SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
FORM 8-K
CURRENT REPORT
Pursuant to Section 13 or 15(d) of the
Securities Exchange Act of 1934
Date of Report (Date of earliest event reported) August 29, 1996
(August 26, 1996)
Hibernia Corporation
(Exact name of issuer as specified in its charter)
Louisiana 1-10294 72-0724532
(State or other (Commission (IRS Employer
jurisdiction of File Number) Identification No.)
organization)
313 Carondelet Street, New Orleans, Louisiana 70130
(Address of principal executive offices) (Zip Code)
Registrant's telephone number, including area code (504)533-5332
<PAGE>
Item 2. Acquisition of Assets
- ------------------------------------------
On August 26, 1996, Hibernia Corporation (Hibernia)
consummated the transaction contemplated by the Agreement
and Plan of Merger of CM Bank Holding Company (Calcasieu)
with and into Hibernia Corporation dated as of April 2,
1996, (the Merger Agreement) by the merger of Calcasieu into
Hibernia (the Merger). The Merger Agreement provides that
in the Merger each share of Calcasieu Class A Common Stock
issued and outstanding immediately prior to the effective
date of the Merger shall be converted into the right to
receive cash from Hibernia in the amount of $193.5245990 per
share, and each share of Calcasieu Class B Common Stock
shall be converted into the right to receive cash from
Hibernia in the amount of $96.76229999 per share. The total
consideration issued to Calcasieu shareholders was
approximately $201,686,000. The funding of the purchase
price was obtained primarily through the sales of investment
securities. On June 30, 1996, Calcasieu had total loans of
approximately $362 million, total deposits of approximately $618
million and total assets of approximately $779 million.
The transaction will be accounted for using the
purchase method of accounting.
Item 7. Financial Statements and Exhibits
- -------------------------------------------------------
Listed below are the financial statements, pro forma
financial information and exhibits, filed as part of this
report.
(A) Audited Financial Statements of CM Bank Holding
Company for the fiscal year ended December 31,
1995.
(B) Pro Forma Financial Information:
Unaudited Pro Forma Combined Balance Sheet as of
June 30, 1996.
Unaudited Pro Forma Combined Income Statements for
the six months ended June 30, 1996 and the year
ended December 31, 1995.
(C) Exhibits:
Agreement and Plan of Merger of CM Bank Holding
Company with and into Hibernia Corporation (Exhibit
No. 2)
Consent of Leon C. Theriot & Associates (Exhibit
No. 23)
Hibernia News Release dated August 26, 1996,
announcing the merger between Calcasieu and
Hibernia (Exhibit No. 99)
<PAGE>
CM BANK HOLDING COMPANY AND SUBSIDIARY
CONSOLIDATED FINANCIAL STATEMENTS
Years Ended December 31, 1995 and 1994
<PAGE>
Independent Auditors' Report
Board of Directors
CM Bank Holding Company and Subsidiary
We have audited the accompanying consolidated balance sheets of CM
Bank Holding Company (a Louisiana corporation) and Subsidiary as of
December 31, 1995 and 1994, and the related consolidated statements
of income, changes in stockholders' equity, and cash flows for the
years then ended. 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 our audits provide a reasonable
basis for our opinion.
As discussed in Note P to the financial statements, an error was
discovered in the recording of certain employee retirement benefit
expenses which resulted in net income being overstated in prior
years. Accordingly, beginning retained earnings for 1994 has been
restated.
In our opinion, the financial statements referred to above present
fairly, in all material respects, the consolidated financial position
of CM Bank Holding Company and Subsidiary as of December 31, 1995 and
1994, and the consolidated results of their operations and their cash
flows for the years then ended, in conformity with generally accepted
accounting principles.
/s/ Leon C. Theriot & Associates
Lake Charles, Louisiana
February 2, 1996
<PAGE>
CM Bank Holding Company and Subsidiary
CONSOLIDATED BALANCE SHEETS
<TABLE>
ASSETS
December 31, 1995 1994
---- ----
(amounts in thousands)
--------------------
<S> <C> <C>
Cash and due from banks (note B) $ 49,253 $ 61,617
Federal funds sold 12,400 1,300
Securities (notes A2 and C) 302,148 408,417
Loans, net of allowance for possible
credit losses of $2,739,000 in 1995 and
$3,619,000 in 1994 (notes A3, A4, D
and J) 344,712 313,757
Premises and equipment - net (notes A6
and E) 52,790 52,249
Accrued interest receivable 5,842 5,850
Other real estate owned (note A5) 1,025 3,320
Other assets 6,018 6,420
------- -------
Total assets $ 774,188 $ 852,930
======= =======
LIABILITIES
Deposits
Demand $ 169,151 $ 163,077
Savings and NOW accounts 144,542 119,799
Other time deposits 293,949 338,308
------- -------
Total deposits 607,642 621,184
Federal funds purchased and securities
sold under repurchase agreements (note C) 40,227 75,335
Accrued expenses and other liabilities 13,310 7,865
Long-term debt (note F) 1,422 52,121
------- -------
Total liabilities 662,601 756,505
Commitments and contingencies (notes I and J) - -
STOCKHOLDERS' EQUITY
Common stock
Class A - $10 par value; 5,000,000 shares
authorized; 259,430 shares issued 2,594 2,594
Class B - $5 par value; 1,581,140 shares
authorized, issued and outstanding 7,906 7,906
Capital surplus 10,500 10,500
Retained earnings (note L) 90,089 84,169
Net unrealized appreciation (depreciation)
on available-for-sale securities, net of
tax (benefit) of $260,000 in 1995 and
($4,498,000) in 1994 506 (8,736)
Class A common stock in treasury, at cost;
7,825 shares (8) (8)
------- -------
Total stockholders' equity 111,587 96,425
------- -------
Total liabilities and
stockholders' equity $ 774,188 $ 852,930
======= =======
</TABLE>
See notes to consolidated financial statements.
<PAGE>
CM Bank Holding Company and Subsidiary
CONSOLIDATED STATEMENTS OF INCOME
For the years ended December 31,
1995 1994
---- ----
(amounts in thousands)
--------------------
(except per share)
----------------
<TABLE>
<S> <C> <C>
Interest income
Loans, including fees $ 31,523 $ 28,347
Securities available for sale 20,546 19,582
Securities to be held to maturity 2,129 1,504
Federal funds sold 283 714
Deposits with banks 11 66
------- -------
Total interest income 54,492 50,213
Interest expense
Deposits 15,423 13,698
Federal funds purchased and securities
sold under repurchase agreements 2,276 1,288
Long-term debt 1,661 355
------ ------
Total interest expense 19,360 15,341
------ ------
NET INTEREST INCOME 35,132 34,872
Provision for credit losses (notes A4 and D) 200 (660)
------ ------
Net interest income after
provision for credit losses 34,932 35,532
Other income
Service charges on deposit accounts 6,642 6,666
Other service charges and fees 1,330 1,452
Income from fiduciary activities 740 727
Other income 290 195
Gain on sale of securities 2,080 -
------ ------
Total other income 11,082 9,040
Other expenses
Salaries and employee benefits (note H) 13,058 13,038
Occupancy expenses (notes A6 and E) 2,538 2,718
Equipment expense (notes A6 and E) 2,453 2,081
Other operating expenses 9,766 10,476
------ ------
Total other expenses 27,815 28,313
------ ------
Income before income taxes 18,199 16,259
Income tax provision
(notes A7 and G) 6,026 4,997
------ ------
NET INCOME $ 12,173 $ 11,262
====== ======
PER SHARE AMOUNTS:
Net income per common share (note A10)
Class A $ 11.68 $ 10.80
===== =====
Class B $ 5.84 $ 5.40
===== =====
</TABLE>
See notes to consolidated financial statements.
<PAGE>
CM Bank Holding Company and Subsidiary
CONSOLIDATED STATEMENTS OF CHANGES IN STOCKHOLDERS' EQUITY
For the years ended December 31, 1995 and 1994
(amounts in thousands, except shares)
<TABLE>
Common Stock Treasury Stock
-----------------------------------------------------------
Class A Class B Class A
------- ------- -------- Capital
Shares Par Value Shares Par Value Shares At Cost Surplus
------ --------- ------ --------- ------ ------- -------
<S> <C> <C> <C> <C> <C> <C> <C>
Balance at December 31, 1993,
as previously reported 259,430 $ 2,594 1,581,140 $ 7,906 7,825 $ (8) $ 10,500
Prior period adjustment for
certain employee retirement
benefit expenses (note P) - - - - - - -
------- ----- --------- ----- ----- ---- ------
Balance at December 31, 1993,
as restated 259,430 2,594 1,581,140 7,906 7,825 (8) 10,500
Effect of change of accounting
principle, net of tax of $1,836
at January 1, 1994 (note A2) - - - - - - -
Net income for 1994 - - - - - - -
Cash dividends declared - - - - - - -
Net changes in unrealized
depreciation on securities
available for sale, net
of tax of $6,149 - - - - - - -
------- ----- --------- ----- ----- ---- ------
Balance at December 31, 1994 259,430 2,594 1,581,140 7,906 7,825 (8) 10,500
Net income for 1995 - - - - - - -
Cash dividends declared - - - - - - -
Net changes in unrealized
appreciation on securities
available for sale, net of
tax of $4,758 - - - - - - -
------- ----- --------- ----- ----- ---- ------
Balance at December 31, 1995 259,430 $ 2,594 1,581,140 $ 7,906 7,825 $ (8) $ 10,500
======= ===== ========= ===== ===== ==== ======
</TABLE>
See notes to consolidated financial statements.
Net Unrealized
Appreciation
(Depreciation)
On Available-
Retained For-Sale
Earnings Securities Total
-------- ---------- -----
<TABLE>
<S> <C> <C> <C>
Balance at December 31, 1993
as previously reported $ 79,905 $ - $ 100,897
Prior period adjustment for
certain employee retirement
benefit expenses (note P) (749) - (749)
------ ----- -------
Balance at December 31, 1993,
as restated 79,156 - 100,148
Effect of change of accounting
principle, net of tax of $1,836
at January 1, 1994 (note A2) - 3,564 3,564
Net income for 1994 11,262 - 11,262
Cash dividends declared (6,249) - (6,249)
Net changes in unrealized
depreciation on securities
available for sale, net
of tax of $6,149 - (12,300) (12,300)
------- ------ ------
Balance at December 31, 1994 84,169 (8,736) 96,425
Net income for 1995 12,173 - 12,173
Cash dividends declared (6,253) - (6,253)
Net changes in unrealized
appreciation on securities
available for sale, net of
tax of $4,758 - 9,242 9,242
------ ------ -------
Balance at December 31, 1995 $90,089 $ 506 $111,587
====== ====== =======
</TABLE>
See notes to consolidated financial statements.
<PAGE>
CM Bank Holding Company and Subsidiary
CONSOLIDATED STATEMENTS OF CASH FLOWS
For the years ended December 31, 1995 1994
---- ----
(amounts in thousands)
--------------------
<TABLE>
Increase (Decrease) in Cash and Cash
Equivalents (note A10)
<S> <C> <C>
Cash flows from operating activities
Net income $ 12,173 $ 11,262
Adjustments to reconcile net income to net
cash provided by operating activities
Depreciation 3,778 3,155
Provision for credit losses 200 (660)
Loss (gain on sales of other real
estate owned (336) (262)
Loss (gain) on sales of premises
and equipment (2) 39
Gain on sales of securities (2,080) -
Net amortization of investment
security premium 713 423
Decrease (increase) in accrued interest
receivable 7 (1,056)
Decrease (increase) in other assets 401 (1,947)
Increase in other liabilities 3,884 1,112
------ ------
Total adjustments 6,565 804
------ ------
Net cash provided by operating
activities 18,738 12,066
Cash flows from investing activities
Net (increase) decrease in federal funds
sold (11,100) 68,200
Purchases of securities (53,947) (167,232)
Proceeds from prepayments and maturities
of securities 170,825 93,463
Net increase in loans (31,262) (6,934)
Net purchases of premises and equipment (4,317) (7,932)
Proceeds from sale of other real estate 2,738 2,509
------ ------
Net cash provided (used) by
investing activities 72,937 (17,926)
Cash flows from financing activities
Net increase (decrease) in deposits
Demand $ 6,074 $ 9,333
Savings and NOW accounts 24,743 (16,052)
Other time (44,359) (34,075)
Net increase (decrease) in federal funds
purchased and securities sold under
repurchase agreements (35,108) 20,660
Dividends paid (4,690) (5,468)
Proceeds from long-term debt 1,000 52,121
Payments on long-term debt (51,699) -
------ ------
Net cash provided (used) by
financing activities (104,039) 26,519
------- -------
Increase (decrease) in cash
and due from banks (12,364) 20,659
Cash and due from banks at beginning of
year 61,617 40,958
------- -------
Cash and due from banks at end of year $ 49,253 $ 61,617
======= =======
Supplemental disclosures
Cash paid during the year for interest on
deposits $ 15,542 $ 13,585
======= =======
Noncash investing activities - reduction
in loans resulting from the transfer of
related collateral to other real estate $ 107 $ 216
====== ======
Noncash financing activities - dividends
declared but not paid in the current year $ 1,563 $ 781
====== ======
</TABLE>
See notes to consolidated financial statements.
<PAGE>
CM Bank Holding Company and Subsidiary
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
December 31, 1995 and 1994
NOTE A - NATURE OF OPERATIONS AND SIGNIFICANT ACCOUNTING POLICIES
The principal business of CM Bank Holding Company is to provide,
through it bank subsidiary, comprehensive corporate and individual
banking services, and personal and corporate trust services through its
network of branches located throughout Southwest Louisiana. The Bank's
primary source of revenue is providing loans to customers who are
predominantly small and middle-market businesses and agricultural, home
mortgage and consumer loans.
The preparation of financial statements in conformity with generally
accepted accounting principles requires management to make estimates
and assumptions that affect the reported amounts of assets and
liabilities and disclosure of contingent assets and liabilities at the
date of the financial statements and the reported amounts of revenues
and expenses during the reporting period. Actual results could differ
from those estimates.
A summary of the significant accounting policies of CM Bank Holding
Company applied in the preparation of the accompanying consolidated
financial statements follows:
1. Principles of Consolidation
The accompanying consolidated financial statements include the accounts
of CM Bank Holding Company (the Holding Company), a one-bank holding
company, and its wholly-owned subsidiary, Calcasieu Marine National
Bank (the Bank). All significant intercompany accounts and
transactions have been eliminated in consolidation. The accounting and
reporting policies of the Holding Company and the Bank conform to
generally accepted accounting principles and prevailing practices
within the banking industry.
2. Securities
At January 1, 1994 the Bank adopted Statement of Financial Accounting
Standards (SFAS) No. 115, "Accounting for Certain Investments in Debt
and Equity Securities." SFAS No. 115 requires the classification of
securities into three categories accounted for as follows:
a. Trading Securities
Debt securities held principally for resale in the near term
are classified as trading account securities and recorded at
their fair values. Unrealized gains and losses on trading
account securities are included in current period in other income.
b. Securities Held to Maturity
Debt securities for which the Bank has the positive intent and
ability to hold to maturity are reported at cost, adjusted for
premiums and discounts.
c. Securities Available for Sale
Available-for-sale securities consist of all other securities
not classified as trading securities nor as held-to-maturity
securities.
Unrealized holding gains and losses, net of tax, on available-
for-sale securities are reported as a net amount in a separate
component of stockholders' equity until realized.
Gains and losses on the sale of available-for-sale securities
are determined using the specific-identification method.
Declines in the fair value of individual held-to-maturity and
available-for-sale securities below their cost that are other
than temporary could result in write-downs of the individual
securities to their fair value. The related write-downs, if any,
would be included in earnings as realized losses.
Premiums and discounts are recognized in interest income using the interest
method over the period to maturity.
3. Loans
Loans are reported at the amount of unpaid principal reduced by unearned
discount and an allowance for possible credit losses. Unearned
discount on installment loans is recognized as income over the terms of
the loans using the sum-of-the-periodic balance method, which
approximates interest earned under the level yield method. Interest on
other loans is calculated using the simple interest method on daily
balances of the principal amount outstanding.
Loans on which the accrual of interest has been discontinued are
designated as nonaccrual loans. Accrual of interest on loans is
generally discontinued either when reasonable doubt exists as to the
full collection of interest or principal or when a loan becomes
contractually past due by ninety days or more and the loan is not in
the process of collection. When a loan is placed on nonaccrual status,
all interest previously accrued but not collected in the current period
is reversed against current period interest income if management
determines the accrued interest is uncollectible. Interest previously
accrued but not collected in the prior period is charged against the
allowance for possible credit losses if management determines the
accrued interest is uncollectible. Income on such loans is then
recognized only to the extent that cash is received and where the
future collection of principal is probable. Interest accruals are
resumed on such loans only when they are brought fully current with
respect to interest and principal and when, in the judgment of
management, the loans are estimated to be fully collectible as to both
principal and interest.
Renegotiated loans are those loans on which concessions in terms have been
granted because of a borrower's financial difficulty. Interest is
generally accrued on such loans in accordance with the new terms.
4. Allowance for Possible Credit Losses
The allowance for possible credit losses is established through a
provision for credit losses charged to expense offset by loan
recoveries realized. Loans and related accrued interest are charged
against the allowance for possible credit losses when management
believes that the collectibility of the principal and interest is
unlikely. The allowance is an amount that management believes will be
adequate to absorb possible losses on existing loans and commitments to
extend credit, based on evaluations of the collectibility and prior
loss experience of loans and commitments to extend credit. The
evaluations take into consideration such factors as changes in the
nature and volume of the credit portfolio, overall portfolio quality,
loan concentrations, specific problem loans, commitments, and current
and anticipated economic conditions that may affect a borrower's
ability to pay. Effective January 1, 1995, the Bank implemented
Financial Accounting Standard #114, "Accounting by Creditors for
Impairment of a Loan," which had no appreciable effect on the financial
statements.
5. Other Real Estate Owned
Real estate acquired through partial or total satisfaction of loans or for
which the foreclosure process is substantially complete is carried at
the lower of the recorded investment in the property or its fair value,
less estimated selling costs. Prior to foreclosure, the value of the
underlying loan is written down to the fair value of the real estate to
be acquired by a charge to the allowance for possible credit losses, if
necessary. Any subsequent write-downs are charged against operating
expense. The maintenance of such properties and gains and losses on
their disposition are included in other expenses. If such properties
produce income, then the net cash receipts are recorded as period
income; otherwise, the net cash payments are treated as holding losses.
Depreciation is accrued on income-producing properties. Sales of other
real estate owned are recorded under the full accrual method when
minimum downpayment criteria are met. Otherwise sales are deferred and
payments are applied toward the minimum downpayment requirement.
6. Premises and Equipment
Premises and equipment are stated at cost, less accumulated depreciation,
computed principally on the straight-line method over the estimated
useful lives of the assets. Leasehold improvements, for which the Bank
is lessor, are amortized on the straight-line method over the estimated
useful lives of the improvements. Maintenance, repairs and minor
replacements and betterments of property and equipment are expensed in
the year incurred. Major expenditures for replacements and betterments
are capitalized and depreciated over their estimated useful lives. On
disposal or retirement, the related cost and accumulated depreciation
are eliminated from the accounts, and gain or loss on the transaction
is recognized.
7. Income Taxes
Deferred tax assets and liabilities are reflected at currently enacted tax
rates applicable to the period in which the deferred tax assets or
liabilities are expected to be realized or settled. As changes in tax
laws or rates are enacted, deferred tax assets and liabilities are
adjusted through the provision for income taxes. The principal
differences relate to depreciation of premises and equipment, the
provision for credit losses and the valuation of securities.
8. Trust Department
Trust department assets held by the Bank in fiduciary or agency capacities
for its customers are not included in the accompanying balance sheets
since such items are not assets of the Bank.
9. Income Per Common Share
Income per common share is calculated by dividing prorata net income for
each class by the weighted average number of common shares outstanding
for each class during the year.
10. Cash and Cash Equivalents
For the purpose of presentation in the consolidated statements of cash
flows, cash and cash equivalents are defined as those amounts included
in the balance sheet caption "Cash and Due from Banks."
NOTE B - RESTRICTED CASH BALANCES
Aggregate reserves (in the form of deposits with the Federal Reserve Bank)
of $3,936,000 were maintained to satisfy federal regulatory
requirements at December 31, 1995.
NOTE C - SECURITIES
Securities consist of the following at December 31:
1995 1994
---- ----
(amounts in thousands)
--------------------
<TABLE>
<S> <C> <C>
Available for sale $ 290,608 $ 374,694
Held to maturity 11,540 33,723
------- -------
$ 302,148 $ 408,417
======= =======
</TABLE>
Securities have been classified in the consolidated balance sheet
according to management's intent. The carrying amount of securities
and their appropriate market values at December 31 were as follows:
Gross Gross
Amortized Unrealized Unrealized Market
Cost Gain Loss Value
---- ---- ---- -----
(amounts in thousands)
--------------------
<TABLE>
<S> <C> <C> <C> <C>
Available-for-Sale Securities
December 31, 1995
Equity securities $ 9,509 $ - $ - $ 9,509
U.S. Government and agency
securities 276,567 2,368 1,790 277,145
Collateralized mortgage
obligations 3,765 189 - 3,954
------- ----- ----- -------
$ 289,841 $ 2,557 $ 1,790 $ 290,608
======= ===== ===== =======
Held-to-Maturity Securities
December 31, 1995
U.S. Government agency
securities $ 5,000 $ 47 $ - $ 5,047
State and municipal
securities 6,540 75 23 6,592
------ ----- ----- ------
$ 11,540 $ 122 $ 23 $ 11,639
====== ===== ===== ======
Available-for-Sale Securities
December 31, 1994
Equity securities $ 9,029 $ - $ - $ 9,029
U.S. Government and agency
securities 373,009 162 13,316 359,855
Collateralized mortgage
obligations 5,705 137 32 5,810
------- ----- ------ -------
$ 387,743 $ 299 $ 13,348 $ 374,694
======= ===== ====== =======
Held-to-Maturity Securities
December 31, 1994
U.S. Government agency
securities $ 30,000 $ - $ 1,225 $ 28,775
State and municipal
securities 3,723 12 169 3,566
------ ----- ----- ------
$ 33,723 $ 12 $ 1,394 $ 32,341
====== ===== ===== ======
</TABLE>
Gross realized gains on sales of securities were $2,080,000 in 1995 with
no sales in 1994.
The scheduled maturities of securities held to maturity and securities
available for sale at December 31, 1995, were as follows:
Held-to-Maturity Available-for-Sale
Securities Securities
---------- ----------
Amortized Fair Amortized Fair
Cost Value Cost Value
---- ----- ---- -----
(amounts in thousands)
--------------------
<TABLE>
<S> <C> <C> <C> <C>
Due in one year or less $ 200 $ 201 $ 54,999 $ 55,098
Due from one year to five years 1,706 1,726 68,228 67,530
Due from five to ten years 8,363 8,441 15,037 15,326
Due after ten years 1,271 1,271 147,812 148,700
Collateralized mortgage
obligations - - 3,765 3,954
------ ------ ------- -------
$ 11,540 $ 11,639 $ 289,841 $ 290,608
====== ====== ======= =======
</TABLE>
Investment securities with carrying amounts (which approximates market
value) of $213,605,000 at December 31, 1995, were pledged to secure
public and trust deposits or sold to customers under repurchase
agreements and for other purposes required or permitted by law.
NOTE D - LOANS
Major Categories of Loans
Major categories of loans were as follows at December 31:
1995 1994
---- ----
(amounts in thousands)
--------------------
<TABLE>
<S> <C> <C>
Commercial and industrial $ 117,182 $ 100,632
Real estate 126,225 116,961
Agricultural 16,024 15,561
Loans to individuals 88,291 84,663
------- -------
347,722 317,817
Unearned income (271) (441)
------- -------
347,451 317,376
Allowance for possible credit losses (2,739) (3,619)
------- -------
Loans - net $ 344,712 $ 313,757
======= =======
</TABLE>
Certain agricultural and commercial loans are secured by real estate and
are classified as real estate loans.
Allowance for Possible Credit Losses
Changes in the allowance for possible credit losses were as follows:
1995 1994
---- ----
(amounts in thousands)
--------------------
<TABLE>
<S> <C> <C>
Balance at beginning of year $ 3,619 $ 4,895
Provision charged (credited) to
operations 200 (660)
Loans charged off (1,789) (1,090)
Recoveries 709 474
----- -----
Balance at end of year $ 2,739 $ 3,619
===== =====
</TABLE>
NOTE E - PREMISES AND EQUIPMENT
Premises and equipment were as follows at December 31:
Estimated
1995 1994 Useful Lives
---- ---- ------------
(amounts in thousands) (years)
-------------------- -----
<TABLE>
<S> <C> <C> <C>
Land $ 4,569 $ 4,502 -
Buildings and improvements 66,179 64,352 20-40
Construction in progress 945 538 -
Furniture and equipment 26,971 26,007 3-20
------ ------
98,664 95,399
Accumulated depreciation (45,874) (43,150)
------ ------
Premises and
equipment - net $ 52,790 $ 52,249
====== ======
</TABLE>
Depreciation expense was $3,778,000 in 1995 and $3,155,000 in 1994.
Occupancy expenses are net of rental income of $1,937,000 in 1995 and
$1,418,000 in 1994.
NOTE F - LONG-TERM DEBT
Long-term debt consisted of the following advances from Federal Home Loan
Bank of Dallas at December 31:
1995 1994
---- ----
(amounts in thousands)
--------------------
<TABLE>
<S> <C> <C>
5.43% advance due 2004 $ 431 $ 471
5.899% advance due 2005 500 -
8.36% advance due 2015 491 -
Floating rate advance due 2001 - 51,650
----- ------
$ 1,422 $ 52,121
===== ======
</TABLE>
The 5.43 percent advance is payable in monthly amortized payments of
principal and interest, which total approximately $65,000 per year,
with a balance due at maturity of $184,000.
The 5.899 and 8.36 percent advances are payable in monthly amortized
payments of principal and interest over the life of the
advance.
Aggregate maturities required on long-term debt for years beginning after
December 31, 1995 are as follows:
<TABLE>
<S> <C>
1996 $ 91,000
1997 97,000
1998 103,000
1999 109,000
2000 116,000
Thereafter 906,000
---------
$ 1,422,000
=========
</TABLE>
NOTE G - INCOME TAXES
The provision for income taxes reflected in the statements of income for
years ended December 31, consists of the following:
1995 1994
---- ----
(amounts in thousands)
--------------------
<TABLE>
<S> <C> <C>
Currently payable $ 4,921 $ 3,667
Deferred 1,105 1,330
----- -----
Income tax provision $ 6,026 $ 4,997
===== =====
</TABLE>
The following is a summary of the differences between the income tax
provision as shown in the financial statements, for the years ended
December 31, 1995 and 1994, and the income tax expense that would
result from applying the statutory tax rate of 35% in 1995 and 1994:
1995 1994
---- ----
(amounts in thousands)
--------------------
<TABLE>
<S> <C> <C>
Income tax expense on earnings before
income taxes at the statutory rate $ 6,187 $ 5,692
Increase (decrease) in taxes
resulting from:
Tax-exempt interest (349) (357)
Nondeductible interest 29 24
Other 159 7
Utilization of rehabilitation tax credit - (327)
Utilization of alternative minimum tax
credit - (42)
----- -----
Income tax provision $ 6,026 $ 4,997
===== =====
</TABLE>
The components of the deferred income tax liability included in other
liabilities are as follows:
1995 1994
---- ----
(amounts in thousands)
--------------------
<TABLE>
<S> <C> <C>
Deferred tax asset:
Federal $ 1,952 $ 6,958
Deferred tax liability:
Federal (8,891) (8,190)
----- -----
Net deferred tax liability $(6,939) $(1,232)
===== =====
</TABLE>
The tax effects of each type of significant item that gave rise to
deferred taxes are:
1995 1994
---- ----
(amounts in thousands)
--------------------
<TABLE>
<S> <C> <C>
Allowance for credit losses $ 932 $ 1,230
Premises, equipment and other real estate
owned basis differences (1,119) (841)
Depreciation (7,101) (6,750)
Health insurance reserve 85 340
Net unrealized depreciation (appreciation)
on securities held available for sale (260) 4,500
Other 524 289
----- -----
Net deferred tax liability $(6,939) $(1,232)
===== =====
</TABLE>
NOTE H - EMPLOYEE BENEFIT PLANS
The Bank had a target benefit pension plan covering substantially all
employees prior to April 1, 1994, at which time this plan was converted
to a defined contribution plan under Section 401(k) of the Internal
Revenue Code, named the Calcasieu Marine National Bank 401(k) Savings
Plan. Substantially all employees who have attained age 21 are
eligible to participate in the 401(k) plan. Under this plan, employees
can contribute a portion of their regular compensation up to the
maximum allowable by law with the Bank making a discretionary
contribution based on each participating employee's contribution. The
Bank may also make a discretionary profit-sharing contribution to the
plan as of the last day of the plan year. The Bank's contribution to
the plans totaled $346,000 in 1995 and $373,000 in 1994.
The Bank provides certain healthcare and life insurance benefits for
retired employees. These postretirement benefits are accounted for by
accruing the actuarially determined costs ratably to the date an
employee becomes eligible for such benefits.
The accumulated postretirement benefit obligation was determined using the
terms of the plans, together with relevant actuarial assumptions and
healthcare cost trend rates projected at annual rates ranging from 13%
in 1995 to 6% through the year 2004 and a discount rate of 7%. A one
percent annual increase in these assumed cost trend rates would
increase the accumulated postretirement benefit obligation by
approximately $439,418 and annual service cost by approximately
$37,509.
The net periodic postretirement cost is comprised of the following at
December 31:
<TABLE>
1995 1994
---- ----
<S> <C> <C>
Service cost $ 31,372 $ 25,652
Interest cost 177,014 172,980
Amortization of transitional amount 99,325 100,333
------- -------
Net periodic postretirement
benefit cost $ 307,711 $ 298,965
======= =======
</TABLE>
The Company's accumulated postretirement benefit obligation as of
December 31, 1995 is $2,746,366 and is not funded.
NOTE I - COMMITMENTS AND CONTINGENCIES
The Bank's 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, 1995, is as follows:
Commitments to extend credit $ 72,586,000
Credit card arrangements $ 65,000
Standby letters of credit $ 4,979,000
Commitments to extend credit, credit card arrangements, commercial letters
of credit and standby letters of credit all 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 statements of condition.
Management does not anticipate any material losses as a result of these
commitments and contingent liabilities. The Bank is a defendant in
certain litigation, or other legal matters, arising in the ordinary
course of business. In the opinion of management and the Bank's legal
counsel, there is no reasonable probability that any substantial
judgment will be rendered against the Bank and ultimate resolution of
these matters will, therefore, have no material effect on the Bank's
financial statements.
The Bank leases various equipment and property under operating leases.
Total rental expense was $67,000 and $71,000 in 1995 and 1994,
respectively.
NOTE J - RELATED PARTY TRANSACTIONS
In the ordinary course of business, the Bank makes loans to its officers
and directors and expects to continue making such loans in the future.
These loans are made on substantially the same terms, including
interest rates and collateral, as those prevailing at the time for
comparable transactions with unrelated persons, and do not involve more
than normal risk of collectibility.
Bank officers, directors, and their related companies were indebted to the
Bank in the aggregate amount of $4,021,000 and $5,026,000 at December
31, 1995 and 1994, respectively. Certain of these related parties had
been granted lines of credit with the Bank by the Board of Directors in
the aggregate amount of $250,000 at December 31, 1995.
NOTE K - CONCENTRATIONS OF CREDIT
All of the Bank's loans, commitments, and standby letters of credit have
been granted to customers in the Bank's market area. Investments in
state and municipal securities also involve governmental entities
within the Bank's market area. The concentrations of credit by type of
loan are set forth in note D. The type of commitments to extend credit
approximates the distribution of loans outstanding. Standby letters of
credit were granted primarily to commercial borrowers.
NOTE L - REGULATORY MATTERS
The Bank, as a federally chartered bank, is subject to the dividend
restrictions set forth by the Comptroller of the Currency. Under such
restrictions, the Bank may not, without the prior approval of the
Comptroller of the Currency, declare dividends in excess of the sum of
the current year's earnings (as defined) plus the retained earnings (as
defined) from the prior two years. The dividends, as of December 31,
1995, that the Bank could declare, without the approval of the
Comptroller of the Currency, amounted to approximately $15,761,000.
The Bank is also required to maintain minimum amounts of capital in
relation to total "risk weighted" assets, as defined by the banking
regulators. At December 31, 1995, the Bank's required minimum capital
ratios and their actual ratios were as follows:
Required Actual
Minimum (Tier 1) 4.00% 26.13%
Total capital 8.00% 26.77%
Leverage (Tier 1 capital divided by
total assets) 3.00%-5.00% 14.29%
NOTE M - FAIR VALUE OF FINANCIAL INSTRUMENTS
The following methods and assumptions were used by the Bank in estimating
fair values of financial investments as disclosed herein:
1. Cash and Short-Term Investments
The carrying amounts of cash and short-term investments approximate their
fair value.
2. Investment Securities
Fair values for investment securities, excluding equity securities, are
based on quoted market prices. The carrying values of equity
securities approximate fair values.
3. Loans
Fair value is estimated using discounted cash flow analyses using interest
rates currently being offered for loans with similar terms to borrowers
of similar credit quality.
4. Deposit Liabilities
The fair value of demand deposits is, by definition, equal to the amount
payable on demand at the reporting date. Fair value of savings
accounts and money market accounts is estimated using discounted cash
flow analyses using the interest rate of current applicable Federal
Home Loan Bank advances. The fair value of certificates of deposit is
estimated using discounted cash flow analyses, applying interest rates
currently being offered by the Bank on certificates to a schedule of
aggregated expected maturities of certificates.
5. Short-term Borrowings
The carrying amounts of short-term borrowings approximate their fair
values.
6. Long-term Debt
The fair values of the Bank's long-term debt are estimated using
discounted cash flow analyses based on the Bank's current incremental
borrowing rates for similar types of borrowing arrangements.
7. Commitments
There is no material difference between the carrying amount and estimated
fair value of off-balance sheet items, primarily commitments to extend
credit which are generally priced at market at the time of funding.
The estimated fair values of the Bank's financial instruments were as
follows:
December 31, 1995
-----------------
Carrying Fair
Amount Value
------ -----
(amounts in thousands)
--------------------
<TABLE>
<S> <C> <C>
Financial assets:
Cash and short-term
investments $ 61,653 $ 61,653
Investment securities 302,148 302,247
Loans-net 344,712 340,499
------- -------
Total financial assets $ 708,513 $ 704,399
======= =======
Financial liabilities:
Deposits $ 607,642 $ 590,090
Short-term borrowings 40,227 40,227
Long-term debt 1,422 1,403
------- -------
Total financial liabilities $ 649,291 $ 631,720
======= =======
Off-balance-sheet instruments:
Commitments to extend credit $ 72,586 $ 72,586
======= =======
</TABLE>
The Bank's remaining assets and liabilities are not considered financial
instruments.
NOTE N - DERIVATIVE FINANCIAL INSTRUMENTS
The Bank had an interest rate cap agreement in effect during 1994 for the
purpose of managing interest rate risks. This agreement was sold in
1995 and the Bank does not have any derivative financial instruments as
of December 31, 1995.
NOTE O - HOLDING COMPANY FORMATION
On October 21, 1994, the CM Bank Holding Company merged with Calcasieu
Marine National Bank in a transaction accounted for in a manner similar
to a pooling of interests. As a result, one share of each class of
stock of the Bank was converted to one share of each corresponding
class of stock of the Holding Company.
NOTE P - PRIOR PERIOD ADJUSTMENT
During 1995, an error was discovered in the recording of certain employee
retirement benefit expenses which resulted in net income being
overstated in years prior to 1994. The resulting cumulative
overstatement of net income in the amount of $749,207 (net of income
taxes) was adjusted as of December 31, 1993.
<PAGE>
Unaudited Pro Forma Financial Information
- -------------------------------------------
The following unaudited pro forma combined balance
sheet as of June 30, 1996 gives effect to (1) the then
pending acquisition of CM Bank Holding Company and the
pending acquisition of St. Bernard Bank & Trust Co. assuming
such acquisitions are accounted for under the purchase
method of accounting and (2) the pending merger of Texarkana
National Bancshares, Inc., with and into Hibernia assuming
such merger is accounted for using the pooling-of-interests
method of accounting, as if all such transactions had been
consummated on June 30, 1996.
The following unaudited pro forma combined income
statement for the six months ended June 30, 1996, gives
effect to (1) the then pending acquisition of CM Bank
Holding Company and the pending acquisition of St. Bernard
Bank & Trust Co. assuming such acquisitions are accounted
for under the purchase method of accounting and (2) the
pending merger of Texarkana National Bancshares, Inc., with
and into Hibernia assuming such merger is accounted for
using the pooling-of-interests method of accounting, as if
all such transactions had been consummated on January 1,
1995.
The following unaudited pro forma combined income
statement for the year ended December 31, 1995, gives effect
to (1) the then pending mergers of FNB Bancshares, Inc.
(consummated on January 1, 1996) and Bunkie Bancshares,
Inc. (consummated on January 15, 1996) accounted for under
the pooling-of-interests method of accounting, (2) the then
pending acquisition of CM Bank Holding Company and the
pending acquisition of St. Bernard Bank & Trust Co. assuming
such acquisitions are accounted for under the purchase
method of accounting and (3) the pending merger of Texarkana
National Bancshares, Inc. with and into Hibernia assuming
such merger is accounted for using the pooling-of-interests
method of accounting, as if all such transactions had been
consummated on January 1, 1995.
The unaudited pro forma combined financial statements
are presented for information purposes only and are not
necessarily indicative of the combined financial position or
results of operations which would actually have occurred if
the transactions had been consummated in the past or which
may be obtained in the future.
<PAGE>
<TABLE>
<CAPTION>
HIBERNIA CORPORATION
PRO FORMA COMBINED BALANCE SHEET
June 30, 1996
(A)
CM BANK
HOLDING COMPANY
HISTORICAL CM BANK PURCHASE ACCOUNTING PRO FORMA ST. BERNARD
HIBERNIA HOLDING ADJUSTMENTS HIBERNIA BANK & TRUST
Unaudited ($ in thousands) CORPORATION COMPANY DEBIT CREDIT CORPORATION CO.
<S> <C> <C> <C> <C> <C> <C>
ASSETS
Cash and due from banks $ 340,241 $ 43,554 $ 383,795 $ 10,984
Short-term investments 61,484 5,200 66,684 12,400
Securities available for sale 1,880,789 299,729 $ 8,650 (2) $ 201,700 (1) 135
69 (3) 1,987,399
Securities held to maturity - 8,650 8,650 (2) - 190,707
Loans, net of unearned income 4,989,682 361,592 4,213 (3) 5,347,061 29,519
Reserve for possible loan losses (143,999) (2,563) (146,562) (290)
Loans, net 4,845,683 359,029 - 4,213 5,200,499 29,229
Bank premises and equipment 119,875 51,961 5,800 (3) 166,036 2,400
Customers' acceptance liability 440 - 440 -
Goodwill 17,542 - 85,886 (3) 103,428 -
Other intangibles assets 5,317 77 17,235 (3) 77 (3) 22,552 22
Other assets 183,312 10,619 2,311 (3) 191,620 3,651
TOTAL ASSETS $ 7,454,683 $ 778,819 $ 111,771 $ 222,820 $ 8,122,453 $ 249,528
LIABILITIES
Deposits:
Demand, noninterest-bearing $ 1,119,969 $ 165,300 $ 1,285,269 $ 24,511
Interest-bearing 5,173,305 452,596 $ 492 (3) 5,626,393 202,057
Total Deposits 6,293,274 617,896 - 492 6,911,662 226,568
Short-term borrowings 290,862 35,318 326,180 -
Liability on acceptances 440 - 440 -
Other liabilities 118,853 12,705 131,558 981
Debt 6,813 1,378 $ 19 (3) 8,172 -
TOTAL LIABILITIES 6,710,242 667,297 19 492 7,378,012 227,549
SHAREHOLDERS' EQUITY
Preferred Stock - - - -
Common Stock 234,463 10,500 10,500 234,463 375
Surplus 375,632 10,500 10,500 375,632 1,625
Retained earnings 155,277 93,097 93,097 155,277 19,979
Treasury stock (65) (8) 8 (65) -
Unrealized gains on securities
available for sale (6,476) (2,567) 2,567 (6,476) -
Unearned compensation (14,390) - (14,390) -
TOTAL SHAREHOLDERS' EQUITY 744,441 111,522 114,097 (1) 2,575 (1) 744,441 21,979
TOTAL LIABILITIES AND
SHAREHOLDERS' EQUITY $ 7,454,683 $ 778,819 $ 114,116 $ 3,067 $ 8,122,453 $ 249,528
See notes to Pro Forma Combined Balance Sheet.
</TABLE>
<TABLE>
<CAPTION>
HIBERNIA CORPORATION
PRO FORMA COMBINED BALANCE SHEET (cont.)
June 30, 1996
(B) (C)
ST. BERNARD TEXARKANA
BANK & TRUST COMPANY TEXARKANA NATIONAL BANCSHARES, INC TOTAL
PURCHASE ACCOUNTING PRO FORMA NATIONAL POOLING OF INTERESTS PRO FORMA
ADJUSTMENTS HIBERNIA BANCSHARES, ADJUSTMENT HIBERNIA
Unaudited ($ in thousands) DEBIT CREDIT CORPORATION INC. DEBIT CREDIT CORPORATION
<S> <C> <C> <C> <C> <C> <C> <C>
ASSETS
Cash and due from banks $ 394,779 $ 15,251 $ 410,030
Short-term investments 79,084 5,000 84,084
Securities available for sale $ 190,707 (2) 46,000 (1) 112,220
184 (3) 2,132,057 2,244,277
Securities held to maturity 190,707 (2) - 41,359 41,359
Loans, net of unearned income 5,376,580 214,833 5,591,413
Reserve for possible loan losses (146,852) (3,223) (150,075)
Loans, net - 5,229,728 211,610 - - 5,441,338
Bank premises and equipment 168,436 8,124 176,560
Customers' acceptance liability 440 - 440
Goodwill 19,513 (3) 122,941 - 122,941
Other intangibles assets 7,142 (3) 22 (3) 29,694 - 29,694
Other assets 2,428 (3) 192,843 7,955 200,798
TOTAL ASSETS $ 217,362 $ 239,341 $ 8,350,002 $ 401,519 - - $ 8,751,521
LIABILITIES
Deposits:
Demand, noninterest-bearing $ 1,309,780 $ 44,956 $ 1,354,736
Interest-bearing 5,828,450 290,618 6,119,068
Total Deposits - - 7,138,230 335,574 - - 7,473,804
Short-term borrowings 326,180 5,808 331,988
Liability on acceptances 440 - 440
Other liabilities 132,539 2,951 135,490
Debt 8,172 20,029 28,201
TOTAL LIABILITIES - - 7,605,561 364,362 - - 7,969,923
SHAREHOLDERS' EQUITY
Preferred Stock - - -
Common Stock $ 375 234,463 7,356 $ 5,073 246,892
Surplus 1,625 375,632 2,654 $ 5,073 373,213
Retained earnings 19,979 155,277 27,823 183,100
Treasury stock (65) - (65)
Unrealized gains on securities
available for sale (6,476) (676) (7,152)
Unearned compensation (14,390) - (14,390)
TOTAL SHAREHOLDERS' EQUITY 21,979 (1) 744,441 37,157 5,073 5,073 781,598
TOTAL LIABILITIES AND
SHAREHOLDERS' EQUITY $ 21,979 - $ 8,350,002 $ 401,519 $ 5,073 $ 5,073 $ 8,751,521
See notes to Pro Forma Combined Balance Sheet.
</TABLE>
<PAGE>
HIBERNIA CORPORATION
NOTES TO PRO FORMA COMBINED BALANCE SHEET
A. Hibernia Corporation acquired CM Bank Holding Company
("Calcasieu") in a merger transaction accounted for as a
purchase. Calcasieu shareholders received approximately
$201,700,000 cash in connection with the merger. Under this
method of accounting, the assets and liabilities of
Calcasieu are adjusted to their estimated fair value.
Applicable income tax effects of such adjustments are
included as a component of Hibernia's net deferred tax asset
with a corresponding offset to goodwill (assuming an
effective tax rate of 35%). For purposes of these pro forma
combined financial statements, estimates have been made of
the fair value of Calcasieu's assets and liabilities as of
June 30, 1996. These fair value adjustments are based on
the best information currently available to Hibernia and are
subject to update as additional information becomes
available.
In addition to the $201,700,000 cash to be exchanged in the
merger, the total purchase price will include other direct
acquisition costs such as investment banking, legal,
accounting and other professional fees, printing and mailing
costs, and other miscellaneous expenses. These costs, which
are not expected to be material to the transaction, are not
included as adjustments to the unaudited pro forma combined
financial statements.
<TABLE>
<CAPTION>
<S> <C> <C>
(1) Allocation of purchase price:
(in thousands)
Net assets applicable to Calcasieu's
common stock at June 30, 1996 $ 111,522
Net increase (decrease) to net asset
value at June 30, 1996, net of tax
(see footnote 3) $ (6,861)
Core deposit intangibles, net of tax
(see footnote 3) 11,203
Total estimated fair value adjustments 4,342
Elimination of Calcasieu's existing identifiable
intangibles, net of tax (see footnote 3) (50)
Total preliminary allocation of purchase price 115,814
Goodwill due to the merger (see footnote 3) 85,886
$ 201,700
</TABLE>
The purchase of Calcasieu was primarily funded by the sale
of investment securities.
(2) Securities of $8,650,000 classified as held to maturity
by Calcasieu were reclassified by Hibernia as securities
available for sale upon consummation of the merger.
<TABLE>
<CAPTION>
(3) Purchase accounting adjustments:
Applicable Net
Gross income tax of tax
(in thousands)
Debit (credit)
<S> <C> <C> <C>
Estimated fair value adjustments:
Investment securities $ (69) $ 24 $ (45)
Loans, net (4,213) 1,475 (2,738)
Bank premises and equipment (5,800) 2,030 (3,770)
Interest bearing deposits (492) 172 (320)
Debt 19 (7) 12
Estimated fair value adjustments
(excluding indentifiable
intanbibles) (10,555) 3,694 (6,861)
Elimination of Calcasieu's existing
indentifiable intangibles (77) 27 (50)
Core deposit intangibles due to the
merge 17,235 (6,032) 11,203
Goodwill due to the merger 85,886 - 85,886
$ 92,489 $ (2,311) $ 90,178
</TABLE>
B. Hibernia National Bank plans to acquire St. Bernard Bank & Trust
Co. ("St. Bernard") in a merger transaction accounted for as a
purchase. St. Bernard shareholders will receive approximately
$46,000,000 cash in connection with the merger. Under this method
of accounting, the assets and liabilities of St. Bernard will be
adjusted to their estimated fair value. Applicable income tax
effects of such adjustments will be included as a component of
Hibernia's net deferred tax asset with a corresponding offset to
goodwill (assuming an effective tax rate of 35%). For purposes of
these pro forma combined financial statements, estimates have been
made of the fair value of St. Bernard's assets and liabilities as
of June 30, 1996. These fair value adjustments are based on the
best information currently available and are subject to update as
additional information becomes available.
In addition to the $46,000,000 cash to be exchanged in the merger,
the total purchase price will include other direct acquisition
costs such as investment banking, legal, accounting and other
professional fees, printing and mailing costs, and other
miscellaneous expenses. These costs, which are not expected to be
material to the transaction, are not included as adjustments to
the unaudited pro forma combined financial statements.
<TABLE>
<CAPTION>
<S> <C> <C>
(1) Allocation of purchase price:
(in thousands)
Net assets applicable to St. Bernard's
common stock at June 30, 1996 $ 21,979
Net increase (decrease) to net asset
value at June 30, 1996, net of tax
(see footnote 3) $ (120)
Core deposit intangibles, net of tax
(see footnote 3) 4,642
Total estimated fair value adjustments 4,522
Elimination of St. Bernard's existing identifiable
intangibles, net of tax (see footnote 3) (14)
Total preliminary allocation of purchase price 26,487
Goodwill due to the merger (see footnote 3) 19,513
$ 46,000
</TABLE>
It is assumed that the purchase of St. Bernard will be
funded by the sale of investment securities.
(2) Securities of $190,707,000 classified as held to
maturity by St. Bernard will be reclassified by Hibernia as
securities available for sale upon consummation of the
merger.
<TABLE>
<CAPTION>
(3) Purchase accounting adjustments:
Applicable Net
Gross income tax of tax
<S> <C> <C> <C>
(in thousands)
Debit (credit)
Estimated fair value adjustments:
Investment securities $ (184) $ 64 $ (120)
Elimination of St. Bernard's
existing indentifiable
intangibles (22) 8 (14)
Core deposit intangibles due
to the merger 7,142 (2,500) 4,642
Goodwill due to the merger 19,513 - 19,513
$ 26,449 $ (2,428) $ 24,021
</TABLE>
C. Hibernia Corporation plans to issue approximately 6,473,280
shares of Hibernia Common Stock, with an aggregate market
value at the date of the merger of $69,588,000 based upon an
assumed market value of $10.75 per share, to effect the
merger with Texarkana National Bancshares, Inc. ("TNB").
The exchange rate shall be the number that is obtained by
dividing $100.75 by the average closing price of Hibernia
Common Stock for the ten business days preceding the last
trading day prior to the closing date; provided, however,
that if the exchange rate as calculated above is greater
than 8.8, then the exchange rate for the purposes of this
transaction shall be 8.8, and if the exchange rate as
calculated above is less than 8.2, then the exchange rate
for this transaction shall be 8.2. Based upon an assumed
market value of $10.75 per share for Hibernia Common Stock,
the exchange rate in the merger will be 8.8. The stated
value of the Hibernia Common Stock is $1.92 per share.
In addition, existing stock options outstanding to purchase
28,132 shares of TNB Common Stock will be converted into
options to purchase 247,561 shares of Hibernia Common Stock
at exercise prices ranging from $2.39 to $2.50 per share.
In accordance with the pooling of interests method of
accounting, the historical equities of the merged companies
are combined for the purposes of these pro forma statements.
<PAGE>
<TABLE>
<CAPTION>
HIBERNIA CORPORATION
PRO FORMA COMBINED INCOME STATEMENT
Six months ended June 30, 1996
(A)
CM BANK
HOLDING COMPANY
CM BANK PURCHASE ACCOUNTING
HIBERNIA HOLDING ADJUSTMENTS
Unaudited ($ in thousands, except per share data) CORPORATION COMPANY DEBIT CREDIT
<S> <C> <C> <C> <C>
Interest income
Interest and fees on loans $ 214,552 $ 16,280 $ 702 (1)
Interest on securities available for sale 65,065 9,434 $ 6,303 (3) 5 (1)
282 (2)
Interest on securities held to maturity - 282 282 (2)
Interest on short-term investments 4,739 586
Total interest income 284,356 26,582 6,585 989
Interest expense
Interest on deposits 109,418 9,171
Interest on short-term borrowings 6,832 883
Interest on debt 216 46 1 (1)
Total interest expense 116,466 10,100 1 -
Net interest income 167,890 16,482
Provision for possible loan losses - 475
Net interest income after provision
for possible loan losses 167,890 16,007
Noninterest income
Service charges on deposits 25,184 3,258
Trust fees 6,047 376
Other service, collection and exchange charges 15,927 934
Gain on divestiture of banking offices - -
Gain on sale of business lines 517 -
Other operating income 4,856 177
Securities gains (losses), net - 1,157
Total noninterest income 52,531 5,902 - -
Noninterest expense
Salaries and employee benefits 72,172 6,145
Occupancy expense, net 12,830 1,423 328 (1)
Equipment expense 10,868 1,289 284 (1)
Data processing expense 10,208 158
Foreclosed property expense, net (1,822) (100)
Amortization of intangibles 1,923 12 1,847 (1) 12 (1)
1,718 (1)
Other operating expense 35,132 3,606
Total noninterest expense 141,311 12,533 3,565 624
Income before income taxes 79,110 9,376 10,151 1,613
Income tax expense 27,795 3,241 358 (1)
2,332 (3)
Income from continuing operations $ 51,315 $ 6,135 $ 10,151 $ 4,303
Pro forma weighted average common shares 120,335,297
Pro forma income per common share from
continuing operations (C) $ 0.43
See notes to Pro Forma Combined Income Statements.
</TABLE>
<TABLE>
<CAPTION>
HIBERNIA CORPORATION
PRO FORMA COMBINED INCOME STATEMENT (cont.)
Six months ended June 30, 1996
(B)
ST. BERNARD
BANK & TRUST CO.
PRO FORMA ST. BERNARD PURCHASE ACCOUNTING
HIBERNIA BANK & TRUST ADJUSTMENTS
Unaudited ($ in thousands, except per share data) CORPORATION CO. DEBIT CREDIT
<S> <C> <C> <C> <C>
Interest income
Interest and fees on loans $ 231,534 $ 1,407
Interest on securities available for sale 68,483 - $ 1,438 (3) $ 5,952 (2)
Interest on securities held to maturity - 5,952 5,952 (2)
Interest on short-term investments 5,325 507
Total interest income 305,342 7,866 7,390 5,952
Interest expense
Interest on deposits 118,589 3,741
Interest on short-term borrowings 7,715 -
Interest on debt 263 -
Total interest expense 126,567 3,741 - -
Net interest income 178,775 4,125
Provision for possible loan losses 475 (7)
Net interest income after provision
for possible loan losses 178,300 4,132
Noninterest income
Service charges on deposits 28,442 530
Trust fees 6,423 -
Other service, collection and exchange charges 16,861 69
Gain on divestiture of banking offices - -
Gain on sale of business lines 517 -
Other operating income 5,033 54
Securities gains (losses), net 1,157 -
Total noninterest income 58,433 653 - -
Noninterest expense
Salaries and employee benefits 78,317 1,887
Occupancy expense, net 13,925 359
Equipment expense 11,873 207
Data processing expense 10,366 21
Foreclosed property expense, net (1,922) -
Amortization of intangibles 5,488 1 765 (1) 1 (1)
390 (1)
Other operating expense 38,738 599
Total noninterest expense 156,785 3,074 1,155 1
Income before income taxes 79,948 1,711 8,545 5,953
Income tax expense 28,346 566 268 (1)
532 (3)
Income from continuing operations $ 51,602 $ 1,145 $ 8,545 $ 6,753
Pro forma weighted average common shares 120,335,297
Pro forma income per common share from
continuing operations (C) $ 0.43
See notes to Pro Forma Combined Income Statements.
</TABLE>
<TABLE>
<CAPTION>
HIBERNIA CORPORATION
PRO FORMA COMBINED INCOME STATEMENT (cont.)
Six months ended June 30, 1996
TOTAL
PRO FORMA TEXARKANA PRO FORMA
HIBERNIA NATIONAL HIBERNIA
Unaudited ($ in thousands, except per share data) CORPORATION BANCSHARES, INC. CORPORATION
<S> <C> <C> <C>
Interest income
Interest and fees on loans $ 232,941 $ 9,307 $ 242,248
Interest on securities available for sale 72,997 3,735 76,732
Interest on securities held to maturity - 1,122 1,122
Interest on short-term investments 5,832 74 5,906
Total interest income 311,770 14,238 326,008
Interest expense
Interest on deposits 122,330 6,426 128,756
Interest on short-term borrowings 7,715 187 7,902
Interest on debt 263 563 826
Total interest expense 130,308 7,176 137,484
Net interest income 181,462 7,062 188,524
Provision for possible loan losses 468 975 1,443
Net interest income after provision
for possible loan losses 180,994 6,087 187,081
Noninterest income
Service charges on deposits 28,972 1,929 30,901
Trust fees 6,423 405 6,828
Other service, collection and exchange charges 16,930 887 17,817
Gain on divestiture of banking offices - - -
Gain on sale of business lines 517 - 517
Other operating income 5,087 251 5,338
Securities gains (losses), net 1,157 113 1,270
Total noninterest income 59,086 3,585 62,671
Noninterest expense
Salaries and employee benefits 80,204 3,032 83,236
Occupancy expense, net 14,284 371 14,655
Equipment expense 12,080 442 12,522
Data processing expense 10,387 87 10,474
Foreclosed property expense, net (1,922) 18 (1,904)
Amortization of intangibles 6,643 - 6,643
Other operating expense 39,337 1,426 40,763
Total noninterest expense 161,013 5,376 166,389
Income before income taxes 79,067 4,296 83,363
Income tax expense 28,112 1,165 29,277
Income from continuing operations $ 50,955 $ 3,131 $ 54,086
Pro forma weighted average common shares 120,335,297 6,473,280 126,808,577
Pro forma income per common share from
continuing operations (C) $ 0.42 $ 0.43
See notes to Pro Forma Combined Income Statements.
</TABLE>
<PAGE>
HIBERNIA CORPORATION
NOTES TO PRO FORMA COMBINED INCOME STATEMENT
Six months ended June 30, 1996
A. Calcasieu Marine Pro Forma Adjustments
(1) In accordance with the purchase method of accounting,
the assets and liabilities of Calcasieu were adjusted to
fair value with the applicable income tax effects of such
adjustments included as a component of Hibernia's net
deferred tax asset. The related increase (decrease) to net
income for the first six months of 1996 resulting from the
amortization of such purchase accounting adjustments assuming
the merger occurred on January 1, 1995 is as follows:
(in thousands)
Debit(Credit)
Investment securities $ (5)
Loans (702)
Bank premises (328)
Furniture & equipment (284)
Debt 1
Core deposit intangibles 1,847
Goodwill 1,718
Deferred federal tax asset resulting from:
Investment securities $ 2
Loans 246
Bank premises & equipment 41
Core deposit intangibles (647)
(358)
In addition, amortization of Calcasieu's existing
identifiable intangibles was reversed.
(2) Interest income on securities previously classified as
held to maturity was reclassified to interest income on
securities available for sale.
(3) Interest income was reduced to reflect the sale of
$201,700,000 in investment securities (with an assumed yield
of 6.25%) to fund the purchase of Calcasieu. Income tax
expense was adjusted accordingly to reflect the impact of
the reduction in interest income.
B. St. Bernard Pro Forma Adjustments
(1) In accordance with the purchase method of accounting,
the assets and liabilities of St. Bernard will be adjusted
to fair value with the applicable income tax effects of such
adjustments included as a component of Hibernia's net
deferred tax asset. The related increase (decrease) to net
income for the first six months of 1996 resulting from the
amortization of such purchase accounting adjustments assuming
the merger occurred on January 1, 1995 is as follows:
(in thousands)
Debit(Credit)
Core deposit intangibles 765
Goodwill 390
Deferred federal tax asset resulting
from Core deposit intangibles (268)
In addition, amortization of St. Bernard's existing
identifiable intangibles will be reversed.
(2) Interest income on securities previously classified as
held to maturity will be reclassified to interest income on
securities available for sale.
(3) Interest income will be reduced to reflect the sale of
$46,000,000 in investment securities (with an assumed yield
of 6.25%) to fund the purchase of St. Bernard. Income tax
expense will be adjusted accordingly to reflect the impact
of the reduction of interest income.
C. Anticipated Savings
Hibernia expects to achieve savings through reductions in
interest expense and operating costs in connection with the
proposed mergers. The savings vary from merger to merger
depending on Hibernia's pre-merger operations in the
respective geographic area. The majority of savings will be
achieved through consolidation of certain operations. The
extent to which the savings will be achieved depends, among
other things, on the regulatory environment and economic
conditions, and may be affected by unanticipated changes in
business activities, inflation and certain external factors.
Therefore, there can be no assurance that such savings will
be realized. No adjustment has been included in the
unaudited pro forma financial statements for the anticipated
savings.
<PAGE>
<TABLE>
<CAPTION>
HIBERNIA CORPORATION
PRO FORMA COMBINED INCOME STATEMENT
Year ended December 31, 1995
(B)
CM BANK
(A) HOLDING COMPANY
HISTORICAL RESTATED CM BANK PURCHASE ACCOUNTING
HIBERNIA HIBERNIA HOLDING ADJUSTMENTS
Unaudited ($ in thousands, except per share data) CORPORATION CORPORATION COMPANY DEBIT CREDIT
<S> <C> <C> <C> <C> <C>
Interest income
Interest and fees on loans $ 366,716 $ 373,738 $ 31,523 $ 1,404 (1)
Interest on securities available for sale 37,549 38,248 20,546 $ 12,606 (3) 10 (1)
2,129 (2)
Interest on securities held to maturity 112,204 116,237 2,129 2,129 (2)
Interest on short-term investments 6,706 7,061 294
Total interest income 523,175 535,284 54,492 14,735 3,543
Interest expense
Interest on deposits 209,512 215,134 15,423 492 (1)
Interest on short-term borrowings 13,309 13,208 2,276
Interest on debt 594 595 1,661 2 (1)
Total interest expense 223,415 228,937 19,360 2 492
Net interest income 299,760 306,347 35,132
Provision for possible loan losses - (135) 200
Net interest income after provision
for possible loan losses 299,760 306,482 34,932
Noninterest income
Service charges on deposits 45,009 45,957 6,642
Trust fees 11,705 11,705 740
Other service, collection and exchange charges 27,719 27,719 1,330
Gain on divestiture of banking offices 2,361 2,361 -
Gain on sale of business lines 3,402 3,402 -
Other operating income 7,362 7,516 290
Securities gains (losses), net (13) (1) 2,080
Total noninterest income 97,545 98,659 11,082 - -
Noninterest expense
Salaries and employee benefits 128,022 130,498 13,058
Occupancy expense, net 25,379 25,888 2,538 656 (1)
Equipment expense 20,541 20,717 2,453 568 (1)
Data processing expense 18,824 19,212 349
Foreclosed property expense, net (950) (780) (59)
Amortization of intangibles 3,709 3,709 23 4,309 (1) 23 (1)
3,435 (1)
Other operating expense 68,508 70,086 9,453
Total noninterest expense 264,033 269,330 27,815 7,744 1,247
Income before income taxes 133,272 135,811 18,199 22,481 5,282
Income tax expense 9,413 10,112 6,026 761 (1)
4,664 (3)
Income from continuing operations $ 123,859 $ 125,699 $ 12,173 $ 22,481 $ 10,707
Pro forma weighted average common shares 117,879,746 120,644,146
Pro forma income per common share from
continuing operations (D) $ 1.05 $ 1.04
See notes to Pro Forma Combined Income Statements.
</TABLE>
<TABLE>
<CAPTION>
HIBERNIA CORPORATION
PRO FORMA COMBINED INCOME STATEMENT (cont.)
Year ended December 31, 1995
(C)
ST. BERNARD
BANK & TRUST CO.
PRO FORMA ST. BERNARD PURCHASE ACCOUNTING
HIBERNIA BANK & TRUST ADJUSTMENTS
Unaudited ($ in thousands, except per share data) CORPORATION CO. DEBIT CREDIT
<S> <C> <C> <C> <C>
Interest income
Interest and fees on loans $ 406,665 $ 2,666
Interest on securities available for sale 48,327 - $ 2,875 (3) $ 184 (1)
12,311 (2)
Interest on securities held to maturity 116,237 12,311 12,311 (2)
Interest on short-term investments 7,355 753
Total interest income 578,584 15,730 15,186 12,495
Interest expense
Interest on deposits 230,065 7,607
Interest on short-term borrowings 15,484 -
Interest on debt 2,258 -
Total interest expense 247,807 7,607 - -
Net interest income 330,777 8,123
Provision for possible loan losses 65 (95)
Net interest income after provision
for possible loan losses 330,712 8,218
Noninterest income
Service charges on deposits 52,599 1,017
Trust fees 12,445 -
Other service, collection and exchange charges 29,049 101
Gain on divestiture of banking offices 2,361 -
Gain on sale of business lines 3,402 -
Other operating income 7,806 59
Securities gains (losses), net 2,079 -
Total noninterest income 109,741 1,177 - -
Noninterest expense
Salaries and employee benefits 143,556 3,447
Occupancy expense, net 27,770 717
Equipment expense 22,602 397
Data processing expense 19,561 85
Foreclosed property expense, net (839) -
Amortization of intangibles 11,453 2 1,786 (1) 2 (1)
781 (1)
Other operating expense 79,539 1,059
Total noninterest expense 303,642 5,707 2,567 2
Income before income taxes 136,811 3,688 17,753 12,497
Income tax expense 10,713 1,168 561 (1)
1,064 (3)
Income from continuing operations $ 126,098 $ 2,520 $ 17,753 $ 14,122
Pro forma weighted average common shares 120,644,146
Pro forma income per common share from
continuing operations (D) $ 1.05
See notes to Pro Forma Combined Income Statements.
</TABLE>
<TABLE>
<CAPTION>
HIBERNIA CORPORATION
PRO FORMA COMBINED INCOME STATEMENT (cont.)
Year ended December 31, 1995
TOTAL
PRO FORMA TEXARKANA PRO FORMA
HIBERNIA NATIONAL HIBERNIA
Unaudited ($ in thousands, except per share data) CORPORATION BANCSHARES, INC. CORPORATION
<S> <C> <C> <C>
Interest income
Interest and fees on loans $ 409,331 $ 15,485 $ 424,816
Interest on securities available for sale 57,947 8,781 66,728
Interest on securities held to maturity 116,237 2,609 118,846
Interest on short-term investments 8,108 302 8,410
Total interest income 591,623 27,177 618,800
Interest expense
Interest on deposits 237,672 11,534 249,206
Interest on short-term borrowings 15,484 583 16,067
Interest on debt 2,258 1,035 3,293
Total interest expense 255,414 13,152 268,566
Net interest income 336,209 14,025 350,234
Provision for possible loan losses (30) 1,275 1,245
Net interest income after provision
for possible loan losses 336,239 12,750 348,989
Noninterest income
Service charges on deposits 53,616 2,848 56,464
Trust fees 12,445 792 13,237
Other service, collection and exchange charges 29,150 2,176 31,326
Gain on divestiture of banking offices 2,361 - 2,361
Gain on sale of business lines 3,402 - 3,402
Other operating income 7,865 - 7,865
Securities gains (losses), net 2,079 250 2,329
Total noninterest income 110,918 6,066 116,984
Noninterest expense
Salaries and employee benefits 147,003 5,983 152,986
Occupancy expense, net 28,487 937 29,424
Equipment expense 22,999 883 23,882
Data processing expense 19,646 154 19,800
Foreclosed property expense, net (839) (11) (850)
Amortization of intangibles 14,020 - 14,020
Other operating expense 80,598 6,930 87,528
Total noninterest expense 311,914 14,876 326,790
Income before income taxes 135,243 3,940 139,183
Income tax expense 10,256 755 11,011
Income from continuing operations $ 124,987 $ 3,185 $ 128,172
Pro forma weighted average common shares 120,644,146 6,473,280 127,117,426
Pro forma income per common share from
continuing operations (D) $ 1.04 $ 1.01
See notes to Pro Forma Combined Income Statements.
</TABLE>
<PAGE>
HIBERNIA CORPORATION
NOTES TO PRO FORMA COMBINED INCOME STATEMENT
Year ended December 31, 1995
A. Restated Hibernia Corporation
On January 1, 1996, Hibernia Corporation merged with FNB
Bancshares, Inc. ("Lake Providence") in a transaction
accounted for as a pooling of interests. Hibernia issued
889,640 shares of Hibernia Common Stock, with an aggregate
market value at the date of the merger of $9,307,859 based
on a market value of $10.4625 per share, to effect the
merger. Based upon the 9,670 shares of Lake Providence
Common Stock outstanding on the record date, the exchange
rate in the merger was 92. The stated value of Hibernia
Common Stock is $1.92 per share. In accordance with the
pooling of interests method of accounting, the historical
results of operations of the merged companies are combined.
On January 15, 1996, Hibernia Corporation merged with Bunkie
Bancshares, Inc. ("Bunkie") in a transaction accounted for
as a pooling of interests. Hibernia issued 1,874,760 shares
of Hibernia Common Stock, with an aggregate market value at
the date of the merger of $19,145,987 based on a market
value of $10.2125 per share, to effect the merger. Based
upon the 11,006 Bunkie Common Stock outstanding on the
record date, the exchange rate in the merger was 170.3398.
The stated value of Hibernia Common Stock is $1.92 per
share. In accordance with the pooling of interests method
of accounting, the historical results of operations of
the merged companies are combined.
B. CM Bank Holding Company Pro Forma Adjustments
(1) In accordance with the purchase method of accounting,
the assets and liabilities of CM Bank Holding Company
("Calcasieu") were adjusted to fair value with the
applicable income tax effects of such adjustments included
as a component of Hibernia's net deferred tax asset. The
related increase (decrease) to net income for the first year
after the merger resulting from the amortization of such
purchase accounting adjustments assuming the merger occurred
on January 1, 1995 is as follows:
(in thousands)
Debit(Credit)
Investment securities $ (10)
Loans (1,404)
Bank premises (656)
Furniture & equipment (568)
Interest-bearing deposits (492)
Debt 2
Core deposit intangibles 4,309
Goodwill 3,435
Deferred federal tax asset resulting from:
Investment securities $ 3
Loans 492
Bank premises & equipment 81
Interest-bearing deposits 172
Debt (1)
Core deposit intangibles (1,508)
(761)
In addition, amortization of Calcasieu's existing
identifiable intangibles was reversed.
(2) Interest income on securities previously classified as
held to maturity was reclassified to interest income on
securities available for sale.
(3) Interest income was reduced to reflect the sale of
$201,700,000 in investment securities (with an assumed yield
of 6.25%) to fund the purchase of Calcasieu. Income tax
expense was adjusted accordingly to reflect the impact of
the reduction in interest income.
C. St. Bernard Pro Forma Adjustments
(1) In accordance with the purchase method of accounting,
the assets and liabilities of St. Bernard Bank & Trust Co.
("St. Bernard") will be adjusted to fair value with the
applicable income tax effects of such adjustments included
as a component of Hibernia's net deferred tax asset. The
related increase (decrease) to net income for the first year
after the merger resulting from the amortization of such
purchase accounting adjustments assuming the merger occurred
on January 1, 1995 is as follows:
(in thousands)
Debit(Credit)
Investment securities $ (184)
Core deposit intangibles 1,786
Goodwill 781
Deferred federal tax asset resulting from:
Investment securities $ 64
Core deposit intangibles (625)
(561)
In addition, amortization of St. Bernard's existing
identifiable intangibles will be reversed.
(2) Interest income on securities previously classified as
held to maturity will be reclassified to interest income on
securities available for sale.
(3) Interest income will be reduced to reflect the sale of
$46,000,000 in investment securities (with an assumed yield
of 6.25%) to fund the purchase of St. Bernard. Income tax
expense will be adjusted accordingly to reflect the impact
of the reduction in interest income.
D. Anticipated Savings
Hibernia expects to achieve savings through reductions in
interest expense and operating costs in connection with the
proposed mergers. The savings vary from merger to merger
depending on Hibernia's pre-merger operations in the
respective geographic area. The majority of savings will be
achieved through consolidation of certain operations. The
extent to which the savings will be achieved depends, among
other things, on the regulatory environment and economic
conditions, and may be affected by unanticipated changes in
business activities, inflation and certain external factors.
Therefore, there can be no assurance that such savings will
be realized. No adjustment has been included in the
unaudited pro forma financial statements for the anticipated
savings.
<PAGE>
SIGNATURE
Pursuant to the requirements of the Securities Exchange
Act of 1934, the Registrant has duly caused this report to
be signed on its behalf by the undersigned hereunto duly
authorized.
HIBERNIA CORPORATION
(Registrant)
Date: August 29, 1996 By: /s/ RONALD E. SAMFORD, JR.
---------------------------
Ronald E. Samford, Jr.
Executive Vice President & Controller
(Chief Accounting Officer)
<PAGE>
EXHIBIT INDEX
Exhibit Description Page Number
Number
2 Agreement and Plan of Merger of CM Bank Holding Company with
and into Hibernia Corporation.
23 Consent of Leon C. Theriot & Associates
99 Hibernia News Release dated August 26, 1996, announcing the
merger between Calcasieu and Hibernia.
<PAGE>
AGREEMENT AND PLAN OF MERGER
OF
CM BANK HOLDING COMPANY
WITH AND INTO
HIBERNIA CORPORATION
AGREEMENT AND PLAN OF MERGER dated as of April 2, 1996
("Agreement"), adopted and made by and between CM Bank Holding
Company ("Seller") and Hibernia Corporation ("Hibernia").
Seller is a corporation duly 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 ("Bank Holding Company Act"). The presently authorized
capital stock of Seller consists solely of 5,000,000 shares of
Class A Common Stock of the par value of $10 each (the "Class A
Stock") and 1,581,140 shares of Class B Common Stock of the par
value of $5 each (the "Class B Stock")(collectively, the Class A
Stock and the Class B Stock are referred to as "Seller Common
Stock"). As of March 31, 1996, 259,430 shares of Seller Class A
Stock had been issued, of which 251,605 shares were outstanding
and 7,825 shares were held in Seller's treasury, and 1,581,140
shares of Class B Stock were issued and were outstanding with no
Class B Stock held in treasury. All outstanding shares of Seller
Common Stock have been duly issued and are validly outstanding,
fully paid and nonassessable. The foregoing are the only voting
securities of Seller authorized, issued, or outstanding, and
there are no existing options, warrants, calls, or commitments of
any kind obligating Seller to issue any share of its capital
stock or any other security of which it is or will be the issuer.
None of the shares of Seller's capital stock has been issued in
violation of preemptive rights of shareholders. Seller owns 100
percent of the outstanding voting shares of Calcasieu Marine
National Bank ("Bank"), a national banking association organized
and existing under the laws of the United States of America. All
of the issued and outstanding shares of capital stock of the Bank
are owned by Seller. The Bank is (Calcasieu) 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.
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 March 31, 1996,
no shares of Hibernia's preferred stock were outstanding,
[83,717,760] shares of Hibernia Common Stock were outstanding,
and no shares of Hibernia Common Stock were held in Hibernia's
treasury. All outstanding shares of Hibernia Common Stock have
been duly issued and are validly outstanding, fully paid and
nonassessable. The foregoing are the only voting securities of
Hibernia authorized, issued or outstanding and there are no
existing options, warrants, calls or commitments of any kind
obligating Hibernia to issue any share of its capital stock or
any other security of which it is or will be the issuer, except
that Hibernia has authorized or reserved [1,718,707] shares of
Hibernia Common Stock for issuance under its 1987 Stock Option
Plan, pursuant to which options
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.
Hibernia shall organize an interim bank holding company
under the laws of the State of Louisiana ("Interim Company"), all
of the issued and outstanding capital stock of which shall be
owned by Hibernia. The Interim Company shall exist only for a
brief time for the purpose of merging with and into Seller in the
Initial Merger (as defined and described below in this
Agreement).
The Boards of Directors of Seller and Hibernia, Hibernia and
HNB have duly approved this Agreement and have authorized the
execution hereof by Seller's Chairman of the BoardChairman of the
Board and Hibernia's and HNB's President and Chief Executive
Officer, respectively. Seller has agreed to direct that this
Agreement be submitted to a vote of its shareholders either in
accordance with Part XI of the Louisiana Business Corporation Law
("LBCL") or its Articles of Incorporation and the terms of this
Agreement.
In consideration of their mutual promises and obligations,
the parties hereto adopt and make this Agreement for the merger
of Seller with and into Hibernia and prescribe the terms and
conditions of such merger and the mode of carrying it into
effect, which shall be as follows:
1. The Mergers. On the Effective Date (as defined in
Section 14 hereof), the Interim Company shall be merged with and
into Seller under the name and Articles of Incorporation of
Seller (the "Initial Merger") pursuant to the provisions of, and
with the effect provided in, the Louisiana Business Corporation
Law ("LBCL"), this Agreement and the Initial Merger Agreement in
substantially the form of Exhibit 1 hereto. The surviving entity
of the Initial Merger shall be merged with and into Hibernia (the
"Holding Company Merger") immediately following the Initial
Merger pursuant to the provisions of, and with the effect
provided in, the LBCL, this Agreement and the Holding Company
Merger Agreement in substantially the form of Exhibit 2 hereto,
and Bank shall be merged with and into HNB immediately following
the Holding Company Merger, pursuant to and with the effect
provided in, the national banking law, this Agreement and the
Bank Merger Agreement in substantially the form of Exhibit 3
hereto. The Initial Merger, the Holding Company Merger and the
Bank Merger are sometimes referred collectively herein as the
"Mergers".
2. Hibernia Capital Stock. The shares of the capital
stock of Hibernia issued and outstanding immediately prior to the
Effective Date shall, on the Effective Date, continue to be
issued and outstanding.
3. Seller Common Stock.
3.1. Conversion. On the Effective Date and subject to
the provisions of Section 3.7 hereof,
(a) each share of Seller Common Stock issued and
outstanding immediately prior to the Effective Date, other than
(i) shares as to which dissenters' rights have been perfected and
not withdrawn or otherwise forfeited under Section 12: 131 of the
LBCL and (ii) shares owned beneficially by Hibernia or its
subsidiaries, shall, by virtue of the Initial Merger
automatically and without any action on the part of the holder
thereof, become and be converted into the right to receive cash
in the amount set forth in Section 3.7 hereof;
(b) holders of certificates which represent shares of
Seller Common Stock outstanding immediately prior to the
Effective Date (hereinafter called "Old Certificates") shall
cease to be, and shall have no rights as, shareholders of Seller;
(c) each share of Seller Common Stock held in the
treasury of Seller or owned beneficially by Hibernia or any of
its subsidiaries shall be cancelled; and
(d) Old Certificates shall be exchangeable by the
holders thereof in the manner provided in the transmittal
materials described below for cash in the amount set forth in
Section 3.7 hereof.
3.2. Transmittal Materials. As promptly as
practicable after the Effective Datedate hereof, or such later
date as Hibernia and Seller shall agree, Hibernia shall send or
cause to be sent to each shareholder of record of Seller
transmittal materials for use in exchanging Old Certificates for
certificates representing Hibernia Common Stock and a check
representing cash paid in lieu of fractional shares, if anyash or
other immediately available funds. 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 the
funds to which holders of Old Certificates shall be entitled
pursuant to the terms hereof. If any funds are to be delivered
to someone other than the person in whose name an Old Certificate
surrendered for exchange is issued, the Old Certificate so
surrendered shall be properly endorsed and otherwise be 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 distribution agent to be
appointed by Hibernia in connection with such payments (the
"Distribution Agent") that such taxes are not payable. Hibernia
shall make arrangements so payable.that shareholders of Seller
who have properly returned the transmittal materials and their
Old Certificates on or before the day that is two business days
prior to the Effective Date may obtain their cash in immediately
available funds on the Effective Date.
3.3. Rights as Shareholders. Former shareholders of
Seller will have no rights as shareholders of Hibernia as a
result of the Mergers, and shall not be entitled to dividends or
other distributions to holders of Hibernia Common Stock at any
time after the Effective Date as a result of the Mergers.
3.4. Cancellation of Old Certificates. On and after
the Effective Date there shall be no transfers on the stock
transfer books of Seller or Hibernia of the shares of Seller
Common Stock which were issued and outstanding immediately prior
to the Effective Date. If, on or after the Effective Date, Old
Certificates are properly presented to Hibernia, they shall be
cancelled and exchanged for cash as herein provided. Any other
provision of this Agreement notwithstanding, neither the
Distribution Agent nor any party hereto shall be liable to a
holder of Seller Common Stock for any amount paid or property
delivered in good faith to a public official pursuant to any
applicable abandoned property, escheat, or similar law.
3.5. Property Transfers. From time to time, as and
when requested by Hibernia and to the extent permitted by
Louisiana law, the officers and directors of Seller last in
office shall execute and deliver such deeds and other instruments
and shall take or cause to be taken such further or other actions
as shall be necessary in order to vest or perfect in or to
confirm of record or otherwise to Hibernia title to, and
possession of, all the property, interests, assets, rights,
privileges, immunities, powers, franchises, and authorities of
Seller, and otherwise to carry out the purposes of this
Agreement.
3.6. Dissenters' Shares. Shares of Seller Common
Stock held by any holder having rights of a dissenting
shareholder as provided in Part XIII of the LBCL, who shall have
properly objected to the Initial Merger and who shall have
properly demanded payment on his stock in accordance with and
subject to the provisions of Section 12:131 of the LBCL, shall
not be converted as provided in Section 3.1 hereof until such
time as such holder shall have failed to perfect, or shall have
effectively lost, his right to appraisal of and payment for his
shares of Seller Common Stock, at which time such shares shall be
converted as provided in Section 3.1 hereof.
3.7. Cash Payable for Shares. Each share of Seller
Class A Common Stock issued and outstanding immediately prior to
the Effective Date shall be converted, on the Effective Date,
into the right to receive cash from Hibernia in the amount of
$193.5245990 per share, and each share of Seller Class B Common
Stock shall be converted, on the Effective Date, into the right
to receive cash from Hibernia in the amount of $96.76229999 per
share. HNB agrees to provide such cash, but its failure to do so
shall not relieve Hibernia of its obligations under this Section
3.7. HNB
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. Except as otherwise provided here, Hibernia
shall cause to be provided as soon as practicable after the
Effective Date for the employees of Seller and the Bank
immediately prior to the Effective Date the employee benefits
then made available to employees of Hibernia and its
subsidiaries, subject to the terms and conditions under which
those employee benefits are made available to such employees;
provided, however, that for purposes of determining the
eligibility of an employee of Seller or the Bank (or both) to
receive the benefits to which such employee shall be entitled
under Hibernia's benefits plans after the Effective Date, any
period of employment of such employee with Seller or the Bank
shall be deemed equivalent to having been employed for that same
period by Hibernia and/or its subsidiaries and provided further,
however, that if Hibernia determines in good faith that it cannot
merge any benefit plan of Seller into a comparable benefit plan
of Hibernia without creating significant potential liability for
Hibernia's plan, or adding or reducing any substantial benefit
then existing under Hibernia's plan, then Hibernia shall be
entitled to freeze the existing benefit plan of Seller and
prohibit participation by former employees of Seller in
Hibernia's plan for the period of time required by applicable law
to ensure that Hibernia's benefit plans are not deemed to be
successor plans of the Seller plan in question.
In addition, Hibernia shall continue in effect in accordance
with its terms Seller's and Bank's deferred compensation plan,
will permit contributions to the plan of any bonus paid to
participants prior to the Effective Date, and will hold such
funds in trust for participants in accordance with the terms of
the plan until distribution of the funds from the plan to
participants. Hibernia acknowledges that it will assume all of
Seller's and Bank's rights and obligations under the employee
arrangements listed on Schedule 5.
6. Negative Covenants. From the date hereof until the
Effective Date, or until the termination of this Agreement,
Seller covenants and agrees that it will not do, or agree to
commit to do, and Seller will cause the Bank not to do and not to
agree or commit to do, without the prior written consent of
Hibernia, any of the following:
(a) in the case of Seller (and not the Bank), make,
declare, set aside or pay any dividend or declare or make any
distribution on, or directly or indirectly combine, redeem,
purchase or otherwise acquire, any shares of Seller Common Stock
(other than in a fiduciary capacity); provided, however, that
Seller may pay quarterly dividends from the date hereof until the
Closing Date in amounts not to exceed $1.50 per share of Class A
Common Stock per quarter and $.75 per share of Class B Common
Stock per quarter and, if the Effective Date occurs other than at
the end of a calendar quarter as to which a dividend has been
paid, a final dividend prior to the Effective Date equal to the
product of (i) $1.50 per share of Class A Common Stock and $.75
per share of Class B Common Stock, in each case multiplied by
(ii) a fraction the numerator of which is the number of days in
any fiscal quarter(s) that has elapsed since the end of the most
recent fiscal quarter for which a quarterly dividend was paid and
the denominator of which is the total number of days in such
fiscal quarter(s).
(b) authorize the creation or issuance of or issue any
additional shares of its capital stock, or any options, calls,
warrants, stock appreciation rights or commitments relating to
its capital stock or any securities or obligations convertible
into or exchangeable for, or giving any person any right to
subscribe for or acquire from it, shares of its capital stock;
(c) except as set forth on Schedule 6(c) hereto, enter
into any employment contracts with, increase the rate of
compensation of, or pay or agree to pay any bonus to, any of its
directors, officers or employees, except in accordance with
existing policy; provided, however, that Seller may pay the
bonuses under Seller's Management Compensation Incentive Plan and
Commercial Lender Incentive Program on Schedule 6(c) hereto on or
before the Closing Date, which bonuses will reduce any bonus to
which any employee receiving the same would be entitled to under
any bonus plan of Hibernia for performance during 1996.
(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, except as set forth on Schedule 6(d) hereto.
(e) other than as contemplated hereby, and except as
set forth on Schedule 6(e) hereto (i) carry on its business other
than in the usual, regular and ordinary course in substantially
the same manner as heretofore conducted, (ii) amend its or the
Bank's Articles of Incorporation or Bylaws, (iii) impose, or
suffer the imposition, on any share of stock held by Seller in
the Bank, of any material lien, charge, or encumbrance, or permit
any such lien to exist, (iv) establish or add any automatic
teller machines or branch or other banking offices, (v) make any
capital expenditures in excess of $25,000 or (vi) take any action
that would materially and adversely affect the ability of any
party hereto to obtain the approvals necessary for consummation
of the transactions contemplated hereby or that would materially
and adversely affect Seller's ability to perform its covenants
and agreements hereunder;
(f) except with respect to transactions contemplated
hereby, merge with any other corporation or bank or permit any
other corporation or bank to merge into it or consolidate with
any other corporation or bank; acquire control over any other
firm, bank, corporation or organization or create any subsidiary
(except in a fiduciary capacity or in connection with
foreclosures in bona fide loan transactions); liquidate; or sell
or dispose of any assets or acquire any assets, otherwise than in
the ordinary course of its business consistent with its past
practice; or
(g) knowingly fail to comply with any laws,
regulations, ordinances, or governmental actions applicable to it
and to the conduct of its business in a manner significant,
material and adverse to its business.
7. Representations and Warranties of Seller. Seller (and
not its directors or officers in their personal capacities)
hereby represents and warrants that , except as set forth on
Schedule 7 hereto:
7.1. Recitals. The facts set forth in the preamble to
this Agreement with respect to it are true and correct.
7.2. Organization and Qualification. Each of Seller
and the Bank is a corporation or bank duly organized, validly
existing, and in good standing under the laws of the State of
Louisiana or the United States; each of Seller and the Bank has
the corporate power and authority to carry on its business as it
is now being conducted and to own, lease and operate its assets,
properties and business; and Seller has all requisite power and
authority to execute and deliver this Agreement and perform its
obligations hereunder.
7.3. Ownership of Other Banks. Seller does not own,
directly or indirectly, 5 percent or more of the outstanding
capital stock or other voting securities of any corporation,
bank, or other organization except the Bank. The presently
authorized capital stock of the Bank consists solely of 1,050,000
shares of common stock of the par value of $10 each, of which
1,050,000 shares of common stock are outstanding. The
outstanding shares of capital stock of the Bank are validly
issued and outstanding, fully paid and, except as may be affected
by 12 U.S.C. Section 55, nonassessable, and, except as provided
on Schedule 7.3 hereto, all of such shares are owned by Seller,
free and clear of all liens, claims and encumbrances.
7.4. Corporate Authorization. The execution, delivery
and performance of this Agreement have been authorized by
Seller's Board of Directors, and, subject to the approval of this
Agreement by its shareholders in accordance with the LBCL, all
corporate acts and other proceedings required for the due and
valid authorization, execution, delivery and performance by
Seller of this Agreement and the consummation of the Mergers have
been validly and appropriately taken. Subject to such
shareholder approval and to such regulatory approvals as are
required by law, this Agreement is a legal, valid and binding
obligation of Seller, enforceable against Seller in accordance
with its terms, except that enforcement may be limited by
bankruptcy, reorganization, insolvency and other similar laws and
court decisions relating to or affecting the enforcement of
creditors' rights generally and by general equitable principles
or principles of Louisiana law that are similar to equitable
principles in jurisdictions that recognize a distinction between
law and equity.
7.5. No Conflicts. Except as disclosed on Schedule 7.5
hereto, tThe execution and delivery of this Agreement by Seller
does not, and the consummation of the transactions contemplated
hereby by it will not, constitute (i) a breach or violation of,
or a default under, any law, rule or regulation or any judgment,
decree, order, governmental permit or license, or agreement,
indenture or instrument of Seller or the Bank or to which Seller
or the Bank is subject, which breach, violation or default would
have a material and adverse effect on the financial condition,
properties, businesses or results of operations of Seller and the
Bank taken as a whole or on the transactions contemplated hereby,
(ii) to the best of the knowledge of Seller's management, a
breach or violation of, or a default under, any law, rule or
regulation or any judgment, decree, order, governmental permit or
license, or agreement, indenture or instrument of Seller or the
Bank or to which Seller or the Bank is subject, or (iii) a breach
or violation of, or a default under, the Articles of
Incorporation or Bylaws of Seller or the Bank; and the
consummation of the transactions contemplated hereby will not
require any consent or approval under any such law, rule,
regulation, judgment, decree, order, governmental permit or
license or the consent or approval of any other party to any such
agreement, indenture or instrument, other than any required
approvals of shareholders and applicable regulatory authorities.
7.6. Financial Statements; Dividend Restrictions.
Seller has delivered to Hibernia prior to the execution of this
Agreement true and correct copies of the following consolidated
financial statements (collectively referred to herein as the
"Seller Financial Statements"): Seller's Consolidated Balance
Sheets as of March 31, 1996 and 1995 (unaudited) and December
31, 1995, 1994 and 1993 (audited); Consolidated Statements of
Income and Changes in Stockholders' Equity and Consolidated
Statements of Cash Flows for the years ended December 31, 1995,
1994 and 1993 (audited), and Consolidated Statements of Income
for the three-month periods ended March 31, 1996 and 1995 nine-
month periods ended September 30, 1995 and 1994 (unaudited).
Each of the Seller Financial Statements (including the related
notes) fairly presents the consolidated results of operations of
Seller and the Bank for the respective periods covered thereby
and the consolidated financial condition of Seller and the Bank
as of the respective dates thereof (subject, in the case of
unaudited statements, to year-end audit adjustments that will not
be material in amount or effect), in each case in accordance with
GAAP consistently applied during the periods involved, except as
may be noted therein. Except as disclosed in the Seller Financial
Statements, including the notes thereto, 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,
bank holding companies or national banks generally) precluding
Seller or the Bank from paying dividends, in each case when, as
and if declared by its Board of Directors.
7.7. No Material Adverse Change. Since March 31,
1996December 31, 1995, there has been no event or condition of
any character (whether actual, or to the knowledge of Seller or
the Bank, threatened or contemplated) that has had or can
reasonably be anticipated to have a material adverse effect on
the financial condition, results of operations, business or
prospects of Seller or the Bank, excluding changes in laws or
regulations that affect banking institutions generally.
7.8. Litigation and Proceedings. Except as set forth
on Schedule 7.8 hereto, nNo litigation, proceeding or controversy
before any court or governmental agency is pending against Seller
that in the opinion of its management is likely to have, or, if
concluded or sustained adversely to Seller, would reasonably be
anticipated to have, a material and adverse effect on the
business, results of operations or financial condition of Seller
or the Bank taken as a whole, and, to the best of Seller's
knowledge, no such litigation, proceeding or controversy has been
threatened or is contemplated. Except as disclosed on Schedule
7.8 hereto, no member of Seller's consolidated group is subject
to any written agreement, memorandum, or order with or by any
bank or bank holding company regulatory authority restricting its
operations or requiring any material actions.
7.9. Material Contracts. Except for this Agreement,
the Initial Merger Agreement, the Holding Company Merger
Agreement, the Bank Merger Agreement and arrangements made in
the ordinary course of business or disclosed on Schedule 7.9
hereto, neither Seller nor the Bank is bound by any material
contract to be performed after the date hereof that is not
terminable by Seller or the Bank without penalty or liability on
thirty days prior notice.
7.10. Brokers' or Finders' Fees. No agent, broker,
investment banker, investment or financial advisor or other
person acting on behalf of Seller or the Bank or under their
authority is entitled to any commission, broker's or finder's fee
from any of the parties hereto in connection with any of the
transactions contemplated by this Agreement, except that certain
fees shall be payable on the Closing Date to Alex Sheshunoff &
Co. Investment Banking as set forth in the engagement letter(s)
attached as Exhibit 7.10 hereto.
7.11. Contingent Liabilities. Except as disclosed on
Schedule 7.11 hereto or as reflected in the Seller Financial
Statements and except in the case of the Bank for unfundedeposit
liabilities, borrowings and loan commitments made in the ordinary
course of business consistent with past practices, as of March
31, 1996December 31, 1995, neither Seller nor the Bank has any
obligation or liability (contingent or otherwise) that was
material, or that when combined with all similar obligations or
liabilities would have been material, to Seller and the Bank
taken as a whole and there does not exist a set of circumstances
resulting from transactions effected or events occurring prior
to, on, or after March 31, 1996, or from any action omitted to be
taken during such period that, to the knowledge of Seller, could
reasonably be expected to result in any such material obligation
or liability.
7.12. Tax Liability. The amounts set up as
liabilities for taxes in the Seller Financial Statements are
sufficient for the payment of all respective taxes (including,
without limitation, federal, state, local, and foreign excise,
franchise, property, payroll, income, capital stock, and sales
and use taxes) accrued in accordance with GAAP and unpaid at the
respective dates thereof.
7.13. Material Obligations Paid. Since March 31,
1996December 31, 1995, neither Seller nor the Bank has incurred
or paid any obligation or liability that would be material to
Seller on a consolidated basis, except for obligations incurred
or paid in connection with transactions by it in the ordinary
course of its business consistent with its past practices.
7.14. Tax Returns; Payment of Taxes. All federal,
state, local, and foreign tax returns (including, without
limitation, estimated tax returns, withholding tax returns with
respect to employees, and FICA and FUTA returns) required to be
filed by or on behalf of Seller or the Bank have been timely
filed or requests for extensions have been timely filed and
granted and have not expired for periods ending on or before
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
Seller or the Bank except as reserved against in the Seller
Financial Statements. All taxes, interest, additions and
penalties due with respect to completed and settled examinations
or concluded litigation have been paid, and Seller's reserves for
bad debts at December 31, 1994, as filed with the Internal
Revenue Service were not greater than the maximum amounts
permitted under the provisions of Section 585 of the Internal
Revenue Code of 1986, as amended (the "Internal Revenue Code").
7.15. Loans. To the best knowledge and belief of its
management, each loan reflected as an asset of Seller in the
Seller Financial Statements, as of March 31, 1996December 31,
1995, or acquired since that date, is the legal, valid, and
binding obligation of the obligor named therein, enforceable in
accordance with its terms, and no loan is subject to any asserted
defense, offset or counterclaim known to Seller, except as
disclosed in writing to Hibernia on or prior to the date hereof.
7.16. Allowance for Loan Losses. The allowances for
possible loan losses shown on the balance sheets of Seller as of
March 31, 1996December 31, 1995 are adequate in all material
respects under the requirements of GAAP to provide for possible
losses, net of recoveries, relating to loans previously charged
off, on loans outstanding (including accrued interest receivable)
as of March 31, 1996December 31, 1995, and each such allowance
has been established in accordance with GAAP.
7.17. Title to Assets; Adequate Insurance Coverage.
(a) As of March 31, 1996, Seller and the Bank had, and
except with respect to assets disposed of for adequate
consideration in the ordinary course of business since such date,
now have, good and merchantable title to all real property and
good and merchantable title to all other material properties and
assets reflected in the Seller Financial Statements as
Statementsowned by Seller or the Bank, free and clear of all
mortgages, liens, pledges, restrictions, security interests,
charges and encumbrances of any nature except for (i) mortgages
and encumbrances which secure indebtedness which is properly
reflected in the Seller Financial Statements or which secure
deposits of public funds as required by law; (ii) liens for taxes
accrued by not yet payable; (iii) liens arising as a matter of
law in the ordinary course of business with respect to
obligations incurred after March 31, 1996, provided that the
obligations secured by such liens are not delinquent or are being
contested in good faith; (iv) such imperfections of title and
encumbrances, if any, as do not materially detract from the value
or materially interfere with the present use of any of such
properties or assets or the potential sale of any such owned
properties or assets; and (v) capital leases and leases, if any,
to third parties for fair and adequate consideration. Seller and
the Bank own, or have valid leasehold interests in, all material
properties and assets, tangible or intangible, used in the
conduct of its business. Any real property and other material
assets held under lease by Seller or the Bank are held under
valid, subsisting and enforceable leases with such exceptions as
are not material and do not interfere with the use made or
proposed to be made by Hibernia in such lease of such property.
(b) With respect to each lease of any real property or
a material amount of personal property to which Seller or the
Bank is a party, except for financing leases in which Seller or
the Bank is lessor, (i) such lease is in full force and effect in
accordance with its terms; (ii) all rents and other monetary
amounts that have become due and payable thereunder have been
paid; (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) none of
the Mergers will constitute a default or a cause for termination
or modification of such lease.
(c) Neither Seller nor the Bank has any legal
obligation, absolute or contingent, to any other person to sell
or otherwise dispose of any substantial part of its assets or to
sell or dispose of any of its assets except in the ordinary
course of business consistent with past practices.
(d) To the knowledge and belief of its management, the
policies of fire, theft, liability and other insurance maintained
with respect to the assets or businesses of Seller and the Bank
provide adequate coverage against loss and the fidelity bonds in
effect as to which Seller or the Bank is named insured meet the
applicable standards of the American Bankers Association.
7.18. Employee Plans. To the best of Seller's
knowledge and belief, it, the Bank, and all "employee benefit
plans," as defined in Section 3(3) of the Employee Retirement
Income Security Act of 1974, as amended ("ERISA"), that cover one
or more employees employed by Seller or the Bank:
(i) is in compliance with all laws, regulations,
reporting and licensing requirements and orders applicable to its
business or to such plan or any of its employees (because of such
employee's activities on behalf of it), the breach or violation
of which could have a material and adverse effect on such
business; and
(ii) has received no notification from any agency
or department of federal, state or local government or the staff
thereof asserting that any such entity is not in compliance with
any of the statutes, regulations or ordinances that such
governmental authority enforces, or threatening to revoke any
license, franchise, permit or governmental authorization, and is
subject to no agreement with any such governmental authority with
respect to its assets or business.
7.19. Copies of Employee Plans. Attached as Schedule
7.19 hereto are 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 Seller or the
Bank for its or the Bank's employees or former employees.
7.20. Plan Liability. Except for liabilities to the
Pension Benefit Guaranty Corporation pursuant to Section 4007 of
ERISA, all of which have been fully paid, and except for
liabilities to the Internal Revenue Service under section 4971 of
the Internal Revenue Code, all of which have been fully paid,
neither Seller nor the Bank has any liability to the Pension
Benefit Guaranty Corporation or to the Internal Revenue Service
with respect to any pension plan qualified under Section 401 of
the Internal Revenue Code.
7.21. No Default. Neither Seller nor the Bank is in
default in any material respect under any contract, agreement,
commitment, arrangement, lease, insurance policy or other
instrument listed on Schedule 7.9 to which it is a party or by
which its respective assets, business or operations may be bound
or affected or under which it or its respective assets, business
or operations receive benefits, and there has not occurred any
event that with the lapse of time or the giving of notice or both
would constitute such a default.
7.22. Minutes. Prior to the date hereof, Seller has
made available to Hibernia, for inspection pursuant to the terms
of Section 9.5 hereof, the minutes of meetings of Seller's and
the Bank's respective Boards of Directors and all committees
thereof held prior to the date hereof, which minutes are complete
and correct in all respects and fully and fairly present the
deliberations and actions of such Boards and committees and
accurately reflect the business condition and operations of
Seller and the Bank as of the dates and for the periods indicated
therein.
7.23. Insurance Policies. Attached hereto as Schedule
7.23 is a schedule detailing all policies of fire, theft, public
liability, and other insurance (including without limitation
fidelity bonds and directors and officers liability insurance)
maintained by Seller or the Bank at the date hereof. Except as
disclosed on Schedule 7.23 hereto, neither Seller nor the Bank
has received any notice of a premium increase or cancellation
with respect to any of its insurance policies or bonds, and
within the last three years, neither Seller nor the Bank has been
refused any insurance coverage sought or applied for, and it has
no reason to believe that existing insurance coverage cannot be
renewed as and when the same shall expire, upon terms and
conditions as favorable as those presently in effect, other than
possible increases in premiums or unavailability of coverage that
do not result from any extraordinary loss experience of Seller or
the Bank.
7.24. Investments. Except for pledges to secure
public or trust deposits, none of the investments reflected in
the Seller Financial Statements under the heading "Investment
Securities," and none of the investments made by Seller or the
Bank since December 31, 1995, and none of the assets reflected in
the Seller Financial Statements under the heading "Cash and Due
From Banks," is subject to any restriction, whether contractual
or statutory, that materially impairs the ability of Seller or
the Bank freely to dispose of such investment at any time. With
respect to all repurchase agreements to which Seller or the Bank
is a party, Seller or the Bank, as the case may be, has a valid,
perfected first lien or security interest in the government
securities or other collateral securing each such repurchase
agreement which equals or exceeds the amount of the debt secured
by such collateral under such agreement.
7.25. Environmental Matters. Neither Seller nor the
Bank nor, to the knowledge of Seller and the Bank, any previous
owner or operator of any properties at any time owned (including
any properties owned as a result of foreclosure of a loan,
whether still owned or subsequently resold) leased, or occupied
by Seller or the Bank or used by Seller or the Bank in their
respective business ("Seller Properties") used, generated,
treated, stored, or disposed of any hazardous waste, toxic
substance, or similar materials on, under, or about Seller
Properties except in compliance with all applicable federal,
state, and local laws, rules, and regulations pertaining to air
and water quality, hazardous waste, waste disposal, air
emissions, and other environmental matters ("Environmental
Laws"). Neither Seller nor the Bank has received any notice of
noncompliance with Environmental Laws, applicable laws, orders,
or regulations of any governmental authorities relating to waste
generated by any such party or otherwise or notice that any such
party is liable or responsible for the remediation, removal, or
clean-up of any site relating to Seller Properties.
8. Representations and Warranties of Hibernia. Hibernia
(and not its directors or officers in their personal capacities)
hereby represents and warrants as follows:
8.1. 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 HNB has the corporate power
and authority to carry on its business as it is now being
conducted and to own, lease and operate its assets, properties
and business, and Hibernia has all requisite power and authority
to execute and deliver this Agreement and perform its obligations
hereunder.
8.2. Due Authorization. The execution, delivery and
performance of this Agreement have been authorized by Hibernia's
and HNB's Boards 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,
Interim Company and HNB of this Agreement and the transactions
contemplated hereby have been validly and appropriately taken.
Subject to receipt of the regulatory and other approvals required
by Section 12 hereof, each of this Agreement, the Interim Merger
Agreement, the Holding Company Merger Agreement and the Bank
Merger Agreement is a legal, valid, and binding obligation of
Hibernia, and, to the extent applicable, Interim Company and HNB,
enforceable against Hibernia and, to the extent applicable,
Interim Company and HNB, 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.
9. Agreements and Covenants. Hibernia and Seller each
hereby agrees and covenants to the other that:
9.1. Shareholder Approvals. If required by applicable
law, tThis Agreement shall be submitted to its respectiveSeller's
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 itsSeller's shareholders shall be
asked to consider and vote upon this Agreement and the
transactions contemplated hereby.; provided, however, that in
lieu of a shareholder's meeting, Seller may effect such approval
by shareholder consent if Hibernia consents in writing to such
procedure.
9.2. Actions Necessary to Complete Mergers. 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, including, without limitation, compliance with its
covenants herein, 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
Mergers.
9.3. Preparation of Proxy Statement. ItSeller shall
prepare as promptly as practicable jointly with Hibernia hereto a
proxy statement to be mailed to the shareholders of each party
the shareholders of which are to vote upon this AgreementSeller
in connection with the transactions contemplated hereby. The
Proxy Statement, when mailed to the appropriate shareholders,
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.
9.4. Press Releases and Public Statements. Unless
approved by the other in advance, neither Hibernia nor Seller
will issue any press release, marketing or advertising material
or other written statement for general circulation relating to
the transactions contemplated hereby, except as otherwise
required by law. The parties will cooperate in any public
announcements directly related to the Merger; provided, however,
that, in the event Hibernia determines to file a registration
statement under the 1933 Act containing a description of the
terms of the Mergers, or a current report on Form 8-K that
discloses only the substantive facts of a previously released
press release, such filing may be made without prior consultation
with Seller so long as Seller is furnished with a copy of such
registration statement or report within a reasonable time after
its filing.
9.5. Material Developments; Access to Information.
(i) Hibernia shall furnish Seller with copies of
all reports filed by Hibernia with the Securities and Exchange
Commission ("SEC") throughout the period after the date hereof
prior to the Effective Date promptly after such reports are so
filed.
(ii) Subject to the provisions of Section 11, in
order to afford Hibernia access to such information as it may
reasonably deem necessary to perform any due diligence review
with respect to the assets of Seller to be acquired as a result
of the Interim Merger, Seller shall (and shall cause the Bank
to), upon reasonable notice, afford Hibernia and its officers,
employees, counsel, accountants, and other authorized
representatives access, during normal business hours throughout
the period prior to the Effective Date, to all of its and the
Bank's properties, books, contracts, commitments, loan files,
litigation files, and records (including, but not limited to, the
minutes of the Boards of Directors of Seller and the Bank and all
committees thereof), and it shall (and shall cause the Bank to),
upon reasonable notice and to the extent consistent with
applicable law, furnish promptly to Hibernia such information as
Hibernia may reasonably request to perform such review.
(iii) No investigation pursuant to this Section
9.5 shall affect or be deemed to modify any representation or
warranty made by, or the conditions to the obligations to
consummate the Merger of, either party to this Agreement.
9.6. Prohibited Negotiations. Prior to the Effective
Date, neither Seller nor the Bank shall solicit or encourage
inquiries or proposals with respect to, furnish any information
relating to, or participate in any negotiations or discussions
concerning, any acquisition or purchase of all or a substantial
portion of the assets of, or of a substantial equity interest in,
Seller or the Bank or any business combination with Seller or the
Bank other than as contemplated by this Agreement. Seller shall
instruct each officer, director, agent, or affiliate of it or the
Bank to refrain from doing any of the above, and Seller will
notify Hibernia promptly if any such inquiries or proposals are
received by, any such information is requested from, or any such
negotiations or discussions are sought to be initiated with,
Seller; provided, however, that nothing contained in this section
shall be deemed to prohibit any officer or director of Seller or
the Bank from taking any action that, in the opinion of counsel
to Seller or the Bank, a copy of which opinion shall be furnished
to Hibernia upon its request, is required by applicable law,
including any law or provision of law relating to fiduciary
duties of directors and officers.
9.7. Cooperation in Mergers. Promptly upon request by
Hibernia, Seller shall, and it shall cause the Bank to, take any
and all necessary or appropriate actions to cause the Mergers to
occur on the Effective Date.
9.8. Adoption of Accounting Policies. As soon as
practicable after the satisfaction or waiver of all conditions to
the Closing set forth in Section 12 of this Agreement and in any
event prior to the Effective Date (unless this Agreement is
terminated pursuant to Section 13 hereof), Seller shall, and it
shall cause the Bank to, take any and all necessary or
appropriate actions to adopt all Hibernia accounting procedures
and policies (including without limitation those policies
pertaining to charged-off and non-accrual assets); provided,
however, that no such action taken by Seller or the Bank at the
request of Hibernia or HNB pursuant to this Section shall be
deemed to be, or be deemed to cause, a breach of any
representation or warranty made by Seller herein.
9.9. Indemnification of Directors and Officers of
Seller and the Bank.
(a) From and after the Effective Date, Hibernia agrees
to indemnify and hold harmless and, to the extent provided in its
Articles and Bylaws, advance expenses to, each person who, as of
the date immediately prior to the date of this Agreement, served
as an officer or director of Seller or the Bank (an "Indemnified
Person") from and against all damages, liabilities, judgments and
claims (and related expenses including, but not limited to,
attorney's fees and amounts paid in settlement) based upon or
arising from his capacity as an officer or director of Seller or
the Bank, to the same extent as he would have been indemnified or
would have had expenses advanced 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 and advancement of expenses provided by
this Section shall not apply to any claim against an Indemnified
Person if such Indemnified Person knew or should have known of
the existence of the claim and failed to make a good faith effort
to require Seller or the Bank, as the case may be, to notify its
director and officer liability insurance carrier of the existence
of such claim prior to the Closing Date.
(b) The rights granted to the Indemnified Persons
hereby shall be contractual rights inuring to the benefit of all
Indemnified Persons and shall survive this Agreement and any
merger, consolidation or reorganization of Hibernia or HNB.
(c) The rights to indemnification granted by this
subsection 9.9 are subject to the following limitations: (i) the
total aggregate indemnification to be provided by Hibernia
pursuant to subsection 9.9(a) shall not exceed, as to all of the
Indemnified Persons as a group, the sum of $30 million,
and Hibernia shall have no responsibility to any Indemnified
person for the manner in which such sum is allocated among that
group (but nothing in this subsection is intended to prohibit the
Indemnified Persons from seeking reallocation among themselves);
(ii) a director or officer who would otherwise be an Indemnified
Person under this subsection 9.9 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 9.9 hereto; and (iii) amounts otherwise required to be
paid by Hibernia to an Indemnified Person pursuant to this
subsection 9.9 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.
9.10 Covenant to Close. At such time as is deemed
appropriate by the parties hereto or as otherwise set forth in
this Agreement, and upon satisfaction or waiver of each of the
conditions to Closing of the Merger, the parties agree to take
such actions as are reasonably necessary or appropriate to effect
the Closing and the Merger.
10. Permits, Consents and Approvals. As promptly as
practicable after the date hereof:
(a) Within 30 days after the date hereof, if possible,
and if it receives full cooperation from Seller and its
affiliates in providing required information and signatures,
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) Within 30 days after the date hereof, if possible,
and if it receives full cooperation from Seller and its
affiliates in providing required information and signatures,
Hibernia shall submit an application to the Comptroller of the
Currency (the "Comptroller") for approval of the transactionsBank
Merger contemplated hereby in accordance with the provisions of
the Bank Merger Act;
(c) Seller shall endeavor to have each of the directors
and executive officers of Seller and the Bank execute a Lock-Up
and Non-Competition Agreement in substantially the form of
Exhibit 10(c) hereto; provided, however, that Seller shall have
no such obligation prior to the receipt by the Board of Directors
of Seller of the Fairness Opinion.
11. Confidentiality.
11.1 Seller and Bank have made and will make available to
Hibernia information concerning Seller's and Bank's business and
operations. For a period of five years from the date hereof,
Hibernia will treat as confidential such information, whether
furnished before or after the date hereof, together with all
analyses, compilations, studies or other materials prepared by it
or its directors, officers, employees, agents, advisors or
representatives (collectively, "Representatives"), which contain
or otherwise reflect or are generated from such information
(collectively, the "Evaluation Material"), and will be
responsible for any breach of this section by it or its
Representatives. The term "Evaluation Material" does not include
information which (i) is or becomes publicly available other than
as a result of a disclosure by Hibernia or its Representatives;
(ii) was available to Hibernia on a non-confidential basis prior
to its disclosure; (iii) becomes available to Hibernia from a
source other than Seller or Bank who is not known to Hibernia to
be, after inquiry, bound by a confidentiality agreement with
Seller or Bank or otherwise prohibited from transmitting the
information to Hibernia by a contractual, legal or fiduciary
obligation; or (iv) is independently developed by Hibernia
without the use of Evaluation Material.
11.2 Without Seller's prior written consent the Evaluation
Material will not be used other than for the purpose of due
diligence, and will be kept confidential, except for disclosure
only to Representatives who need to know for the purpose
described above, are informed of its confidential nature and are
directed to treat it confidentially and not to use it other than
as permitted by this section.
11.3 Notwithstanding the foregoing, if Hibernia or any of
its Representatives is requested or required by legal process to
disclose any Evaluation Material, it will promptly notify Seller,
and if such request or requirement will result in Hibernia or any
of its Representatives being legally compelled to disclose
Evaluation Material or else stand liable for contempt or suffer
other censure or penalty, it may disclose such portion (and only
such portion) of the Evaluation Material which counsel advises is
legally required to be disclosed, provided that Hibernia
exercises its best efforts to preserve the confidentiality of the
Evaluation Material, including, without limitation, cooperating
with Seller to obtain an appropriate protective order or other
reliable assurance that confidential treatment will be accorded
the Evaluation Material.
11.4 If this Agreement is terminated for any reason,
Hibernia will promptly return the Evaluation Material as soon as
practicable, together with any other material relating to Seller
which it or its Representatives may have received from Seller.
Notwithstanding the return of any Evaluation Material, Hibernia
and its Representatives will continue to be bound by the
confidentiality and other obligations under this section.
11.5 Neither Hibernia nor any of its Representatives for a
period of two years after the date of termination of this
Agreement (without the Mergers having occurred) will, without
Seller's prior consent, solicit for employment any of the
officers or employees of Seller or Bank so long as they are
employed by either.
11.6 The parties hereto acknowledge that the provisions of
this Section 11 shall apply commencing on the date hereof until
the Effective Date, unless the Mergers do not occur, in which
event the provisions hereof shall apply for the periods set forth
in this Section or, if no period is specified herein, the period
that would apply under applicable law.
12. Conditions. The consummation of the Merger is
conditioned upon:
12.1. Shareholder Approval. Approval of this
Agreement by the required vote of shareholders of Seller.
12.2. Federal Reserve Board and OCC Approvals.
Procurement by Hibernia of the approval of the Federal Reserve
Board of the Interim Merger and the Holding Company Merger and
the Comptroller of the Bank Merger and any and all other
transactions contemplated hereby.
12.3. Other Approvals. Procurement of all other
consents and approvals and satisfaction of all other requirements
prescribed by law that are necessary to the consummation of the
transactions contemplated by this Agreement.
12.4. No Restraining Action. No litigation or
proceeding initiated by any governmental authority shall be
pending before any court or agency that shall present a claim to
restrain, prohibit or invalidate the transactions contemplated
hereby and neither Hibernia nor Seller shall be prohibited by any
order of any court or other governmental authority from
consummating the transactions contemplated by this Agreement.
12.5. Opinion of Hibernia Counsel. Seller and its
directors shall have received an opinion, dated the Closing Date,
of counsel for Hibernia, in form and substance satisfactory to
Seller, as to such matters as Seller may reasonably request with
respect to the transactions contemplated hereby.
12.6. Opinion of Seller Counsel. Hibernia, its
directors and its officers who sign the Registration Statement
shall have received an opinion, dated the Closing Date, of
Correro, Fishman & Casteix, for Seller, in form and substance
satisfactory to Hibernia, which shall cover such matters as
Hibernia may reasonably request with respect to the transactions
contemplated hereby.
12.7. Representations, Warranties and Agreements of
Seller. Each of the representations, warranties, and agreements
of Seller contained herein in all material respects shall be true
on, or complied with by, the Closing Date as if made on such date
(or on the date when made in the case of any representation or
warranty which specifically relates to an earlier date) and
Hibernia shall have received a certificate signed by the Chairman
of the Board and the President of Seller, dated the Closing Date,
to such effect; Seller shall have furnished to Hibernia such
other certificates as Hibernia shall reasonably request in
connection with the Closing (as defined in Section 14 hereof),
evidencing compliance with the terms hereof and its status,
business and financial condition. Seller shall have furnished
Hibernia with such further documents or other materials as
Hibernia shall have reasonably requested in connection with the
transactions contemplated hereby; provided, however, that this
condition shall not be applicable unless it would entitle the
other party to terminate the Agreement under Section 13.2.
12.8. Representations, Warranties and Agreements of
Hibernia. Each of the representations, warranties and agreements
of Hibernia contained herein in all material respects shall be
true on, or complied with by, the Closing Date as if made on such
date (or the date when made in the case of any representations or
warranty which specifically relates to an earlier date) and
Seller shall have received a certificate signed by the Chief
Executive Officer and the Treasurer of Hibernia, dated the
Closing Date, to such effect; Hibernia shall have furnished to
Seller such other certificates as Seller shall reasonably request
in connection with the Closing, evidencing compliance with the
terms hereof and its status, business and financial condition.
Hibernia shall have furnished Seller with such further documents
or other materials as Seller shall have reasonably requested in
connection with the transactions contemplated hereby.; provided,
however, that this condition shall not be applicable unless it
would entitle the other party to terminate the Agreement under
Section 13.2.
12.9. Fairness Opinion. Seller shall have received a
letter from Alex Sheshunoff & Co., dated within five days of the
scheduled date of mailing of the Proxy Statement to its
shareholders, that has not been withdrawn as of the Closing Date,
to the effect that the terms of the Mergers are fair to its
shareholders from a financial point of view.
12.10. Assertion of Conditions. A failure to satisfy
any of the requirements set forth in Section 12.5 or 12.8 shall
only constitute conditions to consummation of the Merger if
asserted by Seller and a failure to satisfy any of the
requirements set forth in Section 12.6 or 12.7 shall only
constitute conditions to consummation of the Merger if asserted
by Hibernia.
13. Termination. This Agreement may be terminated prior
to the Closing Date, either before or after its approval by the
shareholders of Seller, 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.
(a) by Hibernia, in the event of a breach by Seller of any
representation or warranty herein, if 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 Seller or the Bank, which in either case cannot be or
is not cured within 60 days after written notice of such breach
is given to the Seller by Hibernia, or (b) by either party
hereto, in the event of a breach of a warranty or covenant, if
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 November 30, 1996, or (ii) any
condition to Closing cannot be satisfied at any time 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 Mergers and the time
period for all appeals or requests for reconsideration thereof
has run.
13.5. Failure to Obtain Shareholder Approval. By
either party hereto, if the Merger is not approved by the
required vote of shareholders of Seller.
13.6 Material Adverse Change. By Hibernia, if a
material adverse change as described in Section 7.7 hereof
occurs, after the date hereof and prior to the Closing.
13.7. 13.8. Fairness Opinion. By Seller, if
it shall not have received a letter from Alex Sheshunoff & Co.,
dated within five days of the scheduled date of mailing of its
proxy statement to its shareholders, to the effect that the terms
of the Merger are fair to its shareholders from a financial point
of view, or if such letter has been received as of that date but
withdrawn prior to the Closing Date.
14. Closing and Effective Date. The closing of the Mergers
(the "Closing") shall take place at the office of Hibernia at 313
Carondelet Street, New Orleans, Louisiana, at 11:00 a.m. local
time, or at such other place or time as shall be mutually
agreeable to the parties hereto, on the first business day
occurring after the last to occur of: (i) the date that falls
3015 days after the date of the order of the Federal Reserve
Board approving the Merger pursuant to the Bank Holding Company
Act; (ii) the date that falls 15 days after the date of the order
of the Comptroller approving the Bank Merger; and (iii) the date
that falls 5 days after the date on which the last meeting of
shareholders called to approve this Agreement is held; or such
other date within 60 days of such date as may be agreed upon
between the parties hereto (the date and time of the Closing
being referred to herein as the "Closing Date"). Immediately
upon consummation of the Closing, or on such other later date as
the parties hereto may agree, the Initial Merger Agreement and
the Holding Company 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 Initial Merger and its Holding Company Merger shall
become effective as of the date and time of
such filing (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, 9.9, and 11 shall survive the Closing, if the
Closing occurs, for the benefit of the entities, shareholders,
directors, officers and employees of Seller who are the intended
beneficiaries of such provisions.
15.3. The provisions of Section 11 and liabilities for
a breach of the provisions of Sections 3.7, 9.2 or 9.10 shall
survive the termination of this Agreement if this Agreement
terminates without the Closing or the Mergers having occurred, in
which event liability for a breach of Section 9.2 or Section 9.10
shall survive the termination of the Agreement provided, however,
that any claim, proceeding or other legal action based upon a
breach of either Section 9.2 or 9.10 shall be filed within 180
days following the date on which the Agreement terminates. It is
the intent of the parties hereto that the period set forth in
this Section 15.3 shall be a contractual statute of limitations
and that (i) the filing of an action within that period will stop
the running of the period, and (ii) failure to file an action
within the period will result in the loss of any and all rights
to file such an action in the future. Nevertheless, no party to
this Agreement shall have a legal right to redress or cause of
action for a breach of Section 9.2 except in those circumstances
in which such breach directly resulted in the termination of the
Agreement.
15.4. In consideration of the mutual benefits and
agreements contained in this Agreement, each of the parties
hereto, on behalf of itself and its successors and assigns,
hereby irrevocably waives any right or cause of action which
otherwise would survive in the absence of this Section 15.
16. Amendment; Waivers. To the extent permitted under
applicable law, prior to the Closing Date any provision of this
Agreement may be amended or modified at any time, either before
or after its approval by the shareholders of the parties hereto,
(i) by an agreement in writing among the parties hereto approved
by their respective Boards of Directors and executed in the same
manner as this Agreement, and (ii) as provided in Section 12:112
of the LBCL. Except with respect to any required shareholder or
regulatory approval, each party hereto, by written instrument
signed by a duly authorized officer of such party, may at any
time (whether before or after approval of this Agreement by the
shareholders of Seller) extend the time for the performance of
any of the obligations or other acts of the other party hereto
and may waive (i) any inaccuracies of the other party in the
representations or warranties contained in this agreement or any
document delivered pursuant hereto, (ii) compliance with any of
the covenants, undertakings, or agreements of the other party, or
satisfaction of any of the conditions precedent to its
obligations, contained herein or (iii) the performance by the
other party of any of its obligations set out herein or therein;
provided that no such waiver executed after approval of this
Agreement by the shareholders of Hibernia or Seller shall change
the number of shares of Hibernia Common Stock into which shares
of Seller Common Stock will be converted by the Mergertherein.
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 or
HNB shall be sent to:
HNB
313 Carondelet Street
New Orleans, Louisiana 70130
Attention: Corporate Law Division
and a copy of all notices or other communications directed to
Seller shall be sent to:
Seller: Calcasieu Marine National Bank
One Lakeshore Drive
Lake Charles, Louisiana 70629
Attention: President
Copy to: William B. Lawton
c/o William B. Lawton Company, Inc.
One Lakeshore Drive
Lake Charles, Louisiana 70629
and
Anthony J. Correro, III, Esq.
Correro, Fishman, and Casteix
201 St. Charles Avenue, Suite 4700
New Orleans, Louisiana 70170
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 agreements related hereto 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.
24. Execution by HNB. The parties acknowledge and agree
that this Agreement shall be executed on behalf of HNB for the
sole purpose of binding HNB to its obligations under Section 3.7
hereof and that such execution shall not have the effect of
binding or obligating HNB in any other manner whatsoever other
than to enter into and perform the Bank Merger Agreement.
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
/s/ Stephen A. Hansel
-------------------------
Stephen A. Hansel
President and Chief Executive
Officer
Attest:
/s/Patricia C. Meringer
- -----------------------
Patricia C. Meringer
Secretary
Hibernia National Bank
/s/ Stephen A. Hansel
-----------------------
Stephen A. Hansel
President and Chief Executive
Officer
Attest:
/s/Patricia C. Meringer
- -----------------------
Patricia C. Meringer
Secretary
CM BANK HOLDING COMPANY (Seller):
By: /s/William B. Lawton
---------------------
William B. Lawton
Chairman of the Board
Attest:
/s/ Jack E. Lawton, Jr.
- -----------------------
Jack E. Lawton, Jr.
Secretary
<PAGE>
Consent of Independent Auditors
We consent to the use of our report dated February 2, 1996,
with respect to the financial statements of CM Bank Holding
Company and Subsidiary, in this Form 8-K of Hibernia
Corporation and to the incorporation by reference of our
report in the Registration Statement (Form S-3) and related
Prospectus of Hibernia Corporation for the registration of
preferred stock and/or subordinated debt securities for
proceeds up to an aggregate of $250,000,000 filed with the
Securities and Exchange Commission.
/s/ LEON C. THERIOT & ASSOCIATES
August 29, 1996
Lake Charles, Louisiana
<PAGE>
NEWS RELEASE---HIBERNIA
For Additional Information: For Release:
MEDIA INQUIRES: IMMEDIATE
Jim Lestelle --Senior Vice President, August 26, 1996
Manager/Corporate Communications
Office: (504) 533-5482; Home: (504) 488-8826
INVESTOR INQUIRIES:
Dana Combes -- Senior Vice President, Manager/Investor
& Government Relations
Office: (504) 533-2180; Home: (504) 895-8480
CALCASIEU MARINE MERGER WITH HIBERNIA BECOMES EFFECTIVE;
A.T.M. NETWORK AVAILABLE IMMEDIATELY
NEW ORLEANS -- Hibernia National Bank made its
statewide automated teller machine (ATM) network available
to southwest Louisiana today as its merger with CM Bank
Holding Company, parent of Calcasieu Marine National Bank,
became effective.
Louisiana's largest statewide bank also wasted no time
giving a preview of two of its most popular loan products
which will be available in the region starting Sept. 3:
TABBSLine, a line of credit for small businesses that is
easy as writing a check and offers flexible repayment terms;
and the Louisiana PurchaseLine, a line of credit that gives
consumers pre-approved purchasing power wherever they go.
Hibernia's full range of products and services will be
available to former Calcasieu Marine customers later this
year when computer systems change over to Hibernia. Signs
also will be changed at that time.
"Hibernia brings financial resources, innovation and
the convenience of statewide banking that have never before
been available to Lake Charles and surrounding communities,:
said A. Hartie Spencer, Hibernia's Lake Charles area
president and formerly president of Calcasieu Marine. "The
reaction to the merger from businesses and individuals has
been encouraging. This is an exciting day for southwest
Louisiana, and all of us are pleased the partnership is now
official."
"Local people continue to offer customers the kind of
hometown service that earned Calcasieu Marine such strong
customer loyalty," said Stephen A. Hansel, Hibernia
president and CEO. "They're also busy serving the
communities where they live and work, but as Hibernia
employees now."
The transaction had already been approved by regulators
and CM Bank Holding Company shareholders. Under the terms
of the agreement, Hibernia purchased all of the outstanding
stock of CM Bank Holding Company for approximately $201.7
million.
With additional pending mergers with $406-million-asset
Texarkana National Bank in east Texas and $254-million-asset
St. Bernard Bank and Trust in suburban New Orleans,
Hibernia's assets will total approximately $8.9 billion.
Hibernia would have 199 banking locations in 29 Louisiana
parishes and one Texas county. It would be either first,
second or third in deposit market share in 24 of these
parishes and first in the one Texas county. Hibernia's
Louisiana markets represent approximately 88% of the state's
population and deposits. Its statewide Louisiana market
share would be more than 17%.
The company's common stock (HIB) is listed on the New
York Stock Exchange.
