As filed with the Securities and Exchange Commission on December 2, 1997.
Registration No. 333-__________
SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
FORM S-4
REGISTRATION STATEMENT UNDER THE SECURITIES ACT OF 1933
Hibernia Corporation
(Exact name of Registrant as specified in its charter)
LOUISIANA 72-0724532
(State or other (I.R.S. Employer
jurisdiction of Identification Number)
incorporation
or organization)
Hibernia Corporation
313 Carondelet Street
New Orleans, Louisiana 70130
(504) 533-5552
(Address, including zip code, and telephone number,
including area code, of Registrant's principal executive offices)
Gary L. Ryan, Esq.
Senior Vice President and Corporate Counsel
Hibernia Corporation
313 Carondelet Street
New Orleans, Louisiana 70130
(504) 533-5560
(Name, address, including zip code, and telephone number,
including area code, of agent for service)
Copies to:
Patricia C. Meringer Carl J. Chaney, Esq.
Senior Vice President and Corporate Counsel Watkins Ludlam & Stennis, P.A.
Hibernia Corporation 633 North State Street
225 Baronne Street, 11th Floor P. O. Box 427
New Orleans, Louisiana 70112 Jackson, Mississippi 39205-0427
(504) 533-2486 (601) 949-4900
<PAGE>
APPROXIMATE DATE OF COMMENCEMENT OF PROPOSED SALE TO THE PUBLIC:
As soon as practicable after the effective date of this Registration Statement
If the securities being registered on this form are being offered in
connection with the formation of a holding company and there is compliance with
General Instruction G, check the following box. _____
/_____/
CALCULATION OF REGISTRATION FEE
________________________________________________________________________________
Title of each Amount to be Proposed Proposed Amount of
class of securities registered maximum maximum registration
to be registered offering aggregate fee (1)
price per offering
unit price (1)
________________________________________________________________________________
Class A Common Stock,
no par value 13,317,236 $6.25 $83,232,725 $25,222
shares
________________________________________________________________________________
(1)Based upon the book value of the securities to be received by the
registrant or cancelled in the exchange or transaction as of September 30, 1997,
and estimated solely for the purpose of calculating the registration fee in
accordance with Rule 457(f)(2) of the Securities Act of 1933, as amended.
The Registrant hereby amends this Registration Statement on such date
or dates as may be necessary to delay its effective date until the Registrant
shall file a further amendment which specifically states that this Registration
Statement shall thereafter become effective in accordance with Section 8(a) of
the Securities Act of 1933 or until the Registration Statement shall become
effective on such date as the Commission, acting pursuant to said Section 8(a),
may determine.
<PAGE>
ARGENTBANK
203 W. Second Street
Thibodaux, Louisiana 70301
December ___, 1997
Dear Shareholder:
You are cordially invited to attend a Special Meeting (the "Meeting") of
Shareholders of ArgentBank, a Louisiana state non-member bank ("ArgentBank"), to
be held at 400 Green Street, Thibodaux, Louisiana on __________, January ____,
1998 at 3:00 p.m., local time.
At the Meeting, you will be asked to consider and vote upon a proposal
to approve an Agreement and Plan of Merger, and related Bank Merger Agreement
(collectively, the "Merger Agreements"), pursuant to which among other things,
(a) ArgentBank will merge (the "Merger") with and into Hibernia National Bank
("HNB"), and (b) upon consummation of the Merger, each shareholder of ArgentBank
will receive approximately 2.04 shares of Class A Common Stock of Hibernia
Corporation ("Hibernia"), the parent company of HNB, as more fully described in
the attached Proxy Statement/Prospectus. Based upon the last reported sales
price of Hibernia Common Stock as listed on the New York Stock Exchange on
December __, 1997, the value of 2.04 shares of Hibernia Common Stock is $_____.
Unless you dissent from the Merger, your ArgentBank Common Stock will be
converted into Hibernia Common Stock on a tax-free basis except to the extent
that you receive cash for fractional parts of shares as more fully explained in
the accompanying Proxy Statement/Prospectus.
Details of the proposed Merger and information about ArgentBank and
Hibernia are set forth in the accompanying Proxy Statement/Prospectus, which you
should read carefully. Only those shareholders of record at the close of
business on December ____, 1997 will be entitled to notice of and to vote at the
Meeting.
Your Board of Directors has unanimously approved the Merger Agreements
and recommends that you vote FOR approval of the Merger Agreements.
The Board believes, based on its own analysis and the opinion of
ArgentBank's financial advisor (all of which are described in the accompanying
Proxy Statement/Prospectus), that the proposed Merger is in the best interests
of ArgentBank's shareholders. As a result of the Merger, ArgentBank shareholders
will become shareholders of Hibernia, a New York Stock Exchange company. With
its greater financial resources and ability to offer a broad range of financial
services, the Board believes that Hibernia is better able to compete in the
current market environment. We believe the Merger presents a wonderful
opportunity for our shareholders, and the Board accordingly urges all ArgentBank
shareholders to vote in favor of this transaction.
Accompanying this letter, you will find a Notice of Special Meeting of
Shareholders, a Proxy Statement/Prospectus relating to the Meeting and a Proxy
Card. The ArgentBank Board of Directors urges that you vote "FOR" these items by
signing, dating and returning the enclosed form of proxy promptly, whether or
not you plan to attend the Meeting. The prompt return of your signed proxy,
regardless of the number of shares you hold, will assist ArgentBank in
minimizing the expense of soliciting proxies. Your proxy may be revoked at any
time prior to the vote at the Meeting by notice to the Cashier of ArgentBank or
by execution and delivery of a later dated proxy. If you attend the Meeting you
may, if you wish, revoke your proxy and vote in person on all matters brought
before the Meeting.
Very truly yours,
Randall E. Howard
President
<PAGE>
NOTICE OF SPECIAL MEETING OF SHAREHOLDERS
TO BE HELD January ___, 1998
To the Shareholders of ArgentBank:
Notice is hereby given that a Special Meeting of the Shareholders of
ArgentBank, a state nonmember bank ("ArgentBank"), is to be held on __________
January ___, 1998, at 3:00 p.m., local time, at ArgentBank, 400 Green Street,
Thibodaux, Louisiana (the "Meeting"):
1. To consider and vote upon a proposal to approve an Agreement
and Plan of Merger among ArgentBank, Hibernia Corporation ("Hibernia") and
Hibernia National Bank ("HNB") dated as of July 15, 1997, and the related Bank
Merger Agreement (collectively, the "Agreement"), and the transactions
contemplated thereby pursuant to which (i) ArgentBank will be merged with and
into HNB (the "Merger") and (ii) upon consummation of the Merger, each
outstanding share of Common Stock of ArgentBank will be converted into
approximately 2.04 shares of Class A Common Stock of Hibernia (subject to
adjustment under certain circumstances as set forth in the Agreement and
described more fully in the accompanying Proxy Statement/Prospectus), and cash
in lieu of issuing any fractional shares which may result from this conversion;
and
2. To address such other business as may properly come before
the Meeting (including any motion to adjourn to a later date to permit further
solicitation of proxies if necessary) or before any adjournment thereof.
The Board of Directors has fixed the close of business on December ___,
1997 as the record date for determining shareholders entitled to receive notice
of, and to vote at, the Meeting or any adjournment thereof. Only holders of
Common Stock of ArgentBank on that date are entitled to vote on the matters to
be presented at the Meeting. As more fully described in the accompanying Proxy
Statement/Prospectus, dissenting holders of Common Stock of ArgentBank who
comply with the procedural requirements of 12 U.S.C. 215a attached as Appendix D
to the Proxy Statement/Prospectus will be entitled to receive payment of the
cash value of their shares.
A majority of the shares outstanding constitute a quorum. The Merger is
fully described in the Proxy Statement/Prospectus, and the appendices thereto,
accompanying this notice. Approval of the Agreement and the Merger requires the
affirmative vote of a majority of the outstanding shares of ArgentBank Common
Stock.
The Board of Directors unanimously recommends that holders of ArgentBank
Common Stock vote "FOR" the approval of the Agreement and the Merger.
YOUR VOTE IS IMPORTANT REGARDLESS OF THE NUMBER OF SHARES OF COMMON
STOCK OF ARGENTBANK THAT YOU MAY OWN. EVEN IF YOU PLAN TO ATTEND THE MEETING,
PLEASE MARK, DATE AND SIGN THE ENCLOSED PROXY CARD AND RETURN IT PROMPTLY IN THE
ENCLOSED, POSTAGE-PAID ENVELOPE. YOUR PROXY MAY BE REVOKED AT ANY TIME PRIOR TO
THE VOTE AT THE MEETING BY NOTICE TO THE CASHIER OF ARGENTBANK OR BY EXECUTION
AND DELIVERY OF A LATER-DATED PROXY. IF YOU ATTEND THE MEETING, YOU MAY WITHDRAW
YOUR PROXY AND VOTE IN PERSON.
BY ORDER OF THE BOARD OF DIRECTORS
William B. Gautreaux
Executive Vice President, CFO and Cashier
Thibodaux, Louisiana
____________ ___, 1997
[LOGO] [LOGO]
PROSPECTUS PROXY STATEMENT
HIBERNIA CORPORATION ARGENTBANK
Class A Common Stock
No Par Value
Special Meeting of Shareholders
to be held on January ___, 1998
This Proxy Statement/Prospectus is being furnished to the shareholders of
ArgentBank, a Louisiana state nonmember bank ("ArgentBank"), in connection with
the solicitation of proxies by ArgentBank's Board of Directors for use at a
special meeting of ArgentBank shareholders to be held at 3:00 p.m., Central
time, on ___________, January __, 1998, at 400 Green Street, Thibodaux,
Louisiana, and at any adjournment thereof (the "Meeting").
At the Meeting, the shareholders of ArgentBank will consider and vote upon a
proposal to approve an Agreement and Plan of Merger, dated as of July 15, 1997,
by and among ArgentBank, Hibernia Corporation ("Hibernia") and Hibernia National
Bank ("HNB"), and the related Merger Agreement (collectively referred to as the
"Agreement"), pursuant to which ArgentBank will merge with and into HNB (the
"Merger"). Upon consummation of the Merger, each outstanding share of Common
Stock of ArgentBank, $.10 par value ("ArgentBank Common Stock") will be
converted into approximately 2.04 shares of Class A Common Stock of Hibernia, no
par value ("Hibernia Common Stock"), subject to adjustment in certain
circumstances set forth in the Agreement as more fully described herein. See
"The Merger--Consideration to be Received in the Merger." Hibernia will pay cash
in lieu of issuing any fractional shares resulting from this conversion. A copy
of the Agreement is attached as Appendix A to this Proxy Statement/Prospectus.
See "The Merger."
This document also constitutes a prospectus of Hibernia with respect to
the Hibernia Common Stock to be issued to the shareholders of ArgentBank
pursuant to the terms of the Merger. The outstanding shares of Hibernia Common
Stock are, and the shares offered hereby will be, listed on the New York Stock
Exchange, Inc. (the "NYSE"). The last reported sale price of Hibernia Common
Stock on the NYSE on December __ __, 1997 was $__________ per share.
This Proxy Statement/Prospectus and the accompanying Proxy Card are
first being mailed to ArgentBank shareholders on or about December ___, 1997.
THE SHARES OF HIBERNIA COMMON STOCK OFFERED HEREBY ARE NOT SAVINGS
ACCOUNTS, DEPOSITS OR OTHER OBLIGATIONS OF A BANK OR SAVINGS ASSOCIATION
AND ARE NOT INSURED BY THE FEDERAL DEPOSIT INSURANCE CORPORATION OR ANY
OTHER GOVERNMENTAL AGENCY.
THESE SECURITIES HAVE NOT BEEN APPROVED OR DISAPPROVED BY THE SECURITIES
AND EXCHANGE COMMISSION, THE FEDERAL DEPOSIT INSURANCE CORPORATION OR
ANY STATE SECURITIES COMMISSION, NOR HAS THE COMMISSION OR ANY STATE
SECURITIES COMMISSION PASSED UPON THE ACCURACY OR ADEQUACY OF THIS PROXY
STATEMENT/PROSPECTUS. ANY REPRESENTATION TO THE CONTRARY IS A CRIMINAL
OFFENSE.
The date of this Proxy Statement/Prospectus is December ___, 1997.
<PAGE>
AVAILABLE INFORMATION
Hibernia and ArgentBank are subject to the informational requirements of
the Securities Exchange Act of 1934, as amended (the "Exchange Act"), and in
accordance therewith, Hibernia and ArgentBank file reports, proxy statements and
other information with the Securities and Exchange Commission (the "Commission")
and the Federal Deposit Insurance Corporation (the "FDIC"), respectively.
With respect to Hibernia, such reports, proxy statements and other
information can be inspected at, and copies thereof may be obtained at
prescribed rates from, the public reference facilities maintained by the
Commission at Room 1024, 450 Fifth Street, N.W., Washington, D.C. 20549, and at
the Commission's Regional Offices located at 7 World Trade Center, Suite 1300,
New York, New York 10048 and Northwestern Atrium Center, 500 West Madison
Street, Suite 1400, Chicago, Illinois 60621-2511. The Commission maintains an
internet Web Site that contains reports, proxy and information statements and
other information regarding registrants that file electronically with the
Commission, and the address of that site is http://www.sec.gov.
Hibernia Common Stock is listed for trading on the NYSE and any reports,
proxy statements and other information concerning Hibernia may be inspected at
its offices which are located at 20 Broad Street, New York, New York 10005.
In addition to the above, Hibernia news releases, product-and-service
information and other useful data can be accessed through Hibernia's internet
Web Site at http://www.hiberniabank.com.
With respect to ArgentBank, such reports, proxy statements and other
information may be accessed at prescribed rates from the FDIC's offices at 550
17th Street, N.W., Washington, D.C.
20428.
Hibernia has filed with the Commission a Registration Statement on Form
S-4 (together with all amendments and exhibits thereto, the "Registration
Statement") under the Securities Act of 1933, as amended (the "Securities Act")
with respect to the securities of Hibernia that may be issued in connection with
the transaction described herein. This Proxy Statement/Prospectus does not
contain all of the information set forth in the Registration Statement or the
exhibits thereto. For further information with respect to Hibernia and the
Hibernia Common Stock offered hereby, reference is hereby made to such
Registration Statement and the exhibits thereto. Statements contained in this
Proxy Statement/Prospectus concerning the provisions of certain documents are
not necessarily complete and, in each instance, reference is made to the copy of
the document filed as an exhibit to the Registration Statement, each such
statement being qualified in all respects by such reference. Copies of all or
any part of the Registration Statement, including exhibits thereto, may be
obtained at the Commission's web site, at the offices of the Commission and the
NYSE, upon payment of the prescribed fees.
All information contained in this Proxy Statement/Prospectus relating to
Hibernia and its subsidiaries has been supplied by Hibernia, and all information
relating to ArgentBank has been supplied by ArgentBank.
INCORPORATION BY REFERENCE
This Proxy Statement/Prospectus incorporates documents by reference
which are not presented herein or delivered herewith. These documents are
available, without charge, to any person receiving this Proxy
Statement/Prospectus, including beneficial owners of ArgentBank Common Stock.
The request may be written or oral and should be directed to Hibernia
Corporation, 313 Carondelet Street, New Orleans, Louisiana 70130, Attention:
Assistant Secretary, telephone number (504) 533-3411. To ensure timely delivery
of the documents, any request should be made before January __, 1998.
The following documents, or the indicated portions thereof, are hereby
incorporated by reference into this Proxy Statement/Prospectus:
(1) Hibernia's Annual Report on Form 10-K for the year ended December
31, 1996;
(2) Hibernia's Quarterly Reports on Form 10-Q for the fiscal quarters
ended March 31, 1997, June 30, 1997 and September 30, 1997;
(3) Hibernia's definitive Proxy Statement dated March 19, 1997 relating
to its 1997 Annual Meeting of Shareholders held on April 29, 1997, except the
information contained under the headings "Executive Compensation -- Report of
the Executive Compensation Committee" and "-- Stock Performance Graph", which
are expressly excluded from incorporation in this Registration Statement;
(4) The Description of Capital Stock included in its current report on
Form 8-K dated November 2, 1994;
(5) Hibernia's current reports on Form 8-K (including exhibits) filed
July 2, July 16, July 28, September 22, and October 27, 1997;
(6) All other reports subsequently filed by Hibernia with the Commission
pursuant to Sections 13(a), 13(c), 14 or 15(d) of the Exchange Act after the
date of this Proxy Statement/Prospectus and prior to the Meeting shall be deemed
to be incorporated by reference from the date such documents are filed, except
the information contained in any proxy statement under the headings "Executive
Compensation -- Report of the Executive Compensation Committee" and "-- Stock
Performance Graph", which are 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 the purposes of this Proxy Statement/Prospectus to the extent that a
statement in this Proxy Statement/Prospectus, or any subsequently filed document
that is also incorporated by reference herein, modifies or supersedes such
statement. Any statement so modified or superseded shall not be deemed, except
as so modified or superseded, to constitute a part of this Proxy
Statement/Prospectus.
No person is authorized to give any information or to make any
representations other than those contained herein and, if given or made, such
information or representations may not be relied upon as having been authorized.
This document does not constitute an offer or solicitation by anyone in any
jurisdiction in which such offer or solicitation is not authorized or in which
the person making such offer or solicitation is not qualified to do so or to any
person to whom it is unlawful to make such offer or solicitation. Neither the
delivery of this document nor any distribution of securities made hereunder
shall under any circumstances create an implication that there has been no
change in the affairs of Hibernia or ArgentBank since the date hereof or that
the information herein is correct as of any time subsequent to the date hereof.
TABLE OF CONTENTS
Page
SUMMARY i
MEETING INFORMATION 1
Solicitation and Revocation of Proxies 1
Vote Required 1
Recommendation 2
THE MERGER 2
Consideration to be Received in the Merger 2
Conversion of Shares 3
Surrender and Exchange of Certificates 4
Background of and Reasons for the Merger 4
The Stock Option Agreement 6
Opinion of Financial Advisor 7
Representations and Warranties; Conditions to the
Merger; Waiver 9
Regulatory Approvals 9
Business Pending the Merger 10
Effective Date of the Merger; Termination 10
Management and Operations After the Merger 11
Comparison of Rights of Shareholders 12
Interests of Certain Persons in the Merger 15
Employee Benefits 16
Expenses 16
Material Tax Consequences 17
Resale of Hibernia Common Stock 18
Accounting Treatment 19
RIGHTS OF DISSENTING SHAREHOLDERS 19
PRO FORMA FINANCIAL INFORMATION 21
CERTAIN INFORMATION ABOUT HIBERNIA 22
Supervision and Regulation 22
Merger Activity 23
CERTAIN INFORMATION ABOUT ARGENTBANK 24
General 24
Business 24
Competition 25
Seasonality of Business and Customer Concentration 25
Employees 25
Properties 26
Legal Proceedings 26
Stock Prices and Dividends 26
Securities Ownership of Principal
Shareholders and Management 28
VALIDITY OF SHARES 47
EXPERTS 47
OTHER MATTERS 47
INDEX TO FINANCIAL STATEMENTS OF ARGENTBANK F-1
Appendix A - Agreement and Plan of Merger A-1
Appendix B - Fairness Opinion of Chase Securities Inc. B-1
Appendix C - Form of Tax Opinion of Watkins Ludlam
& Stennis, P.A. C-1
Appendix D - Selected Provisions of Federal
Law Relating to the Rights of
Dissenting Shareholders D-1
<PAGE>
SUMMARY
The following is a summary of certain information contained elsewhere in
this Proxy Statement/Prospectus. This summary is not intended to be a complete
explanation of the matters covered in this Proxy Statement/Prospectus and is
qualified in its entirety by reference to the more detailed information
contained elsewhere in this Proxy Statement/Prospectus, the Appendices hereto
and the documents incorporated herein by reference, all of which shareholders
are urged to read carefully prior to the Meeting.
The Parties
Hibernia and HNB. Hibernia is a Louisiana corporation registered under the
Bank Holding Company Act of 1956, as amended (the "BHCA"). As of September 30,
1997, Hibernia had total consolidated assets of approximately $10.1 billion and
shareholders' equity of approximately $1 billion and was based on total assets,
the largest bank holding company headquartered in Louisiana. Hibernia currently
has two banking subsidiaries: (i) Hibernia National Bank ("HNB"), a national
banking association that provides retail and commercial banking services through
approximately 202 branches throughout Louisiana and that was ranked, on the
basis of total assets, as the largest bank headquartered in Louisiana, and (ii)
Hibernia National Bank of Texas ("HNBT"), a national banking association that
provides retail and commercial banking services through 12 banking offices in
four Texas counties. See "Certain Information about Hibernia," "Available
Information" and "Incorporation by Reference."
From time to time Hibernia investigates and holds discussions and
negotiations in connection with possible transactions with other banks and
financial institutions. On August 31, 1997 Hibernia consummated the acquisition
of Executive Bancshares, Inc. in northeast Texas. On November 7, 1997, Hibernia
consummated the acquisition of Unicorp Bancshares-Texas, Inc. ("Unicorp") in
southeast Texas. Hibernia has also executed definitive merger agreements with
Northwest Bancshares of Louisiana, Inc. ("Northwest") and Firstshares of Texas,
Inc. in northeast Texas. The proposed transactions with Northwest and
Firstshares are subject to various conditions, including applicable regulatory
approvals. See "Certain Information About Hibernia--Merger Activity." Although
additional transactions may be entered into before or after the Merger, there
can be no assurance as to when or if, or the terms upon which, any such
transactions may be pursued or consummated.
The principal executive offices of Hibernia are located at 313
Carondelet Street, New Orleans, Louisiana 70130, and its telephone number is
(504) 533-5532.
<PAGE>
Selected Fianacial Data of Hibernia
The following table sets forth certain consolidated financial
information for Hibernia. This information is based on the consolidated
financial statements and related notes of Hibernia contained in (i) its Annual
Report on Form 10-K for the year ended December 31, 1996 after giving effect for
the merger with Executive Bancshares, Inc. consummated on August 31, 1997, which
was accounted for as a pooling of interests, and (ii) its Quarterly Report on
Form 10-Q for September 30, 1997. See "Incorporation by Reference."
<TABLE>
<CAPTION>
HIBERNIA CORPORATION
SELECTED FINANCIAL INFORMATION
Year Ended December 31 9 Months Ended September 30
- ------------------------------------------------------------------------------------------------------------------------------------
Unaudited ($ in thousands, except per share amounts)
1996 1995 1994 1993 1992 1997 1996
- ------------------------------------------------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C> <C> <C> <C>
Net interest income ................ $ 370,326 $ 324,309 $ 304,397 $ 299,337 $ 296,654 $ 313,185 $ 268,585
Income from continuing operations .. 110,717 129,698 102,335 73,543 13,395 97,823 79,583
Per common share:
Income from continuing operations 0.85 1.01 0.79 0.57 0.18 0.72 0.62
Cash dividends .................. 0.29 0.25 0.19 0.03 - 0.24 0.21
Book value ...................... 6.58 6.06 4.98 4.66 4.01 7.08 6.34
SELECTED PERIOD-END BALANCES
Debt ............................... 53,881 36,069 23,395 41,921 42,544 106,777 20,863
Total assets ....................... 9,443,127 7,855,631 7,388,374 7,211,785 7,063,099 10,081,093 8,932,304
</TABLE>
ArgentBank. ArgentBank is a banking institution organized pursuant to
the Louisiana Banking Laws. As of September 30, 1997, ArgentBank had total
consolidated assets of approximately $758 million and shareholders' equity of
approximately $86.2 million. The authorized capital of ArgentBank consists of
16,000,000 shares of common stock with a par value of $.10 each. As of December
__, 6,527,728 shares of such authorized common stock were issued and
outstanding. ArgentBank has its main office in Thibodaux, Louisiana. ArgentBank
engages in a full range of retail and commercial banking services throughout
Southeast Louisiana, including taking deposits and extending secured and
unsecured credit. At September 30, 1997, ArgentBank had total deposits of
approximately $629.6 million.
On June 30, 1997 ArgentBank consummated the acquisition of Assumption
Bancshares, Inc. ("Assumption"). In connection with that transaction, Argentbank
paid $7,531,796 in cash and issued 664,060 shares of ArgentBank Common Stock to
the shareholders of Assumption. This transaction was accounted for as a
purchase. See "Certain Information About ArgentBank."
The executive offices of ArgentBank are located at 203 W. Second,
Thibodaux, Louisiana 70301 and its telephone number at such address is (504)
447-3722. For additional information concerning the business of ArgentBank and
its financial condition and operating results, see "Financial Statements of
ArgentBank," "Certain Information About ArgentBank" and "Selected Financial Data
of ArgentBank."
<PAGE>
Selected Financial Data of ArgentBank
The following selected financial information of ArgentBank with respect
to each year in the five-year period ended December 31, 1996 and the nine-month
periods ended September 30, 1997 and 1996 has been derived from the financial
statements of ArgentBank. The information set forth below should be read in
conjunction with ArgentBank's financial statements, the notes thereto, and
ArgentBank's Management's Discussion and Analysis of Financial Condition and
Results of Operations for the years ended December 31, 1996 and 1995 and the
nine-month periods ended September 30, 1997 and 1996 appearing elsewhere in this
Proxy Statement/Prospectus.
<TABLE>
<CAPTION>
ARGENTBANK
SELECTED FINANCIAL INFORMATION
(Unaudited)
Year Ended December 31 9 Months Ended September 30
- ------------------------------------------------------------------------------------------------------------------------------------
($ in thousands, except per share amounts)
1996 1995 1994 1993 1992 1997 1996
- ------------------------------------------------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C> <C> <C> <C>
Net interest income ................ $ 24,449 $ 23,335 $ 22,793 $ 24,501 $ 24,261 $ 21,429 $ 18,070
Income from continuing operations .. 7,738 8,074 8,002 7,530 5,602 6,208 5,810
Per common share:
Income from continuing operations 1.31 1.35 1.34 1.26 0.94 1.03 0.98
Cash dividends .................. 0.52 0.48 0.37 0.23 0.17 0.42 0.39
Book value ...................... 11.53 11.13 9.88 9.05 8.02 13.20 11.15
SELECTED PERIOD-END BALANCES
Debt ............................... - - - - - - -
Total assets ....................... 589,954 562,087 549,177 545,133 542,853 758,068 562,640
</TABLE>
<TABLE>
<CAPTION>
ARGENTBANK
QUARTERLY INCOME RESULTS
- ---------------------------------------------------------------------------------------------------
Unaudited ($ in thousands, except per share amounts)
- ---------------------------------------------------------------------------------------------------
3/31/97 6/30/97 9/30/97
- ---------------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C>
Interest income .............................. $10,858 $11,544 $14,087
Net interest income .......................... 6,552 6,754 8,123
Net income ................................... 2,082 2,153 1,973
Net income per share ......................... 0.36 0.37 0.30
- ---------------------------------------------------------------------------------------------------
3/31/96 6/30/96 9/30/96 12/31/96
- ---------------------------------------------------------------------------------------------------
Interest income ............................. $10,064 $10,255 $10,329 $10,644
Net interest income ......................... 5,985 6,042 6,043 6,379
Net income .................................. 2,150 2,042 1,618 1,928
Net income per share ........................ 0.36 0.35 0.27 0.33
- ---------------------------------------------------------------------------------------------------
3/31/95 6/30/95 9/30/95 12/31/95
- ---------------------------------------------------------------------------------------------------
Interest income ............................. $ 9,031 $ 9,360 $ 9,726 $10,052
Net interest income ......................... 5,846 5,776 5,750 5,963
Net income .................................. 1,921 2,212 2,071 1,870
Net income per share ........................ 0.32 0.37 0.35 0.31
</TABLE>
<PAGE>
Pro Forma Combined Selected Financial Data (Unaudited)
The following table sets forth certain unaudited pro forma combined
selected financial information for Hibernia, after giving effect to the merger
with Executive Bancshares, Inc. (Executive), consummated on August 31, 1997 as
discussed in Note A to the Pro Forma Combined Income Statements, and ArgentBank.
The pro forma information, which reflects the Merger and the consummated merger
with Executive using the pooling-of-interests method of accounting, is presented
for informational purposes only and should not be construed as indicative of the
actual operations that would have occurred had the mergers been consummated at
the beginning of the periods indicated or that may be obtained in the future.
See "Pro Forma Financial Information" contained elsewhere herein.
<TABLE>
<CAPTION>
PRO FORMA HIBERNIA CORPORATION*
PRO FORMA COMBINED SELECTED FINANCIAL INFORMATION
Year Ended December 31 9 Months Ended September 30
- -------------------------------------------------------------------------------------------------------------------------
Unaudited ($ in thousands, except per share amounts)
1996 1995 1994 1997 1996
- -------------------------------------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C> <C>
Net interest income ................ $ 394,775 $ 347,644 $ 327,190 $ 334,614 $ 286,655
Income from continuing operations .. 118,455 137,772 110,337 104,031 85,393
Per common share:
Income from continuing operations 0.83 0.97 0.78 0.70 0.61
Cash dividends .................. 0.29 0.25 0.19 0.24 0.21
Book value ...................... 6.44 5.96 4.93 7.02 6.21
SELECTED PERIOD-END BALANCES
Debt ............................... 53,881 36,069 23,395 106,777 20,863
Total assets ....................... 10,033,102 8,417,643 7,937,551 10,839,234 9,494,814
* Includes Hibernia Corporation and ArgentBank
</TABLE>
<PAGE>
Comparative Per Share Information (Unaudited)
The following table sets forth for Hibernia Common Stock and ArgentBank
Common Stock certain unaudited pro forma combined and unaudited pro forma
equivalent per share financial information for the nine-month periods ended
September 30, 1997 and 1996 and for the years ended December 31, 1996, 1995 and
1994. Information under the column titled "Hibernia Corporation" is based on (i)
Hibernia's Annual Report on Form 10-K for the year ended December 31, 1996,
after giving effect for the merger with Executive Bancshares, Inc. (Executive)
consummated on August 31, 1997, which was accounted for as a pooling of
interests, and (ii) Hibernia's Quarterly Report on Form 10-Q for the nine-month
period ended September 30, 1997. Information under the column titled
"ArgentBank" is based on, and should be read in conjunction with, the historical
financial statements and related notes and Management's Discussion and Analysis
of Financial Condition and Results of Operations of ArgentBank contained
elsewhere in this Proxy Statement/Prospectus.
Information under the column entitled "Pro Forma Hibernia Corporation
(with ArgentBank)" is based upon the pro forma financial statements and related
notes contained elsewhere herein. Such pro forma combined information, which
reflects the Merger and the consummated merger with Executive, is presented for
informational purposes only and should not be construed as indicative of the
actual operations that would have occurred had the mergers been consummated at
the beginning of the periods indicated or that may be obtained in the future.
The pro forma combined information gives effect to the issuance, in each of the
periods presented, of 1,161,680 shares of Hibernia Common Stock for all of the
outstanding shares of Executive Common Stock and of 2.04 shares of Hibernia
Common Stock for each outstanding share of ArgentBank Common Stock. The pro
forma combined information assumes the Average Market Price of Hibernia Common
Stock will be $17.50 per share. See "The Merger -- Consideration to be Received
in the Merger."
The information under the column entitled "ArgentBank Pro Forma
Equivalent" is derived by multiplying the amounts contained in the column titled
"Pro Forma Hibernia Corporation (with ArgentBank)" by the Exchange Ratio (as
defined in the Merger Agreement) of 2.04. See "The Merger -- Consideration to be
Received in the Merger."
<TABLE>
<CAPTION>
HIBERNIA CORPORATION AND ARGENTBANK
COMPARATIVE PER SHARE INFORMATION
- -------------------------------------------------------------------------------------------------
Unaudited
PRO FORMA
HIBERNIA ARGENTBANK
HIBERNIA CORPORATION PRO FORMA
CORPORATION ARGENTBANK (WITH ARGENTBANK) EQUIVALENT
- -------------------------------------------------------------------------------------------------
Per Common Share:
<S> <C> <C> <C> <C>
Income from continuing operations:
For the nine months ended September 30,
1997 $ 0.72 $ 1.03 $ 0.70 $ 1.43
1996 0.62 0.98 0.61 1.24
For the year ended December 31,
1996 $ 0.85 $ 1.31 $ 0.83 $ 1.69
1995 1.01 1.35 0.97 1.98
1994 0.79 1.34 0.78 1.59
Cash dividends:
For the nine months ended September 30,
1997 $ 0.24 $ 0.42 $ 0.24 $ 0.49
1996 0.21 0.39 0.21 0.43
For the year ended December 31,
1996 $ 0.29 $ 0.52 $ 0.29 $ 0.59
1995 0.25 0.48 0.25 0.51
1994 0.19 0.37 0.19 0.39
Book Value:
At September 30, 1997 $ 7.08 $ 13.20 $ 7.02 $ 14.32
At December 31, 1996 6.58 11.53 6.44 13.14
</TABLE>
Market and Market Prices
The following table sets forth the closing price per share of Hibernia
Common Stock on the NYSE and ArgentBank Common Stock on the American Stock
Exchange and equivalent per share price (as explained below) of ArgentBank
Common Stock on July 15, 1997, the business day preceding the public
announcement of the Merger Agreement and on November 14, 1997:
MARKET PRICE HIBERNIA ARGENTBANK ARGENTBANK
PER SHARE AT: COMMON STOCK COMMON STOCK EQUIVALENT PER
SHARE PRICE
July 15, 1997 $14.31 $22.50 $29.20
December __, 1997 $ $ $34.81
The equivalent per share price of a share of ArgentBank Common Stock
represents an estimation of the consideration to be received by ArgentBank
shareholders in the Merger, assuming that the Merger is consummated and that no
divestiture will be required by the Justice Department. See "The Merger --
Consideration to be Received in the Merger."
ArgentBank shareholders are advised to obtain current market quotations
for Hibernia Common Stock and ArgentBank Common Stock. No assurance can be given
as to the market price of Hibernia Common Stock or ArgentBank Common Stock at,
or in the case of Hibernia Common Stock, after consummation of the Merger.
The Meeting
A special meeting of shareholders of ArgentBank to consider and vote
upon the Agreement and the Merger will be held on ______________, January __,
1998 at 3:00 p.m., Central time at the offices of ArgentBank, 400 Green Street,
Thibodaux, Louisiana (the "Meeting"). Only holders of record of ArgentBank
Common Stock at the close of business on December __, 1997 (the "Record Date")
will be entitled to notice of and to vote at the Meeting. On the Record Date,
6,527,728 shares of ArgentBank Common Stock were outstanding and entitled to
vote on the Merger. For additional information with respect to the Meeting and
the voting rights of shareholders of ArgentBank, see "Meeting Information."
The Merger
In accordance with the terms of the Agreement, ArgentBank will be merged
with and into HNB, whereupon the separate existence of ArgentBank will cease,
and HNB shall continue as the surviving entity. The transaction contemplated
herein will take place on a date that is mutually agreed to by the parties after
all conditions to closing have been met or waived (the "Closing Date"). The
actual Merger with HNB will thereafter become effective as of the date and time
of issuance by the Office of the Comptroller of the Currency ("OCC") of a
certificate of merger (the "Effective Date").
On the Effective Date, each outstanding share of ArgentBank Common Stock
(other than shares held by shareholders who perfect dissenters' rights in
accordance with applicable law) will be converted into the right to receive
approximately 2.04 shares of Hibernia Common Stock, subject to adjustment under
certain circumstances set forth in the Agreement (if and as adjusted, the
"Exchange Ratio"). The Exchange Ratio is based upon and subject to there being
no divestiture of assets and/or liabilities over a certain amount required or
requested by the United States Justice Department (the "Justice Department"). If
the Justice Department requires divestiture over a certain amount, the Exchange
Ratio may be adjusted downward in the manner described in the Agreement. For a
detailed description of the adjustment method, see "The Merger -- Consideration
to be Received in Merger."
Hibernia will issue no fractional shares in connection with the
conversion of ArgentBank Common Stock. Accordingly, if a holder of ArgentBank
Common Stock is entitled to receive a fractional share of Hibernia Common Stock
in the Merger, that holder will receive cash instead of a fractional share. The
amount of cash paid for a fractional share will be equal to such fraction
multiplied by the Average Market Price of Hibernia Common Stock. The "Average
Market Price" is the average of the closing price of one share of Hibernia
Common Stock, as reported in The Wall Street Journal, for the five trading days
immediately preceding the Closing Date.
Exchange of Certificates
After the Effective Date, all non-dissenting ArgentBank shareholders
will receive a letter of transmittal which will contain instructions for the
surrender or exchange of their ArgentBank common stock certificates for
certificates representing whole shares of Hibernia common stock and payment for
fractional shares, if any. See "The Merger -- Surrender and Exchange of
Certificates." ArgentBank shareholders should not forward any stock certificates
with their proxy cards.
The Stock Option Agreement
ArgentBank has granted to Hibernia an option to purchase up to 1,299,083
shares of ArgentBank Common Stock at a price of $22.25 per share under certain
terms and conditions as outlined in that certain Stock Option Agreement dated
July 15, 1997 (the "Stock Option Agreement"). Hibernia may exercise this option
only upon the occurrence of certain events or transactions by which persons
(other than Hibernia) either purchase or enter into an agreement to purchase
substantial blocks of ArgentBank Common Stock, or otherwise enter into a merger
or similar transaction with ArgentBank. For more information as to the terms of
the Stock Option Agreement, see "The Merger--Stock Option Agreement."
Management and Operations After the Merger
After the Effective Date, the offices of ArgentBank will be operated as
branch banking offices of HNB and the separate existence of ArgentBank will
cease. As of the Effective Date, the directors of ArgentBank will no longer hold
their positions as directors. See "The Merger -- Management and Operations After
the Merger."
Recommendation of the Board of Directors and Reasons for the Merger
The Board of Directors of ArgentBank (the "ArgentBank Board") has
unanimously approved the Agreement and believes that the Merger is in the best
interests of the shareholders of ArgentBank; accordingly, the ArgentBank Board
recommends that the shareholders vote FOR the Merger. The ArgentBank Board
believes that the Merger will afford additional liquidity and provide
significant value to all ArgentBank shareholders and will enable holders of
ArgentBank Common Stock to participate in opportunities for growth as equity
participants in a strong multi-state banking organization. The ArgentBank Board
also believes that the Merger will provide expanded product and service
capabilities to the customers of ArgentBank and will enable the combined entity
to compete more effectively with other commercial banks and financial
institutions in the region. See "The Merger -- Background of and Reasons for the
Merger."
Basis for the Terms of the Merger
A number of factors were considered by the ArgentBank Board in approving
the terms of the Merger, including, without limitation, information concerning
the financial condition, results of operations and prospects of Hibernia and
ArgentBank, the ability of the combined bank entity to compete in the relevant
banking markets, the market price of Hibernia Common Stock, the anticipated
tax-free nature of the Merger to holders of ArgentBank Common Stock for federal
income tax purposes, the financial terms of other business combinations in the
banking industry, and certain non-monetary factors. See "The Merger --
Background of and Reasons for the Merger."
Advice and Opinion of Financial Advisor
Chase Securities Inc. ("Chase"), ArgentBank's financial advisor, has
rendered both oral and written opinions to the ArgentBank Board that the
consideration to be received by the holders of ArgentBank Common Stock pursuant
to the Merger is fair to such shareholders from a financial point of view. A
copy of Chase's fairness opinion is attached hereto as Appendix B, and contains
the assumptions and other matters considered by Chase in rendering its opinion.
ArgentBank has agreed to indemnify Chase, its affiliates, and their respective
partners, directors, officers, agents, consultants, employees and controlling
persons against certain liabilities, including liabilities under the federal
securities laws. See "The Merger -- Opinion of Financial Advisor" for further
information regarding, among other things, the selection of Chase and its
compensation in connection with the Merger. Shareholders are encouraged to read
the fairness opinion in its entirety.
Vote Required
Approval of the Agreement will require a simple majority vote of the
outstanding shares of ArgentBank Common Stock. Directors and officers of
ArgentBank have voting power with respect to a total of 618,756 shares of
ArgentBank Common Stock, representing approximately 9.48% of the ArgentBank
Common Stock outstanding as of the Record Date. Directors of ArgentBank have
agreed to vote their stock in favor of the Merger, unless they are legally
required to abstain from voting or to vote against the Merger. See "Meeting
Information -- Vote Required."
Other Pending Transactions of Hibernia
In addition to ArgentBank, Hibernia has entered into definitive merger
agreements with two other financial institutions: Northwest Bancshares of
Louisiana Inc. ("Northwest") and Firstshares of Texas, Inc. ("Firstshares") in
northeast Texas. As of September 30, 1997, Northwest had total consolidated
assets of $105 million and shareholders' equity of $12 million. On such date,
Firstshares had total assets of $289 million and shareholders' equity of $25
million. The consummation of each of the two pending transactions is subject to
certain conditions similar to the conditions to the Merger described herein.
These pending transactions may be consummated, if at all, before or after
consummation of the Merger. Shareholders of ArgentBank will not have the right
to vote on any of the other pending transactions. In addition, if the Merger is
consummated prior to consummation of any or all of the other pending
transactions, former holders of ArgentBank Common Stock who have not exercised
and perfected dissenters' rights will be shareholders of Hibernia at the time
those transactions are consummated.
Conditions to the Merger; Termination
A number of conditions must be satisfied in order to complete the
Merger, including approval of the Agreement and the transactions contemplated
thereby by the shareholders of ArgentBank, and the OCC.
Applicable law provides that the Merger may not be consummated until at
least 15, but no more than 90, days after approval of the OCC. Hibernia filed
applications for approval of the OCC in October, 1997. See "Representations and
Warranties; Conditions to the Merger; Waiver" and "Regulatory Approvals" under
"The Merger."
Substantially all of the conditions to consummation of the Merger
(except for required shareholder and regulatory approvals) may be waived at any
time by the party for whose benefit they were created, and the Agreement may be
amended or supplemented at any time by written agreement of the parties, except
that no such waiver, amendment or supplement executed after approval of the
Agreement by ArgentBank's shareholders may change the Exchange Ratio. In
addition, the Agreement may be terminated, either before or after shareholder
approval, under certain circumstances. See "Representations and Warranties;
Conditions to the Merger; Waiver" and "Effective Date of the Merger;
Termination" under "The Merger."
Interests of Certain Persons in the Merger
In considering the Merger, ArgentBank shareholders should be aware that
directors, officers and employees of ArgentBank have certain interests in the
Merger that may conflict with the interests of shareholders. All employees of
ArgentBank at the Effective Date will become employees of HNB and will be
eligible for the same employee benefits as are generally available to employees
of HNB who have similar like tenure, officer status and compensation levels. All
employees of ArgentBank retained by HNB will be granted full credit (for both
eligibility and vesting) for all prior service as if they were employed by HNB
for the full time that they were employed by ArgentBank. Hibernia will execute
employment agreements with, and award transaction bonuses to, certain key
employees and senior management of ArgentBank to encourage these persons to
continue their employment with HNB or Hibernia following the Merger. In
addition, Dr. James Peltier, Chairman of the Board of Directors of ArgentBank,
will be appointed to the Board of Directors of Hibernia, and elected by Hibernia
(as the sole shareholder of HNB) to the Board of Directors of HNB. The Agreement
also provides for the indemnification of officers, directors and employees of
ArgentBank for certain liabilities, up to specified aggregate limitations. See
"The Merger -- Management and Operations After the Merger"; and "Interests of
Certain Persons in the Merger."
Certain Material Income Tax Consequences
It is a condition to consummation of the Merger that the parties receive
an opinion to the effect (i) that the Merger, when consummated in accordance
with the terms of the Agreement, will constitute a reorganization within the
meaning of Section 368 of the Internal Revenue Code of 1986, as amended (the
"Code"); (ii) that the exchange of ArgentBank Common Stock for Hibernia Common
Stock will not give rise to the recognition of gain or loss for federal income
tax purposes to the holders of ArgentBank Common Stock; and (iii) that the
Louisiana income tax treatment to the shareholders of ArgentBank will be
substantially the same as the federal income tax treatment to the shareholders
of ArgentBank. The parties expect to receive the opinion of Watkins Ludlam &
Stennis, P.A. to the effects set forth above. A copy of the proposed form of
opinion is attached hereto as Appendix C. See "The Merger -- Material Tax
Consequences."
BECAUSE OF THE COMPLEXITIES OF THE INCOME TAX LAWS AND BECAUSE THE TAX
CONSEQUENCES MAY VARY DEPENDING UPON A HOLDER'S INDIVIDUAL CIRCUMSTANCES OR TAX
STATUS, IT IS RECOMMENDED THAT EACH SHAREHOLDER OF ARGENTBANK CONSULT HIS, HER
OR ITS TAX ADVISOR CONCERNING THE FEDERAL (AND ANY APPLICABLE STATE, LOCAL OR
OTHER) TAX CONSEQUENCES OF THE MERGER TO SUCH SHAREHOLDER.
Dissenters' Rights
Because ArgentBank is merging with and into a national bank, each
ArgentBank shareholder who objects to the Merger is entitled to the rights and
remedies of dissenting shareholders provided by federal law in 12 U.S.C. 215a.
Under 215a, if the Merger is properly approved by shareholders of ArgentBank and
thereafter the OCC, shareholders who vote against the Merger or give notice in
writing at or prior to the Meeting shall be entitled to receive the value of
their shares held on the Effective Date. To exercise the right of dissent, a
dissenting shareholder must vote against the Merger and provide a written
request to Hibernia at any time before thirty days after the Effective Date
accompanied by the surrender of his stock certificates. The relevant provisions
of 215a on dissenters' rights, including valuation of shares, are attached
hereto as Appendix D.
If dissenters' rights are exercised and perfected with respect to 10% or
more of the outstanding shares of ArgentBank Common Stock, Hibernia has the
option to abandon the Merger, because the Merger could not be accounted for as a
pooling of interests. It is expected that Hibernia would abandon or attempt to
renegotiate the Merger in that case. See "Rights of Dissenting Shareholders" and
"The Merger -- Accounting Treatment."
Differences in Shareholders' Rights
Upon completion of the Merger, holders of ArgentBank Common Stock, to
the extent they receive shares of Hibernia Common Stock in the Merger, will
become shareholders of Hibernia, and their rights as such will be governed by
Hibernia's Articles of Incorporation and Bylaws. The rights of shareholders of
Hibernia are different in certain respects from the rights of shareholders of
ArgentBank. See "The Merger - - Comparison of Rights of Shareholders."
Accounting Treatment
The parties intend the Merger to be treated as a pooling of interests
for financial accounting purposes. If, among other things, holders of more than
10% of the outstanding shares of ArgentBank Common Stock exercise and perfect
dissenters' rights, the Merger will not qualify for the pooling of interests
method of accounting, and Hibernia will not be obligated to effect the Merger.
See "The Merger -- Accounting Treatment."
MEETING INFORMATION
Each copy of this Proxy Statement/Prospectus mailed to holders of
ArgentBank Common Stock is accompanied by a proxy card furnished in connection
with the ArgentBank Board's solicitation of proxies for use at the Meeting and
at any adjournment thereof. The Meeting is scheduled to be held at 3:00 p.m.,
Central time, on ________, January __, 1998, at the offices of ArgentBank,
400 Green Street, Thibodaux, Louisiana. Only holders of record of ArgentBank
Common Stock at the close of business on the Record Date are entitled to receive
notice of and to vote at the Meeting. At the Meeting shareholders will consider
and vote upon (a) a proposal to approve the Agreement and the Merger, and (b)
any other matters as may properly be brought before the Meeting or any
adjournment thereof.
HOLDERS OF ARGENTBANK COMMON STOCK ARE REQUESTED TO COMPLETE, DATE AND
SIGN THE ACCOMPANYING PROXY CARD AND RETURN IT PROMPTLY IN THE ENCLOSED, POSTAGE
PAID ENVELOPE EVEN IF YOU PLAN TO ATTEND THE MEETING.
Solicitation and Revocation of Proxies
Any holder of ArgentBank Common Stock who has delivered a proxy may
revoke it at any time before it is voted by giving written notice of revocation
to the Cashier of ArgentBank prior to or at the Meeting or executing a signed
proxy card bearing a later date which is voted at the Meeting. The shares of
ArgentBank Common Stock represented by properly executed proxy cards received at
or prior to the Meeting and not subsequently revoked will be voted as directed
therein, or if no direction is set forth as voted by the persons submitting such
proxies. If instructions are not given, executed proxy cards received by
ArgentBank will be voted FOR approval of the Agreement and the Merger. If any
other matters are properly presented at the Meeting for consideration, the
persons named in the proxy card enclosed herewith will have discretionary
authority to vote on such matters in accordance with their best judgment. The
ArgentBank Board is unaware of any matter to be presented at the Meeting other
than the proposal to approve the Agreement and Merger.
The cost of soliciting proxies from shareholders of ArgentBank by the
ArgentBank Board will be borne by ArgentBank, except that Hibernia will bear all
expenses incurred in printing this Proxy Statement/Prospectus. Solicitations
will be made by mail but also may be made by telephone or other means of
telecommunication or in person by the directors, officers and employees of
ArgentBank (who will receive no additional compensation for doing so).
ARGENTBANK SHAREHOLDERS SHOULD NOT FORWARD ANY STOCK CERTIFICATES WITH
THEIR PROXY CARDS. IF THE MERGER IS APPROVED, SHAREHOLDERS WILL RECEIVE
INSTRUCTIONS REGARDING THE EXCHANGE OF THEIR STOCK CERTIFICATES AFTER THE MERGER
HAS BEEN CONSUMMATED.
Vote Required
The affirmative vote of a majority of the outstanding shares of
ArgentBank Common Stock is required to approve the Agreement and the Merger. The
ArgentBank Board has fixed the close of business on __________ __, 1997, as the
record date (the "Record Date") for determining which shareholders are entitled
to notice of and to vote at the Meeting. As of the Record Date, there were
6,527,728 shares of ArgentBank Common Stock outstanding and entitled to vote at
the Meeting, with each share being entitled to one vote.
A majority of the total outstanding shares of ArgentBank Common Stock
constitutes a quorum for purposes of the Meeting. An abstention will be
considered present for quorum purposes, but will have the same effect as a vote
against the proposal to be considered at the Meeting. Because a quorum is
determined based upon the total number of shares outstanding, a broker non-vote
would count the same as a vote against as not present for quorum purposes and
therefore would make it more difficult to obtain a quorum. In addition, because
approval requires a majority vote of the total shares outstanding, a broker
non-vote would count the same as a vote against the Agreement and the Merger.
As of the Record Date, the directors of ArgentBank have voting power
with respect to a total of 618,756 shares, or approximately 9.48% of the
outstanding shares of ArgentBank Common Stock. The directors have agreed to vote
their stock in favor of the Merger, unless they are legally required to abstain
from voting or to vote against the Merger.
As of the Record Date, neither Hibernia or HNB, nor any of their
directors, executive officers or subsidiaries, beneficially owned any shares of
ArgentBank Common Stock.
Hibernia, as the sole shareholder of HNB, has previously approved the
Merger.
Recommendation
For the reasons described herein, the ArgentBank Board has unanimously
approved the Agreement, believes the Merger is in the best interests of
ArgentBank and its shareholders and recommends that holders of ArgentBank Common
Stock vote FOR approval of the Agreement and the Merger. In making its
recommendation to shareholders, the ArgentBank Board considered, among other
things, the opinion of ArgentBank's financial advisor that the consideration to
be received by the holders of ArgentBank Common Stock pursuant to the Merger is
fair to such shareholders from a financial point of view. See "Background of and
Reasons for the Merger" and "Opinion of Financial Advisor" under "The Merger."
THE MERGER
This section of the Proxy Statement/Prospectus describes certain aspects
of the Merger and the Agreement. The following description does not purport to
be complete and is qualified in its entirety by reference to the Agreement,
which is attached as Appendix A to this Proxy Statement/Prospectus and is
incorporated herein by reference. All shareholders are urged to read the
Agreement carefully and in its entirety.
Consideration to be Received in the Merger
Pursuant to the Agreement, the holders of ArgentBank Common Stock will
be entitled to receive approximately 2.04 shares of Hibernia Common Stock for
each share of ArgentBank Common Stock (subject to adjustment as set forth in the
Agreement and summarized below). On the Effective Date, each outstanding share
of ArgentBank Common Stock (other than shares held by a shareholder who perfects
dissenters rights in accordance with applicable law) will be converted into the
number of shares of Hibernia Common Stock determined by applying the Exchange
Ratio.
Formula for Adjustment. Government authorities may request or require
Hibernia to divest some of the deposits and/or loans of ArgentBank as a
condition to their approval of the Merger. If Hibernia is required or requested
to divest more than $10,000,000 in deposits, then the 13,317,235 shares to be
issued by Hibernia in the Merger will be reduced by dividing the total amount of
deposits requested or required to be divested by $2,500,000. The result is
multiplied by $172,000, and that dollar amount is divided by $14.25. The result
is the number of shares by which the aggregate number of shares to be issued in
the Merger will be reduced. There will be a similar reduction in the total
number of shares to be issued by Hibernia if it is requested or required to
divest more than $5 million in loans. If so, the total amount required or
requested to be divested will be divided by $2,500,000 and the result multiplied
by $240,000. The resulting dollar amount will be divided by $14.25 to determine
the number of shares by which the merger consideration will be reduced. The
effect of these provisions is to reduce the consideration to be paid in the
transaction by $172,000 for each $2.5 million in deposits (if more than $10
million in deposits are divested) and by $240,000 for each $2.5 million in loans
divested (if more than $5 million in loans are divested). The $14.25 factor has
been fixed to equal the market value of Hibernia Common Stock at the time the
Agreement was signed and will not fluctuate due to any future increase or
decrease in the market value of Hibernia Common Stock. Any increase in the
market value of Hibernia Common Stock will benefit shareholders of ArgentBank
and will reduce the negative impact of a reduction in the Exchange Ratio that
the adjustments described above would create.
Conversion of Shares
Upon the effectiveness of the Merger, the conversion of shares of
ArgentBank Common Stock into whole shares of Hibernia Common Stock will occur
without any action on the part of the holders thereof, and holders of ArgentBank
Common Stock will automatically be entitled to all of the rights and privileges
afforded to Hibernia shareholders as of such date.
No fractional shares of Hibernia Common Stock will be issued in
connection with the Merger. No holder of a fractional share will be entitled to
dividends, voting rights or any other right of shareholders in respect of any
fractional share. Instead, Hibernia will make a cash payment equal to the
fractional share which an ArgentBank shareholder would otherwise receive
multiplied by the Average Market Price of Hibernia Common Stock. The "Average
Market Price" is the average of the closing price of one share of Hibernia
Common Stock, as reported in The Wall Street Journal, for the five trading days
immediately preceding the Closing Date. If, prior to the Effective Date, the
outstanding shares of Hibernia Common Stock are increased, decreased, changed
into or exchanged for a different number or class of shares or securities
through a change in Hibernia's capitalization, then the number of shares to be
issued in the Merger will be adjusted accordingly. The receipt of cash instead
of fractional shares will not adversely affect the tax-free nature of the
exchange of common stock in the Merger, but the receipt of such cash will
generally be a taxable event to the recipient. See "Material Tax Consequences"
below.
For a discussion of the rights of dissenting shareholders, see "Rights
of Dissenting Shareholders" below.
Surrender and Exchange of Certificates
As soon as practicable after the Effective Date, Hibernia or its
exchange agent will mail all non-dissenting shareholders of ArgentBank a letter
of transmittal, which will contain instructions for the surrender and exchange
of their ArgentBank Common Stock certificates for certificates representing
whole shares of Hibernia Common Stock and payment for fractional shares, if any.
In addition, Hibernia will arrange to have one or more representatives available
to assist ArgentBank shareholders with the completion of the letter of
transmittal required for the exchange of their shares. Such representatives will
be at a branch of ArgentBank on dates that will be announced after the Merger is
completed. Until so exchanged, each certificate representing ArgentBank Common
Stock outstanding immediately prior to the Effective Date shall be deemed for
all purposes to evidence ownership of the number of shares of Hibernia Common
Stock and any cash payment into which such shares have been converted on the
Effective Date. Shareholders should not send their ArgentBank Common Stock
certificates for surrender until they receive further instructions from Hibernia
or its exchange agent.
Shareholders who cannot locate their ArgentBank Common Stock
certificates are encouraged to contact William B. Gautreaux, Chief Financial
Officer, at 100 West Main, Post Office Box 819, Thibodaux, Louisiana 70301,
telephone number (504) 447-0669, prior to the Meeting. New certificates will be
issued to ArgentBank shareholders who have misplaced their certificates only if
the shareholder executes an affidavit certifying that the certificate cannot be
located and agreeing to indemnify ArgentBank and Hibernia (as its successor),
against any claim that may be made against either of them by any person claiming
to own any or all of the shares represented by the lost certificate(s).
ArgentBank or Hibernia (as its successor) may require a shareholder to post a
bond in an amount sufficient to support the shareholder's indemnification
obligation. Shareholders who cannot locate their stock certificates and
shareholders who hold certificates in names other than their own are encouraged
to resolve those matters prior to the Effective Date of the Merger in order to
avoid delays in receiving their Hibernia Common Stock certificate and any cash
payment if the Merger is approved and consummated.
Background of and Reasons for the Merger
As part of its continuing efforts to maximize shareholder value,
ArgentBank has considered numerous options from time to time, including the
possibility of merging with another bank or bank holding company. Over the
course of the last several years, ArgentBank was approached by, or held
discussions with, several regional bank holding companies regarding a potential
business combination.
In May, 1995, ArgentBank appointed a special Mergers and Acquisitions
Committee of its Board of Directors (the "Committee") designed to address
potential acquisitions by ArgentBank as well as a potential merger or sale of
ArgentBank with or to another entity. The Committee frequently utilized the
assistance of Chase to review current market conditions and the value of
ArgentBank to potential merger partners.
During the first quarter of 1997, Hibernia approached ArgentBank
regarding a potential business combination and requested a meeting with
ArgentBank to discuss the benefits of such a combination, including the
potential benefits to ArgentBank shareholders. After discussions with Chase, the
Committee decided that it would be in the best interests of ArgentBank
shareholders to meet with Hibernia. The Committee instructed Mr. Randall E.
Howard, Chief Executive Officer of ArgentBank, to inform Hibernia that
ArgentBank would meet with Hibernia, but only after ArgentBank's pending
acquisition of Assumption Bancshares, Inc. was substantially completed.
During March 1997, ArgentBank and Chase evaluated other potential merger
partners, and various strategies to approach those parties. With the advice of
the Committee, ArgentBank decided to approach a small number of banking
companies to ascertain their respective interests in a potential business
combination with ArgentBank.
During late May 1997 and early June 1997, ArgentBank and Chase met with
potential merger partners and presented certain non-public information regarding
ArgentBank and its future prospects. During these meetings, potential merger
partners provided information regarding how an acquisition of ArgentBank would
be integrated into its existing organization. Over the course of the next
several weeks, ArgentBank also provided additional non-public information to
potential merger partners.
During late June and early July 1997, ArgentBank and Chase requested and
received from potential merger partners indication of interest letters that
stipulated basic pricing and terms of a potential merger with ArgentBank. On
July 8, 1997, the Committee met with Chase and reviewed the indication of
interest letters. The Committee decided to ask potential merger partners to
submit a final merger proposal to ArgentBank via a draft merger agreement
document and authorized Mr. Howard and Chase to negotiate a merger proposal that
was on terms at least as favorable as those proposed in the indication of
interest letters.
After receiving Hibernia's draft merger agreement on July 12, 1997,
which indicated a price in excess of the price stipulated in its indication of
interest letter, Mr. Howard and Chase negotiated additional contract terms and
pricing with Hibernia, and arrived at a satisfactory merger agreement on July
13, 1997.
On July 15, 1997, the Committee met with Chase to review the Hibernia
proposal and discussed the terms and pricing of the proposed agreement. The
Committee voted unanimously in favor of accepting the Hibernia proposal and
recommended that the proposal be brought before the full Board of Directors.
Later the same day, on July 15, 1997, at a regularly scheduled meeting of the
ArgentBank Board, the Committee presented the Hibernia proposal. With the
assistance of Chase and Watkins Ludlam & Stennis, P.A., ArgentBank's outside
counsel, the Board reviewed and considered a number of factors including the
following:
(a) Information with respect to ArgentBank's financial condition on both
a historical and pro forma basis.
(b) The financial highlights of Hibernia and the effect of the merger on
Hibernia.
(c) A comparison of the terms of the Hibernia proposal with recent
transactions involving similar companies.
(d) The terms of the Hibernia proposal, including the tax free nature of
the Merger, the Exchange Ratio and the Stock Option Agreement, as well as the
terms of proposals of other potential merger partners.
(e) The effect on shareholder value if ArgentBank continued as a
stand-alone entity, as compared to the effect of a merger with Hibernia,
including a comparison of earnings per share and dividends per share.
(f) The interests of ArgentBank and its shareholders as well as the
social, legal and economic effects on employees, customers and the community.
(g) The other potential benefits to ArgentBank shareholders as
shareholders in a combined company and the current economic and financial
environment, including, but not limited to, potential strategic alternatives for
ArgentBank.
After consideration of these factors, the ArgentBank Board voted
unanimously in favor of the Hibernia proposal.
Based on the foregoing, the ArgentBank Board has unanimously approved
the Agreement and the Merger, believes that the Agreement and the Merger are in
the best interests of ArgentBank's shareholders, and recommends that all holders
of ArgentBank Common Stock vote "FOR" the approval of the Agreement and the
Merger.
The Stock Option Agreement
ArgentBank has granted to Hibernia an option to purchase up to 1,299,083
shares of ArgentBank Common Stock at a price of $22.25 per share (the "Option
Price") under certain terms and conditions set forth in the Stock Option
Agreement (attached hereto as part of Appendix A at page A-__). It is intended
that the number of shares subject to the option equal 19.9% of the ArgentBank
Common Stock issued and outstanding at any time during the term of the Stock
Option Agreement; accordingly, if ArgentBank takes any action to increase the
number of issued and outstanding shares, the shares subject to the option and
the Option Price will automatically adjust to reflect the increase. In no event,
however, will the number of shares subject to the option exceed 19.9% of the
issued and outstanding shares of ArgentBank Common Stock. The Option Price is
also subject to adjustment if ArgentBank issues or agrees to issue any shares of
ArgentBank Common Stock (other than as contemplated by the Merger) at a price
less than $22.25 per share, in which event, the Option Price will be equal to
the lesser price.
Pursuant to the Stock Option Agreement, Hibernia is entitled to exercise
the option if: (i) any person (other than Hibernia) commences a bona fide tender
or exchange offer to purchase shares of ArgentBank Common Stock, and after the
consummation such person will own or control 20% or more of the outstanding
shares of ArgentBank Common Stock; (ii) ArgentBank, without the prior written
consent of Hibernia, enters into an agreement with any person (other than
Hibernia) to (a) merge or consolidate, (b) transfer assets, or (c) allow such
person to purchase or acquire securities representing 20% or more of the voting
power of ArgentBank; or (iii) any person (other than Hibernia in a fiduciary
capacity) acquires beneficial ownership (or the right to acquire beneficial
ownership) of 10% or more of the outstanding shares of ArgentBank Common Stock,
except for shares beneficially owned prior to the effective date of the Stock
Option Agreement.
The option granted by the Stock Option Agreement expires upon the
Effective Date of the Merger, or upon the termination of the Agreement, unless
such termination is the result of a willful and material breach by ArgentBank of
the covenants or agreements therein. Otherwise, the option shall expire on July
31, 1999. The shares of ArgentBank Common Stock subject to the Stock Option
Agreement will be canceled (and not converted) by virtue of the Merger on the
Effective Date.
Opinion of Financial Advisor
Opinion to ArgentBank. ArgentBank retained Chase to act as its financial
advisor in connection with the Merger. Chase has rendered an opinion to the
ArgentBank Board that, based on the matters set forth therein, the consideration
to be received pursuant to the Merger is fair, from a financial point of view,
to ArgentBank's shareholders. The text of Chase's opinion is set forth in
Appendix B, and it should be read in its entirety by shareholders of ArgentBank.
As a condition to ArgentBank's obligation to consummate the Merger, it is
required that this opinion be updated prior to the Closing Date.
The consideration to be received by ArgentBank shareholders in the
Merger was determined by negotiations between representatives of ArgentBank and
Hibernia. No limitations were imposed by the Board of Directors or management of
ArgentBank upon Chase with respect to the investigations made or the procedures
followed by Chase in rendering its opinion.
In connection with rendering its opinion to the ArgentBank Board, Chase
performed a variety of financial analyses. However, the preparation of a
fairness opinion involves various determinations as to the most appropriate and
relevant methods of financial analysis and the application of those methods to
the particular circumstances, and, therefore, such an opinion is not readily
susceptible to summary description.
Chase, in conducting its analysis and in arriving at its opinion, has not
conducted a physical inspection of any of the properties or assets of
ArgentBank, and has not made or obtained any independent valuation or appraisals
of any properties, assets or liabilities of ArgentBank. Chase has assumed and
relied upon the accuracy and completeness of the financial and other information
that was provided to it by ArgentBank or that was publicly available. Its
opinion is necessarily based on economic, market and other conditions as in
effect on, and the information made available to it as of, the date of its
analyses.
In connection with its opinion on the Merger and the presentation of
that opinion to the ArgentBank Board, Chase performed two valuation analyses
with respect to ArgentBank: (i) an analysis of comparable prices and terms of
recent transactions involving banks buying banks; and (ii) a discounted cash
flow analysis. For purpose of the comparable transaction analyses, Hibernia's
Common Stock was valued at [ ] per share, the closing price per share on
[ ]. Each of these methodologies is discussed briefly below.
Comparable Transaction Analysis. Chase performed two analyses of
premiums paid for selected banks with comparable characteristics to ArgentBank.
Comparable transactions were considered to be (i) selected transactions since
January 1, 1996, where the seller was a bank with assets between $[ ] million
and $[ ] billion, and (ii) all transactions since January 1, 1996, where the
seller was a bank located in Louisiana.
Based on the first of the foregoing analyses, the analysis yielded a
range of transaction values to book value of [ ] times to [ ] times, with a mean
of [ ] times and a median of [ ] times. These compare to a transaction value for
the Merger of approximately [ ] times ArgentBank's book value as of [].
The first analysis yielded a range of transaction values as a multiple
of trailing twelve month earnings per share. These values ranged from [ ] times
to [ ] times, with a mean of [ ] times and a median of [ ] times. These compare
to a transaction value trailing twelve months earnings per share of [ ] times
for the Merger.
The first analysis yielded a range of transaction values as a percent of
total assets. These values ranged from [ ] percent to [ ] percent, with a mean
of [ ] percent and a median of [ ] percent. These compare to a transaction value
of [ ] percent of assets at [ ] for the Merger.
Based on the second analysis of comparable transactions since January 1,
1996 where the seller was a bank located in Louisiana, the analysis yielded a
range of transaction values to book value of [ ] times to [ ] times, with a mean
of [ ] times and a median of [ ] times. These compare to a transaction value for
the Merger of approximately [ ] times ArgentBank's book value as of [ ].
The analysis yielded a range of transaction values as a multiple of
trailing twelve month earnings per share. These values ranged from [ ] times to
[ ] times, with a mean of [ ] times and a median of [ ] times. These compare to
a transaction value to trailing twelve months earnings per share of [ ] times
for the Merger.
The analysis yielded a range of transaction values as a percent of total
assets. These values ranged from [ ] percent to [ ] percent, with a mean of [ ]
percent and a median of [ ] percent. These compare to a transaction value of [ ]
percent of assets at [ ] for the Merger.
No company or transaction used in the comparable transaction analyses is
identical to ArgentBank. Accordingly, an analysis of the foregoing necessarily
involves complex considerations and judgments, as well as other factors that
affect the public trading value or the acquisition value of the company to
which it is being compared.
Discounted Cash Flow Analysis. Using discounted cash flow analysis,
Chase estimated the present value of the future stream of after-tax cash flow
that ArgentBank could produce through [ ], under various circumstances, assuming
that ArgentBank performed in accordance with the earnings/return projections of
management at the time that ArgentBank entered into acquisition discussions with
Hibernia. Chase estimated the terminal value for ArgentBank at the end of the
period by applying a perpetuity growth rate ranging from[ ] to [ ] and then
discounting the after tax cash flow streams, dividends paid to shareholders and
terminal value using differing discount rates (ranging from [ ] percent to [ ]
percent). This discounted cash flow analysis indicated a reference range of [ ]
million to [ ] million, or [ ] to [ ] per share, for ArgentBank.
Pursuant to an engagement letter dated May 30, 1997 between ArgentBank
and Chase, ArgentBank agreed to pay Chase a success fee (to be paid at closing)
equal to 1.2% of the aggregate consideration of the transaction. ArgentBank has
also agreed to indemnify and hold harmless Chase and its officers and employees
against certain liabilities in connection with its services under the engagement
letter, except for liabilities resulting from the gross negligence of Chase.
As part of its investment banking business, Chase is regularly engaged
in the valuation of securities in connection with mergers and acquisitions,
private placements, and valuations for estate, corporate and other purposes.
ArgentBank's Board of Directors decided to retain Chase based on its experience
as a financial advisor in mergers and acquisitions and its knowledge of
financial institutions and ArgentBank in particular.
Representations and Warranties; Conditions to the Merger; Waiver
The Agreement contains representations and warranties by ArgentBank
regarding, among other things, its organization, authority to enter into the
Agreement, capital structure, properties and other assets, insurance policies,
financial statements, pending and threatened litigation or other proceedings,
contractual obligations, contingent liabilities, conflicts, taxes, loans,
benefit plans, investments and environmental matters. The Agreement also
contains representations and warranties by Hibernia regarding, among other
things, its organization and authority to enter into the Agreement,
capitalization, pending and threatened litigation or other proceedings,
accounting methods, financial statements and other public reports and benefit
plans. The representations and warranties of ArgentBank and Hibernia generally
will not survive the Effective Date.
The obligations of Hibernia and ArgentBank to consummate the Merger are
conditioned upon approval of the Agreement by ArgentBank's shareholders; the
receipt of necessary regulatory approvals; the receipt of an opinion to the
effect that the Merger, when consummated in accordance with the terms of the
Agreement, will constitute a reorganization within the meaning of Section 368 of
the Code and that, to the extent ArgentBank Common Stock is exchanged for
Hibernia Common Stock, ArgentBank's shareholders will recognize no gain or loss
for federal income tax purposes with respect to such exchange; the effectiveness
under the Securities Act of a registration statement relating to the Hibernia
Common Stock to be issued in connection with the Merger and the absence of a
stop order suspending such effectiveness; the accuracy of the representations
and warranties of both parties to the Merger as of the Closing Date; the listing
of the Hibernia Common Stock to be issued in the Merger on the NYSE; the
ArgentBank directors shall have unanimously approved the Merger and the
Agreement and recommended approval thereof to ArgentBank's shareholders, and
such directors shall have voted their shares in favor of the Merger and
Agreement; the receipt of certain customary legal opinions of counsel; in the
case of ArgentBank, the receipt of the fairness opinion of Chase; and in the
case of Hibernia, the ability to account for the Merger as a pooling of
interests; that between the date of the Agreement and the Closing Date there
shall not have been a material adverse change in the financial condition,
results of operations or business of Hibernia or ArgentBank taken as a whole;
and that parties have performed their obligations contemplated by the Merger
Agreement.
Except with respect to any required shareholder or regulatory approval,
substantially all of the conditions to consummation of the Merger may be waived
at any time by the party for whose benefit they were created, and the Agreement
may be amended or supplemented at any time by written agreement of the parties,
except that no such waiver, amendment or supplement executed after approval of
the Agreement by ArgentBank's shareholders may change the aggregate number of
shares to be received in the Merger.
Regulatory Approvals
Hibernia, as a registered bank holding company, is regulated by the
Federal Reserve Board. HNB, as a national banking association, is regulated by
the OCC, and the Merger consequently must be approved by the OCC before it may
be effected. HNB filed an application seeking the approval of the Merger by the
OCC in October of 1997.
After the approval of the OCC has been obtained, the parties must wait at
least 15 days before consummating the Merger. In addition to OCC approval, the
Department of Justice (the "Department") may object to the Merger on antitrust
grounds. If the Department requires or requests that Hibernia divest of deposits
or loans, and the parties agree to so divest, the Exchange Ratio may be
affected. See "Representations and Warranties; Conditions to the Merger;
Waiver", and "Consideration to be Received in the Merger."
The regulatory approval sought in connection with the Merger may be
obtained or denied prior to or after the Meeting. The vote on the Merger at the
Meeting is not dependent or conditioned upon receipt of any such approval prior
to the Meeting. Even if the Merger is approved at the Meeting, there is a
possibility that it will not be consummated because of a failure to receive
regulatory approval or the failure to satisfy another condition to closing. A
number of the conditions to closing may be waived by the parties; however,
failure to receive the requisite regulatory approval is not waivable and will
result in a termination of the Agreement, regardless whether the Merger is
approved at the Meeting.
Business Pending the Merger
Under the terms of the Agreement, ArgentBank may not (other than certain
limited exceptions), without the prior written consent of Hibernia or as
otherwise provided in the Agreement, among other things: (i) create, issue or
sell any additional shares of capital stock or any options or other rights to
purchase or acquire shares of capital stock; (ii) enter into any employment
contracts with, increase the compensation of or pay any bonus to, any of
ArgentBank's directors, officers, or employees, other than in accordance with
existing policy or past practice; (iii) enter into or substantially modify any
employee benefits plans; (iv) establish any automatic teller machines, branches
or other banking offices; (v) sell, pledge, dispose of, or encumber, or agree to
sell, pledge, dispose of, or encumber, any assets; (vi) merge with or acquire
any other company or bank or liquidate or otherwise dispose of its assets
outside the ordinary course of its business; or (vii) acquire another company or
bank (except in a fiduciary capacity or in connection with foreclosures related
to bona fide loan transactions).
ArgentBank is also prohibited by the terms of the Agreement from declaring,
setting aside or paying dividends or other distributions with respect to its
capital stock; provided, however, that ArgentBank shall be entitled, to the
extent lawfully permitted, to declare and pay dividends (at the customary time
each quarter) for the purpose of allowing ArgentBank's shareholders to receive
the normal and customary third quarter 1997 dividend in the amount of $.14 per
outstanding share of ArgentBank Common Stock and the fourth quarter 1997
dividend in the amount of $.15 per outstanding share of ArgentBank Common Stock,
and thereafter to continue to declare and pay normal and customary quarterly
dividends in the amount of $.15 per outstanding share of ArgentBank Common
Stock.
Effective Date of the Merger; Termination
The closing of the Merger (the "Closing," and the date thereof, the
"Closing Date") will occur on a date that is mutually agreed to by the parties
that is within fifteen days after the later of: (i) the date that falls 15 days
after the receipt of all applicable regulatory approvals relating to the Merger;
(ii) the expiration of all applicable statutory and regulatory waiting periods;
or (iii) the date that the Registration Statement filed with the Commission is
declared effective. The parties may agree to close the Merger on any later date.
The Merger will become effective at the date and time set forth in a certificate
issued by OCC.
The Agreement may be terminated prior to the Closing Date by either
party, whether before or after approval of the Agreement by the ArgentBank
shareholders: (i) if there is a breach by the other party of any representation
or warranty which results in a material increase in the cost of the
non-breaching party's performance of the Agreement; (ii) regulatory approvals
are not obtained, or any material condition is imposed for approval which is not
acceptable to the parties; (iv) if the shareholders of ArgentBank fail to
approve the Merger; (v) if there is a material adverse change in the financial
condition of either party; (vi) if the Merger is not consummated by April 30,
1998; or (vii) by mutual consent of the parties.
The Agreement may also be terminated by Hibernia if the holders of more
than 10% of the ArgentBank Common Stock exercise and perfect dissenters' rights
or if the Merger otherwise does not qualify for pooling of interests accounting
treatment.
The Agreement may be terminated by ArgentBank if: (i) it has not
received a written fairness opinion from Chase or if such opinion is not updated
or is withdrawn by Chase prior to the Closing Date; (ii) it has not received an
opinion from counsel as to certain tax aspects of the transactions contemplated
by the Agreement; (iii) if ArgentBank Common Stock has been issued to Hibernia
pursuant to any exercise of the Stock Option Agreement and at the time scheduled
for Closing, all or any portion of such ArgentBank Common Stock held by Hibernia
would not be cancelled by virtue of the Merger, or (iv) ArgentBank and its
directors receive a written opinion of counsel informing it that the closing of
the transaction would constitute a breach of fiduciary duty.
Management and Operations After the Merger
On the Effective Date, ArgentBank will be merged with and into HNB, and
the separate existence of ArgentBank will cease. The offices of ArgentBank will
thereafter be operated as branch banking offices of HNB. The employees of
ArgentBank on the Effective Date will become employees of HNB, and will be
employed on an "at will" basis thereafter, subject to any existing employment
agreements or similar contractual obligations assumed or entered into by
Hibernia or HNB in accordance with the Agreement.
The directors of ArgentBank will cease to serve as directors thereof as
of the Effective Date. The Boards of Directors of Hibernia and HNB following the
Merger will consist of those persons serving as directors immediately prior
thereto; provided, however, that within 30 days of the Closing Date, the
Agreement provides that Hibernia's Board of Directors shall appoint Dr. James
Peltier to the Board of Directors of Hibernia and HNB, and shall elect him to
the Board of Directors of HNB and nominate and recommend him for election to the
Board of Directors of Hibernia until he reaches the customary retirement age
pursuant to Hibernia's normal policy for its directors.
Certain information regarding the directors of Hibernia elected at its
annual meeting of shareholders on April 29, 1997 is contained in documents
incorporated herein by reference. See "Available Information" and
"Incorporation by Reference."
Comparison of Rights of Shareholders
If the shareholders of ArgentBank approve the Merger and the Merger is
subsequently consummated, all holders of ArgentBank Common Stock, other than any
shareholders who exercise and perfect dissenters' rights, will become
shareholders of Hibernia. As shareholders of Hibernia, their rights will be
governed by and subject to Hibernia's Articles of Incorporation and Bylaws and
the Louisiana Business Corporation Law ("LBCL"), rather than ArgentBank's
Articles of Incorporation and Bylaws and the Louisiana Banking Law. The
following is a summary of the principal differences between the rights of
shareholders of ArgentBank and Hibernia not described elsewhere in this Proxy
Statement/Prospectus. This summary is qualified in its entirety by reference to
the Articles of Incorporation and Bylaws of ArgentBank and the Articles of
Incorporation and Bylaws of Hibernia, as well as the Louisiana Banking Law and
the LBCL.
Number and Classes of Shares. Hibernia's Articles of Incorporation
authorize 200,000,000 shares of common stock and 100,000,000 shares of preferred
stock. The Hibernia Board of Directors has the authority to determine the
designations, voting powers, preferences and relative participating, option or
other special rights, and the qualifications, limitations or restrictions on
such shares of preferred stock. Consequently, shares of preferred stock could be
issued in circumstances which would make an attempted acquisition of Hibernia
more difficult. Hibernia currently has 2,000,000 shares of preferred stock
outstanding. The holders of those preferred shares are entitled to receive
dividends on a quarterly basis and would have limited voting rights if the
dividends on their stock were not paid for a certain period of time. If those
voting rights were triggered, the preferred shareholders may be able to elect a
director to the Board of Directors of Hibernia.
The Articles of Incorporation of ArgentBank authorize 16,000,000 shares
of common stock, and no shares of preferred stock.
Directors. Hibernia's Articles of Incorporation provide that the number
of directors is determined by reference to the Hibernia Bylaws. The Bylaws
provide that the exact number of directors is the number determined, from time
to time, by resolution of the Board of Directors. Currently, such resolution
calls for 19 directors. Such resolution can be modified or repealed at any time
by the Board of Directors. Hibernia's Board is divided into three classes, each
of which is elected for a three-year term.
The ArgentBank Articles of Incorporation provide for a Board of
Directors of between 15 and 25 persons. Presently, there are 22 directors.
Nominations for election for up to 25 persons to the Board of Directors may be
made by the Board of Directors or by a shareholder or shareholders owning in the
aggregate 10% of the outstanding stock of ArgentBank.
Qualification of Directors. The Bylaws of Hibernia provide that all
directors must meet certain criteria as to age, number of shares of voting
securities held, and non-affiliation with competitors in order to serve on the
Board of Directors. No individual will be elected a director of Hibernia unless
such individual owns, in his or her own right, at the time of such election, not
less than 100 shares of Hibernia voting stock. No individual will be eligible
for election as a director of Hibernia who has attained the age of 71 prior to
the date of such election or who is or becomes a business competitor or who is
or becomes affiliated with, employed by or a representative of any individual,
corporation, association, partnership, firm, business enterprise or other entity
determined to be a competitor. Any financial institution having branches or
affiliates within any state within which Hibernia or any of its subsidiaries
operates or which has (together with affiliates) total assets or total deposits
exceeding $500 million will be presumed to be a business "competitor" of
Hibernia, unless the Hibernia Board of Directors determines otherwise.
To be elected as an ArgentBank director, one must be a United States
citizen, a resident of Louisiana and must own at least 1,200 shares of unpledged
ArgentBank Common Stock.
Removal of Directors. Hibernia's Bylaws provide that a director may be
removed by the Board of Directors for cause, if he is interdicted or adjudicated
an incompetent or bankrupt, is unable to perform his duties for six months or
becomes affiliated with a competitor of Hibernia. Shareholders may remove a
director by vote of two-thirds of the total voting power, or by a majority of
the voting power if removed for cause. "Cause" is defined in the Hibernia Bylaws
to mean gross negligence or willful misconduct.
The Bylaws of ArgentBank provide that directors of ArgentBank may be
removed or his position declared vacant if such director is interdicted or
adjudicated an incompetent, is adjudicated bankrupt, becomes incapacitated for
six month or ceases to have the qualifications required by the Articles of
Incorporation or ArgentBank Bylaws. Pursuant to the Louisiana Banking Law, the
ArgentBank shareholders may remove any one or more directors from office by the
vote of a majority of the total voting power at any meeting called for that
purpose.
Vacancies in the Board of Directors. Hibernia's Bylaws permit the Board
of Directors to fill any vacancy therein, however created.
Any vacancy on the ArgentBank Board may be filled by the remaining
directors or by the shareholders at a special meeting called for such purpose.
Inspection Rights. Under the Louisiana Business Corporation Law, upon at
least five days written notice, any shareholder of Hibernia, except a business
competitor, who is and has been the holder of record of at least five percent of
the outstanding shares of any class of a corporation for at least six months has
the right to examine, in person or by agent or attorney, at any reasonable time,
for any proper and reasonable purpose, any and all the records and accounts of
the corporation and to make extracts therefrom. Louisiana law allows two or more
shareholders, each of whom has been a holder of record for six months, whose
aggregate holdings equal five percent, to inspect the records.
Under the Louisiana Banking Law, every shareholder (or combination of
two or more shareholders) of ArgentBank, except a business competitor of
ArgentBank, who has been the holder of record of at least two percent of all
outstanding shares of ArgentBank for at least six months has a right to examine,
in person or by agent or attorney, at any reasonable time and for any proper and
reasonable purpose, books showing the amount of common stock subscribed, the
names and residences of owners of shares, the amount of stock owned by each of
them, the amount of said stock paid and by whom, the last transfer of said stock
with the date of transfer, the names and residences of its officers, the records
of proceedings of shareholders, directors and of committees of the board, and
the Articles of Incorporation and Bylaws of ArgentBank. Every shareholder (or
combination of two or more shareholders), except a business competitor, who has
been a holder of record of at least twenty-five percent of all of the
outstanding shares of ArgentBank for at least six months shall have the right to
examine in person, by agent or attorney, at any reasonable time and for any
proper and reasonable purpose, any and all of the books and records of
ArgentBank, except files relating to credit information, loan transactions, and
deposit accounts of individual customers of Argentbank, which are deemed
confidential and not subject to shareholder inspection.
Merger or Consolidation. Hibernia's articles allow an agreement of
merger or consolidation to be approved by a majority vote of the voting shares
issued and outstanding taken at a meeting called for the purpose of such
approval.
ArgentBank's articles provide that any business combination or merger in
which ArgentBank is not the acquiror or surviving entity may be approved by a
majority vote of the shareholders if such combination has been previously
approved by at least two-thirds vote of the entire Board of Directors. If there
is no prior two-thirds approval by the Board, the vote of at least seventy-five
percent of the voting power of all outstanding and issued shares of ArgentBank
Common Stock is required to approve such a transaction.
Liquidity of Stock. ArgentBank Common Stock is traded on the American
Stock Exchange. Shares of Hibernia Common Stock are listed for trading on the
NYSE. Current quotes of the market price of Hibernia Common Stock are available
from brokerage firms and other securities professionals, as well as other
sources, and are published in major newspapers on a daily basis. Shares of
Hibernia Common Stock to be issued in the Merger may be freely resold by persons
who are not "affiliates" of ArgentBank or Hibernia. See "Resale of Hibernia
Common Stock," below.
Amendment of Articles and Bylaws. Hibernia's Articles of Incorporation
may be amended by vote of a majority of the voting power present at any meeting
called for that purpose.
ArgentBank's Articles of Incorporation generally may not be amended
without a vote of two-thirds of the voting power present at an annual or special
meeting. However, Article 10 relating to limitations of ownership of the
corporation, and Article 11 relating to business combinations, may not be
amended without a vote of seventy-five percent of all outstanding and issued
shares of ArgentBank Common Stock.
Hibernia's Bylaws may be amended or repealed by a vote of two-thirds of
the total voting power outstanding or by a vote of two-thirds of the "continuing
directors" of the company, as defined in the Bylaws. A "continuing director" for
this purpose is generally a director who was nominated for election by a
majority of the existing directors. The ArgentBank Bylaws may be amended or
repealed by the board of directors at any regular board meeting.
Special Meeting of Shareholders. Special meetings of the shareholders of
Hibernia may be called by the Chairman of the Board, the President, the Chief
Executive Officer, the Treasurer, or the Board of Directors. In addition,
shareholders holding one-fifth or more of the total voting power of Hibernia may
request a special meeting of the shareholders and, upon receipt of such request,
the Secretary of Hibernia is required to call a special meeting of the
shareholders.
Special meetings of the ArgentBank shareholders may be called at any
time by the Board of Directors and upon the request in writing by any
shareholder or shareholders holding in the aggregate one-fifth of the total
voting power.
Shareholder Proposals. Hibernia's Bylaws contain certain provisions that
allow shareholders to submit a proposal to be voted upon at any shareholders
meeting or to nominate an individual for election as a director only under
certain circumstances, and provided that the shareholder complies with all of
the conditions set forth in the Bylaws.
Proposals to be presented at any annual meeting of ArgentBank must be
received by ArgentBank not less than ninety days in advance of a date
corresponding to the date of ArgentBank's proxy statement released to the
shareholders in connection with the annual meeting of shareholders for the
previous year, except that if the date of the annual meeting has been changed by
more than thirty calendar days from the date of the annual meeting for the
previous year, a proposal shall be received by management in reasonable time
before the solicitation is made.
Interests of Certain Persons in the Merger
Indemnification of ArgentBank Directors. The Agreement includes certain
provisions that protect the officers and directors of ArgentBank from and
against liability for actions arising while they served in those capacities for
ArgentBank. The Agreement provides for indemnification of such persons to the
same extent as they would have been indemnified under the Articles of
Incorporation and/or Bylaws of HNB, as such documents were in effect on the date
of the Agreement, except that the Agreement limits Hibernia's aggregate
liability for such indemnification to $15 million and requires each officer and
director eligible for such indemnification to execute a joinder agreement in
which such person agrees to cooperate with Hibernia in any litigation or
proceeding giving rise to a claim of indemnification. The indemnification
provisions of the Agreement do not apply to claims the existence of which such
person knew or should have known, but failed to make a good faith effort to
require ArgentBank to notify its director and officer liability insurance
carrier prior to the Closing.
The Agreement also provides for indemnification of ArgentBank's
officers, directors and any person who controls ArgentBank within the meaning of
the Securities Act from and against any liability arising under the Securities
Act or otherwise, if such liability arises out of or is based upon an untrue
statement or omission of a material fact required to be stated in the
Registration Statement or necessary to make the statements made therein not
misleading. This indemnification does not apply to statements made in reliance
on information furnished to Hibernia by ArgentBank for use in the Registration
Statement. The Agreement sets no limit on the aggregate amount of Hibernia's
obligations to indemnify individuals for liability under the Securities Act.
Severance and Retention Benefits. All employees of ArgentBank at the
Effective Date shall become employees of HNB. At the Effective Date, all persons
then employed by ArgentBank shall be eligible for such employee benefits as are
generally available to employees of HNB having like tenure, officer status and
compensation levels, and all ArgentBank employees who are employed on the
Effective Date shall be given full credit for all prior service as employees of
ArgentBank for all purposes of Hibernia's or HNB's benefits plans. All
ArgentBank officers shall be given such benefits, including but not limited to
stock options, that are available to officers of Hibernia or HNB with like
tenure, officer status and compensation levels. See "The Merger -- Employee
Benefits."
Hibernia will pay severance benefits to any former ArgentBank employee
who, within twelve months from the Closing Date, either (i) is terminated
without cause, or (ii) resigns after such person is required to relocate to an
office more than 60 miles from the place of such person's employment (provided,
that a Hibernia or HNB office in the greater New Orleans area shall not be
deemed to be more than 60 miles from any ArgentBank office or branch), or (iii)
resigns after such persons has his or her working hours reduced to less than 30
hours per week. Hibernia shall pay such person severance benefits based upon:
(i) if the person has been employed by ArgentBank less than 2 years, the
severance shall be 3 weeks of current salary; or (ii) if employed 2 to 9 years,
the severance shall be 4 months of current salary; or (iii) if the person has
been employed 10 to 19 years, the severance shall be 5 months of current salary;
or (iv) if employed 20 or more years, the severance shall be 6 months of current
salary. Hibernia will make reasonable efforts to maintain compensation levels
for any retained personnel commensurate with the employee's experience and
qualifications, and in accordance with its salary administration program.
Employment Agreements and Transaction Bonuses. The Agreement provides
that on or before the Closing Date, Hibernia shall execute an employment
agreement with Randall E. Howard which provides for a term of at least three
years, with a guaranteed salary, salary increases in accordance with Hibernia's
existing salary administration procedures and based upon performance and
position within the relevant salary band. The parties anticipate executing a
four-year employment contract with Mr. Howard. Mr. Howard will also be entitled
to all benefits, including but not limited to stock options and a change in
control provision, in amounts equal to comparable executives at Hibernia.
Hibernia is also obligated to execute employment agreements with Gloria Navarro,
William B. Gautreaux, Hugh Hamilton and Robert Naquin for a term of two years on
similar terms (other than the level of the initial salary). Upon the Closing
Date, Hibernia will pay transaction bonuses in an aggregate amount not to exceed
$375,150 to no more than five officers, and Hibernia will pay to Mr. Howard a
transaction bonus in an amount mutually agreed by Mr. Howard and Hibernia. Mr.
Howard also intends to exercise certain Stock Appreciation Rights which were
granted to him by ArgentBank in 1995.
Employee Benefits
ArgentBank currently maintains the ArgentBank Pension Plan (the "Pension
Plan") which will remain operative and in effect until December 31, 1997, when
the Plan will be terminated and distributed to vested employees of ArgentBank.
ArgentBank also currently maintains the ArgentBank Savings (401-K) Plan
(the "401-K Plan") which will remain operative and in effect until the Closing
Date. After the Closing Date, the 401-K Plan will either be merged with the
appropriate plan of Hibernia with full credit granted for all prior service for
vesting, eligibility and benefit purposes or will be terminated and all accounts
distributed. Notwithstanding any termination, all retained employees will be
eligible to participate in all Hibernia and/or HNB employment benefit plans, and
will be granted full credit for all prior service for vesting, eligibility and
benefit purposes under all such plans. All other ArgentBank benefit plans will
continue through the Closing Date and will terminate on such date.
Expenses
The Agreement provides that all expenses incurred in connection with the
negotiation and execution of the Agreement and the consummation of the Merger
(other than printing expenses for the proxy materials and the issuance of
Hibernia Common Stock, which shall be borne by Hibernia), will be borne by the
party that incurred them, regardless of whether the Merger is consummated.
Material Tax Consequences
The following is a summary description of the material tax consequences
of the Merger to the shareholders of ArgentBank; it is not intended to be a
complete description of the federal, state or other income tax consequences of
the Merger. Tax laws are complex, and each shareholder's individual
circumstances may affect the tax consequences to such shareholder. No specific
analysis is provided with respect to the tax consequences of the Merger under
applicable state, local or other tax laws. Each shareholder is therefore urged
to consult a tax advisor regarding the tax consequences of the Merger to him,
her or it.
Consummation of the Merger is conditioned upon the receipt of an opinion
to the effect that the Merger, when consummated in accordance with the terms of
the Agreement, will constitute a reorganization within the meaning of Section
368 of the Code, and that the exchange of ArgentBank Common Stock for Hibernia
Common Stock will not give rise to the recognition of a gain or loss for federal
income tax purposes to ArgentBank's shareholders. The parties expect to receive
an opinion from Watkins Ludlam & Stennis, P.A. to the foregoing effects. A copy
of the proposed form of opinion is attached hereto as Appendix C.
If the Merger constitutes a reorganization within the meaning of Section
368 of the Code: (i) no gain or loss will be recognized by ArgentBank, Hibernia
or HNB by reason of the Merger; (ii) a shareholder of ArgentBank will not
recognize any gain or loss for federal income tax purposes to the extent shares
of Hibernia Common Stock are received in the Merger in exchange for shares of
ArgentBank Common Stock; (iii) the tax basis in shares of Hibernia Common Stock
received by a shareholder of ArgentBank will be the same as the tax basis in the
shares of ArgentBank Common Stock surrendered in exchange therefor; and (iv) the
holding period, for federal income tax purposes, for shares of Hibernia Common
Stock received in exchange for shares of ArgentBank Common Stock will include
the period during which the shareholder held the ArgentBank Common Stock
surrendered in the exchange, provided that the ArgentBank Common Stock was held
as a capital asset at the Effective Date.
There will be no fractional shares issued in connection with the Merger.
To the extent cash is received by ArgentBank shareholders in lieu of fractional
shares they will be treated as having received such fractional share pursuant to
the Merger, and then as having exchanged such fractional share for cash in a
partial redemption of such shareholder's interest in their stock subject to the
provisions and limitations of Section 302(a) of the Code. This will generally
result in the recognition of capital gain or loss depending upon the
shareholder's basis in the ArgentBank Common Stock surrendered, if the shares
surrendered were held as a capital asset. However, the amount of such cash, and
therefore the gain, will never exceed the market price of one share of Hibernia
Common Stock.
Cash received by a dissenting shareholder will be treated as a complete
redemption of the shareholder's interests in ArgentBank Common Stock, subject to
the provisions and limitations of Section 302(a) of the Code, with the result
that a holder who exercises statutory appraisal rights will recognize gain or
loss equal to the difference between the amount realized and such holder's tax
basis in the stock subject to the proceeding. Such redemption will generally be
subject to federal and state income tax as a capital gain or loss if the stock
with respect to which statutory appraisal rights were exercised was held as a
capital asset, and if after the deemed redemption such shareholder does not
constructively own any shares of ArgentBank Common Stock. Each shareholder who
contemplates exercising statutory appraisal rights in connection with the Merger
should consult his, her or its tax advisor as to the possibility that all or a
portion of the payment received pursuant to the appraisal proceeding will be
treated as dividend income. For more information regarding the income tax
consequences of cash payments received by dissenting shareholders. See "Rights
of Dissenting Shareholders."
The Louisiana income tax treatment of the Merger to the shareholders of
ArgentBank should generally be substantially the same as the federal income tax
treatment described above. Shareholders residing in states other than Louisiana
are encouraged to consult their tax advisors regarding the state income tax
implications of the Merger to them.
Unless an exemption applies under the applicable law and regulations,
the exchange agent or Hibernia will be required to withhold up to 31% of any
cash payments to which an ArgentBank shareholder is entitled pursuant to the
Merger unless the shareholder or other payee provides his taxpayer
identification number (social security number or employer identification number)
and certifies that such number is correct. Each shareholder and, if applicable,
each other payee should complete and sign the substitute Form W-9 included as
part of the transmittal letter (which will be delivered to shareholders after
the Closing) so as to provide the information and certification necessary to
avoid backup withholding, unless an applicable exemption exists and is
established in a manner satisfactory to the exchange agent.
Resale of Hibernia Common Stock
The shares of Hibernia Common Stock issuable to shareholders of
ArgentBank upon consummation of the Merger have been registered under the
Securities Act. It is a condition to the closing of the Merger that all shares
of Hibernia Common Stock issued in connection with the Merger be approved for
listing, upon official notice of issuance, on the NYSE. Such shares may be
traded freely by those shareholders not deemed to be an affiliate of ArgentBank
or Hibernia as that term is defined under the Securities Act. The term
"affiliate" generally means each person who controls, or who is under common
control with, ArgentBank or Hibernia, and for purposes hereof could be deemed to
include all executive officers, directors and 10% shareholders of ArgentBank and
Hibernia.
Rule 145 of the Securities Act imposes certain restrictions on the sale
of stock received in a merger or consolidation by an affiliate of the acquired
company, even if that person does not become an affiliate of the acquiring
company. Affiliates of ArgentBank will only be permitted to resell any Hibernia
shares received by them in the Merger if they register those shares for resale
or they comply with the restrictions of Rule 145. Anyone who is or may be an
affiliate of ArgentBank or Hibernia should carefully consider the resale
restrictions imposed by Rule 145 before he attempts to transfer any shares of
Hibernia Common Stock received in the Merger. In addition, shares of Hibernia
Common Stock issued to affiliates of ArgentBank in the Merger will not be
transferable until financial statements pertaining to at least 30 days of
post-Merger combined operations of Hibernia and ArgentBank have been published,
in order to satisfy certain requirements of the Commission relating to pooling
of interests accounting treatment.
Affiliates of ArgentBank have agreed not to dispose of ArgentBank Common
Stock or Hibernia Common Stock received in the Merger except in compliance with
the Securities Act, the rules and regulations promulgated thereunder, and the
Commisison's rules relating to pooling of interests accounting treatment.
Accounting Treatment
It is anticipated that the Merger will be accounted for as a "pooling of
interests" transaction. Among other requirements, in order for the Merger to
qualify for pooling of interests accounting treatment, 90% or more of the
outstanding ArgentBank Common Stock must be exchanged for Hibernia Common Stock.
Consequently, if holders of 10% or more of the outstanding ArgentBank Common
Stock exercise and perfect dissenters' rights, the Merger will not qualify for
pooling of interests accounting, and it is anticipated that Hibernia would
abandon or attempt to renegotiate the Merger. Also, in order to qualify for the
pooling of interests accounting treatment, "affiliates" of ArgentBank cannot
reduce their holdings of Hibernia Common Stock received in the Merger for a
period beginning on the Effective Date and ending upon the publication of at
least 30 days of post-Merger combined operations of ArgentBank and Hibernia.
Persons believed by ArgentBank to be "affiliates" have agreed to comply with
these restrictions. See "Resale of Hibernia Common Stock," above.
ArgentBank has agreed to use its best efforts to permit the transaction
to be accounted for as a pooling of interests. Hibernia is not obligated to
consummate the Merger if the Merger does not qualify for pooling-of-interests
accounting treatment.
RIGHTS OF DISSENTING SHAREHOLDERS
Because ArgentBank is merging with and into a national bank, each holder
of ArgentBank Common Stock who objects to the Merger is entitled to the rights
and remedies of dissenting shareholders under federal banking law provided in 12
U.S.C. 215a a copy of which is set forth as Appendix D hereto and should be read
in its entirety. Section 215a provides that shareholders of ArgentBank who vote
against the Merger or otherwise give notice in writing at or prior to the
Meeting that they dissent from the Merger shall be entitled to receive the value
of their shares held at the Effective Date upon written request at any time
before thirty days after the Effective Date. Prior to the Effective Date,
dissenting shareholders of ArgentBank should send their written notice to
William B. Gautreaux, Cashier, ArgentBank, 100 West Main, Thibodaux, Louisiana
70302-0819. On or within 30 days after the Effective Date, dissenting
Shareholders of ArgentBank should send such written request to Secretary,
Hibernia National Bank, at 313 Carondelet Street, New Orleans, Louisiana 70130.
Such written request must be accompanied by the surrender of their ArgentBank
stock certificates. All such communications should be signed by or on behalf of
the dissenting ArgentBank shareholders in the form appearing on their stock
certificates.
The value of the shares of any dissenting shareholder, will be
ascertained, as of the Effective Date, pursuant to the provisions of 215a(c)
which is set forth in Appendix D. Section 215a(c) generally provides that the
value of the shares of any dissenting shareholder shall be ascertained by an
appraisal made by a committee of three persons, composed of one person selected
by a vote of the majority of the dissenting shareholders; one person selected by
the directors of Hibernia; and one person selected by the two persons so
selected. The valuation agreed upon by any two of the three appraisers shall
govern. If the value so fixed shall not be satisfactory to any dissenting
shareholder who has requested payment, that shareholder may, within five days
after being notified of the appraised value of his shares, appeal to the OCC,
who shall cause a reappraisal to be made which shall be final and binding as to
the value of the shares of the appellant.
The amount received by a dissenting shareholder may be more or less
than, or equal to, the value of the Hibernia Common Stock received by other
ArgentBank shareholders in the Merger.
An ArgentBank shareholder must follow the exact procedure provided in 12
U.S.C. 215a in order to properly exercise his or her dissenters' rights and
rights of appraisal and avoid waiver of those rights.
THE FOREGOING SUMMARY OF THE PROVISIONS OF 12 U.S.C. 215a RELATING TO
DISSENTERS' RIGHTS IS NECESSARILY INCOMPLETE AND IS QUALIFIED IN ITS ENTIRETY BY
REFERENCE TO THE EXCERPTS OF SUCH PROVISIONS SET FORTH HEREIN AS APPENDIX D.
The cash paid to dissenting shareholders may be more or less than the
value of the Hibernia Common Stock issued to those shareholders of ArgentBank
who voted in favor of the Merger. Holders of ArgentBank Common Stock who
exercise and perfect dissenters' rights and who receive cash for their shares
will generally be subject to federal and state income tax on all or a portion of
the amount of cash received. The receipt of cash for shares will be generally
treated as a distribution in redemption of the shareholder's stock and,
depending on the individual shareholder's circumstances, may be deemed to be a
complete termination of interest, resulting in a capital gain or loss to such
shareholder. The tax opinion rendered by Watkins Ludlam & Stennis, P.A. and
attached hereto as Appendix C states that cash payments to dissenting
shareholders are not exempt from federal or state income tax. Shareholders
desiring to dissent from the Merger are urged to consult their tax advisors with
regard to the tax implications to them of exercising dissenters' rights.
<PAGE>
PRO FORMA FINANCIAL INFORMATION
The following unaudited pro forma combined balance sheet of Hibernia as
of September 30, 1997 and income statements of Hibernia for the nine-month
periods ended September 30, 1997 and 1996 and the years ended December 31, 1996,
1995 and 1994 give effect to the pending merger with ArgentBank, assuming the
Merger is accounted for using the pooling-of-interests method of accounting, and
as if the Merger had been consummated on January 1, 1994.
The information at September 30, 1997 and for the nine-month periods
ended September 30, 1997 and 1996 in the column titled "Hibernia Corporation" is
summarized from the unaudited consolidated financial statements of Hibernia
contained in Hibernia's Quarterly Report on Form 10-Q for the quarter ended
September 30, 1997.
For the years ended December 31, 1996, 1995 and 1994, information in
the column titled "Hibernia Corporation" is summarized from the consolidated
financial statements of Hibernia contained in Hibernia's Annual Report on Form
10-K for the year ended December 31, 1996. Information in the column titled
"Restated Hibernia Corporation" reflects the impact of the merger with Executive
Bancshares, Inc. on August 31, 1997, which was accounted for as a pooling of
interests.
The information contained in the column titled "ArgentBank" is based
on, and should be read in conjunction with the financial statements and related
notes and Management's Discussion and Analysis of Financial Condition and
Results of Operations of ArgentBank contained elsewhere in this Proxy
Statement/Prospectus.
The Pro Forma 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
mergers had been consummated in the past or which may be obtained in the future.
<PAGE>
Pro Forma Combined Balance Sheet (Unaudited)
The following unaudited pro forma combined balance sheet combines the
balance sheets of Hibernia and ArgentBank as if the Merger had been effective on
September 30, 1997. This unaudited pro forma combined balance sheet should be
read in conjunction with the financial statements and related notes of Hibernia
contained in Hibernia's Quarterly Report on Form 10-Q for the quarter ended
September 30, 1997 incorporated by reference into this Proxy
Statement/Prospectus, and the September 30, 1997 financial statements and
related notes of ArgentBank included elsewhere herein.
<PAGE>
<TABLE>
<CAPTION>
PRO FORMA COMBINED BALANCE SHEET
Hibernia Corporation and Subsidiaries
September 30, 1997
- --------------------------------------------------------------------------------------------------------------------------------
PRO PRO FORMA
HIBERNIA FORMA HIBERNIA
Unaudited ($ in thousands) CORPORATION ARGENTBANK ADJUSTMENTS CORPORATION
- --------------------------------------------------------------------------------------------------------------------------------
<S> <C> <C> <C>
ASSETS
Cash and due from banks .................................. $ 415,518 $ 24,314 $ 439,832
Short-term investments ................................... 240,555 45,600 286,155
Securities available for sale ............................ 2,010,247 176,117 $ 36,746 (B) 2,223,110
Securities held to maturity .............................. - 36,633 (36,633)(B) -
Loans, net of unearned income ............................ 7,041,630 451,360 7,492,990
Reserve for possible loan losses ..................... (113,796) (10,706) - (124,502)
- --------------------------------------------------------------------------------------------------------------------------------
Loans, net ....................................... 6,927,834 440,654 - 7,368,488
- --------------------------------------------------------------------------------------------------------------------------------
Bank premises and equipment .............................. 172,620 10,652 183,272
Customers' acceptance liability .......................... 821 - 821
Goodwill ................................................. 129,297 11,645 140,942
Other intangibles assets ................................. 22,931 - 22,931
Other assets ............................................. 161,270 12,453 (40)(B) 173,683
- --------------------------------------------------------------------------------------------------------------------------------
TOTAL ASSETS ..................................... $ 10,081,093 $ 758,068 $ 73 $ 10,839,234
================================================================================================================================
LIABILITIES
Deposits:
Demand, noninterest-bearing .......................... $ 1,465,049 $ 84,405 $ 1,549,454
Interest-bearing ..................................... 6,636,694 545,192 7,181,886
- --------------------------------------------------------------------------------------------------------------------------------
Total Deposits ................................... 8,101,743 629,597 8,731,340
- --------------------------------------------------------------------------------------------------------------------------------
Short-term borrowings .................................... 718,499 34,716 753,215
Liability on acceptances ................................. 821 - 821
Other liabilities ........................................ 142,969 7,566 150,535
Debt ..................................................... 106,777 - 106,777
- --------------------------------------------------------------------------------------------------------------------------------
TOTAL LIABILITIES ................................ 9,070,809 671,879 - 9,742,688
- --------------------------------------------------------------------------------------------------------------------------------
SHAREHOLDERS' EQUITY
Preferred Stock .......................................... 100,000 - 100,000
Common Stock ............................................. 250,919 653 $ 24,916 (A) 276,488
Surplus .................................................. 381,879 38,981 (24,916)(A) 395,944
Retained earnings ........................................ 285,596 45,553 331,149
Treasury stock ........................................... (643) - (643)
Unrealized gains (losses) on securities available for sale 10,808 1,002 73 (B) 11,883
Unearned compensation .................................... (18,275) - (18,275)
- --------------------------------------------------------------------------------------------------------------------------------
TOTAL SHAREHOLDERS' EQUITY ....................... 1,010,284 86,189 73 1,096,546
- --------------------------------------------------------------------------------------------------------------------------------
TOTAL LIABILITIES AND SHAREHOLDERS' EQUITY ....... $ 10,081,093 $ 758,068 $ 73 $ 10,839,234
================================================================================================================================
- ----------------
See notes to Pro Forma Combined Balance Sheet.
</TABLE>
<PAGE>
HIBERNIA CORPORATION
NOTES TO PRO FORMA COMBINED BALANCE SHEET
September 30, 1997
A. Hibernia plans to issue approximately 13,317,236 shares of Hibernia
Common Stock, with an aggregate market value at the date of the Merger
of $233,051,630 based upon an assumed market value of $17.50 per share,
in exchange for all the outstanding shares of ArgentBank Common Stock
at September 30, 1997 to effect the Merger with ArgentBank resulting in
an exchange rate of 2.04. The stated value of the Hibernia Common Stock
is $1.92 per share.
In accordance with the pooling-of-interests method of accounting, the
historical equities of the merged companies are combined for the
purposes of this pro forma combined balance sheet.
B. In accordance with Hibernia's investment policies, securities of
$36,633,000, with a market value of $36,746,000, classified as held to
maturity by ArgentBank will be reclassified by Hibernia as securities
available for sale. The impact on equity of the mark-to-market, net of
tax, is $73,000.
<PAGE>
Pro Forma Combined Income Statements (Unaudited)
The following unaudited pro forma combined income statements for the
nine months ended September 30, 1997 and 1996 and the years ended December 31,
1996, 1995, and 1994 combine the income statements of Hibernia and ArgentBank as
if the Merger had been effective on January 1, 1994 and reflect the impact of
the merger with Executive Bancshares, Inc. consummated in the third quarter of
1997 as discussed in Note A to the Pro Forma Combined Income Statements. The
unaudited pro forma combined income statements should be read in conjunction
with the consolidated financial statements and notes of Hibernia contained in
Hibernia's Quarterly Report on Form 10-Q for the quarter ended September 30,
1997 and Hibernia's Annual Report on Form 10-K for the year ended December 31,
1996, each incorporated by reference into this Proxy Statement/Prospectus, and
the financial statements and notes for the years ended December 31, 1996 and
1995 and the nine-month periods ended September 30, 1997 and 1996 of ArgentBank
contained elsewhere herein. The cost associated with the Merger, estimated to be
approximately $3,000,000, will be accounted for as a current period expense when
incurred.
<PAGE>
<TABLE>
<CAPTION>
HIBERNIA CORPORATION
PRO FORMA COMBINED INCOME STATEMENT
Nine months ended September 30, 1997
PRO FORMA
HIBERNIA HIBERNIA
Unaudited ($ in thousands, except per share data) CORPORATION ARGENTBANK CORPORATION
- ---------------------------------------------------------------------------------------------------------
<S> <C> <C> <C>
Interest income
Interest and fees on loans ................... $ 428,469 $ 25,778 $ 454,247
Interest on securities available for sale .... 106,313 9,349 115,662
Interest on securities held to maturity ...... - - -
Interest on short-term investments ........... 9,651 1,362 11,013
- ---------------------------------------------------------------------------------------------------------
Total interest income .................... 544,433 36,489 580,922
- ---------------------------------------------------------------------------------------------------------
Interest expense
Interest on deposits ......................... 210,770 14,559 225,329
Interest on short-term borrowings ............ 18,786 501 19,287
Interest on debt ............................. 1,692 - 1,692
- ---------------------------------------------------------------------------------------------------------
Total interest expense ................... 231,248 15,060 246,308
- ---------------------------------------------------------------------------------------------------------
Net interest income .............................. 313,185 21,429 334,614
Provision for possible loan losses ........... 64 - 64
- ---------------------------------------------------------------------------------------------------------
Net interest income after provision
for possible loan losses ...................... 313,121 21,429 334,550
- ---------------------------------------------------------------------------------------------------------
Noninterest income
Service charges on deposits .................. 51,828 2,121 53,949
Trust fees ................................... 10,878 34 10,912
Other service, collection and exchange charges 31,707 285 31,992
Other operating income ....................... 9,064 141 9,205
Securities gains (losses), net ............... 372 48 420
- ---------------------------------------------------------------------------------------------------------
Total noninterest income ................. 103,849 2,629 106,478
- ---------------------------------------------------------------------------------------------------------
Noninterest expense
Salaries and employee benefits ............... 130,761 6,534 137,295
Occupancy expense, net ....................... 22,863 1,014 23,877
Equipment expense ............................ 21,098 1,096 22,194
Data processing expense ...................... 16,270 1,635 17,905
Foreclosed property expense, net ............. (498) 40 (458)
Amortization of intangibles .................. 10,261 216 10,477
Other operating expense ...................... 65,828 4,335 70,163
- ---------------------------------------------------------------------------------------------------------
Total noninterest expense ................ 266,583 14,870 281,453
- ---------------------------------------------------------------------------------------------------------
Income before income taxes ....................... 150,387 9,188 159,575
Income tax expense ............................... 52,564 2,980 55,544
- ---------------------------------------------------------------------------------------------------------
Income from continuing operations ................ $ 97,823 $ 6,208 $ 104,031
=========================================================================================================
Income from continuing operations
applicable to common shareholders ............ $ 92,648 $ 6,208 $ 98,856
=========================================================================================================
Pro forma weighted average common shares ......... 128,458,086 13,317,236 141,775,322
=========================================================================================================
Pro forma income per common share from
continuing operations (B) ................... $ 0.72 $ 0.70
=========================================================================================================
- -------------
See notes to Pro Forma Combined Income Statements.
</TABLE>
<PAGE>
<TABLE>
<CAPTION>
HIBERNIA CORPORATION
PRO FORMA COMBINED INCOME STATEMENT
Nine months ended September 30, 1996
PRO FORMA
HIBERNIA HIBERNIA
Unaudited ($ in thousands, except per share data) CORPORATION ARGENTBANK CORPORATION
- ---------------------------------------------------------------------------------------------------------
<S> <C> <C> <C>
Interest income
Interest and fees on loans ................... $ 348,196 $ 19,779 $ 367,975
Interest on securities available for sale .... 104,309 10,435 114,744
Interest on securities held to maturity ...... - - -
Interest on short-term investments ........... 7,618 434 8,052
- ---------------------------------------------------------------------------------------------------------
Total interest income .................... 460,123 30,648 490,771
- ---------------------------------------------------------------------------------------------------------
Interest expense
Interest on deposits ......................... 179,351 12,574 191,925
Interest on short-term borrowings ............ 10,939 4 10,943
Interest on debt ............................. 1,248 - 1,248
- ---------------------------------------------------------------------------------------------------------
Total interest expense ................... 191,538 12,578 204,116
- ---------------------------------------------------------------------------------------------------------
Net interest income .............................. 268,585 18,070 286,655
Provision for possible loan losses ........... (12,490) (300) (12,790)
- ---------------------------------------------------------------------------------------------------------
Net interest income after provision
for possible loan losses ...................... 281,075 18,370 299,445
- ---------------------------------------------------------------------------------------------------------
Noninterest income
Service charges on deposits .................. 42,161 1,617 43,778
Trust fees ................................... 9,820 34 9,854
Other service, collection and exchange charges 25,048 295 25,343
Other operating income ....................... 7,585 282 7,867
Securities gains (losses), net ............... (5,470) 87 (5,383)
- ---------------------------------------------------------------------------------------------------------
Total noninterest income ................. 79,144 2,315 81,459
- ---------------------------------------------------------------------------------------------------------
Noninterest expense
Salaries and employee benefits ............... 119,694 5,700 125,394
Occupancy expense, net ....................... 20,163 895 21,058
Equipment expense ............................ 22,112 830 22,942
Data processing expense ...................... 16,088 1,281 17,369
Foreclosed property expense, net ............. (1,901) 3 (1,898)
Amortization of intangibles .................. 3,653 - 3,653
Other operating expense ...................... 58,253 3,490 61,743
- ---------------------------------------------------------------------------------------------------------
Total noninterest expense ................ 238,062 12,199 250,261
- ---------------------------------------------------------------------------------------------------------
Income before income taxes ....................... 122,157 8,486 130,643
Income tax expense ............................... 42,574 2,676 45,250
- ---------------------------------------------------------------------------------------------------------
=============
Income from continuing operations ................ $ 79,583 $ 5,810 $ 85,393
=========================================================================================================
Income from continuing operations
applicable to common shareholders ............ $ 79,583 $ 5,810 $ 85,393
=========================================================================================================
Pro forma weighted average common shares ......... 127,821,487 13,317,236 141,138,723
=========================================================================================================
Pro forma income per common share from
continuing operations (B) ................... $ 0.62 $ 0.61
=========================================================================================================
See notes to Pro Forma Combined Income Statements.
</TABLE>
<PAGE>
<TABLE>
<CAPTION>
HIBERNIA CORPORATION
PRO FORMA COMBINED INCOME STATEMENT
Year ended December 31, 1996
(A)
RESTATED PRO FORMA
HIBERNIA HIBERNIA HIBERNIA
Unaudited ($ in thousands, except per share data) CORPORATION CORPORATION ARGENTBANK CORPORATION
- -----------------------------------------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C>
Interest income
Interest and fees on loans ................... $ 477,299 $ 482,488 $ 27,145 $ 509,633
Interest on securities available for sale .... 138,549 140,723 13,423 154,146
Interest on securities held to maturity ...... - - - -
Interest on short-term investments ........... 9,780 10,550 724 11,274
- -----------------------------------------------------------------------------------------------------------------------------
Total interest income .................... 625,628 633,761 41,292 675,053
- -----------------------------------------------------------------------------------------------------------------------------
Interest expense
Interest on deposits ......................... 242,570 246,374 16,838 263,212
Interest on short-term borrowings ............ 15,288 15,287 5 15,292
Interest on debt ............................. 1,553 1,774 - 1,774
- -----------------------------------------------------------------------------------------------------------------------------
Total interest expense ................... 259,411 263,435 16,843 280,278
- -----------------------------------------------------------------------------------------------------------------------------
Net interest income .............................. 366,217 370,326 24,449 394,775
Provision for possible loan losses ........... (12,625) (12,460) (300) (12,760)
- -----------------------------------------------------------------------------------------------------------------------------
Net interest income after provision
for possible loan losses ...................... 378,842 382,786 24,749 407,535
- -----------------------------------------------------------------------------------------------------------------------------
Noninterest income
Service charges on deposits .................. 58,330 58,733 2,293 61,026
Trust fees ................................... 13,397 13,397 40 13,437
Other service, collection and exchange charges 33,985 34,045 410 34,455
Gain on sale of business lines ............... 517 517 - 517
Other operating income ....................... 9,436 9,664 292 9,956
Securities gains (losses), net ............... (5,306) (5,306) 151 (5,155)
- -----------------------------------------------------------------------------------------------------------------------------
Total noninterest income ................. 110,359 111,050 3,186 114,236
- -----------------------------------------------------------------------------------------------------------------------------
Noninterest expense
Salaries and employee benefits ............... 161,170 162,882 7,651 170,533
Occupancy expense, net ....................... 26,959 27,232 1,182 28,414
Equipment expense ............................ 28,735 29,052 1,202 30,254
Data processing expense ...................... 20,234 20,426 1,797 22,223
Foreclosed property expense, net ............. (1,743) (1,736) - (1,736)
Amortization of intangibles .................. 7,290 7,334 - 7,334
Other operating expense ...................... 77,088 78,064 4,781 82,845
- -----------------------------------------------------------------------------------------------------------------------------
Total noninterest expense ................ 319,733 323,254 16,613 339,867
- -----------------------------------------------------------------------------------------------------------------------------
Income before income taxes ....................... 169,468 170,582 11,322 181,904
Income tax expense ............................... 59,518 59,865 3,584 63,449
- -----------------------------------------------------------------------------------------------------------------------------
Income from continuing operations ................ $ 109,950 $ 110,717 $ 7,738 $ 118,455
=============================================================================================================================
Income from continuing operations
applicable to common shareholders ............ $ 108,210 $ 108,977 $ 7,738 $ 116,715
=============================================================================================================================
Pro forma weighted average common shares ......... 126,765,513 127,927,193 13,317,236 141,244,429
=============================================================================================================================
Pro forma income per common share from
continuing operations (B) ................... $ 0.85 $ 0.85 $ 0.83
=============================================================================================================================
- ---------------
See notes to Pro Forma Combined Income Statements.
</TABLE>
<PAGE>
<TABLE>
<CAPTION>
HIBERNIA CORPORATION
PRO FORMA COMBINED INCOME STATEMENT
Year ended December 31, 1995
(A)
RESTATED PRO FORMA
HIBERNIA HIBERNIA HIBERNIA
Unaudited ($ in thousands, except per share data) CORPORATION CORPORATION ARGENTBANK CORPORATION
- -----------------------------------------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C>
Interest income
Interest and fees on loans ................... $ 389,609 $ 394,278 $ 22,722 $ 417,000
Interest on securities available for sale .... 49,632 50,546 14,543 65,089
Interest on securities held to maturity ...... 116,237 117,110 - 117,110
Interest on short-term investments ........... 7,368 7,603 904 8,507
- -----------------------------------------------------------------------------------------------------------------------------
Total interest income .................... 562,846 569,537 38,169 607,706
- -----------------------------------------------------------------------------------------------------------------------------
Interest expense
Interest on deposits ......................... 226,669 229,592 14,833 244,425
Interest on short-term borrowings ............ 13,791 13,809 1 13,810
Interest on debt ............................. 1,630 1,827 - 1,827
- -----------------------------------------------------------------------------------------------------------------------------
Total interest expense ................... 242,090 245,228 14,834 260,062
- -----------------------------------------------------------------------------------------------------------------------------
Net interest income .............................. 320,756 324,309 23,335 347,644
Provision for possible loan losses ........... 1,140 1,260 (1,000) 260
- -----------------------------------------------------------------------------------------------------------------------------
Net interest income after provision
for possible loan losses ...................... 319,616 323,049 24,335 347,384
- -----------------------------------------------------------------------------------------------------------------------------
Noninterest income
Service charges on deposits .................. 48,715 49,063 2,071 51,134
Trust fees ................................... 12,498 12,498 - 12,498
Other service, collection and exchange charges 28,673 28,818 460 29,278
Gain on divestiture of banking offices ....... 2,361 2,361 - 2,361
Gain on sale of business lines ............... 3,402 3,402 - 3,402
Other operating income ....................... 8,317 8,450 81 8,531
Securities gains (losses), net ............... 248 227 579 806
- -----------------------------------------------------------------------------------------------------------------------------
Total noninterest income ................. 104,214 104,819 3,191 108,010
- -----------------------------------------------------------------------------------------------------------------------------
Noninterest expense
Salaries and employee benefits ............... 136,804 138,077 7,336 145,413
Occupancy expense, net ....................... 26,501 26,761 1,096 27,857
Equipment expense ............................ 21,648 21,968 1,036 23,004
Data processing expense ...................... 19,373 19,493 1,457 20,950
Foreclosed property expense, net ............. (699) (693) 3 (690)
Amortization of intangibles .................. 3,709 3,709 - 3,709
Other operating expense ...................... 76,742 77,522 4,808 82,330
- -----------------------------------------------------------------------------------------------------------------------------
Total noninterest expense ................ 284,078 286,837 15,736 302,573
- -----------------------------------------------------------------------------------------------------------------------------
Income before income taxes ....................... 139,752 141,031 11,790 152,821
Income tax expense ............................... 10,867 11,333 3,716 15,049
- -----------------------------------------------------------------------------------------------------------------------------
Income from continuing operations ................ $ 128,885 $ 129,698 $ 8,074 $ 137,772
=============================================================================================================================
Income from continuing operations
applicable to common shareholders ............ $ 128,885 $ 129,698 $ 8,074 $ 137,772
=============================================================================================================================
Pro forma weighted average common shares ......... 126,880,767 128,042,447 13,317,236 141,359,683
=============================================================================================================================
Pro forma income per common share from
continuing operations (B) ................... $ 1.02 $ 1.01 $ 0.97
=============================================================================================================================
- ---------------
See notes to Pro Forma Combined Income Statements.
</TABLE>
<PAGE>
<TABLE>
<CAPTION>
HIBERNIA CORPORATION
PRO FORMA COMBINED INCOME STATEMENT
Year ended December 31, 1994
(A)
RESTATED PRO FORMA
HIBERNIA HIBERNIA HIBERNIA
Unaudited ($ in thousands, except per share data) CORPORATION CORPORATION ARGENTBANK CORPORATION
- -----------------------------------------------------------------------------------------------------------------------------
Interest income
<S> <C> <C> <C> <C>
Interest and fees on loans ................... $ 307,545 $ 311,134 $ 18,106 $ 329,240
Interest on securities available for sale .... 53,134 55,107 16,121 71,228
Interest on securities held to maturity ...... 111,325 111,325 - 111,325
Interest on short-term investments ........... 7,941 8,105 454 8,559
- -----------------------------------------------------------------------------------------------------------------------------
Total interest income .................... 479,945 485,671 34,681 520,352
- -----------------------------------------------------------------------------------------------------------------------------
Interest expense
Interest on deposits ......................... 169,633 171,887 11,877 183,764
Interest on short-term borrowings ............ 6,225 6,226 11 6,237
Interest on debt ............................. 2,971 3,161 - 3,161
- -----------------------------------------------------------------------------------------------------------------------------
Total interest expense ................... 178,829 181,274 11,888 193,162
- -----------------------------------------------------------------------------------------------------------------------------
Net interest income .............................. 301,116 304,397 22,793 327,190
Provision for possible loan losses ........... (17,869) (17,826) (2,091) (19,917)
- -----------------------------------------------------------------------------------------------------------------------------
Net interest income after provision
for possible loan losses ...................... 318,985 322,223 24,884 347,107
- -----------------------------------------------------------------------------------------------------------------------------
Noninterest income
Service charges on deposits .................. 47,139 47,499 1,952 49,451
Trust fees ................................... 13,092 13,092 4 13,096
Other service, collection and exchange charges 22,487 22,503 566 23,069
Other operating income ....................... 12,129 12,329 100 12,429
Securities gains (losses), net ............... (1,669) (1,672) 496 (1,176)
- -----------------------------------------------------------------------------------------------------------------------------
Total noninterest income ................. 93,178 93,751 3,118 96,869
- -----------------------------------------------------------------------------------------------------------------------------
Noninterest expense
Salaries and employee benefits ............... 133,002 134,111 7,500 141,611
Occupancy expense, net ....................... 28,338 28,537 1,419 29,956
Equipment expense ............................ 17,871 18,108 1,058 19,166
Data processing expense ...................... 21,231 21,331 1,214 22,545
Foreclosed property expense, net ............. (7,064) (7,034) 2 (7,032)
Amortization of intangibles .................. 23,231 23,231 - 23,231
Other operating expense ...................... 86,309 87,128 5,087 92,215
- -----------------------------------------------------------------------------------------------------------------------------
Total noninterest expense ................ 302,918 305,412 16,280 321,692
- -----------------------------------------------------------------------------------------------------------------------------
Income before income taxes ....................... 109,245 110,562 11,722 122,284
Income tax expense ............................... 7,785 8,227 3,720 11,947
- -----------------------------------------------------------------------------------------------------------------------------
Income from continuing operations ................ $ 101,460 $ 102,335 $ 8,002 $ 110,337
=============================================================================================================================
Income from continuing operations
applicable to common shareholders ............ $ 101,460 $ 102,335 $ 8,002 $ 110,337
=============================================================================================================================
Pro forma weighted average common shares ......... 127,595,944 128,757,624 13,317,236 142,074,860
=============================================================================================================================
Pro forma income per common share from
continuing operations (B) ................... $ 0.80 $ 0.79 $ 0.78
=============================================================================================================================
- ---------------
See notes to Pro Forma Combined Income Statements.
</TABLE>
<PAGE>
HIBERNIA CORPORATION
NOTES TO PRO FORMA COMBINED INCOME STATEMENTS
A. On August 31, 1997, Hibernia Corporation merged with Executive
Bancshares, Inc. in a transaction accounted for as a pooling of
interests. Hibernia issued 1,161,680 shares of Hibernia Common Stock in
such transaction, with a market value of $16,837,390.
B. Hibernia expects to achieve savings through reductions in operating
costs in connection with the Merger. 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.
CERTAIN INFORMATION ABOUT HIBERNIA
Hibernia is a Louisiana corporation registered under the BHCA. As of
September 30, 1997, Hibernia had total consolidated assets of approximately
$10.1 billion and shareholders' equity of approximately $1 billion. As of
September 30, 1997, Hibernia was based on total assets, the largest bank holding
company headquartered in Louisiana. Hibernia currently has two banking
subsidiaries, HNB, a national banking association that provides retail and
commercial banking services through approximately 202 banking offices throughout
Louisiana and ranked, on the basis of total assets, as the largest bank
headquartered in Louisiana, and HNBT, which provides retail and commercial
banking services through 12 banking offices in four Texas counties. The
principal executive offices of Hibernia are located at 313 Carondelet Street,
New Orleans, Louisiana 70130, and its telephone number is (504) 533- 5532.
Further information concerning the business of Hibernia, its financial
condition, management, principal shareholders, its merger activity, payment of
dividends and certain other information has been incorporated by reference into
this Proxy Statement/Prospectus. See "Available Information" and "Incorporation
by Reference."
Supervision and Regulation
General. As a bank holding company, Hibernia is subject to the
regulation and supervision of the Federal Reserve Board. Under the BHCA, bank
holding companies may not directly or indirectly acquire the ownership or
control of more than 5% of the voting shares or substantially all of the assets
of any company, including a bank, without the prior approval of or notification
to the Federal Reserve Board depending on the transaction. In addition, bank
holding companies are generally prohibited under the BHCA from engaging in
nonbanking activities, subject to certain exceptions.
Hibernia's banking subsidiaries, HNB and HNBT, are national banking
associations subject to the regulation and supervision of the OCC. HNB and HNBT
are also subject to various requirements and restrictions under federal and
state law, including requirements to maintain reserves against deposits,
restrictions on the types and amounts of loans that may be granted and the
interest that may be charged thereon and limitations on the types of investments
that may be made and the types of services that may offered. Various consumer
laws and regulations also affect the operations of HNB and HNBT. In addition to
the impact of such regulation, commercial banks are affected significantly by
the actions of the Federal Reserve Board as it attempts to control the money
supply and credit availability in order to influence the economy.
Payment of Dividends. Hibernia generally depends upon payment of dividends
by HNB and HNBT in order to pay dividends to its shareholders and to meet its
other needs for cash to pay expenses. Hibernia derives substantially all of its
income from the payment of dividends by HNB and HNBT, and its ability to pay
dividends is affected by the ability of HNB and HNBT to pay dividends. HNB and
HNBT are subject to various statutory restrictions on their ability to pay
dividends to Hibernia. Under such restrictions, the amount available for payment
of dividends to Hibernia by HNB was approximately $221 million and by HNBT was
approximately $4.6 million at September 30, 1997. In addition, the OCC has the
authority to prohibit any national bank from engaging in an unsafe or unsound
practice, and the OCC has indicated its view that it generally would be an
unsafe and unsound practice to pay dividends if the payment of the dividend
would deplete a bank's capital to an inadequate level. The ability of HNB and
HNBT to pay dividends in the future is presently, and could be further,
influenced by bank regulatory policies and by capital guidelines. Additional
information in this regard is contained in documents incorporated by reference
herein.
In addition, consistent with its policy regarding bank holding companies
serving as a source of strength for their subsidiary banks, the Federal Reserve
Board has stated that, as a matter of prudent banking, a bank holding company
generally should not maintain a rate of cash dividends unless its net income
available to common shareholders has been sufficient to fully fund the
dividends, and the prospective rate of earnings retention appears to be
consistent with the holding company's capital needs, asset quality and overall
financial condition.
Restrictions on Extensions of Credit. HNB and HNBT are subject to
restrictions imposed by federal law on the ability of any national bank to
extend credit to affiliates, including Hibernia, to purchase the assets thereof,
to issue a guarantee, acceptance or letter of credit on their behalf (including
an endorsement or standby letter of credit) or to purchase or invest in the
stock or securities thereof or to take such stock or securities as collateral
for loans to any borrower. Such extensions of credit and issuances generally
must be secured by eligible collateral and are generally limited to 15% of HNB's
and HNBT's capital and surplus.
Merger Activity
In 1996, Hibernia completed five acquisitions, two in Louisiana and one
in Texas which were accounted for as poolings of interests, and two in Louisiana
which were accounted for as purchase transactions. On August 31, 1997 Hibernia
consummated the acquisition of Executive Bancshares, Inc. ("Executive") in a
transaction accounted for as a pooling of interests. Executive operates 3
banking offices in northeast Texas and had $138 million in consolidated assets
and $8 million in shareholders' equity as of June 30, 1997. On November 7, 1997
Hibernia consummated the acquisition of Unicorp Bancshares - Texas, Inc.
("Unicorp") which was also accounted for as a pooling of interests. Unicorp
operates 3 banking offices in southeast Texas and has $119 million in
consolidated assets and $7 million in shareholders' equity as of September 30,
1997.
Hibernia has also entered into definitive merger agreements with two other
financial institutions in addition to ArgentBank: Northwest Bancshares of
Louisiana, Inc. ("Northwest") and Firstshares of Texas, Inc. ("Firstshares") in
northeast Texas. As of September 30, 1997 Northwest had total consolidated
assets of $105 million and total shareholders' equity of $12 million. On such
date Firstshares had $289 million of total consolidated assets and $25 million
in shareholder' equity. The consummation of each of the two pending transactions
is subject to certain conditions, similar to the conditions to the Merger
described herein. These pending transactions may be consummated, if at all,
before or after consummation of the Merger. Shareholders of ArgentBank will not
have the right to vote on any of the other pending transactions. Additional
information on Hibernia's merger activity since mid-1994 may be found in
documents incorporated by reference herein. See "Available Information" and
"Incorporation by Reference."
CERTAIN INFORMATION ABOUT ARGENTBANK
General
ArgentBank is a Louisiana state nonmember bank established in 1910 and
headquartered in Thibodaux, Louisiana. At September 30, 1997 ArgentBank had
total assets of approximately $758 million and total shareholders' equity of
approximately $86.2 million.
ArgentBank is community oriented and focuses primarily on offering real
estate, commercial, consumer and mortgage loans and deposit services to
individuals and small to middle market businesses in its market area. Other
services provided include checking, time deposit and savings accounts, safe
deposit vaults, installment collections, cash management and government and
municipal bond transactions. ArgentBank's operating strategy is to provide its
customers with the financial sophistication and breadth of products of a
regional bank while successfully retaining the local appeal and level of service
of a community bank.
Citizens Bank of Lafourche was organized on April 19, 1910. On February
28, 1929 Citizens Bank of Lafourche and the Bank of Lafourche merged and became
Citizens Bank & Trust Company. Citizens Bank & Trust Company merged with
Lafourche National Bank on October 1, 1987 and changed its name to First
Interstate Bank of Southern Louisiana. At the time of the acquisition, Lafourche
National Bank had total assets of approximately $115 million, total deposits of
approximately $104 million, total loans of approximately $51 million, seven
banking facilities and two ATMs.
In May 1990, First Interstate Bank of Southern Louisiana acquired
certain assets and accrued the insured deposits of Peoples Federal Savings and
Loan Association, Thibodaux, Louisiana from the Resolution Trust Corporation. As
a result of this transaction, First Interstate Bank of Southern Louisiana
acquired approximately $18 million in total assets and $17 million in total
deposits.
In April 1993, First Interstate Bank of Southern Louisiana changed its
name to ArgentBank.
In June 1997, ArgentBank acquired Assumption Bank located in
Napoleonville, Louisiana. At the time of acquisition, Assumption Bank had
consolidated assets of approximately $112 million, total deposits of
approximately $101 million, total loans of approximately $61 million, five
banking facilities and five ATMs. The acquisition gave ArgentBank 20 total
banking facilities (after closing two branches) and 18 ATMs (after closing 2
ATMs), and as of June 30, 1997 increased its total assets to approximately
$759.6 million, total deposits to approximately $641 million and total loans to
approximately $437 million.
Business
ArgentBank is a commercial bank having its principal offices in
Thibodaux, Louisiana. During 1996 ArgentBank opened two new full-service
branches in Terrebonne Parish, closed its Baton Rouge and New Orleans branches,
selling the associated deposits and building facilities. ArgentBank continues to
operate loan production offices servicing the Baton Rouge and New Orleans areas.
During 1996 and 1997, ArgentBank installed six new ATMs giving ArgentBank a
total of eighteen currently throughout the region.
The acquisition of Assumption Bank resulted in the addition of four
full-service branches in Assumption Parish, Louisiana and one branch in LaPlace,
Louisiana.
Both federal and state laws extensively regulate various aspects of the
banking industry, including requirements regarding the maintenance of reserves
against deposits, limitations on the rates that can be charged on loans, and
restrictions on the nature and amounts of loans and investments that can be
made.
As a state bank, ArgentBank is subject to the supervisory authority of
the Louisiana Commissioner of Financial Institutions, whose office conducts
periodic examinations of ArgentBank. As a federally-insured bank, ArgentBank is
also subject to supervision and regulation by the FDIC. The foregoing regulation
is primarily intended to protect ArgentBank's creditors and depositors rather
than ArgentBank's security holders. ArgentBank is subject to the Exchange Act
and files reports with the FDIC under provisions of the Exchange Act.
Competition
The relevant geographic market for ArgentBank consists of (i) the
Houma-Thibodaux MSA which consists of Lafourche and Terrebonne Parishes; (ii)
Assumption Parish; (iii) the southwestern corner of Ascension Parish, (iv) the
eastern tip of St. Mary Parish, (v) the southeastern corner of Iberville Parish,
and (vi) the eastern portion of St. John the Baptist Parish. Other organizations
in the MSA and neighboring parishes provide services similar to those provided
by ArgentBank. Competition is active in every service offered by ArgentBank as
numerous banks and other financial institutions in the service area make loans
and accept deposits. Competition in Lafourche Parish includes 30 competitor bank
offices and 4 credit unions; in Terrebonne Parish competition includes 30
competitor bank offices, 3 savings banks and 6 credit unions; Assumption Parish
has 4 competitor bank offices and 1 credit union; Ascension Parish includes 13
competitor bank offices and 10 credit unions; St. Mary Parish has 22 competitor
bank offices, 4 savings banks and 4 credit unions; Iberville Parish includes 13
competitor banks and 3 credit unions; and St. John the Baptist Parish has 10
competitor bank offices and 2 credit unions.
Seasonality of Business and Customer Concentration
ArgentBank's deposits represent a cross-section of the area's economy,
and there is no material concentration of deposits from any single customer or
group of customers. No significant portion of ArgentBank's loans is concentrated
within a single industry or group of related industries. Historically, the
business of ArgentBank has not been seasonal in nature and management of the
Bank does not anticipate any seasonal trends in the future. ArgentBank does not
rely on foreign sources of funds or income.
Employees
As of the date of this Proxy Statement/Prospectus, ArgentBank employed
218 full-time employees and 72 part-time employees.
Properties
The main office of ArgentBank is located at 203 W. Second, Thibodaux,
Louisiana. Within Lafourche Parish, ArgentBank has ten full service facilities
and one drive-up facility. Currently, ArgentBank has eighteen ATMs, four branch
locations in Terrebonne Parish, and five locations in Assumption Parish, four of
which operate as full service facilities and one drive up facility. ArgentBank
also has one branch facility in St. John the Baptist Parish. ArgentBank also
currently operates loan production offices in Baton Rouge and Harahan,
Louisiana. ArgentBank has four facilities which are used for operations and
off-site storage. Of the other aforementioned operating branches, five are under
leases which extend to the years 1998, 2000, 2001 and 2005, with options in
favor of ArgentBank existing to extend the leases. ArgentBank built two new
branches in Terrebonne Parish which were opened in 1996, one of which is located
on leased property and the other on property purchased by ArgentBank. ArgentBank
also owns two additional parcels of land, one used for a parking lot and the
other for possible expansion.
Legal Proceedings
There are no material legal proceedings pending to which ArgentBank is a
party to or which any of its properties are subject.
Stock Prices and Dividends
The table below presents the high and low market prices and dividend
information for shares of ArgentBank Common Stock. Until February 21, 1997,
ArgentBank was traded on the NASDAQ Stock Market System under the trading symbol
"ARGT." Since February 21, 1997, ArgentBank has traded on the American Stock
Exchange under the trading symbol "AGB." On October 17, 1995, the Board of
Directors declared a two-for-one stock split to shareholders of record on
October 31, 1995. On July 20, 1993, the Board of Directors declared a
four-for-one stock split. As of [a recent date] 1997, the number of shareholders
of record of ArgentBank stock was 3,284 [approximate].
Market Values
& Dividends
High Low Cash Dividend
1997:
March 31 $20.25 $17.25 $ .14
June 30 22.25 19.63 .14
September 30 33.38 21.75 .14
December __ ----- ----- .15
1996:
March 31 $24.50 $20.25 $ .13
June 30 22.00 18.50 .13
September 30 21.00 17.25 .13
December 31 19.00 17.25 .13
1995:
March 31 $13.88 $12.38 $ .11
June 30 19.13 13.88 .11
September 30 22.50 18.13 .13
December 31 25.00 20.50 .13
The price of a share of ArgentBank Common Stock on July 15, 1997 (the
last trading day prior to the public announcement of the Merger on July 16) was
$22.50, and on ________ __, 1997 was $_____.
Securities Ownership of Principal Shareholders and Management
The following table describes the ownership and beneficial ownership of
ArgentBank Common Stock by principal shareholders and management as of the date
of this Proxy Statement/Prospectus:
<TABLE>
<CAPTION>
<S> <C> <C> <C> <C> <C>
Number of % of Shares
Shares Owned Owned
Beneficially Beneficially
Has served (Direct or (Direct or
Principal Occupation For as a Director Indirect) as Indirect) as
Directors' Names Age The Last Five Years since of 08/19/97** of 08/19/97+
J. Alvin Badeaux, Jr. 56 President, Badeaux Engineers, Inc. 10/01/1987 24,452(1) *
Perry A. Blanchard, Sr. 60 President, P.A. Blanchard, Inc. 07/18/1989 3,200(2) *
Harold M. Block 52 Attorney, Block and Bouterie 05/20/1980 27,080(3) *
Joseph E. Boudreaux 55 AFLAC Associate (Insurance) 10/01/1987 2,400 *
Bonnie E. Brady 35 Assistant to President,MobileTel 07/22/1996 1,502 *
Weber L. Callais 83 President, Golden Meadow 03/21/1972 7,360(4) *
Boat Rental, Inc
Paul B. Candies 56 President, Otto Candies Inc. 03/21/1972 137,411(5) 2.11
Patrick E. Cancienne, Sr.68 President, Savoie Industries, Inc. 06/17/1997 4,023 *
Brian P. Cheramie 44 CEO-Gilbert Cheramie Boat Rentals, 07/22/1996 8,880 *
Inc.
Elie J. Cheramie 82 President, Andrew Cheramie 03/21/1972 21,040(6) *
Marsh Buggies, Inc.
Garret H. Danos 47 President, Danos & Curole 02/14/1995 3,400 *
Marine Contractors, Inc
Kevin J. Gaubert 68 President, Gaubert Oil Co., Inc. 09/21/1976 23,218(7) *
Carl E. Heck 87 President, Carl Heck Engineers, Inc.06/21/1961 19,916(8) *
Randall E. Howard 49 President and CEO, ArgentBank 04/18/1989 15,170 (9) *
Irving E. Legendre, Jr. 62 President, Lafourche Sugars Corp. 07/18/1989 11,727(10) *
& Legendre Land Corp.
James T. Lytal, III 55 President, Lytal Marine Operators 01/19/1982 19,560 *
Inc. & Lytal Offshore, Inc.
James R. Peltier 66 Chairman, ArgentBank (from 5/16/94) 12/16/1980 163,202(11) 2.50
Oral and Maxillofacial Surgeon (retired)
Stephen G. Peltier 44 President, Peltier, Morvant, 06/17/1997 39,925(12) *
& Cavell
Alfred G. Robichaux, Jr. 68 Real Estate & Insurance Consultant 10/01/1987 8,808 *
David J. Robichaux, Jr. 62 President, Low Land 08/19/1980 4,768 *
Construction Co., Inc.
President, Robichaux Land, Inc.
Donald J. Rouse 40 President, Rouse Enterprises, Inc. 03/20/1990 63,218(13) *
Vernon E. Toups, Jr. 55 Manager, Brown's Velvet Dairy 05/19/1992 11,000(14) *
President, Acadia Dairy, Inc.
22 Directors and Executive Officers as a Group Total 618,756 9.48%
</TABLE>
* less than one percent
** Constitutes Sole Ownership unless otherwise indicated.
+ Based upon 6,527,728 shares outstanding.
(1) Mr. Badeaux has voting and investment powers with respect to 1,070 shares of
which he is named owner and has power of attorney over his father who has
usufruct; and has sole voting and investment powers with respect to 3,210 shares
owned by his siblings over which he has power of attorney.
(2) Mr. Blanchard has shared voting and investment powers with respect to 1,600
shares owned by his wife.
(3) Includes 11,010 shares of which Harold Block has shared voting and
investment powers, and 10,566 shares owned by wife, Jane W. Block for which he
has power of attorney (and voting and investment powers) and 2,504 shares by a
Foundation of which he has shared investment powers and shared voting power with
Kevin Gaubert.
(4) Mr. Callais has voting power with respect to 800 shares owned by his
deceased wife's estate.
(5) Mr. Candies has shared voting and investment power with respect to 1,132
shares owned by his wife.
(6) Mr. Cheramie shares voting and investment power with respect to 9,600 shares
owned with his wife as tenants in common, and with respect to 200 shares owned
by his wife.
(7) Mr. Gaubert and Harold M. Block have shared investment and voting powers
with respect to 2,504 shares owned by a Foundation.
(8) Mr. Heck has sole voting and investment powers over 1,200 shares owned by
adult children for which he has usufruct.
(9) Includes 3,170 shares owned by Randall E. Howard in his ArgentBank 401-K
Pension Plan of which he has voting power.
(10) Mr. Legendre has voting and investment powers with respect to 1,600 shares
owned by Legendre Land Corporation, of which he is President.
(11) Mr. Peltier has shared voting and investment powers with respect to 800
shares owned by his wife and sole voting and investment power with respect to
30,152 shares owned by adult child for which he has power of attorney with no
maturity.
(12) Mr. Peltier has shared voting and investment powers with respect to 2,416
shares owned by wife, and sole voting and investment powers with respect to
6,824 shares owned by minor children which he is custodian, and 2,115 shares
owned by a major child which he is agent and attorney-in-fact.
(13) Mr. Rouse has shared voting and investment power with respect to 2,800
shares owned with his wife as tenants in common, and sole voting and investment
powers with respect to 10,000 shares owned by Rouse Enterprises, Inc. of which
Mr. Rouse is the President and with respect to 1,080 shares owned by minor
children.
(14) Mr. Toups has shared voting and investment power with respect to 2,000
shares owned by wife.
ArgentBank, as of the Record Date, has no knowledge that any person beneficially
owned, directly or indirectly, more than five percent of the outstanding common
stock of ArgentBank.
There are no family relationships among the Board of Directors except Stephen
Peltier is James R. Peltier's nephew.
VALIDITY OF SHARES
The validity of the shares of Hibernia Common Stock offered hereby has been
passed upon by Patricia C. Meringer, Corporate Counsel and Secretary of
Hibernia. As of the date of this Proxy Statement/Prospectus, Ms. Meringer owns
21,848 shares of Hibernia Common Stock and held options to purchase shares of
Hibernia Common Stock of which options to acquire 18,037 shares are currently
exercisable.
EXPERTS
ArgentBank: The financial statements of ArgentBank included in this
Proxy Statement/Prospectus for the year ended December 31, 1996 have been
audited by Deloitte & Touche LLP, independent auditors as stated in their report
appearing elsewhere herein and are included in reliance upon the report of such
firm given upon their authority as experts in accounting and auditing.
Hibernia: The consolidated financial statements of Hibernia incorporated by
reference in Hibernia's Annual Report(Form 10-K) for the year ended December 31,
1996 have been audited by Ernst & Young LLP, independent auditors, as set forth
in their report thereon incorporated herein by reference therein and
incorporated herein by reference. Such consolidated financial statements are
incorporated herein by reference in reliance upon such report given upon
authority of such firm as experts in accounting and auditing.
OTHER MATTERS
Management knows of no other matters that may be brought before the
Meeting. However, if any matter other than the Merger or matters incident
thereto should come before the Meeting, the persons named in the enclosed proxy
will vote such proxy in accordance with their judgment on such matters.
INDEX TO FINANCIAL STATEMENTS
OF
ARGENTBANK
Index to Financial Statements F-1
Audited Financial Statements for the year ended
December, 1996 and 1995
Report of Independent Public Accountants F-2
Statements of Condition (Balance Sheets) F-3
Statements of Income F-4
Statement of Shareholders' Equity F-5
Statements of Cash Flows F-6
Notes to Financial Statements F-7
Unaudited Financial Statement for the nine-month period ended
September 30, 1997 and 1996
Comparative Statement of Condition F-19
Statement of Income F-20
Notes to Financial Statements F-22
<PAGE>
ARGENTBANK FINANCIAL STATEMENTS
Board of Directors and Shareholders
ArgentBank
Thibodaux, Louisiana
We have audited the accompanying statements of condition of ArgentBank
as of December 31, 1996 and 1995, and the related statements of income,
shareholders' equity, and cash flows for each of the three years in the period
ended December 31, 1996. These financial statements are the responsibility of
ArgentBank's management. Our responsibility is to express an opinion on these
financial statements based on our audits.
We conducted our audits in accordance with generally accepted auditing
standards. Those standards require that we plan and perform the audit to obtain
reasonable assurance about whether the financial statements are free of material
misstatement. An audit includes examining, on a test basis, evidence supporting
the amounts and disclosures in the financial statements. An audit also includes
assessing the accounting principles used and significant estimates made by
management, as well as evaluating the overall financial statement presentation.
We believe that our audits provide a reasonable basis for our opinion.
In our opinion, such financial statements present fairly, in all
material respects, the financial position of ArgentBank at December 31, 1996 and
1995, and the results of its operations and its cash flows for each of the three
years in the period ended December 31, 1996, in conformity with generally
accepted accounting principles.
/s Deloitte & Touche LLP
New Orleans, Louisiana
January 17, 1997
<PAGE>
<TABLE>
<CAPTION>
Statements of Condition
December 31, (in thousands, except shares of stock) 1996 1995
- ----------------------------------------------------------------------------------------------------
<S> <C> <C>
ASSETS:
Cash and due from banks ......................................... $ 20,331 $ 25,436
Federal funds sold .............................................. 20,950 7,350
- ----------------------------------------------------------------------------------------------------
TOTAL CASH AND CASH EQUIVALENTS .............................. 41,281 32,786
Securities:
Held-to-maturity securities (approximate market value of
$42,465 and $86,346 in 1996 and 1995, respectively) ...... 42,433 86,461
Available-for-sale securities (amortized cost of $150,080 and
$144,741 in 1996 and 1995, respectively) ................. 150,226 146,851
- ----------------------------------------------------------------------------------------------------
TOTAL SECURITIES .......................................... 192,659 233,312
Loans, net of unearned discount ................................. 345,713 288,479
Less: Allowance for loan losses .............................. (10,427) (10,553)
- ----------------------------------------------------------------------------------------------------
LOANS, NET ................................................ 335,286 277,926
Accrued interest receivable ..................................... 3,980 4,470
Other real estate, net .......................................... - - - - 54
Bank premises and equipment, net ................................ 9,855 8,496
Other assets .................................................... 6,893 5,043
- ----------------------------------------------------------------------------------------------------
TOTAL ASSETS ...................................................... $ 589,954 $ 562,087
====================================================================================================
LIABILITIES AND SHAREHOLDERS' EQUITY:
LIABILITIES:
Deposits:
Non-interest-bearing .......................................... $ 82,693 $ 77,291
Interest-bearing .............................................. 433,795 412,877
- ----------------------------------------------------------------------------------------------------
TOTAL DEPOSITS ............................................ 516,488 490,168
Accrued interest payable ........................................ 4,026 3,803
Other liabilities ............................................... 1,777 1,613
- ----------------------------------------------------------------------------------------------------
TOTAL LIABILITIES ......................................... 522,291 495,584
- ----------------------------------------------------------------------------------------------------
Commitments and Contingencies (Note 13) ......................... - - - - - - - -
SHAREHOLDERS' EQUITY:
Common stock, $.10 par value: 10,000,000 shares authorized,
5,863,668 shares outstanding in 1996, and 5,975,464 shares
outstanding in 1995 ........................................... 586 598
Capital surplus ................................................. 25,079 25,176
Net unrealized gains on available-for-sale securities, net of tax 96 1,392
Retained earnings ............................................... 41,902 39,337
- ----------------------------------------------------------------------------------------------------
TOTAL SHAREHOLDERS' EQUITY .................................. 67,663 66,503
- ----------------------------------------------------------------------------------------------------
TOTAL LIABILITIES AND SHAREHOLDERS' EQUITY ........................ $ 589,954 $ 562,087
====================================================================================================
- ------------
See notes to financial statements
</TABLE>
<PAGE>
<TABLE>
<CAPTION>
Statements of Income
December 31, (in thousands, except per share data)
1996 1995 1994
- ---------------------------------------------------------------------------------------
<S> <C> <C> <C>
INTEREST INCOME:
Loans, including fees ................. $ 27,145 $ 22,722 $ 18,106
Securities:
Taxable ............................. 12,630 13,596 15,185
Non-taxable ......................... 793 947 936
Federal funds sold .................... 724 904 451
Deposits in other banks ............... - - - - - - - - 3
- ---------------------------------------------------------------------------------------
TOTAL INTEREST INCOME ............... 41,292 38,169 34,681
Interest expense-deposits ............. 16,843 14,834 11,888
- ---------------------------------------------------------------------------------------
NET INTEREST INCOME ................. 24,449 23,335 22,793
Provision for (recovery of) loan losses (300) (1,000) (2,091)
- ---------------------------------------------------------------------------------------
NET INTEREST INCOME AFTER PROVISION
FOR LOAN LOSSES .................. 24,749 24,335 24,884
- ---------------------------------------------------------------------------------------
NON-INTEREST INCOME:
Customer service fees ............... 2,703 2,531 2,518
Securities gains, net ............... 151 579 496
Other ............................... 332 81 104
- ---------------------------------------------------------------------------------------
TOTAL NON-INTEREST INCOME ......... 3,186 3,191 3,118
- ---------------------------------------------------------------------------------------
NON-INTEREST EXPENSE:
Salaries and employee benefits ...... 7,651 7,336 7,500
Net occupancy expense ............... 2,384 2,132 2,477
Data processing ..................... 1,797 1,457 1,214
Expenses related to other real estate - - - - 3 2
Other ............................... 4,781 4,808 5,087
- ---------------------------------------------------------------------------------------
TOTAL NON-INTEREST EXPENSE ........ 16,613 15,736 16,280
- ---------------------------------------------------------------------------------------
INCOME BEFORE INCOME TAXES ............ 11,322 11,790 11,722
Income taxes .......................... 3,584 3,716 3,720
- ---------------------------------------------------------------------------------------
NET INCOME ............................ $ 7,738 $ 8,074 $ 8,002
=======================================================================================
PER SHARE DATA:
Net income per Common Share ......... $ 1.31 $ 1.35 $ 1.34
- ----------
See notes to financial statements
</TABLE>
<PAGE>
<TABLE>
<CAPTION>
Statements of Shareholders' Equity
Net
Unrealized
Holding
Gains Total
Common Stock Capital Retained (Losses) on Shareholders
(in thousands, except per share data) Shares Amount Surplus Earnings Securities ' Equity
- -------------------------------------------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C> <C> <C>
Balance, January 1, 1994 .................. 2,988 $ 299 $ 15,475 $ 38,309 $- - - - $ 54,083
Unrealized holding gains (losses) on
securities at adoption of SFAS No .
1,975 1,975
Cash dividends on common stock, $.74
per share ........................... (2,211) (2,211)
Transfer of retained earnings to capital
surplus ............................. 10,000 (10,000) - - - -
Change in unrealized gains (losses) on
available-for-sale securities, net of tax (2,827) (2,827)
Net income ................................ 8,002 8,002
- -------------------------------------------------------------------------------------------------------------------------------
Balance, December 31, 1994 ................ 2,988 299 25,475 34,100 (852) 59,022
- -------------------------------------------------------------------------------------------------------------------------------
Effect of stock split (2 for 1) ........... 2,987 299 (299) - - - -
Cash dividends on common stock, $.48
per share ........................... (2,837) (2,837)
Change in unrealized gains (losses) on
available-for-sale securities, net of tax 2,244 2,244
Net income ................................ 8,074 8,074
- -------------------------------------------------------------------------------------------------------------------------------
Balance, December 31, 1995 ................ 5,975 598 25,176 39,337 1,392 66,503
- -------------------------------------------------------------------------------------------------------------------------------
Common stock purchased & retired .......... (111) (12) (97) (2,103) (2,212)
Cash dividends on common stock, $.52
per share ........................... (3,070) (3,070)
Change in unrealized gains (losses) on
available-for-sale securities, net of tax (1,296) (1,296)
Net income ................................ 7,738 7,738
- -------------------------------------------------------------------------------------------------------------------------------
Balance, December 31, 1996 ................ 5,864 $ 586 $ 25,079 $ 41,902 $ 96 $ 67,663
===============================================================================================================================
- ---------------
See notes to financial statements.
</TABLE>
<PAGE>
<TABLE>
<CAPTION>
Statements of Cash Flows
Years Ended December 31, (in thousands): 1996 1995 1994
- -----------------------------------------------------------------------------------------------------------------------
<S> <C> <C> <C>
Cash Flows From Operating Activities:
Net income ........................................................... $ 7,738 $ 8,074 $ 8,002
Adjustments to reconcile net income to net cash provided by
operating activities:
Gain on sales of securities ...................................... (151) (579) (496)
Premium amortization (discount accretion) on securities, net ..... 489 (966) 83
Provision for loan losses ........................................ (300) (1,000) (2,091)
Provision for deferred taxes ..................................... 26 (378) (209)
Accretion of deferred loan fees .................................. (205) (91) (178)
Loan origination costs capitalized ............................... (160) (130) (125)
Provision for losses on other real estate and repossessed assets . - - - - - - - - 286
Loss on disposition of assets .................................... 189 - - - - 101
Depreciation and amortization .................................... 992 878 869
Change in accrued interest receivable ............................ 471 (868) 594
Change in accrued interest payable ............................... 222 1,701 368
Change in other liabilities ...................................... 164 484 328
- -----------------------------------------------------------------------------------------------------------------------
Net Cash Provided By Operating Activities ............................ 9,286 7,125 7,532
- -----------------------------------------------------------------------------------------------------------------------
Cash Flows From Investing Activities:
Proceeds from maturities or call of held-to-maturity securities .. 51,146 52,802 78,149
Proceeds from sales or maturities of available-for-sale securities 85,360 88,004 107,274
Purchases of held-to-maturity securities ......................... (7,029) (2,855) (58,443)
Purchases of available-for-sale securities ....................... (91,127) (87,981) (93,824)
Proceeds from maturities of interest-bearing deposits ............ - - - - - - - - 130
Net loan principal originations .................................. (57,242) (57,589) (31,079)
Loan origination fees received ................................... 547 380 332
Proceeds from sales of other real estate ......................... 62 270 120
Proceeds from sales of bank premises and equipment ............... 44 127 58
Purchases of bank premises and equipment ......................... (3,307) (1,485) (1,216)
Change in other assets ........................................... (1,189) 213 (335)
Net cash paid in connection with branch sales .................... (5,391) - - - - - - - -
---------
Net Cash (Used In) Provided By Investing Activities .................. (28,126) (8,114) 1,166
- -----------------------------------------------------------------------------------------------------------------------
Cash Flows From Financing Activities:
Net increase (decrease) in deposits .............................. 32,617 3,245 (1,591)
Purchase and retirement of common stock .......................... (2,212) - - - - - - - -
Dividends paid ................................................... (3,070) (2,838) (2,211)
- -----------------------------------------------------------------------------------------------------------------------
Net Cash Provided By (Used In) Financing Activities .................. 27,335 407 (3,802)
- -----------------------------------------------------------------------------------------------------------------------
Net Increase (Decrease) in Cash and Cash Equivalents ................. 8,495 (582) 4,896
Cash and Cash Equivalents, Beginning of Year ......................... 32,786 33,368 28,472
- -----------------------------------------------------------------------------------------------------------------------
Cash and Cash Equivalents, End of Year ............................... $ 41,281 $ 32,786 $ 33,368
=======================================================================================================================
- --------------
See notes to financial statements.
</TABLE>
<PAGE>
Notes to Financial Statements
Years ended December 31, 1996, 1995 and 1994
1. Summary of Significant Accounting and Reporting Policies
The accounting and reporting policies of ArgentBank conform with
generally accepted accounting principles and the prevailing practices within the
banking industry. A summary of significant accounting policies is as follows:
Description of Business. ArgentBank operates as a full-service
financial institution in three parishes of Southern Louisiana. During 1996, two
new full-service branches were opened in Terrebonne Parish. ArgentBank sold the
New Orleans and Baton Rouge branch deposits and building facilities in 1996.
ArgentBank continues to operate loan production offices in both areas.
ArgentBank is community oriented and focuses primarily on utilizing its
assets for maximum return to the shareholders through sound banking practices.
ArgentBank's operating strategy is to serve the financial needs of the markets
that it serves through prudent lending, investment policies and deposit
services.
Use of Estimates. The preparation of financial statements in conformity
with generally accepted accounting principles requires Management to make
estimates and assumptions that affect the reported amounts of assets and
liabilities and disclosure of contingent assets and liabilities at the date of
the financial statements and the reported amounts of revenues and expenses
during the reporting period. Actual results could differ from those estimates.
Securities. In May 1993, the Financial Accounting Standards Board
issued Statement of Financial Accounting Standards ("SFAS") No. 115 "Accounting
for Certain Investments in Debt and Equity Securities". This statement requires
that only debt securities that ArgentBank has the positive intent and ability to
hold to maturity be classified as held-to-maturity and reported at amortized
cost; all other debt securities are reported at fair value. SFAS No. 115 further
requires that realized and unrealized gains and losses on securities classified
as trading account assets shall be recognized in current operations. Securities
not classified as held-to-maturity or trading are classified as
available-for-sale, with the related unrealized gains and losses excluded from
earnings and reported net of tax as a separate component of shareholders' equity
until realized. ArgentBank adopted SFAS No. 115 effective January 1, 1994. At
January 1, 1994, adopting SFAS No. 115 resulted in a $1,975,000 unrealized gain
being recorded in shareholders' equity.
Held-to-maturity securities are carried at cost, adjusted for the
amortization of premiums and the accretion of discounts. Premiums and discounts
are amortized and accreted to operations using the level yield method, adjusted
for prepayments as applicable. Management has the intent and ArgentBank has the
ability to hold these assets as long-term investments until their estimated
maturities. Under certain circumstances (including the deterioration of the
issuer's credit worthiness or a change in tax law or statutory or regulatory
requirements), held-to-maturity securities may be sold or transferred to another
portfolio.
Available-for-sale securities are carried at fair value. Unrealized
gains and losses are excluded from earnings and reported net of tax, as a
separate component of shareholders' equity until realized. Securities within the
available-for-sale portfolio may be used as part of ArgentBank's asset/liability
strategy and may be sold in response to changes in interest rate risk,
prepayment risk or other similar economic factors.
Loans. Loans are stated at the principal amount outstanding, net of
unearned discount and fees. Unearned discount relates principally to consumer
installment loans. The related interest income is recognized utilizing methods
which approximate the interest method. When the payment of principal or interest
on a loan is delinquent for 90 days, or earlier in some cases, the loan is
placed on non-accrual status, unless the loan is in the process of collection
and the underlying collateral fully supports the carrying value of the loan. If
the decision is made to continue accruing interest on the loan, periodic reviews
are made to confirm the accruing status of the loan. When a loan is placed on
non-accrual status, interest accrued during the current year prior to the
judgment of uncollectibility is charged to operations. Interest accrued during
prior periods is charged to allowance for loan losses. Generally, any payments
received on non-accrual loans are applied first to outstanding loan amounts and
next to the recovery of charged-off loan amounts. Any excess is treated as
recovery of lost interest.
ArgentBank considers a loan to be impaired when, based upon current
information and events, it believes it is probable that ArgentBank will be
unable to collect all amounts due according to the contractual terms of the loan
agreement. ArgentBank's impaired loans include troubled debt restructurings, and
performing and non-performing major loans for which full payment of principal or
interest is not expected. ArgentBank calculates a reserve required for impaired
loans based on the present value of expected future cash flows discounted at the
loan's effective interest rate, or at the loan's observable market price or the
fair value of its collateral.
Loan origination fees and certain direct origination costs are
generally recognized over the life of the related loan as an adjustment to the
yield using the interest method.
Allowance for Loan Losses. The allowance for loan losses is a valuation
allowance available for future potential losses incurred on loans. All losses
are charged to the allowance when the loss actually occurs or when a
determination is made that a loss is likely to occur. Recoveries are credited to
the allowance at the time of recovery.
Throughout the year, Management estimates the likely level of future
losses to determine whether the allowance for loan losses is adequate to absorb
reasonably anticipated losses in the existing portfolio. Based on these
estimates, an amount is charged to the provision for loan losses and credited to
the allowance for loan losses in order to adjust the allowance to a level
determined to be adequate to absorb anticipated losses.
Management's judgment as to the level of anticipated losses on existing
loans involves the consideration of current and anticipated economic conditions
and their potential effects on specific borrowers; an evaluation of the existing
relationships among loans, potential credit losses, and the present level of the
allowance; results of examinations of the loan portfolio by regulatory agencies;
and management's internal review of the loan portfolio. In determining the
collectibility of certain loans, Management also considers the fair value of any
underlying collateral. The amounts ultimately realized may differ from the
carrying value of these assets due to economic, operating, or other conditions
beyond ArgentBank's control.
Estimates of anticipated loan losses involve judgment. While it is
possible that in particular periods ArgentBank may sustain losses which are
substantial relative to the allowance for loan losses, it is the judgment of
Management that the allowance for loan losses reflected in the statements of
condition is adequate to absorb anticipated losses which may exist in the
current loan portfolio.
Bank Premises and Equipment. Premises and equipment are carried at
cost, less accumulated depreciation and amortization. Depreciation expense is
computed principally on the straight-line method over the estimated useful lives
of the assets. Leasehold improvements are amortized on the straight-line method
over the period of the leases or the estimated useful lives, whichever is
shorter.
Other Real Estate. Real estate properties acquired through, or in lieu
of, loan foreclosure are to be sold and are initially recorded at fair value at
the date of foreclosure establishing a new cost basis. After foreclosure,
valuations are periodically performed by Management and the real estate is
carried at the lower of carrying amount or fair value less cost to sell.
Revenues and expenses from operations and changes in the valuation allowance are
included in loss on foreclosed real estate.
Income Taxes. Income taxes are provided using the liability method in
accordance with SFAS No. 109, "Accounting for Income Taxes." Under this method,
deferred income taxes are recorded based upon differences between the financial
reporting and income tax basis of assets and liabilities and are measured using
the enacted income tax rates and laws that will be in effect when the
differences are expected to reverse.
ArgentBank changed its method of accounting for income taxes, effective
January 1, 1993, to comply with the provisions of Statement of Financial
Accounting Standards No. 109, "Accounting for Income Taxes". This standard
requires, among other things, recognition of future tax benefits, measured by
enacted tax rates, attributable to deductible temporary differences between
financial statement and income tax bases of assets and liabilities, to the
extent that realization of such benefits is more likely than not. ArgentBank
elected to report a cumulative effect in 1993 and not restate any prior years.
Earnings Per Share. Earnings per share is computed on the basis of the
weighted average number of shares outstanding during the year. The average
number of common shares outstanding, after giving retroactive effect to the 1995
two-for-one stock split, amounted to 5,906,000 in 1996, and 5,975,000 in 1995
and 1994.
Statement of Cash Flows. Cash equivalents include cash and due from
banks and federal funds sold; generally federal funds are sold for one day
periods. Interest paid amounted to $16,621,000, $13,133,000, and $11,520,000,
and taxes paid were $3,510,000, $3,170,000 and $4,090,000 for the years ended
December 31, 1996, 1995, and 1994, respectively.
Reclassifications. Certain reclassifications have been made to prior
years' amounts to conform them to the current year presentation.
2. Cash and Due from Banks
ArgentBank is required to maintain average reserve balances with the
Federal Reserve Bank. "Cash and due from banks" in the statements of condition
included amounts so restricted of $3,506,000 at December 31, 1996 and $3,453,000
at December 31, 1995.
3. Securities
The amortized cost and estimated fair value of investments in debt and
equity securities are as follows (in thousands):
<TABLE>
<CAPTION>
December 31, 1996
Held-to-Maturity
Gross Gross Estimated
Amortized Unrealized Unrealized Fair
Cost Gains Losses Value
- -------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C>
States and political subdivisions $ 16,952 $ 109 $ (112) $ 16,949
Corporate bonds ................. 6,090 1 (40) 6,051
Mortgage-backed securities ...... 19,391 183 (109) 19,465
- -------------------------------------------------------------------------------------------
$ 42,433 $ 293 ($ 261) $ 42,465
===========================================================================================
</TABLE>
<TABLE>
<CAPTION>
December 31, 1996
Available-for-Sale
Gross Gross Estimated
Amortized Unrealized Unrealized Fair
Cost Gains Losses Value
- -------------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C>
U.S. Treasury securities and obligations
of U.S. Government agencies .......... $111,931 $ 929 ($270) $112,590
Mortgage-backed securities ............. 35,849 14 (554) 35,309
FHLB Stock and Mutual Funds ............ 2,300 27 - - - - 2,327
- -------------------------------------------------------------------------------------------------
$150,080 $ 970 ($ 824) $150,226
=================================================================================================
</TABLE>
ArgentBank does not own any securities deemed to be "high-risk" in
accordance with the Federal Financial Institutions Examination Council's tests.
<TABLE>
<CAPTION>
December 31, 1995
Held-to-Maturity
Gross Gross Estimated
Amortized Unrealized Unrealized Fair
Cost Gains Losses Value
- -------------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C>
U.S. Treasury securities and obligations
of U.S. Government agencies .......... $ 4,999 $ - - - ($ 90) $ 4,909
States and political subdivisions ...... 23,893 131 (146) 23,878
Corporate bonds ........................ 16,237 - - - (176) 16,061
Mortgage-backed securities ............. 41,332 420 (254) 41,498
- -------------------------------------------------------------------------------------------------
$ 86,461 $ 551 ($ 666) $ 86,346
=================================================================================================
</TABLE>
<TABLE>
<CAPTION>
December 31, 1995
Available-for-Sale
Gross Gross Estimated
Amortized Unrealized Unrealized Fair
Cost Gains Losses Value
- ------------------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C>
U.S. Treasury securities and obligations
of U.S. Government agencies .......... $ 132,836 $ 2,180 ($ 70) $ 134,946
Mortgage-backed securities ............. 9,993 8 (8) 9,993
FHLB Stock ............................. 1,912 - - - - - - - - 1,912
- ------------------------------------------------------------------------------------------------------
$ 144,741 $ 2,188 ($ 78) $ 146,851
======================================================================================================
</TABLE>
The amortized cost and estimated fair value of debt and equity
securities at December 31, 1996, by contractual maturity, are shown below (in
thousands). Actual maturities may differ from contractual maturities, because
borrowers may have the right to call or prepay obligations with or without call
or prepayment penalties.
<TABLE>
<CAPTION>
Estimated
Held-to-Maturity Amortized Fair
Cost Value
- ------------------------------------------------------------------
<S> <C> <C>
Due in one year or less .............. $ 4,603 $ 4,610
Due after one year through five years 12,074 11,996
Due after five years through ten years 2,723 2,690
Due after ten years .................. 3,643 3,704
- ------------------------------------------------------------------
23,043 23,000
Mortgage-backed securities ........... 19,390 19,465
- ------------------------------------------------------------------
$42,433 $42,465
==================================================================
</TABLE>
<TABLE>
<CAPTION>
Estimated
Available-for-Sale Amortized Fair
Cost Value
- ------------------------------------------------------------------
<S> <C> <C>
Due in one year or less .............. $ 8,075 $ 8,185
Due after one year through five years 27,945 29,089
Due after five years through ten years 74,909 74,329
Due after ten years .................. 3,288 3,300
- ------------------------------------------------------------------
114,217 114,903
Mortgage-backed securities ........... 35,863 35,323
- ------------------------------------------------------------------
$150,080 $150,226
===================================================================
</TABLE>
On December 15, 1995, as permitted by the Guide to Implementation of Statement
115 on Accounting for Certain Investments in Debt and Equity Securities issued
by the Accounting Financial Standards Board, ArgentBank reclassified securities
with a book value of $7,975,943 and unrealized gains of $601,665 to
available-for-sale securities from held-to-maturity securities.
Proceeds from sales of available-for-sale securities were $36,151,000
and $41,070,000 for 1996 and 1995 respectively. Gross gains of $151,078 and
$579,000 were realized for the same period on those sales. There were no gross
losses realized on those sales. Proceeds from calls of held-to-maturity
securities during 1994 were $25,132,000. Gross gains of $291,000 were realized
on calls in 1994. There were no gross losses realized on those calls.
ArgentBank does not own any securities of any one issuer of which
aggregate adjusted cost exceeds 10% of the shareholders' equity at December 31,
1996. Securities with a carrying value of $138,148,000 and $82,284,000 and an
estimated market value of $138,409,000 and $83,477,000 at December 31, 1996 and
1995, respectively, were pledged to secure public deposits and for other
purposes required or permitted by law.
4. Loans
The loan portfolio consists of various types of loans made principally
to borrowers located in Southern Louisiana and are classified by major type as
follows (in thousands):
<TABLE>
<CAPTION>
December 31,
- ------------------------------------------------------------------
1996 1995
- ------------------------------------------------------------------
<S> <C> <C>
Real estate loans ............... $ 246,882 $ 210,123
Commercial and industrial loans . 42,252 35,275
Consumer loans .................. 53,341 39,608
Loans to financial institutions . - - - 326
All others (including overdrafts) 4,117 3,961
- ------------------------------------------------------------------
346,592 289,293
Less unearned discount .......... (879) (814)
- ------------------------------------------------------------------
345,713 288,479
Less allowance for loan losses .. (10,427) (10,553)
- ------------------------------------------------------------------
$335,286 $277,926
===================================================================
</TABLE>
Loan maturities and rate sensitivity of the loan portfolio before
unearned income at December 31, 1996 are as follows (in thousands):
<TABLE>
<CAPTION>
Within One- After
One Year Five Years Five Years Total
- ----------------------------------------------------------------------------------------
<S> <C> <C> <C> <C>
Real estate loans .............. $ 71,515 $112,865 $ 62,502 $246,882
Commercial and industrial loans 22,014 18,793 1,445 42,252
Consumer ....................... 19,185 33,717 439 53,341
Loans to financial institutions - - - - - - - - - - - - - - - -
All others ..................... 1,897 978 1,242 4,117
- ----------------------------------------------------------------------------------------
$114,611 $166,353 $ 65,628 $346,592
========================================================================================
Loans at fixed interest rates .. $ 87,948 $155,286 $ 18,266 $261,500
Loans at variable interest rates 26,663 11,067 47,362 85,092
- ----------------------------------------------------------------------------------------
$114,611 $166,353 $ 65,628 $346,592
========================================================================================
</TABLE>
Included in the above loans are non-accrual loans on which interest is
recorded only when actually collected and not on the accrual basis. These loans
totaled approximately $150,000 and $124,000 at December 31, 1996 and 1995,
respectively. The loss of income associated with non-accrual loans was $22,000,
$51,000, and $44,000 in 1996, 1995 and 1994, respectively.
Loans amounting to $54,000 and $326,000 were transferred to other real
estate in 1996 and 1995, respectively. ArgentBank did not refinance 100% of any
other real estate sold during 1996, 1995 and 1994.
As of December 31, 1996 and 1995, loans outstanding to directors,
officers and their affiliates were $6,817,085 and $6,608,649, respectively. As
of December 31, 1996 and 1995, commitments approved but not funded totaled
$4,104,573 and $2,724,805, respectively. In the opinion of Management, all
transactions entered into between ArgentBank and such related parties have been
and are, in the ordinary course of business, made on the same terms and
conditions as similar transactions with unaffiliated persons.
<PAGE>
An analysis of activity with respect to these related party loans is as
follows (in thousands):
<TABLE>
<CAPTION>
Years Ended December 31,
- -------------------------------------------------------
1996 1995
- -------------------------------------------------------
<S> <C> <C>
Beginning balance ....... $ 6,609 $ 5,393
New loans ............... 4,017 2,152
Repayments and reductions (3,809) (936)
- -------------------------------------------------------
Ending balance .......... $ 6,817 $ 6,609
=======================================================
</TABLE>
As of December 31, 1996 and 1995, the recorded investment in loans that
are considered to be impaired were $105,082 and $84,125, respectively. As of
December 31, 1996 and 1995, the related allowance for credit losses for the
impaired loans was $31,589 and $9,203, respectively. Interest income recognized
on these loans was immaterial for the years ended December 31, 1996 and 1995.
5. Allowance for Loan Losses
An analysis of activity in the allowance for loan losses is as follows
(in thousands):
<TABLE>
<CAPTION>
Years Ended December 31,
- -----------------------------------------------------------------------------------------
1996 1995 1994
- -----------------------------------------------------------------------------------------
<S> <C> <C> <C>
Balance at beginning of year ............... $ 10,553 $ 11,655 $ 13,092
Addition:
Provision (recovery) charged to operations (300) (1,000) (2,091)
Deductions:
Loans charged-off ........................ (405) (322) (323)
Loan recoveries .......................... 579 220 977
- -----------------------------------------------------------------------------------------
Net recoveries/(Net charge-offs) ....... 174 (102) 654
- -----------------------------------------------------------------------------------------
Balance at end of year ..................... $ 10,427 $ 10,553 $ 11,655
=========================================================================================
</TABLE>
6. Bank Premises and Equipment
Bank premises and equipment are summarized below (in thousands):
<TABLE>
<CAPTION>
December 31,
- -----------------------------------------------------------------------------
1996 1995
- -----------------------------------------------------------------------------
<S> <C> <C>
Land and buildings ........................... $ 12,330 $ 11,645
Furniture, fixtures and equipment ............ 7,859 6,611
Construction in progress ..................... 87 234
- -----------------------------------------------------------------------------
20,276 18,490
Less accumulated depreciation and amortization (10,421) (9,994)
- -----------------------------------------------------------------------------
Bank premises and equipment, net ............. $ 9,855 $ 8,496
=============================================================================
</TABLE>
7. Deposits
Included in interest-bearing deposits are certificates of deposit with
various maturity dates. These certificates and their remaining maturities at
December 31, 1996 and 1995 are as follows (in thousands):
<TABLE>
<CAPTION>
December 31,
- ----------------------------------------------------------
1996 1995
- ----------------------------------------------------------
<S> <C> <C>
Three months or less ........ $ 83,573 $ 91,767
Four through six months ..... 49,832 53,837
Seven through twelve months . 41,403 46,194
Thereafter .................. 59,246 24,179
- ----------------------------------------------------------
Total certificates of deposit $234,054 $215,977
==========================================================
</TABLE>
Certificates of deposit in excess of $100,000 totaled $96,294,000 and
$87,503,000 at December 31, 1996 and 1995, respectively. Interest expense for
certificates of deposit in excess of $100,000 was $5,034,000, $4,153,000, and
$2,713,000 for the years ended December 31, 1996, 1995 and 1994, respectively.
ArgentBank has no brokered deposits, and there are no major concentrations of
deposits.
8. Interest Rate Risk
ArgentBank is principally engaged in providing short-term commercial
loans with interest rates that fluctuate with various market indices and
short-term, 36 month adjustable rate mortgages. These loans are primarily funded
through short-term demand deposits and long-term certificates of deposit with
variable and fixed rates. The real estate loans are more sensitive to interest
rate risk than the commercial loans due to their fixed rate and longer maturity
characteristics. At December 31, 1996, ArgentBank had average interest-earning
assets of $542,665,000, with a weighted average effective yield of 7.69%, and
average interest-bearing liabilities of $427,737,000, with a weighted average
rate of 3.94%. Management continuously reviews ArgentBank's exposure to changes
in interest rates. Among the factors considered during its evaluations are
changes in the mix of earning assets, growth of earning assets, interest rate
spreads, and repricing periods. Management forecasts and models the impact
various interest rate fluctuations would have on net interest income. Management
believes ArgentBank will not be adversely affected by either rising or falling
interest rates.
9. Financial Instruments With Off-Balance Sheet Risk
ArgentBank is a party to various financial instruments with off-balance
sheet risk in the normal course of business to meet the financing needs of its
customers and to reduce its own exposure to fluctuations in interest rates.
These financial instruments include commitments to extend credit and standby
letters of credit. Those instruments involve, to varying degrees, elements of
credit and interest rate risk in excess of the amounts recognized in the
statements of financial condition. The contract or notional amounts of those
instruments reflect the extent of the involvement ArgentBank has in particular
classes of financial instruments.
At December 31, 1996 and 1995, ArgentBank has made various commitments
to extend credit totaling $41,314,000 and $45,660,000 and financial standby
letters of credit of $4,305,000 and $5,125,000, respectively. Management does
not anticipate any material losses as a result of these transactions.
Commitments to extend credit are agreements to lend to a customer, as
long as there is no violation of any condition established in the contract.
Commitments generally have fixed expiration dates or other termination clauses
and may require payment of a fee. Since many of the commitments are expected to
expire without being fully drawn upon, the total commitment amounts disclosed
above do not necessarily represent future cash requirements.
Standby letters of credit and financial guarantees are conditional
commitments issued by ArgentBank which do guarantee the performance of a
customer to a third party. The credit risk involved in issuing letters of credit
is essentially the same as that involved in extending loan facilities to its
customers.
10. Income Taxes
Deferred income taxes reflect the net tax effects of temporary
differences between the carrying amounts of assets and liabilities for financial
reporting purposes and the amounts used for income tax purposes. There is no
valuation allowance required on the recorded deferred tax asset. Significant
components of ArgentBank's deferred tax assets and liabilities as of December
31, 1996 and 1995 are as follows (in thousands):
<TABLE>
<CAPTION>
1996 1995
- --------------------------------------------------------------------------------
<S> <C> <C>
Deferred Tax Assets:
Reserve for loan losses not currently deductible ... $ 3,551 $ 3,588
Non-accrual interest ............................... 2 3
Amortization of intangible ......................... 27 33
Deferred compensation .............................. 198 141
Other .............................................. 66 116
- --------------------------------------------------------------------------------
Total Deferred Tax Assets ........................ 3,844 3,881
Deferred Tax Liabilities:
Tax over book depreciation ......................... (207) (267)
Prepaid pension cost ............................... (30) (63)
Net unrealized gain on available-for-sale securities (49) (717)
Other .............................................. (101) (19)
- --------------------------------------------------------------------------------
Total Deferred Tax Liabilities ................... (387) (1,066)
- --------------------------------------------------------------------------------
Net Deferred Tax Asset ............................... $ 3,457 $ 2,815
================================================================================
</TABLE>
The components of income tax expense are as follows for the years ended
December 31, 1996, 1995 and 1994 (in thousands):
<TABLE>
<CAPTION>
Years Ended December 31,
- ----------------------------------------------------------
1996 1995 1994
- ----------------------------------------------------------
<S> <C> <C> <C>
Current .......... $ 3,558 $ 3,338 $ 3,929
Deferred (benefit) 26 378 (209)
- ----------------------------------------------------------
$ 3,584 $ 3,716 $ 3,720
==========================================================
</TABLE>
The provision for federal income taxes differs from the amount computed
by applying the U. S. Federal income tax statutory rate (35% in 1996, 1995, and
1994) on income as follows (in thousands):
<TABLE>
<CAPTION>
Years Ended December 31,
- -------------------------------------------------------------------------------------------------------------------------
1996 1995 1994
- -------------------------------------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C> <C> <C>
Taxes calculated at statutory rate $ 3,963 35% $ 4,127 35% $ 4,103 35%
Decrease resulting from:
Tax-exempt interest ............ (349) (3%) (351) (3%) (356) (3%)
Other, net ..................... (30) - - - (60) - - - (27) - - -
- -------------------------------------------------------------------------------------------------------------------------
$ 3,584 32% $ 3,716 32% $ 3,720 32%
=========================================================================================================================
</TABLE>
11. Employee Benefit Plans
Retirement Plan. ArgentBank has a non-contributory defined benefit plan
covering substantially all employees meeting certain criteria relating to length
of employment, age and hours worked in each year. The benefits are based upon
years of service and employees' average of the highest five years compensation
during the last ten years of employment. ArgentBank's funding policy is to
contribute annually an amount between the minimum and maximum amount that can be
deducted for federal income tax purposes.
The following table sets forth the Plan's funded status and amounts
recognized in the financial statements as of December 31, (in thousands):
<TABLE>
<CAPTION>
December 31,
1996 1995
- ----------------------------------------------------------------------
<S> <C> <C>
Projected benefit obligations:
Vested benefits .................... ($6,245) ($6,102)
Non-vested benefits ................ (333) (346)
- ----------------------------------------------------------------------
Accumulated benefit obligations ...... (6,578) (6,448)
Effect of future compensation ........ (2,953) (3,067)
- ----------------------------------------------------------------------
Projected benefit obligations (PBO) .. (9,531) (9,515)
Plan assets at fair value ............ 7,884 7,187
- ----------------------------------------------------------------------
Unfunded PBO ......................... (1,647) (2,328)
Prepaid prior service cost ........... 1,343 1,669
Prepaid net transition obligation .... (265) (293)
Unrecognized net loss ................ 583 1,014
Unrecognized net transition obligation 95 103
- ----------------------------------------------------------------------
Prepaid pension cost ................. $ 109 $ 165
======================================================================
</TABLE>
Net Periodic pension cost for the year ended December 31, is as follows
(in thousands):
<TABLE>
<CAPTION>
Years Ended December 31,
1996 1995 1994
<S> <C> <C> <C>
Service cost-benefits earned during the period 361 $ 331 $ 378
Interest paid on PBO ......................... 670 657 581
Return on plan assets ........................ (539) (498) (86)
Net amortization and deferral ................ 49 96 (231)
- ---------------------------------------------------------------------------------------
Net pension expense .......................... $ 541 $ 586 $ 642
=======================================================================================
</TABLE>
In determining the Plan's funded status, the weighted average discount
rate assumed was 7.75% in 1996, 7.50% in 1995, and 7.75% in 1994. The rate of
increase in future compensation levels was 5.25% in 1996, 5.00% in 1995, and
5.25% in 1994. The expected rate of return on plan assets was 8.0% in 1996,
1995, and 1994.
Tax-Deferred Savings Plan. ArgentBank has a tax-deferred savings plan
covering all employees meeting certain criteria relating to length of
employment, age and hours worked in each year. Employees may voluntarily
contribute up to 15% of gross pay to the plan. Employees receive matching
contributions from ArgentBank of 25% of employee contributions up to a maximum
of 4% of the employee's qualified earnings. Vesting in ArgentBank's matching
contributions are immediate. Bank contributions were $39,000 in 1996, $36,000 in
1995 and 1994.
Postretirement Benefits. In addition to the above benefits, ArgentBank
provides health care benefits (postretirement benefits) for retired bank
officers. All bank officers who have 25 years of service may become eligible for
those benefits if they reach retirement age while working for ArgentBank.
ArgentBank retains the right to amend or terminate these retiree health benefits
at any time.
The plan covers bank officers retired from active service, under the
age of 65, who are receiving pension benefits from ArgentBank's retirement plan.
The plan basically covers the cost of medical and dental claims under
ArgentBank's health care plan for the retiree only. No provision has been
assumed for spouses and dependents, and benefits cease once the retiree becomes
eligible for Medicare. The plan has no assets, and ArgentBank does not advance
fund any of these anticipated costs.
At December 31, the unfunded postretirement obligation was as follows
(in thousands):
<TABLE>
<CAPTION>
1996 1995
- --------------------------------------------------------------------------------
<S> <C> <C>
Accumulated postretirement benefit obligation (APBO)
Retirees ......................................... $ 50 $ 27
Active fully eligible employees .................. 286 256
- --------------------------------------------------------------------------------
336 283
Unrecognized net gain (loss) ....................... (107) (86)
- --------------------------------------------------------------------------------
Accrued postretirement benefit cost ................ $ 229 $ 197
================================================================================
</TABLE>
The net periodic cost for this benefit plan includes the following components
(in thousands):
<TABLE>
<CAPTION>
Years Ended December 31,
1996 1995 1994
<S> <C> <C> <C>
Service cost .................................. $15 $ 8 $10
Interest cost on accumulated benefit obligation 22 18 20
Amortization of gain .......................... 7 2 5
- --------------------------------------------------------------------------------
Net periodic cost ............................. $44 $28 $35
================================================================================
</TABLE>
For measurement purposes, a 10.0% annual rate of increase in per capita
cost of covered benefits was assumed for 1997 with rates trending downward
thereafter to 5.5% in 2007. A 10.5% annual rate of increase in per capita cost
of covered benefits was assumed for 1996. The 1983 group Annuity Mortality Table
was used in 1996 and 1995 to estimate probable withdrawals from the plan. The
discount rate used in determining the accumulated postretirement benefit
obligation was 7.0% in 1996 and 8.5% in 1995.
The health care cost trend rate assumption has a significant effect on
the amounts reported. To illustrate, increasing the assumed health care cost
trend rates in each year would increase the postretirement benefit obligation as
of December 31, 1996 and 1995 by $91,900 and $48,500, respectively, and the net
periodic benefit cost by $9,700 and $5,853, respectively.
12. Shareholders' Equity
On October 13, 1995, the Board of Directors declared a two-for-one
stock split, paid November 15, 1995 in the form of a dividend of one additional
share of ArgentBank's common stock for each share owned by shareholders of
record at the close of business on October 31,1995. The stock split resulted in
the issuance of 2,987,732 additional shares of common stock from authorized but
unissued shares. The issuance of authorized but unissued shares resulted in a
transfer of $298,773 from capital surplus to common stock. Accordingly, earnings
per share, cash dividends per share, and weighted average shares of common stock
outstanding have been restated to reflect the stock split.
The payment of dividends by ArgentBank is restricted by various
regulatory and statutory limitations. In 1997, ArgentBank will have available to
pay dividends, without regulatory approval, approximately $43.7 million, plus
net retained income earned in 1997 prior to the dividend declaration date.
13. Commitments & Contingencies
In January 1995 the Board of Directors authorized a grant of stock
appreciation rights to the President and CEO to provide incentives for his
efforts to enhance growth in shareholder value. Pursuant to the grant, he was
awarded 47,272 units of common shares which entitle him upon exercise to the
difference between the quoted closing price of ArgentBank's shares as listed on
a national exchange and the quoted value at the date of grant of $12.75. The
grant expires in January 1998 but is renewable at ArgentBank's option. None of
the stock appreciation rights were exercised during 1996 or 1995 and the effects
on the 1996 and 1995 statements of income were not material.
ArgentBank applies Accounting Principles Board (APB) Opinion 25 and
related interpretations in accounting for stock appreciation rights. However,
had ArgentBank adopted the provisions of Statement of Financial Accounting
Standards No. 123, "Accounting for Stock-Based Compensation" the effect on its
financial statements would have been t he same.
ArgentBank has entered into leases for the rental of certain facilities
and equipment, including the data processing equipment and services related to
that equipment. Minimum future commitments under non-cancelable lease
obligations for the five years ended December 31, 2001 are detailed below. It is
expected that in the normal course of business, expiring leases will be renewed
or replaced by leases on other facilities or equipment.
<TABLE>
<CAPTION>
1997 1998 1999 2000 2001
- -----------------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C> <C>
Non-cancelable operating leases $1,688 $1,318 $ 693 $ 84 $ 53
</TABLE>
Rent expense under all non-cancelable operating lease obligations
aggregated $1,834,000 for 1996, $1,621,000 for 1995, and $1,172,000 for 1994.
ArgentBank is party to various legal proceedings arising in the
ordinary course of business. In the opinion of management, the ultimate
resolution of these legal proceedings will not have a material adverse effect on
ArgentBank's financial statements.
14. Regulatory Matters
ArgentBank is subject to various regulatory capital requirements
administered by the federal banking agencies. Failure to meet minimum capital
requirements can initiate certain mandatory--and possible additional
discretionary--actions by the regulators that, if undertaken, could have a
direct material effect on ArgentBank's financial statements. Under capital
adequacy guidelines and the regulatory framework for prompt corrective action,
ArgentBank must meet specific capital guidelines that involve quantitative
measures of ArgentBank's assets, liabilities, and certain off-balance-sheet
items as calculated under regulatory accounting practices. ArgentBank's capital
amounts and classification are also subject to qualitative judgments by the
regulators about components, risk weightings, and other factors.
Qualitative measures established by regulation to ensure capital
adequacy require ArgentBank to maintain minimum amounts and ratios (set forth in
the table below) of total and Tier 1 capital (as defined in the regulations) to
risk-weighted assets (as defined), and of Tier 1 (as defined) to average assets
(as defined). Management believes, as of December 31, 1996, that ArgentBank
meets all capital adequacy requirements to which it is subject.
As of December 31, 1996, the most recent notification from the Federal
Deposit Insurance Corporation categorized ArgentBank as "well capitalized" under
the regulatory framework for prompt corrective action. To be categorized as
"well capitalized" ArgentBank must maintain minimum total risk-based, Tier 1
risk-based, Tier 1 leverage ratios as set forth in the table. There are no
conditions or events since that notification that Management believes have
changed the institution's category.
ArgentBank's actual capital amounts and ratios are also presented in
the table.
<TABLE>
<CAPTION>
To be Well
Capitalized Under
For Capital Prompt Corrective
Actual Adequacy Purposes Action Provisions
- ---------------------------------------------------------------------------------------------------------------------------------
As of December 31, 1995: Amount Ratio Amount Ratio Amount Ratio
- ---------------------------------------------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C> <C> <C>
Total Capital (to Risk Weighted .. $73,226 16.35% $35,850 8.00% $44,813 10.00%
Assets)
Tier 1 Capital (to Risk Weighted . $67,567 15.08% $17,900 4.00% $26,850 6.00%
Assets)
Tier 1 Capital (to Average Assets) $67,567 11.79% $22,900 4.00% $28,625 5.00%
</TABLE>
<TABLE>
<CAPTION>
To be Well
Capitalized Under
For Capital Prompt Corrective
Actual Adequacy Purposes Action Provisions
- ---------------------------------------------------------------------------------------------------------------------------------
As of December 31, 1995: Amount Ratio Amount Ratio Amount Ratio
- ---------------------------------------------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C> <C> <C>
Total Capital (to Risk Weighted $70,987 15.10% $37,625 8.00% $47,025 10.00%
Assets)....................................
Tier 1 Capital (to Risk Weighted $65,111 13.85% $18,825 4.00% $28,225 6.00%
Assets)....................................
Tier 1 Capital (to Average Assets)......... $65,111 12.03% $21,650 4.00% $27,075 5.00%
</TABLE>
15. Disclosures About Fair Value of Financial Instruments
The following methods and assumptions were used to estimate the fair
value of each class of financial instruments for which it is practical to
estimate that value.
Cash and Short-Term Investments. For those short-term instruments, the
carrying amount is a reasonable estimate of fair value.
Securities. For securities the fair value equals quoted market price,
if available. If a quoted market price is not available, fair value is estimated
using a quoted market price for similar securities.
Loan Receivables. The fair value of loans is estimated by discounting
the future cash flows using the current rates at which similar loans would be
made to borrowers with similar credit ratings and for the same remaining
maturities.
Deposit Liabilities. The fair value of demand deposits, savings
accounts and certain money market deposits is the amount payable at the
reporting date. The fair value of fixed-maturity certificates of deposit is
estimated using the rates currently offered for deposits of similar remaining
maturities.
Commitments to Extend Credit. The fair value of commitments is
estimated using the fees currently charged to enter into similar agreements,
taking into account the remaining terms of the agreements and the present
credit-worthiness of the counterparties. For fixed-rate loan commitments, fair
value also considers the difference between current levels of interest rates and
the committed rates.
The estimated fair values of ArgentBank's financial instruments, as of
December 31, follows (in thousands):
<TABLE>
<CAPTION>
December 31,
- -------------------------------------------------------------------------------------------------
1996 1995
- -------------------------------------------------------------------------------------------------
Carrying Fair Carrying Fair
Amount Value Amount Value
- -------------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C>
Financial assets:
Cash and short-term investments $ 41,281 $ 41,281 $ 32,786 $ 32,786
Securities .................... 192,659 192,691 233,312 233,197
Loans, net .................... 335,286 334,742 277,926 279,941
Financial liabilities:
Non-interest-bearing deposits . $ 82,693 $ 82,693 $ 77,291 $ 77,291
Interest-bearing deposits ..... 433,795 416,541 412,877 401,781
</TABLE>
16. Subsequent Event (Unaudited)
On June 30, 1997, the Bank completed the acquisition of Assumption Bank
&Trust Company. The purchase price was $21,500,000 paid in cash and common stock
of ArgentBank. In connection with the acquisition, the Bank issued 666,060
shares of common stock and paid $7,531,796 in cash.
The following unaudited pro forma results of operations give effect to
the acquisition of Assumption Bank & Trust Company as though it had occurred on
January 1, 1996 (in thousands, except per share data):
<TABLE>
<CAPTION>
Year Ended
December 31, 1996
<S> <C>
Interest income ................................. $ 49,228
Interest expense ................................ 20,053
Provision for loan loss ......................... (264)
- ----------------------------------------------------------------
Net interest income after provision for loan loss $ 29,439
- -----------------------------------------------------------------
Net income ...................................... $ 8,033
- -----------------------------------------------------------------
Net income per share ............................ $ 1.22
- -----------------------------------------------------------------
</TABLE>
The unaudited pro forma information is not necessarily indicative
either of the results of operations that would have occurred had the purchase
been made as of January 1, 1996 or of future results of operations of the
combined companies. In connection with the acquisition, liabilities were assumed
as follows:
<TABLE>
<CAPTION>
<S> <C>
Fair value of assets, excluding cash $72,281
Cash acquired ...................... 25,727
- --------------------------------------------------
Liabilities assumed ................ $98,008
- --------------------------------------------------
</TABLE>
ARGENTBANK'S MANAGEMENT'S DISCUSSION AND ANALYSIS
OF FINANCIAL CONDITION AND RESULTS OF OPERATIONS
Financial Summary
ArgentBank's net income amounted to $7.7 million or $1.31 per share for
the year ended December 31, 1996, as compared to $8.1 million or $1.35 per share
for the same period in 1995. ArgentBank's annual return on average assets was
1.35%. Total assets were $590.0 million at December 31, 1996, compared to $562.1
million at December 31, 1995, an increase of 4.96%. Net interest income
increased by $1.1 million or 4.77%, as compared to the prior year. The rise in
net interest income experienced in 1996 is contributable to the redeployment of
earning assets into the lending area.
Loans totaled $345.7 million at December 31, 1996, compared to $288.5
million a year earlier. Commercial and real estate loans increased by $43.7
million as the economy in all regions showed signs of improvement. The increase
in loan volume was also due in part to the Indirect Loan Program initiated in
October 1994. The Indirect Loan Program totaled $35.8 million at December 31,
1996, compared to $21.0 million at December 31, 1995.
ArgentBank's annual return on average shareholders' equity was 11.7%
for 1996, as compared to 12.9% for the same period in 1995. Shareholders' equity
as of December 31, 1996 amounted to $67.7 million, as compared to $66.5 million
at December 31, 1995. The shareholders equity-capital-to-total-assets ratio
(excluding market fluctuations) as of December 31, 1996 was 11.5%, compared to
11.6% the prior year (by comparison, the regulatory minimum capital ratio is
3.0%). The ratio of primary-capital-(equity capital plus allowance for loan
losses, excluding market fluctuations) to-total-assets as of December 31, 1996
was 13.2%, as compared to 13.5% for the prior year.
As of December 31, 1996, the allowance for loan losses was $10.4
million, as compared to $10.6 million at December 31, 1995. This represents a
reserve-to-loan ratio of 3.0%, as compared to 3.7% at December 31, 1995. At
December 31, 1996, non-performing loans totaled $224 thousand, or .06% of total
loans outstanding, as compared to $130 thousand or .05% of total loans
outstanding in the prior year.
Total non-performing assets (including non-performing loans,
restructured debt and repossessed assets) were $1.1 million at December 31,
1996, representing .17% of total assets, compared to the prior year's total of
$941 thousand or .17% of total assets. As of December 31, 1996, ArgentBank had
no other real estate owned. ArgentBank experienced net recoveries of $174
thousand in 1996, as compared to charge-offs of $102 thousand for 1995. The net
charge-offs-to-average-loans for 1996 was -.05%, as compared to .04% a year
earlier. The favorable net charge-offs and a continual low level of
non-performing assets in 1996 enabled ArgentBank to record a negative provision
of $300 thousand for the year, as compared to a negative provision of $1.0
million in the previous year.
Total cash dividends paid for 1996 and 1995 were $.52 and $.48 per
share, respectively, reflecting an increase of 8.3%. All per-share figures in
management's discussion and analysis give effect to the two-for-one stock split
effective October 31, 1995.
Financial Condition
Assets
Total assets at December 31, 1996 were $590.0 million, an increase of
$27.9 million from the December 31, 1995 total of $562.1 million. Total loans
outstanding increased by $57.2 million to $345.7 million at December 31, 1996,
compared to $288.5 million at December 31, 1995. The redeployment of earning
assets into loans enabled ArgentBank to hedge the erosion of the net interest
margin in the face of declining interest rates during most of 1996. The
following table reflects the changes in ArgentBank's loan portfolio for years
1996, 1995 and 1994 (in thousands).
<TABLE>
<CAPTION>
Table 1 - Loan Portfolio 1996 1995 1994
Loans Loans Loans
Years Ended December 31, (in thousands) Outstanding Outstanding Outstanding
<S> <C> <C> <C>
Loans secured by real estate:
Construction and land development ....................... $ 9,010 $ 5,864 $ 2,382
Secured by farmland ..................................... 2,464 416 476
Secured by 1-4 family residential properties ............ 91,908 80,626 67,791
Secured by multifamily (5 or more) residential properties 27,697 24,607 18,772
Secured by nonfarm nonresidential properties ............ 115,803 100,479 82,300
Loans to depository institutions .......................... - - - - 326 731
Loans to finance agricultural production and
other loans to farmers .................................. 122 32 71
Commercial and industrial loans ........................... 42,252 35,286 30,040
Loans to individuals for household, family, and
other personal expenditures ............................. 53,341 37,728 24,788
Obligations of state and political subdivisions ........... 3,907 3,818 4,797
Other loans ............................................... 88 111 55
Less: Unearned income on loans ............................ (879) (814) (745)
- -------------------------------------------------------------------------------------------------------------------
Total loans and leases, net of unearned income ............ $ 345,713 $ 288,479 $ 231,458
===================================================================================================================
</TABLE>
On December 31, 1996, ArgentBank's total securities portfolio amounted
to $192.7 million, as compared to $233.3 million at December 31, 1995. The
securities portfolio represented 32.7% of total assets and 35.1% of earning
assets as of December 31, 1996. The following table reflects ArgentBank's
breakdown of the investment portfolio for 1996, 1995 and 1994 (in thousands).
<TABLE>
<CAPTION>
Table 2 - Securities Portfolio
Years Ended December 31, (in thousands) 1996 1995 1994
- ---------------------------------------------------------------------------------------------------------
<S> <C> <C> <C>
U. S. Treasury securities ............................. $ 53,768 $ 83,263 $ 87,881
U. S. Government agency and corporation obligations:
Issued by FNMA and FHLMC ............................ 33,194 8,406 9,973
Guaranteed by GNMA .................................. 203 263 409
Collateralized mortgage obligations ................. 11,926 27,757 38,158
All other U. S. Government agencies ................. 58,822 56,681 54,839
Securities issued by states and political subdivisions:
General obligations ................................. 10,286 13,212 15,025
Revenue obligations ................................. 6,666 10,681 10,118
Other domestic debt securities:
Privately-issued collateralized mortgage obligations 9,377 14,900 24,035
All other ........................................... 6,090 16,237 36,106
Equity securities .................................... 2,327 1,912 1,793
- ---------------------------------------------------------------------------------------------------------
Total securities portfolio ............................ $192,659 $233,312 $278,337
=========================================================================================================
</TABLE>
Liabilities
Total deposits increased by $26.3 million to $516.5 million at December
31, 1996, from $490.2 million at December 31, 1995. The net increase in deposits
is due mainly to increases in time deposits. Table 3 reflects the changes in the
deposit mix for years 1996, 1995 and 1994 (in thousands).
<TABLE>
<CAPTION>
Table 3 - Deposit Composition
December 31,
1996 1995 1994
- -----------------------------------------------------------------------------------
<S> <C> <C> <C>
Non-interest-bearing - demand .... $ 82,693 $ 77,291 $ 75,697
Interest-bearing - demand ........ 68,365 63,678 66,047
Money Market Accounts ............ 88,651 89,806 111,067
Regular Savings and Christmas Club 42,725 43,416 48,718
Individual Retirement Accounts ... 27,516 27,407 26,681
Time Deposit - Personal .......... 136,746 127,649 117,012
Time Deposit - Non-personal ...... 18,270 19,822 13,623
Time Deposit - Political ......... 51,522 41,099 28,078
- -----------------------------------------------------------------------------------
Total Deposits ................... $516,488 $490,168 $486,923
===================================================================================
</TABLE>
Shareholders' Equity
ArgentBank's annual return on average shareholders' equity was 11.75%
for 1996, as compared to 12.9% for the same period in 1995. Shareholders' equity
increased $1.2 million during 1996 to $67.7 million, from $66.5 million at
December 31, 1995. Table 4 illustrates the changes in shareholders' equity for
years 1996, 1995 and 1994 (in thousands).
<TABLE>
<CAPTION>
Table 4 - Shareholders' Equity Changes
Years Ended December 31,
1996 1995 1994
- --------------------------------------------------------------------------------------------------------------
<S> <C> <C> <C>
Balance at beginning of year .............................. $ 66,503 $ 59,022 $ 54,083
Net income ................................................ 7,738 8,074 8,002
Cash dividends paid ....................................... (3,070) (2,837) (2,211)
Common shares purchased & retired ......................... (2,212) - - - - - -
Net unrealized gain/(loss) on available-for-sale securities (1,296) 2,244 (852)
- --------------------------------------------------------------------------------------------------------------
Balance at end of year .................................... $ 67,663 $ 66,503 $ 59,022
==============================================================================================================
</TABLE>
Bank regulatory agencies require minimum capital standards. Currently,
the minimum total risk-based capital requirement is 8.0%, and ArgentBank's
adjusted assets capital ratio stands at 16.35%. The Tier-1 risk- based capital
requirement is 4.0%, and ArgentBank's Tier-1 adjusted assets capital ratio is
15.08%. ArgentBank's core capital-to-total assets was 11.79% as of December 31,
1996, compared to a minimum requirement of 3.0% by the regulatory agencies.
During 1996, the Board of Directors declared cash dividends totaling
$.52 per share, an increase of 8.3% over last year. During 1995, the Board of
Directors declared a two-for-one stock split to shareholders of record on
October 31, 1995.
Loan Loss Reserves and Provision for Loan Losses
Management evaluates the reserve for loan losses periodically to ensure
that its level is adequate to absorb loan losses in the loan portfolio. At
December 31, 1996, the reserve for loan losses was $10.4 million, as compared to
$10.6 million at December 31, 1995. The provision for loan losses is a charge
against currentperiod earnings and is added to the allowance for loan losses to
establish a reserve level considered adequate by management to absorb future
potential loan losses. A negative provision of $300 thousand was taken during
1996, as compared to a negative provision of $1.0 million in 1995. The net
charge-offs for 1996 reflects -.05 percent, as compared to net charge-offs of
.04 percent a year earlier. The favorable reductions in non-performing assets
enabled ArgentBank to record a negative provision. Management believes that the
allowance for loan losses at December 31, 1996 is adequate to absorb any losses
in ArgentBank's portfolio. Table 5 recaps ArgentBank's charge-offs and
recoveries experience in 1996 and 1995 by quarter (in thousands).
<TABLE>
<CAPTION>
Table 5 - Charge-offs and Recoveries
1996 1995
YTD 4th 3rd 2nd 1st YTD 4th 3rd 2nd 1st
<S> <C> <C> <C> <C> <C> <C> <C> <C> <C> <C>
Charge-offs:
Real estate loans ... $ 16 $ 16 - - - - - - - - - $ 103 $ 38 $ 15 $ 4 $ 46
Agricultural loans .. - - - - - - - - - - - - - - - - - - - - - - - - - - - - - -
Commercial &
industrial loans 22 15 7 - - - - - - 16 - - - 16 - - - - - -
Consumer loans ...... 271 114 68 73 16 135 36 24 42 33
All other loans ..... 96 36 24 16 20 68 17 19 14 18
- -----------------------------------------------------------------------------------------------------------------------------------
Total Charge-offs . $ 405 $ 181 $ 99 $ 89 $ 36 $ 322 $ 91 $ 74 $ 60 $ 97
===================================================================================================================================
Recoveries:
Real estate loans ... $ 416 $ 34 $ 26 $ 32 $ 324 $ 54 $ 28 $ 5 $ 7 $ 14
Agricultural loans .. - - - - - - - - - - - - - - - - - - - - - - - - - - - - - -
Commercial &
industrial loans 14 2 10 1 1 8 1 5 1 1
Consumer loans ...... 126 22 33 44 27 142 17 36 40 49
All other loans ..... 23 8 3 4 8 16 6 3 2 5
- -----------------------------------------------------------------------------------------------------------------------------------
Total Recoveries .. $ 579 $ 66 $ 72 $ 81 $ 360 $ 220 $ 52 $ 49 $ 50 $ 69
===================================================================================================================================
Net Charge-offs / (Net
Recoveries) ........... $(174) $ 115 $ 27 $ 8 $(324) $ 102 $ 39 $ 25 $ 10 $ 28
===================================================================================================================================
Provision for loan
losses/(negative
provisions) ........... $(300) - - - - - - - - - $(300) (1000) $(250) $(250) $(250) $(250)
===================================================================================================================================
</TABLE>
Liquidity
Liquidity represents ArgentBank's ability to provide funds to satisfy
demands from depositors, borrowers and other commitments by either converting
assets to cash or accessing new or existing sources of funds. The principal
sources of funds which provide liquidity are customer deposits, customer
payments of principal and interest on loans, maturities of securities, earnings
and borrowings. Management closely monitors the maturities of ArgentBank's
assets and liabilities through a periodic review of maturity profiles,
yield/rate behaviors and loan/deposit forecasts to minimize funding risks.
ArgentBank's level of cash on hand is to provide, at all times, sufficient cash
and other liquid assets for expected demand for funds. At December 31, 1996,
cash and due from banks, securities, federal funds sold and repurchase
agreements were 45.3 percent of deposits, as compared to 54.3 percent at
December 31, 1995.
ArgentBank's loan-to-deposit ratio at year-end 1996 increased to 64.9
percent, compared to 56.7 percent as of December 31, 1995. The Indirect Loan
Program and the increase in loan demand represent the major factors for the
increased percentage.
Results of Operations
The accompanying quarterly summary of income and selected financial
data offers an overview of ArgentBank's results of operations. ArgentBank
reported net income of $7.7 million, or $1.31 per share in 1996, compared to
$8.1 million, or $1.35 per share in 1995. The 1996 operating results are
attributable to the increased loan demand, the reduction in securities gains,
increase in non-interest expense and a reduction in the negative provision for
loan losses.
Net Interest Income
The largest source of earnings is net interest income, the difference
between interest income on interest-earning assets and interest expense incurred
on interest-bearing liabilities. Net interest income was $24.4 million in 1996,
as compared to $23.3 million in 1995, reflecting an increase of $1.1 million.
The increase in net interest income is attributable to the shifting of earning
assets from securities to loans.
Non-Interest Income
Non-interest income remained stable during 1996. Non-interest income is
comprised of service charges on deposits, other non-customer fees and securities
gains and losses. Non-interest income totaled $3.2 million in 1996 and 1995. As
a result of calls on securities and various sales, a gain of $151 thousand was
recognized in 1996 as compared to $579 thousand in 1995.
Non-Interest Expense
Non-interest operating expense increased to $16.6 million in 1996, from
$15.7 million in 1995, an increase of $877 thousand or 5.6 percent. Personnel
expenses increased by $315 thousand, occupancy expenses increased by $252
thousand, data processing expenses increased by $340 thousand, while other
operating expenses decreased by $27 thousand, as compared to 1995. The increase
in personnel cost was due primarily to the expansion of two full-service
branches in Terrebonne Parish, which increased the full-time equivalent staff,
from 210.5 to 222.0. The increase in occupancy expenses was due to the addition
of two full-service branches and the purchase of a document imaging system and
an on-line teller system in 1996. The increase in data processing expenses is
due to outsourcing of ArgentBank's LAN/WAN PC support to EDS.
<PAGE>
<TABLE>
<CAPTION>
1996 1995
- ------------------------------------------------------------------------------------------------------------------------------------
Interest Interest
Taxable-equivalent basis Average Income/ Yield/ Average Income/ Yield/
(Average balance sheet and Balances Expense Rate Balances Expense Rate
income/expense in thousands)
- ------------------------------------------------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C> <C> <C>
Assets:
Interest-Earning Assets:
Loans, including fees ........................ $ 308,548 $ 27,145 8.80% $ 256,880 $ 22,806 8.88%
Time Deposits ................................ - - - - - -
Securities:
U. S. Treasury securities and
obligations of U. S. Government agencies ....... 123,273 7,967 6.46% 129,201 8,062 6.24%
Obligations of States and
political subdivisions ......................... 21,292 1,421 6.67% 23,884 1,592 6.67%
Mortgage-backed and CMO's .................... 63,387 3,856 6.08% 62,915 4,008 6.37%
Corporate bonds .............................. 10,390 489 4.71% 25,190 1,242 4.93%
Federal Home Loan Bank Stock and
mutual funds ................................... 1,977 119 6.02% 1,837 119 6.48%
- ------------------------------------------------------------------------------------------------------------------------------------
Total Securities ........................... 220,319 13,852 6.29% 243,027 15,023 6.18%
Federal funds sold and securities
purchased under agreements to resell ........... 13,798 724 5.25% 15,481 904 5.84%
- ------------------------------------------------------------------------------------------------------------------------------------
Total Interest-Earning Assets .............. 542,665 41,721 7.69% 515,388 38,733 7.52%
Allowance for Loan Losses ...................... (10,577) (11,229)
Non-Interest-Earning Assets .................... 40,645 36,968
- ------------------------------------------------------------------------------------------------------------------------------------
Total Assets ............................... $ 572,733 $ 541,127
====================================================================================================================================
Liabilities and Shareholders' Equity:
Interest-Bearing Liabilities:
Interest-Bearing Deposits:
Interest checking accounts ................. $ 64,965 $ 1,097 1.69% $ 60,007 $ 1,022 1.70%
Money market accounts ...................... 87,474 2,324 2.66% 93,434 2,251 2.41%
Regular savings ............................ 42,574 1,058 2.49% 44,151 1,092 2.47%
Individual retirement accounts ............. 27,541 1,516 5.50% 27,204 1,457 5.36%
Time Deposits .............................. 204,802 10,832 5.29% 175,719 8,989 5.12%
- ------------------------------------------------------------------------------------------------------------------------------------
Total Interest-Bearing Deposits ............ 427,356 16,827 3.94% 400,515 14,811 3.70%
Federal funds purchased and securities
sold under agreements to repurchase ............ 47 4 - 7 1 -
Other interest-bearing liabilities ............. 334 12 - 415 22 -
- ------------------------------------------------------------------------------------------------------------------------------------
Total Interest-Bearing Liabilities ......... 427,737 16,843 400,937 14,834
Non-Interest-Bearing Liabilities:
Demand deposits .............................. 70,645 71,111
Other liabilities ............................ 8,614 6,704
- ------------------------------------------------------------------------------------------------------------------------------------
Total Non-Interest-Bearing Liabilities ..... 79,259 77,815
Shareholders' Equity ........................... 65,737 62,375
- ------------------------------------------------------------------------------------------------------------------------------------
Total Liabilities and Shareholders' Equity . $ 572,733 $ 541,127
====================================================================================================================================
Net Interest Income/Margin ..................... $ 24,878 4.34% $ 23,899 4.42%
</TABLE>
<PAGE>
<TABLE>
<CAPTION>
1994 1993
- -----------------------------------------------------------------------------------------------------------------------------------
Taxable-equivalent basis (cont.) Interest Interest
(Average balance sheet and Average Income/ Yield/ Average Income/ Yield/
income/expense in thousands) Balances Expense Rate Balances Expense Rate
- -----------------------------------------------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C> <C> <C>
Assets:
Interest-Earning Assets:
Loans, including fees .................. $ 210,761 $ 18,195 8.63% $ 189,727 $ 17,266 9.10%
Time Deposits .......................... 71 3 3.96% 130 5 3.52%
Securities:
U. S. Treasury securities and
obligations of U. S. Government agencies . 149,587 8,411 5.62% 158,765 10,735 6.76%
Obligations of States and
political subdivisions ................... 24,300 1,607 6.61% 19,979 1,536 7.69%
Mortgage-backed and CMO's .............. 75,764 4,223 5.57% 89,661 4,811 5.37%
Corporate bonds ........................ 44,854 2,272 5.06% 36,225 2,084 5.75%
Federal Home Loan Bank Stock and
mutual funds ............................. 1,738 82 4.75% 218 8 3.55%
- -----------------------------------------------------------------------------------------------------------------------------------
Total Securities ..................... 296,243 16,595 5.60% 304,848 19,174 6.29%
Federal funds sold and securities
purchased under agreements to resell ..... 10,673 451 4.23% 17,183 498 2.90%
- -----------------------------------------------------------------------------------------------------------------------------------
Total Interest-Earning Assets ........ 517,748 35,244 6.81% 511,888 36,943 7.22%
Allowance for Loan Losses ................ (12,791) (12,521)
Non-Interest-Earning Assets .............. 38,729 36,315
- -----------------------------------------------------------------------------------------------------------------------------------
Total Assets ......................... $ 543,686 $ 535,682
===================================================================================================================================
Liabilities and Shareholders' Equity:
Interest-Bearing Liabilities:
Interest-Bearing Deposits:
Interest checking accounts ........... $ 61,404 $ 1,048 1.71% $ 61,451 $ 1,077 1.75%
Money market accounts ................ 112,337 2,487 2.21% 113,335 2,564 2.26%
Regular savings ...................... 48,416 1,199 2.48% 47,241 1,206 2.55%
Individual retirement accounts ....... 26,870 1,222 4.55% 27,185 1,295 4.77%
Time Deposits ........................ 160,095 5,903 3.69% 167,838 5,722 3.41%
- -----------------------------------------------------------------------------------------------------------------------------------
Total Interest-Bearing Deposits ......... 409,122 11,859 2.90% 417,050 11,864 2.84%
Federal funds purchased and securities
sold under agreements to repurchase ...... 196 10 - - - -
Other interest-bearing liabilities ....... 345 19 - - 11 -
- -----------------------------------------------------------------------------------------------------------------------------------
Total Interest-Bearing Liabilities ... 409,663 11,888 11,875
Non-Interest-Bearing Liabilities:
Demand deposits ........................ 70,432 62,669
Other liabilities ...................... 6,327 5,269
- -----------------------------------------------------------------------------------------------------------------------------------
Total Non-Interest-Bearing Liabilities 76,759 67,938
Shareholders' Equity ..................... 57,264 50,694
- -----------------------------------------------------------------------------------------------------------------------------------
Total Liabilities and Shareholders' ..
Equity ................................... $ 543,686 $ 535,682
===================================================================================================================================
Net Interest Income/Margin ............... $ 23,356 4.30% $ 25,068 4.68%
</TABLE>
<PAGE>
<TABLE>
<CAPTION>
1992
- ------------------------------------------------------------------------------------
Taxable-equivalent basis (cont.) Interest
(Average balance sheet and Average Income/ Yield
income/expense in thousands) Balances Expense /Rate
- ------------------------------------------------------------------------------------
<S> <C> <C> <C>
Assets:
Interest-Earning Assets:
Loans, including fees .................. $ 193,126 $ 19,005 9.84%
Time Deposits .......................... 131 6 4.31%
Securities:
U. S. Treasury securities and
obligations of U. S. Government agencies . 175,293 13,378 7.63%
Obligations of States and
political subdivisions ................... 15,275 1,179 7.72%
Mortgage-backed and CMO's .............. 89,175 5,447 6.11%
Corporate bonds ........................ 29,160 2,175 7.46%
Federal Home Loan Bank Stock and
mutual funds ............................. - - -
- -----------------------------------------------------------------------------------
Total Securities ..................... 308,903 22,179 7.18%
Federal funds sold and securities
purchased under agreements to resell ..... 14,398 508 3.53%
- -----------------------------------------------------------------------------------
Total Interest-Earning Assets ........ 516,558 41,698 8.07%
Allowance for Loan Losses ................ (9,277)
Non-Interest-Earning Assets .............. 33,732
- -----------------------------------------------------------------------------------
Total Assets ......................... $ 541,013
===================================================================================
Liabilities and Shareholders' Equity:
Interest-Bearing Liabilities:
Interest-Bearing Deposits:
Interest checking accounts ........... $ 57,167 $ 1,499 2.62%
Money market accounts ................ 120,971 3,932 3.25%
Regular savings ...................... 40,188 1,441 3.58%
Individual retirement accounts ....... 27,650 1,593 5.76%
Time Deposits ........................ 190,994 8,526 4.46%
- -----------------------------------------------------------------------------------
Total Interest-Bearing Deposits .......... 436,970 16,991 3.89%
Federal funds purchased and securities
sold under agreements to repurchase ...... - - -
Other interest-bearing liabilities ....... - 14 -
- -----------------------------------------------------------------------------------
Total Interest-Bearing Liabilities ... 17,005
Non-Interest-Bearing Liabilities: ........
Demand deposits ........................ 54,953
Other liabilities ...................... 4,207
- -----------------------------------------------------------------------------------
Total Non-Interest-Bearing Liabilities 59,160
Shareholders' Equity ..................... 44,883
- -----------------------------------------------------------------------------------
Total Liabilities and Shareholders'
Equity ................................... $ 541,013
===================================================================================
Net Interest Income/Margin ............... $ 24,693 4.56%
</TABLE>
<PAGE>
<TABLE>
<CAPTION>
ArgentBank
Comparative Statement of Condition (Unaudited)
(in thousands)
9/30/97 12-31-96
$ % $ %
of Assets of Assets
- --------------------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C>
Assets:
Cash & Due From Banks ....................... 24,314 3.21% 20,331 3.45%
Federal Funds Sold .......................... 45,600 6.02% 20,950 3.55%
Securities:
Held-to-maturity (approximate market value
of $37,558 and $42,465 at 6-30-97 and
12-31-96, respectively) ................. 36,633 4.83% 42,433 7.19%
Available-for-sale (amortized cost
of $176,748 and $150,080 at 6-30-97 and
12-31-96, respectively) ................. 176,117 23.23% 150,226 25.46%
Gross Loans ................................. 450,505 59.43% 344,834 58.46%
Unearned Income ............................. 855 0.11% 879 0.15%
Allowance for Loan Losses ................... (10,706) (1.41%) (10,427) (1.77%)
- --------------------------------------------------------------------------------------------------------
Net Loans ................................... 440,654 58.13% 335,286 56.83%
- --------------------------------------------------------------------------------------------------------
Premises and Fixed Assets ................... 10,652 1.41% 9,855 1.67%
Other Real Estate Owned ..................... 279 0.04% - 0.00%
Goodwill .................................... 11,645 1.54% - 0.00%
Other Assets ................................ 12,174 1.61% 10,873 1.84%
- --------------------------------------------------------------------------------------------------------
Total Assets ................................ 758,068 589,954
========================================================================================================
Liabilities:
Non-interest Bearing Deposits ............... 84,405 11.13% 82,693 14.02%
Interest Bearing Deposits ................... 545,192 71.92% 433,795 73.53%
- --------------------------------------------------------------------------------------------------------
Total Deposits .............................. 629,597 83.05% 516,488 87.55%
- --------------------------------------------------------------------------------------------------------
Federal Funds Purchased ..................... 34,716 4.58% - 0.00%
Other Liabilities ........................... 7,566 1.00% 5,803 0.98%
- --------------------------------------------------------------------------------------------------------
Total Liabilities ........................... 671,879 88.63% 522,291 88.53%
- --------------------------------------------------------------------------------------------------------
Shareholders' Equity:
Common Stock - $.10 par value ............... 653 0.09% 586 0.10%
No. of Shares Authorized 10,000,000
No. of Shares Issued 6,385,333
Surplus ..................................... 38,981 5.14% 25,079 4.25%
Net unrealized gain of AFS Securities ....... 1,002 0.13% 96 0.02%
Undivided Profits ........................... 45,553 6.01% 41,902 7.10%
- --------------------------------------------------------------------------------------------------------
Total Shareholders' Equity .................. 86,189 11.37% 67,663 11.47%
- --------------------------------------------------------------------------------------------------------
Total Liabilities and Equity ................ 758,068 589,954
========================================================================================================
</TABLE>
<PAGE>
<TABLE>
<CAPTION>
ArgentBank
Statement of Income (Unaudited)
September 30, 1997
(in thousands, except Net Income per share data)
3rd Quarter Results YTD
- ---------------------------------------------------------------------------------
9-30-97 9-30-96 9-30-97 9-30-96
- ---------------------------------------------------------------------------------
<S> <C> <C> <C> <C>
Interest Income:
Interest and fees on loans ........ 10,002 6,887 25,778 19,779
Interest from banks ............... 10 - 10 -
Interest on federal funds sold .... 753 95 1,352 434
Interest on Investments:
U.S. Treasury & Agency Securities 2,874 2,774 8,156 8,459
State & Political Subdivisions .. 311 255 671 782
Other Domestic Debt Securities .. 105 289 428 1,108
Equity Securities ............... 32 29 94 86
- ---------------------------------------------------------------------------------
Total Interest Income ............. 14,087 10,329 36,489 30,648
- ---------------------------------------------------------------------------------
Interest Expense:
Interest on TD's over $100,000 .... 1,406 1,329 3,982 3,770
Interest on other deposits ........ 4,558 2,957 11,078 8,808
- ---------------------------------------------------------------------------------
Total Interest Expense ............ 5,964 4,286 15,060 12,578
- ---------------------------------------------------------------------------------
Net Interest Income ............... 8,123 6,043 21,429 18,070
Provision for Loan Losses ......... - - - (300)
Non-interest Income:
Service charges on deposit accts .. 804 566 2,121 1,617
Other non-interest income ......... 189 44 460 611
- ---------------------------------------------------------------------------------
Total Non-interest Income ......... 993 610 2,581 2,228
- ---------------------------------------------------------------------------------
Investment Securities Gains, net .. - 34 48 87
Non-interest Expense:
Salaries & employee benefits ...... 2,591 1,985 6,534 5,700
Net occupancy expense ............. 803 596 2,110 1,725
Other non-interest expense ........ 2,733 1,764 6,226 4,774
- ---------------------------------------------------------------------------------
Total Non-interest Expense ........ 6,127 4,345 14,870 12,199
Net Income Before Taxes ........... 2,989 2,342 9,188 8,486
Applicable Income Taxes ........... 1,016 724 2,980 2,676
- ---------------------------------------------------------------------------------
Net Income ........................ 1,973 1,618 6,208 5,810
=================================================================================
Earning per Common Share:
Net Income ........................ 0.30 0.28 1.02 0.98
Average Shares used in computation 6,528 5,866 6,085 5,920
</TABLE>
<PAGE>
Argent Bank
Notes to Financial Statements
1. Statement By Management Concerning the Review of Unaudited Financial
Information
The accompanying unaudited financial statements and notes thereto contain
all adjustments, consisting only of normal recurring adjustments, necessary to
present fairly the financial position of ArgentBank as of September 30, 1997 and
the results of operations and cash flows for the periods presented. The
financial statements should be read in conjunction with the annual financial
statements and the notes thereto included in ArgentBank's 1996 Annual Report and
Form F-2.
The results of operations for the nine month period ended September 30, 1997 are
not necessarily indicative of the results to be expected for the entire year.
2. Allowance For Loan and Lease Losses
An analysis of the activity in the allowance for loan and lease losses is
as follows:
<TABLE>
<CAPTION>
Nine Months Ended
September 30,
(in thousands)
1997 1996
- ---------------------------------------------------------
<S> <C> <C>
Balance at beginning of year 10,427 10,553
Provision for loan losses.. 0 (300)
Recoveries ................ 461 513
Loans charged off ......... (661) (224)
Acquired Reserves .... 479 0
- ---------------------------------------------------------
Balance at end of quarter ..... 10,706 10,542
=========================================================
</TABLE>
3. Accounting Standards
In February 1997, the Financial Accounting Standards Board issued Statement
of Financial Accounting Standards No. 128, "Earnings per Share" ("SFAS No.
128"). This Statement establishes new standards for computing and presenting
earnings per share ("EPS") information and requires dual presentation of "basic"
and "diluted" EPS on the face of the income statement. SFAS No. 128 replaces the
presentation of "primary" and "fully diluted" EPS required by APB Opinion No. 12
and its related interpretations and is effective for financial statements issued
for periods ending after December 15, 1997. At that time, the Bank will be
required to change the method currently used to compute EPS and to restate all
prior periods. Earlier implementation of the provisions of SFAS No. 128 is not
permitted. Adoption of SFAS No. 128 will not have a material impact on
ArgentBank's reported EPS.
<PAGE>
ArgentBank's Management Discussion and Analysis of Financial Condition
and Results of Operations
Results of Operations as of September 30, 1997
The accompanying summary of income and selected financial data offers an
overview of ArgentBank's results of operations. ArgentBank's net income for the
first nine months amounted to $6.2 million or $.95 per share, which was
relatively unchanged compared to the previous year's performance. ArgentBank's
return on average assets was 1.26 percent, as compared to 1.35 percent at
December 31, 1996. Total assets were $758.1 million at September 30, 1997,
compared to $590.0 million at December 31, 1996 an increase of $168.1 million.
Of this increase, $108 million is attributable to the purchase of Assumption
Bancshares ("Assumption") on June 30, 1997. In comparison to the third quarter
of 1996, net interest income increased by $2.1 million, or 34.2 percent. The
1997 operating results are attributable to the purchase of Assumption, increased
loan demand, increase in non-interest expense, and a reduction in the negative
provision for loan losses. The rise in net interest income experienced in 1997
is contributable to the purchase of Assumption and the redeployment of earning
assets into the lending area.
Loan Operations
Loans totaled $451.4 million at September 30, 1997, compared to $345.7 million
at December 31, 1996. This represents an increase of $105.7 million, or 30.6
percent. The purchase of Assumption contributed to a $59.5 million increase in
the loan portfolio. Commercial and real estate loans increased as the economy in
all of the markets served by the Bank showed signs of improvements. The Bank's
loan-to-deposit ratio was 71.7 percent at September 30, 1997, as compared to
66.9 percent for December 31, 1996.
Net Interest Income
Net-interest income increased by $3.4 million, or 18.6 percent, as compared to
September 30, 1996. In comparison to the third quarter of 1996, net interest
income increased by $2.1 million, or 34.2 percent. The increase is primarily
attributable to the purchase of Assumption on June 30, 1997 and the shifting of
earning assets from securities to loans due to increased consumer and commercial
loan demand.
Non-Interest Income
Non-interest income for the third quarter of 1997 increased by $383 thousand, as
compared to the same period in 1996, due mainly to increased service charge
income, the recognition of an $80 thousand gain on the sale of loans and the
netting of capital asset losses resulting from the sale of the New Orleans
branch in the third quarter of 1996. Non-interest income for the nine months
ended September 30,1997 and September 30,1996 reflected increases in service
charge income, and the effect of the third quarter items mentioned above.
Non-Interest Expense
Total non-interest expense for the third quarter of 1997 increased by $1.8
million, in comparison to the third quarter of 1996. Non-interest expense for
the nine months ended September 30, 1997 increased by $2.7 million, in
comparison to the nine months ended September 30, 1996. Salaries and employee
benefits, net occupancy expenses, and other expenses all increased due to the
merger with Assumption, the write-off of leasehold improvements at the Pierre
Part location which was closed in the third quarter of 1997, the write-down of
the Napoleonville branch to appraised value due to the closing of this branch,
the write-off of abandoned furniture and equipment, and legal fees incurred in
conjunction with various operational projects.
Shareholders' Equity
Shareholders' equity as of September 30, 1997 amounted to $86.2 million, as
compared to $67.7 million at December 31, 1996. The
shareholders'-equity-capital-to-total-assets ratio (excluding market
fluctuations) as of September 30, 1997 was 11.25 percent, compared to 11.45
percent at the prior year-end (by comparison, the regulatory minimum capital
ratio is 3 percent). The ratio of primary capital (equity capital plus allowance
for loan losses, excluding market fluctuations) to total assets as of September
30, 1997 was 12.66 percent, as compared to 13.22 percent for the prior year-end.
The decrease in the aforementioned ratios is due to the purchase of Assumption
on June 30, 1997.
Cash dividends paid by ArgentBank for the nine months ended September 30, 1997
totaled $.42 per share, as compared to $.39 per share for the same period in
1996, reflecting an increase of 7.69 percent.
Allowance for loan losses
As of September 30, 1997, the allowance for loan losses was $10.7 million, as
compared to $10.4 million at December 31, 1996. This represents a
reserve-to-loan ratio of 2.37 percent, as compared to 3.02 percent at December
31, 1996. On September 30, 1997, non-performing loans totaled $1.2 million, or
.26 percent of total loans outstanding, as compared to $224 thousand, or .065
percent of total loans outstanding at December 31, 1996.
Non-performing assets
Total non-performing assets (including non-performing loans, restructured debt
and repossessed assets) were $2.0 million at September 30, 1997, representing
.27 percent of total assets, up from the prior year end's total of $1.0 million,
or .17 percent of total assets. As of September 30, 1997, ArgentBank had $279
thousand in other real estate owned. During the first nine months of 1997, the
Bank recorded a net write-off on loans of $201 thousand, as compared to $175
thousand net recovery recorded for the year ended December 31, 1996. Due to
favorable net charge-offs and a low level of non-performing assets, a $300
thousand negative provision was recorded in 1996. No provision was recorded in
1997.
Financial Condition
Assets
Total assets at September 30, 1997 were $758.1 million, an increase of $168.1
million from the December 31, 1996 total of $590.0 million. Total loans
outstanding increased by $105.6 million to $451.4 million at September 30, 1997,
compared to $345.7 million at December 31, 1996. The redeployment of earning
assets into loans enabled the Bank to increase the net interest margin during
1997. The following table reflects the changes in the Bank's loan portfolio for
September 30, 1997, and years 1996 and 1995 (in thousands).
<TABLE>
<CAPTION>
Table 1 - Loan Portfolio Sep 1997 Dec 1996 Dec 1995
Loans Loans Loans
For Period ended September 30 and Years Ended December 31, Outstanding Outstanding Outstanding
- ----------------------------------------------------------------------------------------------------------
(in thousands)
- ----------------------------------------------------------------------------------------------------------
<S> <C> <C> <C>
Loans secured by real estate:
Construction and land development ....................... $ 8,453 $ 9,010 $ 5,864
Secured by farmland ..................................... 2,521 2,464 416
Secured by 1-4 family residential properties ............ 137,452 91,908 80,626
Secured by multifamily (5 or more) residential properties 26,855 27,697 24,607
Secured by nonfarm nonresidential properties ............ 145,096 115,803 100,479
Loans to depository institutions .......................... 75 - - - - 326
Loans to finance agricultural production and
other loans to farmers .................................. 1,995 122 32
Commercial and industrial loans ........................... 59,190 42,252 35,286
Loans to individuals for household, family, and
other personal expenditures ............................. 65,639 53,341 37,728
Obligations of state and political subdivisions ........... 3,938 3,907 3,818
Other loans ............................................... 1,001 88 111
Less: Unearned income on loans ............................ (855) (879) (814)
- ----------------------------------------------------------------------------------------------------------
Total loans and leases, net of unearned income ............ $ 451,360 $ 345,713 $ 288,479
==========================================================================================================
</TABLE>
On September 30, 1997, the Bank's total securities portfolio amounted to $212.8
million, as compared to $192.7 million at December 31, 1996. The securities
portfolio represented 28.1% of total assets and 30.0% of earning assets as of
September 30, 1997. The following table reflects the Bank's breakdown of the
investment portfolio for September 30, 1997, and years ending 1996 and 1995 (in
thousands).
<TABLE>
<CAPTION>
Table 2 - Securities Portfolio
For Period ended September 30 and Years Ended December 31, (in thousands)
- -------------------------------------------------------------------------------------------------
09/30/1997 1996 1995
- -------------------------------------------------------------------------------------------------
<S> <C> <C> <C>
U. S. Treasury securities ............................. $ 55,733 $ 53,768 $ 83,263
U. S. Government agency and corporation obligations:
Issued by FNMA and FHLMC ............................ 32,358 33,194 8,406
Guaranteed by GNMA .................................. 734 203 263
Collateralized mortgage obligations ................. 10,636 11,926 27,757
All other U. S. Government agencies ................. 79,078 58,822 56,681
Securities issued by states and political subdivisions:
General obligations ................................. 14,170 10,286 13,212
Revenue obligations ................................. 10,803 6,666 10,681
Other domestic debt securities:
Privately-issued collateralized mortgage obligations 4,402 9,377 14,900
All other ........................................... 2,336 6,090 16,237
Equity securities ..................................... 2,500 2,327 1,912
- -------------------------------------------------------------------------------------------------
Total securities portfolio ............................ $212,750 $192,659 $233,312
=================================================================================================
</TABLE>
Liabilities
Total deposits increased by $113.1 million to $629.6 million at September 30,
1997, from $516.5 million at December 31, 1996. The net increase in deposits is
due mainly to the Assumption Bank merger and increases in time deposits. Table 3
reflects the changes in the deposit mix for September 30, 1997, December 31,
1996 and December 31, 1995 (in thousands).
<TABLE>
<CAPTION>
Table 3 - Deposit Composition
09/30/1997 12/31/1996 12/31/1995
- ----------------------------------------------------------------------------
<S> <C> <C> <C>
Non-interest-bearing - demand .... $ 84,405 $ 82,693 $ 77,291
Interest-bearing - demand ........ 75,384 68,365 63,678
Money Market Accounts ............ 124,166 88,651 89,806
Regular Savings and Christmas Club 54,707 42,725 43,416
Individual Retirement Accounts ... 35,039 27,516 27,407
Time Deposit - Personal .......... 184,301 136,746 127,649
Time Deposit - Non-personal ...... 20,445 18,270 19,822
Time Deposit - Political ......... 51,150 51,522 41,099
- ----------------------------------------------------------------------------
Total Deposits ................... $629,597 $516,488 $490,168
============================================================================
</TABLE>
Shareholders' Equity
The Bank's return on average shareholders' equity was 11.49% for the first nine
months of 1997, as compared to 11.74% for the same period in 1996. Shareholders'
equity increased $18.5 million during 1997 to $86.2 million, from $67.7 million
at December 31, 1996. Table 4 illustrates the changes in shareholders' equity
for September 30, 1997, December 31, 1996 and December 31, 1995 (in thousands).
<TABLE>
<CAPTION>
Table 4 - Shareholders' Equity Changes
09/30/1997 12/31/1996 12/31/1995
- -------------------------------------------------------------------------------------------------------
<S> <C> <C> <C>
Balance at beginning of year .............................. $ 67,663 $ 66,503 $ 59,022
Net income ................................................ 6,208 7,738 8,074
Cash dividends paid ....................................... (2,556) (3,070) (2,837)
Changes incident to business combinations, net ............ 13,968 - - - - - -
Common shares purchased & retired ......................... - - - (2,212) - - -
Net unrealized gain/(loss) on available-for-sale securities 906 (1,296) 2,244
- -------------------------------------------------------------------------------------------------------
Balance at end of year .................................... $ 86,189 $ 67,663 $ 66,503
=======================================================================================================
</TABLE>
Cash dividends paid by ArgentBank for the six months ended September 30, 1997
totaled $.42 per share, as compared to $.39 per share for the same period in
1996, reflecting an increase of 7.69 percent.
Loan Loss Reserves and Provision for Loan Losses
Management evaluates the reserve for loan losses periodically to ensure that its
level is adequate to absorb loan losses in the loan portfolio. At September 30,
1997, the reserve for loan losses was $10.7 million, as compared to $10.4
million at December 31, 1996. The provision for loan losses is a charge against
current-period earnings and is added to the allowance for loan losses to
establish a reserve level considered adequate by management to absorb future
potential loan losses. No provision was recorded in the first nine months of
1997, as compared to a negative provision of $300 thousand during 1996. Total
non-performing assets were $2.0 million at September 30, 1997, representing .27
percent of total assets, up from the prior year end's total of $1.0 million, or
.17 percent of total assets. Management believes that the allowance for loan
losses at September 30, 1997 is adequate to absorb any losses in the Bank's
portfolio. Table 5 recaps the Bank's charge-offs and recoveries experience in
1997 and 1996 by quarter (in thousands).
<TABLE>
<CAPTION>
Table 5 - Charge-offs
and Recoveries 1997 1996
- -----------------------------------------------------------------------------------------------------------
YTD 3rd 2nd 1st YTD 4th 3rd 2nd 1st
- -----------------------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C> <C> <C> <C> <C> <C>
Charge-offs:
Real estate loans .. $ 42 $ 20 $ 22 $- - - $ 16 $ 16 $- - - $- - - $- - -
Agricultural loans . - - - - - - - - - - - - - - - - - - - - - - - - - - -
Commercial &
industrial loans .. 95 72 - - - 23 22 15 7 - - - - - -
Consumer loans ..... 419 201 116 102 271 114 68 73 16
All other loans .... 105 38 39 28 96 36 24 16 20
- -----------------------------------------------------------------------------------------------------------
Total Charge-offs $ 661 $ 331 $ 177 $ 153 $ 405 $ 181 $ 99 $ 89 $ 36
===========================================================================================================
Recoveries:
Real estate loans .. $ 207 $ 25 $ 20 $ 162 $ 416 $ 34 $ 26 $ 32 $ 324
Agricultural loans . - - - - - - - - - - - - - - - - - - - - - - - - - - -
Commercial &
industrial loans .. 16 9 3 4 14 2 10 1 1
Consumer loans ..... 198 72 87 39 126 22 33 44 27
All other loans .... 40 16 10 14 23 8 3 4 8
- -----------------------------------------------------------------------------------------------------------
Total Recoveries . $ 461 $ 122 $ 120 $ 219 $ 579 $ 66 $ 72 $ 81 $ 360
===========================================================================================================
Net Charge-offs / (Net
Recoveries) .......... $ 200 $ 209 $ 57 $ (66) $ (174) $ 115 $ 27 $ 8 $ (324)
===========================================================================================================
Provision for loan
losses/(negative
provisions) .......... $- - - $- - - $- - - $- - - $ (300) $- - - $- - - $- - - $ (300)
===========================================================================================================
</TABLE>
Liquidity
Liquidity represents the Bank's ability to provide funds to satisfy demands from
depositors, borrowers and other commitments by either converting assets to cash
or accessing new or existing sources of funds. The principal sources of funds
which provide liquidity are customer deposits, customer payments of principal
and interest on loans, maturities of securities, earnings and borrowings.
Management closely monitors the maturities of the Bank's assets and liabilities
through a periodic review of maturity profiles, yield/rate behaviors and
loan/deposit forecasts to minimize funding risks. The Bank's level of cash on
hand is to provide, at all times, sufficient cash and other liquid assets for
expected demand for funds. At September 30, 1997, cash and due from banks,
securities, federal funds sold and repurchase agreements were 50.4 percent of
deposits, as compared to 45.3 percent at December 31, 1996.
The Bank's loan-to-deposit ratio at September 30, 1997 increased to 71.7
percent, compared to 66.9 percent as of December 31, 1996. The Indirect Loan
Program and the increase in loan demand represent the major factors for the
increased percentage.
<PAGE>
<TABLE>
<CAPTION>
1997 1996
- ------------------------------------------------------------------------------------------------------------------------------------
Third Second First Fourth Third Second First
- ------------------------------------------------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C> <C> <C> <C>
Income Statement Data:
Interest income ................ $ 14,087 $ 11,544 $ 10,858 $ 10,644 $ 10,329 $ 10,255 $ 10,064
Interest expense ............... 5,964 4,790 4,306 4,265 4,286 4,213 4,079
- ------------------------------------------------------------------------------------------------------------------------------------
Net interest income .......... 8,123 6,754 6,552 6,379 6,043 6,042 5,985
Provision for (recovery of) loan
losses ....................... - - - - - - - - - - - - - - - - - - -300
- ------------------------------------------------------------------------------------------------------------------------------------
Net interest income after .... 8,123 6,754 6,552 6,379 6,043 6,042 6,285
provision
Non-interest income ............ 993 802 786 807 610 982 636
Securities gains (losses), net . - - - 48 - - - 64 34 53 - - -
- ------------------------------------------------------------------------------------------------------------------------------------
Total non-interest income ...... 993 850 786 871 644 1,035 636
Non-interest expense ........... 6,127 4,406 4,337 4,414 4,345 4,082 3,772
Income taxes ................... 1,016 1,045 919 908 724 953 999
- ------------------------------------------------------------------------------------------------------------------------------------
Net income ..................... $ 1,973 $ 2,153 $ 2,082 $ 1,928 $ 1,618 $ 2,042 $ 2,150
====================================================================================================================================
Per Share Information:
Net income per share ........... $ 0.30 $ 0.37 $ 0.36 $ 0.33 $ 0.27 $ 0.35 $ 0.36
Cash dividend paid ............. $ 0.14 $ 0.14 $ 0.14 $ 0.13 $ 0.13 $ 0.13 0.13
Shareholders' equity (book ..... $ 13.20 $ 12.01 $ 11.62 $ 11.54 $ 11.15 $ 10.65 11.21
value)
Market value ................... $ 33.38 $ 28.38 $ 28.50 $ 17.88 $ 18.75 $ 18.50 $ 22.00
Average shares outstanding ..... 6,528 5,864 5,864 5,864 5,866 5,918 5,975
Selected Quarter-End
Balances:
Loans, Net ..................... 440,654 427,774 352,455 335,286 307,155 302,823 277,514
Deposits ....................... 629,597 641,151 525,516 516,488 491,071 499,054 498,392
Equity ......................... 86,189 70,406 68,113 67,663 65,434 63,012 66,962
Total assets ................... 758,068 760,002 609,018 589,954 562,640 571,581 581,208
Selected Average Balances:
Loans, Net ..................... 445,100 353,014 370,477 319,849 304,411 289,458 278,168
Deposits ....................... 639,403 521,920 528,347 502,932 496,118 499,630 493,318
Equity ......................... 79,663 68,170 68,789 65,880 63,813 66,347 66,909
Total assets ................... 759,969 600,494 620,073 578,736 568,560 577,510 566,125
Earning assets ................. 712,657 571,288 586,650 545,369 537,951 547,592 539,158
Non-interest-bearing assets .... 47,312 29,206 33,423 33,367 30,609 29,917 26,967
Non-interest-bearing deposits .. 91,092 77,673 74,160 71,804 67,816 69,763 73,195
Interest-bearing deposits ...... 548,311 444,247 454,187 431,128 428,303 429,867 420,123
Selected Ratios:
Annualized return on average
assets ......................... 1.26% 1.40% 1.41% 1.33% 1.14% 1.41% 1.52%
Annualized return on average
equity ................ 11.49% 12.47% 12.39% 11.70% 10.15% 12.31% 12.85%
Average equity/average assets .. 10.49% 11.36% 11.10% 11.38% 11.22% 11.49% 11.82%
Leverage ratio ................. 11.15% 11.37% 12.01% 11.47% 11.63% 11.02% 11.52%
Efficiency ratio ............... 60.71% 58.04% 58.38% 61.45% 64.27% 58.07% 56.97%
Tier 1 capital ratio ........... 12.29% 14.17% 14.98% 15.08% 15.81% 15.36% 14.10%
Total capital ratio ............ 13.55% 15.43% 16.25% 16.35% 17.06% 16.61% 15.35%
====================================================================================================================================
</TABLE>
APPENDIX A
AGREEMENT AND PLAN OF MERGER
BY AND BETWEEN
HIBERNIA CORPORATION
AND
HIBERNIA NATIONAL BANK
AND
ARGENTBANK
AGREEMENT AND PLAN OF MERGER
TABLE OF CONTENTS
ARTICLE 1 A-6
DEFINITIONS A-6
1.1 "Acquiror" A-6
1.2 "Acquiror Bank" A-6
1.3 "Agreement" A-6
1.4 "ArgentBank" A-7
1.5 "Bank Merger Act" A-7
1.6 "Business Day" A-7
1.7 "Closing" A-7
1.8 "Effective Date" A-7
1.9 "FDIC" A-7
1.10 "FRB" A-7
1.11 "Internal Revenue Code" A-7
1.12 "IRS" A-7
1.13 "OFI" A-7
1.14 "OCC" A-8
1.15 "Party" A-8
1.16 "Person" A-8
1.17 "SEC" A-8
ARTICLE 2 A-8
THE MERGER AND RELATED MATTERS A-8
2.1 Bank Merger A-8
2.2 Effect of Bank Merger A-8
2.3 Execution of Stock Option Agreement A-9
ARTICLE 3 A-9
CONVERSION OF STOCK A-9
3.1 Conversion A-9
3.2 Exchange of Certificates Representing ArgentBank
Common Stock A-10
3.3 Adjustment of Exchange Ratio A-13
ARTICLE 4 A-13
ACCOUNTING AND TAX MATTERS A-13
4.1 Affiliates A-13
4.2 Accounting Treatment A-13
4.3 Accounting and Tax Representations A-13
ARTICLE 5 A-14
ARGENTBANK'S COVENANTS AND AGREEMENTS A-14
5.1 Operation of Business A-14
5.2 Preservation of Business A-16
5.3 Insurance A-16
5.4 Stockholders' Meeting A-16
5.5 Property Transfers A-16
5.6 ArgentBank Financial and Other Reports A-16
5.7 Due Diligence A-17
5.8 No Solicitation A-18
5.9 Actions Necessary to Complete Bank Merger A-18
5.10 Preparation of Registration Statement and
Proxy Statement A-18
ARTICLE 6 A-19
ARGENTBANK'S REPRESENTATIONS AND WARRANTIES A-19
6.1 Organization and Authority A-19
6.2 Authorization A-19
6.3 Capital Structure of ArgentBank A-20
6.4 Financial Reports A-20
6.5 No Material Adverse Change A-20
6.6 Tax Liability A-20
6.7 Tax Returns: Payment of Taxes A-20
6.8 Litigation and Proceedings A-21
6.9 Brokers' or Finders' Fees A-21
6.10 Contingent Liabilities A-21
6.11 Title to Assets; Adequate Insurance Coverage A-21
6.12 Liabilities A-22
6.13 Loans A-23
6.14 Allowance for Loan Losses A-23
6.15 Investments A-23
6.16 Commitments and Contracts A-23
6.17 Employee Plans A-24
6.18 Plan Liability A-24
6.19 Continuity of Interest A-24
6.20 Environmental Matters A-25
6.21 Accuracy of Information A-25
6.22 Compliance with Laws and Contracts A-25
ARTICLE 7 A-25
ACQUIROR'S REPRESENTATIONS, WARRANTIES, COVENANTS AND
AGREEMENTS A-25
7.1 Organization and Authority A-25
7.2 Shares Fully Paid and Non Assessable A-26
7.3 Authorization A-26
7.4 Acquior Financial and Other Reports A-26
7.5 No Material Adverse Change A-27
7.6 Loans A-27
7.7 Litigation A-27
7.8 Contingent Liabilities A-27
7.9 Allowances for Possible Loan Losses A-28
7.10 Benefit Plans A-28
7.11 Accuracy of Information A-28
7.12 Conduct of Business A-28
7.13 Due Diligence A-29
7.14 Registration of Stock A-30
7.15 Continuity of Business Enterprise A-30
7.16 Continuing Indemnity; Insurance A-30
7.17 Permits, Consents and Approvals A-31
7.18 Hold Harmless A-31
7.19 Employment Agreements and Transaction Bonuses A-32
7.20 Election of Directors A-32
7.21 Actions Necessary to Complete Bank Merger A-33
7.22 Preparation of Registration Statement and
Proxy Statement A-33
ARTICLE 8 A-33
CONDITIONS TO CLOSING A-33
8.1 Conditions to Each Party's Obligations to Effect the
Bank Merger A-33
8.2 Conditions to Obligations of ArgentBank to Effect the
Bank Merger A-34
8.3 Conditions to Obligations of Acquiror to Effect the
Bank Merger A-36
ARTICLE 9 A-38
CLOSING A-38
9.1 Closing A-38
9.2 Deliveries at Closing A-39
9.3 Documents A-39
ARTICLE 10 A-39
EMPLOYMENT MATTERS A-39
10.1 Employees and Certain Other Matters A-39
10.2 Retirement Plan A-40
10.3 Other Benefit Plans A-40
10.4 Notices A-40
ARTICLE 11 A-40
TERMINATION A-40
11.1 Termination A-40
11.2 Termination Fee A-42
11.3 Effect of Termination A-42
ARTICLE 12 A-42
APPRAISAL RIGHTS A-42
12.1 Appraisal Rights of ArgentBank A-42
ARTICLE 13 A-42
MISCELLANEOUS A-42
13.1 Entire Agreement A-42
13.2 Non-Survival of Representations and Warranties A-42
13.3 Headings A-42
13.4 Duplicate Originals A-42
13.5 Governing Law A-43
13.6 Successors: No Third Party Beneficiaries A-43
13.7 Modification; Assignment A-43
13.8 Notice A-43
13.9 Waiver A-44
13.10 Costs, Fees and Expenses A-44
13.11 Press Releases A-44
13.12 Severability A-44
EXHIBITS
Exhibit A Bank Merger Agreement
Exhibit B Letter of Transmittal
Exhibit C Form of Affiliate Agreement
Exhibit D Tax Certificate
Exhibit E Joinder Agreement
Exhibit F Stock Option Agreement
AGREEMENT AND PLAN OF MERGER
THIS AGREEMENT AND PLAN OF MERGER (the "Agreement"), dated as of the 15th
day of July, 1997, is made between ArgentBank, Thibodaux, Louisiana, a Louisiana
state banking association ("ArgentBank"), and Hibernia Corporation, a Louisiana
corporation ("Acquiror") and Hibernia National Bank ("Acquiror Bank").
The Boards of Directors of ArgentBank, Acquiror and Acquiror Bank have duly
approved this Agreement and have authorized the execution hereof by ArgentBank's
President and Acquiror's President and Chief Executive Officer, respectively.
ArgentBank has directed that this Agreement be submitted to a vote of its
shareholders in accordance with 12 U.S.C. Section 215a and the terms of this
Agreement.
In consideration of their mutual promises and obligations, the parties hereto
adopt and make this Agreement for the merger of ArgentBank with and into
Acquiror Bank and prescribe the terms and conditions of such mergers and the
mode of carrying them into effect, which shall be as follows:
ARTICLE 1
DEFINITIONS
Certain Defined Terms. As used in this Agreement, the following terms shall have
the following meanings (such meaning to be equally applicable to both the
singular and plural forms of the terms defined):
1.1 "Acquiror" means Hibernia Corporation, a corporation duly chartered,
organized and existing under and pursuant to the laws of the State of Louisiana;
maintaining its principal place of business at 313 Carondelet Street, in New
Orleans, Orleans Parish, Louisiana; and is a bank holding company within the
meaning of the Bank Holding Company Act of 1956, as amended.
1.2 "Acquiror Bank" means Hibernia National Bank, a national banking
association, duly chartered, organized and existing under and pursuant to the
laws of the United States of America and maintaining its principal place of
business at 313 Carondelet Street, in New Orleans, Orleans Parish, Louisiana.
All of the issued and outstanding shares of capital stock of Acquiror Bank are
owned by Acquiror. Acquiror Bank is (i) an "insured bank" as defined in the
Federal Deposit Insurance Act and applicable regulations thereunder, and (ii)
has been duly organized and is validly existing as a national bank under the
laws of the United States of America, and has full authority to conduct its
business as and where currently conducted.
1.3 "Agreement" shall mean this Agreement and Plan of Merger by and between
ArgentBank, Acquiror and Acquiror Bank and any amendments thereto. References to
Articles, Sections, Schedules and the like refer to the Articles, Sections,
Schedules and the like of this Agreement unless otherwise indicated.
1.4 "ArgentBank" means ArgentBank, a state banking association, duly chartered
on February 26, 1929, organized and existing under and pursuant to the laws of
the State of Louisiana and maintaining its principal place of business at 203
West 2nd Street, Thibodaux, Lafourche Parish, Louisiana.
1.5 "Bank Merger Act" shall mean 12 U.S.C. Section 1828(c).
1.6 "Business Day" shall mean a day on which Acquiror Bank is open for business
and which is not a Saturday, Sunday or legal bank holiday.
1.7 "Closing" The closing (the "Closing") of the transactions contemplated
herein will take place at Acquiror Bank's office at 313 Carondelet Street, in
New Orleans, Louisiana, on a date that is mutually agreed to by both parties
("Closing Date") that is within fifteen (15) days following the later of the
date of receipt of all applicable regulatory approvals relating to the
transactions contemplated herein, the expiration of all applicable statutory and
regulatory waiting periods relative thereto, or the date the Registration
Statement (the "Registration Statement") filed with the SEC is declared
effective, or such later date as may be agreed to by the parties. At the Closing
the parties shall each deliver to the other such evidence of the satisfaction of
the conditions to the Bank Merger as may reasonably be required (including
material required to be delivered under this Agreement).
1.8 "Effective Date" The Bank Merger shall become effective as of the date and
time of issuance by the OCC as defined in Section 1.14 in a certificate of
merger relating to the Bank Merger.
1.9 "FDIC" means that agency of the United States of America known as the
Federal Deposit Insurance Corporation, or any successor United States
governmental agency which insures deposits of commercial banks.
1.10 "FRB" means that agency of the United States of America which acts in the
capacity of a governmental central bank known as the Federal Reserve System
represented by actions of its Board of Governors, having regulatory authority
over bank holding companies, or any successor United States governmental agency
performing the function of exercising such regulatory authority.
1.11 "Internal Revenue Code" means the Internal Revenue Code of 1986, as
amended.
1.12 "IRS" means that agency of the United States of America known as the
Internal Revenue Service.
1.13 "OFI" means the Office of Financial Institutions of the State of Louisiana
having regulatory authority over ArgentBank or any successor Louisiana
governmental agency exercising such regulatory authority.
1.14 "OCC" means that agency of the United States of America known as the Office
of the Comptroller of the Currency.
1.15 "Party" shall mean Acquiror, Acquiror Bank, or ArgentBank and "Parties"
shall mean Acquiror, Acquiror Bank and ArgentBank.
1.16 "Person" shall mean any individual, corporation, partnership, joint
venture, association, joint-stock company, trust, unincorporated organization or
government or any agency or political subdivision thereof.
1.17 "SEC" means that agency of the United States of America known as the
Securities and Exchange Commission.
1.18 "Stock Option Agreement" shall mean the Stock Option Agreement, in the form
attached hereto as Exhibit F, to be dated July 15, 1997 among ArgentBank and
Acquiror.
ARTICLE 2
THE MERGER AND RELATED MATTERS
2.1 Bank Merger. On the Effective Date, ArgentBank shall be merged with and into
Acquiror Bank under the Articles of Association of Acquiror Bank, pursuant to
the provisions of this Agreement, the provisions of and with the effect provided
in 12 U.S.C. Section 215a (the "Bank Merger") and the Bank Merger Agreement in
substantially the form of Exhibit A hereto (the "Bank Merger Agreement"). In
addition, for federal income tax purposes, it is intended that the Bank Merger
shall qualify as a non-taxable reorganization under and in accordance with
Section 368(a)1(A) and Section 368 (a)(2)(D) of the Internal Revenue Code and
the applicable IRS regulations. The Parties expect that the Bank Merger will
further certain of their business objectives, including, and without limitation,
the expansion of operations as a financial institution.
2.2 Effect of Bank Merger. Upon consummation of the Bank Merger, the separate
corporate existence of ArgentBank shall cease and Acquiror Bank shall continue
as the surviving corporation. The name of Acquiror Bank, as the surviving
corporation, shall by virtue of the Bank Merger remain unchanged. On the
Effective Date, as hereinabove provided, all of the assets and property of every
kind and character, real, personal and mixed, tangible and intangible, choses in
action, rights, and credits then owned by ArgentBank, or which would inure to
it, shall immediately by operation of law and without any conveyance or transfer
or without any further action or deed, be vested in and become the property of
Acquiror Bank, which shall have, hold, and enjoy the same in its own right as
fully and to the same extent as the same were possessed, held, and enjoyed by
ArgentBank prior to such merger; and Acquiror Bank shall be deemed to be and
shall be a continuation of the original entities and all of the rights and
obligations of ArgentBank shall remain unimpaired, and Acquiror Bank, on the
Effective Date of the Bank Merger shall succeed to all such rights, obligations,
duties and liabilities connected therewith.
2.3 Execution of Stock Option Agreement. Simultaneously with the execution of
this Agreement and as a condition thereto, ArgentBank has approved the execution
and delivery of the Stock Option Agreement and, on July 15, 1997, ArgentBank
will execute and deliver the Stock Option Agreement.
ARTICLE 3
CONVERSION OF STOCK
3.1 Conversion. The Parties agree that, by virtue of the Bank Merger, shares of
ArgentBank common stock shall be converted into shares of Acquiror Class A
common stock, no par value (the "Acquiror Common Stock"), as follows:
a. On the Closing Date, each share of common stock, $.10 par value, of
ArgentBank ("ArgentBank Common Stock") issued and outstanding immediately prior
to the Closing Date, shall, and without any action on the part of the holder
thereof, be converted into the right to receive 2.04 shares of Acquiror Common
Stock (the "Exchange Ratio") based upon 6,528,057 shares of ArgentBank Common
Stock issued and outstanding; provided, however, in the event said number of
shares is less than 6,528,057, the Exchange Ratio will be adjusted
proportionately. In the event the number of shares outstanding is greater than
6,528,057, the Parties will determine whether an adjustment will be made.
b. (i) In the event that the Department of Justice requires or requests that
Acquiror or Acquiror Bank divest a portion of the assets and/or liabilities of
ArgentBank as a condition to its agreement not to object to the Merger, and the
Parties hereto agree to such divestiture and consummate the Merger, the Exchange
Ratio shall be adjusted downward to reflect the divestiture as set forth below
in this Section 3.1(b).
(ii) In the event the aggregate amount of deposits to be divested is $10 million
or less and the aggregate amount of loans to be divested is $5 million or less,
there shall be no adjustment in the Exchange Ratio.
(iii) In the event the aggregate amount of deposits to be divested is greater
than $10 million or the aggregate amount of loans to be divested is greater than
$5 million, then the Exchange Ratio shall be calculated in accordance with the
following steps:
Step 1. If the aggregate amount of deposits to be divested is greater than
$10 million, then such amount shall be divided by $2,500,000. (If not, then skip
to Step 3.)
Step 2. The resulting number shall be multiplied by $172,000.
Step 3. If the aggregate amount of loans to be divested is greater than $5
million, then such amount shall be divided by $2,500,000. (If not, then skip to
Step 5.)
Step 4. The number resulting from Step 3 shall be multiplied by $240,000.
Step 5. The numbers resulting from Step 2, if applicable, and Step 4, if
applicable, shall be added together.
Step 6. The number resulting from Step 5 shall be subtracted from
$189,771,000.
Step 7. The number resulting from Step 6 shall be divided by $14.25.
Step 8. The number resulting from Step 7 shall be divided by the number of
shares of ArgentBank Common Stock outstanding to achieve the number of shares of
Acquiror Common Stock that will be exchanged for each outstanding share of
ArgentBank Common Stock.
c. Notwithstanding any other provision hereof, each holder of shares of
ArgentBank's Common Stock who would otherwise have been entitled to receive a
fraction of a share of Acquiror's Common Stock (after taking into account all
certificates delivered by such holder) shall receive, in lieu thereof, cash in
an amount equal to such fractional part of a share of Acquiror's common stock
multiplied by the Average Market Price of such common stock. Average Market
Price shall be deemed to mean the average of the closing price of one share of
such common stock, as reported in the Wall Street Journal for the five (5)
trading days immediately preceding the Closing Date ("Average Market Price").
d. The shares of ArgentBank Common Stock subject to the Stock Option Agreement
shall be canceled (and not converted) by virtue of the Merger at the Effective
Date and without any further action by any Party.
3.2 Exchange of Certificates Representing ArgentBank Common Stock.
a. Consistent with past and prudent business practices, Acquiror shall deposit,
or shall cause to be deposited, with a mutually agreed upon exchange agent (the
"Exchange Agent"), for the benefit of the holders of shares of ArgentBank Common
Stock, for exchange in accordance with this Article 3, cash to be paid pursuant
to Section 3.1 and this Section 3.2 in exchange for outstanding shares of
ArgentBank Common Stock; provided, however, such cash shall be deposited with
the Exchange Agent prior to the exchange of any certificates.
b. Promptly after the Closing Date, Acquiror shall cause the Exchange Agent to
mail to each holder of record of a certificate or certificates of shares of
ArgentBank Common Stock ("Certificate" or "Certificates") (other than those
representing shares with respect to which the holder thereof has perfected
appraisal rights under 12 U.S.C. Section 215a and has not subsequently lost,
withdrawn or forfeited such rights) (i) a letter of transmittal in the form of
that set forth in Exhibit B which shall specify that delivery shall be effected,
and risk of loss and title to the Certificates shall pass, only upon delivery of
the Certificates to the Exchange Agent and (ii) instructions for use in
effecting the surrender of the Certificates in exchange for certificates
representing shares of Acquiror Common Stock and cash in lieu of fractional
shares. Upon surrender of a Certificate for cancellation to the Exchange Agent
together with such letter of transmittal, duly executed and completed in
accordance with the instructions thereto, the holder of such Certificate shall
be entitled to receive in exchange therefor (x) a certificate representing that
number of whole shares of Acquiror Common Stock and (y) a check representing the
amount of cash in lieu of fractional shares, if any, which such holder has the
right to receive in respect of the Certificate surrendered pursuant to Section
3.1(b), after giving effect to any required withholding tax, and the Certificate
so surrendered shall forthwith be canceled. No interest will be paid or accrued
on the value of any Acquiror Common Stock or cash payable to holders of
Certificates. In the event of a transfer of ownership of ArgentBank Common Stock
which is not registered in the transfer records of ArgentBank, a certificate
representing the proper number of shares of Acquiror Common Stock, together with
a check for the cash to be paid in lieu of fractional shares, may be issued to
such a transferee if the Certificate representing such ArgentBank Common Stock
is presented to the Exchange Agent, accompanied by all documents required to
evidence and effect such transfer and to evidence that any applicable stock
transfer taxes have been paid.
c. Holders of Certificates shall cease to be, and shall have no rights as,
shareholders of ArgentBank. Notwithstanding any other provisions of this
Agreement, no dividends on Acquiror Common Stock shall be paid with respect to
any shares of ArgentBank Common Stock represented by a Certificate until such
Certificate is surrendered for exchange as provided herein. Subject to the
effect of applicable laws, following surrender of any such Certificate, there
shall be paid to the holder of the certificates representing whole shares of
Acquiror Common Stock issued in exchange therefor, without interest, (i) at the
time of such surrender, the amount of dividends or other distributions with a
record date after the Closing Date theretofore payable with respect to such
whole shares of Acquiror Common Stock and not paid, less the amount of any
withholding taxes which may be required thereon, and (ii) at the appropriate
payment date, the amount of dividends or other distributions with a record date
after the Closing Date but prior to surrender and a payment date subsequent to
surrender payable with respect to such whole shares of Acquiror Common Stock,
less the amount of any withholding taxes which may be required thereon.
d. On or after the Closing Date, the stock transfer books of ArgentBank shall be
closed and there shall be no transfers on the stock transfer books of ArgentBank
of the shares of ArgentBank Common Stock which were outstanding immediately
prior to the Closing Date. If, after the Effective Date, Certificates are
presented to Acquiror, they shall be canceled and exchanged for certificates for
shares of Acquiror Common Stock and cash in lieu of fractional shares, if any,
deliverable in respect thereof pursuant to this Agreement in accordance with the
procedures set forth in this Article 3. Certificates surrendered for exchange by
any person constituting an "affiliate" of ArgentBank as such term ifs defined in
Article 4 of this Agreement shall not be exchanged until Acquiror has received a
written agreement from such person as provided in Section 4.1.
e. No fractional shares of Acquiror Common Stock shall be issued pursuant
hereto. In lieu of the issuance of any fractional share of Acquiror Common Stock
pursuant to Section 3.1(b), cash adjustments will be paid to holders in respect
of any fractional share of Acquiror Common Stock that would otherwise be
issuable, and the amount of such cash adjustment shall be equal to such
fractional proportion of the Average Market Price.
f. Any portion of the Certificates representing the shares of Acquiror Common
Stock and cash to be issued pursuant to Section 3.1 and paid pursuant to this
Section 3.2 (hereinafter referred to as the "Exchange Fund") (including the
proceeds of any investments thereof and any shares of Acquiror Common Stock)
that remains unclaimed by the former stockholders of ArgentBank one year after
the Closing Date shall be delivered to Acquiror or maintained at the Exchange
Agent at the discretion of Acquiror. Any former stockholders of ArgentBank who
have not theretofore complied with this Article 3 shall thereafter look only to
Acquiror or Exchange Agent, as the case may be, for payment in respect of their
shares, in any event without any interest thereon. In the event that any such
holder fails to surrender either such Certificate or the documents and
information contemplated by the letter of transmittal and instructions on or
before the fifth (5th) anniversary of the Closing Date, Acquiror shall not have
any obligation to deliver the amount to which any such holder would have been
entitled in accordance with the provisions of this Agreement and any such holder
shall not be entitled to receive from Acquiror any amount in substitution and
exchange for each share canceled and extinguished in accordance with this
Agreement.
g. Any other provision of this Agreement notwithstanding, neither Acquiror or
Exchange Agent nor any party to the Bank Merger shall be liable to a holder of
ArgentBank Common Stock for any amount paid or property delivered in good faith
to a public official pursuant to any applicable abandoned property, escheat or
similar law.
h. Shares of ArgentBank Common Stock held by any holder having rights of a
dissenting shareholder as provided in 12 U.S.C. Section 215a, who shall have
voted against the Bank Merger, or has given notice in writing prior to such
meeting to ArgentBank that he dissents from the Bank Merger and who shall have
properly demanded payment on his stock in accordance with and subject to the
provisions of 12 U.S.C. Section 215a, shall not be converted as provided under
this Article 3 until such time as such holder shall have failed to perfect, or
shall have effectively lost his right to appraisal of and payment for his shares
of ArgentBank Common Stock, at which time such shares shall be converted as
provided in Section 3.2 hereof.
i. Former shareholders of ArgentBank will be able to vote after the Closing Date
at any meeting of Acquiror shareholders or pursuant to any written consent
procedure the number of whole shares of Acquiror Common Stock into which their
shares of ArgentBank Common Stock are converted, regardless of whether they have
exchanged their Certificates.
3.3 Adjustment of Exchange Ratio. In the event that, subsequent to the date of
this Agreement but prior to the Closing Date, Acquiror, Acquiror Bank or
ArgentBank changes the number of shares of its Common Stock, respectively,
issued and outstanding as a result of a stock split, reverse stock split, stock
dividend, recapitalization or other similar transaction, the Exchange Ratio
shall be appropriately adjusted.
ARTICLE 4
ACCOUNTING AND TAX MATTERS
4.1 Affiliates. ArgentBank and Acquiror shall cooperate and use their best
efforts to identify those persons who would be deemed to be "affiliates" of
ArgentBank within the meaning of Rule 145(c) or Rule 144 (as applicable) under
the Securities Act of 1933 (the "Securities Act") but for the status of
ArgentBank's Common Stock as an exempt security under the Securities Act.
ArgentBank shall use its best efforts to cause each person so identified to
deliver to Acquiror, no later than 30 days prior to the Closing Date, a written
agreement in substantially the form set forth in Exhibit C attached hereto
provided, however, that ArgentBank shall have no obligation prior to the receipt
by the Board of Directors of ArgentBank of the Fairness Opinion from Chase
Securities, Inc. described in Section 8.2(d). Acquiror shall be entitled to
place appropriate legends on the certificates evidencing shares of Acquiror's
Common Stock to be received pursuant to this Agreement by such affiliates and to
issue appropriate stop transfer instructions to the transfer agent for
Acquiror's common stock.
4.2 Accounting Treatment. The Parties hereto agree to use their best efforts to
cause the acquisition contemplated herein to qualify for pooling-of-interests
accounting treatment to the extent factors affecting such treatment are within
their control.
4.3 Accounting and Tax Representations. The Parties hereto represent and warrant
that the Statement of Representations attached hereto at Exhibit D and made a
part hereof, are true and correct to the best of their knowledge and will be
true and correct on the Effective Date.
ARTICLE 5
ARGENTBANK'S COVENANTS AND AGREEMENTS
5.1 Operation of Business. Between the date hereof and the Effective Date, or
until the termination of this Agreement, ArgentBank covenants and agrees that it
will operate its business solely in the ordinary course consistent with prudent
business practices and in material compliance with all applicable laws,
regulations and rules; and without the prior written consent of Acquiror,
ArgentBank will not:
a. Amend or otherwise change its articles of incorporation or bylaws, as each
such document is in effect on the date hereof (except to the extent required in
order to effect the Bank Merger as contemplated herein);
b. Except for the issuance of up to 664,389 shares of ArgentBank Common Stock
pursuant to the Assumption Bank acquisition and the repurchase of ArgentBank
Common Stock in accordance with the Stock Option Agreement, issue or sell, or
authorize for issuance or sale, the shares of ArgentBank or any additional
shares of any class of capital stock of ArgentBank;
c. Except as contemplated by the Stock Option Agreement, issue, grant, or enter
into any subscription, option, warrant, right, convertible security, or other
agreement or commitment of any character obligating ArgentBank to issue
securities;
d. Declare, set aside, make, or pay any dividend or other distribution with
respect to its capital stock, provided, however, that, if the Bank Merger does
not occur prior to the record date for Acquiror's quarterly dividend,
respectively, ArgentBank shall to the extent lawfully permitted declare and pay
dividends (at the customary time each quarter) for the purpose of allowing
ArgentBank's stockholders to receive the normal and customary third quarter,
1997 dividend in the amount of $.14 per outstanding share of ArgentBank Common
Stock and the fourth quarter, 1997 dividend in the amount of $.15 per
outstanding share of ArgentBank Common Stock, and continue to declare and pay
normal and customary quarterly dividends in the amount of $.15 per outstanding
share of ArgentBank Common Stock.
e. Redeem, purchase, or otherwise acquire, directly or indirectly, any of its
capital stock;
f. Except in the ordinary course of business consistent with past practices,
authorize any capital expenditure(s) which, individually or in the aggregate,
exceed $100,000;
g. Extend any new, or renew any existing, loan, credit, lease, or other type of
financing unless such is consistent with the ArgentBank's normal lending
practices;
h. Except for the sale of the ArgentBank branch at 205 Washington Street, in
Napoleonville and the closure of the leased facilities located at 3241 Hwy. 70
South in Pierre Part and 1420 West Airline Hwy. in La Place and except in the
ordinary course of business, sell, pledge, dispose of, or encumber, or agree to
sell, pledge, dispose of, or encumber, any assets of ArgentBank;
i. Establish or add any automated teller machines or branch or other banking
offices; take any action that would materially and adversely affect the ability
of any Party hereto to obtain the approvals necessary for consummation of the
transactions contemplated hereby or that would materially and adversely affect
ArgentBank's ability to perform its covenants and agreements hereunder;
j. Acquire (by merger, consolidation, lease or other acquisition of stock,
ownership interests or assets) any corporation, partnership, or other business
organization or division thereof, or enter into any contract, agreement,
commitment, or arrangement with respect to any of the foregoing, acquire control
over any other firm, bank, corporation or organization or create any subsidiary
(except in a fiduciary capacity or in connection with foreclosures in bona fide
loan transactions); liquidate, or sell or dispose of any assets or acquire any
assets, otherwise than in the ordinary course of its business consistent with
its past practice; (i) excluding normal and customary banking transactions,
incur any indebtedness for borrowed money, issue any debt securities, or enter
into or modify any contract, agreement, commitment, or arrangement with respect
thereto; (ii) enter into, amend, or terminate any employment agreement,
relationship or responsibilities with any director, officer, or key employee or
representative of ArgentBank, or enter into, amend, or terminate any employment
agreement with any other person otherwise than in the ordinary course of
business, or take any action with respect to the grant or payment of any
severance or termination pay except as expressly consented to in writing by
Acquiror;
k. Enter into, extend, or renew any lease for office or other space;
l. Except as required by law or as contemplated in connection with the
Assumption Bank acquisition, enter into, adopt or amend any bonus, profit
sharing, compensation, stock option, pension, retirement, deferred compensation,
employment, or other employee benefit plan, agreement, trust, fund, or
arrangement for the benefit or welfare of any officer, employee or
representative of ArgentBank, except for the payment by ArgentBank of fiscal
1997 year-end bonuses to its employees consistent with past practices, the
payment of transaction bonuses as provided in Section 7.19(b) hereof.
m. Grant any increase in compensation to any director, officer, or employee or
representative of ArgentBank, except in the ordinary course of business
consistent with past practice; or
n. Take any action or omit to take any action which would cause any of
ArgentBank's representations or warranties to be untrue or misleading in any
material respect or any covenant of ArgentBank under this Agreement incapable of
being performed;
o. Agree in writing or otherwise to do any of the foregoing.
5.2 Preservation of Business. Between the date hereof and the Effective Date,
ArgentBank will use its best efforts to preserve its existing business and to
keep its business organization intact, including its present relationships with
its employees and customers and others having business relations with it.
5.3 Insurance. Pending the Closing, ArgentBank shall maintain in effect its
current material insurance policies and bonds.
5.4 Stockholders' Meeting. ArgentBank will promptly give proper notice of a
stockholders' meeting for the purpose of approving this Agreement. Said notice
shall include notice of dissenter's rights, if any, and shall solicit
stockholders' proxies in favor of this Agreement, and all notices shall be given
in accordance with all applicable laws, regulations, and rules. ArgentBank and
its directors will support and vote in favor of a stockholder resolution
approving this Agreement.
5.5 Property Transfers. From time to time, as and when requested by Acquiror and
to the extent permitted by Louisiana law, the officers and directors of
ArgentBank last in office shall execute and deliver such deeds and other
instruments and shall take or cause to be taken such further or other actions as
shall be necessary in order to vest or perfect in or to confirm of record or
otherwise to Acquiror title to, and possession of, all the property, interests,
assets, rights, privileges, immunities, powers, franchises, and authorities of
ArgentBank, and otherwise to carry out the purposes of this Agreement.
5.6 ArgentBank Financial and Other Reports. ArgentBank shall make available to
Acquiror and Acquiror Bank the following statements and other reports and
documents:
a. ArgentBank's Balance Sheets as of June 30, 1997 and 1996 (unaudited) and
December 31, 1996, 1995 and 1994 (audited), the related notes thereto, and the
report of its independent public accountants with respect thereto; Statements of
Income and Changes in Stockholders' Equity and Statements of Cash Flows for the
years ended December 31, 1996, 1995 and 1994 (audited), the related notes
thereto, and the report of its independent public accountants with respect
thereto, and Statements of Income for the six-month periods ended June 30, 1997
and 1996 (unaudited) (" ArgentBank Financial Statements");
b. All correspondence with the OFI, the FDIC and the IRS from January 1, 1997
through the date of Closing (for inspection, but copying may be restricted by
legal limitations); and
c. Such additional financial or other information as may be required for the
regulatory applications and Registration Statement in connection with the
consummation of the Bank Merger (subject to any legal limitations).
5.7 Due Diligence.
a. In order to afford Acquiror access to such information as it may reasonably
deem necessary to perform any due diligence review with respect to ArgentBank,
ArgentBank shall, upon reasonable notice, afford Acquiror and its officers,
employees, counsel, accountants, and other authorized representatives access,
during normal business hours throughout the period prior to the Effective Date,
and to all of its properties; books, contracts, commitments, loan files,
litigation files and records (including, but not limited to, the minutes of the
Board of Directors of ArgentBank and all committees thereof), and it shall, upon
reasonable notice and to the extent consistent with applicable law, furnish
promptly to Acquiror such information as Acquiror may reasonably request to
perform such review. ArgentBank shall not be required to provide access to or to
disclose information where such access or disclosure would violate or prejudice
the rights of any customer or other person, would jeopardize the attorney-client
privilege of the institution in possession or control of such information, or
would contravene any law, rule, regulation, order, judgment, decree or binding
agreement. The parties will make appropriate substitute disclosure arrangements
under circumstances in which the restrictions of the preceding sentence apply.
b. All information furnished by ArgentBank shall be treated as the sole property
of ArgentBank furnishing the information until consummation of the Bank Merger
contemplated hereby. If this Agreement is terminated prior to the Closing Date,
Acquiror shall return, without retaining copies thereof, all confidential or
non-public documents, work papers and other materials obtained from ArgentBank
or its employees, agents or representatives, in connection with the transactions
contemplated hereby and shall destroy any work papers, analyses or other
materials prepared based on such information, and for a period of two years
following such termination Acquiror shall use its best efforts to keep such
information confidential, not disclose such information to any other person or
entity except as may be required by law, and not use such information (including
any work papers, analyses and other materials prepared by it in reliance upon
such information) in its business for any competitive or other commercial
purpose and shall use its best efforts to cause its employees, agents and
representatives to do the same, provided, however, the obligation to keep such
information confidential shall not apply to any information which (a) Acquiror
can establish by convincing evidence was already in its possession prior to the
disclosure thereof by ArgentBank, (b) was then generally in the public domain
through no fault of Acquiror or (c) was disclosed to the party receiving the
information by a third party not bound by an obligation of confidentiality.
5.8 No Solicitation. Prior to the Closing Date, ArgentBank shall not authorize
or knowingly permit any of its officers, directors, employees, representatives,
agents or other persons controlled by ArgentBank to directly or indirectly,
encourage or solicit or, hold any discussions or negotiations with, or provide
any information to, any persons, entity or group concerning any merger,
consolidation, sale of substantial assets, sale of shares of capital stock or
similar transactions involving, directly or indirectly, ArgentBank except as
contemplated by this Agreement; provided, however, that nothing contained in
this Agreement shall be deemed to prohibit any officer or director of ArgentBank
from taking any action that counsel to ArgentBank has advised in writing is
required to discharge his or her fiduciary duties to ArgentBank or its
shareholders, a copy of which advice shall be furnished to Acquiror. ArgentBank
shall instruct each officer, director, employee, agent, representative or
affiliate of it to refrain from doing any of the above, and ArgentBank shall
promptly notify Acquiror of the identity of any such inquiror.
5.9 Actions Necessary to Complete Bank Merger. ArgentBank shall use its best
efforts in good faith to take or cause to be taken all action necessary or
desirable under this Agreement on its part as promptly as practicable so as to
permit the consummation of this Agreement at the earliest possible date
(including obtaining the consent or approval of each governmental authority and
individual, partnership, corporation, association, or any other form of business
or professional entity whose consent or approval is required for the
consummation of the transactions contemplated hereby, requesting the delivery of
appropriate opinions and letters from its counsel and recommending that this
Agreement be approved by its shareholders) and cooperate fully with the other
party hereto to that end; provided, however, that ArgentBank shall not be
obligated to take or cause to be taken any action which is or creates a material
burden, except to the extent such actions are reasonably anticipated to be
required in order to effect the Bank Merger.
5.10 Preparation of Registration Statement and Proxy Statement. ArgentBank shall
prepare as promptly as practicable jointly with Acquiror a proxy statement to be
mailed to the shareholders of each party the shareholders of which are to vote
upon this Agreement in connection with the transactions contemplated hereby (the
"Proxy Statement") to be filed by ArgentBank with the FDIC and to be part of a
registration statement (the "Registration Statement") to be filed by Acquiror
with the SEC pursuant to the Securities Act with respect to the shares to be
issued in the Bank Merger. When the Registration Statement or any post-effective
amendment thereto shall become effective, and at all times subsequent to such
effectiveness, up to and including the time of the last shareholder meeting with
respect to the transactions contemplated hereby, such Registration Statement and
all amendments or supplements thereto, with respect to all information set forth
therein furnished or to be furnished by ArgentBank relating to ArgentBank, (i)
will comply in all material respects with the provisions of the Securities Act
and the rules and regulations of the SEC thereunder, (ii) will comply in all
material respects with the Federal Deposit Insurance Act and with the rules and
regulations of the FDIC thereunder, and (iii) will not contain any untrue
statement of a material fact or omit to state a material fact required to be
stated therein or necessary to make the statements contained therein not
misleading. ArgentBank will advise Acquiror promptly after it receives notice
thereof of the time when the Proxy Statement has been approved by the FDIC or
any supplement or amendment has been filed, of the issuance of any stop order,
or of any request by the FDIC for the amendment or supplement of the Proxy
Statement or for additional information. All documents, financial statements, or
other information or materials which ArgentBank shall provide for filing with
the FDIC, the SEC and any regulatory agency in connection with the Bank Merger
will comply with generally accepted accounting principles.
ARTICLE 6
ARGENTBANK'S REPRESENTATIONS AND WARRANTIES
ArgentBank represents and warrants to Acquiror and Acquiror Bank that, except
as set forth in the Schedule of Exceptions attached hereto:
6.1 Organization and Authority. ArgentBank is a state chartered bank duly
incorporated, validly existing and in good standing under the laws of the State
of Louisiana and has the corporate power and authority to own, lease and operate
its properties and assets and to carry on its business as it is now being
conducted.
6.2 Authorization. The execution, delivery and performance of this Agreement and
the Stock Option Agreement by ArgentBank and the consummation of the
transactions contemplated hereby have been duly authorized by the Board of
Directors of ArgentBank, subject to regulatory approval. No other corporate
proceedings on the part of ArgentBank are necessary to authorize consummation of
this Agreement and the Stock Option Agreement, except for the approval of the
transaction by ArgentBank's stockholders, and the performance by ArgentBank of
the terms hereof. This Agreement and the Stock Option Agreement are valid and
binding obligations of ArgentBank enforceable against ArgentBank in accordance
with their terms except as may be limited by applicable bankruptcy, insolvency,
reorganization or moratorium or other similar laws affecting creditors' rights
generally and except that the availability of equitable remedies is within the
discretion of the appropriate court and except that this Agreement is subject to
approval by its stockholders and applicable regulatory agencies.
Neither the execution, delivery or performance of this Agreement or the Stock
Option Agreement by ArgentBank, nor the consummation of the transactions
contemplated hereby, nor compliance by ArgentBank with any of the provisions
hereof, will (a) in any material respect violate, conflict with, or result in a
breach of any provision of, or constitute a default (or an event which, with
notice or lapse of time or both, would constitute a default) under or result in
the termination of, or accelerate the performance required by, or result in a
right of termination or acceleration, or the creation of any lien, security
interest, charge or encumbrance upon any of the properties or assets of
ArgentBank under any terms, conditions or provisions of (i) ArgentBank's
articles or bylaws or other charter documents of ArgentBank or (ii) any material
note, bond, mortgage, indenture, deed of trust, license, lease, agreement or
other instrument or obligation to which ArgentBank is a party or by which
ArgentBank may be bound, or to which ArgentBank or the properties or assets of
it may be subject, or (b) violate any judgment, ruling, order, writ, injunction,
decree, statute, rule or regulation applicable to ArgentBank or any of its
properties or assets.
6.3 Capital Structure of ArgentBank. As of the date hereof, the authorized
capital of ArgentBank consists solely of 16,000,000 shares of common stock of
the par value of $.10 each. As of the date hereof 5,863,668 shares of such
authorized common stock were issued and outstanding in addition to not more than
664,389 shares issuable in the Assumption Bank acquisition and none are held in
treasury. The outstanding shares of capital stock of ArgentBank are validly
issued and outstanding, fully paid and, except as may be affected by Louisiana
Revised Statute Section 6:262, nonassessable. There are no outstanding options,
conversion rights, warrants, calls, rights, commitments or agreements to issue
any form of stock or other security of ArgentBank, except as described in
Schedule 6.3. There are no outstanding obligations or commitments to purchase,
redeem or otherwise acquire any outstanding shares of common stock of ArgentBank
except as described in Schedule 6.3.
6.4 Financial Reports. ArgentBank's Financial Statements (i) have been prepared
in accordance with generally accepted accounting principles, consistently
applied, (ii) present fairly the consolidated results of operations and
financial position of ArgentBank for the periods and at the times indicated, and
(iii) are true and correct in all material respects for the periods and at the
times indicated.
6.5 No Material Adverse Change. Since March 31, 1997, there has been no event or
condition of any character (whether actual, or to the knowledge of ArgentBank,
threatened or contemplated) that has had or can reasonably be anticipated to
have, or that, if concluded or sustained adversely to ArgentBank would
reasonably be anticipated to have, a material adverse effect on the financial
condition, results of operations, business or prospects of ArgentBank, excluding
changes in laws or regulations that affect banking institutions generally.
6.6 Tax Liability. The amounts set up as liabilities for taxes in the ArgentBank
Financial Statements are sufficient for the payment of all respective taxes
(including, without limitation, federal, state, local, and foreign excise,
franchise, property, payroll, income, capital stock, and sales and use taxes)
accrued in accordance with GAAP and unpaid at the respective dates thereof.
6.7 Tax Returns: Payment of Taxes. All federal, state, local, and foreign tax
returns (including, without limitation, estimated tax returns, withholding tax
returns with respect to employees, and FICA and FUTA returns) required to be
filed by or on behalf of ArgentBank have been timely filed or requests for
extensions have been timely filed and granted and have not expired for periods
ending on or before December 31, 1996, and all returns filed are complete and
accurate to the best information and belief of their respective managements and
all taxes shown on filed returns have been paid. As of the date hereof, there is
no audit, examination, deficiency or refund litigation or matter in controversy
with respect to any taxes that might result in a determination materially
adverse to ArgentBank except as reserved against in the ArgentBank Financial
Statements. All taxes, interest, additions and penalties due with respect to
completed and settled examinations or concluded litigation have been paid, and
ArgentBank's reserves for bad debts at December 31, 1996, as filed with the
Internal Revenue Service were not greater than the maximum amounts permitted
under the provisions of Section 585 of the Internal Revenue Code.
6.8 Litigation and Proceedings. Except as set forth on Schedule 6.8 hereto, no
litigation, proceeding or controversy before any court or governmental agency is
pending against ArgentBank that in the opinion of its management is likely to
have a material and adverse effect on the business, results of operations or
financial condition of ArgentBank taken as a whole, and, to the best of its
knowledge, no such litigation, proceeding or controversy has been threatened or
is contemplated.
6.9 Brokers' or Finders' Fees. Except for the engagement of Chase Securities,
Inc. pursuant to that certain engagement letter dated May 30, 1997 and legal
fees in connection with the transactions contemplated herein, no agent, broker,
investment banker, investment or financial advisor or other person acting on
behalf of ArgentBank or under their authority is entitled to any commission,
broker's or finder's fee from any of the Parties hereto in connection with any
of the transactions contemplated by this Agreement.
6.10 Contingent Liabilities. Except as contemplated herein and except as
disclosed on Schedule 6.10 hereto or as reflected in the ArgentBank Financial
Statements and except in the case of the ArgentBank for unfunded loan
commitments made in the ordinary course of business consistent with past
practices, as of March 31, 1997, ArgentBank has no obligation or liability
(contingent or otherwise) that was material, or that when combined with all
similar obligations or liabilities would have been material, to ArgentBank taken
as a whole and there does not exist a set of circumstances resulting from
transactions effected or events occurring prior to, on, or after March 31, 1997,
or from any action omitted to be taken during such period that, to the knowledge
of ArgentBank, could reasonably be expected to result in any such material
obligation or liability.
6.11 Title to Assets; Adequate Insurance Coverage.
Except as described on Schedule 6.11:
a. As of March 31, 1997, ArgentBank had, and except with respect to assets
disposed of for adequate consideration in the ordinary course of business since
such date, now have, good and merchantable title to all real property and good
and merchantable title to all other material properties and assets reflected in
the ArgentBank Financial Statements, free and clear of all mortgages, liens,
pledges, restrictions, security interests, charges and encumbrances of any
nature except for (i) mortgages and encumbrances which secure indebtedness which
is properly reflected in the ArgentBank Financial Statements or which secure
deposits of public funds as required by law; (ii) liens for taxes accrued but
not yet payable; (iii) liens arising as a matter of law in the ordinary course
of business with respect to obligations incurred after March 31, 1997, provided
that the obligations secured by such liens are not delinquent or are being
contested in good faith; (iv) such imperfections of title and encumbrances, if
any, as do not materially detract from the value or materially interfere with
the present use of any of such properties or assets or the potential sale of any
such owned properties or assets; and (v) capital leases and leases, if any, to
third parties for fair and adequate consideration. ArgentBank owns, or has valid
leasehold interests in, all material properties and assets, tangible or
intangible, used in the conduct of its business. Any real property and other
material assets held under lease by ArgentBank are held under valid, subsisting
and enforceable leases with such exceptions as are not material and do not
interfere with the use made or proposed to be made by Acquiror in such lease of
such property.
b. With respect to each lease of any real property or a material amount of
personal property to which ArgentBank is a party, except for financing leases in
which ArgentBank is lessor, (i) such lease is in full force and effect in
accordance with its terms; (ii) all rents and other monetary amounts that have
been due and payable thereunder have been paid; (iii) there exists no default or
event, occurrence, condition or act which with the giving of notice, the lapse
of time or the happening of any further event, occurrence, condition or act
would become a default under such lease; and (iv) the Bank Merger will not
constitute a default or a cause for termination or modification of such lease.
c. ArgentBank has no legal obligation, absolute or contingent, to any other
person to sell or otherwise dispose of any substantial part of its assets or to
sell or dispose of any of its assets except in the ordinary course of business
consistent with past practices.
d. To the knowledge and belief of its management, the policies of fire, theft,
liability and other insurance maintained with respect to the assets or
businesses of ArgentBank provide adequate coverage against loss and the fidelity
bonds in effect as to which ArgentBank is named insured meet the applicable
standards of the American Bankers Association.
6.12 Liabilities. To the best of ArgentBank's and its officers' and directors'
knowledge, all liabilities of ArgentBank were, and will be created, for good,
valuable and adequate consideration in accordance with prudent business
standards and in substantial compliance with all laws, regulations and rules and
the accounts or evidence of ownership of accounts are and will be genuine, true,
valid and enforceable in accordance with their written terms. ArgentBank has not
agreed to any modification or extension of accounts or account terms or
otherwise made any agreements regarding such accounts except as disclosed in
writing on the books and records of ArgentBank; and ArgentBank has no knowledge
of any claim of ownership to any account other than as shown on the written
ownership records of ArgentBank for each account, and ArgentBank has no
knowledge of any alleged improper or wrongful withdrawal or payment of any such
account.
6.13 Loans. To the best knowledge and belief of its management, each loan
reflected as an asset of ArgentBank in the ArgentBank Financial Statements, as
of March 31, 1997, or acquired since that date, is the legal, valid, and binding
obligation of the obligor named therein, enforceable in accordance with its
terms, and no loan is subject to any asserted defense, offset or counterclaim
known to ArgentBank, except as disclosed in writing to Acquiror on or prior to
the date hereof.
6.14 Allowance for Loan Losses. The allowances for possible loan losses shown on
the balance sheets of ArgentBank as of March 31, 1997 are adequate in all
material respects under the requirements of GAAP to provide for possible losses,
net of recoveries, relating to loans previously charged off, on loans
outstanding (including accrued interest receivable) as of March 31, 1997, and
such allowance has been established in accordance with GAAP. To the knowledge of
ArgentBank's management, ArgentBank is not likely to be required to materially
increase the provision for loan losses between the date hereof and the Effective
Date.
6.15 Investments. Except for investments classified as held-to-maturity as
prescribed under the Financial Accounting Standards Board Statement Number 115,
and pledges to secure public or trust deposits, none of the investments
reflected in the ArgentBank Financial Statements under the heading "Investment
Securities", and none of the investments made by ArgentBank since March 31,
1997, and none of the assets reflected in the ArgentBank Financial Statements
under the heading "Cash and Due From Banks," is subject to any restriction,
whether contractual or statutory, that materially impairs the ability of
ArgentBank freely to dispose of such investment at any time. With respect to all
repurchase agreements to which ArgentBank is a party, ArgentBank has a valid,
perfected first lien or security interest in the government securities or other
collateral securing each such repurchase agreement which equals or exceeds the
amount of debt secured by such collateral under such agreement.
6.16 Commitments and Contracts. ArgentBank is not a party or subject to any of
the following (whether written or oral, express or implied):
a. Except as listed on Schedule 6.16a attached hereto and with a complete copy
provided to Acquiror, any employment contract (including any obligations with
respect to severance or termination pay liabilities or fringe benefits) with any
present or former officer, director, employee or consultant (other than those
which are terminable at will by ArgentBank without significant penalty or cost
to ArgentBank);
b. Except as listed on Schedule 6.16b attached hereto and with a complete copy
provided to Acquiror, any plan or contract providing for any bonus, pension,
option, deferred compensation, retirement payment, profit sharing or similar
arrangement with respect to any present or former officer, director, employee or
consultant; or c. Any contract not made in the ordinary course of business
containing covenants which limit the ability of ArgentBank to compete in any
line of business or with any person or which involves any restriction of the
geographical area in which, or method by which, ArgentBank may carry on its
respective business (other than as may be required by law or applicable
regulatory authorities).
6.17 Employee Plans. To the best of ArgentBank's knowledge and belief, it, and
all "employee benefit plans", as defined in Section 3(3) of the Employee
Retirement Income Security Act of 1974, as amended ("ERISA"), that cover one or
more employees employed by ArgentBank:
i. is in compliance with all laws, regulations, reporting and licensing
requirements and orders applicable to its business or to such plan or any of its
employees (because of such employee's activities on behalf of it), the breach or
violation of which could have a material and adverse effect on such business;
and
ii. has received no notification from any agency or department of federal, state
or local government or the staff thereof asserting that any such entity is not
in compliance with any of the statutes, regulations or ordinances that such
governmental authority enforces, or threatening to revoke any license,
franchise, permit or governmental authorization, and is subject to no agreement
with any such governmental authority with respect to its assets or business.
6.18 Plan Liability. Except for liabilities to the Pension Benefit Guaranty
Corporation pursuant to Section 4007 of ERISA, all of which have been fully
paid, and except for liabilities to the Internal Revenue Service under Section
4971 of the Internal Revenue Code, all of which have been fully paid, ArgentBank
has no liability to the Pension Benefit Guaranty Corporation or to the Internal
Revenue Service with respect to any pension plan qualified under Section 401 of
the Internal Revenue Code.
6.19 Continuity of Interest. To the best knowledge of ArgentBank, there is no
plan or intention by the ArgentBank shareholders who own 1% or more of the
ArgentBank Common Stock, and to the best of the knowledge of management of
ArgentBank, there is no plan or intention on the part of the remaining
ArgentBank shareholders to sell, exchange or otherwise dispose of a number of
shares of Acquiror Common Stock, to be received in the Bank Merger that would
reduce ArgentBank stockholders' ownership of the Acquiror Common Stock to a
number of shares having a value, as of the date of the Bank Merger, of less than
50% of the value of all of the formerly outstanding ArgentBank Common Stock as
of the same date. For purposes of this representation, shares of ArgentBank
Common Stock surrendered by dissenters or exchanged for cash in lieu of
fractional shares of ArgentBank Common Stock will be treated as outstanding
ArgentBank Common Stock on the date of the Bank Merger. Furthermore, shares of
ArgentBank Common Stock and shares of Acquiror Common Stock held by ArgentBank
stockholders and otherwise sold, redeemed, or disposed of prior to or subsequent
to the Bank Merger are considered in this assumption. See Schedule 4.3 for
additional representations regarding continuity of shareholder interest under
Section 368(a)(1)(A) and Section 368(a)(2)(D) of the Code of 1986, as amended.
6.20 Environmental Matters. Except as set forth on Schedule 6.20, neither
ArgentBank nor, to the best of the knowledge of management of ArgentBank, any
previous owner or operator of any properties at any time owned (including any
properties owned or subsequently resold) leased, or occupied by ArgentBank or
used by ArgentBank in their respective business ("ArgentBank Properties") used,
generated, treated, stored, or disposed of any hazardous waste, toxic substance,
or similar materials on, under, or about ArgentBank Properties except in
compliance with all applicable federal, state, and local laws, rules and
regulations pertaining to air and water quality, hazardous waste, waste
disposal, air omissions, and other environmental matters ("Environmental Laws").
ArgentBank has not received any notice of noncompliance with Environmental Laws,
applicable laws, orders, or regulations of any governmental authorities relating
to waste generated by any such party or otherwise or notice that any such party
is liable or responsible for the remediation, removal, or clean-up of any site
relating to ArgentBank Properties.
6.21 Accuracy of Information. To the best of ArgentBank's and its officers' and
directors' knowledge, all information furnished by ArgentBank to Acquiror and
Acquiror Bank relating to the assets, liabilities, and this Agreement is
accurate, and ArgentBank has not omitted to disclose any information which is or
would be material to this Agreement.
6.22 Compliance with Laws and Contracts. To the best of ArgentBank's and its
officers' and directors' knowledge, ArgentBank is not in violation of any laws,
regulations, or agreements to which it is a party and has not failed to file any
material reports required by any governmental or other regulatory body.
ARTICLE 7
ACQUIROR'S REPRESENTATIONS, WARRANTIES, COVENANTS AND
AGREEMENTS
For purposes of this Agreement, except in Section 7.1 and where the context
requires otherwise, any reference to Acquiror in this Article 7 shall be deemed
to include Acquiror and Acquiror Bank and any reference to "material", material
adverse effect or a similar standard shall refer to the financial condition,
operations or other aspects of Acquiror and its subsidiaries including Acquiror
Bank taken as a whole. Acquiror represents and warrants to ArgentBank, except as
set forth in the Schedule of Exceptions attached hereto:
7.1 Organization and Authority. Acquiror is a corporation and Acquiror Bank is a
national banking association, duly incorporated, validly existing and in good
standing under the laws of the State of Louisiana and the United States of
America, respectively. Each of Acquiror and Acquiror Bank has the corporate
power and authority to own its properties and assets and to carry on its
business as it is now being conducted.
7.2 Shares Fully Paid and Non Assessable. As of July 14, 1997, the authorized
capital of Acquiror solely consists of 200,000,000 shares of Class A common
stock, no par value per share, of which 129,159,469 are outstanding and 51,598
are held in treasury and 100,000,000 shares of preferred stock, of which
2,000,000 shares of Fixed-Adjustable Rate Noncumulative Preferred Stock, Series
A are issued and outstanding. The outstanding shares of capital stock of
Acquiror and Acquiror Bank are validly issued and outstanding, fully paid and
nonassessable (subject to the case of Acquiror Bank to 12 U.S.C. Section 55) and
all of such shares of Acquiror Bank are owned directly or indirectly by Acquiror
free and clear of all liens, claims, and encumbrances. The shares of Acquiror
Common Stock to be issued in connection with the Bank Merger pursuant to this
Agreement have been duly authorized and, when issued in accordance with the
terms of this Agreement, will be validly issued, fully paid, and nonassessable.
7.3 Authorization.
a. The execution, delivery and performance of this Agreement by Acquiror and
Acquiror Bank and the consummation of the transactions contemplated hereby have
been duly authorized by the Boards of Directors of Acquiror and Acquiror Bank,
subject to regulatory approval. No other corporate proceedings on the part of
Acquiror are necessary to authorize the execution and delivery of this Agreement
and the performance by Acquiror of the terms hereof. This Agreement is a valid
and binding obligation of Acquiror enforceable against Acquiror in accordance
with its terms except as may be limited by applicable bankruptcy, insolvency,
reorganization or moratorium or other similar laws affecting creditors' rights
generally and except that the availability of equitable remedies is within the
discretion of the appropriate court and except that it is subject to approval of
applicable regulatory agencies.
b. Neither the execution, delivery or performance of this Agreement by Acquiror
and Acquiror Bank nor the consummation of the transactions contemplated hereby,
will (a) in any material respect violate, conflict with, or result in a breach
of any provision of, or constitute a default (or an event which, with notice or
lapse of time or both, would constitute a default) under or result in the
termination of, or accelerate the performance required by, or result in a right
of termination or acceleration, or the creation of any lien, security interest,
charge or encumbrance upon any of the properties or assets of Acquiror under any
terms, conditions or provisions of (i) Acquiror's or Acquiror Bank's articles or
bylaws or (ii) any material note, bond, mortgage, indenture, deed of trust,
license, lease, agreement or other instrument or obligation to which Acquiror or
Acquiror Bank is a party or by which Acquiror or Acquiror Bank may be bound, or
(b) violate in any material respect any judgment, ruling, order, writ,
injunction, decree, statute, rule or regulation applicable to Acquiror or
Acquiror Bank or any of its properties or assets.
7.4 Acquiror Financial and Other Reports. Acquiror has made or will make
available to ArgentBank true and correct copies of (a) the balance sheets as of
December 31, 1996 and 1995 of Acquiror and its consolidated subsidiaries and the
related consolidated statements of income, changes in shareholders' equity and
cash flows for the respective years then ended, the related notes thereto, and
the report of its independent public accountants with respect thereto (the
"Acquiror Audited Financial Statements"), (b) the unaudited balance sheets as of
March 31, 1997 and 1996 of Acquiror and its consolidated subsidiaries and the
related unaudited statements of income, changes in shareholders equity and cash
flows for the six-month periods then ended (the "Acquiror Unaudited Financial
Statements, and together with the Acquiror Audited Financial Statements, the
"Acquiror Financial Statements"), and (c) all correspondence between Acquiror or
Acquiror Bank and the OCC, the FRB, the SEC and the IRS since January 1, 1997.
The latest balance sheet forming part of the Acquiror Unaudited Financial
Statements is referred to herein as the "Acquiror Latest Balance Sheet."
Acquiror's Financial Statements (i) have been prepared in accordance with
generally accepted accounting principles, consistently applied, and (ii) present
fairly the consolidated results of operations of Acquiror for the periods
covered thereby and the financial condition of Acquiror and its consolidated
subsidiaries as of the dates thereof. Once released, Acquiror will make
available to ArgentBank true and correct copies of the unaudited balance sheet
as of June 30, 1997 of Acquiror and its consolidated subsidiaries and the
related unaudited statements of income, changes in shareholders' equity and cash
flows for the six-month period then ended.
7.5 No Material Adverse Change. Since March 31, 1997, there has been no event or
condition of any character (whether actual, or to the knowledge of Acquiror or
Acquiror Bank, threatened or contemplated) that has had or can reasonably be
anticipated to have, or that, if concluded or sustained adversely to Acquiror
would reasonably be anticipated to have, a material adverse effect on the
financial condition, results of operations, business or prospects of Acquiror or
Acquiror Bank excluding changes in laws or regulations that affect banking
institutions generally.
7.6 Loans. To the best knowledge and belief of its management, and management of
Acquiror Bank, each loan reflected as an asset of Acquiror in the unaudited
consolidated balance sheet contained in Acquiror's quarterly report to
shareholders for the period ended March 31, 1997, or acquired since that date,
is the legal, valid and binding obligation of the obligor named therein,
enforceable in accordance with its terms, and no loan is subject to any asserted
defense, offset, or counterclaim known to Acquiror, except as disclosed on
Schedule 7.6 hereto.
7.7 Litigation. Except as disclosed on Schedule 7.7 hereto, no litigation,
proceeding or controversy before any court or governmental agency is pending
that in the opinion of its management is likely to have a material and adverse
effect on the business, results of operations or financial condition of Acquiror
and its subsidiaries taken as a whole, and, to the best of its knowledge, no
such litigation, proceeding or controversy has been threatened or is
contemplated.
7.8 Contingent Liabilities. Except as disclosed on Schedule 7.8 hereto or
reflected in the Acquiror reports filed with the SEC and except in the case of
Acquiror's subsidiaries for unfunded loan commitments made in the ordinary
course of business consistent with past practices, as of March 31, 1997, neither
Acquiror nor any of its subsidiaries had any obligation or liability (contingent
or otherwise) that was material, or that when combined with all similar
obligations or liabilities would have been material, to Acquiror and its
subsidiaries taken as a whole.
7.9 Allowances for Possible Loan Losses. The allowances for possible loan losses
shown on the consolidated balance sheet of Acquiror contained in the Acquiror
reports filed with the SEC as of March 31, 1997, are adequate in all material
respects under the requirements of GAAP to provide for possible loan losses, net
of recoveries relating to loans previously charged off, on loans outstanding
(including accrued interest receivable) as of March 31, 1997 and such allowance
has been established in accordance with GAAP. To the knowledge of Acquiror's and
Acquiror Bank's management, Acquiror is not likely to be required to increase
the provision for loan losses between the date hereof and the Effective Date in
an amount deemed to be material herein.
7.10 Benefit Plans. To the knowledge and belief of Acquiror's senior management,
Acquiror, each of its subsidiaries and all "employee benefit plans," as defined
in Section 3(3) of ERISA, that cover one or more employees employed by Acquiror
or any of its subsidiaries:
i. is in compliance with all laws, regulations, reporting and licensing
requirements and orders applicable to its business or to such plan or any of its
employees (because such employee's activities on behalf of it), the breach or
violation of which could have a material and adverse effect on such business;
and
ii. has received no notification from any agency or department of federal, state
or local government or the staff thereof asserting that any such entity is not
in compliance with any of the statutes; regulations or ordinances that such
governmental authority enforces, or threatening to revoke any license, franchise
or permit or governmental authorization, and is subject to no agreement or
written understanding with any such governmental authorities with respect to its
assets or business.
7.11 Accuracy of Information. To the best of Acquiror's and its officers' and
directors' knowledge, all information furnished by Acquiror to ArgentBank
pursuant to this Agreement is accurate, and Acquiror has not omitted to disclose
any information which is or would be material to this Agreement.
Acquiror covenants and agrees as follows:
7.12 Conduct of Business. Acquiror agrees to operate its business solely in the
ordinary course consistent with prudent business practices and in compliance
with all applicable laws, regulations, and rules; but nothing herein shall be
construed as limiting or restricting Acquiror in its assets, liability, or
capital structure or limiting any action of Acquiror or its affiliates, nor
shall anything in this Agreement be construed as limiting the future number and
amount of outstanding shares of Acquiror stock pending settlement of this
transaction provided, however, there will be no dilution by Acquiror of
ArgentBank shareholders of the Acquiror Common Stock to be received in the Bank
Merger, through any stock dividends, splits, warrants or options to be issued by
Acquiror unless the ArgentBank's shareholders receive relative value for the
same. The issuance or grant of stock options to employees and directors
consistent with past practices and the ongoing merger activity of Acquiror shall
be deemed in the "ordinary course" for purposes of the covenant in this Section
7.12.
7.13 Due Diligence.
a. In order to afford ArgentBank access to such information as it may reasonably
deem necessary to perform its due diligence review with respect to Acquiror and
its assets in connection with the Bank Merger, Acquiror shall (and shall cause
Acquiror Bank to), (a) upon reasonable notice, afford ArgentBank and its
officers, employees, counsel, accountants and other authorized representatives,
during normal business hours throughout the period prior to the Effective Date,
and to the extent consistent with applicable law, access to its premises,
properties, books and records, and to furnish ArgentBank and such
representatives with such financial and operating data and other information of
any kind respecting its business and properties as ArgentBank shall from time to
time reasonably request to perform such review, (b) furnish ArgentBank with
copies of all reports filed by Acquiror with the SEC throughout the period
promptly after such reports are so filed, and (c) promptly advise ArgentBank of
the occurrence before the Closing Date of any event or condition of any
character (whether actual or to the knowledge of Acquiror, threatened or
contemplated) that has had or can reasonably be anticipated to have, or that, if
concluded or sustained adversely to Acquiror, would reasonable be anticipated to
have, a material adverse effect on the financial condition, results of
operations, business or prospects of its consolidated group as a whole. Acquiror
shall not be required to provide access to or to disclose information where such
access or disclosure would violate or prejudice the rights of any customer or
other person, would jeopardize the attorney-client privilege of the institution
in possession or control of such information, or would contravene any law, rule,
regulation, order, judgment, decree or binding agreement. The parties will make
appropriate substitute disclosure arrangements under circumstances in which the
restrictions of the preceding sentence apply.
b. All information furnished by Acquiror shall be treated as the sole property
of Acquiror until consummation of the Bank Merger contemplated hereby. If this
Agreement is terminated prior to the Closing Date, ArgentBank shall return,
without retaining copies thereof, all confidential or non-public documents, work
papers and other materials obtained from Acquiror or its employees, agents or
representatives, in connection with the transactions contemplated hereby and
shall destroy any work papers, analyses or other materials prepared based on
such information, and for a period of two years following such termination
ArgentBank shall use its best efforts to keep such information confidential, not
disclose such information to any other person or entity except as may be
required by law, and not use such information (including any work papers,
analyses and other materials prepared by it in reliance upon such information)
in its business for any competitive or other commercial purpose and shall use
its best efforts to cause its employees, agents and representatives to do the
same, provided, however, the obligation to keep such information confidential
shall not apply to any information which (a) ArgentBank can establish by
convincing evidence was already in its possession prior to the disclosure
thereof by Acquiror (b) was then generally in the public domain through no fault
of ArgentBank or (c) was disclosed to the party receiving the information by a
third party not bound by an obligation of confidentiality.
7.14 Registration of Stock. Acquiror agrees to use its best efforts to register
the shares to be issued to ArgentBank stockholders pursuant to this Agreement
with the SEC and to obtain approval for listing of such shares on the New York
Stock Exchange.
7.15 Continuity of Business Enterprise. It is the present intention of Acquiror
to continue at least one significant historic business line of ArgentBank,
namely, financial services, and to use at least a significant portion of
ArgentBank's historic business assets in a business within the meaning of
Treasury Regulation Section 1.368-1(d).
7.16 Continuing Indemnity; Insurance. Acquiror covenants and agrees that:
a. From and after the Closing Date, Acquiror agrees to indemnify and hold
harmless each person who, as of the date immediately prior to the Closing Date,
served as an officer or director of ArgentBank (an "Indemnified Person") from
and against all damages, liabilities, judgments and claims (and related expenses
including, but not limited to, attorney's fees and amounts paid in, settlement)
based upon or arising from his capacity as an officer or director of ArgentBank,
to the same extent as he would have been indemnified under the articles of
association and or bylaws of Acquiror Bank, as such documents were in effect on
the date of this Agreement as if he were an officer or director of Acquiror Bank
at all relevant times; provided, however, that the indemnification provided by
this Section shall not apply to any claim against an Indemnified Person if such
Indemnified Person knew of the existence of the claim and failed to make a good
faith effort to require ArgentBank, as the case may be, to notify its director
and officer liability insurance carrier of the existence of such claim prior to
the Closing Date.
b. The rights granted to the Indemnified Persons hereby shall be contractual
rights inuring to the benefit of all Indemnified Persons and shall survive this
Agreement and any merger, consolidation or reorganization of Acquiror or
Acquiror Bank.
c. The rights to indemnification granted by this Section 7.16 are subject to the
following limitations: (i) the total aggregate indemnification to be provided by
Acquiror pursuant to Section 7.16 shall not exceed, as to all of the Indemnified
Persons as a group, the sum of $15,000,000, and Acquiror shall have no
responsibility to any Indemnified person for the manner in which such sum is
allocated among that group (but nothing in this subsection is intended to
prohibit the Indemnified Persons from seeking reallocation among themselves);
(ii) a director or officer who would otherwise be an Indemnified Person under
this Section 7.16 shall not be entitled to the benefits hereof unless such
director or officer has executed a Joinder Agreement (the "Joinder Agreement")
in the form of Exhibit E hereto; and (iii) amounts otherwise required to be paid
by Acquiror to an Indemnified Person pursuant to this Section 7.16 shall be
reduced by any amounts that such Indemnified Person recovers by virtue of the
claim for which other employees and officers indemnification is sought.
d. Acquiror agrees that the $15,000,000 indemnification limit set forth in
paragraph (c) of this Section 7.16 shall not apply to any damages, liabilities,
judgments and claims (and related expenses, including but not limited to
attorney's fees and amounts paid in settlement) insofar as they arise out of or
are based upon the matters for which indemnification is provided in Section 7.18
hereof.
e. The provisions of this Section 7.16 are intended to be for the benefit of,
and shall be enforceable by, each Indemnified Party and his or her heirs and
representatives.
7.17 Permits, Consents and Approvals. Acquiror shall submit an application to
the Federal Reserve and the OCC for approval of the transactions contemplated
hereby in accordance with the provisions of the Bank Merger Act;
7.18 Hold Harmless. Acquiror will indemnify and hold harmless ArgentBank,
each of its directors and officers and each person, if any, who controls
ArgentBank within the meaning of the Securities Act against any losses, claims,
damages or liabilities, joint, several or solidary, to which they or any of them
may become subject, under the Securities Act or otherwise, insofar as such
losses, claims, damages or liabilities (or actions in respect thereof) arise out
of or are based upon an untrue statement or alleged untrue statement of a
material fact contained in the Registration Statement, or in any amendment or
supplement thereto, or arising out of or based upon the omission or alleged
omission to state therein a material fact required to be stated therein or
necessary to make the statements therein not misleading, and will reimburse each
such person for any legal or other expenses reasonably incurred by such person
in connection with investigating or defending any such action or claim;
provided, however, that Acquiror shall not be liable in any such case to the
extent that any such loss, claim, damage or liability (or action in respect
thereof) arises out of or is based upon any untrue statement or alleged untrue
statement or omission or alleged omission made in the Registration Statement or
any such amendment or supplement in reliance upon and in conformity with
information furnished to Acquiror by ArgentBank for use therein. Promptly after
receipt by an indemnified party hereunder of notice of the commencement of any
action, such indemnified party shall, if a claim in respect thereof is to be
made against Acquiror under this Section, notify Acquiror in writing of the
commencement thereof. In case any such action shall be brought against any
indemnified party and it shall notify Acquiror of the commencement thereof,
Acquiror shall be entitled to participate therein, and to the extent that it
shall wish, to assume the defense thereof, with counsel satisfactory to such
indemnified party, and, after notice from Acquiror to such indemnified party of
its election to so assume the defense thereof, Acquiror shall not be liable to
such indemnified party under this Section 7.18 for any legal expenses of other
counsel or any other expenses subsequently incurred by such indemnified party.
7.19 Employment Agreements and Transaction Bonuses.
a. On or before the Closing Date, Acquiror shall execute an employment agreement
with Randall E. Howard which provides for a term of at least three (3) years
with a guaranteed salary, salary increases in accordance with Acquiror's
existing salary administration procedures and based upon performance and
position within the relevant salary band, as well as all benefits, including but
not limited to stock options and a change in control provision, in amounts equal
to comparable executives at Acquiror. On or before the Closing Date, Acquiror
shall execute employment agreements with Gloria Navarro, William B. Gautreaux,
Hugh Hamilton and Robert Naquin for a term of two (2) years each with a
guaranteed salary, salary increases in accordance with Acquiror's existing
salary administration procedures and based upon performance and position within
the relevant salary band, as well as all benefits, including but not limited to
stock options, that are comparable to equivalent level employees at Acquiror.
Each such employee who executes an employment agreement shall also agree to a
non-compete for the term of the employment agreement which would prohibit such
employee from competing against Acquiror within Assumption, Lafourche and
Terrebonne Parishes.
b. Upon the Closing Date, Acquiror shall pay transaction bonuses in an aggregate
amount not to exceed $375,150 to no more than five (5) officers, and Hibernia
will pay to Mr. Howard a transaction bonus in an amount mutually agreed by Mr.
Howard and Hibernia. At the option of the recipient, all such transaction
bonuses shall be payable in January 1998 if the Closing occurs on or prior to
December 31, 1997 or on the Closing Date if the Closing occurs after December
31, 1997.
7.20 Election of Directors. Within 30 days of the Closing Date, Acquiror's Board
of Directors shall appoint Dr. James Peltier to the Boards of Directors of
Acquiror and Acquiring Bank, and shall reappoint him to the Board of Directors
of Acquiror Bank, and shall nominate and recommend him for re-election to the
Board of Directors of Acquiror, until he reaches the customary retirement age as
pursuant to Acquiror's policy for its directors. Acquiror shall continue to
provide comparable office space for Dr. Peltier in Thibodaux, Louisiana, and
secretarial assistance from an individual of mutual agreement by the Parties,
during such time as he serves on Acquiror Bank's Board of Directors.
7.21 Actions Necessary to Complete Bank Merger. Acquiror shall use its best
efforts in good faith to take or cause to be taken all action necessary or
desirable under this Agreement on its part as promptly as practicable so as to
permit the consummation of this Agreement at the earliest possible date
(including obtaining the consent or approval of each governmental authority and
individual, partnership, corporation, association, or any other form of business
or professional entity whose consent or approval is required for the
consummation of the transactions contemplated hereby, requesting the delivery of
appropriate opinions and letters from its counsel and recommending that this
Agreement be approved by its shareholders) and cooperate fully with ArgentBank
to that end; provided, however, Acquiror shall not be obligated to take or cause
to be taken any action which is or creates a material burden on Acquiror, except
to the extent such actions are reasonably anticipated to be required in order to
effect the Bank Merger.
7.22 Preparation of Registration Statement and Proxy Statement. Acquiror shall
prepare as promptly as practicable jointly with ArgentBank the Proxy Statement
to be filed by ArgentBank with the FDIC and the Registration Statement to be
filed by Acquiror with the SEC pursuant to the Securities Act with respect to
the shares to be issued in the Bank Merger. When the Registration Statement or
any post-effective amendment thereto shall become effective, and at all times
subsequent to such effectiveness, up to and including the time of the last
shareholder meeting with respect to the transactions contemplated hereby, such
Registration Statement and all amendments or supplements thereto, with respect
to all information set forth therein furnished or to be furnished by Acquiror
relating to Acquiror and by ArgentBank relating to ArgentBank, (i) will comply
in all material respects with the provisions of the Securities Act and the rules
and regulations of the SEC thereunder and (ii) will not contain any untrue
statement of a material fact or omit to state a material fact required to be
stated therein or necessary to make the statements contained therein not
misleading. Acquiror will advise ArgentBank promptly after it receives notice
thereof of the time when the Registration Statement has become effective or any
supplement or amendment has been filed, of the issuance of any stop order, of
the suspension of the qualification of the Acquiror Common Stock issuable in
connection with the Bank Merger for offering or sale in any jurisdiction, of the
initiation or threat of any proceeding for any such purpose, or of any request
by the SEC for the amendment or supplement of the Registration Statement or for
additional information.
ARTICLE 8
CONDITIONS TO CLOSING
The obligations of ArgentBank, Acquiror and Acquiror Bank under this Agreement,
except as otherwise provided herein, shall be subject to the satisfaction or
waiver of the following conditions on or prior to the Closing:
8.1 Conditions to Each Party's Obligations to Effect the Bank Merger. The
respective obligation of each party to effect the Bank Merger shall be subject
to the following conditions:
a. Stockholder Approval. The Bank Merger shall have been approved by the
requisite vote of the holders of the outstanding shares of ArgentBank common
stock at ArgentBank's Stockholders' Meeting.
b. Regulatory Approvals. The transactions contemplated by this Agreement shall
have been approved by all governing regulatory authorities, all conditions
required to be satisfied shall have been satisfied, and all waiting periods
relating to such approvals shall have expired.
c. Registration Statement. The Registration Statement shall have been declared
effective and shall not be subject to a stop order or any threatened stop order,
and all state securities and blue sky permits or approvals required to
consummate the transactions contemplated by this Agreement shall have been
received.
d. Pooling Treatment. Acquiror shall be satisfied that the Bank Merger will
qualify for accounting by Acquiror as a pooling of interests under generally
accepted accounting principles and under applicable rules and regulations of the
SEC. In connection therewith, if requested by Acquiror, Acquiror shall have
received, on or before the Closing Date, a letter from Ernst & Young, LLP (or
any other accountants of Acquiror's choosing) dated as of the Closing Date to
the effect that the transactions contemplated by this Agreement may be treated
by Acquiror as a "pooling of interests" for accounting purposes.
e. Tax Opinion. ArgentBank shall have received an opinion from Watkins Ludlam &
Stennis, P.A. to the effect that the Bank Merger will constitute a
reorganization within the meaning of Section 368 of the Internal Revenue Code
and no gain or loss will be recognized by those ArgentBank stockholders to the
extent they exchange their ArgentBank Common Stock for Acquiror Common Stock.
f. Listing on New York Stock Exchange. The shares of Acquiror Common Stock
issuable to the holders of ArgentBank Common Stock in the Bank Merger shall have
been approved for listing on the New York Stock Exchange on or before the
Closing Date, subject to official notice of issuance.
8.2 Conditions to Obligations of ArgentBank to Effect the Bank Merger. The
obligations of ArgentBank to effect the Bank Merger shall be subject to the
following additional conditions at or prior to Closing:
a. Representations and Warranties. The representations and warranties of
Acquiror and Acquiror Bank set forth in this Agreement shall be true and correct
in all material respects (except to the extent such representation or warranty
is qualified by materiality in which case such representation or warranty shall
be true and correct) as of the date of this Agreement and as of the Closing as
though made at and as of the Closing, except as otherwise contemplated by this
Agreement or consented to in writing by ArgentBank.
b. Performance of Obligations. Acquiror and Acquiror Bank shall have performed
in all material respects all obligations required to be performed by it under
this Agreement prior to the Closing and Acquiror and Acquiror Bank shall deliver
at Closing appropriate certificates setting forth such.
c. Legal Opinion. An opinion of Acquiror's legal counsel shall be delivered to
ArgentBank dated the Closing Date and in form and substance reasonably
satisfactory to ArgentBank and its counsel to the effect that:
i. Acquiror is a corporation duly incorporated, validly existing and in good
standing under the laws of the State of Louisiana, and has corporate authority
to own and operate its businesses and properties and to carry on its business as
presently conducted by it;
ii. Acquiror Bank is a national banking association, duly organized and validly
existing and in good standing under the laws of the United States of America,
and has corporate authority to own and operate its businesses and properties and
to carry on its business as presently conducted by it;
iii. Acquiror and Acquiror Bank have corporate authority to make, execute and
deliver this Agreement; it has been duly authorized and approved by all
necessary corporate action of Acquiror and Acquiror Bank and duly executed and
delivered and is as of the Closing Date its valid and binding obligation
enforceable against each of them subject, however, to bankruptcy, insolvency and
similar laws affecting the enforcement of creditors' rights generally and to the
availability of equitable remedies in general;
iv. All required regulatory approvals have been obtained;
v. To such counsel's knowledge after inquiry, there is no litigation or
proceeding pending or threatened against Acquiror or Acquiror Bank relating to
the participation in or consummation of this Agreement by Acquiror or Acquiror
Bank and consummation will not violate the charter or bylaws of Acquiror or any
material contract or agreement to which either of them is a party.
vi. All shares of Acquiror Common Stock to be issued pursuant to the Bank Merger
have been duly authorized and, when issued pursuant to the Bank Merger
Agreement, will be validly and legally issued, fully paid and non-assessable and
will be, at the time of their delivery, free and clear of all liens, claims, and
encumbrances, preemptive or similar rights. vii. The Registration Statement has
become effective, and to such counsel's knowledge, no stop order suspending its
effectiveness has been issued nor have any proceedings for that purpose been
instituted;
viii. The Registration Statement and each amendment or supplement thereto, as of
their respective effective or issue dates, complied as to form in all material
respects with the requirements of the Securities Act and the rules and
regulations promulgated thereunder, and such counsel does not know of any
contracts or documents required to be filed as exhibits to the Registration
Statement which are not filed as required; it being understood that such counsel
need express no opinion as to the financial statements or other financial or
statistical data contained in or omitted from the Registration Statement or the
Proxy Statement; and
ix. Such counsel has participated in several conferences with representatives of
the parties of this Agreement and their respective accountants and counsel in
connection with the preparation of the Registration Statement and the Proxy
Statement to be filed in connection with the transactions contemplated by this
Agreement and have considered the matters required to be stated therein and the
statements contained therein, and based on the foregoing (in certain
circumstances relying as to materiality on the opinions of officers and
representatives of the parties to this Agreement) nothing has come to the
attention of such counsel that would lead them to believe that such Registration
Statement or the Proxy Statement, as amended or supplemented if it has been
amended or supplemented, at the time it became effective and as amended or
supplemented, (in the case of the Registration Statement) or at the time
distributed to shareholders (in the case of the Proxy Statement), contained any
untrue statement of a material fact or omitted a material fact required to be
stated therein or necessary to make the statements therein not misleading
(except in each such case for the financial statements and other financial and
statistical data included therein, as to which no opinion need be rendered).
As to matters of fact, counsel to Acquiror and Acquiror Bank may rely, to the
extent it deems appropriate, upon certificates of officers of Acquiror and
Acquiror Bank, provided, such certificates are delivered to ArgentBank prior to
the Closing Date or attached to the opinion of counsel.
d. Fairness Opinion. ArgentBank shall have received a letter from Chase
Securities, Inc. within five days of the scheduled mailing date of the Proxy
Statement to its shareholders, and updated to within five days of the Closing
Date to the effect that the terms of the Bank Merger are fair to its
shareholders from a financial point of view.
e. No Material Adverse Change. There shall not have occurred any material
adverse change from the date of this Agreement to the Closing Date in the
financial condition, results of operations or business of Acquiror and its
subsidiaries taken as a whole.
8.3 Conditions to Obligations of Acquiror to Effect the Bank Merger. The
obligations of Acquiror and Acquiror Bank to effect the Bank Merger shall be
subject to the following additional conditions:
a. Representations and Warranties. The representations and warranties of
ArgentBank set forth in this Agreement shall be true and correct in all material
respects as of the date of this Agreement (except to the extent such
representation or warranty is qualified by materiality in which case such
representation or warranty shall be true and correct) and as of the Closing as
though made at and as of the Closing, except as otherwise contemplated by this
Agreement or consented to in writing by Acquiror.
b. Performance of Obligations. ArgentBank shall have performed in all material
respects all obligations required to be performed by it under this Agreement
prior to the Closing and ArgentBank shall deliver at Closing appropriate
certificates setting forth such.
c. Legal Opinion. An Opinion of ArgentBank's legal counsel shall be delivered to
Acquiror dated the Closing Date, and in form and substance reasonably
satisfactory to Acquiror to the effect that:
i. ArgentBank is a Louisiana banking corporation, duly organized and validly
existing and in good standing under the laws of the State of Louisiana, and has
corporate authority to own and operate its businesses and properties and to
carry on its business as presently conducted by it;
ii. ArgentBank has corporate authority to make, execute and deliver this
Agreement, it has been duly authorized and approved by all necessary corporate
action of ArgentBank and has been duly executed and delivered and is as of the
Closing Date its valid and binding obligation subject, however, to bankruptcy,
insolvency and similar laws affecting the enforcement of creditors' rights
generally and to the availability of equitable remedies in general;
iii. To such counsel's knowledge after inquiry, there is no litigation or
proceeding pending or threatened against ArgentBank relating to the
participation in or consummation of this Agreement by ArgentBank and
consummation will not violate the charter or bylaws of ArgentBank or any
material contract or agreement to which ArgentBank is a party;
iv. With respect to that portion of the Proxy Statement prepared by such
counsel, the Proxy Statement and each amendment or supplement thereto, as of
their respective effective or issue dates, complied as to form in all material
respects with the requirements of the Securities Act and the rules and
regulations promulgated thereunder, and such counsel does not know of any
contracts or documents required to be filed as exhibits to the Proxy Statement
which are not filed as required; it being understood that such counsel need
express no opinion as to the financial statements or other financial or
statistical data contained in or omitted from the Proxy Statement; and
v. Such counsel has participated in several conferences with representatives of
the parties of this Agreement and their respective accountants and counsel in
connection with the preparation of the Registration Statement and the Proxy
Statement to be filed in connection with the transactions contemplated by this
Agreement and have considered the matters required to be stated therein and the
statements contained therein, and based on the foregoing (in certain
circumstances relying as to materiality on the opinions of officers and
representatives of the parties to this Agreement) nothing has come to the
attention of such counsel that would lead them to believe that such Registration
Statement or the Proxy Statement, as amended or supplemented if it has been
amended or supplemented, at the time it became effective and as amended or
supplemented, (in the case of the Registration Statement) or at the time
distributed to shareholders (in the case of the Proxy Statement), contained any
untrue statement of a material fact or omitted a material fact required to be
stated therein or necessary to make the statements therein not misleading
(except in each such case for the financial statements and other financial and
statistical data included therein, as to which no opinion need be rendered).
As to matters of fact, counsel to ArgentBank may rely, to the extent they deem
appropriate, upon certificates of officers of ArgentBank provided, such
certificates are delivered to Acquiror prior to the Closing Date or attached to
the opinion of counsel.
d. No Material Adverse Change. There shall not have occurred any material
adverse change from the date of this Agreement to the Closing Date in the
financial condition, results of operations or business of ArgentBank taken as a
whole.
e. Director Actions. ArgentBank's directors shall have, subject to the
provisions of Section 7.7 hereof, unanimously voted as directors in favor of
approving this Agreement and the Bank Merger Agreements, and unanimously
recommended to ArgentBank shareholders the approval of this Agreement, the Bank
Merger Agreements and the transactions contemplated hereby and such other
matters as may have been submitted to the shareholders in connection with this
Agreement. ArgentBank's Board of Directors shall also have voted the shares of
ArgentBank Common Stock held by them in favor of this Agreement and the Bank
Merger Agreement and shall execute a Lock-Up and Non-Competition Agreement on
terms mutually agreed upon by the Parties.
ARTICLE 9
CLOSING
9.1 Closing. The Closing shall be held at the offices of Acquiror Bank or such
other place as Acquiror and ArgentBank shall mutually designate.
9.2 Deliveries at Closing. At the Closing, all documents and instruments shall
be duly and validly executed and delivered by all the Parties hereto, and
possession of all liabilities and assets shall be transferred and delivered
accordingly.
9.3 Documents. The Parties shall execute any and all documents reasonably
requested by them or their legal counsel for the purpose of effecting the
transaction contemplated, including but not limited to the following:
a. endorsement, negotiation, and/or assignment of all original notes and
Security Agreements relating to all loans;
b. warranty deeds for the real property;
c. commitments for owners title insurance for the real property;
d. such other endorsements, assignments or other conveyances as may be
appropriate or necessary to effect the transfer to Acquiror of the assets,
duties, responsibilities and obligations as referred to herein; and
e. listing of dissenting stockholders, if any, including name, address, and
number of shares owned.
ARTICLE 10
EMPLOYMENT MATTERS
10.1 Employees and Certain Other Matters. All employees of ArgentBank at the
Effective Date shall become employees of Acquiror Bank. At the Effective Date,
all persons then employed by ArgentBank shall be eligible for such employee
benefits as are generally available to employees of Acquiror Bank having like
tenure, officer status and compensation levels and all ArgentBank employees who
are employed on the Effective Date shall be given full credit for all prior
service as employees of ArgentBank for all purposes of Acquiror's or Acquiror
Bank's benefit plans. All ArgentBank officers shall be given such benefits,
including but not limited to Stock Options, that are available to officers at
Acquiror or Acquiror Bank with like tenure, officer status and compensation
levels.
If within twelve months following the Closing Date, any individual employed by
ArgentBank immediately prior to the Closing who is terminated without cause, or
relocates to an office more than 60 miles from the place of such person's
employment on the Closing Date (however, in no event shall an Acquiror Bank
office located in the greater New Orleans area be deemed to be more than 60
miles from any existing branch of ArgentBank), or reduces to less than 30 hours
per week the working hours, of any former employee of ArgentBank and such former
employee thereafter resigns, Acquiror shall pay such person severance benefits
in amounts not less than as follows:
<2 years/3 weeks salary
2-9 years/4 months salary
10-19 years/5 months salary
20+ years/6 months salary
Acquiror will make reasonable efforts to maintain compensation levels for any
retained personnel commensurate with the employees' experience and
qualifications, and in accordance with its salary administration program.
10.2 Retirement Plan. ArgentBank currently maintains an ArgentBank Pension Plan
("Pension Plan") and an ArgentBank Employee Savings (401-k) Plan ("401-k Plan")
which will remain operative and in effect through the Closing Date. The Pension
Plan will be terminated as of the Closing Date and distributed to vested
employees of ArgentBank in accordance with the terms of the Plan after the
normal and customary contributions have been made consistent with past
practices. The trustees for such Plan will be responsible for the termination,
allocation and distribution of plan assets and related notices and other
reporting responsibilities to the IRS, Department of Labor and other government
agencies. All such termination costs will be paid from such Plan's assets. The
401-k Plan will be merged with the appropriate plan of Acquiror with full credit
granted for all prior service for vesting, eligibility and benefit purposes
unless such merger is prohibited under the terms of the 401-k Plan or Acquiror's
plan, or if Acquiror determines the respective merger would not be in the best
interest of Acquiror, in which case the 401-k Plan will be terminated as
provided above in this Section 10.2.
10.3 Other Benefit Plans. Other ArgentBank benefit plans will continue through
the Closing Date . Thereafter, all retained employees will be eligible to
participate in all Acquiror and Acquiror Bank employment benefit plans. All
retained employees will be granted full credit for all prior service for
vesting, eligibility and benefit purposes under all such plans.
10.4 Notices. ArgentBank shall be responsible for notifying its employees of the
terms of this Agreement as it affects and/or relates to them and for complying
with any applicable laws regarding such notices.
ARTICLE 11
TERMINATION
11.1 Termination. This Agreement may be terminated, either before or after
approval by the stockholders of ArgentBank as follows:
a. Mutual Consent. At any time on or prior to the Closing Date, by the
mutual consent in writing of a majority of the members of each of the Board of
Directors of the Parties hereto;
b. Pooling of Interest Accounting Treatment. By Acquiror if the Bank Merger
will not qualify for accounting by Acquiror as a pooling of interests under
generally accepted accounting principles and under applicable rules and
regulations of the SEC;
c. Expiration of Time. By the Board of Directors of Acquiror in writing or
by the Board of Directors of ArgentBank in writing, if the Closing shall have
not occurred on or before April 30, 1998, unless the absence of such occurrence
shall be due to the failure of the Party seeking to terminate this Agreement to
perform each of its obligations under this Agreement required to be performed by
it on or prior to the Closing Date;
d. Breach of Representation, Warranty or Covenant. By either Party hereto,
in the event of a breach by the other Party (a) of any covenant or agreement
contained herein or (b) of any representation or warranty herein, if (i) the
facts constituting such breach reflect a material and adverse change in the
financial condition, results of operations, business, or prospects taken as a
whole, of the breaching Party, which in either case cannot be or is not cured
within 60 days after written notice of such breach is given to the Party
committing such breach, or (ii) in the event of a breach of a warranty or
covenant, such breach results in a material increase in the cost of the
non-breaching Party's performance of this Agreement.
e. Regulatory Approval. By either Party hereto, at any time after the FRB,
OCC or the Department of Justice has denied any application for any approval or
clearance required to be obtained as a condition to the consummation of the Bank
Merger or imposed any material condition for the approval thereof not acceptable
to all Parties, and the time-period for all appeals or requests for
reconsideration thereof has run.
f. Shareholder Approval. By either Party hereto, if the Bank Merger is not
approved by the required vote of shareholders of ArgentBank .
g. Fairness Opinion. By ArgentBank if it has not received a letter from
Chase Securities, Inc. within five days of the scheduled mailing date of the
Proxy Statement to its shareholders, and updated to within five days of the
Closing Date to the effect that the terms of the Bank Merger are fair to its
shareholders from a financial point of view.
h. Tax Opinion. By ArgentBank if it has not received an opinion from
Watkins Ludlam & Stennis, P.A. to the effect that the Bank Merger will
constitute a reorganization within the meaning of Section 368 of the Internal
Revenue Code and no gain or loss will be recognized by those ArgentBank
stockholders to the extent they exchange their ArgentBank Common Stock for
Acquiror Common Stock.
i. Fiduciary Out. By ArgentBank's Board of Directors in accordance with
Section 5.8 hereof.
j. Exercise of Stock Option Agreement. By ArgentBank's Board of Directors
if the ArgentBank Common Stock subject to the Stock Option Agreement shall have
been issued pursuant to any exercise of the Stock Option Agreement and, at the
time scheduled for Closing, all or any portion of such ArgentBank Common Stock
would not be canceled in accordance with Section 3.1(d) by virtue of the Merger.
11.2 Termination Fee. If this Agreement is terminated by Acquiror or Acquiror
Bank pursuant to Subsection 11.1(c) or ArgentBank terminates pursuant to
Subsection 11.1(d), then Acquiror shall pay or cause to be paid to ArgentBank
upon demand a fee of $4,000,000 (the "Buyer Termination Fee") payable in same
day funds.
11.3 Effect of Termination. In the event of termination of this Agreement by any
party as provided above, the Bank Merger Agreement shall also terminate and this
Agreement, and the Bank Merger Agreement shall forthwith become void and except
as provided in Sections 5.7(b), 7.13(b), 7.18 and 13.10 hereof and the Stock
Option Agreement (which shall be governed by its own terms as to termination),
there shall be no further liability on the part of any party hereto or any of
their respective officers or directors.
ARTICLE 12
APPRAISAL RIGHTS
12.1 Appraisal Rights of ArgentBank. Notwithstanding any other provision of this
Agreement to the contrary, dissenting stockholders of ArgentBank who comply with
the procedural requirements of 12 U.S.C. Section 215a will be entitled to
receive payment of the value of their shares if the Bank Merger is effected.
ARTICLE 13
MISCELLANEOUS
13.1 Entire Agreement. This Agreement and the Stock Option Agreement embody the
entire understanding of the Parties in relation to the subject matter herein and
supersede all prior understandings or agreements, oral or written, between the
Parties hereto.
13.2 Non-Survival of Representations and Warranties. None of the representations
and warranties in this Agreement shall survive the Closing Date, or the earlier
termination of this Agreement pursuant to Article 11 hereof. Except as provided
in Section 13.10 hereof, each party hereby agrees that its sole right and remedy
with respect to any breach of a representation or a warranty by the other party
shall be to not consummate the transactions described herein if such breach
results in the nonsatisfaction of a condition set forth in Section 8.2 or 8.3
hereof, provided, however, that the foregoing shall not be deemed a waiver of
any claim for intentional misrepresentation or fraud.
13.3 Headings. The headings and subheadings in this Agreement, except the terms
identified for definition in Article 1 and elsewhere in this Agreement, are
inserted for convenience only and shall not affect the meaning or interpretation
of this Agreement or any provision hereof.
13.4 Duplicate Originals. This Agreement may be executed in any number of
duplicate originals, any one of which when fully executed by all Parties shall
be deemed to be an original without having to account for the other originals.
13.5 Governing Law. This Agreement and the rights and obligations hereunder
shall be governed and construed by the laws of the State of Louisiana.
13.6 Successors: No Third Party Beneficiaries. All terms and conditions of this
Agreement shall be binding on the successors and assigns of ArgentBank, Acquiror
and Acquiror Bank. Except as otherwise specifically provided in this Agreement,
nothing expressed or referred to in this Agreement is intended or shall be
construed to give any person other than ArgentBank and Acquiror any legal or
equitable right, remedy or claim under or in respect of this Agreement or any
provisions contained herein, it being the intention of the Parties hereto that
this Agreement, the obligations and statements of responsibilities hereunder,
and all other conditions and provisions hereof are for the sole and exclusive
benefit of ArgentBank and Acquiror and for the benefit of no other person.
13.7 Modification; Assignment. No amendment or other modification of any part of
this Agreement shall be effective except pursuant to a written agreement
subscribed by the duly authorized representatives of all of the Parties hereto.
This Agreement may not be assigned without the express written consent of both
Parties.
13.8 Notice. Any notice, request, demand, consent, approval or other
communication to any Party hereof shall be effective when received and shall be
given in writing, and delivered in person against receipt thereof, or sent by
certified mail, postage prepaid or courier service at its address set forth
below or at such other address as it shall hereafter furnish in writing to the
others. All such notices and other communications shall be deemed given on the
date received by the addressee or its agent.
ArgentBank
ArgentBank
203 W. Second Street (70301)
Post Office Box 819
Thibodaux, Louisiana 70302-0819
Attn: Mr. Randall E. Howard
Fax Number: (504) 447-0579
Copy to: Watkins Ludlam & Stennis, P.A.
633 North State Street (39202)
P. O. Box 427
Jackson, MS 39205-0427
Attn: Carl J. Chaney, Esq.
Fax Number: (601) 949-4804
Acquiror
Hibernia Corporation
313 Carondelet Street (70130)
Post Office Box 61540
New Orleans, LA 70161-1540
Attn: Mr. Stephen A. Hansel
Fax Number: (504) 533-2447
Copy to: Patricia C. Meringer
Senior Vice President and Corporate Counsel
Hibernia Corporation
225 Baronne Street, 11th Floor
New Orleans, LA 70112
Fax Number: (504) 533-5595
13.9 Waiver. ArgentBank and Acquiror may waive their respective rights, powers
or privileges under this Agreement; provided that such waiver shall be in
writing; and further provided that no failure or delay on the part of ArgentBank
or Acquiror to exercise any right, power or privilege under this Agreement will
operate as a waiver thereof, nor will any single or partial exercise of any
right, power or privilege under this Agreement preclude any other or further
exercise thereof or the exercise of any other right, power or privilege by
ArgentBank or Acquiror under the terms of this Agreement, nor will any such
waiver operate or be construed as a future waiver of such right, power or
privilege under this Agreement.
13.10 Costs, Fees and Expenses. Each Party hereto agrees to pay all costs, fees
and expenses which it has incurred in connection with or incidental to the
matters contained in this Agreement, including without limitation any fees and
disbursements to its accountants and counsel. Acquiror, Acquiror Bank and
ArgentBank will be jointly responsible for preparing the applications,
regulatory filings and registration statement necessary to obtain approval of
the Bank Merger. Acquiror will be responsible for printing expenses for the
proxy materials and the issuance of the Acquiror Common Stock. ArgentBank will
be responsible for the cost of its accountants, legal counsel, and financial
advisors.
13.11 Press Releases. ArgentBank and Acquiror shall consult with each other as
to the form and substance of any press release related to this Agreement or the
transactions contemplated hereby, and shall consult each other as to the form
and substance of other public disclosures related thereto, provided, however,
that nothing contained herein shall prohibit Acquiror, following notification to
ArgentBank, from making any disclosures which its counsel deems necessary to
conform with requirements of law or the rules of the New York Stock Exchange,
and nothing contained herein shall prohibit ArgentBank, following notification
to Acquiror, from making any disclosures which its counsel deems necessary to
conform with requirements of law or the rules of the American Stock Exchange.
13.12 Severability. If any provision of this Agreement is invalid or
unenforceable then, to the extent possible, all of the remaining provisions of
this Agreement shall remain in full force and effect and shall be binding upon
the Parties hereto.
IN WITNESS WHEREOF, the Parties hereto have caused this Agreement to be executed
by their duly authorized representatives as of the date first above written.
HIBERNIA CORPORATION
By:
Name: Stephen A. Hansel
Title: PRESIDENT AND CHIEF EXECUTIVE OFFICER
Attest:
HIBERNIA NATIONAL BANK
By:
Name: Stephen A. Hansel
Title: PRESIDENT AND CHIEF EXECUTIVE OFFICER
Attest:
ARGENTBANK
By:
Name: Randall E. Howard
Title: PRESIDENT AND CHIEF EXECUTIVE OFFICER
Attest:
EXHIBIT A
BANK MERGER AGREEMENT
This Bank Merger Agreement is made and entered into as of the 15th day of July,
1997, between Hibernia National Bank, New Orleans, Louisiana, a national banking
association ("Acquiror Bank") and ArgentBank, Thibodaux, Louisiana, a Louisiana
state banking association ("ArgentBank") (the "Bank Merger Agreement").
WITNESSETH:
WHEREAS, Acquiror Bank and ArgentBank (collectively, the "Constituent Banks")
and their respective Boards of Directors deem it advisable that ArgentBank be
merged into Acquiror Bank (the "Bank Merger") pursuant to the provisions of 12
U.S.C. Section 215a, et seq. and upon the terms and conditions hereinafter set
forth and in the Plan (as hereinafter defined); and
WHEREAS, the Constituent Banks have entered into an Agreement and Plan of Merger
dated as of the date hereof (the "Plan") (the defined terms in which are used
herein as defined therein) setting forth certain representations, warranties,
covenants and conditions relating to the Bank Merger;
NOW THEREFORE, it is agreed as follows:
ARTICLE ONE
The Bank Merger
Upon the terms and subject to the conditions hereinafter set forth, on the
Effective Date (as defined in Article Two hereof) ArgentBank shall be merged
into Acquiror Bank under the Articles of Association of Acquiror Bank and the
separate existence of ArgentBank shall cease. The Articles of Association of
Acquiror Bank shall not be altered or amended by virtue of the Bank Merger. The
directors and officers of Acquiror Bank in office immediately prior to the
Effective Time shall be the directors and officers of the Acquiror Bank. At the
Effective Time (as herein defined), Acquiror Bank, shall continue to be a
national banking association.
ARTICLE TWO
Effective Date and Time
The Bank Merger shall be effective as of the date and time specified or
permitted by the Office of the Comptroller of the Currency ("OCC") in a
Certificate of Merger or other written record issued by the OCC (such time and
date being herein referred to as the "Effective Time" and the "Effective Date",
respectively).
ARTICLE THREE
Conversion of Shares
On the Closing Date, each share of common stock, $.10 par value, of ArgentBank
("ArgentBank Common Stock") issued and outstanding immediately prior to the
Closing Date, other than the shares of ArgentBank Common Stock owned by
stockholders who pursuant to 12 U.S.C. Section 215a perfect dissenters rights,
shall, and without any action on the part of the holder thereof, be converted
into the right to receive 2.04 shares of Acquiror Common Stock (the "Exchange
Ratio") based upon 6,528,057 shares of ArgentBank Common Stock issued and
outstanding; provided, however, in the event said number of shares is less than
6,528,057, the Exchange Ratio will be adjusted proportionately. In the event the
number of shares outstanding is greater than 6,528,057, the Parties will
determine whether an adjustment will be made.
In the event that the Department of Justice requires or requests that Acquiror
or Acquiror Bank divest a portion of the assets and/or liabilities of ArgentBank
as a condition to its agreement not to object to the Merger, and the Parties
hereto agree to such divestiture and consummate the Merger, the Exchange Ratio
shall be adjusted downward to reflect the divestiture as set forth below.
In the event the aggregate amount of deposits to be divested is $10 million or
less or the aggregate amount of loans to be divested is $5 million or less,
there shall be no adjustment in the Exchange Ratio.
In the event the aggregate amount of deposits to be divested is greater than $10
million or the aggregate amount of loans to be divested is greater than $5
million, then the Exchange Ratio shall be calculated in accordance with the
following steps:
Step 1. If the aggregate amount of deposits to be divested is greater than
$10 million, then such amount shall be divided by $2,500,000. (If not, then skip
to Step 3.)
Step 2. The resulting number shall be multiplied by $172,000.
Step 3. If the aggregate amount of loans to be divested is greater than $5
million, then such amount shall be divided by $2,500,000. (If not, then skip to
Step 5.)
Step 4. The number resulting from Step 3 shall be multiplied by $240,000.
Step 5. The numbers resulting from Step 2, if applicable, and Step 4, if
applicable, shall be added together.
Step 6. The number resulting from Step 5 shall be subtracted from
$189,771,000.
Step 7. The number resulting from Step 6 shall be divided by $14.25.
Step 8. The number resulting from Step 7 shall be divided by the number of
shares of ArgentBank Common Stock outstanding to achieve the number of shares of
Acquiror Common Stock that will be exchanged for each outstanding share of
ArgentBank Common Stock.
The exchange of certificates representing Acquiror Common Stock for certificates
formerly representing ArgentBank Common Stock shall be effected as provided in
the Plan. No fractional shares of Acquiror Common Stock representing such
fractional shares will be issued to the holders of ArgentBank Common Stock.
Instead, a shareholder otherwise entitled to receive such fractional shares
shall be entitled to a cash payment (without interest) as provided in the Plan.
ARTICLE FOUR
Effects of Bank Merger
The Bank Merger shall have the effects set forth in 12 U.S.C. Section 215a.
ARTICLE FIVE
Filing of Merger Agreement
If this Merger Agreement is approved by the shareholders of ArgentBank and
Acquiror Bank, then the fact of such approval shall be certified hereon by the
Secretary or Assistant Secretary of the Constituent Banks, and this Merger
Agreement, as approved and certified, shall be signed and acknowledged by the
President or Vice President of each of the Constituent Banks. Thereafter, a
multiple original of this Merger Agreement, so certified, signed and
acknowledged, shall be delivered to the OCC and the OFI for filing and
recordation in the manner required by law.
ARTICLE SIX
Miscellaneous
The obligations of the Constituent Banks to effect the Bank Merger shall be
subject to all of the terms and conditions of the Plan. At any time prior to the
Effective Date, this Merger Agreement may be terminated (a) by the mutual
agreement of the Boards of Directors of the Constituent Banks or (b) pursuant to
the terms and provisions of the Plan. This Agreement shall be governed and
interpreted in accordance with federal law and the applicable laws of the State
of Louisiana. Capitalized terms used herein and not otherwise defined have the
meanings given to them in the Plan.
IN WITNESS WHEREOF, this Merger Agreement is signed by a majority of the
Directors of each of the Constituent Banks as of the day first above written.
ARGENTBANK
By a Majority of its Board of Directors
(consisting of a majority of its Directors)
HIBERNIA NATIONAL BANK
By a Majority of its Board of Directors
(consisting of a majority of its Directors)
EXHIBIT F
STOCK OPTION AGREEMENT
This Stock Option Agreement ("Option Agreement") is dated as of July 15, 1997,
between ArgentBank, a Louisiana state banking association ("ArgentBank"), and
Hibernia Corporation ("Hibernia"), a Louisiana corporation.
WITNESSETH
WHEREAS, the Boards of Directors of ArgentBank and Hibernia have approved an
Agreement and Plan of Merger ("Merger Agreement") dated as of the date hereof
providing for certain transactions pursuant to which ArgentBank would be merged
with and into Hibernia National Bank, a subsidiary of Hibernia;
WHEREAS, as a condition to Hibernia's entry into the Merger Agreement and to
induce such entry, ArgentBank has agreed to grant to Hibernia the option set
forth herein to purchase authorized but unissued shares of ArgentBank Common
Stock;
NOW, THEREFORE, in consideration of the premises herein contained, the parties
agree as follows:
ART1CLE 1
Definitions.
Capitalized terms defined in the Merger Agreement and used herein shall have the
same meanings as in the Merger Agreement.
ART1CLE 2
Grant of Option.
Subject to the terms and conditions set forth herein, ArgentBank hereby grants
to Hibernia an option ("Option") to purchase up to 1,299,083 shares of
ArgentBank Common Stock, at a price of $22.25 per share payable in cash as
provided in Section 4 hereof; provided, however, that in the event ArgentBank
issues or agrees to issue any shares of ArgentBank Common Stock (other than as
permitted under the Merger Agreement) at a price less than $22.25 per share (as
adjusted pursuant to Section 6 hereof), the exercise price shall be equal to
such lesser price; in no event, however, shall the number of shares for which
the Option is exercisable exceed 19.9% of ArgentBank's issued and outstanding
Common Stock.
ART1CLE 3
Exercise of Option.
3.1 Subject to compliance with applicable laws and regulations and unless
Hibernia shall have breached in any material respect and failed to cure any
covenant or representation contained in the Merger Agreement, Hibernia may
exercise the Option, in whole or part, at any time following the occurrence of a
Purchase Event (as defined below).
3.2 As used herein, a "Purchase Event" shall mean any of the following events or
transactions occurring after the date hereof:
a. any person (other than Hibernia) shall have commenced a bona fide tender or
exchange offer to purchase shares of ArgentBank Common Stock and upon
consummation of such offer such person owns or controls 20% or more of the
outstanding shares of ArgentBank Common Stock;
b. ArgentBank, without having received Hibernia's prior written consent, shall
have entered into an agreement with any person (other than Hibernia), other than
in connection with a transaction to which Hibernia has given its prior written
consent to (x) merge or consolidate, or enter into any similar transaction, with
ArgentBank other than with respect to any requirement of divestiture in
connection with the Merger Agreement under the federal banking or antitrust
laws, (y) purchase, lease or otherwise acquire any substantial portion of the
assets of ArgentBank other than in the ordinary course of business of
ArgentBank, or (z) purchase or otherwise acquire (including by way of merger,
consolidation, share exchange or any similar transaction) securities
representing 20% or more of the voting power of ArgentBank and the transaction
referred to in (x), (y) or (z) shall have been consummated;
c. any person (other than Hibernia in a fiduciary capacity) shall have acquired
beneficial ownership or the right to acquire beneficial ownership of 15% or more
of the outstanding shares of ArgentBank Common Stock (the term "beneficial
ownership" for purposes of this Option Agreement having the meaning assigned
thereto in Section 13(d) of the Securities Exchange Act of 1934, as amended (the
"1934 Act") and the regulations promulgated thereunder); provided, however, that
in calculating the number of shares owned by any person, no shares which were
beneficially owned prior to the effective date of this Agreement shall be
included;
3.3 In the event Hibernia wishes to exercise the Option, it shall send to
ArgentBank a written notice (the date of which being herein referred to as
"Notice Date") specifying (i) the total number of shares it will purchase
pursuant to such exercise, and (ii) a place and date not earlier than three
business days nor later than 20 business days from the Notice Date for the
closing of such purchase ("Closing Date"); provided that if prior notification
to or approval of the FDIC or any other regulatory authority is required in
connection with such purchase, Hibernia shall promptly file the required notice
or application for approval and shall expeditiously process the same and the
period of time that otherwise would run pursuant to this sentence shall run
instead from the date on which any required notification period has expired or
been terminated or such approval has been obtained and any requisite waiting
period shall have passed.
3.4 The Option shall expire and terminate to the extent not previously
exercised, upon the earliest to occur of the following (each a "Termination
Event"):
a. the Effective Date of the Merger; or
b. the termination of the Merger Agreement without a Purchase Event having
occurred, other than termination based upon, following, or in connection with
(A) a willful and material breach by ArgentBank of any of its covenants or
agreements in the Merger Agreement; or (B) Section 11.1(i) of the Merger
Agreement; or
c. six months after the occurrence of a Purchase Event; or
d. July 31, 1998.
3.5 Notwithstanding the termination of the Option, FNB shall be entitled to
purchase any shares with respect to which it has exercised the Option in
accordance with the terms hereof prior to the termination of the Option. The
termination of the Option shall not affect any rights hereunder which by their
terms extend beyond the date of such termination.
ART1CLE 4
Payment and Delivery of Certificates.
4.1 At the closing referred to in Section 3 hereof, Hibernia shall pay to
ArgentBank the aggregate purchase price for the shares of ArgentBank Common
Stock purchased pursuant to the exercise of the Option in immediately available
funds by a wire transfer to a bank account designated by ArgentBank or by
federal funds check if no account has been designated.
4.2 At such closing, simultaneously with the delivery of cash as provided in
subsection (a), ArgentBank shall deliver to Hibernia a certificate or
certificates representing the number of shares of ArgentBank Common Stock
purchased by Hibernia and Hibernia shall deliver to ArgentBank a letter agreeing
that Hibernia will not offer to sell or otherwise dispose of such shares in
violation of applicable law or the provisions of this Option Agreement.
ART1CLE 5
Representations.
ArgentBank hereby represents, warrants and covenants to Hibernia as follows:
5.1 ArgentBank shall at all times maintain sufficient authorized but unissued
shares of ArgentBank Common Stock so that the Option may be exercised without
authorization of additional shares of ArgentBank Common Stock.
5.2 The shares to be issued upon due exercise, in whole or in part, of the
Option, when paid for as provided herein, will be duly authorized, validly
issued, fully paid and nonassessable and will be delivered free and clear of all
claims, liens, encumbrances and security interests and not subject to any
preemptive rights.
5.3 ArgentBank will not, by amendment of its articles of incorporation or
through reorganization, consolidation, merger, dissolution or sale of assets, or
by any other voluntary act, avoid or seek to avoid the observance or performance
of any of the covenants, stipulations or conditions to be observed or performed
hereunder by it; and will promptly take all action as may from time to time be
required (including cooperating fully with Hibernia in preparing applications or
notices and providing information with respect to regulatory approval) in order
to permit Hibernia to exercise the Option and ArgentBank duly and effectively to
issue shares of ArgentBank Common Stock pursuant hereto.
ART1CLE 6
Adjustment Upon Changes in Capitalization.
Except for the ArgentBank stock to be issued in the Assumption Bank acquisition,
if ArgentBank should split or combine the ArgentBank Common Stock, or pay a
stock dividend or other stock distribution in ArgentBank Common Stock, or
otherwise change the ArgentBank Common Stock into any other securities, or make
any other dividend or distribution in respect of the ArgentBank Common Stock
(other than normal cash dividends), then the number of shares of ArgentBank
Common Stock subject to the Option shall be adjusted so that, after such
issuance, it equals 19.9% of the number of shares of ArgentBank Common Stock
then issued and outstanding without giving effect to any shares subject or
issued pursuant to the Option. Nothing contained in this Section 6 shall be
deemed to authorize ArgentBank to breach any provisions of the Merger Agreement.
Whenever the number of shares of ArgentBank Common Stock purchasable upon
exercise hereof is adjusted as provided in this Section 6, the option exercise
price shall be adjusted by multiplying the option exercise price by a fraction,
the numerator of which shall be equal to the number of shares of ArgentBank
Common Stock purchasable prior to the adjustment and the denominator of which
shall be equal to the number of shares of ArgentBank Common Stock purchasable
after the adjustment.
ART1CLE 7
Registration Rights.
ArgentBank shall, if requested by Hibernia, as expeditiously as possible file a
registration statement with the FDIC, if necessary, in order to permit the sale
or other disposition of this Option and/or the shares of ArgentBank Common Stock
acquired upon exercise of the Option in accordance with the intended method of
sale or other disposition requested by Hibernia. Hibernia shall provide all
information reasonably requested by ArgentBank for inclusion in any registration
statement to be filed hereunder. ArgentBank will use its reasonable best efforts
to cause such registration statement first to become effective and then to
remain effective for such period not in excess of 270 days from the day such
registration statement first becomes effective as may be reasonably necessary to
effect such sales or other dispositions. The first registration effected under
this Section 7 shall be at ArgentBank's expense except for underwriting
commissions and the fees and disbursements of Hibernia's counsel attributable to
the registration. A second registration may be requested hereunder at Hibernia's
expense. In no event shall ArgentBank be required to effect more than two
registrations hereunder. If requested by ArgentBank, in connection with any such
registration, Hibernia will become a party to any underwriting agreement
relating to the sale of such shares, but only to the extent of obligating itself
in respect of representations, warranties, indemnities and other agreements
customarily included by a selling shareholder in such underwriting agreements.
ART1CLE 8
Certain Puts.
8.1 Upon the occurrence of a Purchase Event that occurs prior to termination of
the Option, (i) at the request of Hibernia, delivered while the Option (in whole
or part) is exercisable, ArgentBank shall repurchase the Option from Hibernia at
a price equal to (x) the amount by which (a) the market/offer price (as defined
below) exceeds (b) the Option exercise price, multiplied by (y) the number of
shares for which the Option may then be exercised; and (ii) at the request from
time to time of the owner of shares purchased pursuant to the Option, delivered
while the Option (in whole or part) is exercisable (or, if it has been fully
exercised, would have been exercisable had such exercise not been made).
ArgentBank shall repurchase such number of the shares issued pursuant to the
Option from the owner as the owner shall designate at a price equal to (x) the
market/offer price multiplied by the number of such shares so designated. The
term "market/offer price" shall mean the highest of (i) the price per share of
ArgentBank Common Stock at which a tender offer or exchange offer therefor has
been made after the date hereof, (ii) the price per share of ArgentBank Common
Stock to be paid by any third party pursuant to any merger, consolidation, share
exchange or other agreement with ArgentBank entered into after the date hereof,
(iii) the average closing price for shares of ArgentBank Common Stock within the
30-day period immediately preceding the date Hibernia gives notice of the
required repurchase of this Option or the owner gives notice of the required
repurchase of shares, as the case may be, or (iv) in the event of a sale of all
or substantially all of ArgentBank's assets, the sum of the price paid in such
sale for such assets and the current market value of the remaining assets of
ArgentBank as determined by a nationally recognized investment banking firm
selected by the parties (or by an arbitrator if they cannot agree) divided by
the number of shares of ArgentBank Common Stock outstanding at the time of such
sale. In determining the market/offer price, the value of consideration other
than cash shall be determined by a nationally recognized investment banking firm
selected by the parties (or by an arbitrator if they cannot agree), and such
determination shall be conclusive and binding on all parties.
8.2 Hibernia or the owner, as the case may be, may exercise its right to require
ArgentBank to repurchase the Option and any shares pursuant to this Section 8 by
surrendering for such purpose to ArgentBank, at its principal office, this
Option Agreement or certificates for the shares, as applicable, accompanied by a
written notice or notices stating that Hibernia or the owner, as the case may
be, elects to require ArgentBank to repurchase the Option and/or the shares in
accordance with the provisions of this Section 8. As promptly as practicable,
and in any event within five business days after the surrender of the Option
and/or certificates representing shares and the receipt of such notice or
notices relating thereto, ArgentBank shall deliver or cause to be delivered to
Hibernia or the owner of the applicable repurchase price therefor or the portion
thereof that ArgentBank is not then prohibited from so delivering under
applicable law and regulation or as a consequence of administrative policy.
8.3 ArgentBank hereby undertakes to use its best efforts to obtain all required
regulatory and legal consents and to file any required notices in order to
accomplish any repurchase contemplated by this Section 8. Nonetheless, to the
extent that ArgentBank is prohibited under applicable law or regulation, or as a
consequence of administrative policy, from repurchasing the Option and/or the
shares in full, ArgentBank shall immediately so notify Hibernia and the owner
and thereafter deliver or cause to be delivered, from time to time, the portion
of the repurchase price that it is no longer prohibited from delivering. If
ArgentBank at any time after delivery of a notice of repurchase pursuant to
Section 8 is prohibited under applicable law or regulation, or as a consequence
of administrative policy, from delivering the repurchase price in full (and
ArgentBank hereby undertakes to use its best efforts to obtain all required
regulatory and legal approvals and to file any required notices as promptly as
practicable in order to accomplish such repurchase), Hibernia and/or the owner
may revoke its notice of repurchase either in whole or to the extent of the
prohibition.
ART1CLE 9
Severability.
If any term, provision, covenant or restriction contained in this Option
Agreement is held by a court or a federal or state regulatory agency of
competent jurisdiction to be invalid, void or unenforceable, the remainder of
the terms, provisions and covenants and restrictions contained in this Option
Agreement shall remain in full force and effect, and shall in no way be
affected, impaired or invalidated. If for any reason such court or regulatory
agency determines that the Option will not permit the holder to acquire the full
number of shares of ArgentBank Common Stock provided in Section 2 hereof (as
adjusted pursuant to Section 6 hereof), it is the express intention of
ArgentBank to allow the holder to acquire or to require ArgentBank to repurchase
such lesser number of shares as may be permissible, without any amendment or
modification hereof.
ART1CLE 10
Miscellaneous.
10.1 Extension. The period for exercise by Hibernia and its assignees of any
rights under this Option Agreement shall be extended (i) to the extent necessary
to obtain all regulatory approvals for the exercise of such rights, and for the
expiration of all statutory waiting periods; and (ii) to the extent necessary to
avoid liability under Section 16(b) of the 1934 Act by reason of such exercise.
10.2 Consents. Each of Hibernia and ArgentBank will use its best efforts to make
all filings with, and to obtain consents of, all third parties and regulatory
authorities necessary to the consummation of the transactions contemplated by
this Option Agreement, including without limitation applying to the Federal
Deposit Insurance Corporation, and the Louisiana Office of Financial
Institutions for approval to acquire the shares issuable hereunder.
10.3 Expenses. Except as otherwise expressly provided herein or in the Merger
Agreement each of the parties hereto shall bear and pay all costs and expenses
incurred by it or on its behalf in connection with the transactions contemplated
hereunder, including fees and expenses of its own financial consultants,
investment bankers, accountants and counsel.
10.4 Entire Agreement. Except as otherwise expressly provided herein or in the
Merger Agreement, this Option Agreement contains the entire agreement between
the parties with respect to the transactions contemplated hereunder and
supersedes all prior agreements or understandings with respect thereto, written
or oral. The terms and conditions of this Option Agreement shall inure to the
benefit of and be binding upon the parties hereto and their respective
successors and assigns. Nothing in this Option Agreement, expressed or implied,
is intended to confer upon any party, other than the parties hereof, and their
respective successors and assigns, any rights, remedies, obligations or
liabilities under or by reason of this Option Agreement, except as expressly
provided herein.
10.5 Assignment. Neither of the parties hereto may assign any of its rights or
obligations under this Option Agreement or the Option created hereunder to any
other person, without the express written consent of the other party, except
that in the event a Purchase Event shall have occurred and be continuing
Hibernia may assign in whole or in part its rights and obligations hereunder;
provided, however, that until the date 30 days following the date on which the
FDIC approves an application by Hibernia to acquire the shares of ArgentBank
Common Stock subject to the Option, Hibernia may not assign its rights under the
Option except in (i) a widely dispersed public distribution, (ii) a private
placement in which no one party acquires the rights to purchase in excess of 2%
of the ArgentBank Common Stock, (iii) an assignment to a single party (e.g., a
broker or investment banker) for the purpose of conducting a widely dispersed
public distribution on Hibernia's behalf, or (iv) any other manner approved by
the FDIC.
10.6 Notices. All notices or other communications which are required or
permitted hereunder shall be in writing and sufficient if delivered personally
or sent by overnight express or by registered or certified mail, postage
prepaid, addressed as follows:
If to Hibernia:
Hibernia Corporation
313 Carondelet Street (70130)
Post Office Box 61540
New Orleans, LA 70161-1540
Attn: Mr. Stephen A. Hansel
Fax Number: (504) 533-2447
With a copy to:
Patricia C. Meringer
Senior Vice President and Corporate Counsel
Hibernia Corporation
225 Baronne Street, 11th Floor
New Orleans, LA 70112
Fax Number: (504) 533-5595
If to ArgentBank:
ArgentBank
203 W. Second Street (70301)
Post Office Box 819
Thibodaux, Louisiana 70302-0819
Attn: Mr. Randall E. Howard
Fax Number: (504) 447-0579
With a copy to:
Watkins Ludlam & Stennis, P.A.
633 North State Street (39202)
Post Office Box 427
Jackson, MS 39205-0427
Attn: Carl J. Chaney, Esq.
Fax Number: (601) 949-4804
A party may change its address for notice purposes by written notice to the
other party hereto.
10.7 Counterparts. This Option Agreement may be executed in any number of
counterparts, and each such counterpart shall be deemed to be an original
instrument, but all such counterparts together shall constitute but one
agreement.
10.8 Specific Performance. The parties agree that damages would be an inadequate
remedy for a breach of the provisions of this Option Agreement by either party
hereto and that this Option Agreement may be enforced by either party hereto
through injunctive or other equitable relief.
10.9 Governing Law. This Option Agreement shall be governed by and construed in
accordance with the laws of the Louisiana applicable to agreements made and
entirely to be performed within such state, and such federal laws as may be
applicable.
IN WITNESS WHEREOF, each of the parties hereto has executed this Option
Agreement as of the day and year first written above.
HIBERNIA CORPORATION
By:
Name: Stephen A. Hansel
Title: PRESIDENT AND CHIEFEXECUTIVE OFFICER
Attest:
ARGENTBANK
By:
Name: Randall E. Howard
Title: PRESIDENT AND CHIEF EXECUTIVE OFFICER
Attest:
APPENDIX B
FAIRNESS OPINION OF CHASE SECURITIES INC.
November [ ], 1997
Board of Directors
ArgentBank
203 West Second Street
Thibodaux, LA 70301
Members of the Board:
You have informed us that ArgentBank and Hibernia Corporation ("Hibernia")
have entered into an Agreement and Plan of Merger dated as of July 15, 1997 (the
"Merger Agreement"), which provides, among other things, for the merger of
ArgentBank with and into Hibernia (the "Merger"). In connection with the Merger,
each outstanding share of ArgentBank common stock, par value $0.10 per share,
("ArgentBank Common Stock") will be exchanged for approximately 2.04 shares (the
"Exchange Ratio") of Hibernia common stock, no par value per share, ("Hibernia
Common Stock"). Under the Merger Agreement, the Exchange Ratio is subject to
adjustment under certain conditions pertaining to potential deposit and/or loan
divestitures which may or may not be required to consummate the Merger. The
terms and conditions of the Merger are more fully described in the Merger
Agreement.
You have requested that we render our opinion as to the fairness from a
financial point of view to the stockholders of ArgentBank of the consideration
to be received in the Merger.
In arriving at the opinion set forth below, we have, among other things:
(a) reviewed the Merger Agreement;
(b) reviewed certain publicly available business and financial
information that we deemed relevant relating to ArgentBank, Hibernia and the
banking industry in which they operate;
(c) reviewed certain internal non-public financial and operating data
provided to us by or on behalf of the management of ArgentBank relating to
ArgentBank and Hibernia, including (i) financial results of ArgentBank and
Hibernia through September 30, 1997 and (ii) management forecasts and projection
of financial results of ArgentBank through the fiscal years ending December 31,
1997, 1998 and 1999;
(d) reviewed and discussed with members of management of ArgentBank and
Hibernia, ArgentBank's and Hibernia's operations, historical financial
statements and future prospects, before and after giving effect to the Merger,
as well as ArgentBank's and Hibernia's view of the business, operational and
strategic benefits and other consequences of the Merger;
(e) compared the financial and operating performance of Hibernia with
publicly available information concerning certain other companies we deemed
comparable and reviewed the relevant historical stock prices and trading volumes
of such other companies;
(f) reviewed the financial terms of certain recent business combinations
and acquisition transactions we deemed comparable to the Merger; and
(g) made such other analyses and examinations as we have deemed
necessary or appropriate.
In rendering this opinion, we assumed and relied upon, without assuming
any responsibility for verification, the accuracy and completeness of all of the
financial and other information provided to, discussed with, or reviewed by or
for us, or publicly available for purposes of this opinion, and have further
relied upon the assurances of both the respective managements of ArgentBank and
Hibernia that they are not aware of any facts that would make such information
inaccurate or misleading. We have assumed that the Merger will be treated for
federal income tax purposes as a reorganization within the meaning of Section
368 of the Internal Revenue Code of 1986, as amended. We have also assumed that
under generally accepted accounting principles the Merger will be accounted for
under pooling of interest accounting rules. We have neither made nor obtained
any independent evaluations or appraisals of the assets or liabilities of either
ArgentBank or Hibernia, nor have we conducted a physical inspection of the
properties and facilities of ArgentBank or Hibernia. We have assumed that the
financial forecasts and projections prepared by ArgentBank have been reasonably
prepared on a basis reflecting the best currently available estimates and
judgments of the management of ArgentBank as to the future financial performance
of ArgentBank. We express no view as to such forecasts or projections or the
assumptions on which they were based.
Our opinion herein is necessarily based on market, economic and other
conditions as they exist and can be evaluated, and the information made
available to us, as of the date of this letter. We disclaim any undertaking or
obligation to advise any person of any change in any fact or matter affecting
our opinion that may come or be brought to our attention after the date hereof.
Our opinion is limited to the fairness from a financial point of view to
the stockholders of ArgentBank of the consideration to be received in the
Merger. We were not asked to consider and our opinion does not address the
relative merits of the proposed Merger as compared to any alternative business
strategies that might exist for ArgentBank or the effect of any other
transactions in which ArgentBank might engage. Our opinion is directed to the
Board of Directors of ArgentBank, and it does not constitute a recommendation to
any ArgentBank stockholder as to how such stockholder should vote with respect
to the Merger.
We have acted as financial advisor to ArgentBank in connection with the
Merger and will receive a fee for our services, including for rendering this
opinion, payment of a significant portion of which is contingent on the
consummation of the Merger. ArgentBank has agreed to indemnify us for certain
liabilities arising out of our engagement, including certain liabilities under
the federal securities laws. In addition, we have previously rendered financial
advisory services to ArgentBank for which we received customary compensation.
The Chase Manhattan Corporation and its affiliates, including Texas Commerce
Bank and Chase Securities Inc., in the ordinary course of business, have from
time to time provided, and in the future may continue to provide, commercial and
investment banking services to Hibernia. In the ordinary course of business, we
or our affiliates may actively trade in the debt and equity securities of
ArgentBank or Hibernia for our own accounts and for the accounts of our
customers and, accordingly, may at any time hold a long or short position in
such securities.
Based upon and subject to the foregoing, we are of the opinion, as of
the date hereof, that the consideration to be received in the Merger is fair
from a financial point of view to the stockholders of ArgentBank.
It is understood that (i) this opinion is for the use and benefit of the
Board of Directors of ArgentBank in connection with its consideration of the
Merger, and (ii) ArgentBank will not furnish this opinion or any other material
prepared by Chase Securities Inc. to any other person or persons or use or refer
to this opinion for any other purpose without the prior written consent of Chase
Securities Inc.; provided, however, that ArgentBank may publish this opinion in
its entirety in the Proxy Statement or in similar documents distributed to its
stockholders in connection with the Merger, subject to our prior written
approval of any summary of, excerpt from or reference to this opinion.
Very truly yours,
/s/ CHASE SECURITIES INC.
CHASE SECURITIES INC.
APPENDIX C
FORM OF TAX OPINION OF WATKINS LUDLAM & STENNIS, P.A.
FORM OF TAX OPINION TO BE GIVEN AT CLOSING
The tax opinion will contain the following individual opinions (or opinions
substantially similar thereto):
Provided that the proposed Merger of ArgentBank with and into Acquiror
Bank qualifies as a statutory merger under applicable federal and state law, the
acquisition by Acquiror Bank of substantially all of the assets of ArgentBank in
exchange for shares of Acquiror Common Stock and the assumption of liabilities
of ArgentBank will constitute a reorganization within the meaning of Code
section 368(a)(1)(A) and section 368(a)(2)(D).
For purposes of this opinion, "substantially all" means at least ninety
percent (90%) of the fair market value of the net assets and at least seventy
percent (70%) of the fair market value of the gross assets of ArgentBank held
immediately prior to the Merger. Acquiror, Acquiror Bank and ArgentBank will
each be "a party to a reorganization" within the meaning of section 368(b) of
the Code.
I. No gain or loss will be recognized by ArgentBank upon the transfer of
substantially all of its assets to Acquiror Bank solely in exchange for Acquiror
Common Stock and the assumption by Acquiror Bank of the liabilities of
ArgentBank (Code sections 361(a) and 357(a)).
II. No gain or loss will be recognized by either Acquiror or Acquiror Bank upon
the receipt by Acquiror Bank of substantially all of the assets of ArgentBank
solely in exchange for Acquiror Common Stock and the assumption by Acquiror Bank
of the liabilities of ArgentBank and the liabilities to which the transferred
assets are subject (Rev. Rul. 57-278, 1957-1 C.B. 124).
III. The basis of the assets of ArgentBank in the hands of Acquiror Bank will
be, in each instance, the same as the basis of those assets in the hands of
ArgentBank immediately prior to the Merger (Code section 362(b)).
IV. The holding period of ArgentBank's assets in the hands of Acquiror Bank
will, in each instance, include the period during which such assets were held by
ArgentBank (Code section 1223(2)).
V. No gain or loss will be recognized by the shareholders of ArgentBank upon
their receipt of Acquiror Common Stock (including fractional share interests to
which they may be entitled) solely in exchange for their ArgentBank Common Stock
(Code section 354(a)(1)).
VI. The basis of the Acquiror Common Stock to be received by the ArgentBank
shareholders (including any fractional share interests to which they may be
entitled) will be, in each instance, the same as the basis of the ArgentBank
Common Stock surrendered in exchange therefor (Code section 358).
VII. The holding period of the Acquiror Common Stock to be received by the
ArgentBank shareholders (including any fractional share interests to which they
may be entitled) will include, in each case, the period during which the
ArgentBank Common Stock surrendered in exchange therefor was held, provided that
the ArgentBank Common Stock is held as a capital asset in the hands of the
ArgentBank shareholders on the date of the exchange (Code section 1223(1)).
VIII. The payment of cash to ArgentBank shareholders in lieu of fractional
shares of Acquiror Common Stock will be treated for federal income tax purposes
as if the fractional shares were distributed as part of the reorganization
exchange and then redeemed by Acquiror. The cash payments will be treated as
having been received as distributions in redemption of such stock, subject to
the provisions and limitations of section 302 of the Code.
IX. In the event there are Dissenting Shareholders, where a dissenting
shareholder receives solely cash in exchange for his or her ArgentBank Common
Stock, such cash will be treated as having been received by the shareholder as a
distribution in redemption of his or her stock, subject to the provisions and
limitations of section 302.
APPENDIX D
SELECTED PROVISIONS OF FEDERAL LAW
RELATING TO THE RIGHTS OF DISSENTING SHAREHOLDERS
SECTION 215 CONSOLIDATION OF NATIONAL BANKS OR STATE BANKS WITH NATIONAL BANKS
Liability of consolidated association; capital stock; dissenting shareholders
The consolidated association shall be liable for all liabilities of the
respective consolidating banks or associations. The capital stock of such
consolidated association shall not be less than that required under existing law
for the organization of a national bank in the place in which it is located:
Provided, That if such consolidation shall be voted for at such meetings by the
necessary majorities of the shareholders of each association and State bank
proposing to consolidate, and thereafter the consolidation shall be approved by
the Comptroller, any shareholder of any of the associations or State banks so
consolidated who has voted against such consolidation at the meeting of the
association or bank of which he is a stockholder, or who has given written
notice in writing at or prior to such meeting to the presiding officer that he
dissents from the plan of consolidation, shall be entitled to receive the value
of the shares so held by him when such consolidation is approved by the
Comptroller upon written request made to the consolidated association at any
time before thirty days after the date of consummation of the consolidation,
accompanied by the surrender of his stock certificates.
Valuation of shares
The value of the shares of any dissenting shareholder shall be
ascertained, as of the effective date of the consolidation, by an appraisal made
by a committee of three persons, composed of (1) one selected by the vote of the
holders of the majority of the stock, the owners of which are entitled to
payment in cash; (2) one selected by the directors of the consolidated banking
association; and (3) one selected by the two so selected. The valuation agreed
upon by any two of the three appraisers shall govern. If the value so fixed
shall not be satisfactory to any dissenting shareholder who has requested
payment, that shareholder may, within five days after being notified of the
appraised value of his shares, appeal to the Comptroller, who shall cause a
reappraisal to be made which shall be final and binding as to the value of the
shares of the appellant.
Appraisal by Comptroller; expenses of consolidated association; sale and
resale of shares; State appraisal and consolidation law
If, within ninety days from the date of consummation of the
consolidation, for any reason one or more of the appraisers is not selected as
herein provided, or the appraisers fail to determine the value of such shares,
the Comptroller shall upon written request of any interested party cause an
appraisal to be made which shall be final and binding on all parties. The
expenses of the Comptroller in making the reappraisal or the appraisal, as the
case may be, shall be paid by the consolidated banking association. The value of
the shares ascertained shall be promptly paid to the dissenting shareholders by
the consolidated banking association. Within thirty days after payment has been
made to all dissenting shareholders as provided for in this section the shares
of stock of the consolidated banking association which would have been delivered
to such dissenting shareholders had they not requested payment shall be sold by
the consolidated banking association at an advertised public auction, unless
some other method of sale is approved by the Comptroller, and the consolidated
banking association shall have the right to purchase any of such shares at such
public auction, if it is the highest bidder therefor, for the purpose of
reselling such shares within thirty days thereafter to such person or persons
and at such price not less than par as its board of directors by resolution may
determine. If the shares are sold at public auction at a price greater than the
amount paid to the dissenting shareholders the excess in such sale price shall
be paid to such shareholders. The appraisal of such shares of stock in any State
bank shall be determined in the manner prescribed by the law of the State in
such cases, rather than as provided in this section, if such provision is made
in the State law; and no such consolidation shall be in contravention of the law
of the State under which such bank is incorporated.
PART II. INFORMATION NOT REQUIRED IN PROSPECTUS
Item 20. Indemnification of Directors and Officers.
The Louisiana Business Corporation Law ("LBCL") contains several
provisions that directly affect the liability of officers and directors of
Louisiana corporations to the corporations and shareholders whom they serve.
Section 83 of the LBCL permits Louisiana corporations to indemnify officers and
directors, as well as certain other individuals who act on behalf of such
corporations. Sections 91 and 92 of the LBCL set forth the liability of officers
and directors of Louisiana corporations.
Section 91 of the LBCL provides that officers and directors of Louisiana
corporations are fiduciaries with respect to the corporation and its
shareholders and requires that they discharge the duties of their positions as
such in good faith and with the diligence, care, judgment and skill which
ordinarily prudent men would exercise under similar circumstances in like
positions. Section 91 specifically provides that it is not intended to derogate
from any indemnification permitted under Section 83, discussed below.
Section 92 of the LBCL limits the liability of officers and directors
with respect to certain matters, but imposes personal liability for certain
prohibited actions, such as an impermissible dividend or the knowing issuance of
shares in violation of the LBCL. Paragraph E of Section 92 permits a director,
in the performance of his duties, to be fully protected from liability in
relying in good faith on the records of the corporation and upon such
information, opinions, reports or statements presented to the corporation, the
board of directors, or any committee of the board by any of the corporation's
officers or employees, or by any committee of the board of directors, or by any
counsel, appraiser, engineer or independent or certified public accountant
selected with reasonable care by the board of directors or any committee thereof
or any officer having the authority to make such a selection or by any other
person as to matters the directors reasonably believe are within such other
person's professional or expert competence and which person is selected with
reasonable care by the board of directors or any committee thereof or any
officer having the authority to make such selection.
Section 83 of the LBCL permits a Louisiana corporation to indemnify any
person who is or was a party or is threatened to be made a party to any action,
suit or proceeding by reason of the fact that he or she was a director, officer,
employee or agent of the corporation, or was serving at the request of the
corporation in one of those capacities for another business. Such persons may be
indemnified against expenses (including attorneys' fees), judgments, fines and
amounts paid in settlement actually and reasonably incurred by such persons in
connection with any such action as long as the indemnified party acted in good
faith and in a manner he or she reasonably believed to be in, or not opposed to,
the best interests of the corporation. With respect to criminal actions or
proceedings, the indemnified person must not only have acted in good faith and
in a manner believed to be in or not opposed to the best interest of the
corporation; he or she must also not have had any reasonable cause to believe
that his or her conduct was unlawful.
The LBCL treats suits by or in the right of the corporation, or
derivative suits, differently from other legal actions. Indemnification is not
permitted in a derivative action for any expenses if the individual seeking
indemnification is adjudged liable for negligence or misconduct in the
performance of his or her duty to the corporation unless specifically ordered by
the court. Otherwise, officers and directors may be indemnified in derivative
actions only with respect to expenses (including attorneys' fees) actually and
reasonably incurred in connection with the defense or settlement of the action.
Indemnification of officers and directors may only be made by the
corporation if the corporation has specifically authorized indemnification after
determining that the applicable standard of conduct has been met. This
determination may be made (i) by the board of directors by a majority vote of a
quorum consisting of directors who were not parties to such action, suit or
proceeding, or (ii) if such a quorum is not obtainable or a quorum of
disinterested directors so directs, by independent legal counsel, or (iii) by
the shareholders.
Indemnification of officers and directors against reasonable expenses is
mandatory under Section 83 of the LBCL to the extent the officer or director is
successful on the merits or in the defense of any action or suit against him
giving rise to a claim of indemnification.
Louisiana corporations are permitted to advance the costs of defense to
officers and directors with respect to claims for which they may be indemnified
under Section 83 of the LBCL. In order to advance such costs, however, such
procedure must be approved by the board of directors by a majority of a quorum
consisting of disinterested directors. In addition, a corporation may only
advance defense costs if it has received an undertaking from the officer or
director to repay the amounts advanced unless it is ultimately determined that
he or she is entitled to be indemnified as otherwise authorized by Section 83.
Louisiana corporations are also specifically permitted to procure
insurance on behalf of officers and directors and former officers and directors
for actions taken in their capacities as such. Insurance coverage may be broader
than the limits of indemnification under Section 83. Also, the indemnification
provided for in Section 83 is not exclusive of any other rights to
indemnification, whether arising from contracts or otherwise.
Hibernia has adopted an indemnification provision to its articles of
incorporation that provides for indemnification of officers and directors under
the circumstances permitted by Louisiana law. Hibernia's indemnification
provision requires indemnification, except as prohibited by law, of officers and
directors of Hibernia or any of its wholly-owned subsidiaries against expenses,
judgments, fines and amounts paid in settlement actually and reasonably incurred
in connection with any action, suit or proceeding, whether civil or criminal,
administrative or investigative (including any action by or in the right of
Hibernia) by reason of the fact that the person served as an officer or director
of Hibernia or one of its subsidiaries. Officers and directors may only be
indemnified against expenses in cases brought by the officer or director against
Hibernia if the action is a claim for indemnification, the officer or director
prevails in the action, or indemnification is included in any settlement or is
awarded by the court. The indemnification provision further requires Hibernia to
advance defense costs to officers and directors in such suits and proceedings
upon receipt of an undertaking to repay such expenses unless it is ultimately
determined that the officer or director is entitled to indemnification as
authorized by the Article.
Hibernia's Articles of Incorporation further provide that no director or
officer of Hibernia shall be personally liable to Hibernia or its shareholder
for monetary damages for breach of fiduciary duty as an officer or director.
This provision is limited to those circumstances in which such a limitation of
liability is permitted under applicable law and would not be operative in any
circumstances in which the law prohibits such an limitation.
The Articles of Association of the HNB and HNBT include indemnification
and limitation of liability provisions identical to those adopted by Hibernia
and described above.
Item 21. Exhibits and Financial Statement Schedules.
EXHIBIT DESCRIPTION
2 Agreement and Plan of Merger, included as Appendix A
to the Proxy Statement/Prospectus.
3.1 Exhibit 3.1 to the Annual Report on Form 10-K for the fiscal
year ended December 31, 1996,filed with the Commission by
the Registrant (Commission File No. 0-7220) is hereby
incorporated by reference (Articles of Incorporation of
the Registrant, as amended to date).
3.2 Exhibit 3.2 to the Annual Report on Form 10-K for the
fiscal year ended December 31, 1996, filed with the
Commission by the Registrant (Commission File No. 0-7220)
is hereby incorporated by reference (By-Laws of the
Registrant, as amended to date).
5 Opinion of Patricia C. Meringer, Esq. re: legality of
shares.
8 Opinion of Watkins Ludlam & Stennis, P.A. regarding certain
tax matters, included as Appendix C to the Proxy Statement
/Prospectus.
10.13 Exhibit 10.13 to the Annual Report on Form 10-K for the
fiscal year ended December 31, 1988, filed with the
Commission by the Registrant Commission File No. (0- 7220)
is hereby incorporated by reference (Deferred Compensation
Plan for Outside Directors of Hibernia Corporation and its
Subsidiaries, as amended to date).
10.14 Exhibit 10.14 to the Annual Report on Form 10-K for the
fiscal year ended December 31, 1990, filed with the
Commission by the Registrant (Commission File No.0- 7220)
is hereby incorporated by reference (Hibernia Corporation
Executive Life Insurance Plan).
10.16 Exhibit 4.7 to the Registration Statement on Form S-8
filed with the Commission by the Registrant (Registration
No. 33-26871) is hereby incorporated by reference
(Hibernia Corporation 1987 Stock Option Plan, as amended
to date).
10.34 Exhibit C to the Registrant's definitive proxy statement
dated August 17, 1992 relating to its 1992 Annual Meeting
of Shareholders filed by the Registrant with the
Commission is hereby incorporated by reference (Long-Term
Incentive Plan of Hibernia Corporation).
10.35 Exhibit A to the Registrant's definitive proxy statement
dated March 23, 1993 relating to its 1993 Annual Meeting
of Shareholders filed by the Registrant with the
Commission is hereby incorporated by reference (1993
Director Stock Option Plan of Hibernia Corporation).
10.36 Exhibit 10.36 to the Registrant's Annual Report on Form
10-K for the fiscal year ended December 31, 1993 filed
with the Commission (Commission File No. 0-7220) is
hereby incorporated by reference (Employment agreement
between Stephen A. Hansel and Hibernia Corporation).
10.37 Exhibit 10.37 to the Registrant's Annual Report on Form
19-K for the fiscal year ended December 31, 1994 filed
with the Commission (Commission File No. 0-7220) is
hereby incorporated by reference (Employment agreement
between J. Herbert Boydstun and Hibernia Corporation).
10.38 Exhibit 10.38 to the Registrant's Annual Report on Form 10-K
for the fiscal year ended December 31, 1993 filed with
the Commission (Commission File No. 0-7220) is hereby
incorporated by reference (Employment agreement between
E. R. "Bo" Campbell and Hibernia Corporation).
10.39 Exhibit 10.39 to the Registrant's Annual report on Form 10-K
for the fiscal year ended December 31, 1996 filed with the
Commission (Commission File No. 0-7220) is hereby
incorporated by reference (Employment Agreement between
B. D. Flurry and Hibernia Corporation).
10.40 Exhibit 10.40 to the Registrant's Annual Report on Form
10-K for the fiscal year ended December 31, 1996 filed
with the Commission (Commission File No. 0-7220) is
hereby incorporated by reference (Split-Dollar Life
Insurance Plan of the Registrant effective as of July
1996).
10.41 Exhibit 10.41 to the Registrant's Annual Report on Form
10-K for the fiscal year ended December 31, 1996 filed
with the Commission (Commission File No. 0-7220) is
hereby incorporated by reference (Nonqualified Deferred
Compensation Plan for Key Management Employees of the
Registrant effective as of July 1996).
10.42 Exhibit 10.42 to the Registrant's Annual Report on Form
10-K for the fiscal year ended December 31, 1996 filed
with the Commission (Commission File No. 0-7220) is
hereby incorporated by reference (Supplemental Stock
Compensation Plan for Key Management Employees effective
as of July 1996).
10.43 Exhibit 10.43 to the Registrant's Annual Report on Form
10-K for the fiscal year ended December 31, 1996 filed
with the Commission (Commission No. 0-7220) is hereby
incorporated by reference (Nonqualified Target Benefit
(Deferred Award) Plan of the Registrant effective as of
July 1996).
13 Exhibit 13 to the Registrant's Annual Report on Form 10-K
for the fiscal year ended December 31, 1996 filed with the
Commission (Commission File No. 0-7220) is hereby
incorporated by reference (1996 Annual Report to
security holders of the Registrant).
21 Exhibit 21 to the Annual Report on Form 10-K of the
Registrant for the fiscal year ended December 31, 1996
filed with the Commission (Commission File No. 0-7220)
is hereby incorporated by reference (Subsidiaries of
the Registrant).
23.1 Consent of Patricia C. Meringer, Esq., (included with
Exhibit 5).
23.2 Consent of Watkins Ludlam & Stennis, P.A.
23.3 Consent of Ernst & Young LLP.
23.4 Consent of Chase Securities Inc.
23.5 Consent of Deloitte & Touche LLP.
24 Powers of Attorney of directors of Hibernia Corporation,
contained on page S- 1 of the Registration Statement.
99.1 Form of Proxy of ArgentBank.
99.2 Opinion of Chase Securities Inc. included as Appendix B to
the Proxy Statement/Prospectus.
99.3 Stock Option Agreement between Hibernia Corporation and
ArgentBank included in Appendix A to the Proxy Statement/
Prospectus at page A-52 to the Proxy Statement/Prospectus.
Item 22. Undertakings.
The undersigned registrant hereby undertakes:
(1) To file, during any period in which offers or sales are being made,
a post-effective amendment to this registration statement:
(i) To include any prospectus required by Section 10(a)(3)
of the Securities Act of 1933;
(ii) To reflect in the prospectus any facts or events arising
after the effective date of the registration statement (or the most recent
post-effective amendment thereof) which, individually or in the aggregate,
represent a fundamental change in the information set forth in the registration
statement.
(iii) To include any material information with respect to the
plan of distribution not previously disclosed in the registration statement or
any material change to such information in the registration statement.
(2) That, for the purpose of determining any liability under the
Securities Act of 1933, each such post-effective amendment shall be deemed to be
a new registration statement relating to the securities offered therein, and the
offering of such securities at that time shall be deemed to be the initial bona
fide offering thereof;
(3) To remove from registration by means of a post-effective amendment
any of the securities being registered which remain unsold at the termination of
the offering;
(4) That, for purposes of determining any liability under the Securities
Act of 1933, each filing of Hibernia's annual report pursuant to section 13(a)
or section 15(d) of the Securities Exchange Act of 1934 (and, where applicable,
each filing of an employee benefit plan's annual report pursuant to section
15(d) of the Securities Exchange Act of 1934) that is incorporated by reference
in the registration statement will be deemed to be a new registration statement
relating to the securities offered therein, and the offering of such securities
at that time will be deemed to be the initial bona fide offering thereof;
(5) To respond to requests for information that is incorporated by
reference into the prospectus pursuant to Item 4, 10(b), 11 or 13 of this Form,
within one business day of receipt of such request, and to send the incorporated
documents by first class mail or other equally prompt means. This includes
information contained in documents filed subsequent to the effective date of the
Registration Statement through the date of responding to the request;
(6) To supply by means of a post-effective amendment all information
concerning a transaction, and the company being acquired involved therein, that
was not the subject of and included in the Registration Statement when it became
effective; and
(7) That insofar as indemnification for liabilities arising under the
Securities Act of 1933 may be permitted to directors, officers and controlling
persons of Hibernia pursuant to the foregoing provisions, or otherwise, Hibernia
has been advised that in the opinion of the Securities and Exchange Commission
such indemnification is against public policy as expressed in the Securities Act
of 1933 and is, therefore, unenforceable.
In the event that a claim for indemnification against such liabilities
(other than the payment of the expenses incurred or paid by a director, officer
or controlling person of Hibernia in the successful defense of any action, suit
or proceeding) is asserted by such director, officer, or controlling person in
connection with the securities being registered, Hibernia will, unless in the
opinion of its counsel the matter has been settled by controlling precedent,
submit to a court of appropriate jurisdiction the question whether such
indemnification by it is against public policy as expressed in the Securities
Act of 1933 and will be governed by the final adjudication of such issue.
SIGNATURES
Pursuant to the requirements of the Securities Act of 1933, the
Registrant hereby certifies that it has reasonable grounds to believe that it
meets all of the requirements for filing on Form S-4 and has duly caused this
Registration Statement to be signed on its behalf by the undersigned, thereunto
duly authorized, in the City of New Orleans, State of Louisiana, on December 2,
1997.
HIBERNIA CORPORATION
By: s/PATRICIA C. MERINGER
Patricia C. Meringer
Senior Vice President and Corporate Counsel
Pursuant to the requirements of the Securities Act of 1933, the
Registration Statement has been signed by the following persons in the
capacities indicated on December 2, 1997.
Signatures Title
*
_____________________________ Chairman of the Board
Robert H. Boh
*
_____________________________ President and Chief Executive
Stephen A. Hansel Officer and Director
*
_____________________________ Chief Financial Officer
Marsha M. Gassan
*
_____________________________ Chief Accounting Officer
Ron E. Samford, Jr.
*
_____________________________ Director
J. Herbert Boydstun
*
_____________________________ Director
J. Terrell Brown
*
_____________________________ Director
E. R. Campbell
*
_____________________________ Director
Richard W. Freeman, Jr.
*
_____________________________ Director
Dick H. Hearin
*
_____________________________ Director
Robert T. Holleman
*
_____________________________ Director
Elton R. King
*
_____________________________ Director
Sidney W. Lassen
*
_____________________________ Director
Laura A. Leach
*
_____________________________ Director
James R. Murphy
*
_____________________________ Director
Donald J. Nalty
*
_____________________________ Director
William C. O'Malley
*
_____________________________ Director
Robert T. Ratcliff
*
_____________________________ Director
H. Duke Shackelford
*
_____________________________ Director
Janee M. Tucker
*
_____________________________ Director
Virginia Eason Weinmann
*
_____________________________ Director
Robert E. Zetzmann
*By: /s/ PATRICIA C. MERINGER
Patricia C. Meringer
Attorney-in-Fact
EXHIBIT INDEX
Exhibit
5 Opinion of Patricia C. Meringer, Esq.
23.1 Consent of Patricia C. Meringer, Esq., included with
Exhibit 5.
23.2 Consent of Watkins Ludlam & Stennis, P.A.
23.3 Consent of Ernst & Young LLP
23.4 Consent of Chase Securities Inc.
23.5 Consent of Deloitte & Touche, L.L.P.
24 Powers of Attorney
99.1 Form of Proxy of ArgentBank
99.2 Opinion of Chase Securities Inc.
EXHIBIT 5
December 1, 1997
Securities and Exchange Commission
450 Fifth Street, N.W.
Washington, D.C. 20549
Ladies and Gentlemen:
I am Senior Vice President and Corporate Counsel of Hibernia Corporation
(the "Company") and am delivering this opinion in connection with the
registration by Hibernia of shares of Class A Common Stock (the "Shares) to be
issued by Hibernia in a proposed merger (the "Merger") between Hibernia National
Bank, a subsidiary of Hibernia ("HNB) and ArgentBank ("ArgentBank") in which the
shareholders of ArgentBank will receive the Shares in exchange for their shares
of common stock of ArgentBank, to which registration statement (the
"Registration Statement") this opinion is attached. The Shares will be reserved
for issuance upon the closing of the Merger. The Shares will be issued to
shareholders of ArgentBank upon consummation of the Merger pursuant to the
registration statement after it has been declared effective by the Securities
and Exchange Commission.
In furnishing this opinion, I have examined such documents and have made
such investigation of matters of fact and law as I have deemed necessary or
appropriate to provide a basis for the opinions set forth herein. In such
examination and investigation, I have assumed the genuineness of all signatures,
the legal capacity of natural persons, the authenticity of all documents
submitted as originals and the conformity to original documents of all documents
submitted as certified or photostatic copies.
In rendering this opinion, I do not express any opinion concerning any
law other than the law of the State of Louisiana and the federal law of the
United States, and I do not express any opinion, either implicitly or otherwise,
on any issue not expressly addressed below.
Based upon and limited by the foregoing, and based upon legal
considerations which I deem relevant and upon laws or regulations in effect as
of the date hereof, I am of the opinion that:
1. Hibernia Corporation has been duly incorporated and is validly
existing and in good standing under the laws of the State of Louisiana.
2. The Shares have been duly authorized and either are, or, upon
issuance thereof pursuant to the terms of the offering thereof, will be, validly
issued, fully paid and non-assessable.
I hereby expressly consent to the inclusion of this Opinion as exhibit
to the Registration Statement and to the reference to this Opinion therein.
This opinion is being furnished to you pursuant to the filing of the
Registration Statement and may not be relied upon by any other person or used
for any other purpose, except as provided for in the preceding paragraph.
Very truly yours,
/s/ PATRICIA C. MERINGER
Patricia C. Meringer
Senior Vice President
and Corporate Counsel
EXHIBIT 23.2
CONSENT OF WATKINS LUDLAM & STENNIS, P.A.
Consent of Counsel
We hereby consent to including a copy of our firm's opinion letter as an
exhibit to the Agreement and Plan of Merger and/or as an Exhibit in the
Registration Statement on Form S-4 for the proposed transaction and by making
reference to us and our opinion in the Proxy Statement/Prospectus forming a part
of the Registration Statement.
Sincerely,
/s WATKINS LUDLAM & STENNIS, P.A.
Cheryn L. Netz
EXHIBIT 23.3
CONSENT OF ERNST & YOUNG LLP
Consent of Independent Auditors
We consent to the reference to our firm under the caption "Experts" in
the Registration Statement (Form S-4) and related Prospectus of Hibernia
Corporation for the registration of 13,317,236 shares of its common stock to be
issued pursuant to the proposed merger of Hibernia with ArgentBank and to the
incorporation by reference to our report dated January 15, 1996, with respect to
the consolidated financial statements of Hibernia Corporation incorporated by
reference in its Annual Report (Form 10-K) for the year ended December 31, 1996
filed with the Securities Exchange Commission.
s/ERNST & YOUNG LLP
New Orleans, Louisiana
December 1, 1997
EXHIBIT 23.4
CONSENT OF CHASE SECURITIES INC.
Consent of Financial Advisor
Gentlemen:
We hereby consent to the inclusion in the Joint Proxy Statement/Prospectus
forming part of this Registration Statement on Form S-4 of our Opinion to the
Board of Directors of ArgentBank attached as an appendix to such Joint Proxy
Statement/Prospectus and the reference to such opinion and to our firm in such
Joint Proxy Statement/Prospectus thereof.
/sCHASE SECURITIES INC.
J. Michael Anderson
Vice President
EXHIBIT 23.5
CONSENT OF DELOITTE & TOUCHE L.L.P.
Consent of Independent Auditor (Argent Bank)
We consent to the use in this Registration Statement of Hibernia
Corporation on Form S-4 of our report dated January 17, 1997, appearing in the
Prospectus, which is part of this Registration Statement.
We also consent to the reference to us under the heading "Experts" in
such Prospectus.
/s DELOITTE & TOUCHE L.L.P.
New Orleans, Louisiana
December 1, 1997
EXHIBIT 24
POWERS OF ATTORNEY
P0WER OF ATTORNEY
KNOW ALL MEN BY THESE PRESENTS, that the undersigned Chairman and
Director of Hibernia Corporation, a Louisiana corporation (the "Corporation"),
does hereby name, constitute and appoint Marsha M. Gassan, Patricia C. Meringer
and Gary L. Ryan, and each of them (with full power to each of them to act
alone), his true and lawful agents and attorneys-in-fact, for him and on his
behalf and in his name, place and stead, in any and all capacities, to sign,
execute, acknowledge, deliver, and file (a) with the Securities and Exchange
Commission (or any other governmental or regulatory authority), a Registration
Statement on Form S-4 (or other appropriate form) and any and all amendments
(including post-effective amendments) thereto, with any and all exhibits and any
and all other documents required to be filed with respect thereto or in
connection therewith, relating to the registration under the Securities Act of
1933 of Common Stock of the Corporation to be issued in the merger between
Hibernia National Bank (the "Bank") and ArgentBank ("ArgentBank") wherein the
Corporation agrees to exchange shares of its common stock for all of the
outstanding shares of common stock of ArgentBank and merge ArgentBank into the
Bank, authorized by resolutions adopted by the Board of Directors on July 23,
1997, and (b) with the securities agencies or officials of various
jurisdictions, all applications, qualifications, registrations or exemptions
relating to such offering under the laws of any such jurisdiction, including any
amendments thereto or other documents required to be filed with respect thereto
or in connection therewith, granting unto said agents and attorneys, and each of
them, full power and authority to do and perform each and every act and thing
requisite and necessary to be done in and about the premises in order to
effectuate the same as fully to all intents and purposes as the undersigned
might or could do if personally present, and the undersigned hereby ratifies and
confirms all that said agents and attorneys-in-fact, or any of them may lawfully
do or cause to be done by virtue hereof.
IN WITNESS WHEREOF, the undersigned has hereunto set his hand on this
23rd day of July, 1997.
s/ROBERT H. BOH
Robert H. Boh
Chairman and Director
HIBERNIA CORPORATION
POWER OF ATTORNEY
KNOW ALL MEN BY THESE PRESENTS, that the undersigned director of
Hibernia Corporation, a Louisiana corporation (the "Corporation"), does hereby
name, constitute and appoint Marsha M. Gassan, Patricia C. Meringer and Gary L.
Ryan, and each of them (with full power to each of them to act alone), his true
and lawful agents and attorneys-in-fact, for him and on his behalf and in his
name, place and stead, in any and all capacities, to sign, execute, acknowledge,
deliver, and file (a) with the Securities and Exchange Commission (or any other
governmental or regulatory authority), a Registration Statement on Form S-4 (or
other appropriate form) and any and all amendments (including post-effective
amendments) thereto, with any and all exhibits and any and all other documents
required to be filed with respect thereto or in connection therewith, relating
to the registration under the Securities Act of 1933 of Common Stock of the
Corporation to be issued in the merger between Hibernia National Bank (the
"Bank") and ArgentBank ("ArgentBank") wherein the Corporation agrees to exchange
shares of its common stock for all of the outstanding shares of common stock of
ArgentBank and merge ArgentBank into the Bank, authorized by resolutions adopted
by the Board of Directors on July 23, 1997, and (b) with the securities agencies
or officials of various jurisdictions, all applications, qualifications,
registrations or exemptions relating to such offering under the laws of any such
jurisdiction, including any amendments thereto or other documents required to be
filed with respect thereto or in connection therewith, granting unto said agents
and attorneys, and each of them, full power and authority to do and perform each
and every act and thing requisite and necessary to be done in and about the
premises in order to effectuate the same as fully to all intents and purposes as
the undersigned might or could do if personally present, and the undersigned
hereby ratifies and confirms all that said agents and attorneys-in-fact, or any
of them may lawfully do or cause to be done by virtue hereof.
IN WITNESS WHEREOF, the undersigned has hereunto set his hand on this
23rd day of July, 1997.
s/J. HERBERT BOYDSTUN
J. Herbert Boydstun
Director
HIBERNIA CORPORATION
POWER OF ATTORNEY
KNOW ALL MEN BY THESE PRESENTS, that the undersigned director of
Hibernia Corporation, a Louisiana corporation (the "Corporation"), does hereby
name, constitute and appoint Marsha M. Gassan, Patricia C. Meringer and Gary L.
Ryan, and each of them (with full power to each of them to act alone), his true
and lawful agents and attorneys-in-fact, for him and on his behalf and in his
name, place and stead, in any and all capacities, to sign, execute, acknowledge,
deliver, and file (a) with the Securities and Exchange Commission (or any other
governmental or regulatory authority), a Registration Statement on Form S-4 (or
other appropriate form) and any and all amendments (including post-effective
amendments) thereto, with any and all exhibits and any and all other documents
required to be filed with respect thereto or in connection therewith, relating
to the registration under the Securities Act of 1933 of Common Stock of the
Corporation to be issued in the merger between Hibernia National Bank (the
"Bank") and ArgentBank ("ArgentBank") wherein the Corporation agrees to exchange
shares of its common stock for all of the outstanding shares of common stock of
ArgentBank and merge ArgentBank into the Bank, authorized by resolutions adopted
by the Board of Directors on July 23, 1997, and (b) with the securities agencies
or officials of various jurisdictions, all applications, qualifications,
registrations or exemptions relating to such offering under the laws of any such
jurisdiction, including any amendments thereto or other documents required to be
filed with respect thereto or in connection therewith, granting unto said agents
and attorneys, and each of them, full power and authority to do and perform each
and every act and thing requisite and necessary to be done in and about the
premises in order to effectuate the same as fully to all intents and purposes as
the undersigned might or could do if personally present, and the undersigned
hereby ratifies and confirms all that said agents and attorneys-in-fact, or any
of them may lawfully do or cause to be done by virtue hereof.
IN WITNESS WHEREOF, the undersigned has hereunto set his hand on this
23rd day of July, 1997.
s/J. TERRELL BROWN
J. Terrell Brown
Director
HIBERNIA CORPORATION
POWER OF ATTORNEY
KNOW ALL MEN BY THESE PRESENTS, that the undersigned director of
Hibernia Corporation, a Louisiana corporation (the "Corporation"), does hereby
name, constitute and appoint Marsha M. Gassan, Patricia C. Meringer and Gary L.
Ryan, and each of them (with full power to each of them to act alone), her true
and lawful agents and attorneys-in-fact, for her and on her behalf and in her
name, place and stead, in any and all capacities, to sign, execute, acknowledge,
deliver, and file (a) with the Securities and Exchange Commission (or any other
governmental or regulatory authority), a Registration Statement on Form S-4 (or
other appropriate form) and any and all amendments (including post-effective
amendments) thereto, with any and all exhibits and any and all other documents
required to be filed with respect thereto or in connection therewith, relating
to the registration under the Securities Act of 1933 of Common Stock of the
Corporation to be issued in the merger between Hibernia National Bank (the
"Bank") and ArgentBank ("ArgentBank") wherein the Corporation agrees to exchange
shares of its common stock for all of the outstanding shares of common stock of
ArgentBank and merge ArgentBank into the Bank, authorized by resolutions adopted
by the Board of Directors on July 23, 1997, and (b) with the securities agencies
or officials of various jurisdictions, all applications, qualifications,
registrations or exemptions relating to such offering under the laws of any such
jurisdiction, including any amendments thereto or other documents required to be
filed with respect thereto or in connection therewith, granting unto said agents
and attorneys, and each of them, full power and authority to do and perform each
and every act and thing requisite and necessary to be done in and about the
premises in order to effectuate the same as fully to all intents and purposes as
the undersigned might or could do if personally present, and the undersigned
hereby ratifies and confirms all that said agents and attorneys-in-fact, or any
of them may lawfully do or cause to be done by virtue hereof.
IN WITNESS WHEREOF, the undersigned has hereunto set his hand on this
23rd day of July, 1997.
s/JANEE M. TUCKER
Janee M. Tucker
Director
HIBERNIA CORPORATION
POWER OF ATTORNEY
KNOW ALL MEN BY THESE PRESENTS, that the undersigned director of
Hibernia Corporation, a Louisiana corporation (the "Corporation"), does hereby
name, constitute and appoint Marsha M. Gassan, Patricia C. Meringer and Gary L.
Ryan, and each of them (with full power to each of them to act alone), his true
and lawful agents and attorneys-in-fact, for him and on his behalf and in his
name, place and stead, in any and all capacities, to sign, execute, acknowledge,
deliver, and file (a) with the Securities and Exchange Commission (or any other
governmental or regulatory authority), a Registration Statement on Form S-4 (or
other appropriate form) and any and all amendments (including post-effective
amendments) thereto, with any and all exhibits and any and all other documents
required to be filed with respect thereto or in connection therewith, relating
to the registration under the Securities Act of 1933 of Common Stock of the
Corporation to be issued in the merger between Hibernia National Bank (the
"Bank") and ArgentBank ("ArgentBank") wherein the Corporation agrees to exchange
shares of its common stock for all of the outstanding shares of common stock of
ArgentBank and merge ArgentBank into the Bank, authorized by resolutions adopted
by the Board of Directors on July 23, 1997, and (b) with the securities agencies
or officials of various jurisdictions, all applications, qualifications,
registrations or exemptions relating to such offering under the laws of any such
jurisdiction, including any amendments thereto or other documents required to be
filed with respect thereto or in connection therewith, granting unto said agents
and attorneys, and each of them, full power and authority to do and perform each
and every act and thing requisite and necessary to be done in and about the
premises in order to effectuate the same as fully to all intents and purposes as
the undersigned might or could do if personally present, and the undersigned
hereby ratifies and confirms all that said agents and attorneys-in-fact, or any
of them may lawfully do or cause to be done by virtue hereof.
IN WITNESS WHEREOF, the undersigned has hereunto set his hand on this
23rd day of July, 1997.
s/RICHARD W. FREEMAN, JR.
Richard W. Freeman, Jr.
Director
HIBERNIA CORPORATION
POWER OF ATTORNEY
KNOW ALL MEN BY THESE PRESENTS, that the undersigned director of
Hibernia Corporation, a Louisiana corporation (the "Corporation"), does hereby
name, constitute and appoint Marsha M. Gassan, Patricia C. Meringer and Gary L.
Ryan, and each of them (with full power to each of them to act alone), his true
and lawful agents and attorneys-in-fact, for him and on his behalf and in his
name, place and stead, in any and all capacities, to sign, execute, acknowledge,
deliver, and file (a) with the Securities and Exchange Commission (or any other
governmental or regulatory authority), a Registration Statement on Form S-4 (or
other appropriate form) and any and all amendments (including post-effective
amendments) thereto, with any and all exhibits and any and all other documents
required to be filed with respect thereto or in connection therewith, relating
to the registration under the Securities Act of 1933 of Common Stock of the
Corporation to be issued in the merger between Hibernia National Bank (the
"Bank") and ArgentBank ("ArgentBank") wherein the Corporation agrees to exchange
shares of its common stock for all of the outstanding shares of common stock of
ArgentBank and merge ArgentBank into the Bank, authorized by resolutions adopted
by the Board of Directors on July 23, 1997, and (b) with the securities agencies
or officials of various jurisdictions, all applications, qualifications,
registrations or exemptions relating to such offering under the laws of any such
jurisdiction, including any amendments thereto or other documents required to be
filed with respect thereto or in connection therewith, granting unto said agents
and attorneys, and each of them, full power and authority to do and perform each
and every act and thing requisite and necessary to be done in and about the
premises in order to effectuate the same as fully to all intents and purposes as
the undersigned might or could do if personally present, and the undersigned
hereby ratifies and confirms all that said agents and attorneys-in-fact, or any
of them may lawfully do or cause to be done by virtue hereof.
IN WITNESS WHEREOF, the undersigned has hereunto set his hand on this
23rd day of July, 1997.
s/ELTON R. KING
Elton R. King
Director
HIBERNIA CORPORATION
POWER OF ATTORNEY
KNOW ALL MEN BY THESE PRESENTS, that the undersigned director of
Hibernia Corporation, a Louisiana corporation (the "Corporation"), does hereby
name, constitute and appoint Marsha M. Gassan, Patricia C. Meringer and Gary L.
Ryan, and each of them (with full power to each of them to act alone), his true
and lawful agents and attorneys-in-fact, for him and on his behalf and in his
name, place and stead, in any and all capacities, to sign, execute, acknowledge,
deliver, and file (a) with the Securities and Exchange Commission (or any other
governmental or regulatory authority), a Registration Statement on Form S-4 (or
other appropriate form) and any and all amendments (including post-effective
amendments) thereto, with any and all exhibits and any and all other documents
required to be filed with respect thereto or in connection therewith, relating
to the registration under the Securities Act of 1933 of Common Stock of the
Corporation to be issued in the merger between Hibernia National Bank (the
"Bank") and ArgentBank ("ArgentBank") wherein the Corporation agrees to exchange
shares of its common stock for all of the outstanding shares of common stock of
ArgentBank and merge ArgentBank into the Bank, authorized by resolutions adopted
by the Board of Directors on July 23, 1997, and (b) with the securities agencies
or officials of various jurisdictions, all applications, qualifications,
registrations or exemptions relating to such offering under the laws of any such
jurisdiction, including any amendments thereto or other documents required to be
filed with respect thereto or in connection therewith, granting unto said agents
and attorneys, and each of them, full power and authority to do and perform each
and every act and thing requisite and necessary to be done in and about the
premises in order to effectuate the same as fully to all intents and purposes as
the undersigned might or could do if personally present, and the undersigned
hereby ratifies and confirms all that said agents and attorneys-in-fact, or any
of them may lawfully do or cause to be done by virtue hereof.
IN WITNESS WHEREOF, the undersigned has hereunto set his hand on this
23rd day of July, 1997.
s/STEPHEN A. HANSEL
Stephen A. Hansel
President, Chief Executive Officer
and Director
HIBERNIA CORPORATION
POWER OF ATTORNEY
KNOW ALL MEN BY THESE PRESENTS, that the undersigned director of
Hibernia Corporation, a Louisiana corporation (the "Corporation"), does hereby
name, constitute and appoint Marsha M. Gassan, Patricia C. Meringer and Gary L.
Ryan, and each of them (with full power to each of them to act alone), his true
and lawful agents and attorneys-in-fact, for him and on his behalf and in his
name, place and stead, in any and all capacities, to sign, execute, acknowledge,
deliver, and file (a) with the Securities and Exchange Commission (or any other
governmental or regulatory authority), a Registration Statement on Form S-4 (or
other appropriate form) and any and all amendments (including post-effective
amendments) thereto, with any and all exhibits and any and all other documents
required to be filed with respect thereto or in connection therewith, relating
to the registration under the Securities Act of 1933 of Common Stock of the
Corporation to be issued in the merger between Hibernia National Bank (the
"Bank") and ArgentBank ("ArgentBank") wherein the Corporation agrees to exchange
shares of its common stock for all of the outstanding shares of common stock of
ArgentBank and merge ArgentBank into the Bank, authorized by resolutions adopted
by the Board of Directors on July 23, 1997, and (b) with the securities agencies
or officials of various jurisdictions, all applications, qualifications,
registrations or exemptions relating to such offering under the laws of any such
jurisdiction, including any amendments thereto or other documents required to be
filed with respect thereto or in connection therewith, granting unto said agents
and attorneys, and each of them, full power and authority to do and perform each
and every act and thing requisite and necessary to be done in and about the
premises in order to effectuate the same as fully to all intents and purposes as
the undersigned might or could do if personally present, and the undersigned
hereby ratifies and confirms all that said agents and attorneys-in-fact, or any
of them may lawfully do or cause to be done by virtue hereof.
IN WITNESS WHEREOF, the undersigned has hereunto set his hand on this
23rd day of July, 1997.
s/DICK H. HEARIN
Dick H. Hearin
Director
HIBERNIA CORPORATION
POWER OF ATTORNEY
KNOW ALL MEN BY THESE PRESENTS, that the undersigned director of
Hibernia Corporation, a Louisiana corporation (the "Corporation"), does hereby
name, constitute and appoint Marsha M. Gassan, Patricia C. Meringer and Gary L.
Ryan, and each of them (with full power to each of them to act alone), his true
and lawful agents and attorneys-in-fact, for him and on his behalf and in his
name, place and stead, in any and all capacities, to sign, execute, acknowledge,
deliver, and file (a) with the Securities and Exchange Commission (or any other
governmental or regulatory authority), a Registration Statement on Form S-4 (or
other appropriate form) and any and all amendments (including post-effective
amendments) thereto, with any and all exhibits and any and all other documents
required to be filed with respect thereto or in connection therewith, relating
to the registration under the Securities Act of 1933 of Common Stock of the
Corporation to be issued in the merger between Hibernia National Bank (the
"Bank") and ArgentBank ("ArgentBank") wherein the Corporation agrees to exchange
shares of its common stock for all of the outstanding shares of common stock of
ArgentBank and merge ArgentBank into the Bank, authorized by resolutions adopted
by the Board of Directors on July 23, 1997, and (b) with the securities agencies
or officials of various jurisdictions, all applications, qualifications,
registrations or exemptions relating to such offering under the laws of any such
jurisdiction, including any amendments thereto or other documents required to be
filed with respect thereto or in connection therewith, granting unto said agents
and attorneys, and each of them, full power and authority to do and perform each
and every act and thing requisite and necessary to be done in and about the
premises in order to effectuate the same as fully to all intents and purposes as
the undersigned might or could do if personally present, and the undersigned
hereby ratifies and confirms all that said agents and attorneys-in-fact, or any
of them may lawfully do or cause to be done by virtue hereof.
IN WITNESS WHEREOF, the undersigned has hereunto set his hand on this
23rd day of July, 1997.
s/ROBERT T. HOLLEMAN
Robert T. Holleman
Director
HIBERNIA CORPORATION
POWER OF ATTORNEY
KNOW ALL MEN BY THESE PRESENTS, that the undersigned director of
Hibernia Corporation, a Louisiana corporation (the "Corporation"), does hereby
name, constitute and appoint Marsha M. Gassan, Patricia C. Meringer and Gary L.
Ryan, and each of them (with full power to each of them to act alone), her true
and lawful agents and attorneys-in-fact, for her and on her behalf and in her
name, place and stead, in any and all capacities, to sign, execute, acknowledge,
deliver, and file (a) with the Securities and Exchange Commission (or any other
governmental or regulatory authority), a Registration Statement on Form S-4 (or
other appropriate form) and any and all amendments (including post-effective
amendments) thereto, with any and all exhibits and any and all other documents
required to be filed with respect thereto or in connection therewith, relating
to the registration under the Securities Act of 1933 of Common Stock of the
Corporation to be issued in the merger between Hibernia National Bank (the
"Bank") and ArgentBank ("ArgentBank") wherein the Corporation agrees to exchange
shares of its common stock for all of the outstanding shares of common stock of
ArgentBank and merge ArgentBank into the Bank, authorized by resolutions adopted
by the Board of Directors on July 23, 1997, and (b) with the securities agencies
or officials of various jurisdictions, all applications, qualifications,
registrations or exemptions relating to such offering under the laws of any such
jurisdiction, including any amendments thereto or other documents required to be
filed with respect thereto or in connection therewith, granting unto said agents
and attorneys, and each of them, full power and authority to do and perform each
and every act and thing requisite and necessary to be done in and about the
premises in order to effectuate the same as fully to all intents and purposes as
the undersigned might or could do if personally present, and the undersigned
hereby ratifies and confirms all that said agents and attorneys-in-fact, or any
of them may lawfully do or cause to be done by virtue hereof.
IN WITNESS WHEREOF, the undersigned has hereunto set his hand on this
23rd day of July, 1997.
s/LAURA A. LEACH
Laura A. Leach
Director
HIBERNIA CORPORATION
POWER OF ATTORNEY
KNOW ALL MEN BY THESE PRESENTS, that the undersigned director of
Hibernia Corporation, a Louisiana corporation (the "Corporation"), does hereby
name, constitute and appoint Marsha M. Gassan, Patricia C. Meringer and Gary L.
Ryan, and each of them (with full power to each of them to act alone), his true
and lawful agents and attorneys-in-fact, for him and on his behalf and in his
name, place and stead, in any and all capacities, to sign, execute, acknowledge,
deliver, and file (a) with the Securities and Exchange Commission (or any other
governmental or regulatory authority), a Registration Statement on Form S-4 (or
other appropriate form) and any and all amendments (including post-effective
amendments) thereto, with any and all exhibits and any and all other documents
required to be filed with respect thereto or in connection therewith, relating
to the registration under the Securities Act of 1933 of Common Stock of the
Corporation to be issued in the merger between Hibernia National Bank (the
"Bank") and ArgentBank ("ArgentBank") wherein the Corporation agrees to exchange
shares of its common stock for all of the outstanding shares of common stock of
ArgentBank and merge ArgentBank into the Bank, authorized by resolutions adopted
by the Board of Directors on July 23, 1997, and (b) with the securities agencies
or officials of various jurisdictions, all applications, qualifications,
registrations or exemptions relating to such offering under the laws of any such
jurisdiction, including any amendments thereto or other documents required to be
filed with respect thereto or in connection therewith, granting unto said agents
and attorneys, and each of them, full power and authority to do and perform each
and every act and thing requisite and necessary to be done in and about the
premises in order to effectuate the same as fully to all intents and purposes as
the undersigned might or could do if personally present, and the undersigned
hereby ratifies and confirms all that said agents and attorneys-in-fact, or any
of them may lawfully do or cause to be done by virtue hereof.
IN WITNESS WHEREOF, the undersigned has hereunto set his hand on this
23rd day of July, 1997.
s/WILLIAM C. O'MALLEY
William C. O'Malley
Director
HIBERNIA CORPORATION
POWER OF ATTORNEY
KNOW ALL MEN BY THESE PRESENTS, that the undersigned director of
Hibernia Corporation, a Louisiana corporation (the "Corporation"), does hereby
name, constitute and appoint Marsha M. Gassan, Patricia C. Meringer and Gary L.
Ryan, and each of them (with full power to each of them to act alone), his true
and lawful agents and attorneys-in-fact, for him and on his behalf and in his
name, place and stead, in any and all capacities, to sign, execute, acknowledge,
deliver, and file (a) with the Securities and Exchange Commission (or any other
governmental or regulatory authority), a Registration Statement on Form S-4 (or
other appropriate form) and any and all amendments (including post-effective
amendments) thereto, with any and all exhibits and any and all other documents
required to be filed with respect thereto or in connection therewith, relating
to the registration under the Securities Act of 1933 of Common Stock of the
Corporation to be issued in the merger between Hibernia National Bank (the
"Bank") and ArgentBank ("ArgentBank") wherein the Corporation agrees to exchange
shares of its common stock for all of the outstanding shares of common stock of
ArgentBank and merge ArgentBank into the Bank, authorized by resolutions adopted
by the Board of Directors on July 23, 1997, and (b) with the securities agencies
or officials of various jurisdictions, all applications, qualifications,
registrations or exemptions relating to such offering under the laws of any such
jurisdiction, including any amendments thereto or other documents required to be
filed with respect thereto or in connection therewith, granting unto said agents
and attorneys, and each of them, full power and authority to do and perform each
and every act and thing requisite and necessary to be done in and about the
premises in order to effectuate the same as fully to all intents and purposes as
the undersigned might or could do if personally present, and the undersigned
hereby ratifies and confirms all that said agents and attorneys-in-fact, or any
of them may lawfully do or cause to be done by virtue hereof.
IN WITNESS WHEREOF, the undersigned has hereunto set his hand on this
23rd day of July, 1997.
s/SIDNEY W. LASSEN
Sidney W. Lassen
Director
HIBERNIA CORPORATION
POWER OF ATTORNEY
KNOW ALL MEN BY THESE PRESENTS, that the undersigned director of
Hibernia Corporation, a Louisiana corporation (the "Corporation"), does hereby
name, constitute and appoint Marsha M. Gassan, Patricia C. Meringer and Gary L.
Ryan, and each of them (with full power to each of them to act alone), his true
and lawful agents and attorneys-in-fact, for him and on his behalf and in his
name, place and stead, in any and all capacities, to sign, execute, acknowledge,
deliver, and file (a) with the Securities and Exchange Commission (or any other
governmental or regulatory authority), a Registration Statement on Form S-4 (or
other appropriate form) and any and all amendments (including post-effective
amendments) thereto, with any and all exhibits and any and all other documents
required to be filed with respect thereto or in connection therewith, relating
to the registration under the Securities Act of 1933 of Common Stock of the
Corporation to be issued in the merger between Hibernia National Bank (the
"Bank") and ArgentBank ("ArgentBank") wherein the Corporation agrees to exchange
shares of its common stock for all of the outstanding shares of common stock of
ArgentBank and merge ArgentBank into the Bank, authorized by resolutions adopted
by the Board of Directors on July 23, 1997, and (b) with the securities agencies
or officials of various jurisdictions, all applications, qualifications,
registrations or exemptions relating to such offering under the laws of any such
jurisdiction, including any amendments thereto or other documents required to be
filed with respect thereto or in connection therewith, granting unto said agents
and attorneys, and each of them, full power and authority to do and perform each
and every act and thing requisite and necessary to be done in and about the
premises in order to effectuate the same as fully to all intents and purposes as
the undersigned might or could do if personally present, and the undersigned
hereby ratifies and confirms all that said agents and attorneys-in-fact, or any
of them may lawfully do or cause to be done by virtue hereof.
IN WITNESS WHEREOF, the undersigned has hereunto set his hand on this
23rd day of July, 1997.
s/DONALD J. NALTY
Donald J. Nalty
Director
HIBERNIA CORPORATION
POWER OF ATTORNEY
KNOW ALL MEN BY THESE PRESENTS, that the undersigned director of
Hibernia Corporation, a Louisiana corporation (the "Corporation"), does hereby
name, constitute and appoint Marsha M. Gassan, Patricia C. Meringer and Gary L.
Ryan, and each of them (with full power to each of them to act alone), his true
and lawful agents and attorneys-in-fact, for him and on his behalf and in his
name, place and stead, in any and all capacities, to sign, execute, acknowledge,
deliver, and file (a) with the Securities and Exchange Commission (or any other
governmental or regulatory authority), a Registration Statement on Form S-4 (or
other appropriate form) and any and all amendments (including post-effective
amendments) thereto, with any and all exhibits and any and all other documents
required to be filed with respect thereto or in connection therewith, relating
to the registration under the Securities Act of 1933 of Common Stock of the
Corporation to be issued in the merger between Hibernia National Bank (the
"Bank") and ArgentBank ("ArgentBank") wherein the Corporation agrees to exchange
shares of its common stock for all of the outstanding shares of common stock of
ArgentBank and merge ArgentBank into the Bank, authorized by resolutions adopted
by the Board of Directors on July 23, 1997, and (b) with the securities agencies
or officials of various jurisdictions, all applications, qualifications,
registrations or exemptions relating to such offering under the laws of any such
jurisdiction, including any amendments thereto or other documents required to be
filed with respect thereto or in connection therewith, granting unto said agents
and attorneys, and each of them, full power and authority to do and perform each
and every act and thing requisite and necessary to be done in and about the
premises in order to effectuate the same as fully to all intents and purposes as
the undersigned might or could do if personally present, and the undersigned
hereby ratifies and confirms all that said agents and attorneys-in-fact, or any
of them may lawfully do or cause to be done by virtue hereof.
IN WITNESS WHEREOF, the undersigned has hereunto set his hand on this
23rd day of July, 1997.
s/ROBERT T. RATCLIFF
Robert T. Ratcliff
Director
HIBERNIA CORPORATION
POWER OF ATTORNEY
KNOW ALL MEN BY THESE PRESENTS, that the undersigned director of
Hibernia Corporation, a Louisiana corporation (the "Corporation"), does hereby
name, constitute and appoint Marsha M. Gassan, Patricia C. Meringer and Gary L.
Ryan, and each of them (with full power to each of them to act alone), his true
and lawful agents and attorneys-in-fact, for him and on his behalf and in his
name, place and stead, in any and all capacities, to sign, execute, acknowledge,
deliver, and file (a) with the Securities and Exchange Commission (or any other
governmental or regulatory authority), a Registration Statement on Form S-4 (or
other appropriate form) and any and all amendments (including post-effective
amendments) thereto, with any and all exhibits and any and all other documents
required to be filed with respect thereto or in connection therewith, relating
to the registration under the Securities Act of 1933 of Common Stock of the
Corporation to be issued in the merger between Hibernia National Bank (the
"Bank") and ArgentBank ("ArgentBank") wherein the Corporation agrees to exchange
shares of its common stock for all of the outstanding shares of common stock of
ArgentBank and merge ArgentBank into the Bank, authorized by resolutions adopted
by the Board of Directors on July 23, 1997, and (b) with the securities agencies
or officials of various jurisdictions, all applications, qualifications,
registrations or exemptions relating to such offering under the laws of any such
jurisdiction, including any amendments thereto or other documents required to be
filed with respect thereto or in connection therewith, granting unto said agents
and attorneys, and each of them, full power and authority to do and perform each
and every act and thing requisite and necessary to be done in and about the
premises in order to effectuate the same as fully to all intents and purposes as
the undersigned might or could do if personally present, and the undersigned
hereby ratifies and confirms all that said agents and attorneys-in-fact, or any
of them may lawfully do or cause to be done by virtue hereof.
IN WITNESS WHEREOF, the undersigned has hereunto set his hand on this
23rd day of July, 1997.
s/H. DUKE SHACKELFORD
H. Duke Shackelford
Director
HIBERNIA CORPORATION
POWER OF ATTORNEY
KNOW ALL MEN BY THESE PRESENTS, that the undersigned director of
Hibernia Corporation, a Louisiana corporation (the "Corporation"), does hereby
name, constitute and appoint Marsha M. Gassan, Patricia C. Meringer and Gary L.
Ryan, and each of them (with full power to each of them to act alone), his true
and lawful agents and attorneys-in-fact, for him and on his behalf and in his
name, place and stead, in any and all capacities, to sign, execute, acknowledge,
deliver, and file (a) with the Securities and Exchange Commission (or any other
governmental or regulatory authority), a Registration Statement on Form S-4 (or
other appropriate form) and any and all amendments (including post-effective
amendments) thereto, with any and all exhibits and any and all other documents
required to be filed with respect thereto or in connection therewith, relating
to the registration under the Securities Act of 1933 of Common Stock of the
Corporation to be issued in the merger between Hibernia National Bank (the
"Bank") and ArgentBank ("ArgentBank") wherein the Corporation agrees to exchange
shares of its common stock for all of the outstanding shares of common stock of
ArgentBank and merge ArgentBank into the Bank, authorized by resolutions adopted
by the Board of Directors on July 23, 1997, and (b) with the securities agencies
or officials of various jurisdictions, all applications, qualifications,
registrations or exemptions relating to such offering under the laws of any such
jurisdiction, including any amendments thereto or other documents required to be
filed with respect thereto or in connection therewith, granting unto said agents
and attorneys, and each of them, full power and authority to do and perform each
and every act and thing requisite and necessary to be done in and about the
premises in order to effectuate the same as fully to all intents and purposes as
the undersigned might or could do if personally present, and the undersigned
hereby ratifies and confirms all that said agents and attorneys-in-fact, or any
of them may lawfully do or cause to be done by virtue hereof.
IN WITNESS WHEREOF, the undersigned has hereunto set his hand on this
23rd day of July, 1997.
s/E. R. CAMPBELL
E. R. Campbell
Director
HIBERNIA CORPORATION
POWER OF ATTORNEY
KNOW ALL MEN BY THESE PRESENTS, that the undersigned director of
Hibernia Corporation, a Louisiana corporation (the "Corporation"), does hereby
name, constitute and appoint Marsha M. Gassan, Patricia C. Meringer and Gary L.
Ryan, and each of them (with full power to each of them to act alone), his true
and lawful agents and attorneys-in-fact, for him and on his behalf and in his
name, place and stead, in any and all capacities, to sign, execute, acknowledge,
deliver, and file (a) with the Securities and Exchange Commission (or any other
governmental or regulatory authority), a Registration Statement on Form S-4 (or
other appropriate form) and any and all amendments (including post-effective
amendments) thereto, with any and all exhibits and any and all other documents
required to be filed with respect thereto or in connection therewith, relating
to the registration under the Securities Act of 1933 of Common Stock of the
Corporation to be issued in the merger between Hibernia National Bank (the
"Bank") and ArgentBank ("ArgentBank") wherein the Corporation agrees to exchange
shares of its common stock for all of the outstanding shares of common stock of
ArgentBank and merge ArgentBank into the Bank, authorized by resolutions adopted
by the Board of Directors on July 23, 1997, and (b) with the securities agencies
or officials of various jurisdictions, all applications, qualifications,
registrations or exemptions relating to such offering under the laws of any such
jurisdiction, including any amendments thereto or other documents required to be
filed with respect thereto or in connection therewith, granting unto said agents
and attorneys, and each of them, full power and authority to do and perform each
and every act and thing requisite and necessary to be done in and about the
premises in order to effectuate the same as fully to all intents and purposes as
the undersigned might or could do if personally present, and the undersigned
hereby ratifies and confirms all that said agents and attorneys-in-fact, or any
of them may lawfully do or cause to be done by virtue hereof.
IN WITNESS WHEREOF, the undersigned has hereunto set his hand on this
23rd day of July, 1997.
s/JAMES R. MURPHY
James R. Murphy
Director
HIBERNIA CORPORATION
POWER OF ATTORNEY
KNOW ALL MEN BY THESE PRESENTS, that the undersigned director of
Hibernia Corporation, a Louisiana corporation (the "Corporation"), does hereby
name, constitute and appoint Marsha M. Gassan, Patricia C. Meringer and Gary L.
Ryan, and each of them (with full power to each of them to act alone), her true
and lawful agents and attorneys-in-fact, for her and on her behalf and in her
name, place and stead, in any and all capacities, to sign, execute, acknowledge,
deliver, and file (a) with the Securities and Exchange Commission (or any other
governmental or regulatory authority), a Registration Statement on Form S-4 (or
other appropriate form) and any and all amendments (including post-effective
amendments) thereto, with any and all exhibits and any and all other documents
required to be filed with respect thereto or in connection therewith, relating
to the registration under the Securities Act of 1933 of Common Stock of the
Corporation to be issued in the merger between Hibernia National Bank (the
"Bank") and ArgentBank ("ArgentBank") wherein the Corporation agrees to exchange
shares of its common stock for all of the outstanding shares of common stock of
ArgentBank and merge ArgentBank into the Bank, authorized by resolutions adopted
by the Board of Directors on July 23, 1997, and (b) with the securities agencies
or officials of various jurisdictions, all applications, qualifications,
registrations or exemptions relating to such offering under the laws of any such
jurisdiction, including any amendments thereto or other documents required to be
filed with respect thereto or in connection therewith, granting unto said agents
and attorneys, and each of them, full power and authority to do and perform each
and every act and thing requisite and necessary to be done in and about the
premises in order to effectuate the same as fully to all intents and purposes as
the undersigned might or could do if personally present, and the undersigned
hereby ratifies and confirms all that said agents and attorneys-in-fact, or any
of them may lawfully do or cause to be done by virtue hereof.
IN WITNESS WHEREOF, the undersigned has hereunto set his hand on this
23rd day of July, 1997.
s/VIRGINIA EASON WEINMANN
Virginia Eason Weinmann
Director
HIBERNIA CORPORATION
POWER OF ATTORNEY
KNOW ALL MEN BY THESE PRESENTS, that the undersigned director of
Hibernia Corporation, a Louisiana corporation (the "Corporation"), does hereby
name, constitute and appoint Marsha M. Gassan, Patricia C. Meringer and Gary L.
Ryan, and each of them (with full power to each of them to act alone), his true
and lawful agents and attorneys-in-fact, for him and on his behalf and in his
name, place and stead, in any and all capacities, to sign, execute, acknowledge,
deliver, and file (a) with the Securities and Exchange Commission (or any other
governmental or regulatory authority), a Registration Statement on Form S-4 (or
other appropriate form) and any and all amendments (including post-effective
amendments) thereto, with any and all exhibits and any and all other documents
required to be filed with respect thereto or in connection therewith, relating
to the registration under the Securities Act of 1933 of Common Stock of the
Corporation to be issued in the merger between Hibernia National Bank (the
"Bank") and ArgentBank ("ArgentBank") wherein the Corporation agrees to exchange
shares of its common stock for all of the outstanding shares of common stock of
ArgentBank and merge ArgentBank into the Bank, authorized by resolutions adopted
by the Board of Directors on July 23, 1997, and (b) with the securities agencies
or officials of various jurisdictions, all applications, qualifications,
registrations or exemptions relating to such offering under the laws of any such
jurisdiction, including any amendments thereto or other documents required to be
filed with respect thereto or in connection therewith, granting unto said agents
and attorneys, and each of them, full power and authority to do and perform each
and every act and thing requisite and necessary to be done in and about the
premises in order to effectuate the same as fully to all intents and purposes as
the undersigned might or could do if personally present, and the undersigned
hereby ratifies and confirms all that said agents and attorneys-in-fact, or any
of them may lawfully do or cause to be done by virtue hereof.
IN WITNESS WHEREOF, the undersigned has hereunto set his hand on this
23rd day of July, 1997.
s/ROBERT E. ZETZMANN
Robert E. Zetzmann
Director
HIBERNIA CORPORATION
POWER OF ATTORNEY
KNOW ALL MEN BY THESE PRESENTS, that the undersigned director of
Hibernia Corporation, a Louisiana corporation (the "Corporation"), does hereby
name, constitute and appoint Marsha M. Gassan, Patricia C. Meringer and Gary L.
Ryan, and each of them (with full power to each of them to act alone), her true
and lawful agents and attorneys-in-fact, for her and on her behalf and in her
name, place and stead, in any and all capacities, to sign, execute, acknowledge,
deliver, and file (a) with the Securities and Exchange Commission (or any other
governmental or regulatory authority), a Registration Statement on Form S-4 (or
other appropriate form) and any and all amendments (including post-effective
amendments) thereto, with any and all exhibits and any and all other documents
required to be filed with respect thereto or in connection therewith, relating
to the registration under the Securities Act of 1933 of Common Stock of the
Corporation to be issued in the merger between Hibernia National Bank (the
"Bank") and ArgentBank ("ArgentBank") wherein the Corporation agrees to exchange
shares of its common stock for all of the outstanding shares of common stock of
ArgentBank and merge ArgentBank into the Bank, authorized by resolutions adopted
by the Board of Directors on July 23, 1997, and (b) with the securities agencies
or officials of various jurisdictions, all applications, qualifications,
registrations or exemptions relating to such offering under the laws of any such
jurisdiction, including any amendments thereto or other documents required to be
filed with respect thereto or in connection therewith, granting unto said agents
and attorneys, and each of them, full power and authority to do and perform each
and every act and thing requisite and necessary to be done in and about the
premises in order to effectuate the same as fully to all intents and purposes as
the undersigned might or could do if personally present, and the undersigned
hereby ratifies and confirms all that said agents and attorneys-in-fact, or any
of them may lawfully do or cause to be done by virtue hereof.
IN WITNESS WHEREOF, the undersigned has hereunto set his hand on this
23rd day of July, 1997.
s/MARSHA M. GASSAN
Marsha M. Gassan
Chief Financial Officer
HIBERNIA CORPORATION
POWER OF ATTORNEY
KNOW ALL MEN BY THESE PRESENTS, that the undersigned director of
Hibernia Corporation, a Louisiana corporation (the "Corporation"), does hereby
name, constitute and appoint Marsha M. Gassan, Patricia C. Meringer and Gary L.
Ryan, and each of them (with full power to each of them to act alone), his true
and lawful agents and attorneys-in-fact, for him and on his behalf and in his
name, place and stead, in any and all capacities, to sign, execute, acknowledge,
deliver, and file (a) with the Securities and Exchange Commission (or any other
governmental or regulatory authority), a Registration Statement on Form S-4 (or
other appropriate form) and any and all amendments (including post-effective
amendments) thereto, with any and all exhibits and any and all other documents
required to be filed with respect thereto or in connection therewith, relating
to the registration under the Securities Act of 1933 of Common Stock of the
Corporation to be issued in the merger between Hibernia National Bank (the
"Bank") and ArgentBank ("ArgentBank") wherein the Corporation agrees to exchange
shares of its common stock for all of the outstanding shares of common stock of
ArgentBank and merge ArgentBank into the Bank, authorized by resolutions adopted
by the Board of Directors on July 23, 1997, and (b) with the securities agencies
or officials of various jurisdictions, all applications, qualifications,
registrations or exemptions relating to such offering under the laws of any such
jurisdiction, including any amendments thereto or other documents required to be
filed with respect thereto or in connection therewith, granting unto said agents
and attorneys, and each of them, full power and authority to do and perform each
and every act and thing requisite and necessary to be done in and about the
premises in order to effectuate the same as fully to all intents and purposes as
the undersigned might or could do if personally present, and the undersigned
hereby ratifies and confirms all that said agents and attorneys-in-fact, or any
of them may lawfully do or cause to be done by virtue hereof.
IN WITNESS WHEREOF, the undersigned has hereunto set his hand on this
23rd day of July, 1997.
s/RON E. SAMFORD, JR.
Ron E. Samford, Jr.
Chief Accounting Officer
HIBERNIA CORPORATION
EXHIBIT 99.1
PROXY
SPECIAL MEETING OF THE SHAREHOLDERS
OF
ARGENTBANK
THIBODAUX, LOUISIANA
PLEASE SIGN AND RETURN IMMEDIATELY TO
ARGENTBANK
KNOW ALL MEN BY THESE PRESENTS, that I, the undersigned shareholder of
ArgentBank, Thibodaux, Louisiana, do hereby nominate, constitute and appoint
the Board of Directors, or any one of them, with full power to act alone, my
true and lawful attorneys and proxies, with full power of substitution for me
and in my name, place and stead to vote all the common stock of ArgentBank
standing in my name, on its books on __________, at the Special Meeting of its
shareholders to be held in the Board Room on the third floor of ArgentBank at
400 Green Street, Thibodaux, Louisiana, on __________, or at any adjournment
thereof with all powers the undersigned would possess if personally present as
follows:
(1) Approval and adoption of an Agreement and Plan of Merger and related Bank
Merger Agreement each dated July 15, 1997, as amended (collectively, the
"Merger Agreement") and the transactions contemplated thereby pursuant to
which ArgentBank will merge with and into Hibernia National Bank.
FOR / / AGAINST / / ABSTAIN / /
(2) In their discretion, the Proxies are authorized to vote upon such other
business as may properly come before the Special Meeting or any adjournment
thereof.
THIS PROXY WILL BE VOTED AS DIRECTED, BUT IF NO INSTRUCTIONS ARE
SPECIFIED, THIS PROXY WILL BE VOTED FOR PROPOSAL 1. IF ANY OTHER
BUSINESS IS PRESENTED AT SUCH MEETING, THIS PROXY WILL BE VOTED BY
THOSE NAMED IN THIS PROXY IN THEIR DISCRETION.
THIS PROXY IF SOLICITED ON BEHALF OF THE BOARD OF DIRECTORS AND MAY BE
REVOKED PRIOR TO ITS EXERCISE BY CONTACTING RANDALL E. HOWARD AND BY FOLLOWING
THE PROCEDURES SET FORTH IN THE ACCOMPANYING PROXY STATEMENT/PROSPECTUS.
YOUR VOTE IS IMPORTANT. ACCORDINGLY, EVEN IF YOU PLAN TO ATTEND THE
MEETING, PLEASE DATE AND SIGN THE ENCLOSED PROXY FORM AND RETURN IT PROMPTLY IN
THE ENCLOSED ENVELOPE.
DATE:______________________, 199_.
________________________________________
Signature
________________________________________
Signature, if held jointly
When shares are held by joint tenants, both should sign.
When signing as attorney, as executor, administrator,
trustee or guardian, please give full title as such. If a
corporation, please sign in full corporate name by President
or other authorized officer. If a partnership, please sign
in the partnership name by an authorized person.
EXHIBIT 99.2
OPINION OF CHASE SECURITIES, INC.
[INCLUDED AS APPENDIX B TO THE PROXY STATEMENT/PROSPECTUS]