March 11, 1999
Securities and Exchange Commission
Judiciary Plaza
450 Fifth Street, N. W.
Washington, D. C. 20549
Re: Hibernia Corporation
Current Report on Form 8-K
Commission File No. 1-10294
Dear Sirs:
Pursuant to rules and regulations adopted under the Securities Exchange
Act of 1934, as amended (the "Act"), transmitted hereby for filing, on behalf of
Hibernia Corporation (the "Company"), is a Current Report on Form 8-K.
Pursuant to Section 13(a) of the Act, by copy hereof we are filing with
the New York Stock Exchange, the national securities exchange on which the
Common Stock of the Company is listed and traded, two complete copies, including
exhibits. Pursuant to General Instruction E to Form 8-K, one such complete copy
being filed with the Exchange has been manually signed on behalf of the Company.
Please call the undersigned at (504) 533-2831 if you have any questions
concerning this filing.
Very truly yours,
/s/ Jan M. Macaluso
Jan M. Macaluso
Vice President
JMM/mch
Enclosure
cc: John Keisel
Ron E. Samford, Jr.
<PAGE>
SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
FORM 8-K
CURRENT REPORT
Pursuant to Section 13 or 15(d) of the
Securities Exchange Act of 1934
Date of Report (Date of earliest event reported) March 11, 1999
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March 11, 1999
Hibernia Corporation
(Exact name of issuer as specified in its charter)
Louisiana 1-10294 72-0724532
(State or other (Commission (IRS Employer
jurisdiction of File Number) Identification No.)
organization)
313 Carondelet Street, New Orleans, Louisiana 70130
(Address of principal executive offices) (Zip Code)
Registrant's telephone number, including area code (504) 533-5333
<PAGE>
Item 5. Other Events.
On March 11, 1999, Hibernia Corporation announced that first-quarter
results will include merger-related expenses and an addition to its planned
provision for possible loan losses.
EXHIBIT INDEX
Exhibit Page
Number Description Number
28.42 News Release issued by the Registrant
on March 11, 1999 2
SIGNATURE
Pursuant to the requirements of the Securities Exchange Act of 1934,
the Registrant has duly caused this report to be signed on its behalf by the
undersigned hereunto duly authorized.
HIBERNIA CORPORATION
(Registrant)
Date: March 11, 1999 By: /s/ Marsha M. Gassan
Marsha M. Gassan
Senior Executive Vice President and
Chief Financial Officer
<PAGE>
EXHIBIT 28.42
Page 1
N E W S R E L E A S E
For IMMEDIATE Release March 11, 1999
MEDIA INQUIRES:
Jim Lestell - Senior Vice President
and Manager, Corporate Communications
Office: (504) 533-5482; Home: (504) 488-8826
E-mail: [email protected]
INVESTOR INQUIRIES:
Trisha Voltz--Vice President
and Manager, Investor Relations
Office: (504) 533-2180; Home: (504) 837-8287
E-mail: [email protected]
MERGER- AND CREDIT-RELATED EXPENSES WILL IMPACT
HIBERNIA'S FIRST-QUARTER RESULTS
NEW ORLEANS - Hibernia Corporation today announced that first-quarter
results will include merger-related expenses and an addition to its planned
provision for possible loan losses.
Expenses associated with the March 8 closing of Hibernia's merger with
MarTex Bancshares, Inc., are expected to total approximately $8 million. The
transaction with MarTex, parent of First Service Bank, makes Hibernia No. 1 in
Marshall, Texas, with a 38% deposit market share, anchoring an area in northeast
Texas contiguous to the company's already-strong northwest Louisiana market.
"In 1998, we resumed loan loss provisions with a $26 million expense,
and our 1999 plan calls for us to more than double that amount," said President
and CEO Stephen A. Hansel. "Hibernia is committed to recognizing and resolving
credit-related problems rapidly, even when it comes at the expense of short-term
earnings. We strongly believe that one of the best ways for us to keep the
confidence of our stakeholders over time is to maintain soundness in terms of
reserve coverage of problem loans, reserves to total loans, the nonperforming
asset ratio and the leverage ratio."
Hibernia planned a $12-million loan loss provision in the first
quarter, to which it now expects to add $18 million, bringing the total
first-quarter loan loss provision to $30 million. The increase is primarily
related to one credit, which consists of unsecured loans to a large commercial
customer which Hibernia has served with both lending and deposit services for
more than 25 years and which recently filed for bankruptcy protection. Also
affecting the provision is a loss on a loan made to a company that experienced
internal fraud. That loan had been placed on nonaccrual status in the fourth
quarter of 1998 and disposed of completely through sale and charge-off during
the first quarter of this year, as planned.
Hibernia expects to report first-quarter earnings per share assuming
dilution that are approximately $0.10 lower than the $0.28 consensus estimate by
analysts. This reduction consists of approximately $0.03 per share for the
merger-related costs and approximately $0.07 per share for the additional
provision.
Looking ahead to additional March 31 results, Hansel said that
nonperforming assets could be up as much as $25 million compared to year-end
1998. The reserve for possible loan losses as a percentage of total loans is
projected to be 1.44%, compared to 1.28% at the end of 1998 and 1.39% at March
31, 1998. Reserves as a percentage of nonperforming loans are expected to total
approximately 230%, compared to 319% at year-end 1998 and 425% at the end of the
first quarter of 1998. Consistent with its policy, at year-end 1998, the company
had no commercial loans 90 days or more past due that were not on nonaccrual
status, and the company expects to continue to adhere to this policy.
Among Hibernia's 20-bank peer group, the company's leverage ratio was
in the top 40% at 8.58% for the first quarter of 1998 and at year-end 1998. At
Feb. 28, 1999, it was 8.42% and is projected to remain strong this year.
"Hibernia has generated faster deposit growth than loan growth so far
this year by leveraging its superior distribution network and taking advantage
of the turmoil created by the recent mergers of competitors," Hansel said. For
the first two months of the year, growth in average deposits was 50% greater
than growth in average loans, a reflection of the slowdown in loan growth that
the company expected in 1999. "The net interest margin is expected to reflect
this deposit growth as well as our investment in somewhat thinner-spread assets,
which should improve net interest income but may reduce the margin somewhat from
our fourth-quarter margin of 4.42%."
Hibernia remains in a strong position to grow from its existing base.
"With more than 20% deposit share in 28 of 34 Louisiana markets where we
operate, we have real critical mass relative to competitors. Our specialized
business lines - including treasury management, trust, brokerage, insurance and
debit-card products - are helping to generate more noninterest income."
Hansel believes the strong fee income growth produced in 1998 will
continue in 1999. Results for the first quarter of 1999 will include a $1.7
million gain related to an investment in an energy mezzanine financing by the
parent company.
In 1998, Hibernia grew revenues faster than expenses, improving its
tangible efficiency ratio to 55%. Hansel said expenses so far in 1999 are
tracking plan. Efforts to further improve efficiency continue as the company
works toward a new long-term goal of 50%.
Following the completion of pending mergers, Hibernia would be a
$15.1-billion-asset organization with 258 banking locations in 34 Louisiana
parishes and 13 Texas counties. It would be either first, second or third in
deposit share in 32 Louisiana parishes and six Texas counties. Hibernia's
Louisiana markets represent approximately 82% of the state's population and 86%
of its deposits. Its statewide Louisiana deposit share would be 21%.
The company's common stock (HIB) is listed on the New York Stock
Exchange. Hibernia news releases, product-and-service information and other
useful data can be accessed through the company's Internet site at
http://www.hiberniabank.com. Requests for information about Hibernia products
and services can be e-mailed to [email protected].
# # #
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[Statements in this news release that are not historical facts should
be considered forward-looking statements with respect to Hibernia.
Forward-looking statements of this type speak only as of the date of this news
release. By nature, forward-looking statements involve inherent risk and
uncertainties. Various factors, including, but not limited to, economic
conditions, credit quality, interest rates, loan demand and changes in the
assumptions used in making the forward-looking statements, could cause actual
results to differ materially from those contemplated by the forward-looking
statements. Additional information on factors that might affect Hibernia's
financial results is included in its filings with the Securities and Exchange
Commission.]
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