As Filed with the Securities and Exchange Commission on May 8, 1998
REGISTRATION NO. 333-_____
SECURITIES AND EXCHANGE COMMISSION
Washington, D. C. 20549
-----------------------------
FORM S-4
REGISTRATION STATEMENT
UNDER
THE SECURITIES ACT OF 1933
-----------------------------
HIBERNIA CORPORATION
(Exact name of registrant as specified in its charter)
Louisiana 6711 72-0724532
(State or other (Primary Standard (I.R.S. Employer
jurisdiction of Industrial Identification No.)
incorporation or Classification
organization) Code Number)
313 Carondelet Street
New Orleans, Louisiana 70130
(504) 533-5332
(Address, including zip code, and telephone number, including area code, of
registrant's principal executive offices)
-----------------------------
Gary L. Ryan
Senior Vice President and Corporate Counsel
Hibernia Corporation
313 Carondelet Street
New Orleans, Louisiana 70130
(504) 533-5560
(Name, address, including zip code, and telephone number, including area
code of agent for service)
------------------------------------------------------
COPIES TO:
Patricia C. Meringer Cheryn L. Netz
Senior Vice President and Watkins Ludlam
Corporate Counsel Winter & Stennis P.A.
Hibernia Corporation 633 North State Street
313 Carondelet Street Jackson, Mississippi 39202
New Orleans, Louisiana 70130 (601) 949-4900
(504) 533-2486
-----------------------------------------------------
APPROXIMATE DATE OF COMMENCEMENT OF PROPOSED SALE OF SECURITIES TO THE PUBLIC:
As soon as practicable after this registration statement is declared
effective.
If the securities being registered on this Form are being offered in
connection with the formation of a holding company and there is compliance with
General Instruction G, check the following box.
CALCULATION OF REGISTRATION FEE
- ------------------------------------------------------------------------
Title of each Amount to be Proposed Proposed Amount of
class of registered maximum maximum registration
securities to offering aggregate fee (1)
be registered price per offering
share (1) price (1)
- --------------------------------------------------------------------------
Class A 3,937,353 $7.52 $29,612,644 $8,736
Common Stock, shares
no par value
- -----------------------------------------------------------------
(1) Based upon the book value of the securities to be received by the registrant
or canceled in the exchange or transaction as of December 31, 1997 of
$29,612,644 pursuant to Rule 457(f)(2) of the Securities Act of 1933, as
amended.
THE REGISTRANT HEREBY AMENDS THIS REGISTRATION STATEMENT ON SUCH DATE OR DATES
AS MAY BE NECESSARY TO DELAY ITS EFFECTIVE DATE UNTIL THE REGISTRANT WILL FILE A
FURTHER AMENDMENT WHICH SPECIFICALLY STATES THAT THIS REGISTRATION STATEMENT
WILL THEREAFTER BECOME EFFECTIVE IN ACCORDANCE WITH SECTION 8(A) OF THE
SECURITIES ACT OF 1933, OR UNTIL THE REGISTRATION STATEMENT WILL BECOME
EFFECTIVE ON SUCH DATE AS THE COMMISSION, ACTING PURSUANT TO SAID SECTION 8(A),
MAY DETERMINE.
NOTICE OF SPECIAL MEETING OF SHAREHOLDERS
OF
PEOPLES HOLDING CORPORATION
________ __, 1998
You are hereby notified that a special meeting of Peoples Holding
Corporation will be held at the main office of Peoples Bank and Trust Company,
618 Main Street, Minden, Louisiana 70155-3327 on June 16, 1998 at 2:00 P.M. The
following matters will be considered and voted upon at this meeting:
1. A proposal to approve the Agreement and Plan of Merger dated February
10, 1998 between Peoples and Hibernia Corporation. The Merger Agreement provides
that Peoples will be merged into Hibernia, and Hibernia will survive the Merger.
As a result of the Merger, each outstanding share of common stock, $10.00 per
share par value, of Peoples will be converted into at least 9.5 but no more than
10.5 shares of Hibernia Common Stock.
2. A proposal to approve the Merger between Peoples and Hibernia.
Both the Agreement and the Merger are described in more detail in the
accompanying Proxy Statement Prospectus.
Any other business that is properly brought before the Special Meeting
will be acted upon at the Meeting.
Each shareholder who is the owner of record of Peoples Common Stock at
the close of business on May 1, 1998 is entitled to vote on the matters
presented at the Special Meeting. Those shareholders are also entitled to
receive notice of the Special Meeting. If there is any adjournment or
postponement of the Special Meeting, those shareholders of record also will be
entitled to vote at the adjournment or postponement as well.
Each share of Peoples Common Stock will entitle its holder to one vote
on all matters that come before the Special Meeting. A majority of the issued
and outstanding shares of Peoples must be present in person or by proxy to
constitute a quorum for purposes of the Meeting. If a quorum is present, the
vote of a majority of the shares represented at the Meeting will be required to
approve the Merger.
If the Merger is approved by a vote of less than 80% of the issued and
outstanding shares of Peoples Stock, you may have the right to receive the fair
value of your Peoples Stock in cash. In order to receive cash, however, you must
comply with the procedures required by Louisiana law, and you must vote your
shares against the Merger.
THE PEOPLES BOARD OF DIRECTORS UNANIMOUSLY RECOMMENDS THAT YOU VOTE
"FOR" THE APPROVAL OF THE AGREEMENT AND THE MERGER.
Your vote is important, even if you do not plan to attend the Special
Meeting. Also, even if you own a small number of shares, please take a moment to
complete, date and sign the enclosed proxy card.
Your proxy may be revoked in three ways:
- - by notice to the Secretary of Peoples prior to the date of the Special
Meeting,
- - by attending the Special Meeting and voting in person or
- - by executing and delivering a later dated proxy to the Secretary prior
to the Special Meeting.
By Order of the Board of Directors,
Ralph S. Williams
President and Chief Executive Officer
PROXY STATEMENT
PEOPLES HOLDING CORPORATION
SPECIAL MEETING OF SHAREHOLDERS
TO BE HELD ON JUNE 16, 1998
PROSPECTUS
HIBERNIA CORPORATION
3,937,353 SHARES OF
CLASS A COMMON STOCK
(NO PAR VALUE)
We are furnishing you this Proxy Statement-Prospectus because you are a
holder of Peoples Common Stock. The Board of Directors of Peoples is soliciting
proxies for use at the Special Meeting and at any adjournments or postponements
of the Meeting. The Special Meeting will be held at 2:00 P.M., local time, on
June 16, 1998, at the office of Peoples, 618 Main Street, Minden, Louisiana
71055.
At the Special Meeting, holders of record of Peoples Common Stock as of
the close of business on the Record Date will vote upon a proposal to approve
the Merger Agreement and the Merger. If the Merger is approved, each outstanding
share of Peoples Common Stock (with a few exceptions, discussed below) will be
converted into shares of Hibernia Common Stock. Shares of Peoples Common Stock
owned by Hibernia or its subsidiaries and shares as to which dissenters' rights
have been exercised and perfected will not be converted into Hibernia Stock. If
the Merger is approved, holders of Peoples Common Stock will receive between 9.5
and 10.5 shares of Hibernia Common Stock. (The exact number of shares to be
issued is discussed further below.) Fractional shares will not be issued. Anyone
entitled to a fraction of a share of Hibernia Common Stock will instead receive
cash for that portion of a share. The Merger Agreement is included in its
entirety as Appendix A to this Proxy Statement-Prospectus. It is also described
in more detail under the heading "PROPOSED MERGER."
This Proxy Statement-Prospectus is also a prospectus of Hibernia for the
shares of Hibernia Common Stock to be issued if the Merger is consummated.
The outstanding shares of Hibernia Common Stock are listed on the NYSE.
The reported last sale price of Hibernia Common Stock on the NYSE Composite
Transactions Reporting System on May __, 1998 was $______ per share. (The value
of 10 shares of Hibernia Common Stock on that day was $____ based on this
price.)
This Proxy Statement-Prospectus and the accompanying proxy card are
first being mailed to shareholders of Peoples on or about May 14, 1998.
No one is authorized to give any information or to make any
representations other than those contained in this Proxy Statement-Prospectus.
If any other information or representations are given or made, you may not rely
upon them as having been made by Hibernia or Peoples.
THESE SECURITIES HAVE NOT BEEN APPROVED OR DISAPPROVED BY THE SECURITIES
AND EXCHANGE COMMISSION NOR HAS THE COMMISSION PASSED UPON THE ACCURACY OR
ADEQUACY OF THIS PROXY STATEMENT-PROSPECTUS. ANY REPRESENTATION TO THE CONTRARY
IS A CRIMINAL OFFENSE.
THE SHARES OF HIBERNIA COMMON STOCK OFFERED HEREBY ARE NOT SAVINGS
ACCOUNTS, DEPOSITS OR OTHER OBLIGATIONS OF A BANK OR SAVINGS ASSOCIATION AND ARE
NOT INSURED BY THE FEDERAL DEPOSIT INSURANCE CORPORATION OR ANY OTHER
GOVERNMENTAL AGENCY.
The date of this Proxy Statement-Prospectus is May 8, 1998.
TABLE OF CONTENTS
INTRODUCTION.............................................................
AVAILABLE INFORMATION....................................................
INCORPORATION OF CERTAIN DOCUMENTS BY REFERENCE..........................
CERTAIN DEFINITIONS......................................................
SUMMARY..................................................................
The Proposed Merger..............................................
Management and Operations After the Merger.......................
Recommendation of the Board of Directors.........................
Basis for the Terms of the Merger................................
Advice and Opinion of financial Advisor..........................
Quorum and Vote Required.........................................
Conditions; Abandonment; Amendments..............................
Interests of Certain Persons in the Merger.......................
Employee Benefits................................................
Material Tax Consequences........................................
Dissenters' Rights...............................................
Differences in Shareholders' Rights..............................
Accounting Treatment.............................................
Merger Activity..................................................
THE PARTIES TO THE MERGER................................................
Hibernia.........................................................
Selected Financial Data..........................................
Peoples..........................................................
Peoples Selected Financial Data..................................
Pro Forma Combined Selected Financial Information (Unaudited)....
Comparative Per Share Information (Unaudited)....................
MEETING INFORMATION......................................................
Solicitation and Revocation of Proxies...........................
Quorum and Vote Required.........................................
Recommendation...................................................
PROPOSED MERGER..........................................................
General..........................................................
Background of and Reasons for the Merger.........................
Terms of the Merger..............................................
Opinion of Financial Advisor.....................................
Closing Date and Effective Date of the Merger....................
Employee Benefits................................................
Surrender and Exchange of Stock Certificates.....................
Expenses.........................................................
Representations and Warranties...................................
Conditions to the Merger; Waiver.................................
Regulatory and Other Approvals...................................
Business Pending the Merger......................................
Termination......................................................
Management and Operations after the Merger.......................
Certain Differences in the Rights of Shareholders................
Interests of Certain Persons in the Merger.......................
Material Tax Consequences........................................
Resale of Hibernia Common Stock..................................
Rights of Dissenting Shareholders................................
Accounting Treatment.............................................
CERTAIN REGULATORY CONSIDERATIONS........................................
General..........................................................
Payment of Dividends.............................................
Restrictions on Extensions of Credit.............................
PRO FORMA FINANCIAL INFORMATION..........................................
CERTAIN INFORMATION CONCERNING PEOPLES AND THE BANK......................
Description of Principal Business................................
Supervision and Regulation.......................................
Competition......................................................
Seasonality of Business and Customers............................
Employees........................................................
Properties.......................................................
Legal Proceedings................................................
Stock Prices and Dividends.......................................
Security Ownership of Principal Shareholders and Management......
PEOPLES CONSOLIDATED FINANCIAL STATEMENTS FOR THE YEARS ENDED
AS OF AND FOR DECEMBER 31, 1997 AND DECEMBER 31, 1996 (Audited)..
MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND
RESULTS OF OPERATIONS OF PEOPLES HOLDING CORPORATION FOR THE TWELVE
MONTHS ENDED DECEMBER 31, 1997 AND DECEMBER 31, 1996....
RELATIONSHIP WITH INDEPENDENT AUDITORS...................................
VALIDITY OF SHARES.......................................................
EXPERTS..................................................................
APPENDICES
APPENDIX A AGREEMENT AND PLAN OF MERGER
APPENDIX B FAIRNESS OPINION OF PROFESSIONAL BANK SERVICES, INC.
APPENDIX C PROVISIONS OF LOUISIANA LAW RELATING TO DISSENTERS' RIGHTS
APPENDIX D TAX OPINION OF ERNST & YOUNG LLP
INTRODUCTION
This Proxy Statement-Prospectus describes a proposed merger between
Peoples and Hibernia and the Special Meeting at which shareholders of Peoples
will VOTE upon the Merger. It also contains information about the parties to the
Merger and other information of interest to Peoples' shareholders.
If the Merger is completed, Peoples will be merged into Hibernia, and
Hibernia will be the corporation surviving the Merger. In that case,
shareholders of Peoples who do not exercise and perfect their dissenters' rights
under Louisiana law will receive between 9.5 and 10.5 shares of Hibernia Stock
for each share of Peoples Stock they own at the time the Merger is effective.
The precise number of shares to be issued and the formula for determining that
number is described elsewhere in this Proxy Statement. No fractional shares of
Hibernia Stock will be issued. Shareholders of Peoples entitled to receive a
fraction of a share will be paid cash instead of that fractional share. See
"PROPOSED MERGER - Terms of the Merger."
The maximum number of shares of Hibernia Stock that Hibernia will issue
to the shareholders of Peoples in the Merger is 3,937,353. This number of shares
is registered on this Registration Statement.
Shareholders of Peoples will be asked to approve the Merger Agreement
and Merger at the Special Meeting which will be held on June 16, 1998. The proxy
statement relating to the Special Meeting is included in this Proxy
Statement-Prospectus.
The terms of the Merger are described in this Proxy Statement-Prospectus
(see "Proposed Merger"). Also, a copy of the Merger Agreement is attached as
Appendix A.
AVAILABLE INFORMATION
Hibernia is a public company and is required to file certain reports
with the SEC. You may review and copy these reports, proxy statements and other
information at the following places:
- - the public reference facilities of the SEC at Room 1024, 450 Fifth Street,
N.W., Washington, D.C. 20549 (copies may be made at prescribed rates),
- - at the SEC's Regional Office located at 7 World Trade Center, Suite 1300,
New York, New York 10007
- - at the SEC's Regional Office located 500 West Madison Street, Suite 1400,
Chicago, Illinois 60661-2511
- - at the offices of the New York Stock Exchange, Inc., 20 Broad Street, New
York, New York 10005.
The SEC maintains a web site on the Internet that contains reports,
proxy and information statements and other information about public companies.
The address of that site is http://www.sec.gov. Certain recent reports filed
with the SEC are also available at Hibernia's web site at
http:/www.hiberniabank.com. Hibernia's Internet web site also includes news
releases and product and service information about Hibernia.
Hibernia has filed a registration statement on Form S-4 with the SEC
that registers the Hibernia Common Stock included in this Prospectus. This Proxy
Statement-Prospectus does not contain all of the information in the Registration
Statement. Please refer to the Registration Statement for further information
about Hibernia and the Hibernia Common Stock to be exchanged in the Merger.
Statements contained in this Proxy Statement-Prospectus concerning the
provisions of certain documents included in the Registration Statement are not
necessarily complete. A complete copy of each document is filed as an exhibit to
the Registration Statement. You may obtain copies of all or any part of the
Registration Statement, including exhibits thereto, upon payment of the
prescribed fees, at the offices of the SEC and the NYSE listed above.
All information contained in this Proxy Statement-Prospectus relating to
Hibernia and its subsidiaries has been supplied by Hibernia. All information
relating to Peoples and its subsidiaries has been supplied by Peoples.
INCORPORATION OF CERTAIN DOCUMENTS BY REFERENCE
The following documents filed by Hibernia with the SEC are incorporated
by reference in this Proxy Statement- Prospectus:
* its Annual Report on Form 10-K for the year ended December 31, 1997;
* its definitive Proxy Statement filed with the SEC on March 20, 1998 relating
to its 1998 Annual Meeting of Shareholders held on April 21, 1998 (except for
the information contained therein under the headings "Executive Compensation --
Report of the Executive Compensation Committee" and "Executive Compensation --
Stock Performance Graph", which are expressly excluded from incorporation in
this Registration Statement);
* the Description of Capital Stock included in its Current Report on Form 8-K
dated November 2, 1994;
* and " a Current Report on Form 8-K dated January 12, 1998.
All documents filed by Hibernia with the SEC pursuant to Sections 13(a),
13(c), 14 or 15(d) of the Exchange Act after the date of this Proxy
Statement-Prospectus and prior to the termination of the offering of Hibernia
Common Stock made hereby will be deemed to be incorporated by reference in this
Proxy Statement-Prospectus from the date they are filed. No statement made in
this Proxy Statement-Prospectus modifies or supersedes any statement contained
in a document incorporated or deemed to be incorporated by reference. Any
statement so modified or superseded will not be deemed to constitute a part of
this Proxy Statement-Prospectus, except as so modified or superseded.
If you are a beneficial owner of Peoples Common Stock and would like a
copy of any of the information incorporated by reference in this Proxy
Statement-Prospectus other than exhibits to such information (unless such
exhibits are specifically incorporated by reference into such information),
Hibernia will provide it to you without charge. If you would like to receive any
of that information, please call or write to Hibernia Corporation, 313
Carondelet Street, New Orleans, Louisiana 70130, Attention: Assistant Secretary,
Telephone (504) 533-3411. You should make your request made before __________,
1998 in order to receive the information prior to the Meeting.
CERTAIN DEFINITIONS
We have used certain defined terms and abbreviations throughout the
Proxy Statement-Prospectus for ease of reference and consistency. These defined
terms and their definitions are included below:
Advisor or PBS -- Professional Bank Services, Inc., the financial advisor to
Peoples
Code or Internal Revenue Code -- the Internal Revenue Code of 1986, as amended
Effective Date -- the date on which the Merger becomes effective, as specified
in Section 14 of the Merger Agreement
ESOP -- Hibernia Corporation's Employee Stock Ownership Plan, as amended to date
Exchange Act -- the Securities Exchange Act of 1934, as amended, and the rules
and regulations promulgated under it
Exchange Rate -- the number of shares of Hibernia Common Stock to be exchanged
for each share of Peoples Common Stock in the Merger, as determined in
accordance with Section 3.8 of the Merger Agreement
Fairness Opinion -- the opinion of Professional Bank Services, included as
Appendix B to the Proxy Statement- Prospectus
Federal Reserve or Federal Reserve Board -- the Board of Governors of the
Federal Reserve System
Hibernia -- Hibernia Corporation, a Louisiana corporation and the holding
company of Hibernia National Bank and Hibernia National Bank of Texas
Hibernia Common Stock or Hibernia Stock -- the Class A Common Stock, no par
value, of Hibernia, which will be exchanged for Peoples Common Stock in the
Merger if the Merger is approved
HNB -- Hibernia National Bank, a national bank and wholly-owned subsidiary of
Hibernia
LBCL -- the Louisiana Business Corporation Law, La. Rev. Stat. Section 12:1 et
al.
Merger -- the merger of Peoples Holding Corporation with and into Hibernia
Corporation described herein and in the Merger Agreement
Merger Agreement or Agreement -- the Agreement and Plan of Merger between
Hibernia and Peoples dated as of February 10, 1998, a copy of which is attached
to this Proxy Statement/Prospectus as Appendix A
NYSE -- New York Stock Exchange, Inc.
OCC -- Office of the Comptroller of the Currency, the federal regulatory agency
for national banks
OFI -- Office of Financial Institutions, the primary regulatory of state banks
organized in Louisiana
Peoples -- Peoples Holding Corporation, a Louisiana corporation and the holding
company of Peoples Bank and Trust Company
Peoples Bank or the Bank -- Peoples Bank & Trust Company, a Louisiana banking
corporation and a wholly-owned subsidiary of Peoples
Peoples Common Stock or Peoples Stock -- the common stock, par value $10.00 of
Peoples, which will be surrendered in exchange for Hibernia Common Stock if the
Merger is approved
Record Date -- May 1, 1998, the date on which an individual or company must be a
shareholder of Peoples in order to vote at the Special Meeting
Registration Statement -- the registration statement filed with the SEC by
Hibernia, including all amendments and exhibits to it, relating to the Hibernia
Common Stock to be exchanged in the Merger
SEC -- the Securities and Exchange Commission
Securities Act -- the Securities Act of 1933, as amended, and the rules and
regulations promulgated under it
Special Meeting or Meeting -- the special meeting of shareholders of Peoples
scheduled to be held at 2:00 p.m. on June 16, 1998 at which shareholders of
Peoples will vote on the Merger and the Agreement
Tax Opinion -- the opinion of Ernst & Young LLP, attached to the Proxy
Statement-Prospectus as Appendix D, relating to certain federal tax implications
of the Merger
SUMMARY
We have prepared this summary to assist shareholders of Peoples in their
review of this Proxy Statement-Prospectus. It is necessarily general and
abbreviated, and it is not intended to be a complete explanation of all of the
matters covered in this Proxy Statement-Prospectus. This summary is qualified in
its entirety by reference to the more detailed information contained elsewhere
in this Proxy Statement-Prospectus, the Appendices and the documents
incorporated herein by reference. We urge shareholders of Peoples to read all of
those documents in their entirety prior to the Special Meeting.
The Proposed Merger
The shareholders of Peoples will consider and vote upon the Agreement
and the Merger at the Special Meeting. If the shareholders of Peoples approve
the Agreement and the Merger and the other conditions to completing the
Merger are satisfied, the Merger will be consummated on a date thereafter chosen
by the parties. See "PROPOSED MERGER -- Representations and Warranties" and
"Conditions to the Merger; Waiver" for more information about the conditions to
completing the Merger. Shareholders of Peoples ( other than those who exercise
and perfect dissenters' rights under Louisiana law) will receive at least 9.5,
but no more than 10.5 shares of Hibernia Common Stock in exchange for each share
of Peoples Common Stock they own. The precise number of shares to be exchanged
will be determined as follows:
[$69,375,000 -:- 375,000] -:- $X
where X = the Average Market Price of Hibernia Common Stock at the Closing. The
Average Market Price for this purpose is the average of the closing prices of
Hibernia Common Stock on the NYSE for the 10 business days prior to the last
trading day prior to the Closing. If the Average Market Price is higher than
$19.47, then the Exchange Rate will be 9.5 shares of Hibernia Stock for each
share of Peoples Stock. If the Average Market Price is less than $17.62 then the
Exchange Rate will be 10.5 shares of Hibernia Stock for each share of Peoples
Stock.
Peoples shareholders who would otherwise receive a fraction of a share
of Hibernia Stock will receive cash instead of that fractional share.
Management and Operations After the Merger
Peoples and the Bank will cease to exist after the Merger. The business
of the Bank will be conducted through Hibernia National Bank after the Merger.
The Boards of Directors of Hibernia and HNB will not change as a result of the
Merger.
Recommendation of the Board of Directors
THE BOARD OF DIRECTORS OF PEOPLES HAS UNANIMOUSLY APPROVED THE AGREEMENT
AND THE MERGER AND BELIEVES THAT THE MERGER IS IN THE BEST INTERESTS OF THE
PEOPLES SHAREHOLDERS. THE PEOPLES BOARD RECOMMENDS THAT YOU VOTE FOR THE MERGER
AND THE AGREEMENT. (See "MEETING INFORMATION.") The Board of Directors has
received a fairness opinion from Professional Bank Services that the terms of
the Merger are fair, from a financial point of view, to the shareholders of
Peoples. See "PROPOSED MERGER -- Opinion of Financial Advisor." The Peoples
Board believes that the Merger will provide significant value to all Peoples
shareholders. In recommending the Merger to the shareholders, the Peoples Board
considered, among other factors:
* the financial terms of the Merger,
* the liquidity the Merger will afford Peoples shareholders;
* and the business earnings and potential for future growth of Peoples and
Hibernia.
See "PROPOSED MERGER -- Background of and Reasons for the Merger."
Basis for the Terms of the Merger
The Peoples Board considered a number of factors in approving the terms
of the Merger, including:
* information concerning the financial condition, results of operations and
prospects of Hibernia, Peoples, HNB and the Bank;
* Peoples' ability to compete in its relevant banking markets and to face
additional competitive pressures due to changes in the regulatory environment;
* the market price of Hibernia Common Stock;
* the absence of an active trading market for Peoples Common Stock;
* the consideration to be received by Peoples shareholders in relation to
Peoples earnings and book value;
* the anticipated tax-free nature of the Merger to Peoples shareholders for
federal income tax purposes;
* and the financial terms of other recent business combinations in the banking
industry.
See "PROPOSED MERGER -- Background of and Reasons for the Merger."
Advice and Opinion of Financial Advisor
Professional Bank Services has rendered an opinion to Peoples that the
terms of the Merger are fair, from a financial point of view, to the
shareholders of Peoples. The opinion is based on and subject to the procedures,
matters and limitations described in it and other matters that Professional Bank
Services considered relevant. The Fairness Opinion is attached to this Proxy
Statement - Prospectus as Appendix B. We urge you to read the entire opinion,
which includes a description of the procedures followed, matters considered, and
limitations on the reviews undertaken by Professional Bank Services. See
"PROPOSED MERGER -- Opinion of Financial Advisor."
Quorum and Vote Required
A majority of the issued and outstanding shares of Peoples Stock must be
present in person or by proxy at the Meeting in order for a quorum to be
present. If a quorum is not present, the Meeting will be adjourned, and no vote
will be taken until and unless a quorum is present. The affirmative vote of the
holders of a majority of the shares of Peoples Common Stock present at the
Meeting is required to approve the Merger. Votes may be cast in person or by
proxy at the Special Meeting. (See "MEETING INFORMATION.") Those shareholders
who own Peoples Stock at the close of business on May 1, 1998 will be entitled
to vote at the Special Meeting. Directors and executive officers of Peoples own
60,044 shares of Peoples Common Stock. These individuals have the right to vote
16.01 of the Peoples Common Stock issued and outstanding as of the Record Date.
See "CERTAIN INFORMATION CONCERNING PEOPLES AND THE BANK -- Security Ownership
of Principal Shareholders and Management." The directors of Peoples have agreed
to vote the stock over which they have voting power in favor of the Merger and
the Agreement at the Special Meeting (except in certain limited circumstances).
See "MEETING INFORMATION" and "CERTAIN INFORMATION CONCERNING PEOPLES AND THE
BANK -- Security Ownership of Principal Shareholders and Management." Hibernia
shareholders are not required to approve the Merger under Louisiana law.
Conditions; Abandonment; Amendment
A number of conditions must be met in order for the Merger to be
completed. These conditions include, among others:
* approval of the Agreement by the required vote of the shareholders of Peoples;
* approval of the proposed transactions by the Federal Reserve and the OCC;
* holders of no more than 9.8% of the Peoples Common Stock exercise and perfect
dissenters' rights.
The Merger may not be consummated until at least 15 days after approval of the
Merger by the Federal Reserve Board is obtained. Once the Federal Reserve has
approved the Merger, it must be completed within 90 days. See "PROPOSED MERGER
- -- Representations and Warranties" and "-- Conditions to the Merger; Waiver" and
"PROPOSED MERGER -- Regulatory and Other Approvals."
Nearly all of the conditions to consummation of the Merger may be waived
at any time by the party for whose benefit they were created. (Shareholder and
regulatory approvals may not be waived.) Also, the Agreement may be amended or
supplemented at any time by written agreement of Peoples and Hibernia. No
waiver, amendment or supplement executed after approval of the Agreement by
Peoples shareholders may reduce the Exchange Rate to be issued in the Merger.
Any other material change to the Agreement after the date of the Special Meeting
would require, however, a resolicitation of Peoples shareholders for the purpose
of voting on the Merger. In addition, the Agreement may be terminated, either
before or after shareholder approval, under certain circumstances. See "PROPOSED
MERGER -- Representations and Warranties" and "--Conditions to the Merger;
Waiver" and "PROPOSED MERGER -- Closing Date and Effective Date of the Merger;
Termination."
Interests of Certain Persons in the Merger
The executive officers and directors of Peoples have interests in the
Merger that are in addition to their interests as shareholders of Peoples. These
benefits include, among others:
* the continuation of certain employee benefits, and
* provisions in the Agreement relating to the indemnification of officers,
directors and employees of Peoples for certain liabilities up to certain
aggregate limitations.
In addition, Ralph Williams has agreed to a two-year employment contract with
Hibernia at his current salary. See "PROPOSED MERGER -- Employee Benefits" and
- -- "Interests of Certain Persons in the Merger."
Employee Benefits
Hibernia has agreed to offer to all former employees of Peoples and/or
the Bank who become employees of Hibernia or its subsidiaries the same employee
benefits as those offered by Hibernia and HNB to their employees, with certain
exceptions. Hibernia will also give Peoples employees full credit for their
years of service (for both eligibility and vesting) with Peoples for purposes of
Hibernia's 401(k) plan and its ESOP to the extent permitted under the terms of
those plans. See "PROPOSED MERGER---Employee Benefits."
Material Tax Consequences
The Merger Agreement requires the parties to obtain an opinion regarding
the federal tax consequences of the Merger. The parties have received an opinion
of Ernst & Young LLP to the following effects:
* the Merger, when consummated in accordance with the terms of the Agreement,
will constitute a reorganization within the meaning of Section 368(a) of the
Internal Revenue Code,
* the exchange of Peoples Stock to the extent exchanged for Hibernia Common
Stock will not give rise to gain or loss to the shareholders of Peoples with
respect to such exchange,
* the basis of Hibernia Stock to be received by the holders of Peoples Stock
will be, in each instance, the same as the basis in their stock surrendered in
exchange therefor, decreased by the amount of cash received, if any, and
increased by the amount of gain, if any, recognized in the exchange, and
* the holding period of the Hibernia Stock received by holders of Peoples Stock
in the Merger will include in each instance the period during which the Peoples
Stock surrendered in exchange therefor was held as a capital asset on the date
of surrender.
Ernst & Young serves as independent auditors for Hibernia. A copy of the tax
opinion is attached hereto as Appendix D. See "PROPOSED MERGER -- Material Tax
Consequences."
Tax laws are complex, and the tax consequences of the Merger may vary
depending upon a holder's individual circumstances or tax status. For these
reasons, we recommend that you consult your tax advisor concerning the federal
(and any applicable state, local or other) tax consequences of the Merger to
you.
Dissenters' Rights
If you object to the Merger and perfect your rights to dissent from the
Merger, and if the Merger is approved by less than 80% of the outstanding shares
of Peoples Stock, you will be entitled to the rights and remedies of dissenting
shareholders provided in the LBCL, 12: 131 et seq.. Appendix C includes the
relevant provisions of the LBCL regarding dissenters' rights. However, if
dissenters' rights are exercised and perfected with respect to 9.8% or more of
the outstanding shares of Peoples Common Stock, Hibernia may abandon the Merger.
See "PROPOSED MERGER -- Rights of Dissenting Shareholders."
Differences in Shareholders' Rights
Shareholders of Peoples who receive shares of Hibernia Stock in the
Merger will become shareholders of Hibernia. Their rights as shareholders then
will be governed by Hibernia's Articles of Incorporation and Bylaws. The rights
of shareholders of Hibernia are different in certain respects from the rights of
shareholders of Peoples. See "PROPOSED MERGER -- Certain Differences in Rights
of Shareholders."
Accounting Treatment
The parties intend the Merger to be treated as a pooling of interests
for financial accounting purposes. A number of things could prevent the Merger
from qualifying for this accounting treatment. Among those factors are the
number of shareholder of Peoples who exercise and perfect dissenters' rights.
Hibernia may abandon the Merger if it does not qualify for pooling-of-interests
accounting treatment. See "PROPOSED MERGER -- Accounting Treatment."
Merger Activity
The following table shows certain information about two recently
completed merger transactions:
<TABLE>
<CAPTION>
<S> <C> <C> <C> <C> <C>
Name Location Date of Assets Shareholders Shares of
Merger Equity Hibernia
Stock
Issued
ArgentBank Thibodaux, LA 2/1/98 $758 million $86 million 13,317,236
Firstshares of Marshall, Texas 3/15/98 $254 million $24.8 million 3,690,615
Texas, Inc.
(First National
Bank)
</TABLE>
THE PARTIES TO THE MERGER
Hibernia
Hibernia is a Louisiana corporation registered under the Bank Holding
Company Act of 1956, as amended. As of December 31, 1997, Hibernia had total
consolidated assets of approximately $11 billion and shareholders' equity of
approximately $1.1 billion. As of that time, Hibernia was ranked, on the basis
of total assets, as the largest bank holding company headquartered in Louisiana.
As of December 31, 1997, Hibernia had two banking subsidiaries: Hibernia
National Bank and Hibernia National Bank of Texas. Hibernia National Bank
provides retail and commercial banking services through approximately 202
banking offices throughout Louisiana. Hibernia National Bank of Texas provides
retail and commercial banking services through approximately 22 banking offices
in four Texas counties. As of December 31, 1997, HNB was the largest bank
headquartered in Louisiana.
From time to time, Hibernia investigates and holds discussions and
negotiations in connection with possible mergers or similar transactions with
other financial institutions. On January 1, 1998, Hibernia completed its merger
with Northwest Bancshares of Louisiana, Inc. in northwest Louisiana. On February
1, 1998, Hibernia completed its merger with ArgentBank, a bank headquartered in
Thibodaux, Louisiana. On March 15, 1998, Hibernia completed its merger with
Firstshares of Texas, Inc., the holding company of First National Bank
(Marshall), headquartered in Marshall, Texas. On the date of this Proxy
Statement-Prospectus, Hibernia's Merger Agreement with Peoples is the only
definitive agreement relating to a merger to which Hibernia is a party. See
"Summary -- Merger Activity."
Hibernia expects to pursue other possible acquisition opportunities and
intends to continue to pursue such opportunities in the near future. Any
transactions may be entered into before or after the Merger. The terms of any
future transactions cannot be predicted at this time. Also, future transactions
would be subject to regulatory approval and the approval of shareholders of the
acquired institution if required by law.
The principal executive offices of Hibernia are located at 313 Carondelet
Street, New Orleans, Louisiana 70130, and its telephone number is (504)
533-5532. For additional information concerning the business and financial
condition of Hibernia, please refer to Hibernia's reports incorporated herein by
reference. See "INCORPORATION OF CERTAIN DOCUMENTS BY REFERENCE."
Selected Financial Data
The closing market price per share of Hibernia Common Stock on the NYSE
on February 9, 1998 was $20.50 ( That day was the business day prior Hibernia's
and Peoples' announcement of their proposed Merger.) The parties do not know
what the market price of Hibernia Common Stock will be on the Closing Date.
<PAGE>
Selected Financial Data of Hibernia
The following table sets forth certain consolidated financial information
for Hibernia. This information is based on the consolidated financial statements
and related notes of Hibernia contained in its Annual Report on Form 10-K for
the year ended December 31, 1997. See "Incorporation of Certain Documents by
Reference."
<PAGE>
<TABLE>
<CAPTION>
HIBERNIA CORPORATION
SELECTED FINANCIAL INFORMATION
Year Ended December 31
- -------------------------------------------------------------------------------------------------------------------------
Unaudited ($ in thousands, except per share amounts)
1997 1996 1995 1994 1993
- -------------------------------------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C> <C>
Net interest income .................. $ 427,757 $ 375,633 $ 328,316 $ 308,025 $ 302,547
Income from continuing operations .... 137,389 112,818 131,412 103,658 74,821
Per common share:
Income from continuing operations . 1.00 0.85 1.01 0.79 0.57
Income from continuing operations -
assuming dilution ............... 0.98 0.84 1.00 0.78 0.57
Cash dividends .................... 0.33 0.29 0.25 0.19 0.03
Book value ........................ 7.24 6.53 6.00 4.93 4.62
SELECTED PERIOD-END BALANCES
Debt ................................. 506,548 57,192 36,069 23,461 42,020
Total assets ......................... 11,023,038 9,560,320 7,933,816 7,464,192 7,279,001
</TABLE>
Peoples
Peoples is a Louisiana corporation and a registered bank holding company
under the BHCA which owns all of the issued and outstanding shares of stock of
Peoples Bank & Trust Company, a banking corporation organized under Louisiana
law. As of December 31, 1997, Peoples had total consolidated assets of $228
million and shareholders' equity of $29.6 million. The Bank has nine offices in
three parishes in Northwest Louisiana. The Bank engages in retail and commercial
banking services, including taking deposits and extending secured and unsecured
credit.
The principal offices of Peoples are located at 618 Main Street, Minden,
Louisiana 71055 and its telephone number is (318) 377-6366. Additional
information concerning the business of Peoples and its financial condition is
included below under the heading "CERTAIN INFORMATION CONCERNING PEOPLES",
"MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS OF
OPERATIONS OF PEOPLES" and "PEOPLES CONSOLIDATED FINANCIAL INFORMATION."
<PAGE>
Selected Financial Data of Peoples Holding Corporation
The following selected financial information of Peoples with respect to
each year in the three-year period ended December 31, 1997 has been derived from
the financial statements of Peoples. The information set forth below should be
read in conjunction with Peoples' financial statements, the notes thereto, and
Peoples' Management's Discussion and Analysis of Financial Condition and Results
of Operations for the years ended December 31, 1997 and 1996 appearing elsewhere
in this Proxy Statement-Prospectus.
<PAGE>
<TABLE>
<CAPTION>
PEOPLES HOLDING CORPORATION
SELECTED FINANCIAL INFORMATION
Year Ended December 31
- --------------------------------------------------------------------------------
($ in thousands, except per share amounts)
1997 1996 1995
- --------------------------------------------------------------------------------
<S> <C> <C> <C>
Net interest income .................. $ 8,924 $ 8,131 $ 6,834
Income from continuing operations .... 3,811 3,228 3,362
Per common share:
Income from continuing operations . 10.15 8.56 8.88
Income from continuing operations -
assuming dilution ............... 10.15 8.56 8.88
Cash dividends .................... 2.00 1.60 1.60
Book value ........................ 78.97 88.64 79.72
SELECTED PERIOD-END BALANCES
Debt ................................. - - -
Total assets ......................... 228,005 228,235 180,198
</TABLE>
<PAGE>
<TABLE>
<CAPTION>
PEOPLES HOLDING CORPORATION
QUARTERLY INCOME RESULTS
- ------------------------------------------------------------------------------------------
Unaudited ($ in thousands, except per share amounts)
<S> <C> <C> <C> <C>
- ------------------------------------------------------------------------------------------
3/31/97 6/30/97 9/30/97 12/31/97
- ------------------------------------------------------------------------------------------
Interest income .... $3,905 $3,994 $3,987 $4,048
Net interest income 2,127 2,218 2,243 2,336
Net income ......... 908 993 964 946
Net income per share 2.42 2.64 2.57 2.52
- ------------------------------------------------------------------------------------------
3/31/96 6/30/96 9/30/96 12/31/96
- ------------------------------------------------------------------------------------------
Interest income .... $3,746 $3,743 $3,830 $3,900
Net interest income 1,966 1,958 2,019 2,188
Net income ......... 819 775 859 775
Net income per share 2.19 2.05 2.27 2.05
</TABLE>
<PAGE>
Pro Forma Combined Selected Financial Information (Unaudited)
The following tables sets forth certain unaudited pro forma combined
selected financial information for Hibernia. The pro forma information, which
reflects the Merger, is presented for information purposes only. The results
shown there are not necessarily indicative of the actual results that might have
occurred if the Merger had been completed at the beginning of the periods
presented. Also, this information is not necessarily indicative of results that
might be achieved in the future if the Merger is completed. See "Pro Forma
Financial Information" contained elsewhere herein.
<PAGE>
<TABLE>
<CAPTION>
PRO FORMA HIBERNIA CORPORATION*
PRO FORMA COMBINED SELECTED FINANCIAL INFORMATION
Year Ended December 31
- ---------------------------------------------------------------------------------------------
Unaudited ($ in thousands, except per share amounts)
1997 1996 1995
- ---------------------------------------------------------------------------------------------
<S> <C> <C> <C>
Net interest income .................. $ 436,681 $ 383,764 $ 335,150
Income from continuing operations .... 141,200 116,046 134,774
Per common share:
Income from continuing operations . 1.00 0.85 1.01
Income from continuing operations -
assuming dilution ............... 0.98 0.85 1.00
Cash dividends .................... 0.33 0.29 0.25
Book value ........................ 7.27 6.55 6.03
SELECTED PERIOD-END BALANCES
Debt ................................. 506,548 57,192 36,069
Total assets ......................... 11,251,134 9,788,555 8,114,014
- -----------
* Includes Hibernia Corporation and Peoples Holding Corporation
</TABLE>
<PAGE>
Comparative Per Share Information (Unaudited)
The following tables sets forth for Hibernia Common Stock and Peoples
Common Stock certain unaudited pro forma combined and unaudited pro forma
equivalent per share financial information for the years ended December 31,
1997, 1996 and 1995. Information under the column titled "Hibernia Corporation"
is based on Hibernia's Annual Report on Form 10-K for the year ended December
31, 1997. Information under the column titled "Peoples Holding Corporation" is
based on, and should be read in conjunction with, the historical financial
statements and related notes and Management's Discussion and Analysis of
Financial Condition and Results of Operations of Peoples contained elsewhere in
this Proxy Statement-Prospectus.
Information under the column entitled "Pro Forma Hibernia Corporation
(with Peoples Holding Corporation)" is based upon the pro forma financial
statements and related notes contained elsewhere herein. Such pro forma combined
information, which reflects the Merger, is presented for informational purposes
only and should be construed as indicative of the actual operations that would
have occurred had the Merger been consummated at the beginning of the periods
indicated or that may be obtained in the future. The pro forma combined
information gives effect to the issuance, in each of the period presented, of
9.5 shares of Hibernia Common Stock for each outstanding shares of Peoples
Common Stock. (The actual Exchange Rate may differ. See "PROPOSED MERGER --
Terms of the Merger.") The pro forma combined information assumed the Average
Market Price of Hibernia Common Stock will be $20.00 per share.
The information under the column entitled "Peoples Holding Corporation
Pro Forma Equivalent" is derived by multiplying the amounts contained in the
column titled "Pro Forma Hibernia Corporation (with Peoples Holding
Corporation)" by 9.5 (the assumed Exchange Rate for purposes of this pro forma
presentation).
<PAGE>
<TABLE>
<CAPTION>
HIBERNIA CORPORATION AND PEOPLES HOLDING CORPORATION
COMPARATIVE PER SHARE INFORMATION
- -----------------------------------------------------------------------------------------------
Unaudited
PRO FORMA PEOPLES
HIBERNIA HOLDING
PEOPLES CORPORATION CORPORATION
HIBERNIA HOLDING (WITH PEOPLES HOLDING PRO FORMA
CORPORATION CORPORATION CORPORATION) EQUIVALENT
- -----------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C>
Per Common Share:
Income from continuing operations:
For the year ended December 31,
1997 $ 1.00 $ 10.15 $ 1.00 $ 9.50
1996 0.85 8.56 0.85 8.08
1995 1.01 8.88 1.01 9.60
Income from continuing operations -
assuming dilution:
For the year ended December 31,
1997 $ 0.98 $ 10.15 $ 0.98 $ 9.31
1996 0.84 8.56 0.85 8.08
1995 1.00 8.88 1.00 9.50
Cash dividends:
For the year ended December 31,
1997 $ 0.33 $ 2.00 $ 0.33 $ 3.14
1996 0.29 1.60 0.29 2.76
1995 0.25 1.60 0.25 2.38
Book Value:
At December 31, 1997 $ 7.24 $ 78.97 $ 7.27 $ 69.07
</TABLE>
MEETING INFORMATION
You have received this Proxy Statement-Prospectus because the Peoples Board is
soliciting your proxy for the Special Meeting. Each copy of this Proxy
Statement-Prospectus mailed to holders of Peoples Common Stock is accompanied by
a proxy card for use at the Special Meeting and at any adjournment of the
Special Meeting. The Special Meeting is scheduled to be held at 2:00 P.M., local
time, on June 16, 1998, at the main office of Peoples, 618 Main Street, Minden,
Louisiana 70155. Only holders of record of Peoples Common Stock at the close of
business on the Record Date are entitled to vote at the Special Meeting. At the
Special Meeting, shareholders will consider and vote upon the Agreement and the
Merger. Any other matters that are properly brought before the Special Meeting
or any adjournment of the Meeting will also be voted upon.
PLEASE COMPLETE, DATE AND SIGN THE ACCOMPANYING PROXY CARD AND RETURN IT
PROMPTLY IN THE ENCLOSED, POSTAGE PAID ENVELOPE.
Solicitation and Revocation of Proxies
If you have delivered a proxy for the Meeting, you may revoke it any time before
it is voted by attending the Special Meeting and voting in person. You may also
give notice in writing to the Secretary of Peoples prior to the date of the
Special Meeting that you are revoking your proxy. Finally, you may submit a
signed proxy card bearing a date later than your initial proxy, and if it is
received before the Special Meeting, the later-dated proxy will be voted. Proxy
cards received at or prior to the Special Meeting and not subsequently revoked
will be voted as directed. If instructions are not given, executed proxy cards
will be voted FOR approval of the Agreement and Merger. If any other matters are
properly presented at the Special Meeting for consideration, the persons named
in the proxy card will have discretionary authority to vote on those matters.
The Peoples Board is not aware of any matter to be presented at the Special
Meeting other than the proposal to approve the Merger and the Agreement.
The cost of soliciting proxies from Peoples' shareholders will be borne by
Peoples, except that Hibernia will bear all expenses incurred in printing this
Proxy Statement-Prospectus. The solicitation will be made by mail but also may
be made by telephone or other means of telecommunications or in person by the
directors, officers and employees of Peoples. If these individuals solicit votes
in that manner, they will receive no additional compensation for doing so.
PEOPLES SHAREHOLDERS SHOULD NOT FORWARD ANY STOCK CERTIFICATES WITH THEIR PROXY
CARDS. IF THE MERGER IS APPROVED, SHAREHOLDERS WILL RECEIVE INSTRUCTIONS
REGARDING THE EXCHANGE OF THEIR STOCK CERTIFICATES AFTER THE MERGER HAS BEEN
CONSUMMATED.
Quorum and Vote Required
A majority of the outstanding shares of Peoples Common Stock constitutes a
quorum for purposes of the Special Meeting. The affirmative vote of the holders
of a majority of the shares of Peoples Common Stock actually present, in person
or by proxy, at the Meeting is required to approve the Merger and the Agreement.
Votes may be cast in person or by proxy for the Special Meeting. The Record Date
is May 1, 1998. Shareholders of record as of the close of business on the Record
Date are entitled to notice of the Special Meeting and to vote at the Meeting.
As of the Record Date, there were 374,986 shares of Peoples Common Stock
outstanding and entitled to vote at the Special Meeting. Each share of Peoples
Stock is entitled to one vote at the Special Meeting.
An abstention will be considered present for quorum purposes, but will have the
same effect as a vote against the proposal to be considered at the Special
Meeting. Because a quorum is determined based on the total number of shares
outstanding, a broker non-vote would make it more difficult to obtain a quorum,
because the shares would not be present for quorum purposes.
As of the Record Date, the directors and executive officers of Peoples
beneficially owned a total of 60,044 shares, or approximately 16.01% of the
outstanding shares of Peoples Common Stock. These individuals have agreed to
vote their stock in favor of the Merger and the Agreement. However, if the
Fairness Opinion is withdrawn or if any of these individuals are legally
required to abstain from voting or to vote against the Merger and the related
Agreement in the opinion of their counsel, they are not required to vote in
favor of the Merger.
Recommendation
The Board of Directors of Peoples has unanimously approved the Agreement and
believes the Merger is in the best interests of Peoples and its shareholders.
The Peoples Board recommends that holders of Peoples Common Stock vote FOR
approval of the Agreement and Merger. In making its recommendation to
shareholders, the Peoples Board considered, among other things, the Fairness
Opinion, which concludes that the terms of the Merger are fair to Peoples'
shareholders from a financial point of view. See "Background of and Reasons for
the Merger" and "Opinion of Financial Advisor" under "PROPOSED MERGER", below.
PROPOSED MERGER
This section of the Proxy Statement-Prospectus describes certain aspects
of the Merger. The following description is not intended to include each aspect
of the Merger, but rather contains only the significant terms of the Merger.
This discussion is qualified in its entirety by reference to the Agreement,
which is attached as Appendix A to this Proxy Statement-Prospectus and is
incorporated herein by reference. We urge you to read the Agreement carefully
and in its entirety.
General
If the shareholders of Peoples approve the Agreement and the Merger and
the other conditions to the consummation of the Merger are satisfied, Peoples
will be merged with and into Hibernia. At that time, the separate existence of
Peoples will cease. Simultaneously with the Merger, the Bank will be merged into
HNB, and the separate existence of the Bank will also cease. As soon as
practicable following the Effective Date, the operations previously conducted by
the Bank will be conducted under the name of HNB.
Hibernia will exchange shares of Hibernia Common Stock, plus cash
instead of any fractional share, for each outstanding share of Peoples Common
Stock as to which dissenters' rights have not been perfected and exercised. Each
share of Hibernia Common Stock outstanding immediately prior to the effective
date of the Merger will remain outstanding and unchanged as a result of the
Merger. See "Terms of the Merger", below, for a discussion of Exchange Rate.
Background of and Reasons for the Merger
Background of the Merger. During the last several years there have been
significant developments in the banking industry. These developments have
included the increased emphasis and dependence on automation, specialization of
products and services, increased competition from other financial institutions,
and a trend toward consolidation and geographic expansion. Peoples and its Board
of Directors concluded that they could best serve their shareholders, employees,
customers and communities by combining with a regional banking organization,
provided that Peoples could obtain a fair price for its shareholders.
Accordingly, in early 1998, representatives of Peoples and Hibernia entered into
extensive negotiations which ultimately led to the execution of the Merger
Agreement dated as of February 10, 1998.
Reasons of Peoples for the Merger. In deciding to enter into the
Agreement, the Board of Directors of Peoples, after considering various
alternatives, concluded that the Agreement was in the best interests of Peoples
and its shareholders because it would permit shareholders to exchange on
favorable terms their ownership interest in Peoples for participation in the
ownership of a banking organization operating on a regional basis.
The Board of Directors also concluded that the shareholders of Peoples
would benefit from the Merger by obtaining greater liquidity in their investment
by obtaining shares of stock of a corporation whose securities are more widely
held and significantly more actively traded on a national exchange.
Among the factors considered by the Board of Directors of Peoples in
deciding to approve and recommend the terms of the Merger were:
(i) The liquidity of Hibernia Common Stock, as well as the premium over
the estimated market value of Peoples Stock represented by the Exchange Rate;
(ii) The opportunity to provide additional products and services which
will enhance competitiveness in the markets currently served by Peoples;
(iii) The parties' respective earnings and dividend records, financial
conditions, historical stock prices and managements;
(iv) The position of each in the financial institutions industry;
(v) The outlook for each in the financial institutions industry;
(vi) The financial terms of the Merger, including the relationship of
the consideration to be paid in the Merger to the market value, book value and
earnings per share of the Peoples Stock; and
(vii) The opinion rendered by Professional Bank Services, Inc. (the
"Advisor"), Peoples' financial advisor, to the effect that based upon and
subject to certain procedures, matters and limitations, the terms of the
Agreement are fair from a financial point of view, to the holders of Peoples
Stock.
Peoples Board did not assign a specific or relative weight to the
foregoing factors in its considerations. Peoples Board believes that the Merger
will provide significant value to all Peoples shareholders and will enable them
to participate in opportunities for growth that Peoples Board believes the
Merger make possible.
Terms of the Merger
If the shareholders of Peoples approve the Agreement and the Merger and
the other conditions to the consummation of the Merger are satisfied, the Merger
will be completed on the Effective Date. (See "PROPOSED MERGER--Representations
and Warranties; Conditions to the Merger; Waiver" for a discussion of the other
conditions to completing the Merger.)
Peoples shareholders will receive at least 9.5 shares of Hibernia Common
Stock, but no more than 10.5 shares of Hibernia Stock, for each share of Peoples
Stock they own. If the Average Market Price of Hibernia Stock is $17.62 or
greater per share but less than or equal to $19.47 per share, the Exchange Rate
will be determined as follows:
[$69,375,000 divided by 375,000] divided by the Average Market Price.
For example, if the Average Market Price is $18.00, then the Exchange Rate will
be 10.28 shares of Hibernia Stock for each share of Peoples Stock. If the
Average Market Price is less than $17.62, the Exchange Rate will be 10.5 to 1;
if the Average Market Price is higher than $19.47, the Exchange Rate will be 9.5
to 1.
On the Closing Date each outstanding share of Peoples Common Stock,
other than shares held by shareholders who exercise and perfect dissenters'
rights, will automatically convert to the number of shares of Hibernia Common
Stock described above. Peoples shareholders will automatically be entitled to
all of the rights and privileges afforded to Hibernia shareholders at that time.
However, the exchange of Peoples stock certificates for certificates
representing Hibernia Common Stock will occur after the Closing Date.
YOU SHOULD NOT FORWARD YOUR STOCK CERTIFICATES TO PEOPLES OR HIBERNIA AT THIS
TIME. IF THE MERGER IS CONSUMMATED, YOU WILL RECEIVE INSTRUCTIONS REGARDING THE
EXCHANGE OF YOUR CERTIFICATES FOR HIBERNIA STOCK.
For a discussion of the rights of dissenting shareholders, see "PROPOSED
MERGER -- Rights of Dissenting Shareholders."
Opinion of Financial Advisor to Peoples
Professional Bank Services, Inc. ("PBS") was engaged by Peoples to advise
the Peoples' Board of Directors as to the fairness of the consideration, from a
financial perspective, to be paid by Hibernia to Peoples' shareholders as set
forth in the Agreement.
Professional Bank Services, Inc. is a bank consulting firm with offices
in Louisville, Atlanta, Chicago, Nashville, and Washington, D.C. As part of its
investment banking business, PBS is regularly engaged in reviewing the fairness
of financial institution acquisition transactions from a financial perspective
and in the valuation of financial institutions and other businesses and their
securities in connection with mergers, acquisitions, estate settlements,
employee benefit plans and other transactions. Neither PBS nor any of its
affiliates has a material financial interest in Peoples or Hibernia. PBS was
selected to advise Peoples Board of Directors based upon their familiarity with
Louisiana financial institutions and knowledge of the banking industry as a
whole.
PBS performed certain analyses described herein and presented the range
of values for Peoples resulting from such analyses to the Board of Directors of
Peoples in connection with its advice as to the fairness of the consideration to
be paid by Hibernia.
A Fairness Opinion of PBS was delivered to the Board of Directors of
Peoples and has been updated as of the date of this Proxy Statement-Prospectus.
A copy of the Fairness Opinion, which includes a summary of the assumptions made
and information analyzed in deriving the Fairness Opinion, is attached as
Appendix B to this Proxy Statement-Prospectus and should be read in its
entirety.
In arriving at its Fairness Opinion, PBS reviewed certain publicly
available business and financial information relating to Peoples and Hibernia.
PBS considered certain financial and stock market data of Peoples and Hibernia,
compared that data with similar data for certain other publicly-held bank
holding companies and considered the financial terms of certain other comparable
bank transactions in the states of Louisiana, Mississippi, Alabama, and Georgia
that have recently been effected. PBS also considered such other information,
financial studies, analyses and investigations, financial, economic and market
criteria that it deemed relevant. In connection with its review, PBS did not
independently verify the foregoing information and relied on such information as
being complete and accurate in all material respects. Financial forecasts
prepared by PBS were based on assumptions believed by PBS to be reasonable and
to reflect currently available information. PBS did not make an independent
evaluation or appraisal of the assets of Peoples or Hibernia.
As part of preparing the Fairness Opinion, PBS performed a due diligence
review of Hibernia. As part of the due diligence, PBS reviewed the following
items: Quarterly Financial Statements filed with the Securities and Exchange
Commission for 1997; Annual Audited Financial Statements filed with the
Securities and Exchange Commission for 1995, 1996, and 1997; Annual Reports of
the corporation for 1995, 1996, and 1997; Proxy Statements issued to Hibernia's
shareholders for 1996 and 1997; Consolidated Reports of Condition and Income
filed by Hibernia with the FDIC; and the Uniform Bank Performance Report as of
September 30, 1997. The historical common stock trading activity of Hibernia was
also reviewed and analyzed.
PBS reviewed and analyzed the historical performance of Peoples
contained in: Audited Annual Reports dated December, 1995, 1996 and 1997 of
Peoples; December 31, 1997 Consolidated Reports of Condition and Income filed by
Peoples with the FDIC; the Uniform Bank Performance Report of Peoples as of
September 30, 1997; historical common stock trading activity of Peoples; and the
premises and other fixed assets. PBS reviewed and tabulated statistical data
regarding the loan portfolio, securities portfolio and other performance ratios
and statistics. Financial projections were prepared and analyzed as well as
other financial studies, analyses and investigations as deemed relevant for the
purposes of this opinion. In review of the aforementioned information, PBS took
into account its assessment of general market and financial conditions, its
experience in other similar transactions, and its knowledge of the banking
industry generally.
In connection with rendering the Fairness Opinion and preparing its
written presentation to Peoples' Board of Directors, PBS performed a variety of
financial analyses, including those summarized herein. The summary does not
purport to be a complete description of the analyses performed by PBS in this
regard. The preparation of a Fairness Opinion involves various determinations as
to the most appropriate and relevant methods of financial analysis and the
application of these methods to the particular circumstances and, therefore,
such an opinion is not readily susceptible to summary description. Accordingly,
notwithstanding the separate factors summarized below, PBS believes that its
analyses must be considered as a whole and that selecting portions of its
analyses and of the factors considered by it, without considering all analyses
and factors, could create an incomplete view of the evaluation process
underlying its opinion. In performing its analyses, PBS made numerous
assumptions with respect to industry performance, business and economic
conditions and other matters, many of which are beyond Peoples' or Hibernia's
control. The analyses performed by PBS are not necessarily indicative of actual
values or future results, which may be significantly more or less favorable than
suggested by such analyses. In addition, analyses relating to the values of
businesses do not purport to be appraisals or to reflect the process by which
businesses actually may be sold.
Acquisition Comparison Analysis: In performing this analysis, PBS
reviewed all bank acquisition transactions in the states of Louisiana,
Mississippi, Alabama and Georgia (the "Regional Area") since 1990. There were
312 bank acquisition transactions in the Regional Area announced since 1990 for
which detailed financial information is available. The purpose of the analysis
is to obtain an evaluation range based on these Regional Area bank acquisition
transactions. Median multiples of earnings and book value implied by the
comparable transactions are utilized in obtaining a range for the acquisition
value of Peoples. In addition to reviewing recent Regional Area bank
transactions, PBS performed separate comparable analyses for acquisitions of
banks which, like Peoples, have an equity-to-asset ratio between 11.00% and
13.00%, have total assets between $200 - $300 million, have a return on average
assets ("ROAA") between 1.50% and 1.75%, are located in Louisiana, and bank
transactions that have occurred in the Regional Area since January 1, 1996.
The median values for the 312 Louisiana acquisitions expressed as multiples of
both book value and earnings are 1.79 and 15.99, respectively. The median
multiples of book value and earnings for acquisitions in the Regional Area
which, like Peoples, had an equity-to-asset ratio between 11.00% and 13.00% are
1.61 and 17.07, respectively. For acquisitions of Regional Area banks with
assets between $200 - $300 million the median multiples are 2.11 and 17.78. For
acquisitions of Regional Area banks with a ROAA between 1.50% and 1.75%, the
median multiples are 1.95 and 13.32, respectively. The median multiples of book
value and earnings for acquisitions of banks located in Louisiana are 2.08 and
15.87, respectively. For Regional Area bank acquisitions since January 1, 1996,
the median multiples of book value and earnings are 2.04 and 17.79.
In the proposed transaction, Peoples shareholders will receive 9.5 shares of
Hibernia common stock for each share of Peoples common stock, subject to
adjustment, as further defined in the Agreement and Plan of Merger Between
Hibernia and Peoples. Utilizing a Hibernia common stock price of $21.56 per
share, and an aggregate number of Peoples common shares outstanding of 374,986,
the aggregate value would equal $76,813,538 or $204.84 per Peoples common share.
This represents a multiple of December 31, 1997 book value and multiple of 1997
adjusted earnings of 2.59 and 20.38, respectively.
The percentile ranking of the proposed transaction's market value was
prepared and analyzed with respect to the above Regional Area comparable group.
Compared to all Regional Area bank transactions, the acquisition value ranked in
the 90th percentile as a multiple of book value and in the 77th percentile as a
multiple of earnings. Compared to Regional Area bank transactions where the
acquired institution had an equity-to-asset ratio between 11.00% and 13.00%, the
acquisition value ranked in the 100th percentile as a multiple of book value and
the 78th percentile as a multiple of earnings. For Regional Area bank
acquisitions where the acquired institution had between $200 - $300 million in
assets, the acquisition value ranked in the 90th percentile as a multiple of
book value and in the 80th percentile as a multiple of earnings. For Regional
Area bank transactions where the acquired institution had a ROAA between 1.50%
and 1.75%, the acquisition value ranked in the 96th percentile as a multiple of
book value and the 100th percentile as a multiple of earnings. For bank
transactions in the State of Louisiana, the acquisition value ranked in the 85th
percentile as a multiple of book value and in the 81st percentile as a multiple
of earnings. For Regional Area transactions effected since January 1, 1996, the
acquisition value ranked in the 79th percentile as a multiple of book value and
in the 69th percentile as a multiple of earnings.
Adjusted Net Asset Value Analysis: PBS reviewed Peoples' balance sheet
data to determine the amount of material adjustments required to the
stockholders' equity of Peoples based on differences between the market value of
Peoples' assets and the value reflected on Peoples' financial statements. PBS
determined that two adjustments were warranted. Equity was increased $103,000 to
reflect the after tax appreciation in Peoples' held to maturity securities
portfolio. Equity was reduced by $1,792,000, to reflect total intangible assets
on Peoples' balance sheet. PBS also reflected a value of the non-interest
bearing demand deposits of approximately $7,661,000. The aggregate adjusted net
asset value of Peoples was determined to be $35,585,000 or $94.90 per Peoples
common share.
Discounted Earnings Analysis: A dividend discount analysis was performed
by PBS pursuant to which a range of stand-alone values of Peoples was determined
by adding (i) the present value of estimated future dividend streams that
Peoples could generate over a five-year period and (ii) the present value of the
"terminal value" of Peoples' earnings at the end of the fifth year. The
"terminal value" of Peoples' earnings at the end of the five-year period is
determined by applying a multiple of 15.87 times the projected terminal year's
net income. The 15.87 multiple represents the median multiple of earnings for
all bank transactions in the state of Louisiana since 1990.
Dividend streams and terminal values were discounted to present values
using a discount rate of 12%. This rate reflects assumptions regarding the
required rate of return of holders or buyers of Peoples' common stock. The
aggregate value of Peoples, determined by adding the present value of the total
cash flows, was $57,424,000 or $153.14. In addition, using the five-year
projection as a base, a twenty-year projection was prepared assuming an annual
growth rate of 6.0% and a return on assets increasing from 1.70% in year one to
2.00% by year seven and remaining in effect throughout the analysis. Dividends
were assumed to remain constant at 30% of net income for years 1-5 and 70% of
net income beginning in year six. This long-term projection resulted in a
aggregate value of $53,295,000 or $142.12 per share.
Specific Acquisition Analysis: PBS valued Peoples based on an
acquisition analysis assuming a "break-even" earnings scenario to an acquiror as
to price, current interest rates and amortization of the premium paid. Based on
this analysis, an acquiring institution would pay in aggregate $49,439,000, or
$131.84 per share, assuming they were willing to accept no impact to their net
income in the initial year. This analysis was based on a funding cost of 7.5%
adjusted for taxes, amortization of the acquisition premium over 15 years and a
December 31, 1997 adjusted earnings level of $3,769,000. This analysis was
repeated assuming a potential acquiror would attain non-interest expense
reductions of 10% in the transaction. Based on this analysis an acquiring
institution would pay in aggregate $52,094,000 or $138.92 per Peoples share.
Pro Forma Merger Analysis: PBS compared the historical performance of
Peoples to that of Hibernia and other regional holding companies. This analysis
included, among other things, a comparison of profitability, asset quality and
capital measures. In addition, the contribution of Peoples and Hibernia to the
income statement and balance sheet of the pro forma combined company was
analyzed.
The effect of the affiliation on the historical and pro forma financial
data of Peoples was prepared and analyzed. Peoples' historical financial data
was compared to the pro forma combined historical and projected earnings, book
value and dividends per share.
The Fairness Opinion is directed only to the question of whether the
consideration to be received by Peoples' shareholders under the Agreement is
fair and equitable from a financial perspective and does not constitute a
recommendation to any Peoples shareholder to vote in favor of the affiliation.
No limitations were imposed on PBS regarding the scope of its investigation or
otherwise by Peoples.
Based on the results of the various analyses described above, PBS
concluded that the consideration to be received by Peoples' shareholders under
the Agreement is fair and equitable from a financial perspective to the
shareholders of Peoples.
PBS will receive fees in the amount of $12,500 for all services
performed in connection with the sale of Peoples and the rendering of the
Fairness Opinion. In addition, Peoples has agreed to indemnify PBS and its
directors, officers and employees, from liability in connection with the
transaction, and to hold PBS harmless from any losses, actions, claims, damages,
expenses or liabilities related to any of PBS' acts or decisions made in good
faith and in the best interest of Peoples.
Closing Date and Effective Date of the Merger
The parties may choose a Closing Date that is convenient for them under
the Agreement. The Agreement otherwise provides for a Closing Date that is 15
days after the last required regulatory approval of the Merger is obtained, or 5
days after the Special Meeting, whichever is later. Any other date chosen by the
parties may not be more than 60 days after the date otherwise provided for in
the Agreement. The parties will chose an Effective Date on which the Merger will
be effective. The Effective Date will be set forth in the Certificate of Merger
issued by the Secretary of State of Louisiana relating to the Merger. It is
expected that the Effective Date will occur shortly after the Closing Date. The
parties currently anticipate an Effective Date of July 1, 1998.
The necessary shareholder and regulatory approvals may not be obtained.
Other conditions precedent to the Merger also may not be satisfied. These
conditions are not all within the control of Hibernia and/or Peoples, and the
parties cannot assure you that they will be obtained. However, as of the date of
this Proxy Statement-Prospectus, the parties are not aware of any condition or
approval that cannot or will not be met or obtained.
Hibernia and Peoples anticipate that all conditions to consummation of
the Merger will be satisfied so that the Merger can be consummated in the third
quarter of 1998. However, delays in the consummation of the Merger could occur.
The Board of Directors of either Hibernia or Peoples may terminate the
Agreement if the Merger is not consummated by March 31, 1999 or any condition to
the consummation of the Merger cannot be satisfied by March 31, 1999 and will
not be waived by the party or parties entitled to waive it. See "PROPOSED MERGER
- -- Conditions to Consummation of the Merger" and "PROPOSED MERGER --Waiver,
Amendment, and Termination of the Agreement."
Employee Benefits
Former employees of Peoples and the Bank who become employed by Hibernia
or its subsidiaries as of the Effective Date will be entitled to the same
employee benefits as those offered by Hibernia and HNB to their employees.
However, employees of Peoples and the Bank will not be required to wait for any
period in order to be eligible to participate in Hibernia's Flex Plan (including
its medical and dental coverage). Hibernia will also give Peoples' employees
full credit for their years of service (for both eligibility and vesting) with
Peoples for purposes of Hibernia's 401(k) plan and its ESOP (to the extent
permitted under the terms of those plans). If, however, Hibernia decides that it
cannot merge any benefit plan of Peoples into a comparable benefit plan of
Hibernia or HNB without creating material potential liability for Hibernia's or
HNB's plans, then Hibernia may freeze the existing benefit plan of Peoples and
prohibit participation by former employees of Peoples in Hibernia's or HNB's
plans for the period of time required by applicable law to ensure that
Hibernia's and HNB's plans are not deemed to be successor plans of the Peoples
plan in question.
Surrender and Exchange of Stock Certificates
Chase Mellon Shareholder Services, will act as Exchange Agent for
purposes of the exchange of Peoples Stock for Hibernia Stock. Shortly after the
Effective Date, a letter of transmittal will be mailed to all non-dissenting
shareholders of Peoples. This letter of transmittal will include instructions
for the exchange of their Peoples Common Stock certificates for certificates
representing Hibernia Common Stock. Each certificate representing Peoples Common
Stock outstanding immediately prior to the Effective Date will be deemed for all
purposes to evidence ownership of the number of shares of Hibernia Common Stock
into which such shares have been converted on the Effective Date, regardless
when they are actually exchanged.
PEOPLES SHAREHOLDERS SHOULD NOT SEND IN THEIR STOCK CERTIFICATES UNTIL
THEY RECEIVE THE LETTER OF TRANSMITTAL AND INSTRUCTIONS.
When the Exchange Agent receives certificates for Peoples Common Stock,
together with a properly completed letter of transmittal, it will issue and mail
to each holder of Peoples Common Stock who surrendered those items a certificate
representing the number of shares of Hibernia Common Stock to which such holder
is entitled. If the holder would otherwise be entitled to receive a fraction of
a share of Hibernia Stock, the Exchange Agent will mail the holder a check
representing cash paid instead of the fractional share.
Holders of record of Peoples Common Stock on the Effective Date will be
entitled to vote at any meeting of Hibernia shareholders if the record date for
the Hibernia meeting is after the Effective Date of the Merger. In that case,
holders of Peoples Common Stock would be able to vote the number of shares of
Hibernia Common Stock into which their Peoples Common Stock has been converted
regardless of whether such shareholders have surrendered their stock
certificates. Dividends or other distributions payable after the Effective Date
on Hibernia Stock will be paid only after you surrender your Peoples stock
certificate. When you surrender your Peoples stock certificate for exchange, the
Exchange Agent will send to you all undelivered dividends and other
distributions on your Hibernia stock. You will not receive interest on those
distributions for any period during which Hibernia holds them awaiting the
exchange of your Peoples stock. Also, taxes may be deducted from those
distributions.
If you cannot locate your Peoples Stock certificate(s), please contact
Ralph Williams prior to the Special Meeting. Peoples will issue new certificates
to shareholders who have misplaced their certificates only if (a) the
shareholders sign an affidavit certifying that the certificates cannot be
located, and (b) shareholders agree to indemnify Peoples and Hibernia against
any claim that may be made against either of them by the owner of the lost
certificate(s). Peoples or Hibernia may require a shareholder to post a bond in
an amount sufficient to support the shareholder's indemnification obligation. If
you have misplaced your stock certificates or if you hold certificates in names
other than your own, we encourage you to resolve those matters before the
Effective Date of the Merger. This will help to avoid delays in exchanging your
Peoples Common Stock.
Expenses
Hibernia will pay all expenses of printing and distributing this Proxy
Statement-Prospectus. The parties otherwise will pay all of their own expenses
related to negotiating and completing the Merger.
Representations and Warranties
Peoples and Hibernia have made certain representations and warranties to
each other as part of the Agreement. Peoples' representations and warranties
relate to, among other things:
* its organization and authority to enter into the Agreement,
* its capitalization, properties, and financial statements,
* pending and threatened litigation against Peoples, and
* Peoples' contractual obligations and contingent liabilities.
Peoples representations and warranties are generally contained in Section 7 of
the Merger Agreement.
Hibernia's representations and warranties relate to, among other things:
* its organization and authority to enter into the Agreement,
* its capitalization,
* its financial statements and
* its public reports.
Hibernia's representations and warranties are generally contained in Section 8
of the Merger Agreement.
The representations and warranties of the parties generally will not
survive the Effective Date. Consequently, the parties' only recourse in the
event of a breach of a representation or warranty by the other party is to
re-negotiate the Merger or to terminate the Agreement. Once the Merger is
completed, the parties will have no basis for litigation against each other
based on the Agreement.
Conditions to the Merger; Waiver
The Agreement contains a number of conditions to completing the Merger. The
conditions must either be met or waived (if they are waivable) in order for the
Merger to occur. The conditions to completing the Merger include, among other
things:
* the Agreement and Merger must be approved by Peoples shareholders;
* necessary regulatory approvals must be obtained (particularly the approval of
the Federal Reserve and the OCC);
* the Tax Opinion must be issued;
* the Registration Statement must become effective under the Securities Act and
there may not be a stop order suspending its effectiveness;
* there may not be an order, decree or injunction enjoining or prohibiting
completion of the Merger;
* the representations and warranties set forth in the Agreement must be accurate
as of the Closing Date;
* the Hibernia Common Stock to be issued in the Merger must be approved for
listing on the NYSE;
* the Merger must qualify for pooling-of-interests accounting treatment;
* certain opinions of counsel must be received by the parties; and
* Peoples must have received updated Fairness Opinions within five days of the
scheduled mailing of this Proxy Statement and within five days of the Closing
Date.
Most of the conditions to completing the Merger may be waived at any
time by the party for whose benefit they were created. Regulatory and
shareholder approvals may not be waived, however. Also, the Agreement may be
amended or supplemented at any time by written agreement of the parties.
Nevertheless, no waiver, amendment or supplement executed after the Agreement
has been approved by Peoples shareholders may reduce the Exchange Rate. Also,
any material change in the terms of the Merger after the Special Meeting would
require a resolicitation of votes from Peoples shareholders.
Regulatory and Other Approvals
Hibernia is a registered bank holding company and is regulated by the
Federal Reserve Board. The Federal Reserve Board must approve the Merger in
order for the parties to complete the Merger. Also, the Merger must be completed
within 90 calendar days after the Federal Reserve's approval of it.
HNB is regulated by the OCC. The merger of the Bank with and into HNB must
be approved by the OCC before it may be completed.
Peoples and Hibernia must wait at least 15 days after the date of the
Federal Reserve Board approval before they may complete the Merger. During this
15-day period, the Department of Justice may object to the Merger on antitrust
grounds.
The exchange of shares of Hibernia Stock for Peoples Stock in the Merger
has been registered with the SEC. The transaction will not be registered in any
state due an exemption from state regulation.
The regulatory approvals required to complete the Merger may be obtained
or denied prior to or after the Special Meeting. The vote on the Merger at the
Special Meeting does not depend upon and is not conditioned upon receipt of any
regulatory approvals before the Special Meeting. Even if the Merger is approved
at the Special Meeting, it may not be consummated. The Agreement will terminate
if the requisite regulatory approvals are not obtained.
Business Pending the Merger
The Agreement requires Peoples to continue to operate its business in
the ordinary course pending the Merger. Among other things, Peoples or the Bank
may not, without Hibernia's consent:
* create or issue any additional shares of capital stock or any options or other
rights to purchase or acquire shares of capital stock;
* enter into employment contracts with directors, officers or employees or
otherwise agree to increase the compensation of such persons (except in
accordance with past practices or existing agreements);
* pay or agree to pay any bonus or severance payment to directors, officers or
employees (except in accordance with existing agreements or past practices);
* enter into or substantially modify any employee benefits plans;
* amend their Articles of Incorporation or Association or Bylaws;
* establish or add additional automatic teller machines or branch or other
banking offices;
* make any capital expenditure(s) in excess of $25,000, except in the ordinary
course of business consistent with past practices;
* merge with any other company or bank or liquidate or otherwise dispose of its
assets;
* acquire another company or bank (except in connection with foreclosures of
bona fide loan transactions); or
* in the case of Peoples, and not the Bank, make, declare, set aside or pay any
dividend or make any distribution on, or directly or indirectly combine, redeem,
purchase or otherwise acquire, any shares of Peoples Common Stock (other than in
a fiduciary capacity), except that Peoples may make, declare, set aside and pay
regular quarterly dividends not to exceed $.50 per share of Peoples Common Stock
per calendar quarter for each quarter completed prior to the Effective Date,
consistent in timing with past practices during the preceding three years.
Peoples may not solicit bids or other transactions that would result in a merger
of Peoples or the Bank with an entity other than Hibernia or HNB except in
certain very limited circumstances. The Bank may pay normal and customary
dividends prior to the Closing Date.
Section 6 of the Merger Agreement contains the significant restrictions
on Peoples' conduct of the Bank's business pending the Merger.
Termination
Either party may terminate the Agreement prior to the Effective Date for
certain reasons. A party may terminate the Agreement for these reasons even
after the Agreement and the Merger is approved by Peoples shareholders. These
reasons include, among others:
* a breach by the other party of any covenant, representation or warranty in the
Agreement, if the facts constituting the breach reflect a material and adverse
change in the financial condition, results of operations, business or prospects
taken as a whole, of the breaching party;
* any application for any required federal or state regulatory approval is
denied, and the time for all appeals of the denial has expired;
* the shareholders of Peoples fail to approve the Merger at the Special Meeting;
* the Merger is not consummated by March 31, 1999 or any condition to the Merger
cannot be satisfied by that date and will not be waived by the party entitled to
waive it.
* at any time by the mutual consent of the parties;
* by Hibernia, if the holders of more than 9.8% of the outstanding Peoples
Common Stock exercise statutory rights of dissent and appraisal;
* by Peoples, if after December 31, 1997 a material adverse change occurs in the
financial condition, results of operations, business or prospects of Hibernia or
HNB (excluding changes in laws or regulations affecting banking institutions
generally);
* by Hibernia, if after December 31, 1997 a material adverse change occurs in
the financial condition, results of operations, business or prospects of Peoples
and the Bank (excluding changes in laws or regulations affecting banking
institutions generally);
* by Hibernia, if it shall determine in good faith that the Merger does not
qualify as a pooling-of-interests for accounting purposes; or
* by Peoples, if Peoples does not receive an updated Fairness Opinion dated
within five days of the date of scheduled mailing of this Proxy
Statement-Prospectus to its shareholders, and updated to within five days of the
Closing Date.
Certain provisions of the Agreement, including provisions relating to
indemnification and confidentiality, survive both the Merger and a termination
of the Agreement without the Merger having been completed.
Management and Operations After the Merger
If the conditions to the Merger are met or waived, Peoples will be
merged with and into Hibernia on the Effective Date. At that time, Peoples will
cease to exist as a separate company. Simultaneously with the Merger, the Bank
will be merged into HNB. The separate existence of the Bank also will cease at
that time. HNB will continue to operate as a wholly-owned subsidiary of Hibernia
after the Merger and will offer banking services similar to those offered prior
to the Merger.
The Boards of Directors of Hibernia and HNB will not change as a result
of the Merger. If you would like more information about the directors of
Hibernia, you may request a copy of Hibernia's Annual Report to Shareholder for
1997 and/or its proxy statement for its 1998 annual meeting of shareholders.
Both of these documents are incorporated herein by reference. See "AVAILABLE
INFORMATION."
Certain Differences in Rights of Shareholders
If the Merger is completed, all shareholders of Peoples, other than
those who exercise and perfect dissenters' rights, will become shareholders of
Hibernia. Their rights as shareholders will then be governed by Hibernia's
Articles of Incorporation and Bylaws rather than Peoples' Articles of
Incorporation and Bylaws. The following is a summary of the significant
differences between the rights of Peoples shareholders and Hibernia shareholders
not described elsewhere in this Proxy Statement-Prospectus.
Stock. The total number of shares of all classes of stock which Hibernia
has authority to issue is four hundred million. Three hundred million shares are
designated as Class A Common Stock of no par value and one hundred million
shares are designated as Preferred Stock, without par value. The rights,
preferences and privileges with respect to shares of preferred stock may be
determined by the Hibernia Board of Directors. Consequently, shares of preferred
stock could be issued in circumstances in which it would make an attempted
acquisition of Hibernia more difficult. Hibernia currently has 2,000,000 shares
of preferred stock outstanding. The holders of those preferred shares are
entitled to receive dividends on a quarterly basis and would have limited voting
rights if the dividends on their stock were not paid for a certain period of
time. If those voting rights were triggered, the preferred shareholders may be
able to elect a director to the board of directors of Hibernia. Peoples is
authorized to issue one class of stock. Common Stock, par value $10.00.
Peoples is authorized to issue 420,000 shares of Common Stock.
Liquidity of Stock. There currently is no ready market for the shares of
Peoples Stock, and such a market is not likely to develop in the future. The
shares of Hibernia Stock, if issued in the Merger, will be registered under
applicable securities laws and may therefore be freely resold by persons who are
not "affiliates" of Peoples or Hibernia. See "Resale of Hibernia Stock." The
Hibernia Stock also is listed on the NYSE and actively traded on that exchange.
Current quotes of the market price of Hibernia Common Stock are available from
brokerage firms and other securities professionals, as well as other sources,
and are published in major newspapers on a daily basis.
Directors' Qualifications. Hibernia maintains certain qualifications for
its directors:
* they must be no more than 71 years old at the time they are elected (and must
retire at the annual meeting following their having reached that age).
* they must own at least $1,000 of Hibernia stock at the time they are first
elected as a director
* they may not be affiliated with any business competitor of Hibernia,
* and they may not be affiliated with any business competitor of Hibernia.
Peoples does not place similar limits on qualification for its
directors.
Removal of Directors. Shareholders of Hibernia may remove a director for
cause (defined as gross negligence or willful misconduct) by the vote of a
majority of the total voting power and may remove a director without cause by a
vote of two-thirds of the total voting power. Directors of Peoples may be
removed at any time, with or without cause, at any meeting of the shareholders
called expressly for that purpose. The affirmative vote of a majority of the
shares entitled to vote on the matter is required to remove directors of
Peoples.
Amendment of Articles and Bylaws. Hibernia's Articles of Incorporation
may be amended by a vote of a majority of the voting power present at any
meeting called for that purpose. Peoples Articles of Incorporation do not have
similar provisions; however, Louisiana law requires the affirmative vote of
two-thirds of the voting power present at the meeting at which the amendment is
considered.
The Bylaws of Hibernia may be amended or repealed by a vote of
two-thirds of the total voting power outstanding or by a vote of two-thirds of
the "continuing directors" of the company, as defined in the Bylaws. A
"continuing director" for this purpose is generally a director who was nominated
for election by a majority of the existing directors. Peoples Bylaws may be
altered, amended, or repealed and new Bylaws may be adopted by the Board, at any
meeting of the Board at which a quorum is present, by the affirmative vote of a
majority of the directors present. Bylaws adopted by the Peoples Board will be
subject to repeal or change by action of the shareholders at any meeting of the
shareholders at which a quorum is present, by the affirmative vote of a majority
of the shareholders present.
Special Meetings of Shareholders. Special meetings of the shareholders
of Hibernia may be called by the Chairman of the Board, the President, the Chief
Executive Officer, the Treasurer, or the Board of Directors. In addition,
shareholders holding one-fifth or more of the total voting power of Hibernia may
request a special meeting of shareholders and, upon receipt of such request, the
Secretary of Hibernia is required to call a special meeting of the shareholders.
A special meeting of shareholders of Peoples may be called at any time by the
President, the Board of Directors, or the holders of not less than ten percent
(10%) of all shares entitled to vote at the meeting.
Shareholder Proposals. Hibernia's Bylaws contain certain provisions
expressly allowing shareholders to submit shareholder proposals and to nominate
individuals for election as directors, under certain circumstances and provided
the shareholder complies with all of the conditions set forth in those
provisions. Peoples Bylaws do not contain any provisions addressing shareholder
proposals.
Vacancy on Board of Directors. Hibernia's Bylaws permit the Board to
fill any vacancy on the board, however created. Peoples Bylaws only allow the
board to fill vacancies created by death, resignation or removal; any vacancy
resulting from an increase in the size of the Board must be filled by a vote of
Peoples' shareholders.
Merger or Consolidation. Hibernia's Articles allow an agreement of
merger or consolidation to be approved by a majority vote of the voting shares
issued and outstanding, taken at a meeting called for the purpose of such
approval. A merger of Peoples may be approved by a majority of the shares
present at the meeting, as long as a quorum is present.
Dissenting Shareholder's Rights. Each Peoples shareholder who objects to
the Merger is entitled to the rights and remedies of dissenting shareholders
provided by Louisiana law if the Merger is approved by less than 80% of the
total shares of Peoples Stock outstanding. See "PROPOSED MERGER -- Rights of
Dissenting Shareholders." Louisiana law provides that a shareholder's right to
dissent does not exist in the case of shareholders holding shares of any class
of stock that are listed on a national securities exchange, such as Hibernia
Common Stock, unless the articles of incorporation of the issuing corporation
provide otherwise or the shares of such shareholders are not converted by the
merger or consolidation solely into shares of the surviving or new corporation.
In such event, a shareholder who votes against the merger shall have the right
to dissent only if the shareholders authorize the merger by less than 80% of the
total voting power.
Interests of Certain Persons in the Merger
The Agreement protects the officers and directors of Peoples and the
Bank from liability for actions arising while they served as officers and/or
directors of Peoples or the Bank. Hibernia has also agreed to indemnify
officers, directors and employees of Peoples and the Bank to the same extent as
they would have been indemnified under the Articles of Incorporation and Bylaws
of Hibernia in effect on February 10, 1998. Hibernia's aggregate liability for
indemnification to those people is limited to $13 million. Also, each officer
and director eligible for such indemnification must execute a joinder agreement
in which he or she agrees to cooperate with Hibernia in any litigation or
proceeding giving rise to a claim of indemnification.
Hibernia also has agreed to indemnify Peoples' and the Bank's officers,
directors and certain affiliates against liability under the Securities Act. In
particular, Hibernia will provide indemnification if any liability is based on
an actual or alleged untrue statement of a material fact (or the actual or
alleged omission of a material fact) contained in this Proxy
Statement-Prospectus. This indemnification does not apply to statements in the
Registration Statement on which Hibernia relied upon information furnished by
Peoples.
Ralph Williams and Hibernia have agreed to a two-year employment
agreement at Mr. Williams' current salary. The agreement also provides for the
payment of a bonus to Mr. Williams to induce him to remain with Hibernia and in
partial consideration of his agreement to forego any rights he may have under
this change of control employment with Peoples.
Material Tax Consequences
The following is a summary description of the material income tax
consequences of the Merger. It is not intended to be a complete description of
the federal income tax consequences of the Merger. Tax laws are complex, and
your individual circumstances may affect the tax consequences to you. In
addition, we have not included information about the tax consequences of the
Merger under state, local or other tax laws. We urge you to consult a tax
advisor regarding the tax consequences of the Merger to you.
The parties must receive the Tax Opinion in order to complete the
Merger. The Tax Opinion is included as Appendix D to this Proxy
Statement-Prospectus. We urge you to read the Tax Opinion and to discuss it with
your tax and financial advisors so that you will understand the tax consequences
of the Merger to your situation.
The Tax Opinion is based upon representations made by Hibernia and
Peoples about the terms of the Merger and certain other matters. Based upon the
accuracy of those representations and certain other matters describe din the Tax
Opinion, it concludes that:
* the Merger will constitute a reorganization within the meaning of Section 368
of the Code, and that
* Peoples' shareholders who exchange Peoples Stock for Hibernia Stock in the
Merger will not recognize gain or loss for federal income tax purposes in that
exchange.
See "PROPOSED MERGER -- Representations and Warranties; Conditions to the
Merger; Waiver."
If the Merger constitutes a reorganization within the meaning of Section
368 of the Code, then:
* none of Peoples, the Bank, Hibernia or HNB will recognize any gain or loss by
reason of the Merger;
* Peoples' shareholders will not recognize any gain or loss for federal income
tax purposes to the extent they receive Hibernia Stock in exchange for Peoples
Stock in the Merger;
* the tax basis in the Hibernia Common Stock received in the Merger will be the
same as the tax basis in the Peoples Common Stock surrendered in exchange
therefor; and
* the holding period, for federal income tax purposes, for Hibernia Stock
received in exchange for Peoples Stock will include the period during which the
shareholder held the Peoples Common Stock surrendered in the exchange (as long
as the Peoples Stock was held as a capital asset at the Effective Date).
Tax laws are complex, and the tax consequences to you may be affected by
matters that are not discussed in the Tax Opinion. For these reasons, we
recommend that you consult your own tax advisor concerning the applicable
federal, state and local tax consequences of the Merger to you.
Cash payments received in the Merger create different tax consequences
than those discussed in this section. For more information about the federal
income tax consequences of cash payments received by dissenting shareholders,
see "PROPOSED MERGER -- Rights of Dissenting Shareholders."
Resale of Hibernia Common Stock
The shares of Hibernia Stock that will be exchanged for Peoples Stock in
the Merger have been registered under the Securities Act. Those shares must also
be approved for listing, upon official notice of issuance, on the NYSE as a
condition to completing the Merger. Once those shares are listed on the NYSE,
shareholders who are not "affiliates" of Peoples may freely trade them. The term
"affiliate" generally means each person was an executive officer, directors and
10% shareholder of Peoples prior to the Merger.
Those shareholders who are deemed to be affiliates of Peoples may only
sell their Hibernia Stock as provided by Rule 145 of the Securities Act, or as
otherwise permitted under the Securities Act. Those shareholders may publicly
resell Hibernia Common Stock received by them in the Merger if they register the
resale of those shares or they comply with the restrictions of Rule 145 (unless
they are "affiliates" of Hibernia). If you are or may be an affiliate of
Peoples, you should carefully consider the resale restrictions imposed by Rule
145 before you attempt to transfer any shares of Hibernia Stock after the
Merger. In addition, shares of Hibernia Stock issued to affiliates of Peoples in
the Merger will not be transferable until financial results that include least
30 days of post-Merger combined operations of Hibernia and Peoples have been
published. (This restriction is necessary in order to satisfy certain
requirements for pooling-of-interests accounting treatment.)
Peoples must identify those persons who may be deemed to be affiliates.
Also, Peoples must use its best efforts to have each person it identifies as an
affiliate deliver to Hibernia a written agreement relating to the transfer
restrictions on their Hibernia Stock. In addition, Hibernia will place stop
transfer instructions with its transfer agent regarding Hibernia Common Stock
issued to affiliates of Peoples to ensure that transfers by those persons comply
with Rule 145 and the terms of any applicable affiliate resale agreement with
Hibernia.
Rights of Dissenting Shareholders
IF YOU OBJECT TO THE MERGERS AND DESIRE TO PERFECT DISSENTERS' RIGHTS,
YOU WILL LOSE THE RIGHT TO DISSENT FROM THE MERGERS IF YOU DO NOT TAKE THE
FOLLOWING STEPS TIMELY. IF YOU LOSE YOUR RIGHT TO DISSENT, THE SHARES YOU OWN
WILL BE CONVERTED INTO THE RIGHT TO RECEIVE HIBERNIA COMMON STOCK AND/OR CASH IN
ACCORDANCE WITH THE TERMS OF THE MERGER AGREEMENT.
If the Merger is approved by the holders of at least 80% of the total
shares of Peoples Stock outstanding, no shareholder of Peoples will be entitled
to dissenters' rights. Otherwise, Section 131 of the LBCL allows a shareholder
of Peoples who objects to the Merger and who complies with the provisions of
that section to dissent from the Merger. If you properly dissent, you will be
entitled to receive the fair value of your shares of Peoples Stock in cash. The
fair value of your stock for this purpose will be determined in an agreement
between you and Hibernia, unless you cannot agree with Hibernia as to the value.
In that case, the state district court for the Parish of Webster will determine
the value of your shares.
To exercise your right of dissent, you must (i) object in writing to the
Merger prior to or at the Meeting, (ii) file your objection with Peoples, and
(iii) vote your shares against the Merger at the Meeting. If you simply vote
against the Merger or specify that your proxy should be voted against the
Merger, this will not constitute the necessary written objection to the Merger.
Also, if you (a) abstain from voting on the Merger, (b) vote in favor of the
Merger, or (c) sign a proxy card relating to the Meeting without specifying how
your proxy is to be voted, you will waive your right to receive the fair value
of your shares in cash under 131 of the LBCL.
If dissenters' rights apply to the Merger, Hibernia will notify each
shareholder who filed a written objection to the Merger who also voted against
the Merger. Hibernia will send this notice by registered mail after the Merger
has been completed. If you receive this notice and wish to perfect your
dissenters' rights, you must send Hibernia a written demand for payment of the
fair value of your Peoples shares. The demand must be received by Hibernia
within 20 days after the date on which Hibernia's notice was mailed to you. this
demand must state the amount that your are demanding for you shares and a post
office address to which Hibernia may reply to you. You must also deposit the
certificate(s) representing your shares of Peoples Stock in escrow with a bank
or trust company located in Webster Parish, Louisiana. You must also include
with your demand to Hibernia the written acknowledgment of bank or trust company
that holds your certificate(s) that it is holding the certificate(s) on the sole
condition that the certificate(s) will be delivered to Hibernia upon payment of
the value of the shares in accordance with 131. The certificate(s) must also be
duly endorsed and transferred to Hibernia.
YOU MUST DO ALL OF THE THINGS DESCRIBED ABOVE IN ORDER TO PRESERVE YOUR
RIGHT TO DISSENT AND TO RECEIVE THE FAIR VALUE OF YOUR SHARES IN CASH. IF YOU DO
NOT FOLLOW EACH OF THESE STEPS AS DESCRIBED, YOU WILL HAVE NO RIGHT TO RECEIVE
CASH FOR YOUR SHARES.
If Hibernia does not agree with the fair value that you demand, or does not
agree that payment is due, Hibernia will notify you within 20 days after it
receives your demand and acknowledgment. In that case, Hibernia's notice to you
will include the value Hibernia is willing to pay for the shares or its belief
that no payment is due. If you do accept the amount offered by Hibernia, you
must file suit against Hibernia in the state district court for the Parish of
Webster for a judicial determination of the fair cash value of the shares. This
suit must be filed , within 60 days after you receive Hibernia's notice. Any
shareholder who is entitled to file such a suit may intervene as a plaintiff in
any suit filed against Hibernia by any other former Peoples shareholder for a
judicial determination of the fair cash value of his shares. This intervention
must occur , within the 60-day period allowed to the initial shareholder to
bring his suit, and intervention may not occur thereafter. If you fail to bring
or to intervene in such a suit within the applicable 60-day period, you will be
deemed to have consented to accept Hibernia's position in its notice (either
that no payment is due or that Hibernia owes you only the amount specified).
If a suit is filed and Hibernia deposits with the court the amount, if
any, that it specified in its notice of disagreement, then the costs (not
including legal fees) of the suit will be taxed against the shareholder if the
amount finally awarded to him, exclusive of interest or costs, is equal to or
less than the amount deposited by Hibernia. Otherwise, the costs (not including
legal fees) will be taxed against Hibernia. The same rules apply to
interventions in this instance as to the filing of the suit itself.
If you file a demand for the value of your shares, you will cease to
have any rights as a shareholder of Peoples or Hibernia except the rights
created by 131. Your may voluntarily withdraw your demand at any time before
Hibernia gives its notice of disagreement. If you wish to withdraw your demand
after that time, you may only do so with the written consent of Hibernia. If you
withdraw your demand or otherwise lose your dissenters' rights under Section
131, your rights as a shareholder will be restored as of the time you filed your
demand for fair cash value.
Prior to the Effective Date, any shareholders of Peoples who wishes to
dissent should send any communications in that regard to Ralph S. Williams,
President and Chief Executive Officer, Peoples Holding Corporation, 618 Main
Street, Minden, Louisiana 71055-3327. On or after the Effective Date, dissenting
shareholders should send any communications regarding their rights to Patricia
C. Meringer, Secretary and Corporate Counsel, Hibernia Corporation, 313
Carondelet Street, New Orleans, Louisiana, 70130, accompanied by the surrender
of their Peoples stock certificates. All such communications should be signed by
or on behalf of the dissenting shareholder in the form in which his shares are
registered on the books of Peoples.
Hibernia has the right to terminate the Agreements if the number of
shares of Peoples Stock as to which holders are legally entitled to assert
dissenters' rights constitutes 9.8% or more of the outstanding shares of Peoples
Stock. See "THE MERGER -- Amendment; Termination."
The foregoing summary of dissenters' rights under the LBCL is
necessarily incomplete and is qualified in its entirety by reference to 131 of
the LBCL, which is set forth in its entirety in this Proxy Statement-Prospectus
as Appendix C.
Accounting Treatment
Hibernia intends to account for the Merger as a pooling of interests. In
order for the Merger to qualify for pooling-of-interests accounting treatment,
among other things, 90% or more of the outstanding Peoples Common Stock must be
exchanged for Hibernia Common Stock. Also, in order for the pooling-of-interests
accounting method to apply, "affiliates" of Peoples cannot sell, transfer,
pledge or otherwise alienate or encumber any shares of Hibernia Common Stock
received in the Merger until the results of at least 30 days of post-Merger
combined operations of Peoples and Hibernia have been published. Persons
believed by Peoples to be "affiliates" have agreed to comply with these
restrictions.
Peoples has agreed to use its best efforts to permit the transaction to
be accounted for as a pooling of interests. Hibernia is not obligated to
consummate the Merger if the Merger does not qualify for pooling-of-interests
accounting treatment under these circumstances.
CERTAIN REGULATORY CONSIDERATIONS
General
Hibernia is regulated and supervised by the Federal Reserve Board. Under
the BHCA, bank holding companies may not directly or indirectly acquire the
ownership or control of more than 5% of the voting shares or substantially all
of the assets of any company, including a bank, without the prior approval of
the Federal Reserve Board. Bank holding companies also generally are prohibited
from engaging under the BHCA in nonbanking activities (with certain exceptions).
Hibernia's national banking subsidiaries are regulated, supervised and
examined by the OCC. Hibernia's banking subsidiaries also are subject to various
requirements and restrictions under federal and state law, including
* requirements to maintain reserves against deposits,
* restrictions on the types and amounts of loans that may be made,
* restrictions on the interest that may be charged on loans,
* and limitations on the types of investments that may be made and the types of
services that may be offered.
Various consumer laws and regulations also affect the operations of HNB and
HNBT. Commercial banks such as HNB and HNBT also are affected by the Federal
Reserve Board's attempts to control the money supply and credit availability in
order to influence the economy.
Payment of Dividends
Hibernia derives substantially all of its income from the payment of
dividends by its banking subsidiaries. The ability of its banking subsidiaries
to pay dividends affects Hibernia's ability to pay dividends to its
shareholders. Various statutory restrictions apply to HNB's and HNBT's ability
to pay dividends to Hibernia. As of December 31, 1997, Hibernia's banking
subsidiaries had approximately $157 million (plus retained earnings in 1998)
available to pay dividends to Hibernia.
The OCC may prohibit a national bank from engaging in an unsafe or
unsound practice. The OCC has indicated that it generally would be an unsafe and
unsound practice to pay dividends if the payment of the dividend would deplete a
bank's capital to an inadequate level. HNB's and HNBT's ability to pay dividends
in the future is influenced by bank regulatory policies or agreements and by
capital guidelines. The level of this influence could increase in the future.
Additional information on this topic is available in some of the documents that
are incorporated by reference herein. See "AVAILABLE INFORMATION."
The Federal Reserve Board maintains a policy that requires bank holding
companies to serve as a source of strength for their subsidiary banks. In
furtherance of this policy, the Federal Reserve has stated that a bank holding
company generally should not maintain a rate of cash dividends unless its net
income available to common stockholders has been sufficient to fully fund the
dividends, and the prospective rate of earnings retention appears to be
consistent with the holding company's capital needs, asset quality and overall
financial condition.
Restrictions on Extensions of Credit
Federal law restricts HNB's and HNBT `s ability to
* extend credit to affiliates (including Hibernia),
* purchase assets of its affiliates,
* issue a guarantee, acceptance or letter of credit on behalf of its affiliates
(including an endorsement or standby letter of credit), or
* purchase or invest in the stock or securities of an affiliate or to take that
stock or securities as collateral for loans to any borrower.
Extensions of credit and issuances to affiliates generally must be secured by
eligible collateral. In addition, all such transactions with a single affiliate
are generally limited to 10% of HNB's and HNBT's capital and surplus and all
such transactions with affiliates may not exceed 20% of HNB's and HNBT's capital
and surplus.
Hibernia's banking subsidiaries are also limited in the aggregate amount
that may be loaned to a single borrower or a group of borrowers that are deemed
to be affiliated with each other for purposes of these rules. These loans are
limited to 15% of HNB's and HNBT's capital and surplus.
The limitations described above in this section apply to all national
banks.
<PAGE>
PRO FORMA FINANCIAL INFORMATION
The following unaudited pro forma combined balance sheet of Hibernia as
of December 31, 1997 and income statements of Hibernia for the years ended
December 31, 1997, 1996 and 1995 give effect to the pending merger with Peoples.
The statements also assume that the Merger is accounted for as a pooling of
interests. The pro forma combined balance sheet treats the Merger as if it
occurred on December 31, 1997; the pro forma combined income statements treat
the Merger as if it had occurred on January 1, 1995.
The information for the years ended December 31, 997, 1996 and 1995, in
the column titled "Hibernia Corporation" is summarized from the consolidated
financial statements of Hibernia contained in Hibernia's Annual Report on Form
10-K for the year ended December 31, 1997.
The information contained in the column titled "Peoples Holding
Corporation" is based on the financial statements and related notes, and
Management's Discussion and Analysis of Financial Condition and Results of
Operations, of Peoples contained elsewhere in this Proxy Statement-Prospectus.
We encourage you to read this column in conjunction with the other financial
information about Peoples contained in this Proxy Statement-Prospectus.
The Pro Forma Financial Statements are presented for information
purposes only. The results shown in them are not necessarily indicative of the
actual results that might have occurred if the Merger had been completed on
January 1, 1995. Also, they are not necessarily indicative of results that might
be achieved in the future if the Merger is completed.
<PAGE>
Pro Forma Combined Balance Sheet (Unaudited)
The following unaudited combined balance sheet combines the balance
sheets of Hibernia and peoples as if the Merger had been effective on December
31, 1997. You should read this balance sheet in conjunction with the financial
statements and related notes of Hibernia (which are contained in Hibernia's 1997
Annual Report and incorporated herein by reference) and the December 31, 1997
financial statements and related notes of Peoples (which are included elsewhere
in this Proxy Statement-Prospectus).
<PAGE>
<TABLE>
<CAPTION>
PRO FORMA COMBINED BALANCE SHEET
Hibernia Corporation and Subsidiaries
December 31, 1997
- ------------------------------------------------------------------------------------------------------------------------------------
PEOPLES PRO PRO FORMA
HIBERNIA HOLDING FORMA HIBERNIA
Unaudited ($ in thousands) CORPORATION CORPORATION ADJUSTMENTS CORPORATION
- ------------------------------------------------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C>
ASSETS
Cash and due from banks ......................................... $ 529,724 $ 5,609 $ 535,333
Short-term investments .......................................... 393,915 39,300 433,215
Securities available for sale ................................... 2,147,405 - $ 101,693 (B) 2,249,098
Securities held to maturity ..................................... - 101,553 (101,553) (B) -
Loans, net of unearned income ................................... 7,580,251 78,401 7,658,652
Reserve for possible loan losses ............................ (107,540) (1,980) -109,520
- ------------------------------------------------------------------------------------------------------------------------------------
Loans, net .............................................. 7,472,711 76,421 - 7,549,132
- ------------------------------------------------------------------------------------------------------------------------------------
Bank premises and equipment ..................................... 173,906 1,025 174,931
Customers' acceptance liability ................................. 144 - 144
Goodwill ........................................................ 130,405 1,792 132,197
Other intangibles assets ........................................ 23,908 - 23,908
Other assets .................................................... 150,920 2,305 (49) (B) 153,176
- ------------------------------------------------------------------------------------------------------------------------------------
TOTAL ASSETS ............................................ $11,023,038 $ 228,005 $ 91 $11,251,134
====================================================================================================================================
LIABILITIES
Deposits:
Demand, noninterest-bearing ................................. $ 1,620,713 $ 27,669 $ 1,648,382
Interest-bearing ............................................ 7,012,616 165,115 7,177,731
- ------------------------------------------------------------------------------------------------------------------------------------
Total Deposits .......................................... 8,633,329 192,784 8,826,113
- ------------------------------------------------------------------------------------------------------------------------------------
Short-term borrowings ........................................... 700,247 4,085 704,332
Liability on acceptances ........................................ 144 - 144
Other liabilities ............................................... 132,456 1,523 133,979
Debt ............................................................ 506,548 - 506,548
- ------------------------------------------------------------------------------------------------------------------------------------
TOTAL LIABILITIES ....................................... 9,972,724 198,392 - 10,171,116
- ------------------------------------------------------------------------------------------------------------------------------------
SHAREHOLDERS' EQUITY
Preferred Stock ................................................. 100,000 - 100,000
Common Stock .................................................... 255,362 3,832 $ 3,008 (A) 262,202
Surplus ......................................................... 385,095 17 (3,497) (A) 381,615
Retained earnings ............................................... 314,600 26,253 340,853
Treasury stock .................................................. - (489) 489 (A) -
Unrealized gains (losses) on securities available for sale 12,644 - 91 (B) 12,735
Unearned compensation ........................................... (17,387) - (17,387)
- ------------------------------------------------------------------------------------------------------------------------------------
TOTAL SHAREHOLDERS' EQUITY .............................. 1,050,314 29,613 91 1,080,018
- ------------------------------------------------------------------------------------------------------------------------------------
TOTAL LIABILITIES AND SHAREHOLDERS' EQUITY .............. $11,023,038 $ 228,005 $ 91 $11,251,134
====================================================================================================================================
- ----------------
See notes to Pro Forma Combined Balance Sheet.
</TABLE>
<PAGE>
HIBERNIA CORPORATION
NOTES TO PRO FORM COMBINED BALANCE SHEET
December 31, 1997
A. Based upon an assumed Exchange Rate of 9.5 shares of Hibernia Common Stock
for each share of Peoples Stock, Hibernia plans to issue approximately 3,562,367
shares of Hibernia Common Stock in the Merger. At an assumed market value of
$20.00, this results in an aggregate market value for the shares to be issued in
the Merger of $71,247,340. The stated value of the Hibernia Common Stock is
$1.92 per share.
In accordance with the pooling-of-interests accounting method, the
historical equities of the merged companies are combined for purposes of this
pro forma combined balance sheet.
B. In accordance with Hibernia's investment policies, securities of $101,553,000
with a market value of $101,693,000, classified as held to maturity by Peoples,
will be reclassified by Hibernia as securities available for sale. The impact on
the equity of this mark-to-market, net of tax, is $91,000.
<PAGE>
Pro Forma Combined Income Statements (Unaudited)
The following unaudited pro forma combined income statements for the
years ended December 31, 1997, 1996 and 1995 combined the income statements of
Hibernia and Peoples as if the Merger had occurred on January 1, 1995. We
encourage you to read pro forma income statements in conjunction with Hibernia's
consolidated financial statements and notes contained in its Annual Report for
1997 (which is incorporated by reference into this Proxy Statement-Prospectus)
and the financial statements and related notes for the years ended December 31,
1997 and 1996 for Peoples (contained elsewhere herein). The costs associated
with the Merger, estimated to be $67,000, will be accounted for as a current
period expense when incurred.
<PAGE>
<TABLE>
<CAPTION>
HIBERNIA CORPORATION
PRO FORMA COMBINED INCOME STATEMENT
December 31, 1997
- --------------------------------------------------------------------------------------------------------------
PEOPLES PRO FORMA
HIBERNIA HOLDING HIBERNIA
Unaudited ($ in thousands, except per share data) CORPORATION CORPORATION CORPORATION
- --------------------------------------------------------------------------------------------------------------
<S> <C> <C> <C>
Interest income
Interest and fees on loans ................... $ 594,775 $ 7,653 $ 602,428
Interest on securities available for sale .... 141,391 6,876 148,267
Interest on securities held to maturity ...... - - -
Interest on short-term investments ........... 13,916 1,405 15,321
- --------------------------------------------------------------------------------------------------------------
Total interest income .................... 750,082 15,934 766,016
- --------------------------------------------------------------------------------------------------------------
Interest expense
Interest on deposits ......................... 286,338 6,846 293,184
Interest on short-term borrowings ............ 30,402 164 30,566
Interest on debt ............................. 5,585 - 5,585
- --------------------------------------------------------------------------------------------------------------
Total interest expense ................... 322,325 7,010 329,335
- --------------------------------------------------------------------------------------------------------------
Net interest income .............................. 427,757 8,924 436,681
Provision for possible loan losses ........... 620 30 650
- --------------------------------------------------------------------------------------------------------------
Net interest income after provision
for possible loan losses ...................... 427,137 8,894 436,031
- --------------------------------------------------------------------------------------------------------------
Noninterest income
Service charges on deposits .................. 71,798 1,152 72,950
Trust fees ................................... 14,757 19 14,776
Other service, collection and exchange charges 43,008 198 43,206
Other operating income ....................... 13,150 92 13,242
Securities gains (losses), net ............... 2,718 74 2,792
- --------------------------------------------------------------------------------------------------------------
Total noninterest income ................. 145,431 1,535 146,966
- --------------------------------------------------------------------------------------------------------------
Noninterest expense
Salaries and employee benefits ............... 181,097 2,490 183,587
Occupancy expense, net ....................... 30,823 461 31,284
Equipment expense ............................ 27,815 186 28,001
Data processing expense ...................... 22,952 268 23,220
Foreclosed property expense, net ............. (3,219) 5 (3,214)
Amortization of intangibles .................. 13,747 224 13,971
Other operating expense ...................... 88,729 1,039 89,768
- --------------------------------------------------------------------------------------------------------------
Total noninterest expense ................ 361,944 4,673 366,617
- --------------------------------------------------------------------------------------------------------------
Income before income taxes ....................... 210,624 5,756 216,380
Income tax expense ............................... 73,235 1,945 75,180
- --------------------------------------------------------------------------------------------------------------
Income from continuing operations ................ $ 137,389 $ 3,811 $ 141,200
==============================================================================================================
Income from continuing operations
applicable to common shareholders ............ $ 130,489 $ 3,811 $ 134,300
==============================================================================================================
Pro forma weighted average common shares ......... 130,795,276 3,562,367 134,357,643
==============================================================================================================
Pro forma weighted average common
shares - assuming dilution ................... 133,325,407 3,562,367 136,887,774
==============================================================================================================
Pro forma income per common share from
continuing operations ........................ $ 1.00 $ 1.00
==============================================================================================================
Pro forma income per common share from
continuing operations - assuming dilution .... $ 0.98 $ 0.98
==============================================================================================================
- -------------
See notes to Pro Forma Combined Income Statements.
</TABLE>
<PAGE>
<TABLE>
<CAPTION>
HIBERNIA CORPORATION
PRO FORMA COMBINED INCOME STATEMENT
December 31, 1996
- ---------------------------------------------------------------------------------------------------------------
PEOPLES PRO FORMA
HIBERNIA HOLDING HIBERNIA
Unaudited ($ in thousands, except per share data) CORPORATION CORPORATION CORPORATION
- ---------------------------------------------------------------------------------------------------------------
<S> <C> <C> <C>
Interest income
Interest and fees on loans ................... $ 487,918 $ 6,800 $ 494,718
Interest on securities available for sale .... 142,457 7,329 149,786
Interest on securities held to maturity ...... - - -
Interest on short-term investments ........... 11,065 1,190 12,255
- ---------------------------------------------------------------------------------------------------------------
Total interest income .................... 641,440 15,319 656,759
- ---------------------------------------------------------------------------------------------------------------
Interest expense
Interest on deposits ......................... 248,593 6,987 255,580
Interest on short-term borrowings ............ 15,288 201 15,489
Interest on debt ............................. 1,926 - 1,926
- ---------------------------------------------------------------------------------------------------------------
Total interest expense ................... 265,807 7,188 272,995
- ---------------------------------------------------------------------------------------------------------------
Net interest income .............................. 375,633 8,131 383,764
Provision for possible loan losses ........... (12,417) 8 (12,409)
- ---------------------------------------------------------------------------------------------------------------
Net interest income after provision
for possible loan losses ...................... 388,050 8,123 396,173
- ---------------------------------------------------------------------------------------------------------------
Noninterest income
Service charges on deposits .................. 59,488 992 60,480
Trust fees ................................... 13,404 17 13,421
Other service, collection and exchange charges 34,647 155 34,802
Gain on sale of business lines ............... 517 - 517
Other operating income ....................... 9,794 195 9,989
Securities gains (losses), net ............... (5,306) 5 (5,301)
- ---------------------------------------------------------------------------------------------------------------
Total noninterest income ................. 112,544 1,364 113,908
- ---------------------------------------------------------------------------------------------------------------
Noninterest expense
Salaries and employee benefits ............... 164,774 2,497 167,271
Occupancy expense, net ....................... 27,531 537 28,068
Equipment expense ............................ 29,178 217 29,395
Data processing expense ...................... 20,711 226 20,937
Foreclosed property expense, net ............. (1,735) (17) (1,752)
Amortization of intangibles .................. 7,441 224 7,665
Other operating expense ...................... 79,020 1,101 80,121
- ---------------------------------------------------------------------------------------------------------------
Total noninterest expense ................ 326,920 4,785 331,705
- ---------------------------------------------------------------------------------------------------------------
Income before income taxes ....................... 173,674 4,702 178,376
Income tax expense ............................... 60,856 1,474 62,330
- ---------------------------------------------------------------------------------------------------------------
Income from continuing operations ................ $ 112,818 $ 3,228 $ 116,046
===============================================================================================================
Income from continuing operations
applicable to common shareholders ............ $ 111,078 $ 3,228 $ 114,306
===============================================================================================================
Pro forma weighted average common shares ......... 130,160,581 3,562,367 133,722,948
===============================================================================================================
Pro forma income per common share
assuming dilution ............................ 131,658,685 3,562,367 135,221,052
===============================================================================================================
Pro forma income per common share from
continuing operations ........................ $ 0.85 $ 0.85
===============================================================================================================
Pro forma income per common share from
continuing operations - assuming dilution .... $ 0.84 $ 0.85
===============================================================================================================
- -------------
See notes to Pro Forma Combined Income Statements.
</TABLE>
<PAGE>
<TABLE>
<CAPTION>
HIBERNIA CORPORATION
PRO FORMA COMBINED INCOME STATEMENT
December 31, 1995
- ---------------------------------------------------------------------------------------------------------------
PEOPLES PRO FORMA
HIBERNIA HOLDING HIBERNIA
Unaudited ($ in thousands, except per share data) CORPORATION CORPORATION CORPORATION
- ---------------------------------------------------------------------------------------------------------------
<S> <C> <C> <C>
Interest income
Interest and fees on loans ................... $ 398,117 $ 4,879 $ 402,996
Interest on securities available for sale .... 52,226 - 52,226
Interest on securities held to maturity ...... 117,110 6,360 123,470
Interest on short-term investments ........... 7,849 1,055 8,904
- ---------------------------------------------------------------------------------------------------------------
Total interest income .................... 575,302 12,294 587,596
- ---------------------------------------------------------------------------------------------------------------
Interest expense
Interest on deposits ......................... 231,349 5,244 236,593
Interest on short-term borrowings ............ 13,810 216 14,026
Interest on debt ............................. 1,827 - 1,827
- ---------------------------------------------------------------------------------------------------------------
Total interest expense ................... 246,986 5,460 252,446
- ---------------------------------------------------------------------------------------------------------------
Net interest income .............................. 328,316 6,834 335,150
Provision for possible loan losses ........... 1,218 74 1,292
- ---------------------------------------------------------------------------------------------------------------
Net interest income after provision
for possible loan losses ...................... 327,098 6,760 333,858
- ---------------------------------------------------------------------------------------------------------------
Noninterest income
Service charges on deposits .................. 50,074 737 50,811
Trust fees ................................... 12,506 10 12,516
Other service, collection and exchange charges 28,857 101 28,958
Gain on divestiture of banking offices ....... 2,361 - 2,361
Gain on sale of business lines ............... 3,402 - 3,402
Other operating income ....................... 8,503 303 8,806
Securities gains (losses), net ............... 227 - 227
- ---------------------------------------------------------------------------------------------------------------
Total noninterest income ................. 105,930 1,151 107,081
- ---------------------------------------------------------------------------------------------------------------
Noninterest expense
Salaries and employee benefits ............... 139,465 1,905 141,370
Occupancy expense, net ....................... 26,955 429 27,384
Equipment expense ............................ 22,058 165 22,223
Data processing expense ...................... 19,731 157 19,888
Foreclosed property expense, net ............. (693) (161) (854)
Amortization of intangibles .................. 3,709 - 3,709
Other operating expense ...................... 78,257 1,147 79,404
- ---------------------------------------------------------------------------------------------------------------
Total noninterest expense ................ 289,482 3,642 293,124
- ---------------------------------------------------------------------------------------------------------------
Income before income taxes ....................... 143,546 4,269 147,815
Income tax expense ............................... 12,134 907 13,041
- ---------------------------------------------------------------------------------------------------------------
Income from continuing operations ................ $ 131,412 $ 3,362 $ 134,774
===============================================================================================================
Income from continuing operations
applicable to common shareholders ............ $ 131,412 $ 3,362 $ 134,774
===============================================================================================================
Pro forma weighted average common shares ......... 130,275,835 3,562,367 133,838,202
===============================================================================================================
Pro forma weighted average common
shares - assuming dilution ................... 131,201,341 3,562,367 134,763,708
===============================================================================================================
Pro forma income per common share from
continuing operations ........................ $ 1.01 $ 1.01
===============================================================================================================
Pro forma income per common share from
continuing operations - assuming dilution .... $ 1.00 $ 1.00
===============================================================================================================
- -------------
See notes to Pro Forma Combined Income Statements.
</TABLE>
<PAGE>
HIBERNIA CORPORATION
NOTES TO PRO FORMA COMBINED INCOME STATEMENTS
A. Hibernia expects to achieve savings in the Merger by reducing operating
costs. Most of these savings will occur when certain operations of the two
companies are consolidated. The extent of any savings will depend, among other
things, on the regulatory environment and economic conditions, and may be
affected by unanticipated changes in business activities, inflation and other
external factors. There can be no assurance that any such savings will be
realized. We have not adjusted the unaudited pro forma financial statements to
reflect any anticipated cost savings.
CERTAIN INFORMATION CONCERNING
PEOPLES AND THE BANK
Principal Business
Peoples Holding Corporation. Peoples was organized on January 19, 1982
and is a bank holding company registered under the Bank Holding Company Act of
1956, as amended. At December 31, 1997. Peoples had total consolidated assets of
approximately $228 million and shareholders' equity of approximately $29.6
million. Peoples is domiciled in Minden, Louisiana and its principal executive
offices are located at 618 Main Street, Minden, Louisiana 71055 and its
telephone number is (318) 377- 6366.
Peoples Bank & Trust Company. Peoples Bank was organized on February 7,
1931. Peoples Bank is not a member of the Federal Reserve. Peoples Bank's
deposits are insured by the FDIC. At December 31, 1997, Peoples Bank had total
assets of approximately $228 million, total deposits of approximately $192.8
million and total shareholders' equity of approximately $29.4 million. Peoples
Bank is domiciled in Minden, Louisiana and its principal executive offices are
located at 618 Main Street, Minden, Louisiana 71055 and its telephone number is
(504) 377-6366. Peoples Bank currently operates a full service facility in
Minden, Louisiana and eight additional branches in Minden, Haynesville, Homer,
Sibley, Cotton Valley, and Plain Dealing, Louisiana.
Peoples Bank conducts general commercial banking business throughout
Claiborne, Webster and Bossier Parishes. Peoples Bank offers a variety of
deposit products, including demand deposits, time deposits, and saving accounts,
as well as a variety of loan products, including consumer loans, small mortgage
residential real estate loans.
The deposit services are delivered through nine branches that provide
walk-in and drive-through teller services and also through two proprietary
ATM's, as well as regional and national ATM networks.
Loan products are delivered through five branches.
Peoples Bank competes actively with national and state banks in
Northwestern Louisiana for all types of loans and deposits. In addition, Peoples
Bank competes for funds with savings and loan associations, the U.S. Government,
credit unions, and other financial service companies. It competes for loans with
other financial service institutions, such as savings and loan associations,
insurance companies, small loan companies, credit unions, mortgage companies,
and certain government agencies. Peoples Bank's primary competitors in its
service area are Bank One, Regions Bank, Minden Bank & Trust Company, Minden
Building & Loan Association, Deposit Guaranty, First National Bank, Barksdale
Federal Credit Union and Bossier Federal Credit Union.
Peoples and Peoples Bank are extensively regulated under both federal
and state laws. To the extent that the following information describes
particular statutory provisions, it is qualified in its entirety by reference to
the particular statutory and regulatory provisions. Any change in applicable law
or regulation may have a material effect on the business and prospects of
Peoples.
Peoples is a bank holding company within the meaning of the BHCA, and,
as such, is subject to the provisions of the BHCA and to regulation and
supervision by the Board of Governors of the Federal Reserve System. Peoples is
required to file with the Federal Reserve annual reports containing such
information as the Board may require pursuant to the Act and is also subject to
periodic examination by the Board.
Both federal and state laws extensively regulate various aspects of the
banking industry, including requirements regarding the maintenance of reserves
against deposits, limitations on the rates that can be charged on loans, and
restrictions on the nature and amounts of loans and investments that can be
made.
As a state bank, Peoples Bank is subject to the supervisory authority of
the Louisiana Commissioner of Financial Institutions, whose office conducts
periodic examinations of Peoples Bank. As a federally-insured bank, Peoples Bank
is also subject to supervision and regulation by the Federal Deposit Insurance
Corporation. The foregoing regulation is primarily intended to protect Peoples
Bank's creditors and depositors rather than Peoples' shareholders.
Competition
Peoples Bank has a main office in Minden and branch facilities in
Claiborne, Webster and Bossier Parishes. The relevant geographic market for
Peoples Bank consists of Claiborne, Webster and Bossier Parishes. Its main
competitors in these parishes consist of: Bank One and Regions Bank in Claiborne
Parish; Minden Bank & Trust Company, Minden Building & Loan Association in
Webster Parish; and Bank One, Deposit Guaranty (now First American Bank), First
National Bank in Benton, LA, Barksdale Federal Credit Union and Bossier Federal
Credit Union in Bossier Parish.
Seasonality of Business and Customers
Peoples Bank's deposits represent a cross-section of the area's economy.
There is no material concentration of deposits from any single customer or group
of customers. No significant portion of Peoples Bank's loans is concentrated
within a single industry or group of related industries. Historically, the
business of Peoples Bank has not been seasonal in nature's and management of the
Bank does not anticipate any seasonal trends in the future. Peoples Bank does
not rely on foreign sources of funds or income.
Employees
Peoples and Peoples Bank employ 71 persons full-time and 4 persons
part-time.
Properties
The principal properties of Peoples and Peoples Bank are the main office
located at 618 Main Street, Minden, Louisiana, and eight branches with two
located in Minden, two in Haynesville and one each in Homer, Sibley, Cotton
Valley and Plain Dealing, Louisiana. All facilities and the real properties upon
which they are situated are owned and occupied by Peoples Bank. Management
considers all of its buildings and premises to be in good condition.
Legal Proceedings
Peoples and Peoples Bank are parties to various ordinary routine legal
proceedings incidental to their business, after consulting with counsel,
management of Peoples does not believe that any of these proceedings will have a
material effect on the financial position or results of operations of either
Peoples or Peoples Bank.
Stock Prices and Dividends
There is no established trading market for the Peoples Stock. Based upon
sales known to management, the prices paid for Peoples Stock have ranged from
$56.00 per share from March 1996 through December 1997. You should note that
management of Peoples is not necessarily aware of each sale of Peoples Stock or
the price at which it occurred.
Dividends
as of the end of each Fiscal Quarter
Cash Dividends
Paid (Restated)
1998:
March 31 $.50
1997:
December 31 $.50
September 30 $67.00
June 30 $67.00
March 31 $64.00
1996:
December 31 $63.00
September 30 $60.00
June 30 $56.00
March 31 $56.00
*The figures presented have been restated to reflect the retroactive effect of a
25% stock split paid in February of 1997.
On the Record Date, there were 371 shareholders of record of Peoples
Stock.
Security Ownership of Principal Shareholders and Management
The following table sets forth as of the Record Date certain information
with respect to the beneficial ownership as defined in Rule 13d-3 of the
Exchange Act for each person who is the beneficial owner of more than five
percent of the Peoples Stock.
Percent
Amount of Beneficial of
Name and Address Ownership Class
R&J Family Limited Partnership 28,071 7.49%
3 Bay Creek Road
Minden, LA 71055
FBT LLC 22,700 6.05%
P. O. Box 250
Minden, LA 71055
The following table shows the number of shares of Peoples Common Stock
beneficially owned by each director, and all of the directors and executive
officers of Peoples as a group as of the Record Date. Except as otherwise
indicated, all shares indicated as beneficially owned are held with sole voting
and investment power.
Percent
Amount and Nature of of
Name Beneficial Ownership Class
Samuel K. Abshire 1,000 *
Ben Hunter 625 *
J. Robert Kennerly 765 *
O. Bryant Lewis 2,2201 *
John B. McDaniel 900 *
George E. McInnis 38,4462 10.25%
Luther W. Moore 1,325 *
Ronald E. Shuler 2,037 *
Claude O. West 2,9133 *
Ralph S. Williams 9,563 2.55%
Michael W. Wise 250 *
11 Directors and
Executive Officers
as a Group 60,423 16.11%
- -----------------------
*Less than one percent.
1 Includes 2,095 shares held by Lewis LA. Prop., L.L.C., as to which Mr. Lewis
has sole voting and dispositive power.
2 Includes shared voting and investmentpowers with respect to 878 shares held by
spouse, and shared voting and investment powers with respect to 7,019 shares
held by McInnis Brothers Construction Company of which Mr. McInnis serves as
Chairman of the Board. Also includes 28,071 shares held by R&J Family Limited
Partnership as to which Mr. McInnis has shared voting and investment power.
3 Includes 1,313 shares held by trust of which Mr. West is the trustee and
income beneficiary and as to which he has sole investment and voting power.
4 Includes 379 shares held by spouse as to which Mr. Williams has shared
dispositive power.
PEOPLES CONSOLIDATED FINANCIAL STATEMENTS
FOR THE YEARS ENDED DECEMBER 31, 1997 AND DECEMBER 31, 1996 (Audited)
Independent Auditors' Report
The Board of Directors
Peoples Holding Corporation:
We have audited the accompanying consolidated balance sheets of Peoples
Holding Corporation and Subsidiary (the "Company") as of December 31, 1997
and 1996, and the related consolidated statements of income, stockholders'
equity, and cash flows for the years then ended. These consolidated financial
statements are the responsibility of the Company's management. Our
responsibility is to express an opinion on these consolidated 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 consolidated financial statements referred to above
present fairly, in all material respects, the financial position of Peoples
Holding Corporation and Subsidiary as of December 31, 1997 and 1996, and the
results of their operations and their cash flows for the years then ended in
conformity with generally accepted accounting principles.
KPMG PEAT MARWICK LLP
Shreveport, Louisiana
January 16, 1998
<PAGE>
<TABLE>
<CAPTION>
PEOPLES HOLDING CORPORATION AND SUBSIDIARY
Consolidated Balance Sheets
December 31, 1997 and 1996
Assets 1997 1996
- -------------------------------------------------------------------------------------------------------
<S> <C> <C>
Cash and due from banks .................................... $ 5,608,899 7,305,405
Federal funds sold ......................................... 39,300,000 28,730,000
- -------------------------------------------------------------------------------------------------------
Total cash and cash equivalents .......... 44,908,899 36,035,405
- -------------------------------------------------------------------------------------------------------
Securities available for sale .............................. -- 3,976,455
Securities held to maturity ................................ 101,552,623 110,154,426
- -------------------------------------------------------------------------------------------------------
Loans ...................................................... 78,842,626 74,801,666
Less:
Allowance for loan losses ............................ 1,980,212 2,025,248
Unearned discount .................................... 441,763 408,311
- -------------------------------------------------------------------------------------------------------
Loans, net ............................... 76,420,651 72,368,107
- -------------------------------------------------------------------------------------------------------
Bank premises and equipment, net ........................... 1,025,529 1,075,744
Goodwill, less accumulated amortization .................... 1,792,011 2,016,011
Accrued interest and other assets .......................... 2,304,954 2,608,403
- -------------------------------------------------------------------------------------------------------
$ 228,004,667 228,234,551
=======================================================================================================
Liabilities and Stockholders' Equity
Deposits:
Demand ................................................. $ 27,669,590 25,389,743
Savings and interest-bearing transaction accounts ...... 68,003,106 68,123,382
Time ................................................... 97,111,414 102,203,070
- -------------------------------------------------------------------------------------------------------
Total deposits ........................... 192,784,110 195,716,195
- -------------------------------------------------------------------------------------------------------
Securities sold under agreements to repurchase ............. 4,085,167 3,830,168
Accrued interest, taxes, and expenses ...................... 1,489,998 1,777,974
Other liabilities .......................................... 32,644 266,596
- -------------------------------------------------------------------------------------------------------
Total liabilities ........................ 198,391,919 201,590,933
- -------------------------------------------------------------------------------------------------------
Stockholders' equity:
Common stock, par value $10 per share; authorized
420,000 shares; issued 383,244 and 308,053 shares .... 3,832,440 3,080,530
Surplus ................................................ 16,637 765,538
Undivided profits ...................................... 26,253,079 23,193,128
Net unrealized gain on available for sale securities,
net of tax ........................................... -- 41,579
Less shares held in treasury, at cost; 8,257
and 7,477 shares ..................................... (489,408) (437,157)
- -------------------------------------------------------------------------------------------------------
Total stockholders' equity ............... 29,612,748 26,643,618
- -------------------------------------------------------------------------------------------------------
Commitments and contingent liabilities $ 228,004,667 228,234,551
=======================================================================================================
- ------------
See accompanying notes to consolidated financial statements
</TABLE>
<PAGE>
<TABLE>
<CAPTION>
Consolidated Statements of Income
Years ended December 31, 1997 and 1996
1997 1996
- -------------------------------------------------------------------------------------------------------
<S> <C> <C>
Interest income:
Loans ...................................................... $ 7,653,245 6,800,365
Securities available for sale .............................. 137,175 68,689
Securities held to maturity:
Taxable .................................................. 6,593,375 7,030,062
Tax-exempt ............................................... 145,217 230,149
Federal funds sold ......................................... 1,405,398 1,189,529
- -------------------------------------------------------------------------------------------------------
Total interest income ........................ 15,934,410 15,318,794
- -------------------------------------------------------------------------------------------------------
Interest expense:
Savings and interest-bearing transaction accounts .......... 1,849,731 1,798,740
Time deposits .............................................. 4,996,250 5,188,252
Securities sold under agreements to repurchase ............. 164,466 200,895
- -------------------------------------------------------------------------------------------------------
Total interest expense ....................... 7,010,447 7,187,887
- -------------------------------------------------------------------------------------------------------
Net interest income .......................... 8,923,963 8,130,907
Provision for loan losses ...................................... 30,296 8,378
- -------------------------------------------------------------------------------------------------------
Net interest income after provision
for loan losses ............................ 8,893,667 8,122,529
- -------------------------------------------------------------------------------------------------------
Noninterest income:
Customer service charges ................................... 1,191,255 1,031,810
Net realized gains on sales of available for sale securities 74,153 5,435
Other ...................................................... 269,369 326,656
- -------------------------------------------------------------------------------------------------------
Total noninterest income ..................... 1,534,777 1,363,901
- -------------------------------------------------------------------------------------------------------
Noninterest expense:
Salaries and benefits ...................................... 2,489,954 2,496,323
Net occupancy .............................................. 646,476 753,370
Amortization of goodwill ................................... 224,000 224,000
Other ...................................................... 1,312,311 1,310,473
- -------------------------------------------------------------------------------------------------------
Total noninterest expense .................... 4,672,741 4,784,166
- -------------------------------------------------------------------------------------------------------
Income before income taxes ................... 5,755,703 4,702,264
Income taxes ................................................... 1,945,000 1,474,000
- -------------------------------------------------------------------------------------------------------
Net income ................................... $ 3,810,703 3,228,264
=======================================================================================================
Basic net income per share ..................................... $ 10.15 8.56
=======================================================================================================
- ------------
See accompanying notes to consolidated financial statements.
</TABLE>
<PAGE>
<TABLE>
<CAPTION>
Consolidated Statements of Stockholders' Equity
Years ended December 31, 1997 and 1996
1997 1996
- ---------------------------------------------------------------------------------------------------------
<S> <C> <C>
Common stock:
Balance, January 1 ......................................... $ 3,080,530 3,080,530
25% Stock split (75,144 shares) .......................... 751,440 --
Net sale of fractional shares (47 shares) ................ 470 --
- ---------------------------------------------------------------------------------------------------------
Balance, December 31 ....................................... 3,832,440 3,080,530
- ---------------------------------------------------------------------------------------------------------
Surplus:
Balance, January 1 ......................................... 765,538 765,538
25% Stock split .......................................... (751,440) --
Net sale of fractional shares ............................ 2,539 --
- ---------------------------------------------------------------------------------------------------------
Balance, December 31 ....................................... 16,637 765,538
- ---------------------------------------------------------------------------------------------------------
Undivided profits:
Balance, January 1 ......................................... 23,193,128 20,567,841
Net income ............................................... 3,810,703 3,228,264
Cash dividends - $2.00 and $1.60 per share ............... (750,752) (602,977)
- ---------------------------------------------------------------------------------------------------------
Balance, December 31 ....................................... 26,253,079 23,193,128
- ---------------------------------------------------------------------------------------------------------
Net unrealized gain on available for sale securities, net of tax -- 41,579
- ---------------------------------------------------------------------------------------------------------
Treasury stock:
Balance, January 1 ......................................... (437,157) (283,923)
Purchase of shares (791 and 2,133 shares) ................ (52,967) (153,909)
Sale of shares (11 and 9 shares) ......................... 716 675
- ---------------------------------------------------------------------------------------------------------
Balance, December 31 ....................................... (489,408) (437,157)
- ---------------------------------------------------------------------------------------------------------
Total stockholders' equity ................... $ 29,612,748 26,643,618
=========================================================================================================
- -------------
See accompanying notes to consolidated financial statements.
</TABLE>
<PAGE>
<TABLE>
<CAPTION>
Consolidated Statements of Cash Flows
Years ended December 31, 1997 and 1996
1997 1996
- ----------------------------------------------------------------------------------------------------
<S> <C> <C>
Cash flows from operating activities:
Net income ............................................ $ 3,810,703 3,228,264
Adjustments to reconcile net income to net
cash provided by operating activities:
Provision for depreciation ........................ 126,683 145,801
Amortization of goodwill .......................... 224,000 224,000
Provision for loan losses ......................... 30,296 8,378
Write-down of other real estate ................... 2,666 4,001
Deferred income tax expense (benefit) ............. (210,137) 358,000
Accretion of discounts on securities .............. (177,147) (230,223)
Amortization of premiums on securities ............ 801,695 817,526
Net gain on sales of available for sale securities (74,153) (5,435)
Net loss on sale of other real estate ............. 10,850 --
Decrease in accrued interest and other assets ..... 81,923 303,303
Increase (decrease) in other liabilities .......... (233,952) 266,596
Decrease in accrued interest, taxes, and expenses . (56,421) (162,810)
- ----------------------------------------------------------------------------------------------------
Net cash provided by operating activities 4,337,006 4,957,401
- ----------------------------------------------------------------------------------------------------
Cash flows from investing activities:
Proceeds from sales of other real estate .............. 276,518 159,657
Proceeds from maturities, paydowns and calls
of securities held to maturity ...................... 89,596,699 122,515,198
Purchases of securities held to maturity .............. (81,623,942) (127,192,981)
Proceeds from sales and paydowns of securities
available for sale .................................. 3,992,109 17,438,869
Purchases of securities available for sale ............ -- (3,929,702)
Net increase in loans ................................. (4,151,348) (9,560,941)
Purchases of bank premises, equipment and other
assets .............................................. (76,468) (169,546)
Net cash paid to purchase assets and assume
liabilities of acquired bank ........................ -- (5,081,843)
- ----------------------------------------------------------------------------------------------------
Net cash provided (used) by
investing activities .................. 8,013,568 (5,821,289)
- ----------------------------------------------------------------------------------------------------
Cash flows from financing activities:
Net increase (decrease) in deposit accounts ........... $ (2,932,085) 8,458,080
Net increase in securities sold under agreements
to repurchase ....................................... 254,999 146,001
Cash dividends paid ................................... (750,752) (602,977)
Purchase of fractional shares ......................... (2,047) --
Proceeds from sale of fractional shares ............... 5,056 --
Purchase of treasury stock ............................ (52,967) (153,909)
Proceeds from sales of treasury stock ................. 716 675
- ----------------------------------------------------------------------------------------------------
Net cash provided (used) by financing
activities ............................ (3,477,080) 7,847,870
- ----------------------------------------------------------------------------------------------------
Increase in cash and cash equivalents ..................... 8,873,494 6,983,982
Cash and cash equivalents at January 1 .................... 36,035,405 29,051,423
- ----------------------------------------------------------------------------------------------------
Cash and cash equivalents at December 31 .................. $ 44,908,899 36,035,405
====================================================================================================
Interest paid ............................................. $ 7,029,722 7,145,735
====================================================================================================
Income taxes paid ......................................... $ 2,200,000 920,000
====================================================================================================
- ------------
See accompanying notes to consolidated financial statements.
</TABLE>
<PAGE>
Notes to Financial Statements
December 31, 1997 and 1996
(1) Summary of Significant Accounting Policies
Business -- Peoples Holding Corporation (the "Company") is a bank holding
company in Minden, Louisiana. In November 1997, the Company merged its
subsidiary banks, Peoples Bank and Trust Company (Peoples), Planters Bank and
Trust Company of Claiborne Parish (Planters), and First State Bank and Trust
Company, Plain Dealing, Louisiana (First State), into one bank under the name
Peoples Bank and Trust Company (the "Bank"). The Bank provides a full range of
banking services to customers in northwestern Louisiana. The Company and its
subsidiary are subject to regulations of certain federal and state agencies and
undergo periodic examinations by those regulatory authorities.
Principles of Consolidation -- The consolidated financial statements
include the accounts of the Company and the bank. All significant intercompany
balances have been eliminated in consolidation.
The consolidated financial statements have been prepared in conformity
with generally accepted accounting principles. In preparing the consolidated
financial statements, management is required to make estimates and assumptions
that affect the reported amounts of assets and liabilities as of the date of the
balance sheet and income and expenses for the period. Actual results could
differ significantly from those estimates.
Material estimates that are particularly susceptible to significant
change relate to the determination of the allowance for loan losses and the
valuation of other real estate acquired in connection with foreclosures or in
satisfaction of loans. In connection with the determination of the allowances
for loan losses and the valuation of other real estate, management obtains
independent appraisals for significant properties.
Securities -- The Company classifies its debt and marketable equity
securities in one of three categories: trading, available-for-sale, or
held-to-maturity. Trading securities are bought and held principally for the
purpose of selling them in the near term. Held-to-maturity securities are those
securities in which the Company has the ability and intent to hold the security
until maturity. All other securities not included in trading or held-to-maturity
are classified as available-for-sale.
Trading and available-for-sale securities are recorded at fair value.
Held-to-maturity securities are recorded at amortized cost, adjusted for the
amortization or accretion of premiums or discounts. Unrealized holding gains and
losses on trading securities are included in earnings. Unrealized gains and
losses, net of the related tax effect, on available-for-sale securities are
excluded from earnings and are reported as a separate component of stockholders'
equity until realized. Transfers of securities between categories are recorded
at fair value at the date of transfer.
A decline in the market value of any available-for-sale or
held-to-maturity security below cost that is deemed other than temporary is
charged to operations resulting in the establishment of a new cost basis for the
security.
Premiums and discounts are amortized or accreted either over the life of
the related security as an adjustment to yield using the effective interest or
straight-line method (which approximates the interest method.) Dividend and
interest income are recognized when earned. Realized gains and losses for
securities classified as available-for-sale and held-to-maturity are included in
earnings and are derived using the specific identification method for
determining the cost of securities sold.
Bank Premises and Equipment -- Bank premises and equipment are carried at
cost less accumulated depreciation. Depreciation of bank premises and equipment
is provided on straight-line and accelerated methods for both financial and tax
purposes. Expenditures for major renewals and betterments of bank premises and
equipment are capitalized, and those for maintenance and repairs are charged to
expense as incurred.
Loans and Allowance for Loan Losses -- Unearned discounts on installment
loans are deferred and amortized into earnings by the sum-of-the-digits method,
which approximates a level yield for the applicable loans. Interest on other
loans is calculated using the simple interest method on daily balances of the
principal amount outstanding.
The accrual of income on loans is generally discontinued and all interest
income previously accrued and unpaid is reversed when a loan becomes more than
ninety days delinquent, or when certain factors indicate reasonable doubt as to
the timely collectibility of all amounts due. A loan may remain on accrual
status if it is in the process of collection and is either well secured or
guaranteed. Generally, nonaccruing loans are returned to an accrual status only
when none of the principal or interest is due and unpaid and the full
collectibility of the outstanding loan balance is reasonably assured. Cash
receipts on nonaccruing loans are generally applied to the principal balance
until the remaining balance is considered fully collectible.
A loan is considered impaired when based upon current information, it is
probable that the Company will be unable to collect amounts due. If a loan is
impaired, then impairment is measured by (1) the present value of expected
future cash flows discounted at the loan's original effective interest rate, (2)
the market price of impaired loans, or (3) the fair value of collateral.
In determining the amount of the allowance for loan losses, management is
required to make estimates and assumptions that affect the amount of the
allowance on the balance sheet and related provision on the statement of income.
These estimates are particularly susceptible to change. The allowance for loan
losses is maintained at a level considered by management to be adequate to
provide for potential loan losses. Management, in determining the adequacy of
the allowance for loan losses, takes into consideration examinations conducted
by bank supervisory authorities, results of internal review procedures, prior
loan loss experience, and an assessment of current and anticipated future
economic conditions on the loan portfolio. The allowance is established through
a provision for loan losses charged to expense. Loans are charged against the
allowance when management believes that the collectibility of the principal is
unlikely. All known losses have been charged off. Recoveries of amounts
previously charged off are credited to the allowance.
Other Real Estate -- Other real estate owned of $67,242 and $288,767 at
December 31, 1997 and 1996, respectively, (included in accrued interest and
other assets), represents property acquired through foreclosure or deeded to the
bank in lieu of foreclosure on loans on which the borrowers have defaulted as to
payment of principal and interest. Amounts are carried at the lower of the
bank's cost of acquisition or the asset's fair value less estimated costs to
sell. Reductions in the loan balance at the date of acquisition are charged to
the reserve for loan losses. Any subsequent write-downs to reflect current fair
value are charged to noninterest expense.
Goodwill -- Goodwill, which represents the excess of purchase price over
fair value of net assets acquired, is amortized on a straight-line basis over
the expected period to be benefited, 10 years. The Company assesses the
recoverability of this intangible asset by determining whether the amortization
of the goodwill balance over its remaining life can be recovered through
undiscounted future operating cash flows of the acquired assets. Accumulated
amortization at December 31, 1997 and 1996 was $448,000 and $224,000,
respectively.
Income Taxes -- The Company and the Bank file a consolidated federal
income tax return. Income taxes and benefits are allocated based upon each
entity's separate income or loss.
The Company utilizes the asset and liability method of accounting for
income taxes whereby deferred tax assets and liabilities are recognized for the
future tax consequences attributable to differences between the financial
statement carrying amounts of existing assets and liabilities and their
respective tax bases and operating loss and tax credit carryforwards. Deferred
tax assets and liabilities are measured using enacted tax rates expected to
apply to taxable income in the years in which those temporary differences are
expected to be recovered or settled. The effect on deferred tax assets and
liabilities of a change in tax rates is recognized in the consolidated
statements of income in the period that includes the enactment date.
Cash Equivalents -- For purposes of reporting cash flows, cash and cash
equivalents include cash on hand, amounts due from banks, and federal funds
sold. Generally, federal funds are sold for one-day periods.
Basic Net Income Per Share -- Basic net income per share is computed
using the weighted average number of shares outstanding during each year
presented. The weighted average outstanding common shares were 375,428 and
377,172 in 1997 and 1996, respectively.
Reclassification -- Certain 1996 amounts have been reclassified to
conform to 1997 presentation.
(2) Securities
Securities available-for-sale at December 31, 1996 consisted entirely of
U.S. government agencies with an amortized cost of $3,913,457 and fair value of
$3,976,455 with gross unrealized gains of $62,998. There were no
available-for-sale securities at December 31, 1997.
The carrying amounts of securities held-to-maturity and their approximate
fair values at December 31 were as follows:
<TABLE>
<CAPTION>
December 31, 1997
Gross Gross
Amortized Unrealized Unrealized Fair
Cost Gains Losses Value
- ----------------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C>
U.S. Treasury ........... $ 25,544,342 26,506 5,123 25,565,725
U.S. government agencies 73,768,273 128,941 28,625 73,868,589
State and municipal bonds 2,240,008 37,177 269 2,276,916
- ----------------------------------------------------------------------------------------------------
$101,552,623 192,624 34,017 101,711,230
====================================================================================================
</TABLE>
<TABLE>
<CAPTION>
December 31, 1996
Gross Gross
Amortized Unrealized Unrealized Fair
Cost Gains Losses Value
- ----------------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C>
U.S. Treasury ........... $ 28,442,430 50,471 34,821 28,458,080
U.S. government agencies 78,192,470 158,444 89,043 78,261,871
State and municipal bonds 3,519,526 50,587 9,475 3,560,638
- ----------------------------------------------------------------------------------------------------
$110,154,426 259,502 133,339 110,280,589
====================================================================================================
</TABLE>
The amortized cost and estimated fair value of held-to-maturity
securities at December 31, 1997, by contractual maturities, are shown below.
Expected maturities may differ from contractual maturities because borrowers may
have the right to call or prepay obligations with or without call or prepayment
penalties.
<TABLE>
<CAPTION>
Amortized Fair
Cost Value
- -----------------------------------------------------------------------
<S> <C> <C>
Due in one year or less ........ $ 61,617,930 61,661,003
Due from one year to five years 33,281,699 33,347,469
Due from five years to ten years 4,259,863 4,277,657
Due after ten years ............ 2,393,131 2,425,101
- -----------------------------------------------------------------------
$101,552,623 101,711,230
=======================================================================
</TABLE>
Securities having a carrying value of $28,214,064 and $38,291,935 at
December 31, 1997 and 1996, respectively, were either pledged to secure public
deposits or securities sold under agreements to repurchase.
(3) Bank Premises and Equipment
Bank premises and equipment are summarized as follows:
<TABLE>
<CAPTION>
Estimated December 31,
Useful Lives 1997 1996
- -----------------------------------------------------------------------------------
<S> <C> <C> <C>
Land ........................ -- $ 349,493 349,493
Banking house................ 7-33 years 2,456,971 2,456,971
Furniture, fixtures, and
equipment ................ 2-7 years 2,095,074 2,043,645
- -----------------------------------------------------------------------------------
Total cost ... 4,901,538 4,850,109
Less accumulated depreciation (3,876,009) (3,774,365)
- -----------------------------------------------------------------------------------
Net book value $ 1,025,529 1,075,744
===================================================================================
</TABLE>
(4) Loans and Allowance for Loan Losses
The Company's loans, classified according to type, were as follows:
<TABLE>
<CAPTION>
December 31,
1997 1996
- ---------------------------------------------------------------------------
<S> <C> <C>
Commercial, industrial and agriculture $15,732,735 17,736,708
Real estate:
Construction and land development 509,862 263,105
Residential properties ........... 26,726,754 24,766,724
Nonresidential properties ........ 17,290,313 12,628,503
Farmland ......................... 619,832 1,120,992
Installment loans to individuals ..... 17,812,171 17,997,624
Other ................................ 150,959 288,010
- ---------------------------------------------------------------------------
$78,842,626 74,801,666
===========================================================================
</TABLE>
Some of the directors and executive officers of the Company and the Bank
are customers of the bank, and some of the individuals are principals in
entities which are customers of the bank. As such customers, they have had
transactions in the ordinary course of business with the bank, including
borrowings, all of which, in the opinion of management, were on substantially
the same terms, including interest rates and collateral, as those prevailing at
the time for comparable transactions with other persons and did not involve more
than a normal risk of collectibility or present any other unfavorable features
to the bank. As of December 31, 1997 and 1996, the aggregate indebtedness of
those individuals and their interests as a group to the bank was $4,327,675 and
$4,655,571, respectively. During 1997, new loans to such related parties
amounted to $2,760,267 and repayments amounted to $3,088,163.
Changes in the allowance for loan losses are summarized as follows:
<TABLE>
<CAPTION>
1997 1996
- --------------------------------------------------------------------------------
<S> <C> <C>
Balance, January 1 ........................ $ 2,025,248 1,360,548
Increase from bank acquisition ............ -- 357,685
Provision charged to operating expense .... 30,296 8,378
- --------------------------------------------------------------------------------
2,055,544 1,726,611
- --------------------------------------------------------------------------------
Loans charged off ......................... (288,077) (240,089)
Recoveries on loans ....................... 212,745 538,726
- --------------------------------------------------------------------------------
Net loans recovered (charged off) (75,332) 298,637
- --------------------------------------------------------------------------------
Balance, December 31 ...................... $ 1,980,212 2,025,248
================================================================================
</TABLE>
At December 31, 1997 and 1996, the banks had discontinued the accrual of
interest on loans aggregating $166,000 and $364,000, respectively. Net interest
income would have been higher by approximately $17,000 in 1997 and $19,000 in
1996 had interest been accrued at contractual rates on these nonperforming
loans. The total amount of the Company's impaired loans is not material.
(5) Income Taxes
Federal income tax expense (benefit) applicable to income for the years
1997 and 1996 was as follows:
<TABLE>
<CAPTION>
1997 1996
---- ----
<S> <C> <C>
Current ....................................... $ 2,155,137 1,116,000
Deferred (exclusive of items below) ........... (60,420) (20,983)
Change in beginning of year valuation allowance (171,137) (150,253)
Net operating loss carryforward utilized ...... 21,420 529,236
- -----------------------------------------------------------------------------------
$ 1,945,000 1,474,000
===================================================================================
</TABLE>
A reconciliation of the expected federal statutory tax rate to the
effective tax rate applicable to pre-tax income follows:
<TABLE>
<CAPTION>
1997 1996
<S> <C> <C>
Federal statutory tax rate .............................. 34.0% 34.0
Change in the beginning of the year balance of the
valuation allowance for deferred tax assets allocated
to income tax expense ............................... (3.0) (2.7)
Tax-exempt income ....................................... (.9) (1.5)
Goodwill amortization ................................... 1.3 1.6
Other, net .............................................. 2.3 (.1)
- -------------------------------------------------------------------------------------
Effective tax rate ......................... 33.7% 31.3
=====================================================================================
</TABLE>
The tax effects of temporary differences that give rise to significant
portions of the deferred tax assets and deferred tax liabilities at December 31,
1997 and 1996 are presented below:
<TABLE>
<CAPTION>
1997 1996
- ---------------------------------------------------------------------------------------------------
<S> <C> <C>
Deferred tax assets:
Net operating loss carryforwards of Company ............ $ -- 21,420
FDIC Discount .......................................... 32,400 33,500
Depreciation of fixed assets ........................... 157,700 135,300
- ---------------------------------------------------------------------------------------------------
Total gross deferred tax assets ............... 190,100 190,220
Less valuation allowance ...................... -- (171,137)
- ---------------------------------------------------------------------------------------------------
Net deferred tax assets ....................... 190,100 19,083
- ---------------------------------------------------------------------------------------------------
Deferred tax liabilities:
Allowance for loan losses .............................. (300,500) (301,000)
Discount accretion on securities ....................... (57,600) (101,400)
Net unrealized gain on available for sale securities ... -- (21,420)
Other .................................................. (31,182) (26,001)
- ---------------------------------------------------------------------------------------------------
Total gross deferred tax liabilities .......... (389,282) (449,821)
- ---------------------------------------------------------------------------------------------------
Net deferred tax liability (included in accrued
interest, taxes, and expenses) ............ $(199,182) (430,738)
===================================================================================================
</TABLE>
The net change in the total valuation allowance for deferred tax assets
for 1997 and 1996 was a decrease of $171,137 and $150,253, respectively. In
assessing the realizability of deferred tax assets, management considers whether
it is more likely than not that some portion or all of the deferred tax assets
will not be realized. The ultimate realization of deferred tax assets is
dependent upon the generation of future taxable income during the periods in
which those temporary differences become deductible. Management considers the
scheduled reversal of deferred tax liabilities, projected future taxable income,
and tax planning strategies in making this assessment.
Income taxes receivable of approximately $24,000 and payable of
approximately $192,000 are included in the accompanying balance sheets in
accrued interest and other assets and accrued interest, taxes and expenses as of
December 31, 1997 and 1996, respectively.
(6) Deposits
Included in time deposits at December 31, 1997 and 1996, respectively,
are approximately $23,697,000 and $26,844,000 of certificates of deposit and IRA
deposits in denominations of $100,000 or more. Interest expense related to time
deposits of $100,000 or more was $1,331,000 in 1997 and $1,351,000 in 1996.
At December 31, 1997, the scheduled maturities of time deposits are as
follows:
<TABLE>
<CAPTION>
<S> <C>
1998 $87,101,013
1999 7,986,070
2000 1,612,357
2001 411,974
- ---------------------------
$97,111,414
</TABLE>
Included in deposits at December 31, 1997 and 1996, respectively are
approximately $2,473,000 and $1,570,000 in deposits of related parties.
(7) Securities Sold Under Agreement to Repurchase
Securities sold under agreements to repurchase were $4,085,167 and
$3,830,168 at December 31, 1997 and 1996, respectively. The securities
underlying the agreements were under the control of the Company as they were
held in the Company's name at another financial institution. Information
concerning securities sold under agreements to repurchase is summarized as
follows:
<TABLE>
<CAPTION>
1997 1996
- --------------------------------------------------------------------------------
<S> <C> <C>
Average balance during the year ......... $3,886,888 3,883,318
Maximum month-end balance during the year $4,280,167 4,565,269
</TABLE>
(8) Stock Transactions
In January 1997, the Company declared a 25% common stock split effected
as a stock dividend. All share and per share amounts have been restated to
retroactively reflect the stock split.
(9) Employee Benefit Plans
The Company has a defined contribution benefit plan covering
substantially all employees. Contributions are made to the plan based on a
percentage of participants' compensation (not to exceed 15%) to be determined by
the board of directors. The contributions in 1997 and 1996 amounted to $102,311
and $101,723, respectively.
(10) Regulatory Matters
The prompt corrective actions of The Federal Deposit Insurance
Corporation Improvement Act of 1991 (FDICIA) place restrictions on any insured
depository institution that does not meet certain requirements, including
minimum capital ratios. The restrictions are based on an institution's FDICIA
defined capital category and become increasingly more severe as an institution's
capital category declines. In addition to the prompt corrective action
requirements, FDICIA includes significant changes to the legal and regulatory
environment for insured depository institutions, including reductions in
insurance coverage for certain kinds of deposits, increased supervision by the
federal regulatory agencies, increased reporting requirements for insured
institutions, and new regulations concerning internal controls, accounting, and
operations.
The prompt corrective action regulations define specific capital
categories based on an institution's capital ratios. The capital categories, in
declining order, are "well capitalized," "adequately capitalized,"
"undercapitalized," "significantly undercapitalized," and "critically
undercapitalized." To be considered "well capitalized," an institution is
required to have at least a 5% leverage ratio, a 6% Tier I risk-based capital
ratio, and a 10% total risk-based capital ratio. However, the regulatory
agencies may impose higher minimum standards on individual institutions or may
downgrade an institution from one category because of safety and soundness
concerns.
At December 31, 1997, the Bank's leverage ratio was 10.26%, Tier I
risk-based ratio was 24.79%, and total risk-based ratio was 26.04%.
(11) Fair Value of Financial Instruments
The following table presents the carrying amounts and estimated fair
values of the Company's financial instruments at December 31, 1997 and 1996.
<TABLE>
<CAPTION>
December 31, 1997 December 31, 1996
- ------------------------------------------------------------------------------------------------------------
Carrying Fair Carrying Fair
Amount Value Amount Value
- ------------------------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C>
Financial assets:
Cash and due from banks
and federal funds sold .... $ 44,908,899 44,908,899 36,035,405 36,035,405
Securities available-for-sale -- -- 3,976,455 3,976,455
Securities held to maturity . 101,552,623 101,711,230 110,154,426
110,280,589
Loans ....................... 78,842,626 79,040,000 74,801,666 74,823,000
Accrued interest receivable . 2,204,654 2,204,654 2,319,636 2,319,636
Financial liabilities:
Deposits .................... 192,784,110 193,160,863 195,716,195 196,080,857
Securities sold under
agreements to repurchase .. 4,085,167 4,085,167 3,830,168 3,830,168
Accrued interest payable .... 983,127 983,127 1,002,402 1,002,402
Other liabilities ........... 32,644 32,644 266,596 266,596
</TABLE>
The following methods and assumptions were used to estimate the fair
value of each class of financial instruments:
Securities Held to Maturity and Available for Sale -- The fair value of
securities held to maturity and available for sale, except certain state and
municipal securities, is estimated based on bid prices published in financial
newspapers or bid quotations received from securities dealers. The fair value of
certain state and municipal securities is not readily available through market
sources other than dealer quotations, so fair value estimates are based on
quoted market prices of similar instruments, adjusted for differences between
the quoted instruments and the instruments being valued.
Loans -- Fair values are estimated for portfolio of loans that have
similar financial characteristics. Loans are segregated by type and maturity for
purposes of measurement. Each loan category is further segmented into fixed and
adjustable rate interest terms and by performing and nonperforming categories.
The fair value of performing loans is calculated by discounting scheduled
cash flows through the estimated maturity using estimated market discount rates
that reflect the credit and interest rate risk inherent in the loan. The
estimate of maturity is based on the Company's historical experience with
repayments for each loan classification, modified, as required, by an estimate
of the effect of current economic and lending conditions. For purposes of
estimating fair value, loans with a remaining maturity of three months or less
and adjustable rate loans are assumed to be carried at approximate fair value
due to repricing at current market rates.
Fair value for significant nonperforming loans is based on recent
external appraisals. If appraisals are not available, estimated cash flows are
discounted using a rate commensurate with the risk associated with the estimated
cash flows. Assumptions regarding credit risk, cash flows, and discount rates
are judgmentally determined using available market information and specific
borrower information.
Deposits -- The fair value of deposits with no stated maturity, such as
noninterest-bearing demand deposits, savings, and interest-bearing transaction
accounts is equal to the amount payable on demand. The fair value of
certificates of deposit is based on the discounted value of contractual cash
flows. The discount rate is estimated using the rates currently offered for
deposits of similar remaining maturities.
Other Categories of Financial Instruments -- The carrying amount of cash
and due from banks, federal funds sold, accrued interest receivable and payable,
securities sold under agreements to repurchase, and other liabilities
approximate fair value because of the short maturity of these instruments. The
fair value of off-balance sheet instruments such as commitments to extend credit
and standby letters of credit are not material.
Limitations -- Fair value estimates are made at a specific point in time,
based on relevant market information and information about the financial
instrument. These estimates do not reflect any premium or discount that could
result from offering for sale at one time the Company's entire holdings of a
particular financial instrument. Because no market exists for a significant
portion of the Company's financial instruments, fair value estimates are based
on judgments regarding future expected loss experience, current economic
conditions, risk characteristics of various financial instruments, and other
factors. These estimates are subjective in nature and involve uncertainties and
matters of significant judgment and therefore cannot be determined with
precision. Changes in assumptions could significantly affect the estimates.
Fair value estimates are based on existing on- and off-balance sheet
financial instruments without attempting to estimate the value of anticipated
future business and the value of assets and liabilities that are not considered
financial instruments.
(12) Financial Instruments With Off-Balance Sheet Risk
The Company is a party to financial instruments with off-balance sheet
risk in the normal course of business to meet the financing needs of its
customers and to reduce its own exposure to fluctuations in interest rates.
These financial instruments include commitments to extend credit and standby
letters of credit. Those instruments involve, to varying degrees, elements of
credit and interest rate risk in excess of the amount recognized in the balance
sheet. The contract amounts of those instruments reflect the extent of
involvement the Company has in particular classes of financial instruments.
The Company's exposure to credit loss in the event of nonperformance by
the other party to the financial instrument for commitments to extend credit and
standby letters of credit is represented by the contractual amount of those
instruments. The Company uses the same credit policies in making commitments and
conditional obligations as it does for on-balance sheet instruments. A summary
of the Company's commitments and contingencies at December 31, 1997, is as
follows:
<TABLE>
<CAPTION>
Contract
Amount
- -------------------------------------------------------------------------------------
<S> <C>
Financial instruments whose contract amounts represent credit risk:
Commitments to extend credit ................................. $3,219,154
Standby letters of credit .................................... 522,360
</TABLE>
Commitments to extend credit are agreements to lend to a customer as long
as there is no violation of any condition established in the contract.
Commitments generally have fixed expiration dates or other termination clauses
and may require payment of a fee. The Company evaluates each customer's
creditworthiness on a case-by-case basis. The amount of collateral obtained if
deemed necessary by the Company upon extension of credit is based on
management's credit evaluation of the counterparty. Collateral held varies but
may include accounts receivable, inventory, property, plant, and equipment and
income-producing commercial properties.
Standby letters of credit are conditional commitments issued by the
Company to guarantee the performance of a customer to a third party. Those
guarantees are primarily issued to support public and private borrowing
arrangements. Most guarantees expire in 1998. The credit risk involved in
issuing letters of credit is essentially the same as that involved in extending
loans to customers.
(13) Concentration of Credit Risk
The Company grants real estate, commercial, and installment loans to
customers primarily in northwest Louisiana. Although the bank has a diversified
loan portfolio, a substantial portion (approximately 57% of its gross loans),
although not necessarily originated for the purposes of real estate acquisition,
are secured by real estate, and their ability to fully collect those loans could
depend upon the real estate market in this region. The Company typically
requires collateral sufficient in value to cover the principal amount of the
loan. Such collateral is evidenced by mortgages on property held and readily
accessible to the Company.
(14) Acquisition
On January 19, 1996, the Company acquired substantially all of the assets
and assumed substantially all of the liabilities of First State Bank and Trust,
Plain Dealing, Louisiana (First State). In addition to acquiring the assets and
assuming the liabilities, the Company paid approximately $5,082,000 in cash,
which was net of approximately $3,078,000 in cash held by First State at the
time of acquisition. At January 19, 1996, First State had total assets of
approximately $43,000,000 and total deposits of approximately $36,000,000. The
purchase method of accounting was used to record the acquisition and the premium
paid of approximately $2,240,000 is being amortized over ten years on a
straight-line basis. Operations of First State subsequent to the effective date
of acquisition are included in these consolidated financial statements.
Other non-cash effects related to the acquisition of First State include:
investments ($22,614,000), loans ($15,972,000), bank premises and equipment
($204,000), accrued interest receivable and other assets ($448,000) and accrued
interest payable and other liabilities ($597,000).
<PAGE>
MANAGEMENT'S DISCUSSION AND ANALYSIS OF
FINANCIAL CONDITION AND RESULTS OF OPERATIONS OF
PEOPLES HOLDING CORPORATION AND SUBSIDIARIES
DECEMBER 31,1997 AND DECEMBER 31,1996
The following discussion provides certain information concerning the financial
condition and results of operations of Peoples Holding Corporation (PHC) and
Subsidiaries (the "Banks"); Peoples Bank & Trust Company (Peoples), Planters
Bank and Trust Company of Claiborne Parish (Planters), and First State Bank and
Trust Company, Plain Dealing, Louisiana (First State) (all of the foregoing
herein referred to as the "Company"). The financial position and results of
operations of the Company are attributable to operations of the Banks located in
Webster, Claiborne, and north Bossier Parishes in Northwest Louisiana. In
November 1997, the PHC merged all of the Banks into one bank under the name of
Peoples Bank & Trust Company (the "Bank"). Management's discussion should be
read in conjunction with the Company's financial statements and accompanying
notes presented elsewhere in this Proxy Statement-Prospectus.
OVERVIEW
The Company reported net income for 1997 of $3,810,703, an increase of 18% from
net income of $3,228,264 for 1996. Returns on average assets and average equity
for 1997 were 1.74% and 14.42% compared with 1.52% and 13.65% for 1996. The
increase in net income for 1997 is due to improved net interest income and an
increase in non-interest income coupled with substantially unchanged
non-interest expense. The increase in net interest income for 1997 was primarily
due to an increase in higher yielding earning assets (loans). The increase in
non-interest income was primarily due to increased revenues from customer
service charges.
The Company's total assets at December 31,1997 were $228,004,667, substantially
unchanged from $228,234,551 at December 31,1996. Loans increased $4,040,960 from
December 31,1996 to December 31,1997 due primarily to commercial and consumer
loans secured by real estate. Total liabilities (including deposits) at
December 31, 1997 of $198,391,919were down 1.6% when compared with December 31,
1996.
RESULTS OF OPERATIONS
Net Interest Income. Net interest income for 1997 was $8,923,963, which was a
$793,056 or 9.75% increase from 1996. This increase was primarily due to an
increase in earning assets. The following tables present certain information
relating to net interest income and the changes therein. Table 1 presents
certain information concerning the average daily balances , interest income,
interest expense, and average rates on the Company's interest-earning assets and
interest-bearing liabilities for the years for 1996 and 1997. Table 2 presents
an analysis of the changes in net interest income by major interest-earning
assets and interest-bearing liabilities attributable to changes in average
volumes and average rates.
<PAGE>
<TABLE>
<CAPTION>
Table 1
AVERAGE BALANCES, INTEREST INCOME/EXPENSE, RATES
COMPARISON OF 1997 AND 1996
(Dollars in Thousands)
1997 1996
- --------------------------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C> <C> <C>
Average Average
Interest Rates Interest Rates
Average Income/ Earned/ Average Income / Earned/
Balance Expense Paid Balance Expense Paid
Earning assets:
Loans (before allowance
for loan losses)........ $ 77,096 $7,653 9.93% $ 67,600 $6,800 10.06%
Investment securities..... 116,322 6,876 5.91% 125,213 7,329 5.85%
Federal funds sold and
securities purchased
under agreement to
resell.................. 26,176 1,405 5.37% 22,291 1,190 5.34%
------ ----- ------ -----
Total earning assets......... $219,594 $15,934 7.26% $215,110 $15,319 7.12%
-------- --------
Interest-bearing liabilities:
Interest-bearing deposits,
Federal funds purchased,
and securities sold under
agreement to repurchase... $172,082 $ 7,010 4.07% $171,143 $ 7,188 4.20%
-------- -------- -------- -------
Net interest income.......... $ 8,924 $ 8,131
-------- -------
Net yield on earning assets.. 4.06% 3.78%
----- -----
</TABLE>
<PAGE>
Table 2
CHANGES IN NET INTEREST INCOME
1997 Compared with 1996
(Dollars in Thousands)
Increase (Decrease) Due to Change in:
Volume Rate* Total
Income earned on:
Loans $955 $(102) $853
Investment Securities (524) 71 (453)
Short term investments 208 8 216
--- - ---
Total 639 (23) 616
--- ---- ---
Interest paid on:
Deposits, Federal funds purchased,
and securities sold under agreement to
repurchase (39) 216 177
---- --- ---
Change in net interest income 600 193 793
________________________________ --- --- ---
*change not solely due to volume or rate changes are allocated to rate.
<PAGE>
Provision for Loan Losses. The provision for loan losses is the amount that is
added to the allowance for loan losses , by a charge against earnings, in order
to maintain a balance in the allowance that is deemed by management to be
adequate to absorb the inherent risk of future loan losses in the loan
portfolio. The amount of the provision is dependent upon many factors,
including management's evaluation of historical loan loss experience in relation
to outstanding loans, the existing level of the allowance, reviews of loan
quality, loan growth, changes in the composition of the loan portfolio, general
economic factors, the financial condition of the borrowers, their ability to
repay the loan and the value and liquidity of collateral. The Company's 1997 and
1996 provisions for loan losses were $30,296 and $8,378 respectively. The
allowance for loan losses of $1,980,212 was 2.53% of net loans outstanding at
December 31,1997. The allowance for loan losses at December 31,1996 was
$2,025,248 or 2.72% of net loans outstanding.
Non-Interest Income. The Company's non-interest income for 1997 increased 12.53%
from 1996 due primarily to increased revenues from services charges to customers
as a result of increased customer account activity.
Non-Interest Expense. Total non-interest expense decreased 2.33% from 1996 to
1997 with decreases in personnel and occupancy costs.
Income Taxes. The Company's ratio of taxable income to total income before taxes
increased from 1996 to 1997, resulting in an increase in the effective tax rate
from 31.3% in 1996 to 33.7% in 1997. The federal statutory rate for both years
was 34%.
FINANCIAL CONDITION
Total Assets. At December 31,1997 total assets were $228,004,667. At December
31,1996 total assets were $228,234,551.
Investment Securities. The Company classifies its securities as either available
for sale or held to maturity at the time they are purchased. Securities which
the Company has the ability and intent to hold to maturity are classified as
held to maturity and are stated at cost adjusted for amortization of premiums
and accretion of discounts. All other securities are classified as available for
sale and are stated at fair value with net unrealized gains and losses reflected
as a separate component of stockholder's equity, net of estimated income tax
effects. Available for sale securities may be sold prior to maturity in response
to liquidity needs, market interest rate changes, or other factors. The Company
has no "trading" portfolio.
The following Tables 3 and 4 present the composition of investment securities by
amortized cost and fair value at December 31,1997 and December 31,1996 and the
amortized cost and fair value of investment securities at December 31,1997
by contractual maturities.
<PAGE>
<TABLE>
<CAPTION>
Table 3
INVESTMENT SECURITIES
December 31 1997 and 1996
(Dollars in Thousands)
1997 1996
-------------------- --------------------
Amortized Fair Amortized Fair
Cost Value Cost Value
<S> <C> <C> <C> <C>
Available for Sale:
U.S. government agencies $ - $ - $ 3,913 $ 3,976
----------------------- ------------------------
Held to Maturity:
U.S. Treasury $ 25,545 $ 25,565 $ 28,442 $ 28,458
U.S. government agencies 73,768 73,869 78,192 78,262
State and municipal bonds 2,240 2,277 3,520 3,561
----------------------- -----------------------
Total Held to Maturity $101,553 $101,711 $110,154 $110,281
----------------------- -----------------------
</TABLE>
Table 4
INVESTMENT SECURITIES
BY CONTRACTUAL MATURITIES*
December 31,1997
(Dollars in Thousands)
Amortized Fair
Cost Value
Due in one year or less $ 61,618 $ 61,661
Due after one year
through five years 33,282 33,347
Due after five years
through ten years 4,260 4,278
Due after ten years 2,393 2,425
------------------------
Total Investment Securities $101,553 $101,711
_______________________________ ------------------------
*Actual maturities will differ from contractual maturities because borrowers
have the right to call or prepay obligations with or without call or
prepayment penalties.
<PAGE>
Loans. The Company engages in commercial and industrial, real estate
(residential and non-residential), and consumer lending. Underwriting criteria
for each major loan category is outlined in detail in a formal written loan
policy that is approved by the board of directors. In general, each loan is
evaluated based on such things as the character and repayment capacity of the
borrower, the borrower's investment in a particular property (when applicable),
cash flow, the nature and value of collateral, general market conditions for the
borrower's business or project and prevailing economic trends. The Company's
loan policy is changed periodically as considered appropriate to address
regulatory changes and other changes considered necessary by management. Each
change is approved by the board of directors before it becomes a part of the
loan policy. The loan policy and underwriting criteria are regularly reviewed by
management and external examiners to determine compliance with banking
regulations and sound lending principles.
As of December 31, 1997, the Company had no major concentrations of its loan
portfolio to any one customer or industry classification. Loans increased
$4,040,960 or 5.4% from December 31,1996 to December 31,1997. This growth was
primarily in real estate loans. Table 5 presents the dollar amount and
percentage of total loans in each category at December 31, 1997 and 1996.
<TABLE>
<CAPTION>
Table 5
Loans by Category
December 31,1997 and 1996
(Dollars in Thousands)
1997 1996
----- ----
Amount % Amount %
------ - ------ -
<S> <C> <C> <C> <C>
Commercial, industrial and agriculture $15,733 19.95 $17,737 23.71
Real estate:
Construction and land development 510 .65 263 .35
Residential properties 26,727 33.90 24,767 33.11
Nonresidential properties 17,290 21.93 12,628 16.88
Farmland 620 .79 1,121 1.50
Installment loans to individuals 17,812 22.59 17,998 24.06
All other 151 .19 288 .39
------- ------ -------
Total $78,843 100.00 $74,802 100.00
------- ------ ------- ------
</TABLE>
<PAGE>
The maturity schedule of the Company's loan portfolio has an impact on it's
ability to meet liquidity demands. At December 31, 1997, approximately
$45,924,000 or 58.24% of the loan portfolio was scheduled to mature within one
year. Approximately $75,620,000 or 95.91% of the portfolio was scheduled to
mature in less than five years. Normally borrowers are expected to meet
contractual terms. In some cases, however, they are permitted to roll over
obligations after appropriate review of credit quality and evaluation of the
borrower's ability to repay. The information presented herein as to maturity of
the loan portfolio is based on contractual obligations and does not consider
anticipated rollovers. However, management does not believe such rollovers would
materially reflect the information presented herein.
Non-performing assets. Non-performing assets include non-performing loans and
foreclosed assets held for sale. Nonperforming loans include loans classified as
non-accrual or renegotiated to provide a reduction or deferral of interest or
principal and those past due 90 days or more on which interest is still being
accrued. It is the general policy of the company to place loans on non-accrual
status when, in the opinion of management, there exists sufficient uncertainty
as to the collectibility of the contractual interest or principal. Placing a
loan on non-accrual status causes an immediate charge against earnings for the
interest accrued but uncollected in the current fiscal year and a charge against
the loan loss reserve for accrued but uncollected interest attributable to prior
periods. Interest earnings are not recognized on such loans until the principal
is collected or until the loan is returned to performing status because it is
well secured and in the process of collection.
At December 31,1997 total non-performing assets were $458,000 or .58% of total
loans and foreclosed assets held for sale. Table 6 below shows the breakdown of
non performing assets at December 31, 1997.
Table 6
Non-performing Assets
December 31,1997
(Dollars in Thousands)
%
Total Loans and
Amount Foreclosed Assets
------ -----------------
Loans contractually 90 days or more past
due and still accruing $191 .24
Loans accounted for on a non-accrual basis 166 .23
Foreclosed assets 89 .11
---- ---
Total non-performing assets $458 .58
---- ---
Interest income that would have been recognized on non-accrual loans in 1997 and
1996 had such loans been on an accrual basis was not significant. Management is
not aware of any loans which have been classified for regulatory purposes and
excluded from the above table which represent or result from trends or
uncertainties that will materially impact the Company's future operating
results, liquidity, or capital, or represent material loan relationships about
which management is aware of any information which causes doubts as to the
ability of such borrowers to comply with their loan repayment terms.
Allowance for Loan Losses. The Company charges to operating expense an
amount (provision) that is considered necessary to maintain the allowance for
loan losses at a level that it considers to be adequate to offset all
anticipated loan losses. The adequacy of the allowance is determined by
management based on many factors, including the historical loss experience in
relation to outstanding loans, the current level of the allowance, loan quality
reviews, loan growth, changes in the composition of the loan portfolio, general
economic factors, the financial condition of the borrowers and their ability to
repay the loan and the value and liquidity of collateral. The amount of the
allowance is reviewed quarterly by management and the board of directors to
evaluate its adequacy and determine if additional provisions should be made.
Between such reviews, management generally assures that the level of the
allowance is maintained at no less than the amount last approved by the board of
directors.
The following table (Table 7) presents information relative to the allowance for
loan losses for the years ended December 31, 1997 and 1996.
<PAGE>
Table 7
Allowance for Loan Losses
Analysis and Selected Information
December 31, 1997 and 1996
(Dollars in Thousands)
1997 1996
---- ----
Average total loans $77,096 $67,600
------- -------
Beginning balance of allowance $2,025 $1,361
Increase from bank acquisition - 357
Loans charged off:
Real estate 8 16
Commercial and industrial - 3
Installment and other 280 221
--- ---
Total charged off 288 240
--- ---
Recoveries:
Real estate 131 307
Commercial and Industrial 6 30
Installment and other 76 202
-- ---
Total recoveries 213 539
--- ---
Net loans charged off (recovered) 75 (299)
Provision for loan losses 30 8
-------- --------
Ending balance of allowance $1,980 $2,025
------ ------
Ratio of net charge offs (recoveries)
to average loans outstanding .10% (.44%)
-------- --------
<PAGE>
The Company's allowance for loan losses at December 31,1997 was $1,980,212,
which, in management's opinion, is adequate to cover potential losses in its
current loan portfolio. However, no assurance can be given that in the future
economic conditions will not occur that might adversely impact the Company's
trade territory, borrowers or collateral values, or that other circumstances
will not result in increased losses in the portfolio.
Deposits and Other Significant Liabilities. While year-end deposits were
slightly down at December 31,1997, average total deposits increased from
$193,311,258 in 1996 to $194,856,268 in 1997. The Company has no "brokered"
deposits. The following table (Table 8) reflects average deposits and average
rates paid for 1997 and 1996.
Table 8
Average Deposits and Average Rates
December 31, 1997 and 1996
(Dollars in Thousands)
1997 1996
---- ----
Amount Rate Amount Rate
------ ---- ------ ----
Non-interest-bearing demand deposits $ 26,635 0.00% $ 25,977 0.00%
Savings and interest bearing
transaction accounts 67,023 2.76% 64,863 2.77%
Time deposits 101,198 4.94% 102,471 5.06%
--------- ----- --------- -----
Total average deposits $194,856 3.51% $193,311 3.61%
-------- ----- -------- -----
The Company also has liabilities in the form of securities sold under agreements
to repurchase. At December 31, 1997 such liabilities totaled $4,085,167.
Liquidity and Interest Rate Risk Management. The primary functions of asset and
liability management as it relates to a financial institution are to provide
sufficient liquidity to react to normal volatility in funding sources and to
insulate net interest margins from adverse effect that may be wrought by major
fluctuations in interest rates while maximizing net interest earnings. Liquidity
reflects the Company's ability to meet daily demands for funds from its
customers and to meet other financial commitments. Management monitors liquidity
requirements as warranted by interest rate and economic trends, changes in the
scheduled maturity and interest rate sensitivity of the investment and loan
portfolios, and changes in the maturity and perceived interest rate sensitivity
of deposit accounts. Management attempts to match (within acceptable risk
guidelines established by the board of directors) rate-sensitive assets and
rate-sensitive liabilities in order to minimize exposure from adverse
fluctuations in interest rates and maximize net interest earnings through
periods of changing interest rates.
<PAGE>
The Company's liquidity is considered by Management to be adequate to meet all
foreseen business needs.
Capital Resources. The Bank is subject to regulatory "risk-based" capital
guidelines. In the risk-based capital computation, all assets are weighted based
upon assigned risk factors, and certain off-balance sheet items are included,
such as loan commitments and standby letters of credit. Capital is separated
into two categories, Tier 1 and Tier 2, which are combined for Total Capital.
Tier 1 capital consists of common shareholder equity and perpetual preferred
stock, subject to certain limitations. Tier 2 capital consists of the reserve
for loan losses and subordinated debt, subject to certain limitations. In order
to be considered "well capitalized", the guidelines provide for a Total
Risk-Based Capital of at least 10%, a Tier 1 Risk-Based Capital ratio of at
least 6%, and a leverage ratio of at least 5%. At December 31,1997, the Bank's
Total Risk-Based Capital ratio was 26.04%, it's Tier 1 Risk-Based Capital ratio
was 24.79%, and it's leverage ratio was 10.26%. Regulatory agencies may increase
minimum capital standards or downgrade an institution's capital category because
of safety and soundness considerations. The Bank's capital ratios have been in
excess of the "well capitalized" minimums since the adoption of the "risk-based"
capital guidelines.
RELATIONSHIP WITH INDEPENDENT AUDITORS
KPMG Peat Marwick LLP, independent auditors, has continuously served as
the independent auditor for Peoples from 1982 through the present. A
representative of KPMG Peat Marwick LLP is expected to be present at the Special
Meeting. This representative will have an opportunity to make a statement if he
or she desires and will be available to respond to appropriate questions.
VALIDITY OF SHARES
Patricia C. Meringer, Corporate Counsel and Secretary of Hibernia has
passed upon the validity of the shares to be issued by Hibernia in the Merger.
As of the date of this Proxy Statement-Prospectus, Ms. Meringer beneficially
owned 22,830 shares of Hibernia Common Stock (including options to purchase
shares of Hibernia Common Stock that are currently exercisable.
EXPERTS
The audited the consolidated financial statements of Hibernia
Corporation incorporated by reference in Hibernia's Corporation's Annual Report
(Form 10-K) for the year ended December 31, 1997 have been audited by Ernst &
Young LLP, independent auditors. as set forth in their report thereon
incorporated by reference therein and incorporated by reference herein. Such
consolidated financial statements are incorporated herein by reference in
reliance upon Ernst & Young's report given upon the authority of such firm as
experts in accounting and auditing.
KPMG Peat Marwick LLP, independent certified public accountants, have
audited the consolidated financial statements of Peoples for the years ended
December 31, 1997 and 1996. Those financial statements are included in the Proxy
Statement of Peoples, which is referred to and made a part of this Prospectus
and Registration Statement, and have been included in reliance upon the report
of KPMG Peat Marwick LLP appearing elsewhere herein, and upon the authority of
said firm as experts in accounting and auditing.
<PAGE>
APPENDIX A
AGREEMENT AND PLAN OF MERGER
OF
PEOPLES HOLDING CORPORATION
WITH AND INTO
HIBERNIA CORPORATION
AGREEMENT AND PLAN OF MERGER dated as of February 10, 1998 (this
"Agreement"), adopted and made by and among Peoples Holding Corporation, Minden,
Louisiana, a Louisiana corporation("Peoples"), Peoples Bank and Trust Company,
Minden, Louisiana, a Louisiana state banking association (the "Bank") and
Hibernia Corporation, a Louisiana corporation("Hibernia")and Hibernia National
Bank, a national banking association.
Peoples is a corporation duly organized and existing under the laws of
the State of Louisiana; has its registered office at 618 Main Street, Minden, LA
71055-3327; and is a bank holding company within the meaning of the Bank Holding
Company Act of 1956, as amended (the "Bank Holding Company Act"). The presently
authorized capital stock of Peoples consists solely of 420,000 shares of common
stock of $10.00 par value ("Peoples Common Stock"). As of December 31, 1997,
383,243 shares of Peoples Common Stock had been issued, 374,986 shares of
Peoples Common Stock were outstanding, and 8,257 shares of Peoples Common Stock
were held in Peoples' treasury. All outstanding shares of Peoples Common Stock
have been duly issued and are validly outstanding, fully paid and nonassessable.
The foregoing are the only voting securities of Peoples authorized, issued, or
outstanding, and there are no existing options, warrants, calls, or commitments
of any kind obligating Peoples to issue any share of its capital stock or any
other security of which it is or will be the issuer. None of the shares of
Peoples' capital stock has been issued in violation of preemptive rights of
shareholders. Peoples owns 100 percent of the outstanding voting shares of the
Bank, which is a Louisiana banking corporation organized and existing under the
laws of the State of Louisiana. All of the issued and outstanding shares of
capital stock of the Bank is owned by Peoples. The Bank is (i) an "insured bank"
as defined in the Federal Deposit Insurance Act and applicable regulations
thereunder, and (ii) has been duly organized and is validly existing as a
banking corporation under the laws of the State of Louisiana, and has full
authority to conduct its business as and where currently conducted.
Hibernia is a corporation duly organized and existing under the laws of
the State of Louisiana; has its registered office at 313 Carondelet Street, New
Orleans, Louisiana 70130; and is a bank holding company within the meaning of
the Bank Holding Company Act. Hibernia owns all of the issued and outstanding
shares of capital stock of Hibernia National Bank ("HNB") and Hibernia National
Bank of Texas ("HNBT"). The presently authorized capital stock of Hibernia is
300,000,000 shares, consisting of 100,000,000 shares of preferred stock, no par
value, and 200,000,000 shares of Class A voting common stock, no par value (the
Class A voting common stock being referred to hereinafter as "Hibernia Common
Stock"). As of December 31, 1997, 2,000,000 shares of Hibernia's preferred stock
were issued and outstanding, 133,000,857 shares of Hibernia Common Stock were
outstanding, and no shares of Hibernia Common Stock were held in Hibernia's
treasury. All outstanding shares of Hibernia Common Stock have been duly issued
and are validly outstanding, fully paid and nonassessable. The foregoing
Hibernia Common Stock and (in limited circumstances, the Hibernia Preferred
Stock) are the only voting securities of Hibernia authorized, issued or
outstanding and there are no existing options, warrants, calls or commitments of
any kind obligating Hibernia to issue any share of its capital stock or any
other security of which it is or will be the issuer, except that Hibernia has
authorized or reserved 1,968,750 shares of Hibernia Common Stock for issuance
under its 1987 Stock Option Plan, pursuant to which options covering 1,383,482
shares of Hibernia Common Stock were outstanding as of the date hereof;
7,880,703 (as adjusted) shares of Hibernia Common Stock for issuance under its
1992 Long-Term Incentive Plan, pursuant to which options covering 5,745,660
shares of Hibernia Common Stock were outstanding as of the date hereof;
1,000,000 shares of Hibernia Common Stock for issuance under its 1993 Director
Stock Option Plan, pursuant to which options covering 290,000 shares of Hibernia
Common Stock are outstanding on the date hereof; 24 shares of Hibernia Common
Stock are available for issuance pursuant to Hibernia's Dividend Reinvestment
and Stock Purchase Plan; and warrants covering 213,176 shares of Hibernia Common
Stock are outstanding. None of the shares of Hibernia's capital stock has been
issued in violation of preemptive rights of shareholders. Mergers with Northwest
Bancshares of Louisiana, Inc. and ArgentBank and a pending merger with
Firstshares of Texas, are expected to result in the issuance of no more than an
additional 18.6 million shares of Hibernia Common Stock.
HNB is a national banking association organized and existing under the
laws of the United States of America having its principal registered office at
313 Carondelet Street, New Orleans, Louisiana 70130. All of the issued and
outstanding shares of capital stock of HNB are owned by Hibernia. HNB is(i) an
"insured bank" as defined in the Federal Deposit Insurance Act and applicable
regulations thereunder, and (ii) has been duly organized and are validly
existing as national banks under the laws of the United States, and has full
authority to conduct its business as and where currently conducted.
The Boards of Directors of Peoples, the Bank, Hibernia and HNB have duly
approved this Agreement and have authorized the execution hereof by Peoples' and
the Bank's President and Chief Executive Officer and Hibernia's and HNB's
President and Chief Executive Officer, respectively. Peoples has directed that
this Agreement be submitted to a vote of its shareholders in accordance with
Part XI of the Louisiana Business Corporation Law ("LBCL") and the terms of this
Agreement.
In consideration of their mutual promises and obligations, the parties
hereto adopt and make this Agreement for the merger of Peoples with and into
Hibernia and the merger of the Bank with and into HNB and prescribe the terms
and conditions of such mergers and the mode of carrying them into effect, which
shall be as follows:
1. The Mergers.
1.1 Company Merger. On the Effective Date (as defined in Section 14
hereof), Peoples shall be merged with and into Hibernia under the Articles of
Incorporation of Hibernia, pursuant to the provisions of, and with the effect
provided in, Part XI of the LBCL (the "Company Merger") and the Merger Agreement
in substantially the form of Exhibit 1 hereto (the "Company Merger Agreement").
1.2 Bank Merger. On the Effective Date (as defined in Section 14
hereof), the Bank shall be merged with and into HNB under the Articles of
Association of HNB, pursuant to the provisions of, and with the effect provided
in, 12 U.S.C. 215a (the "Bank Merger") and the Merger Agreement in substantially
the form of Exhibit 2 hereto (the "Bank Merger Agreement"). The Bank Merger and
the Company Merger are collectively referred to herein as the "Mergers", and the
Company Merger Agreement and the Bank Merger Agreement are collectively referred
to herein as the "Merger Agreements."
2. Hibernia Capital Stock. The shares of the capital stock of Hibernia
issued and outstanding immediately prior to the Effective Date shall, on the
Effective Date, continue to be issued and outstanding.
3. Peoples Common Stock.
3.1. Conversion. On the Effective Date and subject to the
provisions of Section 3.7 hereof,
(a) each share of Peoples Common Stock issued and outstanding
immediately prior to the Effective Date, other than (i) shares as to which
dissenters' rights have been perfected and not withdrawn or otherwise forfeited
under Section 12: 131 of the LBCL and (ii) shares owned beneficially by Hibernia
or its subsidiaries, shall, by virtue of the Company Merger automatically and
without any action on the part of the holder thereof, become and be converted
into the number of shares of Hibernia Common Stock that equals the Exchange Rate
set forth in Section 3.8 hereof;
(b) holders of certificates which represent shares of Peoples
Common Stock outstanding immediately prior to the Effective Date (hereinafter
called "Old Certificates") shall cease to be, and shall have no rights as,
shareholders of Peoples;
(c) each share of Peoples Common Stock held in the treasury of
Peoples or owned beneficially by Hibernia or any of its subsidiaries shall be
canceled;
(d) Old Certificates shall be exchangeable by the holders
thereof in the manner provided in the transmittal materials described below for
new certificates for the number of whole shares of Hibernia Common Stock to
which such holders shall be entitled in accordance with the Exchange Rate set
forth in Section 3.8 and a check representing cash paid in lieu of fractional
shares as provided in Section 3.2 hereof; and
(e) each share of Bank Common Stock shall be canceled upon the
effective time of the Bank Merger.
3.2. Fractional Shares. Each holder of Old Certificates who
would otherwise have been entitled to receive a fraction of a share of Hibernia
Common Stock (after taking into account all shares of Peoples Common Stock
represented by the Old Certificates then delivered by such holder) shall
receive, in lieu thereof, cash (without interest) in an amount equal to such
fractional part of a share multiplied by the Average Market Price of Hibernia
Common Stock as defined in Section 3.8(c), and no such holder shall be entitled
to dividends, voting rights or any other right of shareholders in respect of any
fractional share.
3.3. Transmittal Materials. As promptly as practicable after the
Effective Date, Hibernia shall send or cause to be sent to each former
shareholder of record of Peoples transmittal materials for use in exchanging Old
Certificates for certificates representing Hibernia Common Stock and a check
representing cash paid in lieu of fractional shares, if any. The letter of
transmittal will contain instructions with respect to the surrender of Old
Certificates and the distribution of certificates representing Hibernia Common
Stock. If any certificate for shares of Hibernia Common Stock is to be issued in
a name other than that in which an Old Certificate surrendered for exchange is
issued, the Old Certificate so surrendered shall be properly endorsed and
otherwise in proper form for transfer and the person requesting such exchange
shall affix any requisite stock transfer tax stamps to the Old Certificate
surrendered or provide funds for their purchase or establish to the satisfaction
of the exchange agent to be appointed by Hibernia in connection with such
exchange (the "Exchange Agent") that such taxes are not payable.
3.4. Rights as Shareholders. Former shareholders of Peoples will
be able to vote after the Effective Date at any meeting of Hibernia shareholders
or pursuant to any written consent procedure the number of whole shares of
Hibernia Common Stock into which their shares of Peoples Common Stock are
converted, regardless of whether they have exchanged their Old Certificates.
Whenever a dividend is declared by Hibernia on the Hibernia Common Stock after
the Effective Date, the declaration shall include dividends on all shares
issuable hereunder, but no shareholder will be entitled to receive his
distribution of such dividends until physical exchange of his Old Certificates
shall have been effected. Upon physical exchange of his Old Certificates, any
such person shall be entitled to receive from Hibernia an amount equal to all
dividends (without interest thereon and less the amount of taxes, if any, that
may have been withheld, imposed or paid thereon) declared, and for which the
payment has occurred, on the shares represented thereby.
3.5. Cancellation of Old Certificates. On and after the
Effective Date there shall be no transfers on the stock transfer books of
Peoples or Hibernia of the shares of Peoples Common Stock which were issued and
outstanding immediately prior to the Effective Date. If, after the Effective
Date, Old Certificates are properly presented to Hibernia, they shall be
canceled and exchanged for certificates representing shares of Hibernia Common
Stock and a check representing cash paid in lieu of fractional shares as herein
provided. Any other provision of this Agreement notwithstanding, neither the
Exchange Agent nor any party hereto shall be liable to a holder of Peoples
Common Stock for any amount paid or property delivered in good faith to a public
official pursuant to any applicable abandoned property, escheat, or similar law.
3.6. Property Transfers. From time to time, as and when
requested by Hibernia and HNB and to the extent permitted by Louisiana law, the
officers and directors of Peoples and the Bank last in office shall execute and
deliver such deeds and other instruments and shall take or cause to be taken
such further or other actions as shall be necessary in order to vest or perfect
in or to confirm of record or otherwise to Hibernia or HNB title to, and
possession of, all the property, interests, assets, rights, privileges,
immunities, powers, franchises, and authorities of Peoples and the Bank, and
otherwise to carry out the purposes of this Agreement.
3.7. Dissenters' Shares. Shares of Peoples Common Stock held by
any holder having rights of a dissenting shareholder as provided in Part XIII of
the LBCL, who shall have properly objected to the Company Merger and who shall
have properly demanded payment on his stock in accordance with and subject to
the provisions of Section 12:131 of the LBCL, shall not be converted as provided
in Section 3.1 hereof until such time as such holder shall have failed to
perfect, or shall have effectively lost, his right to appraisal of and payment
for his shares of Peoples Common Stock, at which time such shares shall be
converted as provided in Section 3.1 hereof.
3.8. Exchange Rate.
(a) Except as provided for in paragraph (b) of this Section 3.8, the
Exchange Rate shall be calculated as follows: ($69,375,000 375,000) the Average
Market Price of Hibernia Common Stock, as defined in paragraph (c) of this
Section 3.8.
(b) Notwithstanding anything in paragraph (a) of this Section 3.8 to the
contrary, in no event shall the Exchange Rate be greater than 10.5 shares of
Hibernia Common Stock for each share of Peoples Common Stock, and in no event
shall the Exchange Rate be less than 9.5 shares of Hibernia Common Stock for
each share of Peoples Common Stock.
(c) For purposes of this Agreement, the Average Market Price of Hibernia
Common Stock on the Closing Date shall be the average of the closing price of
one share of Hibernia Common Stock for the ten business days preceding the last
trading day immediately prior to the Closing Date as reported in The Wall Street
Journal.
4. Articles of Incorporation; Bylaws. The Articles of Incorporation and
Bylaws of Hibernia and the Articles of Association and Bylaws of HNB in force
immediately prior to the Effective Date shall on and after the Effective Date
continue to be the Articles of Incorporation and Bylaws of Hibernia and the
Articles of Association and Bylaws of HNB, respectively, unless altered, amended
or repealed in accordance with applicable law.
5. Employees. Hibernia shall cause to be provided as soon as
practicable after the Effective Date for the employees of Peoples and the Bank
immediately prior to the Effective Date the employee benefits then made
available to employees of Hibernia and its subsidiaries, subject to the terms
and conditions under which those employee benefits are made available to such
employees; provided, however, that for purposes of determining the eligibility
of an employee of Peoples or the Bank (or both) to receive, and the amount and
type of benefits to which such employee shall be entitled, under Hibernia's
benefits plans after the Effective Date, any period of employment of such
employee with Peoples or the Bank shall be deemed equivalent to having been
employed for that same period by Hibernia and/or its subsidiaries and provided
further, however, that if Hibernia determines in good faith that it cannot merge
any benefit plan of Peoples into a comparable benefit plan of Hibernia or HNB
without creating significant potential liability or additional expense for
Hibernia's or HNB's plan, then Hibernia shall be entitled to freeze the existing
benefit plan of Peoples and prohibit participation by former employees of
Peoples in Hibernia's plan for the period of time required by applicable law to
ensure that Hibernia's and HNB's benefit plans are not deemed to be successor
plans of the Peoples plan in question.
6. Negative Covenants. From the date hereof until the Effective Date,
or until the termination of this Agreement, Peoples covenants and agrees that it
will not do, or agree to commit to do, and Peoples will cause the Bank not to do
and not to agree or commit to do, without the prior written consent of Hibernia,
any of the following:
(a) in the case of Peoples (and not the Banks), make, declare,
set aside or pay any dividend or declare or make any distribution on, or
directly or indirectly combine, redeem, purchase or otherwise acquire, any
shares of Peoples Common Stock (other than in a fiduciary capacity); provided,
however, that Peoples may declare and pay, to the extent lawfully permitted to
do so, its normal and customary quarterly dividends of $.50 per outstanding
share of Peoples Common Stock from the date hereof until the Effective Date.
(b) authorize the creation or issuance of or issue any
additional shares of its capital stock, or any options, calls, warrants, stock
appreciation rights or commitments relating to its capital stock or any
securities or obligations convertible into or exchangeable for, or giving any
person any right to subscribe for or acquire from it, shares of its capital
stock;
(c) enter into any employment contracts with, increase the rate
of compensation of, or pay or agree to pay any bonus to, any of its directors,
officers or employees, except in accordance with existing policy; provided,
however, that Hibernia hereby acknowledges and consents to the increase in the
monthly directors' fees payable to members of the Peoples board of directors to
$600 per month beginning January 1, 1998;
(d) enter into or substantially modify (except as may be
required by applicable law) any pension, retirement, stock option, stock
purchase, stock appreciation right, savings, profit sharing, deferred
compensation, consulting, bonus, group insurance or other employee benefit,
incentive or welfare contract, plan or arrangement, or any trust agreement
related thereto, in respect of any of its directors, officers or other
employees.
(e) other than as contemplated hereby, (i) carry on its business
other than in the usual, regular and ordinary course in substantially the same
manner as heretofore conducted, (ii) amend its or the Bank's Articles of
Incorporation or Bylaws, (iii) impose, or suffer the imposition, on any share of
stock held by Peoples in the Bank, of any material lien, charge, or encumbrance,
or permit any such lien to exist, (iv) establish or add any automatic teller
machines or branch or other banking offices, (v) make any capital expenditures
in excess of $25,000 other than in the ordinary course of business consistent
with past practices or (vi) take any action that would materially and adversely
affect the ability of any party hereto to obtain the approvals necessary for
consummation of the transactions contemplated hereby or that would materially
and adversely affect Peoples' ability to perform its covenants and agreements
hereunder;
(f) except with respect to transactions contemplated hereby,
merge with any other corporation or bank or permit any other corporation or bank
to merge into it or consolidate with any other corporation or bank; acquire
control over any other firm, bank, corporation or organization or create any
subsidiary (except in a fiduciary capacity or in connection with foreclosures in
bona fide loan transactions); liquidate; or sell or dispose of any assets or
acquire any assets, otherwise than in the ordinary course of its business
consistent with its past practice; or
(g) knowingly fail to comply with any laws, regulations,
ordinances, or governmental actions applicable to it and to the conduct of its
business in a manner significant, material and adverse to its business.
7. Representations and Warranties of Peoples. Peoples (and not its
directors or officers in their personal capacities) hereby represents and
warrants as follows:
7.1. Recitals. The facts set forth in the preamble to this
Agreement with respect to it are true and correct.
7.2. Organization and Qualification. Peoples is a corporation
and the Bank is a banking corporation duly organized, validly existing, and in
good standing under the laws of the State of Louisiana, respectively; each of
Peoples and the Bank has the corporate power and authority to carry on its
business as it is now being conducted and to own, lease and operate its assets,
properties and business; and each of Peoples and the Bank has all requisite
power and authority to execute and deliver this Agreement and perform its
obligations hereunder.
7.3. Ownership of Other Banks. Peoples does not own, directly or
indirectly, 5 percent or more of the outstanding capital stock or other voting
securities of any corporation, bank, or other organization except the Bank. The
presently authorized capital stock of the Bank consists solely of 141,500 shares
of common stock of the par value of $10.00 each, of which 138,254 shares of
common stock are issued and outstanding. The outstanding shares of capital stock
of the Bank are validly issued and outstanding, fully paid and, except as may be
affected by Louisiana Revised Statute 6:262, nonassessable and, except as
provided on Schedule 7.3 hereto, all of such shares are owned by Peoples, free
and clear of all liens, claims and encumbrances.
7.4. Corporate Authorization. The execution, delivery and
performance of this Agreement have been authorized by each of Peoples' and the
Bank's Boards of Directors, and, subject to the approval of this Agreement by
Peoples' shareholders in accordance with the LBCL and other approvals required
by Section 12 hereof, all corporate acts and other proceedings required for the
due and valid authorization, execution, delivery and performance by each of
Peoples and the Bank of this Agreement and the consummation of the Company
Merger have been validly and appropriately taken. Subject to such shareholder
approval and to such other approvals as are required by Section 12 hereof, this
Agreement is a legal, valid and binding obligation of Peoples and the Bank,
enforceable against each of Peoples and the Bank in accordance with its terms,
except that enforcement may be limited by bankruptcy, reorganization, insolvency
and other similar laws and court decisions relating to or affecting the
enforcement of creditors' rights generally and by general equitable principles
or principles of Louisiana law that are similar to equitable principles in
jurisdictions that recognize a distinction between law and equity.
7.5. No Conflicts. Except as disclosed on Schedule 7.5 hereto,
the execution and delivery of this Agreement by Peoples does not, and the
consummation of the transactions contemplated hereby by it will not, constitute
(i) a breach or violation of, or a default under, any law, rule or regulation or
any judgment, decree, order, governmental permit or license, or agreement,
indenture or instrument of Peoples or the Bank or to which Peoples or the Bank
is subject, which breach, violation or default would have a material and adverse
effect on the financial condition, properties, businesses or results of
operations of Peoples and the Bank taken as a whole or on the transactions
contemplated hereby, (ii) to the best of the knowledge of Peoples' management, a
breach or violation of, or a default under, any law, rule or regulation or any
judgment, decree, order, governmental permit or license, or agreement, indenture
or instrument of Peoples or the Bank or to which Peoples or the Bank is subject,
or (iii) a breach or violation of, or a default under, the Articles of
Incorporation or Bylaws of Peoples or the Bank; and the consummation of the
transactions contemplated hereby will not require any consent or approval under
any such law, rule, regulation, judgment, decree, order, governmental permit or
license or the consent or approval of any other party to any such agreement,
indenture or instrument, other than any required approvals of shareholders and
applicable regulatory authorities.
7.6. Financial Statements; Dividend Restrictions. Peoples has
delivered to Hibernia prior to the execution of this Agreement true and correct
copies of the following consolidated financial statements (collectively referred
to herein as the "Peoples Financial Statements"): Peoples' Consolidated Balance
Sheets as of December 31, 1997, 1996 and 1995 (audited) Consolidated Statements
of Income and Changes in Stockholders' Equity and Consolidated Statements of
Cash Flows for the years ended December 31, 1997, 1996 and 1995 (audited). Each
of the Peoples Financial Statements (including the related notes) fairly
presents the consolidated results of operations of Peoples and the Bank for the
respective periods covered thereby and the consolidated financial condition of
Peoples and the Bank as of the respective dates thereof (subject, in the case of
unaudited statements, to year-end audit adjustments that will not be material in
amount or effect), in each case, in accordance with GAAP consistently applied
during the periods involved, except as may be noted therein. Except as disclosed
in the Peoples Financial Statements, including the notes thereto, or Schedule
7.6 hereto, and except as otherwise required by this Agreement, there are no
restrictions in any note, indenture, agreement, statute or otherwise (except for
statutes or regulations applicable to Louisiana corporations or national banks
generally) precluding Peoples or the Bank from paying dividends, in each case
when, as and if declared by its Board of Directors.
7.7. No Material Adverse Change. Since December 31, 1997, there
has been no event or condition of any character (whether actual, or to the
knowledge of Peoples or the Bank, threatened or contemplated) that has had or
can reasonably be anticipated to have, or that, if concluded or sustained
adversely to Peoples, would reasonably be anticipated to have, a material
adverse effect on the financial condition, results of operations, business or
prospects of Peoples or the Bank, excluding changes in laws or regulations that
affect banking institutions generally.
7.8. Litigation and Proceedings. Except as set forth on Schedule
7.8 hereto, no litigation, proceeding or controversy before any court or
governmental agency is pending against Peoples that in the opinion of its
management is likely to have a material and adverse effect on the business,
results of operations or financial condition of Peoples and the Bank taken as a
whole, and, to the best of its knowledge, no such litigation, proceeding or
controversy has been threatened or is contemplated. Except as disclosed on
Schedule 7.8 hereto, no member of Peoples' consolidated group is subject to any
written agreement, memorandum, or order with or by any bank or bank holding
company regulatory authority restricting its operations or requiring any
material actions.
7.9. Material Contracts. Except for this Agreement and
arrangements made in the ordinary course of business or disclosed on Schedule
7.9 hereto, neither Peoples nor the Bank is bound by any material contract to be
performed after the date hereof that is not terminable by Peoples or the Bank
without penalty or liability on thirty days prior notice.
7.10. Brokers' or Finders' Fees. No agent, broker, investment
banker, investment or financial advisor or other person acting on behalf of
Peoples or the Bank or under their authority is entitled to any commission,
broker's or finder's fee from any of the parties hereto in connection with any
of the transactions contemplated by this Agreement; provided, however, that in
the event Peoples determines to engage a financial advisor within 30 days after
the date of this Agreement, Peoples shall may so engage the advisor and pay such
fees to such advisor as may be reasonable or appropriate under the circumstances
without violation or breach of this provision if such advisor and the fees to be
paid such advisor are identified to Hibernia and Hibernia shall have no
reasonable objection to such fees.
7.11. Contingent Liabilities. Except as disclosed on Schedule
7.11 hereto or as reflected in the Peoples Financial Statements and except in
the case of the Bank for unfunded loan commitments made in the ordinary course
of business consistent with past practices, as of December 31, 1997, neither
Peoples nor the Bank has any obligation or liability (contingent or otherwise)
that was material, or that when combined with all similar obligations or
liabilities would have been material, to Peoples and the Bank taken as a whole
and there does not exist a set of circumstances resulting from transactions
effected or events occurring prior to, on, or after December 31, 1997, or from
any action omitted to be taken during such period that, to the knowledge of
Peoples, could reasonably be expected to result in any such material obligation
or liability.
7.12. Tax Liability. The amounts set up as liabilities for taxes
in the Peoples Financial Statements are sufficient for the payment of all
respective taxes (including, without limitation, federal, state, local, and
foreign excise, franchise, property, payroll, income, capital stock, and sales
and use taxes) accrued in accordance with GAAP and unpaid at the respective
dates thereof.
7.13. Material Obligations Paid. Since December 31, 1997,
neither Peoples nor the Bank has incurred or paid any obligation or liability
that would be material to Peoples on a consolidated basis, except for
obligations incurred or paid in connection with transactions by it in the
ordinary course of its business consistent with its past practices.
7.14. Tax Returns; Payment of Taxes. All federal, state, local,
and foreign tax returns (including, without limitation, estimated tax returns,
withholding tax returns with respect to employees, and FICA and FUTA returns)
required to be filed by or on behalf of Peoples or the Bank have been timely
filed or requests for extensions have been timely filed and granted and have not
expired for periods ending on or before December 31, 1996, and all returns filed
are complete and accurate to the best information and belief of their respective
managements; all taxes shown on filed returns have been paid. As of the date
hereof, there is no audit, examination, deficiency or refund litigation or
matter in controversy with respect to any taxes that might result in a
determination materially adverse to Peoples or the Bank except as reserved
against in the Peoples Financial Statements. All taxes, interest, additions and
penalties due with respect to completed and settled examinations or concluded
litigation have been paid, and Peoples' reserves for bad debts at December 31,
1996, as filed with the Internal Revenue Service were not greater than the
maximum amounts permitted under the provisions of Section 585 of the Internal
Revenue Code of 1986, as amended (the "Internal Revenue Code").
7.15. Loans. To the best knowledge and belief of its management,
each loan reflected as an asset of Peoples in the Peoples Financial Statements,
as of December 31, 1997, or acquired since that date, is the legal, valid, and
binding obligation of the obligor named therein, enforceable in accordance with
its terms (except as such enforceability may be affected by bankruptcy,
reorganization, insolvency and other similar laws and court decisions relating
to or affecting the enforcement of creditors' rights generally), and no loan is
subject to any asserted defense, offset or counterclaim known to Peoples, except
as disclosed in writing to Hibernia on or prior to the date hereof.
7.16. Allowance for Loan Losses. The allowances for possible
loan losses shown on the balance sheets of Peoples as of December 31, 1997 are
adequate in all material respects under the requirements of regulatory
accounting principles (and to the best knowledge and belief of Peoples, GAAP)
and the balance sheets of Peoples as of December 31, 1996 are adequate in all
material respects under the requirements of GAAP, to provide for possible
losses, net of recoveries, relating to loans previously charged off, on loans
outstanding (including accrued interest receivable) as of December 31, 1997 or
December 31, 1996, respectively, and each such allowance has been established in
accordance with GAAP (in the case of allowances shown on the balance sheets of
Peoples as of December 31, 1996) or regulatory accounting principles (in the
case of allowances shown on the balance sheets of Peoples as of December 31,
1997).
7.17. Title to Assets; Adequate Insurance Coverage.
(a) As of December 31, 1997, Peoples and the Bank had, and
except with respect to assets disposed of for adequate consideration in the
ordinary course of business since such date, now have, good and merchantable
title to all real property and good and merchantable title to all other material
properties and assets reflected in the Peoples Financial Statements, free and
clear of all mortgages, liens, pledges, restrictions, security interests,
charges and encumbrances of any nature except for (i) mortgages and encumbrances
which secure indebtedness which is properly reflected in the Peoples Financial
Statements or which secure deposits of public funds as required by law; (ii)
liens for taxes accrued but not yet payable; (iii) liens arising as a matter of
law in the ordinary course of business with respect to obligations incurred
after December 31, 1997, provided that the obligations secured by such liens are
not delinquent or are being contested in good faith; (iv) such imperfections of
title and encumbrances, if any, as do not materially detract from the value or
materially interfere with the present use of any of such properties or assets or
the potential sale of any such owned properties or assets; and (v) capital
leases and leases, if any, to third parties for fair and adequate consideration.
Peoples and the Bank own, or have valid leasehold interests in, all material
properties and assets, tangible or intangible, used in the conduct of its
business. Any real property and other material assets held under lease by
Peoples or the Bank are held under valid, subsisting and enforceable leases with
such exceptions as are not material and do not interfere with the use made or
proposed to be made by Hibernia in such lease of such property.
(b) With respect to each lease of any real property or a
material amount of personal property to which Peoples or the Bank is a party,
except for financing leases in which Peoples or the Bank is lessor, (i) such
lease is in full force and effect in accordance with its terms; (ii) all rents
and other monetary amounts that have become due and payable thereunder have been
paid; (ii) there exists no default or event, occurrence, condition or act which
with the giving of notice, the lapse of time or the happening of any further
event, occurrence, condition or act would become a default under such lease; and
(iv) neither the Company Merger nor the Bank Merger will constitute a default or
a cause for termination or modification of such lease.
(c) Neither Peoples nor the Bank has any legal obligation,
absolute or contingent, to any other person to sell or otherwise dispose of any
substantial part of its assets or to sell or dispose of any of its assets except
in the ordinary course of business consistent with past practices.
(d) To the knowledge and belief of its management, the policies
of fire, theft, liability and other insurance maintained with respect to the
assets or businesses of Peoples and the Bank provide adequate coverage against
loss and the fidelity bonds in effect as to which Peoples or the Bank is named
insured.
7.18. Employee Plans. To the best of Peoples' knowledge and
belief, it, the Bank, and all "employee benefit plans," as defined in Section
3(3) of the Employee Retirement Income Security Act of 1974, as amended
("ERISA"), that cover one or more employees employed by Peoples or the Bank:
(i) is in compliance with all laws, regulations,
reporting and licensing requirements and orders applicable to its business or
to such plan or any of its employees (because of such employee's activities
on behalf of it), the breach or violation of which could have a material and
adverse effect on such business; and
(ii) has received no notification from any agency or
department of federal, state or local government or the staff thereof
asserting that any such entity is not in compliance with any of the statutes,
regulations or ordinances that such governmental authority enforces, or
threatening to revoke any license, franchise, permit or governmental
authorization, and is subject to no agreement with any such governmental
authority with respect to its assets or business.
7.19. Copies of Employee Plans. On or prior to the date hereof,
Peoples has provided Hibernia with true, complete and accurate copies of all
pension, retirement, stock purchase, stock bonus, stock ownership, stock option,
savings, stock appreciation right or profit-sharing plans, any employment,
deferred compensation, consultant, severance, bonus, or collective bargaining
agreement or group insurance contract, or any other incentive, welfare, or
employee benefit plan or agreement maintained by it or the Bank for its or the
Bank's employees or former employees.
7.20. Plan Liability. Except for liabilities to the Pension
Benefit Guaranty Corporation pursuant to Section 4007 of ERISA, all of which
have been fully paid, and except for liabilities to the Internal Revenue Service
under section 4971 of the Internal Revenue Code, all of which have been fully
paid, neither Peoples nor the Bank has any liability to the Pension Benefit
Guaranty Corporation or to the Internal Revenue Service with respect to any
pension plan qualified under Section 401 of the Internal Revenue Code.
7.21. No Default. To the best knowledge and belief of its
management, neither Peoples nor the Bank is in default in any material respect
under any contract, agreement, commitment, arrangement, lease, insurance policy
or other instrument to which it is a party or by which its respective assets,
business or operations may be bound or affected or under which it or its
respective assets, business or operations receive benefits, and there has not
occurred any event that with the lapse of time or the giving of notice or both
would constitute such a default.
7.22. Minutes. Prior to the date hereof, Peoples has made
available to Hibernia, for inspection pursuant to the terms of Section 9.5
hereof, the minutes of meetings of Peoples' and the Bank's Board of Directors
and all committees thereof held prior to the date hereof, which minutes are
complete and correct in all respects and fully and fairly present the
deliberations and actions of such Boards and committees and accurately reflect
the business condition and operations of Peoples and the Bank as of the dates
and for the periods indicated therein.
7.23. Insurance Policies. Attached hereto as Schedule 7.23 is a
schedule detailing all policies of fire, theft, public liability, and other
insurance (including without limitation fidelity bonds and directors and
officers liability insurance) maintained by Peoples or the Bank at the date
hereof. Except as disclosed on Schedule 7.23 hereto, neither Peoples nor the
Bank has received any notice of a premium increase or cancellation with respect
to any of its insurance policies or bonds, and within the last three years,
neither Peoples nor the Bank has been refused any insurance coverage sought or
applied for, and it has no reason to believe that existing insurance coverage
cannot be renewed as and when the same shall expire, upon terms and conditions
as favorable as those presently in effect, other than possible increases in
premiums or unavailability of coverage that do not result from any extraordinary
loss experience of Peoples or the Bank.
7.24. Investments. Except for investments classified as
held-to-maturity as prescribed under the Financial Accounting Standards Board
Statement No. 115 and pledges to secure public or trust deposits, none of the
investments reflected in the Peoples Financial Statements under the heading
"Investment Securities," and none of the investments made by Peoples or the Bank
since December 31, 1997, and none of the assets reflected in the Peoples
Financial Statements under the heading "Cash and Due From Banks," is subject to
any restriction, whether contractual or statutory, that materially impairs the
ability of Peoples or the Bank freely to dispose of such investment at any time.
With respect to all repurchase agreements to which Peoples or the Bank is a
party, Peoples or the Bank, as the case may be, has a valid, perfected first
lien or security interest in the government securities or other collateral
securing each such repurchase agreement which equals or exceeds the amount of
the debt secured by such collateral under such agreement.
7.25. Environmental Matters. Neither Peoples nor the Bank nor,
to the knowledge of Peoples and the Bank, any previous owner or operator of any
properties at any time owned (including any properties owned as a result of
foreclosure of a loan, whether still owned or subsequently resold) leased, or
occupied by Peoples or the Bank or used by Peoples or the Bank in their
respective business ("Peoples Properties") used, generated, treated, stored, or
disposed of any hazardous waste, toxic substance, or similar materials on,
under, or about Peoples Properties except in compliance with all applicable
federal, state, and local laws, rules, and regulations pertaining to air and
water quality, hazardous waste, waste disposal, air emissions, and other
environmental matters ("Environmental Laws"). Neither Peoples nor the Bank has
received any notice of noncompliance with Environmental Laws, applicable laws,
orders, or regulations of any governmental authorities relating to waste
generated by any such party or otherwise or notice that any such party is liable
or responsible for the remediation, removal, or clean-up of any site relating to
Peoples Properties.
8. Representations and Warranties of Hibernia. Hibernia (and not its
directors or officers in their personal capacities) hereby represents and
warrants as follows:
8.1. Recitals. The facts set forth in the preamble to this
Agreement with respect to it are true and correct.
8.2. Organization and Qualification. Hibernia is a corporation,
and HNB is a national banking association, duly organized, validly existing and
in good standing under the laws of the State of Louisiana and the United States
of America, respectively. Each of Hibernia and its material subsidiaries has the
corporate power and authority to carry on its business as it is now being
conducted and to own, lease and operate its assets, properties and business, and
Hibernia has all requisite power and authority to execute and deliver this
Agreement and perform its obligations hereunder.
8.3. Shares Fully Paid and Non Assessable. The outstanding
shares of capital stock of Hibernia Corporation and HNB are validly issued and
outstanding, fully paid and nonassessable (subject, in the case of HNB, to 12
U.S.C. Section 55) and all of such shares of HNB are owned directly or
indirectly by Hibernia free and clear of all liens, claims, and encumbrances.
The shares of Hibernia Common Stock to be issued in connection with the Company
Merger pursuant to this Agreement will have been duly authorized and, when
issued in accordance with the terms of this Agreement, will be validly issued,
fully paid, and nonassessable.
8.4. Due Authorization. The execution, delivery and performance
of this Agreement have been authorized by Hibernia's Board of Directors, and,
subject to the regulatory and other approvals required by Section 12 hereof, all
corporate acts and other proceedings required for the due and valid
authorization, execution, delivery and performance by Hibernia of this Agreement
and the consummation of the Company Merger have been validly and appropriately
taken. Subject to receipt of the regulatory and other approvals required by
Section 12 hereof, this Agreement is a legal, valid, and binding obligation of
Hibernia enforceable against Hibernia in accordance with its terms, except that
enforcement may be limited by bankruptcy, insolvency, and other laws of general
applicability relating to or affecting creditors' rights generally and by
general equitable principles or principles of Louisiana law that are similar to
equitable principles in jurisdictions that recognize a distinction between law
and equity.
8.5. No Conflicts. Except as disclosed on Schedule 8.5 hereto,
the execution and delivery of this Agreement by Hibernia does not, and the
consummation of the transactions contemplated hereby by it will not, constitute
(i) a breach or violation of, or a default under, any law, rule, or regulation
or any judgment, decree, order, governmental permit or license, or agreement,
indenture, or instrument of Hibernia or its subsidiaries or by which Hibernia or
any of its subsidiaries is subject, which breach, violation or default would
have a material and adverse effect on the financial condition, properties,
businesses, or results of operations of Hibernia and its subsidiaries taken as a
whole or on the transactions contemplated hereby, (ii) to the best of the
knowledge of Hibernia's management, a breach or violation of, or a default
under, any law, rule, or regulation or any judgment, decree, order, governmental
permit or license, or agreement, indenture, or instrument of Hibernia or its
subsidiaries or to which Hibernia or any of its subsidiaries is subject, or
(iii) a breach or violation of, or a default under the Articles of Incorporation
or Association or Bylaws of Hibernia, or of its subsidiaries, and the
consummation of the transactions contemplated hereby will not require any
consent or approval under any such law, rule, regulation, judgment, decree,
order, governmental permit or license or the consent or approval of any other
party to any such agreement, indenture, or instrument, other than any required
approvals of shareholders and applicable regulatory authorities.
8.6. Reports of Hibernia. As of their respective dates, none of
its Annual Report on Form 10- K for the fiscal year ended December 31, 1997, and
its proxy statement for its 1997 annual meeting of shareholders, each in the
form (including exhibits) filed with the Securities and Exchange Commission (the
"SEC") (collectively, the "Hibernia Reports"), contained any untrue statement of
a material fact or omitted to state a material fact required to be stated
therein or necessary to make the statements made therein, in light of the
circumstances under which they were made, not misleading. There is no fact or
circumstance that, individually or in the aggregate, materially and adversely
has affected or is so affecting, or, in the opinion of the executive officers of
Hibernia, may reasonably be expected in the future to so affect, the business,
financial condition, net worth, properties, prospects or results of operations
of Hibernia and its subsidiaries, taken as a whole, that has not been disclosed
in the Hibernia Reports. Each of the balance sheets in or incorporated by
reference into the Hibernia Reports (including the related notes) fairly
presents the financial position of the entity or entities to which it relates as
of its date and each of the statements of income and stockholders' equity and
statement of cash flows or equivalent statements in the Hibernia Reports
(including any related notes and schedules) fairly presents the results of
operations and changes in stockholders' equity, as the case may be, of the
entity or entities to which it relates for the periods set forth therein
(subject, in the case of unaudited statements, to year-end audit adjustments
that will not be material in amount or effect), in each case in accordance with
GAAP consistently applied during the periods involved, except as may be noted
therein. Copies of the Hibernia Reports have been furnished to Peoples on or
before the date hereof.
8.7. Employee Plans. To the best of Hibernia's knowledge and
belief, it, HNB , and all "employee benefit plans," as defined in Section 3(3)
of the Employee Retirement Income Security Act of 1974, as amended ("ERISA"),
that cover one or more employees employed by Hibernia or HNB:
(i) is in compliance with all laws, regulations, reporting and licensing
requirements and orders applicable to its business or to such plan or any of its
employees (because of such employee's activities on behalf of it), the breach or
violation of which could have a material and adverse effect on such business;
and
(ii) has received no notification from any agency or department of federal,
state or local government or the staff thereof asserting that any such entity is
not in compliance with any of the statutes, regulations or ordinances that such
governmental authority enforces, or threatening to revoke any license,
franchise, permit or governmental authorization, and is subject to no agreement
with any such governmental authority with respect to its assets or business.
8.8. No Material Adverse Change. Since December 31, 1997, there
has been no event or condition of any character (whether actual, or to the
knowledge of Hibernia or HNB, threatened or contemplated) that has had or can
reasonably be anticipated to have, or that, if concluded or sustained adversely
to Hibernia, would reasonably be anticipated to have, a material adverse effect
on the financial condition, results of operations, business or prospects of
Hibernia or HNB, excluding changes in laws or regulations that affect banking
institutions generally.
9. Agreements and Covenants. Hibernia and Peoples each hereby agrees
and covenants to the other that:
9.1. Shareholder Approvals. If required by applicable law, this
Agreement shall be submitted to its respective shareholders at a special meeting
called and held in accordance with applicable provisions of law (to be scheduled
to the extent possible for the date of the shareholders' meeting for the other
party hereto, if any) at which its shareholders shall be asked to consider and
vote upon this Agreement and the transactions contemplated hereby.
9.2. Actions Necessary to Complete the Company Merger and the
Bank Merger. It shall use its best efforts in good faith to take or cause to be
taken all action necessary or desirable under this Agreement on its part as
promptly as practicable so as to permit the consummation of this Agreement at
the earliest possible date (including obtaining the consent or approval of each
governmental authority and individual, partnership, corporation, association, or
any other form of business or professional entity whose consent or approval is
required for the consummation of the transactions contemplated hereby,
requesting the delivery of appropriate opinions and letters from its counsel and
recommending that this Agreement be approved by its shareholders) and cooperate
fully with the other party hereto to that end; provided, however, that neither
party shall be obligated to take or cause to be taken any action which is or
creates a material burden on or a material expense for such party, or materially
adversely changes the economics of the Mergers to such party, except to the
extent such actions are reasonably anticipated to be required in order to effect
the Mergers.
9.3. Preparation of Registration Statement and Proxy Statement.
It shall prepare as promptly as practicable jointly with the other party hereto
a proxy statement to be mailed to the shareholders of each party the
shareholders of which are to vote upon this Agreement in connection with the
transactions contemplated hereby and to be part of a registration statement (the
"Registration Statement") to be filed by Hibernia with the SEC pursuant to the
Securities Act of 1933, as amended (the "1933 Act") with respect to the shares
to be issued in the Merger. When the Registration Statement or any
post-effective amendment thereto shall become effective, and at all times
subsequent to such effectiveness, up to and including the time of the last
shareholder meeting with respect to the transactions contemplated hereby, such
Registration Statement and all amendments or supplements thereto, with respect
to all information set forth therein furnished or to be furnished by Hibernia
relating to Hibernia and by Peoples relating to Peoples, (i) will comply in all
material respects with the provisions of the 1933 Act and the rules and
regulations of the SEC thereunder and (ii) will not contain any untrue statement
of a material fact or omit to state a material fact required to be stated
therein or necessary to make the statements contained therein not misleading.
Hibernia will advise Peoples promptly after it receives notice thereof of the
time when the Registration Statement has become effective or any supplement or
amendment has been filed, of the issuance of any stop order, of the suspension
of the qualification of the Hibernia Common Stock issuable in connection with
the Company Merger for offering or sale in any jurisdiction, of the initiation
or threat of any proceeding for any such purpose, or of any request by the SEC
for the amendment or supplement of the Registration Statement or for additional
information.
9.4. Press Releases and Public Statements. Unless approved by
Hibernia in advance, Peoples will not issue any press release, marketing or
advertising material or other written statement for general circulation relating
to the transactions contemplated hereby, except as otherwise required by law.
The parties will cooperate in any public announcements directly related to the
Merger; provided, however, that, in the event Hibernia determines to file a
current report on Form 8-K that discloses only the substantive facts of a
previously released press release, such filing may be made without prior
consultation with Peoples so long as Peoples is furnished with a copy of such
report within a reasonable time after its filing.
9.5. Material Developments; Access to Information.
(i) In order to afford Peoples access to such information as it may
reasonably deem necessary to perform its due diligence review with respect to
Hibernia and its assets in connection with the Merger, Hibernia shall (and shall
cause HNB to), (A) upon reasonable notice, afford Peoples and its officers,
employees, counsel, accountants and other authorized representatives, during
normal business hours throughout the period prior to the Effective Date and to
the extent consistent with applicable law, access to its premises, properties,
books, records and personnel, and to furnish Peoples and such representatives
with such financial and operating data and other information of any kind
respecting its business and properties as Peoples shall from time to time
reasonably request to perform such review, (B) furnish Peoples with copies of
all reports filed by Hibernia with the Securities and Exchange Commission
("SEC") throughout the period after the date hereof prior to the Effective Date
promptly after such reports are so filed, and (C) promptly advise Peoples of the
occurrence before the Effective Date of any event or condition of any character
(whether actual or to the knowledge of Hibernia, threatened or contemplated)
that has had or can reasonably be anticipated to have, or that, if concluded or
sustained adversely to Hibernia, would reasonably be anticipated to have, a
material adverse effect on the financial condition, results of operations,
business or prospects of its consolidated group as a whole.
(ii) In order to afford Hibernia access to such information as it may
reasonably deem necessary to perform any due diligence review with respect to
the assets of Peoples to be acquired as a result of the Merger, Peoples shall
(and shall cause the Bank to), upon reasonable notice, afford Hibernia and its
officers, employees, counsel, accountants, and other authorized representatives
access, during normal business hours throughout the period prior to the
Effective Date, to all of its and the Bank's properties, books, contracts,
commitments, loan files, litigation files, and records (including, but not
limited to, the minutes of the Boards of Directors of Peoples and the Bank and
all committees thereof), and it shall (and shall cause the Bank to), upon
reasonable notice and to the extent consistent with applicable law, furnish
promptly to Hibernia such information as Hibernia may reasonably request to
perform such review.
(iii) No investigation pursuant to this Section 9.5 shall affect or be
deemed to modify any representation or warranty made by, or the conditions to
the obligations to consummate the Merger of, either party to this Agreement.
9.6. Prohibited Negotiations. Prior to the Effective Date,
neither Peoples nor the Bank shall solicit or encourage inquiries or proposals
with respect to, furnish any information relating to, or participate in any
negotiations or discussions concerning, any acquisition or purchase of all or a
substantial portion of the assets of, or of a substantial equity interest in,
Peoples or the Bank or any business combination with Peoples or the Bank other
than as contemplated by this Agreement. Peoples shall instruct each officer,
director, agent, or affiliate of it or the Bank to refrain from doing any of the
above, and Peoples will notify Hibernia promptly if any such inquiries or
proposals are received by, any such information is requested from, or any such
negotiations or discussions are sought to be initiated with, Peoples; provided,
however, that nothing contained in this section shall be deemed to prohibit any
officer or director of Peoples or the Bank from taking any action that counsel
to Peoples or the Bank has advised in writing is required to discharge his or
her fiduciary duties to Peoples or the Bank, a copy of which advice shall be
furnished to Hibernia upon its request.
9.7. Affiliates. Prior to the Closing Date (as defined in
Section 14 hereof), Peoples shall deliver to Hibernia a letter identifying all
persons whom it believes to be "affiliates" of Peoples for purposes of Rule
145(c) or Rule 144 (as applicable) under the 1933 Act ("Affiliates"). Peoples
shall use its best efforts to cause each person so identified to deliver to
Hibernia prior to the Effective Date a written agreement in substantially the
form of Exhibit 9.7 hereto providing, among other things, that such person will
not dispose of Hibernia Common Stock received in the Company Merger except in
compliance with the 1933 Act and the rules and regulations thereunder and except
in accordance with Section 201.01 of the SEC's Codification of Financial
Reporting Policies; provided, however, that Peoples shall have no such
obligation to use its best efforts to cause any such identified person to
deliver to Hibernia such agreement if such person may not lawfully execute such
agreement.
9.8. Adjustment for Changes in Outstanding Shares. In the event
that prior to the Effective Date the outstanding shares of Hibernia Common Stock
shall have been increased, decreased, or changed into or exchanged for a
different number or kind of shares or securities by reorganization,
recapitalization, reclassification, stock dividend, stock split, or other like
changes in the Hibernia's capitalization, then an appropriate and proportionate
adjustment shall be made in the number and kind of shares of Hibernia Common
Stock to be thereafter delivered pursuant to Section 3.1 hereof.
9.9. Accounting Treatment. It shall use its best efforts to
cause the Company Merger to qualify for pooling-of-interests accounting
treatment to the extent factors affecting such treatment are within its control.
9.10. Cooperation in Bank Merger. Promptly upon request by
Hibernia, Peoples shall, and it shall cause the Banks to, take any and all
necessary or appropriate actions to cause the Bank to become merged with and
into HNB effective as of, or as soon as practicable after, the Effective Date if
so requested by Hibernia; provided, however, that Peoples acknowledges and
agrees that the determination as to when and if the Bank and HNB shall be merged
shall be solely within Hibernia's discretion.
9.11. Adoption of Accounting Policies. As soon as practicable
after the satisfaction or waiver of all conditions to the Closing set forth in
Section 12 of this Agreement and in any event prior to the Effective Date
(unless this Agreement is terminated pursuant to Section 13 hereof), Peoples
shall, and it shall cause the Bank to, take any and all necessary or appropriate
actions to adopt all Hibernia accounting procedures and policies (including
without limitation those policies pertaining to charged-off and non-accrual
assets); provided, however, that no such action taken by Peoples or the Bank at
the request of Hibernia or HNB pursuant to this Section shall be deemed to be,
or be deemed to cause, a breach of any representation or warranty made by
Peoples herein.
9.12. Indemnification of Directors and Officers of Peoples and
the Bank.
(a) From and after the Effective Date of the Merger, Hibernia
agrees to indemnify and hold harmless each person who, as of the date
immediately prior to the Closing Date, served as an officer or director of
Peoples or the Bank (an "Indemnified Person") from and against all damages,
liabilities, judgments and claims (and related expenses including, but not
limited to, attorney's fees and amounts paid in settlement) based upon or
arising from his capacity as an officer or director of Peoples or the Bank, to
the same extent as he would have been indemnified under the Articles of
Incorporation and/or Bylaws of Hibernia, as such documents were in effect on the
date of this Agreement as if he were an officer or director of Hibernia at all
relevant times; provided, however, that the indemnification provided by this
Section shall not apply to any claim against an Indemnified Person if such
Indemnified Person knew or should have known of the existence of the claim and
failed to make a good faith effort to require Peoples or the Bank, as the case
may be, to notify its director and officer liability insurance carrier of the
existence of such claim prior to the Closing Date.
(b) The rights granted to the Indemnified Persons hereby shall
be contractual rights inuring to the benefit of all Indemnified Persons and
shall survive this Agreement and any merger, consolidation or reorganization of
Hibernia or HNB.
(c) The rights to indemnification granted by this subsection
9.12 are subject to the following limitations: (i) the total aggregate
indemnification to be provided by Hibernia pursuant to subsection 9.12(a) shall
not exceed, as to all of the Indemnified Persons as a group, the sum of $13
million, and Hibernia shall have no responsibility to any Indemnified person for
the manner in which such sum is allocated among that group (but nothing in this
subsection is intended to prohibit the Indemnified Persons from seeking
reallocation among themselves); (ii) a director or officer who would otherwise
be an Indemnified Person under this subsection 9.12 shall not be entitled to the
benefits hereof unless such director or officer has executed a Joinder Agreement
(the "Joinder Agreement") in the form of Exhibit 9.12 hereto; and (iii) amounts
otherwise required to be paid by Hibernia to an Indemnified Person pursuant to
this subsection 9.12 shall be reduced by any amounts that such Indemnified
Person recovers by virtue of the claim for which other employees and officers
indemnification is sought.
(d) Hibernia agrees that the $13 million indemnification limit
set forth in paragraph (c) of this Section 9.12 shall not apply to any damages,
liabilities, judgments and claims (and related expenses, including but not
limited to attorney's fees and amounts paid in settlement) insofar as they arise
out of or are based upon the matters for which indemnification is provided in
Section 11.2 hereof.
(e) The provisions of this Section 9.12 are intended to be for the
benefit of and shall be enforceable by, each Indemnified Person and his or her
heirs and representatives.
9.13 Covenant to Close. At such time as is deemed appropriate by
the parties hereto or as otherwise set forth in this Agreement, and upon
satisfaction or waiver of each of the conditions to Closing of the Mergers, the
parties agree to take such actions as are reasonably necessary or appropriate to
effect the Closing and the Mergers.
10. Permits, Consents and Approvals. As promptly as practicable after
the date hereof:
(a) Hibernia shall submit an application to the Board of
Governors of the Federal Reserve System (the "Federal Reserve Board") for
approval of the transactions contemplated hereby in accordance with the
provisions of the Bank Holding Company Act;
(b) Hibernia shall submit an application to the Comptroller of
the Currency (the "Comptroller") for approval of the Bank Merger in accordance
with the provisions of the Bank Merger Act;
(c) Peoples shall submit to the Louisiana Office of Financial
Institutions such applications, documents and/or filing fees necessary in order
to complete the Bank Merger;
(d) Peoples shall endeavor to have its Affiliates execute a
written agreement in substantially the form of Exhibit 9.7 hereto; provided,
however, that Peoples shall have no such obligation prior to the receipt by the
Board of Directors of Peoples of the Fairness Opinion; and
(e) Peoples shall endeavor to have each of the directors of
Peoples and the Bank execute a Non-Competition Agreement in substantially the
form of Exhibit 10(e) hereto; provided, however, that Peoples shall have no such
obligation prior to the receipt by the Board of Directors of Peoples of the
Fairness Opinion.
11. Confidentiality; Hold Harmless.
11.1. Confidentiality. The parties hereto acknowledge that each
of them or their representatives or agents has engaged in, and may continue to
engage in, certain due diligence reviews and examinations with respect to the
other and that, in the course of such reviews and examination, has received or
may receive in the future confidential or proprietary information. Hibernia and
Peoples agree, for a period of five years after the date hereof on behalf of
themselves, their respective officers, directors, employees, representatives and
agents, that they will not use any information obtained pursuant to due
diligence investigations for any purpose unrelated to the consummation of the
transactions contemplated by this Agreement, and, if the Company Merger is not
consummated, will hold all such information and documents in confidence unless
and until such time as such information or documents otherwise become publicly
available or as it is advised by counsel that any such information or document
is required by law to be disclosed, in which event the party required to make
such disclosure shall advise and consult with the other party reasonably in
advance of such disclosure regarding the information proposed to be disclosed.
In the event of the termination of this Agreement, Hibernia and Peoples shall,
promptly upon request by the other party, either destroy or return any documents
so obtained. The parties hereto expressly acknowledge and agree that the terms
of this Section 11.1 shall supersede any prior agreements relating to the
confidentiality of information received by the parties hereto from each other.
11.2. Hold Harmless. Hibernia will indemnify and hold harmless
each of Peoples and the Bank, each of its directors and officers and each
person, if any who controls Peoples or the Bank within the meaning of the 1933
Act against any losses, claims, damages or liabilities, joint, several or
solidary, to which they or any of them may become subject, under the 1933 Act or
otherwise, insofar as such losses, claims, damages or liabilities (or actions in
respect thereof) arise out of or are based upon an untrue statement or alleged
untrue statement of a material fact contained in the Registration Statement, or
in any amendment or supplement thereto, or arising out of or based upon the
omission or alleged omission to state therein a material fact required to be
stated therein or necessary to make the statements therein not misleading, and
will reimburse each such person for any legal or other expenses reasonably
incurred by such person in connection with investigating or defending any such
action or claim; provided, however, that Hibernia shall not be liable in any
such case to the extent that any such loss, claim, damage or liability (or
action in respect thereof) arises out of or is based upon any untrue statement
or alleged untrue statement or omission or alleged omission made in the
Registration Statement or any such amendment or supplement in reliance upon and
in conformity with information furnished to Hibernia by Peoples or the Bank for
use therein. Promptly after receipt by an indemnified party hereunder of notice
of the commencement of any action, such indemnified party shall, if a claim in
respect thereof is to be made against Hibernia under this Section, notify
Hibernia in writing of the commencement thereof. In case any such action shall
be brought against any indemnified party and it shall notify Hibernia of the
commencement thereof, Hibernia shall be entitled to participate therein, and to
the extent that it shall wish, to assume the defense thereof, with counsel
satisfactory to such indemnified party, and, after notice from Hibernia to such
indemnified party of its election to so assume the defense thereof, Hibernia
shall not be liable to such indemnified party under this Section 11.2 for any
legal expenses of counsel other than that selected by Hibernia as set forth
above or any other expenses subsequently incurred by such indemnified party.
12. Conditions. The consummation of the Merger is conditioned upon:
12.1. Shareholder Approval; Dissenters. Approval of this
Agreement by the required vote of shareholders of Peoples, and exercise and
perfection of dissenters' rights by shareholders owning less than 9.8% of the
Peoples Common Stock.
12.2. Federal Reserve Board and OCC Approvals. Procurement by
Hibernia of the approval of the Federal Reserve Board of the Company Merger and
the Comptroller of the Bank Merger and any and all other transactions
contemplated hereby.
12.3. Other Approvals. Procurement of all other consents and
approvals and satisfaction of all other requirements prescribed by law that are
necessary to the consummation of the transactions contemplated by this
Agreement.
12.4. No Restraining Action. No litigation or proceeding
initiated by any governmental authority shall be pending before any court or
agency that shall present a claim to restrain, prohibit or invalidate the
transactions contemplated hereby and neither Hibernia nor Peoples shall be
prohibited by any order of any court or other governmental authority from
consummating the transactions provided for in this Agreement.
12.5. Opinion of Hibernia Counsel. Peoples and its directors
shall have received an opinion, dated the Closing Date, of counsel for Hibernia,
in form and substance satisfactory to Peoples, as to such matters as Peoples may
reasonably request with respect to the transactions contemplated hereby.
12.6. Opinion of Peoples Counsel. Hibernia, its directors and
its officers who sign the Registration Statement shall have received an opinion,
dated the Closing Date, of Watkins, Ludlam, Winter & Stennis, P.A. for Peoples,
in form and substance satisfactory to Hibernia, which shall cover such matters
as Hibernia may reasonably request with respect to the transactions contemplated
hereby.
12.7. Representations, Warranties and Agreements of Peoples.
Each of the representations, warranties, and agreements of Peoples contained
herein in all material respects shall be true on, or complied with by, the
Closing Date as if made on such date (or on the date when made in the case of
any representation or warranty which specifically relates to an earlier date)
and Hibernia shall have received a certificate signed by the Chairman of the
Board and the President of Peoples, dated the Closing Date, to such effect;
Peoples shall have furnished to Hibernia such other certificates as Hibernia
shall reasonably request in connection with the Closing (as defined in Section
14 hereof), evidencing compliance with the terms hereof and its status, business
and financial condition. Peoples shall have furnished Hibernia with such further
documents or other materials as Hibernia shall have reasonably requested in
connection with the transactions contemplated hereby.
12.8. Representations, Warranties and Agreements of Hibernia.
Each of the representations, warranties and agreements of Hibernia contained
herein in all material respects shall be true on, or complied with by, the
Closing Date as if made on such date (or the date when made in the case of any
representations or warranty which specifically relates to an earlier date) and
Peoples shall have received a certificate signed by the Chief Financial Officer
of Hibernia, dated the Closing Date, to such effect; Hibernia shall have
furnished to Peoples such other certificates as Peoples shall reasonably request
in connection with the Closing, evidencing compliance with the terms hereof and
its status, business and financial condition. Hibernia shall have furnished
Peoples with such further documents or other materials as Peoples shall have
reasonably requested in connection with the transactions contemplated hereby.
12.9. Effective Registration Statement. The Registration
Statement shall have become effective and no stop order suspending the
effectiveness of the Registration Statement shall have been issued and no
proceedings for that purpose shall have been initiated or threatened by the SEC
and Peoples shall have received a certificate to such effect from the officer of
Hibernia designated as its agent for service on the cover page of the
Registration Statement (which certificate may be to the knowledge of such
officer).
12.10. Tax Opinion. Hibernia and Peoples shall have received an
opinion of a nationally recognized public accounting firm satisfactory to
Peoples, which opinion shall be satisfactory in form and substance to Hibernia
and Peoples, to the effect that the Company Merger when consummated in
accordance with the terms hereof will constitute a reorganization within the
meaning of Section 368(a) of the Internal Revenue Code, and that the exchange of
Peoples Common Stock to the extent exchanged for Hibernia Common Stock will not
give rise to gain or loss to the shareholders of Peoples with respect to such
exchange and that the Louisiana income tax treatment to the shareholders of
Peoples will be substantially the same as the federal income tax treatment to
the shareholders of Peoples.
12.11. Listing on New York Stock Exchange. The shares of
Hibernia Common Stock issuable to the holders of Peoples Common Stock in the
Company Merger shall have been approved for listing on the New York Stock
Exchange, Inc. on or before the Closing Date, subject to official notice of
issuance.
12.12. Fairness Opinion. Peoples shall have received a letter
from the investment advisor listed on Schedule 12.12 hereto (which Schedule
shall be submitted to Hibernia within 30 days after the date hereof) dated
within five days of the scheduled date of mailing of the Proxy Statement to its
shareholders, and updated to within five days of the Closing Date to the effect
that the terms of the Company Merger are fair to its shareholders from a
financial point of view.
12.13. Employment Arrangement. As of the Effective Date,
Hibernia and/or HNB shall have entered into an employment agreement with Ralph
Williams on terms mutually acceptable to Mr. Williams and Hibernia.
12.14. Assertion of Conditions. A failure to satisfy any of the
requirements set forth in Section 12.5, 12.8, 12.11, 12.12 or 12.13 shall only
constitute conditions to consummation of the Company Merger if asserted by
Peoples and a failure to satisfy any of the requirements set forth in Section
12.6 or 12.7 shall only constitute conditions to consummation of the Company
Merger if asserted by Hibernia.
13. Termination. This Agreement may be terminated prior to the Closing
Date, either before or after its approval by the shareholders of the parties
hereto, in any of the following events:
13.1. Mutual Consent. By the mutual consent of the parties
hereto, if the Board of Directors of each party so determines by vote of a
majority of the members of its entire Board.
13.2. Breach of Representation, Warranty or Covenant. By either
party hereto, in the event of a breach by the other party (a) of any covenant or
agreement contained herein or (b) of any representation or warranty herein, if
(i) the facts constituting such breach reflect a material and adverse change in
the financial condition, results of operations, business, or prospects taken as
a whole, of the breaching party, which in either case cannot be or is not cured
within 60 days after written notice of such breach is given to the party
committing such breach, or (ii) in the event of a breach of a warranty or
covenant, such breach results in a material increase in the cost of the
non-breaching party's performance of this Agreement.
13.3. Passage of Time; Inability to Satisfy Conditions. By
either party hereto, in the event that (i) the Company Merger is not consummated
by March 31, 1999, or (ii) any condition to Closing cannot be satisfied by March
31, 1999 and will not be waived by the party or parties entitled to waive it.
13.4. Failure to Obtain Regulatory Approval. By either party
hereto, at any time after the Federal Reserve Board, the Federal Reserve Bank or
the Comptroller has denied any application for any approval or clearance
required to be obtained as a condition to the consummation of the Company Merger
and the time period for all appeals or requests for reconsideration thereof has
run.
13.5. Failure to Obtain Shareholder Approval. By either party
hereto, if the Company Merger is not approved by the required vote of
shareholders of Peoples.
13.6. Material Adverse Change. By Peoples, if a material adverse
change as described in Section 8.8 of this Agreement occurs, and by Hibernia, if
a material adverse change as described in Section 7.7 hereof occurs, after the
date hereof and prior to the Closing.
13.8. Fairness Opinion. By Peoples, if it shall not have
received a letter from the investment advisor listed on Schedule 12.12 hereto
dated within five days of the scheduled date of mailing of its proxy statement
to its shareholders, and updated to within five days of the Closing Date, to the
effect that the terms of the Company Merger are fair to its shareholders from a
financial point of view.
13.9. Due Diligence. By Hibernia, within 30 days after the date
hereof, if its due diligence review of Peoples results in a discloses material
liabilities, obstacles to the Company Merger or other circumstances that are not
disclosed in this Agreement or the Schedules hereto and that, in the good faith
judgment of Hibernia, materially alter the economic basis for, or feasibility
of, the Merger; provided, however, that the sole remedy that Hibernia shall have
in that event pursuant to this Section 13.9 shall be the termination of this
Agreement.
14. Closing and Effective Date. The closing of the Company Merger (the
"Closing") shall take place at the office of Hibernia at 313 Carondelet Street,
New Orleans, Louisiana, at 11:00 a.m. local time, or at such other place or time
as shall be mutually agreeable to the parties hereto, on the first business day
occurring after the last to occur of: (i) the date that falls 15 days after the
date of the order of the Federal Reserve Board approving the Company Merger
pursuant to the Bank Holding Company Act; (ii) the date that falls 15 days after
the date of the order of the Comptroller approving the merger of the Bank with
and into HNB pursuant to the Bank Merger Act; and (iii) the date that falls 5
days after the date on which the last meeting of shareholders called to approve
this Agreement is held; or such later date within 60 days of such date as may be
agreed upon between the parties hereto (the date and time of the Closing being
referred to herein as the "Closing Date"). Immediately upon consummation of the
Closing, or on such other later date as the parties hereto may agree, the
Company Merger Agreement shall be certified, executed, acknowledged and
delivered to the Secretary of State of the State of Louisiana (the "Secretary")
for filing pursuant to and in accordance with the provisions of Section 12:112
of the LBCL. The Company Merger shall become effective as of the date and time
of issuance by the Secretary of a certificate of merger relating to the Company
Merger (such date and time being referred to herein as the "Effective Date").
15. Survival and Termination of Representations, Warranties and
Covenants.
15.1. Except as otherwise provided in this Section 15, the
representations, warranties and covenants contained in this Agreement shall
terminate as of the earlier of the Effective Date or the termination of this
Agreement. Upon termination of such representations, warranties and covenants,
such provisions shall be of no further force or effect, and no party hereto
shall have any legal right to redress, whether for breach of contract or
otherwise, as a result of a breach of any such provision.
15.2. The provisions and agreements set forth in Sections 3, 5,
9.12 and 11 and the last sentence of Section 8.3 hereof shall survive the
Closing, if the Closing occurs, for the benefit of the shareholders, directors
and officers of Peoples who are the intended beneficiaries of such provisions.
15.3. The provisions of Section 11 and liabilities for a breach
of the provisions of Sections 9.2 or 9.13 shall survive the termination of this
Agreement if this Agreement terminates without the Closing or the Company Merger
having occurred, in which event liability for a breach of Section 9.2 or Section
9.13 shall survive the termination of the Agreement for a period of 180 days
following the date on which the Agreement terminates. Nevertheless, no party to
this Agreement shall have a legal right to redress or cause of action for a
breach of Section 9.2 except in those circumstances in which such breach
directly resulted in the termination of the Agreement.
15.4. In consideration of the mutual benefits and agreements
contained in this Agreement, each of the parties hereto, on behalf of itself and
its successors and assigns, hereby irrevocably waives any right or cause of
action which otherwise would survive in the absence of this Section 15.
16. Amendment; Waivers. To the extent permitted under applicable law,
prior to the Closing Date any provision of this Agreement may be amended or
modified at any time, either before or after its approval by the shareholders of
the parties hereto, (i) by an agreement in writing among the parties hereto
approved by their respective Boards of Directors and executed in the same manner
as this Agreement, and (ii) as provided in Section 12:112 of the LBCL. Except
with respect to any required shareholder or regulatory approval, each party
hereto, by written instrument signed by a duly authorized officer of such party,
may at any time (whether before or after approval of this Agreement by the
shareholders of Hibernia or Peoples) extend the time for the performance of any
of the obligations or other acts of the other party hereto and may waive (i) any
inaccuracies of the other party in the representations or warranties contained
in this agreement or any document delivered pursuant hereto, (ii) compliance
with any of the covenants, undertakings, or agreements of the other party, or
satisfaction of any of the conditions precedent to its obligations, contained
herein or (iii) the performance by the other party of any of its obligations set
out herein or therein; provided that no such waiver executed after approval of
this Agreement by the shareholders of Hibernia or Peoples shall change the
number of shares of Hibernia Common Stock into which shares of Peoples Common
Stock will be converted by the Merger.
17. Execution in Counterparts. This Agreement may be executed in
counterparts, each of which shall be deemed to constitute an original. Each such
counterpart shall become effective when one counterpart has been signed by each
party hereto.
18. Governing Law. This Agreement shall be governed by, and interpreted
in accordance with, the laws of the State of Louisiana applicable to agreements
made and entirely to be performed within such State, except as federal law may
be applicable.
19. Expenses. Each party hereto will bear all expenses incurred by it in
connection with this Agreement and the transactions contemplated hereby,
including the fees, expenses and disbursements of its counsel and auditors,
provided that printing expenses shall be borne by Hibernia.
20. No Assignment. Prior to the Effective Date, neither party hereto may
assign any of its rights or obligations under this Agreement to any other person
without the prior written consent of the other bank holding company that is a
party hereto, including any transfer or assignment by operation of law.
21. Notices. All notices or other communications which are required or
permitted hereunder shall be in writing and sufficient if delivered personally
or sent by registered or certified mail, postage prepaid, to the Chief Executive
Officer of each party hereto at the address of such party set forth in the
preamble to this Agreement and shall be deemed to have been given as of the date
so personally delivered or mailed. A copy of all notices or other communications
directed to Hibernia shall be sent to:
Hibernia Corporation
313 Carondelet Street
New Orleans, Louisiana 70130
Attention: Corporate Law Division
and a copy of all notices or other communications directed to Peoples shall be
sent to:
Ralph Williams
President
Peoples Holding Corporation
618 Main Street
Minden, Louisiana 71055-3327
with a copy to:
Carl J. Chaney, Esq.
Watkins, Ludlam, Winter & Stennis, P.A.
633 North State Street
Jackson, MS 39202
22. Headings. The headings in this Agreement are inserted for
convenience of reference only and are not intended to be a part of or to affect
the meaning or interpretation of this Agreement.
23. Entire Agreement. This Agreement and the Schedules and Exhibits
hereto supersede any and all oral or written agreements and understandings
heretofore made relating to the subject matter hereof and contain the entire
agreement of the parties relating to the subject matter hereof. The terms and
conditions of this Agreement shall inure to the benefit of and be binding upon
the parties hereto, and their respective successors. Nothing in this Agreement
or in the Company Merger Agreement is intended to or shall be construed to
confer upon or to give any person other than the parties hereto any rights,
remedies, obligation or liabilities under or by reason of this Agreement except
as expressly provided herein.
IN WITNESS WHEREOF, the parties hereto have caused this instrument to be
executed in counterparts by their duly authorized officers and their corporate
seals to be hereunto affixed, all as of the day and year first above written.
Hibernia Corporation
Stephen A. Hansel
President and Chief Executive
Officer
Attest:
Patricia C. Meringer
Secretary
Hibernia National Bank
Stephen A. Hansel
President and Chief Executive
Officer
Attest:
Patricia C. Meringer
Secretary
Peoples Holding Corporation
By:________________________
Ralph S. Williams
President and Chief Executive
Officer
Attest:
Secretary
Peoples Bank and Trust Company
By:________________________
Ralph S. Williams
President and Chief Executive
Officer
Attest
Secretary
APPENDIX B
FORM OF OPINION OF PROFESSIONAL BANK SERVICES, INC.
April 24, 1998
Board of Directors
Peoples Holding Corporation
618 Main Street
Minden, Louisiana 71058
Dear Members of the Board:
You have requested our opinion as investment bankers as to the fairness, from a
financial perspective, to the common shareholders of Peoples Holding
Corporation, Minden, Louisiana (the "Company") of the proposed merger of the
Company with Hibernia Corporation, New Orleans, Louisiana, ("Hibernia"). In the
proposed merger, Company shareholders will receive an aggregate of 3,562,367
Hibernia common shares for all 374,986 Company common shares outstanding as
further defined in the Agreement and Plan of Merger between Hibernia and the
Company (the "Agreement"). On April 23, 1998, the proposed consideration to be
received represents an aggregate value of $76,813,538 or $204.84 per Company
common share based on the closing Hibernia common stock price of $21.56 as
quoted on the New York Stock Exchange.
Professional Bank Services, Inc. ("PBS") is a bank consulting firm and as part
of its investment banking business is continually engaged in reviewing the
fairness, from a financial perspective, of bank acquisition transactions and in
the valuation of banks and other businesses and their securities in connection
with mergers, acquisitions, estate settlements and other purposes. We are
independent with respect to the parties of the proposed transaction.
For purposes of this opinion, PBS performed a review and analysis of the
historic performance of the Company and its wholly owned subsidiaries, contained
in: (i) December 31, 1996 and December 31, 1997 Consolidated Reports of
Condition and Income filed by the Bank with the Federal Reserve; (ii) December
31, 1995, 1996, and 1997 audited annual reports of the Company; and (iii)
September 30, 1997 Uniform Bank Performance Report of the Bank. We have reviewed
and tabulated statistical data regarding the loan portfolio, securities
portfolio and other performance ratios and statistics. Financial projections
were prepared and analyzed as well as other financial studies, analyses and
investigations as deemed relevant for the purposes of this opinion. In review of
the aforementioned information, we have taken into account our assessment of
general market and financial conditions, our experience in other transactions,
and our knowledge of the banking industry generally.
As part of preparing this Fairness Opinion, PBS reviewed historical financial
information of Hibernia contained in: December 31, 1995, 1996 and 1997 Annual
Reports; annual financial statements filed with the Securities and Exchange
Commission for the years ended 1995, 1996 and 1997; quarterly financial
statements filed with the Securities and Exchange Commission for 1997; the
Uniform Bank Performance Report as of September 30, 1997 and the historical
common stock trading activity of Hibernia.
We have not compiled, reviewed or audited the financial statements of the
Company or Hibernia, nor have we independently verified any of the information
reviewed; we have relied upon such information as being complete and accurate in
all material respects. We have not made independent evaluation of the assets of
the Company or Hibernia.
Based on the foregoing and all other factors deemed relevant, it is our opinion
as investment bankers, that, as of the date hereof, the consideration proposed
to be received by the shareholders of the Company under the Agreement is fair
and equitable from a financial perspective.
Very truly yours,
/s/ PROFESSIONAL BANK SERVICES, INC.
Professional Bank Services, Inc.
APPENDIX C
CERTAIN PROVISIONS OF LOUISIANA LAW RELATING TO
THE RIGHTS OF DISSENTING SHAREHOLDERS
A. Except as provided in subsection B of this section, if a corporation
has, by vote of its shareholders, authorized a sale, lease or exchange of all of
its assets, or has, by vote of its shareholders, become a party to a merger or
consolidation, then, unless such authorization or action shall have been given
or approved by at least eighty percent of the total voting power, a shareholder
who voted against such corporate action shall have the right to dissent. If a
corporation has become a party to a merger pursuant to R.S. 12:112(H), the
shareholders of any subsidiaries party to the merger shall have the right to
dissent without regard to the proportion of the voting power which approved the
merger and despite the fact that the merger was not approved by vote of the
shareholders of any of the corporations involved.
B. The right to dissent provided by this Section shall not exist in the
case of:
(1) A sale pursuant to an order of a court having jurisdiction
in the premises.
(2) A sale for cash on terms requiring distribution of all or
substantially all of net proceeds to the shareholders in accordance with their
respective interests within one year after the date of the sale.
(3) Shareholders holding shares of any class of stock which, at
the record date fixed to determine shareholders entitled to receive notice of
and to vote at the meeting of shareholders at which a merger or consolidation
was acted on, were listed on a national securities exchange, unless the articles
of the corporation issuing such stock provide otherwise or the shares of such
shareholders were not converted by the merger or consolidation solely into
shares of the surviving or new corporation.
C. Except as provided in the last sentence of this subsection, any
shareholder electing to exercise such right of dissent shall file with the
corporation, prior to or at the meeting of shareholders at which such proposed
corporate action is submitted to a vote, a written objection to such proposed
corporate action, and shall vote his shares against such action. If such
proposed corporate action be taken by the required vote, but by less than eighty
percent of the total voting power, and the merger, consolidation or sale, lease
or exchange of assets authorized thereby be effected, the corporation shall
promptly thereafter give written notice thereof, by registered mail, to each
shareholder who filed such written objection to, and voted his shares against,
such action, at such shareholder's last address on the corporation's records.
Each such shareholder may, within twenty days after the mailing of such notice
to him, but not thereafter, file with the corporation a demand in writing for
the fair cash value of his shares as of the day before such vote was taken;
provided that he state in such demand the value demanded, and a post office
address to which the reply of the corporation may be sent, and at the same time
deposit in escrow in a chartered bank or trust company located in the parish of
the registered office of the corporation, the certificates representing his
shares, duly endorsed and transferred to the corporation upon the sole condition
that said certificates shall be delivered to the corporation upon payment of the
value of the shares determined in accordance with the provisions of this
section. With his demand the shareholder shall deliver to the corporation, the
written acknowledgment of such bank or trust company that it so holds his
certificates of stock. Unless the objection, demand and acknowledgment aforesaid
be made and delivered by the shareholder within the period above limited, he
shall conclusively be presumed to have acquiesced in the corporate action
proposed or taken. In the case of a merger pursuant to R.S. 12:112(H), the
dissenting shareholder need not file an objection with the corporation nor vote
against the merger, but need only file with the corporation, within twenty days
after a copy of the merger certificate was mailed to him, a demand in writing
for the cash value of his shares as of the day before the certificate was filed
with the secretary of state, state in such demand the value demanded and a post
office address to which the corporation's reply may be sent, deposit the
certificates representing his shares in escrow as hereinabove provided, and
deliver to the corporation with his demand the acknowledgment of the escrow bank
or trust company as herein-above prescribed.
D. If the corporation does not agree to the value so stated and
demanded, or does not agree that a payment is due, it shall, within twenty days
after receipt of such demand and acknowledgment, notify in writing the
shareholder, at the designated post office address, of its disagreement, and
shall state in such notice the value it will agree to pay if any payment should
be held to be due; otherwise it shall be liable for, and shall pay to the
dissatisfied shareholder, the value demanded by him for his shares.
E. In case of disagreement as to such fair cash value, or as to whether
any payment is due, after compliance by the parties with the provisions of
subsections C and D of this section, the dissatisfied shareholder, within sixty
days after receipt of notice in writing of the corporation's disagreement, but
not thereafter, may file suit against the corporation, or the merged or
consolidated corporation, as the may be, in the district court of the parish in
which the corporation or the merged or consolidated corporation, as the case may
be, has its registered office, praying the court to fix and decree the fair cash
value of the dissatisfied shareholder's shares as of the day before such
corporate action complained of was taken, and the court shall, on such evidence
as may be adduced in relation thereto, determine summarily whether any payment
is due, and, if so, such cash value, and render judgment accordingly. Any
shareholder entitled to file such suit may, within such sixty-day period but not
thereafter, intervene as a plaintiff in such suit filed by another shareholder,
and recover therein judgment against the corporation for the fair cash value of
his shares. No order or decree shall be made by the court staying the proposed
corporate action, and any such corporate action may be carried to completion
notwithstanding any such suit. Failure of the shareholder to bring suit, or to
intervene in such a suit, within sixty days after receipt of notice of
disagreement by the corporation shall conclusively bind the shareholder (1) by
the corporation's statement that no payment is due, or (2) if the corporation
does not contend that no payment is due to accept the value of his shares as
fixed by the corporation in its notice of disagreement.
F. When the fair value of the shares has been agreed upon between the
shareholder and the corporation, or when the corporation has become liable for
the value demanded by the shareholder because of failure to give notice of
disagreement and of the value it will pay, or when the shareholder has become
bound to accept the value the corporation agrees is due because of his failure
to bring suit within sixty days after receipt of notice of the corporation's
disagreement, the action of the shareholder to recover such value must be
brought within five years from the date the value was agreed upon, or the
liability of the corporation became fixed.
G. If the corporation or the merged or consolidated corporation, as the
case may be, shall, in its notice of disagreement, have offered to pay to the
dissatisfied shareholder on demand an amount in cash deemed by it to be the fair
cash value of his shares, and if, on the institution of a suit by the
dissatisfied shareholder claiming an amount in excess of the amount so offered,
the corporation, or the merged or consolidated corporation, as the case may be,
shall deposit in the registry of the court, there to remain until the final
determination of the cause, the amount so offered, then, if the amount finally
awarded such shareholder, exclusive of interest and costs, be more than the
amount offered and deposited as aforesaid, the costs of the proceeding shall be
taxed against the corporation, or the merged or consolidated corporation, as the
case may be; otherwise the costs of the proceeding shall be taxed against such
shareholder.
H. Upon filing a demand for the value of his shares, the shareholder
shall cease to have any of the rights of a shareholder except the rights
accorded by this section. Such a demand may be withdrawn by the shareholder at
any time before the corporation gives notice of disagreement, as provided in
subsection D of this section. After such notice of disagreement is given,
withdrawal of a notice of election shall require the written consent of the
corporation. If a notice of election is withdrawn, or the proposed corporate
action is abandoned or rescinded, or a court shall determine that the
shareholder is not entitled to receive payment for his shares, or the
shareholder shall otherwise lose his dissenter's rights, he shall not have the
right to receive payment for his shares, his share certificates shall be
returned to him (and, on his request, new certificates shall be issued to him in
exchange for the old ones endorsed to the corporation), and he shall be
reinstated to all his rights as a shareholder as of the filing of his demand for
value, including any intervening preemptive rights, and the right to payment of
any intervening dividend or other distribution, or, if any such rights have
expired or any such dividend or distribution other than in cash has been
completed, in lieu thereof, at the election of the corporation, the fair value
thereof in cash as determined by the board as of the time of such expiration or
completion, but without prejudice otherwise to any corporate proceedings that
may have been taken in the interim.
APPENDIX D
FORM OF TAX OPINION OF ERNST & YOUNG LLP - PAGE 1
May __, 1998
Hibernia Corporation
313 Carondelet Street
New Orleans, Louisiana 70130
Peoples Holding Corporation
618 Main Street
Minden, Louisiana 71055-3327
Dear Sir or Madam:
This letter is in response to your request that we provide you with our opinion
concerning certain federal income tax consequences which would arise from
consummation of the proposed merger of Peoples Holding Corporation ("Peoples")
with and into Hibernia Corporation ("Hibernia") (the "Company Merger"), and the
proposed merger of Peoples Bank and Trust Company ("Bank") with and into
Hibernia National Bank ("HNB") (the "Bank Merger"). (Hereinafter, the Company
Merger and the Bank Merger are referred to collectively as the "Proposed
Mergers.")
In rendering this opinion, we have relied upon the facts, summarized below, as
they have been presented to us orally by the management of Hibernia and verified
in: the Statements of Facts and Representations dated ___ __, ____ provided by
the respective managements of Peoples, Bank, Hibernia, and HNB; the Agreement
and Plan of Merger made and entered into by and between Peoples and Hibernia as
of February 10, 1998 (the "Agreement"); the Agreement to Merge between Bank and
HNB (the "Bank Plan of Merger"); and the Registration Statement (Form S-4), as
declared effective by the Securities and Exchange Commission on ___ __, ____ and
containing the Proxy Statement - Prospectus of Peoples and Hibernia dated ___
__, ____ ("Prospectus"). (These are sometimes hereinafter referred to
collectively as "Documents.")
You have represented to us that the facts contained in the Documents provide an
accurate and complete description of the facts and circumstances concerning the
Proposed Mergers. We have made no independent investigation of the factual
matters and circumstances and, therefore, have relied upon the facts and
representations in the Documents for purposes of this letter. Any changes to the
facts or Documents may affect the conclusions stated herein.
We understand that reference to Ernst & Young LLP and our opinion is included in
the Prospectus relating to the issuance of Hibernia Common Stock in connection
with the Proposed Mergers and the special meeting of the Peoples shareholders
with respect thereto. We consent to such reference in the Prospectus under the
captions "Summary," "Proposed Merger-Representations and Warranties; Conditions
to the Merger; Waiver" and "--Material Tax Consequences." We also understand
that the form of this letter is included as an appendix to the Form S-4
Registration Statement and the Prospectus. We consent to such inclusion.
STATEMENT OF FACTS
Peoples is a corporation organized and existing under the laws of the State of
Louisiana, and is a bank holding company within the meaning of the Bank Holding
Company Act of 1956, as amended. As of December 31, 1997, the authorized capital
stock of Peoples was 420,000 shares of common stock, of $10.00 par value
("Peoples Common Stock"). As of December 31, 1997, 383,243 shares of Peoples
Common Stock had been issued, 374,986 shares of Peoples Common Stock were
outstanding, and 8,257 shares of Peoples Common Stock were held in Peoples'
treasury. The shares of Peoples Common Stock are held by approximately (number)
shareholders. There are no options, warrants, subordinated rights or other
rights to purchase Peoples Common Stock outstanding as of the date hereof.
Bank is principally engaged in the banking business. The presently authorized
capital stock of Bank is 141,500 shares of common stock, par value $10.00 per
share, of which 138,254 were issued and outstanding and held by Peoples as of
the date hereof (referred to as "Bank Common Stock").
Hibernia is a bank holding company organized and existing under the laws of the
State of Louisiana. The presently authorized capital stock of Hibernia is
300,000,000 shares, consisting of 100,000,000 shares of preferred stock, no par
value, and 200,000,000 shares of Class A voting common stock, no par value (the
Class A voting common stock being referred to hereinafter as "Hibernia Common
Stock"). As of December 31, 1997, 2,000,000 shares of Hibernia's preferred stock
were issued and outstanding, 133,000,857 shares of Hibernia Common Stock were
outstanding, and no shares of Hibernia Common Stock were held in Hibernia's
treasury. As of December 31, 1997, Hibernia has the following existing options,
warrants, calls or commitments of any kind obligating Hibernia to issue any
share of its capital stock or any other security of which it is or will be the
issuer: Hibernia has authorized or reserved 1,968,750 shares of Hibernia Common
Stock for issuance under its 1987 Stock Option Plan, pursuant to which options
covering 1,383,482 shares of Hibernia Common Stock were outstanding as of
December 31, 1997; 7,880,703 (as adjusted) shares of Hibernia Common Stock for
issuance under its Long-Term Incentive Plan, pursuant to which options covering
5,745,660 shares of Hibernia Common Stock were outstanding as of December 31,
1997; 1,000,000 shares of Hibernia Common Stock for issuance under its 1993
Directors' Stock Option Plan, pursuant to which options covering 290,000 shares
of Hibernia Common Stock are outstanding as of December 31, 1997; 24 shares of
Hibernia Common Stock are available for issuance pursuant to Hibernia's Dividend
Reinvestment and Stock Purchase Plan; and warrants covering 213,176 shares of
Hibernia Common Stock are outstanding. On January 1, 1998, Hibernia completed a
merger with Northwest Bancshares of Louisiana, Inc. which resulted in the
issuance of 1,508,019 shares of Hibernia Common Stock. On ___ __, ____, Hibernia
completed a merger with ArgentBank which resulted in the issuance of (number)
shares of Hibernia Common Stock. On ___ __, ____, Hibernia completed a merger
with Firstshares of Texas, Inc. which resulted in the issuance of (number) of
shares Hibernia Common Stock.
Additionally, on March 14, 1995, Hibernia and its Board of Directors authorized
an employee stock ownership plan ("ESOP") to be funded with $30.0 million of
Hibernia Common Stock. The $30.0 million purchase of Hibernia Common Stock will
be funded through a loan from HNB. Hibernia Common Stock for the ESOP will be
purchased as it becomes available on the open market at market prices, or in
private negotiated transactions, other than from former shareholders of Peoples
Common Stock, at such prices as may be agreed by the parties to the transaction,
using funds drawn down on the loan as needed. At December 31, 1997, (number)
shares have been acquired. Hibernia Common Stock is traded on the New York Stock
Exchange.
HNB is a nationally chartered bank engaged principally in the banking business
in the state of Louisiana. HNB is a wholly owned subsidiary of Hibernia.
BUSINESS PURPOSE
The management of Hibernia has represented to us that Hibernia desires to
consummate the Proposed Mergers in order to improve its presence in the
Louisiana market. As discussed in the Prospectus under the caption, "Proposed
Merger-Background of and Reasons for Merger," the Peoples Board of Directors
believes the shareholders of Peoples will benefit from being part of a larger
banking entity, the stock of which is publicly traded.
PROPOSED TRANSACTIONS
In accordance with the above-stated business purpose, the following transactions
have been proposed:
1. After all necessary regulatory and shareholder approvals have been granted,
there will be simultaneous mergers (i.e., the Proposed Mergers) of Peoples with
and into Hibernia in accordance with the Louisiana Business Corporation Law
("LBCL"), and Bank with and into HNB in accordance with the provisions of Bank
Merger Act, 12 U.S.C. Sections 1828 et. seq. and 12 U.S.C. Section 215a ("Bank
Merger Act"). Upon the completion of the Company Merger, Hibernia will cause the
Bank Merger to occur.
2. In the Company Merger, Hibernia will acquire all of the assets and assume all
of the liabilities of Peoples solely in exchange for Hibernia Common Stock
(except for cash for fractional shares and dissenters, if any). As a result of
the Company Merger, each share of the issued and outstanding Peoples Common
Stock shall be converted into and become the number of shares of Hibernia Common
Stock determined in accordance with the exchange rate (the "Exchange Rate"). The
Exchange Rate shall be the number that is obtained by the following formula:
($69,375,000 , 375,000) , the Average Market Price of Hibernia Common Stock (as
defined below); provided, however, that in no event shall the Exchange Rate be
greater than 10.5 shares of Hibernia Common Stock for each share of Peoples
Common stock, and in no event shall the Exchange Rate be less than 9.5 shares of
Hibernia Common Stock for each share of Peoples Common Stock.
The Average Market Price of Hibernia Common Stock is defined as the average of
the closing price of one share of Hibernia Common Stock for ten business days
preceding the last trading day immediately prior to the Closing Date as reported
in The Wall Street Journal.
3. Holders of shares of Peoples Common Stock outstanding immediately prior to
the effective date of the Company Merger shall cease to be, and shall have no
rights as, shareholders of Peoples after the Company Merger.
4. In the Bank Merger, HNB will acquire all the assets and assume all of the
liabilities of Bank in constructive exchange for Hibernia Common Stock. As a
result of the Bank Merger, each share of the issued and outstanding Bank Common
Stock shall cease to be outstanding and will be canceled. No additional shares
of Hibernia Common Stock will actually be issued, nor will shares of HNB Common
Stock be issued in the Bank Merger.
5. No fractional shares will be issued. Each holder of Peoples Common Stock who
would otherwise have been entitled to receive a fraction of a share of Hibernia
Common Stock shall receive in lieu thereof, cash (without interest) in an amount
equal to such fractional part of a share multiplied by the Average Market Price
of Hibernia Common Stock as defined above.
6. If the transaction is approved by shareholders holding less than 80 percent
of the shares of Peoples Common Stock, then by following certain statutory
procedures, shareholders of Peoples Common Stock may exercise dissenter's rights
entitling them to receive in cash the value of their respective Peoples Common
Stock in lieu of receiving Hibernia Common Stock in the Company Merger.
REPRESENTATIONS
For purposes of our evaluation, we have received from the respective managements
of Peoples, Bank, Hibernia and HNB, Statements of Facts and Representations,
dated ___ __, ____, as set forth below. References to the "Code" are to the
Internal Revenue Code of 1986, as amended.
The following representations have been made in connection with the Company
Merger:
(a) The fair market value of the Hibernia Common Stock to be received by each
shareholder of Peoples Common Stock will be approximately equal to the fair
market value of the Peoples Common Stock surrendered in the exchange.
(b) Hibernia has no plan or intention to offer cash or other "non-qualified
consideration" to the shareholders of Peoples and the shareholders of Peoples
have no plan or intention to sell, exchange, or otherwise dispose of a number of
shares of Hibernia Common Stock received in the transaction to Hibernia or a
corporation related to Hibernia that would reduce the Peoples shareholders'
ownership of Hibernia Common Stock to a number of shares having a value, as of
the date of the transaction, of less than 50 percent of the value of all the
formerly outstanding stock of Peoples as of the same date. For purposes of this
representation, any shares of Peoples Common Stock surrendered by dissenters, or
exchanged for cash in lieu of fractional shares of Hibernia Common Stock, will
be treated as outstanding on the date of the transaction. Moreover,
distributions by Peoples in contemplation of the Proposed Mergers and shares of
Peoples Common Stock and shares of Hibernia Common Stock held by former Peoples
shareholders and otherwise sold, redeemed, or disposed of to Hibernia or a
related corporation, prior to February 10, 1998, in contemplation of this
transaction, subsequent to that date, or subsequent to this transaction will be
considered in making this representation.
(c) Hibernia has no plan or intention to reacquire any of its Common Stock
issued in the Company Merger other than to acquire a nominal amount of shares of
Common Stock that may be acquired in ordinary business transactions (including,
but not limited to, open market purchases in brokers' transactions).
(d) Hibernia has no plan or intention to sell or otherwise dispose of any of the
assets of Peoples acquired in the transaction except for dispositions made in
the ordinary course of business.
(e) Any liabilities of Peoples assumed by Hibernia and any liabilities to which
the transferred assets of Peoples are subject were incurred by Peoples in the
ordinary course of its business.
(f) Following the transaction, Hibernia will continue, substantially unchanged,
the business of Peoples as operated, prior to the Proposed Mergers, through
Peoples' subsidiary (Bank) which will be merged with and into HNB.
(g) Except for expenses relating to the registration of the Hibernia Common
Stock and certain proxy printing and mailing expenses to be paid solely by
Hibernia, which are directly related to the Proposed Mergers in accordance with
the guidelines established in Revenue Ruling 73-54, 1973-1 C.B. 187, Hibernia,
Peoples, and the shareholders of Peoples will pay their respective expenses, if
any, incurred in connection with the transactions.
(h) There is no intercorporate indebtedness existing between Peoples and its
affiliates on the one hand and Hibernia and its affiliates on the other hand
which was issued, acquired, or will be settled at a discount.
(i) No two parties to the transaction are investment companies as defined in
Section 368(a)(2)(F)(iii) and (iv) of the Code.
(j) Peoples is not under the jurisdiction of a court in a Title 11 or similar
case within the meaning of Section 368(a)(3)(A) of the Code.
(k) The fair market value of the assets of Peoples to be transferred to Hibernia
will equal or exceed the sum of the liabilities assumed by Hibernia plus the
amount of liabilities, if any, to which the transferred assets are subject.
(l) The payment of cash in lieu of fractional shares of Hibernia Common Stock is
solely for the purpose of avoiding the expense and inconvenience to Hibernia of
issuing fractional shares and does not represent separately bargained for
consideration. The total cash consideration that will be paid in the transaction
to the Peoples shareholders instead of issuing fractional shares of Hibernia
will not exceed one percent of the total consideration that will be issued in
the transaction to the Peoples shareholders in exchange for their shares of
Peoples Common Stock. The fractional share interests of each holder of Peoples
Common Stock will be aggregated, and no Peoples shareholder will receive cash in
an amount equal to or greater than the value of one full share of Hibernia
Common Stock for its Peoples Common Stock.
(m) None of the compensation received by any shareholder-employees of Peoples or
its affiliates will be separate consideration for, or allocable to, any of their
shares of Peoples Common Stock; none of the shares of Hibernia Common Stock
received by any shareholder-employees will be separate consideration for, or
allocable to, any employment agreement; and the compensation paid to any
shareholder-employees will be for services actually rendered and will be
commensurate with amounts paid to third parties bargaining at arm's-length for
similar services.
(n) The Company Merger will qualify as a statutory merger under the LBCL.
(o) The shareholders of Peoples (immediately before the proposed transaction)
receiving shares of Hibernia Common Stock will not own (immediately after the
proposed transaction) more than 50 percent of the fair market value of Hibernia
Common Stock.
The following representations have been made in connection with the Bank Merger:
(aa) No additional Hibernia Common Stock will be issued or exchanged in the Bank
Merger. No HNB Common Stock will be issued or exchanged in the Bank Merger.
(bb) Hibernia has no plan or intention to offer cash or other "non-qualified
consideration" to the shareholder of Bank and the shareholder of Bank has no
plan or intention to sell, exchange or otherwise dispose of a number of shares
of Hibernia Common Stock constructively received to Hibernia or a corporation
related to Hibernia in the transaction that would reduce the Bank shareholder's
constructive ownership of Hibernia Common Stock to a number of shares having a
value, as of the date of the transaction, of less than 50 percent of the value
of all of the formerly outstanding Bank Common Stock as of the same date. For
purposes of this representation, any shares of Bank Common Stock constructively
exchanged with Hibernia or a corporation related to Hibernia for cash or other
property, surrendered by dissenters, or exchanged for cash in lieu of fractional
shares of HNB Common Stock will be treated as outstanding Bank Common Stock on
the date of the transaction. Moreover, distributions by Peoples in contemplation
of the Proposed Mergers and shares of Bank Common Stock and shares of Hibernia
Common Stock held by Bank or its shareholder and otherwise sold, redeemed, or
disposed of to Hibernia or a related corporation, prior to February 10, 1998, in
contemplation of this transaction, or subsequent to this transaction will be
considered in making this representation.
(cc) HNB will acquire at least 90 percent of the fair market value of the net
assets and at least 70 percent of the fair market value of the gross assets held
by Bank immediately prior to the Bank Merger. For purposes of this
representation, amounts paid by Bank to dissenters, Bank assets used to pay its
reorganization expenses, and all redemptions and distributions (except for
regular, normal dividends) made by Bank immediately preceding the transfer, will
be included as assets of Bank held immediately prior to the transaction.
(dd) Prior to the transaction, Hibernia will be in control of HNB within the
meaning of Section 368(c) of the Code wherein "control" is defined to mean the
ownership of stock possessing at least 80 percent of the total combined voting
power of all classes of stock entitled to vote and at least 80 percent of the
total number of shares of all other classes of the corporation.
(ee) Following the transaction, HNB will not issue additional shares of its
Common Stock that would result in Hibernia losing control of HNB within the
meaning of Section 368(c) of the Code.
(ff) Hibernia has no plan or intention to reacquire any of its Common Stock
constructively issued in the Bank Merger.
(gg) Hibernia has no plan or intention to liquidate HNB; to merge HNB into
another corporation; to sell or otherwise dispose of the Common Stock of HNB; or
to cause HNB to sell or otherwise dispose of any of the assets of Bank acquired
in the transaction, except for dispositions made in the ordinary course of
business. As Hibernia consummates other mergers, it is likely that some or all
of the merged banks will be merged with and into HNB. At this time, the
discussion provided under the caption "Summary - Other Pending Transactions for
Hibernia" in the Prospectus provides a complete list of all pending mergers that
are covered by definitive agreements as of ___ __, ____. However, no Common
Stock of HNB will be issued as consideration in any of the pending mergers.
(hh) The liabilities of Bank assumed by HNB and the liabilities to which the
transferred assets of Bank are subject were incurred by Bank in the ordinary
course of its business.
(ii) Following the transaction, HNB will continue the historic business of Bank
or will use a significant portion of Bank's historic business assets in its
business.
(jj) Except for expenses relating to the registration of Hibernia Common Stock
and certain proxy printing and mailing expenses to be paid solely by Hibernia,
which are directly related to the Proposed Mergers in accordance with the
guidelines established in Revenue Ruling 73-54, 1973-1 C.B. 187, Hibernia, HNB,
Bank and the shareholder of Bank will pay their respective expenses, if any,
incurred in connection with the transaction.
(kk) There is no intercorporate indebtedness existing between Hibernia and Bank
and their affiliates or between HNB and Bank that was issued, acquired, or will
be settled at a discount.
(ll) No two parties to the Bank Merger are investment companies as defined in
Section 368(a)(2)(F)(iii) and (iv) of the Code.
(mm) Bank is not under the jurisdiction of a court in a Title 11 or similar case
within the meaning of Section 368(a)(3)(A) of the Code.
(nn) The basis and fair market value of the assets of Bank transferred to HNB
will each equal or exceed the sum of the liabilities assumed by HNB, plus the
amount of liabilities, if any, to which the transferred assets are subject.
(oo) The merger of Bank into HNB will qualify as a statutory merger under the
Bank Merger Act.
TECHNICAL ANALYSIS
Section 368(a)(1)(A) of the Code provides that a reorganization (a "Type A"
reorganization) includes a statutory merger or consolidation. Such a
reorganization can only be achieved by strict compliance with the applicable
corporation laws of the United States or a state or territory of the United
States. A statutory merger occurs wherein one party (the surviving corporation)
to the transaction absorbs the other party whose corporate existence ceases. It
has been represented by the management of Hibernia that the merger of Peoples
with and into Hibernia, wherein Hibernia Common Stock is to be exchanged for
Peoples Common Stock, is to occur as a statutory merger under applicable state
law.
Section 368(a)(2)(D) of the Code provides that the acquisition by one
corporation in exchange for stock of a corporation which is in control of the
acquiring corporation, of substantially all of the properties of another
corporation, shall not disqualify a transaction under Section 368(a)(1)(A) if
(i) no stock of the acquiring corporation is used in the transaction and (ii)
the transaction would have otherwise qualified as a Type A reorganization had
the merger been into the controlling corporation. It has been represented by the
management of Hibernia that the merger of Bank with and into HNB, wherein
Hibernia Common Stock is to be constructively exchanged for Bank Common Stock,
is to occur as a statutory merger under applicable state and national law.
Revenue Procedure 77-37, 1977-2 C.B. 568 (3.01) provides that, for advance
ruling purposes, the "substantially all" requirement of Section 368(a)(2)(D) is
satisfied if there is a transfer of assets representing at least 90 percent of
the fair market value of the net assets and at least 70 percent of the fair
market value of the gross assets held by the transferor corporation immediately
prior to the transfer. Any payments to dissenters and any redemptions and
distributions (except for regular dividend distributions) made by the
corporation immediately preceding the transfer and which are a part of the
transaction will be considered as assets held by the corporation immediately
prior to the transfer. Additionally, the payment of expenses incurred in
connection with the Proposed Mergers is taken into consideration in applying the
"substantially all" test.
In the proposed Bank Merger, it has been represented by the respective
managements of Bank and HNB that HNB will acquire assets representing at least
90 percent of the fair market value of the net assets and 70 percent of the fair
market value of the gross assets of Bank and that, for this purpose, the fair
market value of the net and gross assets of Bank will be determined before
payment by Bank of any expenses incurred by it in connection with the Bank
Merger, before payment to any dissenters to the Bank Merger, and before any
redemptions and distributions (except for regular, normal dividends) made by
Bank immediately preceding the transfer. Based upon the foregoing
representations, the "substantially all" requirement will be met in the Bank
Merger.
Additional Requirements
Sections 1.368-1(b) and 1.368-2(g) of the Income Tax Regulations (the
"Regulations") provide that the following additional requirements must be met
for a transaction to qualify as a reorganization within the meaning of Section
368 of the Code:
(i) "continuity of interest" must be present,
(ii) "continuity of business enterprise" must exist, and
(iii) the transaction must be undertaken for reasons pertaining to the
continuance of the business of a corporation which is a party to the
transaction.
Continuity of Interest
In general, the continuity of interest test requires the owners of the
reorganized entity to receive and retain a meaningful equity in the surviving
entity. See e.g., Pinellas Ice & Cold Storage Co. v. Comm'r, 287 U.S. 462
(1933); Cortland Specialty Company v. Comm'r, 60 F.2d 937 (2d Cir. 1932), cert.
denied, 288 U.S. 599 (1932); Helvering v. Minnesota Tea Co., 296 U.S. 378
(1935).
The Internal Revenue Service (the "Service") has issued final and temporary
regulations (T.D. 8760 and T.D. 8761) providing rules for satisfying the
continuity of interest requirement. These regulations substantially liberalize
the historic rules, generally providing that continuity of interest is satisfied
if a substantial part of the value of the proprietary interest in the target
corporation is preserved in the reorganization. Generally, continuity of
interest is not preserved to the extent that the acquiring corporation acquires
target stock for consideration other than acquiring stock, or if, in connection
with the plan of reorganization, the acquiring stock is redeemed (or purchased
by a related party). In addition, continuity of interest is not preserved to the
extent that, prior to and in connection with the plan of reorganization, the
target (or a related party) acquires the stock with consideration other than
stock of the target, or makes an extraordinary distribution with respect to the
stock. Generally, a related party includes any member of the same affiliated
group (without regard to the exceptions in section 1504(b)) as the acquiring
corporation, or any other corporation where the purchase of the acquiring stock
by such corporation would result in the purchase being a redemption under
section 304(a)(2). Sales by the target shareholders of stock of the acquiror
received in the transaction to unrelated third parties occurring before or after
a reorganization are disregarded.
Based upon our understanding of the facts presented to us orally and as set
forth in the Statements of Facts and Representations dated [date], the Company
Merger and the Bank Merger will satisfy the continuity of interest requirement.
The management of Hibernia has represented that all of the stock of Peoples and
Bank outstanding immediately prior to the merger will be exchanged (actually or
constructively) solely for stock of Hibernia. Hibernia has represented further
that neither Hibernia nor a related person (as defined in Treas. Reg. Section
1.368-1(e)(3)) has any plan or intention, in connection with the plan of
reorganization, to (i) acquire a proprietary interest in Peoples or Bank for
consideration other than stock of Hibernia, or (ii) redeem any of the stock
issued in the transaction. In addition, the management of Peoples and Bank have
represented that neither Peoples, Bank, nor a related person (as defined in
Treas. Reg. Section 1.368-1(e)(3) determined without regard to Treas. Reg.
Section 1.368-1(e)(3)(i)(A)) has any plan or intention, prior to and in
connection with the plan of reorganization, to redeem, acquire, or make an
extraordinary distribution with respect to the stock of either entity.
In Revenue Ruling 68-526, 1968-2 C.B. 156, the Service held that the acquisition
of the assets (and assumption of liabilities) of a parent corporation and its 60
percent owned subsidiary constituted separate tax-free reorganizations when the
transactions occurred pursuant to one plan of reorganization and for valid
business reasons. In Revenue Ruling 76-528, 1976-2 C.B. 103, the Service
clarified that the continuity of interest requirement was met in Revenue Ruling
68-526 with respect to the subsidiary acquisition even when the parent had no
assets other than stock of a subsidiary because, in light of the acquisition of
the parent's assets, and its dissolution pursuant to the plan of reorganization,
the parent's shareholders, in effect, "stepped into the parent's shoes" as the
only qualified parties to receive and continue the stock interest formerly held
by the parent corporation. Although no assurance can be given that the Service
will agree, the rationale of the above Revenue Rulings suggests that the
continuity of interest maintained by the Peoples shareholders in the Company
Merger is relevant in determining whether the continuity of interest requirement
is satisfied in the Bank Merger. See also PLR 9109044 (December 4, 1990) where
the Service, after applying the step transaction doctrine, ruled that a sideways
merger of a Bank Holding Company and its wholly owned banking subsidiary into an
acquiring bank holding company and its banking subsidiary respectively
constituted reorganizations under Section 368(a)(1)(C) and Section 368(a)(2)(D).
In the past, the Service has frequently ruled on certain facts that the
simultaneous mergers of a parent and its wholly-owned subsidiary into an
acquiring parent corporation and its wholly-owned subsidiary, respectively each
qualified as a Section 368(a)(1)(A) reorganization (see e.g., PLR 9111025
(December 14, 1990), 9047015 (August 24, 1990) and 9003053 (October 26, 1989)).
In other rulings involving slightly different facts (i.e., minority shareholders
in the subsidiary), the Service held that the subsidiary mergers were Section
368(a)(1)(A) reorganizations by reason of Section 368(a)(2)(D) (see e.g., PLR
9109044 (December 4, 1990), 8943067 (August 2, 1989) and 8942090 (July 27,
1989)).
Although private letter rulings are not binding on the Service as precedent,
they are cited to illustrate a consistent rulings position. In recent years,
while the Service has declined to rule on whether a transaction qualifies as a
reorganization pursuant to Section 368(a)(1)(A) of the Code (see section
3.01(24) of Rev. Proc. 97-3) it has consistently ruled that the receipt by a
target parent's shareholders of stock of an acquiring corporation will not
prevent a lower tier target's merger from satisfying the continuity of interest
requirement of Section 1.368-1(b) of the Regulations. See, for example, PLR
9237031 (June 16, 1992), PLR 9317027 (January 29, 1993), PLR 9510059 (March 10,
1995) and PLR 9743050 (July 31, 1997).
Continuity of Business Enterprise
Section 1.368-1(b) of the Regulations also provides that a continuity of
business enterprise (as described in Section 1.368-1(d) of the Regulations) is a
requisite to a reorganization. Section 1.368-1(d) of the Regulations (and as
modified by T.D. 8760) provides that continuity of business enterprise requires
that the acquiring corporation either continue the acquired corporation's
historic business or use a significant portion of the acquired corporation's
historic assets in a business. The proposed Bank Merger will meet the continuity
of business enterprise test of Section 1.368-1(d) because, based upon the
representation of the management of HNB, HNB will continue the historic business
of Bank or will use a significant portion of Bank's historic assets in a
business.
Revenue Ruling 85-197, 1985-2 C.B. 120, provides that for purposes of the
continuity of business enterprise requirement, the historic business of a
holding company is the business of its operating subsidiary. Similarly, Revenue
Ruling 85-198, 1985-2 C.B. 120, held that the continuity of business enterprise
requirement was met upon the merger of two bank holding companies where the
business of a former subsidiary of the acquired holding company was continued
through a subsidiary of the acquiring corporation. Accordingly, the continuity
of business enterprise requirement is met with regard to the Company Merger
because Hibernia through its wholly-owned subsidiary HNB, will continue the
banking business indirectly conducted by Peoples.
Business Purpose
Section 1.368-2(g) of the Regulations provides that a reorganization must be
undertaken for reasons germane to the continuance of the business of a
corporation which is a party to the reorganization. As heretofore indicated in
the "Business Purpose" Section set forth above, there are substantial business
reasons for the Proposed Mergers. Accordingly, the Proposed Mergers each satisfy
the business purpose requirement as set forth in the Regulations.
Constructive Exchange of Shares
To avoid the expense and inconvenience of issuing Hibernia shares to itself in
the Bank Merger, and because Peoples' shareholders will have already received
fair value for their shares, the shares of Bank Common Stock obtained by
Hibernia in the Company Merger shall be canceled. (See the preceding discussion
regarding Rev. Rul. 76-528). In the Bank Merger, which occurs simultaneously,
but is to be described in the closing documents covering the Proposed Mergers as
a step following the Company Merger, HNB technically would acquire the assets of
Bank by issuing shares of Hibernia Common Stock to the Bank shareholder,
Hibernia (as the result of the Company Merger).
The tax court has consistently held that the physical transfer of shares is not
necessary if it would be a "meaningless gesture," particularly in situations
where common ownership is present. See, Fowler Hosiery Co., 36 T.C. 201 (1961),
aff'd 301 F.2d 394 (7th Cir. 1962) and William Holton George, 26 T.C. 396
(1956). In fact, the Service has ruled that the absence of an actual physical
exchange of shares does not prevent a transaction from qualifying as a tax- free
reorganization if such an exchange would have been a "meaningless gesture" or a
"useless task." See Rev. Rul. 70-240, 1970-1 C.B. 81 and Rev. Rul. 75-383,
1975-2 C.B. 127. See also Davant v. Commissioner, 366 F.2d 874 (5th Cir. 1966);
James Armour, Inc., 43 T.C. 295 (1964); American Manufacturing Co., 55 T.C. 204
(1970). In addition, the Service held in Revenue Ruling 78-47, 1978-1 C.B. 113,
that a physical issuance of shares was unnecessary in order to eliminate certain
expenses associated with a reorganization.
The Service has also consistently permitted constructive exchanges in private
letter rulings. See e.g., PLR 9247019 (August 24, 1992) and 9137029 (June 13,
1991) citing Revenue Ruling 78-47; PLR 9319017 (February 5, 1993) citing Revenue
Ruling 70-240; PLR 8750071 (September 17, 1987), 8722021 (February 25, 1987),
8620043 (February 14, 1986), 8403028 (October 17, 1983), and 8306010 (November
4, 1982).
Based on the above, the constructive exchange described herein does not prevent
the Bank Merger from qualifying as a tax-free reorganization.
Other Statutory Provisions
Section 368(b) of the Code defines the term "a party to a reorganization" to
include a corporation resulting from a reorganization, and both corporations, in
the case of a reorganization resulting from the acquisition by one corporation
of stock or properties of another.
Section 361(a) of the Code provides that no gain or loss shall be recognized to
a transferor corporation which is a party to a reorganization on any exchange
pursuant to the plan of reorganization solely for stock or securities in another
corporation which is a party to the reorganization. Section 1032 of the Code
provides that no gain or loss shall be recognized to a corporation on the
receipt of money or other property in exchange for stock of such corporation.
Revenue Ruling 57-278, 1957-1 C.B. 124, provides that a subsidiary will not
recognize gain upon the exchange of its parent's stock for property in
connection with a tax-free reorganization. See also Treasury Regulations (Treas.
Regs.) Section 1.1032-2.
Section 354(a)(1) of the Code provides that no gain or loss shall be recognized
if stock or securities in a corporation which is a party to a reorganization
are, in pursuance of the plan of reorganization, exchanged solely for stock or
securities in such corporation or in another corporation which is a party to the
reorganization.
Cash received by shareholders of Peoples Common Stock who dissent, will be
treated as received in exchange for his or her stock subject to the provisions
and limitations of Section 302 of the Code. See Treas. Reg. Sec. 1.354-1(d), Ex.
(3). If, as a result of such distribution, a shareholder owns no Peoples Common
Stock either directly or indirectly through the application of Section 318 of
the Code, the redemption will be treated as a complete termination of interest
under Section 302(b)(3) of the Code and such cash will be treated as a
distribution in exchange for stock under Section 302(a) of the Code.
Section 362(b) of the Code generally provides that if property is acquired by a
corporation in connection with the reorganization, then the basis shall be the
same as it would be in the hands of the transferor, increased by the amount of
gain recognized to the transferor on such transfer.
Section 1223(2) of the Code provides that in determining a taxpayer's holding
period for property, there shall be included the period for which such property
was held by another person, if such property has, for the purpose of determining
gain or loss from a sale or exchange, the same basis in whole or in part in such
taxpayer's hands as it would have had in the hands of such other person.
Section 381 of the Code applies to certain transactions, including those
transactions to which Section 361 of the Code applies, where there is a transfer
in connection with a reorganization described in Section 368(a)(1)(A) or in
Section 368(a)(1)(A) and Section 368(a)(2)(D) of the Code.
FEDERAL INCOME TAX CONSEQUENCES
Based solely upon the Statements of Facts and Representations, the Agreement,
and the Bank Plan of Merger, it is our opinion that the following federal income
tax consequences will result:
In the merger of Peoples with and into Hibernia:
(1) Provided the proposed merger of Peoples with and into Hibernia qualifies as
a statutory merger under Louisiana law, the Company Merger will be a
reorganization within the meaning of Section 368(a)(1)(A) of the Code. Peoples
and Hibernia will each be a party to a reorganization within the meaning of
Section 368(b) of the Code.
(2) No gain or loss will be recognized by Peoples upon the transfer of its
assets to Hibernia in exchange solely for Hibernia Common Stock, cash for
dissenters, if any, and the assumption by Hibernia of the liabilities of
Peoples, since any cash for dissenters will be distributed to the shareholders
(Sections 361(a), 361(b), and 357(a) of the Code).
(3) No gain or loss will be recognized by Hibernia on receipt of the Peoples
assets in exchange for Hibernia Common Stock, cash and the assumption by
Hibernia of the liabilities of Peoples (Section 1032(a) of the Code).
(4) The basis of the assets of Peoples in the hands of Hibernia will, in each
case, be the same as the basis of those assets in the hands of Peoples
immediately prior to the transaction (Section 362(b) of the Code).
(5) The holding period of the assets of Peoples in the hands of Hibernia will,
in each case, include the period for which such assets were held by Peoples
(Section 1223(2) of the Code).
(6) No gain or loss will be recognized, with respect to the receipt of Hibernia
Common Stock, by the shareholders of Peoples who receive solely Hibernia Common
Stock and cash for fractional shares in exchange for their shares of Peoples
Common Stock (Section 354(a)(1) of the Code). With respect to the cash received
in lieu of fractional shares, see Item 12 below.
(7) The cash received by a dissenting shareholder of Peoples in exchange for his
or her Peoples Common Stock will be treated as having been received by such
shareholder as a distribution in redemption of his or her stock subject to the
provisions and limitations of Section 302 of the Code. If, as a result of such
distribution, a shareholder owns no Peoples Common Stock either directly or
indirectly through the application of Section 318, the redemption will be
treated as a complete termination of interest under Section 302(b)(3) and such
cash will be treated as a distribution in exchange for stock under Section
302(a).
(8) The basis of Hibernia Common Stock to be received by the shareholders of
Peoples Common Stock will be, in each instance, the same as the basis of their
stock surrendered in exchange therefor, decreased by the amount of cash
received, if any, and increased by the amount of gain, if any, recognized in the
exchange. (Section 358(a)(1) of the Code).
(9) The holding period of the Hibernia Common Stock to be received by the
shareholders of Peoples Common Stock in the transaction will include in each
instance, the period during which the Peoples Common Stock surrendered in
exchange therefor is held as a capital asset on the date of the surrender
(Section 1223(l) of the Code).
(10) Hibernia will succeed to and take into account those tax attributes of
Peoples described in Section 381(c) of the Code. (Section 381(a) of the Code and
Section 1.381(a)-1 of the Regulations.) These items will be taken into account
by Hibernia subject to the conditions and limitations specified in Sections 381,
382, 383, and 384 of the Code and the Regulations thereunder.
(11) As provided by Section 381(c)(2) of the Code and Section 1.381(c)(2)-1 of
the Regulations, Hibernia will succeed to and take into account the earnings and
profits, or deficit in earnings and profits, of Peoples as of the date of
transfer. Any deficit in the earnings and profits of Peoples will be used only
to offset the earnings and profits accumulated after the date of transfer.
(12) The payment of cash in lieu of fractional share interests of Hibernia
Common Stock will be treated as if the fractional shares were distributed as
part of the exchange and then were redeemed by Hibernia. These cash payments
will be treated as distributions in full payment in exchange for the stock
redeemed, subject to the provisions and limitations of Section 302(a) of the
Code (Rev. Rul. 66-365, 1966-2 C.B. 116 and Rev. Proc. 77- 41, 1977-2 C.B. 574).
(13) Peoples will close its taxable year as of the date of the distribution or
transfer. Hibernia will not close its taxable year merely because of the Company
Merger. (Section 381(b) of the Code).
In the merger of Bank with and into HNB:
(14) Provided the proposed merger of Bank with and into HNB qualifies as
statutory merger under the Bank Merger Act, the acquisition by HNB of
substantially all of the assets of Bank solely in constructive exchange for
Hibernia Common Stock and the assumption by HNB of the liabilities of Bank, will
qualify as a reorganization under the provisions of Sections 368(a)(1)(A) and
368(a)(2)(D) of the Code. Bank, Hibernia and HNB will each be a party to a
reorganization within the meaning of Section 368(b) of the Code.
(15) No gain or loss will be recognized by either Hibernia or HNB upon the
acquisition by HNB of substantially all of the assets of Bank in constructive
exchange for Hibernia Common Stock and the assumption of Bank's liabilities
(Section 1032(a) of the Code). (See Treas. Regs. Section 1.1032-2 and Rev. Rul.
57-278, 1957-1 C.B. 124.)
(16) The basis of the assets of Bank acquired by HNB will be the same in the
hands of HNB as the basis of such assets in the hands of Bank immediately prior
to the exchange (Section 362(b) of the Code).
(17) The basis of the HNB Common Stock in the hands of Hibernia will be
increased by an amount equal to the basis of the Bank assets in the hands of HNB
and decreased by the sum of the amount of the liabilities of Bank assumed by HNB
and the amount of liabilities to which the assets of Bank are subject (Section
1.358-6(c)(1) of Treas.
Regs.).
(18) The holding period of the assets of Bank received by HNB will, in each
instance, include the period for which such assets were held by Bank (Section
1223(2) of the Code).
(19) As provided by Section 381(c) of the Code and Section 1.381(c)(2)-1 of the
Regulations, HNB will succeed to and take into account the earnings and profits,
or deficit in earnings and profits, of Bank as of the date of transfer. Any
deficit in the earnings and profits of Bank or HNB will be used only to offset
the earnings and profits accumulated after the date of transfer.
(20) The shareholder of HNB will recognize no gain or loss upon the constructive
exchange of Bank Common Stock solely for Hibernia Common Stock. (Section
354(a)(1) of the Code.)
(21) Bank will recognize no gain or loss on the transfer of its assets to HNB in
constructive exchange for Hibernia Common Stock and the assumption by HNB of the
liabilities of Bank, as described above. (Sections 361(a) and 357(a) of the
Code.)
(22) Bank will close its taxable year as of the date of the distribution or
transfer. HNB will not close its taxable year merely because of the Bank Merger.
(Section 381(b) of the Code.)
(23) Pursuant to Section 381(a) of the Code and Section 1.381(a)-1 of the
Regulations, HNB will succeed to and take into account the items of Bank
described in Section 381(c) of the Code. These items will be taken into account
by HNB subject to the provisions and limitations specified in Sections 381, 382,
383 and 384 of the Code and Regulations promulgated thereunder.
STATE INCOME TAX CONSEQUENCES
(1) The Louisiana income tax treatment to the shareholders of Peoples will be
substantially the same as the federal income tax treatment to the shareholders
of Peoples.
SCOPE OF OPINION
The scope of this opinion is expressly limited to the federal income tax issues
specifically addressed in (1) through (23) in the section entitled "Federal
Income Tax Consequences" above and (1) in the section entitled "State Income Tax
Consequences" above. Specifically, our opinion has not been requested and none
is expressed with regard to the federal, foreign, state or local income tax
consequences for the shareholders of Hibernia or with regard to the foreign,
state or local income tax consequences (other than those enumerated in (1) above
of "State Income Tax Consequences") for the shareholders of Peoples, Bank, and
HNB. We have made no determination nor expressed any opinion as to any
limitations, including those which may be imposed under Section 382, on the
availability of net operating loss carryovers (or built-in gains or losses), if
any, after the Proposed Mergers, the application (if any) of the alternative
minimum tax to this transaction, nor the application of any consolidated return
or employee benefit issues which may arise as a result of the Proposed Mergers
unless expressly stated above. Further, we have made no determination as whether
Peoples dividend distributions have been sufficient to eliminate any
undistributed personal holding company tax liability, if applicable. We have
made no determination nor expressed any opinion as to the fair market value of
any of the assets being transferred in the Proposed Mergers nor the common
shares being exchanged in the Proposed Mergers. Furthermore, our opinion has not
been requested and none is expressed with respect to any foreign, state or local
tax consequences to Peoples, Bank, Hibernia, and HNB.
Our opinion, as stated above, is based upon the analysis of the Code, the
Regulations thereunder, current case law, and published rulings. The foregoing
are subject to change, and such change may be retroactively effective. If so,
our views, as set forth above, may be affected and may not be relied upon.
Further, any variation or differences in the facts or representations recited
herein, for any reason, might affect our conclusions, perhaps in an adverse
manner, and make them inapplicable. In addition, we have undertaken no
obligation to update this opinion for changes in facts or law occurring
subsequent to the date hereof.
This letter represents our opinions as to the interpretation of existing law
and, accordingly, no assurance can be given that the Service or the courts will
agree with the above analysis.
PART II. INFORMATION NOT REQUIRED IN PROSPECTUS
Item 20. Indemnification of Directors and Officers.
The Louisiana Business Corporation Law ("LBCL") contains two provisions
that directly affect the liability of officers and directors of Louisiana
corporations to the corporations and shareholders whom they serve. Section 83
permits Louisiana corporations to indemnify officers and directors, as well as
certain other individuals who act on behalf of such corporations. Sections 91
and 92 set forth the liability of officers and directors of Louisiana
corporations.
Section 91 of the LBCL provides that officers and directors of Louisiana
corporations are fiduciaries with respect to the corporation and its
shareholders and requires that they discharge the duties of their positions as
such in good faith and with the diligence, care, judgment and skill which
ordinarily prudent men would exercise under similar circumstances in like
positions. Section 91 specifically provides that it is not intended to derogate
from any indemnification permitted under Section 83, discussed below.
Section 92 of the LBCL limits the liability of officers and directors
with respect to certain matters, as well as imposes personal liability for
certain actions, such as the knowing issuance of shares in violation of the
LBCL. Paragraph E of Section 92 permits a director, in the performance of his
duties, to be fully protected from liability in relying in good faith on the
records of the corporation and upon such information, opinions, reports or
statements presented to the corporation, the board of directors, or any
committee of the board by any of the corporation's officers or employees, or by
any committee of the board of directors, or by any counsel, appraiser, engineer
or independent or certified public accountant selected with reasonable care by
the board of directors or any committee thereof or any officer having the
authority to make such a selection or by any other person as to matters the
directors reasonably believe are within such other person's professional or
expert competence and which person is selected with reasonable care by the board
of directors or any committee thereof or any officer having the authority to
make such selection.
Section 83 of the LBCL permits a Louisiana corporation to indemnify any
person who is or was a party or is threatened to be made a party to any action,
suit or proceeding by reason of the fact that he or she was a director, officer,
employee or agent of the corporation, or was serving at the request of the
corporation in one of those capacities for another business. Such persons may be
indemnified against expenses (including attorneys' fees), judgments, fines and
amounts paid in settlement actually and reasonably incurred by such persons in
connection with any such action as long as the indemnified party acted in good
faith and in a manner he or she reasonably believed to be in, or not opposed to,
the best interests of the corporation. With respect to criminal actions or
proceedings, the indemnified person must not only have acted in good faith and
in a manner believed to be in or not opposed to the best interest of the
corporation; he or she must also not have had any reasonable cause to believe
that his or her conduct was unlawful.
The LBCL treats suits by or in the right of the corporation, or
derivative suits, differently from other legal actions. Indemnification is not
permitted in a derivative action for any expenses if the individual seeking
indemnification is adjudged liable for negligence or misconduct in the
performance of his or her duty to the corporation unless specifically ordered by
the court. Otherwise, officers and directors may be indemnified in derivative
actions only with respect to expenses (including attorneys' fees) actually and
reasonably incurred in connection with the defense or settlement of the action.
Indemnification of officers and directors may only be made by the
corporation if the corporation has specifically authorized indemnification after
determining that the applicable standard of conduct has been met. This
determination may be made (i) by the board of directors by a majority vote of a
quorum consisting of directors who were not parties to such action, suit or
proceeding, or (ii) if such a quorum is not obtainable or a quorum of
disinterested directors so directs, by independent legal counsel, or (iii) by
the shareholders.
Indemnification of officers and directors against reasonable expenses is
mandatory under Section 83 of the LBCL to the extent the officer or director is
successful on the merits or in the defense of any action or suit against him
giving rise to a claim of indemnification.
Louisiana corporations are permitted to advance the costs of defense to
officers and directors with respect to claims for which they may be indemnified
under Section 83 of the LBCL. In order to advance such costs, however, such
procedure must be approved by the board of directors by a majority of a quorum
consisting of disinterested directors. In addition, a corporation may only
advance defense costs if it has received an undertaking from the officer or
director to repay the amounts advanced unless it is ultimately determined that
he or she is entitled to be indemnified as otherwise authorized by Section 83.
Louisiana corporations are also specifically permitted to procure
insurance on behalf of officers and directors and former officers and directors
for actions taken in their capacities as such. Insurance coverage may be broader
than the limits of indemnification under Section 83. Also, the indemnification
provided for in Section 83 is not exclusive of any other rights to
indemnification, whether arising from contracts or otherwise.
Hibernia Corporation (the "Registrant") has adopted an indemnification
provision in its articles of incorporation that provides for indemnification of
officers and directors under the circumstances permitted by Louisiana law. The
Registrant's indemnification provision requires indemnification, except as
prohibited by law, of officers and directors of the Registrant or any of its
wholly-owned subsidiaries against expenses, judgments, fines and amounts paid in
settlement actually and reasonably incurred in connection with any action, suit
or proceeding, whether civil or criminal, administrative or investigative
(including any action by or in the right of the Registrant) by reason of the
fact that the person served as an officer or director of the Registrant or one
of its subsidiaries. Officers and directors may only be indemnified against
expenses in cases brought by the officer or director against the Registrant if
the action is a claim for indemnification, the officer or director prevails in
the action, or indemnification is included in any settlement or is awarded by
the court. The indemnification provision further requires the Registrant to
advance defense costs to officers and directors in such suits and proceedings
upon receipt of an undertaking to repay such expenses unless it is ultimately
determined that the officer or director is entitled to indemnification as
authorized by the Article.
The Registrant's Articles of Incorporation further provide that no
director or officer of the Registrant will be personally liable to the
Registrant or its shareholders for monetary damages for breach of fiduciary duty
as an officer or director. This provision is limited to those circumstances in
which such a limitation of liability is permitted under applicable law and would
not be operative in any circumstances in which the law prohibits such an
limitation.
Item 21. Exhibits and Financial Statement Schedules.
(a)
EXHIBIT DESCRIPTION
2 Agreement and Plan of Merger (included as Appendix A to the Proxy
Statement-Prospectus)
3.1 Exhibit 3.1 to the Annual Report on Form 10-K for the fiscal year
ended December 31, 1996, filed with the Commission by the Registrant
(Commission File No. 0-7220) is hereby incorporated by reference
(Articles of Incorporation of the Registrant, as amended to date)
3.2 Exhibit 3.2 to the Annual Report on Form 10-K for the fiscal year
ended December 31, 1996, filed with the Commission by the Registrant
(Commission File No. 0-7220) is hereby incorporated by reference
(By-Laws of the Registrant, as amended to date)
5 Opinion of Patricia C. Meringer, Esq. re: legality of shares
8 Opinion of Ernst & Young LLP, certified public accountants, regarding
certain tax matters (included as Appendix D to the Proxy Statement-
Prospectus)
10.13 Exhibit 10.13 to the Annual Report on Form 10-K for the fiscal year
ended December 31, 1988, filed with the Commission by the Registrant
(Commission File No. 0-7220) is hereby incorporated by reference
(Deferred Compensation Plan for Outside Directors of Hibernia
Corporation and its Subsidiaries, as amended to date)
10.14 Exhibit 10.14 to the Annual Report on Form 10-K for the fiscal
year ended December 31, 1990, filed with the Commission by the
Registrant (Commission File No.0-7220) is hereby incorporated by
reference (Hibernia Corporation Executive Life Insurance Plan)
10.16 Exhibit 4.7 to the Registration Statement on Form S-8 filed with the
Commission by the Registrant (Registration No. 33-26871) is hereby
incorporated by reference (Hibernia Corporation 1987 Stock Option
Plan, as amended to date)
10.34 Exhibit C to the Registrant's definitive proxy statement dated
August 17, 1992 relating to its 1992 Annual Meeting of Shareholders
filed by the Registrant with the Commission is hereby incorporated
by reference (Long- Term Incentive Plan of Hibernia Corporation)
10.35 Exhibit A to the Registrant's definitive proxy statement dated
March 23, 1993 relating to its 1993 Annual Meeting of Shareholders
filed by the Registrant with the Commission is hereby incorporated
by reference (1993 Director Stock Option Plan of Hibernia
Corporation)
10.36 Exhibit 10.36 to the Registrant's Annual Report on Form 10-K for the
fiscal year ended December 31, 1993 filed with the Commission
(Commission file no. 0-7220) is hereby incorporated by reference
(Employment agreement between Stephen A. Hansel and Hibernia
Corporation)
10.37 Exhibit 10.37 to the Registrant's Annual Report on Form 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 Exhibit 10.39 to the Registrant's Annual Report on Form 10-K for the
fiscal year ended December 31, 1996 filed with the Commission
(Commission File No. 0-7220) is hereby incorporated by reference
(Employment Agreement between B.D. Flurry and Hibernia Corporation)
10.40 Exhibit 10.40 to the Registrant's Annual Report on Form 10-K
for the fiscal year ended December 31, 1996 filed with the
Commission (Commission File No. 0-7220) is hereby incorporated by
reference (Split-Dollar Life Insurance Plan of Hibernia
Corporation effective as of July 1996)
10.41 Exhibit 10.41 to the Registrant's Annual Report on Form 10-K for the
fiscal year ended December 31, 1996 filed with the Commission
(Commission File No. 0-7220) is hereby incorporated by
reference (Nonqualified Deferred Compensation Plan for Key
Management Employees of Hibernia Corporation effective as of
July 1996)
10.42 Exhibit 10.42 to the Registrant's Annual Report on Form 10-K
for the fiscal year ended December 31, 1996 filed with the
Commission (Commission File No. 0-7220) is hereby incorporated by
reference (Supplemental Stock Compensation Plan for Key Management
Employees effective as of July 1996)
10.43 Exhibit 10.43 to the Registrant's Annual Report on Form 10-K for the
fiscal year ended December 31, 1996 filed with the Commission
(Commission No. 0-7220) is hereby incorporated by reference
(Nonqualified Target Benefit (Deferred Award) Plan of Hibernia
Corporation effective as of July 1996))
10.44 Exhibit 10.44 to the Registrant's Annual Report on Form 10-K for the
fiscal year ended December 31, 1997 filed with the Commission
(Commission No. 0-7220) is hereby incorporated by reference (Form of
Change of Control Employment Agreement for Executive and Senior
Officers of the Registrant
10.45 Exhibit 10.45 to the Registrant's Annual Report on Form 10-K for the
fiscal year ended December 31, 1997 filed with the Commission
(Commission No. 0-7220) is hereby incorporated by reference
(Employment Agreement between Randall A. Howard and Hibernia
Corporation)
13 Exhibit 13 to the Registrant's Annual Report on Form 10-K for the
fiscal year ended December 31, 1997 filed with the Commission
(Commission File No. 0-7220) is hereby incorporated by reference (1997
Annual Report to security holders of Hibernia Corporation).
21 Exhibit 21 to the Annual Report on Form 10-K of the Registrant for the
fiscal year ended December 31, 1996 filed with the Commission
(Commission File No. 0-7220) is hereby incorporated by reference
(Subsidiaries of the Registrant)
23(a)Consent of Patricia C. Meringer, Esq. (included with Exhibit 5)
23(b)(i)Consent of KPMG Peat Marwick LLP
(ii)Consent of Ernst & Young LLP
(iii)Consent of Professional Bank Services, Inc.
24 Powers of Attorney
99 Form of Proxy of Peoples Holding Corporation
(b)
FINANCIAL STATEMENT SCHEDULES
N/A
Item 22. Undertakings.
The undersigned registrant hereby undertakes:
(i) to file, during any period in which offers or sales are being made
pursuant to this Registration Statement, a post-effective amendment to this
Registration Statement:
(a) to include any prospectus required by Section 10(a)(3) of the
Securities Act of 1933;
(b) to reflect in the prospectus any facts or events arising
after the effective date of the Registration Statement (or the most recent
post-effective amendment hereof) which, individually or in the aggregate,
represent a fundamental change in the information set forth in the Registration
Statement; and
(c) to include any material information with respect to the plan
of distribution not previously disclosed in the Registration Statement or any
material change to such information in the Registration Statement;
(ii) that, for purposes of determining any liability under the
Securities Act of 1933, each such post-effective amendment will be deemed to be
a new registration statement relating to the securities offered therein, and the
offering of such securities at that time will be deemed to be the initial bona
fide offering thereof;
(iii) to remove from registration by means of a post-effective amendment
any of the securities being registered which remain unsold at the termination of
the offering;
(iv) that, for purposes of determining any liability under the
Securities Act of 1933, each filing of the registrant's annual report pursuant
to section 13(a) or section 15(d) of the Securities Exchange Act of 1934 (and,
where applicable, each filing of an employee benefit plan's annual report
pursuant to section 15(d) of the Securities Exchange Act of 1934) that is
incorporated by reference in the registration statement will be deemed to be a
new registration statement relating to the securities offered therein, and the
offering of such securities at that time will be deemed to be the initial bona
fide offering thereof;
(v) that prior to any public reoffering of the securities registered
hereunder through use of a prospectus which is a part of this registration
statement, by any person or party who is deemed to be an underwriter within the
meaning of Rule 145(c), the issuer undertakes that such reoffering prospectus
will contain the information called for by the applicable registration form with
respect to reofferings by persons who may be deemed underwriters, in addition to
information called for by the other Items of the applicable form;
(vi) that every prospectus (a) that is filed pursuant to the preceding
paragraph, or (b) that purports to meet the requirements of section 10(a)(3) of
the Act and is used in connection with an offering of securities subject to Rule
415, will be filed as a part of an amendment to the registration statement and
will not be used until such amendment is effective and that, for purposes of
determining any liability under the Securities Act of 1933, each such
post-effective amendment will be deemed to be a new registration statement
relating to the securities offered therein, and the offering of such securities
at that time will be deemed to be the initial bona fide offering thereof;
(vii) to respond to requests for information that is incorporated by
reference into the prospectus pursuant to Items 4, 10(b), 11 or 13 of Form S-4
within one business day of receipt of such request and to send the incorporated
documents by first class mail or other equally prompt means. This includes
information contained in documents filed subsequent to the effective date of the
registration statement through the date of responding to the request; and
(viii) to supply by means of a post-effective amendment all information
concerning a transaction, and the company being acquired involved therein, that
was not the subject of and included in the registration statement when it became
effective.
SIGNATURES
Pursuant to the requirements of the Securities Act of 1933, the
Registrant has duly caused this Registration Statement to be signed on its
behalf by the undersigned, thereunto duly authorized, in the City of New
Orleans, State of Louisiana, on May 8, 1998.
HIBERNIA CORPORATION
By: /s/ PATRICIA C. MERINGER
Patricia C. Meringer
Senior Vice President and
Secretary
Pursuant to the requirements of the Securities Act of 1933, this
Registration Statement has been signed by the following persons in the
capacities indicated on May 8, 1998.
Signatures Title
*
_____________________________ Chairman of the Board
Robert H. Boh
*
_____________________________ President and Chief Executive
Stephen A. Hansel Officer and Director
*
_____________________________ Chief Financial Officer
Marsha M. Gassan
*
_____________________________ Chief Accounting Officer
Ron E. Samford, Jr.
*
_____________________________ Director
J. Herbert Boydstun
*
_____________________________ Director
J. Terrell Brown
*
_____________________________ Director
E. R. Campbell
*
_____________________________ Director
Richard W. Freeman, Jr.
*
_____________________________ Director
Dick H. Hearin
*
_____________________________ Director
Robert T. Holleman
*
_____________________________ Director
Elton R. King
*
_____________________________ Director
Sidney W. Lassen
*
_____________________________ Director
Laura A. Leach
*
_____________________________ Director
James R. Murphy
*
_____________________________ Director
Donald J. Nalty
*
_____________________________ Director
William C. O'Malley
*
_____________________________ Director
James R. Peltier
*
_____________________________ Director
Robert T. Ratcliff
*
_____________________________ Director
Janee M. Tucker
*
_____________________________ Director
Virginia Eason Weinmann
*
_____________________________ Director
Robert E. Zetzmann
*By: /s/ PATRICIA C.MERINGER
Patricia C. Meringer
Attorney-in-Fact
<PAGE>
EXHIBIT INDEX
Exhibit Sequential Page
Number
5 (a) Opinion of Patricia C. Meringer, Esq.
23 Consent of Patricia C. Meringer, Esq.
(included with Exhibit 5)
23(b)(i) Consent of KPMG Peat Marwick LLP
(ii) Consent of Ernst & Young LLP
(iii) Consent of Professional Bank Services, Inc.
24 Powers of Attorney
99 Form of Proxy of Peoples Holding Corporation
<PAGE>
EXHIBIT 5(a)
May 5, 1998
Securities and Exchange Commission
450 Fifth Street, N.W.
Washington, D.C. 20549
Ladies and Gentlemen:
I am Corporate Counsel and Secretary of Hibernia Corporation (the
"Company") and am delivering this opinion in connection with the registration by
the Company of shares of Class A Common Stock (the "Shares) to be issued by the
Company in a proposed merger (the "Merger") with Peoples Holding Corporation
("Peoples") in which the shareholders of Peoples will receive the Shares in
exchange for their shares of common stock of Peoples, to which registration
statement (the "Registration Statement") this opinion is attached. The Shares
will be reserved for issuance upon the closing of the Merger. The Shares will be
issued to shareholders of Peoples upon consummation of the Merger pursuant to
the registration statement after it has been declared effective by the
Securities and Exchange Commission.
In furnishing this opinion, I or attorneys under my supervision have
examined such documents and have made such investigation of matters of fact and
law as I have deemed necessary or appropriate to provide a basis for the
opinions set forth herein. In such examination and investigation, I have assumed
the genuineness of all signatures, the legal capacity of natural persons, the
authenticity of all documents submitted as originals and the conformity to
original documents of all documents submitted as certified or photostatic
copies.
In rendering this opinion, I do not express any opinion concerning any
law other than the law of the State of Louisiana and the federal law of the
United States, and I do not express any opinion, either implicitly or otherwise,
on any issue not expressly addressed below.
Based upon and limited by the foregoing, and based upon legal
considerations which I deem relevant and upon laws or regulations in effect as
of the date hereof, I am of the opinion that:
1. The Company has been duly incorporated and is validly existing and in
good standing under the laws of the State of Louisiana.
2. The Shares have been duly authorized and either are, or, upon
issuance thereof pursuant to the terms of the offering thereof, will be, validly
issued, fully paid and non-assessable.
I hereby expressly consent to the inclusion of this Opinion as exhibit
to the Registration Statement and to the reference to this Opinion therein.
This opinion is being furnished to you pursuant to the filing of the
Registration Statement and may not be relied upon by any other person or used
for any other purpose, except as provided for in the preceding paragraph.
Very truly yours,
/s/ PATRICIA C.MERINGER
Patricia C. Meringer
Corporate Counsel
and Secretary
PCM/gbp
<PAGE>
Exhibit 23(b)(i)
Independent Auditor's Consent
The Board of Directors
Peoples Holding Corporation:
We consent to the use of our report dated January 16, 1998 related to the
consolidated financial statements of Peoples Holding Corporation and Subsidiary
as of and for the years ended December 31, 1997 and 1996 included herein and to
the reference to our firm under the heading "Experts" in the prospectus relating
to the merger of Peoples Holding Corporation and Hibernia Corporation
constituting part of the Registration Statement on Form S-4 of Hibernia
Corporation to be filed on or about May 8, 1998.
/s/ KPMG PEAT MARWICK LLP
KPMG PEAT MARWICK LLP
Shreveport, Louisiana
May 8, 1998
<PAGE>
Exhibit 23(b)(ii)
Consent of Independent Auditors
We consent to the reference to our firm under the caption "Experts" in this
Registration Statement (Form S-4) and related Prospectus of Hibernia Corporation
for the registration of 3,937,353 shares of its common stock to be issued
pursuant to its proposed merger with Peoples Holding Corporation and to the
incorporation by reference therein of our report dated January 13, 1998, with
respect to the consolidated financial statements of Hibernia Corporation
incorporated by reference in its Annual Report (Form 10-K) for the year ended
December 31, 1997, filed with the Securities and Exchange Commission.
/s/ ERNST & YOUNG LLP
Ernst & Young LLP
New Orleans, Louisiana
May 6, 1998
<PAGE>
Exhibit 23(b)(iii)
Consent of Professional Bank Services
In connection with the proposed merger of Peoples Holding Corporation with and
into Hibernia Corporation, the undersigned, acting as an independent financial
advisor to the common shareholders of Peoples Holding Corporation, hereby
consents to the reference to our firm in the proxy statement and to the
inclusion of our fairness opinion as an exhibit to the proxy statement.
/s/ PROFESSIONAL BANK SERVICES, INC.
Professional Bank Services, Inc.
Louisville, Kentucky
May ___, 1998
<PAGE>
EXHIBIT 24
POWERS OF ATTORNEY
P0WER OF ATTORNEY
KNOW ALL MEN BY THESE PRESENTS, that the undersigned Chairman and
director of Hibernia Corporation, a Louisiana corporation (the "Corporation"),
does hereby name, constitute and appoint Marsha M. Gassan, Patricia C. Meringer
and Ron E. Samford, Jr., and each of them (with full power to each of them to
act alone), his true and lawful agents and attorneys-in-fact, for him and on his
behalf and in his name, place and stead, in any and all capacities, to sign,
execute, acknowledge, deliver, and file (a) with the Securities and Exchange
Commission (or any other governmental or regulatory authority), a Registration
Statement on Form S-4 (or other appropriate form) and any and all amendments
(including post-effective amendments) thereto, with any and all exhibits and any
and all other documents required to be filed with respect thereto or in
connection therewith, relating to the registration under the Securities Act of
1933 of Common Stock of the Corporation to be issued in the merger between the
Corporation and Peoples Holding Corporation ("Peoples") wherein the Corporation
agrees to exchange shares of its common stock for all of the outstanding shares
of common stock of Peoples and merge Peoples into the Corporation, authorized by
resolutions adopted by the Board of Directors on March 25, 1998 and (b) with the
securities agencies or officials of various jurisdictions, all applications,
qualifications, registrations or exemptions relating to such offering under the
laws of any such jurisdiction, including any amendments thereto or other
documents required to be filed with respect thereto or in connection therewith,
granting unto said agents and attorneys, and each of them, full power and
authority to do and perform each and every act and thing requisite and necessary
to be done in and about the premises in order to effectuate the same as fully to
all intents and purposes as the undersigned might or could do if personally
present, and the undersigned hereby ratifies and confirms all that said agents
and attorneys-in-fact, or any of them may lawfully do or cause to be done by
virtue hereof.
IN WITNESS WHEREOF, the undersigned has hereunto set his hand as of the
25th day of March 1998.
/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 Marsha M. Gassan, Patricia C. Meringer and Ron E.
Samford, Jr., and each of them (with full power to each of them to act alone),
his true and lawful agents and attorneys-in-fact, for him and on his behalf and
in his name, place and stead, in any and all capacities, to sign, execute,
acknowledge, deliver, and file (a) with the Securities and Exchange Commission
(or any other governmental or regulatory authority), a Registration Statement on
Form S-4 (or other appropriate form) and any and all amendments (including
post-effective amendments) thereto, with any and all exhibits and any and all
other documents required to be filed with respect thereto or in connection
therewith, relating to the registration under the Securities Act of 1933 of
Common Stock of the Corporation to be issued in the merger between the
Corporation and Peoples Holding Corporation ("Peoples") wherein the Corporation
agrees to exchange shares of its common stock for all of the outstanding shares
of common stock of Peoples and merge Peoples into the Corporation, authorized by
resolutions adopted by the Board of Directors on March 25, 1998 and (b) with the
securities agencies or officials of various jurisdictions, all applications,
qualifications, registrations or exemptions relating to such offering under the
laws of any such jurisdiction, including any amendments thereto or other
documents required to be filed with respect thereto or in connection therewith,
granting unto said agents and attorneys, and each of them, full power and
authority to do and perform each and every act and thing requisite and necessary
to be done in and about the premises in order to effectuate the same as fully to
all intents and purposes as the undersigned might or could do if personally
present, and the undersigned hereby ratifies and confirms all that said agents
and attorneys-in-fact, or any of them may lawfully do or cause to be done by
virtue hereof.
IN WITNESS WHEREOF, the undersigned has hereunto set his hand as of the
25th day of March 1998.
/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 Marsha M. Gassan, Patricia C. Meringer and Ron E.
Samford, Jr., and each of them (with full power to each of them to act alone),
his true and lawful agents and attorneys-in-fact, for him and on his behalf and
in his name, place and stead, in any and all capacities, to sign, execute,
acknowledge, deliver, and file (a) with the Securities and Exchange Commission
(or any other governmental or regulatory authority), a Registration Statement on
Form S-4 (or other appropriate form) and any and all amendments (including
post-effective amendments) thereto, with any and all exhibits and any and all
other documents required to be filed with respect thereto or in connection
therewith, relating to the registration under the Securities Act of 1933 of
Common Stock of the Corporation to be issued in the merger between the
Corporation and Peoples Holding Corporation ("Peoples") wherein the Corporation
agrees to exchange shares of its common stock for all of the outstanding shares
of common stock of Peoples and merge Peoples into the Corporation, authorized by
resolutions adopted by the Board of Directors on March 25, 1998 and (b) with the
securities agencies or officials of various jurisdictions, all applications,
qualifications, registrations or exemptions relating to such offering under the
laws of any such jurisdiction, including any amendments thereto or other
documents required to be filed with respect thereto or in connection therewith,
granting unto said agents and attorneys, and each of them, full power and
authority to do and perform each and every act and thing requisite and necessary
to be done in and about the premises in order to effectuate the same as fully to
all intents and purposes as the undersigned might or could do if personally
present, and the undersigned hereby ratifies and confirms all that said agents
and attorneys-in-fact, or any of them may lawfully do or cause to be done by
virtue hereof.
IN WITNESS WHEREOF, the undersigned has hereunto set his hand as of the
25th day of March 1998.
/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 Marsha M. Gassan, Patricia C. Meringer and Ron E.
Samford, Jr., and each of them (with full power to each of them to act alone),
his true and lawful agents and attorneys-in-fact, for him and on his behalf and
in his name, place and stead, in any and all capacities, to sign, execute,
acknowledge, deliver, and file (a) with the Securities and Exchange Commission
(or any other governmental or regulatory authority), a Registration Statement on
Form S-4 (or other appropriate form) and any and all amendments (including
post-effective amendments) thereto, with any and all exhibits and any and all
other documents required to be filed with respect thereto or in connection
therewith, relating to the registration under the Securities Act of 1933 of
Common Stock of the Corporation to be issued in the merger between the
Corporation and Peoples Holding Corporation ("Peoples") wherein the Corporation
agrees to exchange shares of its common stock for all of the outstanding shares
of common stock of Peoples and merge Peoples into the Corporation, authorized by
resolutions adopted by the Board of Directors on March 25, 1998 and (b) with the
securities agencies or officials of various jurisdictions, all applications,
qualifications, registrations or exemptions relating to such offering under the
laws of any such jurisdiction, including any amendments thereto or other
documents required to be filed with respect thereto or in connection therewith,
granting unto said agents and attorneys, and each of them, full power and
authority to do and perform each and every act and thing requisite and necessary
to be done in and about the premises in order to effectuate the same as fully to
all intents and purposes as the undersigned might or could do if personally
present, and the undersigned hereby ratifies and confirms all that said agents
and attorneys-in-fact, or any of them may lawfully do or cause to be done by
virtue hereof.
IN WITNESS WHEREOF, the undersigned has hereunto set his hand as of the
25th day of March 1998.
/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 Marsha M. Gassan, Patricia C. Meringer and Ron E.
Samford, Jr., and each of them (with full power to each of them to act alone),
his true and lawful agents and attorneys-in-fact, for him and on his behalf and
in his name, place and stead, in any and all capacities, to sign, execute,
acknowledge, deliver, and file (a) with the Securities and Exchange Commission
(or any other governmental or regulatory authority), a Registration Statement on
Form S-4 (or other appropriate form) and any and all amendments (including
post-effective amendments) thereto, with any and all exhibits and any and all
other documents required to be filed with respect thereto or in connection
therewith, relating to the registration under the Securities Act of 1933 of
Common Stock of the Corporation to be issued in the merger between the
Corporation and Peoples Holding Corporation ("Peoples") wherein the Corporation
agrees to exchange shares of its common stock for all of the outstanding shares
of common stock of Peoples and merge Peoples into the Corporation, authorized by
resolutions adopted by the Board of Directors on March 25, 1998 and (b) with the
securities agencies or officials of various jurisdictions, all applications,
qualifications, registrations or exemptions relating to such offering under the
laws of any such jurisdiction, including any amendments thereto or other
documents required to be filed with respect thereto or in connection therewith,
granting unto said agents and attorneys, and each of them, full power and
authority to do and perform each and every act and thing requisite and necessary
to be done in and about the premises in order to effectuate the same as fully to
all intents and purposes as the undersigned might or could do if personally
present, and the undersigned hereby ratifies and confirms all that said agents
and attorneys-in-fact, or any of them may lawfully do or cause to be done by
virtue hereof.
IN WITNESS WHEREOF, the undersigned has hereunto set his hand as of the
25th day of March 1998.
/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 Marsha M. Gassan,
Patricia C. Meringer and Ron E. Samford, Jr., and each of them (with full power
to each of them to act alone), his true and lawful agents and attorneys-in-fact,
for him and on his behalf and in his name, place and stead, in any and all
capacities, to sign, execute, acknowledge, deliver, and file (a) with the
Securities and Exchange Commission (or any other governmental or regulatory
authority), a Registration Statement on Form S-4 (or other appropriate form) and
any and all amendments (including post-effective amendments) thereto, with any
and all exhibits and any and all other documents required to be filed with
respect thereto or in connection therewith, relating to the registration under
the Securities Act of 1933 of Common Stock of the Corporation to be issued in
the merger between the Corporation and Peoples Holding Corporation ("Peoples")
wherein the Corporation agrees to exchange shares of its common stock for all of
the outstanding shares of common stock of Peoples and merge Peoples into the
Corporation, authorized by resolutions adopted by the Board of Directors on
March 25, 1998 and (b) with the securities agencies or officials of various
jurisdictions, all applications, qualifications, registrations or exemptions
relating to such offering under the laws of any such jurisdiction, including any
amendments thereto or other documents required to be filed with respect thereto
or in connection therewith, granting unto said agents and attorneys, and each of
them, full power and authority to do and perform each and every act and thing
requisite and necessary to be done in and about the premises in order to
effectuate the same as fully to all intents and purposes as the undersigned
might or could do if personally present, and the undersigned hereby ratifies and
confirms all that said agents and attorneys-in-fact, or any of them may lawfully
do or cause to be done by virtue hereof.
IN WITNESS WHEREOF, the undersigned has hereunto set his hand as of the
25th day of March 1998.
/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 Marsha M. Gassan, Patricia C. Meringer and Ron E.
Samford, Jr., and each of them (with full power to each of them to act alone),
his true and lawful agents and attorneys-in-fact, for him and on his behalf and
in his name, place and stead, in any and all capacities, to sign, execute,
acknowledge, deliver, and file (a) with the Securities and Exchange Commission
(or any other governmental or regulatory authority), a Registration Statement on
Form S-4 (or other appropriate form) and any and all amendments (including
post-effective amendments) thereto, with any and all exhibits and any and all
other documents required to be filed with respect thereto or in connection
therewith, relating to the registration under the Securities Act of 1933 of
Common Stock of the Corporation to be issued in the merger between the
Corporation and Peoples Holding Corporation ("Peoples") wherein the Corporation
agrees to exchange shares of its common stock for all of the outstanding shares
of common stock of Peoples and merge Peoples into the Corporation, authorized by
resolutions adopted by the Board of Directors on March 25, 1998 and (b) with the
securities agencies or officials of various jurisdictions, all applications,
qualifications, registrations or exemptions relating to such offering under the
laws of any such jurisdiction, including any amendments thereto or other
documents required to be filed with respect thereto or in connection therewith,
granting unto said agents and attorneys, and each of them, full power and
authority to do and perform each and every act and thing requisite and necessary
to be done in and about the premises in order to effectuate the same as fully to
all intents and purposes as the undersigned might or could do if personally
present, and the undersigned hereby ratifies and confirms all that said agents
and attorneys-in-fact, or any of them may lawfully do or cause to be done by
virtue hereof.
IN WITNESS WHEREOF, the undersigned has hereunto set his hand as of the
25th day of March 1998.
/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 Marsha M. Gassan, Patricia C. Meringer and Ron E.
Samford, Jr., and each of them (with full power to each of them to act alone),
his true and lawful agents and attorneys-in-fact, for him and on his behalf and
in his name, place and stead, in any and all capacities, to sign, execute,
acknowledge, deliver, and file (a) with the Securities and Exchange Commission
(or any other governmental or regulatory authority), a Registration Statement on
Form S-4 (or other appropriate form) and any and all amendments (including
post-effective amendments) thereto, with any and all exhibits and any and all
other documents required to be filed with respect thereto or in connection
therewith, relating to the registration under the Securities Act of 1933 of
Common Stock of the Corporation to be issued in the merger between the
Corporation and Peoples Holding Corporation ("Peoples") wherein the Corporation
agrees to exchange shares of its common stock for all of the outstanding shares
of common stock of Peoples and merge Peoples into the Corporation, authorized by
resolutions adopted by the Board of Directors on March 25, 1998 and (b) with the
securities agencies or officials of various jurisdictions, all applications,
qualifications, registrations or exemptions relating to such offering under the
laws of any such jurisdiction, including any amendments thereto or other
documents required to be filed with respect thereto or in connection therewith,
granting unto said agents and attorneys, and each of them, full power and
authority to do and perform each and every act and thing requisite and necessary
to be done in and about the premises in order to effectuate the same as fully to
all intents and purposes as the undersigned might or could do if personally
present, and the undersigned hereby ratifies and confirms all that said agents
and attorneys-in-fact, or any of them may lawfully do or cause to be done by
virtue hereof.
IN WITNESS WHEREOF, the undersigned has hereunto set his hand as of the
25th day of March 1998.
/s/ ROBERT T. HOLLEMAN
Robert T. Holleman
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 Marsha M. Gassan, Patricia C. Meringer and Ron E.
Samford, Jr., and each of them (with full power to each of them to act alone),
his true and lawful agents and attorneys-in-fact, for him and on his behalf and
in his name, place and stead, in any and all capacities, to sign, execute,
acknowledge, deliver, and file (a) with the Securities and Exchange Commission
(or any other governmental or regulatory authority), a Registration Statement on
Form S-4 (or other appropriate form) and any and all amendments (including
post-effective amendments) thereto, with any and all exhibits and any and all
other documents required to be filed with respect thereto or in connection
therewith, relating to the registration under the Securities Act of 1933 of
Common Stock of the Corporation to be issued in the merger between the
Corporation and Peoples Holding Corporation ("Peoples") wherein the Corporation
agrees to exchange shares of its common stock for all of the outstanding shares
of common stock of Peoples and merge Peoples into the Corporation, authorized by
resolutions adopted by the Board of Directors on March 25, 1998 and (b) with the
securities agencies or officials of various jurisdictions, all applications,
qualifications, registrations or exemptions relating to such offering under the
laws of any such jurisdiction, including any amendments thereto or other
documents required to be filed with respect thereto or in connection therewith,
granting unto said agents and attorneys, and each of them, full power and
authority to do and perform each and every act and thing requisite and necessary
to be done in and about the premises in order to effectuate the same as fully to
all intents and purposes as the undersigned might or could do if personally
present, and the undersigned hereby ratifies and confirms all that said agents
and attorneys-in-fact, or any of them may lawfully do or cause to be done by
virtue hereof.
IN WITNESS WHEREOF, the undersigned has hereunto set his hand as of the
25th day of March 1998.
/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 Marsha M. Gassan, Patricia C. Meringer and Ron E.
Samford, Jr., and each of them (with full power to each of them to act alone),
his true and lawful agents and attorneys-in-fact, for him and on his behalf and
in his name, place and stead, in any and all capacities, to sign, execute,
acknowledge, deliver, and file (a) with the Securities and Exchange Commission
(or any other governmental or regulatory authority), a Registration Statement on
Form S-4 (or other appropriate form) and any and all amendments (including
post-effective amendments) thereto, with any and all exhibits and any and all
other documents required to be filed with respect thereto or in connection
therewith, relating to the registration under the Securities Act of 1933 of
Common Stock of the Corporation to be issued in the merger between the
Corporation and Peoples Holding Corporation ("Peoples") wherein the Corporation
agrees to exchange shares of its common stock for all of the outstanding shares
of common stock of Peoples and merge Peoples into the Corporation, authorized by
resolutions adopted by the Board of Directors on March 25, 1998 and (b) with the
securities agencies or officials of various jurisdictions, all applications,
qualifications, registrations or exemptions relating to such offering under the
laws of any such jurisdiction, including any amendments thereto or other
documents required to be filed with respect thereto or in connection therewith,
granting unto said agents and attorneys, and each of them, full power and
authority to do and perform each and every act and thing requisite and necessary
to be done in and about the premises in order to effectuate the same as fully to
all intents and purposes as the undersigned might or could do if personally
present, and the undersigned hereby ratifies and confirms all that said agents
and attorneys-in-fact, or any of them may lawfully do or cause to be done by
virtue hereof.
IN WITNESS WHEREOF, the undersigned has hereunto set his hand as of the
25th day of March 1998.
/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 Marsha M. Gassan, Patricia C. Meringer and Ron E.
Samford, Jr., and each of them (with full power to each of them to act alone),
her true and lawful agents and attorneys-in-fact, for her and on her behalf and
in her name, place and stead, in any and all capacities, to sign, execute,
acknowledge, deliver, and file (a) with the Securities and Exchange Commission
(or any other governmental or regulatory authority), a Registration Statement on
Form S-4 (or other appropriate form) and any and all amendments (including
post-effective amendments) thereto, with any and all exhibits and any and all
other documents required to be filed with respect thereto or in connection
therewith, relating to the registration under the Securities Act of 1933 of
Common Stock of the Corporation to be issued in the merger between the
Corporation and Peoples Holding Corporation ("Peoples") wherein the Corporation
agrees to exchange shares of its common stock for all of the outstanding shares
of common stock of Peoples and merge Peoples into the Corporation, authorized by
resolutions adopted by the Board of Directors on March 25, 1998 and (b) with the
securities agencies or officials of various jurisdictions, all applications,
qualifications, registrations or exemptions relating to such offering under the
laws of any such jurisdiction, including any amendments thereto or other
documents required to be filed with respect thereto or in connection therewith,
granting unto said agents and attorneys, and each of them, full power and
authority to do and perform each and every act and thing requisite and necessary
to be done in and about the premises in order to effectuate the same as fully to
all intents and purposes as the undersigned might or could do if personally
present, and the undersigned hereby ratifies and confirms all that said agents
and attorneys-in-fact, or any of them may lawfully do or cause to be done by
virtue hereof.
IN WITNESS WHEREOF, the undersigned has hereunto set her hand as of the
25th day of March 1998.
/s/ LAURA A. LEACH
Laura A. Leach
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 Marsha M. Gassan, Patricia C. Meringer and Ron E.
Samford, Jr., and each of them (with full power to each of them to act alone),
his true and lawful agents and attorneys-in-fact, for him and on his behalf and
in his name, place and stead, in any and all capacities, to sign, execute,
acknowledge, deliver, and file (a) with the Securities and Exchange Commission
(or any other governmental or regulatory authority), a Registration Statement on
Form S-4 (or other appropriate form) and any and all amendments (including
post-effective amendments) thereto, with any and all exhibits and any and all
other documents required to be filed with respect thereto or in connection
therewith, relating to the registration under the Securities Act of 1933 of
Common Stock of the Corporation to be issued in the merger between the
Corporation and Peoples Holding Corporation ("Peoples") wherein the Corporation
agrees to exchange shares of its common stock for all of the outstanding shares
of common stock of Peoples and merge Peoples into the Corporation, authorized by
resolutions adopted by the Board of Directors on March 25, 1998 and (b) with the
securities agencies or officials of various jurisdictions, all applications,
qualifications, registrations or exemptions relating to such offering under the
laws of any such jurisdiction, including any amendments thereto or other
documents required to be filed with respect thereto or in connection therewith,
granting unto said agents and attorneys, and each of them, full power and
authority to do and perform each and every act and thing requisite and necessary
to be done in and about the premises in order to effectuate the same as fully to
all intents and purposes as the undersigned might or could do if personally
present, and the undersigned hereby ratifies and confirms all that said agents
and attorneys-in-fact, or any of them may lawfully do or cause to be done by
virtue hereof.
IN WITNESS WHEREOF, the undersigned has hereunto set his hand as of the
25th day of March 1998.
/s/ JAMES R. MURPHY
James R. Murphy
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 Marsha M. Gassan, Patricia C. Meringer
and Ron E. Samford, Jr., and each of them (with full power to each of them to
act alone), his true and lawful agents and attorneys-in-fact, for him and on his
behalf and in his name, place and stead, in any and all capacities, to sign,
execute, acknowledge, deliver, and file (a) with the Securities and Exchange
Commission (or any other governmental or regulatory authority), a Registration
Statement on Form S-4 (or other appropriate form) and any and all amendments
(including post-effective amendments) thereto, with any and all exhibits and any
and all other documents required to be filed with respect thereto or in
connection therewith, relating to the registration under the Securities Act of
1933 of Common Stock of the Corporation to be issued in the merger between the
Corporation and Peoples Holding Corporation ("Peoples") wherein the Corporation
agrees to exchange shares of its common stock for all of the outstanding shares
of common stock of Peoples and merge Peoples into the Corporation, authorized by
resolutions adopted by the Board of Directors on March 25, 1998 and (b) with the
securities agencies or officials of various jurisdictions, all applications,
qualifications, registrations or exemptions relating to such offering under the
laws of any such jurisdiction, including any amendments thereto or other
documents required to be filed with respect thereto or in connection therewith,
granting unto said agents and attorneys, and each of them, full power and
authority to do and perform each and every act and thing requisite and necessary
to be done in and about the premises in order to effectuate the same as fully to
all intents and purposes as the undersigned might or could do if personally
present, and the undersigned hereby ratifies and confirms all that said agents
and attorneys-in-fact, or any of them may lawfully do or cause to be done by
virtue hereof.
IN WITNESS WHEREOF, the undersigned has hereunto set his hand as of the
25th day of March 1998.
/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 Marsha M. Gassan, Patricia C. Meringer and Ron E.
Samford, Jr., and each of them (with full power to each of them to act alone),
his true and lawful agents and attorneys-in-fact, for him and on his behalf and
in his name, place and stead, in any and all capacities, to sign, execute,
acknowledge, deliver, and file (a) with the Securities and Exchange Commission
(or any other governmental or regulatory authority), a Registration Statement on
Form S-4 (or other appropriate form) and any and all amendments (including
post-effective amendments) thereto, with any and all exhibits and any and all
other documents required to be filed with respect thereto or in connection
therewith, relating to the registration under the Securities Act of 1933 of
Common Stock of the Corporation to be issued in the merger between the
Corporation and Peoples Holding Corporation ("Peoples") wherein the Corporation
agrees to exchange shares of its common stock for all of the outstanding shares
of common stock of Peoples and merge Peoples into the Corporation, authorized by
resolutions adopted by the Board of Directors on March 25, 1998 and (b) with the
securities agencies or officials of various jurisdictions, all applications,
qualifications, registrations or exemptions relating to such offering under the
laws of any such jurisdiction, including any amendments thereto or other
documents required to be filed with respect thereto or in connection therewith,
granting unto said agents and attorneys, and each of them, full power and
authority to do and perform each and every act and thing requisite and necessary
to be done in and about the premises in order to effectuate the same as fully to
all intents and purposes as the undersigned might or could do if personally
present, and the undersigned hereby ratifies and confirms all that said agents
and attorneys-in-fact, or any of them may lawfully do or cause to be done by
virtue hereof.
IN WITNESS WHEREOF, the undersigned has hereunto set his hand as of the
25th day of March 1998.
/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 Marsha M. Gassan, Patricia C. Meringer and Ron E.
Samford, Jr., and each of them (with full power to each of them to act alone),
his true and lawful agents and attorneys-in-fact, for him and on his behalf and
in his name, place and stead, in any and all capacities, to sign, execute,
acknowledge, deliver, and file (a) with the Securities and Exchange Commission
(or any other governmental or regulatory authority), a Registration Statement on
Form S-4 (or other appropriate form) and any and all amendments (including
post-effective amendments) thereto, with any and all exhibits and any and all
other documents required to be filed with respect thereto or in connection
therewith, relating to the registration under the Securities Act of 1933 of
Common Stock of the Corporation to be issued in the merger between the
Corporation and Peoples Holding Corporation ("Peoples") wherein the Corporation
agrees to exchange shares of its common stock for all of the outstanding shares
of common stock of Peoples and merge Peoples into the Corporation, authorized by
resolutions adopted by the Board of Directors on March 25, 1998 and (b) with the
securities agencies or officials of various jurisdictions, all applications,
qualifications, registrations or exemptions relating to such offering under the
laws of any such jurisdiction, including any amendments thereto or other
documents required to be filed with respect thereto or in connection therewith,
granting unto said agents and attorneys, and each of them, full power and
authority to do and perform each and every act and thing requisite and necessary
to be done in and about the premises in order to effectuate the same as fully to
all intents and purposes as the undersigned might or could do if personally
present, and the undersigned hereby ratifies and confirms all that said agents
and attorneys-in-fact, or any of them may lawfully do or cause to be done by
virtue hereof.
IN WITNESS WHEREOF, the undersigned has hereunto set his hand as of the
25th day of March 1998.
/s/ JAMES R. PELTIER
James R. Peltier
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 Marsha M. Gassan, Patricia C. Meringer and Ron E.
Samford, Jr., and each of them (with full power to each of them to act alone),
his true and lawful agents and attorneys-in-fact, for him and on his behalf and
in his name, place and stead, in any and all capacities, to sign, execute,
acknowledge, deliver, and file (a) with the Securities and Exchange Commission
(or any other governmental or regulatory authority), a Registration Statement on
Form S-4 (or other appropriate form) and any and all amendments (including
post-effective amendments) thereto, with any and all exhibits and any and all
other documents required to be filed with respect thereto or in connection
therewith, relating to the registration under the Securities Act of 1933 of
Common Stock of the Corporation to be issued in the merger between the
Corporation and Peoples Holding Corporation ("Peoples") wherein the Corporation
agrees to exchange shares of its common stock for all of the outstanding shares
of common stock of Peoples and merge Peoples into the Corporation, authorized by
resolutions adopted by the Board of Directors on March 25, 1998 and (b) with the
securities agencies or officials of various jurisdictions, all applications,
qualifications, registrations or exemptions relating to such offering under the
laws of any such jurisdiction, including any amendments thereto or other
documents required to be filed with respect thereto or in connection therewith,
granting unto said agents and attorneys, and each of them, full power and
authority to do and perform each and every act and thing requisite and necessary
to be done in and about the premises in order to effectuate the same as fully to
all intents and purposes as the undersigned might or could do if personally
present, and the undersigned hereby ratifies and confirms all that said agents
and attorneys-in-fact, or any of them may lawfully do or cause to be done by
virtue hereof.
IN WITNESS WHEREOF, the undersigned has hereunto set his hand as of the
25th day of March 1998.
/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 Marsha M. Gassan, Patricia C. Meringer and Ron E.
Samford, Jr., and each of them (with full power to each of them to act alone),
his true and lawful agents and attorneys-in-fact, for him and on his behalf and
in his name, place and stead, in any and all capacities, to sign, execute,
acknowledge, deliver, and file (a) with the Securities and Exchange Commission
(or any other governmental or regulatory authority), a Registration Statement on
Form S-4 (or other appropriate form) and any and all amendments (including
post-effective amendments) thereto, with any and all exhibits and any and all
other documents required to be filed with respect thereto or in connection
therewith, relating to the registration under the Securities Act of 1933 of
Common Stock of the Corporation to be issued in the merger between the
Corporation and Peoples Holding Corporation ("Peoples") wherein the Corporation
agrees to exchange shares of its common stock for all of the outstanding shares
of common stock of Peoples and merge Peoples into the Corporation, authorized by
resolutions adopted by the Board of Directors on March 25, 1998 and (b) with the
securities agencies or officials of various jurisdictions, all applications,
qualifications, registrations or exemptions relating to such offering under the
laws of any such jurisdiction, including any amendments thereto or other
documents required to be filed with respect thereto or in connection therewith,
granting unto said agents and attorneys, and each of them, full power and
authority to do and perform each and every act and thing requisite and necessary
to be done in and about the premises in order to effectuate the same as fully to
all intents and purposes as the undersigned might or could do if personally
present, and the undersigned hereby ratifies and confirms all that said agents
and attorneys-in-fact, or any of them may lawfully do or cause to be done by
virtue hereof.
IN WITNESS WHEREOF, the undersigned has hereunto set his hand as of the
25th day of March 1998.
/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 Marsha M. Gassan, Patricia C. Meringer and Ron E.
Samford, Jr., and each of them (with full power to each of them to act alone),
her true and lawful agents and attorneys-in-fact, for her and on her behalf and
in her name, place and stead, in any and all capacities, to sign, execute,
acknowledge, deliver, and file (a) with the Securities and Exchange Commission
(or any other governmental or regulatory authority), a Registration Statement on
Form S-4 (or other appropriate form) and any and all amendments (including
post-effective amendments) thereto, with any and all exhibits and any and all
other documents required to be filed with respect thereto or in connection
therewith, relating to the registration under the Securities Act of 1933 of
Common Stock of the Corporation to be issued in the merger between the
Corporation and Peoples Holding Corporation ("Peoples") wherein the Corporation
agrees to exchange shares of its common stock for all of the outstanding shares
of common stock of Peoples and merge Peoples into the Corporation, authorized by
resolutions adopted by the Board of Directors on March 25, 1998 and (b) with the
securities agencies or officials of various jurisdictions, all applications,
qualifications, registrations or exemptions relating to such offering under the
laws of any such jurisdiction, including any amendments thereto or other
documents required to be filed with respect thereto or in connection therewith,
granting unto said agents and attorneys, and each of them, full power and
authority to do and perform each and every act and thing requisite and necessary
to be done in and about the premises in order to effectuate the same as fully to
all intents and purposes as the undersigned might or could do if personally
present, and the undersigned hereby ratifies and confirms all that said agents
and attorneys-in-fact, or any of them may lawfully do or cause to be done by
virtue hereof.
IN WITNESS WHEREOF, the undersigned has hereunto set her hand as of the
25th day of March 1998.
/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 Marsha M. Gassan, Patricia C. Meringer and Ron E.
Samford, Jr., and each of them (with full power to each of them to act alone),
her true and lawful agents and attorneys-in-fact, for her and on her behalf and
in her name, place and stead, in any and all capacities, to sign, execute,
acknowledge, deliver, and file (a) with the Securities and Exchange Commission
(or any other governmental or regulatory authority), a Registration Statement on
Form S-4 (or other appropriate form) and any and all amendments (including
post-effective amendments) thereto, with any and all exhibits and any and all
other documents required to be filed with respect thereto or in connection
therewith, relating to the registration under the Securities Act of 1933 of
Common Stock of the Corporation to be issued in the merger between the
Corporation and Peoples Holding Corporation ("Peoples") wherein the Corporation
agrees to exchange shares of its common stock for all of the outstanding shares
of common stock of Peoples and merge Peoples into the Corporation, authorized by
resolutions adopted by the Board of Directors on March 25, 1998 and (b) with the
securities agencies or officials of various jurisdictions, all applications,
qualifications, registrations or exemptions relating to such offering under the
laws of any such jurisdiction, including any amendments thereto or other
documents required to be filed with respect thereto or in connection therewith,
granting unto said agents and attorneys, and each of them, full power and
authority to do and perform each and every act and thing requisite and necessary
to be done in and about the premises in order to effectuate the same as fully to
all intents and purposes as the undersigned might or could do if personally
present, and the undersigned hereby ratifies and confirms all that said agents
and attorneys-in-fact, or any of them may lawfully do or cause to be done by
virtue hereof.
IN WITNESS WHEREOF, the undersigned has hereunto set her hand as of the
25th day of March 1998.
/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 Marsha M. Gassan, Patricia C. Meringer and Ron E.
Samford, Jr., and each of them (with full power to each of them to act alone),
his true and lawful agents and attorneys-in-fact, for him and on his behalf and
in his name, place and stead, in any and all capacities, to sign, execute,
acknowledge, deliver, and file (a) with the Securities and Exchange Commission
(or any other governmental or regulatory authority), a Registration Statement on
Form S-4 (or other appropriate form) and any and all amendments (including
post-effective amendments) thereto, with any and all exhibits and any and all
other documents required to be filed with respect thereto or in connection
therewith, relating to the registration under the Securities Act of 1933 of
Common Stock of the Corporation to be issued in the merger between the
Corporation and Peoples Holding Corporation ("Peoples") wherein the Corporation
agrees to exchange shares of its common stock for all of the outstanding shares
of common stock of Peoples and merge Peoples into the Corporation, authorized by
resolutions adopted by the Board of Directors on March 25, 1998 and (b) with the
securities agencies or officials of various jurisdictions, all applications,
qualifications, registrations or exemptions relating to such offering under the
laws of any such jurisdiction, including any amendments thereto or other
documents required to be filed with respect thereto or in connection therewith,
granting unto said agents and attorneys, and each of them, full power and
authority to do and perform each and every act and thing requisite and necessary
to be done in and about the premises in order to effectuate the same as fully to
all intents and purposes as the undersigned might or could do if personally
present, and the undersigned hereby ratifies and confirms all that said agents
and attorneys-in-fact, or any of them may lawfully do or cause to be done by
virtue hereof.
IN WITNESS WHEREOF, the undersigned has hereunto set his hand as of the
25th day of March 1998.
/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 Marsha M. Gassan,
Patricia C. Meringer and Ron E. Samford, Jr., and each of them (with full power
to each of them to act alone), his true and lawful agents and attorneys-in-fact,
for him and on his behalf and in his name, place and stead, in any and all
capacities, to sign, execute, acknowledge, deliver, and file (a) with the
Securities and Exchange Commission (or any other governmental or regulatory
authority), a Registration Statement on Form S-4 (or other appropriate form) and
any and all amendments (including post-effective amendments) thereto, with any
and all exhibits and any and all other documents required to be filed with
respect thereto or in connection therewith, relating to the registration under
the Securities Act of 1933 of Common Stock of the Corporation to be issued in
the merger between the Corporation and Peoples Holding Corporation ("Peoples")
wherein the Corporation agrees to exchange shares of its common stock for all of
the outstanding shares of common stock of Peoples and merge Peoples into the
Corporation, authorized by resolutions adopted by the Board of Directors on
March 25, 1998 and (b) with the securities agencies or officials of various
jurisdictions, all applications, qualifications, registrations or exemptions
relating to such offering under the laws of any such jurisdiction, including any
amendments thereto or other documents required to be filed with respect thereto
or in connection therewith, granting unto said agents and attorneys, and each of
them, full power and authority to do and perform each and every act and thing
requisite and necessary to be done in and about the premises in order to
effectuate the same as fully to all intents and purposes as the undersigned
might or could do if personally present, and the undersigned hereby ratifies and
confirms all that said agents and attorneys-in-fact, or any of them may lawfully
do or cause to be done by virtue hereof.
IN WITNESS WHEREOF, the undersigned has hereunto set his hand as of the
25th day of March 1998.
/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 Marsha M. Gassan, Patricia C. Meringer
and Ron E. Samford, Jr., and each of them (with full power to each of them to
act alone), her true and lawful agents and attorneys-in-fact, for her and on her
behalf and in her name, place and stead, in any and all capacities, to sign,
execute, acknowledge, deliver, and file (a) with the Securities and Exchange
Commission (or any other governmental or regulatory authority), a Registration
Statement on Form S-4 (or other appropriate form) and any and all amendments
(including post-effective amendments) thereto, with any and all exhibits and any
and all other documents required to be filed with respect thereto or in
connection therewith, relating to the registration under the Securities Act of
1933 of Common Stock of the Corporation to be issued in the merger between the
Corporation and Peoples Holding Corporation ("Peoples") wherein the Corporation
agrees to exchange shares of its common stock for all of the outstanding shares
of common stock of Peoples and merge Peoples into the Corporation, authorized by
resolutions adopted by the Board of Directors on March 25, 1998 and (b) with the
securities agencies or officials of various jurisdictions, all applications,
qualifications, registrations or exemptions relating to such offering under the
laws of any such jurisdiction, including any amendments thereto or other
documents required to be filed with respect thereto or in connection therewith,
granting unto said agents and attorneys, and each of them, full power and
authority to do and perform each and every act and thing requisite and necessary
to be done in and about the premises in order to effectuate the same as fully to
all intents and purposes as the undersigned might or could do if personally
present, and the undersigned hereby ratifies and confirms all that said agents
and attorneys-in-fact, or any of them may lawfully do or cause to be done by
virtue hereof.
IN WITNESS WHEREOF, the undersigned has hereunto set her hand as of the
25th day of March 1998.
/s/ MARSHA M. GASSAN
Marsha M. Gassan
Chief Financial Officer
HIBERNIA CORPORATION
<PAGE>
EXHIBIT 99
PEOPLES HOLDING CORPORATION
PROXY
THIS PROXY IS SOLICITED ON BEHALF OF
THE BOARD OF DIRECTORS OF PEOPLES HOLDING CORPORATION
The undersigned shareholder of Peoples Holding Corporation ("Peoples"), a
Louisiana corporation, hereby constitutes and appoints Ralph S. Williams and
Luther Moore, or either of them, proxies with full power of substitution to vote
and act for the undersigned, as designated below, with respect to the number of
shares of common stock, $10.00 par value, of Peoples the undersigned would be
entitled to vote if personally present at the Special Meeting of Shareholders of
Peoples, which will be held at the office of Peoples Holding Corporation, 618
Main Street, Minden, Louisiana 71055 on June 16, 1998 at 2:00 P.M., and at any
adjournments or postponements thereof. In their discretion, the proxies are
authorized to vote upon such other business as may properly come before the
Special Meeting.
THE SHARES REPRESENTED BY THIS PROXY WILL BE VOTED AS DIRECTED HEREIN BY
THE SHAREHOLDER. IF NO DIRECTION IS SPECIFIED WHEN THE DULY EXECUTED PROXY IS
RETURNED, SUCH SHARES WILL BE VOTED IN ACCORDANCE WITH THE RECOMMENDATION OF THE
BOARD OF DIRECTORS OF PEOPLES, OR, IN THE EVENT A MATTER IS PROPERLY BROUGHT
BEFORE THE SPECIAL MEETING AS TO WHICH THE BOARD OF DIRECTORS HAS MADE NO
RECOMMENDATION, THE PROXIES WILL VOTE THE SHARES IN THEIR DISCRETION.
The Board of Directors of Peoples recommends that you vote FOR the
approval of the Agreement and Plan of Merger between Peoples and Hibernia dated
February 10, 1998 and the merger of Peoples into Hibernia Corporation.
THIS PROXY IS CONTINUED ON THE REVERSE SIDE
PLEASE SIGN ON THE REVERSE SIDE AND RETURN PROMPTLY
IN THE ENCLOSED POSTAGE PAID ENVELOPE
PLEASE MARK YOUR CHOICE LIKE
THIS ___ IN BLUE OR BLACK INK
/---/
--------------------
Common Stock
Approval of the Agreement and Plan of Merger between Peoples Holding
Corporation and Hibernia dated February 10, 1998 and the Merger of
Peoples with and into Hibernia.
For Against Abstain
_______ _______ _______
/______/ /______/ /______/
The undersigned hereby acknowledges receipt of a copy of the
accompanying Notice of Special Meeting of Shareholders and Proxy Statement and
hereby revokes any proxy or proxies heretofore given.
Date_______________________________
Signature__________________________
Please mark, date and sign as your account name appears and return in the
enclosed envelope. If acting as executor, administrator, trustee, guardian, or
in a similar capacity, you should so indicate when signing. If the person
signing is a corporation, partnership or other entity, please sign the full name
of the corporation or partnership or other entity by a duly authorized officer,
partner or other person. If the shares are held jointly, each shareholder named
should sign.
