<PAGE>
As Filed with the Securities and Exchange Commission on December 23, 1994
REGISTRATION NO. 33-_____
================================================================================
SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
_____________________________
FORM S-4
REGISTRATION STATEMENT
UNDER
THE SECURITIES ACT OF 1933
_____________________________
HIBERNIA CORPORATION
(Exact Name of Registrant as Specified in its charter)
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LOUISIANA 6711 72-0724532
(State or (Primary Standard (I.R.S. Employer
Jurisdiction of Industrial Identification
Incorporation or Classification) Number)
Organization)
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313 CARONDELET STREET
NEW ORLEANS, LOUISIANA 70130
(504) 533-5332
(Address, Including Zip Code, and Telephone Number, Including
Area Code, of Registrant's Principal Executive Offices)
_____________________________
GARY L. RYAN
ASSOCIATE COUNSEL
HIBERNIA CORPORATION
313 CARONDELET STREET
NEW ORLEANS, LOUISIANA 70130
(504) 533-5560
(Name, Address, Including Zip Code, and Telephone Number,
Including Area Code of Agent for Service)
COPIES TO:
PATRICIA C. MERINGER
SECRETARY AND ASSOCIATE COUNSEL
HIBERNIA CORPORATION
313 CARONDELET STREET
NEW ORLEANS, LOUISIANA 70130
(504) 533-2486
ALAN JACOBS, ESQ.
MCGLINCHEY STAFFORD LANG
A LAW CORPORATION
2777 STEMMONS FREEWAY, SUITE 925
DALLAS, TEXAS 75207
(214) 634-3939
____________________________
<PAGE>
APPROXIMATE DATE OF COMMENCEMENT OF PROPOSED SALE OF SECURITIES TO THE PUBLIC:
As soon as practicable after this registration statement is declared
effective.
If the securities being registered on this Form are being offered in
connection with the formation of a holding company and there is compliance with
General Instruction G, check the following box. / /
CALCULATION OF REGISTRATION FEE
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TITLE OF EACH AMOUNT TO BE PROPOSED PROPOSED AMOUNT OF
CLASS OF REGISTERED MAXIMUM MAXIMUM REGISTRATION
SECURITIES TO (1) OFFERING AGGREGATE FEE (2)
BE REGISTERED PRICE PER OFFERING
SHARE (2) PRICE (2)
- --------------------------------------------------------------------------------
Class A
Common Stock,
no par value 2,250,000 $19.17 $9,272,261 $3,197
shares
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________________________________________________________________________________
1. Assumes an Average Market Price of the Registrant's Class A Common Stock,
no par value, at closing (as defined elsewhere in the Prospectus) between
$8.875 and $7.75 per share. The average of the high and low sales prices
of one share of such stock on December 21, 1994 was within this range.
2. Calculated pursuant to Rule 457(f)(2) of the Securities Act of 1933 (the
"Securities Act"), based upon the aggregate book value of the shares of
Common Stock of American Bank to be exchanged as of September 30, 1994
computed by multiplying the book value per share of the Common Stock of
American Bank on September 30, 1994 of $19.17 by 483,686, representing the
number of outstanding shares of such stock on such date.
THE REGISTRANT HEREBY AMENDS THIS REGISTRATION STATEMENT ON SUCH DATE OR DATES
AS MAY BE NECESSARY TO DELAY ITS EFFECTIVE DATE UNTIL THE REGISTRANT SHALL FILE
A FURTHER AMENDMENT WHICH SPECIFICALLY STATES THAT THIS REGISTRATION STATEMENT
SHALL THEREAFTER BECOME EFFECTIVE IN ACCORDANCE WITH SECTION 8(A) OF THE
SECURITIES ACT OF 1933 OR UNTIL THE REGISTRATION STATEMENT SHALL BECOME
EFFECTIVE ON SUCH DATE AS THE COMMISSION, ACTING PURSUANT TO SAID SECTION 8(A),
MAY DETERMINE.
<PAGE>
HIBERNIA CORPORATION
CROSS REFERENCE SHEET PURSUANT TO ITEM 501(B) OF REGULATION S-K
---------------------------------------------------------------
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ITEM OF FORM S-4 LOCATION OR CAPTION IN
---------------- ----------------------
PROXY STATEMENT
---------------
(PROSPECTUS)
------------
1. Forepart of Registration Statement Introduction
and Outside Front Cover Page of
Prospectus
2. Inside Front and Outside Back Table of Contents;
Cover Pages of Prospectus Available Information
3. Risk Factors, Ratio of Earnings Introduction; The
To Fixed Charges and Other Parties to the Merger;
Information Summary; Certain Regulatory
Considerations
4. Terms of the Transaction Introduction; Summary;
Proposed Merger
5. Pro Forma Financial Pro Forma Financial
Information Information
6. Material Contacts with the Proposed Merger
Company Being Acquired
7. Additional Information Required Not Applicable
for Reoffering by Persons and
Parties Deemed to be Underwriters
8. Interests of Named Experts and Validity of Shares;
Counsel Experts; Relationship
with Independent
Auditors
9. Disclosure of Commission Position Not Applicable
on Indemnification for Securities
Act Liabilities
10. Information with Respect to Introduction; Available
S-3 Registrants Information; The
Parties to the Merger
11. Incorporation of Certain Available Information
Information by Reference
12. Information with Respect to Not Applicable
S-2 or S-3 Registrants
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13. Incorporation of Certain Not Applicable
Information by Reference
14. Information with Respect to Not Applicable
Registrants other than
S-2 or S-3 Registrants
15. Information with Respect to Not Applicable
S-3 Companies
16. Information with Respect to Not Applicable
S-2 or S-3 Companies
17. Information with Respect to Summary; The Parties to
Companies Other Than S-2 or the Merger; Certain
S-3 Companies Information Concerning
American Bank
18. Information if Proxies, Introduction; Summary;
Consents or Authorizations Meeting Information;
are to be Solicited Proposed Merger; Certain
Information Concerning
American Bank; Relationship
with Independent Auditors
19. Information if Proxies, Not Applicable
Consents, Authorizations are not
to be Solicited or in an Exchange
Offer
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<PAGE>
AMERICAN BANK
22 APPLE STREET
POST OFFICE BOX 70
NORCO, LOUISIANA 70079
JANUARY __, 1995
To Our Shareholders:
You are cordially invited to attend a Special Meeting of Shareholders of
American Bank to be held at the main office of American Bank, 22 Apple Street,
Norco, Louisiana, on Wednesday, February 15, 1995, at 10:00 a.m., Central
time.
At this meeting, you will be asked to consider and vote upon a proposal to
approve an Agreement and Plan of Merger (the "Agreement") pursuant to which
American Bank will be merged with and into Hibernia National Bank ("HNB"), a
wholly-owned subsidiary of Hibernia Corporation ("Hibernia") (the "Merger").
The Agreement provides that, on the effective date of the Merger, each
outstanding share of common stock of American Bank will be converted into shares
of Hibernia common stock as more fully described in the accompanying Proxy
Statement-Prospectus. YOU ARE URGED TO READ CAREFULLY THE PROXY STATEMENT-
PROSPECTUS FOR A MORE COMPLETE DESCRIPTION OF THE TERMS OF THE AGREEMENT AND THE
PROPOSED MERGER.
The Agreement has been approved unanimously by your Board of Directors.
The Board believes, based on its own analysis and the opinion of American Bank's
financial advisor (all of which are described in the accompanying Proxy
Statement-Prospectus), that the proposed Merger is in the best interests of
American Bank's shareholders. As a result of the Merger, you, as a shareholder
of Hibernia, will own common stock in a bank holding company whose stock is
publicly traded on the New York Stock Exchange, Inc., and, with its greater
financial resources and ability to offer a broad range of financial services, is
better able to compete in the current market environment. The Merger presents a
rare opportunity for our shareholders, and I urge you to vote your shares in
favor of this transaction.
YOUR BOARD OF DIRECTORS RECOMMENDS THAT YOU VOTE "FOR" THE AGREEMENT AND
THE PROPOSED MERGER BY MARKING, SIGNING, DATING AND RETURNING THE ENCLOSED PROXY
CARD PROMPTLY IN THE ACCOMPANYING ENVELOPE.
Very truly yours,
Darryl J. Chauvin
President and Chief Executive Officer
<PAGE>
AMERICAN BANK
22 APPLE STREET
POST OFFICE BOX 70
NORCO, LOUISIANA 70079
(504) 764-7581
NOTICE OF SPECIAL MEETING OF SHAREHOLDERS
To the Shareholders of
American Bank:
Notice is hereby given that a Special Meeting of Shareholders of American
Bank will be held at the main office of American Bank, 22 Apple Street, Norco,
Louisiana, on Wednesday, February 15, 1995, at 10:00 a.m., Central time, for
the following purposes:
1. To consider and vote upon a proposal to approve an Agreement and
Plan of Merger dated as of September 19, 1994 (the "Agreement"), pursuant
to which (a) American Bank will be merged with and into Hibernia National
Bank, a wholly-owned banking subsidiary of Hibernia Corporation
("Hibernia") (the "Merger"); and (b) on the effective date of the Merger,
each outstanding share of Common Stock of American Bank will be converted
into a number of shares of Hibernia Common Stock as determined in
accordance with the Agreement; and
2. To transact such other business as may properly come before the
Special Meeting and any adjournment thereof.
Only those shareholders of record at the close of business on December 30,
1994 will be entitled to notice of and to vote at the Special Meeting.
DISSENTING SHAREHOLDERS WHO COMPLY WITH THE PROCEDURAL REQUIREMENTS OF THE
LOUISIANA BANKING LAW WILL BE ENTITLED TO RECEIVE PAYMENT OF THE FAIR CASH
VALUE OF THEIR SHARES IF THE MERGER IS EFFECTED.
Your vote is important regardless of the number of shares that you own.
Even if you plan to attend the Special Meeting, please mark, date and sign the
enclosed proxy card and return it promptly in the enclosed envelope, which
requires no postage. Your proxy may be revoked at any time prior to the vote at
the Special Meeting by notice to the Secretary of American Bank or by execution
and delivery of a later dated proxy. If you attend the Special Meeting, you may
withdraw your proxy and vote in person.
BY ORDER OF THE BOARD OF DIRECTORS
Manuel Dugas
Secretary
Norco, Louisiana
January , 1995
<PAGE>
PROXY
AMERICAN BANK
SPECIAL MEETING OF SHAREHOLDERS
FEBRUARY 15, 1995
THIS PROXY IS SOLICITED ON BEHALF OF THE BOARD OF DIRECTORS.
The undersigned hereby constitutes and appoints R. Preston Wailes, Darryl
J. Chauvin, and B. Franklin Martin, III, or any of them, the proxies of the
undersigned, with full power of substitution, to represent the undersigned and
to vote all of the shares of Common Stock of American Bank (the "Bank"), that
the undersigned is entitled to vote at the Special Meeting of Shareholders of
the Bank to be held on February 15, 1995 and any adjournment thereof.
1. A proposal to approve an Agreement and Plan of Merger dated as of September
19, 1994 (the "Agreement"), pursuant to which (a) the Bank will be merged
with and into Hibernia National Bank, a wholly-owned subsidiary of Hibernia
Corporation ("Hibernia") (the "Merger"), and (b) on the effective date of
the Merger, each outstanding share of Common Stock of the Bank will be
converted into a number of shares of Class A Common Stock of Hibernia, as
determined in accordance with the Agreement.
FOR / / AGAINST / / ABSTAIN / /
2. In their discretion, to vote upon such other business as may properly come
before the Special Meeting or any adjournment thereof.
THIS PROXY WILL BE VOTED AS SPECIFIED. IF NO SPECIFIC DIRECTIONS ARE
GIVEN, THIS PROXY WILL BE VOTED "FOR" PROPOSAL 1 SET FORTH HEREIN.
<PAGE>
[REVERSE SIDE]
PLEASE MARK, SIGN, DATE AND RETURN THIS PROXY PROMPTLY USING THE ENCLOSED
ENVELOPE TO: THE HERMAN GROUP, INC., 13760 NOEL ROAD, SUITE 320, DALLAS, TEXAS
75240. IF YOU HAVE ANY QUESTIONS, PLEASE CALL THE INVESTOR RELATIONS DEPARTMENT
AT (800) OR (214)991-4400.
Please sign exactly as the name appears on the certificate or certificates
representing shares to be voted by this proxy. When signing as executor,
administrator, attorney, trustee or guardian, please give full title as such.
If a corporation, please sign in full corporate name by president or other
authorized person. If a partnership, please sign in partnership name by
authorized persons.
Dated: ____________________________
-----------------------------
Signature of Shareholder
------------------------------
Signature (if jointly owned)
<PAGE>
PROXY STATEMENT
AMERICAN BANK
SPECIAL MEETING OF SHAREHOLDERS
To Be Held on February 15, 1995
__________________________________
PROSPECTUS
HIBERNIA CORPORATION
2,250,000 SHARES OF
CLASS A COMMON STOCK
(NO PAR VALUE)
This Proxy Statement-Prospectus is being furnished to the holders of the
Common Stock, $1.00 par value ("American Bank Common Stock"), of American Bank,
a Louisiana state bank ("American Bank") in connection with the solicitation of
proxies by the Board of Directors of American Bank for use at a special meeting
of shareholders (the "Special Meeting") to be held at 10:00 a.m., central time,
on Wednesday, February 15, 1995, at the main office of American Bank, 22
Apple Street, Norco, Louisiana, and at any adjournment thereof.
At the Special Meeting, the holders of record of American Bank Common
Stock as of the close of business on December 30, 1994 (the "Record Date") will
consider and vote upon a proposal to approve the merger of American Bank with
and into Hibernia National Bank ("HNB"), a national banking association and a
subsidiary of Hibernia Corporation ("Hibernia") (the "Merger"), and the related
Agreement and Plan of Merger dated as of September 19, 1994 (the "Agreement")
between American Bank, HNB and Hibernia. Upon consummation of the Merger, each
outstanding share of American Bank Common Stock, except for shares owned
beneficially by Hibernia and its subsidiaries, and shares as to which
dissenters' rights have been perfected and not withdrawn or otherwise forfeited,
will be converted into the number of shares of Hibernia Class A Common Stock, no
par value ("Hibernia Common Stock"), determined in the manner described below
under the heading "PROPOSED MERGER -- Terms of the Merger," with cash being paid
in lieu of any fractional share interests. For a description of the Agreement,
which is included in its entirety as Appendix A to this Proxy Statement-
Prospectus, see "PROPOSED MERGER."
This Proxy Statement-Prospectus also constitutes a prospectus of
Hibernia with respect to the shares of Hibernia Common Stock to be issued
pursuant to the Agreement if the Merger is consummated. The actual number of
shares of Hibernia Common Stock to be issued will be determined in accordance
with the terms of the Agreement. See "PROPOSED MERGER -- Terms of the Merger."
<PAGE>
The outstanding shares of Hibernia Common Stock are listed on the New
York Stock Exchange, Inc. (the "NYSE"). The reported last sale price of
Hibernia Common Stock on the NYSE Composite Transactions Reporting System on
January __, 1995 was $______ per share.
This Proxy Statement-Prospectus and the accompanying proxy card are
first being mailed to shareholders of American Bank on or about January __,
1995.
No person is authorized to give any information or to make any
representations other than those contained in this Proxy Statement-Prospectus,
and, if given or made, such information or representation may not be relied upon
as having been made by Hibernia or American Bank. This Proxy Statement-
Prospectus does not constitute an offer to sell or solicitation of an offer to
buy by Hibernia, nor will there be any sale of Hibernia Common Stock offered
hereby, in any state in which, or to any person to whom, it would be unlawful to
make such an offer or solicitation prior to registration or qualification under
applicable state law.
THESE SECURITIES HAVE NOT BEEN APPROVED OR DISAPPROVED BY THE
SECURITIES AND EXCHANGE COMMISSION OR ANY STATE SECURITIES COMMISSION, NOR HAS
THE SECURITIES AND EXCHANGE COMMISSION OR ANY STATE SECURITIES COMMISSION PASSED
UPON THE ACCURACY OR ADEQUACY OF THIS PROXY STATEMENT-PROSPECTUS. ANY
REPRESENTATION TO THE CONTRARY IS A CRIMINAL OFFENSE.
THE SHARES OF HIBERNIA COMMON STOCK OFFERED HEREBY ARE NOT SAVINGS
ACCOUNTS, DEPOSITS OR OTHER OBLIGATIONS OF A BANK OR SAVINGS ASSOCIATION AND ARE
NOT INSURED BY THE FEDERAL DEPOSIT INSURANCE CORPORATION OR ANY OTHER
GOVERNMENTAL AGENCY.
The date of this Proxy Statement-Prospectus is January __, 1995.
<PAGE>
TABLE OF CONTENTS
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<S> <C>
Page
INTRODUCTION . . . . . . . . . . . . . . . . . . . . .
AVAILABLE INFORMATION. . . . . . . . . . . . . . . . .
INCORPORATION OF CERTAIN DOCUMENTS BY REFERENCE. . . .
THE PARTIES TO THE MERGER. . . . . . . . . . . . . . .
SUMMARY. . . . . . . . . . . . . . . . . . . . . . . .
MEETING INFORMATION. . . . . . . . . . . . . . . . . .
General . . . . . . . . . . . . . . . . . . . . .
Purpose of the Special Meeting. . . . . . . . . .
Solicitation; Voting and Revocation of Proxies. .
Shares Entitled to Vote; Quorum; Vote Required. .
Recommendation of American Bank's
Board of Directors . . . . . . . . . . . . . . .
OTHER MATTERS . . . . . . . . . . . . . . . . . . . .
PRO FORMA FINANCIAL INFORMATION. . . . . . . . . . . .
PROPOSED MERGER. . . . . . . . . . . . . . . . . . . .
Background of and Reasons for the Merger. . . . .
Terms of the Merger . . . . . . . . . . . . . . .
Opinion of Financial Advisor . . . . . . . . . .
Surrender of Certificates . . . . . . . . . . . .
Representations and Warranties. . . . . . . . . .
Conditions to the Merger; Waiver. . . . . . . .
Regulatory and Other Approvals. . . . . . . . . .
Business Pending the Merger . . . . . . . . . . .
Effective Date of the Merger; Termination . . . .
Management and Operations After the Merger. . . .
Certain Differences in Rights of Shareholders . .
Material Tax Consequences . . . . . . . . . . . .
Resale of Hibernia Common Stock . . . . . . . . .
Rights of Dissenting Shareholders . . . . . . . .
Interests of Certain Persons in the Merger. . . .
Dividend Reinvestment Plan. . . . . . . . . . . .
Accounting Treatment. . . . . . . . . . . . . . .
CERTAIN REGULATORY CONSIDERATIONS . . . . . . . . . .
CERTAIN INFORMATION RELATING TO AMERICAN BANK. . . . .
Description of the Business . . . . . . . . . . .
Competition . . . . . . . . . . . . . . . . . . .
Property . . . . . . . . . . . . . . . . . . . .
Employees . . . . . . . . . . . . . . . . . . . .
Market Prices and Dividends . . . . . . . . . . .
Legal Proceedings . . . . . . . . . . . . . . . .
Security Ownership of Principal Shareholders and
Management. . . . . . . . . . . . . . . . . . .
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<PAGE>
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AMERICAN BANK MANAGEMENT'S DISCUSSION AND ANALYSIS OF
FINANCIAL CONDITION AND RESULTS OF OPERATIONS. . . .
RELATIONSHIP WITH INDEPENDENT AUDITORS . . . . . . . .
VALIDITY OF SHARES . . . . . . . . . . . . . . . . . .
EXPERTS . . . . . . . . . . . . . . . . . . . . . . .
INDEX TO FINANCIAL STATEMENTS. . . . . . . . . . . . .
APPENDIX A--AGREEMENT AND PLAN OF MERGER
APPENDIX B--OPINION OF MONTGOMERY SECURITIES
APPENDIX C--SELECTED PROVISIONS OF LAW RELATING
TO RIGHTS OF DISSENTING SHAREHOLDERS
APPENDIX D--OPINION OF ERNST & YOUNG LLP REGARDING CERTAIN
TAX MATTERS
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<PAGE>
INTRODUCTION
The Registration Statement of which this Proxy Statement-Prospectus is a
part relates to shares of Hibernia Common Stock which will be issued in
connection with the Merger of American Bank with and into HNB pursuant to the
Agreement. The shares of Hibernia Common Stock offered hereby will be
exchanged, upon consummation of the Merger, for the outstanding shares of
American Bank Common Stock.
Shareholders of American Bank will be asked to approve the Agreement and
Merger at a Special Meeting to be held on February 15, 1995. The proxy
statement relating to such Special Meeting is included in this Proxy Statement-
Prospectus.
The terms of the Merger are described in this Proxy Statement-Prospectus,
and a copy of the Agreement and Plan of Merger between Hibernia, HNB, and
American Bank is attached hereto as Appendix A for reference.
AVAILABLE INFORMATION
Hibernia is subject to the informational requirements of the Securities
Exchange Act of 1934, as amended (the "Exchange Act"), and in accordance
therewith files reports, proxy statements and other information with the
Securities and Exchange Commission (the "Commission"). Such reports, proxy
statements and other information can be inspected and copied at the public
reference facilities of the Commission at Room 1024, 450 Fifth Street, N.W.,
Washington, D.C. 20549, and at the Commission's Regional Offices located at 75
Park Place, 14th Floor, New York, New York 10007 and Northwestern Atrium Center,
500 West Madison Street, Suite 1400, Chicago, Illinois 60661. Copies of such
materials can be obtained from the Public Reference Section of the Commission at
450 Fifth Street, N.W., Washington, D.C. 20549, at prescribed rates. In
addition, reports, proxy statements and other information concerning Hibernia
may be inspected at the offices of the New York Stock Exchange, Inc. (the
"NYSE"), 20 Broad Street, New York, New York 10005, on which the shares of
Hibernia Common Stock are listed.
Hibernia has filed with the Commission a registration statement on Form S-4
(together with all amendments and exhibits thereto, the "Registration
Statement") under the Securities Act of 1933, as amended (the "Securities Act")
with respect to the shares of Hibernia Common Stock offered hereby. This Proxy
Statement-Prospectus does not contain all of the information set forth in the
Registration Statement. For further information with respect to Hibernia and
the Hibernia Common Stock offered hereby, reference is hereby made to the
Registration Statement. Statements contained in this Prospectus concerning the
provisions of certain documents are not necessarily complete and, in each
instance, reference is made
3
<PAGE>
to the copy of the document filed as an exhibit to the Registration Statement,
each such statement being qualified in all respects by such reference. Copies
of all or any part of the Registration Statement, including exhibits thereto,
may be obtained, upon payment of the prescribed fees, at the offices of the
Commission and the NYSE, as set forth above.
All information contained in this Proxy Statement-Prospectus relating to
Hibernia and its subsidiaries has been supplied by Hibernia, and all information
relating to American Bank has been supplied by American Bank.
INCORPORATION OF CERTAIN DOCUMENTS BY REFERENCE
Incorporated by reference in this Proxy Statement-Prospectus are the
following documents filed by Hibernia with the Commission pursuant to the
Exchange Act: Hibernia's (1) Annual Report on Form 10-K for the year ended
December 31, 1993 (the financial statements included in the Form 10-K have been
restated in a Current Report on Form 8-K to give effect to four mergers
consummated during the third quarter of 1994 and accounted for as poolings of
interests), (2) definitive Proxy Statement dated April 8, 1994 relating to its
1994 Annual Meeting of Shareholders held on April 26, 1994 except for the
information contained therein under the headings "Executive Compensation --
Report of the Executive Compensation Committee" and "-- Stock Performance
Graph", which are expressly excluded from incorporation in this Registration
Statement, (3) Quarterly Reports on Form 10-Q for the fiscal quarters ended
March 31, 1994; June 30, 1994; and September 30, 1994, and (4) Current Reports
on Form 8-K dated October 11, November 12, November 14 and December 9, 1994,
respectively.
All documents subsequently filed by Hibernia with the Commission pursuant
to Sections 13(a), 13(c), 14 or 15(d) of the Exchange Act after the date of this
Proxy Statement-Prospectus and prior to the termination of the offering of
Hibernia Common Stock made hereby shall be deemed to be incorporated by
reference in this Proxy Statement-Prospectus and to be a part hereof from the
date such documents are filed, except that any and all information included in
any proxy statement filed by Hibernia under the headings "Executive Compensation
- -- Report of the Executive Compensation Committee" and "-- Stock Performance
Graph" are hereby expressly excluded from such incorporation by reference. Any
statement contained in a document incorporated or deemed to be incorporated by
reference herein shall be deemed to be modified or superseded for the purposes
hereof to the extent that a statement herein (or contained in any subsequently
filed document which also is incorporated by reference herein) modifies or
supersedes such statement. Any statement so modified or superseded shall not be
deemed, except as so modified or superseded, to constitute a part of this Proxy
Statement-Prospectus.
4
<PAGE>
Hibernia will provide, without charge, to each person to whom this Proxy
Statement-Prospectus is delivered, on the written or oral request of any such
person, a copy of any or all of the information incorporated herein by reference
other than exhibits to such information (unless such exhibits are specifically
incorporated by reference into such information). Written or oral requests
should be directed to Hibernia Corporation, 313 Carondelet Street, New Orleans,
Louisiana 70130, Attention: Assistant Corporate Secretary, Telephone (504)
533-3411.
SUMMARY
THIS SUMMARY IS NECESSARILY GENERAL AND ABBREVIATED AND HAS BEEN PREPARED
TO ASSIST SHAREHOLDERS OF AMERICAN BANK IN THEIR REVIEW OF THIS PROXY
STATEMENT-PROSPECTUS. THIS SUMMARY IS NOT INTENDED TO BE A COMPLETE EXPLANATION
OF THE MATTERS COVERED IN THIS PROXY STATEMENT-PROSPECTUS AND IS QUALIFIED IN
ITS ENTIRETY BY REFERENCE TO THE MORE DETAILED INFORMATION CONTAINED ELSEWHERE
IN THIS PROXY STATEMENT-PROSPECTUS, THE APPENDICES HERETO AND THE DOCUMENTS
INCORPORATED HEREIN BY REFERENCE, ALL OF WHICH SHAREHOLDERS ARE URGED TO READ
CAREFULLY PRIOR TO THE SPECIAL MEETING.
THE PARTIES TO THE MERGER
HIBERNIA AND HNB. Hibernia is a Louisiana corporation registered under the
Bank Holding Company Act of 1956, as amended ("BHCA"). As of September 30,
1994, Hibernia had total consolidated assets of approximately $5.7 billion and
shareholders' equity of approximately $500 million.
As of September 30, 1994 Hibernia had a single banking subsidiary, Hibernia
National Bank ("HNB"), that provides retail and commercial banking services
through 120 branches throughout Louisiana. As of September 30, 1994, HNB was
the largest bank headquartered in Louisiana.
Hibernia consummated four mergers in the third quarter of 1994, two each as
of July 1 and August 1, and each of which was accounted for as a pooling of
interests. Restated consolidated financial statements of Hibernia as of
December 31, 1993 reflecting the impact of these mergers were included in a
Current Report on Form 8-K filed with the Commission on October 11, 1994 and are
incorporated herein by reference. As restated to reflect those mergers,
Hibernia's total assets and shareholders' equity as of December 31, 1993 were
$5.7 billion and $474 million, respectively.
The principal executive offices of Hibernia are located at 313 Carondelet
Street, New Orleans, Louisiana 70130, and its telephone number is (504) 533-
5532. For additional information concerning the business and financial
condition of Hibernia, reference should be made to the Hibernia reports
incorporated herein by reference.
5
<PAGE>
See "AVAILABLE INFORMATION."
From time to time, Hibernia investigates and holds discussions and
negotiations in connection with possible merger or similar acquisition
transactions with other financial institutions. At the date hereof, Hibernia
has entered into definitive merger agreements with two financial institutions in
addition to American Bank which are described in documents incorporated herein
by reference and described under "PRO FORMA FINANCIAL INFORMATION" below. In
addition, Hibernia is pursuing other possible acquisition opportunities and
intends to continue to pursue such opportunities in the near future when
available and feasible in the light of Hibernia's business and strategic plans.
Although it is anticipated that such transactions may be entered into both
before and after the Merger, there can be no assurance as to when or if, or the
terms upon which, such transactions may be pursued or consummated. If required
under applicable law, any such transactions would be subject to regulatory
approval and the approval of shareholders.
AMERICAN BANK. American Bank, a Louisiana state bank organized in 1964,
provides full-service consumer and commercial banking services in Norco,
Louisiana and surrounding areas of St. Charles Parish, Louisiana, through its
main banking office at 22 Apple Street, Norco, Louisiana, and four full service
branches located in Boutte, Destrehan, Hahnville and Luling, Louisiana. At
September 30, 1994, American Bank had total assets of approximately $92.7
million, shareholders' equity of approximately $9.3 million and total deposits
of approximately $82.2 million. American Bank's principal executive offices are
located at 22 Apple Street, Norco, Louisiana 70079, and its telephone number at
such address is (504) 764-7581.
For additional information concerning the business of American Bank and its
financial condition, see "CERTAIN INFORMATION CONCERNING AMERICAN BANK" and
"AMERICAN BANK FINANCIAL INFORMATION."
THE SPECIAL MEETING
A special meeting of the shareholders of American Bank will be held at the
main office of American Bank, 22 Apple Street, Norco, Louisiana, on __________,
February __, 1995, at __:00 __.m., Central time (the "Special Meeting"). Only
record holders of American Bank Common Stock at the close of business on the
Record Date are entitled to notice of and to vote at the Special Meeting. On
the Record Date, there were 483,686 shares of American Bank Common Stock issued
and outstanding.
6
<PAGE>
PURPOSE OF THE SPECIAL MEETING
The purpose of the Special Meeting is to consider and vote upon a proposal
to approve the Agreement, pursuant to which (a) American Bank will be merged
with and into HNB; and (b) on the effective date of the Merger, each outstanding
share of American Bank Common Stock will be converted into a number of shares of
Hibernia Common Stock, as determined in accordance with the Agreement. As a
result of the Merger, the business and properties of American Bank will become
the business and properties of HNB, and shareholders of American Bank will
receive the consideration described below under "Terms of the Merger." See
"MEETING INFORMATION -- Purpose of the Special Meeting."
VOTE REQUIRED
The Agreement must be approved at the Special Meeting by the affirmative
vote of the holders of at least two-thirds of the outstanding shares of American
Bank Common Stock, with each shareholder of American Bank Common Stock entitled
to one vote for each share owned by him. As a condition to the consummation of
the Merger, each shareholder of American Bank who is also a director of American
Bank is required to execute prior to the Merger an agreement pursuant to which
such shareholder, among other things, commits to vote in favor of the approval
of the Agreement, unless he is prohibited by law from voting in favor of the
Agreement in the opinion of his counsel. The nine persons who have executed or
will execute such agreements beneficially owned, as of the Record Date, an
aggregate of 92,328 shares, or approximately 19.09%, of the outstanding American
Bank Common Stock on that date. Additionally, Hibernia and HNB beneficially
owned, as of the Record Date, an aggregate of 47,763 shares, or approximately
9.87%, of the outstanding American Bank Common Stock on that date. As a
condition to consummation of the Merger, Hibernia and HNB have agreed to vote
their shares in favor of the approval of the Agreement. Under Louisiana law,
shareholders of Hibernia are not required to approve the Agreement. See
"MEETING INFORMATION --Shares Entitled to Vote; Quorum; Vote Required."
TERMS OF THE MERGER
On the Effective Date, each outstanding share of American Bank Common
Stock, other than shares held by shareholders who exercise and perfect
dissenters' rights in accordance with applicable law, will be converted into
4.65 shares of Hibernia Common Stock, unless the average market price of
Hibernia Common Stock for the five business days ("Average Market Price")
preceding the last trading day immediately prior to the closing of the Merger
(the "Closing Date") is less than $7.75 per share, or is greater than $8.875 per
share. If the Average Market Price of Hibernia Common Stock is less than $7.75,
then holders of American Bank Common Stock will receive an aggregate number of
shares of Hibernia Common Stock
7
<PAGE>
determined by dividing $17,437,500 by the Average Market Price. If the Average
Market Price is more than $8.875, then the holders of American Bank Common Stock
will receive an aggregate number of shares of Hibernia Common Stock determined
by dividing $19,968,750 by the Average Market Price. As long as the Average
Market Price is at least $7.75 but not more than $8.875, however, holders of
American Bank Common Stock will receive 4.65 shares of Hibernia Common Stock for
each share of American Bank Common Stock held by them. The consideration to be
exchanged by Hibernia for American Bank Common Stock in the Merger may be
reduced in the event certain expenses of American Bank exceed amounts specified
in the Agreement. If expenses exceed the specified levels, the aggregate
consideration to be exchanged by Hibernia will be correspondingly reduced by the
amount of the excess.
MANAGEMENT AND OPERATIONS AFTER THE MERGER
After the Effective Date, the offices of American Bank will operate as
branch banking offices of HNB. As of the Effective Date, the directors of
American Bank will no longer hold their positions as directors. See "PROPOSED
MERGER -- Management and Operations After the Merger." Hibernia maintains a
city advisory board of directors in the Baton Rouge region of Louisiana on which
some or all of the directors of American Bank may serve after the Merger. In
addition, Hibernia will assume American Bank's obligations under an employment
contract with Darryl J. Chauvin, President and Chief Executive Officer of
American Bank, which is described more fully below. See "PROPOSED MERGER --
Interests of Certain Persons in the Merger."
OTHER PENDING MERGER TRANSACTIONS FOR HIBERNIA
In addition to American Bank, Hibernia has entered into definitive merger
agreements with four financial institutions as of the date of this Proxy
Statement-Prospectus. These transactions are subject to certain conditions,
similar to the conditions to the Merger described herein. These transactions
may be consummated before or after consummation of the Merger. Shareholders of
American Bank will not have the right to vote on the other pending transactions,
or any other transaction that might be entered into by Hibernia prior to the
Effective Date of the Merger. In addition, if the Merger is consummated prior
to consummation of another transaction, former shareholders of American Bank who
have not exercised and perfected dissenters' rights will be shareholders of
Hibernia at the time those transactions are consummated. Shareholders of
Hibernia do not have the right to vote on any of the pending Hibernia merger
transactions.
The table below includes certain information concerning the pending merger
transactions, other than American Bank, to which Hibernia is a party as of the
date of this Proxy Statement-Prospectus. Further information concerning the
effects of these
8
<PAGE>
transactions, including complete pro forma financial information, is included
herein below. See "PRO FORMA FINANCIAL INFORMATION." All information included
in the following table is as of September 30, 1994, and all percentages are
percentages of the total combined entity, assuming consummation of all pending
mergers, including the Merger of American Bank with and into HNB.
9
<PAGE>
<TABLE>
<CAPTION>
<S> <C> <C> <C> <C> <C> <C>
NAME DEPOSITS DEPOSITS ASSETS ASSETS EQUITY EQUITY
- ------ -------- -------- ------ ------- ------ -------
AS % OF AS % OF AS % OF
-------- ------- -------
TOTAL TOTAL TOTAL
-------- ------- -------
(Dollars in millions)
First
State $127 2.23% $149 2.27% $20 3.50%
Pioneer $314 5.52% $354 5.40% $31 5.42%
STABA
Banc-
shares $ 89 1.56% $ 97 1.48% $ 8 1.40%
Progressive
Bancorpor-
ation $119 2.09% $140 2.14% $ 8 1.40%
</TABLE>
10
<PAGE>
On a pro forma basis, and based upon historical results, if each of the
pending mergers had been effective on January 1, 1991, the pending transactions,
including American Bank and taken as a whole, would have increased earnings per
share in each of the years 1991 and 1992 and would have decreased earnings per
share slightly in 1993, as shown on the Pro Forma Combined Statements of Income
included in the Pro Forma Financial Statements below.
On a pro forma basis, as of September 30, 1994, the book value of the
shares of Hibernia would be slightly decreased by the pending transactions. The
effect of the Merger on the book value of Hibernia Common Stock, as well as
American Bank Common Stock, is shown in the Comparative Per Share Information
table included herein.
RECOMMENDATION OF THE BOARD OF DIRECTORS
The Board of Directors of American Bank has unanimously approved the
Agreement, believes that the Merger is in the best interests of the shareholders
of American Bank and recommends that the shareholders vote FOR the Merger. The
Board of Directors has received from Montgomery Securities ("Montgomery") an
opinion that the consideration to be received by the shareholders of American
Bank pursuant to the Merger, when taken as a whole, is fair to such shareholders
from a financial point of view. See "PROPOSED MERGER -- Opinion of Financial
Advisor." American Bank's Board believes that the Merger will provide
significant value to all American Bank shareholders and will enable them to
participate in opportunities for growth that American Bank's Board believes the
Merger makes possible. In recommending the Merger to the shareholders, American
Bank's Board of Directors considered, among other factors, the financial terms
of the Merger, the liquidity it will afford American Bank's shareholders and the
business earnings and potential for future growth of American Bank and Hibernia.
See "PROPOSED MERGER -- Background of and Reasons for the Merger."
BASIS FOR THE TERMS OF THE MERGER
A number of factors, in addition to those stated above, were considered by
the Board of Directors of American Bank in approving the terms of the Merger,
including, without limitation, information concerning the financial condition,
results of operations and prospects of each of Hibernia, HNB and American Bank;
the ability of the combined entity to compete in the relevant banking markets;
the market price of Hibernia Common Stock; the absence of a public trading
market for American Bank's common stock; the consideration to be received by
American Bank shareholders in relation to American Bank's earnings and book
value; the historical dividends paid by American Bank and Hibernia; the
anticipated tax-free nature of the Merger to American Bank's shareholders for
federal income tax purposes, to the extent Hibernia Common Stock is received;
and the financial terms of other recent business combinations in the
11
<PAGE>
banking industry. See "PROPOSED MERGER -- Background of and Reasons for the
Merger."
ADVICE AND OPINION OF FINANCIAL ADVISOR
Montgomery, American Bank's financial advisor, has rendered its opinion
that the consideration to be received by the shareholders of American Bank
pursuant to the Merger, when taken as a whole, is fair, from a financial point
of view, to such shareholders. The opinion of Montgomery is attached hereto as
Appendix B and should be read in its entirety with respect to the assumptions
made therein and other matters considered. See "PROPOSED MERGER -- Opinion of
Financial Advisor" for further information regarding, among other things, the
selection of Montgomery and its compensation in connection with the Merger.
CONDITIONS; ABANDONMENT; AMENDMENT
Consummation of the Merger is subject to the satisfaction of a number of
conditions, including approval of the Agreement by the shareholders of American
Bank and approval of the Merger of American Bank with and into HNB by the
Office of the Comptroller of the Currency ("OCC"). The OCC approved the Merger
on November 30, 1994. Applicable law provides that the Merger may not be
consummated until at least 15, but no more than 360, days after approval of the
OCC is obtained. See "PROPOSED MERGER --Representations and Warranties;
Conditions to Closing; Waiver" and "-- Regulatory and Other Approvals."
Substantially all of the conditions to consummation of the Merger (except
for required shareholder and regulatory approvals) may be waived at any time by
the party for whose benefit they were created, and the Agreement may be amended
or supplemented at any time by written agreement of the parties, except that no
such waiver, amendment or supplement executed after approval of the Agreement by
American Bank's shareholders may reduce the ratio of Hibernia Common Stock to
American Bank Common Stock to be issued in the Merger (the "Exchange Ratio") or
adversely affect the holders of American Bank Common Stock. Any other material
change to the Agreement after the date of the Special Meeting would require the
approval of American Bank's shareholders. In addition, the Agreement may be
terminated, either before or after shareholder approval, under certain
circumstances. See "PROPOSED MERGER --Representations and Warranties;
Conditions to Closing; Waiver" and "-- Effective Date of the Merger;
Termination."
INTERESTS OF CERTAIN PERSONS IN THE MERGER
In considering the Merger, American Bank shareholders should be aware that
the American Bank directors, officers and employees have an interest in the
Merger, as described below. Certain severance plans and retention agreements
were adopted by American
12
<PAGE>
Bank in 1994 to encourage its employees and senior management to continue their
employment with American Bank in the context of ongoing merger discussions
between American Bank and certain non-affiliated financial institutions as
described elsewhere herein. The employment agreement of Darryl J. Chauvin,
American Bank's President and Chief Executive Officer, also provides for certain
severance payments if Mr. Chauvin is terminated or voluntarily resigns his
employment within the 30 days immediately following a "Change of Control" of
American Bank (such term, as defined in such agreement, includes the Merger).
The Agreement also provides for the indemnification by Hibernia and HNB of the
officers, directors and employees of American Bank for certain liabilities,
subject to certain conditions and aggregate dollar limitations. See "PROPOSED
MERGER -- Interests of Certain Persons in the Merger."
EMPLOYEE BENEFITS
Hibernia has agreed that it will use its best efforts to provide (or cause
to be provided by HNB) to all employees of American Bank who are employed as of
the Effective Date and who become employees of Hibernia or HNB after the Merger,
the same employee benefits as those offered by Hibernia and HNB to their
employees, except that employees of American Bank will not be required to wait
for any period in order to be eligible to participate in Hibernia's Flex Plan
(including its medical and dental coverage). Employees of American Bank will
not be denied health insurance coverage solely as a result of a pre-existing
condition that existed on the Effective Date but did not exist on the date the
employee commenced his or her employment with American Bank. Hibernia will also
give American Bank employees who become Hibernia or HNB employees full credit
for their years of service (for both eligibility, vesting and benefits) with
American Bank for purposes of each of Hibernia's benefits plans. Hibernia has
also agreed to pay or provide certain other benefits. See "PROPOSED MERGER --
Employee Benefits."
MATERIAL TAX CONSEQUENCES
It is a condition to consummation of the Merger that the parties receive an
opinion of counsel or a public accounting firm to the effect that the Merger,
when consummated in accordance with the terms of the Agreement, will constitute
a reorganization within the meaning of Section 368(a) of the Internal Revenue
Code of 1986, as amended (the "Code"), that the exchange of American Bank Common
Stock for Hibernia Common Stock will not give rise to the recognition of gain or
loss for federal income tax purposes to American Bank's shareholders with
respect to such exchange, and that the Louisiana income tax treatment to the
shareholders of American Bank will be substantially the same as the federal
income tax treatment of the Merger to such shareholders. The parties have
received an opinion from Ernst & Young LLP, certified public accountants, who
also serve as independent auditors for Hibernia,
13
<PAGE>
to the effect that the Merger, when consummated in accordance with the terms of
the Agreement, will constitute a reorganization within the meaning of Section
368(a) of the Code. A copy of such opinion is attached hereto as Appendix D.
See "PROPOSED MERGER -- Material Tax Consequences."
Because of the complexities of the tax laws and because the tax
consequences may vary depending upon a holder's individual circumstances or tax
status, it is recommended that each shareholder of American Bank consult his or
her tax advisor concerning the federal (and any applicable state, local or
other) tax consequences of the Merger to him or her.
DISSENTERS' RIGHTS
Under the applicable federal laws governing mergers involving national
banks such as HNB, each holder of American Bank Common Stock who objects to the
Merger is entitled to the rights and remedies of dissenting shareholders in
accordance with the applicable provisions of La. R.S. Section 6:376. The
relevant provisions of both federal and state law on dissenters' rights are
attached hereto as Appendix C. However, due to Hibernia's ownership of shares
of American Bank, if dissenters' rights are exercised and perfected with respect
to .10% or more of the outstanding shares of American Bank Common Stock,
Hibernia may abandon the Merger as the transaction may not qualify as a pooling
of interest. See "Rights of Dissenting Shareholders" and "Accounting Treatment"
under "PROPOSED MERGER."
DIFFERENCES IN SHAREHOLDERS' RIGHTS
Upon completion of the Merger, shareholders of American Bank, to the extent
they receive shares of Hibernia Common Stock in the Merger, will become
shareholders of Hibernia and their rights as such will be governed by Hibernia's
Articles of Incorporation and Bylaws. The rights of shareholders of Hibernia
are different in certain respects from the rights of shareholders of American
Bank. See "PROPOSED MERGER -- Certain Differences in Rights of Shareholders."
ACCOUNTING TREATMENT
The parties intend the Merger to be treated as a pooling-of-interests for
financial accounting purposes. If, among other things, holders of more than
approximately .10% of the outstanding shares of American Bank Common Stock
exercise and perfect dissenters' rights, the Merger will not qualify for
pooling-of-interests accounting treatment, and Hibernia will not be obligated to
effect the Merger. See "PROPOSED MERGER -- Accounting Treatment."
14
<PAGE>
SELECTED FINANCIAL INFORMATION OF HIBERNIA
SELECTED FINANCIAL DATA. The closing market price per share of Hibernia
Common Stock on the NYSE on September 16, 1994, the day prior to the
announcement of the proposed Merger, was $8.125. There can be no assurance of
the market price of Hibernia Common Stock on the Closing Date.
The following table sets forth certain restated consolidated information
for Hibernia Corporation. The restated information is derived from the restated
consolidated financial statements of Hibernia Corporation as of December 31,
1993 and its Quarterly Report on Form 10-Q for September 30, 1994. These
financial statements reflect the impact of four mergers consummated in the third
quarter of 1994, two each as of July 1 and August 1, each of which was accounted
for a s a pooling of interests. Pro forma financial information giving effect
to the Merger and other probable mergers is included below under "PRO FORMA
FINANCIAL INFORMATION."
15
<PAGE>
RESTATED HIBERNIA CORPORATION(1)
SELECTED FINANCIAL INFORMATION
<TABLE>
<CAPTION>
9 Months Ended
Year Ended December 31 September 30
---------------------------------------------------- -------------------
Unaudited ($ in thousands, except per share amounts) 1993 1992 1991 1990 1989 1994 1993
--------- -------- -------- -------- -------- -------- --------
<S> <C> <C> <C> <C> <C> <C> <C>
Net interest income $234,064 $234,398 $263,348 $285,614 $238,989 $178,465 $175,997
Income (loss) from continuing operations 55,391 (1,752) (141,367) (17,014) 58,148 61,021 38,999
Per share:
Income (loss) from continuing operations 0.58 (0.04) (3.44) (0.42) 1.46 0.63 0.14
Cash dividends 0.03 -- 0.15 0.90 0.91 0.13 --
Book value 4.91 4.24 5.18 9.52 10.33 5.17 4.62
SELECTED PERIOD-END BALANCES
Debt 23,981 25,710 127,566 123,145 91,077 3,679 24,521
Total assets 5,720,013 5,592,710 6,862,752 8,172,331 7,531,137 5,727,792 5,489,350
</TABLE>
(1) Refer to "PRO FORMA FINANCIAL INFORMATION".
16
<PAGE>
SELECTED FINANCIAL INFORMATION OF AMERICAN BANK
The following selected financial information of American Bank with respect
to each year in the five-year period ended December 31, 1993 and with respect to
the nine-month periods ended September 30, 1994 and 1993, has been derived from
the financial statements of American Bank. The selected financial information
for the nine months ended September 30, 1994 and 1993 is unaudited but, in the
opinion of American Bank management, reflects all adjustments that are necessary
for a fair presentation of the results of operations for the interim periods
presented. Results of operations for the nine-month period ended September 30,
1994 are not necessarily indicative of the results for the entire year. The
information set forth below should be read in conjunction with American Bank's
financial statements, the notes thereto, and "American Bank Management's
Discussion and Analysis of Financial Condition and Results of Operations"
appearing elsewhere in this Proxy Statement-Prospectus.
<TABLE>
<CAPTION>
NINE MONTHS ENDED
SEPTEMBER 30, YEARS ENDED DECEMBER 31,
----------------- -----------------------------------------------
1994 1993 1993 1992 1991 1990 1989
------- ------- ------- ------- ------- ------- -------
<S> <C> <C> <C> <C> <C> <C> <C>
(Dollars in thousands, except per share amounts)
INCOME STATEMENT DATA:
Interest income $ 5,331 $ 5,272 $ 6,613 $ 6,773 $ 6,626 $ 6,663 $ 6,989
Net interest income 3,924 3,733 4,762 4,320 3,003 2,728 2,810
Provision for loan losses (370) - - - 90 200 100
Income before
cumulative effect of
accounting change/extra-
ordinary item 2,339 956 1,211 1,001 367 242 459
Cumulative effect of
accounting change/extra-
ordinary item - 61 50 - 122 - -
Net income 2,339 1,017 1,261 1,001 489 242 459
AVERAGE BALANCE SHEET DATA:
Total assets $93,174 $87,051 $86,873 $84,120 $79,146 $77,503 $80,287
Earning assets 84,985 77,201 78,139 73,469 69,716 67,832 70,981
Loans (net of unearned
discount) 52,994 46,465 46,777 38,468 37,729 39,713 41,059
Deposits 85,000 79,147 78,806 77,370 73,396 71,523 75,067
Shareholders' equity 8,069 6,731 6,892 5,767 4,886 4,676 4,205
</TABLE>
17
<PAGE>
<TABLE>
<CAPTION>
NINE MONTHS ENDED
SEPTEMBER 30, YEARS ENDED DECEMBER 31,
----------------- -------------------------------------
1994 1993 1993 1992 1991 1990 1989
-------- ------- ------ ------ ------ ----- ------
<S> <C> <C> <C> <C> <C> <C> <C>
PER SHARE DATA:
Income before
cumulative effect of
accounting change/extra-
ordinary item $ 4.83 $ 1.98 $ 2.50 $ 2.07 $ .76 $ .50 $ .95
Cumulative effect of
accounting change/extra-
ordinary item - .12 .10 - .24 - -
Net income 4.83 2.10 2.60 2.07 1.00 .50 .95
Cash dividends declared - - .10 - - - -
Book value 19.17 14.88 15.20 12.69 10.62 9.61 9.11
SELECTED RATIOS:
Return on average assets 2.48 1.17 1.45 1.19 .62 .31 .57
Return on average equity 28.98 15.11 18.30 17.36 10.01 5.18 10.92
Equity to average assets 8.56 7.73 7.93 6.86 6.17 6.03 5.24
</TABLE>
18
<PAGE>
PRO FORMA COMBINED SELECTED FINANCIAL INFORMATION
(UNAUDITED)
The following table sets forth certain unaudited pro forma combined financial
information for Hibernia Corporation (on a restated basis, after giving effect
for the mergers of Commercial Bancshares, Inc. and Bastrop National Bank,
consummated on July 1, 1994 and the mergers of First Continental Bancshares,
Inc. and First Bancorp of Louisiana, Inc. consummated on August 1, 1994 [See
Note A to the Pro Forma Combined Financial Statements.]) and American Bank. Year
end information in this table is based on, and should be read in conjunction
with, the restated consolidated financial statements and related notes of
Hibernia Corporation, incorporated into this Proxy Statement - Prospectus by
reference to Hibernia's Current Report on Form 8-K dated October 11, 1994, and
the historical financial statements of American Bank, contained elsewhere in
this Proxy Statement - Prospectus. The interim information in this table is
based on, and should be read in conjunction with, the Quarterly Report on Form
10-Q for September 30, 1994 for Hibernia Corporation, incorporated into this
Proxy Statement - Prospectus by reference and the American Bank interim period
financial statements included in this Proxy Statement - Prospectus. The table
also gives effect to probable mergers with Pioneer Bancshares Corporation, First
State Bank and Trust Company, STABA Bancshares, Inc. and Progressive
Bancorporation, Inc. to which Hibernia Corporation is a party, as discussed in
Notes C through E to the Pro Forma Combined Financial Statements. The pro forma
information, which reflects each of the consummated and probable mergers
using the pooling of interests method of accounting, is presented for
informational purposes only and should not be construed as indicative of the
actual operations that would have occurred had the mergers been consummated at
the beginning of the periods indicated below or which may occur after all the
mergers are consummated. The pro forma information gives effect to the issuance
in each of the periods presented, of 13,021,494 shares of Hibernia Corporation
common stock for all of the outstanding shares of Commercial, Bastrop, First
Continental, and First Bancorp and assumes the issuance of 2,250,000 shares of
Hibernia Corporation common stock for all the outstanding shares of American
Bank, 8,370,512 shares of Hibernia Corporation Common Stock for all the
outstanding shares of Pioneer Bancshares, 3,350,000 shares of Hibernia
Corporation common stock for all the outstanding shares of First State Bank and
Trust Company, 2,250,000 shares of Hibernia Corporation common stock for all the
outstanding shares of STABA Bancshares, Inc. and 2,500,000 shares of Hibernia
Corporation common stock for all the outstanding shares of Progressive
Bancorporation, Inc.
19
<PAGE>
<TABLE>
<CAPTION>
PRO FORMA HIBERNIA CORPORATION*
PRO FORMA COMBINED SELECTED FINANCIAL INFORMATION
Year Ended December 31 9 Months Ended September 30
- ------------------------------------------------------------------------------------------- ---------------------------
Unaudited ($ in thousands, except per
share amounts) 1993 1992 1991 1994 1993
-------------------------------------------- ---------------------------
<S> <C> <C> <C> <C> <C>
Net interest income $ 238,826 $ 238,718 $ 266,351 $ 182,389 $ 179,730
Income (loss) from continuing 56,602 (751) (141,000) 63,360 39,955
operations
Per share:
Income (loss) from continuing
operations 0.57 (0.02) (3.25) 0.64 0.41
Cash dividends 0.03 - 0.15 0.13 -
Book value 4.87 4.20 5.03 5.15 4.59
SELECTED PERIOD-END BALANCES
Debt 23,981 25,710 127,566 3,679 24,521
Total assets 5,814,151 5,678,992 6,945,054 5,820,491 5,576,064
* Includes Hibernia Corporation and American Bank
TOTAL PRO FORMA HIBERNIA CORPORATION**
PRO FORMA COMBINED SELECTED FINANCIAL INFORMATION
Year Ended December 31 9 Months Ended September 30
- ------------------------------------------------------------------------------------------- ---------------------------
Unaudited ($ in thousands, except per
share amounts) 1993 1992 1991 1994 1993
-------------------------------------------- ---------------------------
Net interest income $ 272,402 $ 270,512 $ 291,971 $ 206,755 $ 204,362
Income (loss) from continuing operations 64,916 5,841 (137,634) 71,694 45,663
Per share:
Income (loss) from continuing
operations 0.56 0.10 (2.30) 0.62 0.40
Cash dividends 0.03 - 0.15 0.13 -
Book value 4.70 4.06 4.35 4.96 4.45
SELECTED PERIOD-END BALANCES
Debt 36,809 37,568 141,339 8,591 38,013
Total assets 6,544,448 6,412,025 7,632,827 6,552,223 6,314,109
** Includes Hibernia Corporation, American Bank, Pioneer Bancshares Corporation, First State
Bank and Trust Company, STABA Bancshares, Inc. and Progressive Bancorporation, Inc.
</TABLE>
20
<PAGE>
COMPARATIVE PER SHARE INFORMATION
(UNAUDITED)
The following table sets forth for Hibernia Corporation common stock and
American Bank common stock certain restated, historical unaudited pro forma
combined and unaudited pro forma equivalent per share financial information.
This table is based on and should be read in conjunction with the restated
consolidated financial statements and related notes of Hibernia Corporation,
incorporated by reference into this Proxy Statement - Prospectus, and American
Bank, contained elsewhere in this Proxy Statement - Prospectus. The restated
information reflects the impact of four mergers consummated in the second
quarter of 1994, two each as of July 1 and August 1, each of which was accounted
for as a pooling of interests. The pro forma information, which reflects the
merger with American Bank using the pooling of interests method of accounting,
is presented for informational purposes only and should not be construed as
indicative of the actual operations that would have occurred had the merger been
consummated at the beginning of the periods indicated below or which may occur
after the merger is consummated. The pro forma information gives effect to the
issuance of 2,250,000 shares of Hibernia Corporation common stock for all the
outstanding shares of American Bank, which assumes that each share of American
Bank common stock will be exchanged for 4.65 shares of Hibernia Corporation
common stock. See "Proposed Merger-Terms of the Merger."
21
<PAGE>
HIBERNIA CORPORATION AND AMERICAN BANK
COMPARATIVE PER SHARE INFORMATION
- -------------------------------------------------------------------------------
Unaudited
<TABLE>
<CAPTION>
PRO FORMA
HIBERNIA AMERICAN
RESTATED HISTORICAL CORPORATION BANK
HIBERNIA AMERICAN (WITH AMERICAN PRO FORMA
CORPORATION (1) BANK BANK) (1) EQUIVALENT (2)
---------------------------------------------------------------------
<S> <C> <C> <C> <C>
Income (loss) from continuing operations:
For the nine months ended September 30,
1994 $0.63 $4.83 $0.64 $2.98
1993 0.41 1.98 0.41 1.91
For the year ended December 31,
1993 $0.58 $2.50 $0.57 $2.65
1992 (0.04) 2.07 (0.02) ($0.09)
1991 (3.44) 0.76 (3.25) ($15.11)
Cash dividends:
For the nine months ended September 30,
1994 $0.13 -- $0.13 $0.60
1993 -- -- -- --
For the year ended December 31,
1993 $0.03 $0.10 $0.03 $0.14
1992 -- -- -- --
1991 0.15 -- 0.15 0.70
Book Value:
At September 30, 1994 $5.17 $19.17 $5.15 $23.95
At December 31, 1993 $4.91 $15.20 $4.87 $22.65
</TABLE>
(1) Refer to "PRO FORMA FINANCIAL INFORMATION".
(2) Pro forma equivalent amounts are computed by multiplying the pro forma
combined amount by the American exchange ratio of 4.65.
22
<PAGE>
MEETING INFORMATION
GENERAL
Each copy of this Proxy Statement-Prospectus mailed to holders of
American Bank Common Stock is accompanied by a proxy card furnished in
connection with the solicitation of proxies by American Bank's Board of
Directors for use at the Special Meeting and at any adjournment thereof. This
Proxy Statement-Prospectus and the accompanying proxy card are first being
mailed to shareholders of American Bank on approximately January , 1995. The
Special Meeting is scheduled to be held on February , 1995, at :00 .m.
central time, at the main office of American Bank, 22 Apple Street, Norco,
Louisiana 70079-2214. Only holders of record of American Bank Common Stock at
the close of business on the Record Date are entitled to notice of and to vote
at the Special Meeting.
PURPOSE OF THE SPECIAL MEETING
The purpose of the Special Meeting is to consider and vote upon a
proposal to approve the Agreement between Hibernia and its wholly-owned
subsidiary HNB, on the one hand, and American Bank, on the other. Pursuant to
the Agreement, American Bank will merge with and into HNB and each outstanding
share of American Bank Common Stock will be converted into a number of shares of
Hibernia Common Stock as described below under the heading "PROPOSED MERGER --
Terms of the Merger."
HOLDERS OF AMERICAN BANK COMMON STOCK ARE REQUESTED TO COMPLETE, DATE
AND SIGN THE ACCOMPANYING PROXY CARD AND RETURN IT PROMPTLY IN THE ENCLOSED
POSTAGE-PAID ENVELOPE TO THE HERMAN GROUP, INC., 13760 NOEL ROAD, SUITE 320,
DALLAS, TEXAS 75240.
SOLICITATION; VOTING AND REVOCATION OF PROXIES
When a proxy in the form accompanying this Proxy Statement-Prospectus
is properly executed and returned, the shares voted thereby will be voted in
accordance with the instructions marked thereon. ALL EXECUTED BUT UNMARKED
PROXIES THAT ARE RETURNED WILL BE VOTED "FOR" THE PROPOSAL TO APPROVE THE
AGREEMENT.
No matters are expected to be considered at the Special Meeting other
than the proposal to approve the Agreement, but if any other matters should
properly come before the Special Meeting, it is intended that proxies in the
form accompanying this Proxy Statement-Prospectus will be voted on all such
matters in accordance with the judgment of the person(s) voting such proxies.
23
<PAGE>
Any proxy may be revoked at any time before it is voted. A
shareholder may revoke a proxy: (i) by submitting a subsequently dated proxy;
(ii) by giving written notice of such revocation to the Secretary of American
Bank, provided that such notice is received by such Secretary at the principal
offices of American Bank prior to the date of the Special Meeting, or (iii) upon
request, if such shareholder is present at the Special Meeting and advises the
inspector(s) of election that he is revoking a proxy. Mere attendance at the
Special Meeting will not of itself revoke a previously submitted proxy.
Revocation of a proxy will not affect a vote on any matter taken prior to
receipt of such revocation.
The cost of soliciting these proxies, including any and all
professional fees paid to attorneys and accountants in connection with the
preparation and filing with the Commission of this Proxy Statement-Prospectus
and other proxy materials, and the cost of printing and mailing these proxy
materials, will be borne by American Bank. In addition to the use of the mails,
proxies may be solicited personally, by telephone, telecopier, or telegram by
directors, officers and employees of American Bank. Such officers, directors
and employees will continue to receive any compensation from American Bank to
which they are entitled by virtue of their employment or status as an officer or
director, but will not receive any additional fee, compensation, or other
remuneration for soliciting proxies in connection with the Special Meeting. An
outside solicitation firm, The Herman Group, Inc., has been retained by American
Bank to assist in the solicitation of proxies for an aggregate fee of $4,000
plus out-of-pocket expenses.
AMERICAN BANK SHAREHOLDERS SHOULD NOT FORWARD ANY STOCK CERTIFICATES
WITH THEIR PROXY CARDS. IF THE MERGER IS CONSUMMATED, SHAREHOLDERS OF AMERICAN
BANK WILL RECEIVE INSTRUCTIONS REGARDING THE EXCHANGE OF THEIR AMERICAN BANK
STOCK CERTIFICATES FOR CERTIFICATES REPRESENTING HIBERNIA COMMON STOCK.
SHARES ENTITLED TO VOTE; QUORUM; VOTE REQUIRED
The Board of Directors of American Bank has fixed the close of
business on December 30, 1994, as the record date for the determination of
shareholders entitled to notice of and to vote at the Special Meeting. As of the
Record Date, there were 483,686 shares of American Bank Common Stock
outstanding. Each share of American Bank Common Stock is entitled to one vote on
all matters to come before the Special Meeting. With respect to all matters to
come before the Special Meeting, the presence at the Special Meeting, in person
or by proxy, of the holders of a majority of the outstanding shares of American
Bank Common Stock is necessary to constitute a quorum. For these purposes,
shares of American Bank Common Stock which are present in person or represented
by proxy at the Special Meeting will be counted for quorum purposes regardless
whether the holder of the shares or proxy actually votes on the Merger or
whether a broker with discretionary authority fails to
24
<PAGE>
exercise its discretionary voting authority with respect to the Merger.
Accordingly, an "abstention" will be considered present for quorum purposes, but
will have the same effect as a vote "against" the proposal as to which the
abstention is made. The Agreement must be approved at the Special Meeting by
the affirmative vote of the holders of at least two-thirds of the outstanding
shares of American Bank Common Stock.
As a condition to the consummation of the Merger, each shareholder of
American Bank who is also a director of American Bank is required to execute
prior to the Merger an agreement pursuant to which such shareholder, among other
things, commits to vote in favor of the approval of the Agreement, unless he is
prohibited by law from voting in favor of the Agreement in the opinion of his
counsel. The nine persons who have executed or will execute such agreements
beneficially owned, as of the Record Date, an aggregate of 92,328 shares, or
approximately 19.09%, of the outstanding American Bank Common Stock on that
date. Additionally, Hibernia and HNB beneficially owned, as of the Record Date,
an aggregate of 47,763 shares, or approximately 9.87%, of the outstanding
American Bank Common Stock on that date. As a condition to consummation of the
Merger, Hibernia and HNB have agreed to vote their shares in favor of the
approval of the Agreement.
Under Louisiana law, shareholders of Hibernia are not required to
approve the Agreement.
RECOMMENDATION OF AMERICAN BANK'S BOARD OF DIRECTORS
American Bank's Board of Directors has unanimously approved the Merger
and the Agreement and unanimously recommends that American Bank's shareholders
vote FOR approval of the Merger and the Agreement. See "PROPOSED MERGER --
Background of and Reasons for the Merger" and "-- Opinion of Financial Advisor."
OTHER MATTERS
The Board of Directors of American Bank is not aware of any business
to be acted upon at the Special Meeting other than consideration of the Merger
and the Agreement. If, however, other matters are properly brought before the
Special Meeting, or any adjournment thereof, the persons appointed as proxies
will have discretion to vote or abstain from voting thereon according to their
best judgment.
25
<PAGE>
PRO FORMA FINANCIAL INFORMATION
The following pro forma financial statements reflect Hibernia's
pending mergers as described in its public reports and press releases, giving
effect to the assumptions and adjustments described in the accompanying notes.
The information in the column titled "Historical Hibernia Corporation"
on the Pro Forma Combined Balance Sheet and Pro Forma Combined Statements of
Income are summarized from Hibernia's Quarterly Report on Form 10-Q for the
quarter ended September 30, 1994. The information in the column titled
"Restated Hibernia Corporation" on the Pro Forma Combined Statements is
summarized from the supplemental consolidated financial statements of Hibernia
filed on the Current Report on Form 8-K dated October 11, 1994, which reflects
four mergers consummated in the third quarter of 1994, and its Quarter Report on
Form 10-Q for the quarter ended September 30, 1994. The information contained
in the columns titled "Pioneer Bancshares Corporation", "First State Bank and
Trust Company", "American Bank", "STABA Bancshares", and "Progressive
Bancorporation" are based on December 31, 1993, 1992 and 1991 audited financial
statements of those entities and unaudited financial statements of those
entities for the quarters ended September 30, 1994 and 1993. The pro forma
financial statements do not purport to be indicative of the results that
actually would have been obtained if the pending transactions had occurred on
the dates indicated or that may be obtained in the future.
On June 1, 1994, Hibernia signed an agreement and plan of merger with
Pioneer Bancshares Corporation ("Pioneer"), a bank holding company headquartered
in Shreveport, Louisiana, that owns Pioneer Bank & Trust Company, headquartered
in Shreveport, Louisiana. At June 30, 1994, Pioneer reported consolidated
assets of $362 million, shareholders' equity of $29.8 million and operated 12
banking branches in Caddo Parish, Louisiana. The terms of the merger provide
that Hibernia will issue 8,370,511 shares of Hibernia Common Stock for all of
the outstanding shares of Pioneer. If the average market price of Hibernia
Common Stock is less than $7.50, each Pioneer shareholder would receive that
number of shares of Hibernia Common Stock equal to the number of shares of
Pioneer stock held by each shareholder multiplied by the quotient of (a)
$62,779,000 divided by the average market price of Hibernia Common Stock, (b)
divided by the number of issued and outstanding shares of Pioneer stock. If the
average market price of Hibernia Common Stock is greater than $9.50, each
Pioneer shareholder would receive that number of shares of Hibernia Common Stock
equal to the number of shares of Pioneer stock held by each shareholder
multiplied by the quotient of (a) $72,500,000 divided by the average market
price of Hibernia Common Stock, (b) divided by the number of issued and
outstanding shares of Pioneer stock. The transaction will be
26
<PAGE>
accounted for as a pooling-of-interests.
On August 16, 1994, Hibernia announced that it had executed an
agreement and plan of merger with First State Bank and Trust Company, a
Louisiana banking association headquartered in Bogalusa, Louisiana ("First
State"). First State operates five branches in Washington Parish (three in
Bogalusa and one each in Franklinton and Varnado) and two branches in St.
Tammany Parish (one each in Mandeville and Covington) and, as of September 30,
1994, had $149 million in assets and $20 million in shareholders' equity. The
terms of the merger provide that shareholders of First State will receive an
aggregate of 3,350,000 shares of Hibernia Common Stock in the merger, unless the
average market price of Hibernia Common Stock as of the closing is less than
$7.75 (in which case they would receive in the aggregate Hibernia shares valued
at $25,962,500) or more than $9.75 per share (in which case they would receive
in the aggregate Hibernia shares valued at $32,662,500).
On November 16, 1994, Hibernia announced that it had executed an
agreement and plan of merger with STABA Bancshares, Inc., a Louisiana
corporation which owns all of the stock of State Bank and Trust Company, a
Louisiana banking association headquartered in Donaldsonville, Louisiana
("STABA"). The terms of the merger provide that shareholders of STABA will
receive a number of shares of Hibernia Common Stock, the aggregate market value
of which is $18 million in the merger. The number of shares to be exchanged
will depend upon the average market price of Hibernia Common Stock as of the
closing of this merger.
On December 1, 1994, Hibernia announced that it had executed an
agreement and plan of merger with Progressive Bancorporation, Inc, a Louisiana
corporation ("Progressive") and the parent company of Progressive Bank & Trust
Company, a Louisiana banking association headquartered in Houma, Louisiana. The
terms of the merger provide that shareholders of Progressive will receive an
aggregate of 2,500,000 shares of Hibernia Common Stock in the merger, regardless
of the market price of Hibernia Common Stock at the closing of the merger.
The mergers with First State, Pioneer, STABA and Progressive are
subject to the satisfaction of certain conditions similar to those described
herein with regard to the Merger. There can be no assurance that either of
these proposed mergers will occur, or that the timing of the consummation of
those mergers will be as assumed in the Pro Forma Financial Statements.
27
<PAGE>
PRO FORMA COMBINED BALANCE SHEET
(UNAUDITED)
The following unaudited pro forma combined balance sheet combines the historical
balance sheet of Hibernia Corporation and the historical balance sheet of
American Bank as if the merger had been effective on September 30, 1994. This
unaudited pro forma combined balance sheet should be read in conjunction with
the audited restated consolidated financial statements and related notes of
Hibernia Corporation, incorporated by reference into this Proxy Statement -
Prospectus by reference to Hibernia's Current Report on Form 8-K dated October
11, 1994, and American Bank, contained elsewhere in this Proxy Statement -
Prospectus. The unaudited pro forma combined balance sheet also gives effect to
other probable mergers, to which Hibernia Corporation is a party, as discussed
in Notes C through E of the pro forma combined financial statements. These
mergers include Pioneer Bancshares Corporation, First State Bank and Trust
Company, STABA Bancshares, Inc. and Progressive Bancorporation, Inc. Each
merger has been included in the pro forma combined balance sheet as if the
merger had been effective on September 30, 1994.
28
<PAGE>
<TABLE>
<CAPTION>
HIBERNIA CORPORATION
PRO FORMA COMBINED BALANCE SHEET
September 30, 1994
- ----------------------------------------------------------------------------------------------
HISTORICAL PRO PRO FORMA PIONEER
HIBERNIA AMERICAN FORMA HIBERNIA BANCSHARES,
Unaudited ($ in thousands) CORPORATION BANK ADJ. CORPORATION CORPORATION
- -----------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C> <C>
ASSETS
Cash and due from banks $ 270,340 $ 4,373 $ 274,713 $ 16,055
Interest-bearing time
deposits in domestic
banks -- 128 128 3,846
Short-term investments 69,749 3,400 73,149 1,479
Securities available for
sale 529,389 16,630 546,019 45,913
Securities held to
maturity 1,632,539 10,481 1,643,020 130,750
Loans, net of unearned
income 3,081,362 54,362 3,135,724 145,501
Reserve for possible
loan losses (150,178) (715) (150,893) (2,682)
- -----------------------------------------------------------------------------------------------
Loans, net 2,931,184 53,647 -- 2,984,831 142,819
- -----------------------------------------------------------------------------------------------
Bank premises and
equipment 100,448 2,537 102,985 7,265
Customers' acceptance
liability 9,750 -- 9,750 --
Receivables arising from
securities transactions
not yet settled 16,737 -- 16,737 --
Other assets 167,656 1,503 169,159 6,241
- -----------------------------------------------------------------------------------------------
TOTAL ASSETS $5,727,792 $92,699 -- $5,820,491 $354,368
===============================================================================================
LIABILITIES
Deposits:
Demand,
noninterest-bearing $ 882,120 $13,948 $ 896,068 $ 73,194
Interest-bearing 4,070,271 68,296 4,138,567 241,387
- -----------------------------------------------------------------------------------------------
Total Deposits 4,952,391 82,244 -- 5,034,635 314,581
- -----------------------------------------------------------------------------------------------
Federal funds purchased
and securities sold
under agreements to
repurchase 137,632 248 137,880 3,948
Liability on acceptances 9,750 -- 9,750 --
Payables arising from 16,413 -- 16,413 --
securities transactions
not yet settled
Other liabilities 107,641 929 108,570 3,170
Debt 3,679 -- 3,679 2,071
- -----------------------------------------------------------------------------------------------
TOTAL LIABILITIES 5,227,506 83,421 -- 5,310,927 323,770
- -----------------------------------------------------------------------------------------------
SHAREHOLDERS' EQUITY
Preferred Stock -- -- -- --
Common Stock 186,096 484 $ 3,836 (B) 190,416 2,880
Surplus 392,282 3,516 (3,836) (B) 391,962 6,742
Retained earnings
(deficit) (63,011) 5,694 (57,317) 22,198
Treasury Stock (1,620) -- (1,620) (813)
Unrealized gain (loss)
on securities available
for sale (13,461) (416) (13,877) (409)
- -----------------------------------------------------------------------------------------------
TOTAL SHAREHOLDERS'
EQUITY 500,286 9,278 -- 509,564 30,598
- -----------------------------------------------------------------------------------------------
TOTAL LIABILITIES
AND SHAREHOLDERS'
EQUITY $5,727,792 $92,699 -- $5,820,491 $354,368
===============================================================================================
FIRST (E)
STATE TOTAL
BANK AND STABA PROGRESSIVE PRO FORMA
TRUST BANCSHARES, BANCORPORATION, PRO FORMA HIBERNIA
COMPANY INC. INC. ADJUSTMENTS CORPORATION
- --------------------------------------------------------------------------------------------------------
<C> <C> <C> <C> <C>
ASSETS
Cash and due from banks $ 6,555 $ 4,778 $ 6,256 $ 308,357
Interest-bearing time
deposits in domestic
banks -- 986 -- 4,960
Short-term investments 6,900 2,281 -- ($3,363)(C) 78,345
(2,101)(D)
Securities available for
sale -- 20,834 28,271 641,037
Securities held to
maturity 82,433 18,346 24,610 1,899,159
Loans, net of unearned
income 49,994 47,698 77,030 (3,185)(D) 3,452,762
Reserve for possible
loan losses (1,133) (1,036) (1,192) (156,936)
- -------------------------------------------------------------------------------------------------------
Loans, net 48,861 46,662 75,838 (3,185) 3,295,826
- -------------------------------------------------------------------------------------------------------
Bank premises and
equipment 1,432 2,010 2,797 116,489
Customers' acceptance
liability -- -- -- 9,750
Receivables arising from
securities transactions
not yet settled -- -- -- 16,737
Other assets 2,800 1,490 1,873 181,563
- -------------------------------------------------------------------------------------------------------
TOTAL ASSETS $148,981 $97,387 $139,645 ($8,649) $6,552,223
=======================================================================================================
LIABILITIES
Deposits:
Demand,
noninterest-bearing $ 23,365 $14,515 $ 20,146 $1,027,288
Interest-bearing 104,023 74,887 99,159 4,658,023
- -------------------------------------------------------------------------------------------------------
Total Deposits 127,388 89,402 119,305 -- 5,685,311
- -------------------------------------------------------------------------------------------------------
Federal funds purchased
and securities sold
under agreements to
repurchase -- -- -- 141,828
Liability on acceptances -- -- -- 9,750
Payables arising from
securities transactions
not yet settled -- -- -- 16,413
Other liabilities 1,299 292 4,183 ($30)(D) 117,484
Debt -- -- 8,097 (5,256)(D) 8,591
- -------------------------------------------------------------------------------------------------------
TOTAL LIABILITIES 128,687 89,694 131,585 (5,286) 5,979,377
- -------------------------------------------------------------------------------------------------------
SHAREHOLDERS' EQUITY
Preferred Stock -- -- 130 (130)(C) --
Common Stock 1,000 152 65 27,526 (C) 222,039
Surplus 8,000 3,176 2,016 (28,363)(C) 380,300
(3,233)(C)
Retained earnings
(deficit) 11,294 4,646 6,432 (12,747)
Treasury Stock -- -- (24) 837 (C) (1,620)
Unrealized gain (loss)
on securities available
for sale -- (281) (559) (15,126)
- -------------------------------------------------------------------------------------------------------
TOTAL SHAREHOLDERS'
EQUITY 20,294 7,693 8,060 (3,363) 572,846
- -------------------------------------------------------------------------------------------------------
TOTAL LIABILITIES
AND SHAREHOLDERS'
EQUITY $148,981 $97,387 $139,645 ($8,649) $6,552,223
=======================================================================================================
</TABLE>
29
<PAGE>
PRO FORMA COMBINED STATEMENTS OF INCOME
(UNAUDITED)
The following unaudited pro forma combined statements of income for the nine
months ended September 30, 1994 and 1993, and the years ended December 31, 1993,
1992, and 1991 combines the historical and restated statements of income of
Hibernia Corporation and the historical statements of income of American Bank as
if the merger had been effective on January 1, 1991. These unaudited pro forma
combined statements of income should be read in conjunction with the audited
restated consolidated financial statements and related notes of Hibernia, filed
in Hibernia's Current Report on Form 8-K dated October 11, 1994, incorporated by
reference into this Proxy Statement - Prospectus, and the historical financial
statements and related notes of American Bank, contained elsewhere in this Proxy
Statement - Prospectus. The cost associated with the merger, estimated to be
approximately $ will be accounted for as a current period expense
upon consummation of the merger and has not been reflected in the pro forma
combined statements of income. The restated statements of income reflect the
impact of four mergers consummated in the second quarter of 1994 as discussed in
Note A. The unaudited pro forma combined statements of income also give effect
to other probable mergers, to which Hibernia Corporation is a party, as
discussed in Notes C through E to the pro forma combined financial statements.
These mergers include Pioneer Bancshares Corporation, First State Bank and Trust
Company, STABA Bancshares, Inc. and Progressive Bancorporation, Inc. Each bank
has been included in the pro forma combined statements of income as though the
merger had been effective on January 1, 1991.
30
<PAGE>
<TABLE>
<CAPTION>
HIBERNIA CORPORATION
PRO FORMA COMBINED STATEMENT OF INCOME
Nine Months Ended September 30, 1994
- ----------------------------------------------------------------------------------------------
HISTORICAL PRO FORMA PIONEER
Unaudited ($ in thousands, HIBERNIA AMERICAN HIBERNIA BANCSHARES
except per share data) CORPORATION BANK CORPORATION CORPORATION
- -----------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C>
INTEREST INCOME
Interest and fees on
loans $ 180,138 $ 3,972 $ 184,110 $ 10,411
Interest on securities:
U.S. government
securities and
obligations of
U.S. government
agencies 95,870 1,101 96,971 6,515
Obligations of states
and political
subdivisions 846 75 921 7
Trading account interest 20 -- 20 --
Interest on time deposits
in domestic banks -- 4 4 91
Interest on federal funds
sold and securities
purchased under
agreements to resell 4,222 179 4,401 164
- -----------------------------------------------------------------------------------------------
TOTAL INTEREST INCOME 281,096 5,331 286,427 17,188
- -----------------------------------------------------------------------------------------------
INTEREST EXPENSE
Interest on deposits 96,833 1,379 98,212 5,086
Interest on federal funds
purchased and securities
sold under agreements
to repurchase 3,935 -- 3,935 56
Interest on debt and other 1,863 28 1,891 223
- -----------------------------------------------------------------------------------------------
TOTAL INTEREST EXPENSE 102,631 1,407 104,038 5,365
- -----------------------------------------------------------------------------------------------
NET INTEREST INCOME 178,465 3,924 182,389 11,823
Provision for possible
loan losses (17,480) (370) (17,850) 125
- -----------------------------------------------------------------------------------------------
NET INTEREST INCOME AFTER
PROVISION FOR POSSIBLE
LOAN LOSSES 195,945 4,294 200,239 11,698
- -----------------------------------------------------------------------------------------------
NONINTEREST INCOME
Trust fees 9,463 -- 9,463 --
Service charges on
deposits 28,692 473 29,165 2,102
Other service, collection
and exchange charges 14,458 91 14,549 1,769
Other operating income 7,356 861 8,217 614
Securities gains
(losses), net (1,517) 750 (767) (3)
- -----------------------------------------------------------------------------------------------
TOTAL NONINTEREST
INCOME 58,452 2,175 60,627 4,482
- -----------------------------------------------------------------------------------------------
NONINTEREST EXPENSE
Salaries and employee
benefits 81,330 1,329 82,659 5,789
Occupancy expense, net 16,963 406 17,369 888
Equipment expense 9,638 78 9,716 639
Data processing expense 14,485 470 14,955 119
Foreclosed property
expense (5,191) 15 (5,176) 133
Amortization of
intangibles 20,476 -- 20,476 39
Other operating
expense 53,151 709 53,860 3,337
- -----------------------------------------------------------------------------------------------
TOTAL NONINTEREST
EXPENSE 190,852 3,007 193,859 10,944
- -----------------------------------------------------------------------------------------------
INCOME BEFORE INCOME
TAXES 63,545 3,462 67,007 5,236
Income tax expense 2,524 1,123 3,647 1,786
- -----------------------------------------------------------------------------------------------
INCOME FROM CONTINUING
OPERATIONS $ 61,021 $2,339 $ 63,360 $ 3,450
===============================================================================================
PRO FORMA WEIGHTED
AVERAGE COMMON SHARES 96,728,744 2,250,000 98,978,744 8,370,512
===============================================================================================
PRO FORMA INCOME
PER COMMON SHARE
FROM CONTINUING
OPERATIONS $0.63 $0.64
===============================================================================================
- ----------------------------------------------------------------------------------------------
(E)
FIRST STATE TOTAL
BANK AND STABA PROGRESSIVE PRO FORMA
Unaudited ($ in thousands, TRUST BANCSHARES, BANCORPORATION, HIBERNIA
except per share data) COMPANY INC. INC. CORPORATION
- -----------------------------------------------------------------------------------------------
<C> <C> <C> <C>
INTEREST INCOME
Interest and fees on
loans $3,366 $3,106 $5,654 $206,647
Interest on securities:
U.S. government
securities and
obligations of
U.S. government
agencies 3,260 1,524 2,121 110,391
Obligations of states
and political
subdivisions 9 229 557 1,723
Trading account interest -- -- -- 20
Interest on time deposits
in domestic banks -- 30 104 229
Interest on federal funds
sold and securities
purchased under
agreements to resell 187 72 -- 4,824
- ---------------------------------------------------------------------------------------------
TOTAL INTEREST INCOME 6,822 4,961 8,436 323,834
- ---------------------------------------------------------------------------------------------
INTEREST EXPENSE
Interest on deposits 2,570 1,747 2,861 110,476
Interest on federal funds
purchased and securities
sold under agreements
to repurchase -- 8 13 4,012
Interest on debt and other -- -- 477 2,591
- ---------------------------------------------------------------------------------------------
TOTAL INTEREST EXPENSE 2,570 1,755 3,351 117,079
- ---------------------------------------------------------------------------------------------
NET INTEREST INCOME 4,252 3,206 5,085 206,755
Provision for possible
loan losses 124 150 (722) (18,173)
- ---------------------------------------------------------------------------------------------
NET INTEREST INCOME AFTER
PROVISION FOR POSSIBLE
LOAN LOSSES 4,128 3,056 5,807 224,928
- ---------------------------------------------------------------------------------------------
NONINTEREST INCOME
Trust fees 3 -- -- 9,466
Service charges on
deposits 533 348 709 32,857
Other service, collection
and exchange charges 216 45 369 16,948
Other operating income 68 94 783 9,776
Securities gains
(losses), net -- 26 624 (120)
- ---------------------------------------------------------------------------------------------
TOTAL NONINTEREST
INCOME 820 513 2,485 68,927
- ---------------------------------------------------------------------------------------------
NONINTEREST EXPENSE
Salaries and employee
benefits 1,640 866 1,769 92,723
Occupancy expense, net 517 131 288 19,193
Equipment expense 142 315 169 10,981
Data processing expense 128 16 117 15,335
Foreclosed property
expense 1 -- 141 (4,901)
Amortization of
intangibles -- -- 89 20,604
Other operating
expense 606 717 1,436 59,956
- ---------------------------------------------------------------------------------------------
TOTAL NONINTEREST
EXPENSE 3,034 2,045 4,009 213,891
- ---------------------------------------------------------------------------------------------
INCOME BEFORE INCOME
TAXES 1,914 1,524 4,283 79,964
Income tax expense 952 517 1,368 8,270
- ---------------------------------------------------------------------------------------------
INCOME FROM CONTINUING
OPERATIONS $962 $1,007 $2,915 $ 71,694
=============================================================================================
PRO FORMA WEIGHTED
AVERAGE COMMON SHARES 3,350,000 2,250,000 2,500,000 115,449,256
=============================================================================================
PRO FORMA INCOME
PER COMMON SHARE
FROM CONTINUING
OPERATIONS $0.62
=============================================================================================
</TABLE>
See notes to Pro Forma Combined Financial Statements.
31
<PAGE>
<TABLE>
<CAPTION>
HIBERNIA CORPORATION
PRO FORMA COMBINED STATEMENT OF INCOME
NINE MONTHS ENDED SEPTEMBER 30, 1993
- ------------------------------------------------------------------------------------------------------------------------------------
(A)
RESTATED PRO FORMA PIONEER
HIBERNIA AMERICAN HIBERNIA BANCSHARES
Unaudited ($ in thousands, except per share data) CORPORATION BANK CORPORATION CORPORATION
-----------------------------------------------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C>
INTEREST INCOME
Interest and fees on loans $167,064 $3,755 $170,819 $10,707
Interest on securities:
U.S. government securities and obligations of
U.S. government agencies 96,220 1,407 97,627 6,917
Obligations of states and political subdivisions 855 11 866 8
Trading account interest 24 -- 24 --
Interest on time deposits in domestic banks 188 4 192 173
Interest on federal funds sold and securities
purchased under agreements to resell 7,780 95 7,875 159
- ------------------------------------------------------------------------------------------------------------------------------------
TOTAL INTEREST INCOME 272,131 5,272 277,403 17,964
- ------------------------------------------------------------------------------------------------------------------------------------
Interest Expense
Interest on deposits 91,187 1,415 92,602 4,990
Interest on federal funds purchased and
securities sold under agreements to repurchase 2,944 1 2,945 4
Interest on debt and other 2,003 123 2,126 709
- ------------------------------------------------------------------------------------------------------------------------------------
TOTAL INTEREST EXPENSE 96,134 1,539 97,673 5,703
- ------------------------------------------------------------------------------------------------------------------------------------
NET INTEREST INCOME 175,997 3,733 179,730 12,261
Provision for possible loan losses 11,983 -- 11,983 1,309
- ------------------------------------------------------------------------------------------------------------------------------------
NET INTEREST INCOME AFTER PROVISION FOR
POSSIBLE LOAN LOSSES 164,014 3,733 167,747 10,952
- ------------------------------------------------------------------------------------------------------------------------------------
NONINTEREST INCOME
Trust fees 9,851 -- 9,851 --
Service charges on deposits 26,148 484 26,632 2,309
Other service, collection and exchange charges 12,270 78 12,348 1,656
Other operating income 7,724 88 7,812 547
Securities gains (losses), net 100 5 105 (73)
- ------------------------------------------------------------------------------------------------------------------------------------
TOTAL NONINTEREST INCOME 56,093 655 56,748 4,439
- ------------------------------------------------------------------------------------------------------------------------------------
NONINTEREST EXPENSE
Salaries and employee benefits 72,837 1,313 74,150 5,669
Occupancy expense, net 16,532 358 16,890 1,113
Equipment expense 9,369 55 9,424 569
Data processing expense 12,755 399 13,154 285
Foreclosed property expense 5,883 27 5,910 811
Amortization of intangibles 6,119 -- 6,119 52
Other operating expense 53,278 842 54,120 3,063
- ------------------------------------------------------------------------------------------------------------------------------------
TOTAL NONINTEREST INCOME 176,773 2,994 179,767 11,562
- ------------------------------------------------------------------------------------------------------------------------------------
INCOME BEFORE INCOME TAXES AND
EXTRAORDINARY ITEMS 43,334 1,394 44,728 3,829
Income tax expense 4,335 438 4,773 1,329
- ------------------------------------------------------------------------------------------------------------------------------------
INCOME FROM CONTINUING OPERATIONS $38,999 $956 $39,955 $2,500
====================================================================================================================================
PRO FORMA WEIGHTED AVERAGE COMMON SHARES 96,055,341 2,250,000 98,305,341 8,370,512
====================================================================================================================================
PRO FORMA INCOME PER COMMON SHARE
FROM CONTINUING OPERATIONS(F) $0.41 $0.41
====================================================================================================================================
</TABLE>
<TABLE>
<CAPTION>
- ---------------------------------------------------------------------------------------------------------------------------------
FIRST STATE TOTAL
BANK AND STABA PROGRESSIVE PRO FORMA
TRUST BANCSHARES, BANCORPORATION HIBERNIA
Unaudited ($ in thousands, except per share data) COMPANY INC. INC. CORPORATION
- ---------------------------------------------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C>
INTEREST INCOME $3,459 $2,398 $5,561 $193,484
Interest and fees on loans
Interest on securities:
U.S. government securities and obligations of
U.S. government agencies 3,879 1,571 2,387 112,381
Obligations of states and political subdivisions 23 226 420 1,543
Trading account interest -- -- -- 24
Interest on time deposits in domestic banks -- 60 71 496
Interest on federal funds sold and securities
purchased under agreements to resell 110 149 -- 8,293
- ------------------------------------------------------------------------------------------------------------------------------------
TOTAL INTEREST INCOME 7,471 4,944 8,439 316,221
- ------------------------------------------------------------------------------------------------------------------------------------
INTEREST EXPENSE
Interest on deposits 2,839 1,933 2,986 105,350
Interest on federal funds purchased and
securities sold under agreements to repurchase -- -- 19 2,968
Interest on debt and other -- -- 706 3,541
- ------------------------------------------------------------------------------------------------------------------------------------
TOTAL INTEREST EXPENSE 2,839 1,933 3,711 111,859
- ------------------------------------------------------------------------------------------------------------------------------------
NET INTEREST INCOME 4,632 3,011 4,728 204,362
Provision for possible loan losses 964 180 168 14,604
- ------------------------------------------------------------------------------------------------------------------------------------
NET INTEREST INCOME AFTER PROVISION FOR
POSSIBLE LOAN LOSSES 3,668 2,831 4,560 189,758
- ------------------------------------------------------------------------------------------------------------------------------------
NONINTEREST INCOME
Trust fees 3 -- -- 9,854
Service charges on deposits 529 290 577 30,337
Other service, collection and exchange charges 209 47 266 14,526
Other operating income 265 91 346 9,061
Securities gains (losses), net -- -- 75 107
- ------------------------------------------------------------------------------------------------------------------------------------
TOTAL NONINTEREST INCOME 1,006 428 1,264 63,885
- ------------------------------------------------------------------------------------------------------------------------------------
NONINTEREST EXPENSE
Salaries and employee benefits 1,226 781 1,537 83,363
Occupancy expense, net 562 112 239 18,916
Equipment expense 120 262 89 10,464
Data processing expense 112 18 162 13,731
Foreclosed property expense 6 -- (70) 6,657
Amortization of intangibles -- -- 89 6,260
Other operating expense 592 673 1,954 60,402
- ------------------------------------------------------------------------------------------------------------------------------------
TOTAL NONINTEREST EXPENSE 2,618 1,846 4,000 199,793
- ------------------------------------------------------------------------------------------------------------------------------------
INCOME BEFORE INCOME TAXES AND
EXTRAORDINARY ITEMS 2,056 1,413 1,824 53,850
Income tax expense 975 420 690 8,187
- ------------------------------------------------------------------------------------------------------------------------------------
INCOME FROM CONTINUING OPERATIONS $1,081 $993 $1,134 $45,663
====================================================================================================================================
PRO FORMA WEIGHTED AVERAGE COMMON SHARES 3,350,000 2,250,000 2,500,000 114,775,853
====================================================================================================================================
PRO FORMA INCOME PER COMMON SHARE
FROM CONTINUING OPERATIONS(F) $0.40
====================================================================================================================================
See notes to Pro Forma Combined Financial Statements.
</TABLE>
32
<PAGE>
<TABLE>
<CAPTION>
HIBERNIA CORPORATION
PRO FORMA COMBINED STATEMENT OF INCOME
YEAR ENDED DECEMBER 31, 1993
- ------------------------------------------------------------------------------------------------------------------------------------
(A)
RESTATED PRO FORMA PIONEER
HIBERNIA AMERICAN HIBERNIA BANCSHARES
Unaudited ($ in thousands, except per share data) CORPORATION BANK CORPORATION CORPORATION
-----------------------------------------------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C>
INTEREST INCOME
Interest and fees on loans $224,146 $4,705 $228,851 $14,704
Interest on securities:
U.S. government securities and obligations of
U.S. government agencies 126,820 1,756 128,576 8,980
Obligations of states and political subdivisions 1,222 21 1,243 86
Trading account interest 33 -- 33 --
Interest on time deposits in domestic banks 295 6 301 255
Interest on federal funds sold and securities
purchased under agreements to resell 9,219 125 9,344 217
- ------------------------------------------------------------------------------------------------------------------------------------
TOTAL INTEREST INCOME 361,735 6,613 368,348 24,242
- ------------------------------------------------------------------------------------------------------------------------------------
INTEREST EXPENSE
Interest on deposits 121,000 1,851 122,851 6,597
Interest on federal funds purchased and
securities sold under agreements to repurchase 4,002 -- 4,002 14
Interest on debt and other 2,669 -- 2,669 949
- ------------------------------------------------------------------------------------------------------------------------------------
TOTAL INTEREST EXPENSE 127,671 1,851 129,522 7,560
- ------------------------------------------------------------------------------------------------------------------------------------
NET INTEREST INCOME 234,064 4,762 238,826 16,682
Provision for possible loan losses (5,607) -- (5,607) 1,509
- ------------------------------------------------------------------------------------------------------------------------------------
NET INTEREST INCOME AFTER PROVISION FOR
POSSIBLE LOAN LOSSES 239,671 4,762 244,433 15,173
- ------------------------------------------------------------------------------------------------------------------------------------
NONINTEREST INCOME
Trust fees 13,310 -- 13,310 --
Service charges on deposits 34,937 625 35,562 2,965
Other service, collection and exchange charges 17,367 92 17,459 2,290
Gain on settlement of acquired loans 1,308 -- 1,308 --
Other operating income 7,326 463 7,789 474
Securities gains (losses), net 165 5 170 (73)
- ------------------------------------------------------------------------------------------------------------------------------------
TOTAL NONINTEREST INCOME 74,413 1,185 75,598 5,656
- ------------------------------------------------------------------------------------------------------------------------------------
NONINTEREST EXPENSE
Salaries and employee benefits 98,517 1,559 100,076 7,524
Occupancy expense, net 22,757 285 23,042 1,240
Equipment expense 12,577 282 12,859 751
Data processing expense 16,753 534 17,287 186
Foreclosed property expense 7,135 587 7,722 723
Provision for data processing enhancements 11,991 -- 11,991 --
Other operating expense 83,604 981 84,585 4,740
- ------------------------------------------------------------------------------------------------------------------------------------
TOTAL NONINTEREST EXPENSE 253,334 4,228 257,562 15,164
- ------------------------------------------------------------------------------------------------------------------------------------
INCOME BEFORE INCOME TAXES,
EXTRAORDINARY ITEM AND CUMULATIVE EFFECT
OF ACCOUNTING CHANGE 60,750 1,719 62,469 5,665
Income tax expense 5,359 508 5,867 1,975
- ------------------------------------------------------------------------------------------------------------------------------------
INCOME FROM CONTINUING OPERATIONS $55,391 $1,211 $56,602 $3,690
====================================================================================================================================
PRO FORMA WEIGHTED AVERAGE COMMON SHARES 96,196,623 2,250,000 98,446,623 8,370,512
====================================================================================================================================
PRO FORMA INCOME PER COMMON SHARE
FROM CONTINUING OPERATIONS(F) $0.58 $0.57
====================================================================================================================================
</TABLE>
<TABLE>
<CAPTION>
- ---------------------------------------------------------------------------------------------------------------------------------
FIRST STATE TOTAL
BANK AND STABA PROGRESSIVE PRO FORMA
TRUST BANCSHARES, BANCORPORATION, HIBERNIA
Unaudited ($ in thousands, except per share data) COMPANY INC. INC. CORPORATION
- ---------------------------------------------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C>
INTEREST INCOME
Interest and fees on loans $4,696 $3,951 $7,691 $259,893
Interest on securities:
U.S. government securities and obligations of
U.S. government agencies 5,058 2,073 2,969 147,656
Obligations of states and political subdivisions 30 294 596 2,249
Trading account interest -- -- -- 33
Interest on time deposits in domestic banks -- 77 87 720
Interest on federal funds sold and securities
purchased under agreements to resell 156 166 -- 9,883
- ------------------------------------------------------------------------------------------------------------------------------------
TOTAL INTEREST INCOME 9,940 6,561 11,343 420,434
- ------------------------------------------------------------------------------------------------------------------------------------
INTEREST EXPENSE
Interest on deposits 3,695 2,542 3,905 139,590
Interest on federal funds purchased and
securities sold under agreements to repurchase -- -- 24 4,040
Interest on debt and other -- -- 784 4,402
- ------------------------------------------------------------------------------------------------------------------------------------
TOTAL INTEREST EXPENSE 3,695 2,542 4,713 148,032
- ------------------------------------------------------------------------------------------------------------------------------------
NET INTEREST INCOME 6,245 4,019 6,630 272,402
Provision for possible loan losses 364 270 168 (3,296)
- ------------------------------------------------------------------------------------------------------------------------------------
NET INTEREST INCOME AFTER PROVISION FOR
POSSIBLE LOAN LOSSES 5,881 3,749 6,462 275,698
- ------------------------------------------------------------------------------------------------------------------------------------
NONINTEREST INCOME
Trust fees 4 -- -- 13,314
Service charges on deposits 700 402 933 40,562
Other service, collection and exchange charges 276 54 307 20,386
Gain on settlement of acquired loans -- -- -- 1,308
Other operating income 283 123 159 8,828
Securities gains (losses), net -- 91 63 251
- ------------------------------------------------------------------------------------------------------------------------------------
TOTAL NONINTEREST INCOME 1,263 670 1,462 84,649
- ------------------------------------------------------------------------------------------------------------------------------------
NONINTEREST EXPENSE
Salaries and employee benefits 2,047 1,120 2,228 112,995
Occupancy expense, net 792 163 331 25,568
Equipment expense 181 318 138 14,247
Data processing expense 160 27 265 17,925
Foreclosed property expense 25 -- 209 8,679
Provision for data processing enhancements -- -- -- 11,991
Other operating expense 927 1,011 2,440 93,703
- ------------------------------------------------------------------------------------------------------------------------------------
TOTAL NONINTEREST EXPENSE 4,132 2,639 5,611 285,108
- ------------------------------------------------------------------------------------------------------------------------------------
INCOME BEFORE INCOME TAXES,
EXTRAORDINARY ITEM AND CUMULATIVE EFFECT
OF ACCOUNTING CHANGE 3,012 1,780 2,313 75,239
Income tax expense 1,031 528 922 10,323
- ------------------------------------------------------------------------------------------------------------------------------------
INCOME FROM CONTINUING OPERATIONS $1,981 $1,252 $1,391 $64,916
====================================================================================================================================
PRO FORMA WEIGHTED AVERAGE COMMON SHARES 3,350,000 2,250,000 2,500,000 114,917,135
====================================================================================================================================
PRO FORMA INCOME PER COMMON SHARE
FROM CONTINUING OPERATIONS (F) $0.56
====================================================================================================================================
See notes to Pro Forma Combined Financial Statements.
</TABLE>
33
<PAGE>
<TABLE>
<CAPTION>
HIBERNIA CORPORATION
PRO FORMA COMBINED STATEMENT OF INCOME
Year Ended December 31, 1992
- ------------------------------------------------------------------------------------------------------------------------------------
(A)
RESTATED PRO FORMA PIONEER
HIBERNIA AMERICAN HIBERNIA BANCSHARES
Unaudited ($ in thousands, except per share data) CORPORATION BANK CORPORATION CORPORATION
-----------------------------------------------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C>
INTEREST INCOME
Interest and fees on loans $293,980 $4,360 $298,340 $14,947
Interest on securities:
U.S. government securities and obligations of
U.S. government agencies 111,482 2,250 113,732 11,030
Obligations of states and political subdivisions 1,202 -- 1,202 187
Trading account interest 99 -- 99 --
Interest on time deposits in domestic banks 361 4 365 252
Interest on federal funds sold and securities
purchased under agreements to resell 15,198 159 15,357 343
- ------------------------------------------------------------------------------------------------------------------------------------
TOTAL INTEREST INCOME 422,322 6,773 429,095 26,759
- ------------------------------------------------------------------------------------------------------------------------------------
INTEREST EXPENSE
Interest on deposits 167,648 2,453 170,101 9,158
Interest on federal funds purchased and
securities sold under agreements to repurchase 6,910 -- 6,910 --
Interest on debt and other 13,366 -- 13,366 732
- ------------------------------------------------------------------------------------------------------------------------------------
TOTAL INTEREST EXPENSE 187,924 2,453 190,377 9,890
- ------------------------------------------------------------------------------------------------------------------------------------
NET INTEREST INCOME 234,398 4,320 238,718 16,869
Provision for possible loan losses 68,327 -- 68,327 2,221
- ------------------------------------------------------------------------------------------------------------------------------------
NET INTEREST INCOME AFTER PROVISION FOR
POSSIBLE LOAN LOSSES 166,071 4,320 170,391 14,648
- ------------------------------------------------------------------------------------------------------------------------------------
NONINTEREST INCOME
Trust fees 12,849 -- 12,849 6
Service charges on deposits 36,451 672 37,123 3,129
Other service, collection and exchange charges 15,745 149 15,894 2,284
Gain on settlement of acquired loans 4,151 -- 4,151 --
Loss on planned sale of Texas bank (2,934) -- (2,934) --
Other operating income 9,760 505 10,265 522
Securities gains, net 17,336 84 17,420 22
- ------------------------------------------------------------------------------------------------------------------------------------
TOTAL NONINTEREST INCOME 93,358 1,410 94,768 5,963
- ------------------------------------------------------------------------------------------------------------------------------------
NONINTEREST EXPENSE
Salaries and employee benefits 99,480 1,379 100,859 6,506
Occupancy expense, net 25,393 258 25,651 1,188
Equipment expense 15,019 252 15,271 529
Data processing expense 17,726 462 18,188 864
Foreclosed property expense 22,702 967 23,669 2,637
Other operating expense 77,691 989 78,680 5,593
- ------------------------------------------------------------------------------------------------------------------------------------
TOTAL NONINTEREST EXPENSE 258,011 4,307 262,318 17,317
- ------------------------------------------------------------------------------------------------------------------------------------
INCOME (LOSS) BEFORE INCOME TAXES AND
EXTRAORDINARY ITEMS 1,418 1,423 2,841 3,294
Income tax expense 3,170 422 3,592 1,094
- ------------------------------------------------------------------------------------------------------------------------------------
INCOME (LOSS) FROM CONTINUING OPERATIONS ($1,752) $1,001 ($751) $2,200
====================================================================================================================================
PRO FORMA WEIGHTED AVERAGE COMMON SHARES 42,629,773 2,250,000 44,879,773 8,370,512
====================================================================================================================================
PRO FORMA INCOME (LOSS) PER COMMON SHARE
FROM CONTINUING OPERATIONS(F) ($0.04) ($0.02)
====================================================================================================================================
</TABLE>
<TABLE>
<CAPTION>
- ---------------------------------------------------------------------------------------------------------------------------------
FIRST STATE TOTAL
BANK AND STABA PROGRESSIVE PRO FORMA
TRUST BANCSHARES, BANCORPORATION, HIBERNIA
Unaudited ($ in thousands, except per share data) COMPANY INC. INC. CORPORATION
- ---------------------------------------------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C>
INTEREST INCOME
Interest and fees on loans $4,650 $3,716 $7,305 $328,958
Interest on securities:
U.S. government securities and obligations of
U.S. government agencies 5,889 2,023 3,184 135,858
Obligations of states and political subdivisions 36 282 17 1,724
Trading account interest -- -- -- 99
Interest on time deposits in domestic banks -- 81 188 886
Interest on federal funds sold and securities
purchased under agreements to resell 254 374 -- 16,328
- ------------------------------------------------------------------------------------------------------------------------------------
TOTAL INTEREST INCOME 10,829 6,476 10,694 483,853
- ------------------------------------------------------------------------------------------------------------------------------------
INTEREST EXPENSE
Interest on deposits 5,022 2,920 4,514 191,715
Interest on federal funds purchased and
securities sold under agreements to repurchase -- -- -- 6,910
Interest on debt and other -- -- 618 14,716
- ------------------------------------------------------------------------------------------------------------------------------------
TOTAL INTEREST EXPENSE 5,022 2,920 5,132 213,341
- ------------------------------------------------------------------------------------------------------------------------------------
NET INTEREST INCOME 5,807 3,556 5,562 270,512
Provision for possible loan losses 545 363 101 71,557
- ------------------------------------------------------------------------------------------------------------------------------------
NET INTEREST INCOME AFTER PROVISION FOR
POSSIBLE LOAN LOSSES 5,262 3,193 5,461 198,955
- ------------------------------------------------------------------------------------------------------------------------------------
NONINTEREST INCOME
Trust fees 5 -- -- 12,860
Service charges on deposits 699 406 861 42,218
Other service, collection and exchange charges 264 31 244 18,717
Gain on settlement of acquired loans -- -- -- 4,151
Loss on planned sale of Texas bank -- -- -- (2,934)
Other operating income 149 67 62 11,065
Securities gains, net ` -- -- 114 17,556
- ------------------------------------------------------------------------------------------------------------------------------------
TOTAL NONINTEREST INCOME 1,117 504 1,281 103,633
- ------------------------------------------------------------------------------------------------------------------------------------
NONINTEREST EXPENSE
Salaries and employee benefits 1,982 998 1,894 112,239
Occupancy expense, net 768 162 280 28,049
Equipment expense 141 218 139 16,298
Data processing expense 137 19 243 19,451
Foreclosed property expense 29 13 371 26,719
Other operating expense 958 874 1,952 88,057
- ------------------------------------------------------------------------------------------------------------------------------------
TOTAL NONINTEREST EXPENSE 4,015 2,284 4,879 290,813
- ------------------------------------------------------------------------------------------------------------------------------------
INCOME (LOSS) BEFORE INCOME TAXES AND,
EXTRAORDINARY ITEMS 2,364 1,413 1,863 11,775
Income tax expense 849 349 50 5,934
- ------------------------------------------------------------------------------------------------------------------------------------
INCOME (LOSS) FROM CONTINUING OPERATIONS $1,515 $1,064 $1,813 $5,841
====================================================================================================================================
PRO FORMA WEIGHTED AVERAGE COMMON SHARES 3,350,000 2,250,000 2,500,000 61,350,285
====================================================================================================================================
PRO FORMA INCOME (LOSS) PER COMMON SHARE
FROM CONTINUING OPERATIONS (F) $0.10
====================================================================================================================================
See notes to Pro Forma Combined Financial Statements.
</TABLE>
34
<PAGE>
<TABLE>
<CAPTION>
HIBERNIA CORPORATION
PRO FORMA COMBINED STATEMENT OF INCOME
Year Ended December 31, 1991
- ----------------------------------------------------------------------------------------------
(A)
RESTATED PRO FORMA PIONEER
Unaudited ($ in thousands, HIBERNIA AMERICAN HIBERNIA BANCSHARES
except per share data) CORPORATION BANK CORPORATION CORPORATION
- -----------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C>
INTEREST INCOME
Interest and fees on
loans $ 495,697 $ 4,060 $ 499,757 $ 16,686
Interest on securities:
U.S. government
securities and
obligations of
U.S. government
agencies 135,929 2,336 138,265 12,041
Obligations of states
and political
subdivisions 6,274 13 6,287 394
Trading account interest 70 -- 70 --
Interest on time deposits
in domestic banks 522 6 528 291
Interest on federal funds
sold and securities
purchased under
agreements to resell 11,417 211 11,628 573
- -----------------------------------------------------------------------------------------------
TOTAL INTEREST INCOME 649,909 6,626 656,535 29,985
- -----------------------------------------------------------------------------------------------
INTEREST EXPENSE
Interest on deposits 355,371 3,623 358,994 14,866
Interest on federal funds
purchased and securities
sold under agreements
to repurchase 16,794 -- 16,794 --
Interest on debt and other 14,396 -- 14,396 838
- -----------------------------------------------------------------------------------------------
TOTAL INTEREST EXPENSE 386,561 3,623 390,184 15,704
- -----------------------------------------------------------------------------------------------
NET INTEREST INCOME 263,348 3,003 266,351 14,281
Provision for possible
loan losses 180,589 90 180,679 2,561
- -----------------------------------------------------------------------------------------------
NET INTEREST INCOME AFTER
PROVISION FOR POSSIBLE
LOAN LOSSES 82,759 2,913 85,672 11,720
- -----------------------------------------------------------------------------------------------
NONINTEREST INCOME
Trust fees 14,844 -- 14,844 11
Service charges on
deposits 39,209 677 39,886 2,715
Other service, collection
and exchange charges 21,775 144 21,919 1,636
Credit card income 5,413 24 5,437 --
Gain on settlement
of acquired loans 9,043 -- 9,043 --
Other operating income 7,834 245 8,079 207
Securities gains, net 17,707 -- 17,707 186
- -----------------------------------------------------------------------------------------------
TOTAL NONINTEREST
INCOME 115,825 1,090 116,915 4,755
- -----------------------------------------------------------------------------------------------
NONINTEREST EXPENSE
Salaries and employee
benefits 128,063 1,355 129,418 5,547
Occupancy expense, net 30,823 252 31,075 1,169
Equipment expense 15,579 209 15,788 491
Data processing expense 12,783 392 13,175 761
Foreclosed property
expense 28,781 297 29,078 2,421
Credit card expense 3,136 -- 3,136 --
Other operating expense 118,875 1,009 119,884 3,843
- -----------------------------------------------------------------------------------------------
TOTAL NONINTEREST
EXPENSE 338,040 3,514 341,554 14,232
- -----------------------------------------------------------------------------------------------
INCOME (LOSS) BEFORE
INCOME TAXES,
EXTRAORDINARY ITEM
AND CUMULATIVE EFFECT
OF ACCOUNTING CHANGE (139,456) 489 (138,967) 2,243
Income tax expense 1,911 122 2,033 572
- -----------------------------------------------------------------------------------------------
INCOME (LOSS) FROM
CONTINUING OPERATIONS $(141,367) $367 $(141,000) $ 1,671
===============================================================================================
PRO FORMA WEIGHTED
AVERAGE COMMON SHARES 41,138,432 2,250,000 43,388,432 8,370,512
===============================================================================================
PRO FORMA INCOME
(LOSS) PER COMMON SHARE
FROM CONTINUING
OPERATIONS (F) $(3.44) $(3.25)
===============================================================================================
- -----------------------------------------------------------------------------------------------
FIRST STATE TOTAL
BANK AND STABA PROGRESSIVE PRO FORMA
Unaudited ($ in thousands, TRUST BANCSHARES, BANCORPORATION, HIBERNIA
except per share data) COMPANY INC. INC. CORPORATION
- -----------------------------------------------------------------------------------------------
<C> <C> <C> <C>
INTEREST INCOME
Interest and fees on
loans $4,797 $3,606 $6,741 $531,587
Interest on securities:
U.S. government
securities and
obligations of
U.S. government
agencies 5,674 1,736 3,127 160,843
Obligations of states
and political
subdivisions 64 253 34 7,032
Trading account interest -- -- -- 70
Interest on time deposits
in domestic banks -- 125 53 997
Interest on federal funds
sold and securities
purchased under
agreements to resell 673 349 146 13,369
- -----------------------------------------------------------------------------------------------
TOTAL INTEREST INCOME 11,208 6,069 10,101 713,898
- -----------------------------------------------------------------------------------------------
INTEREST EXPENSE
Interest on deposits 6,685 3,365 5,438 389,348
Interest on federal funds
purchased and securities
sold under agreements
to repurchase -- -- 3 16,797
Interest on debt and other -- -- 548 15,782
- -----------------------------------------------------------------------------------------------
TOTAL INTEREST
EXPENSE 6,685 3,365 5,989 421,927
- -----------------------------------------------------------------------------------------------
NET INTEREST INCOME 4,523 2,704 4,112 291,971
Provision for possible
loan losses 1,200 175 30 184,645
- -----------------------------------------------------------------------------------------------
NET INTEREST INCOME AFTER
PROVISION FOR POSSIBLE
LOAN LOSSES 3,323 2,529 4,082 107,326
- -----------------------------------------------------------------------------------------------
NONINTEREST INCOME
Trust fees 6 -- -- 14,861
Service charges on
deposits 675 367 901 44,544
Other service, collection
and exchange charges 232 83 315 24,185
Credit card income -- -- -- 5,437
Gain on settlement
of acquired loans -- -- -- 9,043
Other operating income 131 28 (38) 8,407
Securities gains, net -- -- (377) 17,516
- -----------------------------------------------------------------------------------------------
TOTAL NONINTEREST
INCOME 1,044 478 801 123,993
- -----------------------------------------------------------------------------------------------
NONINTEREST EXPENSE
Salaries and employee
benefits 1,660 868 1,678 139,171
Occupancy expense, net 837 137 315 33,533
Equipment expense 96 201 119 16,695
Data processing expense 108 13 396 14,453
Foreclosed property
expense 34 12 304 31,849
Credit card expense -- -- -- 3,136
Other operating expense 1,095 744 1,373 126,939
- -----------------------------------------------------------------------------------------------
TOTAL NONINTEREST
EXPENSE 3,830 1,975 4,185 365,776
- -----------------------------------------------------------------------------------------------
INCOME (LOSS) BEFORE
INCOME TAXES,
EXTRAORDINARY ITEM
AND CUMULATIVE EFFECT
OF ACCOUNTING CHANGE 537 1,032 698 (134,457)
Income tax expense 257 270 45 3,177
- -----------------------------------------------------------------------------------------------
INCOME (LOSS) FROM
CONTINUING OPERATIONS $280 $762 $653 $(137,634)
===============================================================================================
PRO FORMA WEIGHTED
AVERAGE COMMON SHARES 3,350,000 2,250,000 2,500,000 59,858,944
===============================================================================================
PRO FORMA INCOME (LOSS)
PER COMMON SHARE
FROM CONTINUING
OPERATIONS (F) $(2.30)
===============================================================================================
</TABLE>
See notes to Pro Forma Combined Financial Statements.
35
<PAGE>
HIBERNIA CORPORATION
NOTES TO PRO FORMA COMBINED FINANCIAL STATEMENTS
A. The "Restated Hibernia Corporation" information reflects the results of the
mergers with Commercial Bancshares, Inc. and Bastrop National Bank,
consummated on July 1,1994; and First Continental Bancshares, Inc. and First
Bancorp of Louisiana, Inc., consummated on August 1, 1994, which were
accounted for as poolings of interests. Hibernia Corporation issued
13,021,494 shares of common stock with a stated value of $25,001,000 to
effect these mergers. Debt totaling $17,825,000 and related accrued interest
and premium of $4,930,000 was retired in conjunction with these mergers.
B. Hibernia Corporation will issue common stock with an aggregate market value
at the date of merger of $18,000,000 to effect the merger with American Bank
(American). The Hibernia Corporation common stock is assumed to have a
market value of $8.00 per share resulting in the issuance of 2,250,000
shares of common stock for all the outstanding common stock of American
(exchange ratio of 4.65).
If the Average Market Price is less than $7.75 per share, then the number of
shares of Hibernia Common Stock to be exchanged in the Merger will be
increased proportionately with the decrease in the Average Market Price
below that level to ensure that an aggregate value of $17,437,500 of
Hibernia Common Stock is exchanged in the Merger. Similarly, if the Average
Market Price is more than $8.875 per share, then the number of shares of
Hibernia Common Stock to be exchanged in the Merger will be decreased
proportionately with the increase in the Average Market Price above that
level to ensure that an aggregate value of $19,968,750 of Hibernia Common
Stock is exchanged in the Merger. However, if the Average Market Price is
between $8.875 and $7.75, the number of shares to be exchanged will remain
constant, even if the Average Market Price fluctuates within that range.
The stated value of Hibernia Corporation common stock is $1.92 per share. In
accordance with the pooling of interests method of accounting, the
historical equities of the merged companies are combined.
C. In addition to the American merger, Hibernia Corporation is a party to
pending mergers with Pioneer Bancshares Corporation (Pioneer), STABA
Bancshares, Inc. (STABA) and Progressive Bancorporation, Inc. (Progressive).
Hibernia Corporation will issue common stock to effect these mergers in
transactions using the pooling of interests method of accounting.
The Hibernia Corporation common stock is assumed to have a market value of
$8.00 per share and a stated value of $1.92 per share.
36
<PAGE>
HIBERNIA CORPORATION
NOTES TO PRO FORMA COMBINED FINANCIAL STATEMENTS
If the average market price is less than $7.50 per share, then the number of
shares of Hibernia Common Stock to be exchanged in the Pioneer merger will
be increased proportionately with the decrease in the average market price
below that level to ensure that an aggregate value of $62,779,000 of
Hibernia Common Stock is exchanged in the merger. Similarly, if the average
market price is more than $9.50 per share, then the number of shares of
Hibernia Common Stock to be exchanged in the merger will be decreased
proportionately with the increase in the average market price above that
level to ensure that an aggregate value of $79,520,000 of Hibernia Common
Stock is exchanged in the merger. However, if the average market price is
between $9.50 and $7.50, the number of shares to be exchanged will remain
constant, even if the average market price fluctuates within that range.
If the average market price is less than $7.75 per share, then the number of
shares of Hibernia Common Stock to be exchanged in the First State merger
will be increased proportionately with the decrease in the average market
price below that level to ensure that an aggregate value of $25,962,500 of
Hibernia Common Stock is exchanged in the merger. Similarly, if the average
market price is more than $9.75 per share, then the number of shares of
Hibernia Common Stock to be exchanged in the merger will be decreased
proportionately with the increase in the average market price above that
level to ensure that an aggregate value of $32,662,500 of Hibernia Common
Stock is exchanged in the merger. However, if the average market price is
between $9.75 and $7.75, the number of shares to be exchanged will remain
constant, even if the average market price fluctuates within that range.
The number of shares of Hibernia Common Stock to be exchanged in the STABA
merger will be the number that equals 18,000,000 divided by the average
market price of Hibernia Common Stock on the Closing Date.
The number of shares of Hibernia Common Stock to be exchanged in the
Progressive merger will be 2,500,000 shares. Upon the merger each share of
Progressive Preferred Stock issued and outstanding will be converted into
the right to receive cash in the amount of $12.50 per share plus all
accumulated and unpaid dividends thereon.
In accordance with the pooling of interests method of accounting, the
historical equities of the merged companies are combined.
<TABLE>
<CAPTION>
Hibernia Mkt Value Stated Value Exchange
Shares of Shares of Shares Ratio
-------- --------- ------------ --------
<S> <C> <C> <C> <C>
Pioneer 8,370,512 $ 66,964,000 $16,071,000 30.50
First State 3,350,000 26,800,000 6,432,000 33.50
STABA 2,250,000 18,000,000 4,320,000 18.92
Progressive 2,500,000 20,000,000 4,800,000 4.05
---------- ------------ -----------
Total 16,470,512 $131,764,000 $31,623,000
========== ============ ===========
</TABLE>
37
<PAGE>
HIBERNIA CORPORATION
NOTES TO PRO FORMA COMBINED FINANCIAL STATEMENTS
D. Hibernia Corporation will use available federal funds sold to retire debt
and related accrued interest.
Debt Interest
---- --------
Pioneer $2,071,000 $30,000
Progressive 3,185,000 --
---------- -------
$5,256,000 $30,000
========== =======
The retirement of the Pioneer debt is not a requirement of the merger. The
Progressive debt is held by Hibernia National Bank and will be offset
against the outstanding loan balance upon consummation of the merger.
E. In connection with obtaining regulatory approval of the Pioneer transaction,
Hibernia has agreed to sell three of the branches currently operated by
Pioneer. The sale of these branches will include the physical premises as
well as all deposits, loans and other assets held by those branches.
Aggregate deposits and aggregate loans held by those branches as of June 30,
1994 were approximately $43 million and $21 million, respectively. On
December 16, 1994 Hibernia executed a definitive agreement to sell these
branches. The sale of these branches is expected to close in the first
quarter of 1995. The sale of these branches will not affect the
consideration to be paid to Pioneer Shareholders in that merger. The effect
of the sale of these branches is considered immaterial and has not been
reflected in the pro forma combined financial statements.
F. Hibernia Corporation expects to achieve savings through reductions in
interest expense and operating costs in connection with the proposed
mergers. The savings vary from merger to merger depending upon Hibernia
Corporation's pre-merger operations in the respective geographic area. The
majority of the savings will be achieved through the retirement of long-term
debt upon merger and consolidation of certain operations. The extent to
which the savings will be achieved depends, among other things, on the
regulatory environment and economic conditions, and may be affected by
unanticipated changes in business activities, inflation and certain external
factors such as Federal Deposit Insurance Corporation (FDIC) assessments.
Therefore, there can be no assurance that such savings will be realized. No
adjustment has been included in the unaudited pro forma financial statements
for the anticipated savings.
38
<PAGE>
PROPOSED MERGER
This section of the Proxy Statement-Prospectus describes certain
aspects of the Agreement and the Merger. The following description does not
purport to be complete and is qualified in its entirety by reference to the
Agreement, which is attached as Appendix A to this Proxy Statement-Prospectus
and is incorporated herein by reference. All shareholders are urged to read the
Agreement carefully and in its entirety.
The ultimate result of the transactions contemplated by the Agreement
will be that the business and properties of American Bank will become the
business and properties of HNB and the shareholders of American Bank will become
shareholders of Hibernia. The steps taken to achieve this result involve the
following transactions: (i) American Bank will be merged with and into HNB and
the separate existence of American Bank will cease; and (ii) shareholders of
American Bank will receive the consideration described below under the heading
"PROPOSED MERGER -- Terms of the Merger."
BACKGROUND OF AND REASONS FOR THE MERGER
BACKGROUND. As a result of recent improvement in the Louisiana
economy, there has been a sharp increase in the level of interest in and the
number of acquisitions of financial institutions in Louisiana. One of the
responsibilities of the Board of Directors of American Bank is to consider
various strategic alternatives, including whether to affiliate with a larger,
more diversified financial organization, as viable opportunities might arise.
The Board of Directors of American Bank in April 1994 engaged
Montgomery to evaluate strategic alternatives for American Bank. Based upon
Montgomery's presentation of strategic alternatives available to American Bank,
the Board on April 19, 1994, determined to solicit preliminary indications of
interest for the purchase of American Bank from interested and capable buyers.
Montgomery contacted six local and regional financial institutions. Four
potential buyers expressed an acceptable preliminary indication of interest and
were allowed to conduct document and record review before the submission of
final acquisition proposals. Two of these financial institutions, including
Hibernia, conducted document and record review and submitted final acquisition
proposals. The proposals were considered by the Board of Directors of American
Bank at a Special Meeting held for that purpose on September 16, 1994. At the
meeting, representatives of Montgomery made a presentation to the Board of
Directors regarding, among other things, the competing proposals. Based upon
the foregoing and its analysis of the competing proposals, the Board of
Directors determined that the sale of American Bank to Hibernia pursuant to its
acquisition proposal was in the best interests of American Bank and its
shareholders and approved the Agreement.
39
<PAGE>
REASONS FOR THE MERGER. In reaching its decision that the Merger is
in the best interests of American Bank and its shareholders, American Bank's
Board of Directors consulted with its financial and other advisors, as well as
with American Bank's management, and considered a number of factors, including,
but not limited to, the following:
(a) The financial condition and results of
operations of, and prospects for, each of Hibernia and American Bank;
(b) The amount and type of consideration to be
received by American Bank's shareholders pursuant to the Agreement;
(c) The Hibernia Common Stock to be received pursuant to the Agreement
will be listed for trading on the NYSE and should provide American Bank's
shareholders with liquidity that is unavailable to holders of American Bank
Common Stock, for which a public trading market does not exist;
(d) The Agreement will allow American Bank's shareholders to become
shareholders of Hibernia, an institution which is the second largest bank
holding company headquartered in Louisiana and the 100th largest bank holding
company in the United States;
(e) Recent changes in the regulatory environment will result in
American Bank facing additional competitive pressures in its market area from
other financial institutions with greater financial resources capable of
offering a broad array of financial services;
(f) The Merger is expected to qualify as a tax-free reorganization so that
neither American Bank nor its shareholders (except to the extent that cash is
received in respect of their shares) will recognize any gain in the transaction
(see "Material Tax Consequences"); and
(g) The opinion received from Montgomery that the consideration to be
received by the shareholders of American Bank pursuant to the Agreement, when
taken as a whole, is fair to such shareholders from a financial point of view
(see "Opinion of Financial Advisor").
American Bank's Board of Directors did not assign any specific or relative
weight to the foregoing factors in its considerations. American Bank's Board of
Directors believes that the Agreement and the Merger will provide significant
value to all American Bank shareholders and will enable them to participate in
opportunities for growth that American Bank's Board of Directors believes the
Merger makes possible.
40
<PAGE>
BASED ON THE FOREGOING, THE BOARD OF DIRECTORS OF AMERICAN BANK HAS
UNANIMOUSLY APPROVED THE AGREEMENT AND THE MERGER, BELIEVES THAT THE AGREEMENT
AND THE MERGER ARE IN THE BEST INTERESTS OF AMERICAN BANK'S SHAREHOLDERS, AND
RECOMMENDS THAT ALL SHAREHOLDERS VOTE "FOR" THE APPROVAL OF THE AGREEMENT AND
THE MERGER.
OPINION OF FINANCIAL ADVISOR
GENERAL. Pursuant to an engagement letter dated April 15, 1994 (the
"Engagement Letter"), American Bank engaged Montgomery to act as its financial
advisor in connection with its evaluation of its strategic alternatives,
including the possible sale of American Bank. Montgomery is a nationally
recognized investment banking firm and, as part of its investment banking
activities, is regularly engaged in the valuation of businesses and their
securities in connection with merger transactions and other types of
acquisitions, negotiated underwritings, placements and valuations for corporate
and other purposes. American Bank selected Montgomery as its financial advisor
on the basis of its experience and expertise in transactions similar to the
Agreement and its reputation in the banking and investment communities.
At the September 16, 1994 meeting of American Bank's Board of Directors,
Montgomery delivered its oral opinion, subsequently confirmed in writing, that
the consideration to be received by the shareholders of American Bank pursuant
to the Agreement, when taken as a whole, is fair to such shareholders from a
financial point of view. No limitations were imposed by American Bank on
Montgomery with respect to the investigations made or procedures followed in
rendering its opinion. THE FULL TEXT OF MONTGOMERY'S WRITTEN OPINION TO
AMERICAN BANK'S BOARD OF DIRECTORS, WHICH SETS FORTH THE ASSUMPTIONS MADE,
MATTERS CONSIDERED, AND LIMITATIONS OF THE REVIEW BY MONTGOMERY, IS ATTACHED
HERETO AS APPENDIX B AND IS INCORPORATED HEREIN BY REFERENCE AND SHOULD BE READ
CAREFULLY AND IN ITS ENTIRETY IN CONNECTION WITH THIS PROXY STATEMENT-
PROSPECTUS. THE FOLLOWING SUMMARY OF MONTGOMERY'S OPINION IS QUALIFIED IN ITS
ENTIRETY BY REFERENCE TO THE FULL TEXT OF THE OPINION. MONTGOMERY'S OPINION
DOES NOT CONSTITUTE A REPORT OR VALUATION WITHIN THE MEANING OF SECTION 11 OF
THE SECURITIES ACT OF 1933, AS AMENDED (THE "SECURITIES ACT") AND SHOULD NOT BE
ACCORDED THE DEGREE OF RELIANCE PLACED UPON SUCH REPORTS AND VALUATIONS.
MONTGOMERY HAS NOT ASSUMED RESPONSIBILITY FOR PERFORMING THE LEVEL OF DILIGENCE
OR INDEPENDENT VERIFICATION THAT WOULD BE REQUIRED FOR IT TO RENDER A REPORT OR
VALUATION FOR PURPOSES OF THE SECURITIES ACT. MONTGOMERY'S OPINION IS ADDRESSED
TO AMERICAN BANK'S BOARD OF DIRECTORS ONLY AND DOES NOT CONSTITUTE A
RECOMMENDATION TO ANY SHAREHOLDER OF AMERICAN BANK AS TO HOW SUCH SHAREHOLDER
SHOULD VOTE AT THE SPECIAL MEETING.
In connection with its opinion, Montgomery, among other things: (i)
reviewed certain publicly available financial and other data
41
<PAGE>
with respect to Hibernia and certain financial and other data with respect to
American Bank, including the consolidated financial statements for recent years
and interim periods to June 30, 1994, and certain other relevant financial and
operating data relating to American Bank and Hibernia made available to
Montgomery from published sources and from the internal records of American
Bank; (ii) reviewed the Agreement; (iii) reviewed certain historical market
prices and trading volumes of Hibernia Common Stock on the NYSE; (iv) compared
Hibernia from a financial point of view with certain other companies in the
banking industry that Montgomery deemed to be relevant; (v) considered the
financial terms, to the extent publicly available, of selected recent business
combinations of companies in the banking industry that Montgomery deemed to be
comparable, in whole or in part, to the Merger; (vi) reviewed and discussed with
representatives of the management of American Bank and Hibernia certain
information of a business and financial nature regarding American Bank and
Hibernia, furnished to Montgomery by American Bank and Hibernia, including
financial forecasts and related assumptions of American Bank; (vii) made
inquiries regarding and discussed the Merger, the Agreement and other matters
related thereto with American Bank's counsel; and (viii) performed such other
analyses and examinations as Montgomery deemed appropriate.
In connection with its review, Montgomery did not independently verify any
of the foregoing information, and relied on such information and assumed such
information was complete and accurate in all material respects. With respect to
the financial forecasts for American Bank provided to Montgomery by American
Bank's management, Montgomery assumed for purposes of its opinion that such
forecasts were reasonably prepared on bases reflecting the best available
estimates and judgments of American Bank's management at the time of preparation
as to the future financial performance of American Bank and provided a
reasonable basis upon which Montgomery could form its opinion. Montgomery also
assumed that there were no material changes in American Bank's or Hibernia's
assets, financial condition, results of operations, business or prospects since
the respective dates of the last financial statements made available to
Montgomery. Montgomery relied on the advice of counsel to American Bank as to
all legal matters with respect to American Bank, the Merger and the Agreement.
Montgomery is not expert in the evaluation of loan portfolios for purposes of
assessing the adequacy of the allowances for losses with respect thereto and
assumed that such allowances for each of American Bank and Hibernia are in the
aggregate adequate to cover such losses. In addition, Montgomery did not review
any individual credit files, did not make an independent evaluation, appraisal
or physical inspection of the assets or individual properties of American Bank
or Hibernia, and was not furnished with any such appraisals. Further,
Montgomery's opinion was based on economic, monetary and market conditions
existing as of September 16, 1994, and on the assumption that the Agreement will
be consummated in accordance with its terms, without any amendment thereto and
without waiver by American Bank of any of
42
<PAGE>
the conditions to its obligations thereunder.
Set forth below is a brief summary of the report presented by Montgomery to
the American Bank Board of Directors on September 16, 1994 in connection with
its opinion.
COMPARABLE COMPANY ANALYSIS. Using public and other available information,
Montgomery compared certain financial ratios of Hibernia (including the ratio of
net income to average total assets ("return on average assets"), the ratio of
net income to average total equity ("return on average equity"), the ratio of
average equity to average assets, the ratio of noninterest expense to revenue
("cost control"), net interest margin and certain credit ratios) for the four
years ended December 31, 1993 and for the six months ended June 30, 1994, to a
national proxy group consisting of 50 selected national banks (the "National
Bank Proxy Group"), and to a southeast proxy group consisting of five banks
located in the Southeast region of the United States (the "Southeast Bank Proxy
Group"). No company used in the analysis is identical to Hibernia. The
analysis necessarily involved complex considerations and judgments concerning
differences in financial and operating characteristics of the companies.
ANALYSIS OF SELECTED BANK MERGER TRANSACTIONS. Montgomery reviewed the
consideration paid in recently announced transactions whereby certain banks were
acquired. Specifically, Montgomery reviewed 332 transactions involving
acquisitions of banks in the Southeast region of the United States announced
since January 1990 (the "Southeast Acquisitions") and acquisitions of 24
selected Louisiana banks announced since April 1993 (the "Louisiana
Acquisitions"). For each bank acquired or to be acquired in such transactions,
Montgomery compiled figures illustrating, among other things, the ratio of the
premium (i.e., purchase price in excess of book value) to core deposits,
purchase price to deposits, purchase price to book value and purchase price to
last twelve-months ("LTM") earnings.
The figures for banks acquired or to be acquired in the Southeast
Acquisitions and the Louisiana Acquisitions produced: (i) median return on
average equity of 10.48% and 16.87%, respectively; (ii) median return on average
assets of .91% and 1.51%, respectively; and (iii) median nonperforming assets to
average assets of 1.24% and 1.17%, respectively. In comparison, Montgomery
determined that for the year ended December 31, 1993 and the six months ended
June 30, 1994, American Bank's return on average equity was 17.11% and 18.61%,
respectively, its return on average assets was 1.27% and 1.51%, respectively,
and its nonperforming assets to average assets were 2.14% and 1.05%,
respectively.
43
<PAGE>
The figures for the Southeast Acquisitions and the Louisiana Acquisitions
produced: (i) median percentage of premium to core deposits of 6.64% and
10.73%, respectively; (ii) median purchase price to deposits of 16.02% and
20.39%, respectively; (iii) median ratio of purchase price to book value of 1.58
and 1.84, respectively; and (iv) median ratio of purchase price to LTM earnings
of 15.5 and 12.6, respectively. In comparison, assuming the consideration to be
paid in the Merger for each share of American Bank Common Stock equals that
number of shares of Hibernia Common Stock with a value of $38.93, Montgomery
determined that the consideration to be received by the holders of American Bank
Common Stock in the Merger represented a percentage of premium to core deposits
of 14.78%, a percentage of price to deposits of 22.19%, a ratio of price to book
value of 2.41 and a ratio of price to American Bank's LTM earnings for the
twelve months ended June 30, 1994 of 15.2.
No other company or transaction used in the above analysis as a comparison
is identical to American Bank or the Merger. Accordingly, an analysis of the
results of the foregoing is not mathematical; rather, it involves complex
considerations and judgments concerning differences in financial and operating
characteristics of the companies and other factors that could affect the public
trading value of the companies to which American Bank and the Merger are being
compared.
CONTRIBUTION ANALYSIS. Montgomery analyzed the contribution of each of
American Bank and Hibernia to, among other things, common equity and net income
of the pro forma combined companies for the years ended December 31, 1993, and
for the six-month period ended June 30, 1994. This analysis showed, among other
things, that based on pro forma combined balance sheets and income statements
for American Bank and Hibernia as of December 31, 1993 and June 30, 1994,
American Bank would have contributed 1.7% and 1.7%, respectively, of the common
equity, and for the year ended December 31, 1993 and the six months ended June
30, 1994, American Bank would have contributed 2.4% and 2.0%, respectively, of
the net income of the combined companies. Assuming the consideration to be paid
in the Merger for each share of American Bank Common Stock equals that number of
shares of Hibernia Common Stock with a value of $38.93, American Bank's
shareholders would own approximately 2.62% of the combined companies based on
common shares outstanding on June 30, 1994.
DILUTION ANALYSIS. Using estimates of future earnings prepared by American
Bank management and analysts' estimates for Hibernia, Montgomery compared the
calendar year 1994 estimated earnings per share of American Bank Common Stock
and Hibernia Common Stock to the calendar year 1994 estimated earnings per share
of the common stock of the pro forma combined companies. Based on such analysis
and assuming the consideration to be paid in the Merger for each share of
American Bank Common Stock equals that
44
<PAGE>
number of shares of Hibernia Common Stock with a value of $38.93, the proposed
transaction would be dilutive to Hibernia's earnings per share in 1994, prior to
projected revenue enhancements and cost savings, and accretive to American
Bank's earnings per share.
PRESENT VALUE ANALYSIS. In performing the present value analysis,
Montgomery assumed that the Merger was consummated as of January 1, 1995 on the
basis of an exchange ratio of 4.688 shares of Hibernia Common Stock for each
share of American Bank Common Stock. This ratio was based upon the assumption
that the consideration to be paid in the Merger for each share of American Bank
Common Stock equals that number of shares of Hibernia Common Stock with a value
of $38.93 and upon the trading price of Hibernia Common Stock as of September
15, 1994 of $8.38. In performing the analysis, Montgomery estimated the present
value of the future streams of annual pre-tax dividend income that the combined
company could produce over a five year period under various assumptions.
Montgomery then estimated the terminal value of 4.688 shares of the combined
company at the end of the five year period by applying various multiples
(ranging from 8x to 12x) to the combined company's projected 1998 earnings.
Montgomery then added the dividend stream to each of the terminal values and
discounted the sums using a 10% discount rate. This present value analysis
indicated a reference range of between $41.12 and $59.19 per 4.688 shares of
Hibernia Common Stock. In comparison, Montgomery noted that if American Bank
were to remain independent, based on the sum of the present value of the future
stream of annual pre-tax dividend income that American Bank could produce over a
five year period and certain terminal values derived from applying multiples
ranging from 6x to 10x to American Bank's projected 1998 earnings, and
discounting such sums using a 14% discount rate (reflecting the higher risks
associated with remaining an independent community bank), the present value of
one share of American Bank Common Stock ranged between $15.78 and $24.07.
HISTORICAL COMMON STOCK PRICE. Montgomery reviewed the historical common
stock prices of Hibernia compared to a bank industry proxy consisting of the 33
commercial banking companies followed by Montgomery and the Standard & Poor's
500.
The summary set forth above does not purport to be a complete description of
the presentation by Montgomery to American Bank's Board of Directors or of the
analyses performed by Montgomery. The preparation of a fairness opinion is not
necessarily susceptible to partial analysis or summary description. Montgomery
believes that its analyses and the summary set forth above must be considered as
a whole and that selecting a portion of its analyses and factors, without
considering all analyses and factors, would create an incomplete view of the
process underlying the analyses set forth in its presentation to American Bank's
Board of Directors. In addition, Montgomery may have given certain analyses
more or less weight than other analyses, and may have deemed various assumptions
45
<PAGE>
more or less probable than other assumptions, so that the ranges of valuations
resulting from any particular analysis described above should not be taken to be
Montgomery's view of the actual value of American Bank or the combined
companies. The fact that any specific analysis has been referred to in the
summary above is not meant to indicate that such analysis was given greater
weight than any other analysis.
In performing its analyses, Montgomery made numerous assumptions with
respect to industry performance, general business and economic conditions and
other matters, many of which are beyond the control of American Bank or
Hibernia. The analyses performed by Montgomery are not necessarily indicative
of actual values or actual future results, which may be significantly more or
less favorable than suggested by such analyses. Such analyses were prepared
solely as part of Montgomery's analysis of the fairness of the consideration to
be received by American Bank's shareholders in the Merger and were provided to
American Bank's Board of Directors in connection with the delivery of
Montgomery's opinion. The analyses do not purport to be appraisals or to
reflect the prices at which a company might actually be sold or the prices at
which any securities may trade at the present time or any time in the future.
Montgomery used in its analyses various projections of future performance
prepared by the management of American Bank. The projections are based on
numerous variables and assumptions which are inherently unpredictable and must
be considered not certain of occurrence as projected. Accordingly, actual
results could vary significantly from those set forth in such projections.
As described above, Montgomery's opinion and presentation to American Bank's
Board of Directors were among the many factors taken into consideration by the
Board in making its determination to approve the Agreement.
Pursuant to the Engagement Letter, American Bank paid Montgomery a retainer
fee of $25,000, which will be credited against any other fee to be paid to
Montgomery under the Engagement Letter. If the Merger is consummated,
Montgomery will be paid a fee equal to 1.5% of the total consideration involved
in the Merger, but in no event less than $250,000. American Bank has also
agreed to reimburse Montgomery for its reasonable out-of-pocket expenses in an
amount not to exceed $15,000, excluding legal fees of up to $15,000 which
American Bank also agreed to reimburse. American Bank has agreed to indemnify
Montgomery, its affiliates, and their respective partners, directors, officers,
agents, consultants, employees and controlling persons against certain
liabilities, including liabilities under the federal securities laws. Neither
Hibernia nor American Bank has paid Montgomery any other fees during the last
two years.
46
<PAGE>
In the ordinary course of its business, Montgomery may trade equity
securities of Hibernia for its own account and for the accounts of customers
and, accordingly, may at any time hold a long or short position in such
securities.
TERMS OF THE MERGER
On the Effective Date, each outstanding share of American Bank Common Stock
(other than shares held by dissenting shareholders) will be converted into 4.65
shares of Hibernia Common Stock, unless the Average Market Price of Hibernia
Common Stock is less than $7.75 or is greater than $8.875. If the Average
Market Price is less than $7.75, then each outstanding share of American Bank
Common Stock (other than shares held by dissenting shareholders) will be
exchanged for a number of shares of Hibernia Common Stock determined in
accordance with the following formula: [$17,437,500 divided by the Average
Market Price of Hibernia Common Stock] divided by 483,686. If the Average
Market Price is more than $8.875, then each outstanding share of American Bank
Common Stock (other than shares held by dissenting shareholders) will be
exchanged for a number of shares of Hibernia Common Stock determined in
accordance with the following formula: [$19,968,750 divided by the Average
Market Price of Hibernia Common Stock] divided by 483,686. For this purpose,
the Average Market Price of the Hibernia Common Stock will be the average of the
high and low trading prices of the stock for the five business days prior to the
last trading day immediately preceding the Closing Date. On January __, 1995,
the actual closing price for a share of Hibernia Common Stock was $_____, the
Average Market Price would have been $_____, and, if such date had been the day
immediately preceding the Closing Date, each outstanding share of American Bank
Common Stock (other than shares held by dissenting shareholders) would have been
converted into 4.65 shares of Hibernia Common Stock.
The Agreement provides for a reduction in the number of shares of Hibernia
Common Stock to be exchanged in the Merger in the event certain expenses related
to the Merger and incurred by American Bank, consisting primarily of legal and
accounting fees, exceed $175,000 in the aggregate. In the event those fees
exceed the amount specified, the excess will be reduced from the aggregate value
of Hibernia Common Stock to be exchanged, which would result in the shareholders
of American Bank receiving fewer shares of Hibernia Common Stock in the Merger
than they would have otherwise received.
If the Average Market Price is less than $7.75 per share, then the number of
shares of Hibernia Common Stock to be exchanged in the Merger will be increased
proportionately with the decrease in the Average Market Price below that level
to ensure that an aggregate value of $17,437,500 of Hibernia Common Stock is
exchanged in the Merger. Similarly, if the Average Market Price is more than
$8.875 per share, then the number of shares of Hibernia
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<PAGE>
Common Stock to be exchanged in the Merger will be decreased proportionately
with the increase in the Average Market Price above that level to ensure that an
aggregate value of $19,968,750 of Hibernia Common Stock is exchanged in the
Merger. However, if the Average Market Price is less than $8.875 and more than
$7.75, the number of shares to be exchanged will remain constant, even if the
Average Market Price fluctuates within that range.
The following table shows the aggregate consideration and number of shares
of Hibernia Common Stock to be issued in the Merger, assuming various market
prices of Hibernia Common Stock.
<TABLE>
<CAPTION>
Market Value Aggregate
per share of Consideration Aggregate Shares
Hibernia to be Exchanged of Hibernia
Common Stock ($$) to be Exchanged
- -------------- -------------- ----------------
<S> <C> <C>
$7.50 $17,437,500 2,325,000
$7.75 $17,437,500 2,250,000
$8.00 $18,000,000 2,250,000
$8.50 $19,125,000 2,250,000
$8.75 $19,968,750 2,250,000
$9.00 $19,968,750 2,218,750
</TABLE>
48
<PAGE>
The following table illustrates the effect of exceeding the expense
limitation in each of the above scenarios, assuming expenses of $250,000 (which
would be an excess of $75,000).
<TABLE>
<CAPTION>
Market Value Aggregate
per share of Consideration Aggregate Shares
Hibernia to be Exchanged of Hibernia
Common Stock ($$) to be Exchanged
- -------------- -------------- ________________
<S> <C> <C>
$7.50 $17,362,500 2,315,000
$7.75 $17,362,503 2,240,323
$8.00 $17,925,000 2,240,625
$8.50 $19,049,996 2,241,176
$8.75 $19,612,500 2,241,428
$9.00 $19,893,750 2,210,417
</TABLE>
Upon the effectiveness of the Merger, the conversion of shares of American
Bank Common Stock into Hibernia Common Stock will occur without any action on
the part of the holders thereof, and American Bank shareholders will
automatically be entitled to all of the rights and privileges afforded to
Hibernia shareholders as of such date. The exchange of American Bank stock
certificates for certificates representing Hibernia Common Stock, however, will
occur after the Effective Date of the Merger.
SHAREHOLDERS OF AMERICAN BANK SHOULD NOT FORWARD THEIR STOCK CERTIFICATES TO
AMERICAN BANK OR HIBERNIA AT THIS TIME. IF THE MERGER IS CONSUMMATED, AMERICAN
BANK SHAREHOLDERS WILL RECEIVE INSTRUCTIONS REGARDING THE EXCHANGE OF THEIR
CERTIFICATES FOR HIBERNIA COMMON STOCK.
In lieu of the issuance of any fractional share of Hibernia Common Stock to
which a holder of American Bank Common Stock may be entitled, each shareholder
of American Bank, upon surrender of the certificate or certificates which
immediately prior to the Effective Date represented American Bank Common Stock
held by such shareholder, shall be entitled to receive a cash payment (without
interest) equal to such fractional share multiplied by the Average Market Price
of Hibernia Common Stock (as defined above).
For a discussion of the rights of dissenting shareholders, see "PROPOSED
MERGER -- Rights of Dissenting Shareholders."
SURRENDER AND EXCHANGE OF STOCK CERTIFICATES
As soon as practicable after the Effective Date, the transfer
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agent of Hibernia, in its capacity as Exchange Agent, will mail all non-
dissenting shareholders of American Bank a letter of transmittal, together with
instructions for the exchange of their American Bank Common Stock certificates
for certificates representing Hibernia Common Stock. Until so exchanged, each
certificate representing American Bank Common Stock outstanding immediately
prior to the Effective Date shall be deemed for all purposes to evidence
ownership of the number of whole shares of Hibernia Common Stock into which such
shares have been converted on the Effective Date. SHAREHOLDERS SHOULD NOT SEND
THEIR AMERICAN BANK COMMON STOCK CERTIFICATES FOR SURRENDER UNTIL THEY RECEIVE
FURTHER INSTRUCTIONS FROM THE EXCHANGE AGENT.
American Bank shareholders who cannot locate their American Bank stock
certificates are encouraged to contact Sharon B. Kell, Vice President and
Cashier of American Bank, 22 Apple Street, Norco, Louisiana 70079-2214,
telephone: (504) 764-7581 prior to the Special Meeting. New certificates will
be issued to American Bank shareholders who cannot locate their certificates
only if the shareholder executes an affidavit certifying that the certificate
cannot be located and agreeing to indemnify American Bank and Hibernia (as its
successor), against any claim that may be made against either of them by the
owner of the lost certificate(s). American Bank or Hibernia (as its successor)
may require a shareholder to post a bond in an amount sufficient to support the
shareholder's indemnification obligation. SHAREHOLDERS WHO CANNOT LOCATE THEIR
STOCK CERTIFICATES AND SHAREHOLDERS WHO HOLD CERTIFICATES IN NAMES OTHER THAN
THEIR OWN ARE ENCOURAGED TO RESOLVE THOSE MATTERS PRIOR TO THE EFFECTIVE DATE OF
THE MERGER IN ORDER TO AVOID DELAYS IN RECEIVING THEIR HIBERNIA COMMON STOCK IF
THE MERGER IS APPROVED AND CONSUMMATED.
EMPLOYEE BENEFITS
Hibernia has agreed that it will use its best efforts to provide (or cause
to be provided by HNB) to all employees of American Bank who are employed as of
the Effective Date and who become employees of Hibernia or HNB after the Merger,
the same employee benefits as those offered by Hibernia and HNB to their
employees, except that employees of American Bank will not be required to wait
for any period in order to be eligible to participate in Hibernia's Flex Plan
(including its medical and dental coverage). Employees of American Bank will
not be denied health insurance coverage solely as a result of a pre-existing
condition that existed on the Effective Date but did not exist on the date the
employee commenced his or her employment with American Bank. Hibernia will also
give American Bank employees who become Hibernia or HNB employees full credit
for their years of service (for both eligibility, vesting and benefits) with
American Bank for purposes of each of Hibernia's benefits plans. Hibernia has
also agreed to pay or provide certain other benefits. As described more fully
below, Hibernia will assume, as a result of the Merger,
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American Bank's rights and obligations under an employment agreement between
American Bank and Darryl J. Chauvin, President and Chief Executive Officer of
American Bank. See "--Interests of Certain Persons in the Merger," below.
EXPENSES
The Agreement provides that all expenses incurred in connection with the
negotiation and execution of the Agreement and the consummation of the Merger
will be borne by the party that incurred them, regardless whether the Merger is
consummated.
REPRESENTATIONS AND WARRANTIES; CONDITIONS TO THE MERGER; WAIVER
The Agreement contains representations and warranties by American Bank
regarding, among other things, its organization, authority to enter into the
Agreement, capitalization, properties, financial statements, pending and
threatened litigation, contractual obligations and contingent liabilities. The
Agreement also contains representations and warranties by Hibernia regarding,
among other things, its organization and authority to enter into the Agreement,
capitalization, financial statements and public reports. Except as otherwise
provided in the Agreement, these representations and warranties will not survive
the Effective Date.
The obligations of Hibernia and American Bank to consummate the Merger are
conditioned upon, among other things, approval of the Agreement by American
Bank's shareholders; the receipt of necessary regulatory approvals, including
the approval of the OCC; the receipt of an opinion to the effect that the
Merger, when consummated in accordance with the terms of the Agreement, will
constitute a reorganization within the meaning of Section 368(a) of the Internal
Revenue Code, that to the extent American Bank Common Stock is exchanged for
Hibernia Common Stock, American Bank's shareholders will recognize no gain or
loss for federal income tax purposes with respect to such exchange, and that the
Louisiana income tax treatment of the Merger to such shareholders will be
substantially the same as the federal income tax treatment of the Merger to such
shareholders; the effectiveness under the Securities Act of a registration
statement relating to the Hibernia Common Stock to be issued in connection with
the Merger and the absence of a stop order suspending such effectiveness; the
absence of an order, decree or injunction enjoining or prohibiting the
consummation of the Merger; the receipt of all required state securities law
permits or authorizations; the accuracy of the representations and warranties
set forth in the Agreement as of the Closing Date; the listing of the Hibernia
Common Stock to be issued in the Merger on the NYSE; the receipt of certain
opinions of counsel; and, in the case of Hibernia, the absence of an event that
would preclude the Merger from being accounted for as a pooling-of-interests.
In this regard, Hibernia may abandon the Merger if American Bank shareholders
holding more than 10% of the outstanding
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American Bank Common Stock exercise and perfect dissenters' rights.
Except with respect to any required shareholder or regulatory approval,
substantially all of the conditions to consummation of the Merger may be waived
at any time by the party for whose benefit they were created, and the Agreement
may be amended or supplemented at any time by written agreement of the parties,
except that no such waiver, amendment or supplement executed after approval of
the Agreement by American Bank's shareholders may reduce the Exchange Ratio or
adversely affect the holders of American Bank Common Stock. In addition, any
material change in the terms of the Agreement after the Special Meeting would
require the approval of American Bank's shareholders.
REGULATORY AND OTHER APPROVALS
HNB is regulated by the OCC, and the Merger consequently must be approved by
the OCC before it may be effected. The OCC has approved the Merger.
American Bank and Hibernia were required to wait at least 15 days after
November 30, 1994 (the date of OCC approval) before consummating the Merger.
During this 15-day period, the Department of Justice was entitled to object to
the Merger on antitrust grounds. The Department of Justice did not object to
the Merger during the statutory waiting period.
The shares of Hibernia Common Stock offered pursuant to the Proxy Statement-
Prospectus will be registered with the Commission and the state securities
regulators in those states that require such registration. The shares also will
be listed on the NYSE.
The regulatory approvals sought in connection with the Merger may be
obtained or denied prior to or after the Special Meeting. The vote on the
Merger at the Special Meeting is not dependent or conditioned upon receipt of
any such approvals prior to the Special Meeting. Even if the Merger is approved
at the Special Meeting, it may not be consummated thereafter. Failure to
receive the requisite regulatory approvals will result in a termination of the
Agreement.
BUSINESS PENDING THE MERGER
Under the terms of the Agreement, American Bank may not, without the prior
written consent of Hibernia or as otherwise provided in the Agreement: (i)
create or issue any additional shares of capital stock or any options or other
rights to purchase or acquire shares of capital stock, redeem or repurchase any
of its capital stock, or declare or pay any dividends on its capital stock; (ii)
enter into employment contracts with directors, officers or employees or
otherwise agree to increase the compensation of or pay any bonus to such persons
except in
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accordance with existing policy; (iii) enter into or substantially modify any
employee benefits plans; (iv) establish any automatic teller machines or branch
or other banking offices; (v) make any capital expenditure(s) in excess of
$100,000 (except that American Bank may pay any and all obligations related to
the maintenance of equipment and other capital expenditures required to be paid
under its EDP contract with Bank of St. John, so long as such expenditures do
not exceed $200,000 in the aggregate); (vi) merge with any other company or bank
or liquidate or otherwise dispose of its assets; or (vii) acquire another
company or bank (except in connection with foreclosures of bona fide loan
transactions). In addition, American Bank may not solicit bids or other
transactions that would result in a merger of American Bank with an entity other
than Hibernia or HNB.
EFFECTIVE DATE OF THE MERGER; TERMINATION
After all conditions to consummation of the Merger have been satisfied or
waived, the effective date of the Merger shall be the date and time that the
Merger will become effective as of the date and time of the issuance by the
Louisiana Secretary of State of a certificate of merger relating to the Merger
(the "Effective Date").
Prior to the Effective Date, the Agreement may be terminated by either
party, whether before or after approval of the Agreement and the Merger by
American Bank's shareholders: (i) in the event of a material breach by the
other party of any representation, warranty or covenant which reflects a
material adverse change in the financial condition, results of operations or
business taken as a whole, of the breaching party, which cannot be or has not
been cured within the period allowed by the Agreement, or which results in a
material increase in the cost of the non-breaching party's performance of the
Agreement; (ii) if any of the conditions precedent to the obligations of such
party to consummate the Merger have not been satisfied, fulfilled or waived as
of the Closing Date; (iii) if any application for any required OCC approval has
been denied, and the time for all appeals of such denial has run; (iv) if the
shareholders of American Bank fail to approve the Merger at the Special Meeting;
or (v) in the event that the Merger is not consummated by April 30, 1995. The
Agreement may be terminated by Hibernia if the holders of more than 10% of the
outstanding shares of American Bank Common Stock exercise dissenters' rights, by
either party if certain material adverse changes occur in respect of the other
party, and by American Bank if the market price of Hibernia Common Stock does
not satisfy certain ratios. The Agreement also may be terminated at any time by
the mutual consent of the parties. In the event of termination, the Agreement
becomes null and void, except that certain provisions thereof relating to
expenses and confidentiality and the accuracy of information provided for
inclusion in the Registration Statement of which this Proxy Statement-Prospectus
is a part survive any such
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termination and any such termination does not relieve any breaching party from
liability for any uncured breach of any covenant or agreement giving rise to
such termination.
MANAGEMENT AND OPERATIONS AFTER THE MERGER
On the Effective Date, American Bank will be merged with and into HNB and
the separate existence of American Bank will cease. The offices of American
Bank will operate as branch banking offices of HNB. The employees of American
Bank on the Effective Date will become employees of HNB as of the Effective Date
and will be employed on an "at will" basis thereafter, subject to any existing
employment agreements or similar contractual obligations assumed by Hibernia or
HNB.
The Boards of Directors of Hibernia and HNB following the Merger shall
consist of those persons serving as directors immediately prior thereto.
Certain information regarding the directors of Hibernia elected at its annual
meeting of shareholders on April 26, 1994 is contained in documents incorporated
herein by reference. See "AVAILABLE INFORMATION." The directors of American
Bank will cease to serve as directors of American Bank as of the Effective Date.
Some of these directors may serve on an advisory board of Hibernia after the
Merger. See "PROPOSED MERGER --Interests of Certain Persons in the Merger."
CERTAIN DIFFERENCES IN RIGHTS OF SHAREHOLDERS
If the shareholders of American Bank approve the Merger and the Merger is
subsequently consummated, all shareholders of American Bank, other than any
shareholders who exercise and perfect dissenters' rights, will become
shareholders of Hibernia. As shareholders of Hibernia, their rights will be
governed by and subject to Hibernia's Articles of Incorporation and Bylaws and
the Louisiana Business Corporation Law, rather than American Bank's Articles of
Incorporation and Bylaws and the Louisiana Banking Law. The following is a
summary of the principal differences between the rights of shareholders of
American Bank and Hibernia not described elsewhere in this Proxy Statement-
Prospectus.
LIQUIDITY OF STOCK. There currently is no ready market for the shares of
American Bank Common Stock, and such a market is not likely to develop in the
future. The shares of Hibernia Common Stock that will be issued in the Merger
will be registered under applicable securities laws and may therefore be freely
resold by persons who are not "affiliates" of American Bank or Hibernia. In
addition, the Hibernia Common Stock is listed on the NYSE and actively traded on
that exchange. Current quotes of the market price of Hibernia Common Stock are
available from brokerage firms and other securities professionals, as well as
other sources, and are published in major newspapers on a daily basis.
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REMOVAL OF DIRECTORS. Shareholders of Hibernia may remove a director for
cause (defined as gross negligence or wilful misconduct) by the vote of a
majority of the total voting power and may remove a director without cause by a
vote of two-thirds of the total voting power. One or more directors of American
Bank shall cease to be a director upon his or her failure, after election, to be
the owner in his or her own rights of unpledged shares of American Bank of at
least $1,000.00 par value and may be removed by the affirmative vote of a
majority of the total voting power of American Bank at a meeting called for that
purpose.
AMENDMENT OF ARTICLES AND BYLAWS. Hibernia's Articles of Incorporation may
be amended by a vote of a majority of the voting power present at any meeting
called for that purpose. The Articles of Incorporation of American Bank may be
amended by the affirmative vote of two-thirds of all outstanding stock
represented, present and voted at a meeting called for that purpose, after
thirty days notice.
The Bylaws of Hibernia may be amended or repealed by a vote of two-thirds of
the total voting power outstanding or by a vote of two-thirds of the "continuing
directors" of the company, as defined in the Bylaws. A "continuing director"
for this purpose is generally a director who was nominated for election by a
majority of the existing directors. The Bylaws of American Bank may be amended
by the Board of Directors and the shareholders, by a majority of the Directors
and/or shareholders at a duly called meeting at which a quorum is present or
represented.
SPECIAL MEETINGS OF SHAREHOLDERS. Special meetings of the shareholders of
Hibernia may be called by the Chairman of the Board, the President, the Chief
Executive Officer or the Treasurer of Hibernia. In addition, shareholders
holding one-fifth or more of the total voting power of Hibernia may request a
special meeting of shareholders and, upon receipt of such request, the Secretary
of Hibernia is required to call a special meeting of the shareholders. A
special meeting of shareholders of American Bank may be called at any time by
the President, the Board of Directors, or the President upon the written request
of the holders of not less than fifty percent (50%) of all shares entitled to
vote at such meeting.
SHAREHOLDER PROPOSALS. Hibernia's Bylaws contain certain provisions
expressly allowing shareholders to submit shareholder proposals and to nominate
individuals for election as directors, under certain circumstances and provided
the shareholder complies with all of the conditions set forth in those
provisions. American Bank's Articles and Bylaws, contain no such provisions.
CERTAIN TRANSFER RESTRICTIONS RELATING TO 5-PERCENT SHAREHOLDERS. Article
IX of Hibernia's Articles of Incorporation restricts transfers of equity
interests in Hibernia under certain circumstances. This restriction (the "5-
Percent Restriction") is
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intended to protect Hibernia from certain transfers of equity interests which
could have a material adverse effect on Hibernia's ability to use certain tax
benefits to reduce its taxable income. Under the 5-Percent Restriction, if,
before December 29, 1995, a shareholder transfers or agrees to transfer Hibernia
stock or stock equivalents, the transfer will be prohibited and void to the
extent that it would result under applicable Federal income tax rules in the
identification of a new "5-percent shareholder" of Hibernia or an increase in
the percentage stock ownership of any existing "5-percent shareholder" is
increased.
The 5-Percent Restriction does not apply to any transfer which has been
approved in advance by the Board of Directors of Hibernia, or which is made in
compliance with exceptions established from time to time by resolution of the
Board of Directors. The Board of Directors may withhold its approval of a
transfer only if, in its judgment, the transfer may result in any limitation on
the use by Hibernia of its net operating loss carryforwards or built-in tax
losses or other tax attributes. The Board of Directors may adopt further
resolutions exempting additional transfers from the 5-Percent Restriction.
The 5-Percent Restriction may adversely affect the marketability of the
Hibernia Common Stock by discouraging potential investors from acquiring equity
securities of Hibernia. However, since its adoption in September 1992, the 5-
Percent Restriction does not appear to have had any such adverse affect on the
marketability of the Hibernia Common Stock.
While the 5-Percent Restriction may have the effect of impeding a
shareholder's attempt to acquire a significant or controlling interest in
Hibernia, the purpose of the 5-Percent Restriction is to preserve the tax
benefits of Hibernia's previous losses, not to insulate management from change.
Management of Hibernia believes the tax benefits outweigh any anti-takeover
impact of the 5-Percent Restriction. Any anti-takeover effect of the 5-Percent
Restriction will end with the termination of the 5-Percent Restriction on
December 29, 1995.
INDEMNIFICATION OF OFFICERS AND DIRECTORS. Hibernia's Articles of
Incorporation provide for indemnification of officers and directors of the
company under the circumstances permitted by Louisiana law. This
indemnification provision requires indemnification, except as prohibited by law,
of officers and directors of Hibernia or any of its wholly-owned subsidiaries
against expenses, judgments, fines and amounts paid in settlement actually and
reasonably incurred in connection with any action, suit or proceeding, whether
civil or criminal, administrative or investigative (including any action by or
in the right of Hibernia) by reason of the fact that the person served as an
officer or director of Hibernia or one of its subsidiaries. Officers and
directors may only be indemnified against expenses in cases brought
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by the officer or director against Hibernia if the action is a claim for
indemnification, the officer or director prevails in the action, or
indemnification is included in any settlement or is awarded by the court. The
indemnification provision further requires Hibernia to advance defense costs to
officers and directors in such suits and proceedings upon receipt of an
undertaking to repay such expenses unless it is ultimately determined that the
officer or director is entitled to indemnification as authorized by the Article.
American Bank's Bylaws provide that American Bank shall indemnify its
directors, officers, employees, and agents against expenses, judgments, fines
and amounts paid in settlement actually and reasonably incurred in connection
with any action, suit or proceeding, whether civil, criminal, administrative or
investigative (including any action by or in the right of American Bank), if
such person acted in good faith and in a manner he reasonably believed to be in
or not opposed to the best interests of American Bank, and, with respect to any
criminal action or proceeding, had no reasonable cause to believe his conduct
was unlawful. In the case of actions by or in the right of American Bank,
indemnification: (1) is limited to expenses (including attorneys' fees and
amounts paid in settlement not exceeding, in the judgment of the Board of
Directors of American Bank, the estimated expenses of litigating the action to
conclusion) actually and reasonably incurred in connection with the defense or
settlement of such action, and (2) will not be made in respect of any claim,
issue or matter as to which the person seeking indemnification has been adjudged
liable to American Bank for negligence or misconduct in the performance of his
duty to American Bank, unless and only to the extent the court determines upon
application that, despite the adjudication of liability but in view of all the
circumstances of the case, such person is fairly and reasonably entitled to
indemnification for such expenses which the court deems proper. Additionally,
American Bank's Bylaws authorize American Bank to purchase insurance against its
indemnification obligations.
ISSUANCE OF PREFERRED STOCK. Hibernia's articles of incorporation authorize
the issuance of up to 100 million shares of preferred stock on such terms and
conditions as may be determined by the Board of Hibernia from time to time,
commonly referred to as "blank check preferred". Hibernia may therefore issue
such stock at any time and from time to time as it deems appropriate. American
Bank's articles of association do not authorize the issuance of blank check
preferred stock.
APPLICATION OF CERTAIN LOUISIANA STATUTES. As a Louisiana corporation,
Hibernia is subject to all of the rights and obligations set forth in the LBCL,
including, but not limited to, the application of certain statutes designed to
deter hostile bids for control of Louisiana corporations by limiting the voting
rights
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of shareholders in some circumstances and requiring, absent compliance with
certain extraordinary voting provisions, that all shareholders be paid the same
price in the event of a merger not negotiated by management of a Louisiana
company. American Bank is not subject to these provisions of the LBCL because
it is not a "corporation" within the meaning of the LBCL.
INTERESTS OF CERTAIN PERSONS IN THE MERGER
INDEMNIFICATION OF AMERICAN BANK DIRECTORS. The terms of the Agreement
include certain provisions that protect the officers and directors of American
Bank from and against liability for actions arising while they served in those
capacities for American Bank. The Agreement provides for indemnification of
such persons to the same extent as they would have been indemnified under the
Articles of Association and Bylaws of HNB in effect on September 19, 1994,
except that the Agreement limits HNB's aggregate liability for such
indemnification to $5 million and requires each officer and director eligible
for such indemnification to execute a joinder agreement in which each such
person agrees to cooperate with HNB in any litigation or proceeding giving rise
to a claim of indemnification and to permit HNB to participate in and, at its
option assume the defense of, such litigation or proceeding.
The Agreement also provides for indemnification of American Bank's officers,
directors and certain affiliates from and against liability arising under the
Securities Act or otherwise if such liability arises out of or is based on an
untrue statement or omission of a material fact required to be stated in the
Registration Statement, including this Proxy Statement-Prospectus, or in any
amendment or supplement thereto, or necessary to make the statements made in any
of the foregoing not misleading. This indemnification does not apply to
statements made in reliance on information furnished to Hibernia by American
Bank for use in the Registration Statement, including this Proxy Statement-
Prospectus.
SEVERANCE AND RETENTION BENEFITS. Certain severance plans and retention
agreements were adopted by American Bank in 1994 to encourage its employees and
senior management to continue their employment with American Bank in the context
of ongoing merger discussions between American Bank and certain non-affiliated
financial institutions as described elsewhere herein.
Pursuant to such severance plans and retention agreements, employees of
American Bank who work at least 30 hours per week and have been employed by
American Bank for at least six months will receive severance and retention
benefits based upon years of service and level of compensation if they remain in
the employ of American Bank until the date of the Merger and either are not
offered employment by Hibernia or HNB following the Merger, are offered
employment with Hibernia or HNB that is not "comparable employment" (as defined
in the severance plans) to such employee's
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position with American Bank immediately prior to the Merger, or are terminated
by Hibernia or HNB following the Merger other than "for cause" (as defined in
the severance plans). If the Merger is consummated and the other conditions of
the severance plan and retention agreement applicable to American Bank's
executive officers are satisfied, each executive officer of American Bank (other
than Darryl J. Chauvin, American Bank's President and Chief Executive Officer)
will receive severance and retention benefits equal to between 18 and 30 months
of such officer's total compensation on a monthly basis for 1994; provided,
however, that the aggregate severance and retention payment to any employee of
American Bank cannot exceed such severance benefits as are payable to Mr.
Chauvin pursuant to his employment agreement, the severance terms of which are
described below.
In addition, Mr. Chauvin currently has an employment agreement with American
Bank that provides for certain severance payments if Mr. Chauvin is terminated
or voluntarily resigns his employment within the thirty days immediately
following a "Change of Control" of American Bank (such term, as defined in such
agreement, includes the Merger). As a result, if the Merger is consummated and
he is terminated or voluntarily resigns his employment within the first thirty
days following consummation of the Merger, Mr. Chauvin will be entitled to a
severance payment equal to his full base salary at regular intervals for the
thirty-six months following his termination or resignation, and a bonus equal to
the average of the annual incentive compensation received by Mr. Chauvin during
each of the five years immediately preceding his termination or resignation,
which bonus shall be payable at the conclusion of each succeeding year that ends
during the thirty-six months following his termination or resignation.
ADVISORY BOARD OF DIRECTORS. As of the Effective Date, the directors of
American Bank will no longer hold their positions as directors. American Bank's
rights and obligations under Mr. Chauvin's employment contract will be assumed
by Hibernia upon consummation of the Merger. In addition, Hibernia maintains a
city advisory board of directors in the Baton Rouge region of Louisiana on which
some or all of the directors of American Bank and its subsidiaries may serve.
MATERIAL TAX CONSEQUENCES
The following is a summary description of the material federal income tax
consequences of the Merger; it is not intended to be a complete description of
the federal income tax consequences of the Merger. Tax laws are complex, and
each shareholder's individual circumstances may affect the tax consequences to
such shareholder. In addition, no information is provided with respect to the
tax consequences of the Merger under applicable state, local or other tax laws.
Each shareholder is therefore urged to consult a tax
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advisor regarding the tax consequences of the Merger to him or her.
Consummation of the Merger is conditioned upon the receipt of an opinion to
the effect that the Merger, when consummated in accordance with the terms of the
Agreement, will constitute a reorganization within the meaning of Section 368(a)
of the Code, and that the exchange of American Bank Common Stock for Hibernia
Common Stock will not give rise to the recognition of gain or loss for federal
income tax purposes to American Bank's shareholders with respect to such
exchange. See "PROPOSED MERGER --Representations and Warranties; Conditions to
the Merger; Waiver."
If the Merger constitutes a reorganization within the meaning of Section
368(a) of the Code: (i) no gain or loss will be recognized by American Bank,
Hibernia or HNB by reason of the Merger; (ii) a shareholder of American Bank
will not recognize any gain or loss for federal income tax purposes to the
extent Hibernia Common Stock is received in the Merger in exchange for American
Bank Common Stock; (iii) the tax basis in the Hibernia Common Stock received by
a shareholder of American Bank will be the same as the tax basis in the American
Bank Common Stock surrendered in exchange therefor; and (iv) the holding period,
for federal income tax purposes, for Hibernia Common Stock received in exchange
for American Bank Common Stock will include the period during which the
shareholder held the American Bank Common Stock surrendered in the exchange,
provided that the American Bank Common Stock was held as a capital asset at the
Effective Date.
Cash received in lieu of fractional shares of Hibernia Common Stock will be
treated as if the fractional shares were distributed as part of the exchange and
then were redeemed by Hibernia. These cash payments may result in the
recognition of gain or loss, depending upon the shareholder's basis in the
shares of American Bank Common Stock exchanged. Any gain or loss recognized
will generally be a capital gain or loss if the American Bank Common Stock held
by the shareholder was a capital asset.
The Louisiana income tax treatment of the Merger to the shareholders of
American Bank should be substantially the same as the federal income tax
treatment to the shareholders of American Bank described above. Shareholders
residing in states other than Louisiana are encouraged to consult their tax
advisors regarding the state income tax implications of the Merger to them.
The parties have received the opinion of Ernst & Young LLP, certified public
accountants, to the effect that the Merger, if consummated in accordance with
the terms of the Agreement, will constitute a reorganization for purposes of
Section 368(a) of the Code and will have the tax effects described in this
section. A copy of the opinion of Ernst & Young LLP in this regard is attached
hereto as Appendix D. As noted in the opinion, the opinion is based upon
certain representations and assumptions described
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therein. Shareholders of American Bank are urged to review the full text of the
opinion of Ernst & Young LLP attached hereto as Appendix D with regard to the
tax consequences of the Merger to them.
For information regarding the federal income tax consequences of cash
payments received by dissenting shareholders, see "PROPOSED MERGER -- Rights of
Dissenting Shareholders."
RESALE OF HIBERNIA COMMON STOCK
The shares of Hibernia Common Stock issuable to shareholders of American
Bank upon consummation of the Merger have been registered under the Securities
Act. It is a condition to closing of the Merger that all shares of Hibernia
Common Stock issued in connection with the Merger be approved for listing, upon
official notice of issuance, on the NYSE. Such shares may be traded freely by
those shareholders not deemed to be affiliates of American Bank as that term is
defined under the Securities Act. The term "affiliate" generally means each
person who controls, or is a member of a group that controls, or who is under
common control with, American Bank, and for purposes hereof could be deemed to
include all executive officers, directors and 10% shareholders of American Bank.
Hibernia Common Stock received and beneficially owned by those shareholders
who are deemed to be affiliates of American Bank may be resold without
registration as provided by Rule 145, or as otherwise permitted, under the
Securities Act. Such affiliates, provided they are not affiliates of Hibernia
Corporation, may publicly resell Hibernia Common Stock received by them in the
Merger subject to certain limitations, principally as to the manner of sale,
during the two years following the Effective Date. After the two-year period,
such affiliates may resell their shares without restriction. In addition,
shares of Hibernia Common Stock issued to affiliates of American Bank in the
Merger will not be transferable until financial statements pertaining to at
least 30 days of post-Merger combined operations of Hibernia and American Bank
have been published, in order to satisfy certain requirements of the Commission
relating to pooling-of-interests accounting treatment.
The Agreement provides that American Bank will use its best efforts to
identify those persons who may be deemed to be affiliates of American Bank and
to cause each person so identified to deliver to Hibernia a written agreement
providing that such person will not dispose of American Bank Common Stock or
Hibernia Common Stock received in the Merger except in compliance with the
Securities Act, the rules and regulations promulgated thereunder and the
Commission's rules relating to pooling-of-interests accounting treatment. In
addition, Hibernia intends to place stop transfer instructions with its
transfer agent regarding Hibernia
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<PAGE>
Common Stock issued to affiliates of American Bank.
RIGHTS OF DISSENTING SHAREHOLDERS
Under the applicable federal laws governing mergers involving national banks
such as HNB, each shareholder of American Bank who complies with the provisions
of Section 376 of the Louisiana Banking Law, La. R.S. 6:376, may dissent from
the Merger and be paid the fair cash value of his shares of American Bank Common
Stock as of the Effective Date, determined as described below.
To exercise the right of dissent, a shareholder must file with American
Bank, prior to the Special Meeting, a written objection to the Merger and must
vote his shares against the Merger. Notices of dissent should be addressed to
Sharon B. Kell, Vice President and Cashier, American Bank, 22 Apple Street,
Norco, Louisiana 70079-2214.
If the Merger is effected, American Bank will send a notice to each
shareholder who filed an objection and voted his shares against the Merger to
such shareholder's last address on American Bank's records. Within twenty (20)
days after the mailing of such notice, but not thereafter, the shareholder may
file with American Bank a demand in writing for the fair cash value of his
shares as of the day before the Special Meeting. Such demand must contain the
value of the shares demanded and a post office address to which a reply may be
sent. At the same time, such shareholder must deposit in escrow in a bank or
trust company located in St. Charles Parish, Louisiana the certificates
representing his shares on the sole condition that such shares shall be
delivered to American Bank upon payment of the fair cash value in accordance
with the Louisiana Banking Law. Together with the shareholders' demand, such
shareholder shall deliver to American Bank the written acknowledgment of the
escrow bank or trust company that such bank or trust company holds the
shareholder's certificates.
Unless the objection, demand, and acknowledgment described above are made
and delivered by the shareholder within the period described above, the
shareholder shall be conclusively presumed to have acquiesced to the Merger.
If American Bank disagrees with the value requested by a shareholder it
shall, within twenty (20) days, notify the shareholder of the value that
American Bank will agree to pay if any payment should be held to be due;
otherwise American Bank shall be liable for and pay the value demanded by the
shareholder. In the case of a disagreement as to the fair cash value, the
shareholder may file suit in the district court in the parish in which American
Bank or HNB is domiciled. The court will determine if payment is due, and, if
so, the fair cash value to be paid to the shareholder. If American Bank, in its
notice of disagreement, has offered to pay the dissatisfied shareholder an
amount in cash
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<PAGE>
deemed by it to be the fair cash value, and shall have deposited such amount in
the registry of the court, then, if the amount ultimately awarded (exclusive of
interest and costs) is more than the amount so offered, the costs of the
proceeding will be paid by American Bank or HNB, as the case may be; otherwise,
the costs of the proceeding shall be paid by the dissatisfied shareholder.
THE FOREGOING SUMMARY OF THE PROVISIONS OF THE LOUISIANA BANKING LAW
RELATING TO DISSENTERS' RIGHTS IS NECESSARILY INCOMPLETE AND IS QUALIFIED IN ITS
ENTIRETY BY REFERENCE TO EXCERPTS FROM THE FEDERAL AND STATE BANKING LAWS SET
FORTH HEREIN AS APPENDIX C.
Shareholders of American Bank who exercise and perfect dissenters' rights
and who receive cash for their shares of American Bank Common Stock will
generally be subject to federal and state income tax on all or a portion of the
amount of cash received. Furthermore, if the Merger is effected, the cash paid
to dissenting shareholders may be more or less than the value of the Hibernia
Common Stock issued to those shareholders of American Bank who voted in favor of
the Merger. The receipt of cash for shares will be treated as a complete
redemption of the shareholder's interest in the stock and, depending on the
individual shareholder's circumstances, may result in a capital gain to him.
The tax opinion rendered by Ernst & Young LLP and attached hereto as Appendix D
addresses the payments to dissenting shareholders and states that those payments
are not covered by the opinion and therefore are not exempt from federal or
state income tax. Shareholders desiring to dissent from the Merger are urged to
consult their tax advisors with regard to the tax implications to them of
exercising dissenters' rights.
SHAREHOLDERS OF AMERICAN BANK DESIRING TO EXERCISE DISSENTERS' RIGHTS SHOULD
BE AWARE THAT THE EXERCISE OF DISSENTERS' RIGHTS BY ANY SHAREHOLDER MAY RESULT
IN THE MERGER FAILING TO QUALIFY AS A POOLING OF INTERESTS. IN THAT EVENT,
HIBERNIA WOULD HAVE THE RIGHT TO TERMINATE THE AGREEMENT AND, IF HIBERNIA
EXERCISED THAT RIGHT, THE MERGER WOULD NOT OCCUR. SEE "--ACCOUNTING TREATMENT,"
BELOW.
DIVIDEND REINVESTMENT PLAN
Hibernia Corporation maintains a Dividend Reinvestment Plan through which
shareholders of Hibernia who participate in the plan may reinvest dividends in
Hibernia Common Stock. Shares are purchased for participants in the plan at
their market value as determined by the market price of the stock as listed on
the NYSE. The plan also permits participants to purchase additional shares with
cash at the then-current market price. All shares purchased through the plan
are held in a separate account for each participant maintained by Hibernia's
transfer agent. Shareholders who participate in the Dividend Reinvestment Plan
purchase shares through the plan without paying brokerage commissions or other
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<PAGE>
costs ordinarily associated with open market purchases of stock. It is
anticipated that the Dividend Reinvestment Plan will continue after the
Effective Date and that shareholders of American Bank who become shareholders of
Hibernia will have the same opportunity to participate in the plan as other
shareholders of Hibernia.
ACCOUNTING TREATMENT
It is anticipated that the Merger will be accounted for as a "pooling-of-
interests" transaction. In order for the Merger to qualify for pooling-of-
interests accounting treatment, 90% or more of the outstanding American Bank
Common Stock must be exchanged for Hibernia Common Stock. Consequently, the
amount of American Bank Common Stock that will not be exchanged cannot exceed
10% of its shares outstanding.
Included in the 10% calculation for this purpose are (i) any shares held by
Hibernia or its affiliates, (ii) any fractional shares that are cashed out in
the Merger, (iii) certain treasury shares of American Bank, and (iv) shares as
to which dissenters' rights have been exercised and perfected. As of the date
of this Proxy Statement-Prospectus, it appears that the 10% limitation may be
exceeded if any shareholder of American Bank exercises dissenters' rights, as
Hibernia acquired over 9% of American Bank's Common Stock as a result of its
merger with First Continental Bancshares and the terms of the Merger provide for
cash to be exchanged for fractional shares.
Also, in order for the pooling-of-interests accounting method to apply,
"affiliates" of American Bank cannot reduce their holdings of Hibernia Common
Stock received in the Merger for a period beginning 30 days prior to the
Effective Date and ending upon the publication of at least 30 days of post-
Merger combined operations of American Bank and Hibernia. Persons believed by
American Bank to be "affiliates" have agreed to comply with these restrictions.
American Bank has agreed to use its best efforts to permit the transaction
to be accounted for as a pooling-of-interests. Hibernia is not obligated to
consummate the Merger if the Merger does not qualify for pooling-of-interests
accounting treatment.
CERTAIN REGULATORY CONSIDERATIONS
GENERAL
As a bank holding company, Hibernia is subject to the regulation and
supervision of the Board of Governors of the Federal Reserve System ("Federal
Reserve Board"). Under the BHCA, bank holding companies may not directly or
indirectly acquire the ownership or control of more than 5% of the voting shares
or substantially all of the assets of any company, including a bank,
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<PAGE>
without the prior approval of the Federal Reserve Board. In addition, bank
holding companies are generally prohibited from engaging under the BHCA in
nonbanking activities, subject to certain exceptions.
Hibernia's banking subsidiary, HNB, is subject to supervision and
examination by applicable federal and state banking agencies. HNB is a national
banking association subject to the regulation and supervision of the OCC. HNB
is also subject to various requirements and restrictions under federal and state
law, including requirements to maintain reserves against deposits, restrictions
on the types and amounts of loans that may be granted and the interest that may
be charged thereon and limitations on the types of investments that may be made
and the types of services that may be offered. Various consumer laws and
regulations also affect the operations of HNB. In addition to the impact of
regulation, commercial banks are affected significantly by the actions of the
Federal Reserve Board as it attempts to control the money supply and credit
availability in order to influence the economy.
PAYMENT OF DIVIDENDS
Hibernia generally depends upon payment of dividends by HNB in order to pay
dividends to its shareholders and to meet its other needs for cash to pay
expenses. Hibernia derives substantially all of its income from the payment of
dividends by HNB, and its ability to pay dividends is affected by the ability of
HNB to pay dividends. HNB is subject to various statutory restrictions on its
ability to pay dividends to Hibernia. Under such restrictions, the amount
available for payment of dividends to Hibernia by HNB was approximately $61
million at December 31, 1993. In addition, the OCC has the authority to
prohibit any national bank from engaging in an unsafe or unsound practice, and
the OCC has indicated its view that it generally would be an unsafe and unsound
practice to pay dividends except out of current operating earnings. The ability
of HNB to pay dividends in the future is presently, and could be further,
influenced by bank regulatory policies or agreements and by capital guidelines.
Additional information in this regard is contained in documents incorporated by
reference herein. See "AVAILABLE INFORMATION."
In addition, consistent with its policy regarding bank holding companies
serving as a source of strength for their subsidiary banks, the Federal Reserve
Board has stated that, as a matter of prudent banking, a bank holding company
generally should not maintain a rate of cash dividends unless its net income
available to common stockholders has been sufficient to fully fund the
dividends, and the prospective rate of earnings retention appears to be
consistent with the holding company's capital needs, asset quality and overall
financial condition.
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<PAGE>
RESTRICTIONS ON EXTENSIONS OF CREDIT
HNB is subject to restrictions imposed by federal law on the ability of any
national bank to extend credit to affiliates, including Hibernia, to purchase
the assets thereof, to issue a guarantee, acceptance or letter of credit on
their behalf (including an endorsement or standby letter of credit) or to
purchase or invest in the stock or securities thereof or to take such stock or
securities as collateral for loans to any borrower. Such extensions of credit
and issuances generally must be secured by eligible collateral and are generally
limited to 15% of HNB's capital and surplus.
CERTAIN INFORMATION CONCERNING AMERICAN BANK
DESCRIPTION OF THE BUSINESS
American Bank, a Louisiana state bank organized in 1964, provides full-
service consumer and commercial banking services in Norco, Louisiana and
surrounding areas of St. Charles Parish, Louisiana, through its main banking
office at 22 Apple Street, Norco, Louisiana, and four full service branches
located in Boutte, Destrehan, Hahnville and Luling, Louisiana. Deposits of
American Bank are insured by the Federal Deposit Insurance Corporation ("FDIC")
up to applicable legal limits. American Bank offers an array of deposit
services, including demand accounts, NOW accounts, certificates of deposit, and
money market accounts, and provides safe deposit boxes, night depository,
individual retirement accounts, and drive-in banking services. American Bank's
lending activities consist principally of real estate, consumer, and commercial
loans. At September 30, 1994, American Bank had total deposits of approximately
$82.2 million, total assets of approximately $92.7 million, and shareholders'
equity of approximately $9.3 million.
American Bank's deposits represent a cross-section of the area's economy and
there is no material concentration of deposits from any single customer or group
of customers. No significant portion of American Bank's loans is concentrated
within a single industry or group of related industries. There are no material
seasonal factors that would have an adverse effect on American Bank.
COMPETITION
American Bank's general market area is the Greater New Orleans Metropolitan
Area, which has an approximate population of 1,200,000 and in which there are
numerous banks and other financial institutions. American Bank's primary market
area, St. Charles Parish, has a current population of approximately 42,000.
Competition among banks for loan customers is generally
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<PAGE>
governed by such factors as loan terms, including interest charges, restrictions
on borrowers and compensating balances, and other services offered by such
banks. American Bank competes with numerous other commercial banks, savings and
loan associations and credit unions for customer deposits, as well as with a
broad range of financial institutions in consumer and commercial lending
activities. In addition to thrift institutions, other businesses in the
financial services industry compete with American Bank for retail and commercial
deposit funds and for retail and commercial loan business. Competition for
loans and deposits is intense among the financial institutions in the area.
At present, several holding companies with greater resources than those of
American Bank have acquired banks or established branches in American Bank's
market area and are continuing to do so. The size of these institutions allows
certain economies of scale that permit their operation on a narrower profit
margin than would be appropriate for American Bank.
PROPERTY
The executive office of American Bank, located at 22 Apple Street, Norco,
Louisiana, is owned by American Bank and is not subject to a mortgage. American
Bank also owns the building and land where its Boutte, Destrehan and Luling
branches are located. American Bank leases the building and land where its
Hahnville branch is located and the offices in which its New Orleans loan
production office is located, under leases that expire in August and June 1995,
respectively. The lease agreement relating to the Hahnville branch is subject
to a single renewal option for an additional two-year term. None of the
properties owned by American Bank is subject to a mortgage.
EMPLOYEES
American Bank has approximately 60 full-time and 13 part-time employees and
considers its relationship with its employees to be good. None of American
Bank's employees are subject to a collective bargaining agreement.
MARKET PRICES AND DIVIDENDS
MARKET PRICES. American Bank Common Stock is not traded on any exchange or
in any other established public trading market. There are no bid or asked
prices available for American Bank Common Stock.
At December 30, 1994, there were 508 shareholders of Bank.
CASH DIVIDENDS. American Bank declared a cash dividend on Bank Common Stock
of $.10 per share during the fiscal year ended December 31, 1993 and did not
declare a dividend during the fiscal
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year ended December 31, 1992. American Bank has agreed in the Agreement that it
will not make, declare, set aside or pay any dividend prior to the Effective
Date of the Merger without the written consent of Hibernia.
American Bank's payment of dividends is subject to certain legal
restrictions applicable to all Louisiana state banks. The prior approval of the
Louisiana Commissioner of Financial Institutions (the "Commissioner") is
required if the total of all dividends declared in any one year will exceed the
sum of American Bank's net profits of that year and net profits of the
immediately preceding year. Additionally, dividends may not be declared or paid
by a Louisiana state bank unless the bank has unimpaired surplus equal to 50% of
the outstanding capital stock of the bank, and no dividend payment may reduce
the bank's unimpaired surplus below 50%. At September 30, 1994, American Bank
had approximately $3.6 million available for the payment of dividends without
prior approval of the Commissioner.
LEGAL PROCEEDINGS
American Bank normally is a party to and has pending routine litigation
arising from its regular business activities of furnishing financial services,
including providing credit and collecting secured and unsecured indebtedness.
In some instances, such litigation involves claims or counterclaims against
American Bank. As of September 30, 1994, American Bank did not have any
litigation pending other than ordinary routine litigation incidental to its
business that was not material in amount in respect of American Bank's assets.
SECURITY OWNERSHIP OF PRINCIPAL SHAREHOLDERS. Except for the American Bank
Common Stock, American Bank has no other class of voting securities issued or
outstanding. The following table provides information concerning all persons
known to American Bank to be beneficial owners, directly or indirectly, of more
than 5% of the outstanding shares of American Bank Common Stock, as of the
Record Date. Unless otherwise noted, the named persons own the shares directly
and have sole voting and investment power with respect to the shares indicated.
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<PAGE>
<TABLE>
<CAPTION>
Number of
Name and Address Shares Owned Percent
of Beneficial Owner Beneficially of Class
- ------------------------ --------------- ---------
<S> <C> <C>
Hibernia Corporation 47,763(1) 9.87%
313 Carondelet Street
New Orleans, LA 70130
Gerald H. Smith 120,527(2) 24.92%
P.O. Box 131405
Houston, TX 77219
R. Preston Wailes 61,915(3) 12.80%
1528 Nashville Avenue
New Orleans, LA 70115
- ----------------------------------------------------
</TABLE>
* Less than one percent of class
(1) Includes 1,100 shares held of record by Hibernia and 46,663 shares held of
record by HNB.
(2) Includes 98,305 shares held of record by Mr. Smith and 22,222 shares held
of record by Mr. Smith as trustee for Elizabeth Smith.
(3) Includes 4,432 shares held of record by Mr. Wailes and 57,483 shares held
of record by Martha P. Wailes, Mr. Wailes' wife, as to which shares Mr.
Wailes disclaims beneficial ownership.
OWNERSHIP OF DIRECTORS AND EXECUTIVE OFFICERS OF AMERICAN BANK. The
following table provides information concerning the shares of American Bank
Common Stock beneficially owned, directly or indirectly, by each director and
executive officer of American Bank, and all directors and executive officers as
a group, as of the Record Date. Unless otherwise noted, the named persons have
sole voting and investment power with respect to the shares indicated.
<TABLE>
<CAPTION>
Number of
Shares Owned Percent
Name of Beneficial Owner Beneficially of Class
- -------------------------- --------------- ---------
<S> <C> <C>
Elton A. Arceneaux, Jr. 13,663(1) 2.82%
Larry Babin 1,040 *
Darryl J. Chauvin 1,200 *
Manuel V. Dugas 2,024 *
Steven F. Griffith, Sr. 1,000 *
E.L. Holmes 6,164(2) 1.27%
</TABLE>
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<PAGE>
<TABLE>
<CAPTION>
Number of
Shares Owned Percent
Name of Beneficial Owner Beneficially of Class
- -------------------------- --------------- ---------
<S> <C> <C>
A.J. Migliore 2,990(3) *
R. Preston Wailes 61,915(4) 12.80%
R.C. Zeringue 2,332(5) *
All Directors and 92,328 19.09%
Executive Officers
as a Group (10 persons)
- ------------------------------------------------------
</TABLE>
* Less than one percent of class
(1) Includes 7,599 shares held of record by Mr. Arceneaux. Also includes 120
shares held of record by Linda P. Arceneaux, Mr. Arceneaux's wife, 2,474
shares held of record by Ms. Arceneaux and Anna C. Arceneaux, 838 shares
held of record by Ms. Arceneaux and Charisse Webb for Elise Webb, 837
shares held of record by Ms. Arceneaux and Charisse Webb for Travis Webb,
838 shares held of record by Ms. Arceneaux and Randal Arceneaux for Daniel
Arceneaux, 837 shares held of record by Ms. Arceneaux and Randal Arceneaux
for Adam Arceneaux, and 120 shares held of record by Ms. Arceneaux as
trustee for the Jonathan Adam Arceneaux Trust, as to which shares Mr.
Arceneaux disclaims beneficial ownership.
(2) Includes 1,000 shares held of record by Mr. Holmes and 5,164 shares held of
record by Mr. Holmes and Mary Holmes, Mr. Holmes' wife.
(3) Includes 1,080 shares held of record by Mr. Migliore and 1,910 shares held
of record by Mr. Migliore and Martha Migliore, Mr. Migliore's wife.
(4) Includes 4,432 shares held of record by Mr. Wailes and 57,483 shares held
of record by Martha P. Wailes, Mr. Wailes' wife, as to which shares Mr.
Wailes disclaims beneficial ownership.
(5) Includes 1,082 shares held of record by Mr. Zeringue and 1,100 shares held
of record by Mr. Zeringue and Mary Jane Zeringue, Mr. Zeringue's wife.
Also includes 100 shares in two equal lots held of record by Ms. Zeringue
as agent for Kevin Zeringue and Lannie C. Zeringue, 40 shares held of
record by Ms. Zeringue as agent for Corey J. Zeringue, and 10 shares held
of record by Ms. Zeringue as agent for Christy Ann Zeringue, as to which
shares Mr. Zeringue disclaims beneficial ownership.
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AMERICAN BANK MANAGEMENT'S DISCUSSION
AND ANALYSIS OF FINANCIAL CONDITION
AND RESULTS OF OPERATIONS
OVERVIEW
American Bank reported net income of $2,339,000 for the nine months ended
September 30, 1994, which represents a 130% increase from the net income of
$1,017,000 for the comparable period in 1993. Net income per share was $4.83
for the nine months ended September 30, 1994 and $2.10 for the same period in
1993. American Bank's net income for 1993 was $1,261,000, a 26% increase from
1992 net income of $1,001,000. Net income per share was $2.60 in 1993 and $2.07
in 1992.
The primary reasons for the improvement in net income during the first nine
months of 1994 over the first nine months of 1993 were a recovery on August 1,
1994 of a charged-off investment by American Bank in the 12% Mandatory
Convertible Subordinated Debentures due 1996 (the "FCB Debentures") of First
Continental Bancshares, Inc. ("FCB") and a negative provision for loan losses of
$370,000. Additionally, American Bank received approximately $152,000 upon the
conversion of FCB preferred stock owned by American Bank into Hibernia Common
Stock, representing cash in the amount of undeclared and accumulated dividends
on the FCB preferred stock, with interest, upon the merger of FCB with and into
Hibernia (the "FCB Merger"), which became effective on August 1, 1994. American
Bank received total cash proceeds of $1,346,000 on redemption of the FCB
Debentures, representing the principal amount of the FCB Debentures held by
American Bank, all accrued and unpaid interest, and a redemption premium, all of
which is included in pre-tax income for the nine month period ended September
30, 1994. Absent the recovery on the FCB Debentures and the gain associated
with the conversion of FCB preferred stock owned by American Bank in the FCB
Merger, American Bank would have recorded net income of $1,246,000 for the nine
months ended September 30, 1994, which represents a 22.5% increase over the same
period last year.
The improvement in net income over the two years ended December 31, 1993
was principally attributable to increases in average earning assets and lower
interest costs. Net income for 1993 also included $50,000 ($.10 per share) of
income related to the adoption by American Bank of a new accounting standard for
income taxes.
Improving loan quality and lower net charge-offs resulted in the negative
provision for loan losses during the first nine months of 1994, compared to no
provision during 1993 or 1992. Net interest income during the first nine months
of 1994 increased $191,000 to $3,924,000, which represents a 3.7% increase over
the same period of 1993. Net interest income in 1993 increased 10.2% from 1992,
from $4,320,000 to $4,762,000. The primary reasons for the increase from the
first nine months of 1993 to the comparable
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period in 1994 were increases in average earning assets and lower interest
costs. The increase from 1992 to 1993 is principally attributable to volume
change.
At September 30, 1994, American Bank had total assets and deposits of
$92,699,000 and $82,244,000, respectively, which represented decreases of 1.5%
and 4.7%, respectively, from amounts reported at December 31, 1993. Loans, net
of the reserve for possible loan losses, were $53,647,000 at September 30, 1994,
an increase of 3.8% from the amount reported at the end of 1993. The decrease
in assets as of September 30, 1994 when compared to December 31, 1993 is
principally due to a decline in public fund deposits, offset by increases in
American Bank's investments and loans. American Bank's total assets and
deposits are historically higher at year-end as the result of deposits of public
funds received from local taxing authorities.
The following table sets forth certain information regarding American
Bank's results of operations for the periods indicated.
<TABLE>
<CAPTION>
NINE MONTHS
ENDED YEAR ENDED
SEPTEMBER 30, DECEMBER 31,
------------------------ -----------------------
1994 1993 1993 1992
----------- ----------- ----------- ----------
<S> <C> <C> <C> <C>
(DOLLARS IN THOUSANDS, EXCEPT PER SHARE DATA)
Net income $2,339 $1,017 $1,261 $1,001
Net income per share* $ 4.83 $ 2.10 $ 2.60 $ 2.07
Return on average assets 2.48% 1.17% 1.45% 1.19%
Return on average equity 28.98% 15.11% 18.30% 17.36%
Average equity to average assets 8.56% 7.73% 7.93% 6.86%
Dividend pay-out ratio - - 3.85% -
</TABLE>
* Per share data are based upon a weighted average number of shares
outstanding of 483,686.
A more detailed review of American Bank's financial condition and
results of operations for the years ended December 31, 1993 and 1992 and the
nine months ended September 30, 1994 and 1993 follows. This discussion and
analysis should be read in conjunction with American Bank's financial statements
and the notes thereto appearing elsewhere in this Proxy Statement-Prospectus.
RESULTS OF OPERATIONS
NET INTEREST INCOME.
The principal component of American Bank's net earnings is net
interest income, which is the difference between interest and fees earned on
interest-earning assets and interest paid on deposits and borrowed funds. Net
interest income, when expressed as a percentage of total average interest-
earning assets, is referred to as net interest margin. Net interest income for
the nine months ended September 30, 1994 increased to $3,924,000 from $3,733,000
recorded for the comparable period in 1993, an increase of 5.1%.
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<PAGE>
1993 net interest income of $4,762,000 represents an increase of $442,000, or
10.2%, from net interest income of $4,320,000 reported for the year ended
December 31, 1992. The improvements in 1994 and 1993 were primarily the result
of increases in average earning assets and lower interest costs.
Average interest-earning assets were $84,985,000 for the nine months
ended September 30, 1994, $78,139,000 for 1993 and $73,469,000 for 1992.
Interest-earning assets were up significantly in 1994 due to strong loan demand.
Average loans, the Company's highest yielding assets, rose 21.6% from 1992 to
1993 and 13.3% from 1993 to September 30, 1994. Net interest margin decreased 2
basis points to 5.64% for the nine months ended September 30, 1994 from 5.66%
recorded for 1993. 1993 net interest margin represented a 15 basis point
increase from 1992 net interest margin of 5.51%.
American Bank's net interest income is affected by the change in the
amount and mix of interest-earning assets and interest-bearing liabilities, and
by changes in yields earned on assets and rates paid on deposits and other
borrowed funds. The following table sets forth certain information concerning
average interest-earning assets and interest-bearing liabilities and the yields
and rates thereon for the periods presented. Average balances are computed
using daily average balances.
<TABLE>
<CAPTION>
NINE MONTHS ENDED
SEPTEMBER 30, 1994 YEAR ENDED DECEMBER 31, 1993 YEAR ENDED DECEMBER 31, 1992
----------------------------- ---------------------------------- ----------------------------------
INTEREST AVERAGE INTEREST AVERAGE INTEREST AVERAGE
AVERAGE INCOME/ YIELD/ AVERAGE INCOME/ YIELD/ AVERAGE INCOME/ YIELD/
BALANCE EXPENSE RATE BALANCE EXPENSE RATE BALANCE EXPENSE RATE
--------- -------- -------- --------- ----------- ----------- --------- ----------- ----------
<S> <C> <C> <C> <C> <C> <C> <C> <C> <C>
(DOLLARS IN THOUSANDS)
INTEREST-EARNING ASSETS:
Loans $52,994 $3,620 9.11% $46,777 $4,358 9.32% $38,468 $4,080 10.61%
Interest-bearing deposits
with financial 166 4 3.47% 189 6 3.27% 89 4 4.30%
institutions 25,211 1,176 6.22% 26,948 1,777 6.59% 30,159 2,250 7.46%
Investment securities 6,614 179 3.56% 4,225 125 2.95% 4,753 159 3.35%
Federal funds sold ------- ------ ------- ------ ------- ------
Total interest-earning 7.81% 8.02% 8.84%
assets $84,985 $4,979 $78,139 $6,266 $73,469 $6,493
------- ------ ------- ------ ------- ------
INTEREST-BEARING
LIABILITIES:
Deposits: $12,667 $ 205 2.17% $12,949 $ 306 2.36% $13,081 $ 396 3.03%
Money market demand
Savings and other 28,685 453 2.10% 25,175 570 2.26% 23,904 672 2.81%
interest- 29,053 $ 721 3.30% $27,621 $ 965 3.49% $29,084 $1,375 4.73%
bearing demand ------- ------ ------- ------ ------- ------
Time deposits
Total interest-bearing
liabilities $70,405 $1,379 2.62% $65,745 $1,841 2.80% $66,069 $2,443 3.70%
------- ------ ------- ------ ------- ------
Net interest income $3,600 $4,425 $4,050
------ ------ ------
Net interest margin 5.64% 5.66% 5.51%
</TABLE>
The following table sets forth changes in interest income and interest
expense for each major category of interest-earning assets and interest-bearing
liabilities and the amount of change attributable to volume change and rate
change for the periods indicated. The change in interest income due to both
volume change and rate change has been allocated to volume change.
73
<PAGE>
<TABLE>
<CAPTION>
YEARS ENDED DECEMBER 31, 1993 AND 1992 YEARS ENDED DECEMBER 31, 1992 AND 1991
INCREASE (DECREASE) DUE TO CHANGES IN INCREASE (DECREASE) DUE TO CHANGES IN
----------------------------------------- -------------------------------------------------
NET NET
VOLUME RATE CHANGE VOLUME RATE CHANGE
------------- ------------ ------------ ------- ------------------- -------------------
<S> <C> <C> <C> <C> <C> <C>
(DOLLARS IN THOUSANDS)
INTEREST-EARNING ASSETS:
Loans $ 572 $(293) $ 279 $201 $ (19) $ 182
Interest-bearing deposits with
financial institutions 3 (1) 2 - (2) (2)
Investment securities (211) (262) (473) 133 (233) (100)
Federal funds sold (15) (20) (35) 35 (86) (51)
----- ----- ----- ---- ------- -------
Total $ 349 $(576) $(227) $369 $ (340) $ 29
===== ===== ===== ==== ======= =======
INTEREST-BEARING LIABILITIES:
Money market demand $ (3) $ (88) $ (91) $ 43 $ (231) $ (188)
Savings and other interest-
bearing deposits 29 (131) (102) 77 (442) (365)
Time deposits (50) (361) (411) (49) (566) (615)
Federal funds purchased - - - - - -
----- ----- ----- ---- ------- -------
Total $ (24) $(580) $(604) $ 71 $(1,239) $(1,168)
===== ===== ===== ==== ======= =======
Interest differential $ 373 $ 4 $ 377 $298 $ 899 $ 1,197
</TABLE>
PROVISION FOR LOAN LOSSES.
The provision for loan losses is the periodic charge to earnings for potential
losses in the loan portfolio. The amounts provided for loan losses are
determined by management after evaluations of the loan portfolio. This
evaluation process requires that management apply various judgments, assumptions
and estimates concerning the impact certain factors may have on amounts
provided. Factors considered by management in its evaluation process include
known and inherent losses in the loan portfolio, the current economic
environment, the composition of and risk in the loan portfolio, prior loss
experience and underlying collateral values. While management considers the
amounts provided through September 30, 1994 to be adequate, subsequent changes
in these factors and related assumptions may warrant significant adjustments in
amounts provided, based on conditions prevailing at the time. In addition,
various regulatory agencies, as an integral part of the examination process,
review American Bank's allowance for loan losses. Such agencies may require
American Bank to make additions to the allowance based on their judgments of
information available to them at the time of their examinations.
The provision for loan losses for the nine months ended September 30, 1994 and
1993 was $(370,000) and $-0-, respectively. No provision for loan losses was
made for the years ended December 31, 1993 and 1992. Fewer nonperforming loans
and lower net charge-offs resulted in the negative provision for loan losses in
1994. A continuation of negative provisions is unlikely, although any provision
in the fourth quarter of 1994 is not expected to be significant.
74
<PAGE>
NON-INTEREST INCOME.
Non-interest income, excluding securities transactions, was $829,000 for the
nine months ended September 30, 1994, compared to $650,000 for the comparable
period of 1993. Non-interest income, excluding securities transactions, was
$1,180,000 for the year ended December 31, 1993, compared to $1,326,000 for
1992. The increase in non-interest income from September 30, 1993 to the
comparable period in 1994 was attributable primarily to the receipt of $152,000
in accumulated and unpaid dividends, and interest thereon, on FCB preferred
stock owned by American Bank, upon the conversion of such FCB preferred stock in
the FCB Merger, and increased commissions on the sale of credit life insurance.
The decrease in non-interest income from 1992 to 1993 was due principally to
decreases in income booked on Owned Real Estate and credit life insurance
commissions.
NON-INTEREST EXPENSE.
Non-interest expense for the nine months ended September 30, 1994 and 1993 was
$3,007,000 and $2,994,000, respectively, a .43% increase. Non-interest expense
for the year ended December 31, 1993 decreased $79,000, or 1.83%, from 1992.
The decrease in non-interest expense during these periods was attributable
principally to decreased loan collection and ORE expense.
INCOME TAXES.
American Bank's provision for income taxes was $1,123,000 for the nine months
ended September 30, 1994, compared to $438,000 for the nine months ended
September 30, 1993. Such provision was $508,000 for 1993 compared to $422,000
for 1992. The increase from the first nine months of 1993 to the comparable
period of 1994 was due principally to the increase in pre-tax income associated
with the recovery on the FCB Debentures. The increase from 1992 to 1993 was due
primarily to an increase in pre-tax income from 1992 to 1993 of $296,000 and an
increase in the marginal federal income tax rate from 34% to 35%.
American Bank adopted a new standard for accounting for income taxes effective
January 1, 1993. Under Statement of Financial Accounting Standards No. 109
("SFAS 109") deferred income taxes are provided for by the liability method.
The effect of adopting SFAS 109 was a one-time increase in the deferred tax
asset by $50,000, which is reflected in American Bank's Statement of Income for
1993 as the cumulative effect of an accounting change.
75
<PAGE>
FINANCIAL CONDITION
The following table sets forth the Company's average assets, liabilities and
shareholders' equity and the percentage distribution of these items for the
periods indicated.
<TABLE>
<CAPTION>
YEAR ENDED DECEMBER 31,
NINE MONTHS ENDED ---------------------------------------
SEPTEMBER 30, 1994 1993 1992
------------------ ------------------- ------------------
AVERAGE AVERAGE AVERAGE
BALANCE PERCENT BALANCE PERCENT BALANCE PERCENT
--------- -------- --------- -------- -------- --------
<S> <C> <C> <C> <C> <C> <C>
(DOLLARS IN THOUSANDS)
ASSETS:
Cash and due from banks $ 2,107 2.26% $ 2,185 2.51% $ 2,267 2.69%
Interest-bearing deposits with
financial institutions 166 .18% 189 .22% 89 .11%
Investment securities 25,211 27.05% 26,948 31.02% 30,159 35.85%
Federal funds sold 6,614 7.10% 4,225 4.86% 4,753 5.65%
Loans (net of allowance for
credit losses) 52,994 56.88% 46,777 53.85% 38,468 45.73%
Other assets 6,082 6.53% 6,549 7.54% 8,384 9.97%
------- ------ -------- ------ ------- ------
Total assets
$93,174 100.00% $ 86,873 100.00% $84,120 100.00%
======= ====== ======== ====== ======= ======
LIABILITIES AND SHAREHOLDERS'
EQUITY:
Demand deposits $14,595 15.67% $13, 061 15.03% $11,301 13.43%
Interest-bearing deposits 70,405 75.56% 65,745 75.68% 66,069 78.54%
Other liabilities 105 .11% 1,175 1.35% 983 1.17%
------- ------ -------- ------ ------- ------
Total liabilities 85,105 91.34% 79,981 92.06% 78,353 93.14%
Shareholders' equity 8,069 8.66% 6,892 7.94% 5,767 6.86%
------- ------ -------- ------ ------- ------
Total liabilities and
shareholders' equity
$93,174 100.00% $ 86,873 100.00% $84,120 100.00%
======= ====== ======== ====== ======= ======
</TABLE>
TOTAL ASSETS.
At September 30, 1994, total assets were approximately $92,699,000, compared
to $94,138,000 at December 31, 1993 and $86,282,000 at December 31, 1992. Total
average assets for the nine months ended September 30, 1994 were $93,174,000, an
increase of 7.25%, from the $86,873,000 average for the year ended December 31,
1993. The increases in average assets during the first nine months of 1994 and
the year ended December 31, 1993 reflect increased loan demand, partially offset
by a decline in investment securities from 1992 to 1993. The mix of average
assets during the first nine months of 1994 and the year ended December 31, 1993
represent shifts from investment securities to loans and Federal funds sold, and
American Bank's ability during these periods to increase its loan portfolio as
interest-bearing deposits increased.
76
<PAGE>
INVESTMENT SECURITIES.
At September 30, 1994, American Bank's investment securities portfolio
aggregated $27,740,000, an increase of $7,354,000 from the $20,386,000 reported
at December 31, 1993, which reflects a decrease of $5,795,000 from the
$26,181,000 reported at December 31, 1992.
The following table sets forth the composition of American Bank's investment
portfolio at the end of each period presented.
<TABLE>
<CAPTION>
SEPTEMBER 30, DECEMBER 31,
------------- ------------------
1994 1993 1992
------------- -------- --------
<S> <C> <C> <C>
(DOLLARS IN THOUSANDS)
U.S. Treasuries $ 7,448 $ 5,009 $ 4,979
U.S. Government agencies 1,502 1,506 2,910
Municipal securities 2,921 917 -
Government Guaranteed
Mortgage Backed Securities 7,560 7,006 8,572
Government Guaranteed &
Private Issue CMO's 8,309 5,948 9,720
------- ------- -------
Total
$27,740 $20,386 $26,181
======= ======= =======
</TABLE>
Effective January 1, 1994, American Bank adopted Statement of
Financial Accounting Standards No. 115, "Accounting for Certain Investments in
Debt and Equity Securities" ("SFAS 115"), 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. American Bank has not engaged in trading
activities related to any of its investment securities and has no securities
classified as Trading. Debt securities are classified as held-to-maturity when
American Bank 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. American Bank may sell these securities in response to liquidity
demands. Available-for-Sale securities also may be used as a means of adjusting
the interest rate sensitivity of American Bank's balance sheet through sale and
reinvestment.
77
<PAGE>
The following table presents selected contractual maturity data for
the investment securities in American Bank's portfolio at September 30, 1994.
<TABLE>
<CAPTION>
AFTER ONE YEAR AFTER FIVE YEARS
ONE YEAR OR LESS THROUGH FIVE YEARS THROUGH 10 YEARS AFTER 10 YEARS
----------------- ------------------- ----------------- ----------------
AMOUNT YIELD AMOUNT YIELD AMOUNT YIELD AMOUNT YIELD
-------- ------- --------- -------- -------- ------- -------- ------
<S> <C> <C> <C> <C> <C> <C> <C> <C>
(DOLLARS IN THOUSANDS)
U.S. Treasuries $1,999 6.03% $5,449 5.53% $ - $ -
U.S. Government agencies - 500 5.33% 1,003 7.70% -
Municipal securities - - 1,260 6.99% 1,662 8.37%
Government Guaranteed
Mortgage Backed
Securities - 743 7.25% 2,765 4,052 7.24%
Government Guaranteed & 7.49%
Private Issue CMO's - 592 4.71% 1,924 7.47% 5,791 6.20%
------ ------ ------ -------
Total $1,999 $7,284 $6,952 $11,505
====== ====== ====== =======
</TABLE>
The following table presents selected contractual maturity data for the
investment securities in American Bank's portfolio at December 31, 1993.
<TABLE>
<CAPTION>
AFTER ONE YEAR AFTER FIVE YEARS
ONE YEAR OR LESS THROUGH FIVE YEARS THROUGH 10 YEARS AFTER 10 YEARS
----------------- ------------------- ----------------- ---------------
AMOUNT YIELD AMOUNT YIELD AMOUNT YIELD AMOUNT YIELD
-------- ------- --------- -------- -------- ------- ------- ------
<S> <C> <C> <C> <C> <C> <C> <C> <C>
(DOLLARS IN THOUSANDS)
U.S. Treasuries $2,000 5.53% $3,009 5.83% $ - $ -
U.S. Government agencies - 500 5.32% 1,006 7.39% -
Municipal securities - - 917 7.07% -
Government Guaranteed
Mortgage Backed
Securities - 1,102 7.86% 553 8.85% 5,351 8.73%
Government Guaranteed &
Private Issue CMO's - 367 5.21% 1,941 6.75% 3,640 6.55%
------ ------ ------ ------
Total $2,000 $4,978 $4,417 $8,991
====== ====== ====== ======
</TABLE>
See Note 2 to American Bank's Financial Statements appearing elsewhere in this
Proxy Statement-Prospectus for information concerning the amortized cost and
estimated fair values of American Bank's investment securities at December 31,
1993 and 1992.
78
<PAGE>
LOANS.
American Bank engages in real estate lending through real estate construction
and mortgage loans, and commercial and consumer lending. The lending activities
of American Bank are guided by the basic lending policy established by its Board
of Directors. Each loan is evaluated based on, among other things, character
and leverage capacity of the borrower, capital and investment in a particular
property, if applicable, cash flow, collateral, market conditions for the
borrower's business or project and prevailing economic trends and conditions.
The following table sets forth the type and amount of loans outstanding as of
the dates indicated:
<TABLE>
<CAPTION>
SEPTEMBER 30, DECEMBER 31,
-------------- --------------------
1994 1993 1992
-------------- --------- ---------
<S> <C> <C> <C>
(DOLLARS IN THOUSANDS)
Commercial/Industrial $ 5,449 $ 5,686 $ 5,053
Commercial Real Estate 18,249 16,823 12,896
Residential Real Estate 26,337 25,341 18,247
Consumer/Installment 4,296 4,679 5,154
Unearned Discount (2) (3) (10)
Other 33 63 47
------- ------- -------
Total loans $54,362 $52,589 $41,387
======= ======= =======
</TABLE>
Except as otherwise set forth in the table above, as of September 30,
1994, American Bank did not have any concentration of loans in any particular
industry exceeding 10% of total outstanding loans. A concentration is defined
as amounts loaned to a multiple number of borrowers engaged in similar
activities, which would cause them to be similarly impacted by economic or other
conditions, where the amount exceeds 10% of total outstanding loans.
At September 30, 1994, loans were $54,362,000, as compared to
$52,589,000 at December 31, 1993 and $41,387,000 at December 31, 1992. Average
loans have increased over these periods as well, from $38,468,000 and
$46,777,000, respectively, for 1992 and 1993, to $52,994,000 for the nine months
ended September 30, 1994. These increases in the amount of outstanding loans
are attributable principally to increased loan demand in the market served by
American Bank as the local economy strengthened. American Bank's average loan
to deposit ratio was 53.9% during the first nine months of 1994 as compared to
47.9% and 63.2% during 1993 and 1992, respectively. The increases are primarily
the product of increased loan demand.
79
<PAGE>
At September 30, 1994, residential real estate, commercial real estate
and commercial/industrial loans comprised approximately 48%, 34% and 10%
respectively, of total outstanding loans. This compares to 48%, 32% and 11%
categorized as residential real estate, commercial real estate and
commercial/industrial loans, respectively, at December 31, 1993 and 44%, 31% and
12% categorized as residential real estate, commercial real estate and
commercial/industrial loans, respectively, at December 31, 1992.
The following table provides information concerning loan portfolio
maturity as of December 31, 1993. Loan portfolio maturity by type of loan as
presented in the table above is not readily available.
(Dollars in thousands)
<TABLE>
<S> <C>
ONE YEAR OR LESS
Floating interest rate $ 1,682
Fixed interest rate 6,724
AFTER ONE YEAR THROUGH FIVE YEARS:
Floating interest rate 4,525
Fixed interest rate 10,457
AFTER FIVE YEARS:
Floating interest rate 6,384
Fixed interest rate 22,817
-------
TOTAL $52,589
=======
</TABLE>
NONACCRUAL, PAST DUE AND MODIFIED LOANS.
The performance of American Bank's loan portfolio is evaluated
regularly by Senior Management and the Board of Directors. Interest on loans is
accrued monthly as earned. A loan is generally placed on nonaccrual status when
principal or interest is past due 90 days or more, except when management
determines the loan remains likely to be fully collectible. Upon being placed
on nonaccrual status, the accrual of income from a loan is discontinued and
previously accrued but unpaid interest is reversed against income. Each loan
that is 90 days or more past due is evaluated to determine its collectibility
and the adequacy of its collateral.
80
<PAGE>
The following table sets forth the amount of American Bank's
nonperforming loans (nonaccrual loans and loans past due 90 days or more and
still accruing interest) and loans with modified terms as of the dates
indicated:
<TABLE>
<CAPTION>
SEPTEMBER 30, DECEMBER 31,
------------- --------------------
1994 1993 1992
------------- --------- ---------
<S> <C> <C> <C>
Nonaccrual loans $124,028 $818,000 $478,000
Loans past due 90 days or more and
still accruing interest 86,854 51,197 141,000
Renegotiated debt, still accruing interest - 317,000 783,000
</TABLE>
As a percent of total loans, loans past due 90 days or more and not on
nonaccrual status were .16% at September 30, 1994, compared to .10% and .34% of
total loans at December 31, 1993 and 1992. Nonaccrual loans were .23% of total
loans at September 30, 1994, 1.56% at year-end 1993 and 1.15% at year-end 1992.
Loans with modified terms represented 0% of total loans at September 30, 1994,
compared to .60% and 1.89% respectively, at December 31, 1993 and 1992. If
loans classified as nonperforming at September 30, 1994 and year-end 1993 and
1992 had performed in accordance with their original terms, interest income
would not have increased by material amounts. Income recognized on nonaccrual
loans was not material during these periods.
At September 30, 1994, American Bank had three loans in the amount of
$124,028 on nonaccrual status, each of which is secured by real estate. One of
these loans, in the amount of $6,764, subsequently has become current and
returned to accrual status.
As of September 30, 1994, American Bank was not aware of any other
loans where known information about possible credit problems of the borrower
caused management to have serious doubts as to the ability of such borrowers to
comply with the loan repayment terms. American Bank's primary regulators and
internal auditors review the loan portfolio as part of their regular
examinations and their assessment of specific credits, based on information
available to them at the time of their examination, may affect the level of
American Bank's non-performing loans. Additionally, the loan portfolio is
regularly monitored by Senior Management and the Board. Accordingly, there can
be no assurance that other loans will not be placed on nonaccrual, become 90
days or more past due, or have terms modified in the future.
In May 1993, the Financial Accounting Standards Board issued Statement
of Financial Accounting Standards No. 114, "Accounting by Creditors for
Impairment of a Loan" ("SFAS 114"). This standard requires the measurement of
certain impaired loans based on the present value of expected future cash flows
discounted at the loan's effective interest rate. Adoption of this new standard
is required for fiscal years beginning after December 15, 1994.
81
<PAGE>
American Bank will adopt this statement beginning January 1, 1995. The effect
of adopting SFAS 114 on American Bank's financial statements has not yet been
determined, but is not expected to be material.
ALLOWANCE FOR LOAN LOSSES.
A certain degree of risk is inherent in the extension of credit.
Management has credit policies in place to monitor and attempt to control the
level of loan losses and nonperforming loans. One product of American Bank's
credit risk management is the maintenance of the allowance for loan losses at a
level considered by management to be adequate to absorb estimated known and
inherent losses in the existing portfolio, including commitments and standby
letters of credit. The allowance for loan losses is established through charges
to operations in the form of provisions for loan losses.
The allowance is based upon a regular review of current economic
conditions, which might affect a borrower's ability to pay, underlying
collateral values, risk in and the composition of the loan portfolio, prior loss
experience and industry averages. In addition, American Bank's primary
regulators, as an integral part of their examination process, periodically
review American Bank's allowance for loan losses and may recommend additions to
the allowance based on their assessment of information available to them at the
time of their examination. Loans that are deemed to be uncollectible are
charged-off and deducted from the allowance. The provision for loan losses and
recoveries on loans previously charged-off are added to the allowance.
82
<PAGE>
The following table sets forth American Bank's loan loss experience
and certain information relating to its allowance for loan losses as of the
dates and for the periods indicated.
<TABLE>
<CAPTION>
NINE MONTHS ENDED
SEPTEMBER 30, YEAR ENDED DECEMBER 31,
------------------ -------------------------
1994 1993 1992
------------------ ------------ -----------
<S> <C> <C> <C>
(DOLLARS IN THOUSANDS)
Average net loans outstanding $52,994 $46,777 $38,468
Balance of allowance for credit losses
at beginning of period 885 1,215 1,245
Charge offs:
Commercial loans (14) (327) (107)
Consumer loans (9) (13) (15)
Recoveries 223 9 92
------- ------- -------
Net recoveries (charge-offs) 200 (331) (30)
------- ------- -------
Provisions charged to expense (370) - -
------- ------- -------
Balance of allowance for credit losses
at end of period $ 715 $ 885 $ 1,215
======= ======= =======
Ratio of net charge-offs to average
loans outstanding (.38)% 0.71% 0.10%
</TABLE>
The allowance for loan losses was $715,000 or 1.32% of average loans,
$885,000 or 1.89% of average loans, and $1,215,000 or 3.16% of average loans at
September 30, 1994, December 31, 1993 and December 31, 1992, respectively. Net
charged-off loans during this period were $(200,000) during the first nine
months of 1994, compared to $331,000 and $40,000 in 1993 and 1992, respectively.
The allowance for credit losses should not be interpreted as an indication of
future charge-off trends.
Management believes that the allowance for loan losses at September
30, 1994 was adequate to absorb the known and inherent risks in the loan
portfolio at that time. However, no assurance can be given that future changes
in economic conditions that might adversely affect American Bank's principal
market area, borrowers or collateral values, and other circumstances will not
result in increased losses in American Bank's loan portfolio in the future.
Although American Bank does not normally allocate the allowance for
loan losses to specific loan categories, an allocation has been made for
purposes of this discussion as set forth below. The following table sets forth
the approximate dollar amount of the allowance for loan losses allocable to the
stated loan categories, and the percent of total loans in each such category for
the periods presented.
83
<PAGE>
<TABLE>
<CAPTION>
NINE MONTHS ENDED
SEPTEMBER 30, YEAR ENDED DECEMBER 31,
------------------ ---------------------------------
1994 1993 1992
------------------ --------------- ----------------
ALLOW. LOAN ALLOW. LOAN ALLOW. LOAN
-------- -------- ------ ------- ------- -------
<S> <C> <C> <C> <C> <C> <C>
(DOLLARS IN THOUSANDS)
Commercial $ 70 43.59% $120 42.80% $ 241 43.36%
Real Estate 1 48.45% 4 48.18% 7 44.08%
Installment 1 7.96% 8 9.02% 31 12.56%
Unallocated 643 753 936
---- ------ ---- ------ ------ ------
$715 100.00% $885 100.00% $1,215 100.00%
==== ====== ==== ====== ====== ======
</TABLE>
The allocation of the allowance for loan losses should not be interpreted as
an indication of future credit trends or that losses will occur in these amounts
or proportions. Furthermore, the portion allocated to each loan category is not
the total amount available for future losses that might occur within such
categories, since even on the above basis there is a substantial unallocated
portion of the allowance, and the total allowance is a general allowance
applicable to the entire portfolio.
In determining the adequacy of the allowance for credit losses, management
considers such factors as known problem loans, evaluations made by bank
regulatory agencies and an independent firm retained to perform loan reviews,
assessment of economic conditions, concentrations and other appropriate data in
order to identify the risks in the portfolio. The adequacy of the allowance is
evaluated by applying a combination of specific reserves and a percentage
formula for graded loans and at least 1% of ungraded commercial and installment
loans. If, following a review of the allowance, the allowance is determined to
be inadequate or excessive, the amount of the allowance is adjusted accordingly.
DEPOSITS.
84
<PAGE>
Deposits are the primary source of funding for American Bank's earning
assets. Total deposits at September 30, 1994 and at the end of 1993 and 1992
were approximately $82,244,000, $86,218,000, and $78,983,000, respectively.
Time certificates of deposit of $100,000 or more, which were approximately
$4,115,000 at September 30, 1994 and $3,969,000 at December 31, 1993, had
remaining maturities as follows:
<TABLE>
<CAPTION>
SEPTEMBER 30, 1994 DECEMBER 31, 1993
------------------- -------------------
MATURING WITHIN: (DOLLARS IN THOUSANDS)
<S> <C> <C>
Three months or less $ 3,001 $ 2,858
Over three months to six months 618 499
Over six months to twelve months 269 300
Over twelve months 227 312
------- -------
Total $ 4,115 $ 3,969
======= =======
</TABLE>
Average deposit balances are summarized for the periods
indicated:
<TABLE>
<CAPTION>
NINE MONTHS ENDED
SEPTEMBER 30, YEAR ENDED DECEMBER 31,
------------------ ---------------------------------------
AVERAGE AVERAGE AVERAGE
1994 RATE 1993 RATE 1992 RATE
------- ------- ------- ------- ------- -------
(DOLLARS IN THOUSANDS)
<S> <C> <C> <C> <C> <C> <C>
Demand deposits $14,595 0.00% $13,061 0.00% $11,301 0.00%
Money market demand 12,667 2.62% 12,949 2.36% 13,081 3.03%
Savings and other interest-
bearing demand deposits 28,685 2.10% 25,175 2.26% 23,904 2.81%
Time Deposits 29,053 3.30% 27,621 3.49% 29,084 4.73%
------- ------- -------
Total $85,000 2.60% $78,806 2.80% $77,370 3.70%
======= ======= =======
</TABLE>
At September 30, 1994 and December 31, 1993, American Bank had no brokered
deposits.
INTEREST RATE SENSITIVITY.
Interest rate risk is the potential impact of changes in interest rates on
net interest income and results from disparities in repricing opportunities of
assets and liabilities over a period of time. Management estimates 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.
The degree of interest rate sensitivity is not equal for all types of assets
and liabilities. American Bank's experience has indicated that the repricing of
interest-bearing demand, savings
85
<PAGE>
and money market accounts does not move with the same magnitude as general
market rates. Additionally, these deposit categories, along with non-interest
demand, have historically been stable sources of funds to American Bank, which
indicates a much longer implicit maturity than their contractual availability.
American Bank's cumulative gap to total assets at September 30, 1994 was 2.55%
within the three-month period. A positive gap implies that earnings would
increase in a rising interest rate environment and decrease in a falling
interest rate environment.
LIQUIDITY.
American Bank seeks to manage its liquidity position to attempt to ensure
that sufficient funds are available to meet customers' needs for borrowing and
deposit withdrawals. Liquidity is derived from both the asset and liability
sides of the balance sheet. Asset liquidity arises from the ability to convert
assets to cash and self-liquidation or maturity of assets. Liquid asset
balances include cash, interest-bearing deposits with financial institutions,
short-term investments and federal funds sold. Liability liquidity arises from
a diversity of funding sources as well as from the ability of American Bank to
attract deposits of varying maturities. If American Bank were limited to only
one source of funding or all its deposits had the same maturity, its liquidity
position would be adversely impacted.
American Bank's funding source is primarily its deposit base which is
comprised of interest-bearing and noninterest-bearing accounts, augmented
through federal funds purchased, securities sold under repurchase agreements and
other short-term borrowings, which are interest-bearing. American Bank's non-
interest bearing demand deposits are, by their very nature, subject to
withdrawal upon demand. Declines in one form of funding source require American
Bank to obtain funds from another source. If American Bank were to experience a
decline in noninterest-bearing demand deposits and was to have a significant
increase in loan volume without a commensurate increase in such deposits, it
would utilize alternative sources of funds, probably at higher cost, to maintain
its liquidity and to meet its loan funding needs. This would place downward
pressure on American Bank's net interest margin and might have a negative impact
on American Bank's liquidity position.
American Bank's liquidity expressed as a percentage of net liquid assets to
net liabilities was 28.55% and 36.72% at September 30, 1994 and December 31,
1993, respectively. The decreased percentage at September 30, 1994 was due to
American Bank's adoption of SFAS 115, effective January 1, 1994. Under SFAS
115, securities classified as held-to-maturity are not included in net liquid
assets.
CAPITAL ADEQUACY.
86
<PAGE>
At September 30, 1994, American Bank's total shareholders' equity was
$9,278,000, an increase of 26.1% from $7,355,000 at December 31, 1993. Book
value per common share is presented in the table below.
<TABLE>
<CAPTION>
SEPTEMBER 30, DECEMBER 31,
------------- ------------------------
1994 1993 1992
------------- -------------- --------
(AMOUNTS IN THOUSANDS, EXCEPT PER SHARE DATA)
<S> <C> <C> <C>
Shares outstanding 484 484 484
Shareholders' equity $9,278 $7,355 $6,142
Book value per common share $19.17 $15.20 $12.69
</TABLE>
Adequate levels of capital are necessary over time to sustain growth
and absorb losses. In the case of banks and bank holding companies, capital
levels must also meet minimum regulatory requirements. All risk-based and other
capital ratios improved from year-end 1992 to 1993 and from year-end 1993 to
September 30, 1994, and remain well above regulatory minimums. At September 30,
1994, Tier I capital was 19.14% of risk-weighted assets and total capital was
20.40% of risk-weighted assets, compared to the regulatory minimums of 4.0% and
8.0%, respectively. American Bank's regulatory leverage ratio, which compares
Tier I capital to adjusted total assets, was 10.49% at September 30, 1994,
compared to the regulatory minimum of 4.0%. Under present regulations, American
Bank was classified as "well-capitalized" based upon its capital ratios at
September 30, 1994 and December 31, 1993 and 1992. The following table sets
forth American Bank's risk based capital and capital ratios at September 30,
1994 and year-end 1993 and 1992.
<TABLE>
<CAPTION>
REGULATORY
SEPTEMBER 30, DECEMBER 31, MINIMUM
------------- ------------------ -----------
1994 1993 1992
------- ------- -------
(DOLLARS IN THOUSANDS)
<S> <C> <C> <C> <C>
Capital:
Tier I $ 9,694 $ 7,353 $ 6,187
Tier II 634 664 599
------- ------- -------
Total capital $10,328 $ 8,017 $ 6,786
Risk-weighted assets $50,634 $52,878 $47,299
Ratios:
Tier I capital to risk-weighted assets 19.14% 13.91% 13.08% 4.0%
Tier II capital to risk-weighted assets 1.25% 1.26% 1.27% -
Total capital to risk-weighted assets 20.40% 15.16% 14.35% 8.0%
Leverage Ratio 10.49% 8.32% 7.09% 4.0%
</TABLE>
87
<PAGE>
VALIDITY OF SHARES
The validity of the shares of Hibernia Common Stock offered hereby has
been passed upon for Hibernia by Patricia C. Meringer, Associate Counsel and
Secretary of Hibernia. As of the date of this Proxy Statement-Prospectus, Ms.
Meringer owned no shares of Hibernia Common Stock and held options to purchase
15,716 shares of Hibernia Common Stock, which options are not currently
exercisable.
EXPERTS
The consolidated financial statements of Hibernia incorporated in this
Proxy Statement-Prospectus by reference from Hibernia's Annual Report on Form
10-K for the year ended December 31, 1993 have been audited by Ernst & Young
LLP, independent auditors, as set forth in their report thereon incorporated
herein by reference, and have been so incorporated by reference in reliance upon
such report given upon the authority of such firm as experts in accounting and
auditing. The consolidated financial statements referred to above have been
restated in a Current Report on Form 8-K to give effect to four mergers
consummated during the third quarter of 1994 and accounted for as poolings of
interests.
The consolidated financial statements of Hibernia for the year ended
December 31, 1993, restated to give effect to four mergers consummated during
the third quarter of 1994 and accounted for as poolings of interests,
incorporated in this Proxy Statement-Prospectus by reference from Hibernia's
Current Report on Form 8-K dated October 11, 1994 have been audited by Ernst &
Young LLP, independent auditors, as set forth in their report thereon
incorporated by reference, which is based in part on the reports of the
following independent auditors -- Arthur Andersen LLP; KPMG Peat Marwick LLP;
Roger C. Parker; and Castaing, Hussey & Lolan. The consolidated financial
statements referred to in this paragraph incorporated by reference in reliance
upon such reports given upon the authority of such firms as experts in
accounting and auditing.
The audited consolidated financial statements of American Bank as of
December 31, 1993 and 1992 and for each of the years in the two-year period
ended December 31, 1993 contained in this Proxy Statement-Prospectus have been
audited by Arthur Andersen LLP, certified public accountants, as set forth
in their report contained therein, and have been included herein in reliance
upon such report given upon the authority of such firm as experts in accounting
and auditing.
88
<PAGE>
INDEX TO FINANCIAL STATEMENTS
OF
AMERICAN BANK
<TABLE>
<CAPTION>
Page
----
<S> <C>
Report of Independent Public Accountant........ F-2
Balance Sheets as of
December 31, 1993 and 1992
and September 30, 1994.................... F-3
Statements of Income for
the Years Ended December 31, 1993
and 1992 and the Nine
Months ended September 30, 1994 and 1993.. F-5
Statements of Shareholders'
Equity for the Years Ended
December 31, 1993 and 1992
and the Nine Months ended
September 30, 1994........................ F-6
Statements of Cash Flows for
the Years Ended December 31, 1993
and 1992 and the Nine
Months ended September 30, 1994 and 1993.. F-7
Notes to Financial Statements.................. F-8
</TABLE>
<PAGE>
REPORT OF INDEPENDENT PUBLIC ACCOUNTANTS
To the Shareholders and Board of Directors of American Bank:
We have audited the accompanying balance sheets of American Bank (a Louisiana
corporation) as of December 31, 1993 and 1992, and the related statements of
income, shareholders' equity and cash flows for the years then ended. These
financial statements are the responsibility of the Bank's management. Our
responsibility is to express an opinion on these financial statements based on
our audits.
We conducted our audits in accordance with generally accepted auditing
standards. Those standards require that we plan and perform the audit to obtain
reasonable assurance about whether the financial statements are free of material
misstatement. An audit includes examining, on a test basis, evidence supporting
the amounts and disclosures in the financial statements. An audit also includes
assessing the accounting principles used and significant estimates made by
management, as well as evaluating the overall financial statement presentation.
We believe that our audits provide a reasonable basis for our opinion.
In our opinion, the financial statements referred to above present fairly, in
all material respects, the financial position of American Bank as of December
31, 1993 and 1992, and the results of its operations and its cash flows for the
years then ended in conformity with generally accepted accounting principles.
As discussed in Note 5 to the financial statements, the Bank changed its method
of accounting for income taxes as of January 1, 1993.
Arthur Andersen LLP
New Orleans, Louisiana,
April 15, 1994
F-2
<PAGE>
BALANCE SHEETS
--------------
AS OF DECEMBER 31, 1993 AND 1992
--------------------------------
AND SEPTEMBER 30, 1994
----------------------
(Dollars in Thousands)
ASSETS
------
<TABLE>
<CAPTION>
(Unaudited)
September 30,
1994 1993 1992
-------------- --------- ---------
<S> <C> <C> <C>
CASH AND DUE FROM BANKS $ 4,373 $ 4,286 $ 5,206
FEDERAL FUNDS SOLD 3,400 13,400 8,600
INTEREST BEARING DEPOSITS IN
OTHER BANKS 128 157 77
INVESTMENTS (Market value of $20,893
in 1993 and $26,948 in 1992) 27,740 20,386 26,181
Net Unrealized Loss (629) _ _
LOANS 54,362 52,589 41,387
(715) (885) (1,215)
Less: Reserve for possible loan losses ------- ------- -------
53,647 51,704 40,172
Net loans 2,537 2,738 2,709
BANK PREMISES AND EQUIPMENT 394 815 2,633
OTHER REAL ESTATE, net 554 482 526
ACCRUED INTEREST RECEIVABLE 555 170 178
------- ------- -------
OTHER ASSETS $92,699 $94,138 $86,282
======= ======= =======
Total assets
</TABLE>
The accompanying notes are an integral part of these financial statements.
F-3
<PAGE>
BALANCE SHEETS
--------------
AS OF DECEMBER 31, 1993 AND 1992
--------------------------------
AND SEPTEMBER 30, 1994
----------------------
(Dollars in Thousands, Except Par Value and per Share Data)
LIABILITIES AND SHAREHOLDERS' EQUITY
------------------------------------
<TABLE>
<CAPTION>
(Unaudited)
September 30,
1994 1993 1992
-------------- -------- --------
<S> <C> <C> <C>
DEPOSITS:
Non-interest bearing $13,948 $18,158 $13,340
Interest bearing 68,296 68,060 65,643
------- ------- -------
Total deposits 82,244 86,218 78,983
ACCRUED INTEREST AND OTHER 1,177 565 1,157
LIABILITIES ------- ------- -------
83,421 86,783 80,140
Total liabilities ------- ------- -------
COMMITMENTS AND CONTINGENCIES - - -
SHAREHOLDERS' EQUITY:
Common stock, $1 par value, 1,000,000 shares
authorized, 484,000 shares issued and outstanding 484 484 484
Surplus 3,516 3,516 3,516
Undivided profits 5,278 3,355 2,142
------- ------- -------
Total shareholders' equity 9,278 7,355 6,142
------- ------- -------
Total liabilities and shareholders' equity $92,699 $94,138 $86,282
======= ======= =======
</TABLE>
The accompanying notes are an integral part of these financial statements.
F-4
<PAGE>
STATEMENTS OF INCOME
--------------------
FOR THE YEARS ENDED DECEMBER 31, 1993 AND 1992
----------------------------------------------
AND THE NINE MONTHS ENDED SEPTEMBER 30, 1994 AND 1993
-----------------------------------------------------
(Dollars in Thousands, Except Per Share Data)
<TABLE>
<CAPTION>
(Unaudited)
Nine Months
Ended September 30, Year Ended December 31,
--------------------- -------------------------
1994 1993 1993 1992
---------- --------- ------------ -----------
<S> <C> <C> <C> <C>
INTEREST INCOME:
Interest and fees on loans $ 3,972 $3,755 $4,705 $4,360
Interest on investments-
United States Treasury and agencies 347 474 586 763
Mortgage-backed securities 754 933 1,170 1,487
Other investments 75 11 21 -
Interest on Federal funds sold 179 95 125 159
Interest on deposits with other banks 4 4 6 4
------- ------ ------ ------
Total interest income 5,331 5,272 6,613 6,773
------- ------ ------ ------
INTEREST ON DEPOSITS 1,407 1,539 1,851 2,453
------- ------ ------ ------
NET INTEREST INCOME 3,924 3,733 4,762 4,320
PROVISION FOR POSSIBLE LOAN LOSSES (370) - - -
------- ------ ------ ------
NET INTEREST INCOME AFTER PROVISION
FOR POSSIBLE LOAN LOSSES
4,294 3,733 4,762 4,320
------- ------ ------ ------
NON-INTEREST INCOME:
Service charges on deposit accounts 473 484 625 672
Other income 356 166 555 654
------- ------ ------ ------
Total non-interest income 829 650 1,180 1,326
------- ------ ------ ------
GAIN ON SALE OF SECURITIES 1,346 5 5 84
------- ------ ------ ------
NON-INTEREST EXPENSE:
Salaries and employee benefits 1,329 1,313 1,559 1,379
Occupancy expense 226 215 285 258
Other operating expense 1,452 1,466 2,384 2,670
------- ------ ------ ------
Total non-interest expense 3,007 2,994 4,228 4,307
------- ------ ------ ------
INCOME BEFORE INCOME TAXES 3,462 1,394 1,719 1,423
PROVISION FOR INCOME TAXES:
Current (1,123) (438) (347) (422)
Deferred - - (161) -
------- ------ ------ ------
INCOME BEFORE CUMULATIVE EFFECT OF
ACCOUNTING CHANGE 2,339 956 1,211 1,001
------- ------ ------ ------
CUMULATIVE EFFECT OF ACCOUNTING CHANGE - 61 50 -
------- ------ ------ ------
NET INCOME $ 2,339 $1,017 $1,261 $1,001
======= ====== ====== ======
EARNINGS PER SHARE:
Income before cumulative effect of accounting change $4.83 $1.98 $2.50 $2.07
Cumulative effect of accounting change - 0.12 0.10 -
------- ------ ------ ------
Net income per share $4.83 $2.10 $2.60 $2.07
======= ====== ====== ======
</TABLE>
The accompanying notes are an integral part of these financial statements.
F-5
<PAGE>
STATEMENTS OF SHAREHOLDERS' EQUITY
----------------------------------
FOR THE YEARS ENDED DECEMBER 31, 1993 AND 1992
----------------------------------------------
AND THE NINE MONTHS ENDED SEPTEMBER 30, 1994
--------------------------------------------
(Dollars in Thousands, Except per Share Data)
<TABLE>
<CAPTION>
Common Stock
--------------- Undivided
Shares Amount Surplus Profits
------- ------ ------- ---------
<S> <C> <C> <C> <C>
BALANCE, December 31, 1991 484,000 $484 $3,516 $1,141
Net income - - - 1,001
------- ---- ------ ------
BALANCE, December 31, 1992 484,000 484 3,516 2,142
------- ---- ------ ------
Net income - - - 1,261
Dividends declared
($0.10 per share) - - - (48)
------- ---- ------ ------
BALANCE, December 31, 1993 484,000 484 3,516 3,355
------- ---- ------ ------
Net income through September 30, 1994/*/ - - - 2,339
Net change in investment securities ------- ---- ------ ------
market valuation - net of tax*
- - - (416)
------- ---- ------ ------
BALANCE, September 30, 1994* 484,000 $484 $3,516 $5,278
======= ==== ====== ======
</TABLE>
- ---------------------
* Unaudited information
The accompanying notes are an integral part of these financial statements
F-6
<PAGE>
STATEMENTS OF CASH FLOWS
------------------------
FOR THE YEARS ENDED DECEMBER 31, 1993 AND 1992
----------------------------------------------
AND THE NINE MONTHS ENDED SEPTEMBER 30, 1994 AND 1993
-----------------------------------------------------
(Dollars in Thousands)
<TABLE>
<CAPTION>
(Unaudited)
Nine Months
Ended September 30, Year Ended December 31,
-------------------- ---------------------
1994 1993 1993 1992
--------- --------- ---------- ---------
<S> <C> <C> <C> <C>
CASH FLOWS FROM OPERATING ACTIVITIES:
Net income $ 2,339 $ 1,017 $ 1,261 $ 1,001
Adjustments to reconcile net income to
net operating cash flows-
Depreciation 256 170 227 209
Provision for other real estate losses - 355 555 911
Gains on sales of other real estate (48) (147) (151) (105)
Decrease in accrued interest receivable and other (67) (123) 52 123
assets
(Decrease) increase in accrued interest payable 402 (368) (592) 406
and other liabilities (1,346) (5) (5) (84)
Gain on sale of securities
Net accretion of discount or amortization of 18 5 3 45
premium -------- -------- -------- -------
on investments
Net operating cash flows $ 1,554 $ 904 1,350 2,506
-------- -------- -------- -------
CASH FLOWS FROM INVESTING ACTIVITIES:
Purchases of investment securities (12,602) (8,602) (8,663) (7,792)
Proceeds from maturities of investment securities 5,161 9,252 11,960 13,433
Proceeds from sales of investment securities 500 2,500 2,500 614
Net cash increase in loans (1,095) (10,156) (11,452) (4,868)
Increase in Federal funds sold 10,000 6,600 (4,800) (5,600)
Additions to bank premises and equipment (25) (247) (256) (315)
Proceeds from sales of other real estate 541 1,299 1,334 1,253
(Increase) decrease in interest bearing deposits with
other banks 29 $ (81) (80) 7
-------- -------- -------- -------
Net investing cash flows $ 2,509 $ 565 (9,457) (3,268)
-------- -------- -------- -------
CASH FLOWS FROM FINANCING ACTIVITIES:
Increase in non-interest bearing deposits (4,267) (701) 4,818 1,861
Increase in interest bearing deposits other than
certificates of deposit (2,200) (463) 4,323 2,689
Decrease in certificates of deposit 2,491 (1,752) (1,906) (1,976)
Dividends paid - - (48) -
-------- -------- -------- -------
Net financing cash flows $ (3,976) $ (2,916) 7,187 2,574
-------- -------- -------- -------
NET INCREASE (DECREASE) IN CASH AND
DUE FROM BANKS 87 (1,447) (920) 1,812
CASH AND DUE FROM BANKS AT BEGINNING 4,286 5,206 5,206 3,394
OF YEAR -------- -------- -------- -------
CASH AND DUE FROM BANKS AT END OF YEAR $ 4,373 $ 3,759 $ 4,286 $ 5,206
======== ======== ======== =======
CASH INTEREST EXPENSE PAID $ 1,350 $ 1,485 $ 1,897 $ 2,595
======== ======== ======== =======
CASH INCOME TAXES PAID $ 821 $ 785 $ 860 $ 25
======== ======== ======== =======
</TABLE>
The accompanying notes are an integral part of these financial statements.
F-7
<PAGE>
NOTES TO FINANCIAL STATEMENTS
-----------------------------
DECEMBER 31, 1993 AND 1992
--------------------------
(Dollars in Thousands, Except per Share Data)
1. SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES:
------------------------------------------
The accounting principles and reporting policies of the Bank conform with
generally accepted accounting principles. The more significant accounting
policies used in preparing the financial statements are summarized below.
Certain reclassifications have been made to the prior period financial
information in order to conform to current year presentation.
Investment Securities
- ---------------------
Securities purchased for the investment portfolio are those securities in which
the bank has the intent and ability to hold on a long-term basis or until
maturity and are stated at cost, adjusted for amortization of premiums and
accretion of discounts. Market value for securities is determined from quoted
prices or quoted prices of similar securities of comparable risk and maturity
where no quoted market price exists.
Securities to be held for indefinite periods of time and not on a long-term
basis or until maturity are classified as securities held for resale and are
accounted for at the lower of cost or market. During 1993, the Bank sold $2,500
of its securities resulting in gross realized gains of $5 and no gross realized
losses. During 1992, the Bank sold $530 of its securities resulting in gross
realized gains of $84 and no gross realized losses. As of December 31, 1993
there were no securities held for resale.
In May, 1993, the Financial Accounting Standards Board (FASB) issued Statement
No. 115, "Accounting for Certain Investments in Debt and Equity Securities."
This standard addresses the accounting and reporting for investments in equity
securities that have readily determinable fair values and for all investments in
debt securities. Adoption of the new standard is required for fiscal years
beginning after December 15, 1993. The Bank will adopt this statement on
January 1, 1994. After reviewing the investment portfolio, the Bank intends to
classify investments with book value of $11,464 as "Available for Sale" which
will have an effect of increasing stockholders' equity to the extent market
value of the securities exceeds book value on January 1, 1994, net of tax. As
of December 31, 1993, this effect would be a $129 increase in stockholders'
equity, net of tax. Under current regulatory guidelines (which are subject to
change), this effect is excluded from regulatory capital. In deciding which
securities to classify as "Available for Sale" as of January 1, 1994, management
followed SFAS No. 115 criteria and considered securities which may be sold
F-8
<PAGE>
in the future in response to changes in interest rates, liquidity requirements
and other factors. The Bank does not engage in trading activities related to
any of its investment securities.
Interest earned on investment securities is included in interest income.
Amortization of premiums and accretion of discounts are computed using the
interest method. The adjusted cost of the specific security sold is used to
compute the gain or loss on the sale of an investment security. Such gains and
losses are shown separately as a component of other income in the statements of
income.
Loans
- -----
Loans are stated at the principal balance outstanding less unearned discount on
consumer loans. Interest on loans, other than consumer loans, is recognized as
income based on the principal balance outstanding. Interest on certain consumer
loans is recognized as income over the term of the loan using the sum-of-the-
months-digits method, which approximates the interest method. Loans are placed
on non-accrual status when, in the opinion of management, there exists
sufficient uncertainty as to the collectibility of the contractual interest.
Income is recorded on a cash basis for non-accrual loans.
Provision and Reserve for Possible Loan Losses
- ----------------------------------------------
The provision for possible loan losses charged to operating expense is
determined by management based on a review of the Bank's past loan loss
experience and an evaluation of the quality of the current loan portfolio. The
reserve for possible loan losses is based upon estimates, and ultimate losses
may vary from the current estimates. These estimates are reviewed periodically
and, as adjustments become necessary, they are reported in earnings in the
period in which they become known.
Bank Premises and Equipment
- ---------------------------
Bank premises and equipment are stated at cost, less accumulated depreciation.
Depreciation expense is computed primarily on a straight-line basis over the
estimated useful lives of the depreciable assets. Maintenance and repairs are
charged to operating expense, and gains or losses on dispositions are reflected
currently in the statement of income.
Income Taxes
- ------------
Income taxes are accounted for in accordance with Statement of Financial
Accounting Standards (SFAS) No. 109, which was adopted by the Bank on January 1,
1993. Under this statement, deferred income taxes are provided for by the
liability method (Note 5).
Other Real Estate
- -----------------
F-9
<PAGE>
Real estate and other assets acquired through foreclosure are stated at the
lower of the loan balance or fair value (less estimated costs to sell) of the
asset. The initial excess of the loan balance over the fair value of the asset
is charged to the reserve for possible loan losses. Subsequent declines in
value of the assets below their carrying values are reflected in earnings in the
period the decline is noted. During 1992, management established a reserve for
possible declines in value of other real estate and to provide for estimated
disposal costs. The reserve was approximately $100 and $281 at December 31,
1993 and 1992, respectively. Revenues and expenses associated with owning and
operating other real estate and gains and losses on disposition of such assets
are recorded in income in the period incurred. Writedowns of other real estate
of $555 and $911 in 1993 and 1992, respectively, were included in other
operating expense in the accompanying financial statements.
Earnings Per Share
- ------------------
Earnings per share is computed using the weighted average number of shares
outstanding of 484,000 shares during each of the periods.
New Financial Accounting Standards
- ----------------------------------
In December 1990 the FASB issued SFAS No. 106. This statement, which is
effective for fiscal years beginning after December 15, 1994, requires
recognition of estimated future post retirement costs over employees' periods of
service. The Bank offers no post-retirement benefits to its employees. SFAS
No. 107, issued by the FASB during 1991, requires disclosure of fair value
information for financial instruments. The Bank is not required to adopt this
statement until the year ended December 31, 1995. SFAS No. 114, issued by the
FASB during 1993, changes accounting for impaired loans. The Bank is not
required to adopt this statement until January 1, 1995.
Regulatory Matters
- ------------------
During 1993, the Bank was released from an Order to Cease and Desist by the
Federal Deposit Insurance Corporation (FDIC) which had been in place since 1989.
F-10
<PAGE>
2. INVESTMENT SECURITIES:
----------------------
The amortized cost and estimated market value of investment securities at
December 31, were:
<TABLE>
<CAPTION>
1993
------------------------------------
Gross
Unrealized
Book --------------- Market
Value Gains Losses Value
-------- ----- ------ --------
<S> <C> <C> <C> <C>
U.S. Treasury $ 5,009 $ 89 $ $ 5,098
U.S. Government agencies: -
Mortgage-backed securities 7,006 317 (23) 7,300
Collateral mortgage 5,948 92 (33) 6,007
obligations 2,423 67 (2) 2,488
Other ------- ---- ---- -------
Total $20,386 $565 $(58) $20,893
======= ==== ==== =======
1992
-----------------------------------
Gross
Unrealized
Book --------------- Market
Value Gains Losses Value
------ ----- ------ -------
U.S. Treasury $ 4,979 $148 $ - $ 5,127
U.S. Government agencies:
Mortgage-backed securities 8,572 395 (27) 8,940
Collateral mortgage 9,720 180 (31) 9,869
obligations 2,910 102 - 3,012
Other ------- ---- ---- -------
Total $26,181 $825 $(58) $26,948
======= ==== ==== =======
</TABLE>
F-11
<PAGE>
The amortized cost and estimated market value of investment securities at
December 31, 1993, by contractual maturity, are shown below. Expected
maturities will differ from contractual maturities because borrowers may have
the right to call or prepay obligations with or without call or prepayment
penalties.
<TABLE>
<CAPTION>
Book Market
-------- --------
<S> <C> <C>
Due in 1 year or less $ 2,000 $ 2,013
Due after 1 year through 5 years 3,509 3,583
Due after 5 years through 10 years 1,923 1,990
------- -------
Subtotal 7,432 7,586
Mortgage-backed securities,
including 12,954 13,307
collateral mortgage obligations ------- -------
Total $20,386 $20,893
======= =======
</TABLE>
The Bank's mortgage-backed securities and collateral mortgage obligations
consist of ownership interests in pools of residential mortgages guaranteed by
U.S. Government agencies with contract maturities ranging from approximately 3
to 34 years; however, the underlying mortgages are subject to significant
prepayments, primarily when the contractual interest rates exceed the current
market rates on similar mortgages. Based on current prepayment assumptions, the
estimated average remaining life of fixed rate mortgage-backed securities and
collateral mortgage obligations is approximately 4 years at December 31, 1993.
Investment securities with book values of $14,197 and $21,344 at December 31,
1993 and 1992, respectively, were pledged to secure public funds and for other
purposes.
The Bank holds a $750 investment in debentures of an affiliated bank
representing 12% mandatory convertible subordinated debentures of First
Continental Bancshares, Inc. (FCB). The debentures were issued in 1986 and
mature in 1996 with principal payment to be made with 78 shares of FCB common
stock per thousand in debenture face value. There is no active market for these
debentures or for the common stock into which they convert. During 1988 and
1989, a reserve equal to the cost of these debentures was recorded due to FCB's
default on its then senior debt. During December, 1993, FCB and Hibernia
Corporation (Hibernia) entered into a definitive agreement to merge. Under the
terms of the agreement, Hibernia will redeem all of the outstanding principal
and accrued interest related to FCB's outstanding debentures. The transaction
is subject, among other things, to approval by FCB shareholders and certain
regulatory bodies. The transaction is expected to close before the end of 1994.
The debenture agreement requires a redemption price of 105% and 103% if redeemed
during the twelve month period ending November 15, 1994 and 1995, respectively.
Therefore, the Bank will receive $750 of principal, all outstanding accrued
interest, which approximated $503 as of December 31, 1993, and a premium of $38
if the transaction is closed before November 15, 1994.
F-12
<PAGE>
As discussed above, the Bank has assigned no value to the FCB debentures and
related accrued interest in the accompanying financial statements; therefore,
the Bank will recognize income when it collects the principal, accrued interest,
and related premium upon closing of the merger transaction.
3. LOANS AND RESERVE FOR POSSIBLE LOAN LOSSES:
------------------------------------------
The composition of the loan portfolio at December 31, was as follows:
<TABLE>
<CAPTION>
1993 1992
--------- ---------
<S> <C> <C>
Commercial and $ 5,686 $ 5,053
industrial 25,341 18,247
Residential real estate 16,823 12,896
Commercial real estate 4,679 5,154
Consumer 63 47
Other ------- -------
Gross loans 52,592 41,397
Less: Unearned discount (3) (10)
------- -------
Total loans $52,589 $41,387
======= =======
</TABLE>
The Bank evaluates the credit risk of each customer on an individual basis and,
where deemed appropriate, collateral is obtained. Collateral varies by
individual loan customer but may include accounts receivable, inventory, real
estate, equipment, deposits, personal and government guarantees, and general
security agreements. Access to collateral is dependent upon the type of
collateral obtained. On an on-going basis, the Bank monitors its collateral and
the collateral value related to the loan balance outstanding.
Non-performing and underperforming loans at December 31, were as follows:
<TABLE>
<CAPTION>
1993 1992
------- -------
<S> <C> <C>
Loans:
90 days or more past due, but still accruing $ 51 $ 141
interest 317 783
Renegotiated loans which are not on non-accrual 818 478
Non-accrual loans ------ ------
Total non-performing and underperforming $1,186 $1,402
loans ====== ======
</TABLE>
Income recognized on the cash basis for non-accrual loans in 1993 and 1992
totaled $77 and
F-13
<PAGE>
$130, respectively. If the accrual of interest on non-accrual loans had not
been suspended, the income recorded would have been approximately $79 and $75 in
1993 and 1992, respectively.
In the opinion of management, progress has been made in its credit risk
management process, and only normal risk and loss potential remain in the loan
portfolio. Consequently, the Bank does not anticipate significant increases in
the level of non-performing assets in the foreseeable future. The current level
of non-performing assets is not anticipated to have a significant adverse effect
on the results of operations of the Bank.
The Bank's provision for possible loan losses charged to expense is determined
in accordance with the policy described in Note 1. Transactions in the reserve
for possible loan losses during 1993 and 1992 were as follows:
<TABLE>
<CAPTION>
1993 1992
-------- --------
<S> <C> <C>
Balance, beginning of year $1,215 $1,245
Provision - -
Losses charged to the reserve (339) (122)
Recoveries of loans previously charged- 9 92
off ------ ------
Balance, end of year $ 885 $1,215
====== ======
</TABLE>
4. BANK PREMISES AND EQUIPMENT:
---------------------------
Bank premises and equipment, stated at cost less accumulated depreciation, were
as follows at December 31:
<TABLE>
<CAPTION>
1993 1992
-------- --------
<S> <C> <C>
Land $ 768 $ 768
Buildings 2,707 2,429
Furniture, fixtures and 1,788 1,820
equipment ------- -------
5,263 5,017
Less- Accumulated depreciation (2,525) (2,308)
------- -------
$ 2,738 $ 2,709
======= =======
</TABLE>
Depreciation included in occupancy expense totaled $227 in 1993 and $209 in
1992.
F-14
<PAGE>
5. FEDERAL INCOME TAXES:
--------------------
Effective January 1, 1993, the Bank adopted SFAS No. 109, "Accounting for Income
Taxes." The effect of adopting this statement was to increase the deferred tax
asset by $50, which is reflected in the statement of income as the cumulative
effect of an accounting change. Net deferred tax assets/(liabilities), which
are included in other assets/(liabilities) in the balance sheets, were
approximately $(23) and $88 as of December 31, 1993 and 1992, respectively. The
components of the net deferred tax liability as of December 31, 1993 were as
follows:
<TABLE>
<CAPTION>
<S> <C>
Deferred tax assets:
Reserve for possible loan losses $ 12
Other real estate 562
Other 18
-----
$ 592
-----
Deferred tax liabilities:
Bank premises and equipment (576)
Investments (39)
-----
(615)
-----
Net deferred tax liability $ (23)
=====
</TABLE>
Under SFAS No. 109, a valuation allowance must be established against deferred
tax assets if, based on all available evidence, it is more likely than not that
some or all of the assets will not be realized. Based on income taxes paid
during the available carryback period, a valuation allowance is not required as
of December 31, 1993. Also, there are no regulatory capital restrictions
related to the Bank's deferred tax assets as of December 31, 1993.
F-15
<PAGE>
The following schedule reconciles the statutory Federal income tax rate to the
effective tax rate for the years ended December 31, 1993 and 1992:
<TABLE>
<CAPTION>
1993 1992
----- -----
<S> <C> <C>
Statutory tax rate 34.0% 34.0%
Tax exempt interest income (2.9) (4.4)
Non-deductible expenses 0.3 0.4
Other (1.8) (0.3)
---- ----
Effective tax rate 29.6% 29.7%
==== ====
</TABLE>
6. RELATED PARTY TRANSACTIONS:
--------------------------
In the ordinary course of business, the Bank makes loans to its directors,
officers and principal shareholders. These loans are made on substantially the
same terms, including interest rates and collateral, as those prevailing at the
time for comparable transactions with other customers, and do not involve more
than normal risk of collectibility or present other unfavorable features. Loans
made to directors, officers and principal shareholders, including their family
members and companies in which they have a significant ownership interest, are
summarized as follows:
<TABLE>
<S> <C>
Balance, December 31, 1992 $ 809
Additions and new loans 197
Repayments (255)
-----
Other (4)
-----
Balance, December 31, 1993 $ 747
=====
</TABLE>
In addition, the Bank has a number of banking relationships with other banks
which have certain significant shareholders and directors in common. The most
significant of these relationships relates to loan participations purchased from
and sold to these banks. Participations purchased from related banks amounted
to approximately $1,984 and $1,383 and participations sold totaled $2,758 and
$1,867 at December 31, 1993 and 1992, respectively.
At December 31, 1993 and 1992, the Bank also had approximately $60 and $82,
respectively, of deposits in related banks.
Certain data processing services are performed for the Bank by a related bank.
Fees under this agreement (included in other operating expenses) were $399 and
$374 in 1993 and 1992,
F-16
<PAGE>
respectively.
Certain loan processing services are performed by the Bank for a related bank.
The Bank billed the related bank $284 and $201 for the years ended December 31,
1993 and 1992, respectively, effectively reducing the costs of operating the
loan processing center which are included in other operating expenses in the
financial statements.
Certain loan review, internal audit and consulting services are performed for
the Bank by related banks. Charges for these services are included in other
operating expenses and totaled $19 and $18 in 1993 and 1992, respectively.
7. COMMITMENTS AND CONTINGENCIES:
-----------------------------
The Bank is involved in various litigation which is routine to the nature of its
business. Management believes that resolution of these matters will not result
in any material adverse effect on the financial statements.
The Bank is required to maintain cash on hand and non-interest bearing balances
with correspondent banks to fulfill its regulatory reserve requirements. The
average required reserve was approximately $557 and $473 in 1993 and 1992,
respectively.
In the normal course of business, there are various outstanding commitments to
extend credit which are not reflected in the financial statements. At December
31, 1993 and 1992, outstanding commitments under standby letters of credit were
approximately $567 and $447, respectively.
Additionally, in the normal course of business, there are various other
commitments and contingent liabilities which are not reflected in the financial
statements. Loan commitments are single-purpose commitments to lend which will
be funded and reduced according to specific repayment schedules. Most of these
commitments have maturities of less than one year. Total loan commitments
outstanding at December 31, 1993 were approximately $3,763. Lines of credit are
commitments to lend up to a specified amount for a period not to exceed one
year. Amounts outstanding under lines of credit fluctuate because they are
generally used to finance short-term, seasonal working capital needs of the
borrower. Total unfunded lines of credit outstanding as of December 31, 1993
were approximately $2,518.
The Bank uses the same credit policies in making commitments and issuing standby
letters of credit as it does for on-balance-sheet instruments. The Bank
evaluates each customer's credit worthiness on a case-by-case basis. The amount
of collateral obtained, if deemed necessary by the Bank upon extension of credit
is based on management's credit evaluation of the counterparty. Collateral held
varies but may include certificates of deposit, accounts receivable, inventory,
property, plant and equipment, and income-producing properties. There are no
commitments which present an unusual risk to the Bank, and no material losses
are anticipated as a result of these transactions.
F-17
<PAGE>
The principal source of liquidity for the Bank is core deposits. The Bank has
none of its deposits brokered or purchased in the national market. At December
31, 1993, 6% of the Bank's interest-bearing deposits were equal to or exceeded
$100. In management's opinion, funding and liquidity at the Bank is adequate to
meet its current financial commitments.
8. EMPLOYEE BENEFIT PLANS:
----------------------
Effective January 1, 1988, the Bank adopted a defined contribution savings plan
for its employees. Under the terms of the plan, the Bank shall make a matching
contribution of no less than 40% of the first 3% of the employee's compensation
contributed. For 1993 and 1992, the Bank matched 40% of the first 4% and 3%,
respectively, of employee contributions representing contributions of $18 and
$12, respectively. In addition, the employer may make a discretionary
contribution as authorized by the Board of Directors. The Bank made
discretionary contributions of 60% of employee contributions for 1993 and 1992,
resulting in contributions of $28 and $17, respectively.
F-18
<PAGE>
APPENDIX A
AGREEMENT AND PLAN OF MERGER
OF
AMERICAN BANK OF NORCO
WITH AND INTO
HIBERNIA NATIONAL BANK
AGREEMENT AND PLAN OF MERGER dated as of September 19, 1994 (this
"Agreement"), adopted and made between and among American Bank, a banking
association organized and existing under the laws of the State of Louisiana
("American Bank"), Hibernia National Bank ("HNB") and Hibernia Corporation
("Hibernia").
American Bank is a Louisiana banking association duly organized and
existing under the laws of the State of Louisiana and has its registered office
at 22 Apple Street, Norco, Louisiana 70079-2214. The presently authorized
capital stock of American Bank consists solely of 1,000,000 shares of common
stock of the par value of $1.00 each ("American Bank Common Stock") and 500
shares of preferred stock of the par value of $1,000 each ("American Bank
Preferred Stock"). As of June 30, 1994, 484,000 shares of American Bank Common
Stock had been issued, 484,000 shares of American Bank Common Stock were
outstanding, and no shares of American Bank Common Stock were held in American
Bank's treasury. As of June 30, 1994, no shares of American Bank Preferred
Stock had been issued or were outstanding. All outstanding shares of American
Bank Common Stock have been duly issued and are validly outstanding, fully paid
and nonassessable. The foregoing are the only voting securities of American
Bank authorized, issued, or outstanding, and there are no existing options,
warrants, calls, or commitments of any kind obligating American Bank to issue
any share of its capital stock or any other security of which it is or will be
the issuer. None of the shares of American Bank's capital stock has been issued
in violation of preemptive rights of shareholders.
Hibernia is a corporation duly organized and existing under the laws of the
State of Louisiana; has its registered office at 313 Carondelet Street, New
Orleans, Louisiana 70130; and is a bank holding company within the meaning of
the Bank Holding Company Act. Hibernia owns all of the issued and outstanding
shares of capital stock of HNB. The presently authorized capital stock of
Hibernia is 300,000,000 shares, consisting of 100,000,000 shares of preferred
stock, no par value, and 200,000,000 shares of Class A voting common stock, no
par value (the Class A voting common stock being referred to hereinafter as
"Hibernia Common Stock"). As of June 30, 1994, no shares of Hibernia's
preferred stock were outstanding, 83,717,760 shares of Hibernia Common Stock
were outstanding, and no shares of Hibernia Common Stock were held in Hibernia's
treasury. All outstanding shares of Hibernia Common Stock have been duly issued
and are validly outstanding, fully paid and nonassessable. The foregoing are
the only voting securities of
A-1
<PAGE>
Hibernia authorized, issued or outstanding and there are no existing options,
warrants, calls or commitments of any kind obligating Hibernia to issue any
share of its capital stock or any other security of which it is or will be the
issuer, except that Hibernia has authorized or reserved 1,718,707 shares of
Hibernia Common Stock for issuance under its 1987 Stock Option Plan, pursuant to
which options covering 1,557,491 shares of Hibernia Common Stock were
outstanding as of June 30, 1994, 3,660,087 (as adjusted) shares of Hibernia
Common Stock for issuance under its 1992 Long-Term Incentive Plan, pursuant to
which options covering 2,505,055 shares of Hibernia Common Stock were
outstanding as of June 30, 1994, 1,000,000 shares of Hibernia Common Stock for
issuance under its 1993 Director Stock Option Plan, pursuant to which options
covering 155,000 shares of Hibernia Common Stock are outstanding on the date
hereof and 574,147 shares of Hibernia Common Stock are available for issuance
pursuant to Hibernia's Dividend Reinvestment and Stock Purchase Plan. Mergers
that have been consummated with Commercial Bancshares, Inc., Bastrop National
Bank, First Bancorp of Louisiana, Inc. and First Continental Bancshares, Inc.
will result in the issuance of an aggregate of approximately 13,021,494 shares.
Pending mergers with Pioneer Bancshares Corporation and First State Bank and
Trust Company of Bogalusa will result in the issuance of approximately 11.9
million shares of Hibernia Common Stock. None of the shares of Hibernia's
capital stock has been issued in violation of preemptive rights of shareholders.
HNB is a national banking association organized and existing under the laws
of the United States of America having its principal registered office at 313
Carondelet Street, New Orleans, Louisiana 70130. All of the issued and
outstanding shares of capital stock of HNB are owned by Hibernia. HNB is (i) an
"insured bank" as defined in the Federal Deposit Insurance Act and applicable
regulations thereunder, and (ii) has been duly organized and is validly existing
as a national bank under the laws of the United States, and has full authority
to conduct its business as and where currently conducted.
The Boards of Directors of American Bank, HNB and Hibernia have duly
approved this Agreement and have authorized the execution hereof by their
respective undersigned officers. American Bank has directed that this Agreement
be submitted to a vote of its shareholders in accordance with 12 U.S.C. Section
215a, et seq. (the "Bank Merger Act") and the terms of this Agreement.
In consideration of their mutual promises and obligations, the parties
hereto adopt and make this Agreement for the merger of American Bank with and
into HNB and prescribe the terms and conditions of such merger and the mode of
carrying it into effect, which shall be as follows:
A-2
<PAGE>
1. The Merger. On the Effective Date (as defined in Section 14 hereof),
American Bank shall be merged with and into HNB under the Articles of
Association of HNB, pursuant to the provisions of, and with the effect provided
in, 12 U.S.C. Section 215a, et seq. (the "Bank Merger Act") (the "Merger") and
the Merger Agreement in substantially the form of Exhibit 1 hereto (the "Merger
Agreement").
2. Hibernia Capital Stock. The shares of the capital stock of Hibernia
issued and outstanding immediately prior to the Effective Date shall, on the
Effective Date, continue to be issued and outstanding.
3. American Bank Common Stock.
3.1. Conversion. On the Effective Date and subject to the provisions of
Section 3.7 hereof,
(a) the transfer books of American Bank shall be closed and all records
relating thereto promptly forwarded to Hibernia;
(b) each share of American Bank Common Stock issued and outstanding
immediately prior to the Effective Date, other than (i) shares as to which
dissenters' rights have been perfected and not withdrawn or otherwise forfeited
under the Bank Merger Act and (ii) shares owned beneficially by Hibernia or its
subsidiaries, shall, by virtue of the Merger automatically and without any
action on the part of the holder thereof, become and be converted into the
number of shares of Hibernia Common Stock that equals the Exchange Rate set
forth in Section 3.8 hereof;
(c) holders of certificates which represent shares of American Bank Common
Stock outstanding immediately prior to the Effective Date (hereinafter called
"Old Certificates") shall cease to be, and shall have no rights as, shareholders
of American Bank;
(d) each share of American Bank Common Stock held in the treasury of
American Bank or owned beneficially by Hibernia or any of its subsidiaries shall
be cancelled; and
(e) Old Certificates shall be exchangeable by the holders thereof in the
manner provided in the transmittal materials described below for new
certificates for the number of whole shares of Hibernia Common Stock to which
such holders shall be entitled in accordance with the Exchange Rate set forth in
Section 3.8 and a check representing cash paid in lieu of fractional shares as
provided in Section 3.2 hereof.
3.2. Fractional Shares. Each holder of Old Certificates who would
otherwise have been entitled to receive a fraction of a share of Hibernia Common
Stock (after taking into account all shares of American Bank Common Stock
represented by the Old
A-3
<PAGE>
Certificates then delivered by such holder) shall receive, in lieu thereof, cash
(without interest) in an amount equal to such fractional part of a share
multiplied by the Average Market Price (as defined in Section 3.8 below) of
Hibernia Common Stock, or, if the Hibernia Common Stock is not then so reported,
the average of the fair market values of one share of Hibernia Common Stock on
the five business days preceding the Effective Date determined pursuant to such
reasonable method as the Board of Directors of Hibernia may adopt in good faith
for such purpose, and no such holder shall be entitled to dividends, voting
rights or any other right of shareholders in respect of any fractional share.
3.3. Transmittal Materials. As promptly as practicable after the
Effective Date, Hibernia shall send or cause to be sent to each former
shareholder of record of American Bank transmittal materials for use in
exchanging Old Certificates for certificates representing Hibernia Common Stock
and a check representing cash paid in lieu of fractional shares, if any. The
letter of transmittal will contain instructions with respect to the surrender of
Old Certificates and the distribution of certificates representing Hibernia
Common Stock. If any certificate for shares of Hibernia Common Stock is to be
issued in a name other than that in which an Old Certificate surrendered for
exchange is issued, the Old Certificate so surrendered shall be properly
endorsed and otherwise in proper form for transfer and the person requesting
such exchange shall affix any requisite stock transfer tax stamps to the Old
Certificate surrendered or provide funds for their purchase or establish to the
satisfaction of the exchange agent to be appointed by Hibernia in connection
with such exchange (the "Exchange Agent") that such taxes are not payable.
3.4. Rights as Shareholders. Former shareholders of American Bank will be
able to vote after the Effective Date at any meeting of Hibernia shareholders or
pursuant to any written consent procedure the number of whole shares of Hibernia
Common Stock into which their shares of American Bank Common Stock are
converted, regardless of whether they have exchanged their Old Certificates.
Whenever a dividend is declared by Hibernia on Hibernia Common Stock after the
Effective Date, the declaration shall include dividends on all shares issuable
hereunder, but no shareholder will be entitled to receive his distribution of
such dividends until physical exchange of his Old Certificates shall have been
effected. Upon physical exchange of his Old Certificates, any such person shall
be entitled to receive from Hibernia an amount equal to all dividends (without
interest thereon and less the amount of taxes, if any, that may have been
withheld, imposed or paid thereon) declared, and for which the payment has
occurred, on the shares represented thereby.
3.5. Cancellation of Old Certificates. On and after the Effective Date
there shall be no transfers on the stock transfer books of American Bank of the
shares of American Bank Common Stock
A-4
<PAGE>
which were issued and outstanding immediately prior to the Effective Date. If,
after the Effective Date, Old Certificates are properly presented to Hibernia,
they shall be cancelled and exchanged for certificates representing shares of
Hibernia Common Stock and a check representing cash paid in lieu of fractional
shares as herein provided. Any other provision of this Agreement
notwithstanding, neither the Exchange Agent nor any party hereto shall be liable
to a holder of American Bank Common Stock for any amount paid or property
delivered in good faith to a public official pursuant to any applicable
abandoned property, escheat, or similar law.
3.6. Property Transfers. From time to time, as and when requested by
Hibernia and to the extent permitted by law, the officers and directors of
American Bank last in office shall execute and deliver such deeds and other
instruments and shall take or cause to be taken such further or other actions as
shall be necessary in order to vest or perfect in or to confirm of record or
otherwise to HNB title to, and possession of, all the property, interests,
assets, rights, privileges, immunities, powers, franchises, and authorities of
American Bank, and otherwise to carry out the purposes of this Agreement.
3.7. Dissenters' Shares. Shares of American Bank Common Stock held by any
holder having rights of a dissenting shareholder as provided in 12 U.S.C.
Section 215a, et seq., who shall have properly objected to the Merger and who
shall have properly demanded payment on his stock in accordance with and subject
to the provisions of 12 U.S.C. Section 215a, et seq. shall not be converted as
provided in Section 3.1 hereof until such time as such holder shall have failed
to perfect, or shall have effectively lost, his right to appraisal of and
payment for his shares of American Bank Common Stock, at which time such shares
shall be converted as provided in Section 3.1 hereof.
3.8. Exchange Rate.
(a) Except as provided in paragraphs (b) and (c) below in this Section
3.8, the Exchange Rate shall be the number that is obtained by dividing
2,250,000 by the total number of issued and outstanding shares of American Bank
Common Stock on the Closing Date.
(b) In the event the Average Market Price of Hibernia Common Stock (as
defined below) is less than $7.75, the Exchange Rate shall be calculated as
follows: [$17,437,500 divided by the Average Market Price of Hibernia Common
Stock] divided by 484,000 (the number of issued and outstanding shares of
American Bank Common Stock)]. In the event the Average Market Price of Hibernia
Common Stock (as defined below) is greater than $8.875, the Exchange Rate shall
be calculated as follows: [$19,968,750 divided by the Average Market Price of
Hibernia Common Stock]
A-5
<PAGE>
divided by 484,000 (the number of issued and outstanding shares of American Bank
Common Stock)]. Notwithstanding anything in this Section 3 to the contrary, if,
after the date of this Agreement and prior to the Effective Time, (i) Hibernia
shall announce that it has entered into an agreement, understanding or
arrangement to merge, consolidate or otherwise participate in a business
combination as a result of which Hibernia or HNB is to be merged or consolidated
with, or to exchange in excess of 50% of its shares of outstanding common stock
with, or sell all or substantially all of its assets to, a person, entity, or
group (as defined in Section 13(d)(3) of the Securities Exchange Act of 1934)
which is not an affiliate of Hibernia or HNB (a "Person") which agreement,
understanding or arrangement has not been terminated as of the tenth trading
prior to the Closing Date, and, as a result of such transaction, less than a
majority of the combined voting power of the then-outstanding securities of such
Person immediately after such transaction is held in the aggregate by the
holders of shares of Hibernia immediately prior to such transaction, or (ii) a
Person has acquired, or commenced a public offer that has not been withdrawn or
otherwise terminated as of the tenth trading day prior to the Closing Date, to
acquire control of Hibernia, through share ownership or otherwise, then in
either case described in (i) or (ii) of this provision, this paragraph (b) shall
be inapplicable and the Exchange Rate shall be determined pursuant to paragraph
(a) of Section 3.8.
(c) Notwithstanding any provision hereof to the contrary, including
Section 19 hereof, if the aggregate professional fees, including fees of counsel
and accountants, including expense reimbursements to such professionals, but
excluding fees of Montgomery Securities, incurred by American Bank in connection
with the Merger exceed $175,000, then (i) the number of shares of Hibernia
Common Stock to be issued in the Merger shall be reduced by the number of shares
resulting from application of the following formula (if the Exchange Rate is
calculated pursuant to paragraph (a) of this Section 3.8): (x - $175,000)
divided by Average Market Price of Hibernia Common Stock where x = the actual
aggregate professional fees and expenses incurred by American Bank, and (ii) in
the event the Exchange Rate is calculated pursuant to paragraph (b) of this
Section 3.8, the aggregate dollar amount of consideration to be paid in the form
of Hibernia Common Stock shall be reduced by the amount by which the actual
aggregate professional fees and expenses incurred by American Bank in connection
with the Merger exceeds $175,000.
(d) For purposes of this Agreement, the Average Market Price of Hibernia
Common Stock on the Closing Date shall be the average of the mean of the high
and low prices of one share of Hibernia Common Stock for the five business days
preceding the last trading day immediately prior to the Closing Date as reported
in The Wall Street Journal.
A-6
<PAGE>
4. Articles of Incorporation; Bylaws. The Articles of Incorporation and
Bylaws of Hibernia in force immediately prior to the Effective Date shall on and
after the Effective Date continue to be the Articles of Incorporation and Bylaws
of Hibernia, respectively, unless altered, amended or repealed in accordance
with applicable law.
5. Employees. Hibernia shall use its best efforts to cause to be
provided as soon as practicable after the Effective Date for the employees of
American Bank immediately prior to the Effective Date the employee benefits then
made available to employees of Hibernia and its subsidiaries, subject to the
terms and conditions under which those employee benefits are made available to
such employees; provided, however, that for purposes of determining the
eligibility of an employee of American Bank to receive, and the benefits to
which such employee shall be entitled, under Hibernia's benefits plans after the
Effective Date, any period of employment of such employee with American Bank
shall be deemed equivalent to having been employed for that same period by
Hibernia and/or its subsidiaries, (and employees of American Bank will not be
denied health insurance coverage solely as a result of a pre-existing condition
that existed on the Effective Date but did not exist on the date the employee
commenced his or her employment with American Bank) and provided, however, that
if Hibernia determines in good faith that it cannot merge any benefit plan of
American Bank into a comparable benefit plan of Hibernia or HNB without creating
material potential liability for Hibernia's or HNB's plan, then Hibernia shall
be entitled to freeze the existing benefit plan of American Bank and prohibit
participation by former employees of American Bank in Hibernia's plan for the
period of time required by applicable law to ensure that Hibernia's and HNB's
benefit plans are not deemed to be successor plans of the American Bank plan in
question.
6. Negative Covenants. From the date hereof until the Effective Date, or
until the termination of this Agreement, American Bank covenants and agrees that
it will not do, or agree to commit to do, without the prior written consent of
Hibernia, any of the following:
(a) make, declare, set aside or pay any dividend or declare or make any
distribution on, or directly or indirectly combine, redeem, purchase or
otherwise acquire, any shares of American Bank Common Stock (other than in a
fiduciary capacity);
(b) authorize the creation or issuance of or issue any additional shares
of its capital stock, or any options, calls, warrants, stock appreciation rights
or commitments relating to its capital stock or any securities or obligations
convertible into or exchangeable for, or giving any person any right to
subscribe for or acquire from it, shares of its capital stock;
A-7
<PAGE>
(c) enter into any employment contracts with, increase the rate of
compensation of, or except in accordance with the existing policy and past
practice in the two years preceding such bonus, pay or agree to pay any bonus
to, any of its directors, officers or employees; provided, however, that
American Bank may make a discretionary 401(k) plan distribution with respect to
fiscal year 1993 consistent in amount and timing with past practice in the
previous two years, so long as the aggregate amount of such distribution does
not exceed $32,000, and such amount is fully accrued prior to its payment;
(d) enter into or substantially modify (except as may be required by
applicable law) any pension, retirement, stock option, stock purchase, stock
appreciation right, savings, profit sharing, deferred compensation, consulting,
bonus, group insurance or other employee benefit, incentive or welfare contract,
plan or arrangement, or any trust agreement related thereto, in respect of any
of its directors, officers or other employees;
(e) other than as contemplated hereby, (i) carry on its business other
than in the usual, regular and ordinary course in substantially the same manner
as heretofore conducted, including, but not limited to, recording any negative
provision for loan losses, (ii) amend its Articles of Association or Bylaws,
(iii) establish or add any automatic teller machines or branch or other banking
offices, (iv) make any capital expenditures in excess of $100,000 (except that
American Bank may pay any and all obligations related to the maintenance of
equipment and other capital expenditures required to be paid prior to the
Effective Date under its EDP contract with Bank of St. John, so long as such
expenditures do not exceed $200,000 in the aggregate) or (v) take any action
that would materially adversely affect the ability of any party hereto to obtain
the approvals necessary for consummation of the transactions contemplated hereby
or that would materially and adversely affect American Bank's ability to perform
its covenants and agreements hereunder;
(f) except as otherwise provided herein, merge with any other corporation
or bank or permit any other corporation or bank to merge into it or consolidate
with any other corporation or bank; acquire control over any other firm, bank,
corporation or organization or create any subsidiary (except in a fiduciary
capacity or in connection with foreclosures in bona fide loan transactions);
liquidate; or sell or dispose of any assets or acquire any assets, otherwise
than in the ordinary course of its business consistent with its past practice;
or
(g) knowingly fail to comply with any laws, regulations, ordinances, or
governmental actions applicable to it and to the conduct of its business in a
manner significant, material and adverse to its business.
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7. Representations and Warranties of American Bank. American Bank hereby
represents and warrants as follows:
7.1. Recitals. The facts set forth in the preamble to this Agreement with
respect to it are true and correct.
7.2. Organization and Qualification. American Bank is a bank duly
organized, validly existing, and in good standing under the laws of the State of
Louisiana; has the corporate power and authority to carry on its business as it
is now being conducted and to own, lease and operate its assets, properties and
business; and has all requisite power and authority to execute and deliver this
Agreement and perform its obligations hereunder.
7.3. Ownership of Other Banks and Subsidiaries; Validity of Stock.
American Bank does not own, directly or indirectly, 5 percent or more of the
outstanding capital stock or other voting securities of any corporation, bank,
or other organization. Attached hereto as Schedule 7.3 is a list of all direct
and indirect subsidiaries of American Bank, the officers and directors of each
and the business and purpose of each such subsidiary. The outstanding shares of
capital stock of American Bank are validly issued and outstanding, fully paid
and, except as may be affected by Louisiana Revised Statute Section 6:262,
nonassessable.
7.4. Corporate Authorization. The execution, delivery and performance of
this Agreement have been authorized by American Bank's Board of Directors, and,
subject to the approval of this Agreement by its shareholders in accordance with
the Bank Merger Act, all corporate acts and other proceedings required for the
due and valid authorization, execution, delivery and performance by American
Bank of this Agreement and the consummation of the Merger have been validly and
appropriately taken. Subject to such shareholder approval and to such
regulatory approvals as are required by law, this Agreement is a legal, valid
and binding obligation of American Bank, enforceable against American Bank in
accordance with its terms, except that enforcement may be limited by bankruptcy,
reorganization, insolvency and other similar laws and court decisions relating
to or affecting the enforcement of creditors' rights generally and by general
equitable principles or principles of Louisiana law that are similar to
equitable principles in jurisdictions that recognize a distinction between law
and equity.
7.5. No Conflicts. Except as disclosed on Schedule 7.5 hereto, the
execution and delivery of this Agreement by American Bank does not, and the
consummation of the transactions contemplated hereby by it will not, constitute
(i) a breach or violation of, or a default under, any law, rule or regulation or
any judgment, decree, order, governmental permit or license, or agreement,
indenture or instrument of American Bank or to which American Bank is subject,
which breach, violation or default would
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have a material adverse effect on the financial condition, properties,
businesses or results of operations of American Bank or on the transactions
contemplated hereby, (ii) to the knowledge of American Bank's executive
officers, a breach or violation of, or a default under, any law, rule or
regulation or any judgment, decree, order, governmental permit or license, or
agreement, indenture or instrument of American Bank or to which American Bank is
subject, or (iii) a breach or violation of, or a default under, the Articles of
Association or Bylaws of American Bank; and the consummation of the transactions
contemplated hereby will not require any consent or approval under any such law,
rule, regulation, judgment, decree, order, governmental permit or license or the
consent or approval of any other party to any such agreement, indenture or
instrument, other than any required approvals of shareholders and applicable
regulatory authorities.
7.6. Financial Statements; Dividend Restrictions. American Bank has
delivered to Hibernia prior to the execution of this Agreement true and correct
copies of the following financial statements (collectively referred to herein as
the "American Bank Financial Statements"): American Bank's Balance Sheets as of
June 30, 1994 and 1993 (unaudited) and December 31, 1993, 1992 and 1991
(audited); Statements of Income and Changes in Stockholders' Equity and
Statements of Cash Flows for the years ended December 31, 1993, 1992 and 1991
(audited), and Statements of Income for the three-month periods ended June 30,
1994 and 1993 (unaudited). Each of the American Bank Financial Statements
(including the related notes) fairly presents the results of operations of
American Bank for the respective periods covered thereby and the financial
condition of American Bank as of the respective dates thereof (subject, in the
case of unaudited statements, to year-end audit adjustments that will not be
material in amount or effect), in each case in accordance with GAAP consistently
applied during the periods involved, except as may be noted therein. Except as
disclosed in the American Bank Financial Statements, including the notes
thereto, or Schedule 7.6 hereto, and except as otherwise required by this
Agreement, there are no restrictions in any note, indenture, agreement, statute
or otherwise (except for statutes or regulations applicable to Louisiana
corporations or state banks generally) precluding American Bank from paying
dividends, in each case when, as and if declared by its Board of Directors.
7.7. No Material Adverse Change. Since June 30, 1994, there has been no
event or condition of any character (whether actual, or to the knowledge of
American Bank's executive officers, threatened or contemplated) that has had or
can reasonably be anticipated to have, or that, if concluded or sustained
adversely to American Bank, would reasonably be anticipated to have, a material
adverse effect on the financial condition, results of operations or business of
American Bank, excluding changes in laws or regulations that affect banking
institutions generally.
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7.8. Litigation and Proceedings. Except as set forth on Schedule 7.8
hereto, no litigation, proceeding or controversy before any court or
governmental agency is pending against American Bank that in the opinion of its
executive officers is likely to have a material adverse effect on the business,
results of operations or financial condition of American Bank, and, to the
knowledge of its executive officers, no such litigation, proceeding or
controversy has been threatened or is contemplated. Except as disclosed on
Schedule 7.8 hereto, American Bank is not subject to any written agreement,
memorandum, or order with or by any bank or bank holding company regulatory
authority restricting its operations or requiring any material actions.
7.9. Material Contracts. Except for this Agreement and arrangements made
in the ordinary course of business or disclosed on Schedule 7.9 hereto, American
Bank is not bound by any material contract to be performed after the date hereof
that is not terminable by American Bank without penalty or liability on thirty
days prior notice.
7.10. Brokers' or Finders' Fees. No agent, broker, investment banker,
investment or financial advisor or other person acting on behalf of American
Bank or under their authority is entitled to any commission, broker's or
finder's fee from any of the parties hereto in connection with any of the
transactions contemplated by this Agreement except that American Bank has
engaged Montgomery Securities in connection with the Merger and has agreed to
compensate Montgomery Securities for such services. A copy of the agreement by
which American Bank has engaged Montgomery Securities is attached hereto as
Exhibit 7.10 and contains all agreements between American Bank and Montgomery
Securities relating to services in connection with the Merger and compensation
therefor.
7.11. Contingent Liabilities. Except as disclosed on Schedule 7.11 hereto
or as reflected in the American Bank Financial Statements and except for
unfunded loan commitments made in the ordinary course of business consistent
with past practices, as of June 30, 1994, American Bank had no obligation or
liability (contingent or otherwise) that was material, or that when combined
with all similar obligations or liabilities would have been material, to
American Bank, and there does not exist a set of circumstances resulting from
transactions effected or events occurring prior to, on, or after June 30, 1994,
or from any action omitted to be taken during such period that, to the knowledge
of American Bank's executive officers, could reasonably be expected to result in
any such material obligation or liability.
7.12. Tax Liability. The amounts set up as liabilities for taxes in the
American Bank Financial Statements are sufficient for the payment of all
respective taxes (including, without limitation, federal, state, local, and
foreign excise, franchise,
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property, payroll, income, capital stock, and sales and use taxes) accrued in
accordance with GAAP and unpaid at the respective dates thereof.
7.13. Material Obligations Paid. Since June 30, 1994, American Bank has
not incurred or paid any obligation or liability that would be material to
American Bank, except for obligations incurred or paid in connection with
transactions by it in the ordinary course of its business consistent with its
past practices.
7.14. Tax Returns; Payment of Taxes. All federal, state, local, and
foreign tax returns (including, without limitation, estimated tax returns,
withholding tax returns with respect to employees, and FICA and FUTA returns)
required to be filed by or on behalf of American Bank have been timely filed or
requests for extensions have been timely filed and granted and have not expired
for periods ending on or before December 31, 1992, and all returns filed are
complete and accurate to the best information and belief of its executive
officers; all taxes shown on filed returns have been paid. As of the date
hereof, there is no audit, examination, deficiency or refund litigation or
matter in controversy with respect to any taxes that might result in a
determination materially adverse to American Bank except as reserved against in
the American Bank Financial Statements. All taxes, interest, additions and
penalties due with respect to completed and settled examinations or concluded
litigation have been paid, and American Bank's reserves for bad debts at
December 31, 1993, as filed with the Internal Revenue Service were not greater
than the maximum amounts permitted under the provisions of Section 585 of the
Internal Revenue Code of 1986, as amended (the "Internal Revenue Code").
7.15. Loans. To the knowledge of its executive officers, each loan
reflected as an asset of American Bank in the American Bank Financial
Statements, as of June 30, 1994, or acquired since that date, is the legal,
valid, and binding obligation of the obligor named therein, enforceable in
accordance with its terms, and no loan is subject to any asserted defense,
offset or counterclaim known to American Bank, except as disclosed in writing to
Hibernia on or prior to the date hereof.
7.16. Allowance for Loan Losses. The allowances for possible loan losses
shown on the balance sheet of American Bank as of June 30, 1994 are adequate in
all material respects under the requirements of GAAP to provide for possible
losses, net of recoveries, relating to loans previously charged off, on loans
outstanding (including accrued interest receivable) as of June 30, 1994, and
each such allowance has been established in accordance with GAAP.
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7.17. Title to Assets; Adequate Insurance Coverage.
(a) As of June 30, 1994, American Bank had, and except with respect to
assets disposed of for adequate consideration in the ordinary course of business
since such date, now have, good and merchantable title to all real property and
good and merchantable title to all other material properties and assets
reflected in the American Bank Financial Statements, free and clear of all
mortgages, liens, pledges, restrictions, security interests, charges and
encumbrances of any nature except for (i) mortgages and encumbrances which
secure indebtedness which is properly reflected in the American Bank Financial
Statements or which secure deposits of public funds as required by law; (ii)
liens for taxes accrued but not yet payable; (iii) liens arising as a matter of
law in the ordinary course of business with respect to obligations incurred
after June 30, 1994, provided that the obligations secured by such liens are not
delinquent or are being contested in good faith; (iv) such imperfections of
title and encumbrances, if any, as do not materially detract from the value or
materially interfere with the present use of any of such properties or assets or
the potential sale of any such owned properties or assets; and (v) capital
leases and leases, if any, to third parties for fair and adequate consideration.
American Bank owns, or has valid leasehold interests in, all material properties
and assets, tangible or intangible, used in the conduct of its business. Any
real property and other material assets held under lease by American Bank are
held under valid, subsisting and enforceable leases with such exceptions as are
not material and do not interfere with the use made of such property on the date
hereof.
(b) With respect to each lease of any real property or a material amount
of personal property to which American Bank is a party, except for financing
leases in which American Bank is lessor: (i) such lease is in full force and
effect in accordance with its terms; (ii) all rents and other monetary amounts
that have become due and payable thereunder have been paid; (iii) there exists
no default or event, occurrence, condition or act which with the giving of
notice, the lapse of time or the happening of any further event, occurrence,
condition or act would become a default under such lease; and (iv) the Merger
will not constitute a default or a cause for termination or modification of such
lease.
(c) American Bank has no legal obligation, absolute or contingent, to any
other person to sell or otherwise dispose of any substantial part of its assets
or to sell or dispose of any of its assets except in the ordinary course of
business consistent with past practices.
(d) To the knowledge of its executive officers, the policies of fire,
theft, liability and other insurance maintained
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with respect to the assets or business of American Bank provide adequate
coverage against loss.
7.18. Employee Plans. To the knowledge of American Bank's executive
officers, American Bank and all "employee benefit plans," as defined in Section
3(3) of the Employee Retirement Income Security Act of 1974, as amended
("ERISA"), that cover one or more employees employed by American Bank:
(i) is in compliance with all laws, regulations, reporting and licensing
requirements and orders applicable to its business or to such plan or any of its
employees (because of such employee's activities on behalf of it), the breach or
violation of which could have a material adverse effect on such business; and
(ii) has received no notification from any agency or department of
federal, state or local government or the staff thereof asserting that any such
entity is not in compliance with any of the statutes, regulations or ordinances
that such governmental authority enforces, or threatening to revoke any license,
franchise, permit or governmental authorization, and is subject to no agreement
with any such governmental authority with respect to its assets or business.
7.19. Copies of Employee Plans. Within ten days after the date hereof,
American Bank will provide to Hibernia true, complete and accurate copies of all
pension, retirement, stock purchase, stock bonus, stock ownership, stock option,
savings, stock appreciation right or profit-sharing plans, any employment,
deferred compensation, consultant, severance, bonus, or collective bargaining
agreement or group insurance contract, or any other incentive, welfare, or
employee benefit plan or agreement maintained by it for its employees or former
employees.
7.20. Plan Liability. Except for liabilities to the Pension Benefit
Guaranty Corporation pursuant to Section 4007 of ERISA, all of which have been
fully paid, and except for liabilities to the Internal Revenue Service under
section 4971 of the Internal Revenue Code, all of which have been fully paid,
American Bank has no liability to the Pension Benefit Guaranty Corporation or to
the Internal Revenue Service with respect to any pension plan qualified under
Section 401 of the Internal Revenue Code.
7.21. No Default. American Bank is not in default in any material respect
under any contract, agreement, commitment, arrangement, lease, insurance policy
or other instrument to which it is a party or by which its respective assets,
business or operations may be bound or affected or under which it or its
respective assets, business or operations receive benefits, and there has not
occurred any event that with the lapse of time or the giving of notice or both
would constitute such a default.
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<PAGE>
7.22. Minutes. Prior to the date hereof, American Bank has made available
to Hibernia for inspection, the minutes of meetings of American Bank's Board of
Directors and all committees thereof held prior to the date hereof, which
minutes are complete and correct in all respects and fully and fairly present
the deliberations and actions of such Board and committees.
7.23. Insurance Policies. Attached hereto as Schedule 7.23 is a schedule
detailing all policies of fire, theft, public liability, and other insurance
(including without limitation fidelity bonds and directors and officers
liability insurance) maintained by American Bank at the date hereof. Except as
disclosed on Schedule 7.23 hereto, American Bank has not received any notice of
a premium increase or cancellation with respect to any of its insurance policies
or bonds, and within the last three years, American Bank has not been refused
any insurance coverage sought or applied for, and it has no reason to believe
that existing insurance coverage cannot be renewed as and when the same shall
expire, upon terms and conditions as favorable as those presently in effect,
other than possible increases in premiums or unavailability of coverage that do
not result from any extraordinary loss experience of American Bank.
7.24. Investments. Except for pledges to secure public or trust deposits,
none of the investments reflected in the American Bank Financial Statements
under the heading "Investment Securities," and none of the investments made by
American Bank since June 30, 1994, and none of the assets reflected in the
American Bank Financial Statements under the heading "Cash and Due From Banks,"
is subject to any restriction, whether contractual or statutory, that materially
impairs the ability of American Bank freely to dispose of such investment at any
time. With respect to all repurchase agreements to which American Bank is a
party, American Bank has a valid, perfected first lien or security interest in
the government securities or other collateral securing each such repurchase
agreement which equals or exceeds the amount of the debt secured by such
collateral under such agreement.
7.25. Environmental Matters. Neither American Bank nor, to the knowledge
of its executive officers, any previous owner or operator of any properties at
any time owned (including any properties owned as a result of foreclosure of a
loan, whether still owned or subsequently resold) leased, or occupied by
American Bank or used by American Bank in its business ("American Bank
Properties") used, generated, treated, stored, or disposed of any hazardous
waste, toxic substance, or similar materials on, under, or about American Bank
Properties except in material compliance with all applicable federal, state, and
local laws, rules, and regulations pertaining to air and water quality,
hazardous waste, waste disposal, air emissions, and other environmental matters
("Environmental Laws"). American Bank has not received any notice of
noncompliance with Environmental Laws, orders, or regulations of
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any governmental authorities relating to waste generated by any such party or
otherwise or notice that any such party is liable or responsible for the
remediation, removal, or clean-up of any site relating to American Bank
Properties. American Bank has obtained all material permits, licenses and other
authorizations that are required to be obtained by it under any applicable
Environmental Law in connection with the operation of its business and ownership
of American Bank Properties, and except as disclosed on Schedule 7.25 hereto, is
in compliance in all material respects with all terms and conditions of such
permits, licenses, and authorizations.
8. Representations and Warranties of Hibernia. Hibernia hereby
represents and warrants as follows:
8.1. Recitals. The facts set forth in the preamble to this Agreement with
respect to it are true and correct.
8.2. Organization and Qualification. Hibernia is a corporation, and HNB
is a national banking association, duly organized, validly existing and in good
standing under the laws of the State of Louisiana and the United States of
America, respectively. Each of Hibernia and HNB has the corporate power and
authority to carry on its business as it is now being conducted and to own,
lease and operate its assets, properties and business, and has all requisite
power and authority to execute and deliver this Agreement and perform its
obligations hereunder.
8.3. Shares Fully Paid and Non Assessable. The outstanding shares of
capital stock of Hibernia and HNB are validly issued and outstanding, fully paid
and nonassessable (subject, in the case of HNB, to 12 U.S.C. Section 55) and all
of such shares of HNB are owned directly or indirectly by Hibernia free and
clear of all liens, claims, and encumbrances. The shares of Hibernia Common
Stock to be issued in connection with the Merger pursuant to this Agreement will
have been duly authorized and, when issued in accordance with the terms of this
Agreement, will be validly issued, fully paid, and nonassessable.
8.4. Due Authorization. The execution, delivery and performance of this
Agreement have been authorized by Hibernia's and HNB's respective Boards of
Directors, and, subject to the regulatory and other approvals required by
Section 12 hereof, all corporate acts and other proceedings required for the due
and valid authorization, execution, delivery and performance by Hibernia and HNB
of this Agreement and the consummation of the Merger have been validly and
appropriately taken. Subject to receipt of the regulatory and other approvals
required by Section 12 hereof, this Agreement is a legal, valid, and binding
obligation of Hibernia and HNB enforceable against Hibernia and HNB, as the case
may be, in accordance with its terms, except that enforcement may be limited by
bankruptcy, insolvency, and other laws of general applicability relating to or
affecting creditors' rights generally and by general
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equitable principles or principles of Louisiana law that are similar to
equitable principles in jurisdictions that recognize a distinction between law
and equity.
8.5. No Conflicts. Except as disclosed on Schedule 8.5 hereto, the
execution and delivery of this Agreement by Hibernia and HNB does not, and the
consummation of the transactions contemplated hereby by it will not, constitute
(i) a breach or violation of, or a default under, any law, rule, or regulation
or any judgment, decree, order, governmental permit or license, or agreement,
indenture, or instrument of Hibernia or HNB or by which Hibernia or HNB is
subject, which breach, violation or default would have a material adverse effect
on the financial condition, properties, businesses, or results of operations of
Hibernia and HNB taken as a whole or on the transactions contemplated hereby,
(ii) to the knowledge of Hibernia's executive officers, a breach or violation
of, or a default under, any law, rule, or regulation or any judgment, decree,
order, governmental permit or license, or agreement, indenture, or instrument of
Hibernia or HNB or to which Hibernia or HNB is subject, or (iii) a breach or
violation of, or a default under the Articles of Incorporation or Association or
Bylaws of Hibernia, or of HNB, and the consummation of the transactions
contemplated hereby will not require any consent or approval under any such law,
rule, regulation, judgment, decree, order, governmental permit or license or the
consent or approval of any other party to any such agreement, indenture, or
instrument, other than any required approvals of shareholders and applicable
regulatory authorities.
8.6. Reports of Hibernia. As of their respective dates, none of its
Annual Report on Form 10-K for the fiscal year ended December 31, 1993, its
Quarterly Reports on Form 10-Q for the periods ended March 31, 1994 and June 30,
1994, and its proxy statement for its 1994 annual meeting of shareholders, each
in the form (including exhibits) filed with the Securities and Exchange
Commission (the "SEC") and its quarterly report to shareholders for the periods
ended March 31, 1994 and June 30, 1994 (collectively, the "Hibernia Reports"),
contained any untrue statement of a material fact or omitted to state a material
fact required to be stated therein or necessary to make the statements made
therein, in light of the circumstances under which they were made, not
misleading. There is no fact or circumstance that, individually or in the
aggregate, materially and adversely has affected or is so affecting, or, in the
opinion of the executive officers of Hibernia, may reasonably be expected in the
future to so affect, the business, financial condition, net worth, properties or
results of operations of Hibernia and HNB, taken as a whole, that has not been
disclosed in the Hibernia Reports. Each of the balance sheets in or
incorporated by reference into the Hibernia Reports (including the related
notes) fairly presents the financial position of the entity or entities to which
it relates as of its date and each of the statements of income and stockholders'
equity
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and statement of cash flows or equivalent statements in the Hibernia Reports
(including any related notes and schedules) fairly presents the results of
operations and changes in stockholders' equity, as the case may be, of the
entity or entities to which it relates for the periods set forth therein
(subject, in the case of unaudited statements, to year-end audit adjustments
that will not be material in amount or effect), in each case in accordance with
GAAP consistently applied during the periods involved, except as may be noted
therein. Copies of the Hibernia Reports have been furnished to American Bank on
or before the date hereof.
8.7. No Material Adverse Change. Since June 30, 1994, there has been no
event or condition of any character (whether actual, or to the knowledge of
Hibernia or HNB, threatened or contemplated) that has had or can reasonably be
anticipated to have, or that, if concluded or sustained adversely to Hibernia,
would reasonably be anticipated to have, a material adverse effect on the
financial condition, results of operations or business of Hibernia or HNB,
excluding changes in laws or regulations that affect banking institutions
generally.
8.8. Loans. To the best knowledge of Hibernia's executive officers and
the executive officers of HNB, each loan reflected as an asset of Hibernia in
the unaudited consolidated balance sheet contained in Hibernia's quarterly
report to shareholders for the period ended June 30, 1994, or acquired since
that date, is the legal, valid and binding obligation of the obligor named
therein, enforceable in accordance with its terms, and no loan is subject to any
asserted defense, offset, or counterclaim known to Hibernia, except as disclosed
on Schedule 8.8 hereto.
8.9. Allowance for Loan Losses. The allowances for possible loan losses
shown on the balance sheet of Hibernia as of June 30, 1994, are adequate in all
material respects under the requirements of GAAP to provide for possible losses,
net of recoveries, relating to loans previously charged off, on loans
outstanding (including accrued interest receivable) as of June 30, 1994, and
each such allowance has been established in accordance with GAAP.
8.10. Litigation. Except as disclosed on Schedule 8.10 hereto, no
litigation, proceeding or controversy before any court or governmental agency is
pending that in the opinion of Hibernia's executive officers is likely to have a
material adverse effect on the business, results of operations or financial
condition of Hibernia and its subsidiaries taken as a whole, and, to the best
knowledge of its executive officers, no such litigation, proceeding or
controversy has been threatened or is contemplated. Except as disclosed on
Schedule 8.10, neither Hibernia nor HNB is subject to any written agreement,
memorandum or order with or by any bank or
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bank holding company regulatory authority that materially restricts its
operations or requires any material actions.
8.11. Environmental Matters. Hibernia and HNB are in material compliance
with all environmental laws and regulations applicable to them as to which
failure to comply could be reasonably anticipated to result in a material
adverse change in the financial condition of Hibernia or a material loss to
Hibernia or HNB.
8.12. Community Reinvestment Act Performance Evaluation. Attached hereto
as Schedule 8.12 is copy of the Community Reinvestment Act Performance
Evaluation presently in effect with respect to HNB.
8.13. Restrictions on Operations or Dividends. There are no regulatory
orders or agreements (except for statutes or regulations applicable to Louisiana
corporations or national banks generally) restricting the operations of, or
precluding the payment of dividends by, Hibernia or HNB.
9. Agreements and Covenants. Hibernia, HNB and American Bank each hereby
agrees and covenants to the other that:
9.1. Shareholder Approvals. If required by applicable law, this Agreement
shall be submitted to its respective shareholders at a special meeting called
and held in accordance with applicable provisions of law (to be scheduled to the
extent possible for the date of the shareholders' meeting for the other party
hereto, if any) at which its shareholders shall be asked to consider and vote
upon this Agreement and the transactions contemplated hereby.
9.2. Actions Necessary to Complete Merger. It shall use its best efforts
in good faith to take or cause to be taken all action necessary or desirable
under this Agreement on its part as promptly as practicable so as to permit the
consummation of this Agreement at the earliest possible date (including
obtaining the consent or approval of each governmental authority and individual,
partnership, corporation, association, or any other form of business or
professional entity whose consent or approval is required for the consummation
of the transactions contemplated hereby, requesting the delivery of appropriate
opinions and letters from its counsel and recommending that this Agreement be
approved by its shareholders) and cooperate fully with the other party hereto to
that end; provided, however, that neither party shall be obligated to take or
cause to be taken any action which is or creates a material burden on such
party, except to the extent such actions are reasonably anticipated to be
required in order to effect the Merger.
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9.3. Preparation of Registration Statement and Proxy Statement. It shall
prepare as promptly as practicable jointly with the other party hereto a proxy
statement to be mailed to the shareholders of each party the shareholders of
which are to vote upon this Agreement in connection with the transactions
contemplated hereby and to be part of a registration statement (the
"Registration Statement") to be filed by Hibernia with the SEC pursuant to the
Securities Act of 1933, as amended (the "1933 Act") with respect to the shares
to be issued in the Merger. When the Registration Statement or any post-
effective amendment thereto shall become effective, and at all times subsequent
to such effectiveness, up to and including the time of the last shareholder
meeting with respect to the transactions contemplated hereby, such Registration
Statement and all amendments or supplements thereto, with respect to all
information set forth therein furnished or to be furnished by Hibernia relating
to Hibernia and by American Bank relating to American Bank, (i) will comply in
all material respects with the provisions of the 1933 Act and the rules and
regulations of the SEC thereunder and (ii) will not contain any untrue statement
of a material fact or omit to state a material fact required to be stated
therein or necessary to make the statements contained therein not misleading.
Hibernia will advise American Bank promptly after it receives notice thereof of
the time when the Registration Statement has become effective or any supplement
or amendment has been filed, of the issuance of any stop order, of the
suspension of the qualification of the Hibernia Common Stock issuable in
connection with the Merger for offering or sale in any jurisdiction, of the
initiation or threat of any proceeding for any such purpose, or of any request
by the SEC for the amendment or supplement of the Registration Statement or for
additional information.
9.4. Press Releases and Public Statements. Unless approved by Hibernia in
advance, American Bank will not issue any press release, marketing or
advertising material or other written statement for general circulation relating
to the transactions contemplated hereby, except as otherwise required by law.
The parties will cooperate in any public announcements directly related to the
Merger; provided, however, that, in the event Hibernia determines to file a
current report on Form 8-K that discloses only the substantive facts of a
previously released press release, such filing may be made without prior
consultation with American Bank so long as American Bank is furnished with a
copy of such report within a reasonable time after its filing.
9.5. Material Developments; Access to Information.
(i) In order to afford American Bank access to such information as it may
reasonably deem necessary to perform its due diligence review with respect to
Hibernia and HNB and its assets in connection with the Merger, Hibernia shall
(and shall cause HNB to), (A) upon reasonable notice, afford American Bank and
its
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officers, employees, counsel, accountants and other authorized representatives,
during normal business hours throughout the period prior to the Effective Date
and to the extent consistent with applicable law, access to its premises,
properties, books and records, and to furnish American Bank and such
representatives with such financial and operating data and other information of
any kind respecting its business and properties as American Bank shall from time
to time reasonably request to perform such review, (B) furnish American Bank
with copies of all reports filed by Hibernia with the Securities and Exchange
Commission ("SEC") throughout the period after the date hereof prior to the
Effective Date promptly after such reports are so filed, and (C) promptly advise
American Bank of the occurrence before the Effective Date of any event or
condition of any character (whether actual or to the knowledge of Hibernia,
threatened or contemplated) that has had or can reasonably be anticipated to
have, or that, if concluded or sustained adversely to Hibernia, would reasonably
be anticipated to have, a material adverse effect on the financial condition,
results of operations or business of its consolidated group as a whole.
(ii) In order to afford Hibernia access to such information as it may
reasonably deem necessary to perform any due diligence review with respect to
the assets of American Bank to be acquired as a result of the Merger, American
Bank shall, upon reasonable notice, afford Hibernia and its officers, employees,
counsel, accountants, and other authorized representatives access, during normal
business hours throughout the period prior to the Effective Date, to all of the
Bank's properties, books, contracts, commitments, loan files, litigation files,
and records (including, but not limited to, the minutes of the Boards of
Directors of American Bank and all committees thereof), and it shall, upon
reasonable notice and to the extent consistent with applicable law, furnish
promptly to Hibernia such information as Hibernia may reasonably request to
perform such review.
(iii) No investigation pursuant to this Section 9.5 shall affect or be
deemed to modify any representation or warranty made by, or the conditions to
the obligations to consummate the Merger of, either party to this Agreement.
9.6. Prohibited Negotiations. Prior to the Effective Date, American Bank
shall not solicit or encourage inquiries or proposals with respect to, furnish
any information relating to, or participate in any negotiations or discussions
concerning, any acquisition or purchase of all or a substantial portion of the
assets of, or of a substantial equity interest in, American Bank or any business
combination with American Bank other than as contemplated by this Agreement.
American Bank shall instruct each officer, director, agent, or affiliate of it
to refrain from doing any of the above, and American Bank will notify Hibernia
promptly if any such inquiries or proposals are received by, any such
information is requested from, or any such negotiations or
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discussions are sought to be initiated with, American Bank; provided, however,
that nothing contained in this section shall be deemed to prohibit any officer
or director of American Bank from taking any action that, in the opinion of
counsel to American Bank, is required by applicable law. In the event such
opinion is rendered in writing, American Bank agrees to furnish a copy thereof
to Hibernia promptly after its issuance.
9.7. Affiliates. Prior to the Closing Date (as defined in Section 14
hereof), American Bank shall deliver to Hibernia a letter identifying all
persons whom it believes to be "affiliates" of American Bank for purposes of
Rule 145(c) or Rule 144 (as applicable) under the 1933 Act ("Affiliates").
American Bank shall use its best efforts to cause each person so identified to
deliver to Hibernia prior to the Effective Date a written agreement in
substantially the form of Exhibit 9.7 hereto providing, among other things,that
such person will not dispose of Hibernia Common Stock received in the Merger
except in compliance with the 1933 Act and the rules and regulations thereunder
and except in accordance with Section 201.01 of the SEC's Codification of
Financial Reporting Policies; provided, however, that American Bank shall have
no such obligation to use its best efforts to cause any such identified person
to deliver to Hibernia such agreement if such person may not lawfully execute
such agreement.
9.8. Adjustment for Changes in Outstanding Shares. In the event that
prior to the Effective Date the outstanding shares of Hibernia Common Stock
shall have been increased, decreased, or changed into or exchanged for a
different number or kind of shares or securities by reorganization,
recapitalization, reclassification, stock dividend, stock split, or other like
changes in the Hibernia's capitalization, then an appropriate and proportionate
adjustment shall be made in the number and kind of shares of Hibernia Common
Stock to be thereafter delivered pursuant to Section 3.1 hereof. It is
expressly understood and agreed, however, that any change in the outstanding
shares of Hibernia resulting from (i) the consummation of a merger of an
institution with and into Hibernia or HNB, whether or not such merger was
pending on the date hereof, (ii) the exercise of stock options granted to
employees or directors of Hibernia or HNB, or (iii) the exercise of any warrant
or other right to receive Hibernia Common Stock described in the recitals to
this Agreement, shall not result in the adjustment of the number of shares of
Hibernia Common Stock to be issued in the Merger pursuant to this Section 9.8.
9.9. Accounting Treatment. It shall use its best efforts to cause the
Merger to qualify for pooling-of-interests accounting treatment to the extent
factors affecting such treatment are within its control.
9.10. Adoption of Accounting Policies. As soon as practicable after the
satisfaction or waiver of all conditions to
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the Closing set forth in Section 12 of this Agreement and in any event prior to
the Effective Date (unless this Agreement is terminated pursuant to Section 13
hereof), American Bank shall take any and all necessary or appropriate actions
to adopt all Hibernia accounting procedures and policies (including without
limitation those policies pertaining to charged-off and non-accrual assets);
provided, however, that no such action taken by American Bank at the request of
Hibernia or HNB pursuant to this Section shall be deemed to be, or be deemed to
cause, a breach of any representation or warranty made by American Bank herein.
9.11. Indemnification of Directors and Officers of American Bank.
(a) From and after the Effective Date of the Merger, HNB agrees to
indemnify and hold harmless each person who, as of the date immediately prior to
the Closing Date, served as an officer or director of American Bank and their
respective heirs and estates (an "Indemnified Person") from and against all
damages, liabilities, judgments and claims (and related expenses including, but
not limited to, attorney's fees and amounts paid in settlement) based upon or
arising from his capacity as an officer or director of American Bank, to the
same extent as he would have been indemnified under the Articles of Association
and/or Bylaws of HNB, as such documents were in effect on the date of this
Agreement as if he were an officer or director of HNB at all relevant times
(regardless whether such Articles or Bylaws are subsequently amended or
repealed); provided, however, that the indemnification provided by this Section
shall not apply to any claim against an Indemnified Person if such Indemnified
Person knew of the existence of the claim and failed to make a good faith effort
to require American Bank to notify its director and officer liability insurance
carrier, if any, of the existence of such claim prior to the Closing Date.
(b) The rights granted to the Indemnified Persons hereby shall be
contractual rights inuring to the benefit of all Indemnified Persons and shall
survive this Agreement and any merger, consolidation or reorganization of
Hibernia or HNB.
(c) The rights to indemnification granted by this Section 9.11 are subject
to the following limitations: (i) the total aggregate indemnification to be
provided by HNB pursuant to subsection 9.11(a) shall not exceed, as to all of
the Indemnified Persons as a group, the sum of $5 million, and Hibernia shall
have no responsibility to any Indemnified person for the manner in which such
sum is allocated among that group (but nothing in this subsection is intended to
prohibit the Indemnified Persons from seeking reallocation among themselves);
(ii) a director or officer who would otherwise be an Indemnified Person under
this Section 9.11 shall not be entitled to the benefits hereof unless such
director or officer has executed a Joinder Agreement (the "Joinder
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Agreement") in the form of Exhibit 9.11 hereto; and (iii) amounts otherwise
required to be paid by HNB to an Indemnified Person pursuant to this Section
9.11 shall be reduced by any amounts that such Indemnified Person recovers by
virtue of the claim for which indemnification is sought.
(d) HNB and Hibernia agree that the $5 million indemnification limit set
forth in paragraph (c) of this Section 9.11 shall not apply to any damages,
liabilities, judgments and claims (and related expenses, including but not
limited to attorney's fees and amounts paid in settlement) insofar as (i) they
arise out of or are based upon the matters for which indemnification is provided
in Section 11.2 hereof, or (ii) they arise out of or are based upon actions or
inaction of one or more Hibernia or HNB officers, directors or employees (other
than the Indemnified Person) after the Effective Date.
9.12 Covenant to Close. At such time as is deemed appropriate by the
parties hereto or as otherwise set forth in this Agreement, and upon
satisfaction or waiver of each of the conditions to Closing of the Merger, the
parties agree to take such actions as are reasonably necessary or appropriate to
effect the Closing and the Merger.
9.13 Conduct of Business in Ordinary Course. American Bank shall conduct
its business in the ordinary course as conducted on the date hereof, consistent
with past practices, from the date hereof through the Closing Date, and shall
use its best efforts to preserve its existing relationships with clients,
customers, vendors and employees.
9.14. Retention Agreements and Severance. To the extent not prohibited by
applicable law or administrative or court order or decree, Hibernia agrees to
assume and pay without modification or amendment all obligations of American
Bank under those certain retention agreements and severance policies identified
on Schedule 9.14 hereto; provided, however, that Hibernia shall not be obligated
to pay severance to any individual (except R. Preston Wailes, with respect to
whom this proviso shall not apply so long as his severance payment from American
Bank does not exceed in the aggregate $125,400) to whom Hibernia paid severance
in connection with its merger with First Continental Bancshares, Inc. and,
provided further, however, that the parties hereto expressly acknowledge and
agree that Hibernia may require employees of American Bank who are recipients of
severance to execute a severance agreement, providing for confidentiality,
release of liability, cooperation in litigation and related matters as a
condition to such severance without breaching this provision or the terms of
American Bank's severance policies and agreements.
9.15. Voting of American Bank Shares. Hibernia and HNB agree that, in the
event either of them owns any shares of American
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Bank Common Stock as of the date of the American Bank shareholders' meeting,
Hibernia or HNB, as the case may be, will vote such shares, or cause such shares
to be voted, in favor of the Merger.
10. Permits, Consents and Approvals. As promptly as practicable after the
date hereof:
(a) Hibernia shall submit an application to the Comptroller of the
Currency (the "Comptroller") for approval of the transactions contemplated
hereby in accordance with the provisions of the Bank Merger Act;
(b) American Bank shall endeavor to have its Affiliates execute a written
agreement in substantially the form of Exhibit 9.7 hereto; provided, however,
that American Bank shall have no such obligation prior to the receipt by the
Board of Directors of American Bank of the Fairness Opinion described in Section
12.13 hereof; and
(c) American Bank shall endeavor to have each of the directors of American
Bank execute an Agreement in substantially the form of Exhibit 10(d) hereto;
provided, however, that American Bank shall have no such obligation prior to the
receipt by the Board of Directors of American Bank of the Fairness Opinion.
11. Confidentiality; Hold Harmless; Restriction on Acquisitions.
11.1. Confidentiality. For a period of five years after the date hereof,
the parties hereto acknowledge that each of them or their representatives or
agents has engaged in, and may continue to engage in, certain due diligence
reviews and examinations with respect to the other and that, in the course of
such reviews and examination, has received or may receive in the future
confidential or proprietary information. Hibernia and American Bank agree, on
behalf of themselves, their respective officers, directors, employees,
representatives and agents, that they will not use any information obtained
pursuant to due diligence investigations for any purpose unrelated to the
consummation of the transactions contemplated by this Agreement, and, if the
Merger is not consummated, will hold all such information and documents in
confidence unless and until such time as such information or documents otherwise
become publicly available or as it is advised by counsel that any such
information or document is required by law to be disclosed, in which event the
party required to make such disclosure shall advise and consult with the other
party reasonably in advance of such disclosure regarding the information
proposed to be disclosed. In the event of the termination of this Agreement,
Hibernia and American Bank shall, promptly upon request by the other party,
either destroy or return any documents so obtained.
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11.2. Hold Harmless. Hibernia will indemnify and hold harmless American
Bank, each of its directors and officers and each person, if any who controls
American Bank within the meaning of the 1933 Act and their respective heirs and
estates against any losses, claims, damages or liabilities, joint, several or
solidary, to which they or any of them may become subject, under the 1933 Act or
otherwise, insofar as such losses, claims, damages or liabilities (or actions in
respect thereof) arise out of or are based upon an untrue statement or alleged
untrue statement of a material fact contained in the Registration Statement, or
in any amendment or supplement thereto, or arising out of or based upon the
omission or alleged omission to state therein a material fact required to be
stated therein or necessary to make the statements therein not misleading, and
will reimburse each such person for any legal or other expenses reasonably
incurred by such person in connection with investigating or defending any such
action or claim; provided, however, that Hibernia shall not be liable in any
such case to the extent that any such loss, claim, damage or liability (or
action in respect thereof) arises out of or is based upon any untrue statement
or alleged untrue statement or omission or alleged omission made in the
Registration Statement or any such amendment or supplement in reliance upon and
in conformity with information furnished to Hibernia by American Bank for use
therein. Promptly after receipt by an indemnified party hereunder of notice of
the commencement of any action, such indemnified party shall, if a claim in
respect thereof is to be made against Hibernia under this Section, notify
Hibernia in writing of the commencement thereof. In case any such action shall
be brought against any indemnified party and it shall notify Hibernia of the
commencement thereof, Hibernia shall be entitled to participate therein, and to
the extent that it shall wish, to assume the defense thereof, with counsel
satisfactory to such indemnified party, and, after notice from Hibernia to such
indemnified party of its election to so assume the defense thereof, Hibernia
shall not be liable to such indemnified party under this Section 11.2 for any
legal expenses of other counsel, except in the event of a conflict of interest
and with Hibernia's consent, which consent will not be unreasonably withheld, or
any other expenses subsequently incurred by such indemnified party.
12. Conditions. The consummation of the Merger is conditioned upon:
12.1. Shareholder Approval; Dissenters. Approval of this Agreement by the
required vote of shareholders of American Bank and exercise and perfection of
dissenters' rights pursuant to the Bank Merger Act by holders of American Bank
Common Stock holding in the aggregate no more than 10% of the American Bank
Common Stock outstanding on the Closing Date.
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12.2. OCC Approval. Procurement by Hibernia of the approval of the
Comptroller of the Merger and any and all other transactions contemplated
hereby.
12.3. Other Approvals. Procurement of all other consents and approvals
and satisfaction of all other requirements prescribed by law that are necessary
to the consummation of the transactions contemplated by this Agreement.
12.4. No Restraining Action. No litigation or proceeding initiated by
any governmental authority shall be pending before any court or agency that
shall present a claim to restrain, prohibit or invalidate the transactions
contemplated hereby and neither Hibernia nor American Bank shall be prohibited
by any order of any court or other governmental authority from consummating the
transactions provided for in this Agreement.
12.5. Opinion of Hibernia Counsel. American Bank and its directors shall
have received an opinion, dated the Closing Date, of counsel for Hibernia, in
substantially the form of Exhibit 12.5 hereto.
12.6. Opinion of American Bank Counsel. Hibernia, its directors and its
officers who sign the Registration Statement shall have received an opinion,
dated the Closing Date, of McGlinchey Stafford Lang, A Law Corporation, for
American Bank, in substantially the form of Exhibit 12.6 hereto.
12.7. Representations, Warranties and Agreements of American Bank. Each
of the representations, warranties, and agreements of American Bank contained
herein in all material respects shall be true on, or complied with by, the
Closing Date as if made on such date (or on the date when made in the case of
any representation or warranty which specifically relates to an earlier date)
and Hibernia shall have received a certificate signed by the Chairman of the
Board and the President of American Bank, dated the Closing Date, to such
effect; American Bank shall have furnished to Hibernia such other certificates
as Hibernia shall reasonably request in connection with the Closing (as defined
in Section 14 hereof), evidencing compliance with the terms hereof and its
status, business and financial condition. American Bank shall have furnished
Hibernia with such further documents or other materials as Hibernia shall have
reasonably requested in connection with the transactions contemplated hereby.
12.8. Representations, Warranties and Agreements of Hibernia. Each of the
representations, warranties and agreements of Hibernia contained herein in all
material respects shall be true on, or complied with by, the Closing Date as if
made on such date (or the date when made in the case of any representations or
warranty which specifically relates to an earlier date) and American Bank shall
have received a certificate signed by the Chief
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Executive Officer of Hibernia, dated the Closing Date, to such effect; Hibernia
shall have furnished to American Bank such other certificates as American Bank
shall reasonably request in connection with the Closing, evidencing compliance
with the terms hereof and its status, business and financial condition.
Hibernia shall have furnished American Bank with such further documents or other
materials as American Bank shall have reasonably requested in connection with
the transactions contemplated hereby.
12.9. Effective Registration Statement. The Registration Statement shall
have become effective and no stop order suspending the effectiveness of the
Registration Statement shall have been issued and no proceedings for that
purpose shall have been initiated or threatened by the SEC and American Bank
shall have received a certificate to such effect from the officer of Hibernia
designated as its agent for service on the cover page of the Registration
Statement (which certificate may be to the knowledge of such officer).
12.10. Blue Sky. Hibernia shall have received all state securities laws
and "blue sky" permits and other authorizations, or qualified for or perfected
exemptions therefrom, necessary to consummate the transactions contemplated
hereby.
12.11. Tax Opinion. Hibernia shall have engaged, and Hibernia and
American Bank shall have received an opinion of, a nationally recognized public
accounting firm, which opinion shall be satisfactory in form and substance to
Hibernia and American Bank, to the effect that the Merger when consummated in
accordance with the terms hereof will constitute a reorganization within the
meaning of Section 368(a) of the Internal Revenue Code, and that the exchange of
American Bank Common Stock to the extent exchanged for Hibernia Common Stock
will not give rise to gain or loss to the shareholders of American Bank with
respect to such exchange and that the Louisiana income tax treatment to the
shareholders of American Bank will be substantially the same as the federal
income tax treatment to the shareholders of American Bank.
12.12. Listing on New York Stock Exchange. The shares of Hibernia Common
Stock issuable to the holders of American Bank Common Stock in the Merger shall
have been approved for listing on the New York Stock Exchange, Inc. on or before
the Closing Date, subject to official notice of issuance.
12.13. Fairness Opinion. American Bank shall have received a letter from
Montgomery Securities dated prior to the scheduled date of mailing of the Proxy
Statement to its shareholders, which has not been withdrawn prior to the Closing
Date, to the effect that the terms of the Merger are fair to its shareholders
from a financial point of view.
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12.14. Assertion of Conditions. A failure to satisfy any of the
requirements set forth in Section 12.5, 12.8, 12.12 or 12.13 shall only
constitute conditions to consummation of the Merger if asserted by American Bank
and a failure to satisfy any of the requirements set forth in Section 12.6, 12.7
or 12.10 shall only constitute conditions to consummation of the Merger if
asserted by Hibernia.
13. Termination. This Agreement may be terminated prior to the Closing
Date, either before or after its approval by the shareholders of the parties
hereto, in any of the following events:
13.1. Mutual Consent. By the mutual consent of the parties hereto, if the
Board of Directors of each party so determines.
13.2. Breach of Representation, Warranty or Covenant. By either party
hereto, in the event of a breach by the other party (a) of any covenant or
agreement contained herein or (b) of any representation or warranty herein, if
(i) the facts constituting such breach reflect a material adverse change in the
financial condition, results of operations or business taken as a whole, of the
breaching party, which in either case cannot be or is not cured within 60 days
after written notice of such breach is given to the party committing such
breach, or (ii) in the event of a breach of a warranty or covenant, such breach
results in a material increase in the cost of the non-breaching party's
performance of this Agreement.
13.3. Passage of Time; Inability to Satisfy Conditions. By either party
hereto, in the event that (i) the Merger is not consummated by April 30, 1995,
or (ii) any condition to Closing cannot be satisfied by April 30, 1995 and will
not be waived by the party or parties entitled to waive it.
13.4. Failure to Obtain Regulatory Approval. By either party hereto, at
any time after the Comptroller has denied any application for any approval or
clearance required to be obtained as a condition to the consummation of the
Merger and the time period for all appeals or requests for reconsideration
thereof has run.
13.5. Failure to Obtain Shareholder Approval. By either party hereto, if
the Merger is not approved by the required vote of shareholders of American
Bank.
13.6. Dissenters. By Hibernia, if holders of more than 10 percent of the
outstanding American Bank Common Stock exercise statutory rights of dissent and
appraisal pursuant to the Bank Merger Act.
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13.7. Material Adverse Change. By American Bank, if a material adverse
change as described in Section 8.7 of this Agreement occurs, and by Hibernia, if
a material adverse change as described in Section 7.7 hereof occurs, after the
date hereof and prior to the Closing.
13.8. Use of Pooling-of-Interests Accounting Treatment. By Hibernia, in
the event it shall determine that the facts and circumstances surrounding the
Merger prohibit or materially jeopardize the treatment of the Merger as a
pooling-of-interests for accounting purposes.
13.9. Fairness Opinion. By American Bank, if it shall not have received a
letter from Montgomery Securities dated within five days of the scheduled date
of mailing of its proxy statement to its shareholders to the effect that the
terms of the Merger are fair to its shareholders from a financial point of view.
13.10. Price of Hibernia Common Stock. By American Bank, if both (a) the
quotient of the Average Market Price of Hibernia Common Stock on the business
day immediately preceding the Closing Date divided by the average of the mean of
the high and low prices of one share of Hibernia Common Stock for the ten
business days preceding the date of this Agreement, as reported in The Wall
Street Journal, (the "Hibernia Quotient") is less than 0.8 and (b) the quotient
of the average closing value of the Standard & Poors Regional Bank Index for the
ten business days preceding the business day immediately preceding the Closing
Date divided by the average closing value of the Standard & Poors Regional Bank
Index for the ten business days preceding the date of this Agreement (the "S&P
Quotient") exceeds the Hibernia Quotient by more than 0.1.
14. Closing and Effective Date. The closing of the Merger (the "Closing")
shall take place at the office of Hibernia at 313 Carondelet Street, New
Orleans, Louisiana, at 11:00 a.m. local time, or at such other place or time as
shall be mutually agreeable to the parties hereto, on the first business day
occurring after the last to occur of: (i) the date that falls 30 days after the
date of the order of the Comptroller approving the Merger of American Bank with
and into HNB pursuant to the Bank Merger Act, or such later date within 60 days
of such date as may be agreed upon between the parties hereto; (ii) the date
that falls 5 days after the date on which the last meeting of shareholders
called to approve this Agreement is held; or (iii) such other date chosen by the
parties (the date and time of the Closing being referred to herein as the
"Closing Date"). Immediately upon consummation of the Closing, or on such other
later date as the parties hereto may agree, the Merger Agreement shall be
certified, executed, acknowledged and delivered to the Office of the Comptroller
for filing pursuant to and in accordance with the provisions of the Bank Merger
Act and to the Louisiana Office of Financial Institutions. The Merger shall
become effective as of
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the date and time set forth in the Merger Agreement (such date and time being
referred to herein as the "Effective Date").
15. Survival and Termination of Representations, Warranties and Covenants.
15.1. Except as otherwise provided in this Section 15, the
representations, warranties and covenants contained in this Agreement shall
terminate as of the earlier of the Effective Date or the termination of this
Agreement. Upon termination of such representations, warranties and covenants,
such provisions shall be of no further force or effect, and no party hereto
shall have any legal right to redress, whether for breach of contract or
otherwise, as a result of a breach of any such provision.
15.2. The provisions and agreements set forth in Sections 3, 5, 9.11,
9.12, 9.14, 11 and 15 and the last sentence of Section 8.3 hereof shall survive
the Closing, if the Closing occurs, for the benefit of the shareholders,
directors and officers of American Bank who are the intended beneficiaries of
such provisions.
15.3. The provisions of Section 11 and liabilities for a breach of the
provisions of Sections 9.2 or 9.12 shall survive the termination of this
Agreement if this Agreement terminates without the Closing or the Merger having
occurred, in which event liability for a breach of Section 9.2 or Section 9.12
shall survive the termination of the Agreement for a period of 180 days
following the date on which the Agreement terminates. Nevertheless, no party to
this Agreement shall have a legal right to redress or cause of action for a
breach of Section 9.2 except in those circumstances in which such breach
directly resulted in the termination of the Agreement.
15.4. In consideration of the mutual benefits and agreements contained in
this Agreement, each of the parties hereto, on behalf of itself and its
successors and assigns, hereby irrevocably waives any right or cause of action
which otherwise would survive in the absence of this Section 15.
16. Amendment; Waivers. To the extent permitted under applicable law,
prior to the Closing Date any provision of this Agreement may be amended or
modified at any time, either before or after its approval by the shareholders of
the parties hereto, (i) by an agreement in writing among the parties hereto
approved by their respective Boards of Directors and executed in the same manner
as this Agreement, and (ii) as provided in the Bank Merger Act. Except with
respect to any required shareholder or regulatory approval, each party hereto,
by written instrument signed by a duly authorized officer of such party, may at
any time (whether before or after approval of this Agreement by the shareholders
of Hibernia or American Bank) extend the time for the performance of any of the
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obligations or other acts of the other party hereto and may waive (i) any
inaccuracies of the other party in the representations or warranties contained
in this agreement or any document delivered pursuant hereto, (ii) compliance
with any of the covenants, undertakings, or agreements of the other party, or
satisfaction of any of the conditions precedent to its obligations, contained
herein or (iii) the performance by the other party of any of its obligations set
out herein or therein; provided that no such waiver executed after approval of
this Agreement by the shareholders of Hibernia or American Bank shall change the
number of shares of Hibernia Common Stock into which shares of American Bank
Common Stock will be converted by the Merger.
17. Execution in Counterparts. This Agreement may be executed in
counterparts, each of which shall be deemed to constitute an original. Each
such counterpart shall become effective when one counterpart has been signed by
each party hereto.
18. Governing Law. This Agreement shall be governed by, and interpreted in
accordance with, the laws of the State of Louisiana applicable to agreements
made and entirely to be performed within such State, except as federal law may
be applicable.
19. Expenses. Except as otherwise provided in this Agreement, each party
hereto will bear all expenses incurred by it in connection with this Agreement
and the transactions contemplated hereby, including the fees, expenses and
disbursements of its counsel and auditors, provided that printing expenses shall
be borne by Hibernia.
20. No Assignment. Prior to the Effective Date, neither party hereto may
assign any of its rights or obligations under this Agreement to any other person
without the prior written consent of the other party hereto, including any
transfer or assignment by operation of law.
21. Notices. All notices or other communications which are required or
permitted hereunder shall be in writing and sufficient if delivered personally
or sent by registered or certified mail, postage prepaid, to the Chief Executive
Officer of each party hereto at the address of such party set forth in the
preamble to this Agreement and shall be deemed to have been given as of the date
so personally delivered or mailed. A copy of all notices or other
communications directed to Hibernia or HNB shall be sent to:
Hibernia National Bank
313 Carondelet Street
New Orleans, Louisiana 70130
Attention: Patricia C. Meringer, Corporate Law
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and a copy of all notices or other communications directed to American Bank
shall be sent to:
McGlinchey Stafford Lang
A Law Corporation
2777 Stemmons Freeway
Suite 925
Dallas, Texas 75207
Attention: Alan Jacobs, Esq.
22. Headings. The headings in this Agreement are inserted for convenience
of reference only and are not intended to be a part of or to affect the meaning
or interpretation of this Agreement.
23. Entire Agreement. This Agreement and the Schedules and Exhibits
hereto supersede any and all oral or written agreements and understandings
heretofore made relating to the subject matter hereof and contain the entire
agreement of the parties relating to the subject matter hereof. The terms and
conditions of this Agreement shall inure to the benefit of and be binding upon
the parties hereto, and their respective successors. Nothing in this Agreement
or in the Merger Agreement is intended to or shall be construed to confer upon
or to give any person other than the parties hereto any rights, remedies,
obligation or liabilities under or by reason of this Agreement except as
expressly provided herein.
A-33
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IN WITNESS WHEREOF, the parties hereto have caused this instrument to be
executed in counterparts by their duly authorized officers and their corporate
seals to be hereunto affixed, all as of the day and year first above written.
Hibernia Corporation
----------------------------------------
Stephen A. Hansel
President and Chief Executive
Officer
Attest:
- ------------------------------
Patricia C. Meringer
Secretary
Hibernia National Bank
_______________________________________
Stephen A. Hansel
President and Chief Executive
Officer
Attest:
- ------------------------------
Patricia C. Meringer
Secretary
American Bank
By: _____________________________
Darryl J. Chauvin
President and Chief Executive
Officer
Attest:
- ------------------------------
Sharon B. Kell
Assistant Secretary
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APPENDIX B
FORM OF OPINION OF MONTGOMERY SECURITIES
September 19, 1994
Members of the Board of Directors
American Bank
22 Apple Street
Norco, LA 70079
Gentlemen:
We understand that American Bank, a Louisiana banking association (the
"Company"), Hibernia Corporation, a Louisiana corporation ("Acquiror") and
Hibernia National Bank, a wholly-owned subsidiary of Acquiror ("Acquisition
Sub"), have entered into a Merged Agreement dated September 19, 1994 (the
"Merger Agreement"), pursuant to which the Company will be merged with and into
Acquisition Sub, which will be the surviving entity (the "Merger"). Pursuant to
the Merger, as more fully described in the Merger Agreement, we understand that
each outstanding share of the common stock, $1.00 par value per share, of the
Company (the "Common Stock") will be converted into and exchangeable for that
number of shares of the common stock, no par value per share, of Acquiror
obtained by dividing 2,250,000 by the total number of issued and outstanding
shares of Common Stock (subject to certain adjustments (the "Consideration").
You have asked for our opinion as to whether the Consideration to be
received by the shareholders of the Company pursuant to the Merger is fair to
the shareholders of the Company from a financial point of view, as of the date
hereof.
In connection with our opinion, we have, among other things: (i) reviewed
certain publicly available financial and other data with respect to the Company
and Acquiror, including the consolidated financial statements for recent years
and interim periods to date and certain other relevant financial and operating
data relating to the Company and Acquiror made available to us from published
sources and from the internal records of the Company; (ii) reviewed the Merger
Agreement; (iii) reviewed certain historical market prices and trading volumes
of Acquiror common stock as reported by the New York Stock Exchange; (iv)
compared the Company and Acquiror from a financial point of view with certain
other companies in the banking industry which we deemed to be relevant; (v)
considered the financial terms, to the extent publicly available, of selected
recent acquisitions of companies in the banking industry which we deemed to be
comparable, in whole or in part, to the Merger; (vi) reviewed and discussed with
representatives of the management of the Company and Acquiror certain
information of a business and financial nature regarding the Company and
Acquiror, furnished to us by them, including financial forecasts and related
assumptions of the Company; (vii)
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made inquiries regarding and discussed the Merger and the Merger Agreement and
other matters related thereto with the Company's counsel; and (viii) performed
such other analyses and examinations as we have deemed appropriate.
In connection with our review, we have assumed and relied upon the accuracy
and completeness of the foregoing information with respect to the Company and
Acquiror and we have not assumed responsibility for independent verification of
such information. with respect to the financial forecasts for the Company
provided to us by its management, we have assumed for purposes of our opinion
that the forecasts have been reasonably prepared on bases reflecting the best
available estimates and judgments of the Company's management at the time of
preparation as to the future financial performance of the Company and that they
provide a reasonable basis upon which we can form our opinion. We have also
assumed that there have been no material changes in the Company's or Acquiror's
assets, financial condition, results of operation, business or prospects since
the respective dates of their last financial statements made available to us.
We have relied on advice of counsel to the Company as to legal matters with
respect to the Company, the Merger and the Merger Agreement. We are not experts
in the evaluation of loan portfolios for purposes of assessing the adequacy of
the allowances for losses with respect thereto and have assumed that such
allowances for each of the Company and Acquiror are in the aggregate adequate to
cover such losses. In addition, we have not assumed responsibility for
reviewing any individual credit files or making an independent evaluation,
appraisal or physical inspection of the assets or individual properties of the
Company or Acquiror, nor have we been furnished with any such appraisals.
Further, our opinion is based on economic, monetary and market conditions as in
effect on, and the information made available to us as of, the date hereof.
We have further assumed that the Merger will be consummated in accordance
with the terms described in the Merger Agreement, without any further amendments
thereto, and without waiver by the Company of any of the conditions to its
obligations thereunder.
Based upon the foregoing, and in reliance thereon, it is our opinion the
Consideration to be received by the shareholders of the Company pursuant to the
Merger is fair to such shareholders from a financial point of view, as of the
date hereof.
This opinion is furnished pursuant to our engagement letter, dated April
15, 1994, and is solely for the benefit of the Board of Directors of the
Company. Except as provided in such engagement letter, this opinion may not be
used or referred to by the Company, or quoted or disclosed to any person in any
manner without our prior written consent. In furnished this opinion, we do not
admit that we are experts within the meaning of the term "experts" as used in
the Securities Act of 1933 and the rules and regulations
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promulgated thereunder. This opinion is not intended to be and shall not be
deemed to be a recommendation to any shareholder of the Company as to how such
shareholder should vote with respect to the Merger.
Very truly yours,
MONTGOMERY SECURITIES
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APPENDIX C
SELECTED PROVISIONS OF FEDERAL AND STATE LAW
RELATING TO THE RIGHTS OF
DISSENTING SHAREHOLDERS
FEDERAL LAW (12 U.S.C. SECTION 215A)
(b) Dissenting Shareholders
If a merger shall be voted for at the called meetings by the necessary
majorities of the shareholders of each association or State bank participating
in the plan of merger, and thereafter the merger shall be approved by the
Comptroller, any shareholder of any association or State bank to be merged into
the receiving association who has voted against such merger at the meeting of
the association or bank of which he is a stockholder, or has given notice in
writing at or prior to such meeting to the presiding officer that he dissents
from the plan of merger, shall be entitled to receive the value of the shares so
help by him when such merger shall be approved by the Comptroller....
(d) State Appraisal and Merger Law
. . .The appraisal of such shares of stock in any State bank shall be
determined in the manner prescribed by the law of the State in such cases,
rather than as provided in this section, if such provision is made in the State
law; and no such merger shall be in contravention of the law of the State under
which such bank is incorporated. The provisions of this subsection shall apply
only to shareholders of (and stock owned by them in) a bank or association being
merged into the receiving association.
STATE LAW (LA. REV. STAT. 6: 376)
A. If a state bank has, by vote of its stockholders, become a party to a
merger...,then, ...a stockholder who voted against such action shall have the
right to dissent.
C. (1) Except as provided in the last sentence of this Subsection, any
stockholder electing to exercise such right of dissent shall file with the bank,
prior to or at the meeting of stockholders at which such proposed action is
submitted to vote, a written objection to such proposed action and shall vote
his shares against such action.
(2) If such proposed action be taken by the required vote...,and the
merger...authorized thereby be effected, the bank shall promptly thereafter give
written notice thereof, by registered mail, to each stockholder who filed such
written objection to and voted his shares against such action at such
stockholder's last address on the bank's records.
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(3) Each such stockholder may, within twenty days after the mailing of
such notice to him but not thereafter, file with the bank a demand in writing
for the fair cash value of his shares as of the day before such vote was taken,
provided that he state in such demand the value demanded and a post office
address to which the reply of the bank may be sent and at the same time deposit
in escrow in a bank or trust company located in the parish of the domicile of
the bank the certificates representing his shares, duly endorsed and transferred
to the escrow bank upon the sole condition that said certificates shall be
delivered to the bank upon payment of the value of the shares determined in
accordance with the provisions of this Section. With his demand, the
stockholder shall deliver to the bank the written acknowledgment of such escrow
bank or trust company with which such certificates have been deposited that it
so holds his certificates of stock.
(4) Unless the objection, demand, and acknowledgment aforesaid be made and
delivered by the stockholder within the period described in this Subsection, he
shall conclusively be presumed to have acquiesced in the action proposed or
taken.
D. If the bank does not agree to the value so stated and demanded...it
shall, within twenty days after the receipt of such demand and acknowledgment,
notify in writing the stockholder at the designated post office address of its
disagreement and shall state in such notice the value it will agree to pay if
any payment should be held to be due; otherwise, it shall be liable for and
shall pay the dissatisfied stockholder the value demanded by him for his shares.
E. (1) In case of disagreement as to such fair cash value or as to
whether any payment is due after compliance by the parties with the provisions
of Subsections C and D of this Section, the dissatisfied stockholder within
sixty days after receipt of notice in writing of the bank's disagreement but not
thereafter may file suite against the bank or the merged or consolidated bank,
as the case may be, in the district court of the parish in which the bank or the
merged or consolidated bank, as the case may be, is domiciled prayed the court
to fix and decree the fair cash value of the dissatisfied stockholder's shares
as of the day before the action complained of was taken, and the court shall, on
such evidence as may be adduced in relation thereto, determine summarily whether
any payment is due and, if so, such cash value, and render judgment accordingly.
(2) Any stockholder entitled to file such a suit may, within such sixty-
day period but not thereafter, intervene as a plaintiff in such a suit filed by
another stockholder and recover therein judgment against the bank for the fair
cash value of his shares. No order or decree shall be made by the court staying
the proposed action, and any such action may be carried to completion
notwithstanding any such suit.
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(3) Failure of the stockholder to bring suit or to intervene in such a
suit within sixty days after receipt of notice of disagreement by the bank shall
conclusively bind the stockholder:
(a) By the bank's statement that no payment is due; or
(b) If the bank does not contend that no payment is due, to accept the
value of his shares as fixed by the bank in its notice of disagreement.
F. When the fair value of the shares has been agreed upon between the
stockholder and the bank, or when the bank has become liable for the value
demanded by the stockholder because of failure to give notice of disagreement
and of the value it will pay, or when the stockholder has become bound to accept
the value the bank agrees is due because of his failure to bring suit within
sixty days after receipt of notice of the bank's disagreement, the action of the
stockholder to recover such value must be brought within five years from the
date the value was agreed upon or the liability of the bank became fixed.
G. If the bank or the merged or consolidated bank, as the case may be,
shall, in its notice of disagreement, have offered to pay the dissatisfied
stockholder on demand an amount in cash deemed by it to be fair cash value of
his shares, and if, on the institution of a suit by the dissatisfied stockholder
claiming an amount in excess of the amount offered, the bank or the merged or
consolidated bank, as the case may be, shall deposit in the registry of the
court, there to remain until the final determination of the cause, the amount so
offered; then, if the amount finally awarded such stockholder, exclusive of
interest and costs, be more than the amount offered and deposited as aforesaid,
the costs of the proceeding shall be taxed against the bank or the merged or
consolidated bank, as the case may be, and judicial interest may be awarded
against such bank only on the amount of the award in excess of the amount
deposited in the registry of the court; otherwise, the costs of the proceeding
shall be taxed against such stockholder.
H. Upon filing a demand for the value of his shares, the stockholder shall
cease to have any of the rights of a stockholder except the rights accorded by
this Section. Such a demand may be withdrawn by the stockholder at any time
before the bank gives notice of disagreement as provided in Subsection D of this
Section. After such notice of disagreement is given, withdrawal of a notice of
election shall require the written consent of the bank. If a notice of election
is withdrawn, or the proposed corporate action is abandoned or rescinded, or a
court should determine that the stockholder is not entitled to receive payment
for his shares, or the stockholder should otherwise lose his dissenters' rights:
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(1) He shall not have the right to receive payment for his shares;
(2) His share certificates shall be returned to him and, on his request,
new certificates shall be issued to him in exchange for the old ones endorsed to
the bank; and
(3) He shall be reinstated to all his rights as a stockholder as of the
filing of his demand for value, including any intervening preemptive rights and
the right to payment of any intervening dividend or other distribution, or, if
any rights have expired or any such dividend or distribution other than in cash
has been completed, in lieu thereof, at the election of the bank he shall
receive the fair value thereof in cash as determined by the board as of the time
of such expiration or completion, but without prejudice otherwise to any
proceeding that may have been taken in the interim.
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APPENDIX D
FORM OF OPINION OF ERNST & YOUNG LLP
REGARDING CERTAIN TAX MATTERS
December 31, 1994
Hibernia Corporation
313 Carondelet
P.O. Box 61540
New Orleans, Louisiana 70161
American Bank
22 Apple Street
Norco, Louisiana 70079-2214
Dear Sir or Madam:
This letter is in response to your request that we provide you with our
opinion concerning certain federal income tax consequences which would arise
from consummation of the proposed merger of American Bank ("Bank") with and
into Hibernia National Bank ("HNB"), a wholly-owned subsidiary of Hibernia
Corporation ("Hibernia"). (Hereinafter, referred to as the "Merger.")
In rendering this opinion, we have relied upon the facts, summarized below, as
they have been presented to us orally by the management of Hibernia and
verified, in the Statements of Facts and Representations dated December 31,
1994 provided by the respective managements of Bank, Hibernia, and HNB; in the
Agreement and Plan of Merger made and entered into by and between Bank and
Hibernia as of September 19, 1994 (the "Plan of Merger"); and in the
Registration Statement (Form S-4), dated December , 1994, filed with the
Securities and Exchange Commission, as declared effective on December , 1994
and containing the Proxy Statement-Prospectus of Bank and Hibernia dated
January , 1995 ("Prospectus"). (These are sometimes hereinafter referred to
collectively as "Documents.")
You have represented to us that the facts contained in the Documents provide
an accurate and complete description of the facts and circumstances concerning
the proposed Merger. We have made no independent investigation of the factual
matters and circumstances and, therefore, have relied upon the facts and
representations in the Documents for purposes of this letter. Any changes to
the facts or Documents may affect the conclusions stated herein.
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We understand that reference to Ernst & Young LLP and the form of our opinion
is described in the Prospectus relating to the issuance of Hibernia Common
Stock in connection with the proposed Merger and the special meeting of the
Bank shareholders with respect thereto. We consent to such reference in the
Prospectus under the captions, "Summary", "Conditions to Consummation of the
Merger," and "Proposed Merger--Material Tax Consequences." We also understand
that the form of this letter is included as an appendix to the Form S-4
Registration Statement. We consent to such inclusion.
STATEMENT OF FACTS
Bank is a state banking association organized under the laws of the State of
Louisiana, engaged principally in the banking business. The presently
authorized capital stock of Bank is 1,000,000 shares of common stock, par
value $1.00 per share ("Bank Common Stock") and 500 shares of preferred stock,
par value $1,000 per share ("Bank Preferred Stock"). As of the date hereof,
483,686 shares of Bank Common Stock were issued and outstanding and held by
approximately _____ shareholders. No shares of Bank Preferred Stock were
issued and outstanding as of the date hereof. 314 shares of Bank Common Stock
were held in Bank's treasury as of the date hereof. There are no options,
warrants, subordinated rights or other rights to purchase Bank Common Stock.
Hibernia is a bank holding company organized and existing under the laws of
the State of Louisiana with shares registered under the Securities Act of
1933. The presently authorized capital stock of Hibernia is 300,000,000
shares, consisting of 100,000,000 shares of preferred stock, no par value, and
200,000,000 shares of Class A voting common stock, no par value (the Class A
voting common stock being referred to hereinafter as "Hibernia Common Stock").
As of September 30, 1994, no shares of Hibernia's preferred stock were
outstanding, 96,924,803 shares of Hibernia Common Stock were outstanding, and
192,700 shares of Hibernia Common Stock were held in Hibernia's treasury.
There are no existing options, warrants, calls or commitments of any kind
obligating Hibernia to issue any share of its capital stock or any other
security of which it is or will be the issuer, except that Hibernia has issued
warrants to purchase shares of Hibernia Common Stock pursuant to the terms of
the Senior Secured Restructuring Agreement dated as of May 27, 1992, of which
warrants to purchase 660,845 shares of Hibernia Common Stock were outstanding
as of September 30, 1994. Additionally, Hibernia has authorized or reserved
1,711,428 shares of Hibernia Common Stock for issuance under its 1987 Stock
Option Plan, pursuant to which options covering 1,555,212 shares of Hibernia
Common Stock were outstanding as of September 30, 1994; 3,852,787 (as
adjusted) shares of Hibernia Common Stock for issuance under its 1992 Long-
Term Incentive Plan, pursuant to which options
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covering 2,539,646 shares of Hibernia Common Stock were outstanding as of
September 30, 1994; 1,000,000 shares of Hibernia Common Stock for issuance
under its 1993 Director Stock Option Plan, pursuant to which options covering
155,000 shares of Hibernia Common Stock are outstanding as of September 30,
1994; and 523,783 shares of Hibernia Common Stock are available for issuance
pursuant to Hibernia's Dividend Reinvestment and Stock Purchase Plan. Pending
mergers with Pioneer Bancshares Corporation, First State Bank and Trust
Company of Bogalusa, STABA Bancshares, Inc. and Progressive Bancorporation,
Inc. will result in the additional issuance of approximately 16 million shares
of Hibernia Common Stock. Hibernia Common Stock is traded on the New York
Stock Exchange.
HNB is a nationally chartered commercial bank engaged principally in the
banking business. HNB is a wholly owned subsidiary of Hibernia.
BUSINESS PURPOSE
The management of Hibernia has represented to us that Hibernia desires to
consummate the Merger in order to improve its presence in the Louisiana
market. As discussed in the Prospectus under the caption, "Background of and
Reasons for the Merger," the Bank Board of Directors believes the customers,
depositors, and communities served by Bank will benefit from being part of a
larger banking entity as a result of the future growth, synergies and cost
savings expected to be realized from the Merger.
PROPOSED TRANSACTIONS
In accordance with the above-stated business purpose, the following
transactions have been proposed:
1. After all necessary regulatory and shareholder approvals have been
granted, there will be a merger (i.e., the Merger) of Bank with and into
HNB in accordance with the provisions of Bank Merger Act, 12 U.S.C.
Sections 1828 et. seq. and 12 U.S.C. Section 215a ("Bank Merger Act").
2. In the Merger, HNB will acquire all of the assets and assume all of the
liabilities of Bank in exchange for Hibernia Common Stock. As a result of
the Merger, each share of the issued and outstanding Bank Common Stock
shall be converted into and become the number of shares of Hibernia Common
Stock determined in accordance with the exchange rate. The exchange rate
shall be the number that is obtained by dividing 2,250,000 by the total
number
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of issued and outstanding shares of Bank Common Stock on the closing date.
In the event the Average Market Price (defined below) is less than $7.75
per share, the exchange rate shall be calculated as follows: ($17,437,500
divided by the Average Market Price of Hibernia Common Stock) divided by
the number of issued and outstanding shares of Bank Common Stock. In the
event that the Average Market Price of Hibernia Common Stock is greater
than $8.875 per share, the exchange rate shall be calculated as follows:
($19,968,750 divided by the Average Market Price of Hibernia Common Stock)
divided by the number of issued and outstanding shares of Bank Common
Stock.
In the event that, among other things, either (i) Hibernia executes, prior
to the effective date of the Merger, an agreement to merge with an
unaffiliated third party in a transaction in which Hibernia will not be
the surviving holding company; or (ii) if an unaffiliated third party has
acquired or commenced a public offer that has not been withdrawn or
otherwise terminated within ten days prior to the closing date, to acquire
control of Hibernia through share ownership or otherwise, then the
exchange rate shall be calculated as the number that is obtained by
dividing 2,250,000 by the total number of issued and outstanding shares of
Bank Common Stock.
If the aggregate professional fees, including fees of counsel and
accountants, including expense reimbursements to such professionals, but
excluding fees of Montgomery Securities, incurred by Bank in connection
with the Merger exceeds $175,000, then the number of shares of Hibernia
Common Stock to be issued in the Merger will be reduced by the number of
shares resulting from application of the following formula: (x -
$175,000) divided by the Average Market Price of Hibernia Common Stock,
where x = the actual aggregate professional fees and expenses incurred by
Bank. If the Average Market Price of Hibernia Common Stock is less than
$7.75 per share or greater than $8.875 per share, then the aggregate
dollar amount of consideration to be paid in the form of Hibernia Common
Stock will be reduced by the amount by which the actual aggregate
professional fees and expenses incurred by Bank in connection with the
Merger exceeds $175,000.
The Average Market Price is defined as the average of the high and low
sales prices of one share of Hibernia Common Stock for the five business
days preceding the last trading day immediately prior to the closing date
as reported in the Wall Street Journal. Holders of shares of Bank Common
Stock outstanding immediately prior to the effective date of the Merger
shall cease to be, and shall have no rights as, shareholders of Bank after
the Merger.
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3. As a result of the Merger, each share of the issued and outstanding Bank
Common Stock shall cease to be outstanding and will be canceled.
4. No fractional shares will be issued. Each holder of Bank Common Stock who
would otherwise have been entitled to receive a fraction of a share of
Hibernia Common Stock shall receive in lieu thereof, cash (without
interest) in an amount equal to such fractional part of a share multiplied
by the Average Market Price of Hibernia Common Stock.
5. By following certain statutory procedures, shareholders of Bank may
exercise dissenter's rights entitling them to receive in cash the value of
their respective Bank Common Stock in lieu of receiving Hibernia Common
Stock in the Merger.
REPRESENTATIONS
For purposes of our evaluation, we have received from the respective
managements of Bank, Hibernia, and HNB, Statements of Facts and
Representations, dated December 31, 1994, as set forth below. References to
the "Code" are to the Internal Revenue Code of 1986, as amended.
The following representations have been made in connection with the Merger:
(a) The fair market value of the Hibernia Common Stock to be received by
each Bank Common Stock shareholder will be approximately equal to the
fair market value of the Bank Common stock surrendered in the
exchange.
(b) There is no plan or intention by the shareholders of Bank who own five
percent or more of the Bank Common Stock and to the best knowledge of
management of Bank, there is no intention on the part of the remaining
shareholders of Bank, to sell, exchange, or otherwise dispose of a
number of shares of Hibernia Common Stock received in the transaction
that would reduce the Bank shareholders' ownership of Hibernia Common
Stock to a number of shares having a value, as of the date of the
transaction, of less than 50 percent of the value of all the formerly
outstanding Common Stock of Bank as of the same date. For purposes of
this representation, any shares of Bank Common Stock surrendered by
dissenters, or exchanged for cash in lieu of fractional shares of
Hibernia Common Stock, will be treated as outstanding Bank Common
Stock on the date of the transaction.
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Moreover, shares of Bank Common Stock and shares of Hibernia Common
Stock held by former Bank shareholders and otherwise sold, redeemed,
or disposed of prior to September 19, 1994 or subsequent to the
transaction will be considered in making this representation.
(c) The payment of cash in lieu of fractional shares of Hibernia Common
Stock is solely for the purpose of avoiding the expense and
inconvenience to Hibernia of issuing fractional shares and does not
represent separately bargained for consideration. The total cash
consideration that will be paid in the transaction to the Bank
shareholders instead of issuing fractional shares of Hibernia will not
exceed one percent of the total consideration that will be issued in
the transaction to the Bank shareholders in exchange for their shares
of Bank Common Stock. The fractional share interests of each Bank
shareholder will be aggregated, and no Bank shareholder will receive
cash in an amount equal to or greater than the value of one full share
of Hibernia Common Stock.
(d) HNB will acquire at least 90 percent of the fair market value of the
net assets and at least 70 percent of the fair market value of the
gross assets held by Bank immediately prior to the Merger. For
purposes of this representation, amounts paid by Bank to dissenters,
Bank assets used to pay its reorganization expenses, and all
redemptions and distributions (except for regular, normal dividends)
made by Bank immediately preceding the transfer, will be included as
assets of Bank held immediately prior to the transaction.
(e) Prior to the transaction, Hibernia will be in control of HNB within
the meaning of Section 368(c) of the Code wherein "control" is defined
to mean the ownership of stock possessing at least 80 percent of the
total combined voting power of all classes of stock entitled to vote
and at least 80 percent of the total number of shares of all other
classes of the corporation.
(f) Following the transaction, HNB will not issue additional shares of its
Common Stock that would result in Hibernia losing control of HNB
within the meaning of Section 368(c) of the Code.
(g) Hibernia has no plan or intention to reacquire any of its Common Stock
issued in the Merger other than to acquire a nominal amount of shares
of Common Stock that may be acquired in ordinary business transactions
(including, but not limited to, open market purchases in brokers'
transactions).
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(h) Hibernia has no plan or intention to liquidate HNB; to merge HNB into
another corporation; to sell or otherwise dispose of the Common Stock
of HNB; or to cause HNB to sell or otherwise dispose of any of the
assets of Bank acquired in the transaction, except for dispositions
made in the ordinary course of business. As Hibernia makes other
acquisitions, it is likely that some or all of the acquired banks will
be merged with and into HNB. At this time, the discussion provided
under the caption "Parties to the Merger" in the Prospectus provides a
complete list of all pending acquisitions that are covered by
definitive agreements. However, no Common Stock of HNB will be issued
as consideration in any of the pending acquisitions.
(i) Following the transaction, Hibernia will continue, substantially
unchanged, the banking business of Bank, which will be merged with and
into HNB.
(j) The liabilities of Bank assumed by HNB and the liabilities to which
the transferred assets of Bank are subject were incurred by Bank in
the ordinary course of its business.
(k) Following the transaction, HNB will continue the historic business of
Bank or will use a significant portion of Bank's historic business
assets in its business.
(l) Except for expenses relating to the registration of the Hibernia
Common Stock and certain proxy printing and mailing expenses to be
paid solely by Hibernia, which are directly related to the Merger in
accordance with the guidelines established in Revenue Ruling 73-54,
1973-1 C.B. 187, Hibernia, Bank, and the shareholders of Bank will pay
their respective expenses, if any, incurred in connection with the
transaction.
(m) There is no intercorporate indebtedness existing between Bank and its
affiliates on the one hand and Hibernia and its affiliates on the
other hand which was issued, acquired, or will be settled at a
discount.
(n) No two parties to the transaction are investment companies as defined
in Section 368(a)(2)(F)(iii) and (iv) of the Code.
(o) Bank is not under the jurisdiction of a court in a Title 11 or similar
case within the meaning of Section 368(a)(3)(A) of the Code.
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(p) The basis and fair market value of the assets of Bank to be
transferred to HNB will equal or exceed the sum of the liabilities
assumed by HNB, plus the amount of liabilities, if any, to which the
transferred assets are subject.
(q) No HNB common stock will be issued or exchanged in the Merger.
(r) None of the compensation received by any shareholder-employees of Bank
will be separate consideration for, or allocable to, any of their
shares of Bank Common Stock; none of the shares of Hibernia Common
Stock received by any shareholder-employees will be separate
consideration for, or allocable to, any employment agreement; and the
compensation paid to any shareholder-employees will be for services
actually rendered and will be commensurate with amounts paid to third
parties bargaining at arm's-length for similar services.
(s) The shareholders of Bank (immediately before the proposed transaction)
receiving shares of Hibernia Common Stock will not own (immediately
after the proposed transaction) more than fifty percent of the fair
market value of Hibernia Common Stock.
(t) The merger of Bank into HNB will qualify as a statutory merger under
the Bank Merger Act.
(u) There is no larger integrated transaction to which the proposed
transaction constitutes only one step. Management of Hibernia knows of
no plan or intention by an unaffiliated third party to acquire or
commence a public offer for Hibernia Common Stock.
TECHNICAL ANALYSIS
Section 368(a)(1)(A) of the Code provides that a reorganization (a "Type A"
reorganization) includes a statutory merger or consolidation. Such a
reorganization can only be achieved by strict compliance with the applicable
corporation laws of the United States or a state or territory of the United
States. A statutory merger occurs wherein one party (the surviving
corporation) to the transaction absorbs the other party whose corporate
existence ceases. It has been represented by the management of Hibernia that
the merger of Bank with and into HNB, wherein Hibernia Common Stock is to be
exchanged for Bank Common Stock, is to occur as a statutory merger under
applicable law.
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Section 368(a)(2)(D) of the Code provides that the acquisition by one
corporation in exchange for stock of a corporation which is in control of the
acquiring corporation, of substantially all of the properties of another
corporation, shall not disqualify a transaction under Section 368(a)(1)(A) if
(i) no stock of the acquiring corporation is used in the transaction and (ii)
the transaction would have otherwise qualified as a Type A reorganization had
the merger been into the controlling corporation. It has been represented by
the management of Hibernia and HNB that the merger of Bank with and into HNB,
wherein Hibernia Common Stock is to be exchanged for Bank Common Stock, is to
occur as a statutory merger under applicable law.
Revenue Procedure 77-37, 1977-2 C.B. 568 ((S)3.01) provides that, for advance
ruling purposes, the "substantially all" requirement of Section 368(a)(2)(D)
is satisfied if there is a transfer of assets representing at least 90 percent
of the fair market value of the net assets and at least 70 percent of the fair
market value of the gross assets held by the transferor corporation
immediately prior to the transfer. Any payments to dissenters and any
redemptions and distributions (except for regular dividend distributions) made
by the corporation immediately preceding the transfer and which are a part of
the Agreement will be considered as assets held by the corporation immediately
prior to the transfer. Additionally, the payment of expenses if any, by Bank,
incurred in connection with the Merger is taken into consideration in applying
the "substantially all" test.
In the proposed Merger, it has been represented by the management's of Bank
and HNB that HNB will acquire assets representing at least 90 percent of the
fair market value of the net assets and 70 percent of the fair market value of
the gross assets of Bank and that, for this purpose, the fair market value of
the net and gross assets of Bank will be determined before payment by Bank of
any expenses incurred by it in connection with the Merger, before payment to
any dissenters to the Merger, and before any redemptions and distributions
(except for regular, normal dividends) made by Bank immediately preceding the
transfer. Based upon the foregoing representations, the "substantially all"
requirement will be met in the Merger.
Additional Requirements
Sections 1.368-1(b) and 1.368-2(g) of the Income Tax Regulations (the
"Regulations") provide that the following additional requirements must be met
for a transaction to qualify as a reorganization within the meaning of Section
368 of the Code:
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(i) "continuity of interest" must be present,
(ii) "continuity of business enterprise" must exist, and
(iii) the transaction must be undertaken for reasons pertaining to the
continuance of the business of a corporation which is a party to the
transaction.
Continuity of Interest
In general, the continuity of interest test requires the owners of the
reorganized entity to receive and retain a meaningful equity in the surviving
entity. See e.g., Pinellas Ice & Cold Storage Co. v. Comm'r, 287 U.S. 462
(1933); Cortland Specialty Company v. Comm'r, 60 F.2d 937 (2d Cir. 1932),
cert. denied, 288 U.S. 599 (1932); Helvering v. Minnesota Tea Co., 296 U.S.
378 (1935).
Revenue Procedure 77-37, 1977-2 C.B. 568 (Section 3.02) provides that, for
advance ruling purposes, the continuity of interest requirement is satisfied
if there is a continuing interest through stock ownership in the acquiring or
transferee corporation (or a corporation in "control" thereof within the
meaning of Section 368(c) of the Code) on the part of the former shareholders
of the acquired or transferor corporation which is equal in value as of the
effective date of the reorganization, to at least 50 percent of the value of
all of the formerly outstanding stock of the acquired or transferor
corporation as of that date. Sales, redemptions, and other dispositions of
stock occurring prior or subsequent to the exchange which are part of the plan
of reorganization will be considered in determining whether there is a 50
percent continuing interest through stock ownership as of the effective date
of the reorganization.
Based upon our understanding of the facts presented to us orally and as set
forth in the Statements of Facts and Representations dated December 31, 1994,
the 50 percent continuity of interest test of Revenue Procedure 77-37, supra,
will be met in the Merger. It has been represented by the management of Bank
that the shareholders of Bank have no plan or intention to sell, exchange or
otherwise dispose of a number of Hibernia Common Stock to be received in the
transaction that will reduce their Hibernia Common Stock holdings to less than
the requisite 50 percent continuity of interest. Accordingly, in the Merger
there will be a continuing interest through Common Stock ownership in Hibernia
on the part of the former shareholders of Bank.
Continuity of Business Enterprise
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Section 1.368-1(b) of the Regulations also provides that a continuity of
business enterprise (as described in Section 1.368-1(d) of the Regulations) is
a requisite to a reorganization. Section 1.368-1(d) of the Regulations
provides that continuity of business enterprise requires that the acquiring
corporation either continue the acquired corporation's historic business or
use a significant portion of the acquired corporation's historic assets in a
business. The proposed Merger will meet the continuity of business enterprise
test of Section 1.368-1(d) because, based upon the representation of the
management of HNB, HNB will continue the historic business of Bank or will use
a significant portion of Bank's historic assets in a business.
Business Purpose
Section 1.368-2(g) of the Regulations provides that a reorganization must be
undertaken for reasons germane to the continuance of the business of a
corporation which is a party to the reorganization. As heretofore indicated
in the Business Purpose Section set forth above, there are substantial
business reasons for the Merger. Accordingly, the Merger satisfies the
business purpose requirement as set forth in the Regulations.
Other Statutory Provisions
Section 368(b) of the Code defines the term "a party to a reorganization" to
include a corporation resulting from a reorganization, and both corporations,
in the case of a reorganization resulting from the acquisition by one
corporation of stock or properties of another.
Section 361(a) of the Code provides that no gain or loss shall be recognized
to a transferor corporation which is a party to a reorganization on any
exchange pursuant to the plan of reorganization solely for stock or securities
in another corporation which is a party to the reorganization.
Section 1032 of the Code provides that no gain or loss shall be recognized to
a corporation on the receipt of money or other property in exchange for stock
of such corporation. Revenue Ruling 57-278, 1957-1 C.B. 124, provides that a
subsidiary will not recognize gain upon the exchange of its parent's stock for
property in connection with a tax-free reorganization.
Section 354(a)(1) of the Code provides that no gain or loss shall be
recognized if stock or securities in a corporation which is a party to a
reorganization are, in pursuance of the
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plan of reorganization, exchanged solely for stock or securities in such
corporation or in another corporation which is a party to the reorganization.
Section 362(b) of the Code generally provides that if property is acquired by
a corporation in connection with the reorganization, then the basis shall be
the same as it would be in the hands of the transferor, increased by the
amount of gain recognized to the transferor on such transfer.
Section 1223(2) of the Code provides that in determining a taxpayer's holding
period for property, there shall be included the period for which such
property was held by another person, if such property has, for the purpose of
determining gain or loss from a sale or exchange, the same basis in whole or
in part in such taxpayer's hands as it would have had in the hands of such
other person.
Section 381 of the Code applies to certain transactions, including those
transactions to which Section 361 of the Code applies, where there is a
transfer in connection with a reorganization described in Section 368(a)(1)(A)
or in Section 368(a)(1)(A) and Section 368(a)(2)(D) of the Code.
FEDERAL INCOME TAX CONSEQUENCES
Based solely upon the Statements of Facts and Representations, the Agreement,
and the Plan of Merger, it is our opinion that the following federal income
tax consequences will result:
In the merger of Bank with and into HNB:
(1) Provided the proposed merger of Bank with and into HNB qualifies as
statutory merger under the Bank Merger Act, the acquisition by HNB of
substantially all of the assets of Bank solely in exchange for Hibernia
Common Stock, cash for dissenters, if any, and the assumption by HNB of
the liabilities of Bank, will qualify as a reorganization under the
provisions of Sections 368(a)(1)(A) and 368(a)(2)(D) of the Code. Bank,
Hibernia and HNB will each be a party to a reorganization within the
meaning of Section 368(b) of the Code.
(2) No gain or loss will be recognized by Bank upon the transfer of
substantially all of its assets to HNB in exchange for Hibernia Common
Stock, cash for dissenters, if any, and the assumption of Bank's
liabilities by HNB, since any cash for dissenters will be distributed to
the Bank shareholders (Sections 361 and 357(a) of the Code).
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(3) No gain or loss will be recognized by either Hibernia or HNB upon the
acquisition by HNB of substantially all of the assets of Bank in exchange
for Hibernia Common Stock, cash for dissenters, if any, and the
assumption of Bank's liabilities (Section 1032(a) of the Code). (Rev.
Rul. 57-278, 1957-1 C.B. 124.)
(4) The basis of the assets of Bank acquired by HNB will be the same in the
hands of HNB as the basis of such assets in the hands of Bank immediately
prior to the exchange (Section 362(b) of the Code).
(5) The basis of the HNB Common Stock in the hands of Hibernia will be
increased by an amount equal to the basis of the Bank assets in the hands
of HNB and decreased by the sum of the amount of the liabilities of Bank
assumed by HNB and the amount of liabilities to which the assets of Bank
are subject (Section 1.358-6 of Proposed Regulations).
(6) The holding period of the assets of Bank received by HNB will, in each
instance, include the period for which such assets were held by Bank
(Section 1223(2) of the Code).
(7) No gain or loss will be recognized by the shareholders of Bank upon the
receipt of solely Hibernia Common Stock in exchange for their shares of
Bank Common Stock (Section 354(a)(1) of the Code).
(8) The basis of Hibernia Common Stock to be received by the shareholders of
Bank will be, in each instance, the same as the basis of the Common Stock
of Bank surrendered in exchange therefor (Section 358(a)(1) of the Code).
(9) The holding period of the Hibernia Common Stock to be received by the
shareholders of Bank in the transaction will include in each instance,
the period during which the Bank Common Stock surrendered in exchange
therefor is held as a capital asset on the date of the surrender (Section
1223(l) of the Code).
(10) HNB will succeed to and take into account those tax attributes of Bank
described in Section 381(c) of the Code. (Section 381(a) of the Code and
Section 1.381(a)-1 of the Regulations) These items will be taken into
account by HNB subject to the conditions and limitations specified in
Sections 381, 382, 383, and 384 of the Code and the Regulations
thereunder.
(11) As provided by Section 381(c) of the Code and Section 1.381(c)(2)-1 of
the Regulations, HNB will succeed to and take into account the earnings
and profits, or deficit in
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earnings and profits, of Bank as of the date of transfer. Any deficit
in the earnings and profits of Bank or HNB will be used only to offset
the earnings and profits accumulated after the date of transfer.
(12) Cash received by a dissenting shareholder of Bank in exchange for his or
her Bank Common Stock will be treated as having been received by such
shareholder as a distribution in redemption of his or her stock, subject
to the provisions and limitations of Section 302 of the Code. If, as a
result of such distribution, a shareholder owns no stock either directly
or through the application of Section 318(a) of the Code, the redemption
will be a complete termination of interest within the meaning of Section
302(b)(3) of the Code and such cash will be treated as a distribution in
full payment in exchange for his or her stock, as provided by Section
302(a) of the Code.
(13) The payment of cash in lieu of fractional share interests of Hibernia
Common Stock will be treated as if the fractional shares were distributed
as part of the exchange and then were redeemed by Hibernia. These cash
payments will be treated as distributions in full payment in exchange for
the stock redeemed, as provided in Section 302(a) of the Code. (Rev.
Rul. 66-365, 1966-2 C.B. 116 and Rev. Proc. 77-41, 1977-2 C.B. 574)
(14) Bank will close its taxable year as of the date of the distribution or
transfer. HNB will not close its taxable year merely because of the
Merger. (Section 381(b) of the Code.)
STATE INCOME TAX CONSEQUENCES
(1) The Louisiana income tax treatment to the shareholders of Bank will be
substantially the same as the federal income tax treatment to the
shareholders of Bank.
SCOPE OF OPINION
The scope of this opinion is expressly limited to the federal income tax
issues specifically addressed in (1) through (14) in the section entitled
"Federal Income Tax Consequences" above and (1) in the section entitled "State
Income Tax Consequences" above. Specifically, our opinion has not been
requested and none is expressed with regard to the federal, foreign, state or
local income tax consequences for the shareholders of Hibernia and HNB. We
have made no determination nor expressed any opinion as to any limitations,
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including those which may be imposed under Section 382, on the availability of
net operating loss carryovers (or built-in gains or losses), if any, after the
Merger, the application (if any) of the alternative minimum tax to this
transaction, nor the application of any consolidated return or employee
benefit issues which may arise as a result of the Merger. We have made no
determination nor expressed any opinion as to the fair market value of any of
the assets being transferred in the Merger nor the common shares being
exchanged in the Merger. Furthermore, our opinion has not been requested and
none is expressed with respect to any foreign, state or local tax consequences
(other than those enumerated in (1) above of State Income Tax Consequences) to
Bank, Hibernia, and HNB.
Our opinion, as stated above, is based upon the analysis of the Code, the
Regulations thereunder, current case law, and published rulings. The
foregoing are subject to change, and such change may be retroactively
effective. If so, our views, as set forth above, may be affected and may not
be relied upon. Further, any variation or differences in the facts or
representations recited herein, for any reason, might affect our conclusions,
perhaps in an adverse manner, and make them inapplicable. In addition, we
have undertaken no obligation to update this opinion for changes in facts or
law occurring subsequent to the date hereof.
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This letter represents our views as to the interpretation of existing law and,
accordingly, no assurance can be given that the Service or the courts will
agree with the above analysis.
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PART II. INFORMATION NOT REQUIRED IN PROSPECTUS
ITEM 20. INDEMNIFICATION OF DIRECTORS AND OFFICERS.
The Louisiana Business Corporation Law ("LBCL") contains two provisions
that directly affect the liability of officers and directors of Louisiana
corporations to the corporations and shareholders whom they serve. Section 83
permits Louisiana corporations to indemnify officers and directors, as well as
certain other individuals who act on behalf of such corporations. Sections 91
and 92 set forth the liability of officers and directors of Louisiana
corporations.
Section 91 of the LBCL provides that officers and directors of Louisiana
corporations are fiduciaries with respect to the corporation and its
shareholders and requires that they discharge the duties of their positions as
such in good faith and with the diligence, care, judgment and skill which
ordinarily prudent men would exercise under similar circumstances in like
positions. Section 91 specifically provides that it is not intended to derogate
from any indemnification permitted under Section 83, discussed below.
Section 92 of the LBCL limits the liability of officers and directors with
respect to certain matters, as well as imposes personal liability for certain
actions, such as the knowing issuance of shares in violation of the LBCL.
Paragraph E of Section 92 permits a director, in the performance of his duties,
to be fully protected from liability in relying in good faith on the records of
the corporation and upon such information, opinions, reports or statements
presented to the corporation, the board of directors, or any committee of the
board by any of the corporation's officers or employees, or by any committee of
the board of directors, or by any counsel, appraiser, engineer or independent or
certified public accountant selected with reasonable care by the board of
directors or any committee thereof or any officer having the authority to make
such a selection or by any other person as to matters the directors reasonably
believe are within such other person's professional or expert competence and
which person is selected with reasonable care by the board of directors or any
committee thereof or any officer having the authority to make such selection.
Section 83 of the LBCL permits a Louisiana corporation to indemnify any
person who is or was a party or is threatened to be made a party to any action,
suit or proceeding by reason of the fact that he or she was a director, officer,
employee or agent of the corporation, or was serving at the request of the
corporation in one of those capacities for another business. Such persons may
be indemnified against expenses (including attorneys' fees), judgments, fines
and amounts paid in settlement actually and
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reasonably incurred by such persons in connection with any such action as long
as the indemnified party acted in good faith and in a manner he or she
reasonably believed to be in, or not opposed to, the best interests of the
corporation. With respect to criminal actions or proceedings, the indemnified
person must not only have acted in good faith and in a manner believed to be in
or not opposed to the best interest of the corporation; he or she must also not
have had any reasonable cause to believe that his or her conduct was unlawful.
The LBCL treats suits by or in the right of the corporation, or derivative
suits, differently from other legal actions. Indemnification is not permitted
in a derivative action for any expenses if the individual seeking
indemnification is adjudged liable for negligence or misconduct in the
performance of his or her duty to the corporation unless specifically ordered by
the court. Otherwise, officers and directors may be indemnified in derivative
actions only with respect to expenses (including attorneys' fees) actually and
reasonably incurred in connection with the defense or settlement of the action.
Indemnification of officers and directors may only be made by the
corporation if the corporation has specifically authorized indemnification after
determining that the applicable standard of conduct has been met. This
determination may be made (i) by the board of directors by a majority vote of a
quorum consisting of directors who were not parties to such action, suit or
proceeding, or (ii) if such a quorum is not obtainable or a quorum of
disinterested directors so directs, by independent legal counsel, or (iii) by
the shareholders.
Indemnification of officers and directors against reasonable expenses is
mandatory under Section 83 of the LBCL to the extent the officer or director is
successful on the merits or in the defense of any action or suit against him
giving rise to a claim of indemnification.
Louisiana corporations are permitted to advance the costs of defense to
officers and directors with respect to claims for which they may be indemnified
under Section 83 of the LBCL. In order to advance such costs, however, such
procedure must be approved by the board of directors by a majority of a quorum
consisting of disinterested directors. In addition, a corporation may only
advance defense costs if it has received an undertaking from the officer or
director to repay the amounts advanced unless it is ultimately determined that
he or she is entitled to be indemnified as otherwise authorized by Section 83.
Louisiana corporations are also specifically permitted to procure insurance
on behalf of officers and directors and former officers and directors for
actions taken in their capacities as such. Insurance coverage may be broader
than the limits of
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indemnification under Section 83. Also, the indemnification provided for in
Section 83 is not exclusive of any other rights to indemnification, whether
arising from contracts or otherwise.
The Company has adopted an indemnification provision to its articles of
incorporation that provides for indemnification of officers and directors under
the circumstances permitted by Louisiana law. The Company's indemnification
provision requires indemnification, except as prohibited by law, of officers and
directors of the Company or any of its wholly-owned subsidiaries against
expenses, judgments, fines and amounts paid in settlement actually and
reasonably incurred in connection with any action, suit or proceeding, whether
civil or criminal, administrative or investigative (including any action by or
in the right of the Company) by reason of the fact that the person served as an
officer or director of the Company or one of its subsidiaries. Officers and
directors may only be indemnified against expenses in cases brought by the
officer or director against the Company if the action is a claim for
indemnification, the officer or director prevails in the action, or
indemnification is included in any settlement or is awarded by the court. The
indemnification provision further requires the Company to advance defense costs
to officers and directors in such suits and proceedings upon receipt of an
undertaking to repay such expenses unless it is ultimately determined that the
officer or director is entitled to indemnification as authorized by the Article.
The Company's Articles of Incorporation further provide that no director or
officer of the Company shall be personally liable to the Company or its
shareholder for monetary damages for breach of fiduciary duty as an officer or
director. This provision is limited to those circumstances in which such a
limitation of liability is permitted under applicable law and would not be
operative in any circumstances in which the law prohibits such an limitation.
The Articles of Association of the Bank include indemnification and
limitation of liability provisions identical to those adopted by the Company and
described above.
ITEM 21. EXHIBITS AND FINANCIAL STATEMENT SCHEDULES.
EXHIBIT DESCRIPTION
2 Agreement and Plan of Merger (included as Appendix A to the Proxy
Statement-Prospectus)
3.1 Exhibit 4.1 to the Registration Statement on Form S-3 filed
with the Commission by the Registrant (Registration No. 33-23591) is
hereby incorporated by reference (Articles of
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Incorporation of the Registrant, as amended to date)
3.2 Exhibit 4.2 to the Registration Statement on Form S-8 filed
with the Commission by the Registrant (Post-Effective Amendment No. 2
to Registration No. 2-96194) is hereby incorporated by reference (By-
Laws of the Registrant, as amended to date)
*5 Opinion of Patricia C. Meringer, Esq. re: legality of shares
8 Opinion of Ernst & Young, certified public accountants, regarding
certain tax matters (included as Appendix D to the Proxy Statement-
Prospectus)
10.13 Exhibit 10.13 to the Annual Report on Form 10-K for the fiscal
year ended December 31, 1988, filed with the Commission by the
Registrant (Commission File No. 0-7220) is hereby incorporated by
reference (Deferred Compensation Plan for Outside Directors of
Hibernia Corporation and its Subsidiaries, as amended to date)
10.14 Exhibit 10.14 to the Annual Report on Form 10-K for the fiscal
year ended December 31, 1990, filed with the Commission by the
Registrant (Commission File No. 0-7220) is hereby incorporated by
reference (Hibernia Corporation Executive Life Insurance Plan)
10.16 Exhibit 4.7 to the Registration Statement on Form S-8 filed with
the Commission by the Registrant (Registration No. 33-26871) is hereby
incorporated by reference (Hibernia Corporation 1987 Stock Option
Plan, as amended to date)
10.28 Exhibits M and N to the Company's definitive proxy statement
dated August 17, 1992 relating to its 1992 Annual Meeting of
Shareholders filed with the Commission by the Registrant is hereby
incorporated by reference (Warrant Agreement dated as of May 27, 1992
among the Registrant, The Chase Manhattan Bank (National Association)
and certain other lenders, including the Form of Warrant attached
thereto)
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10.29 Exhibit L to the Registrant's definitive proxy statement dated
August 17, 1992 relating to its 1992 Annual Meeting of Shareholders
filed with the Commission by the Registrant is hereby incorporated by
reference (Registration Rights Agreement dated as of May 27, 1992
among the Registrant, The Chase Manhattan Bank (National Association)
and certain other lenders, as amended to date)
10.30 Exhibit 10.30 to a Current Report on Form 8-K dated July 17, 1992
filed by the Registrant with the Commission is hereby incorporated by
reference (Stock Purchase Agreement dated as of July 17, 1992 between
the Registrant, Hibernia National Bank in Texas and Comerica
Incorporated)
10.31 Exhibit 10.31 to a Current Report on Form 8-K dated September 15,
1992 filed by the Registrant with the Commission is hereby
incorporated by reference (Amendment to Stock Purchase Agreement dated
September 10, 1992 between Registrant and Comerica Incorporated)
10.34 Exhibit C to the Registrant's definitive proxy statement dated
August 17, 1992 relating to its 1992 Annual Meeting of Shareholders
filed by the Registrant with the Commission is hereby incorporated by
reference (Long-Term Incentive Plan of Hibernia Corporation)
10.35 Exhibit A to the Registrant's definitive proxy statement dated
March 23, 1993 relating to its 1993 Annual Meeting of Shareholders
filed by the Registrant with the Commission is hereby incorporated by
reference (1993 Director Stock Option Plan of Hibernia Corporation)
10.36 Exhibit 10.36 to the Registrant's Annual Report on Form 10-K for
the fiscal year ended December 31, 1993 filed with the Commission
(Commission file no. 0-7220) is hereby incorporated by reference
(Employment agreement between Stephen A. Hansel and Hibernia
Corporation)
13 Exhibit 13 to the Registrant's Annual Report on Form 10-K for the
fiscal year ended December 31, 1993 filed with the Commission
(Commission file No. 0-7220) is hereby
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incorporated by reference (1993 Annual Report to security holders of
the Registrant).
22 Exhibit 22 to the Annual Report on Form 10-K of the Registrant for
the fiscal year ended December 31, 1989 filed with the Commission
(Commission file no. 0-7220) is hereby incorporated by reference
(Subsidiaries of the Registrant)
23(a) Consent of Patricia C. Meringer, Esq. (included with Exhibit 5)*
23(c) Consent of Ernst & Young LLP
Consent of Arthur Anderson LLP
Consent of Arthur Andersen LLP
Consent of KPMG Peat Marwick
Consent of Castaing, Hussey & Lolan
Consent of Montgomery Securities, Inc.
24 Powers of Attorney
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*To be filed by Amendment
ITEM 22. UNDERTAKINGS.
The undersigned registrant hereby undertakes:
(i) that, for purposes of determining any liability under the Securities
Act of 1933, each filing of the registrant's annual report pursuant to section
13(a) or section 15(d) of the Securities Exchange Act of 1934 (and, where
applicable, each filing of an employee benefit plan's annual report pursuant to
section 15(d) of the Securities Exchange Act of 1934) that is incorporated by
reference in the registration statement shall be deemed to be a new registration
statement relating to the securities offered therein, and the offering of such
securities at that time shall be deemed to be the initial bona fide offering
thereof;
(ii) to deliver or cause to be delivered with the prospectus, to each
person to whom the prospectus is sent or given, the latest annual report to
security holders that is incorporated by reference in the prospectus and
furnished pursuant to and meeting the requirements of Rule 14a-3 or Rule 14c-3
under the Securities Exchange Act of 1934; and, where interim financial
information required to be presented by Article 3 of Regulation S-X are not set
forth in the prospectus, to deliver, or cause to be delivered to each person to
whom the prospectus is sent or given, the latest
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quarterly report that is specifically incorporated by reference in the
prospectus to provide such interim financial information;
(iii) that prior to any public reoffering of the securities registered
hereunder through use of a prospectus which is a part of this registration
statement, by any person or party who is deemed to be an underwriter within the
meaning of Rule 145(c), the issuer undertakes that such reoffering prospectus
will contain the information called for by the applicable registration form with
respect to reofferings by persons who may be deemed underwriters, in addition to
information called for by the other Items of the applicable form;
(iv) that every prospectus (a) that is filed pursuant to the preceding
paragraph, or (b) that purports to meet the requirements of section 10(a)(3) of
the Act and is used in connection with an offering of securities subject to Rule
415, will be filed as a part of an amendment to the registration statement and
will not be used until such amendment is effective and that, for purposes of
determining any liability under the Securities Act of 1933, each such post-
effective amendment shall be deemed to be a new registration statement relating
to the securities offered therein, and the offering of such securities at that
time shall be deemed to be the initial bona fide offering thereof.
(v) The undersigned registrant hereby undertakes to respond to requests
for information that is incorporated by reference into the prospectus pursuant
to Items 4, 10(b), 11 or 13 of Form S-4 within one business day of receipt of
such request and to send the incorporated documents by first class mail or other
equally prompt means. This includes information contained in documents filed
subsequent to the effective date of the registration statement through the date
of responding to the request.
(vi) The undersigned registrant hereby undertakes to supply by means of a
post-effective amendment all information concerning a transaction, and the
company being acquired involved therein, that was not the subject of and
included in the registration statement when it became effective.
II-7
<PAGE>
SIGNATURES
Pursuant to the requirements of the Securities Act of 1933, the Registrant
hereby certifies that it has reasonable grounds to believe that it meets all of
the requirements for filing on Form S-4 and has duly caused this Registration
Statement to be signed on its behalf by the undersigned, thereunto duly
authorized, in the City of New Orleans, State of Louisiana, on December 22,
1994.
HIBERNIA CORPORATION
By: Ron E. Samford, Jr.
_____________________________
Ron E. Samford, Jr.
Controller and Executive
Vice President
Pursuant to the requirements of the Securities Act of 1933, the
Registration Statement has been signed by the following persons in the
capacities indicated on December 22, 1994.
Signatures Title
- ---------- -----
*
_____________________________ Chairman of the Board
Robert H. Boh
*
_____________________________ Chief Executive Officer
Stephen A. Hansel and Director
*
_____________________________ Chief Financial Officer
Robert W. Close
*
_____________________________ Chief Accounting Officer
Ron E. Samford, Jr.
*
_____________________________ Director
W. James Amoss, Jr.
II-8
<PAGE>
*
_____________________________ Director
J. Terrell Brown
*
_____________________________ Director
J. Herbert Boydstun
*
_____________________________ Director
Brooke H. Duncan
*
_____________________________ Director
Richard W. Freeman
*
_____________________________ Director
Robert L. Goodwin
*
_____________________________ Director
Dick H. Hearin
*
_____________________________ Director
Robert T. Holleman
*
_____________________________ Director
Hugh J. Kelly
*
_____________________________ Director
John P. Laborde
*
_____________________________ Director
Sidney W. Lassen
*
_____________________________ Director
Donald J. Nalty
*
_____________________________ Director
Robert T. Ratcliff
*
_____________________________ Director
H. Duke Shackelford
II-9
<PAGE>
*
_____________________________ Director
James H. Stone
*
_____________________________ Director
Virgnia E. Weinmann
*
_____________________________ Director
E. L. Williamson
*
_____________________________ Director
Robert E. Zetzmann
*By: Patricia C. Meringer
________________________
Patricia C. Meringer
Attorney-in-Fact
II-10
<PAGE>
EXHIBIT INDEX
Sequential Page
Exhibit Number
- ------- ------
*5 Opinion of Patricia C. Meringer, Esq.
23(a) Consent of Patricia C. Meringer, Esq.
(included with Exhibit 5)
23(c) Consent of Ernst & Young LLP
Consent of Arthur Andersen LLP
Consent of Arthur Andersen LLP
Consent of KPMG Peat Marwick
Consent of Hussey & Lolan, CPA
Consent of Montgomery Securities
24 Powers of Attorney
________
* To be filed by Amendment
<PAGE>
EXHIBIT 23 (c)(i)
CONSENT OF ERNST & YOUNG LLP
Consent of Independent Auditors
We consent to the reference to our firm under the caption "Experts" in this
Registration Statement (Form S-4) and related Prospectus of Hibernia Corporation
for the registration of 2,250,000 shares of its common stock to be issued
pursuant to its proposed merger with American Bank and to the incorporation by
reference therein of our reports (i) dated January 11, 1994, with respect to the
consolidated financial statements of Hibernia Corporation incorporated by
reference in its Annual Report (Form 10-K) for the year ended December 31, 1993
and (ii) dated January 11, 1994, except for the pooling of interests with the
Other Pooled Companies described in Note 16, as to which the date is August 1,
1994, with respect to the consolidated financial statements of Hibernia
Corporation for the year ended December 31, 1993, included in its Current Report
on Form 8-K dated October 11, 1994, restated to give effect to four mergers
consummated during the third quarter of 1994 and accounted for as poolings of
interests, both filed with the Securities and Exchange Commission.
/s/ ERNST & YOUNG LLP
---------------------
Ernst & Young LLP
New Orleans, Louisiana
December 21, 1994
<PAGE>
EXHIBIT 23(c)(ii)
CONSENT OF ARTHUR ANDERSEN LLP
CONSENT OF INDEPENDENT PUBLIC ACCOUNTANTS
As independent public accountants, we hereby consent to the use of our report
dated April 15, 1994, with respect to the balance sheets of American Bank as of
December 31, 1993 and 1992, and the related statements of income, shareholders'
equity and cash flows for each of the years then ended and to all references to
our Firm included in or made a part of this registration statement.
/s/ Arthur Andersen LLP
-------------------
ARTHUR ANDERSEN LLP
New Orleans, Louisiana
December 21, 1994
<PAGE>
EXHIBIT 23(c)(iii)
CONSENT OF ARTHUR ANDERSEN LLP
CONSENT OF INDEPENDENT PUBLIC ACCOUNTANTS
As independent public accountants, we hereby consent to the incorporation by
reference in the Form S-4 and related prospectus filed by Hibernia Corporation
(Hibernia) under the Securities Exchange Act of 1933 of our report dated
February 14, 1994, with respect to the consolidated statements of condition of
First Continental Bancshares, Inc. and subsidiary as of December 31, 1993 and
1992, and the related consolidated statements of income (loss), cash flows and
shareholders equity for each of the three years ended December 31, 1993 included
in Hibernia's Form 8-K dated October 11, 1994.
/s/ Arthur Andersen LLP
-------------------
ARTHUR ANDERSEN LLP
New Orleans, Lousiana
December 21, 1994
<PAGE>
Exhibit 23(c)(iv)
CONSENT OF KPMG PEAT MARWICK
INDEPENDENT AUDITORS' CONSENT
We consent to the use of our report related to the consolidated financial
statements of First Bancorp of Louisiana, Inc. as of December 31, 1993 and 1992,
and for each of the years in the three-year period ended December 31, 1993,
incorporated by reference in the registration statement filed by Hibernia
Corporation on or about December 22, 1994, and to the reference to our firm
under the heading "Experts" in the propsectus. Our report referes to a change
in 1993 in the method of accounting for income taxes.
/s/ KPMG Peat Markwick LLP
----------------------
KPMG PEAT MARWICK LLP
Shreveport, Louisiana
December 21, 1994
<PAGE>
Exhibit 23(c)(v)
CONSENT OF CASTAING, HUSSEY & LOLAN
Consent of Independent Auditors
We consent to the reference to our firm under the caption "Experts" in the
registration statement (Form S-4) and related prospectus of Hibernia Corporation
for the registration of its common stock to be issued pursuant to its proposed
merger with American Bank and to incorporation by reference therein of our
report dated January 25, 1994, relating to the consolidated balance sheets of
Commercial Bancshares, INc. as of December 31, 1993 and 1992, and the related
consolidated statements of income, stockholders' equity and cash flows for each
of the years in the three year-period ended December 31, 1993, which report
appears in the Hibernia Corporation Current Report on Form 8-K dated October 11,
1994.
/s/ Castaing, Hussey & Lolan
- --------------------------
CASTAING, HUSSEY & LOLAN
New Iberia, Louisiana
December 21, 1994
<PAGE>
Exhibit 23(c)(vi)
[Logo of Hibernia appears here]
Montgomery
December 21, 1994
American Bank
22 Apple Street
Norco, LA 70079
Gentlemen:
This letter will constitute our consent to include our opinion dated September
19, 1994 regarding the sale of American Bank (the "Company") to Hibernia
Corporation, in the Company's proxy statement (the "Proxy Statement") and the
summary of our opinion in such Proxy Statement. In giving the foregoing consent,
we do not admit that we come within the category of persons whose consent is
required under Section 7 of the Securities Act of the 1933, as amended (the
"Securities Act"), or the rules and regulations of the Securities and Exchange
Commission promulgated thereunder, nor do we admit that we are experts with
respect to any part of such Proxy Statement within the meaning of the term
"experts" as used in the Securities Act and the rules and regulations of the
Securities and Exchange Commission promulgated thereunder.
Very truly yours,
MONTGOMERY SECURITIES
By: Joe Schell
____________________
Managing Director
[Letterhead of Hibernia appears here]
<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 W. Close, Patricia C. Meringer and Ron E. Samford,
Jr., and each of them (with full power to each of them to act alone), his true
and lawful agents and attorneys-in-fact, for him and on his behalf and in his
name, place and stead, in any and all capacities, to sign, execute, acknowledge,
deliver, and file (a) with the Securities and Exchange Commission (or any other
governmental or regulatory authority), a Registration Statement on Form S-4 (or
other appropriate form) and any and all amendments (including post-effective
amendments) thereto, with any and all exhibits and any and all other documents
required to be filed with respect thereto or in connection therewith, relating
to the registration under the Securities Act of 1933 of Common Stock of the
Corporation to be issued in the merger between Hibernia National Bank (the
"Bank") and American Bank ("American Bank") wherein the Corporation agrees to
exchange shares of its common stock for all of the outstanding shares of common
stock of American Bank and merge American Bank into the Bank, authorized by
resolutions adopted by the Board of Directors on September 27, 1994, and (b)
with the securities agencies or officials of various jurisdictions, all
applications, qualifications, registrations or exemptions relating to such
offering under the laws of any such jurisdiction, including any amendments
thereto or other documents required to be filed with respect thereto or in
connection therewith, granting unto said agents and attorneys, and each of them,
full power and authority to do and perform each and every act and thing
requisite and necessary to be done in and about the premises in order to
effectuate the same as fully to all intents and purposes as the undersigned
might or could do if personally present, and the undersigned hereby ratifies and
confirms all that said agents and attorneys-in-fact, or any of them may lawfully
do or cause to be done by virtue hereof.
IN WITNESS WHEREOF, the undersigned has hereunto set his hand on this 27th
day of September, 1994.
/S/ W. JAMES AMOSS, JR.
-----------------------
W. James Amoss, Jr.
Director
HIBERNIA CORPORATION
1
<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 Robert W. Close, Patricia C. Meringer and
Ron E. Samford, Jr., and each of them (with full power to each of them to act
alone), his true and lawful agents and attorneys-in-fact, for him and on his
behalf and in his name, place and stead, in any and all capacities, to sign,
execute, acknowledge, deliver, and file (a) with the Securities and Exchange
Commission (or any other governmental or regulatory authority), a Registration
Statement on Form S-4 (or other appropriate form) and any and all amendments
(including post-effective amendments) thereto, with any and all exhibits and any
and all other documents required to be filed with respect thereto or in
connection therewith, relating to the registration under the Securities Act of
1933 of Common Stock of the Corporation to be issued in the merger between
Hibernia National Bank (the "Bank") and American Bank ("American Bank") wherein
the Corporation agrees to exchange shares of its common stock for all of the
outstanding shares of common stock of American Bank and merge American Bank into
the Bank, authorized by resolutions adopted by the Board of Directors on
September 27, 1994, and (b) with the securities agencies or officials of various
jurisdictions, all applications, qualifications, registrations or exemptions
relating to such offering under the laws of any such jurisdiction, including any
amendments thereto or other documents required to be filed with respect thereto
or in connection therewith, granting unto said agents and attorneys, and each of
them, full power and authority to do and perform each and every act and thing
requisite and necessary to be done in and about the premises in order to
effectuate the same as fully to all intents and purposes as the undersigned
might or could do if personally present, and the undersigned hereby ratifies and
confirms all that said agents and attorneys-in-fact, or any of them may lawfully
do or cause to be done by virtue hereof.
IN WITNESS WHEREOF, the undersigned has hereunto set his hand on this 27th
day of September, 1994.
/S/ ROBERT H. BOH
-----------------
Robert H. Boh
Chairman and Director
HIBERNIA CORPORATION
2
<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 W. Close, Patricia C. Meringer and Ron E. Samford,
Jr., and each of them (with full power to each of them to act alone), his true
and lawful agents and attorneys-in-fact, for him and on his behalf and in his
name, place and stead, in any and all capacities, to sign, execute, acknowledge,
deliver, and file (a) with the Securities and Exchange Commission (or any other
governmental or regulatory authority), a Registration Statement on Form S-4 (or
other appropriate form) and any and all amendments (including post-effective
amendments) thereto, with any and all exhibits and any and all other documents
required to be filed with respect thereto or in connection therewith, relating
to the registration under the Securities Act of 1933 of Common Stock of the
Corporation to be issued in the merger between Hibernia National Bank (the
"Bank") and American Bank ("American Bank") wherein the Corporation agrees to
exchange shares of its common stock for all of the outstanding shares of common
stock of American Bank and merge American Bank into the Bank, authorized by
resolutions adopted by the Board of Directors on September 27, 1994, and (b)
with the securities agencies or officials of various jurisdictions, all
applications, qualifications, registrations or exemptions relating to such
offering under the laws of any such jurisdiction, including any amendments
thereto or other documents required to be filed with respect thereto or in
connection therewith, granting unto said agents and attorneys, and each of them,
full power and authority to do and perform each and every act and thing
requisite and necessary to be done in and about the premises in order to
effectuate the same as fully to all intents and purposes as the undersigned
might or could do if personally present, and the undersigned hereby ratifies and
confirms all that said agents and attorneys-in-fact, or any of them may lawfully
do or cause to be done by virtue hereof.
IN WITNESS WHEREOF, the undersigned has hereunto set his hand on this 27th
day of September, 1994.
/S/ J. HERBERT BOYDSTUN
---------------------
J. Herbert Boydstun
Director
HIBERNIA CORPORATION
3
<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 W. Close, Patricia C. Meringer and Ron E. Samford,
Jr., and each of them (with full power to each of them to act alone), his true
and lawful agents and attorneys-in-fact, for him and on his behalf and in his
name, place and stead, in any and all capacities, to sign, execute, acknowledge,
deliver, and file (a) with the Securities and Exchange Commission (or any other
governmental or regulatory authority), a Registration Statement on Form S-4 (or
other appropriate form) and any and all amendments (including post-effective
amendments) thereto, with any and all exhibits and any and all other documents
required to be filed with respect thereto or in connection therewith, relating
to the registration under the Securities Act of 1933 of Common Stock of the
Corporation to be issued in the merger between Hibernia National Bank (the
"Bank") and American Bank ("American Bank") wherein the Corporation agrees to
exchange shares of its common stock for all of the outstanding shares of common
stock of American Bank and merge American Bank into the Bank, authorized by
resolutions adopted by the Board of Directors on September 27, 1994, and (b)
with the securities agencies or officials of various jurisdictions, all
applications, qualifications, registrations or exemptions relating to such
offering under the laws of any such jurisdiction, including any amendments
thereto or other documents required to be filed with respect thereto or in
connection therewith, granting unto said agents and attorneys, and each of them,
full power and authority to do and perform each and every act and thing
requisite and necessary to be done in and about the premises in order to
effectuate the same as fully to all intents and purposes as the undersigned
might or could do if personally present, and the undersigned hereby ratifies and
confirms all that said agents and attorneys-in-fact, or any of them may lawfully
do or cause to be done by virtue hereof.
IN WITNESS WHEREOF, the undersigned has hereunto set his hand on this 27th
day of September, 1994.
/S/ J. TERRELL BROWN
--------------------
J. Terrell Brown
Director
HIBERNIA CORPORATION
4
<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 W. Close, Patricia C. Meringer and Ron E. Samford,
Jr., and each of them (with full power to each of them to act alone), his true
and lawful agents and attorneys-in-fact, for him and on his behalf and in his
name, place and stead, in any and all capacities, to sign, execute, acknowledge,
deliver, and file (a) with the Securities and Exchange Commission (or any other
governmental or regulatory authority), a Registration Statement on Form S-4 (or
other appropriate form) and any and all amendments (including post-effective
amendments) thereto, with any and all exhibits and any and all other documents
required to be filed with respect thereto or in connection therewith, relating
to the registration under the Securities Act of 1933 of Common Stock of the
Corporation to be issued in the merger between Hibernia National Bank (the
"Bank") and American Bank ("American Bank") wherein the Corporation agrees to
exchange shares of its common stock for all of the outstanding shares of common
stock of American Bank and merge American Bank into the Bank, authorized by
resolutions adopted by the Board of Directors on September 27, 1994, and (b)
with the securities agencies or officials of various jurisdictions, all
applications, qualifications, registrations or exemptions relating to such
offering under the laws of any such jurisdiction, including any amendments
thereto or other documents required to be filed with respect thereto or in
connection therewith, granting unto said agents and attorneys, and each of them,
full power and authority to do and perform each and every act and thing
requisite and necessary to be done in and about the premises in order to
effectuate the same as fully to all intents and purposes as the undersigned
might or could do if personally present, and the undersigned hereby ratifies and
confirms all that said agents and attorneys-in-fact, or any of them may lawfully
do or cause to be done by virtue hereof.
IN WITNESS WHEREOF, the undersigned has hereunto set his hand on this 27th
day of September, 1994.
/S/ BROOKE H. DUNCAN
--------------------
Brooke H. Duncan
Director
HIBERNIA CORPORATION
5
<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 W. Close, Patricia C. Meringer and Ron E. Samford,
Jr., and each of them (with full power to each of them to act alone), his true
and lawful agents and attorneys-in-fact, for him and on his behalf and in his
name, place and stead, in any and all capacities, to sign, execute, acknowledge,
deliver, and file (a) with the Securities and Exchange Commission (or any other
governmental or regulatory authority), a Registration Statement on Form S-4 (or
other appropriate form) and any and all amendments (including post-effective
amendments) thereto, with any and all exhibits and any and all other documents
required to be filed with respect thereto or in connection therewith, relating
to the registration under the Securities Act of 1933 of Common Stock of the
Corporation to be issued in the merger between Hibernia National Bank (the
"Bank") and American Bank ("American Bank") wherein the Corporation agrees to
exchange shares of its common stock for all of the outstanding shares of common
stock of American Bank and merge American Bank into the Bank, authorized by
resolutions adopted by the Board of Directors on September 27, 1994, and (b)
with the securities agencies or officials of various jurisdictions, all
applications, qualifications, registrations or exemptions relating to such
offering under the laws of any such jurisdiction, including any amendments
thereto or other documents required to be filed with respect thereto or in
connection therewith, granting unto said agents and attorneys, and each of them,
full power and authority to do and perform each and every act and thing
requisite and necessary to be done in and about the premises in order to
effectuate the same as fully to all intents and purposes as the undersigned
might or could do if personally present, and the undersigned hereby ratifies and
confirms all that said agents and attorneys-in-fact, or any of them may lawfully
do or cause to be done by virtue hereof.
IN WITNESS WHEREOF, the undersigned has hereunto set his hand on this 27th
day of September, 1994.
/S/ RICHARD W. FREEMAN, JR.
---------------------------
Richard W. Freeman, Jr.
Director
HIBERNIA CORPORATION
6
<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 W. Close, Patricia C. Meringer and Ron E. Samford,
Jr., and each of them (with full power to each of them to act alone), his true
and lawful agents and attorneys-in-fact, for him and on his behalf and in his
name, place and stead, in any and all capacities, to sign, execute, acknowledge,
deliver, and file (a) with the Securities and Exchange Commission (or any other
governmental or regulatory authority), a Registration Statement on Form S-4 (or
other appropriate form) and any and all amendments (including post-effective
amendments) thereto, with any and all exhibits and any and all other documents
required to be filed with respect thereto or in connection therewith, relating
to the registration under the Securities Act of 1933 of Common Stock of the
Corporation to be issued in the merger between Hibernia National Bank (the
"Bank") and American Bank ("American Bank") wherein the Corporation agrees to
exchange shares of its common stock for all of the outstanding shares of common
stock of American Bank and merge American Bank into the Bank, authorized by
resolutions adopted by the Board of Directors on September 27, 1994, and (b)
with the securities agencies or officials of various jurisdictions, all
applications, qualifications, registrations or exemptions relating to such
offering under the laws of any such jurisdiction, including any amendments
thereto or other documents required to be filed with respect thereto or in
connection therewith, granting unto said agents and attorneys, and each of them,
full power and authority to do and perform each and every act and thing
requisite and necessary to be done in and about the premises in order to
effectuate the same as fully to all intents and purposes as the undersigned
might or could do if personally present, and the undersigned hereby ratifies and
confirms all that said agents and attorneys-in-fact, or any of them may lawfully
do or cause to be done by virtue hereof.
IN WITNESS WHEREOF, the undersigned has hereunto set his hand on this 27th
day of September, 1994.
/S/ ROBERT L. GOODWIN
---------------------
Robert L. Goodwin
Director
HIBERNIA CORPORATION
7
<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 W. Close,
Patricia C. Meringer and Ron E. Samford, Jr., and each of them (with full power
to each of them to act alone), his true and lawful agents and attorneys-in-fact,
for him and on his behalf and in his name, place and stead, in any and all
capacities, to sign, execute, acknowledge, deliver, and file (a) with the
Securities and Exchange Commission (or any other governmental or regulatory
authority), a Registration Statement on Form S-4 (or other appropriate form) and
any and all amendments (including post-effective amendments) thereto, with any
and all exhibits and any and all other documents required to be filed with
respect thereto or in connection therewith, relating to the registration under
the Securities Act of 1933 of Common Stock of the Corporation to be issued in
the merger between Hibernia National Bank (the "Bank") and American Bank
("American Bank") wherein the Corporation agrees to exchange shares of its
common stock for all of the outstanding shares of common stock of American Bank
and merge American Bank into the Bank, authorized by resolutions adopted by the
Board of Directors on September 27, 1994, and (b) with the securities agencies
or officials of various jurisdictions, all applications, qualifications,
registrations or exemptions relating to such offering under the laws of any such
jurisdiction, including any amendments thereto or other documents required to be
filed with respect thereto or in connection therewith, granting unto said agents
and attorneys, and each of them, full power and authority to do and perform each
and every act and thing requisite and necessary to be done in and about the
premises in order to effectuate the same as fully to all intents and purposes as
the undersigned might or could do if personally present, and the undersigned
hereby ratifies and confirms all that said agents and attorneys-in-fact, or any
of them may lawfully do or cause to be done by virtue hereof.
IN WITNESS WHEREOF, the undersigned has hereunto set his hand on this 27th
day of September, 1994.
/S/ STEPHEN A. HANSEL
---------------------
Stephen A. Hansel
President, Chief Executive Officer
and Director
HIBERNIA CORPORATION
8
<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 W. Close, Patricia C. Meringer and Ron E. Samford,
Jr., and each of them (with full power to each of them to act alone), his true
and lawful agents and attorneys-in-fact, for him and on his behalf and in his
name, place and stead, in any and all capacities, to sign, execute, acknowledge,
deliver, and file (a) with the Securities and Exchange Commission (or any other
governmental or regulatory authority), a Registration Statement on Form S-4 (or
other appropriate form) and any and all amendments (including post-effective
amendments) thereto, with any and all exhibits and any and all other documents
required to be filed with respect thereto or in connection therewith, relating
to the registration under the Securities Act of 1933 of Common Stock of the
Corporation to be issued in the merger between Hibernia National Bank (the
"Bank") and American Bank ("American Bank") wherein the Corporation agrees to
exchange shares of its common stock for all of the outstanding shares of common
stock of American Bank and merge American Bank into the Bank, authorized by
resolutions adopted by the Board of Directors on September 27, 1994, and (b)
with the securities agencies or officials of various jurisdictions, all
applications, qualifications, registrations or exemptions relating to such
offering under the laws of any such jurisdiction, including any amendments
thereto or other documents required to be filed with respect thereto or in
connection therewith, granting unto said agents and attorneys, and each of them,
full power and authority to do and perform each and every act and thing
requisite and necessary to be done in and about the premises in order to
effectuate the same as fully to all intents and purposes as the undersigned
might or could do if personally present, and the undersigned hereby ratifies and
confirms all that said agents and attorneys-in-fact, or any of them may lawfully
do or cause to be done by virtue hereof.
IN WITNESS WHEREOF, the undersigned has hereunto set his hand on this 27th
day of September, 1994.
/S/ DICK H. HEARIN
------------------
Dick H. Hearin
Director
HIBERNIA CORPORATION
9
<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 W. Close, Patricia C. Meringer and Ron E. Samford,
Jr., and each of them (with full power to each of them to act alone), his true
and lawful agents and attorneys-in-fact, for him and on his behalf and in his
name, place and stead, in any and all capacities, to sign, execute, acknowledge,
deliver, and file (a) with the Securities and Exchange Commission (or any other
governmental or regulatory authority), a Registration Statement on Form S-4 (or
other appropriate form) and any and all amendments (including post-effective
amendments) thereto, with any and all exhibits and any and all other documents
required to be filed with respect thereto or in connection therewith, relating
to the registration under the Securities Act of 1933 of Common Stock of the
Corporation to be issued in the merger between Hibernia National Bank (the
"Bank") and American Bank ("American Bank") wherein the Corporation agrees to
exchange shares of its common stock for all of the outstanding shares of common
stock of American Bank and merge American Bank into the Bank, authorized by
resolutions adopted by the Board of Directors on September 27, 1994, and (b)
with the securities agencies or officials of various jurisdictions, all
applications, qualifications, registrations or exemptions relating to such
offering under the laws of any such jurisdiction, including any amendments
thereto or other documents required to be filed with respect thereto or in
connection therewith, granting unto said agents and attorneys, and each of them,
full power and authority to do and perform each and every act and thing
requisite and necessary to be done in and about the premises in order to
effectuate the same as fully to all intents and purposes as the undersigned
might or could do if personally present, and the undersigned hereby ratifies and
confirms all that said agents and attorneys-in-fact, or any of them may lawfully
do or cause to be done by virtue hereof.
IN WITNESS WHEREOF, the undersigned has hereunto set his hand on this 27th
day of September, 1994.
/S/ ROBERT T. HOLLEMAN
----------------------
Robert T. Holleman
Director
HIBERNIA CORPORATION
10
<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 W. Close, Patricia C. Meringer
and Ron E. Samford, Jr., and each of them (with full power to each of them to
act alone), his true and lawful agents and attorneys-in-fact, for him and on his
behalf and in his name, place and stead, in any and all capacities, to sign,
execute, acknowledge, deliver, and file (a) with the Securities and Exchange
Commission (or any other governmental or regulatory authority), a Registration
Statement on Form S-4 (or other appropriate form) and any and all amendments
(including post-effective amendments) thereto, with any and all exhibits and any
and all other documents required to be filed with respect thereto or in
connection therewith, relating to the registration under the Securities Act of
1933 of Common Stock of the Corporation to be issued in the merger between
Hibernia National Bank (the "Bank") and American Bank ("American Bank") wherein
the Corporation agrees to exchange shares of its common stock for all of the
outstanding shares of common stock of American Bank and merge American Bank into
the Bank, authorized by resolutions adopted by the Board of Directors on
September 27, 1994, and (b) with the securities agencies or officials of various
jurisdictions, all applications, qualifications, registrations or exemptions
relating to such offering under the laws of any such jurisdiction, including any
amendments thereto or other documents required to be filed with respect thereto
or in connection therewith, granting unto said agents and attorneys, and each of
them, full power and authority to do and perform each and every act and thing
requisite and necessary to be done in and about the premises in order to
effectuate the same as fully to all intents and purposes as the undersigned
might or could do if personally present, and the undersigned hereby ratifies and
confirms all that said agents and attorneys-in-fact, or any of them may lawfully
do or cause to be done by virtue hereof.
IN WITNESS WHEREOF, the undersigned has hereunto set his hand on this 27th
day of September, 1994.
/S/ HUGH J. KELLY
-----------------
Hugh J. Kelly
Vice Chairman and Director
HIBERNIA CORPORATION
11
<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 W. Close, Patricia C. Meringer and Ron E. Samford,
Jr., and each of them (with full power to each of them to act alone), his true
and lawful agents and attorneys-in-fact, for him and on his behalf and in his
name, place and stead, in any and all capacities, to sign, execute, acknowledge,
deliver, and file (a) with the Securities and Exchange Commission (or any other
governmental or regulatory authority), a Registration Statement on Form S-4 (or
other appropriate form) and any and all amendments (including post-effective
amendments) thereto, with any and all exhibits and any and all other documents
required to be filed with respect thereto or in connection therewith, relating
to the registration under the Securities Act of 1933 of Common Stock of the
Corporation to be issued in the merger between Hibernia National Bank (the
"Bank") and American Bank ("American Bank") wherein the Corporation agrees to
exchange shares of its common stock for all of the outstanding shares of common
stock of American Bank and merge American Bank into the Bank, authorized by
resolutions adopted by the Board of Directors on September 27, 1994, and (b)
with the securities agencies or officials of various jurisdictions, all
applications, qualifications, registrations or exemptions relating to such
offering under the laws of any such jurisdiction, including any amendments
thereto or other documents required to be filed with respect thereto or in
connection therewith, granting unto said agents and attorneys, and each of them,
full power and authority to do and perform each and every act and thing
requisite and necessary to be done in and about the premises in order to
effectuate the same as fully to all intents and purposes as the undersigned
might or could do if personally present, and the undersigned hereby ratifies and
confirms all that said agents and attorneys-in-fact, or any of them may lawfully
do or cause to be done by virtue hereof.
IN WITNESS WHEREOF, the undersigned has hereunto set his hand on this 27th
day of September, 1994.
/S/ ELTON R. KING
-----------------
Elton R. King
Director
HIBERNIA CORPORATION
12
<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 W. Close, Patricia C. Meringer and Ron E. Samford,
Jr., and each of them (with full power to each of them to act alone), his true
and lawful agents and attorneys-in-fact, for him and on his behalf and in his
name, place and stead, in any and all capacities, to sign, execute, acknowledge,
deliver, and file (a) with the Securities and Exchange Commission (or any other
governmental or regulatory authority), a Registration Statement on Form S-4 (or
other appropriate form) and any and all amendments (including post-effective
amendments) thereto, with any and all exhibits and any and all other documents
required to be filed with respect thereto or in connection therewith, relating
to the registration under the Securities Act of 1933 of Common Stock of the
Corporation to be issued in the merger between Hibernia National Bank (the
"Bank") and American Bank ("American Bank") wherein the Corporation agrees to
exchange shares of its common stock for all of the outstanding shares of common
stock of American Bank and merge American Bank into the Bank, authorized by
resolutions adopted by the Board of Directors on September 27, 1994, and (b)
with the securities agencies or officials of various jurisdictions, all
applications, qualifications, registrations or exemptions relating to such
offering under the laws of any such jurisdiction, including any amendments
thereto or other documents required to be filed with respect thereto or in
connection therewith, granting unto said agents and attorneys, and each of them,
full power and authority to do and perform each and every act and thing
requisite and necessary to be done in and about the premises in order to
effectuate the same as fully to all intents and purposes as the undersigned
might or could do if personally present, and the undersigned hereby ratifies and
confirms all that said agents and attorneys-in-fact, or any of them may lawfully
do or cause to be done by virtue hereof.
IN WITNESS WHEREOF, the undersigned has hereunto set his hand on this 27th
day of September, 1994.
/S/ JOHN P. LABORDE
-------------------
John P. Laborde
Director
HIBERNIA CORPORATION
13
<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 W. Close, Patricia C. Meringer and Ron E. Samford,
Jr., and each of them (with full power to each of them to act alone), his true
and lawful agents and attorneys-in-fact, for him and on his behalf and in his
name, place and stead, in any and all capacities, to sign, execute, acknowledge,
deliver, and file (a) with the Securities and Exchange Commission (or any other
governmental or regulatory authority), a Registration Statement on Form S-4 (or
other appropriate form) and any and all amendments (including post-effective
amendments) thereto, with any and all exhibits and any and all other documents
required to be filed with respect thereto or in connection therewith, relating
to the registration under the Securities Act of 1933 of Common Stock of the
Corporation to be issued in the merger between Hibernia National Bank (the
"Bank") and American Bank ("American Bank") wherein the Corporation agrees to
exchange shares of its common stock for all of the outstanding shares of common
stock of American Bank and merge American Bank into the Bank, authorized by
resolutions adopted by the Board of Directors on September 27, 1994, and (b)
with the securities agencies or officials of various jurisdictions, all
applications, qualifications, registrations or exemptions relating to such
offering under the laws of any such jurisdiction, including any amendments
thereto or other documents required to be filed with respect thereto or in
connection therewith, granting unto said agents and attorneys, and each of them,
full power and authority to do and perform each and every act and thing
requisite and necessary to be done in and about the premises in order to
effectuate the same as fully to all intents and purposes as the undersigned
might or could do if personally present, and the undersigned hereby ratifies and
confirms all that said agents and attorneys-in-fact, or any of them may lawfully
do or cause to be done by virtue hereof.
IN WITNESS WHEREOF, the undersigned has hereunto set his hand on this 27th
day of September, 1994.
/S/ SIDNEY W. LASSEN
--------------------
Sidney W. Lassen
Director
HIBERNIA CORPORATION
14
<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 W. Close, Patricia C. Meringer
and Ron E. Samford, Jr., and each of them (with full power to each of them to
act alone), his true and lawful agents and attorneys-in-fact, for him and on his
behalf and in his name, place and stead, in any and all capacities, to sign,
execute, acknowledge, deliver, and file (a) with the Securities and Exchange
Commission (or any other governmental or regulatory authority), a Registration
Statement on Form S-4 (or other appropriate form) and any and all amendments
(including post-effective amendments) thereto, with any and all exhibits and any
and all other documents required to be filed with respect thereto or in
connection therewith, relating to the registration under the Securities Act of
1933 of Common Stock of the Corporation to be issued in the merger between
Hibernia National Bank (the "Bank") and American Bank ("American Bank") wherein
the Corporation agrees to exchange shares of its common stock for all of the
outstanding shares of common stock of American Bank and merge American Bank into
the Bank, authorized by resolutions adopted by the Board of Directors on
September 27, 1994, and (b) with the securities agencies or officials of various
jurisdictions, all applications, qualifications, registrations or exemptions
relating to such offering under the laws of any such jurisdiction, including any
amendments thereto or other documents required to be filed with respect thereto
or in connection therewith, granting unto said agents and attorneys, and each of
them, full power and authority to do and perform each and every act and thing
requisite and necessary to be done in and about the premises in order to
effectuate the same as fully to all intents and purposes as the undersigned
might or could do if personally present, and the undersigned hereby ratifies and
confirms all that said agents and attorneys-in-fact, or any of them may lawfully
do or cause to be done by virtue hereof.
IN WITNESS WHEREOF, the undersigned has hereunto set his hand on this 27th
day of September, 1994.
/S/ DONALD J. NALTY
-------------------
Donald J. Nalty
Vice Chairman and Director
HIBERNIA CORPORATION
15
<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 W. Close, Patricia C. Meringer and Ron E. Samford,
Jr., and each of them (with full power to each of them to act alone), his true
and lawful agents and attorneys-in-fact, for him and on his behalf and in his
name, place and stead, in any and all capacities, to sign, execute, acknowledge,
deliver, and file (a) with the Securities and Exchange Commission (or any other
governmental or regulatory authority), a Registration Statement on Form S-4 (or
other appropriate form) and any and all amendments (including post-effective
amendments) thereto, with any and all exhibits and any and all other documents
required to be filed with respect thereto or in connection therewith, relating
to the registration under the Securities Act of 1933 of Common Stock of the
Corporation to be issued in the merger between Hibernia National Bank (the
"Bank") and American Bank ("American Bank") wherein the Corporation agrees to
exchange shares of its common stock for all of the outstanding shares of common
stock of American Bank and merge American Bank into the Bank, authorized by
resolutions adopted by the Board of Directors on September 27, 1994, and (b)
with the securities agencies or officials of various jurisdictions, all
applications, qualifications, registrations or exemptions relating to such
offering under the laws of any such jurisdiction, including any amendments
thereto or other documents required to be filed with respect thereto or in
connection therewith, granting unto said agents and attorneys, and each of them,
full power and authority to do and perform each and every act and thing
requisite and necessary to be done in and about the premises in order to
effectuate the same as fully to all intents and purposes as the undersigned
might or could do if personally present, and the undersigned hereby ratifies and
confirms all that said agents and attorneys-in-fact, or any of them may lawfully
do or cause to be done by virtue hereof.
IN WITNESS WHEREOF, the undersigned has hereunto set his hand on this 27th
day of September, 1994.
/S/ ROBERT T. RATCLIFF
----------------------
Robert T. Ratcliff
Director
HIBERNIA CORPORATION
16
<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 W. Close, Patricia C. Meringer and Ron E. Samford,
Jr., and each of them (with full power to each of them to act alone), his true
and lawful agents and attorneys-in-fact, for him and on his behalf and in his
name, place and stead, in any and all capacities, to sign, execute, acknowledge,
deliver, and file (a) with the Securities and Exchange Commission (or any other
governmental or regulatory authority), a Registration Statement on Form S-4 (or
other appropriate form) and any and all amendments (including post-effective
amendments) thereto, with any and all exhibits and any and all other documents
required to be filed with respect thereto or in connection therewith, relating
to the registration under the Securities Act of 1933 of Common Stock of the
Corporation to be issued in the merger between Hibernia National Bank (the
"Bank") and American Bank ("American Bank") wherein the Corporation agrees to
exchange shares of its common stock for all of the outstanding shares of common
stock of American Bank and merge American Bank into the Bank, authorized by
resolutions adopted by the Board of Directors on September 27, 1994, and (b)
with the securities agencies or officials of various jurisdictions, all
applications, qualifications, registrations or exemptions relating to such
offering under the laws of any such jurisdiction, including any amendments
thereto or other documents required to be filed with respect thereto or in
connection therewith, granting unto said agents and attorneys, and each of them,
full power and authority to do and perform each and every act and thing
requisite and necessary to be done in and about the premises in order to
effectuate the same as fully to all intents and purposes as the undersigned
might or could do if personally present, and the undersigned hereby ratifies and
confirms all that said agents and attorneys-in-fact, or any of them may lawfully
do or cause to be done by virtue hereof.
IN WITNESS WHEREOF, the undersigned has hereunto set his hand on this 27th
day of September, 1994.
/S/ H. DUKE SHACKELFORD
-----------------------
H. Duke Shackelford
Director
HIBERNIA CORPORATION
17
<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 W. Close, Patricia C. Meringer and Ron E. Samford,
Jr., and each of them (with full power to each of them to act alone), his true
and lawful agents and attorneys-in-fact, for him and on his behalf and in his
name, place and stead, in any and all capacities, to sign, execute, acknowledge,
deliver, and file (a) with the Securities and Exchange Commission (or any other
governmental or regulatory authority), a Registration Statement on Form S-4 (or
other appropriate form) and any and all amendments (including post-effective
amendments) thereto, with any and all exhibits and any and all other documents
required to be filed with respect thereto or in connection therewith, relating
to the registration under the Securities Act of 1933 of Common Stock of the
Corporation to be issued in the merger between Hibernia National Bank (the
"Bank") and American Bank ("American Bank") wherein the Corporation agrees to
exchange shares of its common stock for all of the outstanding shares of common
stock of American Bank and merge American Bank into the Bank, authorized by
resolutions adopted by the Board of Directors on September 27, 1994, and (b)
with the securities agencies or officials of various jurisdictions, all
applications, qualifications, registrations or exemptions relating to such
offering under the laws of any such jurisdiction, including any amendments
thereto or other documents required to be filed with respect thereto or in
connection therewith, granting unto said agents and attorneys, and each of them,
full power and authority to do and perform each and every act and thing
requisite and necessary to be done in and about the premises in order to
effectuate the same as fully to all intents and purposes as the undersigned
might or could do if personally present, and the undersigned hereby ratifies and
confirms all that said agents and attorneys-in-fact, or any of them may lawfully
do or cause to be done by virtue hereof.
IN WITNESS WHEREOF, the undersigned has hereunto set his hand on this 27th
day of September, 1994.
/S/ JAMES H. STONE
------------------
James H. Stone
Director
HIBERNIA CORPORATION
18
<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 W. Close, Patricia C. Meringer and Ron E. Samford,
Jr., and each of them (with full power to each of them to act alone), his true
and lawful agents and attorneys-in-fact, for him and on his behalf and in his
name, place and stead, in any and all capacities, to sign, execute, acknowledge,
deliver, and file (a) with the Securities and Exchange Commission (or any other
governmental or regulatory authority), a Registration Statement on Form S-4 (or
other appropriate form) and any and all amendments (including post-effective
amendments) thereto, with any and all exhibits and any and all other documents
required to be filed with respect thereto or in connection therewith, relating
to the registration under the Securities Act of 1933 of Common Stock of the
Corporation to be issued in the merger between Hibernia National Bank (the
"Bank") and American Bank ("American Bank") wherein the Corporation agrees to
exchange shares of its common stock for all of the outstanding shares of common
stock of American Bank and merge American Bank into the Bank, authorized by
resolutions adopted by the Board of Directors on September 27, 1994, and (b)
with the securities agencies or officials of various jurisdictions, all
applications, qualifications, registrations or exemptions relating to such
offering under the laws of any such jurisdiction, including any amendments
thereto or other documents required to be filed with respect thereto or in
connection therewith, granting unto said agents and attorneys, and each of them,
full power and authority to do and perform each and every act and thing
requisite and necessary to be done in and about the premises in order to
effectuate the same as fully to all intents and purposes as the undersigned
might or could do if personally present, and the undersigned hereby ratifies and
confirms all that said agents and attorneys-in-fact, or any of them may lawfully
do or cause to be done by virtue hereof.
IN WITNESS WHEREOF, the undersigned has hereunto set his hand on this 27th
day of September, 1994.
/S/ VIRGINIA EASON WEINMANN
---------------------------
Virginia Eason Weinmann
Director
HIBERNIA CORPORATION
19
<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 W. Close, Patricia C. Meringer and Ron E. Samford,
Jr., and each of them (with full power to each of them to act alone), his true
and lawful agents and attorneys-in-fact, for him and on his behalf and in his
name, place and stead, in any and all capacities, to sign, execute, acknowledge,
deliver, and file (a) with the Securities and Exchange Commission (or any other
governmental or regulatory authority), a Registration Statement on Form S-4 (or
other appropriate form) and any and all amendments (including post-effective
amendments) thereto, with any and all exhibits and any and all other documents
required to be filed with respect thereto or in connection therewith, relating
to the registration under the Securities Act of 1933 of Common Stock of the
Corporation to be issued in the merger between Hibernia National Bank (the
"Bank") and American Bank ("American Bank") wherein the Corporation agrees to
exchange shares of its common stock for all of the outstanding shares of common
stock of American Bank and merge American Bank into the Bank, authorized by
resolutions adopted by the Board of Directors on September 27, 1994, and (b)
with the securities agencies or officials of various jurisdictions, all
applications, qualifications, registrations or exemptions relating to such
offering under the laws of any such jurisdiction, including any amendments
thereto or other documents required to be filed with respect thereto or in
connection therewith, granting unto said agents and attorneys, and each of them,
full power and authority to do and perform each and every act and thing
requisite and necessary to be done in and about the premises in order to
effectuate the same as fully to all intents and purposes as the undersigned
might or could do if personally present, and the undersigned hereby ratifies and
confirms all that said agents and attorneys-in-fact, or any of them may lawfully
do or cause to be done by virtue hereof.
IN WITNESS WHEREOF, the undersigned has hereunto set his hand on this 27th
day of September, 1994.
/S/ ERNEST L. WILLIAMSON
------------------------
Ernest L. Williamson
Director
HIBERNIA CORPORATION
20
<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 W. Close, Patricia C. Meringer and Ron E. Samford,
Jr., and each of them (with full power to each of them to act alone), his true
and lawful agents and attorneys-in-fact, for him and on his behalf and in his
name, place and stead, in any and all capacities, to sign, execute, acknowledge,
deliver, and file (a) with the Securities and Exchange Commission (or any other
governmental or regulatory authority), a Registration Statement on Form S-4 (or
other appropriate form) and any and all amendments (including post-effective
amendments) thereto, with any and all exhibits and any and all other documents
required to be filed with respect thereto or in connection therewith, relating
to the registration under the Securities Act of 1933 of Common Stock of the
Corporation to be issued in the merger between Hibernia National Bank (the
"Bank") and American Bank ("American Bank") wherein the Corporation agrees to
exchange shares of its common stock for all of the outstanding shares of common
stock of American Bank and merge American Bank into the Bank, authorized by
resolutions adopted by the Board of Directors on September 27, 1994, and (b)
with the securities agencies or officials of various jurisdictions, all
applications, qualifications, registrations or exemptions relating to such
offering under the laws of any such jurisdiction, including any amendments
thereto or other documents required to be filed with respect thereto or in
connection therewith, granting unto said agents and attorneys, and each of them,
full power and authority to do and perform each and every act and thing
requisite and necessary to be done in and about the premises in order to
effectuate the same as fully to all intents and purposes as the undersigned
might or could do if personally present, and the undersigned hereby ratifies and
confirms all that said agents and attorneys-in-fact, or any of them may lawfully
do or cause to be done by virtue hereof.
IN WITNESS WHEREOF, the undersigned has hereunto set his hand on this 27th
day of September, 1994.
/S/ ROBERT E. ZETZMANN
----------------------
Robert E. Zetzmann
Director
HIBERNIA CORPORATION
21
<PAGE>
P0WER OF ATTORNEY
KNOW ALL MEN BY THESE PRESENTS, that the undersigned Controller of Hibernia
Corporation, a Louisiana corporation (the "Corporation"), does hereby name,
constitute and appoint Robert W. Close, Patricia C. Meringer and Ron E. Samford,
Jr., and each of them (with full power to each of them to act alone), his true
and lawful agents and attorneys-in-fact, for him and on his behalf and in his
name, place and stead, in any and all capacities, to sign, execute, acknowledge,
deliver, and file (a) with the Securities and Exchange Commission (or any other
governmental or regulatory authority), a Registration Statement on Form S-4 (or
other appropriate form) and any and all amendments (including post-effective
amendments) thereto, with any and all exhibits and any and all other documents
required to be filed with respect thereto or in connection therewith, relating
to the registration under the Securities Act of 1933 of Common Stock of the
Corporation to be issued in the merger between Hibernia National Bank (the
"Bank") and American Bank ("American Bank") wherein the Corporation agrees to
exchange shares of its common stock for all of the outstanding shares of common
stock of American Bank and merge American Bank into the Bank, authorized by
resolutions adopted by the Board of Directors on September 27, 1994, and (b)
with the securities agencies or officials of various jurisdictions, all
applications, qualifications, registrations or exemptions relating to such
offering under the laws of any such jurisdiction, including any amendments
thereto or other documents required to be filed with respect thereto or in
connection therewith, granting unto said agents and attorneys, and each of them,
full power and authority to do and perform each and every act and thing
requisite and necessary to be done in and about the premises in order to
effectuate the same as fully to all intents and purposes as the undersigned
might or could do if personally present, and the undersigned hereby ratifies and
confirms all that said agents and attorneys-in-fact, or any of them may lawfully
do or cause to be done by virtue hereof.
IN WITNESS WHEREOF, the undersigned has hereunto set his hand on this 27th
day of September, 1994.
/S/ RON E. SAMFORD, JR.
-----------------------
Ron E. Samford, Jr.
Controller
HIBERNIA CORPORATION
22
<PAGE>
P0WER OF ATTORNEY
KNOW ALL MEN BY THESE PRESENTS, that the undersigned Treasurer and Chief
Financial Officer of Hibernia Corporation, a Louisiana corporation (the
"Corporation"), does hereby name, constitute and appoint Robert W. Close,
Patricia C. Meringer and Ron E. Samford, Jr., and each of them (with full power
to each of them to act alone), his true and lawful agents and attorneys-in-fact,
for him and on his behalf and in his name, place and stead, in any and all
capacities, to sign, execute, acknowledge, deliver, and file (a) with the
Securities and Exchange Commission (or any other governmental or regulatory
authority), a Registration Statement on Form S-4 (or other appropriate form) and
any and all amendments (including post-effective amendments) thereto, with any
and all exhibits and any and all other documents required to be filed with
respect thereto or in connection therewith, relating to the registration under
the Securities Act of 1933 of Common Stock of the Corporation to be issued in
the merger between Hibernia National Bank (the "Bank") and American Bank
("American Bank") wherein the Corporation agrees to exchange shares of its
common stock for all of the outstanding shares of common stock of American Bank
and merge American Bank into the Bank, authorized by resolutions adopted by the
Board of Directors on September 27, 1994, and (b) with the securities agencies
or officials of various jurisdictions, all applications, qualifications,
registrations or exemptions relating to such offering under the laws of any such
jurisdiction, including any amendments thereto or other documents required to be
filed with respect thereto or in connection therewith, granting unto said agents
and attorneys, and each of them, full power and authority to do and perform each
and every act and thing requisite and necessary to be done in and about the
premises in order to effectuate the same as fully to all intents and purposes as
the undersigned might or could do if personally present, and the undersigned
hereby ratifies and confirms all that said agents and attorneys-in-fact, or any
of them may lawfully do or cause to be done by virtue hereof.
IN WITNESS WHEREOF, the undersigned has hereunto set his hand on this 27th
day of September, 1994.
/S/ ROBERT W. CLOSE
-------------------
Robert W. Close
Treasurer and Chief Financial Officer
HIBERNIA CORPORATION
23
