As filed with the Securities and Exchange Commission on April 4,
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)
LOUISIANA 72-0724532
(State or other jurisdiction of (I.R.S. Employer
incorporation or organization) Identification No.)
______________________________
Hibernia Corporation
313 Carondelet Street
New Orleans, Louisiana 70130
(504) 586-5552
(Address, including zip code, and telephone number, including
area code, of Registrant's principal executive offices)
_______________________________
Gary L. Ryan, Esq.
Vice President and Associate Counsel
Hibernia Corporation
225 Baronne Street, 11th Floor
New Orleans, Louisiana 70112
(504) 586-5560
(Name, address, including zip code, and telephone number,
including area code, of agent for service)
Copies to:
Patricia C. Meringer, Esq.
Associate Counsel and Secretary
Hibernia Corporation
225 Baronne Street, 11th Floor
New Orleans, Louisiana 70112
(504) 586-2486
Linda M. Crouch, Esq.
Heiskell, Donelson, Bearman, Adams, Williams & Caldwell
20th Floor - First Tennessee Bldg.
165 Madison Ave.
Memphis, TN 38103
___________________________________
Approximate date of commencement of proposed sale to the
public: As soon as practicable after the effective date of this
Registration Statement.
If the only securities being registered on this Form are being
offered in connection with the formation of a holding company and
there is compliance with General Instruction G, check the following
box. [ ]
CALCULATION OF REGISTRATION FEE
_________________________________________________________________
Title of each Amount Proposed Proposed Amount of
class of to be maximum maximum registration
securities to registered offering offering fee
be registered (1) price price
per share
(2)
_________________________________________________________________
Class A
Common Stock,
no par value 2,796,748 Shares $7.6875 $21,500,000 $7,414.00
_________________________________________________________________
(1) Based upon the fair market value of the Registrant's Common
Stock on March 29, 1994, divided into $21.5 million (the aggregate
purchase price for the outstanding Common Stock of Bastrop National
Bank).
(2) Estimated solely for the purpose of calculating the
registration fee in accordance with Rule 457 under the Securities
Act of 1933.
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 this Registration Statement shall
become effective on such date as the Commission, acting pursuant to
said Section 8(a), may determine.
Subject to Completion Dated March __, 1994
TABLE OF CONTENTS
Page
INTRODUCTION . . . . . . . . . . . . . . . . . . . . .
AVAILABLE INFORMATION. . . . . . . . . . . . . . . . .
INCORPORATION OF CERTAIN DOCUMENTS BY REFERENCE. . . .
THE PARTIES TO THE MERGER. . . . . . . . . . . . . . .
SUMMARY. . . . . . . . . . . . . . . . . . . . . . . .
MEETING INFORMATION. . . . . . . . . . . . . . . . . .
Date, Place and Time . . . . . . . . . . . . . .
Record Date; Voting Rights . . . . . . . . . . .
Voting and Revocation of Proxies . . . . . . . .
Solicitation of Proxies . . . . . . . . . . . . .
PRO FORMA FINANCIAL INFORMATION. . . . . . . . . . . .
PROPOSED MERGER. . . . . . . . . . . . . . . . . . . .
Background of and Reasons for Merger. . . . . . .
Terms of the Merger . . . . . . . . . . . . . . .
Opinion of Investment 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. . . . . . . . . . .
Management and Operations After the Merger. . . .
Differences in Rights of Shareholders . . . . . .
Certain Federal Income Tax Consequences . . . . .
Resale of Hibernia Common Stock . . . . . . . . .
Rights of Dissenting Shareholders . . . . . . . .
Dividend Reinvestment Plan. . . . . . . . . . . .
Accounting Treatment. . . . . . . . . . . . . . .
CERTAIN REGULATORY CONSIDERATIONS. . . . . . . . . . .
CERTAIN INFORMATION RELATING TO BASTROP. . . . . . . .
History, Business and Properties. . . . . . . . .
Competition . . . . . . . . . . . . . . . . . . .
Legal Proceedings . . . . . . . . . . . . . . . .
Common Stock Price and Dividends. . . . . . . . .
EXPERTS. . . . . . . . . . . . . . . . . . . . . . . .
LEGAL OPINION. . . . . . . . . . . . . . . . . . . . .
BASTROP FINANCIAL INFORMATION. . . . . . . . . . . . .
APPENDIX A -- AGREEMENT AND PLAN OF MERGER
APPENDIX B -- OPINION OF MORGAN, KEEGAN & COMPANY, INC.
APPENDIX C -- SELECTED PROVISIONS OF FEDERAL LAW RELATING TO
RIGHTS OF DISSENTING SHAREHOLDERS
APPENDIX D -- OPINION OF ERNST & YOUNG REGARDING CERTAIN
TAX MATTERS
HIBERNIA CORPORATION
Cross Reference Sheet Pursuant to Item 501(b) of Regulation S-K
Item of Form S-4 Location or Caption in
Proxy Statement
(Prospectus)
1. Forepart of Registration Statement Introduction
and Outside Front Cover Page of
Prospectus
2. Inside Front and Outside Back Table of Contents;
Cover Pages of Prospectus Available Information
3. Risk Factors, Ratio of Earnings Introduction; the Parties
To Fixed Charges and Other to the Merger; Summary
Information
4. Terms of the Transaction Introduction; Summary;
Proposed Merger
5. Pro Forma Financial Pro Forma Financial
Information Information
6. Material Contacts with the Proposed Merger
Company Being Acquired
7. Additional Information Required Not Applicable
for Reoffering by Persons and
Parties Deemed to be Underwriters
8. Interests of Named Experts and Validity of Shares; Experts
Counsel
9. Disclosure of Commission Position 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
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 the
Companies Other Than S-2 or Merger; Certain Information
S-3 Companies Concerning Bastrop
18. Information if Proxies, Introduction; Summary;
Consents or Authorizations Meeting Information;
are to be Solicited Proposed Merger;
Certain Information
Concerning Bastrop;
Relationship with
Independent Auditors
19. Information if Proxies, Not Applicable
Consent, Authorizations are not
to be Solicited or in an Exchange
Offer
____________ , 1994
Dear Bastrop National Bank Shareholder:
You are cordially invited to attend a Special Meeting of
Shareholders of Bastrop National Bank ("Bastrop") to be held to be
held at the main office of the Company, 101 S. Franklin Street,
Bastrop, Louisiana on _____________, 1994 at 10:00 a.m. CST.
At this meeting, you will have an opportunity to consider and
vote on the terms of an Agreement and Plan of Merger (the
"Agreement"), that provides for Bastrop National Bank to merge with
and into Hibernia National Bank (the "Merger"), with Hibernia
National Bank surviving the Merger.
The Agreement generally provides for a tax-free exchange in
which Bastrop shareholders will receive shares of Hibernia
Corporation common stock in exchange for their shares of Bastrop
common stock.
The proposed Merger has been unanimously approved by the
Boards of Directors of Hibernia Corporation, Hibernia National Bank
and Bastrop.
The enclosed Notice of Special Meeting of Shareholders and
Proxy Statement-Prospectus explain the Merger and provide specific
information relative to the Special Meeting. Please carefully read
these materials and thoughtfully consider the information contained
in them. Your vote is of great importance, as the approval of
Bastrop shareholders is required to consummate the Merger.
Whether or not you plan to attend the Special Meeting, you are
urged to complete, date, sign and promptly return the enclosed
proxy card to assure that your shares will be voted at the Special
Meeting.
The Merger is an important step for Bastrop and its
shareholders. The Board of Directors unanimously recommends that
you vote FOR the Merger.
Sincerely,
Richard W. Revels
Chairman of the Board
BASTROP NATIONAL BANK
NOTICE OF SPECIAL MEETING OF SHAREHOLDERS TO BE HELD __________,
1994
Notice is hereby given that a Special Meeting of Shareholders
of Bastrop National Bank ("Bastrop") has been called by the Board
of Directors and will be held at the main office of Bastrop, 101 S.
Franklin Street, Bastrop Louisiana on _________, ___________, 1994
at 10:00 a.m. CST, for the following purposes:
1. To consider and vote upon a proposal to approve an
Agreement and Plan of Merger dated as of November 4, 1993, (the
"Agreement"), by and among Hibernia Corporation ("Hibernia"),
Hibernia National Bank ("HNB") and Bastrop, a copy of which is
attached as Appendix A to the Accompanying Proxy Statement-
Prospectus. The Agreement provides that Bastrop will merge with
and into HNB, a wholly-owned subsidiary of Hibernia, all as more
fully described in the accompanying Proxy Statement-Prospectus.
2. To transact such other business as may properly come
before the meeting or any adjournments or postponements thereof.
The Board of Directors is not aware of any other business to
come before the meeting.
Whether or not you plan to attend, please complete, date and
sign the enclosed proxy card and return it at once in the stamped
return envelope in order to insure that your shares will be
represented at the meeting. If you attend in person, the proxy can
be disregarded, if you wish, and you may vote your own shares.
Only shareholders of record at the close of business on
____________, 1994 will be entitled to receive notice of and to
vote at the meeting and any adjournments or postponements thereof.
By Order of the Board of Directors,
Secretary
Bastrop, Louisiana
Dated: ___________, 1994
THE BOARD OF DIRECTORS OF BASTROP NATIONAL BANK UNANIMOUSLY
RECOMMENDS THAT THE HOLDERS OF ITS COMMON STOCK VOTE TO APPROVE THE
AGREEMENT.
PROXY STATEMENT
BASTROP NATIONAL BANK
Special Meeting to be held on [date], 1994
PROSPECTUS
HIBERNIA CORPORATION
_______ Shares of Class A Common Stock
This Proxy Statement-Prospectus is being furnished to the
holders of common stock, par value $1.00 per share (the "Bastrop
Common Stock") of Bastrop National Bank ("Bastrop"), a national
banking association, in connection with the solicitation of proxies
by the Bastrop Board of Directors (the "Bastrop Board") for use at
the Special Meeting of Bastrop shareholders to be held at 10:00
a.m. CST on [date], 1994, at the main office of Bastrop, 101 S.
Franklin Street, Bastrop, Louisiana, and at any adjournments or
postponements thereof (the "Special Meeting").
At the Special Meeting, the shareholders of record of Bastrop
Common Stock as of the close of business on [date], 1994 (the
"Record Date") will consider and vote upon a proposal to approve
the Agreement and Plan of Merger dated as of November 4, 1993 (the
"Merger Agreement") between and among Hibernia Corporation
("Hibernia"), a Louisiana corporation registered as a bank holding
company under the Bank Holding Company Act of 1956, as amended,
Hibernia National Bank ("HNB"), a national banking association and
wholly-owned subsidiary of Hibernia and Bastrop, pursuant to which,
among other things, Bastrop will merge with and into HNB with HNB
surviving the merger (the "Merger"). Upon consummation of the
Merger, each outstanding share of Bastrop Common Stock will be
converted into the right to receive shares of Class A common stock,
no par value, of Hibernia ("Hibernia Common Stock") as described
herein. For a description of the Merger Agreement, which is
included herein in its entirety as Appendix A to this Proxy
Statement-Prospectus, see "The Merger."
This Proxy Statement-Prospectus also constitutes a prospectus
of Hibernia with respect to the Hibernia Common Stock to be issued
to the shareholders of Bastrop pursuant to the terms of the Merger.
The number of shares of Hibernia Common Stock to be issued in the
Merger will be determined in accordance with the conversion formula
set forth in the Merger Agreement for the conversion of shares of
Bastrop Common Stock into shares of Hibernia Common Stock. See
"The Merger -- Terms of the Merger."
The outstanding shares of Hibernia Common Stock are, and the
shares offered hereby will be, listed on the New York Stock
Exchange, Inc. ("NYSE"). The last reported sale price of Hibernia
Common Stock on the NYSE on [date], 1994 was $___ per share.
All information contained in this Proxy Statement-Prospectus
relating to Hibernia and its subsidiaries has been supplied by
Hibernia and all information relating to Bastrop has been supplied
by Bastrop. This Proxy Statement-Prospectus and the accompanying
proxy card are first being mailed to shareholders of Bastrop on or
about [date], 1994.
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.
THESE SECURITIES HAVE NOT BEEN APPROVED OR DISAPPROVED BY THE
SECURITIES AND EXCHANGE COMMISSION OR ANY STATES 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 date of this Proxy Statement-Prospectus is [date], 1994.
AVAILABLE INFORMATION
Hibernia Corporation is subject to the informational
requirements of the Securities Exchange Act of 1934, as amended
(the "Exchange Act"), and in accordance therewith files reports,
proxy statements and other information with the Securities and
Exchange Commission (the "Commission"). Such reports, proxy
statements and other information can be inspected and copied at the
public reference facilities of the Commission at Room 1024, 450
Fifth Street, N.W., Washington, D.C. 20549, and at the Commission's
Regional Offices located at 75 Park Place, 14th Floor, New York,
New York 10007 and Northwestern Atrium Center, 500 West Madison
Street, Suite 1400, Chicago, Illinois 60661. Copies of such
materials can be obtained from the Public Reference Section of the
Commission at 450 Fifth Street, N.W., Washington, D.C. 20549, at
prescribed rates. In addition, reports, proxy statements and other
information concerning Hibernia may be inspected at the offices of
the New York Stock Exchange, Inc. (the "NYSE"), 20 Broad Street,
New York, New York 10005, on which the shares of Common Stock are
listed.
Hibernia has filed with the Commission a registration
statement on Form S-4 (together with all amendments and exhibits
thereto, the "Registration Statement") under the Securities Act of
1933, as amended (the "Securities Act") with respect to the
Hibernia Common Stock offered hereby. This Prospectus does not
contain all of the information set forth in the Registration
Statement. For further information with respect to Hibernia and
the Hibernia Common Stock offered hereby, reference is hereby made
to the Registration Statement. Statements contained in this
Prospectus concerning the provisions of certain documents are not
necessarily complete and, in each instance, reference is made to
the copy of the document filed as an exhibit to the Registration
Statement, each such statement being qualified in all respects by
such reference. Copies of all or any part of the Registration
Statement, including exhibits thereto, may be obtained, upon
payment of the prescribed fees, at the offices of the Commission
and the NYSE, as set forth above.
INCORPORATION OF CERTAIN DOCUMENTS BY REFERENCE
Incorporated by reference in this Prospectus are the following
documents filed by Hibernia Corporation with the Commission
pursuant to the Exchange Act: Hibernia's (1) Annual Report on Form
10-K for the year ended December 31, 1993, (2) definitive Proxy
Statement dated March __, 1994 relating to its 1994 Annual Meeting
of Shareholders held on April 26, 1994, except the information
contained under the heading(s) "Executive Compensation -- Report of
the Executive Compensation Committee" and "-- Stock Performance
Graph"; and (4) a Current Report on Form 8-K dated January 20,
1994.
All documents subsequently filed by Hibernia with the
Commission pursuant to Sections 13(a), 13(c), 14 or 15(d) of the
Exchange Act after the date of this Proxy Statement-Prospectus and
prior to the Special Meeting shall be deemed to be incorporated by
reference in this Prospectus and to be a part hereof from the date
such documents are filed; provided, however, that the information
disclosed in the proxy statement of Hibernia under the heading
"Executive Compensation -- Report of the Executive Compensation
Committee" and "-- Stock Performance Graph" is hereby expressly
excluded from such incorporation by reference. Any statement
contained in a document incorporated or deemed to be incorporated
by reference herein modifies or supersedes such statement. Any
statement so modified or superseded shall not be deemed, except as
so modified or superseded, to constitute a part of this Prospectus.
Hibernia will provide, without charge, to each person to whom
this Prospectus is delivered, on the written or oral request of any
such person, a copy of any or all of the information incorporated
herein by reference other than exhibits to such information (unless
such exhibits are specifically incorporated by reference into such
information). Written or oral requests should be directed to
Hibernia Corporation, 313 Carondelet Street, New Orleans, Louisiana
70130, Attention: Assistant Corporate Secretary, Telephone (504)
587-3411.
No person is authorized to give any information or to make any
representations other than those contained herein and, if given or
made, such information or representations may not be relied upon as
having been authorized. This document does not constitute an offer
or solicitation by anyone in any jurisdiction in which such offer
or solicitation is not authorized or in which the person making
such offer or solicitation is not qualified to do so or to any
person to whom it is unlawful to make such offer or solicitation.
Neither the delivery of this document nor any distribution of
securities made hereunder shall under any circumstances create an
implication that there has been no change in the affairs of
Hibernia or Bastrop since the date hereof or that the information
herein is correct as of any time subsequent to the date hereof.
___________________
SUMMARY
This summary is necessarily general and abbreviated and has
been prepared to assist shareholders of the Company in their
review of this Proxy Statement. This summary is not intended to be
a complete explanation of the matters covered in this Proxy
Statement and is qualified in its entirety by reference to the more
detailed information contained elsewhere in this Proxy Statement,
the Appendices hereto and the documents incorporated herein by
reference, all of which shareholders are urged to read carefully
prior to the Special Meeting.
From time to time, Hibernia investigates and holds discussions
and negotiations in connection with possible transactions with
other banks and financial institutions. Hibernia has executed
definitive merger agreements with three institutions in addition to
Bastrop as of the date of this Proxy Statement-Prospectus. Each of
the transactions is subject to various conditions, including
applicable regulatory approvals, and are described further herein
under "PRO FORMA FINANCIAL INFORMATION." At the date hereof,
Hibernia has not entered into any agreements or understandings with
respect to any significant transactions of the type described
except those described in documents incorporated herein by
reference or described under "PRO FORMA FINANCIAL INFORMATION"
below. See "AVAILABLE INFORMATION." 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, the terms of such transactions
would be publicly disclosed by Hibernia, and, if required, such
transactions would be subject to regulatory approval and the
approval of shareholders.
The Parties to the Merger
Hibernia. Hibernia is a Louisiana corporation registered
under the Bank Holding Company Act of 1956, as amended ("BHCA").
As of December 31, 1993, Hibernia had total consolidated assets of
approximately $4.6 billion and shareholders' equity of
approximately $428 million. As of December 31, 1993, Hibernia was
ranked, on the basis of total assets, as the 90th largest bank
holding company in the United States and the second largest
headquartered in Louisiana.
As of December 31, 1993 Hibernia had a single banking
subsidiary, Hibernia National Bank ("HNB") that provides retail and
commercial banking services through 101 branches throughout
Louisiana.
Hibernia and HNB are parties to certain litigation that arises
in the ordinary course of their business. In addition, Hibernia
and HNB are defendants in a class action lawsuit, Feinberg v.
Hibernia Corporation, et. al., which alleges that the market value
of Hibernia's Common Stock was artificially inflated during the
class period by reason of false and misleading news releases and
public statements and seeks to recover unspecified damages for the
losses allegedly sustained plus interest, attorneys' fees and
costs. An amended complaint filed in 1992 also names HNB, certain
individual directors, former directors, former officers and
Hibernia's insurance carriers as defendants. This suit is in the
discovery stage. In the opinion of management of Hibernia, the
allegations in this case are without merit, and Hibernia intends to
contest the suit vigorously.
The principal executive offices of Hibernia are located at 313
Carondelet Street, New Orleans, Louisiana 70130, and its telephone
number is (504) 587-5532. For additional information concerning
the business and financial condition of Hibernia, reference should
be made to the Hibernia reports incorporated herein by reference.
See "AVAILABLE INFORMATION."
SELECTED FINANCIAL DATA
The following table sets forth certain historical consolidated
information for Hibernia Corporation. This information is based on
historical financial statements and related notes of Hibernia
Corporation incorporated by reference into this Proxy Statement -
Prospectus. Pro forma financial information giving effect to the
merger and other probable mergers is included in the "PRO FORMA
FINANCIAL INFORMATION".
HIBERNIA CORPORATION
SELECTED FINANCIAL INFORMATION
<TABLE>
<CAPTION>
Year Ended December 31
Unaudited ($ in thousands, except per share amounts) 1993 1992 1991 1990 1989
<S> <C> <C> <C> <C> <C>
Net interest income $195,705 $197,278 $234,599 $261,318 $214,530
Net income (loss) from continuing operations 47,950 (7,915) (143,997) (10,995) 61,644
Per share:
Net income (loss) from continuing operations 0.58 (0.27) (5.12) (0.40) 2.30
Cash dividends 0.03 - .15 .90 .91
Book value 5.12 4.48 7.05 13.16 14.45
SELECTED PERIOD-END BALANCES
Debt - 8,269 94,534 104,367 55,406
Total assets 4,795,583 4,734,038 6,018,429 7,357,850 6,698,851
</TABLE>
Bastrop. Bastrop is a national banking association formed under
the laws of the United States and headquartered in Bastrop,
Louisiana. As of December 31, 1993, Bastrop had total assets of
$131 million and shareholders' equity of $14.8 million. Bastrop
has four offices in Morehouse Parish, Louisiana. Bastrop engages
in a wide range of retail and commercial banking services,
including taking deposits, extending secured and unsecured credit.
On a pro forma basis, if Bastrop and Hibernia were combined,
Bastrop's assets as of December 31, 1993 would represent
approximately 2.7% of the combined assets and Bastrop's
shareholders' equity would represent approximately 3.6% of the
combined shareholders' equity. In addition, Bastrop's deposits as
of that date would represent approximately 2.7% of the combined
deposits of the two institutions as of year-end 1993.
The principal executive offices of Bastrop are located at 101
S. Franklin Street, Bastrop, Louisiana. Its telephone number is
(318) 281-5911. For additional information concerning the business
of Bastrop and its financial condition, see "CERTAIN INFORMATION
RELATING TO BASTROP" AND "BASTROP FINANCIAL INFORMATION."
SELECTED FINANCIAL DATA
The following table sets forth certain historical consolidated
information for Bastrop National Bank. This information is based
on historical financial statements and related notes of Bastrop
National Bank contained elsewhere in this Proxy Statement -
Prospectus. Pro forma financial information giving effect to the
merger and other probable mergers is included in the "PRO FORMA
FINANCIAL INFORMATION".
BASTROP NATIONAL BANK
SELECTED FINANCIAL INFORMATION
<TABLE>
<CAPTION>
Year Ended December 31
Unaudited ($ in thousands, except per share amounts) 1993 1992 1991 1990 1989
<S> <C> <C> <C> <C> <C>
Net interest income $4,939 $5,179 $4,175 $3,990 $3,838
Net income from continuing operations 2,050 2,179 1,561 1,394 1,373
Per share:
Net income from continuing operations 6.83 7.26 5.20 4.65 4.58
Cash dividends 2.00 11.00 2.50 2.50 1.50
Book value 49.20 44.37 48.10 45.40 43.25
SELECTED PERIOD-END BALANCES
Debt - - - - -
Total assets 130,522 127,857 121,583 114,110 103,015
</TABLE>
<TABLE>
<CAPTION>
BASTROP NATIONAL BANK
QUARTERLY INCOME RESULTS
Unaudited ($ in thousands, except per share amounts)
1993
I II III IV
<S> <C> <C> <C> <C>
Interest income $2,165 $2,173 $2,029 $1,958
Net interest income 1,302 1,319 1,184 1,134
Net income 559 546 519 426
Net income per share $1.86 $1.82 $1.73 $1.42
1992
I II III IV
Interest income $2,287 $2,265 $2,216 $2,195
Net interest income 1,209 1,292 1,355 1,349
Net income 499 569 622 489
Net income per share $1.66 $1.90 $2.07 $1.63
</TABLE>
COMPARATIVE PER SHARE INFORMATION
(Unaudited)
The following table sets forth for Hibernia Corporation common
stock and Bastrop National Bank common stock certain historical,
unaudited pro forma combined and unaudited pro forma equivalent per
share financial information. This table is based on and should be
read in conjunction with the historical financial statements and
related notes of Hibernia Corporation, incorporated by reference to
this Proxy Statement - Prospectus, and Bastrop National Bank,
contained elsewhere in this Proxy Statement - Prospectus. The pro
forma information, which reflects the merger using the pooling of
interests method of accounting, is presented for informational
purposes only and should not be construed as indicative of the
actual operations that would have occurred had the merger been
consummated at the beginning of the periods indicated below or
which may occur after the merger is consummated. The pro forma
information gives effect to the issuance of 2,866,667 shares of
Hibernia Corporation common stock for all the outstanding shares of
Bastrop National Bank.
<TABLE>
<CAPTION>
HIBERNIA CORPORATION AND BASTROP NATIONAL BANK
COMPARATIVE PER SHARE INFORMATION
Unaudited
HISTORICAL BASTROP
PRO FORMA NATIONAL
BASTROP HIBERNIA BANK
HIBERNIA NATIONAL CORPORATION PRO FORMA
CORPORATION BANK (WITH BASTROP) EQUIVALENT
(1) (2)
Per Common Share:
<S> <C> <C> <C> <C>
Net income (loss) from continuing
operations
For the year ended December 31,
1993 $0.58 $6.83 $0.58 $5.54
1992 (0.27) 7.26 (0.18) (1.72)
1991 (5.12) 5.20 (4.60) (43.93)
Cash dividends
For the year ended December 31,
1993 $0.03 $2.00 $0.03 $0.29
1992 - 11.00 - -
1991 0.15 2.50 0.15 1.43
Book Value
For the year ended December 31,
1993 $5.12 $49.20 $5.14 $49.09
(1) Refer to Pro Forma Financial Information
(2) Pro forma equivalent amounts are computed by multiplying the pro forma combined amount by the
Bastrop National Bank exchange ratio of 9.55.
</TABLE>
The Special Meeting
The Special Meeting of the shareholders of Bastrop to consider
and vote upon the Agreement will be held on [date], 1994 at 10:00
a.m., C.S.T., at the main office of Bastrop National Bank, 101 S.
Franklin Street, Bastrop, Louisiana. Only holders of record of
Common Stock of Bastrop at the close of business on [record date]
will be entitled to notice of and to vote at the Special Meeting.
At such date, 300,000 shares of Bastrop Common Stock were
outstanding and entitled to vote on the Merger. For additional
information with respect to the Special Meeting and the voting
rights of shareholders of Bastrop, see "MEETING INFORMATION."
The Proposed Merger
In accordance with the terms of the Agreement, Bastrop will be
merged with and into HNB, whereupon the separate existence of
Bastrop will cease. The Merger will become effective at the date
and time that the Merger becomes effective as of the date and time
of issuance by the Office of the Comptroller of the Currency
("OCC") of a certificate of merger relating to the Merger (the
"Effective Date"). Unless otherwise mutually agreed upon by
Hibernia and Bastrop, the Effective Date will occur on the date
that falls 30 days after the date of the order of the OCC approving
the Merger and (ii) the date that falls 5 days after the Special
Meeting; or such later date within 60 days of the Special Meeting
Date as may be agreed upon by the parties. On the Effective Date,
each outstanding share of Bastrop Common Stock, other than shares
held by shareholders who exercise and perfect dissenters' rights in
accordance with applicable law, will be converted into a number of
shares determined by the application of a formula based upon the
average market price of Hibernia Common Stock for the twenty
trading days preceding the last trading day immediately prior to
the Effective Date. The aggregate purchase price to be paid for
all of the outstanding Bastrop Common Stock is $21.5 million. If
the fair market value of Hibernia Common Stock is $7.50 per share,
each Bastrop shareholder would receive 9.55 shares of Hibernia
Common Stock for each share of Bastrop Common Stock held by him.
See "PROPOSED MERGER --Terms of the Merger."
Management and Operations After the Merger
After the Effective Date, the offices of Bastrop will operate
as branch banking offices of HNB. All the employees of Bastrop
will become employees of HNB on the Effective Date, and the
directors of Bastrop will resign their positions as directors. See
"PROPOSED MERGER -- Management and Operations After the Merger."
Recommendation of the Board of Directors
The Board of Directors of Bastrop (the "Bastrop Board") has
unanimously approved the Agreement, believes that the Merger is in
the best interests of the shareholders and recommends that the
shareholders vote FOR the Merger. Having received the advice of
its financial advisor, Morgan, Keegan & Company, Inc. ("Morgan
Keegan"), the Bastrop Board further believes that the basis
specified in the Agreement for the exchange of Bastrop shares for
shares of Hibernia is a fair basis for effecting the Merger and
will afford Bastrop shareholders the opportunity to continue as
equity participants with a more liquid investment in a strong
statewide banking organization. The Bastrop Board also believes
that the Merger will provide expanded products and service
capabilities to the customers of Bastrop and will enable the
combined entity to compete more effectively with other commercial
banks and financial institutions in the region. See "PROPOSED
MERGER --Background of and Reasons for the Merger."
Basis for the Terms of the Merger
A number of factors were considered by the Bastrop Board in
approving the terms of the Merger, including, without limitation,
information concerning the financial condition, results of
operations and prospects of Hibernia, HNB, and Bastrop; the ability
of the combined entity to compete in the relevant banking markets;
the market price of Hibernia Common Stock; the absence of an active
trading market for the Bastrop Common Stock; the anticipated tax-
free nature of the Merger to shareholders for federal income tax
purposes; the financial terms of other business combinations in the
banking industry and certain non-monetary factors. See "PROPOSED
MERGER -- Background of and Reasons for the Merger."
Advice and Opinion of Investment Advisor
Morgan Keegan, Bastrop's financial advisor, has rendered both
oral and written opinions that the terms of the Merger are fair,
from a financial point of view, to Bastrop and its shareholders.
A copy of the opinion of Morgan Keegan is attached hereto as
Appendix B and should be read in its entirety. See "PROPOSED
MERGER--Opinion of Financial Advisor" for further information
regarding, among other things, the selection of such firm and its
compensation in connection with the Merger.
Vote Required
Approval of the Merger requires the affirmative vote of the
holders of two-thirds of the outstanding shares of Bastrop Common
Stock. Directors and executive officers of Bastrop and the
affiliates of such persons have voting power with respect to 92,159
shares of Bastrop Common Stock, representing 30.72% of the Bastrop
Common Stock outstanding as of [date] , 1994. The directors of
Bastrop have agreed to vote their stock in favor of the Merger,
unless they are legally required to abstain from voting or to vote
against the Merger. See "MEETING INFORMATION -- Vote Required" and
"CERTAIN INFORMATION RELATING TO BASTROP -- Ownership by Directors
and Executive Officers of Bastrop."
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 Bastrop and by the Office of the Comptroller of the
Currency ("OCC"). Applicable law provides that the Merger may not
be consummated until at least 30, but no more than 180, days after
approval of the OCC is obtained. Applications for the requisite
regulatory approval have been filed. See "PROPOSED MERGER--
Representations and Warranties; Conditions to the Merger; 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 Bastrop's shareholders may change the ratio of
Hibernia Common Stock to Bastrop Common Stock to be issued in the
Merger (the "Exchange Ratio"). Any material change to the
Agreement after the date hereof would require a resolicitation of
Bastrop shareholders and a subsequent shareholder vote on the
Agreement. In addition, the Agreement may be terminated, either
before or after shareholder approval, under certain circumstances.
See "PROPOSED MERGER -- Representations and Warranties; Conditions
to the Merger; Waiver" and "-- Effective Date of the Merger;
Termination."
Certain Material Income Tax Consequences
It is a condition to consummation of the Merger that the
parties receive an opinion of counsel or a public accounting firm
to the effect that the Merger when consummated in accordance with
the terms of the Agreement will constitute a reorganization within
the meaning of Section 368 of the Internal Revenue Code of 1986, as
amended (the "Code"), and that the exchange of Bastrop Common Stock
for Hibernia Common Stock will not give rise to the recognition of
gain or loss for federal income tax purposes to Bastrop's
shareholders with respect to such exchange. See "PROPOSED MERGER -
- -Certain Federal Income Tax Consequences."
The parties have received the opinion of Ernst & Young,
certified public accountants, to the effect that the Merger, if
consummated in accordance with its terms as set forth in the Merger
Agreement and certain other representations made by the parties,
will constitute a reorganization within the meaning of Section 368
of the Code. The full text of the opinion is included herein as
Appendix D.
Because of the complexities of the federal income tax laws and
because the tax consequences may vary depending upon a holder's
individual circumstances or tax status, it is recommended that each
shareholder of Bastrop consult his or her tax advisor concerning
the federal (and any applicable state, local or other) tax
consequences of the Merger to him or her.
Dissenters' Rights
Each holder of Bastrop Common Stock who objects to the Merger
is entitled to the rights and remedies of dissenting shareholders
provided in 12 U.S.C. 215a, a copy of which is attached hereto as
Appendix C. However, if dissenters' rights are exercised and
perfected with respect to 10% or more of the outstanding shares of
Bastrop Common Stock, Hibernia may abandon the Merger. It is
expected that Hibernia would abandon the Merger in that case. See
"PROPOSED MERGER -- Rights of Dissenting Shareholders" and " --
Accounting Treatment."
Differences in Shareholders' Rights
Upon completion of the Merger, shareholders of Bastrop, 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 Bastrop. See "PROPOSED
MERGER -- Certain Differences in Shareholders' Rights."
Accounting Treatment
The parties intend the Merger to be treated as a pooling of
interests for financial accounting purposes. If, among other
things, holders of more than 10% of the outstanding shares of
Bastrop Common Stock exercise and perfect dissenters' rights, the
Merger will not qualify for the pooling of interests method of
accounting, and Hibernia will not be obligated to effect the
Merger. See "PROPOSED MERGER -- Accounting Treatment."
PRO FORMA FINANCIAL INFORMATION
The following pro forma financial statements reflect
Hibernia's pending mergers as described in its public reports and
press releases, giving effect to the assumptions and adjustments
described in the accompanying notes.
The information in the column titled "Hibernia" on the Pro
Forma Combined Balance Sheet, pro forma statements of income and
audited statements of income are summarized from Hibernia's Annual
Report on Form 10-K for the year ended December 31, 1993. The
information contained in the columns titled "Bastrop", "First
Commercial", "First Bancorp" and "First Continental" are based on
December 31, 1993, 1992 and 1991 financial statements of those
entities. The pro forma financial statements do not purport to be
indicative of the results that actually would have occurred if the
pending transactions had occurred on the dates indicated or that
may be obtained in the future.
On September 28, 1993, Hibernia signed an agreement and plan
of merger with Commercial Bancshares, Inc. ("Commercial"), a bank
holding company headquartered in Franklin, Louisiana, which owns
First Commercial Bank, headquartered in Abbeville, Louisiana. At
December 31, 1993, Commercial reported consolidated assets of
[$164] million and operated eight banking branches in the Acadiana
region of Louisiana. Shareholders of Commercial will receive
Hibernia Common Stock valued at $18.7 million in exchange for their
shares of Commercial, and the transaction will be accounted for as
a pooling of interests.
On November 4, 1993, Hibernia announced that it had reached an
agreement to merge with First Bancorp of Louisiana, Inc. ("First
Bancorp"). First Bancorp is a bank holding company headquartered
in Monroe, Louisiana that owns First National Bank of West Monroe
and Southern National Bank of Tallulah. As of December 31, 1993,
First Bancorp had consolidated assets of approximately [$225]
million and operated seven banking branches in Monroe and Tallulah.
Shareholders of First Bancorp will receive Hibernia Common Stock
valued at $36 million in exchange for their common stock of First
Bancorp, and the transaction will be accounted for as a pooling of
interests.
On December 6, 1993, Hibernia announced that it had reached an
agreement to merge with First Continental Bancshares, Inc. ("First
Continental"), a Louisiana bank holding company that owns First
National Bank of Jefferson Parish ("FNJ"). At December 31, 1993,
First Continental reported consolidated assets of [$396] million
and operated eight banking branches in Jefferson Parish, Louisiana.
Common stockholders of First Continental will receive Hibernia
Common Stock valued at approximately $36 million, and certain
other security and debt holders will receive cash and Hibernia
Common Stock, in the merger. This merger will also be accounted
for as a pooling of interests.
The mergers with Commercial, First Bancorp and First
Continental are subject to the satisfaction of certain conditions
similar to those described herein with regard to the Merger. There
can be no assurance that any of such proposed mergers will occur,
or that the timing of the consummation of such mergers will be as
assumed in the Pro Forma Financial Statements.
PRO FORMA COMBINED SELECTED FINANCIAL INFORMATION
(Unaudited)
The following table sets forth certain unaudited pro forma combined
financial information for Hibernia Corporation and Bastrop National
Bank. This table is based on and should be read in conjunction
with the historical financial statements and related notes of
Hibernia Corporation, incorporated by reference to this Proxy
Statement - Prospectus, and Bastrop National Bank, contained
elsewhere in this Proxy Statement - Prospectus. The table also
gives effect to other probable mergers to which Hibernia
Corporation is a party, as discussed in Note C to the pro forma
combined financial statements. These mergers include Commercial
Bancshares, Inc., First Bancorp of Louisiana, Inc. and First
Continental Bancshares, Inc. The pro forma information, which
reflects the mergers using the pooling of interests method of
accounting, is presented for informational purposes only and should
not be construed as indicative of the actual operations that would
have occurred had the mergers been consummated at the beginning of
the periods indicated below or which may occur after the mergers
are consummated. The pro forma information gives effect to the
issuance of 2,866,667 shares of Hibernia Corporation common stock
for all the outstanding shares of Bastrop National Bank and
11,717,079 shares of Hibernia Corporation common stock for all the
outstanding shares of Commercial Bancshares, Inc., First Bancorp of
Louisiana, Inc. and First Continental Bancshares, Inc. in each of
the periods presented.
PRO FORMA HIBERNIA CORPORATION*
PRO FORMA COMBINED SELECTED FINANCIAL INFORMATION
<TABLE>
<CAPTION>
Year Ended December 31
Unaudited ($ in thousands, except per share amounts) 1993 1992 1991
<S> <C> <C> <C>
Net interest income $200,644 $202,457 $238,774
Net income (loss) from continuing operations 50,000 (5,736) (142,436)
Per share:
Net income (loss) from continuing operations 0.58 (0.18) (4.60)
Cash dividends 0.03 - 0.15
Book value 5.14 4.49 6.86
SELECTED PERIOD-END BALANCES
Debt - 8,269 94,534
Total assets 4,927,194 4,861,895 6,140,012
* Includes Hibernia Corporation and Bastrop National Bank
</TABLE>
TOTAL HIBERNIA CORPORATION**
PRO FORMA COMBINED SELECTED FINANCIAL INFORMATION
<TABLE>
<CAPTION>
Year Ended December 31
Unaudited ($ in thousands, except per share amounts) 1993 1992 1991
<S> <C> <C> <C>
Net interest income $234,064 $234,398 $263,348
Net income (loss) from continuing operations 55,391 (1,752) (141,367)
Per share:
Net income (loss) from continuing operations 0.57 (0.04) (3.31)
Cash dividends 0.03 - 0.15
Book value 4.88 4.32 5.32
SELECTED PERIOD-END BALANCES
Debt 4,262 25,710 127,566
Total assets 5,686,883 5,592,710 6,862,752
** Includes Hibernia Corporation, Bastrop National Bank, Commercial Bancshares, Inc.,
First Bancorp of Louisiana, Inc. and First Continental Bancshares, Inc.
</TABLE>
PRO FORMA COMBINED BALANCE SHEET
(Unaudited)
The following unaudited pro forma combined balance sheet combines
the historical balance sheets of Hibernia Corporation and Bastrop
National Bank as if the merger had been effective on December 31,
1993. This unaudited pro forma combined balance sheet should be
read in conjunction with the historical financial statements and
related notes of Hibernia Corporation, incorporated by reference to
this Proxy Statement - Prospectus, and Bastrop National Bank,
contained elsewhere in this Proxy Statement - Prospectus. The
unaudited proforma combined balance sheet also gives effect to
other probable mergers to which Hibernia Corporation is a party, as
discussed in Note C to the pro forma combined financial statements.
These mergers include Commercial Bancshares Inc., First Bancorp of
Louisiana, Inc. and First Continental Bancshares, Inc. and have
been included in the pro forma combined balance sheet as if the
mergers had been effective on December 31, 1993.
HIBERNIA CORPORATION
PRO FORMA COMBINED BALANCE SHEET
December 31, 1993
<TABLE>
<CAPTION>
PRO FORMA
BASTROP PRO HIBERNIA
HIBERNIA NATIONAL FORMA CORPORATION
Unaudited ($ in thousands) CORPORATION BANK ADJ. (WITH BASTROP)
<S> <C> <C> <C> <C>
ASSETS
Cash and due from banks $216,675 $5,494 $222,169
Interest-bearing time deposits in domestic banks - - -
Federal funds sold and securities purchased
under agreements to resell 220,000 10,525 230,525
Securities available for sale 394,640 76,710 $1,089 B 472,439
Securities held to maturity 1,526,231 - 1,526,231
Loans, net of unearned income 2,328,119 35,482 2,363,601
Reserve for possible loan losses (159,143) (384) (159,527)
Loans, net 2,168,976 35,098 2,204,074
Bank premises and equipment 81,291 1,284 82,575
Customers' acceptance liability 11,800 - 11,800
Other assets 175,970 1,411 177,381
TOTAL ASSETS $4,795,583 $130,522 $1,089 $4,927,194
LIABILITIES
Deposits:
Demand, noninterest-bearing $812,693 $16,483 $829,176
Interest-bearing 3,273,342 98,558 3,371,900
Total Deposits 4,086,035 115,041 4,201,076
Federal funds purchased and securities sold under
agreements to repurchase 137,986 - 137,986
Liability on acceptances 11,800 - 11,800
Payables arising from securities transactions
not yet settled 50,875 - 50,875
Other liabilities 80,515 720 81,235
Debt - - -
TOTAL LIABILITIES 4,367,211 115,761 0 4,482,972
SHAREHOLDERS' EQUITY
Preferred Stock - - -
Common Stock 160,535 300 $5,204 A 166,039
Surplus 404,745 1,000 (5,204)A 400,541
Treasury Stock - - -
ESOP commitment - - -
Retained earnings (deficit) (147,160) 13,461 (133,699)
Unrealized gain on securities available for sale 10,252 - 1,089 B 11,341
TOTAL SHAREHOLDERS' EQUITY 428,372 14,761 1,089 444,222
TOTAL LIABILITIES AND SHAREHOLDERS' EQUITY $4,795,583 $130,522 $1,089 $4,927,194
See notes to Pro Forma Combined Financial Statements.
</TABLE>
HIBERNIA CORPORATION
PRO FORMA COMBINED BALANCE SHEET
December 31, 1993
(con't.)
<TABLE>
<CAPTION>
PRO FORMA FIRST FIRST TOTAL
HIBERNIA COMMERCIAL BANCORP CONTINENTAL PRO PRO FORMA
CORPORATION BANCSHARES, OF LOUISIANA, BANCSHARES, FORMA HIBERNIA
Unaudited ($ in thousands) (WITH BASTROP) INC. INC. INC. ADJ. CORPORATION
<S> <C> <C> <C> <C> <C> <C>
ASSETS
Cash and due from banks $222,169 $8,583 $10,963 $13,141 $254,856
Interest-bearing time deposits in domestic banks - 7 1,077 - 1,084
Federal funds sold and securities purchased
under agreements to resell 230,525 2,850 15,775 22,000 ($22,522)E 235,718
(12,910)D
Securities available for sale 472,439 33,270 94,396 95,056 1,984 F 697,145
Securities held to maturity 1,526,231 58,502 - 32,651 (614)E 1,616,770
Loans, net of unearned income 2,363,601 58,916 99,775 223,093 2,745,385
Reserve for possible loan losses (159,527) (1,326) (1,413) (6,590) (168,856)
Loans, net 2,204,074 57,590 98,362 216,503 2,576,529
Bank premises and equipment 82,575 2,936 2,002 6,051 93,564
Customers' acceptance liability 11,800 - - - 11,800
Other assets 177,381 5,019 2,507 14,510 199,417
TOTAL ASSETS $4,927,194 $168,757 $225,082 $399,912 ($34,062) $5,686,883
LIABILITIES
Deposits:
Demand, noninterest-bearing $829,176 $23,084 $33,067 $60,999 $946,326
Interest-bearing 3,371,900 125,809 166,468 284,351 3,948,528
Total Deposits 4,201,076 148,893 199,535 345,350 4,894,854
Federal funds purchased and securities sold under
agreements to repurchase 137,986 - 2,021 13,234 153,241
Liability on acceptances 11,800 - - - 11,800
Payables arising from securities transactions
not yet settled 50,875 - - - 50,875
Other liabilities 81,235 2,426 1,186 12,047 ($4,401)E 92,493
Debt - 3,345 8,752 11,884 (18,435)E 4,262
(800)C
(484)C
TOTAL LIABILITIES 4,482,972 154,664 211,494 382,515 (24,120) 5,207,525
SHAREHOLDERS' EQUITY
Preferred Stock - - - 11,422 (11,422)D -
Common Stock 166,039 629 1,364 2,145 17,678 C 188,536
681 D
Surplus 400,541 591 6,744 2,741 (19,305)C 389,143
(2,169)D
Treasury Stock - (1,154) (1,639) (118) 2,911 C -
ESOP commitment - - (400) - (400)
Retained earnings (deficit) (133,699) 13,968 7,519 400 (300)E (112,112)
Unrealized gain on securities available for sale 11,341 59 - 807 1,984 F 14,191
TOTAL SHAREHOLDERS' EQUITY 444,222 14,093 13,588 17,397 (9,942) 479,358
TOTAL LIABILITIES AND SHAREHOLDERS' EQUITY $4,927,194 $168,757 $225,082 $399,912 ($34,062) $5,686,883
See notes to Pro Forma Combined Financial Statements.
</TABLE>
PRO FORMA COMBINED STATEMENTS OF INCOME
(Unaudited)
The following unaudited pro forma combined statements of income for
the years ended December 31, 1993, 1992, and 1991 combine the
historical statements of income of Hibernia Corporation and Bastrop
National 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 historical financial
statements and related notes of Hibernia Corporation, incorporated
by reference to this Proxy Statement - Prospectus, and Bastrop
National Bank, contained elsewhere in this Proxy Statement -
Prospectus. The cost associated with the merger, estimated to be
approximately $____________ will be accounted for as a current
period expense upon consummation of the merger and has not been
reflected in the pro forma combined statements of income. The
unaudited pro forma combined statements of income also give effect
to other probable mergers to which Hibernia Corporation is a party,
as discussed in Note C to the pro forma combined financial
statements. These mergers include Commercial Bancshares, Inc.,
First Bancorp of Louisiana, Inc. and First Continental Bancshares,
Inc. and have been included in the pro forma combined statements of
income as if the mergers had been effective on January 1, 1991.
HIBERNIA CORPORATION
PRO FORMA COMBINED STATEMENT OF INCOME
Year Ended December 31, 1993
<TABLE>
<CAPTION>
PRO FORMA
BASTROP HIBERNIA
HIBERNIA NATIONAL CORPORATION
Unaudited ($ in thousands, except per share data) CORPORATION BANK (WITH BASTROP)
<S> <C> <C> <C>
Interest Income
Interest and fees on loans $185,378 $3,183 $188,561
Interest on securities:
U.S. government securities and obligations of
U.S. government agencies 105,939 4,312 110,251
Obligations of states and political subdivisions - 630 630
Trading account interest 33 - 33
Interest on time deposits in domestic banks 194 - 194
Interest on federal funds sold and securities
purchased under agreements to resell 8,186 200 8,386
Total Interest Income 299,730 8,325 308,055
Interest Expense
Interest on deposits 100,092 3,378 103,470
Interest on federal funds purchased and
securities sold under agreements to repurchase 3,654 - 3,654
Interest on debt and other 279 8 287
Total Interest Expense 104,025 3,386 107,411
Net Interest Income 195,705 4,939 200,644
Provision for possible loan losses (6,200) 28 (6,172)
Net Interest Income After Provision for
Possible Loan Losses 201,905 4,911 206,816
Noninterest Income
Trust fees 12,692 - 12,692
Service charges on deposits 30,046 513 30,559
Other service, collection and exchange charges 15,768 138 15,906
Gain on settlement of acquired loans 1,308 - 1,308
Other operating income 7,403 47 7,450
Securities gains, net - 51 51
Total Noninterest Income 67,217 749 67,966
Noninterest Expense
Salaries and employee benefits 83,364 1,451 84,815
Occupancy expense, net 20,611 358 20,969
Equipment expense 11,043 93 11,136
Data processing expense 16,504 14 16,518
Foreclosed property expense 2,188 - 2,188
Provision for data processing enhancements 11991 - 11,991
Other operating expense 73,775 915 74,690
Total Noninterest Expense 219,476 2,831 222,307
Income Before Income Taxes and
Cumulative Effect of Accounting Change 49,646 2,829 52,475
Income tax expense 1,696 779 2,475
Income from Continuing Operations $47,950 $2,050 $50,000
Pro Forma Weighted Average Common Shares 83,175,129 2,866,667 86,041,796
Pro Forma Income Per Common Share
from Continuing Operations (H) $0.58 * $0.58
See notes to Pro Forma Combined Financial Statements.
*Historical
</TABLE>
HIBERNIA CORPORATION
PRO FORMA COMBINED STATEMENT OF INCOME
Year Ended December 31, 1993
(cont.)
<TABLE>
<CAPTION>
PRO FORMA FIRST FIRST TOTAL
HIBERNIA COMMERCIAL BANCORP CONTINENTAL PRO PRO FORMA
CORPORATION BANCSHARES, OF LOUISIANA, BANCSHARES, FORMA HIBERNIA
Unaudited ($ in thousands, except per share data) (WITH BASTROP) INC. INC. INC. ADJ. CORPORATION
<S> <C> <C> <C> <C> <C>
Interest Income
Interest and fees on loans $188,561 $5,479 $7,470 $22,636 $224,146
Interest on securities:
U.S. government securities and obligations of
U.S. government agencies 110,251 5,001 4,678 6,890 126,820
Obligations of states and political subdivisions 630 42 537 13 1,222
Trading account interest 33 - - - 33
Interest on time deposits in domestic banks 194 1 100 - 295
Interest on federal funds sold and securities
purchased under agreements to resell 8,386 180 207 446 9,219
Total Interest Income 308,055 10,703 12,992 29,985 361,735
Interest Expense
Interest on deposits 103,470 3,992 4,308 9,230 121,000
Interest on federal funds purchased and
securities sold under agreements to repurchase 3,654 - 59 289 4,002
Interest on debt and other 287 252 377 1,753 2,669
Total Interest Expense 107,411 4,244 4,744 11,272 127,671
Net Interest Income 200,644 6,459 8,248 18,713 234,064
Provision for possible loan losses (6,172) 75 (235) 725 (5,607)
Net Interest Income After Provision for
Possible Loan Losses 206,816 6,384 8,483 17,988 239,671
Noninterest Income
Trust fees 12,692 - 7 611 13,310
Service charges on deposits 30,559 820 803 2,755 34,937
Other service, collection and exchange charges 15,906 176 470 815 17,367
Gain on settlement of acquired loans 1,308 - - - 1,308
Other operating income 7,450 67 136 578 (905)G 7,326
Securities gains, net 51 - 90 24 165
Total Noninterest Income 67,966 1,063 1,506 4,783 (905) 74,413
Noninterest Expense
Salaries and employee benefits 84,815 2,404 3,211 8,087 98,517
Occupancy expense, net 20,969 401 660 727 22,757
Equipment expense 11,136 392 304 745 12,577
Data processing expense 16,518 21 200 755 (741)G 16,753
Foreclosed property expense 2,188 (178) (88) 5,213 7,135
Provision for data processing enhancements 11,991 - - - 11,991
Other operating expense 74,690 1,938 1,966 5,174 (164)G 83,604
Total Noninterest Expense 222,307 4,978 6,253 20,701 (905) 253,334
Income Before Income Taxes and
Cumulative Effect of Accounting Change 52,475 2,469 3,736 2,070 0 60,750
Income tax expense 2,475 802 1,030 1,052 5,359
Income from Continuing Operations $50,000 $1,667 $2,706 $1,018 $0 $55,391
Pro Forma Weighted Average Common Shares 86,041,796 2,493,333 4,800,000 4,423,746 97,758,875
Pro Forma Income Per Common Share
from Continuing Operations (H) $0.58 $0.57
See notes to Pro Forma Combined Financial Statements.
*Historical
</TABLE>
HIBERNIA CORPORATION
PRO FORMA COMBINED STATEMENT OF INCOME
Year Ended December 31, 1992
<TABLE>
<CAPTION>
PRO FORMA
BASTROP HIBERNIA
HIBERNIA NATIONAL CORPORATION
Unaudited ($ in thousands, except per share data) CORPORATION BANK (WITH BASTROP)
<S> <C> <C> <C>
Interest Income
Interest and fees on loans $253,183 $3,410 $256,593
Interest on securities:
U.S. government securities and obligations of
U.S. government agencies 89,131 4,775 93,906
Obligations of states and political subdivisions 3 572 575
Trading account interest 99 - 99
Interest on time deposits in domestic banks 223 2 225
Interest on federal funds sold and securities
purchased under agreements to resell 14,095 178 14,273
Total Interest Income 356,734 8,937 365,671
Interest Expense
Interest on deposits 141,502 3,743 145,245
Interest on federal funds purchased and
securities sold under agreements to repurchase 6,515 4 6,519
Interest on debt and other 11,439 11 11,450
Total Interest Expense 159,456 3,758 163,214
Net Interest Income 197,278 5,179 202,457
Provision for possible loan losses 66,275 40 66,315
Net Interest Income After Provision for
Possible Loan Losses 131,003 5,139 136,142
Noninterest Income
Trust fees 12,263 - 12,263
Service charges on deposits 31,870 481 32,351
Other service, collection and exchange charges 13,928 179 14,107
Gain on settlement of acquired loans 4,151 - 4,151
Loss on planned sale of Texas bank (2,934) - (2,934)
Other operating income 9,972 31 10,003
Securities gains, net 17,190 22 17,212
Total Noninterest Income 86,440 713 87,153
Noninterest Expense
Salaries and employee benefits 86,141 1,336 87,477
Occupancy expense, net 23,275 351 23,626
Equipment expense 13,447 133 13,580
Data processing expense 17,477 14 17,491
Foreclosed property expense 16,302 - 16,302
Other operating expense 68,716 985 69,701
Total Noninterest Expense 225,358 2,819 228,177
Income (Loss) Before Income Taxes and
Extraordinary Items (7,915) 3,033 (4,882)
Income tax expense - 854 854
Income (Loss) from Continuing Operations ($7,915) $2,179 ($5,736)
Pro Forma Weighted Average Common Shares 29,608,279 2,866,667 32,474,946
Pro Forma Income (Loss) Per Common Share
from Continuing Operations (H) ($0.27)* ($0.18)
See notes to Pro Forma Combined Financial Statements.
*Historical
</TABLE>
HIBERNIA CORPORATION
PRO FORMA COMBINED STATEMENT OF INCOME
Year Ended December 31, 1992
(cont.)
<TABLE>
<CAPTION>
PRO FORMA FIRST FIRST TOTAL
HIBERNIA COMMERCIAL BANCORP CONTINENTAL PRO PRO FORMA
CORPORATION BANCSHARES, OF LOUISIANA, BANCSHARES, FORMA HIBERNIA
Unaudited ($ in thousands, except per share data) (WITH BASTROP) INC. INC. INC. ADJ. CORPORATION
<S> <C> <C> <C> <C> <C>
Interest Income
Interest and fees on loans $256,593 $6,489 $6,286 $24,612 $293,980
Interest on securities:
U.S. government securities and obligations of
U.S. government agencies 93,906 5,619 4,940 7,017 111,482
Obligations of states and political subdivisions 575 70 555 2 1,202
Trading account interest 99 - - - 99
Interest on time deposits in domestic banks 225 4 132 - 361
Interest on federal funds sold and securities
purchased under agreements to resell 14,273 230 146 549 15,198
Total Interest Income 365,671 12,412 12,059 32,180 422,322
Interest Expense
Interest on deposits 145,245 5,497 4,737 12,169 167,648
Interest on federal funds purchased and
securities sold under agreements to repurchase 6,519 - 69 322 6,910
Interest on debt and other 11,450 377 186 1,353 13,366
Total Interest Expense 163,214 5,874 4,992 13,844 187,924
Net Interest Income 202,457 6,538 7,067 18,336 234,398
Provision for possible loan losses 66,315 150 710 1,152 68,327
Net Interest Income After Provision for
Possible Loan Losses 136,142 6,388 6,357 17,184 166,071
Noninterest Income
Trust fees 12,263 2 7 577 12,849
Service charges on deposits 32,351 713 661 2,726 36,451
Other service, collection and exchange charges 14,107 183 523 932 15,745
Gain on settlement of acquired loans 4,151 - - - 4,151
Loss on planned sale of Texas bank (2,934) - - - (2,934)
Other operating income 10,003 22 6 640 (911)G 9,760
Securities gains, net 17,212 44 60 20 17,336
Total Noninterest Income 87,153 964 1,257 4,895 (911) 93,358
Noninterest Expense
Salaries and employee benefits 87,477 2,565 2,404 7,034 99,480
Occupancy expense, net 23,626 407 634 726 25,393
Equipment expense 13,580 387 308 744 15,019
Data processing expense 17,491 22 205 747 (739)G 17,726
Foreclosed property expense 16,302 (124) (30) 6,554 22,702
Other operating expense 69,701 1,868 1,550 5,592 (172)G 78,539
Total Noninterest Expense 228,177 5,125 5,071 21,397 (911) 258,859
Income (Loss) Before Income Taxes and
Extraordinary Items (4,882) 2,227 2,543 682 0 570
Income tax expense 854 638 598 232 2,322
Income (Loss) from Continuing Operations ($5,736) $1,589 $1,945 $450 $0 ($1,752)
Pro Forma Weighted Average Common Shares 32,474,946 2,493,333 4,800,000 4,423,746 44,192,025
Pro Forma Income (Loss) Per Common Share
from Continuing Operations (H) ($0.18) ($0.04)
See notes to Pro Forma Combined Financial Statements.
*Historical
</TABLE>
HIBERNIA CORPORATION
PRO FORMA COMBINED STATEMENT OF INCOME
Year Ended December 31, 1991
<TABLE>
<CAPTION>
PRO FORMA
BASTROP HIBERNIA
HIBERNIA NATIONAL CORPORATION
Unaudited ($ in thousands, except per share data) CORPORATION BANK (WITH BASTROP)
<S> <C> <C> <C>
Interest Income
Interest and fees on loans $451,675 $3,648 $455,323
Interest on securities:
U.S. government securities and obligations of
U.S. government agencies 114,629 4,694 119,323
Obligations of states and political subdivisions 4,970 495 5,465
Trading account interest 70 - 70
Interest on time deposits in domestic banks 100 37 137
Interest on federal funds sold and securities
purchased under agreements to resell 9,285 470 9,755
Total Interest Income 580,729 9,344 590,073
Interest Expense
Interest on deposits 317,780 5,150 322,930
Interest on federal funds purchased and
securities sold under agreements to repurchase 16,177 - 16,177
Interest on debt and other 12,173 19 12,192
Total Interest Expense 346,130 5,169 351,299
Net Interest Income 234,599 4,175 238,774
Provision for possible loan losses 178,330 17 178,347
Net Interest Income After Provision for
Possible Loan Losses 56,269 4,158 60,427
Noninterest Income
Trust fees 14,346 - 14,346
Service charges on deposits 34,779 442 35,221
Other service, collection and exchange charges 19,938 162 20,100
Credit card income 5,251 - 5,251
Gain on settlement of acquired loans 9,043 - 9,043
Other operating income 8,512 37 8,549
Securities gains, net 17,801 (278) 17,523
Total Noninterest Income 109,670 363 110,033
Noninterest Expense
Salaries and employee benefits 115,173 1,231 116,404
Occupancy expense, net 28,785 350 29,135
Equipment expense 13,979 85 14,064
Data processing expense 12,548 17 12,565
Foreclosed property expense 24,854 - 24,854
Credit card expense 3,136 - 3,136
Other operating expense 110,679 799 111,478
Total Noninterest Expense 309,154 2,482 311,636
Income (Loss) Before Minority Interests (143,215) 2,039 (141,176)
Less: Minority interest - - -
Income (Loss) Before Income Taxes,
Extraordinary Item and Cumulative Effect
of Accounting Change (143,215) 2,039 (141,176)
Income tax expense 782 478 1,260
Income (Loss) from Continuing Operations ($143,997) $1,561 ($142,436)
Pro Forma Weighted Average Common Shares 28,116,938 2,866,667 30,983,605
Pro Forma Income (Loss) Per Common Share
from Continuing Operations (H) ($5.12)* ($4.60)
See notes to Pro Forma Combined Financial Statements.
*Historical
</TABLE>
HIBERNIA CORPORATION
PRO FORMA COMBINED STATEMENT OF INCOME
Year Ended December 31, 1991
(cont.)
<TABLE>
<CAPTION>
PRO FORMA FIRST FIRST TOTAL
HIBERNIA COMMERCIAL BANCORP CONTINENTAL PRO PRO FORMA
CORPORATION BANCSHARES, OF LOUISIANA, BANCSHARES, FORMA HIBERNIA
Unaudited ($ in thousands, except per share data) (WITH BASTROP) INC. INC. INC. ADJ. CORPORATION
<S> <C> <C> <C> <C> <C>
Interest Income
Interest and fees on loans $455,323 $7,857 $5,845 $26,672 $495,697
Interest on securities:
U.S. government securities and obligations of
U.S. government agencies 119,323 6,002 4,743 5,861 135,929
Obligations of states and political subdivisions 5,465 229 574 6 6,274
Trading account interest 70 - - - 70
Interest on time deposits in domestic banks 137 61 324 - 522
Interest on federal funds sold and securities
purchased under agreements to resell 9,755 292 386 984 11,417
Total Interest Income 590,073 14,441 11,872 33,523 649,909
Interest Expense
Interest on deposits 322,930 8,216 6,580 17,645 355,371
Interest on federal funds purchased and
securities sold under agreements to repurchase 16,177 - 74 543 16,794
Interest on debt and other 12,192 635 319 1,250 14,396
Total Interest Expense 351,299 8,851 6,973 19,438 386,561
Net Interest Income 238,774 5,590 4,899 14,085 263,348
Provision for possible loan losses 178,347 10 432 1,800 180,589
Net Interest Income After Provision for
Possible Loan Losses 60,427 5,580 4,467 12,285 82,759
Noninterest Income
Trust fees 14,346 2 6 490 14,844
Service charges on deposits 35,221 754 605 2,629 39,209
Other service, collection and exchange charges 20,100 218 573 884 21,775
Credit card income 5,251 - 2 160 5,413
Gain on settlement of acquired loans 9,043 - - - 9,043
Other operating income 8,549 27 - 368 (799)G 8,145
Securities gains, net 17,523 22 (17) 179 17,707
Total Noninterest Income 110,033 1,023 1,169 4,710 (799) 116,136
Noninterest Expense
Salaries and employee benefits 116,404 2,510 2,195 6,954 128,063
Occupancy expense, net 29,135 411 378 899 30,823
Equipment expense 14,064 453 211 851 15,579
Data processing expense 12,565 17 194 665 (658)G 12,783
Foreclosed property expense 24,854 244 (2) 3,685 28,781
Credit card expense 3,136 - - - 3,136
Other operating expense 111,478 1,935 1,317 4,469 (141)G 119,058
Total Noninterest Expense 311,636 5,570 4,293 17,523 (799) 338,223
Income (Loss) Before Minority Interests (141,176) 1,033 1,343 (528) 0 (139,328)
Less: Minority interest - - - 311 311
Income (Loss) Before Income Taxes,
Extraordinary Item and Cumulative Effect
of Accounting Change (141,176) 1,033 1,343 (839) 0 (139,639)
Income tax expense 1,260 163 305 - 1,728
Income (Loss) from Continuing Operations ($142,436) $870 $1,038 ($839) $0 ($141,367)
Pro Forma Weighted Average Common Shares 30,983,605 2,493,333 4,800,000 4,423,746 42,700,684
Pro Forma Income (Loss) Per Common Share
from Continuing Operations (H) ($4.60) ($3.31)
See notes to Pro Forma Combined Financial Statements.
*Historical
</TABLE>
HIBERNIA CORPORATION
NOTES TO PRO FORMA COMBINED FINANCIAL STATEMENTS
A. Hibernia Corporation will issue common stock with an aggregate market
value at the date of merger of $21.5 million to effect the merger with
Bastrop National Bank (Bastrop National). The Hibernia Corporation
common stock is assumed to have a market value of $7.50 per share
resulting in the issuance of 2,866,667 shares of common stock for all
the outstanding common stock of Bastrop National (exchange ratio of
9.55). The stated value of Hibernia Corporation common stock is $1.92
per share. In accordance with the pooling of interests method of
accounting, the historical equities of the merged companies are
combined.
B. To record the effect of the adoption of Statement of Financial
Accounting Standards No. 115, "Accounting for Certain Investments in
Debt and Equity Securities" (SFAS No. 115), effective December 31, 1993,
for Bastrop National (increase in value of securities available for sale
of $1,089,000) to conform the accounting policy of Bastrop National to
that of Hibernia Corporation.
C. In addition to the Bastrop National Bank merger, Hibernia Corporation is
a party to pending mergers with Commercial Bancshares, Inc. (Commercial
Bancshares), First Bancorp of Louisiana, Inc. (First Bancorp) and First
Continental Bancshares, Inc. (First Continental). Hibernia Corporation
will issue common stock to effect these mergers in transactions using
the pooling of interests method of accounting.
It is assumed that prior to these mergers the following debt and equity
instruments of the designated company will be converted into common
stock of the designated company and that such common stock will then be
exchanged for Hibernia Corporation common stock.
1) $800,000 in First Bancorp convertible subordinated debentures
will be converted to 30,064 shares of First Bancorp common stock.
2) $484,000 of convertible premium related to First Continental
senior secured notes will be converted to 415,107 shares of First
Continental common stock.
The Hibernia Corporation common stock is assumed to have a market value
of $7.50 per share and a stated value of $1.92 per share. In accordance
with the pooling of interests method of accounting, the historical
equities of the merged companies are combined.<PAGE>
HIBERNIA CORPORATION
Hibernia Mkt Value Stated Value Exchange
Shares of Shares of Shares Ratio
Commercial Bancshares 2,493,333 $18,700,000 $ 4,787,000 8.85
First Bancorp 4,800,000 36,000,000 9,216,000 20.20
First Continental 4,069,125 30,518,000 7,813,000 1.60
Total 11,362,458 $85,218,000 $21,816,000
D. Hibernia Corporation will acquire the outstanding First Continental
preferred stock through the issuance of approximately $2,660,000 of
common stock and payment of $12,910,000 of cash. The Hibernia
Corporation common stock is assumed to have a market value of $7.50 per
share resulting in the issuance of 354,621 shares. The stated value of
Hibernia Corporation common stock is $1.92 per share. Available federal
funds will be used to fund the cash payment.
E. Hibernia Corporation will use available federal funds sold and
investment securities to retire debt and related accrued interest and
redemption premium. Investment securities of $614,000, which represent
an escrow account previously established by First Continental, will be
used to fund a portion of the debt retirement.
Redemption
Debt Interest Premium
Commercial Bancshares $ 3,345,000 $ 63,000 $ -
First Bancorp 3,690,000 50,000 -
First Continental 11,400,000 4,288,000 300,000
$18,435,000 $4,401,000 $300,000
The retirement of the Commercial Bancshares debt is not a requirement of
the merger. The retirement of the First Bancorp debt and the First
Continental debt is required by the debt agreement or the respective
merger agreement.
F. To record the effect of the adoption of Statement of Financial
Accounting Standards No. 115, "Accounting for Certain Investments in
Debt and Equity Securities" (SFAS No. 115), for First Bancorp (increase
in value of securities available for sale of $1,984,000). Hibernia
Corporation, Commercial Bancshares and First Continental adopted SFAS
No. 115 effective December 31, 1993. This entry conforms the accounting
policies of all of the companies.
G. To eliminate intercompany transactions between Hibernia Corporation and
First Continental primarily related to data processing charges paid by
First Continental to Hibernia Corporation.
H. Hibernia Corporation expects to achieve savings through reductions in
interest expense and operating costs in connection with the proposed
mergers. The savings vary from merger to merger depending upon Hibernia
Corporation's pre-merger operations in the respective geographic area.
The majority of the savings will be achieved through the retirement of
long-term debt upon merger and consolidation of certain operations. The
extent to which the savings will be achieved depends, among other
things, on the regulatory environment and economic conditions, and may
be affected by unanticipated changes in business activities, inflation
and certain external factors such as FDIC assessments. Therefore, there
can be no assurance that such savings will be realized. No adjustment
has been included in the unaudited pro forma financial statements for
the anticipated savings.
MEETING INFORMATION
Each copy of this Proxy Statement-Prospectus mailed to holders
of Bastrop Common Stock is accompanied by a proxy card furnished in
connection with the Bastrop Board's solicitation of proxies for use
at the Special Meeting and at any adjournments or postponements
thereof. The Special Meeting is scheduled to be held at 10:00 a.m.
CST on , 1994, at the office of Bastrop
National Bank, 101 S. Franklin Street, Bastrop, Louisiana. Only
holders of record of Bastrop Common Stock at the close of business
on , 1994 are entitled to receive notice of and
to vote at the Special Meeting. At the Special Meeting,
shareholders will consider and vote upon (a) a proposal to approve
the Agreement and (b) such other matters as may properly be brought
before the Special Meeting or any adjournments or postponements
thereof.
HOLDERS OF BASTROP COMMON STOCK ARE REQUESTED TO COMPLETE,
DATE AND SIGN THE ACCOMPANYING PROXY CARD AND RETURN IT PROMPTLY TO
BASTROP IN THE ENCLOSED, POSTAGE PAID ENVELOPE.
Any holder of Bastrop Common Stock who has delivered a proxy
may revoke it any time before it is voted by attending the Special
Meeting and voting in person at the meeting or by giving notice of
revocation in writing or submitting a signed proxy card bearing a
later date to Bastrop, at the main office, 101 S. Franklin Street,
Bastrop, Louisiana 71221 Attention: Cashier, provided such
notice or proxy is actually received by Bastrop before the vote of
shareholders. The shares of Bastrop Common Stock represented by
properly executed proxy cards received at or prior to the Special
Meeting and not subsequently revoked will be voted as directed by
the shareholders submitting such proxies. If instructions are not
given, proxy cards received will be voted FOR approval of the
Agreement. If any other matters are properly presented at the
Special Meeting for consideration, the persons named in the Bastrop
proxy card enclosed herewith will have discretionary authority to
vote on such matters in accordance with their best judgment. The
Bastrop Board is unaware of any matter to be presented at the
Special Meeting other than the proposal to approve the Agreement.
The cost of soliciting proxies from holders of Bastrop Common
Stock will be borne by Bastrop. Such solicitation will be made by
mail but also may be made by telephone or in person by the
directors, officers and employees of Bastrop (who will receive no
additional compensation for doing so). In addition, Bastrop will
make arrangements with brokerage firms and other custodians,
nominees and fiduciaries to send proxy materials to their
principals.
BASTROP SHAREHOLDERS SHOULD NOT FORWARD ANY STOCK CERTIFICATES
WITH THEIR PROXY CARDS. IF THE MERGER IS APPROVED, SHAREHOLDERS
WILL RECEIVE INSTRUCTIONS REGARDING THE EXCHANGE OF THEIR STOCK
CERTIFICATES.
Vote Required
The affirmative vote of the holders of a two-thirds majority
of the outstanding shares of Bastrop Common Stock entitled to vote
at the Special Meeting is required in order to approve the
Agreement. Therefore, a failure to return a properly executed
proxy card or to vote in person at the Special Meeting will have
the same effect as a vote against the Agreement. As of the Bastrop
Record Date, there were 300,000 shares of Bastrop Common Stock
outstanding and entitled to vote at the Special Meeting, with each
share being entitled to one vote.
A majority of the outstanding shares entitled to vote at the
Special Meeting constitutes a quorum for purposes of that meeting.
An "abstention" will be considered present for quorum purposes, but
will have the same effect as a vote "against" the proposal to
approve the Agreement. Broker "non votes" will not be considered
present for quorum purposes and will have the same effect as a vote
"against" the proposal to approve the Agreement.
As of the Record Date, the directors and executive officers of
Bastrop and its affiliates beneficially owned a total of 92,159
shares or approximately 31% of the outstanding shares of Bastrop
Common Stock. Bastrop has been advised that such directors and
executive officers intend to vote their shares in favor of approval
of the Agreement.
[As of the Record Date, HNB, through its Trust Department,
held of record shares (or approximately % of
the outstanding shares) of Bastrop Common Stock as fiduciary for
the beneficiaries of a trust.] As of the Record Date, the
directors and executive officers of Hibernia and their affiliates
beneficially owned no shares of Bastrop Common Stock. As of the
Record Date, Hibernia and its subsidiaries, other than HNB through
its Trust Department, beneficially owned no shares of Bastrop
Common Stock.
Recommendation
For the reasons described below, the Bastrop Board has
unanimously approved the Agreement, believes the Merger is in the
best interests of Bastrop and its shareholders and recommends that
shareholders of Bastrop vote FOR approval of the Agreement. In
making its recommendation to shareholders, the Bastrop Board
considered, among other things, the opinion of Morgan Keegan that
the terms of the Agreement are fair to Bastrop shareholders from a
financial point of view. See "PROPOSED MERGER -- Background of and
Reasons for the Merger" and "-- Opinion of Financial Advisor."
PROPOSED MERGER
This section of the Proxy Statement describes certain aspects
of the Merger. The following description does not purport to be
complete and is qualified in its entirety by reference to the
Agreement, which is attached as Appendix A to this Proxy Statement
and is incorporated herein by reference. All shareholders are
urged to read the Agreement carefully and in its entirety.
Background and Reasons for Merger
Background. In September, 1992, Bastrop was approached by a
regional bank holding company interested in discussing a possible
acquisition of Bastrop. At that time, Bastrop engaged the services
of Morgan Keegan to provide financial advisory services including
assistance in evaluating offers to acquire Bastrop. The
preliminary offer by the regional bank holding company was not
considered adequate, and Bastrop, with the assistance of Morgan
Keegan, contacted other potential acquirers. Preliminary
discussions continued with potential acquirers regarding a possible
acquisition but a written agreement was never executed.
On April 12, 1993, Bastrop entered into a Letter Agreement
with Union Planters Corporation the terms of which provided that
Bastrop shareholders would receive Union Planters Corporation
securities in exchange for Bastrop Common Stock. Subsequently,
Union Planters Corporation unilaterally exercised its right to
terminate the Letter Agreement.
In July, 1993, Stephen Hansel, President of Hibernia,
contacted Morgan Keegan and indicated interest in acquiring
Bastrop. A meeting was held on August 10, 1993, attended by
several Bastrop directors, a representative of Morgan Keegan, Mr.
Hansel and another executive officer of Hibernia, which was
followed by an exchange of information and discussions relative to
the proposed transaction.
A special meeting of the Bastrop Board was held on November 3,
1993 to consider the Agreement, which had been negotiated between
Bastrop and Hibernia in the previous months. The Bastrop Board,
after meetings between management of Bastrop and Bastrop's
attorneys, accountants and financial advisers, unanimously approved
the Agreement at that meeting. At the same meeting a
representative of Morgan Keegan presented its opinion, described
below, regarding the fairness of the proposed transaction, from a
financial point of view, to the shareholders of Bastrop.
The Board of Directors of Hibernia unanimously approved an
offer to merge with Bastrop on the terms set forth in the Merger
Agreement at a meeting held in September of 1993 and unanimously
approved the final Merger Agreement at a meeting held on November
11, 1993.
Reasons for the Merger. In reaching its determination that
the Merger and Merger Agreement are fair to, and in the best
interest of, Bastrop and its shareholders, the Bastrop Board
consulted with its advisers, as well as with Bastrop management,
and considered a number of factors, including, without limitation,
the following:
(a) the Bastrop Board's familiarity with and review of
Hibernia's business, operations, earnings, and financial condition;
(b) the condition contained in the Agreement that a due
diligence report on Hibernia satisfactory to Bastrop's Board be
received;
(c) the condition contained in the Agreement that Bastrop
shall have received the opinion of Morgan Keegan that the terms of
the Merger Agreement are fair to the Bastrop shareholders from a
financial point of view (see "Opinion of Financial Adviser");
(d) the Bastrop Board's belief that the terms of the
Agreement are attractive in that the Agreement allows Bastrop
shareholders to become shareholders of Hibernia, an institution
which is the second largest bank holding company headquartered in
Louisiana, whose stock is traded on the NYSE and the recent
earnings performance of Hibernia;
(e) Hibernia's wide range of banking products and services;
(f) the Bastrop Board's belief, based upon an analysis of the
anticipated financial effects of the Merger, that upon consummation
of the Merger, Hibernia and its banking subsidiaries would be well
capitalized institutions, the financial position of which would be
well in excess of all applicable regulatory capital requirements;
(g) the Bastrop Board's belief that, in light of the reasons
discussed above, HNB was the most attractive choice as a long-term
affiliation partner of Bastrop;
(h) the expectation that the Merger will generally be a tax-
free transaction of Bastrop and its shareholders and that the
Merger will be accounted for under the pooling of interests method
of accounting (see "PROPOSED MERGER -- Certain Material Tax
Consequences" and "-- Accounting Treatment");
(i) the current and prospective economic and regulatory
environment and competitive constraints facing the banking industry
and financial institutions in Bastrop's market area; and
(j) the recent business combinations involving financial
institutions, either announced or completed, during the past year
in the United States, the State of Louisiana and contiguous states
and the effect of such combinations on competitive conditions in
Bastrop's market area.
The Bastrop Board did not assign any specific or relative
weight to the foregoing factors in their considerations.
Based on the foregoing, the Bastrop Board concluded that the
proposed Merger would be in the best interests of Bastrop's
shareholders, as well as Bastrop's employees, customers and
communities served. Accordingly, the Bastrop Board unanimously
recommends that the shareholders vote "FOR" the Merger. For
information regarding interests of directors and executive officers
of Bastrop in the Merger and their beneficial ownership of Bastrop
Common Stock, see "PROPOSED MERGER -- Management and Operations
after the Merger" and "CERTAIN INFORMATION RELATING TO BASTROP --
Ownership of Directors and Executive Officers of Bastrop."
Terms of the Merger
On the Effective Date, each outstanding share of Bastrop
Common Stock (other than shares held by dissenting shareholders)
will be converted into the number of shares of Hibernia Common
Stock determined in accordance with the following formula: ($21.5
million divided by 300,000 (the number of outstanding shares of
Bastrop Common Stock) ) divided by the fair market value of
Hibernia Common Stock (as defined below) (the "Exchange Ratio").
The fair market value of the Hibernia Common Stock will be the
average of the high and low trading prices of the stock for the
twenty trading days preceding the last trading day immediately
prior to the Effective Date. For example, if the fair market value
of the Hibernia Common Stock is $7.50, each share of Bastrop Common
Stock will be exchanged for 9.55 shares of Hibernia Common Stock.
There is no minimum Ratio set in the Agreement. In addition,
the Agreement does not establish a maximum Exchange Ratio.
Consequently, the number of shares of Hibernia Common Stock to be
received by a Bastrop shareholder will fluctuate only on the basis
of the Fair Market Value of Hibernia Common Stock.
The conversion of shares of Bastrop Common Stock to Hibernia
Common Stock shall be automatic, and Bastrop shareholders will
automatically be entitled to all of the rights and privileges
afforded to Hibernia shareholders as of the Effective Date.
No fractional shares of Hibernia Common Stock will be issued
in connection with the Merger. In lieu of fractional shares,
Hibernia will make a cash payment equal to the fractional interest
which a Bastrop shareholder would otherwise receive multiplied by
the average price of Hibernia Common Stock, calculated on the basis
of the average of the mean of high and low prices of one share of
Hibernia Common Stock for the 20 business days preceding the
Effective date as reported in The Wall Street Journal, or if the
Hibernia Common Stock is not then so reported, the average of the
fair market values of one share of Hibernia Common Stock on the 20
business days preceding the Effective Date determined pursuant to
such reasonable method as the Hibernia may determine, and no such
holder shall be entitled to dividends, voting rights or any other
right of shareholders in respect of any fractional share. If prior
to the Effective Date the outstanding shares of Hibernia Common
Stock are increased, decreased, changed into or exchanged for a
different number or class of shares or securities through a change
in Hibernia's capitalization, then the number of shares to be
issued in the Merger will be adjusted accordingly. The receipt of
cash in lieu of fractional shares will not adversely affect the
tax-free nature of the exchange of common stock in the Merger. See
"PROPOSED MERGER -- Material Tax Consequences."
For a discussion of the rights of dissenting shareholders, see
"PROPOSED MERGER -- Rights of Dissenting Shareholders."
Opinion of Financial Advisor
Bastrop has retained Morgan Keegan to act as its financial
advisor in connection with the Merger. Representatives of Morgan
Keegan attended, in person or by conference telephone, several
meetings of the Special Committee, the Executive Committee and the
full Board of Directors of Bastrop, in connection with their
respective consideration of the Agreement and certain other
alternative courses of action, including the meeting on November 3,
1993, at which the Agreement was approved. At that time, Morgan
Keegan rendered its oral opinion that, as of the date of the
Bastrop Board meeting, the Exchange Ratio was fair, from a
financial point of view, to the holders of Bastrop Common Stock.
Morgan Keegan has delivered a written opinion to Bastrop's Board of
Directors that, as of the date of this Proxy Statement-Prospectus,
the Exchange Ratio is fair, from a financial point of view, to the
holders of Bastrop Common Stock.
Morgan Keegan was not engaged to establish the price to be
paid to Bastrop shareholders nor did Morgan Keegan negotiate the
price of the Merger with Hibernia. The price of the Merger was
negotiated by management of Hibernia and Bastrop in an arms' length
negotiation.
No limitations were imposed by the Bastrop Board upon Morgan
Keegan with respect to the investigations made or procedures
followed by it in rendering its opinion. The full text of Morgan
Keegan's opinion as of the date of this Proxy Statement, which sets
forth the assumptions made, matters considered and limitations on
the review undertaken, is set forth as Appendix B to this Proxy
Statement and is incorporated herein by reference, and should be
read in its entirety in connection with this Proxy Statement. The
summary of the opinion of Morgan Keegan set forth in this Proxy
Statement is qualified in its entirety by reference to the full
text of the opinion.
In arriving at its opinion, Morgan Keegan received, analyzed
and relied upon: (i) the terms of the Agreement; (ii) certain
publicly available information relating to Hibernia; (iii) certain
financial and operating information with respect to the business,
operations and prospects of Bastrop and Hibernia; (iv) Bastrop's
financial position and operating results as compared with those of
certain other publicly-held banks and bank holding companies which
Morgan Keegan deemed comparable to Bastrop; (v) a comparison of the
financial terms of the Merger with the terms of certain other
recent transactions which Morgan Keegan deemed relevant; (vi) the
dividend history of Bastrop and Hibernia; and (vii) a present value
analysis of Bastrop Common Stock assuming earnings and dividends as
forecast by Bastrop's management through 1995 and terminal values
which Morgan Keegan deemed reasonable. In addition, Morgan Keegan
had discussions with the management of Bastrop and Hibernia
concerning their business, operations, assets, present condition
and future prospects and undertook such other financial studies,
analyses and investigations which it deemed appropriate. Morgan
Keegan relied upon the accuracy and completeness of the financial
and other information used in arriving at its opinion without
independent verification and assumed that information provided by
management of Bastrop and Hibernia reflects good faith efforts to
describe the present and prospective status of Bastrop and Hibernia
from an operational and financial point of view. In addition,
Morgan Keegan did not make an independent evaluation or appraisal
of the assets or liabilities of Hibernia or Bastrop.
In connection with rendering its opinion dated the date of
this Proxy Statement and preparing its various written and oral
presentations to Bastrop's Board of Directors, Morgan Keegan
performed a variety of financial analyses, including those
summarized below. This summary does not purport to be a complete
description of the analyses performed by Morgan Keegan in this
regard. The preparation of a fairness opinion involves various
determinations as to the most appropriate and relevant methods of
financial analysis and the application of these methods to the
particular circumstances and, therefore, such an opinion is not
readily susceptible to summary description. Accordingly,
notwithstanding the separate factors summarized below, Morgan
Keegan believes that its analyses must be considered as a whole and
that selecting portions of its analyses and of the factors
considered by it, without considering all analyses and factors,
could create an incomplete view of the evaluation process
underlying its opinion. In performing its analyses, Morgan Keegan
made numerous assumptions with respect to industry performance,
business and economic conditions and other matters, many of which
are beyond Bastrop's or Hibernia's control. The analyses performed
by Morgan Keegan are not necessarily indicative of actual values or
future results, which may be significantly more or less favorable
than suggested by such analyses. Additionally, analyses relating
to the values of businesses do not purport to be appraisals or to
reflect the prices at which businesses may actually be sold.
Valuation Methodologies. In connection with its opinion and
its services as financial advisor to Bastrop's Board, Morgan Keegan
performed three principal valuation analyses for Bastrop: (i) a
comparison of publicly traded companies which Morgan Keegan deemed
reasonably comparable to Bastrop; (ii) an analysis of terms and
prices in recent transactions involving acquisitions of banks and
bank holding companies which Morgan Keegan deemed reasonably
comparable to Bastrop; and (iii) a present value analysis of future
earnings and dividends. Each of these methodologies is briefly
discussed below.
Comparable Company Analysis. Morgan Keegan compared selected
recent financial information, profitability ratios, loan quality
ratios, capital ratios, dividend yields and valuation multiples for
Bastrop with those of selected banks and bank holding companies
that Morgan Keegan deemed reasonably comparable. Such comparable
companies included Century South Banks, Inc., Dahlonega, GA,
Miner's National Bancorp, Pottsville, PA, National Bank of South
Carolina, Sumpter, SC, First Citizen's BankStock, Morgan City, LA,
First City Bancorp, Murfreesboro, TN, and Peoples Bank, Newton, NC.
Morgan Keegan also compared selected recent financial ratios,
earnings information and historical trading prices for the stock of
Hibernia with those of selected banks and bank holding companies
that Morgan Keegan deemed reasonably comparable. Such comparable
companies included, Union Planters Corporation, Memphis, TN, First
Tennessee National Corporation, Memphis, TN, and Whitney Holding
Corporation, New Orleans, LA.
Comparable Transaction Analysis. Morgan Keegan also compared
the multiples of Bastrop's book value and net earnings implied by
the Exchange Ratio with the multiples paid in 29 pending and 50
completed publicly announced transactions from January 1, 1990 to
October 31, 1993 involving the merger or acquisition of banks or
bank holding companies in Alabama, Arkansas, Louisiana,
Mississippi, and Tennessee. Morgan Keegan also compared the return
on assets and equity for the target companies in those transactions
with those of Bastrop. In addition, Morgan Keegan reviewed a
summary of deal statistics, including the multiples of net
earnings, book values, assets and deposits of the target companies
in substantially all of the acquisitions of banks and thrifts from
1990 through 1993. However, no company or transaction used in the
analysis is identical to Bastrop, Hibernia or the Merger.
Accordingly, an analysis of the results of the foregoing is not
entirely 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 values of the companies or company to
which they are being compared.
Present Value Analysis. In an attempt to establish a range of
stand alone values for Bastrop continuing as an independent entity,
Morgan Keegan utilized a present value analysis, estimating the
present value of the future streams of earnings and dividends that
Bastrop could produce through 1995, assuming Bastrop performed in
accordance with the earnings forecasts of Bastrop's management.
Morgan Keegan estimated the terminal value for Bastrop Common Stock
at the end of the period by applying multiples of 10x and 12x to
Bastrop's terminal year per share earnings. The assumed dividend
streams and terminal values were added and discounted to present
values using discount rates of 10% and 12%, chosen to reflect
different assumptions regarding the required rates of return to
holders or prospective buyers of Bastrop Common Stock.
Dilution and Contribution Analyses. Due to the disparity in
the relative sizes of Bastrop and Hibernia, Morgan Keegan did not
deem a dilution analysis or contribution analysis to be meaningful
to its opinion.
The terms of the engagement of Morgan Keegan were set forth in
an engagement letter dated September 17, 1992. Pursuant to that
letter, Bastrop has paid Morgan Keegan $47,500 for acting as
financial advisors in connection with Bastrop's ongoing efforts to
identify an appropriate purchaser. If the Merger is consummated,
Bastrop will pay to Morgan Keegan a transaction fee equal to 1.25%
of the aggregate consideration paid to the Bastrop shareholders.
Bastrop will receive a credit against the amount so payable of the
$47,500 already paid to Morgan Keegan. Whether or not the Merger
is consummated, Bastrop has agreed to reimburse Morgan Keegan for
their reasonable out-of-pocket expenses, including all fees and
disbursements of counsel, and to indemnify Morgan Keegan against
certain liabilities relating to or arising out of their engagement,
including certain liabilities under the federal and state
securities laws.
Surrender of Certificates
As soon as practicable after the Effective Date, the transfer
agent of Hibernia, in its capacity as Exchange Agent, will mail all
non-dissenting shareholders of Bastrop a letter of transmittal,
together with instructions for the exchange of their Bastrop Common
Stock certificates for certificates representing Hibernia Common
Stock. Until so exchanged, each certificate representing Bastrop
Common Stock outstanding immediately prior to the Effective Date
shall be deemed for all purposes to evidence ownership of the
number of shares of Hibernia Common Stock into which such shares
have been converted on the Effective Date. Shareholders should not
send their Bastrop Common Stock certificates for surrender until
they receive further instructions from the Exchange Agent.
Representations and Warranties; Conditions to the Merger; Waiver
The Agreement contains representations and warranties by
Bastrop regarding, among other things, its organization, authority
to enter into the Agreement, capitalization, properties, financial
statements, pending and threatened litigation, contractual
obligations and contingent liabilities. The Agreement also
contains representations and warranties by Hibernia regarding,
among other things, its organization and authority to enter into
the Agreement, capitalization, financial statements and other
public reports. Except as otherwise provided in the Agreement,
these representations and warranties will not survive the Effective
Date.
The obligations of Hibernia and Bastrop to consummate the
Merger are conditioned upon, among other things, approval of the
Agreement by Bastrop's shareholders; the receipt of necessary
regulatory approvals, including the approval of the OCC without any
materially burdensome conditions; the receipt of an opinion to the
effect that the Merger, when consummated in accordance with the
terms of the Agreement, will constitute a reorganization within the
meaning of Section 368 of the Code and that, to the extent Bastrop
Common Stock is exchanged for Hibernia Common Stock, Bastrop's
shareholders will recognize no gain or loss for federal income tax
purposes with respect to such exchange; the effectiveness under the
Securities Act of a registration statement relating to the Hibernia
Common Stock to be issued in connection with the Merger and the
absence of a stop order suspending such effectiveness; the absence
of an order, decree or injunction enjoining or prohibiting the
consummation of the Merger; the receipt of all required state
securities law permits or authorizations; the accuracy of the
representations and warranties set forth in the Agreement as of the
Closing Date; the listing of the Hibernia Common Stock to be issued
in the Merger on the NYSE; the receipt of certain opinions of
counsel; in the case of Bastrop, the receipt of the fairness
opinion of Morgan Keegan 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.
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 Bastrop's shareholders shall change the Exchange
Ratio.
Regulatory Approvals
Bastrop and HNB are each regulated by the OCC, and the Merger
consequently must be approved by the OCC before it may be effected.
When the approval of the OCC has been obtained, Bastrop and
HNB must wait at least 30 days prior to consummating the Merger.
During this 30-day period, the Department of Justice may object to
the Merger on antitrust grounds.
Business Pending the Merger
Under the terms of the Agreement, Bastrop may not, without the
prior written consent of Hibernia or as otherwise provided in the
Agreement, among other things,: (i) create or issue any additional
shares of capital stock or any options or other rights to purchase
or acquire shares of capital stock; (ii) enter into employment
contracts with directors, officer or employees or otherwise agree
to increase the compensation of or pay any bonus to such persons
except in accordance with existing policy; (iii) enter into or
substantially modify any employee benefits plans; (iv) establish
any automatic teller machines or branch or other banking offices;
(v) make any capital expenditure(s) in excess of $100,000; (vi)
merge with any other company or bank or liquidate or otherwise
dispose of its assets; or (vii) acquire another company or bank
(except in connection with foreclosures of bona fide loan
transactions). Bastrop is also prohibited from declaring or paying
dividends after the date hereof and prior to the Closing.
Effective Date of the Merger; Termination
The Merger will become effective at the date and time that the
Merger becomes effective as of the date and time of issuance by the
OCC of a certificate of merger relating to the Merger (the
"Effective Date"). Unless otherwise mutually agreed upon by
Hibernia and Bastrop, the Effective Date will occur on the date
that falls 30 days after the date of the order of the OCC approving
the Merger and (ii) the date that falls 5 days after the Special
Meeting; or such later date within 60 days of the Special Meeting
Date as may be agreed upon by the parties. On the Effective Date,
each outstanding share of Bastrop Common Stock, other than shares
held by shareholders who exercise and perfect dissenters' rights in
accordance with applicable law, will be converted into a number of
shares determined by the application of a formula based upon the
average market price of Hibernia Common Stock for the twenty
trading days preceding the last trading day immediately prior to
the Effective Date. The aggregate purchase price to be paid for
all of the outstanding Bastrop Common Stock is $21.5 million. If
the fair market value of Hibernia Common Stock is $7.50 per share,
each Bastrop shareholder would receive 9.55 shares of Hibernia
Common Stock for each share of Bastrop Common Stock held by him.
The Agreement may be terminated by either party, whether
before or after approval of the Agreement and the Merger by
Bastrop's shareholders: (i) in the event of a material breach by
the other party of any representation, warranty or covenant which
has not been cured within the period allowed by the Agreement; (ii)
if any of the conditions precedent to the obligations of such party
to consummate the Merger have not been satisfied, fulfilled or
waived as of the Closing Date; (iii) if any application for any
required regulatory approval has been denied, and the time for all
appeals of such denial has run; (iv) if the shareholders of Bastrop
fail to approve the Merger at the Special Meeting; (v) if there is
a material adverse change in the financial condition of either
party; or (vi) in the event that the Merger is not consummated by
July 1, 1994. The Agreement may also be terminated by Hibernia if
the Merger does not qualify for pooling of interests accounting
treatment and specifically if the holders of more than 10% of the
Bastrop Common Stock exercise and perfect dissenters' rights. The
Agreement also may be terminated at any time by the mutual consent
of the parties. In the event of termination, the Agreement shall
become null and void, except that certain provisions thereof
relating to expenses and confidentiality and the accuracy of
information provided for inclusion in the Registration Statement of
which this Prospectus is a part shall survive any such termination
and any such termination shall 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, Bastrop will be merged with and into
HNB and the separate existence of Bastrop will cease. The offices
of Bastrop will operate as branch banking offices of HNB. The
employees of Bastrop on the Effective Date will become employees
of HNB.
The Boards of Directors of Hibernia Corporation and HNB
following the Merger shall consist of those persons serving as
directors immediately prior thereto. Information regarding the
directors of Hibernia elected at its annual meeting of shareholders
on April 26, 1994 is contained in documents incorporated herein by
reference. See "AVAILABLE INFORMATION." The directors of Bastrop
will resign their positions as directors as of the Effective Date.
Certain Differences in Rights of Shareholders
If the shareholders of Bastrop approve the Merger and the
Merger is subsequently consummated, all shareholders of Bastrop,
other than any shareholders who exercise and perfect dissenters'
rights, will become shareholders of Hibernia. As shareholders of
Hibernia, their rights will be governed by and subject to
Hibernia's Articles of Incorporation and Bylaws, rather than
Bastrop's Articles of Association and Bylaws. The following is a
summary of the principal differences between the rights of
shareholders of Bastrop and Hibernia not described elsewhere in
this Proxy Statement-Prospectus.
Liquidity of Stock. There currently is no ready market for
the shares of Bastrop 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 Bastrop 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.
Election of Directors; Cumulative Voting. Bastrop's Bylaws
provide for cumulative voting for directors, which permits each
shareholder to cast a number of votes for directors equal to the
aggregate number of shares held by him times the number of
directors to be elected. Hibernia's Articles and Bylaws do not
include cumulative voting. Hibernia Common Stock is entitled to
only one vote per share in the election of directors.
Special Meetings of Shareholders. The Board of Directors may
call a special meeting of the shareholders of Bastrop at any time.
In addition, Bastrop shareholders owning an aggregate of at least
10% of the capital stock of Bastrop may call a special meeting of
the shareholders of Bastrop.
Special meetings of the shareholders of Hibernia may be called
by the Chairman of the Board, the President, the Chief Executive
Officer or the Treasurer of Hibernia. In addition, shareholders
holding one-fifth or more of the total voting power of Hibernia may
request a special meeting of shareholders and, upon receipt of such
request, the Secretary of Hibernia is required to call a special
meeting of the shareholders.
Shareholder Proposals. Bastrop's Articles of Association and
Bylaws do not contain any provision either expressly forbidding or
permitting a shareholder to submit a proposal for consideration at
shareholders' meeting, except to nominate an individual for
election as a director. In that case, a shareholder may nominate
a director simply by giving Bastrop's Board notice no less than 14
nor more than 50 days prior to the shareholder meeting at which the
individual is to be nominated, which notice must include certain
information concerning the director nominee, to the extent the
shareholder has that information.
Hibernia's Bylaws contain certain provisions expressly
allowing shareholders to submit such proposal and to nominate
individuals for election as directors, under certain circumstances
and provided the shareholder complies with all of the conditions
set forth in those provisions.
Establishing the Number of Directors. Hibernia's Bylaws
provide that the number of directors is set by the Bylaws, which
may be amended by a majority of the Board of Directors, thereby
giving a majority of the Board the authority to establish the
number of directors. Bastrop's Bylaws provide that the number of
directors may only be set at a shareholder meeting and thereby may
only be changed by a majority of the shareholders.
Terms of Directors. Directors of Bastrop serve for one year.
Hibernia's Board is divided into three classes, each of which
serves a three-year term.
Director and Shareholder Proxies. Bastrop's Bylaws prohibit
directors from voting by proxy. Hibernia's Bylaws expressly permit
directors to vote by proxy. In addition, Bastrop's Bylaws prohibit
officer and employees of Bastrop from acting as proxies for
shareholder meetings. Hibernia's Bylaws contain no such
prohibition. Finally, Bastrop's Bylaws provide that shareholder
proxies are only valid for one meeting. Hibernia's Bylaws do not
restrict the validity of shareholder proxies, and therefore such
proxies are valid for as long as permitted under state corporate
law (generally eleven months unless earlier revoked).
Certain Transfer Restrictions Relating to 5-Percent
Shareholders. Article IX of Hibernia's Articles of Incorporation
restricts transfers of equity interests in the Hibernia under
certain circumstances. This restriction (the "5-Percent
Restriction") is intended to protect Hibernia from certain
transfers of equity interests which could have a material adverse
effect on Hibernia's ability to use certain tax benefits to reduce
its taxable income. Under the 5-Percent Restriction, if, before
December 29, 1995, a shareholder transfers or agrees to transfer
Hibernia stock or stock equivalents, the transfer will be
prohibited and void to the extent that it would result under
applicable Federal income tax rules in the identification of a new
"5-percent shareholder" of Hibernia or an increase in the
percentage stock ownership of any existing "5-percent shareholder"
is increased.
The 5-Percent Restriction does not apply to any transfer
which has been approved in advance by the Board of Directors of
Hibernia, or which is made in compliance with exceptions
established from time to time by resolution of the Board of
Directors. The Board of Directors may withhold its approval of a
transfer only if, in its judgment, the transfer may result in any
limitation on the use by Hibernia of its net operating loss
carryforwards or built-in tax losses or other tax attributes. The
Board of Directors may adopt further resolutions exempting
additional transfers from the 5-Percent Restriction.
The 5-Percent Restriction may adversely affect the
marketability of the Hibernia Common Stock by discouraging
potential investors from acquiring equity securities of Hibernia.
However, since its adoption in September 1992, the 5-Percent
Restriction does not appear to have had any such adverse affect on
the marketability of the Hibernia Common Stock.
While the 5-Percent Restriction may have the effect of
impeding a shareholder's attempt to acquire a significant or
controlling interest in Hibernia, the purpose of the 5-Percent
Restriction is to preserve the tax benefits of Hibernia's previous
losses, not to insulate management from change. Management of
Hibernia believes the tax benefits outweigh any anti-takeover
impact of the 5-Percent Restriction. Any anti-takeover effect of
the 5-Percent Restriction will end with the termination of the 5-
Percent Restriction on December 29, 1995.
Indemnification of Officers and Directors. Hibernia's
Articles of Incorporation provide for indemnification of officers
and directors of Hibernia under the circumstances permitted by
Louisiana law. This indemnification provision requires
indemnification, except as prohibited by law, of officers and
directors of Hibernia or any of its wholly-owned subsidiaries
against expenses, judgments, fines and amounts paid in settlement
actually and reasonably incurred in connection with any action,
suit or proceeding, whether civil or criminal, administrative or
investigative (including any action by or in the right of Hibernia)
by reason of the fact that the person served as an officer or
director of Hibernia or one of its subsidiaries. Officers and
directors may only be indemnified against expenses in cases brought
by the officer or director against Hibernia if the action is a
claim for indemnification, the officer or director prevails in the
action, or indemnification is included in any settlement or is
awarded by the court. The indemnification provision further
requires Hibernia to advance defense costs to officers and
directors in such suits and proceedings upon receipt of an
undertaking to repay such expenses unless it is ultimately
determined that the officer or director is entitled to
indemnification as authorized by the Article.
Bastrop's Articles and Bylaws do not provide for
indemnification of officers and directors.
Material Tax Consequences
The following is a summary description of the material tax
consequences of the Merger to the shareholders of Bastrop; it is
not intended to be complete description of the federal income tax
consequences of the Merger. Tax laws are complex, and each
shareholder's individual circumstances may affect the tax
consequences to such shareholder. In addition, no information is
provided with respect to the tax consequences of the Merger under
applicable state, local or other tax laws. Each shareholder is
therefore urged to consult a tax advisor regarding the tax
consequences of the Merger to him or her.
Consummation of the Merger is conditioned upon the receipt of
an opinion to the effect that the Merger, when consummated in
accordance with the terms of the Agreement will constitute a
reorganization within the meaning of Section 368 of the Internal
Revenue Code of 1986, as amended (the "Code"), and that the
exchange of Bastrop Common Stock for Hibernia Common Stock will not
give rise to the recognition of gain or loss for federal income tax
purposes to Bastrop's shareholders with respect to such exchange.
See "PROPOSED MERGER -- Representations and Warranties; Conditions
to the Merger; Waiver."
If the Merger constitutes a reorganization within the meaning
of Section 368 of the Code: (i) no gain or loss will be recognized
by Bastrop, Hibernia or HNB by reason of the Merger; (ii) a
shareholder of Bastrop 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 Bastrop Common Stock; (iii)
the tax basis in the Hibernia Common Stock received by a
shareholder of Bastrop will be the same as the tax basis in the
Bastrop Common Stock surrendered in exchange therefor; and (iv) the
holding period, for federal income tax purposes, for Hibernia
Common Stock received in exchange for Bastrop Common Stock will
include the period during which the shareholder held the Bastrop
Common Stock surrendered in the exchange, provided that the Bastrop
Common Stock was held as a capital asset at the Effective Date.
The parties have received the opinion of Ernst & Young,
certified public accountants, to the effect that, if consummated in
accordance with its terms and certain representations of the
parties, the Merger will constitute a reorganization within the
meaning of Section 368(a)(1)(A) of the Code and will therefore have
the tax consequences to Bastrop shareholders described above. The
opinion is attached hereto as Appendix D. Cash received in the
Merger lieu of fractional shares will not adversely affect the
income tax treatment of the exchange of shares, but will be treated
as a partial redemption of the shareholder's interest in his stock
and therefore will generally be subject to federal income tax as a
captial gain if the shareholder's basis in the stock is less than
price being paid by Hibernia.
Cash payments received by dissenting shareholders will be
treated as a complete redemption of the shareholders' interests in
their stock and will generally be subject to federal and state
income tax as a capital gain. For more information regarding the
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 Bastrop upon consummation of the Merger have been registered
under the Securities Act. It is anticipated that all shares of
Hibernia Common Stock issued in connection with the Merger will 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 Bastrop 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, Bastrop, and for purposes hereof
could be deemed to include all executive officers, directors and
10% shareholders of Bastrop.
Hibernia Common Stock received and beneficially owned by those
shareholders who are deemed to be affiliates of Bastrop 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,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 Bastrop in the Merger will not be transferable
until financial statements pertaining to at least 30 days of post-
Merger combined operations of Hibernia and Bastrop have been
published, in order to satisfy certain requirements of the
Commission relating to pooling of interests accounting treatment.
The Agreement provides that Bastrop will use its best efforts
to identify those persons who may be deemed to be affiliates of
Bastrop and to cause each person so identified to deliver to
Hibernia a written agreement providing that such person will not
dispose of Bastrop Common Stock or Hibernia Common Stock received
in the Merger except in compliance with the Securities Act, the
rules and regulations promulgated thereunder and the Commission's
rules relating to pooling of interests accounting treatment.
Rights of Dissenting Shareholders
Each Bastrop shareholder who objects to the Merger shall be
entitled to the rights and remedies of dissenting shareholders
provided in the Bank Merger Act, 12 U.S.C. 215a, a copy of which is
set forth as Appendix C hereto.
Shareholders of Bastrop who follow the procedures specified in
Appendix C ("Section 215a") will be entitled to receive the value
of their shares of Bastrop Common Stock in cash. The procedures
set forth in Section 215a must be strictly complied with. Failure
to follow any of the procedures may result in a termination or
waiver of dissenters' rights under Section 215a.
The following discussion of the provisions of Section 215a is
not intended to be a complete statement of its provisions and is
qualified in its entirety by reference to the full text of that
section included herein as Appendix C.
Under Section 215a, a shareholder of Bastrop electing to
exercise dissenter's rights must both:
(i) vote against the Merger or otherwise notify the secretary
of Bastrop in writing that he dissents from the plan of
Merger; and
(ii) within 30 days after the Effective Date, deliver to
Hibernia a written demand for the value of his shares of
Bastrop Common Stock in cash accompanied by the surrender
of the stock certificates for such shares. Such written
demand should be delivered either in person or by mail
(certified mail, return receipt request, being the
recommended form of transmittal) to _________, Hibernia
Corporation, 313 Carondelet Street, New Orleans,
Louisiana 70130.
The value of the shares as to which written demand has been
made will be determined, as of the date of the Effective Date of
the Merger by a committee of three appraisers, one to be selected
by the owners of a majority of the shares involved, one to be
selected by the Hibernia Board, as the Board of Directors of the
resulting bank following the Merger, and one to be selected by the
two appraisers previously selected. The valuation agreed upon by
any two of the three appraisers will govern. If the value so fixed
is not satisfactory to any dissenting shareholder who has requested
payment, that shareholder may, within five days after being
notified of the appraised value of his shares, appeal to the
Comptroller of the OCC who will cause a reappraisal to be made. In
the event that the appraisal is not completed within 90 days after
the Merger, upon written request of any interested party the
Comptroller of the OCC will cause an appraisal to be made.
Hibernia will pay the expenses of the Comptroller. Expenses of the
Comptroller will be paid by Hibernia.
When a value has been ascertained for the shares, the
shareholder will receive payment promptly. The shares of Hibernia
Common Stock which would have been delivered to the dissenting
shareholders had they not requested payment must be sold at an
advertised public auction and Hibernia has the right to purchase
any of such shares. If the shares are sold at the public auction
at a price greater than the amount paid to the dissenting
shareholders, the excess in such sale price must be paid to the
dissenting shareholders.
Shareholders of Bastrop who exercise and perfect dissenters'
rights and who receive cash for their shares of Bastrop Common
Stock will generally be subject to federal and state income tax on
all or a portion of the amount of cash received. 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 and
attached hereto as Appendix D addresses the payments to dissenting
shareholders and states that those payments are not covered by
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.
Dividend Reinvestment Plan
Hibernia maintains a Dividend Reinvestment Plan through which
shareholders of Hibernia who participate in the plan may reinvest
dividends in Hibernia Common Stock. Shares are purchased for
participants in the plan at their market value as determined by the
market price of the stock as listed on the NYSE. The plan also
permits participants to purchase additional shares with cash at the
then-current market price. All shares purchased through the plan
are held in a separate account for each participant maintained by
Hibernia's transfer agent. Shareholders who participate in the
Dividend Reinvestment Plan purchase shares through the plan without
paying brokerage commissions or other costs ordinarily associated
with open market purchases of stock. It is anticipated that the
Dividend Reinvestment Plan will continue after the Effective Date
and that shareholders of Bastrop 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 Bastrop Common Stock must be exchanged for
Hibernia Common Stock. If holders of more than 10% of the
outstanding Bastrop Common Stock exercise and perfect dissenters'
rights, the Merger will not qualify for pooling of interests
accounting. Also, in order for the pooling of interests
accounting method to apply, "affiliates" of Bastrop 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 Bastrop and HNB. Persons believed by Bastrop to be
"affiliates" have agreed to comply with these restrictions.
Bastrop 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 (the "Federal Reserve Board"). Under the BHCA, bank
holding companies may not directly or indirectly acquire the
ownership or control of more than 5% of the voting shares or
substantially all of the assets of any company, including a bank,
without the prior approval of the Federal Reserve Board. In
addition, bank holding companies are generally prohibited from
engaging under the BHCA in nonbanking activities, subject to
certain exceptions.
Hibernia's banking subsidiary, HNB, is subject to supervision
and examination by applicable federal and state banking agencies.
HNB is a national banking association subject to the regulation and
supervision of the Comptroller of the Currency (the "Comptroller").
HNB is also subject to various requirements and restrictions under
federal and state law, including requirements to maintain reserves
against deposits, restrictions on the types and amounts of loans
that may be granted and the interest that may be charged thereon
and limitations on the types of investments that may be made and
the types of services that may offered. Various consumer laws and
regulations also affect the operations of HNB. In addition to the
impact of regulation, commercial banks are affected significantly
by the actions of the Federal Reserve Board as it attempts to
control the money supply and credit availability in order to
influence the economy.
Payment of Dividends
Hibernia has substantial capital in excess of its needs for
capital. Consequently, although Hibernia would ordinarily depend
upon payment of dividends by HNB in order to pay dividends to its
shareholders, it does not currently depend upon HNB dividends for
the sources of its dividends to shareholders. In the event its
capital position changes or management determines to preserve
holding company capital for other purposes, Hibernia would derive
substantially all of its income from the payment of dividends by
HNB, and its ability to pay dividends would be affected by the
ability of HNB to pay dividends. HNB is subject to various
statutory and contractual restrictions on its ability to pay
dividends to Hibernia. Under such restrictions, the amount
available for payment of dividends to Hibernia by HNB was $84
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 shareholders 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.
Hibernia reinstated the dividend on its Common Stock in
September 1993. Quarterly dividends ranging from $.03 to $.04 per
share have been paid on the Hibernia Common Stock since that time.
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 RELATING TO BASTROP
Description of Business
General. Bastrop was chartered as a state bank in 1892 and
converted to a national bank in 1952. Bastrop is a community-
oriented financial institution, which presently operates a general
banking business at four locations (including one automated teller
machine) in Bastrop Louisiana, providing customary banking services
such as checking and savings accounts, various types of time
deposits, safe deposit facilities and money transfers. Bastrop
also finances commercial transactions and makes and services both
secured and unsecured loans to individuals, firms and corporations.
Commercial lending operations include various types of credit
services for the customers of Bastrop. Bastrop's installment loan
department makes direct loans to individuals for personal,
automobile, real estate, home improvement, business and collateral
needs.
The management of Bastrop believes that the services presently
provided by Bastrop are responsive to the convenience and needs of
the community served by Bastrop. There is no individual customer
or small group of customers the loss of which would have a material
impact on the operation of Bastrop. Bastrop is not authorized to
engage in the trust business and thus does not operate a trust
department.
Recent Operating Results.
The following information, which described the operating
results of Bastrop over the period from December 31, 1991 to
December 31, 1993, should be read in conjunction with the financial
statements of Bastrop that follow this disucssion.
Results of Operations December 31, 1993 compared with December 31,
1992.
For the year ended December 31, 1993, net income was
$2,050,267 as compared to $2,179,313 for the year ended December
31, 1992. Net income is largely dependent upon net interest
income, or the difference between interest received on loans and
investments, the interest-bearing assets, and interest paid on
certain deposit accounts, the interest-bearing liabilities. Net
interest income is affected by the average yield on the loans and
investments, the average rate paid on deposit accounts, the average
outstanding balances of these interest-bearing assets and
liabilities, and the magnitude of change of each. Lower interest
rates during 1993 resulted in interest income declining $611,753
from $8,937,182 for 1992 to $8,325,429 for 1993, and interest
expense declining $371,154 from $3,757,895 for 1992 to $3,386,741
for 1993. The greater decline of interest income resulted
primarily from assets continuing to re-price at lower yields after
most liabilities had already reached lower rates at this point in
the low rate environment. This contributed to a decline in net
interest income of $240,599 from $5,179,287 in 1992 to $4,938,688
in 1993. The decrease in the net interest margin, the difference
in the average yield on assets and the average rate paid on
liabilities, was moderated slightly by a greater increase in
interest-earning assets than in interest-bearing liabilities.
Non-interest income increased $36,946 during the period, from
$712,981 in 1992 to $749,927 in 1993. Net gains resulting from the
sale of securities accounted for $28,873 of this figure, as prudent
asset\liability management strategies were implemented to better
position the investment portfolio for the existing and expected
rate environments.
Non-interest expense, excluding income taxes and provision for
loan losses, remained fairly constant, increasing less than .5%
from $2,818,988 in 1992 to $2,831,125 in 1993.
Bastrop maintains a reserve for potential loan losses that
management of Bastrop believes is adequate to cover future losses
on outstanding loans. The allowance for loan losses was $384,155
at the end of 1993, with $28,000 charged to operations during the
year to provide for the reserve, compared to $357,825 at the end of
1992, with $39,688 charged to operations to provide for the reserve
during 1992.
Income taxes decreased $75,056 from $854,279 in 1992 to
$779,223 in 1993, due to a decrease of $204,102 in income before
taxes.
Results of Operations as of December 31, 1992 Compared With
December 31, 1991.
Net income for 1992 was $2,179,313, as compared to $1,561,348
for 1991. The increase of $617,965 for 1992 over 1991 was due
primarily to a 24% increase in net interest income from $4,174,974
for 1991 to $5,179,287 for 1992, or $1,004,313.
Interest income for 1992 was $8,937,182, and, for 1991, was
$9,344,087. The decrease of $406,905 resulted from a declining
average yield on interest-earning assets, partially offset by an
increase in the average balances of interest-earning assets.
Interest expense for 1992 was $3,757,895, and, for 1991, was
$5,169,113. The decrease of $1,411,218 is attributable to a
decline in the average rate paid on deposits, partially offset by
an increase in the average balances of interest-bearing
liabilities.
The greater decline in interest expense than in interest
income is attributable to more frequent repricing of liabilities
than assets early in the declining rate environment. This resulted
in an increase in net interest margin and the 24% increase in net
interest income.
Non-interest income for 1992 and 1991 was $712,981 and
$640,035, respectively. The increase of $72,946 is partly
attributable to increases in monthly services charges that were
effective November 1, 1991, and yielded additional income of
$40,903 in 1992. The remainder of the increase is primarily
attributable to sales of investment securities in 1992 that
resulted in net pre-tax gains of $21,938.
Non-interest expense, excluding income taxes and provision for
loan losses, increased $59,855 from $2,759,133 in 1991 to
$2,818,988 in 1992. During 1991, certain permitted corporate
securities, and securities collateralized by guaranteed investment
contracts issued by an insurance company on which accrual of
interest had been discontinued or reduced, were written down, then
sold. In addition, a provision was charged to operations to fund
a reserve for securities losses. The transactions during 1991
resulted in net pre-tax losses of $277,633. Although there were no
securities losses (net) in 1992, the elimination of this expense
item from 1991 to 1992 was more than offset by increases in
personnel expenses (8.6% or $106,000), legal expense associated
with bidding on loans from a failed savings and loan association
($14,000) and initial merger negotiations with another institution
($50,000), charges associated with the elimination of compensating
balances at other financial institutions ($36,000), increased
property taxes ($32,000), operating loss increase ($28,000), a
change in accounting for machine maintenance and rent ($49,000) and
other general expenses. The effect of the sales of investment
securities, net of tax, was a gain of $14,479 in 1992 and a loss of
$183,233 in 1991.
The allowance for loan losses for 1992 and 1991 was $357,825
and $345,000, respectively, with $39,688 charged to operations in
1992 and $16,528 charged to operations in 1991 to provide for the
allowance.
Income taxes increased from $478,000 in 1991 to $854,279 in
1992, due to the increase in income before taxes.
Results of Operations December 31, 1991 Compared to December 31,
1990.
Net income for 1991 was $1,561,348, as compared to 1990 net
income of $1,393,898. Total interest income in 1991 was $9,344,087
as compared to interest income in 1990 of $9,746,952, a decrease of
$402,865. Interest expense for 1991 and 1990 was $5,169,113 and
$5,785,327, respectively, a decline of $616,214. The average
maturity of the bank's liabilities was shorter than the average
maturity of the bank's assets. This resulted in the liabilities
repricing faster than the assets. In the declining rate
environment of 1991, this caused interest expense to decline faster
than interest income, resulting in an increase in net interest
margins and in net interest income of $213,349.
Non-interest income increased $29,878 from $610,157 in 1990 to
$640,035 in 1991, due primarily to an increase in income from
various service charges implemented in 1991.
Non-interest expense, excluding income taxes and provision for
loan losses, decreased slightly from $2,778,111 in 1990 to
$2,759,133 in 1991. Write-downs and sales of certain investment
securities consisting of non-performing corporate securities and
securities collateralized by guaranteed investment contracts issued
by insurance companies were executed during 1990. In addition, a
provision was charged to operations to fund a reserve for
securities losses. Other sales were executed that were also
considered prudent asset/liability management decisions by
Bastrop's management. The effect of all securities transactions
during 1990 was a net pre-tax loss of $395,740. Similar
transactions in 1991 resulted in a net pre-tax loss of $277,633.
Although securities losses decreased by $118,107 from 1990 to 1991,
other expense items increased, offsetting the decline. Significant
changes include: personnel expenses increased less than 2% or
$22,000; FDIC insurance increased $128,770; occupancy expenses
decreased $52,351; and various other expense categories increased
slightly.
The allowance for loan losses was $345,000 at the end of each
of 1991 and 1990. During 1990 and 1991, $86,273 and $16,528 was
charged to operations to provide for the allowance, respectively.
These amounts were equal to the amounts of net loan losses incurred
in each respective year.
Income taxes increased $164,500 from $313,500 in 1990 to
$478,000 in 1991, due to increased income before taxes.
Competitive Conditions. Bastrop does business in Morehouse
Parish in Louisiana. Five other financial institutions are doing
business in Morehouse Parish. Bastrop is subject to substantial
competition in all aspects of its business. Intense competition
for loans and deposits comes from other financial institutions in
the market areas. In certain aspects of its banking business,
Bastrop also competes with credit unions, small loan companies,
insurance companies, mortgage companies, finance companies,
brokerage houses and other financial institutions, some of which
are not subject to the same degree of regulation and restriction as
Bastrop and many of which have financial resources greater than
those of Bastrop.
Bastrop currently employs 41 persons, 38 full-time and 3 part-
time.
Supervision and Regulation. Bastrop is subject to applicable
provisions of the federal law as it pertains to national banks, and
to Louisiana law, insofar as they do not conflict with or are not
preempted by federal law, including laws relating to usury, various
consumer and commercial loans and the operation of branch banks.
Property. Bastrop has four locations. Bastrop owns the
facilities of its main office at 101 S. Franklin Street, and its
branches located at 510 North Washington Street and 714 East
Madison Street, Bastrop, Louisiana. It also has an automated
teller machine located at 2032 East Madison, Bastrop, Louisiana.
The facilities have an aggregate of approximately 26,000 square
feet, and management of Bastrop deems its facilities adequate for
the conduct of its business.
Legal Proceedings. Bastrop is not a party to any pending
legal proceedings before any court, administrative agency or other
tribunal other than routine litigation incidental to the conduct of
the business of Bastrop. Bastrop management further believes that
no litigation is threatened in which Bastrop faces potential loss
or exposure which will materially affect shareholders' equity or
Bastrop's financial position as presented herein.
Directors and Executive Officers
The members of the Bastrop Board are elected by the
shareholders at the annual meeting to serve until the next annual
meeting and until their successors are duly elected and qualified.
The name of each director, his age, his current principal
occupation (which has continued for five years unless otherwise
indicated), the name and principal business of the organization in
which his occupation is carried on (which organization is not an
affiliate of Bastrop unless indicated), any directorships in
publicly held companies, and the year in which he was first elected
to his position with Bastrop are as follows:
Eugene A. Barham, 82, is a partner in several farming
operations in Oak Ridge, Louisiana. He was elected to the Bastrop
Board in 1974.
Carl O. Berry, 59, is co-owner of Berry Packing Company, a
meat packing plant located in Bastrop, Louisiana and Cossett,
Arkansas. He was elected to the Bastrop Board in 1979.
Henry W. Bridges, 43 was elected President and Chief Operating
Officer on January 28, 1992. He has been employed by Bastrop in
various capacities since 1975. He was elected to the Bastrop Board
in 1991.
W. T. Carpenter, 81, is a retired state senator and
entrepreneur in various business enterprises. He was elected to
the Bastrop Board in 1954.
Cloyd Farrar, 59, is Executive Vice President of Bastrop and
has been employed by Bastrop in various capacities since 1966. He
was elected to the Bastrop Board in 1985.
James P. Madison, 62, is a retired attorney. He was elected
to the Bastrop Board in 1968.
William F. McDonald, 64, is Chairman and co-owner of Rimcor,
Inc., a commercial refabricating business. He was elected to the
Bastrop Board in 1989.
Richard W. Revels, 69, was elected Chairman of the Board and
Chief Executive Officer on January 28, 1992. He had previously
served as Chairman, President and Chief Executive Officer. Mr.
Revels have been employed by Bastrop in various capacities since
1946. He was elected to the Bastrop Board in 1970.
Duke Shackelford, 67, is a local farmer and businessman. He
serves on the boards of Entergy Corporation and Louisiana Power and
Light Company. He was elected to the Bastrop Board in 1966.
O. L. Tugwell, 72, is a retired family physician. He was
elected to the Bastrop Board in 1972.
Woodrow W. Harper, 54, is Senior Vice President and manager of
the North Washington office. He has been employed by Bastrop in
various capacities since 1977.
Bobby Nugent, 53, is Vice President and Cashier. He has been
employed by Bastrop in various capacities since 1968.
Charles D. Burns, 51, is a vice president and has been
employed by Bastrop in various capacities since 1992.
Joey H. Bales, 48, is a vice president and has been employed
by Bastrop in various capacities since 1992.
No family relationship exists among the individuals listed
above.
Bastrop Common Stock Price
Bastrop Common Stock is inactively traded, and there is no
established public trading market for the stock. A small
percentage of the stock is traded from time to time in private
transactions, usually locally among Bastrop customers and local
residents. To the best of management's knowledge, Bastrop's Common
Stock has traded in the range of $45.00 to $48.00 during the last
year. Disclosures of trade prices are not always made available to
Bastrop management, and the range described herein represents
management's best estimate for the price ranges of trades during
the time period indicated.
Dividends
The shareholders of Bastrop Common Stock are entitled to such
dividends as may be declared from time to time by the Bastrop
Board. Cash dividends generally are declared quarterly. Dividends
paid on Bastrop Common Stock for the last three years have been
$2.50, $11.00 and $2.00 per share per year for the years 1991,
1992, and 1993, respectively. The Merger Agreement restricts the
ability of Bastrop to declare and pay dividends. See "The Merger
Conduct of Business Pending Merger." Bastrop's ability to pay
dividends is also dependent upon the earnings and financial
condition of Bastrop as well as certain regulatory restrictions.
Ownership of Principal Shareholders
As of January 31, 1994, there were 300,000 shares of Bastrop
Stock, its only class of voting securities, outstanding and
approximately 223 shareholders of record of such shares. The
following table provides information concerning the number of
shares of Bastrop Common Stock beneficially owned, directly or
indirectly, by holders of more than 5% of the outstanding Bastrop
Common Stock as of January 31, 1994 and the number of shares of
Hibernia Common Stock to be owned by such persons on the Effective
Date of the Merger. Except as set forth below, no person is known
by Bastrop to be the beneficial owner of more than 5% of the
outstanding Bastrop Common Stock. The number and percentage of
Hibernia Common Stock beneficially owned on the Effective Date of
the Merger in the tables in this section are based upon a
conversion ratio of 9.55 shares of Hibernia Common Stock for each
share of Bastrop Common Stock and assuming 83.5 million shares of
Hibernia Common Stock will be outstanding immediately prior to the
Merger. Unless otherwise noted, the named person has sole voting
and investment power with respect to the shares indicated.
Percent of
Number of Total
Hibernia Hibernia
Shares to Shares to
Percent be be
Number of of Total Beneficially Outstanding
Bastrop Bastrop Owned on on
Beneficial Shares Shares Effective Effective
Owner Owned Outstanding Date Date
James P.
Madison 18,000 6.00 171,900 *
Richard W.
Revels(1) 15,405 5.14 147,117 *
Duke
Shackelford
(2) 25,915 8.64 247,488 *
* Denotes less than 1%
(1) Includes 44 shares owned by Mr. Revels' wife.
(2) Includes 1,315 shares owned by Shackelford Co. and 10,000
shares owned by Mr. Shackelford's wife.
Ownership by Directors and Executive Officers of Bastrop
The following information pertains to Bastrop Common Stock
beneficially owned, directly or indirectly, by each director, by
each executive officer and by all directors and executive officers
as a group, as of January 31, 1994, and to the number of shares of
Hibernia Common Stock to be owned by such persons on the Effective
Date of the Merger. Unless otherwise noted, the named persons have
sole voting and investment power with respect to the shares
indicated.
Percent of
Number of Total
Hibernia Hibernia
Shares to Shares to
Percent be be
Number of of Total Beneficially Outstanding
Bastrop Bastrop Owned on on
Beneficial Shares Shares Effective Effective
Owner Owned Outstanding Date Date
Eugene A.
Barham(2) 13,000 4.33 124,150 *
Carl Berry 3,147 1.05 30,053 *
Henry W.
Bridges 1,009 * 9,635 *
W. T.
Carpenter 1,000 * 9,550 *
Cloyd
Farrar(3) 1,846 * 17,629 *
James P.
Madison 18,000 6.00 171,900 *
William F.
McDonald 7,700 2.57 73,535 *
R. W.
Revels(4) 15,405 5.14 147,117 *
Duke
Shackelford
(5) 25,915 8.64 247,488 *
O. L.
Tugwell 1,682 * 16,063 *
Charles D.
Burns 565 * 5,395 *
Woodrow W.
Harper 1,530 * 14,611 *
Bobby Nugent 1,360 * 12,988 *
All directors
and executive
officers as a
group
(14 persons) 92,159 30.72 880,118 1.05
* Denotes less than 1%
(1) Based on 300,000 shares of Bastrop Common Stock issued and
outstanding.
(2) Includes 1,000 shares owned by Prairie Jefferson Farms which
is owned by Mr. Barram.
(3) Includes 203 shares owned by Mr. Farrar's wife.
(4) Includes 44 shares owned by Mr. Revels' wife.
(5) Includes 1,315 shares owned by Shackelford Co. and 10,000
shares owned by Mr. Shackelford's wife.
RELATIONSHIP WITH INDEPENDENT AUDITORS
Bastrop has appointed Roger C. Parker, CPA as independent
auditor for the fiscal year ending December 31, 1993. Mr. Parker
has continuously served as the independent auditor for Bastrop
since 1990. Mr. Parker is expected to be present at the Special
Meeting of Bastrop's shareholders, will have an opportunity to make
a statement if he desires and will be available to respond to
appropriate questions.
VALIDITY OF SHARES
The validity of the shares of 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 prospectus, Ms. Meringer owned no shares of Hibernia Common
Stock and held options to purchase 8,000 shares of Hibernia Common
Stock, which options are not currently exercisable.
EXPERTS
The consolidated financial statements of Hibernia incorporated
in this Prospectus by reference from Hibernia's Annual Report on
Form 10-K for the fiscal year ended December 31, 1993, have been
audited by Ernst & Young, independent auditors, as set forth in
their report thereon incorporated herein by reference, and has been
so incorporated by reference in reliance upon such report given
upon the authority of such firm as experts in accounting and
auditing.
The financial statements of Bastrop included below have been
audited by Roger C. Parker, CPA, as set forth in his report thereon
set forth below.
BASTROP FINANCIAL INFORMATION
BASTROP NATIONAL BANK
BASTROP, LOUISIANA
_________________
FINANCIAL STATEMENTS
FOR THE YEAR ENDED
DECEMBER 31, 1993
________________
BASTROP NATIONAL BANK
BASTROP, LOUISIANA
DECEMBER 31, 1993
CONTENTS
PAGE
Independent Auditor's Report.............................. 1
Balance Sheets............................................ 2
Statements of Income...................................... 3
Statements of Changes in Stockholders' Equity............. 4
Statements of Cash Flows.................................. 5-6
Notes to Financial Statements............................. 7-13
ROGER C. PARKER
CERTIFIED PUBLIC ACCOUNTANT
2905-A Cameron
MONROE, LOUISIANA 71201
318-387-3170/FAX 318-361-5153
January 20, 1994
Independent Auditors' Report
To the Board of Directors
and Stockholders of
Bastrop National Bank
Bastrop, Louisiana
I have audited the accompanying balance sheets of Bastrop National
Bank as of December 31, 1993 and 1992, and the related statements
of income, retained earnings, and cash flows for each of the three
years in the period ended December 31, 1993. These financial
statements are the responsibility of the Bank's management. My
responsibility is to express an opinion on these financial
statements based on my audits.
I conducted my audits in accordance with generally accepted
auditing standards. Those standards require that I plan and
perform the audit to obtain reasonable assurance about whether the
financial statements are free of material misstatement. An audit
includes examining, on a test basis, evidence supporting the
amounts and disclosures in the financial statements. An audit also
includes assessing the accounting principles used and significant
estimates made by management, as well as evaluating the overall
financial statements presentation. I believe that my audit
provides a reasonable basis for my opinion.
In my opinion, the financial statements referred to above present
fairly, in all material respects, the financial position of Bastrop
National Bank as of December 31, 1993 and 1992, and the results of
its operations and cash flows for the years in the period ended
December 31, 1993 in conformity with generally accepted accounting
principles.
/S/ ROGER C. PARKER
Roger C. Parker
Certified Public Accountant
BASTROP NATIONAL BANK
BALANCE SHEETS
DECEMBER 31, 1993 AND 1992
1993 1992
ASSETS
Cash and Due from Banks 5,494,362 5,594,884
Investment Securities (Approximate
Market Value $77,799,000 and
$76,707,000 respectively) 76,709,820 75,318,479
Federal Funds Sold 10,525,000 9,100,000
Loans, Less allowance for Loan
Losses of $384,155 and $357,825,
respectively 35,097,784 34,821,674
Bank Premises, Equipment and
Furniture 1,284,430 1,346,229
Other Real Estate 93,473 75,000
Accrued Interest Receivable 1,251,659 1,531,089
Other Assets 65,367 69,561
TOTAL ASSETS 130,521,895 127,856,916
LIABILITIES AND STOCKHOLDERS EQUITY
LIABILITIES
DEPOSITS
Demand 16,482,783 17,563,007
NOW Accounts 23,597,169 20,234,050
Savings 10,896,022 11,599,684
Time, $100,000 and Over 24,226,655 24,166,867
Other Time 39,838,325 40,351,618
TOTAL DEPOSITS 115,040,954 113,915,226
Accrued Interest Payable 467,949 462,294
Other Liabilities 252,247 168,918
TOTAL LIABILITIES 115,761,150 114,546,438
STOCKHOLDERS' EQUITY
Common Stock, Par Value $1
300,000 Shares Authorized and Issued 300,000 300,000
Surplus 1,000,000 1,000,000
Retained Earnings 13,460,745 12,010,478
TOTAL STOCKHOLDERS' EQUITY 14,760,745 13,310,478
TOTAL LIABILITIES AND
STOCKHOLDERS' EQUITY 130,521,895 127,856,916
The accompanying notes are an integral part of these financial
statements.
YEAR ENDED DECEMBER 31,
1993 1992 1991
INTEREST INCOME
Interest and Fees
on Loans 3,182,851 3,410,283 3,647,521
Interest on
Investment Securities
U. S. Treasury
Securities 693,203 860,960 997,035
U. S. Government
Agencies and
Corporations 3,617,036 3,898,852 3,665,610
States and Political
Subdivisions 630,161 572,024 494,647
Other Securities 2,352 14,847 31,659
Interest on Federal
Funds Sold 199,826 178,219 470,424
Interest on Deposits
in Banks - 1,997 37,191
TOTAL INTEREST INCOME 8,325,429 8,937,182 9,344,087
INTEREST EXPENSE
Interest on Deposits 3,386,741 3,757,895 5,169,113
NET INTEREST INCOME 4,938,688 5,179,287 4,174,974
Provision for
Loan Losses 28,000 39,688 16,528
NET INTEREST
INCOME AFTER
PROVISION FOR
LOAN LOSSES 4,910,688 5,139,599 4,158,446
OTHER INCOME
Service Charges 544,620 507,224 466,321
Credit Life Insurance 76,389 115,148 105,929
Other Income 78,107 68,671 67,785
Securities Gains 50,811 21,938 -
TOTAL OTHER INCOME 749,927 712,981 640,035
OTHER EXPENSES
Salaries 1,162,254 1,058,085 990,862
Profit Sharing and
Other Employee
Benefits 289,499 278,495 239,804
Occupancy Expenses 357,625 351,039 350,224
Other Operating
Expenses 1,021,747 1,131,369 900,610
Securities Losses - - 277,633
TOTAL OTHER EXPENSES 2,831,125 2,818,988 2,759,133
INCOME BEFORE TAXES 2,829,490 3,033,592 2,039,348
Applicable Income Taxes 779,223 854,279 478,000
NET INCOME 2,050,267 2,179,313 1,561,348
The accompanying notes are an integral part of these financial
statements.
BASTROP NATIONAL BANK
STATEMENT OF CHANGES IN STOCKHOLDERS' EQUITY
TOTAL
COMMON RETAINED STOCKHOLDERS'
STOCK SURPLUS EARNINGS EQUITY
BALANCE,
DECEMBER 31, 1990
300,000 1,000,000 12,319,817 13,619,817
Net Income -0- -0- 1,561,348 1,561,348
Cash Dividends
Declared -0- -0- ( 750,000) ( 750,000)
BALANCE,
DECEMBER 31, 1991 300,000 1,000,000 13,131,165 14,431,165
Net Income -0- -0- 2,179,313 2,179,313
Cash Dividends
Declared -0- -0- ( 3,300,000) (3,300,000)
BALANCE,
DECEMBER 31, 1992 300,000 1,000,000 12,010,478 13,310,478
Net Income -0- -0- 2,050,267 2,050,267
Cash Dividends
Declared -0- -0- ( 600,000) ( 600,000)
BALANCE,
DECEMBER 31,
1993 300,000 1,000,000 13,460,745 14,760,745
The accompanying notes are an integral part of these financial
statements.
BASTROP NATIONAL BANK
STATEMENTS OF CASH FLOWS
YEAR ENDED DECEMBER 31,
1993 1992 1991
CASH FLOWS FROM
OPERATING ACTIVITIES:
Interest Received From:
Loans 3,360,206 3,488,614 3,545,922
Investment Securities 5,349,147 5,646,648 5,162,992
Federal Funds Sold 199,826 178,219 470,424
Service Charges 544,620 507,224 466,321
Credit Life Insurance 76,389 115,148 105,929
Other Income 78,107 68,671 67,785
Interest Paid to
Depositors ( 3,381,086) ( 3,952,084) ( 5,442,653)
Cash Paid to
Suppliers &
Employees ( 2,589,767) ( 2,586,665) ( 2,148,116)
Income Taxes Paid ( 748,000) ( 868,118) ( 557,761)
NET CASH PROVIDED BY
OPERATING ACTIVITIES 2,889,442 2,597,657 1,670,843
CASH FLOWS FROM
INVESTING ACTIVITIES:
Proceeds From Sales of
Inventory Securities 6,155,828 8,356,196 979,750
Proceeds From
Maturities of Investment
Securities 26,600,097 22,018,538 23,203,308
Purchase of Investment
Securities (34,400,775) (38,988,494) (34,468,071)
Federal Funds Sold,
Net ( 1,425,000) ( 1,775,000) 1,700,000
Net (Increase) Decrease
in Loans ( 322,583) ( 1,758,580) 682,951
Capital Expenditures ( 123,259) ( 90,692) ( 25,215)
NET CASH USED IN
INVESTING ACTIVITIES ( 3,515,692) ( 8,688,032) ( 7,927,277)
CASH FLOWS FROM
FINANCING ACTIVITIES:
Net Increase in Demand
Deposits, NOW Accounts,
and Savings Accounts 1,579,233 7,726,064 7,002,751
Net Decrease in
Time Deposits ( 453,505) ( 157,512) ( 71,416)
Dividends Paid ( 600,000) ( 3,300,000) ( 750,000)
NET CASH PROVIDED BY
FINANCING ACTIVITIES ( 525,728) ( 4,268,552) ( 6,181,335)
NET DECREASE IN CASH
& CASH EQUIVALENTS ( 100,000) ( 1,821,823) ( 75,099)
CASH AND CASH
EQUIVALENTS AT
BEGINNING OF YEAR 5,594,884 7,416,707 7,491,806
CASH AND CASH
EQUIVALENTS AT
END OF YEAR 5,494,362 5,594,884 7,416,707
RECONCILIATION OF
NET INCOME TO NET
CASH PROVIDED BY
OPERATING ACTIVITIES:
Net Income 2,050,267 2,179,313 1,561,348
Adjustments to Reconcile Net Income
to Net Cash Provided by Operating
Activities:
Depreciation 185,058 191,508 199,609
Provision for
Loan Losses 28,000 39,688 16,528
(Gain) Loss on
Sale of
Investments ( 50,811) ( 21,938) 277,633
(Increase) Decrease
in Interest
Receivable 279,430 11,074 ( 191,298)
Amortization of
Bond Premium 304,320 365,225 26,549
Decrease in
Prepaid Expenses 4,194 6,471 50,580
(Reduction) Increase
in Interest Payable 5,655 ( 194,189) ( 273,540)
Increase in Other
Liabilities 83,329 20,505 3,434
NET CASH PROVIDED BY
OPERATING ACTIVITIES 2,889,442 2,597,657 1,670,843
The accompanying notes are an integral part of these financial
statements.
BASTROP NATIONAL BANK
NOTES TO FINANCIAL STATEMENTS
YEAR ENDED DECEMBER 31, 1993
1. SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES
Investment Securities. Investment securities are stated at
cost adjusted for amortization of premiums and accretion of
discounts, which are recognized as adjustments to interest
income. Gains or losses on disposition are based on the net
proceeds and the adjusted carrying amount of the securities
sold, using the specific identification method.
Loans and Allowance for Loan Losses. Loans are stated at the
amount of unpaid principal, reduced by unearned discount and
an allowance for loan losses. Unearned discount on consumer
loans is recognized as income over the terms of the loans
using the rule of seventy-eights method. Interest on
commercial loans is calculated by using the simple interest
method on daily balances of the principal amount outstanding.
The allowance for loan losses is established through a
provision for loan losses charged to expenses. Loans are
charged against the allowance for loan losses when management
believes that the collectibility of the principal is unlikely.
The allowance is an amount that management believes will be
adequate to absorb possible losses on existing loans that may
become uncollectible, based on evaluations of the
collectibility of loans and prior loan loss experience. The
evaluations take into consideration such factors as changes in
the nature and volume of the loan portfolio, overall portfolio
quality, review of specific problem loans, and current
economic conditions that may affect the borrowers' ability to
pay. Accrual of interest is discontinued on a loan when
management believes, after considering economic and business
conditions and collection efforts, that the borrowers'
financial condition is such that collection of interest is
doubtful.
Bank Premises and Equipment - Bank premises and equipment are
recorded at cost. Depreciation is provided by using both
straight-line and accelerated methods over the estimated
useful lives of the properties.
Cash Equivalents - For purposes of the statement of cash
flows, cash and cash equivalents include cash on hand and
amounts due from banks.
2. INVESTMENT SECURITIES
Carrying amounts and approximate market values of investment
securities are summarized as follows.
GROSS GROSS ESTIMATED
AMORTIZED UNREALIZED UNREALIZED MARKET
DECEMBER 31, 1993 COST GAINS LOSSES VALUE
U. S. Treasury
Securities 13,896,776 173,602 4,329 14,066,046
Obligations of Other
U. S. Government
Agencies and
Corporations 21,178,155 489,885 15,570 21,652,470
Obligations of
States and
Political
Subdivisions 11,473,026 226,221 38,907 11,660,340
Mortgage Backed
Securities 30,122,866 452,125 193,823 30,381,168
Federal Reserve
Bank Stock 39,000 - - 39,000
TOTAL 76,709,820 1,341,833 252,629 77,799,024
The amortized cost and estimated market value of debt 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.
ESTIMATED
AMORTIZED MARKET
COST VALUE
Due in One Year or Less 9,249,820 9,346,691
Due After One Year Through Five Years 30,315,776 30,938,755
Due After Five Years Through Ten Years 6,982,358 7,093,410
Mortgage Backed Securities 30,122,866 30,381,168
Federal Reserve Bank Stock 39,000 39,000
TOTAL 76,709,820 77,799,024
2. INVESTMENT SECURITIES (Continued)
GROSS GROSS ESTIMATED
AMORTIZED UNREALIZED UNREALIZED MARKET
DECEMBER 31, 1992 COST GAINS LOSSES VALUE
U. S. Treasury
Securities 12,170,939 174,298 - 12,345,234
Obligations of Other
U. S. Government
Agencies and
Corporations 31,323,804 599,998 32,870 31,890,932
Obligations of
States and
Political
Subdivisions 8,264,051 243,004 16,853 8,490,202
Mortgage Backed
Securities 23,520,688 475,437 54,257 23,941,868
Other Securities 39,000 - - 39,000
TOTAL 75,318,479 1,492,737 103,980 76,707,236
The amortized cost and estimated market value of debt securities at
December 31, 1992, by contractual maturity, are shown below.
Expected maturities will differ from contractual maturities because
borrowers may have the right to call or prepay obligations with or
without call or prepayment penalties.
ESTIMATED
AMORTIZED MARKET
COST VALUE
Due in One Year or Less 6,574,138 6,663,693
Due After One Year Through Five Years 39,165,754 39,903,710
Due After Five Years Through Ten Years 6,018,899 6,158,965
Due After Ten Years - -
Mortgage Backed Securities 23,520,688 23,941,868
Federal Reserve Bank Stock 39,000 39,000
TOTAL 75,318,479 76,707,236
Gross gains of $59,470, $39,387 and $204,750 and gross losses of
$8,659, $17,499 and $482,383 were realized on sales of investment
securities in 1993, 1992, and 1991, respectively.
Investment securities with an amortized cost of $19,847,872 and
estimated market value of $20,361,512 were pledged as collateral on
public deposits and for other purposes as required by law at
December 31, 1993. Securities so pledged at December 31, 1992 had
an amortized cost $16,567,862 and estimated market value of
$17,100,540.
There were no securities on non-accrual status at December 31, 1993
and December 31, 1992.<PAGE>
3. LOANS
Major classification of loans are as follows:
December 31,
1993 1992
Installment 3,984,930 4,292,014
Installment - Real Estate 12,010,777 11,363,652
Commercial 13,614,323 12,596,842
Commercial - Real Estate 6,307,167 7,550,372
35,917,197 35,802,880
Unearned Discount 435,258 623,381
35,481,939 35,179,499
Allowance for Loan Losses 384,155 357,825
Loans, Net 35,097,784 34,821,674
Loans on which the accrual of interest has been discontinued or
reduced amounted to $265,445 and $393,614 at December 31, 1993 and
1992 respectively. If interest on those loans had been accrued,
such income would have approximated $26,708 and $33,457 in 1993 and
1992, respectively.
Changes in the allowance for loan losses were as follows:
YEAR ENDED DECEMBER 31,
1993 1992
Balance, Beginning of Year 357,825 345,000
Provision Charged to Operations 28,000 39,688
Loans Charged Off ( 15,691) ( 39,905)
Recoveries 14,021 13,042
Balance, end of year 384,155 357,825
4. BANK PREMISES, EQUIPMENT AND FURNITURE
Major classifications of these assets are as follows:
December 31,
1993 1992
Land 202,095 202,095
Buildings 2,352,716 2,352,716
Equipment and Furniture 1,087,250 984,817
3,642,061 3,539,628
Accumulated Depreciation 2,357,631 2,193,399
1,284,430 1,346,229
Depreciation expense amounted to $185,058 in 1993, $191,508 in 1992
and $199,609 in 1991.<PAGE>
5. FEDERAL INCOME TAXES
The Company's effective income tax rates in the accompanying
statements of income are less than statutory tax rates for the
following reasons:
1993 1992 1991
Statutory Federal Income Tax Rate 34% 34% 34%
Less: Non-taxable Bond
Interest Income ( 7) ( 6) ( 9)
Effective Tax Rate 27% 28% 25%
The primary differences between taxable income for financial
reporting purposes and tax reporting purposes are due to permanent
rather than timing differences. Therefore, there is no provision
for deferred income taxes.
6. PROFIT SHARING PLAN
The Bank maintains a voluntary profit sharing plan covering
substantially all of its employees. The contributions for the
years ended December 31, 1993, 1992 and 1991 were $100,000 and
$75,000, respectively.
7. COMMITMENTS AND CONTINGENCIES
In the normal course of business, the bank makes various
commitments and incurs certain contingent liabilities that are
not presented in the accompanying financial statements. The
commitments and contingent liabilities include various
guarantees, commitments to extend credit, and standby letters
of credit. At December 31, 1993 and 1992, outstanding
commitments to extend credit totaled $6,392,897 and
$3,129,226, respectively. At December 31, 1993 and 1992,
commitments under standby letters of credit and guarantees
aggregated $338,700 and $638,700, respectively. The bank does
not anticipate any material losses as a result of the
commitments and contingent liabilities.
8. TRANSACTIONS WITH DIRECTORS AND OFFICERS
The Bank has had, and may be expected to have in the future,
banking transactions in the ordinary course of business with
directors, principal officers, their immediate families, and
affiliated companies in which they are principal stockholders
(commonly referred to as related parties) on the same terms,
including interest rates and collateral, as those prevailing
at the time for comparable transactions with others. The
activity in these loans is summarized below:
BALANCE AT
BEGINNING BALANCE AT
OF YEAR NEW LOANS PAYMENTS END OF YEAR
1993 1,680,314 1,754,500 2,193,938 1,240,876
1992 1,064,998 2,536,345 1,921,029 1,680,314
9. FINANCIAL INSTRUMENTS WITH OFF-BALANCE-SHEET RISK
The Bank is a party to financial instruments with off-balance-
sheet risk in the normal course of business to meet the
financing needs of its customers. These financial instruments
include commitments to extend credit and standby letters of
credit. Those instruments involve, to varying degrees,
elements of credit and interest rate risk in excess of the
amount recognized in the statement of financial position. The
contract amounts of those instruments reflect the extent of
involvement the Bank has in particular classes of financial
instruments.
The Bank's exposure to credit loss in the event of
nonperformance by the other party to the financial instrument
for commitments to extend credit and standby letters of credit
written is represented by the contractual notional amount of
those instruments. The Bank uses the same credit policies in
making commitments and conditional obligations as it does for
on-balance-sheet instruments.
Unless noted otherwise, the Bank does not require collateral
or other security to support financial instruments with credit
risk.
DECEMBER 31,
1993 1992
Financial Instruments Whose Contract
Amounts Represents Credit Risk:
Commitments to Extend Credit 6,392,897 3,929,225
Standby Letters of Credit 338,700 638,700
Commitments to extend credit are agreements to lend to a
customer as long as there is no violation of any condition
established in the contract. Commitments generally have fixed
expiration dates or other termination clauses and may require
payment of a fee. Since many of the commitments are expected
to expire without being drawn upon, the total commitment
amounts do not necessarily represent future cash requirements.
The Bank evaluates each customer's creditworthiness on a case-
by-case basis. The amount of collateral obtained if deemed
necessary by the Bank upon extension of credit is based on
management's credit evaluation of the counterparty.
Collateral held varies, but may include accounts receivable,
inventory, property, plant, equipment, and income-producing
commercial properties.
Standby letters of credit written are conditional commitments
issued by the Bank to guarantee the performance of a customer
to a third party. The credit risk involved in issuing letters
of credit is essentially the same as that involved in
extending loan commitments to customers.
10. SIGNIFICANT CONCENTRATIONS OF CREDIT RISK
Most of the Bank's business activity is with customers located
within its primary market area, an area that generally
includes Morehouse Parish. The economy of the Bank's primary
market area depends heavily on agriculture and the paper
manufacturing industry. As of December 31, 1993 and 1992
approximately $5,257,000 and $4,224,000 of the Bank's loan
portfolio was either secured by farmland or loans to farmers.
11. DIVIDENDS AND REGULATORY RESTRICTIONS
Regulations limit the availability of the Bank's retained
earnings for the payment of dividends without prior approval
of bank regulatory authorities. In this regard, the Bank can
declare dividends in 1994 of $329,580 plus an additional
amount for 1994 year-to-date income as of the date of the
dividend.
The Bank is required by the Federal Reserve to maintain
certain minimum balances of noninterest bearing deposits in
either vault cash or Federal Reserve deposits. At December
31, 1993, this required balance was approximately $986,100.
12. MERGER
On November 3, 1993, the Board of Directors of the Bank voted
to merge with Hibernia National Bank. Pending regulatory
approval, the merger is expected to be completed in March or
April of 1994.
APPENDIX A
AGREEMENT AND PLAN OF MERGER
OF
BASTROP NATIONAL BANK
WITH AND INTO
HIBERNIA NATIONAL BANK
AGREEMENT AND PLAN OF MERGER dated as of November 4, 1993
(this "Agreement"), adopted and made between and among Bastrop
National Bank ("Bastrop") and Hibernia Corporation ("Hibernia") and
Hibernia National Bank ("HNB").
Bastrop is a national bank duly organized and existing under
the laws of the United States of America and has its registered
office at 101 S. Franklin Street, Bastrop, Louisiana 71221-0151.
The presently authorized capital stock of Bastrop consists solely
of 300,000 shares of common stock of the par value of $1.00 each
("Bastrop Common Stock"). As of September 30, 1993, 300,000 shares
of Bastrop Common Stock were issued and outstanding, and no shares
of Bastrop Common Stock were held in Bastrop's treasury. All
outstanding shares of Bastrop Common Stock have been duly issued
and are validly outstanding, fully paid and nonassessable. The
foregoing are the only voting securities of Bastrop authorized,
issued, or outstanding, and there are no existing options,
warrants, calls, or commitments of any kind obligating Bastrop 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 Bastrop's
capital stock has been issued in violation of preemptive rights of
shareholders. Bastrop 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,
holds a valid certificate to do business as such and has full
authority to conduct its business as such.
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.
The presently authorized capital stock of Hibernia is 300,000,000
shares, consisting of 100,000,000 shares of preferred stock, no par
value, 100,000,000 shares of Class B non-voting common stock, no
par value, and 100,000,000 shares of Class A voting common stock,
no par value (the Class A voting common stock being referred to
hereinafter as "Hibernia Common Stock"). As of September 30, 1993,
no shares of Hibernia's preferred stock or its Class B non-voting
common stock were outstanding, 83,582,341 shares of Hibernia Common
Stock were outstanding, and no shares of Hibernia Common Stock were
held in Hibernia's treasury. All outstanding shares of Hibernia
Common Stock have been duly issued and are validly outstanding,
fully paid and nonassessable. The foregoing are the only voting
securities of Hibernia authorized, issued or outstanding and there
are no existing options, warrants, calls or commitments of any kind
obligating Hibernia to issue any share of its capital stock or any
other security of which it is or will be the issuer, except that
Hibernia has authorized or reserved 1,500,000 shares of Hibernia
Common Stock for issuance under its 1987 Stock Option Plan,
pursuant to which options covering 925,994 shares of Hibernia
Common Stock are outstanding at the date hereof, 2,823,970 (as
adjusted) shares of Hibernia Common Stock for issuance under its
1992 Long-Term Incentive Plan, pursuant to which options covering
915,000 shares of Hibernia Common Stock are outstanding at the date
hereof, and 701,795 shares of Hibernia Common Stock are authorized
or reserved for issuance pursuant to Hibernia's Dividend
Reinvestment and Stock Purchase Plan. None of the shares of
Hibernia's capital stock has been issued in violation of preemptive
rights of shareholders.
HNB is a national banking association organized and existing
under the laws of the United States of America having its
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. Hibernia 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, holds a valid certificate to do business as such and has
full authority to conduct its business as such.
The Boards of Directors of Bastrop, Hibernia and HNB have duly
approved this Agreement and have authorized the execution hereof by
their respective Presidents or Chief Executive Officers in
counterparts, and have directed that this Agreement be submitted to
votes of their respective shareholders (if required) in accordance
with Part XI of the Louisiana Business Corporation Law ("LBCL"),
the federal banking laws 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
Bastrop 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:
1. The Merger. On the Effective Date (as defined in Section
14 hereof), Bastrop 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, the Bank Merger Act, 12 U.S.C.
Sections 1828 et seq. and 12 U.S.C. Section 215a (the "Merger").
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. Bastrop Common Stock.
3.1. Conversion. On the Effective Date and subject to
the provisions of Section 3.7 hereof,
(a) each share of Bastrop 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 12 U.S.C. Section 215a and
(ii) shares of Bastrop Common Stock 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
determined by application of the Exchange Rate set forth in Section
3.8 hereof;
(b) holders of certificates which represent shares
of Bastrop 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 Bastrop;
(c) each share of Bastrop Common Stock held in the
treasury of Bastrop or owned beneficially by Hibernia or any of its
subsidiaries shall be cancelled; and
(d) Old Certificates shall be exchangeable by the
holders thereof in the manner provided in the transmittal materials
described below for new certificates for the number of whole shares
of Hibernia Common Stock to which such holders shall be entitled in
accordance with the Exchange Rate set forth in Section 3.8 and a
check representing cash paid in lieu of fractional shares as
provided in Section 3.2 hereof.
3.2. Fractional Shares. Each holder of Old Certificates
who would otherwise have been entitled to receive a fraction of a
share of Hibernia Common Stock (after taking into account all
shares of Bastrop Common Stock represented by the Old Certificates
then delivered by such holder) shall receive, in lieu thereof, cash
(without interest) in an amount equal to such fractional part of a
share multiplied by the average of the mean of high and low prices
of one share of Hibernia Common Stock for the twenty business days
preceding the Effective Date as reported in The Wall Street
Journal, or, if the Hibernia Common Stock is not then so reported,
the average of the fair market values of one share of Hibernia
Common Stock on the twenty 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 Bastrop 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
Bastrop 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 Bastrop Common Stock are converted,
regardless of whether they have exchanged their Old Certificates.
Whenever a dividend is declared by Hibernia on the Hibernia Common
Stock after the Effective Date, the declaration shall include
dividends on all shares issuable hereunder, but no shareholder will
be entitled to receive his distribution of such dividends until
physical exchange of his Old Certificates shall have been effected.
Upon physical exchange of his Old Certificates, any such person
shall be entitled to receive from Hibernia an amount equal to all
dividends (without interest thereon and less the amount of taxes,
if any, that may have been withheld, imposed or paid thereon)
declared, and for which the payment has occurred, on the shares
represented thereby.
3.5. Cancellation of Old Certificates. On and after the
Effective Date there shall be no transfers on the stock transfer
books of Bastrop or Hibernia of the shares of Bastrop Common Stock
which were issued and outstanding immediately prior to the
Effective Date. If, after the Effective Date, Old Certificates are
properly presented to Hibernia, they shall be cancelled and
exchanged for certificates representing shares of Hibernia Common
Stock and a check representing cash paid in lieu of fractional
shares as herein provided. Any other provision of this Agreement
notwithstanding, neither the Exchange Agent nor any party hereto
shall be liable to a holder of Bastrop 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 HNB and to the extent permitted by applicable law, the
officers and directors of Bastrop 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 Bastrop, and otherwise to carry out the purposes of
this Agreement.
3.7. Dissenters' Shares. Shares of Bastrop Common Stock
held by any holder having rights of a dissenting shareholder as
provided in 12 U.S.C. Section 215a, 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 relevant
provisions of 12 U.S.C. Section 215a, 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 Bastrop Common Stock,
at which time such shares shall be converted as provided in Section
3.1 hereof.
3.8. Exchange Rate. (a) The Exchange Rate shall be the
number (calculated to four decimal places) that equals the number
obtained by dividing the Deliverable Amount (as defined below) by
the total number of issued and outstanding shares of Bastrop Common
Stock on the Closing Date.
(b) For purposes of this Agreement, the Deliverable Amount
shall be the number that equals $21.5 million divided by the
Average Market Price of Hibernia Common Stock on the Closing Date
(as defined in paragraph (c) below).
(c) For purposes of this Agreement, the Average Market Price
of Hibernia Common Stock on the Closing Date shall be the average
of the mean of the high and low prices of one share of Hibernia
Common Stock for the twenty business days preceding the last
trading day immediately prior to the Closing Date as reported in
The Wall Street Journal.
4. Articles of Incorporation; Bylaws. The Articles of
Incorporation and Bylaws of Hibernia in force immediately prior to
the Effective Date shall on and after the Effective Date continue
to be the Articles of Incorporation and Bylaws of Hibernia,
respectively, unless altered, amended or repealed in accordance
with applicable law.
5. Employees. Hibernia shall cause to be provided as soon
as practicable after the Effective Date for the employees of
Bastrop 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 Bastrop 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
Bastrop shall be deemed equivalent to have having been employed for
that same period by Hibernia and/or its subsidiaries.
6. Negative Covenants. From the date hereof until the
Effective Date, or until the termination of this Agreement, Bastrop
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
Bastrop Common Stock (other than in a fiduciary capacity);
provided, however, that Bastrop may declare a dividend to its
shareholders in December of 1993, payable in January 1994, in an
amount not to exceed $1.00 per outstanding share of Bastrop Common
Stock.
(b) authorize the creation or issuance of or issue any
additional shares of its capital stock, or any options, calls,
warrants, stock appreciation rights or commitments relating to its
capital stock or any securities or obligations convertible into or
exchangeable for, or giving any person any right to subscribe for
or acquire from it, shares of its capital stock;
(c) enter into any employment contracts with, increase
the rate of compensation of, or pay or agree to pay any bonus to,
any of its directors, officers or employees, except in accordance
with the existing policy relating to periodic compensation reviews;
(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, (ii) amend
its Articles of Association or Bylaws, (iii) impose, or suffer the
imposition of any material lien, charge, or encumbrance on the
assets of Bastrop, or permit any such lien to exist, (iv) establish
or add any automatic teller machines or branch or other banking
offices, (v) make any capital expenditures in excess of $100,000 or
(vi) take any action that would materially and adversely affect the
ability of any party hereto to obtain the approvals of any
governmental authority necessary for consummation of the
transactions contemplated hereby or that would materially and
adversely affect Bastrop's ability to perform its covenants and
agreements hereunder;
(f) except with respect to transactions contemplated
hereby, merge with any other corporation or bank or permit any
other corporation or bank to merge into it or consolidate with any
other corporation or bank; acquire control over any other firm,
bank, corporation or organization or create any subsidiary (except
in a fiduciary capacity or in connection with foreclosures in bona
fide loan transactions); liquidate; or sell or dispose of any
assets or acquire any assets, otherwise than in the ordinary course
of its business consistent with its past practice; or
(g) knowingly fail to comply with any laws, regulations,
ordinances, or governmental actions applicable to it and to the
conduct of its business in a manner significant, material and
adverse to its business.
7. Representations and Warranties of Bastrop. Bastrop (and
not its directors or officers in their personal capacities) hereby
represents and warrants as follows:
7.1. Recitals. The facts set forth in the preamble to
this Agreement with respect to it are true and correct.
7.2. Organization and Qualification. Bastrop is a
national banking association duly organized, validly existing, and
in good standing under the laws of the United States of America,
has all 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. Bastrop has all requisite power and
authority to execute and deliver this Agreement and perform its
obligations hereunder.
7.3. Corporate Authorization. The execution, delivery
and performance of this Agreement have been authorized by Bastrop's
Board of Directors, and, subject to the approval of this Agreement
by its shareholders in accordance with 12 U.S.C. Section 215a, all
corporate acts and other proceedings required for the due and valid
authorization, execution, delivery and performance by Bastrop of
this Agreement and the consummation of the Merger have been validly
and appropriately taken. Subject to receipt of such shareholder
approval, the receipt of a written fairness opinion of Morgan,
Keegan and Company, Inc. satisfactory to Bastrop (the "Fairness
Opinion") and such regulatory approvals as are required by law,
this Agreement is a legal, valid and binding obligation of Bastrop,
enforceable 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.
7.4. No Conflicts. Except as disclosed on Schedule 7.5
hereto, the execution and delivery of this Agreement by Bastrop
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 Bastrop or to which Bastrop is subject,
which breach, violation or default would have a material and
adverse effect on the financial condition, properties, businesses
or results of operations of Bastrop taken as a whole or on the
transactions contemplated hereby, (ii) to the best of the knowledge
of Bastrop's management, a breach or violation of, or a default
under, any law, rule or regulation or any judgment, decree, order,
governmental permit or license, or agreement, indenture or
instrument of Bastrop or to which Bastrop is subject, or (iii) a
breach or violation of, or a default under, the Articles of
Association or Bylaws of Bastrop; 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.
7.5. Financial Statements; Dividend Restrictions.
Bastrop has delivered to Hibernia prior to the execution of this
Agreement true and correct copies of the following consolidated
financial statements (collectively referred to herein as the
"Bastrop Financial Statements"): Bastrop's Balance Sheets as of
September 30, 1993 and 1992 (unaudited) and December 31, 1992 and
1991 (audited) and Statements of Income, Changes in Financial
Position and Changes in Stockholders' Equity for the periods ended
September 30, 1993 and 1992 (unaudited) and December 31, 1992,
1991, and 1990 (audited). The Bastrop Financial Statements (as of
the dates thereof and for the periods covered thereby) (i) are in
accordance with the books and records of Bastrop which are complete
and correct in all respects that are required by generally accepted
accounting principles and applicable regulatory requirements
("GAAP") and which have been maintained in accordance with good
business practice and (ii) present fairly the financial position
and results of the operation of Bastrop as of the dates and for the
periods indicated, and have been prepared in accordance with GAAP,
utilizing accounting practices consistent with prior years. Except
as disclosed in the Bastrop Financial Statements, there are no
restrictions in any note, indenture, agreement, statute or
otherwise (except by statute or regulation applicable to Louisiana
corporations or national banks generally) precluding Bastrop from
paying dividends, as and if declared by its Board of Directors.
7.6. No Material Change. There has been no material
adverse change in Bastrop's results of operations or financial
condition since September 30, 1993.
7.7. Litigation and Proceedings. Except as set forth on
Schedule 7.7 hereto no litigation, proceeding or controversy before
any court or governmental agency is pending that in the opinion of
its management is likely to have a material and adverse effect on
the business, results of operations or financial condition of
Bastrop, and, to the best of its knowledge, no such litigation,
proceeding or controversy has been threatened or is contemplated.
7.8. Material Contracts. Except for this Agreement and
arrangements made in the ordinary course of business and disclosed
on Schedule 7.8 hereto, Bastrop is not bound by any material
contract to be performed after the date hereof that is not
terminable by Bastrop without penalty or liability on thirty days
prior notice.
7.9. Brokers' or Finders' Fees. No agent, broker,
investment banker, investment or financial advisor or other person
acting on behalf of Bastrop or under their authority is entitled to
any commission, broker's or finder's fee from any of the parties
hereto in connection with any of the transactions contemplated by
this Agreement, except for fees payable in connection with the
financial services rendered to Bastrop by Morgan Keegan & Company,
Inc. in connection with its issuance of the Fairness Opinion, for
which Bastrop will pay a fee at or prior to the closing.
7.10. Contingent Liabilities. Except as disclosed on
Schedule 7.10 hereto and except for unfunded loan commitments made
in the ordinary course of business consistent with past practices,
as of September 30, 1993, Bastrop 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 Bastrop, and there does not exist a set of
circumstances resulting from transactions effected or events
occurring prior to, on, or after September 30, 1993, or from any
action omitted to be taken during such period that, to the
knowledge of Bastrop, could reasonably be expected to result in any
such material obligation or liability.
7.11. Tax Liability. The amounts set up as liabilities
for taxes in the Bastrop Financial Statements are sufficient for
the payment of all respective taxes (including, without limitation,
federal, state, local, and foreign excise, franchise, property,
payroll, income, capital stock, and sales and use taxes) accrued in
accordance with GAAP and unpaid at the respective dates thereof.
7.12. Material Obligations Paid. Since September 30,
1993, Bastrop has not incurred or paid any obligation or liability
that would be material to Bastrop, except for obligations incurred
or paid in connection with transactions by it in the ordinary
course of its business consistent with its past practices.
7.13. 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 Bastrop 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 management, and 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 adverse
to Bastrop except as reserved against in the Bastrop Financial
Statements. All taxes, interest, additions and penalties due with
respect to completed and settled examinations or concluded
litigation have been paid, and Bastrop's reserves for bad debts at
December 31, 1992, as filed with the Internal Revenue Service were
not greater than the maximum amounts permitted under the provisions
of Section 585 of the Internal Revenue Code of 1986, as amended
(the "Internal Revenue Code").
7.14. Loans. To the best knowledge and belief of its
management, each loan reflected as an asset of Bastrop in the
Bastrop Financial Statements, as of September 30, 1993, or acquired
since that date, is the legal, valid, and binding obligation of the
obligor named therein, enforceable in accordance with its terms,
and no loan is subject to any asserted defense, offset or
counterclaim known to Bastrop, except as disclosed in writing to
Hibernia on or prior to the date hereof.
7.15. Allowance for Loan Losses. The allowances for
possible loan losses shown on the balance sheets of Bastrop as of
September 30, 1993 are adequate in all material respects under the
requirements of GAAP to provide for possible losses, net of
recoveries, relating to loans previously charged off, on loans
outstanding (including accrued interest receivable) as of September
30, 1993, and each such allowance has been established in
accordance with GAAP.
7.16. Title to Assets; Adequate Insurance Coverage.
Except as disclosed on Schedule 7.16 hereto, Bastrop has good and
marketable title free and clear of all material liens,
encumbrances, charges, defaults or equities of whatever character
to all of the respective properties and assets, tangible or
intangible, reflected in the Bastrop Financial Statements as being
owned by them at or acquired by them after September 30, 1993. To
the best knowledge and belief of its management, all buildings, and
all fixtures, equipment, and other property and assets that in the
opinion of management are material to its business on a
consolidated basis, held under leases or subleases by Bastrop are
held under valid instruments enforceable in accordance with their
respective terms (subject as to enforceability to bankruptcy,
insolvency and other laws of general applicability relating to or
affecting creditors' rights generally and to general equitable
principles or principles of Louisiana law that are similar to
equitable principles in jurisdictions that recognize a distinction
between law and equity). To the best knowledge and belief of its
management, the policies of fire, theft, liability and other
insurance, including fidelity bonds, maintained with respect to the
assets or businesses of Bastrop provide adequate coverage against
loss.
7.17. Employee Plans. To the best of Bastrop's
knowledge and belief, it, 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 Bastrop:
(i) is in compliance with all laws, regulations,
reporting and licensing requirements and orders applicable to its
business or to such plan or any of its employees (because of such
employee's activities on behalf of it), the breach or violation of
which could have a material and adverse effect on such business;
and
(ii) has received no notification from any agency
or department of federal, state or local government or the staff
thereof asserting that any such entity is not in compliance with
any of the statutes, regulations or ordinances that such
governmental authority enforces, or threatening to revoke any
license, franchise, permit or governmental authorization, and is
subject to no agreement with any such governmental authority with
respect to its assets or business.
7.18. Copies of Employee Plans. On or prior to the date
hereof, Bastrop has provided Hibernia with true, complete and
accurate copies of all pension, retirement, stock purchase, stock
bonus, stock ownership, stock option, savings, stock appreciation
right or profit-sharing plans, any employment, deferred
compensation, consultant, 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.
7.19. 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,
Bastrop 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.
7.20. No Default. Bastrop 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 assets, business or operations may be
bound or affected or under which it or its assets, business or
operations receive benefits, and there has not occurred any event
that with the lapse of time or the giving of notice or both would
constitute such a default.
7.21. Minutes. Within thirty days after the date
hereof, Bastrop will have made available to Hibernia, for
inspection pursuant to the terms of Section 9.5 hereof, the minutes
of meetings of Bastrop'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.
7.22. Insurance Policies. On or prior to the date
hereof, Bastrop has delivered to Hibernia 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 Bastrop at the date
hereof. Except as disclosed on Schedule 7.22 hereto, Bastrop 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, Bastrop 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 Bastrop.
7.23. Investments. Except for pledges to secure public
or trust deposits, none of the investments reflected in the Bastrop
Financial Statements under the heading "Investment Securities," and
none of the investments made by Bastrop since September 30, 1993,
and none of the assets reflected in the Bastrop 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 Bastrop freely to dispose of such
investment at any time. With respect to all repurchase agreements
to which Bastrop is a party, Bastrop 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.
7.24. Environmental Matters. Neither Bastrop nor, to
the knowledge of Bastrop, any previous owner or operator of any
properties at any time owned, leased, or occupied by Bastrop or
used by Bastrop in its business ("Bastrop Properties") used,
generated, treated, stored, or disposed of any hazardous waste,
toxic substance, or similar materials on, under, or about Bastrop
Properties except in compliance with all applicable federal, state,
and local laws, rules, and regulations pertaining to air and water
quality, hazardous waste, waste disposal, air emissions, and other
environmental matters ("Environmental Laws"). Bastrop has not
received any notice of noncompliance with Environmental Laws,
applicable laws, orders, or regulations of any governmental
authorities relating to waste generated by any such party or
otherwise or notice that any such party is liable or responsible
for the remediation, removal, or clean-up of any site relating to
Bastrop Properties.
8. Representations and Warranties of Hibernia. Hibernia
(and not its directors or officers in their personal capacities)
hereby represents and warrants as follows:
8.1. Recitals. The facts set forth in the preamble to
this Agreement with respect to it and HNB are true and correct.
8.2. Organization and Qualification. Hibernia is a
corporation duly organized, validly existing and in good standing
under the laws of the State of Louisiana. 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 Hibernia has all requisite power and
authority to execute and deliver this Agreement and perform its
obligations hereunder.
8.3. Shares Fully Paid and Non Assessable. The
outstanding shares of capital stock of its subsidiaries are validly
issued and outstanding, fully paid and nonassessable (subject to 12
U.S.C. Sectin 55) and all of such shares of each of Hibernia's
subsidiaries 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. Subject to receipt of
shareholder approval (if required), Hibernia and HNB have taken all
required corporate action, including, but not limited to, approval
of their respective Boards of Directors, to approve and adopt this
Agreement and this Agreement is a duly authorized, valid, and
binding agreement of Hibernia and HNB enforceable against Hibernia
and HNB in accordance with its terms, subject as to enforceability
by bankruptcy, insolvency, and other laws of general applicability
relating to or affecting creditors' rights generally and by general
equitable principles or principles of Louisiana law that are
similar to equitable principles in jurisdictions that recognize a
distinction between law and equity.
8.5. No Conflicts. Except as disclosed on Schedule 8.5
hereto, the execution and delivery of this Agreement by Hibernia
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 and adverse effect on the financial
condition, properties, businesses, or results of operations of
Hibernia and its subsidiaries taken as a whole or on the
transactions contemplated hereby, (ii) to the best of the knowledge
of Hibernia's management, a breach or violation of, or a default
under, any law, rule, or regulation or any judgment, decree, order,
governmental permit or license, or agreement, indenture, or
instrument of Hibernia or 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
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, 1992, its Quarterly Reports on Form 10-Q for the
periods ended March 31 and June 30, 1993, and its proxy statement
for its 1993 annual meeting of shareholders, each in the form
(including exhibits) filed with the Securities and Exchange
Commission (the "SEC"), its current reports on Form 8-K filed
during 1993 and its quarterly report to shareholders for the period
ended June 30, 1993 (collectively, the "Hibernia Reports"),
contained any untrue statement of a material fact or omitted to
state a material fact required to be stated therein or necessary to
make the statements made therein, in light of the circumstances
under which they were made, not misleading. There is no fact or
circumstance that, individually or in the aggregate, materially and
adversely has affected or is so affecting, or, in the opinion of
the executive officers of Hibernia, may reasonably be expected in
the future to so affect, the business, financial condition, net
worth, properties, prospects or results of operations of Hibernia
and its subsidiaries, taken as a whole, that has not been disclosed
in the Hibernia Reports. Each of the balance sheets in or
incorporated by reference into the Hibernia Reports (including the
related notes) fairly presents the financial position of the entity
or entities to which it relates as of its date and each of the
statements of income and stockholders' equity and statement of cash
flows or equivalent statements in the Hibernia Reports (including
any related notes and schedules) fairly presents the results of
operations and changes in stockholders' equity, as the case may be,
of the entity or entities to which it relates for the periods set
forth therein (subject, in the case of unaudited statements, to
year-end audit adjustments that will not be material in amount or
effect), in each case in accordance with GAAP consistently applied
during the periods involved, except as may be noted therein.
Copies of the Hibernia Reports have been furnished to Bastrop on or
before the date hereof.
8.7. No Material Adverse Change. There has been no
material and adverse change in its business, results of operations
or financial condition since September 30, 1993.
8.8. Loans. To the best knowledge and belief of its
management, each loan reflected as an asset of HNB in the unaudited
consolidated balance sheet contained in Hibernia's quarterly report
to shareholders for the period ended September 30, 1993, or
acquired since that date, is the legal, valid and binding
obligation of the obligor named therein, enforceable in accordance
with its terms, and no loan is subject to any asserted defense,
offset, or counterclaim known to Hibernia, except as disclosed on
Schedule 8.8 hereto.
8.9. No Material Adverse Change. Since September 30,
1993, there has been no event or condition of any character
(whether actual, or to the knowledge of Hibernia or HNB, threatened
or contemplated) that has had or can reasonably be anticipated to
have, or that, if concluded or sustained adversely to Hibernia,
would reasonably be anticipated to have, a material adverse effect
on the financial condition, results of operations, business or
prospects of Hibernia or HNB, excluding changes in laws or
regulations that affect banking institutions generally.
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 its
management is likely to have a material and adverse effect on the
business, results of operations or financial condition of Hibernia
and its subsidiaries taken as a whole, and, to the best of its
knowledge, no such litigation, proceeding or controversy has been
threatened or is contemplated. Except as disclosed on Schedule
8.10, neither Hibernia nor HNB is subject to any written agreement,
memorandum or order with or by any bank or bank holding company
regulatory authority that materially restricts its operations or
requires any material actions.
8.11. Allowances for Possible Loan Losses. The
allowances for possible loan losses shown on the balance sheets of
Hibernia contained in the Hibernia reports referred to in Sections
8.6 and 9.5(i) hereof, as of the respective dates thereof, were or
will be, as the case may be, adequate in all material respects
under the requirements of GAAP to provide for possible loan losses,
net of recoveries relating to loans previously charged off, on
loans outstanding (including accrued interest receivable) as of the
respect dates of such balance sheets and each such allowance has
been or will have been established in accordance with GAAP. To the
knowledge of Hibernia's and HNB's management, Hibernia is not
likely to be required to materially increase the provision for loan
losses between the date hereof and the Effective Date.
9. Agreements and Covenants. Hibernia, HNB and Bastrop
each hereby agrees and covenants to the other that:
9.1. Shareholder Approvals. If required by applicable
law, this Agreement shall be submitted to HNB's and Bastrop's
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.
9.3. Preparation of Registration Statement and Proxy
Statement. It shall prepare as promptly as practicable jointly
with the other party hereby 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") filed by Hibernia with the SEC pursuant
to the Securities Act of 1933, as amended (the "1933 Act"). 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 Bastrop
relating to Bastrop, (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 Bastrop 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, Bastrop will not issue any press
release or written statement for general circulation relating to
the transactions contemplated hereby, except as otherwise required
by law. The parties will cooperate in any public announcements
directly related to the Merger; provided, however, that, in the
event Hibernia determines to file a current report on Form 8-K that
discloses only the substantive facts of a previously released press
release, such filing may be made without prior consultation with
Bastrop so long as Bastrop is furnished with a copy of such report
within a reasonable time after its filing.
9.5. Material Developments and Access to Information.
(i) In recognition of the fact that Hibernia is required to
register and to file annual, quarterly, and current reports with
the SEC pursuant to Sections 12 and 13 of the Securities Exchange
Act of 1934, as amended, and in further recognition of the fact
that Bastrop is not subject to such registration and reporting
requirements, Hibernia agrees to furnish to Bastrop any and all
reports filed with the SEC throughout the period prior to the
Effective Date as such reports are filed with the SEC, and, in lieu
of such reports to the Commission, Bastrop agrees to keep Hibernia
advised of all material developments relevant to its business and
by the consummation of this Agreement as such developments occur;
(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 value of the assets of Bastrop to be acquired
as a result of the Merger, Bastrop 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
its properties, books, contracts, commitments, loan files,
litigation files, and records (including, but not limited to, the
minutes of the Boards of Directors of Bastrop 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; and (iv) Hibernia will not use
any information obtained pursuant to this Section 9.5 for any
purpose unrelated to the consummation of the transactions
contemplated by this Agreement and, if the Merger is not
consummated, will hold all information and documents obtained
pursuant to this Section 9.5 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, and in the event of
the termination of this Agreement, Hibernia upon request will
deliver to Bastrop all documents so obtained by it.
9.6. Prohibited Negotiations. Prior to the Effective
Date, Bastrop 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, Bastrop or any
business combination with Bastrop other than as contemplated by
this Agreement. Bastrop shall instruct each officer, director,
agent, or affiliate of it to refrain from doing any of the above,
and Bastrop will notify Hibernia promptly if any such inquiries or
proposals are received by, any such information is requested from,
or any such negotiations or discussions are sought to be initiated
with, Bastrop; provided, however, that nothing contained in this
section shall be deemed to prohibit any officer or director of
Bastrop from taking any action that, in the opinion of counsel to
Bastrop, a copy of which opinion shall be furnished to Hibernia
upon its request, is required by applicable law.
9.7. Affiliates. Prior to the Closing Date (as defined
in Section 14 hereof), Bastrop shall deliver to Hibernia a letter
identifying all persons whom it believes to be "affiliates" of
Bastrop for purposes of Rule 145(c) or Rule 144 (as applicable)
under the 1933 Act. Bastrop shall use its best efforts to cause
each person so identified to deliver to Hibernia prior to the
Effective Date a written agreement providing 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.
9.8. Adjustment for Changes in Outstanding Shares. In
the event that prior to the Effective Date the outstanding shares
of Hibernia Common Stock shall have been increased, decreased, or
changed into or exchanged for a different number or kind of shares
or securities by reorganization, recapitalization,
reclassification, stock dividend, stock split, or other like
changes in the Hibernia's capitalization, then an appropriate and
proportionate adjustment shall be made in the number and kind of
shares of Hibernia Common Stock to be thereafter delivered pursuant
to Section 3.1 hereof.
9.9. Accounting Treatment. It shall use its best
efforts to cause the Merger to qualify for pooling-of-interests
accounting treatment.
9.10. Adoption of Accounting Policies. Promptly
following the receipt of the regulatory approvals referred to in
Section 10 hereof, Bastrop shall, take any and all necessary or
appropriate actions to adopt all HNB accounting procedures and
policies (including without limitation those policies pertaining to
charged-off and non-accrual assets).
9.11. Indemnification of Directors and Officers of
Bastrop.
(a) From and after the Effective Date of the Merger,
Hibernia agrees to indemnify and hold harmless each person who, as
of the date immediately prior to the Closing Date, served as an
officer or director of Bastrop (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 Bastrop, to the same extent as he would have
been indemnified under the Articles of Incorporation and/or Bylaws
of Hibernia, as such documents were in effect on the date of this
Agreement as if he were an officer or director of Hibernia at all
relevant times; provided, however, that the indemnification
provided by this Section shall not apply to any claim against an
Indemnified Person if such Indemnified Person knew or should have
known of the existence of the claim and failed to make a good faith
effort to require to notify its director and officer liability
insurance carrier of the existence of such claim prior to the
Closing Date.
(b) The rights granted to the Indemnified Persons hereby
shall be contractual rights inuring to the benefit of all
Indemnified Persons and shall survive this Agreement and any
merger, consolidation or reorganization of Hibernia or HNB.
(c) The rights to indemnification granted by this
subsection 9.11 are subject to the following limitations: (i) the
total aggregate indemnification to be provided by Hibernia pursuant
to subsection 9.11(a) shall not exceed, as to all of the
Indemnified Persons as a group, the sum of $3,000,000, and Hibernia
shall have no responsibility to any Indemnified person for the
manner in which such sum is allocated among that group (but nothing
in this subsection is intended to prohibit the Indemnified Persons
from seeking reallocation among themselves); (ii) a director or
officer who would otherwise be an Indemnified Person under this
subsection 9.11 shall not be entitled to the benefits hereof unless
such director or officer has executed a Joinder Agreement (the
"Joinder Agreement") in the form of Exhibit 9.11 hereto; and (iii)
amounts otherwise required to be paid by Hibernia to an Indemnified
Person pursuant to this subsection 9.11 shall be reduced by any
amounts that such Indemnified Person recovers by virtue of the
claim for which other employees and officers indemnification is
sought.
(d) Hibernia agrees that the $3,000,000 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 they arise out of or are
based upon the matters for which indemnification is provided in
Section 11.2 hereof.
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.
10. Permits, Consents and Approvals. As promptly as
practicable after the date hereof:
(a) Hibernia shall submit an application to the Board of
Governors of the Federal Reserve System (the "Federal Reserve
Board") for approval of the transactions contemplated hereby in
accordance with the provisions of the Bank Holding Company Act;
(b) Hibernia shall submit an application to the
Comptroller of the Currency (the "Comptroller") for approval of the
transactions contemplated hereby in accordance with the provisions
of 12 U.S.C. Section 215a;
(c) Bastrop shall endeavor to have each of its officers
and directors execute the Lock-up and Non Competition Agreement, a
copy of which is attached hereto as Exhibit 10(c);
(d) Hibernia and Bastrop shall duly take all other
appropriate action to secure the approvals and consents set forth
in this Section 10 and all other approvals, consents and rulings
referred to in Section 12 hereof and to satisfy all other
requirements prescribed by law which are necessary for the
consummation of the Merger; and
(e) Bastrop shall cooperate fully with Hibernia and
shall provide such support, assistance and information to Hibernia
as may be reasonably requested by it in connection with its
applications for all necessary approvals by federal, state or local
authorities, in connection with the transactions contemplated by
this Agreement.
11. Confidentiality; Hold Harmless.
11.1 Confidentiality. The parties hereto acknowledge that
each of them or their representatives or agents has engaged in, and
may continue to engage in, certain due diligence reviews and
examinations with respect to the other and that, in the course of
such reviews and examinations, has received or may receive in the
future confidential or proprietary information. Hibernia and
Bastrop 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 the event of the termination of this
Agreement, Hibernia and Bastrop shall, promptly upon request by the
other party, either destroy or return any documents so obtained.
11.2 Hold Harmless. Hibernia will indemnify and hold
harmless Bastrop, each of its directors and officers and each
person, if any who controls Bastrop within the meaning of the
Securities Act against any losses, claims, damages or liabilities,
joint or several, to which they or any of them may become subject,
under the Securities 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 Bastrop for use therein. In addition, Hibernia shall
have the right to assume the defense of any such person in such a
case and, upon assumption of the defense thereof, shall have no
further obligation to reimburse or indemnify such person for legal
fees, costs or expenses. Promptly after receipt by an indemnified
party hereunder of notice of the commencement of any action, such
indemnified party shall, if a claim in respect thereof is to be
made against Hibernia under this Section, notify Hibernia in
writing of the commencement thereof. In case any such action shall
be brought against any indemnified party and it shall notify
Hibernia of the commencement thereof, Hibernia shall be entitled to
participate therein, and to the extent that it shall wish, to
assume the defense thereof, with counsel satisfactory to such
indemnified party, and, after notice from Hibernia to such
indemnified party of its election to so assume the defense thereof,
Hibernia shall not be liable to such indemnified party under this
Section 11.2 for any legal expenses of other counsel or any other
expenses subsequently incurred by such indemnified party.
12. Conditions. The consummation of the Merger is
conditioned upon:
12.1. Shareholder Approval. Approval of this Agreement
by a vote of shareholders of Bastrop in accordance with Bastrop's
Articles of Association and Bylaws and applicable law.
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.
provided, however, that no approval or consent in clause 12.2 or
12.3 of this Section 12 shall have imposed any conditions or
requirements which the Board of Directors of Hibernia in good faith
deems to be materially burdensome.
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 Bastrop 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. Bastrop and its
directors shall have received an opinion, dated the Closing Date,
of counsel for Hibernia, in form and substance satisfactory to
Bastrop, as to such matters as Bastrop may reasonably request with
respect to the transactions contemplated hereby.
12.6. Opinion of Bastrop Counsel. Hibernia, its
directors and its officers who sign the Registration Statement
shall have received an opinion, dated the Closing Date, of
Heiskell, Donelson, Bearman, Adams, Williams & Caldwell, counsel
for Bastrop, in form and substance satisfactory to Hibernia, which
shall cover such matters as Hibernia may reasonably request with
respect to the transactions contemplated hereby.
12.7. Representations, Warranties and Agreements of
Bastrop. Each of the representations, warranties, and agreements
of Bastrop 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, the Chief Executive Officer, and the Chief Financial
Officer of Bastrop, dated the Closing Date, to such effect; Bastrop
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.
Bastrop 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 Bastrop
shall have received a certificate signed by the Chief Executive
Officer and the Treasurer of Hibernia, dated the Closing Date, to
such effect; Hibernia shall have furnished to Bastrop such other
certificates as Bastrop 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 Bastrop with such further documents or other materials as
Bastrop 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 Bastrop shall have
received a certificate to such effect from the officer of Hibernia
designated as its agent for service on the cover page of the
Registration Statement (which certificate may be to the knowledge
of such officer).
12.10. Blue Sky. Hibernia shall have received all state
securities laws and "blue sky" permits and other authorizations
necessary to consummate the transactions contemplated hereby.
12.11. Tax Ruling. Bastrop shall have received a tax
ruling, or in lieu thereof an opinion of a big six public
accounting firm or law firm satisfactory to Hibernia, satisfactory
in form and substance to Hibernia and Bastrop, to the effect that
the Merger then 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
Bastrop Common Stock to the extent exchanged for Hibernia Common
Stock will not give rise to gain or loss to the shareholders of
Bastrop with respect to such exchange and that the Louisiana income
tax treatment to the shareholders of Bastrop will be substantially
the same as the federal income tax treatment to the shareholders of
Bastrop.
12.12. Listing on New York Stock Exchange. The shares
of Hibernia Common Stock issuable to the holders of Bastrop 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. Assertion of Conditions. A failure to satisfy
any of the requirements set forth in Section 12.6 or 12.9 shall
only constitute conditions to consummation of the Merger if
asserted by Bastrop and a failure to satisfy any of the
requirements set forth in Section 12.7 or 12.8 shall only
constitute conditions to consummation of the Merger if asserted by
Hibernia.
13. Termination. This Agreement may be terminated prior to
the Closing Date, either before or after its approval by the
shareholders of the parties hereto, in any of the following events:
13.1. Mutual Consent. By the mutual consent of the
parties hereto, if the Board of Directors of each party so
determines by vote of a majority of the members of its entire
Board.
13.2. Breach of Representation, Warranty or Covenant.
By either party hereto, in the event of a breach by the other party
(a) of any covenant or agreement contained herein or (b) of any
representation or warranty herein, if (i) the facts constituting
such breach reflect a material and adverse change in the financial
condition, results of operations, business, or prospects taken as
a whole, of the breaching party, which in either case cannot be or
is not cured within 60 days after written notice of such breach is
given to the party committing such breach, or (ii) in the event of
a breach of a warranty or covenant, such breach results in a
material increase in the cost of the non-breaching party's
performance of this Agreement.
13.3. Passage of Time. By either party hereto, in the
event that the Merger is not consummated by July 1, 1994.
13.4. Failure to Obtain Regulatory Approval. By either
party hereto, if its Board of Directors so determines by vote of a
majority of the members of its entire Board, at any time after the
Federal Reserve Board, the Federal Reserve Bank or the Comptroller
has denied any application for any approval or clearance required
to be obtained as a condition to the consummation of the Merger and
the time period for all appeals or requests for reconsideration
thereof has run.
13.5. Failure to Obtain Shareholder Approval. By either
HNB or Bastrop, if the shareholders of Bastrop fail to approve the
Merger by the vote required by applicable law.
13.6. Dissenters. By Hibernia, if holders of more than
10 percent of the outstanding Bastrop Common Stock exercise
statutory rights of dissent and appraisal pursuant to the relevant
provisions of 12 U.S.C. 215a.
13.7. Material Adverse Change. By Bastrop, 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 7.6 hereof occurs, after the date hereof and
prior to the Closing.
13.8. Pooling-of-Interests Accounting Treatment. By
Hibernia, in the event that Hibernia shall determine that the facts
and circumstances surrounding the Merger prohibit or materially
jeopardize the treatment of the Merger as a pooling-of-interests
for accounting purposes.
13.9. Fairness Opinion. By Bastrop, if it shall not
have received a letter from Morgan, Keegan & Co., Inc. on or 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.
13.10 Receipt and Sufficiency of Schedules; Due
Diligence. By either HNB or Bastrop, if it does not receive the
Schedules required by this Agreement to be provided by the other
party hereto within 15 business days after the date hereof, or by
either party hereto, if the Schedules provided hereunder disclose
material liabilities, whether actual or contingent, obstacles to
the Merger or other circumstances that, in the good faith judgment
of the party terminating the Agreement, materially alter the
economic basis for, or feasibility of, the Merger; or by Hibernia,
within 60 days after the date hereof, if its due diligence review
of Bastrop results in a good faith conclusion by Hibernia that the
Merger is not feasible on the terms set forth herein.
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 the Bank with and into Hibernia National Bank pursuant to
the Bank Merger Act; and (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 such later date within 60 days of such
date as may be agreed upon between the parties hereto (the date and
time of the Closing being referred to herein as the "Closing
Date"). Immediately upon consummation of the Closing, or at such
other later date as the parties hereto may agree, the Agreement
shall be certified, acknowledged and delivered to the Office of the
Comptroller of the Currency (the "OCC") for filing pursuant to and
in accordance with the provisions of the Bank Merger Act. The
Merger shall become effective as of the date and time of issuance
by the OCC of a certificate of merger relating to the Merger (such
date and time being referred to herein as the "Effective Date").
15. Survival and Termination of Representations, Warranties
and Covenants.
15.1. Except as otherwise provided in this Section
15, the representations, warranties and covenants contained in this
Agreement shall terminate as of the earlier of the Effective Date
or the termination of this Agreement. Upon termination of such
representations, warranties and covenants, such provisions shall be
of no further force or effect, and no party hereto shall have any
legal right to redress, whether for breach of contract or
otherwise, as a result of a breach of any such provision.
15.2. The provisions and agreements set forth in
Sections 3, 5, 9.11, 9.12 and 11 and the last sentence of Section
8.3 hereof shall survive the Closing, if the Closing occurs, for
the benefit of the shareholders, directors and officers of Bastrop
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 12 U.S.C. Section
215a. 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 Bastrop) extend the time for the
performance of any of the obligations or other acts of the other
party hereto and may waive (i) any inaccuracies of the other party
in the representations or warranties contained in this agreement or
any document delivered pursuant hereto, (ii) compliance with any of
the covenants, undertakings, or agreements of the other party, or
satisfaction of any of the conditions precedent to its obligations,
contained herein or (iii) the performance by the other party of any
of its obligations set out herein or therein; provided that no such
waiver executed after approval of this Agreement by the
shareholders of Hibernia or Bastrop shall change the number of
shares of Hibernia Common Stock into which shares of Bastrop Common
Stock will be converted by the Merger. Any waiver by Hibernia or
Bastrop of a condition to its obligation to perform this Agreement
and the subsequent closing hereunder shall be without prejudice to
the rights or remedies it may have arising out of any breach of any
representation, warranty, covenant, or other agreement hereunder.
17. Execution in Counterparts. This Agreement may be
executed in counterparts, each of which shall be deemed to
constitute an original. Each such counterpart shall become
effective when one counterpart has been signed by each party
hereto.
18. Governing Law. This Agreement shall be governed by, and
interpreted in accordance with, the laws of the State of Louisiana
applicable to agreements made and entirely to be performed within
such State, except as federal law may be applicable.
19. Expenses. Each party hereto will bear all expenses
incurred by it in connection with this Agreement and the
transactions contemplated hereby, including the fees, expenses and
disbursements of its counsel and auditors, provided that printing
expenses shall be borne by Hibernia.
20. No Assignment. Prior to the Effective Date, neither
party hereto may assign any of its rights or obligations under this
Agreement to any other person without the prior written consent of
the other 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 the party to
whom directed 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; provided,
however, that notice of termination shall be effective only upon
delivery of such notice to the party entitled to the same and that
any matter shall be deemed to have been disclosed in writing by a
party hereto to the other party hereto on or prior to the date
hereof only if such matter is reflected in a document referring to
this Section 21 received by the persons specified above prior to
the execution hereof. A copy of all notices or other
communications directed to Hibernia shall be sent to:
Hibernia National Bank
313 Carondelet Street
New Orleans, Louisiana 70130
Attention: Corporate Law Division
and a copy of all notices or other communications directed to
Bastrop shall be sent to:
Heiskell, Donelson, Bearman, Adams
Williams & Caldwell
First Tennessee Building
20th Floor
165 Madison Avenue
Memphis, Tennessee 38103
Attention: Robert Walker, 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, any rights,
remedies, obligation or liabilities under or by reason of this
Agreement except as expressly provided herein.
IN WITNESS WHEREOF, the parties hereto have caused this
instrument to be executed in counterparts by their duly authorized
officers and by a majority of the members of their respective
Boards of Directors and their corporate seals to be hereunto
affixed, all as of the day and year first above written.
Hibernia Corporation
/S/ STEPHEN A. HANSEL
Stephen A. Hansel
President and
Chief Executive Officer
Hibernia National Bank
/S/ STEPHEN A. HANSEL
Stephen A. Hansel
President and
Chief Executive Officer
Attest:
/S/ SUSAN KLEIN
Susan Klein
Assistant Secretary
Bastrop National Bank
By: /S/ HENRY WATSON BRIDGES
Henry Watson Bridges
President
Attest:
/S/ PATRICIA C. MERINGER
Patricia C. Meringer
Secretary
APPENDIX B
FORM OF OPINION OF MORGAN, KEEGAN & COMPANY, INC.
Board of Directors
Bastrop National Bank
101 S. Franklin Street
Bastrop, Louisiana 71221
Dear Sirs:
You have requested our opinion with respect to the fairness,
from a financial point of view, to the shareholders of Bastrop
National Bank ("Bastrop") of the exchange rate (the "Exchange
Rate") provided for in the Agreement and Plan of Merger dated as of
November 4, 1993 (the "Agreement") between Bastrop and Hibernia
Corporation, a Louisiana corporation ("Hibernia"). The Agreement
provides for the merger ("Merger") of Bastrop with and into a
wholly-owned subsidiary of Hibernia and, by reason of the Merger,
the conversion of each outstanding share of Common Stock, $1.00 par
value, of Bastrop ("Bastrop Common Stock") into shares of common
stock, $1.00 par value, of Hibernia ("Hibernia Common Stock") based
upon the Exchange Rate, with a cash payment in lieu of any
fractional share. The Exchange Rate is $21,500,000 divided by the
number of outstanding shares of Bastrop Common Stock divided by an
average market price of Hibernia Common Stock as of the closing
date (as more specifically defined in the Agreement).
Morgan Keegan & Company, Inc., as a customary part of its
investment banking business, is continually engaged in the
valuation of businesses and securities in connection with mergers
and acquisitions, recapitalizations, negotiated underwritings,
secondary distributions of securities, private placements and other
transactions.
In arriving at our opinion, we have reviewed, analyzed, and
relied upon: (1) the terms of the Agreement; (2) certain publicly
available information relating to Bastrop and Hibernia which we
believe to be relevant for the purpose of our opinion; (3) certain
financial and operating information with respect to the business,
operations and prospects of Bastrop and Hibernia; (4) Bastrop's
financial position and operating results as compared with those of
certain other banks and bank holding companies we deem comparable;
(5) a comparison of the financial terms of the Merger with the
terms of certain other recent transactions we deem relevant; (6)
the dividend history of Bastrop and Hibernia; and (7) a present
value analysis of Bastrop's Common Stock assuming earnings and
dividends as forecast by Bastrop's management and terminal values
which we deem reasonable. In addition, we have had discussions
with the management of Bastrop and Hibernia concerning their
business, operations, assets, present condition and future
prospects and undertaken such other studies, analyses and
investigations as we deemed appropriate.
We have relied upon the accuracy and completeness of the
financial and other information used by us in arriving at our
opinion without independent verification. With respect to
information provided to us by management of Bastrop and Hibernia,
we have assumed that such information reflects good faith efforts
to describe the present and prospective status of Bastrop and
Hibernia from an operational and financial point of view. In
addition, we have not made or obtained any evaluations or
appraisals of the assets or liabilities of Bastrop or Hibernia.
In rendering our opinion, we have assumed that in the course
of obtaining the necessary regulatory approvals for the Merger no
restrictions will be imposed that will have a material adverse
effect on Hibernia following the Merger and that Hibernia will
continue to operate its business and assets and the business and
assets of Bastrop in the ordinary course in substantially the same
manner as prior to the Merger and has no present intention of
exchanging its stock, selling all or substantially all of its
assets or merging with another company (other than Bastrop). We
further assume that the Agreement will not be modified or amended
so as to alter or change the Exchange Rate and we assume that the
transactions contemplated by the Agreement will be consummated as
described therein.
Morgan Keegan's opinions are directed only to the
Exchange Rate and do not constitute a recommendation to any Bastrop
stockholder as to how such stockholder should vote at the Special
Meeting. We understand that the Merger is conditioned upon, among
other things, receipt by Bastrop and Hibernia of a tax ruling or an
opinion of counsel satisfactory to them, to the effect that the
Merger qualifies as a tax free transaction under the Internal
Revenue Code. We express no opinion as to the tax consequences of
the Merger.
We have acted as financial advisor to Bastrop in connection
with the Merger and have received from Bastrop fees for our
services, including a fee for rendering this opinion. We will also
receive from Bastrop an incentive fee depending on the aggregate
value of the Hibernia Common Stock received by Bastrop's
shareholders pursuant to the terms of the Agreement.
In the ordinary course of our business we may actively trade
the securities of Bastrop and Hibernia for our own account and for
the accounts of our customers and, accordingly, may at any time
hold a long or short position in such securities.
Based upon and subject to the foregoing, we are of the opinion
that, as of the date hereof, the Exchange Rate is fair to the
holders of Bastrop Common Stock, from a financial point of view.
Very truly yours,
MORGAN KEEGAN & COMPANY, INC.
By:_________________________
APPENDIX C
SELECTED PROVISIONS OF FEDERAL LAW RELATING TO THE RIGHTS
OF DISSENTING SHAREHOLDERS
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 held by him when such merger
shall be approved by the Comptroller upon written request made to
the receiving association at any time before thirty days after the
date of consummation of the merger, accompanied by the surrender of
his stock certificates.
(c) Valuation of shares
The value of the shares of any dissenting shareholder shall be
ascertained, as of the effective date of the merger, by an
appraisal made by a committee of three persons, composed of (1) one
selected by the vote of the holders of the majority of the stock,
the owners of which are entitled to payment in cash; (2) one
selectged by the directors of the receiving association; and (3)
one selected by the two so selected. The valuation agreed upon by
any two of the the three appraisers shall govern. If the value so
fixed shall not be satisfactory to any dissenting shareholder who
has requested payment, that shareholder may, within five days after
being notified of ll 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 Bastrop National Bank ("Bastrop") wherein the
Corporation agrees to exchange shares of its common stock for all
of the outstanding shares of common stock of Bastrop and merge
Bastrop into the Bank, authorized by resolutions adopted by the
Board of Directors on November 16, 1993, and (b) with the
securities agencies or officials of various jurisdictions, all
applications, qualifications, registrations or exemptions relating
to such offering under the laws of any such jurisdiction, including
any amendments thereto or other documents required to be filed with
respect thereto or in connection therewith, granting unto said
agents and attorneys, and each of them, full power and authority to
do and perform each and every act and thing requisite and necessary
to be done in and about the premises in order to effectuate the
same as fully to all intents and purposes as the undersigned might
or could do if personally present, and the undersigned hereby
ratifies and confirms all that said agents and attorneys-in-fact,
or any of them may lawfully do or cause to be done by virtue
hereof.
IN WITNESS WHEREOF, the undersigned has hereunto set his hand
on this 14th day of December, 1993.
S/ROBERT W. CLOSE
Robert W. Close
Director
HIBERNIA CORPORATION
P0WER OF ATTORNEY
KNOW ALL MEN BY THESE PRESENTS, that the undersigned Chief
Accounting 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 Bastrop National Bank ("Bastrop") wherein the
Corporation agrees to exchange shares of its common stock for all
of the outstanding shares of common stock of Bastrop and merge
Bastrop into the Bank, authorized by resolutions adopted by the
Board of Directors on November 16, 1993, and (b) with the
securities agencies or officials of various jurisdictions, all
applications, qualifications, registrations or exemptions relating
to such offering under the laws of any such jurisdiction, including
any amendments thereto or other documents required to be filed with
respect thereto or in connection therewith, granting unto said
agents and attorneys, and each of them, full power and authority to
do and perform each and every act and thing requisite and necessary
to be done in and about the premises in order to effectuate the
same as fully to all intents and purposes as the undersigned might
or could do if personally present, and the undersigned hereby
ratifies and confirms all that said agents and attorneys-in-fact,
or any of them may lawfully do or cause to be done by virtue
hereof.
IN WITNESS WHEREOF, the undersigned has hereunto set his hand
on this 14th day of December, 1993.
S/RON. E. SAMFORD, JR.
Ron E. Samford, Jr.
Chief Accounting Officer
HIBERNIA CORPORATION
