<PAGE>
SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
FORM 10-K
ANNUAL REPORT PURSUANT TO SECTION 13 OR 15 (d)
OF THE SECURITIES EXCHANGE ACT OF 1934
For the fiscal year ended December 31, 1996 Commission file No. 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 No.)
313 CARONDELET STREET, NEW ORLEANS, LOUISIANA 70130
(Address of principal executive offices) (Zip Code)
Registrant's telephone number, including area code: (504) 533-5332
Securities registered pursuant to Section 12 (b) of the Act:
CLASS A COMMON STOCK, NO PAR VALUE
(Title of class)
NEW YORK STOCK EXCHANGE
(Name of each exchange on which registered)
Securities registered pursuant to Section 12 (g) of the Act: NONE
Indicated 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 by check mark if disclosure of delinquent filers pursuant to Item 405
of Regulation S-K is not contained herein, and will not be contained, to the
best of Registrant's knowledge, in definitive proxy or information statements
incorporated by reference in Part III of this Form 10-K or any amendment to this
Form 10-K. [ X ]
State the aggregate market value of the voting stock held by
non-affiliates of the Registrant as of February 28, 1997.
Class A Common Stock, no par value $1,700,714,859
State the aggregate number of shares outstanding of each of
the Registrant's classes of common stock as of February 28, 1997.
Class A Common Stock, no par value - 128,917,331
DOCUMENTS INCORPORATED BY REFERENCE
Portions of the Registrant's annual report to shareholders for the year ended
December 31, 1996 are incorporated by reference into Parts I and II of this
Report.
Portions of the Registrant's definitive proxy statement, which was filed on
March 21, 1997, are incorporated by reference into Part III of this Report.
<PAGE>
INDEX TO FORM 10-K
Certain information required by Form 10-K is incorporated by reference
from the Annual Report as indicated below. Only that information expressly
incorporated by reference is deemed filed with the Commission.
PART I
Item 1 Business *
Item 2 Properties *
Item 3 Legal Proceedings *
Item 4 Submission of Matters to a Vote of Security Holders None
Item X Identification of Executive Officers *
PART II
Item 5 Market of the Registrant's Common Equity and Related
Stockholder Matters ***
Item 6 Selected Financial Data ***
Item 7 Management's Discussion and Analysis of Financial
Condition and Results of Operations ***
Item 8 Financial Statements and Supplementary Data ***
Item 9 Changes in and Disagreements with Accountants on
Accounting and Financial Disclosure None
PART III (1)
Item 10 Directors and Executive Officers of the Registrant
Item 11 Executive Compensation
Item 12 Security Ownership of Certain Beneficial Owners and Management
Item 13 Certain Relationships and Related Transactions
PART IV
Item 14 Exhibits, Financial Statement Schedules and Reports on Form 8-K
(a) Financial Statements
Report of Independent Auditors' ***
Hibernia Corporation and Subsidiaries:
Consolidated Balance Sheets - December 31,
1996 and 1995 ***
Consolidated Income Statements - Years
Ended December 31, 1996, 1995 and 1994 ***
Consolidated Statements of Changes in
Shareholders' Equity - Years Ended
December 31, 1996, 1995 and 1994 ***
Consolidated Statements of Cash Flows -
Years Ended December 31, 1996, 1995
and 1994 ***
Notes to Consolidated Financial Statements ***
(b) Reports on Form 8-K **
None
(c) Exhibits **
* This information is included in the Form 10-K and is not incorporated by
reference to the Annual Report.
** Reports on Form 8-K and Exhibits have been separately filed with the
Commission.
*** This information is included in EX-13.
(1) The material required by Items 10 through 13 is incorporated by reference to
the Company's definitive Proxy Statement filed with the Commission on March 21,
1997, however, the "Report of Executive Compensation Committee" and the
"Performance Graph" contained therein are not incorporated herein by reference.
<PAGE>
PART I
ITEM 1. BUSINESS
Hibernia Corporation (Company) is a bank holding company organized in
1972 and, as of December 31, 1996, was the largest bank holding company in
Louisiana with assets of $9.3 billion and deposits of $7.8 billion. The Company
operates two wholly owned bank subsidiaries. Hibernia National Bank was
chartered in Louisiana in 1933 and Hibernia National Bank of Texas, formerly The
Texarkana National Bank, was chartered in 1887 (Banks). On December 31, 1996,
the Company reentered the Texas market by acquiring Texarkana National
Bancshares, Inc., the holding company of The Texarkana National Bank. In
addition to the bank subsidiaries, the Company also owns two nonbank
subsidiaries, Hibernia Capital Corporation (HCC) and Zachary Taylor Life
Insurance Company (Zachary Taylor). HCC is a licensed Small Business Investment
Company formed in 1995 to provide equity capital and long-term loans to small
businesses. Zachary Taylor is currently inactive, and the Company has an
agreement with the Federal Reserve Bank whereby the Company will not actively
operate this subsidiary as an insurance company without Federal Reserve Board
approval.
As of December 31, 1996 the Company operated 201 banking locations in
29 Louisiana parishes and two Texas counties. During 1996, the Company completed
mergers with five institutions with combined assets of $1.6 billion and 48
offices. Since the beginning of 1994, 15 mergers have been completed involving
16 banks with combined assets of $3.4 billion and 111 offices. Two mergers
completed in 1996 were accounted for as purchase transactions. The other three
mergers in 1996 and all mergers completed in 1995 and 1994 were accounted for as
poolings of interests.
The Company offers a broad array of financial products and services,
including consumer, small business, commercial, international, mortgage and
private banking; leasing; corporate finance; treasury management; trust;
brokerage; and investments.
The Company also provides financial risk management products and
advisory services to customers. These products are designed to assist customers
in managing their exposure in the areas of interest rate, currency and commodity
risks. The Company offers repurchase agreements, bankers acceptances, eurodollar
deposits, safekeeping of securities, U.S. Government and Government agency
obligations, tax-free municipal obligations, reverse repurchase agreements,
letters of credit, and collection and foreign exchange transactions. At December
31, 1996, the Company performed mortgage servicing, which includes acceptance
and application of mortgage loan and escrow payments, for over 37,000
residential loans.
In addition, the Company offers a variety of agency, fiduciary,
investment advisory, employee benefit and custodial services. Through Tower
Investors, Inc., its wholly owned subsidiary, Hibernia National Bank sells fixed
and variable annuities in retail markets. The Company also provides retail and
discount brokerage services through a wholly owned subsidiary of Hibernia
National Bank, Hibernia Investment Securities, Inc. (HISI). HISI is a registered
broker-dealer and member of the National Association of Securities Dealers, Inc.
<PAGE>
COMPETITION
The financial services industry in which the Company operates is highly
competitive. The Banks compete with national and state banks for deposits,
loans, and trust accounts and with savings and loan associations and credit
unions for loans and deposits. In addition, the Banks compete with other
providers of financial services, from both inside and outside Louisiana and
Texas, including finance companies, institutional buyers of commercial paper,
money market funds, brokerage firms, investment companies, insurance companies
and governmental agencies. These competitors are actively engaged in marketing
various types of loans, commercial paper, short-term obligations, investments
and other services.
SUPERVISION AND REGULATION
The banking industry is extensively regulated under both federal and
state law. The Company is subject to regulation under the Bank Holding Company
Act of 1956 (BHCA) and to supervision by the Board of Governors of the Federal
Reserve System (FRB). The BHCA requires the Company to obtain the prior approval
of the FRB for bank acquisitions, limits the acquisition of shares of
out-of-state banking organizations unless permitted by state law and prescribes
limitations on the nonbanking activities of the Company. The Banks are subject
to regulation and examination by the Office of the Comptroller of the Currency
(OCC).
The Federal Deposit Insurance Corporation Improvement Act of 1991
(FDICIA) further expanded the regulatory and enforcement powers of bank
regulatory agencies. Among the significant provisions of FDICIA is the
requirement that bank regulatory agencies prescribe standards relating to
internal controls, information systems, loan documentation, credit underwriting,
interest rate exposure, asset growth, compensation, fees and benefits.
FDICIA mandates annual examinations of banks by their primary regulators.
The banking industry is affected by the monetary and fiscal policies of
the FRB. An important function of the FRB is to regulate the national supply of
bank credit to moderate recessions and to curb inflation. Among the instruments
of monetary policy used by the FRB to implement its objectives are: open-market
operations in U.S. Government securities, changes in the discount rate and the
federal funds rate (which is the rate banks charge each other for overnight
borrowings) and changes in reserve requirements on bank deposits.
HISI is regulated by the Securities and Exchange Commission, the
National Association of Securities Dealers, Inc., and the Louisiana Office of
Financial Institutions through the Deputy Commissioner of Securities. HCC is
regulated by the Small Business Administration. Zachary Taylor is regulated by
the Louisiana Commissioner of Insurance. The Louisiana Commissioner of Insurance
also regulates the licensing of Tower Investors, Inc. and those persons engaged
in the sale of fixed annuities and insurance products. The Texas Commissioner of
Insurance performs a similar function in Texas, although Hibernia National Bank
of Texas is not currently engaged in the types of activities regulated by the
Texas Commissioner of insurance other than the sale of credit life insurance.
<PAGE>
LOAN PORTFOLIO
The amounts and percentages of loans outstanding by type are as
follows:
<TABLE>
<CAPTION>
- ------------------------------------------------------------------------------------------------------------------------------------
($ in thousands) 1996 1995 1994 1993 1992
- ------------------------------------------------------------------------------------------------------------------------------------
% of % of % of % of % of
Amount Total Amount Total Amount Total Amount Total Amount Total
<S> <C> <C> <C> <C> <C> <C> <C> <C> <C> <C>
Commercial, financial
and agricultural ..... $1,722,301 29% $1,282,553 27% $ 942,125 25% $ 799,743 24% $ 890,256 26%
Real estate - construction 65,289 1 35,066 1 53,606 1 48,810 1 32,253 1
Real estate - mortgage . 2,676,515 44 2,150,796 46 1,849,317 48 1,806,526 53 1,854,984 55
Consumer ............... 1,351,711 22 1,146,355 24 871,542 23 637,770 19 531,642 16
Lease financing ........ 16,162 1 -- -- -- -- -- -- -- --
All other .............. 211,050 3 108,423 2 102,330 3 96,313 3 53,538 2
- ------------------------------------------------------------------------------------------------------------------------------------
$6,043,028 100% $4,723,193 100% $3,818,920 100% $3,389,162 100% $3,362,673 100%
- ------------------------------------------------------------------------------------------------------------------------------------
</TABLE>
SELECTED LOAN MATURITIES
The following table shows selected categories of loans outstanding as
of December 31, 1996, which, based on remaining scheduled repayments of
principal, are due in the periods indicated. In addition, the amounts
contractually due after one year are summarized according to their interest
sensitivity.
<TABLE>
<CAPTION>
Maturing
- --------------------------------------------------------------------------------------------------------
After One
Within But Within After
($ in thousands) One Year Five Years Five Years Total
- --------------------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C>
Commercial, financial and
agricultural ........... $542,824 $873,213 $ 306,264 $1,722,301
Real estate - construction 44,757 16,941 3,591 65,289
- --------------------------------------------------------------------------------------------------------
$587,581 $890,154 $ 309,855 $1,787,590
========================================================================================================
Interest Sensitivity
- --------------------------------------------------------------------------------------------------------
Fixed Variable
Rate Rate
- --------------------------------------------------------------------------------------------------------
Due after one but within five years $194,693 $695,461
Due after five years .............. 52,489 257,366
- --------------------------------------------------------------------------------------------------------
$247,182 $952,827
========================================================================================================
</TABLE>
SUMMARY OF LOAN LOSS EXPERIENCE
The following is a summary of activity in the reserve for possible loan
losses:
<TABLE>
<CAPTION>
Year Ended December 31
- ----------------------------------------------------------------------------------------------------------
($ in thousands) 1996 1995 1994 1993 1992
- ----------------------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C> <C>
Balance of reserve for
possible loan losses
at beginning of period ..... $ 150,516 $ 156,005 $ 186,562 $ 211,820 $ 235,165
Addition due to purchased
companies .................. 5,611 -- -- 359 --
Loans charged off:
Commercial, financial,
and agricultural ......... (5,880) (5,723) (7,653) (12,377) (38,899)
Real estate - construction . (76) (14) (54) (417) (1,587)
Real estate - mortgage ..... (2,630) (4,980) (11,689) (11,866) (36,599)
Consumer ................... (26,046) (14,264) (12,123) (18,134) (21,154)
All other .................. (243) (4) (1) -- (311)
------------------------------------------------------------------------------
Total loans charged
off .................... (34,875) (24,985) (31,520) (42,794) (98,550)
Recoveries of loans
previously charged off:
Commercial, financial,
and agricultural ......... 6,688 7,868 7,490 7,136 6,890
Real estate - construction . 138 235 97 181 250
Real estate - mortgage ..... 4,477 5,194 7,107 7,700 5,941
Consumer ................... 7,435 4,961 4,069 4,883 4,911
All other .................. 403 98 69 63 422
------------------------------------------------------------------------------
Total recoveries ......... 19,141 18,356 18,832 19,963 18,414
------------------------------------------------------------------------------
Net loans charged off ........ (15,734) (6,629) (12,688) (22,831) (80,136)
Additions to reserve
charged to operating
expense .................... (12,625) 1,140 (17,869) (2,786) 72,297
Reduction due to sale
of Texas bank .............. -- -- -- -- (15,506)
------------------------------------------------------------------------------
Balance at end of period ..... $ 127,768 $ 150,516 $ 156,005 $ 186,562 $ 211,820
==============================================================================
Ratio of net charge-offs
to average loans outstanding 0.30% 0.16% 0.36% 0.70% 2.04%
==============================================================================
</TABLE>
<PAGE>
ALLOCATION OF RESERVE FOR LOAN LOSSES
The reserve for possible loan losses has been allocated according to
the amount deemed to be reasonably necessary to provide for the possibility of
losses being incurred within the categories of loans set forth in the table
below. See "Reserve and Provision for Possible Loan Losses" in Management's
Discussion and Analysis of Financial Condition and Results of Operations in the
Registrant's Annual Report to Shareholders for a discussion of the factors which
influence management's judgment in determining the adequacy of the reserve for
possible loan losses.
<TABLE>
<CAPTION>
- -----------------------------------------------------------------------------------------
($ in thousands) 1996 1995 1994 1993 1992
- -----------------------------------------------------------------------------------------
<S> <C> <C> <C> <C> <C>
Reserve at end of period:
Commercial, financial and
agricultural .......... $ 17,615 $ 31,678 $ 41,937 $ 57,018 $ 54,791
Real estate - construction 493 481 1,104 1,254 1,070
Real estate - mortgage ... 18,561 38,238 55,130 75,446 67,424
Consumer ................. 59,400 34,419 21,134 19,044 22,435
Not allocated ............ 31,699 45,700 36,700 33,800 66,100
-------------------------------------------------------------
$127,768 $150,516 $156,005 $186,562 $211,820
=============================================================
</TABLE>
MATURITIES OF LARGE-DENOMINATION CERTIFICATES OF DEPOSIT
The following table shows large-denomination certificates of deposit as
of December 31, 1996 by remaining maturity.
<TABLE>
<CAPTION>
- ------------------------------------------------------------
($ in thousands) Domestic Foreign
- ------------------------------------------------------------
<S> <C> <C>
3 months or less .............. $ 736,278 $71,015
Over 3 months through 6 months 328,496 --
Over 6 months through 12 months 170,603 --
Over 12 months through 5 years 72,384 --
Over 5 years .................. 18,239 --
- ------------------------------------------------------------
Total .................... $1,326,000 $71,015
============================================================
</TABLE>
<PAGE>
SHORT-TERM BORROWINGS
The following table summarizes pertinent data related to federal funds
purchased and securities sold under agreements to repurchase for 1996, 1995 and
1994. Funds purchased and securities sold under agreements to repurchase
generally mature within one to 14 days from the transaction date.
<TABLE>
<CAPTION>
- -----------------------------------------------------------------------
($ in thousands) 1996 1995 1994
- -----------------------------------------------------------------------
<S> <C> <C> <C>
Outstanding at December 31 ... $331,796 $265,126 $173,490
Maximum month-end outstandings 363,496 359,582 202,737
Average daily outstandings ... 320,654 259,647 175,499
Average rate during the year . 4.8% 5.3% 3.6%
Average rate at year end ..... 5.0% 4.8% 3.7%
</TABLE>
ITEM 2. PROPERTIES
The Company's executive offices are located in downtown New Orleans,
Louisiana, in the downtown branch office of Hibernia National Bank. The Company
leases its main office building and operations center under the terms of
sale/leaseback agreements. The Company and the Banks consider all properties
owned or leased to be suitable and adequate for their intended purposes and
consider the terms of existing leases to be fair and reasonable.
On December 31, 1996 the Banks reported miscellaneous property with a
net book value of $8,876,000. These properties include $5,206,000 of properties
acquired from borrowers either as a result of foreclosures or voluntarily in
full or partial satisfaction of indebtedness previously contracted and
$3,670,000 of duplicate or excess bank-owned premises. See "Asset Quality" in
Management's Discussion and Analysis of Financial Condition and Results of
Operations in the Registrant's Annual Report for a further discussion of these
properties.
ITEM 3. LEGAL PROCEEDINGS
The Company and the Banks are parties to certain pending legal
proceedings arising from matters incidental to their business. Management is of
the opinion that these actions will not have a material effect on the financial
condition, results of operations, or liquidity of the Company.
<PAGE>
ITEM X. IDENTIFICATION OF EXECUTIVE OFFICERS
Each executive officer of the Company and Hibernia National Bank holds
his or her position until the earlier of (a) their removal or resignation from
office, (b) their successor is appointed by the Board of Directors, or (c) such
time that the Board no longer deems their position to be that of an executive
officer.
J. HERBERT BOYDSTUN, 51, Regional Chairman, Southwest Louisiana of the
Company and Hibernia National Bank, assumed those responsibilities in 1996. Mr.
Boydstun served as Regional Chairman, Southcentral/Northeast Louisiana from 1995
to 1996 and as Regional Chairman, Northeast Louisiana from August 1994 until
1995. Mr. Boydstun joined the Company in August 1994 following the merger of
First Bancorp of Louisiana, Inc., a bank holding company headquartered in West
Monroe, Louisiana, with and into the Company, where he served as President of
First Bancorp and as Chairman and Chief Executive Officer of First National Bank
of West Monroe, the primary national banking subsidiary of First Bancorp, from
1982 to 1994. Mr. Boydstun also serves on the Boards of Directors of the Company
and Hibernia National Bank.
E.R. "BO" CAMPBELL, 55, Regional Chairman, Northern Louisiana of the
Company and Hibernia National Bank, is responsible for the operations of
Hibernia National Bank in North Louisiana and assumed responsibilities for
Northeast Texas at year end 1996. Mr. Campbell also serves on the Boards of
Directors of the Company and Hibernia National Bank. Mr. Campbell assumed his
position at Hibernia National Bank in January 1995 following the merger of
Pioneer Bancshares Corporation, a bank holding company headquartered in
Shreveport, Louisiana, with and into the Company. Mr. Campbell served from 1992
to 1994 as Chairman of the Board of Pioneer Bancshares and its Louisiana banking
subsidiary, Pioneer Bank & Trust Company, and served as President of Pioneer
Bancshares from 1977 to 1992.
K. KIRK DOMINGOS III, 55, Senior Executive Vice President/Support
Services of the Company and Hibernia National Bank, is responsible for the
overall administrative functions of Hibernia National Bank. Mr. Domingos has
been employed by the Company and/or its subsidiaries since August 1975 and
assumed the position of Senior Executive Vice President responsible for Support
Services in August 1994 and the position of Executive Vice President and
Administrative Executive of Hibernia National Bank in August 1991.
B.D. FLURRY, 55, serves as Regional President, Northern Louisiana for
the Company and Hibernia National Bank, a position he has held since January
1995. Prior to joining Hibernia, Mr. Flurry served as President (from 1991
through 1994) of Pioneer Bank & Trust Company, a subsidiary of Pioneer
Bancshares Corporation, a bank holding company headquartered in Shreveport,
Louisiana that merged with and into Hibernia in January 1995. Mr. Flurry assumed
primary responsibility for oversight of the Texarkana, Texas market at year-end
1996.
MARSHA M. GASSAN, 44, serves as Senior Executive Vice President and
Chief Financial Officer of the Company and Hibernia National Bank, positions
which she assumed in April 1996. Prior to that time, Ms. Gassan served as
Executive Vice President, General Auditor and manager of Credit Risk Management
of the Company and Hibernia National Bank (from 1994 to 1996), and as Senior
Vice President and manager of Credit Risk Management (from 1992 to 1994).
STEPHEN A. HANSEL, 49, serves as President and Chief Executive Officer
of the Company and Hibernia National Bank, which positions he assumed in March
1992. Mr. Hansel also serves on the Boards of Directors of the Company and
Hibernia National Bank.
RUSSELL S. HOADLEY, 52, serves as Executive Vice President/Employee and
Public Relations for the Company and Hibernia National Bank, a position he
assumed in 1994. From the time he joined the Company in July 1993 until this
promotion in 1994, Mr. Hoadley served as Senior Vice President/Public Affairs
and Marketing for the Company. Prior to joining the Company, Mr. Hoadley served
as Vice President/Director of Corporate Communications for Barnett Banks, Inc.,
a bank holding company based in Jacksonville, Florida, which position he held
from 1988 to June 1993.
SCOTT P. HOWARD, 49, serves as Senior Executive Vice President/Arena
Executive for Commercial Banking for the Company and Hibernia National Bank and
has served in that position since March 1996. From May 1992 until that time, Mr.
Howard served as Executive Vice President/Corporate and International Banking
for Hibernia National Bank.
RONALD E. SAMFORD, JR., 44, serves as Executive Vice President and
Controller of the Company and Hibernia National Bank and Chief Accounting
Officer of the Company, which positions he has held since November 1992. Prior
to joining Hibernia, Mr. Samford served as Senior Vice President and Chief
Accounting Officer of TeamBank, a bank headquartered in Forth Worth, Texas from
August 1990 to November 1992.
RICHARD L. "IKE" STAGE, 52, serves as Senior Executive Vice
President/Arena Executive for Consumer Banking for the Company and Hibernia
National Bank, positions he assumed in March 1996. Prior to joining the Company,
Mr. Stage served as Executive Vice President and Director of Community Banking
(from 1994 to 1995) and as Executive Vice President and Director of
Complimentary Delivery Systems (from 1991 to 1993) for Huntington National Bank,
a national bank headquartered in Columbus, Ohio. During 1994 and 1995, Mr. Stage
served as an Executive Vice President and the head of retail banking for
Huntington Bancshares, the parent holding company of Huntington National Bank.
RICHARD G. WRIGHT, 47, serves as Senior Executive Vice President and
Chief Credit Officer of the Company and Hibernia National Bank, a position which
he assumed in March 1996. From August 1994 until that time, Mr. Wright served as
Executive Vice President/Credit Policy and Analysis of Hibernia National Bank,
and he served as Senior Vice President in the Credit and Asset Quality area of
Hibernia National Bank from the time he joined the Company in May 1992 until
August 1994. Prior to joining the Company, Mr. Wright served as President and
Chief Operating Officer for ACTION, Inc., a manufacturer of Western saddles and
tack, headquartered in McKinney, Texas.
<PAGE>
SIGNATURES
Pursuant to the requirements of Section 13 or 15(d) 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.
HIBERNIA CORPORATION
(Registrant)
/s/Stephen A. Hansel
Stephen A. Hansel, President and
Chief Executive Officer
Pursuant to the requirements of the Securities Exchange Act of 1934,
this report has been signed on March 26, 1997, by the following persons on
behalf of the Registrant and in the capacities indicated.
/s/Marsha M. Gassan /s/Ronald E. Samford, Jr.
Marsha M. Gassan Ronald E. Samford, Jr.
Senior Executive Vice President Executive Vice President & Controller
Chief Financial Officer Chief Accounting Officer
Robert H. Boh*, Director Sidney W. Lassen*, Director
J. Herbert Boydstun*, Director Laura A. Leach*, Director
J. Terrell Brown*, Director Donald J. Nalty*, Director
E.R. "Bo" Campbell*, Director William C. O'Malley*, Director
Richard W. Freeman, Jr.*, Director Robert T. Ratcliff*, Director
Stephen A. Hansel*, Director Duke Shackelford*, Director
Dick H. Hearin*, Director James H. Stone*, Director
Robert T. Holleman*, Director Janee M. Tucker*, Director
Hugh J. Kelly*, Director Virginia E. Weinmann*, Director
Elton R. King*, Director Robert E. Zetzmann*, Director
*By: /s/ Patricia C. Meringer
Patricia C. Meringer
Attorney-in-fact
<PAGE>
EXHIBIT INDEX
EXHIBIT
3.1 Articles of Incorporation of the Registrant, as amended to date
3.2 By-Laws of the Registrant, as amended to date (incorporated herein by
reference to Exhibit 3.1 to the Registrant's Annual Report on Form 10-K
for the fiscal year ended December 31, 1995)
4.1 Pursuant to Item 601(b) (4) (iii) of Regulation S-K, instruments
defining the rights of holders of long-term debt of the Registrant and
its consolidated subsidiaries are not being filed as the total amount
of securities authorized thereunder does not exceed 10% of the total
assets of the Registrant and its subsidiaries on a consolidated basis.
The Registrant hereby agrees to furnish copies of such instruments to
the Commission upon request.
10.13 Exhibit 10.13 to the Annual Report on Form 10-K for the fiscal year
ended December 31, 1988, filed with the Commission by the Registrant
(Commission File No. 0-7220) is hereby incorporated by reference
(Deferred Compensation Plan for Outside Directors of Hibernia
Corporation and its Subsidiaries, as amended to date)
10.14 Exhibit 10.14 to the Annual Report on Form 10-K for the fiscal year
ended December 31, 1990, filed with the Commission by the Registrant
(Commission File No. 0-7220) is hereby incorporated by reference
(Hibernia Corporate Executive Life Insurance Plan)
10.16 Exhibit 4.7 to the Registration Statement on Form S-8 filed with the
Commission by the Registrant (Registration No. 33-26871) is hereby
incorporated by reference (Hibernia Corporation 1987 Stock Option Plan,
as amended to date)
10.28 Exhibit M and N to the Registrant's definitive proxy statement dated
September 27, 1992 relating to its 1992 Annual Meeting of Shareholders
filed with the Commission by the Registrant is hereby incorporated by
reference (Warrant Agreement dated as of May 27, 1992 among the
Registrant, The Chase Manhattan Bank (National Association) and certain
other lenders, including the Form of Warrant attached thereto)
10.29 Exhibit L to the Registrant's definitive proxy statement dated
September 27, 1992 relating to its 1992 Annual Meeting of Shareholders
filed with the Commission by the Registrant is hereby incorporated by
reference (Registration Rights Agreement dated as of May 27, 1992 among
the Registrant, The Chase Manhattan Bank (National Association) and
certain other lenders, as amended to date)
10.34 Exhibit C to the Registrant's definitive proxy statement dated
September 27, 1992 relating to its 1992 Annual Meeting of Shareholders
filed by the Registrant with the Commission is hereby incorporated by
reference (Long-Term Incentive Plan of Hibernia Corporation, as amended
to date)
10.35 Exhibit A to the Registrant's definitive proxy statement dated March
23, 1993 relating to its 1993 Annual Meeting of Shareholders filed by
the Registrant with the Commission is hereby incorporated by reference
(1993 Director Stock Option Plan of Hibernia Corporation)
10.36 Exhibit 10.36 to the Registrant's Annual Report on Form 10-K for the
fiscal year ended December 31, 1993 filed with the Commission
(Commission File No. 0-7220) is hereby incorporated by reference
(Employment Agreement between Stephen A. Hansel and Hibernia
Corporation)
10.37 Exhibit 10.37 to the Registrant's Annual Report on Form 10-K for the
fiscal year ended December 31, 1994 filed with the Commission
(Commission File No. 0-7220) is hereby incorporated by reference
(Employment Agreement between J. Herbert Boydstun and Hibernia
Corporation)
10.38 Exhibit 10.38 to the Registrant's Annual Report on Form 10-K for the
fiscal year ended December 31, 1993 filed with the Commission
(Commission File No. 0-7220) is hereby incorporated by reference
(Employment Agreement between E.R. "Bo" Campbell and Hibernia
Corporation)
10.39 Employment Agreement between B.D. Flurry and Hibernia Corporation
10.40 Split-Dollar Life Insurance Plan of the Registrant effective as of July
1996.
10.41 Nonqualified Deferred Compensation Plan for Key Management Employees of
the Registrant effective as of July 1996.
10.42 Supplemental Stock Compensation Plan for Key Management Employees
effective as of July 1996.
10.43 Nonqualified Target Benefit (Deferred Award) Plan of the Registrant
effective as of July 1996.
13 1996 Annual Report to security holders of the Registrant.
Such Annual Report, except for those portions thereof which are
expressly incorporated by reference into this report, is furnished for
the information of the Commission and is not deemed "filed" as part of
this report.
21 Subsidiaries of the Registrant
23 Consent of Independent Auditors
24 Powers of Attorney
27 Financial Data Schedule
99.1 Exhibit 99.1 to the Annual Report on Form 10-K dated June 24, 1996
filed with the Commission is hereby incorporated by reference (Annual
Report of the Retirement Security Plan for the fiscal year ended
December 31, 1995)
99.2 Exhibit 99.2 to the Annual Report on Form 10-K dated June 24, 1996
filed with the Commission is hereby incorporated by reference (Annual
Report of the Employee Stock Ownership Plan and Trust for the fiscal
year ended December 31, 1995)
<PAGE>
EXHIBIT 3.1
ARTICLES OF INCORPORATION
HIBERNIA CORPORATION
NEW ORLEANS, LOUISIANA
EFFECTIVE
AS OF
SEPTEMBER 30, 1996
ARTICLES OF INCORPORATION
ARTICLE I
NAME
The name of the corporation is HIBERNIA CORPORATION.
ARTICLE II
PURPOSES
The purposes of the Corporation are to engage in any and all lawful
activities for which corporations may be formed under the Louisiana Business
Corporation Law, the Louisiana Bank Holding Company Act, as either is now or
hereafter amended, and any other applicable law of the State of Louisiana.
ARTICLE III
CAPITAL STOCK
1. The total number of shares of all classes of stock which the
Corporation shall have authority to issue is three hundred million
(300,000,000), of which two hundred million (200,000,000) shares shall be
designated as Class A Common Stock of no par value and one hundred million
(100,000,000) shares shall be designated as Preferred Stock, without par value.
The designations, voting powers, preferences and relative participating, option
or other special rights, and the qualifications, limitations or restrictions of
the above classes of stock of the Corporation, and the authority with respect
thereto expressly vested in the Board of Directors of the Corporation, shall be
as set forth in this Article III.
2. No holder of any shares of either the Class A Common Stock or
Preferred Stock of the Corporation shall, as such holder, have any preemptive or
preferential right to receive, purchase or subscribe for (a) any unissued or
treasury shares of any class of stock (whether now or hereafter authorized) of
the Corporation, (b) any obligations, evidences of indebtedness or other
securities of the Corporation convertible into or exchangeable for, or carrying
or accompanied by any rights to receive, purchase or subscribe for, any such
unissued or treasury shares, (c) any right of subscription for or to receive, or
any warrant or option for the purchase of, any of the foregoing securities or
(d) any other securities that may be issued or sold by the Corporation, other
than such right or rights, if any, as the Board of Directors of the Corporation,
in its sole and absolute discretion, may determine at any time or from time to
time.
3. The Board of Directors may provide for payment of either the Class A
Common Stock or Preferred Stock of the Corporation in cash, property or
services. Any and all shares of stock so issued for which the consideration so
fixed has been paid or delivered shall be deemed fully paid and not liable to
any further call or assessment.
4. Except as otherwise required by law or these Articles, the holders
of shares of the Preferred Stock and of all series thereof who are entitled to
vote shall vote together with the holders of the Class A Common Stock and not
separately by class.
5. Common Stock
(a) Common Stock of the Corporation shall be designated as
Class A Common Stock. The holders of shares of Class A Common Stock shall be
entitled to vote upon all matters submitted to vote of the stockholders of the
Corporation and shall be entitled to one vote in respect to each share of Class
A Common Stock held by them of record.
(b) Subject to the preferential dividend rights applicable to
shares of Preferred Stock, the holders of shares of the Class A Common Stock
shall be entitled to receive, to the extent permitted by law, such dividends
(payable in cash, stock or otherwise) as may be declared by the Board of
Directors at any time or from time to time.
(c) In the event of any voluntary or involuntary liquidation,
dissolution or winding up of the Corporation, after distribution in full of the
preferential amounts, if any, to be distributed to the holders of shares of the
Preferred Stock, and subject to the participating rights, if any, of the holders
of shares of the Preferred Stock, the holders of shares of the Class A Common
Stock shall be entitled to receive all of the remaining assets of the
Corporation available for distribution to its stockholders, ratably in
proportion to the number of shares of such stock held by them. A liquidation,
dissolution or winding up of the Corporation, as such terms are used in this
subparagraph (c), shall not be deemed to be occasioned by or to include any
consolidation or merger of the Corporation with or into any other corporation or
corporations or a sale, lease or conveyance of all or a part of the assets of
the Corporation.
6. Preferred Stock
Shares of the Preferred Stock may be issued from time to time
in one or more series, the shares of each series to have such voting powers,
full or limited, or no voting powers, and such designations, preferences and
relative participating, optional or other special rights, and the
qualifications, limitations or restrictions thereof, as shall be stated and
expressed herein or in an amendment or amendments hereto providing for the issue
of such series as adopted by the Board of Directors of the Corporation. The
Board of Directors of the Corporation is hereby expressly authorized, subject to
the limitations provided by law, to amend these Articles to establish and
designate series of the Preferred Stock, to fix the number of shares
constituting each series, and to fix the designations and the voting powers,
preferences and relative participating, optional or other special rights, and
the qualifications, limitations or restrictions of the shares of each series and
the variations in the relative powers, rights, preferences and limitations as
between or among series, and to increase and to decrease the number of shares
constituting each series. The authority of the Board of Directors with respect
to any series shall include, but shall not be limited to, the authority to fix
and determine the following:
(a) The designation of such series.
(b) The number of shares initially constituting such series.
(c) The increase and the decrease, to a number not less than
the number of the outstanding shares of such series, of the number of shares
constituting such series as theretofore fixed.
(d) The rate or rates and the time at which dividends on the
shares of such series shall be paid, and whether or not such dividends shall be
cumulative, and, if such dividends shall be cumulative, the date or dates from
and after which they shall accumulate.
(e) Whether or not the shares of such series shall be
redeemable, and, if such shares shall be redeemable, the terms and conditions of
such redemption, including, but not limited to, the manner of selecting shares
of such series for redemption, if less than all shares are to be redeemed, the
date or dates upon or after which such shares shall be redeemable and the amount
per share which shall be payable upon such redemption, which amount may vary
under different conditions and at different redemption dates.
(f) The amount payable on the shares of such series in the
event of voluntary or involuntary liquidations, dissolution or winding up of the
Corporation. A liquidation, dissolution or winding up of the Corporation, as
such terms are used in this subparagraph (f), shall not be deemed to be
occasioned by or to include any consolidation or merger of the Corporation with
or into any other corporation or corporations or a sale, lease or conveyance of
all or a part of the assets of the Corporation.
(g) Whether or not the shares of such series shall have voting
rights and the terms and conditions thereof, including, but not limited to, the
right of the holders of such shares to vote as a separate class either alone or
with the holders of shares of one or more other series of Preferred Stock and
the right to have one vote per share or less (but not more) than one vote per
share.
(h) Whether or not a sinking fund or purchase fund shall be
provided for the redemption or purchase of the shares of such series, and if
such a sinking fund or purchase fund shall be provided, the terms and conditions
thereof.
(i) Whether or not the shares of such series shall have
conversion privileges, and, if such shares shall have conversion privileges, the
terms and conditions of conversion, including but not limited to, any provision
for the adjustment of the conversion rate or the conversion price.
(j) Any other powers, preferences and relative participating,
optional, or other special rights, or qualifications, limitations or
restrictions thereof, as shall not be inconsistent with the provisions of this
Article III or the limitations provided by law.
7. Fixed/Adjustable Rate Noncumulative Preferred Stock, Series A
(a) Number Of Shares and Designation. Two million (2,000,000)
shares of the 100,000,000 authorized shares of preferred stock without par value
of the Corporation are hereby constituted as a series of preferred stock,
without par value, designated as "Fixed/Adjustable Rate Noncumulative Preferred
Stock, Series A" (hereinafter called the "Preferred Stock, Series A").
(b) Dividends.
(i) The holders of shares of the Preferred Stock,
Series A, shall be entitled to receive cash dividends, as, if and when declared
by the Board of Directors of the Corporation (the "Board of Directors") or by
the Preferred Stock Designation Committee of said Board of Directors (the "Stock
Committee"), out of funds legally available for that purpose, at the rate set
forth below in this subsection (b) applied to the amount of $50 per share. Such
dividends shall be payable quarterly, as, if and when declared by the Board of
Directors or by the Stock Committee on January 1, April 1, July 1 and October 1
of each year, commencing on January 1, 1997. Each such dividend shall be payable
in arrears to the holders of record of shares of the Preferred Stock, Series A,
as they appear on the stock register of the Corporation on such record dates,
not more than 30 nor less than 15 days preceding the payment dates thereof, as
shall be fixed by the Board of Directors or the Stock Committee. Dividends on
Preferred Stock, Series A shall not be cumulative and no rights shall accrue to
the holders of Preferred Stock, Series A by reason of the fact that the
Corporation may fail to declare or pay dividends on the Preferred Stock, Series
A in any amount in any year, whether or not the earnings of the Corporation in
any year were sufficient to pay such dividends in whole or in part.
(ii) Dividend periods ("Dividend Periods") shall
commence on January 1, April 1, July 1 and October 1 of each year other than the
initial Dividend Period, which shall commence on the date of original issue of
the Preferred Stock, Series A and shall end on and include the calendar day next
preceding the first day of the next Dividend Period. The initial dividend on the
shares of Preferred Stock, Series A, for the period from the date of original
issue thereof to but not including January 1, 1997 will be $.87 per share of
Preferred Stock, Series A and such dividend shall be payable (if declared) on or
before January 1, 1997. For each Dividend Period thereafter the dividend rate on
the shares of Preferred Stock, Series A shall be 6.9% per annum through October
1, 2001. The amount of dividends payable for each full Dividend Period occurring
prior to October 1, 2001 for the Preferred Stock, Series A, shall be computed by
dividing the dividend rate of 6.9% per annum by four and applying the resulting
rate of 1.725% to the amount of $50 per share. For each Dividend Period
beginning on or after October 1, 2001, the dividend rate on the shares of
Preferred Stock, Series A shall be the Applicable Rate (as defined below) per
annum. The amount of dividends payable for each full Dividend Period beginning
on or after October 1, 2001 shall be computed by dividing the Applicable Rate
per annum by four and applying the resulting rate to the amount of $50 per
share. The amount of dividends payable for any period shorter or longer than a
full Dividend Period on the Preferred Stock, Series A, shall be computed on the
basis of twelve 30-day months, a 360-day year and, for any Dividend Period of
less than one month (other than the initial Dividend Period), the actual number
of days elapsed in such period. Unless otherwise required by law, dividends
payable with respect to each share of Preferred Stock, Series A, shall be
rounded to the nearest one cent, with $.005 being rounded upward.
(iii) Except as provided below in this paragraph
(iii), the "Applicable Rate" per annum for any Dividend Period beginning on or
after October 1, 2001 will be equal to .95% plus the Effective Rate (as defined
below), but not less than 7.4% or more than 13.4% (without taking into
consideration any adjustments as described in paragraph (viii) below). The
"Effective Rate" for any Dividend Period beginning on or after October 1, 2001
will be equal to the highest of the Treasury Bill Rate, the Ten Year Constant
Maturity Rate and the Thirty Year Constant Maturity Rate (each as defined below)
for such Dividend Period. The Treasury Bill Rate, the Ten Year Constant Maturity
Rate and the Thirty Year Constant Maturity Rate will each be rounded to the
nearest five hundredths of a percent, with .025% being rounded upward. In the
event that the Corporation determines in good faith that for any reason: (A) any
one of the Treasury Bill Rate, the Ten Year Constant Maturity Rate or the Thirty
Year Constant Maturity Rate cannot be determined for any Dividend Period
beginning on or after October 1, 2001, then the Effective Rate for such Dividend
Period will be equal to the higher of whichever two of such rates can be so
determined; (B) only one of the Treasury Bill Rate, the Ten Year Constant
Maturity Rate or the Thirty Year Constant Maturity Rate can be determined for
any Dividend Period beginning on or after October 1, 2001, then the Effective
Rate for such Dividend Period will be equal to whichever such rate can be so
determined; or (C) none of the Treasury Bill Rate, the Ten Year Constant
Maturity Rate or the Thirty Year Constant Maturity Rate can be determined for
any Dividend Period beginning on or after October 1, 2001, then the Effective
Rate for the preceding Dividend Period will be continued for such Dividend
Period.
(iv) Except as described below in this paragraph
(iv), the "Treasury Bill Rate" for each applicable Dividend Period will be the
arithmetic average of the two most recent weekly per annum market discount rates
(or the one weekly per annum market discount rate, if only one such rate is
published during the relevant Calendar Period (as defined below)) for
three-month U.S. Treasury bills, as published weekly by the Federal Reserve
Board (as defined below) during the Calendar Period immediately preceding the
last ten calendar days preceding the Dividend Period for which the dividend rate
on the Preferred Stock, Series A is being determined. In the event that the
Federal Reserve Board does not publish such a weekly per annum market discount
rate during any such Calendar Period, then the Treasury Bill Rate for such
Dividend Period will be the arithmetic average of the two most recent weekly per
annum market discount rates (or the one weekly per annum market discount rate,
if only one such rate is published during the relevant Calendar Period) for
three-month U.S. Treasury bills, as published weekly during such Calendar Period
by any Federal Reserve Bank or by any U.S. Government department or agency
selected by the Corporation. In the event that a per annum market discount rate
for three-month U.S. Treasury bills is not published by the Federal Reserve
Board or by any Federal Reserve Bank or by any U.S. Government department or
agency during such Calendar Period, then the Treasury Bill Rate for such
Dividend Period will be the arithmetic average of the two most recent weekly per
annum market discount rates (or the one weekly per annum market discount rate,
if only one such rate is published during the relevant Calendar Period) for all
of the U.S. Treasury bills then having remaining maturities of not less than 80
nor more than 100 days, as published during such Calendar Period by the Federal
Reserve Board or, if the Federal Reserve Board does not publish such rates, by
any Federal Reserve Bank or by any U.S. Government department or agency selected
by the Corporation. In the event that the Corporation determines in good faith
that for any reason no such U.S. Treasury bill rates are published as provided
above during such Calendar Period, then the Treasury Bill Rate for such Dividend
Period will be the arithmetic average of the per annum market discount rates
based upon the closing bids during such Calendar Period for each of the issues
of marketable non-interest-bearing U.S. Treasury securities with a remaining
maturity of not less than 80 nor more than 100 days from the date of each such
quotation, as chosen and quoted daily for each business day in New York City (or
less frequently if daily quotations are not generally available) to the
Corporation by at least three recognized dealers in U.S. Government securities
selected by the Corporation. In the event that the Corporation determines in
good faith that for any reason the Corporation cannot determine the Treasury
Bill Rate for any applicable Dividend Period as provided above in this
paragraph, the Treasury Bill Rate for such applicable Dividend Period will be
the arithmetic average of the per annum market discount rates based upon the
closing bids during such Calendar Period for each of the issues of marketable
interest-bearing U.S. Treasury securities with a remaining maturity of not less
than 80 nor more than 100 days, as chosen and quoted daily for each business day
in New York City (or less frequently if daily quotations are not generally
available) to the Corporation by at least three recognized dealers in U.S.
Government securities selected by the Corporation.
(v) Except as described below in this paragraph (v),
the "Ten Year Constant Maturity Rate" for each applicable Dividend Period will
be the arithmetic average of the two most recent weekly per annum Ten Year
Average Yields (as defined below) (or the one weekly per annum Ten Year Average
Yield, if only one such yield is published during the relevant Calendar Period),
as published weekly by the Federal Reserve Board during the Calendar Period
immediately preceding the last ten calendar days preceding the Dividend Period
for which the dividend rate on the Preferred Stock, Series A is being
determined. In the event that the Federal Reserve Board does not publish such a
weekly per annum Ten Year Average Yield during such Calendar Period, then the
Ten Year Constant Maturity Rate for such Dividend Period will be the arithmetic
average of the two most recent weekly per annum Ten Year Average Yields (or the
one weekly per annum Ten Year Average Yield, if only one such yield is published
during the relevant Calendar Period), as published weekly during such Calendar
Period by any Federal Reserve Bank or by any U.S. Government department or
agency selected by the Corporation. In the event that a per annum Ten Year
Average Yield is not published by the Federal Reserve Board or by any Federal
Reserve Bank or by any U.S. Government department or agency during such Calendar
Period, then the Ten Year Constant Maturity Rate for such Dividend Period will
be the arithmetic average of the two most recent weekly per annum average yields
to maturity (or the one weekly per annum average yield to maturity, if only one
such yield is published during the relevant Calendar Period) for all of the
actively traded marketable U.S. Treasury fixed interest rate securities (other
than Special Securities (as defined below)) then having remaining maturities of
not less than eight nor more than twelve years, as published during such
Calendar Period by the Federal Reserve Board or, if the Federal Reserve Board
does not publish such yields, by any Federal Reserve Bank or by any U.S.
Government department or agency selected by the Corporation. In the event that
the Corporation determines in good faith that for any reason the Corporation
cannot determine the Ten Year Constant Maturity Rate for any applicable Dividend
Period as provided above in this paragraph, then the Ten Year Constant Maturity
Rate for such Dividend Period will be the arithmetic average of the per annum
average yields to maturity based upon the closing bids during such Calendar
Period for each of the issues of actively traded marketable U.S. Treasury fixed
interest rate securities (other than Special Securities) with a final maturity
date not less than eight nor more than twelve years from the date of each such
quotation, as chosen and quoted daily for each business day in New York City (or
less frequently if daily quotations are not generally available) to the
Corporation by at least three recognized dealers in U.S. Government securities
selected by the Corporation.
(vi) Except as described below in this paragraph
(vi), the "Thirty Year Constant Maturity Rate" for each applicable Dividend
Period will be the arithmetic average of the two most recent weekly per annum
Thirty Year Average Yields (as defined below) (or the one weekly per annum
Thirty Year Average Yield, if only one such yield is published during the
relevant Calendar Period), as published weekly by the Federal Reserve Board
during the Calendar Period immediately preceding the last ten calendar days
preceding the Dividend Period for which the dividend rate on the Preferred
Stock, Series A is being determined. In the event that the Federal Reserve Board
does not publish such a weekly per annum Thirty Year Average Yield during such
Calendar Period, then the Thirty Year Constant Maturity Rate for such Dividend
Period will be the arithmetic average of the two most recent weekly per annum
Thirty Year Average Yields (or the one weekly per annum Thirty Year Average
Yield, if only one such yield is published during the relevant Calendar Period),
as published weekly during such Calendar Period by any Federal Reserve Bank or
by any U.S. Government department or agency selected by the Corporation. In the
event that a per annum Thirty Year Average Yield is not published by the Federal
Reserve Board or by any Federal Reserve Bank or by any U.S. Government
department or agency during such Calendar Period, then the Thirty Year Constant
Maturity Rate for such Dividend Period will be the arithmetic average of the two
most recent weekly per annum average yields to maturity (or the one weekly per
annum average yield to maturity, if only one such yield is published during the
relevant Calendar Period) for all of the actively traded marketable U.S.
Treasury fixed interest rate securities (other than Special Securities) then
having remaining maturities of not less than twenty-eight nor more than thirty
years, as published during such Calendar Period by the Federal Reserve Board or,
if the Federal Reserve Board does not publish such yields, by any Federal
Reserve Bank or by any U.S. Government department or agency selected by the
Corporation. In the event that the Corporation determines in good faith that for
any reason the Corporation cannot determine the Thirty Year Constant Maturity
Rate for any applicable Dividend Period as provided above in this paragraph,
then the Thirty Year Constant Maturity Rate for such Dividend Period will be the
arithmetic average of the per annum average yields to maturity based upon the
closing bids during such Calendar Period for each of the issues of actively
traded marketable U.S. Treasury fixed interest rate securities (other than
Special Securities) with a final maturity date not less than twenty-eight nor
more than thirty years from the date of each such quotation, as chosen and
quoted daily for each business day in New York City (or less frequently if daily
quotations are not generally available) to the Corporation by at least three
recognized dealers in U.S. Government securities selected by the Corporation.
(vii) The Applicable Rate with respect to each
Dividend Period beginning on or after October 1, 2001 will be calculated as
promptly as practicable by the Corporation according to the appropriate method
described above. The Corporation will cause notice of each Applicable Rate to be
enclosed with the dividend payment checks next mailed to the holders of
Preferred Stock, Series A.
(viii) As used above, the term "Calendar Period"
means a period of fourteen calendar days; the term "Federal Reserve Board" means
the Board of Governors of the Federal Reserve System; the term "Special
Securities" means securities which can, at the option of the holder, be
surrendered at face value in payment of any Federal estate tax or which provide
tax benefits to the holder and are priced to reflect such tax benefits or which
were originally issued at a deep or substantial discount; the term "Ten Year
Average Yield" means the average yield to maturity for actively traded
marketable U.S. Treasury fixed interest rate securities (adjusted to constant
maturities of ten years); and the term "Thirty Year Average Yield" means the
average yield to maturity for actively traded marketable U.S. Treasury fixed
interest rate securities (adjusted to constant maturities of thirty years).
(ix) If one or more amendments to the Internal
Revenue Code of 1986, as amended (the "Code"), are enacted that change the
percentage of the dividends received deduction as specified in Section 243(a)(1)
of the Code or any successor provision (the "Dividends Received Percentage"),
the amount of each dividend payable per share of the Preferred Stock, Series A
for dividend payments made on or after the later of the date of enactment or the
effective date of such change shall be adjusted by multiplying the amount of the
dividend payable determined as described above (before adjustment) by a factor,
which shall be the number determined in accordance with the following formula
(the "DRD Formula"), and rounding the result to the nearest cent:
1-[.35 (1 - .70)]
-----------------
1-[.35 (1 - DRP)]
For the purposes of the DRD Formula, "DRP" means the new Dividends Received
Percentage applicable to the dividend in question. No amendment to the Code,
other than a change in the percentage of the dividends received deduction set
forth in Section 243 (a)(1) of the Code or any successor provision, will give
rise to an adjustment. Notwithstanding the foregoing provisions, in the event
that, with respect to any such amendment, the Corporation shall receive either
an unqualified opinion of nationally recognized independent tax counsel selected
by the Corporation and approved by Skadden, Arps, Slate, Meagher & Flom (which
approval shall not be unreasonably withheld) or a private letter ruling or
similar form of authorization from the Internal Revenue Service to the effect
that such an amendment would not apply to dividends payable on the Preferred
Stock, Series A, then any such amendment shall not result in the adjustment
provided for pursuant to the DRD Formula. The opinion referenced in the previous
sentence shall be based, at least in part, upon a specific exception in the
legislation amending the DRP or upon a published pronouncement of the Internal
Revenue Service addressing such legislation or section of the Code. Unless the
context otherwise requires, references to dividends in this Article III(7) shall
mean dividends as adjusted by the DRD Formula. The Corporation's calculation of
the dividends payable as so adjusted and as tested by the independent certified
public accountants then regularly engaged by the Corporation, shall be final and
not subject to review.
(x) If any amendment to the Code which reduces the
Dividends Received Percentage is enacted and becomes effective after a dividend
payable on a Dividend Payment Date has been declared but not paid prior to the
effective date of the amendment, the amount of dividend payable on such Dividend
Payment Date will not be increased in accordance with paragraph (ix) above, but
instead, an amount equal to the difference between the amount of the dividend as
declared and the amount that would have been declared had the DRD Formula been
applied, will be payable to holders of record on the next succeeding Dividend
Payment Date in addition to any other amounts payable on such date.
(xi) If, prior to January 2, 1997, an amendment to
the Code is enacted that reduces the Dividends Received Percentage and such
reduction retroactively applies to a Dividend Payment Date as to which the
Corporation previously paid dividends on the Preferred Stock, Series A (each an
"Affected Dividend Payment Date"), holders of the Preferred Stock, Series A
shall be entitled to receive as, if and when declared by the Board of Directors
or the Stock Committee, out of funds legally available for that purpose,
additional dividends (the "Additional Dividends") on the next succeeding
Dividend Payment Date (or if such amendment is enacted after the dividend
payable on such Dividend Payment Date has been declared, on the second
succeeding Dividend Payment Date following the date of enactment) to holders of
record on such succeeding Dividend Payment Date in an amount equal to the excess
of (A) the product of the dividends paid by the Corporation on each Affected
Dividend Payment Date and the DRD Formula (where the DRP used in the DRD Formula
would be equal to the Dividends Received Percentage applied to each Affected
Dividend Payment Date) and (B) the dividends paid by the Corporation on each
Affected Dividend Payment Date. Additional Dividends will not be paid in respect
of the enactment of any amendment to the Code if such amendment would not result
in an adjustment due to the Corporation having received either an opinion of
counsel or tax ruling referred to in paragraph (ix) above. The Corporation shall
only make one payment of Additional Dividends.
(xii) If the amount of dividend payable per share of
the Preferred Stock, Series A, shall be adjusted pursuant to the DRD Formula
and/or Additional Dividends are to be paid, the Corporation will cause notice of
each such adjustment and, if applicable, any Additional Dividends, to be sent to
the holders of the Preferred Stock, Series A.
(xiii) So long as any shares of the Preferred Stock,
Series A, are outstanding, no full dividends shall be declared or paid or set
apart for payment on the preferred stock of the Corporation of any series
ranking, as to dividends, on a parity with or junior to the Preferred Stock,
Series A, for any period unless full dividends for the Dividend Period
immediately preceding the date of payment of such full dividends have been or
contemporaneously are declared and paid or declared and a sum sufficient for the
payment thereof set apart for such payment on the Preferred Stock, Series A.
When dividends are not paid in full, as aforesaid, upon the shares of the
Preferred Stock, Series A, and any other preferred stock of the Corporation
ranking on a parity as to dividends with the Preferred Stock, Series A, all
dividends declared upon shares of the Preferred Stock, Series A, and any other
preferred stock of the Corporation ranking on a parity as to dividends (whether
dividends on such other preferred stock are cumulative or noncumulative) with
the Preferred Stock, Series A, shall be declared pro rata so that the amount of
dividends declared per share on the Preferred Stock, Series A, and such other
preferred stock shall in all cases bear to each other the same ratio that
accrued dividends per share on the shares of the Preferred Stock, Series A (but
without any cumulation in respect of unpaid dividends for Dividend Periods prior
to the immediately preceding Dividend Period on the Preferred Stock, Series A
and any other noncumulative preferred stock) and such other preferred stock bear
to each other. Holders of shares of the Preferred Stock, Series A shall not be
entitled to any dividends, whether payable in cash, property or stock, in excess
of full dividends, as herein provided, on the Preferred Stock, Series A. No
interest, or sum of money in lieu of interest, shall be payable in respect of
any dividend payment on the Preferred Stock, Series A which may be in arrears.
(xiv) So long as any shares of the Preferred Stock,
Series A are outstanding, no dividend (other than dividends or distributions
paid in shares of, or options, warrants or rights to subscribe for or purchase
shares of, stock ranking junior to the Preferred Stock, Series A, as to
dividends and upon liquidation and other than as provided in subsection (iii) of
this subsection (b)) shall be declared or paid or set aside for payment, nor
shall any other distribution be declared or made upon any stock of the
Corporation ranking junior to or on a parity with the Preferred Stock, Series A,
as to dividends or upon liquidation, nor shall any stock of the Corporation
ranking junior to or on a parity with the Preferred Stock, Series A, as to
dividends or upon liquidation be redeemed, purchased or otherwise acquired for
any consideration (or any moneys be paid to or made available for a sinking fund
for the redemption of any shares of any such stock) by the Corporation (except
by conversion into or exchange for stock of the Corporation ranking junior to
the Preferred Stock, Series A, as to dividends and upon liquidation) unless, in
each case, full dividends for the immediately preceding Dividend Period shall
have been paid or set apart for payment and the Corporation is not in default
with respect to any redemption of shares of Preferred Stock, Series A, announced
by the Corporation pursuant to subsection (d) below.
(c) Liquidation Preference.
(i) In the event of any liquidation, dissolution or
winding up of the Corporation, whether voluntary or involuntary, before any
payment or distribution of the assets of the Corporation (whether capital or
surplus) shall be made to or set apart for the holders of any series or class or
classes of stock of the Corporation ranking junior to the Preferred Stock,
Series A, upon liquidation, dissolution or winding up, the holders of the shares
of the Preferred Stock, Series A, shall be entitled to receive $50 per share
plus an amount equal to all dividends (whether or not earned or declared)
accrued and unpaid thereon from the immediately preceding dividend payment date
(but without any cumulation for unpaid dividends for prior Dividend Periods on
the Preferred Stock, Series A) to the date of final distribution to such
holders; but such holders shall not be entitled to any further payment. If, upon
any liquidation, dissolution or winding up of the Corporation, the assets of the
Corporation, or proceeds thereof, distributable among the holders of the shares
of the Preferred Stock, Series A, shall be insufficient to pay in full the
preferential amount aforesaid and liquidating payments on any other preferred
stock ranking, as to liquidation, dissolution or winding up, on a parity with
the Preferred Stock, Series A, then such assets, or the proceeds thereof, shall
be distributed among the holders of shares of Preferred Stock, Series A, and any
such other preferred stock ratably in accordance with the respective amounts
which would be payable on such shares of Preferred Stock, Series A, and any such
other preferred stock if all amounts payable thereon were paid in full. For the
purposes of this subsection (c), a consolidation or merger of the Corporation
with one or more corporations shall not be deemed to be a liquidation,
dissolution or winding up, voluntary or involuntary.
(ii) Subject to the rights of holders of shares of
any series or class or classes of stock ranking on a parity with or prior to the
Preferred Stock, Series A, as to distribution of assets upon liquidation,
dissolution or winding up, upon any liquidation, dissolution or winding up of
the Corporation, after payment shall have been made in full to the holders of
Preferred Stock, Series A, as provided in this Section (c), but not prior
thereto, any other series or class or classes of stock ranking junior to the
Preferred Stock, Series A, upon liquidation shall, subject to the respective
terms and provisions (if any) applying thereto, be entitled to receive any and
all assets remaining to be paid or distributed, and the holders of the Preferred
Stock, Series A, shall not be entitled to share therein.
(d) Redemption.
(i) Except as provided in subsections (ii) and (iii)
of this Section (d), the Preferred Stock, Series A, may not be redeemed prior to
October 1, 2001. At any time or from time to time on and after October 1, 2001,
the Corporation, at its option, may, with prior Federal Reserve Board approval
to the extent then required by applicable law, redeem shares of the Preferred
Stock, Series A, in whole or in part, out of funds legally available therefor,
at a redemption price of $50 per share, together in each case with accrued and
unpaid dividends (whether or not declared) from the immediately preceding
dividend payment date (but without any cumulation for unpaid dividends for prior
Dividend Periods on the Preferred Stock, Series A) to the date fixed for
redemption, including any changes in dividends payable due to changes in the
Dividends Received Percentage and Additional Dividends, if any.
(ii) If the Dividends Received Percentage is equal to
or less than 40% and, as a result, the amount of dividends on the Preferred
Stock, Series A payable on any Dividend Payment Date will be or is adjusted
upwards as described in paragraph (b)(ix) above, the Corporation, at its option,
with prior Federal Reserve Board approval to the extent then required by
applicable law, may redeem all, but not less than all, of the outstanding shares
of the Preferred Stock, Series A, out of funds legally available therefor,
provided, that within sixty days of the date on which an amendment to the Code
is enacted which reduces the Dividends Received Percentage to 40% or less, the
Corporation sends notice to holders of the Preferred Stock, Series A of such
redemption in accordance with subsection (iv) below. Any redemption of the
Preferred Stock, Series A in accordance with this subsection (d) shall be on
notice as aforesaid at the applicable redemption price set forth in the
following table, in each case plus accrued and unpaid dividends (whether or not
declared) from the immediately preceding dividend payment date (but without any
cumulation for unpaid dividends for prior Dividend Periods on the Preferred
Stock, Series A) to the date fixed for redemption, including any changes in
dividends payable due to changes in the Dividends Received Percentage and
Additional Dividends, if any.
<TABLE>
<CAPTION>
REDEMPTION PERIOD REDEMPTION PRICE PER SHARE
<S> <C>
September, 1996 to September 30, 1997 $52.50
October 1, 1997 to September 30, 1998 52.00
October 1, 1998 to September 30, 1999 51.50
October 1, 1999 to September 30, 2000 51.00
October 1, 2000 to September 30, 2001 50.50
On or after October 1, 2001 50.00
</TABLE>
(iii) The Corporation, at its option, may, with prior
Federal Reserve Board approval to the extent then required by applicable law,
redeem all, but not less than all, of the outstanding shares of the Preferred
Stock, Series A, out of funds legally available therefor if the holders of the
shares of the Preferred Stock, Series A, shall be entitled to vote upon or
consent to a merger or consolidation of the Corporation as provided in Section
(k) below and all of the following conditions have been satisfied: (i) the
Corporation shall have requested the vote or consent of the holders of the
Preferred Stock, Series A, to the consummation of such merger or consolidation,
stating in such request that failing the requisite favorable vote or consent the
Corporation will have the option to redeem the Preferred Stock, Series A, (ii)
the Corporation shall not have received the favorable vote or consent requisite
to the consummation of the transaction within 60 days after making such written
request (which shall be deemed to have been made upon the mailing of the notice
of any meeting of holders of the Preferred Stock, Series A, to vote upon such
merger or consolidation or the mailing of the form of written consent to be
signed by such holders), and (iii) such transaction shall be consummated on the
date fixed for such redemption, which date shall be no more than one year after
such request is made. Any such redemption shall be on notice as set forth in
subsection (iv) of this Section (d) at a redemption price of $50 per share of
the Preferred Stock, Series A, together with accrued and unpaid dividends
thereon, if any, from the immediately preceding dividend payment date (but
without any cumulation for unpaid dividends for prior Dividend Periods on the
Preferred Stock, Series A) to the date fixed for redemption, including any
changes in dividends payable due to changes in the Dividends Received Percentage
and Additional Dividends, if any.
(iv) In the event the Corporation shall redeem shares
of Preferred Stock, Series A, notice of such redemption shall be given by first
class mail, postage prepaid, mailed not less than 30 nor more than 60 days prior
to the redemption date, to each holder of record of the shares to be redeemed,
at such holder's address as the same appears on the stock register of the
Corporation. Each such notice shall state: (1) the redemption date; (2) the
number of shares of Preferred Stock, Series A, to be redeemed and, if less than
all the shares held by such holder are to be redeemed, the number of such shares
to be redeemed from such holder; (3) the redemption price; (4) the place or
places where certificates for such shares are to be surrendered for payment of
the redemption price; and (5) that dividends on the shares to be redeemed will
cease to accrue on such redemption date. Notice having been mailed as aforesaid,
from and after the redemption date (unless default shall be made by the
Corporation in providing money for the payment of the redemption price, together
with accrued and unpaid dividends from the immediately preceding dividend
payment date to the date of redemption) dividends on the shares of the Preferred
Stock, Series A, so called for redemption shall cease to accrue, and said shares
shall no longer be deemed to be outstanding, and all rights of the holders
thereof as stockholders of the Corporation (except the right to receive from the
Corporation the redemption price, together with accrued and unpaid dividends
from the immediately preceding dividend payment date, whether or not declared)
shall cease. The Corporation's obligation to provide moneys in accordance with
the preceding sentence shall be deemed fulfilled if, on or before the redemption
date, the Corporation shall deposit with a bank or trust company (which may be
an affiliate of the Corporation) having capital and surplus of at least
$50,000,000, funds necessary for such redemption, in trust, with irrevocable
instructions that such funds be applied to the redemption of the shares of
Preferred Stock, Series A, so called for redemption. Any interest accrued on
such funds shall be paid to the Corporation from time to time. Any funds so
deposited and unclaimed at the end of two years from such redemption date shall
be released or repaid to the Corporation, after which the holder or holders of
such shares of Preferred Stock, Series A, so called for redemption shall look
only to the Corporation for payment of the funds necessary for such redemption.
Upon surrender in accordance with said notice of the certificates for any shares
so redeemed (properly endorsed or assigned for transfer, if the Board of
Directors shall so require and the notice shall so state), such shares shall be
redeemed by the Corporation at the applicable redemption price aforesaid,
together with accrued and unpaid dividends from the immediately preceding
dividend payment date to the date of redemption. If less than all the
outstanding shares of Preferred Stock, Series A, are to be redeemed, shares to
be redeemed shall be selected by the Corporation from outstanding shares of
Preferred Stock, Series A, not previously called for redemption by lot or pro
rata (as nearly as may be) or by any other method determined by the Corporation
in its sole discretion to be equitable. If fewer than all the shares represented
by any certificate are redeemed a new certificate shall be issued representing
the unredeemed shares without cost to the holder thereof.
(v) In no event shall the Corporation redeem less
than all the outstanding shares of Preferred Stock, Series A, pursuant to
subsection (i) of this Section (d) unless full dividends shall have been paid or
declared and set apart for payment upon all outstanding shares of Preferred
Stock, Series A, for the Dividend Period immediately preceding the date of
redemption (but without any cumulation for unpaid dividends for prior Dividend
Periods on the Preferred Stock, Series A).
(e) Shares to be Retired. All shares of Preferred Stock,
Series A, purchased or redeemed by the Corporation shall be retired and canceled
and the Board of Directors shall cause to be taken all action necessary to
restore such shares to the status of authorized but unissued shares of preferred
stock, without designation as to series, and such shares may thereafter be
issued, but not as shares of Preferred Stock, Series A.
(f) Conversion or Exchange. The holders of shares of Preferred
Stock, Series A, shall not have any rights herein to convert such shares into or
exchange such shares for shares of any other class or classes or of any other
series of any class or classes of ca pital stock (or any other security) of the
Corporation.
(g) Ranking. Any class or series of stock of the Corporation
shall be deemed to rank:
(i) prior to the Preferred Stock, Series A, as to
dividends or as to distribution of assets upon liquidation, dissolution or
winding up, if holders of such class shall be entitled to the receipt of
dividends or of amounts distributable upon liquidation, dissolution or winding
up, as the case may be, in preference or priority to the holders of Preferred
Stock, Series A;
(ii) on a parity with the Preferred Stock, Series A,
as to dividends or as to distribution of assets upon liquidation, dissolution or
winding up, whether or not the dividend rates, dividend payment dates or
redemption or liquidation prices per share thereof be different from those of
the Preferred Stock, Series A, if the holders of such class of stock and the
Preferred Stock, Series A (whether or not such class of stock is cumulative or
noncumulative as to payment of dividends) shall be entitled to the receipt of
dividends or of amounts distributable upon liquidation, dissolution or winding
up, as the case may be, in proportion to their respective amounts of accrued and
unpaid dividends per share or liquidation prices, without preference or priority
one over the other (except with respect to the cumulation of dividends on such
class of stock); and
(iii) junior to the Preferred Stock, Series A, as to
dividends or as to the distribution of assets upon liquidation, dissolution or
winding up, if such stock shall be Class A Common Stock or if the holders of
Preferred Stock, Series A, shall be entitled to receipt of dividends or of
amounts distributable upon dissolution, liquidation or winding up, as the case
may be, in preference or priority to the holders of shares of such stock.
(h) Exclusion of Other Rights. Unless otherwise required by
law, shares of Preferred Stock, Series A, shall not have any rights, including
preemptive rights, or preferences other than those specifically set forth herein
or as provided by applicable law.
(i) Notices. All notices or communications, unless otherwise
specified in the by-laws of the Corporation or the Articles of Incorporation, as
amended, shall be sufficiently given if in writing and delivered in person or
mailed by first-class mail, postage prepaid to the holders of record of the
Preferred Stock, Series A. Notice shall be deemed given on the earlier of the
date received or the date such notice is mailed.
(j) Record Holders. The Corporation and the transfer agent for
the Preferred Stock, Series A (if any), may deem and treat the record holder of
any share of such Preferred Stock, Series A, as the true and lawful owner
thereof for all purposes, and neither the Corporation nor such transfer agent
shall be affected by any notice to the contrary.
(k) Voting Rights. Except as hereinafter set forth in this
Section (k) or as otherwise from time to time required by law, the Preferred
Stock, Series A, shall have no voting rights. Whenever, at any time or times,
dividends payable on the Preferred Stock, Series A, shall be unpaid for such
number of dividend periods, whether or not consecutive, which shall in the
aggregate contain not less than 540 days, the holders of the outstanding
Preferred Stock, Series A, shall have the exclusive right, voting separately as
a class with holders of shares of any one or more other series of preferred
stock ranking on a parity with the Preferred Stock, Series A, either as to
dividends (whether or not such other series of preferred stock is cumulative or
noncumulative as to payment of dividends) or on the distribution of assets upon
liquidation, dissolution or winding up and upon which like voting rights have
been conferred and are exercisable, to elect two directors of the Corporation at
the Corporation's next annual meeting of shareholders and at each subsequent
annual meeting of shareholders. At elections for such directors, each holder of
the Preferred Stock, Series A, shall be entitled to one vote for each share held
(the holders of shares of any other series of preferred stock ranking on such a
parity being entitled to such number of votes, if any, for each share of stock
held as may be granted to them). Upon the vesting of such right of such holders,
the maximum authorized number of members of the Board of Directors shall
automatically be increased by two and the two vacancies so created shall be
filled by vote of the holders of such outstanding shares of the Preferred Stock,
Series A (either alone or together with the holders of shares of any one or more
other series of preferred stock ranking on such a parity and upon which like
voting rights have been conferred and are exercisable) as hereinafter set forth.
The right of such holders of such shares of the Preferred Stock, Series A,
voting separately as a class, to elect (together with the holders of shares of
any one or more other series of preferred stock ranking on such a parity and
upon which like voting rights have been conferred and are exercisable) members
of the Board of Directors of the Corporation as aforesaid shall continue until
such time as all dividends on the Preferred Stock, Series A, shall have been
paid in full for at least one year, at which time such right shall terminate,
except as herein or by law expressly provided, subject to revesting in the event
of each and every subsequent default of the character above mentioned.
Upon any termination of the right of the holders of the Preferred
Stock, Series A, as a class to vote for directors as herein provided, the term
of office of all directors then in office elected by such holders voting as a
class shall terminate immediately. If the office of any director elected by such
holders voting as a class becomes vacant by reason of death, resignation,
retirement, disqualification, removal from office or otherwise, the remaining
director elected by such holders voting as a class may choose a successor who
shall hold office for the unexpired term in respect of which such vacancy
occurred. Whenever the term of office of the directors elected by such holders
voting as a class shall end and the special voting powers vested in such holders
as provided in this Section (k) shall have expired, the number of directors
shall automatically be decreased to such number as may be provided for in the
By-Laws irrespective of any increase made pursuant to the provisions of this
Section (k).
So long as any shares of the Preferred Stock, Series A, remain
outstanding, the consent of the holders of at least two-thirds of the shares of
the Preferred Stock, Series A, outstanding at the time (voting separately as a
class together with all other series of preferred stock ranking on a parity with
such series either as to dividends (whether or not such other series of
preferred stock is cumulative or noncumulative as to payment of dividends) or
the distribution of assets upon liquidation, dissolution or winding up and upon
which like voting rights have been conferred and are exercisable) given in
person or by proxy, either in writing or at any special or annual meeting called
for the purpose, shall be necessary to permit, effect or validate any one or
more of the following:
(i) The authorization, creation or issuance, or any
increase in the authorized or issued amount, of any class or series of stock
ranking prior to the Preferred Stock, Series A, with respect to payment of
dividends or the distribution of assets upon liquidation, dissolution or winding
up, or
(ii) The amendment, alteration or repeal, whether by
merger, consolidation or otherwise, of any of the provisions of the Articles of
Incorporation, as amended, or of the resolution contained in this Articles of
Amendment for the Preferred Stock, Series A, and the powers, preferences and
privileges, relative, participating, optional and other special rights and
qualifications, limitations and restrictions thereof which would materially and
adversely affect any right, preference, privilege or voting power of the
Preferred Stock, Series A, or of the holders thereof; provided, however, that
any increase in the amount of authorized preferred stock or the creation and
issuance of other series of preferred stock, or any increase in the amount of
authorized shares of the Preferred Stock, Series A, or of any other series of
preferred stock, in each case ranking on a parity with or junior to the
Preferred Stock, Series A, with respect to the payment of dividends (whether or
not such other series of preferred stock is cumulative or noncumulative as to
payment of dividends) and the distribution of assets upon liquidation,
dissolution or winding up, shall not be deemed to materially and adversely
affect such rights, preferences, privileges or voting powers.
The foregoing voting provisions shall not apply if, at or prior to the
time when the act with respect to which such vote would otherwise be required
shall be effected, all outstanding shares of the Preferred Stock, Series A,
shall have been redeemed or sufficient funds shall have been deposited in trust
to effect such redemption, which redemption is scheduled to be consummated
within three months after the time that such voting rights would otherwise be
exercisable.
ARTICLE IV
BOARD OF DIRECTORS
1. All the corporate powers of the Corporation shall be vested in and
exercised by a Board of Directors consisting of the number of directors
specified in, or determined in the manner prescribed in, the by-laws of the
Corporation.
2. Any director absent from any meeting of the Board of Directors or
any committee thereof may be represented by any other director, who may cast the
absent director's vote according to his written instructions, general or
special.
3. The Board of Directors may make and alter by-laws containing any
provisions with respect to the government of the Corporation, subject to the
power of the shareholders to change or repeal by-laws so made. The by-laws may
contain any provision relating to the business of the Corporation, the conduct
of its affairs, its rights or powers, or the rights or powers of its
shareholders, directors or officers, not inconsistent with law or these
Articles.
ARTICLE V
INDEMNIFICATION AND LIMITATION OF LIABILITY
OF DIRECTORS AND OFFICERS
1. Except as prohibited by law, the Corporation shall indemnify any
person who was or is a party or is threatened to be made a party to any action,
suit or proceeding, whether civil, criminal, administrative or investigative
(including any action by or in the right of the Corporation) by reason of the
fact that such person is or was a director or officer of the Corporation (or of
any of the wholly owned subsidiaries of the Corporation), or is or was serving
at the request of the Corporation as a director or officer of another business,
foreign or nonprofit corporation, partnership, joint venture or other enterprise
(each such person being hereinafter referred to as an "Indemnitee"), against
expenses including attorneys, fees), judgments, fines and amounts paid in
settlement actually and reasonably incurred by such person in connection with
such action, suit or proceeding; provided, however, that an Indemnitee shall be
entitled to indemnification for expenses incurred in connection with any action
brought by such Indemnitee against the Corporation only if such action is a
claim for indemnification under this Article or otherwise, the Indemnitee
prevails in the action for which expenses are claimed, or indemnification of
expenses is included in any settlement or is awarded by a court. Except as
otherwise permitted or contemplated by these Articles, the by-laws of the
Corporation or agreement, expenses incurred by an Indemnitee in defending any
action, suit or proceeding shall be paid by the Corporation in advance of the
final disposition thereof upon receipt of an undertaking by or on behalf of the
Indemnitee to repay such amount unless it shall ultimately be determined that he
is entitled to be indemnified by the Corporation as authorized by this Article
or otherwise. The indemnification provided by this Article shall be deemed to
constitute a contractual right of each Indemnitee and shall not be deemed
exclusive of any other right to which the person indemnified may be entitled
under any by-law, agreement, authorization of shareholders or directors or
otherwise, and shall continue under any by-law, agreement, authorization of
shareholders or directors or otherwise, and shall continue as to any person who
has ceased to have the status pursuant to which he was denominated an Indemnitee
and shall inure to the benefit of such person's heirs and legal representatives.
The Corporation shall have the power to procure insurance on behalf of any
Indemnitee against any liability asserted against or incurred by him in any such
capacity, or arising out of his status as such, whether or not the Corporation
would have the power to indemnify him against such liability under the
provisions of law or this Article. (As amended April 19, 1988.)
2. Notwithstanding anything in these Articles, no director or officer
of the Corporation shall be personally liable to the Corporation or its
shareholders for monetary damages for breach of fiduciary duty as a director or
officer; provided, however, that the foregoing provision shall not eliminate or
limit the liability of a director or officer to the extent prohibited by
applicable law.
(As amended April 19, 1988.)
ARTICLE VI
AMENDMENTS
Except as may be otherwise required by law or permitted by these
Articles, these Articles may be amended by a majority vote of the shares present
and represented, taken at an annual or special meeting of shareholders, the
notice of which shall set forth the proposed amendment or a summary of the
changes to be made thereby. In such an amendment would adversely affect the
holders of shares of any class or series, then in addition to the vote required
by the sentence immediately preceding, the holders of each class or series of
shares so affected by the amendment shall be entitled to vote as a class upon
such amendment, and a majority of the present and represented shares of each
class or series so affected by the amendment shall be necessary to the adoption
thereof.
ARTICLE VII
MERGER OR CONSOLIDATION
Except as may be otherwise required by law or as provided in Article
III hereof, an agreement of merger or consolidation may be approved by a
majority vote of the voting shares issued and outstanding, taken at a meeting
called for the purpose of such approval.
ARTICLE VIII
UNCLAIMED PROPERTY
Cash, property or share dividends, shares issuable to shareholders in
connection with a reclassification of stock, and the redemption price of
redeemed shares, which are not claimed by the shareholders entitled hereto
within one year after the dividend or redemption price becomes payable or the
shares become issuable, despite reasonable efforts by the Corporation to pay the
dividend or redemption price or deliver the certificates for the shares to such
shareholders within said one year, shall, at the expiration of said one year,
revert in full ownership to the Corporation, and the Corporation's obligation to
pay such dividend or redemption price or issue such shares, as the case may be,
shall thereupon cease; provided that the Board of Directors may, at any time,
for any reason satisfactory to it, but need not, authorize (a) payment of the
amount of any cash or property dividend or redemption price or (b) issuance of
any shares, ownership of which has reverted to the Corporation pursuant to this
Article, to the entity that would be entitled thereto had such reversion not
occurred.
ARTICLE IX
Transfer Restrictions
(a) Certain Definitions. As used in this Article IX, the following
terms have the following respective meanings:
"Corporation Securities" means (i) shares of common stock of
the Corporation, (ii) shares of preferred stock of the Corporation, (iii)
warrants, rights, or options (within the meaning of Treasury Regulation
ss.1.382-2T(h)(4)(v)) to purchase stock of the Corporation from the Corporation,
and (iv) any other interests that would be treated as "stock" of the Corporation
pursuant to Treasury Regulation ss.1.382-2T(f)(18).
"Percentage Stock Ownership" means percentage stock ownership
as determined in accordance with Treasury Regulation ss.ss.1.382-2T(g), (h),
(j), and (k).
"Five-Percent Shareholder" means a Person or group of Persons
that is identified as a "five-percent shareholder" of the Corporation pursuant
to Treasury Regulation ss.1.382-2T(g)(1).
"Person" means an individual, corporation, estate, trust,
association, company, partnership, or similar organization.
"Prohibited Transfer" means any purported Transfer of
Corporation Securities to the extent that such Transfer is prohibited and void
under this Article IX.
"Restriction Release Date" means December 29, 1995.
"Transfer" means any sale, transfer, assignment, conveyance,
pledge, or other disposition.
"Treasury Regulation ss.1.382-2T" means the temporary income
tax regulations promulgated under section 382 of the Internal Revenue Code of
1986, as amended, and any successor regulations. References to any subsection of
such regulations include references to any successor subsection thereof.
(b) Restrictions
(i) Any attempted Transfer of Corporation Securities prior to
the Restriction Release Date, or any attempted Transfer of Corporation
Securities pursuant to an agreement entered into prior to the Restriction
Release Date shall be prohibited and void ab initio to the extent that, as a
result of such Transfer (or any series of Transfers of which such Transfer is a
part), either (1) any Person or group of Persons shall become a Five-Percent
Shareholder, or (2) the Percentage Stock Ownership interest in the Corporation
of any Five-Percent Shareholder shall be increased.
(c) Certain Exceptions. The restrictions set forth in clauses (i) and
(ii) of paragraph (b) of this Article IX shall not apply to:
(i) Any Transfer which has been approved in advance by the
Board of Directors, which approval may be withheld only if, in the judgment of
the Board of Directors, such Transfer may result in any limitation on the use of
the Corporation's net operating loss carryforwards, tax losses recognized in the
future, or other tax attributes;
(ii) Any Transfer made in compliance with exceptions
established from time to time by resolution of the Board of Directors.
(d) Treatment of Excess Securities
(i) No employee or agent of the Corporation shall record any
Prohibited Transfer, and the purported transferee of such a Prohibited Transfer
(the "Purported Transferee") shall not be recognized as a shareholder of the
Corporation for any purpose whatsoever in respect of the Corporation Securities
which are the subject of the Prohibited Transfer (the "Excess Securities").
Until the Excess Securities are acquired by another Person in a Transfer that is
not a Prohibited Transfer, the Purported Transferee shall not be entitled with
respect to such Excess Securities to any rights of shareholders of the
Corporation, including without limitation, the right to vote such Excess
Securities and to receive dividends or distributions in liquidation in respect
thereof, if any. Once the Excess Securities have been acquired in a Transfer
that is not a Prohibited Transfer, the Securities shall cease to be Excess
Securities.
(ii) If the Board of Directors determines that a Transfer of
Corporation Securities constitutes a Prohibited Transfer then, upon written
demand by the Corporation, the Purported Transferee shall transfer or cause to
be transferred any certificate or other evidence of ownership of the Excess
Securities within the Purported Transferee's possession or control, together
with any dividends or other distributions that were received by the Purported
Transferee from the Corporation with respect to the Excess Securities
("Prohibited Distributions"), to an agent designated by the Board of Directors
which agent shall be the transfer agent for the Corporation Securities (the
"Agent"). The Agent shall thereupon sell the Excess Securities transferred to it
in an arm's-length transaction (over the New York Stock Exchange, if possible).
If the Purported Transferee has resold the Excess Shares before receiving the
Corporation's demand to surrender the Excess Shares to the Agent, the Purported
Transferee shall be deemed to have sold the Excess Shares for the Agent, and
shall be required to transfer to the Agent any Prohibited Distributions and the
proceeds of such sale, except to the extent that the Agent grants written
permission to the Purported Transferee to retain a portion of such sales
proceeds not exceeding the amount that the Purported Transferee would have
received from the Agent pursuant to paragraph (d)(iii) of this Article IX if the
Agent rather than the Purported Transferee had resold the Excess Shares.
(iii) The Agent shall apply any proceeds of a sale by it of
Excess Shares and, if the Purported Transferee has previously resold the Excess
Shares, any amounts received by it from a Purported Transferee as follows: (1)
first, such amounts shall be paid to the Agent to the extent necessary to cover
its costs and expenses incurred in connection with its duties hereunder; (2)
second, any remaining amounts shall be paid to the Purported Transferee, up to
the amount paid by the Purported Transferee for the Excess Shares (or the fair
market value, calculated on the basis of the closing market price for
Corporation Securities on the day before the Transfer, of the Excess Shares at
the time of the attempted Transfer to the Purported Transferee by gift,
inheritance, or similar Transfer), which amount (or fair market value) shall be
determined in the discretion of the Board of Directors; and (3) third, any
remaining amounts shall be paid in equal shares to the United Way serving the
New Orleans region, the Aquarium of the Americas, Baptist Hospital and Covenant
House of New Orleans. The recourse of any Purported Transferee against any
Purported Transferor in respect of any Prohibited Transfer shall be limited to
the amount specified in clause (2) of the preceding sentence. In no event shall
amounts due to the Purported Transferor pursuant to this Article IX inure to the
benefit of the Corporation.
(iv) If the Purported Transferee fails to surrender the Excess
Shares or the proceeds of a sale thereof to the Agent within thirty business
days from the date on which the Corporation makes a demand pursuant to paragraph
(d)(ii) of this Article, then the Corporation shall institute legal proceedings
to compel the surrender.
(v) The Corporation shall make the demand described in
paragraph (d) (ii) of this Article IX within thirty days of the date on which
the Board of Directors determines that the attempted Transfer would result in
Excess Securities; provided, however, that if the Corporation makes such demand
at a later date, the provisions of this Article shall apply nonetheless.
(e) Bylaws, Legends, Etc.
(i) The Bylaws of the Corporation shall make appropriate
provisions to effectuate the requirements of this Article IX.
(ii) All certificates representing Corporation Securities
issued after the effectiveness of this Article IX shall bear a legend to the
effect that such Corporation Securities and any Corporation Securities acquired
upon exercise or conversion of such Corporation Securities are subject to the
restrictions set forth in this Article IX.
(iii) A majority of the Directors of the Corporation shall
have the power to determine all matters necessary to determine compliance with
this Article IX, including without limitation (1) whether a new Five-Percent
Shareholder would be required to be identified in certain circumstances, (2)
whether a Transfer is a Prohibited Transfer, (3) the Percentage Stock Ownership
in the Corporation of any Five-Percent Shareholder, (4) whether an instrument
constitutes a Corporation Security, (5) the amount (or fair market value) due to
a Purported Transferee pursuant to clause (2) of paragraph (d)(iii) of this
Article IX, and (6) any other matters which a majority of the Directors
determine to be relevant; and the good faith determination of a majority of the
Directors on such matters shall be conclusive and binding for all the purposes
of this Article IX.
<PAGE>
EXHIBIT 10.39
AGREEMENT
THIS AGREEMENT is entered into as of this 31st day of December, 1994,
by and among B.D. Flurry ("Employee"), and Hibernia National Bank, a national
banking association ("Hibernia").
W I T N E S S E T H:
WHEREAS, Hibernia intends to acquire by merger Pioneer Bancshares
Corporation ("Pioneer"), of which Employee is the President;
WHEREAS, Employee is a unique repository of information and knowledge
concerning Pioneer, its customers and its operations;
WHEREAS, Hibernia desires to have the benefit of such knowledge and
experience and recognizes that such knowledge and experience would be valuable
to competitors of Hibernia to the detriment of Hibernia;
NOW, THEREFORE, in consideration of the premises and of the respective
representations, warranties and covenants hereinafter set forth, the parties
hereto hereby agree as follows:
1. EMPLOYMENT. Hibernia agrees to employ Employee and Employee agrees
to remain in the employ of Hibernia, upon the terms and subject to the
conditions provided herein.
2. POSITION AND TITLE. During the period of his employment hereunder,
Employee shall be employed as City President, Shreveport Region, or such other
title as may be mutually agreed by the parties, and shall perform services when
and as directed by Hibernia, as more fully described in Section 3 hereof.
3. DUTIES. Employee's duties shall include those duties that may, from
time to time, be delegated to Employee by the President of Hibernia, and such
other responsibilities as may, in the sole discretion of the President of
Hibernia, be necessary or appropriate to the position of City President,
Shreveport Region. The duties would include, but not necessarily be limited to,
supervising the day-to-day operations of the Shreveport branches, assisting in
the integration of Pioneer into the operations of Hibernia, and supervising
management personnel involved in the Shreveport operations. During the period of
this employment hereunder, Employee shall devote his business time, attention,
skill and efforts to the faithful performance of his duties hereunder. During
the term of his employment under this Agreement, Employee may not serve, or
continue to serve, on the board of directors or hold any other office or
position with any other financial institution within the Affected Area, as
defined below.
4. COMPENSATION.
(a) Salary. Hibernia will pay Employee $_____ per year to
compensate Employee for the duties and
responsibilities performed for Hibernia described in
Section 3 above. During the term of his employment,
Employee's salary will be paid currently in equal
installments twice monthly, on the 15th and the last
business day of each month. The foregoing salary may
be increased, but not decreased, by the Board of
Directors of Hibernia or any committee of such Board
to which such responsibility is generally or
specifically delegated.
(b) Benefits. Employee during the term of his employment
shall also be entitled to receive such benefits as
Hibernia may provide for its employees pursuant to
any policy of Hibernia authorized by its Board of
Directors, including, but not limited to,
reimbursement of professional dues and fees and the
reasonable cost of continuing professional education.
5. TERM. Employee's employment under this Agreement shall
commence at the Effective Date pursuant to the Agreement and Plan and Merger
(the "Agreement") dated June 1, 1994 by and between the Hibernia Corporation and
Pioneer Bancshares Corporation and shall terminate five years from the Effective
Date, (the "Contractual Termination Date"). This Agreement may be terminated
sooner in accordance with any provision hereof.
6. TERMINATION.
(a) Death or Disability.
(i) Employment shall terminate upon Employee's
death.
(ii) If Employee becomes, in the good faith
judgment of Hibernia's Board of Directors,
physically or mentally disabled so as to be
eligible to receive benefits pursuant to the
disability insurance policy provided to
Employee pursuant to this Agreement,
Hibernia may, at its option, terminate
employment upon not fewer than 15 days'
written notice.
If employment is terminated pursuant to this
Subsection 6(a), Employee or his heirs, estate,
executor and administrator shall be entitled to
receive, and Hibernia shall pay to Employee or his
heirs, estate, executor or administrator unpaid
salary through the Contractual Termination Date.
(b) Termination for Cause. This Agreement may be
immediately terminated by Hibernia if:(i) after the
Effective Date, Employee knowingly and intentionally
commits, or is arrested for or otherwise officially
charged with, a felony or a crime involving moral
turpitude or any other criminal activity or unethical
conduct that, in the good faith opinion of the Board
of Directors of Hibernia, would seriously impair
Employee's ability to perform his duties hereunder or
would impair the business reputation of Hibernia or
(ii) in good faith opinion of the Board of Directors
of Hibernia, Employee has knowingly or intentionally
violated any statute, rule, or regulation under the
federal securities or banking laws, the securities of
banking laws of any state, or any provision of this
Agreement.
(c) Termination for Good Reason. Employee may terminate
this Agreement at any time for "Good Reason", defined
to mean, (i) while Employee is an employee, the
assignment to him of any duties or responsibilities
which in his reasonable judgement are inconsistent
with the position of Employee set forth in Section 2
hereof, (ii) requiring Employee, without his consent,
to be based anywhere other than Shreveport,
Louisiana. If Employee terminates this Agreement for
Good Reason, Hibernia shall pay to Employee the
remainder of his salary through the Contractual
Termination Date at the time of termination in a lump
sum.
(d) Termination of Agreement Without Cause. Hibernia may
terminate this Agreement without cause at any time
after the Effective Date by paying to Employee the
full amount of salary in a lump sum to which he would
have been entitled through the Contractual
Termination Date.
7. Non-Competition.
(a) If Hibernia terminates this Agreement for cause, or
Employee terminates his employment without Good
Reason, or if Employee terminates his employment for
Good Reason or Hibernia terminates the Agreement
without cause and, in each such case, Hibernia has
paid or continues to pay Employee the amounts due him
hereunder through the Contractual Termination Date,
then for a period of five years from the Effective
Date, Employee shall not:
(i) become an officer, director, employee or
more than 3% shareholder in any financial
institution having an office or otherwise
doing business within the Affected Area, as
defined below;
(ii) solicit any of Hibernia's depositors or
other customers to become depositors or
customers of any other financial institution
having an office or otherwise doing business
within the Affected Area;
(b) As used herein, the term "Affected Area" shall mean
the Parishes of Louisiana within a circle having as
its center the location of the Hibernia branch
located at 401 Texas Street, Shreveport, on the date
of this Agreement and a radius of 100 miles from such
center.
8. HEADINGS. Section and other headings contained in this Agreement are
for reference purposes only and shall not affect in any way the meaning or
interpretation of this Agreement.
9. INTEGRATED AGREEMENT. This Agreement, and all other documents and
instruments delivered in accordance with the terms hereof, constitutes the
entire understanding and agreement among the parties hereto with respect to the
subject matter hereof, and there are no other agreements, understandings,
restrictions, representations or warranties among the parties other than those
set forth herein or herein provided for.
10. AMENDMENTS. This Agreement may be amended or modified at any time
in any or all respects, but only by an instrument in writing executed by the
parties hereto.
11. CHOICE OF LAW. The validity of the Agreement, the construction of
its terms, and the determination of the rights and duties of the parties hereto
shall be governed by and construed in accordance with the internal laws of the
State of Louisiana applicable to contracts made to be performed wholly within
such State.
12. SEVERABILITY. Each provision of the Agreement is intended to be
severable. In the event that any one or more of the provisions contained in this
Agreement shall for any reason be held to be invalid, illegal or unenforceable,
the same shall not affect the validity or enforceability of any other provision
of this Agreement, but this Agreement shall be construed as if such invalid,
illegal or unenforceable provisions had never been contained therein.
Notwithstanding the foregoing, however, no provision shall be severed if it is
clearly apparent under the circumstances that the parties would not have entered
into the Agreement without such provision.
<PAGE>
IN WITNESS WHEREOF, the parties hereto have executed this Agreement as
of the day and year first above written.
EMPLOYEE
/S B.D. FLURRY
B. D. Flurry
HIBERNIA NATIONAL BANK
By: /S STEPHEN A. HANSEL
Stephen A. Hansel
President and Chief
Executive Officer
<PAGE>
EXHIBIT 10.40
HIBERNIA CORPORATION
SPLIT DOLLAR LIFE INSURANCE PLAN
TABLE OF CONTENTS
Page
ARTICLE 1 - ESTABLISHMENT AND PURPOSE...................... 1
ARTICLE 2 - DEFINITIONS.................................... 1
ARTICLE 3 - PARTICIPATION.................................. 3
Designation....................................... 3
Insurability...................................... 3
Waiver............................................ 3
ARTICLE 4 - INSURANCE...................................... 3
Ownership of Policies............................. 3
Collateral Assignment............................. 3
Premium Payments.................................. 4
Disability........................................ 4
Assignment........................................ 4
ARTICLE 5 - ALLOCATION OF POLICY INTERESTS................. 4
Company's Policy Interest......................... 4
Participant's Policy Interest..................... 5
Determination of Policy Interests................. 5
ARTICLE 6 - DISPOSITION OF THE POLICIES.................... 5
Early Termination................................. 6
Policy Maturity Date.............................. 6
Death 6
ARTICLE 7 - ADMINISTRATION................................. 6
Committee......................................... 7
Beneficiary Designation........................... 7
ARTICLE 8 - AMENDMENT AND TERMINATION...................... 7
Right to Amend or Terminate Plan.................. 7
Notice 8
ARTICLE 9 - GENERAL PROVISIONS............................. 8
No Right to Continued Employment.................. 8
Payment on Behalf of Payee........................ 8
Nonalienation..................................... 8
Withholding....................................... 8
Claims for Benefits............................... 9
Binding Effect.................................... 9
Notices 9
Entire Plan....................................... 9
Governing Law..................................... 9
Limitations on Benefits........................... 10
Merger or Consolidation........................... 10
<PAGE>
HIBERNIA CORPORATION
SPLIT DOLLAR LIFE INSURANCE PLAN
ARTICLE 1 - ESTABLISHMENT AND PURPOSE
This plan was authorized and adopted by the Executive Compensation
Committee of the Board of Directors of Hibernia Corporation on January 22, 1996,
and was established to provide death benefits for the beneficiaries of
designated key management employees of Hibernia Corporation, Hibernia National
Bank or affiliates thereof and shall be known as the "Split Dollar Life
Insurance Plan" (the "Plan").
ARTICLE 2 - DEFINITIONS
The following words and phrases as used in the Plan have the following
meanings:
2.1 Bank: Hibernia National Bank, a financial institution with its
principal place of business in New Orleans, Louisiana.
2.2 Beneficiary: The person, persons, entity or entities designated by
a Participant to receive the benefits, if any, payable after the death of such
Participant. Such forms shall be made on forms provided, from time to time, by
the Committee or the Insurer. If there is no designation or a designation is
invalid, then a Participant's Beneficiary shall be determined in accordance with
the terms of the Retirement Security Plan of Hibernia Corporation.
2.3 Collateral Assignment: A written agreement between a Participant
and the Company with respect to a Policy, which agreement is intended to
establish a security interest in the proceeds of such Policy in favor of the
Company, a form of which is attached hereto as Exhibit A. The terms of each such
Collateral Assignment shall be deemed incorporated in this Plan by this
reference.
2.4 Committee: The Committee described in Article 7 hereof which is
responsible for administering this Plan.
2.5 Company: Hibernia Corporation, a corporation organized and existing
under the laws of the State of Louisiana, and any entity which succeeds to its
rights and obligations with respect to the Plan.
2.6 Company's Policy Interest: An amount determined, from time to time,
in accordance with Section 5.1 hereof, the payment of which shall be secured by
a Collateral Assignment.
2.7 Death Benefit: An amount determined with respect to a Policy, in
accordance with the Participation Agreement providing for the acquisition of
such Policy.
2.8 Disability: The period during which an Employee is actually
receiving benefits under a long-term disability plan maintained by the Company,
the Bank or an affiliate thereof (whether a group or individual policy) with
respect to a condition which occurred or an illness which commenced while the
Employee was employed by the Company, the Bank or an affiliate thereof. The
Committee shall determine whether a person is Disabled within the meaning of
this Section 2.8.
2.9 Early Termination: The earlier of (a) the date on which a
Participant fails to pay any premium in accordance with the provisions of
Section 4.3 hereof, provided such date occurs prior to the Policy Maturity Date,
(b) the termination of Participant's employment with the Company, the Bank or an
affiliate thereof for any reason prior to the Policy Maturity Date, except on
account of Death, or (c) the termination of this Plan by the Company in
accordance with the provisions of Article 8 hereof.
2.10 Employee: An individual who is employed by the Company, the Bank
or any subsidiary or affiliate thereof.
2.11 Insurer: The insurance company or companies designated by the
Committee or the Company, as the case may be, to issue one or more Policies on
the life of a Participant hereunder.
2.12 Participant: An Employee designated by the Committee to
participate in this Plan. A Participant may designate a trustee or trustees to
act in his or her stead as a Participant hereunder, with the prior written
consent of the Committee.
2.13 Participant's Policy Interest: An amount determined, from time to
time, in accordance with Section 5.2 hereof.
2.14 Participation Agreement: A written agreement between the Company
and each Participant hereunder which sets forth the terms and conditions of
participation hereunder. A Participation Agreement shall be entered into with
respect to each Policy acquired hereunder; the terms of each Participation
Agreement shall be deemed incorporated in this Plan by this reference.
2.15 Plan: This Split Dollar Life Insurance Plan, as may be amended
from time to time.
2.16 Plan Year: The calendar year; the first Plan Year shall begin
January 1, 1996. A Policy Year shall be the 12-month period with respect to
which each Policy is maintained.
2.17 Policy: One or more life insurance policies issued by an Insurer
on the life of a Participant hereunder.
2.20 Policy Maturing Date: The first day of the Policy Year following
the completion of 15 Policy Years.
2.21 Term Cost: An amount equal to the annual cost of current life
insurance protection, determined as the lesser of (a) the P.S. 58 rates
published by the Internal Revenue Service, or (b) the Insurer's term rates.
2.22 Year of Service: Each 12-month period measured from an Employee's
most recent date of hire, provided her or she remains continuously employed by
the Company, the Bank or an affiliate of either during such period.
ARTICLE 3 - PARTICIPATION
3.1 Designation. The Committee shall have the sole discretion to select
Employees for participation in this Plan. The Committee shall notify those
Employees selected for participation of the benefits available under the Plan
and the terms and conditions of the Plan. Participation determinations by the
Committee shall be conclusive and binding on all persons and need not be uniform
as between groups or categories of Employees.
3.2 Insurability. Each Participant shall make application to an Insurer
designated by the Committee or the Company, as the case may be, for the issuance
of one or more Policies in such amounts as may be determined by the Company or
the Committee. Each Participant shall furnish any information requested by the
Company or the Committee to facilitate the issuance of such Policies, take such
physical examinations as the Company or the Committee may deem necessary, and
take such other actions as may be requested by the Company, the Committee, or an
Insurer, as the case may be. If a Participant refuses to cooperate, is
uninsurable or is insurable at rates or pursuant to an underwriting
classification not acceptable to the Company or the Committee, then the
Committee, in its sole discretion, may determine that such Participant is
ineligible to participate hereunder.
3.3 Waiver. As a condition of participation hereunder, each Employee
shall waive coverage under any group term life insurance plan or plans
maintained by the Company, the Bank or an affiliate thereof, including any
supplemental coverage under any such plan or plans. Such waiver shall be made in
such form as may be prescribed by the Committee.
ARTICLE 4 - INSURANCE
4.1 Ownership of Policies. Each Participant shall be the sole owner of
any Policy issued hereunder on his or her life, subject to the terms and
conditions of this Plan and the related Collateral Assignment.
4.2 Collateral Assignment. Each Participant shall, upon issuance of a
Policy hereunder, enter into a Collateral Assignment in favor of the Company
containing such terms and conditions as the Committee deems necessary or
appropriate. All rights in and to a Policy which are not expressly granted to
the Company pursuant to such assignment shall be retained by the Participant. A
Collateral Assignment shall not be cancelled, altered or amended without the
prior written consent of the Company.
4.3 Premium Payments. The Company shall pay premiums on each Policy
acquired hereunder in the amount or percentage set forth in each Participation
Agreement until the earlier of (a) the expiration of the number of years stated
in each such Participation Agreement, or (b) the date on which a Participant
ceases to be employed by the Company, the Bank or an affiliate thereof, as the
case may be.
Any portion of the premium not paid by the Company shall be paid by
each affected Participant, which portion shall not be less than the Term Cost
(unless a lesser amount is designated by the Committee). Payment shall be made
in the form of cash or the application of dividends or the surrender value of a
Policy; provided, however, that a Participant shall be permitted to pay his or
her portion of such premium by the application of dividends or the surrender
value of the Policy only to the extent the Company's Policy Interest is not
reduced as a result of such payment.
4.4 Disability. During the period of a Disability hereunder, the
Company shall pay the portion of any premium otherwise payable by a Participant
in accordance with Section 4.3 hereof. Such premium payment shall cease upon the
earlier of (a) the expiration of the number of years stated in the applicable
Participation Agreement, or (b) the date on which the Participant ceases to be
Disabled, as determined by the Committee.
4.5 Assignment. A Participant may transfer or assign his or her
interest in a Policy acquired hereunder with the prior written consent of the
Committee and subject to such terms and conditions as the Committee deems
necessary or acceptable.
The Company may assign its interest in any Collateral Assignment
hereunder; provided, however, that any such assignment shall be consistent with
the terms and conditions of this Plan.
ARTICLE 5 - ALLOCATION OF POLICY INTERESTS
5.1 Company's Policy Interest. The Company shall have an interest in
each Policy acquired hereunder, determined, from time to time, in accordance
with this section 5.1:
a. In the event of an Early Termination or as of a Policy
Maturity Date, the Company's Policy Interest shall equal the
lesser of (1) the aggregate principal amount of premiums paid
by the Company, reduced by the aggregate principal amount of
any premium reimbursed to the Company by the Participant, if
any, or (2) the entire cash surrender value of the Policy.
b. If a Participant dies before his or her termination of
employment with the Company, the Bank or an affiliate thereof,
the Company's Policy Interest shall equal the greater of (1)
the death benefit actually payable under the Policy, reduced
by any death benefit determined in accordance with Section
5.2(b) hereof, or (2) the aggregate principal amount of
premiums paid by the Company, reduced by the amount of the
premiums reimbursed to the Company by the Participant, if any.
Any payment of the Company's Policy Interest hereunder shall first be
made from the Policy's cash value which is attributable to the paid-up
additional life insurance purchased by policy dividends, if any. A Participant
shall have no interest in such paid-up additional life insurance, except to the
extent the death benefit or cash surrender value thereof exceeds the Company's
Policy Interest.
5.2 Participant's Policy Interest. Each Participant shall have an
interest in each Policy acquired on his or her life hereunder, determined, from
time to time, in accordance with the provisions of this section 5.2:
a. In the event of an Early Termination or as of a Policy
Maturity Date, a Participant's Policy Interest shall equal the
cash surrender value of the Policy, reduced by the Company's
Policy Interest determined in accordance with Section 5.1(a)
hereof.
b. If a Participant dies before his or her termination of
employment with the Company, the Bank or an affiliate thereof,
such Participant's Policy Interest shall equal the lesser of
(1) the Death Benefit, or (2) the death benefit actually
payable under the Policy, reduced by the excess of the
aggregate premiums paid by the Company over aggregate premiums
reimbursed to the Company by the Participant, if any.
Notwithstanding the provisions of this Section 5.2, if a Participant
commits suicide during the two-year period beginning on the date of his or her
participation in the Plan or if a Participant makes any material misstatement of
information or nondisclosure of medical history, then the Participant (or his or
her Beneficiary) shall be paid the total amount paid by such Participant in the
form of premiums hereunder, if any, without interest. Such payment shall be in
lieu of any other benefit under this Plan or the Policy and shall fully
discharge the Company and the Committee hereunder.
5.3 Determination of Policy Interests. The Committee shall have the
sole and absolute discretion to determine the value of the interests described
in Sections 5.1 and 5.2 hereof. Such decisions by the Committee shall be final
and binding on all parties claiming an interest in any Policy issued hereunder,
including any Beneficiary.
ARTICLE 6 - DISPOSITION OF THE POLICIES
6.1 Early Termination. In the event of an Early Termination, an
affected Participant shall be entitled to unencumbered ownership of the Policy
by paying to the Company an amount equal to the Company's Policy Interest
determined in accordance with Section 5.1(a) hereof, not later than 60 days
following such termination (or such longer period as may be permitted by the
Committee). Upon the payment of such amount, the Company shall promptly execute
and deliver to the Participant an appropriate instrument extinguishing the
Collateral Assignment and releasing all rights thereunder. Alternatively, if an
affected Participant fails to remit the Company's Policy Interest within the
time prescribed in this Section 6.1, the Company shall surrender the Policy and
remit to the Participant the excess of the cash surrender value of the Policy
over the Company's Policy Interest, if any, determined in accordance with
Section 5.1a hereof. Such disposition shall be in lieu of any benefit or premium
otherwise payable by the Company to or for the benefit of a Participant
hereunder.
6.2 Policy Maturity Date. Upon the Policy Maturity Date, an affected
Participant shall be entitled to unencumbered ownership of the Policy by paying
to the Company an amount equal to the Company's Policy Interest determined in
accordance with Section 5.1(a) hereof, not later than 60 days following such
termination (or such longer period as may be permitted by the Committee). Upon
the payment of such amount, the Company shall promptly execute and deliver to
the Participant an appropriate instrument extinguishing the Collateral
Assignment and releasing all rights thereunder.
Alternatively, if the Participant fails to remit the Company's Policy
Interest within the time prescribed in this Section 6.2:
a. The Participant may retain ownership of the Policy, subject to the
terms and conditions of the Collateral Assignment and this Plan; or
b. The Company may surrender the Policy and remit to the Participant
the excess of the cash surrender value of the Policy over the
Company's Policy Interest determined in accordance with Section
5.1a hereof, if any.
Such disposition shall be made in accordance with the directions of the affected
Participant and shall discharge, in full, the Company's obligations hereunder.
6.3 Death. If a Participant dies before his or her termination of
employment with the Company, the Bank or an affiliate thereof, as the case may
be, the Committee shall direct the payment of the Participant's Policy Interest,
determined in accordance with Section 5.2(b) hereof, to the Participant's
Beneficiary. Such amount shall be payable solely from the proceeds of the
Policy, but the Committee shall use its best efforts to arrange for the prompt
payment of such amount.
ARTICLE 7 - ADMINISTRATION
7.1 Committee. The Committee shall be the Executive Compensation
Committee of the Company's Board of Directors. The Committee shall have general
responsibility for administration of the Plan (including, but not limited to,
complying with any applicable reporting and disclosure requirements, and
establishing and maintaining records). In the exercise of its sole and absolute
discretion, the Committee shall interpret the Plan's provisions, determine the
eligibility of any person for a benefit hereunder, and the amount of any such
benefit.
Any determination by the Committee need not be uniform as to all or any
Participant hereunder. Any such determination shall be conclusive and binding on
all persons. The Committee shall engage the services of such independent
actuaries, accountants, attorneys and other administrative personnel as it deems
necessary to administer the Plan.
The Committee, in its sole discretion, may delegate the power and
authority granted hereunder to any officer or Employee of the Company or an
affiliate thereof; provide, however, that the delegation of the power to amend
the Plan shall be limited to ministerial or administrative amendments and that
the power to terminate the Plan shall not be delegated. When acting in
accordance with such delegation (whether orally or in writing), the Committee's
designee shall be deemed to possess the power and authority granted to the
Committee hereunder.
7.2 Beneficiary Designation. Each Participant shall file with the
Committee or the Insurer, as the case may be, a written designation, in such
form as may be specified by the Committee or the Insurer, of one or more persons
as the Beneficiary who shall be entitled to receive the benefits, if any,
payable hereunder after the Participant's death. A Participant may, from time to
time, revoke or change such Beneficiary designation, without the consent of any
designated Beneficiary, by filing a new designation with the Committee or the
Insurer, as the case may be. The last such designation actually received by the
Committee or the Insurer shall be controlling. All decisions of the Committee or
the Insurer, as the case may be, concerning the effectiveness of any designation
and the identity of any Beneficiary shall be final.
If no designation is in effect at the time of a Participant's death,
the benefits, if any, payable under the Plan after the Participant's death shall
be made in accordance with the provisions of the Retirement Security Plan of
Hibernia National Bank, including any beneficiary designation completed by the
Participant under that plan.
ARTICLE 8 - AMENDMENT AND TERMINATION
8.1 Right to Amend or Terminate Plan. The Board of Directors of the
Company reserves the right at any time to amend or terminate the Plan, in whole
or in part, without the consent of any Participant or Beneficiary. Such
amendment or termination may be made in the sole discretion of either the board
or the Committee.
In no event shall an amendment reduce the amount of a Participant's
Policy Interest hereunder determined in accordance with Section 5.2(a) as of the
effective date of such amendment. In the event of a termination, the provisions
of Section 6.1 hereof shall apply to the disposition of Policies acquired
hereunder.
8.2 Notice. Written notice of any termination or material amendment of
the Plan shall be given to each Participant.
ARTICLE 9 - GENERAL PROVISIONS
9.1 No Right to Continued Employment. Nothing contained in the Plan
shall give any Participant the right to be retained as an Employee of the
Company or any subsidiary or affiliate of the Company or interfere with or
restrict the right of the Company or any subsidiary or affiliate to terminate
the employment of a Participant for any reason or no reason.
9.2 Payment on Behalf of Payee. If the Committee shall find that any
person to whom any amount is payable under the Plan is unable to care for such
person's affairs because of illness or accident, or is a minor, or has died,
then any payment due such person or such person's estate (unless a prior claim
therefor has been made by a duly appointed legal representative) may, if the
Committee so elects, be paid to such person's spouse, a child, a relative, an
institution maintaining or having custody of such person, or any other person
deemed by the Committee to be a proper recipient on behalf of such person
otherwise entitled to payment. Any such payment shall be a complete discharge of
the liability of the Plan and the Company therefor.
9.3 Nonalienation. No interest, expectancy, benefit, payment, claim,
interest or right of any Participant or Beneficiary under the Plan shall be (a)
subject in any manner to any claims of any creditor of the Participant or
Beneficiary, (b) subject to the debts, contracts, liabilities or torts of the
Participant or Beneficiary or (c) subject to alienation by anticipation, sale,
transfer, assignment, bankruptcy, pledge, attachment, charge or encumbrance of
any kind. If any person shall attempt to take any action contrary to this
paragraph, such action shall be null and void and of no effect, and the
Committee and the Company shall disregard such action and shall not in any
manner be bound thereby and shall suffer no liability on account of its
disregard thereof. If any Participant or Beneficiary hereunder shall become
bankrupt or attempt to anticipate, alienate, sell, assign, pledge, encumber or
charge any right hereunder, then, except as provided in Section ___ hereof, such
right or benefit shall, in the discretion of the Committee, cease and terminate,
and in such event the Committee may hold or apply the same or any part thereof
for the benefit of the Participant or Beneficiary or the spouse, children, or
other dependents of the Participant or Beneficiary, or any of them, in such
manner and in such amounts and proportions as the Committee may deem proper.
9.4 Withholding. Notwithstanding any provision of this Plan to the
contrary, the Company, including the Bank and any subsidiary or affiliate
thereof, shall be entitled to withhold as a condition of any payment hereunder
any taxes required to be withheld. Withholding shall be made from any amount
payable from this Plan or from any amount otherwise payable to the Participant
by the Company, the Bank or any subsidiary or affiliate thereof, as the case may
be.
9.5 Claims for Benefits. Each Participant or Beneficiary claiming any
right under this Plan must give written notification thereof to the Committee.
If a claim is denied, the denial shall be contained in a written notice stating
the following:
a. The specific reason for the denial;
b. Specific reference to the Plan provision on which the denial is
based;
c. Description of additional information necessary for the claimant to
present his or her claim, if any, and an explanation of why such
material is necessary; and
d. An explanation of the Plan's claims review procedure.
The claimant will have 60 days to request a review of any denial by the
Committee. The request for review must be in writing and delivered to the
Committee, which will then provide a full and fair review. The claimant may
review pertinent documents and may submit issues and comments in writing. The
decision by the Committee with respect to the review must be given within 60
days after receipt of the request, unless special circumstances require an
extension (such as for a hearing). In no event shall the decision be delayed
beyond 120 days after receipt of the request for review. The decision shall
include specific reasons and refer to the specific Plan provisions on which it
is based.
9.6 Binding Effect. Obligations incurred by the Company pursuant to
this Plan shall be binding upon and inure to the benefit of the Company, its
successors and assigns, and the Participant and the Participant's Beneficiary.
9.7 Notices. Any notices required or permitted to be given to the
Committee under this Plan shall be deemed received when delivered personally or
mailed, by United States mail, postage prepaid by registered or certified mail,
to the following address: Hibernia Corporation, Attn.: Thomas P. King, P.O. Box
61540 New Orleans, La. 70161. Any notice required or permitted to be given to a
Participant under this Plan shall be deemed received when delivered personally
to such Participant or mailed, by United States mail, postage prepaid, to the
Participant's address as last shown in the personnel records of the Company.
9.8 Entire Plan. All Collateral Assignments and Participation
Agreements, and Beneficiary Designations are made a part hereof and are
incorporated herein by reference. This document, any written amendments hereto,
any Collateral Assignment, Participation Agreement or Beneficiary Designation
contain all the terms and provisions of the Plan and shall constitute the entire
Plan, any other alleged terms or provisions being of no effect.
9.9 Governing Law. The validity of this Plan, the construction of its
terms and the determination of the rights and duties of the parties hereto shall
be governed by and construed in accordance with federal laws and regulations and
the internal laws of the State of Louisiana applicable to contracts made and to
be performed wholly within such state.
9.10 Limitations on Benefits. Notwithstanding any provision of this
Plan to the contrary, any claim for benefits related to a Policy shall be
subject to the terms and conditions of such Policy. Neither the Company, the
Bank, nor any affiliate or subsidiary thereof shall be deemed to have guaranteed
the amount or payment of any benefit under the Policy. .
9.11 Merger or Consolidation. In the event of a merger or a
consolidation by the Company with another corporation, or the acquisition of
substantially all of the assets or outstanding stock of the Company by another
corporation, then and in such event the obligations and responsibilities of the
Company under this Plan shall be assumed by any such successor or acquiring
corporation, and all of the rights, privileges and benefits of the Participants
and Beneficiaries hereunder shall continue.
THIS PLAN was adopted by the Executive Compensation Committee of the
Board of Directors of the Company on January 22, 1996, and finally executed this
____ day of March, 1997, in multiple counterparts, each of which shall be deemed
an original, to be effective as of the date designated above.
HIBERNIA CORPORATION
By:
Its:
<PAGE>
HIBERNIA CORPORATION
SPLIT DOLLAR LIFE INSURANCE PLAN
PARTICIPATION AGREEMENT
To the Committee:
I acknowledge that I have been designated as a participant in the SPLIT
DOLLAR LIFE INSURANCE PLAN OF HIBERNIA CORPORATION (the "Plan"), effective for
the Plan Year beginning January 1, 1996. I agree to participate in the Plan and
be bound by the terms and conditions of the Plan, this Participation Agreement,
and the Collateral Assignment related to the Policy described herein, all of
which are incorporated in this Participation Agreement by this reference. I
acknowledge that I have received and reviewed a copy of the Plan. Capitalized
terms used herein have the meanings ascribed to them in the Plan.
I. POLICY INFORMATION. I consent and agree to the acquisition of the
Policy or Policies described on Schedule I hereto (referred to herein in the
aggregate as the "Policy").
II. SPLIT DOLLAR AGREEMENT. I acknowledge that the Policy described
herein is acquired and will be maintained in connection with the Plan. I
acknowledge that my rights in and to the Policy and its proceeds are subject to
and limited by the terms of this Participation Agreement, the Plan, and the
Collateral Assignment.
III. PREMIUM PAYMENTS. I understand that the Company has agreed to pay
_____% of the applicable premium for a period of _____ years, commencing as of
_____________, 199___ (the first day of the initial policy year of the Policy).
I acknowledge and agree to pay the balance of the premium, and I authorize the
Company to prorate and withhold such amount from my compensation.
IV. TAXATION. I acknowledge that neither the Company nor its officers,
employees, agents, consultants or advisors have guaranteed any particular income
tax treatment as a result of my participation in the Plan. I have been informed
that participation in the Plan may result in the attribution of taxable income
to me during the period of my participation. I further acknowledge that any
Policy acquired under the Plan may be deemed a modified endowment contract
within the meaning of Section 7702A of the Internal Revenue Code of 1986, as
amended, and that the tax consequences of a modified endowment contract are
substantially different from the tax consequences of a life insurance contract.
I acknowledge that I have been advised to contact my own tax advisor concerning
participation in the Plan, including the ownership and acquisition of Policies
hereunder.
V. COLLATERAL ASSIGNMENT. I agree that upon issuance of the Policy, I
will execute a Collateral Assignment, substantially in the form attached as
Exhibit A to the Plan. I acknowledge that if I fail to execute such an
assignment, my participation in the Plan shall automatically cease, and that the
Company shall have no obligation to procure or maintain the Policy described
herein.
VI. WAIVER. I hereby waive any right to participate in any group term
life insurance plan maintained by the Company, the Bank or an affiliate thereof,
including supplemental coverage thereunder, contemporaneous with the issuance of
the Policy described herein. This waiver shall not affect my participation in
any accidental death and dismemberment coverage under a group plan maintained by
the Company, the Bank or an affiliate thereof, from time to time.
This Participation Election has been executed in multiple counterparts,
each of which shall be deemed an original, on the dates set forth below, but to
be effective as of the Plan Year beginning January 1, 1996.
PARTICIPANT: COMMITTEE:
Authorized Representative
Date: Date:
<PAGE>
HIBERNIA CORPORATION
SPLIT DOLLAR LIFE INSURANCE PLAN
PARTICIPATION AGREEMENT
SCHEDULE I
1. Insured:
2. Insurer:
3. Application Date:
4. Policy Number:
5. Annual Premium:
6. Term Cost:
7. Death Benefit:
Period Ending Amount
HIBERNIA CORPORATION
SPLIT DOLLAR LIFE INSURANCE PLAN
COLLATERAL ASSIGNMENT
EXHIBIT A
For Value Received ______________________, a person of the
full age of majority and a participant in the Hibernia Corporation Split Dollar
Life Insurance Plan (the "Plan") (the "Assignor") hereby transfers and assigns
to Hibernia Corporation, a corporation organized and existing under the laws of
the State of Louisiana (the "Assignee"), Policy No. __________ issued on the
life of the Assignee by Northwestern Mutual Life Insurance Company (the
"Insurer"), including any supplemental contracts issued in connection therewith
(the policy and contracts referred to herein as the "Policy"), subject to the
terms and conditions set forth in the Plan, the Policy, and as more fully
described herein, but subject to any superior lien that the Insurer may have
against the Policy. Capitalized terms used hereunder shall have the meaning
ascribed to them in the Plan.
1. Collateral. This assignment is made and the Policy is to be
held as collateral security for any and all liabilities owed by the Assignor to
the Assignee pursuant to the terms of the Plan and that certain Participation
Agreement dated as of March __, 1997, by and between the Assignor and the
Assignee (such documents together referred to herein as the "Liability
Agreements"), which shall not be less than the Company's Policy Interest (as
defined in the Plan), determined from time to time.
2. Assignee's Specific Rights. Without detracting from the
generality of the foregoing, the following specific rights shall be exercisable
solely by the Assignee:
a. The right to collect from the Insurer the net proceeds of
the Policy upon the death of the Assignor or the maturity
of the Policy;
b. The right to surrender the Policy and receive the value
thereof at such times as the Policy or Insurer may allow;
c. The right to obtain one or more loans or advances against
the Policy, either from the Insurer or a third-party and
to pledge or assign the Policy as security;
d. The right to collect and receive all distributions or
shares of surplus, dividend deposits or additions to the
Policy and to exercise any and all options contained in
the Policy with respect thereto; and
e. The right to exercise all non-forfeiture rights permitted
under the terms of the Policy or allowed by the Insurer
and to receive all benefits and advantages derived
therefrom.
3. Assignor's Specific Rights. This assignment shall
constitute the transfer of all claims, options, privileges, rights, title and
interest in the Policy, as set forth more fully herein; provided, however, that
the following specific rights, so long as the Policy has not been surrendered,
shall be reserved and exercisable by the Assignor:
a. The right to collect from the Insurer any disability
benefit payable in cash that does not reduce the amount
of insurance provided under the Policy;
b. The right to designate and change any Beneficiary under
the Policy; and
c. The right to elect any optional mode of settlement
permitted by the Policy or allowed by the Insurer.
4. Assignee's Covenants. The Assignee covenants and agrees
as follows:
a. That any sum received by the Assignee from the Insurer
which remains after payment of the Liabilities shall
be remitted by the Assignee to the persons entitled to
such amount under the terms of the Policy and the
Liability Agreements, determined as if this assignment
not been executed.
b. That the Assignee will not exercise the specific right
set forth in paragraph 2b hereof until the earlier of
(1) a default with respect to the payment of the
Liabilities, or (2) the failure by the Assignor to pay
any premium when due. In the event the Assignee
intends to exercise such specific right, the Assignee
shall provide to the Assignor a cure period of not
less than 20 days. Notice of such cure period shall be
provided, in writing, in accordance with the notice
provisions of the Plan.
c. That the Assignee will, upon written request, forward
to the Insurer the Policy for endorsement with respect
to any beneficiary designation or election of an
optional mode of settlement.
5. Insurer's Reliance. The Insurer shall be entitled to rely
upon the Assignee's instructions, without independent investigation, including
instructions related to the determination of any Liability hereunder or the
existence of a default under the terms of this assignment or the Liability
Agreements. The signature of a duly authorized officer of the Assignee shall be
sufficient to exercise the powers and rights granted to the Assignee under the
terms of this assignment and the Liability Agreements.
Distributions hereunder shall be made payable to the exclusive
order of the Assignee in such amounts and at such times as may be requested by
the Assignee. Receipt by the Assignee of any amount payable hereunder shall
operate to discharge and release the Insurer with respect to such amount.
6. Premium Obligations. Except as otherwise expressly provided
in the Liability Agreements, the Assignee shall be under no obligation to pay
any premium, or the principal of or interest on any loans or advances with
respect to the Policy, whether or not obtained by the Assignee, or any other
charges with respect to the Policy. The payment of any such amount by the
Assignee (other than any such payment for which the Assignee has been
reimbursed) shall constitute a part of the Liabilities secured hereby.
7. Exercise of Assignee's Rights. Except as provided in
paragraph 4 hereof, the Assignee may exercise any right, option, privilege or
power granted hereunder, without notice to or the consent of any person. Failure
to exercise any right, option, privilege or power hereunder shall not constitute
a waiver with respect to the exercise of any other right, option, privilege or
power granted to the Assignee hereunder.
8. Release of Collateral. The Assignee may take or release
other security, may release any party primarily or secondarily liable for any of
the Liabilities, may grant extensions, renewals or indulgences with respect to
the Liabilities, or may apply to the Liabilities in such order as the Assignee
shall determine, the proceeds of the Policy hereby assigned or any amount
received on account of the Policy by the exercise of any right permitted under
this assignment, without resorting or regard to other security.
9. Governing Documents. In the event of any conflict between
the provisions of this assignment and provision of the Liability Agreement with
respect to the Policy or rights of collateral security therein, the provisions
of this assignment shall prevail.
10. Assignee's Warrant. The Assignee declares that no
proceedings in bankruptcy are pending against him and that his property is not
subject to any assignment for the benefit of creditors.
11. Governing Law. This assignment and all rights hereunder
are governed by the laws of the State of Louisiana, to the extent not superseded
by federal law.
THIS COLLATERAL ASSIGNMENT is executed as of the dates set
forth below in multiple counterparts, each of which shall be deemed an original,
to be deemed effective contemporaneous with the issuance of the Policy described
herein.
ASSIGNOR: ASSIGNEE, HIBERNIA CORPORATION
By:
Date: Its:
Date:
<PAGE>
EXHIBIT 10.41
HIBERNIA CORPORATION
DEFERRED COMPENSATION PLAN
FOR
KEY MANAGEMENT EMPLOYEES
TABLE OF CONTENTS
Page
ARTICLE 1 - ESTABLISHMENT AND PURPOSE............................... 1
ARTICLE 2 - DEFINITIONS............................................. 1
ARTICLE 3 - ELIGIBILITY AND PARTICIPATION........................... 4
Eligibility................................................ 4
Participation.............................................. 4
Deferral Election Procedures............................... 4
Crediting Deferral Amounts................................. 5
Crediting Matching Credits................................. 5
Status of Accounts......................................... 5
Adjustments to Accounts.................................... 6
ARTICLE 4 - TERMINATION OF EMPLOYMENT ON OR AFTER AGE 55............ 6
Eligibility................................................ 6
Payment Election........................................... 6
Single-sum Payments........................................ 7
Installment Payments....................................... 7
Death After Commencement of Installment Payments........... 8
ARTICLE 5 - DEATH; TERMINATION OF EMPLOYMENT BEFORE AGE 55.......... 8
Death Before Termination of Employment..................... 8
Termination of Employment Before Age 55.................... 8
Timing..................................................... 8
ARTICLE 6 - PAYMENT BEFORE TERMINATION OF EMPLOYMENT................ 8
Notice of Termination By Participant....................... 8
Hardship Withdrawal........................................ 9
Early Payments............................................. 9
ARTICLE 7 - ADMINISTRATION.......................................... 10
Committee.................................................. 10
Beneficiary Designation.................................... 11
ARTICLE 8 - AMENDMENT AND TERMINATION............................... 11
Right to Amend or Terminate Plan........................... 11
Notice..................................................... 11
ARTICLE 9 - GENERAL PROVISIONS...................................... 11
No Right to Continued Employment........................... 11
Facility of Payment........................................ 11
Nonalienation.............................................. 12
No Trust or Funding Created................................ 12
Withholding................................................ 12
Claims for Benefits........................................ 13
Binding Effect............................................. 13
Notices.................................................... 13
Merger or Consolidation.................................... 13
Entire Plan................................................ 14
Governing Law.............................................. 14
<PAGE>
HIBERNIA CORPORATION
DEFERRED COMPENSATION PLAN
FOR
KEY MANAGEMENT EMPLOYEES
ARTICLE 1 - ESTABLISHMENT AND PURPOSE
This plan was authorized and adopted by the Executive Compensation
Committee of the Board of Directors of Hibernia Corporation on January 22, 1996,
and is intended to provide benefits to a designated group of key management or
highly compensated employees of Hibernia Corporation, Hibernia National Bank,
and affiliates thereof and shall be known as the "Deferred Compensation Plan for
Key Management Employees" (the "Plan"). This Plan is intended to be an unfunded
deferred compensation arrangement within the meaning of the Employee Retirement
Income Security Act of 1974, as amended ("ERISA"). As such, this Plan is not
intended to constitute an employee benefit plan which is subject to Parts 2, 3
and 4 of Title I of ERISA. In accordance with such intent, employees who
participate hereunder will be unsecured general creditors of the Company as to
the benefits provided under the Plan.
ARTICLE 2 - DEFINITIONS
The following words and phrases as used in the Plan have the following
meanings:
2.1 Adjustment Date: Each date on which any amount is credited to a
Participant's Deferral Account or Matching Account pursuant to Article 3 of this
Plan and such other dates as may be designated, from time to time, by the
Committee.
2.2 Annual Bonus: A Participant's annual bonus under such bonus plans,
programs or arrangements maintained by the Company (or an affiliate thereof) as
may be designated as eligible for deferral hereunder by the Committee. Except as
to the first Plan Year hereunder, any such designation shall be made prior to
the first day of the period with respect to which any such bonus is payable.
2.3 Bank: Hibernia National Bank, a financial institution with its
principal place of business in New Orleans, Louisiana.
2.4 Base Compensation: A Participant's annual rate of regular base
salary on January 1st of each year, excluding bonuses and other similar forms of
compensation and determined before any deductions or deferrals, including,
without limitation, deferrals under this Plan and deferrals under the RSP.
2.5 Beneficiary: The person, persons, entity or entities designated by
a Participant pursuant to Article 7 to receive the benefits, if any, payable
after the death of such Participant, or, if there has been no such designation
or such designation is invalid, determined in accordance with paragraph 7.2(b)
hereof.
2.6 Change in Control: Change in Control means that:
a. Any "person" including any "group," determined in accordance
with paragraph 13(d)(3) of the Securities Exchange Act of
1934, as amended, becomes the beneficial owner, directly or
indirectly, of securities of the Company representing 20% or
more of the combined voting power of the Company's then
outstanding securities, without the approval, recommendation,
or support of the Board of Directors of the Company as
constituted immediately prior to such acquisition;
b. The Federal Deposit Insurance Corporation or any other
regulatory agency negotiates and implements a plan for the
merger, transfer of assets and liabilities, reorganization,
and/or liquidation of the Bank;
c. Either of the Company or the Bank is merged into another
corporate entity or consolidated with one or more
corporations, other than a wholly-owned subsidiary of the
Company;
d. A change in the members of the Board of Directors of the
Company which results in the exclusion of a majority of the
"continuing board." For this purpose, the term "continuing
board" means the members of the Board of Directors of the
Company, determined as of the date on which this Plan is
executed, and subsequent members of such board who are elected
by or on the recommendation of a majority of such "continuing
board"; or
e. The sale or other disposition of all or substantially all of
the stock or the assets of the Bank or the Company (or any
successor corporation thereto).
The Committee shall determine whether a Change in Control has occurred under
this paragraph 2.6.
2.7 Committee: The Committee provided for in Article 7 which is
responsible for administering this Plan.
2.8 Company: Hibernia Corporation, a corporation organized and existing
under the laws of the State of Louisiana, and any entity which succeeds to its
rights and obligations with respect to the Plan.
2.9 Competitive Business: Any incorporated or unincorporated entity
that accepts deposits or makes loans from one or more offices located in the
State of Louisiana.
2.10 Deferral Account: The separate bookkeeping account kept to record
amounts deferred hereunder and interest accrued on such amounts, determined as
of each Adjustment Date.
2.11 Deferral Election(s): A Participant's written election, made in
accordance with paragraph 3.3 and in such form as specified by the Committee, to
forego the receipt of a stipulated whole percent of Base Compensation and/or a
stipulated whole percent of an Annual Bonus, subject to such limitations as may
be imposed, from time to time, by the Committee.
2.12 Effective Date: The date the provisions of this Plan become
effective, which is July 1, 1996.
2.13. Eligible Employee: An Employee selected for participation in the
Plan in accordance with paragraph 3.1.
2.14 Employee: An individual who is employed by the Company, the Bank
or any subsidiary or affiliate of the Company.
2.15 Interest: With respect to each Adjustment Date, the dollar amount
of interest to be credited to the Participant's Deferral Account as provided in
Article 3. The annual compounded interest rate applicable to any Plan Year shall
be the Corporate Bond Survey Average Rate published by Moody's during October of
the immediately preceding year, plus 1%. Prior to the end of each Plan Year, the
Committee shall notify each Participant of the annual compounded interest rate
applicable with respect to the next Plan Year.
2.16 Matching Account: The separate bookkeeping account kept to record
amounts credited to a Participant in accordance with paragraph 3.4 and Interest
accrued on such amounts, determined as of each Adjustment Date. The vested
percentage of a Participant's Matching Account under this Plan shall be the same
as the vested percentage of the Participant's Matching Contribution Account
under the RSP.
2.17 Participant: As of any date, any individual who commenced
participation in the Plan as provided in Article 3 and who is either (a) an
Employee or (b) a former Employee who is eligible for a benefit under the Plan.
2.18 Plan: This Deferred Compensation Plan for Key Management Employees
of the Company, the Bank, or any affiliate thereof, as contained herein and as
it may be amended from time to time in accordance with Article 8.
2.19 Plan Year: The calendar year; provided, however, that the first
Plan Year shall be a six-month period beginning July 1, 1996, and ending as of
December 31, 1996.
2.20 RSP: The Retirement Security Plan of Hibernia Corporation, as
amended from time to time.
2.21 Termination of Employment: The date on which a Participant ceases
to perform services for the Company, the Bank or an affiliate thereof, whether
as a common-law employee, independent contractor or otherwise.
2.22 Unforeseeable Emergency: A severe financial hardship to the
Participant resulting from a sudden and unexpected illness, accident or
disability of the Participant or of a dependent of the Participant, loss of the
Participant's property due to casualty, or other similar extraordinary and
unforeseeable circumstances arising as a result of events beyond the control of
the Participant. The determination of whether a Participant has an Unforeseeable
Emergency shall be made by the Committee in the exercise of its sole and
absolute discretion upon application by the Participant and submission by the
Participant of such evidence of Unforeseeable Emergency as may be requested by
the Committee.
2.23 Vested Account(s): The sum of a Participant's Deferral Account and
the vested portion of the Participant's Matching Account, as the same may be
determined from time to time.
ARTICLE 3 - ELIGIBILITY AND PARTICIPATION
3.1 Eligibility. The Committee shall have the sole discretion to
designate Employees for participation in the Plan. The Committee shall notify
those Employees designated for participation of the benefits available under the
Plan and the terms and conditions of the Plan. Any such designation shall be
conclusive and binding upon all persons (and need not be uniform as between
groups or categories of Employees.
3.2 Participation. An Eligible Employee shall become a Participant when
designated by the Committee. A Participant shall continue his or her
participation until the date he or she is no longer entitled to a benefit under
this Plan.
3.3 Deferral Election Procedures. The following rules shall apply to
Deferral Elections hereunder:
a. A Participant shall have until December 31st of each year (or
such other date as may be designated by the Committee) to
execute and deliver to the Committee a Deferral Election
providing for the deferral of Base Compensation that would
otherwise be payable to such Participant during the
immediately following Plan Year.
b. A Participant shall have until September 30th of each Plan
Year (or such other date as may be designated by the
Committee) to execute and deliver to the Committee a Deferral
Election providing for the deferral of all or a portion of
such Participant's Annual Bonus, if any, payable with respect
to services rendered in such year.
c. For the first Plan Year, each Participant shall have no more
than 30 days following the Effective Date to execute and
deliver to the Committee a Deferral Election providing for the
deferral of Base Compensation to be earned during the
remainder of such year. payable to such Participant.
d. When an Eligible Employee first becomes a Participant
hereunder, such Eligible Employee shall have 30 days following
the date of eligibility to execute and deliver to the
Committee a Deferral Election providing for the deferral of
Base Compensation to be earned during the remainder of the
Plan Year.
e. In no event shall an election to defer all or any portion of a
Participant's Annual Bonus be made after September 30th of the
Plan Year immediately preceding the year in which such Annual
Bonus is actually paid.
f. The Committee, in its sole discretion may, from time to time,
limit the amount of Base Compensation and/or any Annual Bonus
subject to deferral hereunder.
3.4 Crediting Deferral Amounts. A Participant's deferral of Base
Compensation shall be credited to the Participant's Deferral Account as of the
date or dates on which such Base Compensation would otherwise be payable to the
Participant; provided, however, that such amount shall not be credited following
the Participant's Termination of Employment. A Participant's deferral with
respect to an Annual Bonus shall be credited to the Participant as of the date
on which such Annual Bonus would otherwise be payable to the Participant.
3.5 Crediting Matching Credits. As of the last day of each Plan Year
for which a Participant is entitled to a matching contribution under the RSP,
there shall be credited to the Participant's Matching Account under this Plan an
amount equal to the difference between:
a. The maximum matching contribution percentage available under
the RSP for such Plan Year (or, if less, the sum of the
Participant's Deferral Election percentage under this Plan and
the Participant's Deferral Election percentage determined
under the RSP), multiplied by the sum of (i) the Participant's
Base Compensation for such calendar year and (ii) the Annual
Bonus payable to the Participant in such calendar year
(whether actually paid or deferred pursuant to this Plan); and
b. The contributions credited to the Participant's Matching
Contributions Account under the RSP for such Plan Year;
provided, however, that for the year of the Participant's Termination of
Employment, the amount credited to the Participant's Matching Account shall be
prorated based on the number of full calendar months during which the
Participant was employed. The Committee may, from time to time, in its sole and
absolute discretion, credit additional amounts to the Matching Account of each
Participant. The basis on which any such additional amounts shall be credited
shall be determined by the Committee, and such credits need not be uniform among
all Participants.
3.6 Status of Accounts: A Deferral Account or Matching Account
established in accordance with the terms of this Plan shall be a bookkeeping
entry only. The establishment and maintenance of any such account in accordance
with the terms of this Plan shall not be deemed to constitute a trust or create
any other form of fiduciary relationship between the Employer and any
Participant or Beneficiary or otherwise create, for the benefit of any
Participant or Beneficiary, an ownership interest or expectancy in any asset of
the Employer.
3.7 Adjustments to Accounts. As of each Adjustment Date, a
Participant's Accounts shall be adjusted as follows:
a. There shall be credited to the Participant's Deferral Account
the amount of all deferrals, if any, since the last Adjustment
Date.
b. There shall be credited to the Participant's Matching Account
all matching credits determined in accordance with paragraph
3.4 hereof, if any, since the last Adjustment Date.
c. Interest shall be credited to the Participant's Deferral and
Matching Accounts for the period since the last Adjustment
Date. Interest shall be credited at a rate that, when
compounded, will equal the annual compounded interest rate
determined in accordance with paragraph 2.4 hereof.
ARTICLE 4 - TERMINATION OF EMPLOYMENT ON OR AFTER AGE 55
4.1 Eligibility. A Participant whose Termination of Employment occurs
on or after the Participant's attainment of age 55 for any reason, other than
death, shall be entitled to have his or her Vested Account paid in accordance
with this Article 4 (an "Eligible Participant").
4.2 Payment Election.
a. An Eligible Participant may elect to receive his or her
benefits in the form of (i) a single-sum payment, or (ii)
payment in substantially equal annual installments over a
period not in excess of 20 years.
b. An Eligible Participant shall be entitled to designate a
payment date which shall be the later of the first day of any
Plan Year after such Participant's Termination of Employment
or the first day of the Plan Year following the attainment of
the age designated by the Participant in his or her payment
election (which shall be between age 55 and 65).
c. A Participant shall make an initial payment election upon his
or her commencement of participation in this Plan (an "Initial
Election"). Thereafter, such Participant shall have the right
to change such election from time to time; provided, however,
that any modification of an Initial Election shall be
effective only if received and accepted by the Committee at
least three consecutive calendar years prior to the date of
the Participant's Termination of Employment.
d. If there is no payment election in effect upon an Eligible
Participant's Termination of Employment on or after age 55 or
such Participant's payment election cannot be administered by
the Committee, then the Company shall make a single-sum
payment of the Participant's Vested Account not later than 60
days after the end of the Plan Year in which the Participant's
Termination of Employment occurs.
4.3 Single-sum Payments. Any single-sum payment under this Article 4
shall be in an amount equal to the Eligible Participant's Vested Account as of
the Adjustment Date coinciding with or immediately preceding the date of
payment.
4.4 Installment Payments.
a. Annual installment payments made in accordance with a payment
election under paragraph 4.2 hereof shall be made annually on
or before the last business day of January, beginning in the
year specified by the Eligible Participant.
b. Each annual installment shall be equal to the Participant's
Vested Account as of the last day of the immediately preceding
Plan Year multiplied by a fraction, the numerator of which is
one and the denominator of which is the number of annual
installments remaining to be paid pursuant to the payment
election.
c. Interest shall be credited to the Participant's Vested Account
during the period in which such installments are paid.
d. Notwithstanding an effective installment payment election
pursuant to paragraph 4.2, if following a Participant's
Termination of Employment, the Committee determines that a
Participant has engaged in (as an employee, consultant,
independent contractor, owner, manager, partner, shareholder,
director, officer, joint venturer, investor or otherwise) or
otherwise renders assistance to any Competitive Business, then
the Committee shall pay the balance of the Participant's
Vested Account in a single-sum payment within 30 days of such
determination, and any such payment will be in full and final
satisfaction of all of the Company's obligations to the
Participant hereunder.
e. Notwithstanding an effective installment payment election
pursuant to paragraph 4.2 hereof, if an Eligible Participant
experiences an Unforeseeable Emergency and requests a hardship
withdrawal during the installment pay-out period, the
Committee shall determine whether an Unforeseeable Emergency
exists and direct the Company to make payment in accordance
with paragraph 6.2 hereof.
4.5 Death After Commencement of Installment Payments. If an Eligible
Participant dies after beginning to receive installment payments in accordance
with this Article 4, then the Participant's Beneficiary shall continue to
receive such installment payments in accordance with the term designated by the
Participant.
ARTICLE 5 - DEATH; TERMINATION OF EMPLOYMENT BEFORE AGE 55
5.1 Death Before Benefits Commence. The Vested Account of a Participant
who dies before the distribution of his or her benefits commences (whether
before or after age 55) shall be paid to the Participant's Beneficiary in a
single-sum, in lieu of any other benefit under this Plan.
5.2 Termination of Employment Before Age 55. The Vested Account of a
Participant whose Termination of Employment occurs prior to his or her
attainment of age 55 for any reason other than death shall be paid to the
Participant in a single-sum.
5.3 Timing and Amount. All single-sum payments under this Article 5
shall be made not later than 60 days after the close of the Plan Year in which
the Participant's Termination of Employment or date of death occurs, as the case
may be. The amount of any such payment shall equal the Participant's Vested
Accounts determined as of the Adjustment Date coinciding with or immediately
preceding the Participant's date of death, reduced by the principal amount of
any withdrawal made since such date.
ARTICLE 6 - PAYMENT BEFORE TERMINATION OF EMPLOYMENT
6.1 Notice of Termination By Participant. The Committee shall promptly
notify each Participant, in writing, of (a) the occurrence of a Change in
Control, (b) a substantial reduction in the Interest credited under the Plan, or
(c) a material diminution in the rating of the Company. For this purpose, the
Committee shall determine whether a material diminution in the rating of the
Company has occurred, taking into account the published ratings of Moody's
Investors Services, Inc. and/or Standard & Poor's Corp.
During the 30-day period following receipt of such notice, each
Participant may elect to terminate his or her participation in the Plan by
giving written notice of termination to the Committee. Within 30 days after
receipt of such notice of termination, the Company shall make a single-sum
payment to the Participant in an amount equal to 90% of the Participant's Vested
Accounts on the Adjustment Date immediately preceding receipt by the Committee
of such Participant's written notice of termination hereunder, reduced by any
distribution or withdrawal since such date. The remaining balance of such
Participant's Vested Accounts shall be forfeited, and the Participant shall not
be eligible to again resume participation hereunder.
6.2 Hardship Withdrawal. If a Participant experiences an Unforeseeable
Emergency, such Participant may request the Committee to approve the withdrawal
of all or a portion of his Vested Accounts in the form of an immediate
single-sum payment, subject to the limitations set forth in this paragraph 6.2.
a. A request for withdrawal shall be made in writing and shall
set forth the circumstances surrounding the Unforeseeable
Emergency. As part of such request, the Participant shall
provide to the Committee his or her written representation
that (i) the emergency cannot be relieved by insurance or
other reimbursement reasonably available to the Participant,
(ii) the emergency can only be relieved by liquidation of the
Participant's assets (other than liquid assets) and any such
liquidation would itself result in severe damage or injury to
the Participant, and (iii) the Participant has no reasonable
borrowing capacity to relieve the emergency. The Committee
shall be entitled to request such additional information as
may be reasonably required to determine whether an
Unforeseeable Emergency exists and the amount of the emergency
and to establish additional conditions precedent to the review
or granting of a request for a withdrawal on account of an
Unforeseeable Emergency.
b. If the Committee determines that an Unforeseeable Emergency
exists, the Committee may authorize the immediate distribution
of an amount required to meet the financial need created by
such emergency, including any taxes payable on account of such
distribution.
c. Notwithstanding any provision of this Plan to the contrary,
the principal amount of a withdrawal on account of an
Unforeseeable Emergency shall reduce the amount credited to a
Participant's Vested Accounts. Such reduction shall be made
pro rata from each such account.
d. The Committee shall require, as a condition of any withdrawal
on account of an Unforeseeable Emergency, the termination of
any outstanding deferral election as to any Base Compensation
or Annual Bonus and in no event shall the affected Participant
be entitled to commence a new deferral election until the
January 1st immediately following the year in which such
cessation of deferrals occurs.
6.3 Early Payments. Notwithstanding any provision of this Plan to the
contrary, the Committee may distribute (or cause to be distributed) to any
Participant (or Beneficiary) in the form of an immediate single-sum payment all
or any portion of the amount then credited to a Participant's affected Deferral
Account or Matching Account, as the case may be, if an adverse determination is
made with respect to such Participant. For this purpose, the term "adverse
determination" shall mean that, based upon Federal tax or revenue law, a
published or private ruling or similar announcement issued by the Internal
Revenue Service, a regulation issued by the Secretary of the Treasury, a
decision by a court of competent jurisdiction, a closing agreement made under
Code Section 7121 that is approved by the Internal Revenue Service and involves
such Participant or a determination of counsel, a Participant has or will
recognize income for Federal income tax purposes with respect to any amount that
is or will be payable under this Plan before it is otherwise to be paid
hereunder.
Further, notwithstanding any provision of this Plan to the contrary,
the Committee may distribute (or cause to be distributed) to any Participant in
the form of an immediate single-sum payment all or any portion of the amount
then credited to a Participant's affected Deferral Account or Matching Account
as the case may be, based upon a change in ERISA, a published advisory opinion
or similar announcement issued by the Department of Labor, a regulation issued
by the Secretary of Labor, a decision by a court of competent jurisdiction, an
agreement between such Participant and the Department of Labor or similar agency
or an opinion of counsel, such Participant is not a "management" or "highly
compensated" Employee or this Plan is not an "unfunded" plan within the meaning
of ERISA.
ARTICLE 7 - ADMINISTRATION
7.1 Committee. The Committee shall be the Executive Compensation
Committee of the Company's Board of Directors. The Committee shall have general
responsibility for administration of this Plan (including but not limited to
complying with reporting and disclosure requirements, and establishing and
maintaining Plan records). In the exercise of its sole and absolute discretion,
the Committee shall interpret and construe the Plan's provisions, eliminate and
ambiguity or supply missing provisions, procedures or rules, determine the
eligibility of any person for a benefit hereunder, and determine the amount of
any such benefit.
Any determination by the Committee need not be uniform as to all or any
Participant hereunder. Any such determination shall be conclusive and binding on
all persons. The Committee shall engage the services of such independent
actuaries, accountants, attorneys and other administrative personnel as it deems
necessary to administer the Plan.
The Committee shall have the power and authority to determine the time
and amount of any distribution or withdrawal hereunder. The Committee shall
direct the Company as to any such distribution or withdrawal. Any withdrawal on
account of an Unforeseeable Emergency or early payment shall be deemed to
constitute an advance against the affected Participant's benefits hereunder.
The Committee, in its sole discretion, may delegate such duties and
powers granted hereunder to officers or Employees of the Company (or an
affiliate thereof) as the Committee deems appropriate; provided, however, that
the right to amend this Plan shall be delegated only as to ministerial or
administrative matters and that the right to terminate this Plan shall not be
delegated. When acting in accordance with such delegation (whether made orally
or in writing) the Committee's designee shall be deemed to possess the power and
authority granted to the Committee hereunder.
7.2 Beneficiary Designation. Each Participant shall file with the
Committee a written designation, in such form as may be specified by the
Committee, of one or more persons as the Beneficiary who shall be entitled to
receive the benefits, if any, payable under the Plan after the Participant's
death. A Participant may, from time to time, revoke or change such Beneficiary
designation without the consent of any designated Beneficiary by filing a new
designation with the Committee. The last such designation actually received by
the Committee shall be controlling. All decisions of the Committee concerning
the effectiveness of any Beneficiary designation, and the identity of any
Beneficiary, shall be final.
If no designation is in effect at the time of a Participant's death,
the benefits, if any, payable under this Plan after the Participant's death
shall be made in accordance with the provisions of the RSP, including any
beneficiary designation completed by the Participant under that Plan.
ARTICLE 8 - AMENDMENT AND TERMINATION
8.1 Right to Amend or Terminate Plan. Subject to the provisions of this
paragraph 8.1, the Board of Directors of the Company reserves the right at any
time to amend or terminate the Plan, in whole or in part, without the consent of
any Participant or Beneficiary. Such right shall be exercisable by the board or
by the Committee.
In no event, however, shall an amendment or termination of the Plan
reduce the amount allocated to a Participant's Deferral or Matching Account
determined as of the Adjustment Date which coincides with or immediately
precedes such amendment or termination. The foregoing limitation shall not
prevent the Company from discharging its obligations hereunder by providing for
an immediate single-sum payout of each Participant's Vested Accounts,
notwithstanding the terms of any payment election then in effect or the
forfeiture of any nonvested amount.
8.2 Notice. Written notice of any termination or material amendment of
the Plan shall be given to each Participant.
ARTICLE 9 - GENERAL PROVISIONS
9.1 No Right to Continued Employment. Nothing contained in the Plan
shall give any Participant the right to be retained as an Employee of the
Company, the Bank or any subsidiary or affiliate of the Company or the Bank or
interfere with or restrict the right of the Company or any subsidiary or
affiliate to terminate the employment of a Participant for any reason or no
reason.
9.2 Facility of Payment. If the Committee shall find that any person to
whom any amount is payable under the Plan is unable to care for such person's
affairs because of illness or accident, or is a minor, or has died, then any
payment due such person or such person's estate (unless a prior claim therefor
has been made by a duly appointed legal representative) may, if the Committee so
elects, be paid to such person's spouse, a child, a relative, an institution
maintaining or having custody of such person, or any other person deemed by the
Committee to be a proper recipient on behalf of such person otherwise entitled
to payment. Any such payment shall be a complete discharge of the liability of
the Plan and the Company therefor.
9.3 Nonalienation. No interest, expectancy, benefit, payment, claim or
right of any Participant or Beneficiary under the Plan shall be (a) subject in
any manner to any claims of any creditor of the Participant or Beneficiary, (b)
subject to the debts, contracts, liabilities or torts of the Participant or
Beneficiary, or (c) subject to alienation by anticipation, sale, transfer,
assignment, bankruptcy, pledge, attachment, charge or encumbrance of any kind.
If any person shall attempt to take any action contrary to this paragraph, such
action shall be null and void and of no effect, and the Committee and the
Company shall disregard such action and shall not in any manner be bound thereby
and shall suffer no liability on account of its disregard thereof. If any
Participant or Beneficiary hereunder shall become bankrupt or attempt to
anticipate, alienate, sell, assign, pledge, encumber or charge any right
hereunder, then such right or benefit shall, in the discretion of the Committee,
cease and terminate, and in such event the Committee may hold or apply the same
or any part thereof for the benefit of the Participant or Beneficiary or the
spouse, children, or other dependents of the Participant or Beneficiary, or any
of them, in such manner and in such amounts and proportions as the Committee may
deem proper.
9.4 No Trust or Funding Created. The obligations of the Company to make
payments hereunder shall constitute a liability of the Company to a Participant
or Beneficiary, as the case may be. Such payments shall be made from the general
assets of the Company, and the Company shall not be required to establish or
maintain any special or separate fund, purchase or acquire life insurance on a
Participant's life, or otherwise to segregate assets to ensure that such payment
shall be made, and neither a Participant nor any Beneficiary shall have any
interest in any particular asset of the Company by reason of its obligations
hereunder. Nothing contained in the Plan shall create or be construed as
creating a trust of any kind or any other fiduciary relationship between the
Company (or any subsidiary or affiliate of the Company) and a Participant or any
other person. The rights and claims of a Participant or a Beneficiary to a
benefit provided hereunder shall have no greater or higher status than the
rights and claims of any other general, unsecured creditor.
Notwithstanding the foregoing provisions of this paragraph 9.4, the
Company, in its discretion, may establish a "rabbi trust" or similar arrangement
to provide a source of funds to meet its obligations under the Plan, but only if
the establishment of such trust or other arrangement does not affect the status
of the Plan as an unfunded plan maintained for the purpose of providing deferred
compensation for a select group of management or highly compensated employees
for purposes of ERISA.
9.5 Withholding. Notwithstanding any other term or provision of this
Plan, there shall be deducted from the payments provided for herein such amounts
as may be necessary to discharge the withholding obligations of the Company or
any of its subsidiaries or affiliates with respect to any taxes, assessments or
other governmental charges imposed on such payments. In addition, certain
employment taxes may become payable by a Participant with respect to Plan
benefits prior to the date on which payments are made under the Plan, and the
Company and its subsidiaries and affiliates shall have the right to withhold
such employment taxes from other amounts payable to the Participant.
9.6 Claims for Benefits. Each Participant or Beneficiary claiming any
right under this Plan must give written notification thereof to the Committee.
If a claim is denied, the denial shall be contained in a written notice stating
the following:
a. The specific reason for the denial;
b. Specific reference to the Plan provision on which the denial
is based;
c. Description of additional information necessary for the
claimant to present his or her claim, if any, and an
explanation of why such material is necessary; and
d. An explanation of the Plan's claims review procedure.
The claimant will have 60 days to request a review of any denial by the
Committee. The request for review must be in writing and delivered to the
Committee, which will then provide a full and fair review. The claimant may
review pertinent documents and may submit issues and comments in writing. The
decision by the Committee with respect to the review must be given within 60
days after receipt of the request, unless special circumstances require an
extension (such as for a hearing). In no event shall the decision be delayed
beyond 120 days after receipt of the request for review. The decision shall
include specific reasons and refer to the specific Plan provisions on which it
is based.
9.7 Binding Effect. Obligations incurred by the Company pursuant to
this Plan shall be binding upon and inure to the benefit of the Company, its
successors and assigns, and the Participant and the Participant's Beneficiary.
9.8 Notices. Any notices required or permitted to be given to the
Committee under this Plan shall be deemed received when delivered personally or
mailed by United States mail, postage prepaid, to the following address:
Hibernia Corporation, C/O Thomas P. King, P. O. Box 61540, New Orleans,
Louisiana 70161. Any notice required or permitted to be given to a Participant
under this Plan shall be deemed received when delivered personally or mailed, by
United States mail, postage prepaid, to the Participant's address as last shown
in the personnel records of the Company.
9.9 Merger or Consolidation. In the event of a merger or a
consolidation by the Company with another corporation, or the acquisition of
substantially all of the assets or outstanding stock of the Company by another
corporation, then and in such event the obligations and responsibilities of the
Company under this Plan shall be assumed by any such successor or acquiring
corporation, and all of the rights, privileges and benefits of the Participants
and Beneficiaries hereunder shall continue.
9.10 Entire Plan. This document, any formal written amendment hereto
and the elections required herein constitute the entire agreement among the
Participants, the Company and the Bank concerning the compensation deferrals
described herein. Such documents contain all the terms and provisions of the
Plan and shall constitute the entire Plan, and any other alleged terms or
provisions, whether oral or written, shall be of no effect.
9.11 Governing Law. The validity of this Plan, the construction of its
terms and the determination of the rights and duties of the parties hereto shall
be governed by and construed in accordance with federal laws and regulations and
the internal laws of the State of Louisiana applicable to contracts made and to
be performed wholly within such state.
THIS PLAN was adopted on January 22, 1996, and executed this ____ day
of December, 1996, and shall be executed in multiple counterparts, each of which
shall be deemed an original, to be effective as of the date set forth above.
HIBERNIA CORPORATION
By:
Its:
<PAGE>
HIBERNIA CORPORATION
DEFERRED COMPENSATION PLAN
FOR KEY MANAGEMENT EMPLOYEES
PAYMENT ELECTION
I acknowledge that I am a participant in the DEFERRED COMPENSATION PLAN
FOR KEY MANAGEMENT EMPLOYEES (the "Plan"). I agree to be bound by the terms and
conditions of the Plan, all of which are incorporated in this Payment Election
by this reference, and I make the following elections concerning the payment of
my benefits from the Plan:
I. STATUS OF ELECTION. This election is:
- My initial Payment Election.
- A modification of a prior Payment Election.
II. FORM OF BENEFIT PAYMENT. I hereby elect to have my benefits
paid in the form of (select one), provided I am an Eligible Participant (as
defined in the Plan) at the time payment commences:
- A single-sum payment.
- Substantially equal annual installments payable over ___ (not
more than 20) consecutive calendar years.
III. BENEFIT PAYMENT DATE. I elect to have my benefits paid (or
payments commence) as of the first day of the Plan Year following the later of
my Termination of Employment (as defined in the Plan) or the date I attain age
_____ (between age 55 and 65), provided I am an Eligible Participant at the time
of payment.
IV. LIMITATIONS. I understand that I can modify this election by
delivery of a new election form to the Committee. I acknowledge that any
modification will be effective only if it is delivered to and accepted by the
Committee at least three calendar years prior to my Termination of Employment.
If any modification is ineffective, I understand that benefits will be paid in
accordance with my immediately preceding Payment Election or, if no election has
been accepted by the Committee, the default provisions of the Plan.
V. EXECUTION AND ACCEPTANCE. By execution of this election, I agree to
be bound by the terms and conditions of the Plan. I acknowledge that I have been
given the opportunity to obtain a copy of the Plan from the Committee. This
Payment Election has been executed this _____ day of ____________________,
199__.
Participant
ACCEPTED by an authorized representative of the Committee as of this
_____ day of ________________________, 19___.
Authorized Representative of Committee
<PAGE>
EXHIBIT 10.42
HIBERNIA CORPORATION
SUPPLEMENTAL STOCK COMPENSATION PLAN
FOR
KEY MANAGEMENT EMPLOYEES
TABLE OF CONTENTS
Page
ARTICLE 1 - ESTABLISHMENT AND PURPOSE........................... 1
ARTICLE 2 - DEFINITIONS......................................... 1
ARTICLE 3 - ELIGIBILITY AND PARTICIPATION....................... 4
ARTICLE 4 - ACCOUNTS............................................ 4
Account................................................ 4
Credits................................................ 4
Status of Account...................................... 5
ARTICLE 5 - TERMINATION OF EMPLOYMENT AFTER AGE 55.............. 5
Eligibility............................................ 5
Payment Election....................................... 5
Single-Sum Payments.................................... 6
Installment Payments................................... 6
Death After Commencement of Installment Payments....... 6
ARTICLE 6 - DEATH; TERMINATION OF EMPLOYMENT BEFORE AGE 55...... 6
Death Before Benefit Commencement...................... 6
Termination of Employment Before Age 55................ 7
Timing and Amount...................................... 7
ARTICLE 7 - SPECIAL PAYMENTS.................................... 7
Notice of Termination By Participant................... 7
Hardship Withdrawal.................................... 7
Early Payments......................................... 8
ARTICLE 8 - ADMINISTRATION...................................... 9
Committee.............................................. 9
Beneficiary Designation................................ 9
ARTICLE 9 - AMENDMENT AND TERMINATION........................... 10
Right to Amend or Terminate Plan....................... 10
Notice................................................. 10
ARTICLE 10 - GENERAL PROVISIONS................................. 10
No Right to Continued Employment....................... 10
Changes in Common Stock................................ 10
Facility of Payment.................................... 10
Nonalienation.......................................... 10
No Trust or Funding Created............................ 11
Withholding............................................ 11
Claims for Benefits.................................... 11
Binding Effect......................................... 12
Notices................................................ 12
Merger or Consolidation................................ 12
No Shareholder Rights.................................. 12
Entire Plan............................................ 12
Governing Law.......................................... 13
<PAGE>
HIBERNIA CORPORATION
SUPPLEMENTAL STOCK COMPENSATION PLAN
FOR
KEY MANAGEMENT EMPLOYEES
ARTICLE 1 - ESTABLISHMENT AND PURPOSE
This plan was approved and adopted by the Executive Committee of
Hibernia Corporation on January 22, 1996, and was established to provide
supplemental benefits to a select group of key management employees of Hibernia
Corporation, Hibernia National Bank or affiliates thereof and shall be known as
the "Supplemental Stock Compensation Plan for Key Management Employees" (the
"Plan"). This Plan is intended to be an unfunded deferred compensation
arrangement within the meaning of the Employee Retirement Income Security Act of
1974, as amended ("ERISA"). As such, this Plan is not intended to constitute an
employee benefit plan which is subject to Parts 2, 3 and 4 of Title I of ERISA.
In accordance with such intent, employees who participate hereunder shall be
unsecured general creditors of the Company as to the benefits provided under the
Plan.
ARTICLE 2 - DEFINITIONS
The following words and phrases as used in the Plan have the following
meanings:
2.1 Account: The separate bookkeeping account maintained to record
a Participant's Share Units and Dividend Units.
2.2 Act: The Securities Exchange Act of 1934, as amended.
2.3 Adjustment Date: The date on which a Share Unit or Dividend
Unit is allocated to a Participant's Account hereunder. Share Units shall be
allocated as of the date on which contributions are allocated under the ESOP,
and Dividend Units shall be allocated hereunder as of the Company's dividend
record date.
2.4 Bank: Hibernia National Bank a financial institution with its
principal place of business in New Orleans, Louisiana.
2.5 Beneficiary: The person, persons, entity or entities
designated by a Participant pursuant to Article 8 to receive the benefits, if
any, payable after the death of such Participant. If there is no designation or
a designation is invalid, then a Participant's Beneficiary shall be determined
in accordance with the terms of the Retirement Security Plan of Hibernia
Corporation.
2.6 Change in Control: Change in Control means that:
a. Any "person" including any "group," determined in accordance
with Section 13(d)(3) of the Securities Exchange Act of 1934,
as amended, becomes the beneficial owner, directly or
indirectly, of securities of Hibernia Corporation representing
20% or more of the combined voting power of the corporation's
then outstanding securities, without the approval,
recommendation, or support of the Board of Directors of the
Hibernia Corporation as constituted immediately prior to such
acquisition;
b. The Federal Deposit Insurance Corporation or any other
regulatory agency negotiates and implements a plan for the
merger, transfer of assets and liabilities, reorganization,
and/or liquidation of Hibernia National Bank;
c. Either of Hibernia Corporation or Hibernia National Bank is
merged into another corporate entity or consolidated with one
or more corporations, other than a wholly-owned subsidiary of
Hibernia Corporation;
d. A change in the members of the Board of Directors of Hibernia
Corporation which results in the exclusion of a majority of
the "continuing board." For this purpose, the term "continuing
board" means the members of the Board of Directors of Hibernia
Corporation, determined as of the date on which this Plan is
executed, and subsequent members of such board who are elected
by or on the recommendation of a majority of such "continuing
board"; or
e. The sale or other disposition of all or substantially all of
the stock or the assets of Hibernia National Bank or Hibernia
Corporation (or any successor corporation thereto).
The Committee shall determine whether a Change in Control has occurred under
this paragraph 2.6.
2.7 Code: The Internal Revenue Code of 1986, as amended.
2.8 Committee: The Committee provided for in Article 8 which is
responsible for administering this Plan.
2.9 Common Stock: No par value common stock issued by the Company.
2.10 Company: Hibernia Corporation, a corporation organized and
existing under the laws of the State of Louisiana, and any entity which succeeds
to its rights and obligations with respect to the Plan.
2.11 Competitive Business: Any incorporated or unincorporated entity
that accepts deposits or makes loans from one or more offices located in the
State of Louisiana.
2.12 Dividend Unit: A bookkeeping entry representing the number of
shares of Common Stock obtained by dividing the fair market value of any
dividend or other distribution paid or made by the Company with respect to a
share of Common Stock (but not including a distribution in Common Stock) by the
Share Price, determined as of the applicable dividend record date. For this
purpose, "fair market value" shall be determined in good faith by the Committee.
2.13 Effective Date: The date on which the provisions of this Plan
become effective, which shall be as of January 1, 1996.
2.14 Employee: An individual who is employed by the Company, the Bank
or any subsidiary or affiliate thereof.
2.15 ESOP: Hibernia Corporation Employee Stock Ownership Plan and
Trust, as the same may be amended from time to time.
2.16 ESOP Account: The account established in each Participant's name
under the ESOP.
2.17 Participant: As of any date, an Employee designated as a
Participant hereunder or a former Employee who is eligible for a benefit under
this Plan.
2.18 Plan: This Supplemental Stock Compensation Plan for Key Management
Employees, as the same may be amended from time to time.
2.19 Plan Year: The calendar year. The first Plan Year shall be the
calendar year commencing January 1, 1996.
2.20 Qualified Plan Limitations: All limitations imposed under the Code
which may adversely affect the amount allocable to each Participant's ESOP
Account, including, but not limited to, Code Section 401(a)(17), Code Section
415, and the definition of the term "compensation." The Committee shall
determine the Qualified Plan Limitations applicable in any Plan Year; any such
determination shall be conclusive and binding on all Participants hereunder.
2.21 Share Price: The mean of the highest and lowest sales price of
Common Stock as traded on the New York Stock Exchange as of a date specified
herein. If Common Stock is not traded on any such date, Share Price shall be
determined as of the next day on which Common Stock is traded.
2.22 Share Unit: A bookkeeping entry representing one share of Common
Stock.
2.23 Termination of Employment: The date on which a Participant ceases
to provide services for the Company, the Bank or an affiliate, whether as a
common law employee, independent contractor or otherwise.
2.24 Unforeseeable Emergency: A severe financial hardship to the
Participant resulting from a sudden and unexpected illness, accident or
disability of the Participant or of a dependent of the Participant, loss of the
Participant's property due to casualty, or other similar extraordinary and
unforeseeable circumstances arising as a result of events beyond the control of
the Participant. The determination of whether a Participant has an Unforeseeable
Emergency shall be made by the Committee in the exercise of its sole and
absolute discretion upon application by the Participant and submission by the
Participant of such evidence of Unforeseeable Emergency as may be requested by
the Committee.
2.25 Units: Share Units and Dividend Units, collectively.
2.26 Valuation Date: Last day of the Plan Year and such other dates as
may be designated by the Committee.
2.27 Vested Account: The vested amount of a Participant's Account,
determined in accordance with the vesting provisions of the ESOP, from time to
time.
ARTICLE 3 - ELIGIBILITY AND PARTICIPATION
The Committee shall have the sole discretion to select Employees for
participation in the Plan. The Committee shall notify those Employees selected
for participation of the benefits available under the Plan and the terms and
conditions of the Plan. Participation determinations by the Committee shall be
conclusive and binding on all persons and need not be uniform as between groups
or categories of Employees.
ARTICLE 4 - ACCOUNTS
4.1 Account. The Committee shall cause to be established an Account for
each Participant. Each Account shall be adjusted as provided in this Article 4.
4.2 Credits. As of each Adjustment Date, each Participant's Account
shall be credited with Share Units or Dividend Units, as the case may be, as
follows:
a. There shall be credited to the Participant's Account the
number of Share Units equal to the difference between (i) the
number of shares of Common Stock that would have been
allocated to the Participant's ESOP Account if the Qualified
Plan Limitations did not apply, and (ii) the number of shares
of Common Stock actually allocated to the Participant's ESOP
Account;
b. There shall be allocated to the Participant's Account the
number of Share Units equal to (i) the difference between the
amount of any cash contribution that would have been allocated
to the Participant's ESOP Account if the Qualified Plan
Limitations did not apply and the amount of cash actually
allocated to the Participant's ESOP Account, divided by (ii)
the Share Price determined as of such Adjustment Date; and/or
c. There shall be credited to the Participant's Account one
Dividend Unit for each Share Unit then credited to the
Participant's Account.
4.3 Status of Account: Any Account established hereunder shall be a
bookkeeping entry only. The establishment and maintenance of any such Account
shall not be deemed to constitute a trust or create any other form of fiduciary
relationship between the Employer and any Participant or Beneficiary or
otherwise create, for the benefit of any Participant or Beneficiary, an
ownership interest or expectancy in any specific asset of the Employer.
ARTICLE 5 - TERMINATION OF EMPLOYMENT AFTER AGE 55
5.1 Eligibility. A Participant whose Termination of Employment occurs
on or after attainment of age 55 (for any reason other than death) shall be
entitled to have his or her Vested Account paid in accordance with this Article
5 (an "Eligible Participant").
5.2 Payment Election.
a. An Eligible Participant may elect to receive his or her
benefits in the form of (i) a single-sum payment, or (ii)
payment in substantially equal annual installments over a
period not in excess of 20 years.
b. An Eligible Participant shall be entitled to designate a
payment date which shall be the later of the first day of any
Plan Year after such Participant's Termination of Employment
or the first day of the Plan Year following the attainment of
the age designated by the Participant in his or her payment
election (which shall be between age 55 and 65).
c. A Participant shall make an initial payment election upon his
or her commencement of participation in this Plan (an "Initial
Election"). Thereafter, such Participant shall have the right
to change such election from time to time; provided, however,
that any modification of an Initial Election shall be
effective only if received and accepted by the Committee at
least three consecutive calendar years prior to the date of
the Participant's Termination of Employment.
d. If there is no payment election in effect upon an Eligible
Participant's Termination of Employment on or after age 55 or
such Participant's payment election cannot be administered by
the Committee, then the Company shall make a single-sum
payment of the Participant's Vested Account not later than 60
days after the end of the Plan Year in which the Participant's
Termination of Employment occurs.
5.3 Single-Sum Payments. Any single-sum payment under this Article 5
shall be equal to the Eligible Participant's Vested Account, determined as of
the Valuation Date immediately preceding the date of payment, reduced by the
principal amount of any distribution or withdrawal made since such date.
5.4 Installment Payments.
a. Annual installment payments made in accordance with a payment
election under paragraph 5.2 hereof shall be made annually on
or before the last business day of January, beginning in the
year specified by the Eligible Participant.
b. Each annual installment shall be equal to the Participant's
Vested Account as of the last day of the immediately preceding
Plan Year multiplied by a fraction, the numerator of which is
one and the denominator of which is the number of annual
installments remaining to be paid pursuant to the payment
election.
c. Interest shall be credited to the Participant's Vested Account
during the period in which such installments are paid.
d. Notwithstanding an effective installment payment election
pursuant to paragraph 5.2, if following a Participant's
Termination of Employment, the Committee determines that a
Participant has engaged in (as an employee, consultant,
independent contractor, owner, manager, partner, shareholder,
director, officer, joint venturer, investor or otherwise) or
otherwise renders assistance to any Competitive Business, then
the Committee shall pay the balance of the Participant's
Vested Account in a single-sum payment within 30 days of such
determination, and any such payment will be in full and final
satisfaction of all of the Company's obligations to the
Participant hereunder.
e. Notwithstanding an effective installment payment election
pursuant to paragraph 5.2 hereof, if an Eligible Participant
experiences an Unforeseeable Emergency and requests a hardship
withdrawal during the installment pay-out period, the
Committee shall determine whether an Unforeseeable Emergency
exists and direct the Company to make payment in accordance
with paragraph 7.2 hereof.
5.5 Death After Commencement of Installment Payments. If an Eligible
Participant dies after beginning to receive installment payments in accordance
with this Article 5, then the Participant's Beneficiary shall continue to
receive such installment payments in accordance with the term designated by the
Participant.
ARTICLE 6 - DEATH; TERMINATION OF EMPLOYMENT BEFORE AGE 55
6.1 Death Before Benefit Commencement. The Vested Account of a
Participant who dies before his or her benefit commence (whether before or after
age 55) shall be paid to the Participant's Beneficiary in the form of a
single-sum, in lieu of any other benefit payable under this Plan.
6.2 Termination of Employment Before Age 55. The Vested Account of a
Participant whose Termination of Employment occurs prior to his or her
attainment of age 55 shall be paid to the Participant in the form of a
single-sum, in lieu of any other benefit payable under this Plan.
6.3 Timing and Amount. All single-sum payments under this Article 6
shall be paid not later than 60 days after the last day of the Plan Year in
which the Participant's Termination of Employment or date of death, as the case
may be, occurs . The amount of such payment shall equal the Participant's Vested
Account as of the Valuation Date coinciding with or immediately preceding the
Participant's date of death, reduced by the principal amount of any distribution
or withdrawal since such date.
ARTICLE 7 - SPECIAL PAYMENTS
7.1 Notice of Termination By Participant. The Committee shall promptly
notify each Participant upon the occurrence of a Change in Control. During the
30-day period following receipt of such notice, each Participant may elect to
terminate his or her participation in the Plan by giving written notice of
termination to the Committee.
Within 30 days after receipt of such notice of termination, the Company
shall make a single-sum payment to the Participant in an amount equal to 90% of
the Participant's Vested Account, determined as of the Valuation Date coinciding
with or immediately preceding such payment reduced by the amount of any
distribution or withdrawal since such date. The remaining balance of such
Participant's Vested Account shall be forfeited, and the Participant shall not
be eligible to again resume participation hereunder.
If a Participant is subject to Section 16 of the Act at the time of an
election under this paragraph 7.1, the Committee may, to the extent required to
comply with Rule 16b-3 promulgated under the Act, postpone such Participant's
election period provided for hereunder.
7.2 Hardship Withdrawal. If a Participant experiences an Unforeseeable
Emergency, such Participant may request the Committee to approve the withdrawal
of all or a portion of his or her Vested Account in the form of an immediate
single-sum payment, subject to the limitations set forth in this paragraph 7.2.
Notwithstanding any provision of this Plan to the contrary, the Committee shall
possess the authority to determine whether an Unforeseeable Hardship exists,
whether authorize a withdrawal hereunder on account of such hardship, and the
amount of any such withdrawal.
a. A request for withdrawal shall be made in writing and shall
set forth the circumstances surrounding the Unforeseeable
Emergency. As a condition of and part of such request, the
Participant shall provide to the Committee his or her written
representation that (i) the emergency cannot be relieved by
insurance or other reimbursement reasonably available to the
Participant, (ii) the emergency can only be relieved by
liquidation of the Participant's assets (other than liquid
assets) and any such liquidation would itself result in severe
damage or injury to the Participant, and (iii) the Participant
has no reasonable borrowing capacity to relieve the emergency.
The Committee shall be entitled to request such additional
information as may be reasonably required to determine whether
an Unforeseeable Emergency exists and the amount of the
emergency and to establish additional conditions precedent to
the review or granting of a request for a withdrawal on
account of an Unforeseeable Emergency.
b. If the Committee determines that an Unforeseeable Emergency
exists, the Committee may authorize the immediate distribution
of an amount required to meet the financial need created by
such emergency, including any taxes payable on account of such
distribution.
c. Notwithstanding any provision of this Plan to the contrary,
the principal amount of a withdrawal on account of an
Unforeseeable Emergency shall reduce the amount credited to a
Participant's Vested Account.
d. If a Participant is subject to Section 16 of the Act at the
time a hardship withdrawal is requested hereunder, the
Committee may deny the withdrawal, if necessary to comply with
the provisions of Rule 16b-3 promulgated under the Act.
7.3 Early Payments. Notwithstanding any provision of this Plan to the
contrary, the Committee may distribute to any Participant (or Beneficiary) in
the form of an immediate single-sum payment all or any portion of the amount
then credited to a Participant's Account if an adverse determination is made
with respect to such Participant. For this purpose, the term "adverse
determination" shall mean that, based upon Federal tax or revenue law, a
published or private ruling or similar announcement issued by the Internal
Revenue Service, a regulation issued by the Secretary of the Treasury, a
decision by a court of competent jurisdiction, a closing agreement within the
meaning of Code Section 7121 that is approved by the Internal Revenue Service
and involves such Participant or a determination of counsel, a Participant has
or will recognize income for Federal income tax purposes with respect to any
amount that is or will be payable under this Plan before it is otherwise to be
paid hereunder.
Further, notwithstanding any provision of the Plan to the contrary, the
Committee may distribute to any Participant in the form of an immediate
single-sum payment all or any portion of the amount then credited to a
Participant's Account based upon a change in ERISA, a published advisory opinion
or similar announcement issued by the Department of Labor, a regulation issued
by the Secretary of Labor, a decision by a court of competent jurisdiction, an
agreement between such Participant and the Department of Labor or similar agency
or an opinion of counsel, such Participant is not a "key management" or "highly
compensated" employee or this Plan is not an "unfunded" plan within the meaning
of ERISA.
ARTICLE 8 - ADMINISTRATION
8.1 Committee. The Committee shall be the Executive Compensation
Committee of the Company's Board of Directors. The Committee shall have general
responsibility for administration of the Plan (including, but not limited to,
complying with any applicable reporting and disclosure requirements, and
establishing and maintaining records). In the exercise of its sole and absolute
discretion, the Committee shall interpret the Plan's provisions, determine the
eligibility of any person for a benefit hereunder, and the amount of any such
benefit.
Any determination by the Committee need not be uniform as to all or any
Participant hereunder. Any such determination shall be conclusive and binding on
all persons. The Committee shall engage the services of such independent
actuaries, accountants, attorneys and other administrative personnel as it deems
necessary to administer the Plan.
The Committee shall have the power and authority to determine the time
and amount of any distribution or withdrawal hereunder. The Committee shall
direct the Company as to any such distribution or withdrawal. Any withdrawal on
account of an Unforeseeable Emergency or early payment made in accordance with
paragraph 7.3 hereof shall be deemed to constitute an advance against the
affected Participant's benefits hereunder.
The Committee, in its sole discretion, may delegate the powers and
duties afforded hereunder to an officer or Employee of the Company or its
affiliates; provided, however, that any delegation of the right to amend this
Plan shall be limited to ministerial or administrative amendments and the power
to terminate the Plan shall not be delegated. When acting in accordance with
such delegation (whether made orally or in writing) the Committee's designee
shall be deemed to possess the power and authority granted to the Committee
hereunder.
8.2 Beneficiary Designation. Each Participant shall file with the
Committee a written designation, in such form as may be specified by the
Committee, of one or more persons as the Beneficiary who shall be entitled to
receive the benefits, if any, payable under the Plan after the Participant's
death. A Participant may, from time to time, revoke or change such Beneficiary
designation, without the consent of any designated Beneficiary, by filing a new
designation with the Committee. The last such designation actually received by
the Committee shall be controlling. All decisions of the Committee concerning
the effectiveness of any designation and the identity of any Beneficiary shall
be final.
If no designation is in effect at the time of a Participant's death,
the benefits, if any, payable under the Plan after the Participant's death shall
be made in accordance with the provisions of the Retirement Security Plan of
Hibernia National Bank, including any beneficiary designation completed by the
Participant under that plan.
ARTICLE 9 - AMENDMENT AND TERMINATION
9.1 Right to Amend or Terminate Plan. The Board of Directors of the
Company reserves the right at any time to amend or terminate the Plan, in whole
or in part, without the consent of any Participant or Beneficiary. Such
amendment or termination may be made in the sole discretion of either the board
or the Committee.
In no event shall an amendment or termination reduce the number of
Units credited to a Participant's Account as of the Valuation Date immediately
preceding such amendment or termination; provided, however, that this
restriction shall not prevent the Company from discharging its obligations by
providing for an immediate single-sum payout of any Vested Account under this
Plan and the forfeiture of any nonvested Units as of such date.
9.2 Notice. Written notice of any termination or material amendment of
the Plan shall be given to each Participant.
ARTICLE 10 - GENERAL PROVISIONS
10.1 No Right to Continued Employment. Nothing contained in the Plan
shall give any Participant the right to be retained as an Employee of the
Company or any subsidiary or affiliate of the Company or interfere with or
restrict the right of the Company or any subsidiary or affiliate to terminate
the employment of a Participant for any reason or no reason.
10.2 Changes in Common Stock. In the event that (a) the number of
outstanding shares of Common Stock shall be changed by reason of split-ups,
combinations of shares, recapitalizations, stock dividends or otherwise, or (b)
the Common Stock is converted into or exchanged for other shares as a result of
any merger or consolidation (including a sale of assets) or other
recapitalization, the number of Units then credited to the Account of a
Participant shall be appropriately adjusted so as to reflect such change.
10.3 Facility of Payment. If the Committee shall find that any person
to whom any amount is payable under the Plan is unable to care for such person's
affairs because of illness or accident, or is a minor, or has died, then any
payment due such person or such person's estate (unless a prior claim therefor
has been made by a duly appointed legal representative) may, if the Committee so
elects, be paid to such person's spouse, a child, a relative, an institution
maintaining or having custody of such person, or any other person deemed by the
Committee to be a proper recipient on behalf of such person otherwise entitled
to payment. Any such payment shall be a complete discharge of the liability of
the Plan and the Company therefor.
10.4 Nonalienation. No interest, expectancy, benefit, payment, claim or
right of any Participant or Beneficiary under the Plan shall be (a) subject in
any manner to any claims of any creditor of the Participant or Beneficiary, (b)
subject to the debts, contracts, liabilities or torts of the Participant or
Beneficiary or (c) subject to alienation by anticipation, sale, transfer,
assignment, bankruptcy, pledge, attachment, charge or encumbrance of any kind.
If any person shall attempt to take any action contrary to this paragraph, such
action shall be null and void and of no effect, and the Committee and the
Company shall disregard such action and shall not in any manner be bound thereby
and shall suffer no liability on account of its disregard thereof. If any
Participant or Beneficiary hereunder shall become bankrupt or attempt to
anticipate, alienate, sell, assign, pledge, encumber or charge any right
hereunder, then such right or benefit shall, in the discretion of the Committee,
cease and terminate, and in such event the Committee may hold or apply the same
or any part thereof for the benefit of the Participant or Beneficiary or the
spouse, children, or other dependents of the Participant or Beneficiary, or any
of them, in such manner and in such amounts and proportions as the Committee may
deem proper.
10.5 No Trust or Funding Created. The obligations of the Company to
make payments hereunder shall constitute a liability of the Company to a
Participant or Beneficiary, as the case may be. Such payments shall be made from
the general funds of the Company, and the Company shall not be required to
establish or maintain any special or separate fund, or purchase or acquire life
insurance on a Participant's life, or otherwise to segregate assets to assure
that such payment shall be made, and neither a Participant nor a Beneficiary
shall have any interest in any particular asset of the Company by reason of its
obligations hereunder. Nothing contained in the Plan shall create or be
construed as creating a trust of any kind or any other fiduciary relationship
between the Company (or any subsidiary or affiliate of the Company) and a
Participant or any other person. The rights and claims of a Participant or a
Beneficiary to a benefit provided hereunder shall have no greater or higher
status than the rights and claims of any other general, unsecured creditor.
Notwithstanding the foregoing provisions of this paragraph 10.5, the
Company may establish a "rabbi trust" or similar arrangement to provide a source
of funds to meet its obligations under the Plan, but only if the establishment
of such trust or other arrangement does not affect the status of the Plan as an
unfunded plan maintained for the purpose of providing deferred compensation for
a select group of management or highly compensated employees for purposes of
Title I of ERISA.
10.6 Withholding. Notwithstanding any other term or provision of this
Plan, there shall be deducted from the payments provided for herein such amounts
as may be necessary to discharge the withholding obligations of the Company or
any of its subsidiaries or affiliates with respect to any taxes, assessments or
other governmental charges imposed on such payments. In addition, certain
employment taxes may become payable by a Participant with respect to Plan
benefits prior to the date on which payments are made under the Plan, and the
Company and its subsidiaries and affiliates shall have the right to withhold
such employment taxes from other amounts payable to the Participant.
10.7 Claims for Benefits. Each Participant or Beneficiary claiming any
right under this Plan must give written notification thereof to the Committee.
If a claim is denied, the denial shall be contained in a written notice stating
the following:
a. The specific reason for the denial;
b. Specific reference to the Plan provision on which the denial is
based;
c. Description of additional information necessary for the claimant to
present his or her claim, if any, and an explanation of why such
material is necessary; and
d. An explanation of the Plan's claims review procedure.
The claimant shall have 60 days to request a review of any denial by the
Committee. The request for review must be in writing and delivered to the
Committee, which will then provide a full and fair review. The claimant may
review pertinent documents and may submit issues and comments in writing. The
decision by the Committee with respect to the review must be given within 60
days after receipt of the request, unless special circumstances require an
extension (such as for a hearing). In no event shall the decision be delayed
beyond 120 days after receipt of the request for review. The decision shall
include specific reasons and refer to the specific Plan provisions on which it
is based.
10.8 Binding Effect. Obligations incurred by the Company pursuant to
this Plan shall be binding upon and inure to the benefit of the Company, its
successors and assigns, and the Participant and the Participant's Beneficiary.
10.9 Notices. Any notices required or permitted to be given to the
Committee under this Plan shall be deemed received when delivered personally or
mailed, by United States mail, postage prepaid, to the following address:
Hibernia Corporation, Attn: Thomas P. King, P.O. Box 61540, New Orleans,
Louisiana 70161. Any notice required or permitted to be given to a Participant
under this Plan shall be deemed received when delivered personally or mailed, by
United States mail, postage prepaid, to the Participant's address as last shown
in the personnel records of the Company or its subsidiaries and affiliates.
10.10 Merger or Consolidation. In the event of a merger or a
consolidation by the Company with another corporation, or the acquisition of
substantially all of the assets or outstanding stock of the Company by another
corporation, then and in such event the obligations and responsibilities of the
Company under this Plan shall be assumed by any such successor or acquiring
corporation, and all of the rights, privileges and benefits of the Participants
and Beneficiaries hereunder shall continue.
10.11 No Shareholder Rights. Except as otherwise expressly provided in
this Plan, no Participant shall have any voting or other shareholder rights by
reason of being a Participant in the Plan or with respect to any Units credited
to his or her Account.
10.12 Entire Plan. This document, any formal written amendments hereto
and any elections provided for herein shall be deemed to contain all the terms
and provisions of the Plan and shall constitute the entire Plan, any other
alleged terms or provisions being of no effect. Without limiting the generality
of the foregoing, no Participant shall have any rights as a shareholder of the
Company with respect to or as a result of any Units credited to his or her
Account.
10.13 Governing Law. The validity of this Plan, the construction of its
terms and the determination of the rights and duties of the parties hereto shall
be governed by and construed in accordance with federal laws and regulations and
the internal laws of the State of Louisiana applicable to contracts made and to
be performed wholly within such state.
THIS PLAN was adopted on January 22, 1996, and executed this ____ day
of December, 1996, and shall be executed in multiple counterparts, each of which
shall be deemed an original, to be effective as of the date designated above.
HIBERNIA CORPORATION
By:
Its:
<PAGE>
HIBERNIA CORPORATION
SUPPLEMENTAL STOCK COMPENSATION PLAN
FOR KEY MANAGEMENT EMPLOYEES
PAYMENT ELECTION
I acknowledge that I am a participant in the SUPPLEMENTAL STOCK
COMPENSATION PLAN FOR KEY MANAGEMENT EMPLOYEES (the "Plan"). I agree to be bound
by the terms and conditions of the Plan, all of which are incorporated in this
Payment Election by this reference, and I make the following elections
concerning the payment of my benefits from the Plan:
I. STATUS OF ELECTION. This election is:
- My initial Payment Election.
- A modification of a prior Payment Election.
II. FORM OF BENEFIT PAYMENT. I hereby elect to have my benefits paid in
the form of (select one), provided I am an Eligible Participant (as defined in
the Plan) at the time payment commences:
- A single-sum payment.
- Substantially equal annual installments payable over ___ (not
more than 20) consecutive calendar years.
III. BENEFIT PAYMENT DATE. I elect to have my benefits paid (or
payments commence) as of the first day of the Plan Year following the later of
my Termination of Employment (as defined in the Plan) or the date I attain age
_____ (between age 55 and 65), provided I am an Eligible Participant at the time
payment commences.
IV. LIMITATIONS. I understand that I can modify this election by
delivery of a new election form to the Committee. I acknowledge that any
modification will be effective only if it is delivered to and accepted by the
Committee at least three calendar years prior to my Termination of Employment.
If any modification is ineffective, I understand that benefits will be paid in
accordance with my immediately preceding Payment Election or, if no election has
been accepted by the Committee, the default provisions of the Plan.
V. EXECUTION AND ACCEPTANCE. By execution of this election, I agree to
be bound by the terms and conditions of the Plan. I acknowledge that I have been
given the opportunity to obtain a copy of the Plan from the Committee. This
Payment Election has been executed this _____ day of ____________________,
199__.
Participant
ACCEPTED by an authorized representative of the Committee as of this
_____ day of ________________________, 19___.
Authorized Representative of Committee
<PAGE>
EXHIBIT 10.43
HIBERNIA CORPORATION
DEFERRED AWARD PLAN
TABLE OF CONTENTS
Page
ARTICLE 1 - ESTABLISHMENT AND PURPOSE.................................... 1
ARTICLE 2 - DEFINITIONS.................................................. 1
ARTICLE 3 - ELIGIBILITY AND PARTICIPATION................................ 3
ARTICLE 4 - DEFERRED AWARDS; DEFERRED AWARD ACCOUNTS..................... 3
Deferred Award.................................................. 3
Deferred Award Account.......................................... 4
Status of Account............................................... 4
ARTICLE 5 - DISTRIBUTION OF VESTED ACCOUNT............................... 4
Termination of Employment Before Age 55 and 15 Years of Service. 4
Termination of Employment After Age 55 and Completion of 15
Years of Service....................................... 4
Installation Payments........................................... 5
Death Before Commencement of Benefits........................... 5
Death After Commencement of Installment Payments................ 6
Single-Sum Payments............................................. 6
ARTICLE 6 - SPECIAL PAYMENTS............................................. 6
Notice of Termination By Participant............................ 6
Hardship Withdrawal............................................. 6
Early Payments.................................................. 7
ARTICLE 7 - ADMINSTRATION................................................ 7
Committee....................................................... 7
Beneficiary Designation......................................... 8
ARTICLE 8 - AMENDMENT AND TERMINATION.................................... 8
Right to Amend or Terminate Plan................................ 8
Notice.......................................................... 9
ARTICLE 9 - GENERAL PROVISION............................................ 9
No Right to Continued Employment................................ 9
Payment on Behalf of Payee...................................... 9
Nonalienation................................................... 9
No Trust or Funding Created..................................... 9
Withholding.....................................................10
Claims for Benefits.............................................10
Binding Effect..................................................10
Notices.........................................................11
Merger or Consolidation.........................................11
Entire Plan.....................................................11
Governing Law...................................................11
<PAGE>
HIBERNIA CORPORATION
DEFERRED AWARD PLAN
ARTICLE 1 - ESTABLISHMENT AND PURPOSE
This plan was authorized and adopted by the Executive Compensation
Committee of the Board of Directors of Hibernia Corporation on January 22, 1996,
and was established to provide benefits to a select group of key management
employees of Hibernia Corporation, Hibernia National Bank or affiliates thereof
and shall be known as the "Deferred Award Plan" (the "Plan"). This Plan is
intended to be an unfunded deferred compensation arrangement within the meaning
of the Employee Retirement Income Security Act of 1974, as amended ("ERISA"). As
such, this Plan is not intended to constitute an employee benefit plan which is
subject to Parts 2, 3 and 4 of Title I of ERISA. In accordance with such intent,
employees who participate hereunder shall be unsecured general creditors of the
Company as to the benefits provided under the Plan.
ARTICLE 2 - DEFINITIONS
The following words and phrases as used in the Plan have the following
meanings:
2.1 Adjustment Date: The last day of the Plan Year and such other dates
as may be designated, from time to time, by the Committee.
2.2 Bank: Hibernia National Bank, a financial institution with its
principal place of business in New Orleans, Louisiana.
2.3 Beneficiary: The person, persons, entity or entities designated by
a Participant pursuant to Article 7 to receive the benefits, if any, payable
after the death of such Participant. If there is no designation or a designation
is invalid, then a Participant's Beneficiary shall be determined in accordance
with the terms of the Retirement Security Plan of Hibernia Corporation.
2.4 Change in Control: Change in Control means that:
a. Any "person" including any "group," determined in accordance
with Section 13(d)(3) of the Securities Exchange Act of 1934,
as amended the "Act"), becomes the beneficial owner, directly
or indirectly, of securities of Hibernia Corporation
representing 20% or more of the combined voting power of the
corporation's then outstanding securities, without the
approval, recommendation, or support of the Board of Directors
of the Hibernia Corporation as constituted immediately prior
to such acquisition;
b. The Federal Deposit Insurance Corporation or any other
regulatory agency negotiates and implements a plan for the
merger, transfer of assets and liabilities, reorganization,
and/or liquidation of Hibernia National Bank;
c. Either of Hibernia Corporation or Hibernia National Bank is
merged into another corporate entity or consolidated with one
or more corporations, other than a wholly-owned subsidiary of
Hibernia Corporation;
d. A change in the members of the Board of Directors of Hibernia
Corporation which results in the exclusion of a majority of
the "continuing board." For this purpose, the term "continuing
board" means the members of the Board of Directors of Hibernia
Corporation, determined as of the date on which this Plan is
executed, and subsequent members of such board who are elected
by or on the recommendation of a majority of such "continuing
board"; or
e. The sale or other disposition of all or substantially all of
the stock or the assets of Hibernia National Bank or Hibernia
Corporation (or any successor corporation thereto).
The Committee shall determine whether a Change in Control has occurred under
this paragraph 2.4.
2.5 Committee: The Committee provided for in Article 7 which is
responsible for administering the Plan.
2.6 Company: Hibernia Corporation, a corporation organized and existing
under the laws of the State of Louisiana, and any entity which succeeds to its
rights and obligations with respect to the Plan.
2.7 Competitive Business: Any incorporated or unincorporated entity
that accepts deposits or makes loans from one or more offices located in the
State of Louisiana.
2.8 Deferred Award(s): An amount designated in writing by the Committee
as a Deferred Award hereunder.
2.9 Deferred Award Account: The separate bookkeeping account maintained
for each Participant which is subject to adjustment as provided in Article 4
hereof.
2.10 Employee: An individual who is employed by the Company, the Bank
or an affiliate thereof.
2.11 Interest: The amount of interest to be credited to each
Participant's Deferred Award Account as provided in paragraph 4.2 hereof. The
annual compounded interest rate applicable with respect to an Adjustment Date
hereunder shall be the Corporate Bond Survey Average Rate published by Moody's
during the calendar month immediately preceding such Adjustment Date, plus 1%.
2.12 Participant: As of any date, an Employee designated as a
Participant hereunder or a former Employee who is eligible for a benefit under
this Plan.
2.13 Plan: This Hibernia Corporation Deferred Award Plan, as the same
may be amended from time to time.
2.14 Plan Year: The calendar year. The first Plan Year shall be the
calendar year beginning January 1, 1996, and ending December 31, 1996.
2.15 Termination of Employment: The date on which a Participant ceases
to provide services for the Company, the Bank or an affiliate, whether as a
common law employee, independent contractor or otherwise.
2.16 Unforeseeable Emergency: A severe financial hardship to the
Participant resulting from a sudden and unexpected illness, accident or
disability of the Participant or of a dependent of the Participant, loss of the
Participant's property due to casualty, or other similar extraordinary and
unforeseeable circumstances arising as a result of events beyond the control of
the Participant. The determination of whether a Participant has an Unforeseeable
Emergency shall be made by the Committee in the exercise of its sole and
absolute discretion upon application by the Participant and submission by the
Participant of such evidence of Unforeseeable Emergency as may be requested by
the Committee.
2.17 Vested Account: The total amount credited to a Participant's
Deferred Award Account upon the earlier of the completion of five Years of
Service, a Change in Control, or the Participant's date of death. Prior to any
such date, the value of a Participant's Vested Account shall be zero.
2.18 Year of Service: Each 12-month period measured from an Employee's
most recent date of hire, provided her or she remains continuously employed by
the Company, the Bank or an affiliate of either during such period.
ARTICLE 3 - ELIGIBILITY AND PARTICIPATION
The Committee shall have the sole discretion to select Employees for
participation in the Plan. The Committee shall notify those Employees selected
for participation of the benefits available under the Plan and the terms and
conditions of the Plan. Participation determinations by the Committee shall be
conclusive and binding on all persons and need not be uniform as between groups
or categories of Employees.
ARTICLE 4 - DEFERRED AWARDS; DEFERRED AWARD ACCOUNTS
4.1 Deferred Award. The Committee may, from time to time, grant a
Deferred Award to a Participant hereunder. Such grant shall be made in writing
and shall be credited to the Participant's Deferred Award Account in accordance
with paragraph 4.2 hereof. In no event shall a Deferred Award hereunder be
expressed in the form of units or shares of common stock issued by the Company
or in a manner otherwise constituting a security or derivative security within
the meaning of Section 16 of the Act.
4.2 Deferred Award Account. The Committee shall establish and cause to
be maintained with respect to each Participant a Deferred Award Account. As of
each Adjustment Date, each such account shall be adjusted as set forth below:
a. There shall be credited to the Participant's Deferred Award
Account the amount of all Deferred Awards, if any, granted to
the Participant since the last Adjustment Date.
b. Interest shall be credited to the Participant's Deferred Award
Account for the period since the immediately preceding
Adjustment Date. Interest will be credited at a rate that,
when compounded, will equal the annual compounded interest
rate described in paragraph 2.11 hereof.
c. The Participant's Deferred Award Account shall be reduced by
any payment or distribution hereunder made since the
immediately preceding Adjustment Date.
4.3 Status of Account. Any Account established hereunder shall be a
bookkeeping entry only. The establishment and maintenance of any such Account
shall not be deemed to constitute a trust or create any other form of fiduciary
relationship between the Employer and any Participant or Beneficiary or
otherwise create, for the benefit of any Participant or Beneficiary, an
ownership interest or expectancy in any specific asset of the Company.
ARTICLE 5 - DISTRIBUTION OF VESTED ACCOUNT
5.1 Termination of Employment. Before Age 55 and 15 Years of Service.
The Vested Account of a Participant whose Termination of Employment occurs prior
to his or her attainment of age 55 and completion of 15 Years of Service shall
be paid in the form of a single-sum not later than 60 days after the close of
the Plan year in which such Termination of Employment occurs.
5.2 Termination of Employment. After age 55 and Completion of 15 Years
of Service. A Participant whose Termination of Employment occurs on or after
attainment of age 55 (for any reason other than death) and the completion of 15
Years of Service (an "Eligible Participant") shall be entitled to have his or
her Vested Account paid in accordance with this paragraph 5.2.
a. An Eligible Participant may elect to receive his or her
benefits in the form of (i) a single-sum payment, or (ii)
payment in substantially equal annual installments over a
period not in excess of 20 years.
b. An Eligible Participant shall designate a payment date which
shall be the later of the first day of the Plan Year after
such Participant's Termination of Employment or the first day
of the Plan Year following the attainment of the age
designated by the Participant in his or her payment election
(between age 55 and 65).
c. Each Participant shall make a payment election upon his or her
commencement of participation in the Plan (an "Initial
Election"). Thereafter, such Participant shall have the right
to change such election from time to time; provided, however,
that any modification of an Initial Election shall be
effective only if received and accepted by the Committee at
least three consecutive calendar years prior to the date of an
Eligible Participant's Termination of Employment.
d. If there is no payment election in effect upon an Eligible
Participant's Termination of Employment or the Participant's
payment election cannot be administered by the Committee, then
the Company shall make a single-sum payment of the
Participant's Vested Account not later than 60 days after the
last day of the Plan Year in which a Participant's Termination
of Employment occurs.
5.3 Installment Payments.
a. Annual installment payments shall be made on or before January
31st of each year, beginning with the year specified by the
Eligible Participant. Each annual installment shall be equal
to the Participant's Vested Account as of the last day of the
immediately preceding Plan Year reduced by the principal
amount of any distribution or withdrawal since such date
multiplied by a fraction, the numerator of which is one and
the denominator of which is the number of annual installments
remaining to be paid pursuant to the Participant's election.
b. If the Committee determines that a Participant has engaged in
(as an employee, consultant, independent contractor, owner,
manager, partner, shareholder, director, officer, joint
venturer, investor or otherwise) or otherwise renders
assistance to any Competitive Business following his or her
Termination of Employment, then the Committee shall pay the
balance of the Participant's Vested Account in a single-sum
payment within 30 days of such determination, and any such
payment shall be in full and final satisfaction of all of the
Company's obligations to the Participant under this Plan.
c. If a Participant has an Unforeseeable Emergency and requests a
hardship withdrawal during an installment pay-out period, the
Committee shall determine whether an Unforeseeable Emergency
exists and direct the Company to make payment, subject to the
provisions of paragraph 6.2 hereunder.
5.4 Death Before Commencement of Benefits. If an Eligible Participant
dies before payment is made or payments commence, then the Company shall pay the
Participant's Vested Account to his or her Beneficiary not later than 60 days
following the last day of the Plan Year in which the Participant's death occurs.
5.5 Death After Commencement of Installment Payments. If an Eligible
Participant dies after beginning to receive installment payments in accordance
with this Article 5, then the Participant's Beneficiary shall continue to
receive such installment payments in accordance with the term designated by the
Participant.
5.6 Single-Sum Payments. Any single-sum payment under this Article 5
shall be equal the Participant's Vested Account, determined as of the Valuation
Date coinciding with or immediately preceding the distribution date, reduced by
the principal amount of any distribution or withdrawal made since such date.
ARTICLE 6 - SPECIAL PAYMENTS
6.1 Notice of Termination By Participant. The Committee shall promptly
notify each Participant upon the occurrence of a Change in Control. During the
30-day period following receipt of such notice, each Participant may elect to
terminate his or her participation in the Plan by giving written notice of
termination to the Committee. Within 30 days after receipt of such notice of
termination, the Company shall make a single-sum payment to the Participant in
an amount equal to 90% of the Participant's Vested Account, determined as of the
Valuation Date coinciding with or immediately preceding such payment, reduced by
the amount of a distribution or withdrawal since such date. In the event of a
termination of participation hereunder, the Participant shall not be eligible to
again participate in this Plan.
6.2 Hardship Withdrawal. If a Participant experiences an Unforeseeable
Emergency, such Participant may request the Committee to approve the withdrawal
of all or a portion of his or her Vested Account in the form of an immediate
single-sum payment, subject to the limitations set forth in this paragraph 6.2.
Notwithstanding any provision of this Plan to the contrary, the Committee, in
its sole discretion, shall have the authority to determine whether an
Unforeseeable Emergency has occurred, whether a withdrawal shall be made on
account of any such emergency and the amount of any such withdrawal.
a. A request for withdrawal shall be made in writing and shall
set forth the circumstances surrounding the Unforeseeable
Emergency. As a condition of and part of such request, the
Participant shall provide to the Committee his or her written
representation that (i) the emergency cannot be relieved by
insurance or other reimbursement reasonably available to the
Participant, (ii) the emergency can only be relieved by
liquidation of the Participant's assets (other than liquid
assets) and any such liquidation would itself result in severe
damage or injury to the Participant, and (iii) the Participant
has no reasonable borrowing capacity to relieve the emergency.
The Committee shall be entitled to request such additional
information as may be reasonably required to determine whether
an Unforeseeable Emergency exists and the amount of the
emergency and to establish additional conditions precedent to
the review or granting of a request for a withdrawal on
account of an Unforeseeable Emergency.
b. If the Committee determines that an Unforeseeable Emergency
exists, the Committee may authorize the immediate distribution
of an amount required to meet the financial need created by
such emergency, including any taxes payable on account of such
distribution.
c. Notwithstanding any provision of this Plan to the contrary,
the principal amount of a withdrawal on account of an
Unforeseeable Emergency shall reduce the amount credited to a
Participant's Vested Account.
6.3 Early Payments. Notwithstanding any provision of this Plan to the
contrary, the Committee may distribute to any Participant (or Beneficiary) in
the form of an immediate single-sum payment all or any portion of the amount
then credited to a Participant's Account if an adverse determination is made
with respect to such Participant. For this purpose, the term "adverse
determination" shall mean that, based upon Federal tax or revenue law, a
published or private ruling or similar announcement issued by the Internal
Revenue Service, a regulation issued by the Secretary of the Treasury, a
decision by a court of competent jurisdiction, a closing agreement (within the
meaning of Code Section 7121) that is approved by the Internal Revenue Service
and involves such Participant or a determination of counsel, a Participant has
or will recognize income for Federal income tax purposes with respect to any
amount that is or will be payable under this Plan before it is otherwise to be
paid hereunder.
Further, notwithstanding any provision of the Plan to the contrary, the
Committee may distribute to any Participant in the form of an immediate
single-sum payment all or any portion of the amount then credited to a
Participant's Account based upon a change in ERISA, a published advisory opinion
or similar announcement issued by the Department of Labor, a regulation issued
by the Secretary of Labor, a decision by a court of competent jurisdiction, an
agreement between such Participant and the Department of Labor or similar agency
or an opinion of counsel, such Participant is not a "key management" or "highly
compensated" employee or this Plan is not an "unfunded" plan within the meaning
of ERISA.
ARTICLE 7 - ADMINISTRATION
7.1 Committee The Committee shall be the Executive Compensation
Committee of the Company's Board of Directors. The Committee shall have general
responsibility for administration of the Plan (including, but not limited to,
complying with any applicable reporting and disclosure requirements, and
establishing and maintaining records). In the exercise of its sole and absolute
discretion, the Committee shall interpret the Plan's provisions, determine the
eligibility of any person for a benefit hereunder, and the amount of any such
benefit.
Any determination by the Committee need not be uniform as to all or any
Participant hereunder. Any such determination shall be conclusive and binding on
all persons. The Committee shall engage the services of such independent
actuaries, accountants, attorneys and other administrative personnel as it deems
necessary to administer the Plan.
The Committee shall have the power and authority to determine the time
and amount of any distribution or withdrawal hereunder. The Committee shall
direct the Company as to any such distribution or withdrawal. Any withdrawal on
account of an Unforeseeable Emergency or early payment hereof shall be deemed to
constitute an advance against the affected Participant's benefits hereunder.
The Committee, in its sole discretion, may delegate the power and
authority granted hereunder to any officer or Employee of the Company or an
affiliate thereof; provide, however, that the delegation of the power to amend
the Plan shall be limited to ministerial or administrative amendments, and the
power to terminate the Plan shall not be delegated. When acting in accordance
with such delegation (whether orally or in writing), the Committee's designee
shall be deemed to possess the power and authority granted to the Committee
hereunder.
7.2 Beneficiary Designation. Each Participant shall file with the
Committee a written designation, in such form as may be specified by the
Committee, of one or more persons as the Beneficiary who shall be entitled to
receive the benefits, if any, payable under the Plan after the Participant's
death. A Participant may, from time to time, revoke or change such Beneficiary
designation, without the consent of any designated Beneficiary, by filing a new
designation with the Committee. The last such designation actually received by
the Committee shall be controlling. All decisions of the Committee concerning
the effectiveness of any designation and the identity of any Beneficiary shall
be final.
If no designation is in effect at the time of a Participant's death,
the benefits, if any, payable under the Plan after the Participant's death shall
be made in accordance with the provisions of the Retirement Security Plan of
Hibernia National Bank, including any beneficiary designation completed by the
Participant under that plan.
ARTICLE 8 - AMENDMENT AND TERMINATION
8.1 Right to Amend or Terminate Plan. The Board of Directors of the
Company reserves the right at any time to amend or terminate the Plan, in whole
or in part, without the consent of any Participant or Beneficiary. Such
amendment or termination may be made in the sole discretion of either the board
or the Committee.
In no event shall an amendment or termination reduce the amount
credited to a Participant's Deferred Award Account as of the Valuation Date
coinciding with or immediately preceding such amendment or termination;
provided, however, that this restriction shall not prevent the Company from
discharging its obligations by providing for an immediate single-sum payout of
any Vested Account under this Plan and the forfeiture of any nonvested amount.
8.2 Notice. Written notice of any termination or material amendment of
the Plan shall be given to each Participant.
ARTICLE 9 - GENERAL PROVISIONS
9.1 No Right to Continued Employment. Nothing contained in the Plan
shall give any Participant the right to be retained as an Employee of the
Company or any subsidiary or affiliate of the Company or interfere with or
restrict the right of the Company or any subsidiary or affiliate to terminate
the employment of a Participant for any reason or no reason.
9.2 Payment on Behalf of Payee. If the Committee shall find that any
person to whom any amount is payable under the Plan is unable to care for such
person's affairs because of illness or accident, or is a minor, or has died,
then any payment due such person or such person's estate (unless a prior claim
therefor has been made by a duly appointed legal representative) may, if the
Committee so elects, be paid to such person's spouse, a child, a relative, an
institution maintaining or having custody of such person, or any other person
deemed by the Committee to be a proper recipient on behalf of such person
otherwise entitled to payment. Any such payment shall be a complete discharge of
the liability of the Plan and the Company therefor.
9.3 Nonalienation. No interest, expectancy, benefit, payment, claim or
right of any Participant or Beneficiary under the Plan shall be (a) subject in
any manner to any claims of any creditor of the Participant or Beneficiary, (b)
subject to the debts, contracts, liabilities or torts of the Participant or
Beneficiary or (c) subject to alienation by anticipation, sale, transfer,
assignment, bankruptcy, pledge, attachment, charge or encumbrance of any kind.
If any person shall attempt to take any action contrary to this paragraph, such
action shall be null and void and of no effect, and the Committee and the
Company shall disregard such action and shall not in any manner be bound thereby
and shall suffer no liability on account of its disregard thereof. If any
Participant or Beneficiary hereunder shall become bankrupt or attempt to
anticipate, alienate, sell, assign, pledge, encumber or charge any right
hereunder, then such right or benefit shall, in the discretion of the Committee,
cease and terminate, and in such event the Committee may hold or apply the same
or any part thereof for the benefit of the Participant or Beneficiary or the
spouse, children, or other dependents of the Participant or Beneficiary, or any
of them, in such manner and in such amounts and proportions as the Committee may
deem proper.
9.4 No Trust or Funding Created. The obligations of the Company to make
payments hereunder shall constitute a liability of the Company or a
Participating Company to a Participant or Beneficiary, as the case may be. Such
payments shall be made from the general funds of the Company, and the Company
shall not be required to establish or maintain any special or separate fund, or
purchase or acquire life insurance on a Participant's life, or otherwise to
segregate assets to assure that such payment shall be made, and neither a
Participant nor a Beneficiary shall have any interest in any particular asset of
the Company by reason of its obligations hereunder. Nothing contained in the
Plan shall create or be construed as creating a trust of any kind or any other
fiduciary relationship between the Company (or any subsidiary or affiliate of
the Company) and a Participant or any other person. The rights and claims of a
Participant or a Beneficiary to a benefit provided hereunder shall have no
greater or higher status than the rights and claims of any other general,
unsecured creditor. Notwithstanding the foregoing provisions of this paragraph
8.4, the Company may establish a "Rabbi Trust" or similar arrangement to provide
a source of funds to meet its obligations under the Plan, but only if the
establishment of such trust or other arrangement does not affect the status of
the Plan as an unfunded plan maintained for the purpose of providing deferred
compensation for a select group of management or highly compensated employees
for purposes of Title I of the Employee Retirement Security Act of 1974, as
amended.
9.5 Withholding. Notwithstanding any other term or provision of this
Plan, there shall be deducted from the payments provided for herein such amounts
as may be necessary to discharge the withholding obligations of the Company or
any of its subsidiaries or affiliates with respect to any taxes, assessments or
other governmental charges imposed on such payments. In addition, certain
employment taxes may become payable by a Participant with respect to Plan
benefits prior to the date on which payments are made under the Plan, and the
Company and its subsidiaries and affiliates shall have the right to withhold
such employment taxes from other amounts payable to the Participant.
9.6 Claims for Benefits. Each Participant or Beneficiary claiming any
right under this Plan must give written notification thereof to the Committee.
If a claim is denied, the denial shall be contained in a written notice stating
the following:
a. The specific reason for the denial;
b. Specific reference to the Plan provision on which the denial is
based;
c. Description of additional information necessary for the claimant to
present his or her claim, if any, and an explanation of why such material is
necessary; and
d. An explanation of the Plan's claims review procedure.
The claimant will have 60 days to request a review of any denial by the
Committee. The request for review must be in writing and delivered to the
Committee, which will then provide a full and fair review. The claimant may
review pertinent documents and may submit issues and comments in writing. The
decision by the Committee with respect to the review must be given within 60
days after receipt of the request, unless special circumstances require an
extension (such as for a hearing). In no event shall the decision be delayed
beyond 120 days after receipt of the request for review. The decision shall
include specific reasons and refer to the specific Plan provisions on which it
is based.
9.7 Binding Effect. Obligations incurred by the Company pursuant to
this Plan shall be binding upon and inure to the benefit of the Company, its
successors and assigns, and the Participant and the Participant's Beneficiary.
9.8 Notices. Any notices required or permitted to be given to the
Committee under this Plan shall be deemed received when delivered personally or
mailed, by United States mail, postage prepaid by registered or certified mail,
to the following address: Hibernia Corporation, Attn.: Thomas P. King, P.O. Box
61540 New Orleans, La. 70161. Any notice required or permitted to be given to a
Participant under this Plan shall be deemed received when delivered personally
to such Participant or mailed, by United States mail, postage prepaid, to the
Participant's address as last shown in the personnel records of the Company.
9.9 Merger or Consolidation. In the event of a merger or a
consolidation by the Company with another corporation, or the acquisition of
substantially all of the assets or outstanding stock of the Company by another
corporation, then and in such event the obligations and responsibilities of the
Company under this Plan shall be assumed by any such successor or acquiring
corporation, and all of the rights, privileges and benefits of the Participants
and Beneficiaries hereunder shall continue.
9.10 Entire Plan. All Payment Elections and Beneficiary Designations
are made a part hereof and are incorporated herein by reference. This document,
any written amendments hereto, the Payment Elections and Beneficiary
Designations contain all the terms and provisions of the Plan and shall
constitute the entire Plan, any other alleged terms or provisions being of no
effect.
9.11 Governing Law. The validity of this Plan, the construction of its
terms and the determination of the rights and duties of the parties hereto shall
be governed by and construed in accordance with federal laws and regulations and
the internal laws of the State of Louisiana applicable to contracts made and to
be performed wholly within such state.
THIS PLAN was adopted on January 22, 1996, and executed on this ____
day of December, 1996, and shall be executed in multiple counterparts, each of
which shall be deemed an original, to be effective as of the date designated
above.
HIBERNIA CORPORATION
By:
Its:
<PAGE>
HIBERNIA CORPORATION
DEFERRED AWARD PLAN
PAYMENT ELECTION
I acknowledge that I am a participant in the DEFERRED AWARD PLAN (the
"Plan"). I agree to be bound by the terms and conditions of the Plan, all of
which are incorporated in this Payment Election by this reference, and I make
the following elections concerning the payment of my benefits from the Plan:
I. STATUS OF ELECTION. This election is:
- My initial Payment Election.
- A modification of a prior Payment Election.
II. FORM OF BENEFIT PAYMENT. I hereby elect to have my benefits paid in
the form of (select one), provided I am an Eligible Participant (as defined in
the Plan) at the time of payment:
- A single-sum payment.
- Substantially equal annual installments payable over ___
(not more than 20) consecutive calendar years.
III. BENEFIT PAYMENT DATE. I elect to have my benefits paid (or
payments commence) as of the first day of the Plan Year following the later of
my Termination of Employment (as defined in the Plan) or the date I attain age
_____ (between age 55 and 65), provided I am an Eligible Participant at the time
of payment.
IV. LIMITATIONS. I understand that I can modify this election by
delivery of a new election form to the Committee. I acknowledge that any
modification will be effective only if it is delivered to and accepted by the
Committee at least three calendar years prior to my Termination of Employment.
If any modification is ineffective, I understand that benefits will be paid in
accordance with my immediately preceding Payment Election or, if no election has
been accepted by the Committee, the default provisions of the Plan.
V. EXECUTION AND ACCEPTANCE. By execution of this election, I agree to
be bound by the terms and conditions of the Plan. I acknowledge that I have been
given the opportunity to obtain a copy of the Plan from the Committee. This
Payment Election has been executed this _____ day of ____________________,
199__.
Participant
ACCEPTED by an authorized representative of the Committee as of this
_____ day of ________________________, 19___.
Authorized Representative of Committee
<PAGE>
HIBERNIA CORPORATION
Corporate Offices Mailing Address
313 Carondelet Street P.O. Box 61540
New Orleans, LA 70130 New Orleans, LA 70161
504-533-3333 Internet:
http://www.hiberniabank.com
Stock Listing
The common stock of Hibernia Corporation is listed on the New York Stock
Exchange under the ticker symbol "HIB". Price and volume information are listed
under "Hibernia" and "HIB" in The Wall Street Journal and under similar
designations in other daily newspapers. At December 31, 1996, Hibernia
Corporation had 14,569 shareholders of record and 4,512 full-time equivalent
employees.
Shareholder Assistance
Shareholders requesting a change of address, records or information about lost
certificates, or who want to have dividends deposited directly into checking or
savings accounts should contact:
Chase Mellon Shareholder Services
Security Relations Department
85 Challenger Road, Overpeck Centre
Ridgefield, NJ 07660
Toll free: 800-814-0305
Dividend Reinvestment and Stock Purchase Plan
Hibernia's Dividend Reinvestment and Stock Purchase Plan is an economical,
convenient way for shareholders to increase their holdings of the Company's
stock. Once enrolled in the plan, shareholders may purchase new shares directly
from the Company by reinvesting cash dividends, making optional cash purchases
or both.
Direct Deposit of Dividends
By depositing dividends directly to checking or savings accounts, shareholders
can receive their funds faster. To sign up or receive information, call toll
free 800-814-0305.
For Information
Shareholders, media representatives and other individuals seeking copies of the
annual report, Form 10-K and Form 10-Q, as well as general information, should
contact Jim Lestelle, Senior Vice President and Manager of Corporate
Communications, at 504-533-5482 or toll free at 800-245-4388.
Analysts and others seeking financial data or a prospectus on the
Dividend Reinvestment and Stock Purchase Plan should contact Dana M. Combes,
Senior Vice President and Manager of Investor and Government Relations, at
504-533-2180 or toll free at 800-245-4388.
For fax access to news releases, quarterly reports, analyst reports and
dividend reinvestment details, call toll free 800-207-9063.
Duplicate Mailings
The Company is required to mail information to each name on its shareholder
list, even if it means sending duplicates. Shareholders wishing to eliminate
duplicate mailings should write to Chase Mellon Shareholder Services at the
address on this page indicating which names should be removed. This will not
affect dividend or proxy mailings.
<TABLE>
<CAPTION>
Hibernia Stock Price And Dividend Information
1996 1995
- --------------------------------------------------------------------------------
Cash Cash
Market Price(1) Dividends Market Price(1) Dividends
High Low Declared High Low Declared
- --------------------------------------------------------------------------------
<S> <C> <C> <C> <C> <C> <C>
First quarter .. $10.88 $10.00 $0.07 $ 7.88 $6.88 $0.06
- --------------------------------------------------------------------------------
Second quarter . $11.88 $10.00 $0.07 $ 9.38 $7.75 $0.06
- --------------------------------------------------------------------------------
Third quarter .. $11.75 $10.00 $0.07 $10.63 $8.75 $0.06
- --------------------------------------------------------------------------------
Fourth quarter . $13.50 $11.13 $0.08 $11.00 $9.75 $0.07
- --------------------------------------------------------------------------------
- ----------
(1) NYSE closing price.
</TABLE>
<PAGE>
<TABLE>
<CAPTION>
Five-Year Consolidated Summary of Income and Selected Financial Data (1)
Hibernia Corporation and Subsidiaries
- ----------------------------------------------------------------------------------------------------------------------------
Year Ended December 31
($ in thousands, except per-share data) 1996 1995 1994 1993 1992
- ----------------------------------------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C> <C>
Interest income .................................... $ 625,628 $ 562,846 $ 479,945 $ 458,132 $ 523,598
Interest expense ................................... 259,411 242,090 178,829 162,142 230,464
- ------------------------------------------------------------------------------------------------------------------------------------
Net interest income ................................ 366,217 320,756 301,116 295,990 293,134
Provision for possible loan losses ................. (12,625) 1,140 (17,869) (2,786) 72,297
- ------------------------------------------------------------------------------------------------------------------------------------
Net interest income after provision
for possible loan losses ....................... 378,842 319,616 318,985 298,776 220,837
- ------------------------------------------------------------------------------------------------------------------------------------
Noninterest income:
Noninterest income .............................. 115,665 103,966 94,847 90,639 92,102
Securities gains (losses), net .................. (5,306) 248 (1,669) 819 17,295
- ------------------------------------------------------------------------------------------------------------------------------------
Noninterest income ................................. 110,359 104,214 93,178 91,458 109,397
Noninterest expense ................................ 319,733 284,078 302,918 304,234 308,719
- ------------------------------------------------------------------------------------------------------------------------------------
Income before taxes ................................ 169,468 139,752 109,245 86,000 21,515
Income tax expense ................................. 59,518 10,867 7,785 13,292 8,765
- ------------------------------------------------------------------------------------------------------------------------------------
Income from continuing operations .................. 109,950 128,885 101,460 72,708 12,750
Extraordinary loss on debt restructuring, net of tax -- -- -- -- (39,179)
Utilization of net operating loss carryforwards .... -- -- -- -- 6,181
Cumulative effect of change in accounting for
income taxes .................................... -- -- -- 3,461 --
- ------------------------------------------------------------------------------------------------------------------------------------
Net income (loss) .................................. $ 109,950 $ 128,885 $ 101,460 $ 76,169 $ (20,248)
- ------------------------------------------------------------------------------------------------------------------------------------
Net income (loss) applicable to common shareholders $ 108,210 $ 128,885 $ 101,460 $ 76,169 $ (20,248)
- ------------------------------------------------------------------------------------------------------------------------------------
Per common share information: (2)
Income from continuing operations ............... $ 0.85 $ 1.02 $ 0.80 $ 0.57 $ 0.17
Net income (loss) ............................... $ 0.85 $ 1.02 $ 0.80 $ 0.60 $ (0.28)
Tax-effected net income (loss) (3) .............. $ 0.85 $ 0.72 $ 0.56 $ 0.47 $ (0.26)
Cash dividends declared ......................... $ 0.29 $ 0.25 $ 0.19 $ 0.03 $ --
Average shares outstanding (000s) .................. 126,766 126,881 127,596 127,024 73,457
Dividend payout ratio .............................. 34.12% 24.51% 23.75% 5.00% -- %
- ------------------------------------------------------------------------------------------------------------------------------------
Selected year-end balances (in millions)
Loans .............................................. $ 6,043.0 $ 4,723.2 $ 3,818.9 $ 3,389.2 $ 3,362.7
Deposits ........................................... 7,821.8 6,569.7 6,344.3 6,134.2 6,031.1
Debt ............................................... 51.3 34.4 21.0 39.2 39.1
Equity ............................................. 936.4 767.8 637.7 594.6 506.8
Total assets ....................................... 9,306.8 7,755.7 7,294.5 7,119.0 6,970.9
- ------------------------------------------------------------------------------------------------------------------------------------
Selected average balances (in millions)
Loans .............................................. $ 5,295.1 $ 4,251.0 $ 3,561.0 $ 3,273.8 $ 3,932.5
Deposits ........................................... 6,892.5 6,374.2 6,192.7 5,979.7 6,360.7
Debt ............................................... 26.9 26.6 32.9 37.9 127.1
Equity ............................................. 814.8 694.5 615.9 547.2 345.6
Total assets ....................................... 8,200.6 7,480.0 7,179.2 6,882.8 7,261.8
- ------------------------------------------------------------------------------------------------------------------------------------
Selected ratios
Net interest margin (taxable-equivalent) ........... 4.89% 4.69% 4.59% 4.70% 4.50 %
Return on assets ................................... 1.34% 1.72% 1.41% 1.11% (0.28)%
Return on common equity ............................ 13.71% 18.56% 16.47% 13.92% (5.86)%
Return on total equity ............................. 13.49% 18.56% 16.47% 13.92% (5.86)%
Efficiency ratio ................................... 65.50% 65.84% 75.24% 77.34% 78.60 %
Average equity/average assets ...................... 9.94% 9.28% 8.58% 7.95% 4.76 %
Tier 1 risk-based capital ratio .................... 12.07% 14.66% 15.53% 14.91% 12.82 %
Total risk-based capital ratio ..................... 13.33% 15.93% 16.81% 16.20% 14.13 %
Leverage ratio ..................................... 8.78% 9.71% 8.92% 7.77% 6.69 %
- ------------------------------------------------------------------------------------------------------------------------------------
Tax-effected net income and ratios excluding
goodwill and core deposit intangible amortization
and balances (3) (4)
Net income (loss) applicable to common shareholders $ 114,061 $ 93,947 $ 93,289 $ 64,384 $ (13,067)
Net income (loss) per common share (2) ............. $ 0.90 $ 0.74 $ 0.73 $ 0.51 $ (0.18)
Return on assets ................................... 1.40% 1.26% 1.31% 0.94% (0.18)%
Return on common equity ............................ 15.69% 13.94% 16.15% 12.88% (4.45)%
Efficiency ratio ................................... 64.17% 65.12% 69.70% 76.06% 77.08 %
- ------------------------------------------------------------------------------------------------------------------------------------
- ----------
(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) Adjusted to reflect a 35% effective tax rate for years prior to 1996.
(4) Amortization and balances of core deposit intangibles are net of
applicable taxes. Goodwill amortization and balances are not tax
effected.
</TABLE>
<PAGE>
HIBERNIA CORPORATION
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, formerly Texarkana National Bank, collectively referred to as the
"Banks." To make certain comparisons more meaningful, net income and earnings
per common share for 1995 and prior years are adjusted on a pro forma,
tax-effected basis. Tax expense is assumed at an effective tax rate of 35%
rather than the lower- than-normal federal income tax rate actually incurred as
the Company recognized deferred tax benefits. 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. The Company completed four
mergers in 1995 and six in 1994, all of which were accounted for as poolings of
interests. All prior-year information has been restated to reflect the effect of
mergers accounted for as poolings of interests. For the two mergers in 1996
accounted for as purchase transactions, the financial information of those
institutions is combined with Hibernia as of and subsequent to consummation.
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 Five-Year
and Quarterly Consolidated Summary of Income and Selected Financial Data on
pages 26 and 45.
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 purchases are referred to as
the "purchased companies."
1996 Highlights:
Net income for 1996 totaled $110.0 million ($.85 per common share). For
1995, reported net income of $128.9 million ($1.02 per common share) would
have been $90.8 million ($.72 per common share) on a tax-effected basis.
Therefore, on a comparable basis, net income for 1996 increased 21% and
earnings per common share increased 18% from 1995.
Profitability, loans and core deposits continued to increase; asset quality
improved; and the Company's franchise was further enhanced by the completed
mergers and by investments in Hibernia's strategic improvement process -
Vision 2000.
Returns on assets (ROA) and total equity (ROE) were 1.34% and 13.49%,
respectively, in 1996, compared to 1.21% and 13.08% on a tax-effected basis
in 1995.
Loans grew 28% to $6.0 billion at December 31, 1996, with commercial loans
up 32%, small business banking loans up 25%, and consumer loans up 26% from
a year earlier.
Nonperforming loans declined 9% from $17.7 million at December 31, 1995 to
$16.0 million at December 31, 1996. The year-end 1996 reserve coverage of
nonperforming loans stood at 796% compared to 851% at the end of 1995.
Nonperforming assets declined 7% to $24.9 million from $26.8 million at
December 31, 1995. The nonperforming asset ratio declined to 0.41% at
December 31, 1996 compared to 0.57% at year-end 1995.
Net interest income increased $45.5 million in 1996 compared to 1995,
primarily due to a $1.0 billion increase in average loans. The shift in the
mix of earning assets to higher-yielding loans resulted in a 20 basis point
increase in the net interest margin to 4.89% for 1996.
Operating efficiency continued to improve. In 1996, the efficiency ratio
was 65.50%, compared to 65.84% in 1995 and 75.24% in 1994. Excluding the
impact of amortization of goodwill and core deposit intangibles, the
efficiency ratio in 1996 was 64.17% compared to 65.12% in 1995 and 69.70%
in 1994.
Cash dividends per common share for 1996 increased to $.29, 16% higher than
the 1995 cash dividend of $.25 per common share and 53% higher than the
1994 cash dividend of $.19 per common share. The dividend payout ratio for
1996, 1995 and 1994 was 34.12%, 24.51% and 23.75%, respectively.
The five institutions with which Hibernia completed mergers in 1996 had
combined assets of $1.6 billion and 48 offices. Since the beginning of
1994, Hibernia has completed mergers with 15 institutions with combined
assets of $3.4 billion and 112 offices.
Financial Condition
Earning Assets
Interest income from earning assets (including loans, securities and
short-term investments) is the Company's main source of income. Average earning
assets totaled $7.6 billion in 1996, compared to $7.0 billion in 1995 and $6.7
billion in 1994. Average earning assets increased $625.2 million in 1996 and
$278.2 million in 1995 due to the effect of the purchased companies in 1996 and
new loan growth, partially offset by decreases in total securities.
Loan demand, which has been strong since the second half of 1993,
continued to improve throughout 1996. The Company used the proceeds from
maturities of lower-yielding, earning assets and the growth in deposits to fund
the increase in loans. As a result of this shift of earning assets, loans as a
percentage of average earning assets increased to 69.6% in 1996, compared to
60.9% in 1995, and 53.1% in 1994. Total securities decreased to 28.0% of average
earning assets in 1996 from 37.3% in 1995 and 44.0% in 1994.
Total earning assets as of December 31, 1996 were $8.4 billion, up $1.2
billion from a year earlier due to a $1.3 billion (28%) increase in loans.
LOANS. The Company's lending activities are subject to both prudent
underwriting standards and liquidity considerations. Loans allow Hibernia to
meet customer credit needs, while at the same time achieving yields that are
generally higher than those available on alternative earning assets. Lending
relationships are one way Hibernia meets its goal of providing for all the
financial needs of its customers.
<TABLE>
<CAPTION>
- ---------------------------------------------------------------------------------------------------
TABLE 1 - COMPOSITION OF LOAN PORTFOLIO
- ---------------------------------------------------------------------------------------------------
December 31 ($ in millions) 1996 1995
- ---------------------------------------------------------------------------------------------------
Loans Percent Loans Percent
- ---------------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C>
Commercial:
Commercial and industrial .................. $ 865.9 14.3% $ 660.0 14.0%
Services industry .......................... 455.3 7.5 276.5 5.9
Real estate ................................ 419.1 6.9 353.3 7.5
Health care ................................ 227.3 3.8 166.4 3.5
Transportation, communications and utilities 182.4 3.0 184.1 3.9
Energy ..................................... 143.2 2.4 85.8 1.8
Other ...................................... 45.9 0.8 42.7 0.9
- ---------------------------------------------------------------------------------------------------
Total commercial ..................... 2,339.1 38.7 1,768.8 37.5
- ---------------------------------------------------------------------------------------------------
Small Business Banking:
Commercial and industrial .................. 601.7 10.0 489.5 10.3
Services industry .......................... 183.2 3.0 114.2 2.4
Real estate ................................ 118.9 2.0 103.0 2.2
Health care ................................ 54.7 0.9 33.8 0.7
Transportation, communications and utilities 24.3 0.4 13.6 0.3
Energy ..................................... 6.8 0.1 8.2 0.2
Other ...................................... 120.9 2.0 127.0 2.7
- ---------------------------------------------------------------------------------------------------
Total small business banking ......... 1,110.5 18.4 889.3 18.8
- ---------------------------------------------------------------------------------------------------
Consumer:
Residential mortgages:
First mortgages ........................ 1,082.2 17.9 830.4 17.6
Junior liens ........................... 121.2 2.0 78.4 1.6
Indirect ................................... 749.9 12.4 660.6 14.0
Revolving credit ........................... 144.4 2.4 89.3 1.9
Other ...................................... 495.7 8.2 406.4 8.6
- ---------------------------------------------------------------------------------------------------
Total consumer ....................... 2,593.4 42.9 2,065.1 43.7
- ---------------------------------------------------------------------------------------------------
Total loans .................................... $ 6,043.0 100.0% $ 4,723.2 100.0%
- ---------------------------------------------------------------------------------------------------
</TABLE>
Hibernia engages in commercial and consumer lending. The specific
underwriting criteria for each major loan category is outlined in a formal loan
policy and is approved by the Board of Directors. In general, each loan is
evaluated based on cash flow, collateral, market conditions, prevailing economic
trends, character and leverage capacity of the borrower, and capital and
investment in a particular property, if applicable. The loan policy, including
the underwriting criteria for major loan categories, is adjusted on a regular
basis. The loan policy and underwriting criteria are adjusted due to changes in
the experience of the existing portfolio, financial and market conditions, and
regulations, among other things.
Average loans increased $1.0 billion in 1996 and $0.7 billion in 1995 as
all segments experienced significant growth. The Company's efforts to achieve
its goal of becoming the best financial services provider in each of its markets
by building the most comprehensive and convenient banking network, and
delivering top-quality service across a broad range of financial products and
services enabled Hibernia to increase loans in an improving economy.
Table 1 details Hibernia's commercial and small business banking loans
classified by repayment source and consumer loans classified by type. Commercial
loans grew $570.3 million (32%), small business banking loans were up $221.2
million (25%) and consumer loans increased $528.3 million (26%) in 1996. The
growth from new and existing customers accounted for $965.9 million (73%) of the
overall growth in loans in 1996, with the remainder of the growth resulting from
the effects of the purchased companies. The portfolio mix was 42.9% consumer,
38.7% commercial and 18.4% small business banking at year-end 1996 compared to
43.7%, 37.5% and 18.8%, respectively, at year-end 1995. Hibernia's lending
strategy is to increase consumer and small business lending while maintaining
preeminence in commercial lending.
Commercial Loans. The purchased companies accounted for 25% of the growth
in commercial loans, with the remaining 75% resulting from new and existing
customers. The growth from new and existing customers was distributed among the
services industry, up $160.9 million (58%); commercial and industrial, up $142.3
million (22%); energy, up $55.0 million (64%); health care, up $45.6 million
(27%); and commercial real estate, up $31.0 million (9%).
Expertise in specialized industries including maritime, health care,
energy, commercial real estate and agriculture allowed Hibernia's experienced
team of lenders to increase the commercial portfolio in a growing regional
economy. The skills of lenders who have joined the Company through mergers
enabled Hibernia to more than double agriculture loans during 1996. In addition,
Hibernia has identified niches such as equipment leasing and asset-based
lending, where customer needs can be met efficiently and profitably.
Small Business Banking Loans. Hibernia generally categorizes companies
with revenues of less than $10 million as small businesses. In addition to
growth related to the purchased companies (approximately 50%), the small
business banking portfolio showed increases in the services industry, up $54.8
million, and commercial and industrial, up $34.4 million. Centralized
underwriting, utilization of sophisticated credit scoring models and Hibernia's
shortened application form, QuickApp, have made the underwriting process more
efficient. This allows the experienced business bankers located in each market
to concentrate on serving the credit and other financial needs of small- and
medium-sized business customers. One of the newest products that Hibernia's
business bankers can offer customers is the CapitalAccess(R) credit card for
small businesses, introduced in early 1996.
Consumer Loans. The increase in consumer loans to $2.6 billion at December
31, 1996, from $2.1 billion at December 31, 1995, resulted primarily from
internal growth of $410.7 million. Increased marketing efforts, new product
development and extended service hours, designed to maximize the effectiveness
of the Company's extensive office network, were the major factors in this
growth.
Loans secured by mortgages on residential property and indirect automobile
lending (primarily through dealerships) are the two largest components of the
consumer portfolio.
Residential mortgage loans increased $294.6 million (32%) in 1996.
Technology-driven enhancements helped streamline the mortgage origination
process, thereby improving customer service. Because of this improvement,
realtors recommended and homeowners increasingly chose Hibernia for mortgage
financing as evidenced by the 37% increase in origination of loans for the
purchase of homes to over a half-billion dollars. Contributing to the higher
service levels were innovations like Desktop Underwriter, a software system from
Fannie Mae, the nation's largest source of home mortgage funds; laptop computers
used by Hibernia's team of mortgage loan originators to take applications in the
field; and automated loan closings.
Approximately half of the 1996 mortgage loan originations were
adjustable-rate loans that Hibernia retained in its portfolio. The remaining
loans were securitized and sold, while Hibernia generally retained the
associated servicing rights. Hibernia services almost $2.0 billion in loans. In
addition to loans for the purchase of homes, Hibernia offers customers a broad
assortment of loans secured by residential mortgages, including the Equity
PrimeLine(R), an attractively priced line of credit secured by a homeowner's
residence.
Hibernia's experienced team of indirect lending professionals and
continued expansion of its banking office system have enabled the Company to
build the largest market share in indirect lending among banks in Louisiana.
Tiered pricing of indirect loans has enabled Hibernia to offer top-rated
customers attractive rates, while also allowing the Company to earn higher
returns on loans carrying slightly more risk. The indirect lending portfolio
ended 1996 at $749.9 million, a 14% increase over year-end 1995.
SECURITIES. At the end of 1996, securities totaled $2.2 billion, a
decrease of $171.5 million, or 7.3%, from the end of 1995. The decrease is
primarily due to a reduction in mortgage-backed securities as a result of
contractual payments, prepayments of principal and sales, partially offset by
the addition of the securities portfolios of the purchased companies. During
1996 Hibernia restructured its portfolio of securities available for sale to
enhance future interest income and improve an already strong net interest
margin. This restructuring resulted in the sale of almost $200 million of
adjustable-rate mortgage-backed securities and the purchase of a similar amount
of obligations of state and municipal governments and mortgage-backed
securities. Of total securities at December 31, 1996, 91% are debt securities of
the U.S. government or its agencies. The composition of the securities portfolio
is shown in Table 2.
On December 29, 1995, in accordance with the Financial Accounting
Standards Board Special Report "A Guide to Implementation of Statement 115 on
Accounting for Certain Investments in Debt and Equity Securities," the Company
chose to reclassify all of its securities held to maturity to the available for
sale portfolio. At the date of the transfer, the amortized cost of those
securities was $1.7 billion and net unrealized gains were $21.5 million. This
reclassification gives the Company greater flexibility in managing the portfolio
for income, interest-rate risk and liquidity. Although net unrealized gains or
losses in the available for sale portfolio are reflected as a separate component
of equity, these gains or losses are not included in regulatory capital for
purposes of computing capital adequacy ratios. It is anticipated that future
purchases of securities will be classified as available for sale.
The Company held no trading securities at December 31, 1996, and there was
no significant trading activity during 1996, 1995 or 1994.
Average securities available for sale increased $1.4 billion in 1996,
reflecting the transfer of securities from
<TABLE>
<CAPTION>
- --------------------------------------------------------------------------------
TABLE 2 - COMPOSITION OF SECURITIES
- --------------------------------------------------------------------------------
Available Held to
December 31 ($ in millions) for Sale Maturity Total
- --------------------------------------------------------------------------------
<S> <C> <C> <C>
1996
U.S. Treasuries ............. $ 365.2 $ -- $ 365.2
U.S. government agencies:
Mortgage-backed securities 1,294.3 -- 1,294.3
Other ................... 333.4 -- 333.4
States and political subdivisions 135.6 -- 135.6
Other ....................... 48.4 -- 48.4
Derivative financial instruments 1.8 -- 1.8
- --------------------------------------------------------------------------------
Total ................. $ 2,178.7 $ -- $ 2,178.7
- --------------------------------------------------------------------------------
1995
U.S. Treasuries ............. $ 356.5 $ -- $ 356.5
U.S. government agencies:
Mortgage-backed securities 1,587.8 -- 1,587.8
Other ................... 261.9 -- 261.9
States and political subdivisions 87.2 -- 87.2
Other ....................... 56.7 -- 56.7
Derivative financial instruments 0.1 -- 0.1
- --------------------------------------------------------------------------------
Total ................. $ 2,350.2 $ -- $ 2,350.2
- --------------------------------------------------------------------------------
1994
U.S. Treasuries ............. $ 28.8 $ 553.6 $ 582.4
U.S. government agencies:
Mortgage-backed securities 477.7 1,098.0 1,575.7
Other ................... 167.2 198.6 365.8
States and political subdivisions 36.6 54.0 90.6
Other ....................... 67.7 -- 67.7
Derivative financial instruments 5.1 -- 5.1
- --------------------------------------------------------------------------------
Total ................. $ 783.1 $ 1,904.2 $ 2,687.3
- --------------------------------------------------------------------------------
</TABLE>
<TABLE>
<CAPTION>
- ---------------------------------------------------------------------------------------------------------------------------------
TABLE 3 - MATURITIES AND YIELDS OF SECURITIES
- ---------------------------------------------------------------------------------------------------------------------------------
Due after 1 Due after 5
Due in 1 year year through years through Due after
December 31, 1996 ($ in millions) or less 5 years 10 years 10 years Total
- ---------------------------------------------------------------------------------------------------------------------------------
Amount Yield Amount Yield Amount Yield Amount Yield Amount Yield
- ---------------------------------------------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C> <C> <C> <C> <C> <C> <C> <C>
Available for sale: (1)
U.S. Treasuries .................. $ 98.0 5.71% $267.2 7.05% $ -- -- % $ -- -- % $ 365.2 6.69%
- ---------------------------------------------------------------------------------------------------------------------------------
U.S. government agencies:
Mortgage-backed securities (2) 7.9 6.37 70.4 7.21 117.8 7.41 1,098.2 6.84 1,294.3 6.91
- ---------------------------------------------------------------------------------------------------------------------------------
Other ........................ 51.1 5.50 169.1 6.07 60.2 6.96 53.0 6.25 333.4 6.17
- ---------------------------------------------------------------------------------------------------------------------------------
States and political subdivisions 4.2 5.36 25.4 5.14 44.9 5.19 61.1 5.56 135.6 5.35
- ---------------------------------------------------------------------------------------------------------------------------------
Other ............................ 44.1 3.95 6.1 6.00 -- -- -- -- 50.2 4.20
- ---------------------------------------------------------------------------------------------------------------------------------
Total ...................... $205.3 5.30% $538.2 6.66% $222.9 6.84% $1,212.3 6.75% $2,178.7 6.60%
- ---------------------------------------------------------------------------------------------------------------------------------
- ----------------
(1) Yield computations are based on the market value of securities available
for sale.
(2) Mortgage-backed securities are classified according to contractual maturity
without consideration of principal amortization or projected prepayments.
</TABLE>
held to maturity and the addition of the securities available for sale
attributable to the purchased companies, partially offset by the decrease in
mortgage-backed securities previously described. Average securities held to
maturity decreased $1.8 billion from 1995 to 1996 due to the transfer of
securities to available for sale.
Maturities and yields of securities at year-end 1996 are detailed in Table
3. Mortgage-backed securities are classified according to contractual maturity
without consideration of principal amortization or projected prepayments.
At December 31, 1996, the available for sale portfolio included $484.2
million of adjustable-rate securities, primarily mortgage-backed securities
whose yields are tied to a cost-of-funds index. In much the same manner as
Hibernia's cost of funds adjusts to new market rates over a period of time, the
rates on these securities may not fully reflect a change in market interest
rates for more than a year. The Company purchased these adjustable-rate
securities to shorten the average repricing period of its portfolio as part of
its continuing strategy to reduce interest rate risk.
The average repricing period of total securities at December 31, 1996 was
2.7 years, compared to 3.2 years at December 31, 1995. The repricing period
decreased due to increased prepayment speeds for the Company's fixed-rate
mortgage-backed securities, which account for over one-third of the securities
available for sale. Carrying securities available for sale at market value has
the effect of recognizing a yield on the securities equal to the current market
yield.
Asset Quality
Nonperforming assets consist of nonaccrual loans (loans on which interest
income is not currently recognized), restructured loans (loans with below-market
interest rates or other concessions due to the deteriorated financial condition
of the borrower), foreclosed assets (assets to which title has been assumed in
satisfaction of debt) and excess bank-owned property. Interest payments received
on nonperforming loans are applied to reduce principal if there is doubt as to
the collectibility of the principal; otherwise, these receipts are recorded as
interest income. Certain nonperforming
<TABLE>
<CAPTION>
- --------------------------------------------------------------------------------------------------------------
TABLE 4 - NONPERFORMING ASSETS
- --------------------------------------------------------------------------------------------------------------
December 31 ($ in thousands) 1996 1995 1994 1993 1992
- --------------------------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C> <C>
Nonaccrual loans ...................... $ 16,043 $ 17,692 $ 22,210 $ 92,953 $184,468
Restructured loans .................... -- -- 6,024 3,348 4,426
- --------------------------------------------------------------------------------------------------------------
Nonperforming loans ............... 16,043 17,692 28,234 96,301 188,894
Foreclosed assets ..................... 5,206 6,114 10,479 18,895 45,984
Excess bank-owned property ............ 3,670 2,946 -- -- 142
- --------------------------------------------------------------------------------------------------------------
Total nonperforming assets ........ $ 24,919 $ 26,752 $ 38,713 $115,196 $235,020
- --------------------------------------------------------------------------------------------------------------
Accruing loans past due 90 days or more $ 5,281 $ 2,922 $ 4,403 $ 5,031 $ 9,747
Reserve for possible loan losses ...... $127,768 $150,516 $156,005 $186,562 $211,820
Nonperforming assets/loans plus
foreclosed assets and excess
bank-owned property ............... 0.41% 0.57% 1.01% 3.38% 6.89%
Reserve for possible loan losses/loans 2.11% 3.19% 4.09% 5.50% 6.30%
Reserve for possible loan losses/
nonperforming loans ............... 796.4% 850.8% 552.5% 193.7% 112.1%
Net loans charged off/average loans ... 0.30% 0.16% 0.36% 0.70% 2.04%
- --------------------------------------------------------------------------------------------------------------
</TABLE>
<TABLE>
<CAPTION>
- ---------------------------------------------------------------------------------------------------------------
TABLE 5 - SUMMARY OF NONPERFORMING LOAN ACTIVITY
- ---------------------------------------------------------------------------------------------------------------
Small
Commercial Other Business
($ in thousands) Real Estate Commercial Banking Consumer Total
- ---------------------------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C> <C>
Nonperforming loans at December 31, 1995 $ 7,961 $ 2,195 $ 5,685 $ 1,851 $ 17,692
Additions .............................. 138 10,848 13,709 8,331 33,026
Charge-offs - gross .................... (133) (2,804) (3,790) (7,077) (13,804)
Transfers to foreclosed assets ......... (134) (316) (528) (43) (1,021)
Returned to performing status .......... (165) (391) (728) (163) (1,447)
Sales .................................. (1,192) (5,847) (36) -- (7,075)
Payments ............................... (4,165) (1,844) (4,893) (426) (11,328)
- ---------------------------------------------------------------------------------------------------------------
Nonperforming loans at December 31, 1996 $ 2,310 $ 1,841 $ 9,419 $ 2,473 $ 16,043
- ---------------------------------------------------------------------------------------------------------------
</TABLE>
loans are current as to principal and interest payments but are classified as
nonperforming because there is a question concerning full collectibility of both
principal and interest.
Nonperforming assets totaled $24.9 million at year-end 1996, a $1.8
million (7%) decrease from the prior year. Nonperforming assets totaling $26.8
million at December 31, 1995 were down $12.0 million (31%) from December 31,
1994. The composition of nonperforming assets and certain key asset quality
ratios for the past five years are illustrated in Table 4.
Table 5 details nonperforming loan activity during 1996 by loan type
(commercial real estate, other commercial, small business banking and consumer).
Payments, sales and loans returned to performing status accounted for a $19.9
million reduction in nonperforming loans. Charge-offs of nonperforming loans and
transfers to foreclosed assets totaled $14.8 million, while $33.0 million in
loans were transferred to nonperforming status in 1996.
In addition to the nonperforming loans discussed above, there are $29.8
million of commercial loans which, in management's opinion, are subject to
potential future classification as nonperforming. Most of this amount is due to
one large commercial customer who has an agreement to sell the business to a
third party. It is not anticipated that the Company will incur a significant
loss associated with this customer.
Foreclosed assets and excess bank-owned property, which are recorded at
fair value less estimated selling cost, totaled $8.9 million at year-end 1996,
$9.1 million at year-end 1995 and $10.5 million at year-end 1994. Improvements
in commercial real estate and general economic conditions, which allowed for
favorable dispositions, were the primary factors in the declines.
As of January 1, 1995, the Company adopted Statement of Financial
Accounting Standards (SFAS) No. 114, "Accounting for Impairment of a Loan,"
which, as it relates to in-substance foreclosures, requires that a creditor
continue to follow loan classification on the balance sheet unless the creditor
receives physical possession of the collateral. Accordingly, upon adoption, $7.1
million of in-substance foreclosures were transferred from foreclosed property
to nonperforming loans, and related loss reserves of $0.2 million were
transferred to the reserve for possible loan losses. The Company reclassified
in-substance foreclosures and the related loss reserves for all periods to
conform to the new classification requirements. At December 31, 1996, the
recorded investment in loans that were considered to be impaired under SFAS No.
114 was $14.3 million with the related reserve for possible loan losses of $1.5
million. These loans are included in nonaccrual loans in Table 4.
One measure of asset quality is the level of nonperforming assets
compared to total loans plus foreclosed assets and excess bank-owned property
(nonperforming asset ratio). At year-end 1996, the Company's nonperforming asset
ratio was 0.41%, compared to 0.57% at year-end 1995 and 1.01% at year-end 1994.
Another measure of asset quality is the amount of net charge-offs during the
year compared to average loans. As illustrated in Table 6, net charge-offs in
1996 totaled $15.7 million, a $9.1 million increase from $6.6 million in 1995
and a $3.0 million increase from $12.7 million in 1994. Net charge-offs as a
percentage of average loans were 0.30% in 1996, 0.16% in 1995 and 0.36% in 1994.
The level of accruing, delinquent loans (over 30 days past due) as a
percentage of total loans was 1.2% at December 31, 1996 compared to 1.1% at
year-end 1995 and 0.9% at year-end 1994. The commercial loan delinquency ratio
increased in 1996 from 0.2% to 0.8%, primarily due to the one large potential
nonperforming loan discussed previously. The small business banking loan
delinquency ratio was unchanged at 1.3%, and the consumer loan delinquency ratio
decreased from 1.7% to 1.6%.
Although the net charge-off and delinquency ratios have risen, the
increases are indicative of the size and growth rate of the loan portfolio and
are not necessarily indicative of a significant increase in risk.
Reserve and Provision for Possible Loan Losses
The reserve for possible loan losses is composed of specific reserves
(assessed for each loan that is impaired or for which a probable loss has been
identified), general reserves and an unallocated reserve. Management
continuously evaluates the reserve to ensure the level is adequate to absorb
loan losses inherent in the loan portfolio. Reserves on impaired loans are based
on discounted cash flows using the loan's initial effective interest rate or the
fair value of the collateral for certain collateral-dependent loans. Factors
contributing to the determination of specific reserves include the financial
condition of the borrower, changes in the value of pledged collateral and
general economic conditions. General reserves are established based on
historical loss experience and trends in delinquencies and nonaccrual loans. The
unallocated reserve serves to compensate generally for the uncertainty in
estimating loan losses, including the possibility of changes in risk ratings of
loans and in specific reserve allocations.
The provision for possible loan losses (a component of earnings) is the
means by which the reserve for possible loan losses is adjusted to establish a
reserve level considered adequate by management to absorb future potential loan
losses.
The Board of Directors reviews the adequacy of the reserve each quarter. As
a result of continued asset quality improvement and strong reserve coverage, a
$12.6 million negative provision was recorded in 1996. In 1995 a $1.1 million
provision was recorded by the pooled companies, and in 1994 a negative provision
of $17.9 million was recorded.
<TABLE>
<CAPTION>
- --------------------------------------------------------------------------------
TABLE 6 - LOAN LOSS RESERVE ACTIVITY
- --------------------------------------------------------------------------------
Year Ended December 31
($ in thousands) ................... 1996 1995 1994
- --------------------------------------------------------------------------------
<S> <C> <C> <C>
Balance at beginning
of year .......................... $ 150,516 $ 156,005 $ 186,562
Loans charged off ................ (34,875) (24,985) (31,520)
Recoveries ....................... 19,141 18,356 18,832
- --------------------------------------------------------------------------------
Net loans
charged off ...................... (15,734) (6,629) (12,688)
- --------------------------------------------------------------------------------
Provision for possible
loan losses ...................... (12,625) 1,140 (17,869)
Addition due to
purchased
companies ........................ 5,611 -- --
- --------------------------------------------------------------------------------
Balance at end
of year .......................... $ 127,768 $ 150,516 $ 156,005
- --------------------------------------------------------------------------------
</TABLE>
The year-end 1996 reserve of $127.8 million provided 796.4% coverage of
nonperforming loans compared to $150.5 million with 850.8% coverage at year-end
1995 and $156.0 million with 552.5% coverage at year-end 1994. As a percentage
of total loans, the reserve for loan losses amounted to 2.11% at December 31,
1996, compared to 3.19% and 4.09% at year-end 1995 and 1994, respectively. Even
though the reserve for loan losses has declined over the last four years, in
total and as a percentage of loans, the present level is considered adequate to
absorb future potential loan losses. Because factors such as loan growth, the
future collectibility of loans and the amounts and timing of future cash flows
expected to be received on impaired loans are uncertain, the level of future
provisions (positive or negative), if any, cannot be predicted.
An allocation of the December 31, 1996, reserve is presented in Table 7.
<TABLE>
<CAPTION>
- -------------------------------------------------------
TABLE 7 - ALLOCATION OF RESERVE
FOR POSSIBLE LOAN LOSSES
- -------------------------------------------------------
Reserve for % of
December 31, 1996 Possible Total
($ in millions) Loan Losses Reserve
- -------------------------------------------------------
<S> <C> <C>
Commercial real estate loans $ 5.5 4.3%
Other commercial loans ..... 19.2 15.0
Small business banking loans 9.6 7.5
Consumer loans ............. 61.8 48.4
Unallocated reserve ........ 31.7 24.8
- -------------------------------------------------------
Total .................. $ 127.8 100.0%
- -------------------------------------------------------
</TABLE>
Funding Sources:
Deposits and Borrowings
DEPOSITS. Deposits are the Company's primary source of funding for its
earning assets. Hibernia offers a variety of products designed to attract and
retain customers, with the primary focus on core deposits.
Average deposits totaled $6.9 billion in 1996, a $518.3 million (8.1%)
increase from 1995. Half of this increase was internally generated with the
remainder due to the purchased companies. Average core deposits were up $287.0
million to $5.7 billion or 82.7% of total deposits. Total deposits at year-end
1996 were $7.8 billion, up $1.3 billion from year-end 1995.
<TABLE>
<CAPTION>
- ------------------------------------------------------
TABLE 8 - AVERAGE DEPOSIT RATES
- ------------------------------------------------------
1996 1995 1994
- ------------------------------------------------------
<S> <C> <C> <C>
NOW accounts ............. 2.87% 2.20% 1.78%
Money market
deposit accounts ....... 2.36 2.65 2.50
Savings accounts ......... 2.11 2.19 2.13
Other consumer
time deposits .......... 5.51 5.64 4.35
Public fund certificates
of deposits of
$100,000 or more ....... 5.40 5.91 4.19
Certificates of deposit
of $100,000 or more .... 5.13 4.87 3.81
Foreign time deposits .... 5.41 5.75 4.65
- ------------------------------------------------------
Total interest-bearing
deposits ........... 4.28% 4.33% 3.34%
- ------------------------------------------------------
</TABLE>
NOW account average balances were down $327.4 million, and money market
deposit accounts were up $321.7 million in 1996 compared to 1995. During the
fourth quarter of 1995, Hibernia instituted a new product, the Reserve Money
Manager account, in which each NOW account is joined with a money market
account. As needed, funds are moved from the money market account to cover items
presented for payment to the customer's NOW account up to a maximum of six
transfers per statement cycle. The effect of the Reserve Money Manager account
on average balances was $533.5 million in 1996 and $103.5 million in 1995
(reducing NOW account average balances and increasing money market deposit
account average balances).
Net of this effect, NOW account average balances were up $102.6 million
(14%), and money market deposit account average balances were down $108.3
million (10%). Internal growth accounted for approximately half of the increase
in average NOW accounts with the remainder due to the purchased companies. Money
market deposit accounts declined because the rate paid on these accounts was
less attractive than those of other investment products, including other
Hibernia deposits.
Other consumer time deposits increased $186.5 million (9%), with less
than a third of the increase coming from the purchased companies. New deposit
products successfully introduced during 1996, such as the Celebration CD and
7-day CD, with an attractive rate and short maturity, were the major factors in
the increase in other consumer time deposits.
Average noncore deposits increased $231.3 million (24%) in 1996 compared
to the prior year. Public fund certificates of deposit increased $154.0 million
(22%), and other large-denomination certificates of deposit increased $70.6
million (34%). These increases were primarily due to internal growth. The
increase in public fund deposits is due, in part, to greater access in new
markets (through mergers) to public agency funds as well as increases in funds
from existing relationships.
<TABLE>
<CAPTION>
- ------------------------------------------------------------------------------------------------------------
TABLE 9 - DEPOSIT COMPOSITION
- ------------------------------------------------------------------------------------------------------------
1996 1995 1994
- ------------------------------------------------------------------------------------------------------------
Average % of Average % of Average % of
($ in millions) Balances Deposits Balances Deposits Balances Deposits
- ------------------------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C> <C> <C>
Demand, noninterest-bearing ... $ 1,228.7 17.8% $ 1,139.6 17.9% $ 1,106.4 17.9%
NOW accounts .................. 305.4 4.4 632.8 9.9 712.2 11.5
Money market deposit accounts . 1,468.1 21.3 1,146.4 18.0 1,202.6 19.4
Savings accounts .............. 386.1 5.6 369.0 5.8 399.3 6.5
Other consumer time deposits .. 2,315.0 33.6 2,128.5 33.4 1,891.2 30.5
- ------------------------------------------------------------------------------------------------------------
Total core deposits ... 5,703.3 82.7 5,416.3 85.0 5,311.7 85.8
- ------------------------------------------------------------------------------------------------------------
Public fund certificates of
deposit of $100,000 or more 868.2 12.6 714.2 11.2 650.3 10.5
Certificates of deposit of
$100,000 or more .......... 279.2 4.1 208.6 3.3 213.6 3.4
Foreign time deposits ......... 41.8 0.6 35.1 0.5 17.1 0.3
- ------------------------------------------------------------------------------------------------------------
Total deposits ........ $ 6,892.5 100.0% $ 6,374.2 100.0% $ 6,192.7 100.0%
- ------------------------------------------------------------------------------------------------------------
</TABLE>
BORROWINGS. Average borrowings - which include federal funds purchased,
securities sold under agreements to repurchase (repurchase agreements) and debt
increased $61.3 million (21%) to $347.6 million in 1996 compared to 1995. The
increase results primarily from growth in repurchase agreements related to new
treasury management products which "sweep" funds from customers' deposit
accounts. Fluctuations in short-term borrowings can also stem from differences
in the timing of the expansion of lending opportunities and the growth of other
funding sources (deposits and proceeds from maturing securities).
The Company's debt at December 31, 1996, which totaled $51.3 million, is
comprised primarily of advances from the Federal Home Loan Bank of Dallas.
Interest Rate Sensitivity
Interest rate risk is the potential impact of changes in interest rates on
net interest income and results from mismatches in repricing opportunities of
assets and liabilities over a period of time. The Company uses simulation models
to estimate the effects of changing interest rates and various balance sheet
strategies on the level of net interest income. Management may alter the mix of
floating- and fixed-rate assets and liabilities, change pricing schedules,
adjust maturities through sales and purchases of securities available for sale
and enter into derivative contracts as a means of limiting interest rate risk to
an acceptable level. Table 10 presents Hibernia's interest rate sensitivity
position at December 31, 1996.
This profile, usually referred to as a Gap analysis, is based on a point
in time and may not be meaningful because assets and liabilities must be
categorized according to contractual maturities and repricing periods rather
than estimating these characteristics, as is done in simulation models. Also,
the Gap analysis does not consider subsequent changes in interest rate levels or
spreads between asset and liability categories.
Although Table 10 indicates that the Company is liability-sensitive
(interest-bearing liabilities exceed earning assets) up to one year, this may
not be true in practice. The 1-30 day deposit category includes NOW, money
market and savings accounts which have indeterminate maturities. The rates paid
on these core deposits, which account for almost 36% of interest-bearing funds,
do not necessarily reprice in a direct relationship to changes in interest
rates. In addition, one of Hibernia's deposit products is the consumer One Way
CDSM, which gives the customer a one-time opportunity to adjust the rate on a
certificate of deposit during its two-year term. As of December 31, 1996, these
deposits totaled over $600 million, of which approximately $100 million had been
repriced. Of the remaining $500 million, approximately $450 million are included
in the 1-30 day deposit category because these certificates may reprice at any
time. However, these deposits adjust to market rates over a much longer period
as individual depositors choose when to exercise the option to adjust the rate
on their deposits.
<TABLE>
<CAPTION>
- ------------------------------------------------------------------------------------------------------------------------------------
TABLE 10 - INTEREST RATE SENSITIVITY AND GAP ANALYSIS
- ------------------------------------------------------------------------------------------------------------------------------------
Over 5 Years
December 31, 1996 1-30 31-60 61-90 91-365 1 Year - and Non-
($ in thousands) Days Days Days Days 5 Years Sensitive Total
- ------------------------------------------------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C> <C> <C> <C>
Earning assets:
Loans ......................... $2,195,810 $ 78,059 $ 80,108 $ 712,272 $2,615,595 $ 361,184 $6,043,028
Securities available for sale . 2,178,674 -- -- -- -- -- 2,178,674
Other earning assets .......... 158,000 -- -- 293 -- -- 158,293
- ------------------------------------------------------------------------------------------------------------------------------------
Total earning assets ...... 4,532,484 78,059 80,108 712,565 2,615,595 361,184 8,379,995
- ------------------------------------------------------------------------------------------------------------------------------------
Funding sources:
NOW accounts .................. 472,424 -- -- -- -- -- 472,424
Money market deposit accounts . 1,487,250 -- -- -- -- -- 1,487,250
Savings accounts .............. 437,249 -- -- -- -- -- 437,249
Other interest-bearing deposits 1,711,647 298,301 264,777 1,105,945 388,651 114,642 3,883,963
Short-term borrowings ......... 331,796 -- -- -- -- -- 331,796
Long-term debt ................ -- -- 42,202 99 54 8,994 51,349
Noninterest-bearing sources ... -- -- -- -- -- 1,715,964 1,715,964
- ------------------------------------------------------------------------------------------------------------------------------------
Total funding sources ..... 4,440,366 298,301 306,979 1,106,044 388,705 1,839,600 8,379,995
- ------------------------------------------------------------------------------------------------------------------------------------
Repricing/maturity gap:
Period ........................ $ 92,118 $(220,242) $(226,871) $ (393,479) $2,226,890 $(1,478,416) $ --
Cumulative .................... $ 92,118 $(128,124) $(354,995) $ (748,474) $1,478,416 $ -- $ --
- ------------------------------------------------------------------------------------------------------------------------------------
Gap/total earning assets:
Period ........................ 1.1% (2.6)% (2.7)% (4.7)% 26.6% (17.6)%
Cumulative .................... 1.1% (1.5)% (4.2)% (8.9)% 17.6%
- ------------------------------------------------------------------------------------------------------------------------------------
</TABLE>
In addition to core deposits, which serve to lessen the volatility of net
interest income in changing rate conditions, the Company's loan and security
portfolios contain fixed-rate mortgage loans and mortgage-backed securities that
have actual maturities and cash flows that vary with the level of interest
rates. These earning assets are reported in the over 5 years and non-sensitive
category, when in fact a portion of these balances may be subject to repricing
within one year or less. Depending on market interest rates, actual cash flows
from these instruments will vary from the contractual maturities due to payoffs
and refinancing activity.
On a limited basis, Hibernia uses derivative financial instruments to
manage interest rate exposure. These agreements involve the risk of dealing with
counterparties and their ability to meet contractual terms. These counterparties
must receive appropriate credit approval before the Company enters into an
interest rate contract. Notional principal amounts express the volume of these
transactions, although the amounts potentially subject to credit and market risk
are much smaller.
Derivative financial instruments - including interest rate swaps, caps,
floors and options - 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. At December 31, 1996, the notional
value of these derivatives was $176.0 million compared to a notional value of
$478.5 million at December 31, 1995. The fair value of these derivatives of $1.8
million and $0.1 million at December 31, 1996 and 1995, respectively, is
included in the securities available for sale portfolio.
Derivative financial instruments are also held or issued by the Company
for trading purposes to provide Hibernia customers the ability to manage their
own interest rate sensitivity. In general, matched trading positions are
established to minimize risk to the Company. The notional value of derivative
financial instruments held for trading totaled $209.9 million at year-end 1996,
$318.9 million at year-end 1995 and $358.8 million at year-end 1994. Hibernia's
credit exposure related to derivative financial instruments held for trading
totaled $0.9 million at December 31, 1996 and $0.1 million at December 31, 1995.
Net Interest Margin
The net interest margin is taxable-equivalent net interest income as a
percentage of average earning assets. Net interest income is the difference
between total interest and fee income generated by earning assets and total
interest expense incurred on interest-bearing liabilities and is affected by
the:
o volume, yield and mix of earning assets;
o level of nonperforming loans;
o volume, yield and mix of interest-bearing
liabilities;
o amount of noninterest-bearing liabilities
supporting earning assets; and
o interest rate environment.
<TABLE>
<CAPTION>
- --------------------------------------------------------------------------------------------------------------
TABLE 11 - NET INTEREST MARGIN (taxable-equivalent)
- --------------------------------------------------------------------------------------------------------------
1996 1995 1994 1993 1992
- --------------------------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C> <C>
Yield on earning assets ........................... 8.30% 8.15% 7.26% 7.21% 7.96%
Rate on interest-bearing liabilities .............. 4.32 4.38 3.38 3.15 4.02
- --------------------------------------------------------------------------------------------------------------
Net interest spread ........................... 3.98 3.77 3.88 4.06 3.94
Contribution of noninterest-bearing funds ......... 0.91 0.92 0.71 0.64 0.56
- --------------------------------------------------------------------------------------------------------------
Net interest margin ........................... 4.89% 4.69% 4.59% 4.70% 4.50%
- --------------------------------------------------------------------------------------------------------------
Noninterest-bearing funds supporting earning assets 21.01% 20.96% 21.06% 20.15% 14.18%
- --------------------------------------------------------------------------------------------------------------
</TABLE>
The net interest margin is composed of the net interest spread, which
measures the difference between the average yield on earning assets and the
average rate paid on interest-bearing liabilities, and the contribution of
noninterest-bearing funds, which measures the effect of noninterest-bearing
funds (primarily demand deposits and shareholders' equity) on net interest
income. In general, the higher the ratio of noninterest-bearing funds supporting
earning assets, the higher the net interest margin. Hibernia's
noninterest-bearing funds ratio was 21.01% in 1996, compared to 20.96% in 1995
and 21.06% in 1994. Table 11 details the components of the net interest margin
for the past five years.
The net interest margin of 4.89% in 1996 compares to 4.69% in 1995 and
4.59% in 1994. The change in the mix of earning assets to proportionately more
loans with comparatively higher yields than other earning assets - contributed
to the increase in the net interest margin. In 1996, loans amounted to 69.6% of
average earning assets compared to 60.9% in 1995. In addition to the favorable
effect of the change in the mix, total funding costs decreased by 6 basis points
as deposit costs decreased 5 basis points and other interest-bearing liabilities
decreased 54 basis points.
The 10 basis point increase in the net interest margin from 1994 to 1995
was also due to the change in the mix of earning assets. In the rising interest
rate environment, the positive impact of higher yields on earning assets and the
increased value of Hibernia's noninterest-bearing funds resulted in a higher net
interest margin. These increases were mostly offset by similarly rising funding
costs.
Results of Operations:
The Company earned $110.0 million, or $.85 per common share, in 1996. In
1995, fully tax-effected net income was $90.8 million, or $.72 per common share.
Fully tax-effected net income in 1994 was $71.0 million, or $.56 per common
share.
Operating results improved in 1996 because of a $45.0 million increase in
taxable-equivalent net interest income resulting from an improved net interest
margin and higher earning assets, an $11.7 million increase in noninterest
income (excluding securities transactions) and a $12.6 million negative
provision for possible loan losses in 1996 compared to a $1.1 million provision
in 1995. These favorable effects were partially offset by securities losses
totaling $5.3 million in 1996 and a $35.7 million increase in noninterest
expense. Expenses related to the purchased companies and Vision 2000, Hibernia's
strategic improvement process, as well as nonrecurring expenses were the primary
factors for the increase in noninterest expense.
The improvement in 1995 from 1994 was due to a $19.7 million increase in
taxable-equivalent net interest income, an $11.0 million improvement in
noninterest income and an $18.8 million decrease in noninterest expense.
Partially offsetting these favorable effects, 1994 results benefited from a
$17.9 million negative loan loss provision, compared to a $1.1 million provision
recorded in 1995.
Net Interest Income
Net interest income on a taxable-equivalent basis increased $45.0 million,
or 13.7%, to $372.5 million in 1996 from $327.5 million in 1995.
Taxable-equivalent net interest income in 1994 was $307.8 million.
Taxable-equivalent net interest income increased in 1996 over 1995 and in
1995 over 1994 primarily as a result of the change in the mix and the growth in
earning assets.
As indicated in Table 13, the change in volumes raised taxable-equivalent
net interest income in 1996 by $45.3 million compared to 1995. A $95.0 million
increase in taxable-equivalent interest income due to the growth in loans was
partially offset by a decrease in taxable-equivalent interest income related to
securities. In addition, interest expense increased due to the growth in
interest-bearing liabilities. There was virtually no change in
taxable-equivalent net interest income
<TABLE>
<CAPTION>
- -------------------------------------------------------------------------------------------
TABLE 12 - INTEREST-EARNING ASSET COMPOSITION
- -------------------------------------------------------------------------------------------
(Percentage of average balances) 1996 1995 1994 1993 1992
- -------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C> <C>
Loans .......................... 69.6% 60.9% 53.1% 50.8% 58.9%
Securities available for sale .. 28.0 11.0 14.0 14.1 12.4
Securities held to maturity .... - 26.3 30.0 29.4 20.7
- -------------------------------------------------------------------------------------------
Total securities ............ 28.0 37.3 44.0 43.5 33.1
- -------------------------------------------------------------------------------------------
Short-term investments ......... 2.4 1.8 2.9 5.7 8.0
- -------------------------------------------------------------------------------------------
Total interest-earning assets 100.0% 100.0% 100.0% 100.0% 100.0%
- -------------------------------------------------------------------------------------------
</TABLE>
<TABLE>
<CAPTION>
- -----------------------------------------------------------------------------------------------------------------------------
TABLE 13 - CHANGES IN TAXABLE-EQUIVALENT NET INTEREST INCOME (1)
- -----------------------------------------------------------------------------------------------------------------------------
1996 Compared to 1995 1995 Compared to 1994
------------------------------------ -------------------------------------
- -----------------------------------------------------------------------------------------------------------------------------
Increase (Decrease) Due to Change In:
- -----------------------------------------------------------------------------------------------------------------------------
($ in thousan ds) Volume Rate Total Volume Rate Total
- -----------------------------------------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C> <C> <C>
Taxable-equivalent interest earned on:
Loans ............................ $ 95,005 $(7,720) $ 87,285 $ 63,114 $ 19,078 $ 82,192
Securities available for sale .... 90,277 (20) 90,257 (10,677) 7,292 (3,385)
Securities held to maturity ...... (117,670) -- (117,670) (9,996) 14,766 4,770
Short-term investments ........... 3,090 (678) 2,412 (3,449) 2,876 (573)
- -----------------------------------------------------------------------------------------------------------------------------
Total ........................ 70,702 (8,418) 62,284 38,992 44,012 83,004
- -----------------------------------------------------------------------------------------------------------------------------
Interest paid on:
NOW accounts ..................... (8,581) 3,436 (5,145) (1,520) 2,760 1,240
Money market deposit accounts .... 7,856 (3,489) 4,367 (1,441) 1,710 269
Savings accounts ................. 368 (298) 70 (660) 259 (401)
Other consumer time deposits ..... 10,319 (2,820) 7,499 11,227 26,528 37,755
Public fund certificates of
deposit of $100,000 or more .. 8,538 (3,848) 4,690 2,893 12,028 14,921
Certificates of deposit
of $100,000 or more .......... 3,602 575 4,177 (197) 2,225 2,028
Foreign deposits ................. 370 (127) 243 998 226 1,224
Federal funds purchased .......... (273) (317) (590) 744 834 1,578
Repurchase agreements ............ 3,177 (1,090) 2,087 2,951 3,037 5,988
Long-term debt ................... 14 (91) (77) (496) (845) (1,341)
- -----------------------------------------------------------------------------------------------------------------------------
Total ........................ 25,390 (8,069) 17,321 14,499 48,762 63,261
- -----------------------------------------------------------------------------------------------------------------------------
Taxable-equivalent
net interest income .............. $ 45,312 $ (349) $ 44,963 $ 24,493 $ (4,750) $ 19,743
- -----------------------------------------------------------------------------------------------------------------------------
- ----------------
(1) Change due to mix (both rate and volume) has been allocated to volume and
rate changes in proportion to the relationship of the absolute dollar
amounts to the changes in each.
</TABLE>
attributable to interest rates as the decrease in yields (primarily loans) was
offset by lower rates paid on interest-bearing funds.
For 1995 compared to 1994, the change in net volumes raised
taxable-equivalent net interest income by $24.5 million, with the growth in
loans adding $63.1 million to taxable-equivalent interest income. The net change
attributable to interest rates lowered taxable-equivalent net interest income by
$4.8 million.
Noninterest Income
Service charges on deposits, trust fees, mortgage loan servicing fees,
retail investment service fees and income generated from the operation of
automated teller machines (ATMs) were the largest contributors to noninterest
income in 1996. Noninterest income totaled $110.4 million in 1996, compared to
$104.2 million in 1995 and $93.2 million in 1994. Excluding securities
transactions, noninterest income was up $11.7 million (11%) in 1996 compared to
1995.
Nonrecurring items in both 1996 and 1995 distort comparisons from year to
year. In 1996, nonrecurring items include a $1.4 million gain on the settlement
of an acquired loan and a $0.5 million gain related to the sale of Hibernia's
municipal bond administration business. The nonrecurring items in 1995 include:
a $2.4 million gain related to the divestiture of three banking offices in
Northwest Louisiana in connection with Hibernia's merger with Pioneer Bancshares
Corporation; a $0.6 million fee to amend the terms of a large commercial credit;
and gains to record the sales of the Company's student loan portfolio and
municipal bond administration business totaling $1.8 million and $1.6 million,
respectively.
Net of the nonrecurring items and securities transactions, noninterest
income was up $16.2 million (17%), with less than 20% of the increase resulting
from income related to the purchased companies. The major categories
contributing to the increases in noninterest income were increases in service
charges on deposits, ATM and debit card fees, trust fees, retail investment
service income, and gains on the sale of mortgage loans.
The increase in service charges on deposits of $9.6 million (20%) was due
to increases in fee-generating deposit balances and an increase in the fees
charged for certain deposit-related activities. ATM fees increased
<TABLE>
<CAPTION>
- --------------------------------------------------------------------------------------------------------------
TABLE 14 - NONINTEREST INCOME
- --------------------------------------------------------------------------------------------------------------
Percent Increase (Decrease)
- --------------------------------------------------------------------------------------------------------------
1996 1995
($ in thousands) 1996 1995 1994 over 1995 over 1994
- --------------------------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C> <C>
Service charges on deposits ............. $ 58,330 $ 48,715 $ 47,139 19.7% 3.3%
Trust fees .............................. 13,397 12,498 13,092 7.2 (4.5)
Other service, collection and
exchange charges:
Mortgage loan servicing fees ........ 7,943 8,127 7,637 (2.3) 6.4
Retail investment service fees ...... 8,659 6,197 6,163 39.7 0.6
ATM fees ............................ 6,880 5,535 3,157 24.3 75.3
Other ............................... 10,503 8,814 5,530 19.2 59.4
- --------------------------------------------------------------------------------------------------------------
Total other service, collection
and exchange charges ...... 33,985 28,673 22,487 18.5 27.5
- --------------------------------------------------------------------------------------------------------------
Other income:
Gain on divestiture of
banking offices ................. -- 2,361 -- (100.0) --
Gain on sales of business lines ..... 517 3,402 -- (84.8) --
Other income ........................ 9,436 8,317 12,129 13.5 (31.4)
- --------------------------------------------------------------------------------------------------------------
Total other income ............ 9,953 14,080 12,129 (29.3) 16.1
- --------------------------------------------------------------------------------------------------------------
Securities gains (losses), net .......... (5,306) 248 (1,669) N/M N/M
- --------------------------------------------------------------------------------------------------------------
Total noninterest income ...... $ 110,359 $104,214 $ 93,178 5.9% 11.8%
- --------------------------------------------------------------------------------------------------------------
- ----------------
N/M = Not meaningful
</TABLE>
$1.3 million (24%) due to an expanded and upgraded network and surcharges on ATM
transactions. Hibernia's debit card, CheckMateSM, a concept acquired from a 1995
merger, was introduced companywide in 1996 and earned over $1.3 million in its
initial year, with expectations of further significant growth in 1997.
Trust fees were up $0.9 million (7%) despite the sale of the municipal
bond administration business. Retail investment service income increased $2.5
million (40%) due to the success of variable-rate annuity and mutual fund
products delivered throughout the Hibernia banking office system by a
restructured sales force.
Gains on sales of mortgage loans were up $1.0 million in 1996 compared to
1995 due to the significant increase in volume.
In 1996 Hibernia recorded $5.3 million in securities losses compared to
gains of $0.2 million in 1995. The losses in 1996 were the result of the
restructuring of the securities available for sale portfolio which was designed
to enhance future earnings and improve an already strong net interest margin.
Excluding securities transactions and nonrecurring items in both years,
noninterest income in 1995 increased $4.5 million (5%) compared to 1994 due to
increases in service charges on deposits and ATM fees.
Noninterest Expense
Noninterest expense totaled $319.7 million in 1996, compared to $284.1
million in 1995 and $302.9 million in 1994. Excluding certain nonrecurring items
and merger-related expenses for both years, noninterest expense in 1996 would
have been $308.1 million, a $31.0 million (11%) increase over 1995. The
nonrecurring items included $4.0 million in asset write-downs related to
technology enhancements, $4.3 million in merger-related expenses and a $3.3
million addition to reserves for health care benefits and other expenses, all in
1996, and $7.0 million in merger-related expenses in 1995. Approximately 30% of
the $31.0 million increase in noninterest expense in 1996 was due to expenses
related to the purchased companies. The remainder of the increase was due to
higher staff costs and $7.0 million in expenses related to Vision 2000.
Staff costs increased $24.4 million (18%), or $22.7 million (17%) after
merger-related expenses and the addition to the reserve for health care benefits
are excluded. The purchased companies accounted for $3.3 million of the
increase. Higher accruals for incentives and bonuses and increases in various
medical and insurance benefits were other major factors contributing to this
increase. The increases in incentives and bonuses reflect Hibernia's continued
movement toward more performance-based compensation, which began several years
ago.
<TABLE>
<CAPTION>
- --------------------------------------------------------------------------------------------------------------
TABLE 15 - NONINTEREST EXPENSE
- --------------------------------------------------------------------------------------------------------------
Percent Increase (Decrease)
- --------------------------------------------------------------------------------------------------------------
1996 1995
($ in thousands) 1996 1995 1994 over 1995 over 1994
- --------------------------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C> <C>
Salaries ........................... $ 133,496 $ 116,122 $ 112,060 15.0% 3.6%
Benefits ........................... 27,674 20,682 20,942 33.8 (1.2)
- --------------------------------------------------------------------------------------------------------------
Total staff costs .............. 161,170 136,804 133,002 17.8 2.9
- --------------------------------------------------------------------------------------------------------------
Occupancy, net ..................... 26,959 26,501 28,338 1.7 (6.5)
Equipment .......................... 28,735 21,648 17,871 32.7 21.1
- --------------------------------------------------------------------------------------------------------------
Total occupancy and equipment .. 55,694 48,149 46,209 15.7 4.2
- --------------------------------------------------------------------------------------------------------------
Data processing .................... 20,234 19,373 21,231 4.4 (8.8)
Telecommunications ................. 8,844 7,089 4,417 24.8 60.5
Advertising and promotional expenses 9,709 7,430 6,177 30.7 20.3
Postage ............................ 6,224 5,302 4,843 17.4 9.5
Stationery and supplies ............ 6,610 6,393 5,555 3.4 15.1
Professional fees .................. 7,542 7,793 11,983 (3.2) (35.0)
State taxes on equity .............. 6,000 4,491 3,164 33.6 41.9
Regulatory expense ................. 1,196 8,493 15,663 (85.9) (45.8)
Loan collection expense ............ 2,494 2,149 1,822 16.1 17.9
Foreclosed property expense, net ... (1,743) (699) (7,064) 149.4 (90.1)
Amortization of intangibles ........ 7,290 3,709 23,231 96.5 (84.0)
Other .............................. 28,469 27,602 32,685 3.1 (15.6)
- --------------------------------------------------------------------------------------------------------------
Total noninterest expense ...... $ 319,733 $ 284,078 $ 302,918 12.6% (6.2)%
- --------------------------------------------------------------------------------------------------------------
Efficiency ratio (1) 65.50% 65.84% 75.24%
- --------------------------------------------------------------------------------------------------------------
- ----------------
(1) Noninterest expense as a percentage of taxable-equivalent net interest
income plus noninterest income (excluding securities transactions).
</TABLE>
Occupancy and equipment expense increased $7.5 million (16%), or $3.3
million (7%) excluding the $4.0 million asset write-down and merger-related
expenses in both years. Almost half of the increase is due to expenses of the
purchased companies, with the remainder primarily due to higher depreciation and
maintenance expenses related to the Company's investment in new technology
designed to improve customer service and enhance employee efficiency.
Data processing expenses increased $0.9 million (4%), or $2.2 million
(12%) excluding merger-related expenses. Vision 2000 expenses totaled $3.9
million and the expenses of the purchased companies totaled $0.2 million. Data
processing expenses in 1995 included approximately $1.0 million of duplicate
expenses to outside vendors as Hibernia completed its conversion to a new data
processor in the first quarter of 1995. Net of the expenses related to mergers,
the purchased companies and Vision 2000 in 1996, and the duplicate expenses in
1995, data processing expenses declined $0.9 million primarily resulting from
the efficiencies of combining the data processing functions of the merged
companies. Telecommunications expenses increased $1.8 million (25%) as Hibernia
moved toward enhancing its communication capability as part of Vision 2000. In
addition, data line expenses related to its enhanced ATM network increased
telecommunications expenses.
Regulatory expenses decreased $7.3 million (86%) in 1996 compared to
1995. The lower expense levels are the result of the virtual elimination of FDIC
premiums for well-capitalized, highly-rated banks. Recently enacted legislation
imposed a one-time $4.5 billion assessment on thrifts and banks with thrift
deposits in order to raise the reserves of the Savings Association Insurance
Fund to legally required levels. Because Hibernia has no thrift deposits, the
Company did not incur expenses in 1996 related to this assessment. However, the
legislation provides that, beginning in 1997, banks will pay assessments (based
on deposit levels) to fund interest on bonds of the Financing Corporation
(FICO). The Company's 1997 expense related to the FICO funding is anticipated to
be approximately $1.0 million.
Professional fees decreased $0.3 million (3%). Excluding merger-related
expenses, professional fees increased $0.7 million (12%) primarily due to
consultant and other professional fees related to Vision 2000. State taxes on
equity increased $1.5 million (34%) due to the growth in equity.
Amortization of intangibles, a noncash expense, increased $3.6 million
(97%) due to the goodwill and core deposit intangibles created by the two
mergers in 1996 accounted for as purchase transactions. These two mergers
resulted in goodwill of $120.1 million and core deposit intangibles of $18.5
million. The goodwill will be amortized on a straight-line basis over 25 years,
while the core deposit intangibles will be amortized on an accelerated basis
over 10 years.
Postage increased $0.9 million (17%), while advertising and promotional
expenses increased $2.3 million (31%) because of a general increase in
advertising, product development activity and direct marketing. During 1996,
Hibernia intensified efforts to better identify the financial needs of both
existing and potential customers; to design products to meet customers' needs;
and to efficiently deliver those products.
Noninterest expense declined $18.8 million (6%) in 1995 compared to 1994.
Excluding merger-related expenses of $7.0 million in 1995 and a $17.6 million
charge for the impairment of goodwill and merger-related expenses of $11.1
million in 1994, total noninterest expenses increased $2.9 million (1%) to
$277.1 million in 1995. The major factors increasing noninterest expense
included a $6.4 million decrease in the net revenues attributable to foreclosed
assets and a $5.9 million (5%) increase in staff costs related to the
institution of the Hibernia Employee Stock Ownership Plan (ESOP) in 1995 and
normal salary increases. These increases were offset by a $7.2 million (46%)
decrease in regulatory expenses (due to the virtual elimination of FDIC deposit
premiums in mid-1995) and a $3.4 million (37%) decrease in professional fees
primarily due to a reduction in legal fees.
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 one measure of the success of its
efforts to control costs and generate income efficiently. The efficiency ratio
of 65.50% in 1996 compares favorably to 65.84% in 1995 and 75.24% in 1994.
Excluding amortization of goodwill and core deposit intangibles, the efficiency
ratio was 64.17% in 1996, down almost 100 basis points from 65.12% in 1995 and
down over 550 basis points from 69.70% in 1994.
Income Taxes
The Company recorded a $59.5 million provision for income taxes in 1996,
compared to $10.9 million in 1995 and $7.8 million in 1994. During 1995 and 1994
the Company recorded federal income taxes at a lower-than-normal effective tax
rate due to previously unrecognized deferred tax benefits.
Hibernia National Bank is subject to a Louisiana shareholder tax based
partly on income. The income portion is reported 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.
Net future deductible temporary differences at December 31, 1996, were
$157.8 million. The reserve for possible loan losses represents $127.8 million
of the future deductible temporary differences. The reserve for possible loan
losses has been recognized as expense for financial reporting purposes but is
not deductible for federal income tax purposes until the loans are charged off.
Valued at the 35% federal statutory tax rate, the net future deductible amounts
(excluding the capital loss carryforwards for which a valuation has been
established), if ultimately recognized, would generate tax benefits of $47.5
million. These benefits are recorded as a deferred tax asset at December 31,
1996.
Capital
Capital represents shareholder ownership in the Company - the book value
of assets in excess of liabilities. It provides a base for asset growth while
serving, together with the reserve for possible loan losses, as a cushion
against potential losses. Support for future asset expansion could come from
utilization of existing capital, issuance of debt or new capital and retention
of earnings. Hibernia's common dividend payout ratio (common dividends declared
per share divided by income per common share) was 34.12% in 1996 and 24.51%
(34.72% on a tax-effected basis) in 1995, as the Company seeks a balance between
shareholders' return and earnings retention requirements.
Shareholders' equity totaled $936.4 million at the end of 1996, compared
to $767.8 million at the end of 1995 and $637.7 million at the end of 1994. The
$168.6 million (22%) increase in 1996 was primarily due to current-year earnings
totaling $110.0 million and the
<TABLE>
<CAPTION>
TABLE 16 - CAPITAL
- ----------------------------------------------------------------------------------------------------
($ in millions) 1996 1995 1994 1993 1992
- ----------------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C> <C>
Risk-based capital:
Tier 1 .................... $ 777.1 $ 732.3 $ 641.0 $ 536.4 $ 457.4
Total ..................... 858.1 795.8 693.8 583.2 504.1
Assets:
Quarterly average assets(1) 8,850.9 7,541.5 7,182.5 6,907.0 6,834.4
Net risk-adjusted assets .. 6,438.3 4,996.4 4,128.0 3,599.0 3,568.3
Ratios:
Tier 1 risk -based capital 12.07% 14.66% 15.53% 14.91% 12.82%
Total risk-based capital 13.33% 15.93% 16.81% 16.20% 14.13%
Leverage ............. 8.78% 9.71% 8.92% 7.77% 6.69%
- ----------------------------------------------------------------------------------------------------
- ----------------
(1) Excluding SFAS No. 115 adjustment and disallowed intangibles.
</TABLE>
issuance of $100 million of preferred stock on September 30, 1996. These
increases were partially offset by $36.4 million in dividends on common stock,
$1.7 million for one quarter of dividends on preferred stock and an $8.3 million
decrease in unrealized gains on securities available for sale. The $130.1
million (20%) increase in 1995 reflected the Company's $128.9 million in
earnings and a $42.5 million increase due to the change in unrealized gains
(losses) on securities available for sale, partially offset by common dividends
totaling $30.8 million and a $14.4 million increase in unearned compensation
related to the ESOP instituted in 1995.
Regulations applicable to national banks and their holding companies
prescribe minimum capital levels. These levels are based on established
guidelines which relate required capital standards to both risk-weighted assets
(risk-based capital ratios) and total assets (leverage ratio). In accordance
with risk-based guidelines, assets and off-balance-sheet financial instruments
are assigned a weight to measure their level of risk. The total risk-based
capital ratio for the Company was 13.33% at year-end 1996, compared to 15.93% at
year-end 1995. Leverage ratios were 8.78% and 9.71% at year-end 1996 and 1995,
respectively.
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, leverage and
risk-based capital ratios declined in 1996 but still significantly exceed the
standards required for designation of an institution as well capitalized by
regulators. Table 16 shows the calculation of capital ratios for the Company for
the past five years.
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.
Attracting and retaining core deposits at competitive rates is the
Company's primary source of liquidity. Hibernia's extensive retail office
network, aided by the introduction of new deposit products, provided $6.5
billion in core deposits at year-end 1996, up $843.1 million (15%) from $5.6
billion a year earlier. As previously mentioned in the discussion of borrowings,
Hibernia has a large base of treasury management-related repurchase agreements
as part of total customer relationships. Because of the nature of the
relationships, these funds are considered stable and not subject to the same
volatility as other sources of noncore funds. Large-denomination certificates of
deposit and public funds were additional sources of liquidity during the year.
Hibernia's loan-to-deposit ratio at year-end 1996 increased to 77.3%,
compared to 71.9% at year-end 1995 and 60.2% at year-end 1994. These increases
resulted primarily from significant growth in loans, which outpaced increases in
the deposit base. Management believes that current and projected levels of
short-term investments and securities available for sale are adequate to meet
the Company's liquidity needs. In addition, the Company's $150 million remaining
shelf registration previously discussed and its membership in the Federal Home
Loan Bank further augment liquidity management by providing a readily accessible
source of funds at competitive rates.
Hibernia Corporation (the Parent Company) requires liquidity to fund
operating expenses and investments and to pay dividends. At December 31, 1996,
the Parent Company had $167.3 million in funds. During 1996, the Parent Company
received net proceeds of $98.0 million from the issuance of preferred stock, and
$30.8 million in dividends from its bank subsidiaries. The Parent Company paid
$36.4 million in dividends to its common shareholders and $1.7 million in
preferred stock dividends.
The Consolidated Statements of Cash Flows can be used to assess the
Company's ability to generate positive future net cash flows from operations and
its ability to meet future obligations. The Company had a net increase in cash
and cash equivalents in 1996 of $215.8 million. Cash provided by financing
activities totaled $520.4 million, as total deposits increased $406.2 million,
excluding the impact of the purchased companies, and the issuance of preferred
stock provided net cash of $98.0 million. Net cash provided by operating
activities totaled $177.9 million after adjusting 1996 net income for noncash
items. These increases to cash were partially offset by net cash used in
investing activities of $482.4 million, as loans increased $1.2 billion,
excluding the impact of the purchased companies, partially offset by $542.0
million in cash provided by the sale and maturities of securities available for
sale, excluding the impact of the purchased companies.
Cash and cash equivalents decreased $121.0 million in 1995. This decrease
was the result of cash used in investing activities of $576.7 million, as loans
increased $1.2 billion, partially offset by a net decrease in securities. Both
operating and financing activities provided cash during 1995, with operations
providing $131.7 million and financing activities providing $324.0 million
esulting primarily from an increase in deposits.
<PAGE>
<TABLE>
<CAPTION>
Quarterly Consolidated Summary of Income and Selected Financial Data (1)
Hibernia Corporation and Subsidiaries 1996 1995
- -------------------------------------------------------------------------------------------------------------------------------
($ in thousands, except per-share data) Fourth Third Second First Fourth Third Second First
- -------------------------------------------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C> <C> <C> <C> <C>
Interest income ............................ $171,350 $155,441 $151,100 $147,737 $145,636 $143,451 $139,655 $134,104
Interest expense ........................... 70,726 65,042 62,158 61,485 61,697 62,336 61,301 56,756
- -------------------------------------------------------------------------------------------------------------------------------
Net interest income ........................ 100,624 90,399 88,942 86,252 83,939 81,115 78,354 77,348
Provision for possible loan losses ......... -- (13,600) 550 425 450 530 30 130
- -------------------------------------------------------------------------------------------------------------------------------
Net interest income after provision
for possible loan losses ............... 100,624 103,999 88,392 85,827 83,489 80,585 78,324 77,218
- -------------------------------------------------------------------------------------------------------------------------------
Noninterest income:
Noninterest income ...................... 31,545 28,409 28,312 27,399 26,394 25,688 26,632 25,252
Securities gains (losses), net .......... 165 (5,584) 46 67 50 179 (32) 51
- -------------------------------------------------------------------------------------------------------------------------------
Noninterest income ......................... 31,710 22,825 28,358 27,466 26,444 25,867 26,600 25,303
Noninterest expense ........................ 84,210 88,885 73,929 72,709 74,151 67,540 70,224 72,163
- -------------------------------------------------------------------------------------------------------------------------------
Income before taxes ........................ 48,124 37,939 42,821 40,584 35,782 38,912 34,700 30,358
Income tax expense ......................... 17,189 13,369 14,678 14,282 1,675 3,461 2,721 3,010
- -------------------------------------------------------------------------------------------------------------------------------
- -------------------------------------------------------------------------------------------------------------------------------
Net income ................................. $ 30,935 $ 24,570 $ 28,143 $ 26,302 $ 34,107 $ 35,451 $ 31,979 $ 27,348
- -------------------------------------------------------------------------------------------------------------------------------
- -------------------------------------------------------------------------------------------------------------------------------
Net income applicable to common shareholders $ 29,195 $ 24,570 $ 28,143 $ 26,302 $ 34,107 $ 35,451 $ 31,979 $ 27,348
- -------------------------------------------------------------------------------------------------------------------------------
Per common share information: (2)
Net income .............................. $ 0.23 $ 0.19 $ 0.22 $ 0.21 $ 0.27 $ 0.28 $ 0.25 $ 0.21
Tax-effected net income (3) ............. $ 0.23 $ 0.19 $ 0.22 $ 0.21 $ 0.18 $ 0.20 $ 0.18 $ 0.15
Cash dividends declared ................. $ 0.08 $ 0.07 $ 0.07 $ 0.07 $ 0.07 $ 0.06 $ 0.06 $ 0.06
Average shares outstanding (000s) .......... 127,080 126,834 126,620 126,524 126,409 126,319 126,682 128,138
Dividend payout ratio ...................... 34.78% 36.84% 31.82% 33.33% 25.93% 21.43% 24.00% 28.57%
- -------------------------------------------------------------------------------------------------------------------------------
Selected quarter-end balances (in millions)
Loans ...................................... $6,043.0 $5,717.5 $5,204.4 $4,956.4 $4,723.2 $4,455.8 $4,226.3 $3,995.8
Deposits ................................... 7,821.8 7,375.9 6,628.9 6,651.0 6,569.7 6,382.3 6,429.1 6,366.5
Debt ....................................... 51.3 17.9 26.8 35.1 34.4 26.1 29.9 18.9
Equity ..................................... 936.4 903.8 781.6 775.1 767.8 725.4 695.5 677.3
Total assets ............................... 9,306.8 8,807.7 7,855.2 7,880.6 7,755.7 7,497.8 7,552.2 7,375.3
- -------------------------------------------------------------------------------------------------------------------------------
Selected average balances (in millions)
Loans ...................................... $5,892.0 $5,356.3 $5,084.7 $4,839.9 $4,593.6 $4,319.1 $4,145.3 $3,938.1
Deposits ................................... 7,529.3 6,839.7 6,617.4 6,577.4 6,391.4 6,385.9 6,342.0 6,377.2
Debt ....................................... 31.4 21.3 27.3 27.5 31.8 27.5 26.5 20.6
Equity ..................................... 921.0 787.7 773.8 775.9 736.8 706.7 678.2 655.5
Total assets ............................... 9,008.2 8,136.9 7,854.8 7,794.2 7,563.3 7,542.2 7,443.8 7,368.0
- -------------------------------------------------------------------------------------------------------------------------------
Selected ratios
Net interest margin (taxable-equivalent) ... 4.93% 4.88% 4.95% 4.83% 4.81% 4.69% 4.63% 4.64%
Annualized return on assets ................ 1.37% 1.21% 1.43% 1.35% 1.80% 1.88% 1.72% 1.48%
Annualized return on common equity ......... 14.22% 12.49% 14.55% 13.56% 18.52% 20.07% 18.86% 16.69%
Annualized return on total equity .......... 13.44% 12.48% 14.55% 13.56% 18.52% 20.07% 18.86% 16.69%
Efficiency ratio ........................... 62.96% 73.87% 62.24% 63.07% 66.23% 62.27% 65.81% 69.15%
Average equity/average assets .............. 10.22% 9.68% 9.85% 9.95% 9.74% 9.37% 9.11% 8.90%
Tier 1 risk-based capital ratio ............ 12.07% 12.77% 13.97% 14.32% 14.66% 14.93% 14.93% 15.64%
Total risk-based capital ratio ............. 13.33% 14.03% 15.24% 15.59% 15.93% 16.20% 16.20% 16.92%
Leverage ratio ............................. 8.78% 9.71% 9.84% 9.68% 9.71% 9.36% 9.09% 9.04%
- -------------------------------------------------------------------------------------------------------------------------------
Tax-effected net income and ratios excluding
goodwill and core deposit intangible
amortization and balances (3) (4)
Net income applicable to common shareholders $ 32,132 $ 25,931 $ 28,920 $ 27,079 $ 24,035 $ 26,070 $ 23,332 $ 20,510
Net income per common share (2) ............ $ 0.25 $ 0.20 $ 0.23 $ 0.21 $ 0.19 $ 0.21 $ 0.18 $ 0.16
Annualized return on assets ................ 1.45% 1.29% 1.48% 1.39% 1.27% 1.39% 1.26% 1.12%
Annualized return on common equity ......... 19.07% 14.38% 15.31% 14.31% 13.40% 15.19% 14.20% 12.95%
Efficiency ratio ........................... 60.38% 72.62% 61.59% 62.39% 65.54% 61.55% 65.08% 68.41%
- -------------------------------------------------------------------------------------------------------------------------------
- ----------------
(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) Adjusted to reflect a 35% effective tax rate for 1995.
(4) Amortization and balances of core deposit intangibles are net of
applicable taxes. Goodwill amortization and balances are not tax
effected.
</TABLE>
Fourth Quarter Results:
Hibernia reported consolidated net income of $30.9 million in the fourth
quarter of 1996, a 33% increase from $23.3 million on a tax-effected basis in
the fourth quarter of 1995 and a 26% increase from $24.6 million in the third
quarter of 1996. Earnings in the third quarter of 1996 were negatively impacted
by $5.6 million in securities losses, $4.0 million in asset write-downs related
to technology enhancements, $3.7 million in merger-related expenses and a $3.3
million addition to reserves for health care benefits and other expenses. These
items were partially offset by a $13.6 million negative provision for possible
loan losses. Earnings per common share of $.23 for the fourth quarter of 1996
increased $.05 from the tax-effected earnings per common share of $.18 in the
fourth quarter of 1995 and $.04 from third-quarter 1996 earnings of $.19 per
common share.
Net interest income, on a taxable-equivalent basis, totaled $102.2 million
in the fourth quarter of 1996, compared to $85.6 million in the fourth quarter
of 1995 and $91.9 million in the third quarter of 1996. The fourth-quarter 1996
increase in net interest income over the fourth quarter of 1995 was primarily
the result of the growth in loans both in total and as a percentage of average
earning assets. Average loans increased $1.3 billion over the fourth quarter of
1995 to $5.9 billion, or 71.3% of average earning assets compared to 64.9% of
average earning assets in the fourth quarter of 1995. Loans increased $535.7
million in the fourth quarter of 1996 compared to the third quarter of 1996. The
net interest spread of 4.04% in the fourth quarter of 1996 was up 19 basis
points over the fourth quarter of 1995 and was up 4 basis points from the third
quarter of 1996. The average yield on earning assets was 8.33%, up 6 basis
points compared to the fourth quarter of 1995 and up 1 basis point from the
third quarter of 1996. The average rate paid on interest-bearing liabilities
decreased by 13 basis points from the fourth quarter of 1995 and 3 basis points
from the third quarter of 1996 to 4.29% in the fourth quarter of 1996.
The net interest margin increased 12 basis points over the fourth quarter
of 1995 to 4.93% for the fourth quarter of 1996. Even though money market rates
were down in the fourth quarter of 1996 compared to the fourth quarter of 1995,
resulting in a decrease in yields on loans and interest-bearing liabilities, the
overall yield on earning assets increased due to the change in the mix of
earning assets. Compared to the third quarter of 1996 the net interest margin
was up 5 basis points. A 4 basis point increase in loan yields resulted in a 1
basis point increase in the yield on earning assets. At the same time, an
increase in lower-rate NOW, money market and savings accounts as a percentage of
interest-bearing deposits led to a 3 basis point decline in the cost of funds.
In addition, the percentage of noninterest-bearing funds (primarily demand
deposits and equity) supporting earning assets in the fourth quarter of 1996
increased by 41 basis points compared to the third quarter of 1996. Table 17
illustrates the components of the net interest margin on a quarterly basis for
1996 and 1995.
Average earning assets increased $1.2 billion (17%) to $8.3 billion in the
fourth quarter of 1996 from $7.1 billion in the fourth quarter of 1995. Average
earning assets were up $756.5 million (10%) compared to the third quarter of
1996. Average loans increased $1.3 billion (28%) over the fourth quarter of 1995
and increased $535.7 million (10%) over the third quarter of 1996, with the
purchased companies contributing almost 30% of the growth over the year-ago
quarter and about half of the growth over the prior quarter. Period-end loans
grew $325.5 million, 23% on an annualized basis, during the fourth quarter of
1996, primarily due to internal growth.
Average securities for the fourth quarter of 1996 totaled $2.2 billion,
down $207.1 million (9%) from the fourth quarter of 1995 and up $203.0 million
(10%) from the third quarter of 1996. The decline from the
<TABLE>
<CAPTION>
- -------------------------------------------------------------------------------------------------------------------------
TABLE 17 - NET INTEREST MARGIN (taxable-equivalent)
- -------------------------------------------------------------------------------------------------------------------------
1996 1995
- -------------------------------------------------------------------------------------------------------------------------
Fourth Third Second First Fourth Third Second First
Quarter Quarter Quarter Quarter Quarter Quarter Quarter Quarter
- -------------------------------------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C> <C> <C> <C> <C>
Yield on earning assets .... 8.33% 8.32% 8.34% 8.22% 8.27% 8.20% 8.16% 7.99%
Rate on interest-bearing
liabilities ............ 4.29 4.32 4.30 4.35 4.42 4.44 4.45 4.22
- -------------------------------------------------------------------------------------------------------------------------
Net interest spread 4.04 4.00 4.04 3.87 3.85 3.76 3.71 3.77
Contribution of noninterest-
bearing funds .......... 0.89 0.88 0.91 0.96 0.96 0.93 0.92 0.87
- -------------------------------------------------------------------------------------------------------------------------
Net interest margin 4.93% 4.88% 4.95% 4.83% 4.81% 4.69% 4.63% 4.64%
- -------------------------------------------------------------------------------------------------------------------------
Noninterest-bearing funds/
earning assets ......... 20.65% 20.24% 21.13% 22.11% 21.79% 20.83% 20.61% 20.58%
- -------------------------------------------------------------------------------------------------------------------------
</TABLE>
fourth quarter of 1995 came as the result of the reinvestment of proceeds from
payments and maturities into higher-yielding loans. The increase from the third
quarter was due to the impact of the purchased companies as well as the
reinvestment by the Company of proceeds from securities sold in the third
quarter of 1996.
Average deposits increased $1.1 billion (18%) to $7.5 billion in the
fourth quarter of 1996 from $6.4 billion in the fourth quarter of 1995. Average
deposits were up $689.6 million (10%) from the third quarter of 1996. The
purchased companies accounted for about 75% of the growth in deposits over the
fourth quarter of 1995 and about 90% of the growth over the third quarter of
1996.
Noninterest income, excluding securities transactions, was $31.5 million,
up $5.2 million (20%) from the fourth quarter of 1995, and up $3.1 million (11%)
compared to the third quarter of 1996. Income related to the purchased
companies, primarily service charges on deposits, contributed approximately half
of the increase in both periods. Service charges on deposits, income from retail
investment services, trust fees and ATM fees were the major categories of
noninterest income that increased in the fourth quarter of 1996 over the fourth
quarter of 1995 and the third quarter of 1996.
Noninterest expense of $84.2 million in the fourth quarter of 1996 was
$10.0 million higher than $74.2 million reported in the fourth quarter of 1995.
Expenses related to the purchased companies accounted for almost 75% of the
increase, primarily staff costs and amortization of intangibles.
Compared to the third quarter of 1996, noninterest expenses in the fourth
quarter of 1996 were down $4.7 million. Excluding the effect of merger-related
and nonrecurring expenses, noninterest expenses were up $5.9 million. The
nonrecurring expenses in the third quarter of 1996 included the $4.0 million in
asset write-downs and the $3.3 million addition to reserves for health care
benefits and other expenses. Expenses related to the purchased companies were up
over $7.5 million in the fourth quarter of 1996 compared to the third quarter,
while Vision 2000 expenses were down $1.4 million in the fourth quarter of 1996
to $1.0 million.
The Company's efficiency ratio was 62.96% in the fourth quarter of 1996
compared to 66.23% and 73.87% in the fourth quarter of 1995 and the third
quarter of 1996, respectively. Excluding amortization of goodwill and core
deposit intangibles, the efficiency ratio was 60.38% in the fourth quarter of
1996, down over 500 basis points from 65.54% in the fourth quarter of 1995 and
down significantly from the third quarter of 1996 partially due to the
nonrecurring items and Vision 2000 expenses in the third quarter of 1996
previously discussed.
<PAGE>
<TABLE>
<CAPTION>
Consolidated Average Balances, Interest and Rates
Hibernia Corporation and Subsidiaries
Taxable-equivalent basis(1) 1996 1995
- --------------------------------------------------------------------------------------------------------------------------
(Average balances $ in millions, Average Average
interest $ in thousands) Balance Interest Rate Balance Interest Rate
- --------------------------------------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C> <C> <C>
ASSETS
Interest-earning assets:
Loans(2) ................................... $5,295.1 $481,150 9.09% $4,251.0 $393,865 9.27%
Securities available for sale .............. 2,131.9 140,966 6.61 766.6 50,709 6.61
Securities held to maturity ................ -- -- -- 1,841.3 117,670 6.39
- --------------------------------------------------------------------------------------------------------------------------
Total securities ....................... 2,131.9 140,966 6.61 2,607.9 168,379 6.46
- --------------------------------------------------------------------------------------------------------------------------
Short-term investments ..................... 183.3 9,780 5.34 126.2 7,368 5.84
- --------------------------------------------------------------------------------------------------------------------------
Total interest-earning assets .......... 7,610.3 $631,896 8.30% 6,985.1 $569,612 8.15%
- --------------------------------------------------------------------------------------------------------------------------
Reserve for possible loan losses ............... (144.1) (154.9)
Noninterest-earning assets:
Cash and due from banks .................... 337.1 322.3
Other assets ............................... 397.3 327.5
- --------------------------------------------------------------------------------------------------------------------------
Total noninterest-earning assets ....... 734.4 649.8
- --------------------------------------------------------------------------------------------------------------------------
Total assets ........................... $8,200.6 $7,480.0
- --------------------------------------------------------------------------------------------------------------------------
LIABILITIES AND
SHAREHOLDERS' EQUITY
Interest-bearing liabilities:
Interest-bearing deposits:
NOW accounts ........................... $ 305.4 $ 8,764 2.87% $ 632.8 $ 13,909 2.20%
Money market deposit accounts .......... 1,468.1 34,709 2.36 1,146.4 30,342 2.65
Savings accounts ....................... 386.1 8,161 2.11 369.0 8,091 2.19
Other consumer time deposits ........... 2,315.0 127,461 5.51 2,128.5 119,962 5.64
Public fund certificates of deposit
of $100,000 or more ................ 868.2 46,880 5.40 714.2 42,190 5.91
Certificates of deposit
of $100,000 or more ................ 279.2 14,334 5.13 208.6 10,157 4.87
Foreign time deposits .................. 41.8 2,261 5.41 35.1 2,018 5.75
- --------------------------------------------------------------------------------------------------------------------------
Total interest-bearing deposits ........ 5,663.8 242,570 4.28 5,234.6 226,669 4.33
- --------------------------------------------------------------------------------------------------------------------------
Short-term borrowings:
Federal funds purchased ................ 49.5 2,546 5.14 54.5 3,136 5.75
Repurchase agreements .................. 271.2 12,742 4.70 205.2 10,655 5.19
Debt ....................................... 26.9 1,553 5.78 26.6 1,630 6.12
- --------------------------------------------------------------------------------------------------------------------------
Total interest-bearing liabilities ..... 6,011.4 $259,411 4.32% 5,520.9 $242,090 4.38%
- --------------------------------------------------------------------------------------------------------------------------
Noninterest-bearing liabilities:
Demand deposits ............................ 1,228.7 1,139.6
Other liabilities .......................... 145.7 125.0
- --------------------------------------------------------------------------------------------------------------------------
Total noninterest-bearing liabilities .. 1,374.4 1,264.6
- --------------------------------------------------------------------------------------------------------------------------
Total shareholders' equity ..................... 814.8 694.5
- --------------------------------------------------------------------------------------------------------------------------
Total liabilities and
shareholders' equity ........... $8,200.6 $7,480.0
- --------------------------------------------------------------------------------------------------------------------------
SPREAD AND NET YIELD
Interest rate spread ........................... 3.98% 3.77%
Cost of funds supporting interest-earning assets 3.41% 3.47%
Net interest income/margin ..................... $372,485 4.89% $327,522 4.69%
- --------------------------------------------------------------------------------------------------------------------------
- ----------------
(1) Based on the statutory income tax rate of 35% for the years 1993 through
1996 and 34% for 1992.
(2) Yield computations include nonaccrual loans in loans outstanding.
</TABLE>
Consolidated Average Balances, Interest and Rates (Cont.)
<TABLE>
<CAPTION>
Hibernia Corporation and Subsidiaries
Taxable-equivalent basis(1) 1994 1993
- ------------------------------------------------------------------------------------------------------------------------------
(Average balances $ in millions, Average Average
interest $ in thousands) Balance Interest Rate Balance Interest Rate
- ------------------------------------------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C> <C> <C>
ASSETS
Interest-earning assets:
Loans(2) ................................... $3,561.0 $311,673 8.75% $3,273.8 $285,658 8.73%
Securities available for sale .............. 937.8 54,094 5.77 909.0 57,647 6.34
Securities held to maturity ................ 2,010.4 112,900 5.62 1,895.5 110,136 5.81
- ------------------------------------------------------------------------------------------------------------------------------
Total securities ....................... 2,948.2 166,994 5.66 2,804.5 167,783 5.98
- ------------------------------------------------------------------------------------------------------------------------------
Short-term investments ..................... 197.7 7,941 4.02 369.2 11,448 3.10
- ------------------------------------------------------------------------------------------------------------------------------
Total interest-earning assets .......... 6,706.9 $486,608 7.26% 6,447.5 $464,889 7.21%
- ------------------------------------------------------------------------------------------------------------------------------
Reserve for possible loan losses ............... (181.5) (208.9)
Noninterest-earning assets:
Cash and due from banks .................... 318.0 290.2
Other assets ............................... 335.8 354.0
- ------------------------------------------------------------------------------------------------------------------------------
Total noninterest-earning assets ....... 653.8 644.2
- ------------------------------------------------------------------------------------------------------------------------------
Total assets ........................... $7,179.2 $6,882.8
- ------------------------------------------------------------------------------------------------------------------------------
LIABILITIES AND
SHAREHOLDERS' EQUITY
Interest-bearing liabilities:
Interest-bearing deposits:
NOW accounts ........................... $ 712.2 $ 12,669 1.78% $ 659.8 $ 11,440 1.73%
Money market deposit accounts .......... 1,202.6 30,073 2.50 1,193.9 29,465 2.47
Savings accounts ....................... 399.3 8,492 2.13 381.4 8,483 2.22
Other consumer time deposits ........... 1,891.2 82,207 4.35 1,862.1 75,260 4.04
Public fund certificates of deposit
of $100,000 or more ................ 650.3 27,269 4.19 634.0 20,901 3.30
Certificates of deposit
of $100,000 or more ................ 213.6 8,129 3.81 223.1 7,610 3.41
Foreign time deposits .................. 17.1 794 4.65 5.0 149 2.98
- ------------------------------------------------------------------------------------------------------------------------------
Total interest-bearing deposits ........ 5,086.3 169,633 3.34 4,959.3 153,308 3.09
- ------------------------------------------------------------------------------------------------------------------------------
Short-term borrowings:
Federal funds purchased ................ 39.1 1,558 3.99 35.7 1,057 2.96
Repurchase agreements .................. 136.4 4,667 3.42 115.6 3,356 2.90
Debt ....................................... 32.9 2,971 9.04 37.9 4,421 11.66
- ------------------------------------------------------------------------------------------------------------------------------
Total interest-bearing liabilities ..... 5,294.7 $178,829 3.38% 5,148.5 $162,142 3.15%
- ------------------------------------------------------------------------------------------------------------------------------
Noninterest-bearing liabilities:
Demand deposits ............................ 1,106.4 1,020.4
Other liabilities .......................... 162.2 166.7
- ------------------------------------------------------------------------------------------------------------------------------
Total noninterest-bearing liabilities .. 1,268.6 1,187.1
- ------------------------------------------------------------------------------------------------------------------------------
Total shareholders' equity ..................... 615.9 547.2
- ------------------------------------------------------------------------------------------------------------------------------
Total liabilities and
shareholders' equity ........... $7,179.2 $6,882.8
- ------------------------------------------------------------------------------------------------------------------------------
SPREAD AND NET YIELD
Interest rate spread ........................... 3.88% 4.06%
Cost of funds supporting interest-earning assets 2.67% 2.51%
Net interest income/margin ..................... $307,779 4.59% $302,747 4.70%
- ------------------------------------------------------------------------------------------------------------------------------
- ----------------
(1) Based on the statutory income tax rate of 35% for the years 1993 through
1996 and 34% for 1992.
(2) Yield computations include nonaccrual loans in loans outstanding.
</TABLE>
<TABLE>
<CAPTION>
Consolidated Average Balances, Interest and Rates (Cont.)
Hibernia Corporation and Subsidiaries
Taxable-equivalent basis(1) 1992
- ------------------------------------------------------------------------------------------------------------------------------
Compound
5-Year
Growth Rate
(Average balances $ in millions, Average For Average
interest $ in thousands) Balance Interest Rate Balances
- ------------------------------------------------------------------------------------------------------------------------------
ASSETS
Interest-earning assets:
<S> <C> <C> <C> <C>
Loans(2) ................................... $3,932.5 $356,307 9.06% 6.1%
Securities available for sale .............. 828.2 66,648 8.05 20.8
Securities held to maturity ................ 1,380.7 89,870 6.51 (100.0)
- ------------------------------------------------------------------------------------------------------------------------------
Total securities ....................... 2,208.9 156,518 7.09 (0.7)
- ------------------------------------------------------------------------------------------------------------------------------
Short-term investments ..................... 533.5 18,319 3.43 (19.2)
- ------------------------------------------------------------------------------------------------------------------------------
Total interest-earning assets .......... 6,674.9 $531,144 7.96% 2.7
- ------------------------------------------------------------------------------------------------------------------------------
Reserve for possible loan losses ............... (237.3) (9.5)
Noninterest-earning assets:
Cash and due from banks .................... 310.1 1.7
Other assets ............................... 514.1 (5.0)
- ------------------------------------------------------------------------------------------------------------------------------
Total noninterest-earning assets ....... 824.2 (2.3)
- ------------------------------------------------------------------------------------------------------------------------------
Total assets ........................... $7,261.8 2.5%
- ------------------------------------------------------------------------------------------------------------------------------
LIABILITIES AND
SHAREHOLDERS' EQUITY
Interest-bearing liabilities:
Interest-bearing deposits:
NOW accounts ........................... $ 669.0 $ 16,842 2.52% (14.5)%
Money market deposit accounts .......... 1,350.3 42,488 3.15 1.7
Savings accounts ....................... 362.2 10,776 2.98 1.3
Other consumer time deposits ........... 2,098.6 99,691 4.75 2.0
Public fund certificates of deposit
of $100,000 or more ................ 658.7 26,422 4.01 5.7
Certificates of deposit
of $100,000 or more ................ 238.1 11,974 5.03 3.2
Foreign time deposits .................. 2.2 71 3.23 80.2
- ------------------------------------------------------------------------------------------------------------------------------
Total interest-bearing deposits ........ 5,379.1 208,264 3.87 1.0
- ------------------------------------------------------------------------------------------------------------------------------
Short-term borrowings:
Federal funds purchased ................ 108.2 3,566 3.30 (14.5)
Repurchase agreements .................. 114.1 3,896 3.41 18.9
Debt ....................................... 127.1 14,738 11.59 (26.7)
- ------------------------------------------------------------------------------------------------------------------------------
Total interest-bearing liabilities ..... 5,728.5 $230,464 4.02% 1.0
- ------------------------------------------------------------------------------------------------------------------------------
Noninterest-bearing liabilities:
Demand deposits ............................ 981.6 4.6
Other liabilities .......................... 206.1 (6.7)
- ------------------------------------------------------------------------------------------------------------------------------
Total noninterest-bearing liabilities .. 1,187.7 3.0
- ------------------------------------------------------------------------------------------------------------------------------
Total shareholders' equity ..................... 345.6 18.7
- ------------------------------------------------------------------------------------------------------------------------------
Total liabilities and
shareholders' equity ........... $7,261.8 2.5%
- ------------------------------------------------------------------------------------------------------------------------------
SPREAD AND NET YIELD
Interest rate spread ........................... 3.94%
Cost of funds supporting interest-earning assets 3.46%
Net interest income/margin ..................... $300,680 4.50%
- ------------------------------------------------------------------------------------------------------------------------------
- ----------------
(1) Based on the statutory income tax rate of 35% for the years 1993 through
1996 and 34% for 1992.
(2) Yield computations include nonaccrual loans in loans outstanding.
</TABLE>
<PAGE>
GRAPHIC MATERIAL INDEX
GRAPHIC DESCRIPTION CROSS REFERENCE
Average Earning Asset Mix Pie Chart See Consolidated Average Balances
Interest and Rates
Loan Portfolio Mix Pie Chart See MD&A Table 1
Nonperforming Asset Ratio Graph See MD&A Table 4
Net Interest Margin Graph See MD&A Table 11
Annual Dividends Graph See Five-Year Consolidated Summary of
Income and Selected Financial Data
<PAGE>
Report of Ernst & Young LLP, Independent Auditors
The Board of Directors and Shareholders
Hibernia Corporation
We have audited the accompanying consolidated balance sheets of Hibernia
Corporation and Subsidiaries as of December 31, 1996 and 1995, and the related
consolidated statements of income, changes in shareholders' equity, and cash
flows for each of the three years in the period ended December 31, 1996. These
financial statements are the responsibility of the Company's management. Our
responsibility is to express an opinion on these financial statements based on
our audits.
We conducted our audits in accordance with generally accepted auditing
standards. Those standards require that we plan and perform the audit to obtain
reasonable assurance about whether the financial statements are free of material
misstatement. An audit includes examining, on a test basis, evidence supporting
the amounts and disclosures in the financial statements. An audit also includes
assessing the accounting principles used and significant estimates made by
management, as well as evaluating the overall financial statement presentation.
We believe that our audits provide a reasonable basis for our opinion.
In our opinion, the financial statements referred to above present fairly, in
all material respects, the consolidated financial position of Hibernia
Corporation and Subsidiaries at December 31, 1996 and 1995, and the consolidated
results of their operations and their cash flows for each of the three years in
the period ended December 31, 1996, in conformity with generally accepted
accounting principles.
/s/Ernst & Young LLP
New Orleans, Louisiana
January 15, 1997
<PAGE>
<TABLE>
<CAPTION>
Consolidated Balance Sheets
Hibernia Corporation and Subsidiaries
December 31 ($ in thousands) 1996 1995
- -------------------------------------------------------------------------------------------------------
<S> <C> <C>
Assets
Cash and due from banks ........................................ $ 558,440 $ 403,667
Short-term investments ......................................... 158,293 97,248
Securities available for sale .................................. 2,178,674 2,350,229
Securities held to maturity .................................... -- --
Loans, net of unearned income .................................. 6,043,028 4,723,193
Reserve for possible loan losses ........................... (127,768) (150,516)
- -------------------------------------------------------------------------------------------------------
Loans, net ............................................. 5,915,260 4,572,677
- -------------------------------------------------------------------------------------------------------
Bank premises and equipment .................................... 172,107 128,306
Customers' acceptance liability ................................ 135 --
Other assets ................................................... 323,887 203,592
- -------------------------------------------------------------------------------------------------------
Total assets ........................................... $ 9,306,796 $ 7,755,719
- -------------------------------------------------------------------------------------------------------
Liabilities
Deposits:
Demand, noninterest-bearing ................................ $ 1,540,917 $ 1,236,735
Interest-bearing ........................................... 6,280,886 5,332,962
- -------------------------------------------------------------------------------------------------------
Total deposits ......................................... 7,821,803 6,569,697
- -------------------------------------------------------------------------------------------------------
Short-term borrowings .......................................... 331,796 265,126
Liability on acceptances ....................................... 135 --
Other liabilities .............................................. 165,328 118,728
Debt ........................................................... 51,349 34,361
- -------------------------------------------------------------------------------------------------------
Total liabilities ...................................... 8,370,411 6,987,912
- -------------------------------------------------------------------------------------------------------
Shareholders' equity Preferred Stock, no par value:
Authorized - 100,000,000 shares; 2,000,000 Series A
issued and outstanding at December 31, 1996 ................ 100,000 --
Class A Common Stock, no par value:
Authorized - 200,000,000 shares; issued 128,805,305, and
128,311,148 at December 31, 1996 and 1995, respectively ..... 247,306 246,357
Surplus ........................................................ 377,028 373,556
Retained earnings .............................................. 217,797 146,010
Treasury stock at cost, 50,000 and 17,407 shares at December 31,
1996 and 1995, respectively ................................. (569) (183)
Unrealized gains on securities available for sale .............. 8,141 16,457
Unearned compensation .......................................... (13,318) (14,390)
- -------------------------------------------------------------------------------------------------------
Total shareholders' equity ............................. 936,385 767,807
- -------------------------------------------------------------------------------------------------------
Total liabilities and shareholders' equity ............. $ 9,306,796 $ 7,755,719
- -------------------------------------------------------------------------------------------------------
- ----------------
See notes to consolidated financial statements.
</TABLE>
<PAGE>
<TABLE>
<CAPTION>
Consolidated Income Statements
Hibernia Corporation and Subsidiaries
Year Ended December 31 ($ in thousands, except per share data) 1996 1995 1994
- -------------------------------------------------------------------------------------------------------------------------------
<S> <C> <C> <C>
Interest income
Interest and fees on loans ............................. $ 477,299 $ 389,609 $ 307,545
Interest on securities available for sale .............. 138,549 49,632 53,134
Interest on securities held to maturity ................ -- 116,237 111,325
Interest on short-term investments ..................... 9,780 7,368 7,941
- ------------------------------------------------------------------------------------------------------------------------------------
Total interest income .............................. 625,628 562,846 479,945
- ------------------------------------------------------------------------------------------------------------------------------------
Interest expense
Interest on deposits ................................... 242,570 226,669 169,633
Interest on short-term borrowings ...................... 15,288 13,791 6,225
Interest on debt ....................................... 1,553 1,630 2,971
- ------------------------------------------------------------------------------------------------------------------------------------
Total interest expense ............................. 259,411 242,090 178,829
- ------------------------------------------------------------------------------------------------------------------------------------
Net interest income ........................................ 366,217 320,756 301,116
Provision for possible loan losses ..................... (12,625) 1,140 (17,869)
- ------------------------------------------------------------------------------------------------------------------------------------
Net interest income after provision for possible loan losses 378,842 319,616 318,985
- ------------------------------------------------------------------------------------------------------------------------------------
Noninterest income
Service charges on deposits ............................ 58,330 48,715 47,139
Trust fees ............................................. 13,397 12,498 13,092
Other service, collection and exchange charges ......... 33,985 28,673 22,487
Gain on divestiture of banking offices ................. -- 2,361 --
Gain on sale of business lines ......................... 517 3,402 --
Other operating income ................................. 9,436 8,317 12,129
Securities gains (losses), net ......................... (5,306) 248 (1,669)
- ------------------------------------------------------------------------------------------------------------------------------------
Total noninterest income ........................... 110,359 104,214 93,178
- ------------------------------------------------------------------------------------------------------------------------------------
Noninterest expense
Salaries and employee benefits ......................... 161,170 136,804 133,002
Occupancy expense, net ................................. 26,959 26,501 28,338
Equipment expense ...................................... 28,735 21,648 17,871
Data processing expense ................................ 20,234 19,373 21,231
Foreclosed property expense, net ....................... (1,743) (699) (7,064)
Amortization of intangibles ............................ 7,290 3,709 23,231
Other operating expense ................................ 77,088 76,742 86,309
- ------------------------------------------------------------------------------------------------------------------------------------
Total noninterest expense .......................... 319,733 284,078 302,918
- ------------------------------------------------------------------------------------------------------------------------------------
Income before income taxes ................................. 169,468 139,752 109,245
Income tax expense ......................................... 59,518 10,867 7,785
- ------------------------------------------------------------------------------------------------------------------------------------
Net income ................................................. $ 109,950 $ 128,885 $ 101,460
- ------------------------------------------------------------------------------------------------------------------------------------
Net income applicable to common shareholders ............... $ 108,210 $ 128,885 $ 101,460
- ------------------------------------------------------------------------------------------------------------------------------------
Net income per common share ................................ $ 0.85 $ 1.02 $ 0.80
- ------------------------------------------------------------------------------------------------------------------------------------
- ----------------
See notes to consolidated financial statements.
</TABLE>
<PAGE>
<TABLE>
<CAPTION>
Consolidated Statements of Changes in Shareholders' Equity
Hibernia Corporation and Subsidiaries
($ in thousands, except per-share data)
- ------------------------------------------------------------------------------------------------------------------------------------
Retained
Preferred Common Earnings
Stock Stock Surplus (Deficit) Other Total
- ------------------------------------------------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C> <C> <C>
Balances at December 31, 1993 ........ $ -- $ 244,725 $ 369,409 $ (32,796) $ 13,303 $ 594,641
Net income for 1994 .................. -- -- -- 101,460 -- 101,460
Issuance of common stock:
Dividend Reinvestment Plan ........ -- 433 1,340 -- -- 1,773
Stock Option Plan ................. -- 36 67 -- -- 103
Exercise of purchase warrants ..... -- 860 372 -- -- 1,232
By pooled companies prior to merger -- -- 1,586 -- -- 1,586
Cash dividends declared:
Common ($.19 per share) ........... -- -- -- (17,353) -- (17,353)
By pooled companies prior to merger -- -- -- (3,985) -- (3,985)
Acquisition of treasury stock ........ -- -- -- -- (2,414) (2,414)
Change in unrealized gains (losses)
on securities available for sale .. -- -- -- -- (39,709) (39,709)
Reduction of ESOP commitment ......... -- -- -- -- 400 400
Other ................................ -- -- (17) 14 -- (3)
- ------------------------------------------------------------------------------------------------------------------------------------
Balances at December 31, 1994 ........ -- 246,054 372,757 47,340 (28,420) 637,731
- ------------------------------------------------------------------------------------------------------------------------------------
Net income for 1995 .................. -- -- -- 128,885 -- 128,885
Issuance of common stock:
Dividend Reinvestment Plan ........ -- 170 477 -- -- 647
Stock Option Plan ................. -- 81 214 -- 94 389
Retirement Security Plan .......... -- -- (32) -- 798 766
Restricted stock awards ........... -- 52 (122) -- 1,902 1,832
Cash dividends declared:
Common ($.25 per share) ........... -- -- -- (28,343) -- (28,343)
By pooled companies prior to merger -- -- -- (2,436) -- (2,436)
Acquisition of treasury stock ........ -- -- -- -- (563) (563)
Purchase of common shares by ESOP .... -- -- -- -- (16,044) (16,044)
Allocation of ESOP shares ............ -- -- 338 -- 1,654 1,992
Change in unrealized gains (losses)
on securities available for sale .. -- -- -- -- 42,463 42,463
Other ................................ -- -- (76) 564 -- 488
- ------------------------------------------------------------------------------------------------------------------------------------
Balances at December 31, 1995 ........ -- 246,357 373,556 146,010 1,884 767,807
- ------------------------------------------------------------------------------------------------------------------------------------
Net income for 1996 .................. -- -- -- 109,950 -- 109,950
Issuance of common stock:
Dividend Reinvestment Plan ........ -- 275 1,310 -- -- 1,585
Stock Option Plan ................. -- 282 844 -- 483 1,609
Retirement Security Plan .......... -- 383 1,862 -- -- 2,245
Restricted stock awards ........... -- 9 44 -- 11 64
By pooled companies prior to merger -- -- 638 -- -- 638
Issuance of preferred stock .......... 100,000 -- (2,000) -- -- 98,000
Cash dividends declared:
Common ($.29 per share) ........... -- -- -- (34,916) -- (34,916)
Preferred ($.87 per share) ........ -- -- -- (1,740) -- (1,740)
By pooled companies prior to merger -- -- -- (1,507) -- (1,507)
Acquisition of treasury stock ........ -- -- -- -- (880) (880)
Purchase of common shares by ESOP .... -- -- -- -- (306) (306)
Allocation of ESOP shares ............ -- -- 774 -- 1,378 2,152
Change in unrealized gains (losses)
on securities available for sale .. -- -- -- -- (8,316) (8,316)
- ------------------------------------------------------------------------------------------------------------------------------------
Balances at December 31, 1996 ..... $ 100,000 $ 247,306 $ 377,028 $ 217,797 $ (5,746) $ 936,385
- ------------------------------------------------------------------------------------------------------------------------------------
- ----------------
See notes to consolidated financial statements.
</TABLE>
<PAGE>
<TABLE>
<CAPTION>
Consolidated Statements of Cash Flows
Hibernia Corporation and Subsidiaries
Year Ended December 31 ($ in thousands) 1996 1995 1994
- ------------------------------------------------------------------------------------------------------------------------------------
<S> <C> <C> <C>
Operating activities
Net income ......................................................... $ 109,950 $ 128,885 $ 101,460
Adjustments to reconcile net income to net
cash provided by operating activities:
Provision for possible loan losses .......................... (12,625) 1,140 (17,869)
Amortization of intangibles and deferred charges ............ 7,298 3,708 23,292
Depreciation and amortization ............................... 26,724 19,552 18,456
Premium amortization, net of discount accretion ............. 4,778 8,307 15,586
Realized securities (gains) losses, net ..................... 5,306 (248) 1,669
Gain on sales of assets ..................................... (2,601) (8,787) (6,096)
Provision for losses on foreclosed and other assets ......... 1,224 1,624 62
Decrease (increase) in deferred income tax asset ............ 7,414 (23,325) (20,731)
Decrease (increase) in interest receivable and other assets . (5,498) (5,872) 1,730
Increase (decrease) in interest payable and other liabilities 35,922 6,746 (11,204)
- ------------------------------------------------------------------------------------------------------------------------------------
Net cash provided by operating activities ..................... 177,892 131,730 106,355
- ------------------------------------------------------------------------------------------------------------------------------------
Investing activities
Purchases of securities held to maturity ........................... -- (160,123) (318,129)
Purchases of securities available for sale ......................... (278,036) (138,864) (481,500)
Proceeds from sales of securities available for sale ............... 285,118 118,468 249,122
Maturities of securities held to maturity .......................... -- 435,511 459,925
Maturities of securities available for sale ........................ 541,952 126,380 227,628
Net increase in loans .............................................. (1,235,784) (1,229,741) (745,397)
Proceeds from sales of loans ....................................... 302,857 187,864 301,895
Acquisitions, net of cash acquired of $172,717 ..................... (77,076) -- --
Purchases of premises, equipment and other assets .................. (30,276) (25,478) (26,614)
Proceeds from sales of foreclosed assets ........................... 7,582 6,575 15,863
Proceeds from divestiture of banking offices,
net of cash sold of $1,069 ....................................... -- (13,709) --
Proceeds from sales of business lines .............................. 517 115,647 --
Proceeds from sales of premises, equipment and other assets ........ 707 726 474
- ------------------------------------------------------------------------------------------------------------------------------------
Net cash used by investing activities ......................... (482,439) (576,744) (316,733)
- ------------------------------------------------------------------------------------------------------------------------------------
Financing activities
Net increase in domestic deposits .................................. 380,693 249,834 179,546
Net increase in time deposits - foreign office ..................... 25,549 11,462 30,587
Net increase in short-term borrowings .............................. 31,965 93,120 10,279
Proceeds from issuance of debt ..................................... 115,968 55,970 9,250
Payments on debt ................................................... (100,342) (42,621) (27,436)
Issuance of preferred stock ........................................ 98,000 -- --
Issuance of common stock ........................................... 6,141 3,634 4,694
Purchase of common stock by ESOP ................................... (306) (16,044) --
Dividends paid ..................................................... (36,423) (30,779) (21,338)
Acquisition of treasury stock ...................................... (880) (563) (2,414)
- ------------------------------------------------------------------------------------------------------------------------------------
Net cash provided by financing activities ..................... 520,365 324,013 183,168
- ------------------------------------------------------------------------------------------------------------------------------------
Increase (decrease) in cash and cash equivalents ..................... 215,818 (121,001) (27,210)
Cash and cash equivalents at beginning of year ..................... 500,915 621,916 649,126
- ------------------------------------------------------------------------------------------------------------------------------------
Cash and cash equivalents at end of year ...................... $ 716,733 $ 500,915 $ 621,916
- ------------------------------------------------------------------------------------------------------------------------------------
Supplemental disclosures Cash paid during the year for:
Interest expense ................................................... $ 253,759 $ 236,189 $ 180,772
Income taxes ....................................................... $ 48,008 $ 29,392 $ 26,170
Non-cash investing and financing activities:
Loans and bank premises and equipment
transferred to foreclosed assets ................................. $ 4,741 $ 4,970 $ 1,519
Acquisitions:
Cash paid for acquisitions (including transaction costs) ......... $ 249,793 $ -- $ --
Fair value of assets acquired .................................... $ 1,141,437 $ -- $ --
Fair value of liabilities assumed ................................ $ 891,644 $ -- $ --
- ------------------------------------------------------------------------------------------------------------------------------------
- ----------------
See notes to consolidated financial statements.
</TABLE>
Notes to Consolidated Financial Statements
Hibernia Corporation and Subsidiaries
Note 1
Summary of Significant Accounting Policies
Hibernia Corporation (the Parent Company), through its wholly owned
subsidiaries, Hibernia National Bank and Hibernia National Bank of Texas,
formerly Texarkana National Bank, (the Banks), provides a broad array of
financial products and services throughout Louisiana and Northeast Texas. The
principal products and services offered include retail, small business,
commercial, international, mortgage and private banking; leasing; corporate
finance; treasury management and trust. The Banks, through wholly owned
subsidiaries, also provide retail brokerage and alternative investments,
including mutual funds and annuities.
The accounting principles followed by Hibernia Corporation and
Subsidiaries (the Company or Hibernia) and the methods of applying those
principles conform with generally accepted accounting principles and those
generally practiced within the banking industry.
Consolidation
The consolidated financial statements include the accounts of the
Parent Company and its wholly owned subsidiaries: Hibernia National Bank,
Hibernia National Bank of Texas, Hibernia Capital Corporation (HCC) and Zachary
Taylor Life Insurance Company (Zachary Taylor), for all periods presented. HCC
is a licensed Small Business Investment Company formed in 1995 to provide equity
capital and long-term loans to small businesses. Zachary Taylor is currently
inactive, and the Parent Company has an agreement with the Federal Reserve Bank
whereby Zachary Taylor will not be actively operated as an insurance company
without Federal Reserve Board approval.
These consolidated financial statements give retroactive effect to
mergers accounted for as poolings of interests. In addition, the effects of
mergers accounted for as purchase transactions have been included from the date
of consummation (see Note 2).
All significant intercompany transactions and balances have been
eliminated.
Use of Estimates
The preparation of financial statements in conformity with generally
accepted accounting principles requires management to make estimates and
assumptions that affect the amounts reported in the consolidated financial
statements and accompanying notes. Actual results could differ from those
estimates.
Securities
Management determines the appropriate classification of debt securities
(trading, available for sale, or held to maturity) at the time of purchase and
re-evaluates this classification periodically. Trading account securities are
held for resale in anticipation of short-term market movements. Debt securities
are classified as held to maturity when the Company has the positive intent and
ability to hold the securities to maturity. Securities not classified as held to
maturity or trading are classified as available for sale.
Trading account securities are carried at market value and are included
in short-term investments. Gains and losses, both realized and unrealized, are
reflected in earnings. Held to maturity securities are stated at amortized cost.
Available for sale securities are stated at fair value, with unrealized gains
and losses, net of tax, reported in a separate component of shareholders'
equity.
The amortized cost of debt securities classified as held to maturity or
available for sale is adjusted for amortization of premiums and accretion of
discounts to maturity or, in the case of mortgage-backed securities, over the
estimated life of the security. Amortization, accretion and accruing interest
are included in interest income on securities using the level-yield method.
Realized gains and losses, and declines in value judged to be other than
temporary, are included in net securities gains (losses). The cost of securities
sold is determined based on the specific identification method.
Loans
Loans are stated at the principal amounts outstanding, less unearned
income and the reserve for possible loan losses. Interest on loans and accretion
of unearned income are computed by methods which approximate a level rate of
return on recorded principal. Loan origination and commitment fees and certain
direct loan origination costs are deferred, and the net amount is amortized as
an adjustment of the related loan's yield over the life of the loan.
Commercial and small business banking loans are placed in nonaccrual
status when, in management's opinion, there is doubt concerning full
collectibility of both principal and interest. All commercial and small business
banking nonaccrual loans are considered to be impaired in accordance with
Statement of Financial Accounting Standards (SFAS) No. 114, "Accounting by
Creditors for Impairment of a Loan." Consumer loans are generally charged off
when any payment of principal or interest is more than 120 days delinquent.
Interest payments received on nonaccrual loans are applied to principal if there
is doubt as to the collectibility of the principal; otherwise, these receipts
are recorded as interest income. A loan remains in nonaccrual status until it is
current as to principal and interest and the borrower demonstrates the ability
to fulfill the contractual obligation.
Reserve for Possible Loan Losses
The reserve for possible loan losses is maintained to provide for
possible losses inherent in the loan portfolio. The reserve related to loans
that are identified as impaired is based on discounted cash flows, using the
loan's initial effective interest rate, or the fair value of the collateral for
certain collateral dependent loans.
The reserve is based on management's estimate of future losses; actual
losses may vary from the current estimate. The estimate is reviewed
periodically, taking into consideration the risk characteristics of the loan
portfolio, past loss experience, general economic conditions and other factors
which deserve current recognition. As adjustments to the estimate of future
losses become necessary, they are reflected as a provision (positive or
negative) for possible loan losses in current-period earnings. Actual loan
losses are deducted from and subsequent recoveries are added to the reserve.
Foreclosed Assets and Excess Bank-Owned Property
Foreclosed assets include real estate and other collateral acquired
upon the default of loans and loans classified as in-substance foreclosures. In
accordance with SFAS No. 114, a loan is classified as in-substance foreclosure
when the Company has taken possession of the collateral regardless of whether
formal foreclosure proceedings take place. Foreclosed assets and excess
bank-owned property are recorded at the fair value of the assets less estimated
selling costs. Losses arising from the initial reduction of an outstanding loan
amount to fair value are deducted from the reserve for possible loan losses.
Losses arising from the transfer of bank premises and equipment to excess
bank-owned property are charged to expense. A valuation reserve for foreclosed
assets and excess bank-owned property is maintained for subsequent valuation
adjustments on a specific-property basis. Income and expenses associated with
foreclosed assets and excess bank-owned property prior to sale are included in
current earnings.
Bank Premises and Equipment
Bank premises and equipment are stated at cost less accumulated
depreciation and amortization. Depreciation and amortization are computed
primarily using the straight-line method over the estimated useful lives of the
assets, which generally are 10 to 30 years for buildings and 3 to 15 years for
equipment, and over the shorter of the lease terms or the estimated lives of
leasehold improvements.
Excess of Cost Over Fair Value of Net Assets Acquired
The excess of cost over the fair value of net assets acquired
(goodwill) is being amortized using the straight-line method over the estimated
periods benefited, generally 25 years.
As events or changes in circumstances warrant, the Company evaluates
the realizability of goodwill by geographic region based on a comparison of the
recorded balance of goodwill to the applicable discounted cumulative net income
before goodwill amortization expense over the remaining amortization period of
the associated goodwill. To the extent that impairment exists, write-downs to
realizable value are recorded.
Income Taxes
The Parent Company and its subsidiaries file a consolidated federal
income tax return. The Company accounts for income taxes using the liability
method. Temporary differences occur between the financial reporting and tax
bases of assets and liabilities. Deferred tax assets and liabilities are
recorded for these differences based on enacted tax rates and laws that will be
in effect when the differences are expected to reverse.
Hibernia National Bank is subject to a Louisiana shareholder tax which
is based partly on income. The income portion is reported as state income tax.
In addition, certain subsidiaries of the Parent Company and Hibernia National
Bank are subject to Louisiana state income tax. Hibernia National Bank of Texas
is subject to Texas franchise tax.
Transfers and Servicing of Financial Assets and Extinguishments of Liabilities
In June 1996, the Financial Accounting Standards Board (FASB) issued
SFAS No. 125, "Accounting for Transfers and Servicing of Financial Assets and
Extinguishments of Liabilities," which requires an entity to recognize the
financial and servicing assets it controls and the liabilities it has incurred
and to cease to recognize them as financial assets when control has been
surrendered in accordance with the criteria provided in SFAS No. 125.
Subsequently, the FASB issued SFAS No. 127, "Deferral of the Effective Date of
Certain Provisions of SFAS No. 125," which defers until January 1, 1998, the
implementation of certain aspects of the original statement. The Company will
apply the new rules prospectively to transactions when required. The adoption of
SFAS No. 125 is not expected to have a material impact on the financial
condition or operating results of the Company.
Cash and Cash Equivalents
Cash and cash equivalents include cash and due from banks,
interest-bearing time deposits in domestic banks and federal funds sold and
securities purchased under agreements to resell.
Reclassification
Certain items included in the consolidated financial statements for 1995
and 1994 have been reclassified to conform with the 1996 presentation.
Note 2
Mergers
The Company completed mergers with six Louisiana financial institutions
in 1994 and four Louisiana financial institutions in 1995, all of which were
accounted for as poolings of interests. In 1996, the Company completed mergers
with five financial institutions, two in Louisiana and one in Northeast Texas
which were accounted for as poolings of interests, and two in Louisiana which
were accounted for as purchase transactions. The Company completed mergers with
Commercial Bancshares, Inc. (Commercial), Bastrop National Bank (Bastrop), First
Bancorp of Louisiana, Inc. (First Bancorp), First Continental Bancshares, Inc.
(First Continental), Pioneer Bancshares Corporation (Pioneer) and First State
Bank and Trust Company (First State) in 1994; American Bank (American), STABA
Bancshares, Inc. (STABA), Progressive Bancorporation, Inc. (Progressive) and
Bank of St. John (St. John) in 1995; and FNB Bancshares, Inc. (FNB), Bunkie
Bancshares, Inc. (Bunkie), CM Bank Holding Company, Inc. (Calcasieu), St.
Bernard Bank & Trust Co. (St. Bernard) and Texarkana National Bancshares, Inc.
(Texarkana) in 1996. It should be noted that the merger with Texarkana was a
holding company only merger, and Hibernia National Bank of Texas (formerly
Texarkana National Bank) is a wholly-owned subsidiary of the Parent Company.
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 purchases
are referred to as the "purchased companies."
The following table shows the merger date, consideration issued,
exchange ratio and accounting method for each merger.
<TABLE>
<CAPTION>
- ------------------------------------------------------------------------------------------------------
Exchange
Merger Date Consideration(1) Ratio Accounting Method
- ------------------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C>
Commercial ...... July 1, 1994 2,367,481 shares 8.40:1 Pooling of interests
Bastrop ......... July 1, 1994 2,444,043 shares 8.15:1 Pooling of interests
First Bancorp ... August 1, 1994 4,311,315 shares 18.14:1 Pooling of interests
First Continental August 1, 1994 3,898,655 shares 1.41:1 Pooling of interests
Pioneer ......... December 31, 1994 8,370,512 shares 30.50:1 Pooling of interests
First State ..... December 31, 1994 3,350,000 shares 33.50:1 Pooling of interests
American ........ March 1, 1995 2,098,968 shares 4.82:1 Pooling of interests
STABA ........... May 1, 1995 2,180,133 shares 18.33:1 Pooling of interests
Progressive ..... July 1, 1995 2,488,249 shares 4.05:1 Pooling of interests
St. John ........ July 1, 1995 3,338,700 shares 11.13:1 Pooling of interests
FNB ............. January 1, 1996 889,640 shares 92.00:1 Pooling of interests
Bunkie .......... January 15, 1996 1,874,760 shares 170.34:1 Pooling of interests
Calcasieu ....... August 26, 1996 $ 201,700,000 N/A Purchase
St. Bernard ..... October 1, 1996 $ 46,600,000 N/A Purchase
Texarkana ....... December 31, 1996 6,236,621 shares 8.20:1 Pooling of interests
- ------------------------------------------------------------------------------------------------------
- ----------------
(1) All shares issued were Hibernia Class A Common Stock.
</TABLE>
The following table shows the key components of the results of
operations of the merged companies accounted for as poolings of interests for
the years ended December 31, 1995 and 1994.
<TABLE>
<CAPTION>
- --------------------------------------------------------------------------------------------------------
Hibernia 1995 1996 Pooled Companies
(originally Pooled -----------------------------------------
($ in thousands) reported) Companies(1) FNB Bunkie Texarkana Total
- --------------------------------------------------------------------------------------------------------
Year ended December 31, 1995
- --------------------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C> <C> <C>
Net interest income $299,760 $ -- $2,483 $4,103 $14,410 $320,756
Net income ......... $123,859 $ -- $ 788 $1,052 $ 3,186 $128,885
- --------------------------------------------------------------------------------------------------------
- --------------------------------------------------------------------------------------------------------
Year ended December 31, 1994
- --------------------------------------------------------------------------------------------------------
Net interest income $260,103 $23,109 $2,093 $3,781 $12,030 $301,116
Net income ......... $ 84,651 $10,369 $ 632 $1,254 $ 4,554 $101,460
- --------------------------------------------------------------------------------------------------------
- ----------------
(1) Results of operations for the year ended December 31, 1995 are included in
Hibernia's results.
</TABLE>
Under the purchase method of accounting, the assets and liabilities of
Calcasieu and St. Bernard were adjusted to their estimated fair value as of each
purchase date. The excess of cost over the fair value of net assets acquired was
$120,126,000 and is being amortized on a straight-line basis over 25 years. In
addition, a core deposit intangible of $18,457,000 was recorded and is being
amortized on an accelerated basis over 10 years. The following table presents
unaudited pro forma information giving effect to the purchases of Calcasieu and
St. Bernard as if the transactions had occurred at the beginning of each period
presented. The effect of anticipated savings resulting from the mergers has not
been included in the pro forma information. Unaudited pro forma information is
not necessarily indicative of future results.
<TABLE>
<CAPTION>
- --------------------------------------------------------------------------
($ in thousands, except per-share data) Year Ended December 31
- --------------------------------------------------------------------------
1996 1995 1994
- --------------------------------------------------------------------------
<S> <C> <C> <C>
Interest and noninterest income $781,416 $734,023 $635,404
Net income .................... $ 99,165 $126,005 $ 98,974
Net income per common share ... $ 0.78 $ 0.99 $ 0.78
- --------------------------------------------------------------------------
</TABLE>
Note 3
Short-Term Investments
The following is a summary of short-term investments.
<TABLE>
<CAPTION>
- -------------------------------------------------------------------------------
($ in thousands) December 31
- -------------------------------------------------------------------------------
1996 1995
- -------------------------------------------------------------------------------
<S> <C> <C>
Federal funds sold and securities purchased
under agreements to resell ................. $158,000 $ 96,321
Interest-bearing time deposits in domestic banks 293 927
- --------------------------------------------------------------------------------
Total short-term investments ................. $158,293 $ 97,248
- --------------------------------------------------------------------------------
</TABLE>
Note 4
Securities
The Company adopted SFAS No. 115, "Accounting for Certain Investments
in Debt and Equity Securities," effective December 31, 1993. On November 15,
1995, the FASB issued a Special Report, "A Guide to Implementation of Statement
115 on Accounting for Certain Investments in Debt and Equity Securities"
(Guide). In accordance with the Guide, Hibernia chose to reclassify securities
from held to maturity to available for sale. At the date of transfer the
amortized cost of those securities was $1,665,664,000 and net unrealized gains
included in shareholders' equity were $21,522,000.
A summary of securities classified as available for sale follows.
<TABLE>
<CAPTION>
- ------------------------------------------------------------------------------------------
($ in thousands) December 31, 1996
- ------------------------------------------------------------------------------------------
Amortized Fair Unrealized Unrealized
Type Cost Value Gains Losses
- ------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C>
U.S. Treasuries ................ $ 359,758 $ 365,171 $ 5,445 $ 32
U.S. government agencies:
Mortgage-backed securities .. 1,289,850 1,294,336 15,755 11,269
Other ....................... 332,890 333,388 1,917 1,419
States and political subdivisions 133,705 135,593 2,431 543
Other ......................... 48,188 48,371 188 5
Derivative financial instruments 1,765 1,815 967 917
- ------------------------------------------------------------------------------------------
Total available for sale .... $2,166,156 $2,178,674 $ 26,703 $ 14,185
- ------------------------------------------------------------------------------------------
</TABLE>
<TABLE>
<CAPTION>
- ----------------------------------------------------------------------------------------
($ in thousands) December 31, 1995
- ----------------------------------------------------------------------------------------
Amortized Fair Unrealized Unrealized
Type Cost Value Gains Losses
- ----------------------------------------------------------------------------------------
<S> <C> <C> <C> <C>
U.S. Treasuries ................ $ 345,791 $ 356,526 $ 10,896 $ 161
U.S. government agencies:
Mortgage-backed securities .. 1,572,942 1,587,780 22,033 7,195
Other ....................... 261,999 261,958 1,363 1,404
States and political subdivisions 85,876 87,224 1,524 176
Other ......................... 56,455 56,638 306 123
Derivative financial instruments 1,945 103 587 2,429
- ----------------------------------------------------------------------------------------
Total available for sale .... $2,325,008 $2,350,229 $ 36,709 $ 11,488
- ----------------------------------------------------------------------------------------
</TABLE>
The following is a summary of realized gains and losses from the sale
of available for sale securities for the years ended December 31, 1996, 1995 and
1994.
<TABLE>
<CAPTION>
- ----------------------------------------------------------------------------
($ in thousands) Year Ended December 31
- ----------------------------------------------------------------------------
1996 1995 1994
- ----------------------------------------------------------------------------
<S> <C> <C> <C>
Realized gains ................. $ 307 $ 1,790 $ 5,632
Realized losses ................ (5,613) (1,542) (7,301)
- ----------------------------------------------------------------------------
Net realized gains (losses) $(5,306) $ 248 $(1,669)
- ----------------------------------------------------------------------------
</TABLE>
Securities with carrying values of $1,988,002,000 and $1,915,529,000 at
December 31, 1996 and 1995, respectively, were either pledged to secure public
and trust deposits or sold under repurchase agreements.
<TABLE>
<CAPTION>
- -------------------------------------------------------------
($ in thousands) December 31
1996 1995
- -------------------------------------------------------------
<S> <C> <C>
U.S. Treasuries ................. $ 359,835 $ 343,504
U.S. government agencies:
Mortgage-backed securities ... 1,249,743 1,270,529
Other ........................ 322,691 271,470
States and political subdivisions 55,733 30,026
- -------------------------------------------------------------
Total pledged securities ... $1,988,002 $1,915,529
- -------------------------------------------------------------
</TABLE>
The amortized cost and estimated fair value by maturity of securities
available for sale are shown in the following table. Securities are classified
according to their contractual maturity without consideration of principal
amortization, potential prepayments or call options. Accordingly, actual
maturities may differ from contractual maturities.
<TABLE>
<CAPTION>
- --------------------------------------------------------------
($ in thousands) December 31, 1996
- --------------------------------------------------------------
Amortized Fair
Cost Value
- --------------------------------------------------------------
<S> <C> <C>
Due in 1 year or less ............ $ 204,828 $ 205,304
Due after 1 year through 5 years . 531,388 538,173
Due after 5 years through 10 years 219,762 222,959
Due after 10 years ............... 1,210,178 1,212,238
- --------------------------------------------------------------
Total ........................ $2,166,156 $2,178,674
- --------------------------------------------------------------
</TABLE>
One of the pooled companies entered into various derivative financial
instruments to hedge against exposure to changes in interest rates in the market
value of its securities available for sale portfolio. Notional principal amounts
are used to express the volume of the various derivative financial instruments,
but the amounts subject to credit risk are much smaller.
The following table summarizes the notional amounts, amortized cost and
estimated fair value of the derivative financial instruments held to hedge the
available for sale portfolio at December 31, 1996 and 1995. The Company has
included deferred gains and losses relating to sold, settled or terminated
derivative financial instruments in amortized cost. The fair value of these
instruments is included in the available for sale portfolio.
<TABLE>
<CAPTION>
- ---------------------------------------------------------------------------------------------------------------
($ in thousands) Notional Value Amortized Cost Fair Value
- ---------------------------------------------------------------------------------------------------------------
December 31 December 31 Year Ended December 31
- ---------------------------------------------------------------------------------------------------------------
1996 1995 1996 1995 1996 1995
- ---------------------------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C> <C> <C>
Interest rate swaps, caps and floors $176,000 $175,000 $ 2,322 $ 1,686 $1,815 $ 516
U.S. Treasury put and call options . $ -- $ 18,500 $ (206) $ (183) $-- $ 112
Treasury note short positions ...... $ -- $ 80,000 $ (351) $ 94 $-- $(244)
Eurodollar short positions ......... $ -- $205,000 $ -- $ 348 $-- $(281)
- ---------------------------------------------------------------------------------------------------------------
</TABLE>
Note 5
Loans
The following is a summary of commercial loans and small business
banking loans classified by repayment source and consumer loans classified by
type.
<TABLE>
<CAPTION>
- ---------------------------------------------------------------------
($ in thousands) December 31
- ---------------------------------------------------------------------
1996 1995
- ---------------------------------------------------------------------
<S> <C> <C>
Commercial:
Commercial and industrial ...... $ 865,855 $ 659,949
Services industry .............. 455,323 276,494
Real estate .................... 419,081 353,347
Health care .................... 227,315 166,350
Transportation, communications
and utilities .............. 182,417 184,111
Energy ......................... 143,214 85,804
Other .......................... 45,959 42,702
- ---------------------------------------------------------------------
Total commercial ........... 2,339,164 1,768,757
- ---------------------------------------------------------------------
Small Business Banking:
Commercial and industrial ...... 601,648 489,443
Services industry .............. 183,192 114,238
Real estate .................... 118,898 102,971
Health care .................... 54,697 33,834
Transportation, communications
and utilities .............. 24,300 13,544
Energy ......................... 6,834 8,238
Other .......................... 120,915 127,036
- ---------------------------------------------------------------------
Total small business banking 1,110,484 889,304
- ---------------------------------------------------------------------
Consumer:
Residential mortgages:
First mortgages ............ 1,082,191 830,404
Junior liens ............... 121,200 78,392
Indirect ....................... 749,861 660,607
Revolving credit ............... 144,435 89,294
Other .......................... 495,693 406,435
- ---------------------------------------------------------------------
Total consumer ............. 2,593,380 2,065,132
- ---------------------------------------------------------------------
Total loans ........................ $6,043,028 $4,723,193
- ---------------------------------------------------------------------
</TABLE>
The following is a summary of nonperforming loans, foreclosed assets
and excess bank-owned property.
<TABLE>
<CAPTION>
- -------------------------------------------------------
($ in thousands) December 31
- -------------------------------------------------------
1996 1995
- -------------------------------------------------------
<S> <C> <C>
Nonaccrual loans ............. $16,043 $17,692
Restructured loans ........... -- --
- -------------------------------------------------------
Nonperforming loans ...... 16,043 17,692
- -------------------------------------------------------
Foreclosed assets ............ 5,206 6,114
Excess bank-owned property ... 3,670 2,946
- -------------------------------------------------------
Total nonperforming assets $24,919 $26,752
- -------------------------------------------------------
</TABLE>
The Company adopted SFAS No. 114 effective January 1, 1995. The
adoption of SFAS No. 114 did not have a material impact on the financial
condition or operating results of the Company. At December 31, 1996 and 1995 the
recorded investment in loans that were considered to be impaired under SFAS No.
114 was $14,314,000 and $16,192,000, respectively. Included in the 1996 and 1995
amounts were $10,334,000 and $14,287,000, respectively, of impaired loans for
which the related reserve for possible loan losses was $1,453,000 and
$2,265,000, respectively. At December 31, 1996 and 1995 impaired loans that did
not have a reserve for possible loan losses amounted to $3,980,000 and
$1,905,000, respectively. The average recorded investment in impaired loans
during the years ended December 31, 1996 and 1995 was approximately $15,759,000
and $18,603,000, respectively. Interest payments received on impaired loans are
applied to principal if there is doubt as to the collectibility of the
principal; otherwise, these receipts are recorded as interest income. For the
years ended December 31, 1996 and 1995, the Company recognized interest income
on impaired loans of $2,296,000 and $2,126,000, respectively.
Interest income in the amount of $3,056,000 for 1996, $3,860,000 for
1995 and $6,914,000 for 1994 would have been recorded on nonperforming loans if
they had been classified as performing. The Company recorded $2,296,000,
$2,126,000 and $3,366,000 of interest income on nonperforming loans during 1996,
1995 and 1994, respectively.
The following is a summary of activity in the reserve for possible loan
losses.
<TABLE>
<CAPTION>
- ----------------------------------------------------------------------------
($ in thousands) Year Ended December 31
- ----------------------------------------------------------------------------
1996 1995 1994
- ----------------------------------------------------------------------------
<S> <C> <C> <C>
Balance at beginning of year .......... $ 150,516 $ 156,005 $ 186,562
Loans charged off ................. (34,875) (24,985) (31,520)
Recoveries ........................ 19,141 18,356 18,832
- --------------------------------------------------------------------------------
Net loans charged off ........... (15,734) (6,629) (12,688)
- --------------------------------------------------------------------------------
Provision for possible loan losses (12,625) 1,140 (17,869)
Addition due to purchased companies 5,611 -- --
- --------------------------------------------------------------------------------
Balance at end of year ................ $ 127,768 $ 150,516 $ 156,005
- --------------------------------------------------------------------------------
</TABLE>
Note 6
Related-Party Transactions
Certain directors and officers of the Company, members of their
immediate families and entities in which they or members of their immediate
families have principal ownership interests are customers of and have other
transactions with the Company in the ordinary course of business. Loans to these
parties are made on substantially the same terms, including interest rates and
collateral, as those prevailing at the time for comparable third-party
transactions and do not involve more than normal risks of collectibility or
present other unfavorable features.
Loans outstanding to related parties were $72,778,000 and $41,448,000
at December 31, 1996 and 1995, respectively. The change during 1996 reflects
$232,581,000 in loan advances and $201,251,000 in loan payments. These amounts
do not include loans made in the ordinary course of business to other entities
with which the Company has no relationship, other than a director of the Company
being a director of the other entity, unless the director had the ability to
significantly influence the other entity.
Securities sold to related parties under repurchase agreements amounted
to $3,004,000 and $7,021,000 at December 31, 1996 and 1995, respectively.
Note 7
Bank Premises and Equipment
The following details bank premises and equipment and related
depreciation and amortization expense.
<TABLE>
<CAPTION>
- -----------------------------------------------------------------------------
($ in thousands) December 31
- -----------------------------------------------------------------------------
1996 1995
- -----------------------------------------------------------------------------
<S> <C> <C>
Land ......................................... $ 32,484 $ 27,192
Bank premises ................................ 135,997 93,639
Leasehold improvements ....................... 36,001 32,582
Furniture and equipment ...................... 135,273 128,161
- --------------------------------------------------------------------------------
339,755 281,574
Less accumulated depreciation and amortization (167,648) (153,268)
- --------------------------------------------------------------------------------
Total ........................................ $ 172,107 $ 128,306
- --------------------------------------------------------------------------------
</TABLE>
<TABLE>
<CAPTION>
- --------------------------------------------------------------------------------------------
($ in thousands) Year Ended December 31
- --------------------------------------------------------------------------------------------
1996 1995 1994
- --------------------------------------------------------------------------------------------
<S> <C> <C> <C>
Provisions for depreciation and amortization included in:
Occupancy expense ............................... $ 6,693 $ 5,714 $ 7,514
Equipment expense ............................... 18,995 12,194 10,187
- --------------------------------------------------------------------------------------------
Total ................................................... $25,688 $17,908 $17,701
- --------------------------------------------------------------------------------------------
</TABLE>
In March 1995, the FASB issued SFAS No. 121, "Accounting for the
Impairment of Long-Lived Assets and for Long-Lived Assets to be Disposed Of,"
which requires impairment losses to be recorded on long-lived assets used in
operations, including related goodwill, when indicators of impairment are
present and the undiscounted cash flows estimated to be generated by those
assets are less than the assets' carrying amounts. SFAS No. 121 also addresses
the accounting for long-lived assets that are expected to be disposed of. The
adoption of SFAS No. 121 in the first quarter of 1996 did not have a material
effect on the financial condition or operating results of the Company.
Note 8
Time Deposits
Domestic certificates of deposit of $100,000 or more amounted to
$1,326,000,000 and $900,488,000 at December 31, 1996 and 1995, respectively.
Interest on these certificates amounted to $61,214,000, $52,347,000 and
$35,398,000 in 1996, 1995 and 1994, respectively.
Foreign deposits, which are deposit liabilities of the Cayman Island
office of Hibernia National Bank, were $71,015,000 and $45,466,000 at December
31, 1996 and 1995, respectively. Interest expense on foreign deposits amounted
to $2,261,000, $2,018,000 and $794,000 for 1996, 1995 and 1994, respectively.
Note 9
Debt
The following is a summary of outstanding debt.
<TABLE>
<CAPTION>
- --------------------------------------------------------------------------------
($ in thousands) December 31
- --------------------------------------------------------------------------------
1996 1995
- --------------------------------------------------------------------------------
<S> <C> <C>
Federal Home Loan Bank short-term advance,
bearing interest at 5.77%, secured by
two commercial real estate notes receivable,
interest payable monthly, maturing March 1997 .... $42,202 $ --
Federal Home Loan Bank long-term advances .......... 7,654 31,403
Federal Reserve Bank treasury, tax and
loan account ..................................... 1,493 1,694
Other .............................................. -- 1,264
- --------------------------------------------------------------------------------
Total ............................................ $51,349 $34,361
- --------------------------------------------------------------------------------
</TABLE>
The Federal Home Loan Bank (FHLB) advances are secured by the Company's
investment in FHLB stock which totaled $28,863,000 and $26,732,000 at December
31, 1996 and 1995, respectively, and also by a blanket floating lien on portions
of the Company's residential loan portfolio. The long-term advances accrue
interest at contractual rates of 4.6% to 8.4%, are due in monthly installments
of approximately $130,000, including interest, and are scheduled to amortize
through various dates between 1997 and 2015. However, should the loans for which
the long-term advances were obtained repay at a faster rate than anticipated,
the advances are to be repaid at a correspondingly faster rate.
The Federal Reserve Bank treasury, tax and loan account is an
open-ended note option with the Federal Reserve Bank of Dallas.
Maturities of debt are as follows: 1997 - $44,801,000; 1998 - $859,000;
1999 - $840,000; 2000 - $846,000; 2001 - $1,013,000; and thereafter -
$2,990,000.
Note 10
Other Assets and Other Liabilities
The following are summaries of other assets and other liabilities.
<TABLE>
<CAPTION>
- ----------------------------------------------------------------------
($ in thousands) December 31
- ----------------------------------------------------------------------
1996 1995
- ----------------------------------------------------------------------
<S> <C> <C>
Other assets:
Accrued interest receivable ............... $ 63,074 $ 56,318
Deferred income taxes ..................... 47,523 56,227
Foreclosed assets and excess
bank-owned property ..................... 8,876 9,060
Mortgage servicing rights ................. 6,214 4,059
Goodwill .................................. 134,590 19,096
Core deposit intangibles .................. 16,580 --
Other ..................................... 47,030 58,832
- ----------------------------------------------------------------------
Total other assets ...................... $323,887 $203,592
- ----------------------------------------------------------------------
Other liabilities:
Accrued interest payable .................. $ 34,990 $ 29,338
Trade accounts payable and
accrued liabilities ..................... 70,320 53,316
Trade date securities purchases not settled 17,416 --
Reserve for future rental payments
under sale/leaseback .................... 20,667 20,829
Other ..................................... 21,935 15,245
- ----------------------------------------------------------------------
Total other liabilities ................. $165,328 $118,728
- ----------------------------------------------------------------------
</TABLE>
As of January 1, 1995, the Company adopted SFAS No. 122, "Accounting
for Mortgage Servicing Rights." SFAS No. 122 requires that the cost to acquire
or originate a mortgage loan be allocated between the loan and the right to
service the loan if the acquiring or originating entity intends to sell or
securitize the loan and retain the servicing rights. In addition, SFAS No. 122
requires the assessment of capitalized mortgage servicing rights for impairment
based on the fair value of those rights. The adoption of SFAS No. 122 did not
have a material effect on the financial condition or operating results of the
Company.
Amortization expense relating to goodwill totaled $4,632,000,
$3,107,000 and $22,175,000 for the years ended December 31, 1996, 1995 and 1994,
respectively. Accumulated amortization relating to goodwill at December 31, 1996
and 1995 totaled $69,439,000 and $64,807,000, respectively. In addition,
amortization expense relating to core deposit intangibles totaled $1,877,000 in
1996, and accumulated amortization totaled $1,877,000 at December 31, 1996.
In 1994, amortization expense included a $16,142,000 charge for the
impairment of goodwill associated with acquisitions consummated in the
mid-to-late 1980s. As the result of a new organizational structure implemented
during the third quarter of 1994, management conducted an analysis which
estimated the discounted cumulative net income for each primary geographic
region over the remaining amortization period of the associated goodwill of
approximately nine years. Purchase prices for these acquisitions which gave rise
to the recorded goodwill reflected management's intent at the time to generate
efficiencies by merging the operations of the acquired institutions and
increasing market share from the resulting base. The analysis indicated that
projected performance of the Company's existing franchise in two regions would
not be adequate to support the remaining unamortized goodwill resulting from
previous acquisitions. The impaired goodwill was written off in one instance and
written down to realizable value in another. In addition, $1,449,000 of goodwill
previously recorded by one of the merged companies was written off during 1994.
Note 11
Preferred and Common Stock
The Company has authorized 100,000,000 shares of no par value preferred
stock. At December 31, 1996, 2,000,000 shares of Series A Fixed/Adjustable Rate
Noncumulative Preferred Stock (Series A Preferred Stock) were issued and
outstanding. The Series A Preferred Stock is nonconvertible, with a $50 per
share liquidation preference and a 6.9% annual dividend through October 1, 2001,
payable on the first business day of each calendar quarter. Beginning October 1,
2001 the dividend rate is adjustable but will not be less than 7.4% nor greater
than 13.4% per annum. Proceeds from the September 30, 1996 issuance totaled
$98,000,000, which is net of $2,000,000 in issuance costs. The Series A
Preferred Stock qualifies as Tier 1 capital for regulatory purposes and is
redeemable at Hibernia's option (with prior Federal Reserve Board approval) at
any time after October 1, 2001.
The Company has authorized 200,000,000 shares of no par value Class A
Common Stock. At December 31, 1996, 128,805,305 shares were issued and
128,755,305 shares were outstanding. At December 31, 1995, 128,311,148 shares
were issued and 128,293,741 shares were outstanding. The Company held 50,000 and
17,407 shares of Class A Common Stock in treasury at December 31, 1996 and 1995,
respectively.
Note 12
Per Share Data
Income per common share data are based on the weighted average number
of common shares outstanding of 126,765,513, 126,880,767 and 127,595,944 in
1996, 1995 and 1994, respectively. These weighted averages exclude 1,681,835 and
1,358,201 average common shares in 1996 and 1995, respectively, held by the
Hibernia Employee Stock Ownership Plan (discussed in Note 14) which have not
been committed to be released. The common shares issued in all mergers accounted
for as poolings of interests consummated in 1996, 1995 and 1994 are considered
to be outstanding as of January 1, 1994, the beginning of the earliest period
presented.
Note 13
Employee Benefit Plans
The Company maintains a defined-contribution benefit plan under Section
401(k) of the Internal Revenue Code, the Retirement Security Plan (RSP).
Substantially all employees who have completed one year of service are eligible
to participate in the RSP. Under the RSP, employees contribute a portion of
their compensation, with the Company matching a certain portion of employee
contributions. The matching contributions are invested in Hibernia Class A
Common Stock and are charged to employee benefits expense. At December 31, 1996,
the RSP owned approximately 1,800,000 shares of Hibernia Class A Common Stock.
The Company's contributions to the RSP totaled $4,874,000 in 1996, $2,896,000 in
1995 and $1,361,000 in 1994.
The Company maintains incentive pay and bonus programs for certain
employees. Costs of these programs were $16,850,000, $10,519,000 and $12,607,000
for the years ended December 31, 1996, 1995 and 1994, respectively.
During 1993, the Company established a plan (1993-1994 Plan) for grant
of performance share awards under its Long-Term Incentive Plan for certain
members of management. Under the 1993-1994 Plan, if the Company achieved certain
predetermined performance goals during the two-year period from January 1, 1993
through December 31, 1994, the Company would award Hibernia Class A Common Stock
to certain members of management who contributed to that achievement.
Approximately 260,000 shares of restricted common stock were awarded in 1995,
net of personal tax withholding. Compensation expense of $1,477,000 was recorded
in 1994 relating to the 1993-1994 Plan.
During 1995, the Company established a new plan (1995-1997 Plan)
similar to the 1993-1994 Plan. The 1995-1997 Plan covers the three-year period
from January 1, 1995 through December 31, 1997. Compensation expense of
$3,148,000 and $1,619,000 was recorded in 1996 and 1995, respectively, relating
to the 1995-1997 Plan.
Certain of the merged companies had adopted retention agreements to
encourage certain officers and other key employees of the merged companies to
continue their employment through the consummation of a merger. These agreements
were executed primarily to maintain stability within the organization and reduce
the risk of loss of key employees prior to legal merger. Compensation expense
related to these agreements totaled $997,000, $1,195,000 and $1,400,000 in 1996,
1995 and 1994, respectively.
Note 14
Employee Stock Ownership Plans
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 December 31, 1996. At December 31, 1996 and
1995, the ESOP owned approximately 2,036,000 and 2,009,000 shares of Hibernia
Class A Common Stock and had an outstanding debt obligation of $13,318,000 and
$14,390,000, respectively. The Banks make annual contributions to the ESOP in an
amount determined by their Boards of Directors, but at least equal to the ESOP's
minimum debt service less dividends received by the ESOP. Dividends received by
the ESOP in 1996 and 1995 were used to pay debt service, and it is anticipated
that this practice will continue in the future. The ESOP shares initially were
pledged as collateral for its debt. As the debt is repaid, shares are released
from collateral and allocated to active employees.
The Company accounts for the ESOP in accordance with Statement of
Position 93-6, "Employers' Accounting for Employee Stock Ownership Plans."
Accordingly, the debt of the ESOP is recorded as debt of the Parent Company and
the shares pledged as collateral are reported as unearned compensation in
equity. Hibernia National Bank's loan asset and the Parent Company's debt
liability eliminate in consolidation. As shares are committed to be released,
the Company reports compensation expense equal to the current market price of
the shares, and the shares become outstanding for earnings-per-share
computations. Dividends on allocated ESOP shares are recorded as a reduction of
retained earnings; dividends on unallocated ESOP shares are recorded as a
reduction of debt and accrued interest by the Parent Company.
Compensation expense of $2,882,000 and $2,395,000 relating to this ESOP
was recorded during 1996 and 1995, respectively. The ESOP held 440,000 and
223,000 allocated shares and 1,596,000 and 1,786,000 suspense shares at December
31, 1996 and 1995, respectively. The fair value of the suspense shares at
December 31, 1996 and 1995 was $21,145,000 and $19,200,000, respectively.
Texarkana National Bancshares, Inc. (Texarkana), which merged with the
Parent Company on December 31, 1996, maintained an ESOP (the Texarkana ESOP).
This ESOP, which remained in existence subsequent to the merger, covers
substantially all Texarkana employees. Upon completion of five years of service,
participants are fully vested in their accounts. Compensation expense related to
the Texarkana ESOP totaled $350,000, $350,000 and $300,000 for the years ended
December 31, 1996, 1995 and 1994, respectively. The Texarkana ESOP held
1,024,000 and 979,000 allocated shares of Hibernia Class A Common Stock and
74,000 and 102,000 suspense shares at December 31, 1996 and 1995, respectively.
The fair value of the suspense shares at December 31, 1996 and 1995 was $974,000
and $1,102,000, respectively. At December 31, 1996, the Texarkana ESOP had a
note payable to an unaffiliated bank in the amount of $359,000, which was
secured by approximately 74,000 shares of Hibernia Class A Common Stock owned by
the Texarkana ESOP.
Note 15
Stock Options
SFAS No. 123, "Accounting for Stock-Based Compensation," which became
effective January 1, 1996, established financial accounting and reporting
standards for stock-based compensation plans. Those plans include all
arrangements by which employees and directors receive shares of stock or other
equity instruments of the company, or the company incurs liabilities to
employees or directors in amounts based on the price of the stock. SFAS No. 123
defines a fair-value-based method of accounting for stock-based compensation.
However, SFAS No. 123 also allows an entity to continue to measure stock-based
compensation cost using the intrinsic value method of Accounting Principles
Board Opinion No. 25 (APB No. 25), "Accounting for Stock Issued to Employees."
Entities electing to retain the accounting prescribed in APB No. 25 must make
pro forma disclosures of net income and earnings per share as if the
fair-value-based method of accounting defined in SFAS No. 123 had been applied.
The Company retained the provisions of APB No. 25 for expense recognition
purposes. Under APB No. 25, because the exercise price of the Company's stock
options equals the market price of the underlying stock on the date of grant, no
compensation expense is recognized.
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 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.
At December 31, 1996, shares available for grant under the 1987 Stock
Option Plan, the Long-Term Incentive Plan and the 1993 Directors' Stock Option
Plan amounted to 152,772, 649,973 and 712,500, respectively.
The following summarizes the activity in the plans during 1996, 1995
and 1994.
<TABLE>
<CAPTION>
- -----------------------------------------------------------------------------------------------------
Weighted-
Average
Incentive Non-Qualified Exercise Price
- -----------------------------------------------------------------------------------------------------
<S> <C> <C> <C>
1987 Stock Option Plan:
Outstanding, December 31, 1993 ...................... 175,553 1,373,884 $ 7.28
Granted ............................................. -- 20,000 8.28
Canceled ............................................ -- (2,978) 4.94
Exercised ........................................... -- (16,024) 4.94
- --------------------------------------------------------------------------------------------------
Outstanding, December 31, 1994 ...................... 175,553 1,374,882 7.32
Granted (weighted-average fair value $2.41 per share) -- 10,000 8.31
Canceled ............................................ (7,500) (1,474) 5.25
Exercised ........................................... (5,625) (22,422) 4.82
- --------------------------------------------------------------------------------------------------
Outstanding, December 31, 1995 ...................... 162,428 1,360,986 7.40
Granted (weighted-average fair value $3.47 per share) -- 5,000 11.56
Canceled ............................................ (1,875) -- 4.38
Exercised ........................................... -- (22,398) 4.94
- --------------------------------------------------------------------------------------------------
Outstanding, December 31, 1996 ...................... 160,553 1,343,588 $ 7.45
- --------------------------------------------------------------------------------------------------
Exercisable, December 31, 1996 ...................... 146,640 1,191,834 $ 7.47
- --------------------------------------------------------------------------------------------------
Long-Term Incentive Plan:
Outstanding, December 31, 1993 ...................... -- 905,000 $ 7.25
Granted ............................................. 12,598 1,673,476 7.95
Award of restricted stock ........................... -- 3,000 --
Canceled ............................................ -- (59,928) 7.54
Issuances of restricted stock ....................... -- (3,000) --
- --------------------------------------------------------------------------------------------------
Outstanding, December 31, 1994 ...................... 12,598 2,518,548 7.71
Granted (weighted-average fair value $2.09 per share) -- 1,458,200 6.98
Award of restricted stock ........................... -- 264,347 --
Canceled ............................................ -- (208,150) 7.43
Exercised ........................................... -- (22,150) 7.23
Issuances of restricted stock ....................... -- (264,347) --
- --------------------------------------------------------------------------------------------------
Outstanding, December 31, 1995 ...................... 12,598 3,746,448 7.45
Granted (weighted-average fair value $2.76 per share) -- 1,527,800 10.20
Award of restricted stock ........................... -- 5,775 --
Canceled ............................................ -- (282,718) 8.10
Exercised ........................................... -- (149,558) 7.53
Issuances of restricted stock ....................... -- (5,775) --
- --------------------------------------------------------------------------------------------------
Outstanding, December 31, 1996 ...................... 12,598 4,841,972 $ 8.27
- --------------------------------------------------------------------------------------------------
Exercisable, December 31, 1996 ...................... -- 1,211,289 $ 7.69
- --------------------------------------------------------------------------------------------------
</TABLE>
<TABLE>
<CAPTION>
- ----------------------------------------------------------------------------------------------
Weighted-
Average
Incentive Non-Qualified Exercise Price
- ----------------------------------------------------------------------------------------------
1993 Directors' Stock Option Plan:
<S> <C> <C> <C>
Outstanding, December 31, 1993 ...................... - 75,000 $ 7.31
Granted ............................................. - 80,000 7.88
- ----------------------------------------------------------------------------------------------
Outstanding, December 31, 1994 ...................... - 155,000 7.60
Granted (weighted-average fair value $2.41 per share) - 80,000 8.13
Exercised ........................................... - (2,500) 7.31
- ----------------------------------------------------------------------------------------------
Outstanding, December 31, 1995 ...................... - 232,500 7.79
Granted (weighted-average fair value $2.89 per share) - 75,000 10.44
Canceled ............................................ - (22,500) 7.56
Exercised ........................................... - (21,250) 7.70
- ----------------------------------------------------------------------------------------------
Outstanding, December 31, 1996 ...................... - 263,750 $ 8.57
- ----------------------------------------------------------------------------------------------
Exercisable, December 31, 1996 ...................... - 85,000 $ 7.64
- ----------------------------------------------------------------------------------------------
</TABLE>
The following table presents the weighted-average remaining life as of December
31, 1996 for options outstanding for the 1987 Stock Option Plan, Long-Term
Incentive Plan and the 1993 Directors' Stock Option Plan within the stated
exercise price ranges.
<TABLE>
<CAPTION>
- --------------------------------------------------------------------------------------------------------------
Outstanding Exercisable
- --------------------------------------------------------------------------------------------------------------
Exercise Weighted- Weighted- Weighted-
Price Range Number Average Average Number Average
Per Share of Options Exercise Price Remaining Life of Options Exercise Price
- --------------------------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C> <C>
1987 Stock Option Plan:
$4.19 to $7.19 ................. 1,271,010 $ 5.85 5.75 years 1,110,343 $ 5.66
$7.88 to $11.56 ................ 35,000 $ 8.76 7.95 years 30,000 $ 8.29
$14.94 to $18.80 ............... 198,131 $17.51 1.58 years 198,131 $17.51
- --------------------------------------------------------------------------------------------------------------
Long-Term Incentive Plan:
$5.94 to $7.94 ................. 3,338,231 $ 7.42 7.34 years 1,176,950 $ 7.66
$8.13 to $10.63 ................ 1,516,339 $10.14 9.17 years 34,339 $ 8.73
- --------------------------------------------------------------------------------------------------------------
1993 Directors' Stock Option Plan:
$7.31 to $10.44 ................ 263,750 $ 8.57 7.98 years 85,000 $ 7.64
- --------------------------------------------------------------------------------------------------------------
</TABLE>
The following pro forma information was determined as if the Company
had accounted for stock options issued in 1996 and 1995 using the
fair-value-based method as defined in SFAS No. 123. The fair value of the
options was estimated using a Black-Scholes option valuation model with the
following weighted average assumptions for 1996 and 1995, respectively:
risk-free interest rates of 6.44% and 7.74%; expected dividend yields of 2.74%
and 3.41%; expected volatility factors of the market price of the Company's
Class A Common Stock of 23% and 29%; and an expected life of the options of 10
years.
The Black-Scholes option valuation model was developed for use in
estimating the fair value of traded options which have no vesting restrictions
and are fully transferable. In addition, option valuation models require the
input of highly subjective assumptions, including the expected stock price
volatility. Because the Company's employee stock options have characteristics
significantly different from those of traded options, and because changes in the
subjective input assumptions can materially affect the fair value estimate, in
management's opinion the existing models do not necessarily provide a reliable
single measure of the fair value of its employee and director stock options.
For purposes of pro forma disclosures, the estimated fair value of the
options granted in 1996 and 1995 is amortized to expense over the options'
vesting period. Since the Company's options generally vest over a four-year
period, the pro forma disclosures are not indicative of future amounts until
SFAS No. 123 is applied to all outstanding, nonvested options.
<TABLE>
<CAPTION>
- -----------------------------------------------------------------------------------------------
($ in thousands) December 31
- -----------------------------------------------------------------------------------------------
1996 1995
- -----------------------------------------------------------------------------------------------
As Reported Pro Forma As Reported Pro Forma
- -----------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C>
Net income ................ $ 109,950 $ 108,821 $ 128,885 $ 128,377
Net income per common share $ 0.85 $ 0.84 $ 1.02 $ 1.01
- -----------------------------------------------------------------------------------------------
</TABLE>
Note 16
Income Taxes
Income tax expense includes amounts currently payable and amounts
deferred to or from other years as a result of differences in the timing of
recognition of income and expense for financial reporting and federal tax
purposes. The components of income tax expense are as follows.
<TABLE>
<CAPTION>
- --------------------------------------------------------------------------------------
($ in thousands) Year Ended December 31
- --------------------------------------------------------------------------------------
1996 1995 1994
- --------------------------------------------------------------------------------------
<S> <C> <C> <C>
Current tax expense:
Federal income tax ..................... $ 51,056 $ 29,075 $ 24,802
State income tax ....................... 3,648 3,710 3,310
- --------------------------------------------------------------------------------------
Total current tax expense ................... 54,704 32,785 28,112
- --------------------------------------------------------------------------------------
Deferred tax expense (benefit):
Federal income tax ..................... 1,497 14,633 16,259
- --------------------------------------------------------------------------------------
Change in deferred tax valuation reserve 3,317 (36,551) (36,586)
- --------------------------------------------------------------------------------------
Total deferred tax expense (benefit) ........ 4,814 (21,918) (20,327)
- --------------------------------------------------------------------------------------
Income tax expense .......................... $ 59,518 $ 10,867 $ 7,785
- --------------------------------------------------------------------------------------
Shareholders' equity:
Change in unrealized gains (losses)
on securities available for sale .... $ (4,385) $ 18,205 $(14,237)
Change in deferred tax valuation reserve -- (8,380) 13,176
- --------------------------------------------------------------------------------------
Total shareholders' equity .................. $ (4,385) $ 9,825 $ (1,061)
- --------------------------------------------------------------------------------------
</TABLE>
The reconciliation of the federal statutory income tax rate to the
Company's effective rate is as follows.
<TABLE>
<CAPTION>
- -------------------------------------------------------------------------------------------------------------------------
($ in thousands) Year Ended December 31
- -------------------------------------------------------------------------------------------------------------------------
1996 1995 1994
- -------------------------------------------------------------------------------------------------------------------------
Amount Rate Amount Rate Amount Rate
- -------------------------------------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C> <C> <C>
Tax expense based on federal statutory rate $ 59,314 35.0% $ 48,913 35.0% $ 38,236 35.0%
Tax-exempt interest ....................... (3,812) (2.3) (4,188) (3.0) (4,068) (3.7)
State income tax, net of federal benefit .. 2,371 1.4 2,411 1.7 2,151 2.0
Goodwill .................................. 1,621 1.0 1,088 0.8 6,706 6.1
Benefit from change in deferred tax
valuation reserve ....................... -- -- (36,551) (26.1) (36,586) (33.5)
Other ..................................... 24 -- (806) (0.6) 1,346 1.2
- -------------------------------------------------------------------------------------------------------------------------
Income tax expense ........................ $ 59,518 35.1% $ 10,867 7.8% $ 7,785 7.1%
- -------------------------------------------------------------------------------------------------------------------------
</TABLE>
Deferred income taxes are based on differences between the bases of
assets and liabilities for financial statement purposes and tax reporting
purposes, and capital loss, net operating loss and alternative minimum tax
credit carryforwards. At December 31, 1996, the Company had $9,477,000 in
capital loss carryforwards for federal income tax purposes, which expire in
1997. The tax effects of the cumulative temporary differences and capital loss
carryforwards which create deferred tax assets and liabilities at December 31,
1996 and 1995, are detailed in the following table.
<TABLE>
<CAPTION>
- ----------------------------------------------------------------------
($ in thousands) December 31
- ----------------------------------------------------------------------
1996 1995
- ----------------------------------------------------------------------
<S> <C> <C>
Deferred tax assets:
Reserve for possible loan losses . $ 44,719 $ 51,593
Sale/leaseback ................... 7,527 6,810
Loan fees ........................ 2,528 2,285
Foreclosed assets ................ 1,596 2,135
Capital loss carryforward ........ 3,317 --
Other ............................ 19,904 14,425
- ----------------------------------------------------------------------
Total deferred tax assets ............ 79,591 77,248
- ----------------------------------------------------------------------
Deferred tax liabilities:
Net unrealized gains on securities
available for sale ............ 4,378 8,763
Depreciation ..................... 10,188 4,817
Core deposit intangibles ......... 5,489 --
Discounts on securities .......... 71 1,123
Other ............................ 8,625 6,318
- ----------------------------------------------------------------------
Total deferred tax liabilities ....... 28,751 21,021
- ----------------------------------------------------------------------
Deferred tax assets, net of
deferred tax liabilities ........... 50,840 56,227
Deferred tax valuation reserve ....... (3,317) --
- ----------------------------------------------------------------------
Total net deferred tax asset ......... $ 47,523 $ 56,227
- ----------------------------------------------------------------------
</TABLE>
Management assesses realizability of the net deferred tax asset based
on the Company's ability to: first, recover taxes previously paid and, second,
generate taxable income and capital gains in the future. A deferred tax
valuation reserve is established, if needed, to limit the net deferred tax asset
to its realizable value. The December 31, 1996 deferred tax valuation reserve is
the result of the potential inability of the Company to generate capital gains
in 1997.
Note 17
Leases
The Company leases its headquarters, operations center and certain
other bank premises and equipment under non-cancelable operating leases which
expire at various dates through 2036. Certain of the leases have escalation
clauses and renewal options ranging from one to 30 years.
Total rental expense (none of which represents contingent rentals)
included in occupancy and equipment expense was $10,966,000, $10,528,000 and
$10,522,000 in 1996, 1995 and 1994, respectively.
The future minimum rental commitments at December 31, 1996, for all
long-term operating leases are as follows: 1997 - $9,846,000; 1998 - $9,336,000;
1999 - $8,753,000; 2000 - $8,160,000; 2001 - $7,980,000; and thereafter -
$56,670,000.
Note 18
Other Operating Expense
The following is a summary of other operating expense.
<TABLE>
<CAPTION>
- -------------------------------------------------------------------------
($ in thousands) Year Ended December 31
- -------------------------------------------------------------------------
1996 1995 1994
- -------------------------------------------------------------------------
<S> <C> <C> <C>
Telecommunications ................. $ 8,844 $ 7,089 $ 4,417
Advertising and promotional expenses 9,709 7,430 6,177
Postage ............................ 6,224 5,302 4,843
Stationery and supplies ............ 6,610 6,393 5,555
Professional fees .................. 7,542 7,793 11,983
State taxes on equity .............. 6,000 4,491 3,164
Regulatory expense ................. 1,196 8,493 15,663
Loan collection expense ............ 2,494 2,149 1,822
Other .............................. 28,469 27,602 32,685
- -------------------------------------------------------------------------
Total other operating expense .. $77,088 $76,742 $86,309
- -------------------------------------------------------------------------
</TABLE>
Note 19
Hibernia Corporation
The following Balance Sheets, Income Statements and Statements of Cash
Flows reflect the financial position and results of operations for the Parent
Company only.
<TABLE>
<CAPTION>
- -----------------------------------------------------------
Balance Sheets
- -----------------------------------------------------------
($ in thousands) December 31
- -----------------------------------------------------------
1996 1995
- -----------------------------------------------------------
<S> <C> <C>
Investment in bank subsidiaries $779,925 $711,653
Other assets .................. 183,449 82,611
- -----------------------------------------------------------
Total assets .............. $963,374 $794,264
- -----------------------------------------------------------
Other liabilities ............. $ 13,671 $ 10,803
Debt .......................... 13,318 15,654
Shareholders' equity .......... 936,385 767,807
- -----------------------------------------------------------
Total liabilities and
shareholders' equity .... $963,374 $794,264
- -----------------------------------------------------------
</TABLE>
<TABLE>
<CAPTION>
- --------------------------------------------------------------------------------
Income Statements
- --------------------------------------------------------------------------------
($ in thousands) Year Ended December 31
- --------------------------------------------------------------------------------
1996 1995 1994
- --------------------------------------------------------------------------------
<S> <C> <C> <C>
Equity in undistributed income
of subsidiaries ............ $ 76,524 $ 56,584 $ 59,746
Dividends from bank subsidiaries 30,845 68,001 45,172
Other income ................... 6,056 3,684 2,335
- --------------------------------------------------------------------------------
Total income ............... 113,425 128,269 107,253
- --------------------------------------------------------------------------------
Interest expense ............... 3 207 2,236
Other expense .................. 2,107 3,403 7,391
- --------------------------------------------------------------------------------
Total expense .............. 2,110 3,610 9,627
- --------------------------------------------------------------------------------
Income before taxes ............ 111,315 124,659 97,626
Income tax expense (benefit) ... 1,365 (4,226) (3,834)
- --------------------------------------------------------------------------------
Net income ..................... $ 109,950 $ 128,885 $ 101,460
- --------------------------------------------------------------------------------
</TABLE>
<TABLE>
<CAPTION>
- --------------------------------------------------------------------------------
Statements of Cash Flows
- --------------------------------------------------------------------------------
($ in thousands) Year Ended December 31
- --------------------------------------------------------------------------------
1996 1995 1994
- --------------------------------------------------------------------------------
<S> <C> <C> <C>
Operating activities
Net income ...................... $ 109,950 $ 128,885 $ 101,460
Non-cash adjustment for equity
in subsidiaries' undistributed
net income .................... (76,524) (56,584) (59,746)
Other adjustments ............... 1,833 (10,719) (10,441)
- --------------------------------------------------------------------------------
Net cash provided by
operating activities ........ 35,259 61,582 31,273
- --------------------------------------------------------------------------------
Investing activities
Investment in subsidiaries ...... (3,000) (100) --
Purchases of securities available
for sale ..................... -- (484) (2,605)
Proceeds from sales of securities
available for sale ........... -- 453 907
Maturities of securities
available for sale ........... -- 1,600 1,633
Net decrease (increase) in loans 2,206 (10,867) --
- --------------------------------------------------------------------------------
Net cash used by investing activities (794) (9,398) (65)
- --------------------------------------------------------------------------------
Financing activities
Payments on debt ................ (1,264) (3,506) (27,190)
Purchase of treasury stock ...... (880) (563) (2,414)
Dividends paid .................. (36,423) (30,779) (21,338)
Issuance of preferred stock ..... 98,000 -- --
Issuance of common stock ........ 6,141 3,634 4,680
- --------------------------------------------------------------------------------
Net cash provided (used) by
financing activities ....... 65,574 (31,214) (46,262)
- --------------------------------------------------------------------------------
Increase (decrease) in cash ..... 100,039 20,970 (15,054)
Cash at beginning of year ........... 67,223 46,253 61,307
- --------------------------------------------------------------------------------
Cash at end of year ................. $ 167,262 $ 67,223 $ 46,253
- --------------------------------------------------------------------------------
</TABLE>
Note 20
Financial Instruments and Derivative Financial Instruments
Generally accepted accounting principles require disclosure of fair
value information about financial instruments for which it is practicable to
estimate fair value, whether or not the financial instruments are recognized in
the financial statements. When quoted market prices are not available, fair
values are based on estimates using present value or other valuation techniques.
Those techniques are significantly affected by the assumptions used, including
the discount rate and estimates of future cash flows. The derived fair value
estimates cannot be substantiated through comparison to independent markets and,
in many cases, could not be realized in immediate settlement of the instrument.
Certain financial instruments and all non-financial instruments are excluded
from these disclosure requirements. Further, the disclosures do not include
estimated fair values for items which are not financial instruments but which
represent significant value to the Company, among them, core deposit
intangibles, loan servicing rights, trust operations and other fee-generating
businesses. Accordingly, the aggregate fair value amounts presented do not
represent the underlying value of the Company.
The carrying amount of cash and short-term investments, demand deposits
and short-term borrowings approximates the estimated fair value of these
financial instruments. The estimated fair value of securities, interest rate
agreements and other off-balance-sheet instruments is based on quoted market
prices, dealer quotes and prices obtained from independent pricing services. The
estimated fair value of loans, interest-bearing deposits and debt is based on
present values using applicable risk-adjusted spreads to the appropriate yield
curve to approximate current interest rates applicable to each category of these
financial instruments.
Interest rates are not adjusted for changes in credit risk of
performing commercial and small business banking loans for which there are no
known credit concerns. Management segregates loans in appropriate risk
categories and believes the risk factor embedded in the interest rates results
in a fair valuation of these loans on an entry-value basis.
Variances between the carrying amount and the estimated fair value of
loans reflect both credit risk and interest rate risk. The Company is protected
against changes in credit risk by the reserve for possible loan losses which
totaled $127,768,000 at December 31, 1996.
The fair value estimates presented are based on information available
to management as of December 31, 1996 and 1995. Although management is not aware
of any factors that would significantly affect the estimated fair value amounts,
these amounts have not been revalued for purposes of these financial statements
since those dates. Therefore, current estimates of fair value may differ
significantly from the amounts presented. None of the assets or liabilities
included in the following table are held for trading purposes.
<TABLE>
<CAPTION>
- -------------------------------------------------------------------------------------------------
($ in thousands) December 31
- -------------------------------------------------------------------------------------------------
1996 1995
- -------------------------------------------------------------------------------------------------
Carrying Fair Carrying Fair
Amount Value Amount Value
- -------------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C>
Assets
Cash and short-term investments $ 716,733 $ 716,733 $ 500,915 $ 500,915
Securities available for sale . $2,178,674 $2,178,674 $2,350,229 $2,350,229
Commercial loans .............. $2,339,164 $2,349,641 $1,768,757 $1,782,063
Small business banking loans .. $1,110,484 $1,116,752 $ 889,304 $ 895,551
Consumer loans ................ $2,593,380 $2,556,323 $2,065,132 $2,064,284
Liabilities
Demand deposits ............... $1,540,917 $1,540,917 $1,236,735 $1,236,735
Interest-bearing deposits ..... $6,280,886 $6,306,859 $5,332,962 $5,344,076
Short-term borrowings ......... $ 331,796 $ 331,796 $ 265,126 $ 265,126
Debt .......................... $ 51,349 $ 52,337 $ 34,361 $ 34,499
- -------------------------------------------------------------------------------------------------
</TABLE>
The Company issues financial instruments with off-balance-sheet risk in
the normal course of business to meet the financing needs of its customers and
to reduce exposure to fluctuations in interest rates. These financial
instruments include commitments to extend credit, letters of credit, standby
letters of credit and interest rate contracts and involve, to varying degrees,
elements of credit and interest rate risk in excess of the amount recognized on
the balance sheet.
Commitments to extend credit are legally binding, conditional
agreements generally having fixed expiration or termination dates and specified
interest rates and purposes. These commitments generally require customers to
maintain certain credit standards. Collateral requirements and loan-to-value
ratios are the same as those for funded transactions and are established based
on management's credit assessment of the customer. Commitments may expire
without being drawn upon. Therefore, the total commitment amount does not
necessarily represent future requirements.
The Company issues letters of credit and financial guarantees (standby
letters of credit) whereby it agrees to honor certain financial commitments in
the event its customers are unable to perform. The majority of the standby
letters of credit consist of performance guarantees. Management conducts regular
reviews of all outstanding standby letters of credit, and the results of these
reviews are considered in assessing the adequacy of the Company's reserve for
possible loan losses. Management does not anticipate any material losses related
to these instruments.
<TABLE>
<CAPTION>
- ---------------------------------------------------------------------------------------
($ in thousands) December 31
- ---------------------------------------------------------------------------------------
1996 1995
- ---------------------------------------------------------------------------------------
Contract Fair Contract Fair
($ in thousands) Amount Value Amount Value
- ---------------------------------------------------------------------------------------
<S> <C> <C> <C> <C>
Commitments
to extend credit ... $1,790,518 $ (16,971) $1,199,500 $ (11,572)
- ---------------------------------------------------------------------------------------
Letters of credit and
financial guarantees $ 131,970 $ (966) $ 116,149 $ (857)
- ---------------------------------------------------------------------------------------
</TABLE>
The Company maintains trading positions in a variety of derivative
financial instruments. These trading activities are customer oriented and,
generally, matched trading positions are established to minimize risk to the
Company. However, to meet the needs of customers, the Company also serves as the
counterparty for certain transactions.
The credit exposure that results from interest-rate contracts held for
trading purposes is limited to the current fair value of asset derivative
positions, which at December 31, 1996 was $913,000. The Company manages the
potential credit exposure through evaluation of the counterparty credit
standing, collateral agreements and other contract provisions. The potential
credit exposure from future market movements is estimated by using a statistical
model that takes into consideration possible changes in interest rates over
time.
The amounts disclosed in the following table represent the
end-of-period notional and fair value of derivative financial instruments held
or issued for trading purposes and the average aggregate fair value of those
instruments during the year. This table includes an interest rate swap agreement
with a notional amount of $68,000,000 as of December 31, 1995. The Company was a
guarantor of this agreement, which was executed by one of the Company's
customers, and the Company's exposure to loss was limited to the difference
between the interest payments the customer was obligated to pay and those it was
entitled to receive. This interest rate swap agreement matured January 2, 1996.
Net trading gains recognized in earnings on interest rate contracts
outstanding were immaterial for all years presented.
<TABLE>
<CAPTION>
- ------------------------------------------------------------------------------------------------------------------------------------
($ in thousands) Notional Value Fair Value Average Fair Value
- ------------------------------------------------------------------------------------------------------------------------------------
December 31 December 31 Year Ended December 31
- ------------------------------------------------------------------------------------------------------------------------------------
1996 1995 1996 1995 1996 1995
- ------------------------------------------------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C> <C> <C>
Interest rate swaps
Assets ..................... $ 56,099 $ 4,716 $ 881 $ 113 $ 993 $ 175
Liabilities ................ $ 46,099 $ 73,566 $ (515) $ (96) $ (726) $ (1,328)
Options, caps and floors held .. $ 53,687 $120,063 $ 32 $ 28 $ (35) $ 177
Options, caps and floors written $ 54,062 $120,598 $ (36) $ (30) $ 30 $ (203)
- ------------------------------------------------------------------------------------------------------------------------------------
</TABLE>
The Company also enters into interest rate contracts in order to manage
interest rate exposure. Interest rate contracts involve the risk of dealing with
counterparties and their ability to meet contractual terms. These counterparties
must receive appropriate credit approval before the Company enters into a rate
contract. Notional principal amounts express the volume of these transactions,
although the amounts potentially subject to credit and market risk are much
smaller. At December 31, 1996 and 1995, the Company was party to several
contracts to manage the interest rate risk of securities available for sale, as
discussed in Note 4.
Note 21
Regulatory Matters and Dividend Restrictions
The Company and the Banks are subject to various regulatory capital
requirements administered by the Federal Reserve Bank (FRB) and the Office of
the Comptroller of the Currency (OCC), respectively. Failure to meet minimum
capital requirements can initiate certain mandatory - and possibly additional
discretionary - actions by the FRB and OCC that, if undertaken, could have a
direct material effect on the Company's financial statements. Under capital
adequacy guidelines and the regulatory framework for prompt corrective action,
the Company and the Banks must meet specific capital guidelines that involve
quantitative measures of assets, liabilities and certain off-balance-sheet items
as calculated under regulatory accounting practices. The Company's and the
Banks' capital amounts and classifications are also subject to qualitative
judgments by the FRB and OCC about components, risk weightings and other
factors.
As of December 31, 1996 and 1995, the most recent notifications from
the OCC categorized the Banks as well capitalized under the regulatory framework
for prompt corrective action. For a bank to be designated as well capitalized,
it must have a leverage capital ratio of at least 5.0% and Tier 1 and total
risk-based ratios of at least 6.0% and 10.0%, respectively. There are no
conditions or events since those notifications that management believes have
changed the Banks' category.
The Company's and the Banks' actual capital amounts and ratios are
presented in the following table.
<TABLE>
<CAPTION>
- ---------------------------------------------------------------------------------------------------
Tier 1 Total Tier 1
($ in thousands) Risk-Based Capital Risk-Based Capital Leverage
- ---------------------------------------------------------------------------------------------------
Amount Ratio Amount Ratio Amount Ratio
- ---------------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C> <C> <C>
December 31, 1996
Hibernia Corporation . $777,075 12.07% $858,137 13.33% $777,075 8.78%
Hibernia National Bank $583,784 9.41% $661,952 10.67% $583,784 6.91%
Hibernia National Bank
of Texas ........... $ 37,183 15.42% $ 40,027 16.60% $ 37,183 9.24%
December 31, 1995
Hibernia Corporation . $732,255 14.66% $795,798 15.93% $732,255 9.71%
Hibernia National Bank $640,988 13.33% $702,198 14.60% $640,988 8.96%
Hibernia National Bank
of Texas ........... $ 34,641 15.26% $ 37,479 16.51% $ 34,641 8.65%
- ---------------------------------------------------------------------------------------------------
</TABLE>
Under current FRB regulations, each of the Banks may lend the Parent
Company up to 10% of their capital and surplus.
The payment of dividends by the Banks to the Parent Company is
restricted by various regulatory and statutory limitations. In 1997, the Banks
will have available to pay dividends to the Parent Company, without approval of
the OCC, approximately $134,830,000, plus net retained profits earned in 1997
prior to the dividend declaration date.
Banks are required to maintain cash on hand or noninterest-bearing
balances with the FRB to meet reserve requirements. Average noninterest-bearing
balances with the FRB were $19,844,000 in 1996 and $27,400,000 in 1995.
Note 22
Contingencies
The Company is a party to certain legal proceedings arising from
matters incidental to its business. Management and counsel are of the opinion
that these actions will not have a material effect on the financial condition or
results of operations of the Company.
<PAGE>
EXHIBIT 21
SUBSIDIARIES OF HIBERNIA CORPORATION
State or Other Jurisdiction of
Name of Subsidiary Incorporation or Organization
- ------------------ ------------------------------
Hibernia National Bank United States
Hibernia National Bank of Texas United States
Hibernia Capital Corporation Louisiana
Hibernia Investment Securities Louisiana
Inc.(1)
Tower Investors, Inc.(1) Louisiana
Zachary Taylor Life Insurance
Company, Inc. Louisiana
- ------------
(1) Subsidiary of Hibernia National Bank
<PAGE>
Exhibit 23
Consent of Independent Auditors
We consent to the incorporation by reference in this Annual Report (Form 10-K)
of Hibernia Corporation of our report dated January 15, 1997, included in the
1996 Anuual Report to shareholders of Hibernia Corporation.
We also consent to the incorporation by reference in the following Hibernia
Corporation Registration Statements
Form S-3 No. 33-26553 (dated February 21, 1989)
Form S-8 No. 2-81353 (dated February 23, 1989)
Form S-8 No. 33-26871 (dated February 23, 1989)
Form S-3 No. 33-37701 (dated January 31, 1991)
Form S-8 No. 2-96194 (dated April 8, 1991)
Form S-3 No. 33-53108 (dated December 28, 1992)
Form S-3 No. 33-55844 (dated December 28, 1992)
Form S-8 No. 33-59743 (dated January 1, 1995)
Form S-3 No. 333-8133 (dated September 19, 1996)
Form S-8 No. 333-07761 (dated July 8, 1996)
Form S-4 No. 333-14583 (dated November 12, 1996)
of our report dated January 15, 1997, with respect to the consolidated financial
statements of Hibernia Corporation incorporated by reference in this Annual
Report (Form 10-K) for the year ended December 31, 1996.
s/ Ernst & Young LLP
New Orleans, Louisiana
March 24, 1997
<PAGE>
P0WER OF ATTORNEY
KNOW ALL MEN BY THESE PRESENTS, that the undersigned Chairman and
director of Hibernia Corporation, a Louisiana corporation (the "Corporation"),
does hereby name, constitute and appoint Robert H. Boh, Patricia C. Meringer,
Gary L. Ryan, and each of them (with full power to each of them to act alone),
his true and lawful agents and attorneys-in-fact, for him and on his behalf and
in his name, place and stead, in any and all capacities, to sign, execute,
acknowledge, deliver, and file with the Securities and Exchange Commission (or
any other governmental or regulatory authority), the Annual Report of the
Corporation on Form 10-K (or other appropriate form) for the fiscal year ended
December 31, 1996, and any and all amendments thereto, with any and all exhibits
and any and all other documents required to be filed with respect thereto or in
connection therewith, granting unto said agents and attorneys, and each of them,
full power and authority to do and perform each and every act and thing
requisite and necessary to be done in and about the premises in order to
effectuate the same as fully to all intents and purposes as the undersigned
might or could do if personally present, and the undersigned hereby ratifies and
confirms all that said agents and attorneys-in-fact, or any of them may lawfully
do or cause to be done by virtue hereof.
IN WITNESS WHEREOF, the undersigned has hereunto set his hand on this
17th day of December, 1996.
/S ROBERT H. BOH
Robert H. Boh
Chairman and Director
HIBERNIA CORPORATION
<PAGE>
P0WER OF ATTORNEY
KNOW ALL MEN BY THESE PRESENTS, that the undersigned director of
Hibernia Corporation, a Louisiana corporation (the "Corporation"), does hereby
name, constitute and appoint Robert H. Boh, Patricia C. Meringer, Gary L. Ryan,
and each of them (with full power to each of them to act alone), his true and
lawful agents and attorneys-in-fact, for him and on his behalf and in his name,
place and stead, in any and all capacities, to sign, execute, acknowledge,
deliver, and file with the Securities and Exchange Commission (or any other
governmental or regulatory authority), the Annual Report of the Corporation on
Form 10-K (or other appropriate form) for the fiscal year ended December 31,
1996, and any and all amendments thereto, with any and all exhibits and any and
all other documents required to be filed with respect thereto or in connection
therewith, granting unto said agents and attorneys, and each of them, full power
and authority to do and perform each and every act and thing requisite and
necessary to be done in and about the premises in order to effectuate the same
as fully to all intents and purposes as the undersigned might or could do if
personally present, and the undersigned hereby ratifies and confirms all that
said agents and attorneys-in-fact, or any of them may lawfully do or cause to be
done by virtue hereof.
IN WITNESS WHEREOF, the undersigned has hereunto set his hand on this
17th day of December, 1996.
/S J. HERBERT BOYDSTUN
J. Herbert Boydstun
Director
HIBERNIA CORPORATION
<PAGE>
P0WER OF ATTORNEY
KNOW ALL MEN BY THESE PRESENTS, that the undersigned director of
Hibernia Corporation, a Louisiana corporation (the "Corporation"), does hereby
name, constitute and appoint Robert H. Boh, Patricia C. Meringer, Gary L. Ryan,
and each of them (with full power to each of them to act alone), his true and
lawful agents and attorneys-in-fact, for him and on his behalf and in his name,
place and stead, in any and all capacities, to sign, execute, acknowledge,
deliver, and file with the Securities and Exchange Commission (or any other
governmental or regulatory authority), the Annual Report of the Corporation on
Form 10-K (or other appropriate form) for the fiscal year ended December 31,
1996, and any and all amendments thereto, with any and all exhibits and any and
all other documents required to be filed with respect thereto or in connection
therewith, granting unto said agents and attorneys, and each of them, full power
and authority to do and perform each and every act and thing requisite and
necessary to be done in and about the premises in order to effectuate the same
as fully to all intents and purposes as the undersigned might or could do if
personally present, and the undersigned hereby ratifies and confirms all that
said agents and attorneys-in-fact, or any of them may lawfully do or cause to be
done by virtue hereof.
IN WITNESS WHEREOF, the undersigned has hereunto set his hand on this
17th day of December, 1996.
/S J. TERRELL BROWN
J. Terrell Brown
Director
HIBERNIA CORPORATION
<PAGE>
P0WER OF ATTORNEY
KNOW ALL MEN BY THESE PRESENTS, that the undersigned director of
Hibernia Corporation, a Louisiana corporation (the "Corporation"), does hereby
name, constitute and appoint Robert H. Boh, Patricia C. Meringer, Gary L. Ryan,
and each of them (with full power to each of them to act alone), his true and
lawful agents and attorneys-in-fact, for him and on his behalf and in his name,
place and stead, in any and all capacities, to sign, execute, acknowledge,
deliver, and file with the Securities and Exchange Commission (or any other
governmental or regulatory authority), the Annual Report of the Corporation on
Form 10-K (or other appropriate form) for the fiscal year ended December 31,
1996, and any and all amendments thereto, with any and all exhibits and any and
all other documents required to be filed with respect thereto or in connection
therewith, granting unto said agents and attorneys, and each of them, full power
and authority to do and perform each and every act and thing requisite and
necessary to be done in and about the premises in order to effectuate the same
as fully to all intents and purposes as the undersigned might or could do if
personally present, and the undersigned hereby ratifies and confirms all that
said agents and attorneys-in-fact, or any of them may lawfully do or cause to be
done by virtue hereof.
IN WITNESS WHEREOF, the undersigned has hereunto set his hand on this
17th day of December, 1996.
/S E. R. "BO" CAMPBELL
E. R. "Bo" Campbell
Director
HIBERNIA CORPORATION
<PAGE>
P0WER OF ATTORNEY
KNOW ALL MEN BY THESE PRESENTS, that the undersigned director of
Hibernia Corporation, a Louisiana corporation (the "Corporation"), does hereby
name, constitute and appoint Robert H. Boh, Patricia C. Meringer, Gary L. Ryan,
and each of them (with full power to each of them to act alone), his true and
lawful agents and attorneys-in-fact, for him and on his behalf and in his name,
place and stead, in any and all capacities, to sign, execute, acknowledge,
deliver, and file with the Securities and Exchange Commission (or any other
governmental or regulatory authority), the Annual Report of the Corporation on
Form 10-K (or other appropriate form) for the fiscal year ended December 31,
1996, and any and all amendments thereto, with any and all exhibits and any and
all other documents required to be filed with respect thereto or in connection
therewith, granting unto said agents and attorneys, and each of them, full power
and authority to do and perform each and every act and thing requisite and
necessary to be done in and about the premises in order to effectuate the same
as fully to all intents and purposes as the undersigned might or could do if
personally present, and the undersigned hereby ratifies and confirms all that
said agents and attorneys-in-fact, or any of them may lawfully do or cause to be
done by virtue hereof.
IN WITNESS WHEREOF, the undersigned has hereunto set his hand on this
17th day of December, 1996.
/S RICHARD W. FREEMAN, JR.
Richard W. Freeman, Jr.
Director
HIBERNIA CORPORATION
<PAGE>
P0WER OF ATTORNEY
KNOW ALL MEN BY THESE PRESENTS, that the undersigned President, Chief
Executive Officer and director of Hibernia Corporation, a Louisiana corporation
(the "Corporation"), does hereby name, constitute and appoint Robert H. Boh,
Patricia C. Meringer, Gary L. Ryan, and each of them (with full power to each of
them to act alone), his true and lawful agents and attorneys-in-fact, for him
and on his behalf and in his name, place and stead, in any and all capacities,
to sign, execute, acknowledge, deliver, and file with the Securities and
Exchange Commission (or any other governmental or regulatory authority), the
Annual Report of the Corporation on Form 10-K (or other appropriate form) for
the fiscal year ended December 31, 1996, and any and all amendments thereto,
with any and all exhibits and any and all other documents required to be filed
with respect thereto or in connection therewith, granting unto said agents and
attorneys, and each of them, full power and authority to do and perform each and
every act and thing requisite and necessary to be done in and about the premises
in order to effectuate the same as fully to all intents and purposes as the
undersigned might or could do if personally present, and the undersigned hereby
ratifies and confirms all that said agents and attorneys-in-fact, or any of them
may lawfully do or cause to be done by virtue hereof.
IN WITNESS WHEREOF, the undersigned has hereunto set his hand on this
17th day of December, 1996.
/S STEPHEN A. HANSEL
Stephen A. Hansel
President, Chief Executive
Officer and Director
HIBERNIA CORPORATION
<PAGE>
P0WER OF ATTORNEY
KNOW ALL MEN BY THESE PRESENTS, that the undersigned director of
Hibernia Corporation, a Louisiana corporation (the "Corporation"), does hereby
name, constitute and appoint Robert H. Boh, Patricia C. Meringer, Gary L. Ryan,
and each of them (with full power to each of them to act alone), his true and
lawful agents and attorneys-in-fact, for him and on his behalf and in his name,
place and stead, in any and all capacities, to sign, execute, acknowledge,
deliver, and file with the Securities and Exchange Commission (or any other
governmental or regulatory authority), the Annual Report of the Corporation on
Form 10-K (or other appropriate form) for the fiscal year ended December 31,
1996, and any and all amendments thereto, with any and all exhibits and any and
all other documents required to be filed with respect thereto or in connection
therewith, granting unto said agents and attorneys, and each of them, full power
and authority to do and perform each and every act and thing requisite and
necessary to be done in and about the premises in order to effectuate the same
as fully to all intents and purposes as the undersigned might or could do if
personally present, and the undersigned hereby ratifies and confirms all that
said agents and attorneys-in-fact, or any of them may lawfully do or cause to be
done by virtue hereof.
IN WITNESS WHEREOF, the undersigned has hereunto set his hand on this
17th day of December, 1996.
/S DICK H. HEARIN
Dick H. Hearin
Director
HIBERNIA CORPORATION
<PAGE>
P0WER OF ATTORNEY
KNOW ALL MEN BY THESE PRESENTS, that the undersigned director of
Hibernia Corporation, a Louisiana corporation (the "Corporation"), does hereby
name, constitute and appoint Robert H. Boh, Patricia C. Meringer, Gary L. Ryan,
and each of them (with full power to each of them to act alone), his true and
lawful agents and attorneys-in-fact, for him and on his behalf and in his name,
place and stead, in any and all capacities, to sign, execute, acknowledge,
deliver, and file with the Securities and Exchange Commission (or any other
governmental or regulatory authority), the Annual Report of the Corporation on
Form 10-K (or other appropriate form) for the fiscal year ended December 31,
1996, and any and all amendments thereto, with any and all exhibits and any and
all other documents required to be filed with respect thereto or in connection
therewith, granting unto said agents and attorneys, and each of them, full power
and authority to do and perform each and every act and thing requisite and
necessary to be done in and about the premises in order to effectuate the same
as fully to all intents and purposes as the undersigned might or could do if
personally present, and the undersigned hereby ratifies and confirms all that
said agents and attorneys-in-fact, or any of them may lawfully do or cause to be
done by virtue hereof.
IN WITNESS WHEREOF, the undersigned has hereunto set his hand on this
17th day of December, 1996.
/S ROBERT T. HOLLEMAN
Robert T. Holleman
Director
HIBERNIA CORPORATION
<PAGE>
P0WER OF ATTORNEY
KNOW ALL MEN BY THESE PRESENTS, that the undersigned Vice Chairman and
director of Hibernia Corporation, a Louisiana corporation (the "Corporation"),
does hereby name, constitute and appoint Robert H. Boh, Patricia C. Meringer,
Gary L. Ryan, and each of them (with full power to each of them to act alone),
his true and lawful agents and attorneys-in-fact, for him and on his behalf and
in his name, place and stead, in any and all capacities, to sign, execute,
acknowledge, deliver, and file with the Securities and Exchange Commission (or
any other governmental or regulatory authority), the Annual Report of the
Corporation on Form 10-K (or other appropriate form) for the fiscal year ended
December 31, 1996, and any and all amendments thereto, with any and all exhibits
and any and all other documents required to be filed with respect thereto or in
connection therewith, granting unto said agents and attorneys, and each of them,
full power and authority to do and perform each and every act and thing
requisite and necessary to be done in and about the premises in order to
effectuate the same as fully to all intents and purposes as the undersigned
might or could do if personally present, and the undersigned hereby ratifies and
confirms all that said agents and attorneys-in-fact, or any of them may lawfully
do or cause to be done by virtue hereof.
IN WITNESS WHEREOF, the undersigned has hereunto set his hand on this
17th day of December, 1996.
/S HUGH J. KELLY
Hugh J. Kelly
Vice Chairman and Director
HIBERNIA CORPORATION
<PAGE>
P0WER OF ATTORNEY
KNOW ALL MEN BY THESE PRESENTS, that the undersigned director of
Hibernia Corporation, a Louisiana corporation (the "Corporation"), does hereby
name, constitute and appoint Robert H. Boh, Patricia C. Meringer, Gary L. Ryan,
and each of them (with full power to each of them to act alone), his true and
lawful agents and attorneys-in-fact, for him and on his behalf and in his name,
place and stead, in any and all capacities, to sign, execute, acknowledge,
deliver, and file with the Securities and Exchange Commission (or any other
governmental or regulatory authority), the Annual Report of the Corporation on
Form 10-K (or other appropriate form) for the fiscal year ended December 31,
1996, and any and all amendments thereto, with any and all exhibits and any and
all other documents required to be filed with respect thereto or in connection
therewith, granting unto said agents and attorneys, and each of them, full power
and authority to do and perform each and every act and thing requisite and
necessary to be done in and about the premises in order to effectuate the same
as fully to all intents and purposes as the undersigned might or could do if
personally present, and the undersigned hereby ratifies and confirms all that
said agents and attorneys-in-fact, or any of them may lawfully do or cause to be
done by virtue hereof.
IN WITNESS WHEREOF, the undersigned has hereunto set his hand on this
17th day of December, 1996.
/S ELTON R. KING
Elton R. King
Director
HIBERNIA CORPORATION
<PAGE>
P0WER OF ATTORNEY
KNOW ALL MEN BY THESE PRESENTS, that the undersigned director of
Hibernia Corporation, a Louisiana corporation (the "Corporation"), does hereby
name, constitute and appoint Robert H. Boh, Patricia C. Meringer, Gary L. Ryan,
and each of them (with full power to each of them to act alone), his true and
lawful agents and attorneys-in-fact, for him and on his behalf and in his name,
place and stead, in any and all capacities, to sign, execute, acknowledge,
deliver, and file with the Securities and Exchange Commission (or any other
governmental or regulatory authority), the Annual Report of the Corporation on
Form 10-K (or other appropriate form) for the fiscal year ended December 31,
1996, and any and all amendments thereto, with any and all exhibits and any and
all other documents required to be filed with respect thereto or in connection
therewith, granting unto said agents and attorneys, and each of them, full power
and authority to do and perform each and every act and thing requisite and
necessary to be done in and about the premises in order to effectuate the same
as fully to all intents and purposes as the undersigned might or could do if
personally present, and the undersigned hereby ratifies and confirms all that
said agents and attorneys-in-fact, or any of them may lawfully do or cause to be
done by virtue hereof.
IN WITNESS WHEREOF, the undersigned has hereunto set his hand on this
17th day of December, 1996.
/S SIDNEY W. LASSEN
Sidney W. Lassen
Director
HIBERNIA CORPORATION
<PAGE>
P0WER OF ATTORNEY
KNOW ALL MEN BY THESE PRESENTS, that the undersigned director of
Hibernia Corporation, a Louisiana corporation (the "Corporation"), does hereby
name, constitute and appoint Robert H. Boh, Patricia C. Meringer, Gary L. Ryan,
and each of them (with full power to each of them to act alone), his true and
lawful agents and attorneys-in-fact, for him and on his behalf and in his name,
place and stead, in any and all capacities, to sign, execute, acknowledge,
deliver, and file with the Securities and Exchange Commission (or any other
governmental or regulatory authority), the Annual Report of the Corporation on
Form 10-K (or other appropriate form) for the fiscal year ended December 31,
1996, and any and all amendments thereto, with any and all exhibits and any and
all other documents required to be filed with respect thereto or in connection
therewith, granting unto said agents and attorneys, and each of them, full power
and authority to do and perform each and every act and thing requisite and
necessary to be done in and about the premises in order to effectuate the same
as fully to all intents and purposes as the undersigned might or could do if
personally present, and the undersigned hereby ratifies and confirms all that
said agents and attorneys-in-fact, or any of them may lawfully do or cause to be
done by virtue hereof.
IN WITNESS WHEREOF, the undersigned has hereunto set his hand on this
17th day of December, 1996.
/S LAURA A. LEACH
Laura A. Leach
Director
HIBERNIA CORPORATION
<PAGE>
P0WER OF ATTORNEY
KNOW ALL MEN BY THESE PRESENTS, that the undersigned Vice Chairman and
director of Hibernia Corporation, a Louisiana corporation (the "Corporation"),
does hereby name, constitute and appoint Robert H. Boh, Patricia C. Meringer,
Gary L. Ryan, and each of them (with full power to each of them to act alone),
his true and lawful agents and attorneys-in-fact, for him and on his behalf and
in his name, place and stead, in any and all capacities, to sign, execute,
acknowledge, deliver, and file with the Securities and Exchange Commission (or
any other governmental or regulatory authority), the Annual Report of the
Corporation on Form 10-K (or other appropriate form) for the fiscal year ended
December 31, 1996, and any and all amendments thereto, with any and all exhibits
and any and all other documents required to be filed with respect thereto or in
connection therewith, granting unto said agents and attorneys, and each of them,
full power and authority to do and perform each and every act and thing
requisite and necessary to be done in and about the premises in order to
effectuate the same as fully to all intents and purposes as the undersigned
might or could do if personally present, and the undersigned hereby ratifies and
confirms all that said agents and attorneys-in-fact, or any of them may lawfully
do or cause to be done by virtue hereof.
IN WITNESS WHEREOF, the undersigned has hereunto set his hand on this
17th day of December, 1996.
/S DONALD J. NALTY
Donald J. Nalty
Vice Chairman and Director
HIBERNIA CORPORATION
<PAGE>
P0WER OF ATTORNEY
KNOW ALL MEN BY THESE PRESENTS, that the undersigned director of
Hibernia Corporation, a Louisiana corporation (the "Corporation"), does hereby
name, constitute and appoint Robert H. Boh, Patricia C. Meringer, Gary L. Ryan,
and each of them (with full power to each of them to act alone), his true and
lawful agents and attorneys-in-fact, for him and on his behalf and in his name,
place and stead, in any and all capacities, to sign, execute, acknowledge,
deliver, and file with the Securities and Exchange Commission (or any other
governmental or regulatory authority), the Annual Report of the Corporation on
Form 10-K (or other appropriate form) for the fiscal year ended December 31,
1996, and any and all amendments thereto, with any and all exhibits and any and
all other documents required to be filed with respect thereto or in connection
therewith, granting unto said agents and attorneys, and each of them, full power
and authority to do and perform each and every act and thing requisite and
necessary to be done in and about the premises in order to effectuate the same
as fully to all intents and purposes as the undersigned might or could do if
personally present, and the undersigned hereby ratifies and confirms all that
said agents and attorneys-in-fact, or any of them may lawfully do or cause to be
done by virtue hereof.
IN WITNESS WHEREOF, the undersigned has hereunto set his hand on this
17th day of December, 1996.
/S WILLIAM C. O'MALLEY
William C. O'Malley
Director
HIBERNIA CORPORATION
<PAGE>
P0WER OF ATTORNEY
KNOW ALL MEN BY THESE PRESENTS, that the undersigned director of
Hibernia Corporation, a Louisiana corporation (the "Corporation"), does hereby
name, constitute and appoint Robert H. Boh, Patricia C. Meringer, Gary L. Ryan,
and each of them (with full power to each of them to act alone), his true and
lawful agents and attorneys-in-fact, for him and on his behalf and in his name,
place and stead, in any and all capacities, to sign, execute, acknowledge,
deliver, and file with the Securities and Exchange Commission (or any other
governmental or regulatory authority), the Annual Report of the Corporation on
Form 10-K (or other appropriate form) for the fiscal year ended December 31,
1996, and any and all amendments thereto, with any and all exhibits and any and
all other documents required to be filed with respect thereto or in connection
therewith, granting unto said agents and attorneys, and each of them, full power
and authority to do and perform each and every act and thing requisite and
necessary to be done in and about the premises in order to effectuate the same
as fully to all intents and purposes as the undersigned might or could do if
personally present, and the undersigned hereby ratifies and confirms all that
said agents and attorneys-in-fact, or any of them may lawfully do or cause to be
done by virtue hereof.
IN WITNESS WHEREOF, the undersigned has hereunto set his hand on this
17th day of December, 1996.
/S ROBERT T. RATCLIFF
Robert T. Ratcliff
Director
HIBERNIA CORPORATION
<PAGE>
P0WER OF ATTORNEY
KNOW ALL MEN BY THESE PRESENTS, that the undersigned director of
Hibernia Corporation, a Louisiana corporation (the "Corporation"), does hereby
name, constitute and appoint Robert H. Boh, Patricia C. Meringer, Gary L. Ryan,
and each of them (with full power to each of them to act alone), his true and
lawful agents and attorneys-in-fact, for him and on his behalf and in his name,
place and stead, in any and all capacities, to sign, execute, acknowledge,
deliver, and file with the Securities and Exchange Commission (or any other
governmental or regulatory authority), the Annual Report of the Corporation on
Form 10-K (or other appropriate form) for the fiscal year ended December 31,
1996, and any and all amendments thereto, with any and all exhibits and any and
all other documents required to be filed with respect thereto or in connection
therewith, granting unto said agents and attorneys, and each of them, full power
and authority to do and perform each and every act and thing requisite and
necessary to be done in and about the premises in order to effectuate the same
as fully to all intents and purposes as the undersigned might or could do if
personally present, and the undersigned hereby ratifies and confirms all that
said agents and attorneys-in-fact, or any of them may lawfully do or cause to be
done by virtue hereof.
IN WITNESS WHEREOF, the undersigned has hereunto set his hand on this
17th day of December, 1996.
/S H. DUKE SHACKELFORD
H. Duke Shackelford
Director
HIBERNIA CORPORATION
<PAGE>
P0WER OF ATTORNEY
KNOW ALL MEN BY THESE PRESENTS, that the undersigned director of
Hibernia Corporation, a Louisiana corporation (the "Corporation"), does hereby
name, constitute and appoint Robert H. Boh, Patricia C. Meringer, Gary L. Ryan,
and each of them (with full power to each of them to act alone), his true and
lawful agents and attorneys-in-fact, for him and on his behalf and in his name,
place and stead, in any and all capacities, to sign, execute, acknowledge,
deliver, and file with the Securities and Exchange Commission (or any other
governmental or regulatory authority), the Annual Report of the Corporation on
Form 10-K (or other appropriate form) for the fiscal year ended December 31,
1996, and any and all amendments thereto, with any and all exhibits and any and
all other documents required to be filed with respect thereto or in connection
therewith, granting unto said agents and attorneys, and each of them, full power
and authority to do and perform each and every act and thing requisite and
necessary to be done in and about the premises in order to effectuate the same
as fully to all intents and purposes as the undersigned might or could do if
personally present, and the undersigned hereby ratifies and confirms all that
said agents and attorneys-in-fact, or any of them may lawfully do or cause to be
done by virtue hereof.
IN WITNESS WHEREOF, the undersigned has hereunto set his hand on this
17th day of December, 1996.
/S JAMES H. STONE
James H. Stone
Director
HIBERNIA CORPORATION
<PAGE>
P0WER OF ATTORNEY
KNOW ALL MEN BY THESE PRESENTS, that the undersigned director of
Hibernia Corporation, a Louisiana corporation (the "Corporation"), does hereby
name, constitute and appoint Robert H. Boh, Patricia C. Meringer, Gary L. Ryan,
and each of them (with full power to each of them to act alone), his true and
lawful agents and attorneys-in-fact, for him and on his behalf and in his name,
place and stead, in any and all capacities, to sign, execute, acknowledge,
deliver, and file with the Securities and Exchange Commission (or any other
governmental or regulatory authority), the Annual Report of the Corporation on
Form 10-K (or other appropriate form) for the fiscal year ended December 31,
1996, and any and all amendments thereto, with any and all exhibits and any and
all other documents required to be filed with respect thereto or in connection
therewith, granting unto said agents and attorneys, and each of them, full power
and authority to do and perform each and every act and thing requisite and
necessary to be done in and about the premises in order to effectuate the same
as fully to all intents and purposes as the undersigned might or could do if
personally present, and the undersigned hereby ratifies and confirms all that
said agents and attorneys-in-fact, or any of them may lawfully do or cause to be
done by virtue hereof.
IN WITNESS WHEREOF, the undersigned has hereunto set his hand on this
17th day of December, 1996.
/S JANEE M. "GEE" TUCKER
Janee M. "Gee" Tucker
Director
HIBERNIA CORPORATION
<PAGE>
P0WER OF ATTORNEY
KNOW ALL MEN BY THESE PRESENTS, that the undersigned director of
Hibernia Corporation, a Louisiana corporation (the "Corporation"), does hereby
name, constitute and appoint Robert H. Boh, Patricia C. Meringer, Gary L. Ryan,
and each of them (with full power to each of them to act alone), his true and
lawful agents and attorneys-in-fact, for him and on his behalf and in his name,
place and stead, in any and all capacities, to sign, execute, acknowledge,
deliver, and file with the Securities and Exchange Commission (or any other
governmental or regulatory authority), the Annual Report of the Corporation on
Form 10-K (or other appropriate form) for the fiscal year ended December 31,
1996, and any and all amendments thereto, with any and all exhibits and any and
all other documents required to be filed with respect thereto or in connection
therewith, granting unto said agents and attorneys, and each of them, full power
and authority to do and perform each and every act and thing requisite and
necessary to be done in and about the premises in order to effectuate the same
as fully to all intents and purposes as the undersigned might or could do if
personally present, and the undersigned hereby ratifies and confirms all that
said agents and attorneys-in-fact, or any of them may lawfully do or cause to be
done by virtue hereof.
IN WITNESS WHEREOF, the undersigned has hereunto set his hand on this
17th day of December, 1996.
/S VIRGINIA E. WEINMANN
Virginia E. Weinmann
Director
HIBERNIA CORPORATION
<PAGE>
P0WER OF ATTORNEY
KNOW ALL MEN BY THESE PRESENTS, that the undersigned director of
Hibernia Corporation, a Louisiana corporation (the "Corporation"), does hereby
name, constitute and appoint Robert H. Boh, Patricia C. Meringer, Gary L. Ryan,
and each of them (with full power to each of them to act alone), his true and
lawful agents and attorneys-in-fact, for him and on his behalf and in his name,
place and stead, in any and all capacities, to sign, execute, acknowledge,
deliver, and file with the Securities and Exchange Commission (or any other
governmental or regulatory authority), the Annual Report of the Corporation on
Form 10-K (or other appropriate form) for the fiscal year ended December 31,
1996, and any and all amendments thereto, with any and all exhibits and any and
all other documents required to be filed with respect thereto or in connection
therewith, granting unto said agents and attorneys, and each of them, full power
and authority to do and perform each and every act and thing requisite and
necessary to be done in and about the premises in order to effectuate the same
as fully to all intents and purposes as the undersigned might or could do if
personally present, and the undersigned hereby ratifies and confirms all that
said agents and attorneys-in-fact, or any of them may lawfully do or cause to be
done by virtue hereof.
IN WITNESS WHEREOF, the undersigned has hereunto set his hand on this
17th day of December, 1996.
/S ROBERT E. ZETZMANN
Robert E. Zetzmann
Director
HIBERNIA CORPORATION
<PAGE>
P0WER OF ATTORNEY
KNOW ALL MEN BY THESE PRESENTS, that the undersigned Controller and
Chief Accounting Officer of Hibernia Corporation, a Louisiana corporation (the
"Corporation"), does hereby name, constitute and appoint Robert H. Boh, Patricia
C. Meringer, Gary L. Ryan, and each of them (with full power to each of them to
act alone), his true and lawful agents and attorneys-in-fact, for him and on his
behalf and in his name, place and stead, in any and all capacities, to sign,
execute, acknowledge, deliver, and file with the Securities and Exchange
Commission (or any other governmental or regulatory authority), the Annual
Report of the Corporation on Form 10-K (or other appropriate form) for the
fiscal year ended December 31, 1996, and any and all amendments thereto, with
any and all exhibits and any and all other documents required to be filed with
respect thereto or in connection therewith, granting unto said agents and
attorneys, and each of them, full power and authority to do and perform each and
every act and thing requisite and necessary to be done in and about the premises
in order to effectuate the same as fully to all intents and purposes as the
undersigned might or could do if personally present, and the undersigned hereby
ratifies and confirms all that said agents and attorneys-in-fact, or any of them
may lawfully do or cause to be done by virtue hereof.
IN WITNESS WHEREOF, the undersigned has hereunto set his hand on this
17th day of December, 1996.
/S RON E. SAMFORD, JR.
Ron E. Samford, Jr.
Controller and Chief Accounting
Officer
HIBERNIA CORPORATION
<PAGE>
P0WER OF ATTORNEY
KNOW ALL MEN BY THESE PRESENTS, that the undersigned Chief Financial
Officer of Hibernia Corporation, a Louisiana corporation (the "Corporation"),
does hereby name, constitute and appoint Robert H. Boh, Patricia C. Meringer,
Gary L. Ryan, and each of them (with full power to each of them to act alone),
his true and lawful agents and attorneys-in-fact, for him and on his behalf and
in his name, place and stead, in any and all capacities, to sign, execute,
acknowledge, deliver, and file with the Securities and Exchange Commission (or
any other governmental or regulatory authority), the Annual Report of the
Corporation on Form 10-K (or other appropriate form) for the fiscal year ended
December 31, 1996, and any and all amendments thereto, with any and all exhibits
and any and all other documents required to be filed with respect thereto or in
connection therewith, granting unto said agents and attorneys, and each of them,
full power and authority to do and perform each and every act and thing
requisite and necessary to be done in and about the premises in order to
effectuate the same as fully to all intents and purposes as the undersigned
might or could do if personally present, and the undersigned hereby ratifies and
confirms all that said agents and attorneys-in-fact, or any of them may lawfully
do or cause to be done by virtue hereof.
IN WITNESS WHEREOF, the undersigned has hereunto set his hand on this
17th day of December, 1996.
/S MARSHA M. GASSAN
Marsha M. Gassan
Chief Financial Officer
HIBERNIA CORPORATION
<TABLE> <S> <C>
<ARTICLE> 9
<MULTIPLIER> 1000
<CURRENCY> U.S. DOLLARS
<S> <C>
<PERIOD-TYPE> YEAR
<FISCAL-YEAR-END> DEC-31-1996
<PERIOD-END> DEC-31-1996
<EXCHANGE-RATE> 1
<CASH> 558,440
<INT-BEARING-DEPOSITS> 293
<FED-FUNDS-SOLD> 158,000
<TRADING-ASSETS> 0
<INVESTMENTS-HELD-FOR-SALE> 2,178,674
<INVESTMENTS-CARRYING> 0
<INVESTMENTS-MARKET> 0
<LOANS> 6,043,028
<ALLOWANCE> 127,768
<TOTAL-ASSETS> 9,306,796
<DEPOSITS> 7,821,803
<SHORT-TERM> 331,796
<LIABILITIES-OTHER> 165,463
<LONG-TERM> 51,349
0
100,000
<COMMON> 247,306
<OTHER-SE> 589,079
<TOTAL-LIABILITIES-AND-EQUITY> 9,306,796
<INTEREST-LOAN> 477,299
<INTEREST-INVEST> 138,549
<INTEREST-OTHER> 9,780
<INTEREST-TOTAL> 625,628
<INTEREST-DEPOSIT> 242,570
<INTEREST-EXPENSE> 259,411
<INTEREST-INCOME-NET> 366,217
<LOAN-LOSSES> (12,625)
<SECURITIES-GAINS> (5,306)
<EXPENSE-OTHER> 319,733
<INCOME-PRETAX> 169,468
<INCOME-PRE-EXTRAORDINARY> 109,950
<EXTRAORDINARY> 0
<CHANGES> 0
<NET-INCOME> 109,950
<EPS-PRIMARY> 0.85
<EPS-DILUTED> 0.85
<YIELD-ACTUAL> 4.89
<LOANS-NON> 16,043
<LOANS-PAST> 5,281
<LOANS-TROUBLED> 0
<LOANS-PROBLEM> 29,800
<ALLOWANCE-OPEN> 150,516
<CHARGE-OFFS> 34,875
<RECOVERIES> 19,141
<ALLOWANCE-CLOSE> 127,768
<ALLOWANCE-DOMESTIC> 127,768
<ALLOWANCE-FOREIGN> 0
<ALLOWANCE-UNALLOCATED> 31,700
</TABLE>
WARNING: THE EDGAR SYSTEM ENCOUNTERED ERROR(S) WHILE PROCESSING THIS SCHEDULE.
<TABLE> <S> <C>
<ARTICLE> 9
<LEGEND>
RESTATED FINANCIAL DATA SCHEDULE
</LEGEND>
<MULTIPLIER> 1000
<CURRENCY> U.S. DOLLARS
<S> <C> <C> <C>
<PERIOD-TYPE> 9-MOS 6-MOS 3-MOS
<FISCAL-YEAR-END> DEC-31-1996 DEC-31-1996 DEC-31-1996
<PERIOD-END> SEP-30-1996 JUN-30-1996 MAR-31-1996
<EXCHANGE-RATE> 1 1 1
<CASH> 448,911 355,035 325,994
<INT-BEARING-DEPOSITS> 656 566 583
<FED-FUNDS-SOLD> 261,200 66,000 245,800
<TRADING-ASSETS> 0 0 0
<INVESTMENTS-HELD-FOR-SALE> 2,049,074 2,037,136 2,165,841
<INVESTMENTS-CARRYING> 0 0 0
<INVESTMENTS-MARKET> 0 0 0
<LOANS> 5,717,550 5,204,449 4,956,434
<ALLOWANCE> 133,221 147,222 147,854
<TOTAL-ASSETS> 8,807,679 7,855,221 7,880,554
<DEPOSITS> 7,375,959 6,628,909 6,651,024
<SHORT-TERM> 363,496 296,669 291,798
<LIABILITIES-OTHER> 145,988 120,763 127,627
<LONG-TERM> 17,880 26,842 35,052
0 0 0
100,000 0 0
<COMMON> 246,876 246,438 246,371
<OTHER-SE> 556,912 535,161 528,683
<TOTAL-LIABILITIES-AND-EQUITY> 8,807,679 7,855,221 7,880,554
<INTEREST-LOAN> 344,364 224,101 108,846
<INTEREST-INVEST> 102,739 69,923 36,303
<INTEREST-OTHER> 7,175 4,812 2,587
<INTEREST-TOTAL> 454,278 298,836 147,736
<INTEREST-DEPOSIT> 176,656 115,844 57,673
<INTEREST-EXPENSE> 188,685 123,643 61,485
<INTEREST-INCOME-NET> 265,593 175,193 86,251
<LOAN-LOSSES> (12,625) 975 425
<SECURITIES-GAINS> (5,470) 113 67
<EXPENSE-OTHER> 235,522 146,637 72,708
<INCOME-PRETAX> 121,345 83,406 40,584
<INCOME-PRE-EXTRAORDINARY> 79,015 54,446 26,302
<EXTRAORDINARY> 0 0 0
<CHANGES> 0 0 0
<NET-INCOME> 79,015 54,446 26,302
<EPS-PRIMARY> 0.62 0.43 0.21
<EPS-DILUTED> 0.62 0.43 0.21
<YIELD-ACTUAL> 4.89 4.90 4.83
<LOANS-NON> 15,050 18,217 18,886
<LOANS-PAST> 3,617 4,256 5,996
<LOANS-TROUBLED> 0 0 0
<LOANS-PROBLEM> 30,210 21,100 21,800
<ALLOWANCE-OPEN> 150,516 150,516 150,516
<CHARGE-OFFS> 23,974 14,113 7,109
<RECOVERIES> 13,989 9,844 4,022
<ALLOWANCE-CLOSE> 133,221 147,222 147,854
<ALLOWANCE-DOMESTIC> 133,221 147,222 147,854
<ALLOWANCE-FOREIGN> 0 0 0
</TABLE>
<TABLE> <S> <C>
<ARTICLE> 9
<LEGEND>
RESTATED FINANCIAL DATA SCHEDULE
</LEGEND>
<MULTIPLIER> 1000
<CURRENCY> U.S. DOLLARS
<S> <C>
<PERIOD-TYPE> YEAR
<FISCAL-YEAR-END> DEC-31-1995
<PERIOD-END> DEC-31-1995
<EXCHANGE-RATE> 1
<CASH> 403,667
<INT-BEARING-DEPOSITS> 927
<FED-FUNDS-SOLD> 96,321
<TRADING-ASSETS> 0
<INVESTMENTS-HELD-FOR-SALE> 2,350,229
<INVESTMENTS-CARRYING> 0
<INVESTMENTS-MARKET> 0
<LOANS> 4,723,195
<ALLOWANCE> 150,516
<TOTAL-ASSETS> 7,755,719
<DEPOSITS> 6,569,697
<SHORT-TERM> 265,126
<LIABILITIES-OTHER> 118,728
<LONG-TERM> 34,361
0
0
<COMMON> 246,357
<OTHER-SE> 521,450
<TOTAL-LIABILITIES-AND-EQUITY> 7,755,719
<INTEREST-LOAN> 389,609
<INTEREST-INVEST> 195,869
<INTEREST-OTHER> 7,368
<INTEREST-TOTAL> 562,846
<INTEREST-DEPOSIT> 226,669
<INTEREST-EXPENSE> 242,090
<INTEREST-INCOME-NET> 320,756
<LOAN-LOSSES> 1,140
<SECURITIES-GAINS> 248
<EXPENSE-OTHER> 284,078
<INCOME-PRETAX> 139,752
<INCOME-PRE-EXTRAORDINARY> 128,885
<EXTRAORDINARY> 0
<CHANGES> 0
<NET-INCOME> 128,885
<EPS-PRIMARY> 1.02
<EPS-DILUTED> 1.02
<YIELD-ACTUAL> 4.69
<LOANS-NON> 17,692
<LOANS-PAST> 2,922
<LOANS-TROUBLED> 0
<LOANS-PROBLEM> 23,100
<ALLOWANCE-OPEN> 156,005
<CHARGE-OFFS> 24,985
<RECOVERIES> 18,356
<ALLOWANCE-CLOSE> 150,516
<ALLOWANCE-DOMESTIC> 150,516
<ALLOWANCE-FOREIGN> 0
<ALLOWANCE-UNALLOCATED> 45,700
</TABLE>
WARNING: THE EDGAR SYSTEM ENCOUNTERED ERROR(S) WHILE PROCESSING THIS SCHEDULE.
<TABLE> <S> <C>
<ARTICLE> 9
<LEGEND>
RESTATED FINANCIAL DATA SCHEDULE
</LEGEND>
<MULTIPLIER> 1000
<CURRENCY> U.S. DOLLARS
<S> <C> <C> <C>
<PERIOD-TYPE> 9-MOS 6-MOS 3-MOS
<FISCAL-YEAR-END> DEC-31-1995 DEC-31-1995 DEC-31-1995
<PERIOD-END> SEP-30-1995 JUN-30-1995 MAR-31-1995
<EXCHANGE-RATE> 1 1 1
<CASH> 332,240 381,032 314,110
<INT-BEARING-DEPOSITS> 884 21,025 9,886
<FED-FUNDS-SOLD> 94,530 54,510 102,599
<TRADING-ASSETS> 0 0 0
<INVESTMENTS-HELD-FOR-SALE> 721,323 751,758 789,394
<INVESTMENTS-CARRYING> 1,721,166 1,939,334 1,998,660
<INVESTMENTS-MARKET> 1,725,833 1,940,827 1,968,280
<LOANS> 4,455,803 4,226,279 3,995,753
<ALLOWANCE> 154,594 154,417 155,873
<TOTAL-ASSETS> 7,497,830 7,552,218 7,375,273
<DEPOSITS> 6,382,342 6,429,101 6,366,523
<SHORT-TERM> 242,238 281,425 201,757
<LIABILITIES-OTHER> 121,777 116,316 110,819
<LONG-TERM> 26,093 29,889 18,867
0 0 0
0 0 0
<COMMON> 246,333 246,279 246,253
<OTHER-SE> 479,047 449,209 431,055
<TOTAL-LIABILITIES-AND-EQUITY> 7,497,830 7,552,218 7,375,273
<INTEREST-LOAN> 284,085 184,157 89,150
<INTEREST-INVEST> 127,138 86,010 42,208
<INTEREST-OTHER> 5,987 3,592 2,746
<INTEREST-TOTAL> 417,210 273,759 134,104
<INTEREST-DEPOSIT> 169,151 111,203 54,186
<INTEREST-EXPENSE> 180,393 118,057 56,756
<INTEREST-INCOME-NET> 236,817 155,702 77,348
<LOAN-LOSSES> 690 160 130
<SECURITIES-GAINS> 198 19 52
<EXPENSE-OTHER> 209,927 142,387 72,163
<INCOME-PRETAX> 103,969 65,058 30,358
<INCOME-PRE-EXTRAORDINARY> 94,778 59,327 27,348
<EXTRAORDINARY> 0 0 0
<CHANGES> 0 0 0
<NET-INCOME> 94,778 59,327 27,348
<EPS-PRIMARY> 0.74 0.46 0.21
<EPS-DILUTED> 0.74 0.46 0.21
<YIELD-ACTUAL> 4.65 4.64 4.64
<LOANS-NON> 19,992 21,257 22,166
<LOANS-PAST> 3,337 5,386 4,401
<LOANS-TROUBLED> 0 0 0
<LOANS-PROBLEM> 4,400 6,400 6,800
<ALLOWANCE-OPEN> 156,005 156,005 156,005
<CHARGE-OFFS> 16,499 11,074 5,807
<RECOVERIES> 14,397 9,325 5,544
<ALLOWANCE-CLOSE> 154,594 154,417 155,873
<ALLOWANCE-DOMESTIC> 154,594 154,417 155,873
<ALLOWANCE-FOREIGN> 0 0 0
</TABLE>
<TABLE> <S> <C>
<ARTICLE> 9
<LEGEND>
RESTATED FINANCIAL DATA SCHEDULE
</LEGEND>
<MULTIPLIER> 1000
<CURRENCY> U.S. DOLLARS
<S> <C>
<PERIOD-TYPE> YEAR
<FISCAL-YEAR-END> DEC-31-1994
<PERIOD-END> DEC-31-1994
<EXCHANGE-RATE> 1
<CASH> 406,399
<INT-BEARING-DEPOSITS> 8,714
<FED-FUNDS-SOLD> 206,802
<TRADING-ASSETS> 0
<INVESTMENTS-HELD-FOR-SALE> 783,094
<INVESTMENTS-CARRYING> 1,904,278
<INVESTMENTS-MARKET> 1,831,666
<LOANS> 3,818,920
<ALLOWANCE> 156,005
<TOTAL-ASSETS> 7,294,469
<DEPOSITS> 6,344,337
<SHORT-TERM> 173,490
<LIABILITIES-OTHER> 117,899
<LONG-TERM> 21,012
0
0
<COMMON> 246,054
<OTHER-SE> 391,677
<TOTAL-LIABILITIES-AND-EQUITY> 7,294,469
<INTEREST-LOAN> 307,545
<INTEREST-INVEST> 164,459
<INTEREST-OTHER> 7,941
<INTEREST-TOTAL> 479,945
<INTEREST-DEPOSIT> 169,633
<INTEREST-EXPENSE> 178,829
<INTEREST-INCOME-NET> 301,116
<LOAN-LOSSES> (17,869)
<SECURITIES-GAINS> (1,669)
<EXPENSE-OTHER> 302,918
<INCOME-PRETAX> 109,245
<INCOME-PRE-EXTRAORDINARY> 101,460
<EXTRAORDINARY> 0
<CHANGES> 0
<NET-INCOME> 101,460
<EPS-PRIMARY> 0.80
<EPS-DILUTED> 0.80
<YIELD-ACTUAL> 4.59
<LOANS-NON> 22,210
<LOANS-PAST> 4,403
<LOANS-TROUBLED> 6,024
<LOANS-PROBLEM> 12,000
<ALLOWANCE-OPEN> 186,562
<CHARGE-OFFS> 31,520
<RECOVERIES> 18,832
<ALLOWANCE-CLOSE> 156,005
<ALLOWANCE-DOMESTIC> 156,005
<ALLOWANCE-FOREIGN> 0
<ALLOWANCE-UNALLOCATED> 36,700
</TABLE>
