<PAGE>
HIBERNIA CORPORATION
SECURITIES AND EXCHANGE COMMISSION
Washington, D. C. 20549
FORM 10-Q
QUARTERLY REPORT UNDER SECTION 13 OR 15(d)
OF THE SECURITIES EXCHANGE ACT OF 1934
For Quarter Ended March 31, 1997 Commission File Number 1-10294
HIBERNIA CORPORATION
(Exact name of registrant as specified in its charter)
Louisiana 72-0724532
(State or other jurisdiction of (I.R.S. Employer
incorporation or organization) Identification Number)
313 Carondelet Street, New Orleans, Louisiana 70130
(Address of principal executive offices and zip code)
Registrant's telephone number, including area code (504) 533-5332
Indicate by check mark whether the registrant (1) has filed all reports required
to be filed by Section 13 or 15(d) of the Securities Exchange Act of 1934 during
the preceding 12 months (or for such shorter period that the registrant was
required to file such reports), and (2) has been subject to such filing
requirements for the past 90 days.
Yes X No
Indicate the number of shares outstanding of each of the issuer's classes of
common stock, as of the latest practicable date.
Class Outstanding at April 30, 1997
Class A Common Stock, no par value 128,977,220 Shares
<PAGE>
<TABLE>
<CAPTION>
Consolidated Balance Sheets
Hibernia Corporation and Subsidiaries March 31 December 31 March 31
Unaudited ($ in thousands) 1997 1996 1996
- --------------------------------------------------------------------------------------------------------------------
<S> <C> <C> <C>
Assets
Cash and due from banks .................................. $ 460,921 $ 558,440 $ 325,994
Short-term investments ................................... 239,295 158,293 246,383
Securities available for sale ............................ 2,116,551 2,178,674 2,165,841
Securities held to maturity .............................. - - -
Loans, net of unearned income ............................ 6,195,139 6,043,028 4,956,434
Reserve for possible loan losses ..................... (119,878) (127,768) (147,854)
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Loans, net ....................................... 6,075,261 5,915,260 4,808,580
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Bank premises and equipment .............................. 171,743 172,107 126,839
Customers' acceptance liability .......................... 284 135 202
Other assets ............................................. 317,781 323,887 206,715
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Total assets ..................................... $9,381,836 $9,306,796 $7,880,554
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Liabilities
Deposits:
Demand, noninterest-bearing .......................... $1,448,704 $1,540,917 $1,160,022
Interest-bearing ..................................... 6,483,681 6,280,886 5,491,002
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Total deposits ................................... 7,932,385 7,821,803 6,651,024
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Short-term borrowings .................................... 357,111 331,796 291,798
Liability on acceptances ................................. 284 135 202
Other liabilities ........................................ 144,083 165,328 127,424
Debt ..................................................... 7,390 51,349 35,052
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Total liabilities ................................ 8,441,253 8,370,411 7,105,500
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Shareholders' equity
Preferred Stock, no par value:
Authorized - 100,000,000 shares;
2,000,000 Series A issued and outstanding
at March 31, 1997 and December 31, 1996 ................ 100,000 100,000 -
Class A Common Stock, no par value:
Authorized - 200,000,000 shares; issued 129,002,573,
128,805,305, and 128,318,202 at March 31, 1997,
December 31, 1996 and March 31, 1996, respectively .... 247,685 247,306 246,371
Surplus .................................................. 378,651 377,028 373,549
Retained earnings ........................................ 236,507 217,797 163,635
Treasury stock at cost: 62,137 and 50,000 shares at
March 31, 1997 and December 31, 1996, respectively .... (734) (569) -
Unrealized gains (losses) on securities available for sale (8,272) 8,141 5,889
Unearned compensation .................................... (13,254) (13,318) (14,390)
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Total shareholders' equity ....................... 940,583 936,385 775,054
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Total liabilities and shareholders' equity ....... $9,381,836 $9,306,796 $7,880,554
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- ----------------
See notes to consolidated financial statements.
</TABLE>
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<TABLE>
<CAPTION>
Consolidated Income Statements
Hibernia Corporation and Subsidiaries
Three Months Ended March 31
Unaudited ($ in thousands, except per share data) 1997 1996
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<S> <C> <C>
Interest income
Interest and fees on loans ............................. $132,841 $108,846
Interest on securities available for sale .............. 35,894 36,303
Interest on securities held to maturity ................ - -
Interest on short-term investments ..................... 2,933 2,588
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Total interest income .............................. 171,668 147,737
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Interest expense
Interest on deposits ................................... 66,710 57,673
Interest on short-term borrowings ...................... 4,484 3,417
Interest on debt ....................................... 635 395
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Total interest expense ............................. 71,829 61,485
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Net interest income ........................................ 99,839 86,252
Provision for possible loan losses ..................... - 425
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Net interest income after provision for possible loan losses 99,839 85,827
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Noninterest income
Service charges on deposits ............................ 16,074 13,047
Trust fees ............................................. 3,469 3,268
Other service, collection and exchange charges ......... 9,569 7,733
Other operating income ................................. 2,901 3,351
Securities gains (losses), net ......................... 15 67
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Total noninterest income ........................... 32,028 27,466
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Noninterest expense
Salaries and employee benefits ......................... 42,850 37,250
Occupancy expense, net ................................. 7,318 6,323
Equipment expense ...................................... 6,847 5,498
Data processing expense ................................ 4,520 5,304
Foreclosed property expense, net ....................... (324) (715)
Amortization of intangibles ............................ 3,566 960
Other operating expense ................................ 20,193 18,089
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Total noninterest expense .......................... 84,970 72,709
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Income before income taxes ................................. 46,897 40,584
Income tax expense ......................................... 16,283 14,282
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Net income ................................................. $ 30,614 $ 26,302
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Net income applicable to common shareholders ............... $ 28,889 $ 26,302
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Net income per common share ................................ $ 0.23 $ 0.21
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- ----------------
See notes to consolidated financial statements.
</TABLE>
<PAGE>
<TABLE>
<CAPTION>
Consolidated Statements of Changes in Shareholders' Equity
Hibernia Corporation and Subsidiaries
Unaudited ($ in thousands, except per-share data)
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Preferred Common Retained
Stock Stock Surplus Earnings Other Total
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<S> <C> <C> <C> <C> <C> <C>
Balances at December 31, 1996 ........ $100,000 $247,306 $377,028 $217,797 $ (5,746) $936,385
Net income ........................... - - - 30,614 - 30,614
Issuance of common stock:
Dividend Reinvestment Plan ........ - 140 828 - - 968
Stock Option Plan ................. - 195 530 - - 725
Retirement Security Plan .......... - 44 265 - - 309
Cash dividends declared:
Common ($.08 per share) ........... - - - (10,179) - (10,179)
Preferred ($.8625 per share) ...... - - - (1,725) - (1,725)
Acquisition of treasury stock ........ - - - - (165) (165)
Allocation of ESOP shares ............ - - - - 64 64
Change in unrealized gains (losses)
on securities available for sale .. - - - - (16,413) (16,413)
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Balances at March 31, 1997 ........... $100,000 $247,685 $378,651 $236,507 $(22,260) $940,583
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Preferred Common Retained
Stock Stock Surplus Earnings Other Total
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Balances at December 31, 1995 ........ $ - $246,357 $373,556 $146,010 $ 1,884 $767,807
Net income ........................... - - - 26,302 - 26,302
Issuance of common stock:
Stock Option Plan ................. - 14 (31) - 172 155
Restricted stock awards ........... - - - - 11 11
By pooled companies prior to merger - - 24 - - 24
Cash dividends declared:
Common ($.07 per share) ........... - - - (8,419) - (8,419)
By pooled companies prior to merger - - - (258) - (258)
Change in unrealized gains (losses)
on securities available for sale .. - - - - (10,568) (10,568)
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Balances at March 31, 1996 ........... $ - $246,371 $373,549 $163,635 $ (8,501) $775,054
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- ----------------
See notes to consolidated financial statements.
</TABLE>
<PAGE>
<TABLE>
<CAPTION>
Consolidated Statements of Cash Flows
Hibernia Corporation and Subsidiaries
Three Months Ended March 31
Unaudited ($ in thousands) 1997 1996
- ---------------------------------------------------------------------------------------------------------
<S> <C> <C>
Operating activities
Net income ......................................................... $ 30,614 $ 26,302
Adjustments to reconcile net income to net
cash provided by operating activities:
Provision for possible loan losses .......................... - 425
Amortization of intangibles and deferred charges ............ 3,449 960
Depreciation and amortization ............................... 6,253 5,025
Premium amortization, net of discount accretion ............. 538 1,875
Realized securities gains, net .............................. (15) (67)
Gain on sale of assets ...................................... (739) (760)
Provision for losses on foreclosed and other assets ......... 227 462
Decrease (increase) in deferred income tax asset ............ (54) 27
Decrease in interest receivable and other assets ............ 10,814 2,484
Increase (decrease) in interest payable and other liabilities (21,166) 8,696
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Net cash provided by operating activities ..................... 29,921 45,429
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Investing activities
Purchases of securities available for sale ......................... (94,432) (35,645)
Proceeds from sales of securities available for sale ............... 1,725 43,565
Proceeds from maturities of securities available for sale .......... 129,063 158,510
Net increase in loans .............................................. (215,137) (304,174)
Proceeds from sales of loans ....................................... 55,137 67,410
Purchases of premises, equipment and other assets .................. (7,498) (5,561)
Proceeds from sales of foreclosed assets ........................... 2,690 1,563
Proceeds from sales of premises, equipment and other assets ........ 124 162
- ---------------------------------------------------------------------------------------------------------
Net cash used by investing activities ......................... (128,328) (74,170)
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Financing activities
Net increase in domestic deposits .................................. 104,070 83,184
Net increase (decrease) in time deposits - foreign office .......... 6,546 (1,857)
Net increase in short-term borrowings .............................. 25,315 26,672
Proceeds from issuance of debt ..................................... - 52,295
Payments on debt ................................................... (43,959) (51,604)
Proceeds from issuance of common stock ............................. 2,002 190
Dividends paid ..................................................... (11,919) (8,677)
Acquisition of treasury stock ...................................... (165) -
- ---------------------------------------------------------------------------------------------------------
Net cash provided by financing activities ..................... 81,890 100,203
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Increase (decrease) in cash and cash equivalents ..................... (16,517) 71,462
Cash and cash equivalents at beginning of year ..................... 716,733 500,915
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Cash and cash equivalents at end of period .................... $700,216 $572,377
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- ----------------
See notes to consolidated financial statements.
</TABLE>
<PAGE>
Notes to Consolidated Financial Statements
Hibernia Corporation and Subsidiaries
Unaudited
Note 1 BASIS OF PRESENTATION The accompanying unaudited consolidated
financial statements have been prepared in accordance with generally accepted
accounting principles for interim financial information and with the
instructions to Form 10-Q and Article 10 of Regulation S-X. Accordingly, they do
not include all of the information and footnotes required by generally accepted
accounting principles. In the opinion of management, all adjustments (consisting
of normal recurring accruals) considered necessary for a fair presentation have
been included. For further information, refer to the audited consolidated
financial statements and notes included in Hibernia Corporation's Annual Report
on Form 10-K for the year ended December 31, 1996.
Note 2 EMPLOYEE BENEFIT PLANS The Company's stock option plans provide
incentive and non-qualified options to various key employees and non-employee
directors. The options are granted at no less than the fair market value of the
stock at the date of grant. Options granted to directors under the 1987 Stock
Option Plan vest in six months. All other options granted under the 1987 Stock
Option Plan, the Long-Term Incentive Plan and the 1993 Directors' Stock Option
Plan become exercisable in the following increments: 50% after the expiration of
two years from the date of grant, an additional 25% three years from the date of
grant and the remaining 25% four years from the date of grant.
Options granted to employees and directors, other than the chief
executive officer, become immediately exercisable if the holder of the option
dies while the option is outstanding. Options granted under the 1993 Directors'
Stock Option Plan become fully vested upon retirement of the holder. Options
granted under the 1987 Stock Option Plan generally expire 10 years from the date
granted. Options granted under the Long-Term Incentive Plan and the 1993
Directors' Stock Option Plan generally expire 10 years from the date of grant
unless the holder dies, retires, becomes permanently disabled or leaves the
employ of the Company, at which time the options expire at various times ranging
from 30 to 365 days. All options vest immediately upon a change in control of
the Company.
At March 31, 1997, the number of shares available for grant under the
1987 Stock Option Plan, the Long-Term Incentive Plan and the 1993 Directors'
Stock Option Plan totaled 154,246, 1,092,139, and 712,500, respectively.
The following tables summarize the activity in the plans during the first
quarter of 1997.
<TABLE>
<CAPTION>
- ---------------------------------------------------------------------------------------
Weighted
Average
Incentive Non-Qualified Exercise Price
- ---------------------------------------------------------------------------------------
<S> <C> <C> <C>
1987 Stock Option Plan:
Outstanding, December 31, 1996 ... 160,553 1,343,588 $ 7.45
Canceled ......................... - (1,474) 4.94
Exercised ........................ - (5,867) 4.94
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Outstanding, March 31, 1997 ...... 160,553 1,336,247 $ 7.47
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Exercisable, March 31, 1997 ...... 160,553 1,336,247 $ 7.47
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Long-Term Incentive Plan:
Outstanding, December 31, 1996 ... 12,598 4,841,972 $ 8.27
Granted .......................... - 1,522,050 13.44
Canceled ......................... - (32,886) 8.77
Exercised ........................ - (80,470) 7.20
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Outstanding, March 31, 1997 ...... 12,598 6,250,666 $ 9.54
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Exercisable, March 31, 1997 ...... - 2,282,570 $ 7.51
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1993 Directors' Stock Option Plan:
Outstanding, December 31, 1996 ... - 263,750 $ 8.57
Exercised ........................ - (15,000) 7.77
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Outstanding, March 31, 1997 ...... - 248,750 $ 8.61
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Exercisable, March 31, 1997 ...... - 70,000 $ 7.61
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</TABLE>
During 1995, the Company instituted an employee stock ownership plan
(ESOP) in which substantially all employees participate. The ESOP, with a
guarantee of the Parent Company, borrowed funds from Hibernia National Bank to
purchase Hibernia Class A Common Stock. The ESOP is expected to acquire up to
$30,000,000 of Hibernia Class A Common Stock in open-market purchases of which
$16,350,000 had been acquired at March 31, 1997.
Note 3 NET INCOME PER COMMON SHARE Net income per common share is based
on the weighted average number of common shares outstanding of 127,272,878 for
the three months ended March 31, 1997 and 126,523,705 for the three months ended
March 31, 1996. These weighted averages exclude uncommitted shares held by the
ESOP.
In February 1997, the Financial Accounting Standards Board issued
Statement of Financial Accounting Standard (SFAS) No. 128, "Earnings per Share",
which is required to be adopted on December 31, 1997. At that time, the Company
will be required to present both net income per common share and net income per
common share - assuming dilution. The adoption of SFAS No. 128 will not impact
the Company's net income per common share. However, the Company has not
previously been required to present net income per common share - assuming
dilution. For the quarters ended March 31, 1997 and 1996, net income per common
share - assuming dilution would have been $0.22 and $0.20, respectively, if the
Company had been required to adopt SFAS No. 128.
<PAGE>
<TABLE>
<CAPTION>
QUARTERLY CONSOLIDATED SUMMARY OF INCOME AND SELECTED FINANCIAL DATA (1)
Hibernia Corporation and Subsidiaries
- --------------------------------------------------------------------------------------------------------
Three Months Ended
March 31 Dec. 31 March 31
($ in thousands, except per-share data) 1997 1996 1996
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<S> <C> <C> <C>
Interest income ................................... $171,668 $171,350 $147,737
Interest expense .................................. 71,829 70,726 61,485
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Net interest income ............................... 99,839 100,624 86,252
Provision for possible loan losses ................ - - 425
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Net interest income after provision
for possible loan losses ...................... 99,839 100,624 85,827
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Noninterest income:
Noninterest income ............................. 32,013 31,545 27,399
Securities gains (losses), net ................. 15 165 67
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Noninterest income ................................ 32,028 31,710 27,466
Noninterest expense ............................... 84,970 84,210 72,709
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Income before taxes ............................... 46,897 48,124 40,584
Income tax expense ................................ 16,283 17,189 14,282
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Net income ........................................ $ 30,614 $ 30,935 $ 26,302
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Net income applicable to common shareholders ...... $ 28,889 $ 29,195 $ 26,302
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Per common share information: (2)
Net income ..................................... $ 0.23 $ 0.23 $ 0.21
Cash dividends declared ........................ $ 0.08 $ 0.08 $ 0.07
Average shares outstanding (000s) ................. 127,273 127,080 126,524
Dividend payout ratio ............................. 34.78% 34.78% 33.33%
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Selected quarter-end balances (in millions)
Loans ............................................. $6,195.2 $6,043.0 $4,956.4
Deposits .......................................... 7,932.4 7,821.8 6,651.0
Debt .............................................. 7.4 51.3 35.1
Equity ............................................ 940.6 936.4 775.1
Total assets ...................................... 9,381.8 9,306.8 7,880.6
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Selected average balances (in millions)
Loans ............................................. $6,092.3 $5,892.0 $4,839.9
Deposits .......................................... 7,734.1 7,529.3 6,577.4
Debt .............................................. 44.3 31.4 27.5
Equity ............................................ 943.8 921.0 775.9
Total assets ...................................... 9,265.2 9,008.2 7,794.2
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Selected ratios
Net interest margin (taxable-equivalent) .......... 4.83% 4.93% 4.83%
Return on assets .................................. 1.32% 1.37% 1.35%
Return on common equity ........................... 13.69% 14.22% 13.56%
Return on total equity ............................ 12.97% 13.44% 13.56%
Efficiency ratio .................................. 63.41% 62.96% 63.07%
Average equity/average assets ..................... 10.19% 10.22% 9.95%
Tier 1 risk-based capital ratio ................... 12.00% 12.07% 14.32%
Total risk-based capital ratio .................... 13.26% 13.33% 15.59%
Leverage ratio .................................... 8.79% 8.78% 9.68%
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Tax-effected net income and ratios excluding
goodwill and core deposit intangible amortization
and balances (3)
Net income applicable to common shareholders ...... $ 31,732 $ 32,132 $ 27,079
Net income per common share (2) ................... $ 0.25 $ 0.25 $ 0.21
Return on assets .................................. 1.39% 1.45% 1.39%
Return on common equity ........................... 18.14% 19.07% 14.31%
Efficiency ratio .................................. 60.94% 60.38% 62.39%
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- ----------------
(1) All financial information has been restated for mergers accounted for as
poolings of interests. The effects of mergers accounted for as purchase
transactions have been included from the date of consummation. Prior
periods have been conformed to current-period presentation.
(2) Income per common share data are based on the weighted average number of
common shares outstanding (net of uncommitted ESOP shares) in the
respective period. Dividends per common share are historical amounts.
(3) Amortization and balances of core deposit intangibles are net of
applicable taxes. Goodwill amortization and balances are not tax
effected.
</TABLE>
<PAGE>
MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION
AND RESULTS OF OPERATIONS
Management's Discussion presents a review of the major factors and trends
affecting the performance of Hibernia Corporation (the "Company" or "Hibernia")
and its subsidiaries, principally Hibernia National Bank and Hibernia National
Bank of Texas, collectively referred to as the "Banks." This discussion should
be read in conjunction with the accompanying tables and consolidated financial
statements.
MERGER ACTIVITY
In 1996, the Company completed five mergers, 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. All prior-year information
has been restated to reflect the effect of the mergers accounted for as poolings
of interests. For the two mergers in 1996 accounted for as purchases, the
financial information of those institutions is combined with Hibernia as of and
subsequent to merger.
Measures of financial performance subsequent to the purchase transactions
are more relevant when comparing "tangible" results (i.e., before amortization
of goodwill and core deposit intangibles) because they are more indicative of
cash flows, and thus the Company's ability to support growth and pay dividends.
The tangible measures of financial performance are presented in the Quarterly
Consolidated Summary of Income and Selected Financial Data on the preceding
page.
The institutions with which the Company merged are collectively referred to
as the "merged companies." The merged companies in transactions accounted for as
poolings of interests are referred to as the "pooled companies," and the merged
companies in transactions accounted for as purchase transactions are referred to
as the "purchased companies."
FIRST-QUARTER 1997 HIGHLIGHTS
Hibernia Corporation's first-quarter 1997 results showed continued
improvement in earnings over the first quarter of 1996, strong loan and deposit
increases, improved asset quality and growth in noninterest income.
o Net income for the first quarter of 1997 totaled $30.6 million ($.23
per common share), up 16% compared to $26.3 million ($.21 per common
share) for the first quarter of 1996. Tangible earnings per common
share were $.25 in the first quarter of 1997 compared to $.21 for the
first quarter of 1996.
o Returns on assets (ROA) and total equity (ROE) were 1.32% and 12.97%,
respectively, for the first quarter of 1997 compared to 1.35% and
13.56% for the same period a year ago. Returns on common equity were
13.69% and 13.56% for the first quarter of 1997 and 1996, respectively.
o First-quarter 1997 results improved compared to the same period last
year because of a $13.6 million (16%) increase in net interest income
(resulting from higher average earning assets) and a $4.6 million (17%)
improvement in noninterest income. These increases were partially
offset by increases in noninterest expense and income tax expense,
which were up $12.3 million (17%) and $2.0 million (14%), respectively.
Approximately $7.4 million, or 60%, of the increase in noninterest
expense was related to amortization of purchase accounting intangibles
and additional noninterest expenses associated with the purchased
companies.
o Total loans were up $1.2 billion (25%) from March 31, 1996 to $6.2
billion at March 31, 1997. Commercial loans grew $581.3 million (31%)
to $2.4 billion. Small business banking loans increased $233.8 million
(26%) to $1.1 billion and consumer loans increased $423.6 million (19%)
to $2.6 billion.
o Asset quality remained strong with reserve coverage of nonperforming
loans at almost 722% at March 31, 1997, as nonperforming loans
decreased $2.3 million from March 31, 1996 to $16.6 million at March
31, 1997. Total nonperforming assets of $23.9 million at March 31, 1997
were down 15% from a year ago. Nonperforming assets as a percentage of
loans plus foreclosed assets and excess bank-owned property were
reduced to 0.39%, compared to 0.57% at March 31, 1996.
o Deposits increased $1.3 billion (19%) from March 31, 1996, to $7.9
billion at March 31, 1997. A significant portion of this increase was
attributable to the purchased companies, which added approximately $880
million in deposits.
o In April 1997, Hibernia's Board of Directors declared a quarterly cash
dividend of $.08 per common share, a 14% increase from the quarterly
dividend declared in April 1996.
FINANCIAL CONDITION:
EARNING ASSETS
Earning assets averaged $8.5 billion in the first quarter of 1997, a $1.2
billion (17%) increase from the first-quarter 1996 average of $7.3 billion. The
growth in average earning assets was due to the effect of the purchased
companies and new loan growth. Hibernia has funded the loan growth through
increases in deposits and borrowed funds and proceeds from maturing securities.
Loans. Average loans for the first quarter of 1997 of $6.1 billion were up
$200.3 million (3%) from the fourth quarter of 1996 and up $1.3 billion (26%)
compared to the first quarter of 1996. The purchased companies accounted for
approximately 30% of the increase in the first quarter of 1997 compared to the
first quarter of 1996.
Table 1 presents Hibernia's commercial and small business banking loans
classified by repayment source and consumer loans classified by type at March
31, 1997, December 31, 1996 and March 31, 1996. Total loans increased $152.1
million (3%) during the first quarter of 1997 as commercial loans increased
$106.2 million (5%), small business banking loans were up $15.3 million (1%) and
consumer loans increased $30.6 million (1%). Compared to March 31, 1996, loans
increased $1.2 billion (25%). Commercial loans were up $581.3 million (31%),
small business banking loans grew $233.8 million (26%) and consumer loans
increased $423.6 million (19%). Commercial and small business banking growth was
spread across most categories. In consumer lending, growth was seen in
residential mortgage loans and revolving credit loans.
Securities. Average securities decreased $71.0 million (3%) in the first
quarter of 1997 compared to the first quarter of 1996 as a result of the
reinvestment of maturing securities into higher-yielding loans, partially offset
by the effect of the purchased companies.
Short-Term Investments. Average short-term investments (primarily federal
funds sold) for the three months ended March 31, 1997, totaled $224.2 million,
up $29.8 million (15%) compared to an average of $194.4 million in the first
quarter of 1996.
<TABLE>
<CAPTION>
- ------------------------------------------------------------------------------------------------------------
TABLE 1 - COMPOSITION OF LOAN PORTFOLIO
- ------------------------------------------------------------------------------------------------------------
March 31, 1997 December 31, 1996 March 31, 1996
- ------------------------------------------------------------------------------------------------------------
($ in millions) Loans Percent Loans Percent Loans Percent
- ------------------------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C> <C> <C>
Commercial:
Commercial and
industrial ................ $ 902.2 14.6% $ 865.9 14.3% $ 719.2 14.5%
Services industry ............. 484.6 7.8 455.3 7.5 292.1 5.9
Real estate ................... 420.4 6.8 419.1 6.9 350.8 7.1
Health care ................... 215.9 3.5 227.3 3.8 181.3 3.7
Transportation, communications
and utilities .............. 196.4 3.2 182.4 3.0 170.2 3.4
Energy ........................ 171.4 2.7 143.2 2.4 104.2 2.1
Other ......................... 54.4 0.9 45.9 0.8 46.2 0.9
- ------------------------------------------------------------------------------------------------------------
Total commercial ........... 2,445.3 39.5 2,339.1 38.7 1,864.0 37.6
- ------------------------------------------------------------------------------------------------------------
Small Business Banking:
Commercial and
industrial ................ 480.7 7.7 601.7 10.0 360.4 7.3
Services industry ............. 222.4 3.6 183.2 3.0 112.0 2.3
Real estate ................... 133.3 2.1 118.9 2.0 92.0 1.8
Health care ................... 59.9 1.0 54.7 0.9 32.9 0.7
Transportation, communications
and utilities .............. 29.6 0.5 24.3 0.4 16.7 0.3
Energy ........................ 9.8 0.2 6.8 0.1 7.9 0.2
Other ......................... 190.1 3.1 120.9 2.0 270.1 5.4
- ------------------------------------------------------------------------------------------------------------
Total small business banking 1,125.8 18.2 1,110.5 18.4 892.0 18.0
- ------------------------------------------------------------------------------------------------------------
Consumer:
Residential mortgages:
First mortgages ............ 1,112.2 17.9 1,082.2 17.9 884.9 17.9
Junior liens ............... 118.9 1.9 121.2 2.0 79.8 1.6
Indirect ...................... 727.4 11.7 749.9 12.4 703.4 14.2
Revolving credit .............. 177.1 2.9 144.4 2.4 94.9 1.9
Other ......................... 488.4 7.9 495.7 8.2 437.4 8.8
- ------------------------------------------------------------------------------------------------------------
Total consumer ............. 2,624.0 42.3 2,593.4 42.9 2,200.4 44.4
- ------------------------------------------------------------------------------------------------------------
Total loans ...................... $6,195.1 100.0% $6,043.0 100.0% $4,956.4 100.0%
- ------------------------------------------------------------------------------------------------------------
</TABLE>
ASSET QUALITY
Nonperforming assets -- which include nonaccrual loans, restructured loans,
foreclosed assets and excess bank-owned property -- totaled $23.9 million at
March 31, 1997. Nonperforming assets decreased $4.3 million (15%) from $28.3
million at March 31, 1996 and declined $1.0 million (4%) from $24.9 million at
December 31, 1996. Nonperforming loans, which totaled $16.6 million at March 31,
1997, declined $2.3 million (12%) from a year ago, and were up $0.6 million (4%)
from the prior quarter end. Foreclosed assets totaled $4.3 million at March 31,
1997, down $2.0 million (32%) from a year earlier, and down $0.9 million (17%)
from December 31, 1996. Excess bank-owned property at March 31, 1997 was
unchanged from $3.0 million a year earlier, and down $0.7 million (18%) from
December 31, 1996. Nonperforming assets as a percentage of total loans plus
foreclosed assets and excess bank-owned property at March 31, 1997, improved to
0.39%, down from 0.57% a year ago and 0.41% at December 31, 1996.
Table 2 presents a summary of nonperforming assets at the end of the last
five quarters. Table 3 presents a summary of changes in nonperforming loans for
the three-month periods ended March 31, 1997 and 1996.
<TABLE>
<CAPTION>
- ----------------------------------------------------------------------------------------------------------------
TABLE 2 - NONPERFORMING ASSETS
- ----------------------------------------------------------------------------------------------------------------
March 31 Dec.31 Sept. 30 June 30 March 31
($ in thousands) 1997 1996 1996 1996 1996
- ----------------------------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C> <C>
Nonaccrual loans ........................ $ 16,610 $ 16,043 $ 15,050 $ 18,217 $ 18,886
Restructured loans ...................... - - - - -
- ----------------------------------------------------------------------------------------------------------------
Total nonperforming loans ........... 16,610 16,043 15,050 18,217 18,886
- ----------------------------------------------------------------------------------------------------------------
Foreclosed assets ....................... 4,330 5,206 4,571 4,323 6,361
Excess bank-owned property .............. 3,008 3,670 2,220 2,956 3,023
- ----------------------------------------------------------------------------------------------------------------
Total nonperforming assets .......... $ 23,948 $ 24,919 $ 21,841 $ 25,496 $ 28,270
- ----------------------------------------------------------------------------------------------------------------
Accruing loans past due
90 days or more ..................... $ 4,890 $ 5,281 $ 6,791 $ 7,279 $ 9,384
Reserve for possible loan losses ........ $119,878 $127,768 $133,221 $147,222 $147,854
Nonperforming loans as a percentage
of total loans ...................... 0.27% 0.27% 0.26% 0.35% 0.38%
Nonperforming assets as a percentage
of total loans plus foreclosed assets
and excess bank-owned property ...... 0.39% 0.41% 0.38% 0.49% 0.57%
Reserve for possible loan losses as a
percentage of nonperforming loans ... 721.72% 796.41% 885.19% 808.16% 782.88%
- ----------------------------------------------------------------------------------------------------------------
</TABLE>
At March 31, 1997, the recorded investment in loans considered impaired
under Statement of Financial Accounting Standards (SFAS) No. 114 was $14.1
million. The related reserve for possible loan losses was $2.7 million. The
comparable amounts at March 31, 1996 were $17.3 million and $2.7 million,
respectively. These loans are included in nonaccrual loans in Table 2.
Accruing loans past due 90 days or more were $4.9 million at March 31, 1997
compared to $9.4 million and $5.3 million at March 31, 1996 and December 31,
1996, respectively. Loans past due 30 days or more were 0.81% of total loans at
March 31, 1997, down from 1.23% and 1.05% at December 31, 1996 and March 31,
1996, respectively. Commercial loan delinquencies were 0.20% of total commercial
loans at March 31, 1997 compared to 0.84% at December 31, 1996 and 0.22% at
March 31, 1996. Small business loan delinquencies decreased to 1.17% at March
31, 1997, from 1.31% at year-end 1996 and 1.37% at March 31, 1996. Consumer loan
delinquencies decreased to 1.22% from 1.56% at December 31, 1996 and 1.61% at
March 31, 1996.
As illustrated in Table 3, loans totaling $18.7 million were added to
nonperforming loans during the first quarter of 1997. Payments and sales
resulted in a $14.2 million reduction in nonperforming loans and charge-offs
further reduced nonperforming loans in the first quarter of 1997 by $3.0
million. Much of the activitiy in nonperforming loans is due to a $14.0 million
loan that was placed on nonaccrual in the first quarter of 1997. Subsequently, a
payment for $12.2 million was received, and the remaining $1.8 million was
charged off. Although not a component of nonperforming loan activity, nonaccrual
loans that have been charged-off may be recovered in ensuing periods, and, in
that event, would be reflected as recoveries in the reserve for possible loan
losses in Table 4.
In addition to the nonperforming assets discussed above, other commercial
loans for which payments are current that are subject to potential future
classification as nonperforming totaled $18.9 million as of March 31, 1997.
<TABLE>
<CAPTION>
- ------------------------------------------------------------
TABLE 3 - SUMMARY OF NONPERFORMING LOAN ACTIVITY
- ------------------------------------------------------------
Three Months
Ended March 31
- ------------------------------------------------------------
($ in thousands) 1997 1996
- ------------------------------------------------------------
<S> <C> <C>
Nonperforming loans
at beginning of period . $ 16,043 $ 17,692
Additions .................. 18,692 5,350
Charge-offs, gross ......... (3,005) (2,220)
Returns to performing status (891) (28)
Payments and sales ......... (14,229) (1,908)
- -----------------------------------------------------------
Nonperforming loans
at end of period ....... $ 16,610 $ 18,886
- -----------------------------------------------------------
</TABLE>
RESERVE AND PROVISION FOR POSSIBLE LOAN LOSSES
As a result of continued asset quality improvement and strong reserve
coverage, no provision for possible loan losses was recorded for the first
quarter of 1997 compared to a nominal provision recorded in the first quarter of
1996 by one of the pooled companies. As of March 31, 1997 the reserve for
possible loan losses as a percentage of nonperforming loans was 722%, compared
to 783% at March 31, 1996 and 796% at December 31, 1996.
Net charge-offs totaled $7.9 million in the first quarter of 1997, compared
to $3.1 million in the first quarter of 1996. As a percentage of average loans,
annualized net charge-offs in the first quarter of 1997 and 1996 were 0.52% and
0.26%, respectively. Net charge-offs were up primarily due to management's
preemptive approach to charge-offs, as well as the significant growth in the
loan portfolio over the past three years.
The reserve for possible loan losses totaled $119.9 million, or 1.94% of
total loans, at March 31, 1997, compared to $147.9 million, or 2.98%, a year
earlier. In terms of both dollar amount and as a percentage of loans, the
reserve for possible loan losses has been declining since the end of 1993 as a
result of net charge-offs, negative provisions and loan growth. Management has
deemed the present level to be adequate to absorb future potential loan losses
inherent in the existing portfolio considering the level and mix of the loan
portfolio, current economic conditions and market trends. Because factors such
as loan growth, the future collectibility of loans and the amounts and timing of
future cash flows expected to be received on impaired loans are uncertain, the
level of future provisions, if any, cannot be predicted. Table 4 presents an
analysis of the activity in the reserve for possible loan losses for the first
quarter of 1997 and 1996.
<TABLE>
<CAPTION>
- --------------------------------------------------------------------
TABLE 4 - RESERVE FOR POSSIBLE LOAN LOSSES ACTIVITY
- --------------------------------------------------------------------
Three Months
Ended March 31
- --------------------------------------------------------------------
($ in thousands) 1997 1996
- --------------------------------------------------------------------
<S> <C> <C>
Balance at beginning of period ... $ 127,768 $ 150,516
Loans charged off ................ (13,500) (7,109)
Recoveries ....................... 5,610 4,022
- --------------------------------------------------------------------
Net loans charged off ............ (7,890) (3,087)
Provision for possible loan losses - 425
- --------------------------------------------------------------------
Balance at end of period ......... $ 119,878 $ 147,854
- --------------------------------------------------------------------
Reserve for possible loan losses
as a percentage of loans ..... 1.94% 2.98%
Annualized net charge-offs as a
percentage of average loans .. 0.52% 0.26%
- --------------------------------------------------------------------
</TABLE>
FUNDING SOURCES:
DEPOSITS AND BORROWINGS
Deposits. Average deposits totaled $7.7 billion in the first quarter of
1997, a $1.2 billion (18%) increase from the first quarter of 1996. This growth
resulted from both the purchased companies and Hibernia's emphasis on attracting
new deposits and expanding current banking relationships through outstanding
service and the introduction of new products. Excluding the growth in deposits
attributable to the purchased companies, average deposits grew $333.3 million
(5%). Among the new products introduced were the Tower Super SavingsSM account,
which offers liquidity and a rate indexed to the 90-day Treasury bill auction
discount rate and the 7-day CD.
Table 5 presents the composition of average deposits for the first quarter
of 1997 and the fourth and first quarters of 1996.
<TABLE>
<CAPTION>
- -----------------------------------------------------------------------------------------------------
TABLE 5 - DEPOSIT COMPOSITION
- -----------------------------------------------------------------------------------------------------
First Quarter 1997 Fourth quarter 1996 First Quarter 1996
- -----------------------------------------------------------------------------------------------------
Average % of Average % of Average % of
($ in millions) Balances Deposits Balances Deposits Balances Deposits
- -----------------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C> <C> <C>
Demand, noninterest-bearing ... $1,363.9 17.6% $1,359.2 18.0% $1,208.3 18.4%
NOW accounts .................. 390.9 5.1 391.3 5.2 262.7 4.0
Money market deposit accounts . 1,545.5 20.0 1,472.0 19.6 1,527.0 23.2
Savings accounts .............. 505.3 6.5 443.4 5.9 369.7 5.6
Other consumer time deposits .. 2,532.5 32.7 2,521.2 33.5 2,168.0 33.0
- -----------------------------------------------------------------------------------------------------
Total core deposits ....... 6,338.1 81.9 6,187.1 82.2 5,535.7 84.2
- -----------------------------------------------------------------------------------------------------
Public fund certificates of
deposit of $100,000 or more 965.4 12.5 930.1 12.4 798.5 12.1
Certificates of deposit of
$100,000 or more .......... 362.9 4.7 363.3 4.8 204.7 3.1
Foreign time deposits ......... 67.7 0.9 48.8 0.6 38.5 0.6
- -----------------------------------------------------------------------------------------------------
Total deposits ............ $7,734.1 100.0% $7,529.3 100.0% $6,577.4 100.0%
- -----------------------------------------------------------------------------------------------------
</TABLE>
Average core deposits totaled $6.3 billion in the first quarter of 1997, an
$802.4 million (14%) increase from the first quarter of 1996. NOW account
average balances were up $128.2 million, savings deposits increased $135.6
million and other consumer time deposits grew $364.5 million in the first
quarter of 1997 compared to the first quarter of 1996. These increases were
primarily due to the purchased companies. In addition, savings deposits and
consumer time deposits experienced growth due to the introduction of new
products.
Average noncore deposits increased $354.3 million (34%) from the first
quarter of 1996, with the purchased companies accounting for almost 30% of the
increase. Public fund certificates of deposit increased $166.9 million (21%) and
other large-denomination certificates of deposit increased $158.2 million (77%).
The increases in public funds deposits are due, in part, to greater access in
new markets (through mergers and acquisitions) to public agency funds as well as
increases in funds from previously existing relationships.
Borrowings. Average borrowings -- which include federal funds purchased,
securities sold under agreements to repurchase (repurchase agreements) and debt
- -- increased $108.2 million (34%) to $424.6 million for the first quarter of
1997 compared to the first quarter of 1996. The increase resulted primarily from
growth in repurchase agreements related to new cash management products which
"sweep" funds from deposit accounts.
Average repurchase agreements increased $99.8 million in the first quarter
of 1997 over the comparable period in 1996 as a result of continued marketing of
cash management products, which allow Hibernia customers to earn interest on
idle deposits. Fluctuations in short-term borrowings resulted from differences
in the timing of lending opportunities and the growth of other funding sources
(deposits and proceeds from maturing securities). The Company's reliance on
these funds, while higher than a year ago, is still within parameters determined
by management to be prudent in terms of liquidity and interest rate sensitivity.
The Company's long-term debt at March 31, 1997, which totaled $7.4 million,
is comprised of advances from the Federal Home Loan Bank of Dallas.
INTEREST RATE SENSITIVITY
The primary objective of asset/liability management is controlling interest
rate risk. On a monthly basis, management monitors the sensitivity of net
interest income to changes in interest rates through methods that include
simulation and gap reports. Using these tools, management attempts to optimize
the asset/liability mix to minimize the impact of significant rate movements
within a broad range of interest rate scenarios. Management may alter the mix of
floating- and fixed-rate assets and liabilities, change pricing schedules and
enter into derivative contracts as means of minimizing interest rate risk.
On a limited basis, the Company has entered into interest rate and foreign
exchange rate swap, forward and option contracts to hedge interest rate or
foreign exchange risk on specific assets and liabilities. Derivative financial
instruments were entered into by one of the pooled companies to hedge against
exposure to changes in interest rates on the market value of the securities
available for sale portfolio. These derivatives were liquidated during the first
quarter of 1997. At March 31, 1996, the notional value of these derivatives was
$449.0 million. The fair value at that date of $1.7 million is included in the
securities available for sale portfolio. Hibernia held foreign exchange rate
forward contracts totaling $9.8 million at March 31, 1997, which minimize the
Company's exchange rate risk on loans to be repaid in foreign currencies.
Derivative financial instruments are also held or issued by the Company for
trading purposes to provide customers the ability to manage their own interest
rate and foreign exchange risk. In general, matched trading positions are
established to minimize risk to the Company. The notional value of these
instruments totaled $147.0 million at March 31, 1997. In addition to these
customer-related financial instruments, the Company has entered into contracts
for its own account which total $42.4 million. As of March 31, 1997, Hibernia's
credit exposure related to derivative financial instruments held for trading
totaled $1.0 million.
RESULTS OF OPERATIONS:
NET INTEREST INCOME
Taxable-equivalent net interest income for the three months ended March 31,
1997, totaled $102.0 million, a $14.1 million increase from the same period in
1996 and virtually unchanged from the fourth quarter of 1996.
Factors contributing to the increase in net interest income from the first
quarter of 1996 include: the effect of the purchased companies; the positive
effect of the change in the mix of earning assets from lower-yielding securities
to loans, which comprised 71.6% of average earning assets in the first quarter
of 1997 compared to 66.3% in the first quarter of 1996; overall growth in
earning assets; lower rates paid on deposits; and higher yields on securities.
These factors were partially offset by lower yields on loans. The increase in
net interest income due to the growth in earning assets in the first quarter of
1997 compared to the fourth quarter of 1996 was offset by a $1.7 million
decrease in income on nonaccrual or previously charged-off loans.
The net interest margin was 4.83% for the first quarter of 1997, unchanged
from the first quarter of 1996, and down 10 basis points from the fourth quarter
of 1996. The convergence of several factors in the first quarter of 1997
combined to depress the margin in the short term. Hibernia's Equity PrimeLine(R)
loan product and Tower Super SavingsSM accounts were introduced at attractive
introductory rates in the first quarter of 1997. Beginning in the second quarter
of 1997, the rates on these products will be tied to market rates. Growth of
funding sources in excess of loan growth resulted in the investment of funds in
lower-yielding short-term investments. The expiration of the introductory rates
on new products and the reinvestment of funds from short-term earning assets
into higher-yielding loans should result in improvement in the net interest
margin for the rest of 1997.
Table 6 details the net interest margin for the most recent five quarters.
Table 7 shows the composition of earning assets for the most recent five
quarters, revealing the change in the mix of earning assets.
<TABLE>
<CAPTION>
- -------------------------------------------------------------------------------------
TABLE 6 - NET INTEREST MARGIN (taxable-equivalent)
- -------------------------------------------------------------------------------------
1997 1996
- -------------------------------------------------------------------------------------
First Fourth Third Second First
Quarter Quarter Quarter Quarter Quarter
- -------------------------------------------------------------------------------------
<S> <C> <C> <C> <C> <C>
Yield on earning assets ............ 8.26% 8.33% 8.32% 8.34% 8.22%
Rate on interest-bearing liabilities 4.29 4.29 4.32 4.30 4.35
- -------------------------------------------------------------------------------------
Net interest spread ............ 3.97 4.04 4.00 4.04 3.87
Contribution of
noninterest-bearing funds ...... 0.86 0.89 0.88 0.91 0.96
- -------------------------------------------------------------------------------------
Net interest margin ............ 4.83% 4.93% 4.88% 4.95% 4.83%
- -------------------------------------------------------------------------------------
Noninterest-bearing funds
supporting earning assets ...... 20.16% 20.65% 20.24% 21.13% 22.11%
- -------------------------------------------------------------------------------------
</TABLE>
<TABLE>
<CAPTION>
- -------------------------------------------------------------------------------------------------
TABLE 7 - INTEREST-EARNING ASSET COMPOSITION
- -------------------------------------------------------------------------------------------------
1997 1996
- -------------------------------------------------------------------------------------------------
First Fourth Third Second First
(Percentage of average balances) Quarter Quarter Quarter Quarter Quarter
- -------------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C> <C>
Commercial loans ................ 27.8% 26.4% 26.0% 26.1% 25.0%
Small business banking loans .... 13.1 13.9 13.5 12.2 12.2
Consumer loans .................. 30.7 31.0 31.8 30.8 29.1
- -------------------------------------------------------------------------------------------------
Total loans ................. 71.6 71.3 71.3 69.1 66.3
- -------------------------------------------------------------------------------------------------
Securities available for sale ... 25.8 26.4 26.4 28.6 31.0
Short-term investments .......... 2.6 2.3 2.3 2.3 2.7
- -------------------------------------------------------------------------------------------------
Total interest-earning assets 100.0% 100.0% 100.0% 100.0% 100.0%
- -------------------------------------------------------------------------------------------------
</TABLE>
Table 8 presents an analysis of changes in taxable-equivalent net interest
income between the first quarter of 1997 and the fourth quarter of 1996 and
between the first quarter of 1997 and the first quarter of 1996.
<TABLE>
<CAPTION>
- -------------------------------------------------------------------------------------------------------------------
TABLE 8 - CHANGES IN TAXABLE-EQUIVALENT NET INTEREST INCOME (1)
- -------------------------------------------------------------------------------------------------------------------
First 1997 Compared to:
- -------------------------------------------------------------------------------------------------------------------
Fourth Quarter 1996 First Quarter 1996
- -------------------------------------------------------------------------------------------------------------------
Increase (Decrease) Due to Change In:
- -------------------------------------------------------------------------------------------------------------------
($ in thousands) Volume Rate Total Volume Rate Total
- -------------------------------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C> <C> <C>
Taxable-equivalent
interest earned on:
Commercial loans .............. $ 4,145 $(2,374) $ 1,771 $11,939 $(2,913) $ 9,026
Small business banking ........ (873) (617) (1,490) 5,188 14 5,202
Consumer loans ................ 1,056 (1,412) (356) 10,517 (840) 9,677
- -------------------------------------------------------------------------------------------------------------------
Loans ..................... 4,328 (4,403) (75) 27,644 (3,739) 23,905
- -------------------------------------------------------------------------------------------------------------------
Securities available for sale . 174 453 627 (1,177) 1,371 194
Short-term investments ........ 401 (73) 328 391 (46) 345
- -------------------------------------------------------------------------------------------------------------------
Total ................... 4,903 (4,023) 880 26,858 (2,414) 24,444
- -------------------------------------------------------------------------------------------------------------------
Interest paid on:
NOW accounts .................. (3) 43 40 957 99 1,056
Money market
deposit accounts .......... 438 214 652 112 (82) 30
Savings accounts .............. 358 422 780 798 437 1,235
Other consumer time ........... 151 (1,127) (976) 4,872 (2,616) 2,256
Public fund certificates of
deposit of $100,000 or more 479 (258) 221 2,249 (70) 2,179
Certificates of deposit
of $100,000 or more ....... (4) (145) (149) 1,991 (43) 1,948
Foreign deposits .............. 246 (18) 228 381 (48) 333
Federal funds purchased ....... (129) 10 (119) (109) 6 (103)
Repurchase agreements ......... 351 (97) 254 1,161 9 1,170
Long-term debt ................ 185 (13) 172 241 (1) 240
- -------------------------------------------------------------------------------------------------------------------
Total ................... 2,072 (969) 1,103 12,653 (2,309) 10,344
- -------------------------------------------------------------------------------------------------------------------
Taxable-equivalent
net interest income ........... $ 2,831 $(3,054) $ (223) $14,205 $ (105) $14,100
- -------------------------------------------------------------------------------------------------------------------
- ----------------
(1) Change due to mix (both volume and rate) has been allocated to volume and
rate changes in proportion to the relationship of the absolute dollar
amounts to the changes in each.
</TABLE>
The analysis of Consolidated Average Balances, Interest and Rates on the
following pages of this discussion presents the Company's taxable-equivalent net
interest income and average balances for the three months ended March 31, 1997,
December 31, 1996 and March 31, 1996.
<PAGE>
<TABLE>
<CAPTION>
- ----------------------------------------------------------------------------------------------------------------
CONSOLIDATED AVERAGE BALANCES, INTEREST AND RATES
- ----------------------------------------------------------------------------------------------------------------
Hibernia Corporation and Subsidiaries
Taxable-equivalent basis (1) First Quarter 1997
- ----------------------------------------------------------------------------------------------------------------
(Average balances $ in millions, Average
interest $ in thousands) Balance Interest Rate
- ----------------------------------------------------------------------------------------------------------------
<S> <C> <C> <C>
ASSETS
Interest-earning assets:
Commercial loans ............................................... $2,369.1 $ 51,087 8.75%
Small business banking loans ................................... 1,113.3 26,165 9.53
Consumer loans ................................................. 2,609.9 56,535 8.77
- ----------------------------------------------------------------------------------------------------------------
Total loans (2) ............................................ 6,092.3 133,787 8.90
- ----------------------------------------------------------------------------------------------------------------
Securities available for sale .................................. 2,193.7 37,097 6.78
Short-term investments ......................................... 224.2 2,933 5.30
- ----------------------------------------------------------------------------------------------------------------
Total interest-earning assets .............................. 8,510.2 $173,817 8.26%
- ----------------------------------------------------------------------------------------------------------------
Reserve for possible loan losses.................................... (123.9)
Noninterest-earning assets:
Cash and due from banks ........................................ 389.8
Other assets ................................................... 489.1
- ----------------------------------------------------------------------------------------------------------------
Total noninterest-earning assets ........................... 878.9
- ----------------------------------------------------------------------------------------------------------------
Total assets ............................................... $9,265.2
- ----------------------------------------------------------------------------------------------------------------
LIABILITIES AND
SHAREHOLDERS' EQUITY
Interest-bearing liabilities:
Interest-bearing deposits:
NOW accounts ............................................... $ 390.9 $ 2,932 3.04%
Money market deposit accounts .............................. 1,545.5 9,269 2.43
Savings accounts ........................................... 505.3 3,161 2.54
Other consumer time deposits ............................... 2,532.5 32,904 5.27
Public fund certificates of deposit
of $100,000 or more .................................... 965.4 13,001 5.46
Certificates of deposit of $100,000 or more ................ 362.9 4,566 5.10
Foreign time deposits ...................................... 67.7 877 5.25
- ----------------------------------------------------------------------------------------------------------------
Total interest-bearing deposits ........................ 6,370.2 66,710 4.25
- ----------------------------------------------------------------------------------------------------------------
Short-term borrowings:
Federal funds purchased .................................... 42.5 554 5.28
Repurchase agreements ...................................... 337.8 3,930 4.72
Debt ........................................................... 44.3 635 5.82
- ----------------------------------------------------------------------------------------------------------------
Total interest-bearing liabilities ......................... 6,794.8 $ 71,829 4.29%
- ----------------------------------------------------------------------------------------------------------------
Noninterest liabilities:
Demand deposits ................................................ 1,363.9
Other liabilities .............................................. 162.7
- ----------------------------------------------------------------------------------------------------------------
Total noninterest-bearing liabilities ...................... 1,526.6
- ----------------------------------------------------------------------------------------------------------------
Total shareholders' equity ......................................... 943.8
- ----------------------------------------------------------------------------------------------------------------
Total liabilities and shareholders' equity ................. $9,265.2
- ----------------------------------------------------------------------------------------------------------------
SPREAD AND NET YIELD
Interest rate spread................................................ 3.97%
Cost of funds supporting interest-earning assets.................... 3.43%
Net interest income/margin.......................................... $101,988 4.83%
- ----------------------------------------------------------------------------------------------------------------
- ----------
(1) Based on the statutory income tax rate of 35%.
(2) Yield computations include nonaccrual loans in loans outstanding.
</TABLE>
<PAGE>
<TABLE>
<CAPTION>
- ----------------------------------------------------------------------------------------------------------------
CONSOLIDATED AVERAGE BALANCES, INTEREST AND RATES (cont.)
- ----------------------------------------------------------------------------------------------------------------
Hibernia Corporation and Subsidiaries
Taxable-equivalent basis (1) Fourth quarter 1996
- ----------------------------------------------------------------------------------------------------------------
(Average balances $ in millions, Average
interest $ in thousands) Balance Interest Rate
- ----------------------------------------------------------------------------------------------------------------
<S> <C> <C> <C>
ASSETS
Interest-earning assets:
Commercial loans ............................................... $2,180.1 $ 49,316 9.00%
Small business banking loans ................................... 1,150.1 27,655 9.57
Consumer loans ................................................. 2,561.8 56,891 8.84
- ----------------------------------------------------------------------------------------------------------------
Total loans (2) ............................................ 5,892.0 133,862 9.04
- ----------------------------------------------------------------------------------------------------------------
Securities available for sale .................................. 2,183.4 36,470 6.68
Short-term investments ......................................... 193.7 2,605 5.35
- ----------------------------------------------------------------------------------------------------------------
Total interest-earning assets .............................. 8,269.1 $172,937 8.33%
- ----------------------------------------------------------------------------------------------------------------
Reserve for possible loan losses.................................... (131.5)
Noninterest-earning assets:
Cash and due from banks ........................................ 378.2
Other assets ................................................... 492.4
- ----------------------------------------------------------------------------------------------------------------
Total noninterest-earning assets ........................... 870.6
- ----------------------------------------------------------------------------------------------------------------
Total assets ............................................... $9,008.2
- ----------------------------------------------------------------------------------------------------------------
LIABILITIES AND
SHAREHOLDERS' EQUITY
Interest-bearing liabilities:
Interest-bearing deposits:
NOW accounts ............................................... $ 391.3 $ 32,892 2.94%
Money market deposit accounts .............................. 1,472.0 8,617 2.33
Savings accounts ........................................... 443.4 2,381 2.14
Other consumer time deposits ............................... 2,521.2 33,880 5.35
Public fund certificates of deposit
of $100,000 or more .................................... 930.1 12,780 5.47
Certificates of deposit of $100,000 or more ................ 363.3 4,715 5.16
Foreign time deposits ...................................... 48.8 649 5.30
- ----------------------------------------------------------------------------------------------------------------
Total interest-bearing deposits ........................ 6,170.1 65,914 4.25
- ----------------------------------------------------------------------------------------------------------------
Short-term borrowings:
Federal funds purchased .................................... 52.5 673 5.10
Repurchase agreements ...................................... 307.8 3,676 4.75
Debt ........................................................... 31.4 463 5.87
- ----------------------------------------------------------------------------------------------------------------
Total interest-bearing liabilities ......................... 6,561.8 $ 70,726 4.29%
- ----------------------------------------------------------------------------------------------------------------
Noninterest liabilities:
Demand deposits ................................................ 1,359.2
Other liabilities .............................................. 166.2
- ----------------------------------------------------------------------------------------------------------------
Total noninterest-bearing liabilities ...................... 1,525.4
- ----------------------------------------------------------------------------------------------------------------
Total shareholders' equity ......................................... 921.0
- ----------------------------------------------------------------------------------------------------------------
Total liabilities and shareholders' equity ................. $9,008.2
- ----------------------------------------------------------------------------------------------------------------
SPREAD AND NET YIELD
Interest rate spread................................................ 4.04%
Cost of funds supporting interest-earning assets.................... 3.40%
Net interest income/margin.......................................... $102,211 4.93%
- ----------------------------------------------------------------------------------------------------------------
- ----------
(1) Based on the statutory income tax rate of 35%.
(2) Yield computations include nonaccrual loans in loans outstanding.
</TABLE>
<PAGE>
<TABLE>
<CAPTION>
- ----------------------------------------------------------------------------------------------------------------
CONSOLIDATED AVERAGE BALANCES, INTEREST AND RATES (cont.)
- ----------------------------------------------------------------------------------------------------------------
Hibernia Corporation and Subsidiaries
Taxable-equivalent basis (1) First Quarter 1996
- ----------------------------------------------------------------------------------------------------------------
(Average balances $ in millions, Average
interest $ in thousands) Balance Interest Rate
- ----------------------------------------------------------------------------------------------------------------
<S> <C> <C> <C>
ASSETS
Interest-earning assets:
Commercial loans ............................................... $1,822.3 $ 42,061 9.28%
Small business banking loans ................................... 892.5 20,963 9.45
Consumer loans ................................................. 2,125.1 46,858 8.86
- ----------------------------------------------------------------------------------------------------------------
Total loans (2) ............................................ 4,839.9 109,882 9.13
- ----------------------------------------------------------------------------------------------------------------
Securities available for sale .................................. 2,264.7 36,903 6.52
Short-term investments ......................................... 194.4 2,588 5.34
- ----------------------------------------------------------------------------------------------------------------
Total interest-earning assets .............................. 7,299.0 $149,373 8.22%
- ----------------------------------------------------------------------------------------------------------------
Reserve for possible loan losses.................................... (149.8)
Noninterest-earning assets:
Cash and due from banks ........................................ 320.7
Other assets ................................................... 324.3
- ----------------------------------------------------------------------------------------------------------------
Total noninterest-earning assets ........................... 645.0
- ----------------------------------------------------------------------------------------------------------------
Total assets ............................................... $7,794.2
- ----------------------------------------------------------------------------------------------------------------
LIABILITIES AND
SHAREHOLDERS' EQUITY
Interest-bearing liabilities:
Interest-bearing deposits:
NOW accounts ............................................... $ 262.7 $ 1,876 2.87%
Money market deposit accounts .............................. 1,527.0 9,239 2.43
Savings accounts ........................................... 369.7 1,926 2.10
Other consumer time deposits ............................... 2,168.0 30,648 5.69
Public fund certificates of deposit
of $100,000 or more .................................... 798.5 10,822 5.45
Certificates of deposit of $100,000 or more ................ 204.7 2,618 5.14
Foreign time deposits ...................................... 38.5 544 5.68
- ----------------------------------------------------------------------------------------------------------------
Total interest-bearing deposits ........................ 5,369.1 57,673 4.32
- ----------------------------------------------------------------------------------------------------------------
Short-term borrowings:
Federal funds purchased .................................... 50.9 657 5.19
Repurchase agreements ...................................... 238.0 2,760 4.66
Debt ........................................................... 27.5 395 5.79
- ----------------------------------------------------------------------------------------------------------------
Total interest-bearing liabilities ......................... 5,685.5 $ 61,485 4.35%
- ----------------------------------------------------------------------------------------------------------------
Noninterest liabilities:
Demand deposits ................................................ 1,208.3
Other liabilities .............................................. 124.5
- ----------------------------------------------------------------------------------------------------------------
Total noninterest-bearing liabilities ...................... 1,332.8
- ----------------------------------------------------------------------------------------------------------------
Total shareholders' equity ......................................... 775.9
- ----------------------------------------------------------------------------------------------------------------
Total liabilities and shareholders' equity ................. $7,794.2
- ----------------------------------------------------------------------------------------------------------------
SPREAD AND NET YIELD
Interest rate spread................................................ 3.87%
Cost of funds supporting interest-earning assets.................... 3.39%
Net interest income/margin.......................................... $ 87,888 4.83%
- ----------------------------------------------------------------------------------------------------------------
- ----------
(1) Based on the statutory income tax rate of 35%.
(2) Yield computations include nonaccrual loans in loans outstanding.
</TABLE>
<PAGE>
NONINTEREST INCOME
Noninterest income for the first quarter of 1997 was up $4.6 million (17%)
to $32.0 million compared to the same period of 1996. Excluding nonrecurring
income related to a $1.4 million gain on the settlement of an acquired loan in
the first quarter of 1996, noninterest income was up $6.0 million (23%).
Approximately 40% of the increase was due to the purchased companies.
The major categories of noninterest income for the three months ended March
31, 1997 and 1996 are presented in Table 9.
<TABLE>
<CAPTION>
- -------------------------------------------------------------------------
TABLE 9 - NONINTEREST INCOME
- -------------------------------------------------------------------------
Three Months Ended
- -------------------------------------------------------------------------
Percentage
March 31 March 31 Increase
($ in thousands) 1997 1996 (Decrease)
- -------------------------------------------------------------------------
<S> <C> <C> <C>
Service charges on deposits ...... $16,074 $13,047 23%
Trust fees ....................... 3,469 3,268 6
Other service, collection and
exchange charges:
Mortgage loan servicing fees . 2,002 1,954 2
Retail investment service fees 2,575 1,848 39
ATM fees ..................... 2,037 1,567 30
Other ........................ 2,955 2,364 25
- -------------------------------------------------------------------------
Total other service, collection
and exchange charges ......... 9,569 7,733 24
- -------------------------------------------------------------------------
Other income ..................... 2,901 3,351 (13)
Securities gains (losses), net ... 15 67 (78)
- -------------------------------------------------------------------------
Total noninterest income ..... $32,028 $27,466 17%
- -------------------------------------------------------------------------
</TABLE>
Service charges on deposits increased $3.0 million (23%) for the first
quarter of 1997 over the comparable period in 1996. The purchased companies
accounted for about 60% of the increase. Growth in fee-generating deposit
accounts was the primary reason for the remainder of the increase.
Other service, collection and exchange fees were up $1.8 million (24%) in
the first quarter of 1997 compared to the first quarter of 1996, primarily due
to increases in retail investment service fees, ATM fees and debit and credit
card fees. Financial products attractive to consumers such as mutual funds,
annuities and discount brokerage services fueled the $0.7 million increase in
retail investment services. Hibernia's upgraded and expanded ATM network
resulted in a $0.5 million increase in ATM fees. Fees resulting from the
successful introductions in 1996 of Hibernia's CheckmateSM debit card and
Capital Access(C) credit card for small businesses led to a $0.7 million
increase in card-generated income.
Excluding the nonrecurring $1.4 million gain in the first quarter of 1996
previously mentioned, other income was up $1.0 million (49%) for the first
quarter of 1997 compared to the same period in 1996. The increase was primarily
due to $0.3 million in income from the Company's private equity investment
activity initiated in the second quarter of 1996 and $0.1 million increase in
income from Hibernia's joint venture with a major mortgage company that
originates, underwrites, closes and services multi-family housing loans under a
FNMA program.
NONINTEREST EXPENSE
For the first quarter of 1997, noninterest expense totaled $85.0 million, a
$12.3 million (17%) increase from the first quarter of 1996. Amortization of
intangibles and noninterest expense associated with the purchased companies
accounted for over 60% of the increase, with the remainder primarily due to
increases in staff costs and equipment expenses. Included in noninterest expense
are $0.9 million and $2.1 million, in the first quarter of 1997 and 1996,
respectively, related to Hibernia's strategic improvement process, Vision 2000.
Through customer-focused business process redesign and technology enhancements,
this corporate-wide effort will provide opportunities to increase revenues and
reduce costs. In addition, Vision 2000 is creating a culture that will
facilitate continuous improvement. Noninterest expense for the three months
ended March 31, 1997 and 1996 is presented by major category in Table 10.
<TABLE>
<CAPTION>
- ---------------------------------------------------------------------------
TABLE 10 - NONINTEREST EXPENSE
- ---------------------------------------------------------------------------
Three Months Ended
- ---------------------------------------------------------------------------
Percentage
March 31 March 31 Increase
($ in thousands) 1997 1996 (Decrease)
- ---------------------------------------------------------------------------
<S> <C> <C> <C>
Salaries ........................ $35,745 $30,437 17%
Benefits ........................ 7,105 6,813 4
- ---------------------------------------------------------------------------
Total staff costs ........... 42,850 37,250 15
- ---------------------------------------------------------------------------
Occupancy, net .................. 7,318 6,323 16
Equipment ....................... 6,847 5,498 25
- ---------------------------------------------------------------------------
Total occupancy and equipment 14,165 11,821 20
- ---------------------------------------------------------------------------
Data processing ................. 4,520 5,304 (15)
Telecommunications .............. 2,757 2,223 24
Advertising and promotional
expenses .................... 2,910 2,407 21
Postage ......................... 2,183 1,530 43
Stationery and supplies ......... 1,744 1,619 8
Professional fees ............... 1,481 1,523 (3)
Regulatory expense .............. 575 296 94
Loan collection expense ......... 765 505 52
Foreclosed property expense, net (324) (715) (55)
Amortization of intangibles ..... 3,566 960 271
Other ........................... 7,778 7,986 (3)
- ---------------------------------------------------------------------------
Total noninterest expense ... $84,970 $72,709 17%
- ---------------------------------------------------------------------------
Efficiency ratio (1) 63.41% 63.07%
Tangible efficiency ratio (2) 60.94% 62.39%
- ---------------------------------------------------------------------------
(1) Noninterest expense as a percentage of taxable-equivalent net interest
income plus non-interest income (excluding securities transactions).
(2) Noninterest expense (excluding amortization of purchase accounting
intangibles) as a percentage of taxable-equivalent net interest income plus
noninterest income (excluding securities transactions).
</TABLE>
Staff costs, the largest component of noninterest expense, increased $5.6
million (15%) in the first quarter of 1997 compared to the same period a year
ago. The purchased companies accounted for almost half of the increase, while
higher accruals for incentives and bonuses (reflecting Hibernia's improved
performance) and normal merit increases were other major factors contributing to
the increase in staff costs.
Occupancy and equipment expenses increased $2.3 million (20%) in the first
quarter of 1997 compared to the first quarter of 1996. Over half of the increase
was attributable to the purchased companies. Higher equipment expenses as a
result of the ATM upgrades, Vision 2000 investments and other technological
enhancements were other factors in this increase.
Data processing expenses decreased $0.8 million (15%) for the first quarter
of 1997 compared to the first quarter of 1996. A $1.4 million decrease in
expenses related to Vision 2000 more than offset the increased data processing
expenses related to the purchased companies.
Telecommunications expenses increased $0.5 million (24%), for the first
quarter of 1997 primarily due to expenses related to the Company's enhanced
communications capabilities, including the operation of its wide area network
and enhanced ATM network.
Advertising and promotional expenses increased $0.5 million (21%) in the
first quarter of 1997 compared to the same period in 1996 because of an increase
in advertising related to the introduction of the Tower Super SavingsSM and the
Hibernia Equity PrimeLine(R) accounts discussed previously, product development
activity and direct marketing. Postage increased $0.7 million (43%) in the first
quarter of 1997 compared to the same period in 1996, primarily due to increased
direct marketing efforts.
Regulatory expenses increased $0.3 million (94%) in the first quarter of
1997 compared to the first quarter of 1996. The lower expense levels in the
first quarter of 1996 are the result of the virtual elimination of FDIC premiums
for well-capitalized, highly-rated banks. Legislation enacted in the third
quarter of 1996 provided for assessments on banks (based on deposit levels) to
pay interest on bonds of the Financing Corporation (FICO). Hibernia's assessment
related to the FICO funding for the first quarter of 1997 was just over $0.2
million.
Amortization of intangibles, a noncash expense, increased $2.6 million to
$3.6 million in the first quarter of 1997 compared to the first quarter of 1996
due to the goodwill and core deposit intangibles created by the two purchase
transactions in late 1996. Goodwill that resulted from these transactions
totaling $120.1 million is being amortized on a straight-line basis over 25
years. Core deposit intangibles totaling $18.5 million is being amortized on an
accelerated basis over 10 years.
The Company's efficiency ratio, defined as noninterest expense as a
percentage of taxable-equivalent net interest income plus noninterest income
(excluding securities transactions), is a key measure that management uses to
evaluate the success of efforts to control costs while generating revenue
efficiently. The efficiency ratio at March 31, 1997 was 63.41% compared to
63.07% at March 31, 1996. The tangible efficiency ratio, which excludes
amortization of purchase accounting intangibles from the calculation, was 60.94%
for the first quarter of 1997, a 145 basis point improvement from 62.39% for the
same period of 1996. The improvement in efficiency for the first quarter of 1997
reflects increases in net interest income and noninterest income combined with
proportionately lower increases in noninterest expense.
INCOME TAXES
The Company recorded $16.3 million in income taxes in the first quarter of
1997, a $2.0 million (14%) increase from $14.3 million in the first quarter of
1996 as pretax income rose 16%.
Hibernia National Bank is subject to a Louisiana shareholder tax based
partly on income. The income portion of this tax is recorded as state income
tax. In addition, certain subsidiaries of the Company and Hibernia National Bank
are subject to Louisiana state income tax. Hibernia National Bank of Texas is
subject to Texas franchise tax.
CAPITAL
Shareholders' equity totaled $940.6 million at March 31, 1997, compared to
$775.1 million at March 31, 1996. The increase is primarily the result of net
income over the most recent 12 months totaling $114.3 million, and the issuance
of $100 million in preferred stock on September 30, 1996. These increases were
partially offset by $37.9 million in dividends declared on common stock, $3.5
million in dividends declared on preferred stock and the $14.2 million change in
unrealized gains (losses) on securities available for sale. Risk-based capital
and leverage ratios exceed the ratios required for designation as a
"well-capitalized" institution under regulatory guidelines. Table 11 presents
Hibernia's ratios along with selected components of the capital ratio
calculations for the most recent five quarters.
<TABLE>
<CAPTION>
- --------------------------------------------------------------------------------------------------
TABLE 11 - CAPITAL
- --------------------------------------------------------------------------------------------------
March 31 Dec. 31 Sept. 30 June 30 March 31
($ in millions) 1997 1996 1996 1996 1996
- --------------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C> <C>
Risk-based capital:
Tier 1 ..................... $ 801.0 $ 777.1 $ 778.1 $ 771.2 $ 750.8
Total ...................... 884.8 858.1 854.9 841.2 817.4
Assets:
Quarterly average assets (1) 9,111.5 8,850.9 8,015.8 7,840.2 7,759.6
Net risk-adjusted assets ... 6,672.3 6,438.3 6,094.4 5,520.3 5,243.3
Ratios:
Tier 1 risk-based capital .. 12.00% 12.07% 12.77% 13.97% 14.32%
Total risk-based capital ... 13.26% 13.33% 14.03% 15.24% 15.59%
Leverage ................... 8.79% 8.78% 9.71% 9.84% 9.68%
- --------------------------------------------------------------------------------------------------
- ----------
(1) Excluding SFAS No. 115 adjustment and disallowed intangibles.
</TABLE>
The two mergers completed during 1996 that were accounted for as purchase
transactions enabled Hibernia to leverage its capital, acquiring assets (and
earnings capacity) without increasing equity. As a result of these transactions,
the Company's capital ratios have declined from previous levels, but still
significantly exceed the standards required for designation as a
"well-capitalized" institution.
The Fixed/Adjustable Rate Noncumulative Preferred Stock issued on September
30, 1996 is nonconvertible and qualifies as Tier 1 capital. The issuance allowed
Hibernia to maintain its strong capital ratios and enhances its ability to act
when future opportunities arise. A shelf registration statement filed by the
Company in July 1996 with the Securities and Exchange Commission allows the
Company to issue up to $250 million of securities over a two-year period,
including preferred stock and subordinated debt. The remaining $150 million in
securities included in this shelf registration provide Hibernia with the
flexibility to quickly modify its capital structure to meet competitive and
market conditions.
LIQUIDITY
Liquidity is a measure of ability to fund loan commitments and meet deposit
maturities and withdrawals in a timely and cost-effective way. These needs can
be met by generating profits, attracting new deposits and converting assets
(such as short-term investments and securities available for sale) to cash.
Management monitors liquidity through a periodic review of maturity profiles,
yield and rate behaviors, and loan and deposit forecasts to minimize funding
risks.
The loan-to-deposit ratio, one measure of liquidity, was 78.1% at March 31,
1997, 77.3% at December 31, 1996, and 74.5% at March 31, 1996. Another indicator
of liquidity is the large liability dependence ratio, which measures reliance on
short-term borrowings and other large liabilities (such as large-denomination
and public fund CDs and foreign deposits). Based on average balances, 18.73% of
Hibernia's loans and investment securities were funded by net large liabilities
(total large liabilities less short-term investments) in the first quarter of
1997, unchanged from the fourth quarter of 1996 and up 274 basis points from
15.99% for the first quarter of 1996. Although short-term borrowings have
increased in the past year, a significant portion of the purchased funds results
from a cash management product that is just one part of a total customer
relationship, and thus is not subject to the same volatility as other sources of
noncore funds.
Attracting and retaining core deposits at competitive rates are the
Company's primary sources of liquidity. Hibernia's extensive retail office
network, aided by the introduction of new deposit products, provided $6.5
billion in core deposits at March 31, 1997, up $1.0 billion (17%) from $5.5
billion a year earlier. Large-denomination certificates of deposit, public
funds, and funds which can be purchased through the Banks' memberships in the
Federal Home Loan Bank of Dallas and from correspondent banks were additional
sources of liquidity. The Company can also raise additional funds through the
sale of securities registered on the shelf registration discussed in the Capital
section.
<PAGE>
HIBERNIA CORPORATION
PART II. OTHER INFORMATION
Item 1. Legal Proceedings
The Company and the Banks are parties to certain pending legal
proceedings arising from matters incidental to their business. In addition,
Hibernia National Bank has agreed in principle to a settlement of all litigation
pending against it related to the sale of collateral protection insurance, which
litigation was described in the Company's Form 10-Q for the quarter ended March
31, 1996. The terms of this settlement are being finalized and will be subject
to court approval once the parties have reached a final agreement. The Company
does not expect this settlement or any actions relating to pending legal
proceedings to have a material effect on the financial condition, results of
operations, or liquidity of the Company.
Item 6. Exhibits and Reports on Form 8-K
(a) Exhibits
(b) Reports on Form 8-K
None
SIGNATURES
Pursuant to the requirements of the Securities Exchange Act of 1934, the
registrant has duly caused this report to be signed on its behalf by the
undersigned thereunto duly authorized to sign on behalf of the registrant.
HIBERNIA CORPORATION
(Registrant)
Date: May 14, 1997 By: /s/ Ron E. Samford, Jr.
Ron E. Samford, Jr.
Executive Vice President and Controller
Chief Accounting Officer
WARNING: THE EDGAR SYSTEM ENCOUNTERED ERROR(S) WHILE PROCESSING THIS SCHEDULE.
<TABLE> <S> <C>
<ARTICLE> 9
<MULTIPLIER> 1000
<S> <C>
<PERIOD-TYPE> 3-MOS
<FISCAL-YEAR-END> DEC-31-1997
<PERIOD-END> MAR-31-1997
<CASH> 460,921
<INT-BEARING-DEPOSITS> 295
<FED-FUNDS-SOLD> 239,000
<TRADING-ASSETS> 0
<INVESTMENTS-HELD-FOR-SALE> 2,116,551
<INVESTMENTS-CARRYING> 0
<INVESTMENTS-MARKET> 0
<LOANS> 6,195,139
<ALLOWANCE> (119,878)
<TOTAL-ASSETS> 9,381,836
<DEPOSITS> 7,932,386
<SHORT-TERM> 357,111
<LIABILITIES-OTHER> 144,367
<LONG-TERM> 7,390
0
100,000
<COMMON> 247,685
<OTHER-SE> 592,898
<TOTAL-LIABILITIES-AND-EQUITY> 9,381,836
<INTEREST-LOAN> 132,841
<INTEREST-INVEST> 35,894
<INTEREST-OTHER> 2,933
<INTEREST-TOTAL> 171,668
<INTEREST-DEPOSIT> 66,710
<INTEREST-EXPENSE> 71,829
<INTEREST-INCOME-NET> 99,839
<LOAN-LOSSES> 0
<SECURITIES-GAINS> 15
<EXPENSE-OTHER> 84,970
<INCOME-PRETAX> 46,897
<INCOME-PRE-EXTRAORDINARY> 30,614
<EXTRAORDINARY> 0
<CHANGES> 0
<NET-INCOME> 30,614
<EPS-PRIMARY> 0.23
<EPS-DILUTED> 0.23
<YIELD-ACTUAL> 4.83
<LOANS-NON> 16,610
<LOANS-PAST> 4,829
<LOANS-TROUBLED> 0
<LOANS-PROBLEM> 18,942
<ALLOWANCE-OPEN> 127,768
<CHARGE-OFFS> 13,500
<RECOVERIES> 5,610
<ALLOWANCE-CLOSE> 119,878
<ALLOWANCE-DOMESTIC> 119,878
<ALLOWANCE-FOREIGN> 0
</TABLE>
