borrowings and changes in reserve requirements on bank deposits.
HISI is regulated by the Securities and Exchange Commission,
the National Association of Securities Dealers, Inc., and the
Louisiana Commissioner of Securities.
<PAGE>
LOAN PORTFOLIO
The amounts and percentages of loans outstanding by types of loans
(including unearned discount) are as follows:
<TABLE>
<CAPTION>
December 31
($ in thousands) 1993 1992 1991 1990 1989
------------------ ------------------ ------------------ ------------------ ------------------
% of % of % of % of % of
Amount Total Amount Total Amount Total Amount Total Amount Total
----------- ------ ----------- ------ ----------- ------ ----------- ------ ----------- ------
<S> <C> <C> <C> <C> <C> <C> <C> <C> <C> <C>
Commercial, financial
and agricultural $592,362 25 % $684,928 29 % $1,078,096 28 % $1,302,317 25 % $1,542,054 32 %
Real estate - construction 16,689 1 7,973 - 66,092 2 107,153 2 163,954 4
Real estate - mortgage 1,212,338 52 1,302,942 55 1,866,516 49 2,772,542 53 2,277,700 48
Consumer 415,955 18 317,646 14 722,303 19 944,563 18 727,988 15
All other 93,675 4 52,351 2 69,288 2 84,650 2 43,311 1
Total $2,331,019 100 % $2,365,840 100 % $3,802,295 100 % $5,211,225 100 % $4,755,007 100 %
</TABLE>
<PAGE>
SELECTED LOAN MATURITIES
The following table shows selected categories of loans outstanding as
of December 31, 1993, which, based on remaining scheduled repayments of
principal, are due in the periods indicated. The amounts due after one year
are classified according to the sensitivity to changes in interest rates.
<TABLE>
<CAPTION>
Maturing
---------------------------------------------------------------
After One
Within But Within After
($ in thousands) One Year Five Years Five Years Total
---------- ---------- ---------- ---------
<S> <C> <C> <C> <C>
Commercial, financial and
agricultural $285,904 $209,802 $96,656 $592,362
Real estate - construction 13,451 3,042 196 $16,689
Total $299,355 $212,844 $96,852 $609,051
</TABLE>
<TABLE>
<CAPTION>
Interest Sensitivity
--------------------------
Fixed Variable
Rate Rate
--------------------------
<S> <C> <C>
Due after one but within five years $36,236 $176,608
Due after five years 20,156 76,696
$56,392 $253,304
</TABLE>
<PAGE>
<TABLE>
SUMMARY OF LOAN LOSS EXPERIENCE
<CAPTION>
Year Ended December 31
($ in thousands) 1993 1992 1991 1990 1989
-------- -------- -------- ------- -------
<S> <C> <C> <C> <C> <C>
Balance of reserve for
possible loan losses
at beginning of period $185,061 $208,330 $152,510 $67,540 $62,651
Reserves acquired through
mergers - - - 3,000 6,700
Loans charged off:
Commercial, financial,
and agricultural (9,915) (36,502) (40,604) (35,135) (17,670)
Real estate--construction (210) (1,106) (3,757) (2,208) (3,217)
Real estate--mortgage (8,669) (32,762) (67,471) (30,089) (8,778)
Consumer (15,489) (17,959) (18,480) (22,021) (12,646)
All other - (278) (639) (105) (62)
Total loans charged
off (34,283) (88,607) (130,951) (89,558) (42,373)
Recoveries of loans
previously charged off:
Commercial, financial,
and agricultural 6,076 5,711 2,382 808 959
Real estate--construction 171 243 48 - 16
Real estate--mortgage 4,730 4,128 1,987 191 688
Consumer 3,566 4,121 4,009 3,694 2,417
All other 22 366 15 10 82
Total recoveries 14,565 14,569 8,441 4,703 4,162
Net loans charged off (19,718) (74,038) (122,510) (84,855) (38,211)
Additions to reserve
charged to operating
expense (6,200) 66,275 178,330 166,825 36,400
Reduction due to sale
of Texas bank - (15,506) - - -
Balance at end of period $159,143 $185,061 $208,330 $152,510 $67,540
Ratio of net charge-offs
to average loans outstanding 0.88% 2.51% 2.63% 1.66% 0.85%
</TABLE>
<PAGE>
ALLOCATION OF ALLOWANCE FOR LOAN LOSSES
The reserve for possible loan losses has been allocated according to
the amount deemed to be reasonably necessary to provide for the possibility
of losses being incurred within the categories of loans set forth in the table
below. See "Reserve and Provision for Possible Loan Losses" in Management's
Discussion and Analysis of Financial Condition and Results of Operations in the
Registrant's Annual Report to Shareholders for a discussion of the factors
which influenced management's judgement in determining the amount of the
provision for loan losses.
<TABLE>
<CAPTION>
($ in thousands) 1993 1992 1991 1990 1989
-------- -------- -------- -------- -------
<S> <C> <C> <C> <C> <C>
Reserve at end of period:
Commercial, financial and
agricultural $52,866 $50,094 $76,212 $41,883 $22,985
Real estate-construction 688 544 4,983 5,240 3,361
Real estate-mortgage 57,910 51,160 68,125 62,193 19,465
Consumer 13,879 17,163 15,679 25,855 13,367
Not allocated 33,800 66,100 43,331 17,339 8,362
$159,143 $185,061 $208,330 $152,510 $67,540
</TABLE>
<PAGE>
SHORT-TERM BORROWINGS
The following table summarizes pertinent data related to federal funds
purchased and securities sold under agreements to repurchase for 1993, 1992
and 1991. Funds purchased and securities sold under agreements to repurchase
generally mature within one to 14 days from the transaction date.
<TABLE>
<CAPTION>
($ in thousands) 1993 1992 1991
-------- -------- --------
<S> <C> <C> <C>
Outstanding at December 31 $137,986 $111,902 $152,124
Maximum month-end outstandings 148,124 293,430 459,733
Average daily outstandings 125,471 195,425 276,703
Average rate during year 2.9% 3.3% 5.9%
Average rate at year end 2.8% 2.9% 3.9%
</TABLE>
<PAGE>
MATURITIES OF LARGE-DENOMINATION CERTIFICATES OF DEPOSIT
The following table shows large denomination certificates of deposits as
of December 31, 1993, by remaining maturity:
<TABLE>
<CAPTION>
($ in thousands) Domestic Foreign
-------- -------
<S> <C> <C>
3 months or less $454,415 $3,417
Over 3 months through 6 months 152,397 -
Over 6 months through 12 months 11,854 -
Over 12 months through 5 years 28,036 -
Over 5 years 1,990 -
Total $648,692 $3,417
</TABLE>
<PAGE>
ITEM 2. PROPERTIES
The Company's executive offices are located in downtown New Orleans,
Louisiana, in the downtown branch office of the Louisiana Bank. The Company
leases its main office building and operations center under terms of
sale/leaseback agreements. The Louisiana Bank owns or holds leases for its
domestic branch locations.
The Company and the Louisiana Bank consider all properties owned or leased
to be suitable and adequate for their intended purposes and consider the terms
of existing leases to be fair and reasonable.
On December 31, 1993 the Louisiana Bank reported miscellaneous property
with a net book value of $27,920,000. (See "Asset Quality" in Management's
Discussion and Analysis of Financial Condition and Results of Operations in the
Registrant's Annual Report for a further discussion of these properties.) The
properties include properties acquired from borrowers either as a result of
foreclosures or voluntarily in full or partial satisfaction of indebtedness
previously contracted, and in-substance foreclosures. These properties and
interests generated approximately $2,188,000 of net expense in 1993.
ITEM 3. LEGAL PROCEEDINGS
The Company and the Louisiana Bank are parties to certain pending legal
proceedings arising from matters incidental to their business and other matters
discussed below. Reserves have been established for potential litigation losses
of approximately $11,500,000 at December 31, 1993. Management believes that the
aggregate unreserved liability or loss, if any, of legal proceedings will not
have a significant effect on the consolidated financial condition of the
Company.
Except for such proceedings incidental to the business of the Company and
its subsidiary, there are no pending material legal proceedings except as
described below:
On October 23,1990, suit was filed in the United States District Court for
the Eastern District of Louisiana under the name Gila Feinberg, Plaintiff, v.
Hibernia Corporation and Martin C. Miler, Defendants. Mr. Miler is the former
Chairman and Chief Executive Officer of the Company, which positions he resigned
in 1991. Plaintiff brought this action on behalf of all shareholders who
purchased common stock of the Company between March 19, 1990, and October 16,
1990, inclusive ("Class Period"), excluding directors and officers of the
Company and related persons. The complaint alleges that the market value of the
Company's common stock was artificially inflated during the Class Period by
reason of false and misleading news releases and public statements and seeks to
recover unspecified damages for the losses allegedly sustained plus interest,
attorney's fees and costs. In March 1992, plaintiff amended its complaint to
extend the Class Period to July 30, 1991, the date on which the Louisiana Bank
entered into the consent order with the OCC. The amended complaint, which also
names the Louisiana Bank, certain individual directors, former directors,
former officers and the Company's insurance carriers as defendants,
alleges that, during the Class Period, the Company made false and misleading
statements and failed to disclose material facts, including the
findings of OCC examination reports, which allegedly continued to
artificially inflate the market value of the Company's common stock.
The amended complaint further alleges that such actions and omissions
constituted (i) a violation of the Louisiana Securities Law, (ii) negligence
under Louisiana law, and (iii) fraud and deceit. This suit is in the discovery
stage. In the opinion of management, the allegations in this case are without
merit, and the Company intends to contest the suit vigorously.
ITEM X. IDENTIFICATION OF EXECUTIVE OFFICERS
STEPHEN A. HANSEL, 46, serves as President and Chief Executive Officer of
the Registrant and Hibernia, which positions he assumed in March 1992. Prior to
joining the Registrant, Mr. Hansel served as Chief Financial Officer of Barnett
Banks, Inc., a bank holding company based in Jacksonville, Florida with assets
of approximately $33 billion, which position he held since 1982. Mr. Hansel was
named Senior Executive Vice President in 1985.
ROBERT W. CLOSE, 51, Executive Vice President, Treasurer and Chief
Financial Officer of the Registrant, manages the investment division of
Hibernia. Mr. Close has been employed by the Registrant and/or its subsidiaries
since 1976, most recently as an Executive Vice President of Hibernia since 1987,
and assumed the position of Chief Financial Officer and Treasurer of the
Registrant in August 1991.
K. KIRK DOMINGOS III, 52, Executive Vice President and Administrative
Executive of Hibernia, is responsible for the overall administrative functions
of the Bank. Mr. Domingos has been employed by the Registrant and/or its
subsidiaries since August 1985 and assumed the position of Executive Vice
President and Administrative Executive of Hibernia in August 1991.
C. GERON HARGON, 48, serves as Executive Vice President/Commercial Banking
for Hibernia and has served in that position since April 1992. Mr. Hargon has
been employed by the Registrant and/or its subsidiaries in various capacities
since 1976, most recently as Chief Operating Officer of Hibernia from August
1991 to April 1992, as Senior Vice President and Manager of Commercial Banking
of Hibernia Texas from 1990 to 1991 and Senior Vice President, Senior Lending
Officer for the Southwest Louisiana Group and Manager of Commercial Banking for
Hibernia from 1986 to 1990.
RUSSELL S. HOADLEY, 49, serves as Senior Vice President/Public Affairs and
Marketing for Hibernia and has served in that position since July 1993. Prior
to joining Hibernia, Mr. Hoadley served as Vice President Director of Corporate
Communications for Barnett Banks, Inc., a bank holding company based in
Jacksonville, Florida with assets of approximately $33 billion, which position
he held from 1988 to June 1993.
SCOTT P. HOWARD, 46, serves as Executive Vice President/Corporate and
International Banking for Hibernia and has served in that position since May
1992. Prior to joining Hibernia in 1992, Mr. Howard served as Chief Operating
Officer of Smile, Inc., a New York-based computer-based information service
during 1991 and as President of GHM Architectural Aluminum, Inc., a New York-
based manufacturer of high-design aluminum door frames. From 1982 until 1990,
Mr. Howard served as a Vice President of J.P. Morgan in several commercial and
investment banking positions, including Vice President of Corporate Financial
Services from 1987 to 1988 and Corporate Financial Advisor to U.S. Eastern Banks
from 1989 to 1990.
GERALD F. PAVLAS, 44, serves as Executive Vice President and Chief Credit
Officer of Hibernia, positions which he has held since May 1992. Prior to 1992,
Mr. Pavlas served as Senior Vice President of Hibernia National Bank in Texas,
a former subsidiary of the Registrant, as manager of Credit Risk Management from
August 1990 to May 1992 and as Manager of Loan control from January 1990 through
August 1990. Prior to joining Hibernia, Mr. Pavlas served as Executive Vice
President and Chief Credit Officer of BancTEXAS Group, Inc., a bank holding
company headquartered in Dallas, Texas from 1988 to 1990 and as Executive Vice
President and Manager of the Special Assets Division for that bank from 1987 to
1988.
KENNETH A. RAINS, 44, serves as Executive Vice President and Trust Group
Executive of Hibernia, positions which he has held since March 1993. Mr. Rains
has been employed by the Registrant and/or its subsidiaries in various
capacities in the trust department since 1983, most recently as Senior Vice
President and Manager of the Trust Division from December 1991 to March 1993.
RONALD E. SAMFORD, JR., 41, serves as Executive Vice President, Controller
and Chief Accounting Officer of the Registrant, which positions he has held
since November 1992. Prior to joining Hibernia, Mr. Samford served as the
Senior Vice President and Chief Accounting Officer of Team Bank, a bank
headquartered in Forth Worth, Texas from August 1990 to November 1992 and as
Senior Audit Manager of Price Waterhouse, a public accounting firm, from 1986
to 1990.
JOHN E. SMITH, 44, serves as Executive Vice President and Retail Banking
Executive of Hibernia, which positions he has held since September 1991. Mr.
Smith has been employed by the Registrant and/or its subsidiaries in various
capacities since 1981, most recently as Senior Vice President and Manager of the
Consumer Banking Division of Hibernia Texas from 1989 until 1991, Senior Vice
President and Manager of the Dealer Services Division of Hibernia from 1987 to
1989, and Vice President and Manager of the Corporate Banking Division of
Hibernia from 1986 to 1987.
<PAGE>
Signatures
Pursuant to the requirements of Section 13 or 15(d) of the Securities
Exchange Act of 1934, the Registrant has duly caused this report to be signed on
its behalf by the undersigned, thereunto duly authorized.
HIBERNIA CORPORATION
(Registrant)
/s/ Stephen A. Hansel
Stephen A. Hansel, President and
Chief Executive Officer
Pursuant to the requirements of the Securities Exchange Act of 1934, this
report has been signed on March 28, 1994, by the following persons on behalf
of the Registrant and in the capacities indicated.
/s/ Robert W. Close /s/ Ron E. Samford, Jr.
Robert W. Close, Ron E. Samford, Jr., Controller
Treasurer (principal financial (principal accounting
officer) officer)
W. James Amoss, Jr.*, Director John P. Laborde*, Director
Robert H. Boh*, Director Sidney W. Lassen*, Director
J. Terrell Brown*, Director Donald J. Nalty*, Director
Brooke H. Duncan*, Director Robert T. Ratcliff*, Director
Richard W. Freeman, Jr.*, Director Joe D. Smith, Jr.*, Director
Robert L. Goodwin*, Director James H. Stone*, Director
Stephen A. Hansel*, Director Virginia E. Weinmann*, Director
Dick H. Hearin*, Director E. L. Williamson*, Director
Robert T. Holleman*, Director Robert E. Zetzmann*, Director
Hugh J. Kelly*, Director
*By: /s/ Patricia C. Meringer
Patricia C. Meringer
Attorney-in-fact
<PAGE>
EXHIBIT INDEX
FORM 10-K FOR FISCAL YEAR
ENDED DECEMBER 31, 1993
Exhibit
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)
4.1 Pursuant to Item 601(b) (4) (iii) of
Regulation S-K, instruments defining the
rights of holders of long-term debt of the
Registrant and its consolidated subsidiaries
are not being filed as the total amount of
securities authorized thereunder does not
exceed 10% of the total assets of the
Registrant and its subsidiaries on a
consolidated basis. The Registrant hereby
agrees to furnish copies of such instruments
to the Commission upon request.
10.13 Exhibit 10.13 to the Annual Report on Form 10-
K for the fiscal year ended December 31, 1988,
filed with the Commission by the Registrant
(Commission File No. 0-7220) is hereby
incorporated by reference (Deferred
Compensation Plan for Outside Directors of
Hibernia Corporation and Its Subsidiaries, as
amended to date)
10.14 Exhibit 10.14 to the Annual Report on Form 10-
K for the fiscal year ended December 31, 1990,
filed with the Commission by the Registrant
(Commission File No. 0-7220) is hereby
incorporated by reference (Hibernia
Corporation Executive Life Insurance Plan)
10.16 Exhibit 4.7 to the Registration Statement on
Form S-8 filed with the Commission by the
Registrant (Registration No. 33-26871) is
hereby incorporated by reference (Hibernia
Corporation 1987 Stock Option Plan, as amended
to date)
10.28 Exhibits M and N to the Company's definitive
proxy statement dated August 17, 1992 relating
to its 1992 Annual Meeting of Shareholders
filed with the Commission by the Registrant is
hereby incorporated by reference (Warrant
Agreement dated as of May 27, 1992 among the
Registrant, The Chase Manhattan
Bank (National Association) and certain other
lenders, including the Form of Warrant
attached thereto)
10.29 Exhibit L to the Registrant's definitive proxy
statement dated August 17, 1992 relating to
its 1992 Annual Meeting of Shareholders filed
with the Commission by the Registrant is
hereby incorporated by reference (Registration
Rights Agreement dated as of May 27, 1992
among the Registrant, The Chase Manhattan Bank
(National Association) and certain other
lenders, as amended to date)
10.30 Exhibit 10.30 to a Current Report on Form 8-K
dated July 17, 1992 filed by the Registrant
with the Commission is hereby incorporated by
reference (Stock Purchase Agreement dated as
of July 17, 1992 between the Registrant,
Hibernia National Bank in Texas and Comerica
Incorporated)
10.31 Exhibit 10.31 to a Current Report on Form 8-K
dated September 15, 1992 filed by the
Registrant with the Commission is hereby
incorporated by reference (Amendment to Stock
Purchase Agreement dated September 10, 1992
between Registrant and Comerica Incorporated)
10.34 Exhibit C to the Registrant's definitive proxy
statement dated August 17, 1992 relating to its
1992 Annual Meeting of Shareholders filed by the
Registrant with the Commission is hereby
incorporated by reference (Long-Term Incentive
Plan of Hibernia Corporation)
10.35 Exhibit A to the Registrant's definitive proxy
statement dated March 23, 1993 relating to its
1993 Annual Meeting of Shareholders filed by the
Registrant with the Commission is hereby
incorporated by reference (1993 Director Stock
Option Plan of Hibernia Corporation)
10.36 Employment agreement between Stephen A. Hansel
and Hibernia Corporation
13 1993 Annual Report to security holders of the
Registrant. (Those portions incorporated by
reference.)
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 Consent of Independent Auditors
24 Powers of Attorney
28.5 Exhibit 28.5 to the Annual Report on Form 10-K
on June 26, 1992 is hereby incorporated by
reference (Annual Report of the Retirement
Security Plan for the fiscal year ended
December 31, 1991 )
28.10 Exhibit 28.10 to a registration statement on
Form S-3 (Registration Statement No. 33-55844)
is hereby incorporated by reference (Agreement
dated as of November 11, 1992 between and
among the Company, certain of the Company's
bank group lenders, and certain institutional
and other investors)
28.11 Exhibit 28.11 to Amendment No. 1 to
Registration Statement on Form S-3
(Registration Statement No. 33-55844) is
hereby incorporated by reference (Lock-Up
Agreement between and among certain of the
Company's bank group lenders and certain of
the institutional and other investors party to
the Agreement)
28.12 Exhibit 28.12 to Current Report on Form 8-K
dated June 22, 1993 is hereby incorporated by
reference (News Release issued by the
Registrant).
28.13 Exhibit 28.13 to Current Report on Form 8-K
dated September 10, 1993 filed by the
Registrant with the Commission is hereby
incorporated by reference (News Release issued
by the Registrant on July 27, 1993).
28.14 Exhibit 28.14 to Current Report on Form 8-K
dated December 9, 1993 filed by the Registrant
with the Commission is hereby incorporated by
reference (News Release issued by the
Registrant on November 3, 1993)
28.15 Exhibit 28.15 to Current Report on Form 8-K
dated December 9, 1993 filed by the Registrant
with the Commission is hereby incoporated by
reference (News Release issued by the
Registrant on November 4, 1993)
28.16 Exhibit 28.16 to Current Report on Form 8-K
dated December 9, 1993 filed by the Registrant
with the Commission is hereby incorporated by
reference (News Release issued by the
Registrant on November 4, 1993)
28.17 Exhibit 28.17 to Current Report on Form 8-K
dated December 17, 1993 filed by the
Registrant with the Commission is hereby
incorporated by reference (News Release issued
by the Registrant on December 6, 1993)
<PAGE>
EXHIBIT 10.36
EMPLOYMENT AGREEMENT
AGREEMENT (this "Agreement"), effective as of the 26th day of
March, 1992, by and among Hibernia Corporation (the "Corporation"),
Hibernia National Bank (the "Bank") (the Corporation and the Bank
hereinafter collectively referred to as the "Employer"), and
Stephen A. Hansel (the "Executive").
1. Employment. The Corporation hereby employs the
Executive as President and Chief Executive Officer of the
Corporation to perform such duties, consistent with the Executive's
job title, as may be prescribed from time to time by the Board of
Directors of the Corporation, and the Bank hereby employs the
Executive as President and Chief Executive Officer of the Bank to
perform such duties, consistent with the Executive's job title, as
may be prescribed from time to time by the Board of Directors of
the Bank; provided that if Executive becomes disabled within the
meaning of the Corporation's Executive Long-Term Disability Plan
but for the fulfillment of any time period required thereby, the
Corporation and the Bank may reassign any and all of Executive's
duties as President and Chief Executive Officer to another
individual until such disability is terminated or Executive's
employment is terminated. The Executive accepts such employment
and agrees during the term of this Agreement to devote his full
time and attention during normal business hours to the performance
of such duties for the Employer, except to the extent he is
relieved from doing so pursuant to the provision of the preceding
sentence.
2. Term. The term of the Executive's employment hereunder
shall commence as of March 26, 1992 and continue for a term of
three years thereafter; provided, however, that the term of such
employment shall, unless otherwise terminated by notice given by
the Employer or the Executive on or before any anniversary of the
date of commencement of such employment, be automatically extended
for an additional year upon each anniversary thereof.
3. Compensation. As compensation for his services, the Bank
(or, if the Bank is unable to do so for any reason, the
Corporation) shall pay the Executive:
(a) an annual salary (the "Base Salary") initially at
the rate of $450,000 per annum, pro rated during 1992 to reflect
the commencement of employment on March 26, 1992, and payable in
substantially equal semimonthly installments, such Base Salary to
be adjusted (but not below the initial Base Salary provided herein)
from time to time in accordance with action of the Executive
Compensation Committee of the Board of Directors of the Corporation
(the "Committee"); and
(b) a one-time-only signing bonus of $100,000 payable as
soon as practicable upon commencement of the Executive's employment
by the Employer.
In addition to the Base Salary and bonus payable to the Executive
pursuant to subparagraphs 3(a) and (b) hereof, the Executive shall
be eligible to receive, during each year of his employment by the
Employer hereunder commencing in 1993 (with respect to the
Corporation's 1992 fiscal year) a bonus of up to 75% of his Base
Salary, and, with respect to fiscal years after 1993, a bonus in an
amount to be determined from time to time by the Committee. Such
bonus shall be payable, with respect to each fiscal year of the
Corporation, not later than 90 days following the end of such
fiscal year, shall be expressed and payable as a percentage of the
Base Salary paid to the Executive during the preceding fiscal year,
and shall be based upon the Executive's achievement of certain
goals. The respective goals and levels of bonus payable shall be
agreed to between the Executive and the Committee and shall be set
forth from time to time in an addendum to this Agreement.
Notwithstanding the foregoing, the Executive shall be entitled to
and shall receive a bonus of a minimum of $45,000 not later than
March 31, 1993 with respect to the Corporation's 1992 fiscal year.
In addition to the compensation payable as described above,
the Executive shall be entitled to participate in such employee
benefit plans as may generally be made available to senior
executive officers of the Employer, including, but not by way of
limitation, the Corporation's Executive Life Insurance Plan and its
Executive Long-Term Disability Plan.
The Executive shall be reimbursed for the initiation fee (but
not any dues or other similar charges) for one club of his choice
in the New Orleans area and, subject to prior approval by the
Committee, such other club initiation fees as the Committee shall
have approved.
The Executive shall be reimbursed for the cost of
installation, maintenance and monitoring of an appropriate home
security system for his residence in the New Orleans area;
provided, however, that such reimbursement shall be made only after
approval by the Committee as to the amount of such reimbursement
and the appropriateness of the system.
The Executive shall be entitled to be reimbursed the
reasonable fees and expenses incurred by him in having this
Agreement reviewed by counsel.
4. Stock Options.
(a) Executive acknowledges that the Corporation has
granted to the Executive an option, pursuant to the Corporation's
1987 Stock Option Plan, as amended, (the "Plan") to purchase an
aggregate of 400,000 shares of Class A Common Stock of the
Corporation at a price per share of $4.1875, such price being the
mean between the high and low reported sales price for shares of
the Corporation's Common Stock on the New York Stock Exchange on
the effective date of this Agreement. Such option is subject to
all of the terms and conditions of the Plan, is evidenced by
separate instruments containing all relevant terms and conditions,
and becomes exercisable in accordance with the following schedule:
First Exercise Date Shares Exercisable
March 26, 1994 23,880 (Incentive Stock Option)
176,120 (Nonstatutory Stock Option)
March 26, 1995 23,880 (Incentive Stock Option)
76,120 (Nonstatutory Stock option)
March 26, 1996 23,880 (Incentive Stock Option)
76,120 (Nonstatutory Stock Option)
For purposes of this paragraph 3, the terms "Incentive Stock Option"
and "Nonstatutory Stock Option" shall have the meanings set forth in
the Plan.
(b) In addition to the options described in subparagraph
(a) of this Paragraph 3, the Executive will be granted options to
purchase 300,000 shares of the Corporation's Common Stock on the
first anniversary of the effective date of this Agreement, and
300,000 shares on the second anniversary of the effective date of
this Agreement. Such grant or grants will be subject, among other
things, to any restrictions or limitations imposed by or in
connection with the arrangements and agreements entered into between
the Corporation and the group of banks led by The Chase Manhattan
Bank (National Association) (the "Bank Group") relating to the
restructuring of the Corporation's debt to the Bank Group, but shall
be on terms no less favorable to Executive than the terms of the
options granted as of March 26, 1992 and shall provide that any
option may be exercised after any Termination Date (as defined in
Paragraph 6(d) hereof) of employment of Executive for a period of
not less than three months (in the case of any incentive stock
option) or four months (in the case of any other option) from such
Termination Date. On the respective dates of grant, the number of
shares purchasable pursuant to the options to be granted to the
Executive pursuant to this provision shall be adjusted by a
percentage equal to the percentage, if any, by which the aggregate
number of shares of the Corporation's Common Stock outstanding on
such grant date, (i) less the number of shares of Common Stock of
the Corporation issued upon conversion of Preferred Stock issued to
the Bank Group and (ii) plus any outstanding Common Stock
equivalents that are exchangeable for or convertible into shares of
Common Stock of the Corporation without the payment of additional
consideration, exceeds or is less than the number of shares of the
Corporation's Common Stock outstanding as of December 31, 1992. It
is understood that by virtue of the above adjustment, among other
things, any stock dividend, stock split or other reclassification
which has the effect of increasing the number of outstanding shares
of Common Stock of the Corporation shall increase proportionately,
and any reverse split or other reclassification which has the effect
of decreasing the number of outstanding shares of Common Stock of
the Corporation shall reduce proportionately, the number of shares
purchasable upon exercise of such options. The aggregate number of
shares purchasable upon exercise of the options granted in each
year, following adjustment as set forth above, shall be set forth on
a schedule attached hereto and signed by the parties hereto.
(c) The Corporation hereby undertakes to use its best efforts
to obtain any consent of the Bank Group to the terms of the options
granted pursuant to subparagraph (b) of this paragraph 3 as may be
required under the terms of the restructuring. If such consent is
not obtained and Executive is unable to receive the full number of
options set forth in subparagraph (b) or receives options with terms
less favorable than those options grant as of March 26, 1992, the
Corporation will use its best efforts to provide to Executive a
substantially similar benefit or a benefit having equivalent
economic value as Executive would have received if such consent had
been obtained, the provision of which benefit is acceptable to, or
is not subject to the approval of, the Bank Group.
5. Relocation Expenses. In addition to the foregoing
compensation, the Bank shall reimburse the Executive for relocation
expenses incurred by the Executive in connection with the relocation
of his residence from Jacksonville, Florida, to New Orleans,
Louisiana, subject to and in accordance with the provisions and
limitations of the Hibernia Corporation Relocation Assistance New
Hire Program. Notwithstanding the foregoing, the Executive shall be
entitled, at a minimum, to:
(a) Transportation of household items and vehicles to his
new residence by a moving firm selected by the Employer;
(b) Temporary living arrangements in New Orleans,
including housing, long distance calls, car rental and all meal,
laundry and dry cleaning expenses for up to 180 days from the
effective date of this Agreement;
(c) Reimbursement for one trip to the Executive's prior
residence every three weeks during the temporary living period;
(d) Reimbursement of duplicate expenses, such as
homeowners' insurance, during the temporary living period;
(e) Purchase or arrangement for the purchase of the
Executive's house located at 10570 Scott Mill Road, Jacksonville,
Florida in accordance with the Corporation's relocation policy at
the value established in accordance with the appraisal or appraisals
obtained pursuant to that policy;
(f) Reimbursement of all non-recurring customary
purchaser's closing costs incurred in connection with the
Executive's purchase of a residence in New Orleans, including but
not limited to appraisal fees; credit report fees; inspection fees,
if required by the appraiser or the lender; abstract fees;
attorneys' fees; recording fees; documentary stamps; survey;
mortgage title insurance policy; pest inspection fee; and document
preparation fee; but excluding mortgage points or loan origination
fees; prepaid items such as hazard and flood insurance, real estate
taxes, private mortgage insurance premiums and prepaid interest;
(g) Reimbursement of up to two discount points and an
origination fee on financing the purchase of the Executive's new
residence in New Orleans; and
(h) Reimbursement of up to $50 per day as a child care
allowance while Executive's spouse is on a residence search trip or
trips and the Executive's child is left at the Executive's former
residence.
6. Termination.
(a) The Executive acknowledges and agrees that his
employment is at the pleasure of the Boards of Directors of the
Corporation and the Bank, respectively, and that he may be removed
at any time, with or without Cause, as hereinafter defined, by the
Board of Directors of the Corporation or the Bank, as the case may
be. The Corporation and the Bank acknowledge and agree that
Executive may resign his employment with the Corporation or the
Bank, as the case may be, at any time, with or without Good Reason,
as hereafter defined. If the Executive is removed from his position
as President and Chief Executive Officer of the Corporation or the
Bank other than for Cause or his Disability, as hereinafter defined,
or if Executive resigns his position with the Corporation or the
Bank for Good Reason, (i) the Employer shall pay to the Executive
within ten days of the Termination Date a lump sum severance payment
in an amount equal to the Base Salary then in effect for the
Executive plus an amount equal to any bonus or bonuses paid to
Executive during the twelve months preceding the Termination Date,
(ii) Employer shall continue Executive's health and welfare benefits
at Employer's expense for a one year period from the Termination
Date, (iii) any stock options previously required to be granted
pursuant to Paragraph 4(b) of this Agreement but not granted shall
be deemed to have been granted on the date of the last previous
grant of stock options to Executive at the exercise price on such
date of grant, and (iv) any previously granted stock options and
those deemed granted under clause (iii) not yet exercisable shall
immediately become exercisable and (other than the incentive stock
options granted as of March 26, 1992) remain exercisable for at
least four months (three months in the case of any incentive stock
option other than the incentive stock options granted as of March
26, 1992) from the Termination Date; provided, however, that in the
event of such removal or resignation and notwithstanding the
continuation of benefits hereunder following such removal or
resignation, the Executive shall not be entitled to receive any
bonus or other discretionary compensation declared or payable after
the Termination Date but shall instead receive the payment provided
in clause (i); and provided, further, that notwithstanding the
foregoing, the Executive shall be entitled to receive the severance
payment and benefits provided herein only once, regardless of the
position from which he is removed or resigns.
(b) (i) The term "Cause" shall mean the continuing and
material breach by the Executive of his obligations under Section 1
(other than as a result of incapacity due to physical or mental
illness) which is committed in bad faith or without belief that such
breach is in or not opposed to the best interests of the Corporation
and the Bank (except that any conflict between the interest of the
Corporation and that of the Bank may be resolved by Executive as he
considers appropriate) and which is not remedied in a reasonable
period of time after receipt of written notice from the Board of
Directors of the Corporation or the Bank, as the case may be,
specifying such breach;
(ii) Notwithstanding the foregoing, Executive's
employment shall not be deemed to be terminated for Cause unless and
until there shall be delivered to Executive a copy of a resolution
duly adopted by the affirmative vote of not less than three-fourths
of the entire membership of the Board of Directors of the
Corporation or the Bank, as the case may be, at a meeting of the
Board called and held for such purpose (after reasonable notice to
Executive and an opportunity for Executive, together with his
counsel, to be heard before the Board), finding that in the good
faith opinion of the Board Cause existed for Executive's
termination, and specifying the facts and circumstances constituting
Cause.
(c) The term "Good Reason" shall mean
(i) the assignment to the Executive of any duties
inconsistent in any respect with the Executive's position (including
status, offices, titles and reporting requirements), authority,
duties or responsibilities as contemplated by Section 1, or any
other action by the Corporation or the Bank which results in a
diminution in such position, authority, duties or responsibilities,
excluding for this purpose an isolated, insubstantial and
inadvertent action not taken in bad faith and which is remedied
promptly after receipt of notice thereof given by the Executive, and
excluding any reassignment of duties pursuant to the provisions of
Paragraph 1 hereof;
(ii) any failure to comply with any of the provisions
of this Agreement, other than an isolated, insubstantial and
inadvertent failure not occurring in bad faith and which is remedied
promptly after receipt of notice thereof given by the Executive;
(iii) the Company's requiring the Executive, without
his consent, to be based at any office or location other than New
Orleans, Louisiana.
(iv) any purported termination by the Company of the
Executive's employment otherwise than as expressly permitted by this
Agreement;
(v) any failure by the Company to comply with and
satisfy Paragraph 13(a) of this Agreement;
(vi) the consistent failure by the Board of Directors
to approve recommendations for corporate action requiring Board
approval made in good faith by Executive; or
(vii) the failure for any reason of Executive to be
reelected to the Board of Directors of the Corporation or the Bank.
For purposes of this Section, any good faith determination of "Good
Reason" made by the Executive shall be conclusive.
(d) The term "Termination Date" shall mean the date of
receipt by Executive, in the case of a termination of Executive's
employment by Employer, or by the Employer, in the case of the
termination of Executive's employment by Executive, of written
notice of termination of Executive's employment given by the party
terminating such employment, provided that in the case of any
termination by Employer without Cause or by Executive for Good
Reason, Executive shall remain an employee of Employer without
specific duties until the earlier of the end of the three month
period following the date of such notice or the day following the
exercise of all incentive stock options granted to Executive on
March 26, 1992, notwithstanding that pursuant to Paragraph 6(a) a
Termination Date has occurred.
(e) If the Board of Directors of the Corporation or the
Bank determines in good faith that the Disability of the Executive,
as defined below, has occurred, it may cause written notice to be
given to Executive that his employment with the Corporation and the
Bank will be terminated effective as of the end of any waiting
period provided in the Corporation's Executive Long-Term Disability
Plan. The term "Disability" shall mean (i) the absence of Executive
from his duties on a full-time basis for 120 consecutive days as a
result of incapacity due to mental or physical illness or (ii) any
physical or mental illness which is determined to be total and
permanent by a physician selected by the Corporation and the Bank
and reasonably acceptable to Executive or his legal representatives
and which renders Executive incapable of performing his duties
hereunder. If Executive is terminated as a result of Disability, he
shall be entitled to receive (i) the payment and benefits provided
in subdivisions (i), (ii) and (iv) of Paragraph 6(a) of this
Agreement in addition to any payments and benefits to which he would
be entitled under any other plan of the Corporation and the Bank,
including but not limited to the Corporation's Executive Long-Term
Disability Plan (the "Disability Plan") and (ii) if the Executive is
not otherwise eligible for maximum benefits under the Disability
Plan, the maximum amounts that would be payable to him thereunder if
he were so eligible; provided that any options not exercisable shall
become exercisable on the date of such notice; and provided that the
time for the exercise of such options shall be the later of the
period stated herein or the period stated in the instrument granting
such option.
(f) This Agreement shall automatically terminate upon the
death of Executive, without any liability on the part of the
Corporation or the Bank other than for the unpaid balance of
Executive's salary and bonus on the date of his death and those
benefits payable under the employee benefit plans of Employer;
provided that nothing herein shall be deemed to prevent the exercise
of any stock option that by its terms is exercisable after the death
of Executive.
7. Confidential and Proprietary Information. The Executive
acknowledges and agrees that any and all nonpublic information
regarding the Corporation, the Bank and the customers of either of
them or any other direct or indirect affiliate of the Corporation is
confidential and the unauthorized disclosure of such information
will result in irreparable harm to the Bank and the Corporation.
The Executive shall not, during his employment by the Employer and
for a period of five years thereafter disclose or permit the
disclosure of any such information to any person other than a person
employed by the Employer or Executive or engaged by the Employer or
Executive to render professional services to the Employer or
Executive under circumstances requiring such person to adhere to an
obligation of confidentiality with respect to the Employer, except
as such disclosure may be required by statute, regulation or
judicial or administrative order. Such disclosure shall be deemed
to be so required if required by such statute, regulation or order
(including any subpoena or other demand for information purporting
to be made under authority of any statute, regulation or order) on
the face thereof, and Executive shall have no obligation to contest
such statute, regulation or order. The term "confidential
information" does not include any information which, at the time of
disclosure, is in the public domain. The provisions of this
paragraph 7 shall survive any termination of this Agreement, other
than a termination resulting from a breach of this Agreement by
Employer or a termination resulting from regulatory action, and the
Executive agrees that, upon leaving the employ of the Employer for
any reason, he will not take with him any document belonging to the
Employer or any of its affiliates which is of a confidential or
proprietary nature relating to the Employer or any such affiliate;
provided that Executive may retain copies of any document pertaining
to this Agreement or to his actions as a director or officer of the
Corporation or the Bank.
8. Noncompetition.
(a) For as long as he is employed by the Employer and for
a period of two years thereafter, provided that the Corporation and
the Bank have complied and are complying with this Agreement and
that no regulatory action of the type contemplated by subparagraph
16(b) has occurred, the Executive shall not, without the prior
written consent of the Employer, in any of the Restricted Areas
identified below, carry on or engage, whether on his own behalf or
on behalf of any other person or entity or otherwise, in any
activity as an executive officer or principal shareholder of any
commercial bank, so long as the Employer carries on the commercial
banking business and has a full service bank location therein, i.e.,
a bank location therein that both accepts demand deposits or
transaction accounts and makes commercial loans. If the Executive
breaches the provisions of this Paragraph 8, then, in addition to
any other remedies to which the Employer may be entitled (which
shall include, at its option, injunctive relief), the Executive's
rights to any further payments hereunder shall immediately be
forfeited and the Executive shall not be entitled to receive any
further amounts hereunder.
(b) For purposes of this Agreement, each of the following
areas constitutes a Restricted Area:
(i) the following parishes in the State of
Louisiana: Bossier, Caddo, East Baton Rouge, Jefferson, Lafayette,
Livingston, Orleans, Ouachita, Rapides, St. John the Baptist, and
St. Tammany;
(ii) during the term of the Executive's employment
hereunder, each parish in the State of Louisiana in which the
Employer from time to time is engaged in the commercial banking
business and has a full service bank location therein;
(iii) after the Executive's employment hereunder has
terminated, each parish in the State of Louisiana in which the
Employer is engaged in the commercial banking business and has a
full service bank location therein with deposits in excess of $150
million at the time of such termination;
(iv) during the term of the Executive's employment
hereunder, such counties outside the State of Louisiana in which the
Employer from time to time is engaged in the commercial banking
business and has full service bank locations therein;
(v) after the Executive's employment hereunder has
terminated, such counties outside the State of Louisiana in which
the Employer is engaged in the commercial banking business and has
full service bank locations therein with deposits in excess of $150
million at the time of such termination; and
(vi) such other or alternative geographic areas as
a court of competent jurisdiction determines to be reasonable in
light of the circumstances and purposes of this Agreement.
If the Employer ceases to engage in business in a portion of a
Restricted Area, such portion shall thereupon cease to be part of
such Restricted Area unless and until the Employer again carries on
or engages in business therein, but all remaining portions of such
Restricted Area shall continue to be part thereof.
(c) For purposes of this Paragraph 8, the business of the
Employer shall include that which is conducted from time to time
directly by it and that which is conducted from time to time through
its subsidiaries, corporate affiliates and divisions.
(d) If any portion of this Paragraph 8 shall be
determined to be invalid or unenforceable for any reason, the
remaining provisions of this Paragraph 8 shall be unaffected thereby
and shall remain in full force and effect to the fullest extent
permitted by applicable law. Without limiting the generality of the
preceding sentence, if it is determined that any Restricted Area
exceeds the maximum area in which Paragraph 8 may lawfully apply, or
that Paragraph 8 otherwise exceeds any maximum limitation imposed by
law, then it is the intention of the parties that Paragraph 8 shall
not thereby be rendered unenforceable, but rather that the excessive
provision be modified so as to render Paragraph 8 enforceable to the
maximum extent.
9. Notices. All notices and other communications provided
for by this Agreement shall be in writing and shall be deemed to
have been duly given when delivered in person or mailed by United
States certified mail, return receipt requested, postage prepaid,
addressed as follows:
If to the Executive:
Stephen A. Hansel
1907 Palmer Ave.
New Orleans, LA 70118
If to the Corporation:
Hibernia Corporation
P. 0. Box 61540
New Orleans, Louisiana 70161
Attention: Chairman, Executive Compensation
Committee of the Board of Directors
or to such other address as any party may have furnished to the
other in writing in accordance herewith, except that notices of
change of address shall be effective only upon receipt.
10. Fees and Expenses of Executive. If it shall be necessary
or desirable for the Executive to retain legal counsel and/or incur
other costs and expenses in connection with the enforcement of any
of his rights under this Agreement, the Employer shall pay his
reasonable attorneys' fees and costs and expenses in connection with
the enforcement of such rights, but only in the event that judgment
is entered in favor of the Executive against the Employer.
11. Governing Law. The provisions of this Agreement shall be
interpreted and construed in accordance with, and enforcement may be
had under, the law of the State of Louisiana; provided, however,
that the provisions of Paragraph 8 are to be interpreted and
construed in accordance with, and enforcement may be had under, the
law of the jurisdiction in which the Executive is or is proposing to
render the services or is or is proposing to carry on or engage in
the business which is or is alleged to be a breach of Paragraph 8.
12. Successors to the Corporation. Except as otherwise
provided herein, this Agreement shall be binding upon and inure to
the benefit of the parties hereto and their respective successors
and assigns. The Corporation or the Bank, as the case may be, will
require any successor (whether direct or indirect, by purchase,
merger, consolidation or otherwise) to all or substantially all of
the business and/or assets of the Corporation or the Bank to assume
expressly in writing and agree to perform this Agreement in the same
manner and to the same extent that the Corporation or the Bank would
be required to perform it if no such succession had taken place;
provided, however, that nothing herein contained shall relieve the
Corporation and the Bank from joint and several or solidary
liability hereunder.
13. Change of Control.
A. For purposes hereof, a "Change of Control" shall be
deemed to occur with respect to the Employer if:
(i) a person, including a "group" as defined in
Section 13(d)(3) of the Securities Exchange Act of 1934 and the
rules and regulations promulgated thereunder, becomes the beneficial
owner of shares of the Corporation having 50% or more of the voting
power of the Corporation; or
(ii) the Corporation shall have sold or disposed of
all or substantially all of its assets or substantially all of the
assets of the Bank; or
(iii) during any period of two consecutive
calendar years, the individuals who at the beginning of such period
constituted the Board of Directors of the Corporation cease for any
reason to constitute at least a majority thereof, unless the
election, or the nomination for election, by the Corporation's
shareholders of each new director was approved by a vote of at least
a majority of the directors then still in office who are directors
at the beginning of the period or persons nominated or elected by
such directors.
B. If within one year following a Change of Control, the
employment of Executive is terminated without Cause or the Executive
resigns for Good Reason, (i) in lieu of the compensation provided in
Paragraph 6(a)(i), the Executive shall be paid, within ten days of
the Termination Date, a lump sum equal to the Base Salary then in
effect for the Executive for the then remaining term of this
Agreement plus an amount equal to three times the highest cash bonus
that could have been paid to the Executive by the Employer for the
year in which the termination or resignation occurs, (ii) the
Executive shall receive the benefits provided in Paragraph 6(a)(ii),
(iii) and (iv) of this Agreement, and (iii) the Executive shall be
paid an additional amount of cash sufficient for Executive to pay
any excise tax or penalty as the result of any application of
Section 4999 of the Internal Revenue Code, or its then equivalent,
and to pay any income and excise taxes on the cash payment provided
by this Paragraph 13(b)(iii).
14. Severability. If any provision or portion of this
Agreement shall be determined to be invalid or unenforceable for any
reason, the remaining provisions of this Agreement shall be
unaffected thereby and shall remain in full force and effect to the
fullest extent permitted by applicable law.
15. Entire Agreement/Amendment. This Agreement sets forth the
entire agreement of the parties hereto and supersedes all prior
agreements, understandings and covenants (except as otherwise
provided herein) with respect to the subject matter hereof. This
Agreement may be amended or cancelled only by mutual agreement of
the parties and only in writing.
16. Regulatory Matters.
(a) It is expressly understood that the terms of this
Agreement and any payments required to be made hereunder are subject
to receipt of any and all required regulatory approvals and are and
shall be made only upon receipt of and in accordance with the terms
of any and all such required approvals. Employer shall use its best
efforts to obtain such approvals, and Executive shall have the right
to review and comment on any application for such approvals.
(b) If any law or regulation adopted pursuant thereto
requires, or any regulatory agency pursuant to statutory authority
lawfully orders, the Corporation or the Bank to reduce the term of
this Agreement or to prohibit any extension of the term hereof, or
any payment hereunder, the Corporation or the Bank, as the case may
be, upon approval of its Board of Directors after providing
Executive an opportunity to be heard with respect to the matter, may
comply with the terms of such law, regulation or order without any
penalty or other consequence, monetary or otherwise, to any party to
this Agreement; provided that nothing herein shall be deemed to
relieve any person not subject to such law, regulation or order from
any obligation such person may have under this Agreement.
(c) If, as set forth in clause (a) or (b) above, in
accordance with the terms of any such law, regulation or order, the
provision to Executive of any benefit hereunder is prohibited or
reduced, the Corporation or the Bank, as the case may be, will use
its best efforts to provide to Executive a substantially similar
benefit or a benefit having equivalent economic value, the provision
of which complies with such law, regulation or order or is approved
by the applicable regulatory agency.
17. Corporation Liability. The parties recognize that the
enforceability of employment contracts with a national bank is
subject to uncertainty and that Executive, as a result thereof, may
be prevented from obtaining any or all of his rights hereunder from
the Bank. The Corporation agrees that if for any reason the Bank is
prevented from performing its obligations hereunder, it will perform
each and every such obligation as if it were the sole party to this
Agreement and without regard to whether this Agreement specifies
certain obligations to be that of the Bank rather than the
Corporation; provided that nothing herein shall require the
Corporation to perform such obligation in violation of Paragraph
16(b) of this Agreement.
IN WITNESS WHEREOF, the Executive has hereunto set his hand
and, pursuant to the authority of their respective Boards of
Directors, Hibernia Corporation and Hibernia National Bank have
caused these presents to be executed in their name and on their
behalf, all as of the day and year first above written.
HIBERNIA CORPORATION
By: /s/ Robert H. Boh
--------------------------
Robert H. Boh
Chairman of the Board of Directors
HIBERNIA NATIONAL BANK
By: /s/ Robert H. Boh
--------------------------
Robert H. Boh
Chairman of the Board of Directors
/s/ Stephen A. Hansel
--------------------------
Stephen A. Hansel
<PAGE>
SCHEDULE A
CALCULATION OF OPTIONS
TO BE GRANTED AS OF MARCH 26, 1993
Shares Outstanding as of
March 26, 1993 82,406,902
Deduct shares issued to
Chase upon conversion
of their preferred stock 21,818,181
----------
60,588,721
Number of Shares outstanding
as of March 26, 1992 28,283,148
60,588,721 divided by 28,283,148 = 2.1422198
300,000 x 2.1422198 = 642,666
Reviewed and accepted:
Hibernia Corporation Stephen A. Hansel
By: /s/ Robert H. Boh /s/ Stephen A. Hansel
------------------ ----------------------
<PAGE>
EXHIBIT 13
PORTIONS OF THE 1993 ANNUAL REPORT TO SECURITY HOLDERS OF HIBERNIA CORPORATION
HIBERNIA CORPORATION INFORMATION
Corporate Offices Mailing Address
313 Carondelet Street P.O. Box 61540
New Orleans, LA 70130 New Orleans, LA 70161
504-586-5552*
Stock Listing
The common stock of Hibernia Corporation is traded on the New York Stock
Exchange under the ticker symbol "HIB." Price and volume information are
listed under "Hibernia" and "HIB" in The Wall Street Journal and under
similar designations in other daily newspapers. At December 31, 1993,
Hibernia Corporation had 10,519 shareholders of record and 2,522 full-time
equivalent employees.
Registrar and Transfer Agent
Shareholders requesting a change of address, records or information
about lost certificates should contact:
Chemical Bank
Securityholder Relations Department
450 W. 33rd Street, 8th Floor
New York, New York 10001
Toll-free: 800-647-4273
Dividend Reinvestment and Stock Purchase Plan
Hibernia's Dividend Reinvestment and Stock Purchase Plan is an
economical, convenient way for shareholders to increase their holdings of the
Company's stock. Once enrolled in the plan, shareholders may purchase new
shares directly from the Company by reinvesting cash dividends, making
optional cash purchases or both.
Information
Shareholders, media representatives and other individuals seeking copies
of the annual report, Form 10-K and Form 10-Q, as well as general
information, should contact Jim Lestelle, Manager of Corporate
Communications, toll-free at 800-245-4388 or 504-586-5482.*
Analysts and others seeking financial data or a prospectus on the
Dividend Reinvestment and Stock Purchase Plan should contact Linda Meche,
Manager of Finance and Investor Relations, or Bob Close, Treasurer, toll-free
at 800-245-4388 or 504-586-2180.*
Duplicate Mailings
The Company is required to mail information to each name on its
shareholder list, even if it means sending duplicates. Shareholders wishing
to eliminate duplicate mailings should send a written request to Chemical
Bank at the address on this page indicating which names should be removed.
This will not affect dividend or proxy mailings.
*Prefix changes to 533 effective May 2, 1994.
<PAGE>
<TABLE>
STOCK PRICE AND DIVIDEND INFORMATION
<CAPTION>
1993 1992
--------------------------- ----------------------------
Cash Cash
Market Price(1) Dividends Market Price(1) Dividends
High Low Declared High Low Declared
---------------- --------- --------------- ---------
<S> <C> <C> <C> <C> <C> <C>
Frist Quarter $7.88 $6.00 - $5.13 $2.50 -
Second Quarter $8.13 $6.38 - $6.88 $4.00 -
Third Quarter $8.50 $6.63 $0.03 $6.25 $4.25 -
Fourth Quarter $9.00 $6.88 - $6.00 $4.25 -
(1) NYSE closing price
</TABLE>
<PAGE>
MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS OF
OPERATIONS
1993 Highlights
Highlights of Hibernia Corporation's performance for 1993 include the
following:
*Net income of $48.0 million ($.58 per share), the Company's first full
year of profit since 1989.
*Re-establishment of quarterly dividends with the payment of $.03 per
share in the fourth quarter, the first since the first quarter of 1991.
*Decline in nonperforming assets to $82.4 million, a $97.6 million or
54.2% reduction from year-end 1992.
*Improvement in the loan delinquency ratio to .4% of total loans,
compared to 1.1% at the end of 1992.
*Decline in net charge-offs to $19.7 million, a $54.3 million or 73.4%
reduction compared to $74.0 million in 1992.
*Increase in reserve coverage of nonperforming loans to 292.3%, compared
to 142.1% at the end of 1992, despite a reduction in the reserve to
$159.1 million, resulting from a $6.2 million negative provision and
$19.7 million in net charge-offs.
*Increase in the net interest margin to 4.60%, compared to 4.37% in
1992.
*Further strengthening of total risk-based and leverage capital ratios
for the Company and the Louisiana Bank. The Company's ratios were 16.87%
and 8.25%, while the Louisiana Bank's ratios were 14.67% and 7.04% at
year-end 1993.
*Negotiation of a new data processing contract that should enhance
customer service, promote operating efficiencies and result in
significant future savings. A $12.0 million non-recurring charge was
recorded in the fourth quarter to reflect costs associated with the
change in data processing vendors and related software.
*Termination of restrictive regulatory agreements with the Federal
Reserve Bank of Atlanta and the Office of the Comptroller of the
Currency under which the Company and the Louisiana Bank had been
operating since 1991.
*Upgrades by leading rating agencies for Hibernia Corporation and the
Louisiana Bank.
*Announcement of merger agreements which, when consummated, would
increase the Company's assets by approximately $900 million, or 20%, to
$5.7 billion. These mergers are subject to certain conditions, but
consummation is anticipated in 1994.
Financial Condition:
Earning Assets
Earning assets include loans, securities and short-term investments and
are the Company's main source of income. Average earning assets totaled $4.3
billion in 1993, compared to $4.6 billion in 1992 and $6.2 billion in 1991.
Average earning assets decreased $294.4 million in 1993 due to the sale
of the Texas Bank in 1992, which resulted in a $378.9 million decrease.
Otherwise, average earning assets increased $84.5 million as the Company
began to emerge from downsizing in previous years required to increase
capital ratios. Loans comprised 51.8% of average earning assets in 1993,
compared to 63.5% in 1992, while securities held to maturity increased to
32.2% from 16.8% during the same period (see discussion of securities
classification under "Securities"). Funds were reinvested primarily in
adjustable-rate mortgage-backed securities as the loan portfolio declined as
a result of continued weak loan demand in the first half of 1993 and
continuing efforts to decrease problem and potential problem loans. The
remaining earning assets are liquid assets which include securities available
for sale and short-term investments.
Loans
The Company's objective is to deploy the optimal level of its funding
sources into loans in order to meet customer credit needs and achieve yields
that are generally higher than those available on alternative earning assets,
while considering liquidity and credit quality. In addition, lending
relationships afford the opportunity to cross-sell other products, thus
creating additional sources of income.
Average loans declined $694.0 million in 1993, reflecting both the sale
of the Texas Bank ($292.5 million) and downsizing efforts in 1992, which
emphasized reducing non-relationship lending. In addition, successful efforts
to improve asset quality through the resolution of nonperforming loans
resulted in a decline in average loans. Loans at year-end 1993 totaled $2.3
billion, $32.0 million (1.4%) lower than at year-end 1992.
Table 1 details Hibernia's loan portfolio according to industry
concentration. Consumer loans grew $121.8 million (16.6%), while commercial
loans decreased $153.8 million (9.5%) in 1993. The portfolio mix was 36.7%
consumer and 63.3% commercial at year-end 1993, compared to 31.0% and 69.0%,
respectively, at year-end 1992. This change results from a strategy to seek
growth in consumer lending while maintaining the Company's preeminence in
Louisiana commercial lending.
Commercial Loans
Contraction in the commercial loan portfolio in 1993 was the result of
continued efforts to reduce the level of nonperforming loans and refocus
lending efforts in Louisiana, as well as a general weakness in loan demand.
Commercial real estate loans totaled $308.9 million at year-end 1993, a
$30.1 million decline from 1992 and a $152.1 million decrease from year-end
1991. These declines were the result of planned dispositions to reduce the
risk in the loan portfolio. Nonperforming commercial real estate loans were
$15.7 million at December 31, 1993, compared to $43.5 million at December 31,
1992, a reduction of 63.9%.
At year-end 1993, 64.4% of the Company's commercial real estate loans
were located in Louisiana. No other state accounts for more than 7%.
Management expects to continue emphasizing Louisiana-based lending and
balancing the mix of the portfolio by project type and tenant
diversification.
Consumer Loans
The increase in consumer loans to $854.8 million at December 31, 1993,
from $733.0 million at December 31, 1992, and the increase in the percentage
of the total portfolio to 36.7% at December 31, 1993, from 31.0% at December
31, 1992, results primarily from increased marketing efforts, new product
development and extended service hours, designed to maximize the
effectiveness of the Company's extensive statewide office network.
Indirect lending was a major focus within consumer lending in 1993.
Until late 1991, the Company was one of the market leaders in indirect
lending in Louisiana. Indirect lending is primarily conducted through
automobile dealerships. Management shifted its emphasis away from indirect
lending during the downsizing efforts of 1992. During 1993, management
focused on rebuilding the indirect lending infrastructure and relationships.
As a result, this portfolio increased to $238.2 million at December 31, 1993,
from $139.3 million at December 31, 1992. This growth is primarily the result
of increases in existing indirect relationships. New relationships are also
being developed.
Securities
At the end of 1993, total securities were $1.9 billion, an increase of
$471.3 million, or 32.5%, from the end of 1992. Of total securities, 99% are
securities of the U.S. government or its agencies. The composition of the
securities portfolios is shown in Table 2.
On December 31, 1993, the Company adopted Statement of Financial
Accounting Standards No. 115, "Accounting for Certain Investments in Debt and
Equity Securities," which requires the classification of securities into one
of three categories: Trading, Available for Sale or Held to Maturity.
Management determines the appropriate classification of debt securities at
the time of purchase and re-evaluates this classification periodically.
Trading account securities are held for resale in anticipation of
short-term market movements. These securities are carried at market value and
are included in short-term investments. Gains and losses, both realized and
unrealized, are reflected in earnings.
Debt securities are classified as held to maturity when the Company has
the positive intent and ability to hold the securities to maturity. Held to
maturity securities are stated at amortized cost.
Securities not classified as trading or held to maturity are classified
as available for sale. Available for sale securities are stated at fair
value, with unrealized gains and losses, net of tax, reported in a separate
component of shareholders' equity. The Company may sell these securities
prior to maturity in response to liquidity demands. They also may be used as
a means of adjusting the interest rate sensitivity of the Company's balance
sheet through sale and reinvestment. Management has established a minimum
acceptable level of available for sale securities which is equal to 10% of
non-collateralized deposits.
Prior to December 31, 1993, the Company classified securities as held
for sale (available for sale) and investment securities (held to maturity)
based on criteria which did not differ significantly from that required by
the new standard. Held for sale securities were recorded at the lower of cost
or fair value.
Trading Securities
The Company held no trading securities at December 31, 1993, and there
was no significant trading activity during 1993 or 1992.
Securities Available for Sale
Average securities available for sale decreased $66.0 million in 1993,
reflecting contractual payments and prepayments of principal, primarily
related to residential mortgage refinancings resulting from the low interest
rate environment through 1993.
Securities Held to Maturity
Average securities held to maturity increased $616.9 million from 1992
to 1993. In light of reduced loan demand in the first half of 1993,
management elected to invest in adjustable-rate mortgage-backed securities.
Maturities and yields of securities at year-end 1993 are detailed in
Table 3. Mortgage-backed securities are classified according to contractual
maturity without consideration of contractual repayments or projected
prepayments.
At December 31, 1993, the available for sale portfolio included $50.9
million, and the held to maturity portfolio included $565.5 million, of
adjustable-rate mortgage-backed securities which reprice monthly. The Company
purchased these adjustable-rate securities to shorten the average repricing
period of its portfolio as part of its continuing strategy to reduce interest
rate risk.
The average repricing period of securities available for sale at
December 31, 1993, was 4.1 years, compared to 4.7 years and 5.8 years at
December 31, 1992, and 1991, respectively. Similarly, the average repricing
period of securities held to maturity at December 31, 1993, was 2.5 years,
compared to 5.0 years and 4.1 years at December 31, 1992, and 1991,
respectively.
Asset Quality
Nonperforming assets consist of nonaccrual loans (loans on which
interest income is not currently recognized), restructured loans (loans with
a below-market rate due to the deteriorated financial condition of the
borrower) and foreclosed assets (assets to which title has been assumed in
satisfaction of debt and in-substance foreclosures). In-substance
foreclosures include loans for which the market value of the collateral is
less than the loan obligation, it is uncertain that the borrower has the
capacity to repay the loan in full, and management expects ultimate repayment
to come from foreclosure on or liquidation of the collateral. Generally, all
payments received in satisfaction of debt on nonperforming loans are applied
to reduce principal. Certain nonperforming loans are current as to principal
and interest payments but are classified as nonperforming because there is a
question concerning full collectibility of both principal and interest.
Nonperforming assets totaled $82.4 million at year-end 1993, $179.9
million at year-end 1992 and $319.0 million at year-end 1991. Year-end 1991
amounts include $15.3 million of nonperforming assets attributable to the
Texas Bank. Excluding the Texas Bank, nonperforming assets declined 54.2%
compared to year-end 1992 and 72.9% compared to year-end 1991. These
significant declines are the result of the Company's efforts to improve asset
quality. The composition of nonperforming assets for the past five years is
illustrated in Table 4.
Table 5 lists the varying performance classifications of nonperforming
assets, a significant portion of which was current or substantially
performing (paying more than 85% of contractual obligations).
Nonperforming loans totaled $54.5 million at year-end 1993, $130.2
million at year-end 1992 and $213.5 million at year-end 1991. Nonperforming
loans attributable to the Texas Bank totaled $10.7 million at year-end 1991.
Excluding the Texas Bank, nonperforming loans declined 58.2% compared to
year-end 1992 and 73.1% compared to year-end 1991.
Table 6 details nonperforming loan activity during 1993 by industry
concentration. The significant reduction in nonperforming loans is primarily
the result of payments, sales and returns to performing status. Additions to
nonperforming loans of $42.5 million in 1993 were substantially less than
additions of $157.8 million in 1992. Gross charge-offs of nonperforming loans
of $23.0 million and transfers to foreclosed assets of $1.2 million in 1993
were significantly reduced from 1992 levels of $80.8 million and $26.7
million. Of the total $54.5 million in nonperforming loans at year-end 1993,
57.0% were current as to principal and interest payments, but uncertainty
existed regarding the full collectibility.
In addition to the nonperforming loans discussed above, there are $33.7
million of commercial loans for which payments are current but, in
management's opinion, are subject to potential future classification as
nonperforming or past due.
Foreclosed assets, which are recorded at fair value less estimated cost
to sell, totaled $27.9 million at year-end 1993, $49.7 million at year-end
1992 and $105.5 million at year-end 1991. Foreclosed assets attributable to
the Texas Bank were $4.6 million at year-end 1991. Excluding the Texas Bank,
foreclosed assets declined 43.9% compared to year-end 1992 and 72.3% compared
to year-end 1991. Table 7 provides details concerning the property types of
foreclosed assets at December 31, 1993.
One measure of asset quality is the level of nonperforming assets
compared to total loans plus foreclosed assets (nonperforming asset ratio).
At year-end 1993, the Company's nonperforming asset ratio was 3.50%, a
significant improvement from 7.47% at year-end 1992 and 8.29% at year-end
1991.
Another measure of asset quality is the amount of net charge-offs during
the year compared to average loans. As illustrated in Table 9, net
charge-offs in 1993 totaled $19.7 million, a $54.3 million decline from $74.0
million in 1992 and a $102.8 million reduction from $122.5 million in 1991.
Net charge-offs as a percentage of average loans were .88% in 1993, 2.51% in
1992 and 2.63% in 1991.
The level of accruing, delinquent loans (over 30 days past due) as a
percentage of total loans is an indicator of potential problems in asset
quality. This ratio declined to .4% at year-end 1993 from 1.1% at year-end
1992. At year-end 1991, the delinquency ratio was 2.3%. The decline was
attributable to improved underwriting standards and collection efforts, as
well as to stabilization in the economy and the lower interest rate
environment which reduced debt service requirements for many borrowers.
Reserve and Provision for Possible Loan Losses
The reserve for possible loan losses is composed of specific reserves
(assessed for each loan for which a probable loss has been identified),
general reserves and an unallocated reserve. Management continuously
evaluates the reserve to ensure the level is adequate to absorb loan losses
inherent in the loan portfolio. The provision expense is then recorded to
maintain the reserve at the determined level. Factors contributing to the
determination of specific reserves include the financial condition of the
borrower, changes in the value of pledged collateral and general economic
conditions. General reserves are established based on historical loss
experience and trends in delinquencies of nonaccrual loans. The unallocated
reserve serves to compensate for the possibility of changes in risk ratings
of loans and specific reserve allocations. The board of directors reviews the
adequacy of the reserve each quarter.
The year-end 1993 reserve of $159.1 million provided 292.3% coverage of
nonperforming loans, compared to $185.1 million, with 142.1% coverage, at
year-end 1992 and $208.3 million, and 97.6% coverage, at year-end 1991. An
allocation of the December 31, 1993, reserve is presented in Table 8.
The provision for possible loan losses (a component of earnings) is the
means by which the reserve for possible loan losses is adjusted to establish
a reserve level considered adequate by management to absorb future potential
loan losses. Due to the significant improvements in asset quality discussed
earlier and reduced levels of net loan charge-offs as detailed in Table 9, a
negative provision of $6.2 million was recorded in 1993. This compares to
provisions of $66.3 million in 1992 and $178.3 million in 1991. The
provisions attributable to the Texas Bank totaled $3.1 million in 1992 and
$7.3 million in 1991.
Funding Sources:
Deposits and Borrowings
Deposits
Deposits are the Company's primary source of funding for its earning
assets. Hibernia offers a variety of products designed to attract and retain
customers, with the primary focus on core deposits.
Average deposits totaled $4.0 billion in 1993, a $7.1 million increase
from 1992, excluding the deposits of the Texas Bank. Core deposits were
stable at $3.3 billion or 82.6% of total deposits. Although average deposits
experienced little growth, the mix in deposits changed significantly.
Industrywide, consumers have responded to low interest rates by placing their
maturing bank time deposits in higher-yielding investments, particularly
mutual funds. A decrease in consumer time deposits of $102.9 million was
offset by increases in lower-cost demand deposits, NOW accounts and savings
deposits totaling $103.0 million. Total deposits at year-end 1993 were $4.1
billion, a $49.6 million increase from year-end 1992.
Borrowings
The Company's borrowings historically have included long-term debt and
short-term federal funds purchased. During 1993, the Company retired the $8.3
million debt that remained at the end of 1992. During 1992, the Company had
paid down its $94.5 million debt from year-end 1991 as part of a debt
restructuring and conversion of outstanding bank group debt into equity, the
latter of which resulted, in part, from a successful rights offering in late
1992. The elimination of debt saved the Company more than $11 million in
interest expense in 1993 compared to 1992.
Federal funds purchased and securities sold under agreements to
repurchase, short-term sources of funds, averaged $125.5 million in 1993,
down 35.8% from $195.4 million in 1992 and down 54.6% from $276.7 million in
1991.
Interest Rate Sensitivity
Interest rate risk is the potential impact of changes in interest rates
on net interest income and results from mismatches in repricing opportunities
of assets and liabilities over a period of time. Simulation models are
utilized to estimate the effects of changing interest rates and various
balance sheet strategies on the level of net interest income. Management may
alter the mix of floating- and fixed-rate assets and liabilities, change
pricing schedules and adjust maturities through sales and purchases of
securities available for sale as a means of limiting interest rate risk to an
acceptable level.
Table 12 presents Hibernia's interest rate sensitivity position at
December 31, 1993. This profile is based on a point in time and may not be
meaningful because it does not consider subsequent changes in interest rate
levels or spreads between asset and liability categories. Although securities
available for sale are mostly fixed-rate and have average contractual
maturities exceeding five years, these securities are required to be included
in the 1-30 day category. Securities available for sale are carried at
estimated fair value, with unrealized gains or losses recorded as a component
of equity. Therefore, as interest rates rise, the level of shareholders'
equity could be negatively affected as their carrying value is adjusted
downward. The opposite would be true if interest rates fall.
The 1-30 day deposit category also includes $938.5 million in money
market accounts, which have indeterminate maturities. Money market rates are
administered and do not necessarily reprice in a direct relationship to
changes in interest rates.
The Company enters into interest rate swap agreements in order to manage
interest rate exposure and not for speculative purposes. Interest rate swap
agreements involve the risk of dealing with counterparties and their ability
to meet contractual terms. These counterparties must receive credit approval
by appropriate loan committees of the Louisiana Bank before entering into a
rate swap agreement. Notional principal amounts express the volume of these
transactions, although the amounts potentially subject to credit and market
risk are much smaller.
The notional value of rate swaps totaled $26 million at year-end 1993,
$26 million at year-end 1992 and $33 million at year-end 1991. Interest rate
swaps included $15 million of deposit-related swaps in 1993, $15 million in
1992 and $20 million in 1991. These interest rate swaps were entered into as
a hedge against longer-term deposits of the same maturity, exchanging a fixed
rate of interest for a floating rate. Interest rate swap settlements are
reflected in interest expense on an accrual basis. Cash received in these
settlements during 1993 totaled $.8 million.
Net Interest Margin
The net interest margin, or taxable-equivalent net interest income as a
percentage of average earning assets, is affected by the Company's net
interest spread (yield on earning assets minus rate on interest-bearing
liabilities), the level of interest rates and associated money market
spreads, the amount of nonperforming loans and the percentage of
noninterest-bearing funds supporting earning assets.
The net interest margin of 4.60% in 1993 compares to 4.37% in 1992 and
3.99% in 1991. The 23-basis-point increase in 1993 is the result of a
significant decline in nonperforming loans, the replacement of high-cost
long-term debt with equity and the favorable interest rate environment. In
addition, a higher level of noninterest-bearing funds supported earning
assets in 1993. The increase in the margin in 1992 compared to 1991 was
primarily due to the impact of significantly wider interest rate spreads.
The net interest margin is expected to decline somewhat in 1994 as funds
received from maturities and prepayments of securities and loans are
reinvested in similar instruments at lower yields in the current low-rate
environment, while no further significant declines are expected in funding
costs.
Results of Operations:
The Company reported net income of $48.0 million, or $.58 per share, in
1993, compared to a net loss before extraordinary item of $7.9 million, or
$.27 per share, in 1992 and a net loss before cumulative effect of accounting
change of $144.0 million, or $5.12 per share, in 1991. The Company reported
a net loss after an extraordinary loss on debt restructuring of $64.0
million, or $2.16 per share, in 1992. In 1991, the Company reported a net
loss after effect of a change in accounting for lease expense of $165.6
million, or $5.89 per share.
The improved operating results in 1993 are attributable to significant
improvements in asset quality, continuing efforts to improve operating
efficiency, an increase in the net interest margin and successful completion
of the Company's recapitalization in 1992.
Net Interest Income
Net interest income is the difference between total interest and fee
income generated by earning assets and total interest expense incurred on
interest-bearing liabilities and is affected by:
*Volume, yield and mix of earning assets.
*Level of nonperforming loans.
*Interest rate environment.
*Mix of interest-bearing liabilities.
*Amount of noninterest-bearing liabilities supporting earning assets.
Net interest income on a taxable-equivalent basis declined $3.1 million,
or 1.5%, to $200.0 million in 1993 from $203.1 million in 1992. Net interest
income in 1991 was $247.0 million. Net interest income attributable to the
Texas Bank totaled $20.2 million in 1992 and $40.3 million in 1991. Excluding
net interest income of the Texas Bank in 1992, taxable-equivalent net
interest income would have increased $17.1 million, or 9.3%, in 1993.
The decrease in taxable-equivalent net interest income was primarily the
result of a lower volume of earning assets due to the sale of the Texas Bank.
This reduction was partially offset by the lower volume of nonperforming
assets and a lower-cost liability mix. As indicated in Table 14, the
reduction in volume resulted in a decline in taxable-equivalent net interest
income of $10.3 million in 1993 compared to 1992. The lower level of
nonperforming assets and improved liability mix resulted in a wider spread
and, therefore, increased taxable-equivalent net interest income by $7.2
million, resulting in a $3.1 million reduction in net interest income.
Noninterest Income
Service charges on deposits, trust fees, mortgage loan servicing fees
and retail investment service fees were the largest contributors to
noninterest income in 1993. Noninterest income totaled $67.2 million in 1993,
compared to $64.3 million in 1992 and $76.0 million in 1991. Gains on sales
of securities and noninterest income of the Texas Bank have been excluded in
both years.
The increase in 1993 compared to 1992 was primarily due to a $2.9
million charge to income in 1992 to record the loss on the sale of the Texas
Bank. In addition, over the same period, trust fees increased $.9 million
(8.1%) due to a new fee schedule imposed in the fourth quarter of 1992 and an
11.4% increase in trust assets, and service charges on deposits increased $.7
million (2.5%) reflecting increases in transaction accounts, including demand
deposit, NOW and savings accounts.
The decline in noninterest income in 1992 compared to 1991 resulted
primarily from the reduction of credit card income of $5.3 million, as the
credit card operation was sold in 1991; the $2.9 million loss on the sale of
the Texas Bank; a decline in service, collection and exchange charges of $3.8
million, primarily the result of lower letter of credit fees; and a decline
in trust fees of $1.5 million. Partially offsetting this decline was a $.5
million increase in service charges on deposits.
Noninterest Expense
Noninterest expense totaled $219.5 million in 1993, compared to $205.4
million in 1992 and $253.5 million in 1991, excluding noninterest expense of
the Texas Bank in 1992 and 1991 and the $13 million valuation adjustment on
the Texas Bank in 1991.
Noninterest expense in 1993 included non-recurring provisions for data
processing enhancements and recognition of the economic impairment of certain
of the Company's facilities, as well as significant additions to litigation
reserves relating to a shareholder class-action suit and other suits.
The $12 million provision for data processing enhancements is the result
of the Company's decision to enter into a contract with a new data processing
service provider. This provision represents an estimate of costs relating to
conversion, write-downs of application software that will be replaced and
penalties for termination of the previous contract. Under the new contract,
the Company will install a new integrated platform of software applications,
including improved banking-office and teller-automation systems, all of which
will enhance customer service and promote operating efficiencies. The
enhanced systems should be in place in early 1995.
Included in other expenses is a charge of $2.7 million for the economic
impairment of certain banking-office facilities and $10.4 million for
additions to litigation reserves in connection with a shareholder
class-action suit and other suits.
Staff costs increased $5.3 million (6.8%) due to the reinstatement of
management incentive programs, merit increases and higher medical insurance
costs. Advertising and promotional expenses increased $3.0 million (142.8%)
as the Company's strengthened financial condition enabled it to aggressively
market new products during 1993.
Deposit insurance and examination fees calculated under the new
risk-based premium system increased $1.8 million (17.8%). Semiannual premiums
paid in January 1993 were based on capital levels and supervisory ratings of
the Louisiana Bank as of June 30, 1992, resulting in a 35% increase in the
assessment rate from $.23 per $1,000 of deposits to $.31. The assessment rate
used to calculate the July 1993 premium decreased to $.29, reflecting the
improved capital position of the Louisiana Bank. A further 10% reduction in
the rate to $.26 in January 1994 reflects an improved supervisory rating.
The above increases were partially offset by reductions in foreclosed
property expense of $13.6 million (86.2%) and loan collection expense of $1.4
million (26.7%), the result of the improved asset quality discussed earlier.
In addition, professional fees decreased $3.5 million (31.9%), primarily due
to non-recurring fees incurred in 1992 relating to the Company's
restructuring.
Noninterest expense for 1992 compared to 1991, excluding the Texas Bank,
declined to $205.4 million from $266.5 million. Major components of the $61.1
million decline included staff costs, data processing outsourcing and
foreclosed property expense, among other things.
Staff costs declined by $17.5 million as a result of the Company's
downsizing and the outsourcing of additional data processing operations. This
expanded outsourcing resulted in a $5.1 million increase in outside data
processing costs.
Foreclosed property expense, net of gains from sales, declined $8.6
million due to significant reductions in the level of nonperforming assets.
Noninterest expense for 1991 included a $13.0 million valuation charge to
reduce the Company's carrying value of the Texas Bank in preparation for the
Texas Bank's sale. In 1992, the loss of $2.9 million on the sale of the Texas
Bank was recorded in noninterest income. Other noninterest expense declined
$15.5 million, but no individual component was significant. Noninterest
expense in 1991 included credit card expense of $3.1 million. The Company's
credit card operation was sold in 1991.
Management continues to monitor the efficiency ratio as a means of
controlling costs and to evaluate the generation of additional fee income.
The 1993 efficiency ratio of 82.15% changed slightly from the 1992 ratio of
82.10%, after excluding the impact of the Texas Bank. However, after
adjusting for the non-recurring items discussed earlier, the 1993 ratio
improved to 72.75%, which represents a significant improvement compared to
1992.
Income Taxes
The Company recorded income tax expense of $1.7 million in 1993,
compared to $.8 million and $1.0 million in 1992 and 1991. The Louisiana Bank
is subject to a Louisiana shareholder tax based partly on income. The income
portion of the Louisiana shareholder tax is reported as state income tax. In
addition, subsidiaries of the Louisiana Bank are subject to Louisiana state
income tax.
Effective January 1, 1993, the Company adopted Statement of Financial
Accounting Standards No. 109, "Accounting For Income Taxes." Due to
limitations related to the valuation of deferred tax assets, there was no
cumulative effect adjustment at adoption. During 1993, the Company recorded
a deferred tax benefit equal to its current tax liability. The Company's net
deferred tax asset at December 31, 1993, was fully supported by the Company's
carryback potential of $10.2 million (representing taxes paid for 1993), plus
one year of future expected earnings.
The Company's operating results for the year ended December 31, 1993,
including increased net income and reduced levels of nonperforming assets,
and improving trends in the banking industry support the conclusion that
projected future earnings for one year are "more likely than not" to occur.
The ultimate realization of the deferred tax asset may be affected by credit
risk and interest rate risk. Appropriate policies and procedures are in place
to manage credit risk and interest rate risk to mitigate the uncertainties
related to the ultimate realization of the deferred tax asset. Management
will evaluate the realizability of the deferred tax asset quarterly to assess
the need for and the balance of the valuation reserve.
Total net future deductible temporary differences at December 31, 1993,
were $195.7 million, excluding $17.5 million in alternative minimum tax
credit carryforwards. The reserve for possible loan losses represents $159.1
million of the future deductible temporary differences. This reserve has been
recognized as expense for financial reporting purposes but is not deductible
for federal income tax purposes until the loans are charged off. Valued at
the 35% statutory tax rate, the total future deductible amounts including
alternative minimum tax credit carryforwards, if ultimately recognized, would
generate tax benefits of $85.9 million. Approximately $22.0 million of those
benefits are reflected as the Company's deferred tax asset at December 31,
1993. The amount of the deferred tax asset the Company can record in 1994
will be based on the increase in its carryback potential for taxes paid in
1994 and on its ability to generate future taxable income.
Capital
Capital represents shareholder ownership in the Company. It provides a
base for asset growth while serving, together with the reserve for possible
loan losses, as a cushion against potential losses. With the Company's return
to profitability, the primary sources of capital to support asset expansion
will be utilization of existing capital, issuance of new stock and retention
of future earnings.
Regulations applicable to national banks and their holding companies
prescribe minimum capital levels. These levels are based on established
guidelines which relate required capital standards to both risk-weighted
assets (risk-based capital ratios) and total assets (leverage ratio). In
accordance with risk-based guidelines, assets and off-balance-sheet financial
instruments are assigned a weight to measure their level of risk.
Shareholders' equity totaled $428.4 at the end of 1993, compared to
$369.1 million at the end of 1992 and $199.1 million at year-end 1991. The
$59.3 million (16.1%) increase in 1993 was primarily due to current-year
earnings and unrealized gains in securities available for sale. The
recognition of the unrealized gains on securities available for sale resulted
from the implementation of a new accounting standard, as discussed earlier.
The 85.4% increase in 1992 reflected the Company's successful
recapitalization.
Total risk-based capital ratios for the Company and the Louisiana Bank
were 16.87% and 14.67%, respectively, at year-end 1993. This compares to
14.68% and 11.87%, respectively, at year-end 1992 and 6.15% and 6.29%,
respectively, at the end of 1991. Leverage ratios were 8.25% for the Company
and 7.04% for the Louisiana Bank at the end of 1993, compared to 7.15% and
5.72% at year-end 1992 and 2.52% and 3.07% at year-end 1991. The current
ratios significantly exceed the standards required for designation of an
institution as "well-capitalized" by the regulators of the Company and the
Louisiana Bank. Table 17 shows the calculation of risk-based capital ratios
for the Company and presents a comparison of such ratios to the minimum
regulatory standards.
In the fourth quarter of 1993, the Company paid its first cash dividend
since the first quarter of 1991. The amount of the dividend, declared and
recorded in the third quarter, was $.03 per share. The Company expects to
continue to pay regular quarterly dividends.
Liquidity
Liquidity is a measure of a bank's ability to fund loan commitments and
meet deposit maturities and withdrawals in a timely and cost-effective way.
These needs can be met by generating profits, converting assets to cash and
attracting new deposits. Management monitors liquidity through a periodic
review of maturity profiles; yield and rate behaviors; and loan and deposit
forecasts to minimize funding risks.
Attracting and retaining core deposits at competitive rates is the
Louisiana Bank's primary source of liquidity. The Louisiana Bank's extensive
retail office network, aided by the introduction of new deposit products,
provided $3.4 billion in core deposits at year-end 1993. Large-denomination
certificates of deposit and public funds were additional sources of liquidity
during the year.
The Louisiana Bank's loan-to-deposit ratio at year-end 1993 declined to
56.2%, compared to 58.4% at the end of 1992 and 71.5% at the end of 1991.
This decline, which represents an addition to liquidity, resulted from the
combination of a modest increase in the deposit base and a continued decline
in loans as a result of downsizing efforts and continued weak loan demand. To
the extent that quality loan demand falls short of funding sources, the
Louisiana Bank invests in securities or sells federal funds.
The Parent Company requires liquidity to fund operating expenses and pay
dividends. At December 31, 1993, the Parent Company had $56.3 million in
funds remaining from the 1992 rights offering and the sale of the Texas Bank.
A potential source of future liquidity would be dividends paid by the
Louisiana Bank.
The Consolidated Statements of Cash Flows can be used to assess the
Company's ability to generate positive future net cash flows from operations
and its ability to meet future obligations. The Company incurred a net
decrease in cash and cash equivalents in 1993 of $395.7 million. This
decrease was the result of cash used in investing activities of $570.8
million, primarily relating to a net increase in securities. Both operating
and financing activities provided cash during 1993, with operations providing
$106.6 million and financing activities providing $68.5 million. Cash
provided by financing activities was primarily the result of increases in
deposits and short-term borrowings.
Cash and cash equivalents increased $224.0 million in 1992. Cash
provided by operations totaled $151.1 million, and investing activities
provided another $462.0 million, primarily through a net reduction in loans.
Cash used in financing activities, primarily net deposit withdrawals, was
$389.1 million.
Cash and cash equivalents increased $23.2 million in 1991. Cash provided
by operations totaled $97.4 million, and investing activities provided
another $1.3 billion, primarily through a net reduction in loans, including
$935.1 million from loan sales. Cash used in financing activities was $1.4
billion, of which $1.2 billion was required for net deposit withdrawals.
Fourth-Quarter Results
The Company reported consolidated net earnings of $13.9 million in the
fourth quarter of 1993, compared to $3.1 million in the fourth quarter of
1992 and $12.2 million in the third quarter of 1993. Earnings per share of
$.17 for the fourth quarter of 1993 were a substantial improvement from the
$.05 per share earned in the fourth quarter of 1992 and a $.02 increase from
the third quarter of 1993.
Fourth-quarter 1993 earnings included a $17.5 million negative provision
for loan losses. The fourth quarter of 1992 included a provision for loan
losses of $5.3 million. In addition, net interest income in the fourth
quarter of 1993 was $4.1 million higher than the same quarter in 1992. These
improvements were partially offset by the following non-recurring charges:
the $12.0 provision for data processing enhancements, $4.8 million of
litigation reserves and $2.7 million related to the economic impairment of
certain facilities.
The fourth-quarter 1993 negative provision and improved net interest
income were primarily the result of improvements in asset quality and, in the
case of net interest income, an improvement in the interest-bearing liability
mix. As discussed earlier, the $12.0 million provision for data processing
enhancements is expected to result in improved customer service, operating
efficiencies and significant cost savings.
The improvement in net income for the fourth quarter of 1993 compared to
the third quarter of 1993 reflects the effect of the $17.5 million negative
provision compared to the $2.5 million provision expense in the third
quarter, offset by the $12.0 million provision for data processing
enhancements, a $2.3 million increase in additions to the litigation reserve,
$2.7 million in charges related to the economic impairment of certain
facilities and a $1.7 million increase in income tax expense relating to the
portion of Louisiana shareholder tax based on income.
Net interest income, on a taxable-equivalent basis, totaled $49.4
million in the fourth quarter of 1993, compared to $45.6 million in the
fourth quarter of 1992 and $48.7 million in the third quarter of 1993.
The fourth-quarter 1993 increase in net interest income over both the
fourth quarter of 1992 and the third quarter of 1993 was primarily the result
of significant improvements in asset quality, evidenced by the decline in the
level of nonperforming assets as a percentage of total loans and foreclosed
assets from 7.47% and 4.37% at December 31, 1992, and September 30, 1993,
respectively, to 3.50% at December 31, 1993. In addition, the Company
improved its liability mix from the fourth quarter of 1992 to the fourth
quarter of 1993 through the addition of lower interest rate deposits and the
retirement of higher interest rate long-term debt.
Average earning assets increased 2.4% to $4.3 billion in the fourth
quarter of 1993 from $4.2 billion in the fourth quarter of 1992 and were up
$29.6 million compared to the third quarter of 1993.
Average securities for the fourth quarter of 1993 totaled $1.9 billion,
an increase of 45.9% and 2.5% over the fourth quarter of 1992 and the third
quarter of 1993, respectively. Average securities totaled $1.3 billion in the
fourth quarter of 1992 and $1.9 billion in the third quarter of 1993.
Average deposits increased 1.6% to $4.0 billion in the fourth quarter of
1993 from $3.9 billion in the fourth quarter of 1992. Average deposits were
unchanged from the third quarter of 1993. In addition, the average cost of
all interest-bearing funds declined to 2.99% during the fourth quarter of
1993, compared to 3.35% during the fourth quarter of 1992 and 3.02% during
the third quarter of 1993.
The net interest margin of 4.51% in the fourth quarter of 1993 was up
from 4.28% in the fourth quarter of 1992 and virtually unchanged from 4.50%
in the third quarter of 1993. The Company's margin in 1993 benefited from
wider interest spreads and significantly reduced levels of nonperforming
assets. Table 18 illustrates the components of net interest margin on a
quarterly basis for 1993 and 1992.
Noninterest income during the fourth quarter of 1993 was $17.1 million,
a $.5 million, or 3.2%, increase from the fourth quarter of 1992 and a $.6
million, or 3.3%, increase from the third quarter of 1993. These increases
were primarily the result of increased fees relating to trust services,
deposits, mortgage loan servicing and retail investment services.
Noninterest expense of $67.4 million in the fourth quarter of 1993 was
$15.1 million higher than $52.3 million reported in the fourth quarter of
1992 and $17.7 million higher than $49.7 million in the third quarter of
1993.
After adjusting for the non-recurring items in the fourth quarter of
1993, as discussed earlier, noninterest expense would have been $47.9
million, reflecting reductions of $4.4 million compared to the fourth quarter
of 1992 and $1.8 million compared to the third quarter of 1993.
Current earnings resulted in continued improvement in capital ratios
during 1993. The Company's total risk-based capital and leverage ratios at
December 31, 1993, were 16.87% and 8.25%, compared to 14.68% and 7.15% at
December 31, 1992. The December 31, 1993, total risk-based capital ratio was
slightly lower than the September 30, 1993, ratio of 17.00% due to the
Company's deployment of capital to higher-yielding earning assets which are
classified in higher-risk categories for purposes of risk-based capital
calculations. However, the December 31, 1993, leverage ratio was improved
over the September 30, 1993, ratio of 7.98%.
<PAGE>
<TABLE>
CONSOLIDATED SUMMARY OF INCOME AND SELECTED FINANCIAL DATA (1)
Hibernia Corporation and Subsidiary
Years Ended December 31
<CAPTION>
($ in thousands, except per-share data) 1993 1992 1991 1990 1989
-------- -------- -------- -------- --------
<S> <C> <C> <C> <C> <C>
Interest income $299,730 $356,734 $580,729 $699,505 $615,802
Interest expense 104,025 159,456 346,130 438,187 401,272
Net interest income 195,705 197,278 234,599 261,318 214,530
Provision for possible loan losses (6,200) 66,275 178,330 166,825 36,400
Net interest income after provision 201,905 131,003 56,269 94,493 178,130
Noninterest income:
Noninterest income 67,217 69,250 91,869 117,728 74,900
Securities gains, net - 17,190 17,801 11,722 5,175
Noninterest income 67,217 86,440 109,670 129,450 80,075
Noninterest expense 219,476 224,510 308,971 249,008 181,919
Income (loss) before taxes, extraordinary item and
cumulative effect of accounting change 49,646 (7,067) (143,032) (25,065) 76,286
Income tax expense (benefit) 1,696 848 965 (14,070) 14,642
Net income (loss) before extraordinary item and
cumulative effect of accounting change 47,950 (7,915) (143,997) (10,995) 61,644
Extraordinary loss on debt restructuring - (56,122) - - -
Cumulative effect of accounting change
in accounting for lease expense - - (21,643) - -
NET INCOME (LOSS) $47,950 ($64,037) ($165,640) ($10,995) $61,644
Income (loss) per share: (2)
Income (loss) before extraordinary item and
cumulative effect of accounting change $0.58 ($0.27) ($5.12) ($0.40) $2.30
Extraordinary loss on debt restructuring - (1.89) - - -
Cumulative effect of accounting change - - (0.77) - -
NET INCOME (LOSS) PER SHARE $0.58 ($2.16) ($5.89) ($0.40) $2.30
Pro forma amounts assuming the accounting change
had been applied retroactively:
Net income (loss) N/A N/A ($143,997) ($15,087) $60,209
Net income (loss) per share (2) N/A N/A ($5.12) ($0.55) $2.25
Cash dividends declared per share (2) $0.03 $ - $0.15 $0.90 $0.91
Average shares outstanding (000s) 83,175 29,608 28,117 27,453 26,767
SELECTED YEAR END BALANCES (in millions)
Loans $2,328.1 $2,360.1 $3,744.2 $5,166.0 $4,746.8
Deposits 4,086.0 4,036.4 5,301.8 6,490.5 5,869.8
Debt - 8.3 94.5 104.4 55.4
Equity 428.4 369.1 199.1 366.5 392.8
Total Assets 4,795.6 4,734.0 6,018.4 7,357.9 6,698.9
SELECTED AVERAGE BALANCES (in millions)
Loans $2,250.3 $2,944.3 $4,654.8 $5,106.3 $4,493.4
Deposits 3,992.6 4,419.5 6,067.1 6,390.2 5,153.7
Debt 3.0 83.1 96.5 87.1 38.5
Equity 393.6 211.6 277.6 380.6 363.7
Total Assets 4,635.6 5,082.3 6,801.6 7,348.2 6,257.6
SELECTED RATIOS
Return on average assets 1.03% -1.26% -2.44% -0.15% 0.99%
Return on average equity 12.18% -30.26% -59.67% -2.89% 16.95%
Net interest margin (taxable-equivalent) 4.60% 4.37% 3.99% 4.29% 4.15%
Dividend payout ratio 5.23% - N/M N/M 39.57%
Average equity/average assets 8.49% 4.16% 4.08% 5.18% 5.81%
Tier 1 risk-based capital ratio 15.56% 13.15% 4.44% 5.72% 6.52%
Total risk-based capital ratio 16.87% 14.68% 6.15% 7.36% 7.87%
Leverage Ratio 8.25% 7.15% 2.52% 3.95% 5.01%
(1) Prior years have been conformed to current-year presentation. The Texas Bank was sold on December 31, 1992.
Effective June 30, 1992, and until the date of sale, the accounts of the Texas Bank were reported under the
equity method as a single line item in the financial statements, related tables and charts. The accounts of the
Texas Bank were excluded from the computation of the Company's average balances effective June 30, 1992.
(2) Income (loss) per share data are based on the weighted average number of common shares outstanding in the
respective period. Dividends per share are historical amounts.
</TABLE>
<PAGE>
<TABLE>
CONSOLIDATED AVERAGE BALANCE SHEETS, YIELDS AND RATES
Taxable-equivalent basis (1)
<CAPTION>
1993 1992 1991
Interest Interest Interest
(Average balance sheet $ in millions, Average Income/ Yield/ Average Income/ Yield/ Average Income/ Yield/
interest income/expense $ in thousands) Balances Expense Rate Balances Expense Rate Balances Expense Rate
------------------------- -------------------------- ---------------------------
<S> <C> <C> <C> <C> <C> <C> <C> <C> <C>
ASSETS
Interest-Earning Assets:
Loans (2) $2,250.3 $189,632 8.43 % $2,944.3 $258,989 8.80 % $4,654.8 $461,629 9.92 %
Securities available for sale 425.0 28,387 6.68 491.0 35,678 7.27 - - -
Securities held to maturity:
U.S. government securities and obligations
of U. S. government agencies 1,397.2 77,542 5.55 780.2 53,453 6.85 1,300.0 114,629 8.82
Other 0.1 10 9.55 0.2 8 5.17 68.1 7,373 10.83
Total Securities Held to Maturity 1,397.3 77,552 5.55 780.4 53,461 6.85 1,368.1 122,002 8.92
Short-term investments 272.3 8,413 3.09 423.6 14,417 3.40 169.8 9,455 5.57
Total Interest-Earning Assets 4,344.9 $303,984 7.00 % 4,639.3 $362,545 7.81 % 6,192.7 $593,086 9.58 %
Reserve for Possible Loan Losses (186.6) (213.3) (196.8)
Noninterest-Earning Assets:
Cash (excluding items in process of collection) 104.2 108.6 145.8
Items in process of collection 95.0 108.7 193.5
Other assets 278.1 439.0 466.4
Total Noninterest-Earning Assets 477.3 656.3 805.7
Total Assets $4,635.6 $5,082.3 $6,801.6
LIABILITIES AND SHAREHOLDERS'
EQUITY
Interest-Bearing Liabilities:
Interest-bearing deposits:
NOW accounts $ 390.7 $ 5,700 1.46 % $ 426.8 $ 9,977 2.34 % $ 418.4 $ 17,286 4.13 %
Money market deposit accounts 909.1 22,240 2.45 1,077.3 33,756 3.13 1,519.5 82,665 5.44
Savings 156.7 2,764 1.76 157.8 4,247 2.69 151.0 6,944 4.60
Other consumer time deposits 1,139.2 46,839 4.11 1,339.6 62,788 4.69 1,844.4 126,101 6.84
Public fund certificates of deposits
of $100,000 or more 591.5 19,458 3.29 591.6 23,837 4.03 756.7 47,430 6.27
Certificates of deposit of $100,000 or more 101.4 2,942 2.90 135.0 6,826 5.06 471.2 33,500 7.11
Foreign time deposits 5.0 149 2.98 2.2 71 3.25 60.0 3,854 6.42
Total Interest-Bearing Deposits 3,293.6 100,092 3.04 3,730.3 141,502 3.79 5,221.2 317,780 6.09
Short-term borrowings 125.5 3,654 2.91 195.4 6,515 3.33 276.7 16,177 5.85
Debt 3.0 279 9.35 83.1 11,439 13.76 96.5 12,173 12.61
Total Interest-Bearing Liabilities 3,422.1 $104,025 3.04 % 4,008.8 $159,456 3.98 % 5,594.4 $346,130 6.19 %
Noninterest-Bearing Liabilities:
Demand deposits 699.0 689.2 845.9
Other liabilities 120.9 172.7 83.7
Total Noninterest-Bearing Liabilities 819.9 861.9 929.6
Shareholders' Equity 393.6 211.6 277.6
Total Liabilities and
Shareholders' Equity $4,635.6 $5,082.3 $6,801.6
SPREAD AND NET YIELD
Interest Rate Spread 3.96 % 3.83 % 3.39 %
Cost of Funds Supporting Interest Earning Assets 2.39 % 3.44 % 5.59 %
Net Interest Income/Margin $199,959 4.60 % $203,089 4.37 % $246,956 3.99 %
(1) Based on the statutory income tax rates of 35% for 1993 and 34% for all prior years.
(2) Excludes unearned income. For purposes of yield computations, nonaccrual loans are included in loans outstanding.
</TABLE>
<PAGE>
<TABLE>
CONSOLIDATED AVERAGE BALANCE SHEETS, YIELDS AND RATES (Cont.)
Taxable-equivalent basis (1)
<CAPTION>
5 Year
1990 1989 Compound
Interest Interest Growth Rate
(Average balance sheet $ in millions, Average Income/ Yield/ Average Income/ Yield/ For Average
interest income/expense $ in thousands) Balances Expense Rate Balances Expense Rate Balances (%)
--------------------------- -------------------------- -------------
<S> <C> <C> <C> <C> <C> <C> <C>
ASSETS
Interest-Earning Assets:
Loans (2) $5,106.3 $578,040 11.32 % $4,493.4 $521,952 11.62 % (9.6)
Securities available for sale - - - - - - -
Securities held to maturity:
U.S. government securities and obligations
of U. S. government agencies 1,291.7 120,309 9.31 1,038.8 95,641 9.21 6.9
Other 161.6 18,157 11.24 148.9 17,930 12.04 (76.3)
Total Securities Held to Maturity 1,453.3 138,466 9.53 1,187.7 113,571 9.56 4.1
Short-term investments 49.9 5,311 10.64 20.0 2,280 11.41 76.6
Total Interest-Earning Assets 6,609.5 $721,817 10.92 % 5,701.1 $637,803 11.19 % (2.3)
Reserve for Possible Loan Losses (105.6) (68.0) 24.3
Noninterest-Earning Assets:
Cash (excluding items in process of collection) 215.4 169.8 (5.4)
Items in process of collection 195.7 150.4 (4.8)
Other assets 433.2 304.3 3.7
Total Noninterest-Earning Assets 844.3 624.5 (0.6)
Total Assets $7,348.2 $6,257.6 (2.7)
LIABILITIES AND SHAREHOLDERS'
EQUITY
Interest-Bearing Liabilities:
Interest-bearing deposits:
NOW accounts $ 338.7 $ 15,441 4.56 % $ 227.1 $ 10,698 4.71 % 21.6
Money market deposit accounts 1,427.0 86,830 6.08 1,316.7 82,547 6.27 (10.7)
Savings 145.3 6,986 4.81 129.4 6,339 4.90 11.7
Other consumer time deposits 1,626.8 129,780 7.98 987.4 83,558 8.46 23.6
Public fund certificates of deposits
of $100,000 or more 861.8 68,672 7.97 635.2 54,762 8.62 (0.5)
Certificates of deposit of $100,000 or more 842.0 71,059 8.44 762.9 69,049 9.05 (30.1)
Foreign time deposits 257.5 21,340 8.29 355.2 33,458 9.42 (54.6)
Total Interest-Bearing Deposits 5,499.1 400,108 7.28 4,413.9 340,411 7.71 (2.3)
Short-term borrowings 385.4 30,139 7.82 615.9 57,001 9.25 (25.4)
Debt 87.1 7,940 9.12 38.5 3,860 10.04 (43.8)
Total Interest-Bearing Liabilities 5,971.6 $438,187 7.34 % 5,068.3 $401,272 7.92 % (4.5)
Noninterest-Bearing Liabilities:
Demand deposits 891.1 739.8 1.9
Other liabilities 104.9 85.8 13.1
Total Noninterest-Bearing Liabilities 996.0 825.6 3.2
Shareholders' Equity 380.6 363.7 4.9
Total Liabilities and
Shareholders' Equity $7,348.2 $6,257.6 (2.7)
SPREAD AND NET YIELD
Interest Rate Spread 3.58 % 3.27 %
Cost of Funds Supporting Interest Earning Assets 6.63 % 7.04 %
Net Interest Income/Margin $283,630 4.29 % $236,531 4.15 %
(1) Based on the statutory income tax rates of 35% for 1993 and 34% for all prior years.
(2) Excludes unearned income. For purposes of yield computations, nonaccrual loans are included in loans outstanding.
</TABLE>
<PAGE>
<TABLE>
QUARTERLY CONSOLIDATED SUMMARY OF INCOME AND SELECTED FINANCIAL DATA (1)(2)
Hibernia Corporation and Subsidiary
<CAPTION>
1993 1992
($ in thousands, except per-share data) Fourth Third Second First Fourth Third Second First
------------------------------------ -----------------------------------
<S> <C> <C> <C> <C> <C> <C> <C> <C>
Interest income $73,788 $73,723 $75,650 $76,569 $74,349 $77,340 $99,036 $106,009
Interest expense 25,439 25,936 26,474 26,176 30,095 33,554 44,220 51,587
Net interest income 48,349 47,787 49,176 50,393 44,254 43,786 54,816 54,422
Provision for possible loan losses (17,500) 2,500 3,800 5,000 5,250 10,000 19,150 31,875
Net interest income after provision 65,849 45,287 45,376 45,393 39,004 33,786 35,666 22,547
Noninterest income:
Noninterest income 17,142 16,587 17,792 15,696 16,607 14,244 18,060 20,339
Securities gains, net - - - - - - 6,539 10,651
Noninterest income 17,142 16,587 17,792 15,696 16,607 14,244 24,599 30,990
Noninterest expense 67,356 49,664 51,650 50,806 52,312 49,215 59,678 63,305
Income (loss) before taxes and extraordinary item 15,635 12,210 11,518 10,283 3,299 (1,185) 587 (9,768)
Income tax expense (benefit) 1,696 - - - 248 600 - -
Income (loss) before extraordinary item 13,939 12,210 11,518 10,283 3,051 (1,785) 587 (9,768)
Extraordinary loss on debt restructuring - - - - - (56,122) - -
NET INCOME (LOSS) $13,939 $12,210 $11,518 $10,283 $3,051 ($57,907) $587 ($9,768)
Income (loss) per share: (3)
Income (loss) before extraordinary item $0.17 $0.15 $0.14 $0.12 $0.05 ($0.07) $0.02 ($0.35)
Extraordinary loss on debt restructuring - - - - - (1.98) - -
NET INCOME (LOSS) PER SHARE $0.17 $0.15 $0.14 $0.12 $0.05 ($2.05) $0.02 ($0.35)
Cash dividends declared per share - $0.03 - - - - - -
Average shares outstanding (000s) 83,594 83,443 83,247 82,400 55,586 28,288 28,285 28,274
SELECTED QUARTER-END BALANCES (in millions)
Loans $2,328.1 $2,237.3 $2,230.8 $2,215.1 $2,360.1 $2,424.8 $2,589.2 $3,447.3
Deposits 4,086.0 3,971.3 4,031.0 4,087.3 4,036.4 3,997.1 3,971.6 4,906.1
Debt - - - 6.2 8.3 47.8 97.1 95.7
Equity 428.4 404.0 393.7 379.5 369.1 247.4 190.0 189.4
Total Assets 4,795.6 4,581.0 4,668.0 4,664.3 4,734.0 4,609.0 4,536.5 5,570.8
SELECTED AVERAGE BALANCES (in millions)
Loans $2,275.1 $2,208.1 $2,247.6 $2,270.7 $2,385.5 $2,498.0 $3,301.8 $3,602.8
Deposits 3,976.0 3,974.9 4,009.5 4,010.5 3,914.9 3,912.4 4,830.6 5,030.9
Debt - 0.1 3.7 8.2 45.8 96.0 96.0 94.9
Equity 410.6 401.3 388.5 373.7 269.5 193.6 189.0 193.9
Total Assets 4,644.2 4,596.7 4,624.5 4,677.9 4,604.1 4,544.1 5,380.8 5,811.3
SELECTED RATIOS
Annualized return on average assets (4) 1.20% 1.06% 1.00% 0.88% 0.27% -1.39% 0.04% -0.67%
Annualized return on average equity (4) 13.58% 12.17% 11.86% 11.01% 4.53% -32.67% 1.24% -20.15%
Net interest margin (taxable-equivalent) 4.51% 4.50% 4.64% 4.76% 4.28% 4.29% 4.58% 4.34%
Average equity/average assets 8.84% 8.73% 8.40% 7.99% 5.85% 4.26% 3.51% 3.34%
Tier 1 risk-based capital ratio 15.56% 15.67% 14.96% 14.34% 13.15% 6.55% 4.29% 3.81%
Total risk-based capital ratio 16.87% 17.00% 16.30% 15.85% 14.68% 8.47% 5.80% 5.30%
Leverage Ratio 8.25% 7.98% 7.68% 7.28% 7.15% 3.91% 2.68% 2.45%
(1) Prior periods have been conformed to current-period presentation.
(2) The Texas Bank was sold December 31, 1992. Effective June 30, 1992, and until the date of sale, accounts of the Texas Bank
are reported under the equity method as a single line item in the financial statements, related tables and charts. Accounts of
the Texas Bank are excluded from the computation of the Company's average balances effective June 30, 1992.
(3) Income (loss) per common share data are based on the weighted average number of common shares ourstading in the respective
period, except for the fourth quarter of 1992. Per-share data for the fourth quarter of 1992 are based on common stock and common
stock equivalents outstanding during the period. The computation of fully diluted earnings per share is not dilutive and,
therefore, not presented. Dividends per share are historical amounts.
(4) Computations do not annualize extraordinary loss on debt restructuring.
</TABLE>
<PAGE>
<TABLE>
TABLE 1 - COMPOSITION OF LOAN PORTFOLIO
<CAPTION>
($ in millions)
December 31, 1993 December 31, 1992
--------------------- --------------------
Percent Percent
Loans of Loans of
Outstanding Total Outstanding Total
(in millions) (in millions)
--------------------- --------------------
<S> <C> <C> <C> <C>
Energy-related $ 66.1 2.8 % $ 46.5 2.0 %
Transportation,
communications
and utilities 111.8 4.8 153.6 6.5
Commercial
real estate 308.9 13.3 339.0 14.4
Health care 214.6 9.2 255.2 10.8
Services 239.6 10.3 241.5 10.2
Commercial and
industrial 393.5 16.9 429.6 18.2
Other commercial 138.8 6.0 161.7 6.9
Total commercial 1,473.3 63.3 1,627.1 69.0
Residential mortgage 365.9 15.7 333.3 14.1
Indirect 238.2 10.2 139.3 5.9
Student 74.5 3.2 72.5 3.1
Revolving credit 49.2 2.1 51.3 2.2
Other 127.0 5.5 136.6 5.7
Total consumer 854.8 36.7 733.0 31.0
Total $ 2,328.1 100.0 % $ 2,360.1 100.0 %
</TABLE>
<PAGE>
<TABLE>
TABLE 2 - COMPOSITION OF SECURITIES
<CAPTION>
December 31 ($ in millions)
1993 1992 1991
------ ------ ------
<S> <C> <C> <C>
Available for sale:
Mortgage-backed securities $394.7 $492.7 $520.1
Total available for sale 394.7 492.7 520.1
Held to maturity:
U.S. treasuries 496.9 517.8 454.0
U.S. agencies - - 5.7
Mortgage-backed securities 1,021.3 433.3 236.8
States and political subdivisions - - 0.1
Other 8.0 5.8 7.8
Total held to maturity 1,526.2 956.9 704.4
Total securities $1,920.9 $1,449.6 $1,224.5
</TABLE>
<PAGE>
<TABLE>
TABLE 3 - MATURITIES AND YIELDS OF SECURITIES
<CAPTION>
December 31, 1993 ($ in millions)
Due after 1 Due after 5
Due in 1 year year through years through Due after
or less 5 years 10 years 10 years Total
--------------- -------------- -------------- ---------------- -------------
Amount Yield Amount Yield Amount Yield Amount Yield Amount Yield
--------------- -------------- --------------- ----------------- -------------
<S> <C> <C> <C> <C> <C> <C> <C> <C> <C> <C>
Available for sale:
Mortgage-backed securities(1) $ - - $ 0.8 6.68% $ 51.9 6.68% $ 342.0 6.68% $ 394.7 6.68%
Total available for sale - - 0.8 6.68% 51.9 6.68% 342.0 6.68% 394.7 6.68%
Held to maturity:
U.S. treasuries 101.4 4.32% 395.5 5.40% - - - - 496.9 5.17%
Mortgage-backed securities(1) - - - - 13.8 5.68% 1,007.5 5.68% 1,021.3 5.68%
Other - - - - - - 8.0 6.00% 8.0 6.00%
Total held to maturity 101.4 4.32% 395.5 5.40% 13.8 5.68% 1,015.5 5.68% 1,526.2 5.52%
Total securities $ 101.4 4.32% $ 396.3 5.40% $ 65.7 6.47% $ 1,357.5 5.93% $ 1,920.9 5.76%
(1) Mortgage-backed securities are classified according to their contractual maturity without consideration of contractual
repayments or projected prepayments.
</TABLE>
<PAGE>
<TABLE>
TABLE 4 - NONPERFORMING ASSETS
<CAPTION>
December 31 ($ in thousands)
1993 1992 1991 1990 1989
--------- --------- --------- --------- --------
<S> <C> <C> <C> <C> <C>
Nonaccrual loans $ 52,613 $ 130,198 $ 213,451 $ 165,529 $ 45,620
Restructured loans 1,841 - - - -
Nonperforming loans 54,454 130,198 213,451 165,529 45,620
Foreclosed assets 27,920 49,742 105,523 49,060 20,269
Total nonperforming assets $ 82,374 $ 179,940 $ 318,974 $ 214,589 $ 65,889
Accruing loans past due 90 days or more $ 2,712 $ 6,232 $ 9,472 $ 33,823 $ 37,776
Reserve for possible loan losses $ 159,143 $ 185,061 $ 208,330 $ 152,510 $ 67,540
Nonperforming assets/
loans plus foreclosed assets 3.50% 7.47% 8.29% 4.11% 1.38%
Reserve for possible loan losses/
nonperforming loans 292.3% 142.1% 97.6% 92.1% 148.0%
Net loans charged off/average loans 0.88% 2.51% 2.63% 1.66% 0.85%
</TABLE>
<PAGE>
<TABLE>
TABLE 5 - NONPERFORMING ASSETS BY PERFORMANCE CLASSIFICATION
<CAPTION>
December 31, 1993 ($ in thousands)
Total
Nonperforming In-Substance Other Nonperforming
Loans Foreclosures Real Estate Assets
------------- ------------ ----------- --------------
<S> <C> <C> <C> <C>
Current (1) $ 31,023 $ 955 $ - $ 31,978
Substantial performance 4,302 - - 4,302
Marginal performance 10,438 397 - 10,835
Minimal performance 8,691 20,641 5,927 35,259
Total $ 54,454 $ 21,993 $ 5,927 $ 82,374
(1)Includes loans totaling $11.4 million that are performing in accordance with existing
contractual repayment terms, although these terms have been modified from the original
contractual terms.
</TABLE>
<PAGE>
<TABLE>
TABLE 6 - SUMMARY OF NONPERFORMING LOAN ACTIVITY
<CAPTION>
Year ended December 31, 1993 ($ in thousands)
Commercial Health Other Total Non-
Real Estate Care Services Commercial Consumer performing Loans
----------- -------- ---------- ---------- ---------- ----------------
<S> <C> <C> <C> <C> <C> <C>
Nonperforming loans at December 31, 1992 $ 43,466 $ 13,761 $ 8,626 $ 63,077 $ 1,268 $ 130,198
Additions in 1993 13,634 1,042 7,627 13,611 6,603 42,517
Charge-offs - gross (2,812) (415) (1,546) (11,092) (7,159) (23,024)
Returned to performing status (20,687) (2,071) (662) (7,974) - (31,394)
Transfers to foreclosed assets (107) - (313) (759) - (1,179)
Payments, sales and
other reductions (17,815) (3,720) (6,982) (34,147) - (62,664)
Nonperforming loans at December 31, 1993 $ 15,679 $ 8,597 $ 6,750 $ 22,716 $ 712 $ 54,454
</TABLE>
<PAGE>
<TABLE>
TABLE 7 - FORECLOSED ASSETS
<CAPTION>
December 31, 1993 ($ in thousands)
Percentage
Outstandings Composition
------------ ----------
<S> <C> <C>
Commercial office buildings $ 8,131 29.1 %
Hotels 3,614 12.9
Commercial retail 5,523 19.8
Non-commercial land 1,781 6.4
Warehouses 4,530 16.2
Commercial land 955 3.4
Other commercial use 273 1.0
Other 3,113 11.2
Total $ 27,920 100.0 %
</TABLE>
<PAGE>
<TABLE>
TABLE 8 - ALLOCATION OF RESERVE
FOR POSSIBLE LOAN LOSSES
<CAPTION>
December 31, 1993
Reserve for
($ in millions) Possible Loan Losses % of Total
-------------------- -----------
<S> <C> <C>
Commercial real estate $27.6 17.4 %
Other commercial loans 77.0 48.4
Consumer loans 20.7 13.0
Unallocated reserve 33.8 21.2
Total $159.1 100.0 %
</TABLE>
<PAGE>
<TABLE>
TABLE 9 - RESERVE FOR POSSIBLE LOAN LOSS ACTIVITY
<CAPTION>
($ in thousands) 1993 1992 1991
-------- -------- --------
<S> <C> <C> <C>
Balance at beginning of year $185,061 $208,330 $152,510
Loans charged off (34,283) (88,607) (130,951)
Recoveries 14,565 14,569 8,441
Net loans charged off (19,718) (74,038) (122,510)
Provision for possible loan losses (6,200) 66,275 178,330
Reduction due to sale of Texas Bank - (15,506) -
Balance at end of year $159,143 $185,061 $208,330
</TABLE>
<PAGE>
<TABLE>
TABLE 10 - AVERAGE DEPOSIT RATES
<CAPTION>
1993 1992 1991
---- ---- -----
<S> <C> <C> <C>
NOW accounts 1.46% 2.34% 4.13%
Money market deposit accounts 2.45% 3.13% 5.44%
Savings accounts 1.76% 2.69% 4.60%
Other consumer time deposits 4.11% 4.69% 6.84%
Public fund certificates of deposit
of $100,000 or more 3.29% 4.03% 6.27%
Certificates of deposit
of $100,000 or more 2.90% 5.06% 7.11%
Foreign time deposits 2.98% 3.25% 6.42%
Total interest-bearing deposits 3.04% 3.79% 6.09%
</TABLE>
<PAGE>
<TABLE>
TABLE 11 - DEPOSIT COMPOSITION
<CAPTION>
($ in millions)
1993 1992 1991
---------------------- ---------------------- -----------------------
Average % of Average % of Average % of
Outstandings Deposits Outstandings Deposits Outstandings Deposits
------------ -------- ------------ -------- ------------ ----------
<S> <C> <C> <C> <C> <C> <C>
Demand, noninterest-bearing $ 699.0 17.6 % $ 628.6 15.8 % $ 716.0 14.1 %
NOW accounts 390.7 9.8 368.8 9.2 326.7 6.4
Money market deposit accounts 909.1 22.8 908.7 22.8 1,106.1 21.8
Savings accounts 156.7 3.9 146.0 3.7 131.8 2.6
Other consumer time deposits 1,139.2 28.5 1,242.1 31.2 1,604.9 31.6
Total core deposits (excluding Texas Bank) 3,294.7 82.6 3,294.2 82.7 3,885.5 76.5
Public fund certificates of
deposit of $100,000 or more 591.5 14.8 566.4 14.2 723.7 14.2
Certificates of deposit of
$100,000 or more 101.4 2.5 122.7 3.1 411.3 8.1
Foreign time deposits 5.0 0.1 2.2 - 60.0 1.2
Total deposits (excluding Texas bank) $ 3,992.6 100.0 % $ 3,985.5 100.0 % $ 5,080.5 100.0 %
Total deposits of Texas Bank - 434.0 986.6
Total deposits $3,992.6 $4,419.5 $6,067.1
</TABLE>
<PAGE>
<TABLE>
TABLE 12 - INTEREST RATE SENSITIVITY AND GAP ANALYSIS
<CAPTION>
December 31, 1993 ($ in thousands)
Over Over 5 Years
1-30 31-60 61-90 91-365 1 Year- and Non-
Days Days Days Days 5 Years Sensitive Total
---------- ---------- -------- ---------- ----------- -------------- -------------
<S> <C> <C> <C> <C> <C> <C> <C>
Earning assets:
Loans $ 726,587 $ 114,112 $ 82,900 $ 264,935 $ 1,094,992 $ 44,593 $ 2,328,119
Securities held to maturity 567,070 1,539 1,549 114,333 477,491 364,249 1,526,231
Securities available for sale 394,640 - - - - - 394,640
Other earning assets 220,000 - - - - - 220,000
Subtotal 1,908,297 115,651 84,449 379,268 1,572,483 408,842 4,468,990
Funding sources:
Savings and NOW accounts (1) - - - - - 578,323 578,323
Other interest-bearing deposits 1,363,151 203,142 174,978 748,784 112,998 91,966 2,695,019
Short-term funds 137,986 - - - - - 137,986
Noninterest-bearing sources - - - - - 1,057,662 1,057,662
Subtotal 1,501,137 203,142 174,978 748,784 112,998 1,727,951 4,468,990
Repricing/maturity gap:
Period $ 407,160 $ (87,491) $ (90,529) $ (369,516) $ 1,459,485 $ (1,319,109) $ -
Cumulative $ 407,160 $ 319,669 $ 229,140 $ (140,376) $ 1,319,109 $ - $ -
Gap/total earning assets:
Period 9.1 % (2.0)% (2.0)% (8.3)% 32.7 % (29.5)%
Cumulative 9.1 % 7.2 % 5.1 % (3.1)% 29.5 %
(1) Savings and NOW accounts are included in the "over 5 years and non-sensitive" category, as the rates on these core deposits,
with indeterminate maturities, historically are fixed-rate, are not responsive to general market interest rate movements and would
be expected to change only after significant money market interest rate movements, at management's discretion.
</TABLE>
<PAGE>
<TABLE>
TABLE 13 - NET INTEREST MARGIN (Taxable-Equivalent)
<CAPTION>
1993 1992 1991 1990 1989
---- ---- ---- ------- -------
<S> <C> <C> <C> <C> <C>
Yield on earning assets 7.00 % 7.81 % 9.58 % 10.92 % 11.19 %
Rate on interest-bearing liabilities 3.04 3.98 6.19 7.34 7.92
Net interest spread 3.96 3.83 3.39 3.58 3.27
Contribution of noninterest-bearing funds 0.64 0.54 0.60 0.71 0.88
Net interest margin 4.60 % 4.37 % 3.99 % 4.29 % 4.15 %
Noninterest-bearing funds supporting earning assets 21.24 % 13.59 % 9.66 % 9.65 % 11.10 %
</TABLE>
<PAGE>
<TABLE>
TABLE 14 - CHANGES IN TAXABLE-EQUIVALENT NET INTEREST INCOME (1)
<CAPTION>
($ in thousands)
1993 Compared to 1992 1992 Compared to 1991
---------------------------------- -----------------------------------
Increase (Decrease) Due to Change In:
Volume Rate Total Volume Rate Total
----------------------------------- ----------------------------------
<S> <C> <C> <C> <C> <C> <C>
Taxable-equivalent
interest earned on:
Loans $(58,866) $(10,491) $(69,357) $(154,975) $(47,665) $(202,640)
Securities available for sale (4,552) (2,739) (7,291) 35,678 0 35,678
U.S. government securities
and obligations of U.S.
government agencies 31,703 (7,614) 24,089 (39,273) (21,903) (61,176)
Other investment securities 0 2 2 (4,833) (2,532) (7,365)
Short-term investments (4,773) (1,231) (6,004) 6,706 (1,744) 4,962
Total (36,488) (22,073) (58,561) (156,697) (73,844) (230,541)
Interest paid on:
NOW accounts (786) (3,491) (4,277) 354 (7,663) (7,309)
Money market
deposit accounts (4,788) (6,728) (11,516) (19,907) (29,002) (48,909)
Savings accounts (27) (1,456) (1,483) 324 (3,021) (2,697)
Other consumer time (8,762) (7,187) (15,949) (29,455) (33,858) (63,313)
Public fund certificates of
deposit of $100,000 or more (4) (4,375) (4,379) (8,948) (14,645) (23,593)
Certificates of deposit
of $100,000 or more (1,434) (2,450) (3,884) (18,989) (7,685) (26,674)
Foreign deposits 83 (5) 78 (2,498) (1,285) (3,783)
Short-term borrowings (2,115) (746) (2,861) (3,923) (5,739) (9,662)
Long-term debt (8,375) (2,785) (11,160) (2,142) 1,408 (734)
Total (26,208) (29,223) (55,431) (85,184) (101,490) (186,674)
Taxable-equivalent
net interest income $(10,280) $7,150 $(3,130) $(71,513) $27,646 $(43,867)
(1) Change due to mix (both rate and volume) has been allocated to volume and rate changes in proportion to
the relationship of the absolute dollar amounts to the changes in each.
</TABLE>
<PAGE>
<TABLE>
TABLE 15 - NONINTEREST INCOME
<CAPTION>
Percent Increase (Decrease)
------------------------
1993 1992
($ in thousands) 1993 1992 1991 over 1992 over 1991
-------- ------- -------- ----------- -----------
<S> <C> <C> <C> <C> <C>
Trust fees $ 12,692 $11,743 $ 13,230 8.1 % (11.2)%
Service charges on deposits 30,046 29,303 28,764 2.5 1.9
Other service, collection and
exchange charges:
Mortgage loan servicing income 5,863 5,872 5,321 (0.2) 10.4
Retail investment service income 4,621 4,511 4,796 2.4 (5.9)
Other 5,284 4,189 8,239 26.1 (49.2)
Gain on settlement of acquired loans 1,308 2,026 3,016 (35.4) (32.8)
Other income:
Computer services 2,361 2,606 2,974 (9.4) (12.4)
Other income 5,042 6,988 9,687 (27.8) (27.9)
Loss on sale of Texas Bank 0 (2,934) 0 100.0 0.0
Total fee income 67,217 64,304 76,027 4.5 (15.4)
Securities gains 0 17,190 16,604 (100.0) 3.5
Total noninterest income 67,217 81,494 92,631 (17.5) (12.0)
Noninterest income for Texas Bank 0 4,946 17,039 (100.0) (71.0)
Total noninterest income $ 67,217 $86,440 $109,670 (22.2)% (21.2)%
</TABLE>
<PAGE>
<TABLE>
TABLE 16 - NONINTEREST EXPENSE
<CAPTION>
Percent Increase (Decrease)
-----------------------
1993 1992
($ in thousands) 1993 1992 1991 over 1992 over 1991
-------- -------- -------- ----------- ----------
<S> <C> <C> <C> <C> <C>
Salaries $ 70,218 $ 67,212 $ 79,254 4.5 % (15.2)%
Benefits 13,146 10,832 16,299 21.4 (33.5)
Total staff costs 83,364 78,044 95,553 6.8 (18.3)
Occupancy, net 20,611 20,284 23,153 1.6 (12.4)
Equipment 11,043 12,020 10,563 (8.1) 13.8
Data processing 16,504 17,430 12,352 (5.3) 41.1
Foreclosed property expense, net 2,188 15,834 24,436 (86.2) (35.2)
Provision for data processing
enhancements 11,991 0 0 0.0 0.0
Deposit insurance and
examination fees 12,050 10,227 12,021 17.8 (14.9)
Postage 3,599 3,631 5,256 (0.9) (30.9)
Stationery and supplies 3,498 3,282 3,721 6.6 (11.8)
Professional 7,465 10,958 12,929 (31.9) (15.2)
Amortization of intangibles 7,362 8,434 8,032 (12.7) 5.0
State taxes on equity 2,356 1,872 4,614 25.9 (59.4)
Loan collection expense 3,876 5,289 7,288 (26.7) (27.4)
Advertising and promotional expenses 5,029 2,071 2,100 142.8 (1.4)
Valuation allowance on Texas Bank 0 0 13,000 0.0 (100.0)
Other 28,540 16,024 31,503 78.1 (49.1)
Total Noninterest Expense 219,476 205,400 266,521 6.9 (22.9)
Noninterest expense for Texas bank 0 19,110 42,450 (100.0) (55.0)
Total Noninterest Expense $219,476 $224,510 $308,971 (2.2)% (27.3)%
EFFICIENCY RATIO (1) 82.15 % 82.10 % 94.29 %
(1) Noninterest expense as a percentage of net interest income (T.E.) plus fee income adjusted to
exclude effect of the Texas Bank.
</TABLE>
<PAGE>
<TABLE>
TABLE 17 - RISK BASED CAPITAL CALCULATIONS
<CAPTION>
December 31, 1993
Minimum
($ in millions) Outstandings Ratio Standards
------------ ----- ---------
<S> <C> <C> <C>
Tier 1 (core capital)
Shareholders' equity $ 428.4
Less: goodwill & other
intangibles (39.1)
Less: unrealized gains on
securities available for sale (10.3)
Total Tier 1 379.0 15.56 % 4.00%
Tier 2 (supplemental capital)
Allowable reserve for possible
loan losses (limited to 1.25% of
gross risk-weighted assets-
total reserves $159.1 million) 32.0
Total Tier 2 32.0 1.31
Total capital $ 411.0 16.87 % 8.00%
Net risk-weighted assets
(includes off-balance-
sheet amounts) $ 2,436.5
</TABLE>
<PAGE>
GRAPHIC MATERIAL APPENDIX
GRAPH DESCRIPTION CROSS REFERENCE
- - ----------------------------- ------------------------------------
Loan Portfolio Mix Pie Chart See MD&A Table 1
Nonperforming Assets Graph See MD&A Table 4
Nonperforming Assets by
Performance Classification
Pie Chart See MD&A Table 5
Nonperforming Asset Ratio Graph See MD&A Table 4
Average Core Deposits Graph
depicting average core deposits
(excluding the Texas Bank) as a
percentage of average total
deposits: 1993 - 83%; 1992 - 83%;
1991 - 76%; 1990 - 67%; and
1989 - 66%.
Net Income Graph See Quarterly Consolidated Summary
of Income and Selected Financial Data
<PAGE>
REPORT OF ERNST & YOUNG, INDEPENDENT AUDITORS
THE BOARD OF DIRECTORS
AND SHAREHOLDERS
HIBERNIA CORPORATION
We have audited the accompanying consolidated balance sheets
of Hibernia Corporation and Subsidiary as of December 31, 1993 and
1992, and the related consolidated statements of income, changes in
shareholders' equity, and cash flows for each of the three years in
the period ended December 31, 1993. These financial statements are
the responsibility of the Company' management. Our responsibility
is to express an opinion on these financial statements based on our
audits.
We conducted our audits in accordance with generally accepted
auditing standards. Those standards require that we plan and
perform the audit to obtain reasonable assurance about whether the
financial statements are free of material misstatement. An audit
includes examining, on a test basis, evidence supporting the
amounts and disclosures in the financial statements. An audit also
includes assessing the accounting principles used and significant
estimates made by management, as well as evaluating the overall
financial statement presentation. We believe that our audits
provide a reasonable basis for our opinion.
In our opinion, the financial statements referred to above
present fairly, in all material respects, the consolidated
financial position of Hibernia Corporation and Subsidiary at
December 31, 1993 and 1992, and the consolidated results of their
operations and their cash flows for each of the three years in the
period ended December 31, 1993, in conformity with generally
accepted accounting principles.
As discussed in Notes 3 and 13, in 1993 the Company changed
its method of accounting for debt securities and income taxes. As
discussed in Note 14, in 1991 the Company changed its method of
accounting for lease expense.
/s/Ernst & Young
New Orleans, Louisiana
January 11, 1994
<PAGE>
<TABLE>
CONSOLIDATED BALANCE SHEETS
Hibernia Corporation and Subsidiary
December 31 ($ in thousands) 1993 1992
<CAPTION> ---------- ---------
<S> <C> <C>
ASSETS
Cash and due from banks $216,675 $254,221
Short-term investments 220,000 578,223
Securities available for sale 394,640 492,719
Securities held to maturity (estimated market values 1993 and 1992:
$1,551,832 and $973,315) 1,526,231 956,923
Loans, net of unearned income 2,328,119 2,360,113
Reserve for possible loan losses (159,143) (185,061)
Loans, net 2,168,976 2,175,052
Bank premises and equipment 81,291 87,305
Customers' acceptance liability 11,800 2,088
Other assets 175,970 187,507
TOTAL ASSETS $4,795,583 $4,734,038
LIABILITIES
Deposits:
Demand, noninterest-bearing $812,693 $759,744
Interest-bearing 3,273,342 3,276,696
Total Deposits 4,086,035 4,036,440
Federal funds purchased and securities sold under
agreements to repurchase 137,986 111,902
Liability on acceptances 11,800 2,088
Payables arising from securities transactions not yet settled 50,875 151,344
Other liabilities 80,515 54,867
Debt - 8,269
TOTAL LIABILITIES 4,367,211 4,364,910
SHAREHOLDERS' EQUITY
Preferred Stock, no par value:
Authorized - 100,000,000 shares; issued and
outstanding - none - -
Class A Common Stock, no par value:
Authorized - 100,000,000 shares; issued and
outstanding - 83,611,764 and 82,397,009 at
December 31, 1993 and 1992 160,535 158,202
Class B Common Stock (non-voting), no par value:
Authorized - 100,000,000 shares; issued and
outstanding - none - -
Surplus 404,745 403,528
Retained earnings (deficit) (147,160) (192,602)
Unrealized gain on securities available for sale 10,252 -
TOTAL SHAREHOLDERS' EQUITY 428,372 369,128
TOTAL LIABILITIES AND SHAREHOLDERS' EQUITY $4,795,583 $4,734,038
See notes to consolidated financial statements.
</TABLE>
<PAGE>
<TABLE>
CONSOLIDATED STATEMENTS OF INCOME
Hibernia Corporation and Subsidiary
<CAPTION>
($ in thousands, except per-share data) 1993 1992 1991
-------- -------- --------
<S> <C> <C> <C>
Interest Income
Interest and fees on loans $185,378 $253,183 $451,675
Interest on securities:
U.S. government securities and obligations of U.S. government agencies 105,939 89,131 114,629
Obligations of states and political subdivisions - 3 4,970
Trading account interest 33 99 70
Interest on time deposits in domestic banks 194 223 100
Interest on federal funds sold and securities
purchased under agreements to resell 8,186 14,095 9,285
Total Interest Income 299,730 356,734 580,729
Interest Expense
Interest on deposits 100,092 141,502 317,780
Interest on federal funds purchased and securities sold under agreements to repurchase 3,654 6,515 16,177
Interest on debt 279 11,439 12,173
Total Interest Expense 104,025 159,456 346,130
Net Interest Income 195,705 197,278 234,599
Provision for possible loan losses (6,200) 66,275 178,330
Net Interest Income After Provision for Possible Loan Losses 201,905 131,003 56,269
Noninterest Income
Trust fees 12,692 12,263 14,346
Service charges on deposits 30,046 31,870 34,779
Other service, collection and exchange charges 15,768 13,928 19,938
Gain on settlement of acquired loans 1,308 4,151 9,043
Other operating income 7,403 9,972 13,763
Loss on sale of Texas Bank - (2,934) -
Securities gains, net - 17,190 17,801
Total Noninterest Income 67,217 86,440 109,670
Noninterest Expense
Salaries and employee benefits 83,364 86,141 115,173
Occupancy expense, net 20,611 23,275 28,785
Equipment expense 11,043 13,447 13,979
Data processing expense 16,504 17,477 12,548
Foreclosed property expense, net 2,188 16,302 24,854
Provision for data processing enhancements 11,991 - -
Other operating expense 73,775 67,868 113,632
Total Noninterest Expense 219,476 224,510 308,971
Income (Loss) Before Income Taxes, Extraordinary Item
and Cumulative Effect of Accounting Change 49,646 (7,067) (143,032)
Income tax expense 1,696 848 965
Income (Loss) Before Extraordinary Item and
Cumulative Effect of Accounting Change 47,950 (7,915) (143,997)
Extraordinary loss on debt restructuring - (56,122) -
Cumulative effect of change in accounting for lease expense - - (21,643)
Net Income (Loss) $47,950 ($64,037) ($165,640)
Income (Loss) Per Share
Income (loss) before extraordinary item and cumulative effect of accounting change $0.58 ($0.27) ($5.12)
Extraordinary loss on debt restructuring - (1.89) -
Cumulative effect of change in accounting for lease expense - - (0.77)
Net Income (Loss) Per Share $0.58 ($2.16) ($5.89)
See notes to consolidated financial statements.
</TABLE>
<PAGE>
<TABLE>
CONSOLIDATED STATEMENTS OF CHANGES IN SHAREHOLDERS' EQUITY
Hibernia Corporation and Subsidiary
<CAPTION>
Unrealized
Shares of Shares of Retained Gains (Losses)
Preferred Common Preferred Common Earnings on Securities
($ in thousands, except per share data) Stock Stock Stock Stock Surplus (Deficit) Available for Sale Total
--------- ------- --------- ------ -------- --------- ------------------ -----
<S> <C> <C> <C> <C> <C> <C> <C> <C>
Balances at December 31, 1990 - 27,848 $ $53,467 $271,804 $41,256 $ - $366,527
Net loss for 1991 - - - - - (165,640) - (165,640)
Issuance of Common Stock:
Divdend Reinvestment Plan - 174 - 335 827 - - 1,162
Employee Benefit Plan - 243 - 467 764 - - 1,231
Cash dividends declared -- $.15 per share - - - - - (4,181) - (4,181)
Other - - - - 31 - - 31
Balances at December 31, 1991 - 28,265 - 54,269 273,426 (128,565) - 199,130
Net loss for 1992 - - - - - (64,037) - (64,037)
Issuance of Class A Common Stock:
Divdend Reinvestment Plan - 14 - 26 38 - - 64
Employee Benefit Plan - 12 - 24 37 - - 61
Issuance of Preferred Stock in debt
restructuring 21,818 - 60,000 - 50,472 - - 110,472
Issuance of 1,812,000 Common Stock
Purchase Warrants in debt restructing - - - - 4,304 - - 4,304
Issuance of Common Stock pursuant
to rights offering - 21,677 - 41,619 37,588 - - 79,207
Issuance of Common Stock pursuant
to debt conversion - 10,338 - 19,848 20,079 - - 39,927
Conversion of Preferred Stock
to Common Stock (21,818) 22,091 (60,000) 42,416 17,584 - - -
Balances at December 31, 1992 - 82,397 - 158,202 403,528 (192,602) - 369,128
Net income for 1993 - - - - - 47,950 - 47,950
Issuance of Common Stock:
Divdend Reinvestment Plan - 32 - 62 167 - - 229
Stock Option Plan - 32 - 61 95 - - 156
Exercise of Purchase Warrants - 1,151 - 2,210 955 - - 3,165
Cumulative effect of change in accounting for
securities available for sale, net of tax - - - - - - 10,252 10,252
Cash dividends declared -- $.03 per share - - - - - (2,508) - (2,508)
Balances at December 31, 1993 - 83,612 $ $160,535 $404,745 ($147,160) $10,252 $428,372
See notes to consolidated financial statements.
</TABLE>
<PAGE>
<TABLE>
CONSOLIDATED STATEMENTS OF CASH FLOWS
Hibernia Corporation and Subsidiary
<CAPTION>
Year Ended December 31 ($ in thousands) 1993 1992 1991
------- -------- ----------
<S> <C> <C> <C>
Operating Activities
Net income (loss) $47,950 ($64,037) ($165,640)
Adjustments to reconcile net income (loss) to net
cash provided by operating activities:
Extraordinary loss on debt restructuring - 56,122 -
Provision for possible loan losses (6,200) 66,275 178,330
Rent accrued, not currently payable - - 21,643
Amortization of intangibles and deferred charges 7,482 9,278 8,706
Depreciation and amortization 11,257 14,655 13,900
Valuation of Texas Bank - - 13,000
Discount accretion, net of premium amortization 17,108 8,018 (6,175)
Realized investment securities gains - (17,190) (17,801)
Provision for data processing enhancements 11,991 - -
Gain on sale of assets (3,907) (1,528) (2,285)
Other 8,834 18,334 27,637
Decrease (increase) in interest receivable and other assets (3,951) 52,702 34,611
Increase (decrease) in interest payable and other liabilities 15,992 8,447 (8,493)
Net Cash Provided By Operating Activities 106,556 151,076 97,433
Investing Activities
Purchases of securities (1,061,626) (949,773) (629,020)
Proceeds from sales of securities - 452,886 532,682
Maturities of securities 483,045 242,582 194,934
Net decrease (increase) in loans (70,786) 656,156 238,770
Proceeds from sales of loans 66,074 98,767 935,137
Proceeds from sale of Texas Bank, net of $146,237 cash sold - (88,237) -
Purchases of premises, equipment and other assets (9,238) (9,197) (16,581)
Proceeds from sales of premises, equipment and other assets 21,779 58,835 33,879
Net Cash (Used) Provided By Investing Activities (570,752) 462,019 1,289,801
Financing Activities
Net increase (decrease) in domestic deposits 47,873 (444,147) (1,067,808)
Net increase (decrease) in time deposits - foreign office 1,722 (311) (120,923)
Net increase (decrease) in short-term borrowings 26,084 (21,968) (162,883)
Payments on debt (8,269) (650) (10,685)
Issuance of common stock 3,550 77,986 2,424
Dividends paid (2,508) - (4,181)
Net Cash Provided (Used) By Financing Activities 68,452 (389,090) (1,364,056)
Increase (Decrease) in Cash And Cash Equivalents (395,744) 224,005 23,178
Cash and Cash Equivalents at beginning of year 832,419 608,414 585,236
Cash And Cash Equivalents at End of Year $436,675 $832,419 $608,414
Supplemental Disclosures
Cash paid (received) during the year for:
Interest expense $104,712 $166,926 $355,481
Income taxes $9,550 ($16,242) $ 917
Non-cash investing and financing activities:
Loans transferred to foreclosed assets $1,611 $27,694 $105,055
See notes to consolidated financial statements.
</TABLE>
<PAGE>
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
Note 1
Summary of Significant Accounting Policies
Hibernia Corporation, through its wholly owned subsidiary, Hibernia
National Bank (the Louisiana Bank), provides a full array of financial
products and services, including retail, commercial, small-business,
international, mortgage and private banking; cash management; and trust
throughout Louisiana. The Louisiana Bank, through its wholly owned
subsidiaries, also provides retail brokerage and alternative investments,
including mutual funds and annuities.
The accounting principles followed by Hibernia Corporation and
Subsidiary (the Company) and the methods of applying those principles conform
with generally accepted accounting principles and those generally practiced
within the banking industry. The principles which significantly affect the
determination of financial position and results of operations are summarized
below:
Consolidation
The consolidated financial statements include the accounts of Hibernia
Corporation (the Parent Company) and its wholly owned subsidiary, Hibernia
National Bank, for all periods presented and the accounts of Hibernia
National Bank in Texas (the Texas Bank) from August 24, 1989, the date of
acquisition, to June 30, 1992. The consolidated financial statements include
the Parent Company's equity investment in the Texas Bank from June 30, 1992,
to the date of its sale, December 31, 1992. All significant intercompany
transactions and balances have been eliminated.
Securities
At December 31, 1993, the Company adopted Statement of Financial
Accounting Standards (SFAS) No. 115, "Accounting for Certain Investments in
Debt and Equity Securities." SFAS No. 115 requires the classification of
securities into one of three categories: Trading, Available for Sale, or Held
to Maturity.
Management determines the appropriate classification of debt securities
at the time of purchase and re-evaluates this classification periodically.
Trading account securities are held for resale in anticipation of short-term
market movements. Debt securities are classified as held to maturity when the
Company has the positive intent and ability to hold the securities to
maturity. Securities not classified as held to maturity or trading are
classified as available for sale.
Trading account securities are carried at market value and are included
in short-term investments. Gains and losses, both realized and unrealized,
are reflected in earnings. Held to maturity securities are stated at
amortized cost. Available for sale securities are stated at fair value, with
unrealized gains and losses, net of tax, reported in a separate component of
shareholders' equity.
The amortized cost of debt securities classified as held to maturity or
available for sale is adjusted for amortization of premiums and accretion of
discounts to maturity or, in the case of mortgage-backed securities, over the
estimated life of the security. Amortization, accretion and accruing interest
are included in interest income on securities. Realized gains and losses, and
declines in value judged to be other than temporary, are included in net
securities gains. The cost of securities sold is determined based on the
specific identification method.
Loans
Loans are stated at the principal amounts outstanding, less unearned
income and the reserve for possible loan losses. Interest on loans and
accretion of unearned income are computed by methods which approximate a
level rate of return on recorded principal. Non-refundable loan origination
and commitment fees and certain direct loan origination costs are deferred,
and the net amount is amortized as an adjustment of the related loan's yield
over the life of the loan.
Loans are placed in nonaccrual status when, in management's opinion,
there is a question concerning full collectibility of both principal and
interest.
Reserve for Possible Loan Losses
The reserve for possible loan losses is maintained to cover possible
losses inherent in the loan portfolio. The reserve is based on management's
estimate of future losses, and actual losses may vary from the current
estimate. The estimate is reviewed periodically, taking into consideration
the risk characteristics of the loan portfolio, past loss experience, general
economic conditions and other factors which deserve current recognition. As
adjustments to the estimate of future losses become necessary, they are
reflected as a provision for possible loan losses in current-period earnings.
Actual loan losses are deducted from and subsequent recoveries are added to
the reserve.
Foreclosed Assets
Foreclosed assets include real estate and other collateral acquired upon
the default of loans and in-substance foreclosures. In-substance foreclosure
occurs when the market value of the collateral is less than the legal
obligation of the borrower, repayment of the loan is dependent upon the sale
or operation of the collateral and the borrower's ability to rebuild equity
in the property is doubtful.
Foreclosed assets are recorded at fair value of the assets acquired less
the estimated cost to sell. Losses arising from the initial reduction of the
outstanding loan amount to fair value are deducted from the reserve for
possible loan losses. A valuation reserve for foreclosed assets is maintained
for subsequent valuation adjustments on a specific-property basis.
Bank Premises and Equipment
Bank premises and equipment are stated at cost less allowances for
depreciation and amortization. Depreciation and amortization are computed
primarily using the straight-line method over the estimated useful lives of
the assets, which generally are 10 to 40 years for buildings and 3 to 15
years for equipment, and over the shorter of the lease terms or the estimated
lives of the leasehold improvements.
Excess of Cost Over Fair Value of Net Assets Acquired
The excess of cost over the fair value of net assets acquired (goodwill)
is being amortized using the straight-line method over the estimated periods
benefited, generally 15 years.
Income Taxes
Effective January 1, 1993, the Company adopted SFAS No. 109, "Accounting
for Income Taxes." Under SFAS No. 109, the liability method is used in
accounting for income taxes. This method determines deferred tax assets and
liabilities based on differences between financial reporting and tax bases of
assets and liabilities. The tax effect of these differences is measured using
enacted tax rates and laws that will be in effect when the differences are
expected to reverse. Prior to the adoption of SFAS No. 109, income tax
expense was determined using the deferred method. Deferred tax expense was
based on items of income and expense that were reported in different years in
the financial statements and tax returns and was measured at the tax rate in
effect in the year the difference originated.
The Company files a consolidated federal income tax return. The
Louisiana Bank is subject to a Louisiana shareholder tax which is based
partly on income. The income portion is reported as state income tax. In
addition, certain sub-sidiaries of the Louisiana Bank are subject to
Louisiana state income tax.
Cash Flows
The Company considers as cash and cash equivalents all items included in
cash and due from banks, interest-bearing time deposits in domestic banks and
federal funds sold and securities purchased under agreements to resell.
Reclassification
Certain items included in the consolidated financial statements for 1992
and 1991 have been reclassified to conform with the 1993 presentation.
Note 2
Short-Term Investments
<TABLE>
<CAPTION>
December 31
($ in thousands) 1993 1992
------- ------
<S> <C> <C>
Interest-bearing time deposits in domestic banks $ - $8,198
Federal funds sold and securities purchased
under agreements to resell 220,000 570,000
Trading acount securities - 25
Total short-term investments $220,000 $578,223
</TABLE>
Note 3
Securities
As discussed in Note 1, the Company adopted SFAS No. 115 effective
December 31, 1993. Prior to December 31, 1993, the Company classified
securities as held for sale securities (available for sale) and investment
securities (held to maturity) based on criteria which did not differ
significantly from that required by SFAS No. 115. Held for sale securities
were recorded at the lower of cost or fair value. A summary of securities
classified as available for sale and held to maturity is presented below.
<TABLE>
<CAPTION>
($ in thousands) December 31, 1993
Estimated Gross Gross
Amortized Fair Unrealized Unrealized
Type Cost Value Gains Losses
- - ----------------------------- --------- --------- --------- -------
<S> <C> <C> <C> <C>
Available for sale:
Mortgage-backed securities $384,388 $394,640 $10,252 $ -
Total available for sale $384,388 $394,640 $10,252 $ -
Held to maturity:
U.S. treasuries $496,954 $509,386 $12,680 $248
Mortgage-backed securities 1,021,300 1,034,468 16,493 3,325
Other 7,977 7,978 1 -
Total held to maturity $1,526,231 $1,551,832 $29,174 $3,573
<CAPTION>
($ in thousands) December 31, 1992
Estimated Gross Gross
Amortized Fair Unrealized Unrealized
Type Cost Value Gains Losses
- - ----------------------------- ---------- -------- ---------- ---------
<S> <C> <C> <C> <C>
Available for sale:
Mortgage-backed securities $492,719 $502,818 $10,099 $ -
Total available for sale $492,719 $502,818 $10,099 $ -
Held to maturity:
U.S. treasuries $517,822 $525,622 $8,160 $360
Mortgage-backed securities 433,319 441,910 8,786 195
Other 5,782 5,783 1 -
Total held to maturity $956,923 $973,315 $16,947 $555
</TABLE>
Realized gains and losses from the sale of securities are
summarized below:
<TABLE>
<CAPTION>
Year Ended December 31
($ in thousands) 1993 1992 1991
------ ------- -------
<S> <C> <C> <C>
Realized gains $ - $17,190 $22,428
Realized losses - - (4,627)
Net realized gains $ - $17,190 $17,801
</TABLE>
Securities with carrying values of $1,253,546,000 and $1,124,643,000 at
December 31, 1993, and 1992, respectively, were either pledged to secure
public and trust deposits or sold under repurchase agreements as follows:
<TABLE>
<CAPTION>
December 31
($ in thousands) 1993 1992
---------- ----------
<S> <C> <C>
U.S. treasuries $417,401 $476,099
Mortgage-backed securities 656,773 177,533
Securities available for sale 179,372 471,011
Total $1,253,546 $1,124,643
</TABLE>
The carrying amount and estimated fair value by maturity of
securities held to maturity are shown below:
<TABLE>
<CAPTION>
December 31, 1993
Book Fair
($ in millions) Value Value
------ -------
<S> <C> <C>
Due in 1 year or less $101.4 $102.0
Due after 1 year through 5 years 395.5 407.4
Due after 5 years through 10 years 13.8 14.4
Due after 10 years 1,015.5 1,028.0
Total held to maturity $1,526.2 $1,551.8
</TABLE>
Mortgage-backed securities are classified according to their contractual
maturity without consideration of contractual repayments or projected
prepayments. Securities available for sale at December 31, 1993, include
mortgage-backed securities of $745,000 due after 1 year through 5 years,
$51,906,000 due after 5 years through 10 years and $341,989,000 due after 10
years.
Note 4
Loans
The following is a summary of loans classified by repayment source:
<TABLE>
<CAPTION>
December 31
($ in thousands) 1993 1992
------- --------
<S> <C> <C>
Energy-related $66,099 $46,510
Transportation,
communications
and utilities 111,829 153,599
Commercial real estate 308,851 338,954
Health care 214,571 255,205
Services 239,590 241,459
Commercial and
industrial 393,502 429,629
Other commercial 138,827 161,722
Total commercial 1,473,269 1,627,078
Residential mortgage 365,894 333,304
Indirect 238,219 139,329
Student 74,526 72,551
Revolving credit 49,215 51,253
Other 126,996 136,598
Total consumer 854,850 733,035
Total portfolio $2,328,119 $2,360,113
</TABLE>
The following is a summary of nonperforming loans and
foreclosed assets:
<TABLE>
<CAPTION>
December 31
($ in thousands) 1993 1992
------- --------
<S> <C> <C>
Nonaccrual loans $52,613 $130,198
Restructured loans 1,841 -
Nonperforming loans $54,454 $130,198
Foreclosed assets $27,920 $49,742
</TABLE>
Interest income in the amount of $8,134,000 for 1993, $16,794,000 for
1992 and $29,291,000 for 1991 would have been recorded on nonperforming loans
if they had been classified as performing. The Company recorded $2,104,000
and $741,000 of interest income on nonperforming loans during 1993 and 1992,
respectively; the Company recorded no interest income on nonperforming loans
during 1991.
In May 1993, the Financial Accounting Standards Board (FASB) issued SFAS
No. 114, "Accounting by Creditors for Impairment of a Loan," which becomes
effective January 1, 1995. SFAS No. 114 requires that an impaired loan be
measured based on discounted future cash flows, observable market price or
fair value of the collateral. The effect of adopting SFAS No. 114 is not
expected to have a material impact.
The following is a summary of activity in the reserve for possible loan
losses:
<TABLE>
<CAPTION>
Year Ended December 31
($ in thousands) 1993 1992 1991
-------- -------- --------
<S> <C> <C> <C>
Balance at
beginning of year $185,061 $208,330 $152,510
Loans charged off (34,283) (88,607) (130,951)
Recoveries 14,565 14,569 8,441
Net loans charged off (19,718) (74,038) (122,510)
Provision for possible
loan losses (6,200) 66,275 178,330
Reduction due to sale of
Texas Bank - (15,506) -
Balance at end of year $159,143 $185,061 $208,330
</TABLE>
A valuation reserve on foreclosed assets is reported as a reduction of
foreclosed assets. The table below summarizes the changes in this reserve:
<TABLE>
<CAPTION>
Year Ended December 31
($ in thousands) 1993 1992 1991
------ ------ ------
<S> <C> <C> <C>
Balance at beginning
of year $7,128 $5,188 $6,886
Addition to reserve
charged to expense 4,778 15,622 22,383
Write-downs of
foreclosed property (3,014) (13,682) (24,081)
Balance at end of year $8,892 $7,128 $5,188
</TABLE>
Note 5
Related-Party Transactions
Certain directors and officers of the Company, members of their
immediate families and entities in which they or members of their immediate
families have principal ownership interests are customers of and have other
transactions with the Company in the ordinary course of business. Loans to
these parties are made on substantially the same terms, including interest
rates and collateral, as those prevailing at the time for comparable
third-party transactions and do not involve more than normal risks of
collectibility or present other unfavorable features.
Loans to related parties were $24,355,000 and $28,920,000 at December
31, 1993, and 1992, respectively. The change during 1993 reflects $59,521,000
in new loans and $64,086,000 of repayments. These amounts do not include
loans made in the ordinary course of business to other entities with which
the Company has no relationship, other than a director of the Company being
a director of the other entity, unless the director had the ability to
significantly influence the other entity.
Securities sold to related parties under repurchase agreements amounted
to $9,968,000 and $13,115,000 at December 31, 1993, and 1992, respectively.
During 1993, the Company sold $22,700,000 of mortgage loan pools to a related
party at carrying value, which approximated fair value.
Note 6
Bank Premises and Equipment
<TABLE>
<CAPTION>
December 31
($ in thousands) 1993 1992
------- -------
<S> <C> <C>
Land $16,656 $17,206
Bank premises 47,607 48,479
Leasehold improvements 27,183 26,149
Furniture and equipment 68,858 64,899
160,304 156,733
Less allowance for depreciation
and amortization (79,013) (69,428)
Total $81,291 $87,305
</TABLE>
<TABLE>
<CAPTION>
Year Ended December 31
($ in thousands) 1993 1992 1991
------ ------ ------
<S> <C> <C> <C>
Provisions for depreciation
and amortization included in:
Occupancy expense $5,065 $3,788 $5,232
Equipment expense 6,134 7,953 7,143
Total $11,199 $11,741 $12,375
</TABLE>
Note 7
Time Deposits
Domestic certificates of deposit of $100,000 or more amounted to
$648,692,000 and $662,217,000 at December 31, 1993, and 1992, respectively.
Interest on these certificates amounted to $23,480,000, $31,797,000 and
$82,864,000 in 1993, 1992 and 1991, respectively.
Foreign deposits, which are deposit liabilities of the Cayman Island
office of the Louisiana Bank, were $3,417,000 and $1,695,000 at December 31,
1993, and 1992, respectively. Interest expense on foreign deposits amounted
to $149,000, $71,000 and $3,854,000 for 1993, 1992 and 1991, respectively.
Note 8
Debt
<TABLE>
<CAPTION>
December 31
($ in thousands) 1993 1992
----- ------
<S> <C> <C>
Hibernia Corporation:
13% Hibernia Corporation notes,
due August 1995 $ - $2,020
Hibernia National Bank:
8% subordinated capital notes,
maturing in December 1997,
with required annual principal
payments of $360,000 - 6,040
Other - 209
Total $ - $8,269
</TABLE>
During 1993, the Company retired all notes, subordinated capital notes
and other debt. At December 31, 1993, no assets of the Company were pledged
to creditors.
Note 9
Other Assets and Other Liabilities
<TABLE>
<CAPTION>
December 31
($ in thousands) 1993 1992
------- -------
<S> <C> <C>
Other assets:
Accrued interest receivable $42,562 $37,349
Goodwill 39,170 43,200
Foreclosed assets 27,920 49,742
Deferred income taxes 22,031 11,443
Purchased mortgage servicing rights 4,270 7,416
Excess servicing receivable arising
from asset securitization 3,384 7,270
Other 36,633 31,087
Total other assets $175,970 $187,507
Other liabilities:
Accrued interest payable $12,747 $13,434
Reserve for future rental
payments under sale/leaseback 21,155 21,317
Trade accounts payable and
accrued liabilities 38,420 14,551
Other 8,193 5,565
Total other liabilities $80,515 $54,867
</TABLE>
Amortization relating to goodwill totaled $4,030,000, $4,788,000 and
$5,201,000 for the years ended December 31, 1993, 1992, and 1991,
respectively. Accumulated amortization at December 31, 1993, and 1992 totaled
$27,264,000 and $23,234,000, respectively.
Note 10
Per-Share Data
Income (loss) per common share data are based on the weighted average
number of shares outstanding of 83,175,129; 29,608,279; and 28,116,938 in
1993, 1992 and 1991, respectively. Primary and fully diluted per-share data
are not applicable to the Company because the computations are not dilutive.
Note 11
Employee Benefit Plans
The Company maintains a defined-contribution benefit plan under Section
401(k) of the Internal Revenue Code, the Retirement Security Plan (RSP).
Substantially all employees who have completed one year of service are
eligible to participate in the RSP. Under the RSP, employees contribute a
portion of their regular compensation, with the Company matching employee
contributions based upon tenure. Matching contributions are charged to
employee benefits expense. At December 31, 1993, the RSP owned 771,100 shares
of Class A Common Stock. The Company's contributions to the RSP totaled
$705,000 in 1993, $681,000 in 1992 and $2,216,000 in 1991.
In 1993 and 1992, the Company maintained incentive bonus programs for
key employees. Costs of the incentive bonus programs were $1,800,000 and
$1,750,000 for the years ended December 31, 1993, and 1992, respectively. No
bonuses were accrued or paid during 1991.
During 1993, the Company established a plan for grant of performance
share awards under its Long-Term Incentive Plan for certain members of
management. Under this plan, if the Company achieves certain predetermined
performance goals during the two-year period from January 1, 1993, through
December 31, 1994, the Company will award common stock to certain members of
management who contribute to the Company's achievement of predetermined
goals. A maximum of 381,000 shares may be awarded under this plan in 1995.
During the year ended December 31, 1993, $1,619,000 of compensation expense
was recorded relating to the performance share awards.
The Company sponsors a defined-benefit plan which provides certain
health care and life insurance benefits for employees who retired on or
before December 31, 1992. The plan is unfunded. Effective January 1, 1993,
the Company adopted SFAS No. 106, "Employers' Accounting for Postretirement
Benefits Other Than Pensions." The effect of prospectively adopting SFAS No.
106 increased net periodic postretirement cost and decreased net income by
$292,000.
In November 1992, the FASB issued SFAS No. 112, "Employers' Accounting
for Postemployment Benefits." SFAS No. 112 requires accrual-based accounting
for benefits cost relating to former or inactive employees after employment
but before retirement and becomes effective January 1, 1994. The effect of
adopting SFAS No. 112 is not expected to have a material impact.
The accumulated postretirement benefit obligation at January 1, 1993,
was $4,102,000. The components of net periodic postretirement benefit cost
for 1993 include $373,000 of transition obligation amortization and $327,000
of interest cost.
The discount rate used in determining the accumulated postretirement
benefit obligation was 8%. The annual assumed rate of increase in the cost of
covered benefits (the health care trend rate) is 11% and is assumed to
decrease gradually to 8% in 1996 and to remain constant thereafter.
Increasing the health care trend rate by one percentage point in each year
would increase the accumulated postretirement benefit obligation as of
January 1, 1993, by $279,000 and the aggregate of the amortization and
interest cost components of net periodic postretirement benefits by $22,000.
Note 12
Stock Options
The Company's stock option plans provide incentive and non-qualified
options to various key employees and non-employee directors to purchase
shares of Class A Common Stock at no less than the fair market value of the
stock at the date of grant. All options issued prior to 1992 became
exercisable six months from the date of grant. The remaining options granted
under the 1987 Stock Option Plan, the Long-Term Incentive Plan and the 1993
Directors' Stock Option Plan become exercisable in the following increments:
50% after the expiration of two years from the date of grant, an additional
25% three years from the date of grant and the remaining 25% four years from
the date of grant.
Options issued to employees and directors, other than the chief
executive officer, become immediately exercisable if the holder of the option
dies while the option is outstanding. Options granted under the 1987 Stock
Option Plan generally expire 10 years from the date granted. Options granted
under the Long-Term Incentive Plan and the 1993 Directors' Stock Option Plan
do not expire unless the holder dies, retires, becomes permanently disabled
or leaves the employ of the Company, at which time the options expire at
various times ranging from 30 to 180 days.
At December 31, 1993, shares available for grant under the 1987 Stock
Option Plan, the Long-Term Incentive Plan and the 1993 Directors' Stock
Option Plan amounted to 173,945; 1,918,970; and 925,000, respectively. The
1983 Stock Option Plan was terminated in November 1993, and there are no
options outstanding under this plan.
The table below summarizes the activity in the plans during 1993:
<TABLE>
<CAPTION>
Price Range
Incentive Non-qualified Per Share
--------- ------------- -----------
<S> <C> <C> <C>
1987 Stock Option Plan:
Outstanding,
December 31, 1992 176,828 752,379 $4.19 to $18.80
Granted 13,913 642,152 $7.19
Canceled - (4,196) $4.94
Exercised - (31,639) $4.94
Outstanding,
December 31, 1993 190,741 1,358,696 $4.19 to $18.80
Exercisable,
December 31, 1993 15,188 401,583 $4.94 to $18.80
Long-Term Incentive Plan:
Outstanding,
December 31, 1992 - -
Granted - 963,000 $5.94 to $7.75
Canceled - (58,000) $7.13 to $7.63
Outstanding,
December 31, 1993 - 905,000 $5.94 to $7.75
Exercisable,
December 31, 1993 - -
1993 Directors' Stock Option Plan:
Outstanding,
December 31, 1992 - -
Granted - 75,000 $7.31
Outstanding,
December 31, 1993 - 75,000 $7.31
Exercisable,
December 31, 1993 - -
</TABLE>
Note 13
Income Taxes
As discussed in Note 1, the Company adopted SFAS No. 109 effective
January 1, 1993. As permitted by SFAS No. 109, prior-year financial
statements were not restated. Due to limitations related to the valuation of
deferred tax assets under SFAS No. 109, there was no cumulative effect
adjustment at adoption.
Income tax expense includes amounts currently payable and amounts
deferred to or from other years as a result of differences in the timing of
recognition of income and expense for financial reporting and federal tax
purposes. The components of income tax expense are as follows:
<TABLE>
<CAPTION>
Year Ended December 31
($ in thousands) 1993 1992 1991
------- ------ -------
<S> <C> <C> <C>
Current tax expense:
Federal income tax $11,073 $702 $0
State income tax 1,696 848 183
Total current tax expense 12,769 1,550 183
Deferred tax expense (benefit):
Federal income tax 2,434 (702) 782
Change in deferred tax valuation reserve (13,507) - -
Total deferred tax expense (benefit) (11,073) (702) 782
Shareholders' Equity:
Cumulative effect of change in accounting
for securities available for sale 3,588 - -
Change in deferred tax valuation reserve (3,588) - -
Total shareholders' equity - - -
Income tax expense $1,696 $848 $965
</TABLE>
The reconciliation of the federal statutory income tax rate to the Company's
effective rate can be found in the table below.
<TABLE>
<CAPTION>
Year Ended December 31
($ in thousands) 1993 1992 1991
Amount Rate Amount Rate Amount Rate
----------------- ----------------- -----------------
<S> <C> <C> <C> <C> <C> <C>
Tax expense (benefit) based on federal statutory rate $17,376 35.0 % ($2,402) (34.0)% ($48,631) (34.0)%
Tax-exempt interest (2,573) (5.2) (3,508) (49.7) (6,695) (4.7)
Goodwill 1,365 2.7 991 14.0 (3,025) (2.1)
Sale of Texas Bank - - 2,182 30.9 4,420 3.1
State income tax, net of federal benefit 1,103 2.2 559 7.9 120 0.1
Limitation on recognition of tax benefit - - 2,527 35.8 54,407 38.0
Change in deferred tax valuation reserve (13,507) (27.2) - - - -
Change in tax rate on existing temporary differences (2,109) (4.2) - - - -
Other 41 0.1 499 7.1 369 0.3
Income tax expense $1,696 3.4 % $848 12.0 % $965 0.7 %
</TABLE>
During 1993, deferred income taxes were based on differences between the
basis of assets and liabilities for financial statement purposes and tax
reporting purposes and available tax credit carryforwards. During 1992 and
1991, deferred income taxes were provided on those items that were taxable or
deductible in different periods for financial statement and federal income
tax purposes. The tax effects of the cumulative temporary differences and tax
credit carryforwards which create deferred tax assets and liabilities at
December 31, 1993, are detailed below:
<TABLE>
<CAPTION>
December 31
($ in thousands) 1993
-----------
<S> <C>
Deferred tax assets:
Reserve for possible loan losses $55,700
Sale / leaseback 6,258
Foreclosed assets 4,671
Loan fees 2,462
Other 11,122
Alternative minimum tax credit carryforward 17,450
Total deferred tax assets 97,663
Deferred tax liabilities:
Discounts on securities 388
Unrealized gain on securities
available for sale 3,588
Depreciation 1,398
Purchase accounting adjustments, net 2,619
Other 3,726
Total deferred tax liabilities 11,719
Deferred tax assets net of
deferred tax liabilities 85,944
Deferred tax valuation reserve (63,913)
Total net deferred tax asset $22,031
</TABLE>
Management currently estimates realizability of the net deferred tax
asset based on the Company's ability to, first, recover taxes previously paid
and, second, generate taxable income over the next 12 months. A deferred tax
valuation reserve is established to limit the net deferred tax asset to its
realizable value.
The tax effects of significant items giving rise to deferred tax expense
(benefit) in 1992 and 1991 are detailed below:
<TABLE>
<CAPTION>
Year Ended December 31
($ in thousands) 1992 1991
------- ---------
<S> <C> <C>
Provision for possible loan losses $2,635 ($18,978)
Discounts on securities (137) (319)
Foreclosed assets 750 (3,030)
Loan fees 550 334
Depreciation (739) (395)
Sale of auto loans (3,638) 562
Alternative minimum tax credits (575) -
Other 452 (3,511)
Limitation on recognition of tax benefit - 26,119
Deferred tax expense (benefit) ($702) $782
</TABLE>
For federal income tax purposes, the Company has $17,450,000 in
alternative minimum tax credit carryforwards at December 31, 1993, which do
not expire.
During the years ended December 31, 1993, 1992 and 1991, the Company
made federal income tax payments of $9,550,000, $1,850,000 and $917,000,
respectively. In 1992, the Company received a federal income tax refund of
$18,092,000 resulting from the carryback of its 1991 net operating loss.
The 1992 debt restructuring between the Company and bank group discussed
in Note 17 gave rise to "testing dates" under Section 382 of the Internal
Revenue Code to determine if a change in ownership of the Company had
occurred. Generally, a change in ownership occurs when the percentage of
stock owned by one or more five-percent shareholders, as defined, has
increased by more than 50 percentage points over a three-year period. When a
change of this type occurs, a limitation is imposed on pre-change "built-in"
losses, as defined, and tax credit carryforwards. Due to the assumed issuance
of stock in connection with proposed mergers and dependent upon resolution of
proposed tax regulations related to stock issuances, for purposes of Section
382, a change in ownership of the Company either occurred during late 1993 or
will occur in early 1994. Based on current estimates, the Company has no
prechange "built-in" losses, and its ability to utilize tax credit
carryforwards will not be significantly affected.
Note 14
Leases
The Company leases its headquarters, operations center and certain other
bank premises and equipment under non-cancelable operating leases which
expire at various dates through 2013. Certain of the leases have escalation
clauses and renewal options ranging from one to 30 years.
Total rental expense (none of which represents contingent rentals)
included in occupancy and equipment expense was $10,428,000, $12,179,000 and
$14,817,000 in 1993, 1992 and 1991, respectively.
The future minimum rental commitments at December 31, 1993, for all
long-term operating leases are as follows: 1994 - $8,877,000; 1995 -
$8,683,000; 1996 - $8,004,000; 1997 - $7,717,000; 1998 - $7,477,000; and
thereafter - $64,812,000.
On January 1, 1991, the Company changed its method of accounting for
lease expense related to the 1983 sale/leaseback of the Company's
headquarters and operations buildings. Under the alternative method adopted
in 1991, the Company recognizes lease expense on the straight-line basis over
the terms of the 25-year leases, rather than in accordance with the
contractual lease payments. The cumulative effect adjustment resulting from
the change in method included in the results of operations for 1991 amounted
to $21.6 million. The change had no material effect on the results of
operations (before the cumulative effect adjustment) for 1991. There was no
income tax benefit recognized related to the cumulative effect adjustment.
Note 15
Other Operating Expense
<TABLE>
<CAPTION>
($ in thousands)
Year ended December 31 1993 1992 1991
------- ------- -------
<S> <C> <C> <C>
Deposit insurance and examination fees $12,050 $11,389 $14,178
Postage 3,599 4,159 6,491
Stationery and supplies 3,498 3,537 4,364
Professional 7,465 11,530 14,020
Amortization of intangibles 7,362 9,171 9,207
State taxes on equity 2,356 1,872 4,614
Loan collection expense 3,876 5,931 8,310
Advertising and promotion expenses 5,029 2,277 2,767
Valuation allowance on Texas Bank - - 13,000
Other 28,540 18,002 36,681
Total other operating expense $73,775 $67,868 $113,632
</TABLE>
Note 16
Proposed Mergers
The Company is a party to merger agreements with four Louisiana
financial institutions which, as of December 31, 1993, are pending regulatory
and shareholder approval. All of these transactions are expected to be
consummated during 1994 and will be accounted for as poolings of interests.
The summary below contains information regarding institutions with which the
Company has entered into definitive merger agreements.
The consideration shown will be exchanged for the voting securities and
non-voting convertible securities of the institutions. Additionally, certain
debt and other liabilities of the institutions totaling approximately
$36,500,000 are expected to be retired.
<TABLE>
<CAPTION>
($ in thousands) September 30, 1993 Estimated Consideration
------------------- -----------------------
Number Hibernia Value of
of Total Shares to Shares to
Institution Offices Assets Be Issued * Be Issued *
- - -------------------------------- -------- -------- ----------- -----------
<S> <C> <C> <C> <C>
Commercial Bancshares, Inc. 8 $163,299 2,493,000 $18,700
Bastrop National Bank 4 123,484 2,867,000 21,500
First Bancorp of Louisiana, Inc. 7 224,871 4,800,000 36,000
First Continental Bancshares, Inc. 8 395,671 4,493,000 33,697
Total 27 $907,325 14,653,000 $109,897
* Estimated per share market value of $7.50.
</TABLE>
Note 17
Recapitalization
During 1992, the Company increased shareholders' equity by $177.8
million through the restructuring of $99.1 million in debt and a shareholder
rights offering.
Debt Restructuring
On September 28, 1992, the Company completed the restructuring of its
$99.1 million debt to a group of seven banks. As reflected in the table below,
the existing debt was extinguished through the issuance
of securities and resulted in a non-cash extraordinary loss for the fair
value of the securities issued in excess of the carrying value of the debt
restructured.
<TABLE>
COMPUTATION OF EXTRAORDINARY LOSS
<CAPTION>
($ in thousands)
<S> <C>
Securities issued:
21,818,182 shares of non-cumulative
convertible preferred stock valued at
$5.125 per share, which was the quoted
market price of Hibernia Corporation
common stock on September 28,1992 $111,818
1,812,000 common stock purchase warrants
valued at $2.375 per share, which is the
spread between the $5.125 quoted market
price of Hibernia Corporation common
stock on September 28, 1992, and the
$2.75 contractual exercise price 4,304
Senior debt, secured by all assets of the Company 26,625
Subordinated debt 12,500
Total fair value of securities issued 155,247
Less: debt restructured 99,125
Extraordinary loss (non-cash) on debt restructuring $56,122
</TABLE>
The Company recorded the preferred stock at its $60 million liquidation
preference and recorded as surplus the value of the preferred stock in excess
of the liquidation preference, together with the value of the warrants
issued, net of costs of issuance of $1.3 million. Subsequent to the
completion of the rights offering and pursuant to antidilution provisions of
the preferred stock, the bank group converted an aggregate of 21,818,182
shares of preferred stock to 22,091,443 shares of common stock.
Under antidilution provisions of the senior and subordinated debt
agreements, each bank was issued rights to purchase additional shares of
common stock, the number to be determined by the number of shares issued in a
rights offering to shareholders. The agreements provided that, if all shares
available in the rights offering were purchased, the banks would have the
right to purchase an aggregate of approximately 16.5 million shares. The
rights offering was fully subscribed, and the banks elected to purchase an
aggregate of 10.3 million shares through the conversion of debt and related
accrued interest, and certain of the banks purchased for cash an additional
1.9 million shares.
During 1993, certain warrants issued in the restructuring were
exercised, resulting in the issuance of approximately 1,151,000 shares of
common stock. The number of shares subject to warrants outstanding and
exercisable at December 31, 1993, was approximately 661,000. The warrants
expire in September 1999.
Rights Offering
On November 12, 1992, the Company commenced an offering to shareholders
of record on that date to purchase 19.8 million shares of common stock at a
subscription price of $4.00 per share. The closing market price of the
Company's common stock on November 11, 1992, was $5.00 per share. The
offering was fully subscribed, and the Company issued 19.8 million shares of
common stock. As previously described, certain debtholders elected to
participate in the rights offering and purchased an additional 1.9 million
shares of common stock at $4.00 per share. The Company received net proceeds
from the rights offering of $79.2 million.
Note 18
Sale of the Texas Bank
On December 31, 1992, the Company sold the stock of the Texas Bank to
Comerica Incorporated. The Company received net proceeds of $56.2 million,
which is the purchase price of $58.0 million reduced by the dividend paid by
the Texas Bank to the Parent Company in the third quarter of 1992. The
Company recorded a loss of $2.9 million in the third quarter of 1992 in order
to reduce the Parent Company's investment in the Texas Bank to its net
realizable value.
At June 30, 1992, the carrying values of the assets and liabilities of
the Texas Bank were $910.2 million and $848.2 million, respectively. The
revenues and expenses of the Texas Bank (before eliminations) shown in the
table below are included in the Consolidated Statements of Income on a fully
consolidated basis for 1991 and the first six months of 1992.
<TABLE>
CONDENSED STATEMENTS OF INCOME
HIBERNIA NATIONAL BANK IN TEXAS
<CAPTION>
Six Months Year Ended
Ended June 30 December 31
($ in thousands) 1992 1991
------------- -----------
<S> <C> <C>
Interest income $36,132 $94,676
Interest expense 15,974 55,377
Net interest income
before provision 20,158 39,299
Provision for possible loan losses 3,125 7,280
Net interest income 17,033 32,019
Noninterest income 5,316 17,730
Noninterest expense 19,939 46,647
Income before income taxes 2,410 3,102
Income tax expense 1,009 864
Net income $1,401 $2,238
</TABLE>
NOTE 19
<TABLE>
HIBERNIA CORPORATION
(PARENT COMPANY ONLY)
BALANCE SHEETS
<CAPTION>
($ in thousands) December 31
1993 1992
-------- --------
<S> <C> <C>
Investment in bank subsidiary $378,380 $309,985
Other assets 60,579 67,039
Total assets $438,959 $377,024
Current liabilities $10,587 $5,876
Debt - 2,020
Shareholders' equity 428,372 369,128
Total liabilities and
shareholders' equity $438,959 $377,024
</TABLE>
<TABLE>
HIBERNIA CORPORATION
(PARENT COMPANY ONLY)
STATEMENTS OF INCOME
<CAPTION>
($ in thousands) Year Ended December 31
1993 1992 1991
------- ------ ---------
<S> <C> <C> <C>
Equity in undistributed income
(loss) of subsidiary $58,143 $7,067 ($147,919)
Dividends from subsidiary - 3,338 8,900
Other income 1,915 (3,839) 63
Total income 60,058 6,566 (138,956)
Interest expense 65 10,902 11,597
Other expense 11,391 4,578 15,105
Total expense 11,456 15,480 26,702
Income (loss)
before taxes and
extraordinary item 48,602 (8,914) (165,658)
Income tax expense (benefit) 652 (999) (18)
Income (loss)
before extraordinary
item 47,950 (7,915) (165,640)
Extraordinary loss
on debt restructuring - (56,122) -
Net income (loss) $47,950 ($64,037) ($165,640)
</TABLE>
<TABLE>
HIBERNIA CORPORATION
(PARENT COMAPNY ONLY)
STATEMENTS OF CASH FLOWS
<CAPTION>
($ in thousands)
Year Ended December 31
1993 1992 1991
------- ------- --------
<S> <C> <C> <C>
Operating Activities
Net income (loss) $47,950 ($64,037)($165,640)
Non-cash adjustment for equity
in subsidiary's undistributed
net (income) loss (58,143) (7,067) 147,919
Extraordinary loss on
debt restructuring - 56,122 -
Other adjustments 4,698 17,355 27,933
Net cash provided (used) by
operating activities (5,495) 2,373 10,212
Investing Activities
Investment in subsidiary - (75,000) (6,217)
Sale of Texas Bank - 56,225 -
Net cash used by
investing activities - (18,775) (6,217)
Financing Activities
Issuance of debt - - 852
Payments of debt (2,020) (237) (10,000)
Dividends paid (2,508) - (4,181)
Issuance of Common Stock 3,550 79,332 2,424
Net cash provided (used)
by financing activities (978) 79,095 (10,905)
Increase (decrease) in cash (6,473) 62,693 (6,910)
Cash at beginning of year 62,790 97 7,007
Cash at end of year $56,317 $62,790 $97
</TABLE>
Note 20
Other Financial Instruments
The Company issues financial instruments with off-balance-sheet risk in
the normal course of business to meet the financing needs of its customers
and to reduce exposure to fluctuations in interest rates. These financial
instruments include commitments to extend credit, letters of credit and
standby letters of credit and involve, to varying degrees, elements of credit
and interest rate risk in excess of the amount recognized in the balance
sheet.
Commitments to extend credit are legally binding, conditional agreements
generally having fixed expiration or termination dates and specified interest
rates and purposes. These commitments generally require customers to maintain
certain credit standards. Collateral requirements and loan-to-value ratios
are the same as those for funded transactions and are established based on
management's credit assessment of the customer. Commitments may expire
without being drawn upon. Therefore, the total commitment amount does not
necessarily represent future requirements.
The Company issues letters of credit and financial guarantees whereby it
agrees to honor certain financial commitments in the event its customers are
unable to perform. The majority of the standby letters of credit consist of
performance guarantees. Management conducts regular reviews of all
outstanding standby letters of credit, and the results of these reviews are
considered in assessing the adequacy of the Company's reserve for possible
loan losses.
<TABLE>
<CAPTION>
December 31
($ in thousands) 1993 1992
------- -------
<S> <C> <C>
Commitments to
extend credit $531,692 $429,766
Letters of credit
and financial guarantees $101,342 $128,481
</TABLE>
Management does not anticipate any material losses as a result of these
instruments.
As of December 31, 1993, and 1992, the Company was a guarantor
of an interest rate swap agreement, which matures in 1995, with a notional
amount of $74 million. The agreement was executed by one of the Company's
customers, and the Company is exposed to loss should its customer default.
The Company's exposure to loss is limited to the difference between the
interest payments the customer is obligated to pay and those it is entitled
to receive. The Company attempts to minimize this risk by performing normal
credit reviews on its customer.
Significant loan concentrations are disclosed in Note 4.
Note 21
Fair Value of Financial Instruments
SFAS No. 107, "Disclosures About Fair Value of Financial Instruments,"
requires disclosure of fair value information about financial instruments for
which it is practicable to estimate fair value, whether or not the financial
instruments are recognized in the financial statements. When quoted market
prices are not available, fair values are based on estimates using present
value or other valuation techniques. Those techniques are significantly
affected by the assumptions used, including the discount rate and estimates
of future cash flows. The derived fair value estimates cannot be
substantiated through comparison to independent markets and, in many cases,
could not be realized in immediate settlement of the instrument. SFAS No. 107
excludes certain financial instruments and all non-financial instruments from
its disclosure requirements. Further, the disclosures do not include
estimated fair values for items which are not financial instruments but which
represent significant value to the Company - among them, core deposit
intangibles, loan servicing rights, trust operations and other fee-generating
businesses. Accordingly, the aggregate fair value amounts presented do not
represent the underlying value of the Company.
The carrying amount of cash and short-term investments, demand deposits
and short-term borrowings approximates the estimated fair value of these
financial instruments. The estimated fair value of securities, interest rate
swaps and other off-balance-sheet instruments is based on quoted market
prices, dealer quotes and prices obtained from independent pricing services.
The estimated fair value of loans and interest-bearing deposits is based on
present values using applicable risk-adjusted spreads to the LIBOR yield
curve to approximate current interest rates applicable to each category of
these financial instruments.
Interest rates were not adjusted for changes in credit of performing
commercial loans for which there are no known credit concerns. Management
segregates loans in appropriate risk categories and believes the risk factor
embedded in the interest rates results in a fair valuation of these loans on
an entry-value basis.
Variances between the carrying amount and the estimated fair value of
loans reflect both credit risk and interest rate risk. Changes in credit risk
gave rise to carrying amounts in excess of fair values which is more than
offset by the reserve for possible loan losses of $159.1 million. However,
the current low interest rate environment gave rise to fair values in excess
of carrying amounts.
The fair value estimates presented are based on information available to
management as of December 31, 1993. Although management is not aware of any
factors that would significantly affect the estimated fair value amounts,
these amounts have not been revalued for purposes of these financial
statements since that date, and, therefore, current estimates of fair value
may differ significantly from the amounts presented.
<TABLE>
<CAPTION>
December 31, 1993
Estimated
Carrying Fair
($ in thousands) Amount Value
---------- ---------
<S> <C> <C>
Assets
Cash and short-term investments $436,675 $436,675
Securities available for sale 394,640 394,640
Securities held to maturity 1,526,231 1,551,832
Commercial loans 1,473,269 1,485,153
Consumer loans 854,850 860,699
Liabilities
Demand deposits 812,693 812,693
Interest-bearing deposits 3,273,342 3,257,225
Federal funds purchased and securities sold
under agreements to repurchase 137,986 137,986
Off-balance-sheet financial instruments
Interest rate swaps - 1,408
Commitments and letters of credit - (5,770)
</TABLE>
Note 22
Regulatory Matters and Dividend Restrictions
In July 1991, the Louisiana Bank entered into a consent order with the
Office of the Comptroller of the Currency (OCC). Under the consent order, the
Louisiana Bank agreed to develop three-year capital, strategic, profit and
liquidity plans; to review and revise certain policies; and to correct
specific matters deemed by the OCC to be violations of law. In June 1993,
this consent order was terminated by the OCC.
In December 1991, the Parent Company entered into an agreement with the
Federal Reserve Bank of Atlanta (FRB), pursuant to which the Parent Company
agreed, among other things, to develop capital, strategic and liquidity plans
and to obtain approval from the FRB prior to declaring or paying any
dividends on its capital stock, increasing its indebtedness or selling
certain assets. These regulatory controls were terminated by the FRB in
November 1993.
Under current FRB regulations, the Louisiana Bank may lend the Parent
Company up to 10% of the Louisiana Bank's capital and surplus. Based on this
limitation, approximately $26,086,000 was available for loans to the Parent
Company at December 31, 1993.
The payment of dividends by the Louisiana Bank to the Parent Company is
restricted by various regulatory and statutory limitations. In 1994, the
Louisiana Bank will have available to pay dividends to the Parent Company,
without approval of the OCC, approximately $84,878,000, plus net retained
profits earned in 1994 prior to the dividend declaration date.
Banks are required to maintain noninterest-bearing balances with the FRB
to meet reserve requirements. Average reserve balances were $38,370,000 in
1993 and $44,343,000 in 1992.
Note 23
Contingencies
The Company is a party to certain pending legal proceedings arising from
matters incidental to its business.
In addition, the Company is a named defendant in a shareholder
class-action suit which alleges that, during the period March 19, 1990, to
July 30, 1991, the market value of the Company's common stock was
artificially inflated due to false and misleading news releases and public
statements and the failure to disclose material facts. This suit is in the
discovery stage. The Company intends to contest the suit vigorously.
The Company has established reserves for potential litigation losses of
approximately $11,500,000 at December 31, 1993. In the opinion of management
and counsel, the aggregated unreserved liability or loss, if any, of legal
proceedings will not have a significant effect on the consolidated financial
condition of the Company.
<PAGE>
EXHIBIT 23
CONSENT OF INDEPENDENT AUDITORS
Consent of Independent Auditors
We consent to the incorporation by reference in this Annual Report
(Form 10-K) of Hibernia Corporation of our report dated January 11,
1994, included in the 1993 Annual Report to Shareholders of
Hibernia Corporation.
We also consent to the incorporation by reference in Registration
Statement Number 33-26553 on Form S-3 dated February 21, 1989; in
Post-Effective Amendment Number 1 to Registration Statement Number
2-81353 on Form S-8 dated February 23, 1989; in Post-Effective
Amendment Number 1 to Registration Statement Number 33-26871 on
Form S-8 dated February 23, 1989; in Post-Effective Amendment
Number 1 to Registration Statement 33-37701 on Form S-3 dated
January 31, 1991; in Post-Effective Amendment Number 3 to
Registration Statement Number 2-96194 on Form S-8 dated April 8,
1991; in Registration Statement Number 33-53108 on Form S-3 dated
December 28, 1992; and in Registration Statement Number 33-55844 on
Form S-3 dated December 28, 1992, of our report dated January 11,
1994, with respect to the consolidated financial statements of
Hibernia Corporation incorporated by reference in this Annual
Report (Form 10-K) for the year ended December 31, 1993.
/s/ Ernst & Young
New Orleans, Louisiana
March 29, 1994
<PAGE>
EXHIBIT 24
POWERS OF ATTORNEY
P0WER OF ATTORNEY
KNOW ALL MEN BY THESE PRESENTS, that the undersigned director of
Hibernia Corporation, a Louisiana corporation (the "Corporation"), does
hereby name, constitute and appoint Robert H. Boh, Patricia C. Meringer, Gary
L. Ryan, and each of them (with full power to each of them to act alone), his
true and lawful agents and attorneys-in-fact, for him and on his behalf and
in his name, place and stead, in any and all capacities, to sign, execute,
acknowledge, deliver, and file with the Securities and Exchange Commission
(or any other governmental or regulatory authority), the Annual Report of the
Corporation on Form 10-K (or other appropriate form) for the fiscal year
ended December 31, 1993, and any and all amendments thereto, with any and all
exhibits and any and all other documents required to be filed with respect
thereto or in connection therewith, granting unto said agents and attorneys,
and each of them, full power and authority to do and perform each and every
act and thing requisite and necessary to be done in and about the premises in
order to effectuate the same as fully to all intents and purposes as the
undersigned might or could do if personally present, and the undersigned
hereby ratifies and confirms all that said agents and attorneys-in-fact, or
any of them may lawfully do or cause to be done by virtue hereof.
IN WITNESS WHEREOF, the undersigned has hereunto set his hand on this
14th day of December, 1993.
/S/ W. JAMES AMOSS, JR.
W. James Amoss, Jr.
Director
HIBERNIA CORPORATION
<PAGE>
P0WER OF ATTORNEY
KNOW ALL MEN BY THESE PRESENTS, that the undersigned Chairman and
director of Hibernia Corporation, a Louisiana corporation (the
"Corporation"), does hereby name, constitute and appoint Patricia C. Meringer
and Gary L. Ryan, and each of them (with full power to each of them to act
alone), his true and lawful agents and attorneys-in-fact, for him and on his
behalf and in his name, place and stead, in any and all capacities, to sign,
execute, acknowledge, deliver, and file with the Securities and Exchange
Commission (or any other governmental or regulatory authority), the Annual
Report of the Corporation on Form 10-K (or other appropriate form) for the
fiscal year ended December 31, 1993, and any and all amendments thereto, with
any and all exhibits and any and all other documents required to be filed
with respect thereto or in connection therewith, granting unto said agents
and attorneys, and each of them, full power and authority to do and perform
each and every act and thing requisite and necessary to be done in and about
the premises in order to effectuate the same as fully to all intents and
purposes as the undersigned might or could do if personally present, and the
undersigned hereby ratifies and confirms all that said agents and attorneys-
in-fact, or any of them may lawfully do or cause to be done by virtue hereof.
IN WITNESS WHEREOF, the undersigned has hereunto set his hand on this
14th day of December, 1993.
/S/ROBERT H. BOH
Robert H. Boh
Chairman and Director
HIBERNIA CORPORATION
<PAGE>
P0WER OF ATTORNEY
KNOW ALL MEN BY THESE PRESENTS, that the undersigned director of
Hibernia Corporation, a Louisiana corporation (the "Corporation"), does
hereby name, constitute and appoint Robert H. Boh, Patricia C. Meringer, Gary
L. Ryan, and each of them (with full power to each of them to act alone), his
true and lawful agents and attorneys-in-fact, for him and on his behalf and
in his name, place and stead, in any and all capacities, to sign, execute,
acknowledge, deliver, and file with the Securities and Exchange Commission
(or any other governmental or regulatory authority), the Annual Report of the
Corporation on Form 10-K (or other appropriate form) for the fiscal year
ended December 31, 1993, and any and all amendments thereto, with any and all
exhibits and any and all other documents required to be filed with respect
thereto or in connection therewith, granting unto said agents and attorneys,
and each of them, full power and authority to do and perform each and every
act and thing requisite and necessary to be done in and about the premises in
order to effectuate the same as fully to all intents and purposes as the
undersigned might or could do if personally present, and the undersigned
hereby ratifies and confirms all that said agents and attorneys-in-fact, or
any of them may lawfully do or cause to be done by virtue hereof.
IN WITNESS WHEREOF, the undersigned has hereunto set his hand on this
14th day of December, 1993.
/S/ J. TERRELL BROWN
J. Terrell Brown
Director
HIBERNIA CORPORATION
<PAGE>
P0WER OF ATTORNEY
KNOW ALL MEN BY THESE PRESENTS, that the undersigned director of
Hibernia Corporation, a Louisiana corporation (the "Corporation"), does
hereby name, constitute and appoint Robert H. Boh, Patricia C. Meringer, Gary
L. Ryan, and each of them (with full power to each of them to act alone), his
true and lawful agents and attorneys-in-fact, for him and on his behalf and
in his name, place and stead, in any and all capacities, to sign, execute,
acknowledge, deliver, and file with the Securities and Exchange Commission
(or any other governmental or regulatory authority), the Annual Report of the
Corporation on Form 10-K (or other appropriate form) for the fiscal year
ended December 31, 1993, and any and all amendments thereto, with any and all
exhibits and any and all other documents required to be filed with respect
thereto or in connection therewith, granting unto said agents and attorneys,
and each of them, full power and authority to do and perform each and every
act and thing requisite and necessary to be done in and about the premises in
order to effectuate the same as fully to all intents and purposes as the
undersigned might or could do if personally present, and the undersigned
hereby ratifies and confirms all that said agents and attorneys-in-fact, or
any of them may lawfully do or cause to be done by virtue hereof.
IN WITNESS WHEREOF, the undersigned has hereunto set his hand on this
14th day of December, 1993.
/S/BROOKE H. DUNCAN
Brooke H. Duncan
Director
HIBERNIA CORPORATION
<PAGE>
P0WER OF ATTORNEY
KNOW ALL MEN BY THESE PRESENTS, that the undersigned director of
Hibernia Corporation, a Louisiana corporation (the "Corporation"), does
hereby name, constitute and appoint Robert H. Boh, Patricia C. Meringer, Gary
L. Ryan, and each of them (with full power to each of them to act alone), his
true and lawful agents and attorneys-in-fact, for him and on his behalf and
in his name, place and stead, in any and all capacities, to sign, execute,
acknowledge, deliver, and file with the Securities and Exchange Commission
(or any other governmental or regulatory authority), the Annual Report of the
Corporation on Form 10-K (or other appropriate form) for the fiscal year
ended December 31, 1993, and any and all amendments thereto, with any and all
exhibits and any and all other documents required to be filed with respect
thereto or in connection therewith, granting unto said agents and attorneys,
and each of them, full power and authority to do and perform each and every
act and thing requisite and necessary to be done in and about the premises in
order to effectuate the same as fully to all intents and purposes as the
undersigned might or could do if personally present, and the undersigned
hereby ratifies and confirms all that said agents and attorneys-in-fact, or
any of them may lawfully do or cause to be done by virtue hereof.
IN WITNESS WHEREOF, the undersigned has hereunto set his hand on this
14th day of December, 1993.
/S/RICHARD W. FREEMAN, JR.
Richard W. Freeman, Jr.
Director
HIBERNIA CORPORATION
<PAGE>
P0WER OF ATTORNEY
KNOW ALL MEN BY THESE PRESENTS, that the undersigned director of
Hibernia Corporation, a Louisiana corporation (the "Corporation"), does
hereby name, constitute and appoint Robert H. Boh, Patricia C. Meringer, Gary
L. Ryan, and each of them (with full power to each of them to act alone), his
true and lawful agents and attorneys-in-fact, for him and on his behalf and
in his name, place and stead, in any and all capacities, to sign, execute,
acknowledge, deliver, and file with the Securities and Exchange Commission
(or any other governmental or regulatory authority), the Annual Report of the
Corporation on Form 10-K (or other appropriate form) for the fiscal year
ended December 31, 1993, and any and all amendments thereto, with any and all
exhibits and any and all other documents required to be filed with respect
thereto or in connection therewith, granting unto said agents and attorneys,
and each of them, full power and authority to do and perform each and every
act and thing requisite and necessary to be done in and about the premises in
order to effectuate the same as fully to all intents and purposes as the
undersigned might or could do if personally present, and the undersigned
hereby ratifies and confirms all that said agents and attorneys-in-fact, or
any of them may lawfully do or cause to be done by virtue hereof.
IN WITNESS WHEREOF, the undersigned has hereunto set his hand on this
14th day of December, 1993.
/S/ROBERT L. GOODWIN
Robert L. Goodwin
Director
HIBERNIA CORPORATION
<PAGE>
P0WER OF ATTORNEY
KNOW ALL MEN BY THESE PRESENTS, that the undersigned President, Chief
Executive Officer and director of Hibernia Corporation, a Louisiana
corporation (the "Corporation"), does hereby name, constitute and appoint
Robert H. Boh, Patricia C. Meringer, Gary L. Ryan, and each of them (with
full power to each of them to act alone), his true and lawful agents and
attorneys-in-fact, for him and on his behalf and in his name, place and
stead, in any and all capacities, to sign, execute, acknowledge, deliver, and
file with the Securities and Exchange Commission (or any other governmental
or regulatory authority), the Annual Report of the Corporation on Form 10-K
(or other appropriate form) for the fiscal year ended December 31, 1993, and
any and all amendments thereto, with any and all exhibits and any and all
other documents required to be filed with respect thereto or in connection
therewith, granting unto said agents and attorneys, and each of them, full
power and authority to do and perform each and every act and thing requisite
and necessary to be done in and about the premises in order to effectuate the
same as fully to all intents and purposes as the undersigned might or could
do if personally present, and the undersigned hereby ratifies and confirms
all that said agents and attorneys-in-fact, or any of them may lawfully do or
cause to be done by virtue hereof.
IN WITNESS WHEREOF, the undersigned has hereunto set his hand on this
14th day of December, 1993.
/S/STEPHEN A. HANSEL
Stephen A. Hansel
President, Chief Executive Officer
and Director
HIBERNIA CORPORATION
<PAGE>
P0WER OF ATTORNEY
KNOW ALL MEN BY THESE PRESENTS, that the undersigned director of
Hibernia Corporation, a Louisiana corporation (the "Corporation"), does
hereby name, constitute and appoint Robert H. Boh, Patricia C. Meringer, Gary
L. Ryan, and each of them (with full power to each of them to act alone), his
true and lawful agents and attorneys-in-fact, for him and on his behalf and
in his name, place and stead, in any and all capacities, to sign, execute,
acknowledge, deliver, and file with the Securities and Exchange Commission
(or any other governmental or regulatory authority), the Annual Report of the
Corporation on Form 10-K (or other appropriate form) for the fiscal year
ended December 31, 1993, and any and all amendments thereto, with any and all
exhibits and any and all other documents required to be filed with respect
thereto or in connection therewith, granting unto said agents and attorneys,
and each of them, full power and authority to do and perform each and every
act and thing requisite and necessary to be done in and about the premises in
order to effectuate the same as fully to all intents and purposes as the
undersigned might or could do if personally present, and the undersigned
hereby ratifies and confirms all that said agents and attorneys-in-fact, or
any of them may lawfully do or cause to be done by virtue hereof.
IN WITNESS WHEREOF, the undersigned has hereunto set his hand on this
14th day of December, 1993.
/S/DICK H. HEARIN
Dick H. Hearin
Director
HIBERNIA CORPORATION
<PAGE>
P0WER OF ATTORNEY
KNOW ALL MEN BY THESE PRESENTS, that the undersigned director of
Hibernia Corporation, a Louisiana corporation (the "Corporation"), does
hereby name, constitute and appoint Robert H. Boh, Patricia C. Meringer, Gary
L. Ryan, and each of them (with full power to each of them to act alone), his
true and lawful agents and attorneys-in-fact, for him and on his behalf and
in his name, place and stead, in any and all capacities, to sign, execute,
acknowledge, deliver, and file with the Securities and Exchange Commission
(or any other governmental or regulatory authority), the Annual Report of the
Corporation on Form 10-K (or other appropriate form) for the fiscal year
ended December 31, 1993, and any and all amendments thereto, with any and all
exhibits and any and all other documents required to be filed with respect
thereto or in connection therewith, granting unto said agents and attorneys,
and each of them, full power and authority to do and perform each and every
act and thing requisite and necessary to be done in and about the premises in
order to effectuate the same as fully to all intents and purposes as the
undersigned might or could do if personally present, and the undersigned
hereby ratifies and confirms all that said agents and attorneys-in-fact, or
any of them may lawfully do or cause to be done by virtue hereof.
IN WITNESS WHEREOF, the undersigned has hereunto set his hand on this
14th day of December, 1993.
/S/ROBERT T. HOLLEMAN
Robert T. Holleman
Director
HIBERNIA CORPORATION
<PAGE>
P0WER OF ATTORNEY
KNOW ALL MEN BY THESE PRESENTS, that the undersigned director of
Hibernia Corporation, a Louisiana corporation (the "Corporation"), does
hereby name, constitute and appoint Robert H. Boh, Patricia C. Meringer, Gary
L. Ryan, and each of them (with full power to each of them to act alone), his
true and lawful agents and attorneys-in-fact, for him and on his behalf and
in his name, place and stead, in any and all capacities, to sign, execute,
acknowledge, deliver, and file with the Securities and Exchange Commission
(or any other governmental or regulatory authority), the Annual Report of the
Corporation on Form 10-K (or other appropriate form) for the fiscal year
ended December 31, 1993, and any and all amendments thereto, with any and all
exhibits and any and all other documents required to be filed with respect
thereto or in connection therewith, granting unto said agents and attorneys,
and each of them, full power and authority to do and perform each and every
act and thing requisite and necessary to be done in and about the premises in
order to effectuate the same as fully to all intents and purposes as the
undersigned might or could do if personally present, and the undersigned
hereby ratifies and confirms all that said agents and attorneys-in-fact, or
any of them may lawfully do or cause to be done by virtue hereof.
IN WITNESS WHEREOF, the undersigned has hereunto set his hand on this
14th day of December, 1993.
/S/ HUGH J. KELLY
Hugh J. Kelly
Director
HIBERNIA CORPORATION
<PAGE>
P0WER OF ATTORNEY
KNOW ALL MEN BY THESE PRESENTS, that the undersigned director of
Hibernia Corporation, a Louisiana corporation (the "Corporation"), does
hereby name, constitute and appoint Robert H. Boh, Patricia C. Meringer, Gary
L. Ryan, and each of them (with full power to each of them to act alone), his
true and lawful agents and attorneys-in-fact, for him and on his behalf and
in his name, place and stead, in any and all capacities, to sign, execute,
acknowledge, deliver, and file with the Securities and Exchange Commission
(or any other governmental or regulatory authority), the Annual Report of the
Corporation on Form 10-K (or other appropriate form) for the fiscal year
ended December 31, 1993, and any and all amendments thereto, with any and all
exhibits and any and all other documents required to be filed with respect
thereto or in connection therewith, granting unto said agents and attorneys,
and each of them, full power and authority to do and perform each and every
act and thing requisite and necessary to be done in and about the premises in
order to effectuate the same as fully to all intents and purposes as the
undersigned might or could do if personally present, and the undersigned
hereby ratifies and confirms all that said agents and attorneys-in-fact, or
any of them may lawfully do or cause to be done by virtue hereof.
IN WITNESS WHEREOF, the undersigned has hereunto set his hand on this
14th day of December, 1993.
/S/ JOHN P. LABORDE
John P. Laborde
Director
HIBERNIA CORPORATION
<PAGE>
P0WER OF ATTORNEY
KNOW ALL MEN BY THESE PRESENTS, that the undersigned director of
Hibernia Corporation, a Louisiana corporation (the "Corporation"), does
hereby name, constitute and appoint Robert H. Boh, Patricia C. Meringer, Gary
L. Ryan, and each of them (with full power to each of them to act alone), his
true and lawful agents and attorneys-in-fact, for him and on his behalf and
in his name, place and stead, in any and all capacities, to sign, execute,
acknowledge, deliver, and file with the Securities and Exchange Commission
(or any other governmental or regulatory authority), the Annual Report of the
Corporation on Form 10-K (or other appropriate form) for the fiscal year
ended December 31, 1993, and any and all amendments thereto, with any and all
exhibits and any and all other documents required to be filed with respect
thereto or in connection therewith, granting unto said agents and attorneys,
and each of them, full power and authority to do and perform each and every
act and thing requisite and necessary to be done in and about the premises in
order to effectuate the same as fully to all intents and purposes as the
undersigned might or could do if personally present, and the undersigned
hereby ratifies and confirms all that said agents and attorneys-in-fact, or
any of them may lawfully do or cause to be done by virtue hereof.
IN WITNESS WHEREOF, the undersigned has hereunto set his hand on this
14th day of December, 1993.
/S/ SIDNEY W. LASSEN
Sidney W. Lassen
Director
HIBERNIA CORPORATION
<PAGE>
P0WER OF ATTORNEY
KNOW ALL MEN BY THESE PRESENTS, that the undersigned Vice Chairman and
director of Hibernia Corporation, a Louisiana corporation (the
"Corporation"), does hereby name, constitute and appoint Robert H. Boh,
Patricia C. Meringer, Gary L. Ryan, and each of them (with full power to each
of them to act alone), his true and lawful agents and attorneys-in-fact, for
him and on his behalf and in his name, place and stead, in any and all
capacities, to sign, execute, acknowledge, deliver, and file with the
Securities and Exchange Commission (or any other governmental or regulatory
authority), the Annual Report of the Corporation on Form 10-K (or other
appropriate form) for the fiscal year ended December 31, 1993, and any and
all amendments thereto, with any and all exhibits and any and all other
documents required to be filed with respect thereto or in connection
therewith, granting unto said agents and attorneys, and each of them, full
power and authority to do and perform each and every act and thing requisite
and necessary to be done in and about the premises in order to effectuate the
same as fully to all intents and purposes as the undersigned might or could
do if personally present, and the undersigned hereby ratifies and confirms
all that said agents and attorneys-in-fact, or any of them may lawfully do or
cause to be done by virtue hereof.
IN WITNESS WHEREOF, the undersigned has hereunto set his hand on this
14th day of December, 1993.
/S/ DONALD J. NALTY
Donald J. Nalty
Vice Chairman and Director
HIBERNIA CORPORATION
<PAGE>
P0WER OF ATTORNEY
KNOW ALL MEN BY THESE PRESENTS, that the undersigned director of
Hibernia Corporation, a Louisiana corporation (the "Corporation"), does
hereby name, constitute and appoint Robert H. Boh, Patricia C. Meringer, Gary
L. Ryan, and each of them (with full power to each of them to act alone), his
true and lawful agents and attorneys-in-fact, for him and on his behalf and
in his name, place and stead, in any and all capacities, to sign, execute,
acknowledge, deliver, and file with the Securities and Exchange Commission
(or any other governmental or regulatory authority), the Annual Report of the
Corporation on Form 10-K (or other appropriate form) for the fiscal year
ended December 31, 1993, and any and all amendments thereto, with any and all
exhibits and any and all other documents required to be filed with respect
thereto or in connection therewith, granting unto said agents and attorneys,
and each of them, full power and authority to do and perform each and every
act and thing requisite and necessary to be done in and about the premises in
order to effectuate the same as fully to all intents and purposes as the
undersigned might or could do if personally present, and the undersigned
hereby ratifies and confirms all that said agents and attorneys-in-fact, or
any of them may lawfully do or cause to be done by virtue hereof.
IN WITNESS WHEREOF, the undersigned has hereunto set his hand on this
14th day of December, 1993.
/S/ROBERT T. RATCLIFF
Robert T. Ratcliff
Director
HIBERNIA CORPORATION
<PAGE>
P0WER OF ATTORNEY
KNOW ALL MEN BY THESE PRESENTS, that the undersigned director of
Hibernia Corporation, a Louisiana corporation (the "Corporation"), does
hereby name, constitute and appoint Robert H. Boh, Patricia C. Meringer, Gary
L. Ryan, and each of them (with full power to each of them to act alone), his
true and lawful agents and attorneys-in-fact, for him and on his behalf and
in his name, place and stead, in any and all capacities, to sign, execute,
acknowledge, deliver, and file with the Securities and Exchange Commission
(or any other governmental or regulatory authority), the Annual Report of the
Corporation on Form 10-K (or other appropriate form) for the fiscal year
ended December 31, 1993, and any and all amendments thereto, with any and all
exhibits and any and all other documents required to be filed with respect
thereto or in connection therewith, granting unto said agents and attorneys,
and each of them, full power and authority to do and perform each and every
act and thing requisite and necessary to be done in and about the premises in
order to effectuate the same as fully to all intents and purposes as the
undersigned might or could do if personally present, and the undersigned
hereby ratifies and confirms all that said agents and attorneys-in-fact, or
any of them may lawfully do or cause to be done by virtue hereof.
IN WITNESS WHEREOF, the undersigned has hereunto set his hand on this
14th day of December, 1993.
/S/ JOE D. SMITH, JR.
Joe D. Smith, Jr.
Director
HIBERNIA CORPORATION
<PAGE>
P0WER OF ATTORNEY
KNOW ALL MEN BY THESE PRESENTS, that the undersigned director of
Hibernia Corporation, a Louisiana corporation (the "Corporation"), does
hereby name, constitute and appoint Robert H. Boh, Patricia C. Meringer, Gary
L. Ryan, and each of them (with full power to each of them to act alone), his
true and lawful agents and attorneys-in-fact, for him and on his behalf and
in his name, place and stead, in any and all capacities, to sign, execute,
acknowledge, deliver, and file with the Securities and Exchange Commission
(or any other governmental or regulatory authority), the Annual Report of the
Corporation on Form 10-K (or other appropriate form) for the fiscal year
ended December 31, 1993, and any and all amendments thereto, with any and all
exhibits and any and all other documents required to be filed with respect
thereto or in connection therewith, granting unto said agents and attorneys,
and each of them, full power and authority to do and perform each and every
act and thing requisite and necessary to be done in and about the premises in
order to effectuate the same as fully to all intents and purposes as the
undersigned might or could do if personally present, and the undersigned
hereby ratifies and confirms all that said agents and attorneys-in-fact, or
any of them may lawfully do or cause to be done by virtue hereof.
IN WITNESS WHEREOF, the undersigned has hereunto set his hand on this
14th day of December, 1993.
/S/ JAMES H. STONE
James H. Stone
Director
HIBERNIA CORPORATION
<PAGE>
P0WER OF ATTORNEY
KNOW ALL MEN BY THESE PRESENTS, that the undersigned director of
Hibernia Corporation, a Louisiana corporation (the "Corporation"), does
hereby name, constitute and appoint Robert H. Boh, Patricia C. Meringer, Gary
L. Ryan, and each of them (with full power to each of them to act alone), his
true and lawful agents and attorneys-in-fact, for him and on his behalf and
in his name, place and stead, in any and all capacities, to sign, execute,
acknowledge, deliver, and file with the Securities and Exchange Commission
(or any other governmental or regulatory authority), the Annual Report of the
Corporation on Form 10-K (or other appropriate form) for the fiscal year
ended December 31, 1993, and any and all amendments thereto, with any and all
exhibits and any and all other documents required to be filed with respect
thereto or in connection therewith, granting unto said agents and attorneys,
and each of them, full power and authority to do and perform each and every
act and thing requisite and necessary to be done in and about the premises in
order to effectuate the same as fully to all intents and purposes as the
undersigned might or could do if personally present, and the undersigned
hereby ratifies and confirms all that said agents and attorneys-in-fact, or
any of them may lawfully do or cause to be done by virtue hereof.
IN WITNESS WHEREOF, the undersigned has hereunto set his hand on this
14th day of December, 1993.
/S/ VIRGINIA EASON WEINMANN
Virginia Eason Weinmann
Director
HIBERNIA CORPORATION
<PAGE>
P0WER OF ATTORNEY
KNOW ALL MEN BY THESE PRESENTS, that the undersigned director of
Hibernia Corporation, a Louisiana corporation (the "Corporation"), does
hereby name, constitute and appoint Robert H. Boh, Patricia C. Meringer, Gary
L. Ryan, and each of them (with full power to each of them to act alone), his
true and lawful agents and attorneys-in-fact, for him and on his behalf and
in his name, place and stead, in any and all capacities, to sign, execute,
acknowledge, deliver, and file with the Securities and Exchange Commission
(or any other governmental or regulatory authority), the Annual Report of the
Corporation on Form 10-K (or other appropriate form) for the fiscal year
ended December 31, 1993, and any and all amendments thereto, with any and all
exhibits and any and all other documents required to be filed with respect
thereto or in connection therewith, granting unto said agents and attorneys,
and each of them, full power and authority to do and perform each and every
act and thing requisite and necessary to be done in and about the premises in
order to effectuate the same as fully to all intents and purposes as the
undersigned might or could do if personally present, and the undersigned
hereby ratifies and confirms all that said agents and attorneys-in-fact, or
any of them may lawfully do or cause to be done by virtue hereof.
IN WITNESS WHEREOF, the undersigned has hereunto set his hand on this
14th day of December, 1993.
/S/ ERNEST L. WILLIAMSON
Ernest L. Williamson
Director
HIBERNIA CORPORATION
<PAGE>
P0WER OF ATTORNEY
KNOW ALL MEN BY THESE PRESENTS, that the undersigned director of
Hibernia Corporation, a Louisiana corporation (the "Corporation"), does
hereby name, constitute and appoint Robert H. Boh, Patricia C. Meringer, Gary
L. Ryan, and each of them (with full power to each of them to act alone), his
true and lawful agents and attorneys-in-fact, for him and on his behalf and
in his name, place and stead, in any and all capacities, to sign, execute,
acknowledge, deliver, and file with the Securities and Exchange Commission
(or any other governmental or regulatory authority), the Annual Report of the
Corporation on Form 10-K (or other appropriate form) for the fiscal year
ended December 31, 1993, and any and all amendments thereto, with any and all
exhibits and any and all other documents required to be filed with respect
thereto or in connection therewith, granting unto said agents and attorneys,
and each of them, full power and authority to do and perform each and every
act and thing requisite and necessary to be done in and about the premises in
order to effectuate the same as fully to all intents and purposes as the
undersigned might or could do if personally present, and the undersigned
hereby ratifies and confirms all that said agents and attorneys-in-fact, or
any of them may lawfully do or cause to be done by virtue hereof.
IN WITNESS WHEREOF, the undersigned has hereunto set his hand on this
14th day of December, 1993.
/S/ ROBERT E. ZETZMANN
Robert E. Zetzmann
Director
HIBERNIA CORPORATION
