As Filed with the Securities and Exchange Commission on November
17, 1995
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 (Primary Standard (I.R.S. Employer
Jurisdiction of Industrial Identification
Incorporation or Classification Number)
Organization)
313 Carondelet Street
New Orleans, Louisiana 70130
(504) 533-5332
(Address, Including Zip Code, and Telephone Number, Including
Area Code, of Registrant's Principal Executive Offices)
_____________________________
Gary L. Ryan
Associate Counsel
Hibernia Corporation
313 Carondelet Street
New Orleans, Louisiana 70130
(504) 533-5560
(Name, Address, Including Zip Code, and Telephone Number,
Including Area Code of Agent for Service)
COPIES TO:
Virginia Boulet
Phelps Dunbar, L.L.P.
Counsellors at Law
Texaco Center
400 Poydras Street
New Orleans, Louisiana 70130-3245
(504) 566-1311
Jeffrey C. Gerrish, Esq.
Gerrish & McCreary, P. C.
700 Colonial Road, Suite 200
Memphis, Tennessee 38117
(901) 767-0900
____________________________
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 to be Proposed Proposed Amount of
class of Registered Maximum Maximum Registration
securities to Offering Aggregate Fee (1)
be registered Price per Offering
Share (1) Price (1)
_________________________________________________________________
Class A
Common Stock,
no par value 1,874,760 $5.16 $9,683,000 $3,339.00
shares
_________________________________________________________________
1. Based upon a book value of the securities to be exchanged as
of September 30, 1995 of $9,683,000 pursuant to Rule 457(f)(2)
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.
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
Proxy Statement-Prospectus
2. Inside Front and Outside Back Table of Contents;
Cover Pages of Proxy Statement- Available Information
Prospectus
3. Risk Factors, Ratio of Earnings Introduction; The
To Fixed Charges and Other Parties to the Merger;
Information Summary;
Certain Regulatory
Considerations
4. Terms of the Transaction Introduction; Summary;
Proposed Merger
5. Pro Forma Financial Pro Forma Financial
Information Information
6. Material Contacts with the Proposed Merger
Company Being Acquired
7. Additional Information Required Not Applicable
for Reoffering by Persons and
Parties Deemed to be Underwriters
8. Interests of Named Experts and Validity of Shares;
Counsel No Conflicts; therefore
N/A
9. Disclosure of Commission Position Not Applicable
on Indemnification for Securities
Act Liabilities
10. Information with Respect to Introduction; Available
S-3 Registrants Information; The
Parties to the Merger
11. Incorporation of Certain Available Information
Information by Reference
12. Information with Respect to Not Applicable
S-2 or S-3 Registrants
13. Incorporation of Certain Not Applicable
Information by Reference
14. Information with Respect to Not Applicable
Registrants other than
S-2 or S-3 Registrants
15. Information with Respect to Not Applicable
S-3 Companies
16. Information with Respect to Not Applicable
S-2 or S-3 Companies
17. Information with Respect to Summary; The Parties to
Companies Other Than S-2 or the Merger; Certain
S-3 Companies Information Concerning
Bunkie Bancshares, Inc.;
Financial Statements of
Bunkie Bancshares, Inc.
18. Information if Proxies, Introduction; Summary;
Consents or Authorizations Meeting Information;
are to be Solicited Proposed Merger; Certain
Information Concerning
Bunkie Bancshares, Inc.;
Relationship with
Independent Auditors
19. Information if Proxies, Not Applicable
Consent, Authorizations are not
to be Solicited or in an Exchange
Offer
NOTICE OF SPECIAL MEETING OF SHAREHOLDERS
OF
Bunkie Bancshares, Inc.
December 22, 1995
NOTICE IS HEREBY GIVEN that, pursuant to the call of the
directors of Bunkie Bancshares, Inc. ("Bunkie"), a Special Meeting
of the shareholders of Bunkie will be held at the main office of
Bunkie Bancshares, Inc., 122 West Church Street, Bunkie, Louisiana
71322-1717 on December 22, 1995, at 10:00 a.m., for the purpose of
considering and voting upon the following matters:
1. A proposal to approve a merger (the "Merger") of Bunkie
with and into Hibernia Corporation ("Hibernia") and the
related Agreement and Plan of Merger between Bunkie and
Hibernia dated as of September 7, 1995 (the "Agreement"),
a copy of which is attached as Appendix A to the
accompanying Proxy Statement-Prospectus and incorporated
herein by this reference, and which Agreement also
provides for the merger of Bunkie Bank & Trust Company
(the "Bank"), a Louisiana banking corporation and wholly-
owned subsidiary of Bunkie, with and into Hibernia
National Bank ("HNB"), a wholly-owned subsidiary of
Hibernia (the "Bank Merger").
2. 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
November 10, 1995 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 $20.00 per share, of
Bunkie (the "Bunkie Common Stock") will entitle the holder thereof
to one vote on all matters that come before the Special Meeting.
Approval of the Merger will require the affirmative vote of two-
thirds of the voting power of Bunkie present or represented by
proxy at the Special Meeting.
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 Bunkie's total voting power.
Whether you intend to attend the Special Meeting, and
regardless of the number of shares you own, your vote is important.
Please take a moment to complete, date and sign the enclosed proxy
card. Your proxy may be revoked by notice to the Secretary of
Bunkie or by executing and delivering a later dated proxy to the
Secretary prior to the Special Meeting.
By Order of the Board of Directors,
Frank Mulhearn
Secretary
Bunkie Bancshares, Inc.
PROXY
This Proxy is Solicited on Behalf of
The Board of Directors of Bunkie Bancshares, Inc.
The undersigned shareholder of Bunkie Bancshares, Inc.
("Bunkie"), a Louisiana corporation, hereby appoints John A.
Boatner, Jr. and James Lynn Bordelon, or either 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
Common Stock of Bunkie the undersigned would be entitled to vote if
personally present at the Special Meeting of Shareholders of
Bunkie, which will be held at the office of Bunkie Bancshares,
Inc., 122 West Church Street, Bunkie, Louisiana 71322-1717 on
December 22, 1995, 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 special 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 RECOMMENDATION OF THE BOARD OF DIRECTORS OF
BUNKIE.
The Board of Directors of Bunkie recommends that you vote FOR
approval of the Merger of Bunkie with and into Hibernia
Corporation.
THIS PROXY IS CONTINUED ON THE REVERSE SIDE
PLEASE SIGN ON THE REVERSE SIDE AND RETURN PROMPTLY
PLEASE MARK YOUR CHOICE LIKE
THIS ___ IN BLUE OR BLACK INK/
/___/
____________________
Common Stock
Item 1 Approval of Merger of Bunkie with and into Hibernia
Corporation and the related Agreement and Plan of Merger
between Bunkie and Hibernia Corporation dated as of
September 7, 1995
For Against Abstain
___ ___ ___
/___/ /___/ /___/
The undersigned hereby acknowledges receipt of a copy of the
accompanying Notice of Special 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.
PROXY STATEMENT
Bunkie Bancshares, Inc.
SPECIAL MEETING OF SHAREHOLDERS
To Be Held on December 22, 1995
PROSPECTUS
HIBERNIA CORPORATION
1,874,760 SHARES OF
CLASS A COMMON STOCK
(NO PAR VALUE)
This Proxy Statement-Prospectus is being furnished to the
holders of common stock, par value $20.00 per share (the "Bunkie
Common Stock"), of Bunkie Bancshares, Inc., a Louisiana corporation
("Bunkie"), in connection with the solicitation of proxies by the
Board of Directors of Bunkie for use at a special meeting of
shareholders (the "Special Meeting") to be held at 10:00 a.m.,
local time, on December 22, 1995, at the office of Bunkie
Bancshares, Inc., 122 West Church Street, Bunkie, Louisiana 71322-
1717, and at any adjournments or postponements thereof.
At the Special Meeting, the holders of record of Bunkie
Common Stock as of the close of business on November 10, 1995 (the
"Record Date") will consider and vote upon a proposal to approve
the merger (the "Merger") of Bunkie with and into Hibernia
Corporation ("Hibernia"), and the related Agreement and Plan of
Merger dated September 7, 1995 (the "Agreement") between Bunkie and
Hibernia pursuant to which, immediately following the Merger,
Bunkie Bank & Trust Company (the "Bank") will also merge with and
into Hibernia National Bank ("HNB") (the "Bank Merger"). Upon
consummation of the Merger, each outstanding share of Bunkie Common
Stock, except for shares owned beneficially by Hibernia and its
subsidiaries and shares as to which dissenters' rights have been
perfected and not withdrawn or otherwise forfeited, will be
converted into the number of shares of Hibernia'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 A to this Proxy
Statement-Prospectus, see "PROPOSED MERGER."
This Proxy Statement-Prospectus also constitutes a
prospectus of Hibernia with respect to the shares of Hibernia
Common Stock to be issued pursuant to the Agreement if the Merger
is consummated. The actual number of shares of Hibernia Common
Stock to be issued will be determined in accordance with the terms
of the Agreement. See "PROPOSED MERGER -- Terms of the Merger."
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 November __, 1995 was
$______ per share.
This Proxy Statement-Prospectus and the accompanying
proxy card are first being mailed to shareholders of Bunkie on or
about November __, 1995.
No person is authorized to give any information or to make any
representations other than those contained in this Proxy Statement-
Prospectus, and, if given or made, such information or
representation may not be relied upon as having been made by
Hibernia or Bunkie. This Proxy Statement-Prospectus does not
constitute an offer to sell or solicitation of an offer to buy by
Hibernia, nor will there be any sale of Hibernia Common Stock
offered hereby, in any state in which, or to any person to whom, it
would be unlawful to make such an offer or solicitation prior to
registration or qualification under applicable state law.
THESE SECURITIES HAVE NOT BEEN APPROVED OR DISAPPROVED BY
THE SECURITIES AND EXCHANGE COMMISSION OR ANY STATE SECURITIES
COMMISSION, NOR HAS THE SECURITIES AND EXCHANGE COMMISSION OR ANY
STATE SECURITIES COMMISSION PASSED UPON THE ACCURACY OR ADEQUACY OF
THIS PROXY STATEMENT-PROSPECTUS. ANY REPRESENTATION TO THE
CONTRARY IS A CRIMINAL OFFENSE.
THE SHARES OF HIBERNIA COMMON STOCK OFFERED HEREBY ARE
NOT SAVINGS ACCOUNTS, DEPOSITS OR OTHER OBLIGATIONS OF A BANK OR
SAVINGS ASSOCIATION AND ARE NOT INSURED BY THE FEDERAL DEPOSIT
INSURANCE CORPORATION OR ANY OTHER GOVERNMENTAL AGENCY.
The date of this Proxy Statement-Prospectus is November __, 1995.
TABLE OF CONTENTS
Page
INTRODUCTION . . . . . . . . . . . . . . . . . . . . .
AVAILABLE INFORMATION. . . . . . . . . . . . . . . . .
INCORPORATION OF CERTAIN DOCUMENTS BY REFERENCE. . . .
THE PARTIES TO THE MERGER. . . . . . . . . . . . . . .
SUMMARY. . . . . . . . . . . . . . . . . . . . . . . .
MEETING INFORMATION. . . . . . . . . . . . . . . . . .
Date, Place and Time . . . . . . . . . . . . . .
Record Date; Voting Rights . . . . . . . . . . .
Voting and Revocation of Proxies. . . . . . . . .
Solicitation of Proxies . . . . . . . . . . . . .
PRO FORMA FINANCIAL INFORMATION. . . . . . . . . . . .
PROPOSED MERGER. . . . . . . . . . . . . . . . . . . .
Background of and Reasons for Merger. . . . . . .
Terms of the Merger . . . . . . . . . . . . . . .
Opinion of Financial Advisor . . . . . . . . . .
Surrender of Certificates . . . . . . . . . . . .
Representations and Warranties:
Conditions to the Merger; Waiver. . . . . . . .
Regulatory and Other Approvals. . . . . . . . . .
Business Pending the Merger . . . . . . . . . . .
Effective Date of the Merger; Termination . . . .
Management and Operations After the Merger. . . .
Certain Differences in Rights of Shareholders . .
Material Tax Consequences . . . . . . . . . . . .
Resale of Hibernia Common Stock . . . . . . . . .
Rights of Dissenting Shareholders . . . . . . . .
Dividend Reinvestment Plan. . . . . . . . . . . .
Accounting Treatment. . . . . . . . . . . . . . .
CERTAIN REGULATORY CONSIDERATIONS . . . . . . . . . .
CERTAIN INFORMATION RELATING TO BUNKIE . . . . . . . .
Description of Business . . . . . . . . . . . . .
Ownership of Bunkie Common Stock
and Dividends . . . . . . . . . . . . . . . . .
RELATIONSHIP WITH INDEPENDENT AUDITORS . . . . . . . .
VALIDITY OF SHARES . . . . . . . . . . . . . . . . . .
EXPERTS . . . . . . . . . . . . . . . . . . . . . . .
BUNKIE CONSOLIDATED FINANCIAL INFORMATION . . . . . .
APPENDIX A -- AGREEMENT AND PLAN OF MERGER
APPENDIX B -- OPINION OF SOUTHARD FINANCIAL
APPENDIX C -- SELECTED PROVISIONS OF LOUISIANA LAW RELATING
TO RIGHTS OF DISSENTING SHAREHOLDERS
APPENDIX D -- OPINION OF ERNST & YOUNG LLP REGARDING CERTAIN
TAX MATTERS
INTRODUCTION
This Registration Statement relates to 1,874,760 shares of
Class A Common Stock, no par value of Hibernia, which will be
issued in connection with the merger of Bunkie 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, $20.00 par value, of Bunkie (the "Bunkie
Common Stock").
Shareholders of Bunkie will be asked to approve the Merger at
a Special Meeting to be held on December 22, 1995. The proxy
statement relating to such Special Meeting is included in this
Proxy Statement-Prospectus.
The terms of the Merger are described in this Proxy Statement-
Prospectus, and a copy of the Agreement and Plan of Merger between
Hibernia and Bunkie is attached hereto as Appendix A for reference.
AVAILABLE INFORMATION
Hibernia is subject to the informational requirements of the
Securities Exchange Act of 1934, as amended (the "Exchange Act"),
and in accordance therewith files reports, proxy statements and
other information with the Securities and Exchange Commission (the
"Commission"). Such reports, proxy statements and other
information can be inspected and copied at the public reference
facilities of the Commission at Room 1024, 450 Fifth Street, N.W.,
Washington, D.C. 20549, and at the Commission's Regional Offices
located at 7 World Trade Center, Suite 1300, New York, New York
10007 and 500 West Madison Street, Suite 1400, Chicago, Illinois
60661-2511. 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 Proxy
Statement-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.
All information contained in this Proxy Statement-Prospectus
relating to Hibernia and its subsidiaries has been supplied by
Hibernia, and all information relating to Bunkie and its
subsidiaries has been supplied by Bunkie.
INCORPORATION OF CERTAIN DOCUMENTS BY REFERENCE
Incorporated by reference in this Proxy Statement-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, 1994, (2)
definitive Proxy Statement dated March 17, 1995 relating to its
1995 Annual Meeting of Shareholders held on April 18, 1995 except
for the information contained therein under the headings "Executive
Compensation -- Report of the Executive Compensation Committee" and
"-- Stock Performance Graph", which are expressly excluded from
incorporation in this Registration Statement, (3) Quarterly Reports
on Form 10-Q for the fiscal quarters ended March 31, 1995, June 30,
1995 and September 30, 1995, and (4) Current Reports on Form 8-K
dated October 6, 1995 and October 12, 1995.
All documents subsequently filed by Hibernia with the
Commission pursuant to Sections 13(a), 13(c), 14 or 15(d) of the
Exchange Act after the date of this Proxy Statement-Prospectus and
prior to the termination of the offering of Hibernia Common Stock
made hereby shall be deemed to be incorporated by reference in this
Proxy Statement-Prospectus and to be a part hereof from the date
such documents are filed, except that any and all information
included in any proxy statement filed by Hibernia under the
headings "Executive Compensation -- Report of the Executive
Compensation Committee" and "-- Stock Performance Graph" are hereby
expressly excluded from such incorporation by reference. Any
statement contained in a document incorporated or deemed to be
incorporated by reference herein modifies or supersedes the
statement set forth herein. Any statement so modified or
superseded shall not be deemed, except as so modified or
superseded, to constitute a part of this Proxy Statement-
Prospectus.
Hibernia will provide, without charge, to each person to whom
this Proxy Statement-Prospectus is delivered, on the written or
oral request of any such person, a copy of any or all of the
information incorporated herein by reference other than exhibits to
such information (unless such exhibits are specifically
incorporated by reference into such information). Written or oral
requests should be directed to Hibernia Corporation, 313 Carondelet
Street, New Orleans, Louisiana 70130, Attention: Assistant
Corporate Secretary, Telephone (504) 533-3411.
THE PARTIES TO THE MERGER
Hibernia. Hibernia is a Louisiana corporation registered
under the Bank Holding Company Act of 1956, as amended ("BHCA").
As of September 30, 1995, Hibernia had total consolidated assets of
approximately $7.0 billion and shareholders' equity of
approximately $673 million. As of June 30, 1995, Hibernia was
ranked, on the basis of total assets, as the 81st largest bank
holding company in the United States and the second largest
headquartered in Louisiana.
As of September 30, 1995 Hibernia had a single banking
subsidiary, Hibernia National Bank ("HNB"), that provides retail
and commercial banking services through approximately 160 branches
throughout Louisiana. As of September 30, 1995, HNB was the
largest bank headquartered in Louisiana.
Hibernia consummated one merger in each of the first two
quarters of 1995 (one as of March 1 and one as of May 1, 1995) and
two mergers in the third quarter of 1995 (each as of July 1). Each
of the four mergers were accounted for as poolings of interests.
Restated supplemental consolidated financial statements of Hibernia
reflecting the impact of these mergers were included in a Current
Report on Form 8-K filed with the Commission on October 12, 1995
and are incorporated herein by reference. As restated to reflect
those mergers, Hibernia's total assets and shareholders' equity as
of December 31, 1994 were $6.8 billion and $592 million,
respectively.
Hibernia has publicly announced its plan to acquire The First
National Bank of Lake Providence, which at June 30, 1995 had total
assets of $53.1 million, total deposits of $45.8 million, and $5.7
million of shareholders equity.
The principal executive offices of Hibernia are located at 313
Carondelet Street, New Orleans, Louisiana 70130, and its telephone
number is (504) 533-5532. For additional information concerning
the business and financial condition of Hibernia, reference should
be made to the Hibernia reports incorporated herein by reference.
See "AVAILABLE INFORMATION."
Selected Financial Data. The closing market price per share
of Hibernia Common Stock on the NYSE on September 6, 1995, the day
prior to the announcement of the proposed Merger was $10.50. There
can be no assurance of the market price of Hibernia Common Stock on
the Closing Date.
<PAGE>
SELECTED FINANCIAL INFORMATION ABOUT HIBERNIA CORPORATION
(Unaudited)
The following table sets forth certain consolidated financial
information for Hibernia and is based on the financial statements
and related notes of Hibernia contained in (i) its current Report
on Form 8-K dated October 12, 1995 which reflects the impact of the
mergers with American Bank consummated on March 1, 1995, STABA
Bancshares, Inc. consummated on May 1, 1995 and Bank of St. John
and Progressive Bancorporation, Inc., both of which were
consummated on July 1, 1995; all of which were accounted for as
poolings of interests and (ii) its quarterly report on Form 10-Q
for September 30, 1995.
<PAGE>
<TABLE>
HIBERNIA CORPORATION (1)
SELECTED FINANCIAL INFORMATION
Year Ended December 31 9 Months Ended September 30
Unaudited ($ in thousands, except per share amounts) 1994 1993 1992 1991 1990 1995 1994
<S> <C> <C> <C> <C> <C> <C> <C>
Net interest income $283,212 $278,322 $275,682 $295,598 $311,481 $221,295 $211,673
Income (loss) from continuing operations 95,617 66,846 7,442 (136,726) (15,766) 89,106 76,264
Per share:
Income (loss) from continuing operations 0.81 0.57 0.12 (2.17) (0.25) 0.75 0.64
Cash dividends 0.19 0.03 - 0.15 0.90 0.18 0.13
Book value 4.98 4.66 4.00 4.25 6.85 5.74 4.94
SELECTED PERIOD-END BALANCES
Debt 11,846 38,698 37,568 141,339 153,314 8,837 10,662
Total assets 6,779,343 6,653,356 6,519,475 7,732,627 8,986,869 6,962,446 6,667,815
(1) Refer to "PRO FORMA FINANCIAL INFORMATION".
</TABLE>
[TEXT]
Bunkie. Bunkie is a Louisiana corporation registered under
the BHCA. As of September 30, 1995, Bunkie had total consolidated
assets of $105.7 million and shareholders' equity of $9.7 million.
Bunkie's banking subsidiary is Bunkie Bank & Trust Company (the
"Bank"), a Louisiana banking corporation having five (5) offices in
Avoyelles Parish, Louisiana. The Bank engages in retail and
commercial banking services, including taking deposits and
extending secured and unsecured credit.
The principal offices of Bunkie are located at 122 West Church
Street, Bunkie, Louisiana 71322-1717 and its telephone number is
(318) 346-7254. For additional information concerning the business
of Bunkie and its financial condition, see "CERTAIN INFORMATION
CONCERNING "BUNKIE" and "BUNKIE CONSOLIDATED FINANCIAL
INFORMATION."
<PAGE>
SELECTED FINANCIAL INFORMATION ABOUT BUNKIE BANCSHARES, INC.
(Unaudited)
The following selected financial information for Bunkie Bancshares,
Inc. with respect to each year in the five-year period ended
December 31, 1994 and the nine months ended September 30, 1995 and
1994 has been derived from the financial statements of Bunkie
Bancshares, Inc. The information set forth below should be read in
conjunction with Bunkie Bancshares, Inc. financial statements, the
notes thereto, and Bunkie Bancshares, Inc. Management's Discussion
and Analysis of Financial Condition and Results of Operations for
the Years Ended December 31, 1994 and 1993 and the nine months
ended September 30, 1995 and 1994 appearing elsewhere in this Proxy
Statement-Prospectus.
<TABLE>
<CAPTION>
SELECTED FINANCIAL INFORMATION
Nine Months
Ended
September 30 Year Ended December 31
(Unaudited) (Audited)
________________ ____________________________________________
(in thousands) (in thousands) Bunkie Bank
& Trust Company
Consolidated Consolidated Only
---------------- ------------------------ -----------------
Summary of Financial
Condition
at End of Period 1995 1994 1994 1993 1992 1991 1990
<S> <C> <C> <C> <C> <C> <C> (c)
Total Assets $105,870 $103,418 $106,402 $ 85,250 $ 93,340 $ 80,048 $ 72,199
Investment Securities 49,312 53,757 57,019 51,412 64,465 37,825 28,438
Loans-Net of Unearned
Income 46,789 41,652 38,290 34,859 30,230 29,350 29,509
Reserve for Loan Losses 611 921 839 811 690 658 640
Total Deposits 95,171 94,508 97,126 86,397 84,718 73,133 88,090
Shareholders' Equity 9,683 8,488 8,386 8,216 7,495 6,534 5,632
Summary of Income
Net Interest Income 3,118 2,877 3,781 3,809 3,899 3,102 3,154
Provision for Credit
Losses (150) -0- (200) -0- -0- -0- -0-
Non-Interest Income 518 394 754 609 693 866 577
Other Income 83 146 88 101 38 (68) 34
Non-Interest Expenses 2,409 2,295 3,151 2,902 2,677 2,416 2,338
Net Income Before Taxes
and Change in
Accounting Principle 1,459 1,122 1,672 1,616 1,953 1,484 1,427
Cumulative Effect of
Change in Accounting
Principle (After tax) -0- -0- -0- -0- -0- -0- -0-
Income Tax Provision 365 272 458 394 502 303 223
Net Income 1,094 850 1,214 1,222 1,451 1,181 1,204
Comparative Per
Share Data
Book Value Per
Common Share 880 770 762 745 680 493 426
Cash Dividends Per
Common Share 22 19 45 45 45 21 15
Net Income Per
Common Share 99 77 110 111 132 89 91
Selected Financial Ratios
Return on Average Assets 1.38% 1.14% 1.21% 1.30% 1.87% 1.55% 1.78%
Return on Average
Shareholders' Equity 16.14% 13.57% 14.67% 15.57% 20.68% 19.41% 23.46%
Equity Capital to
Total Avg. Assets, at
End of Period 9.16% 8.21% 8.32% 8.71% 8.65% 8.58% 8.33%
Allowance for Credit
Losses to Net Loans
at End of Period 1.33% 2.27% 2.24% 2.38% 2.34% 2.28% 2.22%
</TABLE>
BUNKIE BANCSHARES, INC.
QUARTERLY INCOME RESULTS
- ------------------------------------------------------------------
Unaudited ($ in thousands, except per share amounts)
1995
--------------------
I II
Interest income $ 1,882 $ 2,026
Net interest income 998 1,087
Net income 272 432
Net income per share $ 24.71 $ 39.26
1994
----------------------------------------------
I II III IV
Interest income $ 1,558 $ 1,629 $ 1,734 $ 1,812
Net interest income 900 953 1,003 1,019
Net income 232 302 280 390
Net income per share $ 21.08 $ 27.44 $ 25.44 $ 35.44
1993
----------------------------------------------
I II III IV
Interest income $ 1,625 $ 1,594 $ 1,593 $ 1,589
Net interest income 978 970 967 970
Net income 325 352 283 248
Net income per share $ 29.53 $ 31.98 $ 25.72 $ 22.53
<PAGE>
PRO FORMA COMBINED SELECTED FINANCIAL INFORMATION
(Unaudited)
The following table sets forth certain unaudited pro forma combined
financial information for Hibernia, after giving effect to the
mergers with American Bank consummated on March 1, 1995, STABA
Bancshares, Inc. consummated on May 1, 1995, Bank of St. John and
Progressive Bancorporation, Inc., each consummated on July 1, 1995,
and Bunkie Bancshares, Inc. The pro forma information, which
reflects the Merger and other consummated 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
any of the mergers been consummated at the beginning of the periods
indicated or that may be obtained in the future. See "Pro Forma
Financial Information" and the "Notes to Pro Forma Combined
Financial Statements" contained elsewhere herein.
<PAGE>
<TABLE>
PRO FORMA HIBERNIA CORPORATION*
PRO FORMA COMBINED SELECTED FINANCIAL INFORMATION
Year Ended December 31 9 Months Ended September 30
Unaudited ($ in thousands, except per share amounts) 1994 1993 1992 1995 1994
<S> <C> <C> <C> <C> <C>
Net interest income $286,993 $282,131 $279,581 $224,413 $214,550
Income from continuing operations 96,831 68,068 8,893 90,200 77,114
Per share:
Income from continuing operations 0.80 0.57 0.13 0.75 0.64
Cash dividends 0.19 0.03 - 0.18 0.13
Book value 4.97 4.65 4.00 5.73 4.93
SELECTED PERIOD-END BALANCES
Debt 11,846 38,698 37,568 8,837 10,662
Total assets 6,885,745 6,748,606 6,612,815 7,068,116 6,771,233
* Includes Hibernia Corporation and Bunkie Bancshares, Inc.
</TABLE>
<PAGE>
COMPARATIVE PER SHARE INFORMATION
(Unaudited)
The following table sets forth for Hibernia Common Stock and Bunkie
Bancshares, Inc. Common Stock certain unaudited pro forma combined
and unaudited pro forma equivalent per share financial information
for the nine months ended September 30, 1995 and 1994 and for the
years ended December 31, 1994, 1993 and 1992. The information about
Hibernia Common Stock does not take into effect the proposed issuance
of 889,640 shares in connection with a previously announced plan to
acquire FNB Bancshares, Inc. Year-end information under the column
titled "Hibernia Corporation" is derived from Hibernia's Current
Report on Form 8-K dated October 12, 1995, which reflects the impact
of the mergers with American Bank (American) consummated on March 1,
1995, STABA Bancshares, Inc. (STABA) consummated on May 1, 1995, Bank
of St. John and Progressive Bancorporation, Inc. (Progressive), both
of which were consummated on July 1, 1995, all of which were
accounted for as poolings of interests. The September 30 information
is derived from Hibernia's Quarterly Report on Form 10-Q for
September 30, 1995. Information under the column titled "Bunkie
Bancshares, Inc." is based on, and should be read in conjunction
with, the historical financial statements and related notes of Bunkie
Bancshares, Inc. contained elsewhere in this Proxy Statement-
Prospectus.
Information under the column entitled "Pro Forma Hibernia Corporation
(With Bunkie Bancshares, Inc.)" is based upon the pro forma financial
statements and related notes contained elsewhere herein. Such pro
forma combined information, which reflects the Merger and the mergers
consummated in 1995 with American, STABA, Bank of St. John and
Progressive 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
any of the mergers been consummated at the beginning of the periods
indicated or that may be obtained in the future. The pro forma
combined information gives effect to the issuance, in each of the
periods presented, of approximately 170.34 shares of Hibernia Common
Stock for each outstanding share of Bunkie Bancshares, Inc. Common
Stock.
The information under the column entitled "Bunkie Bancshares, Inc.
Pro Forma Equivalent" is derived by multiplying the numbers contained
in the column titled "Pro Forma Hibernia Corporation (with Bunkie
Bancshares, Inc.)" by the Exchange Rate of 170.34. See "The Merger -
Consideration to be Received in the Merger."
<PAGE>
<TABLE>
HIBERNIA CORPORATION AND BUNKIE BANCSHARES, INC.
COMPARATIVE PER SHARE INFORMATION
Unaudited
PRO FORMA
HIBERNIA BUNKIE
CORPORATION BANCSHARES, INC.
HIBERNIA BUNKIE (WITH BUNKIE PRO FORMA
CORPORATION BANCSHARES, INC. BANCSHARES, INC.) EQUIVALENT
Per Common Share:
Income from continuing operations:
<S> <C> <C> <C> <C>
For the nine months ended September 30,
1995 $0.75 $99.17 $0.75 $127.76
1994 0.64 77.07 0.64 109.02
For the year ended December 31,
1994 $0.81 $110.09 $0.80 $136.27
1993 0.57 110.78 0.57 97.09
1992 0.12 131.55 0.13 22.14
Cash dividends:
For the nine months ended September 30,
1995 $0.18 $22.45 $0.18 $30.66
1994 0.13 18.75 0.13 22.14
For the year ended December 31,
1994 $0.19 $45.00 $0.19 $32.36
1993 0.03 45.00 0.03 5.11
1992 - 45.00 - -
Book Value:
At September 30, 1995 $5.74 $879.79 $5.73 $976.05
At December 31, 1994 4.98 761.95 4.97 846.59
</TABLE>
From time to time, Hibernia investigates and holds discussions
and negotiations in connection with possible merger or similar
transactions with other financial institutions. At the date
hereof, Hibernia has entered into a definitive merger agreement
with one financial institution in addition to Bunkie which is
described in documents incorporated herein by reference and
described under "PRO FORMA FINANCIAL INFORMATION" herein. In
addition, Hibernia contemplates pursuing other possible acquisition
opportunities and intends to continue to pursue such opportunities
in the near future when available and feasible in the light of
Hibernia's business and strategic plans. Although it is
anticipated that such transactions may be entered into both before
and after the Merger, there can be no assurance as to when or if,
or the terms upon which, such transactions may be pursued or
consummated. If required under applicable law, any such
transactions would be subject to regulatory approval and the
approval of shareholders of the acquired institution.
Other Pending Merger Transaction for Hibernia
In addition to Bunkie, Hibernia has entered into a definitive
merger agreement with FNB Bancshares, Inc., the parent company of
First National Bank of Lake Providence (the "FNB Merger"). That
transaction is subject to certain conditions, similar to the
conditions to the Merger described herein. That transaction may be
consummated before or after consummation of the Merger.
Shareholders of Bunkie will not have the right to vote on the other
pending transactions, or any other transaction that might be
entered into by Hibernia prior to the Effective Date of the Merger
(as defined in the Agreement and Plan of Merger of Bunkie
Bancshares, Inc. with and into Hibernia Corporation, attached as
Appendix A). In addition, if the Merger is consummated prior to
consummation of another transaction, former shareholders of Bunkie
who have not exercised and perfected dissenters' rights will be
shareholders of Hibernia at the time those transactions are
consummated. Shareholders of Hibernia do not have the right to
vote on any of the merger transactions that are currently pending.
As of September 30, 1995 FNB Bancshares, Inc. had deposits
totalling $44 million, assets totalling $51 million, and
shareholders' equity of approximately $5.9 million. Because the
effect on the financial statements of Hibernia is immaterial, pro
forma financial information relating to FNB Bancshares, Inc. has
not been included herein.
SUMMARY
This summary is necessarily general and abbreviated and has
been prepared to assist shareholders of Bunkie in their review of
this Proxy Statement-Prospectus. This summary is not intended to
be a complete explanation of the matters covered in this Proxy
Statement-Prospectus and is qualified in its entirety by reference
to the more detailed information contained elsewhere in this Proxy
Statement-Prospectus, the Appendices hereto and the documents
incorporated herein by reference, all of which shareholders are
urged to read carefully prior to the Special Meeting.
The Proposed Merger
In accordance with the terms of the Agreement, Bunkie will be
merged with and into Hibernia, whereupon the separate existence of
Bunkie 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 Bunkie Common Stock, other than shares
held by shareholders who exercise and perfect dissenters' rights in
accordance with Louisiana law, will be converted into 170.3398
shares of Hibernia Common Stock, and a total of 1,874,760 shares of
Hibernia Common Stock will be issued in exchange for all of the
outstanding shares of Bunkie.
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 Bunkie and the Bank will no longer hold their
positions as directors. See "PROPOSED MERGER -- Management and
Operations After the Merger." Certain officers of Bunkie and its
subsidiaries have executed or intend to execute employment
agreements with Hibernia, and Hibernia maintains an advisory board
of directors in the Alexandria region of Louisiana on which some
or all of the directors of Bunkie and its subsidiaries may serve.
Recommendation of the Board of Directors
THE BOARD OF DIRECTORS OF BUNKIE HAS UNANIMOUSLY APPROVED THE
AGREEMENT, BELIEVES THAT THE MERGER IS IN THE BEST INTERESTS OF THE
SHAREHOLDERS OF BUNKIE AND RECOMMENDS THAT THE SHAREHOLDERS VOTE
FOR THE MERGER. The Board of Directors has received from Southard
Financial an opinion that the terms of the Merger are fair, from a
financial point of view, to the shareholders of Bunkie. See
"PROPOSED MERGER -- Opinion of Financial Advisor." Bunkie's Board
believes that the Merger will provide significant value to all
Bunkie shareholders and will enable them to participate in
opportunities for growth that Bunkie's Board believes the Merger
makes possible. In recommending the Merger to the shareholders,
Bunkie's Board of Directors considered, among other factors, the
financial terms of the Merger, the liquidity it will afford
Bunkie's shareholders and the business earnings and potential for
future growth of Bunkie and Hibernia. 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 Bunkie in approving the terms of the Merger, including, without
limitation, information concerning the financial condition, results
of operations and prospects of Hibernia, Bunkie, 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 Bunkie's Common Stock; the
consideration to be received by Bunkie shareholders in relation to
Bunkie's earnings and book value; the anticipated tax-free nature
of the Merger to Bunkie's shareholders for federal income tax
purposes; and the financial terms of other recent business
combinations in the banking industry. See "PROPOSED MERGER --
Background of and Reasons for the Merger."
Advice and Opinion of Financial Advisor
Southard Financial, Bunkie's financial advisor, has rendered
a written opinion that the terms of the Merger are fair, from a
financial point of view, to Bunkie's shareholders. A copy of the
opinion of Southard Financial is attached hereto as Appendix B and
should be read in its entirety with respect to the assumptions made
therein and other matters considered. See "PROPOSED MERGER --
Opinion of Financial Advisor" for further information regarding,
among other things, the selection of such firm and its compensation
in connection with the Merger.
Votes Required
Approval of the Merger requires the affirmative vote of the
holders of two-thirds of the voting power of Bunkie present at the
Special Meeting. The Board of Directors has fixed the close of
business on November 10, 1995 as the record date (the "Record
Date") for determining the shareholders entitled to receive notice
of, and to vote at, the Special Meeting. Directors of Bunkie and
members of their families have voting power with respect to 8,204
shares of Bunkie Common Stock, representing 74.0% of the Bunkie
Common Stock issued and outstanding as of the Record Date. See
"PROPOSED MERGER -- Ownership of Bunkie Common Stock." Subject to
receipt of certain fairness opinions from Southard Financial, the
directors of Bunkie have agreed to vote their stock in favor of
approval of the Agreement at any meeting of Bunkie's shareholders
held before March 31, 1996 at which the Merger is considered,
unless they are legally required to abstain from voting or to vote
against the Merger in the opinion of their counsel. See "MEETING
INFORMATION -- Record Date; Voting Rights" and "CERTAIN INFORMATION
RELATING TO BUNKIE -- 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 Bunkie and the Federal Reserve Board and approval
of the Bank Merger by the Office of the Comptroller of the Currency
("OCC"). [Both the OCC and the Federal Reserve Board have approved
the Merger.] Applicable law provides that the Merger may not be
consummated until at least 15, but no more than 90, days after
approval of the Federal Reserve Board is obtained, which prohibits
the consummation of the Merger prior to [date], 1995. 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 Bunkie's shareholders may reduce the ratio of Hibernia
Common Stock to Bunkie Common Stock to be issued in the Merger (the
"Exchange Ratio"). Any other material change to the Agreement
after the date of the Special Meeting would require, however, a
resolicitation of Bunkie's shareholders for the purpose of voting
on the transaction as amended. In addition, the Agreement may be
terminated, either before or after shareholder approval, under
certain circumstances. See "PROPOSED MERGER -- Representations and
Warranties; Conditions to Closing; Waiver" and "-- Effective Date
of the Merger; Termination."
Interests of Certain Persons in the Merger
The terms of the Merger include certain benefits for employees
and management of Bunkie, including employment agreements between
Hibernia and James Lynn Bordelon, Michael J. Thevenot, Steve
Normand and John A. Boatner, Jr., and indemnification of officers,
directors and employees of Bunkie for certain liabilities up to
certain aggregate limitations. See "PROPOSED MERGER."
Employee Benefits
Hibernia has agreed as part of the Agreement that it will
offer to all employees of Bunkie who are employed as of the
Effective Date and who become employees of Hibernia or HNB after
the Merger, the same employee benefits as those offered by Hibernia
and HNB to their employees, except that employees of Bunkie will
not be required to wait for any period in order to be eligible to
participate in Hibernia's Flex Plan (including its medical and
dental coverage). Hibernia will also give Bunkie employees who
become Hibernia employees full credit for their years of service
(for both eligibility and vesting) with Bunkie for purposes of
Hibernia's 401(k) plan, the Retirement Security Plan. Hibernia has
also agreed to pay or provide certain other benefits. See
"PROPOSED MERGER -- EMPLOYEE BENEFITS."
Material Tax Consequences
It is a condition to consummation of the Merger that the
parties receive an opinion of counsel or a public accounting firm
to the effect that the Merger when consummated in accordance with
the terms of the Agreement will constitute a reorganization within
the meaning of Section 368(a) of the Internal Revenue Code of 1986,
as amended (the "Code"), and that the exchange of Bunkie Common
Stock for Hibernia Common Stock will not give rise to the
recognition of gain or loss for federal income tax purposes to
Bunkie's shareholders with respect to such exchange. The parties
have received an opinion from Ernst & Young LLP, certified public
accountants, who also serve as independent auditors for Hibernia,
to the effect that the Merger, when consummated in accordance with
the terms of the Agreement, will constitute a reorganization within
the meaning of Section 368(a) of the Code. A copy of such opinion
is attached hereto as Appendix D. See "PROPOSED MERGER -- Material
Tax Consequences."
Because of the complexities of the tax laws and because the
tax consequences may vary depending upon a holder's individual
circumstances or tax status, it is recommended that each
shareholder of Bunkie consult his or her tax advisor concerning the
federal (and any applicable state, local or other) tax consequences
of the Merger to him, her or it.
Dissenters' Rights
Each holder of Bunkie Common Stock who objects to the Merger
is entitled to the rights and remedies of dissenting shareholders
provided in the Louisiana Business Corporation Law, Louisiana
Revised Statutes Section 12:131, a copy of which is attached hereto
as Appendix C. However, if dissenters' rights are exercised and
perfected with respect to 10% or more of the outstanding shares of
Bunkie 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 Bunkie, to the
extent they receive shares of Hibernia Common Stock in the Merger,
will become shareholders of Hibernia and their rights as such will
be governed by Hibernia's Articles of Incorporation and Bylaws.
The rights of shareholders of Hibernia are different in certain
respects from the rights of shareholders of Bunkie. See "PROPOSED
MERGER -- Certain Differences in Rights of Shareholders."
Accounting Treatment
The parties intend the Merger to be treated as a pooling of
interests for financial accounting purposes. If, among other
things, holders of more than 10% of the outstanding shares of
Bunkie Common Stock exercise and perfect dissenters' rights, the
Merger will not qualify for pooling-of-interests accounting
treatment, and Hibernia will not be obligated to effect the Merger.
See "PROPOSED MERGER -- Accounting Treatment."
MEETING INFORMATION
General
Each copy of this Proxy Statement-Prospectus mailed to holders
of Bunkie Common Stock is accompanied by a proxy card furnished in
connection with the solicitation of proxies by Bunkie'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 Bunkie on
approximately November __, 1995. The Special Meeting is scheduled
to be held on December 22, 1995 at 10:00 a.m. local time, at the
main office of Bunkie Bank & Trust Company, 122 West Church Street,
Bunkie, Louisiana 71322-1717. Only holders of record of Bunkie
Common Stock at the close of business on November 10, 1995 are
entitled to notice of and to vote at the Special Meeting. At the
Special Meeting, the shareholders of Bunkie will consider and vote
upon a proposal to approve the Merger and the related Agreement,
and such other matters as may properly be brought before the
Special Meeting.
HOLDERS OF BUNKIE COMMON STOCK ARE REQUESTED TO COMPLETE, DATE
AND SIGN THE ACCOMPANYING PROXY CARD AND RETURN IT PROMPTLY TO
BUNKIE IN THE ENCLOSED POSTAGE-PAID, ADDRESSED ENVELOPE.
Any holder of Bunkie 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 Bunkie, provided that such notice or proxy card must
actually be received by Bunkie before the vote of shareholders at
the Special Meeting. A shareholder who votes in person at the
Special Meeting in a manner that is inconsistent with a proxy
previously filed on the shareholder's behalf will be deemed to have
revoked his or her proxy as to that matter only. Any notice of
revocation or proxy card should be sent to Bunkie at 122 West
Church Street, Bunkie, Louisiana 71322-1717, Attention: Frank
Mulhearn, Secretary.
The shares of Bunkie 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 Merger and the related Agreement. If any other
matters are properly presented for consideration at the Special
Meeting, the persons named in the accompanying 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 Merger and the related Agreement. As of the date of
this Proxy Statement-Prospectus, Bunkie's Board of Directors is
unaware of any matter to be presented at the Special Meeting other
than the proposal to approve the Merger.
Any costs of soliciting proxies from shareholders of Bunkie
will be borne by Bunkie. Such solicitation will be made by mail
but also may be made by telephone or in person by the directors,
officers and employees of Bunkie (who will receive no additional
compensation for doing so).
BUNKIE SHAREHOLDERS SHOULD NOT FORWARD ANY STOCK CERTIFICATES
WITH THEIR PROXY CARDS. IF THE MERGER IS CONSUMMATED, SHAREHOLDERS
OF BUNKIE WILL RECEIVE INSTRUCTIONS REGARDING THE EXCHANGE OF THEIR
BUNKIE STOCK CERTIFICATES FOR CERTIFICATES REPRESENTING HIBERNIA
COMMON STOCK.
Votes Required
As of the Record Date, there were 11,006 shares of Bunkie
Common Stock issued and outstanding and entitled to vote at the
Special Meeting, with each share being entitled to one vote. The
affirmative vote of two-thirds of the voting power of Bunkie
present or represented by proxy and entitled to vote at the Special
Meeting will be required to approve the Merger. Members of
Bunkie's Board of Directors and executive officers, along with
members of their families who are expected to vote in favor of
approval of the Merger, own 74.0% of the outstanding Bunkie Common
Stock.
For purposes of the Special Meeting, the presence in person or
by proxy of a majority of the outstanding shares of Bunkie Common
Stock is necessary to constitute a quorum of shareholders in order
to take action. For these purposes, shares of Bunkie Common Stock
which are present, or represented by proxy, at the Special Meeting
will be counted for quorum purposes regardless whether the holder
of the shares or proxy actually votes on the Merger or whether a
broker with discretionary authority fails to exercise its
discretionary voting authority with respect to the Merger.
Accordingly, an "abstention" will be considered present for quorum
purposes, but will have the same effect as a vote "against" the
proposal as to which the abstention is made. The affirmative vote
of two-thirds of the voting power of Bunkie present or represented
by proxy at the Special Meeting will be necessary to approve the
Merger.
The directors and executive officers of Bunkie and their
affiliates beneficially owned a total of 7,685 shares or
approximately 69.0% of the issued and outstanding shares of Bunkie
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 Bunkie Common Stock owned by him in favor of the
proposal to approve the Merger. Additionally, Bunkie has been
advised that all of its directors and executive officers intend to
vote their shares in favor of approval of the Merger.
As of the Record Date, the directors and executive officers of
Hibernia and their affiliates beneficially owned no shares of
Bunkie Common Stock.
Approval of the Merger by Hibernia shareholders is not
required under applicable law.
Recommendation of Bunkie's Board
Bunkie's Board has unanimously approved the Merger and
unanimously recommends that Bunkie's shareholders vote 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 Bunkie is not aware of any business
to be acted upon at the Special Meeting other than consideration of
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.
PRO FORMA FINANCIAL INFORMATION
The following pro forma financial statements reflect all of
Hibernia's pending mergers giving effect to the assumptions and
adjustments described in the accompanying notes.
The year-end information in the column titled "Hibernia
Corporation" on the Pro Forma Combined Income Statement is
summarized from the supplemental consolidated financial statements
of Hibernia Corporation filed in Hibernia's Current Report on Form
8-K dated October 12, 1995 which reflects the impact of the mergers
with American Bank consummated on March 1, 1995, STABA Bancshares,
Inc. consummated on May 1, 1995 and Bank of St. John and
Progressive Bancorporation, Inc., both of which were consummated on
July 1, 1995, all of which were accounted for as poolings of
interests.
The information at September 30, 1995 and for the nine month
periods ended September 30, 1995 and 1994 in the column titled
"Hibernia Corporation" is summarized from the unaudited
consolidated financial statements of Hibernia Corporation filed in
Hibernia's Quarterly Report on Form 10-Q for the quarter ended
September 30, 1995.
The information contained in the column titled "Bunkie Bancshares,
Inc." is based on December 31, 1994, 1993, and 1992 audited
financial statements and unaudited financial statements for
September 30, 1995 and the nine month periods ended September 30,
1995 and 1994.
The Pro Forma Financial Statements do not purport to be indicative
of the results that actually would have occurred if the merger or
the pending transaction had occurred on the dates indicated or that
may be obtained in the future.
On September 7, 1995, Hibernia announced that it had executed an
agreement and plan of merger with FNB Bancshares, Inc., a Louisiana
corporation headquartered in Lake Providence, Louisiana ("FNB").
Shareholders of FNB will receive an aggregate of 889,640 shares of
Hibernia Common Stock in the merger. It is assumed that this
merger will be accounted for as a pooling of interests, however due
to the insignificance of the transaction, it has been omitted from
the pro forma statements and calculations.
The merger with FNB Bancshares, Inc. is subject to the satisfaction
of certain conditions similar to those described herein with regard
to the merger. There can be no assurances that the proposed merger
will occur.
<PAGE>
PRO FORMA COMBINED BALANCE SHEET
(Unaudited)
The following unaudited pro forma combined balance sheet combines
the balance sheets of Hibernia and Bunkie Bancshares, Inc. as if
the merger had been effective on September 30, 1995. This
unaudited pro forma combined balance sheet should be read in
conjunction with the historical financial statements and related
notes of Hibernia contained in Hibernia's Quarterly Report on Form
10-Q for the quarter ended September 30, 1995 and its Current
Report on Form 8-K dated October 12, 1995, each incorporated by
reference into this Proxy Statement - Prospectus, and the
historical financial statements and related notes of Bunkie
Bancshares, Inc. contained elsewhere herein.
<PAGE>
<TABLE>
HIBERNIA CORPORATION
PRO FORMA COMBINED BALANCE SHEET
September 30, 1995
(C)
BUNKIE PRO PRO FORMA
HIBERNIA BANCSHARES, FORMA HIBERNIA
Unaudited ($ in thousands) CORPORATION INC. ADJ CORPORATION
<S> <C> <C> <C> <C>
ASSETS
Cash and due from banks $311,749 $3,088 $314,837
Short-term investments 90,195 2,815 93,010
Securities available for sale 528,547 14,155 542,702
Securities held to maturity 1,669,856 35,157 1,705,013
Loans, net of unearned income 4,205,114 46,769 4,251,883
Reserve for possible loan losses (151,161) (611) (151,772)
Loans, net 4,053,953 46,158 - 4,100,111
Bank premises and equipment 117,450 2,615 120,065
Customers' acceptance liability 115 - 115
Other assets 190,581 1,682 192,263
TOTAL ASSETS $6,962,446 $105,670 - $7,068,116
LIABILITIES
Deposits:
Demand, noninterest-bearing $1,077,609 $12,384 $1,089,993
Interest-bearing 4,846,254 82,787 4,929,041
Total Deposits 5,923,863 95,171 - 6,019,034
Short-term borrowings 238,668 - 238,668
Liability on acceptances 115 - 115
Other liabilities 117,898 816 118,714
Debt 8,837 - 8,837
TOTAL LIABILITIES 6,289,381 95,987 - 6,385,368
SHAREHOLDERS' EQUITY
Preferred Stock - - -
Common Stock 229,051 221 $3,379 (B) 232,651
Surplus 377,940 2,272 (3,386)(B) 376,826
Retained earnings 80,837 7,298 88,135
Treasury Stock - (7) 7 (B) -
Unrealized gains (losses) on securities available for sale 1,281 (101) 1,180
Unearned compensation (16,044) - (16,044)
TOTAL SHAREHOLDERS' EQUITY 673,065 9,683 - 682,748
TOTAL LIABILITIES AND SHAREHOLDERS' EQUITY $6,962,446 $105,670 - $7,068,116
See notes to Pro Forma Combined Financial Statements.
</TABLE>
<PAGE>
PRO FORMA COMBINED INCOME STATEMENTS
(Unaudited)
The following unaudited pro forma combined income statements for
the nine months ended September 30, 1995 and 1994 and the years
ended December 31, 1994, 1993, and 1992 combine the income
statements of Hibernia and Bunkie Bancshares, Inc. as if the Merger
had been effective on January 1, 1992. The unaudited pro forma
combined income statements should be read in conjunction with the
consolidated financial statements and notes of Hibernia contained
in Hibernia's Quarterly Report on Form 10-Q for the quarter ended
September 30, 1995 and its Current Report on Form 8-K dated October
12, 1995, each incorporated by reference into this Proxy Statement
- - Prospectus, and the historical financial statements and notes of
Bunkie Bancshares, Inc. contained elsewhere herein. The costs
associated with the Merger, estimated to be approximately $50,000
, will be accounted for as a current period expense when incurred.
<PAGE>
<TABLE>
HIBERNIA CORPORATION
PRO FORMA COMBINED INCOME STATEMENT
Nine Months Ended September 30, 1995
(C)
BUNKIE PRO FORMA
HIBERNIA BANCSHARES, HIBERNIA
Unaudited ($ in thousands, except per share data) CORPORATION INC. CORPORATION
<S> <C> <C> <C>
Interest Income
Interest and fees on loans $267,629 $3,184 $270,813
Interest on securities:
U.S. government securities and obligations of
U.S. government agencies 113,008 2,300 115,308
Obligations of states and political subdivisions 1,848 238 2,086
Trading account interest 1 - 1
Interest on time deposits in domestic banks 269 35 304
Interest on federal funds sold and securities
purchased under agreements to resell 5,243 143 5,386
Total Interest Income 387,998 5,900 393,898
Interest Expense
Interest on deposits 156,624 2,782 159,406
Interest on federal funds purchased and
securities sold under agreements to repurchase 9,615 - 9,615
Interest on debt and other 464 - 464
Total Interest Expense 166,703 2,782 169,485
Net Interest Income 221,295 3,118 224,413
Provision for possible loan losses - (150) (150)
Net Interest Income After Provision for
Possible Loan Losses 221,295 3,268 224,563
Noninterest Income
Service charges on deposits 32,832 518 33,350
Trust fees 8,718 - 8,718
Other service, collection and exchange charges 19,934 36 19,970
Gain on divestiture of banking offices 2,361 - 2,361
Gain on sale of business lines 3,345 - 3,345
Other operating income 5,814 34 5,848
Securities gains (losses), net (65) 12 (53)
Total Noninterest Income 72,939 600 73,539
Noninterest Expense
Salaries and employee benefits 94,534 1,167 95,701
Occupancy expense, net 19,089 302 19,391
Equipment expense 14,893 175 15,068
Data processing expense 14,571 - 14,571
Foreclosed property expense (775) 1 (774)
Other operating expense 55,668 764 56,432
Total Noninterest Expense 197,980 2,409 200,389
Income Before Income Taxes 96,254 1,459 97,713
Income tax expense 7,148 365 7,513
Income from Continuing Operations $89,106 $1,094 $90,200
Pro Forma Weighted Average Common Shares 118,038,657 1,874,760 119,913,417
Pro Forma Income Per Common Share
from Continuing Operations (D) $0.75 $0.75
See notes to Pro Forma Combined Financial Statements.
</TABLE>
<PAGE>
<TABLE>
HIBERNIA CORPORATION
PRO FORMA COMBINED INCOME STATEMENT
Nine Months Ended September 30, 1994
(C)
BUNKIE PRO FORMA
HIBERNIA BANCSHARES, HIBERNIA
Unaudited ($ in thousands, except per share data) CORPORATION INC. CORPORATION
<S> <C> <C> <C>
Interest Income
Interest and fees on loans $210,975 $2,674 $213,649
Interest on securities:
U.S. government securities and obligations of
U.S. government agencies 113,194 1,883 115,077
Obligations of states and political subdivisions 1,224 215 1,439
Trading account interest 20 20
Interest on time deposits in domestic banks 129 71 200
Interest on federal funds sold and securities
purchased under agreements to resell 5,056 104 5,160
Total Interest Income 330,598 4,947 335,545
Interest Expense
Interest on deposits 112,321 2,070 114,391
Interest on federal funds purchased and
securities sold under agreements to repurchase 4,190 - 4,190
Interest on debt and other 2,414 - 2,414
Total Interest Expense 118,925 2,070 120,995
Net Interest Income 211,673 2,877 214,550
Provision for possible loan losses (18,173) - (18,173)
Net Interest Income After Provision for
Possible Loan Losses 229,846 2,877 232,723
Noninterest Income
Service charges on deposits 33,251 394 33,645
Trust fees 9,463 - 9,463
Other service, collection and exchange charges 15,965 45 16,010
Other operating income 9,184 13 9,197
Securities gains, net 1,824 87 1,911
Total Noninterest Income 69,687 539 70,226
Noninterest Expense
Salaries and employee benefits 93,957 1,104 95,061
Occupancy expense, net 18,998 257 19,255
Equipment expense 11,316 173 11,489
Data processing expense 15,688 - 15,688
Foreclosed property expense (5,722) 3 (5,719)
Other operating expense 82,346 757 83,103
Total Noninterest Expense 216,583 2,294 218,877
Income Before Income Taxes 82,950 1,122 84,072
Income tax expense 6,686 272 6,958
Income from Continuing Operations $76,264 $850 $77,114
Pro Forma Weighted Average Common Shares 118,555,306 1,874,760 120,430,066
Pro Forma Income Per Common Share
from Continuing Operations (D) $0.64 $0.64
See notes to Pro Forma Combined Financial Statements.
</TABLE>
<PAGE>
HIBERNIA CORPORATION
NOTES TO PRO FORMA COMBINED FINANCIAL STATEMENTS
A. In March 1995, Hibernia National Bank merged with American
Bank in a transaction accounted for as a pooling of interests.
Hibernia issued 2,098,968 shares of Hibernia Common Stock in
such transaction, with a market price of $7.4875 and a stated
value of $4,030,019.
In May 1995, Hibernia merged with STABA Bancshares, Inc. in a
transaction accounted for as a pooling of interests. Hibernia
issued 2,180,133 shares of Hibernia Common Stock in such
transaction, with a market price of $8.2563 and a stated value
of $4,185,855.
In July 1995, Hibernia National Bank merged with Bank of St.
John in a transaction accounted for as a pooling of interests.
Hibernia issued 3,338,700 shares of Hibernia Common Stock in
such transaction, with a market price of $9.00 and a stated
value of $6,410,304.
In July 1995, Hibernia merged with Progressive Bancorporation,
Inc. in a transaction accounted for as a pooling of interests.
Hibernia issued 2,488,249 shares of Hibernia Common Stock with
market price of $8.925 and a stated value of $4,777,438.
In addition, upon the merger with Progressive each issued and
outstanding share of Progressive Preferred Stock was converted
into the right to receive cash in the amount of $12.50 per
share plus all accumulated and unpaid dividends thereon,
amounting to $3,457,000.
B. Hibernia plans to issue 1,874,760 shares of Hibernia Common
Stock with an aggregate market value at the date of the Merger
of $19,684,980 based upon an assumed market value of $10.50
per share to effect the Merger. Based on the 11,006 shares of
Bunkie Common Stock outstanding on the Record Date the
Exchange Rate in the Merger will be approximately 170.34. The
stated value of Hibernia Common Stock is $1.92 per share. In
accordance with the pooling of interests method of accounting,
the historical equities of the merged companies are combined.
C. In addition to the Merger, Hibernia is a party to a pending
merger with FNB Bancshares, Inc. It is assumed that Hibernia
will issue 889,640 shares of Hibernia Common Stock with an
aggregate market value at the date of the merger of $9,341,200
based upon an assumed market value of $10.50 per share, to
effect the merger. Based upon the 9,670 shares of FNB
Bancshares, Inc. outstanding, the exchange rate in the merger
will be approximately 92.00. The stated value of Hibernia
Common Stock is $1.92 per share. It is assumed that this
merger will be accounted for as a pooling of interests,
however due to the insignificance of this transaction, it has
been omitted from the pro forma statements and calculations.
D. Hibernia 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's pre-merger operations in the
respective geographic area. The majority of the savings will
be achieved through consolidation of certain operations. The
extent to which the savings will be achieved depends, among
other things, on the regulatory environment and economic
conditions, and may be affected by unanticipated changes in
business activities, inflation and certain external factors
such as Federal Deposit Insurance Corporation ("FDIC")
assessments. Therefore, there can be no assurance that such
savings will be realized. No adjustment has been included in
the unaudited pro forma financial statements for the
anticipated savings.
PROPOSED MERGER
This section of the Proxy Statement-Prospectus describes
certain aspects of the Merger. The following description does not
purport to be complete and is qualified in its entirety by
reference to the Agreement, which is attached as Appendix A to this
Proxy Statement-Prospectus and is incorporated herein by reference.
All shareholders are urged to read the Agreement carefully and in
its entirety.
Background and Reasons for Merger
As a result of recent improvement in the Louisiana economy,
there has been a sharp increase in the level of interest in and the
number of acquisitions of financial institutions in Louisiana. One
of the responsibilities of the Board of Directors of Bunkie is to
consider various strategic alternatives, including whether to
affiliate with a larger, more diversified financial organization,
as viable opportunities might arise.
In July of 1995 Hibernia contacted representatives of Bunkie
and expressed an interest in a proposed merger. After several
meetings and extensive negotiations, the Agreement was executed on
September 7, 1995. The Agreement calls for an exchange of Hibernia
Common Stock for all of the outstanding shares of Bunkie in a tax-
free merger.
In determining that the Merger was in the best interests of
Bunkie and its stockholders, the Board of Directors of Bunkie
considered numerous factors, including: (a) the business, earnings
and potential for future growth of Bunkie and Hibernia; (b)
potential operational and managerial benefits that could be derived
from the Merger; (c) the consideration to be received by Bunkie
stockholders in the Merger in relation to the book value and
earnings of Bunkie; (d) prices paid in similar merger transactions;
(e) the tax-free nature of the stock-for-stock exchange; (f) the
liquidity provided by holding shares of Hibernia which are traded
on the NYSE; and (g) the fairness opinion issued by Southard
Financial.
Based on the foregoing, the Board of Directors of Bunkie has
unanimously approved the Agreement and believes that the Merger is
in the best interests of the shareholders of Bunkie, and recommends
that the shareholders vote FOR the Merger. The Board of Directors
has received from Southard Financial an opinion that the terms of
the Merger are fair, from a financial point of view, to the common
shareholders of Bunkie. See "PROPOSED MERGER -- Opinion of
Financial Advisor." Bunkie's Board believes that the Merger will
provide significant value to all Bunkie shareholders and will
enable them to participate in opportunities for growth that
Bunkie's Board believes the Merger makes possible.
Terms of the Merger
An aggregate 1,874,760 shares of Hibernia Common Stock will
be issued in exchange for all outstanding shares of Bunkie Common
Stock. Based upon the current number of shares of Bunkie Common
Stock outstanding, on the Effective Date, each outstanding share of
Bunkie Common Stock (other than shares held by dissenting
shareholders) will be converted into 170.3398 shares of Hibernia
Common Stock. Bunkie has agreed that it will not issue additional
shares of Bunkie Common Stock prior to the Effective Date.
Upon the effectiveness of the Merger, the conversion of shares
of Bunkie Common Stock to Hibernia Common Stock will be automatic,
and Bunkie shareholders will automatically be entitled to all of
the rights and privileges afforded to Hibernia shareholders as of
such date. However, the exchange of Bunkie stock certificates for
certificates representing Hibernia Common Stock will occur after
the Effective Date of the Merger.
SHAREHOLDERS OF BUNKIE SHOULD NOT FORWARD THEIR STOCK
CERTIFICATES TO BUNKIE OR HIBERNIA AT THIS TIME. IF THE MERGER IS
CONSUMMATED, BUNKIE SHAREHOLDERS WILL RECEIVE INSTRUCTIONS
REGARDING THE EXCHANGE OF THEIR CERTIFICATES FOR HIBERNIA COMMON
STOCK.
For a discussion of the rights of dissenting shareholders, see
"PROPOSED MERGER -- Rights of Dissenting Shareholders."
Advice and Opinion of Financial Advisor
Bunkie retained the financial institutions consulting firm of
Southard Financial, Memphis, Tennessee ("Southard") to render its
opinion as to the fairness, from a financial point of view, to the
holders of Bunkie Common Stock of the consideration to be paid in
the Merger. In connection with this engagement, Southard evaluated
the financial terms of the Merger, but was not asked to, and did
not, recommend the specific ratio of exchange between Bunkie Common
Stock and Hibernia Common Stock and did not assist in the merger
negotiations. The ratio of exchange was determined by Hibernia and
Bunkie's respective boards of directors after arm's length
negotiations. Bunkie did not place any limitations on the scope of
Southard's investigation or review.
Southard is a financial valuation consulting firm,
specializing in the valuation of closely-held companies and
financial institutions. Since its founding in 1987, Southard has
provided approximately 1,000 valuation opinions for clients in over
40 states. Further, Southard provides valuation services for
approximately 100 financial institutions annually.
Southard provided the board of Bunkie with a fairness opinion
letter and supporting documentation. The full text of the opinion
letter of Southard, dated November 15, 1995, which sets forth
certain assumptions made, matters considered, and limitations on
the review performed, is set forth as Appendix B to this Proxy
Statement/Prospectus and should be read in its entirety. The
summary of the opinion of Southard set forth in this Proxy
Statement/Prospectus is qualified in its entirety by reference to
the opinion.
In arriving at its opinion, Southard conducted interviews with
officers of Hibernia and Bunkie and reviewed the documents
indicated in the opinion letter. Southard did not independently
verify the accuracy and/or the completeness of the financial and
other information reviewed in rendering its opinion. Southard did
not, and was not requested to, solicit third party indications of
interest in acquiring any or all the assets of Bunkie.
In connection with rendering its opinion, Southard performed
a variety of financial analyses, which are summarized below.
Southard believes that its analyses must be considered as a whole
and that considering only selected factors could create an
incomplete view of the analyses and the process underlying the
opinion. The preparation of a fairness opinion is a complex
process involving subjective judgments and is not susceptible to
partial analyses. In its analyses, Southard made numerous
assumptions, many of which are beyond the control of Bunkie and
Hibernia. Any estimates contained in the analyses prepared by
Southard are not necessarily indicative of future results or
values, which may vary significantly from such estimates.
Estimates of value of companies do not purport to be appraisals or
necessarily reflect the prices at which companies or their
securities may actually be sold. None of the analyses performed by
Southard was assigned a greater significance than any other.
Dividend Yield Analysis. In evaluating the impact of the
proposed Merger on the shareholders of Bunkie, Southard reviewed
the dividend paying histories of Bunkie and Hibernia. Based on
this review, it is reasonable to expect that the shareholders of
Bunkie, in total, will receive dividends at or above the level
currently paid by Bunkie after the Merger is completed (defined as
post-Merger combined dividends per share times the exchange ratio
set forth in the Merger Agreement). Based upon 1995 expected
dividend rates for Hibernia and Bunkie and an exchange ratio of
170.3398 shares of Hibernia Common Stock for each share of Bunkie
Common Stock, the shareholders of Bunkie would see a decrease in
dividends of 4.6%.
Earnings Yield Analysis. In evaluating the impact of the
proposed Merger on the shareholders of Bunkie, Southard determined
that, based upon the exchange ratio of 170.3398 shares of Hibernia
Common Stock for each share of Bunkie Common Stock, the
shareholders of Bunkie would see an increase of 21.8% in their
share of earnings based upon reported 1994 earnings of Hibernia and
Bunkie. Based upon the average of independent third party
estimates of Hibernia's 1995 earnings and Bunkie's budgeted 1995
earnings, Bunkie's shareholders would see an increase of about
36.3% over what Bunkie would be expected to earn in 1995, absent
the Merger. Further, considering the fully-taxable equivalent
earnings of Hibernia in 1995 and 1996 (estimated), the Merger is
not expected to have an adverse earnings impact on Bunkie's
shareholders.
Book Value Analysis. In evaluating the impact of the proposed
Merger on the shareholders of Bunkie, Southard determined that the
shareholders of Bunkie would have seen an increase in the book
value of their investment had the proposed Merger been consummated
prior to September 30, 1995. Reported book value of Bunkie at
September 30, 1995 was $879.79 per share. Reported book value of
Hibernia at September 30, 1995 was $5.74 per share. Had the Merger
been consummated prior to September 30, 1995, each former Bunkie
share would have book value of $976.05 (Hibernia September 30, 1995
book value of $5.74 times 170.3398 shares). This represents 111.1%
of Bunkie's book value at September 30, 1995.
Analysis of Market Transactions. Based upon the Merger terms
and a closing price of Hibernia Common Stock of $10.625 as of
November 14, 1995, Bunkie shareholders would receive 205.7% of
September 30, 1995 book value per share, and 16.60 times reported
1994 earnings. Based upon the review conducted by Southard, the
pricing for Bunkie in the Merger is within the range of multiples
seen in recent bank acquisitions.
Fundamental Analysis. Southard reviewed the financial
characteristics of Bunkie and Hibernia with respect to
profitability, capital ratios, liquidity, asset quality, and other
factors. Southard compared Bunkie and Hibernia to a universe of
publicly traded banks and bank holding companies and to peer groups
prepared by the Federal Financial Institutions Examination Council.
Southard found that the post-merger combined entity will have
capital ratios and profitability ratios near those of the public
peer group.
Liquidity. Unlike Bunkie stock, shares of Hibernia Common
Stock to be received in the Merger will be registered with the SEC
and Hibernia Common Stock is actively traded on the New York Stock
Exchange. Further, except in the case of officers, directors and
certain large shareholders of Bunkie ("affiliated parties"),
Hibernia shares received will be freely tradeable with no
restrictions.
For rendering its opinion, Southard received a fee of $7,500,
plus reasonable out of pocket expenses. Southard has never been
engaged previously by Bunkie or Hibernia. Neither Southard nor any
of its principals owns an interest in the securities of Bunkie or
Hibernia.
Surrender and Exchange of Stock 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 Bunkie a letter of transmittal,
together with instructions for the exchange of their Bunkie Common
Stock certificates for certificates representing Hibernia Common
Stock. Until so exchanged, each certificate representing Bunkie
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 Bunkie Common Stock certificates for surrender until
they receive further instructions from the Exchange Agent.
Bunkie shareholders who cannot locate their Bunkie stock
certificates are encouraged to contact Frank Mulhearn, Secretary,
122 West Church Street, Bunkie, Louisiana 71322-1717, telephone:
(318) 346-2668 prior to the Special Meeting. New certificates will
be issued to Bunkie shareholders who have misplaced their
certificates only if the shareholder executes an affidavit
certifying that the certificate cannot be located and agreeing to
indemnify Bunkie and Hibernia (as its successor), against any claim
that may be made against either of them by the owner of the lost
certificate(s). Bunkie or Hibernia (as its successor) may require
a shareholder to post a bond in an amount sufficient to support the
shareholder's indemnification obligation. Shareholders who have
misplaced their stock certificates and shareholders who hold
certificates in names other than their own are encouraged to
resolve those matters prior to the Effective Date of the Merger in
order to avoid delays in receiving their Hibernia Common Stock if
the Merger is approved and consummated.
Employee Benefits
Hibernia has agreed as part of the Agreement that it will
offer to all employees of Bunkie who are employed as of the
Effective Date and who become employees of Hibernia or HNB after
the Merger, the same employee benefits as those offered by Hibernia
and HNB to their employees, except that employees of Bunkie will
not be required to wait for any period in order to be eligible to
participate in Hibernia's Flex Plan (including its medical and
dental coverage). Hibernia will also give Bunkie employees who
become Hibernia employees full credit for their years of service
(for both eligibility and vesting) with Bunkie for purposes of
Hibernia's 401(k) plan, the Retirement Security Plan.
Bunkie intends to terminate its existing profit sharing plan
and to distribute the funds in that plan to participants promptly
after receipt of a termination letter from the Internal Revenue
Service. Distributions from this plan may be rolled over into
Hibernia's Retirement Security Plan (its 401(k) plan) by persons
eligible to participate in Hibernia's plan, as long as the legal
requirements of such rollover are met.
Expenses
The Agreement provides that all expenses incurred in
connection with the negotiation and execution of the Agreement and
the consummation of the Merger will be borne by the party that
incurred them, regardless whether the Merger is consummated.
Representations and Warranties; Conditions to the Merger; Waiver
The Agreement contains representations and warranties by
Bunkie regarding, among other things, its organization, authority
to enter into the Agreement, capitalization, properties, financial
statements, pending and threatened litigation, contractual
obligations and contingent liabilities. The Agreement also
contains representations and warranties by Hibernia regarding,
among other things, its organization and authority to enter into
the Agreement, capitalization, financial statements and public
reports. Except as otherwise provided in the Agreement, these
representations and warranties will not survive the Effective Date.
The obligations of Hibernia and Bunkie to consummate the
Merger and the Bank Merger are conditioned upon, among other
things, approval of the Agreement by Bunkie'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 Bunkie Common Stock
is exchanged for Hibernia Common Stock, Bunkie'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 Bunkie, the receipt of
certain opinions of Southard Financial 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 Bunkie shareholders
holding more than 10% of the outstanding Bunkie 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 Bunkie's shareholders may reduce the Exchange Ratio.
In addition, any material change in the terms of the Merger after
the Special Meeting would require a resolicitation of votes from
Bunkie shareholders.
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, and the Merger must be consummated within 90
calendar days after such approval is obtained. Approval of the
Federal Reserve Board for the Merger was obtained on [date], 1995.
HNB is regulated by the OCC, and the Bank Merger consequently
must be approved by the OCC before it may be effected. [The OCC
has approved the Merger.]
Bunkie and Hibernia must wait at least 15 days after [date of
approval], 1995 (the date of Federal Reserve Board approval) before
they may consummate the Merger. During this 15-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 Commission
and the state securities regulators in those states that require
such registration. The shares will also be listed on the NYSE.
The regulatory approvals sought in connection with the Merger
and the Bank Merger may be obtained or denied prior to or after the
Special Meeting. The vote on the Merger at the Special Meeting is
not dependent or conditioned upon receipt of any such approvals
prior to the Special Meeting. Even if the Merger is approved at
the Special Meeting, it may not be consummated thereafter. Failure
to receive the requisite regulatory approvals will result in a
termination of the Agreement.
Business Pending the Merger
Under the terms of the Agreement, neither Bunkie 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 and except as provided
for in the Agreement; (iii) enter into or substantially modify any
employee benefits plans, except that Bunkie may amend its Profit
Sharing Plan in order to bring such plan into compliance with
applicable laws and regulations, and Bunkie may take steps to
terminate its Profit Sharing Plan, including, but not limited to,
the appointment of a successor trustee for purposes of distributing
the proceeds of the plan to participants; (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, Bunkie may not solicit bids or other transactions that
would result in a merger of Bunkie or the Bank with an entity other
than Hibernia or HNB. Bunkie may pay normal and customary
dividends prior to the Closing Date.
Effective Date of the Merger; Termination
After all conditions to consummation of the Merger have been
satisfied or waived, the effective date of the Merger shall be the
date and time 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 Bunkie'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 Bunkie fail to approve the Merger
at the Special Meeting; or (v) in the event that the Merger is not
consummated by March 31, 1996. The Agreement also may be
terminated at any time by the mutual consent of the parties. In
the event of termination, the Agreement becomes null and void,
except that certain provisions thereof relating to expenses and
confidentiality and the accuracy of information provided for
inclusion in the Registration Statement of which this Proxy
Statement-Prospectus is a part survive any such 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, Bunkie will be merged with and into
Hibernia. Immediately thereafter, the Bank will merge with and
into HNB and the separate existences of Bunkie 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 or HNB.
The Boards of Directors of Hibernia and HNB following the
Merger shall consist of those persons serving as directors
immediately prior thereto. Certain information regarding the
directors of Hibernia elected at its annual meeting of shareholders
on April 18, 1995 is contained in documents incorporated herein by
reference. See "AVAILABLE INFORMATION." The directors of Bunkie
and the Bank will resign their positions as directors as of the
Effective Date. Some of these directors may serve on an advisory
board of Hibernia after the Merger.
Certain Differences in Rights of Shareholders
If the shareholders of Bunkie approve the Merger and the
Merger is subsequently consummated, all shareholders of Bunkie,
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
Bunkie's Articles of Incorporation and Bylaws. Each of Bunkie and
Hibernia are Louisiana corporations, and, as such, any differences
in our rights of shareholders are set forth in their respective
Articles of Incorporation and Bylaws. The following is a summary
of the principal differences between the rights of shareholders of
Bunkie and Hibernia not described elsewhere in this Proxy
Statement-Prospectus.
Stock. The total number of shares of all classes of stock
which Hibernia shall have authority to issue is three hundred
million, of which two hundred million shares shall be designated as
Class A Common Stock of no par value and one hundred million shares
shall be designated as Preferred Stock, without par value. The
rights, preferences and privileges with respect to shares of
Preferred Stock may be determined by the Hibernia Board of
Directors. Consequently, shares of Preferred Stock could be issued
in circumstances in which it would make an attempted acquisition of
Hibernia more difficult. Bunkie is authorized to issue one class
of shares to be designated "common". The total number of common
shares of which Bunkie is authorized to issue is two hundred
thousand shares, and the par value of each such share is $20.00.
Liquidity of Stock. There currently is no ready market for
the shares of Bunkie 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 Bunkie 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.
Preemptive Rights. Shareholders of Hibernia do not have
preemptive rights. Shareholders of Bunkie have preemptive rights
to purchase or subscribe to any unissued shares of common stock or
any right of subscription to or to receive, or any warrant or
option for the purchase of, any shares of common stock that may be
sold by Bunkie. These rights do not apply in certain limited
circumstances, however, including transactions in which shares are
issued for consideration other than cash, to satisfy conversion or
option rights, pursuant to a stock bonus or option plan or similar
type of stock-based employee benefit plan or when the shares to be
issued are treasury shares. Preemptive rights are generally
designed to permit shareholders to maintain their percentage
ownership of a company if the company issues new shares. This
right will not be afforded to Bunkie shareholders who become
shareholders of Hibernia.
Directors' Qualifications. No individual shall be elected a
director of Hibernia unless such individual owns, in his or her own
right, at the time of such election, not less than 100 shares of
Hibernia voting stock. No individual shall be eligible for
election as a director of Hibernia who has attained the age of 71
prior to the date of such election. No individual who is or
becomes a business competitor or who is or becomes affiliated with,
employed by or a representative of any individual, corporation,
association, partnership, firm, business enterprise or other entity
or organization which the Hibernia Board determines to be in
competition with Hibernia shall be eligible for election as a
director of Hibernia. Any financial institution having branches or
affiliates within any state in which Hibernia or any of its
subsidiaries operates or having (together with its affiliates)
total assets or total deposits exceeding $500 million shall be
presumed to be a business competitor of Hibernia, unless the
Hibernia Board determines otherwise. Bunkie does not have similar
qualification limitations for its directors.
Removal of Directors. Shareholders of Hibernia may remove a
director for cause (defined as gross negligence or wilful
misconduct) by the vote of a majority of the total voting power and
may remove a director without cause by a vote of two-thirds of the
total voting power. One or more directors of Bunkie may be
removed, with cause or without cause, by the affirmative vote of a
majority of the shares entitled to vote on the election of
directors present at a meeting expressly called for that purpose.
Amendment of Articles and Bylaws. Hibernia's Articles of
Incorporation may be amended by a vote of a majority of the voting
power present at any meeting called for that purpose. Bunkie's
Articles of Incorporation may be amended in the same manner.
The Bylaws of Hibernia may be amended or repealed by a vote of
two-thirds of the total voting power outstanding or by a vote of
two-thirds of the "continuing directors" of the company, as defined
in the Bylaws. A "continuing director" for this purpose is
generally a director who was nominated for election by a majority
of the existing directors. The Bylaws of Bunkie may be amended by
the Board of Directors and the shareholders, by a majority of the
Directors and/or shareholders at a duly called meeting. The
shareholders of Bunkie may provide that any or all bylaws altered,
amended, repealed, or adopted by the shareholders shall not be
altered, amended, re-enacted, or repealed by the Bunkie Board of
Directors.
Special Meetings of Shareholders. Special meetings of the
shareholders of Hibernia may be called by the Chairman of the
Board, the President, the Chief Executive Officer, the Treasurer of
Hibernia, or the Board of Directors. In addition, shareholders
holding one-fifth or more of the total voting power of Hibernia may
request a special meeting of shareholders and, upon receipt of such
request, the Secretary of Hibernia is required to call a special
meeting of the shareholders. A special meeting of shareholders of
Bunkie may be called at any time by the President, the Board of
Directors, or the holders of not less than twenty percent (20%) of
all shares entitled to vote at such meeting.
Shareholder Proposals. Hibernia's Bylaws contain certain
provisions expressly allowing shareholders to submit shareholder
proposals and to nominate individuals for election as directors,
under certain circumstances and provided the shareholder complies
with all of the conditions set forth in those provisions. Bunkie's
bylaws contain no specific provisions relating to shareholder
proposals.
Inspection Rights. At least ten days before each meeting of
Bunkie shareholders, the secretary shall prepare a complete list of
Bunkie shareholders entitled to vote at such meeting, arranged in
alphabetical order, including the address of each shareholder and
the number of voting shares held by each shareholder. For a period
of ten days prior to such meeting, such list shall be kept on file
at the registered office of Bunkie and shall be subject to
inspection by any shareholder during usual business hours. Such
list shall be produced at such meeting, and at all times during
such meeting shall be subject to inspection by any shareholder. No
similar rights exist for Hibernia shareholders, however, Louisiana
law requires that such a list must be made available to
shareholders at the meeting of shareholders.
Action Without Meeting of Shareholders. Any action which may
be taken, or is required by law, the articles of incorporation of
Bunkie, or the Bunkie bylaws to be taken, at a meeting of Bunkie
shareholders may be taken without a meeting if a consent in
writing, setting forth the action so taken, shall be signed by
Bunkie shareholders who, in the aggregate, are entitled to vote the
percentage of shares required for approval of the subject matter by
law or the articles of incorporation, whichever is greater. Such
consent shall have the same force and effect as a vote of the
Bunkie shareholders entitled to vote such shares, and may be stated
as such in any document filed with he Secretary of State of
Louisiana or in any certificate or other document delivered to any
person. The consent may be in one or more counterparts so long as
each shareholder who consents has signed one of the counterparts.
The signed consent shall be placed in the Bunkie minute book. The
Hibernia shareholders do not have similar provisions for action
taken without a meeting of shareholders.
Certain Transfer Restrictions Relating to 5-Percent
Shareholders. Article IX of Hibernia's Articles of Incorporation
restricts transfers of equity interests in Hibernia under certain
circumstances. This restriction (the "5-Percent Restriction") is
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.
Interests of Certain Persons in the Merger
Indemnification of Bunkie Directors. The terms of the Merger
include certain provisions that protect the officers and directors
of Bunkie and the Bank from and against liability for actions
arising while they served in those capacities for Bunkie 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 7, 1995, 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 either of Bunkie'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 Bunkie'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 Bunkie for use in the
Registration Statement, including this Proxy Statement-Prospectus.
Employment Agreements. Hibernia intends to execute,
contemporaneously with consummation of the Merger, employment
agreements with James Lynn Bordelon, President, Michael J.
Thevenot, Senior Vice President, Steve Normand, Senior Vice
President, and John A. Boatner, Jr., Chairman and Chief Executive
Officer. Each of these contracts provides for employment for a
period of three years after the date thereof and at income levels
currently earned by those individuals, with annual salary and
bonuses based upon Hibernia's policies and the performance of each
individual, except for Mr. Boatner whose contract term is for one
year at an income level less than currently earned by Mr. Boatner.
Each contract may be terminated for cause by Hibernia without
liability for further payments thereunder. The agreements may also
be terminated without cause by Hibernia or for "good reason", as
defined therein, by the individual, which termination would require
Hibernia to pay the individual the salary provided for therein for
the remainder of the unexpired term of the contract. For purposes
of these contracts, "good reason" is generally defined as a
material diminution or other adverse change in the duties and
responsibilities of the employee or requiring the employee to
relocate without his consent.
Advisory Board of Directors. If the Merger occurs, HNB may
invite some of the members of Bunkie's or the Bank's Board of
Directors to serve on the Advisory Board of Hibernia headquartered
in Alexandria. The Advisory Board meets periodically at the
discretion of the City President in Alexandria, and members of the
Advisory Board are paid for attendance at those meetings.
Material Tax Consequences
The following is a summary description of the material 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, her or
it.
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 Bunkie Common Stock for Hibernia Common Stock
will not give rise to the recognition of gain or loss for federal
income tax purposes to Bunkie'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 Bunkie, the Bank, Hibernia or HNB by reason of the Merger; (ii)
a shareholder of Bunkie 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 Bunkie Common Stock; (iii)
the tax basis in the Hibernia Common Stock received by a
shareholder of Bunkie will be the same as the tax basis in the
Bunkie Common Stock surrendered in exchange therefor; and (iv) the
holding period, for federal income tax purposes, for Hibernia
Common Stock received in exchange for Bunkie Common Stock will
include the period during which the shareholder held the Bunkie
Common Stock surrendered in the exchange, provided that the Bunkie
Common Stock was held as a capital asset at the Effective Date.
The Louisiana income tax treatment to the shareholders of
Bunkie should be substantially the same as the federal income tax
treatment to the shareholders of Bunkie described above.
Shareholders residing in states other than Louisiana are encouraged
to consult their tax advisors regarding the state income tax
implications of the Merger to them.
The parties have received the opinion of Ernst & Young LLP,
certified public accountants, to the effect that the Merger, if
consummated in accordance with the terms of the Agreement, will
constitute a reorganization for purposes of Section 368 of the Code
and will have the tax effects described in this section. A copy of
the form of opinion of Ernst & Young LLP in this regard is attached
hereto as Appendix D. As noted in the opinion, the opinion is
based upon certain representations and assumptions described
therein. Shareholders of Bunkie are urged to review the full text
of the opinion of Ernst & Young LLP attached hereto as Appendix D
with regard to the tax consequences of the Merger to them.
For information regarding the federal income tax consequences
of cash payments received by dissenting shareholders, see "PROPOSED
MERGER -- Rights of Dissenting Shareholders."
Resale of Hibernia Common Stock
The shares of Hibernia Common Stock issuable to shareholders
of Bunkie 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 Bunkie 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, Bunkie, and for
purposes hereof could be deemed to include all executive officers,
directors and 10% shareholders of Bunkie.
Hibernia Common Stock received and beneficially owned by those
shareholders who are deemed to be affiliates of Bunkie may be
resold without registration as provided by Rule 145, or as
otherwise permitted, under the Securities Act. Such affiliates,
provided they are not affiliates of Hibernia, may publicly resell
Hibernia Common Stock received by them in the Merger subject to
certain limitations, principally as to the manner of sale, during
the two years following the Effective Date. After the two-year
period, such affiliates may resell their shares without
restriction. In addition, shares of Hibernia Common Stock issued
to affiliates of Bunkie in the Merger will not be transferable
until financial statements pertaining to at least 30 days of post-
Merger combined operations of Hibernia and Bunkie have been
published, in order to satisfy certain requirements of the
Commission relating to pooling-of-interests accounting treatment.
The Agreement provides that Bunkie will use its best efforts
to identify those persons who may be deemed to be affiliates of
Bunkie and to cause each person so identified to deliver to
Hibernia a written agreement providing that such person will not
dispose of Bunkie Common Stock or Hibernia Common Stock received in
the Merger except in compliance with the Securities Act, the rules
and regulations promulgated thereunder and the Commission's rules
relating to pooling-of-interests accounting treatment. In
addition, Hibernia intends to place stop transfer instructions with
its transfer agent regarding Hibernia Common Stock issued to
affiliates of Bunkie.
Rights of Dissenting Shareholders
Each Bunkie 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 LBCL, a copy of
which is set forth as Appendix C hereto.
Section 131 provides that shareholders of Louisiana
corporations 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 corporation. 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 or at 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 80% of the total voting power of the
corporation, the corporation must provide by registered mail notice
of such vote to shareholders who filed a written objection and
voted against the merger. A dissenting shareholder must then file
with the corporation 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 corporation 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 corporation's reply
may be sent and must deposit his shares in escrow at a bank, duly
endorsed and transferred to the corporation on the sole condition
that the fair value be paid. If the corporation 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 Bunkie shareholders in the Merger.
Shareholders who file a demand for payment of fair value cease
to have any rights as shareholders of the corporation thereafter.
Also, shareholders may withdraw their demand at any time before the
corporation gives notice of disagreement. Withdrawal of a demand
thereafter requires the written consent of the corporation 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 Bunkie
Common Stock to perfect dissenters' rights. Shareholders of Bunkie
will lose their right to dissent from the Merger unless they both
(i) file with Bunkie a written objection to the Agreement and the
Merger prior to or at the Special Meeting and (ii) vote their
shares (in person or by proxy) against the Merger at the Special
Meeting.
Cash received by a dissenting shareholder of Bunkie in
exchange for his or her Bunkie stock will generally be subject to
state and federal income tax and 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. In that case, the
shareholder would recognize ordinary income, or capital gain, as
the case may be, in an amount equal to the difference between the
amount of cash received in redemption of his shares and his basis
in his Bunkie shares. The Louisiana income tax treatment to
dissenting shareholders of Bunkie 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 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 Bunkie 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 Bunkie Common Stock must be exchanged for
Hibernia Common Stock. If holders of more than 10% of the
outstanding Bunkie Common Stock exercise and perfect dissenters'
rights, the Merger will not qualify as a pooling of interests.
Also, in order for the pooling-of-interests accounting method to
apply, "affiliates" of Bunkie 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 Bunkie
and Hibernia. Persons believed by Bunkie to be "affiliates" have
agreed to comply with these restrictions.
Bunkie 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
Bank 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 be offered. Various consumer laws and regulations also
affect the operations of HNB. In addition to the impact of
regulation, commercial banks are affected significantly by the
actions of the Federal Reserve Board as it attempts to control the
money supply and credit availability in order to influence the
economy.
Payment of Dividends
Hibernia generally depends upon payment of dividends by HNB in
order to pay dividends to its shareholders and to meet its other
needs for cash to pay expenses. Hibernia derives substantially all
of its income from the payment of dividends by HNB, and its ability
to pay dividends is affected by the ability of HNB to pay
dividends. HNB is subject to various statutory restrictions on its
ability to pay dividends to Hibernia. Under such restrictions, the
amount available for payment of dividends to Hibernia by HNB was
approximately $209 million at October 1, 1995. 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.
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 BUNKIE
Description of Business
General. Bunkie is a registered bank holding company
headquartered in Bunkie, Louisiana that was incorporated under the
laws of Louisiana on January 19, 1984. Bunkie engages in the
banking business through its subsidiary, Bunkie Bank & Trust
Company. As of September 30, 1995, Bunkie's consolidated assets
were equal to $105.7 million.
The Bank is located in Avoyelles Parish, Louisiana (which
Parish has approximately 45,000 residents) and operates its main
office and four additional branch offices in Bunkie, Cottonport and
Marksville, Louisiana. As of September 30, 1995, the Bank had
total assets of approximately $ 105.4 million and deposits of
approximately $95.2 million.
The Bank provides a wide range of retail banking services,
including checking and savings accounts; certificates of deposit;
individual retirement accounts; commercial, real estate, consumer
and agricultural loans; and safe deposit boxes.
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' loans
is concentrated within a single industry or group of related
industries.
Properties. The Bank operates in three locations in Bunkie,
Louisiana: 122 West Church Street, 1000 North Main Street and 201
Walnut Street; in one location in Cottonport: 911 Bryan Street;
and in one location in Marksville: 307 East Tunica. Each of the
properties on which branches or offices of the Bank are located are
owned by Bunkie or the Bank or operated under leases with third
parties, the terms of which are fair to the Bank and provide for
rent in amounts that do not exceed the rates charged for similar
properties to other entities in the relevant markets.
Employees. The Bank had 55 employees as of September 30,
1995. Bunkie has no employees that are not otherwise employed by
the Bank.
Competitive Conditions. The principal markets in which Bunkie
competes are Avoyelles Parish and some of Rapides, Evangeline and
St. Landry Parishes. For deposits and loans, Bunkie competes with
other banks, savings institutions, credit unions, finance
companies, mortgage companies, insurance companies, governmental
agencies and other financial institutions.
Legal Proceedings. Bunkie and its subsidiaries are parties to
certain legal proceedings and litigation that arise in the ordinary
course of their businesses that are not expected to have a material
impact on Bunkie's consolidated operations or financial condition.
MANAGEMENT'S DISCUSSION & ANALYSIS OF FINANCIAL CONDITION
---------------------------------------------------------
& RESULTS OF OPERATIONS
-----------------------
The following discussion provides certain information concerning
Bunkie Bank's financial condition and results of operations. For
a more complete understanding of the following discussion,
reference should be made to the financial statements of Bunkie Bank
and related notes thereto presented elsewhere in this Proxy
Statement-Prospectus.
Results of Operations September 30, 1995, Compared to September 30,
1994
Net income for the nine months ended September 30, 1995 was
$1,094,000 or approximately $244,000 more than the nine months
ended September 30, 1994, net income of $850,000. The increase in
net income was primarily due to an increase of approximately
$241,000 in net interest income and a negative loan loss provision
of $150,000. Noninterest expenses increased by $114,000.
Return on average assets for the nine month ended September 30,
1995, was 1.38% compared to 1.14% for 1994. Return on average
equity was 16.14% and 13.57% for the 1995 and 1994 periods,
respectively.
Bunkie Bank's reserve for loan losses is, in management's opinion,
sufficient to maintain an adequate allowance for loan losses and to
support increases in the loan portfolio. Bunkie Bank had a
negative provision for loan losses of $150,000 for the nine months
ended September 30, 1995. This is a result of recoveries received
from the previous year causing our reserve to be in excess of the
required reserve.
Net interest income is the major component of Bunkie Bank's income.
Net interest income for the nine months ended September 30, 1995,
was $3,118,000, an increase of approximately $241,000 over the
amount reported for the nine months ended September 30, 1994. The
increase in net interest income was primarily attributable to the
increase in loans during nine months ended September 30, 1995 and
an increase in the average yield of the investment portfolio of
Bunkie Bank. Loan fee income earned for the nine months ended
September 30, 1995 and September 30, 1994, was not significant.
Noninterest income was $518,000 for the nine months ended September
30, 1995, an increase of approximately $124,000 over the nine
months ended September 30, 1994. The primary sources of
noninterest income are service charges on deposit accounts and
other fees and charges.
Total noninterest expenses for the nine months ended September 30,
1995 were $2,409,000 or approximately 5% more than the $2,295,000
reported for the nine months ended September 30, 1994. Salaries
and employee benefits increased a combined $63,000 or 6.68%.
Occupancy and equipment expenses increased approximately $4,000 in
1995. Other noninterest expenses increased $55,000 compared to
1994.
Financial Condition September 30, 1995, Compared to September 30,
1994
Total assets of Bunkie Bank continued to grow in 1995, compared to
September 30, 1994. Investment securities decreased $4.4 million,
or 8%. Loans increased $6.1 million to $46.8 million at September
30, 1995, net of unearned interest. The allowance for loan losses
at September 30, 1995, was $611,000, a decrease of $310,000 over
the allowance at September 30, 1994. This was a result of a
negative provision for loan losses in the 3rd quarter of 1995 for
$150,000. Bunkie Bank opened a branch bank in Marksville, LA
during 1994 and estimate that the total cost for the first year of
operations was approximately $150,000. The adequacy of the
allowance for loan losses is determined on an ongoing basis using
historical loan loss experience of Bunkie Bank, portfolio growth
and asset quality trends, and economic conditions with Bunkie
Bank's trade area. Additional allocations are made to the
allowance for specifically identified potential losses in the
portfolio. The allowance for loan losses was 1.31% of loans
outstanding at September 30, 1995, compared to 2.21% at September
30, 1994.
Total deposits grew .71% to $95.2 million at September 30, 1995, as
compared to $94.5 million at September 30, 1994.
Total stockholders' equity at September 30, 1995, was $9,683,000,
an increase of $1,195,000 since September 30, 1994.
Bunkie Bank has no foreign loans and has concentrations of credit
to borrowers in the agriculture industry. A concentration
generally exists when more than 10% of total loans are outstanding
to borrowers in the same industry. Agriculture loans were 14.38%
of total loans in 1995, 11.38% in 1994.
Results of Operations 1994, Compared to 1993
Net income for the year 1994, was $1,214,000 or approximately the
same as 1993 net income of $1,222,000. A negative provision for
loan losses in 1994 of $200,000 kept the income at the same level
as 1993.
Return on average assets for the year 1994, was 1.21% compared to
1.30% for 1993. Return on average equity was 14.67% and 15.57% in
1994 and 1993, respectively. Bunkie Bank paid dividends of $45 per
share in 1994 and 1993.
Bunkie Bank's provision for loan losses is, in management's
opinion, sufficient to maintain an adequate allowance for losses
and to support increases in the loan portfolio. There was a
negative provision for loan losses in the amount of $200,000 in
1994. There was no provision for loan losses in 1993. Net loans
charged-off in 1994 were ($228,000) versus ($122,000) in 1993.
Net interest income is the major component of Bunkie Bank's income.
Net interest income for the year 1994 was $3,781,000, a decrease of
approximately $28,000 over the amount reported for the year 1993.
The decrease in net interest income was primarily attributable to
the decrease in interest rates during 1994. Loan fee income earned
in 1994 and 1993 was not significant.
Noninterest income was $754,000 in 1994, an increase of
approximately $145,000 over 1993. The primary sources of
noninterest income were service charges on deposit accounts and
other fees and charges.
Total noninterest expenses for 1994 were $3,151,000 or
approximately 8.5% more than the $2,902,000 reported for 1993.
Salaries and employee benefits increased a combined $65,000 or
4.64%. Occupancy and equipment expenses increased approximately
$61,000 in 1994. Other noninterest expenses increased $175,000
compared to 1993.
Financial Condition 1994, Compared to 1993
Total assets of Bunkie Bank continued to grow in 1994, increasing
12% over total assets at December 31, 1993. At December 31, 1994,
investment securities had an estimated market value of
approximately $2,752,000 less than their carrying value.
Management does not foresee any significant change in its
investment strategy as a consequence of Statement of Financial
Accounting Standards No. 115, "Accounting for Certain Investments
in Debt and Equity securities." Bunkie Bank adopted Statement No.
115 effective January 1, 1994. Approximately 75% of the investment
securities portfolio was classified as "available for sale" in the
first quarter of 1994.
Loans increased $3.4 million to $38.3 million at December 31, 1994,
net of unearned interest. The allowance for loan losses at
December 31, 1994, was $839,000, an increase of $28,000 over the
allowance at December 31, 1993. A summary of the changes in the
allowance for 1993 and 1992 is included in the Selected Statistical
Data section. The adequacy of the allowance for loan losses is
determined on an ongoing basis using historical loan loss
experience of Bunkie Bank, portfolio growth and asset quality
trends, and economic conditions within Bunkie Bank's trade area.
Additional allocations are made to the allowance for specifically
identified potential losses in the portfolio. The allowance for
loan losses was 2.19% of loans outstanding at December 31, 1994,
compared to 2.33% at December 31, 1993.
It is Bunkie Bank's policy to place loans greater than 90 days past
due on nonaccrual status, unless certain criteria are met. At
December 31, 1994, nonaccrual loans were $309,000 compared to
$346,000 at December 31, 1993.
Total deposits grew 12.4% to $97.1 million at December 31, 1994, as
compared to $86.4 million at December 31, 1993.
Total stockholders' equity at December 31, 1994, was $8,386,000, an
increase of $170,000, since December 31, 1993. The increase in
total shareholders equity at December 31, 1994, would have been
$716,000, but with the adoption of FASB 115 and having an
unrealized loss in the Capital Section, it was only an increase of
$170,000 Net. Net earnings retained during 1993, after paying
dividends of $485,000 totaled $723,000. The equity to assets ratio
was 8.32% at December 31, 1994, compared to 8.71% at December 31,
1993.
Results of Operations 1993, Compared to 1992
Net income for 1993 was $1,222,000, a decrease of $229,000 over
1992 net income of $1,451,000. Net income per share was $111 in
1993, compared to $132 in 1992. The 1993 decrease in net income
was primarily due to a reduction in the income received as discount
income for those loans from the Avoyelles Trust & Savings Bank that
were paid out and the bank was able to take this discount into
income.
Return on average assets for the year 1993 was 1.30% versus 1.67%
for 1992. Return on average equity for 1993 was 15.57% compared to
20.68% for 1992. Dividends per share were $45 in 1993 and $45 in
1992.
Net interest income, the major component of Bunkie Bank's income,
decreased approximately $90,000 in 1993.
Noninterest income decreased approximately $84,000 in 1993 versus
1992. There were no provisions for loan losses in 1993 or 1992.
Financial Condition 1993, Compared to 1992
Total assets increased by $1.9 million, or 2%. Investment
securities decreased $3 million over 1992. Loans increased $4.6
million during 1993. Bunkie Bank's allowance for loan losses
increased $121,000 to $811,000 or 2.33% of outstanding loans. The
loan to deposit ratio at December 31, 1993 was 41%.
Total deposits at December 31, 1993, were $86,397,000, a 2%
increase over total deposits at December 31, 1992, of $84,718,000.
Total stockholders' equity increased $721,000 or 9.62% from
December 31, 1992 to December 31, 1993. This increase consisted of
net earnings retained of $721,000. The equity to assets ratio at
December 31, 1993 and 1992 was 8.71% and 8.65%, respectively.
Selected Statistical Data
Loans by Type
--------------
(In Thousands)
Description 9/30/95 9/30/94 12/31/94 12/31/93
- ----------- ------- ------- -------- --------
Real Estate 23,289 22,137 21,794 18,557
Commercial 5,008 4,239 4,371 3,661
Consumer 12,077 10,697 10,390 9,703
Other (Agri crop
& other) 6,963 5,171 2,324 3,460
------ ------ ------ ------
47,337 42,244 38,879 35,381
Unearned interest
& fees 568 592 589 522
Allowance for loan
losses 611 921 839 811
------ ------ ------ ------
Loans, net 46,158 40,731 37,451 34,048
Nonaccrual, Past Due and Restructured Loans
-------------------------------------------
(In Thousands)
9/30/95 9/30/94 12/31/94 12/31/93
------- ------- -------- --------
Accruing loans
contractually 90
days or more as to
interest or
principal payments 199 436 252 297
Nonaccrual loans 422 269 309 346
Restructured loans -0- -0- -0- -0-
------- ------- -------- --------
Total nonperforming
loans 621 705 561 643
Analysis of Allowance for Loan Losses
-------------------------------------
(In Thousands)
Nine Months Ending Fiscal Year Ending
September 30 December 31
------------------ ------------------
1995 1994 1994 1993
---- ---- ---- ----
Balance,
beginning of
period 839 811 811 690
Amounts
charged off:
Real Estate -0- 15 21 16
Commercial 38 281 280 14
Consumer 150 55 121 123
---- ---- ---- ----
Total charged
off 188 351 422 153
Recoveries on
amounts charged
off:
Real Estate 34 6 160 13
Commercial 12 411 425 149
Consumer 64 44 65 112
---- ---- ---- ----
Total recoveries 110 461 650 274
---- ---- ---- ----
Net charge-offs 78 (110) (228) (121)
Provision for
loan losses (150) -0- (200) -0-
---- ---- ---- ----
Balances, end
of period Ratio
of net charge-
offs during the
period to
average loans
outstanding
during the
period 611 921 839 811
.19% (.29%) (.63%) (.38%)
Allocation for Allowances for Loan Losses
-----------------------------------------
(In Thousands)
September 30 December 31
------------------ ------------------
1995 1994 1994 1993
---- ---- ---- ----
Real Estate Not Not
Commercial Available Available
Consumer
Other (Agri crop
& other)
---- ---- ---- ----
Total 611 921 839 811
Percentage Distribution of Allowance for Loan Losses and Categories
of Loans as Percent of Gross Loans at December 31
- -------------------------------------------------------------------
1994 1993
---------------------- ----------------------
Allowance Loans Allowance Loans
--------- ----- --------- -----
Real Estate Not 56.06 Not 52.45
Commercial Available 11.25 Available 10.35
Consumer 26.73 27.43
Other (Agri
crop & other) 5.96 9.77
------- ------- ------- -------
100.0% 100.0% 100.0% 100.0%
Percentage Distribution of Allowance for Loan Losses and Categories
of Loans as Percent of Gross Loans at September 30
- -------------------------------------------------------------------
1995 1994
---------------------- ----------------------
Allowance Loans Allowance Loans
--------- ----- --------- -----
Real Estate Not 49.20 Not 52.40
Commercial Available 10.58 Available 10.03
Consumer 25.52 25.32
<PAGE>
Other (Agri
crop & other) 14.70 12.25
------- ------- ------- -------
100.0% 100.0% 100.0% 100.0%
<TABLE>
<CAPTION>
Average Deposit Distribution and Average Interest Rates
-------------------------------------------------------
(Dollars in Thousands)
YEAR ENDED December 31, 1994 December 31, 1993
------------------------------ ------------------------------
Average Interest Average Average Interest Average
Balance Expense Rate Balance Expense Rate
------- -------- ------- ------- -------- -------
<S> <C> <C> <C> <C> <C> <C>
Noninterest
bearing accounts 12,525 N/A N/A 11,266 N/A N/A
NOW accounts 10,422 283 2.72% 10,530 264 2.51%
Money market
accounts 11,314 370 3.28% 10,095 301 2.99%
Savings accounts 7,775 244 3.14% 7,307 216 2.95%
Certificates of
deposit $100,000
and greater 9,143 279 3.06% 8,075 235 2.92%
Less than $100,000 41,097 1,685 4.11% 38,929 1,502 3.86%
------ ----- ----- ------ ----- -----
Total 92,276 2,861 N/A 86,202 2,518 N/A
</TABLE>
<TABLE>
<CAPTION>
NINE MONTHS ENDED September 30, 1995 September 30, 1994
------------------------------ ------------------------------
Average Interest Average Average Interest Average
Balance Expense Rate Balance Expense Rate
------- -------- ------- ------- -------- -------
<S> <C> <C> <C> <C> <C> <C>
Noninterest bearing
accounts 13,273 N/A N/A 11,461 N/A N/A
NOW accounts 9,848 183 2.48% 10,357 221 2.86%
Money market accounts 11,394 286 3.36% 11,549 267 3.10%
Savings accounts 8,042 170 2.83% 8,061 183 3.04%
Certificates of deposit
$100,000 and greater 9,549 365 5.11% 9,250 197 2.84%
Less than $100,000 44,352 1,767 5.37% 39,986 197 4.00%
------ ----- ----- ------ ----- -----
Total 96,458 2,771 N/A 90,664 2,065 N/A
</TABLE>
<TABLE>
<CAPTION>
Maturity Distribution of Certificates of Deposit of $100,000 and Over
- -----------------------------------------------------------------------------------------------------------
(In Thousands)
At December 31, 1994 At September 30, 1995
----------------------------------- -----------------------------------
Certificates IRA Certificates IRA
of Deposit Accounts Total of Deposit Accounts Total
------------ -------- ------- ------------ -------- -------
<S> <C> <C> <C> <C> <C> <C>
Less than three months 3,458 Inc. In 3,458 3,795 Inc. In 3,795
Three to twelve months 7,121 Totals 7,121 4,910 Totals 4,910
More than twelve months 740 740 1,490 1,490
------ ------- ------ ------ -------- ------
Total 11,319 11,319 10,195 10,195
------ ------- ------ ------ -------- ------
</TABLE>
Ownership of Bunkie Common Stock and Dividends
Market Prices. As of the Record Date, there were 11,006
shares of Bunkie Common Stock outstanding and approximately 109
shareholders of record of such shares. There is no established
trading market for Bunkie 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.
Ownership of Principal Shareholders. Except for the Bunkie
Common Stock, Bunkie has no other class of voting securities issued
or outstanding. The following table provides information
concerning persons known to Bunkie to be beneficial owners,
directly or indirectly, of more than 5% of the outstanding shares
of Bunkie Common Stock, as of November 10, 1995. Except as set
forth below, no person is known by Bunkie as of such date to be the
beneficial owner of more than 5% of the outstanding voting
securities of Bunkie. Unless otherwise noted, the named persons
own the shares directly and have sole voting and investment power
with respect to the shares indicated.
Name and Address Amount and Nature of
of Beneficial Owner Beneficial Ownership % of Class
John A. Boatner, Jr. 3200 29.08%
P. O. Box 360
Bunkie, LA 71322
J. B. Luke 966 8.78%
P. O. Box 682
Bunkie, LA 71322
R. H. Luke 850 7.72%
P. O. Box 510
Bunkie, LA 71322
Ownership of Directors and Executive Officers of Bunkie. The
following table provides information concerning the shares of
Bunkie Common Stock beneficially owned, directly or indirectly, by
each director and executive officer of Bunkie, and all directors
and executive officers as a group, as of November 10, 1995. Unless
otherwise noted, the named persons have sole voting and investment
power with respect to the shares indicated.
Name and Address Amount and Nature of
of Beneficial Owner Beneficial Ownership % of Class
John A. Boatner, Jr. 3200 29.08%
P. O. Box 360
Bunkie, LA 71322
J. B. Luke 966 8.78%
P. O. Box 682
Bunkie, LA 71322
R. H. Luke 850 7.72%
P. O. Box 510
Bunkie, LA 71322
James L. Bordelon 457 4.15%
P. O. Box 52
Hessmer, LA 71341
Frank L. Mulhearn 443 4.03%
P. O. Box 28
Bunkie, LA 71322
Thomas A. Durham 209 1.90%
P. O. Box 5856
Bunkie, LA 71322
Earl F. Rabalais 90 .82%
P. O. Box 110
Bunkie, LA 71322
William F. Reynolds 182 1.65%
401 S. Gayle
Bunkie, LA 71322
John M. Lindsly 295 2.68%
P. O. Box 694
Bunkie, LA 71322
Edmond St. Romain 8 .07%
2417 Regard Street
Mansura, LA 71350
Michael L. Thevenot 8 .07%
1491 Horseshoe Drive
Cottonport, LA 71327
Steve Normand 8 .07%
754 Slim Lemoine Road
Mansura, LA 71350
John Singletary 18 .16%
Rt. 1, Box 239H
Bunkie, LA 71322
Dividends. Bunkie has paid dividends to its shareholders in
each of the last three fiscal years, including $45.00 per share in
each of the years 1994, 1993 and 1992. $30.00 in dividends per
share were paid by Bunkie through November 1, 1995, and additional
dividends of $20.00 per share are planned prior to the Effective
Date of the Merger.
Bunkie's ability to pay dividends is dependent upon the
earnings and financial condition of the Bank, since all of the
funds used by Bunkie to pay dividends are derived from dividends
paid by the Bank to Bunkie.
RELATIONSHIP WITH INDEPENDENT AUDITORS
Kenneth J. Breaux, Certified Public Accountant, has
continuously served as the independent auditor for Bunkie from 1984
through the present. A representative of Kenneth J. Breaux is
expected to be present at the Special Meeting of Bunkie'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 Randolf F. Kassmeier, Associate
Counsel and Assistant Secretary of Hibernia. As of the date of
this prospectus, Mr. Kassmeier owned 2,105 shares of Hibernia
Common Stock and held options to purchase 5,730 shares of Hibernia
Common Stock, of which 1,025 options are currently exercisable.
EXPERTS
The consolidated financial statements of Hibernia incorporated
in this Proxy Statement-Prospectus by reference from Hibernia's
Annual Report on Form 10-K for the fiscal year ended December 31,
1994 have been audited by Ernst & Young LLP, independent auditors,
as set forth in their report thereon incorporated herein by
reference, and have been so incorporated by reference in reliance
upon such report given upon the authority of such firm as experts
in accounting and auditing.
The supplemental consolidated financial statements of Hibernia
for the fiscal year ended December 31, 1994 incorporated in this
Proxy Statement-Prospectus by reference from Hibernia's Current
Report on Form 8-K dated October 12, 1995 have been audited by
Ernst & Young LLP, independent auditors, as set forth in their
report thereon incorporated by reference, which is based in part on
the reports of the following independent auditors -- Arthur
Andersen LLP and Postlethwaite & Netterville. The supplemental
consolidated financial statements referred to above are
incorporated by reference in reliance upon such reports given upon
the authority of such firms as experts in accounting and auditing.
The consolidated financial statements of Bunkie as of December
31, 1994 and 1993 and for each of the years in the three-year
period ended December 31, 1994 contained in this Proxy Statement-
Prospectus have been audited by Kenneth J. Breaux, certified public
accountant, as set forth in their report thereon contained therein,
and have been included herein in reliance upon such report given
upon the authority of such firm as experts in accounting and
auditing.
BUNKIE BANCSHARES, INC. AND SUBSIDIARY
BUNKIE, LOUISIANA
CONSOLIDATED FINANCIAL STATEMENTS
DECEMBER 31, 1994 AND 1993
KENNETH J. BREAUX
CERTIFIED PUBLIC ACCOUNTANT
305 WALNUT STREET
P. O. BOX 140
BUNKIE, LA 71322
PHONE: (318) 346-2652
FAX: (318) 346-6547
BUNKIE BANCSHARES, INC. AND SUBSIDIARY
BUNKIE, LOUISIANA
TABLE OF CONTENTS
PAGE
INDEPENDENT AUDITOR'S REPORT 3
CONSOLIDATED FINANCIAL STATEMENTS
CONSOLIDATED BALANCE SHEETS EXHIBIT A 4-5
CONSOLIDATED STATEMENTS OF
CHANGES IN STOCKHOLDERS'
EQUITY EXHIBIT B 6
CONSOLIDATED STATEMENTS OF INCOME EXHIBIT C 7
CONSOLIDATED STATEMENTS OF CASH FLOWS EXHIBIT D 8-9
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS 10-17
INDEPENDENT AUDITOR'S REPORT ON SUPPLEMENTAL
INFORMATION 19
CONSOLIDATING SCHEDULE-FINANCIAL POSITION SCHEDULE 1 20-21
CONSOLIDATING SCHEDULE-INCOME SCHEDULE 2 23
KENNETH J. BREAUX
CERTIFIED PUBLIC ACCOUNTANT
305 WALNUT STREET
P. O. BOX 140
BUNKIE, LA 71322
PHONE: (318) 346-2652
FAX: (318) 346-6547
INDEPENDENT AUDITOR'S REPORT
February 10, 1995
Board of Directors and Shareholders
Bunkie Bancshares, Inc. and Subsidiary
Bunkie, Louisiana 71322
I have audited the accompanying consolidated balance sheets of
Bunkie Bancshares, Inc. and Subsidiary as of December 31, 1994 and
1993, and the related consolidated statements of income,
stockholders' equity, and cash flows for the years then ended.
These consolidated financial statements are the responsibility of
the Company's management. My responsibility is to express an
opinion on these consolidated financial statements based on my
audit.
I conducted my audits in accordance with generally accepted
auditing standards. Those standards require that I plan and
perform the audit to obtain reasonable assurance about whether the
consolidated financial statements are free of material
misstatement. An audit includes examining, on a test basis,
evidence supporting the amounts and disclosures in the consolidated
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. I believe that my audits provide a reasonable basis
for my opinion.
In my opinion, the consolidated financial statements referred to
above present fairly, in all material respects, the financial
position of Bunkie Bancshares, Inc. and Subsidiary at December 31,
1994 and 1993, and the results of their operations and their cash
flows for the years then ended in conformity with generally
accepted accounting principles.
/s/ KENNETH J. BREAUX
KENNETH J. BREAUX
CERTIFIED PUBLIC ACCOUNTANT
BUNKIE BANCSHARES, INC. AND SUBSIDIARY
BUNKIE, LOUISIANA
CONSOLIDATED BALANCE SHEETS
DECEMBER 31, 1994 AND 1993
(DOLLARS IN THOUSANDS)
ASSETS
1994 1993
Cash and Due from Banks $ 4,241 $ 2,599
Federal Funds Sold 3,595 3,258
Investment Securities (approximate
market value of $56,668 and
$52,049 respectively) 57,019 51,412
Loans, less allowance for loan losses
of $839 and $811 respectively 37,451 34,048
Premises and Equipment (Net of
Accumulated Depreciation) 2,544 2,429
Accrued Interest Receivable 1,266 1,178
Other Assets 286 326
-------- --------
TOTAL ASSETS $106,402 $ 95,250
======== ========
LIABILITIES AND EQUITY
1994 1993
LIABILITIES
Non Interest-bearing Deposits $ 13,545 $ 10,474
Savings and NOW Deposits 18,334 18,004
Other Interest-bearing Deposits 56,345 48,535
Certificates of Deposit - $100,000 or
more 8,902 9,384
-------- --------
97,126 86,397
Accrued Interest Payable and Other
Liabilities 890 637
-------- --------
TOTAL LIABILITIES $ 98,016 $ 87,034
-------- --------
STOCKHOLDERS' EQUITY
Common Stock - $20 par value
Authorized - 200,000 shares
Issued - 11,028 shares
Outstanding - 11,028 and 11,028 shares $ 221 $ 221
Additional Paid-In Capital 2,272 2,272
Retained Earnings 6,452 5,732
Treasury Stock, at cost; 22 shares and
30 shares ( 7) ( 9)
Unrealized Loss on Securities Available-
for-Sale, net of Applicable Deferred
Taxes ( 552)
------- --------
TOTAL STOCKHOLDERS' EQUITY $ 8,386 $ 8,216
------- --------
TOTAL LIABILITIES AND
STOCKHOLDERS' EQUITY $106,402 $ 95,250
======== ========
The accompanying notes are an integral part of these consolidated
financial statements.
EXHIBIT A
BUNKIE BANCSHARES, INC. AND SUBSIDIARY
BUNKIE, LOUISIANA
CONSOLIDATED STATEMENTS OF CHANGES IN STOCKHOLDERS' EQUITY
FOR THE YEARS ENDED DECEMBER 31, 1994 AND 1993
(DOLLARS IN THOUSANDS EXCEPT PER SHARE DATA)
<TABLE>
<S> <C> <C> <C> <C> <C> <C>
UNREALIZED TREASURY
STOCK CAPITAL EARNINGS LOSS STOCK TOTAL
BALANCES AT
DECEMBER 31, 1992 $ 221 $ 2,270 $ 5,004 $ -0- $ -0- $ 7,495
Net Income for 1993 1,222 1,222
Cash Dividends
declared, $45.00
per share ( 494) ( 494)
Cost of treasury stock
- 54 shares ( 17) ( 17)
Sale of treasury stock
- 24 shares 2 8 10
------ ------- -------- -------- ------- --------
BALANCES AT
DECEMBER 31, 1993 $ 221 $ 2,272 $ 5,732 $ $( 9) $ 8,216
Net Income for 1994 1,214 1,214
Cash Dividends
declared, $45.00
per share ( 494) ( 494)
Sale of treasury stock
- 8 shares 2 2
Unrealized loss on
securities
available-for-sale ( 552) ( 552)
------ ------- -------- -------- ------- --------
BALANCES AT
DECEMBER 31, 1994 $ 221 $ 2,272 $ 6,452 $( 552) $( 7) $ 8,386
====== ======= ======== ======== ======= ========
</TABLE>
The accompanying notes are an integral part of these consolidated
financial statements.
EXHIBIT B
BUNKIE BANCSHARES, INC. AND SUBSIDIARY
BUNKIE, LOUISIANA
CONSOLIDATED STATEMENTS OF INCOME
FOR THE YEARS ENDED DECEMBER 31, 1994 AND 1993
(DOLLARS IN THOUSANDS EXCEPT PER SHARE DATA)
1994 1993
INTEREST INCOME FROM:
Loans $ 3,483 $ 3,137
Investment Securities:
U. S. Government & Federal Agencies 2,599 2,637
Obligations of States and Political
Subdivisions 304 240
Money Market Investments:
Certificates of Deposit with other
Institutions 84 67
Federal Funds Sold 157 96
Interest adjustment from FDIC Specific
Reserve 21 153
------- -------
Total Interest Income $ 6,648 $ 6,330
INTEREST EXPENSE ON DEPOSITS 2,867 2,521
------- -------
NET INTEREST INCOME $ 3,781 $ 3,809
Provision for Possible Credit Losses ( 200) -0-
------- -------
NET INTEREST INCOME AFTER PROVISION
FOR POSSIBLE CREDIT LOSSES $ 3,981 $ 3,809
OTHER INCOME:
Gains on sale of assets 88 101
Service charges on deposit accounts 541 436
Other operating income 213 173
------- -------
INCOME BEFORE OPERATING EXPENSE $ 4,823 $ 4,519
------- -------
OPERATING EXPENSE:
Salaries and employee benefits $ 1,461 $ 1,389
Furniture and equipment expense 115 249
Occupancy expense 209 100
Other operating expense 1,366 1,165
------- -------
Total Operating Expense $ 3,151 $ 2,903
INCOME BEFORE INCOME TAXES $ 1,672 $ 1,616
APPLICABLE INCOME TAXES 458 394
------- -------
NET INCOME $ 1,214 $ 1,222
======= =======
PER SHARE:
Net Income $110.09 $110.78
Cash Dividends $ 45.00 $ 45.00
The accompanying notes are an integral part of these consolidated
financial statements.
EXHIBIT C
BUNKIE BANCSHARES, INC. AND SUBSIDIARY
BUNKIE, LOUISIANA
CONSOLIDATED STATEMENTS OF CASH FLOWS
FOR THE YEARS ENDED DECEMBER 31, 1994 AND 1993
(DOLLARS IN THOUSANDS)
<TABLE>
<CAPTION>
1994 1993
<S> <C> <C>
CASH FLOWS FROM OPERATING ACTIVITIES:
Net Income $ 1,214 $ 1,222
Adjustments to reconcile net income to cash
provided by operating activities:
Depreciation 158 160
Provision for loan losses ( 200) -0-
Gain from sales of investment securities, net ( 88) -0-
Deferred income taxes ( 190) ( 5)
Changes in operating assets and liabilities:
(Increase) decrease in interest receivable ( 88) 30
(Increase) decrease in other assets 142 68
Increase (decrease) in interest payable
and other liabilities 151 ( 470)
Increase (decrease) in income taxes payable ( 43) ( 15)
-------- --------
Net Cash Provided by Operating Activities $ 1,056 $ 990
CASH FLOWS FROM INVESTING ACTIVITIES
Net (increase) in Federal funds sold $( 337) $( 179)
Proceeds from sales and maturities of investment
securities -0- 20,353
Net (increase) decrease in money market investment 488 -0-
Purchases of held-to-maturity securities (16,719) -0-
Proceeds from maturities of held-to-maturity securities 4,816 -0-
Purchases of available-for-sale securities ( 8,397) -0-
Proceeds from sales of available-for-sale securities 7,062 -0-
Proceeds from maturities of available-for-sale
securities 3,000 -0-
Principal payments on mortgage-backed securities 426 -0-
Net (increase) decrease in loans ( 3,403) ( 4,508)
Purchases of premises and equipment ( 115) ( 710)
Purchase of investment securities -0- (17,300)
Proceeds from sale of foreclosed real estate 105 -0-
Proceeds from calls of held-to-maturity securities 3,423 -0-
-------- --------
Net Cash Used in Investing Activities $(9,651) $(2,344)
CASH FLOWS FROM FINANCING ACTIVITIES
Net increase (decrease) in deposits $10,729 $ 1,679
Cash dividends paid ( 494) ( 494)
Proceeds from sale of treasury stock 2 10
Purchase of treasury stock ( 17)
-------- --------
Net Cash Provided by Financing Activities $10,237 $ 1,178
-------- --------
Net Increase (Decrease) in Cash and Cash Equivalents $ 1,642 $( 176)
Cash and Cash Equivalents at Beginning of Year 2,599 2,775
-------- --------
Cash and Cash Equivalents at End of Year $ 4,241 $ 2,599
======== ========
</TABLE>
SUPPLEMENTAL DISCLOSURES OF CASH FLOWS INFORMATION
Income Taxes: The Bank made income tax payments of $363 during
1994 and $414 during 1993.
Interest Paid: The Bank paid interest totaling $2,867 during 1994
and $2,521 during 1993.
Foreclosed Real Estate: The Bank transferred amounts from loans to
foreclosed real estate totaling $26 in 1994 and $36 in 1993.
Proceeds from sales of foreclosed real estate financed through
loans totaled $51 in 1994 and $90 in 1993.
The accompanying notes are an integral part of these consolidated
financial statements.
EXHIBIT D
BUNKIE BANCSHARES, INC. AND SUBSIDIARY
BUNKIE, LOUISIANA
CONSOLIDATED STATEMENTS OF CASH FLOWS
FOR THE YEARS ENDED DECEMBER 31, 1994 AND 1993
(DOLLARS IN THOUSANDS)
NOTE 1: SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES
Organization. Bunkie Bancshares, Inc. (the Company) is a one-bank
holding company. The Company, through its wholly-owned subsidiary
Bunkie Bank & Trust Company (the Bank), provides a full range of
banking services to individual and corporate customers in Bunkie
and the surrounding areas by utilizing its main office and four
other local branches. The Company and the Bank are subject to
regulations of certain governmental agencies and undergo periodic
examinations by those regulatory agencies. In November 1988, the
Bank acquired all of the assets and liabilities of Avoyelles Trust
& Savings Bank, a troubled bank that had been closed by State and
Federal regulators. This acquisition was accounted for by the
purchase method which records the assets and liabilities at market
value.
Principles of Consolidation. The consolidated financial statements
include the accounts of the Company and the Bank. All significant
intercompany balances have been eliminated in consolidation.
The consolidated financial statements have been prepared in
conformity with generally accepted accounting principles. In
preparing the consolidated financial statements, management is
required to make estimates and assumptions that affect the reported
amounts of assets and liabilities as of the date of the balance
sheet and income and expenses for the period. Actual results could
differ significantly from those estimates.
Investment securities. Management determines the appropriate
classification of securities at the time of purchase. If
management has the intent and the Company has the ability at the
time of purchase to hold securities until maturity or on a long-
term basis, they are classified as investments and carried at
amortized historical cost. Securities to be held for indefinite
periods of time and not intended to be held to maturity or on a
long-term basis are classified as available for sale and carried at
fair value. Securities held for indefinite periods of time include
securities that management intends to use as part of its asset and
liability management strategy and that may be sold in response to
changes in interest rates, resultant prepayment risk and other
factors related to interest rate and resultant prepayment risk
changes.
Realized gains and losses on dispositions are based on the net
proceeds and the adjusted book value of the securities sold, using
the specific identification method. Unrealized gains and losses on
investment securities available for sale are based on the
difference between book value and fair value of each security.
These gains and losses are credited or charged to shareholders'
equity, whereas realized gains and losses flow through the
Company's yearly operation.
Loans and allowance for loan losses. Loans are stated at the
amount of unpaid principal, reduced by unearned discount and an
allowance for loan losses. Unearned discount on installment loans
is recognized as income over the terms of the loans by the interest
method on daily balances of the principal amounts outstanding. The
allowance for loan losses is established through a provision for
loan losses when management believes that the collectability of the
principal is unlikely. The allowance is an amount that management
believes will be adequate to absorb possible losses on existing
loans that may become uncollectible based on evaluations of the
collectability of loans and prior loan loss experience. The
evaluations take into consideration such factors as changes in the
nature and volume of the loan portfolio, overall portfolio quality,
review of specific loans, and current economic conditions that may
affect the borrowers' ability to pay. Accrual of interest is
discontinued on a loan when management believes, after considering
economic and business conditions and collection efforts, that the
borrowers' financial condition is such that collection of interest
is doubtful.
Depreciation. Office equipment and buildings are stated at cost
less accumulated depreciation computed principally on the straight-
line method over the estimated useful lives of the assets. For tax
purposes, assets acquired after 1980 and before January 1, 1987 are
written off under the Accelerated Cost Recovery System instituted
by the Economic Recovery Tax Act of 1981, and assets acquired after
December 31, 1986 are written off under the Modified Accelerated
Cost Recovery System instituted by the Tax Reform Act of 1986.
The estimated useful lives used in determining depreciation on
fixed assets are:
Buildings and additions 20-30 years
Improvements and renovations 8-15 years
Furniture and equipment 5-10 years
Expenditures for repairs and maintenance are charged to operating
expenses as incurred, and major improvements and additions to
property and equipment are capitalized.
Other real estate. Other real estate, acquired through partial or
total satisfaction of loans, is carried at the lower of cost or
fair market value. At the date of acquisition, losses are charged
to the allowance for loan losses.
Income taxes. Consolidated provisions for income taxes are based
on amounts reported in the statements of income (after exclusion of
non-taxable income such as interest on state and municipal
securities) and include deferred taxes on temporary differences in
the recognition of income and expense for tax and financial
statement purposes. Deferred taxes are computed using the asset
and liability approach as prescribed in FASB Statement No. 109,
"Accounting for Income Taxes".
Cash flows disclosure policy. For purposes of reporting cash
flows, cash and cash equivalents include cash on hand and due from
banks.
NOTE 2: SECURITIES
At December 31, 1994, the investment portfolio was comprised of
securities classified available-for-sale and held-to-maturity, in
conjunction with the adoption of FASB 115, resulting in investment
securities available-for-sale being carried at market value and
investment securities held-to-maturity being carried at cost,
adjusted for amortization of premiums and accretions of discounts.
FASB 115 does not allow retroactive restatement and, therefore, the
investment securities portfolio at December 31, 1993 was carried at
cost, adjusted for amortization of premiums and accretions of
discounts.
Securities held-to-maturity consist of the following:
<TABLE>
<CAPTION>
December 31, 1994
----------------------------------------------------
Gross Gross Fair
Amortized Unrealized Unrealized Market
Cost Gains Losses Value
--------- ---------- ---------- ----------
<S> <C> <C> <C> <C>
U. S. Treasury securities $ 2,499 $ $ 58 $ 2,441
Obligations of other U. S.
government agencies and
corporations 31,493 35 1,571 29,957
Obligations of states and
political subdivisions 5,874 59 196 5,737
Other securities 1,178 1,178
Mortgage-backed securities 2,219 2 186 2,035
------- -------- -------- --------
$43,263 $ 96 $ 2,011 $ 41,348
======= ======== ======== ========
</TABLE>
<TABLE>
<CAPTION>
Securities available-for-sale consist of the following:
December 31, 1994
---------------------------------------------------
Gross Gross Fair
Amortized Unrealized Unrealized Market
Cost Gains Losses Value
--------- ---------- ---------- ---------
<S> <C> <C> <C> <C>
U. S. Treasury securities $ 4,021 $ $ 204 $ 3,817
Obligations of other U. S.
government agencies and
corporations 2,796 1 48 2,749
Mortgage-backed securities 7,773 2 585 7,190
------- -------- -------- --------
$14,590 $ 3 $ 837 $ 13,756
======= ======== ======== =======
</TABLE>
<TABLE>
<CAPTION>
The following is a summary of maturities of securities held-to-maturity and available for sale as of December
31, 1994:
Securities held-to-maturity Securities available-for-sale
--------------------------- -----------------------------
Amortized Fair Amortized Fair
Cost Value Cost Value
--------- ----- --------- -----
<S> <C> <C> <C> <C>
Amounts maturing in:
One year or less $ 895 $ 899 $ 1,297 $ 1,289
After one year through
five years 26,070 24,983 10,711 10,099
After five years through
ten years 15,592 14,830 1,707 1,546
After ten years 706 636 875 822
------- ------- ------- -------
$43,263 $41,348 $14,590 $13,756
======= ======= ======= =======
</TABLE>
The amortized cost and fair value of mortgage-backed securities at
December 31, 1994, allocated by contractual maturity is reflected
in the above schedule. Expected maturities will differ from
contractual maturities because borrowers may have the right to call
or prepay without call or prepayment penalties.
During 1994, the Bank sold securities available-for-sale for the
total proceeds of approximately $10,485, resulting in gross
realized gains of approximately $105 and gross realized losses of
approximately $3. Proceeds of securities held-to-maturity which
were called are included in the total proceeds.
The amortized cost and approximate market values of investment
securities at December 31, 1993 are summarized as follows:
<TABLE>
<CAPTION>
December 31, 1994
-----------------------------------------------------------
Gross Gross
Amortized Unrealized Unrealized Approximate
Cost Gains Losses Market Value
--------- ---------- ---------- -------------
<S> <C> <C> <C> <C>
U. S. Treasury securities $ 5,593 $ 61 $ 1 $ 5,653
Obligations of other U. S.
government agencies and
corporations 40,375 517 182 40,710
Obligations of states and
political subdivisions 3,778 250 7 4,021
Other securities 1,666 -0- 1 1,665
------- -------- -------- --------
$51,412 $ 828 $ 191 $ 52,049
======= ======== ======== ========
</TABLE>
<TABLE>
<CAPTION>
The amortized cost and approximate market value of debt securities at December 31, 1993, by contractual
maturity, are shown below. Expected maturities will differ from contractual maturities because borrowers may
have the right to call or prepay obligations with or without call or prepayment penalties.
Amortized Approximate
Cost Market Value
--------- ------------
<S> <C> <C>
Due in one year or less $ 17,857 $ 17,799
Due after one year through
five years 16,400 16,817
Due after five years through
ten years 11,387 11,657
Due after ten years 5,768 5,776
------- -------
$51,412 $52,049
======= =======
</TABLE>
Proceeds from sales of investments in debt securities during 1993
were $8,748. Gross realized losses on these sales were $16. Gross
realized gains on these sales were $109.
During 1994, debt securities with an amortized cost of $14,991 were
transferred from available-for-sale to held-to-maturity because of
an error in the original classification by the portfolio servicer.
The securities had an unrealized loss of approximately $637.
Investment securities with a carrying amount of $11,821 and a fair
value of $11,454 at December 31, 1994 were pledged to secure public
deposits as required or permitted by law.
Investment securities with a carrying amount of $10,597 at December
31, 1993 were pledged to secure public deposits as required or
permitted by law.
NOTE 3: LOANS
The components of loans are as follows:
1994 1993
---- ----
Commercial $ 4,419 $ 3,717
Commercial Real Estate 37 296
Residential Real Estate 17,498 13,723
Agriculture Real Estate and Production 5,268 5,902
Installment and Other Loans 11,068 11,221
Allowance for loan losses ( 839) ( 811)
------- -------
Loans, net $37,451 $34,048
======= =======
Loans on which the accrual of interest has been discontinued or
reduced amounted to $324 at December 31, 1994 and $438 at December
31, 1993. Had interest been accrued on these loans placed on non-
accruing status, income would have increased by approximately $10
at December 31, 1994, and $44 at December 31, 1993.
Changes in the allowance for loan losses are as follows:
1994 1993
---- ----
Balance at beginning of year $ 811 $ 690
Nontaxable reduction ( 200) -0-
Loans charged off ( 422) ( 153)
Recoveries 650 274
------- -------
Balance, end of year $ 839 $ 811
======= =======
NOTE 4: OFFICE BUILDINGS, EQUIPMENT, AND LEASEHOLD IMPROVEMENTS
Major classifications of these assets are summarized as follows:
1994 1993
---- ----
Land $ 491 $ 491
Buildings and Improvements 2,131 2,011
Furniture and Equipment 1,009 1,000
------- -------
Total 3,631 3,502
Less: Accumulated Depreciation $ 1,087 $ 1,073
------- -------
Net Premises and Equipment $ 2,544 $ 2,429
======= =======
Depreciation expense totaled $158 for 1994 and $160 for 1993.
NOTE 5: INCOME TAXES
The total income taxes in the statements of income are as follows:
1994 1993
---- ----
Currently payable
Federal $ 365 $ 397
Deferred
Federal ( 93) ( 3)
------- -------
$ 458 $ 394
======= =======
Accumulated deferred income tax assets of $(102) for 1994 is
included in other assets, and accumulated deferred income tax
liability of $88 for 1993 are included in accrued interest and
other liabilities on the balance sheets.
Deferred income taxes according to the temporary differences which
caused them were as follows:
1994 1993
---- ----
Excess of provision for loan losses
over deduction for federal income
tax purposes $ 63 $ -0-
Accretion of discount on investment
securities 46 42
Accelerated depreciation 73 57
Writedowns of other real estate ( 5) ( 11)
Unrealized losses on securities ( 284)
------- -------
Deferred tax liability (asset) $( 102) $ 88
======= =======
The provision for federal income taxes is less than that computed
by applying the federal statutory rate of 34% in 1994 and 1993, as
indicated in the following analysis:
1994 1993
---- ----
Tax based on statutory rate $ 570 $ 549
Effect of tax exempt income:
Tax-exempt securities ( 103) ( 97)
Tax-exempt loan income ( 17) ( 18)
Tax-exempt FDIC reserve ( 7) ( 53)
Other non deductible expense 14 2
Other (net) 1 11
------- -------
$ 458 $ 394
======= =======
NOTE 6: COMMITMENTS AND CONTINGENCIES
In the normal course of business, there are various commitments and
contingent liabilities (such as guarantees, commitments to extend
credit, letters of credit, lines of credit and liability for assets
held in trust) which are properly not recorded in the financial
statements. In the opinion of management, these do not represent
unusual risks.
The following table summarizes the Bank's significant commitments
and contingent liabilities at December 31, 1994 and 1993:
1994 1993
---- ----
Standby letters of credit $ 155 $ 199
Unfunded loan commitments 514 642
Commitments to extend credit are agreements to lend to a customer
as long as there is no violation at any condition established in
the contract. Commitments generally have fixed expiration dates or
other termination clauses and may require payment of a fee. Since
some of the commitments may expire without being drawn upon, the
total commitment amounts do not necessarily represent future cash
requirements. The Bank evaluates each customer's creditworthiness
on a case by case basis. The amount and type of collateral
obtained, if deemed necessary by the Bank upon extension of credit,
varies and 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.
Standby letters of credit generally have fixed expiration dates or
other termination clauses and may require payment of a fee. The
credit risk involved in issuing letters of credit is essentially
the same as that involved in extending loan facilities to
customers. The Bank's policy for obtaining collateral, and the
nature of such collateral, is essentially the same as that involved
in making commitments to extend credit.
These financial instruments contain off-balance-sheet risk and are
issued in the normal course of business to meet the financing needs
of the Bank's customers and involve, to varying degrees, elements
of credit and interest rate risk in excess of the amounts
recognized in the consolidated statements of financial condition.
The Bank's exposure to credit loss in the event of nonperformance
by the other party to the instrument is represented by the
contractual notional amount of these instruments.
At December 31, 1994, the Bank had three unused lines of credit
with correspondent banks. These lines total $3,500 at a variable
interest rate based on the lending bank's daily federal funds rate
and is due on demand. The lines are unsecured.
NOTE 7: FUNDS AVAILABLE FOR DIVIDENDS
A primary source of funds available to the Company is the payment
of dividends by the subsidiary bank. The Bank is restricted under
applicable laws in the payment of cash dividends. Such laws
generally restrict cash dividend payments for the year 1994 to the
extent of the Bank's earnings for 1994 plus $728 of available
earnings from the immediate preceding year of 1993.
NOTE 8: RELATED PARTY TRANSACTIONS
In the ordinary course of business, the Bank has and expects to
continue to have transactions, including borrowings, with its
officers, directors, stockholders, and their affiliates. Loans to
such borrowers at December 31 are summarized as follows:
1994 1993
---- ----
Balance, beginning of year $ 1,060 $ 983
(Payments) and advances, net ( 59) 77
------- -------
Balance, end of year $ 1,001 $ 1,060
======= =======
During 1994 and 1993, the Bank made payments to a contractor, who
is a director, for improvements and renovations to its branch
office buildings in Marksville and Cottonport. The total costs
paid to the contractor was $31 and $277 respectively.
During 1994 and 1993, attorney fees in the amount of $36 and $42,
respectively, were paid to a local law firm which is owned by a
director of the bank.
NOTE 9: PROFIT SHARING PLAN
In 1986, the Bank adopted a profit sharing plan covering
substantially all employees. The plan calls for contributions up
to fifteen percent of employees salaries, determined at the
discretion of the Board of Directors. Hibernia National Bank is
the administrator of the plan. The contributions to this plan for
1994 and 1993 were $68 and $139 respectively.
NOTE 10: CONCENTRATIONS OF CREDIT
All of the Bank's loans, commitments, and standby letters of credit
have been granted to customers in the Bank's market area. All such
customers are depositors of the Bank. Investments in state and
municipal securities also involve governmental entities within the
Bank's market area. The concentrations of credit by type of loan
are set forth in Note 3. The distribution of commitments to extend
credit approximates the distribution of loans outstanding.
Commercial and standby letters of credit were granted primarily to
commercial borrowers. The Bank, as a matter of policy, does not
extend credit to any single borrower or group of related borrowers
in excess of $1,500,000 on a secured basis, and $600,000 on an
unsecured basis. Additionally, at times the Bank maintains
deposits in federally insured financial institutions in excess of
federally insured limits. Management monitors the soundness of
these financial institutions and feels the Bank's risk is
negligible.
SUPPLEMENTARY INFORMATION
KENNETH J. BREAUX
CERTIFIED PUBLIC ACCOUNTANT
305 WALNUT STREET
P. O. BOX 140
BUNKIE, LA 71322
PHONE: (318) 346-2652
FAX: (318) 346-6547
INDEPENDENT AUDITOR'S REPORT ON
SUPPLEMENTARY INFORMATION
February 10, 1995
Board of Directors and Stockholders
Bunkie Bancshares, Inc. and Subsidiary
Bunkie, Louisiana 71322
My report on my audits of the consolidated financial statements of
Bunkie Bancshares, Inc. and Subsidiary for 1994 and 1993 appears on
page 3. Those audits were made for the purpose of forming an
opinion on the consolidated financial statements taken as a whole.
The consolidating information in the accompanying supplementary
Schedules 1 and 2 is presented for purposes of additional analysis
of the consolidated financial statements rather than to present the
financial position, results of operations, and cash flows of the
individual companies. Such information has been subjected to the
auditing procedures applied in the audits of the consolidated
financial statements and, in my opinion, is fairly stated in all
material respects in relation to the consolidated financial
statements taken as a whole.
/s/ KENNETH J. BREAUX
KENNETH J. BREAUX
CERTIFIED PUBLIC ACCOUNTANT
BUNKIE BANCSHARES, INC. AND SUBSIDIARY
BUNKIE, LOUISIANA
CONSOLIDATING SCHEDULE - FINANCIAL CONDITION
DECEMBER 31, 1994
(DOLLARS IN THOUSANDS)
<TABLE>
<CAPTION>
Bunkie
Bunkie Bank and Elimination
Bancshares, Inc. Trust Co. Dr. (Cr.) Consolidated
---------------- --------- ----------- ------------
<S> <C> <C> <C> <C>
ASSETS
Cash and due from banks $ 9 $ 4,241 $ ( 9) $ 4,241
Federal funds sold 3,595 3,595
Investments in securities 57,019 57,019
Investments in subsidiary 8,416 ( 8,416)
Loans, net 37,451 37,451
Premises and equipment, net 2,544 2,544
Accrued interest receivable 1,266 1,266
Other assets $ $ 286 $ $ 286
--------- --------- ------------ ---------
TOTAL ASSETS $ 8,425 $106,402 $ ( 8,425) $ 106,402
========= ========= ============ =========
</TABLE>
<TABLE>
<CAPTION>
SCHEDULE 1
<S> <C> <C> <C> <C>
LIABILITIES
Non-interest bearing deposits $ $ 13,554 $ 9 $ 13,545
Savings and Now deposits 18,334 18,334
Other interest-bearing deposits 56,345 56,345
Certificates of deposit > $100,000 8,902 8,902
Accrued interest payable and
other liabilities 890 890
--------- -------- ------------ ---------
TOTAL LIABILITIES $ -0- $ 98,025 $ 9 $ 98,016
STOCKHOLDER'S EQUITY
Common Stock $ 221 $ 265 $ 265 $ 221
Capital Surplus 2,272 2,735 2,735 2,272
Retained earnings 6,491 5,929 5,968 6,452
Treasury stock ( 7) ( 7)
Unrealized loss on securities
available-for-sale,
net of deferred taxes $( 552) $( 552) $( 552) $( 552)
--------- -------- ------------ ---------
TOTAL STOCKHOLDER'S EQUITY $ 8,425 $ 8,377 $ 8,416 $ 106,402
--------- -------- ------------ ---------
TOTAL LIABILITIES AND
STOCKHOLDER'S EQUITY $ 8,425 $106,02 $ 8,425 $ 106,402
========= ======== ============ =========
</TABLE>
BUNKIE BANCSHARES, INC. AND SUBSIDIARY
BUNKIE, LOUISIANA
CONSOLIDATING SCHEDULE - INCOME
FOR THE YEAR ENDED DECEMBER 31, 1994
(DOLLARS IN THOUSANDS)
<TABLE>
<CAPTION>
SCHEDULE 2
Bunkie
Bunkie Bank and Elimination
Bancshares, Inc. Trust Co. Dr. (Cr.) Consolidated
---------------- --------- ----------- ------------
<S> <C> <C> <C> <C>
INTEREST INCOME
Loans $ $ 3,483 $ $ 3,483
Investment Securities:
U. S. Government obligations 2,599 2,599
State and municipals 304 304
Money market investments 84 84
Federal Funds sold 157 157
Specific reserves - FDIC 21 21
---------- --------- --------- ---------
Total Interest Income $ $ 6,648 $ $ 6,648
INTEREST EXPENSE $ $ 2,867 $ $ 2,867
---------- --------- --------- ---------
NET INTEREST INCOME $ $ 3,781 $ $ 3,781
PROVISION FOR LOAN LOSSES 200 200
OTHER INCOME
Gain on sale of assets 88 88
Service charges on deposits 541 541
Investment in subsidiary 1,257 1,257
Other operating income 213 213
---------- --------- --------- ---------
INCOME BEFORE OPERATING EXPENSE $ 1,257 $ 4,823 $ 1,257 $ 4,823
OPERATING EXPENSE
Salaries and employee benefits $ $ 1,461 $ $ 1,461
Furniture and equipment expense 115 115
Occupancy expense 209 209
Other operating expense 4 1,362 1,366
--------- --------- --------- ---------
Total Operating Expense $ 4 $ 3,147 $ $ 3,151
--------- --------- --------- ---------
INCOME BEFORE INCOME TAXES $ 1,253 $ 1,676 $ 1,257 $ 1,672
APPLICABLE INCOME TAXES $ $ 458 $ $ 458
--------- --------- --------- ---------
NET INCOME $ 1,253 $ 1,218 $ 1,257 $ 1,214
========= ========= ========= =========
</TABLE>
BUNKIE BANCSHARES, INC. & SUBSIDIARY
CONSOLIDATED STATEMENTS OF CONDITION
SEPTEMBER 30, 1995 AND 1994
1995 1994
---- ----
ASSETS
- ------
Cash and due from banks $ 3,087,717 $ 3,433,232
CD's in other banks 685,000 1,279,665
Investment securities held to
maturity, fair value of
$36,516,243 and $35,102,576,
respectively 35,157,678 $ 38,678,532
Investment securities available
for sale 14,154,629 15,078,421
Loans, less allowance for loan
losses of $610,572 and $920,941,
respectively 46,157,719 40,731,449
Bank premises and equipment 2,614,615 2,393,394
Accrued interest and other
receivables 1,516,101 1,374,749
Other assets 2,296,156 448,364
------------ ------------
TOTAL ASSETS $105,669,615 $103,417,806
============ ============
LIABILITIES AND STOCKHOLDERS' EQUITY
- ------------------------------------
Deposits:
Demand $ 12,383,618 $ 12,021,251
NOW accounts 9,514,482 10,051,153
Savings 7,931,360 8,721,878
CD's > $100M 9,902,205 7,683,709
CD's < $100M 45,077,262 43,127,361
Money market accounts 10,362,104 12,895,779
------------ ------------
Total deposits 95,171,031 94,501,131
Accounts payable 268,877 269,058
Accrued interest and other
liabilities 547,080 159,642
------------ ------------
Total liabilities 95,986,988 94,929,831
------------ ------------
Stockholders' equity
Common stock, $20 per value,
200,000 shares authorized,
11,028 shares issued and
outstanding 220,560 220,560
Surplus 2,272,299 2,272,299
Undivided profits 7,297,900 6,376,651
Treasury stock, at cost ( 6,883) ( 6,883)
Unrealized gain (loss)
on investments ( 101,249) ( 374,652)
------------ ------------
Total stockholders' equity 9,682,627 8,487,975
------------ ------------
TOTAL LIABILITIES AND
STOCKHOLDERS' EQUITY $105,669,615 $103,417,806
============ ============
BUNKIE BANCSHARES, INC. & SUBSIDIARY
CONSOLIDATED STATEMENTS OF INCOME
FOR THE NINE MONTHS ENDED SEPTEMBER 30, 1995 AND 1994
1995 1994
---- ----
INTEREST INCOME
Interest and fees on loans $3,184,601 $2,674,402
Interest on investment securities:
U. S. Treasuries 253,817 207,652
Obligations of U. S. agencies 2,046,103 1,675,426
Obligations of state and political
sub. 237,512 215,470
Interest on deposits in other banks 34,608 70,531
Interest on federal funds sold 142,519 104,024
---------- ----------
Total interest income 5,899,160 4,947,505
INTEREST ON DEPOSITS 2,781,614 2,070,227
---------- ----------
NET INTEREST INCOME 3,117,546 2,877,278
PROVISION FOR LOAN LOSSES ( 150,000) -0-
---------- ----------
NET INCOME AFTER PROVISION FOR
LOAN LOSSES 3,267,546 2,877,278
OTHER INCOME
Service charges on deposit accounts 517,782 394,499
Other income 82,495 144,800
---------- ----------
Total other income 600,277 539,299
---------- ----------
OTHER EXPENSES
Salaries and employee benefits 1,167,089 1,104,413
Occupancy expense 301,808 256,836
Other expenses 940,335 933,453
---------- ----------
Total other expenses 2,409,232 2,294,702
---------- ----------
INCOME BEFORE INCOME TAXES 1,458,591 1,121,875
---------- ----------
INCOME TAX PROVISION
Current 302,000 298,644
Deferred 63,000 ( 26,644)
---------- ----------
Net income provision 365,000 272,000
NET INCOME $1,093,591 $ 849,875
---------- ----------
Net income per share of common stock $ 99.17 $ 77.07
---------- ----------
Cash dividends per share of
common stock $ 22.45 $ 18.75
---------- ----------
BUNKIE BANCSHARES, INC. & SUBSIDIARY
CONSOLIDATED STATEMENTS OF CHANGES IN STOCKHOLDERS' EQUITY
FOR THE NINE MONTHS ENDED SEPTEMBER 30, 1995 AND 1994
COMMON STOCK
----------------------
SHARES PAR VALUE SURPLUS
------ --------- -------
BALANCE DECEMBER 31, 1993 $11,028 $220,560 $2,271,602
Net income
Cash dividends
Sale of treasury stock 697
Unrealized loss - AFS
------- -------- ----------
BALANCE SEPTEMBER 30, 1994 $11,028 $220,560 $2,272,299
------- -------- ----------
BALANCE DECEMBER 31, 1994 11,028 220,560 2,272,299
Net income
Cash dividends
Decrease in unrealized
loss - AFS
------- -------- ----------
BALANCE SEPTEMBER 30, 1995 $11,028 $220,560 $2,272,299
------- -------- ----------
RETAINED UNREALIZED TREASURY STOCK
EARNINGS LOSS SHARES COST TOTAL
- -------- ---------- ------ ---- -----
$5,733,476 $ -0- 30 $(9,386) $8,216,252
849,875 849,875
( 206,700) ( 206,700)
(8) 2,503 3,200
(374,652) ( 374,652)
- ---------- ---------- ------ ------- ----------
$6,376,651 $ (374,652) 22 $(6,883) $8,487,975
- ---------- ---------- ------ ------- ----------
$6,451,960 $ (552,140) 22 $(6,883) $8,487,975
1,093,591 1,093,591
( 247,651) (247,651)
450,891 450,891
- ---------- ---------- ------ ------- ----------
$7,297,900 $ (101,249) 22 $(6,883) $9,682,627
- ---------- ---------- ------ ------- ----------
BUNKIE BANCSHARES, INC. & SUBSIDIARY
CONSOLIDATED STATEMENTS OF CASH FLOWS
FOR THE NINE MONTHS ENDED SEPTEMBER 30, 1995 AND 1994
1995 1994
---- ----
CASH FLOWS FROM OPERATING ACTIVITIES
Net income $ 1,093,591 $ 849,875
Adjustments to reconcile net
income to net cash provided
(used) by operating activities:
Depreciation 128,037 104,694
(Gain) loss on sales of
investment ( 11,594) ( 86,713)
(Gain) loss on sales of
other assets 2,305 2,271
Deferred income taxes 311,106 ( 103,513)
(Increase) decrease in accrued
interest receivable ( 250,142) ( 196,696)
(Increase) decrease in other
assets ( 7,840) ( 50,263)
Increase (decrease) in accounts
payable and other liabilities 319,297 202,789
----------- ----------
Net Cash Provided (Used)
By Operating Activities 1,584,760 722,444
----------- ----------
CASH FLOWS FROM INVESTING ACTIVITIES
Purchase of property and equipment ( 198,387) ( 69,332)
Purchase of securities available
for sale (8,655,607)
Proceeds of maturities of investments
available for sale 760,093 3,500,000
Proceeds of sales of securities
available for sale 1,850,688 6,776,262
Purchase of securities held to
maturity ( 4,492,834) (11,683,395)
Proceeds of maturities of securities
held to maturity 1,240,000 4,542,000
Proceeds of calls of securities held
to maturity 7,889,248 1,270,000
Principal paid - mortgage backed
securities 234,570 341,125
(Increase) decrease in federal funds
sold 1,465,000 3,245,000
(Increase) decrease in loans ( 8,706,595) ( 6,683,908)
Proceeds from sale of other
real estate 27,500 48,493
----------- -----------
Net Cash Provided (Used)
By Investing Activities 69,283 ( 7,369,312)
----------- -----------
CASH FLOWS FROM FINANCING ACTIVITIES
Increase (decrease) in deposits $(2,557,588) $ 7,684,795
Dividends paid ( 249,763) ( 206,700)
Sale of treasury stock 3,200
----------- -----------
Net Cash Provided (Used)
By Financing Activities (2,807,351) 7,481,295
----------- -----------
NET INCREASE (DECREASE) IN CASH AND
CASH EQUIVALENTS (1,153,308) 834,427
CASH AND CASH EQUIVALENTS AT
BEGINNING OF PERIOD 4,241,025 2,598,805
----------- -----------
CASH AND CASH EQUIVALENTS AT
END OF PERIOD $ 3,087,717 $ 3,433,232
----------- ------------
APPENDIX A
AGREEMENT AND PLAN OF MERGER
OF
BUNKIE BANCSHARES, INC.
WITH AND INTO
HIBERNIA CORPORATION
AGREEMENT AND PLAN OF MERGER dated as of September 7, 1995
(this "Agreement"), adopted and made by and between Bunkie
Bancshares, Inc., a Louisiana corporation ("Seller") and Hibernia
Corporation ("Hibernia").
Seller is a corporation duly organized and existing under the
laws of the State of Louisiana; has its registered office at 122
West Church Street, Bunkie, Louisiana 71322-1717; 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 Seller consists solely of
200,000 shares of common stock of the par value of $20.00 each
("Seller Common Stock"). As of June 30, 1995, 11,028 shares of
Seller Common Stock had been issued, 11,006 shares of Seller Common
Stock were outstanding, and 22 shares of Seller Common Stock were
held in Seller's treasury. All outstanding shares of Seller Common
Stock have been duly issued and are validly outstanding, fully paid
and nonassessable. The foregoing are the only voting securities of
Seller authorized, issued, or outstanding, and there are no
existing options, warrants, calls, or commitments of any kind
obligating Seller 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 Seller's capital stock has been issued in violation of
preemptive rights of shareholders. Seller owns 100 percent of the
outstanding voting shares of Bunkie Bank & Trust Company (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, and
200,000,000 shares of Class A voting common stock, no par value
(the Class A voting common stock being referred to hereinafter as
"Hibernia Common Stock"). As of June 30, 1995, no shares of
Hibernia's preferred stock were outstanding, 113,442,399 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
1,705,136 shares of Hibernia Common Stock for issuance under its
1987 Stock Option Plan, pursuant to which options covering
1,556,739 shares of Hibernia Common Stock were outstanding as of
June 30, 1995; 4,477,053 (as adjusted) shares of Hibernia Common
Stock for issuance under its 1992 Long-Term Incentive Plan,
pursuant to which options covering 3,885,133 shares of Hibernia
Common Stock were outstanding as of June 30, 1995; 1,000,000 shares
of Hibernia Common Stock for issuance under its 1993 Director Stock
Option Plan, pursuant to which options covering 235,000 shares of
Hibernia Common Stock are outstanding on the date hereof; and
360,999 shares of Hibernia Common Stock are available for issuance
pursuant to Hibernia's Dividend Reinvestment and Stock Purchase
Plan. Mergers consummated with Progressive Bancorporation, Inc.
and Bank of St. John as of July 1, 1995 will result in the issuance
of an aggregate of approximately 5.9 million additional shares. A
pending merger with FNB Bancshares, Inc. will result in the
issuance of an additional approximately 889,000 shares of Hibernia
Common Stock. None of the shares of Hibernia's capital stock has
been issued in violation of preemptive rights of shareholders.
HNB is a national banking association organized and existing
under the laws of the United States of America having its principal
registered office at 313 Carondelet Street, New Orleans, Louisiana
70130. All of the issued and outstanding shares of capital stock
of HNB are owned by Hibernia. HNB is (i) an "insured bank" as
defined in the Federal Deposit Insurance Act and applicable
regulations thereunder, and (ii) has been duly organized and is
validly existing as a national bank under the laws of the United
States, and has full authority to conduct its business as and where
currently conducted.
The Boards of Directors of Seller and Hibernia have duly
approved this Agreement and have authorized the execution hereof by
Seller's Chairman of the Board and Hibernia's President and Chief
Executive Officer, respectively. Seller 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
Seller 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), Seller 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. Seller Common Stock.
3.1. Conversion. On the Effective Date and subject to
the provisions of Section 3.7 hereof,
(a) each share of Seller 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
Seller 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 Seller;
(c) each share of Seller Common Stock held in the
treasury of Seller 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 Seller Common Stock represented by the Old Certificates
then delivered by such holder) shall receive, in lieu thereof, cash
(without interest) in an amount equal to such fractional part of a
share multiplied by the average of the mean of high and low prices
of one share of Hibernia Common Stock for the five business days
preceding the Effective Date as reported in The Wall Street
Journal, or, if the Hibernia Common Stock is not then so reported,
the average of the fair market values of one share of Hibernia
Common Stock on the five business days preceding the Effective Date
determined pursuant to such reasonable method as the Board of
Directors of Hibernia may adopt in good faith for such purpose, and
no such holder shall be entitled to dividends, voting rights or any
other right of shareholders in respect of any fractional share.
3.3. Transmittal Materials. As promptly as practicable
after the Effective Date, Hibernia shall send or cause to be sent
to each former shareholder of record of Seller 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
Seller 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 Seller 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 Seller or Hibernia of the shares of Seller 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 Seller 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 Seller 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 Seller, and otherwise to
carry out the purposes of this Agreement.
3.7. Dissenters' Shares. Shares of Seller 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 Seller Common Stock, at which time
such shares shall be converted as provided in Section 3.1 hereof.
3.8. Exchange Rate. The Exchange Rate shall be
calculated as follows: 1,874,760 (the aggregate number of shares
of Hibernia Common Stock to be issued in the Merger) divided by the
number of issued and outstanding shares of Seller Common Stock,
which Exchange Rate shall be approximately 170.3398:1.
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 Seller
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 Seller 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 Seller or the Bank shall be deemed equivalent
to having been employed for that same period by Hibernia and/or its
subsidiaries and provided further, however, that if Hibernia
determines in good faith that it cannot merge any benefit plan of
Seller or Bank into a comparable benefit plan of Hibernia or HNB
without creating material potential liability for Hibernia's or
HNB's plan, then Hibernia shall be entitled to freeze the existing
benefit plan of Seller or Bank and prohibit participation by former
employees of Seller or Bank in Hibernia's plan for the period of
time required by applicable law to ensure that Hibernia's and HNB's
benefit plans are not deemed to be successor plans of the Seller or
Bank plan in question.
6. Negative Covenants. From the date hereof until the
Effective Date, or until the termination of this Agreement, Seller
covenants and agrees that it will not do, or agree to commit to do,
and Seller 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 Seller (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 Seller Common Stock
(other than in a fiduciary capacity); provided, however, that
Seller may pay dividends, from the date hereof and prior to the
Closing Date, at such time or from time to time and in such
amount(s) as are consistent with past practice during the preceding
two years, and provided, further that Seller acknowledges that the
shareholders of Seller shall not be entitled to any dividends with
respect to shares of Hibernia Common Stock received by them in the
Merger with respect to any period as to which a dividend was
previously paid by Seller with respect to its 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) except as otherwise provided herein, 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; provided,
however, that Seller or Bank may contribute an amount not to exceed
$85,000 in the aggregate to its pension plan with respect to 1995,
pay bonuses to its employees with respect to 1995 in an aggregate
amount not to exceed $143,580 and bonuses to its directors with
respect to 1995 in an aggregate amount not to exceed $33,100 in
accordance with Schedule 6(c) attached hereto and made a part
hereof and so long as such contributions and bonuses are consistent
with past practice during the preceding two years (or, in the case
of bonuses to Messrs. Boatner and Bordelon, consistent with their
respective bonuses in the preceding year) or otherwise may be made
in accordance with the rules applicable to transactions accounted
for as poolings of interests for accounting purposes;
(d) enter into or substantially modify (except as may be
required by applicable law) any pension, retirement, stock option,
stock purchase, stock appreciation right, savings, profit sharing,
deferred compensation, consulting, bonus, group insurance or other
employee benefit, incentive or welfare contract, plan or
arrangement, or any trust agreement related thereto, in respect of
any of its directors, officers or other employees;
(e) other than as contemplated hereby, (i) carry on its
business other than in the usual, regular and ordinary course in
substantially the same manner as heretofore conducted, (ii) amend
its or the Bank's Articles of Incorporation or Bylaws, (iii)
impose, or suffer the imposition, on any share of stock held by
Seller in the Bank, of any material lien, charge, or encumbrance,
or permit any such lien to exist other than as provided in
Louisiana Revised Statutes Section 6:262, (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 Seller'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 Seller. Seller (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 Seller 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 Seller 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 Seller
has all requisite power and authority to execute and deliver this
Agreement and perform its obligations hereunder.
7.3. Ownership of Other Banks. Seller 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 13,250 shares of
common stock of the par value of $20.00 each, of which 13,250
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 Seller, free and clear
of all liens, claims and encumbrances.
7.4. Corporate Authorization. The execution, delivery
and performance of this Agreement have been authorized by Seller's
Board of Directors, and, subject to 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 Seller 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 Seller, enforceable against Seller 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 Seller 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 Seller or the Bank or to which Seller 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 Seller and the Bank taken as
a whole or on the transactions contemplated hereby, (ii) to the
best of the knowledge of Seller'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 Seller or the Bank or to
which Seller or the Bank is subject, or (iii) a breach or violation
of, or a default under, the Articles of Incorporation or Bylaws of
Seller 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.
Seller 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
"Seller Financial Statements"): Seller's Consolidated Balance
Sheets as of December 31, 1994, 1993 and 1992 (audited) and as of
June 30, 1995 and 1994 (unaudited); Consolidated Statements of
Income and Changes in Stockholders' Equity and Consolidated
Statements of Cash Flows for the years ended December 31, 1994,
1993 and 1992 (audited). Each of the Seller Financial Statements
(including the related notes) fairly presents the consolidated
results of operations of Seller and the Bank for the respective
periods covered thereby and the consolidated financial condition of
Seller 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), in each case in
accordance with GAAP consistently applied during the periods
involved, except as may be noted therein. Except as disclosed in
the Seller 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 Seller 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, 1995,
there has been no event or condition of any character (whether
actual, or to the knowledge of Seller or the Bank, threatened or
contemplated) that has had or can reasonably be anticipated to
have, or that, if concluded or sustained adversely to Seller, would
reasonably be anticipated to have, a material adverse effect on the
financial condition, results of operations, business or prospects
of Seller 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 Seller
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 Seller 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 Seller'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 Seller nor the Bank is bound by any
material contract to be performed after the date hereof that is not
terminable by Seller 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 Seller 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.
7.11. Contingent Liabilities. Except as disclosed on
Schedule 7.11 hereto or as reflected in the Seller 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, 1995, neither Seller 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 Seller 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, 1995, or from any action omitted to be taken
during such period that, to the knowledge of Seller, 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 Seller 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, 1995,
neither Seller nor the Bank has incurred or paid any obligation or
liability that would be material to Seller 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.
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 Seller 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 June 30, 1995, 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 Seller or the Bank except as
reserved against in the Seller Financial Statements. All taxes,
interest, additions and penalties due with respect to completed and
settled examinations or concluded litigation have been paid, and
Seller's reserves for bad debts at December 31, 1994, 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 Seller in the Seller
Financial Statements, as of June 30, 1995, 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 Seller, 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 Seller as of
June 30, 1995 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,
1995, and each such allowance has been established in accordance
with GAAP.
7.17. Title to Assets; Adequate Insurance Coverage.
(a) As of June 30, 1995, Seller 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 Seller 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 Seller Financial Statements or which secure deposits of
public funds as required by law; (ii) liens for taxes accrued but
not yet payable; (iii) liens arising as a matter of law in the
ordinary course of business with respect to obligations incurred
after June 30, 1995, 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. Seller 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 Seller 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) Except as disclosed on Schedule 7.17(b) attached
hereto and made a part hereof, with respect to each lease of any
real property or a material amount of personal property to which
Seller or the Bank is a party, except for financing leases in which
Seller 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; (iii) there exists no default or event, occurrence,
condition or act which with the giving of notice, the lapse of time
or the happening of any further event, occurrence, condition or act
would become a default under such lease; and (iv) 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 Seller 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 Seller and the Bank
provide adequate coverage against loss and the fidelity bonds in
effect as to which Seller or the Bank is named insured meet the
applicable standards of the American Bankers Association.
7.18. Employee Plans. To the best of Seller'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 Seller 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, Seller has provided Hibernia, or, within ten days after the
date hereof, Seller will provide 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 Seller 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 as disclosed on Schedule 7.21
attached hereto and made a part hereof, neither Seller nor the Bank
is in default in any material respect under any contract,
agreement, commitment, arrangement, lease, insurance policy or
other instrument to which it is a party or by which its respective
assets, business or operations may be bound or affected or under
which it or its respective assets, business or operations receive
benefits, and there has not occurred any event that with the lapse
of time or the giving of notice or both would constitute such a
default.
7.22. Minutes. Prior to the date hereof, Seller has
made available, or, within ten days after the date hereof, Seller
will make available, to Hibernia, for inspection pursuant to the
terms of Section 9.5 hereof, the minutes of meetings of Seller's
and the Bank's Boards 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 Seller 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 Seller or the Bank at the date hereof. Except as
disclosed on Schedule 7.23 hereto, neither Seller 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 Seller 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 Seller or the Bank.
7.24. Investments. Except for pledges to secure public
or trust deposits, none of the investments reflected in the Seller
Financial Statements under the heading "Investment Securities," and
none of the investments made by Seller or the Bank since June 30,
1995, and none of the assets reflected in the Seller 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 Seller or the Bank freely to
dispose of such investment at any time except for the restrictions
of SFAS 115. With respect to all repurchase agreements to which
Seller or the Bank is a party, Seller 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. Neither Seller nor the
Bank nor, to the knowledge of Seller 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 Seller
or the Bank or used by Seller or the Bank in their respective
business ("Seller Properties") used, generated, treated, stored, or
disposed of any hazardous waste, toxic substance, or similar
materials on, under, or about Seller 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 Seller 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 Seller 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 will have been duly authorized and, when
issued in accordance with the terms of this Agreement, will be
validly issued, fully paid, and nonassessable.
8.4. Due Authorization. The execution, delivery and
performance of this Agreement have been authorized by Hibernia's
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, 1994, its proxy statement for its 1995 annual meeting
of shareholders, its Quarterly Report on Form 10-Q for the fiscal
quarter ended June 30, 1995 and each Current Report on Form 8-K
filed after June 30, 1995 and prior to the date hereof, each in the
form (including exhibits) filed with the Securities and Exchange
Commission (the "SEC") (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 Seller on or
before the date hereof.
8.7. No Material Adverse Change. Since June 30, 1995,
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. Community Reinvestment Act Performance Evaluation.
Attached hereto as Schedule 8.8 is a copy of the Community
Reinvestment Act Performance Evaluation presently in effect with
respect to HNB.
8.9 Use of Pooling of Interests Accounting Treatment.
Management of Hibernia is not currently aware of any facts or
circumstances that would prevent the Merger from qualifying for
pooling of interests accounting treatment, it being understood that
this representation is made only as of the date of this Agreement
and that, as of the date hereof, Hibernia has performed no
significant due diligence with respect to Seller or the Bank.
9. Agreements and Covenants. Hibernia and Seller 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 Seller
relating to Seller, (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 Seller 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 the other in advance, neither Hibernia nor Seller will
issue any press release, marketing or advertising material or other
written statement for general circulation relating to the
transactions contemplated hereby, except as otherwise required by
law (including any disclosure required in periodic public reports
issued by Hibernia and in any registration statement or prospectus
relating to a pending or subsequent merger). 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 (which
press release was approved by Seller in accordance with this
Section), such filing may be made without prior consultation with
Seller so long as Seller 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 Seller 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 Seller 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 Seller and such representatives with such
financial and operating data and other information of any kind
respecting its business and properties as Seller shall from time to
time reasonably request to perform such review, (B) furnish Seller
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 Seller 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 Seller to be
acquired as a result of the Merger, Seller 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 Seller 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 Seller 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,
Seller or the Bank or any business combination with Seller or the
Bank other than as contemplated by this Agreement. Seller shall
instruct each officer, director, agent, or affiliate of it or the
Bank to refrain from doing any of the above, and Seller 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,
Seller; provided, however, that nothing contained in this section
shall be deemed to prohibit any officer or director of Seller or
the Bank from taking any action that, in the opinion of counsel to
Seller 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), Seller shall deliver to Hibernia a letter
identifying all persons whom it believes to be "affiliates" of
Seller for purposes of Rule 145(c) or Rule 144 (as applicable)
under the 1933 Act ("Affiliates"). Seller 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 Seller 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, Seller 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 if so requested by Hibernia;
provided, however, that Seller acknowledges and agrees that the
determination as to when and if the Bank and HNB shall be merged
shall be solely within Hibernia's discretion.
9.11. Adoption of Accounting Policies. As soon as
practicable 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), Seller 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 Seller 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 Seller
herein.
9.12. Indemnification of Directors and Officers of
Seller 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 Seller 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 Seller 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 Seller 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 million and Hibernia
shall have no responsibility to any Indemnified person for the
manner in which such sum is allocated among that group (but nothing
in this subsection is intended to prohibit the Indemnified Persons
from seeking reallocation among themselves); (ii) a director or
officer who would otherwise be an Indemnified Person under this
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 million 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
Securities Exchange Act of 1934, as amended, or the rules and
regulations promulgated thereunder, so as to continue the
availability of Rule 144 of the Securities Act of 1933 for sales of
Hibernia Common Stock. In the event of any proposed sale by an
former shareholder of Seller who receives shares of Hibernia Common
Stock in the Merger, Hibernia agrees to use its best efforts to
cooperate with such shareholder so as to enable such sale to be
made in accordance with Rule 145, the requirements of Hibernia's
transfer agent, and the reasonable requirements of any broker
through such 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 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) Seller shall endeavor to have its Affiliates execute
a written agreement in substantially the form of Exhibit 9.7
hereto; provided, however, that Seller shall have no such
obligation prior to the receipt by the Board of Directors of Seller
of the Fairness Opinion; and
(d) Seller shall endeavor to have each of the directors
of Seller and the Bank execute a Lock-Up and Non-Competition
Agreement in substantially the form of Exhibit 10(d) hereto;
provided, however, that Seller shall have no such obligation prior
to the receipt by the Board of Directors of Seller 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. For a period of
five years after the date hereof, Hibernia and Seller agree, on
behalf of themselves, their respective officers, directors,
employees, representatives and agents, that they will not use any
information obtained pursuant to due diligence investigations for
any purpose unrelated to the consummation of the transactions
contemplated by this Agreement, and, if the Merger is not
consummated, will hold all such information and documents in
confidence unless and until such time as such information or
documents otherwise become publicly available or as it is advised
by counsel that any such information or document is required by law
to be disclosed, in which event the party required to make such
disclosure shall advise and consult with the other party reasonably
in advance of such disclosure regarding the information proposed to
be disclosed. In the event of the termination of this Agreement,
Hibernia and Seller shall, promptly upon request by the other
party, either destroy or return any documents so obtained. The
parties hereto expressly acknowledge and agree that the terms of
this Section 11.1 shall supersede any prior agreements relating to
the confidentiality of information received by the parties hereto
from each other.
11.2. Hold Harmless. Hibernia will indemnify and hold
harmless Seller, each of its directors and officers and each
person, if any who controls Seller 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 Seller 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; provided, however, that if counsel for such
indemnified party provides a written opinion to Hibernia certifying
that there exists a conflict of interest between Hibernia or HNB
and such indemnified party, such indemnified party shall be
entitled to conduct his defense using counsel of his own choosing
at Hibernia's expense.
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 Seller and
exercise and perfection of dissenters' rights pursuant to Section
12: 131 of the LBCL by holders of Seller Common Stock holding in
the aggregate no more than 10% of the Seller 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 of the Merger and the Comptroller of the Bank Merger and any
and all other transactions contemplated hereby.
12.3. Other Approvals. Procurement of all other
consents and approvals and satisfaction of all other requirements
prescribed by law that are necessary to the consummation of the
transactions contemplated by this Agreement.
12.4. No Restraining Action. No litigation or
proceeding initiated by any governmental authority shall be pending
before any court or agency that shall present a claim to restrain,
prohibit or invalidate the transactions contemplated hereby and
neither Hibernia nor Seller shall be prohibited by any order of any
court or other governmental authority from consummating the
transactions provided for in this Agreement.
12.5. Opinion of Hibernia Counsel. Seller and its
directors shall have received an opinion, dated the Closing Date,
of counsel for Hibernia, in form and substance satisfactory to
Seller, as to such matters as Seller may reasonably request with
respect to the transactions contemplated hereby.
12.6. Opinion of Seller Counsel. Hibernia, its
directors and its officers who sign the Registration Statement
shall have received an opinion, dated the Closing Date, of Gerrish
& McCreary, P.C., for Seller, in form and substance satisfactory to
Hibernia, which shall cover such matters as Hibernia may reasonably
request with respect to the transactions contemplated hereby.
12.7. Representations, Warranties and Agreements of
Seller. Each of the representations, warranties, and agreements of
Seller 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 Seller, dated the Closing Date, to such effect;
Seller 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.
Seller shall have furnished Hibernia with such further documents or
other materials as Hibernia shall have reasonably requested in
connection with the transactions contemplated hereby.
12.8. Representations, Warranties and Agreements of
Hibernia. Each of the representations, warranties and agreements
of Hibernia contained herein in all material respects shall be true
on, or complied with by, the Closing Date as if made on such date
(or the date when made in the case of any representations or
warranty which specifically relates to an earlier date) and Seller
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 Seller such other
certificates as Seller 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 Seller with such further documents or other materials as
Seller shall have reasonably requested in connection with the
transactions contemplated hereby.
12.9. Effective Registration Statement. The
Registration Statement shall have become effective and no stop
order suspending the effectiveness of the Registration Statement
shall have been issued and no proceedings for that purpose shall
have been initiated or threatened by the SEC and Seller shall have
received a certificate to such effect from the officer of Hibernia
designated as its agent for service on the cover page of the
Registration Statement (which certificate may be to the knowledge
of such officer).
12.10. Blue Sky. Hibernia shall have received all state
securities laws and "blue sky" permits and other authorizations
necessary to consummate the transactions contemplated hereby.
12.11. Tax Opinion. Hibernia and Seller shall have
received an opinion of a nationally recognized public accounting
firm satisfactory to Seller, at no cost to Seller, which opinion
shall be satisfactory in form and substance to Hibernia and Seller,
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 Seller Common Stock to the extent exchanged for
Hibernia Common Stock will not give rise to gain or loss to the
shareholders of Seller with respect to such exchange and that the
Louisiana income tax treatment to the shareholders of Seller will
be substantially the same as the federal income tax treatment to
the shareholders of Seller.
12.12. Listing on New York Stock Exchange. The shares
of Hibernia Common Stock issuable to the holders of Seller Common
Stock in the Merger shall have been approved for listing on the New
York Stock Exchange, Inc. on or before the Closing Date, subject to
official notice of issuance.
12.13. Fairness Opinion. Seller shall have received a
letter from Southard Financial of Memphis, Tennessee 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.
12.14 Due Diligence by Hibernia. Hibernia shall have
completed its due diligence review of the Seller and Bank and shall
have discovered no facts or circumstances that it, in good faith,
believes materially and adversely alters the financial condition or
operations of the Seller or the Bank from the financial condition
or operations of the Seller or the Bank as Hibernia believed them
to be on the date of this Agreement; provided, however, that
Hibernia shall not have the right to terminate this Agreement
pursuant to this Section 12.14 unless it shall have so notified
Seller in writing within 10 business days after the completion of
its due diligence review. Hibernia's due diligence review shall be
deemed to have been completed 60 days after the date of this
Agreement.
12.15 Due Diligence Review by Seller. Seller shall have
completed its due diligence review of Hibernia and shall have
discovered no facts or circumstances that it, in good faith,
believes materially and adversely alters the financial condition or
operations of Hibernia from the financial condition or operations
of Hibernia as Seller believe them to be on the date of this
Agreement; provided, however, that Seller shall not have the right
to terminate this Agreement pursuant to this Section 12.15 unless
it shall have so notified Hibernia in writing within 10 business
days after completion of its due diligence review. Seller's due
diligence review shall be deemed to have been completed 60 days
after the date of this Agreement.
12.16 Employment Contracts. Employment contracts shall
have been offered by Hibernia or HNB to Messrs. James Lynn
Bordelon, Michael J. Thevenot, Steve Normand and John Boatner
providing for compensation and terms in accordance with Schedule
12.16 attached hereto and made a part hereof.
12.17. Assertion of Conditions. A failure to satisfy
any of the requirements set forth in Section 12.5, 12.8, 12.12,
12.13, 12.15 or 12.16 shall only constitute conditions to
consummation of the Merger if asserted by Seller and a failure to
satisfy any of the requirements set forth in Section 12.6, 12.7 or
12.14 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 March 31, 1996, or (ii) any condition to Closing
cannot be satisfied by March 31, 1996 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 Seller.
13.6. Dissenters. By Hibernia, if holders of more than
10 percent of the outstanding Seller Common Stock exercise and
perfect statutory rights of dissent and appraisal pursuant to Part
XIII of the LBCL.
13.7. Material Adverse Change. By Seller, if a material
adverse change as described in Section 8.7 of this Agreement
occurs, and by Hibernia, if a material adverse change as described
in Section 7.7 hereof occurs, after the date hereof and prior to
the Closing.
13.8. Use of Pooling-of-Interests Accounting Treatment.
By Hibernia, in the event it shall determine that the facts and
circumstances surrounding the Merger prohibit or materially
jeopardize the treatment of the Merger as a pooling-of-interests
for accounting purposes.
13.9. Fairness Opinion. By Seller, if it shall not have
received a letter from Southard Financial, Memphis, Tennessee,
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) March 31, 1996; (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 other 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"). The parties hereto acknowledge and agree,
however, that the closing shall not occur prior to December 20,
1995. 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 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 Seller who
are the intended beneficiaries of such provisions.
15.3. The provisions of Section 11 and liabilities for
a breach of the provisions of Sections 9.2 or 9.12 shall survive
the termination of this Agreement if this Agreement terminates
without the Closing or the Merger having occurred, in which event
liability for a breach of Section 9.2 or Section 9.12 shall survive
the termination of the Agreement for a period of 180 days following
the date on which the Agreement terminates. Nevertheless, no party
to this Agreement shall have a legal right to redress or cause of
action for a breach of Section 9.2 except in those circumstances in
which such breach directly resulted in the termination of the
Agreement.
15.4. In consideration of the mutual benefits and
agreements contained in this Agreement, each of the parties hereto,
on behalf of itself and its successors and assigns, hereby
irrevocably waives any right or cause of action which otherwise
would survive in the absence of this Section 15.
16. Amendment; Waivers. To the extent permitted under
applicable law, prior to the Closing Date any provision of this
Agreement may be amended or modified at any time, either before or
after its approval by the shareholders of the parties hereto, (i)
by an agreement in writing among the parties hereto approved by
their respective Boards of Directors and executed in the same
manner as this Agreement, and (ii) as provided in 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 Seller) 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 Seller shall change the number of
shares of Hibernia Common Stock into which shares of Seller 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 each party
hereto at the address of such party set forth in the preamble to
this Agreement and shall be deemed to have been given as of the
date so personally delivered or mailed. A copy of all notices or
other communications directed to Hibernia shall be sent to:
HNB
313 Carondelet Street
New Orleans, Louisiana 70130
Attention: Corporate Law Division
and a copy of all notices or other communications directed to
Seller shall be sent to:
John A. Boatner, Jr.
Bunkie Bancshares, Inc.
122 West Church Street
Bunkie, Louisiana 71322-1717
with a copy to:
Jeffrey C. Gerrish
Gerrish & McCreary, P.C.
700 Colonial Road, Suite 200
Memphis, Tennessee 38117
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
Seller
By:
John A. Boatner
Chairman of the Board
Attest:
Frank L. Mulhearn
Secretary
Exhibit 1
MERGER AGREEMENT
This Merger Agreement is made and entered into this __ day of
_______, 199_ by and between Hibernia Corporation, a Louisiana
corporation ("Hibernia") and Bunkie Bancshares, Inc., a Louisiana
corporation ("Seller").
W I T N E S S E T H:
WHEREAS, Hibernia and Seller (collectively, the
"Corporations") and their respective Boards of Directors deem it
advisable and in the best interests of the Corporations that Seller
be merged into Hibernia (the "Merger") pursuant to the provisions
of the Louisiana Business Corporation Law ("LBCL") and upon the
terms and subject to the conditions hereinafter set forth and in
the Plan (as defined herein); and
WHEREAS, the Corporations have entered into an Agreement and
Plan of Merger dated as of September 7, 1995 (the "Plan") which
sets forth certain terms and conditions relating to the Merger.
NOW, THEREFORE, in consideration of the mutual covenants and
agreements set forth herein and in the Plan, the receipt and
sufficiency of which are hereby acknowledged, the parties hereto
agree as follows.
ARTICLE I
The Merger
Upon the terms and subject to the conditions set forth herein,
on the Effective Date (as defined below), Seller shall be merged
into Hibernia and the separate existence of Seller shall cease.
ARTICLE II
Effective Date and Time
The Merger shall be effective at 12:01 a.m. on the date
immediately following the day when this Merger Agreement, having
been certified, signed and acknowledged in accordance with the
LBCL, is filed in the office of the Secretary of State of the State
of Louisiana (the "Secretary of State") or such other date as may
be specified by the parties consistent with the provisions of the
LBCL (such time and date being herein referred to as the "Effective
Time" and the "Effective Date" respectively).
ARTICLE III
Conversion and Cancellation of Shares
Except for shares as to which dissenters' rights have been
perfected and not withdrawn or otherwise forfeited under Section
131 of the LBCL, on the Effective Date each issued and outstanding
share of Seller Common Stock, par value $20.00 ("Seller Stock")
shall be exchanged for and converted into the number of shares of
Hibernia Class A Common Stock, no par value ("Hibernia Stock")
resulting from application of the following formula: 1,874,760
divided by 11,006 (the number of issued and outstanding shares of
Seller Stock as of the Effective Date). The exchange of
certificates representing Hibernia Common Stock for certificates
formerly representing Seller Stock shall be effected as provided in
the Plan. No fractional shares of Hibernia Stock or script
certificates representing such fractional shares will be issued to
any holder of Seller Stock. Shareholders of Seller otherwise
entitled to receive fractional shares shall be entitled to cash as
provided in the Plan, without interest.
ARTICLE IV
Effect of the Merger
The Merger shall have the effects set forth in Section 115 of
the LBCL.
ARTICLE V
Filing of Merger Agreement
If this Merger Agreement is approved by the shareholders of
Seller as provided in the Plan, then the fact of such approval
shall be certified hereon by the secretary or assistant secretary
of Seller, and this Merger Agreement, as approved and certified,
shall be signed and acknowledged by the president of each of the
Corporations. Thereafter, a multiple original of this Merger
Agreement, so certified signed and acknowledged, shall be delivered
to the Secretary of State for filing and recordation in the manner
required by law; and thereafter, as soon as practicable )(but not
later than the time required by law), a copy of the Certificate of
Merger issued by the Secretary of State shall be filed for record
in the office of the recorder of mortgages for the parishes of
Orleans and Avoyelles and shall also be recorded in the conveyance
records for the parishes of Orleans and Avoyelles and any other
parish in which any of the Corporations owns real property on the
Effective Date.
ARTICLE VI
Miscellaneous
The obligations of the Corporations to effect the Merger shall
be subject to all of the terms and conditions of the Plan. At any
time prior to the Effective Date, this Merger Agreement may be
terminated pursuant to the terms and provisions of the Plan.
IN WITNESS WHEREOF, this Merger Agreement has been approved by
the Boards of Directors of each of the Corporations, effective as
of the date first above written.
CERTIFICATE OF THE SECRETARY
OF HIBERNIA CORPORATION
I hereby certify that I am the duly elected Secretary of
Hibernia Corporation, a Louisiana corporation, presently serving in
such capacity and that, pursuant to Section 112E of the LBCL,
approval of the Merger Agreement by the shareholders of Hibernia
Corporation is not required.
Certificate dated ___________ __, 199_.
____________________________
Patricia C. Meringer
Secretary
CERTIFICATE OF THE SECRETARY
OF BUNKIE BANCSHARES, INC.
I hereby certify that I am the duly elected Secretary of
Seller, a Louisiana corporation, presently serving in such capacity
and that the foregoing Merger Agreement was, in the manner required
by the LBCL, duly approved, without alteration or amendment, by the
shareholders of Seller, at a meeting duly held pursuant to notice
on ______ __ , 199_, at which meeting a quorum was present and
acting throughout by a vote of _____ shares "for" to ______ shares
"against or not voting.
Certificate dated ___________ __, 199_.
____________________________
Secretary
EXECUTION BY CORPORATIONS
In consideration of the approval of this Merger Agreement by
the shareholders of Seller and the fact that no such approval is
required by the shareholders of Hibernia Corporation, both as
certified above, this Merger Agreement is executed by such
corporations, acting through their respective Presidents, this ___
day of _________, 199_.
HIBERNIA CORPORATION
By: __________________________
Stephen A. Hansel
President and Chief Executive
Officer
ATTEST:
_______________________
Patricia C. Meringer
Secretary
Seller
By: ___________________________
James Lynn Bordelon
President
ATTEST:
__________________________
Frank L. Mulhearn
Secretary
ACKNOWLEDGEMENT
HIBERNIA CORPORATION
STATE OF LOUISIANA
PARISH OF ORLEANS
BEFORE ME, the undersigned Notary Public, on this ___ day
of __________, 199_, in the presence of the undersigned competent
witnesses, personally came and appeared Stephen A. Hansel, who,
being duly sworn, declared and acknowledged before me that he is
the President of Hibernia Corporation and that in such capacity he
was duly authorized to and did execute the foregoing Merger
Agreement on behalf of such Corporation, for the purposes therein
expressed,l and as his and such Corporation's free act and deed.
WITNESSES:
_____________________________
______________________________
_____________________________________
NOTARY PUBLIC
ACKNOWLEDGEMENT
Seller
STATE OF LOUISIANA
PARISH OF ORLEANS
BEFORE ME, the undersigned Notary Public, on this ___ day
of __________, 199_, in the presence of the undersigned competent
witnesses, personally came and appeared James Lynn Bordelon, who,
being duly sworn, declared and acknowledged before me that he is
the President of Seller and that in such capacity he was duly
authorized to and did execute the foregoing Merger Agreement on
behalf of such Corporation, for the purposes therein expressed, and
as his and such Corporation's free act and deed.
WITNESSES:
_____________________________
______________________________
_____________________________________
NOTARY PUBLIC
Exhibit 9.7
[date]
Hibernia Corporation
313 Carondelet Street
New Orleans, Louisiana 70130
Gentlemen:
This letter agreement is given in connection with the closing
of the merger (the "Merger") of Bunkie Bancshares, Inc. ("Seller")
and Hibernia Corporation ("Hibernia"). I am aware and acknowledge
that, as a member of the Board of Directors or an executive officer
or the beneficial owner of a substantial amount of the outstanding
common stock of Seller, I may be an "affiliate" of Seller as that
term is defined in the Securities Act of 1933 (the "Securities
Act") and the regulations thereunder.
I understand the resales or other dispositions of Hibernia's
Class A common stock, no par value ("Hibernia Common Stock")
acquired by me as a result of the Merger may be governed by Rules
144 and 145 of the Securities Act.
I further understand that, in order for the Merger to be
accounted for as a "pooling of interests", Accounting Principles
Board Opinion No. 16 requires that the Merger must represent a
sharing of rights and risks among the constituent shareholder
groups and that certain resales or other dispositions of the
Hibernia Common Stock to be acquired by me as a result of the
Merger may violate the "risk sharing" guidelines promulgated by the
Securities and Exchange Commission in Accounting Series Release No.
135.
On the basis of the foregoing, and in consideration of the
delivery to me of the Hibernia Common Stock into which my Seller
common stock will be converted, I agree that I will not, after the
date hereof, directly or indirectly, sell, transfer, pledge or
otherwise alienate or encumber any of the Hibernia Common Stock
held by me (except to the same extent as my stock in Seller may
have been pledged prior to the date on which the Agreement and Plan
of Merger was executed) (i) in violation of the Securities Act or
the rules or regulations promulgated thereunder, or (ii) until such
time as financial results covering at least 30 days of post-Merger
combined operations of Seller and Hibernia have been published.
________________________
EXHIBIT 9.12
JOINDER AGREEMENT
THIS AGREEMENT is made and executed as of the __ day of
________, 1995 between and among Hibernia Corporation, a Louisiana
corporation ("Hibernia") and the undersigned individual officer
and/or director ("Seller Officer") of Bunkie Bancshares, Inc., a
Louisiana corporation ("Seller"), or Bunkie Bank and Trust Company,
a Louisiana banking association (the "Bank").
RECITALS:
WHEREAS, Hibernia and Seller have entered into an Agreement
and Plan of Merger (the "Merger Agreement") pursuant to which
Seller will be merged into Hibernia on the terms and subject to the
conditions set forth in such Merger Agreement; and
WHEREAS, in consideration of the agreements made by [Name] in
connection with the Merger Agreement, Hibernia has agreed to
indemnify the Seller Officer under certain circumstances set forth
in the Merger Agreement; and
NOW, THEREFORE, in consideration of Hibernia's agreement to
indemnify the Seller Officer and the expenses and costs that may be
incurred by Hibernia in connection with such indemnification, the
Seller Officer hereby agrees as follows:
1. Assumption of and Cooperation in Defense.
1.1 Notice and Assumption of Defense. In the event a claim
arises for which indemnification is or may be sought by the Seller
Officer, the Seller Officer shall promptly notify Hibernia, in
writing at the address set forth in Section 3 hereof, of the
commencement of such legal action or existence of and facts
relating to such claim. Upon receipt of such notice, or at any
time thereafter, Hibernia shall be entitled to participate therein,
and, in its sole discretion, to assume the defense of such claim,
with counsel of its choice subject to the reasonable approval of
the Seller Officer and to consider and decide on any proposed
settlement subject to the reasonable approval of the Seller
Officer. In any and all events, Hibernia shall have the right to
reasonable control over the nature and extent of expenses incurred
in connection with such claim(s). Hibernia shall notify the Seller
Officer of its assumption of the defense of such claim, and, after
such notice from Hibernia to the Seller Officer, Hibernia shall not
be liable to the Seller Officer for indemnification under Section
9.12 of the Merger Agreement for any legal expenses of other
counsel or any other expenses of defense subsequently incurred by
such indemnified party; provided, however, that if counsel for such
indemnified party provides a written opinion to Hibernia certifying
that there exists a conflict of interest between Hibernia or HNB
and such indemnified party, such indemnified party shall be
entitled to conduct his defense using counsel of his own choosing
at Hibernia's expense.
1.2 Cooperation in Defense. The Seller Officer agrees to
cooperate in the defense of any action for which indemnification is
sought under this Agreement or under Section 11.2 of the Merger
Agreement. Such cooperation shall include, but not be limited to,
providing Hibernia and its counsel copies of any and all relevant
documents relating to the claim, consulting with Hibernia and its
counsel with regard to the claim, providing testimony, either in
deposition or at trial or both, regarding the facts relating to the
claim , making himself available at reasonable times for
consultation, testimony and fact finding and otherwise furnishing
such information to Hibernia and its counsel as the Seller Officer
would provide to his own counsel in the event he were defending the
action himself. Except as expressly permitted by Hibernia, the
Seller Officer shall not object to the production or use of any
documents heretofore prepared by or of information provided to
Hibernia legal counsel on the basis of any claim of privilege of
such Seller Officer; provided, however, that Hibernia agrees that
it will not, without the consent of the Seller Officer, waive any
applicable privilege of the Seller Officer. Such cooperation shall
be provided regardless whether Hibernia assumes the defense of the
action.
2. Duplication of Payment; Limitations; Presumptions.
2.1 No Duplication of Payments. Hibernia shall not be liable
under this Agreement to make any payment in connection with any
claim against the Seller Officer to the extent the Seller Officer
has otherwise actually received payment (under any insurance
policy, certificate of incorporation, bylaw provision or otherwise)
of amounts otherwise indemnifiable hereunder.
2.2 Limitation on Liability. The Seller Officer hereby
expressly acknowledges and agrees that Hibernia shall not be liable
in the aggregate for more than $5 million in connection with its
obligations under Section 9.12 of the Merger Agreement. The Seller
Officer further acknowledges and agrees that he shall have no claim
against Hibernia for any amount that, when aggregated with amounts
paid by Hibernia to other Seller Officers, exceeds $5 million. Any
claim for reallocation of the amounts paid by Hibernia among Seller
Officers shall be made against the other Seller Officer(s) involved
and Hibernia shall not be liable in any way for the allocation of
the such amounts among Seller Officers.
2.2 No Presumption. For purposes of this Agreement, the
termination of any claim, action, suit or proceeding by judgment,
order, settlement (whether with or without court approval) shall
not of itself create a presumption that the Seller Officer did or
did not meet any particular standard of conduct or have any
particular belief or that a court has determined that
indemnification is not permitted by applicable law.
3. 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, at the addresses listed below:
If to Hibernia:
Hibernia Corporation
313 Carondelet Street
New Orleans, Louisiana 70130
Attention: Corporate Law Department
If to the Seller Officer:
4. 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.
5. 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.
6. Amendment. This Agreement may only be amended by a written
instrument signed by both parties hereto.
IN WITNESS WHEREOF, the parties hereto have executed this
Agreement as of the day and year first above written.
HIBERNIA CORPORATION
BY: ______________________
James E. O'Brien
Executive Vice President
Attest:
________________________
Patricia C. Meringer
Secretary
Seller OFFICER
_________________________
Exhibit 10(d)
LOCK-UP AND NON-COMPETITION AGREEMENT
This Agreement is made and executed as of the ____ day of
________, 199_, by and between Hibernia Corporation ("Hibernia"),
a Louisiana corporation, and the undersigned individual ("Seller
Director"), who is a director and shareholder of Bunkie Bancshares,
Inc., a Louisiana corporation ("Seller").
Hibernia and Seller have entered into an Agreement and Plan of
Merger (the "Plan of Merger"), pursuant to which Seller and
Hibernia agree that Seller will merge with and into Hibernia, and
Hibernia shall be the surviving entity. In consideration of the
expenses that Hibernia will incur in connection with the
transactions contemplated by the Plan of Merger and in order to
preserve the value of the franchise to be purchased by Hibernia and
induce Hibernia to proceed to incur such expenses, the Seller
Director makes the following agreements in favor of Hibernia:
1. Undertakings of Seller Director.
1.1 The Seller Director agrees and undertakes to vote or
cause to be voted in favor of the approval of the Plan of Merger
all shares of common stock of Seller, $20.00 par value (the "Seller
Stock"), as to which he has voting power (other than shares held in
a fiduciary capacity), which amount of shares is shown on the
Schedule attached hereto and made a part hereof, at any meeting or
meetings (including any and all adjournments thereof) held on or
before March 31, 1996. The Seller Director shall have no such
obligation to vote in favor of the Agreement and Plan of Merger if
the Fairness Opinion referenced in Section 12.13 of the Plan of
Merger shall not have been received by Seller before such meeting
or, if received, shall have been withdrawn or if the Plan of Merger
shall be deemed to prohibit the Seller Director from voting in
favor of approval of the Plan of Merger if required by law in the
opinion of counsel for the Seller Director.
1.2 The Seller Director further agrees that he will not
transfer any of the shares of Seller Stock over which he has
dispositive power, which amount of shares is shown on the Schedule
attached hereto and made a part hereof, until the vote upon the
Plan of Merger by Seller's shareholders has been taken or until the
Plan of Merger has been terminated pursuant to the provisions
thereof, except (a) for transfers by operation of law, and (b) for
transfers in connection with which Hibernia has consented to the
transfer and the transferee shall agree in writing with Hibernia to
be bound by this Agreement as fully as the undersigned.
2. Agreement Not to Compete.
The Seller Director agrees that for a period of two years
following the Closing (as that term is defined in the Plan of
Merger), the Seller Director will not serve, other than with
respect to Hibernia or HNB, as an officer or director, or own 10%
or more of the outstanding equity securities, of any bank or
savings and loan association or holding company, or federal or
state chartered bank, savings bank, thrift, homestead association,
savings association, savings and loan association or cooperative
bank other than Hibernia and its subsidiaries and affiliates
("Financial Institution"), that has its principal business location
within Avoyelles Parish, Louisiana.
3. Miscellaneous.
3.1 The provisions of this Agreement shall be
enforceable through an action for damages at law or a suit for
specific performance or other appropriate extraordinary relief, the
Seller Director acknowledging that remedies at law for breach or
default might be or become inadequate.
3.2 The Seller Director acknowledges and agrees that
this Agreement is executed in connection with the sale of all of
the business of Seller. The Seller Director further acknowledges
and represents that the provisions of this Agreement will not work
a hardship on him and will not prevent him from engaging in his
occupation.
3.3 To the extent permitted under applicable law, any
provision of this Agreement may be amended or modified at any time,
either before or after its approval by an agreement in writing
among the parties hereto.
3.4 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.
3.5 This Agreement shall be governed by, and interpreted
in accordance with, the laws of the State of Louisiana applicable
to agreement made and entirely to be performed within such State,
except as federal law may be applicable.
3.6 The Seller Director may not assign any of his rights
or obligations under this Agreement to any other person.
3.7 This Agreement supersedes any and all oral or
written agreements and understandings heretofore made relating to
the subject matter hereof and contains the entire agreement of the
parties relating to the subject matter hereof. The terms and
conditions of this Agreement shall inure to the benefit of and be
binding upon the parties hereto, and their respective successors,
any rights, remedies, obligation or liabilities under or by reason
of this Agreement except as expressly provided herein.
3.8 In the event this Agreement is executed prior to the
Effective Date of the Merger, it shall terminate in accordance with
the provisions of Section 13 of the Agreement and Plan of Merger.
IN WITNESS WHEREOF, the parties have signed this Agreement
effective as of the date first set forth above.
HIBERNIA CORPORATION
BY: _____________________________
James E. O'Brien
Executive Vice President
Seller DIRECTOR
______________________________
<PAGE>
FAIRNESS OPINION
MERGER BY AND BETWEEN
HIBERNIA CORPORATION
AND
BUNKIE BANCSHARES, INC.
As of September 30, 1995
Report Dated
November 15, 1995
<PAGE>
November 15, 1995
Board of Directors
Bunkie Bancshares, Inc.
Bunkie, Louisiana
RE: Fairness Opinion Relative to Pending Agreement of Bunkie
Bancshares, Inc., Bunkie, Louisiana, to Merge with and into
Hibernia Corporation, New Orleans, Louisiana
Gentlemen:
The Board of Directors of Bunkie Bancshares, Inc. ("Bunkie") retained Southard
Financial, in its capacity as a financial valuation and consulting firm, to
render its opinion of the fairness, from a financial viewpoint, of the
acquisition of Bunkie by Hibernia Corporation ("Hibernia"). Southard Financial
and its principals have no past, present, or future contemplated financial,
equity, or other interest in either Bunkie or Hibernia. This opinion is issued
based upon financial data as of September 30, 1995.
Approach to Assignment
The approach to this assignment was to consider the following factors:
. A review of the financial performance and position of Bunkie and the
value of its common stock;
. A review of the financial performance and position of Hibernia and
the value of its common stock;
. A review of recent Bank merger transactions;
. A review of the current and historical market prices of bank holding
companies in Louisiana and surrounding states;
. A review of the investment characteristics of the common stock of
Bunkie and Hibernia;
. A review of the Agreement and Plan of Merger between Hibernia and
Bunkie, dated September 7, 1995;
. An evaluation of the impact of the merger on the expected return to
the current shareholders of Bunkie; and,
. An evaluation of other factors as were considered necessary to
render this opinion.
<PAGE>
It is Southard Financial's understanding that the merger and resulting exchange
of the stock of Hibernia for the outstanding common stock of Bunkie constitutes
a non-taxable exchange for federal income tax purposes.
DUE DILIGENCE REVIEW PROCESS
In performing this assignment, Southard Financial reviewed the documents
specifically outlined in Exhibit 1 pertaining to Bunkie and in Exhibit 2
pertaining to Hibernia.
Review of Bunkie Bancshares, Inc.
Southard Financial visited with the management of Bunkie in Bunkie,
Louisiana. Discussions included questions regarding the current and historical
financial position and performance of Bunkie, its outlook for the future, and
other pertinent factors.
Review of Hibernia Corporation
Southard Financial visited with the management of Hibernia in New Orleans,
Louisiana. Discussions included questions regarding the current and historical
financial position and performance of Hibernia and its operating subsidiaries,
its outlook for the future, and other pertinent factors.
Merger Documentation
Southard Financial reviewed the Agreement and Plan of Merger Between Hibernia
and Bunkie, dated September 7, 1995. Appropriate aspects of this agreement were
discussed with management and with legal counsel for Bunkie. (See Exhibit 3,
Terms of the Agreement and Plan of Merger.)
Southard Financial did not independently verify the information reviewed, but
relied on such information as being complete and accurate in all material
respects. Southard Financial did not make any independent evaluation of the
assets of Hibernia or Bunkie, but reviewed data supplied by the management of
both institutions.
<PAGE>
MAJOR CONSIDERATIONS
Numerous factors were considered in the overall review of the proposed merger.
The review process included considerations regarding Bunkie, Hibernia, and the
proposed merger. The major considerations are as follows:
Bunkie Bancshares, Inc.
. Historical earnings;
. Historical dividend payments;
. Outlook for future performance, earnings, and dividends;
. Economic conditions and outlook in Bunkie's market;
. The competitive environment in Bunkie's market;
. Comparisons with peer banks;
. Potential risks in the loan and securities portfolios;
. Recent minority stock transactions in Bunkie's common stock; and,
. Other such factors as were deemed appropriate in rendering this opinion.
Hibernia Corporation
. Historical earnings;
. Historical dividend payments;
. Outlook for future performance, earnings, and dividends;
. Economic conditions and outlook in Hibernia's market;
. The competitive environment in Hibernia's market;
. Comparisons with peer banks;
. Potential risks in the loan and securities portfolios;
. Recent minority stock transactions in Hibernia's common stock; and,
. Other such factors as were deemed appropriate in rendering this opinion.
Common Factors
. Historical and current bank merger pricing; and,
. Current market prices for minority blocks of common stocks of regional
bank holding companies in Louisiana and surrounding states.
<PAGE>
The Proposed Merger
. The merger agreement and its terms;
. The specific pricing of the merger;
. Adequacy of the consideration paid to the shareholders of Bunkie;
. The assumption that the tax opinion regarding the tax-free nature of the
exchange will be upheld;
. The amount of debt and goodwill on the balance sheet of Hibernia and the
impact of the merger of Bunkie on Hibernia's capital and liquidity
positions;
. The historical dividend payments of Hibernia and the likely impact on the
dividend income of the current shareholders of Bunkie (equivalency of cash
dividends);
. Pro-forma combined income statements for Hibernia post merger and the
expected returns to Bunkie shareholders (equivalency of earnings yield);
. The market for minority blocks of Hibernia common stock; and,
. Other such factors as deemed appropriate.
OVERVIEW OF FAIRNESS ANALYSIS
In connection with rendering its opinion, Southard Financial performed a
variety of financial analyses, which are summarized below. Southard Financial
believes that its analyses must be considered as a whole and that considering
only selected factors could create an incomplete view of the analyses and the
process underlying the opinion. The preparation of a fairness opinion is a
complex process involving subjective judgments and is not susceptible to
partial analyses. In its analyses, Southard Financial made numerous
assumptions, many of which are beyond the control of Bunkie and Hibernia.
Any estimates contained in the analyses prepared by Southard Financial are not
necessarily indicative of future results or values, which may vary
significantly from such estimates. Estimates of value of companies do not
purport to be appraisals or necessarily reflect the prices at which companies
or their securities may actually be sold. None of the analyses performed by
Southard Financial was assigned a greater significance than any other.
(More details on the analyses prepared by Southard Financial are contained in
Exhibits 3-7.)
Dividend Yield Analysis
In evaluating the impact of the proposed merger on the shareholders of Bunkie,
Southard Financial reviewed the dividend paying histories of Bunkie and
Hibernia. Based upon this review, it is reasonable to expect that the
shareholders of Bunkie, in total, will receive dividends near the level
currently paid by Bunkie, after the merger is completed (defined as post merger
dividends per share times the exchange ratio). This is predicated on the
assumption that Hibernia will continue per share dividends at or above current
levels (see Exhibit 4).
<PAGE>
Earnings Yield Analysis
In evaluating the impact of the proposed merger on the shareholders of Bunkie,
Southard Financial determined that, based upon the proposed exchange ratio, the
shareholders of Bunkie would have seen an increase in their share of earnings
(defined as post merger combined earnings per share times the exchange ratio),
had the merger been consummated by year-end 1994. The analysis also suggests
expected higher earnings yields for Bunkie shareholders in 1995 if
the merger is consummated (see Exhibit 4).
Book Value Analysis
In evaluating the impact of the proposed merger on the shareholders of Bunkie,
Southard Financial determined that the shareholders of Bunkie would have seen an
increase in the book value of their investment had the merger been consummated
prior to December 31, 1994, or prior to September 30, 1995.
Analysis of Alternatives
In evaluating the fairness of the proposed merger to the shareholders of Bunkie,
Southard Financial reviewed with management the terms of another
offer received for the purchase/merger of Bunkie. Further, Southard Financial
considered recent public market merger pricing information (see Exhibit 5).
Analysis of Market Transactions
Based upon the merger terms, Bunkie shareholders will receive 206% of
September 30, 1995 book value per share, 16.6 times reported 1994 earnings,
and 14.5 times estimated 1995 earnings. Based upon the review conducted by
Southard Financial, the pricing for Bunkie in the merger is within the range
of multiples seen in recent bank acquisitions (see Exhibit 5).
<PAGE>
Fundamental Analysis
Southard Financial reviewed the financial characteristics of Bunkie and Hibernia
with respect to profitability, capital ratios, liquidity, asset quality, and
other factors. Southard Financial compared Bunkie and Hibernia to a universe of
publicly traded banks and bank holding companies and to peer groups prepared by
the Federal Financial Institutions Examination Council (FFIEC). Southard
Financial found that the post-merger combined entity will have capital ratios
and profitability ratios near those of the public peer group and the FFIEC peer
group (predominantly non-publicly traded banks). (See Exhibits 6-7.)
Liquidity
Unlike Bunkie stock, Hibernia shares are traded on the New York Stock Exchange.
Further, except in the case of officers, directors, and certain principal
shareholders ("affiliates") of Bunkie, Hibernia shares received will be freely
tradeable with no restrictions.
Summary of Analyses
The summary set forth does not purport to be a complete description of the
analyses performed by Southard Financial. The analyses performed by Southard
Financial are not necessarily indicative of actual values, which may differ
significantly from those suggested by such analyses. Southard Financial did
not appraise any individual assets or liabilities of Bunkie or Hibernia.
Throughout the due diligence process, all information provided by Bunkie,
Hibernia, and third party sources, was relied upon by Southard Financial
without independent verification.
Based upon the analyses discussed above, and other analyses performed by
Southard Financial, the impact of the merger on the shareholders of Bunkie is
expected to be favorable.
<PAGE>
FAIRNESS OPINION
Based upon the analyses of the foregoing and such matters as were considered
relevant, it is the opinion of Southard Financial that the terms of the offer
for the acquisition of Bunkie Bancshares, Inc. by Hibernia Corporation pursuant
to the Agreement and Plan of Merger are fair, from a financial viewpoint, to the
shareholders of Bunkie Bancshares, Inc.
Thank you for this opportunity to be of service to the shareholders of Bunkie
Bancshares, Inc.
Sincerely yours,
SOUTHARD FINANCIAL
/s/ DAVID A. HARRIS, CFA, ASA
David A. Harris, CFA, ASA
/s/ DOUGLAS K. SOUTHARD, DBA, CFA, ASA
Douglas K. Southard, DBA, CFA, ASA
Attachments:
Exhibit 1: Bunkie Bancshares, Inc., Document Review List
Exhibit 2: Hibernia Corporation, Document Review List
Exhibit 3: Terms of the Agreement and Plan of Merger
Exhibit 4: Expected Impact of the Merger on the Shareholders of
Bunkie Bancshares, Inc.
Exhibit 5: Comparison of The Merger Pricing to Public Market Transactions
Exhibit 6: Overview of Bunkie Bancshares, Inc.
Exhibit 7: Overview of Hibernia Corporation
Exhibit 8: Qualifications of Southard Financial
<PAGE>
EXHIBIT 1
BUNKIE BANCSHARES, INC.
DOCUMENT REVIEW LIST
1. Consolidated Reports of Condition and Income ("Call Report") of Bunkie
Bank and Trust Company for the period ended September 30, 1995.
2. Uniform Bank Performance Report ("UBPR") of Bunkie Bank and Trust Company
for the periods ended June 30, 1995 and December 31, 1994.
3. Audited Consolidated Financial Statements of Bunkie Bancshares, Inc. and
Subsidiary for the periods ended December 31, 1993-94.
4. Audited Consolidated Financial Statements of Bunkie Bancshares, Inc. for
the periods ended December 31, 1989-92.
5. Compiled Parent Company Only Condensed Statement of Condition and
Comparative Statement of Income of Bunkie Bancshares, Inc. for the
periods ended December 31, 1992-94.
6. Compiled Consolidated Financial Statements of Bunkie Bancshares, Inc.
and Subsidiary for the periods ended September 30, 1994-95.
7. Shareholder list as of October 16, 1995.
8. Management's Analysis of Reserve for Loan Loss as of September 30, 1995.
9. Bunkie Bank and Trust Company Corporate Plan - 1995.
10. Bunkie Bank and Trust Company Security Inventory Report as of September
30, 1995.
11. Bunkie Bank and Trust Company Projected Statement of Income, based upon
actual results through October 31, 1995 and budgeted results for
November and December 1995.
12. Additional pertinent information deemed necessary to render this opinion.
<PAGE>
EXHIBIT 2
HIBERNIA CORPORATION
DOCUMENT REVIEW LIST
1. Annual Report (including auditor's reports) for the year ended December
31, 1994.
2. Securities and Exchange Commission Annual Report (Form 10-K) for the year
ended December 31, 1994.
3. Securities and Exchange Commission Quarterly Report (Form 10-Q) for the
quarters ended March 31, 1995, and June 30, 1995.
4. Research reports by Bear, Stearns & Co., Inc.; J. C. Bradford; First
Boston Corporation; Dean Witter; Lehman Brothers; Morgan Keegan & Co.;
Oppenheimer & Co., Inc.; and Gruntal & Co., Incorporated.
5. News Releases by Hibernia Corporation, dated June 15, June 30, July 13,
October 12, and October 17, 1995.
6. Articles of Incorporation of Hibernia Corporation.
7. By-Laws of Hibernia Corporation and Hibernia National Bank.
8. Articles of Association of Hibernia National Bank.
9. Additional pertinent information deemed necessary to render this
opinion.
<PAGE>
EXHIBIT 3
TERMS OF THE
AGREEMENT AND PLAN OF MERGER
The Agreement and Plan of Merger, dated as of September 7, 1995, by and between
Hibernia Corporation and Bunkie Bancshares, Inc. (the "Agreement") contains
several provisions. The following are key provisions of the Agreement:
In exchange for each share of Bunkie common stock outstanding, Bunkie
shareholders will receive 170.3398 newly issued shares of Hibernia common
stock.
The parties intend for the merger to qualify as a "reorganization" under
the Internal Revenue Code. Thus, the exchange of Bunkie stock for Hibernia
stock is expected to qualify as a tax-free exchange for Federal income tax
purposes. The exchange of cash for fractional shares may have tax
consequences.
No fractional shares will be issued by Hibernia. Bunkie shareholders who
would otherwise have been entitled to fractional shares (after aggregating
all shares owned) will be paid in cash based upon the market value of
Hibernia stock as defined above.
The Agreement may be terminated by either party:
- upon the mutual consent of the Board of Directors of each institution;
- upon a breach by either party of any representation, warranty or
covenant;
- if the merger is not consummated by March 31, 1996;
- upon the failure by either party to obtain regulatory or shareholder
approvals;
- if more than 10% of Bunkie's shareholders dissent to the merger;
- upon the happening of certain material events as noted in the
Agreement;
- if the pooling-of-interests accounting treatment is prohibited; or,
- if a fairness opinion is not issued.
The exchange ratio will be adjusted to reflect any reclassification,
recapitalization, split-up, combination or exchange of shares, or stock
dividend which might occur at Hibernia subsequent to the date of the
Agreement but prior to the consummation of the merger.
<PAGE>
EXHIBIT 4
EXPECTED IMPACT OF THE MERGER
ON THE SHAREHOLDERS OF BUNKIE BANCSHARES, INC.
The following is a summary of the various analyses undertaken in conjunction
with this fairness opinion. This summary is not intended to represent all
analyses performed by Southard Financial, but is presented here for the
convenience of Bunkie and its shareholders.
According to the Agreement, Bunkie shareholders would receive 170.3398
equivalent shares of Hibernia stock for each share of Bunkie stock exchanged
under the Agreement (1,874,760 Hibernia shares for 11,006 Bunkie shares).
Earnings Bunkie earned $109.06 per share in 1994. Hibernia earned $0.78 per
share in 1994. Had the merger been consummated prior to January 1,
1994, each former Bunkie share would have earned $132.87 in 1994
(Hibernia 1994 earnings of $0.78 per share times 170.3398 equivalent
shares). This represents an increase of 21.83% over what Bunkie
earned in 1994. Further, each former Bunkie share would have
earned about 28.6% more in the first nine months of 1995 ($99.36
per share for Bunkie versus $127.75 per share for Hibernia,
or $.075 times 170.3398 equivalent shares).
Based upon the analysts surveyed, Hibernia is expected to earn
$1.00 per share in 1995. Bunkie is projected to
earn about $125.00 per share in 1995. Assuming that the merger was
consummated prior to January 1, 1995, Bunkie shareholders would see
an increase of about 36.3% over what Bunkie is expected to earn
in 1995, absent the merger.
It is important to note that Hibernia recorded federal income
taxes at lower than statutory rates during 1993-95 due to
previously unrecognized deferred tax benefits. The deferred tax
benefits are expected to be fully recognized by the end of 1995,
and Hibernia's effective tax rate should approach statutory rates
in 1996. As a result, Southard Financial considered Hibernia's
estimated fully-tax equivalent earnings for 1995 and projected
fully-tax equivalent earnings for 1996. Based on this analysis,
the earnings impact of the merger is not expected to be adverse
to Bunkie shareholders.
Dividends Each share of Bunkie stock received $45.00 per share in dividends in
1994. Had the merger been consummated prior to January 1, 1994,
each former share of Bunkie stock would have received dividends of
$32.36 in 1994 (Hibernia 1994 dividends of $0.19 per share times
170.3398 equivalent shares). This represents about 28.1% less
than the dividends paid to Bunkie shareholders in 1994.
Based upon Hibernia's current dividend rate of $0.28 per share
and Bunkie's rate of $50.00 per share, dividends to Bunkie
shareholders would decrease by 4.6% after the merger.
Book Value Reported book value of Bunkie was $761.93 per share at December 31,
1994. Reported book value of Hibernia at December 31, 1994 was
$5.12 per share. Had the merger been consummated prior to December
31, 1994, each former Bunkie stock would have book value of $872.14
(Hibernia book value of $5.12 per share times 170.3398 equivalent
shares). This represents 114.5% of Bunkie book value at December 31,
1994. As of September 30, 1995, Bunkie shareholders would have
seen an increase of about 11.1% in their book value ($879.76 per
share for Bunkie versus $5.74 per share for Hibernia times 170.3398
equivalent shares).
Liquidity Unlike Bunkie stock, Hibernia shares are traded on the New York
Stock Exchange. Further, except in the case of officers,
directors, and certain principal shareholders ("affiliates") of
Bunkie, Hibernia shares received will be freely tradeable with
no restrictions.
<PAGE>
EXHIBIT 5
COMPARISON OF THE MERGER PRICING
TO PUBLIC MARKET TRANSACTIONS
Southard Financial compared the pricing terms of the Agreement to the pricing
of recent acquisitions of banks and bank holding companies across the United
States, and to the minority interest prices of publicly traded banks and bank
holding companies in the Southeast.
Pricing data for recent acquisitions of banks and bank holding companies
(nationwide and in Louisiana and in contiguous states) is summarized as
follows:
<TABLE>
<CAPTION>
Price/ Price/ Price/ Equity/
Transactions Announced in 1995(1) Earnings Book Val Assets ROAA Assets ROAE
--------------------------------- -------- -------- -------- -------- -------- --------
<S> <C> <C> <C> <C> <C> <C>
Nationwide (126) 18.3x 176.8% 16.1% 1.01% 9.29% 11.51%
LA, TX, MS, AR (22) 14.2 188.5 15.0 1.18 8.16 14.86
Louisiana (6) 14.7 223.8 18.1 1.54 8.04 17.15
Bunkie 14.5 205.7 18.9 1.30 9.03% 15.72
</TABLE>
(1) Through September 30; only includes transactions for Banks with assets
under $1 billion for which sufficient data was available
Based upon the current market price of Hibernia's stock of $10.625 per share,
the merger of Bunkie into Hibernia will take place at 16.60 times 1994 Bunkie
earnings, 14.48 times estimated 1995 Bunkie earnings, 205.7% of September
30, 1994 Bunkie book value. These multiples are within the range of recent
market multiples.
In determining the attractiveness of owning Hibernia stock, it is important to
examine Hibernia's recent pricing in comparison with recent pricing multiples
for publicly traded banks and bank holding companies. This pricing data is
presented below as of September 30, 1995.
<TABLE>
<CAPTION>
Price/ Price/ Current Current
Publicly Traded Banks(1) Earnings Book Val ROAE Yield
-------------------------- -------- -------- ------ -------
<S> <C> <C> <C> <C>
All Banks (198) 12.79x 165.5% 13.36% 3.14%
South Central Banks (48) 13.58 178.1 13.43 2.70
Louisiana Banks (2) 10.79 202.3 18.99 2.11
LA, TX, MS, AR (16) 12.46 181.6 14.81 2.50
Hibernia - 11/30 Price 10.63 185.1 18.92 2.64
Hibernia - 9/30 Price 10.13 176.4 18.83 2.77
</TABLE>
(1) As of September 30, 1995; subject to certain screens performed by
Southard Financial
Based upon an analysis of the data provided above, Hibernia's price/book value
multiple, return on average equity, and current dividend yield are all within
the range of other publicly traded banks in its region, while the
price/earnings multiple is near the low end of the range. The low price/
earnings multiple primarily reflects the non-taxable nature of Hibernia's
earnings over the 1993-95 period. If Hibernia's earnings are adjusted to a
fully-taxable equivalent basis, the price/earnings multiple is actually about
15.4 times estimated 1995 earnings and about 12.5 times eatimated 1996 earnings,
both of which are within or above the range.
<PAGE>
EXHIBIT 6
OVERVIEW OF BUNKIE BANCSHARES, INC.
Bunkie Bancshares, Inc. is a one-bank holding company, formed in January 1984,
whose primary asset is 100% of the common stock of Bunkie Bank and Trust
Company ("BB&T") in Avoyelles Parish, Louisiana.
Founded in 1953, Bunkie serves its market area with the main banking office
in Bunkie and two full-service banking offices; one in Cottonport and one
in Marksville, Louisiana. All of BB&T's banking offices are located in
Avoyelles Parish, which is centrally located in Louisiana approximately 30
miles south of Alexandria. The Bank is a major financial institution in its
marketplace.
BB&T had total assets of $105.4 million at September30, 1995, and equity of
9.03% of assets (slightly below peer averages). Total loans (net of unearned
income) were 44.37% of total assets at September 30, or well below peer
averages. The historical composition of BB&Ts balance sheet was fairly
consistent.
BB&T earned $1.43 million (1.58% of average assets) in 1992, $1.21 million
(1.31%) in 1993, $1.20 million (1.18%) in 1994, and $1.05 million (1.30%) in
the first nine months of 1995. Earnings are projected at $1.39 million in
1995, for an ROAA of about 1.30%. BB&T's loan loss provision was -$150
thousand in the first nine months of 199 (-0.19% of average assets), -$200.0
in 1994 (-0.20% of average assets), and $0 during 1990-93.
As of September 30, 1995, reported book value of the holding company was
$9,682,627 million, or $879.76 per share for the 11,006 shares outstanding.
Earnings were $99.36 per share in the first nine months of 1995,
$109.06 per share in 1994, and $109.59 per share in 1993. Earnings are
projected to be about $125.00 per share in 1995 based upon actual results
through October 31 and budgeted results in November and December 1995.
Dividends of $45.00 per share were paid in 1992, 1993, and 1994. The parent
company paid dividends of $30.00 per share through November 1, 1995, and
expects to pay another $20.00 per share in December 1995.
Senior management consists of John A. Boatner, Jr., 71, Chairman of the Board;
James Lynn Bordelon, 45, President; Michael L. Thevenot, 43, Senior Vice
President and Manager of the Cottonport Branch; and Steve J. Normand, 60,
Senior Vice President and Manager of the Marksville Branch. Each member of
the senior management team has over 20 years of service with the Bank and/or
in the banking industry.
Further details on Bunkie and BB&T are documented in Southard Financial's files.
<PAGE>
EXHIBIT 7
OVERVIEW OF HIBERNIA CORPORATION
Hibernia Corporation is a multi-bank holding company headquartered in New
Orleans, Louisiana. As of September 30, 1995, Hibernia Corporation was the
second largest bank holding company in Louisiana with assets of $7.0 billion
and deposits of $5.9 billion. Hibernia's only bank subsidiary was originally
chartered in 1870 as Hibernia Bank & Trust, and was rechartered in 1933 as
Hibernia National Bank ("HNB"). As of December 31, 1994, HNB had 143 branches
located throughout Louisiana. In addition to HNB, Hibernia owns Zachary Taylor
Life Insurance Company which is currently inactive. Hibernia's common stock
was initially listed on the New York Stock Exchange in 1989.
HNB offers a range of retail and commercial banking services and products,
including retail, commercial, international, mortgage and private banking;
treasury management; trust; brokerage; and alternative investments, including
mutual funds and annuities. The Bank also provides financial risk management
products and advisory services to its clients; and offers repurchase
agreements, bankers acceptances, Eurodollar access, and safekeeping of
securities.
In 1994, Hibernia completed mergers with six Louisiana financial institutions
as follows: Commercial Bancshares, Inc. and Bastrop National Bank on July 1,
1994; First Bancorp of Louisiana, Inc. and First Continental Bancshares, Inc.
on August 1, 1994; and Pioneer Bancshares Corporation and First State Bank and
Trust Company on December 1, 1994. American Bank of Norco was merged into
Hibernia on March 1, 1995, and STABA Bancshares, Inc. was merged into Hibernia
on May 1, 1995. Progressive Bancorporation, Inc. and Bank of St. John were
both merged into Hibernia on July 1, 1995. All of these mergers were accounted
for as pooling of interests transactions.
Effective April 1, 1995, Hibernia instituted an employee stock ownership plan
(ESOP). Hibernia shares were, and more will be, acquired by the ESOP in open
market purchases. Further, Hibernia has a 1987 Stock Option Plan, a Long-Term
Incentive Plan, and a 1993 Director's Stock Option Plan, under which a total of
5,683,746 shares were outstanding and 1,565,169 shares were exercisable at June
30, 1995.
Hibernia earned $0.57 per share in 1993, $0.78 per share in 1994, and $0.75 per
share in the first nine months of 1995. The consensus earnings estimate for
1995 is $1.00 per share, or about 30% above 1994 earnings. It is important
to note that Hibernia recorded federal income taxes at lower than statutory
rates during 1993-95 due to previously unrecognized deferred tax benefits. The
deferred tax benefits are expected to be fully recognized by the end of 1995,
and Hibernia's effective tax rate should approach statutory rates in 1996.
<PAGE>
EXHIBIT 7
OVERVIEW OF HIBERNIA CORPORATION
(Continued)
Return on average assets was 1.71% in the first nine months of 1995, 1.35%
in 1994, and 1.06% in 1993, while return on average equity was 18.83% in the
first nine months of 1995, 15.63% in 1994, and 13.33% in 1993. Dividends of
$0.19 per share in 1994 were well above 1993 dividends of $0.03 per share.
Hibernia paid dividends of $0.19 per share in the first nine months of 1995.
At September 30, 1995, the dividend yield was 2.77%.
Total shareholders' equity was 8.79% of total assets as of December 31, 1994
and 9.67% at September 30, 1995. Book value per share increased from $4.82 at
year-end 1993 to $5.12 at year-end 1994 and to $5.74 at September 30, 1995.
Loans represented 50.93% of total assets at year-end 1994 and 60.40% at
September 30, 1995. The quality of the loan portfolio improved in recent
years, as net charge-offs decreased from a high of 2.51% of average loans in
1991 to 0.22% in 1994, and to 0.06% in the first nine months of 1995.
In all, Hibernia is in good financial condition. More details on Hibernia are
contained in Southard Financial's file.
<PAGE>
EXHIBIT 8
QUALIFICATIONS OF SOUTHARD FINANCIAL
<PAGE>
AN OVERVIEW OF SOUTHARD FINANCIAL
BACKGROUND . Founded in 1987.
. Principals have combined business valuation experience of
approximately twenty years.
. Serves clients throughout the United States, with
concentration in the Southeast.
. Broad industry experience.
. Services provided for public and closely-held companies.
. Provides valuation services for over 100 ESOPs, making
Southard Financial one of the largest ESOP appraisers in
the United States.
PROFESSIONAL
CREDENTIALS . Southard Financial's principals, Douglas K. Southard and
David A. Harris, are senior members of the American
Society of Appraisers (ASA).
. Both principals of Southard Financial are Chartered
Financial Analysts (CFA).
. Both principals are current or former officers of the West
Tennessee Chapter of the ASA.
EDUCATIONAL
CREDENTIALS . Douglas Southard holds Doctor of Business Administration
and Master of Business Administration degrees from
Indiana University, with concentrations in finance,
economics, and quantitative analysis.
. David Harris holds the Master of Business Administration
degree from Memphis State University, with
concentrations in finance and business investments.
BUSINESS
ETHICS . Southard Financial and its principals adhere to the
ethical standards of the Institute of Chartered Financial
Analysts and the American Society of Appraisers.
. All reports conform to the Uniform Standards of
Professional Appraisal Practice.
. Southard Financial is committed to providing unbiased
opinions to be used for decision making.
. Fees for valuation services are not contingent upon the
conclusion of value or the completion of a transaction.
<PAGE>
BIOSKETCH
DOUGLAS K. SOUTHARD, DBA, CFA, ASA
EDUCATIONAL AND PROFESSIONAL CREDENTIALS
Doctor of Business Administration, 1981, Indiana University
Master of Business Administration, 1976, Indiana University
Bachelor of Arts, 1975, Rhodes College (formerly Southwestern at Memphis)
Chartered Financial Analyst, 1987, Institute of Chartered Financial
Analysts (now part of the Association for Investment Management and
Research)
Senior Member, 1987, American Society of Appraisers, Business Valuation
PROFESSIONAL BACKGROUND
Founder and Principal, Southard Financial, Memphis TN
Partner, Mercer Capital Management, Inc., Memphis TN (1984-87)
Consulting Associate, Mercer Capital Management, Inc., Memphis TN
(1983-84)
Principal, Douglas K. Southard, Financial Consultant, Memphis TN
(1982-83)
ACADEMIC POSITIONS HELD
Assistant Professor of Finance, Rhodes College, Memphis TN
Assistant Professor of Finance, Virginia Polytechnic Institute & State
Univ., Blacksburg VA
Lecture in Finance, Indiana University, Bloomington IN
RELATED EXPERIENCE
Frequent Speaker, professional organizations, business valuation topics
Expert Witness, business valuation, local, state and federal courts
Board of Directors, Management Computing Solutions, Inc., Memphis TN
Board of Directors, Columbian Rope Company, Auburn NY
Advisory Board, MicroAge, Memphis TN
Former Officer, West Tennessee Chapter, American Society of Appraisers
PUBLICATIONS
"Using the Capital Asset Pricing Model to Determine Capitalization
Rates: Adjusting for Differences in Financial Structure, " with Severin
C. Carlson, Business Valuation Review, June 1991
"Business Valuation Can Serve in Lifetime Planning, " with Z.C. Mercer,
Memphis Business Journal, April 1-5, 1985
"Valuation Process Holds Keys to Executive Wealth," with Z.C. Mercer,
Memphis Business Journal, March 25-29, 1985
"What IRA's Are Worth," with Z.C. Mercer, The Southern Banker, June 1984
<PAGE>
BIOSKETCH
DAVID A. HARRIS, CFA, ASA
EDUCATIONAL AND PROFESSIONAL CREDENTIALS
Master of Business Administration, 1982, Memphis State University
Bachelor of Arts, 1979, Colorado State University
Senior Member, 1990, American Society of Appraisers, Business Valuation
Chartered Financial Analyst, 1989, Institute of Chartered Financial
Analysts (now part of the Association for Investment Management and
Research)
PROFESSIONAL BACKGROUND
Principal, Southard Financial, Memphis TN
Associate, Mercer Capital Management, Inc., Memphis TN (1985-90)
Financial Analyst, Methodist Hospitals of Memphis, Inc. (1983-85)
Cost Analyst, Schering-Plough, Inc., Memphis TN (1982-83)
PROFESSIONAL/COMMUNITY SERVICE
President, West Tennessee Chapter, American Society of Appraisers
(1994-95)
Vice President, West Tennessee Chapter, American Society of Appraisers
(1993-94)
Board of Directors, Solomon Schechter Day School of Memphis, Inc.
(1993-94)
President, West Tennessee Chapter, American Society of Appraisers
(1990-91)
Vice President, Sea Isle Park Neighborhood Association, Memphis TN
(1992-95)
Board of Directors, Sea Isle Park Neighborhood Association, Memphis TN
(1990-95)
Business Liaison, Junior Achievement of Memphis TN (1984-85)
RELATED EXPERIENCE
Expert Witness, business valuation
Co-Author, "The Perils of Excess," with Z. C. Mercer, ABA Banking Journal,
October 1987
<PAGE>
SOUTHARD
FINANCIAL
SERVICES FOR COMMUNITY BANKS
Valuation Services
Minority Stock Appraisals
. ESOPs
. Dissenting Shareholders
. Insider Transactions
. Gift & Estate Taxes
. Charitable Gifts
. Private Placements/Offerings
. Other Purposes
Control Valuations
. Pricing Merger/Acquisition Candidates
. Negotiating Pricing/Terms
. Fairness Opinions for Buyers and Sellers
. Evaluation of Offers Received
Consulting Services
Economic Analysis
. Branch Feasibility Studies
. Holding Company Formations
. Expert Witness Testimony
Financial Analysis
. Long-range Financial Plans
. Evaluation of Financing Alternatives
