As filed with the Securities and Exchange Commission on February
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 72-0724532
(State or other (I.R.S. Employer
jurisdiction of incorporation Identification Number)
or organization)
Hibernia Corporation
313 Carondelet Street
New Orleans, Louisiana 70130
(504) 533-5552
(Address, including zip code, and telephone number,
including area code, of Registrant's principal
executive offices)
Gary L. Ryan, Esq.
Vice President and Associate Counsel
Hibernia Corporation
313 Carondelet Street
New Orleans, Louisiana 70130
(504) 533-5560
(Name, address, including zip code, and telephone
number,including area code, of agent for service)
Copies to:
Patricia C. Meringer, Esq.
Associate Counsel and Secretary
Hibernia Corporation
225 Baronne Street, 11th Floor
New Orleans, Louisiana 70112
(504) 533-2486
Virginia Boulet, Esq. Anthony J. Correro, III, Esq.
Phelps Dunbar, L.L.P. Correro, Fishman and Casteix, L.L.P.
30th Floor, 400 Poydras Street 201 St. Charles Avenue
New Orleans, Louisiana 70130-3245 New Orleans, Louisiana 70170
(504) 566-1311 (504) 586-5252
APPROXIMATE DATE OF COMMENCEMENT OF PROPOSED SALE TO THE PUBLIC:
As soon as practicable after the effective date of this
Registration Statement
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
Proposed Proposed
maximum maximum
Title of each offering aggregate
class of securities Amount price per offering Amount of
to be registered to be unit price registration
registered (1) (1) fee (1)
Class A Common Stock, 2,500,000 $3.08 $7,700,000 $2655.17
no par value shares
1) Based upon the book value of the Common Stock of STABA
Bancshares, Inc. on September 30, 1994 and estimated solely for the purpose
of calculating the registration fee in accordance with Rule
457(f)(2) under the Securities Act of 1933.
The Registrant hereby amends this Registration Statement on such
dateor dates as may be necessary to delay its effective date until the
Registrant shall file a further amendment which specifically states
that this Registration Statement shall thereafter become effective in
accordance with Section 8(a) of the Securities Act of 1933 or until the
Registration Statement shall become effective on such date as the Commission,
acting pursuant to said Section 8(a), may determine.
HIBERNIA CORPORATION
Cross Reference Sheet Pursuant to Item 501(b) of Regulation S-K
Item of Form S-4 Location or Caption in
Prospectus
1. Forepart of Registration Statement
and Outside Front Cover Page of
Prospectus. . . . . . . . . . . . . Introduction
2. Inside Front and Outside Back
Cover Pages of Prospectus . . . . . Table of Contents;
Available
Information
3. Risk Factors, Ratio of Earnings to
Fixed Charges, and Other
Information . . . . . . . . . . . . Summary; The Merger;
Meeting
Information
4. Terms of the Transaction. . . . . . Summary; The Merger
5. Pro Forma Financial Information . . Summary; Pro Forma
Financial
Information
6. Material Contacts with the Company
Being Acquired. . . . . . . . . . . Not Applicable
7. Additional Information Required for
Reoffering by Persons and Parties
Deemed to be Underwriters . . . . . Not Applicable
8. Interests of Named Experts and
Counsel . . . . . . . . . . . . . . Validity of Shares
9. Disclosure of Commission Position
on Indemnification for Securities Act
Liabilities . . . . . . . . . . . . . Not Applicable
10. Information with Respect to S-3
Registrants . . . . . . . . . . . . . Certain Information
About
Hibernia
11. Incorporation of Certain Information
by Reference. . . . . . . . . . . . . Available Information;
Incorporation by
Reference
12. Information With Respect to S-2 or
S-3 Registrants . . . . . . . . . . . Not Applicable
13. Incorporation of Certain Information
by Reference. . . . . . . . . . . . . Incorporation by
Reference
14. Information with Respect to
Registrants Other Than S-3 or S-2
Registrants . . . . . . . . . . . . . Not Applicable
15. Information With Respect to S-3
Companies . . . . . . . . . . . . . . Not Applicable
16. Information With Respect to S-2 or
S-3 Companies . . . . . . . . . . . . Not Applicable
17. Information With Respect to
Companies Other Than S-2 or S-3
Companies . . . . . . . . . . . . . . Available Information;
Incorporation by
Reference;
Certain Information
About STABA;
Financial Statements
of STABA
18. Information if Proxies, Consents or
Authorizations Are to be Solicited. . Incorporation by
Reference;
Summary; Meeting
Information;
The Merger; Rights of
Dissenting
Shareholders;
Beneficial
Ownership of
Directors,
Executive Officers and
Principal
Shareholders of STABA
19. Information if Proxies, Consents or
Authorizations Are Not to be
Solicited, or in an Exchange Offer. . Not Applicable
STABA BANCSHARES, INC.
400 MISSISSIPPI STREET
DONALDSONVILLE, LOUISIANA 70346
February __, 1995
Dear Shareholder:
You are cordially invited to attend a special meeting of
shareholders (the "Special Meeting") of STABA Bancshares, Inc.
("STABA") to be held at 5:00 p.m. on Tuesday, March 21, 1995 at the
main office of STABA at 400 Mississippi Street, Donaldsonville,
Louisiana 70346.
At the Special Meeting you will have an opportunity to
consider and vote upon the terms of an Agreement and Plan of Merger dated as
of November 4, 1994 (the "Agreement") providing for, among other
things, the merger of STABA with and into Hibernia Corporation
("Hibernia"), the parent company of Hibernia National Bank (the
"Merger"). Under the terms of the Agreement, the shareholders of
STABA will receive, in exchange for their shares of STABA, shares
of Hibernia Class A Common Stock, no par value ("Hibernia Common
Stock"). The total number of shares of Hibernia Common Stock to be
issued in connection with the Merger will be determined by dividing
$18 million by the average of the mean of the high and low prices
of one share of Hibernia Common Stock for the five business days
preceding the last trading day immediately prior to the date of the
closing of the Merger, as reported in The Wall Street Journal. The
receipt of shares of Hibernia Common Stock will generally be tax
free to the shareholders of STABA.
The enclosed Notice of Special Meeting of Shareholders
and Proxy Statement explain the Merger and provide specific information
about the Merger and the Special Meeting. Please carefully read
these materials and thoughtfully consider the information contained
in them. Your vote is of great importance, as the approval of
STABA shareholders is required to consummate the Merger.
Whether or not you plan to attend the Special Meeting,
you are urged to complete, date, sign and promptly return the enclosed
proxy card to assure that your shares will be voted at the Special
Meeting.
Your Board of Directors unanimously recommends that you
vote FOR the Merger.
Sincerely,
Kenneth A. Bailey
Chief Executive Officer
STABA BANCSHARES, INC.
NOTICE OF SPECIAL MEETING OF SHAREHOLDERS
TO BE HELD ON TUESDAY, MARCH 21, 1995
Notice is hereby given that a Special Meeting of
Shareholders (the "Special Meeting") of STABA Bancshares, Inc. ("STABA") has
been called by the Board of Directors and will be held at 5:00
p.m., on Tuesday, March 21, 1995 at the main office of STABA at 400
Mississippi Street, Donaldsonville, Louisiana 70346, to consider
and vote upon the following matters:
1. A proposal to approve an Agreement and Plan of Merger
dated as of November 4, 1994 (the "Agreement"), by and among Hibernia
Corporation ("Hibernia") and STABA, a copy of which is attached as
Appendix A to the accompanying Proxy Statement, and the
transactions contemplated thereby. The Agreement provides that
STABA will merge with and into Hibernia, the parent company of
Hibernia National Bank, and the outstanding shares of common stock
of STABA will be converted into shares of Class A Common Stock of
Hibernia valued at $18 million, as more fully described in the
accompanying Proxy Statement.
2. The transaction of such other business as may
properly come before the meeting or any adjournments or postponements thereof.
The Board of Directors is not aware of any other business
to come before the meeting.
Only shareholders of record at the close of business on
February 10, 1995 are entitled to receive notice of and to vote 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
of STABA's total voting power.
Whether or not you plan to attend the Special Meeting,
please complete, date and sign the enclosed proxy card and return it
promptly in the stamped return envelope so that your shares will be
represented at the Special Meeting. If you attend the Special
Meeting in person, you may revoke your proxy and vote your own
shares.
By Order of the Board of Directors,
Joseph T. Mistreta, Secretary
Donaldsonville, Louisiana
Dated: February __, 1995
PROSPECTUS
2,500,000 SHARES
HIBERNIA CORPORATION
Class A Common Stock
PROXY STATEMENT
STABA BANCSHARES, INC.
Special Meeting of Shareholders to be
held Tuesday, March 21, 1995
This Proxy Statement is being furnished to the shareholders of
STABA Bancshares, Inc. ("STABA") in connection with the
solicitation of proxies by STABA's Board of Directors for use at
the Special Meeting of STABA shareholders to be held at 5:00 p.m.
on Tuesday, March 21, 1995, at 400 Mississippi Street,
Donaldsonville, Louisiana, and at any adjournments or postponements
thereof (the "Special Meeting").
At the Special Meeting, the shareholders of STABA will
consider and vote upon a proposal to approve the Agreement and Plan of
Merger dated as of November 4, 1994 (the "Agreement"), by and among
Hibernia Corporation ("Hibernia") and STABA, a copy of which is
attached as Appendix A to the accompanying Proxy Statement. The
Agreement provides that STABA will merge with and into Hibernia,
and the outstanding shares of common stock of STABA, $1.25 per
value (the "STABA Common Stock") will be converted into the shares
of Class A Common Stock of Hibernia, no par value (the "Hibernia
Common Stock") with an aggregate value of $18 million, as more
fully described herein. See "The Merger."
This document also constitutes a prospectus of Hibernia with
respect to the Hibernia Common Stock to be issued to the
shareholders of STABA in connection with the Merger. The
outstanding shares of Hibernia Common Stock are, and the shares
offered hereby will be, listed on the New York Stock Exchange, Inc.
(the "NYSE"). The last reported sale price of Hibernia Common
Stock on the NYSE on January __, 1995 was $_______ per share.
THE SHARES OF HIBERNIA COMMON STOCK OFFERED HEREBY ARE NOT
SAVINGS ACCOUNTS, DEPOSITS OR OTHER OBLIGATIONS OF A BANK
OR SAVINGS ASSOCIATION AND ARE NOT INSURED BY THE
FEDERAL DEPOSIT INSURANCE CORPORATION OR ANY
OTHER GOVERNMENTAL AGENCY.
THESE SECURITIES HAVE NOT BEEN APPROVED OR DISAPPROVED BY THE
SECURITIES AND EXCHANGE COMMISSION OR ANY STATE SECURITIES
COMMISSION, NOR HAS THE COMMISSION OR ANY
STATE SECURITIES COMMISSION PASSED UPON THE
ACCURACY OR ADEQUACY OF THIS PROXY STATEMENT.
ANY REPRESENTATION TO THE CONTRARY IS A
CRIMINAL OFFENSE.
The date of this Proxy Statement is February __, 1995.
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 at, and copies thereof may be obtained at
prescribed rates from the public reference facilities
maintained by, 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 10048 and
Northwestern Atrium Center, 500 West Madison Street, Suite
1400, Chicago, Illinois 60621-2511.
Common stock of Hibernia is listed for trading on
the NYSE and any reports, proxy statements and other
information concerning Hibernia may be inspected at its
offices which are located at 20 Broad Street, New York,
New York 10005.
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 securities of Hibernia that may be
issued in connection with the transaction described herein.
This Proxy Statement does not contain all of the
information set forth in the Registration Statement or the
exhibits thereto. For further information with respect to
Hibernia and the Hibernia Common Stock offered hereby,
reference is hereby made to such Registration Statement and
exhibits. Statements contained in this Proxy Statement
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
relating to Hibernia and its subsidiaries has been supplied
by Hibernia, and all information relating to STABA has
been supplied by STABA.
INCORPORATION BY REFERENCE
This Proxy Statement incorporates documents by reference
which are not presented herein or delivered herewith.
These documents are available, without charge, to any
person receiving this Proxy Statement, including beneficial
owners of STABA Common Stock. The request may be
written or oral and should be directed to the Assistant
Corporate Secretary of Hibernia Corporation, 313 Carondelet
Street, New Orleans, Louisiana 70130, telephone number (504)
533-3411. To ensure timely delivery of the documents,
any request should be made by March 14, 1995
The following documents, or the indicated portions thereof,
are hereby incorporated by reference into this Proxy
Statement:
(1) Hibernia's Annual Report on Form 10-K for the
year ended December 31, 1993;
(2) Hibernia's Quarterly Reports on Form 10-Q for
the quarters ended March 31, 1994, June 30, 1994
and September 30, 1994;
(3) Hibernia's definitive Proxy Statement dated April
8, 1994 relating to its 1994 Annual Meeting of
Shareholders held on April 26, 1994, except the
information contained under the headings "Executive
Compensation -- Report of the Executive
Compensation Committee" and "-- Stock Performance
Graph";
(4) Hibernia's supplemental consolidated financial
statements as of December 31, 1993 and 1992 and
for the periods ended December 31, 1993, 1992
and 1991, set forth in Hibernia's Current Report
on Form 8-K dated October 11, 1994;
(5) Hibernia's supplemental consolidated financial
statements as of December 31, 1993 and 1992 and
for the periods ended December 31, 1993, 1992
and 1991, set forth in Hibernia's Current Report
on Form 8-K dated February 15, 1995;
(6) The description of Hibernia Common Stock set forth
in Hibernia's Current Report on Form 8-K dated
November 2, 1994; and
(7) All other reports 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 and prior to
the Special Meeting shall be deemed to be
incorporated by reference from the date such
documents are filed.
Any statement contained in a document incorporated or
deemed to be incorporated by reference herein shall be
deemed to be modified or superseded for the purposes of
this Proxy Statement to the extent that a statement in
this Proxy Statement, or any subsequently filed document
that is also incorporated by reference herein, modifies or
supersedes such statement. Any statement so modified or
superseded shall not be deemed, except as so modified or
superseded, to constitute a part of this Proxy Statement.
No person is authorized to give any information or
to make any representations other than those contained
herein and, if given or made, such information or
representations may not be relied upon as having been
authorized. This document does not constitute an offer
or solicitation by anyone in any jurisdiction in which
such offer or solicitation is not authorized or in which
the person making such offer or solicitation is not
qualified to do so or to any person to whom it is
unlawful to make such offer or solicitation. Neither the
delivery of this document nor any distribution of
securities made hereunder shall under any circumstances
create an implication that there has been no change in
the affairs of Hibernia or STABA since the date hereof
or that the information herein is correct as of any time
subsequent to the date hereof.
TABLE OF CONTENTS
SUMMARY . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . i
MEETING INFORMATION . . . . . . . . . . . . . . . . . . . . . . .. . . . 1
Vote Required . . . . . . . . . . . . . . . . . . . . .. . . . 1
Recommendation. . . . . . . . . . . . . . . . . . . . .. . . . 2
THE MERGER. . . . . . . . . . . . . . . . . . . . . . . . . . . .. . . . 2
Consideration to be Received in the Merger. . . . . . .. . . . 2
Terms of the Merger . . . . . . . . . . . . . . . . . .. . . . 3
Background of and Reasons for the Merger. . . . . . . .. . . . 3
Opinion of National Capital Corporation . . . . . . . .. . . . 5
Fees of Investment Advisors . . . . . . . . . . . . . .. . . . 8
Surrender of Certificates . . . . . . . . . . . . . . .. . . . 9
Representations and Warranties; Conditions to the
Merger; Waiver . . . . . . . . . . . . . . . . . . . . 9
Regulatory Approvals. . . . . . . . . . . . . . . . . .. . . .10
Business Pending the Merger . . . . . . . . . . . . . .. . . .11
Effective Date of the Merger; Termination . . . . . . .. . . .11
Management and Operations After the Merger. . . . . . .. . . .12
Certain Differences in Rights of Shareholders . . . . .. . . .12
Interests of Certain Persons in the Merger. . . . . . .. . . .15
Employee Benefits . . . . . . . . . . . . . . . . . . .. . . .16
Expenses. . . . . . . . . . . . . . . . . . . . . . . .. . . .16
Material Tax Consequences . . . . . . . . . . . . . . .. . . .16
Resale of Hibernia Common Stock . . . . . . . . . . . .. . . .17
Dividend Reinvestment Plan. . . . . . . . . . . . . . .. . . .18
Accounting Treatment. . . . . . . . . . . . . . . . . .. . . .18
RIGHTS OF DISSENTING SHAREHOLDERS . . . . . . . . . . . . . . . .. . . .18
PRO FORMA FINANCIAL INFORMATION . . . . . . . . . . . . . . . . .. . . .20
CERTAIN INFORMATION ABOUT HIBERNIA. . . . . . . . . . . . . . . .. . . .24
Supervision and Regulation. . . . . . . . . . . . . . .. . . .24
CERTAIN INFORMATION ABOUT STABA . . . . . . . . . . . . . . . . .. . . .26
Principal Business. . . . . . . . . . . . . . . . . . .. . . .26
Market Prices and Dividends . . . . . . . . . . . . . .. . . .26
Property. . . . . . . . . . . . . . . . . . . . . . . .. . . .27
Employees . . . . . . . . . . . . . . . . . . . . . . .. . . .27
Litigation. . . . . . . . . . . . . . . . . . . . . . .. . . .27
Competition . . . . . . . . . . . . . . . . . . . . . .. . . .27
Supervision and Regulation. . . . . . . . . . . . . . .. . . .28
MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION
AND RESULTS OF OPERATIONS OF STABA FOR THE TWO YEARS
ENDED DECEMBER 31, 1993 AND DECEMBER 31, 1992 . . . . . . . . . .. . . .28
Overview. . . . . . . . . . . . . . . . . . . . . . . .. . . .29
Results of Operations . . . . . . . . . . . . . . . . .. . . .29
Analysis of Financial Condition . . . . . . . . . . . .. . . .33
MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION
AND RESULTS OF OPERATIONS OF STABA FOR THE NINE-MONTH
PERIODS ENDED SEPTEMBER 30, 1994 AND SEPTEMBER 30, 1993 . . . . .. . . 38
Overview. . . . . . . . . . . . . . . . . . . . . . . .. . . 38
Results of Operations . . . . . . . . . . . . . . . . .. . . 38
Analysis of Financial Condition . . . . . . . . . . . .. . . 40
BENEFICIAL OWNERSHIP OF DIRECTORS, EXECUTIVE OFFICERS AND
PRINCIPAL SHAREHOLDERS OF STABA . . . . . . . . . . . . . . . .. . . 45
Security Ownership of Directors and Executive
Officers . . . . . . . . . . . . . . . . . .. . . 45
Security Ownership of Principal Shareholders. . . . . .. . . 45
RELATIONSHIP WITH INDEPENDENT AUDITORS. . . . . . . . . . . . . .. . . 46
VALIDITY OF SHARES. . . . . . . . . . . . . . . . . . . . . . . .. . . 46
EXPERTS . . . . . . . . . . . . . . . . . . . . . . . . . . . . .. . . 46
FINANCIAL STATEMENTS OF STABA . . . . . . . . . . . . . . . . . .. . .F-1
Appendix A - Agreement and Plan of Merger . . . . . . .. . .A-1
Appendix B - Fairness Opinion of National Capital
Corporation . . . . . . . . . . . . . . .. . . .B-1
Appendix C - Tax Opinion of Ernst & Young LLP . . . . .. . . .C-1
Appendix D - Selected Provisions of State
Law Relating to the Rights of
Dissenting Shareholders. . . . . . . . . .. . . .D-1
SUMMARY
This summary is not intended to be a complete
explanation of the matters covered in this Proxy Statement
and is qualified in its entirety by reference to the
more detailed information contained elsewhere in this Proxy
Statement, the Appendices hereto and the documents
incorporated herein by reference, all of which shareholders
are urged to read carefully prior to the Special Meeting.
Unless otherwise indicated, historical financial information
for Hibernia for the periods ended or as of September 30
is derived from the unaudited financial statements contained
in Hibernia's Quarterly Report on Form 10-Q for the
quarter ended September 30, 1994. The financial
information in the September 30, 1994 10-Q reflects the
impact of the four mergers consummated by Hibernia in
1994 prior to September 30. Year-end historical financial
information reflects the impact of four mergers consummated
by Hibernia in the third quarter of 1994, two each as
of July 1 and August 1, each of which was accounted for
as a pooling of interests. Year-end historical financial
information is derived from the supplemental consolidated
financial statements contained in Hibernia's Current Report
on Form 8-K filed on October 11, 1994 and, for balance
sheet years prior to December 31, 1992, and for income
statement years prior to December 31, 1991, from the
historical financial statements of Hibernia, restated to
reflect the impact of the aforementioned four mergers.
Year-end restated financial information about Hibernia
reflects the impact of the four mergers described above
and two mergers consummated by Hibernia on December 31,
1994, each of which was accounted for as a pooling of
interests. Year-end restated financial information is
derived from the supplemental financial statements contained
in Hibernia's Current Report on Form 8-K filed on
February 15, 1995 and, for balance sheet years prior to
December 31, 1992, and for income statement years prior
to December 31, 1991, from the historical financial
statements of Hibernia, restated to reflect the impact of
the aforementioned six mergers. None of the foregoing
financial information includes any financial information
regarding any pending mergers by Hibernia. For financial
information relating to such pending mergers, see "Pro
Forma Financial Information." Financial information about
STABA for the periods ended or as of September 30 is
derived from the unaudited financial statements of STABA,
and year-end information is derived from the audited
financial statements of STABA.
The Parties to the Merger
Hibernia. Hibernia is a Louisiana corporation
registered under the Bank Holding Company Act of 1956, as
amended (the "BHCA"). As of September 30, 1994, Hibernia
had total consolidated assets of approximately $5.7 billion
and shareholders' equity of approximately $500 million.
Hibernia has a single banking subsidiary, Hibernia National
Bank ("HNB"), a national banking association that provides
retail and commercial banking services through approximately
150 branches throughout Louisiana. The principal executive
offices of Hibernia are located at 313 Carondelet Street,
New Orleans, Louisiana 70130, and its telephone number is
(504) 533-5532. See "Certain Information About Hibernia"
and "Available Information."
From time to time, Hibernia investigates and holds
discussions and negotiations in connection with possible
transactions with other banks and financial institutions.
Hibernia has executed definitive merger agreements with
three institutions, Progressive Bancorporation, Inc.
("Progressive"), the holding company of Progressive Bank and
Trust Company, headquartered in Houma, Louisiana, American
Bank, headquartered in Norco, Louisiana ("American Bank"),
and Bank of St. John, headquartered in LaPlace, Louisiana
("Bank of St. John"). The proposed transactions with
Progressive, American Bank and Bank of St. John are
subject to various conditions, including applicable
regulatory approvals, and are described further herein under
"Other Pending Merger Transactions for Hibernia" and under
"Pro Forma Financial Information." At the date hereof,
Hibernia has not entered into any agreements or
understandings with respect to any other significant merger
transaction. 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,
on the terms upon which, such transactions may be pursued
or consummated.
On January 9, 1995 Hibernia reported net income for
1994 of $84.7 million, up 33% from $63.8 million in
1993. Earnings per share increased to $.78 in 1994
compared to $.59 in 1993. Return on assets and return
on equity for 1994 increased to 1.35% and 15.63%,
respectively, from 1.06% and 13.33% for 1993. Loans
increased 15% to $3.4 billion and assets increased 2% to
$6.3 billion at the end of 1994. Non-performing assets
and non-performing loans were reduced by approximately two-
thirds during 1994. In the fourth quarter of 1994
Hibernia reported income of $16.5 million ($.15 per share),
down 11% from $18.5 million ($.17 per share) for the
fourth quarter of 1993. The major portion of such
decrease resulted from Hibernia's merger activities in 1994,
and included merger related charges of $4.2 million and
a $2.4 million loss on the sale of securities acquired
in the mergers to conform the acquired portfolios to
Hibernia's objectives for risk, liquidity and returns.
SELECTED FINANCIAL DATA ABOUT HIBERNIA
(Unaudited)
The following table sets forth certain consolidated
information for Hibernia. The historical year-end
information for 1993 and 1992 is derived from the
supplemental restated consolidated financial statements of
Hibernia Corporation contained in Hibernia's Current Report
on Form 8-K dated October 11, 1994. The restated year-
end information for 1993 and 1992 is derived from the
supplemental restated financial statements of Hibernia
contained in Hibernia's Current Report on Form 8-K dated
February 15, 1995. The historical and restated balance
sheet information as of December 31, 1991, 1990 and 1989,
and the income statement information for the years ended
December 31, 1990 and 1989 is derived from Hibernia's
historical financial statements, restated to reflect the
impact of the six mergers consummated in 1994. The
September 30 information is derived from the unaudited
financial statements contained in Hibernia's Quarterly Report
on Form 10-Q for the quarter ended September 30, 1994.
All September 30 restated information reflects the impact
of the two mergers consummated in the fourth quarter of
1994. Pro forma financial information giving effect to
the Merger and other probable mergers is included herein
under "Pro Forma Financial Information."
<PAGE>
HISTORICAL HIBERNIA CORPORATION (1)
SELECTED FINANCIAL INFORMATION
<TABLE>
<CAPTION>
9 Months Ended
Year Ended December 31 September 30
Unaudited ($ in thousands, except per share amounts) 1993 1992 1991 1990 1989 1994 1993
<S> <C> <C> <C> <C> <C> <C> <C>
Net interest income $234,064 $234,398 $263,348 $285,614 $238,989 $178,465 $175,997
Income (loss) from continuing operations 55,391 (1,752) (141,367) (17,014) 58,148 61,021 38,999
Per share:
Income (loss) from continuing operations 0.58 (0.04) (3.44) (0.42) 1.46 0.63 0.41
Cash dividends 0.03 - 0.15 0.90 0.91 0.13 -
Book value 4.91 4.24 5.18 9.52 10.33 5.17 4.62
SELECTED PERIOD-END BALANCES
Debt 23,981 25,710 127,566 123,145 91,077 3,679 24,521
Total assets 5,720,013 5,592,710 6,862,752 8,172,331 7,531,137 5,727,792 5,489,350
(1) Refer to "PRO FORMA FINANCIAL INFORMATION".
</TABLE>
RESTATED HIBERNIA CORPORATION (2)
SELECTED FINANCIAL INFORMATION
<TABLE>
<CAPTION>
9 Months Ended
Year Ended December 31 September 30
Unaudited ($ in thousands, except per share amounts) 1993 1992 1991 1990 1989 1994 1993
<S> <C> <C> <C> <C> <C> <C> <C>
Net interest income $256,991 $257,074 $282,152 $300,024 $250,926 $194,540 $192,890
Income (loss) from continuing operations 61,062 1,963 (139,416) (17,683) 59,186 65,433 42,580
Per share:
Income (loss) from continuing operations 0.57 0.04 (2.64) (0.34) 1.15 0.60 0.40
Cash dividends 0.03 - 0.15 0.90 0.91 0.13 -
Book value 4.82 4.17 4.77 7.91 8.69 5.08 4.55
SELECTED PERIOD-END BALANCES
Debt 30,194 32,587 134,809 146,244 99,606 3,679 31,080
Total assets 6,223,061 6,102,592 7,362,964 8,648,889 7,954,550 6,229,040 5,998,696
(2) Refer to "PRO FORMA FINANCIAL INFORMATION".
</TABLE>
STABA. STABA is a Louisiana corporation registered under
the BHCA. STABA has a single banking subsidiary, State Bank and
Trust Company, a bank formed under the laws of the state of
Louisiana ("State Bank"). State Bank operates four offices in
Ascension Parish, Louisiana, and offers a range of retail and
commercial banking services. As of September 30, 1994, STABA had
total consolidated assets of approximately $97 million and
shareholders' equity of approximately $7.7 million. The
principal executive offices of STABA are located at 400
Mississippi Street, Donaldsonville, Louisiana 70346, and its
telephone number is (504) 473-3181. For additional information
concerning the business of STABA and its financial condition, see
"Certain Information About STABA" and "Financial Statements of
STABA."
SELECTED FINANCIAL DATA ABOUT STABA
(Unaudited)
The following table sets forth certain historical financial
information for STABA. This information is based on the
historical financial statements and related notes of STABA
contained elsewhere in this Proxy Statement.
<PAGE>
STABA Bancshares, Inc.
SELECTED FINANCIAL INFORMATION
<TABLE>
<CAPTION>
9 Months Ended
Year Ended December 31 September 30
Unaudited ($ in thousands, except per share amounts) 1993 1992 1991 1990 1989 1994 1993
<S> <C> <C> <C> <C> <C> <C> <C>
Net interest income $4,019 $3,556 $2,704 $2,177 $1,836 $3,206 $3,011
Income from continuing operations 1,252 1,064 762 497 334 1,007 993
Per share:
Income from continuing operations 10.53 8.94 6.41 4.17 2.81 8.46 8.34
Cash dividends 1.35 1.10 1.00 0.80 0.80 - -
Book value 58.57 49.39 41.45 35.90 32.53 64.68 57.74
SELECTED PERIOD-END BALANCES
Debt - - - - - - -
Total assets 95,189 91,832 73,168 59,159 52,334 97,387 95,153
</TABLE>
PRO FORMA COMBINED SELECTED FINANCIAL INFORMATION
(Unaudited)
The following table sets forth certain unaudited pro forma
combined information for Hibernia and is based upon the Pro Forma
Financial Information contained elsewhere herein, which reflects
the results of the six mergers consummated by Hibernia in 1994
and all probable mergers to which Hibernia is a party (see "Other
Pending Merger Transactions for Hibernia" and "Certain
Information About Hibernia," below). The pro forma information,
which reflects each of the consummated and probable mergers using
the pooling of interests method of accounting, is presented for
informational purposes only and should not be construed as
indicative of the actual operations that would have occurred had
the mergers been consummated at the beginning of the periods
indicated below or which may occur after all the mergers are
consummated. See "Pro Forma Financial Information" and the
"Notes to Pro Forma Combined Financial Statements" contained
elsewhere herein.
<PAGE>
PRO FORMA HIBERNIA CORPORATION*
PRO FORMA COMBINED SELECTED FINANCIAL INFORMATION
<TABLE>
<CAPTION>
Year Ended December 31 9 Months Ended September 30
Unaudited ($ in thousands, except per share amounts) 1993 1992 1991 1994 1993
<S> <C> <C> <C> <C> <C>
Net interest income $261,010 $260,630 $284,856 $197,746 $195,901
Income (loss) from continuing operations 62,314 3,027 (138,654) 66,440 43,573
Per share:
Income (loss) from continuing operations 0.56 0.05 (2.51) 0.60 0.40
Cash dividends 0.03 - 0.15 0.13 -
Book value 4.78 4.13 4.65 5.04 4.51
SELECTED PERIOD-END BALANCES
Debt 30,194 32,587 134,809 3,679 31,080
Total assets 6,318,250 6,194,424 7,435,477 6,326,427 6,093,849
* Includes restated Hibernia Corporation and STABA Bancshares, Inc.
</TABLE>
TOTAL PRO FORMA HIBERNIA CORPORATION**
PRO FORMA COMBINED SELECTED FINANCIAL INFORMATION
<TABLE>
<CAPTION>
Year Ended December 31 9 Months Ended September 30
Unaudited ($ in thousands, except per share amounts) 1993 1992 1991 1994 1993
<S> <C> <C> <C> <C> <C>
Net interest income $278,322 $275,682 $295,598 $211,518 $208,875
Income (loss) from continuing operations 66,846 7,442 (136,726) 74,122 47,193
Per share:
Income (loss) from continuing operations 0.56 0.11 (2.14) 0.62 0.40
Cash dividends 0.03 - 0.15 0.13 -
Book value 4.64 4.01 4.20 4.90 4.39
SELECTED PERIOD-END BALANCES
Debt 36,809 37,568 141,339 8,591 38,013
Total assets 6,651,806 6,519,435 7,732,627 6,665,564 6,421,060
** Includes restated Hibernia Corporation, STABA Bancshares, Inc., American Bank,
Progressive Bancorporation, Inc. and Bank of St. John
</TABLE>
COMPARATIVE PER SHARE INFORMATION
(Unaudited)
The following table sets forth for Hibernia Common Stock and
STABA Common Stock certain historical, restated, unaudited pro
forma combined and unaudited pro forma equivalent per share
financial information for and as of the years ended December 31,
1993, 1992 and 1991 and for the nine-month periods ended
September 30, 1994 and 1993. The year-end information under the
column titled "Historical Hibernia Corporation" is derived from
Hibernia's Current Report on Form 8-K dated October 11, 1994,
which reflects the impact of the mergers consummated by Hibernia
with Commercial Bancshares, Inc. ("Commercial") and Bastrop
National Bank ("Bastrop"), consummated on July 1, 1994, and with
First Continental Bancshares, Inc. ("First Continental") and
First Bancorp of Louisiana, Inc. ("First Bancorp"), consummated
on August 1, 1994, as if such mergers had occurred at the
beginning of the period indicated. The year-end information
under the column entitled "Restated Hibernia Corporation" is
derived from Hibernia's Current Report on Form 8-K dated February
15, 1995, which reflects the results of the aforementioned
mergers and also reflects the impact of mergers consummated by
Hibernia or HNB with Pioneer Bancshares, Inc. ("Pioneer") and
First State Bank and Trust Company ("First State"), consummated
on December 31, 1994, as if such mergers had occurred at the
beginning of the period indicated.
Information under the column entitled "Pro Forma Hibernia
Corporation (With STABA Bancshares, Inc.)" is based upon the Pro
Forma Financial Statements contained elsewhere herein, which
reflects the results of the aforementioned six mergers. The pro
forma information, which reflects each of the consummated and
probable mergers using the pooling of interests method of
accounting, is presented for informational purposes only and
should not be construed as indicative of the actual operations
that would have occurred had the mergers been consummated at the
beginning of the periods indicated below or which may occur after
all the mergers are consummated. The pro forma information gives
effect to the issuance, in each of the periods presented, of
11,720,512 shares of Hibernia Common Stock for all of the
outstanding shares of Pioneer and First State and assumes the
issuance of 2,482,759 shares of Hibernia Common Stock for all of
the outstanding shares of STABA.
The interim Hibernia information in the column entitled
"Historical Hibernia Corporation" is based on, and should be read
in conjunction with, Hibernia's Quarterly Report on Form 10-Q for
the quarter ended September 30, 1994 incorporated into this Proxy
Statement by reference, and which reflects the impact of the four
mergers consummated in 1994 prior to September 30. The interim
Hibernia information in the column entitled "Restated Hibernia
Corporation" is based on the information in the aforementioned
10-Q, restated to reflect the impact of the two mergers
consummated in the fourth quarter of 1994.
Information under the column entitled "Historical STABA
Bancshares, Inc." is derived from the historical audited year-end
and unaudited interim financial statements of STABA contained
elsewhere in this Proxy Statement.
The information under the column entitled "STABA Bancshares,
Inc. Pro Forma Equivalent" is derived by multiplying the numbers
contained in the column entitled "Pro Forma Hibernia (With STABA
Bancshares, Inc.)" by an assumed exchange rate of 20.87 shares of
Hibernia Common Stock for each share of STABA Common Stock. See
"The Merger -- Consideration to be Received in the Merger."
<PAGE>
HIBERNIA CORPORATION AND STABA BANCSHARES, INC.
COMPARATIVE PER SHARE INFORMATION
Unaudited
<TABLE>
<CAPTION>
PRO FORMA
HIBERNIA STABA
HISTORICAL RESTATED HISTORICAL CORPORATION BANCSHARES, INC.
HIBERNIA HIBERNIA STABA (WITH STABA PRO FORMA
CORPORATION CORPORATION BANCSHARES, INC. BANCSHARES, INC.) EQUIVALENT
Per Common Share:
<a> <C> <C> <C> <C> <C>
Income (loss) from continuing operations:
For the nine months ended September 30,
1994 $0.63 $0.60 $8.46 $0.60 $12.52
1993 0.41 0.40 8.34 0.40 $8.35
For the year ended December 31,
1993 $0.58 $0.57 $10.53 $0.56 $11.69
1992 (0.04) 0.04 8.94 0.05 $1.04
1991 (3.44) (2.64) 6.41 (2.51) ($52.38)
Cash dividends:
For the nine months ended September 30,
1994 $0.13 $0.13 - $0.13 2.71
1993 - - - - -
For the year ended December 31,
1993 $0.03 $0.03 $1.35 $0.03 0.63
1992 - - 1.10 - -
1991 0.15 0.15 1.00 0.15 3.13
Book Value:
At September 30, 1994 $5.17 $5.08 $64.68 $5.04 105.18
At December 31, 1993 $4.91 $4.82 $58.57 $4.78 99.76
</TABLE>
The Special Meeting
The Special Meeting of the shareholders of STABA to consider
and vote upon the Agreement will be held on Tuesday, March 21,
1995 at 5:00 p.m. at the main office of STABA, 400 Mississippi
Street, Donaldsonville, Louisiana. Only holders of record of
STABA Common Stock at the close of business on February 10, 1995
(the "Record Date") will be entitled to notice of and to vote at
the Special Meeting. On the Record Date, 118,938 shares of STABA
Common Stock were outstanding and entitled to vote on the Merger.
For additional information with respect to the Special Meeting
and the voting rights of shareholders of STABA, see "Meeting
Information."
The Merger
In accordance with the terms of the Agreement, STABA will be
merged with and into Hibernia, and State Bank will be merged with
and into HNB, whereupon the separate existence of each of STABA
and State Bank will cease. The Merger will become effective at
the date and time (the "Effective Date") set forth in a
certificate issued by the Louisiana Secretary of State. Unless
otherwise agreed upon by Hibernia and STABA, the Effective Date
will be the later of: (i) the first business day that falls 30
days after the date of the order of the Office of the Comptroller
of the Currently (the "OCC") approving the merger of State Bank
with and into HNB; (ii) the first business day that falls 5 days
after the Special Meeting; or (iii) such other date within 60
days of the Special Meeting as may be agreed upon by the parties.
On the Effective Date, the shareholders of STABA will be entitled
to receive an aggregate number of shares of Hibernia Common Stock
determined by dividing $18 million by the Average Market Price of
Hibernia Common Stock on the date of the closing of the Merger
(the "Deliverable Shares"). The Average Market Price is the
average of the mean of the high and low prices of one share of
Hibernia Common Stock for the five business days preceding the
last trading day immediately prior to the closing date, as
reported in The Wall Street Journal. Each outstanding share of
STABA Common Stock (other than shares held by a shareholder that
exercises and perfects dissenters' rights in accordance with
applicable law) will be converted into the number of shares of
Hibernia Common Stock equal to the Deliverable Shares divided by
the total number of outstanding shares of STABA Common Stock on
the date of the closing (the number so determined is the
"Exchange Rate").
Management and Operations After the Merger
After the Effective Date, the offices of STABA will be
operated as branch banking offices of HNB, and the directors of
STABA will resign their positions as directors. See "The Merger
- -- Management and Operations After the Merger."
Recommendation of the Board of Directors
The Board of Directors of STABA (the "STABA Board") has
unanimously approved the Agreement, believes that the Merger is
in the best interests of the shareholders and recommends that the
shareholders vote FOR the Merger. Having received the advice of
its financial advisor, National Capital Corporation, the STABA
Board further believes that the basis specified in the Agreement
for the exchange of shares of STABA Common Stock for shares of
Hibernia Common Stock is a fair basis for effecting the Merger
and will afford STABA shareholders the opportunity to continue as
equity participants with a more liquid investment in a strong
statewide banking organization. The STABA Board also believes
that the Merger will provide expanded product and service
capabilities to the customers of STABA and will enable the
combined entity to compete more effectively with other commercial
banks and financial institutions in the region. See "The Merger
- -- Background of and Reasons for the Merger."
Basis for the Terms of the Merger
A number of factors were considered by the STABA Board in
approving the terms of the Merger, including, without limitation,
information concerning the financial condition, results of
operations and prospects of Hibernia, HNB, STABA and State 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 the STABA Common Stock,
the anticipated tax-free nature of the Merger to STABA
shareholders for federal income tax purposes, the financial terms
of other business combinations in the banking industry, and
certain non-monetary factors. See "The Merger -- Background of
and Reasons for the Merger."
Advice and Opinion of Investment Advisor
National Capital Corporation, STABA's financial advisor, has
rendered its opinion that the consideration to be received by the
shareholders of STABA pursuant to the Agreement, when taken as a
whole, is fair to STABA and its shareholders from a financial
point of view. A copy of the opinion of National Capital
Corporation is attached hereto as Appendix B, and should be read
in its entirety with respect to the assumptions made therein and
other matters considered by National Capital Corporation. See
"The Merger -- Opinion of National Capital Corporation" for
further information regarding, among other things, the selection
of National Capital Corporation and its compensation in
connection with the Agreement and the Merger.
Vote Required
Approval of the Agreement requires the affirmative vote of
the holders of a majority of the total outstanding shares of
STABA Common Stock. Directors and executive officers of STABA
have voting power with respect to 32,036 shares of STABA Common
Stock, representing approximately 27% of the STABA Common Stock
outstanding as of January 31, 1995. The directors of STABA have
agreed to vote their stock in favor of the Merger, unless they
are legally required to abstain from voting or to vote against
the Merger. See "Meeting Information -- Vote Required."
Other Pending Merger Transactions for Hibernia
In addition to STABA, Hibernia has entered into definitive
merger agreements with three other financial institutions,
American Bank, Progressive and Bank of St. John. Each of these
proposed transactions are subject to certain conditions, similar
to the conditions to the Merger described herein. These
transactions may be consummated before or after consummation of
the Merger. Shareholders of STABA will not have the right to
vote on any of the other pending transactions. In addition, if
the Merger is consummated prior to consummation of any or all of
the other transactions, former shareholders of STABA who have not
exercised and perfected dissenters' rights will be shareholders
of Hibernia at the time those transactions are consummated.
Shareholders of Hibernia do not have the right to vote on any of
the pending merger transactions.
The table below includes certain information concerning
American Bank, Progressive and Bank of St. John as of September
30, 1994. Further information concerning the effects of the
proposed merger transactions, including complete pro forma
financial information, is included herein under "Pro Forma
Financial Information." All information included in the
following table is as of September 30, 1994, and all percentages
are percentages of Hibernia on a pro forma basis to reflect all
six of the merger transactions consummated in 1994 and the
pending transactions with American Bank, Progressive, Bank of St.
John and STABA.
<TABLE>
<CAPTION>
<S> <C> <C> <C> <C> <C> <C>
Name Deposits Deposits Assets Assets Shareholders' Equity
as % as % Equity as %
of Total of Total of Total
American $82 million 1.4% $93 million 1.4% $9 million 1.5%
Bank
Progressive $119 million 2.1% $140 million 2.1% $8 million 1.4%
Bank of St. $100 million 1.7% $113 million 1.7% $12 million 2.1%
</TABLE>
On a pro forma basis, as of September 30, 1994, the book
value of the shares of Hibernia Common Stock would be increased
by the pending transactions. The effect of the Merger on the
book value of Hibernia Common Stock, as well as STABA Common
Stock, is shown under "Comparative Per Share Information"
included elsewhere herein.
Conditions; Abandonment; Amendment
Consummation of the Merger is subject to the satisfaction of
a number of conditions, including approval of the Agreement and
the Merger by the shareholders of STABA, the Board of Governors
of the Federal Reserve System (the "Federal Reserve Board") and
the OCC. Applicable law provides that the Merger may not be
consummated until at least 15, but no more than 180, days after
approval of the Federal Reserve Board and the OCC is obtained.
Hibernia filed an application for approval of the Federal Reserve
Board and the OCC in mid January of 1995. See "Representations
and Warranties; Conditions to the Merger; Waiver" and "Regulatory
Approvals" under "The Merger."
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 STABA's shareholders may change the Exchange Rate.
In addition, the Agreement may be terminated, either before or
after shareholder approval, under certain circumstances. See
"Representations and Warranties; Conditions to the Merger;
Waiver" and "Effective Date of the Merger; Termination" under
"The Merger."
Interests of Certain Persons in the Merger
The terms of the Merger include certain benefits for
employees and management of STABA, including an employment
agreement for Mr. Kenneth A. Bailey and indemnification of
officers, directors and employees of STABA for certain
liabilities, up to specified aggregate limitations. See "The
Merger -- Interests of Certain Persons in the Merger."
Employee Benefits
The Agreement provides generally that Hibernia will offer to
all employees of STABA 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. Hibernia will also give STABA employees who
become Hibernia employees full credit for their years of service
(for both eligibility and vesting) with STABA for purposes of
Hibernia's 401(k) plan (the Retirement Security Plan). Hibernia
has also agreed to pay or provide certain other benefits to
employees of STABA and State Bank. See "The Merger -- Employee
Benefits."
Certain Material Income Tax Consequences
It is a condition to consummation of the Merger that the
parties receive an opinion of a nationally recognized 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 STABA Common Stock for Hibernia Common Stock will
not give rise to the recognition of gain or loss for federal
income tax purposes to the STABA shareholders and that the
Louisiana income tax treatment to the shareholders of STABA will
be substantially the same as the federal income tax treatment to
the shareholders of STABA. The parties have received the opinion
of Ernst & Young LLP, certified public accountants, to the
effects set forth above. The full text of the opinion is
included herein as Appendix C. See "The Merger -- Material Tax
Consequences."
Because of the complexities of the income tax laws and
because the tax consequences may vary depending upon a holder's
individual circumstances or tax status, it is recommended that
each shareholder of STABA consult his, her or its tax advisor
concerning the federal (and any applicable state, local or other)
tax consequences of the Merger to such shareholder.
Dissenters' Rights
STABA is a Louisiana business corporation and, as such, is
governed by the Louisiana Business Corporation Law (the "LBCL").
The LBCL provides that, if the Merger is not approved by at least
80% of the total voting power of STABA, the shareholders voting
against the Merger will have the right to dissent from the Merger
and to receive the fair value of their shares in cash if the
Merger is consummated. The relevant provisions of the LBCL on
dissenters' rights are attached hereto as Appendix D.
If dissenters' rights are exercised and perfected with
respect to 10% or more of the outstanding shares of STABA Common
Stock, Hibernia has the option to abandon the Merger, because the
Merger could not be accounted for as a pooling of interests. It
is expected that Hibernia would abandon the Merger in that case.
See "Rights of Dissenting Shareholders" and "The Merger --
Accounting Treatment."
Differences in Shareholders' Rights
Upon completion of the Merger, shareholders of STABA, 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 STABA. See
"The 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
STABA Common Stock exercise and perfect dissenters' rights, the
Merger will not qualify for the pooling of interests method of
accounting, and Hibernia will not be obligated to effect the
Merger. See "The Merger -- Accounting Treatment."
MEETING INFORMATION
Each copy of this Proxy Statement mailed to holders of STABA
Common Stock is accompanied by a proxy card furnished in
connection with the STABA Board's solicitation of proxies for use
at the Special Meeting and at any adjournments or postponements
thereof. The Special Meeting is scheduled to be held at 5:00
p.m. on Tuesday, March 21, 1995, at the main office of STABA, 400
Mississippi Street, Donaldsonville, Louisiana. Only holders of
record of STABA Common Stock at the close of business on the
Record Date are entitled to receive notice of and to vote at the
Special Meeting. At the Special Meeting shareholders will
consider and vote upon (a) a proposal to approve the Agreement,
and (b) such other matters as may properly be brought before the
Special Meeting or any adjournments or postponements thereof.
HOLDERS OF STABA COMMON STOCK ARE REQUESTED TO COMPLETE,
DATE AND SIGN THE ACCOMPANYING PROXY CARD AND RETURN IT PROMPTLY
TO STABA IN THE ENCLOSED, POSTAGE PAID ENVELOPE.
Any holder of STABA Common Stock who has delivered a proxy
may revoke it any time before it is voted by attending the
Special Meeting and voting in person, or by giving notice of
revocation in writing or submitting a signed proxy card bearing a
later date to STABA, at 400 Mississippi Street, Donaldsonville,
Louisiana 70346, Attention: Joseph T. Mistreta, Secretary, at or
before the Special Meeting. The shares of STABA Common Stock
represented by properly executed proxy cards received at or prior
to the Special Meeting and not subsequently revoked will be voted
as directed by the shareholders submitting such proxies. If
instructions are not given, executed proxy cards received by
STABA will be voted FOR approval of the Agreement. If any other
matters are properly presented at the Special Meeting for
consideration, the persons named in the proxy card enclosed
herewith will have discretionary authority to vote on such
matters in accordance with their best judgment. The STABA Board
is unaware of any matter to be presented at the Special Meeting
other than the proposal to approve the Agreement.
The cost of soliciting proxies from holders of STABA Common
Stock will be borne by STABA. Such solicitation will be made by
mail but also may be made by telephone or in person by the
directors, officers and employees of STABA (who will receive no
additional compensation for doing so). In addition, STABA will
make arrangements with brokerage firms and other custodians,
nominees and fiduciaries to send proxy materials to their
principals.
STABA SHAREHOLDERS SHOULD NOT FORWARD ANY STOCK CERTIFICATES
WITH THEIR PROXY CARDS. IF THE MERGER IS APPROVED, SHAREHOLDERS
WILL RECEIVE INSTRUCTIONS REGARDING THE EXCHANGE OF THEIR STOCK
CERTIFICATES AFTER THE MERGER HAS BEEN CONSUMMATED.
Vote Required
The STABA Articles of Incorporation provides that the
affirmative vote of the holders of a majority of the total
outstanding shares of STABA Common Stock is required in order to
approve the Agreement. As of the Record Date, there were 118,938
shares of STABA Common Stock outstanding and entitled to vote at
the Special Meeting, with each share being entitled to one vote.
A majority of the outstanding shares entitled to vote at the
Special Meeting constitutes a quorum for purposes of such
meeting. An abstention will be considered present for quorum
purposes, but will have the same effect as a vote against the
proposal to approve the Agreement. A broker non-vote will have
the same effect as a vote against the proposal to approve the
Agreement.
As of the date of this Proxy Statement, the directors and
executive officers of STABA beneficially owned a total of 32,036
shares, or approximately 27% of the outstanding shares of STABA
Common Stock. The directors of STABA have agreed to vote their
stock in favor of the Merger, unless they are legally required to
abstain from voting or to vote against the Merger.
As of January 31, 1995, neither Hibernia nor HNB, nor any of
their directors, executive officers or affiliates, beneficially
owned any shares of STABA Common Stock.
Recommendation
For the reasons described below, the STABA Board has
unanimously approved the Agreement, believes the Merger is in the
best interests of STABA and its shareholders and recommends that
shareholders of STABA vote FOR approval of the Agreement. In
making its recommendation to shareholders, the STABA Board
considered, among other things, the opinion of STABA's financial
advisor, National Capital Corporation, that the terms of the
Agreement are fair to STABA shareholders from a financial point
of view. See "Background of and Reasons for the Merger" and
"Opinion of Financial Advisor" under "The Merger."
THE MERGER
This section of the Proxy Statement describes certain
aspects of the Merger and the Agreement. The following
description does not purport to be complete and is qualified in
its entirety by reference to the Agreement, which is attached as
Appendix A to this Proxy Statement and is incorporated herein by
reference. All shareholders are urged to read the Agreement
carefully and in its entirety.
Consideration to be Received in the Merger
On the Effective Date, the shareholders of STABA will be
entitled to receive an aggregate number of shares of Hibernia
Common Stock determined by dividing $18 million by the Average
Market Price of Hibernia Common Stock on the date of the closing
of the Merger (the "Deliverable Shares"). The Average Market
Price is the average of the mean of the high and low prices of
one share of Hibernia Common Stock for the five business days
preceding the last trading day immediately prior to the closing
date, as reported in The Wall Street Journal. Each outstanding
share of STABA Common Stock (other than shares held by a
shareholder that exercises and perfects dissenters' rights in
accordance with applicable law) will be converted into the number
of shares of Hibernia Common Stock equal to the Deliverable
Shares divided by the total number of outstanding shares of STABA
Common Stock on the date of the closing.
Terms of the Merger
The conversion of shares of STABA Common Stock to Hibernia
Common Stock will be automatic upon consummation of the Merger,
and STABA shareholders will automatically be entitled to all of
the rights and privileges afforded to Hibernia shareholders as of
the Effective Date if the Merger is consummated.
No fractional shares of Hibernia Common Stock will be issued
in connection with the Merger. In lieu of fractional shares,
Hibernia will make a cash payment equal to the fractional
interest which a STABA shareholder would otherwise receive
multiplied by the Average Market Price of Hibernia Common Stock,
and no such holder shall be entitled to dividends, voting rights
or any other right of shareholders in respect of any fractional
share. If, prior to the Effective Date the outstanding shares of
Hibernia Common Stock are increased, decreased, changed into or
exchanged for a different number or class of shares or securities
through a change in Hibernia's capitalization, then the number of
shares to be issued in the Merger will be adjusted accordingly.
The receipt of cash in lieu of fractional shares will not
adversely affect the tax-free nature of the exchange of common
stock in the Merger. See "Material Tax Consequences," below.
For a discussion of the rights of dissenting shareholders,
see "Rights of Dissenting Shareholders."
Background of and Reasons for the Merger
Background. In the Spring of 1993, STABA received an
expression of interest from another financial institution
concerning a possible acquisition of STABA. The Board of STABA
met a number of times during 1993 to consider that expression of
interest, as well as to review possible strategies for increasing
stockholder value, enhancing the liquidity of STABA Common Stock,
and related matters. In 1993, the STABA Board retained Chaffe &
Associates, Inc. ("Chaffe"), an investment banking firm, to
provide financial advice in connection with this review. At a
meeting held on September 21, 1993 the STABA Board considered
various options available to STABA, including remaining an
independent bank holding company or negotiating a merger of STABA
with a larger financial institution, along with financial and
investment banking advice and analyses from Chaffe with respect
thereto. Chaffe reported to the STABA Board that the indication
of interest received was substantially below the prices being
paid for similar banks nationwide, in the Southwestern United
States, and in Louisiana. At that meeting, the STABA Board
determined to remain independent and continue implementing its
existing five-year strategic plan.
In the first half of 1994, STABA received expressions of
interest from two additional financial institutions concerning a
possible acquisition of STABA. The STABA Board met to consider
those expressions of interest and once again retained Chaffe to
provide financial advice in connection with these considerations.
At its May 3, 1994 meeting, the STABA Board determined to enter
into discussions with respect to a possible merger of STABA with
one of the two additional financial institutions, as well as to
contact other potential suitors about a possible merger. STABA
retained Chaffe to assist it with these discussions.
In response to a request from STABA for indications of
interest, STABA provided financial and other information to
certain large financial institutions. STABA received indications
of interest from six financial institutions, including Hibernia.
With the assistance of Chaffe, the STABA Board continued
negotiations with certain of these financial institutions and met
several times to consider merger proposals that STABA received
from them. On October 12, 1994, the STABA Board met with Chaffe
to review the status of negotiations with respect to the proposed
merger of STABA with the various interested financial
institutions, the proposals received from those institutions, and
Chaffe's analyses and recommendations with respect to those
proposals. On October 13, 1994, based on Chaffe's analyses and
recommendations and considerations of various other factors and
subject to receipt of a fairness opinion from a financial advisor
other than Chaffe, the STABA Board approved entering into a
letter of intent and memorandum of understanding with Hibernia
with respect to the possible merger of STABA with and into
Hibernia. During late October and early November of 1994, STABA
and Hibernia negotiated the provisions of the Agreement. At a
meeting of the STABA Board held on November 3, 1994, the STABA
Board, after receiving the opinion of National Capital
Corporation ("National Capital"), STABA's financial advisor,
approved entering into the Agreement with Hibernia.
STABA's Reasons for the Merger. In approving the Merger,
the directors of STABA considered a number of factors. Without
assigning any relative or specific weights to the factors, the
STABA Board of Directors considered the following material
factors:
(a) the information presented to the directors by the
management of STABA concerning the business, operations,
earnings, asset quality, and financial condition of STABA,
including compliance with regulatory capital requirements on an
historical and prospective basis;
(b) the financial terms of the Merger, including the
relationship of the value of the Hibernia Common Stock issuable
in the Merger to the market value, tangible book value, and
earnings per share of STABA Common Stock, and the protection
against a decline in the market value of Hibernia Common Stock;
(c) the nonfinancial terms of the Merger, including
the treatment of the Merger as a tax-free exchange of STABA
Common Stock for Hibernia Common Stock for federal and state
income tax purposes;
(d) the likelihood of the Merger being approved by
applicable regulatory authorities without undue conditions or
delay;
(e) the report from Chaffe reviewing a comparison of
STABA to selected peer banks, premium paid in other merger
transactions, a mark-to-market analysis of STABA, and a
discounted cash flow analysis of STABA; and
(f) the opinion rendered by National Capital, to the
effect that, from a financial point of view, the exchange of
STABA Common Stock for Hibernia Common Stock on the terms and
conditions set forth in the Agreement is fair to the holders of
STABA Common Stock.
The terms of the Merger were the result of arms-length
negotiations between representatives of STABA and representatives
of Hibernia.
Background.
Based on the foregoing, the STABA Board concluded that the
proposed Merger would be in the best interests of STABA and its
shareholders. Accordingly, the STABA Board unanimously
recommends that the shareholders vote FOR the Merger. For
information regarding interests of directors and executive
officers of STABA in the Merger and their beneficial ownership of
STABA Common Stock, see "Management and Operations After the
Merger" and "Interests of Certain Persons in the Merger," below
and "Beneficial Ownership of Directors, Executive Officers and
Principal Shareholders of STABA."
Opinion of National Capital Corporation
General. Pursuant to an engagement letter dated October 26,
1994 (the "Engagement Letter"), STABA engaged National Capital to
determine whether the consideration to be received by the
shareholders of STABA pursuant to the Merger when taken as a
whole, is fair to STABA and its shareholders from a financial
point of view. National Capital has extensive experience in
investment analysis and the valuation of bank and bank holding
company securities in connection with acquisitions and mergers,
and valuations for various other purposes. STABA selected
National Capital as its financial advisor on the basis of its
experience and expertise in merger and acquisition transactions,
and its reputation in the commercial banking and investment
banking communities.
Subsequent to the execution of the Agreement, National
Capital delivered its formal written opinion that, as of the date
thereof, the consideration to be received by the shareholders of
STABA pursuant to the Agreement, when taken as a whole, is fair
to STABA and its shareholders from a financial point of view. No
limitations were imposed by STABA on National Capital with
respect to the investigations made or the procedures followed in
rendering its opinions. The full text of National Capital's
written opinion to the STABA Board, which sets forth the
assumptions made, matters considered, and limitations of the
review by National Capital, is attached hereto as Appendix B and
is incorporated herein by reference and should be read carefully
and in its entirety in connection with this Proxy Statement. The
following summary of National Capital's opinion is qualified in
its entirety by reference to the full text of the opinion.
National Capital's opinion is addressed to the STABA Board of
Directors only and does not constitute a recommendation to any
shareholder of STABA as to how such shareholder should vote at
the Special Meeting.
In connection with its written opinion, National Capital,
among other things: (i) met with officers of STABA to discuss
their businesses, reserves, earnings, properties and prospects;
(ii) reviewed certain public financial information, and other
data with respect to both Hibernia and STABA (this data includes
consolidated financial statements for recent years and interim
periods through September 30, 1994, as well as other relevant
financial and operating data furnished by STABA to National
Capital); (iii) reviewed the Agreement; (iv) reviewed certain
historical market prices and trading volumes of Hibernia Common
Stock; (v) analyzed market volatility studies of Hibernia Common
Stock; (vi) made inquiries regarding, and discussed the Agreement
and other matters related thereto with, STABA's counsel; and
(vii) performed such other analyses and examinations as National
Capital deemed appropriate.
In connection with its review, National Capital did not
independently verify any of the foregoing information, and relied
on such information and assumed such information was complete and
accurate in all material respects. With respect to the financial
forecasts for STABA provided to National Capital by STABA's
management, National Capital assumed for purposes of its opinion
that such forecasts were reasonably prepared on bases reflecting
the best available estimates and judgments of STABA's management
at the time of preparation as to the projected financial
performance of STABA and provided a reasonable basis upon which
National Capital could form its opinion. National Capital also
assumed that there were no material changes in either STABA's or
Hibernia's assets, financial condition, results of operations,
business or prospects since the respective dates of the last
financial statements made available to National Capital.
National Capital relied on advice of counsel to STABA as to all
legal matters with respect to STABA and the Agreement. National
Capital is not expert in the evaluation of loan portfolios for
purposes of assessing the adequacy of the allowance for losses
with respect thereto and assumed for purposes of its opinion that
such allowances for each of STABA and Hibernia are in the
aggregate adequate to cover such losses. In addition, National
Capital did not review any individual credit files, did not make
an independent evaluation, appraisal or physical inspection of
the assets or individual properties of STABA or Hibernia, and was
not furnished with any such appraisals. Further, National
Capital's opinion was based on economic, monetary and market
conditions existing as of the date of the Agreement, and on the
assumption that the Agreement will be consummated in accordance
with its terms, without any amendment thereto and without waiver
by STABA of any of the conditions to its obligations thereunder.
Set forth below is a brief summary of the analysis performed
by National Capital in connection with its opinion.
Analysis of Selected Bank Merger Transactions. National
Capital reviewed the consideration paid in recently announced
transactions whereby certain banks were acquired. Specifically,
National Capital reviewed transactions involving acquisitions of
banks in the United States announced or to be acquired in such
transactions since January 1, 1993 (the "National Acquisitions")
and acquisitions of selected Louisiana banks announced since
January 1, 1993 (the "Louisiana Acquisitions"). National Capital
compiled figures illustrating, among other things, the ratio of
the premium (i.e. purchase price in excess of book value) to core
deposits, purchase price to deposits, purchase price to book
value and purchase price to last twelve months ("LTM") earnings.
The figures for banks acquired or to be acquired in the
National Acquisitions and the Louisiana Acquisitions produced:
(i) median return on average equity of 12.56% and 16.69%
respectively, and (ii) median return on average assets of 1.08%
and 1.57%, respectively. In comparison, National Capital
determined that for the year ended December 31, 1993 and the nine
months ended September 30, 1994, State Bank, STABA's wholly-owned
subsidiary, had a return on average equity of 19.09% and 17.18%,
respectively, its return on average assets was 1.29% and 1.28%,
respectively.
The figures for the National Acquisitions and the Louisiana
Acquisitions produced: (i) median percentage of premium (purchase
price in excess of book value) to core deposits of 6.97% and
10.77%, respectively; (ii) median purchase price to deposits of
16.39% and 20.87%, respectively; (iii) median ratio of purchase
price to book value of 163.01% and 187.42%, respectively; and
(iv) median ratio of purchase price to LTM earnings of 13.30% and
12.80%, respectively.
In comparison, assuming an Exchange Rate of 20.87 shares of
Hibernia Common Stock for each share of STABA Common Stock,
National Capital determined that the consideration to be received
by the holders of STABA Common Stock in the Merger represented a
percentage of premium to core deposits of 14.49%, a percentage of
price to deposits of 20.28%, a ratio of price to book value of
2.34 and a ratio of price to STABA's earnings for the twelve
months ended December 31, 1994 of 14.33.
No other company or transaction used in the above analyses
as a comparison is identical to STABA or the Agreement.
Accordingly, an analysis of the results of the foregoing is not
mathematical; rather, it involves complex considerations and
judgments concerning the differences in financial and operating
characteristics of the companies and other factors that could
affect the public trading value of the companies to which STABA
and the Agreement are being compared.
Contribution Analysis. National Capital analyzed the
contribution of each of STABA and Hibernia to, among other
things, common equity and net income of the pro forma combined
companies for the nine-month period ended September 30, 1994.
This analysis showed, among other things, that based on pro forma
combined balance sheets and income statements for STABA and
Hibernia as of September 30, 1994, STABA would have contributed
1.32% of the pro forma common equity, and 1.36% of the pro forma
net income of the combined companies. Assuming the consideration
to be paid in the Merger for each share of STABA Common Stock
equals 20.87 shares of Hibernia Common Stock, the STABA
shareholders would own approximately 2.08% of the combined
companies based on the number of shares of Hibernia Common Stock
outstanding on September 30, 1994.
Dilution Analysis. Using reported earnings for year-end
1993 for Hibernia and STABA, National Capital compared the
calendar year 1993 earnings per share of STABA Common stock and
Hibernia Common Stock to the calendar year 1993 estimated
earnings per share of the common stock of the pro forma combined
companies. Based on such analysis and assuming the consideration
to be paid in the Merger for each share of STABA Common Stock
equals 20.87 shares of Hibernia Common Stock, the proposed
transaction would be dilutive to Hibernia's earnings per share in
1994, prior to projected revenue enhancements and cost savings,
and accretive to STABA's earnings per share.
The summary set forth above does not purport to be a
complete description of the analyses performed by National
Capital. The preparation of a fairness opinion necessarily is
not susceptible to partial analysis or summary description.
National Capital believes that its analyses and the summary set
forth above must be considered as a whole and that selecting a
portion of its analyses and factors would create an incomplete
view of the process underlying the analyses set forth in its
presentation to the STABA Board of Directors. In addition,
National Capital may have given certain analyses more or less
weight than other analyses, and may have deemed various
assumptions more or less probable than other assumptions, so that
the ranges of valuations resulting from and particular analysis
described above should not be taken to be National Capital's view
of the actual value of STABA or the combined companies. The fact
that any specific analysis has been referred to in the summary
above is not meant to indicate that such analysis was given
greater weight than any other analysis.
In performing its analyses, National Capital made numerous
assumptions with respect to industry performance, general
business and economic conditions and other matters, many of which
are beyond the control of STABA or Hibernia. The analyses
performed by National Capital are not necessarily indicative of
actual values or actual future results, which may be
significantly more or less favorable than suggested by such
analyses. Such analyses were prepared solely as part of National
Capital's analysis of the fairness of the consideration to be
received by the STABA shareholders in the Merger and were
provided to the STABA Board of Directors in connection with the
delivery of National Capital's opinion. The analyses do not
purport to be appraisals or to reflect the prices at which a
company might actually be sold or the prices at which any
securities may trade at the present time or any time in the
future. National Capital used in its analyses various
projections of future performance prepared by the management of
STABA. The projections are based on numerous variables and
assumptions which are inherently unpredictable and are considered
not certain of occurrence as projected. Accordingly, actual
results could vary significantly from those set forth in such
projections.
As described above, National Capital's opinion and
presentation to the STABA Board of Directors were among the many
factors taken into consideration by the STABA Board in making its
determination to approve the Agreement.
Fees of Investment Advisors
Chaffe was retained by STABA pursuant to an engagement
letter dated April 6, 1994. According to the terms of such
engagement letter, STABA has agreed to pay Chaffe a fee of 1.25%
of the transaction value on the date of the consummation of the
Merger. Assuming a transaction value of $18 million, such fee
would be $225,000. STABA has also agreed to indemnify Chaffe and
its subsidiaries and affiliates, and their respective officers,
directors, shareholders, employees, attorneys, agents and
representatives against certain liabilities.
According to the terms of the Engagement Letter, STABA has
agreed to pay National Capital $10,000 for its fairness opinion.
STABA has also agreed to reimburse National Capital for its
reasonable out-of-pocket expenses. STABA has agreed to indemnify
National Capital, its affiliates, and their respective partners,
directors, officers, agents, employees or counsel against certain
liabilities. An affiliate of National Capital, American Planning
Corporation, or its corporate predecessor have been continuously
engaged by the Bank since 1990. American Planning Corporation
provides profit planning, interest rate risk management, and
strategic planning services to State Bank. The standard fee
arrangement, which is based on bank asset size and the number of
services provided, is a fixed fee of $1900 per month on a month-
to-month basis, with either party having the right to cancel the
arrangement with a 30-day written notice. The revenues received
from State Bank by American Planning Corporation are not
significant in relation to total gross revenues. American
Planning Corporation has performed no services for Hibernia and
has not received any fees from Hibernia.
Surrender of Certificates
As soon as practicable after the Effective Date, the
transfer agent of Hibernia, in its capacity as exchange agent, or
Hibernia, will mail all non-dissenting shareholders of STABA,
among other things, a letter of transmittal, which will contain
instructions for the surrender and exchange of their STABA Common
Stock certificates for certificates representing Hibernia Common
Stock. Until so exchanged, each certificate representing STABA
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 STABA Common Stock certificates for surrender
until they receive further instructions from the exchange agent.
Shareholders who cannot locate their STABA stock
certificates are encouraged to contact Joseph T. Mistreta,
Secretary, at 400 Mississippi Street, Donaldsonville, Louisiana
70346, telephone number (504) 473-3181, prior to the Special
Meeting. New certificates will be issued to STABA shareholders
who have misplaced their certificates only if the shareholder
executes an affidavit certifying that the certificate cannot be
located and agreeing to indemnify STABA and Hibernia (as its
successor), against any claim that may be made against either of
them by any person claiming to own any or all of the shares
represented by the lost certificate(s). STABA or Hibernia (as
its successor) may require a shareholder to post a bond in an
amount sufficient to support the shareholder's indemnification
obligation. Shareholders who cannot locate their stock
certificates and shareholders who hold certificates in names
other than their own are encouraged to resolve those matters
prior to the Effective Date of the Merger in order to avoid
delays in receiving their Hibernia Common Stock if the Merger is
approved and consummated.
Representations and Warranties; Conditions to the Merger; Waiver
The Agreement contains representations and warranties by
STABA regarding, among other things, its organization, ownership
of State Bank, authority to enter into the Agreement, properties
and other assets, insurance policies, financial statements,
pending and threatened litigation or other proceedings,
contractual obligations, contingent liabilities, conflicts,
taxes, loans, employee plans, investments and environmental
matters. The Agreement also contains representations and
warranties by Hibernia regarding, among other things, its
organization and authority to enter into the Agreement,
capitalization, conflicts, accounting methods, regulatory
evaluations, financial statements and other public reports.
Except as otherwise provided in the Agreement, these
representations and warranties will not survive the Effective
Date.
The obligations of Hibernia and STABA to consummate the
Merger are conditioned upon, among other things, approval of the
Agreement by STABA's shareholders; the receipt of necessary
regulatory approvals; the execution and delivery of an employment
agreement between Kenneth A. Bailey and Hibernia which supersedes
the employment agreement by and between Mr. Bailey and State Bank
dated March 1, 1994; the receipt of an opinion to the effect that
the Merger, when consummated in accordance with the terms of the
Agreement, will constitute a reorganization within the meaning of
Section 368(a) of the Code and that, to the extent STABA Common
Stock is exchanged for Hibernia Common Stock, STABA'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 any pending or threatened
litigation or any proceeding initiated by any governmental
authority to restrain or prohibit consummation of the Merger; the
absence of any order, decree or injunction of any court or other
governmental authority enjoining or prohibiting the consummation
of the Merger; the receipt of all required state securities law
permits or authorizations; the accuracy of the representations
and warranties of both parties to the Merger set forth in the
Agreement as of the Closing Date; the listing of the Hibernia
Common Stock to be issued in the Merger on the NYSE; the receipt
of certain opinions of counsel; and in the case of STABA, the
receipt of the fairness opinion of National Capital.
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 STABA's shareholders
may change the Exchange Rate.
Regulatory Approvals
Hibernia, as a registered bank holding company, is regulated
by the Federal Reserve Board. Accordingly, in addition to
approval of the shareholders of STABA, consummation of the Merger
will require the approval of the Federal Reserve Board. HNB, as
a national banking association, is regulated by the OCC, and the
merger between it at State Bank consequently must be approved by
the OCC before it may be effected. Hibernia filed applications
seeking the approval of the Merger by the Federal Reserve Board
and the OCC in mid January of 1995.
After the approval of the OCC has been obtained, STABA and
HNB must wait at least 15 days before consummating 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 to be issued in the
Merger will be registered with the Securities and Exchange
Commission and the state securities regulators in those states
that require such registration. The shares will also be listed
on the NYSE.
Business Pending the Merger
Under the terms of the Agreement, STABA may not and it will
cause State Bank not to, without the prior written consent of
Hibernia or as otherwise provided in the Agreement, among other
things: (i) create or issue any additional shares of capital
stock or any options or other rights to purchase or acquire
shares of capital stock; (ii) enter into any employment contracts
with, or increase the compensation of or pay any bonus to, any of
STABA's directors, officers, or employees, except that bonuses
may be paid in 1995 prior to the effective date of the Agreement
(a) with respect to performance in 1994, in an aggregate amount
of not more than $66,500 and (b) with respect to performance in
1995, in an aggregate amount of not more than an amount equal to
$50,000 multiplied by a percentage representing the number of
months elapsed in 1995 prior to the Effective Date of the Merger;
(iii) enter into or substantially modify any employee benefits
plans; (iv) establish any automatic teller machines, branches or
other banking offices, other than the branch office under
construction in Prairieville, Louisiana, the costs of
construction of which shall not exceed $500,000; (v) make any
capital expenditures in excess of $100,000; (vi) merge with any
other company or bank or liquidate or otherwise dispose of its
assets outside the ordinary course of its business; or (vii)
acquire another company or bank (except in a fiduciary capacity
or in connection with foreclosures related to bona fide loan
transactions). STABA is also prohibited by the terms of the
Agreement from declaring, setting aside or paying dividends or,
directly or indirectly, combining, redeeming, purchasing or
otherwise acquiring, any shares of STABA Common Stock prior to
the Effective Date. Nevertheless, STABA may declare and pay
annualized dividends of up to $1.35 per share of STABA Common
Stock during 1994 and quarterly dividends of up to $0.34 per
share per quarter during 1995.
Effective Date of the Merger; Termination
Unless otherwise mutually agreed upon by Hibernia and STABA,
the closing of the Merger shall take place on the first business
day after the later of: (i) 30 days after the Federal Reserve
Board approves the Merger; (ii) 30 days after the OCC approves
the merger of State Bank with and into HNB; and (iii) 5 days
after the Special Meeting. The parties may agree to close the
Merger on any such later date within 60 days of the Special
Meeting. (The date of the Closing is referred to herein as the
"Closing Date"). The Merger will become effective upon the
issuance by the Louisiana Secretary of State of a certificate of
merger.
The Agreement may be terminated prior to the Closing Date by
either party, whether before or after approval of the Agreement
by the STABA shareholders: (i) in the event of a breach by the
other party of any representation, warranty, covenant or
agreement which has not been cured within any cure 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 June 1, 1995; (iii) if any
application for any required regulatory approval has been denied,
and the time for all appeals of such denial has run; (iv) if the
shareholders of STABA fail to approve the Merger; (v) if there is
a material adverse change in the financial condition of either
party; or (vi) absent an agreement of the parties to the
contrary, if the Merger is not consummated by June 1, 1995. The
Agreement may also be terminated by Hibernia if the Merger does
not qualify for pooling of interests accounting treatment or if
the holders of more than 10% of the STABA Common Stock exercise
and perfect dissenters' rights. The Agreement may be terminated
by STABA if it does not receive an opinion from National Capital
Corporation dated within five days of the Closing Date that the
transaction is fair to the STABA shareholders from a financial
point of view. The Agreement also may be terminated at any time
by the mutual consent of the parties. If terminated, the
Agreement will become null and void, except that certain
provisions thereof relating to expenses and confidentiality and
the accuracy of information provided for inclusion in the
Registration Statement of which this Proxy Statement is a part
will survive any such termination, and any such termination will
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, STABA will be merged with and into
Hibernia and State Bank will be merged with and into HNB and the
separate existences of STABA and State Bank will cease. The
offices of State Bank will be operated as branch banking offices
of HNB. The employees of State Bank on the Effective Date will
become employees of HNB, and will be employed on an "at will"
basis thereafter, subject to any existing employment agreements
or similar contractual obligations assumed by Hibernia.
The Boards of Directors of Hibernia and HNB following the
Merger will consist of those persons serving as directors
immediately prior thereto. Information regarding the directors
of Hibernia elected at its annual meeting of shareholders on
April 26, 1994 is contained in documents incorporated herein by
reference. See "Available Information" and "Incorporation by
Reference." The directors of STABA and State Bank will, by
effect of law, be removed from their positions as directors as of
the Effective Date.
Certain Differences in Rights of Shareholders
If the shareholders of STABA approve the Merger and the
Merger is subsequently consummated, all shareholders of STABA,
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
STABA's Articles of Incorporation and Bylaws. The following is a
summary of the principal differences between the rights of
shareholders of STABA and Hibernia not described elsewhere in
this Proxy Statement.
Number and Classes of Shares. Hibernia's Articles of
Incorporation authorize 200,000,000 shares of common stock and
100,000,000 shares of preferred stock. The Hibernia Board of
Directors has the authority to determine the designations, voting
powers, preferences and relative participating, option or other
special rights, and the qualifications, limitations or
restrictions on such shares of capital stock. The Articles of
Incorporation of STABA authorize 800,000 shares of capital stock,
all of which are common stock.
Directors. Hibernia's Articles of Incorporation provide
that the number of directors is determined by reference to the
Hibernia Bylaws. The Bylaws provide that the exact number of
directors is the number determined, from time to time, by
resolution of the Board of Directors. Currently, such resolution
calls for 22 directors. Such resolution can be modified or
repealed at any time by the Board of Directors. The STABA
Articles of Incorporation provide for a board of between five and
thirty persons, with the exact number to be set in the STABA
Bylaws. The STABA Bylaws currently provide for nine directors.
Because the STABA Bylaws may be amended by vote of a majority of
the directors, the Board has the authority to establish or change
the exact number of directors. Both of Hibernia's and STABA's
Boards are divided into three classes, each of which is elected
for a three-year term.
The Articles of Incorporation and Bylaws of STABA provide
that directors of STABA may only be removed for cause after a
vote of eighty percent of the total voting power. Hibernia's
Bylaws provide that a director may be removed by the Board of
Directors for cause, if he is interdicted or adjudicated an
incompetent or bankrupt, is unable to perform his duties for six
months or becomes affiliated with a competitor of Hibernia.
Shareholders may remove a director by vote of two-thirds of the
total voting power, or by a majority of the voting power if
removed for cause. "Cause" is defined in the Hibernia Bylaws to
mean gross negligence or willful misconduct.
The Bylaws of Hibernia provide that all directors must meet
certain criteria as to age, number of shares of voting securities
held, and non-affiliation with competitors in order to serve on
the Board of Directors. There are no criteria for service on the
STABA Board of Directors specified in STABA's Articles or Bylaws.
Shareholder Proposals. Hibernia's Bylaws contain certain
provisions that allow shareholders to submit a proposal to be
voted upon at any shareholders meeting or to nominate an
individual for election as a director only under certain
circumstances and provided that the shareholder complies with all
of the conditions set forth in the Bylaws. The STABA Bylaws
contain a similar provision relating to the nomination of persons
to serve as director.
Certain Transfer Restrictions Relating to Five Percent
Shareholders. The Articles of Incorporation of STABA do not
restrict the transfer of STABA Common Stock. With respect to
Hibernia, however, Article IX of Hibernia's Articles of
Incorporation restricts the transfer of equity interests in
Hibernia under certain circumstances. This restriction (the
"Five Percent Restriction") is intended to protect Hibernia from
certain transfers of equity interests that could have a material
adverse effect on Hibernia's ability to use certain tax benefits
to reduce its taxable income. Under the Five 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 "five percent shareholder"
of Hibernia or an increase in the percentage stock ownership of
any existing "five percent shareholder."
The Five Percent Restriction does not apply to any transfer
that has been approved in advance by the Board of Directors of
Hibernia, or that 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 carry
forwards or built-in tax losses or other tax attributes. The
Board of Directors may adopt further resolutions exempting
additional transfers from the Five Percent Restriction.
The Five Percent Restriction may adversely affect the
marketability of the Hibernia Common Stock by discouraging
potential investors from acquiring equity securities of Hibernia.
However, although the Five 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 Five 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 Five Percent
Restriction. Any anti-takeover effect of the Five Percent
Restriction will end with the termination of the Five Percent
Restriction on December 29, 1995.
Indemnification of Officers and Directors. Hibernia's
Articles of Incorporation require that Hibernia indemnify the
directors and officers of Hibernia or any of its wholly-owned
subsidiaries if such person has met the applicable standard of
conduct, against expenses, judgments, fines and amounts paid in
settlement actually and reasonably incurred in connection with
any action, suit or proceeding, whether civil or criminal,
administrative or investigative (including any action by or in
the right of Hibernia) by reason of the fact that the person
served as an officer or director of Hibernia or one of its
subsidiaries. Officers and directors may only be indemnified
against expenses in cases brought by the officer or director
against Hibernia if the action is a claim for indemnification,
the officer or director prevails in the action, or
indemnification is included in any settlement or is awarded by
the court. The indemnification provision further requires
Hibernia to advance defense costs to officers and directors in
such suits and proceedings upon receipt of an undertaking to
repay such expenses if it is ultimately determined that the
officer or director is not entitled to indemnification as
authorized by the Article.
The Bylaws of STABA provide that STABA shall have the power
to indemnify its officers, directors, employees and agents to the
full extent permitted by the LBCL.
Liquidity of Stock. There currently is no market for shares
of STABA Common Stock, and such a market is not likely to develop
in the future. Shares of Hibernia Common Stock are listed for
trading on the NYSE. 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. Shares of
Hibernia Common Stock to be issued in the Merger may be freely
resold by persons who are not "affiliates" of STABA or Hibernia.
See "Resale of Hibernia Common Stock," below.
Amendment of Bylaws. The Bylaws of Hibernia may be amended
by vote of two-thirds of the continuing directors, subject to the
power of the shareholders to change or repeal any bylaw so made
by vote of a majority of the total voting power. Pursuant to the
Articles of Incorporation of STABA, bylaws may be adopted,
amended or repealed by a majority of the directors or by the vote
of eighty percent of the total voting power of STABA.
Amendment of Articles of Incorporation. The Articles of
Incorporation of Hibernia may be amended by vote of two-thirds of
the voting power present at a meeting of shareholders. The
Articles of Incorporation of STABA may be amended by vote of a
majority of the total voting power, except for the provisions
relating to the number, classes and removal of directors;
adoption and amendment of bylaws; the vote required for certain
transactions; and the vote required to amend the Articles of
Incorporation, each of which may only be amended by vote of
eighty percent of the total voting power.
Vote for Merger or Consolidation. The Articles of
Incorporation of Hibernia provide that a merger or consolidation
may be approved by vote of a majority of the voting shares issued
and outstanding. The Articles of Incorporation of STABA provide
that a merger, consolidation, sale of assets or dissolution must
be approved by vote of eighty percent of the total voting power,
unless such transaction is approved by a majority of the Board of
Directors, in which case such transaction may be approved by vote
of a majority of the total voting power.
Interests of Certain Persons in the Merger
Indemnification of STABA and State Bank Directors. The
Agreement includes certain provisions that protect the officers
and directors of STABA and State Bank from and against liability
for actions arising while they served in those capacities for
STABA and State Bank. The Agreement provides for indemnification
of such persons to the same extent as they would have been
indemnified under the Articles of Association and/or Bylaws of
Hibernia in effect on the date of the Agreement, 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 the existence of which such person knew or
should have known but failed to make a good faith effort to
require STABA and State Bank to notify its director and officer
liability insurance carrier of prior to the Closing Date.
The Agreement also provides for indemnification of STABA's
officers, directors and any person who controls STABA or State
Bank within the meaning of the Securities Act from and against
any liability arising under the Securities Act or otherwise, if
such liability arises out of or is based on an untrue statement
or omission of a material fact required to be stated in the
Registration Statement 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 STABA or State Bank for use in the Registration Statement.
The Agreement sets no limit on Hibernia's aggregate liability to
indemnify individuals for this type of liability.
Employment Agreements. The consummation of the Merger is
conditioned upon Kenneth A. Bailey and Hibernia entering into an
employment agreement which supersedes the employment agreement by
and between Mr. Bailey and State Bank dated March 1, 1994. The
employment agreement will be for a three year term at Mr.
Bailey's current salary level, and will include a covenant not to
compete for at least two years.
Employee Benefits
The Agreement provides that Hibernia will use its best
efforts to cause to be provided to all employees of STABA and
State Bank who are employed as of the Effective Date the same
employee benefits as those offered by Hibernia and HNB to their
employees, except that employees of STABA and State Bank will not
be required to wait for any period in order to be eligible to
participate in Hibernia's Flex Plan (including its medical and
dental coverage). Hibernia will also give STABA and State Bank
employees who become Hibernia employees full credit for their
years of service (for both eligibility and vesting) with STABA
and State Bank for purposes of Hibernia's 401(k) plan and
Hibernia's Retirement Security Plan.
STABA maintains a retirement plan for its employees that
will be terminated upon consummation of the Merger. Persons
participating in such plan will be entitled to receive their
vested benefit in such plan plus fifty percent of any overfunding
in such plan. The remainder of any overfunding will be paid to
Hibernia.
Expenses
The Agreement provides that all expenses incurred in
connection with the negotiation and execution of the Agreement
and the consummation of the Merger, other than printing expenses,
which shall be borne by Hibernia, will be borne by the party that
incurred them, regardless of whether the Merger is consummated.
Material Tax Consequences
The following is a summary description of the material tax
consequences of the Merger to the shareholders of STABA; 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 specific
analysis 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(a) of the Code,
and that the exchange of STABA Common Stock for Hibernia Common
Stock will not give rise to the recognition of gain or loss for
federal income tax purposes to STABA's shareholders. The parties
have received the opinion of Ernst & Young LLP, certified public
accountants, to the foregoing effects. A copy of such opinion is
attached hereto as Appendix C.
If the Merger constitutes a reorganization within the
meaning of Section 368(a) of the Code: (i) no gain or loss will
be recognized by STABA, Hibernia or HNB by reason of the Merger
or the merger of State Bank into HNB; (ii) a shareholder of STABA
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 STABA Common Stock; (iii) the tax basis in
Hibernia Common Stock received by a shareholder of STABA will be
the same as the tax basis in the STABA Common Stock surrendered
in exchange therefor; (iv) the holding period, for federal income
tax purposes, for Hibernia Common Stock received in exchange for
STABA Common Stock will include the period during which the
shareholder held the STABA Common Stock surrendered in the
exchange, provided that the STABA Common Stock was held as a
capital asset at the Effective Date; and (v) cash received in the
Merger in lieu of fractional shares will not adversely affect the
income tax treatment of the exchange of shares, but will be
treated as a partial redemption of the shareholder's interest in
his stock and therefore will generally be subject to federal
income tax as a capital gain if the shareholder's basis in the
STABA Common Stock is less than the value of the shares of
Hibernia Common Stock received in the Merger.
Any cash payment received by a dissenting shareholder will
be treated as a complete redemption of the shareholder's interest
in his STABA Common Stock, and will generally be subject to
federal and state income tax as a capital gain. For more
information regarding the income tax consequences of cash
payments received by dissenting shareholders, see "Rights of
Dissenting Shareholders."
Resale of Hibernia Common Stock
The shares of Hibernia Common Stock to be exchanged for
STABA shares in the Merger have been registered under the
Securities Act and have been approved for listing on the NYSE.
This registration permits the Hibernia shares to be freely
transferred by anyone who is not an "affiliate" of Hibernia after
the Merger and anyone who was not an "affiliate" of STABA prior
to the Merger, within the meaning of Rule 145 under the
Securities Act. For the purposes of that rule, affiliates are
generally persons (including corporations and partnerships) that
control, are controlled by, or are under common control with
Hibernia or STABA, as the case may be. Executive officers,
directors and 10% shareholders are typically considered
affiliates for these purposes.
Rule 145 imposes certain restrictions on the sale of stock
received in a merger or consolidation by an affiliate of the
acquired company, even if that person does not become an
affiliate of the acquiring company. Affiliates of STABA will
only be permitted to resell any Hibernia shares received by them
in the Merger if they register those shares for resale or they
comply with the restrictions of Rule 145. Anyone who is or may
be an affiliate of STABA should carefully consider the resale
restrictions imposed by Rule 145 before he attempts to transfer
any shares of Hibernia Common Stock received in the Merger.
It is anticipated that each of the persons identified by
STABA as an "affiliate" will execute an agreement in which those
individuals commit to transferring their Hibernia shares only in
accordance with the securities laws and in a manner that does not
jeopardize the treatment of the Merger as a pooling of interests
for accounting purposes. The pooling of interests accounting
rules will prohibit affiliates of STABA from transferring any
Hibernia stock received by them until Hibernia has published
financial results that include at least thirty days of operations
after the consummation of the Merger, which generally will occur
in the month following the fiscal quarter-end that follows the
Effective Date. In addition to the aforementioned agreements,
Hibernia intends to place stop transfer instructions with its
transfer agent with respect to shares of Hibernia Common Stock
issued to affiliates of STABA.
Dividend Reinvestment Plan
Hibernia maintains a Dividend Reinvestment Plan through
which shareholders of Hibernia may reinvest dividends in Hibernia
Common Stock. Shares are purchased for participants in the plan
at their market value, which is determined by the market price of
Hibernia Common Stock 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 and 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 STABA 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. Among other requirements, in
order for the Merger to qualify for pooling of interests
accounting treatment, 90% or more of the outstanding STABA Common
Stock must be exchanged for Hibernia Common Stock. Consequently,
if holders of more than 10% of the outstanding STABA Common Stock
exercise and perfect dissenters' rights, the Merger will not
qualify for pooling of interests accounting. Also, in order for
the pooling of interests accounting method to apply, "affiliates"
of STABA cannot reduce their holdings of Hibernia Common Stock
received in the Merger for a period beginning on the Effective
Date and ending upon the publication of at least 30 days of post-
Merger combined operations of State Bank and HNB. Persons
believed by STABA to be "affiliates" have agreed to comply with
these restrictions. See "Resale of Hibernia Common Stock,"
above.
STABA 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.
RIGHTS OF DISSENTING SHAREHOLDERS
Each STABA shareholder who objects to the Merger is entitled
to the rights and remedies of dissenting shareholders provided in
Section 131 of the LBCL, a copy of which is set forth as Appendix
D 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 eighty percent 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 eighty
percent 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 may then file with the
corporation a written demand for the fair cash value of his, her,
or its shares as of the day 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, her or its
shares in escrow at a bank or trust company, 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 STABA 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
STABA Common Stock to perfect dissenters' rights.
THE FOREGOING SUMMARY OF THE PROVISIONS OF THE LBCL RELATING
TO DISSENTERS' RIGHTS IS NECESSARILY INCOMPLETE AND IS QUALIFIED
IN ITS ENTIRETY BY REFERENCE TO EXCERPTS FROM THE LBCL SET FORTH
HEREIN AS APPENDIX D.
Shareholders of STABA who exercise and perfect dissenters'
rights and who receive cash for their shares of STABA Common
Stock will generally be subject to federal and state income tax
on all or a portion of the amount of cash received. Furthermore,
if the Merger is effected, the cash paid to dissenting
shareholders may be more or less than the value of the Hibernia
Common Stock issued to those shareholders of STABA who voted in
favor of the Merger. The receipt of cash for shares will be
generally treated as a complete redemption of the shareholder's
interest in the stock and, depending on the individual
shareholder's circumstances, may result in a capital gain to such
shareholder. The tax opinion rendered by Ernst & Young LLP and
attached hereto as Appendix C states that payments to dissenting
shareholders are not exempt from federal or state income tax.
Shareholders desiring to dissent from the Merger are urged to
consult their tax advisors with regard to the tax implications to
them of exercising dissenters' rights.
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 "Historical
Hibernia Corporation" on the Pro Forma Combined Statements of
Income is summarized from the supplemental consolidated financial
statements of Hibernia filed in Hibernia's Current Report on Form
8-K filed on October 11, 1994. The year-end information in the
column titled "Restated Hibernia Corporation" is summarized from
the supplemental consolidated financial statements of Hibernia
filed in Hibernia's Current Report on Form 8-K dated February 15,
1995. The information at September 30, 1994 and for the nine-
month periods in the column titled "Historical Hibernia
Corporation" is summarized from the unaudited consolidated
financial statements of Hibernia filed in Hibernia's Quarterly
Report on Form 10-Q for the quarter ended September 30, 1994.
The information at September 30, 1994 and for the nine-month
periods in the column titled "Restated Hibernia Corporation"
reflects the two mergers that were consummated by Hibernia in the
fourth quarter of 1994. The information contained in the columns
titled "American Bank," "Progressive Bancorporation, Inc.," "Bank
of St. John" and "STABA Bancshares, Inc." is based on December
31, 1993, 1992 and 1991 audited financial statements of those
entities and unaudited financial statements of those entities for
the nine-month periods ended September 30, 1994 and 1993. 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 transactions had occurred on the dates indicated or
that may be obtained in the future.
On September 19, 1994, Hibernia announced that it had
reached an agreement to merge with American Bank, headquartered
in Norco, Louisiana. As of September 30, 1994, American Bank had
assets of approximately $92.7 million, shareholders' equity of
$9.3 million and operated five banking offices, one each in
Norco, Boutte, Destrehan, Hahnville and Luling, Louisiana. The
terms of the merger agreement provide that Hibernia will issue
2,250,000 shares of Hibernia Common Stock for all of the
outstanding shares of American Bank, subject to adjustment if the
Average Market Price of Hibernia Common Stock is less than $7.75
or more than $8.875 on the date the merger is closed. In any
event, the value of the Hibernia Common Stock to be issued to
shareholders of American Bank will not be less than $17,437,500,
or more than $19,968,750. For purposes of these pro forma
financial statements, it is assumed that Hibernia will issue
2,405,172 shares of Hibernia Common Stock in connection with the
American Bank merger and the transaction will be accounted for as
a pooling of interests.
On December 1, 1994 Hibernia entered into an agreement and
plan of merger with Progressive, the holding company of
Progressive Bank and Trust Company ("Progressive Bank"),
headquartered in Houma, Louisiana. Progressive Bank operates
five banking offices, three in Houma and one in each of Thibodaux
and Chauvin, Louisiana. As of September 30, 1994 Progressive
reported consolidated assets of $139.6 and consolidated
shareholders equity of $8 million. The terms of the merger
agreement provide that Hibernia will issue 2,500,000 shares of
Hibernia Common Stock for all of the outstanding shares of common
stock of Progressive, and will pay $12.50 (plus all accumulated
and unpaid dividends) in cash for each share of preferred stock
of Progressive. For purposes of these pro forma financial
statements, it is assumed that Hibernia will pay $3,363,000 to
preferred shareholders in connection with the Progressive merger
and the transaction will be accounted for as a pooling of
interests.
On January 25, 1995 Hibernia announced that it had reached
an agreement to merge with Bank of St. John, headquartered in
LaPlace, Louisiana. As of September 30, 1994, Bank of St. John
had assets of approximately $113 million, shareholders equity of
$12 million and operated four banking offices, two in LaPlace and
one in each of Reserve and Edgard, Louisiana, and one loan
production office in Metairie, Louisiana. The terms of the
merger agreement provide that Bank of St. John shareholders will
receive shares of Hibernia Common Stock valued at an aggregate of
$25,875,000. For the purposes of these pro forma financial
statements, it is assumed that Hibernia will issue 3,568,966
shares of Hibernia Common Stock in connection with the Bank of
St. John merger and the transaction will be accounted for as a
pooling of interests.
The mergers with American Bank, Progressive and Bank of St.
John are subject to the satisfaction of certain conditions
similar to those described herein with regard to the Merger.
There can be no assurance that any of such proposed mergers will
occur, or that the timing of the consummation of such mergers
will be as assumed in the following pro forma financial
statements.
PRO FORMA COMBINED BALANCE SHEET
(Unaudited)
The following unaudited pro forma combined balance sheet
combines the restated balance sheet of Hibernia and the
historical balance sheet of STABA as if the Merger had been
effective on September 30, 1994. This unaudited pro forma
combined balance sheet should be read in conjunction with the
historical financial statements and related notes of Hibernia
contained in Hibernia's Quarterly Report on Form 10-Q for the
quarter ended September 30, 1994 and its Current Report on Form
8-K dated February 15, 1995, each incorporated by reference into
this Proxy Statement, and the historical financial statements and
related notes of STABA contained elsewhere herein. The restated
balance sheet as of September 30, 1994 reflects the impact of the
two mergers that were consummated in the fourth quarter of 1994,
as discussed in Notes A and B to the pro forma financial
statements. The unaudited pro forma combined balance sheet also
gives effect to other probable mergers with American Bank,
Progressive and Bank of St. John, as discussed in Notes D and E
to the pro forma combined financial statements. Each probable
merger has been included in the pro forma combined balance sheet
as though the merger had been effective on September 30, 1994.
HIBERNIA CORPORATION
PRO FORMA COMBINED BALANCE SHEET
September 30, 1994
<TABLE>
<CAPTION>
(A) (B)
HISTORICAL RESTATED STABA PRO PRO FORMA
HIBERNIA HIBERNIA BANCSHARES, FORMA HIBERNIA
Unaudited ($ in thousands) CORPORATIONCORPORATION INC. ADJ. CORPORATION
<S> <C> <C> <C> <C> <C>
ASSETS
Cash and due from banks $270,340 $292,950 $4,778 $297,728
Interest-bearing time deposits in domestic banks - 3,846 986 4,832
Short-term investments 69,749 76,027 2,281 78,308
Securities available for sale 529,389 575,302 20,834 596,136
Securities held to maturity 1,632,539 1,845,722 18,346 1,864,068
Loans, net of unearned income 3,081,362 3,276,857 47,698 3,324,555
Reserve for possible loan losses (150,178) (153,993) (1,036) (155,029)
Loans, net 2,931,184 3,122,864 46,662 3,169,526
Bank premises and equipment 100,448 109,145 2,010 111,155
Customers' acceptance liability 9,750 9,750 - 9,750
Receivables arising form securities
transactions not yet settled 16,737 16,737 - 16,737
Other assets 167,656 176,697 1,490 178,187
TOTAL ASSETS $5,727,792 $6,229,040 $97,387 $0 $6,326,427
LIABILITIES
Deposits:
Demand, noninterest-bearing $882,120 $978,679 $14,515 $993,194
Interest-bearing 4,070,271 4,415,681 74,887 4,490,568
Total Deposits 4,952,391 5,394,360 89,402 5,483,762
Short-term borrowings 137,632 141,580 - 141,580
Liability on acceptances 9,750 9,750 - 9,750
Payables arising from securities
transactions not yet settled 16,413 16,413 - 16,413
Other liabilities 107,641 112,080 292 112,372
Debt 3,679 3,679 - 3,679
TOTAL LIABILITIES 5,227,506 5,677,862 89,694 - 5,767,556
SHAREHOLDERS' EQUITY
Preferred Stock - - - -
Common Stock 186,096 208,599 152 $4,615 (C) 213,366
Surplus 392,282 387,588 3,176 (4,615)(C) 386,149
Retained earnings (deficit) (63,011) (29,519) 4,646 (24,873)
Treasury Stock (1,620) (1,620) - (1,620)
Unrealized gain (loss) on securities available for sale (13,461) (13,870) (281) (14,151)
TOTAL SHAREHOLDERS' EQUITY 500,286 551,178 7,693 - 558,871
TOTAL LIABILITIES AND SHAREHOLDERS' EQUITY $5,727,792 $6,229,040 $97,387 $0 $6,326,427
See notes to Pro Forma Combined Financial Statements.
</TABLE>
HIBERNIA CORPORATION
PRO FORMA COMBINED BALANCE SHEET
September 30, 1994
(continued)
<TABLE>
<CAPTION>
(F)
TOTAL
PRO FORMA PROGRESSIVE PRO FORMA
HIBERNIA AMERICAN BANCORPORATION, BANK OF PRO FORMA HIBERNIA
Unaudited ($ in thousands) CORPORATION BANK INC. ST. JOHN ADJUSTMENTS CORPORATION
<S> <C> <C> <C> <C> <C> <C>
ASSETS
Cash and due from banks $297,728 $4,373 $6,256 $4,373 $312,730
Interest-bearing time deposits in domestic banks 4,832 128 - 125 5,085
Short-term investments 78,308 3,400 - 1,000 ($3,363)(D) 79,345
Securities available for sale 596,136 16,630 28,271 25,650 666,687
Securities held to maturity 1,864,068 10,481 24,610 11,907 1,911,066
Loans, net of unearned income 3,324,555 54,362 77,030 67,567 (3,185)(E) 3,520,329
Reserve for possible loan losses (155,029) (715) (1,192) (794) (157,730)
Loans, net 3,169,526 53,647 75,838 66,773 (3,185) 3,362,599
Bank premises and equipment 111,155 2,537 2,797 1,900 118,389
Customers' acceptance liability 9,750 - - - 9,750
Receivables arising form securities
transactions not yet settled 16,737 - - - 16,737
Other assets 178,187 1,503 1,873 1,613 183,176
TOTAL ASSETS $6,326,427 $92,699 $139,645 $113,341 ($6,548) $6,665,564
LIABILITIES
Deposits:
Demand, noninterest-bearing $993,194 $13,948 $20,146 $15,381 $1,042,669
Interest-bearing 4,490,568 68,296 99,159 84,368 4,742,391
Total Deposits 5,483,762 82,244 119,305 99,749 0 5,785,060
Short-term borrowings 141,580 248 - 325 142,153
Liability on acceptances 9,750 - - - 9,750
Payables arising from securities
transactions not yet settled 16,413 - - - 16,413
Other liabilities 112,372 929 4,183 1,233 118,717
Debt 3,679 - 8,097 - ($3,185)(E) 8,591
TOTAL LIABILITIES 5,767,556 83,421 131,585 101,307 (3,185) 6,080,684
SHAREHOLDERS' EQUITY
Preferred Stock - - 130 - (130)(D) -
Common Stock 213,366 484 65 750 14,971 (D) 229,636
Surplus 386,149 3,516 2,016 2,250 (14,995)(D) 375,703
(3,233)(D)
Retained earnings (deficit) (24,873) 5,694 6,432 9,503 (3,244)
Treasury Stock (1,620) - (24) - 24 (D) (1,620)
Unrealized gain (loss) on securities available for sale (14,151) (416) (559) (469) (15,595)
TOTAL SHAREHOLDERS' EQUITY 558,871 9,278 8,060 12,034 (3,363) 584,880
TOTAL LIABILITIES AND SHAREHOLDERS' EQUITY $6,326,427 $92,699 $139,645 $113,341 ($6,548) $6,665,564
See notes to Pro Forma Combined Financial Statements.
</TABLE>
PRO FORMA COMBINED STATEMENTS OF INCOME
(Unaudited)
The following unaudited pro forma combined statements of
income for the nine months ended September 30, 1994 and 1993, and
the years ended December 31, 1993, 1992 and 1991 combines the
restated statements of income of Hibernia and the historical
statements of income of STABA as if the Merger had been effective
on January 1, 1991. The unaudited pro forma combined statements
of income should be read in conjunction with the consolidated
financial statements and related notes of Hibernia contained in
Hibernia's Quarterly Report on Form 10-Q for the quarter ended
September 30, 1994, and its Current Reports on Form 8-K dated
October 11, 1994 and February 15, 1995, each incorporated by
reference into this Proxy Statement, and the historical financial
statements and related notes of STABA, contained elsewhere
herein. The restated statements of income for the annual periods
ended December 31 reflect the impact of the six mergers
consummated in 1994, as discussed in Notes A and B to the pro
forma financial statements. The restated statements of income
for the nine-month periods ended September 30 reflect the impact
of the two mergers that were consummated in the fourth quarter of
1994, as discussed in Notes A and B to the pro forma financial
statements. The costs associated with the Merger, estimated to
be approximately $400,000, will be accounted for as a current
period expense upon consummation of the Merger and have not been
reflected in the pro forma combined statements of income. The
unaudited pro forma combined statements of income also give
effect to probable mergers as discussed in Notes D and E to the
pro forma combined financial statements. Each probable merger
has been included in the pro forma combined statements of income
as though the merger had been effective on January 1, 1991.
HIBERNIA CORPORATION
PRO FORMA COMBINED STATEMENT OF INCOME
Nine Months Ended September 30, 1994
<TABLE>
<CAPTION>
(A) (B)
HISTORICAL RESTATED STABA PRO FORMA
HIBERNIA HIBERNIA BANCSHARES, HIBERNIA
Unaudited ($ in thousands, except per share data) CORPORATION CORPORATION INC. CORPORATION
<S> <C> <C> <C> <C>
Interest Income
Interest and fees on loans $180,138 $193,915 $3,106 $197,021
Interest on securities:
U.S. government securities and obligations of
U.S. government agencies 95,870 105,645 1,524 107,169
Obligations of states and political subdivisions 846 862 229 1,091
Trading account interest 20 20 0 20
Interest on time deposits in domestic banks - 91 30 121
Interest on federal funds sold and securities
purchased under agreements to resell 4,222 4,573 72 4,645
Total Interest Income 281,096 305,106 4,961 310,067
Interest Expense
Interest on deposits 96,833 104,489 1,747 106,236
Interest on federal funds purchased and
securities sold under agreements to repurchase 3,935 3,991 8 3,999
Interest on debt and other 1,863 2,086 0 2,086
Total Interest Expense 102,631 110,566 1,755 112,321
Net Interest Income 178,465 194,540 3,206 197,746
Provision for possible loan losses (17,480) (17,231) 150 (17,081)
Net Interest Income After Provision for
Possible Loan Losses 195,945 211,771 3,056 214,827
Noninterest Income
Trust fees 9,463 9,466 0 9,466
Service charges on deposits 28,692 31,327 348 31,675
Other service, collection and exchange charges 14,458 16,443 45 16,488
Other operating income 7,356 8,038 94 8,132
Securities gains (losses), net (1,517) (1,520) 26 (1,494)
Total Noninterest Income 58,452 63,754 513 64,267
Noninterest Expense
Salaries and employee benefits 81,330 88,759 866 89,625
Occupancy expense, net 16,963 18,368 131 18,499
Equipment expense 9,638 10,419 315 10,734
Data processing expense 14,485 14,732 16 14,748
Foreclosed property expense (5,191) (5,057) 0 (5,057)
Amortization of intangibles 20,476 20,515 0 20,515
Other operating expense 53,151 57,094 717 57,811
Total Noninterest Expense 190,852 204,830 2,045 206,875
Income Before Income Taxes 63,545 70,695 1,524 72,219
Income tax expense 2,524 5,262 517 5,779
Income from Continuing Operations $61,021 $65,433 $1,007 $66,440
Pro Forma Weighted Average Common Shares 96,728,744 108,449,256 2,482,759 110,932,015
Pro Forma Income Per Common Share
from Continuing Operations (G) $0.63 $0.60 $0.60
See notes to Pro Forma Combined Financial Statements.
</TABLE>
Nine Months Ended September 30, 1994
(continued)
<TABLE>
<CAPTION>
(F)
TOTAL
PRO FORMA PROGRESSIVE PRO FORMA
HIBERNIA AMERICAN BANCORPORATION BANK OF HIBERNIA
Unaudited ($ in thousands, except per share data) CORPORATION BANK INC. ST. JOHN CORPORATION
<S> <C> <C> <C> <C> <C>
Interest Income
Interest and fees on loans $197,021 $3,972 $5,654 $4,631 $211,278
Interest on securities:
U.S. government securities and obligations of
U.S. government agencies 107,169 1,101 2,121 1,702 112,093
Obligations of states and political subdivisions 1,091 75 557 120 1,843
Trading account interest 20 - - - 20
Interest on time deposits in domestic banks 121 4 104 5 234
Interest on federal funds sold and securities
purchased under agreements to resell 4,645 179 - 140 4,964
Total Interest Income 310,067 5,331 8,436 6,598 330,432
Interest Expense
Interest on deposits 106,236 1,379 2,861 1,830 112,306
Interest on federal funds purchased and
securities sold under agreements to repurchase 3,999 - 13 1 4,013
Interest on debt and other 2,086 28 477 4 2,595
Total Interest Expense 112,321 1,407 3,351 1,835 118,914
Net Interest Income 197,746 3,924 5,085 4,763 211,518
Provision for possible loan losses (17,081) (370) (722) - (18,173)
Net Interest Income After Provision for
Possible Loan Losses 214,827 4,294 5,807 4,763 229,691
Noninterest Income
Trust fees 9,466 - - - 9,466
Service charges on deposits 31,675 473 709 480 33,337
Other service, collection and exchange charges 16,488 91 369 97 17,045
Other operating income 8,132 861 783 676 10,452
Securities gains (losses), net (1,494) 750 624 751 631
Total Noninterest Income 64,267 2,175 2,485 2,004 70,931
Noninterest Expense
Salaries and employee benefits 89,625 1,329 1,769 1,624 94,347
Occupancy expense, net 18,499 406 288 357 19,550
Equipment expense 10,734 78 169 120 11,101
Data processing expense 14,748 470 117 402 15,737
Foreclosed property expense (5,057) 15 141 74 (4,827)
Amortization of intangibles 20,515 - 89 - 20,604
Other operating expense 57,811 709 1,436 608 60,564
Total Noninterest Expense 206,875 3,007 4,009 3,185 217,076
Income Before Income Taxes 72,219 3,462 4,283 3,582 83,546
Income tax expense 5,779 1,123 1,368 1,154 9,424
Income from Continuing Operations $66,440 $2,339 $2,915 $2,428 $74,122
Pro Forma Weighted Average Common Shares 110,932,015 2,405,172 2,500,000 3,568,966 119,406,153
Pro Forma Income Per Common Share
from Continuing Operations (G) $0.60 $0.62
See notes to Pro Forma Combined Financial Statements.
</TABLE>
HIBERNIA CORPORATION
PRO FORMA COMBINED STATEMENT OF INCOME
Nine Months Ended September 30, 1993
<TABLE>
<CAPTION>
(A) (B)
HISTORICAL RESTATED STABA PRO FORMA
HIBERNIA HIBERNIA BANCSHARES, HIBERNIA
Unaudited ($ in thousands, except per share data) CORPORATION CORPORATION INC. CORPORATION
<S> <C> <C> <C> <C>
Interest Income
Interest and fees on loans $167,064 $181,230 $2,938 $184,168
Interest on securities:
U.S. government securities and obligations of
U.S. government agencies 96,220 107,016 1,571 108,587
Obligations of states and political subdivisions 855 886 226 1,112
Trading account interest 24 24 0 24
Interest on time deposits in domestic banks 188 361 60 421
Interest on federal funds sold and securities
purchased under agreements to resell 7,780 8,049 149 8,198
Total Interest Income 272,131 297,566 4,944 302,510
Interest Expense
Interest on deposits 91,187 99,016 1,933 100,949
Interest on federal funds purchased and
securities sold under agreements to repurchase 2,944 2,948 0 2,948
Interest on debt and other 2,003 2,712 0 2,712
Total Interest Expense 96,134 104,676 1,933 106,609
Net Interest Income 175,997 192,890 3,011 195,901
Provision for possible loan losses 11,983 14,256 180 14,436
Net Interest Income After Provision for
Possible Loan Losses 164,014 178,634 2,831 181,465
Noninterest Income
Trust fees 9,851 9,854 0 9,854
Service charges on deposits 26,148 28,986 290 29,276
Other service, collection and exchange charges 12,270 14,135 47 14,182
Other operating income 7,724 8,536 91 8,627
Securities gains, net 100 27 0 27
Total Noninterest Income 56,093 61,538 428 61,966
Noninterest Expense
Salaries and employee benefits 72,837 79,732 781 80,513
Occupancy expense, net 16,532 18,207 112 18,319
Equipment expense 9,369 10,058 262 10,320
Data processing expense 12,755 13,152 18 13,170
Foreclosed property expense 5,883 6,700 0 6,700
Amortization of intangibles 6,119 6,171 0 6,171
Other operating expense 53,278 56,933 673 57,606
Total Noninterest Expense 176,773 190,953 1,846 192,799
Income Before Income Taxes and
Cumulative Effect of Accounting Change 43,334 49,219 1,413 50,632
Income tax expense 4,335 6,639 420 7,059
Income from Continuing Operations $38,999 $42,580 $993 $43,573
Pro Forma Weighted Average Common Shares 96,055,341 107,775,853 2,482,759 110,258,612
Pro Forma Income Per Common Share
from Continuing Operations (G) $0.41 $0.40 $0.40
See notes to Pro Forma Combined Financial Statements.
</TABLE>
Nine Months Ended September 30, 1993
(continued)
<TABLE>
<CAPTION>
(F)
TOTAL
PRO FORMA PROGRESSIVE PRO FORMA
HIBERNIA AMERICAN BANCORPORATION BANK OF HIBERNIA
Unaudited ($ in thousands, except per share data) CORPORATION BANK INC. ST. JOHN CORPORATION
<S> <C> <C> <C> <C> <C>
Interest Income
Interest and fees on loans $184,168 $3,755 $5,561 $3,951 $197,435
Interest on securities:
U.S. government securities and obligations of
U.S. government agencies 108,587 1,407 2,387 2,266 114,647
Obligations of states and political subdivisions 1,112 11 420 42 1,585
Trading account interest 24 - 0 - 24
Interest on time deposits in domestic banks 421 4 71 5 501
Interest on federal funds sold and securities 0
purchased under agreements to resell 8,198 95 0 85 8,378
Total Interest Income 302,510 5,272 8,439 6,349 322,570
Interest Expense
Interest on deposits 100,949 1,415 2,986 1,830 107,180
Interest on federal funds purchased and 0
securities sold under agreements to repurchase 2,948 1 19 2 2,970
Interest on debt and other 2,712 123 706 4 3,545
Total Interest Expense 106,609 1,539 3,711 1,836 113,695
Net Interest Income 195,901 3,733 4,728 4,513 208,875
Provision for possible loan losses 14,436 - 168 - 14,604
Net Interest Income After Provision for
Possible Loan Losses 181,465 3,733 4,560 4,513 194,271
Noninterest Income
Trust fees 9,854 - 0 - 9,854
Service charges on deposits 29,276 484 577 477 30,814
Other service, collection and exchange charges 14,182 78 266 72 14,598
Other operating income 8,627 88 346 66 9,127
Securities gains, net 27 5 75 34 141
Total Noninterest Income 61,966 655 1,264 649 64,534
Noninterest Expense
Salaries and employee benefits 80,513 1,313 1,537 1,459 84,822
Occupancy expense, net 18,319 358 239 276 19,192
Equipment expense 10,320 55 89 89 10,553
Data processing expense 13,170 399 162 315 14,046
Foreclosed property expense 6,700 27 (70) 307 6,964
Amortization of intangibles 6,171 - 89 - 6,260
Other operating expense 57,606 842 1,954 448 60,850
Total Noninterest Expense 192,799 2,994 4,000 2,894 202,687
Income Before Income Taxes and
Cumulative Effect of Accounting Change 50,632 1,394 1,824 2,268 56,118
Income tax expense 7,059 438 690 738 8,925
Income from Continuing Operations $43,573 $956 $1,134 $1,530 $47,193
Pro Forma Weighted Average Common Shares 110,258,612 2,405,172 2,500,000 3,568,966 118,732,750
Pro Forma Income Per Common Share
from Continuing Operations (G) $0.40 $0.40
</TABLE>
HIBERNIA CORPORATION
PRO FORMA COMBINED STATEMENT OF INCOME
Year Ended December 31, 1993
<TABLE>
<CAPTION>
(A) (B)
HISTORICAL RESTATED STABA PRO FORMA
HIBERNIA HIBERNIA BANCSHARES, HIBERNIA
Unaudited ($ in thousands, except per share data) CORPORATION CORPORATION INC. CORPORATION
<S> <C> <C> <C> <C>
Interest Income
Interest and fees on loans $224,146 $243,546 $3,951 $247,497
Interest on securities:
U.S. government securities and obligations of
U.S. government agencies 126,820 140,858 2,073 142,931
Obligations of states and political subdivisions 1,222 1,338 294 1,632
Trading account interest 33 33 - 33
Interest on time deposits in domestic banks 295 550 77 627
Interest on federal funds sold and securities
purchased under agreements to resell 9,219 9,592 166 9,758
Total Interest Income 361,735 395,917 6,561 402,478
Interest Expense
Interest on deposits 121,000 131,292 2,542 133,834
Interest on federal funds purchased and
securities sold under agreements to repurchase 4,002 4,016 - 4,016
Interest on debt and other 2,669 3,618 - 3,618
Total Interest Expense 127,671 138,926 2,542 141,468
Net Interest Income 234,064 256,991 4,019 261,010
Provision for possible loan losses (5,607) (3,734) 270 (3,464)
Net Interest Income After Provision for
Possible Loan Losses 239,671 260,725 3,749 264,474
Noninterest Income
Trust fees 13,310 13,314 - 13,314
Service charges on deposits 34,937 38,602 402 39,004
Other service, collection and exchange charges 17,367 19,933 54 19,987
Gain on settlement of acquired loans 1,308 1,308 - 1,308
Other operating income 7,326 8,083 123 8,206
Securities gains, net 165 92 91 183
Total Noninterest Income 74,413 81,332 670 82,002
Noninterest Expense
Salaries and employee benefits 98,517 108,088 1,120 109,208
Occupancy expense, net 22,757 24,789 163 24,952
Equipment expense 12,577 13,509 318 13,827
Data processing expense 16,753 17,099 27 17,126
Foreclosed property expense 7,135 7,883 - 7,883
Provision for data processing enhancements 11,991 11,991 - 11,991
Other operating expense 83,604 89,271 1,011 90,282
Total Noninterest Expense 253,334 272,630 2,639 275,269
Income Before Income Taxes and
Cumulative Effect of Accounting Change 60,750 69,427 1,780 71,207
Income tax expense 5,359 8,365 528 8,893
Income from Continuing Operations $55,391 $61,062 $1,252 $62,314
Pro Forma Weighted Average Common Shares 96,196,623 107,917,135 2,482,759 110,399,894
Pro Forma Income Per Common Share
from Continuing Operations (G) $0.58 $0.57 $0.56
See notes to Pro Forma Combined Financial Statements.
</TABLE>
Year Ended December 31, 1993
(continued)
<TABLE>
<CAPTION>
(F)
TOTAL
PRO FORMA PROGRESSIVE PRO FORMA
HIBERNIA AMERICAN BANCORPORATION BANK OF HIBERNIA
Unaudited ($ in thousands, except per share data) CORPORATION BANK INC. ST. JOHN CORPORATION
<S> <C> <C> <C> <C> <C>
Interest Income
Interest and fees on loans $247,497 $4,705 $7,691 $5,276 $265,169
Interest on securities:
U.S. government securities and obligations of
U.S. government agencies 142,931 1,756 2,969 2,871 150,527
Obligations of states and political subdivisions 1,632 21 596 64 2,313
Trading account interest 33 0 - - 33
Interest on time deposits in domestic banks 627 6 87 7 727
Interest on federal funds sold and securities
purchased under agreements to resell 9,758 125 - 96 9,979
Total Interest Income 402,478 6,613 11,343 8,314 428,748
Interest Expense
Interest on deposits 133,834 1,851 3,905 2,386 141,976
Interest on federal funds purchased and
securities sold under agreements to repurchase 4,016 - 24 3 4,043
Interest on debt and other 3,618 - 784 5 4,407
Total Interest Expense 141,468 1,851 4,713 2,394 150,426
Net Interest Income 261,010 4,762 6,630 5,920 278,322
Provision for possible loan losses (3,464) 0 168 50 (3,246)
Net Interest Income After Provision for
Possible Loan Losses 264,474 4,762 6,462 5,870 281,568
Noninterest Income
Trust fees 13,314 0 - - 13,314
Service charges on deposits 39,004 625 933 649 41,211
Other service, collection and exchange charges 19,987 92 307 109 20,495
Gain on settlement of acquired loans 1,308 0 - - 1,308
Other operating income 8,206 463 159 365 9,193
Securities gains, net 183 5 63 34 285
Total Noninterest Income 82,002 1,185 1,462 1,157 85,806
Noninterest Expense
Salaries and employee benefits 109,208 1,559 2,228 1,306 114,301
Occupancy expense, net 24,952 285 331 405 25,973
Equipment expense 13,827 282 138 122 14,369
Data processing expense 17,126 534 265 427 18,352
Foreclosed property expense 7,883 587 209 484 9,163
Provision for data processing enhancements 11,991 0 - - 11,991
Other operating expense 90,282 981 2,440 1,410 95,113
Total Noninterest Expense 275,269 4,228 5,611 4,154 289,262
Income Before Income Taxes and
Cumulative Effect of Accounting Change 71,207 1,719 2,313 2,873 78,112
Income tax expense 8,893 508 922 943 11,266
Income from Continuing Operations $62,314 $1,211 $1,391 $1,930 $66,846
Pro Forma Weighted Average Common Shares 110,399,894 2,405,172 2,500,000 3,568,966 118,874,032
Pro Forma Income Per Common Share
from Continuing Operations (G) $0.56 $0.56
See notes to Pro Forma Combined Financial Statements.
</TABLE>
HIBERNIA CORPORATION
PRO FORMA COMBINED STATEMENT OF INCOME
Year Ended December 31, 1992
<TABLE>
<CAPTION>
(A) (B)
HISTORICAL RESTATED STABA PRO FORMA
HIBERNIA HIBERNIA BANCSHARES, HIBERNIA
Unaudited ($ in thousands, except per share data) CORPORATION CORPORATION INC. CORPORATION
<S> <C> <C> <C> <C>
Interest Income
Interest and fees on loans $293,980 $313,577 $3,716 $317,293
Interest on securities:
U.S. government securities and obligations of
U.S. government agencies 111,482 128,401 2,023 130,424
Obligations of states and political subdivisions 1,202 1,425 282 1,707
Trading account interest 99 99 - 99
Interest on time deposits in domestic banks 361 613 81 694
Interest on federal funds sold and securities
purchased under agreements to resell 15,198 15,795 374 16,169
Total Interest Income 422,322 459,910 6,476 466,386
Interest Expense
Interest on deposits 167,648 181,828 2,920 184,748
Interest on federal funds purchased and
securities sold under agreements to repurchase 6,910 6,910 - 6,910
Interest on debt and other 13,366 14,098 - 14,098
Total Interest Expense 187,924 202,836 2,920 205,756
Net Interest Income 234,398 257,074 3,556 260,630
Provision for possible loan losses 68,327 71,093 363 71,456
Net Interest Income After Provision for
Possible Loan Losses 166,071 185,981 3,193 189,174
Noninterest Income
Trust fees 12,849 12,860 - 12,860
Service charges on deposits 36,451 40,279 406 40,685
Other service, collection and exchange charges 15,745 18,293 31 18,324
Gain on settlement of acquired loans 4,151 4,151 - 4,151
Loss on planned sale of Texas bank (2,934) (2,934) - (2,934)
Other operating income 9,760 10,431 67 10,498
Securities gains, net 17,336 17,358 - 17,358
Total Noninterest Income 93,358 100,438 504 100,942
Noninterest Expense
Salaries and employee benefits 99,480 107,968 998 108,966
Occupancy expense, net 25,393 27,349 162 27,511
Equipment expense 15,019 15,689 218 15,907
Data processing expense 17,726 18,727 19 18,746
Foreclosed property expense 22,702 25,368 13 25,381
Other operating expense 77,691 84,242 874 85,116
Total Noninterest Expense 258,011 279,343 2,284 281,627
Income Before Income Taxes and
Extraordinary Items 1,418 7,076 1,413 8,489
Income tax expense 3,170 5,113 349 5,462
Income (Loss) from Continuing Operations ($1,752) $1,963 $1,064 $3,027
Pro Forma Weighted Average Common Shares 42,629,773 54,350,285 2,482,759 56,833,044
Pro Forma Income (Loss) Per Common Share
from Continuing Operations (G) ($0.04) $0.04 $0.05
See notes to Pro Forma Combined Financial Statements.
</TABLE>
Year Ended December 31, 1992
(continued)
<TABLE>
<CAPTION>
(F)
TOTAL
PRO FORMA PROGRESSIVE PRO FORMA
HIBERNIA AMERICAN BANCORPORATION BANK OF HIBERNIA
Unaudited ($ in thousands, except per share data) CORPORATION BANK INC. ST. JOHN CORPORATION
<S> <C> <C> <C> <C> <C>
Interest Income
Interest and fees on loans $317,293 $4,360 $7,305 $4,549 $333,507
Interest on securities:
U.S. government securities and obligations of
U.S. government agencies 130,424 2,250 3,184 3,590 139,448
Obligations of states and political subdivisions 1,707 0 17 11 1,735
Trading account interest 99 0 - - 99
Interest on time deposits in domestic banks 694 4 188 4 890
Interest on federal funds sold and securities
purchased under agreements to resell 16,169 159 - 175 16,503
Total Interest Income 466,386 6,773 10,694 8,329 492,182
Interest Expense
Interest on deposits 184,748 2,453 4,514 3,151 194,866
Interest on federal funds purchased and
securities sold under agreements to repurchase 6,910 0 - 2 6,912
Interest on debt and other 14,098 0 618 6 14,722
Total Interest Expense 205,756 2,453 5,132 3,159 216,500
Net Interest Income 260,630 4,320 5,562 5,170 275,682
Provision for possible loan losses 71,456 0 101 - 71,557
Net Interest Income After Provision for
Possible Loan Losses 189,174 4,320 5,461 5,170 204,125
Noninterest Income
Trust fees 12,860 0 - - 12,860
Service charges on deposits 40,685 672 861 653 42,871
Other service, collection and exchange charges 18,324 149 244 146 18,863
Gain on settlement of acquired loans 4,151 0 - - 4,151
Loss on planned sale of Texas bank (2,934) 0 - - (2,934)
Other operating income 10,498 505 62 478 11,543
Securities gains, net 17,358 84 114 63 17,619
Total Noninterest Income 100,942 1,410 1,281 1,340 104,973
Noninterest Expense
Salaries and employee benefits 108,966 1,379 1,894 1,049 113,288
Occupancy expense, net 27,511 258 280 364 28,413
Equipment expense 15,907 252 139 78 16,376
Data processing expense 18,746 462 243 390 19,841
Foreclosed property expense 25,381 967 371 1,111 27,830
Other operating expense 85,116 989 1,952 1,117 89,174
Total Noninterest Expense 281,627 4,307 4,879 4,109 294,922
Income Before Income Taxes and
Extraordinary Items 8,489 1,423 1,863 2,401 14,176
Income tax expense 5,462 422 50 800 6,734
Income (Loss) from Continuing Operations $3,027 $1,001 $1,813 $1,601 $7,442
Pro Forma Weighted Average Common Shares 56,833,044 2,405,172 2,500,000 3,568,966 65,307,182
Pro Forma Income (Loss) Per Common Share
from Continuing Operations (G) $0.05 $0.11
See notes to Pro Forma Combined Financial Statements.
</TABLE>
HIBERNIA CORPORATION
PRO FORMA COMBINED STATEMENT OF INCOME
Year Ended December 31, 1991
<TABLE>
<CAPTION>
(A) (B)
HISTORICAL RESTATED STABA PRO FORMA
HIBERNIA HIBERNIA BANCSHARES, HIBERNIA
Unaudited ($ in thousands, except per share data) CORPORATION CORPORATION INC. CORPORATION
<S> <C> <C> <C> <C>
Interest Income
Interest and fees on loans $495,697 $517,180 $3,606 $520,786
Interest on securities:
U.S. government securities and obligations of
U.S. government agencies 135,929 153,644 1,736 155,380
Obligations of states and political subdivisions 6,274 6,732 253 6,985
Trading account interest 70 70 - 70
Interest on time deposits in domestic banks 522 813 125 938
Interest on federal funds sold and securities
purchased under agreements to resell 11,417 12,663 349 13,012
Total Interest Income 649,909 691,102 6,069 697,171
Interest Expense
Interest on deposits 355,371 376,922 3,365 380,287
Interest on federal funds purchased and
securities sold under agreements to repurchase 16,794 16,794 - 16,794
Interest on debt and other 14,396 15,234 - 15,234
Total Interest Expense 386,561 408,950 3,365 412,315
Net Interest Income 263,348 282,152 2,704 284,856
Provision for possible loan losses 180,589 184,350 175 184,525
Net Interest Income After Provision for
Possible Loan Losses 82,759 97,802 2,529 100,331
Noninterest Income
Trust fees 14,844 14,861 - 14,861
Service charges on deposits 39,209 42,599 367 42,966
Other service, collection and exchange charges 21,775 23,643 83 23,726
Gain on settlement of acquired loans 9,043 9,043 - 9,043
Other operating income 13,247 13,585 28 13,613
Securities gains (losses), net 17,707 17,893 - 17,893
Total Noninterest Income 115,825 121,624 478 122,102
Noninterest Expense
Salaries and employee benefits 128,063 135,270 868 136,138
Occupancy expense, net 30,823 32,829 137 32,966
Equipment expense 15,579 16,166 201 16,367
Data processing expense 12,783 13,652 13 13,665
Foreclosed property expense 28,781 31,236 12 31,248
Other operating expense 122,011 126,949 744 127,693
Total Noninterest Expense 338,040 356,102 1,975 358,077
Income (Loss) Before Income Taxes,
Extraordinary Item and Cumulative Effect
of Accounting Change (139,456) (136,676) 1,032 (135,644)
Income tax expense 1,911 2,740 270 3,010
Income (Loss) from Continuing Operations ($141,367) ($139,416) $762 ($138,654)
Pro Forma Weighted Average Common Shares 41,138,432 52,858,944 2,482,759 55,341,703
Pro Forma Income (Loss) Per Common Share
from Continuing Operations (G) ($3.44) ($2.64) ($2.51)
See notes to Pro Forma Combined Financial Statements.
</TABLE>
Year Ended December 31, 1991
(continued)
<TABLE>
<CAPTION>
(F)
TOTAL
PRO FORMA PROGRESSIVE PRO FORMA
HIBERNIA AMERICAN BANCORPORATION BANK OF HIBERNIA
Unaudited ($ in thousands, except per share data) CORPORATION BANK INC. ST. JOHN CORPORATION
<S> <C> <C> <C> <C> <C>
Interest Income
Interest and fees on loans $520,786 $4,060 $6,741 $4,223 $535,810
Interest on securities:
U.S. government securities and obligations of
U.S. government agencies 155,380 2,336 3,127 3,718 164,561
Obligations of states and political subdivisions 6,985 13 34 19 7,051
Trading account interest 70 0 - - 70
Interest on time deposits in domestic banks 938 6 53 8 1,005
Interest on federal funds sold and securities
purchased under agreements to resell 13,012 211 146 210 13,579
Total Interest Income 697,171 6,626 10,101 8,178 722,076
Interest Expense
Interest on deposits 380,287 3,623 5,438 4,537 393,885
Interest on federal funds purchased and
securities sold under agreements to repurchase 16,794 0 3 1 16,798
Interest on debt and other 15,234 0 548 13 15,795
Total Interest Expense 412,315 3,623 5,989 4,551 426,478
Net Interest Income 284,856 3,003 4,112 3,627 295,598
Provision for possible loan losses 184,525 90 30 225 184,870
Net Interest Income After Provision for
Possible Loan Losses 100,331 2,913 4,082 3,402 110,728
Noninterest Income
Trust fees 14,861 0 - - 14,861
Service charges on deposits 42,966 677 901 588 45,132
Other service, collection and exchange charges 23,726 144 315 154 24,339
Gain on settlement of acquired loans 9,043 0 - - 9,043
Other operating income 13,613 269 (38) 187 14,031
Securities gains (losses), net 17,893 0 (377) - 17,516
Total Noninterest Income 122,102 1,090 801 929 124,922
Noninterest Expense
Salaries and employee benefits 136,138 1,355 1,678 1,023 140,194
Occupancy expense, net 32,966 252 315 290 33,823
Equipment expense 16,367 209 119 31 16,726
Data processing expense 13,665 392 396 397 14,850
Foreclosed property expense 31,248 297 304 417 32,266
Other operating expense 127,693 1,009 1,373 872 130,947
Total Noninterest Expense 358,077 3,514 4,185 3,030 368,806
Income (Loss) Before Income Taxes,
Extraordinary Item and Cumulative Effect
of Accounting Change (135,644) 489 698 1,301 (133,156)
Income tax expense 3,010 122 45 393 3,570
Income (Loss) from Continuing Operations ($138,654) $367 $653 $908 ($136,726)
Pro Forma Weighted Average Common Shares 55,341,703 2,405,172 2,500,000 3,568,966 63,815,841
Pro Forma Income (Loss) Per Common Share
from Continuing Operations (G) ($2.51) ($2.14)
See notes to Pro Forma Combined Financial Statements.
</TABLE>
<PAGE>
HIBERNIA CORPORATION
NOTES TO PRO FORMA COMBINED FINANCIAL STATEMENTS
A. The "Historical Hibernia Corporation" information reflects the
results of the mergers with Commercial Bancshares, Inc. and
Bastrop National Bank, consummated on July 1, 1994; and First
Continental Bancshares, Inc. and First Bancorp of Louisiana,
Inc., consummated on August 1, 1994, (as reported in the
Report on Form 8-K dated October 11, 1994 with respect to
year-end information and Hibernia's Quarterly report on Form
10-Q for September 30, 1994 with respect to September 30, 1994
information) which were accounted for as poolings of
interests. Hibernia Corporation issued 13,021,494 shares of
common stock with a stated value of $25,001,000 to effect
these mergers. Debt totaling $17,825,000 and related accrued
interest and premium of $4,930,000 was retired in conjunction
with these mergers.
B. The "Restated Hibernia Corporation" information reflects the
results of the mergers with Pioneer Bancshares Corporation and
First State Bank and Trust Company, consummated on December
31, 1994, (as reported on Form 8-K dated February 15, 1995)
which were accounted for as poolings of interests. Hibernia
Corporation issued 11,720,512 shares of common stock with a
stated value of $22,503,000 to effect these mergers. Debt
totaling $2,071,000 and related accrued interest of $30,000 as
of September 30, 1994 is assumed to have been retired in
conjunction with these mergers.
C. Hibernia Corporation will issue common stock with an aggregate
market value at the date of merger of $18,000,000 to effect
the merger with STABA Bancshares, Inc. (STABA). The Hibernia
Corporation common stock is assumed to have a market value of
$7.25 per share resulting in the issuance of 2,482,759 shares
of common stock for all the outstanding common stock of STABA
(exchange ratio of 20.87).
The number of shares of Hibernia common stock to be exchanged
in the STABA merger will be the number that equals 18,000,000
divided by the average market price of Hibernia common stock
on the Closing Date.
The stated value of Hibernia Corporation common stock is $1.92
per share. In accordance with the pooling of interests method
of accounting, the historical equities of the merged companies
are combined.
D. In addition to the STABA merger, Hibernia Corporation is a
party to pending mergers with American Bank (American),
Progressive Bancorporation, Inc. (Progressive) and Bank of St.
John (St. John). Hibernia Corporation will issue common stock
to effect these mergers in transactions using the pooling of
interests method of accounting.
The Hibernia Corporation common stock is assumed to have a
market value of $7.25 per share and a stated value of $1.92
per share.
If the average market price is less than $7.75 per share, then
the number of shares of Hibernia common stock to be exchanged
in the American merger will be increased proportionately with
the decrease in the average market price below that level to
ensure that an aggregate value of $17,437,500 of Hibernia
common stock is exchanged in the merger. Similarly, if the
average market price is more than $8.875 per share, then the
number of shares of Hibernia common stock to be exchanged in
the merger will be decreased proportionately with the increase
in the average market price above that level to ensure that an
aggregate value of $19,968,750 of Hibernia common stock is
exchanged in the merger. However, if the average market price
is between $8.875 and $7.75, the number of shares to be
exchanged will remain constant, even if the average market
price fluctuates within that range.
The number of shares of Hibernia common stock to be exchanged
in the Progressive merger will be 2,500,000 shares. Upon the
merger each share of Progressive Preferred Stock issued and
outstanding will be converted into the right to receive cash
in the amount of $12.50 per share plus all accumulated and
unpaid dividends thereon.
Hibernia Corporation will issue common stock with an aggregate
market value at the date of the St. John merger of
$25,875,000. In the event the average market price of
Hibernia common stock on the closing date is less than $7.25,
the exchange rate for the merger shall be calculated as
follows: 3,568,966 divided by 300,000 (the number of issued
and outstanding shares of Bank of St. John common stock). In
the event the average market price of Hibernia common stock on
the closing date is greater that $7.75, the exchange rate
shall be calculated as follows: 3,338,710 divided by 300,000.
In accordance with the pooling of interests method of
accounting, the historical equities of the merged companies
are combined.
Hibernia Mkt Value Stated Value Exchange
Shares of Shares of Shares Ratio
American 2,405,172 $17,437,000 $ 4,618,000 4.97
Progressive 2,500,000 18,125,000 4,800,000 4.05
St. John 3,568,966 25,875,000 6,852,000 11.90
Total 8,474,138 $61,437,000 $16,270,000
E. The Progressive debt of $3,185,000 is held by Hibernia
National Bank and will be offset against the outstanding loan
balance upon consummation of the merger.
F. In connection with obtaining regulatory approval of the
Pioneer transaction, Hibernia has agreed to sell three of the
branches currently operated by Pioneer. The sale of
thesebranches will include the physical premises as well as
all deposits, loans and other assets held by those branches.
Aggregate deposits and aggregate loans held by those branches
as of June 30, 1994 were approximately $43 million and $21
million, respectively. On December 16, 1994 Hibernia executed
a definitive agreement to sell these branches. The sale of
these branches is expected to close in the first quarter of
1995, and will not affect the consideration to be paid to
Pioneer shareholders in that merger. The effect of the sale
of these branches is considered immaterial and has not been
reflected in the pro forma combined financial statements.
G. Hibernia Corporation expects to achieve savings through
reductions in interest expense and operating costs in
connection with the proposed mergers. The savings vary from
merger to merger depending upon Hibernia Corporation's pre-
merger operations in the respective geographic area. The
majority of the savings will be achieved through the
retirement of long-term debt upon merger and consolidation of
certain operations. The extent to which the savings will be
achieved depends, among other things, on the regulatory
environment and economic conditions, and may be affected by
unanticipated changes in business activities, inflation and
certain external factors such as 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.
CERTAIN INFORMATION ABOUT HIBERNIA
Hibernia is a Louisiana corporation registered under the
BHCA. As of September 30, 1994, Hibernia had total consolidated
assets of approximately $5.7 billion and shareholders' equity of
approximately $500 million. Hibernia has a single banking
subsidiary, HNB, a national banking association that provides
retail and commercial banking services through 101 branches
throughout Louisiana. The principal executive offices of
Hibernia are located at 313 Carondelet Street, New Orleans,
Louisiana 70130, and its telephone number is (504) 533-5532.
On January 9, 1995 Hibernia reported net income for 1994 of
$84.7 million, up 33% from $63.8 million in 1993. Earnings per
share increased to $.78 in 1994 compared to $.59 in 1993. Return
on assets and return on equity for 1994 increased to 1.35% and
15.63%, respectively, from 1.06% and 13.33% for 1993. Loans
increased 15% to $3.4 billion and assets increased 2% to $6.3
billion at the end of 1994. Non-performing assets and non-
performing loans were reduced by approximately two-thirds during
1994. In the fourth quarter of 1994 Hibernia reported income of
$16.5 million ($.15 per share), down 11% from $18.5 million ($.17
per share) for the fourth quarter of 1993. The major portion of
such decrease resulted from Hibernia's merger activities in 1994,
and included merger related charges of $4.2 million and a $2.4
million loss on the sale of securities acquired in the mergers to
conform the acquired portfolios to Hibernia's objectives for
risk, liquidity and returns.
In addition to STABA, Hibernia has entered into definitive
merger agreements with three other financial institutions,
American Bank, Progressive and Bank of St. John. Each of these
proposed transactions are subject to certain conditions, similar
to the conditions to the Merger described herein. These
transactions may be consummated before or after consummation of
the Merger. Shareholders of STABA will not have the right to
vote on any of the other pending transactions. In addition, if
the Merger is consummated prior to consummation of any or all of
the other transactions, former shareholders of STABA who have not
exercised and perfected dissenters' rights will be shareholders
of Hibernia at the time those transactions are consummated.
Shareholders of Hibernia do not have the right to vote on any of
the pending merger transactions.
On a pro forma basis, as of September 30, 1994, the book
value of the shares of Hibernia Common Stock would be increased
by the pending transactions. The effect of the Merger on the
book value of Hibernia Common Stock, as well as STABA Common
Stock, is shown under "Comparative Per Share Information"
included elsewhere herein.
Further information concerning the business of Hibernia, and
its financial condition, management, principal shareholders, and
certain other information has been incorporated by reference into
this Proxy Statement. See "Available Information" and
"Incorporation by Reference."
Supervision and Regulation
General. As a bank holding company, Hibernia is subject to
the regulations and supervision of the Federal Reserve Board.
Under the BHCA, bank holding companies may not directly or
indirectly acquire the ownership or control of more than 5% of
the voting shares or substantially all of the assets of any
company, including a bank, without the prior approval of the
Federal Reserve Board. In addition, bank holding companies are
generally prohibited from engaging in nonbanking activities,
subject to certain exceptions.
Hibernia's banking subsidiary, HNB, is subject to
supervision and examination by applicable federal and state
banking agencies. HNB is a national banking association subject
to the regulations and supervision of the OCC. HNB is also
subject to various requirements and restrictions under federal
and state law, including requirements to maintain reserves
against deposits, restrictions on the types and amounts of loans
that may be granted and the interest that may be charged thereon
and limitations on the types of investments that may be made and
the types of services that may offered. Various consumer laws
and regulations also affect the operations of HNB. In addition
to the impact of such 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 derives substantially all of
its income from the payment of dividends by HNB, and its ability
to pay dividends would be affected by the ability of HNB to pay
dividends. HNB is subject to various statutory and contractual
restrictions on its ability to pay dividends to Hibernia. Under
such restrictions, the amount available for payment of dividends
to Hibernia by HNB without OCC approval was approximately $124
million at December 31, 1994. 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. However, HNB paid dividends to Hibernia
in the second and third quarter of 1994 without objection by the
OCC. Additional information in this regard is contained in
documents incorporated by reference herein. See "Available
Information" and "Incorporation by Reference."
In addition, consistent with its policy regarding bank
holding companies serving as a source of strength for their
subsidiary banks, the Federal Reserve Board has stated that, as a
matter of prudent banking, a bank holding company generally
should not maintain a rate of cash dividends unless its net
income available to common shareholders has been sufficient to
fully fund the dividends, and the prospective rate of earnings
retention appears to be consistent with the holding company's
capital needs, asset quality and overall financial condition.
Hibernia reinstated its dividend on Hibernia Common Stock in
September of 1993. Quarterly dividends ranging from $.03 to $.06
per share have been paid on the Hibernia Common Stock since that
time.
Restrictions on Extensions of Credit. HNB is subject to
restrictions imposed by federal law on the ability of any
national bank to extend credit to affiliates, including Hibernia,
to purchase the assets thereof, to issue a guarantee, acceptance
or letter of credit on their behalf (including an endorsement or
standby letter of credit) or to purchase or invest in the stock
or securities thereof or to take such stock or securities as
collateral for loans to any borrower. Such extensions of credit
and issuances generally must be secured by eligible collateral
and are generally limited to 15% of HNB's capital and surplus.
CERTAIN INFORMATION ABOUT STABA
Principal Business
STABA, a business corporation organized under the laws of
Louisiana and a registered bank holding company under the BHCA,
was incorporated in March of 1983 to acquire all of the stock of
State Bank pursuant to a reorganization that was consummated that
year. From that date to the present, State Bank has been STABA's
only subsidiary. On September 30, 1994, STABA had total
consolidated assets of approximately $97.4 million and total
consolidated deposits of approximately $89.4 million. STABA's
executive offices are located at 400 Mississippi Street,
Donaldsonville, Louisiana 70346 and its telephone number if (504)
473-3181.
State Bank, a Louisiana banking association that opened for
business in 1947, is a full service commercial bank offering
consumer and commercial banking services in Ascension Parish. It
operates a main office in the central business district of
Donaldsonville, Louisiana, and has three other full service
branches in Ascension Parish, located in Prairieville,
Donaldsonville and Gonzales, Louisiana. It also has three ATM
locations in Ascension Parish. Major services provided by State
Bank include consumer financing, commercial lending, credit card
services, savings and checking accounts for individuals,
businesses and public bodies and the offering of Series EE
savings bonds, certificates of deposit and individual retirement
accounts. All deposit accounts are insured by the FDIC to the
maximum legal limits. Credit services offered by State Bank
include secured and unsecured commercial loans, Small Business
Administration loans, agricultural loans, real estate loans and
consumer loans.
State Bank's deposits represent a cross-section of the
area's economy and there is no material concentration of deposits
from any single customer or group of customers. No significant
portion of State Bank's loans is concentrated within a single
industry or group of related industries. There are no material
seasonal factors that would have any adverse effect on State
Bank. State Bank does not rely on foreign sources of funds or
income.
Market Prices and Dividends
Market Prices. STABA Common Stock is not traded on any
exchange or in any other established public trading market.
There are no bid or asked prices available for STABA common
stock. There is, however, very limited and sporadic trading of
STABA Common Stock in its local area. Management has trading
information available to it with respect to approximately seven
trades that were effected during 1993 and 1994. These trades
were effected at an average price of $27.85 per share, but
management is unable to assure that all of those trades, or any
of them, were effected on an arm's-length basis.
On October 31, 1994, there were 266 shareholders of record
of STABA Common Stock.
Cash Dividends. STABA declared dividends of $1.10 per share
and $1.35 per share in 1992 and 1993, respectively. STABA has
declared a dividend of $1.35 per share for 1994, to be paid in
the first quarter of 1995. Pursuant to the Agreement, the
aggregate of all dividends and bonuses shall not exceed $0.34 for
the first quarter of 1995, if the Merger becomes effective during
the first quarter of 1995.
Substantially all of the funds used by STABA to pay
dividends to its shareholders are derived from dividends paid to
it by State Bank, which are subject to certain legal
restrictions. With respect to State Bank, the prior approval of
the Louisiana Office of Financial Institutions (the "OFI") is
required if the total of all dividends declared and paid in any
calendar year will exceed the sum of its net profits of that year
combined with the retained net profits of the immediately
preceding year. The FDIC also has the power to restrict a state
bank's dividend payments if such payments are deemed an unsafe or
unsound banking practice, or if the FDIC deems the bank's capital
inadequate.
Property
State Bank owns the building and land at its main office in
Donaldsonville and also owns the building and land at its three
branch offices located in Donaldsonville, Gonzales and
Praireville.
Employees
STABA and State Bank have, in the aggregate, approximately
46 full-time employees. STABA and State Bank consider their
relationships with all such employees to be good.
Litigation
Neither STABA nor State Bank is involved in any material
legal actions. However, various proceedings arising in the
ordinary course of State Bank's business are presently pending to
which State Bank is a party. In the opinion of management, after
consultation with outside legal counsel, the outcome of such
actions should not have a material adverse effect on the
financial condition of STABA or State Bank.
Competition
State Bank experiences considerable competition in both
attracting deposits and lending funds. Competition in lending
comes principally from other commercial banks and savings and
loan associations located in State Bank's market area and from
mortgage companies, insurance companies, brokerage companies,
governmental agencies, credit unions, real estate investment
trusts and other financial institutions. Competition for
deposits comes principally from other commercial banks, savings
and loan associations and credit unions. The primary factors in
competing for deposits among these institutions are interest
rates paid on accounts, convenience of office location and extent
of services offered. In the conduct of certain aspects of its
banking business, State Bank competes not only with the above-
mentioned institutions, but additionally with insurance
companies, small loan companies and other financial institutions.
Supervision and Regulation
As a state non-member bank, State Bank is subject to
regulation and regular examination by the FDIC and the OFI.
Applicable regulations relate to reserves, investments, loans,
issuance of securities, establishment of branches and other
aspects of State Bank's operations. State Bank must also furnish
quarterly and annual reports to the FDIC.
State Bank's deposits are insured by the FDIC, which insures
up to $100,000 per each insured deposit account. State Bank is
currently paying an insurance premium of $230 for each $100,000
of deposits. As of January 1, 1993 the FDIC implemented a
traditional risk-related insurance assessment system whereby the
FDIC places each insured bank in one of nine risk categories
based on its level of capital and other relevant information.
Under the system, there is an eight basis point spread between
the highest and lowest assessment, with the strongest banks
(including State Bank) paying an insurance premium equal to .23%
of deposits and the weakest banks paying a premium of .31% of
deposits. Due to the recent savings and loan crisis and the
related concern of Congress with regard to the FDIC insurance
fund, there has been increased pressure applied to banks to
conform to regulatory guidelines, along with increased disclosure
requirements on a quarterly and annual basis.
State Bank is subject to regulatory risk-based capital
guidelines. In the risk-based capital computation, all assets
are weighted based upon assigned risk factors, and certain off-
balance sheets items are included, such as loan commitments and
standby letters of credit. Capital is separated into two
categories, Tier One and Tier Two, which are combined to
calculate total capital. Tier One capital consists of common
shareholders' equity, certain perpetual preferred stock and
minority interests less intangibles. Tier Two capital consists
of the allowance for loan losses and subordinated debt, subject
to certain limitations. The guidelines provide for total capital
of 8% of risk weighted assets, half of which must be Tier One
capital. In conjunction with the risk-based capital guidelines,
the regulators have also issued capital leverage guidelines. The
leverage ratio consists of Tier One capital as a percent of
average total assets. The minimum leverage ratio for all banks
(including State Bank) is 4%, with a higher leverage ratio
generally required for all but the healthiest of banks. At
September 30, 1994, State Bank's Tier One capital ratio was
8.94%, its total capital ratio was 8.00% and its leverage ratio
was 10.65%.
MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND
RESULTS OF OPERATIONS OF STABA FOR THE TWO YEARS ENDED
DECEMBER 31, 1993 AND DECEMBER 31, 1992
The following discussion provides certain information
concerning the financial condition and results of operations of
STABA for the two years ended December 31, 1993 and 1992. The
financial position and results of operations of STABA resulted
primarily from operations at its banking subsidiary, State Bank.
Management's discussion should be read in conjunction with the
STABA financial statements and accompanying notes presented
elsewhere in this Proxy Statement.
Overview
Net income for 1993 totaled $1,252,308, compared to
$1,063,759 for 1992. Return on average assets was 1.30% and
return on average equity was 19.36% for 1993, compared to 1.30%
and 19.72%, respectively, for 1992. The increase in net income
of $188,549 from 1992 to 1993 was attributable primarily to an
increase in net interest income of $462,675 and an increase in
other income of $165,701 offset somewhat by a decrease in the
provision for loan losses of $93,000, and an increase in other
expenses of $353,866.
Average assets in 1993 increased by $7,531,784, or 8.48%
from 1992 caused primarily by an increase in customer deposits of
$6,571,717, or 7.99%. The increase in deposits was caused by an
increase in average deposits from individuals and businesses of
$3,313,552 and other interest-bearing deposit accounts of
$248,085, offset partially by a decline in time deposits of
$773,563. The increase in deposits helped to fund the increase
in average investments of $1,065,754 and consumer loans of
$6,130,534, as well as the changes in other asset accounts.
The net interest margin, the ratio of net interest income to
average earning assets, increased slightly in 1993, from 4.36% to
4.54%. The net interest margin of 4.54% in 1993 is a reflection
of the continued low interest rates and healthy spread between
rates on deposits and yields on investments and loans. Earning
assets comprised 91.95% and 91.91% of total average assets in
1993 and 1992, respectively.
Results of Operations
Net Interest Income. Net interest income for 1993 was
$4,019,033, compared to $3,556,358 for 1992. The increase of
$462,675 was caused by the increase in average earning assets and
the increase in the net interest margin of 23 basis points.
Average non-interest bearing deposits as a percent of total
deposits remained level from 1992 to 1993.
Average loans for 1993 totaled $41,815,356, or approximately
47% of average earnings assets. Average investment securities
totaled $47,647,774 and comprised approximately 53% of average
earning assets. The average yield from loans declined .95% from
1992 to 1993. The average yield from investment securities
declined .85% during that same time. This was caused primarily
by the implementation of a plan to shorten the maturities on
investments in STABA's portfolio. The net yield on total earning
assets declined .54% from 1992 to 1993, and was offset by a .73%
decrease in the rate paid on interest-bearing liabilities, for a
net increase in the net interest spread of .21%.
Interest Rate Sensitivity. The interest rate sensitivity
gap is the difference between the amount of interest earning
assets and interest-bearing liabilities maturing in any given
time frame. A primary objective of asset/liability management is
to maximize net interest margin while not subjecting STABA to
significant interest rate risk in periods of rising or falling
interest rates. At December 31, 1993 STABA's one year repricing
gap, defined as repricing assets minus repricing liabilities as a
percentage of total assets, was 12.14%, i.e. more of STABA's
assets than liabilities reprice within one year time frame.
However, STABA does have discretion in repricing the majority of
liabilities that reprice in under a year. Because more assets
reprice in the one year time frame, a rise in interest rates
should cause an increase in net interest income.
Provision for Loan Losses. The provision for loan losses
charged to operating expense is the result of a continuing review
and assessment of the loan portfolio, taking into consideration
the history of chargeoffs in the loan portfolio by category, the
current economic condition in the lending area, the payment
history, ability to repay and strength of collateral of specific
borrowers, and other relevant factors. The 1993 provision was
$270,000, compared to $363,000 in 1992. Actual chargeoffs, net
of recoveries, were $172,310 in 1993 and $108,881 in 1992. Since
the provision exceeded net chargeoffs in both years, the result
was an increase in the allowance for loan losses.
STABA maintains an allowance for loan losses which it
believes is adequate to absorb reasonably foreseeable losses in
the loan portfolio. The allowance for loan losses increased
$97,690 from December 31, 1992 to 1993, to $906,576, and was
2.07% of loans. The 1992 balance in the allowance for loans
losses was $808,886, or 2.06% of loans.
In May 1993, the Financial Accounting Standards Board issued
Statement No. 114, "Accounting by Creditors for Impairment of a
Loan," which requires that impaired loans that are within the
scope of this statement be measured based on the present value of
expected future cash flows discounted at the loan's effective
interest rate or at the loan's market price or the fair value of
the collateral if the loan is collateral dependent. Adoption of
the new standard is required for fiscal years beginning after
December 15, 1994. The standard is to be adopted prospectively,
so that it will be reflected as an adjustment to STABA's
provision for loan losses beginning 1995. The effect, if any,
the new standard would have on STABA's financial position and
results of operations is not expected to be significant.
Non-Interest Income. Non-interest income in 1993 totaled
$669,861 compared to $504,160 in 1992. The increase was caused
mostly by an increase in service charges of $79,245 and an
increase in the gain on the sale of securities of $90,633.
Table 1 below presents the average balance sheets, net
interest income and net yield for each category of assets for
1993 and 1992. Table 2 below provides the components of changes
in net interest income in the format of a rate/volume analysis.
<TABLE>
<CAPTION>
Average Balance Sheets, Interest Income/Expenses, Yields, Rates & Statistics
for the Years 1993 and 1992
1993 1992
Interest Average Interest Average
Average Income/ Yield/ Average Income/ Yield/
Balance Expense Rate Balance Expense Rate
<S> <C> <C> <C> <C> <C> <C>
(dollars in thousands)
ASSETS:
Earning Assets:
Interest Bearing Deposits
with other banks $ 2,018 $ 77 3.81% $ 1,796 $ 81 4.50%
U.S. Treasury Securities 19,256 1,119 5.81 17,544 1,125 6.41
Federal Agencies & Mortgage Backed 16,014 954 5.96 11,931 872 7.31
State & Municipal Obligations (1) 4,547 294 6.46 4,050 282 6.96
Other Securities - - - 300 26 8.60
Total Investment Securities 41,835 2,444 5.84 35,621 2,386 6.70
Federal Funds Sold 5,813 166 2.85 10,961 374 3.42
Loans (Net) (2) 41,815 3,951 9.45 35,685 3,716 10.41
Total Earning Assets 89,463 6,561 7.33 81,640 6,476 7.87
Allowance for Possible Loan Losses (863) (627)
Cash and Due From Banks 4,030 3,809
Premises and Equipment, Net 1,813 1,581
Other Real Estate 100 60
Other Assets 1,817 2,365
Total Assets $96,360 $88,828
LIABILITIES AND SHAREHOLDERS' EQUITY
Interest Bearing Liabilities:
NOW Deposits $18,657 $ 426 2.28% $15,921 $ 452 2.84%
Savings Deposits 16,075 473 2.94 13,563 457 3.37
Certificates of Deposit of
$100,000 or more 7,766 282 3.63 8,775 390 4.44
Other Time Deposits 34,049 1,360 3.99 33,814 1,621 4.80
Federal Fund Purchased 31 1 3.01 - - -
Total Interest Bearing Liabilities 76,578 2,542 3.32 72,073 2,920 4.05
Non-interest Bearing Deposits 12,238 10,140
Other Liabilities 1,074 1,220
Total Liabilities 89,890 83,433
Shareholders' Equity 6,470 5,395
Total Liabilities and Shareholders'
Equity $ 96,360 $88,828
Net Interest Spread 4.01% 3.82%
Net Interest Income/Margin $ 4,019 4.54% $3,556 4.36%
</TABLE>
1) The yield on tax exempt securities is not on a tax equivalent basis
for this schedule.
(2) Loans are presented net of unearned discount. Nonaccrual loans
are included in average balances and income on such loans is recognized
on a cash basis.
<TABLE>
<CAPTION>
Rate/Volume Analysis
1993/1992
Change Attributable to
Total
Increase
Rate Volume (Decrease)
(dollars in thousands)
<S> <C> <C> <C>
Interest Earning Assets:
Interest Bearing Deposits
with Other Banks ($ 12) $ 8 ($ 4)
Investment Securities (1) ( 389) 451 62
FFS & Sec. Purc. w/Agree to Resell ( 97) (111) (208)
Loans ( 342) 577 235
Total Interest Income ( 840) 925 85
Interest Bearing Liabilities:
NOW & Savings Deposits ( 144) 134 ( 10)
Certificates of Deposit $100,000
or more ( 71) ( 37) (108)
Other time deposits ( 274) 13 (261)
FFF and Securities sold under
agmts. to repurchase - 1 1
Total Interest Expense ( 489) 111 (378)
Net Interest Income ($351) $ 814 $463
</TABLE>
(1) Not presented on a tax equivalent basis for this schedule.
Note: The changes in interest due to both volume and rate have been
allocated proportionately between rate and volume. Nonaccrual loans are
included in average balances and income on such loans is recognized on a
cash basis.
Non-Interest Expense. Non-interest expense increased by
$353,866, or 15.49%, from 1992 levels. Salaries and related
benefits increased $122,030. Occupancy expense increased
$99,736. Other operating expense increased by $132,100. The
following is a summary of non-interest expenses for 1993 and
1992:
<TABLE>
<CAPTION>
Year Ended December 31,
1993 1992
(dollars in thousands)
<S> <C> <C>
Salaries and Benefits $1,120 $ 998
Occupancy 163 162
Furniture and Equipment Expense 318 218
Other Expenses 1,038 907
Total $2,639 $2,285
</TABLE>
Statement of Financing Accounting Standards No. 106,
"Employers' Accounting for Postretirement Benefits Other Than
Pensions," which is effective for fiscal years beginning after
December 15, 1992, requires recognition of estimated future
postretirement costs over employees' periods of service.
Statement of Financial Accounting Standards No. 112, "Employers'
Accounting for Postemployment Benefits," which is effective for
fiscal years beginning after December 15, 1993, requires
recognition of estimated future postemployment costs over
employees' periods of service. STABA offers no postretirement
health or medical benefits or postemployment benefits to any of
its employees or former employees.
Analysis of Financial Condition
Investment Securities. In 1993 average investment
securities increased by $6,291,497 from 1992. The total market
value of investment securities at December 31, 1993 was
$40,857,136, including gross unrealized gains of $846,409 and
gross unrealized losses of $144,422. The investment securities
portfolio is used as a source of liquidity and a means of
managing interest rate sensitivity. In addition, the portfolio
serves as a source of collateral on certain deposits.
Securities Portfolio. The carrying amount of securities at
the dates indicated is set forth in the table below:
December 31,
1993 1992
Amount Percent Amount Percent
(dollars in thousands)
U. S. Treasury $19,659 48.96% $19,216 49.78%
U. S. Government
Agencies and
Mortgage Backed
Securities 15,800 39.35% 14,927 38.66%
State and
Municipals 4,696 11.69% 4,462 11.56%
Total $40,155 100.00% $38,605 100.00%
Investment Securities Maturity Distribution. The amortized
cost and estimated market value of securities at December 31,
1993, by contractual maturity, are shown below. Expected
maturities will differ from contractual maturities because the
issuers may have the right to prepay obligations with or without
penalties.
Approximate
Carrying Market
Amount Value
(dollars in thousands)
Due in one year or less $16,591 $16,585
Due from one to five years 14,531 14,837
Due from five to ten years 3,666 3,944
Due after ten years 5,367 5,491
$40,155 $40,857
STABA's mortgage-backed securities and collateralized
mortgage obligations consist of ownership interests in pools of
residential mortgages guaranteed by U.S. government agencies with
contract maturities up to 30 years. However, the underlying
mortgages are subject to significant prepayments, particularly
when the contract rates on the mortgages exceed the current
market rates on such loans. The weighted average life of the
mortgage-backed securities portfolio, based on current prepayment
assumptions, is approximately seven years.
For discussion of Financial Accounting Standards Board
Statement No. 115, which STABA adopted effective January 1, 1994,
see the accompanying footnotes to the December 31, 1993 financial
statements.
Loans. Loans outstanding at December 31, 1993, totaled
$42,936,061. Total average loans in 1993 were $40,951,972, an
increase of $5,894,477 from the average for 1992. Average
consumer loans increased by $188,220, average business loans
decreased $85,831, and average real estate loans increased
$6,058,662 from 1992 to 1993.
The following table shows the amounts of loans outstanding
according to the type of loan for each of the periods indicated:
December 31,
1993 1992
(dollars in thousands)
Amount Percent Amount Percent
Commercial, Industrial and
Agricultural $ 5,685 12.97% $ 6,745 17.16%
Real Estate-Resident 23,297 53.14 19,194 48.83
Real Estate-Non-Resident 4,975 11.35 4,327 11.01
Consumer Net of Unearned
Income 9,886 22.54 10,043 23.00
Total Loans $43,843 100.00% $39,309 100.00%
Allowance for Loan Losses:
1993 1992
Balance at January 1 $808,886 $554,767
Charge offs (228,710) (164,790)
Recoveries 56,400 55,909
Provision charged to
operations 270,000 363,000
Balance at December 31 $906,576 $808,886
Nonperforming Assets. Nonaccrual loans and foreclosed
assets are included in nonperforming assets. Nonperforming
assets decreased $24,318 during 1993 to $214,464 at December 31,
1993.
Nonaccrual loans are loans on which the accrual of interest
income has been discontinued and previously accrued interest has
been reversed because the borrower's financial condition has
deteriorated to the extent that the collection of principal and
interest is doubtful. Until the loans are returned to performing
status, generally as the result of the full payment of all past
due principal and interest, interest income is recorded on the
cash basis. Interest income that would not have been recognized
on nonaccrual loans had those loans been on accrual status at
contractual terms throughout 1993 was approximately $5,769.
Interest income recognized on nonaccrual loans for 1993 was not
significant.
The table below summarizes nonperforming assets and includes
several ratios that measure the level of nonperforming assets.
December 31,
1993 1992
(dollars in thousands)
Nonperforming Loans:
Nonaccrual loans $115 $225
Total Nonperforming Loans 115 225
Real Estate Acquired through
Foreclosure 99 14
Total Nonperforming Assets $214 $239
Loans Past Due Ninety
Days or More $376 $395
Nonperforming loans as a % of
total loans 0.27% 1.01%
Nonperforming assets as a % of
total loans and real estate and
other property acquired by
foreclosure .49% .61%
Allowance for loan losses as a %
of nonperforming loans 788.70% 359.56%
Management of STABA is not aware of any loans classified for
regulatory purposes and included from the above table which: (1)
represent or result from trends or uncertainties that will
materially impact future operating results, liquidity, or capital
resources, or (2) represent material credits about which
management is aware of any information which causes doubts as to
the ability of such borrowers to comply with the loan repayment
terms.
Deposits. Total deposits at December 31, 1993 were
$87,810,651, an increase of $2,480,238 from the December 31, 1992
total of $85,330,413. Average deposits in 1993 increased
$6,571,717 from 1992. As noted earlier, an increase occurred in
the average deposits from individuals and businesses and other
interest bearing deposit accounts and was offset partially by a
decline in time deposits.
Time deposits of $100,000 or more were $7,241,719 at
December 31, 1993, which comprises 8.25% of total deposits.
STABA had no brokered deposits at December 31, 1993.
Deposit Average Balance and Rates. The following table
indicates the average daily amount of deposits and rates paid on
such deposits for the periods indicated:
December 31,
1993 1992
Amount Rate Amount Rate
(dollars in thousands)
Non-interest bearing
demand $12,238 0.00% $10,140 0.00%
Interest bearing
demand 18,657 2.28 15,921 2.84
Savings 16,075 2.94 13,563 3.37
Time Deposits 41,846 2.86 42,589 4.72
Total $, Avg. Rate $88,816 2.86% $82,213 3.55%
Maturities of Time Deposits of $100,000 or more. The maturities of time
deposits of $100,000 or more are summarized in the table below:
1993
(dollars in thousands)
Three months or less $3,551
Over three months through 12 months 2,522
Over one year through five years 517
Over five years -
Total $6,590
MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND
RESULTS OF OPERATIONS OF STABA FOR THE NINE-MONTH PERIODS ENDED
SEPTEMBER 30, 1994 AND SEPTEMBER 30, 1993
The following discussion provides certain information
concerning the financial condition and results of operations of
STABA for the periods ended September 30, 1994 and 1993. The
financial position and results of operations of STABA resulted
primarily from operations at its banking subsidiary, State Bank.
Management's discussion should be read in conjunction with the
financial statements and accompanying notes presented elsewhere
in this Proxy Statement.
Overview
Net income for the period ended September 30, 1994 totaled
$1,077,411 compared to $993,969 for the period ended September
30, 1993. Return on average assets was 1.03% and return on
average equity was 13.80% for such nine-month period in 1994
compared to 1.03% and 14.72%, respectively, for the same period
in 1993. The increase in net income of $14,442 from 1993 to 1994
was attributable primarily to an increase in net interest income
of $156,141, offset somewhat by an increase in other income of
approximately $131,000, a decrease in the provision for loan
losses of $30,000, and an increase in other expenses of
approximately $215,000.
Average assets for the nine-month period ended September 30,
1994 increased by $824,338, or .85% from the same period in 1993
caused by an increase in average equity of $989,607. The
increase in equity was due to profit of $1,007,411 for 1994.
Most asset and liability accounts recorded no significant change.
The net interest margin, the percentage of net interest
income to average earning assets, increased slightly in the nine-
month period ended September 30, 1994, from 3.39% to 3.55%. The
net interest margin of 3.55% in 1994 is a reflection of the
continued low interest rates and healthy spread between rates on
deposits and yields on investments and loans. Average earning
assets comprised 91.54% and 92.03% of total average assets in the
nine-month periods ended September 30, 1994 and 1993,
respectively.
Results of Operations
Net Interest Income. Net interest income for the nine-month
period ended September 30, 1994 was $3,167,925, compared to
$3,011,784 for the same period in 1993. The increase of $156,141
was caused by the increase in average net assets and the increase
in the net interest margin of 16 basis points. Average non-
interest bearing deposits as a percent of total deposits
increased from 13.67% in 1993 to 15.33% in 1994.
Average loans for the nine-month period ended September 30,
1994 totaled $45,426,814, or 50.97% of average earnings assets.
Average investment securities totaled $44,676,285 and comprised
50.13% of average earning assets. The net yield on loans
declined .39% from 1993 to 1994. The net yield on investment
securities remained unchanged during that same time. The net
yield on total earning assets declined .04% from 1993 to 1994,
and was offset by a .18% decrease in the rate paid on interest
bearing liabilities, for a net increase in the net interest
spread of .14%.
Interest Rate Sensitivity. The interest rate sensitivity
gap is the difference between the amount of interest bearing
assets and interest bearing liabilities maturing in any given
time frame. A primary objective of assets/liability management
is to maximize net interest margin while not subjecting STABA to
significant interest rate risk in periods of rising or falling
interest rates. At September 30, 1994 STABA's one year repricing
gap, defined as repricing assets minus repricing liabilities as a
percentage of total assets, was negative 6.53%, i.e. more of
STABA's liabilities than assets reprice within a one year time
frame. However, STABA does have discretion in repricing the
majority of liabilities that reprice in under a year. Because
more liabilities reprice in the one year time frame, a rise in
interest rates will likely cause a decrease in net interest
income.
Provision for Loan Losses. The provision for loan losses
charged to operating expense is the result of a continuing review
and assessment of the loan portfolio, taking into consideration
the history of chargeoffs in the loan portfolio by category, the
current economic condition in the lending area, the payment
history, ability to repay and strength of collateral of specific
borrowers, and other relevant factors. The provision at
September 30, 1994 was $180,000, compared to $150,000 on
September 30, 1993. Actual chargeoffs, net of recoveries, were
$20,573 in the nine-month period ended September 30, 1994 and
$45,363 in the same period in 1993. Since the provision exceeded
net chargeoffs in both years, the result was an increase in the
allowance for loan losses.
STABA maintains an allowance for loan losses which it
believes is adequate to absorb reasonably foreseeable losses in
the loan portfolio. The allowance for loan losses increased
$110,480 from September 30, 1993 to September 30, 1994, to
$1,036,003, and was 2.17% of loans. The September 30, 1993
balance in the allowance for loan losses was $925,523 or 2.17% of
loans.
In May 1993, the Financial Accounting Standards Board issued
Statement No. 114, "Accounting by Creditors for Impairment of a
Loan," which requires that impaired loans that are within the
scope of this statement be measured based on the present value of
expected future cash flows discounted at the loan's effective
interest rate or at the loan's market price or the fair value of
the collateral if the loan is collateral dependent. Adoption of
the new standard is required for fiscal years beginning after
December 15, 1994. The standard is to be adopted prospectively
with the effect of initially applying the standard to be
reflected in an adjustment to the bank's provision for loan
losses in the year of adoption. The effect, if any, the new
standard may have on STABA's financial position and results of
operations is not expected to be significant.
The Financial Accounting Standards Board also issued
Financial Accounting Standards No. 115 (SFAS 115), "Accounting
for Certain Investments in Debt and Equity Securities," which
establishes a new accounting principle for recording fair values
of debt and equity securities. STABA has adopted SFAS 115
effective January 1, 1994. The adoption of SFAS 115 has the
effect of reducing investments available for sale by $426,838,
increasing deferred tax assets by $145,125, and reducing equity
by $281,713 at September 30, 1994.
Non-Interest Income. Non-interest income for the nine-month
period ended September 30, 1994 totaled $525,434 compared to
$427,691 in the same period of 1993. The increase was caused
mostly by an increase in service charges of $59,423.
Non-Interest Expenses. Non-interest expenses increased by
$167,858 or 8.28% from September 30, 1993 levels. Salaries and
related benefits increased $84,540. Occupancy expense increased
$18,152. A summary of non-interest expenses for the nine-month
periods ended September 30, 1994 and 1993 is as follows:
Period Ended September 30,
1994 1993
Salaries and Benefits $ 866 $ 781
Occupancy 131 112
Furniture and
Equipment Expense 391 367
Other Expenses 807 767
Total $ 2,195 $ 2,027
Statement of Financing Accounting Standards No. 106,
"Employers' Accounting for Postretirement Benefits Other Than
Pensions," which is effective for fiscal years beginning after
December 15, 1992, requires recognition of estimated future
postretirement costs over employees' periods of service.
Statement of Financial Accounting Standards No. 112, "Employers'
Accounting for Postemployment Benefits," which is effective for
fiscal years beginning after December 15, 1993, requires
recognition of estimated future postemployment costs over
employees' periods of service. STABA offers no postretirement
health or medical benefits or postemployment benefits to any of
its employees or former employees.
Analysis of Financial Condition
Investment Securities. For the period ended September 30,
1994 average investment securities increased by $1,341,578 from
the same period in 1993. The investment securities portfolio is
used as a source of liquidity and a means of managing interest
rate sensitivity. In addition, the portfolio serves as a source
of collateral on certain deposits.
Securities Portfolio. The carrying amount of securities at
the dates indicated is set forth in the table below:
September 30,
1994 1993
Amount Percent Amount Percent
U.S. Treasury $14,720 37.57% $19,129 46.55%
U.S. Government
Agencies and
Mortgage Backed
Securities 19,797 50.53% 17,196 41.84%
State and Municipal 5,090 12.99% 4,772 11.61%
Available for sale
adjustment ( 427) ( 1.09) - -
Total $39,180 100.00% $41,097 100.00%
Investment Securities Maturity Distribution. The amortized
cost and estimated market value of securities at September 30,
1994, by contractual maturity, are shown below. Expected
maturities will differ from contractual maturities because the
issuers may have the right to prepay obligations with or without
penalties.
STABA's mortgage-backed securities and collateralized
mortgage obligations consists of ownership interests in pools of
residential mortgages guaranteed by U.S. government agencies with
contract maturities up to 30 years. However, the underlying
mortgages are subject to significant prepayments, particularly
when the contract rates on the mortgages exceed the current
market rates on such loans. The weighted average life of the
mortgage backed securities portfolio, based on current prepayment
assumptions, is approximately seven years.
Loans. Loans outstanding at September 30, 1994, totaled
$47,716,969. Total average loans for the period ended September
30, 1994 were $45,426,814, an increase of $4,298,366 from the
average for the same period in 1993. Average consumer loans
increased by $651,818, and average business loans decreased
$697,807, and average real estate loans increased $2,782,416 from
September 30, 1993 to 1994.
The following table shows the amounts of loans outstanding
according to the type of loan for each of the periods indicated:
September 30,
1994 1993
Amount Percent Amount Percent
(dollars in thousands)
Commercial, Industrial
and Agricultural $10,279 21.54% $10,458 24.37%
Real Estate - Residential 20,381 42.71 17,772 41.41
Real Estate -
Non-residential 6,849 14.35 5,148 11.99
Consumer, Net of Unearned
Income 10,208 21.40 9,543 22.23
Total Loans $47,717 100.00% $42,921 100.00%
The following table shows the allowance for loan losses for each of
the periods indicated:
1994 1993
Balance at January 1 $906,576 $808,886
Charge offs (50,952) (86,253)
Recoveries 30,379 38,937
Provision charged to
operations 150,000 180,000
Balance at September 30 $1,036,003 $941,570
Nonperforming Assets. Nonaccrual loans and foreclosed
assets are included in nonperforming assets. Nonperforming
assets decreased $261,262 from the balance at September 30, 1993
to $88,815 at September 30, 1994.
Nonaccrual loans are loans on which the accrual of interest
income has been discontinued and previously accrued interest has
been reversed because the borrower's financial condition has
deteriorated to the extent that the collection of principal and
interest is doubtful. Until the loan is returned to performing
status, generally as the result of the full payment of all past
due principal and interest, interest income is recorded on the
cash basis. Interest income recognized on nonaccrual loans for
the nine-month period ended September 30, 1994 was not
significant.
The table below summarizes nonperforming assets and includes
several ratios that measure the level of nonperforming assets.
September 30,
1994 1993
(dollars in thousands)
Nonperforming Loans:
Nonaccrual loans $ 33 $ 250
Total Nonperforming Loans 33 250
Real Estate Acquired through
Foreclosure 56 100
Total Nonperforming Assets $ 89 $ 350
Nonperforming loans as a % of
total loans .07% .58%
Nonperforming assets as a % of
total loans .19% .82%
Allowance for loan
losses as a % of
nonperforming loans 3192.81% 76.00%
STABA's management is not aware of any loans classified for
regulatory purposes and excluded from the above table which
represent or result from trends or uncertainties that will
materially impact future operating results, liquidity, or capital
resources, or represent material credits about which management
is aware of any information which causes doubts as to the ability
of such borrowers to comply with the loan repayment terms.
Deposits. Total deposits at September 30, 1994 were
$89,427,077, an increase of $1,441,502 from the September 30,
1993 total of $87,985,575. Average deposits for the nine-month
period ended September 30, 1994 decreased $220,623 from the same
period in 1993.
Time deposits of $100,000 or more were $7,508,177 at
September 30, 1993, which comprises 8.40% of total deposits.
STABA had no brokered deposits at September 30, 1994.
Deposit Average Balance and Rates. The following table
indicates the average daily amount of deposits:
September 30,
1994 1993
(dollars in thousands)
Amount Amount
Non-interest
bearing demand $14,540 $12,288
Interest bearing
demand 19,880 17,849
Savings 15,741 16,099
Time Deposits 39,264 41,749
Total $89,425 $87,985
BENEFICIAL OWNERSHIP OF DIRECTORS, EXECUTIVE OFFICERS AND
PRINCIPAL SHAREHOLDERS OF STABA
Security Ownership of Directors and Executive Officers
The following is a list of the directors and the chief
executive officer of STABA and the number and percentage of
shares of STABA Common Stock beneficially owned as of January 31,
1995. Unless otherwise indicated, beneficial ownership consists
of sole voting and investment power.
Amount of Common Stock Percentage of Common Stock
Name Beneficially Owned Beneficially Owned
Kenneth A. Bailey (1) 1,371 1.15
Albert Banker, Jr. 900 .76
Dr. R. G. Folse 3,688 3.10
E. H. Graugnard 5,372 4.52
B. R. Harp 1,244 1.03
J. T. Mistreta 8,558 7.20
L. J. Noel, III 7,624 6.41
A. J. Robert 1,539 1.29
Stephen Robert 1,740 1.46
All directors and executive
officers as a group
(9 persons) 32,036 26.92%
Security Ownership of Principal Shareholders
The following is a list of all individuals or entities known to STABA who
owned, beneficially or of record, five percent (5%) or more of the issued
and outstanding shares of STABA Common Stock as of January 31, 1995 and the
number of shares and percentage of STABA Common Stock beneficially owned:
Amount of Percentage of
Common Stock Common Stock
Name and Address Beneficially Owned Beneficially Owned
J. T. Mistreta 8,558 (2) 7.20
P. O. Box 550
Donaldsonville, LA 70346
L. J. Noel, III 7,624 (3) 6.41
P. O. Box 466
Donaldsonville, LA 70346
(1) Mr. Bailey is a dirctor and the Chief Executive Officer of STABA.
(2) Includes 5,484 shares owned by members of his family
(3) Includes 2,132 shares owned by members of his family.
RELATIONSHIP WITH INDEPENDENT AUDITORS
STABA has appointed the firm of Postlewaite & Netterville as
independent auditor for its fiscal year ending December 31, 1994.
A representative of Postlewaite & Netterville is expected to be
present at the Special Meeting, and will be available to respond
to appropriate questions.
VALIDITY OF SHARES
Patricia C. Meringer, Associate Counsel and Secretary of
Hibernia, has rendered an opinion that the shares of Hibernia
Common Stock to be issued in connection with the Merger have been
duly authorized and, if and when issued pursuant to the terms of
the Agreement, will be validly issued, fully paid and non-
assessable. As of the date of this prospectus, Ms. Meringer
owned 56 shares of Hibernia Common Stock in a 401(k) plan account
and held options to purchase 15,716 shares of Hibernia Common
Stock, which options are not currently exercisable.
EXPERTS
The consolidated financial statements of Hibernia
incorporated in this Proxy Statement-Prospectus by reference from
Hibernia's Annual Report on Form 10-K for the year ended December
31, 1993 have been audited by Ernst & Young LLP, independent
auditors, as set forth in their report thereon incorporated
herein by reference, and have been so incorporated by reference
in reliance upon such report given upon the authority of such
firm as experts in accounting and auditing. The consolidated
financial statements referred to above have been restated in
Current Reports on Form 8-K to give effect to six mergers
consummated during 1994 and accounted for as poolings of
interests.
The consolidated financial statements of Hibernia for the
year ended December 31, 1993, restated to give effect to four
mergers consummated during the third quarter of 1994 and
accounted for as poolings of interests, incorporated in this
Proxy Statement-Prospectus by reference from Hibernia's Current
Report on Form 8-K dated October 11, 1994 have been audited by
Ernst & Young LLP, independent auditors, as set forth in their
report thereon incorporated by reference, and have been so
incorporated by reference in reliance upon such firm as experts
in accounting and auditing.
The supplemental consolidated financial statements of
Hibernia for the year ended December 31, 1993, restated to give
effect to six mergers consummated during 1994 (which represents
four mergers consummated during the third quarter of 1994 and two
mergers consummated during the fourth quarter of 1994) and
accounted for as poolings of interests, incorporated in this
Proxy Statement-Prospectus by reference from Hibernia's Current
Report on Form 8-K dated February 15, 1995 have been audited by
Ernst & Young LLP, independent auditors, as set forth in their
report thereon incorporated by reference, and have been so
incorporated by reference in reliance upon such firm as experts
in accounting and auditing.
The Statements of Income, Statements of Stockholders' Equity
and Statements of Cash Flows for STABA for the three years ended
December 31, 1993, 1992 and 1991 and the Balance Sheets of STABA
as of December 31, 1993 and 1992 have been audited by Postlewaite
& Netterville, Baton Rouge, Louisiana, independent auditors, as
set forth in their report thereon included elsewhere herein.
Such financial statements have been so included in reliance upon
the report of Postlewaite & Netterville, given upon their
authority as experts in accounting and auditing.
<PAGE>
STABA Bancshares, Inc. and Subsidiary
Consolidated Statements of Financial Condition
(unaudited, $ in thousands)
<TABLE>
<CAPTION>
Assets September 30
1994 1993
<S> <C> <C>
Cash and due from banks $4,778 $4,050
Interest bearing deposits with banks 986 2,074
Federal Funds sold 2,281 2,718
Investment securities 39,181 41,098
Loans, net of reserve 46,681 41,979
Bank premises and equipment 2,010 1,915
Accrued income and other assets 1,470 1,319
Total Assets $97,387 $95,153
Liabilities and Stockholders' Equity
Liabilities
Deposits
Interest bearing $74,887 $75,697
Non-interest bearing 14,515 12,288
Accrued expenses and other liabilities 285 254
Income taxes payable 7 46
Total Liabilities 89,694 88,285
Stockholders' Equity
Common Stock 152 152
Surplus 3,176 3,176
Retained earnings 4,699 3,593
Treasury stock (53) (53)
Unrealized gain(loss) on securities available for sale (281) -
Total Stockholders' Equity 7,693 6,868
Total Liabilities and Stockholders' Equity $97,387 $95,153
The accompanying notes are an integral part of these consolidated financial statements.
</TABLE>
<PAGE>
STABA Bancshares, Inc. and Subsidiary
Consolidated Statements of Income
(unaudited, $ in thousands)
<TABLE>
<CAPTION>
September 30
1994 1993
<S> <C> <C>
Interest Income
Loans $3,106 $2,938
Securities 1,753 1,797
Federal Funds sold and other 102 209
4,961 4,944
Interest Expense
Deposits 1,747 1,933
Other 8
Net interest income 3,206 3,011
Provision for possible loan losses 150 180
Net interest income after provision
for possible loan loss 3,056 2,831
Other Income
Service fees 393 337
Other 120 91
513 428
Other Expenses
Salaries and wages 866 781
Occupancy expense 446 374
Other operating expense 733 691
2,045 1,846
Income before Federal income tax expense 1,524 1,413
Federal income tax expense 517 420
Net Income $1,007 $993
Earnings per share $8.46 $8.34
The accompanying notes are an integral part of these consolidated financial statements.
</TABLE>
<PAGE>
STABA Bancshares, Inc. and Subsidiary
Consolidated Statements of Cash Flows
(unaudited, $ in thousands)
<TABLE>
<CAPTION>
September 30
Operating Activities 1994 1993
<S> <C> <C>
Net Income $1,007 $993
Adjustments to reconcile net income
to cash provided by operating activities
Depreciation and amortization 224 181
Provision for credit losses 150 180
Loss on sale of securities 25 -
(Increase) in accrued income and
other assets (689) (593)
Increase in accrued expense and
other liabilities 515 270
Cash Provided by Operating 1,232 1,031
Activities
Investing Activites
Net decrease in interest
bearing deposits 99 99
Net decrease in federal
funds sold 1,568 3,233
Proceeds from sale/maturity of
investment securities 17,740 13,215
Purchase of investment securities (17,089) (15,768)
Net increase in loans (3,874) (3,612)
Purchase of buildings and equipment (361) (489)
Cash Used in Investing Activities (1,917) (3,322)
Cash Flows From Financing Activites
Net increase in non-interest bearing
demand deposits, NOW accounts and
savings accounts 3,081 3,161
Net decrease in time deposits (1,489) (531)
Cash Provided by Financing
Activities 1,592 2,630
Increase in Cash and Due From Banks 907 339
Cash and due from banks at January 1 3,871 3,711
Cash and due from banks at September 30 $4,778 $4,050
The accompanying notes are an integral part of these consolidated financial statements.
</TABLE>
<PAGE>
STABA Bancshares, Inc. and Subsidiary
Consolidated Statements of Changes in Stockholders' Equity
(unaudited, in thousands)
<TABLE>
<CAPTION>
Common Stock Treasury Retained
Nine months ended September 30, 1994 Shares Par Value Surplus Stock Earnings Total
<S> <C> <C> <C> <C> <C> <C>
Balance at December 31, 1993 119 $152 $3,176 ($53) $3,692 $6,967
Net Income 1,007 1,007
Unrealized gain(loss) on securities (281) (281)
Balance at September 30, 1994 119 $152 $3,176 ($53) $4,418 $7,693
</TABLE>
<TABLE>
<CAPTION>
Common Stock Treasury Retained
Nine months ended September 30, 1993 Shares Par Value Surplus Stock Earnings Total
<S> <C> <C> <C> <C> <C> <C>
Balance at December 31, 1992 119 $152 $3,176 ($53) $2,600 $5,875
Net Income 993 993
Balance at September 30, 1993 119 $152 $3,176 ($53) $3,593 $6,868
The accompanying notes are an integral part of these consolidated financial statements.
</TABLE>
<PAGE>
STABA Bancshares, Inc. and Subsidiary
Donaldsonville, LA
Notes to consolidated financial statements
Note 1 - Per Share Data and Market Value of Stock
Net income per average share outstanding is calculated based on the weighted
average number of shares outstanding during the year. The average number of
shares outstanding for the nine months ended September 30, 1994 and 1993 was
118,938 and 118,938, respectively.
Note 2 - Non-Performing Loans
September 30
1994 1993
Non-Accrual $32,448.15 $250,415.32
Restructured 0.00 0.00
Total Non-Performing 32,448.15 250,415.32
When the payment of principal and interest on a loan is delinquent for 90 days
or more, the loan is placed on non-accrual status unless the loan is in process
of collection and the underlying collateral fully supports the carrying value of
the loan. If the decision is made to continue to accrue interest on the loan,
the officer who made the loan monitors the collectability of the loan. When a
loan is placed on nonaccrual, any interest is charged directly against interest
income. Any payments received on nonaccrual loans are applied first to the
principal balance and then to the interest that would have accrued.
Interest income in the amount of $3,746.48 would have been recorded on the non-
accrual loans during the nine months ended September 30, 1994 if they had been
performing in accordance with their contractual terms.
<PAGE>
INDEPENDENT AUDITORS' REPORT
STABA BANCSHARES, INC. AND SUBSIDIARY
FINANCIAL STATEMENTS
1993
<PAGE>
C O N T E N T S
Page
Independent Auditors' Report 1
Consolidated Statements of Condition,
December 31, 1993 and 1992 2
Consolidated Statements of Income,
Years ended December 31, 1993, 1992, and 1991 3
Consolidated Statements of Changes in Stockholders' Equity,
Years ended December 31, 1993, 1992, and 1991 4 - 5
Consolidated Statements of Cash Flows,
Years ended December 31, 1993, 1992, and 1991 6 - 7
Notes to Consolidated Financial Statements 8 - 21
<PAGE>
INDEPENDENT AUDITORS' REPORT
To the Board of Directors and Stockholders
Staba Bancshares, Inc. and Subsidiary
Donaldsonville, Louisiana
We have audited the accompanying consolidated statements of condition of
Staba Bancshares, Inc. and Subsidiary as of December 31, 1993 and 1992,
and the related consolidated statements of income, changes in
stockholders' equity and cash flows for each of the three years ended
December 31, 1993. These financial statements are the responsibility of
the Company's management. Our responsibility is to express an opinion
on these financial statements based on our audits.
We conducted our audits in accordance with generally accepted auditing
standards. Those standards require that we plan and perform the audit
to obtain reasonable assurance about whether the financial statements are
free of material misstatement. An audit includes examining, on a test
basis, evidence supporting the amounts and disclosures in the financial
statements. An audit also includes assessing the accounting principles
used and significant estimates made by management, as well as evaluating
the overall financial statement presentation. We believe that our audits
provide a reasonable basis for our opinion.
In our opinion, the financial statements referred to above present
fairly, in all material respects, the consolidated financial position of
Staba Bancshares, Inc. and Subsidiary at December 31, 1993 and 1992, and
the consolidated results of their operations and their cash flows for
each of the three years ended December 31, 1993 in conformity with
generally accepted accounting principles.
Donaldsonville, Louisiana
February 16, 1994
<PAGE>
STABA BANCSHARES, INC. AND SUBSIDIARY
Donaldsonville, Louisiana
CONSOLIDATED STATEMENTS OF FINANCIAL CONDITION
DECEMBER 31, 1993 AND 1992
<TABLE>
<CAPTION>
1993 1992
---------- -------
ASSETS
--------
<S> <C> <C>
Cash and due from banks $3,870,539 $3,710,634
Interest bearing deposits with banks 1,085,000 2,173,015
Federal funds sold 3,849,068 5,950,753
Investment securities (market value of $40,857,136 in 1993
and $39,632,991 in 1992) 40,155,149 38,605,400
Loans, less allowance for credit losses of
$906,576 in 1993 and $808,886 in 1992 42,936,061 38,499,726
Properties and equipment 1,872,581 1,640,691
Accrued income and other assets 1,421,015 1,251,793
---------- ------------
Total Assets $95,189,413 $91,832,012
=========== ============
</TABLE>
<TABLE>
LIABILITIES AND STOCKHOLDERS' EQUITY
<CAPTION>
<S> <C> <C>
LIABILITIES
Demand deposits $13,340,460 11,031,735
NOW and savings deposits 33,716,390 32,018,984
Other time deposits 34,033,301 33,551,905
Time, $100,000 and over 6,720,500 8,727,789
----------- ----------
Total Deposits 87,810,651 85,330,413
Accrued expenses and other liabilities 412,199 626,778
----------- ----------
Total Liabilities 88,222,850 85,957,191
----------- ----------
COMMITMENTS AND CONTINGENT LIABILITIES - -
STOCKHOLDERS' EQUITY
Common stock - $1.25 par value
Authorized - 800,000 shares; issued 121,600
shares; outstanding - 118,938 shares 152,000 152,000
Surplus 3,176,000 3,176,000
Retained earnings 3,691,727 2,599,985
Treasury stock, 2,662 shares (53,164) (53,164)
---------- -----------
Total Stockholders' Equity 6,966,563 5,874,821
--------- -----------
Total Liabilities and Stockholders' Equity $95,189,413 $91,832,012
=========== ===========
</TABLE>
The accompanying notes are an integral part of these consolidated financial
statements.
<PAGE>
STABA BANCSHARES, INC. AND SUBSIDIARY
Donaldsonville, Louisiana
CONSOLIDATED STATEMENTS OF INCOME
YEARS ENDED DECEMBER 31, 1993, 1992, AND 1991
<TABLE>
<CAPTION>
1993 1992 1991
---------- -------- --------
INTEREST INCOME
<S> <C> <C> <C>
Interest and fees on loans $3,950,652 $3,716,323 $3,605,546
Interest on investment securities:
Taxable 2,073,727 2,023,243 1,735,789
Exempt from federal income taxes 293,766 281,723 252,921
Interest on federal funds sold 165,495 374,428 349,421
Interest on deposits with banks 77,052 80,732 125,000
---------- ---------- ----------
Total interest income 6,560,692 6,476,449 6,068,677
INTEREST EXPENSE
Interest on deposits 2,541,659 2,920,091 3,365,070
---------- ---------- ----------
NET INTEREST INCOME 4,019,033 3,556,358 2,703,607
Provision for credit losses 270,000 363,000 175,000
NET INTEREST INCOME AFTER PROVISION
FOR CREDIT LOSSES 3,749,033 3,193,358 2,528,607
--------- --------- ----------
OTHER INCOME
Service charges on deposit accounts 401,807 405,984 367,491
Other service charges 177,421 98,176 110,974
Net gain on sale of securities 90,633 - -
--------- --------- ----------
669,861 504,160 478,465
--------- --------- ----------
OTHER EXPENSES
Salaries and employee benefits 1,120,084 998,054 868,323
Occupancy expenses 162,669 162,233 137,317
Furniture and equipment expenses 317,583 218,283 201,272
Other operating expenses 1,038,708 906,608 767,754
--------- --------- ----------
Total other expenses 2,639,044 2,285,178 1,974,666
--------- --------- ----------
INCOME BEFORE INCOME TAXES 1,779,850 1,412,340 1,032,406
Applicable income taxes 527,542 348,581 270,174
--------- --------- ----------
NET INCOME $1,252,308 $1,063,759 $ 762,232
========== ========== ==========
Net income per share of common stock $10.53 $8.94 6.41
Cash dividends per share of common stock $1.35 $1.10 $1.00
Average shares outstanding 118,938 118,938 118,938
</TABLE>
The accompanying notes are an integral part of these consolidated financial
statements.
<PAGE>
STABA BANCSHARES, INC. AND SUBSIDIARY
Donaldsonville, Louisiana
CONSOLIDATED STATEMENTS OF CHANGES IN STOCKHOLDERS' EQUITY
YEARS ENDED DECEMBER 31, 1993, 1992, AND 1991
<TABLE>
<CAPTION>
Common Retained
Stock Surplus Earnings
---------- ---------- ----------
<S> <C> <C> <C>
Balance, December 31, 1990 $152,000 $1,676,000 $2,523,764
Net income - - 762,232
Cash dividends declared - - (118,938)
Unrealized gain on marketable equity security - - -
Transfer from retained earnings to surplus - 1,500,000 (1,500,000)
------- ---------- -----------
Balance, December 31, 1991 152,000 3,176,000 1,667,058
Net income - - 1,063,759
Cash dividends declared - - (130,832)
Unrealized gain on marketable equity security - - -
Realized gain on sale of marketable equity security - - -
-------- --------- -----------
Balance, December 31, 1992 152,000 3,176,000 2,599,985
Net income - - 1,252,308
Cash dividends declared - - (160,566)
------- --------- -----------
Balance, December 31, 1993 $152,000 $3,176,000 $3,691,727
======== ========== ==========
</TABLE>
The accompanying notes are an integral part of these consolidated financial
statements.
<TABLE>
<CAPTION>
Unrealized/
Realized Loss
Treasury On Marketable
Stock Equity Security Total
----------- ----------------- ---------
<S> <C> <C> <C>
Balance, December 31, 1990 ($53,164) ($28,435) $4,270,165
Net income - - 762,232
Cash dividends declard - - (118,938)
Unrealized gain on marketable equity security - 16,462 16,462
Transfer from retained earnings to surplus - - -
----------- ----------------- -----------
Balance, December 31, 1991 ( 53,164) ( 11,973) 4,929,921
Net income - - 1,063,759
Cash dividends declared - - (130,832)
Unrealized gain on marketable equity security - 2,245 2,245
Realized gain on sale of marketable equity security - 9,728 9,728
------------ ----------------- -----------
Balance, December 31, 1992 ( 53,164) - 5,874,821
Net income - - 1,252,308
Cash dividends declared - - 160,566
------------ ----------------- -----------
Balance, December 31, 1993 ($53,164) - $6,966,563
============ ================== ===========
</TABLE>
The accompanying notes are an integral part of these consolidated financial
statements.
<PAGE>
STABA BANCSHARES, INC. AND SUBSIDIARY
Donaldsonville, Louisiana Page 1 of 2
CONSOLIDATED STATEMENTS OF CASH FLOWS
YEARS ENDED DECEMBER 31, 1993, 1992, AND 1991
<TABLE>
<CAPTION>
1993 1992 1991
----------- ----------- ----------
<S> <C> <C> <C>
CASH FLOWS FROM OPERATING ACTIVITIES:
Net income $1,252,308 $1,063,759 $ 762,232
Adjustments to reconcile net income to net
cash provided by operating activities:
Depreciation and amortization 304,211 213,953 190,740
Deferred income taxes ( 57,000) (123,000) -
Provision for credit losses 270,000 363,000 175,000
Net gain on sale of securities ( 90,633) - -
(Increase) decrease in accrued income and other assets (253,902) ( 72,542) 8,683
Increase (decrease) in accrued expenses and other liabilities ( 93,054) 80,878 118,758
----------- ------------ -----------
Net cash provided by operating activities 1,331,930 1,526,048 1,255,413
<S> <C> <C> <C>
CASH FLOWS FROM INVESTING ACTIVITIES:
Net (increase) decrease in interest bearing deposits with banks 1,088,015 ( 490,015) ( 198,000)
Net (increase) decrease in federal funds sold 2,101,685 1,163,606 ( 6,287,932)
Proceeds from sale/maturity of investment securities 13,678,840 15,810,917 20,978,968
Purchase of investment securities (15,117,801) (29,440,673) (23,129,803)
Proceeds from sale of capital assets - - 3,876
Net (increase) in loans ( 4,706,335) ( 6,259,199) ( 4,771,587)
Purchase of buildings and equipment ( 536,101) ( 362,219) ( 105,187)
----------- ------------ ------------
Net cash used in investing activities ( 3,491,697) (19,577,583) (13,509,665)
</TABLE>
The accompanying notes are an integral part of these consolidated
financial statements.
<PAGE>
STABA BANCSHARES, INC. AND SUBSIDIARY
Donaldsonville, Louisiana Page 2 of 2
CONSOLIDATED STATEMENTS OF CASH FLOWS
YEARS ENDED DECEMBER 31, 1993, 1992, AND 1991
<TABLE>
<CAPTION>
1993 1992 1991
--------- --------- --------
<S> <C> <C> <C>
CASH FLOWS FROM FINANCING ACTIVITIES:
Net increase in non-interest bearing demand deposits,
NOW accounts, and savings accounts $4,006,131 $12,636,115 $ 7,284,255
Net increase (decrease) in time deposits (1,525,893) 5,656,899 5,831,053
Dividends paid ( 160,566) ( 130,832) ( 118,938)
----------- ------------ ------------
Net cash provided by financing activities 2,319,672 18,162,182 12,996,370
---------- ------------- ------------
Increase in cash and due from banks 159,905 110,647 742,118
Cash and due from banks at January 1 3,710,634 3,599,987 2,857,869
Cash and due from banks at December 31 $3,870,539 $3,710,634 $ 3,599,987
========== ========== ===========
SUPPLEMENTAL DISCLOSURES FOR CASH FLOW INFORMATION:
Cash paid during the year for:
Interest $2,562,897 $2,955,834 $ 3,357,587
Income taxes $ 891,878 $ 383,398 $ 202,119
</TABLE>
The accompanying notes are integral part of these consolidated financial
statements.
<PAGE>
STABA BANCSHARES, INC. AND SUBSIDIARY
Donaldsonville, Louisiana Page 1 of 14
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
1. SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES
The Company's wholly owned subsidiary, State Bank and Trust Company,
operates and extends credit primarily in and around Ascension Parish of
Louisiana.
Consolidation
The consolidated financial statements include the accounts of Staba
Bancshares, Inc. (The Company) and its wholly owned subsidiary, State
Bank and Trust Company (The Bank). Significant intercompany transactions
and amounts have been eliminated.
Investment securities
Investment debt securities are those securities which the Bank has the
ability and intent to hold to maturity. These securities are stated at
cost adjusted for amortization of premiums and accretion of discount
computed by the interest method. Generally, such securities are sold
only to meet liquidity needs. Gains or losses on disposition are
computed on the basis of specific identification of the adjusted cost of
each security.
Allowances for Credit Losses
The allowance is maintained at a level adequate to absorb probable
losses. Management determines the adequacy of the allowance based upon
reviews of individual credits, recent loss experience, current economic
conditions, the risk characteristics of the various categories of loans
and other pertinent factors. Credits deemed uncollectible are charged
to the allowance. Provisions for credit losses and recoveries on loans
previously charged off are added to the allowance.
Properties and Equipment
Properties and equipment are stated at cost less accumulated
depreciation. The provision for depreciation is computed principally by
the straight-line and accelerated methods over the estimated useful lives
of the assets.
Interest Income on Loans
Interest on loans is accrued and credited to income based on the
principal amount outstanding. The accrual of interest on loans is
discontinued when, in the opinion of management, there is an indication
that the borrower may be unable to meet payments as they become due.
Upon such discontinuance, all unpaid accrued interest is reversed.
STABA BANCSHARES, INC. AND SUBSIDIARY
Donaldsonville, Louisiana Page 2 of 14
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
1. SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (continued)
Pension Costs
Pension costs are charged to salaries and employee benefits expense and
are funded as accrued.
Other real estate
Assets acquired through the default of loans are recorded at the lower
of the outstanding loan amounts plus accrued interest or fair market
value of the assets acquired. Reductions from outstanding loan amounts
to fair market value are charged against the reserve for possible loan
losses. Subsequent valuations are charged to operating expense.
Income taxes
Effective January 1, 1993, the Bank adopted the method of accounting for
income taxes promulgated by SFAS 109. The Bank had previously accounted
for income taxes under the method promulgated by Statement of Financial
Accounting Standards No. 96 (SFAS 96). Under both SFAS 109 and SFAS 96,
the deferred tax liability is determined under the liability method,
based on the differences between the financial statements and tax bases
of assets and liabilities as measured by the enacted statutory tax rates,
and deferred tax expense is the result of changes in the net liability
for deferred taxes. The principal types of differences between assets
and liabilities for financial statement and tax return purposes are
accumulated depreciation, provision for loan losses, write downs of other
real estate, and accretion of discount on investment securities.
Net Income Per Share of Common Stock
Net income per share of common stock is computed by dividing net income
by the weighted average number of shares of common stock outstanding
during the period, after giving retroactive effect to stock dividends.
Off Balance Sheet Financial Instruments
In the ordinary course of business, the Bank has entered into off balance
sheet financial instruments consisting of commitments to extend credit
and standby letters of credit. Such financial instruments are recorded
in the financial statements when they become payable.
Cash and cash equivalents
For purposes of presentation in the Statements of Cash Flows, cash and
cash equivalents are defined as those amounts included in the balance
sheet caption "Cash and Due from Banks."
STABA BANCSHARES, INC. AND SUBSIDIARY
Donaldsonville, Louisiana Page 3 of 14
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
1. SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (continued)
Reclassifications
Certain items from 1992 and 1991 have been reclassified to be consistent
with current presentation.
Accounting Pronouncements Issued But Not Yet Adopted
The Financial Accounting Standards Board issued Financial Accounting
Standards No. 114 (SFAS 114) "Accounting by Creditors for Impairment of
a Loan", which establishes a new accounting principle for the measurement
of impaired loans. Additionally, SFAS 114 requires consideration of the
collectibility of both contractual principal and interest of all loans
when assessing the need for reserve for loan loss. The Bank is not
required to adopt SFAS 114 until the fiscal year beginning after December
15, 1994, with earlier application encouraged. The adoption of SFAS 114
is not expected to have a significant impact on the financial statements.
The Financial Accounting Standards Board also issued Financial Accounting
Standards No. 115 (SFAS 115), "Accounting for Certain Investments in Debt
and Equity Securities", which establishes a new accounting principle for
recording fair values of debt and equity securities. The Bank is not
required to adopt SFAS 115 until the fiscal year beginning after December
31, 1993. The adoption of SFAS 115 is not expected to have a significant
impact on the financial statements.
STABA BANCSHARES, INC. AND SUBSIDIARY
Donaldsonville, Louisiana Page 4 of 14
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
2.INTEREST BEARING DEPOSITS WITH BANKS
Interest bearing deposits with banks consist of the following time
deposits:
<TABLE>
<CAPTION>
1993 1992
------------------------------------------- ----------------------------------------
Date of Maturity Rate Amount Date of Maturity Rate Amount
---------------- ------ ---------- ---------------- ------ ----------
<C> <C> <C> <C> <C> <C>
3/21/94 3.70% $ 99,000 5/24/93 3.70% $ 99,000
5/31/94 3.60 99,000 6/01/93 3.75 99,000
6/06/94 3.90 99,000 3/22/93 4.00 99,000
3/14/94 3.65 99,000 6/01/93 3.80 99,000
3/21/94 3.65 99,000 6/07/93 3.75 99,000
1/31/94 3.90 99,000 5/17/93 3.75 99,000
2/07/94 3.70 99,000 5/19/93 3.50 99,000
6/06/94 3.67 99,000 6/14/93 3.45 99,000
5/31/94 3.25 95,000 3/15/93 3.85 99,000
2/07/94 3.85 99,000 3/15/93 3.70 99,000
2/07/94 3.80 99,000 12/16/93 4.00 99,000
---------- 2/05/93 5.00 99,000
2/05/93 5.00 99,000
2/05/93 5.05 99,000
2/05/93 5.00 99,015
12/07/93 4.25 99,000
5/28/93 4.00 95,000
5/19/93 3.65 99,000
5/19/93 3.90 98,000
5/19/93 3.50 99,000
5/21/93 3.60 99,000
5/19/93 3.70 99,000
----------
$1,085,000 $2,173,015
========== ==========
</TABLE>
STABA BANCSHARES, INC. AND SUBSIDIARY
Donaldsonville, Louisiana Page 5 of 14
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
3. INVESTMENT SECURITIES
The carrying amounts of investments securities as shown in the
consolidated statements of condition of the Company and their approximate
market values at December 31 were as follows:
<TABLE>
<CAPTION>
December 31, 1993
------------------------------------------------------
Gross Gross Estimated
Carrying Unrealized Unrealized Market
Amount Gains Losses Value
----------- ---------- ---------- -----------
<S> <C> <C> <C> <C>
U.S. Government and agency securities $35,459,391 $ 517,523 $144,422 $35,832,492
Obligations of state and political
subdivisions 4,695,758 328,886 - 5,024,644
----------- ---------- -------- -----------
$40,155,149 $ 846,409 $144,422 $40,857,136
=========== ========== ======== ===========
</TABLE>
<TABLE>
<CAPTION>
December 31, 1992
-------------------------------------------------------
Gross Gross Estimated
Carrying Unrealized Unrealized Market
Amount Gains Losses Value
-------- ---------- ---------- ---------
<S> <C> <C> <C> <C>
U.S Government and agency securities $34,143,279 $ 833,724 $ 3,736 $34,973,267
Obligations of state and political
subdivisions 4,462,121 197,700 97 4,659,724
----------- ---------- --------- ------------
$38,605,400 $1,031,424 $ 3,833 $39,632,991
=========== ========== ========= ============
</TABLE>
Gross realized gain and gross realized losses on sales of securities
were:
<TABLE>
<CAPTION>
1993
------------
<S> <C>
Gross realized gains:
U.S. government and agency securities $ 89,723
Obligation of state and political
subdivisions 1,000
-----------
$ 90,723
===========
Gross realized losses:
U.S. government and agency securities $ 90
===========
</TABLE>
STABA BANCSHARES, INC. AND SUBSIDIARY
Donaldsonville, Louisiana Page 6 of 14
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
3.INVESTMENT SECURITIES (continued)
The amortized cost and estimated market value of debt securities at
December 31, 1993, by contractual maturity are shown below. Expected
maturities will differ from contractual maturities because borrowers may
have the right to call or prepay obligations with or without call or
prepayment penalties.
<TABLE>
<CAPTION>
Approximate
Carrying Market
Amount Value
------------ ------------
<S> <C> <C>
Due in one year or less $ 16,591,113 $ 16,585,301
Due from one to five years 14,531,495 14,837,065
Due from five to ten years 3,665,837 3,944,015
Due after ten years 5,366,704 5,490,755
------------- ------------
$ 40,155,149 $ 40,857,136
============ ============
</TABLE>
Investment securities with an approximate carrying amount of $21,442,066
and $22,477,127 and an approximate market value of $22,211,194 and
$23,324,682 at December 31, 1993 and 1992, respectively were pledged to
secure public deposits and for other purposes as required or permitted
by law.
4.Loans
The components of loans in the consolidated statements of condition were
as follows:
<TABLE>
<CAPTION>
In Thousands
December 31,
-------------------------
1993 1992
----------- ---------
<S> <C> <C>
Commercial and industrial $ 4,807 $ 5,963
Real estate - residential 23,297 19,194
Real estate - non-residential 4,975 4,327
Agricultural loans 878 782
Loans to individuals for personal expenditures 9,501 8,636
All others 385 407
--------- ---------
43,843 39,309
Allowance for credit losses ( 907) ( 809)
--------- ---------
Loans, net $ 42,936 $ 38,500
========= =========
</TABLE>
STABA BANCSHARES, INC. AND SUBSIDIARY
Donaldsonville, Louisiana Page 7 of 14
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
4.LOANS (continued)
Loans on which the accrual of interest has been discontinued or reduced
amounted to $114,802 and $224,656 at December 31, 1993 and 1992,
respectively. If interest on those loans had been accrued, such income
would have approximated $5,769, $21,298, and $13,381 at December 31,
1993, 1992, and 1991, respectively. Interest income on those loans,
which is recorded only when received, amounted to $3,118, $4,731, and
$755 for December 31, 1993, 1992, and 1991, respectively.
5. ALLOWANCE FOR CREDIT LOSSES
An analysis of the changes in the allowance for credit losses follows:
<TABLE>
<CAPTION>
1993 1992 1991
--------- --------- ---------
<S> <C> <C> <C>
Balance at January 1 $ 808,886 $ 554,767 $ 455,707
Credits charged off (228,710) ( 164,790) ( 119,297)
Recoveries 56,400 55,909 43,357
Provision charged to operations 270,000 363,000 175,000
---------- ---------- ----------
Balance, end of year $ 906,576 $ 808,886 $ 554,767
========== ========== ==========
</TABLE>
Real estate and other assets acquired through foreclosure included in
accrued income and other assets was $99,662 and $14,126 at December 31,
1993 and 1992, respectively.
6. OFFICE BUILDING AND EQUIPMENT
Components of office building and equipment included in the consolidated
statements of condition at December 31, 1993 and 1992 were as follows:
<TABLE>
<CAPTION>
December 31,
----------------------------
1993 1992
----------- -----------
<S> <C> <C>
Land $ 311,146 $ 207,583
Buildings 1,511,486 1,482,847
Equipment 1,861,456 1,549,393
----------- -----------
3,684,088 3,239,823
Accumulated depreciation (1,811,507) (1,599,132)
----------- -----------
$1,872,581 $1,640,691
=========== ===========
</TABLE>
Depreciation expense amounted to $304,211, $213,953, and $190,740 for
1993, 1992, and 1991, respectively.
STABA BANCSHARES, INC. AND SUBSIDIARY
Donaldsonville, Louisiana Page 8 of 14
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
7. RETIREMENT PLAN
The State Bank and Trust Company has a non-contributory employees pension
plan covering substantially all full-time employees who meet certain age
and longevity requirements. Past service costs are amortized over 10
years. There was no pension expense for 1993, 1992, and 1991.
The Bank makes annual contributions to the plan equal to the maximum
deductible contribution calculated. A comparison of accumulated plan
benefits and plan net assets for the Bank's plan as of the latest
valuation date is presented below:
<TABLE>
<CAPTION>
January 1,
1993
-----------
Actuarial present value of accumulated plan benefits:
<S> <C>
Vested $ 376,943
Non-vested 69,390
----------
$ 446,333
==========
Market value of net assets available for benefits $ 848,331
==========
</TABLE>
The weighted average assumed rate of return used in determining the
actuarial present value of accumulated plan benefits was 7.5% for 1993,
1992, and 1991.
The Bank has elected not to adopt the Statement of Financial Accounting
Standard #87 as it applies to defined benefit pension plan reporting.
The effects on the financial statements are considered immaterial.
8. INCOME TAXES
The Company's effective tax rate is different from the federal statutory
rate of 34% due to the following analysis:
<TABLE>
<CAPTION>
Percent of Income Before Taxes
-------------------------------
1993 1992 1991
---------- -------- -------
<S> <C> <C> <C>
U. S. Federal income tax rate 34.0% 34.0% 34.0%
Adjustment in rate resulting from:
Tax exempt municipal bond income ( 5.5 ) ( 6.8 ) ( 8.3 )
Other 1.1 ( 2.5 ) .5
------- ------- -------
29.6% 24.7% 26.2%
======= ======= =======
</TABLE>
STABA BANCSHARES, INC. AND SUBSIDIARY
Donaldsonville, Louisiana Page 9 of 14
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
8. INCOME TAXES (continued)
Effective January 1, 1993, the Company adopted SFAS No. 109, under which
deferred income taxes are provided on the tax effect of changes in
temporary differences. Deferred tax assets are subject to a valuation
allowance if their realization is not reasonably assured. Deferred tax
assets (liabilities) are comprised of the following:
<TABLE>
<CAPTION>
1993
---------
<S> <C>
Accelerated depreciation $ 72,983
Municipal bond discount accretion 8,100
---------
Gross deferred tax liability 81,083
---------
Allowance for credit loss 261,083
---------
Gross deferred tax asset 261,083
---------
Net deferred tax asset $ 180,000
=========
</TABLE>
The elements of income tax expense are as follows:
<TABLE>
<CAPTION>
1993 1992 1991
--------- --------- ---------
<S> <C> <C> <C>
Currently payable $ 584,542 $ 471,581 $ 270,174
Deferred tax expense (asset) ( 57,000) ( 123,000) -
---------- ---------- ---------
$ 527,542 $ 348,581 $ 270,174
========= ========= =========
</TABLE>
9.RELATED PARTY TRANSACTIONS
The Bank has entered into transactions with its directors, significant
shareholders and their affiliates (related parties). Such transactions
were made in the ordinary course of business on substantially the same
terms and conditions, including interest rates and collateral, as those
prevailing at the same time for comparable transactions with other
customers, and did not, in the opinion of management, involve more than
normal credit risk or present other unfavorable features. An analysis
of activity during 1993 and 1992 with respect to loans to officers and
directors of the Bank is as follows:
<TABLE>
<CAPTION>
1993 1992
<S> <C> <C>
Balance, January 1 $ 2,724,640 $ 2,868,017
New loans 1,526,546 2,472,653
Repayments 1,750,806 2,616,030
----------- -----------
Balance, December 31 $ 2,500,380 $ 2,724,640
=========== ===========
</TABLE>
STABA BANCSHARES, INC. AND SUBSIDIARY
Donaldsonville, Louisiana Page 10 of 14
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
10. COMMITMENTS AND CONTINGENT LIABILITIES
The Bank's consolidated financial statements do not reflect various
commitments and contingent liabilities which arise in the normal course
of business and which involve elements of credit risk, interest rate risk
and liquidity risk. These commitments and contingent liabilities are
commitments to extend credit, commercial letters of credit and standby
letters of credit. A summary of the Bank's commitments and contingent
liabilities at December 31, 1993, is as follows:
Notional
Amount
Commitments to extend credit $5,154,442
==========
Standby letters of credit $ 603,283
==========
Commitments to extend credit and standby letters of credit include
exposure to some credit loss in the event of nonperformance of the
customer. The Bank's credit policies and procedures for credit
commitments and financial guarantees are the same as those for extension
of credit that are recorded on the consolidated statements of condition.
Because these instruments have fixed maturity dates, and because many of
them expire without being drawn upon, they do not generally present any
significant liquidity risk to the Bank. The Bank has not been required
to perform on any financial guarantees during the past two years. The
Bank has not incurred any losses on its commitments in either 1993 or
1992.
11. CONCENTRATIONS OF CREDIT
Substantially, all of the Bank's loans, commitments and standby letters
of credit have been granted to customers in the Bank's market area.
Substantially, all such customers are depositors of the Bank.
Investments in state and municipal securities involve governmental
entities within Louisiana. The concentrations of credit by type of loan
are set forth in Note 4. The distribution of commitments to extend
credit approximates the distribution of loans outstanding. 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 $1,664,000.
At December 31, 1993, the Bank had cash in excess of the insured amount
of $2,005,513. Cash recorded on the balance sheet is reduced by
outstanding checks.
STABA BANCSHARES, INC. AND SUBSIDIARY
Donaldsonville, Louisiana Page 11 of 14
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
12. Retained Earnings
The Bank, as a state bank, is subject to the dividend restrictions set
forth by the Commissioner of Financial Institutions. Under such
restrictions, the Bank may not, without the prior approval of the
Commissioner, declare dividends in excess of the sum of the current
year's retained net profits (as defined) plus the retained net profits
(as defined) from the prior year. The dividends, as of December 31,
1993, that the Bank could declare, without the approval of the
Commissioner, amounted to $2,024,669. The Bank is also required to
maintain minimum amounts of capital to total "risk weighted" assets, as
defined by the banking regulators. At December 31, 1993 the Bank is
required to have minimum Tier I and Total capital ratios of 4.00% and
8.00%, respectively. The Bank's actual ratio's at that date were 12.90%
and 14.15%, respectively.
STABA BANCSHARES, INC. AND SUBSIDIARY
Donaldsonville, Louisiana Page 12 of 14
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
13.Staba Bancshares, Inc. (Parent Company Only) Financial Statements
<TABLE>
<CAPTION>
BALANCE SHEETS
--------------
A S S E T S
-----------
1993 1992
---------- --------
<S> <C> <C>
Cash deposited in subsidiary bank $ 24,571 $ 24,921
Dividends receivable from State Bank and
Trust Company 160,566 130,832
Investment in subsidiary - State Bank and
Trust Company 6,941,992 5,849,900
---------- ----------
$7,127,129 $6,005,653
========== ==========
</TABLE>
L I A B I L I T I E S A N D S T O C K H O L D E R 'S E Q U I T Y
<TABLE>
<CAPTION>
LIABILITIES
<S> <C> <C>
Dividends payable $ 160,566 $ 130,832
---------- ----------
STOCKHOLDER'S EQUITY
Common stock - $1.25 par value
Authorized - 800,000 shares; issued
212,600 shares outstanding - 118,938 shares 152,000 152,000
Surplus 3,176,000 3,176,000
Retained earnings 3,691,727 2,599,985
Treasury stock, 2,662 shares ( 53,164) ( 53,164)
----------- -----------
Total stockholders' equity 6,966,563 5,874,821
----------- -----------
$7,127,129 $6,005,653
=========== ===========
</TABLE>
STABA BANCSHARES, INC. AND SUBSIDIARY
Donaldsonville, Louisiana Page 13 of 14
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
13.Staba Bancshares, Inc. (Parent Company Only) Financial Statements (continued)
STATEMENTS OF OPERATIONS
<TABLE>
<CAPTION>
1993 1992 1991
----------- ----------- ----------
<S> <C> <C> <C>
INCOME
Dividends from subsidiary:
State Bank and Trust Company $ 160,566 $ 130,832 $ 118,938
----------- ----------- -----------
EXPENSE
Amortization and fees 350 1,077 350
----------- ----------- -----------
INCOME BEFORE EQUITY IN UNDISTRIBUTED INCOME 160,216 129,755 118,588
Equity in undistributed income of subsidiary 1,092,092 934,004 643,644
---------- ----------- -----------
NET INCOME $1,252,308 $1,063,759 $ 762,232
========== ========== ===========
</TABLE>
STATEMENTS OF CASH FLOWS
<TABLE>
<CAPTION>
1993 1992 1991
--------- --------- ---------
<S> <C> <C> <C>
Cash flows from operating activities:
Net income $1,252,308 $1,063,759 $ 762,232
Adjustments to reconcile net income to net
cash provided by operating activities:
Undistributed current income from Bank
subsidiary (1,092,092) ( 934,004) ( 643,644)
----------- ----------- -----------
Net cash provided by operating activities 160,216 129,755 118,588
----------- ----------- -----------
Cash flows from financing activities:
Dividends paid ( 160,566) ( 130,832) ( 118,938)
----------- ----------- -----------
Net cash used by financing activities ( 160,566) ( 130,832) ( 118,938)
----------- ----------- -----------
Decrease in cash and cash equivalents ( 350) ( 1,077) ( 350)
Cash and cash equivalents at January 1 24,921 25,998 26,348
----------- ----------- -----------
Cash and cash equivalents at December 31 $ 24,571 $ 24,921 $ 25,998
=========== =========== ===========
</TABLE>
STABA BANCSHARES, INC. AND SUBSIDIARY
Donaldsonville, Louisiana Page 14 of 14
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
14.State Bank and Trust Balance Sheet
<TABLE>
<CAPTION>
A S S E T S
-----------
December 31,
------------------------------
1993 1992
------------- ------------
<S> <C> <C>
Cash and due from banks $ 3,870,539 $ 3,710,634
Interest bearing deposits in banks 1,085,000 2,173,015
Federal funds sold 3,849,068 5,950,753
Investment securities (market value of
$40,857,136 in 1993 and $39,632,991 in 1992) 40,155,149 38,605,400
Loans, less allowance for credit losses of $906,576 in 1993
and $808,886 in 1993 42,936,061 38,499,726
Properties and Equipment 1,872,581 1,640,691
Accrued income and other assets 1,421,015 1,251,793
------------ ------------
$ 95,189,413 $ 91,832,012
============ ============
</TABLE>
L I A B I L I T I E S A N D S T O C K H O L D E R 'S E Q U I T Y
<TABLE>
<CAPTION>
<S> <C> <C>
LIABILITIES
Demand deposits $13,365,031 $ 11,056,656
NOW and savings deposits 33,716,390 32,018,984
Other time deposits 34,033,301 33,551,905
Time, $100,000 and over 6,720,500 8,727,789
----------- ------------
Total deposits 87,835,222 85,355,334
Accrued expenses and other liabilities 412,199 626,778
----------- ------------
Total liabilities 88,247,421 85,982,112
Commitments and contingent liabilities ----------- ------------
STOCKHOLDER'S EQUITY
Common stock - $5.00 par value
Authorized - 120,000 shares; issued and
outstanding - 30,400 shares 152,000 152,000
Surplus 3,176,000 3,176,000
Retained earnings 3,613,992 2,521,900
----------- ------------
Total stockholders' equity 6,941,992 5,849,900
----------- ------------
$95,189,413 $91,832,012
=========== ============
</TABLE>
Appendix A
AGREEMENT AND PLAN OF MERGER
OF
STABA BANCSHARES, INC.
WITH AND INTO
HIBERNIA CORPORATION
AGREEMENT AND PLAN OF MERGER dated as of November 4, 1994
(this "Agreement"), adopted and made by and between STABA
Bancshares, Inc. ("STABA") and Hibernia Corporation ("Hibernia").
STABA is a corporation duly organized and existing under the
laws of the State of Louisiana; has its registered office at 400
Mississippi Street, Donaldsonville, Louisiana 70346; 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 STABA consists solely of
800,000 shares of common stock of the par value of $1.25 each
("STABA Common Stock"). As of September 30, 1994, 121,600 shares
of STABA Common Stock had been issued, 118,938 shares of STABA
Common Stock were outstanding, and 2,662 shares of STABA Common
Stock were held in STABA's treasury. All outstanding shares of
STABA Common Stock have been duly issued and are validly
outstanding, fully paid and nonassessable. The foregoing are the
only voting securities of STABA authorized, issued, or outstanding,
and there are no existing options, warrants, calls, or commitments
of any kind obligating STABA 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 STABA's capital stock has been issued in
violation of preemptive rights of shareholders. STABA owns 100
percent of the outstanding voting shares of State Bank and Trust
Company, Donaldsonville, Louisiana (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 September 30, 1994, no shares of
Hibernia's preferred stock or were outstanding, 96,924,803 shares
of Hibernia Common Stock were outstanding, and 192,700 shares of
Hibernia Common Stock were held in Hibernia's treasury. 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
1,711,428 shares of Hibernia Common Stock for issuance under its
1987 Stock Option Plan, pursuant to which options covering
1,555,212 shares of Hibernia Common Stock were outstanding as of
September 30, 1994, 3,852,787 (as adjusted) shares of Hibernia
Common Stock for issuance under its 1992 Long-Term Incentive Plan,
pursuant to which options covering 2,539,646 shares of Hibernia
Common Stock were outstanding as of September 30, 1994, 1,000,000
shares of Hibernia Common Stock for issuance under its 1993
Director Stock Option Plan, pursuant to which options covering
155,000 shares of Hibernia Common Stock are outstanding on the date
hereof, 523,783 shares of Hibernia Common Stock are available for
issuance pursuant to Hibernia's Dividend Reinvestment and Stock
Purchase Plan. Mergers that have been consummated with Commercial
Bancshares, Inc., Bastrop National Bank, First Bancorp of
Louisiana, Inc. and First Continental Bancshares, Inc. will result
in the issuance of an aggregate of approximately 13,021,494 shares.
Pending mergers with Pioneer Bancshares Corporation, Shreveport,
Louisiana, First State Bank and Trust Company, Bogalusa, Louisiana,
and American Bank, Norco, Louisiana, will result in the issuance of
an estimated approximately 14.0 million shares of Hibernia Common
Stock. None of the shares of Hibernia's capital stock has been
issued in violation of preemptive rights of shareholders.
HNB is a national banking association organized and existing
under the laws of the United States of America having its principal
registered office at 313 Carondelet Street, New Orleans, Louisiana
70130. All of the issued and outstanding shares of capital stock
of HNB are owned by Hibernia. HNB is (i) an "insured bank" as
defined in the Federal Deposit Insurance Act and applicable
regulations thereunder, and (ii) has been duly organized and is
validly existing as a national bank under the laws of the United
States, and has full authority to conduct its business as and where
currently conducted.
The Boards of Directors of STABA and Hibernia have duly
approved this Agreement and have authorized the execution hereof by
STABA's Chief Executive Officer and Hibernia's President and Chief
Executive Officer, respectively. STABA 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
STABA 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), STABA 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. STABA Common Stock.
3.1. Conversion. On the Effective Date and subject to
the provisions of Section 3.7 hereof,
(a) each share of STABA 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
STABA 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 STABA;
(c) each share of STABA Common Stock held in the
treasury of STABA 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 STABA 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 STABA 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
STABA 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 STABA 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 STABA or Hibernia of the shares of STABA 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 STABA 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 STABA 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 STABA, and otherwise to
carry out the purposes of this Agreement.
3.7. Dissenters' Shares. Shares of STABA 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 STABA Common Stock, at which time
such shares shall be converted as provided in Section 3.1 hereof.
3.8. Exchange Rate.
(a) The Exchange Rate shall be the number that is number
obtained by dividing the Deliverable Amount (as defined below) by
the total number of issued and outstanding shares of STABA Common
Stock on the Closing Date.
(b) For purposes of this Agreement, the Deliverable
Amount shall be the number that equals 18,000,000 divided by the
Average Market Price of Hibernia Common Stock on the Closing Date
(as defined in paragraph (c) below).
(c) For purposes of this Agreement, the Average Market
Price of Hibernia Common Stock on the Closing Date shall be the
average of the mean of the high and low prices of one share of
Hibernia Common Stock for the five business days preceding the last
trading day immediately prior to the Closing Date as reported in
The Wall Street Journal.
4. Articles of Incorporation; Bylaws. The Articles of
Incorporation and Bylaws of Hibernia in force immediately prior to
the Effective Date shall on and after the Effective Date continue
to be the Articles of Incorporation and Bylaws of Hibernia,
respectively, unless altered, amended or repealed in accordance
with applicable law.
5. Employees. Hibernia shall cause to be provided as soon
as practicable after the Effective Date for the employees of STABA
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, including
but not limited to severance benefits under Hibernia's or HNB's
severance plans or policies to be paid to employees of STABA or
Bank who do not become employees of Hibernia or HNB on the
Effective Date; provided, however, that for purposes of determining
the eligibility of an employee of STABA 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 STABA 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 STABA 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 STABA or Bank and prohibit
participation by former employees of STABA 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 STABA or Bank plan in question, and provided still
further, however, that Hibernia will terminate that certain
Retirement Plan for Employees of State Bank and Trust Company, as
amended and restated, in accordance with the provisions thereof,
and pay to the employees of STABA entitled thereto the amount of
their vested benefit plus 50 percent of any overfunding in such
plan.
6. Negative Covenants. From the date hereof until the
Effective Date, or until the termination of this Agreement, STABA
covenants and agrees that it will not do, or agree to commit to do,
and STABA 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 STABA (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 STABA Common Stock
(other than in a fiduciary capacity), except for quarterly
dividends in an amount not to exceed the aggregate of $1.35 per
share per year during 1994 and quarterly dividends in an amount not
to exceed $0.34 per share per quarter during 1995;
(b) authorize the creation or issuance of or issue any
additional shares of its capital stock, or any options, calls,
warrants, stock appreciation rights or commitments relating to its
capital stock or any securities or obligations convertible into or
exchangeable for, or giving any person any right to subscribe for
or acquire from it, shares of its capital stock;
(c) enter into any employment contracts with, increase
the rate of compensation of, or pay or agree to pay any bonus to,
any of its directors, officers or employees, except that bonuses
may be paid in 1995 prior to the Effective Date in accordance with
existing policy (i) with respect to performance during 1994 in an
aggregate amount not to exceed $66,500 and (ii) with respect to
performance during 1995 in an aggregate amount not to exceed an
amount equal to $50,000 multiplied by a fraction, the numerator of
which shall be the number of whole months elapsed during 1995 prior
to the Effective Date, and the denominator of which shall be 12;
(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
STABA 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 other than the
branch office under construction in Prairieville, Louisiana, the
costs of construction of which shall not exceed $500,000, (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 STABA'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 STABA. STABA (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 STABA 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 STABA 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 STABA
has all requisite power and authority to execute and deliver this
Agreement and perform its obligations hereunder.
7.3. Ownership of Other Banks. STABA 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 120,000 shares of
common stock of the par value of $5.00 each, of which 30,400 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 all of such shares are owned by STABA,
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 STABA'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 STABA 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 STABA, enforceable against STABA 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 STABA 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 STABA or the Bank or to which STABA 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 STABA and the Bank taken as
a whole or on the transactions contemplated hereby, (ii) to the
best of the knowledge of STABA'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 STABA or the Bank or to which
STABA or the Bank is subject, or (iii) a breach or violation of, or
a default under, the Articles of Incorporation or Bylaws of STABA
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. STABA
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 "STABA Financial
Statements"): STABA's Consolidated Balance Sheets as of June 30,
1994 and 1993 (unaudited) and December 31, 1993, 1992, and 1991
(audited); Consolidated Statements of Income and Changes in
Stockholders' Equity and Consolidated Statements of Cash Flows for
the years ended December 31, 1993, 1992, and 1991 (audited), and
Consolidated Statements of Income for the six-month periods ended
June 30, 1994 and 1993 (unaudited). Each of the STABA Financial
Statements (including the related notes) fairly presents the
consolidated results of operations of STABA and the Bank for the
respective periods covered thereby and the consolidated financial
condition of STABA 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 STABA 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 STABA 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, 1994,
there has been no event or condition of any character (whether
actual, or to the knowledge of the managements of STABA or the
Bank, threatened or contemplated) that has had or can reasonably be
anticipated to have, or that, if concluded or sustained adversely
to STABA, would reasonably be anticipated to have, a material
adverse effect on the financial condition, results of operations,
business or prospects of STABA or the Bank, excluding changes in
laws or regulations or generally accepted or regulatory accounting
principles 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 STABA
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 STABA and the Bank taken as a whole, and, to
the best of its management's knowledge, no such litigation,
proceeding or controversy has been threatened or is contemplated.
No member of STABA'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 STABA nor the Bank is bound by any
material contract to be performed after the date hereof that is not
terminable by STABA 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 STABA 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 other than Chaffe & Associates,
Inc., and National Capital Corporation.
7.11. Contingent Liabilities. Except as disclosed on
Schedule 7.11 hereto or as reflected in the STABA Financial
Statements, including the notes thereto, 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, 1994,
neither STABA 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 STABA 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 September 30, 1994, or
from any action omitted to be taken during such period that, to the
knowledge of the management of STABA, 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 STABA 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, 1994,
neither STABA nor the Bank has incurred or paid any obligation or
liability that would be material to STABA 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 STABA or the Bank have been timely filed
or requests for extensions have been timely filed and granted and
have not expired for periods ending on or before December 31, 1993,
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 STABA or the Bank except
as reserved against in the STABA Financial Statements. All taxes,
interest, additions and penalties due with respect to completed and
settled examinations or concluded litigation have been paid, and
STABA's reserves for bad debts at December 31, 1993, as filed with
the Internal Revenue Service were not greater than the maximum
amounts permitted under the provisions of Section 585 of the
Internal Revenue Code of 1986, as amended (the "Internal Revenue
Code").
7.15. Loans. To the best knowledge and belief of its
management, each loan reflected as an asset of STABA in the STABA
Financial Statements, as of June 30, 1994, or acquired since that
date, is the legal, valid, and binding obligation of the obligor
named therein, enforceable in accordance with its terms, and no
loan is subject to any asserted defense, offset or counterclaim
known to the management of STABA, 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 STABA as of
June 30, 1994, are adequate in all material respects under the
requirements of GAAP to provide for possible losses, net of
recoveries, relating to loans previously charged off, on loans
outstanding (including accrued interest receivable) as of June 30,
1994, and each such allowance has been established in accordance
with GAAP.
7.17. Title to Assets; Adequate Insurance Coverage.
(a) As of June 30, 1994, STABA 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 STABA 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 STABA Financial Statements or which secure deposits of
public funds as required by law; (ii) liens for taxes accrued but
not yet payable; (iii) liens arising as a matter of law in the
ordinary course of business with respect to obligations incurred
after June 30, 1994, provided that the obligations secured by such
liens are not delinquent or are being contested in good faith; (iv)
such imperfections of title and encumbrances, if any, as do not
materially detract from the value or materially interfere with the
present use of any of such properties or assets or the potential
sale of any such owned properties or assets; and (v) capital leases
and leases, if any, to third parties for fair and adequate
consideration. STABA 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 STABA 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 STABA or Bank in such lease of such
property.
(b) With respect to each lease of any real property or
a material amount of personal property to which STABA or the Bank
is a party, except for financing leases in which STABA or the Bank
is lessor: (i) such lease is in full force and effect in
accordance with its terms; (ii) all rents and other monetary
amounts that have become due and payable thereunder have been paid;
(ii) there exists no default or event, occurrence, condition or act
which with the giving of notice, the lapse of time or the happening
of any further event, occurrence, condition or act would become a
default under such lease; and (iv) neither the Merger nor the
merger of the Bank and HNB will constitute a default or a cause for
termination or modification of such lease.
(c) Neither STABA 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 STABA and the Bank
provide adequate coverage against loss and the fidelity bonds in
effect as to which STABA or the Bank is named insured meet the
applicable standards of the American Bankers Association.
7.18. Employee Plans. To the best of the management of
STABA'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 STABA 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, STABA has provided Hibernia with true, complete and
accurate copies of all pension, retirement, stock purchase, stock
bonus, stock ownership, stock option, savings, stock appreciation
right or profit-sharing plans, any employment, deferred
compensation, consultant, severance, bonus, or collective
bargaining agreement or group insurance contract, or any other
incentive, welfare, or employee benefit plan or agreement
maintained by it or the Bank for its or the Bank's employees or
former employees.
7.20. Plan Liability. Except for liabilities to the
Pension Benefit Guaranty Corporation pursuant to Section 4007 of
ERISA, all of which have been fully paid, and except for
liabilities to the Internal Revenue Service under section 4971 of
the Internal Revenue Code, all of which have been fully paid,
neither STABA 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. Neither STABA 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, which default has had or could reasonably be anticipated
to have a material adverse effect on STABA or the Bank.
7.22. Minutes. Prior to the date hereof, STABA has made
available to Hibernia, for inspection pursuant to the terms of
Section 9.5 hereof, the minutes of meetings of STABA's and the
Bank's Board of Directors and all committees thereof held prior to
the date hereof, which minutes are complete and correct in all
respects and fully and fairly present the material deliberations
and actions of such Boards and committees and accurately reflect in
all material respects the business condition and operations of
STABA 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 STABA or the Bank at the date hereof. Except as
disclosed on Schedule 7.23 hereto, neither STABA 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 STABA nor the Bank has been refused any
insurance coverage sought or applied for, and its management 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 STABA or
the Bank.
7.24. Investments. Except for pledges to secure public
or trust deposits, none of the investments reflected in the STABA
Financial Statements under the heading "Investment Securities," and
none of the investments made by STABA or the Bank since September
30, 1994, and none of the assets reflected in the STABA 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 STABA or the Bank freely to
dispose of such investment at any time. With respect to all
repurchase agreements to which STABA or the Bank is a party, STABA
or the Bank, as the case may be, has a valid, perfected first lien
or security interest in the government securities or other
collateral securing each such repurchase agreement which equals or
exceeds the amount of the debt secured by such collateral under
such agreement.
7.25. Environmental Matters. Except as disclosed on
Schedule 7.25 hereto, neither STABA nor the Bank nor, to the
knowledge of the managements of STABA 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 STABA or
the Bank or used by STABA or the Bank in their respective business
("STABA Properties") used, generated, treated, stored, or disposed
of any hazardous waste, toxic substance, or similar materials on,
under, or about STABA 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"). Except as disclosed on Schedule 7.25
hereto, neither STABA 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 STABA 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, 1993, its Quarterly Reports on Form 10-Q for the
periods ended March 31 and June 30, 1994, and its proxy statement
for its 1994 annual meeting of shareholders, each in the form
(including exhibits) filed with the Securities and Exchange
Commission (the "SEC") and its quarterly report to shareholders
for the period ended June 30, 1994 (collectively, the "Hibernia
Reports"), contained any untrue statement of a material fact or
omitted to state a material fact required to be stated therein or
necessary to make the statements made therein, in light of the
circumstances under which they were made, not misleading. There is
no fact or circumstance that, individually or in the aggregate,
materially and adversely has affected or is so affecting, or, in
the opinion of the executive officers of Hibernia, may reasonably
be expected in the future to so affect, the business, financial
condition, net worth, properties, 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 STABA on or before the date hereof.
8.7. No Material Adverse Change. Since June 30, 1994,
there has been no event or condition of any character (whether
actual, or to the knowledge of Hibernia or HNB, threatened or
contemplated) that has had or can reasonably be anticipated to
have, or that, if concluded or sustained adversely to Hibernia,
would reasonably be anticipated to have, a material adverse effect
on the financial condition, results of operations, business or
prospects of Hibernia or HNB, excluding changes in laws or
regulations that affecting banking institutions generally.
8.8. Community Reinvestment Act. As of the date hereof,
HNB has received a Community Reinvestment Act ("CRA") performance
evaluation of not less than "Satisfactory," and to the best
knowledge of management of Hibernia, there is no reason to believe
that such evaluation would be lowered or that any protest to any
application for approval of the Merger is likely to be made on the
grounds of HNB's CRA performance or fair lending.
8.9. Pooling-of-Interests Accounting Treatment. To the
best knowledge of the management of Hibernia, there is no reason to
believe that the Merger would not be treated as a pooling-of-
interests for accounting purposes.
9. Agreements and Covenants. Hibernia and STABA 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 STABA relating
to STABA, (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 STABA 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. The parties
will cooperate in any public announcements directly related to the
Merger. Unless approved by the other in advance, neither Hibernia
nor STABA will issue any press release, marketing or advertising
material, or other written statement for general circulation
relating to the transactions contemplated hereby (collectively, a
"Statement"), except as otherwise required by law. Notwithstanding
the foregoing, Hibernia may, without the prior consultation with or
approval of STABA, issue any Statement which discloses only the
terms of this Agreement, any information contained in any
Registration Statement or draft thereof, or the substantive facts
of a previously released Statement so long as STABA is furnished
with a copy of such Statement within a reasonable time after its
issuance, except that Hibernia will not issue any initial press
release announcing the signing of this Agreement without the prior
approval of the STABA.
9.5. Material Developments; Access to Information.
(i) In order to afford STABA 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 STABA 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 STABA and such representatives with such
financial and operating data and other information of any kind
respecting its business and properties as STABA shall from time to
time reasonably request to perform such review, (B) furnish STABA
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 STABA 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 STABA to be acquired
as a result of the Merger, STABA 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 STABA 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 STABA 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,
STABA or the Bank or any business combination with STABA or the
Bank other than as contemplated by this Agreement. STABA shall
instruct each officer, director, agent, or affiliate of it or the
Bank to refrain from doing any of the above, and STABA 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, STABA;
provided, however, that nothing contained in this section shall be
deemed to prohibit any officer or director of STABA or the Bank
from taking any action or causing STABA to take any action that, in
the opinion of his counsel or counsel to STABA or the Bank, a copy
of which opinion shall be furnished to Hibernia upon its request,
is required by applicable law or to fulfill his fiduciary duties.
9.7. Affiliates. Prior to the Closing Date (as defined
in Section 14 hereof), STABA shall deliver to Hibernia a letter
identifying all persons whom it believes to be "affiliates" of
STABA for purposes of Rule 145(c) or Rule 144 (as applicable) under
the 1933 Act ("Affiliates"). STABA 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 STABA 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 reasonable
best efforts in good faith 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, STABA 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 STABA 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), STABA 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 STABA 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, warranty, or covenant made
by STABA herein.
9.12. Indemnification of Directors and Officers of STABA
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 hereof serves as an officer or director of STABA 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 STABA 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 STABA or the Bank, as the case may be, to notify
its director and officer liability insurance carrier of the
existence of such claim prior to the Closing Date.
(b) The rights granted to the Indemnified Persons hereby
shall be contractual rights inuring to the benefit of all
Indemnified Persons and shall survive this Agreement and any
merger, consolidation or reorganization of Hibernia or HNB.
(c) The rights to indemnification granted by this
subsection 9.12 are subject to the following limitations: (i) the
total aggregate indemnification to be provided by Hibernia pursuant
to subsection 9.12(a) shall not exceed, as to all of the
Indemnified Persons as a group, the sum of $5,000,000, and Hibernia
shall have no responsibility to any Indemnified person for the
manner in which such sum is allocated among that group (but nothing
in this subsection is intended to prohibit the Indemnified Persons
from seeking reallocation among themselves); (ii) a director or
officer who would otherwise be an Indemnified Person under this
subsection 9.12 shall not be entitled to the benefits hereof unless
such director or officer has executed a Joinder Agreement (the
"Joinder Agreement") in the form of Exhibit 9.12 hereto; and (iii)
amounts otherwise required to be paid by Hibernia to an Indemnified
Person pursuant to this subsection 9.12 shall be reduced by any
amounts that such Indemnified Person recovers by virtue of the
claim for which other employees and officers indemnification is
sought.
(d) Hibernia agrees that the $5,000,000 indemnification
limit set forth in paragraph (c) of this Section 9.12 shall not
apply to any damages, liabilities, judgments and claims (and
related expenses, including but not limited to attorney's fees and
amounts paid in settlement) insofar as they arise out of or are
based upon the matters for which indemnification is provided in
Section 11.2 hereof.
9.13 Covenant to Close. At such time as is deemed
appropriate by the parties hereto or as otherwise set forth in this
Agreement, and upon satisfaction or waiver of each of the
conditions to Closing of the Merger, the parties agree to take such
actions as are reasonably necessary or appropriate to effect the
Closing and the Merger.
9.14 New York Stock Exchange Listing. Hibernia shall
use its best efforts in good faith to take or cause to be taken all
action necessary to cause the shares of Hibernia Common Stock
contemplated to be issued pursuant to Section 3.1 hereof to be
listed on the New York Stock Exchange, Inc.
9.15 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 and Exchange Act of 1934, as amended, or the rules and
regulation promulgated thereunder, so as to continue the
availability of Rule 144 for sales of Hibernia Common Stock. In
the event of any proposed sale by any former shareholder of STABA
who receives shares of Hibernia Common Stock by reason of 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 144, the requirements of Hibernia's transfer agent, and
the reasonable requirements of any broker through which such a sale
is proposed to be executed, including, but not limited to,
furnishing at its expense an opinion of counsel or other statement
satisfactory to the transfer agent to the effect that the shares
may be transferred, to the extent it is able to furnish such
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) STABA shall endeavor to have its Affiliates execute
a written agreement in substantially the form of Exhibit 9.7
hereto; provided, however, that STABA shall have no such obligation
prior to the receipt by the Board of Directors of STABA of the
Fairness Opinion; and
(d) STABA shall endeavor to have each of the directors of
STABA and the Bank execute a Non-Competition Agreement in
substantially the form of Exhibit 10(d) hereto; provided, however,
that STABA shall have no such obligation prior to the receipt by
the Board of Directors of STABA of the Fairness Opinion.
11. Confidentiality; Hold Harmless; Restriction on
Acquisitions.
11.1. Confidentiality. For a period of five years after
the date hereof, the parties hereto acknowledge that each of them
or their representatives or agents has engaged in, and may continue
to engage in, certain due diligence reviews and examinations with
respect to the other and that, in the course of such reviews and
examination, has received or may receive in the future confidential
or proprietary information. Hibernia and STABA 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 STABA
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,
specifically the terms of the confidentiality agreement dated June
27, 1994, between Chaffe & Associates, Inc., and Hibernia
Corporation.
11.2. Hold Harmless. Hibernia will indemnify and hold
harmless STABA, each of its directors and officers and each person,
if any who controls STABA 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 STABA 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 with 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 STABA and
exercise and perfection of dissenters' rights pursuant to Section
12:131 of the LBCL by holders of STABA Common Stock holding in the
aggregate no more than 10% of the STABA 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/or 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 and Kenneth A. Bailey and Hibernia shall have
entered into an employment agreement substantially in the form of
Exhibit 12.3 hereto superseding that certain Employment Agreement
by and between State Bank and Trust Company and Kenneth A. Bailey
dated March 1, 1994.
12.4. No Restraining Action. No litigation or
proceeding initiated by any governmental authority shall be
threatened or pending before any court or agency that shall present
a claim to restrain, prohibit or invalidate the transactions
contemplated hereby and neither Hibernia nor STABA 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. STABA and its
directors shall have received an opinion, dated the Closing Date,
of counsel for Hibernia, in form and substance satisfactory to
STABA, as to such matters as STABA may reasonably request with
respect to the transactions contemplated hereby.
12.6. Opinion of STABA Counsel. Hibernia, its directors
and its officers who sign the Registration Statement shall have
received an opinion, dated the Closing Date, of Correro, Fishman &
Casteix or Alan J. Robert, counsel for STABA, 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
STABA. Each of the representations, warranties, and agreements of
STABA 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 Chief Executive Officer
and the President of STABA, dated the Closing Date, to such effect;
STABA 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.
STABA 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 STABA
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 STABA such other
certificates as STABA 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 STABA with such further documents or other materials as
STABA 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 STABA 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 STABA shall have
received an opinion of a nationally recognized public accounting
firm satisfactory to STABA, but at no cost or expense to STABA,
which opinion shall be satisfactory in form and substance to
Hibernia and STABA, 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 STABA Common Stock to the
extent exchanged for Hibernia Common Stock will not give rise to
gain or loss to the shareholders of STABA with respect to such
exchange and that the Louisiana income tax treatment to the
shareholders of STABA will be substantially the same as the federal
income tax treatment to the shareholders of STABA.
12.12. Listing on New York Stock Exchange. The shares
of Hibernia Common Stock issuable to the holders of STABA 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. STABA shall have received a
letter from National Capital Corporation 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. Assertion of Conditions. A failure to satisfy
any of the requirements set forth in Section 12.5, 12.8 or 12.12
shall only constitute conditions to consummation of the Merger if
asserted by STABA and a failure to satisfy any of the requirements
set forth in Section 12.6 or 12.7 shall only constitute conditions
to consummation of the Merger if asserted by Hibernia. Neither
party will assert a failure to satisfy a requirement set forth in
Section 12.7 or 12.8 that is immaterial.
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 June 1, 1995, or (ii) any condition to Closing
cannot be satisfied by June 1, 1995, and will not be waived by the
party or parties entitled to waive it.
13.4. Failure to Obtain Regulatory Approval. By either
party hereto, at any time after the 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 STABA.
13.6. Dissenters. By Hibernia, if holders of more than
10 percent of the outstanding STABA Common Stock exercise statutory
rights of dissent and appraisal pursuant to Part XIII of the LBCL.
13.7. Material Adverse Change. By STABA, 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 STABA, if it shall not have
received a letter from [name] 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) February 1, 1995; (ii) the date that
falls 30 days after the date of the order of the Federal Reserve
Board approving the Merger pursuant to the Bank Holding Company
Act; (iii) the date that falls 30 days after the date of the order
of the Comptroller approving the merger of the Bank with and into
HNB pursuant to the Bank Merger Act; and (iv) the date that falls
5 days after the date on which the last meeting of shareholders
called to approve this Agreement is held; or such later date within
60 days of such date as may be agreed upon between the parties
hereto (the date and time of the Closing being referred to herein
as the "Closing Date"). Immediately upon consummation of the
Closing, or on such other later date as the parties hereto may
agree, the Merger Agreement shall be certified, executed,
acknowledged and delivered to the Secretary of State of the State
of Louisiana (the "Secretary") for filing pursuant to and in
accordance with the provisions of Section 12:112 of the LBCL. The
Merger shall become effective as of the date and time of issuance
by the Secretary of a certificate of merger relating to the Merger
(such date and time being referred to herein as the "Effective
Date").
15. Survival and Termination of Representations, Warranties
and Covenants.
15.1. Except as otherwise provided in this Section 15,
the representations, warranties and covenants contained in this
Agreement shall terminate as of the earlier of the Effective Date
or the termination of this Agreement. Upon termination of such
representations, warranties and covenants, such provisions shall be
of no further force or effect, and no party hereto shall have any
legal right to redress, whether for breach of contract or
otherwise, as a result of a breach of any such provision.
15.2. The provisions and agreements set forth in
Sections 3, 5, 9.13 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 STABA 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 a 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 STABA) 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 STABA shall change the number of shares
of Hibernia Common Stock into which shares of STABA 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:
Hibernia Corporation
313 Carondelet Street
New Orleans, Louisiana 70130
Attention: Corporate Law Division
and a copy of all notices or other communications directed to STABA
shall be sent to:
STABA Bancshares, Inc.
400 Mississippi Street
Donaldsonville, Louisiana 70346
Attention: Chief Executive Officer
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:
Gary L. Ryan
Assistant Secretary
STABA Bancshares, Inc.
Kenneth A. Bailey
Chief Executive Officer
Attest:
Secretary
APPENDIX B
FAIRNESS OPINION OF NATIONAL CAPITAL CORPORATION
February 14, 1995
Board of Directors
STABA Bankshares, Inc.
400 Mississippi Street
Donaldsonville, Louisiana 70346
Gentlemen:
You have requested our opinion as to the fairness, from a
financial point of view, to the shareholders of STABA Bancshares,
Inc. ("STABA"), of the proposed merger (the "Merger") of STABA
and Hibernia Corporation ("Hibernia") of New Orleans, Louisiana.
Pursuant to the terms of the Agreement and Plan of Merger (the
"Agreement") and as a result of the Merger, the shareholders of
STABA will receive, in exchange for their shares of STABA, shares
of Hibernia Class A , no par value ("Hibernia") Common Stock.
The total number of shares of Hibernia Common Stock to be issued
in connection with the Merger will be determined by dividing
$18.0 million by the average of the mean of the high and low
prices of one share of Hibernia Common Stock for the five
business days preceding the last trading day immediately prior to
the date of the closing of the Merger, as reported in the Wall
Street Journal.
National Capital Corporation ("NCC") has extensive experience in
investment analysis and the valuation of bank and bank holding
company securities in connection with acquisitions and mergers.
Neither NCC, nor any of its officers, directors, or employees has
an interest in the common or preferred stock of STABA. NCC has
performed no services for STABA at any time prior to the present,
although an affiliate of NCC, American Planning Corporation, has
provided advisory services to STABA and its subsidiary bank,
State Bank & Trust Company, related to profit planning and
strategic planning. The revenues derived from such services are
insignificant when compared to the affiliate's total gross
revenues. NCC will receive a fee for rendering this opinion.
In arriving at our opinion, we have: (1) met with officers of
STABA to discuss their businesses, reserves, earnings, properties
and prospects; (2) reviewed certain public financial information
and other data with respect to both Hibernia and STABA, including
certain financial forecasts, consolidated financial statements
for recent years and interim periods through September 30, 1994,
as well as other relevant financial and operating data furnished
by STABA to NCC; (3) reviewed the Agreement; (4) reviewed certain
historical market prices and trading volumes of Hibernia Common
Stock; (5) analyzed market volatility studies of Hibernia Common
Stock; (6) made inquiries regarding and discussed the Agreement
and other matters related thereto with STABA's counsel; and (7)
performed such other analyses and examinations as National
Capital Corporation deemed appropriate.
In connection with our review, we have not independently verified
any of the foregoing information, and have relied on its being
complete and accurate in all material respects. We have assumed
that the financial information and forecasts reviewed by us have
been prepared using the best available judgments of Hibernia and
STABA's management regarding the projected financial performance
of Hibernia and STABA. In addition, we have not made an
independent evaluation or appraisal of any of the assets of
Hibernia and STABA, nor have we examined any individual loan
files, or been furnished with any such appraisals or files.
STABA is hereby authorized to reproduce this opinion in full in
any disclosure document or proxy statement regarding the Merger
that is: (1) filed under the Securities Act of 1933, (2) filed
under any state blue sky law, or (3) distributed to STABA's
shareholders. Otherwise it is understood that this letter is for
the information of the Board of Directors only and is not to be
quoted or referred to, in whole or in part, in any document used
in connection with the offering or sale of securities, nor shall
this letter be used for any other purpose, without National
Capital Corporation's prior written consent.
In reaching our opinion we took into consideration the financial
benefits of the proposed transaction to all STABA's shareholders.
It is our opinion that the proposed transaction is fair to STABA
and all of STABA's shareholders, based on all factors that we
consider relevant.
Very Truly Yours,
/s/ NATIONAL CAPITAL CORPORATION
National Capital Corporation
APPENDIX C
FORM OF TAX OPINION OF ERNST & YOUNG LLP
February 3, 1995
Hibernia Corporation
313 Carondelet
P.O. Box 61540
New Orleans, Louisiana 70161
STABA Bancshares, Inc.
400 Mississippi Street
Donaldsonville, Louisiana 70346
Dear Sir or Madam:
This letter is in response to your request that we provide you with
our opinion concerning certain federal income tax consequences
which would arise from consummation of the proposed merger of STABA
Bancshares, Inc. ("STABA") with and into Hibernia Corporation
("Hibernia") (the "STABA Merger"), and the proposed merger of State
Bank and Trust Company ("Bank") with and into Hibernia National
Bank ("HNB") (the "Bank Merger"). (Hereinafter, the STABA Merger
and the Bank Merger are referred to collectively as the "Mergers.")
In rendering this opinion, we have relied upon the facts,
summarized below, as they have been presented to us orally by the
management of Hibernia and verified, in the Statements of Facts and
Representations dated February 3, 1995 provided by the respective
managements of STABA, Bank, Hibernia, and HNB; in the Agreement and
Plan of Merger made and entered into by and between STABA and
Hibernia as of November 4, 1995 (the "Agreement"); in the form of
the Agreement to Merge between Bank and HNB (the "Bank Plan of
Merger"); and in the Registration Statement (Form S-4), dated
February 3, 1995, filed with the Securities and Exchange Commission
as declared effective on February 3, 1995 and containing the Proxy
Statement-Prospectus of STABA and Hibernia dated February 3, 1995
("Prospectus"). (These are sometimes hereinafter referred to
collectively as "Documents.")
You have represented to us that the facts contained in the
Documents provide an accurate and complete description of the facts
and circumstances concerning the proposed Mergers. We have made no
independent investigation of the factual matters and circumstances
and, therefore, have relied upon the facts and representations in
the Documents for purposes of this letter. Any changes to the
facts or Documents may affect the conclusions stated herein.
We understand that reference to Ernst & Young LLP and the form of
our opinion is described in the Prospectus relating to the issuance
of Hibernia Common Stock in connection with the proposed Mergers
and the special meeting of the STABA and Bank shareholders with
respect thereto. We consent to such reference in the Prospectus
under the caption, "Conditions to Consummation of the Mergers." We
also understand that the form of this letter is included as an
appendix to the Form S-4 Registration Statement. We consent to
such inclusion.
STATEMENT OF FACTS
STABA is a corporation organized and existing under the laws of the
State of Louisiana, and is a bank holding company within the
meaning of the Bank Holding Company Act of 1956, as amended. The
presently authorized capital stock of STABA is 800,000 shares of
common stock (referred to hereinafter as "STABA Common Stock") of
which 118,938 shares were outstanding as of the date hereof.
Shares totaling 121,600 were issued and 2,662 were held in STABA's
treasury as of the date hereof. There are no options, warrants,
subordinated rights or other rights to purchase STABA Common Stock
outstanding as of the date hereof. STABA's assets include 100
percent of the outstanding voting shares of Bank , a Louisiana
banking corporation duly organized and existing under the laws of
the State of Louisiana.
Bank is a state banking corporation organized under the laws of the
State of Louisiana, engaged principally in the banking business.
Bank has 120,000 authorized shares of common stock of which 30,400
were issued and outstanding and held by STABA as of the date hereof
(referred to as "Bank Common Stock").
Hibernia is a bank holding company organized and existing under the
laws of the State of Louisiana with shares registered under the
Securities Act of 1933. The presently authorized capital stock of
Hibernia is 300,000,000 shares, consisting of 100,000,000 shares of
preferred stock, no par value, and 200,000,000 shares of Class A
voting common stock, no par value (the Class A voting common stock
being referred to hereinafter as "Hibernia Common Stock"). As of
September 30, 1994, no shares of Hibernia's preferred stock were
outstanding, 96,924,803 shares of Hibernia Common Stock were
outstanding, and 192,700 shares of Hibernia Common Stock were held
in Hibernia's treasury. There are no existing options, warrants,
calls or commitments of any kind obligating Hibernia to issue any
share of its capital stock or any other security of which it is or
will be the issuer, except that Hibernia has issued warrants to
purchase shares of Hibernia Common Stock pursuant to the terms of
the Senior Secured Restructuring Agreement dated as of May 27,
1992, of which warrants to purchase 660,845 shares of Hibernia
Common Stock were outstanding as of September 30, 1994.
Additionally, Hibernia has authorized or reserved 1,711,428 shares
of Hibernia Common Stock for issuance under its 1987 Stock Option
Plan, pursuant to which options covering 1,555,212 shares of
Hibernia Common Stock were outstanding as of September 30, 1994;
3,852,787 (as adjusted) shares of Hibernia Common Stock for
issuance under its 1992 Long-Term Incentive Plan, pursuant to which
options covering 2,539,646 shares of Hibernia Common Stock were
outstanding as of September 30, 1994; 1,000,000 shares of Hibernia
Common Stock for issuance under its 1993 Director Stock Option
Plan, pursuant to which options covering 155,000 shares of Hibernia
Common Stock are outstanding as of September 30, 1994; and 523,783
shares of Hibernia Common Stock are available for issuance pursuant
to Hibernia's Dividend Reinvestment and Stock Purchase Plan.
Pending mergers with Pioneer Bancshares Corporation, First State
Bank and Trust Company of Bogalusa, American Bank, Norco,
Louisiana, and Progressive Bancorporation, Inc. will result in the
issuance of approximately 16.0 million shares of Hibernia Common
Stock. Hibernia Common Stock is traded on the New York Stock
Exchange.
HNB is a nationally chartered commercial bank engaged principally
in the banking business. HNB is a wholly owned subsidiary of
Hibernia.
BUSINESS PURPOSE
The management of Hibernia has represented to us that Hibernia
desires to consummate the Mergers in order to improve its presence
in the Louisiana market. As discussed in the Prospectus under the
caption, "Background of and Reasons for the Merger," the STABA and
Bank Boards of Directors believe the customers, depositors, and
communities served by Bank will benefit from being part of a larger
banking entity as a result of the future growth, synergies and cost
savings expected to be realized from the Mergers.
PROPOSED TRANSACTIONS
In accordance with the above-stated business purpose, the following
transactions have been proposed:
1. After all necessary regulatory and shareholder approvals have
been granted, there will be simultaneous mergers (i.e., the
Mergers) of STABA with and into Hibernia in accordance with
the Louisiana Business Corporation Law ("LBCL"), and Bank
with and into HNB in accordance with the provisions of Bank
Merger Act, 12 U.S.C. Sections 1828 et. seq. and 12 U.S.C.
Section 215a ("Bank Merger Act"). Upon the completion of the
STABA Merger, Hibernia will cause the Bank Merger to occur.
2. In the STABA Merger, Hibernia will acquire all of the assets
and assume all of the liabilities of STABA in exchange for
Hibernia Common Stock. As a result of the STABA Merger, each
share of the issued and outstanding STABA Common Stock shall
be converted into and become the number of shares of Hibernia
Common Stock determined in accordance with the exchange rate.
The exchange rate shall be the number that is number obtained
by dividing the Deliverable Amount (defined below) by the
total number of outstanding shares of STABA Common Stock on
the closing date. The Deliverable Amount shall be the number
that equals 18,000,000 divided by the Average Market Price of
Hibernia Common Stock. The Average Market Price is defined as
the average mean of the high and low sales prices of one share
of Hibernia Common Stock for the five business days preceding
the last trading day immediately prior to the closing date.
Holders of shares of STABA Common Stock outstanding
immediately prior to the effective date of the STABA Merger
shall cease to be, and shall have no rights as, shareholders
of STABA after the STABA Merger.
3. In the Bank Merger, HNB will acquire all the assets and assume
all of the liabilities of Bank. As a result of the Bank
Merger, each share of the issued and outstanding Bank Common
Stock shall cease to be outstanding and will be canceled. No
additional shares of Hibernia Common Stock nor shares of HNB
Common Stock will be issued in the Bank Merger.
4. No fractional shares will be issued. Each holder of STABA
Common Stock who would otherwise have been entitled to receive
a fraction of a share of Hibernia Common Stock shall receive
in lieu thereof, cash (without interest) in an amount equal to
such fractional part of a share multiplied by the Average
Market Price of Hibernia Common Stock.
5. By following certain statutory procedures, shareholders of
STABA may exercise dissenter's rights entitling them to
receive in cash the value of their respective STABA Common
Stock in lieu of receiving Hibernia Common Stock in the STABA
Merger.
REPRESENTATIONS
For purposes of our evaluation, we have received from the
management of STABA, Bank, Hibernia, and HNB, Statements of Facts
and Representations, dated February 3, 1995, as set forth below.
References to the "Code" are to the Internal Revenue Code of 1986,
as amended.
The following representations have been made in connection with the
STABA Merger:
(a) The fair market value of the Hibernia Common Stock to be
received by each STABA Common Stock shareholder will be
approximately equal to the fair market value of the STABA
Common stock surrendered in the exchange.
(b) There is no plan or intention by the shareholders of
STABA who own five percent or more of the STABA Common
Stock and to the best knowledge of management of STABA,
there is no intention on the part of the remaining
shareholders of STABA, to sell, exchange, or otherwise
dispose of a number of shares of Hibernia Common Stock
received in the transaction that would reduce the STABA
shareholders' ownership of Hibernia Common Stock to a
number of shares having a value, as of the date of the
transaction, of less than 50 percent of the value of all
the formerly outstanding Common Stock of STABA as of the
same date. For purposes of this representation, any
shares of STABA Common Stock surrendered by dissenters,
or exchanged for cash in lieu of fractional shares of
Hibernia Common Stock, will be treated as outstanding
STABA Common Stock on the date of the transaction.
Moreover, shares of STABA Common Stock and shares of
Hibernia Common Stock held by former STABA shareholders
and otherwise sold, redeemed, or disposed of prior
November 4, 1994 or subsequent to the transaction will be
considered in making this representation.
(c) Hibernia has no plan or intention to reacquire any of its
Common Stock issued in the STABA Merger other than to
acquire a nominal amount of shares of Common Stock that
may be acquired in ordinary business transactions
(including, but not limited to, open market purchases in
brokers' transactions).
(d) Hibernia has no plan or intention to sell or otherwise
dispose of any of the assets of STABA acquired in the
transaction except for dispositions made in the ordinary
course of business.
(e) Any liabilities of STABA assumed by Hibernia and any
liabilities to which the transferred assets of STABA are
subject were incurred by STABA in the ordinary course of
its business.
(f) Following the transaction, Hibernia will continue,
substantially unchanged, the business of STABA operated
through STABA's subsidiary, Bank, which will be merged
with and into HNB.
(g) Except for expenses relating to the registration of the
Hibernia Common Stock and certain proxy printing and
mailing expenses to be paid solely by Hibernia, which are
directly related to the Mergers in accordance with the
guidelines established in Revenue Ruling 73-54, 1973-1
C.B. 187, Hibernia, STABA, and the shareholders of STABA
will pay their respective expenses, if any, incurred in
connection with the transactions.
(h) There is no intercorporate indebtedness existing between
STABA and its affiliate on the one hand and Hibernia and
its affiliates on the other hand which was issued,
acquired, or will be settled at a discount.
(i) No two parties to the transaction are investment
companies as defined in Section 368(a)(2)(F)(iii) and
(iv) of the Code.
(j) STABA is not under the jurisdiction of a court in a Title
11 or similar case within the meaning of Section
368(a)(3)(A) of the Code.
(k) The fair market value of the assets of STABA to be
transferred to Hibernia will equal or exceed the sum of
the liabilities assumed by Hibernia plus the amount of
liabilities, if any, to which the transferred assets are
subject.
(l) The payment of cash in lieu of fractional shares of
Hibernia Common Stock is solely for the purpose of
avoiding the expense and inconvenience to Hibernia of
issuing fractional shares and does not represent
separately bargained for consideration. The total cash
consideration that will be paid in the transaction to the
STABA shareholders instead of issuing fractional shares
of Hibernia will not exceed one percent of the total
consideration that will be issued in the transaction to
the STABA shareholders in exchange for their shares of
STABA Common Stock. The fractional share interests of
each STABA shareholder will be aggregated, and no STABA
shareholder will receive cash in an amount equal to or
greater than the value of one full share of Hibernia
Common Stock.
(m) None of the compensation received by any shareholder-
employees of STABA will be separate consideration for, or
allocable to, any of their shares of STABA Common Stock;
none of the shares of Hibernia Common Stock received by
any shareholder-employees will be separate consideration
for, or allocable to, any employment agreement; and the
compensation paid to any shareholder-employees will be
for services actually rendered and will be commensurate
with amounts paid to third parties bargaining at arm's-
length for similar services.
(n) The STABA Merger will qualify as a statutory merger under
the Louisiana Business Corporation Law ("LBCL").
(o) The shareholders of STABA (immediately before the
proposed transaction) receiving shares of Hibernia Common
Stock will not own (immediately after the proposed
transaction) more than fifty percent of the fair market
value of Hibernia Common Stock.
The following representations have been made in connection with the
Bank Merger:
(aa) No additional Hibernia Common Stock will be issued or
exchanged in the Bank Merger. No additional HNB Common
Stock will be issued or exchanged in the Bank Merger.
(bb) There is no plan or intention by the shareholder of Bank
to sell, exchange or otherwise dispose of a number of
shares of Hibernia Common Stock constructively received
in the transaction that would reduce the Bank
shareholder's ownership of Hibernia Common Stock to a
number of shares having a value, as of the date of the
transaction, of less than 50 percent of the value of all
of the formerly outstanding Common Stock of Bank as of
the same date. For purposes of this representation, any
shares of Bank Common Stock constructively exchanged for
cash or other property, surrendered by dissenters, or
exchanged for cash in lieu of fractional shares of HNB
Common Stock will be treated as outstanding Bank Common
Stock on the date of the transaction. Moreover, shares
of Bank Common Stock and shares of Hibernia Common Stock
held by Bank shareholders and otherwise sold, redeemed,
or disposed of prior to November 4, 1994 or subsequent to
the transaction will be considered in making this
representation.
(cc) HNB will acquire at least 90 percent of the fair market
value of the net assets and at least 70 percent of the
fair market value of the gross assets held by Bank
immediately prior to the Bank Merger. For purposes of
this representation, amounts paid by Bank to dissenters,
Bank assets used to pay its reorganization expenses, and
all redemptions and distributions (except for regular,
normal dividends) made by Bank immediately preceding the
transfer, will be included as assets of Bank held
immediately prior to the transaction.
(dd) Prior to the transaction, Hibernia will be in control of
HNB within the meaning of Section 368(c) of the Code
wherein "control" is defined to mean the ownership of
stock possessing at least 80 percent of the total
combined voting power of all classes of stock entitled to
vote and at least 80 percent of the total number of
shares of all other classes of the corporation.
(ee) Following the transaction, HNB will not issue additional
shares of its Common Stock that would result in Hibernia
losing control of HNB within the meaning of Section
368(c) of the Code.
(ff) Hibernia has no plan or intention to reacquire any of its
Common Stock constructively issued in the Bank Merger.
(gg) Hibernia has no plan or intention to liquidate HNB; to
merge HNB into another corporation; to sell or otherwise
dispose of the Common Stock of HNB; or to cause HNB to
sell or otherwise dispose of any of the assets of Bank
acquired in the transaction, except for dispositions made
in the ordinary course of business. As Hibernia makes
other acquisitions, it is likely that some or all of the
acquired banks will be merged with and into HNB. At this
time, the discussion provided under the caption "Parties
to the Merger" in the Prospectus provides a complete list
of all pending acquisitions that are covered by
definitive agreements. However, no Common Stock of HNB
will be issued as consideration in any of the pending
acquisitions.
(hh) The liabilities of Bank assumed by HNB and the
liabilities to which the transferred assets of Bank are
subject were incurred by Bank in the ordinary course of
its business.
(ii) Following the transaction, HNB will continue the historic
business of Bank or will use a significant portion of
Bank's historic business assets in its business.
(jj) Except for expenses relating to the registration of
Hibernia Common Stock and certain proxy printing and
mailing expenses to be paid solely by Hibernia, which are
directly related to the Mergers in accordance with the
guidelines established in Revenue Ruling 73-54, 1973-1
C.B. 187, Hibernia, HNB, Bank and the shareholders of
Bank will pay their respective expenses, if any, incurred
in connection with the transaction.
(kk) There is no intercorporate indebtedness existing between
Hibernia and Bank and their affiliates or between HNB and
Bank that was issued, acquired, or will be settled at a
discount.
(ll) No two parties to the transaction are investment
companies as defined in Section 368(a)(2)(F)(iii) and
(iv) of the Code.
(mm) Bank is not under the jurisdiction of a court in a Title
11 or similar case within the meaning of Section
368(a)(3)(A) of the Code.
(nn) The basis and fair market value of the assets of Bank
transferred to HNB will each equal or exceed the sum of
the liabilities assumed by HNB, plus amount of
liabilities, if any, to which the transferred assets are
subject.
(oo) None of the compensation received by any shareholder-
employees of Bank will be separate consideration for, or
allocable to, any of their shares of Bank Common Stock;
none of the shares of Hibernia Common Stock received by
any shareholder-employees will be separate consideration
for, or allocable to, any employment agreement; and the
compensation paid to any shareholder-employees will be
for services actually rendered and will be commensurate
with amounts paid to third parties bargaining at arm's-
length for similar services.
(pp) The merger of Bank into HNB will qualify as a statutory
merger under the Bank Merger Act.
TECHNICAL ANALYSIS
Section 368(a)(1)(A) of the Code provides that a reorganization (a
"Type A" reorganization) includes a statutory merger or
consolidation. Such a reorganization can only be achieved by
strict compliance with the applicable corporation laws of the
United States or a state or territory of the United States. A
statutory merger occurs wherein one party (the surviving
corporation) to the transaction absorbs the other party whose
corporate existence ceases. It has been represented by the
management of Hibernia that the merger of STABA with and into
Hibernia, wherein Hibernia Common Stock is to be exchanged for
STABA Common Stock, is to occur as a statutory merger under
applicable law.
Section 368(a)(2)(D) of the Code provides that the acquisition by
one corporation in exchange for stock of a corporation which is in
control of the acquiring corporation, of substantially all of the
properties of another corporation, shall not disqualify a
transaction under Section 368(a)(1)(A) if (i) no stock of the
acquiring corporation is used in the transaction and (ii) the
transaction would have otherwise qualified as a Type A
reorganization had the merger been into the controlling
corporation. It has been represented by the management of Hibernia
that the merger of Bank with and into HNB, wherein Hibernia Common
Stock is to be constructively exchanged for Bank Common Stock, is
to occur as a statutory merger under applicable law.
Revenue Procedure 77-37, 1977-2 C.B. 568 (Section 3.01) provides that, for
advance ruling purposes, the "substantially all" requirement of
Section 368(a)(2)(D) is satisfied if there is a transfer of assets
representing at least 90 percent of the fair market value of the
net assets and at least 70 percent of the fair market value of the
gross assets held by the transferor corporation immediately prior
to the transfer. Any payments to dissenters and any redemptions
and distributions (except for regular dividend distributions) made
by the corporation immediately preceding the transfer and which are
a part of the Agreement will be considered as assets held by the
corporation immediately prior to the transfer. Additionally, the
payment of expenses if any, by Bank, incurred in connection with
the Bank Merger is taken into consideration in applying the
"substantially all" test.
In the proposed Bank Merger, it has been represented by the
management's of Bank and HNB that HNB will acquire assets
representing at least 90 percent of the fair market value of the
net assets and 70 percent of the fair market value of the gross
assets of Bank and that, for this purpose, the fair market value of
the net and gross assets of Bank will be determined before payment
by Bank of any expenses incurred by it in connection with the Bank
Merger, before payment to any dissenters to the Bank Merger, and
before any redemptions and distributions (except for regular,
normal dividends) made by Bank immediately preceding the transfer.
Based upon the foregoing representations, the "substantially all"
requirement will be met in the Bank Merger.
Additional Requirements
Sections 1.368-1(b) and 1.368-2(g) of the Income Tax Regulations
(the "Regulations") provide that the following additional
requirements must be met for a transaction to qualify as a
reorganization within the meaning of Section 368 of the Code:
(i) "continuity of interest" must be present,
(ii) "continuity of business enterprise" must exist, and
(iii) the transaction must be undertaken for reasons
pertaining to the continuance of the business of a
corporation which is a party to the transaction.
Continuity of Interest
In general, the continuity of interest test requires the owners of
the reorganized entity to receive and retain a meaningful equity in
the surviving entity. See e.g., Pinellas Ice & Cold Storage Co. v.
Comm'r, 287 U.S. 462 (1933); Cortland Specialty Company v. Comm'r,
60 F.2d 937 (2d Cir. 1932), cert. denied, 288 U.S. 599 (1932);
Helvering v. Minnesota Tea Co., 296 U.S. 378 (1935).
Revenue Procedure 77-37, 1977-2 C.B. 568 (Section 3.02) provides
that, for advance ruling purposes, the continuity of interest
requirement is satisfied if there is a continuing interest through
stock ownership in the acquiring or transferee corporation (or a
corporation in "control" thereof within the meaning of Section
368(c) of the Code) on the part of the former shareholders of the
acquired or transferor corporation which is equal in value as of
the effective date of the reorganization, to at least 50 percent of
the value of all of the formerly outstanding stock of the acquired
or transferor corporation as of that date. Sales, redemptions, and
other dispositions of stock occurring prior or subsequent to the
exchange which are part of the plan of reorganization will be
considered in determining whether there is a 50 percent continuing
interest through stock ownership as of the effective date of the
reorganization.
Based upon our understanding of the facts presented to us orally
and as set forth in the Statements of Facts and Representations
dated February 3, 1995, the 50 percent continuity of interest test
of Revenue Procedure 77-37, supra, will be met in the STABA Merger
and the Bank Merger. It has been represented by the management of
STABA that the shareholders of STABA have no plan or intention to
sell, exchange or otherwise dispose of a number of Hibernia shares
to be received in the transaction that will reduce their Hibernia
Common Stock holdings to less than the requisite 50 percent
continuity of interest. Accordingly, in the STABA Merger there
will be a continuing interest through Common Stock ownership in
Hibernia on the part of the former shareholders of STABA.
In Revenue Ruling 68-526, 1968-2 C.B. 156, the Internal Revenue
Service (the "Service) held that the acquisition of the assets (and
assumption of liabilities) of a parent corporation and its 60
percent owned subsidiary constituted separate tax-free
reorganizations when the transactions occurred pursuant to one plan
of reorganization and for valid business reasons. In Revenue
Ruling 76-528, 1976-2 C.B. 103, the Service clarified that the
continuity of interest requirement was met in Revenue Ruling 68-526
with respect to the subsidiary acquisition even when the Parent had
no assets other than stock of a subsidiary because, in light of the
acquisition of the parent's assets, and its dissolution pursuant to
the plan of reorganization, the parent's shareholders, in effect,
"stepped into the parent's shoes" as the only qualified parties to
receive and continue the stock interest formerly held by the parent
corporation. Although no assurance can be given that the Service
will agree, the rationale of the above Revenue Rulings suggests
that the continuity of interest maintained by the STABA
shareholders in the STABA Merger is relevant in determining whether
the continuity of interest requirement is satisfied in the Bank
Merger. See also PLR 9109044 (December 4, 1990) where the Service,
after applying the step transaction doctrine, ruled that a sideways
merger of a Bank Holding Company and its wholly owned banking
subsidiary into an acquiring bank holding company and its banking
subsidiary respectively constituted reorganizations under Section
368(a)(1)(C) and Section 368(a)(2)(D).
In the past, the Service has frequently ruled on certain facts that
the simultaneous mergers of a parent and its wholly-owned
subsidiary into an acquiring parent corporation and its wholly-
owned subsidiary, respectively each qualified as a Section
368(a)(1)(A) reorganization (see e.g., PLR 9111025 (December 14,
1990), 9047015 (August 24, 1990) and 9003053 (October 26, 1989)).
In other rulings involving slightly different facts (i.e., minority
shareholders in the subsidiary), the Service held that the
subsidiary mergers were Section 368(a)(1)(A) reorganizations by
reason of Section 368(a)(2)(D) (see e.g., PLR 9109044 (December 4,
1990), 8943067 (August 2, 1989) and 8942090 (July 27, 1989)).
Although private letter rulings are not binding on the Service as
precedent, they are cited to illustrate a consistent rulings
position. In recent years, while the Service has declined to rule
on whether a transaction qualifies as a reorganization pursuant to
Section 368(a)(1)(A) of the Code (see section 3.01(26) of Rev.
Proc. 93-3, 1993-1 C.B. 370), it has consistently ruled that the
receipt by a target parent's shareholders of stock of an acquiring
corporation will not prevent a lower tier target's merger from
satisfying the continuity of interest requirement of Section 1.368-
1(b) of the Regulations. See, for example, PLR 9237031 (June 16,
1992) and PLR 9317027 (January 29, 1993).
Continuity of Business Enterprise
Section 1.368-1(b) of the Regulations also provides that a
continuity of business enterprise (as described in Section 1.368-
1(d) of the Regulations) is a requisite to a reorganization.
Section 1.368-1(d) of the Regulations provides that continuity of
business enterprise requires that the acquiring corporation either
continue the acquired corporation's historic business or use a
significant portion of the acquired corporation's historic assets
in a business. The proposed Bank Merger will meet the continuity
of business enterprise test of Section 1.368-1(d) because, based
upon the representation of the management of HNB, HNB will continue
the historic business of Bank or will use a significant portion of
Bank's historic assets in a business.
Revenue Ruling 85-197, 1985-2 C.B. 120, provides that for purposes
of the continuity of business enterprise requirement, the historic
business of a holding company is the business of its operating
subsidiary. Similarly, Revenue Ruling 85-198, 1985-2 C.B. 120,
held that the continuity of business enterprise requirement was met
upon the merger of two bank holding companies where the business of
a former subsidiary of the acquired holding company was continued
through a subsidiary of the acquiring corporation. Accordingly,
the continuity of business enterprise requirement is met with
regard to the STABA Merger because Hibernia through its wholly-
owned subsidiary HNB, will continue the banking business indirectly
conducted by STABA.
Business Purpose
Section 1.368-2(g) of the Regulations provides that a
reorganization must be undertaken for reasons germane to the
continuance of the business of a corporation which is a party to
the reorganization. As heretofore indicated in the Business
Purpose Section set forth above, there are substantial business
reasons for the Mergers. Accordingly, the Mergers each satisfy the
business purpose requirement as set forth in the Regulations.
Constructive Exchange of Shares
To avoid the expense and inconvenience of issuing Hibernia shares
to itself in the Bank Merger, and because STABA's shareholders will
have already received fair value for their shares, the shares of
Bank Common Stock obtained by Hibernia in the STABA Merger shall be
canceled. (See the preceding discussion regarding Rev. Rul 76-528)
In the Bank Merger, which occurs simultaneously, but is to be
described in the closing documents covering the Mergers as a step
following the STABA Merger, HNB technically would acquire the
assets of Bank by issuing shares of Hibernia Common Stock to the
Bank shareholder, Hibernia (as the result of the STABA Merger).
The Tax Court has consistently held that the physical transfer of
shares is not necessary if it would be a "meaningless gesture,"
particularly in situations where common ownership is present. See,
Fowler Hosiery Co., 36 T.C. 201 (1961), aff'd 301 F.2d 394 (7th
Cir. 1962) and William Holton George, 26 T.C. 396 (1956). In fact,
the Service has ruled that the absence of an actual physical
exchange of shares does not prevent a transaction from qualifying
as a tax-free reorganization if such an exchange would have been a
"meaningless gesture" or a "useless task." See Rev. Rul. 70-240,
1970-1 C.B. 81 and Rev. Rul. 75-383, 1975-2 C.B. 127. See also
Davant v. Commissioner, 366 F.2d 874 (5th Cir. 1966); James Armour,
Inc., 43 T.C. 295 (1964); American Manufacturing Co., 55 T.C. 204
(1970). In addition, the Service held in Revenue Ruling 78-47,
1978-1 C.B. 113, that a physical issuance of shares was unnecessary
in order to eliminate certain expenses associated with a
reorganization.
The Service has also consistently permitted constructive exchanges
in private letter rulings. See e.g., PLR 8750071 (September 17,
1987), 8722021 (February 25, 1987), 8620043 (February 14, 1986),
8403028 (October 17, 1983), and 8306010 (November 4, 1982).
Based on the above, the constructive exchange described herein does
not prevent the Bank Merger from qualifying as a tax-free
reorganization.
Other Statutory Provisions
Section 368(b) of the Code defines the term "a party to a
reorganization" to include a corporation resulting from a
reorganization, and both corporations, in the case of a
reorganization resulting from the acquisition by one corporation of
stock or properties of another.
Section 361(a) of the Code provides that no gain or loss shall be
recognized to a transferor corporation which is a party to a
reorganization on any exchange pursuant to the plan of
reorganization solely for stock or securities in another
corporation which is a party to the reorganization.
Section 1032 of the Code provides that no gain or loss shall be
recognized to a corporation on the receipt of money or other
property in exchange for stock of such corporation. Revenue Ruling
57-278, 1957-1 C.B. 124, provides that a subsidiary will not
recognize gain upon the exchange of its parent's stock for property
in connection with a tax-free reorganization.
Section 354(a)(1) of the Code provides that no gain or loss shall
be recognized if stock or securities in a corporation which is a
party to a reorganization are, in pursuance of the plan of
reorganization, exchanged solely for stock or securities in such
corporation or in another corporation which is a party to the
reorganization.
Section 362(b) of the Code generally provides that if property is
acquired by a corporation in connection with the reorganization,
then the basis shall be the same as it would be in the hands of the
transferor, increased by the amount of gain recognized to the
transferor on such transfer.
Section 1223(2) of the Code provides that in determining a
taxpayer's holding period for property, there shall be included the
period for which such property was held by another person, if such
property has, for the purpose of determining gain or loss from a
sale or exchange, the same basis in whole or in part in such
taxpayer's hands as it would have had in the hands of such other
person.
Section 381 of the Code applies to certain transactions, including
those transactions to which Section 361 of the Code applies, where
there is a transfer in connection with a reorganization described
in Section 368(a)(1)(A) or in Section 368(a)(1)(A) and Section
368(a)(2)(D) of the Code.
FEDERAL INCOME TAX CONSEQUENCES
Based solely upon the Statements of Facts and Representations, the
Agreement, and the Bank Plan of Merger, it is our opinion that the
following federal income tax consequences will result:
In the merger of STABA with and into Hibernia:
(1) Provided the proposed merger of STABA with and into Hibernia
qualifies as a statutory merger under Louisiana law, the STABA
Merger will be a reorganization within the meaning of Section
368(a)(1)(A) of the Code. STABA and Hibernia will each be a party
to a reorganization within the meaning of Section 368(b) of the
Code.
(2) No gain or loss will be recognized by STABA upon the transfer
of its assets to Hibernia in exchange solely for Hibernia Common
Stock, cash for dissenters, if any, and the assumption by Hibernia
of the liabilities of STABA, since any cash for dissenters will be
distributed to the shareholders (Sections 361(b) and 357(a) of the
Code).
(3) No gain or loss will be recognized to Hibernia on receipt of
the STABA assets in exchange for Hibernia Common Stock (Section
1032(a) of the Code).
(4) The basis of the assets of STABA in the hands of Hibernia
will, in each case, be the same as the basis of those assets in the
hands of STABA immediately prior to the transaction (Section 362(b)
of the Code).
(5) The holding period of the assets of STABA in the hands of
Hibernia will, in each case, include the period for which such
assets were held by STABA (Section 1223(2) of the Code).
(6) No gain or loss will be recognized by the shareholders of
STABA upon the receipt of solely Hibernia Common Stock in exchange
for their shares of STABA Common Stock (Section 354(a)(1) of the
Code).
(7) The basis of Hibernia Common Stock to be received by the
shareholders of STABA will be, in each instance, the same as the
basis of the Common Stock of STABA surrendered in exchange therefor
(Section 358(a)(1) of the Code).
(8) The holding period of the Hibernia Common Stock to be received
by the shareholders of STABA in the transaction will include in
each instance, the period during which the STABA Common Stock
surrendered in exchange therefor is held as a capital asset on the
date of the surrender (Section 1223(l) of the Code).
(9) Hibernia will succeed to and take into account those tax
attributes of STABA described in Section 381(c) of the Code.
(Section 381(a) of the Code and Section 1.381(a)-1 of the
Regulations) These items will be taken into account by Hibernia
subject to the conditions and limitations specified in Sections
381, 382, 383, and 384 of the Code and the Regulations thereunder.
(10) As provided by Section 381(c)(2) of the Code and Section
1.381(c)(2)-1 of the Regulations, Hibernia will succeed to and take
into account the earnings and profits, or deficit in earnings and
profits, of STABA as of the date of transfer. Any deficit in the
earnings and profits of STABA will be used only to offset the
earnings and profits accumulated after the date of transfer.
(11) Cash received by a dissenting shareholder of STABA in exchange
for his or her STABA Common Stock will be treated as having been
received by such shareholder as a distribution in redemption of his
or her stock, subject to the provisions and limitations of Section
302 of the Code. If, as a result of such distribution, a
shareholder owns no stock either directly or through the
application of Section 318(a) of the Code, the redemption will be
a complete termination of interest within the meaning of Section
302(b)(3) of the Code and such cash will be treated as a
distribution in full payment in exchange for his or her stock, as
provided by Section 302(a) of the Code.
(12) The payment of cash in lieu of fractional share interests of
Hibernia Common Stock will be treated as if the fractional shares
were distributed as part of the exchange and then were redeemed by
Hibernia. These cash payments will be treated as distributions in
full payment in exchange for the stock redeemed, as provided in
Section 302(a) of the Code. (Rev. Rul. 66-365, 1966-2 C.B. 116 and
Rev. Proc. 77-41, 1977-2 C.B. 574)
In the merger of Bank with and into HNB:
(13) Provided the proposed merger of Bank with and into HNB
qualifies as statutory merger under the Bank Merger Act, the
acquisition by HNB of substantially all of the assets of Bank
solely in constructive exchange for Hibernia Common Stock, cash for
dissenters, if any, and the assumption by HNB of the liabilities of
Bank, will qualify as a reorganization under the provisions of
Sections 368(a)(1)(A) and 368(a)(2)(D) of the Code. Bank, Hibernia
and HNB will each be a party to a reorganization within the meaning
of Section 368(b) of the Code.
(14) No gain or loss will be recognized to Bank upon the transfer
of substantially all of its assets to HNB in constructive exchange
for Hibernia Common Stock, cash for dissenters, if any, and the
assumption of Bank's liabilities by HNB, since any cash for
dissenters will be distributed to the Bank shareholders (Sections
361 and 357(a) of the Code).
(15) No gain or loss will be recognized by either Hibernia or HNB
upon the acquisition by HNB of substantially all of the assets of
Bank in constructive exchange for Hibernia Common Stock, cash for
dissenters, if any, and the assumption of Bank's liabilities
(Section 1032(a) of the Code). (Rev. Rul. 57-278, 1957-1 C.B.
124.)
(16) The basis of the assets of Bank acquired by HNB will be the
same in the hands of HNB as the basis of such assets in the hands
of Bank immediately prior to the exchange (Section 362(b) of the
Code).
(17) The basis of the HNB Common Stock in the hands of Hibernia
will be increased by an amount equal to the basis of the Bank
assets in the hands of HNB and decreased by the sum of the amount
of the liabilities of Bank assumed by HNB and the amount of
liabilities to which the assets of Bank are subject (Section 1.358-
6 of Proposed Regulations).
(18) The holding period of the assets of Bank received by HNB will,
in each instance, include the period for which such assets were
held by Bank (Section 1223(2) of the Code).
(19) As provided by Section 381(c) of the Code and Section
1.381(c)(2)-1 of the Regulations, HNB will succeed to and take into
account the earnings and profits, or deficit in earnings and
profits, of Bank as of the date of transfer. Any deficit in the
earnings and profits of Bank or HNB will be used only to offset the
earnings and profits accumulated after the date of transfer.
(20) The shareholder of HNB will recognize no gain or loss upon the
constructive exchange of Bank Common Stock solely for Hibernia
Common Stock. (Section 354(a)(1) of the Code.)
(21) Bank will recognize no gain or loss on the transfer of its
assets to HNB in constructive exchange for Hibernia Common Stock
and the assumption by HNB of the liabilities of Bank, as described
above. (Sections 361(a) and 357(a) of the Code.)
(22) STABA and Bank will close their taxable years as of the date
of the distribution or transfer. HNB will not close its taxable
year merely because of the Bank Merger. (Section 381(b) of the
Code.)
(23) Pursuant to Section 381(a) of the Code and Section 1.381(a)-1
of the Regulations, HNB will succeed to and take into account the
items of Bank described in Section 381(c) of the Code. These
items will be taken into account by HNB subject to the provisions
and limitations specified in Sections 381, 382, 383 and 384 of the
Code and Regulations promulgated thereunder.
STATE INCOME TAX CONSEQUENCES
(1) The Louisiana income tax treatment to the shareholders of
STABA will be substantially the same as the federal income tax
treatment to the shareholders of STABA.
SCOPE OF OPINION
The scope of this opinion is expressly limited to the federal
income tax issues specifically addressed in (1) through (23) in the
section entitled "Federal Income Tax Consequences" above and (1) in
the section entitled "State Income Tax Consequences" above.
Specifically, our opinion has not been requested and none is
expressed with regard to the federal, foreign, state or local
income tax consequences for the shareholders of Hibernia and HNB.
We have made no determination nor expressed any opinion as to any
limitations, including those which may be imposed under Section
382, on the availability of net operating loss carryovers (or
built-in gains or losses), if any, after the Mergers, the
application (if any) of the alternative minimum tax to this
transaction, nor the application of any consolidated return or
employee benefit issues which may arise as a result of the Mergers.
Further, we have made no determination as whether STABA dividend
distributions have been sufficient to eliminate any undistributed
personal holding company tax liability, if applicable. We have
made no determination nor expressed any opinion as to the fair
market value of any of the assets being transferred in the Mergers
nor the common shares being exchanged in the Mergers. Furthermore,
our opinion has not been requested and none is expressed with
respect to any foreign, state or local tax consequences (other than
those enumerated in (1) above of State Income Tax Consequences) to
STABA, Bank, Hibernia, and HNB.
Our opinion, as stated above, is based upon the analysis of the
Code, the Regulations thereunder, current case law, and published
rulings. The foregoing are subject to change, and such change may
be retroactively effective. If so, our views, as set forth above,
may be affected and may not be relied upon. Further, any variation
or differences in the facts or representations recited herein, for
any reason, might affect our conclusions, perhaps in an adverse
manner, and make them inapplicable. In addition, we have
undertaken no obligation to update this opinion for changes in
facts or law occurring subsequent to the date hereof.
This letter represents our views as to the interpretation of
existing law and, accordingly, no assurance can be given that the
Service or the courts will agree with the above analysis.
Very truly yours,
Ernst & Young LLP
APPENDIX D
Excerpts From Section 131 of the
Louisiana Business Corporation Law
C. Except as provided in the last sentence of this
subsection, any shareholder electing to exercise such right of
dissent shall file with the corporation, prior to or at the meeting
of shareholders at which such proposed corporate action is
submitted to a vote, a written objection to such proposed corporate
action, and shall vote his shares against such action. If such
proposed corporate action be taken by the required vote, but by
less than eighty per cent of the total voting power, and the merger
consolidation or sale, lease or exchange of assets authorized
thereby be effected, the corporation shall promptly thereafter give
written notice thereof, by registered mail, to each shareholder who
filed such written objection to, and voted his shares against, such
action, at such shareholder's last address on the corporation's
records. Each such shareholder may, within twenty days after the
mailing of such notice to him, but not thereafter, file with the
corporation a demand in writing for the fair cash value of his
shares as of the day before such vote was taken; provided that he
state in such demand the value demanded, and a post office address
to which the reply of the corporation may be sent, and at the same
time deposit in escrow in a chartered bank or trust company located
in the parish of the registered office of the corporation, the
certificates representing his shares, duly endorsed and transferred
to the corporation upon the sole condition that said certificates
shall be delivered to the corporation upon payment of the value of
the shares determined in accordance with the provisions of this
section. With his demand the shareholder shall deliver to the
corporation, the written acknowledgment of such bank or trust
company that it so holds his certificates of stock. Unless the
objection, demand and acknowledgment aforesaid be made and
delivered by the shareholder within the period above limited, he
shall conclusively be presumed to have acquiesced in the corporate
action proposed or taken.
D. If the corporation does not agree to the value so stated
and demanded, or does not agree that a payment is due, it shall,
within twenty days after receipt of such demand and acknowledgment,
notify in writing the shareholder, at the designated post office
address, of its disagreement, and shall state in such notice the
value it will agree to pay if any payment should be held to be due;
otherwise it shall be liable for, and shall pay to the dissatisfied
shareholder, the value demanded by him for his shares.
E. In case of disagreement as to such fair cash value, or as
to whether any payment is due, after compliance by the parties with
the provisions of subsections C and D of this section, the
dissatisfied shareholder, within sixty days after receipt of notice
in writing of the corporation's disagreement, but not thereafter,
may file suit against the corporation, or the merged or
consolidated corporation, as the case may be, in the district court
of the parish in which the corporation or the merged or
consolidated corporation, as the case may be, has its registered
office, praying the court to fix and decree the fair cash value of
the dissatisfied shareholder's shares as of the day before such
corporate action complained of was taken, and the court shall, on
such evidence as may be adduced in relation thereto, determine
summarily whether any payment is due, and, if so, such cash value,
and render judgment accordingly. Any shareholder entitled to file
such suit may, within such sixty-day period but not thereafter,
intervene as a plaintiff in such suit filed by another shareholder,
and recover therein judgment against the corporation for the fair
cash value of his shares. No order or decree shall be made by the
court staying the proposed corporate action, and any such corporate
action may be carried to completion notwithstanding any such suit.
Failure of the shareholder to bring suit, or to intervene in such
a suit, within sixty days after receipt of notice of disagreement
by the corporation shall conclusively bind the shareholder (1) by
the corporation's statement that no payment is due, or (2) if the
corporation does not content that no payment is due, to accept the
value of his shares as fixed by the corporation in its notice of
disagreement.
F. When the fair value of the shares has been agreed upon
between the shareholder and the corporation, or when the
corporation has become liable for the value demanded by the
shareholder because of failure to give notice of disagreement and
of the value it will pay, or when the shareholder has become bound
to accept the value the corporation agrees is due because of his
failure to bring suit within sixty days after receipt of notice of
the corporation's disagreement, the action of the shareholder to
recover such value must be brought within five years from the date
the value was agreed upon, or the liability of the corporation
became fixed.
G. If the corporation or the merged or consolidated
corporation, as the case may be, shall, in its notice of
disagreement, have offered to pay to the dissatisfied shareholder
on demand an amount in cash deemed by it to be the fair cash value
of his shares, and if, on the institution of a suit by the
dissatisfied shareholder claiming an amount in excess of the amount
so offered, the corporation or the merged or consolidated
corporation, as the case may be, shall deposit in the registry of
the court, there to remain until the final determination of the
cause, the amount so offered, then, if the amount finally awarded
such shareholder, exclusive of interest and costs, be more than the
amount offered and deposited as aforesaid, the costs of the
proceeding shall be taxed against the corporation, or the merged or
consolidated corporation, as the case may be; otherwise the costs
of the proceeding shall be taxed against such shareholder.
H. Upon filing a demand for the value of his shares, the
shareholder shall cease to have any of the rights of a shareholder
except the rights accorded by this section. Such a demand may be
withdrawn by the shareholder at any time before the corporation
gives notice of disagreement, as provided in subsection D of this
section. After such notice of disagreement is given, withdrawal of
a notice of election shall require the written consent of the
corporation. If a notice of election is withdrawn, or the proposed
corporate action is abandoned or rescinded, or a court shall
determine that the shareholder is not entitled to receive payment
for his shares, or the shareholder shall otherwise lost his
dissenter's rights, he shall not have the right to receive payment
for his shares, his share certificates shall be returned to him
(and, on his request, new certificates shall be issued to him in
exchange for the old ones endorsed to the corporation), and he
shall be reinstated to all his rights as a shareholder as of the
filing of his demand for value, including any intervening
preemptive rights, and the right to payment of any intervening
dividend or other distribution, or, if any such rights have expired
or any such dividend or distribution other than in cash has been
completed, in lieu thereof, at the election of the corporation, the
fair value thereof in cash as determined by the board as of the
time of such expiration or completion, but without prejudice
otherwise to any corporate proceedings that may have been taken in
the interim.
PART II. INFORMATION NOT REQUIRED IN PROSPECTUS
Item 20. Indemnification of Directors and Officers.
The Louisiana Business Corporation Law ("LBCL") contains two
provisions that directly affect the liability of officers and
directors of Louisiana corporations to the corporations and
shareholders whom they serve. Section 83 permits Louisiana
corporations to indemnify officers and directors, as well as
certain other individuals who act on behalf of such corporations.
Sections 91 and 92 set forth the liability of officers and
directors of Louisiana corporations.
Section 91 of the LBCL provides that officers and directors of
Louisiana corporations are fiduciaries with respect to the
corporation and its shareholders and requires that they discharge
the duties of their positions as such in good faith and with the
diligence, care, judgment and skill which ordinarily prudent men
would exercise under similar circumstances in like positions.
Section 91 specifically provides that it is not intended to
derogate from any indemnification permitted under Section 83,
discussed below.
Section 92 of the LBCL limits the liability of officers and
directors with respect to certain matters, as well as imposes
personal liability for certain actions, such as the knowing
issuance of shares in violation of the LBCL. Paragraph E of
Section 92 permits a director, in the performance of his duties, to
be fully protected from liability in relying in good faith on the
records of the corporation and upon such information, opinions,
reports or statements presented to the corporation, the board of
directors, or any committee of the board by any of the
corporation's officers or employees, or by any committee of the
board of directors, or by any counsel, appraiser, engineer or
independent or certified public accountant selected with reasonable
care by the board of directors or any committee thereof or any
officer having the authority to make such a selection or by any
other person as to matters the directors reasonably believe are
within such other person's professional or expert competence and
which person is selected with reasonable care by the board of
directors or any committee thereof or any officer having the
authority to make such selection.
Section 83 of the LBCL permits a Louisiana corporation to
indemnify any person who is or was a party or is threatened to be
made a party to any action, suit or proceeding by reason of the
fact that he or she was a director, officer, employee or agent of
the corporation, or was serving at the request of the corporation
in one of those capacities for another business. Such persons may
be indemnified against expenses (including attorneys' fees),
judgments, fines and amounts paid in settlement actually and
reasonably incurred by such persons in connection with any such
action as long as the indemnified party acted in good faith and in
a manner he or she reasonably believed to be in, or not opposed to,
the best interests of the corporation. With respect to criminal
actions or proceedings, the indemnified person must not only have
acted in good faith and in a manner believed to be in or not
opposed to the best interest of the corporation; he or she must
also not have had any reasonable cause to believe that his or her
conduct was unlawful.
The LBCL treats suits by or in the right of the corporation,
or derivative suits, differently from other legal actions.
Indemnification is not permitted in a derivative action for any
expenses if the individual seeking indemnification is adjudged
liable for negligence or misconduct in the performance of his or
her duty to the corporation unless specifically ordered by the
court. Otherwise, officers and directors may be indemnified in
derivative actions only with respect to expenses (including
attorneys' fees) actually and reasonably incurred in connection
with the defense or settlement of the action.
Indemnification of officers and directors may only be made by
the corporation if the corporation has specifically authorized
indemnification after determining that the applicable standard of
conduct has been met. This determination may be made (i) by the
board of directors by a majority vote of a quorum consisting of
directors who were not parties to such action, suit or proceeding,
or (ii) if such a quorum is not obtainable or a quorum of
disinterested directors so directs, by independent legal counsel,
or (iii) by the shareholders.
Indemnification of officers and directors against reasonable
expenses is mandatory under Section 83 of the LBCL to the extent
the officer or director is successful on the merits or in the
defense of any action or suit against him giving rise to a claim of
indemnification.
Louisiana corporations are permitted to advance the costs of
defense to officers and directors with respect to claims for which
they may be indemnified under Section 83 of the LBCL. In order to
advance such costs, however, such procedure must be approved by the
board of directors by a majority of a quorum consisting of
disinterested directors. In addition, a corporation may only
advance defense costs if it has received an undertaking from the
officer or director to repay the amounts advanced unless it is
ultimately determined that he or she is entitled to be indemnified
as otherwise authorized by Section 83.
Louisiana corporations are also specifically permitted to
procure insurance on behalf of officers and directors and former
officers and directors for actions taken in their capacities as
such. Insurance coverage may be broader than the limits of
indemnification under Section 83. Also, the indemnification
provided for in Section 83 is not exclusive of any other rights to
indemnification, whether arising from contracts or otherwise.
The Company has adopted an indemnification provision to its
articles of incorporation that provides for indemnification of
officers and directors under the circumstances permitted by
Louisiana law. The Company's indemnification provision requires
indemnification, except as prohibited by law, of officers and
directors of the Company or any of its wholly-owned subsidiaries
against expenses, judgments, fines and amounts paid in settlement
actually and reasonably incurred in connection with any action,
suit or proceeding, whether civil or criminal, administrative or
investigative (including any action by or in the right of the
Company) by reason of the fact that the person served as an officer
or director of the Company or one of its subsidiaries. Officers
and directors may only be indemnified against expenses in cases
brought by the officer or director against the Company if the
action is a claim for indemnification, the officer or director
prevails in the action, or indemnification is included in any
settlement or is awarded by the court. The indemnification
provision further requires the Company to advance defense costs to
officers and directors in such suits and proceedings upon receipt
of an undertaking to repay such expenses unless it is ultimately
determined that the officer or director is entitled to
indemnification as authorized by the Article.
The Company's Articles of Incorporation further provide that
no director or officer of the Company shall be personally liable to
the Company or its shareholder for monetary damages for breach of
fiduciary duty as an officer or director. This provision is
limited to those circumstances in which such a limitation of
liability is permitted under applicable law and would not be
operative in any circumstances in which the law prohibits such an
limitation.
The Articles of Association of the Bank include
indemnification and limitation of liability provisions identical to
those adopted by the Company and described above.
Item 21. Exhibits and Financial Statement Schedules.
EXHIBIT DESCRIPTION
2 Agreement and Plan of Merger (included as
Appendix A to the Proxy Statement-Prospectus)
3.1 Exhibit 4.1 to the Registration Statement on
Form S-3 filed with the Commission by the
Registrant (Registration No. 33-23591) is
hereby incorporated by reference (Articles of
Incorporation of the Registrant, as amended to
date)
3.2 Exhibit 4.2 to the Registration Statement on
Form S-8 filed with the Commission by the
Registrant (Post-Effective Amendment No. 2 to
Registration No. 2-96194) is hereby
incorporated by reference (By-Laws of the
Registrant, as amended to date)
5 Opinion of Patricia C. Meringer, Esq. re:
legality of shares
8 Opinion of Ernst & Young, certified public
accountants, regarding certain tax matters
(included as Appendix D to the Proxy
Statement-Prospectus)
10.13 Exhibit 10.13 to the Annual Report on Form 10-
K for the fiscal year ended December 31, 1988,
filed with the Commission by the Registrant
(Commission File No. 0-7220) is hereby
incorporated by reference (Deferred
Compensation Plan for Outside Directors of
Hibernia Corporation and its Subsidiaries, as
amended to date)
10.14 Exhibit 10.14 to the Annual Report on Form 10-
K for the fiscal year ended December 31, 1990,
filed with the Commission by the Registrant
(Commission File No. 0-7220) is hereby
incorporated by reference (Hibernia
Corporation Executive Life Insurance Plan)
10.16 Exhibit 4.7 to the Registration Statement on
Form S-8 filed with the Commission by the
Registrant (Registration No. 33-26871) is
hereby incorporated by reference (Hibernia
Corporation 1987 Stock Option Plan, as amended
to date)
10.28 Exhibits M and N to the Company's definitive
proxy statement dated August 17, 1992 relating
to its 1992 Annual Meeting of Shareholders
filed with the Commission by the Registrant is
hereby incorporated by reference (Warrant
Agreement dated as of May 27, 1992 among the
Registrant, The Chase Manhattan
Bank (National Association) and certain other
lenders, including the Form of Warrant
attached thereto)
10.29 Exhibit L to the Registrant's definitive proxy
statement dated August 17, 1992 relating to
its 1992 Annual Meeting of Shareholders filed
with the Commission by the Registrant is
hereby incorporated by reference (Registration
Rights Agreement dated as of May 27, 1992
among the Registrant, The Chase Manhattan Bank
(National Association) and certain other
lenders, as amended to date)
10.30 Exhibit 10.30 to a Current Report on Form 8-K
dated July 17, 1992 filed by the Registrant
with the Commission is hereby incorporated by
reference (Stock Purchase Agreement dated as
of July 17, 1992 between the Registrant,
Hibernia National Bank in Texas and Comerica
Incorporated)
10.31 Exhibit 10.31 to a Current Report on Form 8-K
dated September 15, 1992 filed by the
Registrant with the Commission is hereby
incorporated by reference (Amendment to Stock
Purchase Agreement dated September 10, 1992
between Registrant and Comerica Incorporated)
10.34 Exhibit C to the Registrant's definitive proxy
statement dated August 17, 1992 relating to
its 1992 Annual Meeting of Shareholders filed
by the Registrant with the Commission is
hereby incorporated by reference (Long-Term
Incentive Plan of Hibernia Corporation)
10.35 Exhibit A to the Registrant's definitive proxy
statement dated March 23, 1993 relating to its
1993 Annual Meeting of Shareholders filed by
the Registrant with the Commission is hereby
incorporated by reference (1993 Director Stock
Option Plan of Hibernia Corporation)
10.36 Exhibit 10.36 to the Registrant's Annual
Report on Form 10-K for the fiscal year ended
December 31, 1993 filed with the Commission
(Commission file no. 0-7220) is hereby
incorporated by reference (Employment
agreement between Stephen A. Hansel and
Hibernia Corporation)
10.37 Form of employment agreement between E.R. Campbell, Jr.
and Hibernia National Bank
10.39 Form of employment agreement between Kenneth A. Bailey
and Hibernia National Bank
13 Exhibit 13 to the Registrant's Annual Report
on Form 10-K for the fiscal year ended
December 31, 1993 filed with the Commission
(Commission file No. 0-7220) is hereby
incorporated by reference (1993 Annual Report
to security holders of the Registrant).
22 Exhibit 22 to the Annual Report on Form 10-K
of the Registrant for the fiscal year ended
December 31, 1989 filed with the Commission
(Commission file no. 0-7220) is hereby
incorporated by reference (Subsidiaries of the
Registrant)
23(a) Consent of Patricia C. Meringer, Esq.
(included with Exhibit 5)
23(c) Consent of Ernst & Young
Consent of Postlewaite & Netterville
Consent of National Capital Corporation
24 Powers of Attorney
Item 22. Undertakings.
The undersigned registrant hereby undertakes:
(i) that, for purposes of determining any liability under the
Securities Act of 1933, each filing of the registrant's annual
report pursuant to section 13(a) or section 15(d) of the Securities
Exchange Act of 1934 (and, where applicable, each filing of an
employee benefit plan's annual report pursuant to section 15(d) of
the Securities Exchange Act of 1934) that is incorporated by
reference in the registration statement shall be deemed to be a new
registration statement relating to the securities offered therein,
and the offering of such securities at that time shall be deemed to
be the initial bona fide offering thereof;
(ii) to deliver or cause to be delivered with the prospectus,
to each person to whom the prospectus is sent or given, the latest
annual report to security holders that is incorporated by reference
in the prospectus and furnished pursuant to and meeting the
requirements of Rule 14a-3 or Rule 14c-3 under the Securities
Exchange Act of 1934; and, where interim financial information
required to be presented by Article 3 of Regulation S-X are not set
forth in the prospectus, to deliver, or cause to be delivered to
each person to whom the prospectus is sent or given, the latest
quarterly report that is specifically incorporated by reference in
the prospectus to provide such interim financial information;
(iii) that prior to any public reoffering of the securities
registered hereunder through use of a prospectus which is a part of
this registration statement, by any person or party who is deemed
to be an underwriter within the meaning of Rule 145(c), the issuer
undertakes that such reoffering prospectus will contain the
information called for by the applicable registration form with
respect to reofferings by persons who may be deemed underwriters,
in addition to information called for by the other Items of the
applicable form;
(iv) that every prospectus (a) that is filed pursuant to the
preceding paragraph, or (b) that purports to meet the requirements
of section 10(a)(3) of the Act and is used in connection with an
offering of securities subject to Rule 415, will be filed as a part
of an amendment to the registration statement and will not be used
until such amendment is effective and that, for purposes of
determining any liability under the Securities Act of 1933, each
such post-effective amendment shall be deemed to be a new
registration statement relating to the securities offered therein,
and the offering of such securities at that time shall be deemed to
be the initial bona fide offering thereof.
(v) The undersigned registrant hereby undertakes to respond
to requests for information that is incorporated by reference into
the prospectus pursuant to Items 4, 10(b), 11 or 13 of Form S-4
within one business day of receipt of such request and to send the
incorporated documents by first class mail or other equally prompt
means. This includes information contained in documents filed
subsequent to the effective date of the registration statement
through the date of responding to the request.
(vi) The undersigned registrant hereby undertakes to supply
by means of a post-effective amendment all information concerning
a transaction, and the company being acquired involved therein,
that was not the subject of and included in the registration
statement when it became effective.
SIGNATURES
Pursuant to the requirements of the Securities Act of 1933,
the Registrant hereby certifies that it has reasonable grounds to
believe that it meets all of the requirements for filing on Form S-
4 and has duly caused this Registration Statement to be signed on
its behalf by the undersigned, thereunto duly authorized, in the
City of New Orleans, State of Louisiana, on February 17, 1995.
HIBERNIA CORPORATION
By: S/RON E. SAMFORD, JR.
Ron E. Samford, Jr.
Controller and Executive
Vice President
Pursuant to the requirements of the Securities Act of 1933,
the Registration Statement has been signed by the following persons
in the capacities indicated on February 17, 1995.
Signatures Title
*
_____________________________ Chairman of the Board
Robert H. Boh
*
_____________________________ Chief Executive Officer
Stephen A. Hansel and Director
*
_____________________________ Chief Financial Officer
Robert W. Close
*
_____________________________ Chief Accounting Officer
Ron E. Samford, Jr.
*
_____________________________ Director
W. James Amoss, Jr.
<PAGE>
*
_____________________________ Director
J. Terrell Brown
*
_____________________________ Director
J. Herbert Boydstun
* Director
_____________________________
E. R. Campbell, Jr.
*
_____________________________ Director
Brooke H. Duncan
*
_____________________________ Director
Richard W. Freeman
*
_____________________________ Director
Robert L. Goodwin
*
_____________________________ Director
Dick H. Hearin
*
_____________________________ Director
Robert T. Holleman
*
_____________________________ Director
Hugh J. Kelly
*
_____________________________ Director
John P. Laborde
*
_____________________________ Director
Sidney W. Lassen
*
_____________________________ Director
Donald J. Nalty
*
_____________________________ Director
Robert T. Ratcliff
*
_____________________________ Director
H. Duke Shackelford
*
_____________________________ Director
James H. Stone
*
_____________________________ Director
Virgnia E. Weinmann
*
_____________________________ Director
E. L. Williamson
*
_____________________________ Director
Robert E. Zetzmann
*By: S/PATRICIA C. MERINGER
Patricia C. Meringer
Attorney-in-Fact
EXHIBIT INDEX
Exhibit Sequential Page
Number
5 Opinion of Patricia C. Meringer, Esq.
10.37 Form of Employment Agreement between Hibernia National
Bank and E. R. Campbell, Jr.
10.39 Form of Employment Agreement between Kenneth A. Bailey
and Hibernia National Bank
23(a) Consent of Patricia C. Meringer, Esq. (included with
Exhibit 5)
23(c) Consent of Ernst & Young
Consent of Postlewaite & Netterville
Consent of National Capital Corporation
24 Powers of Attorney
________
EXHIBIT 5
February 15, 1995
Securities and Exchange Commission
450 Fifth Street, N.W.
Washington, D.C. 20549
Ladies and Gentlemen:
I am Associate Counsel and Secretary of Hibernia Corporation
(the "Company") and am delivering this opinion in connection with
the registration by the Company of shares of Class A Common Stock
(the "Shares") to be issued by the Company in a proposed merger
(the "Merger") with STABA Bancshares, Inc. ("STABA") in which the
shareholders of STABA will receive the Shares in exchange for their
shares of common stock of STABA to which registration statement
(the "Registration Statement") this opinion is attached. The
Shares will be reserved for issuance upon the closing of the
Merger. The Shares will be issued to shareholders of STABA upon
consummation of the Merger pursuant to the registration statement
after it has been declared effective by the Securities and Exchange
Commission.
In furnishing this opinion, I or attorneys under my
supervision have examined such documents and have made such
investigation of matters of fact and law as I have deemed necessary
or appropriate to provide a basis for the opinions set forth
herein. In such examination and investigation, I have assumed the
genuineness of all signatures, the legal capacity of natural
persons, the authenticity of all documents submitted as originals
and the conformity to original documents of all documents submitted
as certified or photostatic copies.
In rendering this opinion, I do not express any opinion
concerning any law other than the law of the State of Louisiana and
the federal law of the United States, and I do not express any
opinion, either implicitly or otherwise, on any issue not expressly
addressed below.
Based upon and limited by the foregoing, and based upon legal
considerations which I deem relevant and upon laws or regulations
in effect as of the date hereof, I am of the opinion that:
1. Hibernia Corporation has been duly incorporated and is
validly existing and in good standing under the laws of the State
of Louisiana.
2. The Shares have been duly authorized and either are, or,
upon issuance thereof pursuant to the terms of the offering
thereof, will be, validly issued, fully paid and non-assessable.
I hereby expressly consent to the inclusion of this Opinion as
exhibit to the Registration Statement and to the reference to this
Opinion therein.
This opinion is being furnished to you pursuant to the filing
of the Registration Statement and may not be relied upon by any
other person or used for any other purpose, except as provided for
in the preceding paragraph.
Very truly yours,
Patricia C. Meringer
Associate Counsel
and Secretary
EXHIBIT 10.37
FORM OF EMPLOYMENT AGREEMENT BETWEEN HIBERNIA NATIONAL BANK AND
E.R. CAMPBELL, JR.
AGREEMENT
THIS AGREEMENT is entered into this 1st day of January, 1995,
by and among E. R. Campbell, Jr. ("Employee"), and Hibernia
National Bank, a national banking association ("Hibernia").
W I T N E S S E T H:
WHEREAS, Hibernia intends to acquire by merger STABA
Bancshares, Inc. ("STABA"), of which Employee is the Chairman;
WHEREAS, Employee is a unique repository of information and
knowledge concerning STABA, its customers and its operations;
WHEREAS, Hibernia desires to have the benefit of such
knowledge and experience and recognizes that such knowledge and
experience would be valuable to competitors of Hibernia to the
detriment of Hibernia;
NOW, THEREFORE, in consideration of the premises and of the
respective representations, warranties and covenants hereinafter
set forth, the parties hereto hereby agree as follows:
1. EMPLOYMENT. Hibernia agrees to employ Employee and
Employee agrees to remain in the employ of Hibernia, upon the terms
and subject to the conditions provided herein.
2. POSITION AND TITLE. During the period of his employment
hereunder, Employee shall be employed as Chairman, Shreveport
Region, or such other title as may be mutually agreed by the
parties, and shall perform services when and as directed by
Hibernia, as more fully described in Section 3 hereof.
3. DUTIES. Employee's duties shall include those duties that
may, from time to time, be delegated to Employee by the President
of Hibernia, and such other responsibilities as may, in the sole
discretion of the President of Hibernia, be necessary or
appropriate to the position of Chairman, Shreveport Region. The
duties would include, but not necessarily be limited to, assisting
in the integration of STABA into the operations of Hibernia,
representing Hibernia in community affairs, participating in
activities with the Louisiana Bankers Association, developing new
business relationships and assisting in soliciting merger and
acquisition candidates. During the period of this employment
hereunder, Employee shall devote his business time, attention,
skill and efforts to the faithful performance of his duties
hereunder. During the term of his employment under this Agreement,
Employee may not serve, or continue to serve, on the board of
directors or hold any other office or position with any other
financial institution within the Affected Area, as defined below.
4. COMPENSATION.
(a) Salary. Hibernia will pay Employee $_______ per
year to compensate Employee for the duties and
responsibilities performed for Hibernia described
in Section 3 above. During the term of his
employment, Employee's salary will be paid
currently in equal installments twice monthly, on
the 15th and the last business day of each month.
The foregoing salary may be increased, but not
decreased, by the Board of Directors of Hibernia or
any committee of such Board to which such
responsibility is generally or specifically
delegated.
(b) Benefits. Employee during the term of his
employment shall also be entitled to receive such
benefits as Hibernia may provide for its employees
pursuant to any policy of Hibernia authorized by
its Board of Directors.
5. TERM. Employee's employment under this Agreement
shall commence at the Effective Date pursuant to the Agreement and
Plan and Merger (the "Agreement") dated June 1, 1994 by and between
the Hibernia Corporation and STABA Bancshares, Inc. and shall
terminate five years from the Effective Date, (the "Contractual
Termination Date"). This Agreement may be terminated sooner in
accordance with any provision hereof.
6. TERMINATION.
(a) Death or Disability.
(i) Employment shall terminate upon Employee's
death.
(ii) If Employee becomes, in the good faith
judgment of Hibernia's Board of Directors,
physically or mentally disabled so as to be
eligible to receive benefits pursuant to the
disability insurance policy provided to
Employee pursuant to this Agreement, Hibernia
may, at its option, terminate employment upon
not fewer than 15 days' written notice.
If employment is terminated pursuant to this
Subsection 6(a), Employee or his heirs, estate,
executor and administrator shall be entitled to
receive, and Hibernia shall pay to Employee or his
heirs, estate, executor or administrator unpaid
salary through the Contractual Termination Date.
(b) Termination for Cause. This Agreement may be
immediately terminated by Hibernia if: (i) after
the Effective Date, Employee knowingly and
intentionally commits, or is arrested for or
otherwise officially charged with, a felony or a
crime involving moral turpitude or any other
criminal activity or unethical conduct that, in the
good faith opinion of the Board of Directors of
Hibernia, would seriously impair Employee's ability
to perform his duties hereunder or would impair the
business reputation of Hibernia or (ii) in good
faith opinion of the Board of Directors of
Hibernia, Employee has knowingly or intentionally
violated any statute, rule, or regulation under the
federal securities or banking laws, the securities
of banking laws of any state, or any provision of
this Agreement.
(c) Termination for Good Reason. Employee may
terminate this Agreement at any time for "Good
Reason", defined to mean, (i) while Employee is an
employee, the assignment to him of any duties or
responsibilities which in his reasonable judgement
are inconsistent with the position of Employee set
forth in Section 2 hereof, (ii) requiring Employee,
without his consent, to be based anywhere other
than Shreveport, Louisiana. If Employee terminates
this Agreement for Good Reason, Hibernia shall pay
to Employee the remainder of his salary through the
Contractual Termination Date at the time of
termination in a lump sum.
(d) Termination of Agreement Without Cause. Hibernia
may terminate this Agreement without cause at any
time after the Effective Date by paying to Employee
the full amount of salary in a lump sum to which he
would have been entitled through the Contractual
Termination Date.
7. Non-Competition.
(a) If Hibernia terminates this Agreement for cause, or
Employee terminates his employment without Good
Reason, or if Employee terminates his employment
for Good Reason or Hibernia terminates the
Agreement without cause and, in each such case,
Hibernia has paid or continues to pay Employee the
amounts due him hereunder through the Contractual
Termination Date, then for a period of five years
from the Effective Date, Employee shall not:
(i) become an officer, director, employee or more
than 3% shareholder in any financial
institution having an office or otherwise
doing business within the Affected Area, as
defined below, except that in the case of
First Federal Savings Bank, or its successors,
Employee may continue to own a percentage of
the outstanding shares not in excess of the
percentage of such shares owned by him as of
the date hereof, which percentage of shares is
listed on Appendix 7 hereto;
(ii) solicit any of Hibernia's depositors or other
customers to become depositors or customers of
any other financial institution having an
office or otherwise doing business within the
Affected Area;
(b) As used herein, the term "Affected Area" shall mean
the Parishes of Louisiana within a circle having as
its center the location of the Hibernia branch
located at 401 Texas Street, Shreveport, on the
date of this Agreement and a radius of 100 miles
from such center.
8. HEADINGS. Section and other headings contained in this
Agreement are for reference purposes only and shall not affect in
any way the meaning or interpretation of this Agreement.
9. INTEGRATED AGREEMENT. This Agreement, and all other
documents and instruments delivered in accordance with the terms
hereof, constitutes the entire understanding and agreement among
the parties hereto with respect to the subject matter hereof, and
there are no other agreements, understandings, restrictions,
representations or warranties among the parties other than those
set forth herein or herein provided for.
10. AMENDMENTS. This Agreement may be amended or modified at
any time in any or all respects, but only by an instrument in
writing executed by the parties hereto.
11. CHOICE OF LAW. The validity of the Agreement, the
construction of its terms, and the determination of the rights and
duties of the parties hereto shall be governed by and construed in
accordance with the internal laws of the State of Louisiana
applicable to contracts made to be performed wholly within such
State.
12. SEVERABILITY. Each provision of the Agreement is
intended to be severable. In the event that any one or more of the
provisions contained in this Agreement shall for any reason be held
to be invalid, illegal or unenforceable, the same shall not affect
the validity or enforceability of any other provision of this
Agreement, but this Agreement shall be construed as if such
invalid, illegal or unenforceable provisions had never been
contained therein. Notwithstanding the foregoing, however, no
provision shall be severed if it is clearly apparent under the
circumstances that the parties would not have entered into the
Agreement without such provision.
IN WITNESS WHEREOF, the parties hereto have executed this
Agreement as of the day and year first above written.
EMPLOYEE
____________________________________
E. R. Campbell, Jr.
HIBERNIA NATIONAL BANK
By: _______________________________
EXHIBIT 10.39
FORM OF EMPLOYMENT AGREEMENT
BETWEEN KENNETH A. BAILEY AND HIBERNIA NATIONAL BANK
AGREEMENT
THIS AGREEMENT is entered into this day of November,
1994, by and among Kenneth A. Bailey ("Employee") and Hibernia
National Bank ("Hibernia").
W I T N E S S E T H:
WHEREAS, Hibernia intends to acquire by merger State Bank and
Trust Company (the "Bank"), of which Employee is the Chief
Executive Officer;
WHEREAS, Employee is a unique repository of information and
knowledge concerning the Bank, its customers and its operations;
WHEREAS, Hibernia desires to have the benefit of such
knowledge and experience and recognizes that such knowledge and
experience would be valuable to competitors of Hibernia to the
detriment of Hibernia;
NOW, THEREFORE, in consideration of the premises and of the
respective representations, warranties, and covenants hereinafter
set forth, the parties hereto hereby agree as follows:
1. EMPLOYMENT. Hibernia agrees to employ Employee and
Employee agrees to remain in the employ of Hibernia, upon the terms
and subject to the conditions provided herein.
2. POSITION AND TITLE. During the period of his employment
hereunder, Employee shall be employed as Area President, or such
other title as may be mutually agreed by the parties, and shall
perform services when and as directed by Hibernia, as more fully
described in Section 3 hereof.
3. DUTIES. Employee's duties shall include those duties
that may, from time to time, be delegated to Employee by the
President of Hibernia, and such other responsibilities as may, in
the sole discretion of the President of Hibernia, be necessary or
appropriate to the position of Area President. The duties would
include, but not necessarily be limited to, assisting in the
integration of the Bank into the operations of Hibernia,
representing Hibernia in community affairs, participating in
activities with the Louisiana Bankers Association, developing new
business relationships, and assisting in soliciting merger and
acquisition candidates. During the period of this employment
hereunder, Employee shall devote his business time, attention,
skill, and efforts to the faithful performance of his duties
hereunder. During the term of his employment under this Agreement,
Employee may not serve, or continue to serve, on the board of
directors or hold any other office or position with any other
financial institution within the Affected Area, as defined below.
4. COMPENSATION.
(a) Salary. Employee will be placed in Hibernia's pay
grade , and Hibernia will pay Employee $
per year to compensate Employee for the
duties and responsibilities performed for Hibernia
described in Section 3 above. During the term of
his employment, Employee's salary will be paid
currently in equal installments twice monthly, on
the 15th and the last business day of each month.
The foregoing salary may be increased, but not
decreased, by the Board of Directors of Hibernia or
any committee of such Board to which such
responsibility is generally or specifically
delegated.
(b) Benefits. Employee during the term of his
employment shall also be entitled to receive such
benefits as Hibernia may provide for its employees
in such pay grade pursuant to any policy of
Hibernia authorized by its Board of Directors.
5. TERM. Employee's employment under this Agreement shall
commence at the effective date of the merger of the Bank with and
into Hibernia (the "Effective Date") and shall terminate three
years from the Effective Date, (the "Termination Date"), unless
terminated sooner in accordance with any provision hereof.
6. TERMINATION.
(a) Death or Disability.
(i) Employment shall terminate upon Employee's
death.
(ii) If Employee becomes, in the good faith
judgment of Hibernia's Board of Directors,
physically or mentally disabled so as to be
eligible to receive benefits pursuant to the
disability insurance policy provided to
Employee pursuant to this Agreement, Hibernia
may, at its option, terminate employment upon
not fewer than 15 days' written notice.
If employment is terminated pursuant to this
Subsection 6(a), Employee or his heirs, estate,
executor and administrator shall be entitled to
receive, and Hibernia shall pay to Employee or his
heirs, estate, executor or administrator unpaid
salary through the Termination Date.
(b) Termination for Cause. This Agreement may be
immediately terminated by Hibernia if: (i) after
the Effective Date, Employee knowingly and
intentionally commits, or is arrested for or
otherwise officially charged with, a felony or a
crime involving moral turpitude or any other
criminal activity or unethical conduct that, in the
good faith opinion of the Board of Directors of
Hibernia, would seriously impair Employee's ability
to perform his duties hereunder or would impair the
business reputation of Hibernia or (ii) in good
faith opinion of the Board of Directors of
Hibernia, Employee has violated any statute, rule,
or regulation under the federal securities or
banking laws, the securities of banking laws of nay
state, or any provision of this Agreement.
(c) Termination for Good Reason. Employee may
terminate this Agreement at any time for "Good
Reason", defined to mean, (i) while Employee is an
employee, the assignment to him of any duties or
responsibilities which in his reasonable judgement
are inconsistent with the position of Employee set
forth in Section 2 hereof, (ii) requiring Employee,
without his consent, to be based anywhere other
than Donaldsonville, Louisiana. If Employee
terminates this Agreement for Good Reason, Hibernia
shall pay to Employee the remainder of his salary
through the Termination Date at the time of
termination in a lump sum.
(d) Termination of Agreement Without Cause. Hibernia
may terminate this Agreement without cause at any
time after the Effective Date by paying to Employee
the full amount of salary in a lump sum to which he
would have been entitled through the Termination
Date.
7. Non-Competition.
(a) If Hibernia terminates this Agreement for cause, or
Employee terminates his employment without Good
Reason, or if Employee terminates his employment
for Good Reason or Hibernia terminates the
Agreement without cause and, in each such case,
Hibernia has paid or continues to pay Employee the
amounts due him hereunder, then for a period of two
years from the Effective Date, Employee shall not:
(i) become an officer, director, employee or more
than 3% shareholder in any financial
institution having an office or otherwise
doing business within the Affected Area, as
defined below;
(ii) solicit any of Hibernia's depositors or other
customers to become depositors or customers of
any other financial institution having an
office or otherwise doing business within the
Affected Area;
(b) As used herein, the term "Affected Area" shall mean
the Parish of Ascension in the State of Louisiana.
8. PRIOR AGREEMENT. This Agreement shall supersede that
certain Employment Agreement by and between the Bank and Employee
dated March 1, 1994 (the "Prior Agreement"), and Employee hereby
expressly agrees that, on the Effective Date, the provisions of the
Prior Agreement shall terminate.
9. HEADINGS. Section and other headings contained in this
Agreement are for reference purposes only and shall not affect in
any way the meaning or interpretation of this Agreement.
10. INTEGRATED AGREEMENT. This Agreement, and all other
documents and instruments delivered in accordance with the terms
hereof, constitutes the entire understanding and agreement among
the parties hereto with respect to the subject matter hereof, and
there are no other agreements, understandings, restrictions,
representations or warranties among the parties other than those
set forth herein or herein provided for. This Agreement superseces
the Prior Agreement.
11. AMENDMENTS. This Agreement may be amended or modified at
any time in any or all respects, but only by an instrument in
writing executed by the parties hereto.
12. CHOICE OF LAW. The validity of the Agreement, the
construction of its terms, and the determination of the rights and
duties of the parties hereto shall be governed by and construed in
accordance with the internal laws of the State of Louisiana
applicable to contracts made to be performed wholly within such
State.
13. SEVERABILITY. Each provision of the Agreement is
intended to be severable. In the event that any one or more of the
provisions contained in this Agreement shall for any reason be held
to be invalid, illegal or unenforceable, the same shall not affect
the validity or enforceability of any other provision of this
Agreement, but this Agreement shall be construed as if such
invalid, illegal or unenforceable provisions had never been
contained therein. Notwithstanding the foregoing, however, no
provision shall be severed if it is clearly apparent under the
circumstances that the parties would not have entered into the
Agreement without such provision.
IN WITNESS WHEREOF, the parties hereto have executed this
Agreement as of the day and year first above written.
EMPLOYEE
HIBERNIA NATIONAL BANK
By:
EXHIBIT 23 (c)(i)
CONSENT OF ERNST & YOUNG LLP
Consent of Independent Auditors
We consent to the reference to our firm under the caption "Experts"
in this Registration Statement (Form S-4) and related Prospectus of
Hibernia Corporation for the registration of 2,250,000 shares of
its common stock to be issued pursuant to its proposed merger with
STABA Bancshares, Inc. and to the incorporation by reference
therein of our reports (i) dated January 11, 1994, with respect to
the consolidated financial statements of Hibernia Corporation
incorporated by reference in its Annual Report (Form 10-K) for the
year ended December 31, 1993, (ii) dated January 11, 1994, except
for the poolings of interests with the Other Pooled Companies
described in Note 16, as to which the date is August 1, 1994, with
respect to the consolidated financial statements of Hibernia
Corporation for the year ended December 31, 1993, included in its
Current Report on Form 8-K dated October 11, 1994, restated to give
effect to four mergers consummated during the third quarter of 1994
and accounted for as poolings of interests, and (iii) dated January
11, 1994, except for the poolings of interests with the Other
Pooled Companies described in Note 16, as to which the date is
December 31, 1994, with respect to the consolidated financial
statements of Hibernia Corporation for the year ended December 31,
1993, included in its Current Report on Form 8-K dated February 14,
1995, restated to give effect to six mergers consummated during
1994 and accounted for as poolings of interests, each filed with
the Securities and Exchange Commission.
s/ERNST & YOUNG LLP
Ernst & Young LLP
New Orleans, Louisiana
February 13, 1995
EXHIBIT 23(c)(ii)
CONSENT OF POSTLEWAITE & NETTERVILLE
We consent to the reference to our firm under the caption "Experts"
in the Registration Statement on Form S-4 and related Prospectus of
Hibernia Corporation for the registration of its common stock to be
issued pursuant to its proposed merger with STABA Bancshares, Inc.
and to the inclusion herein of our report dated _____ __, 1994,
with respect to the consolidated financial statements of STABA
Bancshares, Inc. and Subsidiaries also included therein, filed with
the Securities and Exchange Commission.
/s/ Postlewaite & Netterville
POSTLEWAITE & NETTERVILLE
Baton Rouge, Louisiana
February 1_, 1995
EXHIBIT 23(c)(iii)
CONSENT OF NATIONAL CAPITAL CORPORATION
We consent to the reference to our firm under the caption "Summary"
and "Opinion of Financial Advisor" in the Registration Statement on
Form S-4 of Hibernia Corporation for the registration of its common
stock to be issued pursuant to its proposed merger with STABA
Bancshares, Inc. and to the inclusion therein of our fairness
opinion dated February 14, 1995, with respect to the proposed
merger.
/s/ National Capital Corporation
NATIONAL CAPITAL CORPORATION
Baton Rouge, Louisiana
February 16, 1995
EXHIBIT 24
POWERS OF ATTORNEY
P0WER OF ATTORNEY
KNOW ALL MEN BY THESE PRESENTS, that the undersigned director
of Hibernia Corporation, a Louisiana corporation (the
"Corporation"), does hereby name, constitute and appoint Robert W.
Close, Patricia C. Meringer and Ron E. Samford, Jr., and each of
them (with full power to each of them to act alone), his true and
lawful agents and attorneys-in-fact, for him and on his behalf and
in his name, place and stead, in any and all capacities, to sign,
execute, acknowledge, deliver, and file (a) with the Securities and
Exchange Commission (or any other governmental or regulatory
authority), a Registration Statement on Form S-4 (or other
appropriate form) and any and all amendments (including post-
effective amendments) thereto, with any and all exhibits and any
and all other documents required to be filed with respect thereto
or in connection therewith, relating to the registration under the
Securities Act of 1933 of Common Stock of the Corporation to be
issued in the merger between the Corporation and STABA Bancshares,
Inc. ("STABA") wherein the Corporation agrees to exchange shares of
its common stock for all of the outstanding shares of common stock
of STABA and merge STABA into the Corporation, authorized by
resolutions adopted by the Board of Directors on November 15, 1994,
and (b) with the securities agencies or officials of various
jurisdictions, all applications, qualifications, registrations or
exemptions relating to such offering under the laws of any such
jurisdiction, including any amendments thereto or other documents
required to be filed with respect thereto or in connection
therewith, granting unto said agents and attorneys, and each of
them, full power and authority to do and perform each and every act
and thing requisite and necessary to be done in and about the
premises in order to effectuate the same as fully to all intents
and purposes as the undersigned might or could do if personally
present, and the undersigned hereby ratifies and confirms all that
said agents and attorneys-in-fact, or any of them may lawfully do
or cause to be done by virtue hereof.
IN WITNESS WHEREOF, the undersigned has hereunto set his hand
on this 15th day of November, 1994.
S/W. JAMES AMOSS, JR.
W. James Amoss, Jr.
Director
HIBERNIA CORPORATION
P0WER OF ATTORNEY
KNOW ALL MEN BY THESE PRESENTS, that the undersigned Chairman
and director of Hibernia Corporation, a Louisiana corporation (the
"Corporation"), does hereby name, constitute and appoint Robert W.
Close, Patricia C. Meringer and Ron E. Samford, Jr., and each of
them (with full power to each of them to act alone), his true and
lawful agents and attorneys-in-fact, for him and on his behalf and
in his name, place and stead, in any and all capacities, to sign,
execute, acknowledge, deliver, and file (a) with the Securities and
Exchange Commission (or any other governmental or regulatory
authority), a Registration Statement on Form S-4 (or other
appropriate form) and any and all amendments (including post-
effective amendments) thereto, with any and all exhibits and any
and all other documents required to be filed with respect thereto
or in connection therewith, relating to the registration under the
Securities Act of 1933 of Common Stock of the Corporation to be
issued in the merger between the Corporation and STABA Bancshares,
Inc. ("STABA") wherein the Corporation agrees to exchange shares of
its common stock for all of the outstanding shares of common stock
of STABA and merge STABA into the Corporation, authorized by
resolutions adopted by the Board of Directors on November 15, 1994,
and (b) with the securities agencies or officials of various
jurisdictions, all applications, qualifications, registrations or
exemptions relating to such offering under the laws of any such
jurisdiction, including any amendments thereto or other documents
required to be filed with respect thereto or in connection
therewith, granting unto said agents and attorneys, and each of
them, full power and authority to do and perform each and every act
and thing requisite and necessary to be done in and about the
premises in order to effectuate the same as fully to all intents
and purposes as the undersigned might or could do if personally
present, and the undersigned hereby ratifies and confirms all that
said agents and attorneys-in-fact, or any of them may lawfully do
or cause to be done by virtue hereof.
IN WITNESS WHEREOF, the undersigned has hereunto set his hand
on this 15th day of November, 1994.
S/ROBERT H. BOH
Robert H. Boh
Chairman and Director
HIBERNIA CORPORATION
P0WER OF ATTORNEY
KNOW ALL MEN BY THESE PRESENTS, that the undersigned director
of Hibernia Corporation, a Louisiana corporation (the
"Corporation"), does hereby name, constitute and appoint Robert W.
Close, Patricia C. Meringer and Ron E. Samford, Jr., and each of
them (with full power to each of them to act alone), his true and
lawful agents and attorneys-in-fact, for him and on his behalf and
in his name, place and stead, in any and all capacities, to sign,
execute, acknowledge, deliver, and file (a) with the Securities and
Exchange Commission (or any other governmental or regulatory
authority), a Registration Statement on Form S-4 (or other
appropriate form) and any and all amendments (including post-
effective amendments) thereto, with any and all exhibits and any
and all other documents required to be filed with respect thereto
or in connection therewith, relating to the registration under the
Securities Act of 1933 of Common Stock of the Corporation to be
issued in the merger between the Corporation and STABA Bancshares,
Inc. ("STABA") wherein the Corporation agrees to exchange shares of
its common stock for all of the outstanding shares of common stock
of STABA and merge STABA into the Corporation, authorized by
resolutions adopted by the Board of Directors on November 15, 1994,
and (b) with the securities agencies or officials of various
jurisdictions, all applications, qualifications, registrations or
exemptions relating to such offering under the laws of any such
jurisdiction, including any amendments thereto or other documents
required to be filed with respect thereto or in connection
therewith, granting unto said agents and attorneys, and each of
them, full power and authority to do and perform each and every act
and thing requisite and necessary to be done in and about the
premises in order to effectuate the same as fully to all intents
and purposes as the undersigned might or could do if personally
present, and the undersigned hereby ratifies and confirms all that
said agents and attorneys-in-fact, or any of them may lawfully do
or cause to be done by virtue hereof.
IN WITNESS WHEREOF, the undersigned has hereunto set his hand
on this 15th day of November, 1994.
S/J. HERBERT BOYDSTUN
J. Herbert Boydstun
Director
HIBERNIA CORPORATION
P0WER OF ATTORNEY
KNOW ALL MEN BY THESE PRESENTS, that the undersigned director
of Hibernia Corporation, a Louisiana corporation (the
"Corporation"), does hereby name, constitute and appoint Robert W.
Close, Patricia C. Meringer and Ron E. Samford, Jr., and each of
them (with full power to each of them to act alone), his true and
lawful agents and attorneys-in-fact, for him and on his behalf and
in his name, place and stead, in any and all capacities, to sign,
execute, acknowledge, deliver, and file (a) with the Securities and
Exchange Commission (or any other governmental or regulatory
authority), a Registration Statement on Form S-4 (or other
appropriate form) and any and all amendments (including post-
effective amendments) thereto, with any and all exhibits and any
and all other documents required to be filed with respect thereto
or in connection therewith, relating to the registration under the
Securities Act of 1933 of Common Stock of the Corporation to be
issued in the merger between the Corporation and STABA Bancshares,
Inc. ("STABA") wherein the Corporation agrees to exchange shares of
its common stock for all of the outstanding shares of common stock
of STABA and merge STABA into the Corporation, authorized by
resolutions adopted by the Board of Directors on November 15, 1994,
and (b) with the securities agencies or officials of various
jurisdictions, all applications, qualifications, registrations or
exemptions relating to such offering under the laws of any such
jurisdiction, including any amendments thereto or other documents
required to be filed with respect thereto or in connection
therewith, granting unto said agents and attorneys, and each of
them, full power and authority to do and perform each and every act
and thing requisite and necessary to be done in and about the
premises in order to effectuate the same as fully to all intents
and purposes as the undersigned might or could do if personally
present, and the undersigned hereby ratifies and confirms all that
said agents and attorneys-in-fact, or any of them may lawfully do
or cause to be done by virtue hereof.
IN WITNESS WHEREOF, the undersigned has hereunto set his hand
on this 15th day of November, 1994.
S/ J. TERRELL BROWN
J. Terrell Brown
Director
HIBERNIA CORPORATION
P0WER OF ATTORNEY
KNOW ALL MEN BY THESE PRESENTS, that the undersigned director
of Hibernia Corporation, a Louisiana corporation (the
"Corporation"), does hereby name, constitute and appoint Robert W.
Close, Patricia C. Meringer and Ron E. Samford, Jr., and each of
them (with full power to each of them to act alone), his true and
lawful agents and attorneys-in-fact, for him and on his behalf and
in his name, place and stead, in any and all capacities, to sign,
execute, acknowledge, deliver, and file (a) with the Securities and
Exchange Commission (or any other governmental or regulatory
authority), a Registration Statement on Form S-4 (or other
appropriate form) and any and all amendments (including post-
effective amendments) thereto, with any and all exhibits and any
and all other documents required to be filed with respect thereto
or in connection therewith, relating to the registration under the
Securities Act of 1933 of Common Stock of the Corporation to be
issued in the merger between the Corporation and STABA Bancshares,
Inc. ("STABA") wherein the Corporation agrees to exchange shares of
its common stock for all of the outstanding shares of common stock
of STABA and merge STABA into the Corporation, authorized by
resolutions adopted by the Board of Directors on November 15, 1994,
and (b) with the securities agencies or officials of various
jurisdictions, all applications, qualifications, registrations or
exemptions relating to such offering under the laws of any such
jurisdiction, including any amendments thereto or other documents
required to be filed with respect thereto or in connection
therewith, granting unto said agents and attorneys, and each of
them, full power and authority to do and perform each and every act
and thing requisite and necessary to be done in and about the
premises in order to effectuate the same as fully to all intents
and purposes as the undersigned might or could do if personally
present, and the undersigned hereby ratifies and confirms all that
said agents and attorneys-in-fact, or any of them may lawfully do
or cause to be done by virtue hereof.
IN WITNESS WHEREOF, the undersigned has hereunto set his hand
on this 15th day of November, 1994.
S/E. R. "BO" CAMPBELL, JR.
E. R. "Bo" Campbell
Director
HIBERNIA CORPORATION
P0WER OF ATTORNEY
KNOW ALL MEN BY THESE PRESENTS, that the undersigned director
of Hibernia Corporation, a Louisiana corporation (the
"Corporation"), does hereby name, constitute and appoint Robert W.
Close, Patricia C. Meringer and Ron E. Samford, Jr., and each of
them (with full power to each of them to act alone), his true and
lawful agents and attorneys-in-fact, for him and on his behalf and
in his name, place and stead, in any and all capacities, to sign,
execute, acknowledge, deliver, and file (a) with the Securities and
Exchange Commission (or any other governmental or regulatory
authority), a Registration Statement on Form S-4 (or other
appropriate form) and any and all amendments (including post-
effective amendments) thereto, with any and all exhibits and any
and all other documents required to be filed with respect thereto
or in connection therewith, relating to the registration under the
Securities Act of 1933 of Common Stock of the Corporation to be
issued in the merger between the Corporation and STABA Bancshares,
Inc. ("STABA") wherein the Corporation agrees to exchange shares of
its common stock for all of the outstanding shares of common stock
of STABA and merge STABA into the Corporation, authorized by
resolutions adopted by the Board of Directors on November 15, 1994,
and (b) with the securities agencies or officials of various
jurisdictions, all applications, qualifications, registrations or
exemptions relating to such offering under the laws of any such
jurisdiction, including any amendments thereto or other documents
required to be filed with respect thereto or in connection
therewith, granting unto said agents and attorneys, and each of
them, full power and authority to do and perform each and every act
and thing requisite and necessary to be done in and about the
premises in order to effectuate the same as fully to all intents
and purposes as the undersigned might or could do if personally
present, and the undersigned hereby ratifies and confirms all that
said agents and attorneys-in-fact, or any of them may lawfully do
or cause to be done by virtue hereof.
IN WITNESS WHEREOF, the undersigned has hereunto set his hand
on this 15th day of November, 1994.
S/BROOKE H. DUNCAN
Brooke H. Duncan
Director
HIBERNIA CORPORATION
P0WER OF ATTORNEY
KNOW ALL MEN BY THESE PRESENTS, that the undersigned director
of Hibernia Corporation, a Louisiana corporation (the
"Corporation"), does hereby name, constitute and appoint Robert W.
Close, Patricia C. Meringer and Ron E. Samford, Jr., and each of
them (with full power to each of them to act alone), his true and
lawful agents and attorneys-in-fact, for him and on his behalf and
in his name, place and stead, in any and all capacities, to sign,
execute, acknowledge, deliver, and file (a) with the Securities and
Exchange Commission (or any other governmental or regulatory
authority), a Registration Statement on Form S-4 (or other
appropriate form) and any and all amendments (including post-
effective amendments) thereto, with any and all exhibits and any
and all other documents required to be filed with respect thereto
or in connection therewith, relating to the registration under the
Securities Act of 1933 of Common Stock of the Corporation to be
issued in the merger between the Corporation and STABA Bancshares,
Inc. ("STABA") wherein the Corporation agrees to exchange shares of
its common stock for all of the outstanding shares of common stock
of STABA and merge STABA into the Corporation, authorized by
resolutions adopted by the Board of Directors on November 15, 1994,
and (b) with the securities agencies or officials of various
jurisdictions, all applications, qualifications, registrations or
exemptions relating to such offering under the laws of any such
jurisdiction, including any amendments thereto or other documents
required to be filed with respect thereto or in connection
therewith, granting unto said agents and attorneys, and each of
them, full power and authority to do and perform each and every act
and thing requisite and necessary to be done in and about the
premises in order to effectuate the same as fully to all intents
and purposes as the undersigned might or could do if personally
present, and the undersigned hereby ratifies and confirms all that
said agents and attorneys-in-fact, or any of them may lawfully do
or cause to be done by virtue hereof.
IN WITNESS WHEREOF, the undersigned has hereunto set his hand
on this 15th day of November, 1994.
S/RICHARD W. FREEMAN, JR.
Richard W. Freeman, Jr.
Director
HIBERNIA CORPORATION
P0WER OF ATTORNEY
KNOW ALL MEN BY THESE PRESENTS, that the undersigned director
of Hibernia Corporation, a Louisiana corporation (the
"Corporation"), does hereby name, constitute and appoint Robert W.
Close, Patricia C. Meringer and Ron E. Samford, Jr., and each of
them (with full power to each of them to act alone), his true and
lawful agents and attorneys-in-fact, for him and on his behalf and
in his name, place and stead, in any and all capacities, to sign,
execute, acknowledge, deliver, and file (a) with the Securities and
Exchange Commission (or any other governmental or regulatory
authority), a Registration Statement on Form S-4 (or other
appropriate form) and any and all amendments (including post-
effective amendments) thereto, with any and all exhibits and any
and all other documents required to be filed with respect thereto
or in connection therewith, relating to the registration under the
Securities Act of 1933 of Common Stock of the Corporation to be
issued in the merger between the Corporation and STABA Bancshares,
Inc. ("STABA") wherein the Corporation agrees to exchange shares of
its common stock for all of the outstanding shares of common stock
of STABA and merge STABA into the Corporation, authorized by
resolutions adopted by the Board of Directors on November 15, 1994,
and (b) with the securities agencies or officials of various
jurisdictions, all applications, qualifications, registrations or
exemptions relating to such offering under the laws of any such
jurisdiction, including any amendments thereto or other documents
required to be filed with respect thereto or in connection
therewith, granting unto said agents and attorneys, and each of
them, full power and authority to do and perform each and every act
and thing requisite and necessary to be done in and about the
premises in order to effectuate the same as fully to all intents
and purposes as the undersigned might or could do if personally
present, and the undersigned hereby ratifies and confirms all that
said agents and attorneys-in-fact, or any of them may lawfully do
or cause to be done by virtue hereof.
IN WITNESS WHEREOF, the undersigned has hereunto set his hand
on this 15th day of November, 1994.
S/ROBERT L. GOODWIN
Robert L. Goodwin
Director
HIBERNIA CORPORATION
P0WER OF ATTORNEY
KNOW ALL MEN BY THESE PRESENTS, that the undersigned
President, Chief Executive Officer and director of Hibernia
Corporation, a Louisiana corporation (the "Corporation"), does
hereby name, constitute and appoint Robert W. Close, Patricia C.
Meringer and Ron E. Samford, Jr., and each of them (with full power
to each of them to act alone), his true and lawful agents and
attorneys-in-fact, for him and on his behalf and in his name, place
and stead, in any and all capacities, to sign, execute,
acknowledge, deliver, and file (a) with the Securities and Exchange
Commission (or any other governmental or regulatory authority), a
Registration Statement on Form S-4 (or other appropriate form) and
any and all amendments (including post-effective amendments)
thereto, with any and all exhibits and any and all other documents
required to be filed with respect thereto or in connection
therewith, relating to the registration under the Securities Act of
1933 of Common Stock of the Corporation to be issued in the merger
between the Corporation and STABA Bancshares, Inc. ("STABA")
wherein the Corporation agrees to exchange shares of its common
stock for all of the outstanding shares of common stock of STABA
and merge STABA into the Corporation, authorized by resolutions
adopted by the Board of Directors on November 15, 1994, and (b)
with the securities agencies or officials of various jurisdictions,
all applications, qualifications, registrations or exemptions
relating to such offering under the laws of any such jurisdiction,
including any amendments thereto or other documents required to be
filed with respect thereto or in connection therewith, granting
unto said agents and attorneys, and each of them, full power and
authority to do and perform each and every act and thing requisite
and necessary to be done in and about the premises in order to
effectuate the same as fully to all intents and purposes as the
undersigned might or could do if personally present, and the
undersigned hereby ratifies and confirms all that said agents and
attorneys-in-fact, or any of them may lawfully do or cause to be
done by virtue hereof.
IN WITNESS WHEREOF, the undersigned has hereunto set his hand
on this 15th day of November, 1994.
S/STEPHEN A. HANSEL
Stephen A. Hansel
President, Chief Executive Officer
and Director
HIBERNIA CORPORATION
P0WER OF ATTORNEY
KNOW ALL MEN BY THESE PRESENTS, that the undersigned director
of Hibernia Corporation, a Louisiana corporation (the
"Corporation"), does hereby name, constitute and appoint Robert W.
Close, Patricia C. Meringer and Ron E. Samford, Jr., and each of
them (with full power to each of them to act alone), his true and
lawful agents and attorneys-in-fact, for him and on his behalf and
in his name, place and stead, in any and all capacities, to sign,
execute, acknowledge, deliver, and file (a) with the Securities and
Exchange Commission (or any other governmental or regulatory
authority), a Registration Statement on Form S-4 (or other
appropriate form) and any and all amendments (including post-
effective amendments) thereto, with any and all exhibits and any
and all other documents required to be filed with respect thereto
or in connection therewith, relating to the registration under the
Securities Act of 1933 of Common Stock of the Corporation to be
issued in the merger between the Corporation and STABA Bancshares,
Inc. ("STABA") wherein the Corporation agrees to exchange shares of
its common stock for all of the outstanding shares of common stock
of STABA and merge STABA into the Corporation, authorized by
resolutions adopted by the Board of Directors on November 15, 1994,
and (b) with the securities agencies or officials of various
jurisdictions, all applications, qualifications, registrations or
exemptions relating to such offering under the laws of any such
jurisdiction, including any amendments thereto or other documents
required to be filed with respect thereto or in connection
therewith, granting unto said agents and attorneys, and each of
them, full power and authority to do and perform each and every act
and thing requisite and necessary to be done in and about the
premises in order to effectuate the same as fully to all intents
and purposes as the undersigned might or could do if personally
present, and the undersigned hereby ratifies and confirms all that
said agents and attorneys-in-fact, or any of them may lawfully do
or cause to be done by virtue hereof.
IN WITNESS WHEREOF, the undersigned has hereunto set his hand
on this 15th day of November, 1994.
___________________________________
Dick H. Hearin
Director
HIBERNIA CORPORATION
P0WER OF ATTORNEY
KNOW ALL MEN BY THESE PRESENTS, that the undersigned director
of Hibernia Corporation, a Louisiana corporation (the
"Corporation"), does hereby name, constitute and appoint Robert W.
Close, Patricia C. Meringer and Ron E. Samford, Jr., and each of
them (with full power to each of them to act alone), his true and
lawful agents and attorneys-in-fact, for him and on his behalf and
in his name, place and stead, in any and all capacities, to sign,
execute, acknowledge, deliver, and file (a) with the Securities and
Exchange Commission (or any other governmental or regulatory
authority), a Registration Statement on Form S-4 (or other
appropriate form) and any and all amendments (including post-
effective amendments) thereto, with any and all exhibits and any
and all other documents required to be filed with respect thereto
or in connection therewith, relating to the registration under the
Securities Act of 1933 of Common Stock of the Corporation to be
issued in the merger between the Corporation and STABA Bancshares,
Inc. ("STABA") wherein the Corporation agrees to exchange shares of
its common stock for all of the outstanding shares of common stock
of STABA and merge STABA into the Corporation, authorized by
resolutions adopted by the Board of Directors on November 15, 1994,
and (b) with the securities agencies or officials of various
jurisdictions, all applications, qualifications, registrations or
exemptions relating to such offering under the laws of any such
jurisdiction, including any amendments thereto or other documents
required to be filed with respect thereto or in connection
therewith, granting unto said agents and attorneys, and each of
them, full power and authority to do and perform each and every act
and thing requisite and necessary to be done in and about the
premises in order to effectuate the same as fully to all intents
and purposes as the undersigned might or could do if personally
present, and the undersigned hereby ratifies and confirms all that
said agents and attorneys-in-fact, or any of them may lawfully do
or cause to be done by virtue hereof.
IN WITNESS WHEREOF, the undersigned has hereunto set his hand
on this 15th day of November, 1994.
S/ROBERT T. HOLLEMAN
Robert T. Holleman
Director
HIBERNIA CORPORATION
P0WER OF ATTORNEY
KNOW ALL MEN BY THESE PRESENTS, that the undersigned Vice
Chairman and director of Hibernia Corporation, a Louisiana
corporation (the "Corporation"), does hereby name, constitute and
appoint Robert W. Close, Patricia C. Meringer and Ron E. Samford,
Jr., and each of them (with full power to each of them to act
alone), his true and lawful agents and attorneys-in-fact, for him
and on his behalf and in his name, place and stead, in any and all
capacities, to sign, execute, acknowledge, deliver, and file (a)
with the Securities and Exchange Commission (or any other
governmental or regulatory authority), a Registration Statement on
Form S-4 (or other appropriate form) and any and all amendments
(including post-effective amendments) thereto, with any and all
exhibits and any and all other documents required to be filed with
respect thereto or in connection therewith, relating to the
registration under the Securities Act of 1933 of Common Stock of
the Corporation to be issued in the merger between the Corporation
and STABA Bancshares, Inc. ("STABA") wherein the Corporation agrees
to exchange shares of its common stock for all of the outstanding
shares of common stock of STABA and merge STABA into the
Corporation, authorized by resolutions adopted by the Board of
Directors on November 15, 1994, and (b) with the securities
agencies or officials of various jurisdictions, all applications,
qualifications, registrations or exemptions relating to such
offering under the laws of any such jurisdiction, including any
amendments thereto or other documents required to be filed with
respect thereto or in connection therewith, granting unto said
agents and attorneys, and each of them, full power and authority to
do and perform each and every act and thing requisite and necessary
to be done in and about the premises in order to effectuate the
same as fully to all intents and purposes as the undersigned might
or could do if personally present, and the undersigned hereby
ratifies and confirms all that said agents and attorneys-in-fact,
or any of them may lawfully do or cause to be done by virtue
hereof.
IN WITNESS WHEREOF, the undersigned has hereunto set his hand
on this 15th day of November, 1994.
S/HUGH J. KELLY
Hugh J. Kelly
Vice Chairman and Director
HIBERNIA CORPORATION
P0WER OF ATTORNEY
KNOW ALL MEN BY THESE PRESENTS, that the undersigned director
of Hibernia Corporation, a Louisiana corporation (the
"Corporation"), does hereby name, constitute and appoint Robert W.
Close, Patricia C. Meringer and Ron E. Samford, Jr., and each of
them (with full power to each of them to act alone), his true and
lawful agents and attorneys-in-fact, for him and on his behalf and
in his name, place and stead, in any and all capacities, to sign,
execute, acknowledge, deliver, and file (a) with the Securities and
Exchange Commission (or any other governmental or regulatory
authority), a Registration Statement on Form S-4 (or other
appropriate form) and any and all amendments (including post-
effective amendments) thereto, with any and all exhibits and any
and all other documents required to be filed with respect thereto
or in connection therewith, relating to the registration under the
Securities Act of 1933 of Common Stock of the Corporation to be
issued in the merger between the Corporation and STABA Bancshares,
Inc. ("STABA") wherein the Corporation agrees to exchange shares of
its common stock for all of the outstanding shares of common stock
of STABA and merge STABA into the Corporation, authorized by
resolutions adopted by the Board of Directors on November 15, 1994,
and (b) with the securities agencies or officials of various
jurisdictions, all applications, qualifications, registrations or
exemptions relating to such offering under the laws of any such
jurisdiction, including any amendments thereto or other documents
required to be filed with respect thereto or in connection
therewith, granting unto said agents and attorneys, and each of
them, full power and authority to do and perform each and every act
and thing requisite and necessary to be done in and about the
premises in order to effectuate the same as fully to all intents
and purposes as the undersigned might or could do if personally
present, and the undersigned hereby ratifies and confirms all that
said agents and attorneys-in-fact, or any of them may lawfully do
or cause to be done by virtue hereof.
IN WITNESS WHEREOF, the undersigned has hereunto set his hand
on this 15th day of November, 1994.
___________________________________
Elton R. King
Director
HIBERNIA CORPORATION
P0WER OF ATTORNEY
KNOW ALL MEN BY THESE PRESENTS, that the undersigned director
of Hibernia Corporation, a Louisiana corporation (the
"Corporation"), does hereby name, constitute and appoint Robert W.
Close, Patricia C. Meringer and Ron E. Samford, Jr., and each of
them (with full power to each of them to act alone), his true and
lawful agents and attorneys-in-fact, for him and on his behalf and
in his name, place and stead, in any and all capacities, to sign,
execute, acknowledge, deliver, and file (a) with the Securities and
Exchange Commission (or any other governmental or regulatory
authority), a Registration Statement on Form S-4 (or other
appropriate form) and any and all amendments (including post-
effective amendments) thereto, with any and all exhibits and any
and all other documents required to be filed with respect thereto
or in connection therewith, relating to the registration under the
Securities Act of 1933 of Common Stock of the Corporation to be
issued in the merger between the Corporation and STABA Bancshares,
Inc. ("STABA") wherein the Corporation agrees to exchange shares of
its common stock for all of the outstanding shares of common stock
of STABA and merge STABA into the Corporation, authorized by
resolutions adopted by the Board of Directors on November 15, 1994,
and (b) with the securities agencies or officials of various
jurisdictions, all applications, qualifications, registrations or
exemptions relating to such offering under the laws of any such
jurisdiction, including any amendments thereto or other documents
required to be filed with respect thereto or in connection
therewith, granting unto said agents and attorneys, and each of
them, full power and authority to do and perform each and every act
and thing requisite and necessary to be done in and about the
premises in order to effectuate the same as fully to all intents
and purposes as the undersigned might or could do if personally
present, and the undersigned hereby ratifies and confirms all that
said agents and attorneys-in-fact, or any of them may lawfully do
or cause to be done by virtue hereof.
IN WITNESS WHEREOF, the undersigned has hereunto set his hand
on this 15th day of November, 1994.
S/JOHN P. LABORDE
John P. Laborde
Director
HIBERNIA CORPORATION
P0WER OF ATTORNEY
KNOW ALL MEN BY THESE PRESENTS, that the undersigned director
of Hibernia Corporation, a Louisiana corporation (the
"Corporation"), does hereby name, constitute and appoint Robert W.
Close, Patricia C. Meringer and Ron E. Samford, Jr., and each of
them (with full power to each of them to act alone), his true and
lawful agents and attorneys-in-fact, for him and on his behalf and
in his name, place and stead, in any and all capacities, to sign,
execute, acknowledge, deliver, and file (a) with the Securities and
Exchange Commission (or any other governmental or regulatory
authority), a Registration Statement on Form S-4 (or other
appropriate form) and any and all amendments (including post-
effective amendments) thereto, with any and all exhibits and any
and all other documents required to be filed with respect thereto
or in connection therewith, relating to the registration under the
Securities Act of 1933 of Common Stock of the Corporation to be
issued in the merger between the Corporation and STABA Bancshares,
Inc. ("STABA") wherein the Corporation agrees to exchange shares of
its common stock for all of the outstanding shares of common stock
of STABA and merge STABA into the Corporation, authorized by
resolutions adopted by the Board of Directors on November 15, 1994,
and (b) with the securities agencies or officials of various
jurisdictions, all applications, qualifications, registrations or
exemptions relating to such offering under the laws of any such
jurisdiction, including any amendments thereto or other documents
required to be filed with respect thereto or in connection
therewith, granting unto said agents and attorneys, and each of
them, full power and authority to do and perform each and every act
and thing requisite and necessary to be done in and about the
premises in order to effectuate the same as fully to all intents
and purposes as the undersigned might or could do if personally
present, and the undersigned hereby ratifies and confirms all that
said agents and attorneys-in-fact, or any of them may lawfully do
or cause to be done by virtue hereof.
IN WITNESS WHEREOF, the undersigned has hereunto set his hand
on this 15th day of November, 1994.
S/SIDNEY W. LASSEN
Sidney W. Lassen
Director
HIBERNIA CORPORATION
P0WER OF ATTORNEY
KNOW ALL MEN BY THESE PRESENTS, that the undersigned Vice
Chairman and director of Hibernia Corporation, a Louisiana
corporation (the "Corporation"), does hereby name, constitute and
appoint Robert W. Close, Patricia C. Meringer and Ron E. Samford,
Jr., and each of them (with full power to each of them to act
alone), his true and lawful agents and attorneys-in-fact, for him
and on his behalf and in his name, place and stead, in any and all
capacities, to sign, execute, acknowledge, deliver, and file (a)
with the Securities and Exchange Commission (or any other
governmental or regulatory authority), a Registration Statement on
Form S-4 (or other appropriate form) and any and all amendments
(including post-effective amendments) thereto, with any and all
exhibits and any and all other documents required to be filed with
respect thereto or in connection therewith, relating to the
registration under the Securities Act of 1933 of Common Stock of
the Corporation to be issued in the merger between the Corporation
and STABA Bancshares, Inc. ("STABA") wherein the Corporation agrees
to exchange shares of its common stock for all of the outstanding
shares of common stock of STABA and merge STABA into the
Corporation, authorized by resolutions adopted by the Board of
Directors on November 15, 1994, and (b) with the securities
agencies or officials of various jurisdictions, all applications,
qualifications, registrations or exemptions relating to such
offering under the laws of any such jurisdiction, including any
amendments thereto or other documents required to be filed with
respect thereto or in connection therewith, granting unto said
agents and attorneys, and each of them, full power and authority to
do and perform each and every act and thing requisite and necessary
to be done in and about the premises in order to effectuate the
same as fully to all intents and purposes as the undersigned might
or could do if personally present, and the undersigned hereby
ratifies and confirms all that said agents and attorneys-in-fact,
or any of them may lawfully do or cause to be done by virtue
hereof.
IN WITNESS WHEREOF, the undersigned has hereunto set his hand
on this 15th day of November, 1994.
S/DONALD J. NALTY
Donald J. Nalty
Vice Chairman and Director
HIBERNIA CORPORATION
P0WER OF ATTORNEY
KNOW ALL MEN BY THESE PRESENTS, that the undersigned director
of Hibernia Corporation, a Louisiana corporation (the
"Corporation"), does hereby name, constitute and appoint Robert W.
Close, Patricia C. Meringer and Ron E. Samford, Jr., and each of
them (with full power to each of them to act alone), his true and
lawful agents and attorneys-in-fact, for him and on his behalf and
in his name, place and stead, in any and all capacities, to sign,
execute, acknowledge, deliver, and file (a) with the Securities and
Exchange Commission (or any other governmental or regulatory
authority), a Registration Statement on Form S-4 (or other
appropriate form) and any and all amendments (including post-
effective amendments) thereto, with any and all exhibits and any
and all other documents required to be filed with respect thereto
or in connection therewith, relating to the registration under the
Securities Act of 1933 of Common Stock of the Corporation to be
issued in the merger between the Corporation and STABA Bancshares,
Inc. ("STABA") wherein the Corporation agrees to exchange shares of
its common stock for all of the outstanding shares of common stock
of STABA and merge STABA into the Corporation, authorized by
resolutions adopted by the Board of Directors on November 15, 1994,
and (b) with the securities agencies or officials of various
jurisdictions, all applications, qualifications, registrations or
exemptions relating to such offering under the laws of any such
jurisdiction, including any amendments thereto or other documents
required to be filed with respect thereto or in connection
therewith, granting unto said agents and attorneys, and each of
them, full power and authority to do and perform each and every act
and thing requisite and necessary to be done in and about the
premises in order to effectuate the same as fully to all intents
and purposes as the undersigned might or could do if personally
present, and the undersigned hereby ratifies and confirms all that
said agents and attorneys-in-fact, or any of them may lawfully do
or cause to be done by virtue hereof.
IN WITNESS WHEREOF, the undersigned has hereunto set his hand
on this 15th day of November, 1994.
___________________________________
Robert T. Ratcliff
Director
HIBERNIA CORPORATION
P0WER OF ATTORNEY
KNOW ALL MEN BY THESE PRESENTS, that the undersigned director
of Hibernia Corporation, a Louisiana corporation (the
"Corporation"), does hereby name, constitute and appoint Robert W.
Close, Patricia C. Meringer and Ron E. Samford, Jr., and each of
them (with full power to each of them to act alone), his true and
lawful agents and attorneys-in-fact, for him and on his behalf and
in his name, place and stead, in any and all capacities, to sign,
execute, acknowledge, deliver, and file (a) with the Securities and
Exchange Commission (or any other governmental or regulatory
authority), a Registration Statement on Form S-4 (or other
appropriate form) and any and all amendments (including post-
effective amendments) thereto, with any and all exhibits and any
and all other documents required to be filed with respect thereto
or in connection therewith, relating to the registration under the
Securities Act of 1933 of Common Stock of the Corporation to be
issued in the merger between the Corporation and STABA Bancshares,
Inc. ("STABA") wherein the Corporation agrees to exchange shares of
its common stock for all of the outstanding shares of common stock
of STABA and merge STABA into the Corporation, authorized by
resolutions adopted by the Board of Directors on November 15, 1994,
and (b) with the securities agencies or officials of various
jurisdictions, all applications, qualifications, registrations or
exemptions relating to such offering under the laws of any such
jurisdiction, including any amendments thereto or other documents
required to be filed with respect thereto or in connection
therewith, granting unto said agents and attorneys, and each of
them, full power and authority to do and perform each and every act
and thing requisite and necessary to be done in and about the
premises in order to effectuate the same as fully to all intents
and purposes as the undersigned might or could do if personally
present, and the undersigned hereby ratifies and confirms all that
said agents and attorneys-in-fact, or any of them may lawfully do
or cause to be done by virtue hereof.
IN WITNESS WHEREOF, the undersigned has hereunto set his hand
on this 15th day of November, 1994.
S/H. DUKE SHACKELFORD
H. Duke Shackelford
Director
HIBERNIA CORPORATION
P0WER OF ATTORNEY
KNOW ALL MEN BY THESE PRESENTS, that the undersigned director
of Hibernia Corporation, a Louisiana corporation (the
"Corporation"), does hereby name, constitute and appoint Robert W.
Close, Patricia C. Meringer and Ron E. Samford, Jr., and each of
them (with full power to each of them to act alone), his true and
lawful agents and attorneys-in-fact, for him and on his behalf and
in his name, place and stead, in any and all capacities, to sign,
execute, acknowledge, deliver, and file (a) with the Securities and
Exchange Commission (or any other governmental or regulatory
authority), a Registration Statement on Form S-4 (or other
appropriate form) and any and all amendments (including post-
effective amendments) thereto, with any and all exhibits and any
and all other documents required to be filed with respect thereto
or in connection therewith, relating to the registration under the
Securities Act of 1933 of Common Stock of the Corporation to be
issued in the merger between the Corporation and STABA Bancshares,
Inc. ("STABA") wherein the Corporation agrees to exchange shares of
its common stock for all of the outstanding shares of common stock
of STABA and merge STABA into the Corporation, authorized by
resolutions adopted by the Board of Directors on November 15, 1994,
and (b) with the securities agencies or officials of various
jurisdictions, all applications, qualifications, registrations or
exemptions relating to such offering under the laws of any such
jurisdiction, including any amendments thereto or other documents
required to be filed with respect thereto or in connection
therewith, granting unto said agents and attorneys, and each of
them, full power and authority to do and perform each and every act
and thing requisite and necessary to be done in and about the
premises in order to effectuate the same as fully to all intents
and purposes as the undersigned might or could do if personally
present, and the undersigned hereby ratifies and confirms all that
said agents and attorneys-in-fact, or any of them may lawfully do
or cause to be done by virtue hereof.
IN WITNESS WHEREOF, the undersigned has hereunto set his hand
on this 15th day of November, 1994.
S/JAMES H. STONE
James H. Stone
Director
HIBERNIA CORPORATION
P0WER OF ATTORNEY
KNOW ALL MEN BY THESE PRESENTS, that the undersigned director
of Hibernia Corporation, a Louisiana corporation (the
"Corporation"), does hereby name, constitute and appoint Robert W.
Close, Patricia C. Meringer and Ron E. Samford, Jr., and each of
them (with full power to each of them to act alone), his true and
lawful agents and attorneys-in-fact, for him and on his behalf and
in his name, place and stead, in any and all capacities, to sign,
execute, acknowledge, deliver, and file (a) with the Securities and
Exchange Commission (or any other governmental or regulatory
authority), a Registration Statement on Form S-4 (or other
appropriate form) and any and all amendments (including post-
effective amendments) thereto, with any and all exhibits and any
and all other documents required to be filed with respect thereto
or in connection therewith, relating to the registration under the
Securities Act of 1933 of Common Stock of the Corporation to be
issued in the merger between the Corporation and STABA Bancshares,
Inc. ("STABA") wherein the Corporation agrees to exchange shares of
its common stock for all of the outstanding shares of common stock
of STABA and merge STABA into the Corporation, authorized by
resolutions adopted by the Board of Directors on November 15, 1994,
and (b) with the securities agencies or officials of various
jurisdictions, all applications, qualifications, registrations or
exemptions relating to such offering under the laws of any such
jurisdiction, including any amendments thereto or other documents
required to be filed with respect thereto or in connection
therewith, granting unto said agents and attorneys, and each of
them, full power and authority to do and perform each and every act
and thing requisite and necessary to be done in and about the
premises in order to effectuate the same as fully to all intents
and purposes as the undersigned might or could do if personally
present, and the undersigned hereby ratifies and confirms all that
said agents and attorneys-in-fact, or any of them may lawfully do
or cause to be done by virtue hereof.
IN WITNESS WHEREOF, the undersigned has hereunto set his hand
on this 15th day of November, 1994.
S/VIRGINIA EASON WEINMANN
Virginia Eason Weinmann
Director
HIBERNIA CORPORATION
P0WER OF ATTORNEY
KNOW ALL MEN BY THESE PRESENTS, that the undersigned director
of Hibernia Corporation, a Louisiana corporation (the
"Corporation"), does hereby name, constitute and appoint Robert W.
Close, Patricia C. Meringer and Ron E. Samford, Jr., and each of
them (with full power to each of them to act alone), his true and
lawful agents and attorneys-in-fact, for him and on his behalf and
in his name, place and stead, in any and all capacities, to sign,
execute, acknowledge, deliver, and file (a) with the Securities and
Exchange Commission (or any other governmental or regulatory
authority), a Registration Statement on Form S-4 (or other
appropriate form) and any and all amendments (including post-
effective amendments) thereto, with any and all exhibits and any
and all other documents required to be filed with respect thereto
or in connection therewith, relating to the registration under the
Securities Act of 1933 of Common Stock of the Corporation to be
issued in the merger between the Corporation and STABA Bancshares,
Inc. ("STABA") wherein the Corporation agrees to exchange shares of
its common stock for all of the outstanding shares of common stock
of STABA and merge STABA into the Corporation, authorized by
resolutions adopted by the Board of Directors on November 15, 1994,
and (b) with the securities agencies or officials of various
jurisdictions, all applications, qualifications, registrations or
exemptions relating to such offering under the laws of any such
jurisdiction, including any amendments thereto or other documents
required to be filed with respect thereto or in connection
therewith, granting unto said agents and attorneys, and each of
them, full power and authority to do and perform each and every act
and thing requisite and necessary to be done in and about the
premises in order to effectuate the same as fully to all intents
and purposes as the undersigned might or could do if personally
present, and the undersigned hereby ratifies and confirms all that
said agents and attorneys-in-fact, or any of them may lawfully do
or cause to be done by virtue hereof.
IN WITNESS WHEREOF, the undersigned has hereunto set his hand
on this 15th day of November, 1994.
S/ERNEST L. WILLIAMSON
Ernest L. Williamson
Director
HIBERNIA CORPORATION
P0WER OF ATTORNEY
KNOW ALL MEN BY THESE PRESENTS, that the undersigned director
of Hibernia Corporation, a Louisiana corporation (the
"Corporation"), does hereby name, constitute and appoint Robert W.
Close, Patricia C. Meringer and Ron E. Samford, Jr., and each of
them (with full power to each of them to act alone), his true and
lawful agents and attorneys-in-fact, for him and on his behalf and
in his name, place and stead, in any and all capacities, to sign,
execute, acknowledge, deliver, and file (a) with the Securities and
Exchange Commission (or any other governmental or regulatory
authority), a Registration Statement on Form S-4 (or other
appropriate form) and any and all amendments (including post-
effective amendments) thereto, with any and all exhibits and any
and all other documents required to be filed with respect thereto
or in connection therewith, relating to the registration under the
Securities Act of 1933 of Common Stock of the Corporation to be
issued in the merger between the Corporation and STABA Bancshares,
Inc. ("STABA") wherein the Corporation agrees to exchange shares of
its common stock for all of the outstanding shares of common stock
of STABA and merge STABA into the Corporation, authorized by
resolutions adopted by the Board of Directors on November 15, 1994,
and (b) with the securities agencies or officials of various
jurisdictions, all applications, qualifications, registrations or
exemptions relating to such offering under the laws of any such
jurisdiction, including any amendments thereto or other documents
required to be filed with respect thereto or in connection
therewith, granting unto said agents and attorneys, and each of
them, full power and authority to do and perform each and every act
and thing requisite and necessary to be done in and about the
premises in order to effectuate the same as fully to all intents
and purposes as the undersigned might or could do if personally
present, and the undersigned hereby ratifies and confirms all that
said agents and attorneys-in-fact, or any of them may lawfully do
or cause to be done by virtue hereof.
IN WITNESS WHEREOF, the undersigned has hereunto set his hand
on this 15th day of November, 1994.
S/ROBERT E. ZETAMANN
Robert E. Zetzmann
Director
HIBERNIA CORPORATION
P0WER OF ATTORNEY
KNOW ALL MEN BY THESE PRESENTS, that the undersigned
Controller of Hibernia Corporation, a Louisiana corporation (the
"Corporation"), does hereby name, constitute and appoint Robert W.
Close, Patricia C. Meringer and Ron E. Samford, Jr., and each of
them (with full power to each of them to act alone), his true and
lawful agents and attorneys-in-fact, for him and on his behalf and
in his name, place and stead, in any and all capacities, to sign,
execute, acknowledge, deliver, and file (a) with the Securities and
Exchange Commission (or any other governmental or regulatory
authority), a Registration Statement on Form S-4 (or other
appropriate form) and any and all amendments (including post-
effective amendments) thereto, with any and all exhibits and any
and all other documents required to be filed with respect thereto
or in connection therewith, relating to the registration under the
Securities Act of 1933 of Common Stock of the Corporation to be
issued in the merger between the Corporation and STABA Bancshares,
Inc. ("STABA") wherein the Corporation agrees to exchange shares of
its common stock for all of the outstanding shares of common stock
of STABA and merge STABA into the Corporation, authorized by
resolutions adopted by the Board of Directors on November 15, 1994,
and (b) with the securities agencies or officials of various
jurisdictions, all applications, qualifications, registrations or
exemptions relating to such offering under the laws of any such
jurisdiction, including any amendments thereto or other documents
required to be filed with respect thereto or in connection
therewith, granting unto said agents and attorneys, and each of
them, full power and authority to do and perform each and every act
and thing requisite and necessary to be done in and about the
premises in order to effectuate the same as fully to all intents
and purposes as the undersigned might or could do if personally
present, and the undersigned hereby ratifies and confirms all that
said agents and attorneys-in-fact, or any of them may lawfully do
or cause to be done by virtue hereof.
IN WITNESS WHEREOF, the undersigned has hereunto set his hand
on this 15th day of November, 1994.
S/RON E. SAMFORD, JR.
Ron E. Samford, Jr.
Controller
HIBERNIA CORPORATION
P0WER OF ATTORNEY
KNOW ALL MEN BY THESE PRESENTS, that the undersigned Treasurer
and Chief Financial Officer of Hibernia Corporation, a Louisiana
corporation (the "Corporation"), does hereby name, constitute and
appoint Robert W. Close, Patricia C. Meringer and Ron E. Samford,
Jr., and each of them (with full power to each of them to act
alone), his true and lawful agents and attorneys-in-fact, for him
and on his behalf and in his name, place and stead, in any and all
capacities, to sign, execute, acknowledge, deliver, and file (a)
with the Securities and Exchange Commission (or any other
governmental or regulatory authority), a Registration Statement on
Form S-4 (or other appropriate form) and any and all amendments
(including post-effective amendments) thereto, with any and all
exhibits and any and all other documents required to be filed with
respect thereto or in connection therewith, relating to the
registration under the Securities Act of 1933 of Common Stock of
the Corporation to be issued in the merger between the Corporation
and STABA Bancshares, Inc. ("STABA") wherein the Corporation agrees
to exchange shares of its common stock for all of the outstanding
shares of common stock of STABA and merge STABA into the
Corporation, authorized by resolutions adopted by the Board of
Directors on November 15, 1994, and (b) with the securities
agencies or officials of various jurisdictions, all applications,
qualifications, registrations or exemptions relating to such
offering under the laws of any such jurisdiction, including any
amendments thereto or other documents required to be filed with
respect thereto or in connection therewith, granting unto said
agents and attorneys, and each of them, full power and authority to
do and perform each and every act and thing requisite and necessary
to be done in and about the premises in order to effectuate the
same as fully to all intents and purposes as the undersigned might
or could do if personally present, and the undersigned hereby
ratifies and confirms all that said agents and attorneys-in-fact,
or any of them may lawfully do or cause to be done by virtue
hereof.
IN WITNESS WHEREOF, the undersigned has hereunto set his hand
on this 15th day of November, 1994.
S/ROBERT W. CLOSE
Robert W. Close
Treasurer and Chief Financial Officer
HIBERNIA CORPORATION
