As Filed with the Securities and Exchange Commission on January 13, 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 6711 72-0724532
(State or Jurisdiction of (Primary Standard (I.R.S. Employer
Incorporation or Organization) Industrial Classification Identification
Code Number) Number)
313 Carondelet Street
New Orleans, Louisiana 70130
(504) 586-5332
(Address, Including Zip Code, and Telephone Number, Including Area Code,
of Registrant's Principal Executive Offices)
_____________________________
Gary L. Ryan
Associate Counsel
Hibernia Corporation
313 Carondelet Street
New Orleans, Louisiana 70130
(504) 586-5560
(Name, Address, Including Zip Code, and Telephone Number, Including Area Code
of Agent for Service)
COPIES TO:
Patricia C. Meringer
Secretary and Associate Counsel
Hibernia Corporation
313 Carondelet Street
New Orleans, Louisiana 70130
(504) 586-2486
Paul M. Haygood, Esq.
Stone, Pigman, Walther, Wittmann & Hutchinson
546 Carondelet Street
New Orleans, Louisiana 70130
(504) 581-3200
____________________________
<PAGE>
APPROXIMATE DATE OF COMMENCEMENT OF PROPOSED SALE OF SECURITIES TO THE PUBLIC:
As soon as practicable after this registration statement is declared
effective.
If the securities being registered on this Form are being offered in
connection with the formation of a holding company and there is compliance with
General Instruction G, check the following box. ______
/_____/
CALCULATION OF REGISTRATION FEE
_______________________________________________________________________________
Title of Each Amount Proposed Proposed Amount of
Class of to be Maximum Maximum Registration
Securities to Registered(1) Offering Price Aggregate Fee
be Registered Per Share Offering Price
______________________________________________________________________________
Class A
Common Stock,
no par value 2,412,903 Shares $7.75 $18,700,00 $6,448.00
_____________________________________________________________________________
1. Estimated solely for purposes of calculating the filing fee due hereunder,
based on an aggregate value of the stock to be issued in the Merger of
$18, 700,000 and the average of the high and low sales prices of a share
of Hibernia Corporation ("Hibernia") Class A Common Stock, no par value
per share, on January 7, 1994 pursuant to Rule 457 of the Securities Act
of 1933 (the "Securities Act").
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, AS AMENDED, OR UNTIL THE REGISTRATION STATEMENT
SHALL BECOME EFFECTIVE ON SUCH DATE AS THE SECURITIES AND EXCHANGE COMMISSION,
ACTING PURSUANT TO SAID SECTION 8(A), MAY DETERMINE.
<PAGE>
HIBERNIA CORPORATION
Cross Reference Sheet Pursuant to Item 501(b) of Regulation S-K
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; Available
Cover Pages of Prospectus Information
3. Risk Factors, Ratio of Earnings Introduction; the Companies;
To Fixed Charges and Other 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
on Indemnification for Securities
Act Liabilities
10. Information with Respect to Introduction; Available
S-3 Registrants Information; The Companies
11. Incorporation of Certain Available Information
Information by Reference
12. Information with Respect to Not Applicable
S-2 or S-3 Registrants
13. Incorporation of Certain Not Applicable
Information by Reference
14. Information with Respect to Not Applicable
Registrants other than
S-2 or S-3 Registrants
<PAGE>
15. Information with Respect to Not Applicable
S-3 Companies
16. Information with Respect to Not Applicable
S-2 or S-3 Companies
17. Information with Respect to Summary; The Companies; Certain
Companies Other Than S-2 or Information Concerning
S-3 Companies Commercial
18. Information if Proxies, Introduction; Summary; Meeting
Consents or Authorizations Information; Proposed Merger;
are to be Solicited Certain Information Concerning
Commercial; Relationship with
Independent Auditors
19. Information if Proxies, Not Applicable
Consent, Authorizations are not
to be Solicited or in an Exchange
Offer
<PAGE>
COMMERCIAL BANCSHARES, INC.
Post Office Box 575
Franklin, Louisiana 70538
February __, 1994
Dear Shareholder:
You are cordially invited to attend a Special Meeting of Shareholders of
Commercial Bancshares, Inc. ("Commercial"), which will be held at the office of
First Commercial Bank, 301 Northwest Boulevard, Franklin, Louisiana 70538, on
March __, 1994, at 10:00 a.m. (the "Special Meeting").
At the Special Meeting, you will be asked to consider and vote upon a
proposal to approve an Agreement and Plan of Merger (the "Agreement") between
Commercial and Hibernia Corporation ("Hibernia"), pursuant to which Commercial
will merge with and into Hibernia (the "Merger"). Under the terms of the
Agreement, the shareholders of Commercial will receive, in the aggregate, $18.7
million payable in Hibernia's Class A Common Stock, no par value ("Hibernia
Common Stock"), based on its average market price over the five-day period
immediately preceding the last day before the closing of the Merger; provided
that, regardless of the price of the Hibernia Common Stock immediately preceding
the closing of the Merger, Commercial's shareholders will not receive fewer than
8.4 shares of Hibernia Common Stock for each outstanding share of Commercial's
Common Stock, par value $2.00 per share (the "Commercial Common Stock"). If,
before the closing date of the Merger, Hibernia enters into an agreement to
acquire St. Mary Holding Corporation or St. Mary Bank & Trust Company, Inc., the
amount received by Commercial's shareholders in the Merger will increase to
$20.7 million payable in Hibernia Common Stock with a minimum of at least 9.3
shares of Hibernia Common Stock for each outstanding share of Commercial Common
Stock. Hibernia has indicated, however, that it does not currently intend to
acquire St. Mary Holding Corporation or St. Mary Bank & Trust Company, Inc.
Consummation of the Merger is subject to certain conditions, including
approval of the Merger by Commercial's shareholders and various regulatory
agencies, and approval of an amendment to Commercial's Articles of Incorporation
(described below) by Commercial's shareholders.
At the Special Meeting, the shareholders of Commercial also will be asked
to consider and vote upon an amendment to Commercial's Articles of Incorporation
to eliminate provisions of the present Article VII that cannot be complied with
in the context of a merger with a publicly held company such as Hibernia, as
well as provisions that are not consistent with Hibernia's Articles of
Incorporation, and to provide that the Merger may be approved by a majority of
the voting power represented at the Special Meeting (the "Amendment"). The
purpose of the Amendment is to eliminate certain provisions from Commercial's
Articles of Incorporation that are an impediment to the consummation of the
Merger, and to provide that, after the Amendment is approved, the Merger may be
approved by a majority of the voting power present or represented at the Special
Meeting. The proposal to approve the Merger will be withdrawn if the proposed
Amendment is not approved by Commercial's shareholders.
The enclosed Notice of Special Meeting of Shareholders and Proxy Statement-
Prospectus describe the Merger and the proposed Amendment. Please read these
materials carefully and consider the information contained in them. The
Agreement has been approved unanimously by your Board of Directors. The Board
believes the proposed merger with Hibernia to be in the best interests of
Commercial's shareholders. In that connection, the Board has received an
opinion of The Bank Advisory Group, Inc. that the terms of the Merger are fair,
from a financial standpoint, to the shareholders of Commercial.
It is very important that your shares be represented at the Special
Meeting, regardless of whether you plan to attend in person. Approval of the
proposed Amendment requires the affirmative vote of the holders of at least 75%
of the outstanding shares of Commercial Common Stock. If Commercial's
shareholders approve the proposed Amendment, the affirmative vote of a majority
of the voting power of Commercial present or represented at the Special Meeting
will be required to approve the Merger. If Commercial's shareholders do not
approve the proposed Amendment, the proposal to approve the Merger will be
withdrawn. A failure to vote FOR the Amendment (whether by failure to return
the enclosed proxy card, by marking "abstain" on the enclosed proxy card with
respect to the Amendment, or otherwise) will have the same effect as a vote
against the Amendment. Similarly, marking "abstain" on the enclosed proxy card
with respect to the proposal to approve the Merger will have the same effect as
a vote against the proposal to approve the Merger. Therefore, I urge you to (1)
vote for approval of both proposals on the enclosed proxy card and (2) execute,
date and return the enclosed proxy card in the enclosed postage-paid envelope
as soon as possible.
Commercial's Board of Directors has unanimously approved the Merger and
Amendment and unanimously recommends that you vote FOR approval of both
proposals. On behalf of the Board of Directors, I urge you to vote FOR approval
of the Merger and FOR approval of the Amendment to the Articles of
Incorporation.
Very truly yours,
Newman Trowbridge, Jr.
Chairman of the Board
<PAGE>
NOTICE OF SPECIAL MEETING OF SHAREHOLDERS
OF
COMMERCIAL BANCSHARES, INC.
_________, 1994
NOTICE IS HEREBY GIVEN that, pursuant to the call of the directors of
Commercial Bancshares, Inc. ("Commercial"), a Special Meeting of the
shareholders of Commercial will be held at the office of First Commercial Bank,
301 Northwest Boulevard, Franklin, Louisiana 70538, on March __1994, at 10:00
a.m., for the purpose of considering and voting upon the following matters:
1. A proposal to amend Article VII of the Articles of Incorporation of
Commercial as set forth in Appendix A to the accompanying Proxy
Statement-Prospectus (the "Amendment").
2. A proposal to approve a merger of Commercial with and into Hibernia
Corporation ("Hibernia") (the "Merger"), and the related Agreement
and Plan of Merger between Commercial and Hibernia dated as of
September 28, 1993 (the "Agreement"), a copy of which is attached as
Appendix B to the accompanying Proxy Statement-Prospectus and
incorporated herein by this reference, and which Agreement also
provides for the merger of First Commercial Bank (the "Bank") with
and into Hibernia National Bank ("HNB") (the "Bank Merger").
3. The transaction of such other business as may properly come before
the meeting and any adjournments or postponements thereof.
The Board of Directors has fixed the close of business on February __, 1994
as the record date for determining the shareholders entitled to receive notice
of, and to vote at, the Special Meeting.
Each share of common stock, par value $2.00 per share, of Commercial (the
"Commercial Common Stock") will entitle the holder thereof to one vote on all
matters that come before the Special Meeting. Approval of the Amendment
requires the affirmative vote in person or by proxy at the Special Meeting of
the holders of at least 75% of the outstanding shares of Commercial Common
Stock. If the shareholders approve the Amendment, the approval of the Merger
will require the affirmative vote of a majority of the voting power of
Commercial present or represented by proxy at the Special Meeting. If the
proposed Amendment is not approved, the proposal to approve the Merger will be
withdrawn.
Dissenting shareholders who comply with the procedural requirements of the
Business Corporation Law of Louisiana will be entitled to receive payment of the
fair cash value of their shares if the Merger is effected upon approval by less
than eighty percent (80%) of Commercial's total voting power.
By Order of the Board of Directors,
David H. Stiel, Jr.
Secretary
SHAREHOLDERS ARE URGED TO DATE, SIGN AND RETURN THE ENCLOSED PROXY AS PROMPTLY
AS POSSIBLE, REGARDLESS OF WHETHER YOU PLAN TO ATTEND THE MEETING IN PERSON.
IF YOU DO ATTEND THE MEETING, YOU MAY THEN REVOKE YOUR PROXY IN THE MANNER
DESCRIBED IN THE ACCOMPANYING PROXY STATEMENT-PROSPECTUS.
<PAGE>
COMMERCIAL BANCSHARES, INC.
PROXY
This Proxy is Solicited on Behalf of
The Board of Directors of the Commercial Bancshares, Inc.
The undersigned shareholder of COMMERCIAL BANCSHARES, INC., a Louisiana
corporation, hereby appoints NEWMAN TROWBRIDGE, JR. and _____________________,
and each of them, proxies with power of substitution to vote and act for the
undersigned, as designated below, with respect to the number of shares of the
Commercial Common Stock the undersigned would be entitled to vote if personally
present at the Special Meeting of Shareholders of Commercial Bancshares, Inc.
("Commercial"), which will be held at the office of First Commercial Bank, 301
Northwest Boulevard, Franklin, Louisiana 70538, on March __, 1994, at 10:00 a.m.
(the "Special Meeting"), and at any adjournments or postponements thereof, and,
at their discretion, the proxies are authorized to vote upon such other business
as may properly come before the meeting.
THE SHARES REPRESENTED BY THIS PROXY WILL BE VOTED AS DIRECTED HEREIN BY THE
SHAREHOLDER. IF NO DIRECTION IS SPECIFIED WHEN THE DULY EXECUTED PROXY IS
RETURNED, SUCH SHARES WILL BE VOTED IN ACCORDANCE WITH THE RECOMMENDATIONS OF
THE BOARD OF DIRECTORS OF COMMERCIAL.
The Board of Directors of Commercial recommends that you vote: (a) FOR
approval of the Amendment to the Articles of Incorporation of Commercial; and
(b) FOR approval of the Merger of Commercial with and into Hibernia Corporation.
THIS PROXY IS CONTINUED ON THE REVERSE SIDE
PLEASE SIGN ON THE REVERSE SIDE AND RETURN PROMPTLY
<PAGE>
PLEASE MARK YOUR CHOICE LIKE
THIS ___ IN BLUE OR BLACK INK
/__/
___
/___/ ______________________ _____________________
Account Number Common Stock
Item 1 - Approval of the Amendment to the Articles of Incorporation
For Against Abstain
______ ______ ______
/_____/ /_____/ /_____/
Item 2 - Approval of Merger of the Company with and into Hibernia Corporation
For Against Abstain
______ ______ ______
/_____/ /_____/ /_____/
The undersigned hereby acknowledges receipt of a copy of the accompanying
Notice of Annual Meeting of Shareholders and Proxy Statement and hereby revokes
any proxy or proxies heretofore given.
Date_______________________________
Signature__________________________
Please mark, date and sign as your account name appears and return in the
enclosed envelope. If acting as executor, administrator, trustee, guardian, or
in a similar capacity, you should so indicate when signing. If the person
signing is a corporation, partnership or other entity, please sign the full name
of the corporation or partnership or other entity by a duly authorized officer,
partner or other person. If the shares are held jointly, each shareholder named
should sign.
<PAGE>
PROXY STATEMENT
COMMERCIAL BANCSHARES, INC.
SPECIAL MEETING OF SHAREHOLDERS
To Be Held on _____________, 1994
PROSPECTUS
HIBERNIA CORPORATION
CLASS A COMMON STOCK
(NO PAR VALUE)
This Proxy Statement-Prospectus is being furnished to the holders of common
stock, par value $2.00 per share (the "Commercial Common Stock"), of Commercial
Bancshares, Inc. ("Commercial") in connection with the solicitation of proxies
by the Board of Directors of Commercial for use at a special meeting of
shareholders (the "Special Meeting") to be held at 10:00 a.m., local time, on
March __, 1994, at the office of First Commercial Bank, 301 Northwest Boulevard,
Franklin, Louisiana 70538, and at any adjournments or postponements thereof.
At the Special Meeting, the holders of record of Commercial Common Stock
as of the close of business on February __, 1994 (the "Record Date") will
consider and vote upon (i) a proposal to amend Article VII of the Articles of
Incorporation of Commercial as set forth in Appendix A hereto (the "Amendment")
and (ii) a proposal to approve the merger of Commercial with and into Hibernia
(the "Merger"), and the related Agreement and Plan of Merger (the "Agreement")
between Commercial and Hibernia pursuant to which First Commercial Bank (the
"Bank") will also merge with and into Hibernia National Bank ("HNB") (the "Bank
Merger"). Upon consummation of the Merger, each outstanding share of Commercial
Common Stock, except for shares owned beneficially by Hibernia and its
subsidiaries and shares as to which dissenter's rights have been perfected and
not withdrawn or otherwise forfeited, will be converted into the number of
shares of Hibernia's Class A Common Stock, no par value (the "Hibernia Common
Stock"), determined in the manner described below under the heading "PROPOSED
MERGER - Terms of the Merger," with cash being paid in lieu of any fractional
share interests. For a description of the Agreement, which is included in its
entirety as Appendix B to this Proxy Statement-Prospectus, see "PROPOSED
MERGER."
This Proxy Statement-Prospectus also constitutes a prospectus of Hibernia
with respect to the shares of Hibernia Common Stock to be issued pursuant to the
Agreement if the Merger is consummated. The actual number of shares of Hibernia
Common Stock to be issued will be determined in accordance with the terms of the
Agreement.
The outstanding shares of Hibernia Common Stock are listed on the New York
Stock Exchange, Inc. (the "NYSE"). The reported last sale price of Hibernia
Common Stock on the NYSE Composite Transactions Reporting System on
_____________, 1994 was $______ per share.
This Proxy Statement-Prospectus and the accompanying proxy card are first
being mailed to shareholders of Commercial on or about February __, 1994.
THESE SECURITIES HAVE NOT BEEN APPROVED OR DISAPPROVED BY THE SECURITIES
AND EXCHANGE COMMISSION OR ANY STATE SECURITIES COMMISSION, NOR HAS THE
SECURITIES AND EXCHANGE COMMISSION OR ANY STATE SECURITIES COMMISSION PASSED
UPON THE ACCURACY OR ADEQUACY OF THIS PROXY STATEMENT-PROSPECTUS. ANY
REPRESENTATION TO THE CONTRARY IS A CRIMINAL OFFENSE.
THE SHARES OF HIBERNIA COMMON STOCK OFFERED HEREBY ARE NOT SAVINGS
ACCOUNTS, DEPOSITS OR OTHER OBLIGATIONS OF A BANK OR SAVINGS ASSOCIATION AND ARE
NOT INSURED BY THE FEDERAL DEPOSIT INSURANCE CORPORATION OR ANY OTHER
GOVERNMENTAL AGENCY.
The date of this Proxy Statement-Prospectus is February __, 1994.
<PAGE>
TABLE OF CONTENTS
Page
INTRODUCTION . . . . . . . . . . . . . . . . . . . . . . . 3
AVAILABLE INFORMATION. . . . . . . . . . . . . . . . . . . 3
INCORPORATION OF CERTAIN DOCUMENTS BY REFERENCE. . . . . . 4
THE COMPANIES. . . . . . . . . . . . . . . . . . . . . . . 4
SUMMARY. . . . . . . . . . . . . . . . . . . . . . . . . . 7
MEETING INFORMATION. . . . . . . . . . . . . . . . . . . . 10
General. . . . . . . . . . . . . . . . . . . . . . . . . 11
Commercial; Employee Stock Ownership Plan. . . . . . . . 12
Votes Required . . . . . . . . . . . . . . . . . . . . . 12
Recommendation of Commercial's Board . . . . . . . . . . 14
Other Matters . . . . . . . . . . . . . . . . . . . . . 14
PROPOSED AMENDMENT TO ARTICLES OF INCORPORATION OF
COMMERCIAL . . . . . . . . . . . . . . . . . . . . . . . 14
PRO FORMA FINANCIAL INFORMATION. . . . . . . . . . . . . . 18
PROPOSED MERGER. . . . . . . . . . . . . . . . . . . . . . 31
Background of and Reasons for Merger . . . . . . . . . . 31
Terms of the Merger . . . . . . . . . . . . . . . . . . 32
Opinion of Financial Advisor . . . . . . . . . . . . . . 33
Surrender of Certificates . . . . . . . . . . . . . . . 40
Representations and Warranties:
Conditions to the Merger; Waiver . . . . . . . . . . . 40
Regulatory and Other Approvals . . . . . . . . . . . . 41
Business Pending the Merger . . . . . . . . . . . . . 41
Effective Date of the Merger; Termination . . . . . . 42
Management and Operations After the Merger . . . . . . 42
Certain Differences in Rights of Shareholders . . . . 43
Interests of Certain Persons in the Merger . . . . . . 46
Certain Federal Income Tax Consequences . . . . . . . 47
Resale of Hibernia Common Stock . . . . . . . . . . . 48
Rights of Dissenting Shareholders . . . . . . . . . . 49
Dividend Reinvestment Plan . . . . . . . . . . . . . . 50
Accounting Treatment . . . . . . . . . . . . . . . . . 50
CERTAIN REGULATORY CONSIDERATIONS. . . . . . . . . . . . . 51
CERTAIN INFORMATION CONCERNING COMMERCIAL. . . . . . . . . 52
Description of Business . . . . . . . . . . . . . . . 52
Ownership of Commercial Common Stock and Dividends . . 54
RELATIONSHIP WITH INDEPENDENT AUDITORS . . . . . . . . . . 59
VALIDITY OF SHARES . . . . . . . . . . . . . . . . . . . . 59
EXPERTS . . . . . . . . . . . . . . . . . . . . . . . . . 59
COMMERCIAL CONSOLIDATED FINANCIAL INFORMATION. . . . . . . 59
APPENDIX A -- ARTICLES OF AMENDMENT TO ARTICLES OF
INCORPORATION OF COMMERCIAL
APPENDIX B -- AGREEMENT AND PLAN OF MERGER
APPENDIX C -- ARTICLE VII OF ARTICLES OF INCORPORATION OF
COMMERCIAL
APPENDIX D -- OPINION OF THE BANK ADVISORY GROUP, INC.
APPENDIX E -- SELECTED PROVISIONS OF LOUISIANA LAW RELATING
TO RIGHTS OF DISSENTING SHAREHOLDERS
APPENDIX F -- OPINION OF ERNST & YOUNG REGARDING CERTAIN TAX
MATTERS
<PAGE>
INTRODUCTION
This Registration Statement relates to shares of Class A Common Stock, no par
value of Hibernia Corporation, a Louisiana corporation , which will be issued
in connection with the Merger of Commercial Bancshares, Inc., a Louisiana
corporation, with and into Hibernia. The shares of Hibernia Common Stock
offered hereby will be exchanged, upon consummation of the Merger, for the
outstanding shares of common stock, $2.00 par value, of Commercial (the
"Commercial Common Stock").
Shareholders of Commercial will be asked to approve the Merger at a Special
Meeting to be held on March __, 1994. The proxy statement relating to such
Special Meeting is included in this Proxy Statement-Prospectus.
The terms of the Merger are described in this Proxy Statement-Prospectus, and
a copy of the Agreement and Plan of Merger between Hibernia and Commercial is
attached hereto as Appendix B for reference.
AVAILABLE INFORMATION
Hibernia Corporation is subject to the informational requirements of the
Securities Exchange Act of 1934, as amended (the "Exchange Act"), and in
accordance therewith files reports, proxy statements and other information with
the Securities and Exchange Commission (the "Commission"). Such reports, proxy
statements and other information can be inspected and copied at the public
reference facilities of the Commission at Room 1024, 450 Fifth Street, N.W.,
Washington, D.C. 20549, and at the Commission's Regional Offices located at 75
Park Place, 14th Floor, New York, New York 10007 and Northwestern Atrium Center,
500 West Madison Street, Suite 1400, Chicago, Illinois 60661. Copies of such
materials can be obtained from the Public Reference Section of the Commission
at 450 Fifth Street, N.W., Washington, D.C. 20549, at prescribed rates. In
addition, reports, proxy statements and other information concerning Hibernia
may be inspected at the offices of the New York Stock Exchange, Inc. (the
"NYSE"), 20 Broad Street, New York, New York 10005, on which the shares of
Common Stock are listed.
Hibernia has filed with the Commission a registration statement on Form S-4
(together with all amendments and exhibits thereto, the "Registration
Statement") under the Securities Act of 1933, as amended (the "Securities Act")
with respect to the Common Stock offered hereby. This Proxy Statement-
Prospectus does not contain all of the information set forth in the Registration
Statement. For further information with respect to Hibernia and the Hibernia
Common Stock offered hereby, reference is hereby made to the Registration
Statement. Statements contained in this Prospectus concerning the provisions
of certain documents are not necessarily complete and, in each instance,
reference is made to the copy of the document filed as an exhibit to the
Registration Statement, each such statement being qualified in all respects by
such reference. Copies of all or any part of the Registration Statement,
including exhibits thereto, may be obtained, upon payment of the prescribed
fees, at the offices of the Commission and the NYSE, as set forth above.
<PAGE>
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, 1992,
(2) Quarterly Report on Form 10-Q for the quarter ended March 31, 1993,
Quarterly Report on Form 10-Q for the quarter ended June 30, 1993 and Quarterly
Report for the quarter ended September 30, 1993, (3) definitive Proxy Statement
dated March 23, 1993 relating to its 1993 Annual Meeting of Shareholders held
on April 27, 1993 except for the information contained therein under the
headings "Executive Compensation -- Report of the Executive Compensation
Committee" and "-- Stock Performance Graph"; and (4) Current Reports on Form 8-K
dated June 22, 1993, September 13, 1993, December 9, 1993, December 10,1993 and
December 17, 1993.
All documents subsequently filed by Hibernia with the Commission pursuant to
Sections 13(a), 13(c), 14 or 15(d) of the Exchange Act after the date of this
Prospectus and prior to the termination of the offering of Common Stock made
hereby shall be deemed to be incorporated by reference in this Prospectus and
to be a part hereof from the date such documents are filed, except that any and
all information included in any proxy statement filed by Hibernia under the
headings "Executive Compensation -- Report of the Executive Compensation
Committee" and "-- Stock Performance Graph" are hereby expressly excluded from
such incorporation by reference. Any statement contained in a document
incorporated or deemed to be incorporated by reference herein modifies or
supersedes such statement. Any statement so modified or superseded shall not
be deemed, except as so modified or superseded, to constitute a part of this
Prospectus.
Hibernia will provide, without charge, to each person to whom this Prospectus
is delivered, on the written or oral request of any such person, a copy of any
or all of the information incorporated herein by reference other than exhibits
to such information (unless such exhibits are specifically incorporated by
reference into such information). Written or oral requests should be directed
to Hibernia Corporation, 313 Carondelet Street, New Orleans, Louisiana 70130,
Attention: Assistant Corporate Secretary, Telephone (504) 587-3411.
THE COMPANIES
Hibernia. Hibernia is a Louisiana corporation registered under the Bank
Holding Company Act of 1956, as amended ("BHCA"). As of September 30, 1993,
Hibernia had total consolidated assets of approximately $4.6 billion and
shareholders' equity of approximately $404 million. As of September 30, 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 September 30, 1993 Hibernia had a single banking subsidiary, Hibernia
National Bank ("HNB"), that provides retail and commercial banking services
through 102 branches throughout Louisiana. As of September 30, 1993, HNB was
the largest bank headquartered in Louisiana.
The principal executive offices of Hibernia are located at 313 Carondelet
Street, New Orleans, Louisiana 70130, and its telephone number is (504) 587-
5532. For additional information concerning the business and financial
condition of Hibernia, reference should be made to the Hibernia reports
incorporated herein by reference. See "AVAILABLE INFORMATION."
Selected Financial Data.
The closing per share market price of Hibernia Common Stock on July 27, 1993,
the date on which the agreement in principal between Commercial and Hibernia was
executed and announced, was $7.00. On September 28, 1993, the date on which the
Agreement was executed, the closing per share market price of the Hibernia
Common Stock was $8.25.
The following table sets forth certain historical consolidated financial
information for Hibernia. The information contained in the following table is
based on historical consolidated financial statements and related notes thereto
of Hibernia incorporated herein by reference. See "INCORPORATION OF CERTAIN
DOCUMENTS BY REFERENCE" and "AVAILABLE INFORMATION." Pro forma financial
information giving effect to the Merger and other probable merger transactions
is included elsewhere in this Proxy Statement-Propsectus under the heading "PRO
FORMA FINANCIAL INFORMATION."
<PAGE>
HIBERNIA CORPORATION
SELECTED FINANCIAL INFORMATION
Unaudited
($ in thousands, except per share amounts)
Year Ended December 31
_____________________________________________________________________________
1992 1991 1990 1989 1988
_____________________________________________________________________________
Net interest income $ 197,278 $ 234,599 $ 261,318 $ 214,530 $ 189,160
Net income (loss) from
continuing operations (7,915) (143,997) (10,995) 61,644 53,010
Per share:
Net income (loss)
from continuing
operations (0.27) (5.12) (0.40) 2.30 2.08
Cash dividends - .15 .90 .91 .85
Book value 4.48 7.05 13.16 14.45 16.15
SELECTED PERIOD-END BALANCES
Debt 8,269 94,534 104,367 55,406 38,133
Total Assets 4,734,038 6,018,429 7,357,850 6,698,851 5,834,258
<PAGE>
Nine Months Ended
September 30
____________________________________________________________________________
1993 1992
____________________________________________________________________________
Net interest income $ 147,356 $ 153,024
Net income (loss) from
continuing operations 34,011 (10,966)
Per share:
Net income (loss) from
continuing operations 0.41 (0.39)
Cash dividends 0.03 -
Book value 4.83 4.94
SELECTED PERIOD-END BALANCES
Debt - 47,765
Total assets 4,581,004 4,609,037
<PAGE>
Commercial. Commercial is a Louisiana corporation registered under the
BHCA. As of September 30, 1993, Commercial had total consolidated assets of
$163.3 million and shareholders' equity of $13.6 million. Commercial's sole
subsidiary is First Commercial Bank, a Louisiana banking association having
seven offices throughout St. Mary, Iberia and Vermilion Parishes in Louisiana.
The Bank engages in retail and commercial banking services, including taking
deposits and extending secured and unsecured credit.
The principal offices of Commercial are located at 521 Main Street, Franklin,
Louisiana 70538. Its telephone number is (318) 828-5140. For additional
information concerning the business of Commercial and its financial condition,
see "CERTAIN INFORMATION CONCERNING COMMERCIAL" AND "COMMERCIAL CONSOLIDATED
FINANCIAL INFORMATION."
___________________
From time to time, Hibernia investigates and holds discussions and
negotiations in connection with possible transactions with other financial
institutions. At the date hereof, Hibernia has not entered into any agreements
or understanding 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, any such transactions would be subject to
regulatory approval and the approval of shareholders.
SUMMARY
This summary is necessarily general and abbreviated and has been prepared to
assist shareholders of Commercial in their review of this Proxy Statement-
Prospectus. This summary is not intended to be a complete explanation of the
matters covered in this Proxy Statement-Prospectus and is qualified in its
entirety by reference to the more detailed information contained elsewhere in
this Proxy Statement, the Appendices hereto and the documents incorporated
herein by reference, all of which shareholders are urged to read carefully prior
to the Special Meeting.
The Proposed Merger; Amendment to Articles
In accordance with the terms of the Agreement, Commercial will be merged with
and into Hibernia, whereupon the separate existence of Commercial will cease.
Immediately thereafter, the Bank will be merged into HNB, with HNB as the
surviving bank. On the Effective Date, each outstanding share of Commercial
Common Stock, other than shares held by shareholders who exercise and perfect
dissenters' rights in accordance with Louisiana law, will be converted into a
number of shares determined by the application of a formula based upon the
average market price of Hibernia Common Stock for the five trading days
immediately prior to the last trading day before the closing of the Merger (the
"Closing Date"). The aggregate value of Hibernia Common Stock to be exchanged
for the outstanding Commercial Common Stock will be $18.7 million, which may be
increased if certain contingencies, which are not currently considered likely,
occur. Regardless of the market value of the Hibernia Common Stock, however,
each Commercial shareholder is assured of receiving at least 8.4 shares of
Hibernia Common Stock for each share of Commercial Common Stock held by him.
See "PROPOSED MERGER --Terms of the Merger."
Commercial also proposes to amend Article VII of its Articles of
Incorporation, which currently creates significant impediments to the Merger.
This Amendment requires the affirmative vote of at least 75% of the outstanding
Commercial Common Stock. See "PROPOSED AMENDMENT TO THE ARTICLES OF
INCORPORATION OF COMMERCIAL."
Management and Operations After the Merger
After the Effective Date, the offices of the Bank will operate as branch
banking offices of HNB. As of the Effective Date, the directors of Commercial
Bancshares and the Bank will resign their positions as directors. See "PROPOSED
MERGER --Management and Operations After the Merger."
Recommendation of the Board of Directors
The Board of Directors of Commercial has unanimously approved the Agreement,
believes that the Merger is in the best interests of the shareholders and
recommends that the shareholders vote FOR the Merger. The Board of Directors
has received from The Bank Advisory Group, Inc. ("Bank Advisory Group") an
opinion that the terms of the Merger are fair, from a financial standpoint, to
the common shareholders of Commercial. See "PROPOSED MERGER -- Opinion of
Financial Advisor." Commercial's Board believes that the Merger will provide
significant value to all Commercial shareholders and will enable them to
participate in opportunities for growth that Commercial's Board believes the
Merger makes possible. In recommending the Merger to the shareholders,
Commercial's Board of Directors considered, among other factors, the financial
terms of the Merger, the liquidity it will afford Commercial's shareholders and
the likelihood and potential adverse impact of increased competition for
Commercial in its market area if Commercial remains independent. See "PROPOSED
MERGER --Background of and Reasons for the Merger."
Basis for the Terms of the Merger
A number of factors were considered by the Board of Directors of Commercial
in approving the terms of the Merger, including, without limitation, information
concerning the financial condition, results of operations and prospects of
Hibernia, Commercial, HNB and the Bank; the ability of the combined entity to
compete in the relevant banking markets; the market price of Hibernia Common
Stock; the absence of an active trading market for Commercial's common stock;
the dividend policies of each company; the anticipated tax-free nature of the
Merger to Commercial's shareholders for federal income tax purposes; and the
financial terms of other business combinations in the banking industry. See
"PROPOSED MERGER --Background of and Reasons for the Merger."
Advice and Opinion of Financial Advisor
Bank Advisory Group, Commercial's financial advisor, has rendered both oral
and written opinions that the terms of the Merger are fair, from a financial
standpoint, to Commercial's shareholders. A copy of the opinion of Bank
Advisory Group is attached hereto as Appendix D and should be read in its
entirety with respect to the assumptions made therein and other matters
considered. See "PROPOSED MERGER--Opinion of Financial Advisor" for further
information regarding, among other things, the selection of such firm and its
compensation in connection with the Merger.
Votes Required
Approval of the Merger requires the affirmative vote of the holders of a
majority of the outstanding shares of Commercial Common Stock. However, the
Amendment must be approved by the affirmative vote of at least 75% of the
outstanding shares of Commercial Common Stock in order for a majority vote to
be sufficient to approve the Merger. If the Amendment is not so approved, the
proposal to approve the Merger will be withdrawn. Directors of Commercial and
members of their families have voting power with respect to 179,065 shares of
Commercial Common Stock, representing 63.5% of the Commercial Common Stock
outstanding as of the Record Date. Subject to receipt of certain fairness
opinions from Bank Advisory Group, the directors of Commercial have agreed to
vote their stock in favor of approval of the Agreement at any meeting of
Commercial's shareholders held before July 1, 1994 at which the Merger is
considered, unless they are legally not to vote in favor or approval of the
Agreement in the opinion of their counsel. required to abstain from voting or
to vote against the Merger. See "MEETING INFORMATION--Record Date; Voting
Rights" and "CERTAIN INFORMATION RELATING TO COMMERCIAL--Voting Securities and
Certain Holders Thereof."
Conditions; Abandonment; Amendment
Consummation of the Merger is subject to the satisfaction of a number of
conditions, including approval of the Agreement by the shareholders of
Commercial and the Federal Reserve Board and approval of the Bank Merger by the
Office of the Comptroller of the Currency ("OCC"). Applicable law provides that
the Merger may not be consummated until at least 30, but no more than 90, days
after approval of the Federal Reserve Board is obtained. Hibernia has filed
applications for the requisite regulatory approvals. See "PROPOSED MERGER--
Representations and Warranties; Conditions to Closing; Waiver" and "--Regulatory
and Other Approvals."
Substantially all of the conditions to consummation of the Merger (except for
required shareholder and regulatory approvals) may be waived at any time by the
party for whose benefit they were created, and the Agreement may be amended or
supplemented at any time by written agreement of the parties, except that no
such waiver, amendment or supplement executed after approval of the Agreement
by Commercial's shareholders may reduce the ratio of Hibernia Common Stock to
Commercial Common Stock to be issued in the Merger (the "Exchange Ratio"). In
addition, the Agreement may be terminated, either before or after shareholder
approval, under certain circumstances. See "PROPOSED MERGER--Representations
and Warranties; Conditions to Closing; Waiver" and "--Effective Date of the
Merger; Termination."
Certain Federal 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 Commercial Common
Stock for Hibernia Common Stock will not give rise to the recognition of gain
or loss for federal income tax purposes to Commercial's shareholders with
respect to such exchange. The parties have received such an opinion from Ernst
& Young, certified public accountants, who also serve as independent auditors
for Hibernia. A copy of such opinion is attached hereto as Appendix F. See
"PROPOSED MERGER--Certain Federal Income Tax Consequences."
Because of the complexities of the federal income tax laws and because the
tax consequences may vary depending upon a holder's individual circumstances or
tax status, it is recommended that each shareholder of Commercial consult his
or her tax advisor concerning the federal (and any applicable state, local or
other) tax consequences of the Merger to him or her.
Dissenters' Rights
Each holder of Commercial Common Stock who objects to the Merger is entitled
to the rights and remedies of dissenting shareholders provided in Section 12:
131 of the Louisiana Business Corporation Law, as amended, a copy of which is
attached hereto as Appendix E. However, if dissenters' rights are exercised and
perfected with respect to 10% or more of the outstanding shares of Commercial
Common Stock, Hibernia may abandon the Merger. In addition, dissenting
shareholders may receive value for their shares that is more or less than, or
equal to, the value received by other shareholders in the Merger. See "PROPOSED
MERGER--Rights of Dissenting Shareholders."
Differences in Shareholders' Rights
Upon completion of the Merger, shareholders of Commercial, to the extent they
receive shares of Hibernia Common Stock in the Merger, will become shareholders
of Hibernia and their rights as such will be governed by Hibernia's Articles of
Incorporation and Bylaws. The rights of shareholder of Hibernia are different
in certain respects from the rights of shareholders of Commercial Bancshares.
See "PROPOSED MERGER--Certain Differences in Shareholders' Rights."
Accounting Treatment
The parties intend the Merger to be treated as a pooling-of-interests for
financial accounting purposes. If, among other things, holders of more than 10%
of the outstanding shares of Commercial Common Stock exercise and perfect
dissenters' rights, the Merger will not qualify for the pooling-of-interests
method of accounting, and Hibernia will not be obligated to effect the Merger.
See "PROPOSED MERGER -- Accounting Treatment."
MEETING INFORMATION
General
Each copy of this Proxy Statement-Prospectus mailed to holders of Commercial
Common Stock is accompanied by a proxy card furnished in connection with the
solicitation of proxies by Commercial's Board of Directors for use at the
Special Meeting and at any adjournments or postponements thereof. This Proxy
Statement and the accompanying proxy card are first being mailed to shareholders
of Commercial on approximately February __, 1994. The Special Meeting is
scheduled to be held on March __, 1994, at 10:00 a.m. local time, at the office
of First Commercial Bank, 301 Northwest Boulevard, Franklin, Louisiana 70538.
Only holders of record of Commercial Common Stock at the close of business on
February __, 1994 (the "Record Date") are entitled to notice of and to vote at
the Special Meeting. At the Special Meeting, the shareholders of Commercial
will consider and vote upon the following: (i) a proposal to amend the Articles
of Incorporation of Commercial; (ii) a proposal to approve the Merger and the
related Agreement; and (iii) such other matters as may properly be brought
before the Special Meeting.
HOLDERS OF COMMERCIAL COMMON STOCK ARE REQUESTED TO COMPLETE, DATE AND SIGN
THE ACCOMPANYING PROXY CARD AND RETURN IT PROMPTLY TO COMMERCIAL IN THE ENCLOSED
POSTAGE-PAID, ADDRESSED ENVELOPE. FAILURE TO RETURN YOUR PROPERLY EXECUTED
PROXY CARD OR TO VOTE AT THE MEETING WILL HAVE THE SAME EFFECT AS A VOTE AGAINST
THE AMENDMENT AND MAY RESULT IN THE WITHDRAWAL OF THE MERGER PROPOSAL. THE
FAILURE OF THE SHAREHOLDERS TO APPROVE THE AMENDMENT WILL RESULT IN THE
WITHDRAWAL OF THE PROPOSAL TO APPROVE THE MERGER FROM CONSIDERATION AT THE
SPECIAL MEETING.
Any holder of Commercial Common Stock who has delivered a proxy may revoke
it any time before it is voted by giving notice of revocation in writing or
delivering a signed proxy card bearing a later date to Commercial, provided that
such notice or proxy card must actually be received by Commercial before the
vote of shareholders at the Special Meeting. Any notice of revocation or proxy
card should be sent to Commercial at First Commercial Bank, 407 Charity Street,
Abbeville, Louisiana 70511-0550, Attention: David H. Stiel, Jr., Secretary.
The shares of Commercial Common Stock represented by properly executed
proxies received at or before the Special Meeting and not subsequently revoked
will be voted as directed in such proxies. Proxy cards that are received and
that do not contain instructions as to how to vote the shares represented
thereby will be voted FOR approval of the Amendment and FOR approval of the
Merger. If any other matters are properly presented for consideration at the
Special Meeting, the persons named in the enclosed proxy card will have
discretionary authority to vote on such matters in accordance with their best
judgment; provided, however, that such discretionary authority will be exercised
only to the extent permissible under applicable law. If necessary, and unless
contrary instructions are given, the proxy holder also may vote in favor of a
proposal to adjourn the Special Meeting one or more times to permit further
solicitation of proxies in order to obtain sufficient votes to approve the
Amendment and Merger Agreement. As of the date of this Proxy Statement-
Prospectus, Commercial's Board of Directors is unaware of any matter to be
presented at the Special Meeting other than the proposal to amend the Articles
of Incorporation and the proposal to approve the Merger.
The cost of soliciting proxies from shareholders of Commercial will be borne
by Commercial. Such solicitation will be made by mail but also may be made by
telephone or in person by the directors, officers and employees of Commercial
(who will receive no additional compensation for doing so).
COMMERCIAL SHAREHOLDERS SHOULD NOT FORWARD ANY STOCK CERTIFICATES WITH THEIR
PROXY CARDS. IF THE MERGER IS APPROVED, SHAREHOLDERS OF COMMERCIAL WILL RECEIVE
INSTRUCTIONS AS TO EXCHANGING THEIR STOCK CERTIFICATES.
Commercial's Employee Stock Ownership Plan
Each employee of Commercial who is a participant in the Commercial
Bancshares, Inc. Employee Stock Ownership Plan and Trust (the "ESOP") may direct
the trustee of the ESOP (the "Trustee") as to the manner in which shares of
Commercial Common Stock allocated to such participant's account under the ESOP
(the "Plan Shares") shall be voted by the Trustee at the Special Meeting on the
proposals to approve the Amendment and the Merger. Each ESOP participant has
received with this Proxy Statement-Prospectus a letter from the Trustee
providing instructions as to the voting of such participant's Plan Shares and
a Voting Instruction Card to be used by the participant to give voting
directions to the Trustee. In order to direct the Trustee with respect to the
voting of Plan Shares, an ESOP participant must complete, sign and date the
Voting Instruction Card and return it to the Trustee in the envelope provided,
so that it is received by the Trustee no later than __________, 1994. Prior to
the Special Meeting, the Trustee will tabulate the instructions received by the
deadline and shall determine the aggregate votes for and against approval of the
Amendment and the Merger. At the Special Meeting, the Trustee will vote the
shares of Commercial Common Stock held by it on the Record Date for which it has
received instructions in the manner so determined. The Trustee will not vote
any Plan Shares on the proposal to approve the Merger or the Amendment to the
extent it does not receive instructions with respect thereto. The Trustee of
the ESOP holds 15,723 shares of Commercial Common Stock on behalf of the
participants of such plan.
Votes Required
As of the Record Date, there were 281,843 shares of Commercial Common Stock
outstanding and entitled to vote at the Special Meeting, with each share being
entitled to one vote. The affirmative vote of holders of at least 75% of the
outstanding shares of Commercial Common Stock is required to approve the
proposed Amendment. If the Amendment is approved, the affirmative vote of a
majority of the voting power of Commercial present or represented by proxy and
entitled to vote at the Special Meeting will be required to approve the Merger.
Members of Commercial's Board of Directors, along with members of their families
who are expected to vote in favor of approval of the Merger, own 63.5% of the
outstanding Commercial Common Stock and, therefore, will hold, if the Amendment
is approved, sufficient Commercial Common Stock to approve the Merger.
If the Amendment is not approved by Commercial's shareholders, the
affirmative vote of the holders of 75% of the total voting power of Commercial
plus a majority of the Commercial Common Stock that is not deemed owned by any
Major Stockholder, as defined in Article VII of Commercial's Articles of
Incorporation, would be required to approve the Merger. However,
notwithstanding the receipt of such approval, the Merger cannot take place
unless certain provisions of Commercial's Articles of Incorporation are
deleted. See "PROPOSED AMENDMENT TO ARTICLES OF INCORPORATION OF COMMERCIAL--In
General" and "PROPOSED AMENDMENT TO ARTICLES OF INCORPORATION OF COMMERCIAL --
Description of Article VII and Proposed Amendment." The Amendment is designed
to facilitate consummation of the Merger by eliminating those provisions and
adding a provision that expressly permits the approval of the Merger by a
majority of the voting power present or represented at the Special Meeting. See
"PROPOSED AMENDMENT TO ARTICLES OF INCORPORATION OF COMMERCIAL - Reasons For
Approval."
For purposes of the Special Meeting, the presence in person or by proxy of
a majority of the outstanding shares of Commercial Common Stock is necessary to
constitute a quorum of shareholders in order to take action. For these
purposes, shares of Commercial Common Stock which are present, or represented
by proxy, at the Special Meeting will be counted for quorum purposes regardless
of whether the holder of the shares or proxy actually votes on the Amendment or
the Agreement or whether a broker with discretionary authority fails to exercise
its discretionary voting authority with respect to the Amendment or Merger.
Accordingly, an "abstention" will be considered present for quorum purposes, but
will have the same effect as a vote "against" the proposal as to which the
abstention is made. Approval of the Amendment requires the affirmative vote of
at least 75% of the outstanding Commercial Common Stock. For purposes of voting
on the Amendment, therefore, shares not present or represented by proxy at the
Special Meeting, abstentions and "broker non-votes" will have the same effect
as votes "against" the Amendment. If the Amendment is approved, the affirmative
vote of a majority of the voting power of Commercial present or represented by
proxy at the Special Meeting will be necessary to approve the Merger.
Therefore, for purposes of voting on the Merger, "abstentions" and "broker non-
votes" will have the same effect as a vote against the Merger.
Each outstanding share of Commercial Common Stock is entitled to one vote on
each matter that comes before the Special Meeting. As of the Record Date for
the Special Meeting, there were 281,843 shares of Commercial Common Stock
outstanding and entitled to vote at the Special Meeting.
The directors and executive officers of Commercial and their affiliates
beneficially owned a total of 63,212.579 shares or approximately 22% of the
outstanding shares of Commercial Common Stock as of the Record Date. Each
shareholder who is a director has executed an agreement with Hibernia pursuant
to which such shareholder has committed, subject to certain conditions, to vote
the shares of Commercial Common Stock owned by him in favor of the proposal to
approve the Merger. Additionally, Commercial has been advised that all of its
directors and executive officers intend to vote their shares in favor of
approval of the Amendment and the Merger. Members of directors' families who
are expected to vote in favor of the Amendment and the Merger own an additional
approximately 40% of the outstanding Commercial Common Stock.
As of the Record Date, the directors and executive officers of Hibernia and
their affiliates beneficially owned no shares of Commercial Common Stock.
Recommendation of Commercial's Board
Commercial's Board has unanimously approved the Amendment to the Articles of
Incorporation and the Merger and unanimously recommends that Commercial's
shareholders vote FOR approval of the Amendment, and FOR approval of the Merger.
See "PROPOSED MERGER -- Background of and Reasons for the Merger" and "--
Opinion of Financial Advisor".
Other Matters
The Board of Directors of Commercial is not aware of any business to be acted
upon at the Special Meeting other than consideration of the proposed Amendment
and the Merger. If, however, other matters are properly brought before the
Special Meeting, or any adjournments or postponements thereof, the persons
appointed as proxies will have discretion to vote or abstain from voting thereon
according to their best judgment.
PROPOSED AMENDMENT TO
ARTICLES OF INCORPORATION OF COMMERCIAL
In General
At the Special Meeting, Commercial will seek shareholder approval of the
Amendment to amend Article VII of the Articles of Incorporation of Commercial
as currently in effect. A copy of Article VII of Commercial's Articles of
Incorporation as currently in effect is attached to this Proxy Statement-
Prospectus as Appendix C and a copy of the proposed Amendment thereto is
attached as Appendix A. Article VII contains provisions described more fully
below that are significant impediments to any attempts to acquire Commercial.
Unless repealed or modified, Article VII will prevent the Merger from taking
place. Under Article VII, the Merger can occur only if certain conditions are
satisfied, including the following: (i) upon consummation of the Merger, the
holders of Commercial Common Stock must retain the proportionate equity and
voting interests in Hibernia that such holders had in Commercial before the
Merger; and (ii) upon consummation of the Merger, the Articles of Incorporation
of Hibernia would be required to contain provisions "substantially the same" as
those contained in Article VII of Commercial's Articles of Incorporation. In
order to comply with the first of these requirements, Hibernia would have to
repurchase all of its existing common stock and then issue all of those shares
to Commercial shareholders. Even if Hibernia could repurchase all of its common
stock, which could not be assured since its shareholders would have no
obligation to sell their shares back to Hibernia, the cost of doing so would
render the effective cost of the Merger to Hibernia more than the cost of
purchasing a bank forty times the size of the Bank. Consequently, the cost of
compliance with those provisions is prohibitive, for Hibernia and for nearly any
other bank holding company that might wish to merge with Commercial.
Accordingly, the repeal or modification of Article VII is necessary to the
consummation of the Merger. Commercial's Board of Directors unanimously
recommends the proposed Amendment to Article VII.
Description of Article VII and Proposed Amendment
Article VII contains several provisions that impede the accomplishment of
certain types of major transactions, including transactions such as the Merger.
The Amendment, if approved, will result in the repeal of all of these provisions
of Article VII. The following description of Article VII is qualified in its
entirety by the exact terms and provisions of Article VII, a copy of which is
attached as Appendix C.
75% Vote Requirement for Certain Transactions. Article VII prevents
Commercial from engaging in certain major transactions unless they first are
approved by the affirmative vote of the holders of 75% of the total voting power
of Commercial. The transactions subject to this requirement include (i) the
merger or consolidation of Commercial with or into any "Major Stockholder" (as
defined in Article VII), (ii) any sale, lease, exchange, mortgage, pledge,
transfer or other alienation to or with any Major Stockholder of all or any
substantial part of the assets of Commercial, (iii) any plan of recapitalization
or reclassification of shares of any class of capital stock entitled to vote
generally in the election of directors, and (iv) any plan or proposal to
liquidate or dissolve Commercial. The term "Major Stockholder" includes a
person and such person's Associates and Affiliates (as those terms are defined
in Article VII) who, in the aggregate, beneficially own, directly or indirectly,
5% or more of the outstanding shares of any class of capital stock of Commercial
entitled to vote generally in the election of directors. A person is deemed to
be a beneficial owner of shares which such person, together with any Affiliate
or Associate of such person, owns or has a right to acquire, or with respect to
which such person and any of such person's Associates or Affiliates has any
agreement, arrangement or understanding to acquire, hold, vote or alienate. For
purposes of Article VII, Hibernia may be deemed to be a Major Stockholder. As
a result, if the foregoing provisions of Article VII are not modified, the
Merger could only be approved by the affirmative vote of the holders of 75% of
the total voting power of Commercial. Approval of the Amendment will reduce the
vote necessary to approve the Merger to the affirmative vote of a majority of
the voting power of Commercial present or represented by proxy at the Special
Meeting. Amendment of Article VII requires the affirmative vote of the holders
of at least 75% of the outstanding shares of Commercial Common Stock.
Proportionate Equity and Voting Rights in Surviving Corporation. Article VII
requires that, in every merger or consolidation in which Commercial is not the
surviving corporation, the holders of Commercial's capital stock must retain
their proportionate equity and voting interests in the surviving or resulting
corporation that such holders had in Commercial before the merger or
consolidation. As discussed above, compliance with such a provision renders the
cost of the Merger prohibitive for Hibernia or any merger partner having
substantial equity ownership. Accordingly, the Merger cannot be consummated
unless this requirement of Article VII is eliminated.
Substantially Similar Provisions in Articles of Incorporation of Surviving
Corporation. Article VII also requires that, in every merger or consolidation
in which Commercial is not the surviving or resulting corporation, the Articles
of Incorporation of the surviving or resulting corporation contain provisions
"substantially the same" as those of Article VII. Article VII would require,
in the context of the Merger, that the Articles of Incorporation of Hibernia,
as the surviving corporation, contain provisions that are substantially the same
as those contained in Article VII of Commercial's Articles of Incorporation.
If Hibernia were to amend its Articles of Incorporation to include provisions
that are substantially the same, its shares of common stock could not be listed
on the New York Stock Exchange. As a result, the Merger cannot be consummated
unless this requirement of Article VII is modified.
Approval by Independent Majority of Shareholders. Article VII provides that,
in the case of any merger or consolidation of Commercial into a Major
Stockholder or alienation of all or a substantial part of the assets of
Commercial to a Major Stockholder, the shareholder vote approving the
transaction must also include the affirmative vote of a majority of the shares
of capital stock entitled to vote that are not deemed owned by the Major
Stockholder. Each of Commercial's directors has entered into an agreement with
Hibernia under which (among other things) the director has agreed, subject to
certain conditions, to vote the shares of Commercial Common Stock owned by such
director in favor of the Merger (the "Joinder Agreement"). As a result of these
agreements, Hibernia may be deemed to be the beneficial owner of the shares of
Commercial Common Stock that are deemed under Article VII to be owned by such
directors and, therefore, Hibernia may be deemed to be a Major Stockholder of
Commercial for purposes of Article VII. As such, unless this provision of
Article VII is amended, the Merger would require the affirmative vote of a
majority of the shares of Commercial Common Stock not deemed owned by Hibernia.
Amendment of this provision, along with the provisions of Article VII requiring
the affirmative vote of the holders of 75% of the total voting power of
Commercial to approve the Merger, will mean that directors of Commercial, along
with members of their families who are expected to vote in favor of approving
the Merger, will hold sufficient Commercial Common Stock to approve the Merger.
75% Vote Requirement for Amendment. Article VII provides that any amendment
to the Articles of Incorporation of Commercial that would amend or repeal any
provision of Articles IV, VI and VII must be approved by the affirmative vote
of holders of at least 75% of the outstanding shares of Commercial Common
Stock. The Amendment would eliminate this provision; however, Article IX(B) of
Commercial's Articles of Incorporation similarly requires the affirmative vote
of 75% of the total voting power of Commercial in order to amend Articles IV,
VI and VII (and, in addition, Article IX).
Lesser Vote Required to Approve Merger. The Amendment expressly provides
that the shareholders may approve a merger of Commercial with or into Hibernia
by the affirmative vote of a majority of the voting power of Commercial present
or represented at any annual or special meeting called for that purpose. The
Amendment further clarifies that the Merger may be approved by such a vote,
notwithstanding that the merger may result in the amendment of all or any
portion of the Articles of Incorporation of Commercial, and notwithstanding the
provisions of Articles III, IV, VI and IX prohibiting amendments of those
articles unless first approved by, in the case of Article III, two-thirds of the
shareholders, and in the case of Articles IV, VI, VII and IX, 75% of the total
voting power of Commercial. The purpose of these provisions is to clarify that
a majority of the voting power present or represented at the Special Meeting is
permitted to approve the Merger and that no other action on the part of the
shareholders will be necessary for the Merger to take effect.
Reasons for Approval
One of the purposes of Article VII and certain other provisions of
Commercial's Articles of Incorporation is to render more difficult the
accomplishment by Commercial of certain major transactions, such as any merger,
exchange, or sale of all or substantially all of Commercial's assets, as a means
of discouraging unwanted takeover attempts. The proposed Merger of Commercial
with and into Hibernia has been determined by Commercial's Board to be in the
best interests of Commercial and its shareholders for the reasons stated under
"PROPOSED MERGER -- Background of and Reasons for Merger." Therefore,
Commercial's Board recommends adoption of the Amendment in order to facilitate
approval of the Merger. While it might be possible to delete only the portions
of Article VII that create significant impediments to the Merger, Commercial's
Board nevertheless recommends deletion of the entirety of Article VII as
currently in effect, and adoption of the amended Article VII, in order to
facilitate approval of the Merger. Members of Commercial's Board, along with
members of their families who are expected to vote in favor of approval of the
Merger, own 63.5% of the outstanding Commercial Common Stock and, therefore,
will hold, if the Amendment is approved, sufficient Commercial Common Stock to
approve the Merger at the Special Meeting.
If the Amendment is adopted, the protections of the existing Article VII
against unwanted takeover attempts will no longer be in place. In such event,
if the Merger then is not subsequently consummated, it is expected that
Commercial's Board would consider the desirability of recommending to
Commercial's shareholders re-adoption of the same or similar provisions.
Required Vote
Under the provisions of Article VII and Article IX(B) of Commercial's
Articles of Incorporation, approval of the Amendment requires the affirmative
vote of the holders of at least 75% of all the outstanding shares of Commercial
Common Stock. Directors and executive officers of Commercial and their
affiliates having beneficial ownership derived from voting power, as of the
Record Date, of approximately 22% of the Commercial Common Stock have indicated
that they intend to vote for the approval of the Amendment. An additional
approximately 40% of the outstanding Commercial Common Stock is owned by members
of the directors' families who are expected to vote in favor of the Amendment.
THE BOARD OF DIRECTORS OF COMMERCIAL UNANIMOUSLY RECOMMENDS THAT YOU VOTE
"FOR" THE AMENDMENT TO THE ARTICLES OF INCORPORATION.
PRO FORMA FINANCIAL INFORMATION
The information in the column titled "Hibernia" on the pro forma Balance
Sheet is summarized from Hibernia's September 30, 1993 balance sheet on Form 10-
Q and the pro forma statements of income are summarized from Hibernia's Form 10-
Q for the nine months ended September 30, 1993 and Hibernia's audited statement
of income in its Annual Report on Form 10-K for the years ended December 31,
1992. The information contained in the columns titled "Commercial Bancshares,
Inc.", "Bastrop National Bank", "First Bancorp of Louisiana, Inc." and "First
Continental Bancshares, Inc." are based on September 30, 1993 and 1992 and
December 31, 1992, 1991 and 1990 financial statements of those entities. The
pro forma financial statements do not purport to be indicative of the results
that actually would have occurred if the pending transactions had occurred on
the dates indicated or that may be obtained in the future.
On November 4, 1993, Hibernia announced that it had reached an agreement to
merge with First Bancorp of Louisiana, Inc. ("First Bancorp"). First Bancorp
is a bank holding company headquartered in Monroe, Louisiana that owns First
National Bank of West Monroe and Southern National Bank of Tallulah. As of
September 30, 1993, First Bancorp had consolidated assets of approximately $ 225
million and operated ___ banking branches in Monroe and Tallulah. Shareholders
of First Bancorp will receive in the merger shares of Hibernia Common Stock
valued at $36 million, which amount may be increased under certain circumstances
if this merger is not consummated by March 31, 1994.
On November 4, 1993, Hibernia announced that it had reached an agreement to
merge with Bastrop National Bank ("Bastrop). Bastrop is a national bank
headquartered in Bastrop, Louisiana which operates ___ branches in Morehouse
Parish and had, as of September 30, 1993, total assets of approximately $123
million. Shareholders of Bastrop will receive in the merger shares of Hibernia
Common Stock valued at $21.5 million.
On December 6, 1993, Hibernia announced that it had reached an agreement to
merge with First Continental Bancshares, Inc. ("First Continental"). First
Continental is a bank holding company headquartered in Jefferson Parish,
Louisiana and owns all of the stock of First National Bank of Jefferson Parish
("FNJ"). As of September 30, 1993, First Continental reported consolidated
assets of approximately $396 million, and FNJ operated eight branches in
Jefferson Parish. The transaction will be effected through an exchange of
Hibernia Common Stock equity securities of First Continental. Based on the
market price of Hibernia Common Stock on the date of this Proxy Statement-
Prospectus, the aggregate value of the Hibernia Common Stock to be exchanged in
this merger would be approximately $__ million.
Each of these transactions will be accounted for as a pooling of interests.
The mergers with First Bancorp, Bastrop and First Continental are subject to
the satisfaction of certain conditions similar to those described herein with
regard to the Merger. There can be no assurance that any or all of such
proposed mergers will occur, or that the timing of the consummation of such
mergers will be as assumed in the Pro Forma Financial Statements.
The following pro forma financial statements reflect Hibernia's pending
mergers as described in its public reports and press releases, giving effect to
the assumptions and adjustments described in the accompanying notes.
<PAGE>
PRO FORMA COMBINED SELECTED FINANCIAL INFORMATION
(Unaudited)
The following table sets forth certain unaudited pro forma combined financial
information for Hibernia and Commercial. This table is based on and should be
read in conjunction with the historical financial statements and related notes
of Hibernia which are incorporated herein by reference and of Commercial which
are contained elsewhere in this Proxy Statement-Prospectus. The table also
gives effect to other probable mergers to which Hibernia Corporation is a party,
as discussed in Note C to the pro forma combined financial statements. These
mergers include Bastrop National Bank, First Bancorp of Louisiana, Inc. and
First Continental Bancshares, Inc. The pro forma information, which reflects
the mergers using the pooling of interests method of accounting, is presented
for informational purposes only and should not be construed as indicative of the
actual operations that would have occurred had the mergers been consummated at
the beginning of the periods indicated below or which may occur after the
mergers are consummated. The pro forma information gives effect to the issuance
of 2,493,333 shares of Hibernia Common Stock for all the outstanding shares of
Commercial Bancshares, Inc. and 12,159,584 shares of Hibernia Corporation common
stock for all the outstanding shares of Bastrop National Bank, First Bancorp of
Louisiana, Inc. and First Continental Bancshares, Inc. in each of the periods
presented.
<PAGE>
<TABLE>
<CAPTION>
PRO FORMA HIBERNIA CORPORATION*
PRO FORMA COMBINED SELECTED FINANCIAL INFORMATION
Nine Months Ended
Year Ended December 31 September 30
Unaudited ($ in thousands, except per share amounts) 1992 1991 1990 1993 1992
<S> <C> <C> <C> <C> <C>
Net interest income $203,816 $240,189 $266,235 $152,249 $157,900
Net income (loss) from continuing operations (6,326) (143,127) (11,862) 35,203 (9,656)
Per share:
Net income (loss) from continuing operations (0.20) (4.68) (0.40) 0.41 (0.31)
Cash dividends - 0.14 0.82 0.03 -
Book value 4.49 6.80 12.36 4.85 4.93
SELECTED PERIOD-END BALANCES
Debt 11,814 101,822 112,517 - 51,310
Total assets 4,914,279 6,192,821 7,532,039 4,740,895 4,778,572
* Includes Hibernia Corporation and Commercial Bancshares, Inc.
<CAPTION>
TOTAL HIBERNIA CORPORATION**
PRO FORMA COMBINED SELECTED FINANCIAL INFORMATION
Nine Months Ended
Year Ended December 31 September 30
Unaudited ($ in thousands, except per share amounts) 1992 1991 1990 1993 1992
<S> <C> <C> <C> <C> <C>
Net interest income $234,398 $263,348 $285,479 $176,091 $180,757
Net income (loss) from continuing operations (1,752) (141,367) (19,533) 40,175 (5,362)
Per share:
Net income (loss) from continuing operations (0.04) (3.31) (0.46) 0.41 (0.12)
Cash dividends 0.08 0.12 0.60 0.03 0.01
Book value 4.31 5.31 9.25 4.57 4.36
SELECTED PERIOD-END BALANCES
Debt 25,710 127,566 138,876 500 73,566
Total assets 5,592,710 6,862,752 8,172,331 5,452,194 5,444,898
** Includes Hibernia Corporation, Commercial Bancshares, Inc., Bastrop National Bank,
First Bancorp of Louisiana, Inc. and First Continental Bancshares, Inc.
</TABLE>
<PAGE>
PRO FORMA COMBINED BALANCE SHEET
(Unaudited)
The following unaudited pro forma combined balance sheet combines the
historical balance sheets of Hibernia and Commercial as if the Merger had been
effective on September 30, 1993. This unaudited pro forma combined balance
sheet should be read in conjunction with the historical financial statements and
related notes of Hibernia which are incorporated herein by reference and of
Commercial which are contained elsewhere in this Proxy Statement-Prospectus.
The unaudited pro forma combined balance sheet also gives effect to other
probable mergers to which Hibernia is a party, as discussed in Note C to the pro
forma combined financial statements. These mergers include Bastrop National
Bank, First Bancorp of Louisiana, Inc. and First Continental Bancshares, Inc.
and have been included in the pro forma combined balance sheet as if the mergers
had been effective on September 30, 1993.
<PAGE>
<TABLE>
<CAPTION>
HIBERNIA CORPORATION
PRO FORMA COMBINED BALANCE SHEET
September 30, 1993
PRO FORMA
COMMERCIAL PRO HIBERNIA
HIBERNIA BANCSHARES, FORMA CORPORATION
Unaudited ($ in thousands) CORPORATION INC. ADJ. (WITH C.B.I.)
<S> <C> <C> <C> <C>
ASSETS
Cash and due from banks $210,728 $6,325 $217,053
Interest-bearing time deposits in domestic banks 1,000 38 1,038
Federal funds sold and securities purchased
under agreements to resell 165,000 2,300 (3,408)B 163,892
Securities held for sale 386,179 - 386,179
Investment securities 1,496,060 84,967 1,581,027
Loans 2,240,981 61,621 2,302,602
Unearned income (3,640) (3) (3,643)
Reserve for possible loan losses (183,925) (1,320) (185,245)
Loans, net 2,053,416 60,298 2,113,714
Bank premises and equipment 85,111 3,064 88,175
Customers' acceptance liability 3,381 - 3,381
Other assets 180,129 6,307 186,436
TOTAL ASSETS $4,581,004 $163,299 ($3,408) $4,740,895
LIABILITIES
Deposits:
Demand, noninterest-bearing $733,433 $20,521 $753,954
Interest-bearing 3,237,868 124,069 3,361,937
Total Deposits 3,971,301 144,590 4,115,891
Federal funds purchased and securities sold
under agreements to repurchase 110,240 - 110,240
Liability on acceptances 3,381 - 3,381
Payables arising from securities transactions
not yet settled 20,600 - 20,600
Other liabilities 71,497 1,725 (63)B 73,159
Debt - 3,345 (3,345)B -
TOTAL LIABILITIES 4,177,019 149,660 (3,408) 4,323,271
SHAREHOLDERS' EQUITY
Preferred Stock - - -
Common Stock 160,481 629 4,158 A 165,268
Surplus 404,603 591 (5,312)A 399,882
Treasury Stock - (1,154) 1,154 A -
ESOP commitment - - -
Retained earnings (deficit) (161,099) 13,573 (147,526)
TOTAL SHAREHOLDERS' EQUITY 403,985 13,639 0 417,624
TOTAL LIABILITIES AND
SHAREHOLDERS' EQUITY $4,581,004 $163,299 ($3,408) $4,740,895
</TABLE>
<PAGE>
<TABLE>
<CAPTION>
HIBERNIA CORPORATION
PRO FORMA COMBINED BALANCE SHEET
September 30, 1993
PRO FORMA FIRST FIRST TOTAL
HIBERNIA BASTROP BANCORP CONTINENTAL PRO PRO FORMA
CORPORATION NATIONAL OF LOUISIANA, BANCSHARES, FORMA HIBERNIA
Unaudited ($ in thousands) (WITH C.B.I.) BANK INC. INC. ADJ. CORPORATION
<S> <C> <C> <C> <C> <C> <C>
ASSETS
Cash and due from banks $217,053 $3,367 $9,785 $14,611 $244,816
Interest-bearing time deposits in domestic banks 1,038 - 1,077 - 2,115
Federal funds sold and securities purchased
under agreements to resell 163,892 4,850 6,700 15,000 (19,588)E 158,465
(12,389)D
Securities held for sale 386,179 - - - 386,179
Investment securities 1,581,027 74,006 103,636 117,758 (750)E 1,875,677
Loans 2,302,602 39,026 99,645 238,354 2,679,627
Unearned income (3,643) (477) (416) (9,227) (13,763)
Reserve for possible loan losses (185,245) (387) (1,511) (6,735) (193,878)
Loans, net 2,113,714 38,162 97,718 222,392 2,471,986
Bank premises and equipment 88,175 1,323 2,008 6,120 97,626
Customers' acceptance liability 3,381 - - - 3,381
Other assets 186,436 1,776 3,947 19,790 211,949
TOTAL ASSETS $4,740,895 $123,484 $224,871 $395,671 ($32,727) $5,452,194
LIABILITIES
Deposits:
Demand, noninterest-bearing $753,954 $14,028 $28,435 $56,824 $853,241
Interest-bearing 3,361,937 93,699 166,858 288,712 3,911,206
Total Deposits 4,115,891 107,727 195,293 345,536 4,764,447
Federal funds purchased and securities sold
under agreements to repurchase 110,240 401 9,190 11,927 131,758
Liability on acceptances 3,381 - - - 3,381
Payables arising from securities transactions
not yet settled 20,600 - - - 20,600
Other liabilities 73,159 721 1,780 10,653 (4,138)E 82,175
Debt - - 5,800 11,774 (15,900)E 500
(800)C
(374)C
TOTAL LIABILITIES 4,323,271 108,849 212,063 379,890 (21,212) 5,002,861
SHAREHOLDERS' EQUITY
Preferred Stock - - - 11,422 (11,422)C -
Common Stock 165,268 300 1,364 2,145 19,537 C 188,614
Surplus 399,882 1,000 6,744 2,741 (8,698)C 401,669
Treasury Stock - - (1,639) (118) 1,757 C -
ESOP commitment - - (500) - (500)
Retained earnings (deficit) (147,526) 13,335 6,839 (409) (300)E (140,450)
(12,389)D
TOTAL SHAREHOLDERS' EQUITY 417,624 14,635 12,808 15,781 (11,515) 449,333
TOTAL LIABILITIES AND
SHAREHOLDERS' EQUITY $4,740,895 $123,484 $224,871 $395,671 ($32,727) $5,452,194
See notes to Pro Forma Combined Financial Statements.
</TABLE>
<PAGE>
PRO FORMA COMBINED STATEMENTS OF INCOME
(Unaudited)
The following unaudited pro forma combined statements of income for the nine
months ended September 30, 1993 and 1992 and the years ended December 31, 1992,
1991 and 1990 combine the historical statements of income of Hibernia and
Commercial as if the merger had been effective on January 1, 1990. These
unaudited pro forma combined statements of income should be read in conjunction
with the historical financial statements and related notes of Hibernia and
Commercial contained elsewhere in this Proxy Statement-Prospectus. The cost
associated with the Merger, estimated to be approximately $____________ will be
accounted for as a current period expense upon consummation of the Merger and
has not been reflected in the pro forma combined statements of income. The
unaudited pro forma combined statements of income also give effect to other
probable mergers to which Hibernia is a party, as discussed in Note C to the pro
forma combined financial statements. These mergers include Bastrop National
Bank, First Bancorp of Louisiana, Inc. and First Bancorp of Louisiana, Inc. and
First Continental Bancshares, Inc. and have been included in the pro forma
combined statements of income as if the mergers had been effective on January
1, 1990.
<PAGE>
<TABLE>
<CAPTION>
HIBERNIA CORPORATION
PRO FORMA COMBINED STATEMENT OF INCOME
Nine Months Ended September 30, 1993
PRO FORMA
COMMERCIAL HIBERNIA
HIBERNIA BANCSHARES, CORPORATION
Unaudited ($ in thousands, except per share data) CORP. INC. (WITH C.B.I.)
<S> <C> <C> <C>
Interest Income
Interest and fees on loans $138,259 $4,140 $142,399
Interest on securities:
U.S. government securities and obligations of
U.S. government agencies 80,465 3,819 84,284
Obligations of states and political subdivisions 1 30 31
Trading account interest 24 - 24
Interest on time deposits in domestic banks 188 1 189
Interest on federal funds sold and securities
purchased under agreements to resell 7,005 136 7,141
Total Interest Income 225,942 8,126 234,068
Interest Expense
Interest on deposits 75,643 3,045 78,688
Interest on federal funds purchased and
securities sold under agreements to repurchase 2,664 - 2,664
Interest on debt and other 279 188 467
Total Interest Expense 78,586 3,233 81,819
Net Interest Income 147,356 4,893 152,249
Provision for possible loan losses 11,300 75 11,375
Net Interest Income After Provision for
Possible Loan Losses 136,056 4,818 140,874
Noninterest Income
Trust fees 9,351 - 9,351
Service charges on deposits 22,507 611 23,118
Other service, collection and exchange charges 11,553 138 11,691
Gain on settlement of acquired loans 1,031 - 1,031
Other operating income 5,633 38 5,671
Securities gains, net - - -
Total Noninterest Income 50,075 787 50,862
Noninterest Expense
Salaries and employee benefits 62,280 1,764 64,044
Occupancy expense, net 15,073 313 15,386
Equipment expense 8,167 297 8,464
Data processing expense 12,199 13 12,212
Foreclosed property expense 2,689 81 2,770
Other operating expense 51,712 1,338 53,050
Total Noninterest Expense 152,120 3,806 155,926
Income Before Income Taxes and
Cumulative Effect of Accounting Change 34,011 1,799 35,810
Income tax expense - 607 607
Income from Continuing Operations $34,011 $1,192 $35,203
Pro Forma Weighted Average Common Shares 83,033,847 2,493,333 85,527,180
Pro Forma Income Per Common Share
from Continuing Operations (G) $0.41
See notes to Pro Forma Combined Financial Statements.
</TABLE>
<PAGE>
<TABLE>
<CAPTION>
HIBERNIA CORPORATION
PRO FORMA COMBINED STATEMENT OF INCOME
Nine Months Ended September 30, 1993
(cont.)
PRO FORMA FIRST FIRST TOTAL
HIBERNIA BASTROP BANCORP CONTINENTA PRO PRO FORMA
CORPORATION NATIONAL OF LOUISIANA,BANCSHARES FORMA HIBERNIA
Unaudited ($ in thousands, except per share data) (WITH C.B.I BANK INC. INC. ADJ. CORPORATION
<S> <C> <C> <C> <C> <C> <C>
Interest Income
Interest and fees on loans $142,399 $2,395 $5,192 $17,280 $167,266
Interest on securities:
U.S. government securities and obligations of
U.S. government agencies 84,284 3,375 3,032 5,190 95,881
Obligations of states and political subdivisions 31 455 589 9 1,084
Trading account interest 24 - - - 24
Interest on time deposits in domestic banks 189 - 75 - 264
Interest on federal funds sold and securities
purchased under agreements to resell 7,141 142 136 302 7,721
Total Interest Income 234,068 6,367 9,024 22,781 272,240
Interest Expense
Interest on deposits 78,688 2,556 2,976 6,982 91,202
Interest on federal funds purchased and
securities sold under agreements to repurchase 2,664 156 176 2,996
Interest on debt and other 467 6 114 1,364 1,951
Total Interest Expense 81,819 2,562 3,246 8,522 96,149
Net Interest Income 152,249 3,805 5,778 14,259 176,091
Provision for possible loan losses 11,375 28 (145) 725 11,983
Net Interest Income After Provision for
Possible Loan Losses 140,874 3,777 5,923 13,534 164,108
Noninterest Income
Trust fees 9,351 - 7 541 9,899
Service charges on deposits 23,118 377 558 2,078 26,131
Other service, collection and exchange charges 11,691 107 407 729 12,934
Gain on settlement of acquired loans 1,031 - - - 1,031
Other operating income 5,671 16 12 378 (676) F 5,401
Securities gains, net - 50 52 8 110
Total Noninterest Income 50,862 550 1,036 3,734 (676) 55,506
Noninterest Expense
Salaries and employee benefits 64,044 1,019 2,057 5,812 72,932
Occupancy expense, net 15,386 209 475 545 16,615
Equipment expense 8,464 104 233 541 9,342
Data processing expense 12,212 12 143 546 (541) F 12,372
Foreclosed property expense 2,770 - (93) 3,676 6,353
Other operating expense 53,050 748 1,396 3,550 (135) F 58,609
Total Noninterest Expense 155,926 2,092 4,211 14,670 (676) 176,223
Income Before Income Taxes and
Cumulative Effect of Accounting Change 35,810 2,235 2,748 2,598 0 43,391
Income tax expense 607 611 825 1,173 3,216
Income from Continuing Operations $35,203 $1,624 $1,923 $1,425 $0 $40,175
Pro Forma Weighted Average Common Shares 85,527,180 2,866,667 4,800,000 4,492,917 97,686,764
Pro Forma Income Per Common Share
from Continuing Operations (G) $0.41 $0.41
See notes to Pro Forma Combined Financial Statements.
</TABLE>
<PAGE>
<TABLE>
<CAPTION>
HIBERNIA CORPORATION
PRO FORMA COMBINED STATEMENT OF INCOME
Nine Months Ended September 30, 1992
PRO FORMA
COMMERCIAL HIBERNIA
HIBERNIA BANCSHARES, CORPORATION
Unaudited ($ in thousands, except per share data) CORP. INC. (WITH C.B.I.)
<S> <C> <C> <C>
Interest Income
Interest and fees on loans $203,625 $4,958 $208,583
Interest on securities:
U.S. government securities and obligations of
U.S. government agencies 68,477 4,348 72,825
Obligations of states and political subdivisions 3 59 62
Trading account interest 99 - 99
Interest on time deposits in domestic banks 160 4 164
Interest on federal funds sold and securities
purchased under agreements to resell 10,021 160 10,181
Total Interest Income 282,385 9,529 291,914
Interest Expense
Interest on deposits 115,202 4,339 119,541
Interest on federal funds purchased and
securities sold under agreements to repurchase 4,421 - 4,421
Interest on debt and other 9,738 314 10,052
Total Interest Expense 129,361 4,653 134,014
Net Interest Income 153,024 4,876 157,900
Provision for possible loan losses 61,025 150 61,175
Net Interest Income After Provision for
Possible Loan Losses 91,999 4,726 96,725
Noninterest Income
Trust fees 9,376 - 9,376
Service charges on deposits 24,531 544 25,075
Other service, collection and exchange charges 10,481 141 10,622
Gain on settlement of acquired loans 3,679 - 3,679
Loss on planned sale of Texas bank (2,934) - (2,934)
Other operating income 7,510 24 7,534
Securities gains, net 17,190 43 17,233
Total Noninterest Income 69,833 752 70,585
Noninterest Expense
Salaries and employee benefits 66,039 1,852 67,891
Occupancy expense, net 18,668 301 18,969
Equipment expense 9,777 291 10,068
Data processing expense 11,879 15 11,894
Foreclosed property expense 12,061 (72) 11,989
Other operating expense 53,774 1,412 55,186
Total Noninterest Expense 172,198 3,799 175,997
Income (Loss) Before Minority Interests (10,366) 1,679 (8,687)
Less: Minority interest - - -
Income (Loss) Before Income Taxes and
Extraordinary Items (10,366) 1,679 (8,687)
Income tax expense 600 369 969
Income (Loss) from Continuing Operations ($10,966) $1,310 ($9,656)
Pro Forma Weighted Average Common Shares 28,282,120 2,493,333 30,775,453
Pro Forma Income (Loss) Per Common Share
from Continuing Operations (G) ($0.31)
See notes to Pro Forma Combined Financial Statements.
</TABLE>
<PAGE>
<TABLE>
<CAPTION>
HIBERNIA CORPORATION
PRO FORMA COMBINED STATEMENT OF INCOME
Nine Months Ended September 30, 1992
(cont.)
PRO FORMA FIRST FIRST TOTAL
HIBERNIA BASTROP BANCORP CONTINENTA PRO PRO FORMA
CORPORATION NATIONAL OF LOUISIANA,BANCSHARES FORMA HIBERNIA
Unaudited ($ in thousands, except per share data) (WITH C.B.I BANK INC. INC. ADJ. CORPORATION
<S> <C> <C> <C> <C> <C> <C>
Interest Income
Interest and fees on loans $208,583 $2,564 $4,676 $18,781 $234,604
Interest on securities:
U.S. government securities and obligations of
U.S. government agencies 72,825 3,647 3,793 5,378 85,643
Obligations of states and political subdivisions 62 427 422 2 913
Trading account interest 99 - "- - 99
Interest on time deposits in domestic banks 164 2 104 - 270
Interest on federal funds sold and securities
purchased under agreements to resell 10,181 128 125 453 10,887
Total Interest Income 291,914 6,768 9,120 24,614 332,416
Interest Expense
Interest on deposits 119,541 2,899 3,734 9,585 135,759
Interest on federal funds purchased and
securities sold under agreements to repurchase 4,421 4 56 227 4,708
Interest on debt and other 10,052 9 145 986 11,192
Total Interest Expense 134,014 2,912 3,935 10,798 151,659
Net Interest Income 157,900 3,856 5,185 13,816 180,757
Provision for possible loan losses 61,175 40 590 1,152 62,957
Net Interest Income After Provision for
Possible Loan Losses 96,725 3,816 4,595 12,664 117,800
Noninterest Income
Trust fees 9,376 - 6 414 9,796
Service charges on deposits 25,075 364 484 2,020 27,943
Other service, collection and exchange charges 10,622 138 414 751 11,925
Gain on settlement of acquired loans 3,679 - - - 3,679
Loss on planned sale of Texas bank (2,934) - - - (2,934)
Other operating income 7,534 9 2 513 (688) F 7,370
Securities gains, net 17,233 20 24 20 17,297
Total Noninterest Income 70,585 531 930 3,718 (688) 75,076
Noninterest Expense
Salaries and employee benefits 67,891 915 1,757 5,252 75,815
Occupancy expense, net 18,969 240 393 550 20,152
Equipment expense 10,068 100 240 586 10,994
Data processing expense 11,894 10 162 544 (538) F 12,072
Foreclosed property expense 11,989 - (50) 4,154 16,093
Other operating expense 55,186 747 1,126 3,617 (150) F 60,526
Total Noninterest Expense 175,997 2,012 3,628 14,703 (688) 195,652
Income (Loss) Before Minority Interests (8,687) 2,335 1,897 1,679 0 (2,776)
Less: Minority interest - - - 374 374
Income (Loss) Before Income Taxes and
Extraordinary Items (8,687) 2,335 1,897 1,305 0 (3,150)
Income tax expense 969 645 538 60 2,212
Income (Loss) from Continuing Operations ($9,656) $1,690 $1,359 $1,245 $0 ($5,362)
Pro Forma Weighted Average Common Shares 30,775,453 2,866,667 4,800,000 4,492,917 42,935,037
Pro Forma Income (Loss) Per Common Share
from Continuing Operations (G) ($0.31) ($0.12)
See notes to Pro Forma Combined Financial Statements.
</TABLE>
<PAGE>
<TABLE>
<CAPTION>
HIBERNIA CORPORATION
PRO FORMA COMBINED STATEMENT OF INCOME
Year Ended December 31, 1992
PRO FORMA
COMMERCIAL HIBERNIA
HIBERNIA BANCSHARES, CORPORATION
Unaudited ($ in thousands, except per share data) CORP. INC. (WITH C.B.I.)
<S> <C> <C> <C>
Interest Income
Interest and fees on loans $253,183 $6,489 $259,672
Interest on securities:
U.S. government securities and obligations of
U.S. government agencies 89,131 5,619 94,750
Obligations of states and political subdivisions 3 70 73
Trading account interest 99 - 99
Interest on time deposits in domestic banks 223 4 227
Interest on federal funds sold and securities
purchased under agreements to resell 14,095 230 14,325
Total Interest Income 356,734 12,412 369,146
Interest Expense
Interest on deposits 141,502 5,497 146,999
Interest on federal funds purchased and
securities sold under agreements to repurchase 6,515 - 6,515
Interest on debt and other 11,439 377 11,816
Total Interest Expense 159,456 5,874 165,330
Net Interest Income 197,278 6,538 203,816
Provision for possible loan losses 66,275 150 66,425
Net Interest Income After Provision for
Possible Loan Losses 131,003 6,388 137,391
Noninterest Income
Trust fees 12,263 2 12,265
Service charges on deposits 31,870 713 32,583
Other service, collection and exchange charges 13,928 183 14,111
Gain on settlement of acquired loans 4,151 - 4,151
Loss on planned sale of Texas bank (2,934) - (2,934)
Other operating income 9,972 22 9,994
Securities gains, net 17,190 44 17,234
Total Noninterest Income 86,440 964 87,404
Noninterest Expense
Salaries and employee benefits 86,141 2,565 88,706
Occupancy expense, net 23,275 407 23,682
Equipment expense 13,447 387 13,834
Data processing expense 17,477 22 17,499
Foreclosed property expense 16,302 (124) 16,178
Other operating expense 68,716 1,868 70,584
Total Noninterest Expense 225,358 5,125 230,483
Income (Loss) Before Income Taxes and
Extraordinary Items (7,915) 2,227 (5,688)
Income tax expense - 638 638
Income (Loss) from Continuing Operations ($7,915) $1,589 ($6,326)
Pro Forma Weighted Average Common Shares 29,608,279 2,493,333 32,101,612
Pro Forma Income (Loss) Per Common Share
from Continuing Operations (G) ($0.20)
See notes to Pro Forma Combined Financial Statements.
</TABLE>
<PAGE>
<TABLE>
<CAPTION>
HIBERNIA CORPORATION
PRO FORMA COMBINED STATEMENT OF INCOME
Year Ended December 31, 1992
(cont.)
PRO FORMA FIRST FIRST TOTAL
HIBERNIA BASTROP BANCORP CONTINENTA PRO PRO FORMA
CORPORATION NATIONAL OF LOUISIANA,BANCSHARES FORMA HIBERNIA
Unaudited ($ in thousands, except per share data) (WITH C.B.I BANK INC. INC. ADJ. CORPORATION
<S> <C> <C> <C> <C> <C> <C>
Interest Income
Interest and fees on loans $259,672 $3,410 $6,286 $24,612 $293,980
Interest on securities:
U.S. government securities and obligations of
U.S. government agencies 94,750 4,775 4,940 7,017 111,482
Obligations of states and political subdivisions 73 572 555 2 1,202
Trading account interest 99 - - - 99
Interest on time deposits in domestic banks 227 2 132 - 361
Interest on federal funds sold and securities
purchased under agreements to resell 14,325 178 146 549 15,198
Total Interest Income 369,146 8,937 12,059 32,180 422,322
Interest Expense
Interest on deposits 146,999 3,743 4,737 12,169 167,648
Interest on federal funds purchased and
securities sold under agreements to repurchase 6,515 4 69 322 6,910
Interest on debt and other 11,816 11 186 1,353 13,366
Total Interest Expense 165,330 3,758 4,992 13,844 187,924
Net Interest Income 203,816 5,179 7,067 18,336 234,398
Provision for possible loan losses 66,425 40 710 1,152 68,327
Net Interest Income After Provision for
Possible Loan Losses 137,391 5,139 6,357 17,184 166,071
Noninterest Income
Trust fees 12,265 - 7 577 12,849
Service charges on deposits 32,583 481 661 2,726 36,451
Other service, collection and exchange charges 14,111 179 523 932 15,745
Gain on settlement of acquired loans 4,151 - - - 4,151
Loss on planned sale of Texas bank (2,934) - - - (2,934)
Other operating income 9,994 31 6 640 (762) F 9,909
Securities gains, net 17,234 22 60 20 17,336
Total Noninterest Income 87,404 713 1,257 4,895 (762) 93,507
Noninterest Expense
Salaries and employee benefits 88,706 1,336 2,404 7,034 99,480
Occupancy expense, net 23,682 218 634 726 25,260
Equipment expense 13,834 133 308 744 15,019
Data processing expense 17,499 14 205 747 (739) F 17,726
Foreclosed property expense 16,178 - (30) 6,554 22,702
Other operating expense 70,584 1,118 1,550 5,592 (23) F 78,821
Total Noninterest Expense 230,483 2,819 5,071 21,397 (762) 259,008
Income (Loss) Before Income Taxes and
Extraordinary Items (5,688) 3,033 2,543 682 0 570
Income tax expense 638 854 598 232 2,322
Income (Loss) from Continuing Operations ($6,326) $2,179 $1,945 $450 $0 ($1,752)
Pro Forma Weighted Average Common Shares 32,101,612 2,866,667 4,800,000 4,492,917 44,261,196
Pro Forma Income (Loss) Per Common Share
from Continuing Operations (G) ($0.20) ($0.04)
See notes to Pro Forma Combined Financial Statements.
</TABLE>
<PAGE>
<TABLE>
<CAPTION>
HIBERNIA CORPORATION
PRO FORMA COMBINED STATEMENT OF INCOME
Year Ended December 31, 1991
PRO FORMA
COMMERCIAL HIBERNIA
HIBERNIA BANCSHARES, CORPORATION
Unaudited ($ in thousands, except per share data) CORP. INC. (WITH C.B.I.)
<S> <C> <C> <C>
Interest Income
Interest and fees on loans $451,675 $7,857 $459,532
Interest on securities:
U.S. government securities and obligations of
U.S. government agencies 114,629 6,002 120,631
Obligations of states and political subdivisions 4,970 229 5,199
Trading account interest 70 - 70
Interest on time deposits in domestic banks 100 61 161
Interest on federal funds sold and securities
purchased under agreements to resell 9,285 292 9,577
Total Interest Income 580,729 14,441 595,170
Interest Expense
Interest on deposits 317,780 8,216 325,996
Interest on federal funds purchased and
securities sold under agreements to repurchase 16,177 - 16,177
Interest on debt and other 12,173 635 12,808
Total Interest Expense 346,130 8,851 354,981
Net Interest Income 234,599 5,590 240,189
Provision for possible loan losses 178,330 10 178,340
Net Interest Income After Provision for
Possible Loan Losses 56,269 5,580 61,849
Noninterest Income
Trust fees 14,346 2 14,348
Service charges on deposits 34,779 754 35,533
Other service, collection and exchange charges 19,938 218 20,156
Credit card income 5,251 - 5,251
Gain on settlement of acquired loans 9,043 - 9,043
Other operating income 8,512 27 8,539
Securities gains, net 17,801 22 17,823
Total Noninterest Income 109,670 1,023 110,693
Noninterest Expense
Salaries and employee benefits 115,173 2,510 117,683
Occupancy expense, net 28,785 411 29,196
Equipment expense 13,979 453 14,432
Data processing expense 12,548 17 12,565
Foreclosed property expense 24,854 244 25,098
Credit card expense 3,136 - 3,136
Other operating expense 110,679 1,935 112,614
Total Noninterest Expense 309,154 5,570 314,724
Income (Loss) Before Minority Interests (143,215) 1,033 (142,182)
Less: Minority interest - - -
Income (Loss) Before Income Taxes,
Extraordinary Item and Cumulative Effect
of Accounting Change (143,215) 1,033 (142,182)
Income tax expense 782 163 945
Income (Loss) from Continuing Operations ($143,997) $870 ($143,127)
Pro Forma Weighted Average Common Shares 28,116,938 2,493,333 30,610,271
Pro Forma Income (Loss) Per Common Share
from Continuing Operations (G) ($4.68)
See notes to Pro Forma Combined Financial Statements.
</TABLE>
<PAGE>
<TABLE>
<CAPTION>
HIBERNIA CORPORATION
PRO FORMA COMBINED STATEMENT OF INCOME
Year Ended December 31, 1991
(cont.)
PRO FORMA FIRST FIRST TOTAL
HIBERNIA BASTROP BANCORP CONTINENTA PRO PRO FORMA
CORPORATION NATIONAL OF LOUISIANA,BANCSHARES FORMA HIBERNIA
Unaudited ($ in thousands, except per share data) (WITH C.B.I BANK INC. INC. ADJ. CORPORATION
<S> <C> <C> <C> <C> <C> <C>
Interest Income
Interest and fees on loans $459,532 $3,648 $5,845 $26,672 $495,697
Interest on securities:
U.S. government securities and obligations of
U.S. government agencies 120,631 4,694 4,743 5,861 135,929
Obligations of states and political subdivisions 5,199 495 574 6 6,274
Trading account interest 70 - - - 70
Interest on time deposits in domestic banks 161 37 324 - 522
Interest on federal funds sold and securities
purchased under agreements to resell 9,577 470 386 984 11,417
Total Interest Income 595,170 9,344 11,872 33,523 649,909
Interest Expense
Interest on deposits 325,996 5,150 6,580 17,645 355,371
Interest on federal funds purchased and
securities sold under agreements to repurchase 16,177 - 74 543 16,794
Interest on debt and other 12,808 19 319 1,250 14,396
Total Interest Expense 354,981 5,169 6,973 19,438 386,561
Net Interest Income 240,189 4,175 4,899 14,085 263,348
Provision for possible loan losses 178,340 17 432 1,800 180,589
Net Interest Income After Provision for
Possible Loan Losses 61,849 4,158 4,467 12,285 82,759
Noninterest Income
Trust fees 14,348 - 6 490 14,844
Service charges on deposits 35,533 442 605 2,629 39,209
Other service, collection and exchange charges 20,156 162 573 884 21,775
Credit card income 5,251 - 2 160 5,413
Gain on settlement of acquired loans 9,043 - - - 9,043
Other operating income 8,539 37 - 368 (799) F 8,145
Securities gains, net 17,823 (278) (17) 179 17,707
Total Noninterest Income 110,693 363 1,169 4,710 (799) 116,136
Noninterest Expense
Salaries and employee benefits 117,683 1,231 2,195 6,954 128,063
Occupancy expense, net 29,196 265 378 899 30,738
Equipment expense 14,432 85 211 851 15,579
Data processing expense 12,565 17 194 665 (658) F 12,783
Foreclosed property expense 25,098 - (2) 3,685 28,781
Credit card expense 3,136 - - - 3,136
Other operating expense 112,614 884 1,317 4,469 (141) F 119,143
Total Noninterest Expense 314,724 2,482 4,293 17,523 (799) 338,223
Income (Loss) Before Minority Interests (142,182) 2,039 1,343 (528) 0 (139,328)
Less: Minority interest - - - 311 311
Income (Loss) Before Income Taxes,
Extraordinary Item and Cumulative Effect
of Accounting Change (142,182) 2,039 1,343 (839) 0 (139,639)
Income tax expense 945 478 305 - 1,728
Income (Loss) from Continuing Operations ($143,127) $1,561 $1,038 ($839) $0 ($141,367)
Pro Forma Weighted Average Common Shares 30,610,271 2,866,667 4,800,000 4,492,917 42,769,855
Pro Forma Income (Loss) Per Common Share
from Continuing Operations (G) ($4.68) ($3.31)
See notes to Pro Forma Combined Financial Statements.
</TABLE>
<PAGE>
<TABLE>
<CAPTION>
HIBERNIA CORPORATION
PRO FORMA COMBINED STATEMENT OF INCOME
Year Ended December 31, 1990
PRO FORMA
COMMERCIAL HIBERNIA
HIBERNIA BANCSHARES, CORPORATION
Unaudited ($ in thousands, except per share data) CORP. INC. (WITH C.B.I.)
<S> <C> <C> <C>
Interest Income
Interest and fees on loans $561,693 $8,238 $569,931
Interest on securities:
U.S. government securities and obligations of
U.S. government agencies 120,501 5,683 126,184
Obligations of states and political subdivisions 12,000 402 12,402
Trading account interest 106 - 106
Interest on time deposits in domestic banks 164 12 176
Interest on federal funds sold and securities
purchased under agreements to resell 5,041 514 5,555
Total Interest Income 699,505 14,849 714,354
Interest Expense
Interest on deposits 400,108 9,089 409,197
Interest on federal funds purchased and
securities sold under agreements to repurchase 30,139 - 30,139
Interest on debt and other 7,940 843 8,783
Total Interest Expense 438,187 9,932 448,119
Net Interest Income 261,318 4,917 266,235
Provision for possible loan losses 166,825 1,310 168,135
Net Interest Income After Provision for
Possible Loan Losses 94,493 3,607 98,100
Noninterest Income
Trust fees 13,834 2 13,836
Service charges on deposits 29,019 740 29,759
Other service, collection and exchange charges 18,942 243 19,185
Credit card income 22,910 - 22,910
Gain on settlement of acquired loans 20,924 - 20,924
Other operating income 12,099 161 12,260
Securities gains (losses), net 11,722 (57) 11,665
Total Noninterest Income 129,450 1,089 130,539
Noninterest Expense
Salaries and employee benefits 106,431 2,739 109,170
Occupancy expense, net 23,234 441 23,675
Equipment expense 11,777 519 12,296
Data processing expense 11,336 14 11,350
Foreclosed property expense 13,235 494 13,729
Credit card expense 13,655 - 13,655
Other operating expense 69,340 2,043 71,383
Total Noninterest Expense 249,008 6,250 255,258
Income (Loss) Before Minority Interests (25,065) (1,554) (26,619)
Less: Minority interest - - -
Income (Loss) Before Income Taxes (25,065) (1,554) (26,619)
Income tax expense (benefit) (14,070) (687) (14,757)
Net Income (Loss) from Continuing Operations ($10,995) ($867) ($11,862)
Pro Forma Weighted Average Common Shares 27,453,340 2,493,333 29,946,673
Pro Forma Income (Loss) Per Common Share
from Continuing Operations (G) ($0.40)
See notes to Pro Forma Combined Financial Statements.
</TABLE>
<PAGE>
<TABLE>
<CAPTION>
HIBERNIA CORPORATION
PRO FORMA COMBINED STATEMENT OF INCOME
Year Ended December 31, 1990
(cont.)
PRO FORMA FIRST FIRST TOTAL
HIBERNIA BASTROP BANCORP CONTINENTA PRO PRO FORMA
CORPORATION NATIONAL OF LOUISIANA,BANCSHARES FORMA HIBERNIA
Unaudited ($ in thousands, except per share data) (WITH C.B.I BANK INC. INC. ADJ. CORPORATION
<S> <C> <C> <C> <C> <C> <C>
Interest Income
Interest and fees on loans $569,931 $4,131 $5,314 $29,015 $608,391
Interest on securities:
U.S. government securities and obligations of
U.S. government agencies 126,184 4,117 4,241 6,893 141,435
Obligations of states and political subdivisions 12,402 696 524 18 13,640
Trading account interest 106 - - - 106
Interest on time deposits in domestic banks 176 97 290 13 576
Interest on federal funds sold and securities
purchased under agreements to resell 5,555 735 513 987 7,790
Total Interest Income 714,354 9,776 10,882 36,926 771,938
Interest Expense
Interest on deposits 409,197 5,762 6,437 21,546 442,942
Interest on federal funds purchased and
securities sold under agreements to repurchase 30,139 - 46 2,671 32,856
Interest on debt and other 8,783 23 394 1,461 10,661
Total Interest Expense 448,119 5,785 6,877 25,678 486,459
Net Interest Income 266,235 3,991 4,005 11,248 285,479
Provision for possible loan losses 168,135 86 440 3,101 171,762
Net Interest Income After Provision for
Possible Loan Losses 98,100 3,905 3,565 8,147 113,717
Noninterest Income
Trust fees 13,836 - 5 515 14,356
Service charges on deposits 29,759 415 533 2,612 33,319
Other service, collection and exchange charges 19,185 161 413 607 20,366
Credit card income 22,910 - 11 130 23,051
Gain on settlement of acquired loans 20,924 - - - 20,924
Other operating income 12,260 7 - 211 (850) F 11,628
Securities gains (losses), net 11,665 (396) 4 (343) 10,930
Total Noninterest Income 130,539 187 966 3,732 (850) 134,574
Noninterest Expense
Salaries and employee benefits 109,170 1,209 2,162 6,559 119,100
Occupancy expense, net 23,675 318 394 1,074 25,461
Equipment expense 12,296 85 205 952 13,538
Data processing expense 11,350 45 158 745 (734) F 11,564
Foreclosed property expense 13,729 - (201) 4,067 17,595
Credit card expense 13,655 - - - 13,655
Other operating expense 71,383 727 1,044 8,163 (116) F 81,201
Total Noninterest Expense 255,258 2,384 3,762 21,560 (850) 282,114
Income (Loss) Before Minority Interests (26,619) 1,708 769 (9,681) 0 (33,823)
Less: Minority interest - - - 66 66
Income (Loss) Before Income Taxes (26,619) 1,708 769 (9,747) 0 (33,889)
Income tax expense (benefit) (14,757) 314 87 - (14,356)
Net Income (Loss) from Continuing Operations ($11,862) $1,394 $682 ($9,747) $0 ($19,533)
Pro Forma Weighted Average Common Shares 29,946,673 2,866,667 4,800,000 4,492,917 42,106,257
Pro Forma Income (Loss) Per Common Share
from Continuing Operations (G) ($0.40) $0.49 ($0.46)
See notes to Pro Forma Combined Financial Statements.
</TABLE>
<PAGE>
HIBERNIA CORPORATION
NOTES TO PRO FORMA COMBINED FINANCIAL STATEMENTS
A. Hibernia Corporation will issue common stock with an aggregate
market value at the date of merger of $18.7 million to effect
the merger with Commercial Bancshares, Inc. (Commercial
Bancshares). The Hibernia Corporation common stock is assumed
to have a market value of $7.50 per share resulting in the
issuance of 2,493,333 shares of common stock for all the
outstanding common stock of Commercial Bancshares. In the
event the average of the mean of the high and low prices of
Hibernia Corporation common stock for the five business days
preceding the last trading day immediately prior to the merger
exceeds $7.90 per share, approximately 2,367,000 of Hibernia
Corporation common stock will be issued for all of the
outstanding common stock of Commercial Bancshares. The stated
value of Hibernia Corporation common stock is $1.92 per share.
In accordance with the pooling of interests method of
accounting, the historical equities of the merged companies
are combined.
B. Hibernia Corporation will use available federal funds sold to
retire Commercial Bancshares, Inc. debt of $3,345,000 and
related accrued interest of $63,000.
C. In addition to the Commercial Bancshares, Inc. merger,
Hibernia Corporation is a party to pending mergers with
Bastrop National Bank (Bastrop National), First Bancorp of
Louisiana, Inc. (First Bancorp) and First Continental
Bancshares, Inc. (First Continental). Hibernia Corporation
will issue common stock to effect these mergers in
transactions using the pooling of interests method of
accounting.
It is assumed that prior to these mergers the following debt
and equity instruments of the designated company will be
converted into common stock of the designated company and that
such common stock will then be exchanged for Hibernia
Corporation common stock.
1) $800,000 in First Bancorp convertible subordinated
debentures will be converted to 30,064 shares of First
Bancorp common stock.
2) $374,000 of convertible premium related to First
Continental senior secured notes will be converted to
458,339 of First Continental common stock.
3) $11,422,000 of First Continental convertible
preferred stock will be converted to 221,638 shares of
First Continental common stock.
The Hibernia Corporation common stock is assumed to have a
market value of $7.50 per share and a stated value of $1.92
per share. In accordance with the pooling of interests method
of accounting, the historical equities of the merged companies
are combined.
Hibernia Mkt Value Stated Value
Shares of Shares of Shares
Bastrop National 2,866,667 $21,500,000 $ 5,504,000
First Bancorp 4,800,000 36,000,000 9,216,000
First Continental 4,492,917 33,697,000 8,626,400
__________ ___________ ___________
Total 12,159,584 $91,197,000 $23,346,400
========== =========== ===========
D. Hibernia Corporation will use available federal funds to pay
First Continental preferred stock dividends in arrears of
$10,024,000 and related accrued interest of $2,365,000.
<PAGE>
HIBERNIA CORPORATION
NOTES TO PRO FORMA COMBINED FINANCIAL STATEMENTS
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
$750,000, which represent an escrow account previously
established by First Continental, will be used to fund a
portion of the debt retirement.
Redemption
Debt Interest Premium
----------- ---------- ----------
First Bancorp $ 4,500,000 $ 34,000 $ -
First Continental 11,400,000 4,104,000 300,000
___________ __________ ________
$15,900,000 $4,138,000 $300,000
=========== ========== ========
F. To eliminate intercompany transactions between Hibernia
Corporation and First Continental primarily related to data
processing charges paid by First Continental to Hibernia
Corporation.
G. Hibernia Corporation expects to achieve savings through
reductions in interest expense and operating costs in
connection with the proposed mergers. The savings vary from
merger to merger depending upon Hibernia Corporation's pre-
merger operations in the respective geographic area. The
majority of the savings will be achieved through the
retirement of long-term debt upon merger and consolidation of
certain operations. The extent to which the savings will be
achieved depends, among other things, on the regulatory
environment and economic conditions, and may be affected by
unanticipated changes in business activities, inflation and
certain external factors such as FDIC assessments. Therefore,
there can be no assurance that such savings will be realized.
No adjustment has been included in the unaudited pro forma
financial statements for the anticipated savings.
<PAGE>
PROPOSED MERGER
This section of the Proxy Statement describes certain aspects of the Merger.
The following description does not purport to be complete and is qualified in
its entirety by reference to the Agreement, which is attached as Appendix B to
this Proxy Statement and is incorporated herein by reference. All shareholders
are urged to read the Agreement carefully and in its entirety.
Background and Reasons for Merger
Background. Commercial held discussions during 1990 with another financial
institution concerning the possibility of a merger or other business
combination. In connection with those discussions, Commercial first engaged
Bank Advisory Group. Those discussions were terminated. Following these
discussions, Commercial's Board remained interested in pursuing a merger with
a large financial institution. In 1992, Commercial held discussions with
another financial institution concerning a possible merger and again retained
Bank Advisory Group to assist Commercial in these discussions. Commercial and
this other financial institution reached a preliminary agreement to merge,
subject to certain conditions. The conditions were not fulfilled and the
discussions concerning the proposed merger were terminated. During the first
six months of 1993, Commercial held discussions with several other financial
institutions. In connection with these discussions, Commercial again retained
Bank Advisory Group to provide financial analysis.
In June, 1993, Commercial was contacted by Hibernia to discuss a possible
merger. A special meeting of Commercial's Board was held on July 20, 1993, to
consider, inter alia, the terms of a proposed transaction with Hibernia. At
that meeting, the Board approved entering into an agreement in principle with
Hibernia and the negotiation of a definitive agreement. Commercial's Board
considered a draft of the Agreement at a joint meeting of the Boards of
Directors of Commercial and the Bank held on September 21, 1993. At that
meeting, a representative of Bank Advisory Group presented its opinion,
described below, on the fairness of the transaction to the shareholders of
Commercial from a financial standpoint. This opinion was made subject to the
results of Bank Advisory Group's due diligence review of Hibernia. The Bank
recommended the draft Merger Agreement at the joint meeting. Commercial's Board
reconvened on September 27, 1993, and unanimously approved the Agreement.
Reasons for the Merger. In reaching its determination that the Merger is in
the best interests of Commercial's shareholders, Commercial's Board consulted
with its advisors, as well as with Commercial's management, and considered a
number of factors, including, but not limited to, the following:
(a) The amount and type of consideration to be received by Commercial's
shareholders in the Merger;
(b) That the Hibernia Common Stock to be issued in the Merger will be
listed for trading on the NYSE and should provide Commercial's shareholders
with liquidity that is unavailable to holders of Commercial Common Stock,
for which an active market does not exist.
(c) That Hibernia will offer a wider range of products and services to
the customers and communities served by the Bank.
(d) That the Merger will allow Commercial's shareholders to become
shareholders of Hibernia, an institution which is one of the largest bank
holding companies headquartered in Louisiana.
(e) That the Merger is expected generally to be a tax-free transaction to
Commercial and its shareholders (see "Certain Federal Income Tax
Consequences");
(f) That business combinations involving financial institutions are
increasing in the Southeast generally and, in particular, in Louisiana, that
such combinations will likely intensify the competition for business in
Commercial's market area, and that the current and prospective economic and
regulatory environment and competitive constraints will make it more
difficult for a small independent financial institution, such as Commercial,
to operate as successfully in the future as it has in the past, since larger
institutions are better able to deal with the additional regulatory burdens
being placed on financial institutions and to spread the additional costs of
compliance over a larger asset base; and
(g) That, pursuant to the Agreement, prior to the mailing of this Proxy
Statement-Prospectus and again within five (5) days before the Closing Date
Commercial must receive an opinion of Bank Advisory Group that the terms of
the Agreement are fair to Commercial's shareholders from a financial
standpoint (see "Opinion of Financial Advisor");
Commercial's Board did not assign any specific or relative weight to the
foregoing factors in its considerations.
Based on the foregoing, the Board of Directors of Commercial has unanimously
approved the Agreement, believes that the Merger is in the best interests of the
shareholders and recommends that the shareholders vote FOR the Merger. The
Board of Directors has received from Bank Advisory Group an opinion that the
terms of the Merger are fair, from a financial standpoint, to the common
shareholders of Commercial. See "PROPOSED MERGER -- Opinion of Financial
Advisor." Commercial's Board believes that the Merger will provide significant
value to all Commercial shareholders and will enable them to participate in
opportunities for growth that Commercial's Board believes the Merger makes
possible. In recommending the Merger to the shareholders, Commercial's Board
of Directors considered, among other factors, the financial terms of the Merger,
the liquidity it will afford Commercial's shareholders and the likelihood of
increased competition for Commercial in its market area.
Terms of the Merger
On the Effective Date, each outstanding share of Commercial Common Stock
(other than shares held by dissenting shareholders) will be converted into the
number of shares of Hibernia Common Stock determined in accordance with the
following formula: ($18.7 million divided by 281,843 (the number of outstanding
shares of Commercial Common Stock) ) divided by the Fair Market Value of
Hibernia Common Stock. The Fair Market Value of the Hibernia Common Stock will
be the average of the high and low trading prices of the stock for the five
trading days prior to the last trading day immediately preceding the Closing
Date. For example, if the Fair Market Value of the Hibernia Common Stock is
$7.00, each share of Commercial Common Stock will be exchanged for 9.478 shares
of Hibernia Common Stock. In the event the market value of the Hibernia Common
Stock exceeds $7.90, the minimum exchange ratio will be 8.4 : 1. Therefore,
Commercial shareholders are assured of receiving at least 8.4 shares of Hibernia
Common Stock for each share of Commercial Common Stock owned by them as of the
Record Date.
The Agreement also provides that the aggregate value of Hibernia Common Stock
to be exchanged for Commercial Common Stock will be increased to $20.7 million
from $18.7 million if, prior to the Closing Date, Hibernia enters into an
agreement to merge with St. Mary Holding Corporation or St. Mary Bank and Trust
Company. Hibernia has indicated that it has no current intention to enter into
such an agreement.
Upon the effectiveness of the Merger, the conversion of shares of Commercial
Common Stock to Hibernia Common Stock will be automatic, and Commercial
shareholders will automatically be entitled to all of the rights and privileges
afforded to Hibernia shareholders as of such date.
For a discussion of the rights of dissenting shareholders, see "PROPOSED
MERGER -- Rights of Dissenting Shareholders."
Opinion of Financial Advisor
Pursuant to an engagement letter dated July 22, 1993, Commercial retained
Bank Advisory Group to act as an independent financial analyst and advisor to
the Board of Dirctors of Commercial in connection with the proposed Merger.
Bank Advisory Group, as part of its line of professional services, renders
valuation opinions of banks and bank holding companies in connection with
mergers and acquisitions nationwide.
In connection with the September 21, 1993, meeting of the Commercial Board,
Bank Advisory Group delivered its written opinion to the Commercial Board to the
effect that, as of the date of that opinion, the terms of the proposed Merger
were fair, from a financial standpoint, to the common shareholders of
Commercial, subject to the completion of certain additional due diligence by
Bank Advisory Group at Hibernia and the Bank (the "September 1993 Opinion").
On November 22, 1993, Bank Advisory Group delivered to Commercial's Board an
updated opinion to the effect that, as of the date of that opinion, the terms
of the Merger were fair, from a financial standpoint, to the common shareholders
of Commercial (the "November 1993 Opinion"). The November 1993 Opinion deleted
the references in the September 1993 Opinion that made the September 1993
Opinion subject to certain additional due diligence and included references to
updated financial statements of Hibernia and Commercial and consideration of the
First Bancorp and Bastrop transactions. On __________, 1993, Bank Advisory
Group delivered to Commercial's Board a further updated opinion, for use as
Appendix D to this Proxy Statement-Prospectus, to the effect that, as of the
date of that opinion, the terms of the Merger were fair, from a financial
standpoint, to the common shareholders of Commercial (the "Proxy Statement
Opinion"). The Proxy Statement Opinion is identical to the November 1993
Opinion other than for references to consideration by Bank Advisory Group of (i)
financial statements of Commercial and Hibernia that are subsequent in date to
those to which reference is made in the November 1993 Opinion, and (ii) the
proposed transaction between Hibernia and First Continental Bancshares announced
on December 6, 1993. The September 1993 Opinion, the November 1993 Opinion, and
the Proxy Statement Opinion are sometimes referred to herein as the "Opinions."
The full text of Bank Advisory Group's Proxy Statement Opinion is attached
hereto as Appendix D and is incorporated herein by reference. The description
of the Proxy Statement Opinion set forth herein is qualified in its entirety by
reference to Appendix D. Commercial shareholders are urged to read the Proxy
Statement Opinion in its entirety for a description of the procedures followed,
assumptions made, matters considered, and limitations on the reviews undertaken
by Bank Advisory Group. Bank Advisory Group's Proxy Statement Opinion relates
only to the fairness of the financial terms of the proposed Merger from the
perspective of the common shareholders of Commercial and does not constitute a
recommendation to any Commercial shareholder as to how such shareholder should
vote at the Special Meeting.
In connection with rendering its Opinions, Bank Advisory Group reviewed,
among other things, (i) the Agreement or drafts thereof; (ii) in the case of the
Proxy Statement Opinion, the Registration Statement on Form S-4 of Hibernia of
which this Proxy Statement-Prospectus is a part; (iii) audited consolidated
financial statements for Commercial for the year ended December 31, 1992, and
for Hibernia, in Annual Report Form and Form 10-K, for the years ended December
31, 1991 and 1992, and unaudited quarterly financial statements for Hibernia,
in its Quarterly Report to Shareholders and Quarterly Report on Form 10-Q, for
the six months ended June 30, 1993, with respect to the September 1993 Opinion,
and for the nine months ended September 30, 1993, with respect to the November
1993 Opinion; (iv) consolidated financial statements on form F.R. Y-9C, for
Commercial for the six months ended June 30, 1993, with respect to the September
1993 Opinion, and for the nine months ended September 30, 1993, with respect to
the November 1993 Opinion, and for Hibernia for the years ended 1990, 1991, and
1992 and for the three months ended March 31, 1993, with respect to the
September 1993 Opinion, and for the nine months ended September 30, 1993, with
respect to the November 1993 Opinion; (v) Reports of Condition and Income for
the Bank for the three years ended December 31, 1990, 1991, and 1992, and for
the six month period ended June 30, 1993, with respect to the September 1993
Opinion, and for the nine months ended September 30, 1993, with respect to the
November 1993 Opinion, and for HNB for the three years ended December 31, 1990,
1991, 1992, and for the six month period ended June 30, 1993, with respect to
the September 1993 Opinion, and for the nine months ended September 30, 1993,
with respect to the November 1993 Opinion; (vi) the Prospectus dated December
1992, setting forth the terms of Hibernia's issuance of Class A common stock in
exchange for debt restructuring; and (vii) with respect to the November 1993
Opinion, equity research reports regarding Hibernia prepared by various analysts
who cover the financial institutions sector. In addition, Bank Advisory Group
also reviewed certain financial analyses and forecasts for the Bank prepared by
the management of the Bank, including projections of future performance, and
certain other summary materials and analyses with respect to the Bank's loan
portfolio, securities portfolio, deposit base, fixed assets, and operations
prepared by the Bank's management. Bank Advisory Group also reviewed (i) the
economy in general and, in particular, the local economies in which the Bank and
Hibernia and its subsidiaries operate; (ii) the financial terms and price levels
for commercial banks recently acquired in the United States, and specifically
in Louisiana and East Texas, together with the financial performance and
conditions of such banks; (iii) the price-to-equity and price-to-earnings
multiples of banking organizations based in Louisiana and Mississippi with
publicly-traded common stock, together with the financial performance and
condition of such banking organizations; (iv) with respect to the November 1993
Opinion the financial terms and stated price levels of other banking
organizations, the proposed acquisitions which had been publicly announced by
Hibernia subsequent to September 28, 1993 and prior to the date of the November
1993 Opinion; and (v) such other information -- including financial studies,
analyses, investigations, and economic and market criteria -- that Bank Advisory
Group deemed relevant.
Bank Advisory Group also held discussions with members of the senior
management of Commercial regarding its past and current business operations,
financial conditions, and future prospects. Bank Advisory Group also conducted
on-site due diligence investigations at both Hibernia and the Bank and met with
members of the management of both Commercial and Hibernia to discuss relevant
information provided to Bank Advisory Group.
For purposes of its Opinions, Bank Advisory Group relied upon the information
provided by the managements of Commercial and Hibernia, or otherwise reviewed
by Bank Advisory Group, as being complete and accurate in all material respects.
Bank Advisory Group did not verify through independent inspection or examination
the specific assets or liabilities of Commercial and Hibernia or their
subsidiary banks. In issuing its Opinions, Bank Advisory Group assumed that
there had been no material change in the assets, financial condition, results
of operations, or business prospects of Commercial and Hibernia since the date
of the most recent financial statements to which reference was made in such
Opinion.
Set forth below is a summary of the report presented by Bank Advisory Group
to Commercial's Board on September 21, 1993 in connection with its September
1993 Opinion:
Pro Forma Merger Analysis. Bank Advisory Group analyzed certain pro forma
effects resulting from consummation of the Merger from the perspective of both
Commercial and Hibernia, based upon the projections relating to Commercial and
Hibernia. The analysis considered the effects of the consummation of the Merger
and Hibernia's acquisition of Commercial only; the effects of other announced
or pending merger transactions involving Hibernia were not considered. This
analysis indicated that the Merger would be dilutive of Commercial's estimated
earnings per share in 1993, accretive to Commercial's projected earnings per
share in 1994, and slightly dilutive of Commercial's estimated earnings per
share thereafter. This analysis also indicated, among other things, that the
Merger would be dilutive of Commercial's estimated equity per share, have no
effect on its dividends, and not have a material impact on Hibernia's estimated
earnings per share, equity per share, or dividends.
Comparison with Selected Companies. Bank Advisory Group compared selected
historical stock market information, earnings, book value, total assets, and
financial ratios for Hibernia to the corresponding data and ratios of six other
regional banking organizations in Louisiana and Mississippi having publicly-
traded common stock (specifically, Trustmark Corporation, First Commerce
Corporation, Whitney Holding Corporation, Hancock Holding Company, Deposit
Guaranty Corporation, and Premier Bancorp, Inc.), based on publicly available
information, subject to the limits on Bank Advisory Group's review described
above. This comparison showed that, as of September 15, 1993; (i) the ratio of
Hibernia's market bid price to its annualized earnings per share for the first
six months of 1993 was 14.9x, compared to a weighted average of 7.75x for the
six selected regional banking organizations; and (ii) the ratio of Hibernia's
market bid price to its latest book value per share was 1.64x, compared to a
weighted average of 1.55x for the six selected regional banking organizations.
Bank Advisory Group also analyzed for Hibernia and the six other regional
banking organizations the ratio of total equity capital to total assets, the
ratio of risk based capital to risk assets, the ratio of non-performing loans
and other real estate to total loans and other real estate, the ratio of loan
loss reserves to total loans, the ratio of net charge-offs to average loans, the
return on average assets, the return on average equity capital, the ratio of
common dividends declared to net income and the ratio of other dividends
declared to net income, in each case for the three-month period ended March 31,
1993. The following table provides the results of this analysis by Bank
Advisory Group.
<PAGE>
COMPARABLE VALUES FOR REGIONAL BANKING ORGANIZATIONS
LOUISIANA & MISSISSIPPI
(Dollars in Thousands)
Total Risk Based
Holding Company Equity Cap/ Capital/
City, State, Zip Total Assets Total Assets Risk Assets
3/93 3/93 3/93
________________ ______________ ______________ ____________
Premier Bancorp, Inc. $ 3,912,485 7.52% 15.99%
Baton Rouge, LA
First Commerce Corporation 6,003,645 7.23 21.16
New Orleans, LA
Hibernia Corporation 4,664,363 8.14 15.83
New Orleans, LA
Whitney Holding Corporation 2,873,535 6.79 16.56
New Orleans, LA
Hancock Holding Company 1,787,433 7.43 14.93
Gulfport, MS
Deposit Guaranty Corporation 4,816,828 7.37 14.36
Jackson, MS
Trustmark Corporation 4,172,593 7.29 16.06
Jackson, MS
_____________ ______________ ____________
Gr. Totals, 7 Institutions $ 28,230,882 7.42% 16.57%
<PAGE>
COMPARABLE VALUES FOR REGIONAL BANKING ORGANIZATIONS
LOUISIANA & MISSISSIPPI (Continued)
(Dollars in Thousands)
Nonperform Loan Loss Net Chg-
Holding Company Loans+ORE/ Reserves/ Offs/
City, State, Zip Total Lns+ORE Tot Loan Avg Loans
3/93 3/93 3/93
________________ ______________ ______________ ____________
Premier Bancorp, Inc. 4.46% 4.39% (0.11%)
Baton Rouge, LA
First Commerce Corporation 3.25 3.45 0.34
New Orleans, LA
Hibernia Corporation 6.83 8.35 0.88
New Orleans, LA
Whitney Holding Corporation 9.86 10.29 0.42
New Orleans, LA
Hancock Holding Company 2.14 1.85 0.27
Gulfport, MS
Deposit Guaranty Corporation 2.37 3.27 (0.19)
Jackson, MS
Trustmark Corporation 0.97 2.80 0.21
Jackson, MS
______________ ______________ ____________
Gr. Totals, 7 Institutions 4.04% 4.78% 0.25%
<PAGE>
COMPARABLE VALUES FOR REGIONAL BANKING ORGANIZATIONS
LOUISIANA & MISSISSIPPI (Continued)
(Dollars in Thousands)
Return Return
Holding Company on Average on Average
City, State, Zip Assets Equity
3/93 3/93
________________ ______________ ______________
Premier Bancorp, Inc. 5.94% 79.58%
Baton Rouge, LA
First Commerce Corporation 1.49 21.28
New Orleans, LA
Hibernia Corporation 0.88 11.01
New Orleans, LA
Whitney Holding Corporation 1.19 17.95
New Orleans, LA
Hancock Holding Company 0.67 18.15
Gulfport, MS
Deposit Guaranty Corporation 1.15 16.11
Jackson, MS
Trustmark Corporation 1.10 15.30
Jackson, MS
________________ ______________ ______________
Gr. Totals, 7 Institutions 1.73% 25.33%
<PAGE>
COMPARABLE VALUES FOR REGIONAL BANKING ORGANIZATIONS
LOUISIANA & MISSISSIPPI (Continued)
(Dollars in Thousands)
Common Div Other Div
Holding Company Declared/ Declared/
City, State, Zip Net Income Net Income
3/93 3/93
_______________ ______________ ______________
Premier Bancorp, Inc. 0.00% 1.18%
Baton Rouge, La
First Commerce Corporation 21.93 4.85
New Orleans, LA
Hibernia Corporation 0.00 0.00
New Orleans, LA
Whitney Holding Corporation 11.18 0.00
New Orleans, LA
Hancock Holding Company 20.60 0.00
Gulfport, MS
Deposit Guaranty Corporation 27.20 0.00
Jackson, MS
Trustmark Corporation 23.87 0.00
_______________ ______________ ______________
Gr. Totals, 7 Institutions 10.49% 1.36%
<PAGE>
Analysis of Selected Merger Transactions. Bank Advisory Group analyzed the
acquisitions of selected banks in Louisiana and Texas since July 1992. These
transactions included (Acquiror/Acquiree): Premier Bancorp/Alerion Bank; First
Commerce Corporation/First Acadiana National Bancshares; Comerica, Inc./Sugar
Creek National Bank; Banc One Corporation/United American Bancshares, Inc.;
Charter Bancshares, Inc./University National Bank; First Bancorp of LA,
Inc./Southern National Bank; BancWest Bancorp, Inc./Community State Bank;
Fredonia State Bank/Commercial State Bank; City Bank & Trust/Fontainebleau
Commercial Bank; Surety Capital Corp./First State Bank; Surety Capital
Corp./Bank of East Texas; First Commercial Corporation/Texas Commerce Bank
Longview and First Commercial Corporation/Stone Fort National Bank. For each
such acquisition, Bank Advisory Group considered the assets, return on assets,
return on equity, and ratio of equity to assets of the acquired bank, as well
as the deal structure (cash or stock), the total price paid, the price/equity
multiple, the price/earnings multiple, the price/equity index, and the
price/earnings index, along with the weighted averages for all the acquired
banks and for the profitable acquired banks only. Excluding the acquisition of
the one non-profitable bank, the figures were as follows:
Weighted
High Low Average Commercial
Assets $(000): 330,225 8,414 128,043 166,631
Return on Assets: 1.96% 0.66% 1.04% 1.53%
Return on Equity: 19.69% 7.42% 12.81% 21.50%
Equity to Assets: 14.04% 6.44% 8.54% 7.96%
Total Price $(000): 47,000 640 15,549 18,700
Price/Equity Multiple: 1.68x 1.00x 1.42x 1.41x
Price/Earnings Multiple: 19.29x 6.43x 11.66x 7.22x
Price/Equity Index: 14.23 7.61 12.14 11.22
Price/Earnings Index: 14.37 7.38 12.09 11.03
No company or transaction used in the above analysis as a comparison is
identical to Commercial, Hibernia, or the Merger. Accordingly, an analysis of
the results of the foregoing is not mathematical; rather, it involves complex
considerations and judgments concerning differences in the financial and
operating characteristics of the companies and other factors that could affect
the public trading value of the companies to which Commercial, Hibernia, and the
Merger are being compared.
Analysis of Selected Financial Data for Commercial and Hibernia. Bank
Advisory Group's report included an analysis of selected historical financial
information for Commercial and Hibernia for the three years ended December 31,
1990, 1991, and 1992, and year-to-date figures through March 31, 1993. This
review included income statement and balance sheet data for each of Commercial
and Hibernia, selected financial ratios relating to capital structure,
profitability, balance sheet composition, asset quality, and liquidity, and
calculations relating to the relative composition of assets, liabilities, loans
and leases, and income and expenses.
Marketability of Shares Received. Commercial shareholders will receive
Hibernia shares which, with the exception of certain restrictions which apply
to directors, executive officers and certain substantial shareholders of
Commercial, will be immediately marketable. Unlike the market for Commercial's
shares, Hibernia's shares are actively traded. Hibernia's Common Stock is
listed for trading on the NYSE.
The summary set forth above does not purport to be a complete description of
the presentation by Bank Advisory Group to the Commercial Board or of the
analysis performed by Bank Advisory Group. The preparation of a fairness
opinion is not necessarily susceptible to partial analyses or summary
description. Bank Advisory Group believes that its analyses and the summary set
forth above must be considered as a whole and that selecting portions of its
analysis and of the factors considered, without considering all analyses and
factors, would create an incomplete view of the process underlying the analyses
set forth in its presentation to the Commercial Board. In addition, Bank
Advisory Group may have given various analyses more or less weight than other
analyses, and may have deemed various assumptions more or less probable than
other assumptions, so that the ranges of valuations resulting from any
particular analysis described above should not be taken to be Bank Advisory
Group's view of the actual value of Commercial or the combined value of
Commercial and Hibernia. The fact that any specific analysis has been referred
to in the summary above is not meant to indicate that such analysis was given
greater weight than any other analysis.
In performing its analyses, Bank Advisory Group made numerous assumptions
with respect to industry performance, general business, and economic conditions
and other matters, many of which are beyond the control of Commercial or
Hibernia. The analyses performed by Bank Advisory Group are not necessarily
indicative of actual values or actual future results, which may be significantly
more or less favorable than suggested by such analyses. Such analyses were
prepared solely as part of Bank Advisory Group's analysis of the fairness of the
financial terms of the Merger from the perspective of the common shareholders
of Commercial and were provided to the Commercial Board in connection with the
delivery of Bank Advisory Group's opinion. The analyses do not purport to be
appraisals or to reflect the prices at which a company might actually be sold
or the prices at which any securities may trade at the present time or at any
time in the future. Bank Advisory Group used in its analyses various
projections of future performance prepared by the managements of Commercial and
Hibernia. The projections are based on numerous variables and assumptions which
are inherently unpredictable and must be considered not certain of occurrence
as projected. Accordingly, actual results could vary significantly from those
set forth in such projections.
As described above, Bank Advisory Group's opinion and presentation to the
Commercial Board were among the many factors taken into consideration by the
Commercial Board in making its determination to approve the Merger.
Prior to its retention in connection with this opinion, Bank Advisory Group
provided consulting services to Commercial and the Bank; however, Bank Advisory
Group has indicated that the revenues derived from the delivery of such services
are insignificant when compared to Bank Advisory Group's total gross revenues.
Bank Advisory Group has not provided any services to Hibernia.
The engagement letter dated July 22, 1993, between Bank Advisory Group and
Commercial provides that Bank Advisory Group will receive between $25,000 and
$27,000 as professional fees for providing the Opinions and certain other
services. Approximately $6,000 to $7,000 of these fees represents compensation
for certain written, detailed analyses furnished by Bank Advisory Group, and
approximately $19,000 to $20,000 is compensation for issuing fairness opinions
regarding the financial adequacy of the proposed Merger. Commercial also agreed
to reimburse Bank Advisory Group for certain out-of-pocket expenses and to
indemnify and hold harmless Bank Advisory Group against certain liabilities.
Surrender of Certificates
As soon as practicable after the Effective Date, the transfer agent of
Hibernia, in its capacity as Exchange Agent, will mail all non-dissenting
shareholders of Commercial Bancshares a letter of transmittal, together with
instructions for the exchange of their Commercial Common Stock certificates for
certificates representing Hibernia Common Stock. Until so exchanged, each
certificate representing Commercial Common Stock outstanding immediately prior
to the Effective Date shall be deemed for all purposes to evidence ownership of
the number of shares of Hibernia Common Stock into which such shares have been
converted on the Effective Date. Shareholders should not send their Commercial
Common Stock certificates for surrender until they receive further instructions
from the Exchange Agent.
Representations and Warranties; Conditions to the Merger; Waiver
The Agreement contains representations and warranties by Commercial
regarding, among other things, its organization, authority to enter into the
Agreement, capitalization, properties, financial statements, pending and
threatened litigation, contractual obligations and contingent liabilities. The
Agreement also contains representations and warranties by Hibernia regarding,
among other things, its organization and authority to enter into the Agreement,
capitalization, financial statements and other public reports. Except as
otherwise provided in the Agreement, these representations and warranties will
not survive the Effective Date.
The obligations of Hibernia and Commercial to consummate the Merger and the
Bank Merger are conditioned upon, among other things, approval of the Agreement
by Commercial's shareholders; the receipt of necessary regulatory approvals,
including the approval of the OCC and the Federal Reserve without any materially
burdensome conditions; the receipt of an opinion to the effect that the Merger,
when consummated in accordance with the terms of the Agreement, will constitute
a reorganization within the meaning of Section 368 of the Code and that, to the
extent Commercial Common Stock is exchanged for Hibernia Common Stock,
Commercial's shareholders will recognize no gain or loss for federal income tax
purposes with respect to such exchange; the effectiveness under the Securities
Act of a registration statement relating to the Hibernia Common Stock to be
issued in connection with the Merger and the absence of a stop order suspending
such effectiveness; the absence of an order, decree or injunction enjoining or
prohibiting the consummation of the Merger and the Bank Merger; the receipt of
all required state securities law permits or authorizations; the accuracy of the
representations and warranties set forth in the Agreement as of the Closing
Date; the listing of the Hibernia Common Stock to be issued in the Merger on the
NYSE; the receipt of certain opinions of counsel; in the case of Commercial, the
receipt of certain opinions of Bank Advisory Group and, in the case of Hibernia,
the absence of an event that would preclude the Merger from being accounted for
as a pooling of interests. In this regard, Hibernia may abandon the Merger if
Commercial shareholders holding more than 10% of the outstanding Commercial
Common Stock exercise and perfect dissenters' rights.
Except with respect to any required shareholder or regulatory approval,
substantially all of the conditions to consummation of the Merger may be waived
at any time by the party for whose benefit they were created, and the Agreement
may be amended or supplemented at any time by written agreement of the parties,
except that no such waiver, amendment or supplement executed after approval of
the Agreement by Commercial's shareholders may reduce the Exchange Ratio.
Regulatory and Other Approvals
Hibernia is a registered bank holding company and as such is regulated by the
Federal Reserve Board. The approval of the Federal Reserve Board of the Merger
is required in order to consummate the Merger.
HNB is regulated by the OCC, and the Bank Merger consequently must be
approved by the OCC before it may be effected. Although First Commercial is a
Louisiana bank, no state regulatory approval of the Bank Merger is required.
When the approval of the Federal Reserve and the OCC have been obtained,
Commercial and Hibernia must wait at least 30 days prior to consummating the
Merger. During this 30-day period, the Department of Justice may object to the
Merger on antitrust grounds.
The shares of Hibernia Common Stock offered pursuant to the Proxy Statement-
Prospectus will be registered with the Securities and Exchange Commission and
the state securities regulators in those states that require such registration.
The shares will also be listed on the NYSE.
Business Pending the Merger
Under the terms of the Agreement, neither Commercial nor the Bank may,
without the prior written consent of Hibernia or as otherwise provided in the
Agreement: (i) create or issue any additional shares of capital stock or any
options or other rights to purchase or acquire shares of capital stock; (ii)
enter into employment contracts with directors, officers or employees or
otherwise agree to increase the compensation of or pay any bonus to such persons
except in accordance with existing policy; (iii) enter into or substantially
modify any employee benefits plans; (iv) establish any automatic teller machines
or branch or other banking offices; (v) make any capital expenditure(s) in
excess of $100,000; (vi) merge with any other company or bank or liquidate or
otherwise dispose of its assets; or (vii) acquire another company or bank
(except in connection with foreclosures of bona fide loan transactions). In
addition, Commercial may not solicit bids or other transactions that would
result in a merger of Commercial or the Bank with an entity other than Hibernia
or HNB. Commercial is also prohibited from paying dividends prior to the
Closing Date, except that it may pay a dividend of $1.00 per shares of
Commercial Common Stock on or after March 31, 1994 if the Merger has not been
consummated as of that date.
Effective Date of the Merger; Termination
After all conditions to consummation of the Merger have been satisfied or
waived, the effective date shall be the date and time that the Merger will
become effective as of the date and time of the issuance by the Louisiana
Secretary of State of a certificate of merger relating to the Merger (the
"Effective Date").
Prior to the Effective Date, the Agreement may be terminated by either party,
whether before or after approval of the Agreement and the Merger by Commercial's
shareholders: (i) in the event of a material breach by the other party of any
representation, warranty or covenant which has not been cured within the period
allowed by the Agreement; (ii) if any of the conditions precedent to the
obligations of such party to consummate the Merger have not been satisfied,
fulfilled or waived as of the Closing Date; (iii) if any application for any
required federal or state regulatory approval has been denied, and the time for
all appeals of such denial has run; (iv) if the shareholders of Commercial fail
to approve the Merger at the Special Meeting; or (v) in the event that the
Merger is not consummated by July 1, 1994. The Agreement also may be terminated
at any time by the mutual consent of the parties. In the event of termination,
the Agreement becomes null and void, except that certain provisions thereof
relating to expenses and confidentiality and the accuracy of information
provided for inclusion in the Registration Statement of which this Prospectus
is a part survive any such termination and any such termination does not
relieve any breaching party from liability for any uncured breach of any
covenant or agreement giving rise to such termination.
Management and Operations After the Merger
On the Effective Date, Commercial will be merged with and into Hibernia.
Immediately thereafter, the Bank will merge with and into HNB and the separate
existences of Commercial and the Bank will cease. The offices of the Bank will
operate as branch banking offices of HNB. The employees of the Bank on the
Effective Date will become employees of HNB as of the Effective Date and will
be employed on an "at will" basis thereafter, subject to any existing employment
agreements or similar contractual obligations assumed by Hibernia.
The Boards of Directors of Hibernia and HNB following the Merger shall
consist of those persons serving as directors immediately prior thereto.
Information regarding the directors of Hibernia elected at its annual meeting
of shareholders on April 27, 1993 is contained in documents incorporated herein
by reference. See "AVAILABLE INFORMATION." The directors of Commercial and the
Bank will resign their positions as directors as of the Effective Date.
Certain Differences in Rights of Shareholders
If the shareholders of Commercial approve the Amendment and the Merger and
the Merger is subsequently consummated, all shareholders of Commercial, other
than any shareholders who exercise and perfect dissenters' rights, will become
shareholders of Hibernia. As shareholders of Hibernia, their rights will be
governed by and subject to Hibernia's Articles of Incorporation and Bylaws,
rather than Commercial's Articles of Incorporation and Bylaws. The following
is a summary of the principal differences between the rights of shareholders of
Commercial and Hibernia not described elsewhere in this Proxy Statement-
Prospectus.
Liquidity of Stock. There currently is no ready market for the shares of
Commercial Common Stock, and such a market is not likely to develop in the
future. The shares of Hibernia Common Stock that will be issued in the Merger
will be registered under applicable securities laws and may therefore be freely
resold by persons who are not "affiliates" of Commercial or Hibernia. In
addition, the Hibernia Common Stock is listed on the NYSE and actively traded
on that exchange. Current quotes of the market price of Hibernia Common Stock
are available from brokerage firms and other securities professionals, as well
as other sources, and are published in major newspapers on a daily basis.
Shareholder Actions and Voting Requirements. Commercial's Articles of
Incorporation require a super-majority (more than a majority of the shares
represented) to authorize (a) modification, amendment, or removal of preemptive
rights; (b) removal of directors; (c) adoption, amendment, or repeal of Bylaws;
or (d) amendment of certain provisions of the Articles of Incorporation relating
to directors, Bylaws, mergers, consolidations and certain other major
transactions. Commercial's Articles of Incorporation, as in effect before the
Special Meeting, also contain various "anti-takeover" provisions which are
described in detail above. See "PROPOSED AMENDMENT TO ARTICLES OF INCORPORATION
OF COMMERCIAL -- Description of Article VII and Proposed Amendment." If the
Amendment is approved, a majority of the voting power present or represented by
proxy at a meeting called for the purpose will be sufficient to approve (a) any
agreement of merger or consolidation, (b) any sale, lease, exchange, or other
disposition of all or substantially all of Commercial's assets, and (c)
dissolution or liquidation of Commercial.
Hibernia's Articles of Incorporation and Bylaws are consistent with the
Amendment but do not include provisions similar to those contained in Article
VII and elsewhere in Commercial's Articles of Incorporation requiring super-
majority votes to approve certain transactions or to amend those provisions of
the Articles and Bylaws.
Preemptive Rights. All shareholders of Commercial have preemptive rights
with respect to the issuance by Commercial of shares of stock, except with
respect to certain specified issuances. Shareholders of Hibernia have no
preemptive rights.
Removal of Directors. The shareholders of Commercial may remove a director
from office, but only for cause and only by affirmative vote of 75% of the total
voting power of the corporation entitled to vote generally for directors of the
corporation at any special meeting called for the purpose. Shareholders of
Hibernia may remove a director for cause (defined as gross negligence or wilful
misconduct) by the vote of a majority of the total voting power and may remove
a director without cause by a vote of two-thirds of the total voting power.
Amendment of Articles and Bylaws. As described in more detail above,
Commercial's Articles of Incorporation currently provide that certain provisions
of those Articles of Incorporation (relating to directors, Bylaws, mergers,
consolidations and certain other fundamental changes, and certain required
shareholder votes) may only be amended by 75% of the outstanding shares of the
corporation. The Amendment, if approved, would modify these voting requirements
in certain respects. See "PROPOSED AMENDMENT TO THE ARTICLES OF INCORPORATION
OF COMMERCIAL." Hibernia's Articles of Incorporation may be amended by a vote
of a majority of the voting power present at any meeting called for that
purpose.
Commercial's Articles of Incorporation provide that the Bylaws may be amended
by the affirmative vote of a majority of the entire Board of Directors or by the
affirmative vote of the holders of 75% or more of the total voting power of the
corporation. Commercial's Bylaws provide that they may be amended or repealed
by the affirmative vote of a majority of the entire Board of Directors or by the
affirmative vote of a majority of the shareholders at any shareholders' meeting.
The Bylaws of Hibernia may be amended or repealed by a vote of two-thirds of the
total voting power outstanding or by a vote of two-thirds of the "continuing
directors" of the company, as defined in the Bylaws. A "continuing director"
for this purpose is generally a director who was nominated for election by a
majority of the existing directors.
Special Meetings of Shareholders. The Board of Directors may call a special
meeting of the shareholders of Commercial at any time. In addition, Commercial
shareholders owning an aggregate of at least 51% of the capital stock of
Commercial may call a special meeting of the shareholders of Commercial.
Special meetings of the shareholders of Hibernia may be called by the
Chairman of the Board, the President, the Chief Executive Officer or the
Treasurer of Hibernia. In addition, shareholders holding one-fifth or more of
the total voting power of Hibernia may request a special meeting of shareholders
and, upon receipt of such request, the Secretary of Hibernia is required to call
a special meeting of the shareholders.
Shareholder Proposals. Commercial's Articles of Incorporation and Bylaws do
not contain any provision either expressly forbidding or permitting a
shareholder to submit a proposal for consideration at shareholders' meeting or
to nominate any person for election as a director. Hibernia's Bylaws contain
certain provisions expressly allowing shareholders to submit such proposal and
to nominate individuals for election as directors, under certain circumstances
and provided the shareholder complies with all of the conditions set forth in
those provisions.
Certain Transfer Restrictions Relating to 5-Percent Shareholders. Article
IX of Hibernia's Articles of Incorporation restricts transfers of equity
interests in the Hibernia under certain circumstances. This restriction (the
"5-Percent Restriction") is intended to protect Hibernia from certain transfers
of equity interests which could have a material adverse effect on Hibernia's
ability to use certain tax benefits to reduce its taxable income. Under the 5-
Percent Restriction, if, before December 29, 1995, a shareholder transfers or
agrees to transfer Hibernia stock or stock equivalents, the transfer will be
prohibited and void to the extent that it would result under applicable Federal
income tax rules in the identification of a new "5-percent shareholder" of
Hibernia or an increase in the percentage stock ownership of any existing "5-
percent shareholder" is increased.
The 5-Percent Restriction does not apply to any transfer which has been
approved in advance by the Board of Directors of Hibernia, or which is made in
compliance with exceptions established from time to time by resolution of the
Board of Directors. The Board of Directors may withhold its approval of a
transfer only if, in its judgment, the transfer may result in any limitation on
the use by Hibernia of its net operating loss carryforwards or built-in tax
losses or other tax attributes. The Board of Directors may adopt further
resolutions exempting additional transfers from the 5-Percent Restriction.
The 5-Percent Restriction may adversely affect the marketability of the
Hibernia Common Stock by discouraging potential investors from acquiring equity
securities of Hibernia. However, since its adoption in September 1992, the 5-
Percent Restriction does not appear to have had any such adverse affect on the
marketability of the Hibernia Common Stock.
While the 5-Percent Restriction may have the effect of impeding a
shareholder's attempt to acquire a significant or controlling interest in
Hibernia, the purpose of the 5-Percent Restriction is to preserve the tax
benefits of Hibernia's previous losses, not to insulate management from change.
Management of Hibernia believes the tax benefits outweigh any anti-takeover
impact of the 5-Percent Restriction. Any anti-takeover effect of the 5-Percent
Restriction will end with the termination of the 5-Percent Restriction on
December 29, 1995.
Indemnification of Officers and Directors. Hibernia's Articles of
Incorporation provide for indemnification of officers and directors of the
company under the circumstances permitted by Louisiana law. This
indemnification provision requires indemnification, except as prohibited by law,
of officers and directors of Hibernia or any of its wholly-owned subsidiaries
against expenses, judgments, fines and amounts paid in settlement actually and
reasonably incurred in connection with any action, suit or proceeding, whether
civil or criminal, administrative or investigative (including any action by or
in the right of Hibernia) by reason of the fact that the person served as an
officer or director of Hibernia or one of its subsidiaries. Officers and
directors may only be indemnified against expenses in cases brought by the
officer or director against Hibernia if the action is a claim for
indemnification, the officer or director prevails in the action, or
indemnification is included in any settlement or is awarded by the court. The
indemnification provision further requires Hibernia to advance defense costs to
officers and directors in such suits and proceedings upon receipt of an
undertaking to repay such expenses unless it is ultimately determined that the
officer or director is entitled to indemnification as authorized by the Article.
Commercial's Bylaws provide that, with two exceptions, the corporation shall
indemnify an individual made a party to a proceeding because he is or was a
director against liability incurred in the proceeding if (a) he conducted
himself in good faith; and (b) he reasonably believed (i) in the case of conduct
in his official capacity with the corporation, that his conduct was in its best
interest, and (ii) in all other cases, that his conduct was at least not opposed
to its best interests; and (c) in the case of any criminal proceeding, he had
no reasonable cause to believe his conduct was unlawful. The two exceptions are
that the corporation may not indemnify a director (x) in connection with a
proceeding by or in the right of the corporation in which the director was
adjudged liable to the corporation, or (y) in connection with any proceeding
charging improper personal benefit to him, whether or not involving action in
his official capacity, in which he was adjudged liable on the basis that a
personal benefit was improperly received by him. Indemnification permitted
under Commercial's Bylaws in connection with a proceeding by or in the right of
the corporation is limited to reasonable expenses incurred in connection with
defense of the claims.
Like the corresponding provision of Hibernia's Articles of Incorporation,
Commercial's Bylaws provide that Commercial shall pay for or reimburse the
reasonable expenses of directors who are parties to a proceeding and that such
expenses must be paid in advance of the final adjudication of the matter. The
standards imposed by Commercial's Bylaws, however, differ somewhat from
Hibernia's in this regard. Under Commercial's Bylaws, Commercial is only
obligated to advance legal fees to directors if (a) the director furnishes the
corporation a written affirmation of his good faith belief that he has met the
standard of conduct described in the preceding paragraph, (b) the director
furnishes the corporation a written undertaking, executed personally or on his
behalf, to repay the advanced amounts if it is ultimately determined that he did
not meet the applicable standard of conduct, and (c) a determination is made
that the facts then known to those making the determination would not preclude
indemnification under the Bylaws.
Commercial's Bylaws require indemnification of a director or officer who was
wholly successful in the defense of any proceeding to which he is a party
because he is or was a director or officer of the corporation against reasonable
expenses incurred by him in connection with the proceeding. Additionally,
Commercial may, but is not required to, indemnify and advance expenses to
officers, employees or agents of the corporation who are not directors to the
same extent as such indemnification or payment may be available to a director.
Interests of Certain Persons in the Merger
Indemnification of Commercial Directors. The terms of the Merger include
certain provisions that protect the officers and directors of Commercial and the
Bank from and against liability for actions arising while they served in those
capacities for Commercial and/or the Bank. The Agreement provides for
indemnification of such persons to the same extent as they would have been
indemnified under the Articles of Incorporation and Bylaws of Hibernia in effect
on September 28, 1993, except that the Agreement limits Hibernia's aggregate
liability for such indemnification to $5 million and requires each officer and
director eligible for such indemnification to execute a joinder agreement in
which such persons agree to cooperate with Hibernia in any litigation or
proceeding giving rise to a claim of indemnification. The indemnification
provisions of the Agreement do not apply to claims of which such persons were
aware or should have been aware on or prior to the Closing Date as to which
Commercial's or the Bank's director and officer liability insurance carrier was
not notified prior to the Closing.
The Agreement also provides for indemnification of Commercial's officers,
directors and certain affiliates from and against liability arising under the
Securities Act or otherwise if such liability arises out of or is based on an
untrue statement or omission of a material fact required to be stated therein
or necessary to make the statements made therein not misleading. This
indemnification does not apply to statements made in reliance on information
furnished to Hibernia by Commercial for use in the Registration Statement,
including this Proxy Statement-Prospectus.
Change of Control Severance Agreements. A number of employees and officers
of Commercial and the Bank have executed agreements with Commercial and/or the
Bank that provide for the payment of certain amounts in the event the employment
of any such person is terminated as a result of the Merger. These agreements
provide for severance in the event the employee is terminated as a result of a
change of control of Commercial and/or the Bank in an amount equal to either six
months' or one year's salary, depending upon the seniority and position of the
particular employee.
Advisory Board of Directors. If the Merger occurs, HNB is considering the
creation of an Advisory Board of Directors for the Acadiana Region. If the
Advisory Board is created, the number and identities of the persons who would
serve on that Board has not been determined, but the Board, if created, is
likely to include members of the Board of Directors of the Bank. The function
and authority of such a Board has not yet been determined. If such a Board is
created, the members of the Advisory Board would be compensated for their
attendance at each meeting of the board in an amount that has not been
determined but that is expected to be comparable to the amounts currently paid
to HNB's other advisory boards.
Certain Federal Income Tax Consequences
The following is a summary description of certain federal income tax
consequences of the Merger; it is not intended to be a complete description of
the federal income tax consequences of the Merger. Tax laws are complex, and
each shareholder's individual circumstances may affect the tax consequences to
such shareholder. In addition, no information is provided with respect to the
tax consequences of the Merger under applicable state, local or other tax laws.
Each shareholder is therefore urged to consult a tax advisor regarding the tax
consequences of the Merger to him or her.
Consummation of the Merger is conditioned upon the receipt of an opinion to
the effect that the Merger, when consummated in accordance with the terms of the
Agreement will constitute a reorganization within the meaning of Section 368 of
the Code, and that the exchange of Commercial Common Stock for Hibernia Common
Stock will not give rise to the recognition of gain or loss for federal income
tax purposes to Commercial's shareholders with respect to such exchange. See
"PROPOSED MERGER -- Representations and Warranties; Conditions to the Merger;
Waiver."
If the Merger constitutes a reorganization within the meaning of Section 368
of the Code: (i) no gain or loss will be recognized by Commercial, the Bank,
Hibernia or HNB by reason of the Merger; (ii) a shareholder of Commercial will
not recognize any gain or loss for federal income tax purposes to the extent
Hibernia Common Stock is received in the Merger in exchange for Commercial
Common Stock; (iii) the tax basis in the Hibernia Common Stock received by a
shareholder of Commercial will be the same as the tax basis in the Commercial
Common Stock surrendered in exchange therefor; and (iv) the holding period, for
federal income tax purposes, for Hibernia Common Stock received in exchange for
Commercial Common Stock will include the period during which the shareholder
held the Commercial Common Stock surrendered in the exchange, provided that the
Commercial Common Stock was held as a capital asset at the Effective Date.
The Louisiana income tax treatment to the shareholder of Commercial should
be substantially the same as the federal income tax treatment to the
shareholders of Commercial described above. Shareholders residing in states
other than Louisiana are encouraged to consult their tax advisors regarding the
state income tax implications of the Merger to them.
The parties have received the opinion of Ernst & Young, certified public
accountants, as to the matters described in this section, a copy of which is
attached hereto as Appendix F. As noted in the opinion, the opinion is based
upon certain representations and assumptions described therein. Shareholders
of Commercial are urged to review the full text of the opinion of Ernst & Young
attached heretpo as Appendix F with regard to the tax consequences of the Merger
to them.
For information regarding the federal income tax consequences of cash
payments received by dissenting shareholders, see "PROPOSED MERGER -- Rights of
Dissenting Shareholders."
Resale of Hibernia Common Stock
The shares of Hibernia Common Stock issuable to shareholders of Commercial
upon consummation of the Merger have been registered under the Securities Act.
It is a condition to closing of the Merger that all shares of Hibernia Common
Stock issued in connection with the Merger be approved for listing, upon
official notice of issuance, on the NYSE. Such shares may be traded freely by
those shareholders not deemed to be affiliates of Commercial as that term is
defined under the Securities Act. The term "affiliate" generally means each
person who controls, or is a member of a group that controls, or who is under
common control with, Commercial, and for purposes hereof could be deemed to
include all executive officers, directors and 10% shareholders of Commercial.
Hibernia Common Stock received and beneficially owned by those shareholders
who are deemed to be affiliates of Commercial may be resold without registration
as provided by Rule 145, or as otherwise permitted, under the Securities Act.
Such affiliates, provided they are not affiliates of Hibernia Corporation, may
publicly resell Hibernia Common Stock received by them in the Merger subject to
certain limitations, principally as to the manner of sale, during the two years
following the Effective Date. After the two-year period, such affiliates may
resell their shares without restriction. In addition, shares of Hibernia Common
Stock issued to affiliates of Commercial in the Merger will not be transferable
until financial statements pertaining to at least 30 days of post-Merger
combined operations of Hibernia and Commercial have been published, in order to
satisfy certain requirements of the Commission relating to pooling-of-interests
accounting treatment.
The Agreement provides that Commercial will use its best efforts to identify
those persons who may be deemed to be affiliates of Commercial and to cause each
person so identified to deliver to Hibernia a written agreement providing that
such person will not dispose of Commercial Common Stock or Hibernia Common Stock
received in the Merger except in compliance with the Securities Act, the rules
and regulations promulgated thereunder and the Commission's rules relating to
pooling-of-interests accounting treatment.
Rights of Dissenting Shareholders
Each Commercial shareholder who objects to the Merger is entitled to the
rights and remedies of dissenting shareholders provided in Louisiana Revised
Statutes Section 12: 131 of the Louisiana Business Corporation Law, as amended
("LBCL"), a copy of which is set forth as Appendix E hereto.
Section 131 requires that shareholders of Louisiana companies who vote
against a merger have the right to dissent if the merger is authorized by less
than 80% of the total voting power of the company. In order to so dissent, the
shareholder must file with the corporation a written objection to the merger,
which objection must be filed with the corporation prior to the date of the
meeting at which the vote is taken. In addition, the shareholder must vote
against the merger at the meeting. If the merger is approved by less than
eighty percent of the total voting power of the company, the company must
provide by registered mail notice of such vote to shareholders who filed a
written objection and voted against the merger. A dissenting shareholder may
then file with the company a written demand for the fair cash value of his
shares as of the date before the vote was taken. The demand must be made within
twenty days of the mailing of the notice from the company and must include the
fair value being requested by the dissenting shareholder. The shareholder must
also include in the demand a post office address to which the company's reply
may be sent and must deposit his shares in escrow at a bank, duly endorsed and
transferred to the company on the sole condition that the fair value be paid.
If the company does not agree with the fair value requested by the dissenting
shareholder, it must notify the shareholder within twenty days after receipt of
the shareholder's demand and state in such notice the value it is willing to pay
for the shares. If a disagreement continues over the fair value, the LBCL
provides a method for determination of fair value by a district court in the
parish in which the corporation (if it still exists) or the merged corporation
has its registered office.
The amount received by a dissenting shareholder may be more or less than, or
equal to, the value of the Hibernia Common Stock received by other Commercial
shareholders in the Merger.
Shareholders who file a demand for payment of fair value cease to have any
rights as shareholders of the company thereafter. Also, shareholders may
withdraw their demand at any time before the company gives notice of
disagreement. Withdrawal of a demand thereafter requires the written consent
of the company in order to be effective.
Each step must be taken in strict compliance with the applicable provisions
of the statute in order for holders of Commercial Common Stock to perfect
dissenters' rights.
Cash received by a dissenting shareholder of Commercial in exchange for his
or her Commercial stock should be treated as having been received by such
shareholder as a distribution in redemption of his or her stock, subject to the
provisions and limitations of Section 302 of the Code. If, as a result of such
distribution, a shareholder owns no stock either directly or through the
application of Section 318(a) of the Code, the redemption should be a complete
termination of interest within the meaning of Section 302(b)(3) of the Code and
such cash will be treated as a distribution in full payment in exchange for his
or her stock, as provided by Section 302(a) of the Code. The Louisiana income
tax treatment to dissenting shareholders of Commercial will be substantially the
same as the federal income tax treatment to such shareholders. Shareholders
residing outside of Louisiana should consult their tax advisors as to the state
income tax consequences of exercising dissenters' rights.
Dividend Reinvestment Plan
Hibernia Corporation maintains a Dividend Reinvestment Plan through which
shareholders of Hibernia who participate in the plan may reinvest dividends in
Hibernia Common Stock. Shares are purchased for participants in the plan at
their market value as determined by the market price of the stock as listed on
the NYSE. The plan also permits participants to purchase additional shares with
cash at the then-current market price. All shares purchased through the plan
are held in a separate account for each participant maintained by Hibernia's
transfer agent. Shareholders who participate in the Dividend Reinvestment Plan
purchase shares through the plan without paying brokerage commissions or other
costs ordinarily associated with open market purchases of stock. It is
anticipated that the Dividend Reinvestment Plan will continue after the
Effective Date and that shareholders of Commercial who become shareholders of
Hibernia will have the same opportunity to participate in the plan as other
shareholders of Hibernia.
Accounting Treatment
It is anticipated that the Merger will be accounted for as a "pooling-of-
interests" transaction. In order for the merger to qualify for pooling-of-
interests accounting treatment, 90% or more of the outstanding Commercial Common
Stock must be exchanged for Hibernia Common Stock. If holders of more than 10%
of the outstanding Commercial Common Stock exercise and perfect dissenters'
rights, the Merger will not qualify for pooling-of-interest accounting. Also,
in order for the pooling-of-interests accounting method to apply, "affiliates"
of Commercial cannot reduce their holdings of Hibernia Common Stock received in
the Merger for a period beginning 30 days prior to the Effective Date and ending
upon the publication of at least 30 days of post-Merger combined operations of
Commercial and Hibernia. Persons believed by Commercial to be "affiliates" have
agreed to comply with these restrictions.
Commercial has agreed to use its best efforts to permit the transaction to
be accounted for as a pooling-of-interests. Hibernia is not obligated to
consummate the Merger if the Merger does not qualify for pooling-of-interests
accounting treatment.
CERTAIN REGULATORY CONSIDERATIONS
General
As a bank holding company, Hibernia is subject to the regulation and
supervision of the Federal Reserve Board. Under the Band Holding Company Act
of 1956 (the "BHCA"), bank holding companies may not directly or indirectly
acquire the ownership or control of more than 5% of the voting shares or
substantially all of the assets of any company, including a bank, without the
prior approval of the Federal Reserve Board. In addition, bank holding
companies are generally prohibited from engaging under the BHCA in nonbanking
activities, subject to certain exceptions.
Hibernia's banking subsidiary, Hibernia National Bank, is subject to
supervision and examination by applicable federal and state banking agencies.
HNB is a national banking association subject to the regulation and supervision
of the Comptroller of the Currency (the "Comptroller"). HNB is also subject to
various requirements and restrictions under federal and state law, including
requirements to maintain reserves against deposits, restrictions on the types
and amounts of loans that may be granted and the interest that may be charged
thereon and limitations on the types of investments that may be made and the
types of services that may offered. Various consumer laws and regulations also
affect the operations of HNB. In addition to the impact of regulation,
commercial banks are affected significantly by the actions of the Federal
Reserve Board as it attempts to control the money supply and credit availability
in order to influence the economy.
Payment of Dividends
As a result of a debt restructuring and a shareholder rights offering by
Hibernia in 1992, it has substantial capital in excess of its needs for capital.
Consequently, although Hibernia would ordinarily depend upon payment of
dividends by HNB in order to pay dividends to its shareholders, it does not
currently depend upon HNB dividends for the sources of its dividends to
shareholders. In the event its capital position changes or management
determines to preserve holding company capital for other purposes, Hibernia
would derive substantially all of its income from the payment of dividends by
HNB, and its ability to pay dividends would be affected by the ability of HNB
to pay dividends. HNB is subject to various statutory restrictions on its
ability to pay dividends to Hibernia. Under such restrictions, the amount
available for payment of dividends to Hibernia by HNB was approximately $60
million at September 30, 1993. In addition, the OCC has the authority to
prohibit any national bank from engaging in an unsafe or unsound practice, and
the OCC has indicated its view that it generally would be an unsafe and unsound
practice to pay dividends except out of current operating earnings. The ability
of HNB to pay dividends in the future is presently, and could be further,
influenced by bank regulatory policies or agreements and by capital guidelines.
Additional information in this regard is contained in documents incorporated by
reference herein. See "AVAILABLE INFORMATION."
In addition, consistent with its policy regarding bank holding companies
serving as a source of strength for their subsidiary banks, the Federal Reserve
Board has stated that, as a matter of prudent banking, a bank holding company
generally should not maintain a rate of cash dividends unless its net income
available to common stockholders has been sufficient to fully fund the
dividends, and the prospective rate of earnings retention appears to be
consistent with the holding company's capital needs, asset quality and overall
financial conditions.
<PAGE>
Restrictions on Extensions of Credit
HNB is subject to restrictions imposed by federal law on the ability of any
national bank to extend credit to affiliates, including Hibernia, to purchase
the assets thereof, to issue a guarantee, acceptance or letter of credit on
their behalf (including an endorsement or standby letter of credit) or to
purchase or invest in the stock or securities thereof or to take such stock or
securities as collateral for loans to any borrower. Such extensions of credit
and issuances generally must be secured by eligible collateral and are generally
limited to 15% of HNB's capital and surplus.
CERTAIN INFORMATION CONCERNING COMMERCIAL
Description of Business
General. Commercial was incorporated on October 21, 1983, as a business
corporation under the laws of the State of Louisiana for the principal purpose
of engaging in banking and non-banking activities as allowed for a bank holding
company. Commercial is a registered bank holding company under the BHCA, and
acts as a holding company for its wholly-owned subsidiary, First Commercial
Bank, a state bank organized under the laws of Louisiana. The Bank is
Commercial's only subsidiary. Commercial is a legal entity separate and
distinct from the Bank. Commercial receives substantially all of its revenue
from dividends paid to it by the Bank.
The Bank is the successor to Commercial Bank & Trust Company, which was
organized as a state bank under the laws of Louisiana in 1906. In July, 1989,
Commercial Bank & Trust Company changed its name to First Commercial Bank in
connection with a merger of First National Bank of Abbeville with and into
Commercial Bank & Trust Company. As of September 30, 1993, Commercial and the
Bank had total consolidated assets of approximately $163.3 million and total
consolidated shareholders' equity of approximately $13.6 milion.
The Bank offers consumer and commercial banking services in St. Mary, Iberia
and Vermilion Parishes, Louisiana. The Bank has a total of seven banking
offices, with one office located in each of Baldwin, Centerville, and New
Iberia, Louisiana and two offices located in both Franklin and Abbeville,
Louisiana. Additionally, the Bank has one drive-up only facility that is close
to, and operated in conjunction with, one of the banking offices located in
Franklin. The Bank provides customary banking services such as checking and
savings accounts, various types of time deposits, safe deposit facilities and
money transfers. The Bank also finances commercial transactions and makes and
services both secured and unsecured loans to individuals, firms and
corporations. The lending operations of the Bank include various types of
credit services for the customers of the Bank. Commercial's principal executive
office is at 521 Main Street, Franklin, Louisiana 70538, and its telephone
number is (318) 828-5140.
There is no individual customer or group of customers, the loss of which
would have a material adverse effect on the operations of the Bank. No
significant portion of the Bank's loans is concentrated within a single industry
or group of related industries.
Properties. All properties of Commercial are held through the Bank. As
indicated above, the Bank has seven banking offices and one drive-up only
facility. The Bank owns the land, building and certain related properties where
each of its banking offices is located, other than the New Iberia branch, the
Oaklawn branch in Abbeville and the drive-up only facility in Franklin, which
are leased. The following table gives the location of each of Commercial's
banking offices. None of the banking offices owned by the Bank is subject to
a mortgage.
First Commercial Bank, Franklin, LA Baldwin Branch
521 Main Street Highway 90 and Main Street
Franklin, Louisiana 70538 Baldwin, Louisiana 70514
Edward H. Peterman Branch Drive-In Branch
Highway 182 West 501 First Street
Centerville, Louisiana 70522 Franklin, Louisiana 70538
Northwest Branch Abbeville Branch
301 Northwest Boulevard 407 Charity Street
Franklin, Louisiana 70538 Abbeville, Louisiana 70510
Oaklawn Branch New Iberia Branch
1110 Veterans Memorial Drive 956 South Lewis Street
Abbeville, Louisiana 70510 New Iberia, Louisiana 70560
On September 16, 1993, the Bank received a notice that it had not timely
renewed its lease of the Oaklawn Branch and that the lease had terminated. The
Bank has remained in occupancy at the Oaklawn Branch pursuant to the terms of
an Occupancy Agreement entered into with certain of the co-owners of the
Branch. The Bank was unable to resolve this dispute through negotiations with
the lessors of the Oaklawn Branch and, as a result, determined, with Hibernia's
consent, to move its Oaklawn Branch to a different location that management of
Commercial believes will be more favorable. The co-owners of the property who
did not execute the Occupancy Agreement have commenced litigation against
Commercial and the Bank in this regard, which they are vigorously contesting.
The alleged termination of the Oaklawn Branch lease and the decision by the Bank
to relocate that branch did not result in any modification to the terms of the
proposed Merger.
Employees. Commercial and the Bank have, in the aggregate, approximately 85
full-time equivalent employees.
Competitive Conditions. Commercial and the Bank do business in St. Mary,
Iberia and Vermilion Parishes. Eight other commercial banks and savings and
loan institutions are doing business in St. Mary Parish, nine other commercial
banks and savings and loan institutions are doing business in Iberia Parish, and
nine other commercial banks and savings and loan institutions are doing business
in Vermillion Parish. Intense competition for loans and deposits comes from
other commercial banks and savings and loan associations in the Bank's market
areas. The Bank also competes with credit unions, small loan companies,
insurance companies, mortgage companies, finance companies, brokerage houses and
other financial institutions, some of which are not subject to the same degree
of regulation and restrictions as the Bank and many of which have financial
resources far greater than the Bank.
Ownership of Commercial Common Stock and Dividends
Market Prices. As of the Record Date, there were 281,843 shares of
Commercial Common Stock outstanding and approximately 120 shareholders of record
of such shares. There is no established trading market for Commercial Common
Stock, and it has been subject to only limited trading. The shares are not
listed on any exchange or quoted on any automated quotation system, and no
institution makes a market in the stock. The following table sets forth sales
prices for shares of Commercial Common Stock, of which Commercial's management
is aware, occurring since January 1, 1990. The prices are based on the best
knowledge of Commercial's management, are not necessarily indicative of the fair
market value of the shares at the time of the trade, and may not reflect all
trades or the prices of those trades.
Approximate
Date of
Transaction Number of Shares Price Per Share
December 28, 1990 500 $24.00
February 25, 1991 500 22.00
July 12, 1991 800 20.00
February 4, 1992 40 21.00
May 27, 1993 600 45.00
In addition to the transactions described above, six transactions have
occurred with respect to "directors qualifying shares" of certain current and
one former director of the Bank. Under Louisiana law, directors of the Bank are
required to own at least the lesser of $5,000 book value or $1,000 par value of
shares of Commercial or the Bank. These shares are sometimes called "directors'
qualifying shares." Before January 1, 1993, five directors of the Bank each
owned as their qualifying shares 500 shares of Commercial Common Stock, which
were acquired from Commercial for their par value of $2.00 per share. These
shares were subject to a restriction that permitted Commercial to repurchase at
the same price of $2.00 per share any of the shares held by a director that such
director proposed to transfer. In January of 1993 Commercial agreed to remove
the restrictions permitting such repurchase by Commercial for the 500 directors'
qualifying shares owned by J. Roland Livingston. On April 19, 1993, Commercial
repurchased 500 directors' qualifying shares at $2.00 per share from an
individual who had ceased to be a director of the Bank. Finally, in May and
June 1993, Commercial repurchased the directors' qualifying shares of four of
these directors at the par value thereof of $2.00 per share, and then
immediately resold 500 shares of Commercial Common Stock to each such director
at $40.00 per share.
The proposed Merger was first publicly announced on July 27, 1993. The most
recent sale of Commercial Common Stock of which Commercial's management is aware
before that date occurred on or about May 27, 1993, at $45 per share for a total
of 600 shares.
Ownership of Principal Shareholders. Except for the Commercial Common Stock,
Commercial has no other class of voting securities issued or outstanding. The
following table provides information concerning persons known to Commercial to
be beneficial owners, directly or indirectly, of more than 5% of the outstanding
shares of Commercial Common Stock, as of the Record Date. Except as set forth
below, no person is known by Commercial as of such date to be the beneficial
owner of more than 5% of the outstanding voting securities of Commercial.
Unless otherwise noted, the named persons have sole voting and investment power
with respect to the shares indicated.
Number of Percentage
Name and Address Shares of of
Common Stock Class Owned
P. Foster Bailey 22,491.67 7.98%
P. O. Box 842
Baton Rouge, Louisiana 70821-0842
James J. Bailey, III 22,491.67 7.98%
P. O. Box 842
Baton Rouge, Louisiana 70821-0842
Virginia B. Noland and 22,491.67(1) 7.98%
John B. Noland
Suite 2424, One American Place
Baton Rouge, Louisiana 70825-0007
W. Prescott Foster 20,337.50 7.22%
HC 60, Box 659
Franklin, LA 70538
Murphy J. Foster, Jr. 20,837.50 7.39%
P. O. Box 212
Franklin, Louisiana 70538-9614
Commercial Bancshares, Inc.
Employee Stock Ownership Plan 15,723.00 5.58%
P. O. Box 1200
Jackson, Mississippi 39215-1200
Patricia Palfrey Stiel and 14,425.00(2) 5.12%
David H. Stiel, Jr.
P. O. Box 452
Franklin, Louisiana 70538-0452
Marjorie P. Trowbridge 14,127.00 5.01%
P. O. Box 1068
Franklin, Louisiana 70538-1068
_______________________________
(1) Includes 20,991.67 shares held by Mrs. Noland and 1,500 shares held by Mr.
Noland.
(2) Includes 9,125 shares held by Mrs. Stiel and 5,300 shares held by Mr.
Stiel.
Ownership of Directors and Executive Officers of Commercial. The following
table provides information concerning the shares of Commercial Common Stock
beneficially owned, directly or indirectly, by each director and executive
officer of Commercial, and all directors and executive officers as a group, as
of the Record Date. Unless otherwise noted, the named persons have sole voting
and investment power with respect to the shares indicated.
Number of Percentage
Name and Address Shares of of
Common Stock Class Owned
Murphy J. Foster, Jr. 20,837.50 7.39%
John T. Landry 540.00 *
J. Roland Livingston 1,403.0796(1) *
John B. Noland 22,491.67(2) 7.98%
David H. Stiel, Jr. 14,425.00(3) 5.12%
Newman Trowbridge, Jr. 3,516.00 1.25%
All directors and executive 63,212.579(2,3) 22.11%
officers as a group
____________________________
* Less than 1%
(1) Includes 903.0796 shares held for Mr. Livingston's benefit by Commercial's
Employee Stock Ownership Plan.
(2) Includes 20,991 shares held by Mr. Noland's spouse.
(3) Includes 9,125 shares held by Mr. Stiel's spouse.
Dividends. Commercial declared a dividend of $1.00 per share of Commercial
Common Stock during the second quarter of 1993. Commercial did not declare any
dividends during either the 1992 or 1991 calendar years. The Agreement
prohibits Commercial from declaring or paying any dividends while the Agreement
remains in effect, except that, if the Merger does not close before March 31,
1994, Commercial is permitted to declare and pay on or after March 31, 1994, its
normal dividend of $1.00 per outstanding share of Commercial Common Stock.
Commercial's ability to declare and pay dividends also is restricted under
the provisions of a loan agreement between Deposit Guaranty National Bank
("Deposit Guaranty") and Commercial. Under the provisions of this loan
agreement, Commercial is prohibited from declaring or paying any dividend during
the fiscal year to the extent that such dividend exceeds 8% of the consolidated
net income of Commercial and the Bank in that year.
Commercial's ability to pay dividends is dependent upon the earnings and
financial condition of the Bank, since substantially all of the funds used by
Commercial to pay dividends are derived from dividends paid by the Bank to
Commercial. Dividend payments by the Bank are subject to certain regulatory
restrictions.
RELATIONSHIP WITH INDEPENDENT AUDITORS
Commercial has appointed Castaing, Hussey & Lolan, Certified Public
Accountants, as independent auditors for the fiscal year ending December 31,
1993. Castaing, Hussey and Lolan has continuously served as the independent
auditors for Commercial since the Fall of 1991. A representative of Castaing,
Hussey & Lolan is expected to be present at the Special Meeting of Commercial's
shareholders, will have an opportunity to make a statement if he desires and
will be available to respond to appropriate questions.
VALIDITY OF SHARES
The validity of the shares of Common Stock offered hereby has been passed
upon for Hibernia by Patricia C. Meringer, Associate Counsel and Secretary of
Hibernia. As of the date of this prospectus, Ms. Meringer owned no shares of
Hibernia Common Stock and held options to purchase 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, 1992, have been audited by Ernst & Young,
independent auditors, as set forth in their report thereon incorporated herein
by reference, and has been so incorporated by reference in reliance upon such
report given upon the authority of such firm as experts in accounting and
auditing.
The consolidated financial statements of Commercial for the fiscal years
ended December 31, 1992, 1991 and 1990 contained in this Proxy Statement-
Prospectus have been audited by Castaing, Hussey & Lolan, certified public
accountants, as set forth in their reports thereon contained therein, and have
been included herein in reliance upon such reports given upon the authority of
such firm as experts in accounting and auditing.
<PAGE>
COMMERCIAL BANCSHARES, INC. AND SUBSIDIARY
UNAUDITED FINANCIAL STATEMENTS
SEPTEMBER 30, 1993 AND 1992
<PAGE>
<TABLE>
<CAPTION>
COMMERCIAL BANCSHARES, INC. AND SUBSIDIARY
CONSOLIDATED STATEMENTS OF CONDITION
Unaudited ($ in thousands)
September 30 September 30
1993 1992
ASSETS
<S> <C> <C>
Cash and Due from Banks $6,325 $5,921
Interest Bearing Deposits 38 21
Federal Funds Sold 2,300 6,675
Total Cash and Cash Equivalents 8,663 12,617
Investment Securities 84,967 81,175
Loans (net of allowance for loan losses
of $1,320 and $1,341 at September 30, 1993
and 1992, respectively) 60,298 65,600
Premises and Equipment, Net 3,064 3,330
Real Estate Owned 1,876 2,584
Accrued Interest Receivable 1,724 1,836
Other Assets 2,707 2,393
TOTAL ASSETS $163,299 $169,535
LIABILITIES AND SHAREHOLDERS' EQUITY
LIABILITIES:
Deposits:
Noninterest-Bearing Deposits $20,521 $22,360
Interest-Bearing Deposits 124,069 130,087
Total Deposits 144,590 152,447
Accrued Interest Payable 546 637
Other Liabilities 1,179 1,164
Notes Payable 3,345 3,545
TOTAL LIABILITIES 149,660 157,793
SHAREHOLDERS' EQUITY:
Common Stock, $2 par value, 500,000 shares
authorized, 314,723 shares issued, 281,843 and 282,343
shares outstanding at September 30, 1993 and 1992, respectively 629 629
Capital Surplus 591 515
Treasury Stock, 32,880 and 32,380 shares at cost at September 30, 1993
and 1992, respectively (1,154) (1,153)
Undivided Profits 13,573 11,751
TOTAL SHAREHOLDERS' EQUITY 13,639 11,742
TOTAL LIABILITIES AND SHAREHOLDERS' EQUITY $163,299 $169,535
See notes to consolidated financial statements.
</TABLE>
<PAGE>
<TABLE>
<CAPTION>
COMMERCIAL BANCSHARES, INC. AND SUBSIDIARY
3 MONTHS ENDED 9 MONTHS ENDED
CONSOLIDATED STATEMENTS OF INCOME SEPTEMBER 30 SEPTEMBER 30
Unaudited ($ in thousands, except per share data)
1993 1992 1993 1992
<S> <C> <C> <C> <C>
INTEREST INCOME:
Loans, Including Fees $1,357 $1,603 $4,140 $4,958
Investment Securities:
Taxable 1,171 1,359 3,819 4,348
Non-taxable 11 16 30 59
Federal Funds Sold 40 26 137 164
TOTAL INTEREST INCOME 2,579 3,004 8,126 9,529
INTEREST EXPENSE:
Deposits 961 1,271 3,045 4,339
Notes Payable 63 99 188 314
TOTAL INTEREST EXPENSE 1,024 1,370 3,233 4,653
NET INTEREST INCOME 1,555 1,634 4,893 4,876
PROVISION FOR LOAN LOSSES - - 75 150
NET INTEREST INCOME AFTER PROVISION FOR
LOAN LOSSES 1,555 1,634 4,818 4,726
OTHER INCOME:
Customer Service Fees 258 183 749 544
Gain on Sales of Investment Securities, net - 65 - 43
Other Income 12 47 38 165
TOTAL OTHER INCOME 270 295 787 752
OTHER EXPENSES:
Salaries and Employee Benefits 595 636 1,764 1,852
Occupancy Expense 215 209 610 592
Amortization of Intangible Assets 33 38 99 117
Expenses Related to Real Estate Acquired
by Foreclosure, Net 20 (40) 81 (72)
Other Operating Expenses 436 453 1,252 1,310
TOTAL OTHER EXPENSES 1,299 1,296 3,806 3,799
INCOME BEFORE INCOME TAX EXPENSE,
EXTRAORDINARY ITEM AND CUMULATIVE EFFECT
OF ACCOUNTING CHANGE 526 633 1,799 1,679
INCOME TAX EXPENSE 177 134 607 369
INCOME BEFORE EXTRAORDINARY ITEM AND 349 499 1,192 1,310
CUMULATIVE EFFECT OF ACCOUNTING CHANGE
Extraordinary Gain on Debt Extinguishment, Net of Tax - 336 - 336
Cumulative effect of adoption of SFAS No. 109 - - 501 -
NET INCOME $349 $835 $1,693 $1,646
INCOME PER SHARE:
Income before Extraordinary Item and Cumulative
Effect of Accounting Change $1.24 $1.77 $4.23 $4.64
Extraordinary Gain on Debt Extinguishment, Net of Tax - 1.19 - 1.19
Cumulative Effect of Adoption of SFAS No. 109 - - 1.77 -
NET INCOME PER SHARE $1.24 $2.96 $6.00 $5.83
See notes to consolidated financial statements
</TABLE>
<PAGE>
<TABLE>
<CAPTION>
COMMERCIAL BANCSHARES, INC. AND SUBSIDIARY
CONSOLIDATED STATEMENTS OF FOR THE 9 MONTHS ENDED
CHANGES IN SHAREHOLDERS' EQUITY SEPTEMBER 30, 1993 AND 1992
Unaudited ($ in thousands)
Unrealized Loss
on Marketable
Common Capital Equity Undivided Treasury
Stock Surplus Securities Profits Stock
<S> <C> <C> <C> <C> <C>
BALANCE DECEMBER 31, 1992 $629 $515 $0 $12,162 ($1,153)
Issuance of Common Stock 76
Acquisition of Treasury Stock (1)
Cash Dividends on Common Stock (282)
Net Income 1,693
BALANCE, SEPTEMBER 30, 1993 $629 $591 $0 $13,573 ($1,154)
BALANCE DECEMBER 31, 1991 $629 $515 ($186) $10,105 ($1,153)
Change in Unrealized Loss
on Marketable Equity
Securities 186
Net Income 1,646
BALANCE SEPTEMBER 30, 1992 $629 $515 $0 $11,751 ($1,153)
See notes to consolidated financial statements.
</TABLE>
<PAGE>
<TABLE>
<CAPTION>
COMMERCIAL BANCSHARES, INC. AND SUBSIDIARY
CONSOLIDATED STATEMENTS OF CASH FLOWS
Unaudited ($ in thousands)
9 Months Ended September 30
1993 1992
<S> <C> <C>
Operating Activities
Net income $1,693 $1,646
Adjustments to reconcile net income to net cash provided by
operating activities:
Provision for loan losses and valuations 192 158
Amortization of intangibles and deferred charges 69 69
Depreciation and amortization 240 188
Premium amortization, net of discount accretion 478 768
Gain on sales of investment securities, net - (43)
Gain on sales of assets 69 19
Increase in accrued interest receivable and other assets (805) (977)
Decrease in accrued interest payable and other liabilities (109) (81)
Net Cash Provided By Operating Activities 1,827 1,747
Investing Activities
Purchases of investment securities (30,984) (35,093)
Proceeds from sales of investment securities - 9,854
Maturities of investment securities 34,968 28,426
Net decrease in loan portfolio 2,690 1,646
Purchases of premises, equipment and other assets (86) (565)
Proceeds from sales of foreclosed assets and other bank properties 305 645
Net Cash Provided By Investing Activities 6,893 4,913
Financing Activities
Net decrease in deposits (17,883) (2,630)
Retirement of debt (200) (3,743)
Issuance of Common Stock 76 -
Acquisition of Treasury Stock (1) -
Dividends paid (282) -
Net Cash Used By Financing Activities (18,290) (6,373)
(Decrease) Increase in Cash And Cash Equivalents (9,570) 287
Cash and cash equivalents at beginning of period 18,195 12,330
Cash And Cash Equivalents at End of Period $8,625 $12,617
See notes to consolidated financial statements.
</TABLE>
<PAGE>
COMMERCIAL BANCSHARES, INC. AND SUBSIDIARY
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
Unaudited ($ in thousands)
NOTE 1 - Income Taxes
Effective January 1, 1993 the Company adopted Statement of
Financial Accounting Standards (SFAS) No. 109, "Accounting For
Income Taxes". As permitted by SFAS No. 109, the Company elected
not to restate the financial statements of any prior years. The
effect of the change on pre-tax income from continuing operations
for the nine months ended September 30, 1993 was not material,
however the cumulative effect of the change increased net income by
$501.
Components of Deferred Tax Assets and Liabilities
At January 1, 1993
(in thousands)
Deferred Tax Assets
Reserve for loan losses $406
Deferred compensation 39
Foreclosed assets 320
Other 36
_____
Total deferred tax assets 801
_____
Deferred tax liabilities
Sec 481 Accounting Change (128)
Depreciation (172)
_____
Total deferred tax liabilities (300)
_____
Total (net) deferred taxes 501
Valuation Allowance None
_____
Total net deferred tax asset $501
=====
NOTE 2 - PER SHARE DATA AND MARKET VALUE OF STOCK
Income per share data are based on the weighted average number
of shares outstanding of 282,010 and 281,843 for the nine months
and three months ended September 30, 1993 and 282,343 and 282,343
for the nine months and three months ended September 30, 1992.
There is no established public trading market for the
Company's common stock. However, an annual valuation of the stock
is prepared for the Employee Stock Ownership Plan. As of December
31, 1992, the per share value of the Company's common stock was
estimated to be $39.00.
<PAGE>
NOTE 3 - NONPERFORMING LOANS
September 30 December 31
1993 1992 1992 1991
Nonaccrual loans $1,161 $1,288 $ 990 $1,547
Restructured loans - 1,274 928 991
______ ______ ______ ______
Total nonperforming loans $1,161 $2,562 $1,918 $2,538
Accruing loans past due
ninety days or more $ 98 $ 91 $ 59 $ 344
======= ======= ======= =======
When the payment of principal or interest on a loan is
delinquent for 90 days, or earlier in some cases, the loan is
placed on nonaccrual status, unless the loan is in the process of
collection and the underlying collateral fully supports the
carrying value of the loan. If the decision is made to continue
accruing interest on the loan, periodic reviews are made to confirm
the accruing status of the loan. When a loan is placed on
nonaccrual status, interest accrued during the current year prior
to the judgement of uncollectibility is charged to operations.
Interest accrued during prior periods is charged to the allowance
for loan losses. Generally, any payments received on nonaccrual
loans are applied first to outstanding loan amounts and next to the
recovery of charged-off loan amounts. Any excess is treated as
recovery of lost interest.
Interest income in the amount of $66 would have been recorded
on nonaccrual loans during the nine months ended September 30, 1993
if they had been performing in accordance with their contractual
terms. During the nine months ended September 30, 1993, the
Company recorded $5 of interest income on nonaccrual loans.
In addition to the nonperforming loans disclosed above,
management has identified loans totalling $2.3 million for which
payments are current but which, in management's opinion, are
subject to potential future classification as non-performing or
past due.
<PAGE>
<TABLE>
<CAPTION>
COMMERCIAL BANCSHARES, INC. AND SUBSIDIARY
QUARTERLY INCOME RESULTS
Unaudited ($ in thousands, except per share amounts)
1993
I II III
<S> <C> <C> <C>
Interest income $2,822 $2,725 $2,579
Net interest income 1,681 1,657 1,555
Income before cumulative effect
of accounting change 421 422 349
Net income 922 422 349
Net income per share before cumulative
effect of accounting change $1.49 $1.50 $1.24
<CAPTION>
1992
I II III IV
<S> <C> <C> <C> <C>
Interest income $3,330 $3,195 $3,004 $2,883
Net interest income 1,582 1,660 1,634 1,662
Income before extraordinary item 238 573 499 279
Net income 238 573 835 412
Net income per share before extraordinary
item $0.84 $2.03 $1.77 $0.99
<CAPTION>
1991
I II III IV
<S> <C> <C> <C> <C>
Interest income $3,651 $3,728 $3,610 $3,452
Net interest income 1,290 1,454 1,396 1,450
Income before extraordinary item 135 325 242 168
Net income 135 325 242 368
Net income per share before extraordinary
item $0.48 $1.15 $0.86 $0.60
</TABLE>
<PAGE>
COMMERCIAL CONSOLIDATED FINANCIAL INFORMATION
REPORT
COMMERCIAL BANCSHARES, INC. AND SUBSIDIARY
DECEMBER 31, 1992
<PAGE>
REPORT
COMMERCIAL BANCSHARES, INC. AND SUBSIDIARY
DECEMBER 31, 1992
TABLE OF CONTENTS
Exhibit Page
INDEPENDENT AUDITORS' REPORT 1
FINANCIAL STATEMENTS FOR THE YEARS ENDED
DECEMBER 31, 1992 AND 1991:
Consolidated Statements of Condition A 2
Consolidated Statements of Income B 3
Consolidated Statements of Changes in
Shareholders' Equity C 4
Consolidated Statements of Cash Flows D 5 - 6
Notes to Consolidated Financial Statements E 7 - 19
INDEPENDENT AUDITORS' REPORT ON ADDITIONAL 20
INFORMATION
ADDITIONAL INFORMATION FOR THE YEAR ENDED
DECEMBER 31, 1992:
Consolidating Statement of Condition F 21
Information
Consolidating Statement of Income G 22
Information
Consolidating and Eliminating Entries H 23
INDEPENDENT AUDITORS' REPORT
Board of Directors
Commercial Bancshares, Inc. and Subsidiary
Abbeville, Louisiana
We have audited the accompanying consolidated statements of condition of
Commercial Bancshares, Inc. and Subsidiary as of December 31, 1992 and 1991, and
the related consolidated statements of income, changes in shareholders' equity
and cash flows for the years then ended. These financial statements are the
responsibility of the Holding Corporation and Subsidiary's management. Our
responsibility is to express an opinion on these financial statements based on
our audits.
We conducted our audits in accordance with generally accepted auditing
standards. Those standards require that we plan and perform the audit to obtain
reasonable assurance about whether the financial statements are free of material
misstatement. An audit includes examining, on a test basis, evidence supporting
the amounts and disclosures in the financial statements. An audit also includes
assessing the accounting principles used and significant estimates made by
management, as well as evaluating the overall financial statement presentation.
We believe that our audits provide a reasonable basis for our opinion.
In our opinion, the consolidated financial statements referred to above present
fairly, in all material respects, the financial position of Commercial
Bancshares, Inc. and Subsidiary as of December 31, 1992 and 1991, and the
results of their operations and their cash flows for the years then ended in
conformity with generally accepted accounting principles.
January 29, 1993
<PAGE>
Exhibit A
COMMERCIAL BANCSHARES, INC. AND SUBSIDIARY
CONSOLIDATED STATEMENTS OF CONDITION DECEMBER 31, 1992 AND 1991
ASSETS
1992 1991
Cash and Due from Banks $ 6,835,587 $ 5,380,059
Interest Bearing Deposits 46,799 150,212
Federal Funds Sold 11,350,000 6,800,000
Total Cash and
Cash Equivalents 18,232,386 12,330,271
Investment Securities 89,428,562 84,900,784
Loans (net of allowance for
loan losses
of $1,195,030 and
$1,306,102 in 1992
and 1991, respectively) 63,123,572 67,513,972
Premises and Equipment, Net 3,235,296 3,482,689
Real Estate and Other Property
Acquired by Foreclosure,
Net 2,265,898 2,601,318
Accrued Interest Receivable 1,774,692 1,975,148
Other Assets 2,180,103 1,588,222
TOTAL ASSETS $180,240,509 $174,394,404
LIABILITIES AND SHAREHOLDERS' EQUITY
LIABILITIES:
Deposits:
Non-interest Bearing
Deposits $ 26,142,498 $ 20,397,683
Interest Bearing Deposits 136,329,821 134,679,298
Total Deposits 162,472,319 155,076,981
Accrued Interest Payable 555,358 996,041
Other Liabilities 1,513,436 1,121,228
Notes Payable 3,545,000 7,287,652
TOTAL LIABILITIES 168,086,113 164,481,902
SHAREHOLDERS' EQUITY:
Common Stock, $2 par value,
500,000 sharesauthorized,
314,723 shares issued,
282,343shares
outstanding 629,446 629,446
Capital Surplus 515,305 515,305
Unrealized Loss on
Marketable Equity
Securities -0- (186,196)
Treasury Stock,
32,380 Shares at Cost (1,152,744) (1,152,744)
Undivided Profits 12,162,389 10,104,691
TOTAL SHAREHOLDERS' EQUITY 12,154,396 9,910,502
TOTAL LIABILITIES AND $180,240,509 $174,392,404
SHAREHOLDERS' EQUITY
The accompanying Notes to Consolidated Financial Statements are an integral part
of these statements.
<PAGE>
Exhibit B
COMMERCIAL BANCSHARES, INC. AND SUBSIDIARY
FOR THE YEARS ENDED
CONSOLIDATED STATEMENTS OF INCOME DECEMBER 31, 1992 AND 1991
1992 1991
INTEREST INCOME:
Loans, Including Fees $ 6,489,210 $ 7,856,716
Investment Securities:
Taxable 5,622,683 6,063,002
Non-taxable 69,866 228,859
Federal Funds Sold 230,384 292,117
TOTAL INTEREST INCOME 12,412,143 14,440,694
INTEREST EXPENSE:
Deposits 5,496,924 8,215,523
Notes Payable 377,686 634,718
TOTAL INTEREST EXPENSE 5,874,610 8,850,241
NET INTEREST INCOME 6,537,533 5,590,453
PROVISION FOR LOAN LOSSES 150,000 10,000
NET INTEREST INCOME AFTER
PROVISION FOR LOAN
LOSSES 6,387,533 5,580,453
OTHER INCOME:
Customer Service Fees 861,278 917,499
Loss on Sale of Marketable
Equity Securities
(201,944) (213,142)
Gain on Sale of Other
Investment Securities
246,045 235,331
Loss on Sale of Other Real
Estate and
Other Property Acquired (29,589) (21,738)
Income From Real Estate
Acquired by Foreclosure
221,340 104,102
Other Income 58,647 83,173
TOTAL OTHER INCOME 1,155,777 1,105,225
OTHER EXPENSES:
Salaries and Employee
Benefits
2,565,331 2,509,687
Occupancy Expense 793,808 863,914
Amortization of Intangible
Assets
155,480 176,299
Expenses Related to Real
Estate Acquired
by Foreclosure 256,870 623,313
Other Operating Expenses 1,545,024 1,479,264
TOTAL OTHER EXPENSES 5,316,513 5,652,477
INCOME BEFORE INCOME TAX
EXPENSE AND
EXTRAORDINARY ITEMS 2,226,797 1,033,201
INCOME TAX EXPENSE 638,350 163,445
INCOME BEFORE EXTRAORDINARY
ITEMS 1,588,447 869,756
EXTRAORDINARY ITEMS:
Benefit of Utilization
of Net Operating
Loss Carryforward 185,000 200,000
Gain on Debt Extinguishment,
Net of Income
Taxes 284,251 -0-
NET INCOME $ 2,057,698 $ 1,069,756
The accompanying Notes to Consolidated Financial Statements are an
integral part of these statements.
<PAGE>
Exhibit C
COMMERCIAL BANCSHARES, INC. AND SUBSIDIARY
CONSOLIDATED STATEMENTS OF FOR THE YEARS ENDED
CHANGES IN SHAREHOLDERS' EQUITY DECEMBER 31, 1992 AND 1991
Unrealized
Loss
on
Marketable
Common Capital Equity Undivided Treasury
Stock Surplus Securities Profits Stock
BALANCE,
12-31-90
1990 $ 629,446 $ 515,305 $ (473,511) $ 9,034,935 $(1,152,744)
Change in
Unrealized
Loss on
Marketable
Equity
Securities 287,315
Net Income 1,069,756
BALANCE,
12-31-91 629,446 515,305 (186,196) 10,104,691 (1,152,744)
Change in
Unrealized
Loss on
Marketable
Equity
Securities 186,196
Net Income 2,057,698
BALANCE,
12-31-92 $ 629,446 $ 515,305 $ -0- $12,162,389 $(1,152,744)
The accompanying Notes to Consolidated Financial Statements are an integral
part of these statements.
<PAGE>
Exhibit D
COMMERCIAL BANCSHARES, INC. AND SUBSIDIARY
FOR THE YEARS ENDED
CONSOLIDATED STATEMENTS OF CASH FLOWS DECEMBER 31, 1992 AND 1991
1992 1991
CASH FLOWS FROM OPERATING
ACTIVITIES:
Net Income $ 2,057,698 $ 1,069,756
Adjustments to Reconcile
Net Income to
Net Cash Provided
by Operating Activities:
Loss on Sale of
Marketable Equity
Securities 201,944 213,142
Gain on Sale on
Investment
Securities (246,045) (235,331)
Gain on Debt
Extinguishment (430,682) -0-
Net Accretion of
Discount -0- (314,625)
Net Amortization
of Premium 637,520 -0-
Provision for
Loan Losses 150,000 10,000
Provision for
Deferred Income
Taxes (1,325) -0-
Losses on Sales
and Writedowns of
Real Estate and
Other Property
Acquired by
Foreclosure 96,134 348,970
Depreciation and
Amortization 481,935 562,837
(Increase) Decrease
in Accrued Interest
Receivable and
Other Assets (530,904) 794,714
Decrease in Accrued
Interest Payable (440,683) (357,763)
Increase (Decrease)
in Other
Liabilities 393,533 (71,994)
NET CASH PROVIDED BY
OPERATING ACTIVITIES 2,369,125 2,019,706
<PAGE>
Exhibit D
(Continued)
COMMERCIAL BANCSHARES, INC. AND SUBSIDIARY
FOR THE YEARS ENDED
CONSOLIDATED STATEMENTS OF CASH FLOWS DECEMBER 31, 1992 AND 1991
1992 1991
CASH FLOWS FROM
INVESTING ACTIVITIES:
Principal Payments
Received and Proceeds
from Sales and
Maturities of
Investment
Securities 45,924,300 16,282,584
Purchase of
Investment
Securities (50,859,301) (24,767,670)
Net Decrease in
Certificate of
Deposit -0- 1,000,000
Net Decrease in
Loans 4,088,802 3,382,864
Proceeds from Sales
of Real Estate
and Other Property
Acquired By
Foreclosure 904,700 1,656,041
Purchase of Additional
Interest in
Real Estate
Acquired (513,816) -0-
Purchase of Premises
and Equipment (95,063) (129,898)
NET CASH USED IN
INVESTING ACTIVITIES (550,378) (2,576,079)
The accompanying Notes to Consolidated Financial Statements are an integral
part of these statements.
<PAGE>
Exhibit D
Continued
COMMERCIAL BANCSHARES, INC. AND SUBSIDIARY
FOR THE YEARS ENDED
CONSOLIDATED STATEMENTS OF CASH FLOWS (Continued) DECEMBER 31, 1992 AND 1991
1992 1991
CASH FLOWS FROM
FINANCING ACTIVITIES:
Net Increase in
Deposits $ 7,395,338 $ 138,436
Repayments of Notes
Payable (3,311,970) (862,778)
NET CASH PROVIDED BY
(USED IN) FINANCING
ACTIVITIES 4,083,368 (724,342)
NET DECREASE IN CASH
AND CASH EQUIVALENTS 5,902,115 (1,280,715)
CASH AND CASH EQUIVALENTS,
BEGINNING OF YEAR 12,330,271 13,610,986
CASH AND CASH EQUIVALENTS,
END OF YEAR $ 18,232,386 $ 12,330,271
SUPPLEMENTAL DISCLOSURE
OF CASH FLOW INFORMATION:
Cash Paid During the
Year for Interest $ 6,315,292 $ 9,208,004
Cash Paid During the
Year for Income
Taxes $ 545,538 $ 175,000
Income Tax Refunds
Received During
the Year $ -0- $ 867,277
The accompanying Notes to Consolidated Financial Statements are an integral
part of these statements.
<PAGE>
Exhibit E
COMMERCIAL BANCSHARES, INC. AND SUBSIDIARY
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS DECEMBER 31, 1992
NOTE 1 - SUMMARY OF SIGNIFICANT ACCOUNTING AND REPORTING POLICIES:
The accounting and reporting policies of Commercial Bancshares, Inc. (Holding
Corporation) and Subsidiary conform to generally accepted accounting
principles and the prevailing practices within the banking industry. A
summary of significant accounting policies is as follows:
Principles of Consolidation
The consolidated financial statements include the accounts of Commercial
Bancshares, Inc. and its wholly-owned subsidiary, First Commercial Bank. All
material intercompany transactions and balances have been eliminated.
Fair Value of Financial Instruments
Statement No. 107 (SFAS No. 107), "Disclosures about Fair Value of Financial
Instruments," issued by the Financial Accounting Standards Board in December
1991, requires disclosure of fair value information about financial
instruments, whether or not recognized in the balance sheet, for which it is
practicable to estimate that value. The techniques are significantly
affected by the assumptions used, including the discount rate and estimates
of future cash flows. In that regard, the derived fair value estimates
cannot be substantiated by comparison to independent markets and, in many
cases, could not be realized in immediate settlement of the instrument.
Statement 107 excludes certain financial instruments and all nonfinancial
instruments from its disclosure requirements. Accordingly, the aggregate
fair value amounts presented do not represent the underlying value of the
Holding Corporation and Subsidiary.
The following methods and assumptions were used to estimate the fair value of
each class of financial instruments for which it is practicable to estimate
that value:
Cash and Cash Equivalents
For those short-term instruments, the carrying amount is a reasonable
estimate of fair value.
Investment Securities
Fair value equals quoted market price, if available. If a quoted market
price is not available, fair value is estimated using quoted market prices
for similar securities.
Loans
The fair value is estimated by discounting the future cash flows using the
current rates at which similar loans would be made to borrowers with
similar credit ratings and for the same remaining maturities.
<PAGE>
Exhibit E
Continued
COMMERCIAL BANCSHARES, INC. AND SUBSIDIARY
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS DECEMBER 31, 1992
NOTE 1 - SUMMARY OF SIGNIFICANT ACCOUNTING AND REPORTING POLICIES
(Continued):
Deposits
The fair value of demand deposits, NOW accounts, savings accounts, and
money market deposits is the amount payable on demand at the reporting
date. The fair value of fixed-maturity certificates of deposit is
estimated using the rates currently offered for deposits of similar
remaining maturities.
Notes Payable
Rates currently available to the Holding Corporation and Subsidiary for
debt with similar terms and remaining maturities are used to estimate fair
value of existing debt.
Commitments to Extend Credit and Standby Letters of Credit
The fair value of commitments is estimated using the fees currently charged
to enter into similar agreements, taking into account the remaining terms of
the agreements and the present creditworthiness of the counterparties. For
fixed-rate loan commitments, fair value also considers the difference between
current levels of interest rates and the committed rates. The fair value of
letters of credit is based on fees currently charged for similar agreements
or on the estimated cost to terminate them or otherwise settle the
obligations with the counterparties at the reporting date.
Investment Securities
Investment securities, other than marketable equity securities, are carried
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 recorded in other income on the trade date based on the net
proceeds and the adjusted carrying amount of the securities sold using the
specific identification method. It is the Holding Corporation and
Subsidiary's intent, and it has the ability to hold these securities to
maturity.
Marketable equity securities are stated at the lower of aggregate
cost or market and are adjusted by a charge to a valuation account
within shareholders' equity called "Unrealized Loss on Marketable
Equity Securities." Realized gains or losses on the sale of
marketable equity securities are shown separately in other income.
Loans
Loans are stated at the principal amount outstanding, net of
unearned discount and allowance for loan losses. Unearned discount
relates principally to consumer installment loans. The related
interest income is recognized principally by the simple interest
method which records interest based on the principle amount
outstanding. Loan fees which represent an adjustment to the
interest yield are deferred and amortized over the estimated life
of the loan.
When the payment of principal or interest on a loan is delinquent
for 90 days, or earlier in some cases, the loan is placed on non-
accrual status, unless the loan is in the process of collection and
the underlying collateral fully supports the carrying value of the
loan. If the decision is made to continue accruing interest on the
loan, periodic reviews are made to confirm the accruing status of
the loan. When a loan is placed on non-accrual status, interest
accrued during the current year prior to the judgement of
uncollectibility is charged to operations. Interest accrued during
prior periods is charged to the allowance for loan losses.
Generally, any payments received on non-accrual loans are applied
first to outstanding loan amounts and next to the recovery of
charged-off loan amounts. Any excess is treated as recovery of
lost interest.
Allowance For Loan Losses
The allowance for loan losses is a valuation allowance available
for losses incurred on loans. All losses are charged to the
allowance for loan losses when the loss actually occurs or when a
determination is made that a loss is likely to occur. Recoveries
are credited to the allowance at the time of recovery.
Management's judgment as to the level of future losses on existing
loans involves the consideration of current and anticipated
economic conditions and their potential effects on specific
borrowers; an evaluation of the existing relationships among loans,
potential loan losses, and the present level of the allowance;
results of examinations of the loan portfolio by regulatory
agencies; and management's internal review of the loan portfolio.
It should be understood that estimates of future loan losses
involve an exercise of judgment. While it is possible that in
particular periods the Bank may sustain losses which are
substantial relative to the allowance for loan losses, it is the
judgment of management that the allowance for loan losses reflected
in the consolidated statements of condition is adequate to absorb
possible losses in the existing loan portfolio.
Premises and Equipment
Premises and equipment are stated at cost less accumulated
depreciation and amortization. Depreciation expense is computed
primarily using the straight-line method over the estimated useful
lives of the assets which range from 3 to 40 years. Leasehold
improvements are amortized on a straight-line basis over the
periods of the leases or the estimated useful lives, whichever is
shorter.
Real Estate Acquired by Foreclosure
Real estate acquired by foreclosure is recorded at the balance of
the loan or at estimated fair value, whichever is less, at the date
acquired, plus capital improvements made thereafter to facilitate
sale. Adjustments are made to reflect declines, if any, in net
realizable values below the recorded amounts. Costs of holding
real estate acquired in settlement of loans are reflected in income
currently. Gains on sales of such real estate are taken into
income based on the buyer's initial and continuing investment in
the property.
Intangible Assets
Unamortized costs of the purchased subsidiary in excess of the fair
market value of the acquired net tangible assets are included in
Other Assets in the consolidated statements of condition.
Identifiable intangible assets, principally related to depositor
and borrower relationships, are being amortized using an
accelerated method over the estimated periods benefitted (6 to 12
years). The unamortized balance at December 31, 1992 and 1991 was
$239,845 and $320,912, respectively. Amortization expense on
identifiable intangible assets was $81,067 and $106,662 for 1992
and 1991, respectively. The remaining costs (goodwill) are being
amortized on the straight-line basis over 12 years. The
unamortized balance at December 31, 1992 and 1991 was $199,346 and
$238,562, respectively. Amortization expense was $39,216 for 1992
and 1991.
Income Taxes
Deferred income taxes are provided for timing differences between
items of income or expense reported in the consolidated financial
statements and those reported for income tax purposes. These
differences relate primarily to the provision for loan losses,
writedowns of Other Real Estate Owned, deferred compensation,
depreciation on premises and equipment and capital loss carryovers.
In December 1987, the Financial Accounting Standards Board issued
Statement No. 96 (SFAS No. 96), "Accounting for Income Taxes". In
early 1992, the Financial Accounting Standards Board issued
Statement No. 109 (SFAS No. 109) which supersedes SFAS No. 96 for
the accounting for income taxes. Implementation is for all fiscal
years beginning after December 15, 1992. SFAS No. 109 requires
companies to change from the deferred income method to the modified
liability method. Under the modified liability method, deferred
tax balances are calculated at balance sheet dates and represent
amounts of income taxes refundable or payable in future years
resulting from temporary differences and operating loss and tax
credit carryforwards. The change in deferred tax balances is
recorded as an element of income tax expense in the financial
statements. Under current interpretations of SFAS No. 109, the
company's preliminary evaluation indicates that upon adoption in
1993, a favorable effect of approximately $500,000 will be realized
for financial reporting purposes.
The tax sharing agreement between the Holding Corporation and the
Bank states that the Bank is responsible only to the extent of that
portion of the consolidated tax liability less applicable credits
calculated as if it were filing a separate return.
Consolidated Statements of Cash Flows
For purposes of reporting cash flows, cash and cash equivalents
include cash on hand, amounts due from banks and federal funds
sold. Generally, federal funds are purchased and sold for one day
periods.
Reclassifications
Certain reclassifications have been made to the 1991 consolidated
financial statements in order to conform to the classifications
adopted for reporting in 1992.
NOTE 2 - CASH AND DUE FROM BANKS:
The Bank is required to maintain average reserve balances with the
Federal Reserve Bank. "Cash and Due from Banks" in the
consolidated statements of condition included amounts so restricted
of $500,000 at December 31, 1992 and 1991.
NOTE 3 - INVESTMENT SECURITIES:
The carrying value and related market value of investment
securities are presented below:
December 31, 1992
Carrying Unrealized Unrealized Market
Value Gains Losses Value
U.S. Treasuries $21,715,571 $ 234,471 $ (42,136) $21,907,906
U.S. Agencies 64,648,853 887,673 (253,523) 65,283,003
State and Political
Subdivisions 1,450,624 42,449 -0- 1,493,073
Other Securities 1,613,514 30,795 -0- 1,644,309
Totals $89,428,562 $ 1,195,388 $ (295,659) $90,328,291
December 31, 1991
Carrying Unrealized Unrealized Market
Value Gains Losses Value
U.S. Treasuries $18,883,364 $ 317,146 $ -0- $19,200,510
U.S. Agencies 62,492,958 1,752,274 (62,009) 64,183,223
State and Political
Subdivisions 994,485 64,738 (604) 1,058,619
Marketable Equity
Securities 1,527,007 -0- -0- 1,527,007
Other Securities 1,002,970 17,655 -0- 1,020,625
Totals $84,900,784 $ 2,151,813 $ (62,613) $86,989,984
The carrying value and related market value of investment 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.
Carrying Market
Value Value
Due in One Year or Less $38,478,930 $38,834,059
Due After One Year through
Five Years 49,467,264 49,962,952
Due After Five Years through
Ten Years 1,026,210 1,059,079
Due After Ten Years 456,158 472,201
Totals $89,428,562 $90,328,291
At December 31, 1991, marketable equity securities consisted of investments in
the following mutual funds: Transamerica U.S. Government Income Trust,
Transamerica Government Securities Trust, and Colonial Government Securities.
Proceeds from sales of investments in debt securities during 1992 were
$8,359,703. Gross gains of $246,045 and gross losses of $-0- were realized on
those sales.
Proceeds from sales of investments in debt securities during 1991 were
$15,339,746. Gross gains of $236,266 and gross losses of $935 were realized on
those sales.
Investment securities with a carrying amount of approximately $30,320,343 and
$32,841,969 and an estimated market value of $30,885,909 and $34,469,037 at
December 31, 1992 and 1991, respectively, were pledged to secure public deposits
and for other purposes required or permitted by law.
<PAGE>
NOTE 4 - LOANS:
The loan portfolio consists of various types of loans classified by major type
as follows:
1992 1991
Real Estate $38,143,741 $38,726,389
Commercial and
Industrial 17,806,935 19,395,194
Consumer 7,698,373 9,638,286
Agriculture 640,488 887,314
Other 29,065 172,891
64,318,602 68,820,074
Less Allowance
for Loan Losses 1,195,030 1,306,102
Totals $63,123,572 $67,513,972
Loans had an estimated fair value of $64,228,923 at December 31, 1992.
As of December 31, 1992 and 1991, loans outstanding to directors, officers, and
their affiliates were approximately $4,634,484 and $4,578,799, respectively.
In the opinion of management, all transactions entered into between the Bank and
such related parties have been and are, in the ordinary course of business, made
on the same terms and conditions as similar transactions with unaffiliated
persons. During 1992, $5,083,957 of new and renewal loans were made and
repayments of $5,028,272 were received. Letters of Credit and unadvanced lines
of credit to directors, officers, and their affiliates totaled $1,304,616 and
$772,099 at December 31, 1992 and 1991.
At December 31, 1992, fixed rate loans totaled $45,605,390 and variable rate
loans totaled $18,713,212.
At December 31, 1992 and 1991 loans on which the accrual of interest had been
discontinued or reduced amounted to $848,073 and $1,547,356, respectively.
Interest income foregone on these non-accrual loans was $82,131 and $43,757 for
the years ended December 31, 1992 and 1991, respectively.
The Bank had five trouble debt restructurings during the year involving
commercial loans. The aggregate recorded investment at December 31, 1992 was
$352,320. The amount of interest income included in net income from these loans
was $21,727. If the loans would have been continued under the original terms
gross interest income would have been $30,695.
<PAGE>
An analysis of activity in the allowance for loan losses is as follows:
1992 1991
Balance at Beginning
of Year $ 1,306,102 $ 2,064,339
Provision Charged
to Operations 150,000 10,000
Loans Charged Off (406,368) (965,938)
Loan Recoveries 145,296 197,701
Balance at End
of Year $ 1,195,030 $ 1,306,102
NOTE 5 - PREMISES AND EQUIPMENT:
Premises and equipment are summarized below:
1992 1991
Land $ 455,970 $ 455,970
Buildings 3,511,047 3,508,297
Leasehold Improvements 296,251 290,788
Furniture, Fixtures,
and Equipment 3,038,734 2,973,768
7,302,002 7,228,823
Less Accumulated
Depreciation and
Amortization (4,066,706) (3,746,134)
Premises and Equipment,
Net $ 3,235,296 $ 3,482,689
Depreciation expense included in the Consolidated Statements of Operations was
$342,456 and $402,538 for the years ended December 31, 1992 and 1991.
NOTE 6 - DEPOSITS:
Deposits are summarized below:
1992 1991
Demand $ 26,142,498 $ 20,397,683
NOW Accounts 28,641,197 24,062,385
Savings 14,774,682 11,668,123
Money Market Accounts 28,707,285 24,593,358
Time Certificates
of Deposits 64,206,657 74,355,432
Totals $162,472,319 $155,076,981
Deposits had an estimated fair value of $ 162,735,630 at December 31, 1992.
Included in the interest bearing deposits are certificates of deposit in amounts
of $100,000 or more totaling $13,960,372 and $17,591,861 at December 31, 1992
and 1991, respectively.
NOTE 7 - CONCENTRATION OF DEPOSITS:
The Bank has deposits with four customers in the amount of $10,982,755 at
December 31, 1992. This amount represents 6.76% of total customer deposits.
The deposits consist of public, corporate and personal funds.
NOTE 8 - NOTES PAYABLE:
Notes payable consist of the following notes secured by 100% of the stock of the
subsidiary bank. The current note is subject to the terms of a loan agreement
which specifies minimum net worth and capital requirements, common stock
dividend restrictions, loan loss reserve requirements, limitations on non-
performing assets and other customary covenants.
1992 1991
Note payable to a bank,
bearing interest payable
quarterly at a rate 1/4
of 1% in excess of the
prime rate of the lending
bank, 7.75% as of
December 31, 1991 $ -0- $6,835,000
Note payable to a bank,
bearing interest payable
quarterly at a rate 1/2
of 1% in excess of the
prime rate of the lending
bank, 8.00% as of
December 31, 1991 -0- 452,652
<PAGE>
1992 1991
Note payable to a bank,
bearing interest payable
quarterly at the rate of
1% in excess of the prime
rate of the lending bank,
7.00% at December 31, 1992. 3,545,000 -0-
Totals $ 3,545,000 $7,287,652
Notes payable had a estimated fair value of $3,545,000 at December 31, 1992.
Maturities of notes payables for each of the five years succeeding December 31,
1992, are as follows:
Year Amount
December 31, 1993 $ 200,000
December 31, 1994 390,000
December 31, 1995 655,000
December 31, 1996 705,000
December 31, 1997 780,000
After December 31, 1997 815,000
Total $ 3,545,000
A portion of the notes payable at December 31, 1991 were discounted by the
lending bank and the balance paid in full in September 1992. The extraordinary
item reported at December 31, 1992, is the $430,682 discount allowed by the
lending bank, net of $146,431 in related income taxes.
NOTE 9 - INCOME TAXES:
The components of the provision for federal income taxes are as follows:
1992 1991
Current Income
Tax Provision $601,106 $121,000
Income Taxes Related
to Gain on Debt
Extinguishment (146,431) -0-
Benefit of Prior
Net Operating Losses 185,000 200,000
Refund Related to 1991
in Excess of Benefit
Recorded in Prior Year -0- (98,000)
Provision for Deferred
Taxes (1,325) (59,555)
Total $ 638,350 $ 163,445
The provision for federal income taxes differs from the amount computed by
applying the federal income tax statutory rate on operations as follows:
1992 1991
Amount % Amount %
Taxes Calculated
at Statutory Rate $757,000 34.0 $351,000 34.0
Decrease resulting
from Tax-Exempt
Interest Component (38,000) (1.7) (116,000) (11.2)
Amortization of Costs
Incurred and Excess
Purchase Price of
Acquired Company 55,000 2.5 77,000 7.5
Utilization of Available
Tax Credits (164,000) (7.4)
Refund Related to 1991
in Excess of
Benefit Recorded -0- -0- (98,000) (9.5)
Deferred Tax from
Prior Year -0- -0- (59,555) (5.8)
Other, Net 28,350 1.3 9,000 .8
Totals $638,350 28.7 $163,445 15.8
NOTE 9 - INCOME TAXES (Continued):
Deferred taxes, according to the timing differences which caused them, are as
follows:
1992 1991
Depreciation $ (19,000) $ (16,000)
Provision for
Loan Losses (5,000) 215,000
Deferred Compensation 14,000 (13,000)
Capital Loss not
Utilized Due to
Limitation (46,000) (85,000)
Other Real
Estate Owned 63,000 2,000
Limitation on
Recording of
Deferred Tax Debits -0- (102,000)
Other (8,325) (1,000)
Totals $ (1,325 $ -0-
NOTE 10 - FINANCIAL INSTRUMENTS WITH OFF-BALANCE SHEET RISK:
The Bank is a party to various financial instruments with off-balance sheet risk
in the normal course of business to meet the financing needs of its customers.
These financial instruments include commitments to extend credit and standby
letters of credit and involve, to varying degrees, elements of credit risk in
excess of the amounts recognized in the consolidated statements of condition.
The Bank's exposure to credit loss in the event of nonperformance by the other
party to the financial instrument for commitments to extend credit and standby
letters of credit is represented by the contractual amount of those
instruments. The Bank uses the same credit policies in making commitments and
conditional obligations as it does for on-balance-sheet instruments. The
Bank does not anticipate any material loss as a result of these transactions.
1992 1991
Commitments to
Extend Credit $ 7,017,503 $ 7,534,537
Standby Letters
of Credit $ 638,550 $ 541,510
The fair values of commitments to extend credit and standby letters of credit
were $7,017,503 and $638,550 at December 31, 1992.
Commitments to extend credit are agreements to lend to a customer as long as
there is no violation of any condition established in the contract. Commitments
generally have fixed expiration dates or other termination clauses and may
require payment of a fee. Since many of the commitments are expected to expire
without being drawn upon, the total commitment amounts disclosed above do not
necessarily represent future cash requirements. The Bank evaluates each
customer's creditworthiness on a case-by-case basis. The amount of collateral
obtained, if considered necessary by the Bank upon extension of credit, is based
on management's credit evaluation of the counterparty.
NOTE 10 - FINANCIAL INSTRUMENTS WITH OFF-BALANCE SHEET RISK (Continued):
Standby letters of credit are conditional commitments issued by the Bank to
guarantee the performance of a customer to a third party. The credit risk
involved in issuing letters of credit is essentially the same as that involved
in extending loan facilities to customers.
NOTE 11 - COMMITMENTS AND CONTINGENT LIABILITIES:
The Holding Corporation and Subsidiary are also subject to claims and lawsuits
which arise primarily in the ordinary course of business. Based on information
presently available and advice received from legal counsel representing the
Holding Corporation and Subsidiary in connection with such claims and lawsuits,
it is the opinion of management that the disposition or ultimate determination
of such claims and lawsuits will not have a material adverse effect on the
consolidated financial position of the Holding Corporation and Subsidiary.
The Bank is a party to three operating lease agreements for the rental of branch
bank and drive-in facilities. Monthly payments total $3,346 through lease
periods that begin to expire in 1993.
Required payments for each of the next five years are as follows:
Amount
1993 $ 38,502
1994 19,552
1995 9,552
1996 1,592
1997 -0-
Total $ 69,198
Lease payments included in Occupancy Expense totaled $40,152 and $39,880 for the
years ending December 31, 1992 and 1991, respectively.
NOTE 12 - DIVIDEND RESTRICTIONS:
The Bank is restricted under applicable laws in the payment of dividends to an
amount equal to current year earnings plus undistributed earnings for the
immediately preceding year, unless prior permission is received from the
Commissioner of Financial Institutions. Payment of dividends by the Holding
Corporation are subject to restrictive covenants of the debt agreement.
NOTE 13 - EMPLOYEE BENEFIT PLANS:
The Bank has an Employee Stock Ownership Plan (ESOP) covering employees who meet
certain eligibility requirements. The cost of the Plan is borne by the Bank
through contributions determined by the Board of Directors. Contributions to
the ESOP were $30,000 for the year ended December 31, 1992.
The Bank also has a salary deferral plan covering substantially all employees
who meet eligibility requirements. The plan provides for payments upon
retirement, death or disability. The Bank makes a matching contribution for a
portion of the employee salary deferrals. The Bank's contributions to the plan
were $37,976 and $35,128 for the years ended December 31, 1992 and 1991,
respectively.
NOTE 14 - STOCK OPTION PLAN:
During 1992, the Board of Directors of the Holding Corporation and the President
of the Bank signed a stock option agreement. Under the agreement, the Holding
Corporation has offered an option to the President to purchase 4,000 shares of
common stock at the market price of the stock on the agreement date of September
1, 1992 ($25 per share). The option was not exercised in 1992 and expires
September 1, 1993.
NOTE 15 - RELATED PARTY TRANSACTIONS:
The majority of the insurance coverages for the Bank were written through an
insurance agency owned by a member of the Board of Directors. The policies
provide coverage for bank facilities and equipment, blanket bond and liability
coverage, and other miscellaneous insurance needs. Payments to the agency
totalled $184,196 during the year ended December 31, 1992.
<PAGE>
INDEPENDENT AUDITORS' REPORT ON ADDITIONAL INFORMATION
Board of Directors
Commercial Bancshares, Inc. and Subsidiary
Abbeville, LA
Our report on our audit of the basic consolidated financial statements of
Commercial Bancshares, Inc. and Subsidiary for 1992 appears on page 1. That
audit was made for the purpose of forming an opinion on the basic consolidated
financial statements taken as a whole. The consolidating information on pages
19 through 21 is presented for the purpose of additional analysis and is not a
required part of the basic financial statements. This consolidating
information is the responsibility of the Company's management. Such information
has been subjected to the auditing procedures applied in our audit of the basic
consolidated financial statements and, in our opinion, is fairly stated in all
material respects when considered in relation to the basic consolidated
financial statements taken as a whole.
January 29, 1993
<PAGE>
Exhibit F
COMMERCIAL BANCSHARES, INC. AND SUBSIDIARY
CONSOLIDATING STATEMENT OF CONDITION INFORMATION DECEMBER 31, 1992
First
Commercial Commercial
ASSETS Bancshares Bank
Cash and Due from Banks $ 315,869 $ 6,835,587
Interest Bearing Deposits 46,799
Federal Funds Sold 11,350,000
Total Cash and Cash Equivalents 315,869 18,232,386
Investments Securities 89,428,562
Loans, Net 63,100,382
Premises and Equipment, Net 2,905,131
Real Estate Acquired by
Forclosure, Net 2,265,898
Accrued Interest Receivable 1,774,692
Other Assets 15,897,873 1,589,654
TOTAL ASSETS $15,897,873 $179,296,705
LIABILITIES AND SHAREHOLDERS' EQUITY
LIABILITIES:
Deposits: $ -0- $ 26,458,367
Non-interest Bearing 136,329,821
Interest Bearing
Total Deposits -0- 162,788,188
Accrued Interest Payable 67,550 487,808
Other Liabilities 130,927 1,617,177
Notes Payable 3,545,000
Total Liabilities 3,743,477 164,893,173
SHAREHOLDERS' EQUITY
Common Stock 629,446 600,000
Capital Surplus 515,305 5,400,000
Treasury Shares, At Cost (1,152,744)
Undivided Profits 12,162,389 8,403,532
Total Shareholders' Equity 12,154,396 14,403,532
TOTAL LIABILITIES AND SHAREHOLDER'S EQUITY $15,897,873 $179,296,705
<PAGE>
Exhibit F
(Continued)
COMMERCIAL BANCSHARES, INC. AND SUBSIDIARY
CONSOLIDATING STATEMENT OF CONDITION INFORMATION DECEMBER 31, 1992
Consolidating Commercial
and Bancshares,
Eliminating Inc. and
ASSETS Entries Subsidiary
Cash and Due from Banks $ (315,869) $ 6,835,587
Interest Bearing Deposits 46,799
Federal Funds Sold 11,350,000
Total Cash and Cash Equivalents (315,869) 18,232,386
Investments Securities 89,428,562
Loans, Net 23,190 63,123,572
Premises and Equipment, Net 330,165 3,235,296
Real Estate Acquired by
Forclosure, Net 2,265,898
Accrued Interest Receivable 1,774,692
Other Assets (14,991,555) 2,180,103
TOTAL ASSETS $(14,954,069) $ 180,240,509
LIABILITIES AND SHAREHOLDERS' EQUITY
LIABILITIES:
Deposits:
Non-interest Bearing $ (315,869) $ 26,142,498
Interest Bearing 136,329,821
Total Deposits (315,869) 162,472,319
Accrued Interest Payable 555,358
Other Liabilities (234,668) 1,513,436
Notes Payable 3,545,000
Total Liabilities (550,537) 168,086,113
SHAREHOLDERS' EQUITY
Common Stock (600,000) 629,446
Capital Surplus (5,400,000) 515,305
Treasury Shares, At Cost (1,152,744)
Undivided Profits (8,403,532) 12,162,389
Total Shareholders' Equity (14,403,532) 12,154,396
TOTAL LIABILITIES AND SHAREHOLDER'S EQUITY $(14,954,069) $180,240,509
<PAGE>
Exhibit G
COMMERCIAL BANCSHARES, INC. AND SUBSIDIARY
CONSOLIDATING STATEMENT OF INCOME INFORMATION
FOR THE YEAR ENDED DECEMBER 31, 1992
First
Commercial Commercial
Bancshares Bank
INTEREST INCOME:
Loans, Including Feests $ -0- $ 6,489,210
Investment Securities:
Taxable 15,241 5,607,442
Non-Taxable 69,866
Federal Funds Sold 230,384
15,241 12,396,902
INTEREST EXPENSE:
Deposits 5,496,924
Notes Payable 377,686
377,686 5,496,924
NET INTEREST INCOME (LOSS) (362,445) 6,899,978
PROVISION FOR LOAN LOSSES 150,000
NET INTEREST INCOME (LOSS) AFTER PROVISION
FOR LOAN LOSSES (362,445) 6,749,978
OTHER INCOME:
Customer Service Fees 861,278
Loss on Sale of Marketable Equity
Securities (201,944)
Gain on Sale of Other Investment
Securities 874 245,171
Loss on Sale of Other Real Estate
and Other Property Acquired (29,589)
Income From Real Estate Acquired
by Foreclosure 221,340
Other Income 1,950,451 38,098
1,951,325 1,134,354
OTHER EXPENSES:
Salaries and Employee Benefits 2,565,331
Occupancy Expense 793,808
Amortization of Intangible Assets 155,480
Expenses Related to Real Estate
Acquired by Foreclosure
and Repossessed Property 256,870
Other Operating Expenses 95,667 1,449,357
251,147 5,065,366
<PAGE>
Exhibit G
(Continued)
COMMERCIAL BANCSHARES, INC. AND SUBSIDIARY
CONSOLIDATING STATEMENT OF INCOME INFORMATION
FOR THE YEAR ENDED DECEMBER 31, 1992
First
Commercial Commercial
Bancshares Bank
INCOME BEFORE INCOME TAX EXPENSE
(BENEFIT) AND EXTRAORDINARY
ITEMS 1,337,733 2,818,966
INCOME TAX EXPENSE (BENEFIT) (250,715) 889,065
INCOME BEFORE EXTRAORDINARY ITEMS 1,588,448 1,929,901
EXTRAORDINARY ITEMS 469,251
NET INCOME $ 2,057,699 $ 1,929,901
<PAGE>
Exhibit G
(Continued)
COMMERCIAL BANCSHARES, INC. AND SUBSIDIARY
CONSOLIDATING STATEMENT OF INCOME INFORMATION
FOR THE YEAR ENDED DECEMBER 31, 1992
Consolidating Commercial
and Bancshares,
Eliminating Inc. and
Entries Subsidiary
INTEREST INCOME:
Loans, Including Fees $ -0- $ 6,489,210
Investment Securities:
Taxable 5,622,683
Non-Taxable 69,866
Federal Funds Sold 230,384
12,412,143
INTEREST EXPENSE:
Deposits 5,496,924
Notes Payable 377,686
5,874,610
NET INTEREST INCOME (LOSS) 6,537,533
PROVISION FOR LOAN LOSSES 150,000
NET INTEREST INCOME (LOSS) AFTER PROVISION
FOR LOAN LOSSES 6,387,533
OTHER INCOME:
Customer Service Fees 861,278
Loss on Sale of Marketable Equity
Securities (201,944)
Gain on Sale of Other Investment
Securities 246,045
Loss on Sale of Other Real Estate
and Other Property Acquired (29,589)
Income From Real Estate Acquired
by Foreclosure 221,340
Other Income (1,929,902) 58,647
(1,929,902) 1,155,777
<PAGE>
Exhibit G
(Continued)
COMMERCIAL BANCSHARES, INC. AND SUBSIDIARY
CONSOLIDATING STATEMENT OF INCOME INFORMATION
FOR THE YEAR ENDED DECEMBER 31, 1992
Consolidating Commercial
and Bancshares,
Eliminating Inc. and
Entries Subsidiary
OTHER EXPENSES:
Salaries and Employee Benefits 2,565,331
Occupancy Expense 793,808
Amortization of Intangible Assets 155,480
Expenses Related to Real Estate
Acquired by Foreclosure
and Repossessed Property 256,870
Other Operating Expenses 1,545,024
5,316,513
INCOME BEFORE INCOME TAX EXPENSE
(BENEFIT) AND EXTRAORDINARY
ITEMS (1,929,902) 2,226,797
INCOME TAX EXPENSE (BENEFIT) 638,350
INCOME BEFORE EXTRAORDINARY ITEMS (1,929,902) 1,588,447
EXTRAORDINARY ITEMS 469,251
NET INCOME $(1,929,902) $ 2,057,698
<PAGE>
Exhibit H
COMMERCIAL BANCSHARES, INC. AND SUBSIDIARY
CONSOLIDATING AND ELIMINATING ENTRIES
(1)
Premises and Equipment, Net $ 330,165
Loans 23,190
Other Liabilities 234,668
Other Assets $588,023
To reclassify intangibles
resulting from excess
price paid over book
value from other assets
to appropriate accounts.
(2)
Noninterest-bearing Deposits 315,870
Cash and Due from Banks 315,870
To eliminate parent company's
demand deposit accounts at
the subsidiary bank.
(3)
Common Stock 600,000
Capital Surplus 5,400,000
Undivided Profits 6,473,630
Other Income 1,929,902
Other Assets 14,403,532
To eliminate equity in
subsidiary and investment
in consolidated subsidiary
on parent company's books.
<PAGE>
REPORT
COMMERCIAL BANCSHARES, INC. AND SUBSIDIARY
DECEMBER 31, 1991 AND 1990
<PAGE>
REPORT
COMMERCIAL BANCSHARES, INC. AND SUBSIDIARY
DECEMBER 31, 1991 AND 1990
TABLE OF CONTENTS
Exhibit Page
INDEPENDENT AUDITORS' REPORT 1
FINANCIAL STATEMENTS FOR THE YEARS ENDED
DECEMBER 31, 1991 AND 1990:
Consolidated Statements of Condition A 2
Consolidated Statements of Operations B 3
Consolidated Statements of Changes in
Shareholders' Equity C 4
Consolidated Statements of Cash Flows D 5 - 6
Notes to Consolidated Financial Statements E 7 - 16
INDEPENDENT AUDITORS' REPORT ON
ADDITIONAL INFORMATION 17
ADDITIONAL INFORMATION FOR THE YEAR ENDED
DECEMBER 31, 1991:
Consolidating Statement of Condition
Information F 18
Consolidating Statement of Operations
Information G 19
Consolidating and Eliminating Entries H 20
<PAGE>
INDEPENDENT AUDITORS' REPORT
Board of Directors
Commercial Bancshares, Inc. and Subsidiary
Abbeville, Louisiana
We have audited the accompanying consolidated statement of condition of
Commercial Bancshares, Inc. and Subsidiary as of December 31, 1991, and the
related consolidated statement of operations, changes in shareholders' equity
and cash flows for the year then ended. These financial statements are the
responsibility of the Holding Corporation and Subsidiary's management. Our
responsibility is to express an opinion on these financial statements based on
our audit. The financial statements of Commercial Bancshares, Inc. and
Subsidiary as of December 31, 1990, were audited by other auditors whose report
dated January 31, 1991, on those statements included an explanatory paragraph
that described the uncertainty detailed in the final paragraph below.
We conducted our audit in accordance with generally accepted auditing
standards. Those standards require that we plan and perform the audit to
obtain reasonable assurance about whether the financial statements are free of
material misstatement. An audit includes examining, on a test basis,
evidence supporting the amounts and disclosures in the financial statements.
An audit also includes assessing the accounting principles used and
significant estimates made by management, as well as evaluating the overall
financial statement presentation. We believe that our audits provide a
reasonable basis for our opinion.
In our opinion, the consolidated financial statements referred to above present
fairly, in all material respects, the financial position of Commercial
Bancshares, Inc. and Subsidiary as of December 31, 1991, and the results of
their operations and their cash flows for the year then ended in conformity with
generally accepted accounting principles.
At December 31, 1990, the Holding Corporation's notes payable to a Bank had
matured. The loan agreements relating to these notes anticipates an annual
renewal of the notes for the next five years. However, as a result of the
Holding Corporation's failure to meet certain technical covenants in the loan
agreement, the lender originally expressed its intention not to renew the notes
and demanded payment in full. The Holding Corporation has been negotiating with
the lender since 1990 to restructure the debt. The notes are secured by 100% of
the stock of the subsidiary bank. Payments continue to be made according to the
agreement and management believes that the negotiations will be successful. The
consolidated financial statements do not contain any adjustments which might be
required should the negotiations not succeed.
January 31, 1992
<PAGE>
Exhibit A
COMMERCIAL BANCSHARES, INC. AND SUBSIDIARY
CONSOLIDATED STATEMENTS OF CONDITION DECEMBER 31, 1991 AND 1990
ASSETS
1991 1990
Cash and Due from Banks (Note 2) $ 5,380,059 $ 6,361,847
Interest Bearing Deposits 150,212 1,324,139
Total Cash and Cash Equivalents 5,530,271 7,685,986
Certificate of Deposit -0- 1,000,000
Federal Funds Sold 6,800,000 5,925,000
Investment Securities (Note 3) 84,900,784 75,791,569
Loans (net of allowance for loan
losses of $1,306,102 and
$2,065,000 in 1991 and 1990,
respectively) (Note 4) 67,513,972 71,474,031
Premises and Equipment, Net (Note 5) 3,482,689 3,755,329
Real Estate and Other Property
Acquired by Foreclosure, Net 2,601,318 4,039,134
Accrued Interest Receivable 1,975,148 1,869,794
Other Assets 1,588,222 2,648,589
TOTAL ASSETS $174,392,404 $174,189,432
LIABILITIES AND SHAREHOLDERS' EQUITY
LIABILITIES:
Deposits:
Non-interest Bearing Deposits $ 20,397,683 $ 21,510,149
Interest Bearing Deposits 134,679,298 133,428,396
Total Deposits (Note 6 and 7) 155,076,981 154,938,545
Accrued Interest Payable 996,041 1,353,804
Other Liabilities 1,121,228 1,193,222
Notes Payable (Note 8) 7,287,652 8,150,430
TOTAL LIABILITIES 164,481,902 165,636,001
COMMITMENTS AND CONTINGENCIES (Notes 11 and 12) -0- -0-
SHAREHOLDERS' EQUITY:
Common Stock, $2 par value,
500,000 shares authorized,
314,723 shares issued,
282,343 shares outstanding 629,446 629,446
Capital Surplus 515,305 515,305
Unrealized Loss on Marketable
Equity Securities (186,196) (473,511)
Treasury Stock, at Cost (32,380 shares
in 1991 and 1990) (1,152,744) (1,152,744)
Undivided Profits 10,104,691 9,034,935
<PAGE>
Exhibit A
(Continued)
COMMERCIAL BANCSHARES, INC. AND SUBSIDIARY
CONSOLIDATED STATEMENTS OF CONDITION DECEMBER 31, 1991 AND 1990
ASSETS
1991 1990
TOTAL SHAREHOLDERS' EQUITY 9,910,502 8,553,431
TOTAL LIABILITIES AND
SHAREHOLDERS' EQUITY $174,392,404 $174,189,432
The accompanying Notes to Consolidated Financial Statements are an integral part
of these statements.
<PAGE>
Exhibit B
COMMERCIAL BANCSHARES, INC. AND SUBSIDIARY
FOR THE YEARS ENDED
CONSOLIDATED STATEMENTS OF OPERATIONS DECEMBER 31, 1991 AND 1990
1991 1990
INTEREST INCOME:
Loans, Including Fees $ 7,856,716 $ 8,238,210
Investment Securities:
Taxable 6,063,002 5,694,562
Non-taxable 228,859 401,536
Federal Funds Sold 292,117 514,385
TOTAL INTEREST INCOME 14,440,694 14,848,693
INTEREST EXPENSE:
Deposits 8,215,523 9,089,076
Notes Payable 634,718 842,621
TOTAL INTEREST EXPENSE 8,850,241 9,931,697
NET INTEREST INCOME 5,590,453 4,916,996
PROVISION FOR LOAN LOSSES 10,000 1,310,491
NET INTEREST INCOME AFTER
PROVISION FOR LOAN LOSSES 5,580,453 3,606,505
OTHER INCOME:
Customer Service Fees 917,499 814,251
Loss on Sale of Marketable
Equity Securities (213,142) (57,488)
Gain on Sale of Other
Investment Securities 235,331 928
Loss on Sale of Other
Real Estate and
Other Property Acquired (21,738) (34,094)
Other Income 187,275 332,227
TOTAL OTHER INCOME 1,105,225 1,055,824
OTHER EXPENSES:
Salaries and Employee Benefits 2,509,687 2,739,422
Occupancy Expense 863,914 959,732
Amortization of Intangible Assets 176,299 193,834
Expenses related to Real
Estate Acquired by Foreclosure 623,313 890,915
Other Operating Expenses 1,479,264 1,432,631
TOTAL OTHER EXPENSES 5,652,477 6,216,534
<PAGE>
Exhibit B
(Continued)
COMMERCIAL BANCSHARES, INC. AND SUBSIDIARY
FOR THE YEARS ENDED
CONSOLIDATED STATEMENTS OF OPERATIONS DECEMBER 31, 1991 AND 1990
1991 1990
INCOME (LOSS) BEFORE INCOME TAX
EXPENSE (BENEFIT) AND EXTRAORDINARY
ITEM 1,033,201 (1,554,205)
INCOME TAX EXPENSE (BENEFIT) (Note 9) 163,445 (687,000)
INCOME BEFORE EXTRAORDINARY ITEM 869,756 (867,205)
EXTRAORDINARY ITEM - BENEFIT OF
UTILIZATION OF NET OPERATING
LOSS CARRYFORWARD (200,000) -0-
NET INCOME (LOSS) $ 1,069,756 $ (867,205)
The accompanying Notes to Consolidated Financial Statements are an integral part
of these statements.
<PAGE>
Exhibit C
COMMERCIAL BANCSHARES, INC. AND SUBSIDIARY
CONSOLIDATED STATEMENTS OF FOR THE YEARS ENDED
CHANGES IN SHAREHOLDERS' EQUITY DECEMBER 31, 1991 AND 1990
Unrealized
Loss
on Marketable
Common Capital Equity
Stock Surplus Securities
BALANCE, DECEMBER 31, 1989 $ 629,446 $ 515,305 $ (471,608)
Purchase of Treasury Stock
Change in Unrealized Loss
on Marketable Equity
Securities (1,903)
Net Loss
BALANCE, DECEMBER 31, 1990 629,446 515,305 (473,511)
Change in Unrealized Loss
on Marketable Equity
Securities 287,315
Net Income
BALANCE, DECEMBER 31, 1991 $ 629,446 $ 515,305 $(186,196)
The accompanying Notes to Consolidated Financial Statements are an integral part
of these statements.
<PAGE>
Exhibit C
(Continued)
COMMERCIAL BANCSHARES, INC. AND SUBSIDIARY
CONSOLIDATED STATEMENTS OF FOR THE YEARS ENDED
CHANGES IN SHAREHOLDERS' EQUITY DECEMBER 31, 1991 AND 1990
Undivided Treasury
Profits Stock
BALANCE, DECEMBER 31, 1989 $9,902,140 $(1,151,744)
Purchase of Treasury Stock (1,000)
Change in Unrealized Loss
on Marketable Equity
Securities
Net Loss 867,205)
BALANCE, DECEMBER 31, 1990 9,034,935 (1,152,744)
Change in Unrealized Loss
on Marketable Equity
Securities
Net Income 1,069,756
BALANCE, DECEMBER 31, 1991 $10,104,691 $(1,152,744)
The accompanying Notes to Consolidated Financial Statements are an integral part
of these statements.
<PAGE>
Exhibit D
COMMERCIAL BANCSHARES, INC. AND SUBSIDIARY
FOR THE YEARS ENDED
CONSOLIDATED STATEMENTS OF CASH FLOWS DECEMBER 31, 1991 AND 1990
1991 1990
CASH FLOWS FROM OPERATING ACTIVITIES:
Net Income (Loss) $ 1,069,756 $ (867,205)
Adjustments to Reconcile Net
Income (Loss) to Net Cash
Provided by Operating Activities:
Loss on Sale of Marketable Equity
Securities 213,142 57,488
Gain on Sale of Investment Securities (235,331) (928)
Net Accretion of Discount (314,625) (951,645)
Provision for Loan Losses 10,000 1,310,491
Losses on Sales and Writedowns of
Real Estate and Other
Property Acquired
by Foreclosure 348,970 414,035
Depreciation and Amortization 562,837 667,235
Decrease (Increase) in Accrued
Interest Receivable and Other
Assets 794,714 (785,815)
Decrease in Accrued Interest Payable (357,763) (83,595)
Increase in Other Liabilities 222,004 245,652
Decrease in Deferred Income Taxes (293,998) -0-
NET CASH PROVIDED BY OPERATING
ACTIVITIES 2,019,706 5,713
CASH FLOWS FROM INVESTING ACTIVITIES:
Net (Increase) Decrease in
Federal Funds Sold (875,000) 2,375,000
Proceeds from Sales and Maturities
of Investment Securities 16,282,584 24,142,995
Purchase of Investment Securities (24,767,670) (30,554,019)
Net (Increase) Decrease in
Certificate of Deposit 1,000,000 (1,000,000)
Net (Increase) in Loans 3,382,864 1,253,084
Proceeds from Sales of Real Estate
and Other Property Acquired
By Foreclosure 1,656,041 1,620,876
Purchase of Premises and Equipment (129,898) (52,921)
NET CASH USED IN INVESTING ACTIVITIES (3,451,079) (2,214,985)
<PAGE>
Exhibit D
(Continued)
COMMERCIAL BANCSHARES, INC. AND SUBSIDIARY
FOR THE YEARS ENDED
CONSOLIDATED STATEMENTS OF CASH FLOWS DECEMBER 31, 1991 AND 1990
1991 1990
CASH FLOWS FROM FINANCING ACTIVITIES:
Net Increase in Deposits $ 138,436 $ 2,156,698
Repayments of Notes Payable (862,778) (862,778)
Purchase of Treasury Stock -0- (1,000)
NET CASH PROVIDED BY (USED IN)
FINANCING ACTIVITIES (724,342) 1,292,920
NET DECREASE IN CASH AND
CASH EQUIVALENTS (2,155,715) (916,352)
CASH AND CASH EQUIVALENTS,
BEGINNING OF YEAR 7,685,986 8,602,338
CASH AND CASH EQUIVALENTS,
END OF YEAR $ 5,530,271 $ 7,685,986
SUPPLEMENTAL DISCLOSURE OF CASH FLOW INFORMATION:
Cash Paid During the Year
for Interest $ 9,208,004 $ 10,015,292
Cash Paid During the Year
for Income Taxes $ 175,000 $ 53,102
Income Tax Refunds Received
During the Year $ 867,277 $ -0-
The accompanying Notes to Consolidated Financial Statements are an integral part
of these statements.
<PAGE>
Exhibit E
COMMERCIAL BANCSHARES, INC. AND SUBSIDIARY
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS DECEMBER 31, 1991
1. SUMMARY OF SIGNIFICANT ACCOUNTING AND REPORTING POLICIES:
The accounting and reporting policies of Commercial Bancshares, Inc.
(Holding Corporation) and subsidiary conform to generally accepted
accounting principles and the prevailing practices within the banking
industry. A summary of significant accounting policies is as follows:
Principles of Consolidation
The consolidated financial statements include the accounts of Commercial
Bancshares, Inc. and its wholly-owned subsidiary, First Commercial Bank.
All material intercompany transactions have been eliminated.
Investment Securities
Investment securities, other than marketable equity securities, are
carried 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 recorded in other income on the trade date
based on the net proceeds and the adjusted carrying amount of the
securities sold using the specific identification method. It is the
Holding Corporation and Subsidiary's intent, and it has the ability to
hold these securities to maturity. Marketable equity securities are
stated at the lower of aggregate cost or market and are adjusted by a
charge to a valuation account within shareholders' equity called
"Unrealized Loss on Marketable Equity Securities." Realized gains or
losses on the sale of marketable equity securities are shown separately
in other income.
Loans
Loans are stated at the principal amount outstanding, net of unearned
discount and allowance for loan losses. Unearned discount relates
principally to consumer installment loans. The related interest income
is recognized principally by the simple interest method which records
interest based on the principle amount outstanding. Loan fees which
represent an adjustment to the interest yield are deferred and amortized
over the estimated life of the loan.
When the payment of principal or interest on a loan is delinquent for 90
days, or earlier in some cases, the loan is placed on non-accrual status,
unless the loan is in the process of collection and the underlying
collateral fully supports the carrying value of the loan. If the
decision is made to continue accruing interest on the loan, periodic
reviews are made to confirm the accruing status of the loan. When a loan
is placed on non-accrual status, interest accrued during the current year
prior to the judgement of uncollectibility is charged to operations.
Interest accrued during prior periods is charged to the allowance for
loan losses. Generally, any payments received on non-accrual loans are
applied first to outstanding loan amounts and next to the recovery of
charged-off loan amounts. Any excess is treated as recovery of lost
interest.
<PAGE>
Exhibit E
Continued
COMMERCIAL BANCSHARES, INC. AND SUBSIDIARY
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS DECEMBER 31, 1991
1. SUMMARY OF SIGNIFICANT ACCOUNTING AND REPORTING POLICIES (Continued):
Allowance For Loan Losses
The allowance for loan losses is a valuation allowance available for losses
incurred on loans. All losses are charged to the allowance for loan losses
when the loss actually occurs or when a determination is made that a loss
is likely to occur. Recoveries are credited to the allowance at the time
of recovery.
Management's judgment as to the level of future losses on existing loans
involves the consideration of current and anticipated economic conditions
and their potential effects on specific borrowers; an evaluation of the
existing relationships among loans, potential loan losses, and the present
level of the allowance; results of examinations of the loan portfolio by
regulatory agencies; and management's internal review of the loan
portfolio. In determining the collectibility of certain loans, management
also considers the fair value of any underlying collateral.
It should be understood that estimates of future loan losses involve an
exercise of judgment. While it is possible that in particular periods the
Bank may sustain losses which are substantial relative to the allowance for
loan losses, it is the judgment of management that the allowance for loan
losses reflected in the consolidated statements of condition is adequate to
absorb possible losses in the existing loan portfolio.
Premises and Equipment
Premises and equipment are stated at cost less accumulated depreciation and
amortization. Depreciation expense is computed primarily using the
straight-line method over the estimated useful lives of the assets which
range from 3 to 40 years. Leasehold improvements are amortized on a
straight-line basis over the periods of the leases or the estimated useful
lives, whichever is shorter.
Real Estate Acquired by Foreclosure
Real estate acquired by foreclosure is recorded at the balance of the loan
or at estimated fair value, whichever is less, at the date acquired, plus
capital improvements made thereafter to facilitate sale. Adjustments are
made to reflect declines, if any, in net realizable values below the
recorded amounts. Costs of holding real estate acquired in settlement of
loans are reflected in income currently. Gains on sales of such real
estate are taken into income based on the buyer's initial and continuing
investment in the property.
<PAGE>
Exhibit E
Continued
COMMERCIAL BANCSHARES, INC. AND SUBSIDIARY
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS DECEMBER 31, 1991
1. SUMMARY OF SIGNIFICANT ACCOUNTING AND REPORTING POLICIES (Continued):
Intangible Assets
Unamortized costs of the purchased subsidiary in excess of the fair market
value of the acquired net tangible assets are included in Other Assets in
the consolidated statements of condition. Identifiable intangible assets,
principally related to depositor and borrower relationships, are being
amortized using an accelerated method over the estimated periods benefitted
(6 to 12 years). The unamortized balance at December 31, 1991 and 1990 was
$320,912 and $907,000, respectively. Amortization expense on identifiable
intangible assets was $106,662 and $139,000 for 1991 and 1990,
respectively. The remaining costs (goodwill) are being amortized on the
straight-line basis over 12 years. The unamortized balance at December 31,
1991 and 1990 was $238,562 and $278,000, respectively. Amortization
expense was $39,216 for 1991 and 1990.
Income Taxes
Deferred income taxes are provided for timing differences between items of
income or expense reported in the consolidated financial statements and
those reported for income tax purposes. These differences relate primarily
to the provision for loan losses, writedowns of Other Real Estate Owned,
deferred compensation, depreciation on premises and equipment and capital
loss carryovers.
In December 1987, the Financial Accounting Standards Board issued Statement
No. 96 (SFAS No. 96), "Accounting for Income Taxes". In early 1992, the
Financial Accounting Standards Board issued Statement No. 109 (SFAS No.
109) which supersedes SFAS No. 96 for the accounting for income taxes.
Implementation is for all fiscal years beginning after December 15, 1992.
SFAS No. 109 requires companies to change from the deferred method of
accounting for income taxes to the liability method. Under the liability
method, deferred tax balances are calculated at balance sheet dates and
represent amounts of income taxes refundable or payable in future years
resulting from temporary differences. The change in deferred tax balances
is recorded as an element of income tax expense in the financial
statements. Under current interpretations of SFAS No. 109, the company's
evaluation indicates no material impact on its financial statements.
Consolidated Statements of Cash Flows
For purposes of reporting cash flows, cash and cash equivalents include
cash on hand, amounts due from banks and federal funds sold. Generally,
federal funds are purchased and sold for one day periods.
Reclassifications
Certain reclassifications have been made to the 1990 consolidated financial
statements in order to conform to the classifications adopted for reporting
in 1991.
2. CASH AND DUE FROM BANKS:
The Bank is required to maintain average reserve balances with the Federal
Reserve Bank. "Cash and due from banks" in the consolidated statements of
condition included amounts so restricted of $500,000 at December 31, 1991
and $1,018,000 at December 31, 1990.
3. INVESTMENT SECURITIES:
The carrying value and related market value of investment securities are
presented below:
December 31, 1991
Carrying Unrealized Unrealized Market
Value Gains Losses Value
U.S. Treasuries $18,883,364 $ 317,146 $ -0- $19,200,510
U.S. Agencies 62,492,958 1,752,274 (62,009) 64,183,223
State and Political
Subdivisions 994,485 64,738 (604) 1,058,619
Marketable Equity
Securities 1,527,007 -0- -0- 1,527,007
Other Securities 1,002,970 17,655 -0- 1,020,625
Totals $84,900,784 $ 2,151,813 $ (62,613) $86,989,984
December 31, 1990
Carrying Unrealized Unrealized Market
Value Gains Losses Value
U.S. Treasuries $12,964,000 $ 207,000 $ (34,000) $13,137,000
U.S. Agencies 54,085,000 188,000 (309,000) 53,964,000
State and Political
Subdivisions 3,781,000 216,000 -0- 3,997,000
Marketable Equity
Securities 2,432,000 -0- -0- 2,432,000
Other Securities 2,530,000 7,000 (6,000) 2,531,000
Totals $75,792,000 $ 618,000 $ (349,000) $76,061,000
The carrying value and related market value of investment securities at December
31, 1991, 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.
Carrying Market
Value Value
Due in One Year or Less $28,670,273 $28,991,142
Due After One Year
through Five Years 24,801,730 25,532,255
Due After Five Years
through Ten Years 4,324,835 4,492,466
Due After Ten Years 25,576,939 26,447,114
Subtotal 83,373,777 85,462,977
Marketable Equity Securities 1,527,007 1,527,007
Totals $84,900,784 $86,989,984
3. INVESTMENT SECURITIES (Continued):
Marketable equity securities consist of investments in the following mutual
funds: Transamerica U.S. Government Income Trust, Transamerica Government
Securities Trust, and Colonial Government Securities.
Proceeds from sales of investments in debt securities during 1991 were
$15,339,746. Gross gains of $236,266 and gross losses of $935 were
realized on those sales.
Proceeds from sales of investments in debt securities during 1990 were
$17,564,488. Gross gains of $8,000 and gross losses of $7,512 were
realized on those sales.
Investment securities with a carrying amount of approximately $32,841,969
and $36,394,000 and an estimated market value of $34,469,037 and
$36,706,000 at December 31, 1991 and 1990, respectively, were pledged to
secure public deposits and for other purposes required or permitted by law.
4. LOANS:
The loan portfolio consists of various types of loans classified by major
type as follows:
1991 1990
Real Estate $38,726,389 $37,509,000
Commercial and Industrial 19,395,194 24,422,000
Consumer 9,638,286 10,335,000
Agriculture 887,314 1,157,000
Other 172,891 116,000
68,820,074 73,539,000
Less: Allowance for Loan Losses 1,306,102 2,065,000
Totals $67,513,972 $71,474,000
As of December 31, 1991 and 1990, loans outstanding to directors, officers,
and their affiliates were approximately $4,578,799 and $4,938,000,
respectively. In the opinion of management, all transactions entered into
between the Bank and such related parties have been and are, in the
ordinary course of business, made on the same terms and conditions as
similar transactions with unaffiliated persons. During 1991, $140,419 of
new loans were made and repayments of $499,620 were received. Letters of
Credit and unadvanced lines of credit to directors, officers, and their
affiliates totaled $772,099 at December 31, 1991.
At December 31, 1991, fixed rate loans totaled $53,086,309 and variable
rate loans totaled $15,705,879.
At December 31, 1991 and 1990 loans on which the accrual of interest had
been discontinued or reduced amounted to $1,547,365 and $2,005,000,
respectively. The following table presents interest income actually earned
and additional interest income that would have been earned under these
original terms of the loans:
1991 1990
Income Earned $ 100,870 $ 78,000
Foregone Income 43,757 205,000
The Bank had six trouble debt restructurings during the year involving
commercial loans. The aggregate recorded investment at December 31, 1991
was $816,873. The amount of interest income included in net income from
these six loans was $10,204. If the loans would have been continued under
the original terms gross interest income would have been $148,272.
An analysis of activity in the allowance for loan losses is as follows:
1991 1990
Balance at Beginning of Year $ 2,064,339 $ 3,711,000
Provision Charged to Operations 10,000 1,310,000
Loans Charged Off (965,938) (3,085,000)
Loan Recoveries 197,701 129,000
Balance at End of Year $ 1,306,102 $ 2,065,000
5. PREMISES AND EQUIPMENT:
Premises and equipment are summarized below:
1991 1990
Land $ 455,970 $ 456,000
Buildings 3,508,297 3,248,000
Leasehold Improvements 290,788 316,000
Furniture, Fixtures, and Equipment 2,973,768 2,695,000
7,228,823 6,715,000
Less Accumulated Depreciation
and Amortization (3,746,134) (2,960,000)
Premises and Equipment, Net $ 3,482,689 $ 3,755,000
Depreciation expense included in the Consolidated Statements of Operations
was $402,538 and $492,225 for the years ended December 31, 1991 and 1990.
6. DEPOSITS:
Deposits are summarized below:
1991 1990
Demand $ 20,397,683 $ 21,510,000
NOW Accounts 24,062,385 19,892,000
Savings 11,668,123 10,475,000
Money Market Accounts 24,593,358 21,702,000
Time Certificates of Deposits 74,355,432 81,360,000
Totals $155,076,981 $154,939,000
Maturities of certificates of deposit are presented in the following
schedules:
Amount
Maturing
1992 $67,923,442
1993 5,161,631
1994 1,059,667
1995 154,508
1996 40,184
After 1996 16,000
Total $74,355,432
Included in the interest bearing deposits are certificates of deposit in
amounts of $100,000 or more totaling $17,591,861 and $20,574,000 at
December 31, 1991 and 1990, respectively.
7. CONCENTRATION OF DEPOSITS:
The Bank has deposits with 3 customers in the amount of $17,236,655 at
December 31, 1991. This amount represents 11.11% of total customer
deposits. The deposits consist of public and personal funds.
8. NOTES PAYABLE:
Notes payable consist of the following notes secured by 100% of the stock
of the subsidiary bank. Both notes are subject to the terms of the same
loan agreement which specify a minimum net worth requirement, common stock
dividend restrictions and other customary covenants.
1991 1990
Note payable to a bank, bearing interest
payable quarterly at a rate 1/4 of 1% in
excess of the prime rate of the lending
bank, 7.75% as of December 31, 1991 $ 6,835,000 $ 7,620,000
Note payable to a bank, bearing interest
payable quarterly at a rate 1/2 of 1% in
excess of the prime rate of the lending
bank, 8.00% as of December 31, 1991 452,652 530,000
Totals $ 7,287,652 $ 8,150,000
At December 31, 1990, the Holding Corporation was in technical default of
certain covenants of the loan agreements relating to notes payable to bank.
Although the Holding Corporation has been current as to principal and
interest, the lender has declined to waive the violations, has declared the
notes in default and demanded payment in full. The Holding Corporation has
been negotiating with the lender since 1990 to restructure the debt.
Management believes that the negotiations will be successful.
9. INCOME TAXES:
The components of the provision for federal income taxes are as follows:
1991 1990
Currently (Receivable) Payable $ 121,000 $ (687,000)
Provision in Lieu of Income Taxes 200,000 -0-
Refund Related to 1990 in Excess of
Benefit Recorded in Prior Year (98,000) -0-
Deferred Taxes (59,555) -0-
Total $ 163,445 $ (687,000)
The provision for federal income taxes differs from the amount computed by
applying the federal income tax statutory rate on operations as follows:
1991 1990
Amount % Amount %
Taxes Calculated at
Statutory Rate $351,000 34.0 $(528,000) (34.0)
Decrease resulting from
Tax-Exempt Interest
Component (116,000) (11.2) (211,000) (13.5)
Amortization of Costs
Incurred and Excess
Purchase Price of
Acquired Company 77,000 7.5 66,000 4.2
Refund Related to 1990
in Excess of
Benefit Recorded (98,000) (9.5) -0- --
Deferred Tax from Prior Year (59,555) (5.8) -0- --
Other, Net 9,000 .8 (14,000) ( .9)
Totals $163,445 15.8 $(687,000) (44.2)
For income tax purposes, the Holding Corporation and Subsidiary has net
operating loss carryforwards at December 31, 1991 of approximately $517,000
which expire in years through 2001 and investment tax credit carryforwards
of $74,000. For financial statement purposes, the Holding Corporation and
Subsidiary has a net operating loss carryforward of approximately
$1,900,000.
Deferred taxes, according to the timing differences which caused them, are
as follows:
1991 1990
Depreciation $ (16,000) $ (11,000)
Provision for Loan Losses 215,000 534,000
Deferred Compensation (13,000) (21,000)
Capital Loss not Utilized
Due to Limitation (85,000) -0-
Other Real Estate Owned 2,000 (97,000)
Limitation on Recording of
Deferred Tax Debits (102,000) (375,000)
Other (1,000) (30,000)
Totals $ -0- $ -0-
At December 31, 1991, the Bank has a liability to the Holding Corporation
$327,200 for income tax benefits provided by the Holding Corporation.
10. EMPLOYEE BENEFIT PLANS:
The Bank has an Employee Stock Ownership (ESOP) covering eligible
employees.
The Bank also has a salary deferral plan covering substantially all
employees which provides for payments upon retirement, death or disability.
11. FINANCIAL INSTRUMENTS WITH OFF-BALANCE SHEET RISK:
The Bank is a party to various financial instruments with off-balance sheet
risk in the normal course of business to meet the financing needs of its
customers. These financial instruments include commitments to extend
credit and standby letters of credit and involve, to varying degrees,
elements of credit risk in excess of the amounts recognized in the
consolidated statements of condition. As of December 31, 1991 and 1990,
the Bank's commitments to extend credit totaled $7,534,537 and $6,599,000,
respectively, and standby letters of credit totaled $541,510 and $714,000,
respectively. Bank management does not anticipate any material loss as a
result of these transactions.
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 disclosed above do not necessarily represent future cash
requirements. The Bank evaluated each customer's creditworthiness on a
case-by-case basis. The amount of collateral obtained, if considered
necessary by the Bank upon extension of credit, is based on management's
credit evaluation of the counterparty.
Standby letters of credit are conditional commitments issued by the Bank to
guarantee the performance of a customer to a third party. The credit risk
involved in issuing letters of credit is essentially the same as that
involved in extending standard lending arrangements.
12. COMMITMENTS AND CONTINGENT LIABILITIES:
The Holding Corporation and Subsidiary are also subject to claims and
lawsuits which arise primarily in the ordinary course of business. Based
on information presently available and advice received from legal counsel
representing the Holding Corporation and Subsidiary in connection with such
claims and lawsuits, it is the opinion of management that the disposition
or ultimate determination of such claims and lawsuits will not have a
material adverse effect on the consolidated financial position of the
Holding Corporation and Subsidiary.
13. DIVIDEND RESTRICTIONS
Dividends from the subsidiary Bank are payable only out of current earnings
or undistributed earnings of the preceding year. In addition, dividends in
excess of fifty percent of current earnings, or of an amount that would
bring adjusted primary capital of the Bank under eight percent are
currently subject to regulatory approval. Payment of dividends by the
Holding Corporation are subject to restrictive covenants of the debt
agreement.
<PAGE>
INDEPENDENT AUDITORS' REPORT ON ADDITIONAL INFORMATION
Our audit was conducted for the purpose of forming an opinion on the basic
consolidated financial statements taken as a whole. The consolidating
information on pages 18 through 20 is presented for the purpose of additional
analysis and is not a required part of the basic financial statements. This
consolidating information is the responsibility of the Company's management.
Such information has been subjected to the auditing procedures applied in our
audit of the basic consolidated financial statements and, in our opinion, is
fairly stated in all material respects when considered in relation to the basic
consolidated financial statements taken as a whole. Reference is made to the
fourth paragraph of our independent auditors' report on page 1.
January 31, 1992
<PAGE>
Exhibit F
COMMERCIAL BANCSHARES, INC. AND SUBSIDIARY
CONSOLIDATING STATEMENT OF CONDITION INFORMATION DECEMBER 31, 1991
First
Commercial Commercial
ASSETS Bancshares Bank
Cash and Due from Banks $ 1,059,556 $ 5,380,059
Interest Bearing Deposits 62,445 87,767
Total Cash and
Cash Equivalents 1,122,001 5,467,826
Federal Funds Sold 6,800,000
Investment Securities 84,900,784
Loans, Net 67,486,086
Premises and Equipment, Net 3,136,524
Real Estate Acquired by
Foreclosure, Net 2,601,318
Accrued Interest Receivables 1,975,148
Other Assets 16,365,640 845,935
$17,487,641 $173,213,621
LIABILITIES AND SHAREHOLDERS'
EQUITY
LIABILITIES:
Deposits:
Non-interest Bearing $ $ 21,457,239
Interest Bearing 134,679,298
Total Deposits 156,136,537
Accrued Interest Payable 147,363 848,678
Other Liabilities 142,124 1,540,972
Notes Payable 7,287,652 -0-
Total Liabilities 7,577,139 158,526,187
COMMITMENTS AND CONTINGENCIES -0- -0-
SHAREHOLDERS' EQUITY:
Common Stock 629,446 600,000
Capital Surplus 515,305 5,400,000
Unrealized Loss on
Marketable Equity
Securities (186,196)
Treasury Shares, At Cost (1,152,744) -0-
Undivided Profits 9,918,495 8,873,630
Total Shareholders' Equity 9,910,502 14,687,434
$17,487,641 $173,213,621
<PAGE>
Exhibit F
(Continued)
COMMERCIAL BANCSHARES, INC. AND SUBSIDIARY
CONSOLIDATING STATEMENT OF CONDITION INFORMATION DECEMBER 31, 1991
Consolidating Commercial
and Bancshares,
Eliminating Inc. and
ASSETS Entries Subsidiary
Cash and Due from Banks $ (1,059,556) $ 5,380,059
Interest Bearing Deposits 150,212
Total Cash and
Cash Equivalents (1,059,556) 5,530,271
Federal Funds Sold 6,800,000
Investment Securities 84,900,784
Loans, Net 27,886 67,513,972
Premises and Equipment, Net 346,165 3,482,689
Real Estate Acquired by
Foreclosure, Net 2,601,318
Accrued Interest Receivables 1,975,148
Other Assets (15,623,353) 1,588,222
$(16,308,858) $174,392,404
LIABILITIES AND SHAREHOLDERS'
EQUITY
LIABILITIES:
Deposits:
Non-interest Bearing $ (1,059,556) $ 20,397,683
Interest Bearing 134,679,298
Total Deposits (1,059,556) 155,076,981
Accrued Interest Payable 996,041
Other Liabilities (561,868) 1,121,228
Notes Payable 7,287,652
Total Liabilities (1,621,424) 164,481,902
COMMITMENTS AND CONTINGENCIES -0- -0-
SHAREHOLDERS' EQUITY:
Common Stock (600,000) 629,446
Capital Surplus (5,400,000) 515,305
Unrealized Loss on
Marketable Equity
Securities (186,196)
Treasury Shares, At Cost (1,152,744)
Undivided Profits (8,687,434) 10,104,691
Total Shareholders' Equity (14,687,434) 9,910,502
$(16,308,858) $174,392,404
<PAGE>
Exhibit G
COMMERCIAL BANCSHARES, INC. AND SUBSIDIARY
CONSOLIDATING STATEMENT OF CONDITION INFORMATION DECEMBER 31, 1991
First
Commercial Commercial
ASSETS Bancshares Bank
INTEREST INCOME:
Loans, Including Fees $ $ 7,856,716
Investment Securities:
Taxable 81,626 5,981,376
Non-taxable 228,859
Federal Funds Sold 292,117
81,626 14,359,068
INTEREST EXPENSE:
Deposits 8,215,523
Notes Payable 634,718
634,718 8,215,523
NET INTEREST INCOME (LOSS) (553,092) 6,143,545
PROVISION FOR LOAN LOSSES 10,000
NET INTEREST INCOME (LOSS)
AFTER PROVISIONS FOR
LOAN LOSSES (553,092) 6,133,545
OTHER INCOME:
Customer Service Fees 917,499
Loss on Sale of Marketable
Equity Securities (213,142)
Gain (Loss) on Sale of
Other Investment
Securities 235,331
Loss on Sale of Other
Real Estate Owned (21,738)
Other Income 1,443,959 184,398
1,443,959 1,102,348
OTHER EXPENSES:
Salaries and Employee
Benefits 2,509,687
Occupancy Expense 863,914
Amortization of
Intangible Assets 176,299
Expenses Related to Real
Estate Acquired by
Foreclosure and
Repossessed Property 623,313
Other 78,767 1,400,497
255,066 5,397,411
INCOME (LOSS) BEFORE INCOME
TAX EXPENSE AND
EXTRAORDINARY ITEM
(BENEFIT) 635,801 1,838,482
INCOME TAX EXPENSE (BENEFIT) (433,955) 597,400
INCOME BEFORE EXTRAORDINARY
ITEM 1,069,756 1,241,082
EXTRAORDINARY ITEM (200,000)
NET INCOME (LOSS) $ 1,069,756 $ 1,441,082
<PAGE>
Exhibit G
(Continued)
COMMERCIAL BANCSHARES, INC. AND SUBSIDIARY
CONSOLIDATING STATEMENT OF CONDITION INFORMATION DECEMBER 31, 1991
Consolidating Commercial
and Bancshares,
Eliminating Inc. and
ASSETS Entries Subsidiary
INTEREST INCOME:
Loans, Including Fees $ $ 7,856,716
Investment Securities:
Taxable 6,063,002
Non-taxable 228,859
Federal Funds Sold 292,117
14,440,694
INTEREST EXPENSE:
Deposits 8,215,523
Notes Payable 634,718
8,850,241
NET INTEREST INCOME (LOSS) 5,590,453
PROVISION FOR LOAN LOSSES 10,000
NET INTEREST INCOME (LOSS)
AFTER PROVISIONS FOR
LOAN LOSSES 5,580,453
OTHER INCOME:
Customer Service Fees 917,499
Loss on Sale of Marketable
Equity Securities (213,142)
Gain (Loss) on Sale of
Other Investment
Securities 235,331
Loss on Sale of Other
Real Estate Owned (21,738)
Other Income (1,441,082) 187,275
(1,441,082) 1,105,225
OTHER EXPENSES:
Salaries and Employee
Benefits 2,509,687
Occupancy Expense 863,914
Amortization of
Intangible Assets 176,299
Expenses Related to Real
Estate Acquired by
Foreclosure and
Repossessed Property 623,313
Other 1,479,264
5,652,477
INCOME (LOSS) BEFORE INCOME
TAX EXPENSE AND
EXTRAORDINARY ITEM
(BENEFIT) (1,441,082) 1,033,201
INCOME TAX EXPENSE (BENEFIT) (163,445)
INCOME BEFORE EXTRAORDINARY
ITEM (1,441,082) 869,756
EXTRAORDINARY ITEM (200,000)
NET INCOME (LOSS) $ (1,441,082) $ 1,069,756
<PAGE>
Exhibit H
COMMERCIAL BANCSHARES, INC. AND SUBSIDIARY
CONSOLIDATING AND ELIMINATING ENTRIES
(1)
Premises and Equipment, Net $ 346,165
Loans 27,886
Other Liabilities 234,668
Other Assets $ 608,719
To reclassify intangibles resulting from excess price paid over book value
from other assets to appropriate accounts.
(2)
Noninterest-bearing Deposits 1,059,556
Cash and Due from Banks 1,059,556
To eliminate parent company's demand deposit accounts at the subsidiary
bank.
(3)
Other Liabilities 327,200
Other Assets 327,200
To eliminate receivable on parent company's books and payable on
subsidiary's books.
(4)
Common Stock 600,000
Capital Surplus 5,400,000
Undivided Profits 7,246,352
Other Income 1,441,082
Other Assets 14,687,434
To eliminate equity in subsidiary and investment in consolidated subsidiary
on parent company's books.
<PAGE>
APPENDIX A
ARTICLES OF AMENDMENT TO
THE ARTICLES OF INCORPORATION
OF COMMERCIAL BANCSHARES, INC.
On _______________, 1994, that shareholder of Commercial
Bancshares, Inc. (the "Company"), a Louisiana corporation, at a
meeting at which ___________ of the 281,843 outstanding shares of
common stock, $2.00 par value, entitled to vote were present or
represented by proxy (the "Meeting"), by a vote of _______ shares
in favor, ________ shares against , and _________ shares
abstaining, amended the Articles of Incorporation of the Company to
eliminate therefrom in its entirety Article VII as in effect
immediately before the Meeting and to substitute in its place the
following Article VII, and accordingly Article VII was amended to
read as follows:
"ARTICLE VII
"The shareholders, by the affirmative vote of a majority
of the voting power present or represented by proxy at any
annual or special meeting called for the purpose, may approve
a merger of the Corporation with and into Hibernia Corporation
and the related agreement of merger. Any such approval shall
be fully effective notwithstanding that such merger may result
in the amendment of all or any portion of the Articles of
Incorporation of the Corporation, and notwithstanding any
other provision of these Articles of Incorporation to the
contrary, including, but not limited to, the provisions of
Article III, IV, VI, and IX prohibiting amendments of Articles
III, IV, VI, VII and IX unless first approved (a) in the case
of Article III, by two-thirds (2/3) of the shareholders and
(b) in the case of Articles IV, VI, VII and IX, by 75% of the
total voting power of the Corporation."
These Articles of Amendment to the Articles of Incorporation
of Commercial Bancshares, Inc. are dated ________, 1994.
WITNESSES: COMMERCIAL BANCSHARES, INC.
__________________ BY: _____________________________
J. Roland Livingston
__________________ ITS: President
__________________ BY: _______________________________
David H. Stiel, Jr.
__________________ ITS: Secretary
<PAGE>
APPENDIX B
AGREEMENT AND PLAN OF MERGER
OF
COMMERCIAL BANCSHARES, INC.
WITH AND INTO
HIBERNIA CORPORATION
AGREEMENT AND PLAN OF MERGER dated as of September 28, 1993
(this "Agreement"), adopted and made by and between Commercial
Bancshares, Inc. ("Commercial") and Hibernia Corporation
("Hibernia").
Commercial is a corporation duly organized and existing under
the laws of the State of Louisiana; has its registered office at
521 Main Street, Franklin, Louisiana 70538; and is a bank holding
company within the meaning of the Bank Holding Company Act of 1956,
as amended (the "Bank Holding Company Act"). The presently
authorized capital stock of Commercial consists solely of 500,000
shares of common stock of the par value of $2.00 each ("Commercial
Common Stock"). As of July 31, 1993, 314,723 shares of Commercial
Common Stock had been issued, 281,843 shares of Commercial Common
Stock were outstanding, and 32,880 shares of Commercial Common
Stock were held in Commercial's treasury. All outstanding shares
of Commercial Common Stock have been duly issued and are validly
outstanding, fully paid and nonassessable. The foregoing are the
only voting securities of Commercial authorized, issued, or
outstanding, and there are no existing options, warrants, calls, or
commitments of any kind obligating Commercial to issue any share of
its capital stock or any other security of which it is or will be
the issuer. None of the shares of Commercial's capital stock has
been issued in violation of preemptive rights of shareholders.
Commercial owns 100 percent of the outstanding voting shares of
First Commercial Bank (the "Bank"), a Louisiana banking corporation
duly organized and existing under the laws of the State of
Louisiana.
Hibernia is a corporation duly organized and existing under
the laws of the State of Louisiana; has its registered office at
313 Carondelet Street, New Orleans, Louisiana 70130; and is a bank
holding company within the meaning of the Bank Holding Company Act.
Hibernia owns all of the issued and outstanding shares of capital
stock of Hibernia National Bank ("HNB"). The presently authorized
capital stock of Hibernia is 300,000,000 shares, consisting of
100,000,000 shares of preferred stock, no par value, 100,000,000
shares of Class B non-voting common stock, no par value, and
100,000,000 shares of Class A voting common stock, no par value
(the Class A voting common stock being referred to hereinafter as
"Hibernia Common Stock"). As of July 31, 1993, no shares of
Hibernia's preferred stock or its Class B non-voting common stock
were outstanding, 83,437,931 shares of Hibernia Common Stock were
outstanding, and no shares of Hibernia Common Stock were held in
Hibernia's treasury. All outstanding shares of Hibernia Common
Stock have been duly issued and are validly outstanding, fully paid
and nonassessable. The foregoing are the only voting securities of
Hibernia authorized, issued or outstanding and there are no
existing options, warrants, calls or commitments of any kind
obligating Hibernia to issue any share of its capital stock or any
other security of which it is or will be the issuer, except that
Hibernia has authorized or reserved 1,500,000 shares of Hibernia
Common Stock for issuance under its 1987 Stock Option Plan,
pursuant to which options covering 817,837 shares of Hibernia
Common Stock were outstanding as of July 31, 1993, 2,823,970 (as
adjusted) shares of Hibernia Common Stock for issuance under its
1992 Long-Term Incentive Plan, pursuant to which options covering
914,500 shares of Hibernia Common Stock were outstanding as of July
31, 1993, 1,000,000 shares of Hibernia Common Stock for issuance
under its 1993 Director Stock Option Plan, pursuant to which
options covering 75,000 shares of Hibernia Common Stock will be
outstanding upon amendment or waiver of Section 19(n) of the
Registration Rights Agreement referred to in Section 12.4 hereof
and 703,263 shares of Hibernia Common Stock are available for
issuance pursuant to Hibernia's Dividend Reinvestment and Stock
Purchase Plan. None of the shares of Hibernia's capital stock has
been issued in violation of preemptive rights of shareholders.
The Boards of Directors of Commercial and Hibernia have duly
approved this Agreement and have authorized the execution hereof by
Commercial's Chairman of the Board and Hibernia's President and
Chief Executive Officer, respectively. Subject to receipt and
approval by the Board of Directors of Commercial of a written
fairness opinion of Bank Advisory Group regarding the Merger (the
"Fairness Opinion"), Commercial has directed that this Agreement be
submitted to a vote of its shareholders in accordance with Part XI
of the Louisiana Business Corporation Law ("LBCL") and the terms of
this Agreement.
In consideration of their mutual promises and obligations, the
parties hereto adopt and make this Agreement for the merger of
Commercial with and into Hibernia and prescribe the terms and
conditions of such merger and the mode of carrying it into effect,
which shall be as follows:
1. The Merger. On the Effective Date (as defined in Section
14 hereof), Commercial shall be merged with and into Hibernia under
the Articles of Incorporation of Hibernia, pursuant to the
provisions of, and with the effect provided in, Part XI of the LBCL
(the "Merger") and the Merger Agreement in substantially the form
of Exhibit 1 hereto (the "Merger Agreement").
2. Hibernia Capital Stock. The shares of the capital stock
of Hibernia issued and outstanding immediately prior to the
Effective Date shall, on the Effective Date, continue to be issued
and outstanding.
3. Commercial Common Stock.
3.1. Conversion. On the Effective Date and subject to
the provisions of Section 3.7 hereof,
(a) each share of Commercial Common Stock issued and
outstanding immediately prior to the Effective Date, other than (i)
shares as to which dissenters' rights have been perfected and not
withdrawn or otherwise forfeited under Section 12: 131 of the LBCL
and (ii) shares owned beneficially by Hibernia or its subsidiaries,
shall, by virtue of the Merger automatically and without any action
on the part of the holder thereof, become and be converted into the
number of shares of Hibernia Common Stock that equals the Exchange
Rate set forth in Section 3.8 hereof;
(b) holders of certificates which represent shares of
Commercial Common Stock outstanding immediately prior to the
Effective Date (hereinafter called "Old Certificates") shall cease
to be, and shall have no rights as, shareholders of Commercial;
(c) each share of Commercial Common Stock held in the
treasury of Commercial or owned beneficially by Hibernia or any of
its subsidiaries shall be cancelled; and
(d) Old Certificates shall be exchangeable by the
holders thereof in the manner provided in the transmittal materials
described below for new certificates for the number of whole shares
of Hibernia Common Stock to which such holders shall be entitled in
accordance with the Exchange Rate set forth in Section 3.8 and a
check representing cash paid in lieu of fractional shares as
provided in Section 3.2 hereof.
3.2. Fractional Shares. Each holder of Old Certificates
who would otherwise have been entitled to receive a fraction of a
share of Hibernia Common Stock (after taking into account all
shares of Commercial Common Stock represented by the Old
Certificates then delivered by such holder) shall receive, in lieu
thereof, cash (without interest) in an amount equal to such
fractional part of a share multiplied by the Average Market Price
of Hibernia Common Stock on the Closing Date as defined in Section
3.8(c) hereof.
3.3. Transmittal Materials. As promptly as practicable
after the Effective Date, Hibernia shall send or cause to be sent
to each former shareholder of record of Commercial transmittal
materials for use in exchanging Old Certificates for certificates
representing Hibernia Common Stock and a check representing cash
paid in lieu of fractional shares, if any. The letter of
transmittal will contain instructions with respect to the surrender
of Old Certificates and the distribution of certificates
representing Hibernia Common Stock. If any certificate for shares
of Hibernia Common Stock is to be issued in a name other than that
in which an Old Certificate surrendered for exchange is issued, the
Old Certificate so surrendered shall be properly endorsed and
otherwise in proper form for transfer and the person requesting
such exchange shall affix any requisite stock transfer tax stamps
to the Old Certificate surrendered or provide funds for their
purchase or establish to the satisfaction of the exchange agent to
be appointed by Hibernia in connection with such exchange (the
"Exchange Agent") that such taxes are not payable.
3.4. Rights as Shareholders. Former shareholders of
Commercial will be able to vote after the Effective Date at any
meeting of Hibernia shareholders or pursuant to any written consent
procedure the number of whole shares of Hibernia Common Stock into
which their shares of Commercial Common Stock are converted,
regardless of whether they have exchanged their Old Certificates.
Whenever a dividend is declared by Hibernia on the Hibernia Common
Stock after the Effective Date, the declaration shall include
dividends on all shares issuable hereunder, but no shareholder will
be entitled to receive his distribution of such dividends until
physical exchange of his Old Certificates shall have been effected.
Upon physical exchange of his Old Certificates, any such person
shall be entitled to receive from Hibernia an amount equal to all
dividends (without interest thereon and less the amount of taxes,
if any, that may have been withheld, imposed or paid thereon)
declared, and for which the payment has occurred, on the shares
represented thereby.
3.5. Cancellation of Old Certificates. On and after the
Effective Date there shall be no transfers on the stock transfer
books of Commercial or Hibernia of the shares of Commercial Common
Stock which were issued and outstanding immediately prior to the
Effective Date. If, after the Effective Date, Old Certificates are
properly presented to Hibernia, they shall be cancelled and
exchanged for certificates representing shares of Hibernia Common
Stock and a check representing cash paid in lieu of fractional
shares as herein provided. Any other provision of this Agreement
notwithstanding, neither the Exchange Agent nor any party hereto
shall be liable to a holder of Commercial Common Stock for any
amount paid or property delivered in good faith to a public
official pursuant to any applicable abandoned property, escheat, or
similar law.
3.6. Property Transfers. From time to time, as and when
requested by Hibernia and to the extent permitted by Louisiana law,
the officers and directors of Commercial last in office shall
execute and deliver such deeds and other instruments and shall take
or cause to be taken such further or other actions as shall be
necessary in order to vest or perfect in or to confirm of record or
otherwise to Hibernia title to, and possession of, all the
property, interests, assets, rights, privileges, immunities,
powers, franchises, and authorities of Commercial, and otherwise to
carry out the purposes of this Agreement.
3.7. Dissenters' Shares. Shares of Commercial Common
Stock held by any holder having rights of a dissenting shareholder
as provided in Part XIII of the LBCL, who shall have properly
objected to the Merger and who shall have properly demanded payment
on his stock in accordance with and subject to the provisions of
Section 12:131 of the LBCL, shall not be converted as provided in
Section 3.1 hereof until such time as such holder shall have failed
to perfect, or shall have effectively lost, his right to appraisal
of and payment for his shares of Commercial Common Stock, at which
time such shares shall be converted as provided in Section 3.1
hereof.
3.8. Exchange Rate.
(a) The Exchange Rate shall be the number that is the
greater of (i) the number obtained by dividing the Deliverable
Amount (as defined below) by the total number of issued and
outstanding shares of Commercial Common Stock on the Closing Date
or (ii) 8.4; provided, however, that if on or before the Effective
Date Hibernia or any of its subsidiaries enters into an agreement
in principle or a definitive agreement with one or more of St. Mary
Holding Corporation, a Louisiana corporation, and any of its direct
subsidiaries (collectively, "St. Mary") to acquire St. Mary by
merger, purchase, consolidation or otherwise (the "St. Mary
Agreement"), the Exchange Rate shall be the number that is the
greater of (i) the number obtained by dividing the Deliverable
Amount by the total number of issued and outstanding shares of
Commercial Common Stock on the Closing Date or (ii) 9.3.
(b) For purposes of this Agreement, the Deliverable
Amount shall be the number that equals $18.7 million divided by the
Average Market Price of Hibernia Common Stock on the Closing Date
(as defined in paragraph (c) below); provided, however, that if on
or before the Closing Date Hibernia enters into a St. Mary
Agreement, the Deliverable Amount shall be the number that equals
$20.7 million divided by the Average Market Price of Hibernia
Common Stock on the Closing Date (as defined in paragraph (c)
below).
(c) For purposes of this Agreement, the Average Market
Price of Hibernia Common Stock on the Closing Date shall be the
average of the mean of the high and low prices of one share of
Hibernia Common Stock for the five business days preceding the last
trading day immediately prior to the Closing Date as reported in
The Wall Street Journal.
4. Articles of Incorporation; Bylaws. The Articles of
Incorporation and Bylaws of Hibernia in force immediately prior to
the Effective Date shall on and after the Effective Date continue
to be the Articles of Incorporation and Bylaws of Hibernia,
respectively, unless altered, amended or repealed in accordance
with applicable law.
5. Employees. Hibernia shall cause to be provided as soon
as practicable after the Effective Date for the employees of
Commercial and the Bank immediately prior to the Effective Date the
employee benefits then made available to employees of Hibernia and
its subsidiaries, subject to the terms and conditions under which
those employee benefits are made available to such employees;
provided, however, that for purposes of determining the eligibility
of an employee of Commercial or the Bank (or both) to receive, and
the benefits to which such employee shall be entitled, under
Hibernia's benefits plans after the Effective Date, any period of
employment of such employee with Commercial or the Bank shall be
deemed equivalent to having been employed for that same period by
Hibernia and/or its subsidiaries.
6. Negative Covenants. From the date hereof until the
Effective Date, or until the termination of this Agreement,
Commercial covenants and agrees that it will not do, or agree to
commit to do, and Commercial will cause the Bank not to do and not
to agree or commit to do, without the prior written consent of
Hibernia, any of the following:
(a) in the case of Commercial (and not the Bank), make,
declare, set aside or pay any dividend or declare or make any
distribution on, or directly or indirectly combine, redeem,
purchase or otherwise acquire, any shares of Commercial Common
Stock (other than in a fiduciary capacity); provided, however,
that, if the Merger does not occur prior to March 31, 1994,
Commercial may declare and pay, on or after March 31, 1994, its
normal dividend of $1.00 per outstanding share of Commercial Common
Stock;
(b) authorize the creation or issuance of or issue any
additional shares of its capital stock, or any options, calls,
warrants, stock appreciation rights or commitments relating to its
capital stock or any securities or obligations convertible into or
exchangeable for, or giving any person any right to subscribe for
or acquire from it, shares of its capital stock;
(c) enter into any employment contracts with, increase
the rate of compensation of, or pay or agree to pay any bonus to,
any of its directors, officers or employees, except in accordance
with the existing policy and except for the payment to employees of
Commercial and/or the Bank on or before the Closing Date of bonuses
in amounts consistent with the amounts paid to such employees as
bonuses in prior years, pro rated for the elapsed portion of the
year to which such bonuses to be paid apply, which bonuses may be
paid notwithstanding the provisions of Section 9.9 of this
Agreement to the contrary;
(d) enter into or substantially modify (except as may be
required by applicable law) any pension, retirement, stock option,
stock purchase, stock appreciation right, savings, profit sharing,
deferred compensation, consulting, bonus, group insurance or other
employee benefit, incentive or welfare contract, plan or
arrangement, or any trust agreement related thereto, in respect of
any of its directors, officers or other employees; provided,
however, that Hibernia acknowledges that Commercial and the Bank
and their respective directors are parties to certain deferred
compensation agreements described on Schedule 7.9 hereto and that
Commercial and/or the Bank shall be entitled to terminate such
deferred compensation agreements on or before the Closing Date, so
long as the aggregate after-tax costs to Commercial and the Bank
incurred in connection with such termination shall not exceed
$600,000);
(e) other than as contemplated hereby and other than the
pledge of the Bank's stock to Deposit Guaranty Bank as security for
a loan to Commercial in the aggregate principal amount of
$3,500,000, (i) carry on its business other than in the usual,
regular and ordinary course in substantially the same manner as
heretofore conducted, (ii) amend its or the Bank's Articles of
Incorporation or Bylaws (except to the extent required in order to
effect the Merger as contemplated herein), (iii) impose, or suffer
the imposition, on any share of stock held by Commercial in the
Bank, of any material lien, charge, or encumbrance, or permit any
such lien to exist, (iv) establish or add any automatic teller
machines or branch or other banking offices, (v) make any capital
expenditures in excess of $100,000 or (vi) take any action that
would materially and adversely affect the ability of any party
hereto to obtain the approvals necessary for consummation of the
transactions contemplated hereby or that would materially and
adversely affect Commercial's ability to perform its covenants and
agreements hereunder;
(f) except with respect to transactions contemplated
hereby, merge with any other corporation or bank or permit any
other corporation or bank to merge into it or consolidate with any
other corporation or bank; acquire control over any other firm,
bank, corporation or organization or create any subsidiary (except
in a fiduciary capacity or in connection with foreclosures in bona
fide loan transactions); liquidate; or sell or dispose of any
assets or acquire any assets, otherwise than in the ordinary course
of its business consistent with its past practice; or
(g) knowingly fail to comply with any laws, regulations,
ordinances, or governmental actions applicable to it and to the
conduct of its business in a manner significant, material and
adverse to its business.
7. Representations and Warranties of Commercial. Commercial
(and not its directors or officers in their personal capacities)
hereby represents and warrants as follows:
7.1. Recitals. The facts set forth in the preamble to
this Agreement with respect to it are true and correct.
7.2. Organization and Qualification. Each of Commercial
and the Bank is a corporation or bank duly organized, validly
existing, and in good standing under the laws of the State of
Louisiana; each of Commercial and the Bank has the corporate power
and authority to carry on its business as it is now being conducted
and to own, lease and operate its assets, properties and business;
and Commercial has all requisite power and authority to execute and
deliver this Agreement and perform its obligations hereunder.
7.3. Ownership of Other Banks. Commercial does not own,
directly or indirectly, 5 percent or more of the outstanding
capital stock or other voting securities of any corporation, bank,
or other organization except the Bank. The presently authorized
capital stock of the Bank consists solely of 12,000 shares of
common stock of the par value of $50.00 each, of which 12,000
shares of common stock are outstanding. The outstanding shares of
capital stock of the Bank are validly issued and outstanding, fully
paid and, except as may be affected by Louisiana Revised Statute
Section 6:262, nonassessable and, except as provided on Schedule
7.3 hereto, all of such shares are owned by Commercial, free and
clear of all liens, claims and encumbrances.
7.4. Corporate Authorization. The execution, delivery
and, subject to receipt by the Board of Directors of Commercial of
the Fairness Opinion, performance of this Agreement have been
authorized by Commercial's Board of Directors, and, subject to the
receipt of such Fairness Opinion and the approval of this Agreement
by its shareholders in accordance with the LBCL, all corporate acts
and other proceedings required for the due and valid authorization,
execution, delivery and performance by Commercial of this Agreement
and the consummation of the Merger have been validly and
appropriately taken. Subject to such shareholder approval and to
such regulatory approvals as are required by law, this Agreement is
a legal, valid and binding obligation of Commercial, enforceable
against Commercial in accordance with its terms, except that
enforcement may be limited by bankruptcy, reorganization,
insolvency and other similar laws and court decisions relating to
or affecting the enforcement of creditors' rights generally and by
general equitable principles or principles of Louisiana law that
are similar to equitable principles in jurisdictions that recognize
a distinction between law and equity.
7.5. No Conflicts. Except as disclosed on Schedule 7.5
hereto, the execution and delivery of this Agreement by Commercial
does not, and the consummation of the transactions contemplated
hereby by it will not, constitute (i) a breach or violation of, or
a default under, any law, rule or regulation or any judgment,
decree, order, governmental permit or license, or agreement,
indenture or instrument of Commercial or the Bank or to which
Commercial or the Bank is subject, which breach, violation or
default would have a material and adverse effect on the financial
condition, properties, businesses or results of operations of
Commercial and the Bank taken as a whole or on the transactions
contemplated hereby, (ii) to the best of the knowledge of
Commercial's management, a breach or violation of, or a default
under, any law, rule or regulation or any judgment, decree, order,
governmental permit or license, or agreement, indenture or
instrument of Commercial or the Bank or to which Commercial or the
Bank is subject, or (iii) a breach or violation of, or a default
under, the Articles of Incorporation or Bylaws of Commercial or the
Bank; and the consummation of the transactions contemplated hereby
will not require any consent or approval under any such law, rule,
regulation, judgment, decree, order, governmental permit or license
or the consent or approval of any other party to any such
agreement, indenture or instrument, other than any required
approvals of shareholders and applicable regulatory authorities.
7.6. Financial Statements; Dividend Restrictions.
Commercial has delivered to Hibernia prior to the execution of this
Agreement true and correct copies of the following consolidated
financial statements (collectively referred to herein as the
"Commercial Financial Statements"): Commercial's Consolidated
Balance Sheets as of June 30, 1993 and 1992 (unaudited) and
December 31, 1992, 1991 and 1990 (audited); Consolidated
Statements of Income and Changes in Stockholders' Equity and
Consolidated Statements of Cash Flows for the years ended December
31, 1992, 1991 and 1990 (audited), and Consolidated Statements of
Income for the six-month periods ended June 30, 1993 and 1992
(unaudited). Each of the Commercial Financial Statements
(including the related notes) fairly presents the consolidated
results of operations of Commercial and the Bank for the respective
periods covered thereby and the consolidated financial condition of
Commercial and the Bank as of the respective dates thereof
(subject, in the case of unaudited statements, to year-end audit
adjustments that will not be material in amount or effect and
provided that such unaudited statements do not include required
statements of cash flows and changes in stockholders' equity and
all required footnote disclosure), in each case in accordance with
GAAP consistently applied during the periods involved, except as
may be noted therein. Except as disclosed in the Commercial
Financial Statements, including the notes thereto, or Schedule 7.6
hereto, and except as otherwise required by this Agreement, there
are no restrictions in any note, indenture, agreement, statute or
otherwise (except for statutes or regulations applicable to
Louisiana corporations or state banks generally) precluding
Commercial or the Bank from paying dividends, in each case when, as
and if declared by its Board of Directors.
7.7. No Material Adverse Change. Since June 30, 1993,
there has been no event or condition of any character (whether
actual, or to the knowledge of Commercial or the Bank, threatened
or contemplated) that has had or can reasonably be anticipated to
have, or that, if concluded or sustained adversely to Commercial,
would reasonably be anticipated to have, a material adverse effect
on the financial condition, results of operations, business or
prospects of Commercial or the Bank, excluding changes in laws or
regulations that affect banking institutions generally.
7.8. Litigation and Proceedings. Except as set forth on
Schedule 7.8 hereto, no litigation, proceeding or controversy
before any court or governmental agency is pending against
Commercial that in the opinion of its management is likely to have
a material and adverse effect on the business, results of
operations or financial condition of Commercial and the Bank taken
as a whole, and, to the best of its knowledge, no such litigation,
proceeding or controversy has been threatened or is contemplated.
Except as disclosed on Schedule 7.8 hereto, no member of
Commercial's consolidated group is subject to any written
agreement, memorandum, or order with or by any bank or bank holding
company regulatory authority restricting its operations or
requiring any material actions.
7.9. Material Contracts. Except for this Agreement and
arrangements made in the ordinary course of business or disclosed
on Schedule 7.9 hereto, neither Commercial nor the Bank is bound by
any material contract to be performed after the date hereof that is
not terminable by Commercial or the Bank without penalty or
liability on thirty days prior notice.
7.10. Brokers' or Finders' Fees. No agent, broker,
investment banker, investment or financial advisor or other person
acting on behalf of Commercial or the Bank or under their authority
is entitled to any commission, broker's or finder's fee from any of
the parties hereto in connection with any of the transactions
contemplated by this Agreement, except for fees payable in
connection with the financial services rendered to Commercial
and/or the Bank by Bank Advisory Group, for which Commercial and/or
the Bank will pay a fee.
7.11. Contingent Liabilities. Except as disclosed on
Schedule 7.11 hereto or as reflected in the Commercial Financial
Statements and except in the case of the Bank for unfunded loan
commitments made in the ordinary course of business consistent with
past practices, as of June 30, 1993, neither Commercial nor the
Bank has any obligation or liability (contingent or otherwise) that
was material, or that when combined with all similar obligations or
liabilities would have been material, to Commercial and the Bank
taken as a whole and there does not exist a set of circumstances
resulting from transactions effected or events occurring prior to,
on, or after June 30, 1993, or from any action omitted to be taken
during such period that, to the knowledge of Commercial, could
reasonably be expected to result in any such material obligation or
liability.
7.12. Tax Liability. The amounts set up as liabilities
for taxes in the Commercial Financial Statements are sufficient for
the payment of all respective taxes (including, without limitation,
federal, state, local, and foreign excise, franchise, property,
payroll, income, capital stock, and sales and use taxes) accrued in
accordance with GAAP and unpaid at the respective dates thereof.
7.13. Material Obligations Paid. Since June 30, 1993,
neither Commercial nor the Bank has incurred or paid any obligation
or liability that would be material to Commercial on a consolidated
basis, except for cancellation of the Deferred Compensation
Agreements described on Schedule 7.9 hereto, the payment of the
outstanding debt of Commercial to Deposit Guaranty Bank (to the
extent paid prior to the Closing) and obligations incurred or paid
in connection with transactions by it in the ordinary course of its
business consistent with its past practices.
7.14. Tax Returns; Payment of Taxes. All federal, state,
local, and foreign tax returns (including, without limitation,
estimated tax returns, withholding tax returns with respect to
employees, and FICA and FUTA returns) required to be filed by or on
behalf of Commercial or the Bank have been timely filed or requests
for extensions have been timely filed and granted and have not
expired for periods ending on or before December 31, 1992, and all
returns filed are complete and accurate to the best information and
belief of their respective managements; all taxes shown on filed
returns have been paid. As of the date hereof, there is no audit,
examination, deficiency or refund litigation or matter in
controversy with respect to any taxes that might result in a
determination materially adverse to Commercial or the Bank except
as reserved against in the Commercial Financial Statements. All
taxes, interest, additions and penalties due with respect to
completed and settled examinations or concluded litigation have
been paid, and Commercial's reserves for bad debts at December 31,
1992, as filed with the Internal Revenue Service were not greater
than the maximum amounts permitted under the provisions of Section
585 of the Internal Revenue Code of 1986, as amended (the "Internal
Revenue Code").
7.15. Loans. To the best knowledge and belief of its
management, each loan reflected as an asset of Commercial in the
Commercial Financial Statements, as of June 30, 1993, or acquired
since that date, is the legal, valid, and binding obligation of the
obligor named therein, enforceable in accordance with its terms,
and no loan is subject to any asserted defense, offset or
counterclaim known to Commercial, except as disclosed in writing to
Hibernia on or prior to the date hereof.
7.16. Allowance for Loan Losses. The allowances for
possible loan losses shown on the balance sheets of Commercial as
of June 30, 1993 are adequate in all material respects under the
requirements of GAAP to provide for possible losses, net of
recoveries, relating to loans previously charged off, on loans
outstanding (including accrued interest receivable) as of June 30,
1993, and each such allowance has been established in accordance
with GAAP.
7.17. Title to Assets; Adequate Insurance Coverage.
Except as described on Schedule 7.17:
(a) As of June 30, 1993, Commercial and the Bank had,
and except with respect to assets disposed of for adequate
consideration in the ordinary course of business since such date,
now have, good and merchantable title to all real property and good
and merchantable title to all other material properties and assets
reflected in the Commercial Financial Statements, free and clear of
all mortgages, liens, pledges, restrictions, security interests,
charges and encumbrances of any nature except for (i) mortgages and
encumbrances which secure indebtedness which is properly reflected
in the Commercial Financial Statements or which secure deposits of
public funds as required by law; (ii) liens for taxes accrued by
not yet payable; (iii) liens arising as a matter of law in the
ordinary course of business with respect to obligations incurred
after June 30, 1993, provided that the obligations secured by such
liens are not delinquent or are being contested in good faith; (iv)
such imperfections of title and encumbrances, if any, as do not
materially detract from the value or materially interfere with the
present use of any of such properties or assets or the potential
sale of any such owned properties or assets; and (v) capital leases
and leases, if any, to third parties for fair and adequate
consideration. Commercial and the Bank own, or have valid
leasehold interests in, all material properties and assets,
tangible or intangible, used in the conduct of its business. Any
real property and other material assets held under lease by
Commercial or the Bank are held under valid, subsisting and
enforceable leases with such exceptions as are not material and do
not interfere with the use made or proposed to be made by Hibernia
in such lease of such property.
(b) With respect to each lease of any real property or
a material amount of personal property to which Commercial or the
Bank is a party, except for financing leases in which Commercial or
the Bank is lessor. (i) such lease is in full force and effect in
accordance with its terms; (ii) all rents and other monetary
amounts that have become due and payable thereunder have been paid;
(ii) there exists no default or event, occurrence, condition or act
which with the giving of notice, the lapse of time or the happening
of any further event, occurrence, condition or act would become a
default under such lease; and (iv) neither the Merger nor the
merger of the Bank and HNB will constitute a default or a cause for
termination or modification of such lease.
(c) Neither Commercial nor the Bank has any legal
obligation, absolute or contingent, to any other person to sell or
otherwise dispose of any substantial part of its assets or to sell
or dispose of any of its assets except in the ordinary course of
business consistent with past practices.
(d) To the knowledge and belief of its management, the
policies of fire, theft, liability and other insurance maintained
with respect to the assets or businesses of Commercial and the Bank
provide adequate coverage against loss and the fidelity bonds in
effect as to which Commercial or the Bank is named insured meet the
applicable standards of the American Bankers Association.
7.18. Employee Plans. To the best of Commercial's
knowledge and belief, it, the Bank, and all "employee benefit
plans," as defined in Section 3(3) of the Employee Retirement
Income Security Act of 1974, as amended ("ERISA"), that cover one
or more employees employed by Commercial or the Bank:
(i) is in compliance with all laws, regulations,
reporting and licensing requirements and orders applicable to its
business or to such plan or any of its employees (because of such
employee's activities on behalf of it), the breach or violation of
which could have a material and adverse effect on such business;
and
(ii) has received no notification from any agency
or department of federal, state or local government or the staff
thereof asserting that any such entity is not in compliance with
any of the statutes, regulations or ordinances that such
governmental authority enforces, or threatening to revoke any
license, franchise, permit or governmental authorization, and is
subject to no agreement with any such governmental authority with
respect to its assets or business.
7.19. Copies of Employee Plans. On or prior to the date
hereof, Commercial has provided Hibernia with true, complete and
accurate copies of all pension, retirement, stock purchase, stock
bonus, stock ownership, stock option, savings, stock appreciation
right or profit-sharing plans, any employment, deferred
compensation, consultant, severance, bonus, or collective
bargaining agreement or group insurance contract, or any other
incentive, welfare, or employee benefit plan or agreement
maintained by it or the Bank for its or the Bank's employees or
former employees.
7.20. Plan Liability. Except for liabilities to the
Pension Benefit Guaranty Corporation pursuant to Section 4007 of
ERISA, all of which have been fully paid, and except for
liabilities to the Internal Revenue Service under section 4971 of
the Internal Revenue Code, all of which have been fully paid,
neither Commercial nor the Bank has any liability to the Pension
Benefit Guaranty Corporation or to the Internal Revenue Service
with respect to any pension plan qualified under Section 401 of the
Internal Revenue Code.
7.21. No Default. Except with regard to the lease of the
Oaklawn branch described on Schedule 7.17 hereto, neither
Commercial nor the Bank is in default in any materi al respect
under any contract, agreement, commitment, arrangement, lease,
insurance policy or other instrument to which it is a party or by
which its respective assets, business or operations may be bound or
affected or under which it or its respective assets, business or
operations receive benefits, and there has not occurred any event
that with the lapse of time or the giving of notice or both would
constitute such a default.
7.22. Minutes. Prior to the date hereof, Commercial has
made available to Hibernia, for inspection pursuant to the terms of
Section 9(e) hereof, the minutes of meetings of Commercial's and
the Bank's Board of Directors and all committees thereof held prior
to the date hereof, which minutes are complete and correct in all
respects and fully and fairly present the deliberations and actions
of such Boards and committees and accurately reflect the business
condition and operations of Commercial and the Bank as of the dates
and for the periods indicated therein.
7.23. Insurance Policies. Attached hereto as Schedule
7.23 is a schedule detailing all policies of fire, theft, public
liability, and other insurance (including without limitation
fidelity bonds and directors and officers liability insurance)
maintained by Commercial or the Bank at the date hereof. Except as
disclosed on Schedule 7.23 hereto, neither Commercial nor the Bank
has received any notice of a premium increase or cancellation with
respect to any of its insurance policies or bonds, and within the
last three years, neither Commercial nor the Bank has been refused
any insurance coverage sought or applied for, and it has no reason
to believe that existing insurance coverage cannot be renewed as
and when the same shall expire, upon terms and conditions as
favorable as those presently in effect, other than possible
increases in premiums or unavailability of coverage that do not
result from any extraordinary loss experience of Commercial or the
Bank.
7.24. Investments. Except for pledges to secure public
or trust deposits, none of the investments reflected in the
Commercial Financial Statements under the heading "Investment
Securities," and none of the investments made by Commercial or the
Bank since June 30, 1993, and none of the assets reflected in the
Commercial Financial Statements under the heading "Cash and Due
From Banks," is subject to any restriction, whether contractual or
statutory, that materially impairs the ability of Commercial or the
Bank freely to dispose of such investment at any time. With
respect to all repurchase agreements to which Commercial or the
Bank is a party, Commercial or the Bank, as the case may be, has a
valid, perfected first lien or security interest in the government
securities or other collateral securing each such repurchase
agreement which equals or exceeds the amount of the debt secured by
such collateral under such agreement.
7.25. Environmental Matters. Except as set forth on
Schedule 7.25, neither Commercial nor the Bank nor, to the
knowledge of Commercial and the Bank, any previous owner or
operator of any properties at any time owned (including any
properties owned as a result of foreclosure of a loan, whether
still owned or subsequently resold) leased, or occupied by
Commercial or the Bank or used by Commercial or the Bank in their
respective business ("Commercial Properties") used, generated,
treated, stored, or disposed of any hazardous waste, toxic
substance, or similar materials on, under, or about Commercial
Properties except in compliance with all applicable federal, state,
and local laws, rules, and regulations pertaining to air and water
quality, hazardous waste, waste disposal, air emissions, and other
environmental matters ("Environmental Laws"). Neither Commercial
nor the Bank has received any notice of noncompliance with
Environmental Laws, applicable laws, orders, or regulations of any
governmental authorities relating to waste generated by any such
party or otherwise or notice that any such party is liable or
responsible for the remediation, removal, or clean-up of any site
relating to Commercial Properties.
8. Representations and Warranties of Hibernia. Hibernia
(and not its directors or officers in their personal capacities)
hereby represents and warrants as follows:
8.1. Recitals. The facts set forth in the preamble to
this Agreement with respect to it are true and correct.
8.2. Organization and Qualification. Hibernia is a
corporation, and HNB is a national banking association, duly
organized, validly existing and in good standing under the laws of
the State of Louisiana and the United States of America,
respectively. Each of Hibernia and its material subsidiaries has
the corporate power and authority to carry on its business as it is
now being conducted and to own, lease and operate its assets,
properties and business, and Hibernia has all requisite power and
authority to execute and deliver this Agreement and perform its
obligations hereunder.
8.3. Shares Fully Paid and Non Assessable. The
outstanding shares of capital stock of Hibernia Corporation and HNB
are validly issued and outstanding, fully paid and nonassessable
(subject, in the case of HNB, to 12 U.S.C. Section 55) and all of
such shares of HNB are owned directly or indirectly by Hibernia
free and clear of all liens, claims, and encumbrances. The shares
of Hibernia Common Stock to be issued in connection with the Merger
pursuant to this Agreement have been duly authorized and, when
issued in accordance with the terms of this Agreement, will be
validly issued, fully paid, and nonassessable.
8.4. Due Authorization. The execution, delivery and
performance of this Agreement have been authorized by Hibernia's
Board of Directors, and, subject to the regulatory and other
approvals required by Section 12 hereof, all corporate acts and
other proceedings required for the due and valid authorization,
execution, delivery and performance by Hibernia of this Agreement
and the consummation of the Merger have been validly and
appropriately taken. Subject to receipt of the regulatory and
other approvals required by Section 12 hereof, this Agreement is a
legal, valid, and binding obligation of Hibernia enforceable
against Hibernia in accordance with its terms, except that
enforcement may be limited by bankruptcy, insolvency, and other
laws of general applicability relating to or affecting creditors'
rights generally and by general equitable principles or principles
of Louisiana law that are similar to equitable principles in
jurisdictions that recognize a distinction between law and equity.
8.5. No Conflicts. Except as disclosed on Schedule 8.5
hereto, the execution and delivery of this Agreement by Hibernia
does not, and the consummation of the transactions contemplated
hereby by it will not, constitute (i) a breach or violation of, or
a default under, any law, rule, or regulation or any judgment,
decree, order, governmental permit or license, or agreement,
indenture, or instrument of Hibernia or its subsidiaries or by
which Hibernia or any of its subsidiaries is subject, which breach,
violation or default would have a material and adverse effect on
the financial condition, properties, businesses, or results of
operations of Hibernia and its subsidiaries taken as a whole or on
the transactions contemplated hereby, (ii) to the best of the
knowledge of Hibernia's management, a breach or violation of, or a
default under, any law, rule, or regulation or any judgment,
decree, order, governmental permit or license, or agreement,
indenture, or instrument of Hibernia or its subsidiaries or to
which Hibernia or any of its subsidiaries is subject, or (iii) a
breach or violation of, or a default under the Articles of
Incorporation or Association or Bylaws of Hibernia, or of its
subsidiaries, and the consummation of the transactions contemplated
hereby will not require any consent or approval under any such law,
rule, regulation, judgment, decree, order, governmental permit or
license or the consent or approval of any other party to any such
agreement, indenture, or instrument, other than any required
approvals of shareholders and applicable regulatory authorities.
8.6. Reports of Hibernia. As of their respective dates,
none of its Annual Report on Form 10-K for the fiscal year ended
December 31, 1992, its Quarterly Reports on Form 10-Q for the
periods ended March 31 and June 30, 1993, and its proxy statement
for its 1993 annual meeting of shareholders, each in the form
(including exhibits) filed with the Securities and Exchange
Commission (the "SEC") and its quarterly report to shareholders
for the period ended June 30, 1993 (collectively, the "Hibernia
Reports"), contained any untrue statement of a material fact or
omitted to state a material fact required to be stated therein or
necessary to make the statements made therein, in light of the
circumstances under which they were made, not misleading. There is
no fact or circumstance that, individually or in the aggregate,
materially and adversely has affected or is so affecting, or, in
the opinion of the executive officers of Hibernia, may reasonably
be expected in the future to so affect, the business, financial
condition, net worth, properties, prospects or results of
operations of Hibernia and its subsidiaries, taken as a whole, that
has not been disclosed in the Hibernia Reports. Each of the
balance sheets in or incorporated by reference into the Hibernia
Reports (including the related notes) fairly presents the financial
position of the entity or entities to which it relates as of its
date and each of the statements of income and stockholders' equity
and statement of cash flows or equivalent statements in the
Hibernia Reports (including any related notes and schedules) fairly
presents the results of operations and changes in stockholders'
equity, as the case may be, of the entity or entities to which it
relates for the periods set forth therein (subject, in the case of
unaudited statements, to year-end audit adjustments that will not
be material in amount or effect), in each case in accordance with
GAAP consistently applied during the periods involved, except as
may be noted therein. Copies of the Hibernia Reports have been
furnished to Commercial on or before the date hereof.
8.7. No Material Adverse Change. Since June 30, 1993,
there has been no event or condition of any character (whether
actual, or to the knowledge of Hibernia or HNB, threatened or
contemplated) that has had or can reasonably be anticipated to
have, or that, if concluded or sustained adversely to Hibernia,
would reasonably be anticipated to have, a material adverse effect
on the financial condition, results of operations, business or
prospects of Hibernia or HNB, excluding changes in laws or
regulations that affect banking institutions generally.
8.8. Loans. To the best knowledge and belief of its
management, and management of HNB, each loan reflected as an asset
of Hibernia in the unaudited consolidated balance sheet contained
in Hibernia's quarterly report to shareholders for the period ended
June 30, 1993, or acquired since that date, is the legal, valid and
binding obligation of the obligor named therein, enforceable in
accordance with its terms, and no loan is subject to any asserted
defense, offset, or counterclaim known to Hibernia, except as
disclosed on Schedule 8.8 hereto.
8.9. Litigation. Except as disclosed on Schedule 8.9
hereto, no litigation, proceeding or controversy before any court
or governmental agency is pending that in the opinion of its
management is likely to have a material and adverse effect on the
business, results of operations or financial condition of Hibernia
and its subsidiaries taken as a whole, and, to the best of its
knowledge, no such litigation, proceeding or controversy has been
threatened or is contemplated. Except as disclosed on Schedule
8.9, neither Hibernia nor HNB is subject to any written agreement,
memorandum or order with or by any bank or bank holding company
regulatory authority that materially restricts its operations or
requires any material actions.
8.10. Contingent Liabilities. Except as disclosed on
Schedule 8.10 hereto or reflected in the Hibernia Reports and
except in the case of Hibernia's subsidiaries for unfunded loan
commitments made in the ordinary course of business consistent with
past practices, as of June 30, 1993, neither Hibernia nor any of
its subsidiaries had any obligation or liability (contingent or
otherwise) that was material, or that when combined with all
similar obligations or liabilities would have been material, to
Hibernia and its subsidiaries taken as a whole.
8.11. Payment of Obligations. Between June 30, 1993 and
the date hereof, neither Hibernia nor HNB has incurred or paid any
obligation or liability that would be material to Hibernia on a
consolidated basis, except for obligations incurred or paid in
connection with transactions by it in the ordinary course of its
business consistent with its past practices and except as reflected
in the Hibernia Financial Statements.
8.12. Taxes. All federal, state, local and foreign tax
returns (including, without limitation, estimated tax returns,
withholding tax returns with respect to employees, and FICA and
FUTA returns) required to be filed by or on behalf of Hibernia and
HNB have been timely filed or requests for extensions have been
timely filed, granted and have not expired for periods ending on or
before June 30, 1993, and all returns filed are complete and
accurate to the best information and belief of their respective
senior management. All taxes shown as shown on filed returns have
been paid. Except as set forth on Schedule 8.12 hereto, as of the
date hereof, there is no audit, examination, deficiency or refund
litigation or matter in controversy with respect to any taxes that
might result in a determination materially adverse to Hibernia or
HNB. All taxes, interest, additions and penalties due with respect
to completed and settled examinations or concluded litigation have
been paid. Hibernia's reserve for bad debts at December 31, 1992,
as filed with the Internal Revenue Service, were not greater than
the maximum amounts permitted under the provisions of Section 585
of the Internal Revenue Code.
8.13. Allowances for Possible Loan Losses. The
allowances for possible loan losses shown on the balance sheets of
Hibernia contained in the Hibernia reports referred to in Sections
8.6 and 9.5(i) hereof, as of the respective dates thereof, were or
will be, as the case may be, adequate in all material respects
under the requirements of GAAP to provide for possible loan losses,
net of recoveries relating to loans previously charged off, on
loans outstanding (including accrued interest receivable) as of the
respect dates of such balance sheets and each such allowance has
been or will have been established in accordance with GAAP. To the
knowledge of Hibernia's and HNB's management, Hibernia is not
likely to be required to materially increase the provision for loan
losses between the date hereof and the Effective Date.
8.14. Benefit Plans. To the knowledge and belief of
Hibernia's senior management, Hibernia, each of its subsidiaries
and all "employee benefit plans," as defined in Section 3(3) of
ERISA, that cover one or more employees employed by Hibernia or any
of its subsidiaries:
(i) is in compliance with all laws, regulations,
reporting and licensing requirements and orders applicable to its
business or to such plan or any of its employees (because such
employee's activities on behalf of it), the breach or violation of
which could have a material and adverse effect on such business;
and
(ii) has received no notification from any agency
or department of federal, state or local government or the staff
thereof asserting that any such entity is not in compliance with
any of the statutes, regulations or ordinances that such
governmental authority enforces, or threatening to revoke any
license, franchise or permit or governmental authorization, and is
subject to no agreement or written understanding with any such
governmental authorities with respect to its assets or business.
9. Agreements and Covenants. Hibernia and Commercial each
hereby agrees and covenants to the other that:
9.1. Shareholder Approvals. If required by applicable
law, this Agreement shall be submitted to its respective
shareholders at a special meeting called and held in accordance
with applicable provisions of law (to be scheduled to the extent
possible for the date of the shareholders' meeting for the other
party hereto, if any) at which its shareholders shall be asked to
consider and vote upon this Agreement and the transactions
contemplated hereby.
9.2. Actions Necessary to Complete Merger. It shall use
its best efforts in good faith to take or cause to be taken all
action necessary or desirable under this Agreement on its part as
promptly as practicable so as to permit the consummation of this
Agreement at the earliest possible date (including obtaining the
consent or approval of each governmental authority and individual,
partnership, corporation, association, or any other form of
business or professional entity whose consent or approval is
required for the consummation of the transactions contemplated
hereby, requesting the delivery of appropriate opinions and letters
from its counsel and recommending that this Agreement be approved
by its shareholders) and cooperate fully with the other party
hereto to that end; provided, however, that neither party shall be
obligated to take or cause to be taken any action which is or
creates a material burden on such party, except to the extent such
actions are reasonably anticipated to be required in order to
effect the Merger.
9.3. Preparation of Registration Statement and Proxy
Statement. It shall prepare as promptly as practicable jointly
with the other party hereto a proxy statement to be mailed to the
shareholders of each party the shareholders of which are to vote
upon this Agreement in connection with the transactions
contemplated hereby and to be part of a registration statement (the
"Registration Statement") to be filed by Hibernia with the SEC
pursuant to the Securities Act of 1933, as amended (the "1933 Act")
with respect to the shares to be issued in the Merger. When the
Registration Statement or any post-effective amendment thereto
shall become effective, and at all times subsequent to such
effectiveness, up to and including the time of the last shareholder
meeting with respect to the transactions contemplated hereby, such
Registration Statement and all amendments or supplements thereto,
with respect to all information set forth therein furnished or to
be furnished by Hibernia relating to Hibernia and by Commercial
relating to Commercial, (i) will comply in all material respects
with the provisions of the 1933 Act and the rules and regulations
of the SEC thereunder and (ii) will not contain any untrue
statement of a material fact or omit to state a material fact
required to be stated therein or necessary to make the statements
contained therein not misleading. Hibernia will advise Commercial
promptly after it receives notice thereof of the time when the
Registration Statement has become effective or any supplement or
amendment has been filed, of the issuance of any stop order, of the
suspension of the qualification of the Hibernia Common Stock
issuable in connection with the Merger for offering or sale in any
jurisdiction, of the initiation or threat of any proceeding for any
such purpose, or of any request by the SEC for the amendment or
supplement of the Registration Statement or for additional
information.
9.4. Press Releases and Public Statements. Unless
approved by Hibernia in advance, Commercial will not issue any
press release or written statement for general circulation relating
to the transactions contemplated hereby, except as otherwise
required by law. The parties will cooperate in any public
announcements directly related to the Merger; provided, however,
that, in the event Hibernia determines to file a current report on
Form 8-K that discloses only the substantive facts of a previously
released press release, such filing may be made without prior
consultation with Commercial so long as Commercial is furnished
with a copy of such report within a reasonable time after its
filing.
9.5. Material Developments; Access to Information.
(i) In order to afford Commercial access to such
information as it may reasonably deem necessary to perform its due
diligence review with respect to Hibernia and its assets in
connection with the Merger, Hibernia shall (and shall cause HNB
to), (A) upon reasonable notice, afford Commercial and its
officers, employees, counsel, accountants and other authorized
representatives, during normal business hours throughout the period
prior to the Effective Date and to the extent consistent with
applicable law, access to its premises, properties, books and
records, and to furnish Commercial and such representatives with
such financial and operating data and other information of any kind
respecting its business and properties as Commercial shall from
time to time reasonably request to perform such review, (B)
furnish Commercial with copies of all reports filed by Hibernia
with the Securities and Exchange Commission ("SEC") throughout the
period after the date hereof prior to the Effective Date promptly
after such reports are so filed, and (C) promptly advise Commercial
of the occurrence before the Effective Date of any event or
condition of any character (whether actual or to the knowledge of
Hibernia, threatened or contemplated) that has had or can
reasonably be anticipated to have, or that, if concluded or
sustained adversely to Hibernia, would reasonably be anticipated to
have, a material adverse effect on the financial condition, results
of operations, business or prospects of its consolidated group as
a whole.
(ii) In order to afford Hibernia access to such
information as it may reasonably deem necessary to perform any due
diligence review with respect to the assets of Commercial to be
acquired as a result of the Merger, Commercial shall (and shall
cause the Bank to), upon reasonable notice, afford Hibernia and its
officers, employees, counsel, accountants, and other authorized
representatives access, during normal business hours throughout the
period prior to the Effective Date, to all of its and the Bank's
properties, books, contracts, commitments, loan files, litigation
files, and records (including, but not limited to, the minutes of
the Boards of Directors of Commercial and the Bank and all
committees thereof), and it shall (and shall cause the Bank to),
upon reasonable notice and to the extent consistent with applicable
law, furnish promptly to Hibernia such information as Hibernia may
reasonably request to perform such review.
(iii) No investigation pursuant to this Section 9.5
shall affect or be deemed to modify any representation or warranty
made by, or the conditions to the obligations to consummate the
Merger of, either party to this Agreement.
9.6. Prohibited Negotiations. Prior to the Effective
Date, neither Commercial nor the Bank shall solicit or encourage
inquiries or proposals with respect to, furnish any information
relating to, or participate in any negotiations or discussions
concerning, any acquisition or purchase of all or a substantial
portion of the assets of, or of a substantial equity interest in,
Commercial or the Bank or any business combination with Commercial
or the Bank other than as contemplated by this Agreement.
Commercial shall instruct each officer, director, agent, or
affiliate of it or the Bank to refrain from doing any of the above,
and Commercial will notify Hibernia promptly if any such inquiries
or proposals are received by, any such information is requested
from, or any such negotiations or discussions are sought to be
initiated with, Commercial; provided, however, that nothing
contained in this section shall be deemed to prohibit any officer
or director of Commercial or the Bank from taking any action that,
in the opinion of counsel to Commercial or the Bank, a copy of
which opinion shall be furnished to Hibernia upon its request, is
required by applicable law.
9.7. Affiliates. Prior to the Closing Date (as defined
in Section 14 hereof), Commercial shall deliver to Hibernia a
letter identifying all persons whom it believes to be "affiliates"
of Commercial for purposes of Rule 145(c) or Rule 144 (as
applicable) under the 1933 Act ("Affiliates"). Commercial shall
use its best efforts to cause each person so identified to deliver
to Hibernia prior to the Effective Date a written agreement in
substantially the form of Exhibit 9.7 hereto providing, among other
things,that such person will not dispose of Hibernia Common Stock
received in the Merger except in compliance with the 1933 Act and
the rules and regulations thereunder and except in accordance with
Section 201.01 of the SEC's Codification of Financial Reporting
Policies; provided, however, that Commercial shall have no such
obligation to use its best efforts to cause any such identified
person to deliver to Hibernia such agreement if such person may not
lawfully execute such agreement.
9.8. Adjustment for Changes in Outstanding Shares. In
the event that prior to the Effective Date the outstanding shares
of Hibernia Common Stock shall have been increased, decreased, or
changed into or exchanged for a different number or kind of shares
or securities by reorganization, recapitalization,
reclassification, stock dividend, stock split, or other like
changes in the Hibernia's capitalization, then an appropriate and
proportionate adjustment shall be made in the number and kind of
shares of Hibernia Common Stock to be thereafter delivered pursuant
to Section 3.1 hereof.
9.9. Accounting Treatment. It shall use its best
efforts to cause the Merger to qualify for pooling-of-interests
accounting treatment to the extent factors affecting such treatment
are within its control.
9.10. Cooperation in Bank Merger. Promptly upon request
by Hibernia, Commercial shall, and it shall cause the Bank to, take
any and all necessary or appropriate actions to cause the Bank to
become merged with and into HNB effective as of, or as soon as
practicable after, the Effective Date.
9.11. Adoption of Accounting Policies. After the
satisfaction or waiver of all conditions to the Closing set forth
in Section 12 of this Agreement and in any event prior to the
Effective Date (unless this Agreement is terminated pursuant to
Section 13 hereof), Commercial shall, and it shall cause the Bank
to, take any and all necessary or appropriate actions to adopt all
Hibernia accounting procedures and policies (including without
limitation those policies pertaining to charged-off and non-accrual
assets); provided, however, that no such action taken by
Commercial or the Bank at the request of Hibernia or HNB pursuant
to this Section shall be deemed to be, or be deemed to cause, a
breach of any representation or warranty made by Commercial herein.
9.12. Indemnification of Directors and Officers of
Commercial and the Bank.
(a) From and after the Effective Date of the Merger,
Hibernia agrees to indemnify and hold harmless each person who, as
of the date immediately prior to the Closing Date, served as an
officer or director of Commercial or the Bank (an "Indemnified
Person") from and against all damages, liabilities, judgments and
claims (and related expenses including, but not limited to,
attorney's fees and amounts paid in settlement) based upon or
arising from his capacity as an officer or director of Commercial
or the Bank, to the same extent as he would have been indemnified
under the Articles of Incorporation and/or Bylaws of Hibernia, as
such documents were in effect on the date of this Agreement as if
he were an officer or director of Hibernia at all relevant times;
provided, however, that the indemnification provided by this
Section shall not apply to any claim against an Indemnified Person
if such Indemnified Person knew or should have known of the
existence of the claim and failed to make a good faith effort to
require Commercial or the Bank, as the case may be, to notify its
director and officer liability insurance carrier of the existence
of such claim prior to the Closing Date.
(b) The rights granted to the Indemnified Persons
hereby shall be contractual rights inuring to the benefit of all
Indemnified Persons and shall survive this Agreement and any
merger, consolidation or reorganization of Hibernia or HNB.
(c) The rights to indemnification granted by this
subsection 9.12 are subject to the following limitations: (i) the
total aggregate indemnification to be provided by Hibernia pursuant
to subsection 9.12(a) shall not exceed, as to all of the
Indemnified Persons as a group, the sum of $5,000,000, and Hibernia
shall have no responsibility to any Indemnified person for the
manner in which such sum is allocated among that group (but nothing
in this subsection is intended to prohibit the Indemnified Persons
from seeking reallocation among themselves); (ii) a director or
officer who would otherwise be an Indemnified Person under this
subsection 9.12 shall not be entitled to the benefits hereof unless
such director or officer has executed a Joinder Agreement (the
"Joinder Agreement") in the form of Exhibit 9.12 hereto; and (iii)
amounts otherwise required to be paid by Hibernia to an Indemnified
Person pursuant to this subsection 9.12 shall be reduced by any
amounts that such Indemnified Person recovers by virtue of the
claim for which other employees and officers indemnification is
sought.
(d) Hibernia agrees that the $5,000,000 indemnification
limit set forth in paragraph (c) of this Section 9.12 shall not
apply to any damages, liabilities, judgments and claims (and
related expenses, including but not limited to attorney's fees and
amounts paid in settlement) insofar as they arise out of or are
based upon the matters for which indemnification is provided in
Section 11.2 hereof.
9.13. Covenant to Close. At such time as is deemed
appropriate by the parties hereto or as otherwise set forth in this
Agreement, and upon satisfaction or waiver of each of the
conditions to Closing of the Merger, the parties agree to take such
actions as are reasonably necessary or appropriate to effect the
Closing and the Merger.
9.14. Cooperation in Rule 144 Transfers. Hibernia agrees
to use its best efforts to file in a timely manner all materials
required to be filed pursuant to Section 13, 14, or 15(d) of the
Exchange Act, or the rules and regulations promulgated thereunder,
so as to continue the availability of Rule 144 for sales of
Hibernia Common Stock. In the event of any proposed sale by any
former shareholder of Commercial who receives shares of Hibernia
Common Stock by reason of the Merger, Hibernia covenants to use its
best efforts to cooperate with such shareholder so as to enable
such sale to be made in accordance with Rule 144, the requirements
of Hibernia's transfer agent and the reasonable requirements of any
broker through which such a sale is proposed to be executed,
including, but not limited to, furnishing at its expense an opinion
of counsel or other statement satisfactory to the transfer agent to
the effect that the shares may be transferred, to the extent it is
able to furnish such an opinion.
10. Permits, Consents and Approvals. As promptly as
practicable after the date hereof:
(a) Hibernia shall submit an application to the Board
of Governors of the Federal Reserve System (the "Federal Reserve
Board") for approval of the transactions contemplated hereby in
accordance with the provisions of the Bank Holding Company Act;
(b) Hibernia shall submit an application to the
Comptroller of the Currency (the "Comptroller") for approval of the
transactions contemplated hereby in accordance with the provisions
of the Bank Merger Act;
(c) Commercial shall endeavor to have its Affiliates
execute a written agreement in substantially the form of Exhibit
9.7 hereto; provided, however, that Commercial shall have no such
obligation prior to the receipt by the Board of Directors of
Commercial of the Fairness Opinion; and
(d) Commercial shall endeavor to have each of the
directors of Commercial and the Bank execute a Non-Competition
Agreement in substantially the form of Exhibit 10(d) hereto;
provided, however, that Commercial shall have no such obligation
prior to the receipt by the Board of Directors of Commercial of the
Fairness Opinion.
11. Confidentiality; Hold Harmless; Restriction on
Acquisitions.
11.1. Confidentiality. The parties hereto acknowledge
that each of them or their representatives or agents has engaged
in, and may continue to engage in, certain due diligence reviews
and examinations with respect to the other and that, in the course
of such reviews and examination, has received or may receive in the
future confidential or proprietary information. Hibernia and
Commercial agree, on behalf of themselves, their respective
officers, directors, employees, representatives and agents, that,
for a period of five years after the date hereof, they will not use
any information obtained pursuant to due diligence investigations
for any purpose unrelated to the consummation of the transactions
contemplated by this Agreement, and, if the Merger is not
consummated, will hold all such information and documents in
confidence unless and until such time as such information or
documents otherwise become publicly available or as it is advised
by counsel that any such information or document is required by law
to be disclosed, in which event the party required to make such
disclosure shall advise and consult with the other party reasonably
in advance of such disclosure regarding the information proposed to
be disclosed. In the event of the termination of this Agreement,
Hibernia and Commercial shall, promptly upon request by the other
party, either destroy or return any documents so obtained.
11.2. Hold Harmless. Hibernia will indemnify and hold
harmless Commercial, each of its directors and officers and each
person, if any who controls Commercial or the Bank within the
meaning of the 1933 Act against any losses, claims, damages or
liabilities, joint, several or solidary, to which they or any of
them may become subject, under the 1933 Act or otherwise, insofar
as such losses, claims, damages or liabilities (or actions in
respect thereof) arise out of or are based upon an untrue statement
or alleged untrue statement of a material fact contained in the
Registration Statement, or in any amendment or supplement thereto,
or arising out of or based upon the omission or alleged omission to
state therein a material fact required to be stated therein or
necessary to make the statements therein not misleading, and will
reimburse each such person for any legal or other expenses
reasonably incurred by such person in connection with investigating
or defending any such action or claim; provided, however, that
Hibernia shall not be liable in any such case to the extent that
any such loss, claim, damage or liability (or action in respect
thereof) arises out of or is based upon any untrue statement or
alleged untrue statement or omission or alleged omission made in
the Registration Statement or any such amendment or supplement in
reliance upon and in conformity with information furnished to
Hibernia by Commercial or the Bank for use therein. Promptly after
receipt by an indemnified party hereunder of notice of the
commencement of any action, such indemnified party shall, if a
claim in respect thereof is to be made against Hibernia under this
Section, notify Hibernia in writing of the commencement thereof.
In case any such action shall be brought against any indemnified
party and it shall notify Hibernia of the commencement thereof,
Hibernia shall be entitled to participate therein, and to the
extent that it shall wish, to assume the defense thereof, with
counsel satisfactory to such indemnified party, and, after notice
from Hibernia to such indemnified party of its election to so
assume the defense thereof, Hibernia shall not be liable to such
indemnified party under this Section 11.2 for any legal expenses of
other counsel or any other expenses subsequently incurred by such
indemnified party.
11.3. Restriction on Acquisitions. Prior to Closing, or
until termination of this Agreement, Hibernia shall not, directly
or indirectly, without the consent of Commercial, acquire, or enter
into agreements to acquire, any financial institution in Abbeville,
Baldwin, Centerville, Franklin or New Iberia, Louisiana (other than
the Bank or St. Mary), whether by merger, consolidation, purchase
or otherwise. If, prior to termination of this Agreement or prior
to the Closing, Hibernia enters into a St. Mary Agreement (as
defined in Section 3.8 hereof) and if, as a result of a St. Mary
Agreement, the Merger is not consummated, then Hibernia shall pay
to Commercial on demand the sum of $500,000 as a "break-up fee."
For purposes of this Section 11.3, "financial institution" shall
mean any bank or savings and loan holding company, or any federal
or state chartered bank, savings bank, thrift, homestead
association, savings association, savings and loan association,
cooperative bank or other similar financial institution.
12. Conditions. The consummation of the Merger is
conditioned upon:
12.1. Shareholder Approval; Dissenters. Approval of this
Agreement by the required vote of shareholders of Commercial and
exercise and perfection of dissenters' rights pursuant to Section
12: 131 of the LBCL by holders of Commercial Common Stock holding
in the aggregate no more than 10% of the Commercial Common Stock
outstanding on the Closing Date.
12.2. Federal Reserve Board and OCC Approvals.
Procurement by Hibernia of the approval of the Federal Reserve
Board and the Comptroller of the Merger and any and all other
transactions contemplated hereby.
12.3. Federal Reserve Bank Approval. Procurement by
Hibernia of the approval of the Federal Reserve Bank of Atlanta, if
such approval is required under the terms of the Agreement between
Hibernia and the Federal Reserve Bank dated December 23, 1991.
12.4. Other Approvals. Procurement of all other consents
and approvals and satisfaction of all other requirements prescribed
by law that are necessary to the consummation of the transactions
contemplated by this Agreement, including, but not limited to, the
consent (if required) of the parties to the Registration Rights
Agreement dated May 27, 1992 among Hibernia and certain other
parties who hold "Registrable Securities" (as therein defined) to
the issuance of the Hibernia common stock provided for in this
Agreement, whether by consent, waiver or amendment of the
Registration Rights Agreement.
12.5. No Restraining Action. No litigation or proceeding
initiated by any governmental authority shall be pending before any
court or agency that shall present a claim to restrain, prohibit or
invalidate the transactions contemplated hereby and neither
Hibernia nor Commercial shall be prohibited by any order of any
court or other governmental authority from consummating the
transactions provided for in this Agreement.
12.6. Opinion of Hibernia Counsel. Commercial and its
directors shall have received an opinion, dated the Closing Date,
of counsel for Hibernia, in form and substance satisfactory to
Commercial, as to such matters as Commercial may reasonably request
with respect to the transactions contemplated hereby.
12.7. Opinion of Commercial Counsel. Hibernia, its
directors and its officers who sign the Registration Statement
shall have received an opinion, dated the Closing Date, of
Breazeale, Sachse, & Wilson, counsel for Commercial, in form and
substance satisfactory to Hibernia, which shall cover such matters
as Hibernia may reasonably request with respect to the transactions
contemplated hereby.
12.8. Representations, Warranties and Agreements of
Commercial. Each of the representations, warranties, and
agreements of Commercial contained herein in all material respects
shall be true on, or complied with by, the Closing Date as if made
on such date (or on the date when made in the case of any
representation or warranty which specifically relates to an earlier
date) and Hibernia shall have received a certificate signed by the
Chairman of the Board and the President of Commercial, dated the
Closing Date, to such effect; Commercial shall have furnished to
Hibernia such other certificates as Hibernia shall reasonably
request in connection with the Closing (as defined in Section 14
hereof), evidencing compliance with the terms hereof and its
status, business and financial condition. Commercial shall have
furnished Hibernia with such further documents or other materials
as Hibernia shall have reasonably requested in connection with the
transactions contemplated hereby.
12.9. Representations, Warranties and Agreements of
Hibernia. Each of the representations, warranties and agreements
of Hibernia contained herein in all material respects shall be true
on, or complied with by, the Closing Date as if made on such date
(or the date when made in the case of any representations or
warranty which specifically relates to an earlier date) and
Commercial shall have received a certificate signed by the Chief
Executive Officer and the Treasurer of Hibernia, dated the Closing
Date, to such effect; Hibernia shall have furnished to Commercial
such other certificates as Commercial shall reasonably request in
connection with the Closing, evidencing compliance with the terms
hereof and its status, business and financial condition. Hibernia
shall have furnished Commercial with such further documents or
other materials as Commercial shall have reasonably requested in
connection with the transactions contemplated hereby.
12.10. Effective Registration Statement. The
Registration Statement shall have become effective and no stop
order suspending the effectiveness of the Registration Statement
shall have been issued and no proceedings for that purpose shall
have been initiated or threatened by the SEC and Commercial shall
have received a certificate to such effect from the officer of
Hibernia designated as its agent for service on the cover page of
the Registration Statement (which certificate may be to the
knowledge of such officer).
12.11. Blue Sky. Hibernia shall have received all state
securities laws and "blue sky" permits and other authorizations
necessary to consummate the transactions contemplated hereby.
12.12. Tax Ruling. Commercial shall have received an
opinion of a nationally recognized public accounting firm
satisfactory to Hibernia, which opinion shall be satisfactory in
form and substance to Hibernia and Commercial, to the effect that
the Merger when consummated in accordance with the terms hereof
will constitute a reorganization within the meaning of Section
368(a) of the Internal Revenue Code, and that the exchange of
Commercial Common Stock to the extent exchanged for Hibernia Common
Stock will not give rise to gain or loss to the shareholders of
Commercial with respect to such exchange and that the Louisiana
income tax treatment to the shareholders of Commercial will be
substantially the same as the federal income tax treatment to the
shareholders of Commercial.
12.13. Termination of Deferred Compensation Agreements.
Commercial and the Bank shall have terminated the deferred
compensation agreements listed on Schedule 7.9 hereto on or before
the Closing Date.
12.14. Listing on New York Stock Exchange. The shares of
Hibernia Common Stock issuable to the holders of Commercial Common
Stock in the Merger shall have been approved for listing on the New
York Stock Exchange, Inc. on or before the Closing Date, subject to
official notice of issuance.
12.15. Fairness Opinion. Commercial shall have received
a letter from Bank Advisory Group dated within five days of the
scheduled date of mailing of the Proxy Statement to its
shareholders, and updated to within five days of the Closing Date
to the effect that the terms of the Merger are fair to its
shareholders from a financial point of view.
12.16. Assertion of Conditions. A failure to satisfy any
of the requirements set forth in Section 12.6, 12.9 or 12.15 shall
only constitute conditions to consummation of the Merger if
asserted by Commercial and a failure to satisfy any of the
requirements set forth in Section 12.7 or 12.8 shall only
constitute conditions to consummation of the Merger if asserted by
Hibernia.
13. Termination. This Agreement may be terminated
prior to the Closing Date, either before or after its approval by
the shareholders of the parties hereto, in any of the following
events:
13.1. Mutual Consent. By the mutual consent of the
parties hereto, if the Board of Directors of each party so
determines by vote of a majority of the members of its entire
Board.
13.2. Breach of Representation, Warranty or Covenant.
By either party hereto, in the event of a breach by the other party
(a) of any covenant or agreement contained herein or (b) of any
representation or warranty herein, if (i) the facts constituting
such breach reflect a material and adverse change in the financial
condition, results of operations, business, or prospects taken as
a whole, of the breaching party, which in either case cannot be or
is not cured within 60 days after written notice of such breach is
given to the party committing such breach, or (ii) in the event of
a breach of a warranty or covenant, such breach results in a
material increase in the cost of the non-breaching party's
performance of this Agreement.
13.3. Passage of Time; Inability to Satisfy Conditions.
By either party hereto, in the event that (i) the Merger is not
consummated by July 1, 1994, or (ii) any condition to Closing
cannot be satisfied by July 1, 1994 and will not be waived by the
party or parties entitled to waive it.
13.4. Failure to Obtain Regulatory Approval. By either
party hereto, at any time after the Federal Reserve Board, the
Federal Reserve Bank or the Comptroller has denied any application
for any approval or clearance required to be obtained as a
condition to the consummation of the Merger and the time period for
all appeals or requests for reconsideration thereof has run.
13.5. Failure to Obtain Shareholder Approval. By either
party hereto, if the Merger is not approved by the required vote of
shareholders of Commercial.
13.6. Dissenters. By Hibernia, if holders of more than
10 percent of the outstanding Commercial Common Stock exercise
statutory rights of dissent and appraisal pursuant to Part XIII of
the LBCL.
13.7. Material Adverse Change. By Commercial, if a
material adverse change as described in Section 8.7 of this
Agreement occurs, and by Hibernia, if a material adverse change as
described in Section 7.7 hereof occurs, after the date hereof and
prior to the Closing.
13.8. Termination of Deferred Compensation Agreements.
By Hibernia, if Commercial and the Bank have not terminated the
deferred compensation agreements listed on Schedule 7.9 hereto or,
if terminated, the termination of such agreements shall have
resulted in after-tax costs to Commercial or the Bank in excess of
$600,000 in the aggregate.
13.9. Pooling-of-Interests Accounting Treatment. By
Hibernia, in the event that Hibernia shall determine that the facts
and circumstances surrounding the Merger prohibit or materially
jeopardize the treatment of the Merger as a pooling-of-interests
for accounting purposes.
13.10. Fairness Opinion. By Commercial, if it shall not
have received a letter from Bank Advisory Group dated within five
days of the scheduled date of mailing of its proxy statement to its
shareholders, and updated to within five days of the Closing Date,
to the effect that the terms of the Merger are fair to its
shareholders from a financial point of view.
14. Closing and Effective Date. The closing of the Merger
(the "Closing") shall take place at the office of Hibernia at 313
Carondelet Street, New Orleans, Louisiana, at 11:00 a.m. local
time, or at such other place or time as shall be mutually agreeable
to the parties hereto, on the first business day occurring after
the last to occur of: (i) November 29, 1993; (ii) the date that
falls 30 days after the date of the order of the Federal Reserve
Board approving the Merger pursuant to the Bank Holding Company
Act; (iii) the date that falls 30 days after the date of the order
of the Comptroller approving the merger of the Bank with and into
HNB pursuant to the Bank Merger Act; and (iv) the date that falls
5 days after the date on which the last meeting of shareholders
called to approve this Agreement is held; or such later date within
60 days of such date as may be agreed upon between the parties
hereto (the date and time of the Closing being referred to herein
as the "Closing Date"). Immediately upon consummation of the
Closing, or on such other later date as the parties hereto may
agree, the Merger Agreement shall be certified, executed,
acknowledged and delivered to the Secretary of State of the State
of Louisiana (the "Secretary") for filing pursuant to and in
accordance with the provisions of Section 12:112 of the LBCL. The
Merger shall become effective as of the date and time of issuance
by the Secretary of a certificate of merger relating to the Merger
(such date and time being referred to herein as the "Effective
Date").
15. Survival and Termination of Representations, Warranties
and Covenants.
15.1. Except as otherwise provided in this Section 15,
the representations, warranties and covenants contained in this
Agreement shall terminate as of the earlier of the Effective Date
or the termination of this Agreement. Upon termination of such
representations, warranties and covenants, such provisions shall be
of no further force or effect, and no party hereto shall have any
legal right to redress, whether for breach of contract or
otherwise, as a result of a breach of any such provision.
15.2. The provisions and agreements set forth in
Sections 3, 5, 9.12, 9.14 and 11 and the last sentence of Section
8.3 hereof shall survive the Closing, if the Closing occurs, for
the benefit of the shareholders, directors and officers of
Commercial who are the intended beneficiaries of such provisions.
15.3. The provisions of Section 11 and liabilities for
a breach of the provisions of Sections 9.2 or 9.13 shall survive
the termination of this Agreement if this Agreement terminates
without the Closing or the Merger having occurred, in which event
liability for a breach of Section 9.2 or Section 9.13 shall survive
the termination of the Agreement for a period of 180 days following
the date on which the Agreement terminates. Nevertheless, no party
to this Agreement shall have a legal right to redress or cause of
action for a breach of Section 9.2 except in those circumstances in
which such breach directly resulted in the termination of the
Agreement.
15.4. In consideration of the mutual benefits and
agreements contained in this Agreement, each of the parties hereto,
on behalf of itself and its successors and assigns, hereby
irrevocably waives any right or cause of action which otherwise
would survive in the absence of this Section 15.
16. Amendment; Waivers. To the extent permitted under
applicable law, prior to the Closing Date any provision of this
Agreement may be amended or modified at any time, either before or
after its approval by the shareholders of the parties hereto, (i)
by an agreement in writing among the parties hereto approved by
their respective Boards of Directors and executed in the same
manner as this Agreement, and (ii) as provided in Section 12:112 of
the LBCL. Except with respect to any required shareholder or
regulatory approval, each party hereto, by written instrument
signed by a duly authorized officer of such party, may at any time
(whether before or after approval of this Agreement by the
shareholders of Hibernia or Commercial) extend the time for the
performance of any of the obligations or other acts of the other
party hereto and may waive (i) any inaccuracies of the other party
in the representations or warranties contained in this agreement or
any document delivered pursuant hereto, (ii) compliance with any of
the covenants, undertakings, or agreements of the other party, or
satisfaction of any of the conditions precedent to its obligations,
contained herein or (iii) the performance by the other party of any
of its obligations set out herein or therein; provided that no such
waiver executed after approval of this Agreement by the
shareholders of Hibernia or Commercial shall change the number of
shares of Hibernia Common Stock into which shares of Commercial
Common Stock will be converted by the Merger.
17. Execution in Counterparts. This Agreement may be
executed in counterparts, each of which shall be deemed to
constitute an original. Each such counterpart shall become
effective when one counterpart has been signed by each party
hereto.
18. Governing Law. This Agreement shall be governed by, and
interpreted in accordance with, the laws of the State of Louisiana
applicable to agreements made and entirely to be performed within
such State, except as federal law may be applicable.
19. Expenses. Each party hereto will bear all expenses
incurred by it in connection with this Agreement and the
transactions contemplated hereby, including the fees, expenses and
disbursements of its counsel and auditors, provided that printing
expenses shall be borne by Hibernia.
20. No Assignment. Prior to the Effective Date, neither
party hereto may assign any of its rights or obligations under this
Agreement to any other person without the prior written consent of
the other bank holding company that is a party hereto, including
any transfer or assignment by operation of law.
21. Notices. All notices or other communications which are
required or permitted hereunder shall be in writing and sufficient
if delivered personally or sent by registered or certified mail,
postage prepaid, to the Chief Executive Officer of Hibernia at the
address of such party set forth in the preamble to this Agreement
or to the Chairman of the Board of Commercial at 200 Willow Street,
Franklin, Louisiana 70538, and shall be deemed to have been given
as of the date so personally delivered or mailed. A copy of all
notices or other communications directed to Hibernia shall be sent
to:
Hibernia National Bank
313 Carondelet Street
New Orleans, Louisiana 70130
Attention: Corporate Law Division
and a copy of all notices or other communications directed to
Commercial shall be sent to:
J. Roland Livingston
First Commercial Bank
407 Charity
Abbeville, Louisiana 70511-0550
22. Headings. The headings in this Agreement are inserted
for convenience of reference only and are not intended to be a part
of or to affect the meaning or interpretation of this Agreement.
23. Entire Agreement. This Agreement and the Schedules and
Exhibits hereto supersede any and all oral or written agreements
and understandings heretofore made relating to the subject matter
hereof and contain the entire agreement of the parties relating to
the subject matter hereof. The terms and conditions of this
Agreement shall inure to the benefit of and be binding upon the
parties hereto, and their respective successors. Nothing in this
Agreement or in the Merger Agreement is intended to or shall be
construed to confer upon or to give any person other than the
parties hereto any rights, remedies, obligation or liabilities
under or by reason of this Agreement except as expressly provided
herein.
IN WITNESS WHEREOF, the parties hereto have caused this
instrument to be executed in counterparts by their duly authorized
officers and their corporate seals to be hereunto affixed, all as
of the day and year first above written.
Hibernia Corporation
_______________________________
Stephen A. Hansel
President and Chief Executive
Officer
Attest:
__________________________
Patricia C. Meringer
Secretary
Commercial Bancshares, Inc.
By: ____________________________
Newman Trowbridge, Jr.
Chairman of the Board
Attest:
______________________________
Secretary
<PAGE>
APPENDIX C
ARTICLE VII OF THE ARTICLES OF INCORPORATION
OF COMMERCIAL BANCSHARES, INC.
ARTICLE VII
Certain Transactions
A. Transactions. Except as otherwise expressly provided in
Paragraph D of this Article, the affirmative vote of the holders of
75% of the total voting power of the Corporation cast at a meeting
of the stockholders for that purpose shall be required:
(i) to adopt any agreement to merge or consolidate
the Corporation with or into any Major
Stockholder (as defined below), or
(ii) to authorize any sale, lease, exchange, mortgage,
pledge, transfer or other alienation to or with
any Major Stockholder of all or any substantial
part of the assets of the Corporation, or
(iii) to adopt any plan of recapitalization or
reclassification of shares of any class of
capital stock entitled to vote generally in the
election of directors, or
(iv) to adopt any plan or proposal to liquidate or
dissolve the Corporation.
This affirmative vote shall be required even if no vote or some
lesser percentage is specified by law or in an agreement between
the Corporation and any other party, or otherwise.
B. Definitions. For purposes of this Article VII:
(i) "Major Stockholder" means any individual, firm,
corporation or other entity, (hereafter
collectively called "person") including any of
its Affiliates or Associates (defined below),
that as of the record date for determining
stockholders entitled to notice and vote on any
of the transactions described in Paragraph A
above, or immediately prior to the consummation
of that transaction, is the beneficial owner
(defined below), directly or indirectly, of 5% or
more of the outstanding shares of any class of
capital stock of the Corporation entitled to vote
generally in the election of directors;
(ii) For the purposes of this Article VII, the term
"Affiliate" means any person that directly or
indirectly (through one or more intermediaries)
controls, or is controlled by, or is under common
control with a person. "Control,"
("controlling," "controlled by" and "under common
control with") means the possession, directly or
indirectly, of the power to direct or cause the
direction of the management and policies of a
person whether through the ownership of voting
securities, by contract, or otherwise.
For purposes of this Article VII, the term
"Associate means:
(1) any corporation or organization (other
than the Corporation or a majority-owned
subsidiary of the Corporation) of which
such a person is an officer or partner or
is, directly or indirectly, the
beneficial owner of 10% or more of any
class of equity securities.
(2) any trust or other estate in which the
person has a substantial beneficial
interest or serves as a trustee or in a
similar fiduciary capacity, and
(3) any relative or spouse of a person, or
any relative of such spouse, who has the
same home as that person or who is a
director or officer of the Corporation or
any of its subsidiaries.
(iii) a person deemed to be the beneficial owner of
shares of capital stock of the Corporation:
(a) that it has the right to acquire under
any agreement or upon exercise of
conversion rights, warrants, or options,
or otherwise, or
(b) that are beneficially owned, directly or
indirectly, by it or its Affiliate or
Associate or by any other person with
which it or its Affiliate or Associate
has any agreement, arrangement or
understanding to acquire, hold, vote or
alienate capital stock of the
Corporation.
(iv) the outstanding shares of capital stock of the
Corporation includes shares deemed owned by a
Major Stockholder (or a person deemed a Major
Stockholder) through application of sub-clauses
(a) and (b) above but does not include any other
shares that may be issuable by the Corporation
pursuant to any agreement, or upon exercise of
conversion rights, warrants, or options, or
otherwise.
C. Determinations. On the basis of information known to the
Corporation, the Board of Directors shall determine whether any
person beneficially owns 5% or more of the outstanding shares of
the capital stock of the Corporation entitled to vote generally in
the election of directors and whether any person is an Affiliate or
Associate of another. All such determinations shall be conclusive
and binding for all purposes of this Article VII.
D. Exceptions. The shareholder vote required by Paragraph
A of this Article VII shall not apply to any transaction described
in that Paragraph if the Corporation is then and at all times
throughout the preceding twelve months has been, directly or
indirectly, the beneficial owner of a majority of the shares of
each class of outstanding capital stock of each other party to the
transaction.
E. Successors. In every merger or consolidation in which
the Corporation is not to be the surviving or resulting
corporation, the holders of each class of capital stock of the
Corporation shall retain their proportionate equity and voting
interests in the surviving or resulting corporation. Further, the
articles of incorporation of the surviving or resulting corporation
shall contain provisions substantially the same as this Article
VII. If the Corporation is to be the surviving or resulting
corporation, these Articles of Incorporation shall not be amended,
altered, changed or repealed in the merger or consolidation
adversely to affect, directly or indirectly, any of the provisions
of these Articles.
F. Merger into Major Stockholder. In case of merger or
consolidation of the Corporation into a Major Stockholder or
alienation of all or a substantial part of the assets of the
Corporation to a Major Stockholder, the stockholder vote approving
those transactions must also include the affirmative vote of a
majority of the shares of capital stock entitled to vote on the
transactions not deemed owned by the Major Stockholder.
G. Certain Amendments to Articles of Incorporation.
Notwithstanding any other provisions of these Articles of
Incorporation or the bylaws of the Corporation (and notwithstanding
the fact that some lesser percentage may be specified by Hibernia
Corporation) the affirmative vote of the holders of at least 75% of
the outstanding shares of capital stock of the Corporation entitled
to vote generally in the election of directors (considered for this
purpose as one class) cast at a meeting of the stockholders called
for that purpose shall be required for any corporate action that
would, directly or indirectly, amend, alter, change, repeal or
adversely affect any provision of Articles IV, VI and VII,
inclusive, of these Articles of Incorporation.
<PAGE>
APPENDIX D
FORM OF OPINION OF THE BANK ADVISORY GROUP
January __, 1994
Board of Directors
Commercial Bancshares, Inc.
Franklin, Louisiana
Gentlemen:
You have requested that The Bank Advisory Group, Inc. act as
an independent financial analyst and advisor to the common
shareholders of Commercial Bancshares, Inc. ("CBI") and its wholly-
owned subsidiary, First Commercial Bank. Specifically, we have
been asked to render advice and analysis in connection with the
proposed merger of Commercial Bancshares, Inc. with and into
Hibernia Corporation, New Orleans, Louisiana (the "Merger"). In
our role as an independent financial analyst, you have requested
our opinion with regard to the fairness -- from the perspective of
the common shareholders of Commercial Bancshares, Inc. -- of the
financial terms of the proposed merger pursuant to the provisions
of the Agreement and Plan of Merger of Commercial Bancshares, Inc.
with and into Hibernia Corporation (the "Agreement") dated
September 28, 1993.
In conjunction with our review of the Agreement, our
understanding is that Hibernia Corporation ("Hibernia") proposed to
consummate the Merger pursuant to the following financial terms:
The Shareholders of Commercial Bancshares, Inc. shall receive
Aggregate Consideration equal to $18,700,000 in Hibernia
common stock based on the Average Market Price of Hibernia
common stock on the Closing Date; provided, however, that the
exchange ratio shall not fall below 8.4 shares of Hibernia
common stock for each share of CBI common stock.
If on or before the Closing Date, Hibernia Enters into an
agreement in principle or a definite agreement with St. Mary
Holding, Inc. to acquire -- via merger, purchase,
consolidation, or otherwise -- St. Mary Holding, Inc. and/or
its subsidiary, St. Mary Bank & Trust Company, the
shareholders of Commercial Bancshares, Inc. shall receive
Aggregate Consideration equal to $20,700,000 in Hibernia
common stock, based on the Average Market Price of Hibernia
common stock on the Closing Date; provided, however, that the
exchange ratio shall not fall below 9.3 shares of Hibernia
common stock for each share of CBI common stock.
For the purpose of calculating the Aggregate Consideration,
the Average Market Price of Hibernia common stock on the date
of closing shall represent the average of the mean of the high
and low prices of one share of Hibernia common stock for the
five business days preceding the last trading day immediately
prior to the Closing Date.
The Bank Advisory Group, Inc., as part of its line of
professional services, specializes in rendering valuation opinions
of banks and bank holding companies in connection with mergers and
acquisitions nationwide. Prior to our retention for this
assignment, The Bank Advisory Group has provided consulting
services to Commercial Bancshares, Inc. and First Commercial Bank,
however, the revenues derived from the delivery of such services
are insignificant when compared to The Bank Advisory Group's total
gross revenues. The Bank Advisory Group has not provided any
services to Hibernia Corporation.
In connection with this opinion and with respect to Commercial
Bancshares, Inc., we have reviewed, among other things:
1. Audited consolidated financial statements for CBI for the
years ended December 31, 1992 and 1991.
2. Consolidated financial statements for CBI, on form F.R.
Y-9C, for the nine months ended September 30, 1993, as
filed with the Federal Reserve System;
3. Reports of Condition and Income for First Commercial
Bank, the subsidiary bank of CBI, for the three years
ended December 31, 1990, 1991, and 1992, and for the nine
month period ended September 30, 1993, as filed with
Federal bank regulatory agencies;
4. The economy in general and, in particular, the local
economies in which First Commercial Bank operates;
5. Since January 1, 1992, and in connection with our ongoing
professional relationship with Commercial Bancshares,
Inc.:
(a) Certain internal financial analyses and forecasts
for First Commercial Bank prepared by the
management of First Commercial Bank, including
projections of future performance;
(b) Certain other summary materials and analyses with
respect to First Commercial Bank's loan
portfolio, securities portfolio, deposit base,
fixed assets, and operations including, but not
limited to: (i) schedule of loans and other
assets identified by management as deserving
special attention or monitoring given the
characteristics of the loan/asset and the local
economy, (ii) analyses concerning the adequacy of
the loan loss reserve, (iii) schedules of "other
real estate owned" including current carrying
values and recent appraisals, and (iv) schedules
of securities, detailing book values, market
values, and lengths to maturity; and,
6. Such other information -- including financial studies,
analyses, investigations, and economic and market
criteria -- that we deem relevant to this assignment.
In connection with this opinion and with respect to Hibernia
Corporation, we have reviewed, among other things:
1. Audited consolidated financial statements for Hibernia,
in Annual Report Form and Form 10-K, for the years ended
December 31, 1992 and 1991; and, unaudited quarterly
financial statements for Hibernia, in quarterly report
format, for the nine month period ending September 30,
1993;
2. Consolidated financial statements for Hibernia, on form
F.R. Y-9C, for the years ended 1990, 1991, and 1992; and,
for the nine months ended September 30, 1993, as filed
with the Federal Reserve System;
3. Reports of Condition and Income for Hibernia National
Bank, the subsidiary bank of Hibernia, for the three
years ended December 31, 1990, 1991, and 1992, and for
the nine month period ended September 30, 1993, as filed
with Federal bank regulatory agencies;
4. Prospectus dated December 1992, setting forth the terms
of Hibernia's issuance of Class A common stock in
exchange for debt restructuring;
5. Equity research reports regarding Hibernia prepared by
various analysts who cover the financial institutions
sector;
6. The economy in general and, in particular, the local
economies in which Hibernia and its subsidiaries operate;
and,
7. Such other information -- including financial studies,
analyses, investigations, and economic and market
criteria -- that we deem relevant to this assignment.
In connection with this opinion and with respect to the
proposed Merger, we have reviewed, among other things:
1. The Agreement, which sets forth, among other items, the
terms, conditions to closing, pending litigation against
both CBI and Hibernia, and representations and warranties
of CBI and Hibernia with respect to the proposed Merger;
2. The Proxy Statement-Prospectus, to which this opinion is
appended, that is being furnished to the shareholders of
CBI in connection with the proposed Merger;
3. The financial terms and price levels for commercial banks
recently acquired in the United States -- specifically in
Louisiana, Mississippi and East Texas -- together with
the financial performance and condition of such banks;
4. The financial terms and stated price levels of other
banking organizations, the proposed acquisition of which
has been publicly announced by Hibernia subsequent to
September 28, 1993 and prior to the date of this opinion;
5. The price-to-equity and price-to-earnings multiples of
banking organizations based in Louisiana, Mississippi and
Texas with publicly-traded common stock, together with
the financial performance and condition of such banking
organizations, and
6. Such other information -- including financial studies,
analyses, investigations, and economic and market
criteria -- that we deem relevant to this assignment.
Based on our experience, we believe our review of, among other
things, the aforementioned items provides a reasonable basis for
our opinion, recognizing that we are expressing an informed
professional opinion -- not a certification of value.
We have relied upon the information provided by the management
of Commercial Bancshares, Inc. and Hibernia Corporation, or
otherwise reviewed by us, as being complete and accurate in all
material respects. Furthermore, we have not verified through
independent inspection or examination the specific assets or
liabilities of CBI and Hibernia or their subsidiary banks. And, we
have relied upon assurances provided by Hibernia that none of the
pending litigation proceedings against Hibernia will have a
material adverse affect on the business, prospects or financial
condition of Hibernia. We have also assumed that there has been no
material change in the assets, financial condition, results of
operations, or business prospects of Commercial Bancshares, Inc.
and Hibernia since the date of the last financial statements made
available to us. We have met with the management of both CBI and
Hibernia to discuss relevant information that has been provided to
us.
Based on all factors that we deem relevant and assuming the
accuracy and completeness of the information and data provided to
us, we conclude that the terms of the proposed Merger, as outlined
herein, are fair, from a financial standpoint, to the common
shareholders of Commercial Bancshares, Inc.
This opinion is available for disclosure to the shareholders
of Commercial Bancshares, Inc. Accordingly, we hereby consent to
the inclusion of our opinion as an appendix to the Proxy Statement-
Prospectus relating to the proposed Merger, and to the reference of
our firm in the Proxy Statement-Prospectus.
Respectfully submitted,
THE BANK ADVISORY GROUP, INC.
By:___________________________
<PAGE>
APPENDIX E
CERTAIN PROVISIONS OF LOUISIANA LAW RELATING TO
THE RIGHTS OF DISSENTING SHAREHOLDERS
A. Except as provided in subsection B of this section, if a
corporation has, by vote of its shareholders, authorized a sale,
lease or exchange of all of its assets, or has, by vote of its
shareholders, become a party to a merger or consolidation, then,
unless such authorization or action shall have been given or
approved by at least eighty percent of the total voting power, a
shareholder who voted against such corporate action shall have the
right to dissent. If a corporation has become a party to a merger
pursuant to R.S. 12:112(H), the shareholders of any subsidiaries
party to the merger shall have the right to dissent without regard
to the proportion of the voting power which approved the merger and
despite the fact that the merger was not approved by vote of the
shareholders of any of the corporations involved.
B. The right to dissent provided by this Section shall not
exist in the case of:
(1) A sale pursuant to an order of a court having
jurisdiction in the premises.
(2) A sale for cash on terms requiring distribution
of all or substantially all of net proceeds to
the shareholders in accordance with their
respective interests within one year after the
date of the sale.
(3) Shareholders holding shares of any class of stock
which, at the record date fixed to determine
shareholders entitled to receive notice of and to
vote at the meeting of shareholders at which a
merger or consolidation was acted on, were listed
on a national securities exchange, unless the
articles of the corporation issuing such stock
provide otherwise or the shares of such
shareholders were not converted by the merger or
consolidation solely into shares of the surviving
or new corporation.
C. Except as provided in the last sentence of this
subsection, any shareholder electing to exercise such right of
dissent shall file with the corporation, prior to or at the meeting
of shareholders at which such proposed corporate action is
submitted to a vote, a written objection to such proposed corporate
action, and shall vote his shares against such action. If such
proposed corporate action be taken by the required vote, but by
less than eighty percent of the total voting power, and the merger,
consolidation or sale, lease or exchange of assets authorized
thereby be effected, the corporation shall promptly thereafter give
written notice thereof, by registered mail, to each shareholder who
filed such written objection to, and voted his shares against, such
action, at such shareholder's last address on the corporation's
records. Each such shareholder may, within twenty days after the
mailing of such notice to him, but not thereafter, file with the
corporation a demand in writing for the fair cash value of his
shares as of the day before such vote was taken; provided that he
state in such demand the value demanded, and a post office address
to which the reply of the corporation may be sent, and at the same
time deposit in escrow in a chartered bank or trust company located
in the parish of the registered office of the corporation, the
certificates representing his shares, duly endorsed and transferred
to the corporation upon the sole condition that said certificates
shall be delivered to the corporation upon payment of the value of
the shares determined in accordance with the provisions of this
section. With his demand the shareholder shall deliver to the
corporation, the written acknowledgment of such bank or trust
company that it so holds his certificates of stock. Unless the
objection, demand and acknowledgment aforesaid be made and
delivered by the shareholder within the period above limited, he
shall conclusively be presumed to have acquiesced in the corporate
action proposed or taken. In the case of a merger pursuant to R.S.
12:112(H), the dissenting shareholder need not file an objection
with the corporation nor vote against the merger, but need only
file with the corporation, within twenty days after a copy of the
merger certificate was mailed to him, a demand in writing for the
cash value of his shares as of the day before the certificate was
filed with the secretary of state, state in such demand the value
demanded and a post office address to which the corporation's reply
may be sent, deposit the certificates representing his shares in
escrow as hereinabove provided, and deliver to the corporation with
his demand the acknowledgment of the escrow bank or trust company
as herein-above prescribed.
D. If the corporation does not agree to the value so stated
and demanded, or does not agree that a payment is due, it shall,
within twenty days after receipt of such demand and acknowledgment,
notify in writing the shareholder, at the designated post office
address, of its disagreement, and shall state in such notice the
value it will agree to pay if any payment should be held to be due;
otherwise it shall be liable for, and shall pay to the dissatisfied
shareholder, the value demanded by him for his shares.
E. In case of disagreement as to such fair cash value, or as
to whether any payment is due, after compliance by the parties with
the provisions of subsections C and D of this section, the
dissatisfied shareholder, within sixty days after receipt of notice
in writing of the corporation's disagreement, but not thereafter,
may file suit against the corporation, or the merged or
consolidated corporation, as the may be, in the district court of
the parish in which the corporation or the merged or consolidated
corporation, as the case may be, has its registered office, praying
the court to fix and decree the fair cash value of the dissatisfied
shareholder's shares as of the day before such corporate action
complained of was taken, and the court shall, on such evidence as
may be adduced in relation thereto, determine summarily whether any
payment is due, and, if so, such cash value, and render judgment
accordingly. Any shareholder entitled to file such suit may,
within such sixty-day period but not thereafter, intervene as a
plaintiff in such suit filed by another shareholder, and recover
therein judgment against the corporation for the fair cash value of
his shares. No order or decree shall be made by the court staying
the proposed corporate action, and any such corporate action may be
carried to completion notwithstanding any such suit. Failure of
the shareholder to bring suit, or to intervene in such a suit,
within sixty days after receipt of notice of disagreement by the
corporation shall conclusively bind the shareholder (1) by the
corporation's statement that no payment is due, or (2) if the
corporation does not contend that no payment is due to accept the
value of his shares as fixed by the corporation in its notice of
disagreement.
F. When the fair value of the shares has been agreed upon
between the shareholder and the corporation, or when the
corporation has become liable for the value demanded by the
shareholder because of failure to give notice of disagreement and
of the value it will pay, or when the shareholder has become bound
to accept the value the corporation agrees is due because of his
failure to bring suit within sixty days after receipt of notice of
the corporation's disagreement, the action of the shareholder to
recover such value must be brought within five years from the date
the value was agreed upon, or the liability of the corporation
became fixed.
G. If the corporation or the merged or consolidated
corporation, as the case may be, shall, in its notice of
disagreement, have offered to pay to the dissatisfied shareholder
on demand an amount in cash deemed by it to be the fair cash value
of his shares, and if, on the institution of a suit by the
dissatisfied shareholder claiming an amount in excess of the amount
so offered, the corporation, or the merged or consolidated
corporation, as the case may be, shall deposit in the registry of
the court, there to remain until the final determination of the
cause, the amount so offered, then, if the amount finally awarded
such shareholder, exclusive of interest and costs, be more than the
amount offered and deposited as aforesaid, the costs of the
proceeding shall be taxed against the corporation, or the merged or
consolidated corporation, as the case may be; otherwise the costs
of the proceeding shall be taxed against the corporation, or the
merged or consolidated corporation, as the case may be; otherwise
the costs of the proceeding shall be taxed against such
shareholder.
H. Upon filing a demand for the value of his shares, the
shareholder shall cease to have any of the rights of a shareholder
except the rights accorded by this section. Such a demand may be
withdrawn by the shareholder at any time before the corporation
gives notice of disagreement, as provided in subsection D of this
section. After such notice of disagreement is given, withdrawal of
a notice of election shall require the written consent of the
corporation. If a notice of election is withdrawn, or the proposed
corporate action is abandoned or rescinded, or a court shall
determine that the shareholder is not entitled to receive payment
for his shares, or the shareholder shall otherwise lose his
dissenter's rights, he shall not have the right to receive payment
for his shares, his share certificates shall be returned to him
(and, on his request, new certificates shall be issued to him in
exchange for the old ones endorsed to the corporation), and he
shall be reinstated to all his rights as a shareholder as of the
filing of his demand for value, including any intervening
preemptive rights, and the right to payment of any intervening
dividend or other distribution, or, if any such rights have expired
or any such dividend or distribution other than in cash has been
completed, in lieu thereof, at the election of the corporation, the
fair value thereof in cash as determined by the board as of the
time of such expiration or completion, but without prejudice
otherwise to any corporate proceedings that may have been taken in
the interim.
<PAGE>
APPENDIX F
FORM OF OPINION OF ERNST & YOUNG REGARDING CERTAIN TAX MATTERS
(To be Filed by Amendment)
<PAGE>
PART II. INFORMATION NOT REQUIRED IN PROSPECTUS
Item 14. Other Expenses of Issuance and Distribution.
Set forth below is an itemized statement of the estimated expenses in
connection with the issuance and distribution of the securities offered hereby.
All expenses will be borne by Hibernia:
SEC filing fee. . . . . . . . . . . . . . . . . $ 6,448
Blue Sky Filing Fees and Expenses . . . . . . . 5,000
Printing and Engraving. . . . . . . . . . . . 5,000
Transfer Agent Fees and Expenses. . . . . . . . 5,000
Legal Fees and Expenses . . . . . . . . . . . . 5,000
Accounting Fees and Expenses. . . . . . . . . . 25,000
Miscellaneous . . . . . . . . . . . . . . . . . 2,000
________
Total . . . . . . . . . . . . . . . . . . . . $ 48,488
Item 16. Exhibits and Financial Statement Schedules.
5(a) Opinion of Patricia C. Meringer, Esq.
24(a) Consent of Ernst & Young
24(b) Consent of Patricia C. Meringer, Esq. (included
within Exhibit 5(a)
25 Powers of Attorney
<PAGE>
SIGNATURES
Pursuant to the requirements of the Securities Act of 1933, the Registrant
hereby certifies that it has reasonable grounds to believe that it meets all of
the requirements for filing on Form S-4 and has duly caused this Registration
Statement to be signed on its behalf by the undersigned, thereunto duly
authorized, in the City of New Orleans, State of Louisiana, on January 13, 1994.
HIBERNIA CORPORATION
By: S/RON E. SAMFORD, JR.
Ron E. Samford, Jr.
Pursuant to the requirements of the Securities Act of 1933, the Registration
Statement has been signed by the following persons in the capacities indicated
on January 13, 1994.
Signatures Title
*
_____________________________ Chairman of the Board
Robert H. Boh
*
_____________________________ President and Director
Stephen A. Hansel
*
_____________________________ Chief Financial Officer
Robert W. Close
*
_____________________________ Chief Accounting Officer
Ron E. Samford, Jr.
*
_____________________________ Director
W. James Amoss, Jr.
*
_____________________________ Director
J. Terrell Brown
*
_____________________________ Director
Brooke H. Duncan
*
_____________________________ Director
Richard W. Freeman
*
_____________________________ Director
Robert L. Goodwin
*
_____________________________ Director
Dick H. Hearin
*
_____________________________ Director
Robert T. Holleman
*
_____________________________ Director
Hugh J. Kelly
*
_____________________________ Director
John P. Laborde
*
_____________________________ Director
Sidney W. Lassen
*
_____________________________ Director
Donald J. Nalty
*
_____________________________ Director
Joe D. Smith, Jr.
*
_____________________________ Director
James H. Stone
*
_____________________________ Director
E. L. Williamson
*
_____________________________ Director
Robert E. Zetzmann
*By: Patricia C. Meringer
Patricia C. Meringer
Attorney-in-Fact
EXHIBIT INDEX
Exhibit Sequential Page
Number
5(a) Opinion of Patricia C. Meringer, Esq.
24(a) Consent of Ernst & Young
24(b) Consent of Patricia C. Meringer, Esq.
(included within Exhibit 5(a)
25 Powers of Attorney
________
<PAGE>
EXHIBIT 5(a)
January 10, 1994
Securities and Exchange Commission
450 Fifth Street, N.W.
Washington, D.C. 20549
Ladies and Gentlemen:
I am Associate Counsel and Secretary of Hibernia Corporation (the
"Company") and am delivering this opinion in connection with the
registration by the Company of shares of Class A Common Stock (the
"Shares) to be issued by the Company in a proposed merger (the
"Merger") with Commercial Bancshares, Inc. ("Commercial") in which
the shareholders of Commercial will receive the Shares in exchange
for their shares of common stock of Commercial, to which
registration statement (the "Registration Statement") this opinion
is attached. The Shares will be reserved for issuance upon the
closing of the Merger. The Shares will be issued to shareholders of
Commercial upon consummation of the Merger pursuant to the
registration statement after it has been declared effective by the
Securities and Exchange Commission.
In furnishing this opinion, I or attorneys under my supervision
have examined such documents and have made such investigation of
matters of fact and law as I have deemed necessary or appropriate
to provide a basis for the opinions set forth herein. In such
examination and investigation, I have assumed the genuineness of
all signatures, the legal capacity of natural persons, the
authenticity of all documents submitted as originals and the
conformity to original documents of all documents submitted as
certified or photostatic copies.
In rendering this opinion, I do not express any opinion
concerning any law other than the law of the State of Louisiana and
the federal law of the United States, and I do not express any
opinion, either implicitly or otherwise, on any issue not expressly
addressed below.
Based upon and limited by the foregoing, and based upon legal
considerations which I deem relevant and upon laws or regulations
in effect as of the date hereof, I am of the opinion that:
1. The Corporation has been duly incorporated and is validly
existing and in good standing under the laws of the State of
Louisiana.
2. The Shares have been duly authorized and either are, or, upon
issuance thereof pursuant to the terms of the offering thereof,
will be, validly issued, fully paid and non-assessable.
I hereby expressly consent to the inclusion of this Opinion as
exhibit to the Registration Statement and to the reference to this
Opinion therein.
This opinion is being furnished to you pursuant to the filing of
the Registration Statement and may not be relied upon by any other
person or used for any other purpose, except as provided for in the
preceding paragraph.
Very truly yours,
Patricia C. Meringer
Associate Counsel
and Secretary
<PAGE>
EXHIBIT 25
<PAGE>
P0WER OF ATTORNEY
KNOW ALL MEN BY THESE PRESENTS, that the undersigned director of
Hibernia Corporation, a Louisiana corporation (the "Corporation"),
does hereby name, constitute and appoint Robert W. Close, Patricia
C. Meringer and Ron E. Samford, Jr., and each of them (with full
power to each of them to act alone), his true and lawful agents and
attorneys-in-fact, for him and on his behalf and in his name, place
and stead, in any and all capacities, to sign, execute,
acknowledge, deliver, and file (a) with the Securities and Exchange
Commission (or any other governmental or regulatory authority), a
Registration Statement on Form S-4 (or other appropriate form) and
any and all amendments (including post-effective amendments)
thereto, with any and all exhibits and any and all other documents
required to be filed with respect thereto or in connection
therewith, relating to the registration under the Securities Act of
1933 of Common Stock of the Corporation to be issued in the merger
between the Corporation and Commercial Bankshares, Inc.
("Commercial") wherein the Corporation agrees to exchange shares of
its common stock for all of the outstanding shares of common stock
of Commercial and merge Commercial into the Corporation, authorized
by resolutions adopted by the Board of Directors on September 28,
1993, and (b) with the securities agencies or officials of various
jurisdictions, all applications, qualifications, registrations or
exemptions relating to such offering under the laws of any such
jurisdiction, including any amendments thereto or other documents
required to be filed with respect thereto or in connection
therewith, granting unto said agents and attorneys, and each of
them, full power and authority to do and perform each and every act
and thing requisite and necessary to be done in and about the
premises in order to effectuate the same as fully to all intents
and purposes as the undersigned might or could do if personally
present, and the undersigned hereby ratifies and confirms all that
said agents and attorneys-in-fact, or any of them may lawfully do
or cause to be done by virtue hereof.
IN WITNESS WHEREOF, the undersigned has hereunto set his hand on
this 26th day of October, 1993.
s/ W. JAMES AMOSS, JR.
W. James Amoss, Jr.
Director
HIBERNIA CORPORATION
<PAGE>
P0WER OF ATTORNEY
KNOW ALL MEN BY THESE PRESENTS, that the undersigned Chairman and
director of Hibernia Corporation, a Louisiana corporation (the
"Corporation"), does hereby name, constitute and appoint Robert W.
Close, Patricia C. Meringer and Ron E. Samford, Jr., and each of
them (with full power to each of them to act alone), his true and
lawful agents and attorneys-in-fact, for him and on his behalf and
in his name, place and stead, in any and all capacities, to sign,
execute, acknowledge, deliver, and file (a) with the Securities and
Exchange Commission (or any other governmental or regulatory
authority), a Registration Statement on Form S-4 (or other
appropriate form) and any and all amendments (including post-
effective amendments) thereto, with any and all exhibits and any
and all other documents required to be filed with respect thereto
or in connection therewith, relating to the registration under the
Securities Act of 1933 of Common Stock of the Corporation to be
issued in the merger between the Corporation and Commercial
Bankshares, Inc. ("Commercial") wherein the Corporation agrees to
exchange shares of its common stock for all of the outstanding
shares of common stock of Commercial and merge Commercial into the
Corporation, authorized by resolutions adopted by the Board of
Directors on September 28, 1993, and (b) with the securities
agencies or officials of various jurisdictions, all applications,
qualifications, registrations or exemptions relating to such
offering under the laws of any such jurisdiction, including any
amendments thereto or other documents required to be filed with
respect thereto or in connection therewith, granting unto said
agents and attorneys, and each of them, full power and authority to
do and perform each and every act and thing requisite and necessary
to be done in and about the premises in order to effectuate the
same as fully to all intents and purposes as the undersigned might
or could do if personally present, and the undersigned hereby
ratifies and confirms all that said agents and attorneys-in-fact,
or any of them may lawfully do or cause to be done by virtue
hereof.
IN WITNESS WHEREOF, the undersigned has hereunto set his hand on
this 26th day of October, 1993.
S/ROBERT H. BOH
Robert H. Boh
Chairman and Director
HIBERNIA CORPORATION
<PAGE>
P0WER OF ATTORNEY
KNOW ALL MEN BY THESE PRESENTS, that the undersigned director of
Hibernia Corporation, a Louisiana corporation (the "Corporation"),
does hereby name, constitute and appoint Robert W. Close, Patricia
C. Meringer and Ron E. Samford, Jr., and each of them (with full
power to each of them to act alone), his true and lawful agents and
attorneys-in-fact, for him and on his behalf and in his name, place
and stead, in any and all capacities, to sign, execute,
acknowledge, deliver, and file (a) with the Securities and Exchange
Commission (or any other governmental or regulatory authority), a
Registration Statement on Form S-4 (or other appropriate form) and
any and all amendments (including post-effective amendments)
thereto, with any and all exhibits and any and all other documents
required to be filed with respect thereto or in connection
therewith, relating to the registration under the Securities Act of
1933 of Common Stock of the Corporation to be issued in the merger
between the Corporation and Commercial Bankshares, Inc.
("Commercial") wherein the Corporation agrees to exchange shares of
its common stock for all of the outstanding shares of common stock
of Commercial and merge Commercial into the Corporation, authorized
by resolutions adopted by the Board of Directors on September 28,
1993, and (b) with the securities agencies or officials of various
jurisdictions, all applications, qualifications, registrations or
exemptions relating to such offering under the laws of any such
jurisdiction, including any amendments thereto or other documents
required to be filed with respect thereto or in connection
therewith, granting unto said agents and attorneys, and each of
them, full power and authority to do and perform each and every act
and thing requisite and necessary to be done in and about the
premises in order to effectuate the same as fully to all intents
and purposes as the undersigned might or could do if personally
present, and the undersigned hereby ratifies and confirms all that
said agents and attorneys-in-fact, or any of them may lawfully do
or cause to be done by virtue hereof.
IN WITNESS WHEREOF, the undersigned has hereunto set his hand on
this 26th day of October, 1993.
S/J. TERRELL BROWN
J. Terrell Brown
Director
HIBERNIA CORPORATION
<PAGE>
P0WER OF ATTORNEY
KNOW ALL MEN BY THESE PRESENTS, that the undersigned director of
Hibernia Corporation, a Louisiana corporation (the "Corporation"),
does hereby name, constitute and appoint Robert W. Close, Patricia
C. Meringer and Ron E. Samford, Jr., and each of them (with full
power to each of them to act alone), his true and lawful agents and
attorneys-in-fact, for him and on his behalf and in his name, place
and stead, in any and all capacities, to sign, execute,
acknowledge, deliver, and file (a) with the Securities and Exchange
Commission (or any other governmental or regulatory authority), a
Registration Statement on Form S-4 (or other appropriate form) and
any and all amendments (including post-effective amendments)
thereto, with any and all exhibits and any and all other documents
required to be filed with respect thereto or in connection
therewith, relating to the registration under the Securities Act of
1933 of Common Stock of the Corporation to be issued in the merger
between the Corporation and Commercial Bankshares, Inc.
("Commercial") wherein the Corporation agrees to exchange shares of
its common stock for all of the outstanding shares of common stock
of Commercial and merge Commercial into the Corporation, authorized
by resolutions adopted by the Board of Directors on September 28,
1993, and (b) with the securities agencies or officials of various
jurisdictions, all applications, qualifications, registrations or
exemptions relating to such offering under the laws of any such
jurisdiction, including any amendments thereto or other documents
required to be filed with respect thereto or in connection
therewith, granting unto said agents and attorneys, and each of
them, full power and authority to do and perform each and every act
and thing requisite and necessary to be done in and about the
premises in order to effectuate the same as fully to all intents
and purposes as the undersigned might or could do if personally
present, and the undersigned hereby ratifies and confirms all that
said agents and attorneys-in-fact, or any of them may lawfully do
or cause to be done by virtue hereof.
IN WITNESS WHEREOF, the undersigned has hereunto set his hand on
this 26th day of October, 1993.
S/BROOKE H. DUNCAN
Brooke H. Duncan
Director
HIBERNIA CORPORATION
<PAGE>
P0WER OF ATTORNEY
KNOW ALL MEN BY THESE PRESENTS, that the undersigned director of
Hibernia Corporation, a Louisiana corporation (the "Corporation"),
does hereby name, constitute and appoint Robert W. Close, Patricia
C. Meringer and Ron E. Samford, Jr., and each of them (with full
power to each of them to act alone), his true and lawful agents and
attorneys-in-fact, for him and on his behalf and in his name, place
and stead, in any and all capacities, to sign, execute,
acknowledge, deliver, and file (a) with the Securities and Exchange
Commission (or any other governmental or regulatory authority), a
Registration Statement on Form S-4 (or other appropriate form) and
any and all amendments (including post-effective amendments)
thereto, with any and all exhibits and any and all other documents
required to be filed with respect thereto or in connection
therewith, relating to the registration under the Securities Act of
1933 of Common Stock of the Corporation to be issued in the merger
between the Corporation and Commercial Bankshares, Inc.
("Commercial") wherein the Corporation agrees to exchange shares of
its common stock for all of the outstanding shares of common stock
of Commercial and merge Commercial into the Corporation, authorized
by resolutions adopted by the Board of Directors on September 28,
1993, and (b) with the securities agencies or officials of various
jurisdictions, all applications, qualifications, registrations or
exemptions relating to such offering under the laws of any such
jurisdiction, including any amendments thereto or other documents
required to be filed with respect thereto or in connection
therewith, granting unto said agents and attorneys, and each of
them, full power and authority to do and perform each and every act
and thing requisite and necessary to be done in and about the
premises in order to effectuate the same as fully to all intents
and purposes as the undersigned might or could do if personally
present, and the undersigned hereby ratifies and confirms all that
said agents and attorneys-in-fact, or any of them may lawfully do
or cause to be done by virtue hereof.
IN WITNESS WHEREOF, the undersigned has hereunto set his hand on
this 26th day of October, 1993.
S/RICHARD W. FREEMAN, JR.
Richard W. Freeman, Jr.
Director
HIBERNIA CORPORATION
<PAGE>
P0WER OF ATTORNEY
KNOW ALL MEN BY THESE PRESENTS, that the undersigned director of
Hibernia Corporation, a Louisiana corporation (the "Corporation"),
does hereby name, constitute and appoint Robert W. Close, Patricia
C. Meringer and Ron E. Samford, Jr., and each of them (with full
power to each of them to act alone), his true and lawful agents and
attorneys-in-fact, for him and on his behalf and in his name, place
and stead, in any and all capacities, to sign, execute,
acknowledge, deliver, and file (a) with the Securities and Exchange
Commission (or any other governmental or regulatory authority), a
Registration Statement on Form S-4 (or other appropriate form) and
any and all amendments (including post-effective amendments)
thereto, with any and all exhibits and any and all other documents
required to be filed with respect thereto or in connection
therewith, relating to the registration under the Securities Act of
1933 of Common Stock of the Corporation to be issued in the merger
between the Corporation and Commercial Bankshares, Inc.
("Commercial") wherein the Corporation agrees to exchange shares of
its common stock for all of the outstanding shares of common stock
of Commercial and merge Commercial into the Corporation, authorized
by resolutions adopted by the Board of Directors on September 28,
1993, and (b) with the securities agencies or officials of various
jurisdictions, all applications, qualifications, registrations or
exemptions relating to such offering under the laws of any such
jurisdiction, including any amendments thereto or other documents
required to be filed with respect thereto or in connection
therewith, granting unto said agents and attorneys, and each of
them, full power and authority to do and perform each and every act
and thing requisite and necessary to be done in and about the
premises in order to effectuate the same as fully to all intents
and purposes as the undersigned might or could do if personally
present, and the undersigned hereby ratifies and confirms all that
said agents and attorneys-in-fact, or any of them may lawfully do
or cause to be done by virtue hereof.
IN WITNESS WHEREOF, the undersigned has hereunto set his hand on
this 26th day of October, 1993.
S/ROBERT L. GOODWIN
Robert L. Goodwin
Director
HIBERNIA CORPORATION
<PAGE>
P0WER OF ATTORNEY
KNOW ALL MEN BY THESE PRESENTS, that the undersigned President,
Chief Executive Officer and director of Hibernia Corporation, a
Louisiana corporation (the "Corporation"), does hereby name,
constitute and appoint Robert W. Close, Patricia C. Meringer and
Ron E. Samford, Jr., and each of them (with full power to each of
them to act alone), his true and lawful agents and attorneys-in-
fact, for him and on his behalf and in his name, place and stead,
in any and all capacities, to sign, execute, acknowledge, deliver,
and file (a) with the Securities and Exchange Commission (or any
other governmental or regulatory authority), a Registration
Statement on Form S-4 (or other appropriate form) and any and all
amendments (including post-effective amendments) thereto, with any
and all exhibits and any and all other documents required to be
filed with respect thereto or in connection therewith, relating to
the registration under the Securities Act of 1933 of Common Stock
of the Corporation to be issued in the merger between the
Corporation and Commercial Bankshares, Inc. ("Commercial") wherein
the Corporation agrees to exchange shares of its common stock for
all of the outstanding shares of common stock of Commercial and
merge Commercial into the Corporation, authorized by resolutions
adopted by the Board of Directors on September 28, 1993, and (b)
with the securities agencies or officials of various jurisdictions,
all applications, qualifications, registrations or exemptions
relating to such offering under the laws of any such jurisdiction,
including any amendments thereto or other documents required to be
filed with respect thereto or in connection therewith, granting
unto said agents and attorneys, and each of them, full power and
authority to do and perform each and every act and thing requisite
and necessary to be done in and about the premises in order to
effectuate the same as fully to all intents and purposes as the
undersigned might or could do if personally present, and the
undersigned hereby ratifies and confirms all that said agents and
attorneys-in-fact, or any of them may lawfully do or cause to be
done by virtue hereof.
IN WITNESS WHEREOF, the undersigned has hereunto set his hand on
this 26th day of October, 1993.
s/STEPHEN A. HANSEL
Stephen A. Hansel
President, Chief
Executive Officer
and Director
HIBERNIA CORPORATION
<PAGE>
P0WER OF ATTORNEY
KNOW ALL MEN BY THESE PRESENTS, that the undersigned director of
Hibernia Corporation, a Louisiana corporation (the "Corporation"),
does hereby name, constitute and appoint Robert W. Close, Patricia
C. Meringer and Ron E. Samford, Jr., and each of them (with full
power to each of them to act alone), his true and lawful agents and
attorneys-in-fact, for him and on his behalf and in his name, place
and stead, in any and all capacities, to sign, execute,
acknowledge, deliver, and file (a) with the Securities and Exchange
Commission (or any other governmental or regulatory authority), a
Registration Statement on Form S-4 (or other appropriate form) and
any and all amendments (including post-effective amendments)
thereto, with any and all exhibits and any and all other documents
required to be filed with respect thereto or in connection
therewith, relating to the registration under the Securities Act of
1933 of Common Stock of the Corporation to be issued in the merger
between the Corporation and Commercial Bankshares, Inc.
("Commercial") wherein the Corporation agrees to exchange shares of
its common stock for all of the outstanding shares of common stock
of Commercial and merge Commercial into the Corporation, authorized
by resolutions adopted by the Board of Directors on September 28,
1993, and (b) with the securities agencies or officials of various
jurisdictions, all applications, qualifications, registrations or
exemptions relating to such offering under the laws of any such
jurisdiction, including any amendments thereto or other documents
required to be filed with respect thereto or in connection
therewith, granting unto said agents and attorneys, and each of
them, full power and authority to do and perform each and every act
and thing requisite and necessary to be done in and about the
premises in order to effectuate the same as fully to all intents
and purposes as the undersigned might or could do if personally
present, and the undersigned hereby ratifies and confirms all that
said agents and attorneys-in-fact, or any of them may lawfully do
or cause to be done by virtue hereof.
IN WITNESS WHEREOF, the undersigned has hereunto set his hand on
this 26th day of October, 1993.
s/DICK H. HEARIN
Dick H. Hearin
Director
HIBERNIA CORPORATION
<PAGE>
P0WER OF ATTORNEY
KNOW ALL MEN BY THESE PRESENTS, that the undersigned director of
Hibernia Corporation, a Louisiana corporation (the "Corporation"),
does hereby name, constitute and appoint Robert W. Close, Patricia
C. Meringer and Ron E. Samford, Jr., and each of them (with full
power to each of them to act alone), his true and lawful agents and
attorneys-in-fact, for him and on his behalf and in his name, place
and stead, in any and all capacities, to sign, execute,
acknowledge, deliver, and file (a) with the Securities and Exchange
Commission (or any other governmental or regulatory authority), a
Registration Statement on Form S-4 (or other appropriate form) and
any and all amendments (including post-effective amendments)
thereto, with any and all exhibits and any and all other documents
required to be filed with respect thereto or in connection
therewith, relating to the registration under the Securities Act of
1933 of Common Stock of the Corporation to be issued in the merger
between the Corporation and Commercial Bankshares, Inc.
("Commercial") wherein the Corporation agrees to exchange shares of
its common stock for all of the outstanding shares of common stock
of Commercial and merge Commercial into the Corporation, authorized
by resolutions adopted by the Board of Directors on September 28,
1993, and (b) with the securities agencies or officials of various
jurisdictions, all applications, qualifications, registrations or
exemptions relating to such offering under the laws of any such
jurisdiction, including any amendments thereto or other documents
required to be filed with respect thereto or in connection
therewith, granting unto said agents and attorneys, and each of
them, full power and authority to do and perform each and every act
and thing requisite and necessary to be done in and about the
premises in order to effectuate the same as fully to all intents
and purposes as the undersigned might or could do if personally
present, and the undersigned hereby ratifies and confirms all that
said agents and attorneys-in-fact, or any of them may lawfully do
or cause to be done by virtue hereof.
IN WITNESS WHEREOF, the undersigned has hereunto set his hand on
this 26th day of October, 1993.
s/ROBERT T. HOLLEMAN
Robert T. Holleman
Director
HIBERNIA CORPORATION
<PAGE>
P0WER OF ATTORNEY
KNOW ALL MEN BY THESE PRESENTS, that the undersigned director of
Hibernia Corporation, a Louisiana corporation (the "Corporation"),
does hereby name, constitute and appoint Robert W. Close, Patricia
C. Meringer and Ron E. Samford, Jr., and each of them (with full
power to each of them to act alone), his true and lawful agents and
attorneys-in-fact, for him and on his behalf and in his name, place
and stead, in any and all capacities, to sign, execute,
acknowledge, deliver, and file (a) with the Securities and Exchange
Commission (or any other governmental or regulatory authority), a
Registration Statement on Form S-4 (or other appropriate form) and
any and all amendments (including post-effective amendments)
thereto, with any and all exhibits and any and all other documents
required to be filed with respect thereto or in connection
therewith, relating to the registration under the Securities Act of
1933 of Common Stock of the Corporation to be issued in the merger
between the Corporation and Commercial Bankshares, Inc.
("Commercial") wherein the Corporation agrees to exchange shares of
its common stock for all of the outstanding shares of common stock
of Commercial and merge Commercial into the Corporation, authorized
by resolutions adopted by the Board of Directors on September 28,
1993, and (b) with the securities agencies or officials of various
jurisdictions, all applications, qualifications, registrations or
exemptions relating to such offering under the laws of any such
jurisdiction, including any amendments thereto or other documents
required to be filed with respect thereto or in connection
therewith, granting unto said agents and attorneys, and each of
them, full power and authority to do and perform each and every act
and thing requisite and necessary to be done in and about the
premises in order to effectuate the same as fully to all intents
and purposes as the undersigned might or could do if personally
present, and the undersigned hereby ratifies and confirms all that
said agents and attorneys-in-fact, or any of them may lawfully do
or cause to be done by virtue hereof.
IN WITNESS WHEREOF, the undersigned has hereunto set his hand on
this 26th day of October, 1993.
s/HUGH J. KELLY
Hugh J. Kelly
Director
HIBERNIA CORPORATION
<PAGE>
P0WER OF ATTORNEY
KNOW ALL MEN BY THESE PRESENTS, that the undersigned director of
Hibernia Corporation, a Louisiana corporation (the "Corporation"),
does hereby name, constitute and appoint Robert W. Close, Patricia
C. Meringer and Ron E. Samford, Jr., and each of them (with full
power to each of them to act alone), his true and lawful agents and
attorneys-in-fact, for him and on his behalf and in his name, place
and stead, in any and all capacities, to sign, execute,
acknowledge, deliver, and file (a) with the Securities and Exchange
Commission (or any other governmental or regulatory authority), a
Registration Statement on Form S-4 (or other appropriate form) and
any and all amendments (including post-effective amendments)
thereto, with any and all exhibits and any and all other documents
required to be filed with respect thereto or in connection
therewith, relating to the registration under the Securities Act of
1933 of Common Stock of the Corporation to be issued in the merger
between the Corporation and Commercial Bankshares, Inc.
("Commercial") wherein the Corporation agrees to exchange shares of
its common stock for all of the outstanding shares of common stock
of Commercial and merge Commercial into the Corporation, authorized
by resolutions adopted by the Board of Directors on September 28,
1993, and (b) with the securities agencies or officials of various
jurisdictions, all applications, qualifications, registrations or
exemptions relating to such offering under the laws of any such
jurisdiction, including any amendments thereto or other documents
required to be filed with respect thereto or in connection
therewith, granting unto said agents and attorneys, and each of
them, full power and authority to do and perform each and every act
and thing requisite and necessary to be done in and about the
premises in order to effectuate the same as fully to all intents
and purposes as the undersigned might or could do if personally
present, and the undersigned hereby ratifies and confirms all that
said agents and attorneys-in-fact, or any of them may lawfully do
or cause to be done by virtue hereof.
IN WITNESS WHEREOF, the undersigned has hereunto set his hand on
this 26th day of October, 1993.
s/JOHN P. LABORDE
John P. Laborde
Director
HIBERNIA CORPORATION
<PAGE>
P0WER OF ATTORNEY
KNOW ALL MEN BY THESE PRESENTS, that the undersigned director of
Hibernia Corporation, a Louisiana corporation (the "Corporation"),
does hereby name, constitute and appoint Robert W. Close, Patricia
C. Meringer and Ron E. Samford, Jr., and each of them (with full
power to each of them to act alone), his true and lawful agents and
attorneys-in-fact, for him and on his behalf and in his name, place
and stead, in any and all capacities, to sign, execute,
acknowledge, deliver, and file (a) with the Securities and Exchange
Commission (or any other governmental or regulatory authority), a
Registration Statement on Form S-4 (or other appropriate form) and
any and all amendments (including post-effective amendments)
thereto, with any and all exhibits and any and all other documents
required to be filed with respect thereto or in connection
therewith, relating to the registration under the Securities Act of
1933 of Common Stock of the Corporation to be issued in the merger
between the Corporation and Commercial Bankshares, Inc.
("Commercial") wherein the Corporation agrees to exchange shares of
its common stock for all of the outstanding shares of common stock
of Commercial and merge Commercial into the Corporation, authorized
by resolutions adopted by the Board of Directors on September 28,
1993, and (b) with the securities agencies or officials of various
jurisdictions, all applications, qualifications, registrations or
exemptions relating to such offering under the laws of any such
jurisdiction, including any amendments thereto or other documents
required to be filed with respect thereto or in connection
therewith, granting unto said agents and attorneys, and each of
them, full power and authority to do and perform each and every act
and thing requisite and necessary to be done in and about the
premises in order to effectuate the same as fully to all intents
and purposes as the undersigned might or could do if personally
present, and the undersigned hereby ratifies and confirms all that
said agents and attorneys-in-fact, or any of them may lawfully do
or cause to be done by virtue hereof.
IN WITNESS WHEREOF, the undersigned has hereunto set his hand on
this 26th day of October, 1993.
s/SIDNEY W. LASSEN
Sidney W. Lassen
Director
HIBERNIA CORPORATION
<PAGE>
P0WER OF ATTORNEY
KNOW ALL MEN BY THESE PRESENTS, that the undersigned Vice
Chairman and director of Hibernia Corporation, a Louisiana
corporation (the "Corporation"), does hereby name, constitute and
appoint Robert W. Close, Patricia C. Meringer and Ron E. Samford,
Jr., and each of them (with full power to each of them to act
alone), his true and lawful agents and attorneys-in-fact, for him
and on his behalf and in his name, place and stead, in any and all
capacities, to sign, execute, acknowledge, deliver, and file (a)
with the Securities and Exchange Commission (or any other
governmental or regulatory authority), a Registration Statement on
Form S-4 (or other appropriate form) and any and all amendments
(including post-effective amendments) thereto, with any and all
exhibits and any and all other documents required to be filed with
respect thereto or in connection therewith, relating to the
registration under the Securities Act of 1933 of Common Stock of
the Corporation to be issued in the merger between the Corporation
and Commercial Bankshares, Inc. ("Commercial") wherein the
Corporation agrees to exchange shares of its common stock for all
of the outstanding shares of common stock of Commercial and merge
Commercial into the Corporation, authorized by resolutions adopted
by the Board of Directors on September 28, 1993, and (b) with the
securities agencies or officials of various jurisdictions, all
applications, qualifications, registrations or exemptions relating
to such offering under the laws of any such jurisdiction, including
any amendments thereto or other documents required to be filed with
respect thereto or in connection therewith, granting unto said
agents and attorneys, and each of them, full power and authority to
do and perform each and every act and thing requisite and necessary
to be done in and about the premises in order to effectuate the
same as fully to all intents and purposes as the undersigned might
or could do if personally present, and the undersigned hereby
ratifies and confirms all that said agents and attorneys-in-fact,
or any of them may lawfully do or cause to be done by virtue
hereof.
IN WITNESS WHEREOF, the undersigned has hereunto set his hand on
this 26th day of October, 1993.
s/DONALD J. NALTY
Donald J. Nalty
Vice Chairman and
Director
HIBERNIA CORPORATION
<PAGE>
P0WER OF ATTORNEY
KNOW ALL MEN BY THESE PRESENTS, that the undersigned director of
Hibernia Corporation, a Louisiana corporation (the "Corporation"),
does hereby name, constitute and appoint Robert W. Close, Patricia
C. Meringer and Ron E. Samford, Jr., and each of them (with full
power to each of them to act alone), his true and lawful agents and
attorneys-in-fact, for him and on his behalf and in his name, place
and stead, in any and all capacities, to sign, execute,
acknowledge, deliver, and file (a) with the Securities and Exchange
Commission (or any other governmental or regulatory authority), a
Registration Statement on Form S-4 (or other appropriate form) and
any and all amendments (including post-effective amendments)
thereto, with any and all exhibits and any and all other documents
required to be filed with respect thereto or in connection
therewith, relating to the registration under the Securities Act of
1933 of Common Stock of the Corporation to be issued in the merger
between the Corporation and Commercial Bankshares, Inc.
("Commercial") wherein the Corporation agrees to exchange shares of
its common stock for all of the outstanding shares of common stock
of Commercial and merge Commercial into the Corporation, authorized
by resolutions adopted by the Board of Directors on September 28,
1993, and (b) with the securities agencies or officials of various
jurisdictions, all applications, qualifications, registrations or
exemptions relating to such offering under the laws of any such
jurisdiction, including any amendments thereto or other documents
required to be filed with respect thereto or in connection
therewith, granting unto said agents and attorneys, and each of
them, full power and authority to do and perform each and every act
and thing requisite and necessary to be done in and about the
premises in order to effectuate the same as fully to all intents
and purposes as the undersigned might or could do if personally
present, and the undersigned hereby ratifies and confirms all that
said agents and attorneys-in-fact, or any of them may lawfully do
or cause to be done by virtue hereof.
IN WITNESS WHEREOF, the undersigned has hereunto set his hand on
this 26th day of October, 1993.
s/JOE D. SMITH, JR.
Joe D. Smith, Jr.
Director
HIBERNIA CORPORATION
<PAGE>
P0WER OF ATTORNEY
KNOW ALL MEN BY THESE PRESENTS, that the undersigned director of
Hibernia Corporation, a Louisiana corporation (the "Corporation"),
does hereby name, constitute and appoint Robert W. Close, Patricia
C. Meringer and Ron E. Samford, Jr., and each of them (with full
power to each of them to act alone), his true and lawful agents and
attorneys-in-fact, for him and on his behalf and in his name, place
and stead, in any and all capacities, to sign, execute,
acknowledge, deliver, and file (a) with the Securities and Exchange
Commission (or any other governmental or regulatory authority), a
Registration Statement on Form S-4 (or other appropriate form) and
any and all amendments (including post-effective amendments)
thereto, with any and all exhibits and any and all other documents
required to be filed with respect thereto or in connection
therewith, relating to the registration under the Securities Act of
1933 of Common Stock of the Corporation to be issued in the merger
between the Corporation and Commercial Bankshares, Inc.
("Commercial") wherein the Corporation agrees to exchange shares of
its common stock for all of the outstanding shares of common stock
of Commercial and merge Commercial into the Corporation, authorized
by resolutions adopted by the Board of Directors on September 28,
1993, and (b) with the securities agencies or officials of various
jurisdictions, all applications, qualifications, registrations or
exemptions relating to such offering under the laws of any such
jurisdiction, including any amendments thereto or other documents
required to be filed with respect thereto or in connection
therewith, granting unto said agents and attorneys, and each of
them, full power and authority to do and perform each and every act
and thing requisite and necessary to be done in and about the
premises in order to effectuate the same as fully to all intents
and purposes as the undersigned might or could do if personally
present, and the undersigned hereby ratifies and confirms all that
said agents and attorneys-in-fact, or any of them may lawfully do
or cause to be done by virtue hereof.
IN WITNESS WHEREOF, the undersigned has hereunto set his hand on
this 26th day of October, 1993.
s/JAMES H. STONE
James H. Stone
Director
HIBERNIA CORPORATION
<PAGE>
P0WER OF ATTORNEY
KNOW ALL MEN BY THESE PRESENTS, that the undersigned director of
Hibernia Corporation, a Louisiana corporation (the "Corporation"),
does hereby name, constitute and appoint Robert W. Close, Patricia
C. Meringer and Ron E. Samford, Jr., and each of them (with full
power to each of them to act alone), his true and lawful agents and
attorneys-in-fact, for him and on his behalf and in his name, place
and stead, in any and all capacities, to sign, execute,
acknowledge, deliver, and file (a) with the Securities and Exchange
Commission (or any other governmental or regulatory authority), a
Registration Statement on Form S-4 (or other appropriate form) and
any and all amendments (including post-effective amendments)
thereto, with any and all exhibits and any and all other documents
required to be filed with respect thereto or in connection
therewith, relating to the registration under the Securities Act of
1933 of Common Stock of the Corporation to be issued in the merger
between the Corporation and Commercial Bankshares, Inc.
("Commercial") wherein the Corporation agrees to exchange shares of
its common stock for all of the outstanding shares of common stock
of Commercial and merge Commercial into the Corporation, authorized
by resolutions adopted by the Board of Directors on September 28,
1993, and (b) with the securities agencies or officials of various
jurisdictions, all applications, qualifications, registrations or
exemptions relating to such offering under the laws of any such
jurisdiction, including any amendments thereto or other documents
required to be filed with respect thereto or in connection
therewith, granting unto said agents and attorneys, and each of
them, full power and authority to do and perform each and every act
and thing requisite and necessary to be done in and about the
premises in order to effectuate the same as fully to all intents
and purposes as the undersigned might or could do if personally
present, and the undersigned hereby ratifies and confirms all that
said agents and attorneys-in-fact, or any of them may lawfully do
or cause to be done by virtue hereof.
IN WITNESS WHEREOF, the undersigned has hereunto set his hand on
this 26th day of October, 1993.
s/ERNEST L. WILLIAMSON
Ernest L. Williamson
Director
HIBERNIA CORPORATION
<PAGE>
P0WER OF ATTORNEY
KNOW ALL MEN BY THESE PRESENTS, that the undersigned director of
Hibernia Corporation, a Louisiana corporation (the "Corporation"),
does hereby name, constitute and appoint Robert W. Close, Patricia
C. Meringer and Ron E. Samford, Jr., and each of them (with full
power to each of them to act alone), his true and lawful agents and
attorneys-in-fact, for him and on his behalf and in his name, place
and stead, in any and all capacities, to sign, execute,
acknowledge, deliver, and file (a) with the Securities and Exchange
Commission (or any other governmental or regulatory authority), a
Registration Statement on Form S-4 (or other appropriate form) and
any and all amendments (including post-effective amendments)
thereto, with any and all exhibits and any and all other documents
required to be filed with respect thereto or in connection
therewith, relating to the registration under the Securities Act of
1933 of Common Stock of the Corporation to be issued in the merger
between the Corporation and Commercial Bankshares, Inc.
("Commercial") wherein the Corporation agrees to exchange shares of
its common stock for all of the outstanding shares of common stock
of Commercial and merge Commercial into the Corporation, authorized
by resolutions adopted by the Board of Directors on September 28,
1993, and (b) with the securities agencies or officials of various
jurisdictions, all applications, qualifications, registrations or
exemptions relating to such offering under the laws of any such
jurisdiction, including any amendments thereto or other documents
required to be filed with respect thereto or in connection
therewith, granting unto said agents and attorneys, and each of
them, full power and authority to do and perform each and every act
and thing requisite and necessary to be done in and about the
premises in order to effectuate the same as fully to all intents
and purposes as the undersigned might or could do if personally
present, and the undersigned hereby ratifies and confirms all that
said agents and attorneys-in-fact, or any of them may lawfully do
or cause to be done by virtue hereof.
IN WITNESS WHEREOF, the undersigned has hereunto set his hand on
this 26th day of October, 1993.
s/ROBERT E. ZETZMANN
Robert E. Zetzmann
Director
HIBERNIA CORPORATION
