<PAGE>
SECURITIES AND EXCHANGE COMMISSION
Washington, D. C. 20549
FORM 10-Q
QUARTERLY REPORT UNDER SECTION 13 OR 15(d)
OF THE SECURITIES EXCHANGE ACT OF 1934
For Quarter Ended June 30, 1995 Commission File Number 1-10294
HIBERNIA CORPORATION
(Exact name of registrant as specified in its charter)
Louisiana 72-0724532
(State or other jurisdiction of (I.R.S. Employer
incorporation or organization) Identification Number)
313 Carondelet Street, New Orleans, Louisiana 70130
(Address of principal executive offices and zip code)
Registrant's telephone number, including area code (504) 533-5332
Indicate by check mark whether the registrant (1) has filed all reports required
to be filed by Section 13 or 15(d) of the Securities Exchange Act of 1934 during
the preceding 12 months (or for such shorter period that the registrant was
required to file such reports), and (2) has been subject to such filing
requirements for the past 90 days.
Yes X No
Indicate the number of shares outstanding of each of the issuer's classes of
common stock, as of the latest practicable date.
Class Outstanding at July 31, 1995
Class A Common Stock, no par value 119,265,191 Shares
<PAGE>
<TABLE>
Consolidated Balance Sheets
<CAPTION>
Hibernia Corporation and Subsidiaries June 30 December 31 June 30
Unaudited ($ in thousands) 1995 1994 1994
<S> <C> <C> <C>
Assets
Cash and due from banks $349,476 $363,867 $301,516
Short-term investments 26,755 194,477 109,322
Securities available for sale 542,773 556,252 725,227
Securities held to maturity (estimated fair values at
June 30, 1995, December 31, 1994 and June 30, 1994,
were $1,819,215, $1,703,807, and $1,860,691, respectively) 1,818,750 1,773,317 1,931,979
Loans, net of unearned income 3,840,665 3,483,732 3,232,803
Reserve for possible loan losses (149,090) (150,668) (179,624)
Loans, net 3,691,575 3,333,064 3,053,179
Bank premises and equipment 112,492 113,229 110,093
Customers' acceptance liability 115 4,589 9,730
Other assets 194,843 177,616 191,375
Total assets $6,736,779 $6,516,411 $6,432,421
Liabilities
Deposits:
Demand, noninterest-bearing $1,073,305 $1,091,381 $1,013,388
Interest-bearing 4,668,949 4,577,251 4,525,574
Total deposits 5,742,254 5,668,632 5,538,962
Short-term borrowings 259,251 159,930 184,520
Liability on acceptances 115 4,589 9,730
Other liabilities 105,991 104,180 123,319
Debt 4,748 5,650 24,446
Total liabilities 6,112,359 5,942,981 5,880,977
Shareholders' equity
Preferred Stock, no par value:
Authorized - 100,000,000 shares; issued and
outstanding - none - - -
Class A Common Stock, no par value:
Authorized - 200,000,000 shares; issued 113,442,399,
113,325,398, and 112,738,867 at June 30, 1995,
December 31, 1994, and June 30, 1994, respectively 217,810 217,585 216,458
Surplus 387,315 387,028 384,339
Retained earnings 35,998 (6,257) (38,779)
Treasury stock at cost, 10,746 and 300,000 shares at June 30, 1995
and December 31, 1994, respectively (94) (2,414) -
Unearned compensation (16,044) - -
Unrealized loss on securities available for sale (565) (22,512) (10,574)
Total shareholders' equity 624,420 573,430 551,444
Total liabilities and shareholders' equity $6,736,779 $6,516,411 $6,432,421
See notes to consolidated financial statements.
</TABLE>
<PAGE>
<TABLE>
Consolidated Income Statements
<CAPTION>
Hibernia Corporation and Subsidiaries
Three Months Ended Six Months Ended
June 30 June 30
Unaudited ($ in thousands, except per share data) 1995 1994 1995 1994
<S> <C> <C> <C> <C>
Interest income
Interest and fees on loans $85,692 $66,170 $166,307 $128,800
Interest on securities available for sale 9,235 10,434 18,603 19,990
Interest on securities held to maturity 28,940 26,530 55,984 53,257
Interest on short-term investments 466 1,440 2,911 3,570
Total interest income 124,333 104,574 243,805 205,617
Interest expense
Interest on deposits 50,664 35,256 99,023 68,561
Interest on short-term borrowings 3,722 1,359 5,811 2,541
Interest on debt 72 611 146 1,346
Total interest expense 54,458 37,226 104,980 72,448
Net interest income 69,875 67,348 138,825 133,169
Provision for possible loan losses - 285 - 820
Net interest income after provision
for possible loan losses 69,875 67,063 138,825 132,349
Noninterest income
Service charges on deposits 10,210 10,960 20,615 21,207
Trust fees 2,882 3,402 5,703 6,448
Other service, collection and exchange charges 6,942 5,292 12,768 10,632
Gain on divestiture of banking offices - - 2,361 -
Gain on sale of business lines 3,064 - 3,064 -
Other operating income 1,482 2,179 3,371 5,123
Securities gains, net - - - 185
Total noninterest income 24,580 21,833 47,882 43,595
Noninterest expense
Salaries and employee benefits 29,865 32,132 59,727 61,491
Occupancy expense, net 6,176 6,177 12,105 12,294
Equipment expense 4,665 3,387 8,979 7,035
Data processing expense 4,333 4,980 9,761 10,131
Foreclosed property expense, net (306) (480) (535) (4,191)
Other operating expense 19,123 21,241 37,494 42,985
Total noninterest expense 63,856 67,437 127,531 129,745
Income before income taxes 30,599 21,459 59,176 46,199
Income tax expense 1,790 1,095 3,915 2,395
Net income $28,809 $20,364 $55,261 $43,804
Net income per share $0.26 $0.18 $0.49 $0.39
See notes to consolidated financial statements.
</TABLE>
<PAGE>
<TABLE>
Consolidated Statements of Changes in Shareholders' Equity
<CAPTION>
Hibernia Corporation and Subsidiaries
Unrealized
Shares of Gains (Losses)
Common on Securities
Six Months Ended June 30, 1995 Stock Common Retained Treasury Available Unearned
Unaudited ($ in thousands) Outstanding Stock Surplus Earnings Stock for Sale Compensation Total
<S> <C> <C> <C> <C> <C> <C> <C> <C>
Balances at December 31, 1994 113,025,398 $217,585 $387,028 ($6,257) ($2,414) ($22,512) $ - $573,430
Net income - - - 55,261 - - - 55,261
Issuance of common stock:
Dividend Reinvestment Plan 88,637 170 477 - - - - 647
Stock Option Plan 5,972 12 27 - - - - 39
Retirement Security Plan 62,845 - (32) - 512 - - 480
Performance Stock Awards 259,547 43 (160) - 1,902 - - 1,785
Aquisition of treasury stock (10,746) - - - (94) - - (94)
Purchase of common shares by ESOP - - - - - - (16,044) (16,044)
Cash dividends declared ($.12 per share) - - - (13,100) - - - (13,100)
Change in unrealized gains (losses) on
securities available for sale - - - - - 21,947 - 21,947
Other - - (25) 94 - - - 69
Balances at June 30, 1995 113,431,653 $217,810 $387,315 $35,998 ($94) ($565) ($16,044) $624,420
</TABLE>
<TABLE>
Unrealized
Shares of Gains (Losses)
Common on Securities
Six Months Ended June 30, 1994 Stock Common Retained Treasury Available Unearned
Unaudited ($ in thousands) Outstanding Stock Surplus Earnings Stock for Sale Compensation Total
<S> <C> <C> <C> <C> <S> <C> <C> <S><C>
Balances at December 31, 1993 112,632,871 $216,255 $383,722 ($75,310)$ - $13,035 ($400) $537,302
Net income - - - 43,804 - - - 43,804
Issuance of common stock:
Dividend Reinvestment Plan 101,321 194 603 - - - - 797
Stock Option Plan 4,675 9 14 - - - - 23
Cash dividends declared:
Common ($.08 per share) - - - (6,691) - - - (6,691)
By pooled companies prior to merger - - - (582) - - - (582)
Change in unrealized gains (losses) on
securities available for sale - - - - - (23,609) - (23,609)
Reduction of ESOP commitment - - - - - - 400 400
Balances at June 30, 1994 112,738,867 $216,458 $384,339 ($38,779)$ - ($10,574) $ - $551,444
See notes to consolidated financial statements.
</TABLE>
<PAGE>
<TABLE>
Consolidated Statements of Cash Flows
<CAPTION>
Hibernia Corporation and Subsidiaries
Six Months Ended June 30
Unaudited ($ in thousands) 1995 1994
<S> <C> <C>
Operating Activities
Net income $55,261 $43,804
Adjustments to reconcile net income to net cash
provided by operating activities:
Provision for possible loan losses 0 820
Amortization of intangibles and deferred charges 1,785 3,080
Depreciation and amortization 8,151 6,932
Premium amortization, net of discount accretion 3,663 8,828
Realized securities gains, net 0 (185)
Gain on sale of assets (895) (4,475)
Gain on divestiture of banking offices (2,361) 0
Gain on sale of business lines (3,064) 0
Provision for losses on foreclosed and other assets 149 840
Increase in deferred income tax asset (6,910) (8,876)
Increase in interest receivable and other assets (11,747) (1,037)
Increase in interest payable and other liabilities 1,995 9,274
Net Cash Provided By Operating Activities 46,027 59,005
Investing Activities
Purchases of securities held to maturity (151,677) (165,836)
Purchases of securities available for sale (9,945) (244,567)
Proceeds from sales of securities available for sale 281 6,345
Maturities of securities held to maturity 103,737 167,201
Maturities of securities available for sale 43,934 131,806
Net increase in loans (521,180) (339,075)
Proceeds from sales of loans 54,213 167,953
Purchases of premises, equipment and other assets (12,055) (9,968)
Proceeds from sales of foreclosed assets 3,993 12,029
Proceeds from divestiture of banking offices, net of $1,069 cash sold (13,708) 0
Proceeds from sale of business lines 90,553 0
Proceeds from sales of premises, equipment and other assets 533 187
Net Cash Used By Investing Activities (411,321) (273,925)
Financing Activities
Net increase in domestic deposits 94,211 10,987
Net increase in time deposits - foreign office 15,355 15,487
Net increase in short-term borrowings 100,804 28,729
Payments on debt (902) (5,748)
Issuance of common stock 2,951 820
Purchase of common stock by ESOP (16,044) 0
Dividends paid (13,100) (7,273)
Aquisition of treasury stock (94) 0
Net Cash Provided By Financing Activities 183,181 43,002
Decrease in Cash and Cash Equivalents (182,113) (171,918)
Cash and Cash Equivalents at Beginning of Period 558,344 582,756
Cash and Cash Equivalents at End of Period $376,231 $410,838
See notes to consolidated financial statements.
</TABLE>
<PAGE>
Notes to Consolidated Financial Statements
Hibernia Corporation and Subsidiaries
Unaudited
Note 1 BASIS OF PRESENTATION The accompanying unaudited consolidated
financial statements have been prepared in accordance with generally accepted
accounting principles for interim financial information and with the
instructions to Form 10-Q and Article 10 of Regulation S-X. Accordingly,
they do not include all of the information and footnotes required by
generally accepted accounting principles. In the opinion of management, all
adjustments (consisting of normal recurring accruals) considered necessary
for a fair presentation have been included. Operating results for the six-
month period ended June 30, 1995, are not necessarily indicative of the
results that may be expected for the year ending December 31, 1995. For
further information, refer to the audited consolidated financial statements
and notes included in Hibernia Corporation's annual report on Form 10-K for
the year ended December 31, 1994.
Note 2 MERGER AGREEMENTS On July 1, 1995, Hibernia Corporation (the
Company) merged with Progressive Bancorporation, Inc. in a transaction
accounted for as a pooling of interests, and the subsidiary banks of the
holding companies merged simultaneously. On July 1, 1995, Hibernia National
Bank merged with Bank of St. John. This merger was accounted for as a
pooling of interests.
A merger with FNB Bancshares, Inc. is pending shareholder and regulatory
approval and is expected to be consummated in the fourth quarter of 1995. It
is anticipated that this pending merger will be accounted for as a pooling of
interests.
Note 3 EMPLOYEE BENEFIT PLANS The Company's stock option plans
provide incentive and non-qualified options to various key employees and non-
employee directors to purchase shares of Class A Common Stock at no less than
the fair market value of the stock at the date of grant. All options granted
prior to 1992 became exercisable six months from the date of grant. The
remaining options granted under the 1987 Stock Option Plan, the Long-Term
Incentive Plan and the 1993 Directors' Stock Option Plan become exercisable
in the following increments: 50% after the expiration of two years from the
date of grant, an additional 25% three years from the date of grant and the
remaining 25% four years from the date of grant.
Options granted under the 1987 Stock Option Plan generally expire 10
years from the date granted. Options granted under the Long-Term Incentive
Plan and the 1993 Directors' Stock Option Plan do not expire unless the
holder dies, retires, becomes permanently disabled or leaves the employ of
the Company, at which time the options expire at various times ranging from
30 to 365 days. All options vest immediately upon a change in control of the
Company.
At June 30, 1995, the number of shares available for grant under the
1987 Stock Option Plan, the Long-Term Incentive Plan and the 1993 Directors'
Stock Option Plan totaled 146,923; 586,520; and 765,000, respectively.
The table below summarizes the activity in the plans during the second
quarter of 1995:
<TABLE>
Incentive Non-Qualified
----------- -------------
1987 STOCK OPTION PLAN
<S> <C> <C>
Outstanding, March 31, 1995 190,741 1,359,275
Granted - 10,000
Exercised - (1,803)
------- ----------
Outstanding, June 30, 1995 190,741 1,367,472
======= ==========
Exercisable, June 30, 1995 124,198 973,932
======= ==========
LONG-TERM INCENTIVE PLAN
Outstanding, March 31, 1995 12,598 3,884,473
Granted - 24,200
Canceled - (22,788)
Issued/Exercised - (7,950)
------ ----------
Outstanding, June 30, 1995 12,598 3,877,935
====== ==========
Exercisable, June 30, 1995 - 429,539
====== ==========
1993 DIRECTORS' STOCK OPTION PLAN
Outstanding, March 31, 1995 - 155,000
Granted - 80,000
------ ---------
Outstanding, June 30, 1995 - 235,000
====== =========
Exercisable, June 30, 1995 - 37,500
====== =========
</TABLE>
Effective April 1, 1995, the Company instituted an employee stock
ownership plan (ESOP) in which substantially all employees can participate.
The ESOP is expected to acquire up to $30 million of Hibernia Corporation
Class A Common Stock in open-market purchases. At June 30, 1995, $16
million of stock (2,008,588 shares) had been acquired.
Note 4 PER SHARE DATA Income per common share is based on the
weighted average number of shares outstanding of 111,854,152 and 112,578,062
for the three months and six months ended June 30, 1995, and 112,710,644 and
112,683,601 for the three months and six months ended June 30, 1994. These
weighted averages exclude uncommitted shares held by the ESOP.
<TABLE>
QUARTERLY CONSOLIDATED SUMMARY OF INCOME
AND SELECTED FINANCIAL DATA (1)
Hibernia Corporation and Subsidiaries
<CAPTION>
Three Months Ended Six Months Ended
June 30 March 31 June 30 June 30 June 30
($ in thousands, except per-share data) 1995 1995 1994 1995 1994
<S> <C> <C> <C> <C> <C>
Interest income $124,333 $119,472 $104,574 $243,805 $205,617
Interest expense 54,458 50,522 37,226 104,980 72,448
Net interest income 69,875 68,950 67,348 138,825 133,169
Provision for possible loan losses - - 285 - 820
Net interest income after provision
for possible loan losses 69,875 68,950 67,063 138,825 132,349
Noninterest income:
Noninterest income 24,580 23,302 21,833 47,882 43,410
Securities gains (losses), net - - - - 185
Noninterest income 24,580 23,302 21,833 47,882 43,595
Noninterest expense 63,856 63,675 67,437 127,531 129,745
Income before taxes 30,599 28,577 21,459 59,176 46,199
Income tax expense 1,790 2,125 1,095 3,915 2,395
Net Income $28,809 $26,452 $20,364 $55,261 $43,804
Income per share (2) $0.26 $0.23 $0.18 $0.49 $0.39
Cash dividends declared per share (2) $0.06 $0.06 $0.04 $0.12 $0.08
Average shares outstanding (000s) (2) 111,854 113,310 112,711 112,578 112,684
Selected Quarter-End Balances (in millions)
Loans $3,840.7 $3,646.1 $3,232.8
Deposits 5,742.3 5,691.6 5,539.0
Debt 4.7 4.8 24.4
Equity 624.4 610.1 551.4
Total assets 6,736.8 6,599.9 6,432.4
Selected Average Balances (in millions)
Loans $3,779.5 $3,596.8 $3,164.7 $3,688.7 $3,104.1
Deposits 5,663.2 5,708.7 5,562.2 5,685.8 5,550.5
Debt 4.8 4.9 27.3 4.8 28.3
Equity 609.0 589.3 547.5 599.2 546.5
Total assets 6,653.1 6,598.0 6,443.8 6,625.7 6,463.2
Selected Ratios (%)
Return on average assets 1.73 1.60 1.26 1.67 1.36
Return on average equity 18.92 17.96 14.88 18.44 16.03
Net interest margin (taxable-equivalent) 4.59 4.60 4.56 4.60 4.51
Efficiency (3) 66.72 68.09 74.61 67.40 72.52
Tier 1 risk-based capital 14.77 15.51 15.07
Total risk-based capital 16.05 16.79 16.37
Leverage 9.11 9.07 8.11
(1) All financial information has been restated for mergers accounted for as poolings of interests.
Prior periods have been conformed to current-year presentation.
(2) Income per share is based on the weighted average number of common shares outstanding (net of
uncommitted ESOP shares) in the respective period. Dividends per share are historical amounts.
(3) Noninterest expense as a percentage of taxable-equivalent net interest income plus noninterest
income (excluding securities transactions).
</TABLE>
<PAGE>
MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS OF
OPERATIONS
Management's Discussion presents a review of the major factors and
trends affecting the performance of Hibernia Corporation (the "Company" or
"Hibernia") and its bank subsidiary (the "Bank") and should be read in
conjunction with the accompanying consolidated financial statements, notes
and tables. Financial data for all periods presented have been restated for
mergers accounted for as poolings of interests.
SECOND-QUARTER 1995 HIGHLIGHTS
Hibernia Corporation's second-quarter 1995 results showed continued
improvement in earnings, along with strong loan growth and improved
efficiency and asset quality.
Net income totaled $28.8 million ($.26 per share),
up 41% from $20.4 million ($.18 per share) in the
second quarter of 1994. For the first half of 1995,
net income totaled $55.3 million ($.49 per share),
a 26% increase from $43.8 million ($.39 per share)
in the first six months of 1994.
Returns on assets (ROA) and equity (ROE) increased
to 1.73% and 18.92%, respectively, for the second
quarter of 1995 compared to 1.26% and 14.88% for
the second quarter of 1994. Six-month returns on
assets and equity were 1.67% and 18.44% in 1995
compared to 1.36% and 16.03% in 1994.
Gains on the sale of the Company's student loan
portfolio and municipal bond administration
business were recorded totaling $1.5 million and
$1.6 million, respectively. These sales resulted
from strategic initiatives designed to focus
Hibernia's efforts on businesses in which it enjoys
a competitive advantage and which provide
acceptable returns on investment.
Loans grew $607.9 million (19%) from a year ago to
$3.8 billion at June 30, 1995. Consumer loans
increased $346.8 million (25%) to $1.8 billion and
commercial loans grew $261.1 million (14%) to $2.1
billion. Compared to March 31, 1995, loans
increased at an annual rate of 21% as consumer
loans grew 20% and commercial loans grew 22%.
Nonperforming assets declined to $28.4 million,
down 55% from a year ago and down 4% from $29.6
million at March 31, 1995. Nonperforming assets as
a percentage of loans plus foreclosed assets were
reduced to .74%, compared to 1.96% at June 30, 1994
and .81% at March 31, 1995.
The Company instituted an employee stock ownership
plan (ESOP). The ESOP is expected to acquire up to
$30 million of Hibernia Corporation Class A common
stock in open-market purchases. At June 30, 1995,
$16 million of stock (2,008,588 shares) had been acquired.
In July, Hibernia's board of directors declared a
regular $.06 per share dividend, a 20% increase per
share over the dividend declared in July of 1994.
Hibernia completed a merger with STABA
Bancshares/State Bank and Trust Co. with total
assets of approximately $96 million on May 1, 1995.
Pending merger activity is summarized below:
<TABLE>
Assets @ 6/30/95
Bank Holding Company / Bank (millions) Merger Date
------------------------------- ---------------- -------------
<S> <C> <C>
Progressive Bancorporation, Inc. / $150 July 1, 1995
Progressive Bank and Trust
Bank of St. John $115 July 1, 1995
FNB Bancshares, Inc. / $ 52 Fourth Quarter 1995*
The First National Bank
of Lake Providence
</TABLE>
* Estimated. Pending regulatory and shareholder approval.
FINANCIAL CONDITION:
EARNING ASSETS
Earning assets averaged $6,209.6 million in the second quarter
of 1995, a $187.3 million (3%) increase from the second-quarter
1994 average of $6,022.3 million. For the first six months of
1995, average earning assets increased $134.9 million (2%) over the
comparable period in 1994 to $6,177.4 million. Compared to the
second quarter of 1994, average loans increased $614.8 million
(19%), while securities available for sale decreased $212.0 million
(28%), securities held to maturity decreased $99.7 million (5%) and
short-term investments decreased $115.8 million (79%). For the
first half of 1995, average loans were up $584.6 million (19%),
while securities available for sale decreased $216.3 million (28%),
securities held to maturity decreased $127.0 million (6%) and
short-term investments decreased $106.4 million (52%). Hibernia
has increased its loan portfolio by offering quality service and
innovative lending products in existing markets as well as in the
markets of merger partners. The sources of funding for the
increase in loans have been redeployment from lower-yielding short-
term investments, reinvestment of proceeds from maturing securities
and increases in deposits and borrowed funds.
Loans. Average loans for the second quarter of 1995 of
$3,779.5 million were up $182.7 million (5%) from the first quarter
of 1995 and up $614.8 million (19%) compared to the second quarter
of 1994. Average loans increased $584.6 million in the first six
months of 1995 compared to the same period in 1994.
Table 1 presents the Company's loan portfolio classified
according to industry concentration at June 30, 1995, March 31,
1995 and June 30, 1994. Total loans increased $194.7 million (5%)
during the second quarter of 1995. Commercial loans increased
$110.5 million (6%), while consumer loans increased $84.2 million
(5%), primarily due to increases in adjustable-rate residential
mortgage loans, indirect lending and direct consumer loans,
partially offset by a decrease in student loans. Hibernia
management determined that student lending was not profitable and
therefore sold most of the loans in the portfolio (resulting in a
$1.5 million gain reflected in noninterest income). The remainder
of the student loan portfolio is expected to be sold during the
third quarter.
Compared to June 30, 1994, loans increased $607.9 million
(19%). Consumer loans were up $346.8 million (25%), and commercial
loans increased $261.1 million (14%). Consumer loans comprised
45.8% of the loan portfolio at June 30, 1995 compared to 43.7% at
June 30, 1994. Hibernia's lending strategy seeks growth in
consumer lending while maintaining preeminence in Louisiana
commercial lending.
Securities Available for Sale. Average securities available
for sale decreased $212.0 million (28%) from the second quarter of
1994 to $555.0 million. For the six-month period in 1995
securities available for sale averaged $558.4 million, a $216.3
million (28%) decrease from the comparable period in 1994.
Securities classified as available for sale are primarily
mortgage-backed securities.
Securities Held to Maturity. Average securities held to
maturity for the second quarter of 1995 compared to the same period
a year ago decreased $99.7 million (5%) to $1,844.1 million.
Securities held to maturity for the first six months of 1995
averaged $1,830.4 million, a $127.0 million (6%) decrease compared
to the same period in 1994. The decreases are the result of the
reinvestment of principal received from matured securities into
higher-yielding loans.
Short-Term Investments. Average short-term investments
(primarily federal funds sold) for the three months ended June 30,
1995, decreased $115.8 million (79%) compared to the second quarter
of 1994, and decreased $106.4 million (52%) for the first half of
1995 compared to the same period a year ago as the opportunities
for quality loans have continued to increase.
ASSET QUALITY
Table 2 presents a summary of nonperforming assets at the end
of the past five quarters. Table 3 presents a summary of changes
in nonperforming loans for the three-month and six-month periods
ended June 30, 1995.
Nonperforming assets -- which include nonaccrual loans,
restructured loans and foreclosed assets -- totaled $28.4 million
at June 30, 1995, down 55% compared to $63.8 million at June 30,
1994 and down 21% compared to $35.7 million at year-end 1994.
Nonperforming loans, which totaled $20.5 million at June 30, 1995,
declined $30.7 million (60%) from a year ago and $6.5 million (24%)
from year-end 1994. Foreclosed assets totaled $7.9 million at June
30, 1995, down $4.7 million (37%) from a year earlier, and down $.8
million (9%) from December 31, 1994. The reduction at June 30,
1995 was despite the transfer of $2.3 million of bank premises to
foreclosed properties due to management's decision (related to
merger activities) to discontinue the operation of these banking
facilities.
As illustrated in Table 3, $7.6 million of the decline in
nonperforming loans in 1995 was due to loans returned to performing
status. Also, payments on nonperforming loans totaled $5.3
million. As a percentage of total loans plus foreclosed assets,
nonperforming assets at June 30, 1995 improved to .74% from 1.96%
a year ago and .81% at March 31, 1995.
As of January 1, 1995, the Company adopted Statement of
Financial Accounting Standards (SFAS) No. 114, "Accounting by
Creditors for Impairment of a Loan," which, as it relates to in-
substance foreclosures, requires that a creditor receives physical
possession of the collateral. Accordingly, upon adoption, $7.1
million of in-substance foreclosures were transferred from
foreclosed assets to nonperforming loans and related loss reserves
of $.2 million were transferred to the reserve for possible loan
losses. The Company reclassified in-substance foreclosures and
related loss reserves for all prior periods to conform to the new
classification requirements. At June 30, 1995, the recorded
investment in loans that were considered to be impaired under SFAS
No. 114 was $19.3 million. The related reserve for possible loan
losses was $1.4 million. These loans are included in nonaccrual
loans in Table 2.
In addition to the nonperforming assets discussed above,
management has identified other commercial loans for which payments
are current that are subject to potential future classification as
nonperforming. As of June 30, 1995, these loans totaled $6.4
million, compared to $46.8 million at June 30, 1994 and $6.8
million at March 31, 1995.
RESERVE AND PROVISION FOR POSSIBLE LOAN LOSSES
The Company recorded no provision for possible loan losses for
the second quarter of 1995 or for the first six months of 1995
compared to provisions of $.3 million and $.8 million for the same
periods in 1994. The absence of a provision in 1995 was the result
of continued improvement in asset quality, evidenced by lower
levels of nonperforming loans. With the declining level of
nonperforming loans and low net charge-offs, the reserve coverage
continued to strengthen. The reserve for possible loan losses as
a percentage of nonperforming loans increased to 729% at June 30,
1995, compared to 351% a year ago, and 705% at March 31, 1995.
Net charge-offs totaling $1.4 million were recorded in the
second quarter of 1995, compared to $1.1 million in the second
quarter of 1994. For the six months ended June 30, net charge-offs
totaled $1.6 million in both 1995 and 1994. As a percentage of
average loans, annualized net charge-offs were .15% for the second
quarter of 1995 and .09% for the first six months of 1995 while net
charge-offs were .14% and .10% for the comparable periods in 1994.
The reserve for possible loan losses totaled $149.1 million,
or 3.9% of total loans, at June 30, 1995, compared to $179.6
million, or 5.6%, a year earlier. Even though the reserve for
possible loan losses has been declining over the last five
quarters, in terms of both dollar amount and as a percentage of
loans, the present level is considered adequate to absorb future
potential loan losses. In making this determination, management
considered the significant improvements in asset quality discussed
earlier, and the reduced levels of net loan charge-offs, as well as
current economic conditions and market trends. Because factors
such as loan growth and the future collectibility of loans are
uncertain, the level of future provisions (positive or negative),
if any, cannot be predicted. Table 4 presents an analysis of the
activity in the reserve for possible loan losses for the three
month and six month periods of 1995 and 1994.
FUNDING SOURCES:
DEPOSITS AND BORROWINGS
Deposits. Average deposits totaled $5,663.2 million in the
second quarter of 1995, a $101.0 million (2%) increase from the
second quarter of 1994. Average core deposits were up $27.9
million (1%) due to an increase in consumer time deposits,
partially offset by a moderate decrease in money market deposit
accounts as rising rates made these accounts less competitive with
other investment products. Hibernia's OneWay certificates of
deposit almost doubled in the last year totaling $760.4 million at
June 30, 1995. These certificates of deposit allow customers to
lock-in attractive current yields and also provide a one-time
option to adjust the rate at any time during the two-year term.
The OneWay CD enabled Hibernia to retain much of the funds leaving
money market deposit accounts and attract new funds. Noncore
deposits increased $73.1 million (9%) from the second quarter of
1994 as public fund certificates of deposit increased $76.4 million
and foreign time deposits increased $17.2 million, while other
large denomination certificates of deposits decreased $20.5
million.
Table 5 presents the composition of average deposits for the
second and first quarters of 1995 and the second quarter of 1994.
Borrowings. Average borrowings (which include federal funds
purchased, securities sold under agreements to repurchase and debt)
increased $76.8 million to $275.1 million for the second quarter of
1995 compared to the second quarter of 1994. For the first six
months of 1995 average borrowed funds totaled $225.0 million
compared to $195.0 million for the first six months of 1994.
Short-term borrowings in the second quarter of 1995 increased
$99.3 million over the comparable period in 1994 while the increase
for the first six months of 1995 over the same period in 1994 was
$53.5 million. The increases were necessitated by the expansion of
lending opportunities at a faster rate than other funding sources
(deposits and proceeds from maturing securities). The Company's
reliance on these funds, while higher than a year ago, is still
within parameters determined by management to be prudent in terms
of liquidity and rate sensitivity. The increases in short-term
borrowings were partially offset by decreases in long-term debt
totaling $22.5 million for the second quarter of 1995 compared to
the same period in 1994 and $23.5 million for the first six months
of 1995 compared to the first half of 1994. These reductions
reflect the Company's practice of retiring debt acquired through
mergers if the terms of such debt are not favorable. The Company's
long-term debt at June 30, 1995 is comprised primarily of Federal
Home Loan Bank of Dallas advances totaling $3.5 million obtained to
fund specific loans.
INTEREST RATE SENSITIVITY
The primary objective of asset/liability management is
controlling interest rate risk. On a monthly basis, management
monitors the sensitivity of net interest income to changes in
interest rates through methods that include simulation and gap
reports, and attempts to optimize the asset/liability mix to
minimize the impact of significant rate movements within a broad
range of interest rate scenarios. Management may alter the mix of
floating- and fixed-rate assets and liabilities, change pricing
schedules and enter into derivative contracts as a means of
limiting interest rate risk. As mentioned above, Hibernia's
reliance on short-term federal funds has increased in the past
year. One measure of reliance on federal funds and other large
liabilities (such as large-denomination and public fund CD's and foreign
deposits) is the large liability dependence ratio. For the second quarter of
1995, 18.33% of Hibernia's loans and investment securities were funded by net
large liabilities (total large liabilities less short-term investments) compared
to 14.37% for the comparable period in 1994. Management monitors this ratio
and believes the current level to be prudent.
On a limited basis, the Company has entered into interest rate
swap, forward and option contracts to hedge interest rate risk on
specific assets and liabilities. The total notional amount of
these contracts at June 30, 1995 was $10.0 million. Derivative
financial instruments are also held or issued by the Company for
trading purposes to provide Hibernia customers the ability to
manage their own interest rate and foreign exchange risk. In
general, matched trading positions are established to minimize risk
to the Company. The notional value of these instruments totaled
$269.4 million with net current exposure of less than $100 thousand
at June 30, 1995.
RESULTS OF OPERATIONS:
NET INTEREST INCOME
Taxable-equivalent net interest income for the three months
ended June 30, 1995, totaled $71.1 million, a $2.6 million increase
from the same period in 1994 and a $.9 million increase from the
first quarter of 1995. For the first six months of 1995, net
interest income totaled $141.3 million, up $5.8 million from the
comparable period in 1994. Factors contributing to these increases
were the positive effect of the change in the mix of earning assets
from lower-yielding investments to loans (60.9% of average earning
assets in the second quarter of 1995 compared to 52.5% in the
second quarter of 1994); the higher value of Hibernia's net
noninterest bearing funds (demand deposits, other liabilities and
equity, net of nonearning assets); overall growth in earning
assets; interest income realized on loans previously charged-off;
and higher yields on securities and loans. These factors were
partially offset by higher rates paid on deposits and the shift of
deposits from lower rate money market deposits into certificates of
deposits.
The net interest margin was 4.59% for the second quarter of
1995 compared to 4.56% in the second quarter of 1994 and 4.60% in
the first quarter of 1995. For the six months ended June 30, the
net interest margin was 4.60% in 1995 and 4.51% in 1994. The net
interest margin has remained relatively stable over the past five
quarters despite pressure on the net interest spread as the value
of Hibernia's noninterest-bearing funds has increased in the
current rate environment. However, this spread between the yield
on earning assets and the average rate paid on interest-bearing
liabilities may continue to experience pressure as funding costs
continue to increase due to the repricing of maturing deposits to
current market rates and Hibernia's increasing reliance on higher-
cost sources of funds. Table 6 details the net interest margin for
the most recent five quarters.
Table 7 presents an analysis of the Company's taxable-
equivalent net interest income and average balance sheets for the
three months ended June 30, 1995, March 31, 1995 and June 30, 1994,
and for the first six months of 1995 and 1994. Table 8 presents an
analysis of changes in taxable-equivalent net interest income
between the second quarter of 1995 and the first quarter of 1995
and between the second quarter of 1995 and the second quarter of
1994.
NONINTEREST INCOME
Noninterest income for the second quarter of 1995 was up $2.7
million (13%) to $24.6 million compared to the same period of 1994
and up $4.3 million (10%) to $47.9 million for the first six months
of 1995 compared to the same period in 1994. The increase in
noninterest income in the second quarter of 1995 was due to the
sale of the Company's student loan portfolio and municipal bond
administration business. These sales, which produced gains of $1.5
million and $1.6 million, respectively, resulted from strategic
initiatives designed to focus Hibernia's efforts on businesses in
which it enjoys a competitive advantage and which provide
acceptable returns on investment. The student loan business was
unprofitable, and the municipal bond administration business lacked
appropriate scale. The first six months of 1995 also included a
$2.4 million gain related to divestiture of three banking offices
in Northwest Louisiana in connection with Hibernia's merger with
Pioneer Bancshares Corporation.
Excluding these gains, noninterest income for the second
quarter and first six months of 1995 would have been $21.5 million
and $42.5 million, respectively. The major categories of
noninterest income for the three months and six months ended June
30, 1995 and the comparable periods in 1994 are presented in Table
9.
Trust fees decreased $.5 million (15%) for the second quarter
of 1995 compared to the same period in 1994 and $.7 million (12%)
for the first six months of 1995, primarily due to the sale of the
Bank's municipal bond administration business.
Service charges on deposits decreased $.8 million (7%) for the
1995 quarter and $.6 million (3%) for the first half of 1995. The
value of balances maintained by commercial customers increased in
1995 compared to 1994 due to higher money market rates. Many
customers "paid" for Bank services with these balances instead of
by payment of fees.
Other service, collection and exchange fees were up $1.7
million (31%) in the second quarter of 1995 compared to the second
quarter of 1994 and up $2.1 million (20%) for the first six months
of 1995 compared to the same period of 1994. The major factors in
these increases were significant growth in fees generated by the
Bank's upgraded and expanded ATM network and an increase in
commissions from the sale of credit life insurance and fees related
to loans.
Other income rose $2.4 million (109%) in the second quarter of
1995 and $3.7 million (72%) for the first half of 1995 compared to
the same periods in 1994. The second quarter of 1995 included a
$1.6 million gain resulting from the sale of the Bank's municipal
bond administration business and a $1.5 million gain due to the
sale of the student loan portfolio. The first half of 1995 included
the second quarter gains and a $2.4 million gain related to the
divestiture of three banking offices. In addition to these
nonrecurring gains, other income increased for the quarter and six
months due to an increase in gains related to the sale of mortgage
loans, partially offset by a decrease in income from computer
services provided to third parties as the Company shifts its focus
away from this business.
There were no securities gains in the second quarter or first
six months of 1995, compared to $.2 million in gains for the first
six months of 1994.
NONINTEREST EXPENSE
For the second quarter of 1995, noninterest expense totaled
$63.9 million, a $3.6 million (5%) decrease from the second quarter
of 1994. For the first six months of 1995, noninterest expense
decreased $2.2 million (2%) compared to the same period in 1994.
Noninterest expense for the three months and six months ended June
30, 1995 and 1994, is presented by major category in Table 10.
Staff costs, the largest component of noninterest expense,
decreased $2.3 million (7%) in the second quarter of 1995 and $1.8
million (3%) for the first six months of 1995 compared to the same
periods a year ago. Severance costs in 1994 and efficiencies
achieved related to merger activities were the major factors
contributing to these decreases.
Equipment expenses increased $1.3 million (38%) in the second
quarter of 1995 and $1.9 million (28%) for the first six months of
1995 compared to the same periods in 1994 due to higher
depreciation expenses related to the purchase of computer equipment
to facilitate mergers and to upgrade the Company's teller systems
and ATM network.
Data processing expenses decreased $.6 million (13%) and $.4
million (4%) in the second quarter of 1995 and the first six months
of 1995, respectively. The decreases are primarily due to lower
processing expenses due to Hibernia's conversion to a new data
processor. The second quarter of 1995 data processing expense of
$4.3 million includes a $.5 million charge related to the planned
outsourcing of trust operations. In addition, Hibernia completed
its conversion to the new data processor during the first quarter
of 1995, resulting in approximately $1.0 million in duplicate
expenses.
Income from foreclosed property, net of expenses, totaled $.3
million in the second quarter of 1995, compared to $.5 million for
the same period a year ago. For the six month period, income from
foreclosed property totaled $.5 million in 1995 and $4.2 million in
1994 as the first quarter of 1994 included significant gains on the
sale of several properties included in foreclosed assets.
Deposit insurance premiums decreased $.5 million (14%) in the
1995 quarter compared to 1994 and $.7 million (9%) in the first six
months of 1995 quarter compared to 1994. Computed under the risk-
based premium system, the deposit insurance premium declined
because of reductions in the assessment rate used in the
calculation of the premiums. These reductions reflect the Bank's
improved rating from the Office of the Comptroller of the Currency.
Postage rose by more than 25% in both the second quarter and
first six months of 1995 due to increased mailings related to
mergers and the postal rate increase which became effective January
1, 1995. Telecommunications expenses increased over 100% in both
periods as Hibernia built and outsourced the operation of its own
wide area network instead of using the network of its data
processing provider. In addition, data line expenses related to
its enhanced ATM network also increased telecommunications
expenses.
Professional fees decreased $2.2 million (63%) and $2.1
million (36%) in the second quarter of 1995 and the first six
months of 1995, respectively. The 1994 level of professional fees was higher
due to merger-related expenses.
State taxes on equity increased $.3 million (47%) in the 1995
quarter compared to 1994 and $.7 million (47%) in the first six
months of 1995 compared to 1994 due to the increased level of
equity.
Advertising and promotional expenses rose because of merger-
related marketing efforts and a general increase in advertising and
product development. Other noninterest expenses decreased $2.3
million (26%) to $6.7 million in the second quarter of 1995 and
down $7.2 million (36%) for the first six months of 1995 compared
to the same period in 1994 as amortization of intangibles decreased
$.6 million for the quarter and $1.2 million for the first half of
1995 due to the lower level of intangibles as the result of the
writeoff of impaired goodwill in the third quarter of 1994.
The Company's efficiency ratio, defined as noninterest expense
as a percentage of taxable-equivalent net interest income plus
noninterest income (excluding securities transactions), was 66.72%
for the second quarter of 1995 compared to 74.61% for the same
period in 1994. The ratio for the first six months of 1995
compared to 1994 showed a similar decline -- to 67.40% from 72.52%.
The improvement in efficiency reflects continued cost control
efforts and increases in net interest income and noninterest
income.
INCOME TAXES
The Company recorded provisions for income taxes of $1.8
million in the second quarter of 1995 and $3.9 million in the first
half of 1995. Provisions recorded in the comparable periods in
1994 were $1.1 million and $2.4 million, respectively. During
1995, the Company recorded federal income taxes at a lower-than-
normal effective tax rate due to previously unrecognized deferred
tax benefits. Hibernia will recognize federal income tax expense
throughout 1995, but at an estimated annual effective tax rate
significantly less than the statutory tax rate. The deferred tax
benefits are expected to be fully recognized by the end of 1995, so
that beginning in 1996, the Company's effective tax rate will
approach the statutory stat and federal tax rates.
The Bank is subject to a Louisiana shareholder tax based
partly on income. The income portion of this tax is recorded as
state income tax. In addition, certain subsidiaries of the Company
and the Bank are subject to Louisiana state income tax.
CAPITAL
Shareholders' equity totaled $624.4 million at June 30, 1995,
compared to $551.4 million at June 30, 1994. The increase is
primarily the result of net income over the most recent 12 months
totaling $99.4 million and a $10.0 million decrease in unrealized
losses on securities available for sale, partially offset by $24.7
million in dividends and a $16.0 million increase in unearned
compensation related to the ESOP instituted on April 1, 1995.
Risk-based capital and leverage ratios for the Company and the Bank
exceed the ratios required for designation as a "well-capitalized"
institution under regulatory guidelines. Table 11 presents these
ratios for the Company and the Bank for the most recent five
quarters.
LIQUIDITY
The Company's loan-to-deposit ratio, one measure of liquidity,
was 66.9% at June 30, 1995, 64.1% at March 31, 1995 and 58.4% at
June 30, 1994. Management believes that the Company's projected
liquidity needs can be met by conversion of short-term investments
and assets available for sale to cash, and with deposits generated
by Hibernia's extensive retail office network. In addition, the
Company's strong financial condition and profitability give
Hibernia ample access to large-denomination liabilities as a source
of liquidity. These include certificates of deposit greater then
$100,000 and public funds deposits, as well as funds which can be
purchased through the Bank's membership in the Federal Home Loan
Bank of Dallas and from correspondent banks.
<PAGE>
<TABLE>
TABLE 1 - COMPOSITION OF LOAN PORTFOLIO
<CAPTION>
June 30, 1995 March 31, 1995 June 30, 1994
Loans Percent Loans Percent Loans Percent
($ in millions) Outstanding of Total Outstanding of Total Outstanding of Total
<S> <C> <C> <C> <C> <C> <C>
Commercial:
Commercial and
industrial $ 737.4 19.2 % $ 662.0 18.2 % $ 543.4 16.8 %
Commercial real estate 452.1 11.8 456.4 12.5 519.8 16.1
Services 339.0 8.8 297.3 8.1 291.3 9.0
Health care 215.4 5.6 218.3 6.0 219.9 6.8
Transportation,
communications
and utilities 156.6 4.1 148.5 4.1 99.7 3.1
Individual 98.5 2.6 96.5 2.6 92.2 2.9
Energy 81.4 2.1 90.9 2.5 53.0 1.6
Total commercial 2,080.4 54.2 1,969.9 54.0 1,819.3 56.3
Consumer:
Residential mortgages:
1st mortgages 782.9 20.4 721.7 19.8 633.0 19.5
Junior liens 80.5 2.1 80.2 2.2 89.3 2.8
Indirect 577.9 15.0 535.1 14.7 391.1 12.1
Student 22.9 0.6 100.4 2.7 69.7 2.2
Revolving credit 81.8 2.1 75.3 2.1 63.8 2.0
Other 214.3 5.6 163.4 4.5 166.6 5.1
Total consumer 1,760.3 45.8 1,676.1 46.0 1,413.5 43.7
Total loans $3,840.7 100.0 % $3,646.0 100.0 % $3,232.8 100.0 %
</TABLE>
<TABLE>
TABLE 2 - NONPERFORMING ASSETS
<CAPTION>
June 30 March 31 Dec. 31 Sept. 30 June 30
($ in thousands) 1995 1995 1994 1994 1994
<S> <C> <C> <C> <C> <C>
Nonaccrual loans $ 20,452 $ 21,345 $ 20,977 $ 28,770 $ 50,158
Restructured loans - - 6,024 4,706 1,005
Total nonperforming loans 20,452 21,345 27,001 33,476 51,163
Foreclosed assets 7,929 8,205 8,719 11,129 12,603
Total nonperforming assets $ 28,381 $ 29,550 $ 35,720 $ 44,605 $ 63,766
Accruing loans past due
90 days or more $ 4,892 $ 3,357 $ 3,979 $ 2,610 $ 3,776
Reserve for possible loan losses $149,090 $150,487 $150,668 $159,447 $179,624
Nonperforming assets as a percentage
of loans plus foreclosed assets 0.74 % 0.81 % 1.02 % 1.31 % 1.96 %
Reserve for possible loan losses as a
percentage of nonperforming loans 728.98 % 705.02 % 558.01 % 476.30 % 351.08 %
</TABLE>
<TABLE>
TABLE 3 - SUMMARY OF NONPERFORMING LOAN ACTIVITY
<CAPTION>
Three Months Six Months
Ended Ended
($ in thousands) June 30, 1995 June 30, 1995
<S> <C> <C>
Nonperforming loans
at beginning of period $ 21,345 $ 27,001
Additions 5,433 13,575
Charge-offs, gross (3,517) (7,178)
Returns to performing status (738) (7,622)
Payments (2,071) (5,324)
Nonperforming loans
at end of period $ 20,452 $ 20,452
</TABLE>
<TABLE>
TABLE 4 - RESERVE FOR POSSIBLE LOAN LOSSES ACTIVITY
<CAPTION>
Three Months Six Months
Ended June 30 Ended June 30
($ in thousands) 1995 1994 1995 1994
<S> <C> <C> <C> <C>
Balance at beginning of period $150,487 $180,485 $150,668 $180,483
Loans charged off (5,033) (6,146) (10,645) (9,612)
Recoveries 3,636 5,055 9,067 8,040
Net loans charged off (1,397) (1,091) (1,578) (1,572)
Provision for possible loan losses - 285 - 820
Net activity related to
in-substance foreclosures - (55) - (107)
Balance at end of period $149,090 $179,624 $149,090 $179,624
Reserve for possible loan losses
as a percentage of loans 3.88 % 5.56 % 3.88 % 5.56 %
Annualized net charge-offs as a
percentage of average loans 0.15 % 0.14 % 0.09 % 0.10 %
</TABLE>
<TABLE>
TABLE 5 - DEPOSIT COMPOSITION
<CAPTION>
Second Quarter 1995 First Quarter 1995 Second Quarter 1994
Average % of Average % of Average % of
($ in millions) Balances Deposits Balances Deposits Balances Deposits
<S> <C> <C> <C> <C> <C> <C>
Demand, noninterest-bearing $1,030.0 18.2 % $1,026.4 18.0 % $1,017.2 18.3 %
NOW accounts 646.0 11.4 669.2 11.7 634.8 11.4
Money market deposit accounts 934.6 16.5 1,010.8 17.7 1,108.4 19.9
Savings accounts 310.2 5.5 318.8 5.6 349.7 6.3
Other consumer time deposits 1,849.0 32.6 1,810.3 31.7 1,631.8 29.3
Total core deposits 4,769.8 84.2 4,835.5 84.7 4,741.9 85.2
Public fund certificates of
deposit of $100,000 or more 705.9 12.4 670.5 11.8 629.5 11.3
Certificates of deposit of
$100,000 or more 156.0 2.8 167.2 2.9 176.5 3.2
Foreign time deposits 31.5 0.6 35.5 0.6 14.3 0.3
Total deposits $5,663.2 100.0 % $5,708.7 100.0 % $5,562.2 100.0 %
</TABLE>
<TABLE>
TABLE 6 - NET INTEREST MARGIN(taxable-equivalent)
<CAPTION>
1995 1994
Second First Fourth Third Second
Quarter Quarter Quarter Quarter Quarter
<S> <C> <C> <C> <C> <C>
Yield on earning assets 8.11 % 7.94 % 7.58 % 7.35 % 7.04 %
Rate on interest-bearing liabilities 4.45 4.22 3.77 3.46 3.15
Net interest spread 3.66 3.72 3.81 3.89 3.89
Contribution of
noninterest-bearing funds 0.93 0.88 0.80 0.72 0.67
Net interest margin 4.59 % 4.60 % 4.61 % 4.61 % 4.56 %
Noninterest-bearing funds
supporting earning assets 20.96 % 20.96 % 21.32 % 21.05 % 21.24 %
</TABLE>
<TABLE>
TABLE 7 - CONSOLIDATED AVERAGE BALANCE SHEETS, YIELDS AND RATE(1)
Taxable-equivalent basis (2)
<CAPTION>
Second Quarter 1995 First Quarter 1995 Second Quarter 1994
(Average balances $ in millions, Average Average Average
interest $ in thousands) Balances Interest Rate Balances Interest Rate Balances Interest Rate
<S> <C> <C> <C> <C> <C> <C> <C> <C> <C>
ASSETS
Interest-earning assets:
Loans (3) $3,779.5 $ 86,765 9.21 % $3,596.8 $ 81,680 9.21 % $3,164.7 $ 67,154 8.52 %
Securities available for sale (4) 555.0 9,235 6.66 561.9 9,368 6.67 767.0 10,433 5.44
Securities held to maturity 1,844.1 29,118 6.32 1,816.5 27,240 6.00 1,943.8 26,746 5.52
Short-term investments 31.0 466 6.02 169.5 2,445 5.85 146.8 1,440 3.95
Total interest-earning assets 6,209.6 $125,584 8.11 % 6,144.7 $120,733 7.94 % 6,022.3 $105,773 7.04 %
Reserve for possible loan losses (150.6) (150.1) (182.3)
Noninterest-earning assets:
Cash (excluding items in process
of collection) 150.8 156.9 180.4
Items in process of collection 144.0 142.4 110.7
Other assets 299.3 304.1 312.7
Total noninterest-earning assets 594.1 603.4 603.8
Total assets $6,653.1 $6,598.0 $6,443.8
LIABILITIES AND SHAREHOLDERS' EQUITY
Interest-bearing liabilities:
Interest-bearing deposits:
NOW accounts $ 646.0 $ 3,482 2.16 % $ 669.2 $ 3,563 2.16 % $ 634.8 $ 2,621 1.66 %
Money market deposit accounts 934.6 6,305 2.71 1,010.8 7,095 2.85 1,108.4 6,392 2.31
Savings accounts 310.2 1,690 2.19 318.8 1,754 2.23 349.7 1,766 2.03
Other consumer time deposits 1,849.0 26,090 5.66 1,810.3 23,680 5.30 1,631.8 16,721 4.11
Public fund certificates of deposits
of $100,000 or more 705.9 10,779 6.12 670.5 9,716 5.88 629.5 5,946 3.79
Certificates of deposits of
$100,000 or more 156.0 1,841 4.73 167.2 2,066 5.01 176.5 1,667 3.79
Foreign time deposits 31.5 477 6.06 35.5 485 5.54 14.3 143 4.01
Total interest-bearing deposits 4,633.2 50,664 4.39 4,682.3 48,359 4.19 4,545.0 35,256 3.11
Short-term borrowings 270.3 3,722 5.53 169.7 2,089 4.99 171.0 1,359 3.19
Debt 4.8 72 6.01 4.9 74 6.11 27.3 611 8.98
Total interest-bearing liabilities 4,908.3 $ 54,458 4.45 % 4,856.9 $ 50,522 4.22 % 4,743.3 $ 37,226 3.15 %
Noninterest-bearing liabilities:
Demand deposits 1,030.0 1,026.4 1,017.2
Other liabilities 105.8 125.4 135.8
Total noninterest-bearing liabilities 1,135.8 1,151.8 1,153.0
Total shareholders' equity 609.0 589.3 547.5
Total liabilities and
shareholders' equity $6,653.1 $6,598.0 $6,443.8
SPREAD AND NET YIELD
Interest rate spread 3.66 % 3.72 % 3.89 %
Cost of funds supporting interest-earning assets 3.52 % 3.34 % 2.48 %
Net interest income/margin $ 71,126 4.59 % $ 70,211 4.60 % $ 68,547 4.56 %
(1) All financial information has been restated for mergers accounted for as poolings of interest.
(2) Based on the statutory income tax rate of 35%.
(3) Excludes unearned income. Yield computations include nonaccrual loans in loans outstanding.
(4) Yield computations are based on book values of securities available for sale.
</TABLE>
<TABLE>
TABLE 7 - CONSOLIDATED AVERAGE BALANCE SHEETS, YIELDS AND RATES (1)
Taxable-equivalent basis (2)
<CAPTION>
Six Months Ended Six Months Ended
June 30, 1995 June 30, 1994
(Average balances $ in millions, Average Average
interest $ in thousands) Balances Interest Rate Balances Interest Rate
<S> <C> <C> <C> <C> <C> <C>
ASSETS
Interest-earning assets:
Loans (3) $3,688.7 $168,445 9.21 % $3,104.1 $130,709 8.49 %
Securities available for sale (4) 558.4 18,603 6.66 774.7 19,990 5.16
Securities held to maturity 1,830.4 56,358 6.17 1,957.4 53,687 5.50
Short-term investments 99.9 2,911 5.88 206.3 3,570 3.49
Total interest-earning assets 6,177.4 $246,317 8.03 % 6,042.5 $207,956 6.93 %
Reserve for possible loan losses (150.4) (181.8)
Noninterest-earning assets:
Cash (excluding items in process
of collection) 153.8 181.7
Items in process of collection 143.2 110.5
Other assets 301.7 310.3
Total noninterest-earning assets 598.7 602.5
Total assets $6,625.7 $6,463.2
LIABILITIES AND SHAREHOLDERS' EQUITY
Interest-bearing liabilities:
Interest-bearing deposits:
NOW accounts $ 657.5 $ 7,045 2.16 % $ 638.6 $ 5,152 1.63 %
Money market deposit accounts 972.5 13,400 2.78 1,116.6 12,988 2.35
Savings accounts 314.5 3,444 2.21 348.0 3,483 2.02
Other consumer time deposits 1,829.7 49,770 5.49 1,617.7 32,702 4.08
Public fund certificates of deposits
of $100,000 or more 688.3 20,495 6.01 609.7 10,794 3.57
Certificates of deposits of
$100,000 or more 161.6 3,907 4.88 182.3 3,230 3.57
Foreign time deposits 33.5 962 5.79 11.7 213 3.67
Total interest-bearing deposits 4,657.6 99,023 4.29 4,524.6 68,562 3.06
Short-term borrowings 220.2 5,811 5.32 166.7 2,541 3.07
Debt 4.8 146 6.07 28.3 1,345 9.58
Total interest-bearing liabilities 4,882.6 $104,980 4.33 % 4,719.6 $ 72,448 3.10 %
Noninterest-bearing liabilities:
Demand deposits 1,028.2 1,025.9
Other liabilities 115.7 171.2
Total noninterest-bearing liabilities 1,143.9 1,197.1
Total shareholders' equity 599.2 546.5
Total liabilities and
shareholders' equity $6,625.7 $6,463.2
SPREAD AND NET YIELD
Interest rate spread 3.70 % 3.83 %
Cost of funds supporting interest-earning assets 3.43 % 2.42 %
Net interest income/margin $141,337 4.60 % $135,508 4.51 %
(1) All financial information has been restated for mergers accounted for as poolings of interest.
(2) Based on the statutory income tax rate of 35%.
(3) Excludes unearned income. Yield computations include nonaccrual loans in loans outstanding.
(4) Yield computations are based on book values of securities available for sale.
</TABLE>
<TABLE>
TABLE 8 - CHANGES IN TAXABLE-EQUIVALENT NET INTEREST INCOME (1)
<CAPTION>
Second Quarter 1995 Compared to:
First Quarter 1995 Second Quarter 1994
Increase (Decrease) Due to Change In:
Volume Rate Total Volume Rate Total
<S> <C> <C> <C> <C> <C> <C>
Taxable-equivalent
interest earned on:
Loans $ 4,186 $ 899 $ 5,085 $13,798 $ 5,813 $19,611
Securities available for sale (115) (18) (133) (3,240) 2,042 (1,198)
Securities held to maturity 420 1,458 1,878 (1,423) 3,795 2,372
Short-term investments (2,075) 96 (1,979) (1,495) 521 (974)
Total 2,416 2,435 4,851 7,640 12,171 19,811
Interest paid on:
NOW accounts (125) 44 (81) 47 814 861
Money market
deposit accounts (520) (270) (790) (1,084) 997 (87)
Savings accounts (47) (17) (64) (209) 133 (76)
Other consumer time deposits 513 1,897 2,410 2,444 6,925 9,369
Public fund certificates of
deposit of $100,000 or more 528 535 1,063 795 4,038 4,833
Certificates of deposit
of $100,000 or more (135) (90) (225) (209) 383 174
Foreign deposits (56) 48 (8) 234 100 334
Short-term borrowings 1,360 273 1,633 1,043 1,320 2,363
Long-term debt (1) (1) (2) (385) (154) (539)
Total 1,517 2,419 3,936 2,676 14,556 17,232
Taxable-equivalent
net interest income $ 899 $ 16 $ 915 $ 4,964 $(2,385) $ 2,579
(1) Change due to mix (both rate and volume) has been allocated to volume and rate changes in proportion to the
relationship of the absolute dollar amounts to the changes in each.
</TABLE>
<TABLE>
TABLE 9 - NONINTEREST INCOME
<CAPTION>
Three Months Ended Six Months Ended
Percentage Percentage
June 30 June 30 Increase June 30 June 30 Increase
($ in thousands) 1995 1994 (Decrease) 1995 1994 (Decrease)
<S> <C> <C> <C> <C> <C> <C>
Service charges on deposits $10,210 $10,960 (7)% $20,615 $21,207 (3)%
Trust fees 2,882 3,402 (15) 5,703 6,448 (12)
Other service, collection and
exchange charges:
Mortgage loan servicing income 1,958 1,854 6 3,802 3,730 2
ATM fees 1,332 618 116 2,354 1,097 115
Retail investment service income 1,605 1,528 5 3,156 3,293 (4)
Other 2,047 1,292 58 3,456 2,512 38
Total other service, collection
and exchange charges 6,942 5,292 31 12,768 10,632 20
Other income:
Gain on divestiture
of banking offices - - - 2,361 - -
Gain on sale of business lines 3,064 - - 3,064 - -
Other income 1,482 2,179 (32) 3,371 5,123 (34)
Total other income 4,546 2,179 109 8,796 5,123 72
Securities gains (losses), net - - - - 185 (100)
Total Noninterest Income $24,580 $21,833 13 % $47,882 $43,595 10 %
</TABLE>
<TABLE>
TABLE 10 - NONINTEREST EXPENSE
<CAPTION>
Three Months Ended Six Months Ended
Percentage Percentage
June 30 June 30 Increase June 30 June 30 Increase
($ in thousands) 1995 1994 (Decrease) 1995 1994 (Decrease)
<S> <C> <C> <C> <C> <C> <C>
Salaries $25,378 $27,393 (7)% $ 50,483 $ 51,505 (2)%
Benefits 4,487 4,739 (5) 9,244 9,986 (7)
Total staff costs 29,865 32,132 (7) 59,727 61,491 (3)
Occupancy, net 6,176 6,177 - 12,105 12,294 (2)
Equipment 4,665 3,387 38 8,979 7,035 28
Total occupancy and equipment 10,841 9,564 13 21,084 19,329 9
Data processing 4,333 4,980 (13) 9,761 10,131 (4)
Foreclosed property expense, net (306) (480) 36 (535) (4,191) 87
Deposit insurance and
examination fees 3,128 3,625 (14) 6,585 7,254 (9)
Postage 1,155 911 27 2,409 1,905 26
Stationery and supplies 1,464 1,283 14 2,949 2,641 12
Telecommunications 2,102 807 160 3,416 1,519 125
Professional fees 1,300 3,522 (63) 3,670 5,752 (36)
State taxes on equity 1,089 743 47 2,178 1,485 47
Advertising and promotional expenses 2,166 1,290 68 3,627 2,548 42
Other 6,719 9,060 (26) 12,660 19,881 (36)
Total Noninterest Expense $63,856 $67,437 (5)% $127,531 $129,745 (2)%
Efficiency ratio (1) 66.72 % 74.61 % 67.40 % 72.52 %
(1) Noninterest expense as a percentage of taxable-equivalent net interest income plus noninterest income
(excluding securities transactions).
</TABLE>
<TABLE>
TABLE 11 - QUARTERLY SELECTED CAPITAL RATIOS
<CAPTION>
June 30 March 31 Dec. 31 Sept. 30 June 30
1995 1995 1994 1994 1994
<S> <C> <C> <C> <C> <C>
Hibernia Corporation
Risk-based capital:
Tier 1 risk-based capital ratio 14.77 % 15.51 % 15.32 % 15.48 % 15.07 %
Total risk-based capital ratio 16.05 % 16.79 % 16.61 % 16.77 % 16.37 %
Leverage ratio 9.11 % 9.07 % 8.94 % 8.76 % 8.11 %
Hibernia National Bank
Risk-based capital:
Tier 1 risk-based capital ratio 14.16 % 14.30 % 14.46 % 14.47 % 14.81 %
Total risk-based capital ratio 15.44 % 15.59 % 15.75 % 15.76 % 16.11 %
Leverage ratio 8.75 % 8.37 % 8.43 % 8.19 % 7.97 %
</TABLE>
<PAGE>
PART II. OTHER INFORMATION
Item 6. Exhibits and Reports on Form 8-K
(a) Exhibits
(b) Reports on Form 8-K
None
<PAGE>
SIGNATURES
Pursuant to the requirements of the Securities Exchange Act of 1934, the
registrant has duly caused this report to be signed on its behalf by the
undersigned thereunto duly authorized to sign on behalf of the registrant.
HIBERNIA CORPORATION
(Registrant)
Date: August 11, 1995 By: /s/ Ron E. Samford, Jr.
-------------------------
Ron E. Samford, Jr.
Executive Vice President and
Controller (principal accounting
officer)
WARNING: THE EDGAR SYSTEM ENCOUNTERED ERROR(S) WHILE PROCESSING THIS SCHEDULE.
<TABLE> <S> <C>
<ARTICLE> 9
<MULTIPLIER> 1000
<CURRENCY> U.S. DOLLARS
<S> <C> <C> <C>
<PERIOD-TYPE> 6-MOS YEAR 6-MOS
<PERIOD-END> JUN-30-1995 DEC-31-1994 JUN-30-1994
<EXCHANGE-RATE> 1 1 1
<CASH> 349,476 363,867 301,516
<INT-BEARING-DEPOSITS> 195 1,012 1,271
<FED-FUNDS-SOLD> 26,560 193,465 107,806
<TRADING-ASSETS> 0 0 245
<INVESTMENTS-HELD-FOR-SALE> 542,773 556,252 725,227
<INVESTMENTS-CARRYING> 1,818,750 1,773,317 1,931,979
<INVESTMENTS-MARKET> 1,819,215 1,703,807 1,860,691
<LOANS> 3,840,665 3,483,732 3,232,803
<ALLOWANCE> 149,090 150,668 179,624
<TOTAL-ASSETS> 6,736,779 6,516,411 6,432,421
<DEPOSITS> 5,742,254 5,668,632 5,538,962
<SHORT-TERM> 259,251 159,930 184,520
<LIABILITIES-OTHER> 106,106 108,769 133,049
<LONG-TERM> 4,748 5,650 24,446
<COMMON> 217,810 217,585 216,458
0 0 0
0 0 0
<OTHER-SE> 406,610 355,845 334,986
<TOTAL-LIABILITIES-AND-EQUITY> 6,736,779 6,516,411 6,432,421
<INTEREST-LOAN> 166,307 276,559 128,800
<INTEREST-INVEST> 74,587 144,536 73,247
<INTEREST-OTHER> 2,911 6,974 3,570
<INTEREST-TOTAL> 243,805 428,069 205,617
<INTEREST-DEPOSIT> 99,023 150,680 68,561
<INTEREST-EXPENSE> 104,980 158,474 72,448
<INTEREST-INCOME-NET> 138,825 269,595 133,169
<LOAN-LOSSES> 0 (17,421) 820
<SECURITIES-GAINS> 0 (3,628) 185
<EXPENSE-OTHER> 127,531 277,769 129,745
<INCOME-PRETAX> 59,176 92,747 46,199
<INCOME-PRE-EXTRAORDINARY> 59,176 92,747 46,199
<EXTRAORDINARY> 0 0 0
<CHANGES> 0 0 0
<NET-INCOME> 55,261 87,971 43,804
<EPS-PRIMARY> .49 .78 .39
<EPS-DILUTED> .49 .78 .39
<YIELD-ACTUAL> 4.60 4.56 4.51
<LOANS-NON> 20,452 20,977 50,158
<LOANS-PAST> 4,892 3,979 3,776
<LOANS-TROUBLED> 0 6,024 1,005
<LOANS-PROBLEM> 6,400 12,000 46,800
<ALLOWANCE-OPEN> 150,668 180,483 180,483
<CHARGE-OFFS> 10,645 24,041 9,612
<RECOVERIES> 9,067 17,562 8,040
<ALLOWANCE-CLOSE> 149,090 150,668 179,624
<ALLOWANCE-DOMESTIC> 149,090 150,668 179,624
<ALLOWANCE-FOREIGN> 0 0 0
<ALLOWANCE-UNALLOCATED> 67,400 36,700 54,200
</TABLE>
