HIBERNIA CORP, 424B1, 1996-09-26

HIBERNIA CORP
424B1, 1996-09-26
NATIONAL COMMERCIAL BANKS

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<PAGE>
FILED PURSUANT TO RULE 424(b)(1)
REGISTRATION NUMBER 333-8133

PROSPECTUS SUPPLEMENT
(To Prospectus dated September 19, 1996)

2,000,000 Shares
Hibernia Corporation
FIXED/ADJUSTABLE RATE NONCUMULATIVE
PREFERRED STOCK, SERIES A

---------------

This Prospectus Supplement relates to the 2,000,000 shares of
Fixed/Adjustable Rate Noncumulative Preferred Stock, Series A, $50 liquidation
preference per share (the "Series A Preferred Stock"), of Hibernia Corporation
("Hibernia"). Dividends on the Series A Preferred Stock are payable quarterly
on January 1, April 1, July 1 and October 1 of each year, commencing January
1, 1997, at a rate of 6.90% per annum through October 1, 2001. Thereafter, the
dividend rate on the Series A Preferred Stock will be the Applicable Rate from
time to time in effect. The Applicable Rate per annum for any dividend period
beginning on or after October 1, 2001 will be equal to .95% plus the highest
of the Treasury Bill Rate, the Ten-Year Constant Maturity Rate and the Thirty-
Year Constant Maturity Rate (each as defined herein), as determined in advance
of such dividend period. The Applicable Rate per annum for any dividend period
beginning on or after October 1, 2001 will not be less than 7.40% nor greater
than 13.40%. The amount of dividends payable in respect of the Series A
Preferred Stock will be adjusted in the event of certain amendments to the
Internal Revenue Code of 1986, as amended (the "Code"), in respect of the
dividends received deduction. See "Description of Series A Preferred Stock --
Dividends."

The Series A Preferred Stock is redeemable at any time on and after October
1, 2001, at the option of Hibernia, in whole or in part, at $50 per share plus
accrued and unpaid dividends (whether or not declared) from the immediately
preceding Dividend Payment Date, as defined herein (but without any cumulation
for unpaid dividends for prior dividend periods) to the date fixed for
redemption. The Series A Preferred Stock may also be redeemed prior to October
1, 2001, in whole, at the option of Hibernia, in the event of certain
amendments to the Code in respect of the dividend received deduction or under
certain circumstances if Hibernia is a party to a merger or consolidation. See
"Description of Series A Preferred Stock -- Redemption." For a description of
the other rights, preferences and privileges of the Series A Preferred Stock,
see "Description of Series A Preferred Stock."

---------------

THESE SECURITIES HAVE NOT BEEN APPROVED OR DISAPPROVED BY THE SECURITIES AND
EXCHANGE COMMISSION OR ANY STATE SECURITIES COMMISSION NOR HAS THE
SECURITIES AND EXCHANGE COMMISSION OR ANY STATE SECURITIES COMMISSION
PASSED UPON THE ACCURACY OR ADEQUACY OF THIS PROSPECTUS SUPPLEMENT OR
THE PROSPECTUS TO WHICH IT RELATES. ANY REPRESENTATION TO THE
CONTRARY IS A CRIMINAL OFFENSE.

---------------

PRICE $50 A SHARE

---------------

<TABLE>
<CAPTION>
PRICE TO UNDERWRITING DISCOUNTS PROCEEDS TO
PUBLIC(1) AND COMMISSIONS(2) HIBERNIA(1)(3)
--------- ---------------------- --------------
<S> <C> <C> <C>
Per Share.................... $50.000 $.625 $49.375
Total........................ $100,000,000 $1,250,000 $98,750,000
</TABLE>
- -------
(1) Plus accrued dividends, if any, from September 30, 1996.
(2) Hibernia has agreed to indemnify the Underwriters against certain
liabilities, including liabilities under the Securities Act of 1933.
(3) Before deducting expenses payable by Hibernia estimated at $315,000.

---------------

The shares of Series A Preferred Stock are offered, subject to prior sale,
when, as and if accepted by the Underwriters and subject to approval of
certain legal matters by Skadden, Arps, Slate, Meagher & Flom, counsel for the
Underwriters. It is expected that delivery of the Series A Preferred Stock
will be made on or about September 30, 1996 at the office of Morgan Stanley &
Co. Incorporated, New York, New York, against payment therefor in immediately
available funds.

---------------

MORGAN STANLEY & CO.
Incorporated

BEAR, STEARNS & CO. INC. LEHMAN BROTHERS SALOMON BROTHERS INC

September 25, 1996
<PAGE>

NO PERSON IS AUTHORIZED IN CONNECTION WITH THE OFFERING MADE HEREBY TO GIVE
ANY INFORMATION OR TO MAKE ANY REPRESENTATION NOT CONTAINED OR INCORPORATED BY
REFERENCE IN THIS PROSPECTUS SUPPLEMENT OR THE PROSPECTUS, AND IF GIVEN OR
MADE, SUCH INFORMATION OR REPRESENTATION MUST NOT BE RELIED UPON AS HAVING
BEEN AUTHORIZED BY HIBERNIA OR BY ANY UNDERWRITER. THIS PROSPECTUS SUPPLEMENT
AND THE PROSPECTUS DO NOT CONSTITUTE AN OFFER TO SELL OR A SOLICITATION OF AN
OFFER TO BUY ANY SECURITY OTHER THAN THE SERIES A PREFERRED STOCK OFFERED
HEREBY TO ANY PERSON IN ANY JURISDICTION IN WHICH IT IS UNLAWFUL TO MAKE ANY
SUCH OFFER OR SOLICITATION TO SUCH PERSON. NEITHER THE DELIVERY OF THIS
PROSPECTUS SUPPLEMENT AND THE PROSPECTUS NOR ANY SALE MADE HEREBY SHALL UNDER
ANY CIRCUMSTANCE IMPLY THAT THE INFORMATION CONTAINED HEREIN IS CORRECT AS OF
ANY DATE SUBSEQUENT TO THE DATE HEREOF.

----------------

TABLE OF CONTENTS

PROSPECTUS SUPPLEMENT

<TABLE>
<CAPTION>
PAGE
----
<S> <C>
HIBERNIA............................ S-3
USE OF PROCEEDS..................... S-4
CAPITALIZATION...................... S-4
SUMMARY FINANCIAL DATA.............. S-5
PRO FORMA FINANCIAL INFORMATION..... S-7
MANAGEMENT'S DISCUSSION AND ANALYSIS
OF FINANCIAL CONDITION AND RESULTS
OF OPERATIONS FOR THE SIX-MONTH
PERIODS ENDED JUNE 30, 1996 AND
1995............................... S-17
MANAGEMENT'S DISCUSSION AND ANALYSIS
OF FINANCIAL CONDITION AND RESULTS
OF OPERATIONS FOR THE YEARS ENDED
DECEMBER 31, 1995, 1994 AND 1993... S-32
CONSOLIDATED RATIO OF EARNINGS TO
FIXED CHARGES...................... S-54
OUTSTANDING CAPITAL STOCK........... S-56
DESCRIPTION OF SERIES A PREFERRED
STOCK.............................. S-56
RECENT TAX PROPOSALS................ S-62
THE UNDERWRITERS.................... S-63
LEGAL OPINIONS...................... S-63
</TABLE>

PROSPECTUS

<TABLE>
<CAPTION>
PAGE
----
<S> <C>
AVAILABLE INFORMATION................ 2
INCORPORATION OF CERTAIN DOCUMENTS
BY REFERENCE........................ 2
BUSINESS OF HIBERNIA................. 3
USE OF PROCEEDS...................... 3
SUPERVISION AND REGULATION........... 3
DESCRIPTION OF PREFERRED STOCK....... 8
DEPOSITARY SHARES.................... 13
DESCRIPTION OF DEBT SECURITIES....... 16
DESCRIPTION OF COMMON STOCK.......... 23
PLAN OF DISTRIBUTION................. 24
LEGAL MATTERS........................ 25
EXPERTS.............................. 25
</TABLE>

----------------

IN CONNECTION WITH THIS OFFERING, THE UNDERWRITERS MAY OVER-ALLOT OR EFFECT
TRANSACTIONS WHICH STABILIZE OR MAINTAIN THE MARKET PRICE OF THE SERIES A
PREFERRED STOCK AT A LEVEL ABOVE THAT WHICH MIGHT OTHERWISE PREVAIL IN THE
OPEN MARKET. SUCH STABILIZING, IF COMMENCED, MAY BE DISCONTINUED AT ANY TIME.

S-2
<PAGE>

HIBERNIA

Hibernia Corporation ("Hibernia" or the "Company") is a Louisiana
corporation registered under the Bank Holding Company Act of 1956, as amended
(the "BHCA"). Hibernia has a single banking subsidiary, Hibernia National Bank
("Hibernia Bank" or the "Bank"), a national banking association with its
principal office in New Orleans, Louisiana. As of June 30, 1996, Hibernia had
total consolidated assets of approximately $7.5 billion, total deposits of
approximately $6.3 billion and shareholders' equity of $744 million. As of
June 30, 1996, Hibernia was ranked, on the basis of total assets, as the 67th
largest bank holding company in the United States and the second largest
headquartered in Louisiana.

During 1995, the Company completed mergers with four institutions with
combined assets of $447 million and 19 offices. During 1994 and 1995 the
Company consummated mergers with 10 institutions with combined assets of $1.8
billion and 64 offices. In 1996, two mergers were completed prior to June 30,
and on August 26, 1996 the Company acquired CM Bank Holding Company
("Calcasieu") and its wholly-owned subsidiary, Calcasieu Marine National Bank,
a national bank headquartered in Lake Charles, Louisiana ("Calcasieu Marine").
As a result of the three transactions consummated in 1996, Hibernia obtained
financial institutions with combined assets of $939 million and 26 offices.
Twelve of the thirteen transactions completed since January of 1994 have been
accounted for as poolings of interests, with the Calcasieu acquisition
accounted for as a purchase.

As of September 1, 1996, Hibernia had entered into agreements to acquire or
merge with two additional banks: St. Bernard Bank & Trust Co., a Louisiana
state bank headquartered in the New Orleans metropolitan area ("St. Bernard"),
for $46 million in cash and Texarkana National Bancshares, Inc. ("Texarkana
Bancshares"), the holding company of Texarkana National Bank, a national bank
headquartered in Texarkana, Texas ("Texarkana"), for Hibernia stock valued at
approximately $70 million. If the transactions with Calcasieu Marine, St.
Bernard and Texarkana had been completed on June 30, 1996, Hibernia would have
had total consolidated assets of $8.8 billion and total deposits of
approximately $7.5 billion on that date. See "Pro Forma Financial
Information." It is anticipated that the transactions with St. Bernard and
Texarkana will be consummated in the fourth quarter of 1996.

At June 30, 1996, Hibernia Bank served customers through a network of 157
banking offices (including free-standing drive-up locations) and 163 automated
teller machines throughout the State of Louisiana. Hibernia Bank offers a
broad array of financial products and services, including retail, commercial,
international, mortgage and private banking; leasing; corporate finance;
treasury management and trust. Through its wholly-owned subsidiaries, Hibernia
Bank also provides retail and discount brokerage services and alternative
investments, including mutual funds and annuities.

Hibernia Bank's corporate finance area provides financial risk management
products and advisory services to its customers. These products are designed
to assist customers in managing their exposure in the areas of interest rate,
currency and commodity risks. Hibernia Bank also offers repurchase agreements,
bankers acceptances, Eurodollar deposits, safekeeping of securities, U.S.
Government and Government agency obligations, tax-free municipal obligations,
reverse repurchase agreements, letters of credit, and collection and foreign
exchange transactions. Hibernia Bank also performs mortgage servicing, which
includes acceptance and application of mortgage loan and escrow payments; at
December 31, 1995, Hibernia serviced over 34,000 residential loans.

The trust division of Hibernia Bank offers a variety of agency, fiduciary,
investment advisory, employee benefit and custodial services. Through Tower
Investors, Inc., its wholly-owned subsidiary, Hibernia Bank sells fixed and
variable annuities in retail markets. Hibernia Bank also provides retail and
discount brokerage services through another wholly-owned subsidiary, Hibernia
Investment Securities, Inc. ("HISI"). HISI is a registered broker-dealer and
member of the National Association of Securities Dealers, Inc.

S-3
<PAGE>

The financial services industry in which the Company and its subsidiaries
operate is highly competitive. Hibernia Bank competes with national and state
banks for deposits, loans, and trust accounts and with savings and loan
associations and credit unions for loans and deposits. In addition, Hibernia
Bank competes with other providers of financial services, from both inside and
outside Louisiana, including finance companies, institutional buyers of
commercial paper, money market funds, brokerage firms, investment companies,
insurance companies and governmental agencies. These competitors are actively
engaged in marketing various types of loans, commercial paper, short-term
obligations, investments and other services.

USE OF PROCEEDS

The net proceeds from the sale of the Series A Preferred Stock will be used
for general corporate purposes, including Hibernia's working capital needs,
the funding of investments in, or extensions of credit to, Hibernia's banking
and non-banking subsidiaries, possible acquisitions of other financial
institutions or their assets, and possible acquisitions of, or investments in,
other businesses of a type eligible for bank holding companies to own. Pending
such use, Hibernia may temporarily invest the net proceeds in investment grade
securities.

CAPITALIZATION

The following table sets forth the historical and pro forma (reflecting all
mergers and acquisitions consummated or pending as of September 1, 1996)
consolidated capitalization of Hibernia and its subsidiaries as of June 30,
1996, and as adjusted to give effect to the issuance of the 2,000,000 shares
of Preferred Stock offered by Hibernia herein.

This table should be read in conjunction with Hibernia's consolidated
historical financial statements and related notes thereto, incoporated herein
by reference, and "Management's Discussion and Analysis of Financial Condition
and Results of Operations," and "Pro Forma Financial Information," each
contained elsewhere herein.

<TABLE>
<CAPTION>
JUNE 30, 1996
---------------------------------
PRO FORMA
HISTORICAL PRO FORMA AS ADJUSTED
---------- --------- -----------
(DOLLARS IN THOUSANDS)
<S> <C> <C> <C>
Debt.......................................... $ 6,813 $ 28,201 $ 28,201
-------- -------- --------
Shareholders' Equity
Common Stock, no par value, 200,000,000
shares authorized, 122,109,986 shares
outstanding historical, and 128,583,266
shares outstanding pro forma and pro forma
as adjusted................................ 234,463 246,892 246,892
Preferred Stock, no par value, 100,000,000
shares authorized, no shares outstanding
historical and pro forma and 2,000,000
shares of Fixed/Adjustable Rate
Noncumulative Preferred Stock, Series A
outstanding on a pro forma as adjusted
basis...................................... -- -- 100,000
Surplus..................................... 375,632 373,213 373,213
Retained Earnings........................... 155,277 183,100 183,100
Treasury Stock.............................. (65) (65) (65)
Unrealized Gains (Losses) on Securities
Available for Sale......................... (6,476) (7,152) (7,152)
Unearned Compensation....................... (14,390) (14,390) (14,390)
-------- -------- --------
Total Shareholders' Equity.................... 744,441 781,598 881,598
-------- -------- --------
TOTAL CAPITALIZATION.......................... $751,254 $809,799 $909,799
======== ======== ========
</TABLE>

S-4
<PAGE>

SUMMARY FINANCIAL DATA
The following tables sets forth, in summary form, certain financial data for
each of the years in the five-year period ended December 31, 1995, the three
month periods ended June 30, 1996, March 31, 1996 and June 30, 1995 and for
the six month periods ended June 30, 1996 and 1995. The selected financial
data for each of the years in the five-year period ended December 31, 1995 are
derived from the consolidated financial statements of Hibernia Corporation at
December 31, 1995 as contained in the Company's Annual Report on Form 10-K for
the year then ended. This summary should be read in conjunction with and is
qualified in its entirety by the financial statements contained in such Annual
Report. Such financial statements do not reflect any mergers pending or
consummated in 1996. The consolidated financial data at and for the six month
and three month periods ended June 30, 1996 and 1995 and the three month
period ended March 31, 1996 are derived from unaudited financial statements
and include all mergers consummated prior to June 30, 1996, but do not include
the consummated merger with Calcasieu or the pending mergers with St. Bernard
or Texarkana. The results for the six months ended June 30, 1996 are not
necessarily indicative of the results for the full year or any other interim
period.
HIBERNIA CORPORATION AND SUBSIDIARIES
YEAR END CONSOLIDATED SUMMARY OF INCOME AND SELECTED FINANCIAL DATA (1)

<TABLE>
<CAPTION>
YEAR ENDED DECEMBER 31
($ IN THOUSANDS, EXCEPT
PER-SHARE DATA) 1995 1994 1993 1992 1991
- ----------------------- -------- -------- -------- -------- ---------
<S> <C> <C> <C> <C> <C>
Interest income.......... $523,175 $448,725 $428,748 $492,182 $ 722,076
Interest expense......... 223,415 165,513 150,426 216,500 426,478
-------- -------- -------- -------- ---------
Net interest income.... 299,760 283,212 278,322 275,682 295,598
Provision for possible
loan losses............. -- (18,069) (3,246) 71,557 184,870
-------- -------- -------- -------- ---------
Net interest income
after provision for
possible loan losses.. 299,760 301,281 281,568 204,125 110,728
-------- -------- -------- -------- ---------
Noninterest income:
Noninterest income..... 97,558 89,391 85,521 87,354 107,406
Securities gains
(losses), net......... (13) (2,451) 285 17,619 17,516
-------- -------- -------- -------- ---------
Noninterest income....... 97,545 86,940 85,806 104,973 124,922
Noninterest expense...... 264,033 287,643 289,405 294,922 368,806
-------- -------- -------- -------- ---------
Income (loss) before
taxes, extraordinary
items and cumulative
effect of accounting
changes............... 133,272 100,578 77,969 14,176 (133,156)
Income tax expense....... 9,413 5,558 11,266 6,734 3,570
-------- -------- -------- -------- ---------
Net income (loss)
before extraordinary
items and cumulative
effect of accounting
changes............... 123,859 95,020 66,703 7,442 (136,726)
Extraordinary loss on
debt restructuring, net
of tax.................. -- -- -- (39,179) --
Utilization of net
operating loss
carryforwards........... -- -- -- 6,181 427
Cumulative effect of
change in accounting for
income taxes............ -- -- 3,009 -- --
Cumulative effect of
change in accounting for
lease expense........... -- -- -- -- (21,643)
-------- -------- -------- -------- ---------
Net income (loss)...... $123,859 $ 95,020 $ 69,712 $(25,556) $(157,942)
======== ======== ======== ======== =========
Income (loss) per share:
(2)
Income (loss) before
extraordinary items and
cumulative effect of
accounting changes...... $ 1.05 $ 0.80 $ 0.57 $ 0.12 $ (2.17)
Extraordinary loss on
debt restructuring, net
of tax.................. -- -- -- (0.61) --
Utilization of net
operating loss
carryforwards........... -- -- -- 0.09 0.01
Cumulative effect of
change in accounting for
income taxes............ -- -- 0.02 -- --
Cumulative effect of
change in accounting for
lease expense........... -- -- -- -- (0.35)
-------- -------- -------- -------- ---------
Net income (loss) per
share................. $ 1.05 $ 0.80 $ 0.59 $ (0.40) $ (2.51)
======== ======== ======== ======== =========
Cash dividends declared
per share (2)........... $ 0.25 $ 0.19 $ 0.03 $ -- $ 0.15
Average shares
outstanding (000s)...... 117,880 118,595 118,023 64,456 62,965
SELECTED YEAR-END
BALANCES (IN MILLIONS)
Loans.................... $4,469.4 $3,627.7 $3,201.4 $3,184.2 $ 4,562.0
Deposits................. 6,085.1 5,901.0 5,721.0 5,633.5 6,850.5
Debt..................... 8.7 11.8 38.7 39.1 141.3
Equity................... 717.2 592.0 551.8 469.6 265.1
Total assets............. 7,196.2 6,779.3 6,653.4 6,519.5 7,732.7
SELECTED AVERAGE BALANCES
(IN MILLIONS)
Loans.................... $4,024.7 $3,374.9 $3,095.7 $3,763.4 $ 5,480.8
Deposits................. 5,922.8 5,773.2 5,592.5 5,988.7 7,552.4
Debt..................... 9.8 24.7 36.7 126.2 146.1
Equity................... 644.5 572.9 508.3 310.5 358.4
Total assets............. 6,950.3 6,691.9 6,440.1 6,836.8 8,463.3
SELECTED RATIOS
Return on average assets. 1.78% 1.42% 1.08% (0.37)% (1.87)%
Return on average equity. 19.22% 16.59% 13.71% (8.23)% (44.07)%
Net interest margin
(taxable-equivalent).... 4.70% 4.61% 4.70% 4.50% 4.00%
Dividend payout ratio.... 23.81% 23.75% 5.08% -- N/M
Average equity/average
assets.................. 9.27% 8.56% 7.89% 4.54% 4.23%
Tier 1 risk-based capital
ratio................... 14.38% 15.25% 14.63% 12.50% 4.85%
Total risk-based capital
ratio................... 15.65% 16.53% 16.05% 13.97% 6.69%
Leverage ratio........... 9.75% 8.90% 7.65% 6.57% 2.71%
</TABLE>
- -------
(1) All financial information has been restated for mergers accounted for as
poolings of interests. Prior years have been conformed to current-year
presentation. Hibernia National Bank in Texas was sold on December 31,
1992. Effective June 30, 1992, and until the date of sale, the accounts of
such bank were reported under the equity method as a single line item in
the financial statements, related tables and charts.
(2) Income (loss) per share data are based on the weighted average number of
common shares outstanding (net of uncommitted ESOP shares) in the
respective period. Dividends per share are historical amounts.

S-5
<PAGE>

HIBERNIA CORPORATION AND SUBSIDIARIES

QUARTERLY CONSOLIDATED SUMMARY OF INCOME
AND SELECTED FINANCIAL DATA (1)

<TABLE>
<CAPTION>
THREE MONTHS ENDED SIX MONTHS ENDED
---------------------------- ------------------
($ IN THOUSANDS, EXCEPT PER- JUNE 30 MARCH 31 JUNE 30 JUNE 30 JUNE 30
SHARE DATA) 1996 1996 1995 1996 1995
- ---------------------------- -------- -------- -------- -------- --------
<S> <C> <C> <C> <C> <C>
Interest income.............. $143,906 $140,450 $133,033 $284,356 $260,798
Interest expense............. 58,579 57,887 58,118 116,466 111,992
-------- -------- -------- -------- --------
Net interest income........ 85,327 82,563 74,915 167,890 148,806
Provision for possible loan
losses...................... -- -- (145) -- (140)
-------- -------- -------- -------- --------
Net interest income after
provision for possible
loan losses............... 85,327 82,563 75,060 167,890 148,946
-------- -------- -------- -------- --------
Noninterest income:
Noninterest income......... 26,731 25,800 25,377 52,531 49,479
Securities gains (losses),
net....................... -- -- (47) -- (44)
-------- -------- -------- -------- --------
Noninterest income........... 26,731 25,800 25,330 52,531 49,435
Noninterest expense.......... 71,352 69,959 67,323 141,311 136,881
-------- -------- -------- -------- --------
Income before taxes........ 40,706 38,404 33,067 79,110 61,500
Income tax expense........... 14,103 13,692 2,316 27,795 4,811
-------- -------- -------- -------- --------
Net Income................. $ 26,603 $ 24,712 $ 30,751 $ 51,315 $ 56,689
======== ======== ======== ======== ========
Income per share (2)......... $ 0.22 $ 0.21 $ 0.26 $ 0.43 $ 0.47
Income per share (tax
effected) (3)............... $ 0.22 $ 0.21 $ 0.17 $ 0.43 $ 0.32
Cash dividends declared per
share (2)................... $ 0.07 $ 0.07 $ 0.06 $ 0.14 $ 0.12
Average shares outstanding
(000s) (2).................. 120,384 120,287 120,446 120,335 121,169
SELECTED QUARTER-END BALANCES
(IN MILLIONS)
Loans........................ $4,989.7 $4,754.9 $4,063.2
Deposits..................... 6,293.3 6,321.1 6,121.8
Debt......................... 6.8 7.1 9.1
Equity....................... 744.4 739.0 659.7
Total assets................. 7,454.7 7,474.6 7,164.8
SELECTED AVERAGE BALANCES (IN
MILLIONS)
Loans........................ $4,878.5 $4,645.8 $3,995.0 $4,762.1 $3,898.0
Deposits..................... 6,284.3 6,243.6 6,044.5 6,264.0 6,064.9
Debt......................... 6.9 7.3 10.6 7.1 10.8
Equity....................... 737.1 740.2 643.0 738.6 632.9
Total assets................. 7,454.4 7,391.7 7,083.0 7,423.1 7,052.0
SELECTED RATIOS (%)
Return on average assets..... 1.43% 1.34% 1.74% 1.38% 1.61%
Return on average assets (tax
effected) (3)............... 1.43 1.34 1.18 1.38 1.10
Return on average equity..... 14.44 13.35 19.13 13.90 17.91
Return on average equity (tax
effected) (3)............... 14.44 13.35 12.96 13.90 12.24
Net interest margin (taxable
equivalent)................. 4.98 4.87 4.62 4.92 4.63
Efficiency (4)............... 62.97 63.76 66.16 63.36 68.02
Tier 1 risk-based capital.... 13.88 14.25 14.78
Total risk-based capital..... 15.14 15.52 16.05
Leverage..................... 9.86 9.71 9.05
</TABLE>
- -------
(1) All financial information has been restated for mergers accounted for as
poolings of interests. Prior periods have been conformed to current year
presentation.
(2) Income per share is based on the weighted average number of common shares
outstanding (net of uncommitted ESOP shares) in the respective period.
Dividends per share are historical amounts.
(3) 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).

S-6
<PAGE>

PRO FORMA FINANCIAL INFORMATION

The following unaudited pro forma combined balance sheet of the Company as
of June 30, 1996 gives effect to (1) the then-pending acquisition of Calcasieu
consummated on August 26, 1996 and the pending acquisition of St. Bernard,
assuming such acquisitions are accounted for under the purchase method of
accounting and (2) the pending merger of Texarkana Bancshares 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 of the Company
for the six months ended June 30, 1996, gives effect to (1) the then-pending
acquisition of Calcasieu and the pending acquisition of St. Bernard, assuming
such acquisitions are accounted for under the purchase method of accounting
and (2) the pending merger of Texarkana Bancshares 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 of the Company
for the year ended December 31, 1995, gives effect to (1) the then-pending
acquisitions 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 pending acquisition of
Calcasieu and the pending acquisition of St. Bernard assuming such
acquisitions are accounted for under the purchase method of accounting and (3)
the pending merger of Texarkana Bancshares 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.

S-7
<PAGE>

HIBERNIA CORPORATION

PRO FORMA COMBINED BALANCE SHEET
JUNE 30, 1996

<TABLE>
<CAPTION>
(A) (B) (C)
CM BANK ST. BERNARD TEXARKANA
HOLDING BANK & TEXARKANA NATIONAL
HISTORICAL CM BANK COMPANY ST. BERNARD TRUST CO. NATIONAL BANCSHARES, INC.
HIBERNIA HOLDING ADJUSTMENTS BANK & ADJUSTMENTS BANCSHARES, ADJUSTMENTS
UNAUDITED ($ IN THOUSANDS) CORPORATION COMPANY DB (CR) TRUST CO. DB (CR) INC. DB (CR)
- -------------------------- ----------- -------- ----------- ----------- ----------- ----------- ----------------
<S> <C> <C> <C> <C> <C> <C> <C>
ASSETS
Cash and due from
banks............. $ 340,241 $ 43,554 $ 10,984 $ 15,251
Short-term
investments....... 61,484 5,200 12,400 5,000
Securities
available for
sale.............. 1,880,789 299,729 $(201,700)(1) 135 $(46,000)(1) 112,220
8,650 (2) 190,707 (2)
(69)(3) (184)(3)
Securities held to
maturity.......... -- 8,650 (8,650)(2) 190,707 (190,707)(2) 41,359
Loans, net of
unearned income... 4,989,682 361,592 (4,213)(3) 29,519 -- 214,833
Reserve for
possible loan
losses.......... (143,999) (2,563) (290) (3,223)
---------- -------- --------- -------- -------- -------- -------
Loans--net..... 4,845,683 359,029 (4,213) 29,229 -- 211,610 --
---------- -------- --------- -------- -------- -------- -------
Bank premises and
equipment......... 119,875 51,961 (5,800)(3) 2,400 8,124
Customers'
acceptance
liability......... 440 -- -- --
Goodwill........... 17,542 -- 85,886 (3) -- 19,513 (3) --
Other intangibles
assets............ 5,317 77 17,158 (3) 22 7,120 (3) --
Other assets....... 183,312 10,619 (2,311)(3) 3,651 (2,428)(3) 7,955
---------- -------- --------- -------- -------- -------- -------
TOTAL ASSETS... $7,454,683 $778,819 $(111,049) $249,528 $(21,979) $401,519 --
========== ======== ========= ======== ======== ======== =======
LIABILITIES
Deposits:
Demand,
noninterest-
bearing........... $1,119,969 $165,300 $ 24,511 $ 44,956
Interest-bearing... 5,173,305 452,596 $ (492)(3) 202,057 290,618
---------- -------- --------- -------- -------- -------- -------
Total Deposits. 6,293,274 617,896 (492) 226,568 -- 335,574 --
---------- -------- --------- -------- -------- -------- -------
Short-term
borrowings........ 290,862 35,318 -- 5,808
Liability on
acceptances....... 440 -- -- --
Other liabilities.. 118,853 12,705 981 2,951
Debt............... 6,813 1,378 19 (3) -- 20,029
---------- -------- --------- -------- -------- -------- -------
TOTAL
LIABILITIES... 6,710,242 667,297 (473) 227,549 -- 364,362 --
---------- -------- --------- -------- -------- -------- -------
SHAREHOLDERS' EQUITY
Preferred Stock.... -- -- -- --
Common Stock....... 234,463 10,500 10,500 375 $ 375 7,356 $(5,073)
Surplus............ 375,632 10,500 10,500 1,625 1,625 2,654 5,073
Retained earnings.. 155,277 93,097 93,097 19,979 19,979 27,823
Treasury stock..... (65) (8) (8) -- --
Unrealized gains
on securities
available for
sale.............. (6,476) (2,567) (2,567) -- (676)
Unearned
compensation...... (14,390) -- -- --
---------- -------- --------- -------- -------- -------- -------
TOTAL
SHAREHOLDERS'
EQUITY........ 744,441 111,522 111,522 (1) 21,979 21,979 (1) 37,157 --
---------- -------- --------- -------- -------- -------- -------
TOTAL
LIABILITIES
AND
SHAREHOLDERS'
EQUITY........ $7,454,683 $778,819 $ 111,049 $249,528 $ 21,979 $401,519 $ 0
========== ======== ========= ======== ======== ======== =======
<CAPTION>
TOTAL
PRO FORMA
HIBERNIA
UNAUDITED ($ IN THOUSANDS) CORPORATION
- -------------------------- ------------
<S> <C>
ASSETS
Cash and due from
banks............. $ 410,030
Short-term
investments....... 84,084
Securities
available for
sale..............
2,244,277
Securities held to
maturity.......... 41,359
Loans, net of
unearned income... 5,591,413
Reserve for
possible loan
losses.......... (150,075)
------------
Loans--net..... 5,441,338
------------
Bank premises and
equipment......... 176,560
Customers'
acceptance
liability......... 440
Goodwill........... 122,941
Other intangibles
assets............ 29,694
Other assets....... 200,798
------------
TOTAL ASSETS... $8,751,521
============
LIABILITIES
Deposits:
Demand,
noninterest-
bearing........... $1,354,736
Interest-bearing... 6,119,068
------------
Total Deposits. 7,473,804
------------
Short-term
borrowings........ 331,988
Liability on
acceptances....... 440
Other liabilities.. 135,490
Debt............... 28,201
------------
TOTAL
LIABILITIES... 7,969,923
------------
SHAREHOLDERS' EQUITY
Preferred Stock.... --
Common Stock....... 246,892
Surplus............ 373,213
Retained earnings.. 183,100
Treasury stock..... (65)
Unrealized gains
on securities
available for
sale.............. (7,152)
Unearned
compensation...... (14,390)
------------
TOTAL
SHAREHOLDERS'
EQUITY........ 781,598
------------
TOTAL
LIABILITIES
AND
SHAREHOLDERS'
EQUITY........ $8,751,521
============
</TABLE>

See notes to Pro Forma Combined Balance Sheet.

S-8
<PAGE>

Hibernia Corporation

Notes to Pro Forma Combined Balance Sheet

A. Calcasieu Pro Forma Adjustments

On August 26, 1996, Hibernia acquired Calcasieu in a transaction accounted
for as a purchase. Calcasieu shareholders received approximately $201,700,000
in cash in connection with the transaction. Under the purchase 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 of cash to be exchanged in the transaction,
the total cost of acquiring Calcasieu includes 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.

(1) Allocation of purchase price:

<TABLE>
<CAPTION>
(IN THOUSANDS)
<S> <C> <C>
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 securities
available for sale.

(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 transaction.

(3) Purchase accounting adjustments:

<TABLE>
<CAPTION>
APPLICABLE NET
GROSS INCOME TAX OF TAX
------- ---------- -------
(IN THOUSANDS)
<S> <C> <C> <C>
Debit (credit)
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
identifiable intangibles)........................ (10,555) 3,694 (6,861)
Elimination of Calcasieu's existing identifiable
intangibles...................................... (77) 27 (50)
Core deposit intangibles due to the merger........ 17,235 (6,032) 11,203
Goodwill due to the merger........................ 85,886 -- 85,886
------- ------- -------
$92,489 $(2,311) $90,178
======= ======= =======
</TABLE>

S-9
<PAGE>

B. St. Bernard Pro Forma Adjustments

Hibernia National Bank plans to acquire St. Bernard in a transaction to be
accounted for as a purchase. St. Bernard shareholders will receive
approximately $46,000,000 in cash in connection with the transaction. Under
the purchase 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 of cash to be exchanged in the merger, the
total cost of acquiring St. Bernard includes 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.

(1) Allocation of purchase price:

<TABLE>
<CAPTION>
(IN
THOUSANDS)
<S> <C> <C>
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
securities available for sale.

(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.

(3) Purchase accounting adjustments:

<TABLE>
<CAPTION>
APPLICABLE NET
GROSS INCOME TAX OF TAX
------- ---------- -------
(IN THOUSANDS)
<S> <C> <C> <C>
Debit (credit)
Estimated fair value adjustments:
Investment securities........................... $ (184) $ 64 $ (120)
Elimination of St. Bernard's existing identifiable
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. Texarkana Pro Forma Adjustments

Hibernia 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 Bancshares. 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 the purposes of 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.

S-10
<PAGE>

In addition, existing stock options outstanding to purchase 28,132 shares of
Texarkana Bancshares 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.

PRO FORMA COMBINED INCOME STATEMENT
SIX MONTHS ENDED JUNE 30, 1996

<TABLE>
<CAPTION>
(A) (B)
CM BANK ST. BERNARD
HOLDING BANK & TEXARKANA TOTAL PRO
UNAUDITED ($ IN CM BANK COMPANY ST. BERNARD TRUST CO. NATIONAL FORMA
THOUSANDS, HIBERNIA HOLDING ADJUSTMENTS BANK & ADJUSTMENTS BANCSHARES, HIBERNIA
EXCEPT PER SHARE DATA) CORPORATION COMPANY DB(CR) TRUST CO. DB(CR) INC. CORPORATION
---------------------- ----------- ------- ----------- ----------- ----------- ----------- -----------
<S> <C> <C> <C> <C> <C> <C> <C>
INTEREST INCOME
Interest and fees on
loans................. $ 214,552 $16,280 $ (702)(1) $1,407 $ 9,307 $ 242,248
Interest on securities
available for sale.... 65,065 9,434 (5)(1) -- $(5,952)(2) 3,735
(282)(2) 1,438 (3)
6,303 (3) 76,732
Interest on securities
held to maturity...... -- 282 282 (2) 5,952 5,952 (2) 1,122 1,122
Interest on short-term
investments........... 4,739 586 507 74 5,906
----------- ------- ------ ------ ------- --------- -----------
TOTAL INTEREST INCOME.. 284,356 26,582 5,596 7,866 1,438 14,238 326,008
----------- ------- ------ ------ ------- --------- -----------
INTEREST EXPENSE
Interest on deposits 109,418 9,171 3,741 6,426 128,756
Interest on short-term
borrowings............ 6,832 883 -- 187 7,902
Interest on debt....... 216 46 1(1) -- 563 826
----------- ------- ------ ------ ------- --------- -----------
TOTAL INTEREST EXPENSE. 116,466 10,100 1 3,741 -- 7,176 137,484
----------- ------- ------ ------ ------- --------- -----------
NET INTEREST INCOME..... 167,890 16,482 5,597 4,125 1,438 7,062 188,524
Provision for possible
loan losses........... -- 475 (7) 975 1,443
----------- ------- ------ ------ ------- --------- -----------
NET INTEREST INCOME
AFTER PROVISION FOR
POSSIBLE LOAN LOSSES... 167,890 16,007 5,597 4,132 1,438 6,087 187,081
----------- ------- ------ ------ ------- --------- -----------
NONINTEREST INCOME
Service charges on
deposits.............. 25,184 3,258 530 1,929 30,901
Trust fees............. 6,047 376 -- 405 6,828
Other service,
collection and
exchange charges...... 15,927 934 69 887 17,817
Gain on sale of
business lines........ 517 -- -- -- 517
Other operating income. 4,856 177 54 251 5,338
Securities gains
(losses), net......... -- 1,157 -- 113 1,270
----------- ------- ------ ------ ------- --------- -----------
TOTAL NONINTEREST
INCOME................ 52,531 5,902 -- 653 -- 3,585 62,671
----------- ------- ------ ------ ------- --------- -----------
NONINTEREST EXPENSE
Salaries and employee
benefits.............. 72,172 6,145 1,887 3,032 83,236
Occupancy expense, net. 12,830 1,423 (328)(1) 359 371 14,655
Equipment expense...... 10,868 1,289 (284)(1) 207 442 12,522
Data processing
expense............... 10,208 158 21 87 10,474
Foreclosed property
expense, net.......... (1,822) (100) -- 18 (1,904)
Amortization of
intangibles........... 1,923 12 1,847 (1) 1 765 (1) --
1,718 (1) 390 (1)
(12)(1) (1)(1) 6,643
Other operating
expense............... 35,132 3,606 599 1,426 40,763
----------- ------- ------ ------ ------- --------- -----------
TOTAL NONINTEREST
EXPENSE............... 141,311 12,533 2,941 3,074 1,154 5,376 166,389
----------- ------- ------ ------ ------- --------- -----------
INCOME BEFORE INCOME
TAXES.................. 79,110 9,376 8,538 1,711 2,592 4,296 83,363
Income tax expense...... 27,795 3,241 (358)(1) 566 (268)(1) 1,165
(2,332)(3) (532)(3) 29,277
----------- ------- ------ ------ ------- --------- -----------
INCOME FROM CONTINUING
OPERATIONS............. $ 51,315 $ 6,135 $5,848 $1,145 $ 1,792 $ 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).................... $ 0.43 $ 0.43
=========== ===========
</TABLE>

See notes to Pro Forma Combined Income Statements.

S-11
<PAGE>

Hibernia Corporation

Notes to Pro Forma Combined Income Statement

Six Months Ended June 30, 1996

A. Calcasieu 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 transaction occurred on January 1, 1995 is
as follows:

<TABLE>
<CAPTION>
(IN
THOUSANDS)
<S> <C> <C>
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)
----
Total deferred federal tax asset............................ (358)
</TABLE>

In addition, amortization of Calcasieu's existing identifiable intangibles
was reversed.

Goodwill due to the transaction is amortized on a straight-line basis over
25 years. Core deposit intangibles due to the transaction are amortized on an
accelerated basis over 7 years.

(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
securities available for sale (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 transaction occurred on January 1, 1995 is
as follows:

<TABLE>
<CAPTION>
(IN THOUSANDS)
<S> <C>
Debit (Credit)
Core deposit intangibles...................................... 765
Goodwill...................................................... 390
Deferred federal tax asset resulting from core deposit
intangibles.................................................. (268)
</TABLE>

S-12
<PAGE>

In addition, amortization of St. Bernard's existing identifiable intangibles
will be reversed.

Goodwill due to the transaction will be amortized on a straight-line basis
over 25 years. Core deposit intangibles due to the transaction will be
amortized on an accelerated basis over 7 years.

(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
securities available for sale (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 transactions. The savings
vary depending on Hibernia's 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.

S-13
<PAGE>

HIBERNIA CORPORATION

PRO FORMA COMBINED INCOME STATEMENT
YEAR ENDED DECEMBER 31, 1995

<TABLE>
<CAPTION>
(B) (C)
CM BANK ST. BERNARD
(A) HOLDING ST. BERNARD BANK & TEXARKANA
HISTORICAL RESTATED CM BANK COMPANY BANK & TRUST CO. NATIONAL
UNAUDITED HIBERNIA HIBERNIA HOLDING ADJUSTMENTS TRUST ADJUSTMENTS BANCSHARES,
($ IN THOUSANDS, EXCEPT PER SHARE DATA) CORPORATION CORPORATION COMPANY DB (CR) CO. DB (CR) INC.
- --------------------------------------- ----------- ----------- ------- ----------- ----------- ----------- -----------
<S> <C> <C> <C> <C> <C> <C> <C>
INTEREST INCOME
Interest and
fees on loans.. $ 366,716 $ 373,738 $31,523 $(1,404)(1) $2,666 $ 15,485
Interest on
securities
available for
sale........... 37,549 38,248 20,546 (10)(1) -- $ (184)(1) 8,781
12,606 (3) 2,875 (3)
(2,129)(2) (12,311)(2)
Interest on
securities
held to
maturity....... 112,204 116,237 2,129 2,129 (2) 12,311 12,311 (2) 2,609
Interest on
short-term
investments.... 6,706 7,061 294 753 302
----------- ----------- ------- ------- ------ ------- ---------
TOTAL
INTEREST
INCOME....... 523,175 535,284 54,492 11,192 15,730 2,691 27,177
----------- ----------- ------- ------- ------ ------- ---------
INTEREST EXPENSE
Interest on
deposits....... 209,512 215,134 15,423 (492)(1) 7,607 11,534
Interest on
short-term
borrowings..... 13,309 13,208 2,276 -- 583
Interest on
debt........... 594 595 1,661 2 (1) -- 1,035
----------- ----------- ------- ------- ------ ------- ---------
TOTAL
INTEREST
EXPENSE...... 223,415 228,937 19,360 (490) 7,607 -- 13,152
----------- ----------- ------- ------- ------ ------- ---------
NET INTEREST
INCOME.......... 299,760 306,347 35,132 10,702 8,123 2,691 14,025
Provision for
possible loan
losses......... -- (135) 200 (95) 1,275
----------- ----------- ------- ------- ------ ------- ---------
NET INTEREST
INCOME AFTER
PROVISION FOR
POSSIBLE LOAN
LOSSES.......... 299,760 306,482 34,932 10,702 8,218 2,691 12,750
----------- ----------- ------- ------- ------ ------- ---------
NONINTEREST
INCOME
Service
charges on
deposits....... 45,009 45,957 6,642 1,017 2,848
Trust fees..... 11,705 11,705 740 -- 792
Other service,
collection and
exchange
charges........ 27,719 27,719 1,330 101 2,176
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 59 --
Securities
gains
(losses), net.. (13) (1) 2,080 -- 250
----------- ----------- ------- ------- ------ ------- ---------
TOTAL
NONINTEREST
INCOME....... 97,545 98,659 11,082 -- 1,177 -- 6,066
----------- ----------- ------- ------- ------ ------- ---------
NONINTEREST
EXPENSE
Salaries and
employee
benefits....... 128,022 130,498 13,058 3,447 5,983
Occupancy
expense, net... 25,379 25,888 2,538 (656)(1) 717 937
Equipment
expense........ 20,541 20,717 2,453 (568)(1) 397 883
Data
processing
expense........ 18,824 19,212 349 85 154
Foreclosed
property
expense, net... (950) (780) (59) -- (11)
Amortization
of
intangibles.... 3,709 3,709 23 4,309 (1) 2 1,786 (1) --
3,435 (1) 781 (1)
(23)(1) (2)(1)
Other
operating
expense........ 68,508 70,086 9,453 1,059 6,930
----------- ----------- ------- ------- ------ ------- ---------
TOTAL
NONINTEREST
EXPENSE...... 264,033 269,330 27,815 6,497 5,707 2,565 14,876
----------- ----------- ------- ------- ------ ------- ---------
INCOME BEFORE
INCOME TAXES.... 133,272 135,811 18,199 17,199 3,688 5,256 3,940
Income tax
expense......... 9,413 10,112 6,026 (761)(1) 1,168 (561)(1) 755
(4,664)(3) (1,064)(3)
----------- ----------- ------- ------- ------ ------- ---------
INCOME FROM
CONTINUING
OPERATIONS...... $ 123,859 $ 125,699 $12,173 $11,774 $2,520 $ 3,631 $ 3,185
=========== =========== ======= ======= ====== ======= =========
PRO FORMA
WEIGHTED AVERAGE
COMMON SHARES... 117,879,746 120,644,146 6,473,280
=========== =========== =========
PRO FORMA INCOME
PER COMMON SHARE
FROM CONTINUING
OPERATIONS (D).. $ 1.05 $ 1.04
=========== ===========
<CAPTION>
TOTAL
PRO FORMA
UNAUDITED HIBERNIA
($ IN THOUSANDS, EXCEPT PER SHARE DATA) CORPORATION
- --------------------------------------- ------------
<S> <C>
INTEREST INCOME
Interest and
fees on loans.. $ 424,816
Interest on
securities
available for
sale...........
66,728
Interest on
securities
held to
maturity....... 118,846
Interest on
short-term
investments.... 8,410
------------
TOTAL
INTEREST
INCOME....... 618,800
------------
INTEREST EXPENSE
Interest on
deposits....... 249,206
Interest on
short-term
borrowings..... 16,067
Interest on
debt........... 3,293
------------
TOTAL
INTEREST
EXPENSE...... 268,566
------------
NET INTEREST
INCOME.......... 350,234
Provision for
possible loan
losses......... 1,245
------------
NET INTEREST
INCOME AFTER
PROVISION FOR
POSSIBLE LOAN
LOSSES.......... 348,989
------------
NONINTEREST
INCOME
Service
charges on
deposits....... 56,464
Trust fees..... 13,237
Other service,
collection and
exchange
charges........ 31,326
Gain on
divestiture of
banking
offices........ 2,361
Gain on sale
of business
lines.......... 3,402
Other
operating
income......... 7,865
Securities
gains
(losses), net.. 2,329
------------
TOTAL
NONINTEREST
INCOME....... 116,984
------------
NONINTEREST
EXPENSE
Salaries and
employee
benefits....... 152,986
Occupancy
expense, net... 29,424
Equipment
expense........ 23,882
Data
processing
expense........ 19,800
Foreclosed
property
expense, net... (850)
Amortization
of
intangibles....
14,020
Other
operating
expense........ 87,528
------------
TOTAL
NONINTEREST
EXPENSE...... 326,790
------------
INCOME BEFORE
INCOME TAXES.... 139,183
Income tax
expense.........
11,011
------------
INCOME FROM
CONTINUING
OPERATIONS...... $ 128,172
============
PRO FORMA
WEIGHTED AVERAGE
COMMON SHARES... 127,117,426
============
PRO FORMA INCOME
PER COMMON SHARE
FROM CONTINUING
OPERATIONS (D).. $ 1.01
============
</TABLE>

See notes to Pro Forma Combined Income Statements.

S-14
<PAGE>

Hibernia Corporation

Notes to Pro Forma Combined Income Statement

Year Ended December 31, 1995

A. Restated Hibernia Corporation

On January 1, 1996, Hibernia 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 shares of
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. Calcasieu 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 year after the merger resulting from the amortization of such purchase
accounting adjustments assuming the transaction occurred on January 1, 1995 is
as follows:

<TABLE>
<CAPTION>
(IN
THOUSANDS)
<S> <C> <C>
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)
------
Total deferred federal tax asset............................. (761)
</TABLE>

In addition, amortization of Calcasieu's existing identifiable intangibles
was reversed.

Goodwill due to the transaction is amortized on a straight-line basis over
25 years. Core deposit intangibles due to the transaction are amortized on an
accelerated basis over 7 years.

S-15
<PAGE>

(2) Interest income on securities previously classified as held to maturity
was reclassified to interest income on securities available for sale.

C. 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 year after the merger resulting from the amortization of such purchase
accounting adjustments assuming the transaction occurred on January 1, 1995 is
as follows:

<TABLE>
<CAPTION>
(IN
THOUSANDS)
<S> <C> <C>
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)
----
Total deferred federal tax asset................................ (561)
</TABLE>

In addition, amortization of St. Bernard's existing identifiable intangibles
will be reversed.

Goodwill due to the transaction is amortized on a straight-line basis over
25 years. Core deposit intangibles due to the transaction are amortized on an
accelerated basis over 7 years.

(2) Interest income on securities previously classified as held to maturity
will be reclassified to interest income on securities available for sale.

D. Anticipated Savings

RECENT EVENTS

On September 17, 1996, Hibernia announced that third quarter results will
reflect a $15 million negative loan loss provision, a $5.7 million pre-tax
loss on the sale of securities available for sale and other charges, including
asset write-downs related to technological enhancements and additions to
reserves for health care benefits and other expenses. The Company also
announced that it anticipates third-quarter 1996 earnings of approximately
$.22 per share after giving effect to these provisions and charges.

S-16
<PAGE>

MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION
AND RESULTS OF OPERATIONS

FOR THE SIX-MONTH PERIODS ENDED JUNE 30, 1996 AND 1995

Management's Discussion and Analysis presents a review of the major factors
and trends affecting the performance of Hibernia and Hibernia Bank, its
wholly-owned bank subsidiary, and should be read in conjunction with
Hibernia's consolidated financial statements, notes and tables incorporated
herein by reference. See "Incorporation of Certain Documents by Reference" in
the accompanying Prospectus. Financial data for all periods presented have
been restated for mergers consummated on or prior to June 30, 1996, all of
which were accounted for as poolings of interests.

SECOND-QUARTER 1996 HIGHLIGHTS

Hibernia Corporation's second-quarter 1996 results showed continued
improvement in earnings per share on a comparable basis over the second
quarter of 1995, strong loan growth, and improving efficiency. 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 a
"normal" effective tax rate of 37%.

. Net income for the second quarter of 1996 totaled $26.6 million ($.22 per
share) and net income for the first six months of 1996 totaled $51.3
million ($.43 per share). For the second quarter of 1995 reported net
income of $30.8 million ($.26 per share) would have been $20.8 million
($.17 per share) on a fully tax-effected basis. Similarly, reported net
income of $56.7 million ($.47 per share) For the first half of 1995 would
have been $38.7 million ($.32 per share) on a fully tax-effected basis.
Therefore, on a comparable basis, net income for the second quarter of
1996 improved 28% and earnings per share rose 29%. For the first six
months of 1996, net income was up 32% and earnings per share grew 34%
over the first half of 1995.

. Returns on assets (ROA) and equity (ROE), were 1.43% and 14.44%,
respectively, for the second quarter of 1996 compared to 1.18% and 12.96%
on a fully tax-effected basis in the second quarter of 1995. Reported ROA
and ROE for the second quarter of last year were 1.74% and 19.13%,
respectively. For the first six months of 1996, the ROA was 1.38%. The
ROA for the first six months of 1995 was 1.10% on a fully tax-effected
basis and 1.61% as reported. ROE for the first half of 1996 was 13.90%
compared to 12.24% for the first six months of 1995, on a fully tax-
effected basis. Reported ROE for the first half of 1995 was 17.91%.

. Second-quarter 1996 pre-tax results improved compared to the same period
last year because of a $10.4 million (14%) increase in net interest
income (resulting from an improved margin and higher average earning
assets) and a $1.4 million (6%) improvement in noninterest income,
partially offset by a $4.0 million (6%) increase in overhead. For the
first half of 1996, the increase in pre-tax income over 1995 was due to
the same factors as the quarterly improvement. For the six-month period
net interest income increased $19.1 million (13%) and noninterest income
rose $3.1 million (6%), while overhead increased $4.4 million (3%).

. Loans grew $926.5 million (23%) from a year ago to $5.0 billion at June
30, 1996. Consumer loans increased $514.5 million (27%) to $2.4 billion
and commercial loans grew $412.0 million (19%) to $2.6 billion. Compared
to March 31, 1996, loans increased at an annual rate of almost 20% as
consumer loans grew 18% and commercial loans grew 22%.

. Asset quality remained strong with reserve coverage of nonperforming
assets at almost 826% at June 30, 1996 compared to 730% at June 30, 1995.
Total nonperforming assets declined to $23.9 million, down 18% from a
year ago. Nonperforming assets as a percentage of loans plus foreclosed
assets were reduced to .48%, compared to .72% at June 30, 1995.

. In July 1996, Hibernia's Board of Directors declared a quarterly cash
dividend of $.07 per share.

S-17
<PAGE>

FINANCIAL CONDITION

Earning Assets

Earning assets averaged $7.0 billion in the second quarter of 1996, a $360.3
million (5%) increase from the second-quarter 1995 average of $6.6 billion.
For the first six months of 1996, average earning assets increased $368.2
million (6%) from the first six months of 1995. The increases in average
assets for both the current quarter and the first six months of 1996 were due
to increases of approximately $900 million in average loans, partially offset
by decreases of approximately $600 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 second quarter of 1996 of $4.9 billion were up
$232.7 million (5%) from the first quarter of 1996 and up $883.5 million (22%)
compared to the second quarter of 1995. Average loans for the first six months
of 1996 compared to the first six months of 1995 increased $864.1 million
(22%).

Table 1 presents the Company's loan portfolio classified according to
industry concentration at June 30, 1996, March 31, 1996 and June 30, 1995.
Total loans increased $234.8 million (5%) during the second quarter of 1996.
Commercial loans increased $132.3 million (5%), while consumer loans increased
$102.5 million (4%). Compared to June 30, 1995, loans increased $926.5 million
(23%). Consumer loans were up $514.5 million (27%), and commercial loans
increased $412.0 million (19%). The increase in consumer lending compared to
March 31, 1996 was primarily due to increases in adjustable-rate residential
mortgage loans and indirect lending. Compared to June 30, 1995, the same
categories increased, along with other consumer loans. Consumer loans
comprised 48.8% of the loan portfolio at June 30, 1996 compared to 47.2% at
June 30, 1995.

TABLE 1--COMPOSITION OF LOAN PORTFOLIO

<TABLE>
<CAPTION>
JUNE 30, 1996 MARCH 31, 1996 JUNE 30, 1995
-------------- -------------- --------------
($ IN MILLIONS) LOANS % LOANS % LOANS %
--------------- -------- ----- -------- ----- -------- -----
<S> <C> <C> <C> <C> <C> <C>
Commercial:
Commercial and industrial.... $1,055.4 21.1% $ 993.4 20.9% $ 764.1 18.8%
Commercial real estate....... 452.0 9.0 440.0 9.2 478.3 11.8
Services..................... 447.0 9.0 394.1 8.3 346.1 8.6
Health care.................. 207.7 4.2 208.2 4.4 216.2 5.3
Transportation, utilities and
communications.............. 171.0 3.4 182.1 3.8 158.6 3.9
Individual................... 113.8 2.3 103.1 2.2 99.1 2.4
Energy....................... 108.9 2.2 102.6 2.2 81.4 2.0
-------- ----- -------- ----- -------- -----
Total commercial........... 2,555.8 51.2 2,423.5 51.0 2,143.8 52.8
-------- ----- -------- ----- -------- -----
Consumer:
Residential mortgages:
First mortgages............ 1,094.1 21.9 1,047.2 22.0 857.9 21.1
Junior liens............... 119.8 2.4 92.0 1.9 86.8 2.1
Indirect..................... 730.9 14.7 703.4 14.8 585.3 14.4
Revolving credit............. 107.9 2.2 97.6 2.1 84.4 2.1
Other........................ 381.2 7.6 391.2 8.2 305.0 7.5
-------- ----- -------- ----- -------- -----
Total consumer............. 2,433.9 48.8 2,331.4 49.0 1,919.4 47.2
-------- ----- -------- ----- -------- -----
Total loans.................... $4,989.7 100.0% $4,754.9 100.0% $4,063.2 100.0%
======== ===== ======== ===== ======== =====
</TABLE>

Securities. Average securities decreased $636.8 million (25%) in the second
quarter of 1996 compared to the second quarter of 1995. For the first six
months of 1996 average securities decreased $554.0 million (22%). The
decreases are the result of the reinvestment of maturing securities into
higher-yielding loans.

Average securities available for sale increased approximately $1.4 billion
for the second quarter and the first six months of 1996 compared to the same
periods in 1995. In December 1995, in accordance with the

S-18
<PAGE>

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. It is anticipated that future purchases of securities
will be classified as available for sale.

As a result of this reclassification, Hibernia had no securities held to
maturity for the second quarter or the first six months of 1996 compared to
averages of $2.0 billion in both periods a year ago.

Short-Term Investments. Average short-term investments (primarily federal
funds sold) for the three months ended June 30, 1996, of $164.8 million were
up $113.6 million (222%) compared to an average of $51.2 million in the second
quarter of 1995. Average short-term investments decreased $28.2 million (15%)
from the first-quarter 1996 average of $193.0 million, as loan growth exceeded
deposit increases.

TABLE 2--NONPERFORMING ASSETS

<TABLE>
<CAPTION>
JUNE 30, MARCH 31, DECEMBER 31, SEPTEMBER 30, JUNE 30,
($ IN THOUSANDS) 1996 1996 1995 1995 1995
---------------- -------- --------- ------------ ------------- --------
<S> <C> <C> <C> <C> <C>
Nonaccrual loans........ $ 17,434 $ 18,492 $ 17,318 $ 19,611 $ 20,858
Restructured loans...... -- -- -- -- --
-------- -------- -------- -------- --------
Total nonperforming
loans................ 17,434 18,492 17,318 19,611 20,858
-------- -------- -------- -------- --------
Foreclosed assets....... 3,547 5,578 5,344 6,305 6,053
Excess bank owned
property............... 2,955 3,023 2,946 2,245 2,244
-------- -------- -------- -------- --------
Total nonperforming
assets............... $ 23,936 $ 27,093 $ 25,608 $ 28,161 $ 29,155
======== ======== ======== ======== ========
Accruing loans past due
90 days or more........ $ 3,791 $ 5,795 $ 2,794 $ 2,843 $ 5,311
======== ======== ======== ======== ========
Reserve for possible
loan losses............ $143,999 $144,913 $147,678 $152,053 $152,235
======== ======== ======== ======== ========
Nonperforming loans as a
percentage of total
loans.................. 0.35% 0.39% 0.38% 0.46% 0.51%
Nonperforming assets as
a percentage ot total
loans plus foreclosed
assets and excess bank
owned property......... 0.48% 0.57% 0.56% 0.66% 0.72%
Reserve for possible
loan losses as a
percentage of
nonperforming loans.... 825.97% 783.65% 852.74% 775.35% 729.86%
</TABLE>

Asset Quality

Table 2 presents a summary of nonperforming assets at the end of the past
five quarters. Table 3 presents a summary of changes in nonperforming loans
for the three-month and six-month periods ended June 30, 1996 and 1995.

Nonperforming assets -- which include nonaccrual loans, restructured loans,
foreclosed assets and excess bank owned property -- totaled $23.9 million at
June 30, 1996, down 18% compared to $29.2 million at June 30, 1995 and down
$3.2 million (12%) compared to $27.1 million at March 31, 1996. Nonperforming
loans, which totaled $17.4 million at June 30, 1996, declined $3.4 million
(16%) from a year ago, and declined $1.1 million (6%) from the first quarter
of 1996. Foreclosed assets, which totaled $6.5 million at June 30, 1996, were
down $1.8 million (22%) from a year earlier, and down $2.1 million (24%) from
March 31, 1996.

S-19
<PAGE>

At June 30, 1996, the recorded investment in loans that were considered to
be impaired under SFAS No. 114 was $16.6 million. The related reserve for
possible loan losses was $2.6 million. The comparable amounts at June 30, 1995
were $19.3 million and $1.4 million, respectively. These loans are included in
nonaccrual loans in Table 2.

TABLE 3--SUMMARY OF NONPERFORMING LOAN ACTIVITY

<TABLE>
<CAPTION>
THREE MONTHS SIX MONTHS
ENDED JUNE 30 ENDED JUNE 30
---------------- ----------------
($ IN THOUSANDS) 1996 1995 1996 1995
---------------- ------- ------- ------- -------
<S> <C> <C> <C> <C>
Nonperforming loans at
beginning of period.... $18,492 $21,801 $17,318 $27,631
Additions............... 4,310 3,940 9,668 8,940
Charge-offs, gross...... (3,186) (2,825) (5,828) (5,362)
Returns to performing
status................. (132) (1,162) (160) (5,524)
Payments and sales...... (2,050) (896) (3,564) (4,827)
------- ------- ------- -------
Nonperforming loans at
end of period.......... $17,434 $20,858 $17,434 $20,858
======= ======= ======= =======
</TABLE>

As illustrated in Table 3, loans totaling $4.3 million were added to
nonperforming loans during the second quarter of 1996. Payments and sales
resulted in a $2.1 million reduction in nonperforming loans and charge-offs
further reduced nonperforming loans in the second quarter of 1996 by $3.2
million. As a percentage of total loans plus foreclosed assets, nonperforming
assets at June 30, 1996, improved to .48% from .72% a year ago and were down
from .57% at March 31, 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 $21.1 million as of June 30, 1996.

TABLE 4--RESERVE FOR POSSIBLE LOAN LOSSES ACTIVITY

<TABLE>
<CAPTION>
THREE MONTHS SIX MONTHS ENDED
ENDED JUNE 30 JUNE 30
------------------ ------------------
($ IN THOUSANDS) 1996 1995 1996 1995
---------------- -------- -------- -------- --------
<S> <C> <C> <C> <C>
Balance at beginning of period......... $144,913 $153,777 $147,678 $153,957
Loans charged off...................... (6,669) (5,117) (13,353) (10,803)
Recoveries............................. 5,755 3,720 9,674 9,221
-------- -------- -------- --------
Net loans charged off.................. (914) (1,397) (3,679) (1,582)
-------- -------- -------- --------
Provision for possible loans losses.... -- (145) -- (140)
-------- -------- -------- --------
Balance at end of period............... $143,999 $152,235 $143,999 $152,235
======== ======== ======== ========
Reserve for possible loan losses as a
percentage of loans................... 2.89% 3.75% 2.89% 3.75%
Annualized net charge-offs as a
percentage of average loans........... 0.07% 0.14% 0.15% 0.08%
</TABLE>

Reserve and Provision for Possible Loan Losses

No provision for possible loan losses was recorded for the second quarter or
the first six months of 1996. Nominal negative provisions were recorded for
the comparable periods of 1995 at one of the merged banks. The absence of a
provision thus far in 1996 is a reflection of continued strong reserve
coverage. The reserve for possible loan losses as a percentage of
nonperforming loans was 826% at June 30, 1996, 784% at March 31, 1996, and
730% at June 30, 1995.

Net charge-offs totaled $.9 million in the second quarter of 1996, compared
to $1.4 million in the second quarter of 1995. For the first six months of
1996, net charge-offs totaled $3.7 million compared to $1.6 million

S-20
<PAGE>

for the same period in 1995. As a percentage of average loans, annualized net
charge-offs were .07% and .15% for the second quarter and the first six months
of 1996, respectively. In 1995 the comparable net charge-off ratios were .14%
and .08%, respectively.

The reserve for possible loan losses totaled $144.0 million, or 2.89% of
total loans, at June 30, 1996, compared to $152.2 million, or 3.75%, 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,
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
second quarter and the first six months of 1996 and 1995.

TABLE 5--DEPOSIT COMPOSITION

<TABLE>
<CAPTION>
SECOND QUARTER FIRST QUARTER SECOND QUARTER
1996 1996 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................. $1,107.3 17.6% $1,164.3 18.7% $1,088.2 18.0%
NOW accounts............. 231.4 3.7 219.4 3.5 683.3 11.3
Money market deposit
accounts................ 1,395.8 22.2 1,466.4 23.5 982.3 16.2
Savings accounts......... 346.3 5.5 352.3 5.6 348.1 5.8
Other consumer time
deposits................ 2,107.9 33.6 2,041.9 32.7 2,011.5 33.3
-------- ----- -------- ----- -------- -----
Total core deposits.... 5,188.7 82.6 5,244.3 84.0 5,113.4 84.6
Public fund certificates
of deposit of $100,000
or more................. 832.2 13.2 776.0 12.4 705.9 11.7
Certificates of deposit
of $100,000 or more..... 219.8 3.5 184.8 3.0 193.7 3.2
Foreign time deposits.... 43.6 0.7 38.5 0.6 31.5 0.5
-------- ----- -------- ----- -------- -----
Total deposits......... $6,284.3 100.0% $6,243.6 100.0% $6,044.5 100.0%
======== ===== ======== ===== ======== =====
</TABLE>

FUNDING SOURCES

Deposits and Borrowings

Deposits. Average deposits totaled $6.3 billion in the second quarter of
1996, a $239.8 million (4%) increase from the second quarter of 1995. Average
core deposits were up $75.3 million (1%) due to increases in consumer time
deposits and demand deposits. Average deposits in the second quarter of 1996
increased $40.7 million (1%) compared to the first quarter of 1996.

NOW account average balances were down $451.9 million and money market
deposit accounts were up $413.5 million in the second quarter of 1996 compared
to the second 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 second quarter of 1996 the effect of the Reserve Money Manager
account was $524.3 million (reducing NOW account average balances and
increasing money market deposit account average balances). Net of this effect,
NOW account average balances were up $72.4 million (11%) and money market
deposit account average balances were down $110.8 million (11%). Money market
deposit accounts declined because the rate paid on these accounts was less
attractive than those of other investment products. For the first six months
of 1996 the effect of the Reserve Money Manager accounts was $530.0 million.
Net of this effect NOW account average balances were up $59.5 million (9%) for
the first half of 1996 compared to the same period in 1995 while money market
deposit accounts decreased $120.5 million (12%) from the first six months of
1995.

S-21
<PAGE>

Average noncore deposits increased $164.5 million (18%) from the second
quarter of 1995 as public fund certificates of deposit increased $126.3
million (18%) in part due to greater access in new markets (through mergers)
to public agency funds as well as increases in funds from existing
relationships.

Table 5 presents the composition of average deposits for the second and
first quarters of 1996 and the second quarter of 1995.

Borrowings. Average borrowings - which include federal funds purchased,
securities sold under agreements to repurchase (repurchase agreements) and
debt - increased $23.9 million (8%) to $305.6 million for the second quarter
of 1996 compared to the second quarter of 1995. For the first six months of
1996, borrowings increased $65.5 million (28%) to $297.1 million. The
increases for both periods result primarily from growth in repurchase
agreements resulting in new cash management products which "sweep" funds from
deposit accounts.

Average repurchase agreements increased $61.0 million in the second quarter
of 1996 and $80.8 million for the first six months of 1996 over the comparable
periods in 1995 as a result of continued marketing of these 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 increases in repurchase agreements were partially offset by decreases in
federal funds purchased and long-term debt. The Company's long-term debt at
June 30, 1996 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 June 30, 1996,
Hibernia held a $6.6 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 $224.8 million at June 30, 1996. In addition to these
customer-related derivative financial instruments, the Company has entered
into trading contracts for its own account which total $19.4 million. As of
June 30, 1996, Hibernia's risk of loss due to interest rate fluctuations on
trading derivatives was less than $.2 million.

RESULTS OF OPERATIONS

Net Interest Income

Taxable-equivalent net interest income for the three months ended June 30,
1996, totaled $86.6 million, a $10.2 million increase from the same period in
1995 and a $2.7 million increase from the first quarter of 1996.

S-22
<PAGE>

For the first six months of 1996, net interest income increased $18.8 million
over the first six months of 1995 to $170.5 million.

TABLE 6--NET INTEREST MARGIN (TAXABLE-EQUIVALENT)

<TABLE>
<CAPTION>
1996 1995
--------------- -----------------------
SECOND FIRST FOURTH THIRD SECOND
QUARTER QUARTER QUARTER QUARTER QUARTER
------- ------- ------- ------- -------
<S> <C> <C> <C> <C> <C>
Yield on earning assets................ 8.36% 8.23% 8.27% 8.20% 8.14%
Rate on interest-bearing liabilities... 4.30 4.34 4.41 4.43 4.45
----- ----- ----- ----- -----
Net interest spread.................. 4.06 3.89 3.86 3.77 3.69
Contribution of noninterest-bearing
funds................................. 0.92 0.98 0.98 0.93 0.93
----- ----- ----- ----- -----
Net interest margin.................. 4.98% 4.87% 4.84% 4.70% 4.62%
===== ===== ===== ===== =====
Noninterest-bearing funds supporting
earning assets........................ 21.44% 22.46% 22.12% 21.10% 20.86%
</TABLE>

Factors contributing to the increase from the second quarter of 1995
include: the positive effect of the change in the mix of earning assets from
lower-yielding securities to loans (69.9% of average earning assets in the
second quarter of 1996 compared to 60.3% in the second quarter of 1995);
overall growth in earning assets; lower rates paid on deposits and borrowings;
higher yields on securities and a higher level of interest income recorded on
nonaccrual or previously charged-off loans. These factors were partially
offset by lower yields on loans (market rates in the second quarter of 1996
were down approximately 75 basis points from the second quarter of 1995). The
increase in net interest income in the second quarter of 1996 compared to the
first quarter of 1996 was due to the same factors discussed above except that
loan yields were up, even though market rates were down slightly, primarily
due to the income received on nonaccrual and previously charged-off loans.

The increase in net interest income for the first six 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 extra income received on nonaccrual and
previously charged-off loans was offset by lower rates.

The net interest margin was 4.98% for the second quarter of 1996, up 36
basis points from the second quarter of 1995, and up 11 basis points from the
first quarter of 1996. Excluding income of $2.2 million received on two
previously charged off loans, the net interest margin would have been 4.86%
for the second quarter of 1996, up 24 basis points from the second quarter of
1995 and virtually unchanged from the first quarter of 1996. The net interest
margin has improved from the second quarter of 1995 primarily due to the
positive effect of the change in the mix in earning assets to higher yielding
loans and a decrease in funding costs of 15 basis points.

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.

TABLE 7--INTEREST-EARNING ASSET COMPOSITION

<TABLE>
<CAPTION>
1996 1995
--------------- -----------------------
SECOND FIRST FOURTH THIRD SECOND
(PERCENTAGE OF AVERAGE BALANCES) QUARTER QUARTER QUARTER QUARTER QUARTER
- -------------------------------- ------- ------- ------- ------- -------
<S> <C> <C> <C> <C> <C>
Loans................................... 69.9% 67.1% 65.8% 62.1% 60.3%
----- ----- ----- ----- -----
Securities available for sale........... 27.7 30.1 8.7 8.3 9.0
Securities held to maturity............. -- -- 24.2 27.3 29.9
----- ----- ----- ----- -----
Total securities...................... 27.7 30.1 32.9 35.6 38.9
Short-term investments.................. 2.4 2.8 1.3 2.3 0.8
----- ----- ----- ----- -----
Total interest-earnings assets........ 100.0% 100.0% 100.0% 100.0% 100.0%
===== ===== ===== ===== =====
</TABLE>

S-23
<PAGE>

Table 8 presents an analysis of changes in taxable-equivalent net interest
income between the second quarter of 1996 and the first quarter of 1996 and
between the second quarter of 1996 and the second quarter of 1995.

TABLE 8--CHANGES IN TAXABLE-EQUIVALENT NET INTEREST INCOME(1)

<TABLE>
<CAPTION>
SECOND QUARTER 1996 COMPARED TO:
------------------------------------------------------
FIRST QUARTER 1996 SECOND 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................. $ 5,302 $ 745 $ 6,047 $ 20,168 $(1,283) $ 18,885
Securities available
for sale............. (2,423) 126 (2,297) 21,960 101 22,061
Securities held to
maturity............. -- -- -- (31,717) -- (31,717)
Short-term
investments.......... (373) (26) (399) 1,500 (59) 1,441
------- ------- ------- -------- ------- --------
Total............... 2,506 845 3,351 11,911 (1,241) 10,670
------- ------- ------- -------- ------- --------
Interest paid on:
NOW accounts.......... 88 (85) 3 (2,994) 953 (2,041)
Money market deposit
accounts............. (412) (309) (721) 2,487 (1,107) 1,380
Savings accounts...... (31) (7) (38) (10) (135) (145)
Other consumer time... 921 (597) 324 1,345 (630) 715
Public fund
certificates of
deposit of $100,000
or more.............. 745 (326) 419 1,777 (1,622) 155
Certificates of
deposit of $100,000
or more.............. 444 30 474 318 249 567
Foreign deposits...... 69 (36) 33 165 (65) 100
Federal funds
purchased............ (73) (1) (74) (445) (149) (594)
Repurchase agreements. 268 10 278 738 (360) 378
Long-term debt........ (6) -- (6) (57) 3 (54)
------- ------- ------- -------- ------- --------
Total............... 2,013 (1,321) 692 3,324 (2,863) 461
------- ------- ------- -------- ------- --------
Taxable-equivalent net
interest income........ $ 493 $ 2,166 $ 2,659 $ 8,587 $ 1,622 $ 10,209
======= ======= ======= ======== ======= ========
</TABLE>
- --------
(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.

The analysis of Consolidated Average Balances, Interest and Rates at the end
of this discussion presents the Company's taxable-equivalent net interest
income and average balances for the three months ended June 30, 1996, March
31, 1996 and June 30, 1995 and for the first six 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 six
months of 1996 compared to the same periods in 1995. Excluding the impact of
the Reserve Money Manager account NOW rates would have been 2.17% for the
quarter and 2.18% for the first six months of 1996, virtually unchanged from
the comparable periods in 1995.

S-24
<PAGE>

[THIS PAGE INTENTIONALLY LEFT BLANK]

S-25
<PAGE>

CONSOLIDATED AVERAGE BALANCES, INTEREST AND RATES

TAXABLE-EQUIVALENT BASIS(1) SECOND QUARTER 1996 FIRST QUARTER 1996
- --------------------------- ----------------------- -----------------------
AVERAGE AVERAGE
(AVERAGE BALANCES $ IN MILLIONS, INTEREST $ IN THOUSANDS) BALANCE INTEREST RATE BALANCE INTEREST RATE
- --------------------------------------------------------- -------- -------- ---- -------- -------- ----
<S> <C> <C> <C> <C> <C> <C> <C>
ASSETS
Interest-earning assets:
Loans(2)..................... $4,878.5 $111,287 9.17% $4,645.8 $105,240 9.11%
Securities available for
sale........................ 1,935.6 31,706 6.56 2,083.6 34,003 6.53
Securities held to maturity.. -- -- -- -- -- --
-------- -------- ---- -------- -------- ----
Total securities........... 1,935.6 31,706 6.56 2,083.6 34,003 6.53
-------- -------- ---- -------- -------- ----
Short-term investments....... 164.8 2,170 5.30 193.0 2,569 5.35
-------- -------- ---- -------- -------- ----
Total interest-earning
assets.................... 6,978.9 $145,163 8.36% 6,922.4 $141,812 8.23%
-------- -------- ---- -------- -------- ----
Reserve for possible loan
losses........................ (145.3) (147.0)
Noninterest-earning assets:
Cash and due from banks...... 300.5 305.3
Other assets................. 320.3 311.0
-------- --------
Total noninterest-earning
assets.................... 620.8 616.3
-------- --------
Total assets............. $7,454.4 $7,391.7
======== ========
LIABILITIES AND SHAREHOLDERS' EQUITY
Interest-bearing liabilities:
Interest-bearing deposits:
NOW accounts............... $ 231.4 $ 1,670 2.90% $ 219.4 $ 1,667 3.06%
Money market deposit
accounts.................. 1,395.8 8,026 2.31 1,466.4 8,747 2.40
Savings accounts........... 346.3 1,792 2.08 352.3 1,830 2.09
Other consumer time
deposits.................. 2,107.9 29,164 5.56 2,041.9 28,840 5.68
Public fund certificates of
deposits of $100,000 or
more...................... 832.2 10,934 5.28 776.0 10,515 5.45
Certificates of deposits of
$100,000 or more.......... 219.8 2,793 5.11 184.8 2,319 5.05
Foreign time deposits...... 43.6 577 5.32 38.5 544 5.68
-------- -------- ---- -------- -------- ----
Total interest-bearing
deposits................ 5,177.0 54,956 4.27 5,079.3 54,462 4.31
-------- -------- ---- -------- -------- ----
Short-term borrowings:
Federal funds purchased.... 37.5 480 5.14 43.3 554 5.15
Repurchase agreements...... 261.2 3,038 4.68 238.0 2,760 4.66
Debt......................... 6.9 105 6.11 7.3 111 6.13
-------- -------- ---- -------- -------- ----
Total interest-bearing
liabilities............... 5,482.6 $ 58,579 4.30% 5,367.9 $ 57,887 4.34%
-------- -------- ---- -------- -------- ----
Noninterest-bearing
liabilities:
Demand deposits.............. 1,107.3 1,164.3
Other liabilities............ 127.4 119.3
-------- --------
Total noninterest-bearing
liabilities............... 1,234.7 1,283.6
-------- --------
Total shareholders' equity..... 737.1 740.2
-------- --------
Total liabilities and
shareholders' equity.... $7,454.4 $7,391.7
======== ========
SPREAD AND NET YIELD
Interest rate spread........... 4.06% 3.89%
Cost of funds supporting
interest-earning assets....... 3.38% 3.36%
Net interest income/margin..... $ 86,584 4.98% $ 83,925 4.87%
</TABLE>
- -------
(1) Based on the statutory income tax rate of 35%.
(2) Yield computations include nonaccrual loans in loans outstanding.

S-26
<PAGE>

<TABLE>
<CAPTION>
SIX MONTHS ENDED SIX MONTHS ENDED
SECOND QUARTER 1995 JUNE 30, 1996 JUNE 30, 1995
----------------------- ------------------------ -----------------------
AVERAGE AVERAGE AVERAGE
BALANCE INTEREST RATE BALANCE INTEREST RATE BALANCE INTEREST RATE
-------- -------- ---- --------- -------- ---- -------- -------- ----
<S> <C> <C> <C> <C> <C> <C> <C> <C> <C>
$3,995.0 $ 92,402 9.28% $ 4,762.1 $216,527 9.14% $3,898.0 $179,322 9.27%
594.9 9,645 6.49 2,009.6 65,709 6.55 601.3 19,361 6.44
1,977.5 31,717 6.42 -- -- -- 1,962.3 61,606 6.29
-------- -------- ---- --------- -------- ---- -------- -------- ----
2,572.4 41,362 6.43 2,009.6 65,709 6.55 2,563.6 80,967 6.33
-------- -------- ---- --------- -------- ---- -------- -------- ----
51.2 729 5.71 178.9 4,739 5.31 120.8 3,446 5.75
-------- -------- ---- --------- -------- ---- -------- -------- ----
6,618.6 $134,493 8.14% 6,950.6 $286,975 8.29% 6,582.4 $263,735 8.06%
-------- -------- ---- --------- -------- ---- -------- -------- ----
(153.9) (146.1) (153.6)
306.6 302.9 308.7
311.7 315.7 314.5
-------- --------- --------
618.3 618.6 623.2
-------- --------- --------
$7,083.0 $ 7,423.1 $7,052.0
======== ========= ========
$ 683.3 $ 3,711 2.18% $ 225.4 $ 3,337 2.98% $ 695.9 $ 7,518 2.18%
982.3 6,646 2.71 1,431.1 16,773 2.36 1,021.6 14,090 2.78
348.1 1,937 2.23 349.3 3,622 2.09 352.5 3,932 2.25
2,011.5 28,449 5.67 2,074.9 58,004 5.62 1,987.0 54,182 5.50
705.9 10,779 6.12 804.1 21,449 5.36 688.3 20,495 6.01
193.7 2,226 4.61 202.3 5,112 5.08 199.4 4,659 4.71
31.5 477 6.06 41.1 1,121 5.49 33.5 962 5.79
-------- -------- ---- --------- -------- ---- -------- -------- ----
4,956.3 54,225 4.39 5,128.2 109,418 4.29 4,978.2 105,838 4.29
-------- -------- ---- --------- -------- ---- -------- -------- ----
70.9 1,074 6.08 40.4 1,034 5.15 52.0 1,523 5.91
200.2 2,660 5.33 249.6 5,798 4.67 168.8 4,303 5.14
10.6 159 5.99 7.1 216 6.13 10.8 328 6.10
-------- -------- ---- --------- -------- ---- -------- -------- ----
5,238.0 $ 58,118 4.45% 5,425.3 $116,466 4.32% 5,209.8 $111,992 4.33%
-------- -------- ---- --------- -------- ---- -------- -------- ----
1,088.2 1,135.8 1,086.7
113.8 123.4 122.6
-------- --------- --------
1,202.0 1,259.2 1,209.3
-------- --------- --------
643.0 738.6 632.9
-------- --------- --------
$7,083.0 $ 7,423.1 $7,052.0
======== ========= ========
3.69% 3.97% 3.73%
3.52% 3.37% 3.43%
$ 76,375 4.62% $170,509 4.92% $151,743 4.63%
</TABLE>

S-27
<PAGE>

TABLE 9 -- NONINTEREST INCOME

<TABLE>
<CAPTION>
THREE MONTHS ENDED SIX MONTHS ENDED
--------------------------- ---------------------------
PERCENTAGE PERCENTAGE
JUNE 30 JUNE 30 INCREASE JUNE 30 JUNE 30 INCREASE
($ IN THOUSANDS) 1996 1995 (DECREASE) 1996 1995 (DECREASE)
---------------- ------- ------- ---------- ------- ------- ----------
<S> <C> <C> <C> <C> <C> <C>
Service charges on
deposits............... $13,015 $10,855 20 % $25,184 $21,865 15 %
Trust fees.............. 3,013 2,882 5 6,047 5,703 6
Other service,
collection and exchange
charges:
Retail investment
service income........ 2,656 1,605 65 4,490 3,156 42
Mortgage loan servicing
income................ 1,767 1,958 (10) 3,566 3,801 (6)
ATM fees............... 1,677 1,332 26 3,221 2,354 37
Other.................. 2,359 2,047 15 4,650 3,457 35
------- ------- ---- ------- ------- ----
Total other service,
collection and
exchange charges..... 8,459 6,942 22 15,927 12,768 25
------- ------- ---- ------- ------- ----
Other income:
Gain on divestiture of
banking offices....... -- -- -- -- 2,361 (100)
Gain on sale of
business lines........ 517 3,064 (83) 517 3,064 (83)
Other income........... 1,727 1,634 6 4,856 3,718 31
------- ------- ---- ------- ------- ----
Total other income.... 2,244 4,698 (52) 5,373 9,143 (41)
------- ------- ---- ------- ------- ----
Securities gains
(losses), net......... -- (47) (100) -- (44) (100)
------- ------- ---- ------- ------- ----
Total Noninterest
Income............... $26,731 $25,330 6 % $52,531 $49,435 6 %
======= ======= ==== ======= ======= ====
</TABLE>

Noninterest Income

Noninterest income for the second quarter of 1996 was up $1.4 million (6%)
to $26.7 million compared to the same period of 1995 and up $3.1 million for
the first six months of 1996 compared to the first six months of 1995.
Nonrecurring items are included in both 1996 and 1995. These 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 quarter of 1995 to record the sale of the Company's student loan
portfolio and municipal bond administration business totaling $1.5 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.

Excluding these nonrecurring items, noninterest income increased $4.0
million (18%) in the second quarter of 1996 over the second quarter of 1995,
and was up $7.3 million (17%) over the first six months of 1995. The major
categories of noninterest income for the three months and six months ended
June 30, 1996, and the comparable periods in 1995 are presented in Table 9.

Service charges on deposits increased $2.2 million (20%) for the second
quarter of 1996 and $3.3 million (15%) for the first six months of 1996 over
the comparable periods in 1995 primarily due to increases in the price for
certain deposit activities, the number of accounts and commercial account
analysis fees.

Other service, collection and exchange fees were up $1.5 million (22%) and
$3.2 million (25%) in the second quarter and the first six months of 1996,
respectively, compared to the same periods in 1995. The major factors in these
increases were significant growth in fees generated by the Bank's upgraded and
expanded ATM network, fees resulting from the successful introduction of
Hibernia's debit card in 1996 and growth in fees from retail investment
services.

S-28
<PAGE>

Excluding the nonrecurring items previously mentioned, other income was up
$.1 million (6%) and $.3 million (11%) for the second quarter and the first
six months of 1996 compared to the same periods in 1995.

TABLE 10 -- NONINTEREST EXPENSE

<TABLE>
<CAPTION>
THREE MONTHS ENDED SIX MONTHS ENDED
------------------------------ --------------------------------
PERCENTAGE PERCENTAGE
JUNE 30 JUNE 30 INCREASE JUNE 30 JUNE 30 INCREASE
($ IN THOUSANDS) 1996 1995 (DECREASE) 1996 1995 (DECREASE)
---------------- ------- ------- ---------- -------- -------- ----------
<S> <C> <C> <C> <C> <C> <C>
Salaries................ $30,456 $26,631 14 % $ 59,544 $ 53,874 11 %
Benefits................ 5,966 4,877 22 12,628 10,058 26
------- ------- ---- -------- -------- ----
Total staff costs..... 36,422 31,508 16 72,172 63,932 13
------- ------- ---- -------- -------- ----
Occupancy, net.......... 6,685 6,524 2 12,830 12,825 --
Equipment............... 5,603 4,836 16 10,868 9,520 14
------- ------- ---- -------- -------- ----
Total occupancy and
equipment............ 12,288 11,360 8 23,698 22,345 6
------- ------- ---- -------- -------- ----
Data processing......... 4,958 4,626 7 10,208 10,315 (1)
Foreclosed property
expense, net........... (1,031) (516) (100) (1,822) (558) (227)
Regulatory expense...... 274 3,439 (92) 546 7,200 (92)
Postage................. 1,315 1,155 14 2,781 2,409 15
Stationery and supplies. 1,451 1,656 (12) 2,994 3,314 (10)
Telecommunications...... 2,039 1,810 13 4,225 3,416 24
Professional fees....... 1,156 1,439 (20) 2,544 3,695 (31)
State taxes on equity... 1,500 1,089 38 3,000 2,178 38
Advertising and
promotional expenses... 2,657 2,240 19 4,962 3,766 32
Amortization of
intangibles............ 963 896 7 1,923 1,853 4
Other................... 7,360 6,621 11 14,080 13,016 8
------- ------- ---- -------- -------- ----
Total Noninterest
Expense.............. $71,352 $67,323 6 % $141,311 $136,881 3 %
======= ======= ==== ======== ======== ====
Efficiency Ratio(1)..... 62.97 % 66.16 % 63.36 % 68.02 %
======= ======= ======== ========
</TABLE>
- --------
(1) Noninterest expense as a percentage of taxable-equivalent net interest
income plus noninterest income (excluding securities transactions).

Noninterest Expense

For the second quarter of 1996, noninterest expense totaled $71.4 million, a
$4.0 million (6%) increase from the second quarter of 1995. For the first six
months of 1996 noninterest expense totaled $141.3 million, a $4.4 million (3%)
increase over the first six months of 1995. Included in noninterest expense is
$1.5 million for the second quarter of 1996 and $3.6 million for the first six
months of 1996 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 six months ended June 30, 1996 and 1995 is presented by
major category in Table 10.

Staff costs, the largest component of noninterest expense, increased $4.9
million (16%) in the second quarter of 1996 and $8.2 million (13%) in the
first six months of 1996 compared to the same periods a year ago. Costs
related to the Hibernia employee stock ownership plan (ESOP) which was
instituted in the second quarter of 1995, an increase in Hibernia's
contributions to the 401(k) plan, higher accruals for incentives and bonuses,
and increases in various medical and insurance benefits were the major factors
contributing to these increases.

Occupancy and equipment expenses increased $.9 million (8%) in the second
quarter of 1996 and $1.4 million (6%) in the first six months of 1996 compared
to the same periods in 1995. These increases were

S-29
<PAGE>

primarily due to higher depreciation expenses related to the purchase of
computer equipment to facilitate system conversions for merged banks and to
upgrade the Bank's teller systems, ATMs and wide area network.

Data processing expenses increased $.3 million (7%) for the second quarter
of 1996 compared to the second quarter of 1995. For the first six months of
1996, data processing expenses decreased $.1 million (1%). The 1996 periods
include $.9 million and $2.2 million for the three months and six months,
respectively, in Vision 2000 expenses. The first six 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 second
quarter of 1995. Excluding the Vision 2000 expenses and the duplicate expenses
in 1995 data processing expenses decreased $.6 million for the second quarter
and $1.3 million for the first six months of 1996 compared to the same periods
in 1995. In addition to the savings from the new data processor, increased
efficiencies derived from combining the separate operations of merger partners
also contributed to the decreases.

Income from foreclosed property, net of expenses, totaled $1.0 million in
the second quarter of 1996, and $1.8 million in the first six months of 1996,
compared to $.5 million and $.6 million, respectively, for the same periods a
year ago as the 1996 periods included significant gains on the sale of several
properties.

Regulatory expenses decreased $3.2 million (92%) in the second quarter of
1996 and $6.7 million (92%) for the first six months of 1996 compared to the
same periods in 1995 due to the virtual elimination of FDIC premiums for well-
capitalized, highly-rated banks.

Telecommunications expenses increased $.2 million (13%), for the second
quarter of 1996 and $.8 million (24%) for the first six 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 $.3 million (20%) for the second quarter of
1996, and $1.2 million (31%) for the first six 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 equity increased $.4 million and $.8 million, for the second
quarter and the first six months of 1996, respectively compared to 1995 due to
the growth in equity.

Advertising and promotional expenses increased $.4 million (19%) in the
second quarter of 1996 and $1.2 million (32%) in the first six 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 62.97% for the second quarter of 1996
compared to 66.16% for the same period in 1995. This ratio for the first six
months of 1996 improved from 68.02% for the first six months of 1995 to 63.36%
for the first six months of 1996. The improvement in efficiency reflects
increases in net interest income and noninterest income combined with
proportionately lower increases in overhead.

INCOME TAXES

The Company recorded $14.1 million in income taxes in the second quarter of
1996 and $27.8 million in the first six months of 1996. For the comparable
periods in 1995, federal income tax expense totaled $2.3 million and $4.8
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.

S-30
<PAGE>

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.

TABLE 11 -- CAPITAL

<TABLE>
<CAPTION>
JUNE 30 MARCH 31 DECEMBER 31 SEPTEMBER 30 JUNE 30
($ IN MILLIONS) 1996 1996 1995 1995 1995
- --------------- -------- -------- ----------- ------------ --------
<S> <C> <C> <C> <C> <C>
Risk-based capital:
Tier 1................ $ 733.4 $ 714.3 $ 697.1 $ 667.6 $ 639.6
Total................. 800.4 778.0 758.3 725.2 695.0
Assets:
Quarterly average
assets*.............. 7,439.2 7,357.0 7,141.4 7,146.5 7,067.3
Net risk-adjusted
assets............... 5,285.3 5,014.3 4,810.5 4,512.9 4,328.9
Ratios:
Leverage.............. 9.86% 9.71% 9.76% 9.34% 9.05%
Tier 1 risk-based
capital.............. 13.88 14.25 14.49 14.79 14.78
Total risk-based
capital.............. 15.14 15.52 15.76 16.07 16.05
</TABLE>
- --------
* Excluding SFAS No. 115 adjustment and disallowed intangibles.

CAPITAL

Shareholders' equity totaled $744.4 million at June 30, 1996, compared to
$659.7 million at June 30, 1995. The increase is primarily the result of net
income over the most recent 12 months totaling $120.3 million, and a $1.7
million decrease in unearned compensation related to the ESOP instituted on
April 1, 1995. These increases were partially offset by $32.0 million in
dividends and by a $5.9 million net decrease due to changes in unrealized
gains and losses on securities available for sale. 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 Company's strong capital position allowed Hibernia to take advantage of
two attractive purchase transactions. The anticipated mergers with CM Bank
Holding Company and St. Bernard Bank and Trust, expected to close later this
year, will enable Hibernia to leverage its capital by adding assets without
increasing equity. Although Hibernia's capital ratios will decline as a result
of these mergers, they would still exceed the minimum ratios required for an
institution to be designated by banking regulators as "well capitalized."

In July 1996, the Company filed a shelf registration statement with the
Securities and Exchange Commission which allows the Company to issue up to
$250 million of securities, including preferred stock and subordinated debt,
either of which could be convertible to common stock.

LIQUIDITY

The loan-to-deposit ratio, one measure of liquidity, was 79.3% at June 30,
1996, 75.2% at March 31, 1996, and 66.4% at June 30, 1995. This increase
indicates that loans are growing faster than deposits, necessitating greater
reliance on other sources of funds. 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. A measure of reliance on short-
term borrowings and other large liabilities (such as large-denomination and
public fund CD's and foreign deposits) is the large liability dependence
ratio. Based on average balances, 18.04% of Hibernia's loans and investment
securities were funded by net large liabilities (total large liabilities less
short-term investments) in the second quarter of 1996 compared to 17.52% for
the same period in 1995. For the first six months of each year, these ratios
were 17.11% and 15.80% for 1996 and 1995, respectively.

S-31
<PAGE>

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.

MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION
AND RESULTS OF OPERATIONS

FOR THE YEARS ENDED DECEMBER 31, 1995, 1994 AND 1993

Management's Discussion presents a review of the major factors and trends
affecting the performance of Hibernia and its subsidiaries, principally
Hibernia Bank, and should be read in conjunction with Hibernia's consolidated
financial statements, notes and tables contained in Hibernia's 1995 Annual
Report on Form 10-K. Management's discussion and analysis, presented below,
has been reproduced from the Company's 1995 Annual Report on Form 10-K.
Accordingly, the discussion has not been restated to reflect two immaterial
acquisitions accounted for as poolings and consummated during the first
quarter of 1996.

In addition, the Company completed four mergers in 1995 and six mergers in
1994, all of which were accounted for as poolings of interests. Accordingly,
in the following discussion all information for years ending on or before
December 31, 1995 has been restated to reflect the effect of those mergers.
The institutions with which the Company merged are referred to as the "pooled
companies."

1995 HIGHLIGHTS:

Highlights of Hibernia's performance for 1995 include the following:

. Net income of $123.9 million ($1.05 per share), up 30% from $95.0
million ($.80 per share) in 1994.

. Continued increases in the Company's profitability, loans and capital
strength; further improvement in asset quality; and additional
enhancements to the Company's franchise.

. Loan growth of 23% to $4.5 billion at December 31, 1995, with commercial
loans up 17% and consumer loans up 30% from a year earlier.

. A decline in nonperforming assets of 31% to $25.2 million from $36.5
million at December 31, 1994. Reserve coverage of nonperforming loans
stood at 861% compared to 559% at the end of 1994. The nonperforming
asset ratio declined to 0.56% at year-end 1995 compared to 1.00% at
year-end 1994.

. An increase in net interest income of $16.5 million primarily due to a
$649.8 million increase in average loans. The shift in the mix of
earning assets to higher-yielding loans resulted in a nine basis point
increase in the net interest margin to 4.70% in 1995.

. Increases in returns on assets (ROA) and equity (ROE) to 1.78% and
19.22%, respectively, from 1.42% and 16.59% for 1994.

. Continued improvements in operating efficiency marked by an improvement
in the efficiency ratio to 65.56%, compared to 76.09% in 1994 and 78.31%
in 1993.

. An increase in total cash dividends per share for 1995 to $.25, 32%
higher than the 1994 cash dividend of $.19 per share.

. Completion of mergers with four institutions with combined assets of
$447 million and 19 offices. Since the beginning of 1994, Hibernia has
completed mergers with 10 institutions with combined assets of $1.8
billion and 64 offices. Two additional mergers with combined total
assets of $160 million and 5 offices were completed in January 1996.

S-32
<PAGE>

FINANCIAL CONDITION

Earning Assets

Interest income from earning assets (including loans, securities and short-
term investments) is the Company's main source of income. Average earning
assets totaled $6.5 billion in 1995, compared to $6.3 billion in 1994 and $6.0
billion in 1993. Average earning assets increased $232.5 million in 1995 due
to loan growth, partially offset by decreases in total securities and short-
term investments. Average earning assets increased from 1993 to 1994 due to
growth in loans and securities held to maturity, partially offset by decreases
in short-term investments and securities available for sale.

Loan demand, which has been strong since the second half of 1993, continued
to improve throughout 1995. The Company used the proceeds from maturities of
other lower-yielding earning assets and the growth in deposits to fund the
increase in loans. As a result of this shift of earning assets, average loans
as a percentage of average earning assets increased to 62.0% in 1995, compared
to 53.9% in 1994, and 51.2% in 1993. Average securities decreased to 36.2% of
average earning assets in 1995 from 43.2% in 1994 and 43.0% in 1993.

Total earning assets as of December 31, 1995 were $6.7 billion, up $405.1
million from a year earlier. Total loans increased $841.7 million (23.2%) to
$4.5 billion, while total securities and short-term investments declined by
$436.7 million.

Loans

The Company primarily deploys its funding sources into loans while
considering liquidity and credit quality. Loans allow Hibernia to meet
customer credit needs, while at the same time achieving yields that are
generally higher than those available on alternative earning assets. Lending
relationships are one part of Hibernia's goal of providing for all the
financial needs of its customers.

Hibernia engages in commercial and consumer lending. The specific
underwriting criteria for each major loan category is outlined in a formal
loan policy and is approved by the Board of Directors. In general, each loan
is evaluated based on cash flow, collateral, market conditions, prevailing
economic trends, character and leverage capacity of the borrower, and capital
and investment in a particular property, if applicable. The loan policy,
including the underwriting criteria for major loan categories, is adjusted on
a regular basis. The loan policy and underwriting criteria are adjusted due to
changes in the experience of the existing portfolio, financial and market
conditions, and regulations, among other things.

Average loans increased $649.8 million in 1995 and $279.2 million in 1994.
Both commercial and consumer lending experienced significant growth in an
improving Louisiana economy.

Table 1 details Hibernia's commercial loans classified by repayment source
and consumer loans classified by type. Consumer loans grew $502.9 million
(30.1%), and commercial loans increased $338.8 million (17.3%) in 1995. The
portfolio mix was 48.6% consumer and 51.4% commercial at year-end 1995,
compared to 46.1% and 53.9%, respectively, at year-end 1994. Hibernia's
strategy is to increase consumer lending while maintaining preeminence in
Louisiana commercial lending.

Commercial Loans. Growth in the commercial loan portfolio was distributed
among commercial and industrial, up $261.2 million (40.0%); services, up $73.5
million (25.5%); and transportation, communications and utilities, up $77.7
million (67.7%). This growth was primarily due to increases in loans to small
businesses. Hibernia has assembled an experienced team of business bankers
armed with a broad array of lending products and streamlined credit approval
processes designed to help small- and medium-sized business customers reach
their financial goals.

Consumer Loans. The increase in consumer loans to $2.2 billion at December
31, 1995, from $1.7 billion at December 31, 1994, resulted primarily from
increased marketing efforts, new products, improved application processing and
extended service hours, designed to maximize the effectiveness of the
Company's extensive statewide office network.

S-33
<PAGE>

Indirect automobile lending (primarily through dealerships) and loans
secured by mortgages on residential property are the two largest components of
the consumer portfolio.

TABLE 1 -- COMPOSITION OF LOAN PORTFOLIO

<TABLE>
<CAPTION>
DECEMBER 31
---------------------------------
1995 1994
---------------- ----------------
LOANS PERCENT LOANS PERCENT
-------- ------- -------- -------
($ IN MILLIONS)
<S> <C> <C> <C> <C>
Commercial:
Commercial and industrial.................. $ 913.4 20.4% $ 652.2 18.0%
Commercial real estate..................... 440.1 9.9 494.5 13.6
Services................................... 362.1 8.1 288.6 7.9
Health care................................ 191.6 4.3 214.7 5.9
Transportation, communications and utili-
ties...................................... 192.5 4.3 114.8 3.2
Individual................................. 102.2 2.3 97.4 2.7
Energy..................................... 93.3 2.1 94.2 2.6
-------- ----- -------- -----
Total commercial....................... 2,295.2 51.4 1,956.4 53.9
-------- ----- -------- -----
Consumer
Residential mortgages:
First mortgages.......................... 980.7 21.9 725.6 20.0
Junior liens............................. 90.5 2.0 84.7 2.3
Indirect................................... 660.7 14.8 486.0 13.4
Revolving credit........................... 91.9 2.1 74.6 2.1
Student.................................... 0.7 0.0 92.7 2.6
Other...................................... 349.7 7.8 207.7 5.7
-------- ----- -------- -----
Total consumer......................... 2,174.2 48.6 1,671.3 46.1
-------- ----- -------- -----
Total loans.................................. $4,469.4 100.0% $3,627.7 100.0%
======== ===== ======== =====
</TABLE>

Hibernia's experienced indirect lending professionals and diverse products
have helped to build the largest market share in indirect lending among banks
in Louisiana. Tiered pricing of indirect loans has enabled Hibernia to offer
top-rated customers attractive rates, while also allowing the Bank to earn
higher returns on loans carrying slightly more risk. The recent introduction
of a sub-prime product through a third party will allow Hibernia to arrange
financing for those customers who ordinarily would not be able to obtain
automobile financing through banks. Because the third party funds these loans,
Hibernia does not assume any credit risk but earns income based on the volume
of loans referred. Hibernia's market share of new car indirect lending
increased in virtually every major market in Louisiana as the result of
increases in existing indirect relationships. The indirect lending portfolio
ended 1995 at $660.7 million, a 36% increase over year-end 1994.

Residential mortgage lending increased $260.9 million (32%) in 1995.
Hibernia originated more than $350 million in loans for the purchase of homes,
keeping more than $160 million in adjustable-rate loans for its own portfolio
and securitizing and selling the balance, while generally retaining the
associated servicing rights. Hibernia services approximately $1.7 billion in
mortgage loans. In addition to the loans originated for the purchase of homes,
consumer loans secured by mortgages increased significantly.

Several successful marketing campaigns held throughout the state to promote
Hibernia's consumer loan products resulted in volume increases in other direct
consumer loan categories. The largest increase was in unsecured loans, where
direct marketing efforts for pre-approved borrowers resulted in significant
loan closings. These increases far surpass a decline in student loans of $92.0
million attributable to the sale of the student loan portfolio. Management
determined that student lending was not profitable and began liquidating the
student loan portfolio in the second quarter of 1995.

S-34
<PAGE>

Securities

At the end of 1995, securities totaled $2.1 billion, a decrease of $316.7
million, or 13.1%, from the end of 1994. The decrease is primarily due to
maturities of U.S. Treasury securities. Of total securities, 96% are debt
securities of the U.S. government or its agencies. The composition of the
securities portfolio is shown inTable 2.

On December 31, 1993, the Company adopted Statement of Financial Accounting
Standards (SFAS) No. 115, "Accounting for Certain Investments in Debt and
Equity Securities," which requires the classification of securities into one
of three categories: trading, available for sale or held to maturity.
Management determines the appropriate classification of debt securities at the
time of purchase and re-evaluates this classification periodically.

Prior to December 31, 1993, the Company classified securities as held for
sale (available for sale) and investment securities (held to maturity) based
on criteria which did not differ significantly from that required by the new
standard. Held for sale securities were recorded at the lower of cost or fair
value.

On December 29, 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 in the held to maturity
portfolio to the available for sale portfolio. At the date of the transfer,
the amortized cost of those securities was $1.6 billion and net unrealized
gains were $19.9 million. This reclassification will give 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. In the current interest rate environment it is
anticipated that future purchases of securities will be classified as
available for sale.

TABLE 2 -- COMPOSITION OF SECURITIES

<TABLE>
<CAPTION>
AVAILABLE HELD TO
DECEMBER 31 FOR SALE MATURITY TOTAL
- ----------- --------- -------- --------
($ IN MILLION)
<S> <C> <C> <C>
1995
U.S. Treasuries.................................. $ 337.4 $ -- $ 337.4
U.S. government agencies:
Mortgage-backed securities..................... 1,453.1 -- 1,453.1
Other.......................................... 222.1 -- 222.1
States and political subdivisions................ 43.2 -- 43.2
Other............................................ 42.5 -- 42.5
-------- -------- --------
Total........................................ $2,098.3 $ -- $2,098.3
======== ======== ========
1994
U.S. Treasuries.................................. $ 15.5 $ 538.0 $ 553.5
U.S. government agencies:
Mortgage-backed securities..................... 379.3 1,095.8 1,475.1
Other.......................................... 139.2 151.2 290.4
States and political subdivisions................ -- 46.4 46.4
Other............................................ 49.6 -- 49.6
-------- -------- --------
Total........................................ $ 583.6 $1,831.4 $2,415.0
======== ======== ========
1993
U.S. Treasuries.................................. $ 108.8 $ 594.4 $ 703.2
U.S. government agencies:
Mortgage-backed securities..................... 507.2 1,187.5 1,694.7
Other.......................................... 93.0 165.2 258.2
States and political subdivisions................ -- 41.8 41.8
Other............................................ 17.9 8.0 25.9
-------- -------- --------
Total........................................ $ 726.9 $1,996.9 $2,723.8
======== ======== ========
</TABLE>

S-35
<PAGE>

The Company held no trading securities at December 31, 1995, and there was
no significant trading activity during 1995, 1994 or 1993. Average securities
available for sale decreased $185.4 million in 1995, reflecting contractual
payments and prepayments of principal, primarily related to residential
mortgage refinancing. The effect of the transfer of securities from held to
maturity had little impact on the yearly average. Proceeds from the payments
and prepayments were invested primarily in loans. Average securities held to
maturity decreased $165.7 million from 1994 to 1995, primarily due to
maturities of U.S. Treasury securities.

Maturities and yields of securities at year-end 1995 are detailed in Table
3. Mortgage-backed securities are classified according to contractual maturity
without consideration of principal amortization or projected prepayments.

At December 31, 1995, the available for sale portfolio included $717.5
million of adjustable-rate securities, primarily mortgage-backed securities
whose yields are tied to a cost-of-funds index. The rates on these securities
may not fully reflect a change in market interest rates for more than a year.
The Company purchased these adjustable-rate securities to shorten the average
repricing period of its portfolio as part of its continuing strategy to reduce
interest rate risk.

TABLE 3 -- MATURITIES AND YIELDS OF SECURITIES

<TABLE>
<CAPTION>
DUE AFTER DUE AFTER
1 YEAR 5
DUE IN 1 YEAR THROUGH YEARS THROUGH DUE AFTER
OR LESS 5 YEARS 10 YEARS 10 YEARS TOTAL
-------------- ------------ -------------- -------------- --------------
AMOUNT YIELD AMOUNT YIELD AMOUNT YIELD AMOUNT YIELD AMOUNT YIELD
------- ------ ------ ----- ------- ------ -------- ----- -------- -----
($ IN MILLIONS)
<S> <C> <C> <C> <C> <C> <C> <C> <C> <C> <C>
Available for sale:(1)
U.S. Treasuries........ $ 102.1 5.03% $235.3 7.06% $ -- -- $ -- -- $ 337.4 $6.45%
U.S. government agen-
cies:
Mortgage-backed secu-
rities(2)........... 1.7 6.67 15.2 6.36 94.1 7.39% 1,342.1 6.77% 1,453.1 6.81
Other................ 56.2 4.97 93.0 5.50 18.5 6.03 54.4 6.11 222.1 5.56
States and political
subdivisions.......... 3.9 5.70 9.0 5.14 15.0 5.39 15.3 5.62 43.2 5.45
Other.................. 36.9 6.24 5.6 5.80 -- -- -- -- 42.5 6.18
------- ----- ------ ---- ------- ----- -------- ---- -------- -----
Total.............. $ 200.8 5.26% $358.1 6.55% $ 127.6 6.96% $1,411.8 6.73% $2,098.3 6.58%
======= ===== ====== ==== ======= ===== ======== ==== ======== =====
</TABLE>
- --------
(1) Yield computations are based on the market value of securities available
for sale.
(2) Mortgage-backed securities are classified according to their contractual
maturity without consideration of principal amortization or projected
prepayments.

The average repricing period of total securities at December 31, 1995 was
3.0 years, compared to 2.7 years at December 31, 1994. The repricing period
increased because almost 10% of the total securities portfolio in 1994
consisted of U.S. Treasury securities which matured in 1995. Carrying
securities available for sale at fair value has the effect of recognizing a
yield on the securities equal to the current market yield.

Asset Quality

Nonperforming assets consist of nonaccrual loans (loans on which interest
income is not currently recognized), restructured loans (loans with below-
market interest rates or other concessions due to the deteriorated financial
condition of the borrower) and foreclosed assets (assets to which title has
been assumed in satisfaction of debt and duplicate or excess bank owned
premises). Interest payments received on nonperforming loans are applied to
reduce principal if there is doubt as to the collectibility of the principal;
otherwise, these receipts are recorded as interest income. Certain
nonperforming loans are current as to principal and interest payments but are
classified as nonperforming because there is a question concerning full
collectibility of both principal and interest.

S-36
<PAGE>

Nonperforming assets totaled $25.2 million at year-end 1995, an $11.3
million (31%) decrease from the prior year. At December 31, 1995, 33.5% of
nonperforming loans were less than 60 days past due. Nonperforming assets
totaling $36.5 million at December 31, 1994 were down $76.5 million (68%) from
December 31, 1993. The composition of nonperforming assets and certain key
asset quality ratios for the past five years are illustrated in Table 4.

TABLE 4 -- NONPERFORMING ASSETS

<TABLE>
<CAPTION>
DECEMBER 31
--------------------------------------------
1995 1994 1993 1992 1991
-------- -------- -------- -------- --------
($ IN THOUSANDS)
<S> <C> <C> <C> <C> <C>
Nonaccrual loans.................. $ 17,039 $ 21,298 $ 91,910 $183,012 $305,067
Restructured loans................ -- 6,024 3,348 4,426 2,130
-------- -------- -------- -------- --------
Nonperforming loans............. 17,039 27,322 95,258 187,438 307,197
Foreclosed assets................. 8,159 9,147 17,703 45,092 97,219
-------- -------- -------- -------- --------
Total nonperforming assets.. $ 25,198 $ 36,469 $112,961 $232,530 $404,416
======== ======== ======== ======== ========
Accruing loans past due 90 days or
more............................. $ 2,466 $ 4,016 $ 4,385 $ 9,372 $ 13,583
Reserve for possible loan losses.. $146,685 $152,838 $183,127 $208,575 $232,054
Nonperforming assets/loans plus
foreclosed assets................ 0.56% 1.00% 3.51% 7.20% 8.68%
Reserve for possible loan
losses/loans..................... 3.28% 4.21% 5.72% 6.55% 5.09%
Reserve for possible loan
losses/nonperforming loans....... 860.9% 559.4% 192.2% 111.3% 75.5%
Net loans charged off/average
loans............................ 0.15% 0.36% 0.73% 2.11% 2.40%
</TABLE>

Table 5 details nonperforming loan activity during 1995 by loan type
(commercial real estate, other commercial and consumer). Payments, sales and
loans returned to performing status accounted for a $15.7 million reduction in
nonperforming loans. Charge-offs of nonperforming loans totaled $12.0 million,
while $19.0 million in loans were transferred to nonperforming status in 1995.

TABLE 5 -- SUMMARY OF NONPERFORMING LOAN ACTIVITY

<TABLE>
<CAPTION>
COMMERCIAL
REAL OTHER
ESTATE COMMERCIAL CONSUMER TOTAL
---------- ---------- -------- -------
($ IN THOUSANDS)
<S> <C> <C> <C> <C>
Nonperforming loans at December 31,
1994.................................. $13,449 $9,413 $4,460 $27,322
Additions.............................. 6,502 5,763 6,767 19,032
Charge-offs-gross...................... (2,884) (5,531) (3,562) (11,977)
Transfers to foreclosed assets......... (472) (294) (841) (1,607)
Returned to performing status.......... (5,327) (2,517) (922) (8,766)
Sales.................................. (1,655) (30) -- (1,685)
Payments............................... (1,271) (1,494) (2,515) (5,280)
------- ------ ------ -------
Nonperforming loans at December 31,
1995.................................. $ 8,342 $5,310 $3,387 $17,039
======= ====== ====== =======
</TABLE>

In addition to the nonperforming loans discussed above, there are $23.1
million of commercial loans for which payments are current but, in
management's opinion, are subject to future classification as nonperforming.

Foreclosed assets, which are recorded at fair value less estimated selling
cost, totaled $8.2 million at year-end 1995, $9.1 million at year-end 1994 and
$17.7 million at year-end 1993. Improvements in commercial real estate and
general economic conditions, which allowed for favorable dispositions, and a
decrease in the amount of loans being transferred to foreclosed assets were
the primary factors in the declines.

As of January 1, 1995, the Company adopted SFAS No. 114, "Accounting by
Creditors for Impairment of a Loan," which, as it relates to in-substance
foreclosures, requires that a creditor continue to classify these assets

S-37
<PAGE>

as loans on the balance sheet unless the creditor receives physical possession
of the collateral. Accordingly, upon adoption, $7.1 million of in-substance
foreclosures were transferred from foreclosed property to nonperforming loans.
The Company reclassified in-substance foreclosures and the related loss
reserves for all periods presented to conform to the new classification
requirements. At December 31, 1995, the recorded investment in loans that were
considered to be impaired under SFAS No. 114 was $16.2 million, with the
related reserve for possible loan losses of $2.3 million. These loans are
included in nonaccrual loans in Table 4.

One measure of asset quality is the level of nonperforming assets compared
to total loans plus foreclosed assets (nonperforming asset ratio). At year-end
1995, the Company's nonperforming asset ratio was 0.56%, compared to 1.00% at
year-end 1994 and 3.51% at year-end 1993. Another measure of asset quality is
the amount of net charge-offs during the year compared to average loans. As
illustrated in Table 6, net charge-offs in 1995 totaled $6.2 million, a $6.0
million decline from $12.2 million in 1994 and a $16.4 million reduction from
$22.6 million in 1993. Net charge-offs as a percentage of average loans were
.15% in 1995, .36% in 1994 and .73% in 1993.

The level of accruing, delinquent loans (more than 30 days past due) as a
percentage of total loans was 1.0% at December 31, 1995, compared to .9% at
year-end 1994 and .7% at year-end 1993. The commercial loan delinquency ratio
decreased in 1995 from .7% to .5%, while the consumer loan delinquency ratio
rose from 1.2% to 1.6%. Management believes that the increase in consumer loan
delinquencies was primarily attributable to delayed collection efforts caused
by system conversions during 1995 and does not appear to be indicative of a
significant increase in risk.

Reserve and Provision for Possible Loan Losses

The reserve for possible loan losses is composed of specific reserves
(assessed for each loan for which a potential loss has been identified,
including impaired loans), general reserves and an unallocated reserve.
Management continuously evaluates the reserve to ensure the level is adequate
to absorb loan losses inherent in the loan portfolio. Reserves on impaired
loans are based on discounted cash flows using the loan's initial effective
interest rate or the fair value of the collateral for certain collateral-
dependent loans. Factors contributing to the determination of specific
reserves include the financial condition of the borrower, changes in the value
of pledged collateral and general economic conditions. General reserves are
established based on historical loss experience. The unallocated portion of
the reserve serves to compensate generally for the uncertainty in estimating
loan losses, including the possibility of changes in risk ratings of loans and
specific reserve allocations.

S-38
<PAGE>

TABLE 6 -- RESERVE FOR POSSIBLE LOAN LOSSES ACTIVITY

<TABLE>
<CAPTION>
YEAR ENDED DECEMBER 31
----------------------------
1995 1994 1993
-------- -------- --------
($ IN THOUSANDS)
<S> <C> <C> <C>
Balance at beginning of year...................... $152,838 $183,127 $208,575
Loans charged off............................... (23,995) (30,199) (42,083)
Recoveries...................................... 17,842 17,979 19,522
-------- -------- --------
Net loans charged off............................. (6,153) (12,220) (22,561)
-------- -------- --------
Provision for possible loan losses................ -- (18,069) (3,246)
Addition due to acquisition of a bank............. -- -- 359
-------- -------- --------
Balance at end of year............................ $146,685 $152,838 $183,127
======== ======== ========
</TABLE>

The provision for possible loan losses (a component of earnings) is the
means by which the reserve for possible loan losses is adjusted to establish a
reserve level considered adequate by management to absorb future potential
loan losses.

The Board of Directors reviews the adequacy of the reserve each quarter. Due
to the continuing improvements in asset quality discussed earlier and low
levels of net loan charge-offs as detailed in Table 6, no provision was
recorded in 1995. In 1994 and 1993 negative provisions amounted to $18.1
million and $3.2 million, respectively.

TABLE 7 -- ALLOCATION OF RESERVE FOR POSSIBLE LOAN LOSSES

<TABLE>
<CAPTION>
DECEMBER 31, 1995
------------------
RESERVE FOR
POSSIBLE % OF
LOANS LOSSES TOTAL
------------ -----
($ IN MILLIONS)
<S> <C> <C>
Commercial real estate............................... $ 14.0 9.5%
Other commercial loans............................... 49.8 33.9
Consumer loans....................................... 37.2 25.4
Unallocated reserve.................................. 45.7 31.2
------ -----
Total................................................ $146.7 100.0%
====== =====
</TABLE>

The year-end 1995 reserve of $146.7 million provided 860.9% coverage of
nonperforming loans, compared to $152.8 million with 559.4% coverage at year-
end 1994 and $183.1 million with 192.2% coverage at year-end 1993. As a
percentage of total loans, the reserve for loan losses amounted to 3.28% at
December 31, 1995, compared to 4.21% and 5.72% at year-end 1994 and 1993,
respectively. Although the reserve for loan losses has declined over the past
three years, in total and as a percentage of loans, the present level is
considered adequate to absorb future potential loan losses. Because factors
such as loan growth, the future collectibility of loans and the amounts and
timing of future cash flows expected to be received on impaired loans are
uncertain, the level of future provisions (positive or negative), if any,
generally cannot be predicted. However, if current trends continue, it is
unlikely that provision expense will be required in the near term.

An allocation of the December 31, 1995 reserve is presented in Table 7.

S-39
<PAGE>

FUNDING SOURCES

Deposits and Borrowings

Deposits. Deposits are the Company's primary source of funding for its
earning assets. Hibernia offers a variety of deposit products designed to
attract and retain customers, with the primary focus on core deposits.

TABLE 8 -- AVERAGE DEPOSIT RATES

<TABLE>
<CAPTION>
1995 1994 1993
---- ---- ----
<S> <C> <C> <C>
NOW/Money market/Savings accounts............................. 2.41% 2.19% 2.18%
Other consumer time deposits.................................. 5.62% 4.36% 4.04%
Public fund certificates of deposit of $100,000 or more....... 5.91% 4.20% 3.29%
Certificates of deposit of $100,000 or more................... 5.05% 3.79% 3.34%
Foreign time deposits......................................... 5.75% 4.65% 2.98%
---- ---- ----
Total interest-bearing deposits............................. 4.32% 3.33% 3.07%
==== ==== ====
</TABLE>

TABLE 9 -- DEPOSIT COMPOSITION

<TABLE>
<CAPTION>
1995 1994 1993
----------------- ----------------- -----------------
AVERAGE % OF AVERAGE % OF AVERAGE % OF
BALANCES DEPOSITS BALANCES DEPOSITS BALANCES DEPOSITS
-------- -------- -------- -------- -------- --------
($ IN MILLIONS)
<S> <C> <C> <C> <C> <C> <C>
Demand, noninterest-
bearing................. $1,078.2 18.2% $1,049.6 18.2% $ 969.4 17.3%
NOW/Money market/Savings
accounts................ 1,986.7 33.5 2,150.8 37.2 2,087.1 37.3
Other consumer time
deposits................ 1,955.5 33.0 1,742.3 30.2 1,715.5 30.7
-------- ----- -------- ----- -------- -----
Total core deposits.. 5,020.4 84.7 4,942.7 85.6 4,772.0 85.3
Public fund certificates
of deposit of $100,000
or more................. 692.1 11.7 619.1 10.7 612.4 11.0
Certificates of deposit
of $100,000 or more..... 175.2 3.0 194.3 3.4 203.1 3.6
Foreign time deposits.... 35.1 0.6 17.1 0.3 5.0 0.1
-------- ----- -------- ----- -------- -----
Total deposits....... $5,922.8 100.0% $5,773.2 100.0% $5,592.5 100.0%
======== ===== ======== ===== ======== =====
</TABLE>

Average deposits totaled $5.9 billion in 1995, a $149.6 million (2.6%)
increase from 1994. Core deposits increased $77.7 million to $5.0 billion or
84.7% of total deposits. Total deposits at year-end 1995 were $6.1 billion, a
$184.1 million increase from year-end 1994.

A $213.2 million increase in average consumer time deposits, partially
offset by declines in NOW/Money market/Savings deposits accounted for most of
the $77.7 million increase in core deposits. Money market interest rates
increased during 1994 and remained above the levels of previous years in 1995.
As a result, a downward trend in consumer time deposits experienced throughout
the banking industry since the early 1990s was reversed. Consumers have
returned funds to insured deposits, primarily certificates of deposit, after
having previously invested in other higher-yielding instruments such as mutual
fund investments. The primary Hibernia product which attracted this return was
the consumer OneWay certificate of deposit, which has grown from an average
balance of $433.6 million in 1994 to $738.4 million in 1995. Average NOW/Money
market/Savings deposits declined $164.1 million as the rates paid on these
accounts were less competitive with other investment products in the higher
rate environment in 1995. Average public fund certificates of deposit
increased $73.0 million in part due to greater access in new markets to public
agency funds through the pooled companies as well as increases in funds from
existing relationships.

Borrowings. Average borrowings (which include federal funds purchased,
securities sold under agreements to repurchase and debt) increased $70.9
million to $261.3 million in 1995 compared to 1994. Average short-term

S-40
<PAGE>

borrowings in 1995 increased $85.8 million compared to 1994. The increase was
primarily the result of growth in 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,
although higher than a year ago, is still within parameters determined by
management to be prudent in terms of liquidity and rate sensitivity.

The increases in short-term borrowings were partially offset by a $14.9
million decrease in average debt for 1995 compared to 1994. This reduction
reflects the Company's practice of retiring debt acquired through mergers if
the terms of the debt are not favorable. The Company's debt at December 31,
1995 is comprised primarily of Federal Home Loan Bank advances totaling $7.4
million.

Interest Rate Sensitivity

Interest rate risk is the potential impact of changes in interest rates on
net interest income and results from mismatches in repricing opportunities of
assets and liabilities over a period of time. Simulation models are utilized
to estimate the effects of changing interest rates and various balance sheet
strategies on the level of net interest income. Management may alter the mix
of floating- and fixed-rate assets and liabilities, change pricing schedules,
adjust maturities through sales and purchases of securities available for sale
and enter into derivative contracts as a means of limiting interest rate risk
to an acceptable level. Table 10 presents Hibernia's interest rate sensitivity
position at December 31, 1995.

TABLE 10 -- INTEREST RATE SENSITIVITY AND GAP ANALYSIS

<TABLE>
<CAPTION>
OVER OVER 5 YEARS
DECEMBER 31, 1995 1-30 31-60 61-90 91-365 1 YEAR- AND NON-
($ IN THOUSANDS) DAYS DAYS DAYS DAYS 5 YEARS SENSITIVE TOTAL
----------------- ---------- --------- ----------- ----------- ----------- ------------- ----------
<S> <C> <C> <C> <C> <C> <C> <C>
Earning assets:
Loans.................. $1,287,741 $ 403,035 $ 53,899 $ 613,384 $ 1,976,126 $ 135,248 $4,469,433
Securities available
for sale.............. 2,098,310 - - - - - 2,098,310
Other earning assets... 85,195 - - - - - 85,195
---------- --------- ----------- ----------- ----------- ------------- ----------
Total earning assets. 3,471,246 403,035 53,899 613,384 1,976,126 135,248 6,652,938
---------- --------- ----------- ----------- ----------- ------------- ----------
Funding sources:
NOW/Money market/
Savings accounts....... 2,044,219 - - - - - 2,044,219
Other interest-bearing
deposits.............. 1,070,547 265,867 267,702 893,806 280,726 94,781 2,873,429
Short-term borrowings.. 272,947 - - - - - 272,947
Debt................... 1,264 - - - - 7,403 8,667
Non-interest bearing
sources............... - - - - - 1,453,676 1,453,676
---------- --------- ----------- ----------- ----------- ------------- ----------
Total funding
sources............. 3,388,977 265,867 267,702 893,806 280,726 1,555,860 6,652,938
---------- --------- ----------- ----------- ----------- ------------- ----------
Repricing/maturity gap:
Period................. $ 82,269 $ 137,168 $ (213,803) $ (280,422) $ 1,695,400 $ (1,420,612) $ --
Cumulative............. $ 82,269 $ 219,437 $ 5,634 $ (274,788) $ 1,420,612 $ -- $ --
Gap/total earning
assets:................
Period................. 1.2% 2.1% (3.2)% (4.2)% 25.5% (21.4)%
Cumulative............. 1.2% 3.3% 0.1 % (4.1)% 21.4%
</TABLE>

This profile, usually referred to as a Gap analysis, is based on point in
time and may not be meaningful because assets and liabilities must be
categorized according to contractual maturities and repricing periods rather
than estimating these characteristics, as is done in simulation models. Also,
the Gap analysis does not consider subsequent changes in interest rate levels
or spreads between asset and liability categories. Although Table 10 indicates
that the Company is liability-sensitive (interest-bearing liabilities exceed
earnings assets) up to one

S-41
<PAGE>

year, this may not be true in practice. The 1-30 day deposit category includes
NOW, money market and savings accounts which have indeterminate maturities.
The rates paid on these core deposits, which account for 39.3% of interest-
bearing funds, do not necessarily reprice in a direct relationship to changes
in interest rates. In addition, one of Hibernia's deposit products is the
consumer OneWay CD which gives the customer a one-time opportunity to adjust
the rate on a certificate of deposit during its two-year term. As of December
31, 1995, these deposits totaled $756.6 million, of which $232.5 million had
been repriced. The remaining $524.1 million are included in the 1-30 day
deposit category because they may reprice at any time. However, these deposits
adjust to market rates over a much longer period as individual depositors
choose when to exercise the option to adjust the rate on their deposits.

In addition to core deposits, which serve to lessen the volatility of net
interest income in changing rate conditions, the Company's loan portfolio
contains fixed-rate mortgage loans that have actual maturities and cash flows
that vary with the level of interest rates. These earning assets are reported
in the "over 5 years and non-sensitive" category, when in fact a portion of
these balances may be subject to repricing within one year or less. Depending
on market interest rates, actual cash flows from these loans will vary from
the contractual maturities due to payoffs and refinancing activity.

On a limited basis, Hibernia uses derivative financial instruments to manage
interest rate exposure. These agreements involve the risk of dealing with
counterparties and their ability to meet contractual terms. These
counterparties must receive appropriate credit approval before the Company
enters into an interest rate contract. Notional principal amounts express the
volume of these transactions, although the amounts potentially subject to
credit and market risk are much smaller. Deposit-related interest rate swaps
may be entered into as hedges against longer-term deposits of the same
maturity, exchanging a fixed rate of interest for a floating rate. The
differential to be paid or received is accrued as interest rates change and is
recognized as an adjustment to interest expense on deposits. The Company had
no deposit-related interest rate swaps at December 31, 1995. Deposit-related
interest rate swaps totaled $15.0 million at the end of 1994.

Derivative financial instruments are also held or issued by the Company for
trading purposes to provide Hibernia customers the ability to manage their own
interest rate sensitivity. In general, matched trading positions are
established to minimize risk to the Company. The notional value of derivative
financial instruments held for trading totaled $198.3 million at year-end
1995, $223.1 million at year-end 1994 and $87.7 million at year-end 1993.
Included in these derivative instruments is an interest rate swap agreement
between a customer and an unaffiliated bank guaranteed by the Company, which
had a notional value of $68.0 million as of December 31, 1995 and $74.0
million as of December 31, 1994. The Company was exposed to loss only if the
interest payments the customer was obligated to pay exceeded those it was
entitled to receive from the unaffiliated bank and the customer defaulted.
This interest rate swap agreement matured January 2, 1996.

Net Interest Margin

The net interest margin is taxable-equivalent net interest income as a
percentage of average earning assets. Net interest income is the difference
between total interest and fee income generated by earning assets and total
interest expense incurred on interest-bearing liabilities and is affected by
the:

-- volume, yield and mix of earning assets;
-- level of nonperforming loans;
-- volume, yield and mix of interest-bearing liabilities;
-- amount of noninterest-bearing liabilities supporting earning assets; and
-- interest rate environment.

The net interest margin is composed of the net interest spread, which
measures the difference between the average yield on earning assets and the
average rate paid on interest-bearing liabilities, and the contribution of
noninterest-bearing funds, which measures the effect of noninterest-bearing
funds (primarily demand deposits and shareholders' equity) on net interest
income. In general, the higher the ratio of noninterest-bearing funds

S-42
<PAGE>

supporting earning assets, the higher the net interest margin. Hibernia's
noninterest-bearing funds ratio was 21.32% in 1995, compared to 21.46% in 1994
and 20.58% in 1993. Table 11 details the components of the net interest margin
for the past five years.

The net interest margin of 4.70% in 1995 compares to 4.61% in 1994 and 4.70%
in 1993. The change in the mix of earning assets to proportionately more loans
- -- with comparatively higher yields than other earning assets -- contributed
to the increase in the net interest margin. In 1995, average loans were 62.0%
of average earning assets compared to 53.9% in 1994. In addition, the value of
Hibernia's noninterest-bearing funds increased in the current higher-rate
environment resulting in an increase in the net interest margin. These
favorable effects were partially offset by the narrowing of the net interest
spread as funding costs increased by 101 basis points.

The nine basis point decline in the net interest margin from 1993 to 1994
was due to the reinvestment, at lower rates, of funds received from maturities
and prepayments of securities and loans acquired during the higher rate
environment of earlier years, and a higher cost of funds. This decline was
partially offset by a change in the mix of earning assets as higher-yielding
loans increased while lower-yielding short-term investments decreased as a
proportion of total earning assets.

TABLE 11 -- NET INTEREST MARGIN (TAXABLE-EQUIVALENT)

<TABLE>
<CAPTION>
1995 1994 1993 1992 1991
----- ----- ----- ----- -----
<S> <C> <C> <C> <C> <C>
Yield on earning assets..................... 8.15% 7.26% 7.19% 7.95% 9.52%
Rate on interest-bearing liabilities........ 4.38 3.37 3.13 4.02 6.16
----- ----- ----- ----- -----
Net interest spread........................ 3.77 3.89 4.06 3.93 3.36
Contribution of noninterest-bearing funds... 0.93 0.72 0.64 0.57 0.64
----- ----- ----- ----- -----
Net interest margin........................ 4.70% 4.61% 4.70% 4.50% 4.00%
===== ===== ===== ===== =====
Noninterest-bearing funds supporting earning
assets..................................... 21.32% 21.46% 20.58% 14.23% 10.55%
</TABLE>

RESULTS OF OPERATIONS

The Company earned $123.9 million, or $1.05 per share, in 1995. In 1994, net
income totaled $95.0 million, or $.80 per share. The Company reported net
income before the cumulative effect of a change in accounting for income taxes
of $66.7 million, or $.57 per share, in 1993.

Operating results improved in 1995 because of a $16.5 million increase in
net interest income resulting from an improved net interest margin and higher
earning assets, a $10.6 million increase in noninterest income and a $23.6
million decrease in noninterest expense. In addition, 1994 results were
benefited by an $18.1 million negative loan loss provision, whereas no
provision was recorded in 1995. Improvements in asset quality and operating
efficiency contributed to the improvement in operating income in 1994 compared
to 1993.

Net Interest Income

Net interest income on a taxable-equivalent basis increased $16.6 million,
or 5.7%, to $305.2 million in 1995 from $288.6 million in 1994. Taxable-
equivalent net interest income in 1993 was $284.1 million.

Taxable-equivalent net interest income increased in 1995 over 1994 and in
1994 over 1993 as a result of the growth in earning assets and the change in
the mix of earning assets, partially offset by lower spreads between earning
assets and interest-bearing liabilities.

As indicated in Table 12, the change in net volumes raised taxable-
equivalent net interest income by $22.1 million in 1995 compared to 1994. A
$59.2 million increase in taxable-equivalent interest income due to the growth
in loans was partially offset by a decrease in taxable-equivalent interest
income related to a reduction in

S-43
<PAGE>

other earning assets (primarily securities). In addition, interest expense
increased due to the growth in interest-bearing liabilities. The net change
attributable to interest rates lowered taxable-equivalent net interest income
by $5.5 million, reflecting a narrowing of the net interest spread as interest
rates rose. The $45.4 million increase in interest expense due to higher rates
was partially offset by a $39.9 million increase in taxable-equivalent
interest income.

For 1994 compared to 1993, the change in net volumes raised taxable-
equivalent net interest income by $21.6 million with the growth in loans
adding $24.4 million to taxable-equivalent net interest income. The net change
attributable to interest rates lowered taxable-equivalent net interest income
by $17.0 million.

TABLE 12 -- CHANGES IN TAXABLE-EQUIVALENT NET INTEREST INCOME (1)

<TABLE>
<CAPTION>
1995 COMPARED TO 1994 1994 COMPARED TO 1993
---------------------------- -----------------------------
INCREASE (DECREASE) DUE TO CHANGE IN:
-----------------------------------------------------------
VOLUME RATE TOTAL VOLUME RATE TOTAL
($ IN THOUSANDS) -------- -------- -------- -------- --------- --------
<S> <C> <C> <C> <C> <C> <C>
Taxable-equivalent
interest earned on:
Loans.................. $ 59,179 $ 17,188 $ 76,367 $ 24,374 $ 448 $ 24,822
Securities available
for sale.............. (11,591) 6,038 (5,553) (1,169) (4,013) (5,182)
Securities held to
maturity.............. (9,788) 14,027 4,239 7,003 (3,537) 3,466
Short-term investments. (3,203) 2,630 (573) (6,178) 2,718 (3,460)
-------- -------- -------- -------- --------- --------
Total................. 34,597 39,883 74,480 24,030 (4,384) 19,646
-------- -------- -------- -------- --------- --------
Interest paid on:
NOW/Money
market/Savings
accounts.............. (3,748) 4,622 874 1,395 98 1,493
Other consumer time.... 10,090 23,824 33,914 1,093 5,504 6,597
Public fund
certificates of
deposit of $100,000 or
more.................. 3,344 11,561 14,905 221 5,606 5,827
Certificates of deposit
of $100,000 or more... (779) 2,268 1,489 (302) 870 568
Foreign deposits....... 998 226 1,224 524 121 645
Short-term borrowings.. 3,781 3,716 7,497 851 918 1,769
Debt................... (1,175) (826) (2,001) (1,309) (503) (1,812)
-------- -------- -------- -------- --------- --------
Total................. 12,511 45,391 57,902 2,473 12,614 15,087
-------- -------- -------- -------- --------- --------
Taxable-equivalent net
interest income........ $ 22,086 $ (5,508) $ 16,578 $ 21,557 $ (16,998) $ 4,559
======== ======== ======== ======== ========= ========
</TABLE>
- --------
(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.

Noninterest Income

Service charges on deposits, trust fees, mortgage loan servicing fees,
retail investment service fees and income generated from the operation of
automated teller machines (ATMs) were the largest contributors to noninterest
income in 1995. Noninterest income totaled $97.5 million in 1995, compared to
$86.9 million in 1994 and $85.8 million in 1993.

Excluding securities transactions, noninterest income was up $8.2 million
(9%) in 1995 compared to 1994. More than half of the increase resulted from
nonrecurring transactions. The Company recorded gains of $2.4 million related
to the divestiture of three banking offices in Northwest Louisiana in
connection with the merger with Pioneer Bancshares Corporation and $3.4
million from the sale of the student loan portfolio and municipal bond
administration business. The sale of the student loan portfolio and the
municipal bond administration business resulted from strategic initiatives
designed to focus Hibernia's efforts on businesses in which it enjoys a
competitive advantage and which provide acceptable returns on investment.

S-44
<PAGE>

Also contributing to the increase in noninterest income were increases in
ATM fees, sales of credit-related insurance products, service charges on
deposits and gains on the sale of mortgage loans. These increases were
partially offset by a decline in trust fees. In addition, 1994 included $1.8
million of nonrecurring income related to the buy-back of residual balances of
loans securitized and sold in 1990.

TABLE 13 -- NONINTEREST INCOME

<TABLE>
<CAPTION>
PERCENT INCREASE
(DECREASE)
-------------------
1995 1994
1995 1994 1993 OVER 1994 OVER 1993
------- ------- ------- --------- ---------
($ IN THOUSANDS)
<S> <C> <C> <C> <C> <C>
Service charges on deposits...... $45,009 $44,515 $41,211 1.1% 8.0%
Trust fees....................... 11,705 12,420 13,314 (5.8) (6.7)
Other service, collection and
exchange charges:
Mortgage loan servicing fees.... 7,586 7,137 7,558 6.3 (5.6)
Retail investment service fees.. 6,145 6,069 4,612 1.3 31.6
ATM fees........................ 5,458 3,084 923 77.0 234.1
Other........................... 8,530 4,777 7,402 78.6 (35.5)
------- ------- ------- ----- -----
Total other service, collection
and exchange charges.......... 27,719 21,067 20,495 31.6 2.8
------- ------- ------- ----- -----
Other income:
Gain on divestiture of banking
offices........................ 2,361 -- -- -- --
Gain on sales of business lines. 3,402 -- -- -- --
Other income.................... 7,362 11,389 10,501 (35.4) 8.5
------- ------- ------- ----- -----
Total other income............. 13,125 11,389 10,501 15.2 8.5
------- ------- ------- ----- -----
Securities gains (losses), net... (13) (2,451) 285 (99.5) N/M
------- ------- ------- ----- -----
Total noninterest income....... $97,545 $86,940 $85,806 12.2% 1.3%
======= ======= ======= ===== =====
</TABLE>
- --------
N/M=Not meaningful

ATM fees increased $2.4 million (77%) due to an expanded and upgraded
network and surcharges on ATM transactions. Income from credit-related
insurance products increased $2.0 million due to improvements in both the
product line and marketing efforts. The increase in service charges on
deposits of $.5 million (1%) was due to increases in fee-generating deposit
balances and an increase, during the fourth quarter of 1995, in the fees
charged for certain deposit-related activities.

Gains on sales of mortgage loans were up $1.6 million in 1995 compared to
losses on sales of mortgage loans of $.2 million in 1994. The Company enters
into forward contracts to securitize and sell its expected production of
mortgage loans at a locked-in rate. In 1994 the rise in mortgage loan rates
resulted in a higher than expected percentage of mortgage loan closings. To
the extent that mortgage loan production exceeded expectations and given the
rising rate environment, sales in the secondary market in 1994 resulted in
losses.

Trust fees declined $.7 million (6%) due primarily to the sale of the
municipal bond administration business. However, this decline was partially
offset by a $.1 million (1%) increase in retail investment service fees.
Although the narrowing of the spread between fixed annuity investments and
other alternative investments led to a significant decline in commissions from
the sale of fixed annuity products, the Bank continued to meet the financial
needs of customers by offering other retail investment products such as
variable annuities and mutual funds through its brokerage subsidiary.

The $3.9 million (5%) increase (excluding securities transactions) in 1994
compared to 1993 was due to increases in retail investment service fees,
service charges on deposits and ATM fees, partially offset by declines in
income from trust fees and the sale of mortgage loans.

S-45
<PAGE>

Noninterest Expense

Noninterest expense totaled $264.0 million in 1995, compared to $287.6
million in 1994 and $289.4 million in 1993. Noninterest expense decreased
$23.6 million (8%) in 1995 compared to a year earlier due to reduced deposit
insurance premiums of $6.8 million in 1995 as federal regulators, prompted by
strengthened FDIC reserves, virtually eliminated premiums paid by banks on
deposits; a charge for the impairment of goodwill of $17.6 million taken in
1994; and a reduction of $4.2 million in expenses related to merger
activities. These items were partially offset by a $6.2 million reduction in
net revenues in 1995 attributable to foreclosed properties.

TABLE 14--NONINTEREST EXPENSE
<TABLE>
<CAPTION>
PERCENT
INCREASE
(DECREASE)
--------------
1995 1994
OVER OVER
($ IN THOUSANDS) 1995 1994 1993 1994 1993
---------------- -------- -------- -------- ----- ------
<S> <C> <C> <C> <C> <C>
Salaries........................ $108,622 $105,752 $ 94,796 2.7% 11.6%
Benefits........................ 19,400 19,674 19,505 (1.4) 0.9
-------- -------- -------- ----- ------
Total staff costs.............. 128,022 125,426 114,301 2.1 9.7
-------- -------- -------- ----- ------
Occupancy, net.................. 25,379 27,060 25,973 (6.2) 4.2
Equipment....................... 20,541 16,894 14,369 21.6 17.6
-------- -------- -------- ----- ------
Total occupancy and equipment.. 45,920 43,954 40,342 4.5 9.0
-------- -------- -------- ----- ------
Data processing................. 18,824 21,092 18,352 (10.8) 14.9
Foreclosed property expense,
net............................ (950) (7,120) 9,163 (86.7) N/M
Regulatory expense.............. 7,852 14,616 16,309 (46.3) (10.4)
Provision for data processing
enhancements................... -- -- 11,991 -- (100.0)
Postage......................... 5,078 4,561 4,567 11.3 (0.1)
Stationery and supplies......... 5,861 5,171 5,123 13.3 0.9
Telecommunications.............. 6,957 4,230 3,282 64.5 28.9
Professional fees............... 8,239 11,046 10,329 (25.4) 6.9
State taxes on equity........... 4,491 3,104 2,745 44.7 13.1
Advertising and promotional
expenses....................... 6,857 5,732 6,374 19.6 (10.1)
Amortization of intangibles..... 3,709 23,231 8,446 (84.0) 175.1
Other........................... 23,173 32,600 38,081 (28.9) (14.4)
-------- -------- -------- ----- ------
Total noninterest expense...... $264,033 $287,643 $289,405 (8.2)% (0.6)%
======== ======== ======== ===== ======
Efficiency ratio (1)............ 65.56% 76.09% 78.31%
</TABLE>
- --------
(1) Noninterest expense as a percentage of net interest income (T.E.) plus
noninterest income (excluding securities transactions).

Staff costs increased $2.6 million (2%), or $4.7 million (4%) after merger-
related expenses are excluded, primarily due to costs related to the Hibernia
Employee Stock Ownership Plan (ESOP) which was instituted in the second
quarter of 1995, and merit increases. The ESOP is intended, among other
things, to more closely align the interests of employees with those of
shareholders.

Occupancy and equipment expense increased $2.0 million (4%), or $4.1 million
(10%) excluding merger-related expenses, primarily due to higher depreciation
and maintenance expenses related to the Company's investment in new technology
designed to improve customer service and enhance employee efficiency.

Data processing expenses decreased $2.3 million (11%), or $3.0 million (15%)
excluding merger-related expenses. The decrease is a result of Hibernia's
conversion to a new data processor in January 1995, which was designed to
enhance customer service and promote operating efficiencies, while reducing
overall data processing costs. Telecommunications expenses increased $2.7
million as Hibernia built and outsourced the operation of its

S-46
<PAGE>

own wide area network instead of using the network of its prior data
processing provider. In addition, data line expenses related to the enhanced
ATM network increased telecommunications expenses.

Professional fees decreased $2.8 million (25%), or $1.8 million (22%)
excluding merger-related expenses, primarily due to a reduction in legal fees.

Excluding the charge for the impairment of goodwill recorded in 1994,
amortization of intangibles decreased $1.9 million (34%). The lower level of
intangibles resulting from the 1994 charge led to the reduction in
amortization expense.

Other noninterest expenses declined due to continuing efforts to improve
efficiency and to achieve economies of scale contemplated in merger activity.

Noninterest expense declined $1.8 million in 1994 compared to 1993. Included
in 1993 expense was a provision for data processing enhancements totaling
$12.0 million related to the contract with the Company's new data processing
service provider. This provision represented an estimate of costs relating to
conversion, write-downs of application software that was replaced and
penalties for termination of the previous contract. The Company also recorded
a provision for the recognition of the economic impairment of certain
facilities which amounted to $2.7 million, as well as a $10.4 million addition
to litigation reserves relating to a shareholder class-action suit and other
suits.

Excluding the charge for the impairment of goodwill and merger-related
expenses in 1994 and the 1993 expenses mentioned above, total noninterest
expenses declined $5.4 million (2%) to $258.9 million in 1994.

Foreclosed property expenses decreased $16.3 million, while staff costs
increased $11.1 million (10%), or $7.6 million (7%) excluding merger-related
costs, primarily due to performance based management incentive programs and
merit increases.

Occupancy and equipment expense increased $3.6 million (9%), or $1.0 million
(2%) excluding merger-related expenses, primarily due to efforts to conform
equipment of pooled companies to a common standard and investments in new
technology designed to enhance customer service. Data processing expenses
increased $2.7 million (15%), or $1.8 million (10%) excluding merger-related
expenses, primarily due to dual expenses involved in the conversion to a new
vendor, as well as enhancements to the Company's technology. Regulatory
expenses declined $1.7 million (10%) due to a decline in the FDIC assessment
rate in the second half of 1994, reflecting the Bank's improved rating from
the Office of the Comptroller of the Currency.

The Company's efficiency ratio, defined as noninterest expense as a
percentage of taxable-equivalent net interest income plus noninterest income
(excluding securities gains and losses), is one measure of the success of its
efforts to control costs and to generate income. The efficiency ratio of
65.56% in 1995 compares to 76.09% in 1994. Excluding the charge for the
impairment of goodwill, the efficiency ratio in 1994 was 71.44%.

Income Taxes

The Company recorded a $9.4 million provision for income taxes in 1995,
compared to $5.6 million and $11.3 million in 1994 and 1993, respectively. The
1994 and 1993 amounts include federal income tax expense recorded by the
pooled companies. The Bank is subject to a Louisiana shareholder tax based
partly on income. The income portion of the Louisiana shareholder tax is
reported as state income tax. In addition, certain subsidiaries of the Company
and the Bank are subject to Louisiana state income tax.

Effective January 1, 1993, the Company adopted SFAS No. 109, "Accounting For
Income Taxes." The cumulative effect of adoption was an increase in net income
of $3.0 million in 1993. During 1995, 1994 and 1993 the Company recorded
federal income taxes at a lower-than-normal effective tax rate due to
previously unrecognized deferred tax benefits.

S-47
<PAGE>

Net future deductible temporary differences at December 31, 1995, were
$156.9 million. The reserve for possible loan losses represents $146.7 million
of the future deductible temporary differences. The reserve for possible loan
losses has been recognized as expense for financial reporting purposes but is
not deductible for federal income tax purposes until charge-offs are taken.
Valued at the 35% federal statutory tax rate, the net future deductible
amounts including alternative minimum tax credits of $.3 million, if
ultimately recognized, would generate tax benefits of $55.2 million. These
benefits are reflected as the Company's deferred tax asset at December 31,
1995. The Company fully recorded its deferred tax asset during 1995 based on
its carryback potential and its ability to generate future taxable income.
Accordingly, the Company will recognize federal income tax expense throughout
1996 at an effective tax rate approximately equal to the statutory tax rate.

CAPITAL

Capital represents shareholder ownership in the Company - the book value of
assets in excess of liabilities. It provides a base for asset growth while
serving, together with the reserve for possible loan losses, as a cushion
against potential losses. Support for future asset expansion will come from
utilization of existing capital, issuance of capital stock and retention of
earnings. Hibernia's dividend payout ratio (dividends declared divided by net
income) was 23.81% in 1995 and 23.75% in 1994, as the Company seeks a balance
between shareholders' return and earnings retention requirements.

Shareholders' equity totaled $717.2 million at the end of 1995, compared to
$592.0 million at the end of 1994 and $551.8 million at the end of 1993. The
$125.2 million (21%) increase in 1995 was primarily due to current-year
earnings totaling $123.9 million; and a $40.4 million increase due to the
change in unrealized gains (losses) on securities available for sale,
partially offset by $28.6 million in dividends and a $14.4 million increase in
unearned compensation related to the ESOP instituted in 1995. The $40.2
million (7%) increase in 1994 reflected the Company's $95.0 million in
earnings, partially offset by dividends totaling $19.8 million and the $37.6
million decrease due to the change in unrealized gains (losses) on securities
available for sale.

TABLE 15 -- RISK-BASED CAPITAL CALCULATIONS

<TABLE>
<CAPTION>
MINIMUM
DECEMBER 31, 1995 ($ IN MILLIONS) BALANCE RATIO STANDARDS
- --------------------------------- -------- ----- ---------
<S> <C> <C> <C>
Tier 1 (core capital):
Shareholders' equity.......................... $ 717.2
Less: goodwill and other intangibles.......... (19.1)
Less: unrealized gains on securities available
for sale..................................... (16.5)
--------
Total Tier 1................................ 681.6 14.38% 4.00%
--------
Tier 2 (supplemental capital):
Allowable reserve for possible loan losses
(limited to 1.25% of gross risk-weighted
assets; total reserves $146.7 million)....... 60.3
--------
Total Tier 2................................ 60.3 1.27
-------- -----
Total capital............................... $ 741.9 15.65% 8.00%
======== =====
Net risk-weighted assets (includes off-balance
sheet amounts)................................. $4,739.6
</TABLE>

Regulations applicable to national banks and their holding companies
prescribe minimum capital levels. These levels are based on established
guidelines which relate required capital standards to both risk-weighted
assets (risk-based capital ratios) and total assets (leverage ratio). In
accordance with risk-based guidelines, assets and off-balance-sheet financial
instruments are assigned a weight to measure their level of risk. The total
risk-based capital ratio for the Company was 15.65% at year-end 1995, compared
to 16.53% at year-end 1994. Leverage ratios were 9.75% and 8.90% at year-end
1995 and 1994, respectively. The total risk-based capital ratio declined 88
basis points in 1995 due to the shift in assets from lower-risk securities to
loans which carry higher yields. However, the year-end 1995 ratios (risk-based
and leverage) significantly exceed the standards

S-48
<PAGE>

required for designation of an institution as "well-capitalized" by
regulators. Table 15 shows the calculation of risk-based capital ratios for
the Company and presents a comparison of such ratios to the minimum regulatory
standards.

LIQUIDITY

Liquidity is a measure of a bank's ability to fund loan commitments and meet
deposit maturities and withdrawals in a timely and cost-effective way. These
needs can be met by generating profits, converting assets (such as short-term
investments and securities available for sale) to cash and attracting new
deposits. Management monitors liquidity through a periodic review of maturity
profiles, yield and rate behaviors, and loan and deposit forecasts to minimize
funding risks.

Attracting and retaining core deposits at competitive rates is the Bank's
primary source of liquidity. The Bank's extensive retail office network, aided
by the introduction of new deposit products, provided $5.2 billion in core
deposits at year-end 1995, up 1.4% from $5.1 billion a year earlier. As
previously mentioned in the discussion of borrowings, Hibernia has a large
base of cash management-related repurchase agreements as part of total
customer relationships. Because of the nature of the relationships, these
funds are considered to be stable and not subject to the same volatility as
other sources of noncore funds. Large-denomination certificates of deposit and
public funds were additional sources of liquidity during the year.

The Bank's loan-to-deposit ratio at year-end 1995 increased to 73.4%,
compared to 61.5% at year-end 1994 and 55.9% at year-end 1993. These increases
resulted from a modest increase in the deposit base, while loans experienced
significant growth. Management believes that current and projected levels of
short-term investments and securities available for sale are adequate to meet
the Company's liquidity needs. Hibernia's continuing improvement in
certificate of deposit and debt ratings enhances its ability to raise funds in
the open market. In addition, membership in the Federal Home Loan Bank further
augments liquidity management by providing a readily accessible source of
funds.

Hibernia Corporation (the Parent Company) requires liquidity to fund
operating expenses and investments and to pay dividends. At December 31, 1995,
the Parent Company had $65.4 million in funds. During 1995, the Parent Company
received $64.8 million in dividends from its bank subsidiary, and paid $28.6
million in dividends to shareholders.

The Consolidated Statements of Cash Flows can be used to assess the
Company's ability to generate positive future net cash flows from operations
and meet future obligations. The Company incurred a net decrease in cash and
cash equivalents in 1995 of $123.8 million. The decrease was the result of
cash used in investing activities of $535.7 million, as loans increased
$1,132.7 million. This decline in cash due to loan fundings was partially
offset by a net decrease of $358.8 million in securities. Operating activities
provided $122.4 million and financing activities provided $289.5 million in
cash in 1995. Cash provided by financing activities resulted from increases in
deposits and short-term borrowings, primarily repurchase agreements with
customers.

Cash and cash equivalents decreased $9.0 million in 1994. This decrease was
the result of cash used in investing activities of $245.9 million, primarily
relating to a net increase in loans, partially offset by a net decrease in
investments. Both operating and financing activities provided cash during
1994, with operations providing $98.5 million and financing activities
providing $138.4 million resulting from an increase in deposits.

S-49
<PAGE>

QUARTERLY CONSOLIDATED SUMMARY OF INCOME AND SELECTED FINANCIAL DATA(1)

<TABLE>
<CAPTION>
1995 1994
-------------------------------------- --------------------------------------
($ IN THOUSANDS, EXCEPT
PER-SHARE DATA) FOURTH THIRD SECOND FIRST FOURTH THIRD SECOND FIRST
- ----------------------- --------- -------- -------- -------- -------- -------- -------- --------
<S> <C> <C> <C> <C> <C> <C> <C> <C>
Interest income.......... $135,177 $133,314 $129,892 $124,792 $118,127 $115,168 $109,537 $105,893
Interest expense......... 56,712 57,483 56,694 52,526 46,588 42,982 38,864 37,079
--------- -------- -------- -------- -------- -------- -------- --------
Net interest income..... 78,465 75,831 73,198 72,266 71,539 72,186 70,673 68,814
Provision for possible
loan losses............. -- -- -- -- 104 (18,993) 285 535
--------- -------- -------- -------- -------- -------- -------- --------
Net interest income
after provision for
possible loan losses... 78,465 75,831 73,198 72,266 71,435 91,179 70,388 68,279
--------- -------- -------- -------- -------- -------- -------- --------
Noninterest income:
Noninterest income...... 24,554 24,063 25,097 23,844 21,528 23,314 22,379 22,170
Securities gains
(losses), net.......... 52 (20) (49) 4 (4,275) 1,634 (1) 191
--------- -------- -------- -------- -------- -------- -------- --------
Noninterest income....... 24,606 24,043 25,048 23,848 17,253 24,948 22,378 22,361
Noninterest expense...... 66,053 63,524 66,087 68,369 71,060 81,785 70,310 64,488
--------- -------- -------- -------- -------- -------- -------- --------
Income before taxes..... 37,018 36,350 32,159 27,745 17,628 34,342 22,456 26,152
Income tax expense
(benefit)............... 2,265 2,790 2,082 2,276 (1,128) 3,352 1,563 1,771
--------- -------- -------- -------- -------- -------- -------- --------
NET INCOME.............. $ 34,753 $ 33,560 $ 30,077 $ 25,469 $ 18,756 $ 30,990 $ 20,893 $ 24,381
========= ======== ======== ======== ======== ======== ======== ========
NET INCOME PER SHARE(2). $ 0.30 $ 0.29 $ 0.26 $ 0.21 $ 0.16 $ 0.26 $ 0.18 $ 0.21
========= ======== ======== ======== ======== ======== ======== ========
Cash dividends declared
per share(2)............ $ 0.07 $ 0.06 $ 0.06 $ 0.06 $ 0.06 $ 0.05 $ 0.04 $ 0.04
Average shares
outstanding (000s)...... 117,408 117,318 117,681 119,137 118,712 118,643 118,538 118,483
SELECTED QUARTER-END BALANCES (IN
MILLIONS)
Loans.................... $ 4,469.4 $4,205.1 $3,993.0 $3,791.9 $3,627.7 $3,532.6 $3,369.7 $3,216.7
Deposits................. 6,085.1 5,923.9 5,976.7 5,926.9 5,901.0 5,785.7 5,762.9 5,967.8
Debt..................... 8.7 8.8 9.1 10.9 11.8 10.7 29.6 37.3
Equity................... 717.2 673.1 644.6 628.4 592.0 585.7 565.5 558.0
Total assets............. 7,196.2 6,962.4 7,002.6 6,866.9 6,779.3 6,667.8 6,681.3 6,889.7
SELECTED AVERAGE BALANCES
(IN MILLIONS)
Loans.................... $ 4,343.0 $4,077.3 $3,929.6 $3,741.9 $3,572.6 $3,445.6 $3,298.5 $3,177.6
Deposits................. 5,919.0 5,935.7 5,898.7 5,937.8 5,785.8 5,764.7 5,784.2 5,757.8
Debt..................... 8.7 8.9 10.6 11.1 11.6 17.2 32.6 37.9
Equity................... 684.4 655.1 628.5 608.8 592.0 577.4 561.4 560.2
Total assets............. 7,012.1 7,007.0 6,921.2 6,858.3 6,676.9 6,669.9 6,690.6 6,731.1
SELECTED RATIOS
Annualized return on
average assets.......... 1.98% 1.92% 1.74% 1.49% 1.12% 1.86% 1.25% 1.45%
Annualized return on
average equity.......... 20.31% 20.49% 19.14% 16.73% 12.67% 21.47% 14.89% 17.41%
Net interest margin
(taxable-equivalent).... 4.84% 4.70% 4.62% 4.65% 4.66% 4.70% 4.61% 4.48%
Average equity/average
assets.................. 9.76% 9.35% 9.08% 8.88% 8.87% 8.66% 8.39% 8.32%
Tier 1 risk-based capital
ratio................... 14.38% 14.72% 14.70% 14.36% 15.25% 15.37% 14.87% 14.90%
Total risk-based capital
ratio................... 15.65% 15.99% 15.98% 15.64% 16.53% 16.66% 16.17% 16.20%
Leverage ratio........... 9.75% 9.33% 9.04% 8.99% 8.90% 8.69% 8.03% 7.73%
</TABLE>
- --------
(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 share data are based on the weighted average number of common
shares outstanding (net of uncommitted ESOP shares) in the respective
period. Dividends per share are historical amounts.

FOURTH-QUARTER RESULTS

Hibernia reported consolidated net earnings of $34.8 million in the fourth
quarter of 1995, compared to $18.8 million in the fourth quarter of 1994 and
$33.6 million in the third quarter of 1995. Earnings per share of $.30 for the
fourth quarter of 1995 were up $.14 from $.16 per share earned in the fourth
quarter of 1994 and up $.01 from earnings of $.29 per share in the third
quarter of 1995.

Net interest income, on a taxable-equivalent basis, totaled $79.8 million in
the fourth quarter of 1995, compared to $73.0 million in the fourth quarter of
1994 and $77.2 million in the third quarter of 1995. The fourth-quarter 1995
increase in net interest income from the fourth quarter of 1994 was primarily
the result of the growth in loans both in total and as a percentage of average
total earning assets. Average loans increased

S-50
<PAGE>

$770.4 million over the fourth quarter of 1994 to $4.3 billion, or 66.2% of
average earning assets compared to 57.3% of average earning assets in the
fourth quarter of 1994. The net interest spread remained at 3.86% for both
periods as the average yield on earning assets increased 64 basis points to
8.27% and the average rate paid on interest-bearing liabilities increased by
the same amount to 4.41%.

The fourth-quarter 1995 increase in net interest income over the third
quarter of 1995 was primarily due to the increase in higher-yielding loans as
a percentage of earning assets, rising from 62.4% to 66.2%.

The net interest margin increased 18 basis points from the fourth quarter of
1994 to 4.84% for the fourth quarter of 1995 primarily due to the higher value
of noninterest-bearing funds supporting earning assets. The fourth-quarter
1995 net interest margin was up 14 basis points compared to the third quarter
of 1995 due to the change in the mix of earning assets (loans as a percentage
of earning assets up 3.8% from 62.4%). Table 16 illustrates the components of
net interest margin on a quarterly basis for 1995 and 1994.

Average earning assets increased $326.4 million (5.2%) to $6.6 billion in
the fourth quarter of 1995 from $6.2 billion in the fourth quarter of 1994 and
were up $25.3 million compared to the third quarter of 1995. Average loans
increased $770.4 million (21.6%) over the fourth quarter of 1994 and increased
$265.7 million (6.5%) over the third quarter of 1995. Period-end loans grew
$264.3 million, 25.1% on an annualized basis, during the fourth quarter of
1995. Consumer loans were up $166.7 million (33.2% annualized), while
commercial loans were up $97.6 million (17.8% annualized).

Average securities for the fourth quarter of 1995 totaled $2.1 billion, down
$365.9 million (14.6%) from the fourth quarter of 1994 and down $172.2 million
(7.5%) from the third quarter of 1995. The declines came as the result of the
reinvestment of proceeds from payments and maturities into higher-yielding
loans.

TABLE 16 -- NET INTEREST MARGIN (TAXABLE-EQUIVALENT)

<TABLE>
<CAPTION>
1995 1994
------------------------------- -------------------------------
FOURTH THIRD SECOND FIRST FOURTH THIRD SECOND FIRST
QUARTER QUARTER QUARTER QUARTER QUARTER QUARTER QUARTER QUARTER
------- ------- ------- ------- ------- ------- ------- -------
<S> <C> <C> <C> <C> <C> <C> <C> <C>
Yield on earning assets. 8.27% 8.19% 8.14% 7.98% 7.63% 7.43% 7.10% 6.87%
Rate on interest-bearing
liabilities............ 4.41 4.43 4.45 4.21 3.77 3.46 3.16 3.08
----- ----- ----- ----- ----- ----- ----- -----
Net interest spread... 3.86 3.76 3.69 3.77 3.86 3.97 3.94 3.79
Contribution of
noninterest-bearing
funds.................. 0.98 0.94 0.93 0.88 0.80 0.73 0.67 0.69
----- ----- ----- ----- ----- ----- ----- -----
Net interest margin... 4.84% 4.70% 4.62% 4.65% 4.66% 4.70% 4.61% 4.48%
===== ===== ===== ===== ===== ===== ===== =====
Noninterest-bearing
funds/earning assets... 22.18% 21.18% 20.95% 20.92% 21.28% 21.01% 21.16% 22.41%
</TABLE>

Average deposits increased $133.2 million (2.3%) to $5.9 billion in the
fourth quarter of 1995 from $5.8 billion in the fourth quarter of 1994.
Average deposits were unchanged from the third quarter of 1995.

Noninterest income, excluding securities transactions, was $24.6 million, a
$3.0 million (14%) increase from the fourth quarter of 1994, primarily due to
increases in service charges on deposits, income from credit-related insurance
products, gains on the sale of mortgage loans and ATM fees.

Compared to the third quarter of 1995, noninterest income in the fourth
quarter of 1995, excluding securities transactions, was up $.5 million
primarily due to increases in service charges on deposits and income from
credit-related insurance products.

Noninterest expense of $66.1 million in the fourth quarter of 1995 was $5.0
million lower than $71.1 million in the fourth quarter of 1994. Excluding
merger-related costs in both periods, noninterest expense decreased $1.5
million due to decreases in regulatory expense and data processing expense,
partially offset by increases in staff costs and occupancy and equipment
expenses. Compared to the third quarter of 1995, noninterest expense was up
$2.5 million from $63.5 million in the third quarter of 1995. Excluding
merger-related expenses, noninterest expense was up $2.4 million as the third
quarter of 1995, included a refund of second quarter FDIC insurance premiums,
and the fourth quarter of 1995 included increases in staff costs related to
management incentive programs.

S-51
<PAGE>

CONSOLIDATED AVERAGE BALANCES, INTEREST AND RATES

<TABLE>
<CAPTION>
TAXABLE-EQUIVALENT BASIS (1) 1995 1994
- ---------------------------- ----------------------- ------------------------
(AVERAGE BALANCES $ IN MILLIONS, AVERAGE AVERAGE
INTEREST $ IN THOUSANDS) BALANCE INTEREST RATE BALANCE INTEREST RATE
- -------------------------------- -------- -------- ---- -------- -------- -----
<S> <C> <C> <C> <C> <C> <C>
ASSETS
Interest-earning assets:
Loans (2)...................... $4,024.7 $370,938 9.22% $3,374.9 $294,571 8.73%
Securities available for sale
(3)........................... 569.7 37,559 6.59 755.1 43,112 5.71
Securities held to maturity
(4)........................... 1,780.1 113,411 6.37 1,945.8 109,172 5.61
Short-term investments......... 114.7 6,706 5.85 180.9 7,279 4.02
-------- -------- ---- -------- -------- -----
Total interest-earning
assets.................... 6,489.2 $528,614 8.15% 6,256.7 $454,134 7.26%
-------- -------- ---- -------- -------- -----
Reserve for possible loan
losses......................... (151.7) (177.6)
Noninterest-earning assets:
Cash and due from banks........ 155.0 180.6
Items in process of
collection.................... 147.9 117.5
Other assets................... 309.9 314.7
-------- --------
Total noninterest-earning
assets.................... 612.8 612.8
-------- --------
Total assets............... $6,950.3 $6,691.9
======== ========
LIABILITIES AND SHAREHOLDERS'
EQUITY
Interest-bearing liabilities:
Interest-bearing deposits:
NOW/Money market/Savings
accounts.................... $1,986.7 $ 47,939 2.41% $2,150.8 $ 47,065 2.19%
Other consumer time deposits. 1,955.5 109,816 5.62 1,742.3 75,902 4.36
Public fund certificates of
deposit of $100,000 or more. 692.1 40,892 5.91 619.1 25,987 4.20
Certificates of deposit of
$100,000 or more............ 175.2 8,847 5.05 194.3 7,358 3.79
Foreign time deposits........ 35.1 2,018 5.75 17.1 794 4.65
-------- -------- ---- -------- -------- -----
Total interest-bearing
deposits.................. 4,844.6 209,512 4.32 4,723.6 157,106 3.33
-------- -------- ---- -------- -------- -----
Short-term borrowings.......... 251.5 13,309 5.29 165.7 5,812 3.51
Debt........................... 9.8 594 6.05 24.7 2,595 10.49
-------- -------- ---- -------- -------- -----
Total interest-bearing
liabilities............... 5,105.9 $223,415 4.38% 4,914.0 $165,513 3.37%
-------- -------- ---- -------- -------- -----
Noninterest-bearing liabilities:
Demand deposits................ 1,078.2 1,049.6
Other liabilities.............. 121.7 155.4
-------- --------
Total noninterest-bearing
liabilities............... 1,199.9 1,205.0
-------- --------
Total shareholders' equity...... 644.5 572.9
-------- --------
Total liabilities and
shareholders' equity...... $6,950.3 $6,691.9
======== ========
SPREAD AND NET YIELD
Interest rate spread............ 3.77% 3.89%
Cost of funds supporting
interest-earning assets........ 3.45% 2.65%
Net interest income/margin...... $305,199 4.70% $288,621 4.61%
</TABLE>
- --------
(1) Based on the statutory income tax rate of 35% for the years 1993 through
1995, and 34% for the preceeding years.
(2) Excludes unearned income. For purposes of yield computations, nonaccrual
loans are included in loans outstanding.

S-52
<PAGE>

<TABLE>
<CAPTION>
5-YEAR
COMPOUND
1993 1992 1991 GROWTH
-------------------------- ------------------------ ------------------------ RATE FOR
AVERAGE AVERAGE AVERAGE AVERAGE
BALANCE INTEREST RATE BALANCE INTEREST RATE BALANCE INTEREST RATE BALANCES
-------- -------- ----- -------- -------- ----- -------- -------- ----- --------
<S> <C> <C> <C> <C> <C> <C> <C> <C> <C>
$3,095.7 $269,749 8.71% $3,763.4 $339,712 9.03% $5,480.8 $546,285 9.97% (6.0)%
774.2 48,294 6.24 697.6 57,031 8.18 -- -- -- --
1,822.4 105,706 5.80 1,310.8 84,975 6.48 1,991.6 174,962 8.79 (2.2)
350.3 10,739 3.07 511.4 17,492 3.42 261.7 14,653 5.60 (15.2)
-------- -------- ----- -------- -------- ----- -------- -------- ----- -----
6,042.6 $434,488 7.19% 6,283.2 $499,210 7.95% 7,734.1 $735,900 9.52% (3.4)
-------- -------- ----- -------- -------- ----- -------- -------- ----- -----
(205.0) (233.5) (217.3) (6.9)
157.3 149.3 191.4 (4.1)
114.0 138.4 219.4 (7.6)
331.2 499.4 535.7 (10.4)
-------- -------- -------- -----
602.5 787.1 946.5 (8.3)
-------- -------- -------- -----
$6,440.1 $6,836.8 $8,463.3 (3.9)%
======== ======== ======== =====
$2,087.1 $ 45,572 2.18% $2,244.2 $ 65,883 2.94% $2,579.5 $131,637 5.10% (5.1)%
1,715.5 69,305 4.04 1,951.7 92,443 4.74 2,470.5 168,423 6.82 (4.6)
612.4 20,160 3.29 637.6 25,472 4.00 810.3 50,539 6.24 (3.1)
203.1 6,790 3.34 219.7 10,997 5.01 562.3 39,419 7.01 (20.8)
5.0 149 2.98 2.2 71 3.23 60.0 3,854 6.42 (10.2)
-------- -------- ----- -------- -------- ----- -------- -------- ----- -----
4,623.1 141,976 3.07 5,055.4 194,866 3.85 6,482.6 393,872 6.08 (5.7)
-------- -------- ----- -------- -------- ----- -------- -------- ----- -----
139.1 4,043 2.91 207.6 6,912 3.33 289.5 16,909 5.84 (2.8)
36.7 4,407 12.00 126.2 14,772 11.67 146.1 15,697 10.74 (41.7)
-------- -------- ----- -------- -------- ----- -------- -------- ----- -----
4,798.9 $150,426 3.13% 5,389.2 $216,500 4.02% 6,918.2 $426,478 6.16% (5.9)
-------- -------- ----- -------- -------- ----- -------- -------- ----- -----
969.4 933.3 1,069.8 0.2
163.5 203.8 116.9 0.8
-------- -------- -------- -----
1,132.9 1,137.1 1,186.7 0.2
-------- -------- -------- -----
508.3 310.5 358.4 12.5
-------- -------- -------- -----
$6,440.1 $6,836.8 $8,463.3 (3.9)%
======== ======== ======== =====
4.06% 3.93% 3.36%
2.49% 3.45% 5.52%
$284,062 4.70% $282,710 4.50% $309,422 4.00%
</TABLE>
- --------
(3) Yield computations are based on book values of securities available for
sale.
(4) Prior to 1992, the Company did not classify securities as available for
sale or held to maturity. Accordingly, all securities are presented as held
to maturity.

S-53
<PAGE>

CONSOLIDATED RATIO OF EARNINGS TO FIXED CHARGES

The following tables set forth the historical and pro forma consolidated
ratio of earnings to fixed charges for the six-month periods ended June 30,
1996 and 1995 and for each of the five years in the period ended December 31,
1995. The pro forma consolidated ratio of earnings to fixed charges reflects
the consummated acquisition of Calcasieu, the pending acquisition of St.
Bernard and the pending merger with Texarkana Bancshares. For purposes of
computing the ratios, earnings represent consolidated income before income
taxes and extraordinary item plus fixed charges. Fixed charges include
interest expense (excluding or including interest on deposits, as the case may
be) and the proportion deemed representative of the interest factor of rental
expense, net of income from subleases.

COMPUTATION OF CONSOLIDATED RATIO OF EARNINGS TO FIXED CHARGES

(UNAUDITED)

<TABLE>
<CAPTION>
SIX MONTHS ENDED
JUNE 30, YEAR ENDED DECEMBER 31,
------------------ -------------------------------------------------
1996 1995 1995 1994 1993 1992 1991
-------- -------- -------- -------- -------- -------- ---------
<S> <C> <C> <C> <C> <C> <C> <C>
Computation of Earnings:
Net income (loss)...... $ 51,315 $ 56,689 $125,699 $ 96,906 $ 71,617 $(23,459) $(156,294)
Add: Provision for
income taxes.......... 27,795 4,811 10,112 6,275 11,887 7,475 3,987
Less: Cumulative effect
of accounting
changes.......... -- -- -- -- 3,091 -- (21,643)
Utilization of net
operating loss
carryforwards....... -- -- -- -- -- 6,181 427
Extraordinary loss on
debt restructuring,
net of tax.......... -- -- -- -- -- (39,179) --
-------- -------- -------- -------- -------- -------- ---------
Income (loss) before
income taxes,
extraordinary items,
and cumulative effect
of accounting
changes.............. 79,110 61,500 135,811 103,181 80,413 17,014 (131,091)
Fixed charges,
excluding interest on
deposits.............. 8,667 7,741 17,034 10,985 10,852 25,199 39,203
-------- -------- -------- -------- -------- -------- ---------
Total earnings for
computation,
excluding interest on
deposits............. 87,777 69,241 152,845 114,166 91,265 42,213 (91,888)
Interest on deposits... 109,418 105,838 215,134 161,516 145,937 199,481 399,856
-------- -------- -------- -------- -------- -------- ---------
Total earnings for
computation,
including interest on
deposits............. $197,195 $175,079 $367,979 $275,682 $237,202 $241,694 $ 307,968
======== ======== ======== ======== ======== ======== =========
Computation of Fixed
Charges:
Rental expense......... $ 5,309 $ 5,192 $ 10,449 $ 10,454 $ 10,782 $ 12,517 $ 15,153
Portion of rental
expense deemed
representative of
interest.............. $ 1,619 $ 1,587 $ 3,231 $ 2,565 $ 2,383 $ 3,559 $ 6,592
Interest on short-term
borrowed funds........ 6,832 5,826 13,208 5,823 4,060 6,915 16,909
Interest on debt....... 216 328 595 2,597 4,409 14,725 15,702
-------- -------- -------- -------- -------- -------- ---------
Total fixed charges,
excluding interest on
deposits............. 8,667 7,741 17,034 10,985 10,852 25,199 39,203
Interest on deposits... 109,418 105,838 215,134 161,516 145,937 199,481 399,856
-------- -------- -------- -------- -------- -------- ---------
Total fixed charges,
including interest on
deposits............. $118,085 $113,579 $232,168 $172,501 $156,789 $224,680 $ 439,059
======== ======== ======== ======== ======== ======== =========
Ratio of Earnings to
Fixed Charges:
Excluding deposit
interest.............. 10.13x 8.94x 8.97x 10.39x 8.41x 1.68x **
Including deposit
interest.............. 1.67x 1.54x 1.58x 1.60x 1.51x 1.08x **
</TABLE>
- -------
**In 1991 earnings are inadequate to cover fixed charges by $131,091.

S-54
<PAGE>

PRO FORMA COMPUTATION OF CONSOLIDATED RATIO OF EARNINGS TO FIXED CHARGES

(UNAUDITED)

<TABLE>
<CAPTION>
SIX MONTHS ENDED
JUNE 30, YEAR ENDED DECEMBER 31,
------------------ -------------------------------------------------
1996 1995 1995 1994 1993 1992 1991
-------- -------- -------- -------- -------- -------- ---------
<S> <C> <C> <C> <C> <C> <C> <C>
Computation of Earnings:
Net income (loss)...... $ 54,086 $ 58,821 $128,172 $101,460 $ 76,169 $(20,248) $(154,487)
Add: Provision for
income taxes.......... 29,277 5,940 11,011 7,785 13,292 8,765 4,622
Less: Cumulative effect
of accounting changes. -- -- -- -- 3,461 -- (21,643)
Utilization of net
operating loss
carryforwards....... -- -- -- -- -- 6,181 427
Extraordinary loss on
debt restructuring,
net of tax.......... -- -- -- -- -- (39,179) --
-------- -------- -------- -------- -------- -------- ---------
Income (loss) before
income taxes,
extraordinary items,
and cumulative effect
of accounting
changes.............. 83,363 64,761 139,183 109,245 86,000 21,515 (128,649)
Fixed charges,
excluding interest on
deposits.............. 10,399 11,415 22,683 11,777 11,232 25,758 40,409
-------- -------- -------- -------- -------- -------- ---------
Total earnings for
computation,
excluding interest on
deposits............. 93,762 76,176 161,866 121,022 97,232 47,273 (88,240)
Interest on deposits... 128,756 121,997 249,206 169,634 153,309 208,277 412,449
-------- -------- -------- -------- -------- -------- ---------
Total earnings for
computation,
including interest on
deposits............. $222,518 $198,173 $411,072 $290,656 $250,541 $255,550 $ 324,209
======== ======== ======== ======== ======== ======== =========
Computation of Fixed
Charges:
Rental expense......... $ 5,480 $ 5,342 $ 10,745 $ 10,522 $ 10,849 $ 12,573 $ 15,196
Portion of rental
expense deemed
representative of
interest.............. $ 1,671 $ 1,633 $ 3,323 $ 2,582 $ 2,398 $ 3,575 $ 6,610
Interest on short-term
borrowed funds........ 7,902 7,456 16,067 6,225 4,411 7,458 18,052
Interest on debt....... 826 2,326 3,293 2,970 4,423 14,725 15,747
-------- -------- -------- -------- -------- -------- ---------
Total fixed charges,
excluding interest on
deposits............. 10,399 11,415 22,683 11,777 11,232 25,758 40,409
Interest on deposits... 128,756 121,997 249,206 169,634 153,309 208,277 412,449
-------- -------- -------- -------- -------- -------- ---------
Total fixed charges,
including interest on
deposits............. $139,155 $133,412 $271,889 $181,411 $164,541 $234,035 $ 452,858
======== ======== ======== ======== ======== ======== =========
Ratio of Earnings to
Fixed Charges:
Excluding deposit
interest............. 9.02x 6.67x 7.14x 10.28x 8.66x 1.84x **
Including deposit
interest............. 1.60x 1.49x 1.51x 1.60x 1.52x 1.09x **
</TABLE>
- -------
** In 1991 pro forma earnings are inadequate to cover fixed charges by
$128,649.

S-55
<PAGE>

OUTSTANDING CAPITAL STOCK

Hibernia's total authorized capital stock currently consists of (i)
200,000,000 shares of Class A common stock, no par value (the "Common Stock"),
and (ii) 100,000,000 shares of preferred stock, no par value (the "Preferred
Stock"). As of June 30, 1996, there were 122,109,986 shares of Common Stock
outstanding and no shares of Preferred Stock outstanding.

DESCRIPTION OF SERIES A PREFERRED STOCK

The following description of the particular terms of the shares of Series A
Preferred Stock supplements, and to the extent inconsistent therewith
replaces, the description of the general terms and provisions of Preferred
Stock set forth in the accompanying Prospectus, to which description reference
is hereby made. The summary contained herein of the terms of the Series A
Preferred Stock does not purport to be complete and is subject to and
qualified in its entirety by reference to all of the provisions of the
Articles of Amendment to Hibernia's Articles of Incorporation setting forth
the terms of the Series A Preferred Stock, copies of which are on file with
the Securities and Exchange Commission. Certain terms not defined in this
description are defined in the Prospectus.

GENERAL

The Series A Preferred Stock is a single series consisting of 2,000,000
shares. The holders of Series A Preferred Stock will have no preemptive
rights. The Series A Preferred Stock, upon issuance against full payment of
the purchase price therefor, will be fully paid and nonassessable.

The Series A Preferred Stock, together with each other series of Preferred
Stock, will rank prior to the Common Stock of Hibernia as to the payment of
dividends and distribution of assets upon dissolution, liquidation or winding
up of Hibernia.

The Series A Preferred Stock will not be convertible into shares of Common
Stock of Hibernia and will not be subject to any sinking fund or other
obligation of Hibernia to repurchase the Series A Preferred Stock.

DIVIDENDS

General. Holders of shares of Series A Preferred Stock will be entitled to
receive cash dividends, as, if and when declared by the Board of Directors of
Hibernia or a Preferred Stock Designation Committee established by the Board
of Directors (in either event, the "Hibernia Board") out of assets of Hibernia
legally available for payment.

The initial dividend for the dividend period commencing on September 30,
1996 to (but not including) January 1, 1997 will be $.87 per share and will be
payable (if declared) on January 1, 1997. Thereafter, dividends on the Series
A Preferred Stock will be payable quarterly, as, if and when declared by the
Hibernia Board on April 1, July 1, October 1, and January 1 of each year (each
a "Dividend Payment Date") at the annual rate of 6.90%, or $3.45 per share,
through October 1, 2001. After October 1, 2001, dividends on the Series A
Preferred Stock will be payable quarterly, as, if and when declared by the
Hibernia Board on each Dividend Payment Date at the Applicable Rate from time
to time in effect. The Applicable Rate per annum for any dividend period
beginning on or after October 1, 2001 will be equal to .95% plus the highest
of the Treasury Bill Rate, the Ten-Year Constant Maturity Rate and the Thirty-
Year Constant Maturity Rate (each as defined below under "Adjustable Rate
Dividends"), as determined in advance of such dividend period. The Applicable
Rate per annum for any dividend period beginning on or after October 1, 2001,
will not be less than 7.40% nor greater than 13.40% (without taking into
account any adjustments as described below under "Changes in the Dividends
Received Percentage").

If a Dividend Payment Date is not a business day, dividends (if declared) on
the Series A Preferred Stock will be paid on the immediately succeeding
business day, without interest. A dividend period with respect to a Dividend
Payment Date is the period commencing on the immediately preceding Dividend
Payment Date and ending on the day immediately prior to the next succeeding
Dividend Payment Date. Each such dividend will be payable to holders of record
as they appear on the stock books of Hibernia on such record dates, not more
than thirty nor less than fifteen days preceding the payment dates thereof, as
will be fixed by the Hibernia Board.

S-56
<PAGE>

Dividends on the Series A Preferred Stock will not be cumulative and no
rights will accrue to the holders of the Series A Preferred Stock by reason of
the fact that Hibernia may fail to declare or pay dividends on the Series A
Preferred Stock in any amount in any quarter or year, whether or not the
earnings of Hibernia in any quarter or year were sufficient to pay such
dividends in whole or in part.

Adjustable Rate Dividends. Except as provided below in this paragraph, the
"Applicable Rate" per annum for any dividend period beginning on or after
October 1, 2001 will be equal to .95% plus the Effective Rate (as defined
below), but not less than 7.40% nor greater than 13.40% (without taking into
account any adjustments as described below under "Changes in the Dividends
Received Percentage"). The "Effective Rate" for any dividend period beginning
on or after October 1, 2001 will be equal to the highest of the Treasury Bill
Rate, the Ten-Year Constant Maturity Rate and the Thirty-Year Constant
Maturity Rate (each as defined below) for such dividend period. If Hibernia
determines in good faith that for any reason: (i) any one of the Treasury Bill
Rate, the Ten-Year Constant Maturity Rate or the Thirty-Year Constant Maturity
Rate cannot be determined for any dividend period beginning on or after
October 1, 2001, then the Effective Rate for such dividend period will be
equal to the higher of whichever two of such rates can be so determined; (ii)
only one of the Treasury Bill Rate, the Ten-Year Constant Maturity Rate or the
Thirty-Year Constant Maturity Rate can be determined for any dividend period
beginning on or after October 1, 2001, then the Effective Rate for such
dividend period will be equal to whichever such rate can be so determined; or
(iii) none of the Treasury Bill Rate, the Ten-Year Constant Maturity Rate or
the Thirty-Year Constant Maturity Rate can be determined for any dividend
period beginning on or after October 1, 2001, then the Effective Rate for the
preceding dividend period will be continued for such dividend period.

The "Treasury Bill Rate" for each dividend period will be the arithmetic
average of the two most recent weekly per annum market discount rates (or the
one weekly per annum market discount rate, if only one such rate is published
during the relevant Calendar Period (as defined below)) for three-month U.S.
Treasury bills, as published weekly by the Federal Reserve Board (as defined
below) during the Calendar Period immediately preceding the last ten calendar
days preceding the dividend period for which the dividend rate on the Series A
Preferred Stock is being determined.

The "Ten-Year Constant Maturity Rate" for each dividend period will be the
arithmetic average of the two most recent weekly per annum Ten-Year Average
Yields (as defined below) (or the one weekly per annum Ten-Year Average Yield,
if only one such yield is published during the relevant Calendar Period), as
published weekly by the Federal Reserve Board during the Calendar Period
immediately preceding the last ten calendar days preceding the dividend period
for which the dividend rate on the Series A Preferred Stock is being
determined.

The "Thirty-Year Constant Maturity Rate" for each dividend period will be
the arithmetic average of the two most recent weekly per annum Thirty-Year
Average Yields (as defined below) (or the one weekly per annum Thirty-Year
Average Yield, if only one such yield is published during the relevant
Calendar Period), as published weekly by the Federal Reserve Board during the
Calendar Period immediately preceding the last ten calendar days preceding the
dividend period for which the dividend rate on the Series A Preferred Stock is
being determined.

If the Federal Reserve Board does not publish a weekly per annum market
discount rate, Ten-Year Average Yield or Thirty-Year Average Yield during any
applicable Calendar Period, then the Treasury Bill Rate, Ten-Year Constant
Maturity Rate or Thirty-Year Constant Maturity Rate, as the case may be, for
such dividend period will be the arithmetic average of the two most recent
weekly per annum market discount rates for three-month U.S. Treasury bills,
Ten-Year Average Yields or Thirty-Year Average Yields, as the case may be (or
the one weekly per annum rate, if only one such rate is published during the
relevant Calendar Period), as published weekly during such Calendar Period by
any Federal Reserve Bank or by any U.S. Government department or agency
selected by Hibernia. If any such rate is not published by the Federal Reserve
Board or by any Federal Reserve Bank or by any U.S. Government department or
agency during such Calendar Period, then the Treasury Bill Rate, Ten-Year
Constant Maturity Rate or Thirty-Year Constant Maturity Rate for such dividend
period will be the arithmetic average of the two most recent weekly per annum
(i) in the case of the Treasury Bill Rate, the

S-57
<PAGE>

market discount rates (or the one weekly per annum market discount rate, if
only one such rate is published during the relevant Calendar Period) for all
of the U.S. Treasury bills then having remaining maturities of not less than
80 nor more than 100 days, and (ii) in the case of the Ten-Year Constant
Maturity Rate, the average yields to maturity (or the one weekly per annum
average yield to maturity, if only one such yield is published during the
relevant Calendar Period) for all of the actively traded marketable U.S.
Treasury fixed interest rate securities (other than Special Securities (as
defined below)) then having remaining maturities of not less than eight nor
more than twelve years, and (iii) in the case of the Thirty-Year Constant
Maturity Rate, the average yields to maturity (or the one weekly per annum
average yield to maturity, if only one such yield is published during the
relevant Calendar Period) for all of the actively traded marketable U.S.
Treasury fixed interest rate securities (other than Special Securities) then
having remaining maturities of not less than twenty-eight nor more than thirty
years, in each case as published during such Calendar Period by the Federal
Reserve Board or, if the Federal Reserve Board does not publish such rates, by
any Federal Reserve Bank or by any U.S. Government department or agency
selected by Hibernia. If Hibernia determines in good faith that for any reason
no such U.S. Treasury bill rates are published as provided above during such
Calendar Period, then the Treasury Bill Rate for such dividend period will be
the arithmetic average of the per annum market discount rates based upon the
closing bids during such Calendar Period for each of the issues of marketable
non-interest-bearing U.S. Treasury securities with a remaining maturity of not
less than 80 nor more than 100 days from the date of each such quotation, as
chosen and quoted daily for each business day in New York City (or less
frequently if daily quotations are not generally available) to Hibernia by at
least three recognized dealers in U.S. Government securities selected by
Hibernia. If Hibernia determines in good faith that for any reason Hibernia
cannot determine the Treasury Bill Rate for any dividend period, the Treasury
Bill Rate for such dividend period will be the arithmetic average of the per
annum market discount rates based upon the closing bids during such Calendar
Period for each of the issues of marketable interest-bearing U.S. Treasury
securities with a remaining maturity of not less than 80 or more than 100
days, as chosen and quoted daily for each business day in New York City (or
less frequently if daily quotations are not generally available) to Hibernia
by at least three recognized dealers in U.S. Government securities selected by
Hibernia. If Hibernia determines in good faith that for any reason Hibernia
cannot determine the Ten-Year Constant Maturity Rate or Thirty-Year Constant
Maturity Rate for any dividend period as provided above, then the applicable
rate for such dividend period will be the arithmetic average of the per annum
average yields to maturity based upon the closing bids during such Calendar
Period for each of the issues of actively traded marketable U.S. Treasury
fixed interest rate securities (other than Special Securities) with a final
maturity date (i) in the case of the Ten-Year Constant Maturity Rate, not less
than eight nor more than twelve years from the date of each such quotation,
and (ii) in the case of the Thirty- Year Constant Maturity Rate, not less than
twenty-eight nor more than thirty years from the date of each such quotation,
in each case as chosen and quoted daily for each business day in New York City
(or less frequently if daily quotations are not generally available) to
Hibernia by at least three recognized dealers in the United States.

The Treasury Bill Rate, the Ten-Year Constant Maturity Rate and the Thirty-
Year Constant Maturity Rate will each be rounded to the nearest five
hundredths of a percent, with .025% being rounded upward.

The Applicable Rate with respect to each dividend period beginning on or
after October 1, 2001 will be calculated as promptly as practicable by
Hibernia according to the appropriate method described above. Hibernia will
cause notice of each Applicable Rate to be enclosed with the dividend payment
checks next mailed to the holders of Series A Preferred Stock.

As used above, the term "Calendar Period" means a period of fourteen
calendar days; the term "Federal Reserve Board" means the Board of Governors
of the Federal Reserve System; the term "Special Securities" means securities
which can, at the option of the holder, be surrendered at face value in
payment of any Federal estate tax or which provide tax benefits to the holder
and are priced to reflect such tax benefits or which were originally issued at
a deep or substantial discount; the term "Ten-Year Average Yield" means the
average yield to maturity for actively traded marketable U.S. Treasury fixed
interest rate securities (adjusted to constant maturities of ten years); and
the term "Thirty-Year Average Yield" means the average yield to maturity for
actively traded marketable U.S. Treasury fixed interest rate securities
(adjusted to constant maturities of thirty years).

S-58
<PAGE>

Changes in the Dividends Received Percentage. If one or more amendments to
the Internal Revenue Code of 1986, as amended (the "Code"), are enacted that
change the percentage of the dividends received deduction (currently 70%) as
specified in Section 243(a)(1) of the Code or any successor provision (the
"Dividends Received Percentage" or "DRP") or that eliminate the dividends
received deduction, the amount of each dividend payable per share of the
Series A Preferred Stock for dividend payments made on or after the date of
enactment of such change will be adjusted by multiplying the amount of the
dividend payable determined as described above under "General" (before
adjustment) by a factor, which will be the number determined in accordance
with the following formula (the "DRD Formula"), and rounding to the nearest
cent.

1 - [.35 (1 - .70)]
--------------
1 - [.35 (1 - DRP)]

For purposes of the DRD Formula, "DRP" means the Dividend Received
Percentage applicable to the dividend in question.

No amendment to the Code, other than a change in the percentage of the
dividends received deduction set forth in Section 243(a)(1) of the Code or any
successor provision or the elimination of the dividends received deduction
(which would make the DRP equal to zero), will give rise to an adjustment.
Notwithstanding the foregoing provisions, if, with respect to any such
amendment, Hibernia will receive either an unqualified opinion of nationally
recognized independent tax counsel selected by Hibernia and approved by
Skadden, Arps, Slate, Meagher & Flom (which approval will not be unreasonably
withheld) or a private letter ruling or similar form of authorization from the
Internal Revenue Service to the effect that such an amendment would not apply
to dividends payable on the Series A Preferred Stock, then any such amendment
will not result in the adjustment provided for pursuant to the DRD Formula.
The opinion referenced in the previous sentence will be based upon a specific
exception in the legislation amending the DRP or upon a published
pronouncement of the Internal Revenue Service addressing such legislation or
section of the Code. Unless the context otherwise requires, references to
dividends in this Prospectus Supplement will mean dividends as adjusted by the
DRD Formula. Hibernia's calculation of the dividends payable as so adjusted
and as tested by the independent certified public accountants then regularly
engaged by Hibernia, will be final and not subject to review.

If any amendment to the Code which reduces the Dividends Received Percentage
is enacted after a dividend payable on a Dividend Payment Date has been
declared, the amount of dividend payable on such Dividend Payment Date will
not be increased; but instead, an amount, equal to the difference between the
amount of the dividend as declared and the amount that would have been
declared had the DRD Formula been applied, will be payable to holders of
record on the next succeeding Dividend Payment Date in addition to any other
amounts payable on such date.

In addition, if prior to January 2, 1997, an amendment to the Code is
enacted that reduces the Dividends Received Percentage and such reduction
retroactively applies to a Dividend Payment Date as to which Hibernia
previously paid dividends on the Series A Preferred Stock (each an "Affected
Dividend Payment Date"), Hibernia will pay (if declared) additional dividends
(the "Additional Dividends") on the next succeeding Dividend Payment Date (or
if such amendment is enacted after the dividend payable on such Dividend
Payment Date has been declared, on the second succeeding Dividend Payment Date
following the date of enactment) to holders of record on such succeeding
Dividend Payment Date in an amount equal to the excess of (i) the product of
the dividends paid by Hibernia on each Affected Dividend Payment Date and the
DRD Formula (where the DRP used in the DRD Formula would be equal to the
Dividends Received Percentage applied to each Affected Dividend Payment Date)
over (ii) the dividends paid by Hibernia on each Affected Dividend Payment
Date.

Additional Dividends will not be paid in respect of the enactment of any
amendment to the Code on or after January 2, 1997 which retroactively reduces
the Dividends Received Percentage, or if prior to January 2, 1997, such
amendment would not result in an adjustment due to Hibernia having received
either an opinion of counsel or tax ruling referred to in the third preceding
paragraph. Hibernia will only make one payment of Additional Dividends.

S-59
<PAGE>

If the amount of dividend payable per share of the Series A Preferred Stock
will be adjusted pursuant to the DRD Formula and/or Additional Dividends are
to be paid, Hibernia will cause notice of each such adjustment and, if
applicable, any Additional Dividends, to be sent to the holders of the Series
A Preferred Stock.

If the Dividends Received Percentage is reduced to 40% or less or
eliminated, Hibernia may at its option, redeem the Series A Preferred Stock as
a whole but not in part as described below. See "Redemption." See also "Recent
Tax Proposals" for a discussion of certain proposals to reduce the Dividends
Received Percentage.

LIQUIDATION RIGHTS

In the event of any voluntary or involuntary liquidation, dissolution or
winding up of Hibernia, the holders of shares of Series A Preferred Stock are
entitled to receive out of assets of Hibernia available for distribution to
shareholders, before any distribution of assets is made to holders of Common
Stock or of any other shares of stock of Hibernia ranking as to such a
distribution junior to the shares of Series A Preferred Stock, a liquidating
distribution, in the amount of $50 per share plus accrued and unpaid dividends
(whether or not declared) from the immediately preceding Dividend Payment Date
(but without any cumulation for unpaid dividends for prior dividend periods on
the Series A Preferred Stock). After payment of such a liquidating
distribution, the holders of shares of Series A Preferred Stock will not be
entitled to any further participation in any distribution of assets by
Hibernia.

VOTING RIGHTS

Holders of the Series A Preferred Stock will have no voting rights except as
set forth below or as otherwise from time to time required by law.

Whenever dividends on the Series A Preferred Stock shall be unpaid for such
number of dividend periods, whether or not consecutive, which shall in the
aggregate contain not less than 540 days, the holders of outstanding shares of
the Series A Preferred Stock (voting separately as a class with holders of
shares of any one or more other series of preferred stock ranking on a parity
with the Series A Preferred Stock either as to dividends (whether or not such
other series of preferred stock is cumulative or noncumulative as to payment
of dividends) or on the distribution of assets upon liquidation, dissolution
or winding up and upon which like voting rights have been conferred and are
exercisable) will be entitled to vote for the election of two additional
directors on the terms set forth below. Such voting rights will continue until
all dividends on shares of Series A Preferred Stock shall have been paid in
full for at least one year. Upon payment in full of such dividends, such
voting rights shall terminate except as expressly provided by law, subject to
re-vesting in the event of each and every subsequent default in the payment of
dividends as aforesaid. Holders of all series of preferred stock which are
granted such voting rights (which rank on a parity with the Series A Preferred
Stock) will vote as a class, and each holder of shares of the Series A
Preferred Stock will have one vote for each share of stock held and each other
series will have such number of votes, if any, for each share of stock held as
may be granted to them. If the holders of shares of the Series A Preferred
Stock are entitled to vote as described in this paragraph, the Hibernia Board
will automatically be increased by two directors, and the holders of the
Series A Preferred Stock (together with the holders of any other shares of
preferred stock granted voting rights) will have the exclusive right, as
outlined above, to elect two directors at the next annual meeting of
shareholders.

Upon termination of the right of the holders of the Series A Preferred Stock
to vote for directors as discussed in the prior paragraph, the term of office
of all directors then in office elected by such holders will terminate
immediately. Whenever the term of office of the directors elected by such
holders ends and the related special voting rights expire, the number of
directors will automatically be decreased to such number as would otherwise
prevail.

So long as any shares of Series A Preferred Stock remain outstanding,
Hibernia will not, without the affirmative vote or consent of the holders of
at least two-thirds of the shares of the Series A Preferred Stock outstanding
at the time (voting as a class with all other series of preferred stock
ranking on a parity with the

S-60
<PAGE>

Series A Preferred Stock either as to dividends (whether or not such other
series of preferred stock is cumulative or noncumulative as to payment of
dividends) or the distribution of assets upon liquidation, dissolution or
winding up and upon which like voting rights have been conferred and are then
exercisable), given in person or by proxy, either in writing or at a special
or annual meeting called for that purpose, (i) authorize, create or issue, or
increase the authorized or issued amount, of any class or series of stock
ranking prior to the Series A Preferred Stock with respect to payment of
dividends or the distribution of assets upon liquidation, dissolution or
winding up; or (ii) amend, alter or repeal, whether by merger, consolidation
or otherwise, the provisions of Hibernia's Articles of Incorporation, as
amended, and the powers, preferences and privileges, relative, participating,
optional or other special rights and qualifications, limitations and
restrictions thereof, which would materially and adversely affect any right,
preference, privilege or voting power of the Series A Preferred Stock or the
holders thereof; provided, however, that any increase in the amount of the
authorized preferred stock or the creation and issuance of other series of
preferred stock, or any increase in the amount of authorized shares of Series
A Preferred Stock, in each case ranking on a parity with or junior to the
Series A Preferred Stock with respect to the payment of dividends (whether or
not such other series of preferred stock is cumulative or noncumulative as to
payment of dividends) and the distribution of assets upon liquidation,
dissolution or winding up will not be deemed to materially and adversely
affect such rights preferences, privileges or voting powers.

The foregoing voting provisions will not apply if, at or prior to the time
when the act with respect to which such vote would otherwise be required shall
be effected, all outstanding shares of Series A Preferred Stock have been
redeemed or sufficient funds have been deposited in trust to effect such a
redemption which redemption is scheduled to be consummated within three months
after the time that such voting rights would otherwise be exercisable.

REDEMPTION

The Series A Preferred Stock is not subject to any mandatory redemption,
sinking fund or other similar provisions. Prior to October 1, 2001, the Series
A Preferred Stock is not redeemable, except under certain limited
circumstances as described below. On or after October 1, 2001, shares of
Series A Preferred Stock will be redeemable, in whole or in part, at the
option of Hibernia (with prior Federal Reserve Board approval, to the extent
then required by applicable law), at any time and from time to time upon not
less than thirty nor more than sixty days notice, at $50 per share of Series A
Preferred Stock, plus accrued and unpaid dividends (whether or not declared)
from the immediately preceding Dividend Payment Date (but without any
cumulation for unpaid dividends for prior dividend periods on the Series A
Preferred Stock) to the date fixed for redemption, including any changes in
dividends payable due to changes in the Dividends Received Percentage and
Additional Dividends, if any.

Notwithstanding the preceding paragraph, if the Dividends Received
Percentage is equal to or less than 40% and, as a result, the amount of
dividends on the Series A Preferred Stock payable on any Dividend Payment Date
will be or is adjusted upwards as described above under "Changes in the
Dividends Received Percentage," Hibernia may, at its option (with prior
Federal Reserve Board approval to the extent then required by applicable law)
redeem all, but not less than all, of the outstanding shares of the Series A
Preferred Stock, provided, that within sixty days of the date on which an
amendment to the Code is enacted which reduces the Dividends Received
Percentage to 40% or less, Hibernia sends notice to holders of the Series A
Preferred Stock of such redemption. Any redemption of the Series A Preferred
Stock pursuant to this paragraph will take place on the date specified in the
notice, which will not be less than 30 nor more than 60 days from the date
such notice is sent to holders of the Series A Preferred Stock. Any redemption
of the Series A Preferred Stock in accordance with this paragraph will be on
notice as aforesaid at the applicable redemption price set forth in the
following table, in each case plus accrued and unpaid dividends (whether or
not declared) thereon from the immediately preceding Dividend Payment Date
(but without any cumulation for unpaid dividends for prior dividend periods on
the Series A Preferred Stock) to the date fixed for redemption, including any
changes in dividends payable due to changes in the Dividends Received
Percentage and Additional Dividends, if any.

S-61
<PAGE>

<TABLE>
<CAPTION>
REDEMPTION
PRICE PER
REDEMPTION PERIOD SHARE
----------------- ----------
<S> <C>
September 30, 1996 to September 30, 1997...... $52.50
October 1, 1997 to September 30, 1998......... 52.00
October 1, 1998 to September 30, 1999......... 51.50
October 1, 1999 to September 30, 2000......... 51.00
October 1, 2000 to September 30, 2001......... 50.50
On or after October 1, 2001................... 50.00
</TABLE>

In addition, Hibernia may, at its option (with prior Federal Reserve Board
approval to the extent then required by applicable law) redeem all, but not
less than all, of the outstanding shares of Series A Preferred Stock if the
holders of such shares would be entitled to vote upon or consent to a merger
or consolidation of Hibernia and all of the following conditions have been
satisfied: (i) Hibernia shall have requested the vote or consent of holders of
such shares prior to the consummation of the merger or consolidation, stating
in such request that, failing the requisite favorable vote or consent,
Hibernia will have the option to redeem all of such shares, and (ii) Hibernia
shall have not received the favorable vote or consent requisite for the
consummation of the merger or consolidation within 60 days after making the
request, and (iii) such transaction shall be consummated on the date fixed for
such redemption, which date shall be no more than one year after the request
is made. Any such redemption shall be pursuant to a notice as described in
Hibernia's Articles of Incorporation and shall be at the redemption price of
$50 per share of Series A Preferred Stock, plus accrued and unpaid dividends
(whether or not declared) thereon from the immediately preceding Dividend
Payment Date (but without any cumulation for unpaid dividends for prior
dividend periods on the Series A Preferred Stock) to the date fixed for
redemption, including any changes in dividends payable due to changes in the
Dividends Received Percentage and Additional Dividends, if any.

Under current law, Hibernia would need the approval of the Federal Reserve
Board prior to exercising its right to redeem shares of Series A Preferred
Stock.

Holders of Series A Preferred Stock will have no right to require redemption
of the Series A Preferred Stock.

RECENT TAX PROPOSALS

The Clinton Administration has proposed certain tax law changes that could,
if enacted, affect holders of the Series A Preferred Stock who may be entitled
to a dividends received deduction with respect to dividends on Series A
Preferred Stock under current law. These proposals include: (i) elimination of
the dividends received deduction available to certain corporate shareholders
with respect to certain preferred stock, (ii) reduction of the Dividends
Received Percentage that is currently available to corporate shareholders for
certain dividends received from another corporation in which the shareholder
owns less than 20% (by vote and value) from 70% to 50%, and (iii) amendment of
the holding period requirements for the dividends received deduction. Under
current law, the dividends received deduction is allowed to a corporate
shareholder only if the shareholder satisfies a 46-day holding period for the
dividend-paying stock (or a 91-day period for certain dividends on preferred
stock). The proposal relating to holding periods provides that a taxpayer
would not be entitled to a dividends received deduction with respect to a
particular dividend if the taxpayer's 46-day or 91-day holding period for the
dividend-paying stock is not satisfied over a period immediately before or
immediately after the taxpayer becomes entitled to receive the particular
dividend.

To the extent the dividends received deduction is eliminated or the
Dividends Received Percentage is changed, the amount of dividends payable per
share will be adjusted and Hibernia may have a right to redeem the Series A
Preferred Stock. (See "Description of Series A Preferred Stock - Dividends -
Changes in the Dividends Received Percentage" and "Description of Series A
Preferred Stock - Redemption" above.)

None of these proposed changes has been introduced in Congress, and due to
the inherently uncertain nature of proposed changes to the tax law, there can
be no assurance as to whether, or in what form, the proposals may be enacted
into law, or as to the effective dates of any such changes to the law.

S-62
<PAGE>

THE UNDERWRITERS

Under the terms and subject to the conditions contained in an Underwriting
Agreement dated the date hereof, the "Underwriters" named below have severally
agreed to purchase, and Hibernia has agreed to sell to them, severally, the
respective number of shares of Series A Peferred Stock set forth opposite the
names of such Underwriters below.

<TABLE>
<CAPTION>
NUMBER OF
NAME SHARES
---- ---------
<S> <C>
Morgan Stanley & Co. Incorporated............................... 1,650,000
Bear, Stearns & Co. Inc. ....................................... 100,000
Lehman Brothers Inc. ........................................... 150,000
Salomon Brothers Inc ........................................... 100,000
---------
Total......................................................... 2,000,000
=========
</TABLE>

The Underwriting Agreement provides that the obligations of the several
Underwriters to pay for and accept delivery of the shares of Series A
Preferred Stock are subject to, among other things, the approval of certain
legal matters by counsel and to certain other conditions.

The Underwriters initially propose to offer part of the shares of Series A
Preferred Stock directly to the public at the public offering price set forth
on the cover page of this Prospectus Supplement, and part to certain dealers
at a price which represents a concession not in excess of $.40 per share of
Series A Preferred Stock under the public offering price. The Underwriters may
allow, and such dealers may reallow, a discount not in excess of $.20 per
share to certain other dealers. After the initial offering, the public
offering price and other selling terms may from time to time be varied by the
Underwriters.

The shares of Series A Preferred Stock are new securities with no
established trading market. The Underwriters have advised Hibernia that they
intend to make a market in the shares of Series A Preferred Stock. The
Underwriters will have no obligation to make a market in the shares of Series
A Preferred Stock, however, and may cease market making activities, if
commenced, at any time without notice. No assurance can be given as to the
liquidity of the trading market for the shares of Series A Preferred Stock.

Hibernia has agreed to indemnify the Underwriters against, or contribute to
payments that the Underwriters may be required to make in respect of, certain
liabilities, including liabilities under the Securities Act of 1933, as
amended.

Morgan Stanley & Co. Incorporated has agreed to pay or reimburse certain
expenses of Hibernia relating to the offering of the Series A Preferred Stock.

The Underwriters have provided, and may from time to time continue to
provide, investment banking and other financial services for Hibernia and its
affiliates.

LEGAL OPINIONS

The validity of the shares of Series A Preferred Stock will be passed upon
for Hibernia by Phelps Dunbar, L.L.P., New Orleans, Louisiana, and for the
Underwriters by Skadden, Arps, Slate, Meagher & Flom, New York, New York.

S-63
<PAGE>

PROSPECTUS

HIBERNIA CORPORATION

PREFERRED STOCK

DEBT SECURITIES

--------------

Hibernia Corporation ("Hibernia") may issue from time to time, together or
separately, in one or more series, (i) shares of preferred stock, no par
value, of Hibernia ("Preferred Stock") which may be issued in the form of
Depositary Shares evidenced by Depositary Receipts ("Depositary Shares"), and
(ii) unsecured subordinated debt securities ("Debt Securities"). The Preferred
Stock and Debt Securities are hereinafter referred to collectively as the
"Offered Securities." While Hibernia does not presently intend that the
Offered Securities will be convertible, some of the Offered Securities may be
convertible into shares of Class A Common Stock of Hibernia, no par value (the
"Common Stock") or shares of Preferred Stock. Hibernia may issue Offered
Securities for an aggregate public offering price of up to $250,000,000. The
Offered Securities of each class or series will be offered in amounts, at
prices and on terms determined at the time of sale.

Unless otherwise specified in the Prospectus Supplement (as defined below)
relating to Debt Securities, payment of the principal of Debt Securities may
be accelerated only in the case of certain events involving the bankruptcy or
insolvency of Hibernia, and no right of acceleration will exist in the case of
default in the payment of principal or interest or in the performance of any
covenant. See "Description of Debt Securities -- Limited Rights of
Acceleration." The Debt Securities will be subordinated in right of payment to
all Senior Indebtedness of Hibernia (as hereinafter defined). See "Description
of Debt Securities -- Subordination."

When a particular series of Offered Securities, in respect of which this
Prospectus is being delivered, is offered, a supplement to this Prospectus
(the "Prospectus Supplement") setting forth certain terms of the Offered
Securities will be delivered together with this Prospectus. The applicable
Prospectus Supplement, among other things and where applicable, will include:
(i) with regard to Preferred Stock, the specific number of shares, voting
rights of shares (if any), title, stated value and liquidation preference of
each share, issuance price, dividend rate or method of calculation, dividend
periods, dividend payment dates, any redemption or sinking fund provisions,
any conversion or exchange provisions, whether fractional interests in shares
of Preferred Stock will be offered in the form of Depositary Shares and, if
so, the fraction of a share of Preferred Stock which each such Depositary
Share will represent and other specific terms of each series of Preferred
Stock; and (ii) with regard to Debt Securities, the specific designation,
priority, aggregate principal amount, rate (or method of calculation) and time
of payment of any interest, authorized denominations, maturity, offering
price, place or places of payment, redemption terms, terms of any repayment at
the option of the holder, terms for sinking fund payments, terms for
conversion or exchange into other securities, provisions regarding original
issue discount securities and other terms of such Debt Securities. See
"Description of Preferred Stock" and "Description of Debt Securities."

The Prospectus Supplement will also contain information, where applicable,
about certain federal income tax considerations relating to, and any listing
on a securities exchange of, the Offered Securities covered by the Prospectus
Supplement.

The Prospectus may not be used to consummate sales of Offered Securities
unless accompanied by a Prospectus Supplement.

The Offered Securities may be sold by Hibernia directly, through agents
designated from time to time, through underwriting syndicates led by one or
more managing underwriters, which may include Morgan Stanley & Co.
Incorporated, or through one or more underwriters acting alone. If any agent
of Hibernia, or any underwriter, is involved in the sale of the Offered
Securities, the name of such agent or underwriter, the principal or stated
amount to be purchased by it, any applicable commissions or discounts and the
net proceeds to Hibernia from such sale will be set forth in, or may be
calculated from, the Prospectus Supplement. The aggregate net proceeds to
Hibernia from the sale of all the Offered Securities will be the public
offering or purchase price of the Offered Securities sold less the aggregate
of such commissions and discounts and other expenses of issuance and
distribution. See "Plan of Distribution."
--------------

THESE SECURITIES HAVE NOT BEEN APPROVED OR DISAPPROVED BY THE SECURITIES AND
EXCHANGE COMMISSION OR ANY STATE SECURITIES COMMISSION NOR HAS THE COMMISSION
OR ANY STATE SECURITIES COMMISSION PASSED UPON THE ACCURACY OR ADEQUACY OF
THIS PROSPECTUS. ANY REPRESENTATION TO THE CONTRARY IS A CRIMINAL OFFENSE.

--------------

THE OFFERED SECURITIES WILL BE OBLIGATIONS OF A BANK HOLDING COMPANY, ARE
NOT AND WILL NOT BE SAVINGS ACCOUNTS OR DEPOSITS, WILL NOT BE OTHER
OBLIGATIONS OF ANY BANK OR NONBANK SUBSIDIARY OF HIBERNIA, AND ARE NOT INSURED
BY THE FEDERAL DEPOSIT INSURANCE CORPORATION, THE BANK INSURANCE FUND, THE
SAVINGS ASSOCIATION INSURANCE FUND, OR ANY OTHER GOVERNMENT AGENCY OR
INSTRUMENTALITY.

--------------

The date of this Prospectus is September 19, 1996.
<PAGE>

No dealer, salesman, or other person has been authorized to give any
information or to make any representation not contained in this Prospectus or
the accompanying Prospectus Supplement and, if given or made, such information
or representation must not be relied upon as having been authorized by
Hibernia or any underwriter or agent. This Prospectus may not be used to
consummate sales of the Offered Securities unless accompanied by a Prospectus
Supplement. This Prospectus and the accompanying Prospectus Supplement do not
constitute an offer to sell or a solicitation of an offer to buy any
securities other than the registered securities to which they relate and do
not constitute an offer to sell or a solicitation of an offer to buy any of
the securities in any jurisdiction to any person to whom it is unlawful to
make such offer or solicitation in such jurisdiction. Neither the delivery of
this Prospectus or any Prospectus Supplement nor any sale made hereunder
shall, under any circumstances, create an implication that there has been no
change in the affairs of Hibernia since the date hereof or thereof or that the
information contained or incorporated by reference herein or therein is
correct as of any time subsequent to such date.

AVAILABLE INFORMATION

Hibernia is subject to the informational requirements of the Securities
Exchange Act of 1934, as amended (the "Exchange Act") and in accordance
therewith files reports, proxy statements and other information with the
Securities and Exchange Commission (the "Commission"). Such reports, proxy
statements and other information can be inspected and copied at the public
reference facilities of the Commission at Room 1024, 450 Fifth Street, N.W.,
Washington, D.C. 20549, and at the Commission's Regional Offices located at
Northwestern Atrium Center, 500 West Madison Street, Suite 1400, Chicago,
Illinois 60661; and 7 World Trade Center, Suite 1300, New York, New York
10048. Copies of such materials can be obtained from the Public Reference
Section of the Commission at 450 Fifth Street, N.W., Washington, D.C. 20549,
at prescribed rates. The Commission maintains a Web Site that contains
reports, proxy and information statements and other information and the
address of such site is http://www.sec.gov. In addition, reports, proxy
statements and other information concerning Hibernia may be inspected at the
offices of the New York Stock Exchange, Inc. (the "NYSE"), 20 Broad Street,
New York, New York 10005, on which exchange shares of Common Stock of Hibernia
are listed.

Hibernia has filed with the Commission a Registration Statement on Form S-3
(together with all amendments and exhibits thereto, the "Registration
Statement") under the Securities Act of 1933, as amended (the "Securities
Act"), with respect to the Offered Securities to which this Prospectus
relates. This Prospectus does not contain all of the information set forth in
the Registration Statement. For further information with respect to Hibernia
and the Offered Securities, reference is made to the Registration Statement.
Statements contained in this Prospectus and any Prospectus Supplement
concerning the provisions of certain documents are not necessarily complete
and, in each instance, reference is made to the copy of the document filed as
an exhibit to the Registration Statement, each such statement being qualified
in all respects by the terms of such complete document. Copies of all or any
part of the Registration Statement, including all exhibits thereto, may be
obtained, upon payment of the prescribed fees, at the Public Reference Section
of the Commission or the offices of the NYSE, at the addresses set forth
above.

INCORPORATION OF CERTAIN DOCUMENTS BY REFERENCE

The following documents filed by Hibernia with the Commission under the
Exchange Act are hereby incorporated by reference in this Prospectus: (i)
Hibernia's Annual Report on Form 10-K for the fiscal year ended December 31,
1995; (ii) Hibernia's Quarterly Reports on Form 10-Q for the quarters ended
March 31 and June 30, 1996; (iii) the definitive Proxy Statement of Hibernia
dated March 17, 1996 relating to Hibernia's 1996 Annual Meeting of
Shareholders, except for the information contained therein under the headings
"Executive Compensation --Report of the Executive Compensation Committee" and
"-- Stock Performance Graph", each of which are expressly excluded from
incorporation into this Registration Statement and Prospectus; (iv) the
description of Hibernia's Common Stock and preferred stock contained in
Hibernia's Current Report on Form 8-K dated November 2, 1994; (v) Hibernia's
Current Reports on Form 8-K dated July 8, 1996, August 29, 1996 and
September 18, 1996.

All documents subsequently filed by Hibernia with the Commission pursuant to
Sections 13(a), 13(c), 14 or 15(d) of the Exchange Act after the date of this
Prospectus and prior to the termination of the offering of the Offered
Securities shall be deemed to be incorporated by reference in this Prospectus
and to be a part hereof from the date such documents are filed, except that
any and all information included in any proxy statement filed by Hibernia
under the headings "Executive Compensation -- Report of the Executive
Committee" and "-- Stock Performance Graph" are hereby expressly excluded from
such incorporation by reference. Any statement contained in a document
incorporated or deemed to be incorporated by reference herein shall be deemed
to be modified or superseded for purposes of this Prospectus to the extent
that a statement contained herein or in a Prospectus Supplement, or in any
other subsequently filed document which is deemed to be incorporated by
reference herein modifies or supersedes such earlier statement. Any statement
so modified or superseded shall not be deemed, except as so modified or
superseded, to constitute a part of this Prospectus or any Prospectus
Supplement.

Hibernia will provide, without charge, to each person to whom this
Prospectus is delivered, on the written or oral request of any such person, a
copy of any or all of the information incorporated herein by reference other
than exhibits to such documents (unless such exhibits are specifically
incorporated by reference into such information). Written or oral requests
should be directed to Hibernia Corporation, 313 Carondelet Street, New
Orleans, Louisiana 70130, Attention: Assistant Corporate Secretary, telephone
(504) 533-3411.

2
<PAGE>

BUSINESS OF HIBERNIA

Hibernia is a Louisiana corporation registered under the Bank Holding
Company Act of 1956, as amended (the "BHCA"). Hibernia has a single banking
subsidiary, Hibernia National Bank ("HNB"), a national banking association
with its principal office in New Orleans, Louisiana. As of June 30, 1996,
Hibernia had total consolidated assets of approximately $7.5 billion, total
deposits of approximately $6.3 billion and shareholders' equity of $744
million. As of June 30, 1996, Hibernia was ranked, on the basis of total
assets, as the 67th largest bank holding company in the United States and the
second largest headquartered in Louisiana.

As of June 30, 1996, Hibernia had entered into agreements to acquire or
merge with three additional banks: Calcasieu Marine National Bank, a national
bank headquartered in Lake Charles, Louisiana ("Calcasieu Marine"), for $201.7
million in cash; St. Bernard Bank & Trust Co., a Louisiana state bank
headquartered in the New Orleans metropolitan area ("St Bernard"), for $46
million in cash; and Texarkana National Bank, a national bank headquartered in
Texarkana, Texas ("Texarkana"), for Hibernia Common Stock valued at
approximately $70 million. If the transactions with Calcasieu Marine, St.
Bernard and Texarkana had been completed on June 30, 1996, Hibernia would have
had total consolidated assets of approximately $8.8 billion and total deposits
of approximately $7.5 billion. The acquisition of Calcasieu Marine was
consummated on August 26, 1996, and accounted for under the purchase method of
accounting. It is anticipated that the transactions with St. Bernard and
Texarkana will be consummated in the fourth quarter of 1996. It is anticipated
that the acquisition of St. Bernard will be accounted for as a purchase. It is
anticipated that the acquisition of Texarkana will be accounted for as a
pooling of interests, and Texarkana will be operated as a separate banking
subsidiary of Hibernia, as required by Texas law.

At June 30, 1996, Hibernia served customers through a network of 157 banking
offices (including free-standing drive-up locations) and 163 automated teller
machines throughout the State of Louisiana. HNB offers a broad range of
banking services, including various types of deposit accounts and instruments,
commercial and consumer loans, trust and investment management services and
bank credit cards. Securities brokerage and investment banking services,
including mutual funds and annuities, are offered by Hibernia's subsidiary,
Hibernia Investment Securities. Inc.

Hibernia is headquartered at 313 Carondelet Street, New Orleans, Louisiana
70130, telephone (504) 533-5552.

USE OF PROCEEDS

Unless otherwise set forth in the applicable Prospectus Supplement, Hibernia
intends to use the net proceeds from the sale of the Offered Securities for
general corporate purposes, including Hibernia's working capital needs, the
funding of investments in, or extensions of credit to, Hibernia's banking and
non-banking subsidiaries, possible acquisitions of other financial
institutions or their assets, and possible acquisitions of, or investments in,
other businesses of a type eligible for bank holding companies to own. Pending
such use, Hibernia may temporarily invest the net proceeds in short-term
investment grade securities. Any proposal to use proceeds from any offering of
Offered Securities in connection with an acquisition will be disclosed in the
Prospectus Supplement relating to such offering.

SUPERVISION AND REGULATION

GENERAL

Hibernia is a bank holding company subject to supervision and regulation by
the Board of Governors of the Federal Reserve System (the "Federal Reserve
Board") under the BHCA. As a bank holding company, Hibernia's activities and
those of its banking and nonbanking subsidiaries are limited to the business
of banking and activities closely related or incidental to banking, and
Hibernia may not directly or indirectly acquire the

3
<PAGE>

ownership or control of more than five percent of any class of voting shares
or substantially all of the assets of any company, including a bank, without
the prior approval of the Federal Reserve Board.

HNB is subject to various federal and state laws and regulations which act
to monitor its financial position and govern certain aspects of its
operations. As a national bank HNB is supervised, examined and regulated by
the Office of the Comptroller of the Currency (the "OCC") under the National
Bank Act, as amended. Since national banks are also members of the Federal
Reserve System and their deposits are insured by the Federal Deposit Insurance
Corporation (the "FDIC"), they are also subject to the applicable provisions
of the Federal Reserve Act, as amended, and the Federal Deposit Insurance Act,
as amended, and, in certain respects, to state laws applicable to financial
institutions.

The following description summarizes some of the laws to which Hibernia and
its banking subsidiary, HNB, are subject. To the extent statutory or
regulatory provisions or proposals are described, the description is qualified
in its entirety by reference to the particular statutory or regulatory
provisions or proposals.

PAYMENT OF DIVIDENDS

Hibernia generally depends upon the payment of dividends by HNB in order to
pay dividends to its shareholders and to meet its other needs for cash to pay
expenses. Hibernia derives substantially all of its cash from the payment of
dividends by HNB, and, consequently, its ability to pay cash dividends is
affected by the ability of HNB to pay dividends. HNB is subject to various
statutory restrictions on its ability to pay dividends to Hibernia and the
ability of HNB to pay dividends in the future could be further influenced by
future bank regulatory policies and by capital guidelines. Two different
calculations are performed to measure the amount of dividends that a national
bank may declare: a recent earnings test and a cumulative net undivided
profits test. Under the recent earnings test, among other things, a dividend
may not be paid if the total of all dividends declared by the bank in any
calendar year is in excess of the current year's net profits combined with the
retained net profits of the two preceding years unless that bank obtains the
approval of the OCC. Under the cumulative net undivided profits test, a
dividend may not be paid in excess of a bank's cumulative net profits after
deducting bad debts in excess of the reserve for loan losses. Under the recent
earnings test, which is the more restrictive of the two tests, at June 30,
1996, HNB could pay a dividend of $170 million to Hibernia without prior
approval of the OCC. HNB had undivided profits of $367 million at June 30,
1996. In addition, the OCC has the authority to prohibit any national bank
from engaging in an unsafe or unsound practice, and the OCC has publicly
stated its view that it believes that it would generally be an unsafe and
unsound practice to pay dividends except out of current operating earnings. In
addition, Federal Reserve Board policy provides that bank holding companies
should not maintain a level of cash dividends that undermines the bank holding
company's ability to serve as a source of strength to its banking
subsidiaries. The policy further provides that, as a matter of prudent
banking, a bank holding company generally should not maintain a rate of cash
dividends unless its net income available to common shareholders has been
sufficient to fully fund the dividends, and the prospective rate of earnings
retention appears to be consistent with the holding company's capital needs,
asset quality and overall financial conditions.

HOLDING COMPANY STRUCTURE

HNB is subject to restrictions imposed by federal law on the ability of any
national bank to extend credit to affiliates, including Hibernia, to purchase
the assets thereof, to issue a guarantee, acceptance or letter of credit on
their behalf (including an endorsement or standby letter of credit) or to
purchase or invest in the stock or securities thereof or to take such stock or
securities as collateral for loans to any borrower. Such transactions by HNB
with Hibernia or any of Hibernia's nonbanking subsidiaries are limited in
amount to ten percent of HNB's capital and surplus and, with respect to
Hibernia and all of Hibernia's nonbanking subsidiaries together, to an
aggregate of twenty percent of HNB's capital and surplus. Furthermore, such
loans and extensions of credit, as well as certain other transactions, are
required to be secured in specified amounts. These and certain other
transactions, including any payment of money to Hibernia, must be on terms and
conditions that are, or in good faith would be, offered to nonaffiliated
companies. In addition, federal and state laws and regulations contain

4
<PAGE>

additional restrictions on certain aspects of HNB's lending activities,
including the amount of interest that may be charged on certain consumer
loans.

Because Hibernia is a legal entity separate and distinct from its direct and
indirect subsidiaries, its right to participate in the distribution of assets
of any subsidiary upon the subsidiary's liquidation or reorganization will be
subject to the prior claims of the subsidiary's creditors. In the event of a
liquidation or other resolution of an insured depository institution, such as
HNB, the claims of depositors and other general or subordinated creditors are
entitled to a priority of payment over the claims of holders of any obligation
of the institution to its shareholders, including any depository institution
holding company (such as Hibernia) or any shareholder or creditor thereof.

A depository institution insured by the FDIC can be held liable for any loss
incurred by, or reasonably expected to be incurred by, the FDIC in connection
with (i) the default of a commonly controlled FDIC-insured depository
institution or (ii) any assistance provided by the FDIC to a commonly
controlled depository institution in danger of default. Cross-guarantee
liability may result in the ultimate failure or insolvency of other insured
depository institutions in a holding company structure. Any obligation or
liability owed by a banking subsidiary to its parent company or any of the
banking subsidiary's other affiliates is subordinate to the banking
subsidiary's cross-guarantee liability. HNB is currently the only depository
institution subsidiary of Hibernia, but it is anticipated that Texarkana will
be a separate depository institution subsidiary.

Under Federal Reserve Board policy, a bank holding company is expected to
act as a source of financial strength to each of its banking subsidiaries and
commit resources to their support. Such support may be required at times when,
absent this Federal Reserve Board policy, a holding company may not be
inclined to provide it. As discussed below under "FDICIA," a bank holding
company in certain circumstances could be required to guarantee the capital
plan of an undercapitalized banking subsidiary.

In the event of a bank holding company's bankruptcy under Chapter 11 of the
U.S. Bankruptcy Code, the trustee will be deemed to have assumed and is
required to cure immediately any deficit under any commitment by the debtor
holding company to any of the federal banking agencies to maintain the capital
of an insured depository institution, and any claim for breach of such
obligation will generally have priority over most other unsecured claims.

CAPITAL ADEQUACY

The Federal Reserve Board has adopted risk-based capital guidelines that
require bank holding companies to maintain a minimum ratio of 8% of total
capital to risk-weighted assets (which are the credit risk equivalents of
balance sheet assets and certain off balance sheet items such as standby
letters of credit). At least half of total capital must be Tier I Capital,
which is composed of common stockholders' equity, qualifying noncumulative
perpetual preferred stock and a limited amount of qualifying cumulative
perpetual preferred stock and minority interests in the equity accounts of
consolidated subsidiaries, less disallowed intangibles (primarily goodwill),
disallowed deferred tax assets and other adjustments. The remainder of capital
is Tier II Capital, which may consist of a limited amount of subordinated
debt, other perpetual preferred stock, certain mandatory convertible debt
securities, hybrid capital instruments and a limited amount of loan loss
reserves. At June 30, 1996, Hibernia's consolidated Tier I Capital and total
risk-based capital ratios were 13.88% and 15.14%, respectively, which are well
above regulatory minimums. If the transactions with Calcasieu Marine, St.
Bernard and Texarkana had been consummated as of June 30, 1996, Hibernia's
consolidated Tier I Capital and total risk-based capital ratios would have
been approximately 10.51% and 11.78%, respectively.

The Federal Reserve Board and the other federal banking agencies recently
adopted amendments to their risk-based capital regulations to provide for the
consideration of interest rate risk in the agencies' determination of a
banking institution's capital adequacy. The amendments require such
institutions to effectively measure and monitor their interest rate risk and
to maintain capital adequate for that risk. The agencies plan at some future
date to propose the establishment of an explicit minimum capital requirement
to account for interest rate risk. In addition, the regulations of the Federal
Reserve Board provide that concentration of credit risk and certain risks

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arising from nontraditional activities, as well as an institution's ability to
manage these risks, are important factors to be taken into account by
regulatory agencies in assessing an organization's overall capital adequacy.

In addition, the Federal Reserve Board has established minimum leverage
ratio guidelines for bank holding companies. These guidelines provide for a
minimum ratio of Tier I Capital to average total assets (the "Leverage Ratio")
of 3% for bank holding companies that meet certain specified criteria,
including those having the highest regulatory rating. All other bank holding
companies generally are required to maintain a leverage ratio of at least 3%
plus an additional amount of up to 100 to 200 basis points. The guidelines
also provide that bank holding companies experiencing internal growth or
making acquisitions will be expected to maintain strong capital positions
substantially above the minimum supervisory levels without significant
reliance on intangible assets. Furthermore, the Federal Reserve Board has
indicated that it will consider a "tangible Tier I capital leverage ratio"
(deducting all intangibles) and other indicia of capital strength in
evaluating proposals for expansion or new activities. Hibernia's Leverage
Ratio at June 30, 1996, was 9.86%, which is well above the regulatory minimum.
If the transactions with Calcasieu Marine, St. Bernard and Texarkana had been
consummated on June 30, 1996, Hibernia's Leverage Ratio on that date would
have been approximately 7.33%.

HNB is subject to similar risk-based and leverage capital requirements
adopted by the OCC. As of June 30, 1996, HNB was in compliance with the
applicable minimum capital requirements. Neither Hibernia nor HNB has been
advised by any federal banking agency of any specific minimum leverage ratio
requirement applicable to it.

If either Hibernia or HNB were to fail to meet any of the aforementioned
capital ratio requirements, they could be subjected to a variety of penalties
or restrictions, including restrictions on its business and management and, in
the most severe cases, the termination of deposit insurance of HNB by the FDIC
and placement of HNB into conservatorship or receivership.

ENFORCEMENT POWERS OF THE FEDERAL BANKING AGENCIES

The Federal Reserve Board and the other federal banking agencies have broad
enforcement powers, including the power to terminate deposit insurance, impose
substantial fines and other civil penalties and appoint a conservator or
receiver. Failure to comply with applicable laws, regulations and supervisory
agreements could subject Hibernia or HNB to administrative sanctions and
potentially substantial civil money penalties. In addition to the grounds
discussed under "Capital Adequacy," the OCC may appoint the FDIC as
conservator or receiver for a banking institution such as HNB (or the FDIC may
appoint itself, under certain circumstances) if any one or more of a number of
circumstances exist, including, without limitation, the fact that the banking
institution is undercapitalized and has no reasonable prospect of becoming
adequately capitalized; fails to become adequately capitalized when required
to do so; fails to submit a timely and acceptable capital restoration plan; or
materially fails to implement an accepted capital restoration plan, among
other things.

FDICIA

The Federal Deposit Insurance Corporation Improvement Act of 1991 ("FDICIA")
significantly expanded the regulatory and enforcement powers of federal
banking regulators. FDICIA was intended to allow regulators to promptly
discover and correct problems at inadequately capitalized banks in the manner
that is least costly to the federal deposit insurance funds. The level of
regulatory involvement in the operation and management of banks and bank
holding companies will be largely determined by the extent of the weakened
capital position or possible deterioration in the capital position of subject
banks.

In order to monitor the capital position of banks, FDICIA established five
tiers of capital measurement: "well capitalized," "adequately capitalized,"
"undercapitalized," "significantly undercapitalized," and "critically
undercapitalized." A depository institution's capitalization status will
depend on how well its capital levels compare to various relevant capital
measures and certain other factors, as established by regulation. Under
certain circumstances, however, a well capitalized, adequately capitalized or
undercapitalized depository

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institution may be deemed to be in a capitalization category lower than is
indicated by its actual capital position. FDICIA permits, and in certain cases
requires, banking regulators to take increasingly strong corrective steps,
based on the capital tier of any undercapitalized bank, to cause such bank to
achieve and maintain capital adequacy. Even if a bank is "adequately
capitalized," however, the banking regulators are authorized to apply
corrective measures if the bank is determined to be engaged in an unsafe or
unsound activity. As of June 30, 1996, HNB exceeded the capital ratios for
classification as "well capitalized."

Banking regulators have broad powers to impose restrictions on banks,
depending on the level of capital of an insured depositary institution. The
banking regulatory agencies' corrective powers with respect to a depository
institution would include placing limits on asset growth and restrictions on
activities; requiring the institution to reduce total assets; requiring the
institution to issue additional stock (including voting stock) or to be
acquired by a healthy institution; placing restrictions on transactions with
affiliates; restricting the interest rate the institution may pay on deposits;
ordering a new election for the institution's board of directors; requiring
that certain senior executive officers or directors be dismissed; prohibiting
the bank from accepting deposits from correspondent banks; requiring the
institution to divest certain subsidiaries; prohibiting the payment of
principal or interest on subordinated debt; prohibiting the institution's
parent bank holding company from making capital distributions without prior
regulatory approval; and, in the most severe cases, appointing a conservator
or receiver for the institution.

If the insured depository institution is undercapitalized, the institution
is required to submit a capital restoration plan, and the parent bank holding
company is required to guarantee that the institution will comply with any
capital restoration plan submitted to, and accepted by, the appropriate
federal banking agency in an amount equal to the lesser of (i) 5% of the
institution's total assets at the time the institution became
undercapitalized, or (ii) the amount which is necessary (or would have been
necessary) to bring the institution into compliance with all applicable
capital standards as of the time the institution fails to comply with the
capital restoration plan. Any such guarantee from a depository institution's
holding company is entitled to priority of payment in bankruptcy. If such
parent bank holding company guarantee is not obtained, the capital restoration
plan may not be accepted by the banking regulators. As a result, such
institution would be subject to the more severe restrictions imposed on
significantly undercapitalized institutions. Further, the failure of such a
depositary institution to submit an acceptable capital plan is grounds for the
appointment of a receiver.

FDICIA also contains a number of other provisions affecting depository
institutions, including additional reporting and independent auditing
requirements, the establishment of safety and soundness standards, a review of
accounting standards, and supplemental disclosures and limits on the ability
of all but well capitalized depository institutions to acquire brokered
deposits.

FDIC INSURANCE ASSESSMENTS

HNB's deposits are insured by the Bank Insurance Fund (the "BIF") of the
FDIC, up to applicable limits. The FDIC has adopted a risk-based assessment
system under which the assessment rate for an insured depository institution
varies according to the level of risk involved in its activities. Under this
risk-based insurance system, HNB currently pays only the minimum assessment of
$2,000 per year on its insured deposits.

ACQUISITIONS OF CONTROL OF BANK HOLDING COMPANIES

The Change in Bank Control Act prohibits a person or group of persons from
acquiring "control" of a bank holding company unless the Federal Reserve Board
has been notified and has not objected to the transaction. Under a rebuttable
presumption established by the Federal Reserve Board, the acquisition of 10%
or more of a class of voting stock of a bank holding company with a class of
securities registered under Section 12 of the Exchange Act, such as Hibernia,
would, under the circumstances set forth in the presumption, constitute
acquisition of control of Hibernia.

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In addition, any company is required to obtain the approval of the Federal
Reserve Board under the BHCA before acquiring 25% (5% in the case of an
acquiror that is a bank holding company) or more of the outstanding Common
Stock of Hibernia, or otherwise obtaining control or a "controlling influence"
over Hibernia.

INTERSTATE BANKING AND BRANCHING LEGISLATION

FEDERAL LAW

In 1994, Congress passed the Riegle-Neal Interstate Banking and Branching
Efficiency Act of 1994 ("Riegle-Neal"), which affected the interstate banking
and branching abilities of bank holding companies and banks.

Beginning June 1, 1997, Riegle-Neal authorizes a national bank domiciled in
one state to establish branches in any other state as long as neither state
has opted out of interstate branching between the date of enactment of Riegle-
Neal and May 31, 1997. Riegle-Neal, however, does allow states to preserve
certain restrictions on the entry of out-of-state banks, such as the fashion
in which entry can be made, an age requirement for a bank being merged or
acquired and a deposit cap. Under Riegle-Neal, once a bank has established a
branch in another state, it may exercise the same rights in that state as
national and state banks enjoy in that state, including the ability to branch
intra-state. Riegle-Neal provides that states may opt in early to interstate
branching prior to June 1, 1997.

Riegle-Neal also permits states to allow banks to enter the state by
establishing a de novo branch in that state. In order to allow de novo entry
into a state, that state must expressly provide for de novo branching. Once a
bank has established a branch in a host state through de novo branching, it
may exercise the same rights in that state as national and state banks enjoy,
including the ability to branch intra-state. If a state opts out of interstate
branching, no bank domiciled in that state may establish branches in other
states, and no bank domiciled in another state may establish branches in that
state.

LOUISIANA LAW

The Louisiana Banking Laws were amended after the passage of Riegle-Neal to
permit banks from other states to operate branches in Louisiana, as long as
such branches are acquired by virtue of acquiring a bank that has been in
existence and actively engaged in the banking business for at least five
years. De novo branching is not permitted.

TEXAS LAW

As permitted by Riegle-Neal, the State of Texas has opted out of the
provisions of Riegle-Neal, such that banks do not have the ability to create
de novo branches in Texas.

DESCRIPTION OF PREFERRED STOCK

The following description of the terms of the Preferred Stock sets forth
certain general terms and provisions of the Preferred Stock to which any
Prospectus Supplement may relate. Certain terms of any series of Preferred
Stock offered by any Prospectus Supplement will be described in the Prospectus
Supplement relating to such series of Preferred Stock. If so indicated in the
Prospectus Supplement, the terms of any such series may differ from the terms
set forth below.

GENERAL

Pursuant to Hibernia's Articles of Incorporation ("Articles"), the Board of
Directors of Hibernia has the authority, without further shareholder action,
to issue from time to time a maximum of 100,000,000 shares of preferred stock,
without par value, in one or more series and for such consideration, as may be
fixed from time to time by the Board of Directors of Hibernia, and to fix
before the issuance of any shares of Preferred Stock of

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<PAGE>

a particular series, the designation of such series, the number of shares to
comprise such series, the dividend rate or rates payable with respect to the
shares of such series, the redemption price or prices, if any, and the terms
and conditions of the redemption, the voting rights, any sinking fund
provisions for the redemption or purchase of the shares of such series, the
terms and conditions upon which the shares are convertible, if they are
convertible, and any other relative rights, preferences and limitations
pertaining to such series. No Preferred Stock is currently outstanding.

As described under "Depositary Shares" below, Hibernia may, at its option,
elect to offer Depositary Shares evidenced by depositary receipts, each
representing a fraction (to be specified in the Prospectus Supplement relating
to the particular series of Preferred Stock) of a share of the particular
series of the Preferred Stock issued and deposited with a depositary, in lieu
of offering full shares of such series of the Preferred Stock.

Under interpretations adopted by the Federal Reserve Board, if the holders
of Preferred Stock of any series become entitled to vote for the election of
directors because dividends on such series are in arrears as described under
"Voting Rights" below, such series may then be deemed a "class of voting
securities" and a holder of 25% or more of such series (or a holder of 5% or
more if it otherwise exercises a "controlling influence" over Hibernia) may
then be subject to regulation as a bank holding company in accordance with the
BHCA. In addition, at such time as such series is deemed a class of voting
securities, any other bank holding company may be required to obtain the prior
approval of the Federal Reserve Board to acquire or retain 5% or more of such
series, and any person other than a bank holding company may be required to
obtain the prior approval of the Federal Reserve Board to acquire or retain
10% or more of such series.

The Preferred Stock shall have the dividend, liquidation, redemption, voting
and conversion rights set forth below unless otherwise specified in the
applicable Prospectus Supplement. Reference is made to the Prospectus
Supplement relating to the particular series of Preferred Stock offered
thereby for specific terms, including: (i) the designation, stated value and
liquidation preference of such Preferred Stock and the number of shares
offered; (ii) the initial public offering price at which such shares will be
issued; (iii) the dividend rate or rates (or method of calculation), the
dividend periods, the date on which dividends shall be payable and whether
such dividends shall be cumulative or noncumulative and, if cumulative, the
dates from which dividends shall commence to cumulate; (iv) any redemption or
sinking fund provisions; (v) any conversion provisions; (vi) whether Hibernia
has elected to offer Depositary Shares as described below under "Depositary
Shares"; and (vii) any additional dividend, liquidation, redemption, sinking
fund and other rights, preferences, privileges, limitations and restrictions
of such Preferred Stock.

The Preferred Stock will, when issued, be fully paid and nonassessable.
Unless otherwise specified in the applicable Prospectus Supplement, the shares
of each series of Preferred Stock will, upon issuance, rank on a parity in all
respects with all other series of Preferred Stock. The Preferred Stock will
have no preemptive rights to subscribe for any additional securities which may
be issued by Hibernia. Unless otherwise specified in the applicable Prospectus
Supplement, ChaseMellon Shareholder Services, L.L.C. will be the transfer
agent and registrar for any Preferred Stock issued by Hibernia.

Because Hibernia is a holding company, its rights and the rights of holders
of its securities, including the holders of Preferred Stock, to participate in
the assets of any Company subsidiary upon the latter's liquidation or
recapitalization will be subject to the prior claims of such subsidiary's
creditors and preferred shareholders, except to the extent Hibernia may itself
be a creditor with recognized claims against such subsidiary or a holder of
preferred shares of such subsidiary.

DIVIDENDS

The holders of the Preferred Stock will be entitled to receive, when, as and
if declared by the Board of Directors of Hibernia, out of funds legally
available therefor, dividends at such rates and on such dates as will be
specified in the applicable Prospectus Supplement. Such rates may be fixed or
variable or both. If variable, the formula used for determining the dividend
rate for each dividend period will be specified in the applicable

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Prospectus Supplement. Dividends will be payable to the holders of record as
they appear on the stock books of Hibernia (or, if applicable, the records of
the Depositary referred to below under "Depositary Shares") on such record
dates as will be fixed by the Board of Directors of Hibernia. Dividends may be
paid in the form of cash, Preferred Stock (of the same or a different series)
or Common Stock of Hibernia, in each case as specified in the applicable
Prospectus Supplement.

Dividends on any series of Preferred Stock may be cumulative or
noncumulative, as specified in the applicable Prospectus Supplement. If the
Board of Directors of Hibernia fails to declare a dividend payable on a
dividend payment date on any Preferred Stock for which dividends are
noncumulative ("Noncumulative Preferred Stock"), then the holders of such
Preferred Stock will have no right to receive a dividend in respect of the
dividend period relating to such dividend payment date, and Hibernia will have
no obligation to pay the dividend accrued for such period, whether or not
dividends on such Preferred Stock are declared or paid on any future dividend
payment dates.

Hibernia shall not declare or pay or set apart for payment any dividends on
any series of its preferred shares ranking, as to dividends, on a parity with
or junior to the outstanding Preferred Stock of any series unless (i) if such
Preferred Stock has a cumulative dividend ("Cumulative Preferred Stock"), full
cumulative dividends have been or contemporaneously are declared and paid or
declared and a sum sufficient for the payment thereof set apart for such
payment on such Preferred Stock for all dividend periods terminating on or
prior to the date of payment of any such dividends on such other series of
preferred shares of Hibernia, or (ii) if such Preferred Stock is Noncumulative
Preferred Stock, full dividends for the dividend period immediately preceding
the date of payment of such dividends have been or contemporaneously are
declared and paid or declared and a sum sufficient for the payment thereof set
apart for such payment. When dividends are not paid in full upon Preferred
Stock of any series and any other shares of preferred stock of Hibernia
ranking on a parity as to dividends with such Preferred Stock, all dividends
declared upon such Preferred Stock and any other preferred shares of Hibernia
ranking on a parity as to dividends with such Preferred Stock shall be
declared pro rata so that the amount of dividends declared per share on such
Preferred Stock and such other shares shall in all cases bear to each other
the same ratio that the accrued dividends per share on such Preferred Stock
(which shall not, if such Preferred Stock is Noncumulative Preferred Stock,
include any accumulation in respect of unpaid dividends for prior dividend
periods) and such other preferred shares bear to each other. Except as set
forth in the preceding sentence, unless full dividends on the outstanding
Cumulative Preferred Stock of any series have been paid for all past dividend
periods and full dividends for the then-current dividend period on the
outstanding Noncumulative Preferred Stock of any series have been declared and
paid or declared and a sum sufficient for the payment thereof set apart for
such payment, no dividends (other than dividends or distributions paid in
shares of, or options, warrants or rights to subscribe for or purchase shares
of Common Stock of Hibernia or other shares of Hibernia ranking junior to such
Preferred Stock as to dividends and upon liquidation) shall be declared or
paid or set aside for payment, nor shall any other distribution be declared or
paid or set aside for payment upon the Common Stock of Hibernia or on any
other shares of Hibernia ranking junior to or on a parity with such Preferred
Stock as to dividends or upon liquidation. Unless full dividends on the
Cumulative Preferred Stock of any series have been paid for all past dividend
periods and full dividends for the then-current dividend period on the
Noncumulative Preferred Stock of any series have been declared and paid or
declared and a sum sufficient for the payment thereof set apart for such
payment, no Common Stock or any other shares of Hibernia ranking junior to or
on a parity with such Preferred Stock as to dividends or upon liquidation
shall be redeemed, purchased or otherwise acquired for any consideration (or
any moneys be paid or made available for a sinking fund for the redemption of
any such shares) by Hibernia or any subsidiary of Hibernia except by
conversion into or exchange for shares of Hibernia ranking junior to such
Preferred Stock as to dividends and upon liquidation.

The amount of dividends payable for each dividend period will be computed by
annualizing the applicable dividend rate and dividing by the number of
dividend periods in a year, except that the amount of dividends payable for
the initial dividend period or any period shorter than a full dividend period
shall be computed on the basis of 30-day months, a 360-day year and the actual
number of days elapsed in the period.

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Each series of Preferred Stock will be entitled to dividends as described in
the applicable Prospectus Supplement, which may be based upon one or more
methods of determination. Different series of the Preferred Stock may be
entitled to dividends at different rates or based upon different methods of
determination.

REDEMPTION

A series of the Preferred Stock may be redeemable, in whole or in part, at
the option of Hibernia, and may be subject to mandatory redemption pursuant to
a sinking fund or otherwise, in each case upon terms, at the times and at the
redemption prices specified in the applicable Prospectus Supplement and
subject to the rights of holders of other securities of Hibernia. Preferred
Stock redeemed by Hibernia will be restored to the status of authorized but
unissued preferred shares.

The Prospectus Supplement relating to a series of Preferred Stock that is
subject to mandatory redemption will specify the number of shares of such
Preferred Stock that shall be redeemed by Hibernia in each year commencing
after a date to be specified, at a redemption price per share to be specified,
together with an amount equal to all accrued and unpaid dividends thereon
(which shall not, if such Preferred Stock is Noncumulative Preferred Stock,
include any accumulation in respect of unpaid dividends for prior dividend
periods) to the date of redemption. The redemption price may be payable in
cash or other property, as specified in the applicable Prospectus Supplement.
If the redemption price for Preferred Stock of any series is payable only from
the net proceeds of the issuance of capital stock of Hibernia, the terms of
such Preferred Stock may provide that, if no such capital stock shall have
been issued or to the extent the net proceeds from any issuance are
insufficient to pay in full the aggregate redemption price then due, such
Preferred Stock shall automatically and mandatorily be converted into shares
of the applicable capital stock of Hibernia pursuant to conversion provisions
specified in the applicable Prospectus Supplement.

If fewer than all the outstanding shares of Preferred Stock of any series
are to be redeemed, the number of shares to be redeemed will be determined by
the Board of Directors of Hibernia and such shares shall be redeemed pro rata
from the holders of record of such shares in proportion to the number of such
shares held by such holders (with adjustments to avoid redemption of
fractional shares) or by lot or by any other method as may be determined by
the Board of Directors of Hibernia.

Notwithstanding the foregoing, if any dividends, including any accumulation,
on Cumulative Preferred Stock of any series are in arrears, no Preferred Stock
of such series shall be redeemed unless all outstanding Preferred Stock of
such series is simultaneously redeemed, and Hibernia shall not purchase or
otherwise acquire any Preferred Stock of such series; provided, however, that
the foregoing shall not prevent the purchase or acquisition of Preferred Stock
of such series pursuant to a purchase or exchange offer, provided such offer
is made on the same terms to all holders of the Preferred Stock of such
series.

Notice of redemption shall be given by mailing the same to each record
holder of the Preferred Stock to be redeemed, not less than 30 nor more than
60 days prior to the date fixed for redemption thereof, to the respective
addresses of such holders as the same shall appear on the stock books of
Hibernia. Each notice shall state: (i) the redemption date; (ii) the number of
shares and series of the Preferred Stock to be redeemed; (iii) the redemption
price; (iv) the place or places where certificates for such Preferred Stock
are to be surrendered for payment of the redemption price; (v) that dividends
on the shares to be redeemed will cease to accrue on such redemption date; and
(vi) the date upon which the holder's conversion rights, if any, as to such
shares, shall terminate. If fewer than all the shares of Preferred Stock of
any series held by any holder are to be redeemed, the notice mailed to such
holder shall also specify the number of shares of Preferred Stock to be
redeemed from such holder.

If notice of redemption of any shares of Preferred Stock has been given,
from and after the redemption date for such shares (unless default shall be
made by Hibernia in providing money for the payment of the redemption price of
such shares), dividends on such shares shall cease to accrue and such shares
shall no longer be deemed to be outstanding, and all rights of the holders
thereof as shareholders of Hibernia (except the right to receive the
redemption price) shall cease. Upon surrender in accordance with such notice
of the certificates representing any

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such shares (properly endorsed or assigned for transfer, if the Board of
Directors of Hibernia shall so require and the notice shall so state), the
redemption price set forth above shall be paid out of the funds provided by
Hibernia. If fewer than all the shares represented by any such certificate are
redeemed, a new certificate shall be issued representing the unredeemed shares
without cost to the holder thereof.

CONVERSION RIGHTS

The Prospectus Supplement relating to a series of the Preferred Stock that
is convertible will state the terms on which shares of such series are
convertible into Hibernia's Common Stock, or another series of Preferred
Stock.

RIGHTS UPON LIQUIDATION

In the event of any voluntary or involuntary liquidation, dissolution or
winding up of Hibernia, the holders of each series of Preferred Stock shall be
entitled to receive out of the assets of Hibernia available for distribution
to shareholders, before any distribution of assets is made to holders of
Common Stock or any other class or series of shares ranking junior to such
Preferred Stock upon liquidation, liquidating distributions in the amount of
the liquidation preference of such Preferred Stock as set forth in the
Prospectus Supplement relating to such series plus accrued and unpaid
dividends for the then current dividend period and if such series of Preferred
Stock is cumulative, for all dividend periods prior thereto. If, upon any
voluntary or involuntary liquidation, dissolution or winding up of Hibernia,
the amounts payable with respect to Preferred Stock of any series and any
other shares of Hibernia ranking as to any such distribution on a parity with
such Preferred Stock are not paid in full, the holders of such Preferred Stock
and of such other shares will share ratably in any such distribution of assets
of Hibernia in proportion to the full respective preferential amounts to which
they are entitled. After payment of the full amount of the liquidating
distribution to which they are entitled, the holders of Preferred Stock of any
series will not be entitled to any further participation in any distribution
of assets by Hibernia.

VOTING RIGHTS

Except as indicated below or in the applicable Prospectus Supplement, or
except as expressly required by applicable law, the holders of the Preferred
Stock will not be entitled to vote. In the event Hibernia issues full shares
of any series of Preferred Stock, each such share will be entitled to one vote
on matters on which holders of such series of the Preferred Stock are entitled
to vote. However, as more fully described under "Depositary Shares" below, if
Hibernia elects to issue Depositary Shares representing a fraction of a share
of a series of Preferred Stock, each such Depositary Share will, in effect, be
entitled to such fraction of a vote, rather than a full vote, per Depositary
Share. Since each full share of any series of Preferred Stock of Hibernia
shall be entitled to one vote, the voting power of such series, on matters on
which holders of such series and holders of other series of Preferred Stock
are entitled to vote as a single class, shall depend on the number of shares
in such series, not the aggregate stated value, liquidation preference or
initial offering price of the shares of such series of Preferred Stock.

If the equivalent of six quarterly dividends payable on any series of
Preferred Stock are in default, the number of directors of Hibernia will be
increased by two and the holders of all outstanding series of Preferred Stock,
voting as a single class without regard to series, will be entitled to elect
such additional two directors until all dividends in default have been paid or
declared and set apart for payment.

The affirmative vote or consent of the holders of at least two-thirds of the
shares of Preferred Stock of any series present or represented at a meeting,
voting as a class, will be required for any amendment to Hibernia's Articles
that will adversely affect the powers, preferences, privileges or rights of
the Preferred Stock of such series. The affirmative vote or consent of the
holders of at least two-thirds of the shares of Preferred Stock of any series
and any other series of preferred shares of Hibernia ranking on a parity with
the Preferred Stock of such series as to dividends or upon liquidation present
or represented at a meeting, voting as a single class without regard to
series, will be required to authorize, effect or validate the creation,
authorization or issue of

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any shares of any class of stock of Hibernia ranking prior to the Preferred
Stock of such series as to dividends or upon liquidation, or the
reclassification of any authorized stock of Hibernia into any such prior
shares, or the creation, authorization or issue of any obligation or security
convertible into or evidencing the right to purchase any such prior shares.

Subject to such affirmative vote or consent of the holders of the
outstanding shares of Preferred Stock of any series, Hibernia may, by
resolution of its Board of Directors or as otherwise permitted by law, from
time to time alter or change the preferences, rights or powers of the
Preferred Stock of such series. The holders of the Preferred Stock of such
series shall not be entitled to participate in any such vote if, at or prior
to the time when any such alteration or change is to take effect, provision is
made for the redemption of all the Preferred Stock of such series at the time
outstanding. Nothing in this section shall be taken to require a class vote or
consent in connection with the authorization, designation, increase or
issuance of any shares of any class or series (including additional Preferred
Stock of any series) that rank junior to or on a parity with the Preferred
Stock of such series as to dividends and liquidation rights or in connection
with the authorization, designation, increase or issuance of any bonds,
mortgages, debentures or other obligations of Hibernia.

TRANSFER AGENT AND REGISTRAR

Unless otherwise specified in the applicable Prospectus Supplement,
ChaseMellon Shareholder Services, L.L.C. will be the transfer agent and
registrar for any Preferred Stock issued by Hibernia.

DEPOSITARY SHARES

The following description of the terms of Depositary Shares sets forth
certain general terms and provisions of Depositary Shares to which any
Prospectus Supplement may relate. Certain other terms of any Depositary Shares
offered by any Prospectus Supplement will be specified in the applicable
Prospectus Supplement. If so specified in the applicable Prospectus
Supplement, the terms of any Depositary Shares may differ from the terms set
forth below. The description of Depositary Shares set forth below and in any
Prospectus Supplement does not purport to be complete and is subject to and
qualified in its entirety by reference to Hibernia's Articles relating to the
applicable series of Preferred Stock, which Articles will be amended and filed
as an exhibit to or incorporated by reference in the Registration Statement of
which this Prospectus forms a part.

GENERAL

Hibernia may, at its option, elect to offer fractional shares of Preferred
Stock, rather than full shares of Preferred Stock. If such option is
exercised, Hibernia will issue to the public receipts for Depositary Shares,
each of which will represent a fraction (to be set forth in the Prospectus
Supplement relating to a particular series of Preferred Stock) of a share of a
particular series of Preferred Stock as described below.

The shares of any series of Preferred Stock represented by Depositary Shares
will be deposited under a Deposit Agreement (the "Deposit Agreement") between
Hibernia and a bank or trust company selected by Hibernia having its principal
office in the United States and having a combined capital and surplus of at
least $50,000,000 (the "Depositary"). Subject to the terms of the Deposit
Agreement, each owner of a Depositary Share will be entitled, in proportion to
the applicable fraction of a share of Preferred Stock represented by such
Depositary Share, to all the rights and preferences of the Preferred Stock
represented thereby (including dividend, voting, redemption, conversion and
liquidation rights).

The Depositary Shares will be evidenced by depositary receipts issued
pursuant to the Deposit Agreement ("Depositary Receipts"). Depositary Receipts
will be distributed to those persons purchasing the fractional shares of
Preferred Stock in accordance with the terms of the offering. Copies of the
forms of Deposit Agreement and Depositary Receipt will be filed as exhibits
to, or incorporated by reference in, the Registration Statement of

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<PAGE>

which this Prospectus is a part, and the following summary is qualified in its
entirety by reference to such exhibits.

Pending the preparation of definitive engraved Depositary Receipts, the
Depositary may, upon the written order of Hibernia, issue temporary Depositary
Receipts substantially identical to (and entitling the holders thereof to all
the rights pertaining to) the definitive Depositary Receipts but not in
definitive form. Definitive Depositary Receipts will be prepared thereafter
without unreasonable delay, and temporary Depositary Receipts will be
exchangeable for definitive Depositary Receipts at Hibernia's expense.

WITHDRAWAL OF PREFERRED STOCK

Upon surrender of Depositary Receipts at the principal office of the
Depositary (unless the related Depositary Shares have previously been called
for redemption), the owner of the Depositary Shares evidenced thereby is
entitled to delivery at such office, to or upon his order, of the number of
whole shares of Preferred Stock and any money or other property represented by
such Depositary Shares. Partial shares of Preferred Stock will not be issued.
If the Depositary Receipts delivered by the holder evidence a number of
Depositary Shares in excess of the number of Depositary Shares representing a
number of whole shares of Preferred Stock to be withdrawn, the Depositary will
deliver to such holder at the same time a new Depositary Receipt evidencing
such excess number of Depositary Shares. Holders of shares of Preferred Stock
thus withdrawn will not thereafter be entitled to deposit such shares under
the Deposit Agreement or to receive Depositary Shares therefor.

DIVIDENDS AND OTHER DISTRIBUTIONS

The Depositary will distribute all cash dividends or other cash
distributions received in respect of the Preferred Stock to the record holders
of Depositary Shares relating to such Preferred Stock in proportion to the
numbers of such Depositary Shares owned by such holders. The Depository shall
distribute only such amount, however, as can be distributed without
attributing to any holder of Depositary Shares a fraction of one cent, and any
balance not so distributed shall be added to and treated as part of the next
sum received by the Depositary for distribution to record holders of
Depositary Shares.

In the event of a distribution other than in cash, the Depositary will
distribute property received by it to the record holders of Depositary Shares
entitled thereto, unless the Depositary determines that it is not feasible to
make such distribution, in which case the Depositary may, with the approval of
Hibernia, sell such property and distribute the net proceeds from such sale to
such holders.

REDEMPTION OF DEPOSITARY SHARES

If a series of Preferred Stock represented by Depositary Shares is subject
to redemption, the Depositary Shares will be redeemed from the proceeds
received by the Depositary resulting from the redemption, in whole or in part,
of such series of Preferred Stock held by the Depositary. The Depositary shall
mail notice of redemption not less than 30 nor more than 60 days prior to the
date fixed for redemption to the record holders of the Depositary Shares to be
so redeemed at their respective addresses appearing in the Depositary's books.
The redemption price per Depositary Share will be equal to the applicable
fraction of the redemption price per share payable with respect to such series
of the Preferred Stock. Whenever Hibernia redeems shares of Preferred Stock
held by the Depositary, the Depositary will redeem as of the same redemption
date the number of Depositary Shares representing shares of Preferred Stock so
redeemed. If less than all the Depositary Shares are to be redeemed, the
Depositary Shares to be redeemed will be selected by lot or pro rata as may be
determined by the Depositary.

After the date fixed for redemption, the Depositary Shares so called for
redemption will no longer be deemed to be outstanding and all rights of the
holders of the Depositary Shares will cease, except the right to receive the
moneys payable upon such redemption and any money or other property to which
the holders of

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<PAGE>

such Depositary Shares were entitled upon such redemption upon surrender to
the Depositary of the Depositary Receipts evidencing such Depositary Shares.

VOTING THE PREFERRED STOCK

Upon receipt of notice of any meeting at which the holders of the Preferred
Stock are entitled to vote, the Depositary will mail the information contained
in such notice of meeting to the record holders of the Depositary Shares
relating to such Preferred Stock. Each record holder of such Depositary Shares
on the record date (which will be the same date as the record date for the
Preferred Stock) will be entitled to instruct the Depositary as to the
exercise of the voting rights pertaining to the amount of the Preferred Stock
represented by such holder's Depositary Shares. The Depositary will endeavor,
insofar as practicable, to vote the amount of the Preferred Stock represented
by such Depositary Shares in accordance with such instructions, and Hibernia
will agree to take all action which may be deemed necessary by the Depositary
in order to enable the Depositary to do so. The Depositary will abstain from
voting shares of the Preferred Stock to the extent it does not receive
specific instructions from the holders of Depositary Shares representing such
Preferred Stock.

AMENDMENT AND TERMINATION OF THE DEPOSITARY AGREEMENT

The form of Depositary Receipt evidencing the Depositary Shares and any
provision of the Deposit Agreement may at any time be amended by agreement
between Hibernia and the Depositary. However, any amendment which materially
and adversely alters the rights of the holders of Depositary Shares will not
be effective unless such amendment has been approved by the holders of at
least a majority of the Depositary Shares then outstanding. The Deposit
Agreement may be terminated by Hibernia or the Depositary only if (i) all
outstanding Depositary Shares have been redeemed or (ii) there has been a
final distribution in respect of the Preferred Stock in connection with any
liquidation, dissolution or winding up of Hibernia and such distribution has
been distributed to the holders of Depositary Receipts.

CHARGES OF DEPOSITARY

Hibernia will pay all transfer and other taxes and governmental charges
arising solely from the existence of the depositary arrangements. Hibernia
will pay charges of the Depositary in connection with the initial deposit of
the Preferred Stock and any redemption of the Preferred Stock. Holders of
Depositary Receipts will pay other transfer and other taxes and governmental
charges and such other charges as are expressly provided in the Deposit
Agreement to be for their accounts.

MISCELLANEOUS

The Depositary will forward to the holders of Depositary Shares all reports
and communications from Hibernia which are delivered to the Depositary and
which Hibernia is required to furnish to the holders of the Preferred Stock.

Neither the Depositary nor Hibernia will be liable if it is prevented or
delayed by law or any circumstance beyond its control in performing its
obligations under the Deposit Agreement. The obligations of Hibernia and the
Depositary under the Deposit Agreement will be limited to performance in good
faith of their duties thereunder and they will not be obligated to prosecute
or defend any legal proceeding in respect of any Depositary Shares or
Preferred Stock unless satisfactory indemnity is furnished. They may rely upon
written advice of counsel or accountants, or information provided by persons
presenting Preferred Stock for deposit, holders of Depositary Receipts or
other persons believed to be competent and on documents believed to be
genuine.

RESIGNATION AND REMOVAL OF DEPOSITARY

The Depositary may resign at any time by delivering to Hibernia notice of
its election to do so, and Hibernia may at any time remove the Depositary, any
such resignation or removal to take effect upon the appointment of

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<PAGE>

a successor Depositary and its acceptance of such appointment. Such successor
Depositary must be appointed within 60 days after delivery of the notice of
resignation or removal and must be a bank or trust company having its
principal office in the United States and having a combined capital and
surplus of at least $50,000,000.

DESCRIPTION OF DEBT SECURITIES

The following description of the terms of the Debt Securities sets forth
certain general terms and provisions of the Debt Securities to which any
Prospectus Supplement may relate. Certain other terms of any Debt Securities
offered by any Prospectus Supplement will be specified in the applicable
Prospectus Supplement. If so specified in the applicable Prospectus
Supplement, the terms of any Debt Securities may differ from the terms set
forth below. The description of the terms of the Debt Securities set forth
below and in any Prospectus Supplement does not purport to be complete and is
subject to and qualified in its entirety by reference to an Indenture, a form
of which has been filed as an exhibit to the Registration Statement of which
this Prospectus forms a part (the "Indenture").

Hibernia is a bank holding company, and the right of Hibernia to participate
as a shareholder in any distribution of assets of any subsidiary upon its
liquidation or reorganization or winding-up (and thus the ability of holders
of the Debt Securities to benefit, as creditors of Hibernia, from such
distribution) is subject to the prior claims of creditors of any such
subsidiary. Hibernia's bank subsidiaries are subject to claims by creditors
for debt obligations, including deposit liabilities, obligations for federal
funds purchased and securities sold under repurchase agreements. There are
also various legal limitations on the extent to which Hibernia's bank
subsidiaries may pay dividends or otherwise supply funds to Hibernia or its
affiliates. See "Supervision and Regulation."

GENERAL

The Debt Securities will be subordinated to any Senior Indebtedness (as
hereinafter defined) now existing or that Hibernia may issue in the future.
The Debt Securities will be issued under the Indenture. The Indenture will be
entered into between Hibernia and a bank to be selected by Hibernia as the
trustee thereunder (the "Trustee"). The statements under this caption are
brief summaries of certain provisions contained in the Indenture, do not
purport to be complete and are qualified in their entirety by reference to the
Indenture. Whenever defined terms are used but not defined herein, such terms
shall have the meanings ascribed to them in the Indenture, it being intended
that such defined terms shall be incorporated herein by reference.

The Indenture does not limit the amount of Debt Securities which may be
issued thereunder, and the Indenture provides that Debt Securities of any
series may be issued thereunder up to the aggregate principal amount which may
be authorized from time to time by Hibernia and will be denominated in United
States dollars. Neither the Indenture nor the Debt Securities will limit or
otherwise restrict the amount of other indebtedness which may be incurred or
the other securities which may be issued by Hibernia or any of its
subsidiaries.

Debt Securities of a series may be issued in registered form without coupons
("Registered Securities"), or in the form of one or more global securities in
registered or bearer form (each a "Global Security").

Reference is made to the Prospectus Supplement for a description of the
following terms, where applicable, of each series of Debt Securities in
respect of which this Prospectus is being delivered: (i) the title of such
Debt Securities; (ii) the limit, if any, on the aggregate principal amount or
aggregate initial public offering price of such Debt Securities; (iii) the
priority of payment of such Debt Securities; (iv) the price or prices (which
may be expressed as a percentage of the aggregate principal amount thereof) at
which the Debt Securities will be issued; (v) the date or dates on which the
principal of the Debt Securities will be payable; (vi) the rate or rates
(which may be fixed or variable) per annum at which such Debt Securities will
bear interest, if any, or the method of determining the same; (vii) the date
or dates from which such interest, if any, on the Debt Securities will accrue,

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<PAGE>

the date or dates on which such interest, if any, will be payable, the date or
dates on which payment of such interest, if any, will commence and the Regular
Record Dates for such Interest Payment Dates; (viii) the extent to which any
of the Debt Securities will be issuable in temporary or permanent global form,
or the manner in which any interest payable on a temporary or permanent global
Debt Security will be paid; (ix) each office or agency where, subject to the
terms of the applicable Indenture, the Debt Securities may be presented for
registration of transfer or exchange; (x) the place or places where the
principal of and premium, if any, and interest, if any, on the Debt Securities
will be payable; (xi) the date or dates, if any, after which such Debt
Securities may be redeemed or purchased in whole or in part, at the option of
Hibernia or mandatorily pursuant to any sinking, purchase or analogous fund or
may be required to be purchased or redeemed at the option of the holder, and
the redemption or repayment price or prices thereof; (xii) if other than
denominations of $1,000 or any integral multiple thereof, the denomination or
denominations in which such Debt Securities are authorized to be issued;
(xiii) any index used to determine the amount of payments of principal of,
premium, if any, and interest on the Debt Securities; (xiv) the payment of any
additional amounts with respect to the Debt Securities; (xv) whether any of
the Debt Securities will be issued as Original Issue Discount Securities (as
defined below); (xvi) information with respect to book-entry procedures, if
any; (xvii) the terms, if any, upon which the Debt Securities may be
convertible into or exchanged for Common Stock, Preferred Stock (which may be
represented by Depositary Shares), other Debt Securities or any other
securities of Hibernia and the terms and conditions upon which such conversion
or exchange will be effected, including the initial conversion or exchange
price or rate, the conversion or exchange period and any other provision in
addition to or in lieu of those described herein; (xviii) any additional
covenants, Defaults or Events of Default not currently set forth in the
Indenture; and (xix) any other terms of such Debt Securities not inconsistent
with the provisions of the Indenture.

Debt Securities may be issued at an issue price (as specified in the
applicable Prospectus Supplement) that is less the one hundred percent of the
principal amount thereof ("Original Issue Discount Securities"). There may not
be any periodic payments of interest on Original Issue Discount Securities. In
the event of an acceleration of the maturity of any Original Issue Discount
Security, the amount payable to the holder of such Original Issue Discount
Security upon such acceleration will be determined in accordance with the
Prospectus Supplement, the terms of such security and the Indenture, but will
be an amount less than the amount payable at the maturity of the principal of
such Original Issue Discount Security. Federal income tax considerations with
respect to Original Issue Discount Securities will be set forth in the
Prospectus Supplement relating thereto.

SUBORDINATION

The Debt Securities will be direct, unsecured obligations of Hibernia and
will be subject to the subordination provisions described below. The Debt
Securities will be subordinated to any Senior Indebtedness of Hibernia now
existing or issued in the future.

It is the intent of Hibernia that Debt Securities issued by Hibernia be
treated as Tier II capital for calculation of regulatory capital ratios. The
Federal Reserve Board has issued interpretations of its capital regulations
indicating, among other things, that subordinated indebtedness of bank holding
companies issued on or after September 4, 1992, is includable in Tier II
capital for calculation of regulatory capital ratios only if the subordination
of the indebtedness meets certain criteria and if the indebtedness may be
accelerated only for bankruptcy, insolvency and similar matters. Accordingly,
the Indenture contains subordination and acceleration provisions for the Debt
Securities which are intended to be consistent with the Federal Reserve Board
interpretations.

"Senior Indebtedness" is defined in the Indenture as (i) Senior Indebtedness
for Money Borrowed and (ii) General Obligations. "Senior Indebtedness for
Money Borrowed" means (i) the principal of, premium, if any and interest on
all of Hibernia's indebtedness for money borrowed, whether outstanding on the
date of execution of the Indenture or thereafter created, assumed or incurred,
and (ii) any deferrals, renewals or extensions of such indebtedness for money
borrowed, other than the Debt Securities and indebtedness for money borrowed
that by its terms is expressly stated to rank pari passu with the Debt
Securities or junior in right of payment to the Debt Securities. The term
"indebtedness for money borrowed" includes, without limitation, any obligation
of, or any

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<PAGE>

obligation guaranteed by, the Company for the repayment of borrowed money,
whether or not evidenced by bonds, debentures, notes or other written
instruments, and any deferred obligation for the payment of the purchase price
of property or assets. "General Obligations" means all obligations of Hibernia
to make payment on account of claims of general creditors, other than (i)
Senior Indebtedness for Money Borrowed, (ii) the Debt Securities, and (iii)
indebtedness for money borrowed that by its terms is expressly stated to rank
pari passu with the Debt Securities or junior in right of payment to the Debt
Securities. If the Federal Reserve Board promulgates any rule or issues any
interpretation defining or describing the term "general creditor" for purposes
of its criteria for the inclusion of subordinated debt of a bank holding
company in capital, the term "General Obligations" shall mean obligations to
"general creditors" as defined or described in such rule or interpretation, as
from time to time in effect, other than obligations described in clauses (i),
(ii) and (iii) above. If the Federal Reserve Board promulgates any rule or
issues any interpretation that permits Hibernia to include the Debt Securities
in its capital if they were subordinated in right of payment to Senior
Indebtedness for Borrowed Money without regard to any other obligations of
Hibernia, or that otherwise eliminates the requirement that subordinated debt
of a bank holding company must be subordinated in right of payment to its
"general creditors" in order to be included in capital, or that causes the
Debt Securities to be excluded from capital notwithstanding the subordination
provisions described in the Indenture, or if any event occurs that results in
Hibernia no longer being subject to capital requirements of bank regulatory
authorities, the provisions of the Indenture providing for subordination of
the Debt Securities in favor of creditors in respect of General Obligations
shall immediately and automatically be terminated without further action by
Hibernia or the Trustee, and thenceforth the term "Senior Indebtedness" shall
mean Senior Indebtedness for Money Borrowed only.

Upon any distribution of assets of Hibernia upon any dissolution, winding
up, liquidation or reorganization, the payment of the principal of, premium,
if any, and interest on the Debt Securities is to be subordinated in right of
payment, to the extent provided in the Indenture, to the prior payment in full
of all Senior Indebtedness.

Upon any distribution of assets of Hibernia upon any dissolution, winding
up, liquidation or reorganization, the holders of Senior Indebtedness will
first be entitled to receive payment in full of all amounts due or to become
due before the holders of the Debt Securities will be entitled to receive any
payment in respect of the principal of, premium, if any, or interest on the
Debt Securities.

In addition, no payment may be made of the principal of, premium, if any, or
interest on the Debt Securities, or in respect of any redemption, retirement,
purchase or other acquisition of any of the Debt Securities, at any time when
(i) there is a default in the payment of the principal of, premium, if any,
interest on or otherwise in respect of any Senior Indebtedness for Money
Borrowed or (ii) any Event of Default with respect to any Senior Indebtedness
for Money Borrowed has occurred and is continuing, or would occur as a result
of such payment on the Debt Securities or any redemption, retirement, purchase
or other acquisition of any of the Debt Securities, permitting the holders of
such Senior Indebtedness for Money Borrowed to accelerate the maturity
thereof. Except as described above, the obligation of Hibernia to make payment
of the principal of, premium, if any, or interest on the Debt Securities will
not be affected.

Subject to payment in full of all Senior Indebtedness, the rights of the
holders of Debt Securities will be subrogated to the rights of the holders of
Senior Indebtedness to receive payments or distributions of cash, property or
securities of Hibernia applicable to Senior Indebtedness.

The subordination provisions in the Indenture are provided for the benefit
of the holders of Senior Indebtedness for Money Borrowed and are not intended
for the benefit of creditors in respect of General Obligations. Under, one or
more of the circumstances set forth in the definition of "General Obligations"
herein, the Company and the Trustee may amend the Indenture to reduce or
eliminate the rights of creditors in respect of General Obligations without
the consent of such creditors or the Holders of the Securities.

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<PAGE>

CONVERSION

Certain Debt Securities (the "Convertible Debt Securities") may be
convertible into other Conversion Securities (as defined herein) of Hibernia,
as specified in any Prospectus Supplement. The holders of such Convertible
Debt Securities of a specified series may be entitled or, if so provided in
the applicable Prospectus Supplement, may be required at such time or times
specified in the applicable Prospectus Supplement, subject to prior
redemption, repayment or repurchase, to convert any Convertible Debt
Securities of such series (in denominations set forth in the applicable
Prospectus Supplement) into Common Stock, Preferred Stock, another series of
Debt Securities, or Depositary Shares, as the case may be (collectively, the
foregoing securities into which the Convertible Debt Securities may convert
are referred to herein as "Conversion Securities") at the conversion price set
forth in the applicable Prospectus Supplement, subject to adjustment as
described below, and in the applicable Prospectus Supplement. The relevant
provisions for each series of Convertible Debt Securities will be set forth in
the applicable Prospectus Supplement. Except as described below or in the
applicable Prospectus Supplement, no adjustment will be made upon conversion
of any Convertible Debt Securities for interest accrued thereon or for
dividends on any Conversion Securities issued. If any Convertible Debt
Securities not called for redemption are converted between a Regular Record
Date for the payment of interest and the next succeeding Interest Payment
Date, such Convertible Debt Securities must be accompanied by funds equal to
the interest payable on such succeeding Interest Payment Date on the principal
amount so converted. Hibernia is not required to issue fractional shares of
Common Stock or Preferred Stock upon conversion of Convertible Debt Securities
that are convertible into Common Stock or Preferred Stock, respectively, and,
in lieu thereof, will pay a cash adjustment, in the case of Convertible Debt
Securities convertible into Common Stock, based upon the market value of the
Common Stock, and in the case of Convertible Debt Securities convertible into
Preferred Stock, based upon the liquidation preference of such series of
Preferred Stock, unless otherwise specified in the Prospectus Supplement. In
the case of Convertible Debt Securities convertible into securities other than
Common Stock or Preferred Stock, such adjustment will be based on such method
as is set forth in the Prospectus Supplement.

The conversion price for a series of Convertible Debt Securities that are
convertible into Common Stock is subject to adjustment upon the occurrence of
certain events under formulas that will be set forth in the applicable
Prospectus Supplement.

LEVERAGED AND OTHER TRANSACTIONS

The Indenture and the Debt Securities do not contain, among other things,
provisions which would afford holders of the Debt Securities protection in the
event of a sudden decline in credit rating that might result from a
recapitalization, restructuring or a highly leveraged or other transaction
involving Hibernia which could adversely affect the holders of Debt
Securities.

EVENTS OF DEFAULT, DEFAULTS, WAIVERS, ETC.

Unless otherwise provided in the applicable Prospectus Supplement, an Event
of Default with respect to Debt Securities of any series is defined in the
Indenture as an event involving the bankruptcy or reorganization of Hibernia
and any other Event of Default provided with respect to Debt Securities of
that series. A Default with respect to Debt Securities of any series is
defined in the Indenture as (i) an Event of Default with respect to such
series, (ii) default in the payment of the principal of or premium, if any, on
any Debt Security of such series when due, (iii) default in the payment of
interest upon any Debt Security of such series when due and the continuance of
such default for a period of 30 days, (iv) default in the performance of any
other covenant or agreement of Hibernia in the Indenture with respect to Debt
Securities of such series and continuance of such default for 60 days after
written notice, or (v) any other Default provided with respect to Debt
Securities of any series. If an Event of Default with respect to any series of
Debt Securities for which there are Debt Securities outstanding under the
Indenture occurs and is continuing, either the Trustee or the holders of not
less than 25% in aggregate principal amount of the Debt Securities of such
series may declare the principal amount (or if such Debt Securities are
Original Issue Discount Securities, such portion of the principal amount as
may be specified

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<PAGE>

in the terms of that series) of all Debt Securities of that series to be
immediately due and payable. The holders of a majority in aggregate principal
amount of the Debt Securities of any series outstanding under the Indenture
may waive an Event of Default resulting in acceleration of such Debt
Securities, but only if all Defaults have been remedied and all payments due
(other than those due as a result of acceleration) have been made. Prior to
acceleration of maturity of the Debt Securities of any series outstanding
under the Indenture, the holders of a majority in aggregate principal amount
of such Debt Securities may waive any past default under the Indenture except
a default in the payment of principal of, premium, if any, or interest on the
Debt Securities of such series. If a Default occurs and is continuing, the
Trustee may in its discretion, and at the written request of holders of not
less than a majority in aggregate principal amount of the Debt Securities of
any series outstanding under the Indenture and upon reasonable indemnity
against the costs, expenses and liabilities to be incurred in compliance with
such request and subject to certain other conditions set forth in the
Indenture shall, proceed to protect the rights of the holders of all the Debt
Securities of such series. In the event of a Default specified in clauses (ii)
or (iii) above in payment of principal of, premium, if any, or interest on any
Debt Security of any series, Hibernia will, upon demand of the Trustee, pay to
it, for the benefit of the holder of any such Debt Security, the whole amount
then due and payable on such Debt Security for principal, premium, if any, and
interest. If Hibernia fails to pay such amount forthwith upon such demand, the
Trustee may, among other things, institute a judicial proceeding for the
collection thereof. Finally, the holder of any Debt Security of any series
shall have the right to institute suit for the enforcement of any payment of
principal of, premium, if any, and interest on such Debt Security on the
respective Stated Maturities (as defined in the Indenture) expressed in such
Debt Security and that such right shall not be impaired without the consent of
such holder.

Hibernia is required to file annually with the Trustee a written statement
of officers as to the existence or non-existence of defaults under the
Indenture and the Debt Securities.

MODIFICATION OF THE INDENTURE

The Indenture provides that, with the consent of the holders of not less
than a majority in aggregate principal amount of the outstanding Debt
Securities of each affected series, modifications and alterations of the
Indenture may be made which affect the rights of the holders of such Debt
Securities; provided, however, that no such modification or alteration may be
made without the consent of the holder of each Debt Security so affected which
would, among other things, (i) change the maturity of the principal of, or of
any installment of interest, or premium, if any, on, any Debt Security issued
pursuant to such Indenture, or reduce the principal amount thereof or any
premium thereon, or change the method of calculation of interest or the
currency of payment of principal or interest, or premium, if any, on, or
reduce the minimum rate of interest thereon, or impair the right to institute
suit for the enforcement of any such payment on or with respect to any such
Debt Security, or reduce the amount of principal of an Original Issue Discount
Security that would be due and payable upon an acceleration of the maturity
thereof; or (ii) reduce the above stated percentage in principal amount of
outstanding Debt Securities required to modify or alter the Indenture.

CONSOLIDATION, MERGER OR SALE OF ASSETS

The Indenture provides that Hibernia may, without the consent of the holders
of any of the Debt Securities outstanding under the Indenture, consolidate
with, merge into or transfer its assets substantially as an entirety to any
person, provided that (i) any such successor assumes Hibernia's obligations on
the applicable Debt Securities and under the Indenture, (ii) after giving
effect thereto, no Default in the Debt Securities shall have happened and be
continuing and (iii) certain other conditions under the Indenture are met.
Accordingly, any such consolidation, merger or transfer of assets
substantially as an entirety, which meets the conditions described above,
would not create any Default which would entitle holders of the Debt
Securities, or the Trustee on their behalf, to take any of the actions
described below under "Events of Default, Defaults, Waivers, etc."

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LIMITED RIGHTS OF ACCELERATION

Unless otherwise specified in the Prospectus Supplement relating to any
series of Debt Securities, payment of principal of the Debt Securities may be
accelerated only in case of the bankruptcy or reorganization of Hibernia.
There is no right of acceleration in the case of a default in the payment of
principal of, premium, if any, or interest on the Debt Securities or the
performance of any other covenant of Hibernia in the Indenture.

REGISTRATION AND TRANSFER

Debt Securities (other than a Global Security) will be issued only in fully
registered form without coupons and, unless otherwise indicated in the
applicable Prospectus Supplement, in denominations of $1,000 or integral
multiples thereof. Debt Securities (other than a Global Security) may be
presented for transfer (with the form of transfer endorsed thereon duly
executed) or exchanged for other Debt Securities of the same series at the
office of the Note Registrar specified according to the terms of the
Indenture. With respect to Debt Securities having the City of New York as a
place of payment, Hibernia will appoint a Note Registrar or Co-Note Registrar
located in the City of New York for such transfer or exchange. Such transfer
or exchange shall be made without service charge, but Hibernia may require
payment of any taxes or other governmental charges as described in the
Indenture.

GLOBAL SECURITIES

The Debt Securities of a series may be issued in whole or in part in the
form of one or more Global Securities that will be deposited with, or on
behalf of, a depositary (the "Debt Depositary") identified in the Prospectus
Supplement relating to such series. Global Securities may be issued in either
registered or bearer form and in either temporary or permanent form. Unless
and until it is exchanged in whole or in part for the individual Debt
Securities represented thereby, a Global Security may not be transferred
except as a whole by the Debt Depositary for such Global Security to a nominee
of such Debt Depositary or by a nominee of such Debt Depositary to such Debt
Depositary or another nominee of such Debt Depositary or by the Debt
Depositary or any nominee to a successor Debt Depositary or any nominee of
such successor.

The specific terms of the depositary arrangement with respect to a series of
Debt Securities in the form of one or more Global Securities will be described
in the Prospectus Supplement relating to such series. Hibernia anticipates
that the following provisions will generally apply to depositary arrangements.

Upon the issuance of a Global Security, the Debt Depositary for such Global
Security or its nominee will credit, on its book-entry registration and
transfer system, the respective principal amounts of the individual Debt
Securities represented by such Global Security to the accounts of persons that
have accounts with such Debt Depositary ("participants"). Such accounts shall
be designated by the underwriters or agents with respect to such Debt
Securities. Ownership of beneficial interests in a Global Security will be
limited to participants or persons that may hold interests through
participants. Ownership of beneficial interests in such Global Security will
be shown on, and the transfer of that ownership will be effected only through,
records maintained by the applicable Debt Depositary or its nominee (with
respect to interests of participants) and the records of participants (with
respect to interests of persons other than participants). The laws of some
states require that certain purchasers of securities take physical delivery of
such securities in definitive form. Such limits and such laws may impair the
ability to transfer beneficial interests in a Global Security.

So long as the Debt Depositary for a Global Security, or its nominee, is the
registered owner of such Global Security, such Debt Depositary or such
nominee, as the case may be, will be considered the sole owner or holder of
the Debt Securities represented by such Global Security for all purposes under
the Indenture. Except as provided below, owners of beneficial interests in a
Global Security will not be entitled to have any of the individual Debt
Securities of the series represented by such Global Security registered in
their names, will not receive or be entitled to receive physical delivery of
any such Debt Securities of such series in definitive form and will not be
considered the owners or holders thereof under the Indenture.

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Payments of principal of, premium, if any, and interest, if any, on
individual Debt Securities represented by a Global Security registered in the
name of a Debt Depositary or its nominee will be made to the Debt Depositary
or its nominee, as the case may be, as the registered owner of the Global
Security representing such Debt Securities. Neither Hibernia, the Trustee, the
Paying Agent, nor the Note Registrar will have any responsibility or liability
for any aspect of the records relating to or payments made on account of
beneficial ownership interests of the Global Security for such Debt Securities
or for maintaining, supervising or reviewing any records relating to such
beneficial ownership interests.

Hibernia expects that the Debt Depositary for a series of Debt Securities or
its nominee, upon receipt of any payment of principal, premium or interest in
respect of a permanent Global Security representing any of such Debt
Securities will credit participants' accounts immediately with payments in
amounts proportionate to their respective beneficial interests in the
principal amount of such Global Security for such Debt Securities as shown on
the records of such Debt Depositary or its nominee. Hibernia also expects that
payments by participants to owners of beneficial interests in such Global
Security held through such participants will be governed by standing
instructions and customary practices, as is now the case with securities held
for the accounts of customers in bearer form or registered in "street name."
Such payments will be the responsibility of such participants.

If the Debt Depositary for a series of Debt Securities is at any time
unwilling, unable or ineligible to continue as depositary and a successor
depositary is not appointed by Hibernia within 90 days, Hibernia will issue
individual Debt Securities of such series in definitive form in exchange for
the Global Security representing such series of Debt Securities. In addition,
Hibernia may at any time and in its sole discretion, subject to any
limitations described in the Prospectus Supplement relating to such Debt
Securities, determine not to have any Debt Securities of a series represented
by one or more Global Securities and, in such event, will issue individual
Debt Securities of such series in definitive form in exchange for the Global
Security or Securities representing such series of Debt Securities. Further,
if Hibernia so specifies with respect to the Debt Securities of a series, an
owner of a beneficial interest in a Global Security representing Debt
Securities of such series may, on terms acceptable to Hibernia, the Trustee
and the Debt Depositary for such Global Security, receive Debt Securities of
such series in definitive form in exchange for such beneficial interests,
subject to any limitations described in the Prospectus Supplement relating to
such Debt Securities. In any such instance, an owner of a beneficial interest
in a Global Security will be entitled to physical delivery in definitive form
of Debt Securities of the series represented by such Global Security equal in
principal amount to such beneficial interest and to have such Debt Securities
registered in its name. Debt Securities of such series so issued in definitive
form will be issued in denominations, unless otherwise specified by Hibernia,
of $1,000 and integral multiples thereof.

PAYMENT AND PAYING AGENTS

Unless otherwise indicated in an applicable Prospectus Supplement, payment
of principal of, premium, if any, and any interest on the Debt Securities will
be made at the office of such Paying Agent or Paying Agents as Hibernia may
designate from time to time, except that, at the option of Hibernia, payment
of any interest may be made (i) by check mailed to the address of the person
entitled thereto as such address shall appear in the applicable Note Register
or (ii) by wire transfer to an account maintained by the person entitled
thereto as specified in the applicable Note Register. Unless otherwise
indicated in an applicable Prospectus Supplement, payment of any installment
of interest on Securities will be made to the person in whose name such Debt
Security is registered at the close of business on the Regular Record Date for
such payment.

SATISFACTION AND DISCHARGE; DEFEASANCE

The Indenture shall cease to be effective and the Trustee shall acknowledge
satisfaction and discharge of the Indenture when all of the Debt Securities
have been paid in full and delivered to the Trustee for cancellation.
Furthermore, the Indenture shall cease to be effective (except as to certain
surviving rights of registration or transfer, the obligation to hold deposited
funds in trust, and the rights to receive amounts due on the Debt Securities
outstanding) when Hibernia has deposited with the Trustee amounts sufficient
to pay and discharge

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the entire remaining indebtedness of Hibernia on Debt Securities that either
have become due and payable or will become due and payable within one year
from such deposit.

GOVERNING LAW

The Indenture and the Debt Securities shall be construed in accordance with
and governed by the laws of the State of New York.

THE TRUSTEE

The Trustee shall be a bank selected by Hibernia, which bank shall have
minimum amounts of assets and unrestricted retained earnings which shall be
specified by Hibernia. The name of the specific bank chosen to act as Trustee
will be set forth in the Prospectus Supplement issued with respect to any Debt
Securities.

DESCRIPTION OF COMMON STOCK

Hibernia has authorized 200,000,000 shares of Common Stock, no par value, of
which 122,109,986 were outstanding on June 30, 1996. The following description
of such Common Stock is qualified in its entirety by reference to Hibernia's
Articles and By-laws and to the applicable provisions of the Louisiana
Business Corporation Law.

Shares of Common Stock of Hibernia may be issued from time to time, in such
amounts and proportion and for such consideration as may be fixed by the Board
of Directors of Hibernia. No holder of Common Stock has any preemptive or
preferential rights to purchase or to subscribe for any shares of capital
stock or other securities which may be issued by Hibernia. The Common Stock
has no redemptive or sinking fund provisions applicable thereto. Common Stock
does not have any conversion rights. The rights of holders of Common Stock
will be subject to, and may be adversely affected by, the rights of holders of
any Preferred Stock that may be issued in the future.

VOTING RIGHTS

Holders of Common Stock are entitled to one vote per share on all matters to
be voted on by the shareholders of Hibernia. Holders of Common Stock do not
have cumulative voting rights. As a result, the holders of more than 50% of
the Common Stock may elect all of the directors of Hibernia.

DIVIDEND RIGHTS

Holders of outstanding shares of Common Stock are entitled to receive such
dividends, if any, as may be declared by the Board of Directors of Hibernia,
in its discretion, out of funds legally available therefor, payable in cash,
stock or other property as determined by the Board of Directors. The Company
is also subject to certain regulatory restrictions on the payment of
dividends. See "Supervision and Regulation -- Payment of Dividends". The
payment of dividends on the Common Stock is subject to the prior payment of
dividends on any shares of the Preferred Stock outstanding.

LIQUIDATION RIGHTS

In the event of the liquidation, dissolution or winding up of Hibernia,
whether voluntary or involuntary, the holders of Common Stock are entitled to
receive pro rata any assets distributable to shareholders in respect of their
shares upon the occurrence of such events, subject to the prior rights of
creditors of the Company and holders of any outstanding shares of Preferred
Stock.

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NO PREEMPTIVE RIGHTS

Holders of Common Stock do not have the right to subscribe to any additional
shares of capital stock that may be issued by Hibernia.

STOCK EXCHANGE LISTING

Hibernia's Common Stock is listed and traded on the NYSE under the symbol
HIB.

CERTAIN BYLAW PROVISIONS

Hibernia's Bylaws contain certain provisions, summarized below, that could
have the effect of delaying, deterring or preventing a merger, tender offer or
other takeover attempt of Hibernia. This summary is subject to, and qualified
in its entirety by, the provisions of Hibernia's Bylaws, as well as the
provisions of any applicable laws.

The board of directors is divided into three classes of directors serving
staggered three-year terms. The directors may be removed by the vote of the
holders of a majority of the shares entitled to vote at an election of
directors for cause or by two-thirds of the total voting power without cause
or by the vote of a majority of the directors with cause or in certain other
limited circumstances (e.g. bankruptcy, incapacity, etc.). The total number of
directors and the number of directors constituting each class of directors
(with each of the three classes being required to be equal as nearly as
possible) can be fixed or changed, from time to time, by the board of
directors. In addition, provisions in Hibernia's Bylaws require shareholders
to give advance notice of proposals to be presented at meetings of the
shareholders, including director nominations.

PLAN OF DISTRIBUTION

The distribution of the Offered Securities may be effected from time to time
in one or more distributions or transactions at a fixed price or prices (which
may be changed from time to time), at market prices prevailing at the time of
sale, at prices related to such prevailing market prices or at negotiated
prices. Each Prospectus Supplement will describe the specific method of
distribution of the Offered Securities offered in such Prospectus Supplement.

Hibernia may sell Securities directly, through agents designated from time
to time, through underwriting syndicates led by one or more managing
underwriters, which may include Morgan Stanley & Co. Incorporated, or through
one or more underwriters acting alone. Each Prospectus Supplement will set
forth the terms of the Offered Securities to which such Prospectus Supplement
relates, including the name or names of any underwriters or agents with whom
Hibernia has entered into arrangements with respect to the sale of such
Offered Securities, the public offering or purchase price of such Offered
Securities, and the net proceeds to Hibernia from such sale, any underwriting
discounts and other items constituting compensation to the underwriters, any
discounts and commissions allowed or paid to dealers, if any, any commissions
allowed or paid to agents, and the securities exchange or exchanges, if any,
on which such Offered Securities will be listed. Dealer trading may take place
in certain of the Offered Securities, including Offered Securities not listed
on any securities exchange.

Offered Securities may be purchased to be reoffered to the public through
underwriting syndicates led by one or more managing underwriters, which may
include Morgan Stanley & Co. Incorporated, or through one or more underwriters
acting alone. The underwriter or underwriters with respect to each
underwritten offering of Offered Securities will be named in the Prospectus
Supplement relating to such offering and, if an underwriting syndicate is
used, the managing underwriter or underwriters will be set forth on the cover
page of such Prospectus Supplement. Unless otherwise set forth in the
applicable Prospectus Supplement, the obligations of the underwriters to
purchase the Offered Securities will be subject to certain conditions
precedent and each of the underwriters with respect to a sale of Offered
Securities will be obligated to purchase all of its Offered

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Securities if any are purchased. Any public offering price and/or any
discounts or concession allowed or reallowed or paid to dealers may be changed
from time to time.

Offered Securities may be offered and sold by Hibernia through agents
designated by Hibernia from time to time. Any agent involved in the offer and
sale of any Offered Securities will be named, and any commissions payable by
Hibernia to such agent will be set forth, in the Prospectus Supplement
relating to such offering. Unless otherwise indicated in such Prospectus
Supplement, any such agent will be acting on a best efforts basis for the
period of its appointment.

Offers to purchase Offered Securities may be solicited directly by Hibernia
and sales thereof may be made by Hibernia directly to institutional investors
or others who may be deemed to be underwriters within the meaning of the
Securities Act with respect to any resale thereof. The terms of any such sales
will be described in the Prospectus Supplement relating thereto. The
anticipated place and time of delivery of Offered Securities will be set forth
in the applicable Prospectus Supplement.

Any underwriter or agent participating in the distribution of the Offered
Securities may be deemed to be an underwriter, as that term is defined in the
Securities Act, of the Offered Securities so offered and sold and any
discounts or commissions received by them from Hibernia and any profit
realized by them on the sale or resale of the Offered Securities may be deemed
to be underwriting discounts and commissions under the Securities Act.

Underwriters and agents may be entitled, under agreements entered into with
Hibernia, to indemnification by Hibernia against certain civil liabilities,
including liabilities under the Securities Act, or to contribution with
respect to payments which such underwriters or agents may be required to make
in respect thereof. Certain of any such underwriters and agents, including
their associates, may be customers of, engage in transactions with and perform
services for, Hibernia and its subsidiaries in the ordinary course of
business.

LEGAL MATTERS

The validity of the Offered Securities will be passed upon for Hibernia by
Phelps Dunbar, L.L.P., New Orleans, Louisiana, and certain legal matters
relating to the Offered Securities will be passed upon for the underwriters by
counsel named in the Prospectus Supplement.

EXPERTS

The consolidated financial statements of Hibernia Corporation incorporated
by reference in Hibernia Corporation's Annual Report (Form 10-K) for the year
ended December 31, 1995, have been audited by Ernst & Young LLP, independent
auditors, as set forth in their report thereon incorporated by reference
therein and incorporated herein by reference. Such consolidated financial
statements are incorporated herein by reference in reliance upon such report
given upon the authority of such firm as experts in accounting and auditing.

The consolidated financial statements of CM Bank Holding Company and
Subsidiary for the year ended December 31, 1995 incorporated by reference in
this Prospectus by reference from Hibernia's Form 8-K dated August 29, 1996,
have been audited by Leon C. Theriot & Associates, independent auditors, as
stated in their report, which report is incorporated herein by reference. Such
consolidated financial statements are incorporated herein by reference in
reliance upon such report given upon the authority of such firm as experts in
accounting and auditing.