<PAGE>
SECURITIES AND EXCHANGE COMMISSION
Washington, D. C. 20549
FORM 10-Q
QUARTERLY REPORT UNDER SECTION 13 OR 15(d)
OF THE SECURITIES EXCHANGE ACT OF 1934
For Quarter Ended September 30, 1996 Commission File Number 1-10294
HIBERNIA CORPORATION
(Exact name of registrant as specified in its charter)
Louisiana 72-0724532
(State or other jurisdiction of (I.R.S. Employer
Identification Number) Identification Number)
313 Carondelet Street, New Orleans, Louisiana 70130
(Address of principal executive offices and zip code)
Registrant's telephone number, including area code (504) 533-5332
Indicate by check mark whether the registrant (1) has filed all
reports required to be filed by Section 13 or 15(d) of the Securities
Exchange Act of 1934 during the preceding 12 months (or for such
shorter period that the registrant was required to file such reports),
and (2) has been subject to such filing requirements for the past 90
days.
Yes X No
Indicate the number of shares outstanding of each of the issuer's
classes of common stock, as of the latest practicable date.
Class Outstanding at October 31, 1996
Class A Common Stock, no par value 122,397,173 Shares
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<TABLE>
<CAPTION>
Consolidated Balance Sheets
Hibernia Corporation and Subsidiaries September 30 December 31 September 30
Unaudited ($ in thousands) 1996 1995 1995
<S> <C> <C> <C>
Assets
Cash and due from banks $ 432,630 $ 384,307 $ 315,957
Short-term investments 245,484 91,003 95,410
Securities available for sale 1,907,284 2,163,123 544,322
Securities held to maturity (estimated fair value
at September 30, 1995 was $1,725,833) - - 1,721,166
Loans, net of unearned income 5,505,957 4,533,822 4,279,129
Reserve for possible loan losses (129,210) (147,678) (152,053)
Loans, net 5,376,747 4,386,144 4,127,076
Bank premises and equipment 162,018 120,339 120,833
Customers' acceptance liability 568 - 115
Other assets 289,268 197,619 193,442
Total assets $8,413,999 $7,342,535 $7,118,321
Liabilities
Deposits:
Demand, noninterest-bearing $1,339,314 $1,187,993 $1,096,164
Interest-bearing 5,700,017 5,041,682 4,966,996
Total deposits 7,039,331 6,229,675 6,063,160
Short-term borrowings 355,612 258,532 238,668
Liability on acceptances 568 - 115
Other liabilities 142,526 112,942 118,861
Debt 7,921 8,667 8,837
Total liabilities 7,545,958 6,609,816 6,429,641
Shareholders' equity
Preferred Stock, no par value:
Authorized - 100,000,000 shares; 2,000,000 shares issued
and outstanding at September 30, 1996 100,000 - -
Class A Common Stock, no par value:
Authorized - 200,000,000 shares; issued 122,344,735,
122,074,527 and 122,061,891 at September 30, 1996,
December 31, 1995 and September 30, 1995, respectively 234,902 234,383 234,359
Surplus 375,466 375,544 375,116
Retained earnings 173,472 120,803 94,069
Treasury stock at cost, 17,407 shares at December 31, 1995 - (183) -
Unrealized gains (losses) on securities available for sale (1,409) 16,562 1,180
Unearned compensation (14,390) (14,390) (16,044)
Total shareholders' equity 868,041 732,719 688,680
Total liabilities and shareholders' equity $8,413,999 $7,342,535 $7,118,321
See notes to consolidated financial statements.
</TABLE>
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<TABLE>
<CAPTION>
Consolidated Income Statements
Three Months Ended Nine Months Ended
Hibernia Corporation and Subsidiaries September 30 September 30
Unaudited ($ in thousands, except per share data) 1996 1995 1996 1995
<S> <C> <C> <C> <C>
Interest income
Interest and fees on loans $115,229 $95,725 $329,781 $272,875
Interest on securities available for sale 30,775 9,081 95,841 28,441
Interest on securities held to maturity - 29,305 - 90,146
Interest on short-term investments 2,252 2,299 6,991 5,745
Total interest income 148,256 136,410 432,613 397,207
Interest expense
Interest on deposits 57,561 54,975 166,978 160,813
Interest on short-term borrowings 3,824 3,800 10,657 9,627
Interest on debt 110 136 326 463
Total interest expense 61,495 58,911 177,961 170,903
Net interest income 86,761 77,499 254,652 226,304
Provision for possible loan losses (15,000) 5 (15,000) (135)
Net interest income after provision
for possible loan losses 101,761 77,494 269,652 226,439
Noninterest income
Service charges on deposits 13,817 11,670 39,000 33,536
Trust fees 3,198 3,015 9,245 8,718
Other service, collection and exchange charges 8,378 7,165 24,306 19,933
Gain on divestiture of banking offices - - - 2,361
Gain on sale of business lines - 281 517 3,345
Other operating income 1,562 2,211 6,417 5,928
Securities gains (losses), net (5,613) (9) (5,613) (53)
Total noninterest income 21,342 24,333 73,872 73,768
Noninterest expense
Salaries and employee benefits 39,505 32,411 111,676 96,343
Occupancy expense, net 6,535 6,635 19,365 19,460
Equipment expense 9,610 5,481 20,477 15,001
Data processing expense 5,583 4,377 15,791 14,692
Foreclosed property expense, net (307) (216) (2,130) (774)
Other operating expense 20,906 15,919 57,964 56,764
Total noninterest expense 81,832 64,607 223,143 201,486
Income before income taxes 41,271 37,220 120,381 98,721
Income tax expense 14,649 3,031 42,444 7,842
Net income $26,622 $34,189 $77,937 $90,879
Net income per common share $0.22 $0.28 $0.65 $0.75
See notes to consolidated financial statements.
</TABLE>
<TABLE>
<CAPTION>
Consolidated Statements of Changes in Shareholders' Equity
Hibernia Corporation and Subsidiaries
Unaudited ($ in thousands, except per-share data)
Shares Outstanding
Preferred Common
Stock Stock Preferred Common Retained
Nine months ended September 30, 1996 (000s) (000s) Stock Stock Surplus Earnings Other Total
<S> <C> <C> <C> <C> <C> <C> <C> <C>
Balances at December 31, 1995 - 122,057 $- $234,383 $375,544 $120,803 $1,989 $732,719
Net income - - - - - 77,937 - 77,937
Issuance of common stock:
Dividend Reinvestment Plan - 75 - 145 646 - 791
Stock Option Plan - 120 - 140 199 - 483 822
Retirement Security Plan - 119 - 229 1,055 - 1,284
Restricted stock awards - 4 - 5 22 - 11 38
Issuance of preferred stock 2,000 - 100,000 - (2,000) - (2,000)
Acquisition of treasury stock - (30) - - - - (311) (311)
Cash dividends declared:
Common ($.21 per share) - - - - - (25,268) (25,268)
Change in unrealized gains (losses)
on securities available for sale - - - - - - (17,971) (17,971)
Balances at September 30, 1996 2,000 122,345 $100,000 $234,902 $375,466 $173,472 ($15,799) $768,041
Shares Outstanding
Preferred Common
Stock Stock Preferred Common Retained
Nine months ended September 30, 1995 (000s) (000s) Stock Stock Surplus Earnings Other Total
Balances at December 31, 1994 - 121,617 $- $234,080 $374,744 $23,851 ($26,908) $605,767
Net income - - - - - 90,879 90,879
Issuance of common stock:
Dividend Reinvestment Plan - 89 - 170 477 - 647
Stock Option Plan - 40 - 57 97 - 94 248
Retirement Security Plan - 63 - - (32) - 512 480
Restricted stock awards - 264 - 52 (122) - 1,902 1,832
Acquisition of treasury stock - (11) - - - - (94) (94)
Purchase of common shares
by ESOP - - - - - - (16,044) (16,044)
Cash dividends declared:
Common ($.18 per share) - - - - - (20,135) - (20,135)
By pooled companies prior
to merger - - - - - (620) - (620)
Change in unrealized gains (losses)
on securities available for sale - - - - - - 25,674 25,674
Other - - - - (48) 94 - 46
Balances at September 30, 1995 - 122,062 $- $234,359 $375,116 $94,069 ($14,864) $688,680
See notes to consolidated financial statements.
</TABLE>
<TABLE>
<CAPTION>
Consolidated Statements of Cash Flows
Hibernia Corporation and Subsidiaries
Nine Months Ended September 30
Unaudited ($ in thousands) 1996 1995
<S> <C> <C>
Operating activities
Net income $77,937 $90,879
Adjustments to reconcile net income to net
cash provided by operating activities:
Provision for possible loan losses (15,000) (135)
Amortization of intangibles and deferred charges 3,626 2,780
Depreciation and amortization 14,940 13,428
Premium amortization, net of discount accretion 3,149 5,474
Realized securities (gains) losses, net 5,613 53
Gain on sale of assets (1,994) (7,161)
Provision for losses on foreclosed and other assets 5,155 759
Decrease (increase) in deferred income tax asset 244 (11,688)
Decrease (increase) in interest receivable and other assets 8,367 (1,288)
Increase in interest payable and other liabilities 21,434 8,172
Net cash provided by operating activities 123,471 101,273
Investing activities
Purchases of securities held to maturity - (159,573)
Purchases of securities available for sale (132,220) (19,967)
Proceeds from sales of securities available for sale 200,349 30,285
Maturities of securities held to maturity - 337,651
Maturities of securities available for sale 385,044 68,179
Net increase in loans (808,727) (838,734)
Proceeds from sales of loans 198,440 109,820
Acquisition of CM Bank Holding Co., net of $131,843 cash acquired (71,093) -
Purchases of premises, equipment and other assets (20,935) (18,520)
Proceeds from sales of foreclosed assets 6,791 5,336
Proceeds from divestiture of banking offices, net of $1,069 cash sold - (13,708)
Proceeds from sales of business lines 517 114,865
Proceeds from sales of premises, equipment and other assets 547 608
Net cash used by investing activities (241,287) (383,758)
Financing activities
Net increase in domestic deposits 199,314 54,733
Net decrease in time deposits - foreign office (14,317) (7,007)
Net increase in short-term borrowings 62,375 79,933
Payments on debt (2,108) (3,009)
Issuance of preferred stock 98,000 -
Issuance of common stock 2,935 3,207
Purchase of common stock by ESOP - (16,044)
Dividends paid (25,268) (20,755)
Acquisition of treasury stock (311) (94)
Net cash provided by financing activities 320,620 90,964
Increase (decrease) in cash and cash equivalents 202,804 (191,521)
Cash and cash equivalents at beginning of year 475,310 602,888
Cash and cash equivalents at end of period $678,114 $411,367
See notes to consolidated financial statements.
</TABLE>
<PAGE>
Notes to Consolidated Financial Statements
Hibernia Corporation and Subsidiaries
Unaudited
Note 1 BASIS OF PRESENTATION The accompanying unaudited
consolidated financial statements have been prepared in accordance
with generally accepted accounting principles for interim financial
information and with the instructions to Form 10-Q and Article 10 of
Regulation S-X. Accordingly, they do not include all of the
information and footnotes required by generally accepted accounting
principles. In the opinion of management, all adjustments (consisting
of normal recurring accruals) considered necessary for a fair
presentation have been included. For further information, refer to
the audited consolidated financial statements and notes included in
Hibernia Corporation's Annual Report on Form 10-K for the year ended
December 31, 1995.
Note 2 MERGER AGREEMENTS On August 26, 1996, Hibernia
Corporation acquired CM Bank Holding Company ("Calcasieu"), parent
company of Calcasieu Marine National Bank, in a transaction accounted
for as a purchase. Calcasieu had $777 million in assets, $352 million
in loans and $625 million in deposits as of August 26, 1996.
Calcasieu shareholders received $201.7 million in cash in connection
with the transaction. Under the purchase method of accounting, the
assets and liabilities of Calcasieu were adjusted to their estimated
fair value as of the purchase date. The excess of cost over the fair
value of net assets acquired was $96.9 million and is being amortized
on a straight-line-basis over 25 years. The results of operations have
been consolidated with those of Hibernia Corporation beginning August
26, 1996.
Unaudited pro forma data giving effect to the purchase of
Calcasieu as if the transaction had occurred at the beginning of each
period presented is included in the table below. Unaudited pro forma
data is not necessarily indicative of future results.
<TABLE>
<CAPTION>
Nine months ended September 30
1996 1995
(in thousands)
<S> <C> <C>
Interest and noninterest income $541,427 $511,329
Net income $67,659 $89,888
Net income per common share $.56 $.74
</TABLE>
On October 1, 1996, Hibernia Corporation acquired St. Bernard
Bank & Trust Co. (St. Bernard), located in suburban New Orleans, in a
transaction accounted for as a purchase. St. Bernard had $244 million
in assets, $32 million in loans and $221 million in deposits as of
October 1, 1996, and was purchased for $46.6 million in cash. The
results of operations of St. Bernard will be consolidated with those
of Hibernia Corporation beginning October 1, 1996 and are not included
in the September 30, 1996 financial statements.
A merger with Texarkana National Bancshares, Inc. ("Texarkana"),
located in northeast Texas, has received regulatory approval and is
pending shareholder approval. Texarkana had $396 million in assets,
$212 million in loans and $336 million in deposits as of September 30,
1996, and Texarkana shareholders will receive approximately $76
million in Hibernia Corporation Class A Common Stock in exchange for
all outstanding shares of Texarkana common stock. It is anticipated
that this transaction will be accounted for as a pooling of interests
when consummated, which is expected in the fourth quarter of 1996.
Note 3 PREFERRED STOCK ISSUANCE On September 30, 1996, Hibernia
Corporation issued 2,000,000 shares of Fixed/Adjustable Rate
Noncumulative Preferred Stock with a $50 per share liquidation
preference. Proceeds from the issuance totaled $98 million, which is
net of $2 million in issuance costs. The 6.9% nonconvertible
preferred stock is redeemable at any time on or after October 1, 2001,
at the option of Hibernia (with prior Federal Reserve Board approval).
Proceeds from the sale of the preferred stock will be used for general
corporate purposes.
Note 4 EMPLOYEE BENEFIT PLANS The Company's stock option
plans provide incentive and non-qualified options to various key
employees and non-employee directors to purchase shares of Class A
Common Stock at no less than the fair market value of the stock at the
date of grant. All options granted prior to 1992 became exercisable
six months from the date of grant. The remaining options granted
under the 1987 Stock Option Plan, the Long-Term Incentive Plan and the
1993 Directors' Stock Option Plan become exercisable in the following
increments: 50% after the expiration of two years from the date of
grant, an additional 25% three years from the date of grant and the
remaining 25% four years from the date of grant. Options granted
under the 1993 Directors' Stock Option Plan become fully vested upon
retirement of the holder.
Options granted under the 1987 Stock Option Plan generally expire
10 years from the date granted. Options granted under the Long-Term
Incentive Plan and the 1993 Directors' Stock Option Plan do not expire
unless the holder dies, retires, becomes permanently disabled or
leaves the employ of the Company, at which time the options expire at
various times ranging from 30 to 365 days. All options vest
immediately upon a change in control of the Company.
At September 30, 1996, the number of shares available for grant
under the 1987 Stock Option Plan, the Long-Term Incentive Plan and the
1993 Directors' Stock Option Plan totaled 152,772; 637,708; and
712,500, respectively.
The tables below summarize the activity in the plans during the
third quarter of 1996:
<TABLE>
<CAPTION>
Incentive Non-Qualified
1987 STOCK OPTION PLAN
<S> <C> <C>
Outstanding, June 30, 1996 160,553 1,348,238
Granted (a) - 5,000
Exercised - (2,268)
Outstanding, September 30, 1996 160,553 1,350,970
Exercisable, September 30, 1996 140,390 1,199,216
LONG-TERM INCENTIVE PLAN
Outstanding, June 30, 1996 12,598 4,973,144
Canceled - (27,365)
Exercised - (23,452)
Outstanding, September 30, 1996 12,598 4,922,327
Exercisable, September 30, 1996 - 1,275,504
(a) The exercise price of the options granted during the third quarter is
$11.5625 per share.
</TABLE>
<TABLE>
<CAPTION>
Incentive Non-Qualified
1993 DIRECTORS' STOCK OPTION PLAN
<S> <C> <C>
Outstanding, June 30, 1996 - 285,000
Exercised - (21,250)
Outstanding, September 30, 1996 - 263,750
Exercisable, September 30, 1996 - 85,000
</TABLE>
Effective April 1, 1995, the Company instituted an employee stock
ownership plan (ESOP) in which substantially all employees
participate. The ESOP is authorized to spend up to $30 million to
acquire Hibernia Corporation Class A Common Stock of which $16 million
has been spent as of September 30, 1996 to acquire 2,008,588 shares.
Note 5 PER SHARE DATA Income per common share is based on the
weighted average number of common shares outstanding of 120,597,052
and 120,423,186 for the three months and nine months ended September
30, 1996, and 120,082,295 and 120,803,057 for the three months and
nine months ended September 30, 1995. These weighted averages exclude
uncommitted shares held by the ESOP.
<PAGE>
<TABLE>
<CAPTION>
QUARTERLY CONSOLIDATED SUMMARY OF INCOME
AND SELECTED FINANCIAL DATA (1)
Hibernia Corporation and Subsidiaries
Three Months Ended Nine Months Ended
Sept. 30 June 30 Sept. 30 Sept. 30 Sept. 30
($ in thousands, except per-share data) 1996 1996 1995 1996 1995
<S> <C> <C> <C> <C> <C>
Interest income $148,256 $143,906 $136,410 $432,613 $397,207
Interest expense 61,495 58,579 58,911 177,961 170,903
Net interest income 86,761 85,327 77,499 254,652 226,304
Provision for possible loan losses (15,000) - 5 (15,000) (135)
Net interest income after provision for possible
loan losses 101,761 85,327 77,494 269,652 226,439
Noninterest income:
Noninterest income 26,955 26,731 24,342 79,485 73,821
Securities gains (losses), net (5,613) - (9) (5,613) (53)
Noninterest income 21,342 26,731 24,333 73,872 73,768
Noninterest expense 81,832 71,352 64,607 223,143 201,486
Income before taxes 41,271 40,706 37,220 120,381 98,721
Income tax expense 14,649 14,103 3,031 42,444 7,842
Net Income $26,622 $26,603 $34,189 $77,937 $90,879
Income per common share (2) $0.22 $0.22 $0.28 $0.65 $0.75
Income per common share (tax effected) (3) $0.22 $0.22 $0.20 $0.65 $0.51
Cash dividends declared per common share (2) $0.07 $0.07 $0.06 $0.21 $0.18
Average common shares outstanding (000s) (2) 120,597 120,384 120,082 120,423 120,803
Selected Quarter-End Balances (in millions)
Loans $5,505.9 $4,989.7 $4,279.2
Deposits 7,039.3 6,293.3 6,063.2
Debt 8.0 6.8 8.8
Equity 868.0 744.4 688.7
Total assets 8,414.0 7,454.7 7,118.3
Selected Average Balances (in millions)
Loans $5,143.2 $4,878.5 $4,150.0 $4,890.1 $3,983.0
Deposits 6,504.8 6,284.3 6,078.5 6,344.8 6,069.5
Debt 7.1 6.9 8.9 7.1 10.2
Equity 749.8 737.1 670.3 742.3 645.5
Total assets 7,741.4 7,454.4 7,166.0 7,529.9 7,090.4
Selected Ratios (%)
Return on average assets 1.38 1.43 1.91 1.38 1.71
Return on average assets (tax effected) (3) 1.38 1.43 1.31 1.38 1.17
Return on average common equity 14.22 14.44 20.40 14.00 18.77
Return on average common equity (tax effected) (3) 14.22 14.44 13.99 14.00 12.85
Return on average total equity 14.20 14.44 20.40 14.00 18.77
Return on average total equity (tax effected) (3) 14.20 14.44 13.99 14.00 12.85
Net interest margin (taxable equivalent) 4.91 4.98 4.70 4.92 4.65
Efficiency (4) 71.18 62.97 62.58 66.02 66.18
Tier 1 risk-based capital 12.65 13.88 14.79
Total risk-based capital 13.91 15.14 16.07
Leverage 9.74 9.86 9.34
(1) All financial information has been restated for mergers accounted for
as poolings of interests. Prior periods have been conformed to current
period presentation.
(2) Income per common share is based on the weighted average number of
common shares outstanding (net of uncommitted ESOP shares) in the
respective period. Dividends per common share are historical amounts.
(3) The effective tax rate in 1995 was significantly less than the
Company's statutory tax rate due to the recognition of deferred tax
benefits. Previously reported operating results are adjusted to
reflect a 37% effective tax rate for 1995 to improve the comparability
of these amounts to 1996 results.
(4) Noninterest expense as a percentage of taxable-equivalent net interest
income plus noninterest income (excluding securities transactions).
</TABLE>
<PAGE>
MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND
RESULTS OF OPERATIONS
Management's Discussion and Analysis presents a review of the major
factors and trends affecting the performance of Hibernia Corporation
(the "Company" or "Hibernia") and its bank subsidiary, Hibernia
National Bank (the "Bank"), and should be read in conjunction with the
consolidated financial statements, notes and tables. Financial data
for all periods presented have been restated for mergers accounted for
as poolings of interests. On August 26, 1996, Hibernia completed its
acquisition of CM Bank Holding Company ("Calcasieu"), parent company
of Calcasieu Marine National Bank. Because the transaction was
accounted for as a purchase, the results of operations of Calcasieu
are included with those of Hibernia from the transaction date.
THIRD-QUARTER 1996 HIGHLIGHTS
Hibernia Corporation's third-quarter 1996 results showed continued
improvement in earnings per share on a comparable basis over the third
quarter of 1995, healthy loan and deposit increases and strong
noninterest income growth. Last year's results reflected a lower-than-
normal effective federal income tax rate as the Company recognized
deferred tax benefits. To make comparisons to 1996 results more
meaningful, 1995 net income and earnings per share results are
adjusted on a proforma, fully tax-effected basis, whereby tax expense
is assumed at an effective tax rate of 37%.
Net income for the third quarter of 1996 totaled $26.6
million ($.22 per share). For the third quarter of 1995,
reported net income of $34.2 million ($.28 per share) would
have been $23.4 million ($.20 per share) on a fully tax-
effected basis. Therefore, on a comparable basis, net
income for the third quarter of 1996 improved 14% and
earnings per share rose 10%.
Net income for the first nine months of 1996 totaled $77.9
million ($.65 per share). Reported net income of $90.9
million ($.75 per share) for the first nine months of 1995
would have been $62.2 million ($.51 per share) on a fully
tax-effected basis. On a comparable basis, net income
improved 25% and earnings per share rose 27% for the first
nine months of 1996.
Returns on assets (ROA) and total equity (ROE), were 1.38%
and 14.20%, respectively, for the third quarter of 1996
compared to 1.31% and 13.99% on a fully tax-effected basis
in the third quarter of 1995. Reported ROA and ROE for the
third quarter of last year were 1.91% and 20.40%,
respectively.
The ROA for the first nine months of 1996 was 1.38%
compared to 1.17%, on a fully tax-effected basis, and 1.71%
as reported for the same periods in 1995. The ROE for the
first nine months of 1996 was 14.00% compared to 12.85% for
the first nine months of 1995, on a fully tax-effected
basis. Reported ROE for the first nine months of 1995 was
18.77%.
Third-quarter 1996 pre-tax results improved compared to
the same period last year because of a $9.3 million (12%)
increase in net interest income (resulting from an improved
net interest margin and higher average earning assets), a
$15.0 million negative provision for loan losses and a $2.6
million (11%) improvement in noninterest income, excluding
securities transactions. These increases were partially
offset by a $17.2 million (27%) increase in overhead and
$5.6 million in securities losses. Contributing to the
increase in overhead were $4.0 million in asset write-downs
related to technological enhancements, $3.3 million in
additions to reserves for health care benefits and other
expenses, $2.2 million in expenses related to Calcasieu, and
$2.4 million related to Hibernia's strategic improvement
process, Vision 2000.
For the first nine months of 1996, the increase in pre-tax
income over 1995 was due to the same factors as the
quarterly improvement. For the nine-month period net
interest income increased $28.3 million (13%) and
noninterest income, excluding securities transactions, rose
$5.7 million (8%), while overhead increased $21.7 million
(11%), with year-to-date Vision 2000 expenses totaling $6.0
million.
Total loans were up $1,226.7 million (29%) from September
30, 1995, to $5.5 billion at September 30, 1996. Consumer
loans increased $599.3 million (29%) to $2.7 billion and
commercial loans grew $627.4 million (28%) to $2.8 billion.
Asset quality remained strong with reserve coverage of
nonperforming assets at almost 897% at September 30, 1996
compared to 775% at September 30, 1995. Total nonperforming
assets declined to $20.4 million, down 28% from a year ago.
Nonperforming assets as a percentage of loans plus
foreclosed assets and excess bank-owned property were
reduced to 0.37%, compared to 0.66% at September 30, 1995.
On September 30, 1996, Hibernia raised $100 million in
capital by issuing two million shares of Fixed/Adjustable
Rate Noncumulative Preferred Stock at $50 per share. The
stock is non-convertible and redeemable at Hibernia's option
(with prior Federal Reserve Board approval) at any time on
or after October 1, 2001. The initial dividend of 6.90%,
payable quarterly, is fixed for five years. Thereafter, the
dividend rate will be adjusted quarterly based on yields of
various U.S. government securities.
In October 1996, Hibernia's Board of Directors increased
the quarterly cash dividend on common stock by 14%,
declaring a $.08 per common share cash dividend.
The addition of Calcasieu, which had $777 million in
assets, $352 million in loans, $625 million in deposits and
21 banking offices located in four southwest Louisiana
parishes, gives the Company a major presence in the only
region of the state where Hibernia previously did not have a
significant market share.
After completion of two mergers pending at September 30,
1996, assets would increase to approximately $9 billion.
Hibernia would then have 199 locations in 29 Louisiana
parishes and two Texas counties. Merger activity is
summarized below:
<TABLE>
<CAPTION>
Assets Number
at 9/30/96 of Accounting
Bank Holding Company/Bank (millions) Offices Method Merger Date
<S> <C> <C> <C> <C>
St. Bernard Bank & Trust Co. $244 11 Purchase October 1, 1996 (1)
Texarkana National Bancshares, Inc./ $396 9 Pooling Fourth Quarter 1996 (2)
Texarkana National Bank
(1) Completed.
(2) Anticipated. Pending shareholder approval.
</TABLE>
FINANCIAL CONDITION:
EARNING ASSETS
Earning assets averaged $7.1 billion in the third quarter of 1996, a
$456.5 million (7%) increase from the third-quarter 1995 average of
$6.7 billion. For the first nine months of 1996, average earning
assets increased $397.7 million (6%) from the first nine months of
1995. The purchase transaction with Calcasieu accounted for
approximately $153.0 million of the quarterly increase and $51.4
million of the increase for the nine-month period. The increases in
average earning assets for both the current quarter and the first nine
months of 1996 were due to increases of over $900 million in average
loans, partially offset by decreases of approximately $550 million in
average securities. Hibernia has funded the loan growth through the
reinvestment of proceeds from maturing securities and increases in
deposits and borrowed funds.
Loans. Average loans for the third quarter of 1996 of $5.1 billion
were up $264.7 million (5%) from the second quarter of 1996 and up
$993.2 million (24%) compared to the third quarter of 1995. Average
loans for the first nine months of 1996 compared to the first nine
months of 1995 increased $907.1 million (23%). Calcasieu added
approximately $113.9 million to third quarter 1996 average loans and
$38.3 million to average loans for the first nine months of 1996.
Table 1 presents the Company's commercial loans classified by
repayment source and consumer loans according to type at September 30,
1996, June 30, 1996 and September 30, 1995. Total loans increased
$516.2 million (10%) during the third quarter of 1996, with
approximately two-thirds of the increase resulting from Calcasieu.
Commercial loans increased $276.9 million (11%), while consumer loans
increased $239.3 million (10%). Calcasieu accounted for $207.1
million of the increase in commercial loans. Calcasieu accounted for
$139.7 million of the increase in consumer loans, with the remainder
of the increase resulting from growth in adjustable-rate residential
mortgage loans. Compared to September 30, 1995, loans increased
$1,226.7 million (29%). Commercial loans were up $627.4 million
(28%), and consumer loans increased $599.3 million (29%) with growth
in virtually all categories of consumer loans.
Securities. Average securities decreased $550.7 million (23%) in
the third quarter of 1996 compared to the third quarter of 1995. For
the first nine months of 1996 average securities decreased $552.7
million (22%). The decreases are the result of the reinvestment of
maturing securities into higher-yielding loans, partially offset by
the effect of the Calcasieu transaction, which added $39.1 million and
$13.1 million to the averages for the current quarter and first nine
months of 1996, respectively.
Average securities available for sale increased approximately $1.3
billion for the third quarter and the first nine months of 1996
compared to the same periods in 1995. In December 1995, in accordance
with the Financial Accounting Standards Board Special Report, "A Guide
to Implementation of Statement 115 on Accounting for Certain
Investments in Debt and Equity Securities" (Guide), the Company chose
to reclassify all of its securities held to maturity to the available
for sale portfolio. The amortized cost of the transferred securities
was $1.6 billion and net unrealized gains were $20.2 million. This
reclassification gives the Company greater flexibility in managing the
portfolio for income, interest-rate risk and liquidity. Although net
unrealized gains or losses in the available for sale portfolio are
reflected as a separate component of equity, these gains or losses are
not included in regulatory capital for purposes of computing capital
adequacy ratios.
As a result of this reclassification, Hibernia had no securities
designated as held to maturity for the third quarter or the first nine
months of 1996 compared to averages of $1.8 billion in the third
quarter of 1995 and $1.9 billion for the first nine months of 1995.
Short-Term Investments. Average short-term investments (primarily
federal funds sold) for the three months ended September 30, 1996, of
$167.7 million were up $14.0 million (9%) compared to an average of
$153.7 million in the third quarter of 1995.
ASSET QUALITY
Table 2 presents a summary of nonperforming assets at the end of the
past five quarters. Table 3 presents a summary of changes in
nonperforming loans for the three-month and nine-month periods ended
September 30, 1996 and 1995.
Nonperforming assets -- which include nonaccrual loans, restructured
loans, foreclosed assets and excess bank-owned property -- totaled
$20.4 million at September 30, 1996, including $1.1 million in
nonaccrual loans resulting from the Calcasieu transaction.
Nonperforming assets were down 28% compared to $28.2 million at
September 30, 1995 and down $3.6 million (15%) compared to $23.9
million at June 30, 1996. Nonperforming loans, which totaled $14.4
million at September 30, 1996, declined $5.2 million (27%) from a year
ago, and declined $3.0 million (17%) from the second quarter of 1996.
Foreclosed assets totaled $3.7 million at September 30, 1996, down
$2.6 million (41%) from a year earlier, and up $.2 million (6%) from
June 30, 1996. Excess bank-owned property at September 30, 1996 was
unchanged from $2.2 million a year earlier, and down $.7 million (25%)
from June 30, 1996.
At September 30, 1996, the recorded investment in loans considered
impaired under SFAS No. 114 was $14.4 million. The related reserve
for possible loan losses was $2.6 million. The comparable amounts at
September 30, 1995 were $18.3 million and $2.0 million, respectively.
These loans are included in nonaccrual loans in Table 2.
As illustrated in Table 3, loans totaling $8.1 million were added to
nonperforming loans during the third quarter of 1996. Payments and
sales resulted in a $6.0 million reduction in nonperforming loans and
charge-offs further reduced nonperforming loans in the third quarter
of 1996 by $4.4 million. Nonperforming assets as a percentage of
total loans plus foreclosed assets and excess bank-owned property at
September 30, 1996, improved to .37%, down from .66% a year ago and
.48% at June 30, 1996.
In addition to the nonperforming assets discussed above, other
commercial loans for which payments are current that are subject to
potential future classification as nonperforming totaled $30.2 million
as of September 30, 1996.
RESERVE AND PROVISION FOR POSSIBLE LOAN LOSSES
As a result of continued asset quality improvement and strong reserve
coverage, a $15 million negative provision for possible loan losses
was recorded for the third quarter of 1996. After this negative
provision, the reserve for possible loan losses as a percentage of
nonperforming loans was 897% at September 30, 1996, compared to 775%
at September 30, 1995 and 826% at June 30, 1996.
Net charge-offs totaled $5.1 million in the third quarter of 1996,
compared to $.2 million in the third quarter of 1995. For the first
nine months of 1996, net charge-offs totaled $8.8 million compared to
$1.8 million for the same period in 1995. As a percentage of average
loans, annualized net charge-offs in the third quarter of 1996 and
1995 were .40% and .02%, respectively. The net charge-off ratio for
the first nine months of 1996 was .24% compared to .06% for the first
nine months of 1995. Net charge-offs were up primarily due to
increased losses in indirect lending as the portfolio grew almost 20%
in the 12 months ended September 30, 1996.
The reserve for possible loan losses totaled $129.2 million, or
2.35% of total loans, at September 30, 1996, compared to $152.1
million, or 3.55%, a year earlier. In terms of both dollar amount and
as a percentage of loans, the reserve for possible loan losses has
been declining since the end of 1993 as a result of net charge-offs
and negative provisions. Management has deemed the present level to
be adequate to absorb future potential loan losses inherent in the
existing portfolio, considering the level and mix of the loan
portfolio, current economic conditions and market trends. Because
factors such as loan growth and the future collectibility of loans are
uncertain, the level of future provisions (positive or negative), if
any, cannot be predicted. Table 4 presents an analysis of the
activity in the reserve for possible loan losses for the third quarter
and the first nine months of 1996 and 1995.
FUNDING SOURCES:
DEPOSITS AND BORROWINGS
Deposits. Average deposits totaled $6.5 billion in the third quarter
of 1996, a $426.3 million (7%) increase from the third quarter of 1995
due to both internal growth and the Calcasieu transaction. Average
core deposits were up $159.0 million (3%) primarily because of
Calcasieu.
Table 5 presents the composition of average deposits for the third
and second quarters of 1996 and the third quarter of 1995.
NOW account average balances were down $437.1 million and money
market deposit accounts were up $400.2 million in the third quarter of
1996 compared to the third quarter of 1995. During the fourth quarter
of 1995, Hibernia instituted a new product, the Reserve Money Manager
account, in which each NOW account is joined with a money market
account. As needed, funds are moved from the money market account to
cover items presented for payment to the customer's NOW account up to
a maximum of six such transfers per statement cycle. For the third
quarter of 1996 the effect of the Reserve Money Manager account was
$520.7 million (reducing NOW account average balances and increasing
money market deposit account average balances). Net of this effect,
NOW account average balances were up $83.6 million (12%) and money
market deposit account average balances were down $120.5 million
(12%).
Calcasieu accounted for approximately 40% of the growth in average
NOW account balances in the third quarter of 1996 compared to the
third quarter of 1995, with internal growth accounting for the
remaining increase. Money market deposit accounts declined because
the rate paid on these accounts was less attractive than those of
other investment products. For the first nine months of 1996 the
effect of the Reserve Money Manager accounts was $526.9 million. Net
of this effect NOW account average balances were up $67.6 million
(10%) for the first nine months of 1996 compared to the same period in
1995 while money market deposit accounts decreased $120.5 million
(12%) from the first nine months of 1995.
Average noncore deposits increased $267.3 million (29%) from the
third quarter of 1995. Public fund certificates of deposit increased
$167.1 million (24%) and other large-denomination certificates of
deposit increased $104.0 million (59%). The increases in public funds
deposits is due, in part, to greater access in new markets (through
mergers and acquisitions) to public agency funds as well as increases
in funds from existing relationships.
Borrowings. Average borrowings -- which include federal funds
purchased, securities sold under agreements to repurchase (repurchase
agreements) and debt -- increased $30.8 million (10%) to $328.2
million for the third quarter of 1996 compared to the third quarter of
1995. For the first nine months of 1996, borrowings increased $53.8
million (21%) to $307.6 million. The increases for both periods
result primarily from growth in repurchase agreements related to new
cash management products which "sweep" funds from deposit accounts.
Average repurchase agreements increased $21.7 million in the third
quarter of 1996 and $60.9 million for the first nine months of 1996
over the comparable periods in 1995 as a result of continued marketing
of cash management products, which allow Hibernia customers to earn
interest on idle deposits. Fluctuations in short-term borrowings can
also stem from differences in the timing of the expansion of lending
opportunities and the growth of other funding sources (deposits and
proceeds from maturing securities). The Company's reliance on these
funds, while higher than a year ago, is still within parameters
determined by management to be prudent in terms of liquidity and
interest rate sensitivity.
The Company's long-term debt at September 30, 1996, which totaled
$7.9 million, is comprised of advances from the Federal Home Loan Bank
of Dallas.
INTEREST RATE SENSITIVITY
The primary objective of asset/liability management is controlling
interest rate risk. On a monthly basis, management monitors the
sensitivity of net interest income to changes in interest rates
through methods that include simulation and gap reports. Using these
tools, management attempts to optimize the asset/liability mix to
minimize the impact of significant rate movements within a broad range
of interest rate scenarios. Management may alter the mix of floating-
and fixed-rate assets and liabilities, change pricing schedules and
enter into derivative contracts as means of limiting interest rate
risk.
On a limited basis, the Company has entered into interest rate and
foreign exchange rate swap, forward and option contracts to hedge
interest rate or foreign exchange risk on specific assets and
liabilities. At September 30, 1996, Hibernia held a $6.9 million
foreign exchange rate forward contract to protect against exchange
rate risk on a loan to be repaid in a foreign currency.
Derivative financial instruments are also held or issued by the
Company for trading purposes to provide customers the ability to
manage their own interest rate and foreign exchange risk. In general,
matched trading positions are established to minimize risk to the
Company. The notional value of these instruments totaled $211.5
million at September 30, 1996. In addition to these customer-related
derivative financial instruments, the Company has entered into
contracts for its own account which total $31.8 million. As of
September 30, 1996, Hibernia's risk of loss due to interest rate
fluctuations on trading derivatives was approximately $.2 million.
RESULTS OF OPERATIONS:
NET INTEREST INCOME
Taxable-equivalent net interest income for the three months ended
September 30, 1996, totaled $88.0 million, a $9.1 million increase
from the same period in 1995 and a $1.4 million increase from the
second quarter of 1996. For the first nine months of 1996, net
interest income increased $27.9 million over the first nine months of
1995 to $258.5 million.
Factors contributing to the increase from the third quarter of 1995
include: the effect of the Calcasieu transaction ($1.8 million); the
positive effect of the change in the mix of earning assets from lower-
yielding securities to loans, which comprised 72.0% of average earning
assets in the third quarter of 1996 compared to 62.1% in the third
quarter of 1995; overall growth in earning assets; lower rates paid on
deposits and borrowings; and higher yields on securities. These
factors were partially offset by lower yields on loans (market rates
in the third quarter of 1996 were down over 40 basis points from the
third quarter of 1995). The increase in net interest income in the
third quarter of 1996 compared to the second quarter of 1996 was due
to the same factors discussed above except that loan yields were down
18 basis points (primarily due to the income received in the second
quarter of 1996 on nonaccrual and previously charged-off loans) and
deposit and borrowing costs were unchanged .
Table 6 details the net interest margin for the most recent five
quarters. Table 7 shows the composition of earning assets for the
most recent five quarters, revealing the change in the mix of earning
assets.
The increase in net interest income for the first nine months of
1996 compared to the same period in 1995 was also the result of the
change in the mix of earning assets, the growth of earning assets, the
decline in funding costs, and the increase in the yield on the
securities portfolio, partially offset by lower yields on loans as the
income received in the second quarter of 1996 on nonaccrual and
previously charged-off loans was more than offset by lower rates.
The net interest margin was 4.91% for the third quarter of 1996, up
21 basis points from the third quarter of 1995, and down 7 basis
points from the second quarter of 1996. Excluding income of $2.2
million received in the second quarter of 1996 on two previously
charged-off loans, the net interest margin for that quarter would have
been 4.86%. The net interest margin has improved from prior quarters
primarily due to the positive effect of the change in the mix in
earning assets to higher yielding loans.
The analysis of Consolidated Average Balances, Interest and Rates on
pages 20 and 21 of this discussion presents the Company's taxable-
equivalent net interest income and average balances for the three
months ended September 30, 1996, June 30, 1996 and September 30, 1995
and for the first nine months of 1996 and 1995. The implementation of
the Reserve Money Manager account resulted in increases in the rate
paid on NOW accounts for the current quarter and for the first nine
months of 1996 compared to the same periods in 1995. Excluding the
impact of the Reserve Money Manager account NOW rates would have been
2.23% for the quarter and 2.19% for the first nine months of 1996,
compared to 2.16% and 2.17% for the comparable periods in 1995.
Table 8 presents an analysis of changes in taxable-equivalent net
interest income between the third quarter of 1996 and the second
quarter of 1996 and between the third quarter of 1996 and the third
quarter of 1995.
NONINTEREST INCOME
Noninterest income for the third quarter of 1996 was down $3.0 million
(12%) to $21.3 million compared to the same period of 1995 and up $.1
million for the first nine months of 1996 compared to the first nine
months of 1995. Excluding securities losses and nonrecurring items
included in both 1996 and 1995, noninterest income would be up $2.9
million (12%) for the third quarter of 1996 compared to the third
quarter of 1995 and up $10.2 million (15%) for the first nine months
of 1996 compared to the same period in 1995. Noninterest income from
Calcasieu totaled $.8 million for both periods in 1996.
The nonrecurring items include a $2.4 million gain in the first
quarter of 1995 related to the divestiture of three banking offices in
Northwest Louisiana in connection with Hibernia's merger with Pioneer
Bancshares Corporation; a $.6 million fee earned in the first quarter
of 1995 to amend the terms of a large commercial credit; gains in the
second and third quarter of 1995 to record the sale of the Company's
student loan portfolio and municipal bond administration business
totaling $1.8 million and $1.6 million, respectively; a $1.4 million
gain on the settlement of an acquired loan in the first quarter of
1996; and $.5 million in the second quarter of 1996 to record an
additional gain related to the sale of the municipal bond
administration business.
The major categories of noninterest income for the three months and
nine months ended September 30, 1996, and the comparable periods in
1995 are presented in Table 9.
Service charges on deposits increased $2.1 million (18%) for the
third quarter of 1996 and $5.5 million (16%) for the first nine months
of 1996 over the comparable periods in 1995 primarily due to increases
in the price for certain deposit activities and the number of consumer
and commercial accounts, as well as $.4 million additional service
charge income relating to Calcasieu.
Other service, collection and exchange fees were up $1.2 million
(17%) and $4.4 million (22%) in the third quarter and the first nine
months of 1996, respectively, compared to the same periods in 1995.
The major factors in these increases were $.2 million relating to
Calcasieu; significant growth in fees generated by the Bank's upgraded
and expanded ATM network; fees resulting from the successful
introductions in 1996 of Hibernia's "Checkmate" debit card and
"Capital Access," a credit card for small businesses; and growth in
fees from retail investment services as Hibernia successfully marketed
fixed annuity products.
Excluding the nonrecurring items previously mentioned, other income
was down $.6 million (29%) for the third quarter of 1996 and down $.3
million (6%) for the first nine months of 1996 compared to the same
periods in 1995.
NONINTEREST EXPENSE
For the third quarter of 1996, noninterest expense totaled $81.8
million, a $17.2 million (27%) increase from the third quarter of
1995. For the first nine months of 1996 noninterest expense totaled
$223.1 million, a $21.7 million (11%) increase over the first nine
months of 1995. Calcasieu accounted for $2.2 million of the increase.
Expenses for the 1996 periods reflect nonrecurring items which include
$4.0 million in asset write-downs related to technological
enhancements and $3.3 million in additions to reserves for health care
benefits and other expenses. Noninterest expense for the third
quarter and the first nine months of 1996 also includes $2.4 million
and $6.0 million, respectively, related to Hibernia's strategic
improvement process, Vision 2000. Through customer-focused business
process redesign and technology enhancements, this corporate-wide
effort will provide opportunities to increase revenue and reduce
costs. In addition, Vision 2000 will create a culture which will
facilitate continuous improvement. Noninterest expense for the three
months and nine months ended September 30, 1996 and 1995 is presented
by major category in Table 10.
Staff costs, the largest component of noninterest expense, increased
$7.1 million (22%) in the third quarter of 1996 and $15.3 million
(16%) in the first nine months of 1996 compared to the same periods a
year ago. The addition to reserves for health care benefits increased
staff costs by $1.3 million and Calcasieu accounted for $.8 million of
the increase in both 1996 periods. Higher accruals for incentives and
bonuses, reflecting Hibernia's movement toward more performance based
compensation, and increases in various medical and insurance benefits,
totaling $1.5 million for the quarter and $4.0 million for the nine-
month period, were other major factors contributing to these
increases.
Occupancy and equipment expenses increased $4.0 million (33%) in the
third quarter of 1996 and $5.4 million (16%) in the first nine months
of 1996 compared to the same periods in 1995. Asset write-downs of
$4.0 million related to technological enhancements and $.4 million in
expenses related to Calcasieu were the primary factors in the
increases in 1996 over the comparable periods in 1995.
Data processing expenses increased $1.2 million (28%) for the third
quarter of 1996 compared to the third quarter of 1995. For the first
nine months of 1996, data processing expenses increased $1.1 million
(7%). The 1996 periods include $1.4 million and $3.6 million for the
three months and nine months, respectively, in Vision 2000 expenses.
The first nine months of 1995 included approximately $1.0 million in
duplicate expenses to outside vendors as Hibernia completed its
conversion to a new data processor in the first quarter of 1995.
Excluding the Vision 2000 expenses and the duplicate expenses in 1995,
data processing expenses decreased $.2 million for the third quarter
and $1.5 million for the first nine months of 1996 compared to the
same periods in 1995. In addition to the savings from the change in
data processors, increased efficiencies derived from combining the
separate operations of merger partners also contributed to the
decreases.
Income from foreclosed property, net of expenses, totaled $.3
million in the third quarter of 1996, and $2.1 million in the first
nine months of 1996, compared to $.2 million and $.8 million,
respectively, for the same periods a year ago. The first half of 1996
periods included significant gains on the sale of several properties.
Regulatory expenses increased $.3 million in the third quarter of
1996 compared to the third quarter of 1995 as the 1995 period included
a $1.7 million refund of prior FDIC insurance premium expenses. For
the first nine months of 1996 compared to the same period in 1995
regulatory expenses were down $6.4 million (89%). The lower expense
levels (net of the FDIC refund in 1995) are the result of the virtual
elimination of FDIC premiums for well-capitalized, highly-rated banks.
Recently enacted legislation imposed a one-time $4.5 billion
assessment on thrifts and banks with thrift deposits in order to raise
the reserves of the Savings Association Insurance Fund (SAIF) to
legally required reserves. Because Hibernia has no thrift deposits,
the Company did not incur expenses in the third quarter related to
this assessment. However, beginning in 1997, the legislation provides
assessments on banks (based on deposit levels) to pay interest on
bonds of the Financing Corporation (FICO), the proceeds of which were
used in the Savings and Loan bailout of the 1980s. Based on current
deposit levels, the 1997 expense would be approximately $1 million.
Postage increased $.5 million (39%) in the third quarter of 1996 and
$.8 million (23%) for the first nine months of 1996 compared to the
same periods in 1995 due to increased direct marketing efforts.
Telecommunications expenses increased $.3 million (18%), for the
third quarter of 1996 and $1.1 million (22%) for the first nine months
of 1996 compared to the same periods in 1995 primarily due to a change
in the manner in which these expenses are incurred. During 1995,
Hibernia built and outsourced the operation of its own wide area
network to replace the network of its prior data processing provider.
Expenses that were previously included in data processing are
currently classified as telecommunications. In addition, data line
expenses related to the Bank's enhanced ATM network and merger
activity also increased telecommunications expenses.
Professional fees decreased $.5 million (30%) for the third quarter
of 1996, and $1.7 million (31%) for the first nine months of 1996
compared to the same periods in 1995 as the decreases in legal and
professional fees related to mergers and litigation more than offset
Vision 2000 consultant fees. State taxes on bank equity increased $.4
million and $1.2 million, for the third quarter and the first nine
months of 1996, respectively compared to 1995 due to the growth in
equity.
Advertising and promotional expenses increased $.5 million (33%) in
the third quarter of 1996 and $1.7 million (32%) in the first nine
months of 1996 compared to the same periods in 1995 because of a
general increase in advertising and product development activity.
The Company's efficiency ratio, defined as noninterest expense as a
percentage of taxable-equivalent net interest income plus noninterest
income (excluding securities transactions), was 71.18% for the third
quarter of 1996 compared to 62.58% for the same period in 1995. This
ratio for the first nine months of 1996 was 66.02%, down slightly
compared to 66.18% for the first nine months of 1995. The efficiency
ratio for the third quarter of 1996, excluding nonrecurring items, was
64.83%. Excluding nonrecurring items for both periods, the efficiency
ratio for the first nine months of 1996 was 64.64% compared to 67.57%
for the first nine months of 1995. The improvement in efficiency for
the nine months reflects increases in net interest income and
noninterest income combined with proportionately lower increases in
overhead.
INCOME TAXES
The Company recorded $14.6 million in income taxes in the third quarter
of 1996 and $42.4 million in the first nine months of 1996. For the
comparable periods in 1995, federal income tax expense totaled $3.0
million and $7.8 million, respectively. During 1995, the Company
recorded federal income taxes at a lower-than-normal effective tax
rate due to previously unrecognized deferred tax benefits.
The Bank is subject to a Louisiana shareholder tax based partly on
income. The income portion of this tax is recorded as state income
tax. In addition, certain subsidiaries of the Company and the Bank
are subject to Louisiana state income tax.
CAPITAL
Shareholders' equity totaled $868.0 million at September 30, 1996,
compared to $688.7 million at September 30, 1995. The increase is
primarily the result of net income over the most recent 12 months
totaling $112.8 million, and the issuance of $100 million in preferred
stock on September 30, 1996. These increases were partially offset by
$33.8 million in dividends paid on common stock. Risk-based capital
and leverage ratios exceed the ratios required for designation as a
"well-capitalized" institution under regulatory guidelines. Table 11
presents these ratios along with selected components of the capital
ratio calculations for the most recent five quarters.
The acquisitions of Calcasieu and St. Bernard Bank and Trust Co.,
which were completed on August 26 and October 1, 1996, respectively,
have enabled Hibernia to leverage its capital by using purchase
transactions in which assets are acquired without increasing equity.
As a result of these transactions, the Company's capital ratios will
decline from their current levels, but will remain above the standards
required for designation as a "well-capitalized" institution.
The Fixed/Adjustable Rate Noncumulative Preferred Stock issued on
September 30, 1996 is nonconvertible and qualifies as Tier 1 capital.
The issuance allows Hibernia to maintain its strong capital ratios and
enhances its ability to act when future opportunities arise. A shelf
registration statement filed by the Company in July 1996 with the
Securities and Exchange Commission allows the Company to issue up to
$250 million of securities over a two-year period, including preferred
stock and subordinated debt. The remaining $150 million in securities
registered on this shelf registration provides Hibernia with the
flexibility to quickly modify its capital structure to meet
competitive and market conditions.
LIQUIDITY
The loan-to-deposit ratio, one measure of liquidity, was 78.2% at
September 30, 1996, 79.3% at June 30, 1996, and 70.6% at September 30,
1995. The decrease in the current quarter compared to the second
quarter reflects the effect of the Calcasieu transaction which added
$612.1 million in deposits and $347.1 million in loans (a 56.7% loan-
to-deposit ratio). Another indicator of liquidity is the large
liability dependence ratio, which measures the bank's reliance on
short-term borrowings and other large liabilities (such as large-
denomination and public fund CDs and foreign deposits). Based on
average balances, 19.20% of Hibernia's loans and investment securities
were funded by net large liabilities (total large liabilities less
short-term investments) in the third quarter of 1996 compared to
16.12% for the same period in 1995. For the first nine months of 1996
and 1995, these ratios were 17.82% and 15.91%, respectively. Although
short-term borrowings have increased in the past year, a significant
portion of the purchased funds is part of a total customer
relationship, and thus is not subject to the same volatility as other
sources of noncore funds
Liquidity needs can be met by the conversion of assets and by
raising additional funds. Reductions in short-term investments, sales
of securities available for sale and securitization of portions of the
loan portfolio are some of the ways to meet liquidity needs through
the conversion of assets. Hibernia attempts to meet the need for
additional funding primarily through the generation of deposits
through its extensive retail office network. In addition, the
Company's strong financial condition and profitability provide ample
access to large-denomination liabilities as a source of liquidity.
These include certificates of deposit greater than $100,000 and public
fund deposits, as well as funds which can be purchased through the
Bank's membership in the Federal Home Loan Bank of Dallas and from
correspondent banks. The Company can also raise additional funds
through the sale of securities registered on the shelf registration
discussed above.
<TABLE>
<CAPTION>
TABLE 1 - COMPOSITION OF LOAN PORTFOLIO
September 30, 1996 June 30, 1996 September 30, 1995
($ in millions) Loans % Loans % Loans %
<S> <C> <C> <C> <C> <C> <C>
Commercial:
Commercial and
industrial $1,305.5 23.7 % $1,055.4 21.1 % $837.2 19.6 %
Commercial real estate 478.6 8.7 452.0 9.0 470.8 11.0
Services 425.8 7.7 447.0 9.0 334.6 7.8
Health care 205.5 3.7 207.7 4.2 196.7 4.6
Transportation, utilities
and communications 172.5 3.1 171.0 3.4 190.2 4.4
Individuals 112.1 2.1 113.8 2.3 95.9 2.2
Energy 132.7 2.4 108.9 2.2 79.9 1.9
Total commercial 2,832.7 51.4 2,555.8 51.2 2,205.3 51.5
Consumer:
Residential mortgages:
First mortgages 1,209.3 22.0 1,094.1 21.9 948.3 22.1
Junior liens 135.4 2.5 119.8 2.4 88.6 2.1
Indirect 752.3 13.7 730.9 14.7 627.6 14.7
Revolving credit 112.5 2.0 107.9 2.2 86.3 2.0
Other 463.7 8.4 381.2 7.6 323.1 7.6
Total consumer 2,673.2 48.6 2,433.9 48.8 2,073.9 48.5
Total loans $5,505.9 100.0 % $4,989.7 100.0% $4,279.2 100.0%
</TABLE>
<TABLE>
<CAPTION>
TABLE 2 - NONPERFORMING ASSETS
Sept. 30 June 30 March 31 Dec. 31 Sept. 30
($ in thousands) 1996 1996 1996 1995 1995
<S> <C> <C> <C> <C> <C>
Nonaccrual loans $14,409 $17,434 $18,492 $17,318 $19,611
Restructured loans - - - - -
Total nonperforming loans 14,409 17,434 18,492 17,318 19,611
Foreclosed assets 3,742 3,547 5,578 5,344 6,305
Excess bank-owned property 2,220 2,955 3,023 2,946 2,245
Total nonperforming assets $20,371 $23,936 $27,093 $25,608 $28,161
Accruing loans past due
90 days or more $3,258 $3,791 $5,795 $2,794 $2,843
Reserve for possible loan losses $129,210 $143,999 $144,913 $147,678 $152,053
Nonperforming loans as a percentage
of total loans 0.26% 0.35% 0.39% 0.38% 0.46%
Nonperforming assets as a percentage
of total loans plus foreclosed assets
and excess bank-owned property 0.37% 0.48% 0.57% 0.56% 0.66%
Reserve for possible loan losses as a
percentage of nonperforming loans 896.73% 825.97% 783.65% 852.74% 775.35%
</TABLE>
<TABLE>
<CAPTION>
TABLE 3 - SUMMARY OF NONPERFORMING LOAN ACTIVITY
Three Months Ended Nine Months Ended
September 30 September 30
($ in thousands) 1996 1995 1996 1995
<S> <C> <C> <C> <C>
Nonperforming loans
at beginning of period $17,434 $20,858 $17,318 $27,631
Additions 8,113 4,219 17,781 13,159
Charge-offs, gross (4,439) (2,274) (10,267) (7,636)
Returns to performing status (671) (848) (831) (6,372)
Payments and sales (6,028) (2,344) (9,592) (7,171)
Nonperforming loans
at end of period $14,409 $19,611 $14,409 $19,611
</TABLE>
<TABLE>
<CAPTION>
TABLE 4 - RESERVE FOR POSSIBLE LOAN LOSSES ACTIVITY
Three Months Ended Nine Months Ended
September 30 September 30
($ in thousands) 1996 1995 1996 1995
<S> <C> <C> <C> <C>
Balance at beginning of period $143,999 $152,235 $147,678 $153,957
Loans charged off (9,134) (5,203) (22,487) (16,007)
Recoveries 4,030 5,016 13,704 14,238
Net loans charged off (5,104) (187) (8,783) (1,769)
Provision for possible loan losses (15,000) 5 (15,000) (135)
Addition due to acquisition 5,315 - 5,315 -
Balance at end of period $129,210 $152,053 $129,210 $152,053
Reserve for possible loan losses
as a percentage of loans 2.35 % 3.55 % 2.35 % 3.55%
Annualized net charge-offs as a
percentage of average loans 0.40 % 0.02 % 0.24 % 0.06%
</TABLE>
<TABLE>
<CAPTION>
TABLE 5 - DEPOSIT COMPOSITION
Third Quarter 1996 Second Quarter 1996 Third Quarter 1995
Average % of Average % of Average % of
($ in millions) Balances Deposits Balances Deposits Balances Deposits
<S> <C> <C> <C> <C> <C> <C>
Demand, noninterest-bearing $1,154.5 17.8% $1,107.3 17.6% $1,102.3 18.1%
NOW accounts 249.0 3.8 231.4 3.7 686.1 11.3
Money market deposit accounts 1,366.9 21.0 1,395.8 22.2 966.7 15.9
Savings accounts 350.6 5.4 346.3 5.5 352.7 5.8
Other consumer time deposits 2,198.6 33.8 2,107.9 33.6 2,052.8 33.8
Total core deposits 5,319.6 81.8 5,188.7 82.6 5,160.6 84.9
Public fund certificates of
deposit of $100,000 or more 869.4 13.4 832.2 13.2 702.3 11.5
Certificates of deposit of
$100,000 or more 279.4 4.3 219.8 3.5 175.4 2.9
Foreign time deposits 36.4 0.5 43.6 0.7 40.2 0.7
Total deposits $6,504.8 100.0% $6,284.3 100.0% $6,078.5 100.0%
</TABLE>
<TABLE>
<CAPTION>
TABLE 6 - NET INTEREST MARGIN (taxable-equivalent)
1996 1995
Third Second First Fourth Third
Quarter Quarter Quarter Quarter Quarter
<S> <C> <C> <C> <C> <C>
Yield on earning assets 8.34% 8.36% 8.23% 8.27% 8.20%
Rate on interest-bearing liabilities 4.31 4.30 4.34 4.41 4.43
Net interest spread 4.03 4.06 3.89 3.86 3.77
Contribution of
noninterest-bearing funds 0.88 0.92 0.98 0.98 0.93
Net interest margin 4.91% 4.98% 4.87% 4.84% 4.70%
Noninterest-bearing funds
supporting earning assets 20.48% 21.44% 22.46% 22.12% 21.10%
</TABLE>
<TABLE>
<CAPTION>
TABLE 7 - INTEREST-EARNING ASSET COMPOSITION
1996 1995
Third Second First Fourth Third
(Percentage of average balances) Quarter Quarter Quarter Quarter Quarter
<S> <C> <C> <C> <C> <C>
Loans 72.0% 69.9% 67.1% 65.8% 62.1%
Securities available for sale 25.6 27.7 30.1 8.7 8.3
Securities held to maturity - - - 24.2 27.3
Total securities 25.6 27.7 30.1 32.9 35.6
Short-term investments 2.4 2.4 2.8 1.3 2.3
Total interest-earning assets 100.0% 100.0% 100.0% 100.0% 100.0%
</TABLE>
<TABLE>
<CAPTION>
TABLE 8 - CHANGES IN TAXABLE-EQUIVALENT NET INTEREST INCOME (1)
Third Quarter 1996 Compared to:
Second Quarter 1996 Third Quarter 1995
Increase (Decrease) Due to Change In:
($ in thousands) Volume Rate Total Volume Rate Total
<S> <C> <C> <C> <C> <C> <C>
Taxable-equivalent
interest earned on:
Loans $5,988 ($1,124) $4,864 $22,515 ($3,143) $19,372
Securities available for sale (1,769) 1,164 (605) 21,681 339 22,020
Securities held to maturity - - - (29,641) - (29,641)
Short-term investments 39 43 82 199 (246) (47)
Total 4,258 83 4,341 14,754 (3,050) 11,704
Interest paid on:
NOW accounts 132 107 239 (2,971) 1,147 (1,824)
Money market
deposit accounts (167) 65 (102) 2,395 (860) 1,535
Savings accounts 22 60 82 (11) (6) (17)
Other consumer time 1,243 (338) 905 2,052 (1,831) 221
Public fund certificates of
deposit of $100,000 or more 499 356 855 2,322 (942) 1,380
Certificates of deposit
of $100,000 or more 748 (36) 712 1,300 93 1,393
Foreign deposits (98) 12 (86) (54) (48) (102)
Federal funds purchased 82 (5) 77 138 (23) 115
Repurchase agreements 187 42 229 273 (364) (91)
Long-term debt 3 2 5 (28) 2 (26)
Total 2,651 265 2,916 5,416 (2,832) 2,584
Taxable-equivalent
net interest income $1,607 ($182) $1,425 $9,338 ($218) $9,120
(1) Change due to mix (both rate and volume) has been allocated to volume
and rate changes in proportion to the relationship of the absolute
dollar amounts to the changes in each.
</TABLE>
<TABLE>
<CAPTION>
TABLE 9 - NONINTEREST INCOME
Three Months Ended Nine Months Ended
Percentage Percentage
Sept. 30 Sept. 30 Increase Sept. 30 Sept. 30 Increase
($ in thousands) 1996 1995 (Decrease) 1996 1995 (Decrease)
<S> <C> <C> <C> <C> <C> <C>
Service charges on deposits $13,817 $11,670 18 % $39,000 $33,536 16 %
Trust fees 3,198 3,015 6 9,245 8,718 6
Other service, collection and
exchange charges:
Retail investment service income 2,075 1,490 39 6,565 4,646 41
Mortgage loan servicing income 1,863 1,877 (1) 5,429 5,679 (4)
ATM fees 1,752 1,556 13 4,973 3,910 27
Other 2,688 2,242 20 7,339 5,698 29
Total other service, collection
and exchange charges 8,378 7,165 17 24,306 19,933 22
Other income:
Gain on divestiture of
banking offices - - - - 2,361 (100)
Gain on sale of business
lines - 281 (100) 517 3,345 (85)
Other income 1,562 2,211 (29) 6,417 5,928 8
Total other income 1,562 2,492 (37) 6,934 11,634 (40)
Securities gains (losses), net (5,613) (9) N/M (5,613) (53) N/M
Total Noninterest Income $21,342 $24,333 (12)% $73,872 $73,768 - %
N/M=Not meaningful
</TABLE>
<TABLE>
<CAPTION>
TABLE 10 - NONINTEREST EXPENSE
Three Months Ended Nine Months Ended
Percentage Percentage
Sept. 30 Sept. 30 Increase Sept. 30 Sept. 30 Increase
($ in thousands) 1996 1995 (Decrease) 1996 1995 (Decrease)
<S> <C> <C> <C> <C> <C> <C>
Salaries $31,931 $27,608 16 % $91,474 $81,482 12 %
Benefits 7,574 4,803 58 20,202 14,861 36
Total staff costs 39,505 32,411 22 111,676 96,343 16
Occupancy, net 6,535 6,635 (2) 19,365 19,460 -
Equipment 9,610 5,481 75 20,477 15,001 37
Total occupancy and equipment 16,145 12,116 33 39,842 34,461 16
Data processing 5,583 4,377 28 15,791 14,692 7
Foreclosed property expense, net (307) (216) (42) (2,130) (774) (175)
Regulatory expense 278 12 N/M 823 7,213 (89)
Postage 1,676 1,206 39 4,453 3,614 23
Stationery and supplies 1,610 1,421 13 4,605 4,736 (3)
Telecommunications 2,141 1,820 18 6,366 5,236 22
Professional fees 1,167 1,668 (30) 3,711 5,362 (31)
State taxes on bank equity 1,500 1,143 31 4,500 3,321 36
Advertising and promotional
expenses 1,908 1,440 33 6,871 5,206 32
Amortization of intangibles 1,702 928 83 3,626 2,781 30
Other 8,924 6,281 42 23,009 19,295 19
Total Noninterest Expense $81,832 $64,607 27 % $223,143 $201,486 11 %
Efficiency ratio (1) 71.18% 62.58% 66.02% 66.18%
(1) Noninterest expense as a percentage of taxable-equivalent net interest
income plus noninterest income (excluding securities transactions).
N/M = not meaningful
</TABLE>
<TABLE>
<CAPTION>
TABLE 11 - CAPITAL
Sept. 30 June 30 March 31 Dec. 31 Sept. 30
($ in millions) 1996 1996 1996 1995 1995
<S> <C> <C> <C> <C> <C>
Risk-based capital:
Tier 1 $741.8 $733.4 $714.3 $697.1 $667.6
Total 815.8 800.4 778.0 758.3 725.2
Assets:
Quarterly average assets * 7,619.6 7,439.2 7,357.0 7,141.4 7,146.5
Net risk-adjusted assets 5,863.2 5,285.3 5,014.3 4,810.5 4,512.9
Ratios:
Leverage 9.74% 9.86% 9.71% 9.76% 9.34%
Tier 1 risk-based capital 12.65 13.88 14.25 14.49 14.79
Total risk-based capital 13.91 15.14 15.52 15.76 16.07
*Excluding SFAS No. 115 adjustment and disallowed intangibles.
</TABLE>
<TABLE>
<CAPTION>
CONSOLIDATED AVERAGE BALANCES, INTEREST AND RATES
Taxable-equivalent basis (1) Third Quarter 1996 Second Quarter 1995 Third Quarter 1995
(Average balances $ in millions, Average Average Average
interest $ in thousands) Balance Interest Rate Balance Interest Rate Balance Interest Rate
ASSETS
<S> <C> <C> <C> <C> <C> <C> <C> <C> <C>
Interest-earning assets:
Loans (2) $5,143.2 $116,151 8.99% $4,878.5 $111,287 9.17% $4,150.0 $96,779 9.26%
Securities available for sale 1,829.9 31,101 6.79 1,935.6 31,706 6.56 553.5 9,081 6.56
Securities held to maturity - - - - - - 1,827.1 29,641 6.48
Total securities 1,829.9 31,101 6.79 1,935.6 31,706 6.56 2,380.6 38,722 6.50
Short-term investments 167.7 2,252 5.34 164.8 2,170 5.30 153.7 2,299 5.93
Total interest-earning assets 7,140.8 $149,504 8.34% 6,978.9 $145,163 8.36% 6,684.3 $137,800 8.20%
Reserve for possible loan losses (143.6) (145.3) (152.2)
Noninterest-earning assets:
Cash and due from banks 319.4 300.5 317.3
Other assets 424.8 320.3 316.6
Total noninterest-earning assets 744.2 620.8 633.9
Total assets $7,741.4 $7,454.4 $7,166.0
LIABILITIES AND SHAREHOLDERS' EQUITY
Interest-bearing liabilities:
Interest-bearing deposits:
NOW accounts $249.0 $1,909 3.05% $231.4 $1,670 2.90 % $686.1 $3,733 2.16%
Money market deposit accounts 1,366.9 7,924 2.31 1,395.8 8,026 2.31 966.7 6,389 2.62
Savings accounts 350.6 1,874 2.13 346.3 1,792 2.08 352.7 1,891 2.13
Other consumer time deposits 2,198.6 30,069 5.44 2,107.9 29,164 5.56 2,052.8 29,848 5.77
Public fund certificates of deposits
of $100,000 or more 869.4 11,789 5.39 832.2 10,934 5.28 702.3 10,409 5.88
Certificates of deposits of $100,000 or more 279.4 3,505 4.99 219.8 2,793 5.11 175.4 2,112 4.78
Foreign time deposits 36.4 491 5.37 43.6 577 5.32 40.2 593 5.85
Total interest-bearing deposits 5,350.3 57,561 4.28 5,177.0 54,956 4.27 4,976.2 54,975 4.38
Short-term borrowings:
Federal funds purchased 44.1 557 5.03 37.5 480 5.14 33.2 442 5.28
Repurchase agreements 277.0 3,267 4.69 261.2 3,038 4.68 255.3 3,358 5.22
Debt 7.1 110 6.15 6.9 105 6.11 8.9 136 6.03
Total interest-bearing liabilities 5,678.5 $61,495 4.31% 5,482.6 $ 58,579 4.30 % 5,273.6 $58,911 4.43%
Noninterest-bearing liabilities:
Demand deposits 1,154.5 1,107.3 1,102.3
Other liabilities 158.6 127.4 119.8
Total noninterest-bearing liabilities 1,313.1 1,234.7 1,222.1
Total shareholders' equity 749.8 737.1 670.3
Total liabilities and shareholders'equity $7,741.4 $7,454.4 $7,166.0
SPREAD AND NET YIELD
Interest rate spread 4.03% 4.06% 3.77 %
Cost of funds supporting interest-earning assets 3.43% 3.38% 3.50 %
Net interest income/margin $88,009 4.91% $86,584 4.98% $78,889 4.70 %
(1) Based on the statutory income tax rate of 35%.
</TABLE>
<TABLE>
<CAPTION>
CONSOLIDATED AVERAGE BALANCES, INTEREST AND RATES (cont.)
Nine Months Ended Nine Months Ended
Taxable-equivalent basis (1) September 30, 1996 September 30, 1995
(Average balances $ in millions, Average Average
interest $ in thousands) Balance Interest Rate Balance Interest Rate
ASSETS
<S> <C> <C> <C> <C> <C> <C>
Interest-earning assets:
Loans (2) $4,890.1 $332,678 9.09 % $3,983.0 $276,101 9.27 %
Securities available for sale 1,949.2 96,809 6.62 585.2 28,441 6.48
Securities held to maturity - - - 1,916.7 91,248 6.35
Total securities 1,949.2 96,809 6.62 2,501.9 119,689 6.38
Short-term investments 175.2 6,991 5.32 131.9 5,745 5.82
Total interest-earning assets 7,014.5 $436,478 8.31 % 6,616.8 $401,535 8.11 %
Reserve for possible loan losses (145.3) (153.2)
Noninterest-earning assets:
Cash and due from banks 308.4 311.6
Other assets 352.3 315.2
Total noninterest-earning assets 660.7 626.8
Total assets $7,529.9 $7,090.4
LIABILITIES AND SHAREHOLDERS' EQUITY
Interest-bearing liabilities:
Interest-bearing deposits:
NOW accounts $233.3 $5,246 3.00 % $692.6 $11,251 2.17 %
Money market deposit accounts 1,409.5 24,697 2.34 1,003.1 20,479 2.73
Savings accounts 349.7 5,496 2.10 352.5 5,823 2.21
Other consumer time deposits 2,116.5 88,074 5.56 2,009.2 84,030 5.59
Public fund certificates of deposits
of $100,000 or more 826.0 33,237 5.37 693.0 30,904 5.96
Certificates of deposits of $100,000 or more 228.2 8,617 5.04 191.3 6,771 4.73
Foreign time deposits 39.5 1,611 5.45 35.8 1,555 5.81
Total interest-bearing deposits 5,202.7 166,978 4.29 4,977.5 160,813 4.32
Short-term borrowings:
Federal funds purchased 41.6 1,591 5.10 45.6 1,966 5.76
Repurchase agreements 258.9 9,066 4.68 198.0 7,661 5.17
Debt 7.1 326 6.13 10.2 463 6.08
Total interest-bearing liabilities 5,510.3 $177,961 4.31 % 5,231.3 $170,903 4.37 %
Noninterest-bearing liabilities:
Demand deposits 1,142.1 1,092.0
Other liabilities 135.2 121.6
Total noninterest-bearing liabilities 1,277.3 1,213.6
Total shareholders' equity 742.3 645.5
Total liabilities and shareholders' equity $7,529.9 $7,090.4
SPREAD AND NET YIELD
Interest rate spread 4.00 % 3.74 %
Cost of funds supporting interest-earning assets 3.39 % 3.46 %
Net interest income/margin $258,517 4.92 % $230,632 4.65 %
(1) Based on the statutory income tax rate of 35%.
</TABLE>
<PAGE>
PART II. OTHER INFORMATION
Item 6. Exhibits and Reports on Form 8-K
(a) Exhibits
(b) Reports on Form 8-K
A report on Form 8-K dated September 18, 1996,
was filed by the registrant reporting Item 5 Other
Events.
SIGNATURES
Pursuant to the requirements of the Securities Exchange Act of 1934,
the registrant has duly caused this report to be signed on its behalf
by the undersigned thereunto duly authorized to sign on behalf of the
registrant.
HIBERNIA CORPORATION
(Registrant)
Date: November 13, 1996 By: /s/ Ron E. Samford, Jr.
Ron E. Samford, Jr.
Executive Vice President and
Controller (principal accounting
officer)
<TABLE> <S> <C>
<ARTICLE> 9
<CURRENCY> U.S. DOLLARS
<S> <C>
<PERIOD-TYPE> 9-MOS
<FISCAL-YEAR-END> DEC-31-1996
<PERIOD-END> SEP-30-1996
<EXCHANGE-RATE> 1
<CASH> 432,630
<INT-BEARING-DEPOSITS> 484
<FED-FUNDS-SOLD> 245,000
<TRADING-ASSETS> 0
<INVESTMENTS-HELD-FOR-SALE> 1,907,284
<INVESTMENTS-CARRYING> 0
<INVESTMENTS-MARKET> 0
<LOANS> 5,505,957
<ALLOWANCE> 129,210
<TOTAL-ASSETS> 8,413,999
<DEPOSITS> 7,039,331
<SHORT-TERM> 355,612
<LIABILITIES-OTHER> 143,094
<LONG-TERM> 7,921
0
100,000
<COMMON> 234,902
<OTHER-SE> 533,139
<TOTAL-LIABILITIES-AND-EQUITY> 8,413,999
<INTEREST-LOAN> 329,781
<INTEREST-INVEST> 95,481
<INTEREST-OTHER> 6,991
<INTEREST-TOTAL> 432,613
<INTEREST-DEPOSIT> 166,978
<INTEREST-EXPENSE> 177,961
<INTEREST-INCOME-NET> 254,652
<LOAN-LOSSES> (15,000)
<SECURITIES-GAINS> (5,613)
<EXPENSE-OTHER> 223,143
<INCOME-PRETAX> 120,381
<INCOME-PRE-EXTRAORDINARY> 77,937
<EXTRAORDINARY> 0
<CHANGES> 0
<NET-INCOME> 77,937
<EPS-PRIMARY> .65
<EPS-DILUTED> .65
<YIELD-ACTUAL> 4.92
<LOANS-NON> 14,409
<LOANS-PAST> 3,258
<LOANS-TROUBLED> 0
<LOANS-PROBLEM> 30,210
<ALLOWANCE-OPEN> 147,678
<CHARGE-OFFS> 22,487
<RECOVERIES> 13,704
<ALLOWANCE-CLOSE> 129,210
<ALLOWANCE-DOMESTIC> 129,210
<ALLOWANCE-FOREIGN> 0
<ALLOWANCE-UNALLOCATED> 37,500
</TABLE>
